<PAGE>
- --------------------------------------------------------------------------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------------------------------------------------------------------------------
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
</TABLE>
AMERICAN EXPRESS COMPANY
- -------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT IF OTHER THAN REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
........................................................................
(2) Aggregate number of securities to which transaction applies:
........................................................................
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined):
........................................................................
(4) Proposed maximum aggregate value of transaction:
........................................................................
(5) Total fee paid:
........................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
........................................................................
(2) Form, Schedule or Registration Statement No.:
........................................................................
(3) Filing Party:
........................................................................
(4) Date Filed:
........................................................................
- --------------------------------------------------------------------------------
<PAGE>
[AMERICAN EXPRESS LOGO]
AMERICAN EXPRESS COMPANY
-------------------
2000 NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
-------------------
<PAGE>
ELIMINATE DUPLICATE MAILINGS
The securities laws require us to provide you with an Annual Report. If you
are a shareholder of record and have more than one account in your name or share
the same address as another shareholder of record, you may authorize us to stop
mailing multiple Annual Reports. To do so, please mark the appropriate box on
the proxy card, or follow the instructions when voting by telephone or over the
Internet. We must send the Annual Report to at least one account at your
address. If you own common shares through a bank, broker or other holder of
record and receive more than one Annual Report, please contact the holder of
record to eliminate duplicate mailings.
VIEWING MATERIALS OVER THE INTERNET
You can elect to view future Proxy Statements and Annual Reports over the
Internet instead of receiving paper copies in the mail. If you are a shareholder
of record you can choose this option and save us the cost of producing and
mailing these documents. To do so, please mark the designated box on the proxy
card or follow the instructions if you vote by telephone or over the Internet.
If you own common shares through a bank, broker or other holder of record, the
holder of record may send you instructions on how to view future Proxy
Statements and Annual Reports over the Internet. If you have not received these
instructions and you would like to view these materials over the Internet,
please contact the holder of record. If you choose to view the materials online,
next year you will receive a proxy card or voting instructions with the Internet
address where you can find the materials. Please be aware that you may have to
pay for certain costs in connection with online viewing, such as Internet access
and telephone charges.
<PAGE>
<TABLE>
<S> <C>
[AMERICAN EXPRESS LOGO] AMERICAN EXPRESS COMPANY
200 VESEY STREET
NEW YORK, NEW YORK 10285
</TABLE>
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
<TABLE>
<S> <C>
DATE.............................. Monday, April 24, 2000 at
10:00 A.M.
PLACE............................. American Express Company
200 Vesey Street, 26th floor
New York, New York 10285
ITEMS OF BUSINESS................. (1) To elect Directors.
(2) To approve an amendment to our
Restated Certificate of
Incorporation to permit a
three-for-one stock split.
(3) To approve an amendment to the
American Express Company 1993
Directors' Stock Option Plan.
(4) To ratify our selection of
Ernst & Young LLP as our
independent auditors for 2000.
(5) To vote on a shareholder
proposal relating to political
contributions, which our Board
of Directors opposes.
(6) To transact such other
business that may properly come
before the meeting.
RECORD DATE....................... You can vote if you are a
shareholder of record on March 1,
2000.
</TABLE>
/s/ STEPHEN P. NORMAN
STEPHEN P. NORMAN
Secretary
March 13, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information...................................... 1
Voting Information....................................... 1
Board and Committee Governance........................... 4
Compensation of Directors................................ 7
Ownership of Our Common Shares........................... 10
Item 1 -- Election of Directors.......................... 13
Item 2 -- Proposal to Amend Restated Certificate of
Incorporation to Permit 3-for-1 Stock Split.... 16
Item 3 -- Proposal to Amend the American Express Company
1993 Directors' Stock Option Plan.............. 19
Item 4 -- Selection of Auditors.......................... 22
Item 5 -- Shareholder Proposal........................... 22
Executive Compensation................................... 23
Certain Transactions..................................... 46
Section 16(a) Beneficial Ownership Reporting
Compliance............................................. 48
Directors and Officers Liability Insurance............... 48
Requirements, Including Deadlines, for Submission of
Proxy Proposals, Nomination of Directors and Other
Business of Shareholders................................. 49
Exhibit A -- American Express Company 1993 Directors'
Stock Option Plan........................... 51
</TABLE>
<PAGE>
<TABLE>
<S> <C>
[AMERICAN EXPRESS LOGO] AMERICAN EXPRESS COMPANY
200 VESEY STREET
NEW YORK, NEW YORK 10285
</TABLE>
March 13, 2000
PROXY STATEMENT
GENERAL INFORMATION
- -------------------------------------------------------------------------------
We are providing these proxy materials to you in connection with the
solicitation of proxies by the Board of Directors of American Express Company
for the 2000 Annual Meeting of Shareholders and for any adjournment or
postponement of the meeting. This year we have simplified our proxy materials to
make them easier to understand. In this Proxy Statement, we refer to American
Express Company as 'the Company,' 'we' or 'us.'
We are holding the Annual Meeting at 10:00 a.m. on Monday, April 24, 2000
and invite you to attend in person. If you need special assistance at the
meeting because of a disability, please call Stephen P. Norman, our Corporate
Secretary, at (212) 640-5583.
We intend to mail this Proxy Statement and proxy card to shareholders
starting on or about March 13, 2000.
VOTING INFORMATION
- -------------------------------------------------------------------------------
RECORD DATE
You may vote all shares that you own as of March 1, 2000, which is the
record date for the Annual Meeting. On March 1, 2000, we had 442,737,610 common
shares outstanding. Each common share is entitled to one vote on each matter
properly brought before the meeting.
OWNERSHIP OF SHARES
You may own common shares either (1) directly in your name as the
shareholder of record, which includes shares purchased through our Shareholder's
Stock Purchase Plan (Purchase Plan) and restricted share awards (RSA's) issued
under our long-term incentive plans for employees or (2) indirectly through a
broker, bank or other holder of record, which includes shares in the American
Express Stock Fund of our Incentive Savings Plan (ISP).
If your shares are registered directly in your name, you are the 'holder of
record' of these shares and we are sending these proxy
<PAGE>
materials directly to you. As the holder of record, you have the right to give
your voting proxy directly to us or to vote in person at the meeting. If you
hold your shares in a brokerage account or through a bank or other holder of
record, you hold the shares in 'street name,' and your broker, bank or other
holder of record is sending these proxy materials to you. As a holder in street
name, you have the right to direct your broker, bank or other holder of record
how to vote by filling out a voting instruction form. Regardless of how you hold
your shares, we invite you to attend the meeting.
HOW TO VOTE
Your vote is important. We encourage you to vote promptly, which may save us
the expense of a second mailing. You may vote in one of the following ways:
BY TELEPHONE. If you are located in the U.S., you can vote your shares by
calling the toll-free telephone number on your proxy card. You may vote by
telephone 24 hours a day through Friday, April 21, 2000. The telephone voting
system has easy-to-follow instructions and allows you to confirm that the system
has properly recorded your votes. If you vote by telephone, you do not need to
return your proxy card. If you are an owner in street name, please follow the
instructions that accompany your proxy materials.
OVER THE INTERNET. You can also vote your shares over the Internet. Your
proxy card indicates the web site you may access for Internet voting. You may
vote over the Internet 24 hours a day through Friday, April 21, 2000. As with
telephone voting you will be able to confirm that the system has properly
recorded your vote. If you are an owner in street name, please follow the
instructions that accompany your proxy materials. You may incur costs such as
telephone and Internet access charges if you vote over the Internet.
BY MAIL. If you are a holder of record, you can vote by marking, dating and
signing your proxy card and returning it by mail in the enclosed postage-paid
envelope. If you hold your shares in street name, please complete and mail the
voting instruction card.
AT THE ANNUAL MEETING. The way you vote your shares now will not limit your
right to change your vote at the Annual Meeting if you attend in person. If you
hold your shares in street name, you must obtain a proxy, executed in your
favor, from the holder of record if you wish to vote these shares at the
Meeting.
All shares that have been properly voted and not revoked will be voted at
the Annual Meeting. If you sign and return your proxy card without any voting
instructions, your shares will be voted as our Board of Directors recommends.
2
<PAGE>
REVOCATION OF PROXIES. You can revoke your proxy at any time before your
shares are voted if you (1) submit a written revocation to our Secretary,
Stephen P. Norman, (2) submit a later-dated proxy (or voting instructions if you
hold shares in street name), (3) provide subsequent telephone or Internet voting
instructions or (4) vote in person at the Annual Meeting.
SHARES HELD UNDER PLANS
If you participate in the Purchase Plan, your proxy card shows the number of
shares enrolled in that plan as well as any shares you have acquired through
dividend reinvestment. If you participate in the ISP, your proxy card may
include shares that the plan has credited to your account. To allow sufficient
time for the ISP trustee to vote, the trustee must receive your voting
instructions by April 18, 2000. If the ISP trustee does not receive your
instructions by that date, the trustee will vote your shares in the same
proportion of votes that the trustee receives from other ISP participants.
CONFIDENTIAL VOTING
We maintain the confidentiality of the votes of individual shareholders. We
do not disclose these votes to any member of management, except if we must
disclose them for legal reasons. However, if a shareholder writes a comment on
the proxy card, we will forward the comment to management. In reviewing the
comment, management may learn how the shareholder voted. In addition, the
Inspectors of Election and selected employees of our independent tabulating
agent may have access to individual votes in the normal course of counting and
verifying the vote.
QUORUM AND REQUIRED VOTE
QUORUM. We will have a quorum and will be able to conduct the business of
the Annual Meeting if the holders of a majority of the votes that shareholders
are entitled to cast are present at the Meeting, either in person or by proxy.
VOTES REQUIRED FOR PROPOSALS. To elect directors and adopt the other
proposals, the following proportion of votes is required:
-- To elect the Directors, a plurality of the votes cast.
-- To ratify the selection of our auditors, to adopt the shareholder
proposal and to approve the proposed amendment to the 1993 Directors'
Stock Option Plan, the affirmative vote of a majority of the votes cast.
-- To approve the proposed amendment to our Restated Certificate of
Incorporation, a majority of all outstanding common shares entitled to
vote.
3
<PAGE>
ROUTINE AND NON-ROUTINE PROPOSALS. New York Stock Exchange rules determine
whether proposals presented at shareholder meetings are routine or not routine.
If a proposal is routine, a broker or other entity holding shares for an owner
in street name may vote for the proposal without voting instructions from the
owner. If a proposal is not routine, the broker or other entity may vote on the
proposal only if the owner has provided voting instructions. A 'broker non-vote'
occurs when the broker or other entity is unable to vote on a proposal because
the proposal is not routine and the owner does not provide any instructions.
The New York Stock Exchange has informed us that the election of directors,
ratification of the selection of our auditors, the proposed amendment to our
Restated Certificate of Incorporation and the proposed amendment to the 1993
Directors' Stock Option Plan are routine items. The Exchange has also informed
us that the shareholder proposal is not a routine item.
HOW WE COUNT VOTES. In determining whether we have a quorum, we count
abstentions and broker non-votes as present and entitled to vote.
In counting votes on the proposals:
-- We do not count abstentions or broker non-votes as votes cast for the
election of Directors, but we do count votes withheld for one or more
nominees as votes cast.
-- We do not count abstentions as votes cast for the proposed amendment to
our Restated Certificate of Incorporation. Abstentions have the same
effect as votes against the proposal.
-- We do not count abstentions as votes cast on our proposal to ratify the
selection of auditors, the shareholder proposal or the proposed
amendment to the 1993 Directors' Stock Option Plan. Nor do we count
broker non-votes as votes cast on the shareholder proposal. Abstentions
and broker non-votes will have no impact on the outcome of these
proposals.
COST OF PROXY SOLICITATION
We will pay the expenses of soliciting proxies. Our Directors, officers or
employees may solicit proxies for us in person, or by telephone, facsimile or
electronic transmission. We have hired Morrow & Co. to help us distribute and
solicit proxies. We will pay Morrow $17,500 plus expenses for these services.
BOARD AND COMMITTEE GOVERNANCE
- -------------------------------------------------------------------------------
Our business is managed under the direction of the Board of Directors.
Except for Messrs. Golub and Chenault, all of our Board members are independent
and not employed by the Company. The Board
4
<PAGE>
limits membership of the Audit Committee, Compensation and Benefits Committee
and Committee on Directors to non-employee Directors. We keep Board members
informed of our business through discussions with management, materials we
provide to them, visits to our offices and their participation in Board and
Board committee meetings.
During 1999 the Board of Directors met nine times. The Board of Directors
has six committees. All of our Directors attended 75 percent or more of the
meetings of the Board and Board committees on which they served in 1999.
This table lists our committees, the Directors who currently serve on them
and the number of committee meetings held in 1999.
MEMBERSHIP ON BOARD COMMITTEES
<TABLE>
COMPENSATION COMMITTEE ON PUBLIC
AUDIT AND BENEFITS DIRECTORS EXECUTIVE FINANCE RESPONSIBILITY
<S> <C> <C> <C> <C> <C> <C>
NAME
Mr. Akerson C M M
Ms. Armstrong M M
Mr. Artzt M M
Mr. Bowen M M C
Mr. Chenault M
Mr. Crandall M M
Mr. Golub C
Ms. Greenough M M
Mr. Johnson M M M
Mr. Jordan C M M
Mr. Leschly M M
Mr. Lewis M M M C
Mr. McGinn M M
Mr. Popoff C M M
C = Chair
M = Member
1999 Meetings 6 5 2 0 4 2
</TABLE>
AUDIT COMMITTEE. The Audit Committee has oversight responsibility for the
Company's financial and internal controls and its accounting and public
reporting policies. The Committee:
-- Recommends to the Board the annual selection of our outside auditors.
-- Reviews:
(1) the scope and results of the audit of our financial statements,
including significant audit findings and management's responses;
(2) comments and suggestions the auditors make about our internal controls,
accounting practices or procedures;
5
<PAGE>
(3) the scope of the auditors' plans for the upcoming year; and
(4) significant legal matters.
-- Receives reports on our compliance with laws, regulations and internal
procedures, including compliance with our Code of Conduct, contingent
liabilities and important risks.
COMPENSATION AND BENEFITS COMMITTEE. The Compensation and Benefits Committee
has overall responsibility for our executive officer and other compensation and
benefit programs. The Committee may hire and consult with independent advisors.
The Committee also:
-- Approves the compensation of certain key employees and makes
recommendations to the Board as required.
-- Evaluates the performance of the Chief Executive Officer.
-- Reviews senior management development programs and appraises senior
management performance.
-- Approves material changes to our incentive compensation and benefit
plans and policies.
-- Carries out the Board's responsibilities under our pension, savings and
welfare benefit plans and appoints management employees to serve on the
committees that are responsible for the administration of these plans
and the management of plan assets.
COMMITTEE ON DIRECTORS. The Committee on Directors considers and makes
recommendations to the Board concerning board composition and performance. The
Committee:
-- Recommends individuals for election to the Board and the duties and
membership of Board committees.
-- Advises the Board on the factors it should consider in selecting
Directors.
-- Advises the Board on compensation we pay to our outside Directors and
retirement policies we apply to Board members.
-- Recommends ways for the Board to evaluate its performance and approves
procedures for training and orientation of new Board members.
-- Considers candidates for election to the Board that shareholders
recommend in accordance with the requirements we provide on pages 49-50.
EXECUTIVE COMMITTEE. The Executive Committee may meet instead of the full
Board if the Board needs to take action on a significant matter but is unable to
convene a full meeting on short notice.
FINANCE COMMITTEE. The Finance Committee oversees our investment programs
and reviews our capital needs. The Committee:
-- Considers our investment strategies in light of dynamic economic and
market conditions.
6
<PAGE>
-- Reviews with management our need for capital and how we allocate it.
-- Reviews our dividend policies with management.
-- Consults with management when we consider important transactions, such
as acquiring other businesses, obtaining loans or issuing securities.
PUBLIC RESPONSIBILITY COMMITTEE. The Public Responsibility Committee reviews
our practices that affect the communities we work in or the public interest in
general. For example, the Committee considers our consumer policies, the ways we
create employment opportunities for minorities and women, how we safeguard
confidential information about our customers and our charitable giving programs.
COMPENSATION OF DIRECTORS
- -------------------------------------------------------------------------------
FEES AND EXPENSES
In 1999, we paid each non-employee Director compensation for Board service
as follows:
-- An annual retainer of $64,000, which we reduce by $16,000 if the
Director does not attend at least 75 percent of our Board meetings and
meetings of the committees on which the Director serves.
-- An annual retainer of $10,000 for a Director who is a committee
chairperson.
-- Customary reimbursement of expenses for attending Board, committee and
shareholder meetings.
We do not pay Directors who are also our employees any additional
compensation for serving as a Director.
STOCK PLANS
We have two stock-related plans for our non-employee Directors that link a
portion of Directors' compensation to our share price performance. These plans
are the Directors' Stock Option Plan and the Directors' Stock Plan.
DIRECTORS' STOCK OPTION PLAN. We make an annual 1,000 share stock option
grant to each non-employee Director on the date of the Annual Meeting of
Shareholders. In 1999 we made this grant to each of our 12 non-employee
Directors elected on that day, 11 of whom are also current nominees. The 1999
grant has these features:
-- The exercise price is $134.72 per share, which was the market price of
our common shares on the date we made the grant.
-- Directors may exercise the option for up to ten years.
-- Directors may exercise one-third of the grant after one year, two-thirds
after two years and the full grant after three years.
7
<PAGE>
-- Directors may transfer the option to family members so long as the
Director remains responsible for the payment of taxes when the
transferee exercises the option.
We are asking shareholders to vote on a proposed amendment to this plan that
would change the number of stock option shares we grant annually to reflect
stock splits and other capital adjustments. Please see Item 3.
DIRECTORS' STOCK PLAN. We make an annual grant of 200 common shares to each
non-employee Director for service in the prior year. In two instances we will
grant fewer than 200 shares: (1) we will grant 150 shares to any Director who
attends less than 75 percent of all Board and committee meetings in the prior
year and (2) we will grant 100 shares to any Director who joined the Board after
July 1 of the prior year. In 1999 we granted 200 common shares to each non-
employee Director.
If the shareholders approve the proposed amendment to our Restated
Certificate of Incorporation and the 3-for-1 stock split becomes effective, the
Board expects to change this annual grant to 600 shares, except the grant will
be changed to 450 shares for any Director who attends less than 75 percent of
all Board and committee meetings in the prior year and 300 shares for any
Director who joins the Board after July 1 of the prior year.
DEFERRED COMPENSATION PLAN
Non-employee Directors may elect to defer the receipt of their cash
compensation until a later date. Participating Directors may invest their
deferred amounts in two ways: (1) in a cash account that earns interest based on
our return on equity or (2) in a stock account that we value according to the
performance of our common shares, including reinvested dividends. On page 10 we
show the number of common share equivalent units we have credited thus far to
the eight Directors who participate in this plan.
RETIREMENT BENEFITS
We offer no retirement benefits to non-employee Directors who were elected
after March 31, 1996. However, we pay a retirement benefit to Directors who (1)
began their Board service on or before March 31, 1996, (2) have served on our
Board for at least five years and (3) have never been our employees. The
retirement benefit consists of a payment of $30,000 per year for each year a
Director served on the Board. We will not make payments past a Director's
death. We may provide retirement benefits to Directors who do not qualify under
this plan, but have never done so and have no plans to change this practice.
Nine of the current Directors are eligible to receive retirement benefits.
8
<PAGE>
INSURANCE
We provide our non-employee Directors with group term life insurance
coverage of $50,000 and accidental death and dismemberment insurance coverage of
$300,000. Directors may purchase $50,000 of additional group term life
insurance. In 1999 six Directors purchased this additional insurance.
DIRECTORS' CHARITABLE AWARD PROGRAM
One way that we promote charitable giving is through our Directors'
Charitable Award Program. Under this program we purchase life insurance on the
lives of participating Directors and advisors to the Board. We will receive a
$1,000,000 benefit upon the death of a Director and $500,000 upon the death of
an advisor. We expect to donate one-half of the benefit to the American Express
Foundation for charitable purposes and one-half directly to the charitable
organization that the Director or advisor recommends. The program does not
provide any financial benefit to Directors or advisors and we bear only nominal
cost in running it. In addition, our donation of the death benefits to the
Foundation helps meet the Foundation's funding needs.
OTHER ARRANGEMENTS
Mr. Duncan served as Director and Chairman of the Audit Committee of
American Express Bank Ltd. until April 1999. In 1999 the Bank paid him a
retainer of $12,500, $2,000 for attending board meetings, a retainer of $2,500
for serving as chairman of the Bank's Audit Committee and $1,500 for attending
the Bank's Audit Committee meetings.
Mr. Akerson served as Director and member of the Audit Committee of American
Express Bank Ltd. from May 1999 until January 2000. For this service the Bank
paid Mr. Akerson a retainer of $18,750, $4,000 for attending board meetings, a
retainer of $2,625 for serving as a member of the Bank's Audit Committee and
$2,250 for attending the Bank's Audit Committee meetings.
Mr. Jordan was a senior partner of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
until January 2000. At that time he became of counsel to the firm. The firm
provided legal services to us in 1999 and is providing services to us in 2000 at
customary rates.
In 1999 we introduced the American Express'r' Centurion Card and issued a
Card to each non-employee Director. We waived the $1,000 annual fee for the
first year.
9
<PAGE>
OWNERSHIP OF OUR COMMON SHARES
- --------------------------------------------------------------------------------
This table shows how many American Express common shares certain individuals
and entities beneficially owned on March 1, 2000. These individuals and entities
include: (1) owners of more than 5% of our outstanding common shares, (2) our
current Directors, (3) the five executive officers named in the compensation
tables on pages 32-38 and (4) all current Directors and executive officers as a
group. A person has beneficial ownership over shares if the person has voting or
investment power over the shares or the right to acquire such power within 60
days. Investment power means the power to direct the sale or other disposition
of the shares. Each person has sole voting and investment power over the shares,
except as we describe below. The table also shows the number of common share
equivalent units we have credited to Directors under the Deferred Compensation
Plan.
<TABLE>
<CAPTION>
NUMBER OF SHARES RIGHT TO COMMON SHARE PERCENT OF
NAME OWNED(3)(4)(5) ACQUIRE(6) EQUIVALENTS CLASS(%)
- ---- ---------------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Warren Buffett,
Berkshire Hathaway Inc.
and subsidiaries
1440 Kiewit Plaza
Omaha, Nebraska 68131.... 50,536,900(1) -- -- 11.4%
Edward Johnson 3d,
Abigail P. Johnson and
FMR Corp.
82 Devonshire Street
Boston, Massachusetts
02109.................... 39,184,091(2) -- -- 8.8%
Daniel F. Akerson......... 12,604 1,999 4,904 --
Anne L. Armstrong......... 5,407 5,020 10,228 --
Edwin L. Artzt............ 9,291 2,099 -- --
William G. Bowen.......... 10,204 4,839 -- --
Kenneth I. Chenault....... 248,476 484,476 -- --
Robert L. Crandall........ 1,200 333 478 --
Richard K. Goeltz......... 7,026 32,000 -- --
Harvey Golub.............. 617,072 879,161 -- --
Beverly Sills Greenough... 7,160 3,999 -- --
David R. Hubers........... 43,182 252,666 -- --
F. Ross Johnson........... 19,175 8,559 -- --
Vernon E. Jordan, Jr...... 10,162 3,999 12,966 --
Jan Leschly............... 24,104 1,999 1,756 --
Drew Lewis................ 22,856 1,999 -- --
Jonathan S. Linen......... 185,942(7) 403,711 -- --
Richard A. McGinn......... 1,300 333 -- --
Frank P. Popoff........... 10,225 2,000 667 --
All current Directors and
executive officers
(29 individuals)......... 1,668,927(8) 3,763,086 30,999 --
</TABLE>
- ---------
(1) Based on information Berkshire Hathaway Inc. (Berkshire) provided to us as
of December 31, 1999.
10
<PAGE>
Of the shares listed in the table, National Indemnity Company beneficially
owns 40,085,293 shares. National Indemnity is a subsidiary of Berkshire. Mr.
Buffett, Berkshire and the subsidiaries share voting and investment power
over the shares. Mr. Buffett, his spouse and a trust for which Mr. Buffett is
trustee own 34% of the equity of Berkshire. As a result of this ownership
position in Berkshire, Mr. Buffett may be considered the beneficial owner of
the shares that Berkshire beneficially owns.
In 1995 we signed an agreement with Berkshire designed to ensure that
Berkshire's investment in our company will always be passive. The agreement
remains in effect so long as Berkshire owns 10% or more of our voting
securities. Berkshire made similar commitments to the Board of Governors of
the Federal Reserve System. Berkshire and its subsidiaries have also agreed
to follow our Board of Directors' recommendation in voting Company common
shares they own. This additional agreement remains in effect so long as
Harvey Golub is our Chief Executive Officer and Berkshire owns 5% or more of
our voting securities. With certain exceptions, Berkshire and its
subsidiaries may not sell Company Common shares to any person who owns more
than 5% of our voting securities or who attempts to change the control of the
Company.
(2) Based on information contained in a report on Schedule 13G that FMR Corp.
filed with the SEC. The Schedule contains this information as of December
31, 1999 about beneficial ownership:
-- FMR Corp., Mr. Johnson and Mrs. Johnson had sole power to dispose of
39,184,091 shares, FMR has sole voting power over 1,893,363 shares and
Mr. Johnson had sole voting power over 10,693 shares.
-- Fidelity Management and Research Company beneficially owned 36,631,718
shares and Fidelity Management Trust Company beneficially owned
2,137,492 shares. These entities are subsidiaries of FMR.
-- Fidelity International Limited (FIL) beneficially owned 404,188 shares.
Mr. Johnson and members of his family control FMR. A partnership
controlled by Mr. Johnson and members of his family control
approximately 40% of the voting stock of FIL and Mr. Johnson is Chairman
of FMR and FIL. Accordingly, FMR may be considered to be a beneficial
owner of the shares owned by FIL. FMR disclaims beneficial ownership of
the shares FIL beneficially owns.
(3) This column includes shares held in employee benefit plan accounts on
December 31, 1999 as follows:
11
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME IN PLAN ACCOUNTS
- ---- ----------------
<S> <C>
H. Golub........................... 760
K.I. Chenault...................... 5,220
J.S. Linen......................... 7,753
R.K. Goeltz........................ 26
D.R. Hubers........................ 290
All current Directors
and executive officers........... 27,592
</TABLE>
This column also includes shares held in trust, as follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES
TRUSTEE HELD IN TRUST
- ------- ----------------
<S> <C>
H. Golub........................... 84,454
K.I. Chenault...................... 23,604
</TABLE>
(4) Certain individuals in the table have disclaimed beneficial ownership of
shares. We do not include these shares in the table, which are held as
follows:
-- Mr. Golub's wife is the sole trustee of a trust that holds 6,515 shares.
-- A child of Mr. Golub owns 3,045 shares.
-- Mr. Chenault and his wife are general partners of a limited partnership
that owns 13,588 shares.
-- Mr. Chenault's wife owns 14,996 shares on her own behalf or as trustee
or custodian for their children.
-- All current Directors and executive officers disclaim beneficial
ownership over 44,574 shares.
(5) Certain executive officers hold restricted shares which we include in this
column. The executive may vote the restricted shares, but may not sell or
transfer them during the restricted period. These restrictions lapse over a
period of years ending in 2006. The individuals in the table hold the
following number of restricted shares:
<TABLE>
<CAPTION>
NUMBER OF
NAME RESTRICTED SHARES
- ---- -----------------
<S> <C>
H. Golub........................... 7,556
K.I. Chenault...................... 111,072
R.K. Goeltz........................ 7,000
D.R. Hubers........................ 4,562
All executive officers............. 335,614
</TABLE>
(6) These are shares that executive officers may acquire by exercising stock
options.
12
<PAGE>
(7) Includes 432 shares owned by children of Mr. Linen. Mr. Linen is one of our
executive officers.
(8) On March 1, 2000 our 29 Directors and executive officers beneficially owned
5,432,013 shares, or about 1.2% of our outstanding shares. No individual in
the table beneficially owned more than 1% of our outstanding shares.
SHARE OWNERSHIP GUIDELINES FOR DIRECTORS. The Board of Directors believes
that each Director should have a meaningful equity stake in our Company and
adopted a voluntary share ownership guideline of 10,000 shares. Directors who
joined the Board after February 1994 when the Board adopted the guideline have
five years to acquire the shares.
ITEM 1 -- ELECTION OF DIRECTORS
- -------------------------------------------------------------------------------
Our Board of Directors currently has 14 members. Each member is standing for
re-election, to hold office until the next Annual Meeting of Shareholders,
except for Mrs. Armstrong who is retiring from the Board of Directors in April
2000. If during the year a Director resigns or retires, the Board of Directors,
with input from the Committee on Directors, may elect another Director as a
replacement. The Board may add new members during the year based on a number of
factors, such as the size of the Board and the Board's desire to add fresh
perspectives or expertise.
The Board has appointed Richard K. Goeltz, Stephen P. Norman and Louise M.
Parent as the proxy committee who will vote your shares on your behalf. Their
names appear on the proxy card. These individuals intend to vote for the
election of each of the 13 nominees unless you indicate on the proxy card or
voting instructions that your vote is withheld from any or all of the nominees.
The telephone and Internet voting procedures will include instructions on how to
withhold your vote from any or all nominees. We expect that each nominee will be
able to serve if elected as a Director. However, if any nominee is not able to
serve, the persons named as proxies may vote for another person.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THESE NOMINEES AS
---
DIRECTORS.
We describe below the principal occupation (within brackets) and other
information about our nominees.
13
<PAGE>
DANIEL F. AKERSON Director since 1995 Age 51
[CHAIRMAN AND CHIEF EXECUTIVE OFFICER, NEXTLINK,] a company that operates high
capacity local and long haul fiber optic networks in major markets in the U.S.,
September 1999 to present. Chairman, Nextel Communications, Inc., a domestic and
international digital wireless communications company, March 1996 to present and
Chairman and Chief Executive Officer, March 1996 to August 1999. General
Partner, Forstmann Little & Co., an investment banking firm, 1994 to March 1996.
Member, Board of Directors, America Online, Incorporated.
EDWIN L. ARTZT Director since 1994 Age 69
[FORMER CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER OF THE PROCTER &
GAMBLE COMPANY,] a worldwide consumer products company, September 1999 to
present. Chairman of the Executive Committee, 1995 to September 1999, Chairman
of the Board and Chief Executive, 1990 to 1995. Chairman of the Board, Spalding
Holdings Corp. Director, Delta Air Lines, Inc., Evenflo Co. and GTE Corporation.
Member, The Business Council.
WILLIAM G. BOWEN Director since 1988 Age 66
[PRESIDENT, THE ANDREW W. MELLON FOUNDATION,] a not-for-profit corporation
engaged in philanthropy, 1988 to present. Former President, Princeton
University. Director, Merck, Inc. Member, Board of Trustees, Denison
University. Member, Board of Overseers, TIAA-CREF. Chairman, JSTOR.
KENNETH I. CHENAULT Director since 1997 Age 48
[PRESIDENT AND CHIEF OPERATING OFFICER, AMERICAN EXPRESS COMPANY AND CHIEF
EXECUTIVE OFFICER, AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.,]
February 1997 to present. Vice Chairman of American Express Company, January
1995 to February 1997. President -- USA, American Express Travel Related
Services Company, Inc., 1993 to 1995. Director, American Express Bank, Ltd.,
International Business Machines Corporation, the National Collegiate Athletic
Association and the Arthur Ashe Institute for Urban Health. Trustee, Mount Sinai
NYU Health. Member, Council on Foreign Relations.
ROBERT L. CRANDALL Director since 1999 Age 64
[FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER, AMR CORP. AND AMERICAN AIRLINES,
INC.,] a company engaged in air transportation, information systems and
diversified services, May 1998 to present. Chairman and Chief Executive Officer,
AMR Corp. and American Airlines, Inc., 1985 to 1998. Chairman, The Sabre Group
Holdings, Inc., 1985 to 1998. Director, Halliburton Company, MediaOne Group,
Inc., Celestica Inc., Anixter, Inc. and AMFM Inc.
14
<PAGE>
HARVEY GOLUB Director since 1990 Age 60
[CHAIRMAN AND CHIEF EXECUTIVE OFFICER, AMERICAN EXPRESS COMPANY,] August 1993 to
present. Director, American Express Bank Ltd., Campbell Soup Company and Dow
Jones & Company, Inc. Director, The New York and Presbyterian Hospitals, Inc.
Trustee, Lincoln Center for the Performing Arts. Member, New York City
Partnership, New York Chamber of Commerce and Industry, United Way of New York
City, President's Committee on the Arts and the Humanities and The Business
Roundtable.
BEVERLY SILLS GREENOUGH Director since 1990 Age 70
[CHAIRMAN, LINCOLN CENTER FOR THE PERFORMING ARTS,] 1994 to present. Managing
Director, Metropolitan Opera, 1991 to present. Former General Director and
President, New York City Opera. Director, Time Warner Inc., Human Genome
Sciences, Inc. and Lincoln Center Theater. Member, Board of Trustees, Hospital
for Special Surgery and National Society for Multiple Sclerosis.
F. ROSS JOHNSON Director since 1986 Age 68
[CHAIRMAN AND CHIEF EXECUTIVE OFFICER, RJM GROUP,] a management advisory and
investment firm, 1989 to present. Director, Power Corporation of Canada, Archer
Daniels Midland Company and Gendis, Inc. Former Chairman, Economic Club of New
York. Retired Chairman, RJR/Nabisco, Inc.
VERNON E. JORDAN, JR. Director since 1977 Age 64
[SENIOR MANAGING DIRECTOR, LAZARD FRERES & CO.,] an investment banking firm,
January 2000 to present. Of counsel, Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
attorneys, Washington, D.C. and Dallas, Texas, January 2000 to present and
Senior Partner, 1982 to 1999. Director, Callaway Golf Company, Inc., AMFM Inc.,
Dow Jones & Company, Inc., J.C. Penney Company Inc., Revlon Group, Inc., Ryder
Systems, Inc., Sara Lee Corporation, Union Carbide Corporation and Xerox
Corporation. Trustee, Howard University.
JAN LESCHLY Director since 1997 Age 59
[CHIEF EXECUTIVE AND DIRECTOR, SMITHKLINE BEECHAM PLC,] a company that develops
and markets pharmaceuticals and over-the-counter medicines, 1994 to present.
Director, CBS Corporation, Advisory Board of Daimler Chrysler, British Pharma
Group and Pharmaceutical Research and Manufacturers Association. Trustee,
National Foundation for Infectious Diseases. Member, Emory University Business
School Dean's Advisory Council and The Business Council.
15
<PAGE>
DREW LEWIS Director since 1986 Age 68
[FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER, UNION PACIFIC CORPORATION,] a
transportation company, January 1997 to present. Chairman and Chief Executive
Officer, 1987 through December 1996. Director, FPL Group, Inc., Gannett Co.,
Inc., Millenium Bank and Union Pacific Resources Group Inc.
RICHARD A. MCGINN Director since 1998 Age 53
[CHAIRMAN, CHIEF EXECUTIVE OFFICER AND PRESIDENT, LUCENT TECHNOLOGIES, INC.,] a
company that develops and manufactures communications systems and software, 1996
to present. Executive Vice President of AT&T Corp. and Chief Executive Officer
of AT&T Network Systems Group, 1994 to 1996. Director, Oracle Corporation.
FRANK P. POPOFF Director since 1990 Age 64
[CHAIRMAN OF THE BOARD, THE DOW CHEMICAL COMPANY,] a company that produces
chemicals and chemical products, 1992 to present; Chief Executive Officer, 1987
to 1995. Director, U S WEST, Inc., United Technologies Corp., Chemical Financial
Corporation and Michigan Molecular Institute. Director Emeritus, Indiana
University Foundation. Member, American Chemical Society and The Business
Council.
ITEM 2 -- PROPOSAL TO AMEND RESTATED CERTIFICATE
OF INCORPORATION TO PERMIT 3-FOR-1 STOCK SPLIT
- -------------------------------------------------------------------------------
DESCRIPTION OF PROPOSAL
The Board of Directors has unanimously approved, subject to shareholder
approval, an amendment to our Restated Certificate of Incorporation. The
amendment would increase the number of common shares we can issue from
1,200,000,000 shares to 3,600,000,000 shares and reduce the par value of all
common shares from $.60 per share to $.20 per share. This amendment would permit
us to effectuate a 3-for-1 stock split of our issued and unissued common shares.
The Board of Directors authorized the stock split on January 24, 2000. If
shareholders approve the amendment, the first paragraph of Section 4 of the
Restated Certificate of Incorporation will read as follows:
'1. The aggregate number of shares of all classes which the corporation shall
have the authority to issue is 3,620,000,000 shares, consisting of 20,000,000
preferred shares of the par value of $1.66 2/3 each and 3,600,000,000 common
shares of the par value of $.20 each.'
INFORMATION ABOUT OUTSTANDING AND RESERVED SHARES
On March 1, 2000 we had 442,737,610 common shares outstanding. We had the
following common shares reserved for issuance:
16
<PAGE>
-- 54,301,660 shares for our stock-based compensation and benefit plans,
-- 3,341,633 shares for the Purchase Plan, and
-- 9,359,388 shares for a share purchase agreement with a financial
institution (the Share Purchase Agreement).
We had not issued or reserved the remaining 690,259,709 authorized common
shares. We also had no authorized preferred shares outstanding.
If the amendment and stock split become effective, each outstanding common
share would become three common shares. Of the 3,600,000,000 common shares that
the Restated Certificate of Incorporation would authorize, we would have
1,328,212,830 shares issued and outstanding based on information as of March 1,
2000. In addition, we would have the following common shares reserved for
issuance:
-- 162,904,980 shares for our stock-based compensation and benefit plans,
-- 10,024,899 shares for the Purchase Plan, and
-- 28,078,164 shares for the Share Purchase Agreement.
Following the stock split, we will make equitable adjustments to outstanding
compensation awards to preserve the value of the awards. For example, we will
change an employee or director stock option to purchase 1,000 common shares with
an exercise price of $150 to a stock option to purchase 3,000 common shares with
an exercise price of $50.
PURPOSE OF STOCK SPLIT
The Board of Directors believes that the stock split would result in our
shares trading in a range more consistent with the shares of other major
companies. The Board also believes that the stock split may result in a share
price that is attractive to a greater number of investors.
RIGHTS OF COMMON SHAREHOLDERS
The proposed additional 2,400,000,000 common shares would be part of the
current class of common shares and will have the same rights as the common
shares that are currently issued and outstanding. Shareholders have no
preemptive right to purchase additional shares from us. This means shareholders
have no right to purchase shares to maintain their proportionate ownership in
the Company.
IMPACT OF AMENDMENT AND STOCK SPLIT
The shareholders' proportionate equity interest in the Company will not
change following adoption of the amendment and the stock split. In addition, the
relative proportion of our authorized but unissued shares to
17
<PAGE>
our issued shares would not be affected. We would have the same relative
flexibility to meet future share needs and would not change our stated capital
or surplus accounts.
PLANS FOR ADDITIONAL SHARES
We do not have any specific plans to issue shares at this time other than to
complete the proposed 3-for-1 stock split and to issue some or all of the shares
we have reserved for issuance. However, after approval of the amendment, we may
issue the additional authorized shares without shareholder approval except if we
need such approval to meet legal or stock exchange requirements. We may issue
additional shares for capital funding, future acquisitions of assets or
securities of other companies, employee compensation and benefit plans, future
stock dividends or splits and other corporate purposes.
Although we have no present plans to do so, we could issue authorized common
and preferred shares in transactions that would make a takeover of the Company
more difficult or expensive. The Board of Directors is not recommending the
proposed amendment to the Restated Certificate of Incorporation in response to
any specific proposal made to the Board to take control of the Company and the
Board is not presently recommending to shareholders any anti-takeover measures.
In some situations our issuance of additional common shares could have a
dilutive effect on earnings per share, meaning that earnings per share would be
lower than before the issuance of shares.
NEW YORK STOCK EXCHANGE LISTING
In April 2000 we intend to apply to the New York Stock Exchange for the
continued listing of our shares on a split basis.
EXPECTED EFFECTIVE DATE
If shareholders approve the amendment, we plan to file a Certificate of
Amendment to the Restated Certificate of Incorporation with New York State
authorities as soon as possible after the Annual Meeting. The amendment will be
effective on the date the authorities accept the filing. We expect this date to
be April 25, 2000. If you are a shareholder of record on such date, you will be
entitled to receive two additional common shares for each common share you hold.
We expect to distribute the additional share certificates on May 10, 2000.
Street name shareholders will have the additional shares automatically credited
to their accounts on that date.
TAXES
Our Tax Counsel has advised us that generally under current U.S. federal
income tax laws:
18
<PAGE>
-- You will not have taxable income as a result of the stock split.
-- The cost or other basis of each original share you hold before the split
will be divided 1/3 to the original share and 1/3 to each of the two new
shares.
-- The holding period for each of the three shares will include the period
during which you held the original share.
The laws of other countries or jurisdictions may impose taxes on the receipt
of shares from the stock split. This is not a complete discussion of all the tax
consequences of the stock split and we do not intend it to be tax advice. Please
consult your own tax advisor for advice based on your individual circumstances.
CERTAIN COSTS
If you purchase or sell common shares after the stock split, brokerage
commissions on transactions of the same dollar amount may be higher than before
the split. Transfer taxes, if any, may also be higher.
Any share certificates you presently hold continue to represent the number
of common shares indicated on the certificate. There is no need to exchange your
existing certificates for new ones.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE
---
RESTATED CERTIFICATE OF INCORPORATION TO PERMIT A 3-FOR-1 STOCK SPLIT.
ITEM 3 -- PROPOSAL TO AMEND THE AMERICAN EXPRESS COMPANY 1993 DIRECTORS' STOCK
OPTION PLAN
- -------------------------------------------------------------------------------
In 1993 our shareholders approved the 1993 Directors' Stock Option Plan (the
1993 Plan). Under the 1993 Plan we currently make an annual grant of 1,000 stock
option shares to each non-employee Director on the date of each Annual Meeting
of Shareholders.
PROPOSED AMENDMENT TO THE 1993 PLAN
The Board of Directors has approved an amendment to the 1993 Plan that would
equitably adjust the number of future stock option shares we grant each year
under this plan if our outstanding common shares change as a result of certain
corporate events. These events include a stock split, stock dividend, split-up,
split-off, spin-off, recapitalization, merger, consolidation, rights offering,
combination or exchange of shares, sale of assets, unusual distributions to
shareholders or other extraordinary or unusual events. The purpose of this
adjustment is to maintain the same economic interest that our Directors have in
stock option grants both before and after the corporate event.
19
<PAGE>
The current version of the 1993 Plan automatically adjusts the number of
PREVIOUSLY GRANTED stock option shares following these events. It does not
specifically provide for an adjustment to the number of FUTURE stock option
shares. For example, if shareholders approve the amendment to our Restated
Certificate of Incorporation that we propose in Item 2 of this Proxy Statement,
we will effectuate a 3-for-1 stock split resulting in each outstanding common
share becoming three shares. The 1993 Plan currently provides that stock options
previously granted to Directors under that plan would automatically adjust to
enable each Director to maintain a similar relative equity interest.
To maintain the same incentive value that a 1,000 share stock option grant
provides before the stock split, we would need to change future grants to 3,000
stock option shares after the split. The new 3,000 share option grant would
allow a Director to purchase the same relative equity interest in the Company as
the Director could purchase before the split with a 1,000 share option grant.
The proposed amendment to the 1993 Plan would permit the Board of Directors to
make this equitable adjustment for a stock split as well as equitable
adjustments to reflect other capital transactions. If shareholders approve the
proposal in Item 2 as well as the proposed amendment to the 1993 Plan, the
annual grant of 1,000 stock option shares under the 1993 Plan will increase to
3,000 stock option shares commencing with the April 2001 grant.
DESCRIPTION OF THE 1993 PLAN
We attach the text of the 1993 Plan with the proposed amendment as
Exhibit A. We describe the main features of the 1993 Plan below, but you should
read the full text of the 1993 Plan. The amendment will not be effective unless
the shareholders approve it. If the shareholders approve the amendment, we will
adopt it regardless of the vote on the proposed amendment to our Restated
Certificate of Incorporation described in Item 2 of this Proxy Statement.
Currently, we make a grant of 1,000 stock option shares to each non-employee
Director on the date of the Annual Meeting of Shareholders. The exercise price
is the fair market value of our common shares on the date we make the grant.
Directors may exercise their options for up to ten years. They may exercise
one-third of the grant after one year, two-thirds after two years and the full
grant after three years. If a Director leaves the Board for any reason other
than death, the Director's options will become vested and the Director will have
up to three years to exercise them. Following the death of any Director, the
Director's estate has one year to exercise options that are vested on the date
of death. Directors may transfer the
20
<PAGE>
options to family members so long as the Director is responsible for the payment
of taxes when the transferee exercises the option.
We receive no money or other consideration when we grant these options.
Directors must pay the exercise price in full when they exercise them. Directors
may pay the exercise price in cash, check or common shares they already own.
The 1993 Plan ends in April 2003. The Board of Directors administers it.
The closing price of our common shares on the New York Stock Exchange on
March 1, 2000 was $135.50 per share.
TAXES
Our Tax Counsel has advised us that generally under current U.S. federal
income tax laws:
-- Directors do not have taxable income when they receive stock options
under the 1993 Plan.
-- When a Director exercises a stock option, the Director has taxable
income equal to the fair market value of the shares acquired from the
exercise less the exercise price.
-- The Director's tax basis in the shares acquired is equal to the fair
market value of these shares on the date of exercise.
-- The Director's holding period for capital gains purposes starts on the
date the Director exercises the option.
-- We may deduct from our corporate federal income taxes an amount equal to
the taxable income the Director has when the Director exercises the
option.
This is not a complete discussion of all the tax aspects of participation in
the 1993 Plan and we do not intend it to be tax advice. The consequences may
change if tax laws or guidance change in the future. Participants in the 1993
Plan should consult their own advisors for advice based on their individual
circumstances.
SHARES WE MAY ISSUE
Currently, we may issue no more than 250,000 stock option shares under the
1993 Plan. If shareholders approve both our proposal in Item 2 of this Proxy
Statement and our proposed amendment to the 1993 Plan, this number will increase
to 750,000 shares. A total of 190,506 stock option shares would be outstanding
under the 1993 Plan at the time both proposals become effective, leaving 559,494
stock option shares available for issuance.
21
<PAGE>
NEW PLAN BENEFITS
The following table shows the number of common shares underlying the stock
option grants we will make in 2000 to all of our non-employee Directors as a
group. We assume that on April 24, 2000 we will grant an option to purchase
1,000 common shares to each of our 11 non-employee Directors. The April 24, 2000
grant will be made before the date the 3-for-1 stock split would become
effective. The stock split would result in each of these 1,000 share stock
option grants changing to a 3,000 share stock option grant.
AMERICAN EXPRESS COMPANY 1993 DIRECTORS' STOCK OPTION PLAN
<TABLE>
<CAPTION>
NUMBER OF COMMON SHARES
GROUP UNDERLYING STOCK OPTIONS
- ----- ------------------------
<S> <C>
Non-Employee Director Group.......... 11,000
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE AMERICAN
---
EXPRESS COMPANY 1993 DIRECTORS' STOCK OPTION PLAN.
ITEM 4 -- SELECTION OF AUDITORS
- -------------------------------------------------------------------------------
The Board of Directors has appointed Ernst & Young LLP as our independent
auditors for 2000. We are asking shareholders to ratify the Board's selection.
Ernst & Young LLP and a predecessor firm have served as our independent
auditors since 1975. We paid them $10.5 million in audit fees for 1999.
Representatives of Ernst & Young will be present at the Annual Meeting to answer
questions. They will also have the opportunity to make a statement if they wish.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF ITS
---
SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT AUDITORS FOR 2000.
ITEM 5 -- SHAREHOLDER PROPOSAL
- -------------------------------------------------------------------------------
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue, N.W.,
Suite 215, Washington, D.C. 20037, record owner of 148 common shares, has
advised us that she plans to introduce the following resolution:
'RESOLVED: 'That the stockholders recommend that the Board direct management
that within five days after approval by the shareholders of this proposal, the
management shall publish in newspapers of general circulation in the cities of
New York, Washington, D.C., Detroit, Chicago, San Francisco, Los Angeles,
Dallas, Houston and Miami, and in the Wall Street Journal and U.S.A. Today, a
detailed statement of each contribution made by the Company, either directly or
indirectly, within the immediately preceding fiscal year, in respect of a
political campaign, political party, referendum or citizens' initiative, or
22
<PAGE>
attempts to influence legislation, specifying the date and amount of each such
contribution, and the person or organization to whom the contribution was made.
Subsequent to this initial disclosure, the management shall cause like data to
be included in each succeeding report to shareholders.' 'And if no such
disbursements were made, to have that fact publicized in the same manner.'
REASONS: 'This proposal, if adopted, would require the management to advise
the shareholders how many corporate dollars are being spent for political
purposes and to specify what political causes the management seeks to promote
with those funds. It is therefore no more than a requirement that the
shareholders be given a more detailed accounting of these special purpose
expenditures that they now receive. These political contributions are made with
dollars that belong to the shareholders as a group and they are entitled to know
how they are being spent.' 'Last year the owners of 9,912,349 shares,
representing approximately 3.1% of shares voting, voted FOR this proposal.'
'If you AGREE, please mark your proxy FOR this resolution.'
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL FOR
-------
THESE REASONS:
We maintain an active government affairs program in furtherance of our
business interests. Like many corporations, we also maintain a political action
committee in which our employees participate. In overseeing these activities, we
fully comply with the federal and state laws which regulate corporate
participation in political affairs. We also comply with all applicable federal
and state reporting requirements which have been established to assure
appropriate disclosure of political contributions. If we publish the
expenditures and details of each political initiative in the 11 newspapers
called for in the proposal, we would incur needless expense and provide
information that is of little value to our investors.
EXECUTIVE COMPENSATION
- -------------------------------------------------------------------------------
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Benefits Committee has overall responsibility for
determining the compensation of the Company's executive officers as well as for
other compensation programs. No member of the Committee is an employee of the
Company or participates in any of its executive compensation programs. The
Committee considers data provided by independent compensation consultants. The
Committee also obtains input from the full Board before taking action on
executive officer compensation.
23
<PAGE>
OBJECTIVES
The Company has designed its executive compensation programs to:
-- Attract, motivate and retain the most competent executives;
-- Link the financial interests of the Company's executives and its
shareholders; and
-- Provide rewards for behavior consistent with the Company's values.
To meet these objectives, the Committee considers objective and subjective
factors in making pay decisions for executive officers of the Company. These
factors range from competitive pay practices to its judgment of business and
individual performance.
EXECUTIVE OFFICER COMPENSATION PROGRAMS AND POLICIES
COMPENSATION GUIDELINES. The Committee sets executive compensation
guidelines for base salary, annual incentive and long-term incentive awards for
each executive officer position. The Committee uses three factors to set these
guidelines: (1) competitive pay practices, (2) job scope and responsibility and
(3) the Company's need to attract, retain and reward executive talent. The
importance of each factor varies by individual. For 1999 the Committee reviewed
competitive pay practices at approximately 50 companies that compete with the
Company in business or for executive talent. The Standard & Poor's (S&P) 500
Index includes substantially all of these companies and the S&P Financial Index
includes approximately one-third of these companies. When the Committee approves
compensation, it considers these guidelines, current competitive market data and
its judgment of Company, business unit and individual performance as described
below.
BASE SALARY. The Committee reviews possible merit increases in salary every
18 months or longer. During this review the Committee considers the compensation
guideline for the executive officer position and individual performance. The
Committee may also increase the base salary of executives who are promoted or
change jobs within the executive group or in special circumstances.
ANNUAL INCENTIVE AWARDS. The Company's annual incentive award program
compensates executive officers for annual performance. The Committee approved
1999 annual incentive awards for the named executives in amounts ranging from
1.4 to 2.7 times their annual incentive award guidelines and for all executive
officers in amounts ranging from 1.2 to 2.7 times their annual incentive award
guidelines.
For 1999 the Company paid 1999 annual incentive awards to eight executive
officers, including the named executives, under an award structure designed to
preserve the Company's tax deductions under the
24
<PAGE>
Million Dollar Cap. (The Company's Million Dollar Cap policy is described on
pages 27-28.) The awards contain a formula based on the Company's 1999 return on
equity and growth in earnings per share. The Company may pay the awards in cash
or a combination of cash and restricted shares. In assessing performance the
Committee applied the formula to determine the maximum amount payable and then
used its judgment about annual goal and leadership performance to make actual
awards below these maximum values. The Committee gave equal weight to the goal
and leadership categories.
The Committee evaluated progress toward goals based on these areas:
-- SHAREHOLDER VALUE (50% weight). Includes 1999 shareholder return,
earnings growth, revenue growth and return on equity.
-- CUSTOMER SATISFACTION (25% weight). Includes customer survey results,
expansion and retention of customer base and development of products and
services.
-- EMPLOYEE SATISFACTION (25% weight). Includes 1999 employee survey
results and the Company's and the business units' success in making
progress toward long-term, world class targets.
The Committee evaluated leadership by considering a variety of factors, such
as innovation, strategic vision, customer focus, management effectiveness,
teamwork, integrity, diversity, developing others and managing change, without
assigning weights to these factors.
The Company paid to other executive officers 1999 annual incentive awards
that were not tied to a formula because the Million Dollar Cap limits would not
typically apply to their compensation. The Committee based the annual incentive
awards for these executives on the same goal and leadership factors described
above.
The Committee used similar criteria to evaluate the goal and leadership
performance of Messrs. Golub and Chenault. The specific factors the Committee
used to evaluate Mr. Golub's goal performance are described on pages 28-30. The
Committee also used these factors in evaluating Mr. Chenault's performance. The
Committee did not assign weights to the goal categories in evaluating their
performance. In addition, the Committee evaluated their leadership based on its
judgment of their overall leadership of the senior management team and the
Company.
LONG-TERM INCENTIVE AWARDS. The Company's long-term incentive award program
rewards executive officers for Company, business unit and individual performance
over more than one year. In 1999 regular long-term awards included stock option
and Portfolio Grant (PG) awards. The Committee approved awards in amounts that
were consistent with
25
<PAGE>
compensation guidelines after reviewing the size and value of other stock option
and PG awards held by each executive officer.
STOCK OPTIONS. Ten-year stock options reward executive officers if the
Company's share price increases for all shareholders. Executives may exercise
one-third of the 1999 grant after two years, two-thirds after three years and
the full grant after four years. Each of these installments vests one year later
than pre-1999 stock option grants. The Committee expects this longer vesting
schedule will provide additional incentive for executive officers to remain with
the Company. For individual estate and tax planning, the Committee approved
changes that permit executive officers to transfer their stock options to
certain family members. Transferees may exercise options only if the executive
remains responsible for the taxes due on exercise and vesting and other
requirements are met.
PG AWARDS. PG awards in 1999 for executive officers included PG-X awards and
Transition PG awards. The PG awards are designed to preserve the Company's tax
deductions under the Million Dollar Cap. The awards contain a formula based on
the Company's 1999-2001 earnings or earnings per share growth, revenue growth,
average return on equity and total shareholder return compared to the total
return of the S&P Financial Index. The Committee may adjust downward the results
produced by these performance measures based on its judgment of Company,
business unit and individual performance.
To receive payment, PG-X award holders must be employed by the Company
through the payment date in September 2003. This vesting period is 18 months
longer than for prior PG awards. Similar to the vesting change for 1999 stock
options, the Committee expects this longer vesting schedule will provide
additional incentive for executive officers to remain with the Company. In 1999
the Committee also granted 'Transition PG' awards that have a scheduled payment
date in September 2002. The Committee made these one-time awards to recognize
that the PG-X awards would have vested in 2002 if they had the same vesting
design of prior PG awards. To partially offset these longer vesting periods, the
Company will increase the initial payout values of PG-X and Transition PG awards
by 5%.
ADDITIONAL AWARDS. The Committee may in its judgment grant short-or
long-term awards for special contributions or job promotions, to attract new
hires to the Company, to retain executives or in special circumstances. In 1999
the Committee granted restricted shares to 11 executives to provide a strong
retention incentive linked to share price. These awards vest in installments
ending six years from the grant date. The Committee also granted awards to
Messrs. Golub and Chenault which are described below under 'Special Awards.'
26
<PAGE>
DEFERRAL AND OTHER PROGRAMS. Under the annual Pay for Performance Deferral
Program, executives may defer part of their current compensation to a later
date. Each year the Company adds to or subtracts from the deferred compensation
an amount based on a schedule linked to the Company's return on equity. The
Company also provides executive officers with pension, profit sharing, incentive
savings, life insurance, perquisite and other benefits consistent with market
practices.
SHARE OWNERSHIP. The Company's share ownership policy requires about 150
senior officers to meet share ownership targets. The program includes these key
features:
-- Participants have a share ownership target based on a multiple of their
base salary, ranging from three times base salary for certain
participants to 20 times for Mr. Golub.
-- As an incentive to maximize shareholder value, a participant may count
toward his or her target the value of owned shares, 50% of the
unrealized gain in stock options and 50% of the market value of
restricted shares, with market value based on the market price of the
Company's common shares.
-- The Committee expects participants to meet their targets within five
years and to make pro rata progress each year.
DETRIMENTAL CONDUCT. To help protect the Company's competitive position,
about 675 employees have signed agreements that require them to forfeit
compensation they receive through stock option, restricted share and Portfolio
Grant awards if they engage in behavior that is detrimental to the Company.
Detrimental behavior covers conduct such as working for certain competitors,
soliciting customers or employees after employment ends and disclosure of
confidential information.
MILLION DOLLAR CAP. Current U.S. tax law has a $1,000,000 tax deduction
limit on compensation the Company pays to the Chief Executive Officer and the
four other most highly compensated executive officers. (In this Proxy Statement
we refer to these five executives as the 'named executives.') The limit does not
apply to 'performance-based' compensation. Compensation is 'performance-based'
if the Company can pay it only if objective performance criteria set by the
Committee are met. The Committee may use discretion to set actual compensation
below the maximum amount calculated by application of the performance criteria.
The Committee's general policy is to structure compensation programs that
allow the Company to fully deduct the compensation under the Million Dollar Cap
rules. The Committee also believes that the Company needs flexibility to meet
its objectives, even if the Company may not deduct all of the compensation. The
Company expects that compensation from the 1999 annual incentive, stock option,
PG-X
27
<PAGE>
and Transition PG awards will be treated as performance-based and be deductible.
The Company also expects that the Million Dollar Cap limitations will apply to
compensation from the vesting of certain restricted share awards granted to
covered individuals for retention purposes.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee made decisions about Mr. Golub's 1999 compensation and awards
after considering input from the full Board. These decisions were in accordance
with the Company's programs and included the following:
SALARY. Mr. Golub's salary did not increase in 1999.
ANNUAL INCENTIVE. The Committee approved a 1999 annual incentive award for
Mr. Golub that consisted of $2,400,000 cash and 7,556 restricted shares. This
award had a final value under the program of 2.7 times his annual incentive
award guideline. The restricted shares vest in annual installments over three
years. The Committee determined this award based on Mr. Golub's goal and
leadership performance, the Company's results and the economic and competitive
environment in 1999.
Overall, the Committee concluded that the Company achieved excellent results
in 1999. The Committee considered these factors to be most important with no
particular weightings given among the factors:
FINANCIAL PERFORMANCE
-- FINANCIAL MEASURES. The Company met or exceeded its long-term
financial targets. Compared with 1998, the Company's 1999 net
income increased 16%, revenue (on a managed basis) increased 13%
and diluted earnings per share increased 14% (excluding one-time
items in 1998). 1999 return on equity was 25%. The Company's
balance sheet remained strong.
-- SHAREHOLDER RETURN. Total shareholder return in 1999 was 63%,
significantly exceeding the performance of the S&P 500 Index, the
S&P Financial Index and the Dow Jones Industrials Average (the
Dow). (The Dow includes companies in the S&P 500 Index and the S&P
Financial Index.)
BUSINESS PERFORMANCE
-- GROWTH IN CARD BUSINESSES. The Company made significant progress in
its card business by:
-- Increasing the number of cards in force by nearly 8%.
-- Launching several new cards in the United States (including Blue
from American Express, the first widely
28
<PAGE>
marketed credit card that has a built-in 'smart chip,' and
co-branded cards with Costco and Fidelity).
-- Increasing market share in accounts receivable growth.
-- Expanding the network of merchants that accept the Company's cards
around the world.
-- OPENING THE NETWORK. The Company added 16 partners to its global
card network business.
-- INTERNATIONAL GROWTH. The Company increased its financial services
business outside the United States and expanded its card network.
The Company launched 17 consumer charge, revolving and small
business products and substantially expanded its distribution
channels through relationships with banks and other institutions.
-- E-COMMERCE STRATEGIES. The Company introduced new online products
and services, including Membership B@nking, American Express
Brokerage, a digital wallet and American Express@Work, a desktop
portal for business to business electronic commerce. The Company
also introduced 'My American Express,' which allows customers to
tailor the website to their needs. The Company licensed its smart
card technology to others in the industry to promote a uniform
technology standard for smart card usage.
-- FINANCIAL SERVICES. American Express Financial Advisors (AEFA)
posted strong growth in assets under management and improved
the investment performance of its mutual funds. In 1999 AEFA
piloted a program that provides financial advisors with a broader
range of choices for structuring their relationship with AEFA.
-- INVESTMENTS. To position the Company for future growth, the Company
funded investments in its smart card, e-commerce and card marketing
programs.
EMPLOYEES AND LEADERSHIP TALENT
-- Overall, the Company's employee satisfaction scores continued to
improve, based on results of its annual employee survey. The survey
measures employee perceptions in a number of areas, including
employee development, integrity, teamwork and customer focus. The
Company has been recognized as a top corporate employer.
-- In 1999 the Company continued to focus on improving the leadership
capabilities of its senior management and ensuring that appropriate
talent exists within the Company.
29
<PAGE>
In addition to these accomplishments, the Committee also considered some
disappointments, including:
-- An increase in the Company's overall expenses that rose at the same rate
as revenues.
-- A 'time to market' for new products which -- though much better -- still
falls short of the Company's goals.
-- A difficult year at American Express Bank.
-- Legal actions at AEFA that led to an agreement in principle to settle
three class action lawsuits relating to the sales of insurance and
annuity products.
ANNUAL LONG-TERM INCENTIVE AWARDS. The Committee approved a grant of 180,000
stock option shares for Mr. Golub. The Committee also approved PG-X and
Transition PG awards, each with a grant value of $1,000,000. These awards are
consistent with Mr. Golub's compensation guidelines.
PG-VIII PAYOUT. Mr. Golub's PG-VIII award contained a formula based on
(1) the Company's earnings per share growth and average return on equity during
1997-1999 and (2) the average share price for the 60 trading days before
February 28, 2000. The Committee adjusted downward the formula-driven results
based on its judgment of the Company's performance and the impact of certain
one-time capital gains and accounting changes. The Committee approved a payment
of $2,867,598 in accordance with these provisions.
SPECIAL AWARDS
In April 1999 the Company announced plans for the Chief Executive Officer
succession. The Company announced that Mr. Golub plans to remain as Chairman and
Chief Executive Officer until April 2001. At that time Mr. Chenault will become
Chief Executive Officer. Mr. Golub plans to remain as Chairman for approximately
one year commencing April 2001. After this period, Mr. Chenault will become
Chairman.
The Board believes it is important for this transition to be completed
successfully. The Board also believes the Company has achieved extraordinary
success since Mr. Golub became Chief Executive Officer. This is reflected by
consistent and sustained earnings growth, a 295% total return to shareholders
from July 1993 to December 1998 and continued strengthening of the Company's
competitive position. In light of these considerations, in 1999 the Committee
approved special awards for Messrs. Golub and Chenault. These awards included
750,000 stock option shares for Mr. Golub and 400,000 stock option shares and
40,000 restricted shares for Mr. Chenault. The Committee also approved
arrangements for Mr. Golub's remaining tenure as Chief Executive
30
<PAGE>
Officer and for his service as Chairman of the Board in 2001-2002, as described
on page 42.
COMPENSATION AND BENEFITS COMMITTEE
Frank P. Popoff, Chairman
Anne L. Armstrong
Beverly Sills Greenough
Jan Leschly
Richard A. McGinn
31
<PAGE>
This table contains information about compensation we paid to the named
executives in 1999, 1998 and 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------- ---------------------------------------
AWARDS PAYOUTS
----------------------- ----------
OTHER RESTRICTED LONG-TERM
NAME AND PRINCIPAL ANNUAL STOCK OPTIONS/ INCENTIVE ALL OTHER
POSITION AT COMPEN- AWARDS SARS PAYOUTS COMPENSATION
DECEMBER 31, 1999 YEAR SALARY($) BONUS($)(1) SATION($)(2) ($)(3) (# SHARES) ($)(5) ($)(6)
----------------- ---- ---------- ----------- ------------ ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
H. Golub ............ 1999 $1,000,000 $2,400,000 $284,179 $1,004,004 1,089,161(4) $2,867,598 $741,135
Chairman and Chief 1998 1,019,231 2,400,000 320,638 0 180,000 2,734,725 582,623
Executive Officer 1997 900,000 2,300,000 268,598 0 200,000 2,856,231 496,963
K.I. Chenault 1999 700,000 1,800,000 243,237 5,668,003 544,263(4) 2,150,737 279,015
President and 1998 717,308 1,750,000 242,657 0 150,213(4) 1,640,815 201,830
Chief Operating 1997 630,769 1,400,000 224,050 2,645,000 150,000 1,713,705 179,501
Officer
J.S. Linen .......... 1999 550,000 780,000 178,485 0 63,557(4) 1,362,175 217,688
Vice Chairman 1998 571,154 770,000 182,108 0 107,758(4) 1,299,000 267,894
1997 550,000 800,000 183,757 0 50,000 1,356,729 342,535
R.K. Goeltz ......... 1999 518,269 750,000 85,118 0 50,000 1,362,175 272,040
Vice Chairman and 1998 493,269 730,000 86,642 0 46,000 1,299,000 197,865
Chief Financial 1997 475,000 685,000 453,540 0 50,000 685,482 606,887
Officer
D.R. Hubers . 1999 467,308 665,000 101,832 0 65,000 1,339,375 200,173
President and Chief 1998 425,000 675,000 58,179 0 64,000 1,279,050 144,731
Executive Officer, 1997 425,000 725,000 69,149 0 70,000 1,319,679 145,831
American Express
Financial
Corporation
</TABLE>
- -------------
(1) The amounts in this column reflect cash payments under 1999 annual incentive
awards. Mr. Golub's and Mr. Chenault's 1999 annual incentive awards also
include restricted share grants made February 28, 2000. We include these
grants in the Restricted Stock Awards column. We granted 7,556 restricted
shares to Mr. Golub that have a grant date value of $1,004,004 and 5,667
restricted shares to Mr. Chenault that have a grant date value of $753,003.
One-third of the restricted shares vests after one year, two-thirds vest
after two years and the full grant vests after three years.
32
<PAGE>
(2) These numbers reflect the cost of providing perquisites and other personal
benefits and amounts we paid to reimburse our executives for additional
taxes they owed from certain of these benefits. SEC rules require us to
break out each benefit that exceeds 25% of the total we report for each
named executive. These amounts are as follows:
<TABLE>
<CAPTION>
LOCAL PERSONAL FLEXIBLE
TRAVEL TRAVEL TAX PERQUISITE
NAME ALLOWANCE EXPENSES PAYMENTS ALLOWANCE
- ---- --------- -------- -------- ---------
<S> <C> <C> <C> <C>
H. Golub............. $84,661 $109,300 -- --
K.I. Chenault........ 84,661 61,545 -- --
J.S. Linen........... 84,661 -- $55,159 --
R.K. Goeltz.......... 30,000 -- -- $35,000
D.R. Hubers.......... -- 48,461 -- 35,000
</TABLE>
(3) This column includes the restricted share grants we made to Messrs. Golub
and Chenault under the 1999 annual incentive awards (see note 1) and
Mr. Chenault's special restricted share grant we describe on page 35. The
special grant contains performance measures that the Company must meet as a
condition to vesting. We value restricted share awards in the table at their
fair market value, which is the closing price of the Company's common shares
on the New York Stock Exchange on the grant date. We pay dividends on the
restricted shares in the same way that we pay them on our common shares.
On December 31, 1999, the executives in the table held the restricted shares
set forth below. We valued them based on the closing price of $166.25 on
December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF VALUE ON
NAME RESTRICTED SHARES DECEMBER 31, 1999
- ---- ----------------- -----------------
<S> <C> <C>
H. Golub............. 17,500 $2,909,375
K.I. Chenault........ 117,905 19,601,706
J.S. Linen........... 0 0
R.K. Goeltz.......... 7,000 1,163,750
D.R. Hubers.......... 4,562 758,433
</TABLE>
33
<PAGE>
(4) These include both annual and restoration stock option awards. For Messrs.
Golub and Chenault, we also include special stock option grants we made in
1999. We describe all stock option grants in the table captioned Option
Grants in 1999.
(5) These are the amounts we paid under Portfolio Grant-VIII awards (PG-VIII
awards). We granted these awards in 1997. Each PG-VIII award has two parts.
The first part is the Financial Incentive, which accounts for 60% of the
grant value of the award. We valued this part based on earnings or earnings
per share growth and average return on equity for our business segments or
for the entire Company over the 1997-99 period. The second part consists of
Stock Incentive Units, which account for 40% of the grant value of the
award. We valued this part based on the average price of our common shares
during the 60 trading days before February 28, 2000. We structured the
PG-VIII awards in the table to qualify as performance-based compensation
under the Million Dollar Cap. The Committee adjusted downward the maximum
value of the awards based on its judgment of three-year financial results
and the impact of certain one-time capital gains and accounting changes.
(6) The dollar value of the amounts in this column break down as follows:
<TABLE>
<CAPTION>
EMPLOYER
CONTRIBUTIONS
PAYMENTS UNDER ABOVE-MARKET
UNDER CAPITAL SAVINGS AND EARNINGS ON VALUE OF
PARTNERS I RELATED DEFERRED SPLIT-DOLLAR
NAME AND II* PLANS COMPENSATION LIFE INSURANCE
- ---- ------------- ----- ------------ --------------
<S> <C> <C> <C> <C>
H. Golub............. $18,025 $87,490 $605,614 $30,006
K.I. Chenault........ 4,215 61,250 196,262 17,288
J.S. Linen........... 19,490 48,125 131,231 18,842
R.K. Goeltz.......... 0 45,233 162,016 64,791
D.R. Hubers.......... 2,810 40,890 138,203 18,270
</TABLE>
* Lehman Brothers Holdings, Inc., a former subsidiary, formed Capital
Partners I and Capital Partners II, which are limited partnerships. Under
these partnerships, Lehman offered senior officers the opportunity to invest
in a portfolio of high risk investments. A company related to Lehman is the
general partner and invested most of the capital of the partnerships. The
amounts in the chart include income distributions and distributions related
to the liquidation of assets.
34
<PAGE>
This table contains information about stock option grants we made to the
named executives in 1999:
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
% OF
NUMBER OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES PRICE EXPIRATION GRANT DATE
NAME GRANTED(#) IN 1999 ($/SH) DATE PRESENT VALUE($)(4)
- ---- ---------- ---------- -------- ---------- --------------------
<S> <C> <C> <C> <C> <C>
H. Golub............. 180,000(1) 1.5% $105.875 2/21/09 $5,743,800
111,276(2) 0.9 141.281 3/27/04 5,009,646
47,885(2) 0.4 140.813 5/23/03 1,913,963
750,000(3) 6.2 123.438 3/21/09 30,922,500
K.I. Chenault........ 135,000(1) 1.1 105.875 2/21/09 4,307,850
9,263(2) 0.1 110.313 2/27/04 314,016
400,000(3) 3.3 123.438 3/21/09 16,492,000
J.S. Linen........... 50,000(1) 0.4 105.875 2/21/09 1,595,500
13,557(2) 0.1 148.063 2/23/02 486,154
R.K. Goeltz.......... 50,000(1) 0.4 105.875 2/21/09 1,595,500
D.R. Hubers.......... 65,000(1) 0.5 105.875 2/21/09 2,074,150
</TABLE>
- -------------
(1) We granted these nonqualified stock options on February 22, 1999 as part of
our annual award program. Each option has an exercise price per share equal
to the fair market value per common share on the grant date. The options
also have the restoration feature described in note (2) below. Executive
officers may transfer them to certain family members and entities that these
family members control. Holders may exercise one-third of their options
after two years, two-thirds after three years, and the full grant after four
years, subject to vesting and other requirements. All outstanding stock
options may also become exercisable upon death, disability, retirement or a
change in control of the Company as we describe on pages 43-45.
(2) These are restoration options that we granted when participants exercised
stock options that were outstanding for at least five years. The number of
restoration option shares we granted equals the number of shares that the
holder delivered to us as payment of the exercise price of the original
option plus the number of shares withheld for tax withholding obligations.
The exercise price of the restoration option is the fair market value of a
Company common share on the date of its grant. The holder of a restoration
option may exercise it six months after the grant date if the holder is in
compliance with our stock ownership guidelines. For Mr. Golub, this date is
March 7, 2000 for 111,276 of his restoration option shares
35
<PAGE>
and March 8, 2000 for 47,885 of these option shares. For Mr. Chenault this
date is September 1, 1999. For Mr. Linen this date is February 24, 2000.
(3) These are the special stock option awards we describe on page 30.
Mr. Golub's award has our standard stock option provisions, with two
differences. First, Mr. Golub will lose compensation from the award under
our forfeiture policy if he joins certain competitors within six years after
his employment termination instead of the standard one year period. Second,
he may exercise the option only if any of these events occur:
-- Mr. Golub's employment terminates on or after April 30, 2001.
-- Mr. Golub's employment terminates prior to April 30, 2001 because of his
death, disability or other employment termination (other than his
voluntary resignation, voluntary retirement, substantial violation of
our policies or procedures or material dishonesty).
-- The Company employs Mr. Golub continuously for nine years after grant.
-- The Company's common share price is at least 50% higher than the option
exercise price for 10 consecutive trading days during the option term
and we continue to employ Mr. Golub for at least six years after the
grant date.
Mr. Chenault's award also has our standard stock option provisions, except
that he may exercise it only if (1) we employ him continuously for nine
years after grant or (2) our common share price is at least 50% higher than
the option exercise price for 10 consecutive trading days during the option
term and we continue to employ him for at least six years after the grant
date.
(4) These numbers show hypothetical values under a variation of the
Black-Scholes option pricing model. This model is a complicated mathematical
formula that makes assumptions about stock option features. A number of
these assumptions do not apply to the options we grant to our executive
officers and other employees. In particular, the model assumes that holders
can exercise stock options immediately and freely transfer them. For these
reasons, we caution that the values we show in the table are theoretical and
may not reflect the amounts that option holders will realize. Whether an
option holder realizes value and how much this value is will depend on what
our share price is relative to the exercise price. We developed the
assumptions listed below and Black-Scholes values with assistance from an
independent consulting firm. They are consistent with the assumptions we
used to report stock option valuations in our 1999 Annual Report to
Shareholders.
36
<PAGE>
ASSUMPTIONS FOR VALUING THE FEBRUARY 1999 GRANTS:
-- The exercise price is the same as our share price on the grant date.
-- A five-year life for each option. This is the typical amount of time
that passes before holders of our options exercise them.
-- Expected dividend yield of 1.5%. This reflects the historical average
yield for the most recent 60 months prior to the grant date.
-- Expected stock price volatility of 30%. This reflects the most recent
volatility for the month end stock prices of the Company's common
shares for the 60 months prior to the grant date.
-- A risk-free rate of return of 5.05%. This reflects the return an
investor could expect in a risk-free investment with the same grant
and expiration date as our stock options. This is the yield on a
zero-coupon five-year bond on the option grant date.
ASSUMPTIONS FOR VALUING RESTORATION OPTIONS AND SPECIAL OPTIONS:
The values shown for the restoration and special stock options are based
on the same model except that the assumptions reflect:
-- A six-year life for the special stock option awards and the remaining
term for the restoration stock option awards.
-- A risk-free rate of return ranging from 5.26% to 6.04%.
This table contains information about stock option exercises by the named
executives during 1999 and unexercised options and stock appreciation rights
they held at the end of 1999:
AGGREGATED OPTION EXERCISES IN 1999 AND
YEAR-END 1999 OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS OPTIONS/SARS
SHARES AT DECEMBER 31, 1999 AT DECEMBER 31, 1999(1)
ACQUIRED --------------------------- ---------------------------
ON EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
- ---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
H. Golub............. 327,248 $37,806,088 593,333 1,275,828 $68,458,873 $63,028,448
K.I. Chenault........ 17,829 1,505,570 389,476 675,000 42,567,675 37,316,985
J.S. Linen........... 91,758 6,063,821 358,154 110,891 47,051,673 7,331,453
R.K. Goeltz.......... 118,666 12,442,051 0 97,334 0 7,084,892
D.R. Hubers.......... 0 0 207,999 131,001 23,986,640 9,596,091
</TABLE>
- -------------
(1) We base this value on the $166.25 closing price of our common shares on the
New York Stock Exchange on December 31, 1999.
This table contains information about long-term incentive plan awards we
made in 1999 to the named executives:
37
<PAGE>
LONG-TERM INCENTIVE PLANS -- PG AWARDS IN 1999
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS(1)
PERFORMANCE --------------------------------------
NAME AWARD PERIOD THRESHOLD($) TARGET($) MAXIMUM($)
- ---- ----- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
H. Golub............. PG-X 1999-2001 $304,000 $1,580,000 $4,566,000
Transition PG 1999-2001 304,000 1,580,000 4,566,000
- -------------------------------------------------------------------------------------------
K.I. Chenault........ PG-X 1999-2001 228,000 1,185,000 3,424,500
Transition PG 1999-2001 228,000 1,185,000 3,424,500
- -------------------------------------------------------------------------------------------
J.S. Linen........... PG-X 1999-2001 144,400 750,500 2,168,850
Transition PG 1999-2001 144,400 750,500 2,168,850
- -------------------------------------------------------------------------------------------
R.K. Goeltz.......... PG-X 1999-2001 144,400 750,500 2,168,850
Transition PG 1999-2001 144,400 750,500 2,168,850
- -------------------------------------------------------------------------------------------
D.R. Hubers.......... PG-X 1999-2001 144,400 750,500 2,168,850
Transition PG 1999-2001 144,400 750,500 2,168,850
- -------------------------------------------------------------------------------------------
</TABLE>
(1) PG awards link compensation to our financial and stock price performance.
Each PG award consists of a Financial Incentive Component and a Stock
Incentive Component. The Financial Incentive Component represents 60% of the
award and earns value based on revenue growth, earnings or earnings per
share growth and average return on equity of our business segments or the
entire Company (depending on the executive's job) over the 1999-2001 period.
The Financial Incentive Component will earn value if we achieve at least a
threshold level of performance on any of these financial measures. The Stock
Incentive Component represents 40% of the award and earns value based on how
our total shareholder return compares to the total return of the S&P
Financial Index during the 1999-2001 period. Total shareholder return means
share price appreciation plus dividends.
We structured the PG awards in the table to qualify as performance-based
compensation under the Million Dollar Cap. As a consequence, the Committee
may adjust the value of awards downward only. The Committee will decide the
amount of any downward adjustment after it evaluates various factors such as
Company, business unit and individual performance over the 1999-2001 period.
The Committee substantially lengthened the vesting schedule of PG awards
commencing in 1999. The PG-X awards will not vest until September 2003. The
Committee believes this will provide additional incentive for executive
officers to remain with the Company. We also granted one-time Transition PG
awards that have a scheduled vesting and payment date in September 2002. We
made these one-time awards to recognize that PG-X awards would have vested
in 2002 if they had the same vesting design as prior PG awards. To partially
offset the longer vesting periods, the Company will increase the initial
payout values of PG-X and Transition PG awards by 5%.
38
<PAGE>
PERFORMANCE GRAPH
This graph compares the cumulative total shareholder return on our common
shares for the last five fiscal years with the total return on the S&P 500 Index
and the S&P Financial Index over the same period. The graph shows the growth of
a $100 investment in our common shares, the S&P 500 Index and the S&P Financial
Index on December 31, 1994 and the reinvestment of all dividends.
COMPARISON OF FIVE-YEAR TOTAL RETURN
OF AMERICAN EXPRESS COMPANY COMMON SHARES,
S&P 500 INDEX AND S&P FINANCIAL INDEX
[GRAPHIC]
<TABLE>
<CAPTION>
Year-End Data* 1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
American Express $100.00 $142.77 $199.58 $318.91 $368.73 $602.43
S&P 500 Index $100.00 $137.55 $169.11 $225.52 $289.96 $350.63
S&P Financial Index $100.00 $154.05 $208.16 $308.29 $343.51 $356.47
*Source:Compustat
</TABLE>
PENSION BENEFITS
We provide pension benefits under the American Express Retirement Plan and
the American Express Supplemental Retirement Plan.
39
<PAGE>
AMERICAN EXPRESS RETIREMENT PLAN. We have a Retirement Plan that is commonly
referred to as a cash balance plan. Each payroll period we credit each
participating employee with an amount equal to a percentage of the employee's
base salary we pay in that period. We also credit each employee with a
percentage of any annual bonus and certain other types of compensation we pay at
the time we pay the compensation. The percentage varies with the employee's age
and years of service. This table shows the percentages we use to determine the
amount of the credits:
<TABLE>
<CAPTION>
SUM OF AGE PLUS
YEARS OF SERVICE APPLICABLE PERCENTAGE
- ---------------- ---------------------
<S> <C>
Less than 35.................. 2.50%
35-44......................... 3.25
45-59......................... 4.25
60-74......................... 5.75
75-89......................... 8.00
90 or more.................... 10.00
</TABLE>
On January 1, 2000 the sum of age plus years of service for the named
executives was as follows: Mr. Golub: 78, Mr. Chenault: 68, Mr. Linen: 88, Mr.
Goeltz: 62 and Mr. Hubers: 93.
The Plan credits participants with interest on their cash balances. The Plan
sets the interest rate each year based on an average of the interest rates for
various five-year U.S. Treasury Notes. The minimum interest rate is 5%. The
maximum rate is the lower of 10% or a specific rate set by the U.S. government
under the tax laws. For 1999 the interest rate was 5.00%, and for 2000 the rate
is 6%.
When the employee retires or terminates employment after completing five
years of service, the Plan will pay out the cash balance amounts. The Plan will
make these payments in the amounts consistent with the employees' elections as
to the form and timing of payments, including payment in a single lump sum or as
an annuity. An annuity obligates the Plan to make payments in monthly
installments over time, in amounts based on assumptions we make as to life
expectancy and the value of making payments in the future. Employees may choose
similar methods of payment for benefits they earned before July 1, 1995.
SUPPLEMENTAL RETIREMENT PLAN. By meeting certain legal requirements the
Retirement Plan provides a tax-advantaged way for us to provide retirement
benefits. However, U.S. tax law limits the amount of benefits we can provide an
employee as well as the amount of compensation that we can take into account
under the Retirement Plan. We make up for these lost benefits under our
Supplemental Retirement Plan.
40
<PAGE>
FUNDED PENSION PLAN. Some of our employees, including Messrs. Linen and
Chenault, have earned retirement benefits under the American Express Funded
Pension Plan, a plan in effect until May 1985. We purchased an annuity from an
insurance company to fund benefits that these employees will receive under this
plan when they retire or leave the Company.
PENSION TABLE. We set forth in the table below the amount we estimate we
will pay each year to the named executives as a single life annuity at age 65
under the Retirement Plan and the Supplemental Retirement Plan. Under a single
life annuity, when the employee dies we cease making payments. We break out
separately payments the insurance company will make under the Funded Pension
Plan. In deriving our estimated payments for the Retirement Plan and the
Supplemental Retirement Plan we used these assumptions:
-- We credit interest on account balances at the actual rate for all years
through 2000 and at 5% for 2001 and later years.
-- We start paying retirement benefits to the executives at normal retirement
age (age 65) as a single life annuity based on an interest rate of 6.26%
and U.S. government-approved assumptions as to life expectancy.
-- We continue to employ Messrs. Golub, Chenault, Linen and Hubers until age
65 at their current base salaries and pay them annual bonuses equal to
their average bonus over the last five years.
-- Mr. Goeltz continues his employee status until December 31, 2002 and he
receives the compensation we describe on page 46.
<TABLE>
<CAPTION>
RETIREMENT PLAN
AND SUPPLEMENTAL ANNUAL BENEFITS
RETIREMENT PLAN PAYABLE BY
ESTIMATED ANNUAL INSURANCE TOTAL ANNUAL
EXECUTIVE OFFICER BENEFITS COMPANY BENEFITS
- ----------------- ---------------- --------------- ---------------
<S> <C> <C> <C>
H. Golub..................... $407,899 0 $407,899
J.S. Linen................... 635,308 $65,508 700,816
K.I. Chenault................ 565,609 5,747 571,356
R.K. Goeltz.................. 47,321 0 47,321
D.R. Hubers.................. 270,987 0 270,987
</TABLE>
SEPARATE PENSION ARRANGEMENT. When Mr. Golub began employment with us in
1983, we entered into an arrangement to compensate him for benefits he lost when
he left his former employer. Under this arrangement, when Mr. Golub retires we
will calculate his annual pension under the cash balance formula assuming he
started working for us in 1978. We will pay to Mr. Golub an amount equal to any
difference between this amount and the amount he is eligible to
41
<PAGE>
receive under the Retirement Plan and Supplemental Retirement Plan based on his
actual years of service.
AGREEMENT WITH MR. GOLUB
In connection with the Chief Executive Officer succession described on page
30, the Company entered into an agreement with Mr. Golub which contains these
arrangements:
PARTICIPATION IN PROGRAMS. Mr. Golub will remain eligible to participate
in our compensation and benefit programs as Chief Executive Officer through
April 2001.
ELIGIBILITY FOR SEVERANCE. If his employment terminates before
April 30, 2001 for any reason other than his resignation, voluntary
retirement, death, disability, substantial violation of our policies or
procedures or material dishonesty, he will be eligible for severance under
our severance policy. The amount of severance we will pay him if his
employment terminates in these circumstances cannot be less than the amount
in effect under the policy in April 1999. However, if his 1999 special stock
option award vests on or after April 30, 2001, we will not have any
obligation to pay him severance.
SERVICE AS CHAIRMAN OF THE BOARD. If Mr. Golub serves as non-executive
Chairman of the Board for one year, we will pay him a salary of $1,000,000
for the year. We will also grant him a non-qualified stock option in
February or April 2001 for 150,000 shares (or 450,000 shares if we implement
the 3-for-1 stock split described in Item 2). The stock option grant will
vest in one-third increments after each of two, three and four years have
passed since the grant date or if he retires after age 62. The stock option
will have terms no less favorable than the terms we have in place for
employees generally at the time we make the grant. If Mr. Golub does not
serve as Chairman of the Board after relinquishing his Chief Executive
Officer responsibilities, we will provide him with the economic equivalent
to the above salary and stock option.
OTHER BENEFITS. As Chairman of the Board, we will provide Mr. Golub with
continued access to Company services such as a car and driver, use of our
aircraft and a perquisite allowance. For his lifetime we will provide him
with an office and a secretary and will pay for normal office expenses. We
will also reimburse him for expenses he incurs when he is on Company
business at our request.
SEVERANCE, CHANGE IN CONTROL AND OTHER ARRANGEMENTS
We have in place three types of compensation arrangements that we describe
in this section of the Proxy Statement: a uniform severance
42
<PAGE>
policy, change in control policies and arrangements relating to death,
disability and retirement.
UNIFORM SEVERANCE POLICY. We have a uniform severance policy that applies to
senior officers, including the named executives. Severance for executive
officers is subject to the approval of the Compensation and Benefits Committee.
If we terminate the employment of the participating officer for any reason
generally other than misconduct or we and the officer terminate such employment
by mutual agreement, we will pay the officer severance over a period of two
years or less. To receive these payments, the officer must sign a severance
agreement that prohibits the officer from working for certain competitors,
soliciting business from our customers, attempting to hire our employees and
disclosing our confidential information. The officer must also agree to release
any claims against us.
The amount of severance that we would pay to each named executive is two
times base salary plus two times the amount of the last bonus the Committee
approves before the executive signs a severance agreement. During all or a part
of the severance period, the officer's long-term incentive awards continue to
vest and we will continue to provide coverage under our welfare and benefit
plans.
We entered into a separate arrangement with Mr. Golub relating to the Chief
Executive Officer succession that could impact his eligibility for, and amount
of, severance we would pay him. We describe this on page 42.
CHANGE IN CONTROL POLICIES. We have designed our change in control policies
to help keep employees focused on their jobs during the uncertainty that
accompanies a change in control, to preserve benefits after a change in control
transaction and to help us attract and retain key talent. We originally adopted
these policies in 1994 and updated them in 2000. A change in control generally
includes these events: (1) any person acquires 25% or more of our common shares
or all voting securities, (2) a majority of our Directors are replaced, (3)
certain mergers, reorganizations, consolidations, or sales of our assets or (4)
shareholder approval of a liquidation or dissolution of the Company.
-- SEVERANCE. We will pay the amount of severance that we would pay under the
uniform severance policy in a lump sum to senior officers, including the
named executives, if the officer's employment is terminated under certain
conditions within two years after a change in control. These conditions
include (1) a termination by us for any reason generally other than willful
misconduct or conviction of a felony or (2) a termination by the officer
for good reason. The officer would have good reason to terminate his or her
employment if we impose a reduction in
43
<PAGE>
base salary or position, material reduction in the total value of annual
incentive and long-term incentive award opportunities, certain relocations
of the officer's workplace or duties materially inconsistent with prior
duties. We refer to any of these employment terminations as a 'Covered
Termination.'
-- PRO RATA BONUS. If a Covered Termination occurs within two years after a
change in control, we will pay senior officers, including the named
executives, a bonus for the part of the year before termination. We will
base the amount of the pro rata bonus on the average of the prior two
annual incentive awards.
-- KEY EXECUTIVE LIFE. If a Covered Termination occurs within two years after
a change in control, we will transfer to senior officers, including the
named executives, policies under our Key Executive Life Insurance Plan.
Each policy provides life insurance coverage equal to four times annual
base salary up to a maximum of $1,500,000. The officers may retain the life
insurance coverage or cash out any value in the policy.
-- SUPPLEMENTAL RETIREMENT PLAN. We do not fund benefits under our
Supplemental Retirement Plan or the separate arrangement we have with Mr.
Golub for additional service credit toward the Retirement Plan. Upon a
change in control, we will fully fund benefits that participants have
earned under the Supplemental Retirement Plan and that Mr. Golub has earned
under his separate pension arrangement.
If a Covered Termination occurs within one year after a change in control,
we will provide senior officers, including the named executives, with an
additional benefit under the Supplemental Retirement Plan. This benefit
will equal the additional amount we would provide to the officers under the
Retirement Plan if the officers had two additional years of service and age
under that plan. If a Covered Termination occurs between one and two years
after a change in control, we will use one additional year of service and
age to calculate the additional benefits.
If a Covered Termination occurs within one year after a change in control,
we will add two years of service to participants' actual service when we
determine whether profit sharing contributions we made to the Supplemental
Retirement Plan have vested. If the termination occurs between one and two
years after a change in control, we will add one year of service.
-- DEFERRED COMPENSATION PLANS. Upon a change in control, we will credit to
participants' accounts under our deferred compensation plans (including the
Pay for Performance Deferral Program) two years of interest based on the
rate in effect for the year before
44
<PAGE>
the change in control. We will also pay out all balances in these plans.
-- STOCK OPTIONS AND RESTRICTED SHARES. Stock option and restricted share
awards that we issued to employees under our long-term incentive
compensation plans will immediately vest upon a change in control. If an
employee is terminated for reasons other than misconduct within two years
after a change in control, the employee will have an additional 90 days
from termination to exercise stock options granted on and after February
28, 2000.
-- PORTFOLIO GRANTS. If a Covered Termination occurs within two years after a
change in control, Portfolio Grant awards under these plans will
immediately vest and we will pay a pro rata portion of the value of the
awards.
-- BENEFITS. We will continue for up to two years our subsidy of medical and
dental benefits for officers who are terminated within two years after a
change in control.
-- EXCISE TAX GROSS UP. Current U.S. tax laws generally (1) do not allow
companies to deduct from income certain compensation provided in connection
with a change in control that exceeds specified limits and (2) impose a 20%
excise tax on the individuals who receive such compensation. We generally
will pay to members of senior management, including the named executives,
an amount in cash if necessary to make them whole for this excise tax.
DEATH, DISABILITY AND RETIREMENT. These policies generally apply to stock
options, restricted share awards and PG's that we issue to employees under our
long-term incentive compensation plans:
-- DEATH, DISABILITY. Upon death or disability, unvested stock options and
restricted shares will fully vest and Portfolio Grants will vest pro rata.
If the participant is age 60 or older with 10 or more years of service, all
or a portion of the remaining value of Portfolio Grants will vest.
Following death or disability, the holder (or the holder's estate) will
have up to five years to exercise vested stock options.
-- RETIREMENT. Upon retirement (meaning age 55 or older with 10 or more years
of service), unvested restricted shares outstanding for more than two years
will fully or partially vest. Portfolio Grants outstanding for more than
one year will partially vest. If a participant is age 60 or older with 10
or more years of service, all or a portion of their unvested stock options,
restricted shares and Portfolio Grants that the participant would have lost
will also vest. Retirees may exercise vested stock options through the end
of their original term.
45
<PAGE>
ARRANGEMENT WITH MR. GOELTZ
In July 1999 the Company announced that Mr. Goeltz intended to retire from
the Company. At our request, Mr. Goeltz has agreed to continue to serve as Vice
Chairman and Chief Financial Officer during the transition period and to assist
in our search for his successor. We have asked Mr. Goeltz to enter into an
agreement not to compete with the Company for a period of time after his
departure. As part of that agreement, we expect to provide him with severance
and other benefits under our existing policies. Mr. Goeltz will be eligible to
receive service credit and vesting of benefits under our savings and retirement
plans during the two years of his agreement. We expect to increase his
retirement benefits by adding another five years of service credit and will
treat Mr. Goeltz as a retiree under our plans. We also expect to provide him
with a life insurance policy under our Key Executive Life plan, with a reduced
value for early retirement before age 65.
CERTAIN TRANSACTIONS
- --------------------------------------------------------------------------------
SERVICE BY DIRECTORS AND OFFICERS
In the usual course of our business, we have transactions with many other
firms, including financial institutions. Some of the directors or officers of
these firms may also serve as directors or officers for us or our subsidiaries.
We carry out our transactions with these firms on customary terms. The directors
and officers that serve us, our subsidiaries or the other firms involved may not
have knowledge of these transactions.
TRANSACTIONS BETWEEN THE COMPANY AND OUR DIRECTORS AND OFFICERS
Our executive officers and Directors may take out loans from certain of our
subsidiaries on the same terms that these subsidiaries offer to the general
public. By way of example, American Express Centurion Bank may extend credit to
our Directors and executive officers under their Optima Cards or Blue from
American Express. Or, American Express Financial Advisors, Inc. may make margin
loans to them in connection with securities transactions. Our executive officers
and Directors may engage in similar transactions with other subsidiaries in
2000. All indebtedness from these transactions is in the ordinary course of our
business and is substantially on the same terms, including interest rates, in
effect for comparable transactions with other people. Such indebtedness involves
normal risks of collection and does not have features or terms that are
unfavorable to our subsidiaries.
Our executive officers and Directors may also have transactions with us or
our subsidiaries involving other goods and services, such as travel, insurance
and investment services. These transactions are also in the
46
<PAGE>
usual course of our business and we provide them on terms that we offer to our
employees generally.
CERTAIN EMPLOYEES
Occasionally we may have employees who are related to our executive officers
or Directors. We compensate these individuals consistent with our policies that
apply to all employees.
STOCK PURCHASE ASSISTANCE PLAN
Our Stock Purchase Assistance Plan (SPAP) is a loan program that helps our
senior officers purchase our common shares. It has these features:
-- SPAP is available to about 175 senior officers, including the named
executives. We may provide up to $30 million in loans under SPAP.
-- These officers may use SPAP loans to pay the exercise price of stock
options (as well as related taxes) or for buying common shares in the
open market. Participants may borrow up to 300% of their base salary.
-- Participants must pledge common shares as collateral under guidelines
that the Committee sets from time to time. The guidelines currently
require that the value of the collateral must equal at least 100% of
the loan principal on the date we make the loan. SPAP loans are full
recourse, meaning that we can seek to collect repayment of the loan
from the participant if the participant defaults and the value of the
collateral is not sufficient to repay the loan.
-- Participants must repay SPAP loans in five years.
-- Participants pay interest quarterly at a rate that is two percentage
points below the prime lending rate of a major New York City bank.
Currently, SPAP loans bear interest at 6.75%.
During 1999, the maximum principal amount outstanding for Mr. Goeltz was
$652,322 and for Mr. Hubers was $205,318. For all of our executive officers, the
maximum principal amount outstanding under SPAP during 1999 was $2,335,440 and
on March 1, 2000 this amount was $1,477,801. Messrs. Goeltz and Hubers paid off
their loans entirely prior to December 31, 1999.
TRANSACTIONS WITH SIGNIFICANT SHAREHOLDERS
We have a number of ordinary course relationships with Berkshire Hathaway
Inc. (Berkshire), FMR Corp., their affiliates, and companies in which they have
significant investments. Some of these companies are service establishments that
accept our charge and credit cards and pay our subsidiaries fees when our
customers use these cards. From time to
47
<PAGE>
time we may enter into joint marketing or other relationships with one or more
of these companies that encourage our customers to apply for and use our Cards.
Our subsidiaries also provide Corporate Card or travel services to some of these
companies and these companies pay fees to these subsidiaries. We or our
subsidiaries may engage in other commercial transactions with these companies
and pay or receive fees in these transactions. In 1999 we entered into an
agreement with Fidelity Brokerage Service, Inc., an affiliate of FMR that offers
brokerage and related services. Under this agreement, Fidelity markets to its
customers two Card products, the Fidelity American Express'r' Gold Card and the
Fidelity American Express'r' Platinum Card that are linked to the customer's
brokerage account. Fidelity pays all or part of the annual fees for these Cards.
In 1999 we also continued our practice of purchasing our common shares in the
open market through a number of brokerage firms, including Fidelity Capital
Markets, a subsidiary of FMR.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
Due to a clerical oversight, a Form 4 reporting the December 3, 1999 sale of
6,429 common shares by Daniel T. Henry was not filed on or before January 10,
2000 as required, but on January 13, 2000. A Form 4 reporting the August 5, 1999
purchase of 1,000 shares by Richard A. McGinn was not filed on or before
September 10, 1999 as required, but on October 6, 1999.
DIRECTORS AND OFFICERS LIABILITY INSURANCE
- --------------------------------------------------------------------------------
We have an insurance policy that provides coverage for Directors and
officers liability and fiduciary liability arising from employee benefit plans
we sponsor. The directors and officers liability coverage provides that the
insurance carriers will (1) reimburse us when we are legally allowed to
indemnify our Directors and officers and (2) pay losses, including settlements,
judgments and legal fees, on behalf of our Directors and officers when we cannot
legally indemnify them. The fiduciary liability portion of the policy covers
Directors and employees who serve as fiduciaries for our employee benefit plans.
It covers losses from alleged breaches of fiduciary duty as defined in the
Employee Retirement Income Security Act of 1974. Executive Risk Indemnity, Inc.
issued this policy, which is effective from November 30, 1997 to November 30,
2000. We expect to renew similar coverage at expiration. Federal Insurance
Company and other insurers led by Lloyd's of London provide excess coverage. We
pay an annualized premium for these coverages of approximately $640,000.
48
<PAGE>
We also have a supplemental directors and officers liability insurance
policy that covers additional losses in cases where we are not legally permitted
to indemnify our Directors or officers. ACE Insurance Company Ltd. issued this
policy which is effective November 30, 1997, to November 30, 2000. We expect to
renew similar coverage at expiration. We pay an annualized premium for this
policy of $138,000.
REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION
OF PROXY PROPOSALS, NOMINATION OF DIRECTORS
AND OTHER BUSINESS OF SHAREHOLDERS
- --------------------------------------------------------------------------------
Under SEC rules, if a shareholder wants us to include a proposal in our
Proxy Statement and form of proxy for the 2001 Annual Meeting of Shareholders,
our Secretary must receive the proposal at our principal executive offices by
November 14, 2000.
Under our By-laws, and as SEC rules permit, shareholders must follow certain
procedures to nominate a person for election as a Director at an annual or
special meeting or to introduce an item of business at an annual meeting. Under
these procedures, shareholders must submit the proposed nominee or item of
business by delivering a notice to the Secretary of the Company at our principal
executive offices. We must receive notice as follows:
-- Normally we must receive notice of a shareholder's intention to introduce a
nomination or proposed item of business for an annual meeting not less than
90 days nor more than 120 days before the first anniversary of the prior
year's meeting. Assuming that our 2001 Annual Meeting is held on schedule,
we must receive this notice no earlier than December 22, 2000 and no later
than January 24, 2001.
-- However, if we hold the annual meeting on a date that is not within 30 days
before or after such anniversary date, we must receive the notice no later
than ten days after the earlier of the date we first provide notice of the
meeting to shareholders or announce it publicly.
-- If we hold a special meeting to elect Directors, we must receive a
shareholder's notice of intention to introduce a nomination no later than
ten days after the earlier of the date we first provide notice of the
meeting or announce it publicly.
A notice of a proposed nomination must include certain information about the
shareholder and the nominee, as well as a written consent of the proposed
nominee to serve if elected. A notice of a proposed item of business must
include a description of and the reasons for bringing the proposed business to
the meeting, any material interest of the
49
<PAGE>
shareholder in the business and certain other information about the shareholder.
The Board and our management have not received notice of and are not aware
of any business to come before the Annual Meeting other than the items we refer
to in this Proxy Statement. If any other matter comes before the Annual Meeting,
the persons on our proxy committee will use their best judgment in voting the
proxies.
* * * *
We have mailed our 1999 Annual Report to Shareholders in connection with
this proxy solicitation. IF YOU WOULD LIKE A COPY OF OUR 1999 FORM 10-K,
EXCLUDING CERTAIN EXHIBITS, PLEASE CONTACT STEPHEN P. NORMAN, SECRETARY,
AMERICAN EXPRESS COMPANY, 200 VESEY STREET, NEW YORK, NEW YORK 10285-5005.
Please vote by telephone or the Internet or sign, date and return the
enclosed proxy or voting instruction form in the prepaid envelope. If you vote
promptly, we may be able to avoid the expense of a second mailing.
/s/ Harvey Golub
HARVEY GOLUB
Chairman and Chief Executive Officer
50
<PAGE>
EXHIBIT A
AMERICAN EXPRESS COMPANY
1993 DIRECTORS' STOCK OPTION PLAN*
1. PURPOSE. The purpose of the American Express Company 1993 Directors'
Stock Option Plan (the 'Plan') is to advance the interests of American Express
Company (the 'Company') and its shareholders by encouraging increased share
ownership by members of the Board of Directors of the Company (the 'Board') who
are not employees of the Company or any of its subsidiaries, in order to promote
long-term shareholder value through continuing ownership of the Company's common
shares.
2. ADMINISTRATION. The Plan shall be administered by the Board. The Board
shall have all the powers vested in it by the terms of the Plan, such powers to
include authority (within the limitations described herein) to prescribe the
form of the agreement embodying awards of nonqualified stock options made under
the Plan ('Options'). The Board shall, subject to the provisions of the Plan,
grant Options under the Plan and shall have the power to construe the Plan, to
determine all questions arising thereunder and to adopt and amend such rules and
regulations for the administration of the Plan as it may deem desirable. Any
decisions of the Board in the administration of the Plan, as described herein,
shall be final and conclusive. The Board may act only by a majority of its
members in office, except that the members thereof may authorize any one or more
of their number or the Secretary or any other officer of the Company to execute
and deliver documents on behalf of the Board. No member of the Board shall be
liable for anything done or omitted to be done by him or by any other member of
the Board in connection with the Plan, except for his own willful misconduct or
as expressly provided by statute.
3. PARTICIPATION. Each member of the Board who is not an employee of the
Company or any of its subsidiaries (a 'Non-Employee Director') and certain other
individuals who were directors of Shearson Lehman Hutton Holdings Inc. ('SLHH')
as provided in Paragraph 5 below, shall be eligible to receive an Option in
accordance with Paragraph 5 below. As used herein, the term 'subsidiary' means
any corporation at least 40% of whose outstanding voting stock is owned,
directly or indirectly, by the Company.
4. AWARDS UNDER THE PLAN. (a) TYPE OF AWARDS. Awards under the Plan shall
include only Options, which are rights to purchase common shares of the Company
having a par value of $.60 per share (the
- ---------
* Proposed amendments indicated within brackets.
51
<PAGE>
'common shares'). Such Options are subject to the terms, conditions and
restrictions specified in Paragraph 5 below.
(b) MAXIMUM NUMBER OF SHARES THAT MAY BE ISSUED. There may be issued under
the Plan pursuant to the exercise of Options an aggregate of not more than
250,000 common shares, subject to adjustment as provided in Paragraph 6 below.
If any Option is cancelled, terminates or expires unexercised, in whole or in
part, any common shares that would otherwise have been issuable pursuant thereto
will be available for issuance under new Options.
(c) RIGHTS WITH RESPECT TO SHARES. A Non-Employee Director to whom an Option
is granted (and any person succeeding to such a Non-Employee Director's rights
pursuant to the Plan) shall have no rights as a shareholder with respect to any
common shares issuable pursuant to any such Option until the date of the
issuance of a stock certificate to him for such shares. Except as provided in
Paragraph 6 below, no adjustment shall be made for dividends, distributions or
other rights (whether ordinary or extraordinary, and whether in cash, securities
or other property) for which the record date is prior to the date such stock
certificate is issued.
5. NONQUALIFIED STOCK OPTIONS. Each Option granted under the Plan shall be
evidenced by an agreement in such form as the Board shall prescribe from time to
time in accordance with the Plan and shall comply with the following terms and
conditions:
(a) The Option exercise price shall be the fair market value of the
common shares subject to such Option on the date the Option is granted,
which shall be the average of the high and the low sales prices of a common
share on the date of grant as reported on the New York Stock Exchange
Composite Transactions Tape or, if the New York Stock Exchange is closed on
that date, on the last preceding date on which the New York Stock Exchange
was open for trading; but in no event will such Option exercise price be
less than the par value of such a common share.
(b) Each year beginning in 1994, as of the date of his election or
re-election as a member of the Board at the annual meeting of shareholders
of the Company, each Non-Employee Director shall automatically receive an
Option for 1,000 common shares, [SUBJECT TO ADJUSTMENT AS PROVIDED IN
PARAGRAPH 6 BELOW.]
(c) The Option shall not be transferable by the optionee otherwise than
by will or the laws of descent and distribution, and shall be exercisable
during his lifetime only by him.
(d) The Option shall not be exercisable:
52
<PAGE>
(i) before the expiration of one year from the date it is granted
and after the expiration of ten years from the date it is granted, and
may be exercised during such period as follows: one-third (33 1/3%) of
the total number of common shares covered by the Option shall become
exercisable each year beginning with the first anniversary of the date
it is granted; provided that an Option shall automatically become
immediately exercisable in full when the Non-Employee Director ceases to
be a Non-Employee Director for any reason other than death;
(ii) unless payment in full is made for the common shares being
acquired thereunder at the time of exercise; such payment shall be made
(A) in United States dollars by cash or check, or
(B) in lieu thereof, by tendering to the Company common shares
owned by the person exercising the Option and having a fair market
value equal to the cash exercise price applicable to such Option,
such fair market value to be the average of the high and the low
sales prices of a common share on the date of exercise as reported
on the New York Stock Exchange Composite Transactions Tape, or, if
the New York Stock Exchange is closed on that date, on the last
preceding date on which the New York Stock Exchange was open for
trading, or
(C) by a combination of United States dollars and common shares
as aforesaid; and
(iii) unless the person exercising the Option has been at all times
during the period beginning with the date of grant of the Option and
ending on the date of such exercise, a Non-Employee Director of the
Company, except that
(A) if such person shall cease to be such a Non-Employee
Director for reasons other than death, while holding an Option that
has not expired and has not been fully exercised, such person, at
any time within three years of the date he ceased to be such a
Non-Employee Director (but in no event after the Option has expired
under the provisions of subparagraph 5(d)(i) above), may exercise
the Option with respect to any common shares as to which he has not
exercised the Option on the date he ceased to be such a Non-Employee
Director; or
(B) if any person to whom an Option has been granted shall die
holding an Option that has not expired
53
<PAGE>
and has not been fully exercised, his executors, administrators,
heirs or distributees, as the case may be, may, at any time within
one year after the date of such death (but in no event after the
Option has expired under the provisions of subparagraph 5(d)(i)
above), exercise the Option with respect to any shares as to which
the decedent could have exercised the Option at the time of his
death.
Notwithstanding anything in the Plan to the contrary, in accordance with the
applicable provisions of the Agreement and Plan of Merger dated as of March 26,
1990 (the 'Merger Agreement') relating to the merger of SLHH with a subsidiary
of the Company, as of April 26, 1993 Options shall be granted under the Plan to
certain individuals who were directors of SLHH in full satisfaction of the
Company's obligations under the Merger Agreement to replace options previously
granted under the Shearson Lehman Brothers Holdings Inc. Stock Option Plan for
Non-Employee Directors.
6. DILUTION AND OTHER ADJUSTMENTS. 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, a sale by the Company of all or part of its assets, any distribution to
shareholders other than a normal cash dividend, or other extraordinary or
unusual event, [(I)] the number or kind of shares that may be issued under the
Plan pursuant to subparagraph 4(b) above, and the number or kind of shares
subject to, and the Option price per share under, all outstanding Options shall
be automatically adjusted so that the proportionate interest of the participant
shall be maintained as before the occurrence of such event; such adjustment in
outstanding Options shall be made without change in the total Option exercise
price applicable to the unexercised portion of such Options and with a
corresponding adjustment in the Option exercise price per share, and [(II) THE
NUMBER OR KIND OF SHARES FOR WHICH GRANTS ARE SUBSEQUENTLY TO BE MADE PURSUANT
TO PARAGRAPH 5(B) ABOVE SHALL AUTOMATICALLY BE EQUITABLY ADJUSTED TO REFLECT
SUCH CHANGES. ANY] such adjustment shall be conclusive and binding for all
purposes of the Plan.
7. MISCELLANEOUS PROVISIONS.
(a) Except as expressly provided for in the Plan, no Non-Employee
Director or other person shall have any claim or right to be granted an
Option under the Plan. Neither the Plan nor any action taken hereunder shall
be construed as giving any Non-Employee Director any right to be retained in
the service of the Company.
54
<PAGE>
(b) Except as may be approved by the board, an option or a
participant's rights and interest under the Plan may not be assigned or
transferred, hypothecated or encumbered in whole or in part either directly
or by operation of law or otherwise (except in the event of a participant's
death, by will or the laws of descent and distribution), including, but not
by way of limitation, execution, levy, garnishment, attachment, pledge,
bankruptcy or in any other manner, and no such right or interest of any
participant in the Plan shall be subject to any obligation or liability of
such participant.
(c) No common shares shall be issued hereunder unless counsel for the
Company shall be satisfied that such issuance will be in compliance with
applicable federal, state, local and foreign securities, securities exchange
and other applicable laws and requirements.
(d) It shall be a condition to the obligation of the Company to issue
common shares upon exercise of an Option, that the participant (or any
beneficiary or person entitled to act under subparagraph 5(d)(iii)(B) above)
pay to the Company, upon its demand, such amount as may be requested by the
Company for the purpose of satisfying any liability to withhold federal,
state, local or foreign income or other taxes. If the amount requested is
not paid, the Company may refuse to issue common shares.
(e) The expenses of the Plan shall be borne by the Company.
(f) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the issuance of shares upon exercise of any Option under
the Plan, and rights to the issuance of shares upon exercise of Options
shall be subordinate to the claims of the Company's general creditors.
(g) By accepting any Option or other benefit under the Plan, each
participant and each person claiming under or through him shall be
conclusively deemed to have indicated his acceptance and ratification of,
and consent to, any action taken under the Plan by the Company or the Board.
(h) The masculine pronoun means the feminine and the singular means the
plural in the Plan, wherever appropriate.
(i) The appropriate officers of the Company shall cause to be filed any
reports, returns or other information regarding Options hereunder or any
common shares issued pursuant hereto as may be required by Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended, or any other
applicable statute, rule or regulation.
55
<PAGE>
8. AMENDMENT OR DISCONTINUANCE. The Plan may be amended at any time and from
time to time by the Board as the Board shall deem advisable; provided, however,
that no amendment shall become effective without shareholder approval if such
shareholder approval is required by law, rule or regulation, and provided
further, to the extent required by Rule 16b-3 under Section 16 of the Securities
Exchange Act of 1934, in effect from time to time. Plan provisions relating to
the amount, price and timing of Options shall not be amended more than once
every six months, except that the foregoing shall not preclude any amendment to
comport with changes in the Internal Revenue Code of 1986, the Employee
Retirement Income Security Act of 1974 or the rules thereunder in effect from
time to time. No amendment of the Plan shall materially and adversely affect any
right of any participant with respect to any Option theretofore granted without
such participant's written consent.
9. TERMINATION. This Plan shall terminate upon the earlier of the following
dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating the Plan;
or
(b) ten years from the date the Plan is initially approved and adopted
by the shareholders of the Company in accordance with Paragraph 10 below.
No termination of the Plan shall materially and adversely affect any of the
rights or obligations of any person, without his consent, under any Option
theretofore granted under the Plan.
10. SHAREHOLDER APPROVAL AND ADOPTION. Except as set forth below, the Plan
shall be submitted to the shareholders of the Company for their approval and
adoption on or before April 26, 1993. The Plan shall not be effective and no
Option shall be granted hereunder unless and until the Plan has been so approved
and adopted. The shareholders shall be deemed to have approved and adopted the
Plan only if it is approved and adopted at a meeting of the shareholders duly
held on or before that date (or any adjournment of said meeting occurring
subsequent to such date) by vote taken in the manner required by the laws of the
State of New York.
56
<PAGE>
DIRECTIONS TO THE 2000 ANNUAL MEETING OF
SHAREHOLDERS OF
AMERICAN EXPRESS COMPANY
Our world headquarters is the site of the 2000 Annual Meeting of
Shareholders. We are located at 200 Vesey Street on the west side of lower
Manhattan in the World Financial Center. The World Financial Center is connected
to the World Trade Center by two pedestrian overpasses and is also accessible at
street level by car.
BY SUBWAY
Take any of these subway lines: the A, C, E, N, R or the 1, 2, 3, 4, 5 or 9
trains. All of these trains stop at or near the World Trade Center. Walk from
the World Trade Center across the Westside Highway (also known as West Street)
by going across one of the two pedestrian overpasses. Our building is on the
north side of the Winter Garden in the World Financial Center.
BY CAR OR TAXI
Go south on the Westside Highway in lower Manhattan toward the twin towers
of the World Trade Center. Come into the World Financial Center, which is
directly across the Westside Highway from the towers, by turning west on either
Murray Street or Vesey Street. Go to the main entrance of our building, located
at the corner of Vesey Street and the Westside Highway.
57
<PAGE>
This Statement is printed with soy ink on recycled paper.
[Logo]
<PAGE>
Appendix 1
[LOGO OF AMERICAN EXPRESS]
AMERICAN EXPRESS COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING ON APRIL 24, 2000
P The undersigned hereby appoints Richard K. Goeltz, Stephen P. Norman
R and Louise M. Parent, or any of them, proxies or proxy, with full
O power of substitution, to vote all common shares of American Express
X Company which the undersigned is entitled to vote at the Annual Meeting
Y of Shareholders to be held at 200 Vesey Street, 26th Floor, New York,
New York, on April 24, 2000 at 10:00 A.M., local time, and at any
adjournment of the Meeting, as indicated on the reverse side of this
proxy card with respect to the proposals set forth in the Proxy
Statement, and in their discretion upon any matter that may properly
come before the meeting or any adjournment of the Meeting. The
undersigned hereby revokes any proxies submitted previously.
PLEASE NOTE ANY COMMENTS OR ADDRESS CHANGE HERE
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(If you have written comments or a change of address in the
space above, please mark the corresponding box on the reverse
side of this card.)
To ensure timely receipt of your vote and to help the Company reduce
costs, you are encouraged to submit your voting instructions over the
Internet or by telephone: simply follow the instructions on the reverse
side of this card.
If you choose to submit your voting instructions by mail, just mark,
sign and date this proxy card on the reverse side and return it
promptly in the envelope provided. You do not need to mark any boxes if
you wish to vote as the Board of Directors recommends.
(CONTINUED AND TO BE DATED AND SIGNED ON OTHER SIDE)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
NOTICE TO EMPLOYEES PARTICIPATING IN THE AMERICAN EXPRESS INCENTIVE
SAVINGS PLAN:
This proxy card indicates the number of whole shares credited to your
account in the American Express Incentive Savings Plan (ISP) as of
March 1, 2000. These shares will be voted as you instruct if your
proxy card, telephone, or Internet voting instructions are received
on or before April 18, 2000 by ChaseMellon Shareholder Services,
L.L.C., which is acting on behalf of American Express Trust Company,
the Trustee of the ISP.
If the Trustee does not receive your voting instructions by April 18,
2000, the Trustee will vote your ISP shares in the same proportion as
it votes all other shares in the ISP for which it has received timely
voting instructions.
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE Please mark your
MANNER INDICATED BY THE UNDERSIGNED SHAREHOLDER. IF NO votes as indicated
VOTING INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE in this example [X]
VOTED FOR ITEMS 1, 2, 3 AND 4 AND AGAINST ITEM 5.
--- -------
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, 3 AND 4 AND
---
AGAINST ITEM 5.
-------
- --------------------------------------------------------------------------------
ITEM 1 - Election FOR WITHHOLD FROM
of Directors ALL NOMINEES ALL NOMINEES
[ ] [ ]
Nominees:
(01) D.F. Akerson (06) H. Golub (11) D. Lewis
(02) E.L. Artzt (07) B. Sills Greenough (12) R.A. McGinn
(03) W.G. Bowen (08) F.R. Johnson (13) F.P. Popoff
(04) K.I. Chenault (09) V.E. Jordan, Jr.
(05) R.L. Crandall (10) J. Leschly
FOR the slate, except vote WITHHELD from the following nominee(s):
- ------------------------------------------------------------------
FOR AGAINST ABSTAIN
ITEM 2 - Proposal to amend Restated Certificate of
Incorporation to permit 3-for-1 stock split. [ ] [ ] [ ]
ITEM 3 - Proposal to amend 1993 Directors' Stock
Option Plan. [ ] [ ] [ ]
ITEM 4 - Proposal to ratify selection of Ernst &
Young LLP as Independent Auditors. [ ] [ ] [ ]
ITEM 5 - Shareholder proposal relating to political
contributions. [ ] [ ] [ ]
- -------------------------------------------------------------------------------
[ ] If other members of your household are receiving American Express Annual
Reports at this address and you do not wish to receive Annual Reports
for this account in the future, please mark this box. (Note: at least one
Annual Report must be sent to each household.)
[ ] I consent to view all future Proxy Statements and Annual Reports online;
please do not mail paper copies to me.
[ ] COMMENTS/ADDRESS CHANGE - Please mark this box if you have written
comments/address change on the reverse side.
Signature_________________________Signature______________________Date___________
NOTE: Please sign as name appears printed above. Joint owners should each sign.
When signing as attorney, executor, administrator, corporate officer, trustee or
guardian, please give full title.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT!
3 EASY WAYS TO VOTE YOUR PROXY:
INTERNET: WWW.PROXYVOTING.COM/AMEX
Enter the Control Number printed in the box below and proceed
as directed.
OR
TELEPHONE: 1-800-840-1208
Enter the Control Number printed in the box below and proceed as
directed. (Note: You must use a touch tone telephone. There is NO
CHARGE for this call.)
OR
MAIL: Just mark, sign and date the attached proxy card and return it in the
envelope provided.
NOTE: IF YOU VOTE BY INTERNET OR TELEPHONE, PLEASE DO NOT MAIL IN
YOUR PROXY CARD.
INTERNET AND TELEPHONE VOTING ARE AVAILABLE 24 HOURS A DAY - 7
--------------------------------------------------------------
DAYS A WEEK!
------------
---------------------------------------------
WWW.PROXYVOTING.COM/AMEX 1-800-840-1208
---------------------------------------------
CONTROL NUMBER
--------------
STATEMENT OF DIFFERENCES
------------------------
The registered trademark symbol shall be expressed as....................... 'r'
