Item 3 - Proposal to Amend 1993 Directors Stock Option Plan

	Item 1 - Election of Directors
	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 - Ratification of Auditors
	Item 5 - Shareholder Proposal

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.
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 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.
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

The Board of Directors recommends a vote FOR the proposal to amend the American Express Company 1993 Directors’ Stock Option Plan.

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