Exhibit 10.3

March 17, 2017

Mr. Peter D. Hancock

President and Chief Executive Officer

American International Group

175 Water Street

New York, New York 10038

 

  Re: Transition Agreement

Dear Peter:

On behalf of the Board of Directors of American International Group, Inc.
(“AIG”), I express appreciation for your many contributions to AIG and to your
willingness to serve during the transition period described below. This Letter
Agreement sets forth the understanding between you and AIG regarding your
transition.

1. Transition Date

Your employment with AIG will terminate on the earlier of (1) the appointment by
the Board of your successor and (2) December 31, 2017 (the “Transition Date”).
On that date, your separation from service as President and Chief Executive
Officer of AIG and your resignation as a member of the Board, as well as any
other position you hold as an officer or director of AIG or any of its
subsidiaries, affiliates, joint ventures or other related entities, will be
effective. No further action or documentation is required to give effect to your
separation from service and Board resignation as of the Transition Date,
although you agree to execute any further documentation that AIG may reasonably
request to evidence it.

2. Transition Period

From now until the Transition Date (the “Transition Period”), you will continue
to serve as President and Chief Executive Officer of AIG and as a member of the
Board and have the powers, duties and responsibilities customarily associated
with those positions. During the Transition Period, you will receive your
current base salary and a short-term incentive target equal to the short-term
incentive target awarded to you in 2016. You are being granted a 2017 long-term
incentive award with the same target amount awarded to you for your 2016
long-term incentive award, in equal proportion of performance share units and
restricted share units and having the same terms as those applied generally for
2017 grants under the AIG Long Term Incentive Plan (together with any
predecessor, the “LTIP”). During the Transition Period, you may join the board
of any company or civic or

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Peter D. Hancock   Page 2

 

charitable organization with the consent of AIG, which will not be unreasonably
withheld or delayed.

As additional consideration of your agreement to serve during the Transition
Period, you will be entitled, subject only to the terms of this paragraph, to
receive a transition award of $5,000,000 (your “Transition Award”). Your
Transition Award will be paid in a cash lump sum, after the earlier to occur of
the Transition Date or the termination of your employment by AIG without Cause
(as defined below) within 2 business days (the “Transition Payment Date”) after
the execution and delivery of the Release and Restrictive Covenant Agreement in
the form attached hereto and such release becoming irrevocable in accordance
with its terms (such an agreement that becomes irrevocable in accordance with
its terms, a “Final Release”). You agree that you will forfeit your 2017
long-term incentive award and your Transition Award if (a) you voluntarily
terminate your employment prior to the Transition Date, (b) you are terminated
for Cause before the Transition Date or (c) you fail to execute and deliver a
Final Release within 60 days after the termination of your employment.

3. Separation Benefits

Your employment with AIG continues to be at-will, and you may terminate your
employment before the Transition Date. On any termination of your employment,
your separation from services and Board resignation as set forth in Section 1 of
this Letter Agreement will become effective and, provided that within 60 days
after the date of your termination you have executed and delivered a Final
Release, you will be entitled to receive the benefits under the ESP, as in
effect on the date hereof, payable upon a termination by AIG without Cause and
your separation of service will be treated as a termination without Cause for
purposes of the LTIP and outstanding awards thereunder and for all other
purposes, including, without limitation, under the AIG Annual Short-Term
Incentive Plan (as amended and restated effective March 1, 2016) (the “STIP”).
Such benefits will be payable in accordance with the terms and conditions of the
ESP and the LTIP, except (a) that your severance payable under Section IV.C(2)
of the ESP will be calculated as if you had terminated employment on March 8,
2017 and, accordingly, the average bonus shall be computed using calendar years
2013, 2014 and 2015 and (b) such ESP severance benefit shall be payable within 2
business days after the execution and delivery of the Final Release.

Promptly following the date of this Letter Agreement, AIG will establish a rabbi
trust with an independent trustee and having terms as you and AIG mutually
agree, and will deposit in the trust an amount equal to the sum of your
severance payable under Section IV.C(2) of the ESP and your Transition Award.
The trust agreement will provide (a) that an amount equal to your severance is
to be paid within 2 business days after your delivery to the trustee of a
certification that you have terminated employment and executed and delivered a
Final Release and (b) that an amount equal to your Transition Award also is to
be paid within 2 business days following such delivery subject to the additional
condition that you provide a certification that you have not forfeited your
Transition Award in accordance with the terms of this Letter Agreement. You
shall also be entitled to your vested benefits under the AIG Non-Qualified
Retirement Plan and the AIG Qualified Retirement Plan.

You shall be under no obligation to seek other employment or otherwise mitigate
your obligations to AIG hereunder, and there shall be no offset against any
amounts due

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Peter D. Hancock   Page 3

 

hereunder, the ESP, the LTIP, the STIP or otherwise on account of any
remuneration attributable to any subsequent employment of any kind that you may
obtain.

4. Miscellaneous

Notwithstanding the above, (a) if AIG terminates your employment without Cause
prior to the Transition Date, you will be treated in all respects as having
served through the Transition Date under this Letter Agreement, (b) for purposes
of this Letter Agreement, the LTIP, the STIP and the ESP, the term Cause is used
as defined in the ESP as of the date hereof (but without regard to the last two
sentences thereof), (c) AIG is not aware of any circumstance constituting Cause
as defined in the ESP, the LTIP or any other plan or agreement, (d) any adverse
changes to the AIG Clawback Policy, effective as of March 21, 2013, (which is
the only clawback policy applicable to you) after the date of this Letter
Agreement will not apply to you and (e) AIG’s Officer Stock Ownership Guidelines
will cease to apply to you on the date the Final Release becomes non-revocable.
Notwithstanding anything to the contrary herein, in the Final Release, in the
ESP and/or in the LTIP or otherwise, (a) IV.F (Limitations on Severance;
Reductions of Severance), IV.H (Covenants and for “Cause” Terminations), VI
(Release and Restrictive Covenant Agreement), VII (Plan Administration), VIII
(Termination and Amendment) and IX (Claims and Appeals Procedures) of the ESP
shall not be applicable to you and, notwithstanding Section XI.E (Governing Law)
of the ESP, the governing law applicable to your severance entitlements and
obligations shall be the laws of the State of New York (and not the Employee
Retirement Income Security Act of 1974, as amended) and (b) 8.H (Waiver of
Claims) and 9 (Disputes) of the LTIP shall not be applicable to you and Section
6.G (Release of Claims) of the LTIP shall be deemed satisfied by the execution
by you of the Final Release. All release requirements under the ESP, any
long-term incentive plan, any short-term incentive plan or any other plan or
agreement shall be satisfied by the execution and delivery of a Final Release.

Following your termination, the only non-competition obligation that will apply
to you will be as set forth in the Final Release. For purposes of this Letter
Agreement, the first paragraph of Section X of the Final Release will apply only
with respect to actions that are willful and material and that Section IX of the
ESP will not apply to disputes under this Letter Agreement.

You agree (whether during or after your employment with AIG) not to issue,
circulate or publish any disparaging statements or remarks about the Releasees
(as defined in the Final Release). Nothing herein shall prevent you from making
or publishing statements (a) when required by law, subpoena, or court order, (b)
in the course of any legal, arbitral, or regulatory proceeding, (c) to any
governmental authority, regulatory agency or self-regulatory organization or
(d) in connection with any investigation by AIG. The only nondisparagement
obligations that shall apply to you with respect the Releasees shall be those
contained in this paragraph. AIG agrees (whether during or after your employment
with AIG) not to issue, circulate or publish any disparaging statements or
remarks about you and AIG shall use all commercially reasonable efforts to
require and cause all senior executives and members of the AIG board of
directors not to directly or indirectly issue, circulate or publish any
disparaging statements or remarks about you. Nothing herein shall prevent the
Releasees from making or publishing statements (a) when required by law,
subpoena, or court order, (b) in the course of any legal, arbitral, or
regulatory proceeding, (c) to any governmental authority, regulatory agency or
self-regulatory organization or (d) in connection with any investigation by AIG.
Truthful statements in the ordinary course of business with respect to products,
business or strategy of AIG or any competitor shall not violate this paragraph.

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You will be permitted to remove your personal effects from AIG premises. You
will further be permitted to retain a copy of your contact lists and personal
emails maintained in any physical form or on any AIG computer or server,
provided, however, that (a) copies will be identified and provided to you in
accordance with AIG’s historic process in similar circumstances and (b) you
will, subject to the immediately following sentence, not produce such emails
without the consent of AIG. Nothing herein shall prevent you from producing any
emails or contact lists (a) when required by law, subpoena, or court order, (b)
in the course of any legal, arbitral, or regulatory proceeding, (c) to any
governmental authority, regulatory agency or self-regulatory organization or
(d) in connection with any investigation by AIG. You agree to retain any emails
or contact lists in your possession that may be relevant to any pending or
probable litigation, subject to contrary instructions from AIG. AIG also agrees
that it will permit you to retain any digital video and audio files, or copies
thereof, that it possesses of speeches that you made at both internal and
external events. AIG further agrees that it will transfer dominion and control
to you of any LinkedIn and other social media pages or accounts that it
maintains under your name. You and AIG will cooperate in the transition of such
media to you.

Nothing in this Letter Agreement or in the Final Release will limit your rights
to indemnification or advancement under AIG’s Charter, by-laws or directors and
officers insurance policy, which rights will remain in full force and effect in
accordance with their terms.

This Letter Agreement will be governed by and construed in accordance with the
laws of the State of New York, without regard to principles of conflict of laws.
Notwithstanding any provision in the ESP, the LTIP or any other agreement, AIG
and you irrevocably submit to the exclusive jurisdiction of any state or federal
court located in the County of New York with respect to any dispute between AIG
and you arising out of or relating to or concerning this Letter Agreement, the
Final Release, the ESP, the LTIP, the STI or any aspect of your employment with
AIG. To the full extent permitted by law, AIG will advance or pay or reimburse
any reasonable attorney’s fees you incur as a result of any such dispute. AIG
will also pay or reimburse you for reasonable attorney’s fees incurred in
connection with the negotiation of this Letter Agreement.

This Letter Agreement contains the entire agreement of the parties with respect
to the subject matter hereof and supersedes all prior agreements, promises,
covenants, arrangements, communications, representations and warranties between
them, whether written or oral with respect to the subject matter hereof. If any
provision or portion of this Letter Agreement or the application of any
provision or portion of the Letter Agreement shall be determined to be invalid
or unenforceable to any extent or for any reason, all other provisions and
portions of this Letter Agreement shall remain in full force and shall continue
to be enforceable to the fullest and greatest extent permitted by law. This
Letter Agreement may be executed in several counterparts, each of which will be
deemed an original, and such counterparts will constitute one and the same
instrument.

The payments and benefits provided under this Letter Agreement are intended to
be exempt from or otherwise comply with the requirements of Section 409A of the
Internal Revenue Code of 1986 (the “Code”), and this Letter Agreement shall be
interpreted in accordance with such intent and, accordingly, the parties hereto
agree that the payments and benefits set forth herein comply with or are exempt
from the requirements of Section 409A of the Code and agree not to take any
position, and to cause their respective agents, affiliates, successors and
assigns not to take any position, inconsistent with such interpretation for any
reporting purposes whether internal or external. Each payment under this Letter
Agreement will be treated as a separate payment for purposes of Section

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Peter D. Hancock   Page 5

 

409A of the Code. Payment of certain benefits under this Letter Agreement is
subject to your execution of a Final Release within 60 days after the
termination of your employment. Notwithstanding the foregoing, if such 60 day
period ends in a calendar year after the calendar year in which your employment
terminates, then, but only to the extent required by Section 409A of the Code to
avoid taxes and/or interest thereunder on any payments or benefits, any payments
and benefits set forth above that would have been made during the calendar year
in which your employment terminates instead shall be withheld and paid on the
first business day in the calendar year after the calendar year in which your
employment terminates, with all remaining payments to be made as if no such
delay had occurred. If at the time of your separation from service, (A) you are
a specified employee (within the meaning of Section 409A of the Code), and
(B) if an amount payable hereunder constitutes deferred compensation (within the
meaning of Section 409A of the Code) the payment of which is required to be
delayed pursuant to the six-month delay rule set forth in Section 409A of the
Code in order to avoid additional taxes or interest under Section 409A of the
Code, then AIG will not pay such amount on the otherwise scheduled payment date
but will instead pay it in a lump sum on the first business day after such
six-month period (or upon your death)), together with interest for the period of
delay, compounded annually, equal to the prime rate (as published in the Wall
Street Journal) in effect as of the dates the payments should otherwise have
been provided.

*                                             *                    
                        *

Thank you for your service to AIG.

 

Sincerely, American International Group, Inc. By:  

/s/ W. Don Cornwell

  W. Don Cornwell   Chair, Compensation and Management Resources Committee of
the AIG Board of Directors

 

Accepted & Agreed:   

/s/ Peter D. Hancock

  

March 17, 2017

Peter D. Hancock    Date

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EXHIBIT A

AMERICAN INTERNATIONAL GROUP, INC. RELEASE AND RESTRICTIVE COVENANT AGREEMENT

This Release and Restrictive Covenant Agreement (the “Agreement”) is entered
into by and between Peter D. Hancock (the “Employee”) and American International
Group, Inc., a Delaware Corporation (the “Company”).

Each term defined in the American International Group, Inc. 2012 Executive
Severance Plan (the “Plan”) has the same meaning when used in this Agreement.

I. Termination of Employment

The Employee’s employment with the Company and each of its subsidiaries and
controlled affiliates (collectively “AIG”) terminated on the date specified in
the Transition Letter Agreement, dated March 17, 2017, by and between the
Company and the Employee (the “Transition Letter Agreement”) and, as of that
date, the Employee shall cease performing the Employee’s employment duties and
responsibilities for AIG and shall no longer report to work for AIG. For
purposes of this Agreement, the term “controlled affiliates” means an entity of
which the Company directly or indirectly owns or controls a majority of the
voting shares.

II. Severance

The Employee shall receive a lump sum severance payment in the gross amount of
$9,528,890, less applicable tax withholdings paid out in a lump sum as soon as
practicable following the date this Agreement becomes effective, but in no event
later than March 15th of the year immediately following the Termination Year.

The Employee shall also receive a prorated annual short-term incentive bonus for
the Termination Year calculated and paid in accordance with the Termination
Letter and with Section IV.B(1)(b)(ii) of the Plan (but without regard to
Section IV.B(1)(b)(ii). The Employee shall also be entitled to any benefits
under the AIG Long Term Incentive Plan (including any predecessor plan, the
“LTIP”) in accordance with the Transition Letter Agreement. Any bonus or
incentive compensation paid to Employee is subject to the AIG Clawback Policy,
as in effect on the date of the Transition Letter.

The Employee shall also be entitled to a Supplemental Health and Life Payment of
$40,000 which may, among other things, be used to pay for COBRA and life
insurance coverage after the Termination Date. The Employee shall also be paid
accrued wages, reimbursed expenses, and any accrued, unused paid time off
(“PTO”) as of the Termination Date. The Employee shall not accrue any PTO after
the Termination Date.

III. Other Benefits

Nothing in this Agreement modifies or affects any of the terms of any benefit
plans or programs (defined as medical, life, pension and 401(k) plans or
programs and including, without limitation, the Company’s right to alter the
terms of such plans or programs). No further deductions or employer matching
contributions shall be made on behalf of the Employee to the American
International Group, Inc. Incentive Savings Plan (“ISP”) as of the last day of
the pay period in which the Termination Date occurs.

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The Employee shall no longer participate in or be eligible for coverage under
the Company’s Short-Term and Long-Term Disability programs, and the ISP. After
the Termination Date, the Employee may decide, under the ISP, whether to elect a
rollover or distribution of the Employee’s account balance or to keep the
account balance in the ISP.

As set forth in Section IV.D of the Plan, the Employee shall be entitled to
continued health insurance coverage under COBRA for a period in accordance with
the requirements under COBRA unless the Employee is or becomes ineligible under
the provisions of COBRA for continuing coverage. The Employee shall be solely
responsible for paying the full cost of the monthly premiums for COBRA
coverage. In addition, the Employee shall be entitled to one (1) year of
additional service credit and credit for additional age solely for purposes of
determining the Employee’s eligibility to participate in any Company Retiree
Medical program and, if eligible, may choose to participate in such Company
Retiree Medical program as of the Termination Date at the applicable rate or pay
for COBRA coverage. If the Employee chooses to pay for COBRA coverage and
retains such coverage for the full COBRA period, the Employee may participate in
the Company Retiree Medical program following the COBRA period.

As set forth in Section IV.E of the Plan, the Employee shall be entitled to one
(1) year of additional service credit and credit for additional age solely for
purposes of determining vesting and eligibility for retirement (including early
retirement) under the American International Group, Inc. Non-Qualified
Retirement Income Plan (the “Non-Qualified Plan”). To the extent that the
Employee has a vested benefit under the Non-Qualified Plan, any payments under
the Non-Qualified Plan shall commence at the time specified in the Non-Qualified
Plan, and shall be calculated as if “Qualified Plan Retirement Income” (as
defined in the Non-Qualified Plan) began to be paid immediately following the
Termination Date.

Except as set forth in this Agreement, the Transition Letter Agreement and
Sections IV.D and E of the Plan there are no other payments or benefits due to
the Employee from the Company.

The payments and benefits provided under this Agreement are intended to be
exempt from or otherwise comply with the requirements of Section 409A of the
Internal Revenue Code of 1986 (the “Code”), and this Agreement shall be
interpreted in accordance with such intent and, accordingly, the parties hereto
agree that the payments and benefits set forth herein comply with or are exempt
from the requirements of Section 409A of the Code and agree not to take any
position, and to cause their respective agents, affiliates, successors and
assigns not to take any position, inconsistent with such interpretation for any
reporting purposes whether internal or external. Each payment under this
Agreement will be treated as a separate payment for purposes of Section 409A of
the Code. Payment of certain benefits under this Agreement is subject to
Employee’s execution of a non-revocable release within 60 days after the date of
Employee’s termination. Notwithstanding the foregoing, if such 60 day period
ends in a calendar year after the calendar year in which the Employee’s
employment terminates, then, but only to the extent required by Section 409A of
the Code to avoid taxes and/or interest thereunder on any payments or benefits,
any payments and benefits set forth above that would have been made during the
calendar year in which the Employee’s employment terminates instead shall be
withheld and paid on the first business day in the calendar year after the
calendar year in which the Employee’s employment terminates, with all remaining
payments to be made as if no such delay had occurred. If at the time of the
Employee’s separation from service, (A) Employee is a specified employee (within
the meaning of Section 409A of the Code), and (B) if an amount payable hereunder
constitutes deferred compensation (within the meaning of Section 409A of the
Code) the payment of which is required to be delayed pursuant to the six-month
delay rule set forth in Section 409A of the Code in order to avoid additional
taxes or interest under Section 409A of the Code, then AIG will not pay such
amount on the otherwise scheduled payment date but will instead pay it in a lump
sum on the first business day after such six-month period (or upon Employee’s
death)), together with interest for the period of delay,

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compounded annually, equal to the prime rate (as published in the Wall Street
Journal) in effect as of the dates the payments should otherwise have been
provided.

IV. Release of Claims

In consideration of the payments and benefits described in Section IV of the
Plan and Section II and III of this Agreement, to which the Employee agrees the
Employee is not entitled until and unless the Employee executes this Agreement,
the Employee, for and on behalf of the Employee and the Employee’s heirs and
assigns, subject to the following two sentences hereof, agrees to all the terms
and conditions of this Agreement and hereby waives and releases any common law,
statutory or other complaints, claims, or causes of action of any kind
whatsoever, both known and unknown, in law or in equity, which the Employee ever
had, now has or may have against AIG and its successors, assigns, directors,
officers, partners, members, employees, agents benefit plans, or the Plan
(collectively, the “Releasees”), arising on or before the date of the Employee’s
execution of this Agreement, including, without limitation, any complaint, or
cause of action arising under federal, state or local laws pertaining to
employment, including the Age Discrimination in Employment Act of 1967 (“ADEA,”
a law which prohibits discrimination on the basis of age), the National Labor
Relations Act, the Civil Rights Act of 1991, the Americans With Disabilities Act
of 1990, Title VII of the Civil Rights Act of 1964, the New Jersey Conscientious
Employee Protection Act/ the District of Columbia Human Rights Act/the West
Virginia Rights Act/ the Massachusetts Wage Act, (M.G.L. ch. 149 §§ 148, et
seq.), the Massachusetts Fair Employment Practices Act (M.G.L. ch. 151B § 1, et
seq.), Massachusetts Civil Rights Act (M.G.L. ch. 12 §§ 11H and 11I), the
Massachusetts Equal Rights Act (M.G.L. ch. 93 §102, and M.G.L. ch. 214 §
1C), the Massachusetts Labor and Industries Act (M.G.L. ch. 149 § 1, et seq.),
the Massachusetts Privacy Act (M.G.L. ch. 214 §§ 1B), all as amended; and all
other federal, state, local and foreign laws and regulations. By signing this
Agreement, the Employee acknowledges that the Employee intends to waive and
release any rights known or unknown that the Employee may have against the
Releasees under these and any other laws; provided, that the Employee does not
waive or release claims with respect to the right to enforce the Employee’s
rights under (i) this Agreement, (ii) the Transition Agreement, (iii) the LTIP
(or any award agreement thereunder), (iii) any rights to indemnification under
any agreements, plans or the Charter and by-laws of AIG, (iv) rights under any
directors and officers insurance or other policies and (v) any vested rights
under any qualified or non-qualified retirement or deferred compensation plan
(the “Unreleased Claims”). Nothing herein modifies or affects any vested rights
that Employee many have under any applicable retirement plan, 401(k) plan,
incentive plan or deferred compensation plan, including, without limitation, the
AIG Annual Short-Term Incentive Plan (or any award agreement thereunder), the
AIG 2013 Long-Term Incentive Plan (or any award agreement thereunder) and the
AIG 2013 Omnibus Incentive Plan (or any predecessor); nor, except as set forth
herein or in the Transition Letter Agreement, does this Agreement confer any
rights with respect to such plans, which are governed by the terms of the
respective plans (and any agreements under such plans).

V. Proceedings

The Employee acknowledges that the Employee has not filed any complaint, charge,
claim or proceeding, except with respect to an Unreleased Claim, if any, against
any of the Releasees before any local, state or federal agency, court or other
body (each individually a “Proceeding”). The Employee represents that the
Employee is not aware of any basis on which such a Proceeding could reasonably
be instituted. By signing this Agreement the Employee:

(a) Acknowledges that the Employee shall not initiate or cause to be initiated
on his or her behalf any Proceeding and shall not participate in any Proceeding,
in each case, except as set forth below or as required by law; and

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(b) Waives any right to recover monetary damages or other individual relief
arising out of any Proceeding.

Notwithstanding the above, nothing in Section V of this Agreement shall:

(x) limit or affect the Employee’s right to challenge the validity of the
Employee’s release set forth in Section V above under the ADEA, or the Older
Workers Benefit Protection Act;

(y) prevent the Employee from filing a charge or complaint with, or
participating in any investigation or proceeding conducted by the EEOC, the
National Labor Relations Board or other federal, state or local governmental or
regulatory agencies.

VI. Time to Consider

The payments and benefits payable to the Employee under this Agreement include
consideration provided to the Employee over and above anything of value to which
the Employee already is entitled. The Employee acknowledges that the Employee
has been advised that the Employee has 21 days from the date of the Employee’s
receipt of this Agreement to consider all the provisions of this Agreement.

THE EMPLOYEE FURTHER ACKNOWLEDGES THAT THE EMPLOYEE HAS READ THIS AGREEMENT
CAREFULLY, HAS BEEN ADVISED BY THE COMPANY TO, CONSULT AN ATTORNEY, AND FULLY
UNDERSTANDS THAT BY SIGNING BELOW THE EMPLOYEE IS GIVING UP CERTAIN RIGHTS WHICH
THE EMPLOYEE MAY HAVE TO SUE OR ASSERT A CLAIM AGAINST ANY OF THE RELEASEES, AS
DESCRIBED IN SECTION IV OF THIS AGREEMENT AND THE OTHER PROVISIONS HEREOF. THE
EMPLOYEE ACKNOWLEDGES THAT THE EMPLOYEE HAS NOT BEEN FORCED OR PRESSURED IN ANY
MANNER WHATSOEVER TO SIGN THIS AGREEMENT, AND THE EMPLOYEE AGREES TO ALL OF ITS
TERMS VOLUNTARILY.

VII. Revocation

The Employee hereby acknowledges and understands that the Employee shall have
seven days from the date of the Employee’s execution of this Agreement to revoke
this Agreement (including, without limitation, any and all claims arising under
the ADEA) by providing written notice of revocation delivered to the Chief
HR/Employment Counsel of the Company no later than 5:00 p.m. on the seventh day
after the Employee has signed the Agreement. Neither the Company nor any other
person is obligated to provide any benefits to the Employee pursuant to Section
IV of the Plan or this Agreement until eight days have passed since the
Employee’s signing of this Agreement without the Employee having revoked this
Agreement. If the Employee revokes this Agreement pursuant to this Section, the
Employee shall be deemed not to have accepted the terms of this Agreement, and
no action shall be required of AIG under any section of this Agreement. This
Agreement will not become effective and enforceable until the eighth day after
Employee’s signature (if not revoked pursuant to the terms of this paragraph).

VIII. No Admission

This Agreement does not constitute an admission of liability or wrongdoing of
any kind by the Employee or AIG.

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IX. Restrictive Covenants

A. Non-Solicitation/Non-Competition

The Employee acknowledges and recognizes the highly competitive nature of the
businesses of AIG and accordingly agrees as follows:

1. During the period commencing on the Employee’s Termination Date and ending on
the one-year anniversary of such date (the “Restricted Period”), the Employee
shall not, directly or indirectly, regardless of who initiates the
communication, , solicit, participate in the solicitation or recruitment of, or
in any manner encourage or provide assistance to any employee, consultant,
registered representative, or agent of AIG to terminate his or her employment or
other relationship with AIG or to leave its employee or other relationship with
AIG for any engagement in any capacity or for any other person or entity,
without AIG’s written consent.

2. During the period commencing on the Employee’s Termination Date and ending on
the six-month anniversary of such date, the Employee shall not, directly or
indirectly:

(a) Engage in any “Competitive Business” (defined below) for the Employee’s own
account;

(b) Enter the employ of, or render any services to, any person engaged in any
Competitive Business;

(c) Acquire a financial interest in, or otherwise become actively involved with,
any person engaged in any Competitive Business, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent, trustee
or consultant; or

(d) Interfere with business relationships between AIG and customers or suppliers
of, or consultants to AIG.

3. For purposes of this ,Agreement, a “Competitive Business” means, as of any
date, any person or entity (including any joint venture, partnership, firm,
corporation or limited liability company) that engages in or proposes to engage
in the underwriting of primary insurance as its main business in any
geographical area in which AIG does such business.

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4. Notwithstanding anything to the contrary in this Agreement, the Employee may
directly or indirectly, own, solely as an investment, securities of any person
engaged in the business of AIG which are publicly traded on a national or
regional stock exchange or on the over-the-counter market if the Employee (a) is
not a controlling person of, or a member of a group which controls, such person
and (b) does not, directly or indirectly, own one percent or more of any class
of securities of such person.

5. The Employee understands that the provisions of this Section IX.A may limit
the Employee’s ability to earn a livelihood in a business similar to the
business of AIG but the Employee nevertheless agrees and hereby acknowledges
that:

(a) Such provisions do not impose a greater restraint than is necessary to
protect the goodwill or other business interests of AIG;

(b) Such provisions contain reasonable limitations as to time and scope of
activity to be restrained;

(c) Such provisions are not harmful to the general public; and

(d) Such provisions are not unduly burdensome to the Employee. In consideration
of the foregoing and in light of the Employee’s education, skills and abilities,
the Employee agrees that he shall not assert that, and it should not be
considered that, any provisions of Section IX.A otherwise are void, voidable or
unenforceable or should be voided or held unenforceable.

6. It is expressly understood and agreed that, although the Employee and the
Company consider the restrictions contained in this Section IX.A to be
reasonable, if a judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Section IX.A or elsewhere in this Agreement is an unenforceable restriction
against the Employee, the provisions of the Agreement shall not be rendered void
but shall be deemed amended to apply as to such maximum time and territory and
to such maximum extent as such court may judicially determine or indicate to be
enforceable. Alternatively, if any court of competent jurisdiction finds that
any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained herein.

B.    Nondisparagement

The Employee agrees (whether during or after his employment with AIG) not to
issue, circulate or publish any disparaging statements or remarks about the
Releasees (as defined herein). Nothing herein shall prevent the Employee from
making or publishing statements (a) when required by law, subpoena, or court
order, (b) in the course of any legal, arbitral, or regulatory proceeding,
(c) to any governmental authority, regulatory agency or self-regulatory
organization or (d) in connection with any investigation by AIG. The only
nondisparagement obligations that shall apply to the Employee with respect the
Releasees shall be those contained in this paragraph. AIG agrees (whether during
or after the Employee’s employment with AIG) not to issue, circulate or publish
any disparaging statements or remarks about the Employee and AIG shall all
commercially reasonable to require and cause all senior executives and members
of the AIG board of directors not to directly or indirectly issue, circulate or
publish any disparaging statements or remarks about the Employee. Nothing herein
shall prevent the Releasees from making or publishing statements (a)

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when required by law, subpoena, or court order, (b) in the course of any legal,
arbitral, or regulatory proceeding, (c) to any governmental authority,
regulatory agency or self-regulatory organization or (d) in connection with any
investigation by AIG. Truthful statements in the ordinary course of business
with respect to products, business or strategy of AIG or any competitor shall
not violate this paragraph.

C. Code of Conduct

The Employee agrees to abide by all of the terms of the Company’s Code of
Conduct or the Director, Executive Officer and Senior Financial Officer Code of
Business Conduct and Ethics that continue to apply after termination of
employment.

D. Confidentiality/Company Property

The Employee acknowledges that the disclosure of this Agreement or any of the
terms hereof could prejudice AIG and would be detrimental to AIG’s continuing
relationship with its employees. Accordingly, the Employee agrees not to discuss
or divulge either the existence or contents of this Agreement (except, if
required, Employee many disclose the contents of Section IX.A only, in
connection with prospective employment) to anyone other than the Employee’s
immediate family, attorneys, tax and financial advisors, governmental
authorities or as may be legally required, and further agrees to use the
Employee’s best efforts to ensure that none of Employee’s immediate family,
attorneys, or tax and financial advisors will reveal its existence or contents
to anyone else. The Employee shall not, without the prior written consent of
AIG, use, divulge, disclose or make accessible to any other person, firm,
partnership, corporation or other entity, any “Confidential Information” (as
defined below), or any “Personal Information” (as defined below); provided that
the Employee may disclose Confidential Information, or Personal Information when
required to do so by a court of competent jurisdiction, by any governmental
agency having supervisory authority over the business of AIG, as the case may
be, or by any administrative body or legislative body (including a committee
thereof) with jurisdiction to order the Employee to divulge, disclose or make
accessible such information; provided, further, that in the event that the
Employee is ordered by a court or other government agency to disclose any
Confidential Information or Personal Information, the Employee shall (if
permitted to do so by applicable law):

(a) Promptly notify AIG of such order;

(b) At the written request of AIG, diligently contest such order at the sole
expense of AIG; and

(c) At the written request of AIG, seek to obtain, at the sole expense of AIG,
such confidential treatment as may be available under applicable laws for any
information disclosed under such order.

Nothing herein shall prevent Employee from making statements (a) when required
by law, subpoena, or court order, (b) in the course of any legal, arbitral, or
regulatory proceeding, (c) to any governmental authority, regulatory agency or
self-regulatory organization or (d) in connection with any investigation by AIG.

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Upon the Termination Date the Employee shall, except as otherwise set forth in
the Transition Letter Agreement, return AIG property, including, without
limitation, files, records, disks and any media containing Confidential
Information or Personal Information. For purposes of this Section IX.D:

“Confidential Information” means an item of information or a compilation of
information in any form (tangible or intangible), related to AIG’s business that
AIG has not made public or authorized public disclosure of, and that is not
generally known to the public through proper means. Confidential Information
includes, but is not limited to: (a) business plans and analysis, customer and
prospective customer lists, personnel, staffing and compensation information,
marketing plans and strategies, research and development data, financial data,
operational data, methods, techniques, technical data, know-how, innovations,
computer programs, un-patented inventions, and trade secrets; and
(b) information about the business affairs of third parties (including, but not
limited to, customers and prospective customers) that such third parties provide
to Company in confidence.

“Personal Information” shall mean any information concerning the personal,
social or business activities of the officers or directors of the Company.

E. Developments

Developments shall be the sole and exclusive property of AIG. The Employee
agrees to, and hereby does, assign to AIG, without any further consideration,
all of the Employee’s right, title and interest throughout the world in and to
all Developments. The Employee agrees that all such Developments that are
copyrightable may constitute works made for hire under the copyright laws of the
United States and, as such, acknowledges that AIG is the author of such
Developments and owns all of the rights comprised in the copyright of such
Developments. The Employee hereby assigns to AIG without any further
consideration all of the rights comprised in the copyright and other proprietary
rights the Employee may have in any such Development to the extent that it might
not be considered a work made for hire. The Employee shall make and maintain
adequate and current written records of all Developments and shall disclose all
Developments promptly, fully and in writing to the Company promptly after
development of the same, and at any time upon request.

“Developments” shall mean all discoveries, inventions, ideas, technology,
formulas, designs, software, programs, algorithms, products, systems,
applications, processes, procedures, methods and improvements and enhancements
conceived, developed or otherwise made or created or produced by the Employee
alone or with others, and in any way relating to the business or any proposed
business of AIG of which the Employee has been made aware, or the products or
services of AIG of which the Employee has been made aware, whether or not
subject to patent, copyright or other protection and whether or not reduced to
tangible form, at any time during the Employee’s employment with AIG.

F. Cooperation

The Employee agrees (whether during or after the Employee’s employment with AIG)
that, if served with a subpoena or order that would compel Employee to testify
or respond to any regulatory inquiry, investigation, administrative proceeding
or judicial proceeding regarding or in any way relating to the Releasees,
including but not limited to any proceeding before or investigation by the EEOC
concerning Employee’s employment with the Company, to send immediately (but in
no event later than three (3) business days after Employee has been so served or
notified) a written notification, and provide a copy of the subpoena or order,
by overnight mail to General Counsel, American International Group, Inc., 80
Pine Street, 13th Floor, New York, New York 10005. The

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Employee further agrees (whether during or after the Employee’s employment with
AIG) to cooperate with AIG in connection with any litigation or legal proceeding
or investigatory or regulatory matters in which the Employee may have relevant
knowledge or information, and this cooperation shall include, without
limitation, the following:

(a) To meet and confer, at a time mutually convenient to the Employee and AIG
and to the extent such meetings and conferences do not interfere with any
subsequent employment of Employee, with AIG’s designated in-house or outside
attorneys for purposes of assisting with any litigation or legal proceeding or
any investigatory or regulatory matters, including answering questions,
explaining factual situations, preparing to testify, or appearing for interview,
deposition or trial testimony without the need for the Company to serve a
subpoena for such appearance and testimony; and

(b) To give sworn statements to AIG’s attorneys upon their request and, for
purposes of any deposition or other testimony in any litigation or legal
proceeding or any investigatory or regulatory matters, to adopt AIG’s attorneys
as the Employee’s own at AIG’s expense (provided that there is no conflict of
interest that would disqualify the attorneys from representing the Employee or
which might disadvantage or prejudice the legal rights of the Employee). If any
such conflict, disadvantage or prejudice exists, then the Employee shall hire
his own attorney at AIG’s expense. In addition, the Employee will remain
entitled to indemnification by AIG and directors and officers insurance coverage
and protection under the D&O insurance coverage maintained by AIG.

The Company agrees to reimburse the Employee for reasonable out-of-pocket
expenses necessarily incurred by the Employee in connection with the cooperation
set forth in this paragraph.    

X. Enforcement and Clawback

If at any time the Employee willfully and materially breaches this Agreement,
then: (x) no further payments or benefits shall be due to the Employee under
this Agreement and/or the Plan; and (y) the Employee shall be obligated to repay
to AIG, immediately and in a cash lump sum, the amount of any Severance benefits
(other than any amounts received by the Employee under Section IV.D through F of
the Plan) previously received by the Employee under this Agreement and/or the
Plan (which shall, for the avoidance of doubt, be calculated on a pre-tax
basis); provided that the Employee shall in all events be entitled to receive
accrued wages and expense reimbursement and accrued but unused vacation pay as
set forth in Section IV.A of the Plan.

The Employee acknowledges and agrees that AIG’s remedies at law for a breach or
threatened breach of any of the provisions of Sections IX.A, B, D and E of this
Agreement would be inadequate, and, in recognition of this fact, the Employee
agrees that, in the event of such a breach or threatened breach, in addition to
any remedies at law, AIG, without posting any bond, shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which may
then be available.

XI. Resignation From Board of Directors

The Employee confirms his resignation from directorship of the Company and each
of its subsidiaries and affiliates (and all other directorships, offices, and
trusteeships, held in connection with his/her employment) in accordance with the
Transition Letter Agreement.

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XII.     Inquiries From Prospective Employers

Employee agrees that Employee will direct any inquiries from prospective
employers to The Work Number, at www.theworknumber.com, and the Company agrees
that, in response to any such inquiries, The Work Number will only provide
information regarding the dates of Employee’s employment and last job title, and
shall inform the inquirer that it is company policy to provide only that
information regarding former employees. Employee will need to provide Employee’s
Social Security Number and the AIG Employer Code (AIG-12573) to facilitate these
inquiries.

XIII. General Provisions

A.    No Waiver; Severability

A failure of the Company or any of the Releasees to insist on strict compliance
with any provision of this Agreement shall not be deemed a waiver of such
provision or any other provision hereof. If any provision of this Agreement is
determined to be so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable, and in the event that any
provision is determined to be entirely unenforceable, such provision shall be
deemed severable, such that all other provisions of this Agreement shall remain
valid and binding upon the Employee and the Releasees.

B.    Governing Law

THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO AGREEMENTS MADE AND TO BE WHOLLY PERFORMED WITHIN THAT STATE, WITHOUT REGARD
TO ITS CONFLICT OF LAWS PROVISIONS OR THE CONFLICT OF LAWS PROVISIONS OF ANY
OTHER JURISDICTION WHICH WOULD CAUSE THE APPLICATION OF ANY LAW OTHER THAN THAT
OF THE STATE OF NEW YORK. THE EMPLOYEE CONSENTS TO THE EXCLUSIVE JURISDICTION OF
THE FEDERAL AND STATE COURTS IN NEW YORK.

C.    Entire Agreement/Counterparts

This Agreement and the Transition Letter Agreement constitute the entire
understanding and agreement between the Company and the Employee with regard to
all matters herein. There are no other agreements, conditions, or
representations, oral or written, express or implied, with regard thereto. This
Agreement may be amended only in writing, signed by the parties hereto. This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement may be returned via mail or email. An electronically
transmitted signature shall be treated as an original signature for all
purposes.

D.    Notice

For the purpose of this Agreement, notices and all other communications provided
for in this Agreement shall be in writing and shall be deemed to have been duly
given if delivered: (a) personally; (b) by overnight courier service; (c) by
facsimile transmission; or (d) by United States

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registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses, as set forth below, or to such other address as either
party may have furnished to the other in writing in accordance
herewith; provided that notice of change of address shall be effective only upon
receipt. Notices shall be deemed given as follows: (x) notices sent by personal
delivery or overnight courier shall be deemed given when delivered; (y) notices
sent by facsimile transmission shall be deemed given upon the sender’s receipt
of confirmation of complete transmission; and (z) notices sent by United States
registered mail shall be deemed given two days after the date of deposit in the
United States mail.

If to the Employee, to the address as shall most currently appear on the records
of the Company.

If to the Company, to:

American International Group, Inc.

80 Pine Street, 13th Floor

New York, NY 10005

Fax: 877-481-4969

Attn: Chief HR/Employment Counsel

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement.

 

EMPLOYEE Name:  

 

Date:   AMERICAN INTERNATIONAL GROUP, INC. By:  

 

Name:   Title:   Date: