Exhibit 10.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this “Agreement”), is entered into as of May 14, 2007, by
and between 21st Century Insurance Group, a Delaware corporation (the
“Company”), American International Group, Inc., a Delaware corporation
(“Parent”) and Bruce W. Marlow (“Executive”).

WHEREAS, Executive is currently employed by the Company as its President and
Chief Executive Officer, and is party to a Retention Agreement with the Company
dated as of September 14, 2005 (the “Retention Agreement”) and covered by the
Company’s Executive Severance Plan (the “ESP”); and

WHEREAS, the Company has entered into an Agreement and Plan of Merger with
Parent, dated as of the 15th day of May, 2007, (the “Merger Agreement”); and

WHEREAS, in connection with the transactions contemplated by the Merger
Agreement, Executive is expected to dispose of Executive’s ownership interest in
the Company; and

WHEREAS, as of the date of this Agreement, the Company wishes to continue
Executive’s employment as President, AIG 21st Direct Auto (as defined in Section
4(a) of this Agreement) under the terms of a new employment agreement on the
terms set forth herein, which shall supersede the Retention Agreement and the
ESP; and

WHEREAS, Executive is willing to enter into such agreement; and

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and
for other good and valuable consideration, the parties hereby agree as follows:

1.             TERM OF EMPLOYMENT. SUBJECT TO THE PROVISIONS OF SECTION 9 OF
THIS AGREEMENT, THIS AGREEMENT SHALL BE EFFECTIVE FOR A TERM COMMENCING AS OF
THE EFFECTIVE TIME AS DEFINED IN THE MERGER AGREEMENT (THE “EFFECTIVE DATE”) AND
ENDING ON DECEMBER 31, 2009 (THE “EMPLOYMENT TERM”).  IF A CLOSING (AS DEFINED
IN THE MERGER AGREEMENT) AND THE EFFECTIVE DATE HAVE NOT OCCURRED BY THE CLOSE
OF BUSINESS ON DECEMBER 31, 2007, THIS AGREEMENT WILL BE NULL AND VOID AND
EXECUTIVE WILL RETAIN FULL RIGHTS UNDER THE RETENTION AGREEMENT AND THE ESP.

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2.             POSITION.

(A)           EXECUTIVE SHALL SERVE AS PRESIDENT, AIG 21ST DIRECT AUTO. IN SUCH
POSITION, EXECUTIVE’S DUTIES SHALL CONSIST OF (I) OVERSEEING THE INTEGRATION OF
THE COMPANY AND AIG DIRECT INTO AIG 21ST DIRECT AUTO (BOTH AS DEFINED BELOW);
(II) HELPING TO DESIGN AND IMPLEMENTING STRATEGIES DESIGNED TO ACHIEVE AIG
21ST DIRECT AUTO’S SHORT-TERM AND LONG-TERM GOALS CONSISTENT WITH CURRENT
COMPANY GOALS; (III) MANAGING AIG 21ST DIRECT AUTO’S STAFF, INCLUDING MARKETING,
PRODUCT MANAGEMENT, ACTUARIAL, GOVERNMENT AFFAIRS, SALES AND SERVICE, CLAIMS,
IT, INTERNAL CONTROL, LEGAL, ACCOUNTING, AND ANCILLARY PERSONNEL, THE HIRING AND
FIRING OF COMPANY PERSONNEL, ALL SUBJECT TO REPORTING LINES IMPOSED GENERALLY ON
SUBSIDIARIES OF PARENT (DECISIONS INVOLVING SENIOR POSITIONS WOULD INCLUDE
DISCUSSIONS WITH THE EXECUTIVE VICE PRESIDENT – DOMESTIC PERSONAL LINES OF
PARENT ); (IV) PREPARING AIG 21ST DIRECT AUTO’S ANNUAL BUDGETS FOR APPROVAL BY
PARENT’S MANAGEMENT (AND MANAGING TO THAT BUDGET AND MODIFYING THE BUSINESS PLAN
AS NECESSARY); (V) MAINTAINING CONTROLS TO ASSURE THE ACCURACY OF AIG
21ST DIRECT AUTO’S REPORTED FINANCIAL RESULTS AND ADHERENCE TO PARENT’S
PROTOCOLS; AND (VI) SUCH OTHER DUTIES AS THE BOARD AND EXECUTIVE MAY AGREE UPON
FROM TIME TO TIME.  EXECUTIVE SHALL REPORT TO THE EXECUTIVE VICE PRESIDENT –
DOMESTIC PERSONAL LINES OF PARENT, OR ANY SUCCESSOR TO SUCH POSITION.

(B)           DURING THE EMPLOYMENT TERM, EXECUTIVE WILL DEVOTE HIS FULL
BUSINESS TIME AND BEST EFFORTS TO THE PERFORMANCE OF HIS DUTIES HEREUNDER AND
WILL NOT ENGAGE IN ANY OTHER BUSINESS, PROFESSION OR OCCUPATION FOR COMPENSATION
OR OTHERWISE WHICH WOULD CONFLICT OR INTERFERE WITH THE RENDITION OF SUCH
SERVICES, EITHER DIRECTLY OR INDIRECTLY, OR SERVE ON ANY BOARD OF DIRECTORS OR
TRUSTEES OF ANY BUSINESS CORPORATION OR ANY CHARITABLE OR NOT-FOR-PROFIT
ORGANIZATION, WITHOUT THE PRIOR WRITTEN CONSENT OF THE BOARD OF DIRECTORS OF THE
COMPANY (THE “BOARD”).  NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS AGREEMENT
SHALL PRECLUDE EXECUTIVE (I) FROM MANAGING HIS PERSONAL, FINANCIAL AND LEGAL
AFFAIRS, OR (II) CONTINUING TO SERVE AS A DIRECTOR OF THE LOS ANGELES
PHILHARMONIC.

(C)           THE COMPANY MAY REQUIRE EXECUTIVE TO UNDERTAKE REASONABLE BUSINESS
TRAVEL AS NECESSARY TO IMPLEMENT THE INTEGRATION OF THE COMPANY WITH PARENT AND
MANAGE THE COMBINED ENTITY.  THE COMPANY WILL FULLY REIMBURSE EXECUTIVE FOR
TRAVEL EXPENSES (AIR TRAVEL, GROUND TRANSPORTATION, HOTEL, MEALS, ETC.) INCURRED
IN THE PERFORMANCE OF EXECUTIVE’S DUTIES, IN ACCORDANCE WITH THE COMPANY’S
POLICIES.  EXECUTIVE WILL BE

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ENTITLED TO FIRST CLASS AIR TRAVEL.

(D)           THE COMPANY WILL: (I) REIMBURSE EXECUTIVE IN ACCORDANCE WITH THE
POLICIES OF THE COMPANY FOR ANY REASONABLE RELOCATION EXPENSES OF EXECUTIVE, IF
THE COMPANY REQUIRES HIM TO RELOCATE FROM HIS SOUTHERN CALIFORNIA RESIDENCE
PURSUANT TO HIS DUTIES, AND (II) PAY AND/OR REIMBURSE EXECUTIVE FOR ANY
REASONABLE SECURITY EXPENSES, CONSISTENT WITH PAST PRACTICES OF THE COMPANY.

3.             BASE SALARY.  DURING THE EMPLOYMENT TERM, THE COMPANY SHALL PAY
EXECUTIVE A BASE SALARY (THE “BASE SALARY”) AT THE ANNUAL RATE OF $950,000,
PAYABLE IN REGULAR INSTALLMENTS IN ACCORDANCE WITH THE COMPANY’S USUAL PAYROLL
PRACTICES. DURING THE EMPLOYMENT TERM, THE COMPANY SHALL REVIEW THE BASE SALARY
ANNUALLY AND MAY INCREASE THE BASE SALARY (BUT MAY NOT DECREASE THE BASE
SALARY), AND THE TERM “BASE SALARY” SHALL REFER TO SUCH INCREASED AMOUNT.

4.             ANNUAL AND INCENTIVE BONUS.

(A)           DURING THE EMPLOYMENT TERM, EXECUTIVE SHALL BE ELIGIBLE TO RECEIVE
AN ANNUAL CASH BONUS IN RESPECT OF EACH FULL OR PARTIAL FISCAL YEAR OF THE
COMPANY OF BETWEEN 0% TO 200% OF BASE SALARY (WITH A STI TARGET PERCENTAGE
PURSUANT TO THE COMPANY’S SHORT TERM INCENTIVE PLAN AS IN EFFECT AT THE DATE OF
THIS AGREEMENT (“TARGET BONUS PERCENTAGE”) OF 100% OF BASE SALARY), AS
DETERMINED IN THE SOLE DISCRETION OF THE COMPANY, SUBJECT TO ANY APPLICABLE
APPROVAL OF THE COMPENSATION AND MANAGEMENT RESOURCES COMMITTEE OF THE BOARD OF
DIRECTORS OF PARENT (THE “COMPENSATION COMMITTEE”) (SUCH ANNUAL CASH BONUS, THE
“ANNUAL BONUS”). NOTWITHSTANDING THE FOREGOING, THE ANNUAL BONUS RECEIVED FOR
THE 2007 FISCAL YEAR WILL BE NO LESS THAN $950,000, PROVIDED THAT EXECUTIVE IS
EMPLOYED BY THE COMPANY AS OF DECEMBER 31, 2007.  FOR THE 2007 FISCAL YEAR,
EXECUTIVE’S BONUS SHALL BE BASED ON THE PERFORMANCE CRITERIA IN THE COMPANY’S
SHORT TERM INCENTIVE PLAN, APPLIED TO THE RESULTS OF THE COMBINED ENTITY OF THE
COMPANY AND THE PROFIT CENTER OF PARENT’S SUBSIDIARIES CALLED “AIG DIRECT” (“AIG
DIRECT”) THAT CONDUCTS THE BUSINESS OF DIRECT-TO-CONSUMER AUTOMOBILE INSURANCE
AND SALE OF OTHER ANCILLARY PERSONAL LINES INSURANCE PRODUCTS (AIG DIRECT DOES
NOT INCLUDE AGENCY AUTO OR PRIVATE CLIENT GROUP) (THE COMBINED ENTITY, “AIG
21ST DIRECT AUTO”).  THE COMPANY WILL PAY THE ANNUAL BONUS FOR 2007 DESCRIBED
ABOVE TO EXECUTIVE IN CASH NO LATER THAN MARCH 31, 2008.  FOR THE 2008 AND 2009
FISCAL YEARS, AND PROVIDED THAT EXECUTIVE IS EMPLOYED BY THE COMPANY AT THE TIME
OF PAYMENT

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OF THE ANNUAL BONUS, EXECUTIVE’S TARGET BONUS PERCENTAGE WILL BE NO LESS THAN
100% OF $950,000. FOR THE 2008 AND 2009 FISCAL YEARS, EXECUTIVE’S BONUS SHALL BE
BASED ON THE PERFORMANCE CRITERIA IN THE COMPANY’S SHORT TERM INCENTIVE PLAN AS
APPLICABLE AT THE DATE OF THIS AGREEMENT, APPLIED TO THE RESULTS OF AIG
21ST DIRECT AUTO, UNLESS THE COMPANY’S SHORT TERM INCENTIVE PROGRAM IS
SUPERSEDED BY A BONUS PLAN OF PARENT OR AS OTHERWISE AGREED BETWEEN THE COMPANY
AND EXECUTIVE.

(B)           IF EXECUTIVE REMAINS EMPLOYED BY THE COMPANY ON THE FIRST
ANNIVERSARY OF THE EFFECTIVE DATE, THEN THE COMPANY SHALL PAY TO EXECUTIVE IN A
LUMP SUM WITHIN TEN (10) BUSINESS DAYS THEREAFTER, AN AMOUNT (THE “RETENTION
BONUS”) EQUAL TO THE GREATER OF (I) $2,850,000 OR (II) THE SUM OF (X) 1.5 TIMES
THE BASE SALARY (AT THE RATE IN EFFECT IMMEDIATELY PRIOR TO THE FIRST
ANNIVERSARY OF THE EFFECTIVE DATE) AND (Y) 1.5 TIMES THE LAST ANNUAL CASH BONUS
PAID BY THE COMPANY DURING EXECUTIVE’S EMPLOYMENT.

5.             LONG-TERM AND EQUITY-BASED INCENTIVES.

(A)           ON DATE OF THE FIRST COMPENSATION COMMITTEE MEETING FOLLOWING THE
EFFECTIVE DATE, THE COMPANY AND PARENT SHALL RECOMMEND THAT EXECUTIVE BE GRANTED
OPTIONS WITH RESPECT TO SUCH NUMBER OF PARENT’S SHARES OF PARENT’S COMMON STOCK
HAVING A VALUE AS OF THE DATE OF GRANT OF $1,165,000, AS DETERMINED IN THE SOLE
DISCRETION OF THE COMPENSATION COMMITTEE (ANY GRANT OF OPTIONS PURSUANT TO THIS
SECTION 5(A), “OPTIONS”).  FOR THE 2008 AND 2009 FISCAL YEARS, THE COMPANY AND
PARENT SHALL RECOMMEND THAT EXECUTIVE BE GRANTED OPTIONS WITH RESPECT TO SUCH
NUMBER OF PARENT’S SHARES OF PARENT’S COMMON STOCK WITH A VALUE AS OF THE DATE
OF GRANT OF NOT LESS THAN $1,165,000, AS DETERMINED IN THE SOLE DISCRETION OF
THE COMPENSATION COMMITTEE. ANY SUCH GRANT IS SUBJECT TO THE TERMS AND
CONDITIONS OF THE STOCK OPTION PLAN AND THE AGREEMENT GOVERNING THE GRANT;

(B)           ON THE DATE OF THE FIRST COMPENSATION COMMITTEE MEETING FOLLOWING
THE EFFECTIVE DATE, THE COMPANY AND PARENT SHALL RECOMMEND THAT EXECUTIVE BE
GRANTED 17,500 PERFORMANCE UNITS WITH RESPECT TO PARENT’S PARTNERS PLAN FOR THE
2007-2008 PERFORMANCE PERIOD (ANY GRANT OF PERFORMANCE UNITS PURSUANT TO THIS
SECTION 5(B), “PARTNERS UNITS”). THE COMPANY AND PARENT SHALL RECOMMEND THAT
EXECUTIVE BE GRANTED AT LEAST 17,500 PERFORMANCE UNITS WITH RESPECT TO PARENT’S
PARTNERS PLAN FOR EACH OF THE 2008-2009 AND 2009-2010 PERFORMANCE PERIODS AT THE
TIME WHEN GRANTS ARE MADE FOR SUCH PERFORMANCE PERIODS. ANY SUCH GRANT IS
SUBJECT TO THE TERMS AND CONDITIONS OF THE

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APPLICABLE PLAN AND AGREEMENT GOVERNING SUCH GRANT;

(C)           ON THE DATE OF THE FIRST COMPENSATION COMMITTEE MEETING FOLLOWING
THE EFFECTIVE DATE, THE COMPANY AND PARENT SHALL RECOMMEND THAT EXECUTIVE BE
GRANTED 250 SENIOR PARTNER UNITS WITH RESPECT TO PARENT’S SENIOR PARTNERS PLAN
FOR THE 2005-2007 PERFORMANCE PERIOD (ANY GRANT OF SENIOR PARTNER UNITS PURSUANT
TO THIS SECTION 5(C), “SENIOR PARTNERS UNITS”). THE COMPANY AND PARENT SHALL
RECOMMEND THAT EXECUTIVE BE GRANTED AT LEAST 250 SENIOR PARTNER UNITS WITH
RESPECT TO PARENT’S SENIOR PARTNERS PLAN FOR EACH OF THE 2006-2008 AND 2007-2009
PERFORMANCE PERIODS AT THE TIME WHEN GRANTS ARE MADE FOR SUCH PERFORMANCE
PERIODS. ANY SUCH GRANT IS SUBJECT TO THE TERMS AND CONDITIONS OF THE APPLICABLE
PLAN AND AGREEMENT GOVERNING SUCH GRANT; AND

(D)           ON THE DATE OF THE FIRST COMPENSATION COMMITTEE MEETING FOLLOWING
THE EFFECTIVE DATE, THE COMPANY AND PARENT SHALL RECOMMEND THAT EXECUTIVE BE
GRANTED AN AWARD OF RESTRICTED STOCK UNITS WITH RESPECT TO SHARES OF PARENT’S
COMMON STOCK THAT IS SUFFICIENT TO REPLACE THE VALUE (AS DETERMINED BY THE
COMPANY IN ITS SOLE DISCRETION) OF EXECUTIVE’S OUTSTANDING STOCK OPTIONS AND
AWARDS OF RESTRICTED STOCK FROM THE COMPANY THAT WOULD, BUT FOR THE MERGER, HAVE
VESTED BEYOND THE FIRST ANNIVERSARY OF THE EFFECTIVE DATE. SUCH VALUE WILL BE
BASED ON THE FAIR MARKET VALUE OF PARENT’S COMMON STOCK AT THE EFFECTIVE DATE,
WILL VEST THREE YEARS FROM THE DATE OF GRANT AND WILL BE OTHERWISE SUBJECT TO
THE TERMS AND CONDITIONS OF THE APPLICABLE PLAN AND AGREEMENT GOVERNING SUCH
GRANT.

6.             EMPLOYEE BENEFITS. DURING THE EMPLOYMENT TERM, EXECUTIVE SHALL BE
ENTITLED TO PARTICIPATE IN THE COMPANY’S EMPLOYEE BENEFIT PLANS (OTHER THAN ANY
SEVERANCE OR CHANGE-IN-CONTROL PLAN) PURSUANT TO THE TERMS AND CONDITIONS OF THE
APPLICABLE PLANS.

7.             VACATION. EXECUTIVE SHALL BE ENTITLED TO FOUR (4) WEEKS ANNUAL
PAID VACATION IN ACCORDANCE WITH THE VACATION POLICY OF THE COMPANY.

8.             BUSINESS EXPENSES.  DURING THE EMPLOYMENT TERM, REASONABLE
BUSINESS EXPENSES INCURRED BY EXECUTIVE IN THE PERFORMANCE OF HIS DUTIES
HEREUNDER SHALL BE REIMBURSED BY THE COMPANY IN ACCORDANCE WITH COMPANY POLICY.

9.             TERMINATION. NOTWITHSTANDING ANY OTHER PROVISION OF THE
AGREEMENT:

(A)           FOR CAUSE BY THE COMPANY. EXECUTIVE’S EMPLOYMENT MAY BE

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TERMINATED AT ANY TIME PRIOR TO THE END OF THE EMPLOYMENT TERM BY THE COMPANY
FOR CAUSE UPON DELIVERY OF A “NOTICE OF TERMINATION” (AS DEFINED IN
SECTION 9(F)) BY THE COMPANY TO EXECUTIVE.  FOR PURPOSES OF THIS AGREEMENT,
“CAUSE” SHALL MEAN, WHETHER OCCURRING PRIOR TO, OR ON OR AFTER THE EFFECTIVE
DATE, (I) EXECUTIVE’S CONTINUED FAILURE TO PERFORM SUBSTANTIALLY HIS DUTIES WITH
THE COMPANY (OTHER THAN ANY SUCH FAILURE RESULTING FROM EXECUTIVE’S INCAPACITY
DUE TO PHYSICAL OR MENTAL ILLNESS) FOR A PERIOD OF TEN (10) DAYS AFTER A WRITTEN
DEMAND FOR SUBSTANTIAL PERFORMANCE OF DUTIES IS DELIVERED TO EXECUTIVE BY THE
BOARD, WHICH SPECIFICALLY (X) IDENTIFIES THE MANNER IN WHICH THE BOARD BELIEVES
THAT EXECUTIVE HAS NOT SUBSTANTIALLY PERFORMED EXECUTIVE’S DUTIES AND (Y)
SUGGESTS CORRECTIVE ACTION, (II) EXECUTIVE’S INTENTIONAL MISCONDUCT OR GROSS
NEGLIGENCE IN CONNECTION WITH EXECUTIVE’S DUTIES, OR AN ACT OF FRAUD OR MATERIAL
ACT OF DISHONESTY BY EXECUTIVE, (III) EXECUTIVE’S MATERIAL VIOLATION OF A
MATERIAL PROVISION OF PARENT’S CODE OF CONDUCT, AS SUCH CODE OF CONDUCT OR ITS
EQUIVALENT POLICIES MAY BE IN EFFECT FROM TIME TO TIME, (III) CONVICTION OF, OR
ENTRY OF A PLEA OF GUILTY OR NO CONTEST BY EXECUTIVE WITH RESPECT TO, A FELONY
OR ANY LESSER CRIME OF WHICH FRAUD OR DISHONESTY IS A MATERIAL ELEMENT, OR
(IV) ANY MATERIAL FAILURE BY EXECUTIVE TO COMPLY WITH A MATERIAL PROVISION OF
SECTION 10 OF THIS AGREEMENT.

If Executive is terminated for Cause pursuant to this Section 9(a), he shall be
entitled to receive his Base Salary through the date of termination and
reimbursement for any unreimbursed business expenses properly incurred by
Executive in accordance with Company policy through the date of Executive’s
termination. If Executive is terminated for Cause pursuant to Section 9(a)(i),
he shall be entitled to continued health and life insurance benefits for
Executive and his spouse and dependents, if any, for a thirty-six (36) month
period following the date of Executive’s termination of employment, on the same
basis as such benefits were provided during Executive’s employment with the
Company; provided, that Executive shall reimburse the Company for the
COBRA-equivalent costs of such coverage and the Company’s obligation to provide
such health and life insurance benefits shall cease with respect to such
benefits at the time Executive becomes eligible for such benefits from another
employer, and he shall have no further rights to any compensation (including any
Base Salary, Annual Bonus (including any Annual Bonus that has been declared but
not yet paid), Retention Bonus, Options, Partners Units, Senior Partners Units
or any long-term or equity-based compensation awards or any other benefits under
this Agreement). For purposes of this Agreement, “COBRA” means the Consolidated
Omnibus Budget Reconciliation Act. All

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other benefits, if any, due Executive following Executive’s termination of
employment for Cause pursuant to this Section 9(a) shall be determined in
accordance with the plans, policies and practices of Parent; provided, however,
that Executive shall not participate in any severance plan, policy or program of
the Company or Parent.

(B)           DISABILITY OR DEATH. EXECUTIVE’S EMPLOYMENT PRIOR TO THE END OF
THE EMPLOYMENT TERM SHALL TERMINATE IMMEDIATELY UPON EXECUTIVE’S DEATH OR
FOLLOWING DELIVERY OF A NOTICE OF TERMINATION BY THE COMPANY TO EXECUTIVE IF
EXECUTIVE BECOMES PHYSICALLY OR MENTALLY INCAPACITATED AND IS THEREFORE UNABLE
FOR A PERIOD OF NINETY (90) CONSECUTIVE DAYS OR ONE-HUNDRED TWENTY (120) DAYS
DURING ANY CONSECUTIVE SIX (6) MONTH PERIOD TO PERFORM HIS DUTIES WITH
SUBSTANTIALLY THE SAME LEVEL OF QUALITY AS IMMEDIATELY PRIOR TO SUCH INCAPACITY
(SUCH INCAPACITY IS HEREINAFTER REFERRED TO AS “DISABILITY”). UPON TERMINATION
OF EXECUTIVE’S EMPLOYMENT HEREUNDER FOR EITHER DISABILITY OR DEATH, EXECUTIVE OR
EXECUTIVE’S ESTATE (AS THE CASE MAY BE) SHALL BE ENTITLED TO RECEIVE (I) HIS
BASE SALARY THROUGH THE LAST DAY OF THE PAYROLL PERIOD DURING WHICH SUCH
TERMINATION OCCURS; (II) ANY UNPAID ANNUAL BONUS FOR ANY FISCAL YEAR PRECEDING
THE YEAR IN WHICH THE TERMINATION OCCURS; AND (III) REIMBURSEMENT FOR ANY
UNREIMBURSED BUSINESS EXPENSES PROPERLY INCURRED BY EXECUTIVE IN ACCORDANCE WITH
COMPANY POLICY THROUGH THE DATE OF EXECUTIVE’S TERMINATION (THE SUM OF (I),
(II) PLUS (III), THE “ACCRUED OBLIGATIONS”), AND (IV) CONTINUED HEALTH AND LIFE
INSURANCE BENEFITS FOR EXECUTIVE AND HIS SPOUSE AND DEPENDENTS, IF ANY, FOR A
THIRTY-SIX (36) MONTH PERIOD FOLLOWING THE DATE OF EXECUTIVE’S TERMINATION OF
EMPLOYMENT, ON THE SAME BASIS AS SUCH BENEFITS WERE PROVIDED DURING EXECUTIVE’S
EMPLOYMENT WITH THE COMPANY; PROVIDED, THAT EXECUTIVE SHALL REIMBURSE THE
COMPANY FOR THE COBRA-EQUIVALENT COSTS OF SUCH COVERAGE AND THE COMPANY’S
OBLIGATION TO PROVIDE SUCH HEALTH AND LIFE INSURANCE BENEFITS SHALL CEASE WITH
RESPECT TO SUCH BENEFITS AT THE TIME EXECUTIVE BECOMES ELIGIBLE FOR SUCH
BENEFITS FROM ANOTHER EMPLOYER. OTHER THAN AS SET FORTH IN THE IMMEDIATELY
FOLLOWING SENTENCE, EXECUTIVE OR EXECUTIVE’S ESTATE (AS THE CASE MAY BE) SHALL
HAVE NO FURTHER RIGHTS TO ANY COMPENSATION (INCLUDING ANY BASE SALARY, ANNUAL
BONUS, RETENTION BONUS, OPTIONS, PARTNERS UNITS, SENIOR PARTNERS UNITS OR ANY
LONG-TERM OR EQUITY-BASED COMPENSATION AWARDS) OR ANY OTHER BENEFITS UNDER THIS
AGREEMENT. ALL OTHER BENEFITS, IF ANY, DUE EXECUTIVE FOLLOWING EXECUTIVE’S
TERMINATION FOR DISABILITY OR DEATH SHALL BE DETERMINED IN ACCORDANCE WITH THE
EQUITY COMPENSATION PLANS OF PARENT; PROVIDED, HOWEVER, THAT EXECUTIVE (OR HIS
ESTATE, AS THE CASE MAY BE) SHALL NOT PARTICIPATE IN ANY SEVERANCE PLAN, POLICY
OR PROGRAM OF THE COMPANY OR PARENT.

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(C)           WITHOUT CAUSE BY THE COMPANY OR FOR GOOD REASON BY EXECUTIVE. 
EXECUTIVE’S EMPLOYMENT MAY BE TERMINATED PRIOR TO THE END OF THE EMPLOYMENT TERM
BY THE COMPANY WITHOUT CAUSE (OTHER THAN BY REASON OF EXECUTIVE’S DISABILITY)
FOLLOWING THE DELIVERY BY THE COMPANY OF A NOTICE OF TERMINATION TO EXECUTIVE,
OR BY EXECUTIVE FOR GOOD REASON FOLLOWING THE DELIVERY BY EXECUTIVE OF A NOTICE
OF TERMINATION TO THE COMPANY. THE EXPIRATION OF THE EMPLOYMENT TERM ON DECEMBER
31, 2009 SHALL NOT BE CONSIDERED A TERMINATION WITHOUT CAUSE UNDER THIS
AGREEMENT OR OTHERWISE RESULT IN THE PAYMENT OF SEVERANCE OR POST-EMPLOYMENT
BENEFITS PURSUANT TO SECTION 9(C) OF THIS AGREEMENT IF EXECUTIVE IS NOT
OTHERWISE TERMINATED PURSUANT TO SECTION 9(C) OF THIS AGREEMENT PRIOR TO SUCH
DATE. IF EXECUTIVE’S EMPLOYMENT IS TERMINATED BY THE COMPANY WITHOUT CAUSE
(OTHER THAN BY REASON OF DISABILITY) OR BY EXECUTIVE FOR GOOD REASON WITHIN THE
PERIOD COMMENCING ON THE FIRST ANNIVERSARY OF THE EFFECTIVE DATE AND ENDING ON
DECEMBER 31, 2009, EXECUTIVE SHALL BE ENTITLED TO RECEIVE:

(I)            WITHIN FIVE (5) BUSINESS DAYS FOLLOWING TERMINATION, A LUMP SUM
PAYMENT IN AN AMOUNT EQUAL TO THE ACCRUED OBLIGATIONS;

(II)           SUBJECT TO EXECUTIVE’S CONTINUED COMPLIANCE WITH SECTION 10 OF
THIS AGREEMENT, AN AMOUNT (AS “SEVERANCE”) EQUAL TO THE GREATER OF (I)
$2,850,000 OR (II) THE SUM OF (X) 1.5 TIMES THE BASE SALARY (AT THE RATE IN
EFFECT IMMEDIATELY PRIOR TO TERMINATION) AND (Y) 1.5 TIMES THE LAST ANNUAL CASH
BONUS PAID BY THE COMPANY DURING EXECUTIVE’S EMPLOYMENT.  THE SEVERANCE SHALL BE
PAYABLE IN EQUAL MONTHLY INSTALLMENTS (EACH, A “SEVERANCE INSTALLMENT”) OVER THE
TWELVE (12) MONTH PERIOD COMMENCING NO EARLIER THAN THE SECOND OF THE COMPANY’S
STANDARD PAYROLL DATES FALLING AFTER SUCH TERMINATION; PROVIDED, HOWEVER, THAT,
IF NECESSARY TO AVOID THE APPLICATION OF SECTION 409A OF THE CODE TO THE
SEVERANCE, EXECUTIVE SHALL NOT RECEIVE ANY INSTALLMENT PAYMENT UNTIL THE FIRST
SCHEDULED PAYROLL DATE THAT OCCURS MORE THAN SIX MONTHS FOLLOWING THE DATE OF
TERMINATION OF EMPLOYMENT (THE “FIRST PAYMENT DATE”), AND, ON THE FIRST PAYMENT
DATE, THE COMPANY WILL PAY EXECUTIVE AN AMOUNT EQUAL TO THE SUM OF ALL SEVERANCE
INSTALLMENTS THAT WOULD HAVE BEEN PAYABLE IN RESPECT OF THE PERIOD PRECEDING THE
FIRST PAYMENT DATE BUT FOR THE DELAY IMPOSED ON ACCOUNT OF THE AFOREMENTIONED
SECTION 409A; AND

(III)          CONTINUED HEALTH AND LIFE INSURANCE BENEFITS FOR EXECUTIVE AND
HIS

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SPOUSE AND DEPENDENTS, IF ANY, FOR A THIRTY-SIX (36) MONTH PERIOD FOLLOWING THE
DATE OF EXECUTIVE’S TERMINATION OF EMPLOYMENT, ON THE SAME BASIS AS SUCH
BENEFITS WERE PROVIDED DURING EXECUTIVE’S EMPLOYMENT WITH THE COMPANY; PROVIDED,
THAT EXECUTIVE SHALL REIMBURSE THE COMPANY FOR THE COBRA-EQUIVALENT COSTS OF
SUCH COVERAGE AND THE COMPANY’S OBLIGATION TO PROVIDE SUCH HEALTH AND LIFE
INSURANCE BENEFITS SHALL CEASE WITH RESPECT TO SUCH BENEFITS AT THE TIME
EXECUTIVE BECOMES ELIGIBLE FOR SUCH BENEFITS FROM ANOTHER EMPLOYER.

IF EXECUTIVE’S EMPLOYMENT IS TERMINATED BY THE COMPANY WITHOUT CAUSE (OTHER THAN
BY REASON OF DISABILITY) OR BY EXECUTIVE FOR GOOD REASON DURING THE PERIOD
COMMENCING ON THE EFFECTIVE DATE AND ENDING ON THE DATE PRECEDING THE FIRST
ANNIVERSARY OF THE EFFECTIVE DATE, EXECUTIVE SHALL BE ENTITLED TO RECEIVE:

(I)            WITHIN FIVE (5) BUSINESS DAYS FOLLOWING TERMINATION, A LUMP SUM
PAYMENT IN AN AMOUNT EQUAL TO THE ACCRUED OBLIGATIONS;

(II)           SUBJECT TO EXECUTIVE’S CONTINUED COMPLIANCE WITH SECTION 10 OF
THIS AGREEMENT, AN AMOUNT (AS “SEVERANCE”) EQUAL TO THE GREATER OF (I)
$5,700,000 OR (II) THE SUM OF (X) 3 TIMES THE BASE SALARY (AT THE RATE IN EFFECT
IMMEDIATELY PRIOR TO TERMINATION) AND (Y) 3 TIMES THE LAST ANNUAL CASH BONUS
PAID BY THE COMPANY DURING EXECUTIVE’S EMPLOYMENT.  THE SEVERANCE INSTALLMENTS
SHALL BE PAYABLE IN EQUAL MONTHLY INSTALLMENTS OVER THE TWELVE (12) MONTH PERIOD
COMMENCING NO EARLIER THAN THE SECOND OF THE COMPANY’S STANDARD PAYROLL DATES
FALLING AFTER SUCH TERMINATION; PROVIDED, HOWEVER, THAT, IF NECESSARY TO AVOID
THE APPLICATION OF SECTION 409A OF THE CODE TO THE SEVERANCE, EXECUTIVE SHALL
NOT RECEIVE ANY INSTALLMENT PAYMENT UNTIL THE FIRST PAYMENT DATE AND, ON THE
FIRST PAYMENT DATE, THE COMPANY WILL PAY EXECUTIVE AN AMOUNT EQUAL TO THE SUM OF
ALL SEVERANCE INSTALLMENTS THAT WOULD HAVE BEEN PAYABLE IN RESPECT OF THE PERIOD
PRECEDING THE FIRST PAYMENT DATE BUT FOR THE DELAY IMPOSED ON ACCOUNT OF THE
AFOREMENTIONED SECTION 409A; AND

(III)          CONTINUED HEALTH AND LIFE INSURANCE BENEFITS FOR EXECUTIVE AND
HIS SPOUSE AND DEPENDENTS, IF ANY, FOR A THIRTY-SIX (36) MONTH PERIOD FOLLOWING
THE DATE OF EXECUTIVE’S TERMINATION OF EMPLOYMENT, ON THE SAME BASIS AS SUCH
BENEFITS WERE PROVIDED DURING EXECUTIVE’S EMPLOYMENT WITH THE COMPANY; PROVIDED,
THAT EXECUTIVE SHALL REIMBURSE THE COMPANY FOR THE COBRA-EQUIVALENT

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COSTS OF SUCH COVERAGE AND THE COMPANY’S OBLIGATION TO PROVIDE SUCH HEALTH AND
LIFE INSURANCE BENEFITS SHALL CEASE WITH RESPECT TO SUCH BENEFITS AT THE TIME
EXECUTIVE BECOMES ELIGIBLE FOR SUCH BENEFITS FROM ANOTHER EMPLOYER.

Notwithstanding anything to the contrary in this Agreement, no further payments
or benefits shall be due under this Section 9(c) if, at any time after
Executive’s employment is terminated pursuant to this Section 9(c) and prior to
the time when any payment is made or benefit provided pursuant to this
Section 9(c), the Board determines that grounds existed, on or prior to the date
of termination of Executive’s employment with the Company, including prior to
the Effective Date, for the Company to terminate Executive’s employment for
Cause; provided, however, that, Executive shall in all events be entitled to
receive his Base Salary through the date of termination and reimbursement for
any unreimbursed business expenses properly incurred by Executive in accordance
with Company policy through the date of Executive’s termination.

Executive shall have no rights to any further compensation (including any Base
Salary, Annual Bonus, Retention Bonus, Options, Partners Units, Senior Partners
Units or any long-term or equity-based compensation awards) or any other
benefits under this Agreement following a termination of employment pursuant to
this Section 9(c). All other benefits, if any, due Executive following a
termination pursuant to this Section 9(c) shall be determined in accordance with
the equity compensation plans of Parent; provided, however, that Executive shall
not participate in any severance plan, policy or program of the Company or
Parent. Executive and the Company acknowledge that any payments and benefits
provided to Executive under clauses (ii) through (iii) of this Section 9(c)
relate solely to services rendered by Executive to the Company on and after the
Effective Date.

For purposes of this Agreement, “Good Reason” means:

(I)            ANY CHANGE IN THE DUTIES OR RESPONSIBILITIES (INCLUDING REPORTING
RESPONSIBILITIES) OF EXECUTIVE WITH RESPECT TO AIG 21ST DIRECT AUTO THAT IS
INCONSISTENT IN ANY MATERIAL AND ADVERSE RESPECT WITH EXECUTIVE’S POSITION,
DUTIES, RESPONSIBILITIES OR STATUS WITH THE COMPANY (INCLUDING ANY MATERIAL AND
ADVERSE DIMINUTION OF SUCH DUTIES OR RESPONSIBILITIES); PROVIDED, HOWEVER, THAT
GOOD REASON SHALL NOT BE DEEMED TO OCCUR PURSUANT TO THIS CLAUSE (I) SOLELY ON
ACCOUNT OF THE COMPANY NO LONGER BEING A PUBLICLY TRADED ENTITY OR ON ACCOUNT OF
ANY

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CHANGE TO EXECUTIVE’S DUTIES AS A RESULT OF HIS PHYSICAL OR MENTAL INCAPACITY;

(II)           A MATERIAL AND ADVERSE CHANGE IN EXECUTIVE’S TITLES OR OFFICES
(INCLUDING HIS POSITION AS PRESIDENT, AIG 21ST DIRECT AUTO) WITH THE COMPANY;
PROVIDED, HOWEVER, THAT GOOD REASON SHALL NOT BE DEEMED TO OCCUR PURSUANT TO
THIS CLAUSE (II) ON ACCOUNT OF ANY CHANGE TO EXECUTIVE’S TITLES OR OFFICES AS A
RESULT OF HIS PHYSICAL OR MENTAL INCAPACITY;

(III)          ANY FAILURE BY COMPENSATION COMMITTEE TO FOLLOW IN THEIR
ENTIRETY, AT THE FIRST COMPENSATION COMMITTEE MEETING FOLLOWING THE EFFECTIVE
DATE, ALL OF THE RECOMMENDATIONS OF THE COMPANY AND PARENT AS TO THE GRANTS OF
THE, AND TO ACTUALLY GRANT ALL OF THE, OPTIONS, PARTNERS UNITS, SENIOR PARTNERS
UNITS, AND RESTRICTED STOCK UNITS SPECIFIED IN SECTION 5; OR

(IV)          ANY MATERIAL BREACH OF THIS AGREEMENT BY THE COMPANY.

provided that, a termination by Executive with Good Reason shall be effective
only if, within thirty (30) days following Executive’s first becoming aware of
the circumstances giving rise to Good Reason, Executive delivers a Notice of
Termination for Good Reason by Executive to the Company, and the Company within
thirty (30) days following its receipt of such notification has failed to cure
the circumstances giving rise to Good Reason.

(D)           TERMINATION BY EXECUTIVE WITHOUT GOOD REASON. EXECUTIVE’S
EMPLOYMENT MAY BE TERMINATED PRIOR TO THE END OF THE EMPLOYMENT TERM BY
EXECUTIVE WITHOUT GOOD REASON FOLLOWING THE DELIVERY OF A NOTICE OF TERMINATION
TO THE COMPANY. UPON A TERMINATION BY EXECUTIVE PURSUANT TO THIS SECTION 9(D),
EXECUTIVE SHALL BE ENTITLED TO (I) HIS BASE SALARY THROUGH THE DATE OF SUCH
TERMINATION AND REIMBURSEMENT FOR ANY UNREIMBURSED BUSINESS EXPENSES PROPERLY
INCURRED BY EXECUTIVE IN ACCORDANCE WITH PARENT POLICY THROUGH THE DATE OF
EXECUTIVE’S TERMINATION, AND (II) CONTINUED HEALTH AND LIFE INSURANCE BENEFITS
FOR EXECUTIVE AND HIS SPOUSE AND DEPENDENTS, IF ANY, FOR A THIRTY-SIX (36) MONTH
PERIOD FOLLOWING THE DATE OF EXECUTIVE’S TERMINATION OF EMPLOYMENT, ON THE SAME
BASIS AS SUCH BENEFITS WERE PROVIDED DURING EXECUTIVE’S EMPLOYMENT WITH THE
COMPANY; PROVIDED, THAT EXECUTIVE SHALL REIMBURSE THE COMPANY FOR THE
COBRA-EQUIVALENT COSTS OF SUCH COVERAGE AND THE COMPANY’S OBLIGATION TO PROVIDE
SUCH HEALTH AND LIFE INSURANCE BENEFITS SHALL CEASE WITH RESPECT TO SUCH
BENEFITS AT THE TIME EXECUTIVE

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BECOMES ELIGIBLE FOR SUCH BENEFITS FROM ANOTHER EMPLOYER, AND HE SHALL HAVE NO
RIGHTS TO ANY FURTHER COMPENSATION (INCLUDING ANY BASE SALARY, ANNUAL BONUS,
RETENTION BONUS, OPTIONS, PARTNERS UNITS, SENIOR PARTNERS UNITS OR ANY LONG-TERM
OR EQUITY-BASED COMPENSATION AWARDS) OR ANY OTHER BENEFITS UNDER THIS AGREEMENT.
ALL OTHER BENEFITS, IF ANY, DUE EXECUTIVE FOLLOWING TERMINATION PURSUANT TO THIS
SECTION 9(D) SHALL BE DETERMINED IN ACCORDANCE WITH THE PLANS, POLICIES AND
PRACTICES OF PARENT; PROVIDED, HOWEVER, THAT EXECUTIVE SHALL NOT PARTICIPATE IN
ANY SEVERANCE PLAN, POLICY OR PROGRAM OF THE COMPANY.

(E)           RELEASE. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO
THE CONTRARY, EXECUTIVE ACKNOWLEDGES AND AGREES THAT ANY AND ALL PAYMENTS AND
BENEFITS TO WHICH EXECUTIVE IS ENTITLED UNDER SECTION 9(C) OF THIS AGREEMENT ARE
CONDITIONAL UPON AND SUBJECT TO EXECUTIVE’S EXECUTION OF A GENERAL RELEASE AND
WAIVER, SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT A HERETO, OF ALL CLAIMS
EXECUTIVE MAY HAVE AGAINST PARENT, THE COMPANY AND ITS DIRECTORS, OFFICERS AND
AFFILIATES, EXCEPT AS TO MATTERS COVERED BY PROVISIONS OF THIS AGREEMENT THAT
EXPRESSLY SURVIVE THE TERMINATION OF THIS AGREEMENT.

(F)            NOTICE OF TERMINATION. ANY PURPORTED TERMINATION OF EMPLOYMENT BY
THE COMPANY OR EXECUTIVE, OTHER THAN ANY TERMINATION DUE TO EXECUTIVE’S DEATH,
SHALL BE COMMUNICATED BY A WRITTEN NOTICE OF TERMINATION TO EXECUTIVE OR THE
COMPANY, RESPECTIVELY, DELIVERED IN ACCORDANCE WITH SECTION 13(I) HEREOF. FOR
PURPOSES OF THIS AGREEMENT, A “NOTICE OF TERMINATION” SHALL MEAN A NOTICE WHICH
SHALL INDICATE THE SPECIFIC TERMINATION PROVISION IN THE AGREEMENT RELIED UPON,
THE DATE OF TERMINATION, AND SHALL SET FORTH IN REASONABLE DETAIL THE FACTS AND
CIRCUMSTANCES CLAIMED TO PROVIDE A BASIS FOR TERMINATION OF EMPLOYMENT UNDER THE
PROVISION SO INDICATED. THE DATE OF TERMINATION OF EXECUTIVE’S EMPLOYMENT SHALL
BE THE DATE SO STATED IN THE NOTICE OF TERMINATION, WHICH DATE, IN THE EVENT OF
A TERMINATION BY EXECUTIVE PURSUANT TO SECTION 9(D), SHALL BE NO LESS THAN SIXTY
(60) DAYS FOLLOWING THE DELIVERY OF A NOTICE OF TERMINATION; PROVIDED, HOWEVER
THAT THE COMPANY CAN ELECT TO WAIVE THE SIXTY (60) DAY NOTICE REQUIRED AND
REQUIRE EXECUTIVE’S EMPLOYMENT TO TERMINATE IMMEDIATELY UPON WRITTEN NOTICE TO
EXECUTIVE; AND PROVIDED, FURTHER, THAT IN THE CASE OF A TERMINATION FOR CAUSE BY
THE COMPANY, THE DATE OF TERMINATION SHALL BE THE DATE THE NOTICE OF TERMINATION
IS DELIVERED IN ACCORDANCE WITH SECTION 13(I).

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(G)           CONTINUATION OF EMPLOYMENT; TERMINATION ON OR AFTER EXPIRATION OF
EMPLOYMENT TERM. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT OR THE PARTIES
OTHERWISE AGREE IN WRITING, CONTINUATION OF EXECUTIVE’S EMPLOYMENT WITH THE
COMPANY BEYOND THE EXPIRATION OF THE EMPLOYMENT TERM SHALL BE DEEMED AN
EMPLOYMENT AT WILL AND SHALL NOT BE DEEMED TO EXTEND ANY OF THE PROVISIONS OF
THIS AGREEMENT, AND EXECUTIVE’S EMPLOYMENT MAY THEREAFTER BE TERMINATED AT WILL
BY EXECUTIVE OR THE COMPANY. THE EXPIRATION OF THE EMPLOYMENT TERM ON DECEMBER
31, 2009 SHALL NOT BE CAUSE FOR THE PAYMENT OF SEVERANCE OR POST-EMPLOYMENT
BENEFITS PURSUANT TO THIS AGREEMENT IF EXECUTIVE IS NOT OTHERWISE TERMINATED
PURSUANT TO SECTION 9 OF THIS AGREEMENT PRIOR TO SUCH DATE. IF EXECUTIVE’S
EMPLOYMENT IS CONTINUED AFTER DECEMBER 31, 2009, NOTHING IN THIS AGREEMENT SHALL
BE CONSTRUED AS LIMITING, PROHIBITING OR GUARANTEEING HIS PARTICIPATION IN ANY
COMPENSATION, SEVERANCE, OR BENEFIT PLAN FROM AND AFTER JANUARY 1, 2010, SUBJECT
TO THE TERMS OF SUCH PLANS.

10.           RESTRICTIVE COVENANTS.

(A)           NON-COMPETITION/NON-SOLICITATION. EXECUTIVE ACKNOWLEDGES AND
RECOGNIZES THE HIGHLY COMPETITIVE NATURE OF THE BUSINESSES OF THE COMPANY,
PARENT AND THEIR SUBSIDIARIES AND ACCORDINGLY AGREES AS FOLLOWS:

(I)            WHILE EMPLOYED BY THE COMPANY AND FOR A PERIOD OF TWELVE
(12) MONTHS FOLLOWING THE DATE EXECUTIVE CEASES TO BE EMPLOYED BY THE COMPANY, 
(THE “RESTRICTED PERIOD”), EXECUTIVE WILL NOT DIRECTLY OR INDIRECTLY (U) ENGAGE
IN ANY “COMPETITIVE BUSINESS” (DEFINED BELOW) FOR EXECUTIVE’S OWN ACCOUNT,
(V) ENTER THE EMPLOY OF, OR RENDER ANY SERVICES TO, ANY PERSON ENGAGED IN ANY
COMPETITIVE BUSINESS, (W) 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, (X) INTERFERE WITH BUSINESS
RELATIONSHIPS (WHETHER FORMED BEFORE OR AFTER THE EFFECTIVE DATE) BETWEEN THE
COMPANY AND CUSTOMERS OR SUPPLIERS OF, OR CONSULTANTS TO, THE COMPANY, (Y)
SOLICIT, CONTACT, COMMUNICATE OR ATTEMPT TO COMMUNICATE WITH, REGARDING PRODUCTS
OR SERVICES OFFERED OR PROPOSED TO BE OFFERED BY THE COMPANY (IF SUCH PRODUCTS
ARE IN THE DEVELOPMENT STAGE WHILE EXECUTIVE IS EMPLOYED BY THE COMPANY), ANY
CUSTOMER OR CLIENT OR PROSPECTIVE CUSTOMER OR PROSPECTIVE CLIENT OF THE COMPANY
(FOR PURPOSES OF THIS SECTION 10, “CUSTOMER OR CLIENT” SHALL NOT INCLUDE
INSURANCE BROKERS) OR (Z)

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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 OR AGENT OF THE COMPANY (OR WHO WAS AN EMPLOYEE OF
THE COMPANY WITHIN THE PRIOR 12 MONTHS) TO TERMINATE HIS OR HER EMPLOYMENT OR
OTHER RELATIONSHIP WITH THE COMPANY OR TO LEAVE ITS EMPLOY OR OTHER RELATIONSHIP
WITH THE COMPANY FOR ANY ENGAGEMENT IN ANY CAPACITY OR FOR ANY OTHER PERSON OR
ENTITY.

(II)           FOR PURPOSES OF SECTION 10(B), (C), AND (D), THE COMPANY SHALL BE
CONSTRUED TO INCLUDE THE COMPANY, PARENT AND EACH OF THEIR SUBSIDIARIES AND
AFFILIATES. FOR PURPOSES OF SECTION 10(A)(I), THE COMPANY SHALL MEAN AIG
21ST DIRECT AUTO AND SHALL, TO THE EXTENT RELEVANT, INCLUDE ANY EMPLOYEES,
CONSULTANTS OR AGENTS OF PARENT OR ITS SUBSIDIARIES AND AFFILIATES WHO EXECUTIVE
COMES INTO CONTACT WITH AS A RESULT OF HIS EMPLOYMENT.

(III)          FOR PURPOSES OF THIS SECTION 10, A “COMPETITIVE BUSINESS” MEANS,
AS OF ANY DATE, INCLUDING DURING THE RESTRICTED PERIOD, ANY PERSON OR ENTITY
(INCLUDING ANY JOINT VENTURE, PARTNERSHIP, FIRM, CORPORATION OR LIMITED
LIABILITY COMPANY) THAT ENGAGES IN OR PROPOSES TO ENGAGE IN THE PERSONAL AUTO
INSURANCE BUSINESS.

(IV)          NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE AGREEMENT,
EXECUTIVE MAY DIRECTLY OR INDIRECTLY, OWN, SOLELY AS AN INVESTMENT, SECURITIES
OF ANY PERSON ENGAGED IN THE BUSINESS OF THE COMPANY WHICH ARE PUBLICLY TRADED
ON A NATIONAL OR REGIONAL STOCK EXCHANGE OR ON THE OVER-THE-COUNTER MARKET IF
EXECUTIVE (X) IS NOT A CONTROLLING PERSON OF, OR A MEMBER OF A GROUP WHICH
CONTROLS, SUCH PERSON AND (Y) DOES NOT, DIRECTLY OR INDIRECTLY, OWN ONE PERCENT
(1%) OR MORE OF ANY CLASS OF SECURITIES OF SUCH PERSON.

(V)           EXECUTIVE UNDERSTANDS THAT THE PROVISIONS OF THIS SECTION 10(A)
MAY LIMIT HIS ABILITY TO EARN A LIVELIHOOD IN A BUSINESS SIMILAR TO THE BUSINESS
OF THE COMPANY BUT HE 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 THE COMPANY, (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

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UNDULY BURDENSOME TO EXECUTIVE. IN CONSIDERATION OF THE FOREGOING AND IN LIGHT
OF EXECUTIVE’S EDUCATION, SKILLS AND ABILITIES, EXECUTIVE AGREES THAT HE SHALL
NOT ASSERT THAT, AND IT SHOULD NOT BE CONSIDERED THAT, ANY PROVISIONS OF SECTION
10(A) OTHERWISE ARE VOID, VOIDABLE OR UNENFORCEABLE OR SHOULD BE VOIDED OR HELD
UNENFORCEABLE.

(VI)          IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT, ALTHOUGH EXECUTIVE AND
THE COMPANY CONSIDER THE RESTRICTIONS CONTAINED IN THIS SECTION 10(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 10(A) OR ELSEWHERE IN THIS AGREEMENT IS AN UNENFORCEABLE
RESTRICTION AGAINST EXECUTIVE, 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. EXECUTIVE AGREES (WHETHER DURING OR AFTER
EXECUTIVE’S EMPLOYMENT WITH THE COMPANY) NOT TO ISSUE, CIRCULATE, PUBLISH OR
UTTER ANY FALSE OR DISPARAGING STATEMENTS, REMARKS OR RUMORS ABOUT THE COMPANY
OR THE OFFICERS, DIRECTORS OR MANAGERS OF THE COMPANY OTHER THAN TO THE EXTENT
REASONABLY NECESSARY IN ORDER TO (I) ASSERT A BONA FIDE CLAIM AGAINST THE
COMPANY ARISING OUT OF EXECUTIVE’S EMPLOYMENT WITH THE COMPANY, OR (II) RESPOND
IN A TRUTHFUL AND APPROPRIATE MANNER TO ANY LEGAL PROCESS OR GIVE TRUTHFUL AND
APPROPRIATE TESTIMONY IN A LEGAL OR REGULATORY PROCEEDING. THE COMPANY AGREES TO
INSTRUCT ITS DIRECTORS AND EXECUTIVES NOT TO (WHETHER DURING OR AFTER
EXECUTIVE’S EMPLOYMENT WITH THE COMPANY) ISSUE, CIRCULATE, PUBLISH OR UTTER ANY
FALSE OR DISPARAGING STATEMENTS, REMARKS OR RUMORS ABOUT EXECUTIVE OTHER THAN TO
THE EXTENT REASONABLY NECESSARY IN ORDER TO (I) ASSERT A BONA FIDE CLAIM AGAINST
EXECUTIVE ARISING OUT OF EXECUTIVE’S EMPLOYMENT WITH THE COMPANY, OR
(II) RESPOND IN A TRUTHFUL AND APPROPRIATE MANNER TO ANY LEGAL PROCESS OR GIVE
TRUTHFUL AND APPROPRIATE TESTIMONY IN A LEGAL OR REGULATORY PROCEEDING. 
NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS OR ANY OTHER SECTION OF THIS
AGREEMENT IS INTENDED TO DISCOURAGE OR IN ANY WAY LIMIT EXECUTIVE’S
RESPONSIBILITY UNDER THE SARBANES OXLEY ACT OR SIMILAR LOCAL, STATE OR FEDERAL

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LAWS OR REGULATIONS CONCERNING THE IDENTIFICATION OR REPORTING OF ANY FRAUD,
FINANCIAL REPORTING ISSUE OR OTHER VIOLATION OF LAW.

(C)           CONFIDENTIALITY/COMPANY PROPERTY. EXECUTIVE SHALL NOT, WITHOUT THE
PRIOR WRITTEN CONSENT OF THE COMPANY, DURING AND AFTER HIS EMPLOYMENT WITH THE
COMPANY USE, DIVULGE, DISCLOSE OR MAKE ACCESSIBLE TO ANY OTHER PERSON, FIRM,
PARTNERSHIP, CORPORATION OR OTHER ENTITY, ANY “CONFIDENTIAL INFORMATION” (AS
DEFINED BELOW) EXCEPT WHILE EMPLOYED BY THE COMPANY, IN FURTHERANCE OF THE
BUSINESS OF AND FOR THE BENEFIT OF THE COMPANY, OR ANY “PERSONAL INFORMATION”
(AS DEFINED BELOW); PROVIDED THAT EXECUTIVE MAY DISCLOSE SUCH INFORMATION WHEN
REQUIRED TO DO SO BY A COURT OF COMPETENT JURISDICTION, BY ANY GOVERNMENTAL
AGENCY HAVING SUPERVISORY AUTHORITY OVER THE BUSINESS OF THE COMPANY AND/OR ITS
AFFILIATES, AS THE CASE MAY BE, OR BY ANY ADMINISTRATIVE BODY OR LEGISLATIVE
BODY (INCLUDING A COMMITTEE THEREOF) WITH JURISDICTION TO ORDER EXECUTIVE TO
DIVULGE, DISCLOSE OR MAKE ACCESSIBLE SUCH INFORMATION; PROVIDED, FURTHER, THAT
IN THE EVENT THAT EXECUTIVE IS ORDERED BY A COURT OR OTHER GOVERNMENT AGENCY TO
DISCLOSE ANY CONFIDENTIAL INFORMATION OR PERSONAL INFORMATION, EXECUTIVE SHALL
(I) PROMPTLY NOTIFY THE COMPANY OF SUCH ORDER, (II) AT THE WRITTEN REQUEST OF
THE COMPANY, DILIGENTLY CONTEST SUCH ORDER AT THE SOLE EXPENSE OF THE COMPANY AS
EXPENSES OCCUR, AND (III) AT THE WRITTEN REQUEST OF THE COMPANY, SEEK TO OBTAIN,
AT THE SOLE EXPENSE OF THE COMPANY, SUCH CONFIDENTIAL TREATMENT AS MAY BE
AVAILABLE UNDER APPLICABLE LAWS FOR ANY INFORMATION DISCLOSED UNDER SUCH ORDER.
FOR PURPOSES OF THIS SECTION 10(C), (I) “CONFIDENTIAL INFORMATION” SHALL MEAN
NON-PUBLIC INFORMATION CONCERNING THE FINANCIAL DATA, STRATEGIC BUSINESS PLANS,
PRODUCT DEVELOPMENT (OR OTHER PROPRIETARY PRODUCT DATA), CUSTOMER LISTS,
MARKETING PLANS AND OTHER NON-PUBLIC, PROPRIETARY AND CONFIDENTIAL INFORMATION
RELATING TO THE BUSINESS OF THE COMPANY OR CUSTOMERS, THAT, IN ANY CASE, IS NOT
OTHERWISE AVAILABLE TO THE PUBLIC (OTHER THAN BY EXECUTIVE’S BREACH OF THE TERMS
HEREOF) AND (II) “PERSONAL INFORMATION” SHALL MEAN ANY INFORMATION CONCERNING
THE PERSONAL, SOCIAL OR BUSINESS ACTIVITIES OF THE OFFICERS OR DIRECTORS OF THE
COMPANY. UPON TERMINATION OF EXECUTIVE’S EMPLOYMENT WITH THE COMPANY, EXECUTIVE
SHALL RETURN ALL COMPANY PROPERTY, INCLUDING, WITHOUT LIMITATION, FILES,
RECORDS, DISKS AND ANY MEDIA CONTAINING CONFIDENTIAL INFORMATION OR PERSONAL
INFORMATION.

(D)           COOPERATION. DURING THE EMPLOYMENT TERM AND AT ANY TIME
THEREAFTER, EXECUTIVE AGREES TO COOPERATE (I) WITH THE COMPANY IN THE DEFENSE OF
ANY LEGAL MATTER INVOLVING ANY MATTER THAT AROSE DURING EXECUTIVE’S EMPLOYMENT
WITH THE COMPANY

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AND (II) WITH ALL GOVERNMENT AUTHORITIES ON MATTERS PERTAINING TO ANY
INVESTIGATION, LITIGATION OR ADMINISTRATIVE PROCEEDING PERTAINING TO THE
COMPANY. THE COMPANY WILL REIMBURSE EXECUTIVE FOR ANY REASONABLE TRAVEL AND OUT
OF POCKET EXPENSES INCURRED BY EXECUTIVE IN PROVIDING SUCH COOPERATION. THE
COMPANY AGREES TO COOPERATE WITH THE EXECUTIVE IN THE SAME MANNER AS DESCRIBED
ABOVE.

(E)           CLAWBACK.  IF EXECUTIVE BREACHES SECTION 10(A) OF THIS AGREEMENT,
THE COMPANY MAY DEMAND THAT EXECUTIVE REPAY TO THE COMPANY, AND UPON SUCH DEMAND
EXECUTIVE SHALL REPAY TO THE COMPANY, THE GROSS AMOUNT OF THE SEVERANCE
INSTALLMENTS MADE BY THE COMPANY TO EXECUTIVE PURSUANT TO SECTION 9(C) OF THIS
AGREEMENT.

11.           ENFORCEMENT. EXECUTIVE ACKNOWLEDGES AND AGREES THAT THE COMPANY’S
REMEDIES AT LAW FOR A BREACH OR THREATENED BREACH OF ANY OF THE PROVISIONS OF
SECTIONS 10 OF THIS AGREEMENT WOULD BE INADEQUATE AND, IN RECOGNITION OF THIS
FACT, EXECUTIVE AGREES THAT, IN THE EVENT OF SUCH A BREACH OR THREATENED BREACH,
IN ADDITION TO ANY REMEDIES AT LAW, THE COMPANY, 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. IN ADDITION, THE COMPANY SHALL BE
ENTITLED TO IMMEDIATELY CEASE PAYING ANY AMOUNTS REMAINING DUE OR PROVIDING THE
SEVERANCE INSTALLMENTS TO EXECUTIVE PURSUANT TO SECTION 9 OF THIS AGREEMENT UPON
A DETERMINATION BY THE COMPANY THAT EXECUTIVE HAS VIOLATED ANY PROVISION OF
SECTION 10 OF THIS AGREEMENT.

12.           INDEMNIFICATION. AT ALL TIMES DURING AND AFTER THE EMPLOYMENT
TERM, THE COMPANY SHALL INDEMNIFY EXECUTIVE TO THE FULLEST EXTENT PERMITTED BY
THE LAWS OF THE STATE OF DELAWARE FOR ALL ACTIONS OR OMISSIONS TAKEN OR MADE BY
EXECUTIVE (WHETHER BEFORE OR AFTER THE DATE OF THIS AGREEMENT) IN HIS SERVICE TO
THE COMPANY OR ITS AFFILIATED ENTITIES FOR WHICH EXECUTIVE HAS PERFORMED OR DOES
PERFORM SERVICES AT THE REQUEST OF THE COMPANY, INCLUDING, TO THE FULLEST EXTENT
INDEMNIFICATION OF AN OFFICER BY A CORPORATION IS ALLOWED BY DELAWARE LAW, THE
ADVANCEMENT TO EXECUTIVE OF ALL REASONABLE ATTORNEYS’ COSTS AND EXPENSES
INCURRED BY EXECUTIVE IN CONNECTION WITH ANY ACTION, SUIT OR PROCEEDING, WHETHER
CIVIL, CRIMINAL, ADMINISTRATIVE OR INVESTIGATIVE, BY REASON OF THE FACT THAT HE
IS OR WAS A DIRECTOR, OFFICER OR EMPLOYEE OF THE COMPANY, WITHIN TWENTY
(20) CALENDAR DAYS AFTER RECEIPT BY THE COMPANY OF A WRITTEN REQUEST FROM
EXECUTIVE FOR SUCH ADVANCE. EXECUTIVE’S REQUEST FOR ADVANCEMENT OF ATTORNEYS’
COSTS AND EXPENSES

17

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PURSUANT TO THE PRECEDING SENTENCE SHALL INCLUDE AN UNDERTAKING BY EXECUTIVE TO
REPAY THE AMOUNT OF SUCH ADVANCE IF IT SHALL ULTIMATELY BE DETERMINED THAT
EXECUTIVE IS NOT ENTITLED TO BE INDEMNIFIED AGAINST SUCH COSTS AND EXPENSES. ANY
DETERMINATION REQUIRED TO BE MADE WITH RESPECT TO WHETHER EXECUTIVE’S CONDUCT
COMPLIES WITH THE STANDARDS SET FORTH UNDER DELAWARE LAW SHALL BE MADE BY
INDEPENDENT COUNSEL SELECTED BY EXECUTIVE (SUCH INDEPENDENT COUNSEL TO BE
REASONABLY ACCEPTABLE TO THE COMPANY).

13.           MISCELLANEOUS.

(A)           GOVERNING LAW. EXCEPT ONLY WITH RESPECT TO EXECUTIVE’S RIGHT TO
INDEMNIFICATION UNDER SECTION 12 (AS TO WHICH DELAWARE LAW APPLIES IN THE FIRST
INSTANCE), THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA 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
CALIFORNIA.

(B)           ENTIRE AGREEMENT/AMENDMENTS. THIS AGREEMENT CONTAINS THE ENTIRE
UNDERSTANDING OF THE PARTIES WITH RESPECT TO THE EMPLOYMENT OF EXECUTIVE BY THE
COMPANY, AND, WITHOUT LIMITING THE EFFECT OF THE FOREGOING, SPECIFICALLY
SUPERSEDES THE RETENTION AGREEMENT, THE COMPANY’S SHORT TERM INCENTIVE PLAN AND
THE COMPANY’S EXECUTIVE SEVERANCE PLAN. THERE ARE NO RESTRICTIONS, AGREEMENTS,
PROMISES, WARRANTIES, COVENANTS OR UNDERTAKINGS BETWEEN THE PARTIES WITH RESPECT
TO THE SUBJECT MATTER HEREIN OTHER THAN THOSE EXPRESSLY SET FORTH HEREIN. THIS
AGREEMENT MAY NOT BE ALTERED, MODIFIED OR AMENDED EXCEPT BY WRITTEN INSTRUMENT
SIGNED BY THE PARTIES HERETO. SECTIONS 9, 10, 11 , 12 AND 13 OF THIS AGREEMENT
SHALL SURVIVE THE TERMINATION OF EXECUTIVE’S EMPLOYMENT WITH THE COMPANY, TO THE
EXTENT SPECIFICALLY STATED THEREIN. NOTWITHSTANDING THE FOREGOING, NOTHING IN
THIS AGREEMENT SHALL AFFECT EXECUTIVE’S ENTITLEMENTS PURSUANT TO THE COMPANY’S
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN.

(C)           JURISDICTION AND CHOICE OF FORUM.  EXECUTIVE AND THE COMPANY
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED IN THE COUNTY OF LOS

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ANGELES OVER ANY CONTROVERSY OR CLAIM BETWEEN EXECUTIVE AND THE COMPANY ARISING
OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT OR ANY ASPECT OF EXECUTIVE’S
EMPLOYMENT WITH THE COMPANY OR THE TERMINATION OF THAT EMPLOYMENT (TOGETHER, AN
“EMPLOYMENT MATTER”).  BOTH EXECUTIVE AND THE COMPANY (I) ACKNOWLEDGE THAT THE
FORUM STATED IN THIS SECTION 13(C) HAS A REASONABLE RELATION TO THIS AGREEMENT
AND TO THE RELATIONSHIP BETWEEN EXECUTIVE AND THE COMPANY AND THAT THE
SUBMISSION TO THE FORUM WILL APPLY EVEN IF THE FORUM CHOOSES TO APPLY NON-FORUM
LAW, (II) WAIVE, TO THE EXTENT PERMITTED BY LAW, ANY OBJECTION TO PERSONAL
JURISDICTION OR TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING COVERED BY
THIS SECTION 13(C) IN THE FORUM STATED IN THIS SECTION 13(C), (III) AGREE NOT TO
COMMENCE ANY SUCH ACTION OR PROCEEDING IN ANY FORUM OTHER THAN THE FORUM STATED
IN THIS SECTION 13(C) AND (IV) AGREE THAT, TO THE EXTENT PERMITTED BY LAW, A
FINAL AND NON-APPEALABLE JUDGMENT IN ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT WILL BE CONCLUSIVE AND BINDING ON EXECUTIVE AND THE COMPANY.  HOWEVER,
NOTHING IN THIS AGREEMENT PRECLUDES EXECUTIVE OR THE COMPANY FROM BRINGING ANY
ACTION OR PROCEEDING IN ANY COURT FOR THE PURPOSE OF ENFORCING THE PROVISIONS OF
THIS SECTION 13(C).

(D)           WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED BY LAW, EXECUTIVE
AND THE COMPANY WAIVE ANY AND ALL RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY
EMPLOYMENT MATTER.

(E)           NO WAIVER. THE FAILURE OF A PARTY TO INSIST UPON STRICT ADHERENCE
TO ANY TERM OF THIS AGREEMENT ON ANY OCCASION SHALL NOT BE CONSIDERED A WAIVER
OF SUCH PARTY’S RIGHTS OR DEPRIVE SUCH PARTY OF THE RIGHT THEREAFTER TO INSIST
UPON STRICT ADHERENCE TO THAT TERM OR ANY OTHER TERM OF THIS AGREEMENT.

(F)            SEVERABILITY. IN THE EVENT THAT ANY ONE OR MORE OF THE PROVISIONS
OF THIS AGREEMENT SHALL BE OR BECOME INVALID, ILLEGAL OR UNENFORCEABLE IN ANY
RESPECT, THE VALIDITY, LEGALITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS
OF THIS AGREEMENT SHALL NOT BE AFFECTED THEREBY.

(G)           NO MITIGATION OR OFFSET. IN THE EVENT OF ANY TERMINATION OF
EXECUTIVE’S EMPLOYMENT HEREUNDER, EXECUTIVE SHALL BE UNDER NO OBLIGATION TO SEEK
OTHER EMPLOYMENT OR OTHERWISE MITIGATE THE OBLIGATIONS OF THE COMPANY UNDER THIS
AGREEMENT, AND THERE SHALL BE NO OFFSET AGAINST ANY AMOUNTS DUE UNDER THIS
AGREEMENT ON ACCOUNT OF

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ANY REMUNERATION ATTRIBUTABLE TO ANY SUBSEQUENT EMPLOYMENT THAT EXECUTIVE MAY
OBTAIN.

(H)           SUCCESSORS.

(I)            THIS AGREEMENT IS PERSONAL TO EXECUTIVE AND SHALL NOT BE
ASSIGNABLE BY EXECUTIVE OTHERWISE THAN BY WILL OR THE LAWS OF DESCENT AND
DISTRIBUTION. THIS AGREEMENT SHALL INURE TO THE BENEFIT OF AND BE ENFORCEABLE BY
EXECUTIVE’S LEGAL REPRESENTATIVES. THIS AGREEMENT SHALL INURE TO THE BENEFIT OF
AND BE BINDING UPON THE COMPANY AND ITS SUCCESSORS.

(II)           THE COMPANY WILL REQUIRE ANY SUCCESSOR (WHETHER DIRECT OR
INDIRECT, BY PURCHASE, MERGER, CONSOLIDATION OR OTHERWISE) TO ALL OR
SUBSTANTIALLY ALL OF THE BUSINESS AND/OR ASSETS OF THE COMPANY TO EXPRESSLY
ASSUME AND AGREE TO PERFORM THIS AGREEMENT IN THE SAME MANNER AND TO THE SAME
EXTENT THAT THE COMPANY WOULD BE REQUIRED TO PERFORM IT IF NO SUCH SUCCESSION
HAD TAKEN PLACE, UNLESS SUCH ASSUMPTION OCCURS BY OPERATION OF LAW. AS USED IN
THIS AGREEMENT, “COMPANY” SHALL MEAN THE COMPANY AS HEREINBEFORE DEFINED AND ANY
SUCCESSOR TO ITS BUSINESS AND/OR ASSETS AS AFORESAID WHICH ASSUMES AND AGREES TO
PERFORM THIS AGREEMENT BY OPERATION OF LAW, OR OTHERWISE.

(I)            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 PERSONALLY, IF DELIVERED BY
OVERNIGHT COURIER SERVICE, IF SENT BY FACSIMILE TRANSMISSION OR IF MAILED BY
UNITED STATES REGISTERED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID,
ADDRESSED TO THE RESPECTIVE ADDRESSES OR SENT VIA FACSIMILE TO THE RESPECTIVE
FACSIMILE NUMBERS, AS THE CASE MAY BE, AS SET FORTH BELOW, OR TO SUCH OTHER
ADDRESS AS EITHER PARTY MAY HAVE FURNISHED TO THE OTHER IN WRITING IN ACCORDANCE
HEREWITH, EXCEPT THAT NOTICE OF CHANGE OF ADDRESS SHALL BE EFFECTIVE ONLY UPON
RECEIPT; PROVIDED, HOWEVER, THAT (I) NOTICES SENT BY PERSONAL DELIVERY OR
OVERNIGHT COURIER SHALL BE DEEMED GIVEN WHEN DELIVERED; (II) NOTICES SENT BY
FACSIMILE TRANSMISSION SHALL BE DEEMED GIVEN UPON THE SENDER’S RECEIPT OF
CONFIRMATION OF COMPLETE TRANSMISSION, AND (III) 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 Executive, to the address as shall most currently appear on the records of
the Company

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With a copy to:

Thompson Hine LLP
3900 Key Center
127 Public Square
Cleveland, OH  44114-1291
Fax: 216-566-5800
Attn: Roy L. Turnell, Esq.

If to the Company, to:

American International Group, Inc.
70 Pine Street
New York, NY 10270
Fax: 212-425-2175
Attn: General Counsel

With a copy to:

21st Century Insurance Group
6301 Owensmouth Avenue
Woodland Hills, CA 91367
Fax: 818-704-3737
Attn: General Counsel

With a further copy to:

Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004-2498
Attn: Marc R. Trevino, Esq.
Fax: 212-558-3345

(J)            WITHHOLDING TAXES. THE COMPANY MAY WITHHOLD FROM ANY AMOUNTS
PAYABLE UNDER THIS AGREEMENT SUCH FEDERAL, STATE AND LOCAL TAXES AS MAY BE

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REQUIRED TO BE WITHHELD PURSUANT TO ANY APPLICABLE LAW OR REGULATION.

(K)           COUNTERPARTS. 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.

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

EXECUTIVE

 

 

 

 

 

/s/ Bruce W. Marlow

 

 

 

Bruce W. Marlow

 

 

 

 

 

 

 

 

21ST CENTURY INSURANCE GROUP

 

 

 

 

 

/s/ Michael J. Cassanego

 

 

 

Name: Michael J. Cassanego

 

 

Title: Senior Vice President and General Counsel

 

 

 

 

 

 

 

 

AMERICAN INTERNATIONAL GROUP, INC.

 

 

 

 

 

/s/ Brian T. Schreiber

 

 

 

Name: Brian T. Schreiber

 

 

Title: Senior Vice President Strategic Planning

 

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EXHIBIT A

A                                      RELEASE OF CLAIMS

1.                                       RELEASE OF CLAIMS

In partial consideration of the payments and benefits described in Section 9(c)
of the employment agreement (the “Employment Agreement”), dated May   , 2007, by
and between Bruce W. Marlow (“Executive”), 21st Century Insurance Group (the
“Company”) and American International Group, Inc. (“Parent”), to which Executive
agrees Executive is not entitled until and unless he executes this Release,
Executive, for and on behalf of himself and his heirs and assigns, subject to
the following three sentences hereof, hereby waives and releases any employment,
compensation or benefit-related common law, statutory or other complaints,
claims, charges or causes of action of any kind whatsoever, both known and
unknown, in law or in equity, which Executive ever had, now has or may have
against the Company, Parent, or any of their subsidiary companies, shareholders,
successors, assigns, directors, officers, partners, members, employees or
agents, or any benefit plan sponsored by such company (collectively, the
“Releasees”) by reason of facts or omissions which have occurred on or prior to
the date that Executive signs this Release, including, without limitation, any
complaint, charge 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, all as
amended; and all other federal, state and local laws and regulations. By signing
this Release, Executive acknowledges that he intends to waive and release any
rights known or unknown that he may have against the Releasees under these and
any other laws; provided, that Executive does not waive or release claims with
respect to the right to enforce the Employment Agreement (the “Unreleased
Claims”). Notwithstanding the foregoing, Executive does not release, discharge
or waive any rights to indemnification that he may have under the certificate of
incorporation, the by-laws or equivalent governing documents of the Company or
its subsidiaries or affiliates, the laws of the State of Delaware or any other
state of which such subsidiary or affiliate is a domiciliary, or any
indemnification agreement between Executive and the Company, or any rights to
insurance coverage under any directors’ and officers’ personal liability
insurance or fiduciary insurance policy. Nothing herein modifies or affects any
vested

A-1

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rights that Executive may have under the American International Group, Inc.
Retirement Plan, the Company’s Supplemental Executive Retirement Plan, any
401(k) or other incentive savings plan, or with respect to any equity
compensation or other benefit plans.

2.                                       PROCEEDINGS

Executive acknowledges that he 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”). Executive represents that he is not aware of
any basis on which such a Proceeding could reasonably be instituted.

3.                                       TIME TO CONSIDER

Executive acknowledges that he has been advised that he has twenty-one (21) days
from the date of receipt of this Release to consider all the provisions of this
Release and he does hereby knowingly and voluntarily waive said given twenty-one
(21) day period. EXECUTIVE FURTHER ACKNOWLEDGES THAT HE HAS READ THIS RELEASE
CAREFULLY, HAS BEEN ADVISED BY THE COMPANY TO, AND HAS IN FACT, CONSULTED AN
ATTORNEY, AND FULLY UNDERSTANDS THAT BY SIGNING BELOW HE IS GIVING UP CERTAIN
RIGHTS WHICH HE MAY HAVE TO SUE OR ASSERT A CLAIM AGAINST ANY OF THE RELEASEES,
AS DESCRIBED IN SECTION 1 OF THIS RELEASE AND THE OTHER PROVISIONS HEREOF.
EXECUTIVE ACKNOWLEDGES THAT HE HAS NOT BEEN FORCED OR PRESSURED IN ANY MANNER
WHATSOEVER TO SIGN THIS RELEASE, AND EXECUTIVE AGREES TO ALL OF ITS TERMS
VOLUNTARILY.

4.                                       REVOCATION

Executive hereby acknowledges and understands that Executive shall have seven
(7) days from the date of his execution of this Release to revoke this Release
(including, without limitation, any and all claims arising under the ADEA), in
writing to the General Counsel of the Company and with a copy to the General
Counsel of Parent, and that neither the Company nor any other person is
obligated to provide any benefits to Executive pursuant to Section 9 of the
Employment Agreement until eight (8) days have

A-2

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passed since Executive’s signing of this Release without Executive having
revoked this Release, in which event the Company immediately shall arrange
and/or pay for any such benefits otherwise attributable to said eight (8) day
period, consistent with the terms of the Employment Agreement. If Executive
revokes this Release, Executive will be deemed not to have accepted the terms of
this Release, and no action will be required of the Company under any section of
this Release.

5.                                       NO ADMISSION

This Release does not constitute an admission of liability or wrongdoing of any
kind by Executive or the Company.

6.                                       GENERAL PROVISIONS

A failure of any of the Releasees to insist on strict compliance with any
provision of this Release shall not be deemed a waiver of such provision or any
other provision hereof. If any provision of this Release 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 Release shall remain valid and binding upon Executive
and the Releasees.

7.                                       GOVERNING LAW

The validity, interpretations, construction and performance of this Release
shall be governed by the laws of the State of California without giving effect
to conflict of laws principles.

8.                                       JURISDICTION AND CHOICE OF FORUM

Executive and the Company irrevocably submit to the exclusive jurisdiction of
any state or federal court located in the County of Los Angeles over any
controversy or claim between Executive and the Company arising out of or
relating to or concerning this Release.

IN WITNESS WHEREOF, Executive has hereunto set Executive’s hand as of the day
and year set forth opposite his signature below.

A-3

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DATE

Bruce W. Marlow

 

A-4

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