EX-10.1






Exhibit 10.1




Services Agreement




          This Services Agreement (“Agreement”) is entered into as of March 20, 2009, by and between
Edmund S.W. Tse (“Special Advisor”), American International Assurance Company, Limited (the
“Company”) and, solely with respect to paragraph 4, American International Group, Inc.





	 	1.	 	Purpose of Engagement






	 	(a)	 	During the term of this Agreement, Special Advisor will serve
as Honorary Chairman of the Company, providing advisory and other consulting
services.
	 
	 	(b)	 	Special Advisor will exercise due care, conduct himself with
proper regard to the best interest of the Company and use his best efforts to
promote its interests.






	 	2.	 	Term






	 	(a)	 	This Agreement will commence on March 24, 2009 and will
continue for a one-year period thereafter, subject to future extensions as may
be agreed to in writing by both parties and subject to early termination as
provided in paragraph 5 (the “Term”).






	 	3.	 	Fees
	 
	 	 	 	During the Term, the Company will pay Special Advisor an annual fee of USD $250,000,
prorated for any partial years during the Term. Special Advisor will submit
quarterly invoices, and the Company will pay the fee on a quarterly basis.
	 
	 	4.	 	Transaction or Completion Bonus
	 
	 	 	 	American International Group, Inc. agrees to pay Special Advisor a reasonable
transaction or completion bonus in an amount to be determined by American
International Group, Inc. in its sole discretion in the event of a sale or IPO of
any foreign life operations (subject, of course, to any restrictions on American
International Group, Inc.’s ability to pay such a bonus). Any such transaction or
completion bonus will survive the termination or expiration of this Agreement.
	 
	 	5.	 	Renewal and Termination






	 	(a)	 	Special Advisor or the Company may terminate this Agreement and
the Term before its scheduled expiration by giving thirty (30) days’ notice in
writing.
	 
	 	(b)	 	The Company may immediately terminate this Agreement and the
Term before its scheduled expiration by written notice to Special Advisor
without the notice required by paragraph (5)(a) if Special Advisor is (i) in




 









 






	 	 	 	breach of this Agreement or (ii) absent from his responsibilities under this
Agreement as a result of incapacity due to mental or physical illness or
injury for a period of sixty (60) or more days during any year.
	 
	 	(c)	 	This Agreement and the Term will automatically terminate on
Special Advisor’s death.
	 
	 	(d)	 	Upon termination or expiration of this Agreement and the Term
without renewal, Special Advisor agrees to return all property belonging to the
Company and any of its parents, subsidiaries or affiliates (collectively,
“AIG”) and not to make or retain any copies, duplicates, reproductions or
excerpts of AIG’s materials and not to access, utilize or affect in any manner,
any of AIG’s property, including, without limitation, its electronic
communications systems or any information contained therein.






	 	6.	 	Logistics and Expenses






	 	(a)	 	During the Term, Special Advisor will be provided with office
space appropriate for his services as Honorary Chairman, administrative
support, transportation services (including a car and driver for business
purposes only) and reimbursement for travel (including first class travel for
airfare between Hong Kong and New York), hotel accommodations and club
memberships, as deemed appropriate by the Company.
	 
	 	(b)	 	Special Advisor agrees to abide by all of AIG’s policies and
procedures applicable to outside consultants that are related to the items
described under paragraph 6(a) above, and he agrees to purchase all
reimbursable air tickets through a travel agency approved by AIG.






	 	7.	 	Non-Competition, Non-Hire






	 	(a)	 	Other than for the purpose of AIG’s businesses, Special Advisor
will not, during the Term, do or permit any of the following without the prior
written consent of AIG:






	 	(i)	 	Solicit any person who is or has been during
the Term a customer of AIG for the purpose of offering to that person
goods or services similar to or competing with those of the business
conducted by the Company during the Term;
	 
	 	(ii)	 	Solicit or entice away, or endeavor to solicit
or entice away, any director or employee of AIG;
	 
	 	(iii)	 	Cause or permit any person directly or
indirectly under Special Advisor’s control to do any of the acts or
things specified above;




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	 	(iv)	 	Be employed by an organization that provides
goods or services similar to or that competes with the business
conducted by the Company during the Term; and
	 
	 	(v)	 	Act as director, advisor or consultant or any
other similar role in an organization that provides goods or services
similar to that competes with the business conducted by the Company
during the Term (this obligation shall not prevent Special Advisor from
serving as an outside director as appointed by AIG).
	 
	 	The parties acknowledge and agree that the terms of this Agreement,
including this paragraph 7, do not prevent Special Advisor from providing
services to other entities (including non-AIG entities) that do not provide
goods and services similar to, and that do not compete with, the business
conducted by the Company.






	 	(b)	 	Ownership of not more than 1% of the outstanding stock of any
publicly traded company will not be a violation of this paragraph.
	 
	 	(c)	 	In addition to any other rights the Company may have, including
those under paragraphs 5 and 12(e), which are expressly retained, if Special
Advisor violates any provision of this paragraph 7, the Company may declare any
prior payments made to Special Advisor under paragraph 3 of this Agreement
void. Special Advisor agrees that, under such circumstances, he will promptly
return all prior payments made to him under paragraph 3 of this Agreement.
	 
	 	(d)	 	Each undertaking in paragraph 7(a) will be treated as
independent of the other undertakings so that, if one or more is held to be
invalid as an unreasonable restraint of trade or for any other reason, the
remaining undertakings will be valid to the extent that they are not affected.
	 
	 	(e)	 	While the undertakings in paragraph 7(a) are considered by the
parties to be reasonable in all the circumstances, if one or more is held
invalid as an unreasonable restraint of trade or for any other reason but would
have been held valid if part of the wording had been deleted, the period
reduced or the range of activities or area dealt with reduced in scope, the
undertakings will apply with such modifications as may be necessary to make
them valid.






	 	8.	 	Representations and Warranties
	 
	 	 	 	Special Advisor represents and warrants that in his capacity as Honorary Chairman he
will:






	 	(a)	 	Devote the necessary and appropriate amount of time, attention
and skill to the performance of his duties;




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	 	(b)	 	Conduct himself with proper regard to the best interest of the
Company and use his best efforts to promote its interests;
	 
	 	(c)	 	Always abide by all of AIG’s rules and procedures applicable to
AIG’s outside consultants;
	 
	 	(d)	 	Obey AIG’s Code of Conduct (“Code”) as it applies to outside
consultants, as attached in Exhibit 1 to this Agreement and which Code is made
a part of this Agreement;
	 
	 	(e)	 	Not disparage AIG, its officers or employees during or after
his service as Honorary Chairman; and
	 
	 	(f)	 	Maintain the confidential nature of all records and information
(including electronic data) of AIG and not discuss those records or information
except as required in the performance of Special Advisor’s authorized duties.






	 	9.	 	Confidentiality






	 	(a)	 	Except as reasonably required in the performance of Special
Advisor’s authorized duties, Special Advisor covenants that he will not at any
time during the Term or at any time thereafter disclose to any person or
otherwise make use of any of the Confidential Information which has been
collected by him or made known to him by virtue of his services under this
Agreement. Special Advisor further covenants to take all reasonable steps to
prevent unauthorized use or disclosure of any Confidential Information.
	 
	 	(b)	 	The foregoing provision does not apply to:






	 	(i)	 	Information that by means other than Special
Advisor’s deliberate or inadvertent disclosure becomes well known or
readily ascertainable by the public; or
	 
	 	(ii)	 	Disclosures compelled by judicial or
administrative proceedings following Special Advisor’s diligent
challenge to such disclosure and after having afforded AIG the
opportunity to participate in such proceeding.






	 	(c)	 	All notes, data of every kind (including electronic data),
information and/or memoranda of any nature and in particular the Confidential
Information which will be acquired, received or made by Special Advisor during
the Term will be the property of the Company and will be surrendered by him to
the Company upon the termination of this Agreement and the Term or at the
request of the Company at any time during the Term or any time thereafter.




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	 	(d)	 	Special Advisor acknowledges that this condition may not be
altered nor its obligations excused except by a written document signed by a
corporate officer of the Company.
	 
	 	(e)	 	The obligations contained in this paragraph 9 will endure, even
after the termination of this Agreement and the Term, except and until any
Confidential Information enters the public domain as set out above.
	 
	 	(f)	 	For purposes of this Agreement, “Confidential Information”
means information which is not publicly known relating to the business affairs,
proprietary products, technology, research, development and trade secrets of
AIG and other legal entities with which AIG deals in commercial transactions.






	 	10.	 	Independent Contractor
	 
	 	 	 	Special Advisor agrees that he is performing his services under this Agreement as an
independent contractor and not as an employee of the Company or any of its parents,
subsidiaries or affiliates. Special Advisor will be responsible for all taxes and
other non-reimbursable expenses attributable to the rendition of these services and
he will indemnify, hold harmless and defend the Company and their parents,
subsidiaries and affiliates and their incumbent or former officers, directors,
consultants, employees, successors and assigns, from any and all claims,
liabilities, damages, taxes, fines or penalties sought or recovered by any
governmental entity, including, but not limited to, any federal, state, local or
foreign taxing authority, arising out of Special Advisor’s alleged failure to pay
federal, state, local or foreign taxes during the Term or in respect of amounts paid
during the Term. Nothing in this Agreement will be deemed to constitute a
partnership or joint venture between Special Advisor and any member of AIG, nor will
anything in this Agreement be deemed to constitute any member of AIG or Special
Advisor as the agent of the other. Except pursuant to this Agreement, neither
Special Advisor nor any member of AIG will be or become liable to or bound by any
representation, act or omission whatsoever of the other.
	 
	 	11.	 	Release of Claims; Acknowledgment






	 	(a)	 	Special Advisor agrees to waive and release American
International Group, Inc., the Company, their parents, subsidiaries and
affiliates and their officers, directors, and employees from any and all rights
and claims under United States and Hong Kong law and the laws of all other
relevant jurisdictions to the greatest extent permitted by applicable law,
except any rights relating to obligations under this Agreement and as set forth
in the two schedules provided to him in connection with his retirement (the
“Schedules”). Special Advisor acknowledges that he is not owed any amounts
from AIG except as set forth in this Agreement and in the Schedules. Payment
of any sum referred to in the Schedules shall be made




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	 	 	 	only upon receipt of required regulatory approvals and in accordance with
the conditions thereof.
	 
	 	(b)	 	Special Advisor agrees to execute any documentation that AIG
may reasonably request to give effect to this paragraph.






	 	12.	 	Miscellaneous






	 	(a)	 	Neither party may assign, transfer or subcontract this
Agreement or any of its obligations hereunder without the other party’s
express, prior written consent. Notwithstanding the foregoing, the Company may
assign this Agreement to an entity under AIG’s operation, management or control
or to a purchaser of or successor to the assets of any entity or business line
to which Special Advisor is to provide services under this Agreement.
	 
	 	(b)	 	Special Advisor agrees that he will not issue any press release
or public statement of any kind, or publicize this Agreement or the business
relationship between the parties without the prior review and approval of AIG,
except as required by applicable law upon notice to AIG.
	 
	 	(c)	 	This Agreement will be governed by the law applicable in Hong
Kong and the parties irrevocably and unconditionally submit to the
non-exclusive jurisdiction of the courts of Hong Kong.
	 
	 	(d)	 	Special Advisor acknowledges that the services he is to provide
under this Agreement are of a specific, unique and extraordinary character and
that his breach or threatened breach of the “Non-Competition, Non-Hire”
provisions set forth in paragraph 7 or the “Confidentiality” provisions set
forth in paragraph 9 would cause irreparable injury to the Company, its
parents, subsidiaries and affiliates for which monetary damages alone will not
provide an adequate remedy. Accordingly, in addition to any rights or remedies
the Company may have available to it under this Agreement or otherwise, it also
will be entitled to an injunction to be issued by any court of competent
jurisdiction, restraining Special Advisor from committing or continuing any
violation of this Agreement. Special Advisor agrees that no bond will need to
be posted for the Company to receive such an injunction, and no proof will be
required that monetary damages for violations of the non-competition provisions
would be difficult to calculate and that remedies at law would be inadequate.
The provisions of paragraph 9 of this Agreement will survive the termination of
this Agreement.
	 
	 	(e)	 	This Agreement constitutes the entire agreement of the parties
hereto and supersedes all prior and contemporaneous representations, proposals,
discussions and communications, whether oral or in writing. This Agreement may
be modified only in a writing signed by Special Advisor and the Company; with
respect to paragraph 4, this Agreement can only be




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	 	 	 	amended in a writing signed by Special Advisor, the Company and American
International Group, Inc. This Agreement may be executed in any number of
counterparts and such counterparts may be obtained by facsimile
transmission, each of which taken together will constitute one and the same
instrument.
	 
	 	(f)	 	Any notices given under this Agreement (i) by the Company to
Special Advisor will be in writing and will be given by hand delivery or by
registered or certified mail, return receipt requested, postage prepaid,
addressed to or
(ii) by Special Advisor to the Company will be in writing and will be given by
hand delivery or by registered or certified mail, return receipt requested,
postage prepaid, addressed to American International Assurance Company,
Limited, care of General Counsel, American International Group, Inc., 70 Pine
Street, New York, New York 10270.





	 	 	 	 	 
	 
	 	 	 	 
	Accepted and Agreed:	 	 
	 
	 	 	 	 
	/s/ Edmund S.W. Tse                                                March 20, 2009	 	 
	 	 	 
	Edmund S.W.
Tse                                                                     Date	 	 
	 
	 	 	 	 
	American International Assurance Company, Limited	 	 
	 
	 	 	 	 
	By:

	 	/s/ Mark Wilson                                               March 20, 2009
 

Name: Mark Wilson                                                         Date
	 	 
	 

	 	Title: President AIA	 	 
	 
	 	 	 	 
	Accepted and Agreed Solely With Respect To Paragraph 4:	 	 
	 
	 	 	 	 
	American International Group, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Anastasia D. Kelly                                       March 26, 2009
 

Name: Anastasia D. Kelly                                                Date
	 	 
	 

	 	Title: Vice Chairman	 	 







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Exhibit 1




American International Group, Inc.

Code of Conduct




[Available at AIG’s corporate website, http://www.aigcorporate.com]



 









 





March 24, 2009




Mr. Edmund S.W. Tse





Dear Edmund:



Following our conversation on Friday, we have mutually confirmed that the date of your retirement
from American International Group, Inc. (“AIG”) and its Board of Directors will be the date of our
2009 Annual Meeting of Shareholders.



I am heartened that even after your retirement, we will continue to benefit from your deep
expertise and knowledge of our Asian operations as we continue to execute our restructuring and
divestiture program during difficult times. To coordinate your ongoing contributions to AIG, we
will hereby amend the Services Agreement, dated as of March 20, 2009, between you, American
International Assurance Company, Limited and AIG, to provide that the “Term” of that Agreement will
instead begin on the date of our 2009 Annual Meeting of Shareholders. In addition, please find
attached the final schedules referred to in the Services Agreement, reflecting your retirement
date, updated estimates of your benefits and the final amounts of your plan awards.



I thank you again for your decades of dedicated service to AIG.




Sincerely,




	 	 	 
	/s/ Edward M. Liddy
	 	 
	 
	 	 
	Accepted and agreed:
	 	 
	 
	/s/ Edmund S.W. Tse
	 	 
	 

Edmund S.W. Tse

	 	 
	 
	 	 
	/s/ Mark Wilson
	 	 
	 

American International Assurance Company, Limited

	 	 
	By: Mark Wilson, President
	 	 







 












 





SCHEDULE 1




Edmund S. W. Tse — Retirement Benefits Summary




Hong Kong Staff Provident Fund




Mr. Tse participates in the Hong Kong Provident Fund. The Fund includes contributions from both
AIG and Mr. Tse. Amounts contributed each year, and earnings thereon, are distributed in a lump
sum payment upon a participant’s retirement after reaching age 65. Mr. Tse is currently age 71 and
eligible for a lump sum distribution at retirement.



Mr. Tse’s updated December 31, 2008 Provident Fund Account balance for his Company and Employee
contribution amounts are summarized below:



	 	 	 	 	 
	Company
	 	HK$	35,253,451.28	 
	Employee
	 	HK$	6.427,972.38	 
	 
	Total Account
	 	HK$	41,681,423.66	 






For a retirement date effective May 13, 2009 the total lump sum amount will be subject to market
fluctuations and additional contributions made between January 1, 2009 and May 13, 2009.



Supplemental Executive Retirement Plan




Mr. Tse is a participant in the Supplemental Executive Retirement Plan (SERP). The retirement
benefit from the SERP is payable at retirement in the form of an annuity. The SERP formula, based
upon Mr. Tse’s age and length of service, would provide a lifetime annuity based upon 60% of Final
Average Base Pay earned in the 36 months prior to retirement, reduced by the annuity equivalent of
the lump sum payment Mr. Tse will receive from the Company portion of his Provident Fund account.
The lump sum in the Provident Plan is converted to an equivalent annuity using the conversion
factors in our qualified pension plan.



Mr. Tse’s SERP benefit estimate (using base pay through May 13, 2009 and his December 31, 2008
Provident Fund account balance) with service projected to May 2009 is provided below.



	 	 	 	 	 
	SERP Annual Annuity:
	 	$	540,609	 
	Less Provident Fund Annuity Equivalent:
	 	 	(453,311)	*
	 
	 	 	 
	* (FX rate @ 0.129057 as of 3/23/09)
	 	 	 	 
	SERP Annual Retirement Benefit:
	 	$	87,298	*








 




			
	*	 	This SERP benefit is payable as a lifetime annuity for Mr. Tse’s lifetime only. The annual
amount is paid monthly effective the first of the month after Mr. Tse’s retirement effective date.
The SERP also offers other payment options which result in a reduction to this amount to provide a
survivor annuity benefit or to provide payments on a guaranteed basis for 10 years. The actual SERP
benefit will be calculated using the actual market values in the Provident fund as of May 13, 2009
and will not commence until after the actual fund performance results through that date are
officially finalized.






 









 








SCHEDULE 1 (cont’d)




Edmund S. W. Tse — Retirement Benefit Summary




Corporate Officer Group Life Insurance Benefit




Mr. Tse’s retiree life insurance benefit is based upon 36 times his basic monthly salary with a cap
at HK$3,000,000.



The amount of insurance in retirement is subject to reduction based upon the following schedule:



	 	 	 
	Year After Retirement	 	Percentage of Amount of Insurance
	First

	 	100%
	2nd year after year
	 	50%






Comprehensive Major Medical Plan of the Legency Plan for Retired Employee




Provides comprehensive retiree medical coverage for the retiree and his spouse.



For 2009 retirements, there is an annual premium contribution of USD $900 for retired employees and
USD $900 for spouse coverage. The required contribution is paid on a monthly basis of USD $150 for
retiree and spouse coverage.




 











 





SCHEDULE 2




Edmund Tse



Shares and Cash Due Upon Retirement




	 	 	 	 	 	 	 	 	 	 	 
	Plan	 	Grant	 	 	Earned Shares	 	 	Earned Cash
	Time-vested RSUs
	 	Dec 2007	 	 	 	22,404	 	 	 
	AIG DCPPP
	 	 	2005-2006	 	 	 	76,800	 	 	 
	AIG Partners Plan
	 	 	2006-2007	 	 	 	23,020	 	 	 
	AIG Senior Partners Plan

	 	 	2005	 	 	 	 	 	 	$  3,850,000
	 
	 	Jan 2004 - Dec 2006	 	 	 	 	 	 	$  5,783,750
	 
	 	Jan 2005 - Dec 2007	 	 	 	 	 	 	$  4,754,750
	TOTAL EARNED SHARES OR
CASH PAYABLE
	 	 	 	 	 	 	122,224	 	 	$14,388,500