EX-10.92






Exhibit 10(92)




     The undersigned hereby confirm that they have reached an agreement in principle consistent
with the annexed term sheet.



	 	 	 	 	 	 	 	 	 
	UNITED STATES DEPARTMENT OF	 	 	 	AMERICAN INTERNATIONAL
	     THE TREASURY	 	 	 	     GROUP, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Neel Kashkari
	 	 	 	By:
	 	/s/ Edward M. Liddy
	 

	 	 
	 	 	 	 	 	 
	 

	 	Neel Kashkari
	 	 	 	 	 	Edward M. Liddy
	 

	 	Interim Assistant Secretary
	 	 	 	 	 	Chairman and Chief Executive
	 

	 	For Financial Stability
	 	 	 	 	 	Officer






Dated: March 1, 2009














 








Annex



Term Sheet for Exchange of Series D Fixed Rate Cumulative Perpetual Preferred Stock for Series E
Fixed Rate Non-Cumulative Perpetual Preferred Stock and Issuance of Additional Preferred Stock




[Attached]





 












 







Term Sheet




Exchange of Series D Fixed Rate Cumulative Perpetual Preferred Stock for Series E
Fixed Rate Non-Cumulative Perpetual Preferred Stock 



The
Series D Fixed Rate Cumulative Perpetual Preferred Stock (the
“Series D Preferred Stock”) of American
International Group, Inc. (“AIG”) issued to the
United States Department of the Treasury (“UST”) on
November 25, 2008 shall
be exchanged for Series E Fixed Rate Non-Cumulative Perpetual Preferred Stock (the “Series E
Preferred Stock”) of AIG, with the following changes to the terms of the Series D Preferred Stock:




	 	 	 
	Dividends:

	 	Holders of Series E Preferred Stock
will be entitled to receive, only
when, as and if declared by the
Board of Directors of AIG or a duly
authorized committee thereof,
non-cumulative cash dividends on the
liquidation preference at a rate of
10% per annum. Declared dividends
will be payable quarterly in arrears
on February 1, May 1, August 1 and
November 1 of each year.
	 
	 

	 	Dividends on the Series E Preferred
Stock will not be entitled to receive any
dividends not declared by the Board
of Directors of AIG or a duly
authorized committee thereof and no
interest, or sum of money in lieu of
interest, will be payable in respect
of any dividend not so declared.
	 
	Exchange Ratio:

	 	The aggregate liquidation preference
of the Series E Preferred Stock will
be equal to the sum of the aggregate
liquidation preference of the Series
D Preferred Stock and the amount of
the accrued and unpaid dividends
under the Series D Preferred Stock.
	 
	Voting:

	 	If dividends on the Series E
Preferred Stock are not paid in full
for four dividend periods, whether
or not consecutive, the Series E
Preferred Stock will have the right
to elect the greater of two
directors and a number of directors
(rounded upward) equal to 20% of the
total number of directors after
giving effect to such election. The
right to elect directors will end,
and such two directors shall resign,
if such directors were elected, when
full dividends have been paid for
four consecutive dividend periods
following commencement of such
right.
	 
	Replacement Capital Covenant:

	 	
AIG will enter into a Replacement
Capital Covenant in favor
of the holders of the covered debt pursuant to
which AIG will agree that prior to
the third anniversary of the
issuance of the Series E Preferred
Stock it will not repay, redeem or
purchase, and no subsidiary of AIG
will purchase, all or any part of
the Series E Preferred Stock except
with the proceeds obtained from the
issuance by AIG or any such
subsidiary of certain replacement
capital securities.












 









 










	 	 	 
	Replacement Capital Intention:

	 	
AIG intends that commencing on the
third anniversary of the issuance of
the Series E Preferred Stock it will
not repay, redeem or purchase, nor
will any subsidiary of AIG purchase,
all or any part of the Series E
Preferred Stock except with the
proceeds from the issuance by AIG or
any such subsidiary of securities
for which AIG will receive equity
credit, at the time of sale or
issuance, that is, in the aggregate,
equal to or greater than the equity
credit attributed to the Series E
Preferred Stock redeemed at the time
of such early redemption.
	 
	Executive Compensation:

	 	Until such time as no obligation of
AIG arising from financial
assistance provided under the
Troubled Asset Relief Program
remains outstanding (excluding any
period during which the federal
government only holds warrants to
purchase common stock of AIG), AIG
shall comply in all respects with
Section 111 of the Emergency
Economic Stabilization Act of 2008,
as amended, as implemented by any
guidance or regulations issued
and/or to be issued thereunder
including any amendments to the
guidelines implementing the Programs
of Systemically Significant Failing
Institutions.






Issuance of Additional Preferred Stock




	 	 	 
	Issuer:

	 	AIG
	 
	Initial Holder:

	 	UST
	 
	Security:

	 	Shares of Series F Preferred Stock to be issued from
time to time at the request of
AIG.1
	 
	Issue Price:

	 	Upon each drawdown the aggregate
liquidation preference of the shares of the Series F Preferred
Stock will increase by either an amount equal to the amount of such
drawdown or by the aggregate liquidation preference of the shares of
the Series F Preferred Stock issued on the closing date
of such drawdown.
	 
	Capacity:

	 	Up to $30 billion aggregate liquidation preference.
	 
	Duration of Facility:

	 	5 years beginning on
commencement date of the facility.








 




			
	1	 	The terms of the Series F Preferred Stock will be same
as the terms of the Series E Preferred Stock except that the Series F Preferred
Stock will not be subject to the Replacement Capital Covenant or the
Replacement Capital Intention.




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	Warrants:

	 	The UST will receive a warrant (“Warrant”) to purchase
a number of shares of common stock of AIG (“Common
Stock”) equal to 1% of the issued and outstanding
shares of Common Stock on the commencement date of the
facility. The initial exercise price for the Warrant
shall be $2.50 per share of Common Stock (representing
the par value of the Common Stock on the commencement
date of the facility), subject to customary
anti-dilution adjustments; provided that the initial
exercise price per share of Common Stock shall be
adjusted to the par value per share of the Common Stock
following the amendments to AIG’s Restated Certificate
of Incorporation contemplated by the terms of the
Series C Perpetual, Convertible, Participating
Preferred Stock of AIG. The Warrant shall be net share
settled or, if consented to by AIG and the UST, on a
full physical basis.
	 
	Conditions
to
Commencement:

	 	
On the commencement date of the facility AIG shall:
	 
	

	 	- make representations and warranties essentially in
the form as set forth in the following sections of the
Series D Preferred Stock Securities Purchase Agreement: Section 2.2(a) (With respect to the incorporation and
good standing of AIG), 2.2(b) (Capitalization), 2.2(c)
(Preferred Stock), 2.2(d) (The Warrant and Warrant
Shares) and 2.2(e)(i) (Authorization, Enforceability);
and
	 
	 

	 	
- deliver written opinions from counsel to AIG (which
may be internal counsel) comparable to those delivered
at the closing of the Series D Preferred Stock
offering.
	 
	Executive 

Compensation:

	 	
Until such time as no obligation of AIG arising from
financial assistance provided under the Troubled Asset
Relief Program remains outstanding (excluding any
period during which the federal government only holds
warrants to purchase common stock of AIG), AIG shall
comply in all respects with Section 111 of the
Emergency Economic Stabilization Act of 2008, as
amended, as implemented by any guidance or regulations
issued and/or to be issued thereunder including any
amendments to the guidelines implementing the Programs
of Systemically Significant Failing Institutions.






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	Conditions
to
Closing of Each
Drawdown:

	 	
As a condition to the closing of each drawdown:
	 
	 

	 	- AIG shall not be the debtor in a pending case under
Title 11, United States Code;


	 
	 

	 	- the AIG Credit Facility Trust (or any successor
entity established for the benefit of the United States
Treasury) shall “beneficially own” more than 50% of the
voting power of the aggregate voting power of AIG’s
voting securities at the time of such drawdown.
“Beneficially owns” is as defined in Rule 13d-3 under
the Securities Exchange Act of 1934;

	 
	 

	 	- AIG shall deliver a certificate signed on behalf of
AIG by a senior executive officer certifying to the
effect that the representations and warranties made on
the commencement date are true and correct in all
material respects on and as of such closing date; and

	 
	 

	 	- AIG shall deliver certificates in proper form or,
with the prior consent of UST, evidence of shares in
book-entry form, evidencing the shares of the Series F
Preferred Stock to be issued on such closing date to
UST or its designee.

	 
	 

	 	- AIG shall duly execute the relevant warrant and
deliver such executed warrant to UST or its
designee(s).







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