Confidential

February 8, 2010 

Dear Peter:

I am pleased to confirm the terms of your employment with American International 

Group, Inc. 

1. Term of this Letter. This letter will be effective for a term beginning on 

February 8, 2010 and ending on December 31, 2012. 

2. Position. Your employment with AIG will commence on the beginning of the 

term of this letter. You will be an Executive Vice President of AIG and report 

directly to the CEO. The following functions of AIG will report to you: 

Investments, Financial Products, CFO/Finance, Strategic 

Planning/Restructuring, Risk and Audit. 

3. Base Cash Salary. Your base cash salary will be $1,500,000 per year. On 

January 1, 2011, your base cash salary will increase to $1,800,000. 

4. Stock Salary. In addition to your cash salary, you will receive equal bimonthly awards of stock or restricted stock units in AIG. For 2010, these 

awards, which we refer to as stock salary, will be at a rate of $2,400,000 per 

year. On January 1, 2011, your stock salary will increase to $4,400,000 per 

year. 

• Initially your stock salary will be in the form of restricted stock units of 

AIG; 

• Restricted stock units will be immediately vested and will be delivered in 

three equal, annual installments beginning on the 2nd anniversary of the 

date of grant (with each installment being accelerated by one year if AIG 

repays its federal obligations), and units will be settled in cash or stock 

at the election of the Committee (in consultation with you) and taxed on 

delivery; 

• If your restricted stock units are settled in stock, the stock will be 

immediately vested when delivered, tax will be withheld by AIG in kind 

(unless otherwise directed by you) and remaining shares shall not be 

subject to any additional transferability restrictions; and 

• The Committee will authorize early transferability of any stock salary you 

have received on death or disability. 

5. 2010 Cash Incentive Pay. For 2010, your annual cash incentive target will 

be $1,800,000. AIG’s Compensation and Management Resources Committee 

will determine the amount of your cash incentive award based on its 

performance assessment against objective performance metrics that have 

been provided to you. We anticipate that you will become one of AIG’s top 

25 most highly compensated employees for 2011. Accordingly, any cash 

incentive earned will be paid in two equal installments in December 2010. 

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The first installment will be paid in cash, and the second installment will be 

paid in fully vested AIG stock that may not be transferred until January 1, 

2012. 

Your annual cash incentive for 2010 may not exceed the amount of the 

stock incentive award you receive for 2010 pursuant to Section 6 below. 

Because we anticipate that you will become one of AIG’s top 25 most highly 

compensation employees for 2011, we do not anticipate that you will be 

eligible for an annual cash incentive for 2011 or 2012. 

6. 2010 Long-Term Stock Incentive Pay. For 2010, your long-term incentive 

award target will be $1,800,000 in the form of stock or restricted stock units 

of AIG. The Committee will determine the form and amount of your stock 

incentive award based on its performance assessment against objective 

performance metrics that have been provided to you, subject to the 

following: 

• For 2010, stock or restricted stock units will be immediately vested and 

will be subject to transfer/payout restrictions for three years; and 

• Awards will provide for early transferability in the event of death or 

disability. 

7. Long-Term Restricted Stock. For each of 2011 and 2012, your long-term 

restricted stock award target will be $800,000. The Committee will 

determine the form and amount of your long-term restricted stock award 

based on its performance assessment against objective performance metrics 

that will be provided to you, subject to the following: 

• For 2011 and 2012, stock or restricted stock units will vest on the 3rd 

anniversary of grant and will be subject to transfer/payout restrictions 

as and if required at the time by the TARP Standards for Compensation 

and Corporate Governance (31 C.F.R. Part 30) for long-term restricted 

stock; and 

• Awards will provide for early vesting on death or disability and early 

transferability on the same events to the extent permitted by the TARP 

Standards for Compensation and Corporate Governance. 

8. Benefits. Subject to the limits of this letter and the TARP Standards of 

Compensation and Corporate Governance, you will be entitled to benefits 

consistent with senior executives of AIG and reimbursement of reasonable 

business expenses, in each case in accordance with applicable AIG policies 

as in effect from time to time. In connection with your joining AIG, AIG will 

also promptly pay any reasonable legal fees incurred in connection with your 

review of this letter and its annexes. You will participate in AIG’s Executive 

Severance Plan beginning as of the date hereof as an Executive Vice 

President (without regard to the Partners Plan, for which you are not eligible, 

or any other eligibility requirement). Under the ESP for 2010, your 2010 

cash incentive target will be treated as your historic average “Annual Cash 

Bonuses.” 

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9. Executive Compensation Standards. Any bonus or incentive compensation 

paid to you is subject to recovery or “clawback” by AIG if the payments were 

based on materially inaccurate financial statements or any other materially 

inaccurate performance metric criteria (all within the meaning of, and to the 

full extent necessary to comply with, the TARP Standards for Compensation 

and Corporate Governance). In addition, you will not be entitled to any 

golden parachute payment or tax gross-up from AIG or its affiliates to the 

extent prohibited by the TARP Standards for Compensation and Corporate 

Governance. 

In addition, your compensation is subject to applicable regulations issued by 

the U.S. Department of the Treasury (including the TARP Standards for 

Compensation and Corporate Governance) and applicable requirements of 

agreements between AIG and the U.S. government, as the same are in effect 

from time to time. You may receive compensation from AIG only to the 

extent that it is consistent with those regulations and requirements. 

10. Indemnification and Cooperation. During and after your employment, AIG 

will indemnify you in your capacity as a director, officer, employee or agent 

of AIG to the fullest extent permitted by applicable law and AIG’s charter 

and by-laws, and will provide you with director and officer liability insurance 

coverage (including post-termination/post-director service tail coverage) on 

the same basis as AIG’s other executive officers. AIG agrees to cause any 

successor to all or substantially all of the business or assets (or both) of AIG 

to assume expressly in writing and to agree to perform all of the obligations 

of AIG in this paragraph. 

You agree (whether during or after your employment with AIG) to reasonably 

cooperate with AIG in connection with any litigation or regulatory matter or 

with any government authority on any matter, in each case, pertaining to 

AIG and with respect to which you may have relevant knowledge, provided 

that, in connection with such cooperation, AIG will reimburse your 

reasonable expenses including reasonable legal fees if you choose to have 

your own counsel, and you shall not be required to act against your own 

legal interests. 

11. Tax Matters. To the extent any taxable expense reimbursement or in-kind 

benefits under Section 8 or Section 10 is subject to Section 409A of the 

Internal Revenue Code of 1986, the amount thereof eligible in one taxable 

year shall not affect the amount eligible for any other taxable year, in any 

event, any such expenses shall be reimbursed no later than the last day of 

the taxable year following the taxable year in which you incurred such 

expenses and in no event shall any right to reimbursement or receipt of inkind benefits be subject to liquidation or exchange for another benefit. Each 

payment under this letter will be treated as a separate payment for purposes 

of Section 409A of the Code. You will be entitled to instruct AIG to withhold 

taxes in accordance with the applicable rules upon your becoming subject to 

any tax on vesting of any stock awards hereunder. This Section 11 shall also 

apply to any payments made to you under Section IX.F. (Cooperation) of the 

Release and Restrictive Covenant Agreement, which shall be as set forth in 

Annex 1. 

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12. Non-competition and non-solicitation. In connection with your joining AIG, 

you have entered into non-competition arrangements (covering competing 

insurance business) and non-solicitation arrangement (covering senior AIG 

employees) with AIG as set forth in Annex 2. For the avoidance of doubt, 

those non-competition arrangements provide that enforcement will be 

conditioned on AIG’s performing its obligations under the ESP as provided 

herein. 

13. Dispute resolution. Any contest or dispute between AIG and you arising out 

of or relating to or concerning this letter or your other employment 

arrangements with AIG (including termination of your employment) shall be 

submitted to arbitration in New York City before, and in accordance with the 

commercial arbitration rules then obtaining of, the American Arbitration 

Association (the "AAA"). Each party will bear his or its own expenses of the 

arbitration including legal fees. Any dispute will be subject to the 

jurisdiction of a State or Federal court located in the City of New York to the 

extent necessary to obtain injunctive relief.

We look forward to having you as a member of AIG’s leadership team. 

Sincerely, 

AMERICAN INTERNATIONAL GROUP, INC. 

By:

 

Jeffrey J. Hurd 

 Senior Vice President – 

Human Resources and Communications 

I agree with and accept the foregoing terms. 

[Name] 

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