October 15, 2010

Page 3

e Ifyou voluntarily terminate your employment prior to or on the
first anniversary of grant, you will forfeit the LTPUs and any
unpaid cash and be obligated to repay AIG the full amount of any
cash already paid to you.

Please note that receipt of this Transition Incentive Award is predicated upon
your providing written documentation to AIG within 30 days of your start
date showing forfeiture of your unvested and/or unpaid incentives,
commissions, and/or equity awards from your current employer.

Restructuring of Future Payments. It is possible that you will be among AIG’s
top 25 most highly compensated employees and subject to the most
stringent restrictions imposed by the TARP Standards (the “Restricted Top
25”) in the future. If that is reasonably expected to occur, the payment of
your earned incentive or other amounts may be restructured in order to
comply with the applicable TARP Standards and guidance provided by the
Office of the Special Master for TARP Executive Compensation.

Benefits. Subject to the limits of this letter and the TARP Standards, 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. Beginning as of
the date hereof, you will participate in AIG’s Executive Severance Plan.as an
Eligible Employee (without regard to the Partners Plan, for which you are not
eligible, or any other eligibility requirement). For purposes of the Executive
Severance Plan, your “Severance Period” will be twelve months and, for
2010, your 2010 cash incentive target under Section 5 (not prorated) will be
treated as your historic average “Annual Cash Bonuses”. Thereafter, your
actual 2010 cash incentive award under Section 5 (annualized) will serve as
your 2010 Annual Cash Bonus for purposes of the Executive Severance
Plan. Your 2010 stock salary will not be treated as “Annual base salary” for
purposes of the Executive Severance Plan. In addition, compensation
payments and structures approved by the Special Master for TARP Executive
Compensation for years after 2010 may not result in an increase in the
amounts payable under the Executive Severance Plan.

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, or if you are terminated due to
misconduct that occurred during the period the bonus or incentive
compensation was earned (all within the meaning of, and to the full extent
necessary to comply with, the TARP Standards). 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 (which AIG does not
expect to affect your rights under the Executive Severance Plan unless you
enter the Restricted Top 25).

Your compensation is subject to applicable regulations issued by the U.S.
Department of the Treasury 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.


October 15, 2010
Page 6

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

l agree with and accept the foregoing terms.



October 15, 2010

Page 2

paid in three installments (in each case prorated for partial years under this
letter):

« Twenty-five percent (25%) of your earned incentive award (target
$490,000) will be paid in cash in March of the year following the year for
which it was earned;

+ Twenty-five percent (25%) of your earned incentive award (target
$490,000) will be paid in cash in March of the second year following the
year for which it was earned; and

¢ Fifty percent (50%) of your earned incentive award (target $980,000) will
be paid in LTPUs and/or AIG stock. About sixty-six percent (66.3%) of
this part of your earned incentive award (target: $650,000) will be in the
form of LTPUs that are immediately vested when granted and will be
settled on the third anniversary of grant, and the remaining part (target:
$330,000) will be in the form of AIG long-term restricted stock units that
will vest on the second anniversary of grant and be subject to
transfer/ payout restrictions as required by the TARP Standards for
Compensation and Corporate Governance, 31 C.F.R. Part 30, (the “TARP
Standards’) for long-term restricted stock, except that in no event may
this portion be transferable/payout before the third anniversary of grant.

Transition Incentive Award. AIG places great importance on your immediate
and successful transition to the role of Chief Risk Officer and integration into
the business. Therefore, for 2010 only, you will be eligible to receive a
transition incentive award based on a target amount of $2,250,000, subject
to the following terms:

* The Committee will determine the amount of your transition incentive
award based on its performance assessment against objective
performance metrics related to key transition goals.

« Any transition incentive award earned will be granted in March 2011 and
paid in three installments:

* About twenty-two percent (22.2%) of your earned transition
incentive award (target $500,000) will be paid in cash on the grant
date;

* About twenty-two percent (22.2%) of your earned transition
incentive award (target $500,000) will be immediately vested on
the grant date but payment in cash will be deferred until March
2012; and

* About fifty-six percent (55.6%) of your earned transition incentive
award (target $1,250,000) will be paid in immediately vested
LTPUs on the grant date, and such LTPUs will be settled on the
third anniversary of the grant date.

¢ Notwithstanding any contrary provision in the preceding, any transition
incentive award earned will be subject to the following forfeiture and
repayment requirement:


October 15, 2010

Page 4

10.

11.

12.

13.

14.

If, after your start date, AIG determines it necessary under any
compensation requirements or regulations, you shall (a) promptly execute a
waiver of claims against AIG and its affiliates and the United States relating
to the compensation requirements or regulations and (b) execute such other
agreements, acknowledgments or other documents necessary to implement
such compensation requirements or regulations (in each case in such form
as AIG determines is appropriate).

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 and you shall not be required to act against your own
legal interests.

Tax Matters. To the extent any taxable expense reimbursement or in-kind
benefits under Section 8 or 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 no event shall
any expenses be reimbursed after 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 in-kind 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.

Withholding. Tax will be withheld by AIG as appropriate under applicable
Federal or other governmental tax requirements for any payments or
deliveries under this letter, including by withholding in-kind from awards of
shares or LTPUs.

Non-competition and non-solicitation. In connection with your joining AIG,
you agree to sign the attached Non-competition, Non-solicitation and Non-
disclosure Agreement.

No Guarantee of Employment. This offer letter is not a guarantee of
employment for a fixed term. Your employment with AIG (as set forth in the
employment application) will be on an “at-will” basis, meaning that you and
AIG may terminate your employment with AIG at any time and for any
reason, with or without prior notice.


DEPARTMENT OF THE TREASURY
WASHINGTON, D.C, 20220

November 8, 2010

Jeffrey J. Hurd, Esq.
Senior Vice President —
Human Resources and Communications
American International Group, Inc.
70 Pine Street
New York, New York 10270

Re: Supplemental Determination Regarding
Proposed Compensation Structure for Chief Risk Officer

Dear Mr. Hurd:

This letter addresses your request on behalf of American International Group, Inc.
(“AIG”), for approval by the Special Master for TARP Executive Compensation of a
compensation structure for a potential new hire. Under the Department of the Treasury’s Interim
Final Rule on TARP Standards for Compensation and Corporate Governance (the “Rule”), the
Special Master must approve the compensation structures of executive officers of “exceptional
assistance recipients” such as AIG. 31 C.F.R. § 30.16(a)(3)(ii).

Pursuant to the Rule, on April 16, 2010, the Special Master issued an initial
determination (the “Determination”), which concluded that certain compensation structures for
AIG executive officers would not result “in payments that are inconsistent with the purposes of
Section 111 of EESA or TARP, or are otherwise contrary to the public interest.” Jd.

§ 30.16(a)(3)(ii) (the “Public Interest Standard”). Subsequent to the issuance of the
Determination, AIG informed the Office of the Special Master that it had identified a potential
new hire for an executive officer position, serving as Chief Risk Officer. On October 15, 2010,
AIG submitted a proposed compensation structure to the Office of the Special Master—its
representatives having previously discussed the substance of the proposal with the Special
Master and staff members in the Office of the Special Master—and requested a determination
that the proposed structure is consistent with the Public Interest Standard.

AIG proposed a 2010 compensation structure for the new Chief Risk Officer that
generally conforms to the compensation structures the Special Master approved in the
Determination. Accordingly, the Special Master has determined that AIG’s proposed 2010
compensation structure for the Chief Risk Officer, as set forth in the draft employment
agreement attached as Exhibit I, is consistent with the Public Interest Standard.


October 15, 2010

Page 5

15.

16.

17.

Entire Agreement. Together with the employment application, this offer letter
constitutes AIG’s only statement relating to its offer of employment to you
and supersedes any previous communications or representations, oral or
written, from or on behalf of AIG or any of its affiliates. Notwithstanding the
foregoing, your signed Fair Credit Reporting Act Consumer Disclosure and
General Authorization is expressly incorporated by reference into this offer
letter.

Miscellaneous Representations. You confirm and represent to AIG, by
signing this letter, that: (a) you are under no obligation or arrangement
(including any restrictive covenants with any prior employer or any other
entity) that would prevent you from becoming an employee of AIG or that
would adversely impact your ability to perform the expected services on
behalf of AIG; (b) you have not taken (or failed to return) any confidential
information belonging to your prior employer or any other entity, and, to the
extent you remain in possession of any such information, you will never use
or disclose such information to AIG or any of its employees, agents or
affiliates; and (c) you understand and accept all of the terms and conditions
of this offer.

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. 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.

{Signature page follows]


The conclusions reached herein apply only to the proposal in respect of the Chief Risk
Officer. Such conclusions are limited to the authority vested in the Special Master by Section
30.16(a)(3) of the Rule, and shall not constitute, or be construed to constitute, the judgment of
the Office of the Special Master or the Department of the Treasury with respect to the
compliance of the proposed compensation structure or any other compensation structure for the
subject employee with any other provision of the Rule. Moreover, my evaluation and conclusion
have relied upon, and are qualified in their entirety by, the accuracy of the materials submitted by
AIG to the Office of the Special Master, and the absence of any material misstatement or
omission in such materials.

Very truly yours,
Patricia Geoghegan

Office of the Special Master &r
TARP Executive Compensation

Attachment

ce: Mitchell D. Schultz
Marc R. Trevino, Esq.


Dear [Name]:

Exhibit I

October 15, 2010

lam pleased to confirm the terms of your employment with American International

Group, Inc.
1.
2.

Effective Date. October 1, 2010, or as soon thereafter as possible.

Position. On the Effective Date, you will begin to serve as Chief Risk Officer
of AIG. In this capacity, you will initially report to the Executive Vice
President — Finance, Risk and Investments and the Finance and Risk
Committee of AIG’s Board of Directors and have all of the customary
authorities, duties and responsibilities that accompany your position.

Base Cash Salary. Your initial base cash salary will be $500,000 per year
(prorated for partial years under this letter).

Stock Salary. In addition to your cash salary, you will receive semi-monthly
awards of Long-Term Performance Units, also known as LTPUs, issued
under the American International Group, Inc. Long-Term Performance Units
Plan. These awards, which we refer to as stock salary, will be at a rate of
$830,000 per year (prorated for partial years under this letter). Your stock
salary awards will be subject to additional terms, including:

« Ofyour total annual stock salary, LTPUs earned at a rate of $165,000
per year (prorated for partial years under this letter) will be settled on the
first anniversary of the date of grant, and the remaining LTPUs will be
settled on the third anniversary of the date of grant; and

e Stock salary is immediately vested upon grant.

Annual Incentive Awards. You will be eligible to receive an annual incentive
award based on a target amount of $1,960,000 (prorated for partial years
under this letter). AIG’s Compensation and Management Resources
Committee (the “Committee”), in consultation with the Executive Vice
President ~ Finance, Risk and Investments, will determine the amount of
your annual incentive award based on its performance assessment against
objective performance metrics. Any annual incentive award earned will be