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TARP AIG SSFI Investment 

Senior Preferred Stock and Warrant 

Summary of Senior Preferred Terms

Issuer: American International Group, Inc. (“AIG”). 

Initial Holder: United States Department of the Treasury (the “UST”). 

Size: $40 Billion aggregate liquidation preference. 

Security: Senior Preferred, liquidation preference $10,000 per share; 

provided that UST may, upon transfer of the Senior Preferred, 

require AIG to appoint a depositary to hold the Senior Preferred 

and issue depositary receipts. 

Ranking: Senior to common stock and pari passu with existing preferred 

shares other than preferred shares which by their terms rank 

junior to the Senior Preferred. At the meeting of stockholders 

called to effect the amendments to AIG’s Restated Certificate of 

Incorporation contemplated by the terms of the convertible 

preferred stock, AIG shall propose an amendment to its Restated 

Certificate of Incorporation to allow the Senior Preferred to rank 

senior to the convertible preferred stock. 

Term: Perpetual life. 

Dividend: The Senior Preferred will accrue cumulative dividends at a rate 

of 10% per annum. Dividends will be payable quarterly in arrears 

on February 1, May 1, August 1 and November 1 of each year. 

Dividends will be payable when, as and if declared by the Board 

of Directors of AIG. Accrued but unpaid dividends shall 

compound quarterly. 

Redemption: At any time that (i) the AIG Credit Facility Trust (or any successor 

entity established for the benefit of the United States Treasury) 

“beneficially owns” less than 30% of the aggregate voting power 

of AIG's voting securities and (ii) no holder of the Senior 

Preferred controls AIG, then AIG may redeem the Senior 

Preferred in whole or in part at a redemption price equal to 100% 

of its liquidation preference, plus an amount equal to accrued 

and unpaid dividends (including, if applicable, dividends on such 

amount). “Control” for this purpose means the power to direct the 

management and policies of AIG, directly or indirectly, whether 

through the ownership of voting securities, by contract, by the 

power to control AIG's Board of Directors or otherwise. 

“Beneficially owns” is as defined in Rule 13d-3 under the 

Securities Exchange Act of 1934. For the avoidance of doubt, 

while there is AIG’s Board of Directors control (or the potential to 

gain AIG’s Board of Directors control) by the holder of the Senior 

Preferred, then AIG is not permitted to redeem the Senior 

Preferred. 

Restrictions on 

Dividends: Subject to certain exceptions, for as long as any Senior Preferred 
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is outstanding, no dividends may be declared or paid on junior 

preferred shares, preferred shares ranking pari passu with the 

Senior Preferred (“Parity Stock”), or common shares (other than 

(i) in the case of pari passu preferred shares, dividends on a pro 

rata basis with the Senior Preferred and (ii) in the case of junior 

preferred shares, dividends payable solely in common shares), 

nor may AIG repurchase or redeem any junior preferred shares, 

preferred shares ranking pari passu with the Senior Preferred or 

common shares, unless all accrued and unpaid dividends for all 

past dividend periods on the Senior Preferred are fully paid or 

declared and a sum sufficient for the payment thereof set apart. 

Common dividends: The UST’s consent shall be required for any increase in common 

dividends per share until the fifth anniversary of the date of this 

investment unless prior to such fifth anniversary the Senior 

Preferred is redeemed in whole or the UST has transferred all of 

the Senior Preferred to third parties. 

Repurchases: The UST’s consent shall be required for repurchases of any 

common shares, other capital stock, trust preferred securities or 

other equity securities (other than (i) repurchases of the Senior 

Preferred, (ii) repurchases of junior preferred shares or common 

shares (“Junior Stock”) in connection with the administration of 

any employee benefit plan in the ordinary course of business and 

consistent with past practice (including purchases to offset share 

dilution pursuant to a publicly announced repurchase plan), (iii) 

any redemption or repurchase of rights pursuant to any 

stockholders’ rights plan and (iv) the exchange or conversion of 

Junior Stock for or into other Junior Stock or of Parity Stock or 

trust preferred securities for or into other Parity Stock (with the 

same or lesser aggregate liquidation amount) or Junior Stock, in 

each case, solely to the extent required pursuant to binding 

contractual agreements entered into prior to the signing date of 

UST’s agreement to purchase the Senior Preferred or any 

subsequent agreement for the accelerated exercise, settlement 

or exchange thereof for common stock), until the fifth anniversary 

of the date of this investment unless prior to such fifth 

anniversary the Senior Preferred is redeemed in whole or the 

UST has transferred all of the Senior Preferred to third parties. 

Notwithstanding the foregoing, following the redemption in whole 

of the Senior Preferred held by UST or the transfer by UST of all 

of the Senior Preferred to one or more third parties not affiliated 

with UST, AIG may repurchase, in whole or in part, at any time 

the Warrant then held by UST at the fair market value of the 

Warrant so long as no holder of the Warrant controls AIG as 

provided in clause (ii) of “Redemption” above. 

Voting rights: The Senior Preferred shall be non-voting, other than class voting 

rights on (i) any authorization or issuance of shares other than 

the convertible preferred stock ranking senior or pari passu to the 

Senior Preferred, (ii) any amendment that adversely affects the 

rights of Senior Preferred, or (iii) any merger, exchange or similar 

transaction unless the Senior Preferred remains outstanding or is 

converted into or exchanged for preference securities of the 

surviving or resulting entity or its ultimate parent and the Senior 

Preferred or such preference shares have such rights, 

preferences, privileges and voting powers, and limitations and 

restrictions thereof, taken as a whole, as are not materially less 
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favorable to the holders thereof than those of the Senior 

Preferred immediately prior to such transaction, taken as a 

whole. 

If dividends on the Senior Preferred are not paid in full for four 

dividend periods, whether or not consecutive, the Senior 

Preferred will have the right to elect the greater of 2 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 when full dividends have been paid for 

all past dividend periods. 

Transferability: The Senior Preferred will not be subject to any contractual 

restrictions on transfer other than such as are necessary to 

insure compliance with U.S. federal and state securities laws. 

AIG will file a registration statement (which may be a shelf 

registration statement) covering the Senior Preferred as promptly 

as practicable, but in any event within 15 days, after notification 

by the UST and, if necessary, shall take all action required to 

cause such registration statement to be declared effective as 

soon as possible. During any period that an effective registration 

statement is not available for the resale by the UST of the Senior 

Preferred, AIG will also grant to the UST piggyback registration 

rights for the Senior Preferred and will take such other steps as 

may be reasonably requested to facilitate the transfer of the 

Senior Preferred including, if requested by the UST, using 

reasonable best efforts to list the Senior Preferred on a national 

securities exchange. If requested by the UST, AIG will appoint a 

depositary to hold the Senior Preferred and issue depositary 

receipts. 

Claim in 

Bankruptcy: Equity claim with liquidation preference to common equity claim. 

Acceleration 

Rights: None 

Use of Proceeds: To repay the senior secured revolving credit facility governed by 

the Credit Agreement dated as of September 22, 2008 (the 

“Credit Agreement”) between AIG and the Federal Reserve Bank 

of New York (“FRBNY”). 

Tax Treatment: Dividends on the Senior Preferred are non tax-deductible to AIG. 

Restrictions on 

Expenses: AIG shall continue to maintain and implement its comprehensive 

written policy on corporate expenses and distribute such policy to 

all AIG employees. Such policy, as may be amended from time 

to time, shall remain in effect at least until such time as any of 

the shares of the Senior Preferred are owned by the UST. Any 

material amendments to such policy shall require the prior written 

consent of the UST until such time as the UST no longer owns 

any shares of Senior Preferred, and any material deviations from 

such policy, whether in contravention thereof or pursuant to 

waivers provided for thereunder, shall promptly be reported to 

the UST. Such policy shall, at a minimum: (i) require 

compliance with all applicable law; (ii) apply to AIG and all of its 

subsidiaries; (iii) govern (a) the hosting, sponsorship or other 
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payment for conferences and events, (b) the use of corporate 

aircraft, (c) travel accommodations and expenditures, (d) 

consulting arrangements with outside service providers, (e) any 

new lease or acquisition of real estate, (f) expenses relating to 

office or facility renovations or relocations and (g) expenses 

relating to entertainment or holiday parties; and (iv) provide for 

(a) internal reporting and oversight and (b) mechanisms for 

addressing non-compliance with the policy. 

Restrictions on 

Lobbying: AIG shall continue to maintain and implement its comprehensive 

written policy on lobbying, governmental ethics and political 

activity and distribute such policy to all AIG employees and 

lobbying firms involved in any such activity. Such policy, as may 

be amended from time to time, shall remain in effect at least until 

such time as any of the shares of the Senior Preferred are 

owned by the UST. Any material amendments to such policy 

shall require the prior written consent of the UST until such time 

as the UST no longer owns any shares of Senior Preferred, and 

any material deviations from such policy, whether in 

contravention thereof or pursuant to waivers provided for 

thereunder, shall promptly be reported to the UST. Such policy 

shall, at a minimum: (i) require compliance with all applicable 

law; (ii) apply to AIG and all of its subsidiaries and affiliated 

foundations; (iii) govern (a) the provision of items of value to any 

government officials, (b) lobbying and (c) political activities and 

contributions; and (iv) provide for (a) internal reporting and 

oversight and (b) mechanisms for addressing non-compliance 

with the policy. 

Reporting: Except as otherwise agreed, AIG shall provide the UST (i) the 

information required to be provided by AIG to the FRBNY 

pursuant to Section 5.04 of the Credit Agreement, (ii) the notices 

required by Section 5.05 of the Credit Agreement, in each case 

within the time periods for delivery thereof specified in the Credit 

Agreement and (iii) such executive compensation information as 

is required for purposes of the Emergency Economic 

Stabilization Act of 2008 (“EESA”) and the regulations and 

guidelines thereunder; provided that, after the termination of the 

Credit Agreement, such informational and notice requirements as 

are provided in Section 5.04 and Section 5.05 of the Credit 

Agreement shall remain in full force and effect until such time as 

the UST no longer owns any shares of Senior Preferred. In 

addition, AIG shall promptly provide the UST such other 

information and notices as the UST may reasonably request from 

time to time. 

Executive 

Compensation: As a condition to the closing of this investment, AIG shall be 

subject to the executive compensation and corporate 

governance requirements of Section 111(b) of the EESA and the 

UST’s guidelines that carry out the provisions of such subsection 

for systemically significant failing institutions as set forth in Notice 

2008-PSSFI. Accordingly, as a condition to the closing of this 

investment, AIG and its senior executive officers covered by the 

EESA (“SEOs”) shall modify or terminate all benefit plans, 

arrangements and agreements (including golden parachute 

agreements) to the extent necessary to be in compliance with, 
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and following the closing and for so long as the UST holds any 

equity or debt securities of AIG issued under this agreement (the 

“Relevant Period”), AIG shall agree to be bound by the executive 

compensation and corporate governance requirements of 

Section 111(b) of the EESA and the guidelines set forth in Notice 

2008-PSSFI. As an additional condition to the closing, AIG and 

its SEOs shall grant to the UST and the SEOs shall grant to AIG 

waivers releasing the UST, and, in the case of the SEOs release, 

AIG, from any claims that AIG and such SEOs may otherwise 

have as a result of any modification of the terms of any benefit 

plans, arrangements and agreements to eliminate any provisions 

that would not be in compliance with the executive compensation 

and corporate governance requirements of Section 111 of the 

EESA and the guidelines set forth in Notice 2008-PSSFI. 

In addition to Notice 2008-PSSFI, the following will apply: 

 1. AIG shall undertake during the Relevant Period to 

limit any golden parachute payments to its most senior employee 

group, who are currently referred to as Senior Partners (“Senior 

Partners”), (other than its SEOs) to the amounts permitted by the 

regulations relating to participants in the EESA Capital Purchase 

Program and the guidelines and Interim Final Rule (31 CFR Part 

30) relating thereto as if they were SEOs (except that equity 

denominated awards settled solely in equity shall not be included 

in such limit), and AIG shall grant the UST a waiver releasing the 

UST, and shall use its best efforts to obtain waivers from the 

Senior Partners releasing the UST and AIG, from claims that AIG 

may have against the UST and that such Senior Partners may 

have against the UST or AIG as a result of such limits, and shall 

have obtained such waivers from AIG and its U.S.-based Senior 

Partners prior to and as an additional condition to the closing. 

2. The annual bonus pools payable to Senior Partners 

in respect of each of 2008 and 2009 shall not exceed the 

average of the annual bonus pools paid to Senior Partners for 

2006 and 2007 (in each case exclusive of AIG’s historic quarterly 

bonus program, the amount of which will not increase for any 

participant, and subject to appropriate adjustment for new hires 

and departures). 

Risk Management 

Committee: AIG shall establish, within 30 days of the issuance of the Senior 

Preferred, and maintain, at least until the UST ceases to own any 

shares of the Senior Preferred, the Warrant or any other equity 

or debt securities of AIG, a risk management committee of the 

AIG’s Board of Directors that will oversee the major risks 

involved in AIG’s business operations and review AIG’s actions 

to mitigate and manage those risks. 

Miscellaneous: The dividend rate as provided in “Dividend” above is subject to 

adjustment in the sole discretion of the Secretary of the Treasury 

in light of, inter alia, then-prevailing economic conditions and the 

financial condition of AIG, with the objective of protecting the 

U.S. taxpayer. 
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Summary of Warrant Terms

Warrant: The UST will receive a warrant (“Warrant”) to purchase a number 

of shares of common stock of AIG (“Common Stock”) equal to 

2% of the issued and outstanding shares of Common Stock on 

the date of investment. 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 date of the investment), 

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 convertible 

preferred stock. The Warrant shall be net share settled or, if 

consented to by AIG and the UST, on a full physical basis. 

Term: 10 years 

Exercisability: Immediately exercisable, in whole or in part. 

Transferability: The Warrant will not be subject to any contractual restrictions on 

transfer other than such as are necessary to ensure compliance 

with U.S. federal and state securities laws. AIG will file a 

registration statement (which may be a shelf registration 

statement) covering the Warrant and the Common Stock 

underlying the Warrant as promptly as practicable, but in any 

event within 15 days after notification by the UST, and, if 

necessary, shall take all action required to cause such 

registration statement to be declared effective as soon as 

possible. During any period that an effective registration 

statement is not available for the resale by the UST of the 

Warrant or the Common Stock underlying the Warrant, AIG will 

also grant to the UST piggyback registration rights for the 

Warrant and the Common Stock underlying the Warrant. AIG will 

apply for the listing on the New York Stock Exchange of the 

Common Stock underlying the Warrant and will take such other 

steps as may be reasonably requested to facilitate the transfer of 

the Warrant and the underlying Common Stock. 

Voting: The UST will agree not to exercise voting power with respect to 

any shares of Common Stock issued to it upon exercise of the 

Warrant. 

Substitution: In the event AIG is no longer listed or traded on a national 

securities exchange the Warrant will be exchangeable (in whole 

or in part), at the option of the UST, for an economic interest (to 

be determined by the UST after consultation with AIG) of AIG 

classified as permanent equity under GAAP having a fair market 

value (as determined by the UST) equal to the portion of the 

Warrant so exchanged. 
Name of Institution City State

10/28/2008 Bank of America Corporation Charlotte NC Purchase Preferred Stock w/Warrants 10/28/2008 Bank of New York Mellon Corporation New York NY Purchase Preferred Stock w/Warrants 

10/28/2008 Citigroup Inc. New York NY Purchase Preferred Stock w/Warrants 10/28/2008 The Goldman Sachs Group, Inc. New York NY Purchase Preferred Stock w/Warrants 10/28/2008 JPMorgan Chase & Co. New York NY Purchase Preferred Stock w/Warrants 10/28/2008 Morgan Stanley New York NY Purchase Preferred Stock w/Warrants 10/28/2008 State Street Corporation Boston MA Purchase Preferred Stock w/Warrants 

10/28/2008 Wells Fargo & Company San Francisco CA Purchase Preferred Stock w/Warrants 

1/ 10/28/2008 Merrill Lynch & Co., Inc. New York NY Purchase Preferred Stock w/Warrants 

11/14/2008 Bank of Commerce Holdings Redding CA Purchase Preferred Stock w/Warrants 11/14/2008 1st FS Corporation Hendersonville NC Purchase Preferred Stock w/Warrants 11/14/2008 UCBH Holdings, Inc. San Francisco CA Purchase Preferred Stock w/Warrants 

11/14/2008 Northern Trust Corporation Chicago IL Purchase Preferred Stock w/Warrants 

11/14/2008 SunTrust Banks, Inc. Atlanta GA Purchase Preferred Stock w/Warrants 

11/14/2008 Broadway Financial Corporation Los Angeles CA Purchase Preferred Stock w/Warrants 

11/14/2008 Washington Federal Inc. Seattle WA Purchase Preferred Stock w/Warrants 

11/14/2008 BB&T Corp. Winston-Salem NC Purchase Preferred Stock w/Warrants 

11/14/2008 Provident Bancshares Corp. Baltimore MD Purchase Preferred Stock w/Warrants 

11/14/2008 Umpqua Holdings Corp. Portland OR Purchase Preferred Stock w/Warrants 

11/14/2008 Comerica Inc. Dallas TX Purchase Preferred Stock w/Warrants 

11/14/2008 Regions Financial Corp. Birmingham AL Purchase Preferred Stock w/Warrants 

11/14/2008 Capital One Financial Corporation McLean VA Purchase Preferred Stock w/Warrants 

11/14/2008 First Horizon National Corporation Memphis TN Purchase Preferred Stock w/Warrants 

11/14/2008 Huntington Bancshares Columbus OH Purchase Preferred Stock w/Warrants 

11/14/2008 KeyCorp Cleveland OH Purchase Preferred Stock w/Warrants 

11/14/2008 Valley National Bancorp Wayne NJ Purchase Preferred Stock w/Warrants 

11/14/2008 Zions Bancorporation Salt Lake City UT Purchase Preferred Stock w/Warrants 

11/14/2008 Marshall & Ilsley Corporation Milwaukee WI Purchase Preferred Stock w/Warrants 

11/14/2008 U.S. Bancorp Minneapolis MN Purchase Preferred Stock w/Warrants 

11/14/2008 TCF Financial Corporation Wayzata MN Purchase Preferred Stock w/Warrants 

11/21/2008 First Niagara Financial Group Lockport NY Purchase Preferred Stock w/Warrants 

11/21/2008 HF Financial Corp. Sioux Falls SD Purchase Preferred Stock w/Warrants 11/21/2008 Centerstate Banks of Florida Inc. Davenport FL Purchase Preferred Stock w/Warrants 11/21/2008 City National Corporation Beverly Hills CA Purchase Preferred Stock w/Warrants 

CAPITAL PURCHASE PROGRAM

Transaction Report

Updated on November 25, 2008; 4:30 PM

Seller

Date Transaction Type Description
Name of Institution City State

CAPITAL PURCHASE PROGRAM

Transaction Report

Updated on November 25, 2008; 4:30 PM

Seller

Date Transaction Type Description

11/21/2008 First Community Bankshares Inc. Bluefield VA Purchase Preferred Stock w/Warrants 11/21/2008 Western Alliance Bancorporation Las Vegas NV Purchase Preferred Stock w/Warrants 

11/21/2008 Webster Financial Corporation Waterbury CT Purchase Preferred Stock w/Warrants 

11/21/2008 Pacific Capital Bancorp Santa Barbara CA Purchase Preferred Stock w/Warrants 

11/21/2008 Heritage Commerce Corp. San Jose CA Purchase Preferred Stock w/Warrants 11/21/2008 Ameris Bancorp Moultrie GA Purchase Preferred Stock w/Warrants 11/21/2008 Porter Bancorp Inc. Louisville KY Purchase Preferred Stock w/Warrants 11/21/2008 Banner Corporation Walla Walla WA Purchase Preferred Stock w/Warrants 

11/21/2008 Cascade Financial Corporation Everett WA Purchase Preferred Stock w/Warrants 11/21/2008 Columbia Banking System, Inc. Tacoma WA Purchase Preferred Stock w/Warrants 11/21/2008 Heritage Financial Corporation Olympia WA Purchase Preferred Stock w/Warrants 11/21/2008 First PacTrust Bancorp, Inc. Chula Vista CA Purchase Preferred Stock w/Warrants 11/21/2008 Severn Bancorp, Inc. Annapolis MD Purchase Preferred Stock w/Warrants 11/21/2008 Boston Private Financial Holdings, Inc. Boston MA Purchase Preferred Stock w/Warrants 

11/21/2008 Associated Banc-Corp Green Bay WI Purchase Preferred Stock w/Warrants 

11/21/2008 Trustmark Corporation Jackson MS Purchase Preferred Stock w/Warrants 

11/21/2008 First Community Corporation Lexington SC Purchase Preferred Stock w/Warrants 11/21/2008 Taylor Capital Group Rosemont IL Purchase Preferred Stock w/Warrants 

11/21/2008 Nara Bancorp, Inc. Los Angeles CA Purchase Preferred Stock w/Warrants 

TOTAL $

1/ Settlement deferred pending merger

KEY

Date When payment is authorizedSeller Name, City and State of Qualified InstitutionTransaction Type Purchase or SaleDescription e.g. Preferred Stock w/Warrants, Preferred Stock w/Senior DebtPrice Paid Total Purchase Amount Pricing Mechanism e.g. Priced at par, auction price
Name of Institution City State

11/25/2008 AIG New York NY Purchase Preferred Stock w/Warrants $4

KEY

Date When payment is authorizedSeller Name, City and State of Qualified InstitutionTransaction Type Purchase or SaleDescription e.g. Preferred Stock w/Warrants, Preferred Stock w/Senior DebtPrice Paid Total Purchase Amount Pricing Mechanism e.g. Priced at par, auction price

SYSTEMICALLY SIGNIFICANT FAILING INSTITUTION

Transaction Report

Seller

Date Transaction Type Description

Updated on November 26, 2008; 4:30 PM