Exhibit
10(5)


 


American International Group, Inc.

2013 Short-Term Incentive Plan


As Amended
September 9, 2014


1.                 
Purpose 


The purpose of the American International Group, Inc. 2013
Short-Term Incentive Plan (the “Plan”) of the American International
Group, Inc. (“AIG” and together with its consolidated subsidiaries, the
“Company”) is to strengthen our pay-for-performance culture by rewarding
employees for overall AIG, “Business/Functional Segment” and individual
performance during the Performance Year (as defined in Section 3 below) and to
provide the Company with effective means of attracting, retaining and
motivating employees and encouraging the continued commitment of participants
on behalf of the Company and its Business/Functional Segments.  Incentive Awards
under the Plan will be in the form of cash. Capitalized terms not otherwise
defined herein shall have the meaning set forth in the Glossary of Terms set
forth in Appendix C. 


2.                 
Eligibility 


All full and part-time employees of the Company, excluding
external contractors, independent contractors, temporary workers and
independent agents (the “Participants”) are eligible to participate in
the Plan, unless the employee is a participant in another variable pay or sales
plan that the business has determined is in lieu of the Plan during the
Performance Year. Being eligible for any bonus plan that is required to be
provided under local law shall not cause an employee who satisfies the
definition above to lose eligibility for this Plan (unless the business expressly
elects to so exclude such employee). Subject to Sections 7 and 11 and Appendix
B, in order to be eligible to be a Participant in this Plan for a Performance
Year, the employee must be employed by the Company in the Performance Year.
Employees who have an employment contract with AIG or its subsidiaries for
ongoing employment of unlimited duration and that is not confined to a
specific, finite project will not be excluded from being eligible to
participate in this Plan.


3.                 
Performance Year


The Plan will operate for successive one calendar year
(January 1 – December 31) periods (each, a “Performance Year”) until the
Plan is terminated by the CMRC (as defined in Section 4 below). The first
Performance Year will be from January 1, 2013 through December 31, 2013.


4.                 
Funding Approval and Plan Administration


A.                
In General


The aggregate Funding of the Plan (the amount that
represents the sum of the Business/Functional Segment Short-Term Incentive
Pools) is approved by the members of the Compensation and Management Resources
Committee of AIG’s Board of Directors (the 







 


















 








“CMRC”).
Compensation Center of Excellence (“Compensation COE”) under the
direction of the Operating Committee then allocates portions of the Funding to
each of the Business/Functional Segments (the “Business/Functional Segment
Funding”). 


B.                
Funding Approval


The Funding approval process begins with an assessment by
the CMRC of the Company’s overall performance against pre-determined goals and
objectives. Next, the CMRC determines how each Business/Functional Segment
performed against its pre-determined goals. If a Business/Functional Segment’s
performance exceeded its pre-determined goals, funding of the
Business/Functional Segment’s Short-Term Incentive Pool above 100% will only be
permitted if the Company’s overall performance meets or exceeds the minimum
threshold of the Company’s goals and objectives.


The CMRC determines the performance metrics and a
threshold, target and maximum achievement level for each metric within the
first ninety (90) days of a Performance Year.  For Business/Functional Segments
that are business units, the performance metrics are specific to the business
unit. For Business/Functional segments that are the global functional units,
the performance metrics are a mix of AIG and functional unit metrics. Following
the end of the Performance Year, the CMRC will measure and certify performance
against the performance metrics.  The CMRC’s assessment of performance against
the pre-determined goals will be expressed in the form of a “Modifier” ranging from
0% to 125%.  The Modifier will be determined based upon whether performance is
at minimum, target or maximum achievement levels.  Each Business/Functional
Segment may be assigned a Modifier that, when applied to the targeted amount of
the Short-Term Incentive Pool for that Business/Functional Segment, will be
used to establish the Business/Functional Segment’s Short-Term Incentive Pool.
Once the process described above is complete, the CMRC will approve the
aggregate Funding at the Company level.  


Additionally, final pool sizes are subject to adjustment
at the discretion of the Operating Committee and the CMRC to ensure that the
Plan rewards all Participants appropriately and in the intended manner.


Excluded from the Funding are any guaranteed bonuses pursuant
to an individual offer letter or employment agreement.


C.                
Plan Administration


The Plan is administered by the CMRC who, in its sole
discretion and subject to Section 22, may allocate among its members and
delegate to any person who is not a member of the CMRC any of its powers,
responsibilities or duties under the Plan, including, but not limited to, the
Senior C&B Executive and the Compensation COE. The CMRC will have the power
to construe, interpret and implement this Plan, to make rules for carrying out
its purposes and to make all other determinations in connection with its
administration, all of which will, unless otherwise determined by the CMRC, be
final, binding and conclusive.


 







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5.                 
Individual Participant Target and Performance Measurement


For each Performance Year, each Participant will be
assigned an annual “Incentive Target Amount” by the CMRC or the
applicable Business/Functional Segment in which the Participant is Employed,
expressed as a flat local currency amount, which takes into consideration the
Participant’s job grade, business, local market, job scope, responsibilities
and experience. The Participant’s performance during the Performance Year will
be determined by the CMRC or the applicable Business/Functional Segment in
which the Participant is Employed in accordance with Appendix A (the “Performance
Measurement Methodology”), which will result in a Relative Performance
Rating (“RPR”) for the Participant and an Incentive Opportunity Percent
that corresponds to the RPR.


6.                 
Calculation of Incentive Payment/Determination of Awards


A.                
As described in this Section 6, each Participant’s Incentive
Award Recommendation will take into account the Participant’s RPR, the
Incentive Target Amount, the Incentive Opportunity Range as described in
Appendix A and the Short-Term Incentive Pool that was approved for the
Participant’s Business/Functional Segment as outlined in Section 4B.


B.                
Subject to the Funding limit described in Section 4, once the
Participant’s performance has been determined, the CMRC or the Participant’s
manager, as applicable, uses discretion, taking into account the Participant’s
RPR, to multiply the Participant’s Incentive Target Amount by the Incentive
Opportunity Percent to arrive at the Participant’s Incentive Award
Recommendation. The Participant’s Incentive Award Recommendation will then be
adjusted by the applicable Modifier that was determined in Section 4B.
Following the application of the Modifier, the CMRC or the Participant’s
manager, as applicable, has the discretion to further revise the Participant’s
Incentive Award Recommendation. In the event an individual is hired after the
Performance Year commences, the individual may become a Participant in the Plan
and be assigned an annual Incentive Target Amount which is based on the job
grade, business, local market, job scope, responsibilities for the position, as
well as the Participant’s experience; provided, however, the amount of the
Incentive Award may be pro-rated to reflect the portion of the Performance Year
that such Participant worked for the Company.


C.                
The total Incentive Award Recommendations (after each has been
adjusted by the applicable Business/Functional Segment Modifier) must not
exceed the Funding approved by the CMRC pursuant to Section 4B. The CMRC or the
applicable Business/Functional Segment is responsible for allocating awards
among the Participants based on the applicable Business/Functional Segment’s
Short-Term Incentive Pool in accordance with the guidelines set forth in
Appendix A.


D.                
The Compensation COE will conduct validation analyses to
determine that the Plan is generally operated in accordance with the
Performance Measurement Methodology in Section 5 and Appendix A, and in
accordance with paragraphs 6A and 6B as well as to determine whether the
Incentive Award percentages are differentiated for each RPR level as a whole in
accordance with the range for that level. It will also prepare an exception
report for the Operating Committee’s review.


 







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E.                 
Aggregate Business/Functional Segment recommendations are
presented to the CMRC for approval no later than March 31st following the
Performance Year. On such date or dates following such CMRC approval as the
CMRC determines in its sole discretion, but no later than April 30th following
the Performance Year (the “Award Date”), each Participant will be
granted an Incentive Award equal to the Participant’s final Incentive Award
Recommendation as adjusted by the applicable Modifier, payable pursuant to
Section 7. The CMRC expressly reserves the right not to pay an Incentive Award
to any, some or all Participants for a Performance Year.


7.                 
Vesting; Payout of Incentive Award


A Participant must be Employed by
the Company on the Award Date to be eligible to receive his or her Incentive
Award except to the extent provided in Section 11 and Appendix B. Each
Incentive Award will be fully-vested on the Award Date. Except as provided in
the paragraph below, Incentive Awards will be paid 100% in cash on the Award
Date.  


Prior to March 31 of a
Performance Year, the CMRC may determine that all or a specified percentage of
a Participant’s Incentive Award will be a “Deferred Award,” in which
case such Incentive Award will be paid in cash on March 1 of the year following
the year in which the Award Date occurs. For the 2013 Performance Year, 50% of
Incentive Awards for Participants in grade level 27 and above will be Deferred
Awards.


To the extent a Participant does
not receive a payment for a Performance Year on or before March 15 of the
calendar year following the year in which the Award Date occurs, the
Participant shall forfeit all rights to payment.


8.                 
Limitation of Incentive Payment under Certain Conditions


In the event any Incentive Award payment received or to be
received by any Participant under this Plan would be subject to the excise tax
imposed by Section 4999 of the Code or any similar or successor provision to
Section 4999 (the “Excise Tax”) then, at the discretion of the Chief
Human Resources Officer such Incentive Award payment shall be reduced up to the
largest amount which would result in no portion of the Incentive Award payment
being subject to the Excise Tax. The determination of any such reduction
pursuant to this Section 8 will be made by the Senior C&B Executive and
such determination will be conclusive and binding upon the Company, the
Participant, the Senior C&B Executive and the CMRC for all purposes.


9.                 
Plan Termination/Amendment


The Plan may be amended or modified, with or without prior
notification of the Participants, at any time in the sole discretion of the
CMRC. The Plan will continue until suspended or terminated by the CMRC in its
sole discretion; provided that all Incentive Awards made under the Plan
before its suspension or termination will remain in effect until such awards
have been satisfied or terminated in accordance with the terms and provisions
of the Plan and the applicable award. Notwithstanding the foregoing, the CMRC’s
rights and powers to amend the Plan shall be delegated the Senior C&B
Executive who shall have the right to amend the Plan with respect to (i)
amendments required by relevant law, regulation or ruling, (ii) amendments that
are not expected to have a material financial impact on the Company, (iii)
amendments that can 







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reasonably be characterized as
technical or ministerial in nature or (iv) amendments that have previously been
approved in concept by the CMRC. Notwithstanding the foregoing delegation, the Senior
C&B Executive shall not have the power to make an amendment to the Plan
that could reasonably be expected to result in a termination of the Plan or a
change in the structure or the powers, duties or responsibilities of the CMRC,
unless such amendment is approved or ratified by the CMRC.


10.             
Effective Date


The Plan is effective as of the 2013 Performance Year, and
will continue thereafter until terminated by the CMRC; provided, however, that
the existence of the Plan at any time or from time to time does not guarantee
or imply the payment of any Incentive Awards hereunder, or the establishment of
any future plans or the continuation of this Plan.


11.             
Termination of Employment/Breaks in Service


In the event (i) a Participant’s Employment terminates
during the Performance Year or prior to the Award Date, or (ii) a Participant
is Employed, but not actively performing services for the Company for a portion
of the Performance Year, or on the actual payment date of an Incentive Award,
for certain reasons specified in Appendix B, the amount of an Incentive Award,
if any, that the Participant will receive and payment thereof will be determined
(and, if applicable, modified) in accordance with Appendix B.


In the event a Participant is involuntarily Terminated
without Cause pursuant to Appendix B, AIG will require the Participant to
execute a release, as described below, in order to impose restrictive covenants
requiring confidentiality of information, non-disparagement and
non-solicitation of Company employees for 12 months following Termination
without Cause as a condition to receiving payment of all or a portion of the
Incentive Award. Such release shall be the release required by the severance
plan or program applicable to the Participant’s Termination without Cause;
provided, however, to the extent that no such established severance plan or
program is deemed applicable by the CMRC, with respect to any Participant under
the purview of the CMRC, or the Senior C&B Executive, with respect to any
other Participant, or their delegate(s), in each case, in its or his or her
sole discretion, then the release shall be a release generally in the form set
forth in Appendix D, subject to any provisions that the Senior HR Attorney and
the Senior C&B Executive or their delegate(s) may amend or add to the
release. Such release must be executed by the Participant, submitted to the
Company and become irrevocable prior to the date on which any Incentive Award
shall be paid, but in no event shall the release be executed later than March
10th of the year following the year in which the Termination without
Cause occurred; provided that if the release is executed after such time, the
payment with respect to such Incentive Award will be forfeited; provided,
further, that if the local laws of a country or non-U.S. jurisdiction in which
Participant performs services would not permit all or a portion of the release
in Appendix D to be structured or executed in the applicable form attached
hereto, the Senior HR Attorney and the Senior C&B Executive or their
delegate(s) shall have the discretion to create a release that incorporates as
much of the Appendix D release as possible, while also complying with such
local laws.


 







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12.             
Taxes 


The Company will comply with all applicable tax reporting,
withholding and other requirements globally with respect to amounts paid under
this Plan, in amounts and in a manner determined in the sole discretion of the
Company. As a condition to the payment of any amount under this Plan, or in
connection with any other event related to this Plan, that gives rise to a
federal or other governmental tax withholding obligation (1) the Company may
deduct or withhold (or cause to be deducted or withheld) from any payment to a
Participant whether or not pursuant to this Plan or (2) the CMRC will be
entitled to require that the Participant remit cash to the Company (through
payroll deduction or otherwise), in each case, in an amount sufficient in the
opinion of the Company to satisfy such withholding obligation.


13.             
Effect on Benefit Plans


The Incentive Award payment is deemed compensation under
certain of the Company’s compensation and benefit plans, but it is not deemed
compensation for other programs; provided, however that for purposes of the
Company’s benefit programs, this Plan will be deemed a short-term incentive,
annual, year-end bonus program. The Summary Plan Description and plan summaries
of each of the Company’s compensation and benefit plans will govern whether and
the extent to which the Incentive Award payment will affect the Participant’s
benefits under such plans, and the Company reserves the right to amend those
compensation and benefit plans at any time.


14.             
Other Payments or Awards


Nothing contained in the Plan will be deemed in any way to
limit or restrict the Company from adopting or continuing in effect any
compensation arrangements or making any award or payment to any person under
any other plan, arrangement or understanding, whether now existing or hereafter
in effect.


15.             
Governing Law; Section 409A


The Plan will be governed and enforced in accordance with
the appropriate country and local regulations. With respect to Participants
working in the United States, this Plan will be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflict of laws.


The Plan shall also be subject to all applicable non-U.S.
laws as to Participants located outside of the United States. In the event that
any provision of this Plan is not permitted by the local laws of a country or
jurisdiction in which a Participant works, such local law shall supersede that
provision of this Plan with respect to that Participant. The Senior HR Attorney
and the Senior C&B Executive or their delegate(s) shall have the discretion
to operate the Plan with respect to such Participant in a manner that
incorporates as much of the Plan’s current terms as possible while also
complying with such local laws.


Each
payment made under the Plan shall be deemed to be a separate payment for
purposes of Section 409A, and amounts payable shall be deemed not to be a
“deferral of compensation” subject to Section 409A to the extent provided in
the “short-term deferral” exception in Treasury 







                                                                             -6-




 


















 








Regulation
Section 1.409A-1(b)(4). For the avoidance of doubt, all Incentive Awards under
the Plan are intended to satisfy such short-term deferral exception. To the
extent any payment under the Plan constitutes “deferred compensation” subject
to Section 409A, the Plan will be interpreted, administered and construed to
comply with Section 409A with respect to such payment. The CMRC will have
full authority to give effect to the intent of this paragraph of Section 15.


16.             
No Right of Employment


Nothing in this Plan will be construed as creating any
contract of employment or conferring upon the Participant any right to continue
in the employ or other service of the Company, or any of its subdivisions or
subsidiaries, or limit in any way the right of the Company to change such
Participant’s compensation or benefits or to terminate the employment or other
service of such Participant with or without cause.


17.             
Section Headings


The section headings contained herein are for convenience
only, and in the event of any conflict, the text of the Plan, rather than the
headings will control.


18.             
Severability 


If any term or provision contained herein is finally held
to be, to any extent, invalid, illegal or unenforceable (whether in whole or in
part), such provision will be deemed modified only to the extent of such
invalidity, illegality or unenforceability and the remaining provisions will
not be affected thereby.


19.             
Entire Understanding


The Plan contains the entire understanding of the Company
and the Participants with respect to the subject matter thereof and supersedes
all prior promises, covenants, arrangements, agreements, communications,
representations and understanding between the Company and the Participant.


20.             
Successor and Assigns


The terms of this Plan will inure to the benefit of the
Company and any successor entity.


21.             
Repayment and Clawback


Notwithstanding anything to the contrary herein, in
consideration of the grant of an Incentive Award, the award and any payments
under this Plan will be subject to forfeiture and/or or repayment to the extent
provided for in the AIG Clawback Policy, as in effect from time to time.


22.             
Subject to Any AIG Section 162(m) Plan


AIG may, in any year, propose a Section 162(m) compliant
performance incentive award plan (the “AIG Section 162(m) Plan”). If an
AIG Section 162(m) Plan is proposed and approved by 







                                                                             -7-




 


















 








the
AIG stockholders in accordance with Section 162(m)(4)(C) of the Code and
Treasury Regulation Section 1.162‐27(e)(4), this Plan will function as a
sub-plan under the AIG Section 162(m) Plan, whereby performance compensation
amounts payable under the AIG Section 162(m) Plan can be paid in part by
accruing awards with respect to a Performance Period.


23.       No Funding


The Company will be under no obligation to fund or set
aside amounts to pay obligations under this Plan. A Participant will have no
rights to awards or other amounts under this Plan other than as a general,
unsecured creditor of the Company.
















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             Appendix A








Performance Measurement
Methodology for Assessing a Participant’s Performance


For each Performance Year, each Participant’s Incentive
Target Amount will be determined generally based on the Participant’s job
grade, business, local market, job scope, responsibilities and experience. The
actual Incentive Award Recommendation (above or below target) is determined
through a performance management process which measures and rewards an
employee’s performance against a “peer performance group.” A Participant’s peer
performance group consists of employees in similar job grades, functions and
levels of responsibility within and across Business/Functions. Through
“Roundtable” discussions (discussions among supervisors of those who are
members of a peer performance group), a Participant’s performance is discussed
and measured against the others in the peer performance group, and each
Participant is ultimately assigned a RPR. The RPR levels, descriptions
and distribution percentages set forth in chart below may be amended from time
to time in the sole discretion of the CMRC.


Each RPR level has a guideline Incentive Opportunity
Range, as described in the table below, generally to be used as a guideline by
management in determining an Incentive Opportunity Percent that will be
applied, based on management discretion, to the Participant’s Incentive Target
Amount to calculate the Incentive Award Recommendation. The RPR guidelines
assist the CMRC and/or manager in allocating incentive amounts among eligible
employees.


Only a limited percentage of employees within a
performance peer group may be assigned to each RPR level, and generally each
performance peer group will achieve optimal distribution of ratings, as is set
forth in the table.












                                                                                


















             Appendix A

(continued)








 


Performance Rating Descriptions and Incentive Opportunity
Guidelines






	
  RPR Category & Opportunity Guidelines*

  	
  Description

  	
  Distribution of Ratings*

  
	
  Top Performance (1) 

  Incentive Opportunity Range %:

  130% - 150%

  	
  Relative Performance
  Rating Consistently exceeded goals
  and objectives relative to peer group to achieve superior results and
  contributions. Evidence of superior peer group contribution to achieving
  business unit, function, group and Company objectives.

  	
  10% of 

  Peer Group

  
	
  Excellent Performance (2) 

  Incentive Opportunity Range %: 

  120% to 140%

  	
  Relative Performance
  Rating Consistently exceeded
  performance standards and expectations relative to peer group to achieve
  strong results and contributions.

  	
  20% of 

  Peer Group

  
	
  Solid Performance (3) 

  Incentive Opportunity Range %:

  80% to 120%

  	
  Relative Performance
  Rating Consistently met performance
  standards and expectations relative to peer group to deliver results.

  	
  50% of 

  Peer Group

  
	
  Developmental Performance (4) 

  Incentive Opportunity Range %: 

  20% to 80%

  	
  Relative Performance
  Rating Inconsistently met
  performance standards and expectations relative to peer group; and/or limited
  contribution relative to peer group in achieving Business/Functional unit,
  function and/or Company objectives.

  	
  20% of 

  Peer Group

  
	
  Unsatisfactory Performance (5)

  Incentive Opportunity Range %:

  0%

  	
  Relative Performance
  Rating Did not perform to the
  performance standard of his/her peer group.

  
	
  New to Company – 

  (too soon to rate) 

  Incentive Opportunity Range %:

  80% to 120%

  	
  All new employees who are
  new to the Company after June 30th will be excluded from
  the current year’s RPR process.

  	
   

  





 


*    AIG has the discretion to change these percentages from
time to time.
















                                                                                


















             Appendix B








Treatment of Incentive Award Upon
Various Types of Breaks in Service or

Terminations of Employment


	
   Type of Break
   in Service or Termination of Employment

   	
   Amount the
   Participant Receives

   
	
  Short-Term & Long-Term Medical Leaves of Absence
  

  (STD & LTD)

  Family Medical & Domestic Partner Leave

  Non-Medical Leave of Absence

  (Personal Leave)

  Military Leave of Absence

  	
  If a Participant is on an
  approved leave of absence during which the Participant is receiving salary
  continuation from a Company payroll (a “Paid Leave of Absence”), such Paid
  Leave of Absence will not be deemed a break a service or a termination of
  employment for purposes of this Plan. Time on a Paid Leave of Absence will be
  treated the same as time during which the Participant performs services for
  the Company.

   

  If a Participant is on an
  approved leave of absence during which the Participant is NOT receiving
  salary continuation from a Company payroll, including a period of long term
  disability leave during which a Participant may be receiving long term
  disability insurance payments from a long term disability insurer (an “Unpaid
  Leave of Absence”), their Incentive Award will be prorated based on the
  number of months during the Performance Year that the Participant was
  actively employed or on a Paid Leave of Absence with the Company, but will
  not include the number of months that the Participant was on an Unpaid Leave
  of Absence.

   

  Incentive Awards are paid
  on the Normal Schedule.

   

  
	
  Retirement

  	
  During the Performance
  Year:  If the Termination occurs after March 31st and before the end
  of the Performance Year, the Incentive Award is prorated based on the number
  of months during the Performance Year that the Participant was actively
  employed or on a Paid Leave of absence with the Company and the amount of the
  Incentive Award is based on 100% of the Incentive Target Amount for the Participant
  for such Performance Year and actual performance of the applicable
  Business/Functional Segment as determined by the CMRC. Paid on the Normal
  Schedule. If the last day worked occurs on or before March 31st,
  the Participant will not receive any pro-rated Incentive Award payment for
  the current Performance Year.

   

  After the End of the
  Performance Year but prior to the Award Date:  If a Participant Retires after the end of
  the Performance Year, the Incentive Award is not prorated, but is paid in
  full based on individual and business or global function performance for such
  Performance Year. Paid on the Normal Schedule.

   

  
	
  Death

  	
  If a Participant Dies
  While Actively Employed or on a Paid Leave of Absence:

  During the Performance
  Year:  If the date of death occurs after March 31st and before the
  end of the Performance Year, the Incentive Award is prorated based on the
  number of months during the Performance Year that
  the Participant was actively employed or on a Paid Leave of Absence with the
  Company and the amount of the Incentive Award is based on 100% of Incentive
  Target Amount for the Participant for such Performance Year. Paid as soon as
  administratively possible after the date of death, but in no event later than
  March 15th following such Performance Year. If the date of death
  occurs on or before March 31st, the Participant will not receive
  any pro-rated Incentive Award payment for the current Performance Year.

   

  After the End of the
  Performance Year but prior to the Award Date:  If a Participant dies after the end of the
  Performance Year, the Incentive Award is not prorated, but is paid 100% of
  the Incentive Target Award in effect on the date of death. Paid as soon as
  administratively possible after the date of death, but in no event later than
  March 15th following the year in which the death occurred.

  
	
  Resignation, Voluntary Quit, Constructive Discharge

  	
  If the last day worked is
  prior to the Award Date, Incentive Award is forfeited.  

  
	
  Involuntary Termination without Cause

   

  	
  During the Performance
  Year or After the Performance Year but prior to the Award Date:    

  For Participants in the
  2012 Executive Severance Plan, paid in accordance with such plan.  

   

  For other Participants,
  payable pursuant to the AIG, Inc. Severance program, or other severance
  arrangement applicable to such termination as follows:  If the last day
  worked occurs after March 31st and before the end of the Performance Year,
  the Incentive Award is prorated based on the number of months during the
  Performance Year that the Participant was actively employed or on a Paid
  Leave of absence with the Company and the amount of the Incentive Award is
  based on 80% of the Incentive Target Amount for the Participant for such
  Performance Year and actual performance of the applicable Business/Functional Segment as determined by the
  CMRC. Paid on the Award Date (but no
  later than March 15th following the Performance Year).

   

  To the extent there is an
  inconsistency between this Plan and the applicable severance program, the
  severance program will prevail. To the extent the CMRC, with respect
  to any Participant under the purview of the CMRC, or the Senior C&B
  Executive, with respect to any other Participant, or their delegate(s), in
  each case, in its or his or her sole discretion
  determines that no established severance program or arrangement is applicable
  to a Participant’s Termination without Cause, then, in accordance with
  Section 11, the Participant will need to execute a release generally in the
  form set forth in Appendix D, subject to any provisions that the Senior HR
  Attorney and the Senior C&B Executive, or their delegate(s) may amend or
  add to the release.

  












                                                                                


















 




 








Glossary of Terms


AIG – The American International Group, Inc.


American International Group, Inc. Short-Term Incentive
Plan (the “Plan”) – this plan (also referred to as “Compensation Plan
483”).


Breaks in Service –  Refers to the cessation
of actively performing services for the Company, either on a temporary or
permanent basis. Included are: Resignation, Termination, Leaves of Absence,
Retirement, and Death. See Appendix B.


Business/Functional Segments – business unit
segments and functional unit segments approved by the CMRC, each of which has
its own performance metrics and funding.  For example, business unit segments
for 2013 are Property Casualty, Life & Retirement and United Guaranty
Corporation, and the functional unit segments for 2013 are Investments &
Financial Services; Chief Administrative Office; Communications; Enterprise
Risk Management; Global Finance; Global Legal, Regulatory & Compliance;
Internal Audit Division; Human Resources and Operations & Systems. 
Functional unit segments are established on a global basis and include any
employees who work within the function either at the parent or any subsidiary
level.


Business/Functional Segment Short-Term Incentive Pool
– the funding allocated to each discreet Business/Functional Segment based on
actual performance as measured against pre-established metrics. As noted above,
any employees who work within a functional unit either at the parent or any
subsidiary level, on a global basis, will participate in the global Business/Functional
Segment Short-Term Incentive Pool applicable to that functional unit,  not the pool
applicable to the subsidiary or entity that employs them or for which they
work.


CMRC – the AIG Compensation and Management
Resources Committee of the Board of Directors.


Code – the U.S. Internal Revenue Code of 1986, as
amended.


Compensation COE – the Compensation Center of Excellence.


Company – American International Group, Inc. and
its consolidated subsidiaries.


Disability – means a Participant, who after
receiving short term disability income replacement payments for six months, is
(i) determined to be disabled in accordance with AIG’s long term disability
plan in which employees of AIG are generally able to participate, if one is in
effect at such time, to the extent such disability complies with
26 C.F.R. §1.409A-3(i)4(i)(B), or (ii) to the extent such Participant
is not participating in AIG’s long term disability plan, or no such plan
exists, is determined to have medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months as determined by AIG’s long
term disability insurer or the department or vendor directed by AIG to
determine eligibility for unpaid medical leave.


Employed and Employment – means (a) actively
performing services for the Company, (b) being on a Company approved leave
of absence whether paid or unpaid, or (c) receiving long 







              


















                                                                      Appendix

C








term
disability benefits for up to three years from the date short term disability
leave commenced, in each case while in good standing with the Company.


Funding – the total funding for all the
Business/Functional Segments as described in Section 4 and any additional
unallocated funds approved by the CMRC.


Incentive Award – the amount that will be paid
under this Plan to a Participant with respect to a Performance Year.


Incentive Award Recommendation – the amount that
the CMRC or management recommends that a Participant’s Incentive Award should
be, and will be calculated by multiplying the Incentive Opportunity Percent by
the Participant’s Incentive Target Amount.


Incentive Opportunity Percent – the percent that
the CMRC or a Manager selects generally based on the Incentive Opportunity
Range applicable to a Participant and that is communicated to the Participant
by the CMRC or the Manager that will be multiplied against the Participant’s
Incentive Target Award to determine a Participant’s Incentive Award
Recommendation for a Performance Year.


Incentive Opportunity Range – represents the
guideline opportunity for each Participant with a given RPR to receive a
percentage of the Participant’s Incentive Target Award.


Incentive Target Amount – For each Performance
Year, each Participant will be assigned a targeted  incentive award amount
generally based on the job grade for the Participant’s position, as well as the
Participant’s business, local market, job scope, responsibilities and
experience. The Participant’s Incentive Award Recommendation will generally
fall within the Incentive Opportunity Range established for each performance
category, and may be at, above, or below the Incentive Target Amount.


Modifier – is the adjustment factor (expressed as a
percentage) that expresses, relative to 100% (from 0% to 125%), the performance
of a Business/Functional Segment, as determined by the CMRC.  For the avoidance
of doubt, a Modifier for a functional unit segment may be based, in whole or in
part, on the performance of such functional unit segment and/or the performance
of one or more business unit segments.


Normal Schedule – means the date specified in
Section 7 that an Incentive Award would otherwise have been paid if the
Participant had continued to remain Employed by the Company.  For the avoidance
of doubt, the Normal Schedule for a Deferred Award is March 1 of the year
following the year in which the Award Date occurs.


Operating Committee – the group of senior
executives selected by the President and CEO to be a member of this
deliberative group. 


Paid Leave of Absence - an approved leave of
absence during which the Participant is receiving salary continuation from a
Company payroll.


Participants – all employees eligible to
participate.









                                                                                


















 




 








Peer Group – a group of
employees with similar job grades, roles and levels of responsibility. During a
Roundtable discussion, the individual’s performance is compared to that of
others in the defined peer group.


Performance Measurement Methodology – the
methodology used to determine each Participant’s Incentive Award, discussed in
more detail in Appendix A.


Pro-Rated – any amount to be pro-rated under this
Plan will be multiplied by a fraction, the numerator of which is the number of
months (rounding up for partial months) during the Performance Year that the
Participant actively performed services for the Company (including any period
designated by the Company as Working Notice) or was on short-term disability
leave (including parental leave), and the denominator of which is the number of
months in the Performance Year.


RPR – the Relative Performance Rating is an
individual’s performance rating compared to a peer performance group, as
measured through the Performance Management Process, discussed in more detail
in Appendix A.


Retirement – means, solely for purposes of this
Plan, (i) in the United States, voluntary Termination initiated by the
Participant (while such Participant is in good standing with the Company) (x)
on or after age 60 with five years of service or (y) on or after age 55 with 10
years of service, and (ii) outside of the United States, a Participant’s 
termination of employment after the Participant has achieved certain service
and/or age milestones in accordance with the local policy on retirement for the
entity that employs such Participant.


Roundtable – a forum where managers come together
to review and discuss employee performance and determine how the performance of
individual employees compares to the performance of peers. The goal of the
Roundtables is to identify the individuals who will be rated into the
performance categories set forth in Appendix A.


Section 409A – Refers to Section 409A of the Code,
including any amendments or successor provisions to that section, and any
regulations and other administrative guidance.


Senior C&B Executive --
means
the Company’s most senior executive whose responsibility it is to oversee both
the Corporate Compensation Department and the Corporate Benefits Department.  In the event that no individual holds such position,
“Senior C&B Executive” will instead refer to the Company’s most senior
executive whose responsibility it is to oversee the global Human Resources
Department.


Senior HR Attorney --  means
the Company’s most senior attorney whose responsibility it is to oversee Human
Resource/employment matters.


Short-Term Incentive Pool – the total amount
approved to be paid as short-term Incentive Awards to Participants in the Plan.


Termination – With respect to a Participant, means
the cessation of the Participant’s Employment with the Company.









             


















 




 








Termination Without Cause
– means involuntary Terminations due to reduction in force, position
elimination, or office closing.


Unpaid Leave of Absence - an approved leave of
absence during which the Participant is not receiving salary continuation from
a Company payroll, including a period of long term disability leave during
which a Participant may be receiving long term disability insurance payments
from a long term disability insurer.


 
















             


















 




 








Form of Release Referred to in
Section 11 of the Plan


NOT personalized to each Participant.


(1)              
[Employee Name] (“Employee”), for good and sufficient
consideration, the receipt of which is hereby acknowledged, hereby waives and
forever releases and discharges any and all claims of any kind Employee may
have against American International Group, Inc., its affiliate or subsidiary
companies, or any officer, director or employee of, or any benefit plan
sponsored by, any such company (collectively, the “Released Parties”)
which arise from Employee’s employment with any of the Released Parties or the
termination of Employee’s employment with any of the Released Parties.
[Specifically, but without limiting that release, Employee hereby waives any
rights or claims Employee might have pursuant to the Age Discrimination in
Employment Act of 1967, as amended (the “Act”) and under the laws of any and
all jurisdictions, including, without limitation, the United States. Employee
recognizes that Employee is not waiving any rights or claims under the Act that
may arise after the date that Employee executes this Release.] Nothing herein
modifies or affects any vested rights that Employee may have under the
[American International Group, Inc. Retirement Plan, or the American
International Group, Inc. Incentive Savings Plan] [and other plans
applicable to Employee]; nor does this Release confer any such rights,
which are governed by the terms of the respective plans (and any agreements
under such plans).


(2)              
Employee acknowledges that Employee has not filed any complaint, charge,
claim or proceeding, if any, against any of the Released Parties before any
local, state or federal agency, court or other body (each individually a “Proceeding”).
Employee represents that Employee is not aware of any basis on which such a
Proceeding could reasonably be instituted.


(3)              
Confidentiality/Non-Disclosure. During the term of Employee’s
employment, the Company permitted Employee to have access to and become
acquainted with trade secret information of a confidential, proprietary or
secret nature. Subject to and in addition to any confidentiality or
non-disclosure requirements to which Employee was subject prior to the date the
Employee executes this Release, effective as of the date Employee executes this
Release, Employee acknowledges and agrees that (i) all confidential,
proprietary, trade secret information received, obtained or possessed at any
time by Employee concerning or relating to the business, financial,
operational, marketing, economic, accounting, tax or other affairs at the
Company or any client, customer, agent or supplier or prospective client,
customer, agent or supplier of the Company will be treated by Employee in the
strictest confidence and will not be disclosed or used by Employee in any
manner without the prior written consent of the Company or unless required by
law, and ii) Employee  has not during the term of Employee’s employment and
will not remove or destroy any such confidential information.


(4)              
Non-Solicitation. Employee acknowledges and agrees that Employee’s
employment with the Company required exposure to and use of confidential trade
secret information (as set forth in Paragraph 3). Subject to and in addition to
any non-solicitation requirements to which Employee was subject prior to the
date Employee executes this Release, effective as of the date Employee executes
this Release, Employee acknowledges and agrees that (i) Employee will not,
directly or indirectly, on Employee’s own behalf or on behalf of any other
person or entity solicit, contact, call upon, communicate with or attempt to
communicate with 







             


















             Appendix D








any customer or client or prospective
customer or client of the Company where to do so would require the use or
disclosure of trade secret information, and (ii) for a period of one (1) year
after employment terminates for any reason, Employee will not solicit or in any
manner encourage or provide assistance to any employee, consultant or agent of
the Company to terminate his or her employment or other relationship with the
Company or to leave its employ or other relationship with the Company for any
engagement in any capacity or any other person or entity.


(5)              
Non-Disparagement. Employee acknowledges and agrees that Employee will
not disparage AIG or any of its subsidiaries or affiliates or any of their
officers, directors or employees to any person or entity not affiliated with
AIG; provided, however, that nothing herein prohibits the Employee from giving
truthful testimony as required by law.


(6)              
Employee agrees that AIG’s remedies at law for a breach or threatened
breach of Section 3, 4 and 5 of this Release would be inadequate.  In
recognition of this fact, Employee agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, AIG, without posting
any bond, shall be entitled to obtain equitable relief from a court of
competent jurisdiction the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which
may then be available in the event of a breach or threatened breach of such
provision.


(7)              
[Employee acknowledges and understands that Employee is hereby being
advised to consult with an attorney prior to executing this Release. Employee
also acknowledges and understands that Employee has twenty-one (21) days to
consider the terms of this Release before signing it. However, in no event may
Employee sign this Release before Employee’s termination date.]


(8)              
[Upon the signing of this Release by Employee, Employee understands that
Employee shall have a period of seven (7) days following Employee’s signing of
this Release in which Employee may revoke this Release. Employee understands
that this Release shall not become effective or enforceable until this seven
(7) day revocation period has expired, and that neither the Released Parties
nor any other person has any obligation [pursuant to the American International
Group, Inc. Short-Term Incentive Plan] until eight (8) days have passed since
Employee’s signing of this Release without Employee having revoked this
Release. If Employee revokes this Release, Employee will be deemed not to have
accepted the terms of this Release.]


(9)              
Any dispute arising under this Release shall be governed by the [law of
the State of New York], without reference to the choice of law rules that would
cause the application of the law of any other jurisdiction.


 


	
   

  	
   

  	
   

  
	
  
   

  

  	
   

  	
  
   

  

  
	
   

  	
   

  	
   

  
	
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  [Employee]