THAT SHALL CONTAIN SUCH PROVISIONS AND
CONDITIONS AS THE COMMITTEE DEEMS APPROPRIATE; PROVIDED THAT, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN AN AWARD AGREEMENT, IF THERE IS ANY CONFLICT
BETWEEN ANY PROVISION OF THIS PLAN AND AN AWARD AGREEMENT, THE PROVISIONS OF
THIS PLAN SHALL GOVERN.
BY ACCEPTING AN AWARD PURSUANT TO THIS PLAN, A
PARTICIPANT THEREBY AGREES THAT THE AWARD SHALL BE SUBJECT TO ALL OF THE TERMS
AND PROVISIONS OF THIS PLAN, THE SIP AND THE APPLICABLE AWARD AGREEMENT.
AWARDS
SHALL BE ACCEPTED BY A PARTICIPANT SIGNING THE APPLICABLE AWARD AGREEMENT, AND
RETURNING IT TO THE COMPANY. FAILURE BY A PARTICIPANT TO DO SO WITHIN 90 DAYS
FROM THE DATE OF THE AWARD AGREEMENT SHALL GIVE THE COMPANY THE RIGHT TO RESCIND
THE AWARD.
4.
PERFORMANCE CRITERIA
The number of PSUs earned for any Performance Period will be based on one or
more performance measures established by the Committee in its sole discretion
with respect to such Performance Period (collectively, the "Performance
Measures").
For each Performance Measure with respect to a Performance Period,
the Committee will establish a "Weighting," "Threshold," "Target"
and
"Maximum."
5.
PSUS AWARDS
A.
PERFORMANCE AWARDS.
A PARTICIPANT'S AWARD AGREEMENT WILL SET FORTH
A PSU AWARD OPPORTUNITY, WHICH WILL COVER SUCH TARGET NUMBER OF PSUS AS
DETERMINED BY THE COMMITTEE (THE "TARGET PSUS").
B.
PERFORMANCE RESULTS.
AT THE END OF THE PERFORMANCE PERIOD, THE
COMMITTEE WILL ASSESS PERFORMANCE AGAINST EACH PERFORMANCE MEASURE AND DETERMINE
THE EARNED PERCENTAGE FOR EACH SUCH PERFORMANCE MEASURE AS FOLLOWS, SUBJECT TO
THE TERMS AND CONDITIONS OF THIS PLAN AND UNLESS DETERMINED OTHERWISE BY THE
COMMITTEE:
Performance
Earned Percentage
Performance less than Threshold
0%
Performance at Threshold
50%
Performance at Target
100%
Performance at or above Maximum
150%
2
THE EARNED PERCENTAGE FOR PERFORMANCE BETWEEN THRESHOLD AND TARGET AND BETWEEN
TARGET AND MAXIMUM WILL BE DETERMINED ON A STRAIGHT-LINE BASIS.
FOR THE
AVOIDANCE OF DOUBT, THE COMMITTEE RETAINS DISCRETION TO REDUCE ANY EARNED PSU
AWARD TO ZERO.
C.
EARNED PSUS.
THE NUMBER OF PSUS EARNED FOR THE PERFORMANCE PERIOD
(THE "EARNED PSUS") WILL EQUAL THE SUM OF THE PSUS EARNED FOR EACH PERFORMANCE
MEASURE, CALCULATED AS FOLLOWS:
PSUs earned for a Performance Measure
=
Target PSUs
x
Earned Percentage
x
Weighting of Performance Measure
D.
VESTING OF EARNED PSUS.
EXCEPT AS PROVIDED IN SECTION 6, AND
SUBJECT TO THE OTHER TERMS AND CONDITIONS OF THIS PLAN AND THE APPLICABLE AWARD
AGREEMENT, EARNED PSUS OR A PORTION SHALL VEST IN THREE EQUAL ANNUAL
INSTALLMENTS ON JANUARY 1 OF THE YEAR IMMEDIATELY FOLLOWING THE END OF THE
PERFORMANCE PERIOD AND JANUARY 1 OF EACH OF THE NEXT TWO YEARS (EACH, A
"SCHEDULED VESTING DATE").
E.
DELIVERY OF EARNED PSUS.
EXCEPT AS PROVIDED IN SECTION 6, AIG WILL
DELIVER (OR CAUSE TO BE DELIVERED) TO THE PARTICIPANT SHARES (OR, AT THE
ELECTION OF AIG, CASH EQUAL TO THE FAIR MARKET VALUE THEREOF) IN RESPECT OF ANY
EARNED PSUS, OR PORTION THEREOF, AS PROMPTLY AS ADMINISTRATIVELY PRACTICABLE
FOLLOWING THE APPLICABLE SCHEDULED VESTING DATE, PROVIDED THAT