Document:

EX-10.5:

 

Ex. 10(5)

          Assurance Agreement , dated as of June 27, 2005 (this “Agreement”), by
American International Group, Inc., a Delaware corporation (“AIG”), in favor of each
Eligible Employee (as defined below).

Recitals

          A. The Covered Payments. C.V. Starr & Co., Inc. (“Starr”) has historically
offered members of AIG’s senior management the opportunity to purchase shares of its common stock.
The payments owed by Starr in respect of which a notice of redemption or repurchase of “Covered
Stock” (as defined below) has been given in accordance with Starr’s Amended and Restated
Stockholders Agreement, dated as of July 16, 2002, its Certificate of Incorporation and its
By-Laws, each as in effect December 31, 2004 (the “Governing Documents”), are referred to in this
Agreement, collectively, as the “Covered Payments”.

          B. The Eligible Employees. AIG has determined, subject to the conditions set forth
in this Agreement, to assure each person who was as of May 18, 2005 both (1) a stockholder of Starr
and (2) an employee of AIG or its subsidiaries (each, an “Eligible Employee”) that all Covered
Payments are promptly paid to the Eligible Employee.

          Now, Therefore , AIG agrees as follows, intending to be legally bound:

          1. Assurance of Payment. AIG agrees to make any Covered Payment to any Eligible
Employee that is not promptly paid by Starr as required by the express terms of the Governing
Documents, subject to the conditions set forth in Section 2 and the terms of this Agreement. The
agreement to make the payments described in this Section 1 is irrevocable.

          2. Conditions. AIG’s obligation to make the payments contemplated by Section 1 is
subject to the following conditions:

     (a) For purposes of this Agreement, “Covered Stock” shall mean all Covered Stock (as
defined in Governing Documents) owned by an Eligible Employee on May 18, 2005 and all
subsequent dividends of preferred stock that would constitute such Covered Stock made by
Starr consistent with past practice as determined by the Compensation Committee of the
Board of Directors of AIG (the “Compensation Committee”);

     (b) The obligation will apply only to the Covered Payments owed under the express
terms of the Governing Documents as in effect on December 31, 2004, without giving effect
to any subsequent modification, waiver or amendment or action or inaction by the directors
or stockholders of Starr, in each case not approved by the Compensation Committee;

 

 

     (c) The obligation will apply only to payments to an Eligible Employee who is not
terminated by AIG for cause, as determined by the Compensation Committee; and

     (d) The Eligible Employee shall agree to take all actions reasonably requested by the
AIG to subrogate AIG to his or her rights against Starr for any payment made by AIG.
Without limiting the generality of the preceding sentence, each Eligible Employee shall be
required to agree, before receiving a payment pursuant to Section 1, that he or she will
repay the payment if the underlying obligation is ultimately satisfied by Starr.

          3. Nature of Obligations. This Agreement shall remain in full force and effect and
shall be binding on AIG, its successors and assigns until all Covered Payments owed to Eligible
Employees under the express terms of the Governing Documents have been made in full. In the event
that any payment to an Eligible Employee in respect of a Covered Payment is rescinded or must
otherwise be returned for any reason whatsoever, AIG shall remain liable under this Agreement with
respect to payment as if it had not been made. AIG reserves the right to assert any and all
defenses that Starr may have to any payment.

          4. Subrogation. On making any payment under Section 1, AIG shall be subrogated to
the rights of the Eligible Employee against Starr with respect to the underlying obligations of
Starr.

          5. Administration of this Agreement.

     (a) This Agreement shall be administered by the Compensation Committee. Actions of
the Compensation Committee may be taken by the vote of a majority of its members. The
Compensation Committee may allocate among its members and delegate to any person who is not
a member of the Compensation Committee any of its responsibilities and, unless the context
otherwise requires, all references to the Compensation Committee in this Agreement shall
include any member or person so allocated or delegated.

     (b) All decisions, writings and actions under this Agreement shall be subject to the
approval to the Compensation Committee in its sole and absolute discretion. Without
limiting the generality of the foregoing, the Compensation Committee shall have power to
interpret this Agreement, to make regulations for carrying out its purpose and to make all
other determinations in connection with its administration (including whether a dividend of
preferred stock by Starr is consistent with past practice as contemplated by Section 2(a)
and whether an Eligible Employee has been terminated for cause, as contemplated by Section
2(c)), all of which shall be final, binding and conclusive.

     (c) No member of the Board of Directors of AIG or the Compensation Committee or any
employee of AIG (each such person a “Covered Person”) shall have any liability to any
person (including any Eligible Employee) for any action taken or omitted to be taken or any
determination made in good faith with respect to this Agreement or any Eligible Employee’s
rights under it. Each Covered Person shall be indemnified and held harmless by AIG against
and from any loss, cost, liability, or expense (including attorneys’ fees) that may be
imposed upon or incurred by such Covered Person in

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connection with or resulting from any action, suit or proceeding to which such Covered
Person may be a party or in which such Covered Person may be involved by reason of any
action taken or omitted to be taken under the Agreement and against and from any and all
amounts paid by such Covered Person, with AIG’s approval, in settlement thereof, or paid by
such Covered Person in satisfaction of any judgment in any such action, suit or proceeding
against such Covered Person, provided that AIG shall have the right, at its own expense, to
assume and defend any such action, suit or proceeding and, once AIG gives notice of its
intent to assume the defense, AIG shall have sole control over such defense with counsel of
AIG’s choice. The foregoing right indemnification shall not be available to a Covered
Person to the extent that a court of competent jurisdiction in a final judgment or other
final adjudication, in either case, not subject to further appeal, determines that the acts
or omissions of such Covered Person giving rise to the indemnification claim resulted from
such Covered Person’s bad faith, fraud or willful misconduct. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to which
Covered Persons may be entitled under AIG’s Restated Certificate of Incorporation or
By-laws, as a matter of law, or otherwise, or any other power that AIG may have to
indemnify such persons or hold them harmless.

     (d) If the Compensation Committee shall at any time determine that any consent (as
hereinafter defined) is necessary or desirable as a condition of, or in connection with,
the making of any payment under this Agreement, or the taking of any other action
thereunder (each such action, an “Agreement Action”), then such Agreement Action shall not
be taken, in whole or in part, unless and until such consent shall have been effected or
obtained to the full satisfaction of the Compensation Committee. The term “consent” as
used in this Section 5(d) includes (1) any and all other consents, clearances and approvals
in respect of an Agreement Action by any governmental or other regulatory body or authority
and (2) any and all consents required by the Compensation Committee.

     (e) The Compensation Committee’s determinations under the Agreement need not be
uniform and may be made by it selectively among persons who receive, or are eligible to
receive, benefits under the Agreement (whether or not such persons are similarly situated).
Without limiting the generality of the foregoing, the Compensation Committee shall be
entitled, among other things, to make non-uniform and selective determinations as to
whether an Eligible Employee has been terminated for cause.

     (f) Any payments under this Agreement shall not be required to be taken into account
in computing the amount of salary or compensation of any Eligible Employee for the purpose
of determining any contributions to or any benefits under any pension, retirement,
profit-sharing, bonus, life insurance, severance or other benefit plan of AIG or any of its
subsidiaries or under any agreement with any Eligible Employee, unless AIG specifically
provides otherwise.

     (g) Any rights or expectancy thereof which an Eligible Employee may receive pursuant
to this Agreement shall not be assignable, transferable, pledged, hedged or in any manner
alienated, whether by operation of law or otherwise, except as a result of death or
incapacity where such rights are passed pursuant to a will or by operation of law. AIG may
withhold from

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any payment under this Agreement any taxes or other amounts that are required to be
withheld under any law, rule or regulation.

     (h) As used in this Agreement, the references to Starr include any successor to Starr
approved by the Compensation Committee. If any Eligible Employee agrees with Starr to a
reduced payment relative to his or her Covered Payments, AIG’s obligations under this
Agreement shall be reduced accordingly.

     6. Governing Law; Submission to Exclusive Jurisdiction.

     (a) This Agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and to be performed entirely within
such State.

     (b) Any dispute arising out of or in relation to this Agreement of whatsoever nature
and howsoever arising shall be submitted to the exclusive jurisdiction of a state or
federal court of appropriate jurisdiction located in the Borough of Manhattan, the City of
New York and such determination shall be made by reference to the laws of the State of New
York. By seeking or accepting any payment or benefit under this Agreement each Eligible
Employee irrevocably submits to the exclusive jurisdiction of a state or federal court of
appropriate jurisdiction located in the Borough of Manhattan, the City of New York over any
suit, action or proceeding arising out of or relating to or concerning this Agreement. No
Eligible Employee shall be entitled to any payment or benefit under this Agreement if he or
she challenges such exclusive jurisdiction or the fact that the forum designated by this
Section 6(b) has a reasonable relation to this Agreement and to such Eligible Employee’s
relationship with AIG.

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          In Witness Whereof , this Agreement has been duly executed and delivered
by AIG as of the date first above written.

	 	 	 	 	 	 
	 	AMERICAN INTERNATIONAL GROUP, INC.
	 
	 	 	 	 	 
	 

	 	By	/s/ Martin J. Sullivan
	/s/
Martin J. Sullivan

	 	 	 	 	 
	 

	 	 	Name:	Martin J. Sullivan
	 
	 	 	Title :	President and Chief Executive
Officer

-5-EX-10.6:

 

Ex. 10(6)

               Assurance Agreement , dated as of June 27, 2005 (this “Agreement”), by
American International Group, Inc., a Delaware corporation (“AIG”), in favor of each
Eligible Employee (as defined below).

Recitals

               A. The Covered Plans. Starr International Company, Inc. (“SICO”) has
historically established Deferred Compensation Profit Participation Plans for the benefit of
employees of AIG and its subsidiaries (each such plan established through December 31, 2004, a
“Covered Plan”). In the letter to participants attached as an Annex to this Agreement (the
“Annex”), SICO reaffirmed its obligations under each Covered Plan.

               B. The Eligible Employees. AIG has determined, subject to the conditions set forth
in this Agreement, to assure each participant in a Covered Plan who was as of May 18, 2005 an
employee of AIG or its subsidiaries (each, an “Eligible Employee”) that all cash or AIG common
stock, par value $2.50 per share (as adjusted for any Fundamental Transaction (as defined below),
the “Common Stock”), due under the express terms of the Covered Plans is promptly paid or delivered
to the Eligible Employee.

               Now, Therefore , AIG agrees as follows, intending to be legally bound:

               1. Assurance of Delivery. AIG agrees (a) to pay to any Eligible Employee any cash
that is not promptly paid and (b) to deliver to any Eligible Employee any shares of Common Stock
that are not promptly delivered, in each case by SICO to such Eligible Employee as required by the
express terms of any Covered Plan, subject to the conditions set forth in Section 2 and the terms
of this Agreement. The agreement to make the deliveries and payments described in this Section 1
is irrevocable.

               2. Conditions. AIG’s obligation to make the deliveries and payments contemplated by
Section 1 is subject to the following conditions:

          (a) The obligation will apply only to the express terms of the Covered Plans as in
effect on December 31, 2004, without giving effect to any subsequent modification, waiver
or amendment or action or inaction by the directors of SICO (or any committee thereof), in
each case not approved by the Compensation Committee of the Board of Directors of AIG (the
“Compensation Committee”);

          (b) The obligation will apply only to deliveries and payments to an Eligible Employee
who is not terminated by AIG for cause, as determined by the Compensation Committee;

          (c) Whether obligations under the Covered Plans are satisfied by delivery of shares
of Common Stock, payment of cash or combination of the two shall be determined by the
Compensation Committee (from time to time, in its sole discretion and regardless of the
form of consideration the directors of SICO elected to pay);

 

 

          (d) AIG’s total obligation under this Agreement will be limited to a combination of
shares of Common Stock and cash that does not exceed the number of shares of Common Stock
set forth in the Annex, as such number shall be equitably adjusted in the event of a
recapitalization, stock split, stock dividend, combination or exchange of shares, merger,
consolidation, rights offering, separation, reorganization, or liquidation or any other
change in the corporate structure of AIG or shares of the Common Stock (a “Fundamental
Transaction”), and, for purposes of calculating this limit, cash payments shall be
converted into a number of shares of Common Stock based on the fair market value of the
Common Stock (as determined by the Compensation Committee) on the date the payment is due
under the relevant Covered Plan; and

          (e) The Eligible Employee shall agree to take all actions reasonably requested by AIG
to subrogate AIG to his or her rights against SICO for any delivery or payment made by AIG.
Without limiting the generality of the preceding sentence, each Eligible Employee shall be
required to agree, before receiving a delivery or payment pursuant to Section 1, that he or
she will repay the shares or payments if the underlying obligation is ultimately satisfied
by SICO.

               3. Nature of Obligations. This Agreement shall remain in full force and effect and
shall be binding on AIG, its successors and assigns until all deliveries and payments under the
express terms of the Covered Plans to Eligible Employees have been made in full. In the event that
any delivery of shares or payment to an Eligible Employee under a Covered Plan is rescinded or must
otherwise be returned for any reason whatsoever, AIG shall remain liable under this Agreement with
respect to delivery or payment as if it had not been made. AIG reserves the right to assert any
and all defenses that SICO may have to any delivery or payment.

               4. Subrogation. On making any delivery or payment under Section 1, AIG shall be
subrogated to the rights of the Eligible Employee against SICO with respect to the underlying
obligations of SICO.

               5. Administration of this Agreement.

          (a) This Agreement shall be administered by the Compensation Committee. Actions of
the Compensation Committee may be taken by the vote of a majority of its members. The
Compensation Committee may allocate among its members and delegate to any person who is not
a member of the Compensation Committee any of its responsibilities and, unless the context
otherwise requires, any and all references to the Compensation Committee in this Agreement
shall include any member or person so allocated or delegated.

          (b) All decisions, writings and actions under this Agreement shall be subject to the
approval to the Compensation Committee in its sole and absolute discretion. Without
limiting the generality of the foregoing, the Compensation Committee shall have power to
interpret this Agreement, to make regulations for carrying out its purpose and to make all
other

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determinations in connection with its administration (including whether an Eligible
Employee has been terminated for cause, as contemplated by Section 2(b), whether and how to
make adjustments following a Fundamental Transaction or to adjust the maximum number of
shares of Common Stock described in Section (2)(d), whether any particular obligation shall
be satisfied in shares or cash, as contemplated by Section 2(c) and how the fair market
value of the Common Stock shall be determined as contemplated by Section 2(d)), all of
which shall be final, binding and conclusive.

          (c) No member of the Board of Directors of AIG or the Compensation Committee or any
employee of AIG (each such person a “Covered Person”) shall have any liability to any
person (including any Eligible Employee) for any action taken or omitted to be taken or any
determination made in good faith with respect to this Agreement or any Eligible Employee’s
rights under this Agreement. Each Covered Person shall be indemnified and held harmless by
AIG against and from any loss, cost, liability, or expense (including attorneys’ fees) that
may be imposed upon or incurred by such Covered Person in connection with or resulting from
any action, suit or proceeding to which such Covered Person may be a party or in which such
Covered Person may be involved by reason of any action taken or omitted to be taken under
this Agreement and against and from any and all amounts paid by such Covered Person, with
AIG’s approval, in settlement thereof, or paid by such Covered Person in satisfaction of
any judgment in any such action, suit or proceeding against such Covered Person, provided
that AIG shall have the right, at its own expense, to assume and defend any such action,
suit or proceeding and, once AIG gives notice of its intent to assume the defense, AIG
shall have sole control over such defense with counsel of AIG’s choice. The foregoing
right indemnification shall not be available to a Covered Person to the extent that a court
of competent jurisdiction in a final judgment or other final adjudication, in either case,
not subject to further appeal, determines that the acts or omissions of such Covered Person
giving rise to the indemnification claim resulted from such Covered Person’s bad faith,
fraud or willful misconduct. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which Covered Persons may be entitled under AIG’s
Restated Certificate of Incorporation or By-laws, as a matter of law, or otherwise, or any
other power that AIG may have to indemnify such persons or hold them harmless.

          (d) If the Compensation Committee shall at any time determine that any consent (as
hereinafter defined) is necessary or desirable as a condition of, or in connection with,
the making of any delivery or payment under this Agreement, or the taking of any other
action thereunder (each such action, an “Agreement Action”), then such Agreement Action
shall not be taken, in whole or in part, unless and until such consent shall have been
effected or obtained to the full satisfaction of the Compensation Committee. The
Compensation Committee may direct that any certificate evidencing Common Stock delivered
pursuant to this Agreement shall bear a legend setting forth such restrictions on
transferability as the Compensation Committee may determine to be necessary or desirable,
and may advise the transfer agent to place a stop transfer order against any legended
shares.

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The term “consent” as used in this Section 5(d) includes (1) any and all listings,
registrations or qualifications in respect thereof upon any securities exchange or under
any federal, state, or local law, or law, rule or regulation of a jurisdiction outside the
United States, (2) any other matter, which the Compensation Committee may deem necessary or
desirable to comply with the terms of any such listing, registration or qualification or to
obtain an exemption from the requirement that any such listing, qualification or
registration be made, (3) any and all other consents, clearances and approvals in respect
of a Agreement Action by any governmental or other regulatory body or authority or any
stock exchange or self-regulatory agency and (4) any and all consents required by the
Compensation Committee. Nothing in this Agreement shall require AIG to list, register or
qualify shares of Common Stock on any securities exchange.

          (e) The Compensation Committee’s determinations under the Agreement need not be
uniform and may be made by it selectively among persons who receive, or are eligible to
receive, benefits under the Agreement (whether or not such persons are similarly situated).
Without limiting the generality of the foregoing, the Compensation Committee shall be
entitled, among other things, to make non-uniform and selective determinations as to
whether an Eligible Employee has been terminated for cause.

          (f) Any deliveries of shares or payments under this Agreement shall not be required
to be taken into account in computing the amount of salary or compensation of any Eligible
Employee for the purpose of determining any contributions to or any benefits under any
pension, retirement, profit-sharing, bonus, life insurance, severance or other benefit plan
of AIG or any of its subsidiaries or under any agreement with any Eligible Employee, unless
AIG specifically provides otherwise.

          (g) Any rights or expectancy thereof which an Eligible Employee may receive pursuant
to this Agreement shall not be assignable, transferable, pledged, hedged or in any manner
alienated, whether by operation of law or otherwise, except as a result of death or
incapacity where such rights are passed pursuant to a will or by operation of law. AIG may
withhold from any delivery of shares or payment under this Agreement any taxes or other
amounts that are required to be withheld under any law, rule or regulation.

          (h) As used in this Agreement, references to SICO include any successor person or
entity approved by the Compensation Committee. If any Eligible Employee agrees with SICO
to a reduced delivery of shares or payment relative to that required by the express terms
of any Covered Plan, AIG’s obligations under this Agreement shall be reduced accordingly.

               6. Governing Law; Submission to Exclusive Jurisdiction.

          (a) This Agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and to be performed entirely within
such State.

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          (b) Any dispute arising out of or in relation to this Agreement of whatsoever nature
and howsoever arising shall be submitted to the exclusive jurisdiction of a state or
federal court of appropriate jurisdiction located in the Borough of Manhattan, the City of
New York and such determination shall be made by reference to the laws of the State of New
York. By seeking or accepting any share of Common Stock, payment or benefit under this
Agreement each Eligible Employee irrevocably submits to the exclusive jurisdiction of a
state or federal court of appropriate jurisdiction located in the Borough of Manhattan, the
City of New York over any suit, action or proceeding arising out of or relating to or
concerning this Agreement. No Eligible Employee shall be entitled to any share of Common
Stock, payment or benefit under this Agreement if he or she challenges such exclusive
jurisdiction or the fact that the forum designated by this Section 6(b) has a reasonable
relation to this Agreement and to such Eligible Employee’s relationship with AIG.

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     In Witness Whereof, this Agreement has been duly executed and delivered
by AIG as of the date first above written.

	 	 	 	 	 	 	 
	 	 	AMERICAN INTERNATIONAL GROUP, INC.
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ Martin J. Sullivan
	 
	 	 	 	 
	 	 
	 

	 	Name:	 	Martin J. Sullivan
	 

	 	Title:	 	President and Chief
Executive Officer

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Annex

STARR INTERNATIONAL COMPANY, INC.

(Incorporated in Panama)

101, Front Street, Hamilton, Bermuda

Tel:
(441) 296-6698          Fax: (441) 278-9306

April 7, 2005

To: Participants in SICO DCPPP

_________________________________________________________

          As all of you are undoubtedly aware, there has been considerable comment in the financial
press concerning the implications of the executive changes that have taken place at AIG, and the
effect that these changes will have on the relationship of AIG executives to SICO. Much of the
comment is inaccurate and stems from a basic misunderstanding of this relationship between SICO and
AIG.

     Over the years, SICO has contingently allocated 33,135,923 of AIG shares to participants in
the various DCPPP plans that date back to 1975. A large number of these shares have already been
distributed to SICO participants. At December 31, 2004 there are still 22,865,429 shares set aside
for participants in plans that have matured as of that date. These shares are clear contingent
liability of SICO (subject to existing plan conditions) and are identified as such on the balance
sheet of SICO. The directors of SICO consider this obligation of SICO to the DCPPP participants a
sacrosanct commitment made to all the participants and will honor it above all other obligations.
The resolve of the directors and voting shareholders to see that the participants receive these
shares at the proper time is unwavering. Please do not listen to any unfounded rumors that question
that commitment.

     At the earliest possible time, in light of the existing conditions, SICO will prepare and have
available audited financial statements, so that its accounting is fully transparent.

     The directors of SICO want to thank you for your contributions to the success of AIG in the
past and wish you continued success in the future.

	 	 	 
	 

	 	/s/ Edward E. Matthews
	 

	 	E.E. Matthews
	 

	 	Director

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