Document:

EX-10.1

Exhibit 10.1

AMERICAN INTERNATIONAL GROUP, INC.

AMENDED AND RESTATED EXECUTIVE SEVERANCE PLAN

     American International Group, Inc., a Delaware corporation (the “Company”), has adopted this
American International Group, Inc. Amended and Restated Executive Severance Plan (the “Plan”),
first effective as of March 11, 2008 (the “Effective Date”), and amended and restated as of August
26, 2008, by the Compensation and Management Resources Committee of the Board of Directors of the
Company (the “Compensation Committee”) in accordance with Section VIII.B below. The Plan replaces
the plan also known as the American International Group, Inc. Executive Severance Plan, which was
previously in effect and scheduled to expire as of June 26, 2008 (the “Prior Plan”).

I. Purpose

     The Plan is maintained for the purpose of providing severance payments and benefits for a
select group of management or highly compensated employees covered by this Plan whose employment is
terminated under the circumstances set forth in this Plan.

II. Term

     The Plan shall be effective as of the Effective Date and continue until terminated by the
Compensation Committee with 12 months’ notice to Eligible Employees in accordance with Section VIII
below; provided that this Plan shall in no event terminate before the second anniversary of the
Effective Date.

III. Eligibility

     The employees eligible to participate in this Plan at any time (together, the “Eligible
Employees”) shall be comprised of each employee who at the time of the termination of his or her
employment both:

     (1) Is a participant in the Company’s Partners Plan; and

     (2) Either (a) has his or her primary worksite in the United States, (b) is classified
as a Mobile Overseas Personnel (“MOP”) under the Company’s United States-based Mobility
Program or (c) has his or her primary worksite outside of the United States (and is not
classified as an MOP) but he or she was a participant in the Prior Plan (the employees in
referred to in clause (c) are collectively referred to as the “Grandfathered International
Executives”);

provided that (y) if an employee has an employment agreement (or other agreement or arrangement)
that provides for payment of severance in connection with a “Covered Termination” (as defined in
Section IV below), the employee will not be an Eligible Employee and (z) any Grandfathered
International Executive shall cease to be a participant to the extent that the Company establishes
an alternative executive severance plan for the Grandfathered International Executive’s relevant
jurisdiction.

     For purposes of this Plan, an employee shall be deemed to be a participant in the Partners
Plan only if the employee received an award with respect to the most recently commenced Performance
Period of the Partners Plan (as defined therein).

 

 

IV. Severance

     An Eligible Employee shall be entitled to receive the benefits described in this Section IV if
he or she experiences a “Covered Termination”; provided that the benefits to which a Grandfathered
International Executive would otherwise be entitled may be adjusted or limited to the extent that
the Compensation Committee determines is necessary or appropriate in light of applicable law or
local practice.

     A “Covered Termination” shall be:

     (1) For all Eligible Employees, an Eligible Employee’s termination of service during
the term of this Plan for any reason other than the Eligible Employee’s: (a) death; (b)
“Disability” (as defined in Section IV.K below); (c) resignation (including any resignation
that an Eligible Employee may assert was a constructive discharge); or (d) termination by
the Company or its subsidiaries for “Cause” (as defined in Section IV.K below); and

     (2) In the case of the Chief Executive Officer of the Company and each other Eligible
Employee who is both a participant in the Senior Partners Plan and has a rank of Senior Vice
President or higher of the Company, a Covered Termination shall also include such Eligible
Employee’s termination of service during the term of this Plan as a result of resignation
from his or her employment for “Good Reason” (as defined in Section IV.K below).

     For purposes of this Plan, an Eligible Employee shall be deemed to be a participant in the
Senior Partners Plan only if such Eligible Employee has an award outstanding under the Senior
Partners Plan with respect to the Performance Period of the Senior Partners Plan (as defined
therein) ending in the year of termination. Unless otherwise stated in this Plan, for purposes of
an Eligible Employee’s employment, “termination” of employment or service shall mean the date upon
which the Eligible Employee ceases to perform his or her employment duties and responsibilities for
the Company and/or each of its subsidiaries, as such termination is defined in Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”).

     A. Accrued Wages and Expense Reimbursements

     If an Eligible Employee experiences a Covered Termination, the Eligible Employee shall
receive: (1) accrued wages due through the date of termination in accordance with the Eligible
Employee’s employer’s normal payroll practices; (2) reimbursement for any unreimbursed business
expenses properly incurred by the Eligible Employee prior to the date of termination in accordance
with Company policy (and for which the Eligible Employee has submitted proper documentation as may
be required by the Company) and (3) any accrued but unused vacation pay in a lump sum.

     B. Severance Installments

     If an Eligible Employee experiences a Covered Termination, the Eligible Employee shall receive
severance equal to the sum of the following, divided by 12, and then multiplied by the number of
months in the “Severance Period” (as defined below) applicable to the Eligible Employee:

     (1) Annual base salary as of the date of termination; plus

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     (2) The total of any payments designated as a “supplemental bonus” or “quarterly cash”
that would have been payable in respect of the year of termination (including, if
applicable, any “supplemental bonus” or “quarterly cash” payments that would have been so
payable if the Eligible Employee had not elected to receive restricted stock units or other
non-cash awards in lieu of such payments, but not including any spot bonus or other
discretionary bonus); plus

     (3) The average of the Eligible Employee’s “Annual Cash Bonuses” (as defined below)
awarded and paid with respect to the three most recently completed calendar years preceding
the calendar year in which termination occurs (including any year in which the bonus was
zero); provided that: (a) if the date of termination occurs during a calendar year before
the time that Annual Cash Bonuses have generally been paid out to employees for the prior
calendar year’s performance, the average shall be computed based on the second, third and
fourth calendar years prior to the calendar year in which the termination occurs, (b) if the
Eligible Employee was not employed for all years that would otherwise be included in the
average, the average shall be computed based on each such year in which Eligible Employee
was employed and (c) if the Eligible Employee earns or is awarded no bonus for one of the
years that would otherwise be included in the average as a result of an approved leave of
absence, the average shall be computed by using the three most recently completed calendar
years preceding the calendar year of termination in which such condition did not apply.
“Annual Cash Bonus” means any performance based, year-end cash bonus or a cash bonus in lieu
of a year-end cash bonus, and the amount of any Annual Cash Bonus awarded and paid shall
include any amount of such bonus voluntarily deferred by the Eligible Employee.

Such severance amount shall be paid over the number of months in the Severance Period in equal
weekly, biweekly, or monthly installments (each, a “Severance Installment”) in accordance with the
Eligible Employee’s employer’s normal payroll practices.

     The “Severance Period” shall be:

     (1) For the Chief Executive Officer of the Company, 30 months;

     (2) For Eligible Employees who are both Senior Vice Presidents or higher of the
Company and participants in the Senior Partners’ Plan (as such participation is set forth in
Section IV above), 24 months; and

     (3) For all other Eligible Employees, one month per year of service with the Company
up to a maximum of 12 months, except that (a) no Eligible Employee shall have a Severance
Period of less than six months regardless of years of service and (b) any Eligible Employee
who was also eligible to receive benefits under the Prior Plan immediately prior to the
Effective Date shall be entitled to a Severance Period that is no shorter than what would
have been provided to such Eligible Employee under the terms of the Prior Plan if such
Eligible Employee had been terminated on December 31, 2007.

     C. Equity and Senior Partners Plan Vesting

     If an Eligible Employee experiences a Covered Termination, the Eligible Employee’s Severance
Period will be treated as continued employment for the purpose of outstanding

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restricted stock units (“RSUs”), performance RSUs that are earned but unvested under the
Partners Plan (but excluding any performance RSUs for performance periods ending on or after the
year of termination), Senior Partners Units (“SPUs”) that are earned but unvested under the Senior
Partners Plan (but excluding any SPUs for performance periods ending on or after the year of
termination) and options, in each case that would otherwise have vested or become exercisable
during the Severance Period had the Eligible Employee’s employment not terminated. Such awards
shall otherwise continue to be subject to the terms and conditions of the applicable plan and award
agreement, provided that, for purposes of the commencement and measurement of the post-termination
exercise period (if any as approved in accordance with the plan and award agreement) applicable to
any stock options held by the Eligible Employee as of the date of termination, the last day of the
Severance Period will be considered the date of termination. To the extent an RSU, SPU or option
does not vest upon the last day of the Severance Period such award shall be forfeited for no
consideration.

     D. Continued Health Coverage and Participation in Retiree Health

     If an Eligible Employee experiences a Covered Termination, the Eligible Employee shall be
entitled to participate during the Severance Period in the applicable Company-provided health plan
for active employees in which the Eligible Employee participated prior to termination by paying on
an after-tax basis the applicable employee contribution charged to active employees receiving
similar coverage. If the Eligible Employee participates in such plan, the actuarial cost of such
coverage in excess of the applicable employee contribution paid by the Eligible Employee, as
determined by the Company, shall be imputed as taxable income to the Eligible Employee. Upon the
last day of the Severance Period, the Eligible Employee shall be treated as having had a
termination event as of the date that the Severance Period ends for purposes of continuing coverage
requirements under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”).

     If an Eligible Employee experiences a Covered Termination, the Eligible Employee’s Severance
Period (but not including any period of coverage under COBRA) shall be treated as a period of
employment service (in connection with both the age and service requirements) for purposes of
determining the Eligible Employee’s eligibility to participate, in and to calculate the amount of,
the Company contribution towards any Company retiree health plan. For these purposes, the Eligible
Employee’s deemed period of employment service shall end as of the last day of the Severance
Period. If the Eligible Employee would not have satisfied the eligibility requirements to
participate in any Company retiree health plan but for the preceding treatment of the Severance
Period as a period of employment service, the actuarial cost of such retiree health coverage in
excess of any contribution paid by the Eligible Employee, as determined by the Company, shall be
imputed as income for all periods in which such retiree health coverage is provided. If, however,
the Eligible Employee satisfies the eligibility requirements to participate in any Company retiree
health plan on the basis of the Eligible Employee’s age and years of service on or before the date
of termination, then no such income imputation shall occur with respect to retiree health coverage.

     E. Additional Non-qualified Pension Credits

     If an Eligible Employee experiences a Covered Termination, the Eligible Employee shall be
entitled to additional service credit and credit for additional age, in each case in an amount
equal to the length of the Severance Period, for purposes of calculating the

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Eligible Employee’s benefit amounts, and determining vesting and eligibility for retirement
(including early retirement), under the Company’s non-qualified pension plans (plans that are not
intended to be qualified under the provisions of Code section 401) in which such Eligible Employee
was actively participating immediately prior to his or her date of termination. For the avoidance
of doubt, no Severance Installments pursuant to Section IV.B of this Plan shall be included in the
calculation of any benefits of an Eligible Employee under any non-qualified pension plan of the
Company. Eligible Employees shall commence payments under such non-qualified pension plans at the
time specified in the applicable plan, determined as if “Qualified Plan Retirement Income” (as
defined in the applicable plan) began to be paid immediately following the Eligible Employee’s date
of termination.

     F. Continued Life Insurance and Participation in Retiree Life

     If an Eligible Employee experiences a Covered Termination, the Eligible Employee shall be
entitled to participate during the Severance Period in the group life insurance benefits generally
available to active employees of the Company. The Eligible Employee shall be required to pay the
costs of such coverage on the same basis as prior to the date of termination. Any portion of the
premium paid by the Company shall be imputed as taxable income to the Eligible Employee. If an
Eligible Employee experiences a Covered Termination, the Eligible Employee’s Severance Period shall
be treated as a period of employment service (in connection with both the age and service
requirements) for purposes of determining the Eligible Employee’s eligibility to participate in and
to calculate the amount of a Company contribution towards any Company retiree life insurance
coverage. The Eligible Employee’s deemed period of employment service shall end as of the close of
the Severance Period. If the Eligible Employee would not have satisfied the eligibility
requirements to participate in any Company retiree life insurance plan but for the treatment of the
Severance Period as a period of employment service, the actuarial cost of such retiree life
insurance coverage in excess of any contribution paid by the Eligible Employee, as determined by
the Company, shall be imputed as income for all periods in which such retiree life insurance
coverage is provided. If, however, the Eligible Employee satisfies the eligibility requirement to
participate in any Company retiree life insurance plan on the basis of the Eligible Employee’s age
and years of service on or before the date of termination, no such income imputation shall occur
with respect to retiree life insurance coverage.

     G. Limitations on Severance

     The amounts described in Subsections B through F of this Section IV (collectively referred to
as “Severance”) are subject to the Eligible Employee’s continued compliance with any applicable
release and/or restrictive covenant agreement (referred to generically as the “Release”) that the
Company may require under other compensation arrangements (including but not limited to the plans
referred to collectively as the Partners Plan, the Senior Partners Plan and the Company’s Deferred
Compensation Profit Participation Plan), any applicable employment agreement or the release
pursuant to Section VI below. Failure to execute or adhere to such a Release by the Eligible
Employee shall result in a forfeiture of all Severance under this Plan. (For the avoidance of
doubt, any Severance Installment or other Severance benefit due under the terms of this Plan shall
be forfeited to the extent such payment would have otherwise been due but for the Eligible
Employee’s failure to provide the Company with a duly executed and effective Release.) Nothing
herein shall preclude the Company in its sole discretion from requiring the Eligible Employee to

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enter into other such releases or agreements as a condition to receiving Severance under this Plan.

     H. Timing of Payments and Delay for Specified Employees

     Severance Installments shall commence on a payroll date of the Eligible Employee’s employer
within 90 days following the Eligible Employee’s termination of employment. For purposes of Code
section 409A, each Severance Installment shall be treated as a separate payment. If the Plan
Administrator determines that the Eligible Employee is a “specified employee” for purposes of Code
section 409A, any Severance Installment or other Severance benefit that would otherwise be payable
or due under Section IV of this Plan shall be delayed for six months to the extent that such
Severance is determined to constitute deferred compensation under Code section 409A (taking into
account any regulatory exceptions that may be applicable, such as short-term deferral and
separation under Code section 409A). In such case, the Eligible Employee shall not receive such
Severance Installment or benefit that is subject to the six-month delay until the first scheduled
payroll date that occurs more than six months following the date of termination (the “First Payment
Date”) and, on the First Payment Date, the Company shall pay the Eligible Employee an amount equal
to the sum of the Severance Installments that would have been payable in respect of the period
preceding the First Payment Date but for the delay imposed on account of Code section 409A.

     I. Covenants and for “Cause” Terminations

     Notwithstanding anything to the contrary in this Plan, if at any time (a) the Eligible
Employee breaches any of the provisions of a Release or (b) the Plan Administrator determines that
grounds existed, on or prior to the date of termination of the Eligible Employee’s employment with
the Company, including prior to the Effective Date, for the Company to terminate the Eligible
Employee’s employment for “Cause”:

     (1) No further payments or benefits shall be due under this Section IV; and

     (2) The Eligible Employee shall be obligated to repay to the Company, immediately and
in a cash lump sum, the amount of any Severance Installments and other Severance benefits
(other than any amounts received by the Eligible Employee under Sections IV.D, E or F)
previously received by the Eligible Employee (which shall, for the avoidance of doubt, be
calculated on a pre-tax basis);

provided that the Eligible Employee shall in all events be entitled to receive accrued wages,
expense reimbursement and accrued but unused vacation pay as set forth in Section IV.A above.

     J. No Rights

     Other than as provided in this Section IV, an Eligible Employee shall have no rights to any
compensation or any other benefits under this Plan. All other benefits, if any, due to the
Eligible Employee following the date of termination shall be determined in accordance with the
plans, policies and practices of the Company or any subsidiary of the Company. Whether the Eligible
Employee’s employment has terminated for purposes of any Company plan or arrangement shall be
determined on the basis of the applicable terms of the plan or arrangement.

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     K. Definitions

     “Cause” shall mean, whether occurring prior to, or on or after the Effective Date:

     (1) The Eligible Employee’s failure to perform substantially his or her duties with
the Company or any subsidiary of the Company (other than any such failure resulting from the
Eligible Employee’s incapacity due to physical or mental illness);

     (2) The Eligible Employee’s malfeasance or misconduct;

     (3) The Eligible Employee’s knowing and material violation of a provision of the
Company’s Code of Conduct or the Director, Executive Officer and Senior Financial Officer
Code of Business Conduct and Ethics, as such codes of conduct may be in effect from time to
time, or other policies regarding behavior of employees; or

     (4) The conviction of, or entry of a plea of guilty or no contest by the Eligible
Employee with respect to, a felony or any lesser crime of which fraud or dishonesty is a
material element.

     “Disability” shall mean a period of medically determined physical or mental impairment that is
expected to result in death or last for a period of not less than 12 months during which a
Participant qualifies for income replacement benefits under the Participating Employer’s long-term
disability plan for at least 3 months, or, if a Participant does not participate in such a plan, a
period of disability during which the Participant is unable to engage in any substantial gainful
activity by reason of any medically determined physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not less than 12 months.

     “Good Reason” shall mean:

     (1) A diminution in the Eligible Employee’s duties or responsibilities such that they
are (or the assignment to the Eligible Employee of any duties or responsibilities that are)
inconsistent in any material and adverse respect with the Eligible Employee’s then title or
offices;

     (2) A diminution in the Eligible Employee’s titles or offices (including, if
applicable, membership on the Board) that is material and adverse to the Eligible Employee;

     (3) A material reduction by the Company in the Eligible Employee’s rate of annual base
salary; or

     (4) A material reduction by the Company in the Eligible Employee’s annual target bonus
opportunity.

     Notwithstanding the foregoing, a termination for Good Reason shall not have occurred unless
(a) the Eligible Employee gives written notice to the Company of termination of employment within
30 days after the Eligible Employee first becomes aware of the occurrence of the circumstances
constituting Good Reason, specifying in detail the circumstances constituting Good Reason, and the
Company has failed within 30 days after receipt of such notice to cure the circumstances
constituting Good Reason, and (b) the

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Eligible Employee’s “separation from service” (within the meaning of Code section 409A) occurs
no later than two years following the initial existence of one or more of the circumstances giving
rise to Good Reason.

V. No Duplication/No Mitigation

     A. No Duplication

     This Plan is not intended to, and shall not, result in any duplication of payments or benefits
to any Eligible Employee. The Compensation Committee shall be authorized to interpret this Plan to
give effect to the preceding sentence.

     B. No Mitigation

     In order for an Eligible Employee to receive the Severance described in this Plan, the
Eligible Employee shall be under no obligation to seek other employment or otherwise mitigate the
obligations of the Company under this Plan, and there shall be no offset against any amounts due
under this Plan on account of any remuneration attributable to any subsequent employment that the
Eligible Employee may obtain.

VI. Release and Restrictive Covenant Agreement

     Subject to Section IV.G above, the Company may require and condition payment of the Severance
on the Eligible Employee’s execution of a Release in the form attached to this Plan as Exhibit A;
provided, however, that such Release must be executed within 60 days after the date of termination;
provided, further, that if the local laws of a country or non-U.S. jurisdiction in which an
Eligible Employee works would not permit all or a portion of the Release to be structured or
executed in the form attached hereto, the General Counsel of the Company or his or her designee
shall have the discretion to create a release that incorporates as much of the Release as possible
while also complying with such local laws.

VII. Plan Administration

     A. Compensation Committee

     The Plan shall be interpreted, administered and operated by the Compensation Committee, which
shall have the complete authority, in its sole discretion, subject to the express provisions of
this Plan, to interpret this Plan, adopt any rules and regulations for carrying out this Plan as
may be appropriate and decide any and all matters and make any and all determinations arising under
or otherwise necessary or advisable for the administration of this Plan. All interpretations and
decisions by the Compensation Committee shall be final, conclusive and binding on all parties
affected thereby, and shall supersede any decisions or actions by the “Claims Administrator” (as
defined below). Notwithstanding the foregoing, the Compensation Committee shall have the right to
delegate to any individual member of the Compensation Committee or to any executive of the Company
any of the Compensation Committee’s authority under this Plan; provided, that no person shall act
as Plan Administrator in any matter directly relating to his or her eligibility or amount of
Severance under this Plan. The Compensation Committee and/or the member of the Compensation
Committee or the executive of the Company delegated any authority under this Plan shall be referred
to in this Plan as the “Plan Administrator.”

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     B. Expenses and Liabilities

     All expenses and liabilities that the Plan Administrator and the Claims Administrator incur in
connection with the administration of this Plan shall be borne by the Company. The Plan
Administrator and the Claims Administrator may employ attorneys, consultants, accountants,
appraisers, brokers or other persons in connection with such administration, and the Plan
Administrator, the Claims Administrator, the Company and the Company’s officers and directors shall
be entitled to rely upon the advice, opinions or valuations of any such persons. No member of the
Compensation Committee or any executive delegated by the Compensation Committee as Plan
Administrator, or the Claims Administrator shall be personally liable for any action, determination
or interpretation made in good faith with respect to this Plan, and all members of the Compensation
Committee and any executive delegated by the Compensation Committee as the Plan Administrator and
the Claims Administrator shall be fully protected by the Company in respect of any such action,
determination or interpretation to the extent permitted by (a) the Company’s charter; (b) the
Company’s bylaws and (c) applicable law.

VIII. Termination and Amendment

     A. Termination

     The Compensation Committee may terminate this Plan in accordance with Section II of this Plan,
provided that no termination shall adversely affect the payments or benefits to which any Eligible
Employee has become entitled by virtue of a Covered Termination occurring before the time of
termination of this Plan. Any notice of termination shall be in accordance with Section VIII.C
below.

     B. Amendment

     The Compensation Committee may amend this Plan in any manner, provided that, in the event an
amendment is determined by the Compensation Committee to be, in the aggregate, material and adverse
to an Eligible Employee (taking into account any aspects of such amendments that are beneficial to
the Eligible Employee), the Compensation Committee shall provide 12 months’ notice to such Eligible
Employee in accordance with Section VIII.C below (and no such change shall be effective before the
second anniversary of the Effective Date). In addition, the Compensation Committee may, at any
time, amend this Plan in any manner it determines in good faith is necessary or appropriate (1) to
comply with applicable law or (2) to comply with Code section 409A. Any notice of amendment shall
be in accordance with Section VIII.C below.

     For the avoidance of doubt, amendments under the preceding sentence may be material and
adverse to Eligible Employees. In addition, if an employee was not an Eligible Employee because he
or she had an employment agreement (or other agreement or arrangement) that contemplated payment of
severance with respect to any termination, the Compensation Committee may amend this Plan to
exclude such employee without notice to such employee (notwithstanding the expiration of such
agreement or arrangement) if it determines that in good faith that such exclusion is necessary to
comply with Code section 409A.

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     C. Notice of Termination or Amendment

     The Company shall be deemed to have provided any notice required by this Section VIII if the
Company makes a reasonable, good faith effort to email or otherwise contact all Eligible Employees.
For the avoidance of doubt, notice shall be deemed to have been validly delivered to every
Eligible Employee notwithstanding that certain individual Eligible Employees do not receive actual
notice, if the Company makes reasonable, good faith efforts as provided in the preceding sentence.

     D. Participation in Partners Plan and Senior Partners Plan

     The Compensation Committee may from time to time designate successor or alternative plans to
the Partners Plan and/or the Senior Partners Plan (including levels of participation in any such
successor or alternative plan) by reference to which status as an Eligible Employee (or benefit
levels under this Plan) is established. This Plan shall in no way limit the ability of the Company
or Compensation Committee to change or terminate an employee’s participation in the Partners Plan
and/or the Senior Partners Plan (or any successor or alternative plan), which may in turn cause
such employee to cease to be an Eligible Employee.

IX. Claims and Appeals Procedures

     The following claim review and claim appeal procedures apply to all claims of any nature
related to this Plan. For purposes of this Plan, the “Claims Administrator” is the Company’s
Senior Vice President, Human Resources, except when, in his or her discretion, the Claims
Administrator delegates his responsibilities to a committee comprised of three individuals: the
most senior executive in Company’s Employee Relations Department; the most senior executive in the
Company’s Compensation Department; and the Company’s senior labor and employment counsel, who shall
act as Claims Administrator.

     A. Initial Claim

     To the extent that an Eligible Employee believes that he or she is entitled to a benefit under
this Plan that such Eligible Employee has not received, such Eligible Employee may file a claim for
benefits under this Plan, as provided in this Section IX of this Plan.

     1. Procedure for Filing a Claim

     An Eligible Employee must submit a claim in writing on the appropriate claim form (or in such
other manner acceptable to the Claims Administrator), along with any supporting comments,
documents, records and other information, to the Claims Administrator in person or by messenger.

     If an Eligible Employee fails to properly file a claim for a benefit under this Plan, the
Eligible Employee shall be considered not to have exhausted all administrative remedies under this
Plan, and shall not be able to bring any legal action for the benefit. Claims and appeals of
denied claims may be pursued by an Eligible Employee, or if approved by the Claims Administrator,
by an Eligible Employee’s authorized representative.

     2. Initial Claim Review

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     The Claims Administrator shall conduct the initial claim review. The Claims Administrator
shall consider the applicable terms and provisions of this Plan and amendments to this Plan, and
any information and evidence presented by the Eligible Employee and any other relevant information.

     3. Initial Benefit Determination

     (a) Timing of Notification on Initial Claim

     The Claims Administrator shall notify an Eligible Employee about his or her claim within a
reasonable period of time, but, in any event, within 90 days after the Plan Administrator or Claims
Administrator, as the case may be, receives the Eligible Employee’s claim, unless the Claims
Administrator determines that special circumstances require an extension of time for processing the
claim. If the Claims Administrator determines that an extension is needed, the Eligible Employee
shall be notified before the end of the initial 90-day period. The notification shall say what
special circumstances require an extension of time. The Eligible Employee shall be told the date
by which the Claims Administrator expects to render the determination, which in any event shall be
within 90 days from the end of the initial 90-day period.

     If such an extension is necessary because an Eligible Employee did not submit the information
necessary to decide the claim, the time period in which the Plan Administrator is required to make
a decision shall be frozen from the date on which the notification is sent to the Eligible Employee
until the Eligible Employee responds to the request for additional information. If the Eligible
Employee fails to provide the necessary information in a reasonable period of time, the Plan
Administrator may, in its discretion, decide the Eligible Employee’s claim based on the information
already provided.

     (b) Manner and Content of Notification of Denied Claim

     In the event the Claims Administrator denies an Eligible Employee’s claim for benefits, the
Claims Administrator shall provide an Eligible Employee with written or electronic notice of any
denial, in accordance with applicable U.S. Department of Labor regulations. The notification shall
include:

     (i) The specific reason or reasons for the denial;

     (ii) Reference to the specific provision(s) of this Plan on which the determination is based;

     (iii) A description of any additional material or information necessary for an Eligible
Employee to revise the claim and an explanation of why such material or information is necessary;
and

     (iv) A description of this Plan’s review procedures and the time limits applicable to such
procedures.

     4. Claims Processing

     In the event the Claims Administrator approves an Eligible Employee’s claim for benefits, the
Claims Administrator shall provide the Release that the Eligible Employee must sign pursuant
Section VI of this Plan, and shall coordinate with the applicable

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Company payroll department, the Company benefits department, and any other Company entity or
counsel as necessary to implement the terms of Section IV of this Plan.

     B. Review of Initial Benefit Denial

     1. Procedure for Filing an Appeal of a Denial

     Any appeal of a denial must be delivered to the Plan Administrator within 60 days after an
Eligible Employee receives notice of denial. Failure to appeal within the 60-day period shall be
considered a failure to exhaust all administrative remedies under this Plan and shall make an
Eligible Employee unable to bring a legal action to recover a benefit under this Plan. An Eligible
Employee’s appeal must be in writing, using the appropriate form provided by the Plan Administrator
(or in such other manner acceptable to the Plan Administrator). The request for an appeal must be
filed with the Plan Administrator in person or by messenger, in either case, evidenced by written
receipt or by first-class postage-paid mail and return receipt requested, to the Plan
Administrator.

     2. Review Procedures for Denials

     The Plan Administrator shall provide a review that takes into account all comments, documents,
records and other information submitted by an Eligible Employee without regard to whether such
information was submitted or considered in the initial benefit determination. An Eligible Employee
shall have the opportunity to submit written comments, documents, records and other information
relating to the claim and shall be provided, upon request and free of charge, reasonable access to
and copies of all relevant documents.

     3. Timing of Notification of Benefit Determination on Review

     The Plan Administrator shall notify an Eligible Employee of the Plan Administrator’s decision
within a reasonable period of time, but in any event within 60 days after the Plan Administrator
receives the Eligible Employee’s request for review, unless the Plan Administrator determines that
special circumstances require more time for processing the review of the adverse benefit
determination.

     If the Plan Administrator determines that an extension is required, the Plan Administrator
shall tell an Eligible Employee in writing before the end of the initial 60-day period. The Plan
Administrator shall tell the Eligible Employee the special circumstances that require an extension
of time, and the date by which the Plan Administrator expects to render the determination on
review, which in any event shall be within 60 days from the end of the initial 60-day period.

     If such an extension is necessary because an Eligible Employee did not submit the information
necessary to decide the claim, the time period in which the Plan Administrator is required to make
a decision shall be frozen from the date on which the notification is sent to the Eligible Employee
until the Eligible Employee responds to the request for additional information. If the Eligible
Employee fails to provide the necessary information in a reasonable period of time, the Plan
Administrator may, in its discretion, decide the Eligible Employee’s claim based on the information
already provided.

     4. Manner and Content of Notification of Benefit Determination on Review

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     The Plan Administrator shall provide a notice of this Plan’s benefit determination on review,
in accordance with applicable U.S. Department of Labor regulations. If an Eligible Employee’s
appeal is denied, the notification shall include:

     (a) The specific reason or reasons for the denial;

     (b) Reference to the specific provision(s) of this Plan on which the determination is based;
and

     (c) A statement that the Eligible Employee is entitled to receive, upon request and free of
charge, reasonable access to and copies of all relevant documents.

     If an Eligible Employee‘s appeal is approved, the Plan Administrator shall forward the claim
to the Claims Administrator for processing in accordance with Section IX.A.4 above.

     C. Legal Action

     An Eligible Employee cannot bring any action to recover any benefit under this Plan if the
Eligible Employee does not file a valid claim for a benefit and seek timely review of a denial of
that claim.

X. Withholding Taxes

     The Company may withhold from any amounts payable under this Plan such federal, state, local
or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

XI. Miscellaneous

     A. No Effect on Other Benefits

     Any Severance received by an Eligible Employee under this Plan shall not be counted as
compensation for purposes of determining benefits under other benefit plans, programs, policies and
agreements, except to the extent expressly provided therein or in this Plan.

     B. Unfunded Obligation

     Any Severance and benefits provided under this Plan shall constitute an unfunded obligation of
the Company. Severance Installments and other benefits paid under this Plan will be made, when
due, entirely by the Company from its general assets. This Plan shall constitute solely an
unsecured promise by the Company to provide Severance to Eligible Employees to the extent provided
herein. For the avoidance of doubt, any pension, health or life insurance benefits to which an
Eligible Employee may be entitled under this Plan shall be provided under other applicable employee
benefit plans of the Company. This Plan does not provide the substantive benefits under such other
employee benefit plans, and nothing in this Plan shall restrict the Company’s ability to amend,
modify or terminate such other employee benefit plans.

     C. Employment Status

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The Plan is not a contract of employment, does not guarantee the Eligible Employee employment
for any specified period and does not limit the right of the Company or any subsidiary of the
Company to terminate the employment of the Eligible Employee at any time for any reason or no
reason or to change the status of any Eligible Employee’s employment or to change any employment
policies.

     D. Section Headings

     The section headings contained in this Plan are included solely for convenience of reference
and shall not in any way affect the meaning of any provision of this Plan.

     E. Governing Law

     It is intended that this Plan be an “employee welfare benefit plan” within the meaning of
Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)
maintained for the purpose of providing benefits for a select group of management or highly
compensated employees, and this Plan shall be administered in a manner consistent with such intent.
The Plan Administrator shall provide any documents relating to this Plan to the Secretary of the
U.S. Department of Labor upon request. The Plan and all rights under this Plan shall be governed
and construed in accordance with ERISA, and, to the extent not preempted by federal law, with the
laws of the State of New York. The Plan shall also be subject to all applicable non-U.S. laws as
to Eligible Employees located outside of the United States. Without limiting the generality of
this Section XI.E, it is intended that this Plan comply with Code section 409A, including any
regulatory exceptions that may be applicable, such as the short-term deferral and separation pay
exceptions.

     In the event that any provision of this Plan is not permitted by the local laws of a country
or jurisdiction in which an Eligible Employee works, such local law shall supersede that provision
of this Plan with respect to that Eligible Employee.

     F. Assignment

     This Plan shall inure to the benefit of and shall be enforceable by an Eligible Employee’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If an Eligible Employee should die while any amount is still payable to the
Eligible Employee under this Plan had the Eligible Employee continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of this Plan, or as
determined by the Compensation Committee, to the Eligible Employee’s estate. An Eligible
Employee’s rights under this Plan shall not otherwise be transferable or subject to lien or
attachment.

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EXHIBIT A

AMERICAN INTERNATIONAL GROUP, INC.

RELEASE AND RESTRICTIVE COVENANT AGREEMENT

     This Release and Restrictive Covenant Agreement (the “Agreement”) is entered into by and
between                                          (the “Employee”) and American International Group, Inc., a
Delaware Corporation (the “Company”).

     Unless the context otherwise requires each term defined in the American International Group,
Inc. Executive Severance Plan (the “Plan”) has the same meaning when used in this Agreement.

I. Termination of Employment

     The Employee’s employment with the Company and each of its subsidiaries and controlled
affiliates (collectively “AIG”) shall terminate on                      (the “Termination Date”) and, as
of that date, the Employee shall cease performing the Employee’s employment duties and
responsibilities for AIG and shall no longer report to work for AIG. For purposes of this
Agreement, the term “controlled affiliates” means an entity of which the Company directly or
indirectly owns or controls a majority of the voting shares.

II. Severance

     The Employee shall receive Severance Installments (as defined in the Plan) in the gross amount
of $                    , less applicable tax and benefit withholdings paid out over                      months (in
equal weekly, biweekly, or monthly installments) in accordance with Section IV.B of the Plan and
the Company’s normal payroll practices. The Employee shall also be paid accrued wages, reimbursed
expenses and                      days of accrued, unused vacation pay as set forth in Section IV.A of the
Plan.

III. Other Benefits

     Nothing in this Agreement modifies or affects any of the terms of any benefit plans or
programs (including, without limitation, the Company’s right to alter the terms of such plans or
programs). No further contributions or employer matching contributions shall be made on behalf of
the Employee to any Company 401(k) or other savings or thrift plan after the Termination Date and
Employee shall no longer be eligible for coverage under the short-term and long-term disability
programs or the Employee Stock Purchase Plan after the Termination Date. The Employee shall not
accrue vacation after the Termination Date. Except as set forth in this Agreement, there are no
other payments or benefits due to the Employee from the Company (except those benefits as set forth
in Sections IV.C through F of the Plan); the items set forth on Schedule 1 of this Agreement are
the only payments due to the Employee under Sections IV.B through F of the Plan. The Employee
acknowledges and agrees that the Company has made no representations to the Employee as to the
applicability of Section 409A of the Internal Revenue Code to any of the payments or benefits
provided to the Employee pursuant to the Plan or this Agreement.

IV. Release of Claims

     In partial consideration of the payments and benefits described in Section IV of the Plan, to
which the Employee agrees the Employee is not entitled until and unless he

A-1

 

executes this Agreement, the Employee, for and on behalf of the Employee and the Employee’s heirs
and assigns, subject to the following two sentences hereof, hereby waives and releases any common
law, statutory or other complaints, claims, charges or causes of action of any kind whatsoever,
both known and unknown, in law or in equity, which the Employee ever had, now has or may have
against AIG and its shareholders (other than C.V. Starr & Co., Inc. and Starr International
Company, Inc.), successors, assigns, directors, officers, partners, members, employees or agents
(collectively, the “Releasees”), including, without limitation, any complaint, charge or cause of
action arising under federal, state or local laws pertaining to employment, including the Age
Discrimination in Employment Act of 1967 (“ADEA,” a law which prohibits discrimination on the basis
of age), the National Labor Relations Act, the Civil Rights Act of 1991, the Americans With
Disabilities Act of 1990, Title VII of the Civil Rights Act of 1964, all as amended; and all other
federal, state and local laws and regulations. By signing this Agreement, the Employee acknowledges
that the Employee intends to waive and release any rights known or unknown that the Employee may
have against the Releasees under these and any other laws; provided, that the Employee does not
waive or release claims with respect to the right to enforce the Employee’s rights under this
Agreement (the “Unreleased Claims”). In addition, the Employee agrees the Employee waives any
claim to reinstatement or re-employment with AIG, the Employee shall not seek or accept employment
with AIG after the Termination date and the Employee agrees not to bring any claim based upon the
failure or refusal of AIG to employ the Employee hereafter.

V. Proceedings

     The Employee acknowledges that the Employee has not filed any complaint, charge, claim or
proceeding, except with respect to an Unreleased Claim, if any, against any of the Releasees before
any local, state or federal agency, court or other body (each individually a “Proceeding”). The
Employee represents that the Employee is not aware of any basis on which such a Proceeding could
reasonably be instituted. By signing this Agreement the Employee:

     (a) Acknowledges that the Employee shall not initiate or cause to be initiated on his behalf
any Proceeding and shall not participate in any Proceeding, in each case, except as required by
law;

     (b) Waives any right he may have to benefit in any manner from any relief (whether monetary
or otherwise) arising out of any Proceeding, including any Proceeding conducted by the Equal
Employment Opportunity Commission (“EEOC”); and

     (c) Acknowledges that the Employee shall be limiting the availability of certain remedies
that the Employee may have against AIG and limiting also the Employee’s ability to pursue certain
claims against the Releasees.

     Notwithstanding the above, nothing in Section V of this Agreement shall prevent the Employee from:

     (x) Initiating or causing to be initiated on his or her behalf any complaint, charge, claim
or proceeding against the Company before any local, state or federal agency, court or other body
challenging the validity of the waiver of his or her claims under the ADEA contained in Section IV
of this Agreement (but no other portion of such waiver), or

A-2

 

     (y) Initiating or participating in an investigation or proceeding conducted by the EEOC.

VI. Time to Consider

     The payments and benefits payable to the Employee under this Agreement include consideration
provided to Employee over and above anything of value to which the Employee already is entitled.
The Employee acknowledges that the Employee has been advised that the Employee has 21 days from the
date of the Employee’s receipt of this Agreement to consider all the provisions of this Agreement.

     THE EMPLOYEE FURTHER ACKNOWLEDGES THAT THE EMPLOYEE HAS READ THIS AGREEMENT CAREFULLY, HAS
BEEN ADVISED BY THE COMPANY TO, CONSULT AN ATTORNEY, AND FULLY UNDERSTANDS THAT BY SIGNING BELOW
THE EMPLOYEE IS GIVING UP CERTAIN RIGHTS WHICH THE EMPLOYEE MAY HAVE TO SUE OR ASSERT A CLAIM
AGAINST ANY OF THE RELEASEES, AS DESCRIBED IN SECTION IV OF THIS AGREEMENT AND THE OTHER PROVISIONS
HEREOF. THE EMPLOYEE ACKNOWLEDGES THAT THE EMPLOYEE HAS NOT BEEN FORCED OR PRESSURED IN ANY MANNER
WHATSOEVER TO SIGN THIS AGREEMENT, AND THE EMPLOYEE AGREES TO ALL OF ITS TERMS VOLUNTARILY.

VII. Revocation

     The Employee hereby acknowledges and understands that the Employee shall have seven days from
the date of the Employee’s execution of this Agreement to revoke this Agreement (including, without
limitation, any and all claims arising under the ADEA) by providing written notice of revocation
delivered to the General Counsel of the Company no later than 5:00 p.m. on the seventh day after
the Employee has signed the Agreement. Neither the Company nor any other person is obligated to
provide any benefits to the Employee pursuant to Section IV of the Plan until eight days have
passed since the Employee’s signing of this Agreement without the Employee having revoked this
Agreement. If the Employee revokes this Agreement pursuant to this Section, the Employee shall be
deemed not to have accepted the terms of this Agreement, and no action shall be required of AIG
under any section of this Agreement.

VIII. No Admission

     This Agreement does not constitute an admission of liability or wrongdoing of any kind by the
Employee or AIG.

IX. Restrictive Covenants

     A. Non-Competition/Non-Solicitation

     The Employee acknowledges and recognizes the highly competitive nature of the businesses of
AIG and accordingly agrees as follows:

     1. During the period commencing on the Employee’s Termination Date and ending on the earlier
of the (i) the one-year anniversary of such date and (ii) the expiration of the “Severance Period”
(as defined in the Plan) (the “Restricted Period”). The Employee shall not, directly or
indirectly:

A-3

 

     (a) Engage in any “Competitive Business” (defined below) for the Employee’s own account;

     (b) Enter the employ of, or render any services to, any person engaged in any Competitive
Business;

     (c) Acquire a financial interest in, or otherwise become actively involved with, any person
engaged in any Competitive Business, directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or consultant; or

     (d) Interfere with business relationships between AIG and customers or suppliers of, or
consultants to AIG.

     2. For purposes of this Section IX, a “Competitive Business” means, as of any date, including
during the Restricted Period, any person or entity (including any joint venture, partnership, firm,
corporation or limited liability company) that engages in or proposes to engage in the following
activities in any geographical area in which AIG does business:

     (a) The property and casualty insurance business, including commercial insurance, business
insurance, personal insurance and specialty insurance;

     (b) The life and accident and health insurance business;

     (c) The underwriting, reinsurance, marketing or sale of (y) any form of insurance of any kind
that AIG as of such date does, or proposes to, underwrite, reinsure, market or sell (any such form
of insurance, an “AIG Insurance Product”), or (z) any other form of insurance that is marketed or
sold in competition with any AIG Insurance Product;

     (d) The investment and financial services business, including retirement services and mutual
funds services; or

     (e) Any other business that as of such date is a direct and material competitor of one of
AIG’s businesses.

     3. Notwithstanding anything to the contrary in this Agreement, the Employee may directly or
indirectly, own, solely as an investment, securities of any person engaged in the business of AIG
which are publicly traded on a national or regional stock exchange or on the over-the-counter
market if the Employee (a) is not a controlling person of, or a member of a group which controls,
such person and (b) does not, directly or indirectly, own one percent or more of any class of
securities of such person.

     4. During the Restricted Period, the Employee shall not, directly or indirectly, without
AIG’s written consent, hire, solicit or encourage to cease to work with AIG or any employee of AIG

     5. The Employee understands that the provisions of this Section IX.A may limit the Employee’s
ability to earn a livelihood in a business similar to the business of AIG but the Employee
nevertheless agrees and hereby acknowledges that:

     (a) Such provisions do not impose a greater restraint than is necessary to protect the
goodwill or other business interests of AIG;

A-4

 

     (b) Such provisions contain reasonable limitations as to time and scope of activity to be
restrained;

     (c) Such provisions are not harmful to the general public; and

     (d) Such provisions are not unduly burdensome to the Employee. In consideration of the
foregoing and in light of the Employee’s education, skills and abilities, the Employee agrees that
he shall not assert that, and it should not be considered that, any provisions of Section IX.A
otherwise are void, voidable or unenforceable or should be voided or held unenforceable.

     6. It is expressly understood and agreed that, although the Employee and the Company consider
the restrictions contained in this Section IX.A to be reasonable, if a judicial determination is
made by a court of competent jurisdiction that the time or territory or any other restriction
contained in this Section IX.A or elsewhere in this Agreement is an unenforceable restriction
against the Employee, the provisions of the Agreement shall not be rendered void but shall be
deemed amended to apply as to such maximum time and territory and to such maximum extent as such
court may judicially determine or indicate to be enforceable. Alternatively, if any court of
competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and
such restriction cannot be amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.

     B. Nondisparagement

     The Employee agrees (whether during or after the Employee’s employment with AIG) not to issue,
circulate, publish or utter any false or disparaging statements, remarks or rumors about AIG or the
officers, directors or managers of AIG other than to the extent reasonably necessary in order to
(a) assert a bona fide claim against AIG arising out of the Employee’s employment with AIG, or (b)
respond in a truthful and appropriate manner to any legal process or give truthful and appropriate
testimony in a legal or regulatory proceeding.

     C. Code of Conduct

     The Employee agrees to abide by all of the terms of the Company’s Code of Conduct or the
Director, Executive Officer and Senior Financial Officer Code of Business Conduct and Ethics that
continue to apply after termination of employment.

     D. Confidentiality/Company Property

     The Employee acknowledges that the disclosure of this Agreement or any of the terms hereof
could prejudice AIG and would be detrimental to AIG’s continuing relationship with its employees.
Accordingly, the Employee agrees not to discuss or divulge either the existence or contents of this
Agreement to anyone other than the Employee’s immediate family, attorneys or tax advisors, and
further agrees to use the Employee’s best efforts to ensure that none of those individuals will
reveal its existence or contents to anyone else. The Employee shall not, without the prior written
consent of AIG, use, divulge, disclose or make accessible to any other person, firm, partnership,
corporation or other entity, any “Confidential Information” (as defined below), or any “Personal
Information” (as defined below); provided that the Employee may disclose such information when
required to do so by a court of competent jurisdiction, by any

A-5

 

governmental agency having supervisory authority over the business of AIG, as the case may be,
or by any administrative body or legislative body (including a committee thereof) with jurisdiction
to order the Employee to divulge, disclose or make accessible such information; provided, further,
that in the event that the Employee is ordered by a court or other government agency to disclose
any Confidential Information or Personal Information, the Employee shall:

     (a) Promptly notify AIG of such order;

     (b) At the written request of AIG, diligently contest such order at the sole expense of AIG;
and

     (c) At the written request of AIG, seek to obtain, at the sole expense of AIG, such
confidential treatment as may be available under applicable laws for any information disclosed
under such order.

     Upon the Termination Date the Employee shall return AIG property, including, without limitation,
files, records, disks and any media containing Confidential Information or Personal Information.
For purposes of this Section IX.D:

     “Confidential Information” shall mean information concerning the financial data, strategic
business plans, product development (or other proprietary product data), customer lists, marketing
plans and other, proprietary and confidential information relating to the business of AIG or
customers, that, in any case, is not otherwise available to the public (other than by the
Employee’s breach of the terms hereof).

     “Personal Information” shall mean any information concerning the personal, social or business
activities of the officers or directors of the Company.

     E. Developments

     Developments shall be the sole and exclusive property of AIG. The Employee agrees to, and
hereby does, assign to AIG, without any further consideration, all of the Employee’s right, title
and interest throughout the world in and to all Developments. The Employee agrees that all such
Developments that are copyrightable may constitute works made for hire under the copyright laws of
the United States and, as such, acknowledges that AIG is the author of such Developments and owns
all of the rights comprised in the copyright of such Developments. The Employee hereby assigns to
AIG without any further consideration all of the rights comprised in the copyright and other
proprietary rights the Employee may have in any such Development to the extent that it might not be
considered a work made for hire. The Employee shall make and maintain adequate and current written
records of all Developments and shall disclose all Developments promptly, fully and in writing to
the Company promptly after development of the same, and at any time upon request.

     “Developments” shall mean all discoveries, inventions, ideas, technology, formulas, designs,
software, programs, algorithms, products, systems, applications, processes, procedures, methods and
improvements and enhancements conceived, developed or otherwise made or created or produced by the
Employee alone or with others, and in any way relating to the business or any proposed business of
AIG of which the Employee has been made aware, or the products or services of AIG of which the
Employee has been

A-6

 

made aware, whether or not subject to patent, copyright or other protection and whether or not
reduced to tangible form, at any time during the Employee’s employment with AIG.

     F. Cooperation

     The Employee agrees (whether during or after the Termination Date) to cooperate:

     (a) With AIG in connection with any litigation or regulatory matters in which the Employee may
have relevant knowledge or information, and

     (b) With all government authorities on matters pertaining to any investigation, litigation or
administrative proceeding pertaining to AIG.

This cooperation shall include, without limitation, the following:

     (x) To meet and confer, at a time mutually convenient to the Employee and AIG, with AIG’s
designated in-house or outside attorneys for trial preparation purposes, including answering
questions, explaining factual situations, preparing to testify, or appearing for deposition;

     (y) To appear for trial and give truthful trial testimony without the need to serve a subpoena
for such appearance and testimony; and

     (z) To give truthful sworn statements to AIG’s attorneys upon their request and, for purposes
of any deposition or trial testimony, to adopt AIG’s attorneys as Employee’s own (provided that
there is no conflict of interest that would disqualify the attorneys from representing Employee),
and to accept their record instructions at deposition.

The Company agrees to reimburse Employee for reasonable out-of-pocket expenses necessarily incurred
by Employee in connection with the cooperation set forth in this paragraph.

X. Enforcement

     If at any time (a) the Employee breaches any of the provisions of this Agreement or (b) the
Plan Administrator of the Plan determines that grounds existed, on or prior to the Termination
Date, including prior to the Effective Date of the Plan, for AIG to terminate the Employee’s
employment for “Cause” (as defined in the Plan), (y) no further payments or benefits shall be due
to the Employee under this Agreement and/or the Plan; and (z) the Employee shall be obligated to
repay to AIG, immediately and in a cash lump sum, the amount of any Severance Installments and
other Severance benefits (other than any amounts received by the Employee under Section IV.D, E or
F) previously received by the Employee under this Agreement and/or the Plan (which shall, for the
avoidance of doubt, be calculated on a pre-tax basis); provided that the Employee shall in all
events be entitled to receive accrued wages and expense reimbursement and accrued but unused
vacation pay as set forth in Section IV.A of the Plan.

     The Employee acknowledges and agrees that AIG’s remedies at law for a breach or threatened
breach of any of the provisions of Sections IX.A, B, D and E of this Agreement would be inadequate,
and, in recognition of this fact, the 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 in the form of specific

A-7

 

performance, temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available. In addition, AIG shall be entitled to immediately
cease paying any amounts remaining due or providing any benefits to the Employee pursuant to
Section IV of the Plan upon a determination by the “Plan Administrator” (as defined in the Plan)
that the Employee has violated any provision of Section IX of this Agreement, subject to payment of
all such amounts upon a final determination, by a court of competent jurisdiction, that the
Employee had not violated Section IX of this Agreement.

XI. General Provisions

     A. No Waiver; Severability

     A failure of the Company or any of the Releasees to insist on strict compliance with any
provision of this Agreement shall not be deemed a waiver of such provision or any other provision
hereof. If any provision of this Agreement is determined to be so broad as to be unenforceable,
such provision shall be interpreted to be only so broad as is enforceable, and in the event that
any provision is determined to be entirely unenforceable, such provision shall be deemed severable,
such that all other provisions of this Agreement shall remain valid and binding upon the Employee
and the Releasees.

     B. Governing Law

     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 WHOLLY PERFORMED WITHIN THAT STATE, WITHOUT REGARD
TO ITS CONFLICT OF LAWS PROVISIONS OR THE CONFLICT OF LAWS PROVISIONS OF ANY OTHER JURISDICTION
WHICH WOULD CAUSE THE APPLICATION OF ANY LAW OTHER THAN THAT OF THE STATE OF NEW YORK. THE EMPLOYEE
CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS IN NEW YORK.

     C. Entire Agreement/Counterparts

     This Agreement constitutes the entire understanding and agreement between the Company and the
Employee with regard to all matters herein. There are no other agreements, conditions, or
representations, oral or written, express or implied, with regard thereto. This Agreement may be
amended only in writing, signed by the parties hereto. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

     D. Notice

     For the purpose of this Agreement, notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given if delivered: (a)
personally; (b) by overnight courier service; (c) by facsimile transmission; or (d) by United
States registered mail, return receipt requested, postage prepaid, addressed to the respective
addresses, as set forth below, or to such other address as either party may have furnished to the
other in writing in accordance herewith; provided that notice of change of address shall be
effective only upon receipt. Notices shall be deemed given as follows: (x) notices sent by
personal delivery or overnight courier shall be deemed given when delivered; (y) notices sent by
facsimile transmission shall be deemed given upon the

A-8

 

sender’s receipt of confirmation of complete transmission; and (z) notices sent by United States
registered mail shall be deemed given two days after the date of deposit in the United States mail.

A-9

 

If to Executive, to the address as shall most currently appear on the records of the Company.

If to the Company, to:

American International Group, Inc.

70 Pine Street

New York, NY 10270

Fax: 212-770-1584

Attn: General Counsel

	 	 	 	 	 
	Attn:
	 	 	 	 
	 

	 	 

	 	 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year
first above written.

EMPLOYEE

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:

Title:
	 	 

AMERICAN INTERNATIONAL GROUP, INC.

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:

Title:
	 	 

A-10EX-10.2

Exhibit 10.2

AGREEMENT AND RELEASE

     AGREEMENT AND RELEASE by and between American International Group, Inc. (the “Company”) and
Robert M. Sandler (“Employee”).

     WHEREAS, Employee has been employed by the Company and the Company and Employee desire to
address the termination of their employment relationship.

     NOW, THEREFORE, the Company and Employee agree as follows:

     1. For the time period from June 2, 2008 until September 30, 2008, the Company shall pay
Employee a bi-weekly salary of $14,871.76, pursuant to the Company’s regular payroll practices, for
performing his employment duties and responsibilities and this salary will compensate Employee for
all hours worked. Employee will cease performing his employment duties and responsibilities for the
Company, and will no longer report to work for the Company, effective September 30, 2008 (the “End
Work Date”).

     2. Employee shall remain on the payroll of the Company from the End Work Date through and
including September 30, 2010 (the “Termination Date”), except for (a) any Long Term Disability plan
withholdings (which will cease as of the End Work Date) and (b) any Employee Stock Purchase Plan
deductions, Incentive Savings Plan contributions or matches, and deductions under the Executive
Deferred Compensation Plan or the Supplemental Incentive Savings Plan (all of which will cease as
of the last day of the pay period in which the End Work Date occurs), with only the following
payments to be made to Employee: (i) the Company shall pay Employee the sum of: salary of
$193,333.50, less withholdings, bonus of $85,833.48, less withholdings, and supplemental bonus of
$349,375.00, less withholdings, within ten (10) business days after the Delay Date (defined below)
(collectively, these payments are the “First Payments”) and the Company shall then pay Employee a
bi-weekly sum of: salary of $14,871.80, less withholdings, bonus of $6,602.57, less withholdings,
and supplemental bonus of $26,875.00, less withholdings, from the Delay Date through and including
the Termination Date. Employee’s employment with the Company shall terminate on the Termination
Date and the Termination Date will be the date of termination of Employee’s employment under the
American International Group, Inc. Amended and Restated 1999 Stock Option Plan, the American
International Group, Inc. Amended and Restated 2002 Stock Incentive Plan, the American
International Group, Inc. Amended and Restated 2007 Stock Incentive Plan (collectively, the
“Option/RSU Plans”) and for purposes of the American International Group, Inc. Retirement Plan (the
“Retirement Plan”). Employee shall retire on October 1, 2010 and Employee shall be entitled to all
benefits in accordance with such retirement.

     3. The Company agrees to continue Employee’s benefits through and including the Termination
Date; provided, however, that (a) no additional vacation benefits shall accrue to
Employee as a result of the continuation of Employee on payroll beyond the End Work Date, (b)
Employee is responsible for the payment of any corporate credit card late fees or any business
expenses that the Company has not approved and processed for payment on or before the End
Work Date, (c) Employee’s eligibility for coverage under the Short Term and Long Term Disability
programs, the Incentive Savings Plan, the Employee Stock Purchase Plan, the

 

 

Executive Deferred Compensation Plan and the Supplemental Incentive Savings Plan will cease
as of the End Work Date, and (d) nothing in this Agreement and Release modifies or affects any of
the terms of any benefit plans or programs (including, without limitation, the Company’s right to
alter the terms of such plans or programs). This Agreement and Release does not abrogate any rights
that Employee may have to COBRA benefit continuation after the Termination Date.

     4. Notwithstanding anything in this Agreement and Release, or any other agreements, to the
contrary, Employee and the Company agree that all agreements between Employee and the Company (or
any of its affiliates) will be interpreted and administered so that distributions that are
conditioned upon termination of Employee’s employment with the Company will be conditioned upon
Employee’s “separation from service” with the Company within the meaning of Internal Revenue Code
Section 409A (“Section 409A”). For purposes of determining the date of the First Payment and the
commencement date of any other payments or benefits that are subject to the six-month delay due to
Section 409A, your “separation from service” with the Company within the meaning of Section 409A
will be September 30, 2008 and the six month delay shall end on April 1, 2009 (“Delay Date”). Each
payment under this Agreement and Release and any other Company plan in which you participate
(including the SICO Plans) will be treated as a separate payment for purposes of Section 409A. Any
reimbursements to which you may be entitled will not offset any amounts payable to you under this
Agreement and Release, and any reimbursements will be made to you no later than the end of the
calendar year in which such expenses were incurred and otherwise in accordance with the
reimbursement rules of Section 409A.

     5. Employee has been a participant in the American International Group, Inc. 2005-2006
Deferred Compensation Profit Participation Plan (the “AIG DCPPP”). The AIG DCPPP matures two years
from the inception of such plan (the “Maturity Date”). On the Maturity Date of the plan, a certain
number of shares of AIG Common Stock were set aside for Employee in accordance with the terms
thereof (with respect to the AIG DCPPP, the total set aside shares and pro rata reload shares is a
total of 48,000, hereinafter the “AIG DCPPP Shares”). The Company will provide Employee the AIG
DCPPP Shares (plus any shares attributable to stock splits or stock dividends paid prior to the
payment of the AIG DCPPP Shares to Employee) in accordance with the terms and conditions of the AIG
DCPPP. The AIG DCPPP Shares shall be issued to Employee within ten (10) business days after the
Delay Date.

In the event of Employee’s death prior to the Delay Date, Employee’s estate would receive the AIG
DCPPP Shares within ten (10) business days after the Delay Date. No cash dividends or other
property rights pertaining to the AIG DCPPP Shares (other than the stock splits or stock dividends
described above) will accrue or accumulate to Employee or Employee’s estate’s benefit during the
period prior to Employee’s receipt of such shares in accordance with the terms of this Agreement
and Release.

     6. In accordance with the terms and conditions of the AIG Partners Plan the Company will
provide Employee: (a) with respect to the 2006 transition grant, 16,188 shares of AIG Common Stock,
payable within ten (10) business days after the Delay Date; (b) with respect to the 2007 grant,
that number of shares of AIG Common Stock that are attributable to the
number of performance RSUs earned based on the Company’s performance in accordance with such plan
(21,000 shares upon achievement of target-level performance), payable within ten (10)

2

 

business days
after the Delay Date; and (c) with respect to the 2008 grant, that number of shares of AIG Common
Stock that are attributable to the number of performance RSUs earned based on the Company’s
performance in accordance with such plan (9,000 shares upon achievement of target-level
performance), payable within ten (10) business days after the Delay Date.

     7. In accordance with the terms and conditions of the AIG Senior Partners Plan (the “SPP”) and
the AIG 2005 Senior Partners Plan (the “2005 SPP”) the Company will provide Employee:

	 	(a)	 	Under the 2005 SPP: (1) with respect to the 2005 transition period, $2,475,000.00
payable within ten (10) business days after the Delay Date; and (2) amounts equal to and
paid contemporaneously with any dividend-related payments made under such plan on the
amount referenced in (1) above, calculated in the manner set forth in the 2005 SPP, until
such amount is paid in accordance with this Agreement and Release.
	 
	 	(b)	 	Under the SPP:

	 	(1)	 	with respect to the 2004-2006 performance period, (x) an amount equal to the value of 1125
units if earned based upon the Company’s performance in accordance with the SPP (on the date
hereof, estimated to have an earned value of $3,305.00 per unit, $3,718,125.00 in the aggregate),
payable within ten (10) business days after the Delay Date; and (y) amounts equal to and paid
contemporaneously with any dividend-related payments made under the SPP on the value attributable
to the amount referenced in (x) above, calculated in the manner set forth in the SPP but assuming
that the Weighted Average SPU Value (as defined in the SPP) attributable to each unit included in
calculation of the aggregate amount referenced in (x) above is equal to the value earned per unit
for 2006 (currently estimated at $3,305.00 per unit), until such amount is paid in accordance with
this Agreement and Release.
	 
	 	(2)	 	with respect to the 2005-2007 performance period, (x) an amount equal to the value of 1125
units if earned based upon the Company’s performance in accordance with the SPP (on the date
hereof, estimated to have an earned value of $2,717.00 per unit, $3,056,625.00 in the aggregate),
payable within ten (10) business days after the Delay Date; and (y) amounts equal to and paid
contemporaneously with any dividend-related payments made under the SPP on the value attributable
to the amount referenced in (x) above, calculated in the manner set forth in the SPP but assuming
that the Weighted Average SPU Value (as defined in the
SPP) attributable to each unit included in calculation of the aggregate amount referenced in
(x) above is equal to the value

3

 

	 	 	 	earned per unit for 2007 (currently estimated at $2,717.00 per
unit), until such amount is paid in accordance with this Agreement and Release.
	 
	 	(3)	 	with respect to the 2006-2008 performance period, (x) an amount equal to the value of 1125
units if earned based upon the Company’s performance in accordance with the SPP (to be calculated),
payable within ten (10) business days after the Delay Date; and (y) amounts equal to and paid
contemporaneously with any dividend-related payments made under the SPP on the value attributable
to the amount referenced in (x) above, calculated in the manner set forth in the SPP but assuming
that the Weighted Average SPU Value (as defined in the SPP) attributable to each unit included in
calculation of the aggregate amount referenced in (x) above is equal to the value earned per unit
for 2008 (to be calculated), until such amount is paid in accordance with this Agreement and
Release.

     8. In accordance with the terms and conditions of the Option/RSU Plans, within ten (10)
business days after the Delay Date Employee shall receive: (a) 11,483 RSUs (a seventy-five percent
(75%) pro-rated amount of the 15,311 unvested RSUs from the grant date of December 13, 2007), and
(b) vesting in any currently unvested options, as per the terms and conditions of such option
plans.

     9. Employee agrees that if Employee fails to fulfill Employee’s duties under paragraphs 11,
12, 13 or 14 below Employee will forfeit the right to receive any of the payments or benefit
enhancements set forth in paragraphs 2 and 3 above (and the Company shall be entitled to
immediately cease paying any amounts remaining due or providing any benefits to Employee pursuant
to this Agreement and Release) and, to the extent that any such payments already have been made to
Employee or benefit enhancements already implemented at or prior to the time of Employee’s failure
to satisfy any such condition, Employee must immediately return to the Company all such sums
already paid to Employee. Employee acknowledges and agrees that the Company’s, and where applicable
the Released Parties’ (as defined below), remedies at law for a breach or threatened breach of any
of the provisions of paragraph 9, 11, 12, 13, 14, 15 or 16 of this Agreement and Release would be
inadequate and, 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, the Company or the Released Parties, without
posting any bond, shall be entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other equitable remedy which
may then be available.

     10. In the event that Employee’s employment is terminated by the Company prior to the
Termination Date for Cause (as defined below), or Employee resigns from the Company for any reason
prior to the Termination Date, all of Employee’s rights and the Company’s
obligations hereunder shall cease and be forfeited as of the date of such termination, including,
without limitation, Employee’s right to receive any payments or benefits set forth in paragraphs

4

 

2
and 3 above and Employee shall have no further right or claim to any compensation, benefits or
severance under this Agreement and Release or otherwise against any member of the AIG Family from
and after the date of termination. Cause means: (a) Employee’s failure, refusal or neglect to
perform Employee’s duties in the manner prescribed by the Company; (b) Employee’s engagement in
conduct materially injurious to the business reputation or financial condition of any member of the
AIG Family; (c) Employee’s breach of any provision of this Agreement and Release or any breach of
any fiduciary or legal duty to the AIG Family; (d) Employee’s failure to comply with any rule or
regulation of a regulatory or self regulatory agency with jurisdiction over the activities of the
AIG Family, or any willful violation of the Company’s Code of Conduct; (e) the Employee’s
conviction of, or Employee’s entry of a plea of guilty or no contest with respect to, a felony or a
lesser crime involving fraud, dishonesty or moral turpitude; (f) any willful malfeasance, willful
misconduct or gross negligence of Employee in connection with his employment; or (g) any
embezzlement, theft or fraud by Employee or his agent.

     11. Employee hereby waives and forever releases and discharges any and all rights and claims
Employee may have against the Company, its affiliate or subsidiary companies, or any officer,
director or employee of, or any benefit plan (including, but not limited to the DCPPP, AIG Partners
Plan, the SPP, the 2005 SPP, or the American International Group, Inc. Executive Severance Plan
dated June 27, 2005 and as amended and restated March 13, 2007) 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 general 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 Agreement and Release. Other than the
sums and benefits set forth in this Agreement and Release, there are no other sums payable to
Employee by the Released Parties. In addition, Employee agrees that there will be no reinstatement
or re-employment with the Released Parties and agrees not to bring any claim based upon the failure
or refusal of any of the Released Parties to employ Employee hereafter. Nothing herein modifies or
affects any vested rights that Employee may have under the Retirement Plan, American International
Group, Inc. Incentive Savings Plan, the American International Group, Inc. Supplemental Incentive
Savings Plan, or the Option/RSU Plans; nor does this Agreement and Release confer any such rights,
which are governed by the terms of the respective plans (and any agreements under such plans).

     12. Employee agrees that when Employee’s employment is terminated Employee will execute and
not revoke the General Release attached hereto as Attachment A.

     13. Employee agrees that during Employee’s employment with the Company and for two (2) years
after the Termination Date, Employee shall not: (a) without the prior written consent of the
Company, have performed any services for any person other than the Company if such services, in the
sole discretion of the Compensation and Management Resources Committee
of the Company (the “Compensation Committee”), upon the recommendation of the Chief Executive
Officer of the Company, may be deemed to be in competition with the Company, its

5

 

subsidiaries or
its affiliates (collectively, the “AIG Family”); (b) have performed any acts which could be
considered by the Compensation Committee, upon the recommendation of the Chief Executive Officer of
the Company, to be detrimental to the name, reputation or interest of a member of the AIG Family,
including, but not limited to, the inducement of any other person to leave the employ of a member
of the AIG Family, or the inducement of any person placing insurance or reinsurance with a member
of the AIG Family or purchasing any other product or service from a member of the AIG Family to
transfer such business to a person or entity unrelated to the AIG Family or (c) regardless of who
initiates the communication, have solicited, participated in the solicitation or recruitment of, or
in any manner encouraged or provided assistance to, any employee, consultant or agent of the AIG
Family to terminate his or her employment or other relationship with the AIG Family or to leave its
employ or other relationship with the AIG Family for any engagement in any capacity or for any
other person or entity.

     14. Employee agrees to assist the Company regarding business matters through the Termination
Date. In addition, Employee agrees (whether during or after Employee’s employment with the Company)
to cooperate (a) with the AIG Family in connection with any litigation or regulatory matters in
which Employee may have relevant knowledge or information and (b) with all government authorities
on matters pertaining to any investigation, litigation or administrative proceeding pertaining to
the Released Parties. This cooperation shall include, without limitation, the following: (1) to
meet and confer, at a time mutually convenient to Employee and the member(s) of the AIG Family,
with the AIG Family’s designated in-house or outside attorneys for trial preparation purposes,
including answering questions, explaining factual situations, preparing to testify, or appearing
for deposition; (2) to appear for trial and give truthful trial testimony without the need to serve
a subpoena for such appearance and testimony; (3) to give truthful sworn statements to the AIG
Family’s attorneys upon their request and, for purposes of any deposition or trial testimony, to
adopt the AIG Family’s attorneys as Employee’s own (provided that there is no conflict of interest
that would disqualify the attorneys from representing Employee), and to accept their record
instructions at deposition.

     15. Employee agrees (whether during or after Employee’s employment with the Company) not to
issue, circulate, publish or utter any false or disparaging statements, remarks or rumors about the
Released Parties.

     16. Employee acknowledges that the disclosure of this Agreement and Release or any of the
terms hereof could prejudice the Company and would be detrimental to the Company’s continuing
relationship with its employees. Accordingly, Employee agrees not to discuss or divulge either the
existence or contents of this Agreement and Release to anyone other than Employee’s immediate
family, attorneys or tax advisors, and further agrees to use Employee’s best efforts to ensure that
none of those individuals will reveal its existence or contents to anyone else. Employee shall not,
without the prior written consent of the Company, use, divulge, disclose or make accessible to any
other person, firm, partnership, corporation or other entity, any “Confidential Information” (as
defined below) except while employed by the Company, in furtherance of the business of and for the
benefit of the AIG Family, or any “Personal
Information” (as defined below); provided that Employee may disclose such information when required
to do so by a court of competent jurisdiction, by any governmental agency having

6

 

supervisory
authority over the business of a member of the AIG Family, as the case may be, or by any
administrative body or legislative body (including a committee thereof) with jurisdiction to order
Employee to divulge, disclose or make accessible such information; provided, further, that in the
event that Employee is ordered by a court or other government agency to disclose any Confidential
Information or Personal Information, Employee shall (a) promptly notify the Company of such order,
(b) at the written request of the Company, diligently contest such order at the sole expense of the
Company, and (c) at the written request of the Company, seek to obtain, at the sole expense of the
Company, such confidential treatment as may be available under applicable laws for any information
disclosed under such order. For purposes of this paragraph, (1) “Confidential Information” shall
mean information concerning the employees, financial data, strategic business plans, product
development (or other proprietary product data), customer lists, marketing plans and other
proprietary and confidential information relating to the business of the AIG Family or customers,
that, in any case, is not otherwise available to the public (other than by Employee’s breach of the
terms hereof) and (2) “Personal Information” shall mean any information concerning the personal,
social or business activities of the officers or directors of any member of the AIG Family.
Promptly after the End Work Date Employee shall return all property belonging to the AIG Family,
including, without limitation, files, records, disks and any media containing Confidential
Information or Personal Information.

     17. All discoveries, inventions, ideas, technology, formulas, designs, software, programs,
algorithms, products, systems, applications, processes, procedures, methods and improvements and
enhancements conceived, developed or otherwise made or created or produced by the Employee alone or
with others, and in any way relating to the business or any proposed business of the Company of
which the Employee has been made aware, or the products or services of the Company of which the
Employee has been made aware, whether or not subject to patent, copyright or other protection and
whether or not reduced to tangible form, at any time during the Employee’s employment with the
Company (“Developments”), shall be the sole and exclusive property of the Company. Employee agrees
to, and hereby does, assign to the Company, without any further consideration, all of Employee’s
right, title and interest throughout the world in and to all Developments. Employee agrees that all
such Developments that are copyrightable may constitute works made for hire under the copyright
laws of the United States and, as such, acknowledges that the Company is the author of such
Developments and owns all of the rights comprised in the copyright of such Developments, and
Employee hereby assigns to the Company without any further consideration all of the rights
comprised in the copyright and other proprietary rights Employee may have in any such Development
to the extent that it might not be considered a work made for hire. Employee shall make and
maintain adequate and current written records of all Developments and shall disclose all
Developments promptly, fully and in writing to the Company promptly after development of the same,
and at any time upon request.

     18. The payments and benefits set forth in paragraphs 2 and 3 include consideration provided
to Employee over and above anything of value to which Employee is already entitled. Employee
acknowledges and understands that Employee is hereby being advised to consult with, and has
consulted with, an attorney prior to executing this Agreement and Release. Employee
also acknowledges and understands that Employee has the right to consider the terms of this
Agreement and Release for twenty-one (21) days, running from the date of Employee’s receipt

7

 

of this
Agreement and Release, before signing this Agreement and Release. Upon the signing of this
Agreement and Release by Employee, Employee understands that Employee shall have a period of seven
(7) days following Employee’s signing of this Agreement and Release in which Employee may revoke
this Agreement and Release by providing written notice of revocation delivered to Marc Bernstein,
Associate General Counsel, American International Group, Inc., 70 Pine Street, 31st Floor, New
York, New York 10270, no later than 5:00 p.m. on the seventh day after Employee has signed this
Agreement and Release. This Agreement and Release will not become effective and enforceable until
the eighth day after Employee’s signature (if not revoked pursuant to the terms of this paragraph).
Employee warrants the Employee is fully competent to enter into this Agreement and Release; that
Employee has read this Agreement and Release and fully understands its meaning; that Employee
knowingly and voluntarily enters this Agreement and Release; and that Employee agrees to comply
with its terms and conditions.

     19. All payments (whether in cash, shares or otherwise) provided for under this Agreement and
Release are subject to applicable tax withholdings.

     20. If any term or provision of this Agreement and Release, or the application thereof to any
person or circumstances will to any extent be invalid or unenforceable, the remainder of this
Agreement and Release, or the application of such terms to persons or circumstances other than
those as to which it is invalid or unenforceable, will not be affected thereby, and each term of
this Agreement and Release will be valid and enforceable to the fullest extent permitted by law.

     21. This Agreement and Release constitutes the entire understanding and agreement between the
Company and Employee with regard to all matters herein. There are no other agreements, conditions,
or representations, oral or written, express or implied, with regard thereto. This Agreement and
Release may be amended only in writing, signed by the parties hereto.

     22. Any dispute arising under this Agreement and 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.

	 	 	 	 	 	 	 
	 	 	AMERICAN INTERNATIONAL GROUP, INC.
	 
	 

	 	By:	 	/s/ Kathleen E. Shannon	 	9/25/08
	 

	 	 	 	 
	 	 
	 

	 	 
	 	Name: Kathleen E. Shannon	 	Date
	 

	 	 	 	Title: Senior Vice President and
Secretory	 	 
	 
	 	 	 	 	 	 
	 

	 	/s/
Robert M. Sandler
	 	9/25/08
	 	 	ROBERT M. SANDLER	 	Date

8

 

ATTACHMENT A

GENERAL RELEASE

     WHEREAS American International Group, Inc. (the “Company”) and Robert M. Sandler (“Employee”)
entered into an Agreement and Release;

     WHEREAS any terms defined in the Agreement and Release have the same definition in this
General Release; and

     WHEREAS Employee’s employment with the Company terminated on September 30, 2010 (the
“Termination Date”);

     NOW, THEREFORE, Employee agrees as follows:

     1. In consideration of the payments and benefits described in paragraphs 2 and 3 of the
Agreement and Release, Employee hereby waives and forever releases and discharges any and all
claims Employee may have against the Company, its affiliate or subsidiary companies, or any
officer, director or employee of, or any benefit plan (including, but not limited to the DCPPP, AIG
Partners Plan, the SPP, the 2005 SPP, or the American International Group, Inc. Executive Severance
Plan dated June 27, 2005 and as amended and restated March 13, 2007) 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 general 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 General Release. Other than the sums and
benefits set forth in the Agreement and Release, there are no other sums payable to Employee by the
Released Parties. Nothing herein modifies or affects any vested rights that Employee may have under
the American International Group, Inc. Retirement Plan, American International Group, Inc.
Incentive Savings Plan, the American International Group, Inc. Supplemental Incentive Savings Plan,
or the Option/RSU Plans; nor does this General 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 he 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 he is not aware of any basis on
which such a Proceeding could reasonably be instituted.

     3. Employee acknowledges and understands that Employee is hereby being advised to consult with
an attorney prior to executing this General Release. Employee also acknowledges and understands
that Employee has the right to consider the terms of this General Release for twenty-one (21) days,
running from the date of Employee’s receipt of this General Release,

before signing this Agreement and Release. However, in no event may Employee sign this General
Release before the Termination Date.

 

 

     4. Upon the signing of this General Release by Employee, Employee understands that Employee
shall have a period of seven (7) days following Employee’s signing of this General Release in which
Employee may revoke this General Release. Employee understands that this General Release shall not
become effective or enforceable until this seven (7) day revocation period has expired, and that
neither the Company nor any other person is under any obligations pursuant to paragraphs 2 and 3 of
the Agreement and Release until eight (8) days have passed since Employee’s signing of this General
Release without Employee having revoked this General Release. If Employee revokes this General
Release, Employee will be deemed not to have accepted the terms of this General Release, and no
action will be required of the Released Parties under any section of the Agreement and Release.

     5. This General Release does not constitute an admission of liability or wrongdoing of any
kind by Employee or the Released Parties.

     6. Any dispute arising under this Agreement and 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.

	 	 	 
	 
	 

	 	 
	DATE

	 	ROBERT M. SANDLER

ii

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