Document:

Exhibit
10(3)

 

AMERICAN
INTERNATIONAL GROUP, INC.

2012 EXECUTIVE SEVERANCE PLAN

 

The
Compensation and Management Resources Committee of the Board of Directors (the
“Compensation Committee”) of American International Group, Inc., a
Delaware corporation (the “Company”), has adopted this American
International Group, Inc. 2012 Executive Severance Plan (the “Plan”),
first effective as of December 4, 2012 (the “Effective Date”), amended
as of December 19, 2013 and September 9, 2014.  Terms not defined herein have
the meanings provided in the Glossary of Terms.

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 the
Plan whose employment is terminated under the circumstances set forth in the
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.

III.        
Eligibility 

The
employees eligible to participate in the Plan at any time (the “Eligible
Employees”) shall be comprised of each employee who (1) is a full-time
employee in grade level 27 or above, or who is a full-time employee and was in
grade level 27 or above in the twelve (12) months immediately prior to the date
of termination, at the time of the termination of his or her employment or (2)
is eligible to participate in the American International Group, Inc. Amended
and Restated Executive Severance Plan, first effective as of March 11, 2008 and
as amended (the “Old Plan”) as of the Effective Date (an “Old Plan
Participant”).  Notwithstanding the foregoing, 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; provided 
that payment of statutorily-required severance shall not prohibit an employee
from being an Eligible Employee.  Receipt of the Plan by an Old Plan Participant
shall be deemed to constitute notice, delivered as of the Effective Date, for
the purpose of terminating the Old Plan under Section VIII of the Old Plan. 

IV.        
Severance 

Subject
to Section IV.G below, 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 such benefits shall be modified as
set forth in the appendices to the Plan to comply with local laws, bylaws,
statutes, regulations, codes of practice or applicable guidance issued by a
governmental department or regulatory authority (together referred to as “Local
Law”) for any employee whose primary worksite is outside of the United States 

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but is not classified as a Mobile Overseas Personnel; and provided, 
further, that any
Eligible Employee who experiences a “Covered Termination” and is entitled to
statutorily-required severance shall receive the greater of such
statutorily-required severance and the benefits described in this Section IV
or shall have his or her benefits described in this Section IV reduced
by the statutorily-required severance paid to the Eligible Employee, as
required by applicable law.

A
“Covered Termination”  shall be:

(1) For all
Eligible Employees, a termination of service during the term of the Plan for
any reason other than the Eligible Employee’s: (a) death; (b) Disability;
(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 (for purposes of this Plan, the term subsidiaries shall
be deemed to include both direct and indirect subsidiaries);
and

(2)
Notwithstanding paragraph (1) above, for any Eligible Employees in grade level
27 or above, such Eligible Employee’s termination of service during the term of
the Plan as a result of resignation from his or her employment for Good Reason.

Unless
otherwise stated in the Plan, for purposes of an Eligible Employee’s employment
under the Plan, “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 and, to the
extent consistent with the foregoing, shall be the “last day worked/end work
date” that is coded in the payroll system applicable to the Eligible Employee. 
Solely for purposes of this Plan, an Eligible Employee’s grade level shall be
deemed to be the highest grade level at which the Eligible Employee was
employed in the twelve (12) months immediately prior to his or her date of
termination.

 

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, with such documentation and
each reimbursement to occur not later than one year after the Eligible
Employee’s date of termination); and (3) any accrued but unused vacation pay in
a lump sum paid within two and one-half months after the end of the calendar
year in which the Eligible Employee’s date of termination occurs (the “Termination
Year”).  

B.   Severance,
Generally

Except
as provided in Section IV.C below, in the event of a Covered
Termination, an Eligible Employee shall be entitled to receive the following:

 (1)       With
respect to an Eligible Employee’s annual short-term incentive award (“STI
Award”) under the American International Group, Inc. Short-Term Incentive Plan
or its successor plan (the “STI Plan”), an Eligible Employee shall receive:  

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(a)     The “Prior
Year Incentive” as calculated below.

(i)    If the
date of termination is after the end of the applicable STI Plan performance
year, but prior to the Threshold/First Payment Date with respect to an STI
Award, an amount equal to the Eligible Employee’s STI
Target for such performance year as adjusted for the actual performance
of the Company and/or applicable business unit or function, as determined by
the Compensation Committee in its sole discretion. 

(x)  For purposes of this section, Threshold/First
Payment Date will mean (i) for Eligible Employees who have an STI Award that is
entirely payable in the year following the STI Plan performance year, the date
such STI Award is paid, and (ii) for Eligible Employees who have a portion of
their STI Award designated as a “Deferred STI Award” such that a portion of
such STI Award is to be paid two or more calendar years after the STI Plan
performance year, the date the first  payment of such STI Award is paid.

(y) For purposes of this section, an
Eligible Employee’s STI Target will mean the target annual incentive amount
assigned to such Eligible Employee for a performance year pursuant to the STI
Plan.

(ii)     With
respect to Eligible Employees who have a portion of their STI Award designated
as a “Deferred STI Award,” if the date of termination is after the end of the
STI Plan performance year and  after the Threshold/First Payment Date for
such STI Award, the amount of the Deferred STI Award portion not yet paid.  

(iii)      In
all events, such amounts will be paid at the same time as they are paid to
similarly-situated active employees with similar STI Awards, and will be
subject to the same deferral, clawback and repayment terms. For point of
clarity, Prior Year Incentive payments to Eligible Employees covered under the
AIG Clawback Policy, as may be amended from time to time, are subject to
forfeiture and/or repayment to the extent provided for in such policy.

(b)     The “Pro Rata
Incentive” for the Termination Year as calculated below.

(i)         If
the date of termination is on or after April 1 of a performance year through
December 31 of such performance year, a Pro Rated portion of an amount equal to
the Eligible Employee’s STI Target as adjusted for the actual performance of
the Company and/or applicable business unit or function, as determined by the
Compensation Committee in its sole discretion. 

(x) For purposes of this section, Pro
Rated will mean a fraction the numerator of which is the number of full months
in the Termination Year that the Eligible Employee was actively employed or on
an approved leave of absence during which the Eligible Employee was receiving
salary continuation from a Company payroll (a “Paid Leave of Absence”) and the
denominator of which is 12. 

(ii)        To
the extent an Eligible Employee experiences a Covered Termination prior to
April 1 of the Termination Year, no Pro Rata Incentive shall be paid.

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(iii)        
All
Pro Rata Incentive payments will be paid at the same time or times as they are
paid to similarly situated active employees with similar STI Awards, and will
be subject to the same deferral, clawback and repayment terms. For point of
clarity, Pro Rata Incentive payments to Eligible Employees covered under the
AIG Clawback Policy, as may be amended from time to time, are subject to
forfeiture and/or repayment to the extent provided for in such policy.

(iv)         
For
avoidance of doubt, the terms STI Target and STI Award as used in this Section
include any portion of an STI Target and STI Award designated as a Deferred STI
Award (described above).  

For the
avoidance of doubt, in no event shall an Eligible Employee be entitled to a
duplication of any amounts payable under this paragraph or paragraph (1) above
and under the terms of the American International Group, Inc. Short-Term
Incentive Plan as a result of his or her Covered Termination.

(2)        A
lump sum cash payment equal to the product of: (a) a “Multiplier” (as defined
below) times  (b) the sum of (i) the greater of actual base salary earned
by the Eligible Employee over the twelve (12) months immediately prior to the
date of termination and the Eligible Employee’s annualized base salary rate as
of the date of termination plus  (ii) the average of the Eligible
Employee’s annual short-term incentive bonus actually paid for the three (3)
most recently completed calendar years preceding  the Termination Year for
which annual short-term incentive bonuses had generally been paid. Such amount
will be paid as soon as practicable following the Covered Termination but in no
event later than sixty (60) days thereafter.  In the event of any unanticipated circumstances
that result in the Company, in its sole discretion, paying such amount later
than 60 days following the Covered Termination, in no event will such amount be
paid later than March
15th of the year immediately following the Termination Year. 
If the Eligible Employee resigns for Good Reason, the amount described in
clause (i) shall be the greater of actual base salary earned by the Eligible
Employee over the twelve (12) months immediately prior to the event giving rise
to Good Reason and the Eligible Employee’s annualized base salary rate
immediately prior to the event giving rise to Good Reason.

The
“Multiplier” shall be as follows:

(1)  For an
Eligible Employee in grade level 27 or 28: (a) 1 in the event of a termination
without Cause or resignation for Good Reason; or (b) 1.5 in the event of a
termination without Cause or resignation for Good Reason within twenty-four
(24) months following a Change in Control (a “Change in Control Termination”);
and

(2)  For an
Eligible Employee in grade level 29 or above: (a) 1.5 in the event of a
termination without Cause or resignation for Good Reason; or (b) 2 in the event
of Change in Control Termination.

(3)        For
purposes of paragraph (1)(b) above, if no STI Target is established for an
Eligible Employee for the Termination Year, the Pro Rata Incentive shall be
based on the average of the Eligible Employee’s annual short-term incentive
bonuses paid with respect to the three (3) most recently completed calendar
years preceding the Termination Year for which annual short-term incentive
bonuses had generally been paid; provided that (A) if the Eligible
Employee was not employed for all years that would otherwise be included in the
average, the Eligible Employee’s target annual short-term incentive bonus with respect
to the most recently completed calendar year preceding the Termination Year in
which the 

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Eligible Employee was employed shall be used
and (B) if the Eligible Employee received no annual short-term incentive bonus
for one of the years that would otherwise be included in the average as a
result of an approved leave of absence, the Eligible Employee’s target annual
short-term incentive bonus with respect to the most recently completed calendar
year preceding the Termination Year in which such condition did not apply shall
be used.

With
respect to paragraph 2 above, (a) 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; (b) if  the  Eligible  Employee  earns or is
awarded  no short-term incentive 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;
and (c) if an Eligible Employee was not employed long enough for the Eligible
Employee’s first short-term incentive bonus to be paid, the Eligible Employee’s
target short-term incentive bonus shall be used in lieu of the average
described above.  

For
the avoidance of doubt, with respect to this Section IV.B, (i) for any year in
which an Eligible Employee was a “Top 26-100” employee subject to the
determinations of the Special Master for TARP Executive Compensation (“the “Special
Master”), for the purposes of determining what constitutes a short-term
annual incentive bonus, (x) Variable Cash granted to the Eligible Employee (“Top
26-100 Variable Cash”) shall be deemed to be an annual short-term incentive
bonus to the extent actual annual short-term incentive bonus paid is used above
in this Section, and (y) Variable Cash targets with respect to the Eligible
Employee shall be deemed to be an annual short-term incentive bonus to the
extent target annual short-term incentive bonus is used above in this Section,
and (ii) for any year in which an Eligible Employee was a “Top 25” employee
subject to the determinations of the Special Master, the Eligible
Employee’s annual short-term incentive target amount for the Termination Year, shall be
deemed to be the annual short-term incentive bonus solely for purposes of this
Plan. 

         C.   
Severance for Old Plan Participants

If
an Old Plan Participant experiences a Covered Termination, he or she shall receive (1) the Prior Year Incentive (if applicable) , (2) the
Pro Rata Incentive and (3) severance equal to (i) for an Old Plan Participant
below grade level 27, the “Old Plan Benefit” (as defined below) or (ii) for an
Old Plan Participant in grade level 27 or above, (A) the Old Plan Benefit plus 
(B) the difference, if any, between the amount provided in Section IV.B(2)
and the “Old Plan Benefit” (the “New Plan Payment”).  The “Old Plan
Benefit” shall be 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 Old Plan
Participant:

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

(2)  The
average of the Old Plan Participant’s “Annual Cash Bonuses” (as defined below)
awarded and paid with respect to the three most recently completed calendar
years preceding the Termination Year (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 

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calendar
year in which the termination occurs, (b) if the Old Plan Participant 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 the Old Plan
Participant was employed and (c) if the Old Plan Participant 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 Termination Year in which such condition did not apply.  Solely for
purposes of this Plan, “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 Old Plan Participant, Top
26-100 Variable Cash and TARP restricted stock units issued to “Top 25”
employees in accordance with applicable regulations issued by the U.S.
Department of the Treasury, as applicable.

The
“Severance Period” shall be:

(a)  For each
Old Plan Participant who is a Senior Vice President
or higher of the Company as of the Transition Date (or, if earlier, the date of
termination), 24 months; and 

(b)  For all
other Old Plan Participants, one month per year of service with the Company up
to a maximum of 12 months, except that (a) no Old Plan Participant shall have a
Severance Period of less than six months regardless of years of service and (b)
any Old Plan Participant who was also eligible to receive benefits under the
American International Group, Inc. Executive Severance Plan that was terminated
as of June 26, 2008 (the “Initial Plan”) shall be entitled to a
Severance Period that is no shorter than what would have been provided to such
Old Plan Participant under the terms of the Initial Plan if such Old Plan
Participant had been terminated on December 31, 2007.  For the avoidance of
doubt, the Severance Period for an Old Plan Participant who is a Senior Vice
President solely of a subsidiary of the Company (and not of American
International Group, Inc.) shall be determined under this paragraph (2).

For
Covered Terminations prior to January 1, 2014 (the “Transition Date”),
the Old Plan Benefit shall be paid over the number of months in the Severance
Period in substantially equal weekly, biweekly, semi-monthly or monthly
installments (each, a “Severance Installment”) in accordance with the
Old Plan Participant’s employer’s normal payroll practices.  Severance
Installments paid to Old Plan Participants shall commence on a payroll date of
the Old Plan Participant’s employer within 60 days following the Old Plan
Participant’s termination of employment; provided that if the last day
of such 60-day period ends in a calendar year after the Termination Year, then
the Severance Installments shall commence in the second calendar year.  

For
Covered Terminations on or after the Transition Date, the Old Plan Benefit will
be paid in a lump sum in accordance with the payment timing set forth in
Section IV.B(2).

Any
New Plan Payment will be paid in a lump sum in accordance with the payment
timing set forth in Section IV.B(2) (provided  that any Pro Rata
Incentive will be paid in accordance with the payment timing set forth in Section
IV.B(1)(b) and any Prior Year Incentive will be paid in accordance with the
payment timing set forth in Section IV.B(1)(a)).   

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D.     Continued Health and Life
Insurance Coverage and Participation in Retiree Health and Retiree Life for
Eligible Employees 

Subject
to Section IV.F, if an Eligible Employee experiences a Covered
Termination, the Eligible Employee shall be entitled to continued health
insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”), if applicable, for a period in accordance with the
requirements under COBRA; provided, however, that the Eligible
Employee shall be solely responsible for paying the full cost of the monthly
premiums for such COBRA coverage; and provided, further, that such
coverage shall not be provided if during such period the Eligible Employee is
or becomes ineligible under the provisions of COBRA for continuing coverage. 
Any Eligible Employee who experiences a Covered Termination will receive one
(1) year of additional service credit and credit for additional age solely for
purposes of determining the Eligible Employee’s eligibility to participate in
any Company retiree health plan and, if eligible, may choose to participate in
any such plan as of his or her date of termination at the applicable rate or
pay for COBRA coverage, if applicable.  If such an Eligible Employee
chooses to pay for COBRA coverage and retains such coverage for the full COBRA
period, the Eligible Employee may participate in the applicable Company retiree
health plan(s) following the COBRA period.  

If
an Eligible Employee experiences a Covered Termination, the Eligible Employee
shall also be entitled to an additional lump-sum payment of $40,000 (the
“Supplemental Health & Life Payment”).  The Supplemental Health
& Life Payment may, among other things, be payable towards COBRA healthcare
and life insurance coverage after the Eligible Employee’s date of termination.

E.      Additional Non-qualified Pension
Credits for Eligible Employees

Subject
to Section IV.F, if an Eligible Employee experiences a Covered
Termination, the Eligible Employee will receive one (1) year of additional
service credit and credit for additional age solely for purposes of 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 Section 401 of the
Internal Revenue Code of 1986, as amended (the “Code”)) in which such
Eligible Employee
was actively participating immediately prior to his or her date of termination
(the “Non-Qualified Pension Plans”).  Eligible Employees
shall commence payments under the 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.      Transition of Old Plan
Participants

Notwithstanding
anything to the contrary set forth in the Plan, if an Old Plan Participant
experiences a Covered Termination before the Transition Date, the Old Plan
Participant shall not receive any benefits under Sections IV.D or IV.E 
of the Plan, and, instead, the terms of Sections IV.C through F of the Old Plan
shall apply.

G.      Limitations on Severance;
Reductions of 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 

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with any
applicable release and/or restrictive covenant agreement (referred to
generically as the “Release”) that the Company may require under other
compensation arrangements, any applicable employment agreement or the release
pursuant to Section VI below.  Failure to execute or adhere to such a
Release, or the revocation of such a Release, by the Eligible Employee shall
result in a forfeiture of all Severance under the Plan.  (For the avoidance of
doubt, any Severance Installment or other Severance benefit due under the terms
of the 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 enter
into other such releases or agreements as a condition to receiving Severance
under the Plan.

H.      Code Section 409A

Except
as provided below, payments under the Plan are intended to satisfy the
“short-term deferral exception” under section 409A of the Code (“Code section
409A”).

Notwithstanding
the foregoing, Old Plan Benefit payments with respect to Old Plan Participants
who experience a Covered Termination prior to the Transition Date are intended
to comply with Code section 409A, including any regulatory exceptions (such as
the short-term deferral and separation pay exceptions) that may be applicable,
and the Plan shall be interpreted, operated and administered accordingly.  To
the extent applicable, each payment described in this paragraph shall be
treated as a separate payment for purposes of Code section 409A and shall be
made only in the event of a “separation from service” within the meaning of
Code section 409A.  If an Old Plan Participant experiences a Covered
Termination on or after the Transition Date due to his or her resignation for
Good Reason and the Plan Administrator determines that the circumstances
constituting Good Reason occurred prior to the Transition Date (and, in any
event, would have constituted Good Reason under Section IV.K of the Old Plan),
any Severance benefit that would otherwise be payable or due under Section IV of the Plan
shall be paid at the time and in the form that severance benefits would have
been provided under the Old Plan.  If the Plan
Administrator determines that an Old Plan Participant who experiences a Covered
Termination prior to the Transition Date is a “specified employee” for purposes
of Code section 409A, any Severance benefit that would otherwise be payable or
due under Section IV of the Plan shall be delayed for six months to the
extent that such Severance is determined to constitute “deferred  compensation” under Code section 409A.  In such case, the Old
Plan Participant shall not receive such Severance
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 Old Plan Participant an amount
equal to the sum of the Severance benefits 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.  

The
Plan Administrator (as defined in Section VII.A)
will have full authority to give effect to the intent of this Section
VI.H. 

I.       Covenants and for “Cause”
Terminations

Notwithstanding
anything to the contrary in the Plan, (a) if at any time the Eligible Employee
breaches any of the provisions of a Release, or revokes it, or (b) if
within one year after the last payment of Severance under the Plan, with
respect to any Eligible 

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Employee under the purview of
the Compensation Committee, the Compensation Committee or, with respect to any
other Eligible Employee, the Senior C&B Executive 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 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 the 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 in effect on the date of
termination. 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.

K.        Non
U.S. Participants

To
the extent the Local Laws of a country or non-U.S. jurisdiction in which an
Eligible Employee works would prohibit any provision, feature or requirement of
the Plan, or such Local Laws, an applicable collective bargaining of similar
collective agreement, the determination of a court or other adjudicative body
or an Eligible Employee’s contract of employment would require that the
benefits provided under the Plan be duplicative of or in addition to other
Company or subsidiary or employer provided or paid severance benefits or
termination-related benefits to which such Eligible Employee is entitled, the
CMRC hereby delegates to the Senior HR Attorney and the Senior C&B
Executive, the responsibility to develop a written appendix to the Plan
specific to such country or non-U.S. jurisdiction that addresses the
problematic provision, feature or requirement while maintaining as much of the
intent and goals of the Plan as possible and also complying with Local Laws.  The
Senior HR Attorney and Senior C&B Executive. will share such appendix with
all Eligible Employees in such country or non-U.S. jurisdiction, and will
maintain an inventory of all such appendices.  The Senior HR Attorney and the
Senior C&B Executive shall periodically review such appendices to confirm
that they remain permissible, enforceable, and in accordance with Local Law.  

 

V.          
No
Duplication; No Mitigation

A.   No Duplication

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The
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 the Plan to give effect to the preceding sentence.  

B.   No Mitigation

In
order for an Eligible Employee to receive the Severance described in the Plan,
the Eligible Employee shall be under no obligation to seek other employment or
otherwise mitigate the obligations of the Company under the Plan, and there
shall be no offset against any amounts due under the 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 Sections IV.G and H  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 the Plan as Exhibit A, as such Release
may be modified by the Senior HR Attorney and the Senior C&B Executive or their
designee(s); 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 Senior HR Attorney and
the Senior C&B Executive or their designee(s) 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 the Plan, to interpret the Plan, adopt any
rules and regulations for carrying out the 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 the 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
the 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 the Plan.  The Compensation Committee and/or the
member of the Compensation Committee or the executive of the Company delegated
any authority under the Plan shall be referred to in the Plan as the “Plan
Administrator.”  

B.   Expenses and
Liabilities

All
expenses and liabilities that the Plan Administrator and the Claims
Administrator incur in connection with the administration of the 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 

-10-

 

 

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 the 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 the Plan in accordance with Section II 
of the 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 the
Plan.  Any notice of termination shall be in accordance with Section VIII.C
below.

B.   Amendment  

The
Compensation Committee may amend the 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 the
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 the 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.

Notwithstanding the foregoing, the Compensation Committee’s rights
and powers to amend the Plan shall be delegated to the Senior C&B Executive
who shall have the right to amend the Plan with respect to (i) amendments
required by relevant law, regulation or ruling, (ii) amendments that are not
expected to have a material financial impact on the Company, (iii) amendments
that can reasonably be characterized as technical or ministerial in nature, or
(iv) amendments that have previously been approved in concept by the
Compensation Committee. Notwithstanding the foregoing delegation, the Senior
C&B Executive shall not have the power to make an amendment to the Plan
that could reasonably be expected to result in a termination of the Plan or a
change in the structure 

-11-

 

 

or the powers, duties or
responsibilities of the Compensation Committee, unless such amendment is
approved or ratified by the Compensation Committee.

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.

IX.        
Claims
and Appeals Procedures

The
following claim review and claim appeal procedures apply to all claims of any
nature related to the Plan.  For purposes of the Plan, the “Claims
Administrator” is the Company’s most senior executive whose responsibility it
is to oversee both the Corporate Compensation Department and the Corporate
Benefits Department; provided however, if that aforementioned position
is vacant, then the Company’s senior most executive whose responsibility it is
to oversee all Human Resources matters of the Company on a global basis shall
be the Claims Administrator and if both of the immediately aforementioned
positions are vacant, then the Chief Executive Officer of the Company shall
appoint an individual to be the Claims Administrator.  The Claims
Administrator, in his or her discretion, may delegate in writing the Claims
Administrator responsibilities to a committee comprised of three individuals selected
from among the human resources executives and human resources attorneys of the
Company, 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 the Plan that such Eligible Employee has not received, such
Eligible Employee may file a claim for benefits under the Plan, as provided in
this Section IX of the 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 the
Plan, the Eligible Employee shall be considered not to have exhausted all
administrative remedies under the 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

The
Claims Administrator shall conduct the initial claim review.  The Claims
Administrator shall consider the applicable terms and provisions of the Plan
and 

-12-

 

 

amendments to the 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 the 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 the 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 the Plan, and shall coordinate with
the applicable Company payroll department, the Company benefits department, and
any other Company entity or counsel as necessary to implement the terms of Section
IV of the Plan.

-13-

 

 

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 the Plan and shall make an Eligible Employee unable to bring a
legal action to recover a benefit under the 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

The
Plan Administrator shall provide a notice of the 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:

-14-

 

 

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

(b) 
Reference to the specific provision(s) of the 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 the 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 the 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 the 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 the Plan.  With respect to any benefit plan, program, policy or
agreement that takes into account only base salary as relevant compensation,
only the portion of such Severance that is payable on account of annual base
salary as of the date of termination as calculated in Section IV.B(1) 
shall be taken into account for purposes of such benefit plan, program, policy
or agreement.

B.   Unfunded
Obligation

Any
Severance and benefits provided under the Plan shall constitute an unfunded
obligation of the Company.  Severance and other benefits paid under the Plan
will be made, when due, entirely by the Company from its general assets.  The
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 the Plan shall be provided under other
applicable employee benefit plans of the Company.  The Plan does not provide
the substantive benefits under such other employee benefit plans, and nothing
in the Plan shall restrict the Company’s ability to amend, modify or terminate
such other employee benefit plans.

C.   Employment
Status

-15-

 

 

The
Plan does not create an employment relationship between any Eligible Employee
and the Company or any of its subsidiaries.  The Plan is not a contract of
employment, is not part of a contract of employment (unless such contract
explicitly incorporates the Plan into such contract), 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 the Plan are included solely for convenience of
reference and shall not in any way affect the meaning of any provision of the
Plan.

E.   Governing Law

It
is intended that the 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 the Plan shall
be administered in a manner consistent with such intent.  The Plan
Administrator shall provide any documents relating to the Plan to the Secretary
of the U.S. Department of Labor upon request.  The Plan and all rights under
the 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.

In
the event that any provision of the Plan is not permitted by the Local Laws, of
a country or jurisdiction in which an Eligible Employee works, such Local Law
shall supersede or modify (as applicable) that provision of the Plan with
respect to that Eligible Employee. 

F.   Assignment 

The
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 the Plan had the Eligible Employee continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
the Plan, or as determined by the Compensation Committee, to the Eligible
Employee’s estate.  An Eligible Employee’s rights under the Plan shall not
otherwise be transferable or subject to lien or attachment. 

-16-

 

 

Glossary of Terms

“Board”
shall mean the Board of Directors of the Company.

“Cause”
shall mean (i) the Eligible Employee’s conviction, whether following trial or
by plea of guilty or nolo contendere (or similar plea), in a criminal
proceeding (A) on a misdemeanor charge involving fraud, false statements or
misleading omissions, wrongful taking, embezzlement, bribery, forgery,
counterfeiting or extortion, or (B) on a felony charge or (C) on an equivalent
charge to those in clauses (A) and (B) in jurisdictions which do not use those
designations; (ii) the Eligible Employee’s engagement in any conduct which
constitutes an employment disqualification under applicable law (including
statutory disqualification as defined under the Exchange Act); (iii) the
Eligible Employee’s violation of any securities or commodities laws, any rules
or regulations issued pursuant to such laws, or the rules and regulations of
any securities or commodities exchange or association of which the Company or
any of its subsidiaries or affiliates is a member; or (iv) the Eligible
Employee’s material violation of the Company’s codes or conduct or any other
Company policy as in effect from time to time.  The Determination as to whether
Cause has occurred shall be made by the Compensation Committee, with respect to
any Eligible Employee under the purview of the Compensation Committee, or the Senior
C&B Executive, with respect to any other Eligible Employee, in each case,
in its or his or her sole discretion.  The Compensation Committee or Senior
C&B Executive, as applicable, shall also have the authority in his or her sole
discretion to waive the consequences of the existence or occurrence of any of
the events, acts or omissions constituting Cause.  

“Change
in Control” shall mean the occurrence of any of the following events:

(1) 
Individuals who, on the Effective Date, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the
Board, provided that any person becoming a director subsequent to the
Effective Date, whose election or nomination for election was approved by a
vote of at least two-thirds of the Incumbent Directors then on the Board
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for director, without written
objection to such nomination) shall be an Incumbent Director; provided, however,
that no individual initially elected or nominated as a director of the Company
as a result of an actual or threatened election contest with respect to
directors or as a result of any other actual or threatened solicitation of
proxies or consents by or on behalf of any person other than the Board shall be
deemed to be an Incumbent Director; 

(2)  Any
“person” (as such term is defined in Section 3(a)(9) of the Exchange Act
and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), is or
becomes a “beneficial owner” (as defined in Rule 13d‐3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then
outstanding securities eligible to vote for the election of the Board (“Company
Voting Securities”); provided, however, that the event described
in this paragraph (2) shall not be deemed to be a Change in Control by
virtue of an acquisition of Company Voting Securities:  (A) by
the Company or any subsidiary of the Company (B) by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any subsidiary of
the Company or (C) by any underwriter temporarily holding securities pursuant
to an offering of such securities;

-1-

 

 

 

 

(3)  The
consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company (a “Business Combination”)
that results in any person (other than the United States Department of
Treasury) becoming the beneficial owner, directly or indirectly, of 50% or more
of the total voting power of the outstanding voting securities eligible to
elect directors of the entity resulting from such Business Combination; 

(4) The
consummation of a sale of all of substantially all of the Company’s assets
(other than to an affiliate of the Company); or

(5)  The
Company’s stockholders approve a plan of complete liquidation or dissolution of
the Company.

Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
any person acquires beneficial ownership of more than 50% of the Company Voting
Securities as a result of the acquisition of Company Voting Securities by the
Company which reduces the number of Company Voting Securities outstanding; provided
that if after such acquisition by the Company such person becomes the
beneficial owner of additional Company Voting Securities that increases the
percentage of outstanding Company Voting Securities beneficially owned by such
person, a Change in Control shall then occur.

“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 the Eligible Employee qualifies for income replacement benefits
under the Eligible Employee’s employer’s long-term disability plan for at least
3 months, or, if the Eligible Employee does not participate in such a plan, a
period of disability during which the Eligible Employee 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. 

“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from time
to time, or any successor thereto, and the applicable rules and regulations
thereunder.

“Good
Reason” shall mean, in the absence of written consent of the Eligible
Employee, a reduction of more than twenty percent (20%) in the Eligible
Employee’s annual target direct compensation (including annual base salary,
short-term incentive opportunity and long-term incentive opportunity); provided
that  such reduction will not constitute Good Reason if it results
from a Board-approved program generally applicable to similarly-situated
employees; provided,  further,  that prior to the Transition
Date, for Old Plan Participants, Good Reason shall have the meaning given in Section
IV.K the Old Plan.  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 Eligible
Employee’s “separation from service” (within the meaning of Code section 409A)
occurs no later than two years following the initial existence of the
circumstances giving rise to Good Reason.

-2-

 

 

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

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

 

-3-

 

 

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”).  

Each
term defined in the American International Group, Inc. 2012 Executive Severance
Plan (the “Plan”) has the same
meaning when used in this Agreement. 

In addition, each term defined in the American
International Group, Inc. Executive Severance Plan (the “Old Plan”) has the same meaning when used in sections of
this Agreement discussing the Old Plan.

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 

[Non
Grandfathered (Newly Eligible) Participants]

[The Employee
shall receive a lump sum severance payment in the gross amount of
$_______________, less applicable tax and benefit withholdings paid out in a
lump sum as soon as practicable but in no event later than sixty (60) days
following the Termination Date (and in accordance with Section IV.B(2)
of the Plan).  The Employee shall also receive a prorated annual short-term
incentive bonus for the Termination Year calculated in accordance with, and
payable in accordance with the payment timing set forth in, Section
IV.B(1)(b) of the Plan.  [The Employee shall also receive a lump sum
cash payment equal to the Employee’s annual short-term incentive bonus for the
Prior Year if such bonus has not been paid as of the date of termination
calculated in accordance with, and payable in accordance with the payment
timing set forth in, Section IV.B(1)(a) of the Plan.]    

[Grandfathered,
Old Plan Participants] 

[If
Terminated After the Transition Date] The Employee shall receive a
lump sum severance payment in the gross amount of $_______________, less
applicable tax and benefit withholdings paid out in a lump sum as soon as
practicable but in no event later than sixty (60) days following the
Termination Date (and in accordance with Section IV.C of the Plan).  

[If
Terminated Prior to the Transition Date] The Employee shall receive
Severance Installments in the gross amount of $_______________, less applicable
tax and benefit withholdings paid out over ________ months (in substantially
equal weekly, biweekly, or monthly installments) in accordance with Section
IV.C of the Plan, and 

A-4

 

 

Section IV.B of the Old
Plan, and the Company’s normal payroll practices.  The Severance Period (as
defined in the Old Plan) shall end on ____________________, 201__ (the “Severance
End Date”).  Solely for purposes of the AIG Retirement Plan and any life
insurance benefits provided pursuant to Section IV.F of the Plan and
Section IV.F. of the Old Plan, only that portion ($__________) of the Severance
Installments that is equal to the Employee’s regular salary installments at the
time of the Termination Date shall be treated as “salary” (the remainder,
$___________ shall be treated as non-salary).

[Regardless of
whether Termination occurs before or after Transition Date]

[
If Participant is Grade 27+: If dollar amount of severance is greater under new
ESP formula than under old ESP formula The Employee shall also
receive a New Plan Payment, if any, in accordance with Section IV.C of
the Plan in a lump sum as soon as practicable following the Termination Date
but in no event later than (60) days thereafter (and in accordance with Section
IV.C of the Plan).]  [If terminated after March 31st 
The Employee shall also receive a prorated annual short-term incentive
bonus for the Termination Year calculated in accordance with, and payable in
accordance with the payment timing set forth in, Section IV.B(1)(b) of
the Plan.] [If annual short-term bonus for prior year has not been paid
as of the date of termination The Employee shall also receive a lump
sum cash payment equal to the Employee’s annual short-term incentive bonus for
the Prior Year calculated in accordance with, and payable in accordance with
the payment timing set forth in, Section IV.B(1)(a) of the Plan.]  
 

The
Employee shall also be paid accrued wages, reimbursed expenses, and ________
days of accrued, unused paid time off (“PTO”) as of the Termination Date.  The
Employee shall not accrue any PTO after the Termination Date.

III.        
Other
Benefits

Nothing
in this Agreement modifies or affects any of the terms of any benefit plans or
programs (defined as
medical, life, pension and 401(k) plans or programs and including,
without limitation, the Company’s right to alter the terms of such plans or
programs).  No further deductions or employer matching contributions shall be
made on behalf of the Employee to the Incentive Savings Plan (“ISP”) as
of the last day of the pay period in which the Termination Date occurs.  

The
Employee shall no longer participate or be eligible for coverage under the
Short-Term and Long-Term Disability programs, and the ISP.  After the
Termination Date, the Employee may decide, under the ISP, whether to elect a
rollover or distribution of the Employee’s account balance or to keep the
account balance in the ISP.  [To the extent the Employee has amounts that
remain deferred under the Supplemental Incentive Savings Plan (“SISP”)
or the Executive Deferred Compensation Plan (“EDCP”) as of the
Termination Date, a distribution because of termination of employment of the
Employee’s account balance under the SISP and EDCP will be paid after
Termination Date pursuant to the terms of the SISP and EDCP. ] The Employee
shall not accrue vacation after the Termination Date. 

[At all times, for Newly Eligible Non-Grandfathered
Participants, and after the Transition Date, for all Participants]

[As set forth
in Section IV.D of the Plan, the Employee shall be entitled to continued
health insurance coverage under COBRA for a period in accordance with the
requirements under COBRA unless the Employee is or becomes ineligible under the
provisions of 

A-5

 

 

COBRA for continuing coverage.  The
Employee shall be solely responsible for paying the full cost of the monthly
premiums for COBRA coverage.  In addition, the Employee shall be entitled to
one (1) year of additional service credit and credit for additional age solely
for purposes of determining the Employee’s eligibility to participate in any
Company Retiree Medical program and, if eligible, may choose to participate in
such Company Retiree Medical program as of the Termination Date at the
applicable rate or pay for COBRA coverage.  If the Employee chooses to pay for
COBRA coverage and retains such coverage for the full COBRA period, the
Employee may participate in the Company Retiree Medical program following the
COBRA period.  The Employee shall also be entitled to a Supplemental Health
& Life Payment of $40,000 which may, among other things, be payable towards
COBRA and life insurance coverage after the Termination Date.

As
set forth in Section IV.E of the Plan, the Employee shall be entitled to
one (1) year of additional service credit and credit for additional age solely
for purposes of determining vesting and eligibility for retirement (including
early retirement) under the Non-Qualified Pension Plans.  Any payments under
the Non-Qualified Pension Plans shall commence 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
Termination Date.

Except
as set forth in this Agreement and Sections IV.D and E of the Plan there are no
other payments or benefits due to the Employee from the Company.  The Employee
acknowledges and agrees that the Company has made no representations to the
Employee as to the applicability of Code section 409A to any of the payments or
benefits provided to the Employee pursuant to the Plan or this Agreement.]] 

[For
Grandfathered Participants Prior to the Transition Date]

[In accordance
with Section IV.F. of the Plan and as set forth in Section IV.C. of the Old
Plan, the
Employee’s Severance Period shall be treated as continued employment for the
purpose of outstanding Senior Partners Units (“SPUs”) that are
earned but unvested

under the Senior Partners Plan, and
options, if any, in each case that would otherwise have vested or become
exercisable during the Severance Period had the Employee’s employment not
terminated.

 

[In accordance
with Section IV.F of the Plan, and as set forth in Section IV.D of the
Old Plan, the Employee shall be entitled to participate during the Severance
Period in the applicable Company-provided health plans for active employees in
which the 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 Employee participates in such plan, the
actuarial cost of such coverage in excess of the applicable employee contribution
paid by the Employee, as determined by the Company, shall be imputed as taxable
income to the Employee.  The Employee agrees that the Employee shall provide
promptly to the Claims Administrator or his or her designee, as applicable,
without request, all information known to the Employee that may be applicable
to, and all other information the Company may reasonably request for purposes
of, determining the Employee’s eligibility for continuing active employee
health coverage.

In
addition, in accordance with Section IV.F of the Plan and as set forth
in Section IV.D of the Old Plan, the 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 Employee’s eligibility to
participate in, and to calculate the amount of the 

A-6

 

 

Company
contribution towards, any Company retiree health plan.  For these purposes, the
Employee’s deemed period of employment service shall end as of the last day of
the Severance Period.  If the Employee would not have satisfied the eligibility
requirements to participate in any Company retiree health plan but for the
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 Employee, as determined by the Company, shall be imputed as income
for all periods in which such retiree health coverage is provided.] 

In
accordance with Section IV.F of the Plan, and as set forth in Section
IV.E of the Old Plan, the 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 Employee’s
benefit amounts, and determining vesting and eligibility for retirement
(including early retirement), under the Non-Qualified Pension Plans.  For the
avoidance of doubt, Severance Installments shall not be included in the
calculation of any of the Employee’s benefits under the Non-Qualified Pension
Plans.  Any payments under the Non-Qualified Pension Plans shall commence 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 Termination Date.

In
accordance with Section IV.F of the Plan, and as set forth in Section
IV.F of the Old Plan, the 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 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 Employee.

The
Employee will continue to participate in and accrue benefits in the AIG
Retirement Plan through the Severance End Date.  The AIG Retirement Plan deems
an Employee on severance payroll continuation to be a participant in the Plan. 
If the Employee is vested and has the age and service to commence a benefit,
benefits under the AIG Retirement Plan may commence after the last day on
payroll.] 

Except
as set forth in this Agreement and Sections IV.C through F  of the
Old Plan, and Section IV.F of the Plan there are no other payments or benefits
due to the Employee from the Company.  The Employee acknowledges and agrees
that the Company has made no representations to the Employee as to the
applicability of Code section 409A to any of the payments or benefits provided
to the Employee pursuant to the Plan or this Agreement.]

IV.        
Release
of Claims

In
consideration of the payments and benefits described in Section IV of
the Plan and Section II and II of this Agreement, to which the Employee agrees
the Employee is not entitled until and unless the Employee 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, agrees to all
the terms and conditions of this Agreement and 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, agents
or the Plan (collectively, the “Releasees”), including, without
limitation, any complaint, charge or cause of action 

A-7

 

 

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, local and foreign 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 or with respect to any rights to indemnification under the Company’s
Charter and by-laws [or other document if not an AIG employee or officer] (the
“Unreleased Claims”).  In addition, 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 

(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 the Employee over and above anything of value to
which the 

A-8

 

 

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-Solicitation/Non-Competition 

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 one-year anniversary of such date (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,
consultant or agent of AIG. 

2. 
During the period commencing on the Employee’s Termination Date and ending on
the six-month anniversary of such date, the Employee shall not, directly or
indirectly:

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

A-9

 

 

(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. 

3.
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 such 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.

4. 
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.

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; 

(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 

A-10

 

 

(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
Confidential Information, Personal Information or information about the
existence or content of this Agreement when required to do so by a court of
competent jurisdiction, by any 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 

A-11

 

 

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 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 

A-12

 

 

The
Employee agrees (whether during or after the Employee’s employment with AIG) 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
the Employee’s own (provided  that there is no conflict of interest that
would disqualify the attorneys from representing the Employee), and to accept
their record instructions at deposition.  

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

X.          
Enforcement
and Clawback

If
(a) at any time the Employee breaches Section V of this Agreement, (b)
within one (1) year of the expiration of any restrictive covenant described in Sections
IX.A, B  or D  of this Agreement, AIG determines that the
Employee materially breached such restrictive covenant or (c) within one year
of the last payment date for any Severance benefit due under the terms of the
Plan, AIG 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, then: (x) no further payments or benefits
shall be due to the Employee under this Agreement and/or the Plan; and (y) the
Employee shall be obligated to repay to AIG, immediately and in a cash lump
sum, the amount of any Severance benefits (other than any amounts received by
the Employee under Section IV.D through F of the Plan) 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
performance, temporary restraining order, temporary or permanent injunction or
any 

A-13

 

 

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 sender’s receipt of confirmation of complete
transmission; and (z) notices sent by United 

A-14

 

 

States
registered mail shall be deemed given two days after the date of deposit in the
United States mail. 

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

If to the
Company, to: 

American
International Group, Inc.

80 Pine Street

New York, NY 10005 

Fax: 212-770-1584

Attn: General Counsel

 

 

IN WITNESS
WHEREOF, the parties hereto have duly executed this Agreement. 

 

EMPLOYEE

 

By:   ______________________________

Name:                 Date:

Title:

 

AMERICAN
INTERNATIONAL GROUP, INC.

 

By:   ______________________________

Name:                 Date:

Title:

 

A-15_

 

Exhibit 10(4)

 

 

American International
Group, Inc.

   2013 Long
Term Incentive Plan   

 

 

1.          
 Purpose; Definitions

This American International
Group, Inc. 2013 Long Term Incentive Plan (this “Plan”), as
amended September 9, 2014, is designed to provide selected officers and key
employees of American International Group, Inc. (“AIG” and
together with its consolidated subsidiaries, determined in accordance with U.S.
generally accepted accounting principles, the “Company”) with
incentives to contribute to the long-term performance of AIG in a manner that
appropriately balances risk and rewards.

Awards under this Plan are issued
under the American International Group, Inc. 2010 Stock Incentive Plan (as
amended from time to time or any successor stock incentive plan, including the
American International Group, Inc. 2013 Omnibus Incentive Plan, the “SIP”),
the terms of which are incorporated in this Plan.  Capitalized terms used in
this Plan but not otherwise defined in this Plan or in the attached Glossary of
Terms in Annex A have the meaning ascribed to them in the SIP.

2.          
 Performance
Period

This Plan will operate for
successive overlapping three-year performance periods (each, a “Performance
Period”) beginning on January 1 of each year.  The first Performance
Period will be from January 1, 2013 through December 31, 2015.  Each
Performance Period will be for successive three calendar-year periods until the
Plan is terminated by the Compensation and Management Resources Committee
(including any successor, the “Committee”) of the Board of
Directors of AIG (the “Board”). 

3.          
 Awards and Participants

A.          
Performance Share Units.  Awards issued under this Plan (“Awards”)
consist of performance share units (“PSUs”) providing holders
with the opportunity to earn shares of Common Stock (“Shares”)
based on achievement of performance criteria during the Performance Period. 
PSUs will be subject to the terms and conditions of this Plan and the SIP and
will be issued only to the extent permissible under relevant laws, regulatory
restrictions and agreements applicable to the Company, and the Committee may
establish another form of Award to the extent it determines appropriate for
some or all Participants (as defined below).  

B.          
Participants.  The Committee will from time to time determine
(1) the officers and key employees of the Company who will receive Awards (the
“Participants”) and (2) the number of PSUs awarded to each
Participant for a Performance Period.  No Award of PSUs to a Participant for a
Performance Period shall in any way obligate the Committee to (or imply 

 

 

that the Committee will) provide a similar Award (or any
Award) to the Participant for any future Performance Period.

C.          
Status of PSUs.   Each PSU constitutes an unfunded and
unsecured promise of AIG to deliver (or cause to be delivered) one Share (or,
at the election of AIG, cash equal to the Fair Market Value thereof) as
provided in Section 5.E.  Until such delivery, a holder of PSUs will have only
the rights of a general unsecured creditor and no rights as a shareholder of
AIG.

D.          
Award Agreements.  Each Award granted under the Plan shall be
evidenced by an award agreement that shall contain such provisions and
conditions as the Committee deems appropriate; provided that, except as
otherwise expressly provided in an award agreement, if there is any conflict
between any provision of this Plan and an award agreement, the provisions of
this Plan shall govern.  By accepting an Award pursuant to this Plan, a
Participant thereby agrees that the Award shall be subject to all of the terms
and provisions of this Plan, the SIP and the applicable award agreement. 
Awards shall be accepted by a Participant signing the applicable award
agreement, and returning it to the Company. Failure by a Participant to do so
within 90 days from the date of the award agreement shall give the Company the
right to rescind the Award.

4.          
 Performance Criteria

The number of PSUs earned for any
Performance Period will be based on one or more performance measures
established by the Committee in its sole discretion with respect to such
Performance Period (collectively, the “Performance Measures”). 
For each Performance Measure with respect to a Performance Period, the
Committee will establish a “Weighting,” “Threshold,”
“Target”  and “Maximum.” 

5.          
 PSUs Awards

A.          
Performance Awards.  A Participant’s award agreement will set
forth a PSU award opportunity, which will cover such target number of PSUs as
determined by the Committee (the “Target PSUs”).   

B.          
Performance Results.  At the end of the Performance Period,
the Committee will assess performance against each Performance Measure and
determine the Earned Percentage for each such Performance Measure as follows,
subject to the terms and conditions of this Plan and unless determined
otherwise by the Committee: 

	
  Performance

  	
  Earned Percentage

  
	
  Performance less than Threshold

  	
  0%

  
	
  Performance at Threshold

  	
  50%

  
	
  Performance at Target

  	
  100%

  
	
  Performance at or above Maximum

  	
  150%

  

2

 

 

The Earned Percentage for
performance between Threshold and Target and between Target and Maximum will be
determined on a straight-line basis.  For the avoidance of doubt, the Committee
retains discretion to reduce any Earned PSU Award to zero.

C.          
Earned PSUs.   The number of PSUs earned for the
Performance Period (the “Earned PSUs”) will equal the sum of the
PSUs earned for each Performance Measure, calculated as follows:  

	
  PSUs
  earned for a Performance Measure

  	
  =

  	
  Target
  PSUs

  	
  x

  	
  Earned
  Percentage

  	
  x

  	
  Weighting
  of Performance Measure

  

 

D.          
Vesting of Earned PSUs.  Except as provided in Section 6, and
subject to the other terms and conditions of this Plan and the applicable award
agreement, Earned PSUs or a portion shall vest in three equal annual
installments on January 1 of the year immediately following the end of the
Performance Period and January 1 of each of the next two years (each, a “Scheduled
Vesting Date”).   

E.          
Delivery of Earned PSUs.  Except as provided in Section 6,
AIG will deliver (or cause to be delivered) to the Participant Shares (or, at
the election of AIG, cash equal to the Fair Market Value thereof) in respect of
any Earned PSUs, or portion thereof, as promptly as administratively
practicable following the applicable Scheduled Vesting Date, provided that
any delivery following the first Scheduled Vesting Date for a given Award of
Earned PSUs shall be made as promptly as administratively practicable following
the determination of Earned PSUs by the Committee, but no later than April 30th
after such first Scheduled Vesting Date and delivery following the subsequent
Scheduled Vesting Dates shall be made within 30 days following the applicable
Scheduled Vesting Date.  Subject to Section 6, a Participant must be Employed
on the applicable Scheduled Vesting Date in order to be entitled to receive a
delivery of any portion of the Earned PSUs.  

6.          
 Vesting and Payout Upon Termination of Employment and Corporate Events

A.          
Termination Generally.  Except as otherwise provided in this
Section 6, if a Participant’s Employment is Terminated for any reason,
then any unvested Awards, or parts thereof, shall immediately terminate and be
forfeited.

B.          
Involuntary Termination, Retirement or Disability.  Subject
to Section 6.G, in the case of a Participant’s involuntary Termination without
Cause, Retirement or Disability, the Participant’s Award will 

3

 

 

immediately vest and the Shares (or cash) corresponding to
the Earned PSUs (based on the performance for the whole Performance Period)
will be delivered to the Participant on the dates specified in Section 5.E that
such Award would otherwise have been delivered if the Participant had continued
to remain Employed.  For the avoidance of doubt, an involuntary Termination
without Cause as provided in this Section 6.B shall not include a resignation
that a Participant may assert was a constructive discharge.

C.          
Qualifying Resignation.  Subject to Section 6.G, in the case
of a Participant’s Qualifying Resignation after the first year of a Performance
Period, the Participant’s Award will immediately vest and the Shares (or cash)
corresponding to the Earned PSUs (based on the performance for the whole
Performance Period) will be delivered to the Participant on the dates specified
in Section 5.E that such Award would otherwise have been delivered if the
Participant had continued to remain Employed.  For the avoidance of doubt, in
the case of a Participant’s Qualifying Resignation during the first year of a
Performance Period, the Participant’s Award shall immediately terminate and be
forfeited.

D.          
Death.  In the case of a Participant’s death during a
Performance Period or following a Performance Period but prior to the
Committee’s adjudication of performance under Section 5.B, the Participant’s
Award will immediately vest and the Shares (or cash) corresponding to the
Target PSUs will be delivered to the Participant’s estate as soon as
practicable but in no event later than the end of the calendar year or, if
later, within two and one-half months following the date of death.  In the case
of a Participant’s death following the Committee’s adjudication of performance
for a Performance Period under Section 5.B, the Participant’s Award will
immediately vest and the Shares (or cash) corresponding to the Earned PSUs
(based on performance for the whole Performance Period) will be delivered to
the Participant’s estate as soon as practicable but in no event later than the
end of the calendar year or, if later, within two and one-half months following
the date of death.

E.          
Change in Control.  In the case of a Change in Control
during a Performance Period and the Participant’s involuntary Termination
without Cause within twenty-four (24) months following such Change in Control,
the Participant shall receive Shares (or cash) corresponding to the Target PSUs,
unless the Committee determines to use actual performance through the date of
the Change in Control, and such Shares (or cash) will immediately vest.  In the
case of a Change in Control following a Performance Period and the
Participant’s involuntary Termination without Cause within twenty-four (24)
months following such Change in Control, the Participant shall receive Shares
(or cash) corresponding to the Earned PSUs (based on performance for the whole
Performance Period), and such Shares (or cash) will immediately vest.  Any such
vested amounts will be delivered by the end of the calendar year or, if later,
within two and one-half months following the Participant’s separation from
service, provided that no delivery will be delayed as a result of the Change
in Control.

 

4

 

 

F.          
Election to Accelerate or Delay Delivery.  The Committee may,
in its sole discretion, determine to accelerate or defer delivery of any Shares
(or cash) underlying the Awards granted under the Plan or permit a Participant
to elect to accelerate or defer delivery of any such Shares (or cash), in each
case in a manner that conforms to the requirements of Section 409A and is
consistent with the provisions of Section 8.E. 

G.          
Release of Claims.  In the case of a Participant’s
involuntary Termination without Cause, Qualifying Resignation or Retirement,
the Company will require the Participant to execute a release substantially in
the form attached as Annex B (the “Release”), subject to any
provisions that the Senior HR Attorney and the Senior C&B Executive or
their designee(s)  may amend or add to the
release in order to impose restrictive covenants requiring (x) confidentiality
of information, non-disparagement and non-solicitation of Company employees for
12 months following the Termination and (y) in the case of a Qualifying
Resignation, non-competition for twelve (12) months following the Termination,
in each case as a condition to receiving delivery of any Shares (or cash) under
any Awards.  The release must be executed by the Participant and become
irrevocable, in the case of a Participant’s involuntary Termination without
Cause, or Retirement, prior to or during the calendar year of the date on which
a delivery of Shares (or cash) with respect to the Earned PSUs is scheduled to
be delivered pursuant to Section 4.D, and in the case of a Participant’s
Qualifying Resignation, within 90 days following the Qualifying Resignation; provided
that if the release is executed after such time, the delivery of Shares (or
cash) with respect to such calendar year will be forfeited; provided,
further, that if the local laws of a country or non-U.S. jurisdiction in which
Participant performs services render invalid or unenforceable all or a portion
of the Release (subject to additional provisions as described above), the Senior
HR Attorney and the Senior C&B Executive or their designee(s)
shall have the discretion to create a release that incorporates as much of the
Release as possible while also complying with such local laws.

7.          
 Administration of this Plan

A.          
General.  This Plan shall be administered by the Committee
and the person or persons designated by the Committee to administer the Plan
from time to time.  Actions of the Committee may be taken by the vote of a
majority of its members.  The Committee may allocate among its members and
delegate to any person who is not a member of the Committee any of its
administrative responsibilities.  The Committee will have the power to
interpret this Plan, to make regulations for carrying out its purposes and to
make all other determinations in connection with its administration (including,
without limitation, whether a Participant has become subject to Disability),
all of which will, unless otherwise determined by the Committee, be final,
binding and conclusive.  The Committee may, in its sole discretion, reinstate
any Awards made under this Plan that have been terminated and forfeited because
of a Participant’s Termination, if the Participant complies with any covenants,
agreements or conditions that the Committee may impose; provided, 
however, that any delivery of Shares (or cash) under such 

5

 

 

reinstated Awards will not be made until the scheduled
times set forth in this Plan.

B.          
Non-Uniform Determinations.  The Committee’s determinations
under this Plan need not be uniform and may be made by it selectively with
respect to persons who receive, or are eligible to receive, Awards (whether or
not such persons are similarly situated).  Without limiting the generality of
the foregoing, the Committee will be entitled, among other things, to make
non-uniform and selective determinations as to the persons to become
Participants.

C.          
Determination of Employment.  The Committee, with respect to
any Participant under the purview of the Committee, and the Senior C&B
Executive, with respect to any other Participant, will have the right to
determine the commencement or Termination date of a Participant’s Employment
with the Company solely for purposes of this Plan, separate and apart from any
determination as may be made by the Company with respect to the individual’s
employment.

D.          
Amendments.   The Committee will have the power to amend this
Plan and the performance criteria established pursuant to Section 4 in any
manner and at any time, including in a manner adverse to the rights of the
Participants. The Committee shall also have the power, in its sole discretion,
to reduce the amount of any Target PSUs or Earned PSUs at any time including,
for the avoidance of doubt, after the Performance Period has ended.  Notwithstanding the foregoing, the Committee’s rights and
powers to amend the Plan shall be delegated to the Senior C&B Executive who
shall have the right to amend the Plan with respect to (i) amendments required
by relevant law, regulation or ruling, (ii) amendments that are not expected to
have a material financial impact on the Company, (iii) amendments that can
reasonably be characterized as technical or ministerial in nature, or (iv)
amendments that have previously been approved in concept by the Committee.
Notwithstanding the foregoing delegation, the Senior C&B Executive shall
not have the power to make an amendment to the Plan that could reasonably be
expected to result in a termination of the Plan or a change in the structure or
the powers, duties or responsibilities of the Committee, unless such amendment is
approved or ratified by the Committee.

E.          
No Liability.  No member of the Board of Directors of AIG or
any employee of the Company performing services with respect to the Plan (each,
a “Covered Person”) will have any liability to any person (including
any Participant) for any action taken or omitted to be taken or any
determination made, in each case, in good faith with respect to this Plan or
any Participant’s participation in it.  Each Covered Person will be indemnified
and held harmless by the Company against and from any loss, cost, liability, or
expense (including attorneys’ fees) that may be imposed upon or incurred by
such Covered Person in connection with or resulting from any action, suit or
proceeding to which such Covered Person may be a party or in which such Covered
Person may be involved by reason of any action taken or omitted to be taken
under this Plan and against and from 

6

 

 

any and all
amounts paid or Shares delivered by such Covered Person, with the Company’s
approval, in settlement thereof, or paid or delivered by such Covered Person in
satisfaction of any judgment in any such action, suit or proceeding against
such Covered Person, provided  that  the Company will have the
right, at its own expense, to assume and defend any such action, suit or
proceeding and, once the Company gives notice of its intent to assume the
defense, the Company will have sole control over such defense with counsel of
the Company’s choice.  To the extent any taxable expense reimbursement under
this paragraph is subject to Section 409A, (x) the amount thereof eligible in
one taxable year shall not affect the amount eligible in any other taxable
year; (y) in no event shall any expenses be reimbursed after the last day of
the taxable year following the taxable year in which the Covered Person
incurred such expenses; and (z) in no event shall any right to reimbursement be
subject to liquidation or exchange for another benefit.  The foregoing right of
indemnification will not be available to a Covered Person to the extent that a
court of competent jurisdiction in a final judgment or other final
adjudication, in either case, not subject to further appeal, determines that
the acts or omissions of such Covered Person giving rise to the indemnification
claim resulted from such Covered Person’s bad faith, fraud or willful
misconduct.  The foregoing right of indemnification will not be exclusive of
any other rights of indemnification to which Covered Persons may be entitled
under AIG’s Amended and Restated Certificate of Incorporation or Bylaws, as a
matter of law, or otherwise, or any other power that the Company may have to
indemnify such persons or hold them harmless.

F.          
Clawback/Repayment. Notwithstanding anything to the contrary
herein, Awards and any payments or deliveries under this Plan will be subject
to forfeiture and/or repayment to the extent provided in (i) the AIG Clawback
Policy, as in effect from time to time and (ii) other agreements executed by a
Participant.

8.          
 General Rules

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

B.          
Tax Withholding.  The delivery of Shares (or cash) under this
Plan is conditioned on a Participant’s satisfaction of any applicable
withholding taxes in accordance with Section 3.2 of the American International
Group, Inc. 2010 Stock Incentive Plan, as amended from time to time, or such similar
provision of any successor stock incentive plan.

C.          
No Rights to Other Payments.  The provisions of this Plan
provide no right or eligibility to a Participant to any other payouts from AIG
or its subsidiaries under any other alternative plans, schemes, arrangements or
contracts AIG may have with any employee or group of employees of AIG or its
subsidiaries.

 

7

 

 

D.          
No Effect on Benefits.  Grants and the delivery of Shares (or
cash) under this Plan will constitute a special discretionary incentive payment
to the Participants and will not be required to be taken into account in
computing the amount of salary or compensation of the Participants for the
purpose of determining any contributions to or any benefits under any pension,
retirement, profit-sharing, bonus, life insurance, severance or other benefit
plan of AIG or any of its subsidiaries or under any agreement with the
Participant, unless AIG or the subsidiary with which the Participant is
Employed specifically provides otherwise.

E.          
Section 409A.   

(1)          
Awards made under the Plan are intended to be “deferred compensation”
subject to Section 409A, and this Plan is intended to, and shall be
interpreted, administered and construed to, comply with Section 409A.  The
Committee will have full authority to give effect to the intent of this
Section 8.E.  

(2)          
If any payment or delivery to be made under any Award (or any other
payment or delivery under this Plan) would be subject to the limitations in
Section 409A(a)(2)(b) of the Code, the payment or delivery will be delayed
until six months after the Participant’s separation from service (or earlier
death) in accordance with the requirements of Section 409A.  

(3)          
Each payment or delivery in respect of any Award will be treated as a
separate payment or delivery for purposes of Section 409A.

F.  
Severability.  If any of the provisions of this Plan is
finally held to be invalid, illegal or unenforceable (whether in whole or in
part), such provision will be deemed modified to the extent, but only to the
extent, of such invalidity, illegality or unenforceability and the remaining
provisions will not be affected thereby; provided  that  if any of
such provisions is finally held to be invalid, illegal, or unenforceable
because it exceeds the maximum scope determined to be acceptable to permit such
provision to be enforceable, such provision will be deemed to be modified to
the minimum extent necessary to modify such scope in order to make such
provision enforceable hereunder. 

G.  
Entire Agreement.  This Plan contains the entire agreement of
the parties with respect to the subject matter hereof and supersedes all prior
agreements, promises, covenants, arrangements, communications, representations
and warranties between them, whether written or oral with respect to the
subject matter hereof.  

H.  
Waiver of Claims.  Each Participant recognizes and agrees
that prior to being selected by the Committee to receive an Award he or she has
no right to any benefits under this Plan.  Accordingly, in consideration of the
Participant’s receipt of any Award hereunder, he or she expressly waives any
right to contest the amount of any Award, the terms of this Plan, any
determination, action or omission hereunder by the Committee or the Company or
any amendment to this Plan.

 

8

 

 

I.     No
Third Party Beneficiaries.  Except as expressly provided herein, this Plan
will not confer on any person other than the Company and the Participant any
rights or remedies hereunder. The exculpation and indemnification provisions of
Section 7.E will inure to the benefit of a Covered Person’s estate and beneficiaries
and legatees.

J.   
Successor Entity; AIG’s Assigns.  Unless otherwise
provided in the applicable award agreement and except as otherwise determined
by the Committee, in the event of a merger, consolidation, mandatory share
exchange or other similar business combination of AIG with or into any other
entity (“Successor Entity”) or any transaction in which another
person or entity acquires all of the issued and outstanding Common Stock of
AIG, or all or substantially all of the assets of AIG, outstanding Awards may
be assumed or a substantially equivalent award may be substituted by such
Successor Entity or a parent or subsidiary of such Successor Entity.  The terms
of this Plan will be binding and inure to the benefit of AIG and its successors
and assigns.

K.  
Nonassignability.  No Award (or any rights and obligations
thereunder) granted to any person under the Plan may be sold, exchanged,
transferred, assigned, pledged, hypothecated or otherwise disposed of or
hedged, in any manner (including through the use of any cash-settled
instrument), whether voluntarily or involuntarily and whether by operation of
law or otherwise, other than by will or by the laws of descent and
distribution, except as may be otherwise provided in the award agreement.  Any
sale, exchange, transfer, assignment, pledge, hypothecation, or other
disposition in violation of the provisions of this Section 8.K will be
null and void and any Award which is hedged in any manner will immediately be
forfeited.  All of the terms and conditions of this Plan and the award
agreements will be binding upon any permitted successors and assigns.

L.   
Right to Discharge.  Nothing contained in this Plan or in any
Award will confer on any Participant any right to be continued in the employ of
AIG or any of its subsidiaries or to participate in any future plans.

M. 
Consent.  If the Committeeat any
time determines that any consent (as hereinafter defined) is necessary or
desirable as a condition of, or in connection with, the granting of any Award
or the delivery of any Shares under this Plan, or the taking of any other
action thereunder (each such action, a “plan action”), then such
plan action will not be taken, in whole or in part, unless and until such
consent will have been effected or obtained to the full satisfaction of the Committee;
provided  that  if such consent has not been so effected or
obtained as of the latest date provided by this Plan for payment of such amount
or delivery and further delay is not permitted in accordance with the
requirements of Section 409A, such amount will be forfeited and terminate
notwithstanding any prior earning or vesting.  

The term “consent”
as used in this paragraph with respect to any plan action includes (1) any
and all listings, registrations or qualifications in respect thereof upon any
securities exchange or under any federal, state, or local law, or law, rule or
regulation of a jurisdiction outside the United States, (2) any other
matter, which the Committee may deem necessary or desirable to 

9

 

 

comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made, (3) any and all other
consents, clearances and approvals in respect of a plan action by any
governmental or other regulatory body or any stock exchange or self-regulatory
agency and (4) any and all consents required by the Committee.

N.  
Subject to Any AIG Section 162(m) Plan.  AIG may, in any
year, propose a Section 162(m) compliant performance incentive award plan (the
“AIG Section 162(m) Plan”).  If an AIG Section 162(m) Plan is
proposed and approved by AIG stockholders in accordance with Section
162(m)(4)(C) of the Code and Treasury Regulation Section 1.162‐27(e)(4),
this Plan will function as a sub-plan under the AIG Section 162(m) Plan,
whereby performance compensation amounts payable under the AIG Section 162(m)
Plan can be paid in part by accruing awards with respect to a Performance
Period.

O.  
No Liability With Respect to Tax Qualification or Adverse Tax
Treatment.  Notwithstanding anything to the contrary contained herein, in
no event shall the Company be liable to a Participant on account of the failure
of any Award or amount payable under this Plan to (a) qualify for
favorable United States or foreign tax treatment or (b) avoid adverse tax
treatment under United States or foreign law, including, without limitation,
Section 409A.

9.          
 Disputes

A.  
Governing Law.  This Plan will be governed by and construed
in accordance with the laws of the State of New York, without regard to
principles of conflict of laws.  The Plan shall also be subject to all
applicable non-U.S. laws as to Participants located outside of the United States.  In the event that any provision of this Plan is not permitted by the local
laws of a country or jurisdiction in which a Participant performs services,
such local law shall supersede that provision of this Plan with respect to that
Participant.   The benefits to which a Participant would otherwise be entitled
under this Plan may be adjusted or limited to the extent that the Senior
HR Attorney and the Senior C&B Executive or their designee(s)
determine is necessary or appropriate in light of applicable law or local
practice.

B. 
Arbitration.  Subject to the provisions of this
Section 9, any dispute, controversy or claim between AIG and a Participant,
arising out of or relating to or concerning this Plan or any Award, will be
finally settled by arbitration. Participants who are subject to an Employment
Dispute Resolution Program (“EDR Program”) maintained by AIG or any affiliated
company of AIG, will resolve such dispute, controversy or claim in accordance
with the operative terms and conditions of such EDR Program, and to the extent
applicable, the employment arbitration rules of the American Arbitration
Association (“AAA”). Participants who are not subject to an EDR Program shall
arbitrate their dispute, controversy or claim in New York City before, and in
accordance with the employment arbitration rules of the AAA, without reference
to the operative terms and conditions of any EDR Program.  Prior to
arbitration, all claims 

10

 

 

maintained by a Participant
must first be submitted to the Committee in accordance with claims procedures
determined by the Committee.  

 

C.              
Jurisdiction.  The Company and each Participant hereby
irrevocably submit to the exclusive jurisdiction of a state or federal court of
appropriate jurisdiction located in the Borough of Manhattan, the City of New
York over any suit, action or proceeding arising out of or relating to or
concerning this Plan or any Award that is not otherwise arbitrated or resolved
according to Section 9.B.  The Company and each Participant acknowledge
that the forum designated by this section has a reasonable relation to this
Plan and to such Participant’s relationship with the Company, that the
agreement as to forum is independent of the law that may be applied in the
action, suit or proceeding and that such forum shall apply even if the forum
may under applicable law choose to apply non-forum law.

D.  
Waiver.  The Company and each Participant waive, to the
fullest extent permitted by applicable law, any objection which the Company and
such Participant now or hereafter may have to personal jurisdiction or to the
laying of venue of any such suit, action or proceeding in any court referred to
in Section 9.C.  The Company and each Participant undertake not to commence any
action, suit or proceeding arising out of or relating to or concerning this
Plan or any Award in any forum other than a forum described in Section 9.C. 
Notwithstanding the foregoing, nothing herein shall preclude the Company from bringing
any action, suit or proceeding in any other court for the purpose of enforcing
the provisions of this Section 9.  The Company and each Participant agree
that, to the fullest extent permitted by applicable law, a final and
non-appealable judgment in any such suit, action or proceeding in any such
court shall be conclusive and binding upon the Participant and the Company. 

E.  
Service of Process.  Each Participant irrevocably appoints
the Secretary of AIG at 80 Pine Street, New York, New York
10005, U.S.A. as his or her agent for service of process in connection with any
action, suit or proceeding arising out of or relating to or concerning this
Plan or any Award that is not otherwise arbitrated or resolved according to
Section 9.B.  The Secretary will promptly advise the Participant of any
such service of process.

F.  
Confidentiality.  Each Participant must keep confidential any
information concerning any grant or Award made under this Plan and any dispute,
controversy or claim relating to this Plan, except that (i) a Participant may
disclose information concerning a dispute or claim to the court that is
considering such dispute or to such Participant’s legal counsel (provided 
that  such counsel agrees not to disclose any such information other than
as necessary to the prosecution or defense of the dispute) or (ii) a
Participant may disclose information regarding an Award to the Participant’s
personal lawyer or tax accountant, provided  that  such individuals
agree to keep the information confidential.

 

11

 

 

10.       
 Term of Plan

This Plan
will continue until suspended or terminated by the Committee in its sole
discretion.  Any termination of this Plan will be done in a manner that the
Committee determines complies with Section 409A.  

12

 

Annex A

Glossary of Terms

            “Cause”
means (1) a Participant’s conviction, whether following trial or by plea
of guilty or nolo  contendere  (or similar plea), in a criminal
proceeding (A) on a misdemeanor charge involving fraud, false statements
or misleading omissions, wrongful taking, embezzlement, bribery, forgery,
counterfeiting or extortion, or (B) on a felony charge or (C) on an
equivalent charge to those in clauses (A) and (B) in jurisdictions which
do not use those designations; (2) a Participant’s engagement in any
conduct which constitutes an employment disqualification under applicable law
(including statutory disqualification as defined under the Securities Exchange
Act of 1934); (3) a Participant’s violation of any securities or
commodities laws, any rules or regulations issued pursuant to such laws, or the
rules and regulations of any securities or commodities exchange or association
of which the Company or any of its subsidiaries or affiliates is a member; or
(4) a Participant’s material violation of the Company’s codes or conduct or any
other AIG policy as in effect from time to time.  The determination as to
whether “Cause” has occurred shall be made by the Committee, with
respect to any Participant under the purview of the Committee, or the Senior
C&B Executive, with respect to any other Participant, in each case, in its
or his or her sole discretion.  The Committee or Senior C&B Executive, as
applicable, shall also have the authority in its sole discretion to waive the
consequences of the existence or occurrence of any of the events, acts or
omissions constituting “Cause.” 

            “Change in
Control” means the occurrence of any of the following events:

(1)  individuals who, on January 1, 2013, constitute the
Board (the “Incumbent Directors”) cease for any reason to
constitute at least a majority of the Board, provided that any person becoming
a director subsequent to January 1, 2013, whose election or nomination
for election was approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board (either by a specific vote or by approval of AIG’s
proxy statement in which such person is named as a nominee for director,
without written objection to such nomination) shall be an Incumbent Director;
provided, however, that no individual initially elected or nominated as a
director of AIG as a result of an actual or threatened election contest with
respect to directors or as a result of any other actual or threatened
solicitation of proxies or consents by or on behalf of any person other than
the Board shall be deemed to be an Incumbent Director; 

(2)  Any “person” (as such term is defined in
Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act), is or becomes a “beneficial owner” (as
defined in Rule 13d‐3 under the Exchange Act), directly or
indirectly, of securities of AIG representing 50% or more of the combined
voting power of AIG’s then outstanding securities eligible to vote for the
election of the Board (“AIG Voting Securities”); provided,
however, that the event described in this paragraph (2) shall not be
deemed to be a Change in Control by virtue of an acquisition of AIG Voting
Securities:  (A) by AIG or any subsidiary of AIG (B) by any
employee benefit plan (or related trust) sponsored or maintained by AIG or any
subsidiary of AIG or (C) by any underwriter temporarily holding securities
pursuant to an offering of such securities;

(3)  The consummation of a merger, consolidation,
statutory share exchange or similar form of corporate transaction involving AIG
(a “Business  

 

 

Combination”) that results
in any person (other than the United States Department of Treasury) becoming
the beneficial owner, directly or indirectly, of 50% or more of the total
voting power of the outstanding voting securities eligible to elect directors
of the entity resulting from such Business Combination; 

(4)  The consummation of a sale of all or substantially
all of AIG’s assets (other than to an affiliate of AIG); or

(5)  AIG’s stockholders approve a plan of complete
liquidation or dissolution of AIG.

Notwithstanding the foregoing, a
Change in Control shall not be deemed to occur solely because any person
acquires beneficial ownership of more than 50% of the AIG Voting Securities as
a result of the acquisition of AIG Voting Securities by AIG which reduces the
number of AIG Voting Securities outstanding; provided that if after such
acquisition by AIG such person becomes the beneficial owner of additional AIG
Voting Securities that increases the percentage of outstanding AIG Voting
Securities beneficially owned by such person, a Change in Control shall then
occur.

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

            “Employed”
and “Employment” means (a) actively performing services for the
Company, (b) being on a Company-approved leave of absence, whether paid or
unpaid, or (c) receiving long term disability benefits, in each case while in
good standing with the Company.

            “Qualifying
Resignation”  for a Participant means voluntary Termination
initiated by the Participant (while such Participant is in good standing with
the Company), that would not otherwise satisfy the definition of Retirement
below, after attainment of age plus years of service equal to 60; provided
that such Termination occurs on or after age 50 with at least five years of
service.

            “Retirement”
for a Participant means voluntary Termination initiated by the Participant
(while such Participant is in good standing with the Company) (i) on or after
age 60 with five years of service or (ii) on or after age 55 with 10 years of
service

“Senior C&B Executive” means the Company’s
most senior executive whose responsibility it is to oversee both the Corporate
Compensation Department 

14

 

 

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

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

“Termination” or “Terminate,”
with respect to a Participant, means the termination of the Participant’s
Employment.

15

 

Annex B

Form of Release Referred to in Section 6.G of the
Plan.

NOT
personalized to each Participant.

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

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

(3)          
Employee acknowledges and agrees that Employee has complied with and
will continue to comply with the non-disparagement, non-solicitation and
confidentiality provisions set forth in the Employee’s award agreement pursuant
to Section 3.D of the Plan, [a copy of which is attached hereto as Exhibit A],
and further agrees that AIG’s remedies at law for a breach or threatened breach
of any of the non-disparagement, non-solicitation and confidentiality
provisions in the Employee’s award agreement would be inadequate.  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 from a court of
competent jurisdiction in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which
may then be available;

(4)          
[Employee acknowledges and understands that Employee is hereby being
advised to consult with an attorney prior to executing this Release.  Employee
also acknowledges and understands that Employee has [twenty-one (21)] days to
consider the terms of this Release before signing it.  However, in no event may
Employee sign this Release before Employee’s termination date.]

(5)          
[Upon the signing of this Release by Employee, Employee understands that
Employee shall have a period of seven (7) days following Employee’s signing of
this Release in which Employee may revoke this Release.  

 

 

Employee
understands that this Release shall not become effective or enforceable until
this seven (7) day revocation period has expired, and that neither the Released
Parties nor any other person has any obligation [pursuant to the American
International Group, Inc. 2013 Long Term Incentive Plan] until eight
(8) days have passed since Employee’s signing of this Release without
Employee having revoked this Release.  If Employee revokes this Release,
Employee will be deemed not to have accepted the terms of this Release.]

(6)          
Any dispute arising under this Release shall be governed by the law of
the State of New York, without reference to the choice of law rules that would
cause the application of the law of any other jurisdiction

 

 

 

___________________________                                     ____________________________

DATE                                                                          [Employee]

17

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