Document:

arcw_EX10-3

		
			Exhibit 10.3
		

		
			SECOND AMENDMENT TO Second AMENDED AND RESTATED CREDIT AGREEMENT
		

		
			This SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), is entered into as of May 12, 2017, by and among ARC GROUP WORLDWIDE, INC., a Utah corporation (the “Parent”), ADVANCED FORMING TECHNOLOGY, INC. a Colorado corporation (“AFT”), ARC WIRELESS, INC., a Delaware corporation (“Wireless”), FLOMET LLC, a Delaware limited liability company (“Flomet”), GENERAL FLANGE & FORGE LLC, a Delaware  limited liability company (“General Flange”), 3D MATERIAL TECHNOLOGIES, LLC, a Delaware limited liability company (“3D Material”), QUADRANT METALS TECHNOLOGIES LLC, a Delaware limited liability company (“Quadrant”), ARC METAL STAMPING, LLC, a Delaware limited liability company (“Stamping”), ADVANCE TOOLING CONCEPTS, LLC, a Colorado limited liability company (“Tooling”), ARC WIRELESS, LLC, a Delaware limited liability company (“Wireless LLC”), and THIXOFORMING LLC, a Colorado limited liability company (“Thixoforming” and together with AFT, Wireless, Flomet, General Flange, 3D Material, Quadrant, Stamping, Tooling and Wireless LLC, each a “Borrower” and, collectively the “Borrowers”) the Lenders (as defined below) party hereto, and the Administrative Agent (as defined below).
		

		
			RECITALS:
		

		
			WHEREAS, the Parent, the Borrowers party thereto, the lenders from time to time party thereto (the “Lenders”), and Citizens Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”) and Collateral Agent, are parties to the Second Amended and Restated Credit Agreement, dated as of September 29, 2016, as amended by that certain First Amendment to Second Amended and Restated Credit Agreement, dated as of March 21, 2017 (as the same may be further amended, supplemented or otherwise modified from time to time, the “Second Amended and Restated Credit Agreement”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Second Amended and Restated Credit Agreement; and
		

		
			WHEREAS, the Parent and the Borrowers wish to amend the Second Amended and Restated Credit Agreement on the terms set forth herein; 
		

		
			WHEREAS, the Administrative Agent and the Lenders are willing to amend the Second Amended and Restated Credit Agreement as provided for herein;
		

		
			NOW THEREFORE, in consideration of the premises and the agreements herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
		

			
	
			
				 Section 1.
			Interpretation.

			
	
			
				 1.1
			Interpretation.  This Amendment shall be construed and interpreted in accordance with the rules of construction set forth in Sections 1.02,  1.03,  1.04,  1.05 and 1.06 of the Second Amended and Restated Credit Agreement.

		
			

		 

		

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				 Section 2.
			Amendment to Second Amended and Restated Credit Agreement.

			
	
			
				 2.1
			Amendment of Section 1.01 (Defined Terms).  Section 1.01 of the Second Amended and Restated Credit Agreement is hereby amended by adding the following new defined term in appropriate alphabetical order:

		
			“New Hampshire Defense Contractor Capex” means Capital Expenditures in connection with the production of tools for the New Hampshire defense contractor customer of the Company in an amount not to exceed (a) $3,075,000 for the period of four consecutive fiscal quarters ending March 31, 2017, less any Tooling Capex made in such period, (b) $3,950,000 for the period of four consecutive fiscal quarters ending June 30, 2017, less any Tooling Capex made in such period, (c) $3,900,000 for the period of four consecutive fiscal quarters ending September 30, 2017, less any Tooling Capex made in such period, (d) $3,500,000 for the period of four consecutive fiscal quarters ending December 31, 2017, less any Tooling Capex made in such period, (e) $1,700,000 for the period of any four consecutive fiscal quarters ending March 31, 2018, less any Tooling Capex made in such period and (f) $0 for each period of four consecutive fiscal quarters ending thereafter.
		

			
	
			
				 2.2
			Amendment of Section 1.01 (Defined Terms).  Section 1.01 of the Second Amended and Restated Credit Agreement is hereby amended by amending and restating the definition of “Fixed Charge Coverage Ratio” in its entirety as follows: 

			
	
			
				
			“Fixed Charge Coverage Ratio” means, for any period, the ratio of (a) Consolidated EBITDA minus the unfinanced portion of Capital Expenditures (other than (i) Tooling Capex, (ii) New Hampshire Defense Contractor  Capex and (ii) Capital Expenditures made by any Borrower the Equity Interests of which are Disposed of in a Non-Core Business Disposition during such period) minus expense for taxes paid in cash (other than (i) any taxes resulting from any gains realized as a result of any Non-Core Business Disposition and (ii) any taxes attributable to the income of any Borrower the Equity Interests of which are Disposed of in a Non-Core Business Disposition during such period) minus Restricted Payments paid in cash minus earn-out obligations paid in cash to (b) Fixed Charges, all calculated for the Parent and its Subsidiaries for such period on a consolidated basis in accordance with GAAP.

			
	
			
				 2.3
			Amendment of Section 7.13 (Payments, Prepayments, etc. of Indebtedness; Earn-out Payments).  Section 7.13 of the Second Amended and Restated Credit Agreement is hereby amended by adding the following proviso immediately following the second proviso thereof:

		
			“; and  provided further that no prepayment of Subordinated Debt shall be made in reliance on this Section 7.13(a)(v) prior to the date on which a Compliance Certificate for the quarter ending April 1, 2018 has been delivered in accordance with Section 6.02(a).”
		

			
	
			
				 2.4
			Amendment of Section 7.14 (Financial Covenant).  Section 7.14 of the Second Amended and Restated Credit Agreement is hereby amended and restated in its entirety as follows:

		
			“Section 7.14.  Financial Covenant.  Permit the Fixed Charge Coverage Ratio as of the last day of any period of four consecutive fiscal quarters to be less than the greater of (i) the ratio 

		 

		

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set forth below opposite such day and (ii) the maximum fixed charge coverage ratio (as such term is defined in the Subordinated Loan Documents) or equivalent ratio permitted under the Subordinated Loan Documents as of such day:
		

			
					
						 

					
					
						 

				
	
					
						Period Ending

					
					
						Minimum Fixed Charge Coverage Level

				
	
					
						October 2, 2016

					
					
						1.10 to 1.00

				
	
					
						January 2, 2016

					
					
						1.10 to 1.00

				
	
					
						April 2, 2017

					
					
						1.10 to 1.00

				
	
					
						June 30, 2017

					
					
						0.85 to 1.00

				
	
					
						October 1, 2017

					
					
						0.90 to 1.00

				
	
					
						December 31, 2017 and each fiscal quarter thereafter

					
					
						1.10 to 1.00

				

		
			 
		

		
			”
		

			
	
			
				 Section 3.
			Effectiveness.

			
	
			
				 3.1
			Conditions Precedent.  The effectiveness of this Amendment is subject to the satisfaction of the following condition precedent:

			
	
			
				 (a)
			this Amendment shall have been (i) executed by the Parent, each Borrower, the Administrative Agent and each Lender and (ii) acknowledged by each of the other Loan Parties, and in each case, counterparts hereof as so executed or acknowledged shall have been delivered to the Administrative Agent, sufficient in number for distribution to the Administrative Agent, each Lender and the Parent; and

			
	
			
				 (b)
			and all fees of counsel to the Administrative Agent incurred in connection with this Amendment that are required to be paid pursuant to Section 10.04 of the Credit Agreement and for which the Borrower shall have received an invoice on or prior to the date hereof shall have been or will be substantially simultaneously paid.

			
	
			
				 3.2
			Amendment Effective Date.  This Amendment shall be effective on the date upon which the conditions precedent set forth in Section 3.1 above are satisfied (such date, the “Amendment Effective Date”).

			
	
			
				 Section 4.
			Affirmation.

		
			Each of the Loan Parties hereby consents and agrees to and acknowledges and affirms the terms of this Amendment.  Each of the Loan Parties hereby further agrees that their respective obligations under the Second Amended and Restated Credit Agreement, the Guarantee and 

		 

		

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Collateral Agreement and each of the other Loan Documents shall remain in full force and effect and shall be unaffected hereby.
		

			
	
			
				 Section 5.
			Representations and Warranties.    Each Loan Party hereby represents and warrants to the Administrative Agent and the Lenders party hereto as follows:

			
	
			
				 5.1
			Power and Authority.  It has all requisite power and authority to execute and deliver this Amendment and perform its obligations hereunder.

			
	
			
				 5.2
			Authorization.  It has taken all necessary corporate or limited liability company action, as applicable, to duly authorize the execution and delivery of, and performance of its obligations under, this Amendment and this Amendment has been duly executed and delivered by its duly authorized officer or officers.

			
	
			
				 5.3
			Non-Violation.  The execution and delivery of this Amendment and the performance and observance by it of the terms and provisions hereof (a) do not violate or contravene its Organization Documents or any applicable Laws or (b) conflict with or result in a breach or contravention of any provision of, or constitute a default under, any other agreement, instrument or document binding upon or enforceable against it.

			
	
			
				 5.4
			Validity and Binding Effect.  Upon satisfaction of the conditions set forth in Section 5.1 above, this Amendment shall constitute a legal, valid and binding agreement of such Loan Party, enforceable against it in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity and principles of good faith and fair dealing.

			
	
			
				 5.5
			Representations and Warranties in Second Amended and Restated Credit Agreement.  The representations and warranties of each Loan Party contained in the Second Amended and Restated Credit Agreement as modified hereby are true and correct in all material respects (without duplication of any materiality qualifier contained therein) on and as of the date hereof as though made on and as of the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date.

			
	
			
				 5.6
			No Consent.  No consent, exemption, authorization or approval of, registration or filing with, or any other action by, any Governmental Authority is required in connection with this Amendment or the execution, delivery, performance, validity or enforceability of this Amendment, except consents, exemptions, authorizations, approvals, filings and actions which have been obtained or made and are in full force and effect.

			
	
			
				 5.7
			No Event of Default.  No Default or Event of Default exists before, nor will occur immediately after, giving effect to this Amendment or as a result of observing any provision hereof.

		
			

		 

		

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				 Section 6.
			Miscellaneous.

			
	
			
				 6.1
			Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

			
	
			
				 6.2
			Survival of Representations and Warranties.  All representations and warranties made hereunder shall survive the execution and delivery of this Amendment.

			
	
			
				 6.3
			Severability.  Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

			
	
			
				 6.4
			Headings.  The headings, captions and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

			
	
			
				 6.5
			Loan Documents Unaffected.  Each reference to the Second Amended and Restated Credit Agreement in any Loan Document shall hereafter be construed as a reference to the Second Amended and Restated Credit Agreement as modified hereby.  Except as otherwise specifically provided, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of any party under, the Second Amended and Restated Credit Agreement or any other Loan Document, nor alter, modify, amend or in any way affect any provision of the Second Amended and Restated Credit Agreement or any other Loan Document, including, without limitation, the guarantees, pledges and grants of security interests, as applicable, under each of the Collateral Documents, all of which are ratified and affirmed in all respects and shall continue in full force and effect.  This Amendment is a Loan Document.

			
	
			
				 6.6
			Entire Agreement.  This Amendment, together with the Second Amended and Restated Credit Agreement and the other Loan Documents, integrates all the terms and conditions mentioned herein or incidental hereto and supersede all oral representations and negotiations and prior writings with respect to the subject matter hereof.

			
	
			
				 6.7
			Acknowledgments.  Each Loan Party hereby acknowledges that:

			
	
			
				 (a)
			it has consulted and been advised by its own legal counsel in the negotiation, execution and delivery of this Amendment and the other Loan Documents and it has consulted its own accounting, regulatory and tax advisors to the extent it has deemed appropriate;

			
	
			
				 (b)
			it is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Amendment and by the other Loan Documents;

			
	
			
				 (c)
			neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to any Loan Party arising out of or in connection with this Amendment or any of the other Loan Documents, and the relationship between the Administrative Agent and the Lenders, on one hand, and the Loan Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor;

		
			

		 

		

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				 (d)
			the Lenders have no obligation to the Loan Parties or any of their respective Affiliates with respect to the transactions contemplated by this Amendment and by the other Loan Documents, except any obligations expressly set forth in this Amendment and in the other Loan Documents;

			
	
			
				 (e)
			the Lenders and their Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Loan Parties and their respective Affiliates, and the Lenders have no obligation to disclose any of such interests to the Loan Parties or any of their respective Affiliates; and

			
	
			
				 (f)
			no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Loan Parties and the Lenders.

			
	
			
				 6.8
			Release.  Immediately upon the execution and acceptance of this Amendment, each Loan Party and each of their respective successors, assigns, subsidiaries, affiliates, insurers, employees, attorneys, agents, representatives and other persons and/or entities connected therewith, hereby fully and forever compromises, settles, releases, acquits and discharges the Administrative Agent, the Lenders, the Arranger and their respective Affiliates (collectively, the “Released Parties”) and each of the Released Parties’ present, former and future directors, officers, employees, agents, partners, trustees, advisors or other representatives and other persons and/or entities connected therewith (collectively, the “Releasees”) from any and all debts, claims, demands, liabilities, responsibilities, disputes, causes, damages, actions, causes of action (whether at law and/or in equity) and obligations of every nature whatsoever (whether liquidated or unliquidated, known or unknown, asserted or unasserted, foreseen or unforeseen, matured or unmatured, fixed or contingent) that each Loan Party has, had and/or may claim to have against any of the Releasees which arise from or relate to any actions which any of the Releasees have and/or may have taken or have and/or may have omitted to take prior to the date this Agreement was executed and, without limiting the foregoing, with respect to the Second Amended and Restated Credit Agreement and/or any documents executed and/or delivered in connection with the foregoing.

			
	
			
				 6.9
			Counterparts.  This Amendment may be executed by the parties hereto separately in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same agreement.  Transmission by a party to another party (or its counsel) via facsimile or electronic mail of a signed copy of this Amendment (or a signature page of this Amendment) shall be as fully effective as delivery by such transmitting party to the other parties hereto of a counterpart of this Amendment that had been manually signed by such transmitting party.

			
	
			
				 6.10
			Governing Law.  THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).  TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARENT, EACH BORROWER, AND EACH GUARANTOR BY ITS 

		 

		

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	ACKNOWLEDGMENT HEREOF HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK GOVERNS THIS AMENDMENT OR ANY OF THE OTHER LOAN DOCUMENTS.

			
	
			
				 6.11
			Jury Trial Waiver.  EACH OF THE PARTIES TO THIS AMENDMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AMENDMENT OR ANY OF THE OTHER LOAN DOCUMENTS (INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR OTHER MODIFICATIONS RELATING TO ANY OF THE FOREGOING), OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

		
			[Signature page follows]
		

		
			

		 

		

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			IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the date first above written.
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
						 

					
						 

					
						 

					
						 

				
	
					
						Advanced Forming Technology, Inc., as a Borrower

					
						By:  __/s/ Drew M. Kelley_________________________

					
						Name: Drew M. Kelley

					
						Title: CFO

					
						 

				
	
					
						ARC WIRELESS, INC., as a Borrower

					
						By:  __/s/ Drew M. Kelley_________________________

					
						Name: Drew M. Kelley

					
						Title: CFO

					
						 

				
	
					
						FLOMET LLC, as a Borrower

					
						By:  __/s/ Drew M. Kelley________________________

					
						Name: Drew M. Kelley

					
						Title: CFO

					
						 

				

		 

		

			[Signature Page to Second Amendment to Second Amended and Restated Credit Agreement]

		

		

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						GENERAL FLANGE & FORGE LLC, as a Borrower

					
						By:  __/s/ Drew M. Kelley________________________

					
						Name: Drew M. Kelley

					
						Title: CFO

					
						 

				
	
					
						TEKNA SEAL LLC, as a Borrower

					
						By:  __/s/ Drew M. Kelley________________________

					
						Name: Drew M. Kelley

					
						Title: CFO

					
						 

				
	
					
						3D MATERIAL TECHNOLOGIES,  LLC, as a Borrower

					
						By:  __/s/ Drew M. Kelley________________________

					
						Name: Drew M. Kelley

					
						Title: CFO

					
						 

				

		 

		

			[Signature Page to Second Amendment to Second Amended and Restated Credit Agreement]

		

		

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						Quadrant metals technologies llc, as a Borrower

					
						 

					
						By:  __/s/ Drew M. Kelley________________________

					
						Name: Drew M. Kelley

					
						Title: CFO

					
						 

					
						ARC WIRELESS, llc, as a Borrower

					
						 

					
						By:  __/s/ Drew M. Kelley________________________

					
						Name: Drew M. Kelley

					
						Title: CFO

					
						 

					
						 

					
						THIXOFORMING llc, as a Borrower

					
						 

					
						By:  __/s/ Drew M. Kelley________________________

					
						Name: Drew M. Kelley

					
						Title: CFO

					
						 

					
						 ARC METAL STAMPING, llc, as a Borrower

					
						 

					
						By:  __/s/ Drew M. Kelley________________________

					
						Name: Drew M. Kelley

					
						Title: CFO

					
						 

					
						ADVANCE TOOLING CONCEPTS, llc, as a Borrower

					
						

		 

		

			[Signature Page to Second Amendment to Second Amended and Restated Credit Agreement]

		

		

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						By:  __/s/ Drew M. Kelley________________________

					
						Name: Drew M. Kelley

					
						Title: CFO

					
						 

					
						ARC GROUP WORLDWIDE, INC., as the Parent

					
						 

				

		 

		

			[Signature Page to Second Amendment to Second Amended and Restated Credit Agreement]

		

		

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						By:  __/s/ Drew M. Kelley___________________

					
						Name: Drew M. Kelley

					
						Title: CFO

					
						 

				
	
					
						 

				

		
			
		

		

		 

		

			[Signature Page to Second Amendment to Second Amended and Restated Credit Agreement]

		

		

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						CITIZENS BANK, N.A., as Administrative Agent and Collateral Agent and as a Lender

				
	
					
						By:

					
					
						/s/ Alex D’Alessandro

				
	
					
						 

					
					
						Name: 

					
					
						Alex D’Alessandro

				
	
					
						 

					
					
						Title:

					
					
						Senior Vice President

				

		
			 
		

		
			 
		

		 

		

			[Signature Page to Second Amendment to Second Amended and Restated Credit Agreement]

		

		

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			NAI-1502690587v6EX-10.1

 Exhibit 10.1 
  

 
 May 14,
2017                         

Brian Duperreault 
 Address on file with the Company 

 

	 	Re:	Offer Letter 

 Dear Brian: 

We are pleased to confirm the terms of your joining American International Group, Inc. (“AIG” or the “Company”). 

 

	 	•	 	Effective Date. May 14, 2017. 

  

	 	•	 	Position. On the Effective Date, you will begin to serve as Chief Executive Officer and as a member of the Company’s Board of Directors (the “Board”). In that capacity, you will report directly
(and only) to the Board and have all of the customary authorities, duties and responsibilities that accompany these positions. 

  

	 	•	 	Total Direct Compensation. Your initial annual target direct compensation will be $16,000,000 as follows: 

  

	 	•	 	Base Salary. Your base cash salary will be at a rate of $1,600,000 per year. 

  

	 	•	 	Short-term Incentive. Your annual incentive target award amount will be $3,200,000. 

Annual incentives are currently determined and paid in accordance with the AIG Short-Term Incentive Plan. For 2017, as a member of the
Executive Leadership Team, your award will be based on a combination of an enterprise-wide Company score and an assessment of individual performance, resulting in a potential range from 0 to 200 percent of target, and will be pro-rated for your
service during 2017. 
  

	 	•	 	Long-term Incentive. Your annual long-term incentive target award amount will be $11,200,000. 

Long-term incentives are currently granted in accordance with the AIG Long Term Incentive Plan (“LTIP”). For 2017, as a member of the
Executive Leadership Team, on the Effective Date you will be granted an award consisting of (i) 70% as Performance Share Units (PSUs) to be earned based 

 
on achievement of performance criteria for the three-year performance period covering January 2017 through December 2019 consistent with other senior management grantees and (ii) the other
30% as Restricted Stock Units (RSUs) to be earned based on continued employment through such three-year period, and which LTIP award will not be pro-rated. Your awards will be subject to the terms and conditions of the relevant LTIP and the award
agreement governing the grant (including, without limitation, the six-month notice requirement) applicable to other senior management grantees; provided that all annual equity awards granted to you will provide for retirement eligibility as
set forth in the LTIP but beginning on the third anniversary of the Effective Date and otherwise as set forth in the LTIP on the date hereof. 
  

	 	•	 	Sign-On Arrangements. On the Effective Date, AIG will grant you stock options (“Stock Options”) on 1,500,000 shares of Company common stock with an exercise price equal to the fair market value of
a share of Company common stock on the Effective Date and a seven-year term. The Stock Options will be granted under the AIG 2013 Omnibus Incentive Plan or issued as an inducement grant under the listing rules of the New York Stock Exchange (with a
registration statement filed on Form S-8). The Stock Options will vest as follows: 

  

	 	•	 	Sign-on Grant. 500,000 stock options will vest in equal annual installments on the first three anniversaries of the Effective Date, respectively, subject to your continued employment through such dates
(“3-Year Pro-rata Vesting”), except as provided below, (the “Time Options”). 

  

	 	•	 	Outperformance Award. As to the other 1,000,000 stock options (the “Performance Options”): 

  

	 	•	 	Thirty percent of the Performance Options will vest upon the Company attaining a closing common stock price, for at least twenty consecutive trading days, of at least $10.00 over the closing stock price on the day
before the public announcement of your hiring (the “Reference Price”) and satisfaction of the 3-Year Pro-rata Vesting; 

  

	 	•	 	Another thirty percent of the Performance Options will vest upon the Company attaining a closing common stock price, for at least twenty consecutive trading days, of at least $20.00 over the Reference Price; and

  

	 	•	 	Another forty percent of the Performance Options will vest upon the Company attaining a closing common stock price, for at least twenty consecutive trading days, of at least $30.00 over the Reference Price.

  

	 	•	 	 Treatment of Stock Options. Upon your termination of employment by the Company without Cause, by you for
Good Reason, or due to your death or Disability (each as defined below), any unvested portion of the Time Options will immediately 100% vest and remain exercisable for three years, and any unvested portion of the Performance Options will immediately
100% time-vest as to the portion subject to 3-Year Pro-rata Vesting and as to the unvested portion of all of the Performance Options continue to be eligible to vest and become exercisable for such three-year period, provided that such

  
 -2- 

	 	 
three-year period will not extend beyond the seven-year term. Upon a termination of your employment by you not for Good Reason (and not due to Disability), the vested portion of the Stock Options
will remain exercisable for ninety days (and the unvested portion forfeited and canceled), provided that such ninety-day period will not extend beyond the seven-year term. Upon a termination of your employment by the Company for Cause, all
Stock Options (whether vested or unvested) will be forfeited and cancelled. The Stock Options will be subject to compliance with the same restrictive covenants as set forth in the LTIP (and, with respect to post-termination exercise as a result of a
termination without Cause or for Good Reason, as set forth in AIG’s Executive Severance Plan (the “ESP”)). 

For purposes of the Stock Options, “Cause” and “Disability” have the meanings set forth in the ESP, except that the
procedure for determining Cause thereunder shall not apply. For purposes of the Stock Options, all of your annual LTIP awards, and a “Covered Termination” under the ESP, “Good Reason” means the occurrence (without your prior
written consent) of any of: (1) a reduction of more than 10% in any of your annual base salary, target short-term incentive opportunity or annual long-term incentive opportunity; or (2) a material adverse change in title, duties or
responsibilities (including reporting responsibilities), it being understood that the preceding would occur on any Change in Control (as defined in the ESP) in which you are not the most senior officer, reporting to the board of directors, of the
most senior parent company of the survivor of such Change in Control; provided, that a termination for Good Reason shall not have occurred unless (a) you give written notice to the Company of termination of employment within thirty days
after you first become aware of the occurrence of the circumstances constituting Good Reason, specifying in detail the circumstances constituting Good Reason, and the Company has failed within thirty days after receipt of such notice to cure the
circumstances constituting Good Reason, and (b) your “separation from service” (within the meaning of Section 409A) occurs no later than two years following the initial existence of the circumstances giving rise to Good Reason.

  

	 	•	 	Make-Whole Payment. In consideration of compensation foregone from your current employer, you will receive a one-time cash payment of $12,000,000 on or promptly following the Effective Date. 

 

	 	•	 	Benefits. You will be entitled to benefits consistent with senior executives of AIG and reimbursement of reasonable business expenses, in each case in accordance with applicable AIG policies as in effect from
time to time. To facilitate the performance of their management responsibilities, AIG provides some employees, including the Chief Executive Officer, with aircraft usage (including aircraft usage for the Chief Executive Officer’s spouse when
such spouse accompanies the Chief Executive Officer on travel for business purposes), use of company pool cars and drivers, annual health exams, legal services, financial, estate and tax planning and other benefits. The Company will also provide you
with a second office and clerical assistant in Bermuda. 

 In connection with your joining AIG, the Company will pay your
expenses of advisors in connection with negotiating and documenting these arrangements. 

  
 -3- 

	 	•	 	Termination Protection. Beginning on the Effective Date, you will participate in the ESP (subject to the definition of “Good Reason” above); provided that any determination under the ESP will be
subject to customary contractual dispute resolution in a court of competent jurisdiction. Any termination or adverse amendment of the ESP to which you do not consent in writing will be disregarded as applied to you. 

All unvested annual incentives granted under the LTIP will remain outstanding and continue to time-vest and any such performance-based awards
subject to achieving the respective performance requirements in the event of a termination of your employment by the Company without Cause, by you for Good Reason, or due to your Disability. 

All unvested annual incentives granted under the LTIP will 100% vest and any such performance-based awards will be deemed achieved at target
performance in the event of a termination of your employment due to your death. 
  

	 	•	 	Clawback Policy. As an executive officer, any bonus, equity or equity-based award or other incentive compensation granted to you will be subject to the AIG Clawback Policy (and any other AIG clawback policies as
may be in effect for senior management from time to time). 

  

	 	•	 	Indemnification and Cooperation. During and after your employment, AIG will indemnify you in your capacity as an officer and a member of the Board of AIG to the fullest extent permitted by applicable law and
AIG’s charter and by-laws, and will provide you with director and officer liability insurance coverage (including post-termination/post-director service tail coverage) on the same basis as AIG’s other executive officers or directors. AIG
agrees to cause any successor to all or substantially all of the business or assets (or both) of AIG to assume expressly in writing and to agree to perform all of the obligations of AIG in this paragraph. 

You agree (whether during or after your employment with AIG) to reasonably cooperate with AIG in connection with any litigation or regulatory
matter or with any government authority on any matter, in each case, pertaining to AIG and with respect to which you may have relevant knowledge, provided that, in connection with such cooperation, AIG will reimburse your reasonable expenses
and you shall not be required to act against your own legal interests. 
  

	 	•	 	Tax Matters. Tax will be withheld by AIG as appropriate under applicable tax requirements for any payments or deliveries under this letter. To the extent any taxable expense reimbursement or in-kind benefits
under this letter is subject to Section 409A of the U.S. Internal Revenue Code of 1986 (“Section 409A”), the amount thereof eligible in one taxable year shall not affect the amount eligible for any other taxable year, in no event
shall any expenses be reimbursed after the last day of the taxable year following the taxable year in which you incurred such expenses and in no event shall any right to reimbursement or receipt of in-kind benefits be subject to liquidation or
exchange for another benefit. Each payment under this letter will be treated as a separate payment for purposes of Section 409A. 

  

	 	•	 	No Guarantee of Employment. This offer letter is not a guarantee of employment or target direct compensation for a fixed term. 

  
 -4- 

	 	•	 	Invention Assignment. You hereby assign all right, title and interest in any intellectual property, including but not limited to discoveries, ideas, inventions, works, reports, rules, processes, lists, data and
other materials along with all improvements thereto (whether or not patentable or registerable under copyright or similar statutes) whether conceived, produced or developed by you, either alone or in conjunction with others, that are pursuant to, or
in furtherance of your employment with the Company (collectively “Intellectual Property”). Moreover, if requested, you agree to execute any documents required to perfect the Company’s interest in the above-referenced intellectual
property, and to otherwise fully cooperate with such process during and after your employment with the Company. 

 This
assignment shall include all such Intellectual Property that (1) relates in any way to the Company’s business, or to actual or anticipated research and development activities of the Company or (2) results in any way from the
performance by you of duties and responsibilities as an employee of the Company. You further agree that all original works of authorship which were made by you (either alone or with others) within the scope of and during the period of your
employment with the Company and which are protectable by copyright laws, are “works made for hire” as that term is defined in the United States Copyright Act. Notwithstanding the foregoing, this provision does not apply to inventions that
qualify under state law as inventions that cannot be required to be assigned. 
  

	 	•	 	Entire Agreement. This offer letter constitutes AIG’s only statement relating to its offer of employment to you and supersedes any previous communications or representations, oral or written, from or on
behalf of AIG or any of its affiliates. In the event of any inconsistency between this letter and any other plan, program, practice or agreement in which you are a participant or a party, the terms described in this offer letter will control unless
such other plan, program, practice or agreement specifically identifies the terms in this offer letter, and the specific provision hereof, as not so controlling. 

 

	 	•	 	Miscellaneous Representations. You confirm and represent to AIG, by signing this letter, that: (1) you are under no obligation or arrangement (including any restrictive covenants with any prior employer or
any other entity) that would prevent you from becoming an employee of AIG or that would adversely impact your ability to perform the expected services on behalf of AIG other than as previously disclosed in writing to AIG; (2) you have not taken
(or failed to return) any confidential information belonging to your prior employer or any other entity, and, to the extent you remain in possession of any such information, you will never use or disclose such information to AIG or any of its
employees, agents or affiliates; and (3) you understand and accept all of the terms and conditions of this offer. 

  
 -5- 

 We look forward to your leadership. 

 

			
	 Sincerely,
  

AMERICAN INTERNATIONAL GROUP, INC.

		
	By:	 	/s/ W. Don Cornwell
		 	 W. Don Cornwell
  

Chair, Compensation and Management Resources Committee

 I agree with and accept the foregoing terms. 
  

	
	
	/s/ Brian Duperreault
	Brian Duperreault

  
 -6-

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