EMPLOYMENT AGREEMENT
AGREEMENT by and among American
International Group, Inc., a Delaware
corporation (the "Parent"), American
General Corporation, a Texas corporation
(the "Company"), and Xxxxxx X. Xxxxxx (the
"Executive") dated as of the 11th day of
May, 2001.
Parent has determined that it is
in the best interests of Parent and the
Company and their respective shareholders
to assure that the Company will have the
continued services of the Executive
following the merger (the "Merger") of the
Company and Washington Acquisition
Corporation, a Texas corporation and a
wholly owned subsidiary of Parent ("Merger
Sub"), pursuant to the Agreement and Plan
of Merger dated as of May 11th, 2001 (the
"Merger Agreement"), to provide the
surviving corporation after the Merger
with continuity of management. Pursuant to
the terms of the Prior Agreement (as
defined below), Executive would have had
the right to terminate his employment upon
consummation of the Merger. However,
Parent desires to retain the Executive's
continued services pursuant to the terms
of this Agreement. Therefore, in order to
accomplish these objectives, Parent, the
Company and the Executive agree as
follows:
NOW, THEREFORE, IT IS HEREBY
AGREED AS FOLLOWS:
1. Effective Date. The "Effective Date"
shall mean the "Effective Date" (as
defined in the Merger Agreement) of the
Merger. This Agreement shall be and become
effective on the Effective Date. If the
Effective Date does not occur on or before
February 28, 2002 or if the Merger
Agreement is earlier terminated in
accordance with its terms, then this
Agreement shall terminate automatically on
February 28, 2002 or on such earlier
Merger Agreement termination date and none
of Parent, the Company or the Executive
shall have any obligation to the other
hereunder.
2. Employment Period. Parent and the
Company hereby agree to employ the
Executive, and the Executive hereby agrees
to serve Parent and continue to serve the
Company, subject to the terms and
conditions of this Agreement, for the
period commencing on the Effective Date
and ending on the third anniversary
thereof (the "Employment Period").
3. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period,
(A) the Executive shall serve as Vice Chairman of
Parent and Chairman and Chief Executive
Officer of the Company, with the duties
and responsibilities assigned to him by
the Chief Executive Officer of Parent
consistent with such position and (B) the
Executive's services shall be performed in
Houston, Texas and New York, New York, as
determined in good faith by the Executive
to be necessary or appropriate for the
reasonable performance of his duties
hereunder; provided that for 2001, the
Executive shall not be required to be in
New York for more than 182 days during the
calendar year (inclusive of periods prior
to the Effective Date). As Chief Executive
Officer of the Company, all officers of
the Company (including, without
limitation, the Senior Vice Chairmen) will
report to the Executive, and the Executive
shall have responsibility over all
business units reporting to any such
officers at the Effective Date (except
with respect to investments and
administrative serv-
ices (such human resources and legal, which shall
report toother appropriate officers of Parent). The
consumer finance business unit shall also
report to an officer of Parent on a matrix
basis. Effective as of the Effective Date,
Parent shall recommend to Parent's board
of directors (the "Parent Board") that the
Executive be elected and thereafter be re-
nominated as a member of the Parent Board
and shall serve as a member of Parent
Board during his employment hereunder.
(ii) During the Employment Period, and
excluding any periods of vacation and sick
leave to which the Executive is entitled,
the Executive agrees to devote
substantially all of his attention and
time during normal business hours to the
business and affairs of the Company and
Parent and to use the Executive's
reasonable best efforts to perform
faithfully and efficiently such
responsibilities. During the Employment
Period it shall not be a violation of this
Agreement for the Executive to (A) serve
on corporate, civic or charitable boards
or committees, (B) deliver lectures,
fulfill speaking engagements or teach at
educational institutions and (C) manage
personal investments, so long as such
activities do not interfere with the
performance of the Executive's
responsibilities as an employee of the
Company and Parent in accordance with this
Agreement, and with respect to the
activities described in clauses (A) and
(C) hereof subject to Parent's policies as
in effect from time to time.
(b) Compensation.
(i) Initial Payment. On the
Effective Date, the Company shall pay to the
Executive a lump sum payment of $16.5
million, which is equal to the cash
payment that the Executive would have been
entitled to receive pursuant to Section
8(c)(iii) (the "Cash Severance") of the
Employment Agreement between the Company
and the Executive dated as of February 1,
1998, as amended (the "Prior Agreement"),
had he been terminated by the Company
without "cause" (as defined therein) upon
the Effective Date. In addition, on the
Effective Date, the Company shall pay to
the insurance company which has issued the
policy which is the subject of the Split-
Dollar Agreement between the Executive and
the Company, dated as of May 15, 1998, as
amended (the "Split-Dollar Agreement"),
the amount necessary to satisfy the
Company's obligations to make all premium
payments that the Company would have been
required to make for the remaining portion
of the "Premium Payment Period" (as
defined in the Split-Dollar Agreement),
pursuant to Paragraph 5(b) of the Split-
Dollar Agreement. The Executive shall also
be entitled to an excise tax gross-up
payment as set forth in Section 9 of the
Prior Agreement solely with respect to the
payments and benefits that the Executive
was entitled to receive under the terms of
the Prior Agreement, the Supplemental
Executive Retirement Agreement between the
Company and the Executive, dated as of
February 1, 1998, as amended (the "SERA")
and the Split-Dollar Agreement
(collectively, the "Pre-Effective Date
Agreements") or with respect to the
vesting of or lapse of restrictions on, as
a direct result of the Merger,
compensation earned, benefits accrued or
equity awards granted prior to the
Effective Date (including, without
limitation, benefits due and owing under
the Pre-Effective Date Agreements and
specifically incorporated herein). Except
as set forth in the preceding sentence, in
no event shall the Executive be entitled
to an excise tax gross-up payment with
respect to any amounts payable or benefits
provided under the terms of this
Agreement. The Executive acknowledges and
agrees that in no event shall he be
entitled to the payments or benefits under
the Prior Agreement based upon a
"Termination Deemed to Be after Change in
Control" (as described in the Prior
Agreement).
(ii) Base Salary. During the Employment
Period, the Executive shall receive an
annual base salary ("Annual Base Salary")
of no less than the annual base salary in
effect with respect to the Executive for
calendar year 2001.
(iii) Annual Bonus. For each calendar
year ending during the Employment Period,
the Executive shall receive (or at his
election pursuant to the deferred
compensation plan of Parent or the Company
(if any) defer part or all of) an annual
cash bonus at least equal to $4,500,000
(the "Annual Bonus") no later than January
31 of the following year, and the Annual
Bonus hereunder shall be in lieu of any
bonus amount (or portion thereof) payable
to the Executive under any agreement or
bonus plan of the Company, including
without limitation, the Company
Performance-Based Plan for Executive
Officers with respect to the calendar year
in which the Effective Date occurs, and
the Executive hereby waives all right
under any such agreements or plans. For
the calendar year within which the
Employment Period ends, the Executive
shall receive no later than January 31 of
the following year (or at his election
pursuant to the applicable deferred
compensation plan of Parent or the Company
(if any) defer part or all of) a bonus
which shall equal or exceed an amount
determined by multiplying $4,500,000 by a
fraction the numerator of which shall be
the number of days in such calendar year
which were included in the Employment
Period and the denominator of which shall
be 365.
(iv) Incentive Awards. At the time equity
grants are made to other employees of the
Company pursuant to the Merger Agreement,
the Executive will be granted equity based
awards with respect to the common stock of
Parent (the "2001 Service Awards"),
pursuant to the terms of the applicable
Parent plan as in effect from time to
time, that is equal in value to the value
of all options (valued using a Black-
Scholes value of $10.00, after giving
effect to the stock split in 2001),
restricted shares and Performance Awards
contained in a Performance Based
Restricted Stock/Restricted Share Unit
Award (valued using the fair market value
of the Company's common stock on the date
of grant) with respect to restricted share
units and performance awards that were
granted to the Executive by the Company on
January 17, 2001, and with the ratio of
the options, restricted shares and
performance awards being the same as the
ratio of the awards granted to the
Executive on January 17, 2001. For
purposes of the immediately preceding
sentence, the value of the options in
Parent's common stock shall be determined
using the Black-Scholes valuation model,
using assumptions established in manner
consistent with the assumptions applied by
Parent, consistent with past practices, in
respect of stock option grants in 2001.
Any stock options on Parent common stock
granted in connection with the 2001
Service Awards will have an exercise price
equal to the fair market value of the
Parent common stock subject thereto on the
date of grant and, except as otherwise
provided herein, shall vest in four equal
installments on each of the first, second,
third and fourth anniversaries of the date
of grant. Any restricted shares and
Performance Awards granted in respect of
Parent common stock shall have terms and
conditions that are substantially
comparable to those applied in respect of
the 2001 awards made by the Company,
provided that in no event shall the 2001
Service Awards vest upon the Executive's
retirement or attainment of a specified
age. In the event that the Executive
receives any equity award grants (other
than reload options) from the Company
after the date hereof, the 2001 Service
Awards shall be reduced by the value of
any such awards (determined using a Black-
Scholes value with respect to options,
using assumptions established on a basis
consistent with those applied by the
Company in determining such Black-Scholes
value in respect of the 2001 grants to the
Executive, and the fair market value on
the date of grant with respect to
performance based or restricted stock
awards).
(v) Retirement Benefits. On the Effective
Date, the Executive shall be paid the
benefits payable to the Executive under
the SERA, which benefits shall be
calculated under the terms and conditions
thereof (including without limitation, any
enhanced service and age credits provided
under Section 2.6 in respect of a
termination of the Executive's employment
following the occurrence of a Change of
Control) as though the Executive's
employment terminated on the Effective
Date without Cause and the Executive
elected to receive a lump sum distribution
of such benefits, with any offset against
such benefits related to the benefits
payable to the Executive under any other
retirement plan maintained by the Company
based on the benefits accrued by the
Executive thereunder as of the Effective
Date. From and after the Effective Date,
the Executive shall not be entitled to
accrue any additional benefit under the
SERA. From and after the Effective Date,
the Executive shall participate in the
applicable retirement plans of Parent or
the Company, whichever is available
generally to the employees of the Company,
as though no SERA benefit was accrued,
provided that the Executive shall not
become a participant in the Company's or
Parent's Supplemental Executive Retirement
Plan and that in no event shall the
Executive be entitled to duplicate
benefits with respect to the same period
of service. To the extent anything
contained in this Section 3(b)(v) is
inconsistent with the terms and conditions
of the SERA, the SERA shall be deemed
amended hereby.
(vi) Other Employee Benefit Plans. During
the Employment Period, except as otherwise
expressly provided herein, the Executive
shall be entitled to participate in all
employee benefit, welfare and other plans,
practices, policies and programs generally
applicable to similarly situated
executives of Parent or the Company,
provided that, in no event shall the
Executive be entitled to receive duplicate
benefits with respect to the same period
of service under any plans, practices,
policies or programs of the Company and/or
Parent. Notwithstanding anything contained
herein to the contrary, the Executive
expressly understands and agrees that he
will not initially be entitled to become a
participant in the STARR International
Co., Inc. ("SICO") Deferred Compensation
Profit Participation Plan ("SICO Plan") or
to become a stockholder in X.X. XXXXX &
Co., Inc. ("STARR"), but that following
the first anniversary of the Effective
Date, Parent will recommend to the Boards
of Directors of SICO and STARR that the
Executive be eligible to commence
participation in the SICO Plan and to
become a stockholder of STARR, consistent
with similarly situated executives of
Parent. Any participation in the SICO Plan
or STARR will require a mutually agreeable
reduction in the other compensation
payable or provided to the Executive,
including without limitation the Base
Salary and the Annual Bonus, and such
reduction will be a condition to
participation in such plans and will in no
event be deemed a breach of this
Agreement. Any reduction in the
compensation otherwise payable hereunder
shall be agreed to, in writing, by the
parties in advance of the time such
reduction is to be effective, and such
writing shall set forth, in reasonable
detail sufficient for the Executive to
understand, the compensation being
provided in lieu thereof and all vesting
and forfeiture provisions related thereto
(and other restrictions, if any, on the
ability of the Executive to access or
receive such compensation).
(vii) Expenses. During the Employment
Period, the Executive shall be entitled to
receive prompt reimbursement for all
reasonable expenses incurred by the
Executive in accordance with Parent's
policies.
(viii) Perquisites. During the
Employment Period, the Executive shall be
entitled to the same perquisites as were
made available to him by the Company
immediately prior to the Effective Date in
accordance with the terms of the Prior
Agreement.
(ix) Vacation. During the Employment
Period, the Executive shall be entitled to
paid vacation in accordance with the
plans, policies, programs and practices of
Parent as in effect with respect to the
similarly situated executives of Parent.
(x) Other Benefits From the Prior
Agreement. The Executive shall be provided
with the medical and dental benefits
described in Section 8(e)(i) of the Prior
Agreement, as though the Executive's
employment terminated under such Prior
Agreement without Cause on the Effective
Date, including, without limitation,
during his employment hereunder, if such
benefits are more favorable to the
Executive than those which would be
available to him as an employee of Parent.
Parent shall indemnify the Executive
during his employment hereunder and
following the termination of the
Executive's employment hereunder, on the
same basis as Parent indemnifies similarly
situated executives of Parent. Upon and
following any termination of the
Executive's employment with the Company
and Parent following the Effective Date,
regardless of the reason, the Company
shall provide the Executive with the life
and accident benefits (excluding the split-
dollar benefits) described in Section
8(c)(iv) of the Prior Agreement, the auto
allowance described in Section 8(c)(vi) of
the Prior Agreement, in any such case for
the 36 months after his termination of
employment. For purposes of the preceding
sentence, the monthly amount of the car
allowance shall be at least equal to the
amount of the annual lease payment on the
car made available to the Executive for
his use immediately prior to the Effective
Date, divided by 12. Following the
Executive's termination of employment, the
Executive shall be provided the office
facilities described in 8(e)(iii) of the
Prior Agreement in New York City (or such
other city as the parties agree) until the
date otherwise specified therein.
4. Termination of Employment.
(a) Death or Disability. The
Executive's employment shall terminate
automatically upon the Executive's death
during the Employment Period. If the Company
or Parent determines in good faith that the
Disability of the Executive has occurred
during the Employment Period (pursuant to
the definition of Disability set forth
below), it may give to the Executive
written notice in accordance with Section
10(b) of this Agreement of its intention
to terminate the Executive's employment.
In such event, the Executive's employment
with the Company shall terminate effective
on the 30th day after receipt of such
notice by the Executive (the "Disability
Effective Date"), provided that, within
the 30 days after such receipt, the
Executive shall not have returned to
full-time performance of the Executive's
duties. For purposes of this Agreement,
"Disability" shall mean the absence of the
Executive from the Executive's duties with
the Company on a full-time basis for 180
consecutive business days as a result of
incapacity due to mental or physical
illness which is determined to be total
and permanent by a physician selected by
the Company or its insurers and reasonably
acceptable to the Executive or the
Executive's legal representative.
(b) With or Without Cause. The Company or
Parent may terminate the Executive's
employment during the Employment Period
with or without Cause. For purposes of
this Agreement, "Cause" shall mean:
(i) the continued failure of
the Executive to perform substantially the
Executive's duties with the Company or one
of its affiliates (other than any such
failure resulting from incapacity due to
physical or mental illness), after a
written demand for substantial performance
is delivered to the Executive by Parent
that specifically identifies the manner in
which Parent believes that the Executive
has not substantially performed the
Executive's duties, or
(ii) the engaging by the Executive in
illegal conduct or gross misconduct that
is materially and demonstrably injurious
to the Company or one of its affiliates,
or
(iii) conviction of a felony or guilty
or nolo contendere plea by the Executive
with respect thereto.
Any act, or failure to act,
based upon authority given pursuant to a
resolution duly adopted by the Parent
Board or upon the instructions of the
Chief Executive Officer of Parent or based
upon the advice of counsel for Parent
shall be conclusively presumed to be done,
or omitted to be done, by the Executive in
good faith and in the best interests of
the Company. Any determination as to
whether Cause exists under this Agreement
shall be made by resolution of a majority
of the members of the Parent Board
(excluding the Executive), after the
Executive has had the opportunity to
respond to such board in person (with the
assistance of counsel) with respect to
such acts or omissions as are alleged by
Parent to constitute Cause, which acts and
omissions shall be identified to the
Executive in reasonable detail in writing
within a reasonable period (but not less
than the three business days) prior to
time that the Executive has his hearing
before the Parent Board.
(c) Good Reason. The Executive's
employment may be terminated by the
Executive for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean a
material breach by the Company or Parent
of a material provision of this Agreement.
Without limiting the generality of the
foregoing, Parent and the Executive agree
that any of the following would constitute
a material breach of this Agreement by
Parent: (i) any reduction in the
Executive's base salary or annual bonus
(other than a reduction consented to by
the Executive in writing, including,
without limitation, any reduction
contemplated by Section 3(b)(vi)); (ii)
any failure, during the period after the
Effective Date and during the Executive's
employment with Parent and the Company
during the Employment Period, to nominate
or elect (or re-nominate or re-elect) the
Executive as a member of the Parent Board;
(iii) any material adverse change (without
his prior written consent) in the
Executive's duties and responsibilities,
or titles, as set forth in Section 3(a)(i)
hereof; and (iv) any relocation of his
principal place of employment without his
prior written consent, other than for
travel reasonably necessary in the
performance of his duties hereunder.
(d) Notice of Termination. Any
termination by the Company for Cause, or
by the Executive for Good Reason, shall be
communicated by Notice of Termination to
the other party hereto given in accordance
with Section 10(b) of this Agreement. For
purposes of this Agreement, a "Notice of
Termination" means a written notice which
(i) indicates the specific termination
provision in this Agreement relied upon,
(ii) to the extent applicable, sets forth
in reasonable detail the facts and
circumstances claimed to provide a basis
for termination of the Executive's
employment under the provision so
indicated and (iii) if the Date of
Termination (as defined below) is other
than the date of receipt of such notice,
specifies the termination date
(which date shall be not more than thirty days
after the giving of such notice). The failure by
the Executive, the Company or Parent to
set forth in the Notice of Termination any
fact or circumstance which contributes to
a showing of Good Reason or Cause shall
not waive any right of the Executive, the
Company or Parent, respectively, hereunder
or preclude the Executive, the Company or
Parent, respectively, from asserting such
fact or circumstance in enforcing the
Executive's, the Company's or Parent's
rights hereunder.
(e) Date of Termination. "Date of
Termination" means (i) if the Executive's
employment is terminated by the Company or
Parent for Cause, or by the Executive with
or without Good Reason, the date of
receipt of the Notice of Termination or
any later date specified therein within 30
days of such notice, as the case may be,
(ii) if the Executive's employment is
terminated by the Company or Parent other
than for Cause or Disability, the Date of
Termination shall be the date on which the
Company or Parent notifies the Executive
of such termination and (iii) if the
Executive's employment is terminated by
reason of death or Disability, the Date of
Termination shall be the date of death of
the Executive or the Disability Effective
Date, as the case may be.
5. Obligations of the Company upon
Termination. (a) Good Reason; Other Than
for Cause, Death or Disability. If, during
the Employment Period, the Company or
Parent shall terminate the Executive's
employment other than for Cause, death or
Disability or the Executive shall
terminate employment for Good Reason:
(i) the Company shall pay to the
Executive in a lump sum in cash within 30
days after the Date of Termination the
aggregate of the following amounts:
A. (1) the Executive's Annual Base
Salary through the Date of Termination to
the extent not theretofore paid ("Accrued
Salary"), (2) the benefits described in
Section 3(b)(x) hereof and (3) any
benefits to which the Executive is
entitled under the terms and conditions of
any applicable employee benefits plan,
program or agreement (collectively,
subclause (1)-(3) shall be referred to as
the "Accrued Obligations"); and
B. a lump sum amount equal to the
greater of (x) the severance under the
severance policy of Parent applicable to
similarly situated executives of Parent,
as in effect from time to time, and (y)
the sum of the Executive's Annual Base
Salary and the Annual Bonus amount set
forth in Section 3(b)(iii); and
C. a pro-rata portion of the Annual
Bonus payable to the Executive under
Section 3(b)(iii), which shall be
determined by multiplying such bonus by a
fraction, the numerator of which is the
number of days in the calendar year in
which the Executive's date of termination
occurs which have elapsed prior to such
date of termination and the denominator of
which is 365; and
D. outplacement services for the
duration and of the nature described in
Section 8(c)(v) of the Prior Agreement;
and
(ii) to the extent granted prior
to the Date of Termination, the 2001 Service
Awards shall vest immediately.
(b) Death. If the Executive's employment
is terminated by reason of the Executive's
death during the Employment Period, this
Agreement shall terminate without further
obligations to the Executive's legal
representatives under this Agreement,
other than the Accrued Obligations (to the
extent applicable upon the Executive's
death). Accrued Salary shall be paid to
the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within
30 days of the Date of Termination. In
addition, (i) to the extent granted prior
to the Date of Termination, all of the
2001 Service Awards shall become fully
vested and, to the extent applicable,
exercisable for the maximum period
allowable under the applicable plan for a
termination due to death and (ii) the
Executive's estate shall be entitled to
the death benefits as in effect on the
date of the Executive's death with respect
to similarly situated executives of Parent
(including, without limitation, any rights
to accelerated vesting and enhanced
exercise periods applicable in respect of
any equity awards made to the Executive in
connection with his employment after the
Effective Date (excluding the 2001 Service
Awards, which are addressed in subclause
(i)) that are generally available to
executive officers of Parent whose
employment has terminated for such reason
under the terms of the plan, program or
arrangement under which such awards have
been made (the "Equity Enhancements")).
(c) Disability. If the Executive's
employment is terminated by reason of the
Executive's Disability during the
Employment Period, this Agreement shall
terminate without further obligations to
the Executive, other than in respect of
the Accrued Obligations. Accrued Salary
shall be paid to the Executive in a lump
sum in cash within 30 days of the Date of
Termination. In addition, (i) to the
extent granted prior to the Date of
Termination, all of the 2001 Service
Awards shall become fully vested and, to
the extent applicable, exercisable for the
maximum period allowable under the
applicable Parent plan for a termination
due to disability and (ii) the Executive
shall be entitled after the Disability
Effective Date to receive, disability and
other benefits as in effect at any time
thereafter generally with respect to
similarly situated executives of Parent
(including, without limitation, the Equity
Enhancements).
(d) Cause; Other than for Good Reason. If
the Executive's employment shall be
terminated for Cause or the Executive
terminates his employment without Good
Reason during the Employment Period, this
Agreement shall terminate without further
obligations to the Executive other than
the obligation to pay to the Executive the
Accrued Obligations and the only duties,
obligations and liabilities of the
Executive to the Company or Parent
thereafter shall be the restrictive
covenants set forth in Section 7 hereof.
6. Full Settlement. The Company's
obligation to make the payments provided
for in this Agreement and otherwise to
perform its obligations hereunder shall
not be affected by any set-off,
counterclaim, recoupment, defense or other
claim, right or action which the Company
or Parent may have against the Executive
or others.
7. Confidential Information;
Noncompetition; Nonsolicitation.
(a) The Executive shall hold in a
fiduciary capacity for the benefit of the
Company and Parent all secret or
confidential information, knowledge or
data relating to the Company, Parent or
any of their affiliated companies, and
their respective businesses, which shall
have been obtained by the Executive during
the Executive's employment by the Company,
Parent or any of their affiliated
companies and which shall not be or become
public knowledge
(other than by acts by the Executive or
representatives of the Executive in violation
of this Agreement). After termination of the
Executive's employment with the Company, Parent
or any of their affiliated companies, the
Executive shall not, without the prior
written consent of Parent or as may
otherwise be required by law or legal
process, communicate or divulge any such
information, knowledge or data to anyone
other than the Company, Parent or any of
their affiliated companies and those
designated by them.
(b) The Executive agrees that until the
earlier of (i) the fourth anniversary of
the Effective Date and (ii) the first
anniversary of the Executive's termination
of employment for any reason (the
"Restricted Period"), the Executive will
not, without the written consent of
Parent, engage in any business of, or
enter the employ of, or have any interest
in, directly or indirectly, any other
person, firm, corporation or other entity
engaged in a business that competes with,
or provides services and/or products of a
nature substantially similar to those
provided by, the Company, Parent or their
affiliates, with an office or facility in
any geographic area in which the Company,
Parent or their affiliates do business.
Nothing herein shall restrict the
Executive from owning 1% or less of the
outstanding securities of any corporation
or other entity whose securities are
listed on any national securities exchange
or traded over-the-counter, if the
Executive has no other connection or
relationship with the issuer of such
securities.
(c) During the Restricted Period, the
Executive will not, directly or
indirectly, on behalf of the Executive or
any other person, solicit for employment
or employ by other than the Company or
Parent any person who, at any time during
the six-month period immediately preceding
the date of such solicitation, was an
employee of the Company, Parent or any of
their affiliates.
(d) The Executive acknowledges and agrees
that due to the nature of the business in
which the Company, Parent and their
affiliates are engaged and because of the
nature of the confidential information to
which the Executive has access, it would
be impractical and excessively difficult
to determine the actual damages of the
Company or Parent in the event the
Executive breached any of the covenants of
this Section 7 and that remedies at law
(such as monetary damages) for any breach
of the Executive's obligations under this
Section 7 would be inadequate. The
Executive therefore agrees and consents
that, if the Executive commits any breach
of a covenant under this Section 7 or
threatens to commit any such breach, the
Company and Parent shall have the right
(in addition to, and not in lieu of, any
other right or remedy that may be
available to each of them) to temporary
and permanent injunctive relief from a
court of competent jurisdiction. With
respect to any provision of this Section 7
finally determined by a court of competent
jurisdiction to be unenforceable, the
Executive, the Company and Parent hereby
agree that such court shall have
jurisdiction to reform this Agreement or
any provision hereof so that it is
enforceable to the maximum extent
permitted by law, and the parties agree to
abide by such court's determination.
(e) The provisions of this Section 7
shall remain in full force and effect
until the expiration of the period
specified therein, notwithstanding the
earlier termination of the Executive's
employment hereunder, the Employment
Period or this Agreement, provided that
the Effective Date has occurred.
8. Successors.
(a) This Agreement is personal to the
Executive and without the prior written
consent of the Company and Parent shall
not be assignable by the Executive
otherwise than by will or the laws of
descent and distribution. This Agreement
shall inure to the benefit of and be
enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the
benefit of and be binding upon the Company
and Parent and their respective successors
and assigns.
(c) The Company and Parent will require
any successor (whether direct or indirect,
by purchase, merger, consolidation or
otherwise) to all or substantially all of
the business and/or assets of the Company
or Parent, as applicable, to assume
expressly and agree to perform this
Agreement in the same manner and to the
same extent that the Company and/or Parent
would be required to perform it if no such
succession had taken place. As used in
this Agreement, "Company" and "Parent"
shall mean the Company and Parent as
hereinbefore defined and any successor to
their respective businesses and/or assets
as aforesaid which assumes and agrees to
perform this Agreement by operation of
law, or otherwise. As used in this
Agreement, the term "affiliated companies"
and "affiliates" shall include any company
controlled by, controlling or under common
control with the Company.
9. Dispute Mechanism.
(a) Pre-Effective Date Agreements.
To the extent that there is any dispute between
the parties with respect to any benefits
payable hereunder which are due and
payable under a Pre-Effective Date
Agreement (including, without limitation,
the amounts payable under Sections 3(b)(i)
and 3(b)(x), the SERA benefits payable
under Section 3(b)(v) and the benefits
payable or provided under Section
5(a)(i)(D)), such dispute shall be
resolved pursuant to the mechanism set
forth in Section 21 of the Prior
Agreement, which is incorporated by
reference herein and made a part hereof,
and Parent shall be obligated to pay (or
shall cause the Company to pay) the
Executive's legal and arbitration fees and
expenses as provided under Section 11 of
the Prior Agreement, which is incorporated
by reference herein and made a part
hereof.
(b) Benefits and Claims Not Related to
the Pre-Effective Date Agreements. To the
extent that there is any dispute between
the parties with respect to any benefits
payable hereunder which are not due and
payable under a Pre-Effective Date
Agreement (and therefore not subject to
the dispute mechanism set forth in Section
9(a) above), Parent shall be obligated to
pay (or shall cause the Company to pay)
the Executive's legal and arbitration fees
and expenses related to such dispute in
the event that the Executive prevails at
arbitration or trial as to any material
issue presented in such dispute.
10. Miscellaneous.
(a) This Agreement shall be governed
by and construed in accordance with the laws
of the State of New York, without
reference to principles of conflict of
laws. The captions of this Agreement are
not part of the provisions hereof and
shall have no force or effect. This
Agreement may not be amended or modified
otherwise than by a written agreement
executed by the parties hereto or their
respective successors and legal
representatives.
(b) All notices and other communications
hereunder shall be in writing and shall be
given by hand delivery to the other party
or by registered or certified mail, return
receipt requested, postage prepaid,
addressed as follows:
If to the Executive: At the
most recent address on file at the Company
If to the Company:
American General Corporation
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Copy to Parent:
American International Group, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
or to such other address as either party
shall have furnished to the other in
writing in accordance herewith. Notice and
communications shall be effective when
actually received by the addressee.
(c) The Company's obligations (i) to
provide the Executive with benefits and
compensation pursuant to Section 5, (ii)
to pay any gross-up payment required to be
paid under Section 3(b)(i), and (iii) to
pay any amount not previously paid (and
required to be paid hereunder ) in respect
of any Pre-Effective Date Agreement shall
survive the termination of the Executive's
employment hereunder, the Employment
Period or this Agreement, provided that
the Effective Date has occurred.
(d) The invalidity or unenforceability of
any provision of this Agreement shall not
affect the validity or enforceability of
any other provision of this Agreement.
(e) None of the benefits provided to the
Executive under any of the Pre-Effective
Date Agreements or under Section 5 hereof
shall be subject to any mitigation or
offset, except as may otherwise be
expressly provided hereunder.
(f) The Company or Parent may withhold
from any amounts payable under this
Agreement such Federal, state, local or
foreign taxes as shall be required to be
withheld pursuant to any applicable law or
regulation.
(g) The Executive's or the Company's or
Parent's failure to insist upon strict
compliance with any provision of this
Agreement or the failure to assert any
right the Executive, the Company or Parent
may have hereunder shall not be deemed to
be a waiver of such provision or right or
any other provision or right of this
Agreement.
(h) From and after the Effective Date,
this Agreement shall supersede and
terminate the Prior Agreement and any
amendments thereto, except to the extent
that any of the benefits made available
under the Prior Agreement or any of the
other provisions of the Prior Agreement
are expressly intended to continue under
the terms of this Agreement. From and
after the Effective Date, the SERA and the
Split-Dollar Agreement shall be amended in
accordance with the terms hereof, and,
upon satisfaction of the Company's
obligations as set forth herein, the
Company and Parent shall have no further
obligations under such agreements.
IN WITNESS WHEREOF, the
Executive has hereunto set the Executive's
hand and, pursuant to the authorization
from their respective Boards of Directors,
each of the Company and Parent has caused
these presents to be executed in its name
on its behalf, all as of the day and year
first above written.
/s/Xxxxxx X. Xxxxxx
XXXXXX X. XXXXXX
AMERICAN GENERAL CORPORATION
By /s/ Xxxx X. Xxxx
Name: XXXX X. XXXX
Title:Executive Vice President, General
Counsel and Corporate Secretary
AMERICAN INTERNATIONAL GROUP, INC.
By /s/ Xxxxxx X. Xxxxxxxx
Name: XXXXXX X. XXXXXXXX
Title:Senior Vice President and General Counsel
