AMERICAN INTERNATIONAL GROUP, INC. 2009 TARP RSU AWARD AGREEMENT
Exhibit 10.3
AMERICAN INTERNATIONAL GROUP, INC.
2009 TARP RSU AWARD AGREEMENT
2009 TARP RSU AWARD AGREEMENT
The Compensation and Management Resources Committee of the Board of Directors of AIG,
including any substitute or successor thereto (the “Committee”), has awarded you TARP Restricted
Stock Units (“RSUs”), based on the Committee’s assessment of your performance. This award
agreement (this “Award Agreement”) sets forth the terms and conditions of your award (this
“Award”).
1. Status of Award; Defined Terms. This Award is being provided to you as an employee
subject to the Determination Memorandum of the Special Master, dated as of October 22, 2009 (the
Determination”). To comply with the Determination and with certain requirements in the applicable
to you under the TARP Standards for Compensation and Corporate Governance, Interim Final Rule, 31
C.F.R. Part 30 (the “Rule”), the Award is intended to be a grant of “long-term restricted stock” as
defined in the Rule. The Award shall be interpreted in accordance with these intentions.
Capitalized terms used but not otherwise defined in this Award Agreement have the meanings given in
the attached Glossary of Terms.
2. Award. The number of RSUs subject to this Award is set forth at the end of this
Award Agreement. Each RSU constitutes an unfunded and unsecured promise of AIG to deliver (or
cause to be delivered) to you, subject to the terms of this Award Agreement, cash equal to the Fair
Market Value of one share of Common Stock on the Payout Date as provided herein.
3. Vesting; Payout.
(a) Vesting. Except as provided in this Paragraph 3 and in Paragraphs 4, 5, 6 and 7,
you shall become vested in the RSUs on the third anniversary of the Date of Grant specified at the
end of this Award Agreement (the “Scheduled Vesting Date”). Except as provided in this Paragraph 3
and Paragraph 6, if your Employment terminates for any reason prior to the Scheduled Vesting Date,
your rights in respect of all of your RSUs shall terminate, and no cash shall be paid in respect of
such RSUs.
(b) Payment Dates. Subject to Paragraph 8, the RSUs shall not be payable prior to the
Scheduled Vesting Date. Once vested, the RSUs shall become payable on the first date at which:
(i) With respect to 25% of the RSUs, AIG has repaid at least of 25% of the
aggregate financial assistance received under the Troubled Asset Relief Program
(“TARP”);
(ii) With respect to an additional 25% of the RSUs (for an aggregate total of
50% of the RSUs), AIG has repaid at least 50% of the aggregate financial assistance
received under TARP;
(iii) With respect to an additional 25% of the RSUs (for an aggregate
total of 75% of the RSUs), AIG has repaid 75% of the aggregate financial assistance
received under TARP; and
(iv) With respect to the remainder of the RSUs, AIG has repaid 100% of
the aggregate financial assistance received under the TARP (such date and the payment dates
set forth in clauses (i), (ii) and (iii) of this Paragraph 3(b), each a “Payout Date”).
(c) Payout. Except as provided in this Paragraph 3 and in Xxxxxxxxxx 0, 0, 0, 0 xxx
0, xxx XXXx shall be paid on or promptly following the Payout Date, and in any case within 30 days
of the Payout Date.
(d) Death. Notwithstanding any other provision of this Award Agreement, if you die,
the condition set forth in Paragraph 3(a) shall be waived with respect to your then-unvested RSUs
(such that any then-unvested outstanding RSUs shall vest) and the cash corresponding to your
outstanding RSUs shall be paid to the representative of your estate promptly after the later of
your death and the Payout Date.
(e) Delay of Payment. The Committee may, in its sole discretion, defer payment of
RSUs or permit you to elect to defer payment of RSUs, in each case in a manner that conforms to the
requirements of Section 409A(a)(4) of the Code.
4. Termination of RSUs.
(a) Except as provided in Paragraphs 3(d) and 6, your rights in respect of your outstanding
unvested RSUs shall immediately terminate, and no cash shall be paid in respect of such unvested
RSUs, if at any time prior to the Scheduled Vesting Date your Employment with AIG terminates for
any reason, or you are otherwise no longer actively Employed by AIG.
(b) Unless the Committee determines otherwise, and except as further provided in Paragraph 5,
your rights in respect of all of your RSUs (whether or not vested) shall immediately terminate, and
no cash shall be paid in respect of such RSUs, if at any time prior to the Payout Date:
(i) you attempt to have any dispute under this Award Agreement or the Plan resolved in
any manner that is not provided for by Paragraph 15; or
(ii) any event that constitutes Cause has occurred; or
(iii) you in any manner, directly or indirectly, (A) Solicit any Client to transact
business with a Competitive Enterprise or to reduce or refrain from doing any business with
AIG or (B) interfere with or damage (or attempt to interfere with or damage) any
relationship between AIG and any such Client or (C) Solicit any person who is an employee
of AIG to resign from AIG or to apply for or accept employment with any Competitive
Enterprise; or
(iv) you fail to certify to AIG, in accordance with procedures established by the
Committee, that you have complied, or the Committee determines that you have failed to
comply, with all of the terms and conditions of this Award Agreement as of the Payout Date.
By accepting the
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payment of cash under this Award Agreement, you shall be deemed to have represented
and certified at such time that you have complied with all the terms and conditions of this
Award Agreement.
(c) Unless the Committee determines otherwise, if the Payout Date in respect of any of your
outstanding RSUs occurs and you have not complied with the conditions or your obligations under
Paragraph 4(b)(iv), all of your rights with respect to your outstanding RSUs shall terminate
immediately.
5. Repayment and Clawback.
(a) If, following the payment of cash, the Committee determines that all terms and conditions
of this Award Agreement in respect of such payment were not satisfied, AIG shall be entitled to
receive, and you shall be obligated to pay AIG immediately upon demand therefor, the amount of cash
paid with respect to the Payout Date, net of any taxes withheld.
(b) If AIG determines that this Award or any payment made pursuant to this Award was based on
materially inaccurate financial statements (which includes, but is not limited to, statements of
earnings, revenues or gains) or any other materially inaccurate performance metric criteria, then
(i) the RSUs shall be forfeited or, and (ii) following payment of the RSUs, AIG shall be entitled
to receive, and you shall be obligated to repay AIG immediately upon demand therefor, the amount of
cash paid with respect to the Payout Date. The repayment described in clause (ii) of this
Paragraph 5(b) shall be net of any taxes withheld on the original payment to you, except to the
extent that a greater payment is required by the Rule or the Determination. AIG will determine
whether a financial statement or other performance metric criteria is materially inaccurate in
accordance with the standards set forth in § 30.8 of the Rule, or any similar or successor
provision applicable to AIG and in effect from time to time.
6. Disability.
(a) Notwithstanding any other provision of this Award Agreement, but subject to Paragraph
5(b), if you become subject to Disability, the condition set forth in Paragraph 3(a) shall be
waived with respect to your then outstanding unvested RSUs (such that any then-unvested outstanding
RSUs shall vest) and the cash corresponding to your outstanding RSUs shall be paid to you promptly
after the later of the date you become subject to Disability and the Payout Date, but all other
conditions of this Award Agreement shall continue to apply.
(b) Without limiting the application of Paragraph 3(b) or Paragraph 3(c), your rights in
respect of any outstanding RSUs that become vested solely by reason of Paragraph 6(a) shall
terminate, and no cash shall be paid in respect of such outstanding RSUs if, following your
becoming subject to Disability and prior to the payment of cash in respect of such outstanding
RSUs, you (i) form, or acquire a 5% or greater equity ownership, voting or profit participation
interest in, any Competitive Enterprise or (ii) associate in any capacity (including, but not
limited to, association as an officer, employee, partner, director, consultant, agent or advisor)
with any Competitive Enterprise.
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7. Non-transferability. Except as otherwise may be provided by the Committee, this
Award (or any rights and obligations hereunder) may not 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. Any sale,
exchange, transfer, assignment, pledge, hypothecation, or other disposition in violation of this
Paragraph 7 will be null and void and if this Award is hedged in any manner it will immediately be
forfeited. All of the terms and conditions of this Award Agreement will be binding upon any
permitted successors and assigns.
8. Withholding, Consents, Other Limits and Legends.
(a) You shall be solely responsible for any applicable taxes (including, without limitation,
income and excise taxes) and penalties, and any interest that accrues thereon, incurred in
connection with your Award. Unless you otherwise direct, AIG will satisfy applicable tax
withholdings and make applicable deductions in respect of your Award and pay cash pursuant to
Paragraph 3(c) in respect of the remainder. In the alternative, you may remit cash to AIG (through
payroll deduction or otherwise), in each case in an amount sufficient in the opinion of AIG to
satisfy such withholding obligation.
(b) With respect to any Federal Insurance Contributions Act (FICA) tax or other employment
taxes that may be due in respect of your Award, AIG may accelerate the payout of RSUs under this
Award Agreement in order to satisfy such taxes.
(c) Your right to receive cash pursuant to the Award is conditioned on the receipt to the
reasonable satisfaction of the Committee of any required Consent that the Committee may reasonably
determine to be necessary or advisable.
(d) No Award granted under this Award Agreement will increase the amounts payable to you
pursuant to AIG’s severance plans and arrangements.
9. Section 409A. The RSUs are intended to be paid on or promptly following the first
date on which payment is permissible under both the Determination and the provisions of the Rule
regarding “long-term restricted stock”, and therefore to be exempt from Section 409A under the
guidance provided in the Rule and in IRS Notice 2009-92 (the “Guidance”).
10. No Rights to Continued Employment. Nothing in this Award Agreement shall be
construed as giving you any right to continued Employment by AIG or affect any right that AIG may
have to terminate or alter the terms and conditions of your Employment.
11. Successors and Assigns of AIG. The terms and conditions of this Award Agreement
shall be binding upon, and shall inure to the benefit of, AIG and its successor entities.
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12. Committee Discretion. Subject to Paragraph 13, the Committee shall have full
discretion with respect to the interpretation of this Award Agreement and any actions to be taken
or determinations to be made in connection with this Award Agreement (including, without
limitation, whether you have become subject to Disability), and its interpretations, actions and
determinations shall be final, binding and conclusive.
13. Amendment. The Committee reserves the right at any time to amend the terms and
conditions set forth in this Award Agreement; provided that, notwithstanding the foregoing, no such
amendment shall materially adversely affect your rights and obligations under this Award Agreement
without your consent (or the consent of your estate, if such consent is obtained after your death),
and provided, further, that the Committee may not accelerate or postpone the payment of the cash
due in respect of RSUs to occur at a time other than the applicable time provided for in this Award
Agreement or in accordance with Paragraph 9. Any amendment of this Award Agreement shall be in
writing signed by an authorized member of the Committee or a person or persons designated by the
Committee.
14. Adjustment. Subject to Paragraph 13, the Committee shall, in its sole discretion,
equitably adjust the terms of this Award to preserve the benefits or potential benefits intended to
be made available to you for any increase or decrease in the number of issued shares of Common
Stock resulting from a recapitalization, spin-off, split-off, stock split, stock dividend,
combination or exchange of shares of Common Stock, merger, consolidation, rights offering,
separation, reorganization or liquidation, or any other change in the corporate structure or shares
of AIG. Notwithstanding the foregoing, the Committee may, in its sole discretion, decline to adjust
the terms of this Award if it determines that such adjustment would violate applicable law or
result in adverse tax consequences to you or to AIG.
15. Arbitration; Choice of Forum.
(a) Any dispute, controversy or claim between AIG and you, arising out of or relating to or
concerning this Award Agreement, shall be finally settled by arbitration in New York City before,
and in accordance with the rules then obtaining of, the New York Stock Exchange, Inc. (the “NYSE”)
or, if the NYSE declines to arbitrate the matter (or if the matter otherwise is not arbitrable by
it), the American Arbitration Association (the “AAA”) in accordance with the commercial arbitration
rules of the AAA. Prior to arbitration, all claims maintained by you must first be submitted to the
Committee in accordance with claims procedures determined by the Committee. This paragraph is
subject to the provisions of Paragraphs 15(b) and (c) below.
(b) AIG AND YOU HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED IN THE CITY OF NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO OR CONCERNING THIS AWARD AGREEMENT THAT IS NOT OTHERWISE ARBITRATED OR RESOLVED
ACCORDING TO PARAGRAPH 15(a) OF THIS AWARD AGREEMENT. This includes any suit, action or proceeding
to compel arbitration or to enforce an arbitration award. AIG and you acknowledge that the forum
designated by this Paragraph 15(b) has a reasonable relation to this Award Agreement and to your
relationship with AIG.
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Notwithstanding the foregoing, nothing herein shall preclude AIG from bringing any action,
suit or proceeding in any other court for the purpose of enforcing the provisions of this Paragraph
15.
(c) The agreement by you and AIG as to forum is independent of the law that may be applied in
the action, suit or proceeding and you and AIG agree to such forum even if the forum may under
applicable law choose to apply non-forum law. You and AIG hereby waive, to the fullest extent
permitted by applicable law, any objection which you or AIG 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 Paragraph 15(b). You and AIG undertake not to commence any action, suit or proceeding arising
out of or relating to or concerning this Award Agreement in any forum other than a forum described
in this Paragraph 15. You and (subject to the last sentence of Paragraph 15(b)) AIG 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 you and AIG.
(d) You irrevocably appoint the Secretary of AIG as your agent for service of process in
connection with any action, suit or proceeding arising out of or relating to or concerning this
Award Agreement which is not arbitrated pursuant to the provisions of Paragraph 15(a), who shall
promptly advise you of any such service of process.
(e) You hereby agree to keep confidential the existence of, and any information concerning, a
dispute described in this Paragraph 15, except that you may disclose information concerning such
dispute to the arbitrator or court that is considering such dispute or to your 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).
(f) You recognize and agree that prior to the grant of this Award you have no right to any
benefits hereunder. Accordingly, in consideration of the receipt of this Award, you expressly waive
any right to contest the amount of this Award, terms of this Award Agreement, any determination,
action or omission hereunder by the Committee, or any amendment to this Award Agreement (other than
an amendment to which your consent is expressly required by Paragraph 13) and you expressly waive
any claim related in any way to the Award including any claim based on any promissory estoppel or
other theory in connection with this Award and your Employment with AIG.
16. Governing Law. THIS AWARD SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
17. TARP Restrictions. Payments under this Award Agreement are subject to applicable
regulations issued by the U.S. Department of the Treasury and applicable requirements of agreements
between AIG and the U.S. government, as the same are in effect from time to time. You may receive
compensation under this Award Agreement only to the extent that it is consistent with those
regulations and requirements.
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18. Headings. The headings in this Award Agreement are for the purpose of convenience
only and are not intended to define or limit the construction of the provisions hereof.
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IN WITNESS WHEREOF, AMERICAN INTERNATIONAL GROUP, INC. has caused this Award Agreement to be
duly executed and delivered as of the Date of Grant.
| AMERICAN INTERNATIONAL GROUP, INC. | ||||||
| By: | ||||||
| By: | ||||||
Recipient: |
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Number of RSUs: |
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Date of Grant: |
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Scheduled Vesting Date: |
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Receipt |
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Acknowledged: |
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Address: |
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Glossary of Terms
Solely for purposes of this award of RSUs, the following terms shall have the meanings set forth
below. Capitalized terms not defined in this Glossary of Terms shall have the meanings as used or
defined in the Award Agreement.
“AIG” means American International Group, Inc. (or a successor entity thereof) and its
consolidated subsidiaries.
“Cause” means (i) your 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) your engaging in any
conduct which constitutes an employment disqualification under applicable law (including statutory
disqualification as defined under the Securities Exchange Act of 1934); (iii) your failure to
perform your duties to AIG; (iv) your 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 AIG or any of its subsidiaries or affiliates is a
member; (v) your violation of any AIG policy concerning hedging or confidential or proprietary
information, or your material violation of any other AIG policy as in effect from time to time;
(vi) your engaging in any act or making any statement which impairs, impugns, denigrates,
disparages or negatively reflects upon the name, reputation or business interests of AIG; or (vii)
your engaging in any conduct detrimental to AIG. The determination as to whether “Cause” has
occurred shall be made by the Committee in its sole discretion. The Committee 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.”
“Client” means any client or prospective client of AIG to whom you provided services, or for
whom you transacted business, or whose identity became known to you in connection with your
relationship with or Employment by AIG.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor
thereto, and the applicable rulings and regulations thereunder.
“Common Stock” means the common stock of AIG, par value $2.50 per share, and any other
securities or property issued in exchange therefor or in lieu thereof.
“Competitive Enterprise” means a business enterprise that (i) engages in any activity, or (ii)
owns or controls a significant interest in any entity that engages in any activity, that, in either
case, competes anywhere with any activity in which AIG is engaged. The activities covered by the
previous sentence include, without limitation, all insurance and re-insurance and insurance and
re-insurance-related activities and financial services in the United States and abroad.
“Consent” means, with respect to issuance of cash or any other action pursuant to this Award
Agreement, (a) any and all listings, registrations or qualifications in respect thereof upon any
securities exchange or under any federal,
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state, or local law, or law, rule or regulation of a jurisdiction outside the United States,
(b) any other matter that the Committee may deem necessary or desirable to comply with the terms of
any such listing, registration or qualification or to obtain an exemption from the requirement that
any such listing, qualification or registration be made, (c) any and all other consents, clearances
and approvals in respect of the action by any governmental or other regulatory body or any stock
exchange or self-regulatory agency and (d) any and all consents or other documentation required by
the Committee.
“Disability” means 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 you
qualify for income replacement benefits under AIG’s long-term disability plan for at least three
months, or, if you do not participate in such a plan, a period of disability during which you are
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.
“Employment” means your performance of services for AIG, as an employee of AIG, as determined
by the Committee.
“Fair Market Value” means, with respect to a share of Common Stock on any day, the closing
price of a share of Common Stock on the New York Stock Exchange on that day (or, if the New York
Stock Exchange is closed on that day, on the next following day on which the Common Stock is traded
on that Exchange). If the Common Stock ceases to be listed or traded in the regular way on the New
York Stock Exchange, the Fair Market Value of Common Stock shall be determined by a methodology
approved by the Committee.
“Section 409A” means Section 409A of the Code, including any amendments or successor
provisions to that section, and any regulations and other administrative guidance thereunder, in
each case as they may be from time to time amended or interpreted through further administrative
guidance.
“Solicit” means any direct or indirect communication of any kind whatsoever, regardless of by
whom initiated, inviting, advising, encouraging or requesting any person or entity, in any manner,
to take or refrain from taking any action.
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