8-KMaterial AgreementsOther EventsExhibits & Filings

AMERICAN INTERNATIONAL GROUP, INC. 8-K Report, Material Agreement (Dec 6, 2005)

Filed December 6, 2005For Securities:AIG

Summary

This Form 8-K filing by American International Group, Inc. (AIG) on December 6, 2005, primarily details the adoption of the AIG Senior Partners Plan (Senior Partners Plan) by the Compensation Committee of the Board of Directors. This plan is designed to compensate key employees through deferred cash payments tied to performance, replacing certain investment opportunities previously offered through ownership in C.V. Starr & Co., Inc. (Starr). The Senior Partners Plan operates on overlapping three-year performance periods, with the first commencing January 1, 2004, and ending December 31, 2006. Awards are based on a percentage of the growth in Adjusted Book Value, with payouts structured over several years post-performance period, contingent on continued employment, though accelerated vesting is available for specific events like death, disability, or retirement. Additionally, quarterly cash payments related to AIG's common stock dividends are included, aiming to retain critical talent.

Key Highlights

  • 1AIG adopted the "AIG Senior Partners Plan" effective November 30, 2005, to provide deferred cash compensation to key employees.
  • 2The plan replaces investment opportunities previously offered through ownership in C.V. Starr & Co., Inc. (Starr).
  • 3Awards under the Senior Partners Plan are tied to a percentage of the growth in Adjusted Book Value over three-year overlapping performance periods.
  • 4A total of up to 30,000 senior partner units can be outstanding per performance period.
  • 5Payouts are in cash, in one-third installments, after the fourth, eighth, and twelfth anniversaries of the last year of the performance period, subject to vesting requirements.
  • 6Special provisions exist for accelerated vesting and payment in cases of participant death, permanent disability, or retirement after age 65.
  • 7The plan also includes quarterly cash payments based on AIG's common stock dividends.

Frequently Asked Questions

The AIG Senior Partners Plan is designed to provide a form of deferred cash compensation to key employees, serving as a retention tool. It aims to replace the investment and retention benefits previously associated with senior executives' ownership stakes in C.V. Starr & Co., Inc.

Awards are granted as senior partner units, and their value is based on a percentage of the growth in Adjusted Book Value during a three-year performance period. The final cash payout is determined by a weighted average of allocated amounts and is paid in equal one-third installments after the fourth, eighth, and twelfth anniversaries of the performance period's end, contingent on continued employment.

Yes, the plan includes provisions for accelerated vesting and payment if a participant dies, becomes permanently disabled, or retires after reaching age 65.

The deferred cash payments are subject to vesting requirements and require the participant's continued employment with AIG. This structure incentivizes long-term commitment. The plan also offers accelerated vesting and payment for specific events like retirement, death, or disability, addressing potential departures under certain conditions.