8-KLeadership ChangesExhibits & Filings

AMERICAN INTERNATIONAL GROUP, INC. 8-K Report, Executive Changes (Mar 17, 2008)

Filed March 17, 2008For Securities:AIG

Summary

This Form 8-K filing by American International Group, Inc. (AIG) on March 17, 2008, primarily details changes related to executive compensation and severance. The company extended the employment agreements for its President and CEO, Martin J. Sullivan, and its Executive Vice President and CFO, Steven J. Bensinger, by one year. While these extensions do not significantly alter the core terms of their existing agreements, they introduce provisions for potential continued vesting of certain long-term incentive awards under specific termination circumstances. Furthermore, AIG established a new Executive Severance Plan (ESP) that replaces its existing plan. This ESP offers severance benefits ranging from six to twenty-four months for approximately 700 employees, along with continued vesting of certain long-term incentives and other benefits during the severance period. Concurrently, AIG amended certain outstanding long-term incentive awards to shorten their vesting periods, though no awards will vest before 2009. These changes primarily affect restricted stock units and senior partner units granted under various AIG plans, with the shortened vesting periods also expected to apply to future grants.

Key Highlights

  • 1AIG extended the employment agreements of CEO Martin J. Sullivan and CFO Steven J. Bensinger by one year, with both expiring on March 13, 2009.
  • 2The extensions may allow for continued vesting of certain long-term incentive awards for Sullivan and Bensinger under specific termination scenarios.
  • 3A new Executive Severance Plan (ESP) was implemented, effective March 11, 2008, replacing the previous plan.
  • 4The ESP provides severance benefits of 6 to 24 months for approximately 700 AIG employees.
  • 5The ESP includes provisions for continued vesting of certain long-term incentive awards and other benefits during the severance period.
  • 6AIG amended certain outstanding long-term incentive awards to shorten vesting periods, with no affected awards vesting before 2009.
  • 7Shortened vesting periods will also apply to future long-term incentive awards.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report on the extension of employment agreements for key executives, the implementation of a new Executive Severance Plan, and amendments to shorten the vesting periods of certain long-term incentive awards.

The letter agreements extend their employment by one year and do not materially change the terms of their existing agreements. However, they introduce potential eligibility for continued vesting of certain long-term incentive awards under specific termination circumstances.

The new ESP covers approximately 700 AIG employees and provides severance benefits, continued vesting of certain long-term incentives, and other benefits during the severance period.

The amendments to shorten vesting periods affect certain outstanding awards and are expected to apply to future grants. However, none of the affected outstanding awards will vest before 2009.