AMERICAN INTERNATIONAL GROUP INC.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO.
)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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[X] |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to
Section 240.14a-11(c) or Section 240.14a-2. |
American International Group, Inc.
(Name of Registrant as Specified In Its
Charter)
(Name of Person(s) Filing Proxy Statement, if
other than Registrant)
Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12. |
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(1) |
Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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(3) |
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): |
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing. |
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(1) |
Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
American International
Group, Inc.
70 Pine Street, New York, N.Y. 10270
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 11, 2005
June 27, 2005
To the Shareholders of
AMERICAN INTERNATIONAL GROUP, INC.:
The Annual Meeting of Shareholders of AMERICAN INTERNATIONAL
GROUP, INC. (AIG) will be held at the offices of AIG
at 72 Wall Street, Eighth Floor, New York, New York, on
Thursday, August 11, 2005, at 10:00 oclock A.M., for
the following purposes:
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To elect 15 directors of AIG to hold office until the next
annual election and until their successors are duly elected and
qualified; |
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To act upon a proposal to ratify the selection of
PricewaterhouseCoopers LLP as AIGs independent registered
public accounting firm for 2005; and |
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To transact any other business that may properly come
before the meeting. |
Shareholders of record at the close of business on June 24, 2005
will be entitled to vote at the meeting. During the ten days
prior to the meeting, a list of the shareholders will be
available for inspection at the offices of AIG at 70 Pine
Street, New York, New York.
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By |
Order of the Board of Directors |
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KATHLEEN E. SHANNON |
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Secretary |
If
you plan on attending the meeting, please remember to bring
photo identification with you. If you cannot be present at the
meeting, please sign the enclosed proxy card and return it at
once in the accompanying postage prepaid envelope or vote your
shares by telephone or over the Internet.
American International
Group, Inc.
70 Pine Street, New York, N.Y. 10270
PROXY STATEMENT
June 27, 2005
The enclosed proxy is solicited on behalf of the Board of
Directors for use at the Annual Meeting of Shareholders of
American International Group, Inc., a Delaware corporation
(AIG), to be held on August 11, 2005, or at any
adjournment thereof. It may be revoked at any time prior to its
use. Proxies will be voted as specified and, unless otherwise
specified, will be voted for the election of directors, for the
ratification of the selection of PricewaterhouseCoopers LLP as
AIGs independent registered public accounting firm for
2005, and otherwise in accordance with the judgment of the
persons voting the proxy on any other matter properly brought
before the Annual Meeting. These proxy materials are being
mailed to shareholders of AIG commencing on or about
June 27, 2005.
Only shareholders of record at the close of business on June 24,
2005 will be entitled to vote at the Annual Meeting. On that
date, 2,595,066,648 shares (exclusive of shares held by AIG
and certain subsidiaries) of common stock, par value
$2.50 per share (AIG Common Stock), were
outstanding, each such share of AIG Common Stock having one vote.
Proxies marked as abstaining, and any proxies returned by
brokers as non-votes on behalf of shares held in
street name because beneficial owners discretion has been
withheld as to one or more matters on the agenda for the Annual
Meeting, will be treated as present for purposes of determining
a quorum for the Annual Meeting. With respect to the election of
directors, any shares not voted as a result of an abstention or
a broker non-vote will have no impact on the vote. With respect
to the ratification of the selection of PricewaterhouseCoopers
LLP as AIGs independent registered public accounting firm,
a broker non-vote will have no impact on the vote while an
abstention will effectively be treated as a vote against the
proposal.
1
ELECTION OF DIRECTORS
Fifteen directors are to be elected at the meeting to hold
office until the next annual election and until their successors
are duly elected and qualified. It is the intention of the
persons named in the accompanying form of proxy to vote for the
election of the nominees listed below, all of whom are currently
members of your Board of Directors. Frank J. Hoenemeyer is not
standing for re-election, and Messrs. M.R. Greenberg and
Howard I. Smith resigned from the Board of Directors in June
2005. It is not expected that any of the nominees will become
unavailable for election as a director, but if any should prior
to the meeting, proxies will be voted for such persons as the
persons named in the accompanying form of proxy may determine in
their discretion. Directors will be elected by a plurality of
the votes cast. The nominees and certain information supplied by
them to AIG are as follows:
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M. BERNARD AIDINOFF
Director since 1984
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Retired Partner,
Sullivan & Cromwell LLP
(Attorneys)
Age 76
Director, First SunAmerica Life Insurance
Company, a
wholly-owned subsidiary of AIG
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PEI-YUAN CHIA
Director since 1996
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Retired Vice Chairman,
Citicorp
and Citibank, N.A.
Age 66
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MARSHALL A. COHEN
Director since 1992
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Counsel, Cassels
Brock & Blackwell
(Barristers and
Solicitors); Former
President and Chief Executive Officer, The Molson Companies
Limited
Age 70
Director, Barrick Gold Corporation
Collins & Aikman
Corporation
Lafarge North America Inc.
Metaldyne Corporation
Premcor Inc.
The Toronto-Dominion Bank
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WILLIAM S. COHEN
Director since 2004
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Chairman and Chief Executive
Officer, The Cohen Group; Former United States Secretary of
Defense; Former United States Senator
(The Cohen Group
provides business consulting services and advice in
international markets)
Age 64
Director, Viacom Inc.
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MARTIN S. FELDSTEIN
Director since 1987
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Professor of Economics, Harvard
University; President and Chief Executive Officer, National
Bureau of Economic Research
(a nonprofit economic
research center)
Age 65
Director, Eli Lilly and Company HCA Inc.
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ELLEN V. FUTTER
Director since 1999
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President, American Museum of
Natural History
Age 55
Director, Bristol-Myers Squibb Company
Consolidated Edison,
Inc. (also serves
as
Trustee of Consolidated Edison
Company of
New York, Inc.)
J.P. Morgan Chase & Co.
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STEPHEN L. HAMMERMAN
Elected March 7,
2005
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Retired; Former Deputy
Commissioner of Legal Matters, New York City Police Department;
Former Vice Chairman, Merrill Lynch & Co.
Age 67
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CARLA A. HILLS
Director since 1993
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Chairman and Chief Executive
Officer,
Hills & Company; Former United States
Trade Representative
(Hills &
Company provides international investment, trade and risk
advisory services)
Age 71
Director,
Time Warner Inc.
Chevron Corporation
Lucent Technologies Inc.
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RICHARD C. HOLBROOKE
Director since 2001
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Vice Chairman, Perseus LLC;
Former United States Ambassador to the United Nations; Former
Vice Chairman, Credit Suisse First Boston
(Perseus LLC is a
merchant bank and private equity fund management company)
Age 64
Director, Human Genome Sciences, Inc.
Quebecor World Inc.
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DONALD P. KANAK
Director since 2004
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Executive Vice Chairman and
Chief Operating Officer, AIG
Age 52
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GEORGE L. MILES, JR.
Elected April 21,
2005
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President and Chief Executive
Officer, WQED Multimedia; Former Executive Vice President
and Chief Operating Officer, WNET/Thirteen in New York
Age 63
Director, WESCO International, Inc.
Equitable Resources, Inc.
Harley-Davidson, Inc.
Westwood One, Inc.
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MORRIS W. OFFIT
Elected April 21,
2005
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Co-Chief Executive Officer,
Offit Hall Capital Management LLC
(a wealth management
advisory firm);
Founder and Former CEO, OFFITBANK
(a private bank)
Age 68
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MARTIN J. SULLIVAN
Director since 2002
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President and Chief Executive
Officer, AIG
Age 50
Director, International Lease Finance
Corporation and
Transatlantic Holdings, Inc.,
(Transatlantic),
subsidiaries of AIG
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EDMUND S.W. TSE
Director since 1996
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Senior Vice ChairmanLife
Insurance, AIG
Age 67
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FRANK G. ZARB
Elected Interim
Chairman, April 21, 2005
Director since 2001
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Chairman, Frank Zarb Associates,
LLC; Senior Advisor, Hellman & Friedman LLC; Former
Chairman and Chief Executive Officer, National Association of
Securities Dealers, Inc. and The Nasdaq Stock Market, Inc.
(Frank Zarb
Associates, LLC is a consulting firm, and Hellman &
Friedman is a private equity investment firm)
Age 70
Director, FPL Group, Inc.
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The principal occupation or affiliation of the nominees is shown
in bold face type. Each of the directors who is also an
executive officer of AIG has, for more than five years, occupied
an executive position with AIG or companies that are now its
subsidiaries, and, except as hereinafter noted, each other
director has occupied an executive position with his company or
organization listed above for at least five years.
Mr. William Cohen served as United States Secretary of
Defense from 1997 to January 2001. Mr. Hammerman served as
Deputy Commissioner of Legal Matters for the New York City
Police Department from 2002 through 2004. He was employed by
Merrill Lynch & Co. from 1978 to 2002, with his final
position being Vice Chairman. Mr. Holbrooke served as
United States Ambassador to the United Nations from 1999 to
2001. Mr. Zarb served as Chairman and Chief Executive
Officer of the National Association of Securities Dealers, Inc.
from February 1997 until October 2000 and The Nasdaq Stock
Market, Inc. from February 1997 until January 2001 and as
Chairman of those organizations until September 2001.
Corporate Governance, Board of Directors and Committees
AIGs Board has established the AIG Corporate Governance
Guidelines (the Guidelines), which are included as
Appendix A to this Proxy Statement, to promote the
effective functioning of the Board and its committees, to
promote the interests of shareholders and to establish a common
set of expectations for the governance of the organization. All
of AIGs corporate governance materials, including the
Guidelines and Committee charters, as well as AIGs Code of
Conduct for employees, are published in the Corporate Governance
section of AIGs corporate website at
www.aigcorporate.com. AIGs Board regularly reviews
5
corporate governance developments and modifies its guidelines,
charters and practices as warranted. AIGs By-laws and the
Guidelines were last amended in June 2005, to reflect the
current policy of the Board that the position of Chairman should
be separate from the position of Chief Executive Officer and
should be selected from the independent directors. In accordance
with the Guidelines, Mr. Zarb has been named Interim
Chairman of the Board. Mr. Zarb has expressed his intention to
serve as Interim Chairman only for a limited period and has
requested that the Nominating and Governance Committee address
the issue of a successor for the Chairman position prior to the
end of 2005. The Guidelines were also amended to reflect that at
least two-thirds of the directors shall be independent under the
New York Stock Exchange (NYSE) listing standards.
These modifications have been and any further modifications will
be reflected in the Corporate Governance section of
www.aigcorporate.com.
In addition, AIG has adopted a Director, Executive Officer and
Senior Financial Officer Code of Business Conduct and Ethics and
a Code of Conduct for employees, which are available free of
charge or through the Investor Information section of
www.aigcorporate.com. Any amendment to AIGs
Director, Executive Officer and Senior Financial Officer Code of
Business Conduct and Ethics and any waiver applicable to
AIGs directors, executive officers or senior financial
officers will be posted on AIGs website within the time
period required by the Securities and Exchange Commission
(SEC) and the NYSE.
Using the Director Independence Standards, which are included as
Appendix B to this Proxy Statement and which were last
amended in March 2005 to conform to changes in NYSE rules, the
Board, upon the recommendation of the Nominating and Corporate
Governance Committee, determined that Mrs. Hills and
Messrs. Aidinoff, Chia, Marshall Cohen, William Cohen,
Feldstein, Hammerman, Holbrooke, Miles, Offit and Zarb are
independent under the current NYSE listing standards.
In making their independence determinations, the Nominating and
Corporate Governance Committee and the Board reviewed the
charitable contributions made by The Starr Foundation to the
organizations with which the directors are affiliated. The Starr
Foundation was established and principally funded by
C.V. Starr and his estate.
The Starr Foundation made contributions of $1,325,000 to the
National Bureau of Economic Research (the Bureau) to
establish the C.V. Starr Research Fund for International
Economics (the Research Fund) in 2002.
Mr. Feldstein is president and chief executive officer of
the Bureau. These donations were made solely to establish the
Research Fund, and Mr. Feldstein has advised the Nominating
and Corporate Governance Committee that there is no present
intention to seek additional funding for the Bureau from The
Starr Foundation. The Board, upon the recommendation of the
Nominating and Corporate Governance Committee, has determined
that these contributions do not impair Mr. Feldsteins
independence for purposes of the NYSE listing standards.
There were five regularly scheduled meetings of the Board during
2004 and seven meetings to date in 2005. All of the directors
attended at least 75 percent of the aggregate of all
meetings of the Board and of the committees of the Board on
which they served. The non-management directors meet in
executive session, without any management directors present,
either before or after each regularly scheduled Board meeting.
Mr. Zarb presides at these executive sessions.
AIG has adopted policies on reporting of concerns regarding
accounting and other matters and on communicating with
non-management directors, which are available in the Corporate
Governance section of www.aigcorporate.com.
Audit Committee
The Audit Committee, which held 16 meetings during 2004 and 14
meetings to date in 2005, assists the Boards oversight of
AIGs financial statements and compliance with legal and
regulatory requirements, the qualifications and performance of
AIGs independent registered public accounting firm and the
performance of AIGs internal audit function. The Audit
Committee is directly responsible for the appointment,
compensation, retention and oversight of the work of AIGs
independent registered public accounting firm. Mr. Frank J.
Hoenemeyer chaired the Audit Committee, which included
Messrs. Aidinoff, Chia and Zarb and Mrs. Hills,
6
during 2004. Messrs. Miles and Offit joined the Audit
Committee on May 18, 2005. The Board has determined, upon
the recommendation of the Nominating and Corporate Governance
Committee, that all members of the Audit Committee are
independent under both NYSE listing standards and SEC rules. The
Board has also determined that each member of the Audit
Committee is financially literate within the meaning of the NYSE
listing standards and that Mr. Hoenemeyer is an audit
committee financial expert for purposes of the SEC rules and has
accounting or related financial management expertise for
purposes of the NYSE listing standards. Although designated as
an audit committee financial expert, Mr. Hoenemeyer is not
an accountant for AIG and, under the SEC rules, is not an
expert for purposes of the liability provisions of
the Securities Act of 1933, as amended (the Securities
Act), or for any other purpose. Mr. Hoenemeyer does
not have any responsibilities or obligations in addition to
those of the other audit committee members; all audit committee
members have the identical duties and responsibilities. The
Nominating and Corporate Governance Committee has recommended
that Mr. Offit be named Chairman of the Audit Committee upon
Mr. Hoenemeyers retirement from the Board at the
Annual Meeting.
Nominating and Corporate Governance Committee
Mr. Aidinoff chairs the Nominating and Corporate Governance
Committee, which held five meetings in 2004 and six meetings to
date in 2005 and which also included Messrs. Marshall Cohen
and Zarb and Mrs. Hills, all of whom the Board has
determined, upon the recommendation of the Nominating and
Corporate Governance Committee, are independent under NYSE
listing standards. The primary purposes of the Nominating and
Corporate Governance Committee are to recommend individuals to
the Board of Directors for nomination, election or appointment
as members of the Board and its committees and to review on an
ongoing basis the corporate governance principles and practices
that should apply to AIG. In early 2005, the Nominating and
Corporate Governance Committee nominated Mr. Hammerman to
serve as a director, and the Board accepted the recommendation
and elected him a director on March 7, 2005.
Mr. Hammerman was initially identified by
Mr. Greenberg as a potential nominee for director. Also in
2005, the Nominating and Corporate Governance Committee
nominated Messrs. Miles and Offit to serve as directors,
and the Board accepted the recommendation and elected them
directors on April 21, 2005. Messrs. Miles and Offit
were initially identified as potential nominees by
Mr. Richard Beattie of Simpson Thacher & Bartlett LLP,
counsel to the independent directors, and Mr. Zarb,
respectively.
The Nominating and Corporate Governance Committee will consider
nominees recommended by the shareholders. The Guidelines include
a listing of the characteristics that the Nominating and
Corporate Governance Committee considers important for nominees
for director. The Nominating and Corporate Governance Committee
will evaluate shareholder nominees on the same basis as all
other nominees. Shareholders who wish to submit nominees for
director for consideration by the Nominating and Corporate
Governance Committee for election at the 2006 Annual Meeting of
Shareholders may do so by submitting in writing such
nominees names, in compliance with the procedures
described under Shareholder Proposals For 2006 Annual
Meeting in this Proxy Statement.
Compensation Committee
The Compensation Committee, which held six meetings during 2004
and seven meetings to date in 2005, oversees the administration
of AIGs compensation programs, establishes the
compensation of the Chief Executive Officer and makes
recommendations with respect to compensation programs applicable
to senior executives and other employee compensation.
Messrs. Marshall Cohen, William Cohen, Hoenemeyer and
Holbrooke are the current members of the Compensation Committee,
with Mr. Marshall Cohen serving as the Chairman. The Board
has determined, upon the recommendation of the Nominating and
Corporate Governance Committee, that all members of the
Compensation Committee are independent under the NYSE listing
standards.
Other Committees
The principal function of the Executive Committee, which acted
only by unanimous written consent in 2004 and 2005, is to act
for the Board between Board meetings. In 2004,
Messrs. Aidinoff, Greenberg, Hoenemeyer, Smith and Zarb and
Mrs. Hills comprised the Executive Committee, with
Mr. Zarb serving as the Chairman. On
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April 21, 2005, the Board of Directors reconstituted the
Executive Committee which now consists of Messrs. Sullivan,
Kanak, Hoenemeyer, Aidinoff, Marshall Cohen and Zarb, and is
chaired by Mr. Sullivan.
The Finance Committee, which oversees the financial affairs and
investment activities of AIG and its subsidiaries, held 12
meetings during 2004 and four meetings to date in 2005.
Ms. Futter and Messrs. Aidinoff (until May 2004),
Chia, Feldstein, Greenberg (until March 2005), Hoenemeyer,
Holbrooke, Smith (until March 2005), and Zarb served as members
of the Finance Committee during 2004 and to date in 2005. The
Finance Committee was chaired by Mr. Greenberg until March
2005 and is now chaired by Mr. Sullivan.
On April 21, 2005, the Board established two new
committees: the Regulatory, Compliance and Legal Committee and
the Public Policy and Social Responsibility Committee. Current
members of the Regulatory, Compliance and Legal Committee are
Messrs. Hammerman, who serves as chairman, Aidinoff and Marshall
Cohen and Ms. Futter. The Public Policy and Social
Responsibility Committee is chaired by Mr. Holbrooke and
includes Messrs. William Cohen, Feldstein and Miles.
Mr. Zarb, in his capacity as Interim Chairman, serves as an
ex officio member of all standing committees of the Board.
Ownership of Certain Securities
The only persons who, to the knowledge of AIG, own in excess of
five percent of the Common Stock of AIG are FMR Corp., 82
Devonshire Street, Boston, Massachusetts 02109, which filed a
Schedule 13G on February 14, 2005, with respect to the
161,203,013 shares of AIG Common Stock held by it, and
Starr International Company, Inc. (SICO). According
to the Schedule 13G filed by FMR Corp., it is the parent
company of various entities (collectively, Fidelity)
that provide investment advisory and management services to the
Fidelity Group of mutual funds. The FMR Corp. Schedule 13G
states that Fidelity is the beneficial owner of an aggregate of
5.672 percent of the outstanding AIG Common Stock,
147,737,387 shares, as a result of providing these services
to the funds, and that Fidelity International Limited, which
operates as an entity separate from FMR Corp. and Fidelity, is
the beneficial owner of 6,949,031 shares of AIG Common
Stock. At March 31, 2005, SICO (which has executive offices
at Clifton House, Lower Fitzwilliam Street, Dublin 2,
Ireland) held 310,905,397 shares, or 11.98 percent, of
the outstanding AIG Common Stock. The Starr Foundation and
C.V. Starr & Co., Inc. (Starr) (both
having executive offices at 345 Park Avenue, New York, New York)
held 50,529,531 shares and 47,337,246 shares
(including 18,644,278 shares held by the C.V.
Starr & Co., Inc. Trust), or 1.95 percent and
1.82 percent, respectively, of the outstanding AIG Common
Stock on that date.
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The following table summarizes the ownership of equity
securities of AIG, Starr, and SICO by the directors, by the
current and former executive officers named in the Summary
Compensation Table (as set forth under the heading
Compensation of Directors and Executive Officers),
and by the directors and current executive officers as a group.
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Equity Securities of AIG, Starr and SICO | |
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Owned Beneficially as of March 31, 2005(1)(2) | |
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AIG | |
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Starr | |
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SICO | |
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Common Stock | |
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Common Stock | |
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Voting Stock | |
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Amount and | |
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Amount and | |
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Amount and | |
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Nature of | |
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Percent | |
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Nature of | |
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Percent | |
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Nature of | |
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Percent | |
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Beneficial | |
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of | |
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Beneficial | |
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of | |
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Beneficial | |
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of | |
Director or Executive Officer |
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Ownership(3)(4)(5)(6) | |
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Class | |
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Ownership(7) | |
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Class | |
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Ownership | |
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Class | |
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M. Bernard Aidinoff
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85,808 |
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(8 |
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0 |
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0 |
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Pei-yuan Chia
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58,624 |
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(8 |
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0 |
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0 |
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Marshall A. Cohen
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75,595 |
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(8 |
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0 |
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0 |
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William S. Cohen
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2,500 |
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(8 |
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0 |
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0 |
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Martin S. Feldstein
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73,829 |
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(8 |
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0 |
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0 |
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Ellen V. Futter
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58,742 |
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(8 |
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0 |
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0 |
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M.R. Greenberg
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46,467,855 |
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1.79 |
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4,000 |
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17.11 |
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10 |
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8.33 |
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Stephen L. Hammerman
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0 |
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0 |
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0 |
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Carla A. Hills
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80,548 |
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(8 |
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0 |
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0 |
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Frank J. Hoenemeyer
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72,363 |
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(8 |
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0 |
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|
|
|
|
|
|
0 |
|
|
|
|
|
Richard C. Holbrooke
|
|
|
15,800 |
|
|
|
(8 |
) |
|
|
0 |
|
|
|
|
|
|
|
0 |
|
|
|
|
|
Donald P. Kanak
|
|
|
98,669 |
|
|
|
(8 |
) |
|
|
1,000 |
|
|
|
4.28 |
|
|
|
0 |
|
|
|
|
|
Rodney O. Martin, Jr.
|
|
|
786,059 |
|
|
|
.03 |
|
|
|
250 |
|
|
|
1.07 |
|
|
|
0 |
|
|
|
|
|
Kristian P. Moor
|
|
|
87,119 |
|
|
|
(8 |
) |
|
|
1,000 |
|
|
|
4.28 |
|
|
|
0 |
|
|
|
|
|
Win J. Neuger
|
|
|
208,947 |
|
|
|
(8 |
) |
|
|
875 |
|
|
|
3.74 |
|
|
|
0 |
|
|
|
|
|
Richard W. Scott
|
|
|
437,153 |
|
|
|
.02 |
|
|
|
250 |
|
|
|
1.07 |
|
|
|
0 |
|
|
|
|
|
Howard I. Smith
|
|
|
509,564 |
|
|
|
.02 |
|
|
|
2,000 |
|
|
|
8.56 |
|
|
|
10 |
|
|
|
8.33 |
|
Martin J. Sullivan
|
|
|
129,791 |
|
|
|
(8 |
) |
|
|
1,250 |
|
|
|
5.35 |
|
|
|
0 |
|
|
|
|
|
Thomas R. Tizzio
|
|
|
943,185 |
|
|
|
.04 |
|
|
|
1,250 |
|
|
|
5.35 |
|
|
|
10 |
|
|
|
8.33 |
|
Edmund S.W. Tse
|
|
|
1,337,017 |
|
|
|
.05 |
|
|
|
1,750 |
|
|
|
7.49 |
|
|
|
10 |
|
|
|
8.33 |
|
Jay S. Wintrob
|
|
|
2,087,515 |
|
|
|
.08 |
|
|
|
750 |
|
|
|
3.21 |
|
|
|
0 |
|
|
|
|
|
Frank G. Zarb
|
|
|
16,900 |
|
|
|
(8 |
) |
|
|
0 |
|
|
|
|
|
|
|
0 |
|
|
|
|
|
All Directors and Executive
Officers of AIG as a Group (39 individuals)
|
|
|
55,415,449 |
|
|
|
2.13 |
|
|
|
18,875 |
|
|
|
74.87 |
|
|
|
40 |
|
|
|
33.32 |
|
|
|
(1) |
Additional information with respect to the Starr common and
preferred stock can be found under the heading Investments
in Starr. M.R. Greenberg retired as Executive Chairman and
Chief Executive Officer on March 14, 2005, notified the
Board of his resignation as Non-Executive Chairman on
March 28, 2005 and resigned from the Board on June 8,
2005. Howard I. Smith was terminated as Vice Chairman and Chief
Financial Officer on March 14, 2005 and resigned from the
Board on June 3, 2005. George L. Miles, Jr. and
Morris W. Offit were elected to the Board of Directors
subsequent to March 31, 2005. Neither of Messrs. Miles
or Offit beneficially own any equity securities of AIG, Starr or
SICO. |
|
(2) |
Amounts of equity securities of Starr and SICO shown represent
shares as to which the individual has sole voting and investment
power. With respect to shares of AIG Common Stock, totals
include shares as to which the individual shares voting and
investment power as follows: Feldstein 23,727 shares
with his wife, Greenberg 41,399,802 shares with his
wife and 103,082 shares with co-trustees, Tse
3,555 shares with his wife, and all directors and executive
officers of AIG as a group 42,061,880 shares. |
|
(3) |
Amount of equity securities shown includes shares of AIG Common
Stock subject to options which may be exercised within
60 days as follows: Aidinoff 36,593 shares,
Chia 36,593 shares, M. Cohen |
(footnotes continued on next page)
9
(footnotes continued from previous page)
|
|
|
36,593 shares, W. Cohen 2,500 shares,
Feldstein 15,500 shares, Futter
36,593 shares, Greenberg 3,120,311 shares,
Hills 36,593 shares, Hoenemeyer
15,500 shares, Holbrooke 12,500 shares, Kanak
74,953 shares, Martin 723,672, Moor 83,974,
Neuger 112,811, Scott 399,983 shares,
Smith 290,155 shares, Sullivan
90,750 shares, Tizzio 333,281, Tse
393,593 shares, Wintrob 741,870 shares,
Zarb 12,500 shares, and all directors and executive
officers of AIG as a group 8,390,107 shares. Amount
of equity securities shown excludes 500 shares granted to
each non-employee director during 2004 with delivery deferred
until retirement from the Board. |
|
(4) |
Amount of shares shown for each of Mr. Greenberg and
Mr. Smith does not include 18,644,278 shares held as
trustee for the C.V. Starr & Co., Inc. Trust, as to
which each of them disclaims beneficial ownership. Inclusion of
these shares would increase the percentage ownership of AIG
Common Stock shown above for each of them by .72 percent. |
|
(5) |
Amount of equity securities shown also excludes the following
securities owned by members of the named individuals
immediate family as to which securities such individual has
disclaimed beneficial ownership:
Aidinoff2,364 shares, Chia 403 shares,
Hills 750 shares, Martin 1,125 shares,
Scott 1,700 shares, Sullivan 424 shares,
Tizzio 54,266 shares, Wintrob
4,009 shares, Zarb 4,945 shares, and all
directors and executive officers of AIG as a group
18,779,268 shares. |
|
(6) |
Amount of shares shown for Mr. Greenberg also excludes
4,909,940 shares owned directly by Starr (representing
17.11 percent of the shares owned directly by Starr) as to which
Mr. Greenberg disclaims beneficial ownership. |
|
(7) |
As of January 31, 2005, Starr also had outstanding
6,000 shares of Common Stock Class B, a non-voting
stock, 3,838 shares of Preferred Stock, Series X-1 and
220 shares of Special Preferred Stock, Series One.
None of the named individuals holds such shares. As of
January 31, 2005, the named individuals beneficially owned
the following aggregate shares of various series of Starr
Preferred Stock (out of an aggregate total outstanding of
393,233 shares): Greenberg (118,000); Kanak (4,375); Martin
(750); Moor (5,250); Neuger (4,375); Scott (250); Smith
(20,250); Sullivan (5,750); Tizzio (28,375); Tse (20,500); and
Wintrob (3,750). These named individuals received dividends of
Starr Series W Preferred Stock in 2004 out of a total
issued of 29,500 shares as follows: Greenberg (4,000);
Kanak (750); Martin (250); Moor (875); Neuger (750); Scott
(250); Smith (1,750); Sullivan (1,000); Tizzio (1,500); Tse
(1,750) and Wintrob (750). Mr. Greenberg also beneficially
owned 100 shares of Starrs 5% Senior Preferred
Stock as of January 31, 2005. Additional information with
respect to the Starr preferred stock can be found under the
heading Investments in Starr. |
|
(8) |
Less than .01 percent. |
At March 31, 2005, Mr. Greenberg and Mr. Tizzio
owned 56,250 shares and 87,068 shares, respectively,
of Transatlantic common stock and the named individuals also
held options which may be exercised within 60 days with
respect to shares of Transatlantic and 21st Century
Insurance Group (21st Century) as follows:
Transatlantic common stock, $1.00 par value per share:
Greenberg 137,500 shares, Smith
29,374 shares and Tizzio 54,686 shares;
21st Century common stock, without par value: Smith
36,000 shares.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires directors, executive officers, and ten percent
holders of AIG Common Stock to file reports concerning their
ownership of AIG equity securities. Based solely on the review
of the Forms 3, 4 and 5 furnished to AIG and certain
representations made to AIG, AIG believes that the only filing
deficiencies under Section 16(a) by its directors,
executive officers, and ten percent holders during 2004 were:
one late report filed by Mr. Steven J. Bensinger, an
executive officer, reporting the purchase of 24 shares on
March 5, 2004; one late report filed by Mr. Axel I.
Freudmann, an executive officer, reporting three sales involving
an aggregate of 15,331 shares on December 2, 2004,
December 21, 2004 and December 22, 2004; three late
reports filed by Mr. Greenberg reflecting
10
the disposition of an aggregate of 49 shares by Starr upon
the exercise of stock options by Starr employees (41 shares
on January 26, 2004 and eight shares on
November 9, 2004) and the disposition of 450 shares by
Starr relating to purchases by Starr employees of shares under
the Starr Employee Stock Purchase Plan. Mr. Sullivan has
filed one late report reflecting the acquisition of
424 shares as a result of his marriage in October 2002.
Compensation of Directors and Executive Officers
Compensation of Directors
Directors who are employees of AIG or its subsidiaries do not
receive fees for service on the Board or the committees of the
Board. Each other director of AIG currently receives
directors fees of $40,000 per year, plus $1,500 for
each Board meeting attended. An annual fee of $5,000 is paid to
each member of each committee of the Board. Members of each
committee also receive $1,500 for each committee meeting
attended. Directors who are not employees of AIG or its
subsidiaries are granted 500 shares of AIG Common Stock
annually, receipt of which is deferred until retirement from the
Board, pursuant to the AIG Director Stock Plan. In addition,
under the AIG Amended and Restated 1999 Stock Option Plan,
non-management directors receive annually an option which vests
after one year and is exercisable for nine years thereafter to
purchase 2,500 shares of AIG Common Stock at an option
price equal to the fair market value of AIG Common Stock on the
date of grant, which is the date of the Annual Meeting of
Shareholders. Receipt of shares upon exercise of these options
may be deferred at the election of the director. Certain
directors who are not employees of AIG also serve as directors
of various subsidiaries of AIG and receive fees for meeting
attendance.
Summary Compensation Table
The following Summary Compensation Table sets forth the
compensation for (i) the persons who during 2004 served as
AIGs chief executive officer or were among AIGs four
other most highly compensated executive officers (based on
annual salary and bonus) and (ii) certain other current or
former executive officers of AIG.
The persons named in the Summary Compensation Table also had
positions with, and received payments from, Starr and SICO
during 2004. These payments are described below under the
heading Payments and Benefits Provided by Starr and
SICO.
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Compensation | |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
Annual Compensation | |
|
Awards | |
|
Payouts | |
|
|
|
|
|
|
| |
|
| |
|
| |
|
|
Name and |
|
|
|
|
|
Other Annual | |
|
|
|
SICO LTIP | |
|
All Other | |
Principal Position |
|
Year | |
|
Salary | |
|
Bonus(1) | |
|
Compensation(2) | |
|
Stock Options | |
|
Payouts(3)(4) | |
|
Compensation(5) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin J. Sullivan(6)
|
|
|
2004 |
|
|
$ |
774,963 |
|
|
$ |
830,000 |
|
|
$ |
28,075 |
|
|
|
50,000 |
|
|
$ |
4,202,880 |
|
|
$ |
14,350 |
|
President and
|
|
|
2003 |
|
|
|
792,347 |
|
|
|
730,000 |
|
|
|
235,062 |
|
|
|
80,000 |
|
|
|
|
|
|
|
14,000 |
|
|
Chief Executive Officer
|
|
|
2002 |
|
|
|
593,500 |
|
|
|
440,000 |
|
|
|
|
|
|
|
40,000 |
|
|
|
1,851,200 |
|
|
|
11,000 |
|
Donald P. Kanak(7)(8)
|
|
|
2004 |
|
|
|
743,000 |
|
|
|
960,000 |
|
|
|
365,474 |
|
|
|
50,000 |
|
|
|
3,152,160 |
|
|
|
14,350 |
|
Executive Vice Chairman
|
|
|
2003 |
|
|
|
718,538 |
|
|
|
860,000 |
|
|
|
1,164,528 |
|
|
|
65,000 |
|
|
|
|
|
|
|
13,999 |
|
|
and Chief Operating
|
|
|
2002 |
|
|
|
554,710 |
|
|
|
553,917 |
|
|
|
1,684,589 |
|
|
|
75,000 |
|
|
|
1,851,200 |
|
|
|
11,000 |
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jay S. Wintrob
|
|
|
2004 |
|
|
|
716,000 |
|
|
|
900,000 |
|
|
|
20,948 |
|
|
|
50,000 |
|
|
|
2,626,800 |
|
|
|
1,510,707 |
|
Executive Vice
|
|
|
2003 |
|
|
|
731,038 |
|
|
|
625,000 |
|
|
|
|
|
|
|
80,000 |
|
|
|
|
|
|
|
1,424,499 |
|
|
PresidentRetirement
|
|
|
2002 |
|
|
|
716,000 |
|
|
|
490,000 |
|
|
|
|
|
|
|
40,000 |
|
|
|
1,851,200 |
|
|
|
6,469,372 |
|
|
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard W. Scott(8)
|
|
|
2004 |
|
|
|
550,000 |
|
|
|
1,139,905 |
|
|
|
32,405 |
|
|
|
15,000 |
|
|
|
709,236 |
|
|
|
13,341 |
|
Senior Vice
|
|
|
2003 |
|
|
|
559,616 |
|
|
|
1,061,250 |
|
|
|
|
|
|
|
30,000 |
|
|
|
|
|
|
|
9,000 |
|
|
PresidentInvestments
|
|
|
2002 |
|
|
|
500,000 |
|
|
|
858,730 |
|
|
|
|
|
|
|
15,000 |
|
|
|
624,780 |
|
|
|
8,375 |
|
(table continued on next page)
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Compensation | |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
Annual Compensation | |
|
Awards | |
|
Payouts | |
|
|
|
|
|
|
| |
|
| |
|
| |
|
|
Name and |
|
|
|
|
|
Other Annual | |
|
|
|
SICO LTIP | |
|
All Other | |
Principal Position |
|
Year | |
|
Salary | |
|
Bonus(1) | |
|
Compensation(2) | |
|
Stock Options | |
|
Payouts(3)(4) | |
|
Compensation(5) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Thomas R. Tizzio
|
|
|
2004 |
|
|
|
654,700 |
|
|
|
630,000 |
|
|
|
27,905 |
|
|
|
25,000 |
|
|
|
5,043,456 |
|
|
|
14,350 |
|
Senior Vice Chairman
|
|
|
2003 |
|
|
|
679,881 |
|
|
|
630,000 |
|
|
|
|
|
|
|
55,000 |
|
|
|
1,996,800 |
|
|
|
14,000 |
|
|
General Insurance
|
|
|
2002 |
|
|
|
654,700 |
|
|
|
655,000 |
|
|
|
|
|
|
|
30,000 |
|
|
|
3,702,400 |
|
|
|
10,500 |
|
Edmund S.W. Tse
|
|
|
2004 |
|
|
|
805,152 |
|
|
|
790,192 |
|
|
|
20,000 |
|
|
|
55,000 |
|
|
|
5,043,456 |
|
|
|
|
|
Senior Vice Chairman
|
|
|
2003 |
|
|
|
815,156 |
|
|
|
746,859 |
|
|
|
|
|
|
|
100,000 |
|
|
|
1,784,880 |
|
|
|
|
|
|
Life Insurance
|
|
|
2002 |
|
|
|
765,154 |
|
|
|
781,859 |
|
|
|
|
|
|
|
50,000 |
|
|
|
3,702,400 |
|
|
|
|
|
Rodney O. Martin, Jr.
|
|
|
2004 |
|
|
|
682,000 |
|
|
|
918,767 |
|
|
|
30,006 |
|
|
|
40,000 |
|
|
|
1,050,720 |
|
|
|
1,586,947 |
|
Executive Vice President
|
|
|
2003 |
|
|
|
695,731 |
|
|
|
1,340,000 |
|
|
|
95,118 |
|
|
|
40,000 |
|
|
|
|
|
|
|
104,118 |
|
|
Life Insurance
|
|
|
2002 |
|
|
|
678,431 |
|
|
|
1,340,000 |
|
|
|
129,256 |
|
|
|
20,000 |
|
|
|
624,780 |
|
|
|
137,631 |
|
Kristian P. Moor
|
|
|
2004 |
|
|
|
628,298 |
|
|
|
635,000 |
|
|
|
14,245 |
|
|
|
40,000 |
|
|
|
3,152,160 |
|
|
|
12,692 |
|
Executive Vice President
|
|
|
2003 |
|
|
|
651,479 |
|
|
|
585,000 |
|
|
|
|
|
|
|
65,000 |
|
|
|
|
|
|
|
12,342 |
|
|
Domestic General Insurance
|
|
|
2002 |
|
|
|
568,273 |
|
|
|
365,000 |
|
|
|
|
|
|
|
30,000 |
|
|
|
1,851,200 |
|
|
|
9,782 |
|
Win J. Neuger
|
|
|
2004 |
|
|
|
902,154 |
|
|
|
560,000 |
|
|
|
|
|
|
|
50,000 |
|
|
|
3,152,160 |
|
|
|
9,225 |
|
Executive Vice President
|
|
|
2003 |
|
|
|
927,384 |
|
|
|
475,000 |
|
|
|
|
|
|
|
65,000 |
|
|
|
|
|
|
|
9,000 |
|
|
and Chief Investment Officer
|
|
|
2002 |
|
|
|
852,923 |
|
|
|
350,000 |
|
|
|
|
|
|
|
25,000 |
|
|
|
1,851,200 |
|
|
|
7,333 |
|
Former
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M.R. Greenberg(9)
|
|
|
2004 |
|
|
|
1,000,000 |
|
|
|
8,000,000 |
|
|
|
292,716 |
|
|
|
375,000 |
|
|
|
10,086,912 |
|
|
|
14,350 |
|
Former Chairman
|
|
|
2003 |
|
|
|
1,000,000 |
|
|
|
6,500,000 |
|
|
|
|
|
|
|
750,000 |
|
|
|
|
|
|
|
14,000 |
|
|
and Chief Executive
|
|
|
2002 |
|
|
|
1,000,000 |
|
|
|
5,000,000 |
|
|
|
|
|
|
|
375,000 |
|
|
|
11,107,200 |
|
|
|
11,000 |
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Howard I. Smith(10)
|
|
|
2004 |
|
|
|
631,154 |
|
|
|
730,000 |
|
|
|
29,700 |
|
|
|
60,000 |
|
|
|
4,202,880 |
|
|
|
14,350 |
|
Former Vice Chairman and
|
|
|
2003 |
|
|
|
654,231 |
|
|
|
680,000 |
|
|
|
|
|
|
|
100,000 |
|
|
|
|
|
|
|
14,000 |
|
|
Chief Financial Officer
|
|
|
2002 |
|
|
|
533,847 |
|
|
|
630,000 |
|
|
|
|
|
|
|
50,000 |
|
|
|
3,702,400 |
|
|
|
11,000 |
|
|
|
|
|
(1) |
Amounts shown for named executive officers other than
Mr. Greenberg represent year-end bonuses and bonuses paid
quarterly pursuant to a quarterly bonus program.
Mr. Greenberg did not participate in the quarterly bonus
program. |
|
|
(2) |
Amounts shown for Mr. Sullivan represent tax equalization
payments of $229,262 in 2003 in connection with the exercise of
certain nonqualified stock options granted while
Mr. Sullivan was resident in the United Kingdom and tax
preparation and consultation services $8,075 (2004),
$5,800 (2003) and $2,400 (2002). Amounts shown for
Mr. Kanak represent the following expatriate benefits paid
to Mr. Kanak due to his service in Japan: cost of living
adjustment $335,423 (2004) and $156,312 in each of 2003
and 2002; tax equalization payments $715,224 (2003) and
$1,239,195 (2002); housing costs $211,107 (2003) and
$209,678 (2002); home leave airfare $16,080 (2003) and
$15,243 (2002); foreign service premium $6,824 in each of
2003 and 2002; local education allowance $21,946 (2003)
and $41,879 (2002); and also represents tax preparation and
consultant services $7,831 (2004), $28,720 (2003) and
$6,015 (2002); automobile allowance $2,743 (2003) and
$3,555 (2002); club dues $5,573 (2003) and $5,888 (2002);
and temporary living expense reimbursement $17,000 (2004).
Amounts shown for Mr. Wintrob include an automobile
allowance of $7,166 in 2004. Amounts shown for Mr. Martin
include an automobile allowance of $14,400 in 2004, premiums
paid by AGC for a group carve out individual life insurance
policy of $4,385 (2003) and $4,120 (2002), the value of
split-dollar life insurance ($78 in 2004, $90,733 in 2003 and
$96,386 in 2002) which represents the present value of the
interest projected to accrue on the current years
insurance premium paid by American General Corporation
(AGC). Amounts shown for Mr. Greenberg and
Mr. Tse include amounts attributable to the incremental
cost of personal usage of automobiles in 2004 of $23,500 and
$20,000, respectively. Amounts in 2004 also include amounts
attributable to the incremental cost of personal usage of
corporate aircraft as follows: Mr. Wintrob $13,782,
Mr. Martin $15,527, Mr. Moor $14,245 |
(footnotes continued on next page)
12
(footnotes continued from previous page)
|
|
|
|
|
and Mr. Greenberg $266,180 and personal usage of car
service as follows: Mr. Sullivan $20,000,
Mr. Kanak $5,200, Mr. Tizzio $27,905 and
Mr. Smith $29,700. Except as indicated above,
perquisites for years prior to 2004 total less than $50,000 per
individual. |
|
|
(3) |
The LTIP payouts for 2004 will be made by SICO pursuant to its
2003-2004 Deferred Compensation Profit Participation Plan. Since
1975, SICO has provided benefits under a series of two-year
Deferred Compensation Profit Participation Plans to senior AIG
employees (SICO Plans). The original SICO Plan came
into being in 1975 when the voting shareholders and Board of
Directors of SICO, whose principal asset consists of AIG Common
Stock, decided that a portion of the capital value of SICO
should be used to provide an incentive plan for the current and
succeeding management of all American International companies,
including AIG. Participation in the SICO Plan by any person, and
the amount of such participation, has been at the sole
discretion of SICOs board of directors. Historically, SICO
has delivered cash or AIG Common Stock under the SICO Plans; AIG
has made no payments. In its restated financial statements AIG
has recorded a charge to reported earnings in the periods
restated for deferred compensation amounts granted to AIG
employees by SICO, with an offsetting entry to additional
paid-in capital, reflecting amounts deemed contributed by SICO.
AIG is currently in the process of resolving and unwinding
various relationships with SICO and Starr and has authorized the
creation of a 2005-2006 Deferred Compensation Profit
Participation Plan. This Plan will be modeled on the SICO Plan
with respect to the 2003-2004 period, except that it will be
administered by AIG and its costs will be borne directly by AIG.
In addition, SICO has confirmed and AIG has, subject to certain
conditions, assured, that all benefits accrued to employees
under the SICO Plans through 2004 will be paid to employees in
accordance with the terms of the SICO Plans. |
|
|
(4) |
Amounts shown do not represent actual payments. Payments do not
begin until the employee retires after reaching age 65.
Amounts shown in 2004 represent the value, based on the closing
sale price of AIG Common Stock on December 31, 2004
($65.67), of shares of AIG Common Stock contingently allocated
with respect to the January 1, 2003 to December 31,
2004 period but not distributed under the 2003-2004 SICO Plan.
Amounts shown in 2002 represent the value, based on the closing
sale price of AIG Common Stock on December 31, 2002
($57.85), of shares of AIG Common Stock contingently allocated
with respect to the January 1, 2001 to December 31,
2002 period but not distributed under the 2001-2002 SICO Plan.
The values shown for the year 2004 represent the number of AIG
shares contingently allocated to the named executive officers as
follows: Sullivan 64,000 shares; Kanak
48,000 shares; Wintrob 40,000 shares;
Scott 10,800 shares; Tizzio 76,800 shares;
Tse 76,800 shares; Martin 16,000 shares;
Moor 48,000 shares; Neuger 48,000 shares;
Greenberg 153,600 shares and Smith
64,000 shares. The values shown for the year 2002 represent
the number of AIG shares contingently allocated to the named
executive officers as follows: Sullivan
32,000 shares; Kanak 32,000 shares;
Wintrob 32,000 shares; Scott
10,800 shares; Tizzio 64,000 shares; Tse
64,000 shares; Martin 10,800 shares; Moor
32,000 shares; Neuger 32,000 shares;
Greenberg 192,000 shares and Smith
64,000 shares. The right to payouts is subject to
forfeiture under certain conditions, including the
participants termination of employment with AIG and its
subsidiaries before normal retirement age other than by death or
disability (unless the SICO board determines to reinstate the
payout right). The SICO Board of Directors currently may permit
the early payout of units under certain circumstances. No
executive named in the Summary Compensation Table other than
Mr. Martin is eligible for early payout with respect to
units awarded to them. Prior to earning the right to payout, the
participant is not entitled to any equity interest with respect
to underlying shares. In addition, SICOs board of
directors currently makes the final decision whether to pay a
participant cash in lieu of shares of AIG Common Stock. |
|
|
(5) |
Amounts shown for each of Sullivan, Kanak, Scott, Moor and
Neuger represent solely matching contributions under the AIG
savings plan (401(k) Plan). Amounts shown for
Mr. Tizzio include matching contributions under the 401(k)
plan of $14,350 in 2004, $14,000 in 2003 and $10,500 in 2002. |
(footnotes continued on next page)
13
(footnotes continued from previous page)
|
|
|
|
|
Amounts shown for Mr. Smith include matching contributions
of $14,350 in 2004, $14,000 in 2003 and $21,000 in 2002. Amounts
shown for Mr. Greenberg include matching contributions of
$14,350 in 2004, $14,000 in 2003 and $11,000 in 2002. Amounts
shown for Mr. Wintrob include matching contributions under
the 401(k) Plan of $14,350 (2004) and $14,000 (2003), $5,000,000
paid in 2002 as a retention bonus paid pursuant to an agreement
entered into in connection with the acquisition of SunAmerica
Inc. and $1,496,357 (2004), $1,410,499 (2003) and $1,469,372
(2002) paid under a SunAmerica Five-Year Deferred Bonus Plan
from awards granted in 2000 and 2001, which pays out in
20 percent installments over five years of continued
employment. Amounts shown for Mr. Martin include matching
contributions under the 401(k) Plan of $9,225 (2004), $9,000
(2003) and $8,375 (2002), matching contributions under the AGC
Thrift Plan of $8,500 (2002) and the AGC Supplementary Thrift
Plan of $20,250 (2002) and $1,577,722 which is the value on
December 31, 2004 of 24,025 shares of AIG Common Stock
representing performance share units awarded under an employment
agreement with Mr. Martin negotiated in connection with
AIGs acquisition of AGC in August 2001. Under the
employment agreement, during the employment period
(August 29, 2001 through August 29, 2004),
Mr. Martin was entitled to receive a base salary of not
less than $650,000, an annual bonus of not less than $1,250,000
and a supplemental bonus of $90,000. The employment agreement
also contained provisions relating to the payment of benefits
upon the termination of Mr. Martins employment during
the employment period. |
|
|
(6) |
Mr. Sullivan was elected President and Chief Executive
Officer as of March 14, 2005. Prior thereto he was Vice
Chairman and Co-Chief Operating Officer. |
|
|
(7) |
Mr. Kanak was elected Executive Vice Chairman and Chief
Operating Officer as of March 14, 2005. Prior thereto he
was Vice Chairman and Co-Chief Operating Officer. |
|
|
(8) |
In 2002, Mr. Kanak and Mr. Scott received restricted
stock units with respect to 20,000 shares of AIG Common
Stock with a value of $1,226,000 on the date of grant and
6,500 shares of AIG Common Stock with a value of $398,450
on the date of grant, respectively, which vest on the fourth
anniversary of the date of grant. As of December 31, 2004,
these restricted stock units had a value of $1,313,400 and
$426,855, respectively, based on the closing sale price of AIG
Common Stock on December 31, 2004 ($65.67). |
|
|
(9) |
Mr. Greenberg retired as Chairman and Chief Executive
Officer on March 14, 2005. |
|
|
(10) |
Mr. Smith was terminated as Vice Chairman and Chief
Financial Officer on March 21, 2005. |
In order to facilitate the performance of their management
responsibilities, AIG provides to Messrs. Sullivan and Tse
(and, before his retirement, provided to Mr. Greenberg)
automobiles and drivers and to these individuals and other
officers and employees the use of corporate aircraft, club
memberships, recreational opportunities and clerical and
investment management services. From time to time Starr also
made a yacht owned by SICO available to AIG officers and
employees. These facilities are provided for use for business
purposes and the costs thereof incurred by AIG are considered
ordinary and necessary business expenses. The incremental cost
of any personal benefit these persons derive from the use of
these facilities or from the services provided by AIG for 2004
has been included, under the column Other Annual Compensation,
in the Summary Compensation Table. For prior years shown in the
Summary Compensation Table, the incremental cost to AIG was
de minimis or there was no incremental cost to AIG because
these benefits were provided by Starr or SICO.
In connection with the employment and relocation to New York of
Mr. Frank G. Wisner, an executive officer, in 1997 AIG paid
certain expenses involved with his purchase of a cooperative
apartment and has provided credit support for his mortgage.
During 2004, AIG continued to provide the mortgage loan to
Mr. Sullivan that had been initiated in connection with his
relocation from London to New York in 1996. The maximum amount
of such loan outstanding during 2004 and at January 31,
2005 was $285,375 at an interest rate of 1.98 percent per
annum. During January 2004, AIG continued to provide Mr. R.
Kendall Nottingham, an executive officer, a mortgage loan with
an effective annual interest rate of 2.30 percent per
annum. The
14
maximum amount of such loan outstanding before it was repaid in
January 2004 was the yen equivalent of $2,779,000.
AIG maintains a policy of directors and officers liability
insurance for itself, its directors and officers, its
subsidiaries, and their directors and officers. The premium for
the year ending May 24, 2005 was approximately
$9.4 million. AIG has obtained coverage for the year ending
May 24, 2006 at a premium of approximately
$32.8 million.
Executive Employment Agreements
On June 27, 2005, AIG entered into a definitive employment
agreement with each of Messrs. Sullivan, Kanak and
Bensinger. Under the employment agreements, Mr. Sullivan
serves as AIGs President and Chief Executive Officer,
Mr. Kanak serves as AIGs Executive Vice Chairman and
Chief Operating Officer and Mr. Bensinger serves as
AIGs Executive Vice President and Chief Financial Officer.
Each employment agreement is effective for a three-year term,
commencing on March 14, 2005 (the Effective
Date), unless earlier terminated as provided in the
agreement, and, in each case, supersedes the respective letter
of understanding dated March 16, 2005 delivered to each of
the executives.
Annual Base Salary. The annual base salaries for the
executives are $1,000,000 for Mr. Sullivan, $800,000 for
Mr. Kanak and $750,000 for Mr. Bensinger each of which
is reviewed annually and may be increased by the Compensation
Committee.
Annual Non-Variable Compensation. AIG is obligated to
make additional cash payments to each executive with respect to
each of AIGs 2005, 2006 and 2007 fiscal years. These
payments are due no later than March 31 of the fiscal year
following each of fiscal years 2005, 2006 and 2007. The payments
are calculated by reducing from a specified dollar amount for
the executive the amount of cash compensation received by the
executive from certain other compensation arrangements. If the
amount of this offset is equal to or greater than the specified
dollar amount, no amount is due the executive under this
provision of the employment agreement. The amount of the offset
is the aggregate of amounts received by the executive with
respect to the applicable fiscal year as (1) supplemental
quarterly (or other periodic) interim cash bonuses paid by AIG,
and (2) cash dividends paid on any common and preferred
stock of Starr held by the executive. In addition, for
Messrs. Sullivan and Kanak, the amount of the offset will
include amounts received by the executive during 2005 in his
capacities as a director of SICO and Starr. None of
Messrs. Sullivan, Kanak or Bensinger continues to serve as
an officer or director of SICO or Starr. Accordingly, no bonuses
or directors fees are expected to be paid by either SICO or
Starr to any of the executives going forward. The specified
dollar amounts that are reduced by the offset described above
are $1,125,000 for Mr. Sullivan, $1,000,000 for
Mr. Kanak and $750,000 for Mr. Bensinger.
Transition Payment. Each executive is entitled to a
one-time transition cash payment, paid in four equal
installments, on the following dates, unless the
executives employment is terminated by AIG for
Cause or by the executive without Good
Reason (as such terms are defined in the employment
agreements): (1) the date of signing of the employment
agreement, and (2) the last day of each of the second,
third and fourth fiscal quarters of AIG in 2005. The amount of
the transition payment is: $4,875,000 for Mr. Sullivan,
$1,100,000 for Mr. Kanak and $1,000,000 for
Mr. Bensinger.
Long-Term and Equity-Based Incentives. Each executive is
eligible to participate in AIGs long-term incentive and
equity-based compensation plans on the basis determined by the
Compensation Committee, and the executive is entitled to the
specific awards described below.
|
|
|
|
|
2005 Grant. AIG is obligated to grant each executive
long-term incentive or equity-based compensation awards for 2005
no later than March 31, 2006. The value of the awards that
must be granted by such date is calculated by reducing from a
specified dollar value (the 2005 Equity Grant Value)
the value of awards received by the executive from certain other
long-term incentive and equity-based compensation arrangements
(the LTI Arrangements) in respect of 2005 (all such
values will be reasonably determined by the Compensation
Committee as of the date of grant). If the value of the awards
granted to the executive pursuant to the LTI Arrangements is
equal to or greater than the |
15
|
|
|
|
|
executives 2005 Equity Grant Value, AIG is not required to
grant the executive any additional awards under this provision.
The LTI Arrangements are (1) AIG stock options and other
equity awards granted to the executive no later than
December 31, 2005, in respect of fiscal year 2005,
(2) the annualized value of awards made to the executive
pursuant to arrangements with AIG intended to replace the SICO
Plans and other programs previously provided by SICO and
(3) preferred stock awarded to the executive by Starr in
respect of any Starr common stock held by the executive and any
growth in book value attributable to such common stock. The 2005
Equity Grant Value is $8,000,000 for Mr. Sullivan,
$5,600,000 for Mr. Kanak and $4,000,000 for
Mr. Bensinger. |
|
|
|
2006 and 2007 Grants. With respect to each of fiscal
years 2006 and 2007, each executive is eligible for long-term or
equity-based awards, which, together with the executives
annual cash bonus targets for such years (described below), will
have the following total target values (each, a Target
Total Incentive): $12,875,000 for Mr. Sullivan,
$6,700,000 for Mr. Kanak and $5,000,000 for
Mr. Bensinger. The amounts actually awarded are offset by
the value of awards received under the LTI Arrangements in
respect of such year (all such values will be reasonably
determined by the Compensation Committee as of the date of
grant). |
Annual Cash Bonus. Each executive may receive an annual
cash bonus, as determined in the discretion of the Compensation
Committee, based on the performance of AIG and the executive.
For each of the 2006 and 2007 fiscal years, the executive is
eligible for an annual cash bonus based on the attainment of
targets established by the Compensation Committee, which,
together with the target value of any long-term or equity-based
award in respect of such year, will equal the executives
Target Total Incentive, described above.
Employee Benefits and Perquisites. During the employment
term, each executive is entitled to participate in AIGs
employee benefit and perquisite plans (other than severance and
change-in-control plans) on the same basis as other senior
executives of AIG. AIG has also agreed to negotiate in good
faith with Mr. Bensinger to determine, prior to
January 1, 2006, the nature of Mr. Bensingers
participation in AIGs Supplemental Executive Retirement
Plan.
Severance Payments and Benefits. If the executives
employment is terminated by AIG without Cause or by
the executive for Good Reason, the executive is
entitled to the following payments and benefits, subject to the
executives execution of a release of claims against AIG
and its directors, officers and affiliates and continued
compliance with restrictive covenants set forth in the
employment agreement and described below:
|
|
|
|
|
a pro rata portion of the annual cash bonus for the fiscal year
of termination, payable as soon as reasonably practicable
following the date of termination (the Pro-Rata
Bonus); |
|
|
|
an amount equal to the greater of (1) the sum of
(A) three times annual base salary and (B) three times
the actual annual cash bonus paid with respect to the fiscal
year preceding termination, and (2) for Mr. Sullivan,
$15,000,000, for Mr. Kanak, $10,000,000 and for
Mr. Bensinger, $7,500,000, paid in installments over the
12 to 18-month non-compete period (as described below)
following the executives termination; |
|
|
|
continued health and life insurance for up to 36 months
after termination; |
|
|
|
three years of additional service and age under AIGs
pension plans (other than tax-qualified plans) for purposes of
benefit accrual, matching contributions, vesting and eligibility
for retirement; and |
|
|
|
if the executive (i) is not eligible to participate in any
retiree medical or life insurance program of AIG at termination
and (ii) would have at least 10 years of service with
AIG and reached age 55 if credited with three years of
additional age and service at termination, then AIG will
purchase medical and/or life insurance policies that provide
coverage as comparable as commercially available to coverage
under AIG retiree medical and/or life insurance programs. |
The payments and benefits described above cease if, after the
executives termination of employment and before the
payments and benefits are due, the Board determines that grounds
existed on or prior to the date of termination, including prior
to the Effective Date, for AIG to terminate the executives
employment for Cause. Severance payments are not
included in the calculation of a pension benefit, and the
executive is not entitled to
16
receive any payment pursuant to any non-qualified AIG pension
plan until the date the executive has ceased receiving severance
payments.
Payment Schedule for Severance, Pro Rata Bonus. If
necessary to avoid the application of Section 409A of the
Internal Revenue Code (the Code) to amounts payable
to the executive in connection with a termination of employment,
the executive will not receive any amounts until the first
scheduled payroll date that occurs more than six months
following termination of employment (the First Payment
Date) and, on the First Payment Date, AIG will pay the
executive the sum of all amounts that would have been payable in
respect of the period preceding the First Payment Date but for
the delay imposed on account of Section 409A of the Code.
Gross-Up for Golden Parachute Excise Taxes and
for Tax Equalization. To the extent any amounts payable to
the executive, whether under the employment agreements or
otherwise, are subject to any golden parachute
excise taxes under Section 4999 of the Code, AIG will
gross up such amounts in an amount equal to the
excise taxes imposed, including any income taxes and excise
taxes imposed on the gross up payments, and any
interests and penalties associated with such excise taxes. In
the case of Mr. Kanak, AIG will also gross up
the excess of (i) any Japanese tax liability imposed on his
income from AIG due to his being reassigned to the Far East in
2005, in respect of his employment with AIG prior to
January 1, 2004, over (ii) the hypothetical federal
income tax liability to which he would have been subject on such
income had he resided in the United States.
Restrictive Covenants. Each executive is bound by the
following covenants during the employment agreement term and at
all times following termination except as otherwise described
below:
|
|
|
|
|
Non-Competition and Non-Solicitation. While employed by
AIG and if the executives employment is terminated by AIG
during the term of the employment agreement, for 12 months
following termination for any reason (or for 18 months
following termination by the executive for Good Reason resulting
from failure of the Compensation Committee to adopt, by
December 31, 2005, an incentive compensation program for
2006 and 2007 that is acceptable to the executive), the
executive will generally be prohibited from (1) engaging
in, being employed by, rendering services to, or acquiring
financial interests in businesses that are competitive with AIG,
(2) interfering with AIGs business relationships with
customers, suppliers, or consultants, or (3) soliciting or
hiring certain key employees of AIG; |
|
|
|
Cooperation. Each executive must cooperate with AIG in
the defense of legal matters and with government authorities on
matters pertaining to investigations, litigation or
administrative proceedings pertaining to AIG; |
|
|
|
Non-Disparagement. Each executive is prohibited from
making certain disparaging statements about AIG or its officers,
directors or managers; |
|
|
|
Codes of Conduct. Each executive must abide by AIGs
codes of conduct; and |
|
|
|
Non-Disclosure of Confidential Information. Each
executive may not disclose AIGs confidential information. |
Indemnification and Legal Fees. AIG has agreed to
indemnify each executive to the fullest extent permitted by the
laws of Delaware for acts or omissions made in their service to
AIG. Each executive is entitled to full reimbursement of their
reasonable legal fees incurred in connection with disputes
arising under the employment agreement if the executive
substantially prevails in any such dispute.
17
Options
The following table summarizes information with respect to
grants of options to purchase AIG Common Stock during 2004 to
the individuals named in the Summary Compensation Table, to all
executive officers of AIG as a group, to all directors who are
not executive officers of AIG as a group, and to all employees
other than executive officers as a group.
Option Grants in 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of | |
|
|
|
|
|
|
|
|
|
|
|
|
Total Options | |
|
|
|
|
|
|
|
|
|
|
|
|
Granted to | |
|
Exercise | |
|
|
|
|
|
|
Date | |
|
Options | |
|
Employees | |
|
Price | |
|
Expiration | |
|
Grant Date | |
Name |
|
of Grant | |
|
Granted(1) | |
|
During 2004 | |
|
Per Share | |
|
Date | |
|
Value(2) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin J. Sullivan
|
|
|
12/16/04 |
|
|
|
50,000 |
|
|
|
1.61 |
|
|
$ |
64.47 |
|
|
|
12/16/14 |
|
|
$ |
1,280,500 |
|
Donald P. Kanak
|
|
|
12/16/04 |
|
|
|
50,000 |
|
|
|
1.61 |
|
|
|
64.47 |
|
|
|
12/16/14 |
|
|
|
1,280,500 |
|
Jay S. Wintrob
|
|
|
12/16/04 |
|
|
|
50,000 |
|
|
|
1.61 |
|
|
|
64.47 |
|
|
|
12/16/14 |
|
|
|
1,280,500 |
|
Richard W. Scott
|
|
|
12/16/04 |
|
|
|
15,000 |
|
|
|
.48 |
|
|
|
64.47 |
|
|
|
12/16/14 |
|
|
|
384,150 |
|
Thomas R. Tizzio
|
|
|
12/16/04 |
|
|
|
25,000 |
|
|
|
.80 |
|
|
|
64.47 |
|
|
|
12/16/14 |
|
|
|
640,250 |
|
Edmund S.W. Tse
|
|
|
12/16/04 |
|
|
|
55,000 |
|
|
|
1.77 |
|
|
|
64.47 |
|
|
|
12/16/14 |
|
|
|
1,408,550 |
|
Rodney O. Martin
|
|
|
12/16/04 |
|
|
|
40,000 |
|
|
|
1.29 |
|
|
|
64.47 |
|
|
|
12/16/14 |
|
|
|
1,024,400 |
|
Kristian P. Moor
|
|
|
12/16/04 |
|
|
|
40,000 |
|
|
|
1.29 |
|
|
|
64.47 |
|
|
|
12/16/14 |
|
|
|
1,024,400 |
|
Win J. Neuger
|
|
|
12/16/04 |
|
|
|
50,000 |
|
|
|
1.61 |
|
|
|
64.47 |
|
|
|
12/16/14 |
|
|
|
1,280,500 |
|
Former
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M.R. Greenberg
|
|
|
12/16/04 |
|
|
|
375,000 |
|
|
|
12.07 |
|
|
|
64.47 |
|
|
|
12/16/14 |
|
|
|
9,603,750 |
|
Howard I. Smith
|
|
|
12/16/04 |
|
|
|
60,000 |
|
|
|
1.93 |
|
|
|
64.47 |
|
|
|
12/16/14 |
|
|
|
1,536,600 |
|
Groups(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Executive Officers of AIG as a
Group (28 Individuals)
|
|
|
12/16/04 |
|
|
|
1,047,500 |
|
|
|
33.72 |
|
|
|
64.47 |
|
|
|
12/16/14 |
|
|
|
26,826,475 |
|
All Directors who are not Executive
Officers of AIG as a Group (10 Individuals)
|
|
|
5/19/04 |
|
|
|
25,000 |
|
|
|
N/A |
|
|
|
69.55 |
|
|
|
5/19/14 |
|
|
|
690,699 |
|
All Employees other than Executive
Officers as a Group
|
|
|
Various |
|
|
|
2,058,600 |
|
|
|
66.28 |
|
|
|
64.72 |
(4) |
|
|
Various |
|
|
|
52,720,746 |
|
|
|
(1) |
All options were granted pursuant to the Amended and Restated
1999 Stock Option Plan at an exercise price equal to the fair
market value of such stock at the date of grant. The option
grants to all executive officers, including the named
individuals, provide that 25 percent of the options granted
on any date become exercisable on each anniversary date in each
of the successive four years and expire ten years from the date
of grant. |
|
(2) |
Value calculated based on AIGs binomial option-pricing
model. The AIG model uses AIGs historical exercise
experience to determine the option value which takes into
account the early exercise of employee options. The following
weighted average assumptions were used for stock options granted
in 2004: a dividend yield of 0.36 percent; expected
volatility of 34.4 percent; risk-free interest rate of
3.87 percent; and an expected term of seven years. |
|
(3) |
Includes individuals who held those positions as of
December 31, 2004. |
|
(4) |
Weighted average exercise price per share. |
Messrs. Greenberg, Smith and Tizzio were granted options to
purchase 16,000 shares, 8,000 shares and
8,000 shares, respectively, of common stock of
Transatlantic at an exercise price of $60.34 per share (the
fair market value of Transatlantic common stock on the date of
grant) on December 2, 2004 as compensation for services to
Transatlantic. These grants provide that 25 percent of the
options granted become exercisable on each anniversary date in
each of the successive four years and that the options expire
ten years from the date of grant. In addition,
Mr. Greenberg received $75,000 in directors fees in
each of 2004, 2003 and 2002, Mr. Smith received
18
$40,500, $31,850 and $21,000 in directors fees in 2004,
2003 and 2002, respectively, and Mr. Tizzio received
$46,500, $34,050 and $23,800 in directors fees in 2004,
2003 and 2002, respectively, from Transatlantic.
Mr. Smith and Mr. Robert M. Sandler, an executive
officer, were each granted options to
purchase 4,000 shares of common stock of
21st Century at a price of $12.87 per share (the fair
market value of 21st Century common stock on the date of
grant) on May 26, 2004 as compensation for services to
21st Century. These options became exercisable on
May 26, 2005 and expire ten years from the date of grant.
Mr. Sandler and Mr. Bensinger were each granted
options to purchase 4,000 shares of common stock of 21st Century
at a price of $13.61 per share (the fair market value of 21st
Century common stock on the date of grant) on May 25, 2005
as compensation for services to 21st Century. These options
become exercisable on May 25, 2006 and expire ten years
from the date of grant.
The following table summarizes information with respect to the
exercise of options to purchase AIG Common Stock during 2004 by
the individuals named in the Summary Compensation Table and the
unexercised options to purchase AIG Common Stock held by such
individuals at December 31, 2004.
Aggregated Option Exercises during the Year Ended
December 31, 2004
and December 31, 2004 Option Values
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Unexercised | |
|
Value of Unexercised | |
|
|
|
|
|
|
Options at | |
|
In-the-Money Options at | |
|
|
Shares | |
|
|
|
December 31, 2004 | |
|
December 31, 2004(2) | |
|
|
Acquired on | |
|
Value | |
|
| |
|
| |
Name |
|
Exercise | |
|
Realized(1) | |
|
Exercisable/Unexercisable | |
|
Exercisable/Unexercisable | |
|
|
| |
|
| |
|
| |
|
| |
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin J. Sullivan
|
|
|
4,218 |
|
|
$ |
165,028 |
|
|
|
80,750/133,750 |
|
|
$ |
668,688/759,100 |
|
Donald P. Kanak
|
|
|
|
|
|
|
|
|
|
|
68,703/138,750 |
|
|
|
460,759/754,288 |
|
Jay S. Wintrob
|
|
|
162,316 |
|
|
|
10,523,498 |
|
|
|
731,870/163,750 |
|
|
|
34,417,907/759,100 |
|
Richard W. Scott
|
|
|
|
|
|
|
|
|
|
|
397,485/75,542 |
|
|
|
3,128,010/280,163 |
|
Thomas R. Tizzio
|
|
|
94,921 |
|
|
|
5,163,826 |
|
|
|
325,781/88,750 |
|
|
|
8,548,567/547,875 |
|
Edmund S.W. Tse
|
|
|
44,296 |
|
|
|
1,744,877 |
|
|
|
381,093/167,500 |
|
|
|
7,423,844/939,875 |
|
Rodney O. Martin, Jr.
|
|
|
|
|
|
|
|
|
|
|
718,672/175,754 |
|
|
|
4,126,280/397,550 |
|
Kristian P. Moor
|
|
|
|
|
|
|
|
|
|
|
76,474/107,500 |
|
|
|
745,157/578,775 |
|
Win J. Neuger
|
|
|
94,921 |
|
|
|
3,901,348 |
|
|
|
106,561/115,000 |
|
|
|
2,065,278/516,288 |
|
Former
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M.R. Greenberg
|
|
|
158,203 |
(3) |
|
|
7,821,762 |
(3) |
|
|
1,901,561/1,218,750 |
|
|
|
30,992,176/7,004,063 |
|
Howard I. Smith
|
|
|
25,312 |
|
|
|
1,235,957 |
|
|
|
277,655/170,000 |
|
|
|
4,641,770/945,875 |
|
|
|
(1) |
Aggregate market value on date of exercise (closing sale price
as reported in the NYSE Composite Transactions Report) less
aggregate exercise price. |
|
(2) |
Aggregate market value on December 31, 2004 (closing sale
price as reported in the NYSE Composite Transactions Report)
less aggregate exercise price. |
|
(3) |
Receipt of 115,812 shares with an aggregate value of
$5,725,896 was deferred. |
Long-Term Incentive Plans
As discussed in the notes to the Summary Compensation Table,
since 1975 SICO has provided a series of two-year Deferred
Compensation Profit Participation Plans to senior AIG employees.
AIG has authorized the creation of a 2005-2006 Deferred
Compensation Profit Participation Plan (the 2005-2006
Plan) that will be modeled on the SICO Plan with respect
to the 2003-2004 period, except that the 2005-2006 Plan will be
administered by AIG and its costs will be borne directly by AIG.
Shares will be issued pursuant to the Amended and Restated 2002
Stock Incentive Plan to satisfy obligations under this plan. AIG
has determined the number of units that will be granted to each
AIG employee under the 2005-2006 Plan. However, the
documentation for the new 2005-2006 Plan has not been finalized
or approved and formal awards have not yet been issued.
19
The following table summarizes information with respect to
benefits under the forthcoming 2005-2006 Deferred Compensation
Profit Participation Plan that will be awarded to the
individuals named in the Summary Compensation Table once the
2005-2006 Plan is finalized.
Long-Term Incentive Plans
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Number of Units(1) | |
|
Unit Award Period |
|
Estimated Future Payouts(2) | |
|
|
| |
|
|
|
| |
Current
|
|
|
|
|
|
|
|
|
|
|
Martin J. Sullivan
|
|
|
4,000 |
|
|
Two years
|
|
|
64,000 Shares |
|
Donald P. Kanak
|
|
|
3,500 |
|
|
Two years
|
|
|
56,000 Shares |
|
Jay S. Wintrob
|
|
|
3,000 |
|
|
Two years
|
|
|
48,000 Shares |
|
Richard W. Scott
|
|
|
950 |
|
|
Two years
|
|
|
15,200 Shares |
|
Thomas R. Tizzio
|
|
|
3,000 |
|
|
Two years
|
|
|
48,000 Shares |
|
Edmund S.W. Tse
|
|
|
4,000 |
|
|
Two years
|
|
|
64,000 Shares |
|
Rodney O. Martin,
Jr.
|
|
|
1,200 |
|
|
Two years
|
|
|
19,200 Shares |
|
Kristian P. Moor
|
|
|
3,500 |
|
|
Two years
|
|
|
56,000 Shares |
|
Win J. Neuger
|
|
|
3,400 |
|
|
Two years
|
|
|
54,400 Shares |
|
Former
|
|
|
|
|
|
|
|
|
|
|
M.R. Greenberg
|
|
|
|
|
|
|
|
|
|
|
Howard I. Smith
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Awards represent grants of units that will be made under the
forthcoming 2005-2006 Deferred Compensation Profit Participation
Plan with respect to the two-year period from January 1,
2005 through December 31, 2006. The number of shares of AIG
Common Stock, if any, allocated to a unit for the benefit of a
participant under the 2005-2006 Plan will be dependent primarily
upon two factors: the growth in earnings per share of AIG during
the 2005-2006 award period as compared to the 2003-2004 period
and the book value of AIG at the end of the award period. As a
result, the number of shares to be allocated with respect to
units to be awarded for the 2005-2006 period and the value of
such shares upon future payout cannot be determined at this
time. See Note 2 below. |
|
(2) |
The number of shares to be allocated with respect to units to be
awarded for the 2005-2006 period cannot be determined at this
time. The Estimated Future Payouts column represents
the number of shares that would be contingently allocable to the
named individuals if, at the end of 2006, the criteria used to
allocate shares to units were the same as those used by the
Board of Directors of SICO for the 2003-2004 period. However,
any share allocation made under the 2005-2006 Plan will be made
by the Compensation Committee of AIGs Board of Directors.
Before obtaining the right to a payout, no participant will have
any equity interest with respect to shares allocated to him or
her and the allocated shares will be subject to forfeiture under
certain conditions, including, unless the Compensation Committee
otherwise determines, the participants voluntary
termination of employment with AIG prior to normal retirement
age other than by death or disability. |
20
Equity Compensation Plan Information
The following table provides information as of December 31,
2004, regarding equity compensation plans under which equity
securities of AIG are authorized for issuance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities | |
|
|
|
|
|
|
|
|
Remaining Available | |
|
|
|
|
|
|
Weighted- | |
|
for Future Issuance | |
|
|
|
|
|
|
Average | |
|
Under Equity | |
|
|
|
|
Number of Securities to | |
|
Exercise Price of | |
|
Compensation Plans | |
|
|
|
|
be Issued Upon | |
|
Outstanding | |
|
(Excluding | |
|
|
|
|
Exercise of | |
|
Options, | |
|
Securities Reflected | |
|
|
|
|
Outstanding Options, | |
|
Warrants and | |
|
in the Second | |
|
|
Plan Category | |
|
Warrants and Rights(1) | |
|
Rights(1) | |
|
Column) | |
|
|
| |
|
| |
|
| |
|
| |
Equity compensation plans approved
by security holders
|
|
1991 Employee Stock Option Plan |
|
|
6,697,067 |
|
|
$ |
41.68 |
|
|
|
|
|
|
|
Amended and Restated 1999 Stock Option Plan |
|
|
21,719,486 |
|
|
|
66.47 |
|
|
|
23,164,449 |
|
|
|
Amended and Restated 2002 Stock Incentive Plan |
|
|
1,368,020 |
|
|
|
64.81 |
(2) |
|
|
16,631,980 |
(3) |
|
|
|
Director Stock Plan |
|
|
|
8,375 |
|
|
|
|
|
|
|
91,250 |
|
Equity compensation plans not
approved by security holders
|
|
|
Option Plan for Directors(4) |
|
|
|
243,125 |
|
|
|
20.33 |
|
|
|
|
|
Total
|
|
|
30,036,073 |
|
|
|
60.29 |
(5) |
|
|
39,887,679 |
|
|
|
(1) |
In connection with acquisition transactions, options with
respect to 26,046,450 shares were outstanding as a result
of AIGs assumption of options granted by the acquired
entities, at a weighted average option exercise price of
$42.46 per share. AIG has not made, and will not make, any
future grants or awards of equity securities under the plans of
these acquired companies. |
|
(2) |
Weighted average value of restricted stock units at date of
grant. |
|
(3) |
An additional 1,000,000 shares become available for grant
or award in each year pursuant to the terms of the Amended and
Restated 2002 Stock Incentive Plan. |
|
(4) |
Effective with the approval of the 1999 Stock Option Plan by the
Board of Directors in September 1999, option grants to directors
were made pursuant to that plan. Prior thereto, options were
granted to directors under the Option Plan for Directors. Under
such plan, options were granted at an option price equal to the
fair market value of AIG Common Stock on the date of grant,
vesting after one year and exercisable for nine years thereafter. |
|
(5) |
Excludes restricted stock units. |
Pension Benefits
The executives named in the Summary Compensation Table
participate in a series of tax qualified and non-qualified
retirement plans that provide retirement benefits to designated
executives and key employees. Under the plans, annual retirement
benefits, not to exceed 60 percent of Average Final
Compensation, accrue at a rate of 2.4 percent of Average
Final Compensation for each year of service or fraction thereof
for each full month of active employment. The benefit payable
under the plans is reduced by payments from Social Security and
any payments from a qualified pension plan of a prior employer.
Certain of the plans allow participants over the age of
701/2
the option to commence their benefits while still employed. The
benefit cannot commence until at least one year after the date
of such election.
21
Annual amounts of normal retirement pension commencing at normal
retirement age of 65 based upon Average Final Compensation and
credited service under these retirement plans are illustrated in
the following table:
Estimated Annual Pension at Age 65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Final Compensation |
|
10 Years | |
|
15 Years | |
|
20 Years | |
|
25 Years | |
|
30 Years | |
|
35 Years | |
|
40 Years | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
$ 125,000
|
|
$ |
14,341 |
|
|
$ |
23,244 |
|
|
$ |
38,244 |
|
|
$ |
53,244 |
|
|
$ |
53,244 |
|
|
$ |
53,244 |
|
|
$ |
59,100 |
|
$ 150,000
|
|
|
17,904 |
|
|
|
32,244 |
|
|
|
50,244 |
|
|
|
68,244 |
|
|
|
68,244 |
|
|
|
68,244 |
|
|
|
73,350 |
|
$ 175,000
|
|
|
21,466 |
|
|
|
41,244 |
|
|
|
62,244 |
|
|
|
83,244 |
|
|
|
83,244 |
|
|
|
83,244 |
|
|
|
87,600 |
|
$ 200,000
|
|
|
26,244 |
|
|
|
50,244 |
|
|
|
74,244 |
|
|
|
98,244 |
|
|
|
98,244 |
|
|
|
98,244 |
|
|
|
101,850 |
|
$ 225,000
|
|
|
32,244 |
|
|
|
59,244 |
|
|
|
86,244 |
|
|
|
113,244 |
|
|
|
113,244 |
|
|
|
113,244 |
|
|
|
116,100 |
|
$ 250,000
|
|
|
38,244 |
|
|
|
68,244 |
|
|
|
98,244 |
|
|
|
128,244 |
|
|
|
128,244 |
|
|
|
128,244 |
|
|
|
130,350 |
|
$ 300,000
|
|
|
50,244 |
|
|
|
86,244 |
|
|
|
122,244 |
|
|
|
158,244 |
|
|
|
158,244 |
|
|
|
158,244 |
|
|
|
158,850 |
|
$ 375,000
|
|
|
68,244 |
|
|
|
113,244 |
|
|
|
158,244 |
|
|
|
203,244 |
|
|
|
203,244 |
|
|
|
203,244 |
|
|
|
203,244 |
|
$ 400,000
|
|
|
74,244 |
|
|
|
122,244 |
|
|
|
170,244 |
|
|
|
218,244 |
|
|
|
218,244 |
|
|
|
218,244 |
|
|
|
218,244 |
|
$ 500,000
|
|
|
98,244 |
|
|
|
158,244 |
|
|
|
218,244 |
|
|
|
278,244 |
|
|
|
278,244 |
|
|
|
278,244 |
|
|
|
278,244 |
|
$ 750,000
|
|
|
158,244 |
|
|
|
248,244 |
|
|
|
338,244 |
|
|
|
428,244 |
|
|
|
428,244 |
|
|
|
428,244 |
|
|
|
428,244 |
|
$1,000,000
|
|
|
218,244 |
|
|
|
338,244 |
|
|
|
458,244 |
|
|
|
578,244 |
|
|
|
578,244 |
|
|
|
578,244 |
|
|
|
578,244 |
|
$1,375,000
|
|
|
308,244 |
|
|
|
473,244 |
|
|
|
638,244 |
|
|
|
803,244 |
|
|
|
803,244 |
|
|
|
803,244 |
|
|
|
803,244 |
|
The respective years of credited service for the individuals
named in the Summary Compensation Table through
December 31, 2004 are as follows: Sullivan
25.4 years; Kanak 12.5 years; Wintrob
4.5 years; Scott 10.33; Tizzio 36.67 years;
Tse 43.5 years; Moor 19.75 years; Neuger 9.33
years; Smith 20.3 years. For purposes of the plans,
Average Final Compensation is the average pensionable salary of
a participant during the three consecutive years in the last ten
years of his credited service affording the highest such
average, or during all of the years of his credited service if
less than three years. Pensionable salary includes the regular
salary paid by AIG and its subsidiaries and does not include
amounts attributable to supplementary bonuses or overtime pay.
For such named individuals, pensionable salary during 2004 was
as follows: Sullivan $675,962; Kanak $655,000;
Wintrob $650,000; Scott $525,000; Tizzio
$654,700; Tse $661,156; Moor $551,298; Neuger
$621,154; Smith $631,154.
Mr. Martin has accrued an estimated annual benefit payable
upon retirement at normal retirement age at 65 from all
applicable AIG and AGC plans of $203,381.
Mr. Greenberg elected to commence his retirement plan
benefits under the qualified plan on January 1, 1996 at the
age of
701/2
and under the non-qualified plans on October 1, 2004. His
total annual benefit from the retirement plans reflecting 45
years of employment is $1,637,532 payable in the form of a
100 percent joint and survivor annuity.
Executive Severance Plan
The Compensation Committee of the AIG Board of Directors has
approved the terms of an executive severance plan, which
provides severance payments and benefits to a select group of
AIGs senior executives (other than Messrs. Sullivan, Kanak
and Bensinger during the time their employment agreements are in
effect). The executive severance plan is effective as of
June 27, 2005 and will remain in effect until the third
anniversary of such date. Executives who hold positions that are
designated as senior partners or
partners for purposes of eligibility to participate
in any deferred compensation profit participation program of
AIG, or similar or successor positions, and who are selected for
participation by AIGs Chief Executive Officer are eligible
to participate.
Under the executive severance plan, if a participants
employment is terminated for reasons other than the
participants death, disability, retirement, voluntary
termination for any reason or termination by AIG for
Cause (as defined in executive severance plan), the
participant shall receive severance equal to (i) the
participants annual base salary as of the date of
termination plus the average of the aggregate annual and
supplemental quarterly cash bonuses received by the participant
during each of the three fiscal years
22
preceding the date of termination, divided by
(ii) 12, and multiplied by (iii) each full year
of the participants service with AIG or its
subsidiaries(but no less than six nor more than 24 years).
Amounts of severance payable under the executive severance plan
are reduced (but not below zero) by any amounts due to a
participant under an individual employment agreement between the
participant and AIG, any other AIG severance plan or policy or
pursuant to any regulatory severance plan or arrangement in a
country outside the United States.
Severance is paid in equal installments over a number of months
equal to the six- to 24-month severance multiple described
above, in accordance with AIGs normal payroll practices,
but, in the discretion of the Compensation Committee, it may be
paid in a lump sum following termination of employment. If
required to avoid the application of Section 409A of the
Code, however, severance payments will not commence until the
first payroll period after six months following the date of
termination, in which case the first payment will include
amounts payable in respect of the preceding six months.
In addition, a participant who is entitled to severance is also
entitled to continue to participate in AIGs life and
health insurance benefit arrangements until the earlier of the
expiration of the severance period and the date a participant is
eligible to receive replacement coverage from a subsequent
employer, after which time COBRA coverage shall apply. The
participant will be required to pay the costs of the continued
coverage during the severance period on the same basis as when
the employee was actively employed.
Participants who are eligible for severance are also entitled to
additional service and age credit in respect of the number of
months in the severance period, under AIGs employee
pension plans (except for under any tax-qualified plan), for
purposes of benefit accrual, matching contributions, vesting and
eligibility for retirement. No severance payments due under the
executive severance plan are included in the calculation of a
pension benefit, and no participant is entitled to receive any
payments pursuant to any non-qualified AIG pension plan until
the date the participant has ceased receiving severance under
the executive severance plan.
To receive severance, a participant must sign a release of
claims against AIG, and an agreement to be bound by
non-competition and non-solicitation covenants until the earlier
of the first anniversary of termination of employment or the end
of the severance period and non-disparagement and
confidentiality covenants indefinitely (the violation of which
will result in the cessation of any remaining severance payments
and benefits).
Relationships with Starr and SICO
A number of senior AIG executives, including the individuals
named in the Summary Compensation Table, have historically held
positions with, and received compensation from, Starr and SICO.
Both companies own substantial amounts of AIG Common Stock and
have had other relationships with AIG. For example, from time to
time, Starr has offered members of AIGs senior management
the opportunity to purchase shares of its common stock and,
since 1975, SICO has provided benefits under the SICO Plans to
certain senior AIG employees. Consistent with AIGs
traditional presentation, the amount of AIG Common Stock
beneficially owned by Starr and SICO and the amount of Starr and
SICO voting stock beneficially owned by AIGs directors and
executive officers is discussed under Ownership of Certain
Securities, awards allocated under the SICO Plans are
reflected in the Summary Compensation Table and other
transactions between AIG, on the one hand, and Starr and SICO,
on the other hand, are discussed under Certain
Transactions.
AIG is currently in the process of unwinding and resolving
various relationships with Starr and SICO. As a result,
AIGs executive officers no longer serve as officers or
directors of SICO and Starr or their subsidiaries.
Payments
and Benefits Provided by Starr and SICO
AIG intends to provide new or enhanced compensation
opportunities to AIG employees in order to reflect the
compensation and benefits previously provided by Starr and SICO.
AIG is providing the following information to give a historical
perspective of the payments made by Starr and SICO to AIG
executive officers, including the executives named in the
Summary Compensation Table. This table does not include the
allocation of awards under the SICO Plans, because they are
included in the Summary Compensation Table or
23
dividends paid by Starr, which are included in the table under
Investments in Starr. The information in this table,
and the following two tables pertaining to SICO and Starr
reflect the best information available to AIG, but AIG does not
currently have full access to the books and records of Starr and
SICO.
Summary of Salary, Bonus and Directors Fees Paid by Starr and
SICO*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus Amounts | |
|
Directors Fees | |
|
|
|
|
Starr | |
|
Paid by SICO | |
|
| |
Name |
|
Year | |
|
Salary | |
|
and/or Starr | |
|
Starr | |
|
SICO | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin J. Sullivan
|
|
|
2004 |
|
|
$ |
99,000 |
|
|
$ |
100,000 |
|
|
$ |
100,000 |
|
|
$ |
50,000 |
|
|
|
|
2003 |
|
|
|
91,385 |
|
|
|
75,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2002 |
|
|
|
66,000 |
|
|
|
50,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
Donald P. Kanak
|
|
|
2004 |
|
|
|
88,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2003 |
|
|
|
68,538 |
|
|
|
|
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2002 |
|
|
|
66,000 |
|
|
|
205,917 |
|
|
|
100,000 |
|
|
|
50,000 |
|
Jay S. Wintrob
|
|
|
2004 |
|
|
|
66,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2003 |
|
|
|
68,538 |
|
|
|
75,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2002 |
|
|
|
66,000 |
|
|
|
50,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
Richard W. Scott
|
|
|
2004 |
|
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 |
|
|
|
25,962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas R. Tizzio
|
|
|
2004 |
|
|
|
62,000 |
|
|
|
62,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2003 |
|
|
|
87,231 |
|
|
|
62,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2002 |
|
|
|
84,000 |
|
|
|
62,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
Edmund S.W. Tse
|
|
|
2004 |
|
|
|
154,000 |
|
|
|
150,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2003 |
|
|
|
154,000 |
|
|
|
150,000 |
|
|
|
50,000 |
|
|
|
50,000 |
|
|
|
|
2002 |
|
|
|
154,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
50,000 |
|
Rodney O. Martin, Jr.
|
|
|
2004 |
|
|
|
32,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 |
|
|
|
33,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2002 |
|
|
|
28,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Kristian P. Moor
|
|
|
2004 |
|
|
|
77,000 |
|
|
|
125,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2003 |
|
|
|
79,962 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2002 |
|
|
|
66,000 |
|
|
|
50,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
Win J. Neuger
|
|
|
2004 |
|
|
|
281,000 |
|
|
|
75,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2003 |
|
|
|
283,538 |
|
|
|
50,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2002 |
|
|
|
281,000 |
|
|
|
40,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
Former
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M.R. Greenberg
|
|
|
2004 |
|
|
|
380,000 |
|
|
|
2,630,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2003 |
|
|
|
394,615 |
|
|
|
2,128,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2002 |
|
|
|
468,000 |
|
|
|
3,128,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
Howard I. Smith
|
|
|
2004 |
|
|
|
165,000 |
|
|
|
150,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2003 |
|
|
|
171,346 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
|
|
|
2002 |
|
|
|
154,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
50,000 |
|
All Executive Officers of AIG as a
Group
|
|
|
2004 |
|
|
|
1,339,250 |
|
|
|
1,119,000 |
|
|
|
1,300,000 |
|
|
|
650,000 |
|
|
|
|
2003 |
|
|
|
1,337,183 |
|
|
|
784,000 |
|
|
|
1,250,000 |
|
|
|
650,000 |
|
|
|
|
2002 |
|
|
|
1,258,681 |
|
|
|
1,059,917 |
|
|
|
1,250,000 |
|
|
|
650,000 |
|
|
|
* |
Payments made by Starr or SICO for services provided to AIG are
also included in the Summary Compensation table herein. |
Starr and SICO also provided perquisites or other personal
benefits to AIG executives for their service to Starr and SICO.
The preceding table does not include the incremental cost of
these benefits because AIG does not currently have access to
complete information.
24
Existing SICO Plans and Investments in Starr
SICO Plans. The following table summarizes information
with respect to the number of shares of AIG Common Stock that
would be received by the individuals named in the Summary
Compensation Table upon retirement after age 65 pursuant to
all existing SICO Plans.
Existing SICO Deferred Compensation
Profit Participation Plans
|
|
|
|
|
Name |
|
Number of Shares* | |
|
|
| |
Current
|
|
|
|
|
Martin J. Sullivan
|
|
|
192,033 |
|
Donald P. Kanak
|
|
|
121,439 |
|
Jay S. Wintrob
|
|
|
96,000 |
|
Richard W. Scott
|
|
|
21,600 |
|
Thomas R. Tizzio
|
|
|
873,317 |
|
Edmund S.W. Tse
|
|
|
535,543 |
|
Rodney O. Martin, Jr.
|
|
|
26,800 |
|
Kristian P. Moor
|
|
|
169,265 |
|
Win J. Neuger
|
|
|
231,481 |
|
Former
|
|
|
|
|
M.R. Greenberg
|
|
|
3,680,759 |
|
Howard I. Smith
|
|
|
424,403 |
|
|
|
* |
As discussed in the notes to the Summary Compensation Table,
until retirement after age 65 or early payout under certain
circumstances, the named individuals have no dividend or voting
rights with respect to these shares. |
Investments in Starr. Starr from time to time offered
members of AIGs senior management the opportunity to
purchase shares of its common stock. Book value was used to
determine the purchase price, and the shares have generally paid
cash dividends as well as dividends in the form of non-voting
preferred shares.
The Starr common and preferred shares are subject to agreements
that limit their transferability and give Starr the right, and
in some cases the obligation, to repurchase the shares after a
holder ceases to be an employee of Starr and substantially all
of Starrs affiliated or associated companies. The
repurchase price is generally based on the adjusted book value
of the common shares and the sum of the liquidation value and
unpaid dividends of the preferred shares. However, Starr can
repurchase the shares for a substantially lower price if a
holder voluntarily departs (without the approval of Starrs
board of directors) before the holder turns 60 or, for holders
voluntarily departing between 60 and 65, if the holder competes
with Starr, or Starrs affiliated or associated companies,
before turning 65.
During 2004, Starr offered a total of 1,125 shares of its
common stock to AIG employees. Mr. Sullivan purchased
125 shares, Mr. Kanak purchased 250 shares and
Mr. Bensinger purchased 125 shares, respectively, at a
purchase price of $300 per share. As of January 1, 2005,
Messrs. Sullivan, Neuger and Smith purchased an additional
125 shares each at a purchase price of $300 per share.
25
The following table sets forth information with respect to the
Starr holdings of the individuals named in the Summary
Compensation Table, as of January 1, 2005.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation Value of | |
|
Cash | |
|
|
|
|
Preferred Shares | |
|
Dividends | |
|
|
Total | |
|
| |
|
| |
|
|
Purchase | |
|
Increase in | |
|
|
|
Paid in | |
Name |
|
Price* | |
|
2004 | |
|
Total | |
|
2004 | |
|
|
| |
|
| |
|
| |
|
| |
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin J. Sullivan
|
|
$ |
337,500 |
|
|
$ |
2,475,000 |
|
|
$ |
10,062,500 |
|
|
$ |
393,375 |
|
Donald P. Kanak
|
|
|
300,000 |
|
|
|
1,650,000 |
|
|
|
8,250,000 |
|
|
|
308,000 |
|
Jay S. Wintrob
|
|
|
225,000 |
|
|
|
1,650,000 |
|
|
|
7,275,000 |
|
|
|
288,750 |
|
Richard W. Scott
|
|
|
37,500 |
|
|
|
275,000 |
|
|
|
550,000 |
|
|
|
41,500 |
|
Thomas R. Tizzio
|
|
|
450,000 |
|
|
|
3,850,000 |
|
|
|
32,060,000 |
|
|
|
815,100 |
|
Edmund S.W. Tse
|
|
|
525,000 |
|
|
|
3,850,000 |
|
|
|
26,663,750 |
|
|
|
770,337 |
|
Rodney O. Martin, Jr.
|
|
|
75,000 |
|
|
|
550,000 |
|
|
|
1,600,000 |
|
|
|
88,000 |
|
Kristian P. Moor
|
|
|
262,500 |
|
|
|
1,925,000 |
|
|
|
9,237,500 |
|
|
|
344,375 |
|
Win J. Neuger
|
|
|
225,000 |
|
|
|
1,650,000 |
|
|
|
8,000,000 |
|
|
|
296,000 |
|
Former
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M.R. Greenberg
|
|
|
1,200,000 |
|
|
|
8,800,000 |
|
|
|
121,375,000 |
|
|
|
2,775,250 |
|
Howard I. Smith
|
|
|
562,500 |
|
|
|
4,125,000 |
|
|
|
26,646,250 |
|
|
|
806,463 |
|
All Executive Officers of AIG as a
Group
|
|
|
3,975,000 |
|
|
|
29,150,000 |
|
|
|
175,923,750 |
|
|
|
4,427,282 |
|
|
|
* |
Reflects cumulative purchase price paid by the holder from time
to time through December 31, 2004. |
Certain Transactions
Certain transactions in 2004 effected in the ordinary course of
business between AIG and its subsidiaries and SICO and Starr are
summarized in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
SICO and | |
|
Starr and | |
|
|
Subsidiaries | |
|
Subsidiaries | |
|
|
| |
|
| |
|
|
(in thousands) | |
AIG and Subsidiaries Paid:
|
|
|
|
|
|
|
|
|
|
For production of insurance
business*
|
|
$ |
|
|
|
$ |
204,800 |
|
|
For services
|
|
|
1,400 |
|
|
|
262 |
|
|
Rentals
|
|
|
4,000 |
|
|
|
39 |
|
AIG and Subsidiaries Received:
|
|
|
|
|
|
|
|
|
|
For services
|
|
|
619 |
|
|
|
22,100 |
|
|
Rentals
|
|
|
11 |
|
|
|
1,900 |
|
|
|
* |
From these payments, which constituted approximately
52 percent of Starrs consolidated gross revenues for
the year, Starr is generally required to pay its operating
expenses as well as commissions due originating brokers. The
amounts represent approximately 0.2 percent of the gross
revenues of AIG. |
Starr from time to time offered members of AIGs senior
management the opportunity to purchase shares of its common
stock. Information regarding purchases of Starr securities can
be found under the heading Relationships with Starr and
SICO and Existing SICO Plans and Investments in
Starr.
26
Report of the Compensation Committee on Executive
Compensation
The Compensation Committee is the committee of the Board
responsible for making recommendations to the Board with regard
to AIGs compensation programs applicable to senior
executives and other employee compensation and for oversight of
the development and implementation of AIGs compensation
programs. The Committee also reviews and approves the
performance goals and objectives relevant to the Chief Executive
Officer. These responsibilities are set forth in the
Committees Charter, which is posted on AIGs
corporate website at www.aigcorporate.com.
For year 2004, Messrs. Marshall Cohen, William Cohen,
Hoenemeyer and Holbrooke comprised the Committee. The Board,
upon the recommendation of the Corporate Governance and
Nominating Committee, has determined that each member of the
Committee is independent for purposes of the NYSE listing
standards.
Ongoing Compensation Review
Following Mr. Greenbergs retirement from AIG in March
2005 and the commencement of the legal and regulatory actions
and investigations described under Item 3. Legal
Proceedings, in AIGs Annual Report on Form 10-K for
the year ended December 31, 2004, the Committee decided to
take a fresh look at AIGs executive compensation
practices. The Committee determined that AIGs compensation
policies should address crucial short-term and long-term
organizational goals. As an immediate and short-term matter, the
Committee believes it is critical to retain the continued
services of its senior executives and ensure their continued
focus during the period following recent events. Over the
long-term, AIG seeks to ensure that its compensation policies
are aligned with the goal of enhancing shareholder value through
programs that attract, retain and motivate key executives and
support an effective control environment.
In addition, a number of senior AIG executives, including
AIGs President and Chief Executive Officer, have
historically held positions with, and received compensation
from, Starr and SICO. AIG is currently in the process of
unwinding and resolving various relationships with these
companies, and AIGs executive officers no longer serve as
officers or directors of Starr, SICO or their subsidiaries. The
Committee directed AIGs current management to consider new
or enhanced compensation opportunities for AIG employees to
reflect the compensation and benefits previously provided by
these companies. The Committee views addressing these issues as
important to both its short-term and long-term goals so long as
the resulting total compensation is balanced, fair and
competitive.
The Committee selected and engaged Frederic W. Cook & Co.,
Inc. (FWCook) to provide independent advice on
executive compensation practices and determinations, including
the steps AIG has taken since March 2005 and its going-forward
review of compensation practices. The Committee has specifically
requested that FWCook provide advice based on industry best
practices, and it is expected that the Committee will evaluate
all forms of executive compensation in its review. The Committee
has also made use of the services of outside counsel to the
independent directors of the Board, as well as AIGs
outside counsel, in evaluating and implementing the steps it has
taken since March 2005.
Executive Employment Agreements
In March 2005, the Board delivered letters of understanding to
Messrs. Sullivan, Kanak and Bensinger, in connection with Mr.
Sullivans promotion to AIGs President and Chief
Executive Officer, Mr. Kanaks promotion to AIGs
Executive Vice Chairman and Chief Operating Officer and Mr.
Bensingers promotion to AIGs Executive Vice
President and Chief Financial Officer. These letters
contemplated the negotiation of comprehensive employment
agreements to replace the letters. In June 2005, AIG entered
into definitive employment agreements with each of these
executives that supersede the letters. The terms of the
agreements are described under Executive Employment
Agreements in Compensation of Directors and
Executive Officers.
Although AIG has not historically entered into employment
agreements or granted severance protection, the Committee
determined it was appropriate in light of its short-term goals.
The Committee considered, in
27
particular, the challenges faced by senior management during
this transition period, the expected changes in the compensation
opportunities made available by AIG during this period, the
limited, fixed term of the agreements and FWCooks advice
regarding the agreements. The employment agreements were
negotiated by the Committee with the assistance of FWCook and
outside counsel for AIG.
Executive Severance Plan
For the same reasons, the Board approved the terms of an
executive severance plan, which provides severance payments and
benefits to a select group of AIGs senior officers. The
plan also has a three-year term and provides for severance based
on up to two years of employment if, during the term,
employment is terminated by AIG without Cause (as
defined in the plan). The actual amount of severance will depend
on the length of the relevant executives service with AIG
and its subsidiaries.
Severance under the plan is subject to continued compliance with
certain restrictive covenants, among other conditions. The
severance plan is described in more detail under Executive
Severance Plan in Compensation of Directors and
Executive Officers.
AIG 2005-2006 Deferred Compensation Profit Participation
Plan
Since 1975, SICO has provided benefits under the SICO Plans to
senior AIG employees. To provide continuity during 2005 and
2006, AIG has authorized the creation of a 2005-2006 Deferred
Compensation Profit Participation Plan that will be modeled on
(but will not be identical to) the historic SICO Plans. The
2005-2006 Plan will be administered by the Committee, and its
costs will be borne directly by AIG.
It is expected that the number of shares of AIG Common Stock
that can be issued to participants under the 2005-2006 Plan will
be calculated after the completion of 2006 and will be based
primarily on (1) the growth in earnings per share during
the 2005-2006 award period as compared to the 2003-2004 period
and (2) the book value of AIG at the end of the award
period. After the total number of shares that can be issued
under the 2005-2006 Plan is calculated, participants will
receive contingent rights to their proportionate share of this
total number based upon the number of units awarded them (as
adjusted by a multiplier) relative to the total number of units
granted under the 2005-2006 Plan. For most of AIGs senior
executive officers, including Messrs. Sullivan, Kanak and
Bensinger, the multiplier will be two times. In addition, most
of AIGs senior executive officers, including
Messrs. Sullivan, Kanak and Bensinger, who continue to be
employed on January 1, 2013 and have not reached
age 65 will receive an increase of 20 percent in the
number of their contingently allocated shares of AIG Common
Stock.
The Committee approved participation levels in the 2005-2006
Plan on April 20, 2005, but formal awards have not been
issued because the 2005-2006 Plan has not been finalized or
approved. The Committee approved participation levels in order
to provide continuity to executives, who previously had been
advised by SICO of the number of units they would have been
granted under a 2005-2006 SICO Plan had SICO adopted such a
plan. The Committee determined to provide identical
participation levels in the 2005-2006 Plan (with limited
exceptions) after review of these levels and consultation with
FWCook.
Mr. Sullivans award under the 2005-2006 Plan will be
4,000 units. This is the number of units that SICO advised
him he would receive under the superseded 2005-2006 SICO Plan.
Mr. Sullivans forthcoming participation award was not
increased as a result of his appointment as President and Chief
Executive Officer. The number of units granted to each current
officer named in the Summary Compensation Table is set forth
under Long-Term Incentive Plans, in
Compensation of Directors and Executive Officers.
None of these officers received an increase in the number of
units relative to the number they had been expecting to receive
under the superseded 2005-2006 SICO Plan.
Assurance Agreements
On June 27, 2005, AIG entered into definitive documentation
of AIGs agreement, subject to certain conditions, to
(1) make any payment or delivery of AIG Common Stock that
is not promptly made with respect to the benefits accrued by
current employees of AIG and its subsidiaries under historic
SICO Plans and
28
(2) make any payment to the extent not promptly made by
Starr with respect to amounts that become payable to current
employees of AIG and its subsidiaries who are also stockholders
of Starr after the giving of a notice of repurchase or
redemption under Starrs organizational documents. These
benefits will not be available to any employee terminated by AIG
for cause, as determined in the sole discretion of the Committee.
Historic Compensation Philosophy and 2004 Compensation of
Former CEO
The Committee made determinations regarding
Mr. Greenbergs 2004 compensation as Chairman and
Chief Executive Officer of AIG at its meetings on
December 16, 2004 and February 8, 2005. In each case,
the determinations were based on the Committees
understanding at such time of Mr. Greenbergs
activities and accomplishments during 2004 in relation to the
strategic plans and goals of AIG, and were not made with the
benefit of the information gained in the course of AIGs
subsequent internal review.
Historically, in determining appropriate compensation for the
CEO and other members of senior management, the Committees
starting point has been AIGs salary administration
philosophy, which has been to pay within a range that helps meet
business objectives while considering external and internal
influences and the level of funding allocated to employee
compensation. At senior positions, one of the objectives has
been to pay at a level that allows AIG to attract, retain and
motivate key executives by paying them competitively compared to
peers within a selected group of major companies in the
insurance industry while comparing AIGs performance to the
performance of those companies. In so doing, a variety of
factors were considered, including the performance of AIG
relative to those companies as measured by standards such as net
income and its growth over prior periods, return on equity and
property and casualty underwriting performance, the level of
compensation paid to senior officers within the selected group
of companies, and the level of individual contribution by
AIGs senior officers to the performance of AIG.
No specific formula was used to evaluate the various factors, in
determining the specific amount of compensation payable or in
determining the allocation of compensation to salary, bonus and
equity grants. The weight given to each factor with respect to
each element of compensation has been within the individual
discretion and judgment of each member of the Committee. Each
member has also taken the appropriateness of the entire package
into account when evaluating each element of compensation.
Decisions regarding Mr. Greenbergs annual cash bonus
were finalized at the February meeting, where the Committee
reviewed the accomplishments of the Chief Executive Officer as
they understood them at the time. The Committee determined that
a significant increase over the $6,500,000 annual bonus paid in
2003 would be appropriate and determined it would be appropriate
to award $8,000,000 for his performance in 2004 (the maximum
amount permitted under AIGs Chief Executive Officer Annual
Compensation Plan).
Decisions regarding 2004 option grants were made at the December
meeting. The Committee noted that there had been a supplemental
grant of options in 2003 that in most cases had doubled the
number of shares customarily granted to executive officers. The
Committee determined that it was appropriate to limit the
options granted to customary levels and
Mr. Greenbergs grant was reduced to options with
respect to 375,000 shares of AIG Common Stock rather than the
750,000 shares granted in 2003.
2004 Compensation of Other Senior Executive Officers
The Committee determined bonuses and option grants for 2004 and
base salaries and supplementary bonus levels for 2005 for other
senior executive officers at the time on the basis of factors
similar for those used in determining Mr. Greenbergs
compensation, as discussed above.
29
Deductibility of Compensation
Section 162(m) of the Code places a limit on the tax
deduction for compensation in excess of $1 million paid to
the chief executive officer and four most highly compensated
officers of a corporation in a taxable year. Compensation that
is considered qualified performance-based
compensation generally does not count toward this limit.
For 2004, the bonus compensation paid to Mr. Greenberg and
the options granted to Mr. Greenberg and the other four
officers are qualified performance-based
compensation and expected to be deductible notwithstanding
the $1 million limit. Other compensation above
$1 million to these executives did not qualify and
therefore was not deductible.
The Committee believes that it is necessary and in the best
interests of AIGs shareholders to forego some tax
deduction in order to attract and retain outstanding executive
talent. This is particularly the case at this time. It is
expected that certain of the compensation under the new
employment agreements and under the 2005-2006 Plan may not
qualify as performance-based compensation. The
Committee determined that its concerns regarding motivating and
retaining executive talent in the current environment outweighed
the benefit of complying with the requirements of
Section 162(m).
|
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Compensation Committee |
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American International Group, Inc. |
|
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Marshall A. Cohen |
|
William S. Cohen |
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Frank J. Hoenemeyer |
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Richard C. Holbrooke |
30
Report of the Audit Committee
The Audit Committees function, as provided in the Audit
Committee charter, is to assist the Board of Directors in its
oversight of:
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the integrity of AIGs financial statements, |
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AIGs compliance with legal and regulatory requirements, |
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the independent accountants qualifications, independence
and performance, and |
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the performance of AIGs internal audit function. |
The Committees charter is available on AIGs
corporate website, at www.aigcorporate.com.
During 2004, the Audit Committee was comprised of
Mrs. Hills and Messrs. Aidinoff, Chia, Hoenemeyer and Zarb.
On May 18, 2005, Messrs. Miles and Offit were named to
the Audit Committee. The Audit Committee chair is Mr.
Hoenemeyer. The Board of Directors, upon the recommendation of
the Nominating and Corporate Governance Committee, has
determined that all members of the Committee are independent, as
required by NYSE listing standards and the SEC rules. The Board
of Directors has also determined, upon the recommendation of the
Nominating and Corporate Governance Committee, that all members
of the Committee are financially literate, as defined by NYSE
listing standards, and that Mr. Hoenemeyer is an audit
committee financial expert and has accounting or related
financial management expertise, as defined by the SEC rules and
NYSE listing standards, respectively. Although designated as an
audit committee financial expert, Mr. Hoenemeyer is not an
accountant for AIG and, under the SEC rules, is not an
expert for purposes of the liability provisions of
the Securities Act or for any other purpose. Mr. Hoenemeyer
does not have any responsibilities or obligations in addition to
those of the other audit committee members; all audit committee
members have the identical duties and responsibilities.
In connection with the preparation of AIGs Annual Report
on Form 10-K for the year ended December 31, 2004,
AIGs current management initiated an internal review of
AIGs books and records, which was substantially expanded
in mid-March 2005. The review was conducted under the direction
of senior management with the oversight of the Audit Committee
and was complemented by investigations by outside counsel for
AIG and for the Audit Committee. PricewaterhouseCoopers LLP,
AIGs independent registered public accounting firm, was
consulted on the scope of the internal review and reviewed the
results of the internal review.
This review culminated in the restatement of AIGs
financial results, a delay in AIG filing its Annual Report on
Form 10-K for the year ended December 31, 2004 and its
Quarterly Report on Form 10-Q for the quarter ended
March 31, 2005, and the conclusion that there were several
material weaknesses in AIGs internal control over
financial reporting. In light of these events, AIG has taken the
following actions consistent with the recommendation of the
Audit Committee:
New Senior Management. AIG appointed a new Chief
Executive Officer and a new Chief Financial Officer, who,
together with other senior executives, are committed to
achieving transparency and clear communication with all
stakeholders through effective corporate governance, a strong
control environment, high ethical standards and financial
reporting integrity.
Chief Risk Officer. AIG has strengthened the position of
Chief Risk Officer, responsible for enterprise-wide credit,
market and operation risk management and oversight. The Chief
Risk Officer is empowered to work more closely with top
corporate and business area level executives to identify,
assess, quantify and manage risks. AIG has established an
Operational Risk Management department, reporting to the Chief
Risk Officer, to engage in expanded self-assessment processes
for more effective management of operational and reputational
risk.
Financial Disclosure Committee. AIG intends to establish
a Financial Disclosure Committee to assist Messrs. Sullivan
and Bensinger in fulfilling their responsibilities for oversight
of the accuracy and timeliness of AIGs disclosures.
31
Complex Structured Finance Transaction Committee. AIG has
expanded the scope and activities of the Complex Structured
Finance Transaction Committee to include the review and approval
of AIGs accounting and financial reporting of identified
transactions, including related party transactions.
Other Initiatives. AIG is also actively:
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developing procedures to ensure that risk transfer will be
properly evaluated and contemporaneously documented; |
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establishing processes and controls to ensure that
reconciliations are performed; |
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evaluating alternative approaches to ensure that hedge
accounting requirements are met; and |
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enhancing controls over deferred tax reporting. |
The Audit Committee is focused on AIG remediating the identified
material weaknesses in internal control over financial reporting
and implementing new controls to ensure a proper control
environment. The Committee has been very active in its oversight
of the internal investigation, as well as in reviewing the
proposed remediation strategies.
In the performance of its oversight function, the Committee has
considered and discussed the audited financial statements with
management and PricewaterhouseCoopers LLP. The Committee has
also discussed with PricewaterhouseCoopers LLP the matters
required to be discussed by Statement on Auditing Standards
No. 61, Communication with Audit Committees, as currently
in effect. Finally, the Committee has received the written
disclosures and the letter from PricewaterhouseCoopers LLP
required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees, as currently in
effect, and has discussed with PricewaterhouseCoopers LLP its
independence.
Based upon the reports and discussions described in this report
and the role and responsibilities of the Audit Committee
described in the Audit Committee Charter, the Audit Committee
recommended to the Board, and the Board approved, that the
audited financial statements for the fiscal year ended
December 31, 2004 be included in AIGs Annual Report
on Form 10-K filed with the SEC. The Audit Committee is
recommending the appointment of PricewaterhouseCoopers LLP as
AIGs independent registered public accounting firm for the
fiscal year ended December 31, 2005.
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Audit Committee |
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American International Group, Inc.* |
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M. Bernard Aidinoff |
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Pei-yuan Chia |
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Carla A. Hills |
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Frank J. Hoenemeyer |
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Frank G. Zarb |
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* |
Messrs. Miles and Offit were appointed members of the Audit
Committee on May 18, 2005. |
32
Report of the Nominating and Corporate Governance
Committee
The role of the Corporate Governance and Nominating Committee,
comprised of Mrs. Hills and Messrs. Aidinoff, Marshall
Cohen and Zarb, is to identify individuals qualified to become
Board members and recommend individuals to the Board for
nomination as members of the Board and its committees, advise
the Board on corporate governance matters and oversee the
evaluation of the Board. The Board of Directors has determined
that each member of the Committee is independent, as required by
the NYSE listing standards. The Committees charter is
available on AIGs corporate website, at
www.aigcorporate.com.
The Committee, along with the Board of Directors, determined
that Mrs. Hills and Messrs. Aidinoff, Chia, Marshall Cohen,
William Cohen, Feldstein, Hammerman, Hoenemeyer, Holbrooke,
Miles, Offit and Zarb are independent within the meaning of NYSE
listing standards and, in the case of Audit Committee members,
the SEC rules as well. The Committee also determined that all
Audit Committee members were financially literate and that
Mr. Hoenemeyer is an audit committee expert for purposes of
SEC rules and has accounting or related financial management
expertise for purposes of NYSE listing standards. Although
designated as an audit committee financial expert,
Mr. Hoenemeyer is not an accountant for AIG and, under the
SEC rules, is not an expert for purposes of the
liability provisions of the Securities Act or for any other
purpose. Mr. Hoenemeyer does not have any responsibilities
or obligations in addition to those of the other audit committee
members; all audit committee members have the identical duties
and responsibilities. The Nominating and Corporate Governance
Committee has recommended that Mr. Offit be named Chairman of
the Audit Committee upon Mr. Hoenemeyers retirement
from the Board at the Annual Meeting.
The Committee has worked with the Board of Directors and
management to improve the governance structures in place at AIG
in order to address deficiencies in the control environment
prevailing at the end of 2004 and to ensure greater
transparency. Among other initiatives, at the recommendation of
the Committee, the Board appointed three new independent,
outside directors, Messrs. Hammerman, Miles and Offit, and
established a new Regulatory, Compliance and Legal Committee to
provide oversight of AIGs compliance with applicable laws
and regulations. The Board of Directors, also at the
recommendation of the Committee, reconstituted its Executive
Committee on April 21, 2005 to emphasize input from members
of the Board of Directors represented on committees specifically
focused on governance issues.
The Committee has also focused on ensuring that AIG sets an
appropriate tone at the top. In connection with this
effort, AIG enhanced its Code of Conduct for employees, mandated
that all employees complete formal ethics training and
implemented a Director, Executive Officer and Senior Financial
Officer Code of Business Conduct and Ethics to provide
reasonable assurance that all members of the Board of Directors,
executive officers and senior financial officers adhere to the
stated principles and procedures set forth in that Code. At the
Committees recommendation, AIG is developing a corporate
level compliance framework, including implementation of
compliance programs at AIGs major business areas.
The Committee continues to monitor the progress of the Board of
Directors and management in implementing its governance
initiatives, including the process of self assessment by the
Board and each of the Committees, and will continue to explore
further avenues for strengthening internal controls. The
Committee also recommended and the Board approved in June 2005,
changes in AIGs By-Laws and Governance Guidelines to
reflect the Boards current belief that the Chairman should
be an independent director and that at least two-thirds of the
directors should be independent under NYSE listing standards.
The Committee has recommended and the Board plans to adopt a
policy of holding bi-monthly meetings commencing in 2006.
33
The Committee approved and recommended to the Board of Directors
the director nominees standing for election at the Annual
Meeting, based on the criteria set forth in AIGs Corporate
Governance Guidelines.
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Nominating and Corporate Governance |
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Committee |
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American International Group, Inc. |
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M. Bernard Aidinoff |
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Marshall A. Cohen |
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Carla A. Hills |
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Frank G. Zarb |
34
Performance Graph
The following Performance Graph compares the cumulative total
shareholder return on AIG Common Stock for a five-year period
(December 31, 1999 to December 31, 2004) with the
cumulative total return of the Standard & Poors
500 stock index (which includes AIG) and a peer group of
companies (the Peer Group) consisting of eight
insurance companies to which AIG compares its business and
operations: Allstate Corporation, Chubb Corporation, CNA
Financial Corporation, Hartford Financial Services Group, Inc.
(formerly known as ITT Hartford Group, Inc.), Lincoln National
Corporation, MetLife Inc., Prudential Financial Inc. and The St.
Paul Companies, Inc. Dividend reinvestment has been assumed and,
with respect to companies in the peer group, the returns of each
such company have been weighted to reflect relative stock market
capitalization.
FIVE YEAR CUMULATIVE TOTAL RETURNS
Value of $100 Invested on December 31, 1999
TOTAL SHAREHOLDER RETURNS
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1999 | |
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2000 | |
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2001 | |
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2002 | |
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2003 | |
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2004 | |
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AIG
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100.00 |
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136.97 |
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110.56 |
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80.78 |
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92.91 |
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92.43 |
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S&P 500
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100.00 |
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90.90 |
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80.09 |
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62.39 |
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80.29 |
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89.03 |
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Peer Group
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100.00 |
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154.97 |
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133.13 |
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118.28 |
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147.96 |
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179.46 |
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35
RATIFICATION OF SELECTION OF ACCOUNTANTS
The Audit Committee and the Board of Directors have approved the
engagement of PricewaterhouseCoopers LLP as AIGs
independent registered public accounting firm for 2005.
Representatives of that firm are expected to be present at the
Annual Meeting with an opportunity to make a statement if they
desire to do so and to be available to respond to appropriate
questions.
Ratification of the selection of accountants requires approval
by a majority of the shares of AIG Common Stock present and
entitled to vote at the meeting. Neither AIGs Restated
Certificate of Incorporation, as amended, nor By-Laws require
that the shareholders ratify the selection of
PricewaterhouseCoopers LLP as its independent registered public
accounting firm. AIGs Board is requesting shareholder
ratification as a matter of good corporate practice. If the
shareholders do not ratify the selection, the Audit Committee
will reconsider whether or not to retain PricewaterhouseCoopers
LLP, but may still retain PricewaterhouseCoopers LLP. Even if
the selection is ratified, the Audit Committee in its discretion
may change the appointment at any time during the year if it
determines that such change would be in the best interests of
AIG and its shareholders.
Under the policy for pre-approval of audit and permitted
non-audit services by PricewaterhouseCoopers LLP, the Audit
Committee approves categories of services and fee caps for each
category. The pre-approved services include: audit services,
such as financial statement audits, regulatory filings and
attestation services; audit-related services, such as employee
benefit plan audits, due diligence, control reviews and GAAP
consultations; tax services, such as tax compliance and
consulting, transfer pricing, customs and duties and expatriate
tax services; and other permitted non-audit services, such as
information resources and training. No expenditure may exceed
the dollar caps without the separate specific approval of the
Audit Committee.
Fees Paid to Independent Registered Public Accounting Firm
The following table shows information about fees paid by AIG to
PricewaterhouseCoopers LLP.
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2004 | |
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2003 | |
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(in millions) | |
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(in millions) | |
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Fees paid by AIG:
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Audit fees(a)
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$ |
66.7 |
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$ |
33.7 |
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Audit-related fees(b)
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1.4 |
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2.2 |
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Tax fees(c)
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6.9 |
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7.0 |
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All other fees(d)
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2.7 |
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1.9 |
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(a) |
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Includes in 2004 fees related to the audit of the consolidated
financial statements, including restatements included therein,
and Managements Report on Internal Control over Financial
Reporting included in AIGs Annual Report on Form 10-K
for the year ended December 31, 2004. |
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(b) |
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Audit-related fees are fees in respect of assurance and related
services that are traditionally performed by independent
accountants, including: employee benefit plan audits; due
diligence related to mergers and acquisitions; accounting
consultations and audits in connection with acquisitions;
internal control reviews; and consultation concerning financial
accounting and reporting standards. |
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(c) |
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Tax fees are fees in respect of tax return preparation and
consultation on tax matters (including tax return preparation
and consultation on tax matters for expatriate employees), tax
advice relating to transactions and other tax planning and
advice. |
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(d) |
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All other fees include: assistance with information technology;
providing access to information resources; training; reports on
internal controls pursuant to SAS 70; and compliance
reviews under AIMR. |
The services provided by PricewaterhouseCoopers LLP and the fees
paid by AIG were authorized and approved by the Audit Committee
in compliance with the pre-approval policy and procedures
described above. None of the non-audit services performed by
PricewaterhouseCoopers LLP were approved under the SECs de
minimis exception to audit committee pre-approval.
Your Board of Directors recommends a vote FOR the proposal
to ratify the selection of PricewaterhouseCoopers LLP.
36
SHAREHOLDER PROPOSALS FOR 2006 ANNUAL MEETING
All suggestions from shareholders are given careful attention.
Proposals intended for inclusion in next years Proxy
Statement pursuant to SEC Rule 14a-8 should be sent to the
Secretary of AIG at 70 Pine Street, New York, New York
10270 and must be received by December 5, 2005. Under the
AIG By-Laws, notice of any other shareholder proposal or the
nomination of a candidate for election as a director to be made
at the 2006 Annual Meeting of Shareholders must be received not
less than 90 nor more than 120 days prior to
August 11, 2006 unless the 2006 Annual Meeting is not
scheduled to be held on a date between July 12, 2006 and
September 10, 2006, in which case notice must be received
no less than the later of 90 days prior to the date on
which such meeting is scheduled or 10 days after the date
on which such meeting date is first publicly announced. A copy
of the current AIG By-Laws may be obtained from the Secretary of
AIG.
OTHER MATTERS
Your Board of Directors knows of no other matters to be
presented at the meeting. If any other matters properly come
before the meeting, it is the intention of the persons named in
the accompanying proxy form to vote the proxy in accordance with
their judgment on such matters.
Incorporation by Reference
To the extent that this Proxy Statement has been or will be
specifically incorporated by reference into any other filing by
AIG under the Securities Act or the Securities Exchange Act of
1934, as amended, the sections of this Proxy Statement entitled
Report of the Compensation Committee on Executive
Compensation, Report of the Audit Committee
(to the extent permitted by the SEC rules), Report of the
Nominating and Corporate Governance Committee,
Performance Graph and the appendices to the Proxy
Statement, shall not be deemed to be so incorporated, unless
specifically otherwise provided in such filing.
Important Notice Regarding Delivery of Shareholder
Documents
In accordance with a notice sent to certain shareholders of AIG
Common Stock who hold AIG Common Stock through a broker or
otherwise through a nominee and who share a single address, only
one copy of this Notice of Annual Meeting of Shareholders and
Proxy Statement and AIGs 2004 Annual Report to
Shareholders is being sent to that address unless AIG receives
contrary instructions from any shareholder at that address. This
practice, known as householding, is designed to
reduce printing and postage costs. However, if any shareholder
residing at such address wishes to receive a separate copy of
this Notice of Annual Meeting and Proxy Statement or AIGs
Annual Report to Shareholders, he or she may contact the AIG
Director of Investor Relations at 70 Pine Street, New York,
New York 10270, 212-770-6293, and AIG will deliver those
documents to such shareholder promptly upon receiving the
request. Any such shareholder may also contact the AIG Director
of Investor Relations if he or she would like to receive
separate proxy materials and annual reports in the future. If a
shareholder receives multiple copies of AIGs proxy
materials and annual reports, he or she may request householding
in the future by contacting the AIG Director of Investor
Relations.
Proxy Solicitation
AIG will bear the cost of this solicitation of proxies. Proxies
may be solicited by mail, personal interview, telephone and
facsimile transmission by directors, their associates, and
approximately eight officers and regular employees of AIG and
its subsidiaries. In addition to the foregoing, AIG has retained
Georgeson Shareholder Communications Inc. to assist in the
solicitation of proxies for a fee of approximately $12,500 plus
reasonable out-of-pocket expenses and disbursements of that
firm. AIG has retained MacKenzie Partners, Inc. to provide
advisory services in connection with proxy solicitation and
Innisfree M&A Incorporated as a special investor relations
advisor. These firms will receive reasonable and customary fees
based on services provided. AIG will also reimburse brokers and
others holding AIG Common Stock in their names, or in the names
of nominees, for forwarding proxy materials to their principals.
37
APPENDIX A
AMERICAN INTERNATIONAL GROUP, INC.
CORPORATE GOVERNANCE GUIDELINES
1. Introduction
The Board of Directors (the Board) of American
International Group, Inc. (together with its subsidiaries,
AIG), acting on the recommendation of its Nominating
and Corporate Governance Committee, has developed this set of
corporate governance guidelines (Guidelines) to
promote the effective functioning of the Board and its
committees, to promote the interests of shareholders and to set
forth a common set of expectations as to how the Board, its
various committees, individual directors, and management should
perform their functions. These Guidelines are designed with
AIGs current business operations, ownership, capital
structure, and economic conditions in mind.
II. Roles of Board and Management
The roles of the Board and management are related, but distinct.
AIGs business strategy is implemented by its officers and
other employees, under the direction of the chief executive
officer (CEO). Management reports regularly to the
Board on significant events, issues, and risks which may
materially affect AIGs business or financial performance.
The Boards function is one of oversight. The Board reviews
and discusses reports by management with respect to AIGs
performance, as well as significant issues facing AIG. In
addition to its general oversight function, the Board, directly
and through its committees, oversees AIGs business and
management in accordance with these Guidelines.
III. Board Composition
The size of the Board should balance the following goals:
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The size of the Board should facilitate substantive discussions
by the whole Board in which each director can participate
meaningfully. |
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The composition of the Board should encompass a broad range of
skills, expertise, industry knowledge and diversity of opinion. |
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A two-thirds majority of the Board shall consist of directors
who are, under the New York Stock Exchange, Inc.
(NYSE) listing standards, independent in
the business judgment of the Board (Independent
Directors). |
IV. Selection of Chairman of the Board and Chief
Executive Officer
The Board is free to select its Chairman and the CEO in the
manner it considers to be in the best interests of AIG at any
given point in time. At the current time, the policy of the
Board, reflected in the By-Laws, is that the role of Chairman
should be separate from that of the CEO and the Chairman should
be selected from the Independent Directors.
V. Selection of Directors
The Nominating and Corporate Governance Committee is responsible
for recommending a slate of directors to the Board for election
at the annual meeting of shareholders, or one or more nominees
to fill vacancies occurring between annual meetings of
shareholders.
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Nominations. The Board shall, based on the
recommendations of the Nominating and Corporate Governance
Committee, select nominees for the position of director
considering the following criteria: |
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High personal and professional ethics, values and integrity; |
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Ability to work together as part of an effective, collegial
group; |
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Commitment to representing the long-term interests of AIG; |
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Skill, diversity, background, and experience with businesses and
other organizations that the Board deems relevant; |
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The interplay of the individuals experience with the
experience of other Board members, and the extent to which the
individual would be a desirable addition to the Board and any
committees of the Board; and |
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Ability and willingness to commit adequate time to AIG over an
extended period of time. |
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Shareholder Nominations. Shareholders may propose
nominees for consideration by the Nominating and Corporate
Governance Committee by submitting names and supporting
information to: Chairperson, Nominating and Corporate Governance
Committee, c/o Secretary, American International Group, Inc.,
70 Pine Street, New York, NY 10270. |
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The Nominating and Corporate
Governance Committee shall give appropriate consideration to
candidates for Board membership proposed by shareholders and
shall evaluate such candidates in the same manner as other
candidates identified to the Nominating and Corporate Governance
Committee.
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Committee Evaluation. The Nominating and Corporate
Governance Committee shall discuss and evaluate possible
candidates in detail prior to recommending them to the Board.
The Nominating and Corporate Governance Committee shall also be
responsible for initially assessing whether a candidate would be
an Independent Director. The Board, taking into consideration
the assessment of the Nominating and Corporate Governance
Committee, shall determine whether a nominee or appointee would
be an Independent Director. |
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Orientation. Management, working with the Board, will
provide an orientation process for new directors, including
background material on AIG, its business plan and its risk
profile, and meetings with senior management. Periodically,
management should prepare additional orientation sessions for
directors on matters relevant to AIG, its business plan and risk
profile. |
VI. Election, Term and Retirement of the Directors
Directors hold office until the AIG Annual Meeting of
Shareholders next succeeding his or her election and until a
successor is elected and qualified or until his or her earlier
resignation or removal. The Board does not believe it should
establish term limits or a mandatory retirement age.
VII. Board Meetings
The Board currently plans at least four regular meetings each
year, with further meetings to occur (or action to be taken by
unanimous written consent), at the discretion of the Board.
The agenda for each Board meeting will be prepared by the
Chairman and CEO. Any director may suggest the inclusion of
additional subjects on the agenda. The agenda for each committee
meeting shall be established by the respective committee
chairperson. Management will endeavor to provide all directors
an agenda and appropriate materials in advance of meetings,
although the Board recognizes that this will not always be
consistent with the timing of transactions, the operations of
the business and, in certain cases, it may not be desirable to
circulate materials in advance of the meeting. Materials
presented to the Board or its committees should be as concise as
practicable but consistent with the need to provide the
information needed for the directors to make an informed
judgment and engage in informed discussion.
VIII. Executive Sessions
To ensure free and open discussion and communication among the
non-management directors of the Board, the non-management
directors will meet at least four times a year in executive
sessions, with no members of management present. The
non-management directors will designate the director who will
preside at the executive sessions. Non-management directors who
are not Independent Directors may participate in these executive
sessions, but Independent Directors shall meet separately in
executive session at least once per year.
IX. The Committees of the Board
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Committees. The Board will have at least the following
five committees: Audit Committee, Compensation Committee,
Executive Committee, Finance Committee, and Nominating and
Corporate Governance Committee. The Audit Committee, the
Compensation Committee, and the Nominating and Corporate
Governance Committee must each have a written charter satisfying
the rules of the NYSE. The Audit Committee must also satisfy the
requirements of Securities and Exchange Commission
(SEC) Rule 10A-3. Each committee chair will give a report
periodically on his or her committees activities to the
Board.
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Composition of the Committees. The Audit Committee, the
Compensation Committee, and the Nominating and Corporate
Governance Committee will each be composed of at least three
directors all of whom are, in the business judgment of the
Board, Independent Directors. The required qualifications for
the members of each committee are set out in the respective
committees charter. A director may serve on more than one
committee for which he or she qualifies. |
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Board Responsibilities |
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Management Succession. The Board shall review and
consider the management succession plan, developed by the CEO,
to ensure that future selections are appropriately considered.
The principal components of this plan, on which the CEO will
report at least annually to the Board, are: |
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A proposed plan for CEO succession, both in an emergency
situation and in the ordinary course of business; and |
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The CEOs plan for management succession for the other
policy-making officers of AIG. |
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Evaluating and Approving Salary for the CEO. The
Board, acting through the Compensation Committee, evaluates the
performance of the CEO against AIGs goals and objectives
and approves the compensation level of the CEO. |
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Compensation Programs. The Compensation Committee
makes recommendations to the Board with respect to
(1) AIGs general compensation philosophy,
(2) the compensation programs applicable to senior
executives of AIG and (3) other employee compensation. |
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Board Compensation. The Nominating and Corporate
Governance Committee shall periodically review and make
recommendations to the Board regarding the form and amount of
Board compensation. The Board shall set the form and amount of
director compensation, taking into account the recommendations
of the Committee. Only non-management directors shall receive
compensation for services as a director. To create a direct
linkage with corporate performance, the Board believes that a
meaningful portion of a directors compensation should be
provided and held in the common stock of AIG and other types of
equity-based compensation. |
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Reviewing and Approving Significant
Transactions. Board approval of a particular
transaction may be appropriate because of several factors,
including: |
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legal or regulatory requirements; |
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the materiality of the transaction to AIGs finance
performance, risk profile or business; |
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the terms of the transaction; or |
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other factors, such as entry into a new business or a
significant variation from AIGs strategic plan. |
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To the extent that the Board
determines it to be appropriate, the Board shall develop
standards to be utilized by management in determining the types
of transactions that should be submitted to the Board for review
and approval or notification.
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XI. Expectations of Directors
The business and affairs of AIG shall be managed by or under the
direction of the Board in accordance with Delaware law. In
performing their duties, the primary responsibility of the
directors is to exercise their business judgment in the best
interests of AIG. The Board has developed a number of specific
expectations of directors to promote the discharge of this
responsibility and the efficient conduct of the Boards
business.
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Commitment and Attendance. All directors should make
every effort to attend every meeting of the Board and every
meeting of committees of which they are members. Directors are
expected to attend the annual meeting of shareholders. |
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Participation in Meetings. Each director should be
sufficiently familiar with the business of AIG, including its
financial statements and capital structure, and the risks and
the competition it faces, to facilitate active and effective
participation in the deliberations of the Board and of each
committee on which he or she serves. Upon request, management
will make appropriate personnel available to answer any
questions a director may have about any aspect of AIGs
business. |
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Loyalty and Ethics. In their roles as directors, all
directors owe a duty of loyalty to AIG. This duty of loyalty
mandates that the best interests of AIG take precedence over any
interests possessed by a director. |
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AIG has adopted a Director,
Executive Officer and Senior Financial Officer Code of Business
Conduct and Ethics. Directors should be familiar with the
Codes provisions and should consult with AIGs
counsel in the event of any issues that arise with respect to
the matters set forth in the Code.
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Other Directorships. AIG values the experience
directors bring from other boards on which they serve, but
recognizes that those boards also present significant demands on
a directors time and availability and may present
conflicts and legal issues. Directors should advise the Chairman
of the Nominating and Corporate Governance Committee and the CEO
before accepting membership on other boards of directors or
other significant commitments involving affiliation with other
businesses or governmental units. |
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Contact with Management. All directors are invited
to contact the CEO at any time to discuss any aspect of
AIGs business. Directors also have complete access to
other members of management. The Board expects that there will
be frequent opportunities for directors to meet with the CEO and
other members of the management in Board and committee meetings,
or in other formal and informal settings. |
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Further, the Board encourages
management to, from time to time, bring managers into Board
meetings who (a) can provide additional insight into the
items being discussed because of personal involvement and
substantial knowledge in those areas and/or (b) are
managers with future potential that the senior management
believes should be given exposure to the Board.
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F. |
Board Interaction with Institutional Investors and the
Press. It is important that AIG speak to employees and
outside constituencies with a single voice and that management
serve as the primary spokesperson. If a situation does arise in
which it seems necessary for a non-management director to speak
on behalf of AIG, the director should consult with the CEO. |
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G. |
Confidentiality. The proceedings and deliberations
of the Board and its committees are confidential. Each director
shall maintain the confidentiality of all information received
in connection with his or her service as a director. |
A-3
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XII. |
Communications with the Board of Directors |
Security holders may communicate directly with one or more
directors by writing to them c/o Secretary, American
International Group, Inc., 70 Pine Street, New York,
NY 10270.
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XIII. |
Evaluating Board Performance |
The Board, acting through the Nominating and Corporate
Governance Committee, shall conduct a self-evaluation at least
annually to determine whether it is functioning effectively.
The Nominating and Corporate Governance Committee shall
periodically consider the mix of skills and experience that
directors bring to the Board to assess whether the Board has the
necessary tools to perform its oversight function effectively.
The Audit Committee, the Compensation Committee, and the
Nominating and Corporate Governance Committee shall each conduct
an annual self-evaluation, as provided for in its respective
charter.
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XIV. |
Reliance on Management and Outside Advice |
In performing its functions, the Board is entitled to rely on
the advice, reports and opinions of management, counsel,
accountants, auditors and other expert advisors. The Board shall
have the authority to retain and approve the fees and retention
terms of its outside advisors.
Approved: June 16, 2005
A-4
APPENDIX B
AMERICAN INTERNATIONAL GROUP, INC.
DIRECTOR INDEPENDENCE STANDARDS
Pursuant to the New York Stock Exchange (NYSE)
listing standards, a director having any of the following
relationships shall be deemed to have a material
relationship1
with
AIG2
and shall not be considered independent:
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The director is, or has been within the last three years, an
employee of AIG or an immediate family
member3
is, or has been within the last three years, an executive
officer4
of
AIG.5 |
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The director has received, or has an immediate family member who
has received, during any twelve-month period within the last
three years, more than $100,000 in direct compensation from AIG,
other than director and committee fees and pension or other
forms of deferred compensation for prior service (provided such
compensation is not in any way contingent on continued service)
and other than compensation received by an immediate family
member for service as a non-executive employee of
AIG.5 |
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(1) The director or an immediate family
member is a current partner of a firm that is AIGs
internal or external auditor; (2) the director is a current
employee of such a firm; (3) the director has an immediate
family member who is a current employee of such a firm and who
participates in the firms audit, assurance or tax
compliance (but not tax planning) practice; or (4) the
director or an immediate family member was within the last three
years (but is no longer) a partner or employee of such a firm
and personally worked on AIGs audit within that time. |
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The director or an immediate family member is, or has been
within the last three years, employed as an executive officer of
another company where any of AIGs present executive
officers at the same time serves or served on that
companys compensation committee. |
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The director is a current employee, or an immediate family
member is a current executive officer, of a company that has
made
payments6
to, or received payments from, AIG for property or services in
an amount which, in any of the last three fiscal years, exceeds
the greater of $1 million, or 2% of such other
companys consolidated gross revenues. |
The following relationships and transactions shall not be deemed
material for purposes of the NYSE listing standards. The fact
that a particular relationship or transaction is not addressed
by the below standards or exceeds the thresholds in these
standards shall not create a presumption that the director is or
is not independent.
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A relationship arising solely from a directors status as
an executive officer, employee or a greater than 10% equity
owner of a for-profit corporation or organization that has made
payments to or received payments from AIG so long as the
payments made or received during any of the past three fiscal
years are not in excess of the greater of $1 million or 2%
of the other companys consolidated gross revenues for the
fiscal year in which the payments were made (based on the other
companys most recently available financial statements). |
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A relationship arising solely from directors ownership of
10% or less of the equity interests in an entity that has a
relationship or engages in a transaction with AIG. |
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A relationship arising solely from a directors position as
a director or advisory director (or similar position) of another
for-profit or not-for-profit corporation or organization that
engages in a transaction with AIG or receives contributions from
AIG or The Starr Foundation. |
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A relationship arising solely from a directors affiliation
with a charitable organization as an executive officer that
receives contributions from AIG or The Starr Foundation, so long
as such contributions (other than employee matching
contributions) for a calendar year are not in excess of the
greater of $1 million or 2% of the organizations
consolidated gross revenues for the charitable
organizations most recent fiscal year for which financial
statements are publicly available. |
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The ownership by a director of equity securities of AIG, the
purchase of insurance, investment or other products or services
from AIG, or the maintenance of a brokerage or similar account
with AIG so long as the relationship or transaction is entered
into in the ordinary course of business and is on substantially
the same terms as those prevailing at the time for similarly
situated persons who are not directors of AIG. |
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Any other relationship or transaction that is not required to be
disclosed pursuant to Item 404(a) of Regulation S-K. |
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Any relationship or transaction with an immediate family member
of a director that would fall within one of the preceding
standards. |
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1 |
Such relationship may be either direct or as a partner,
shareholder or officer of an organization that has a
relationship with AIG. |
2 |
AIG shall refer to American International Group,
Inc. and its consolidated subsidiaries. |
3 |
Immediate family member includes a directors
spouse, parents, children, siblings, mothers-in-law,
fathers-in-law, sons-in-law, daughters-in-law, brothers-in-law,
sisters-in-law and anyone (other than domestic employees) who
shares the directors home. When applying the relevant
look-back provisions of the standards, individuals who are no
longer immediate family members as a result of legal separation
or divorce or those who have died or become incapacitated shall
not be considered. |
4 |
Executive officer shall refer to such entitys
president, principal financial officer, principal accounting
officer (or, if there is no such accounting officer, the
controller), any vice president of the entity in charge of a
principal business unit, division or function, any other officer
who performs a policy-making function, or any other person who
performs similar policy-making functions for the entity. |
5 |
Employment or compensation received by a director for former
service as an interim chairman or CEO does not need to be
considered as a factor by the board in determining independence
under this test. |
6 |
Contributions to tax exempt organizations are not considered
payments for purposes of this test. |
Approved: March 16, 2005
B-1
American International Group,
Inc.
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PRINTED ON RECYCLED PAPER |
FOLD AND DETACH HERE
American International Group, Inc.
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 11, 2005
This proxy is solicited by the Board of Directors.
The undersigned hereby appoints Martin J. Sullivan, Donald P. Kanak and Edmund S.W. Tse and each of
them, with full power to act without the other and with full power of substitution, as proxies to
represent and to vote, as directed on the reverse side hereof, all shares the undersigned is
entitled to vote at the Annual Meeting of Shareholders of American International Group, Inc. to be
held at 72 Wall Street, Eighth Floor, New York, New York, on Thursday, August 11, 2005 at 10:00
a.m., and at any adjournment or postponement thereof.
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
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HAS YOUR ADDRESS CHANGED?
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DO YOU HAVE ANY COMMENTS? |
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American International Group, Inc.
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8239
EDISON, NJ 08818-8239
Your vote is important. Please vote immediately.
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Vote-by-Internet |
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![(INTERNET)](y09671y0967119.gif) |
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OR |
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Vote-by-Telephone |
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![(PHONE)](y09671y0967120.gif) |
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Log on to the Internet and go to http://www.eproxyvote.com/aig |
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Call toll-free 1-877-PRX-VOTE (1-877-779-8683) |
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If you vote over the Internet or by telephone, please do not mail your card.
FOLD AND DETACH HERE
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Please mark your
votes as in this
example. |
Unless otherwise marked, the proxies are appointed with authority to vote FOR ALL nominees for
election, FOR Item 2 and in their discretion to vote upon other matters that may properly come
before the meeting.
The Board of Directors recommends a vote FOR ALL nominees in Item 1 and FOR Item 2.
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FOR
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WITHHELD |
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FOR
ALL
NOMINEES
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o
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WITHHELD
FROM ALL
NOMINEES |
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o |
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For, except vote
withheld from the nominee(s) indicated above |
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FOR |
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AGAINST |
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ABSTAIN |
(01) M. Aidinoff (02) P. Chia (03) M. Cohen |
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Ratification of Independent Accountants |
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(04) W. Cohen (05) M. Feldstein (06) E. Futter |
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(07) S. Hammerman (08) C. Hills (09) R. Holbrooke |
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(10) D. Kanak (11) G. Miles, Jr. (12) M. Offit |
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(13) M. Sullivan (14) E. Tse (15) F. Zarb |
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Mark here if you plan to attend the meeting
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Mark here if address change or comment has been noted on the reverse side of this card.
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o |
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Please sign exactly as name appears hereon. Joint tenants should each sign. When signing as
attorney, executor, administrator, trustee, guardian or other similar capacity, please give your
full title as such. If the signature is by a corporation, a duly authorized officer of the
corporation should sign in full the corporate name. If the signature is by a partnership, a partner
should sign the full partnership name. |
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Signature:
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Date:
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Signature:
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Date: |
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