AIG 2005 Annual Report Download - page 168

Notes to Consolidated Financial Statements Continued
14. Stock Compensation Plans
Continued
In addition, at December 31, 2005, options to purchase
92,241 shares at a weighted average exercise price of $25.14
had been previously granted to AIG nonemployee directors
and remained outstanding.
Information about stock options outstanding at December 31, 2005, is summarized as follows:
Options Outstanding Options Exercisable
Weighted Weighted Weighted
Average Average Average
Number Remaining Exercise Number Exercise
Outstanding Contractual Life Price Exercisable Price
Range of Exercise Prices:
$11.28 – 27.14 6,900,520 1.3 years $21.38 6,900,520 $21.38
30.44 – 41.51 5,560,658 2.5 years 36.75 5,560,658 36.75
43.31 – 53.41 7,163,076 4.9 years 48.54 5,476,932 49.01
54.11 – 59.99 8,516,644 5.2 years 57.84 6,328,084 57.33
60.13 – 63.95 9,382,325 6.9 years 62.33 6,193,792 61.92
64.01 – 69.63 8,397,522 7.8 years 65.44 3,876,532 65.66
70.35 – 98.00 6,624,680 5.3 years 83.82 5,615,763 84.63
52,545,425 $54.84 39,952,281 $52.47
(b) 2002 Stock Incentive Plan: AIG’s 2002 Stock Incentive by an amount equal to 10 percent of an employee’s annual
Plan was adopted at its 2002 shareholders’ meeting and salary or $10,000, whichever is less. There were 359,750 shares,
amended and restated by the AIG Board of Directors on 922,999 shares and 516,904 shares issued under the 1996 plan
September 18, 2002. This plan provides that equity-based or at weighted average prices of $57.06, $46.41 and $48.03 for
equity-related awards with respect to shares of common stock the years ended December 31, 2005, 2004 and 2003, respec-
can be issued to officers, employees or members of the Board of tively. The excess or deficit of the proceeds over the par value
Directors of AIG in any year up to a maximum of that number or cost of the common stock issued was credited or charged to
of shares equal to (a) 1,000,000 shares plus (b) the number of additional paid-in capital.
shares available but not issued in the prior calendar year. As of December 31, 2005, there were 1,045,329 shares of
Under the Plan, no grantee may receive awards covering more common stock subscribed to at a weighted average price of
than 250,000 shares of common stock. During 2005 and 2004, $50.91 per share pursuant to grants of privileges under the
AIG granted restricted stock units (RSUs) relating to 1996 plan. There were 3,689,063 shares available for the grant
3,055,835 shares and 992,481 shares of common stock to of future purchase privileges under the 1996 Plan at Decem-
employees, respectively. These RSUs will vest on the fourth ber 31, 2005.
anniversary of the date of grant assuming continued employ- As a result of its changing relationship with Starr and
ment through such date. See Note 1(gg) herein for discussion SICO, AIG is establishing new executive compensation plans
of prospective change in AIG’s accounting for retiree eligibility which replace existing investment opportunities and deferred
provisions. AIG reserves the right to make payment for the compensation plans provided by Starr and SICO. The replace-
RSUs in shares of common stock or the cash equivalent on the ment plans include both share-based plans as well as cash-
date of vesting. AIG shares delivered under the AIG DCPPP based plans. The share-based plans generally include perform-
will be issued pursuant to the 2002 Stock Incentive Plan. At ance as well as service conditions.
December 31, 2005, there were 14,675,635 shares of common
stock reserved for issuance in connection with future grants of 15. Employee Benefits
awards under the Plan. (a) Pension Plans: Employees of AIG, its subsidiaries and
(c) Employee Stock Purchase Plan: AIG’s 1996 Employee certain affiliated companies, including employees in foreign
Stock Purchase Plan, as amended and approved by AIG countries, are generally covered under various funded, un-
shareholders in 2003 (the 1996 Plan), provides that eligible funded and insured pension plans. Eligibility for participation
employees (those employed at least one year) may receive in the various plans is based on either completion of a
privileges to purchase up to an aggregate of 10,000,000 shares specified period of continuous service or date of hire, subject to
of AIG common stock, at a price equal to 85 percent of the age limitations. Some AIG subsidiaries provide retirement
fair market value on the date of the grant of the purchase benefits through defined benefit plans, others employ defined
privilege. Purchase privileges are granted annually and are contribution plans and some use both.
limited to the number of whole shares that can be purchased
116 AIG m Form 10-K