AIG 2006 Annual Report Download - page 201

American International Group, Inc. and Subsidiaries
14. Stock Compensation Plans
Continued
The following table presents information about stock options outstanding at December 31, 2006:
Options Outstanding Options Exercisable
Weighted Weighted
Average Weighted Average Weighted
Remaining Average Aggregate Intrinsic Number Remaining Average Aggregate
Range of Number Contractual Exercise Values Exercisable Contractual Exercise Intrinsic Values
Exercise Prices Outstanding Life Price (in millions) (vested) Life Price (in millions)
$24.55-$26.45 3,077,376 0.82 $24.67 $144 3,077,376 0.82 $24.67 $144
$31.02-$41.51 5,198,823 1.58 36.91 181 5,198,823 1.58 36.91 181
$43.31-$53.40 6,665,147 3.83 48.59 154 5,900,494 3.53 48.80 135
$54.11-$59.99 8,314,413 4.07 57.86 115 6,780,399 3.01 57.52 96
$60.13-$63.95 8,766,329 5.94 62.33 82 7,547,511 5.77 62.12 72
$64.01-$69.63 8,034,276 6.82 65.45 50 4,948,364 5.75 65.53 30
$70.35-$98.00 7,599,356 5.53 81.36 1 5,930,703 4.40 84.06 —
Total 47,655,720 4.60 $57.99 $727 39,383,670 3.81 $56.81 $658
Vested and expected-to-vest options as of December 31, 2006, than performance RSUs granted under the AIG DCPPP and the AIG
included in the table above, totaled 45,382,149, with a weighted Partners Plan vest on the fourth anniversary of the date of grant.
average exercise price of $57.42, a weighted average contractual
life of 4.33 years and an aggregate intrinsic value of $720 million. Director Stock Awards
As of December 31, 2006, total unrecognized compensation The methodology used for valuing employee stock options is also
cost (net of expected forfeitures) was $133 million and $3 million used to value director stock options. Director stock options vest
related to non-vested share-based compensation awards granted one year after the grant date, but are otherwise the same as
under the 1999 Plan and the 1996 Plan, respectively, with employee stock options. Options with respect to 40,000 shares
blended weighted average periods of 1.44 years and 0.41 years, and 32,500 shares were granted during 2006 and 2005,
respectively. The cost of awards outstanding under these plans at respectively.
December 31, 2006 is expected to be recognized over approxi- AIG also granted 14,000 shares and 6,250 shares, with
mately three years and one year, respectively, for the 1999 Plan delivery deferred, to directors during 2006 and 2005, respec-
and the 1996 Plan. tively, under the Director Stock Plan. At December 31, 2006,
The intrinsic value of options exercised during 2006 was there were 71,000 shares reserved for future grants under the
approximately $215 million. The fair value of options vesting Director Stock Plan.
during 2006 was approximately $97 million. AIG received
$104 million and $65 million in cash during 2006 and 2005, Employee Stock Purchase Plan
respectively, from the exercise of stock options. The tax benefits
realized as a result of stock option exercises were $35 million AIG’s 1996 Plan provides that eligible employees (those employed
and $20 million for 2006 and 2005, respectively. at least one year) may receive privileges to purchase up to an
aggregate of 10,000,000 shares of AIG common stock, at a price
2002 Stock Incentive Plan equal to 85 percent of the fair market value on the date of the
grant of the purchase privilege. Purchase privileges are granted
The 2002 Plan was adopted at the 2002 Annual Meeting of quarterly and are limited to the number of whole shares that can
shareholders and amended and restated by the AIG Board of be purchased on an annual basis by an amount equal to the
Directors on September 18, 2002. The 2002 Plan provides that lesser of 10 percent of an employee’s annual salary or $10,000.
equity-based or equity-related awards with respect to shares of
common stock can be issued to employees in any year up to a SICO Plans
maximum of that number of shares equal to (a) 1,000,000 shares
plus (b) the number of shares available but not issued in the prior The SICO Plans provide that shares of AIG common stock
calendar year. The maximum award that a grantee may receive currently held by SICO are set aside for the benefit of the
under the 2002 Plan per year is rights with respect to participant and distributed upon retirement. The SICO Board of
250,000 shares. During 2006 and 2005, 6,836,785 RSUs, Directors currently may permit an early payout of shares under
including performance RSUs, and 3,055,835 RSUs, respectively, certain circumstances. Prior to payout, the participant is not
were granted by AIG. There were 4,488,458 shares reserved for entitled to vote, dispose of or receive dividends with respect to
issuance in connection with future awards at December 31, 2006. such shares, and shares are subject to forfeiture under certain
Substantially all RSUs granted to date under the 2002 Plan other
Form 10-K 2006 AIG 151