AIG 2007 Annual Report Download - page 242

American International Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements Continued
17. Share-based Employee Compensation Plans
Continued
The following table presents a summary of shares relating to outstanding awards unvested under the foregoing plans at
December 31, 2007, and changes for the year then ended*:
Number of Shares Weighted Average Grant-Date Fair Value
Total Total Total Total
Time-vested AIG Partners AIG SICO Time-vested AIG Partners AIG SICO
RSUs DCPPP Plan Plan Plans RSUs DCPPP Plan Plans Plans
Unvested at January 1, 2007 7,181,595 4,590,622 3,607,040 15,379,257 11,443,772 $66.56 $52.09 $56.50 $59.88 $61.72
Granted 4,752,738 — 2,547,620 7,300,358 — 57.90 — 53.93 56.51 —
Vested (168,214) (196,690) (550) (365,454) (1,691,306) 63.82 61.44 66.97 62.55 64.18
Forfeited (422,431) (173,472) (1,212,585) (1,808,488) (282,657) 65.34 53.25 56.83 58.47 59.93
Unvested at December 31,
2007 11,343,688 4,220,460 4,941,525 20,505,673 9,469,809 $63.01 $54.53 $55.08 $59.36 $61.27
* Options and DSUs awarded under the 2007 Plan are not included. For the AIG DCPPP, includes all incremental shares granted or to be granted.
The total unrecognized compensation cost (net of ex- In 2007, AIG acquired the outstanding minority interest of 21st
pected forfeitures) related to non-vested share-based Century. Assets, obligations and costs with respect to 21st
compensation awards granted under the 2002 Plan, the Century’s plans are included herein. The assumptions used by
2007 Plan, the AIG DCPPP, and the SICO Plans at 21st Century in its plans were not significantly different from
December 31, 2007 and the blended weighted-average those used by AIG in AIG’s U.S. plans.
periods over which those costs are expected to be AIG also sponsors several unfunded defined benefit plans for
recognized at December 31, 2007 are as follows: certain employees, including key executives, designed to supple-
ment pension benefits provided by AIG’s other retirement plans.
Blended These include the AIG Excess Retirement Income Plan, which
Unrecognized Weighted-
Compensation Average provides a benefit equal to the reduction in benefits payable to
(in millions) Cost Period certain employees under the AIG U.S. retirement plan as a result
of federal tax limitations on compensation and benefits payable,
Time-vested RSUs - 2002 Plan $218 1.35 years
and the Supplemental Executive Retirement Plan (Supplemental
Time-vested RSUs - 2007 Plan $209 2.05 years
Plan), which provides additional retirement benefits to designated
AIG DCPPP $146 5.47 years
executives. Under the Supplemental Plan, an annual benefit
Total AIG Plans $573 2.65 years
accrues at a percentage of final average pay multiplied by each
Total SICO Plans $249 5.93 years
year of credited service, not greater than 60 percent of final
The total cost for awards outstanding at December 31, 2007 average pay, reduced by any benefits from the current and any
under the 2002 Plan, the 2007 Plan, the AIG DCPPP and the predecessor retirement plans (including the AIG Excess Retire-
SICO Plans is expected to be recognized over approximately ment Income Plan and any comparable plans), Social Security, if
4 years, 4 years, 32 years and 32 years, respectively. any, and from any qualified pension plan of prior employers.
Postretirement Plans
18. Employee Benefits
AIG and its subsidiaries also provide postretirement medical care
Pension Plans and life insurance benefits in the U.S. and in certain
non-U.S. countries. Eligibility in the various plans is generally
AIG, its subsidiaries and certain affiliated companies, offer
based upon completion of a specified period of eligible service
various defined benefit plans to eligible employees based on
and attaining a specified age. Overseas, benefits vary by geo-
either completion of a specified period of continuous service or
graphic location.
date of hire, subject to age limitations.
U.S. postretirement medical and life insurance benefits are
AIG’s U.S. retirement plan is a qualified, noncontributory
defined benefit plan which is subject to the provisions of ERISA. based upon the employee electing immediate retirement and
U.S. employees who are employed by a participating company, having a minimum of ten years of service. Medical benefits are
have attained age 21 and completed twelve months of continuous contributory, while the life insurance benefits are non-contributory.
service are eligible to participate in this plan. Employees generally Retiree medical contributions vary with age and length of service
vest after 5 years of service. Unreduced benefits are paid to and range from requiring no cost for pre-1989 retirees to requiring
retirees at normal retirement (age 65) and are based upon a actual premium payments reduced by certain credits for post-
percentage of final average compensation multiplied by years of 1993 retirees. These contributions are subject to adjustment
credited service, up to 44 years. Non-U.S. defined benefit plans annually. Other cost sharing features of the medical plan include
are generally either based on the employee’s years of credited deductibles, coinsurance and Medicare coordination and a lifetime
service and compensation in the years preceding retirement, or on maximum benefit of $2 million.
points accumulated based on the employee’s job grade and other
factors during each year of service.
188 AIG 2007 Form 10-K