AIG 2008 Annual Report Download - page 307

Employee Stock Purchase Plan
AIG’s 1996 Plan provides that eligible employees (those employed 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 equal to 85 percent of the fair
market value on the date of the grant of the purchase privilege. Purchase privileges are granted quarterly and are
limited to the number of whole shares that can be purchased on an annual basis by an amount equal to the lesser of
10 percent of an employee’s annual salary or $10,000.
2002 Stock Incentive Plan
The 2002 Plan was adopted at the 2002 Annual Meeting of Shareholders and amended and restated by AIG’s
Board of Directors on September 18, 2002. During 2007, 179,106 RSUs, including performance RSUs, were
granted under the 2002 Plan. Because the 2002 Plan has been superseded by the 2007 Plan, there were no shares
reserved for issuance in connection with future awards at December 31, 2008 other than incremental amounts
awarded for attaining specified criteria under the AIG DCPPP. Prior to March 2008, substantially all time-vested
RSUs granted under the 2002 Plan were scheduled to vest on the fourth anniversary of the date of grant. Effective
March 2008, the vesting of the December 2005 and 2006 grants was accelerated to vest on the third anniversary of
the date of grant.
2007 Stock Incentive Plan
The 2007 Plan was adopted at the 2007 Annual Meeting of Shareholders and amended and restated by AIG’s
Board of Directors on November 14, 2007. The total number of shares of common stock that may be issued under
the Plan is 180,000,000. The 2007 Plan supersedes the 1999 Plan and the 2002 Plan. During 2008 and 2007,
1,533,998 and 7,121,252 RSUs, respectively, including performance RSUs, were granted under the 2007 Plan. Each
RSU, performance RSU and DSU awarded reduces the number of shares available for future grants by 2.9 shares. At
December 31, 2008, there were 163,745,561 shares reserved for issuance under the 2007 Plan. A significant
majority of the time-vested RSUs granted in 2008 under the 2007 Plan vest on the third anniversary of the date of
grant.
Certain stock options granted in 2008 included a condition under which AIG’s stock price had to exceed
specific price levels for 15 consecutive trading days in order to vest.
Non-Employee Director Stock Awards
The methodology used for valuing employee stock options is also used to value director stock options. Director
stock options vest one year after the grant date, but are otherwise the same as employee stock options. Commencing
in 2007, directors no longer receive awards of options. Options with respect to 40,000 shares were granted during
2006.
In 2008, AIG granted to directors 127,070 DSUs, including DSUs representing dividend-equivalent amounts.
AIG also granted to directors 6,375 shares and 14,000 shares, with delivery deferred, during 2007 and 2006,
respectively, under the Director Stock Plan. There were no deferred shares granted in 2008.
SICO Plans
The SICO Plans provide that shares of AIG common stock currently held by SICO are set aside for the benefit
of the participant and distributed upon retirement. The SICO Board of Directors currently may permit an early
payout of shares under certain circumstances. Prior to payout, the participant is not entitled to vote, dispose of or
receive dividends with respect to such shares, and shares are subject to forfeiture under certain conditions, including
but not limited to the participant’s termination of employment with AIG prior to normal retirement age.
The SICO Plans are also described in Note 14 herein.
AIG 2008 Form 10-K 301
American International Group, Inc., and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)