AIG 2009 Annual Report Download - page 329

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AIG DCPPP
The AIG DCPPP provides share-based compensation to key AIG employees, including senior executive officers.
The AIG DCPPP contingently allocated a fixed number of time-vested RSUs to each participant if AIG’s
cumulative adjusted earnings per share in 2005 and 2006 exceeded that in 2003 and 2004 as determined by AIG’s
Compensation Committee. This goal was met, and pursuant to the terms of the DCPPP, 184,842 time-vested RSUs
were awarded in 2007. Due to the modification in March 2008, the vesting periods for these RSUs have been
shortened to vest in three installments with the final installment vesting in January 2012.
At December 31, 2009, RSU awards with respect to 107,545 shares remained outstanding.
AIG Partners Plan
On June 26, 2006, AIG’s Compensation Committee approved two grants under the AIG Partners Plan. The first
grant had a performance period that ran from January 1, 2006 through December 31, 2007. The second grant has a
performance period that ran from January 1, 2007 through December 31, 2008. In December 2007, the Compensation
Committee approved a grant with a performance period from January 1, 2008 through December 31, 2009. The
Compensation Committee approved the performance metrics for this grant in the first quarter of 2008. The first and
the second grants vest 50 percent on the fourth and sixth anniversaries of the first day of the related performance
period. The third grant vests 50 percent on the third and fourth anniversaries of the first day of the performance
period. The Compensation Committee approved the performance metrics for the first two grants prior to the date of
grant. The measurement of the first two grants is deemed to have occurred on June 26, 2006 when there was mutual
understanding of the key terms and conditions of the first two grants. All grants were modified in March 2008. In
2009, 2008 and 2007, no compensation cost was recognized for the second and the third grants under the Partners Plan
because the performance threshold for these awards was not met. In 2007, the compensation cost recognized in 2006
was reversed for the first grant under the Partners Plan because the performance threshold for these awards was not
met.
RSUs and Performance RSUs Valuation
The fair value of RSUs and performance RSUs is based on the closing price of AIG stock on the date of grant.
The following table presents a summary of shares relating to outstanding awards unvested under the foregoing plans*:
Number of Shares Weighted Average Grant-Date Fair Value
As of or for the Year
Ended December 31, 2009 Time- Total Total Total Total
vested AIG Partners AIG SICO Time-vested AIG Partners AIG SICO
RSUs DCPPP Plan Plan Plans RSUs DCPPP Plan Plans Plans
Unvested, beginning of year 496,286 165,737 168,162 830,185 378,960 $1,226.23 $1,147.11 $1,004.50 $1,165.52 $1,222.35
Granted 363,685 - - 363,685 - 31.58 - - 31.58 -
Vested (570,763) (65,808) (28,009) (664,580) (34,623) 535.02 1,042.39 736.05 593.73 681.35
Forfeited (65,360) (12,240) (119,023) (196,623) (24,548) 1,196.62 1,145.99 1,077.19 1,121.17 1,204.83
Cancelled (5,009) (9) (162) (5,180) - 1,198.54 1,126.52 827.42 1,186.78 -
Unvested, end of year 218,839 87,680 20,968 327,487 319,789 $1,053.11 $1,140.99 $ 860.62 $1,064.32 $1,219.07
* Options are reported under the Additional information with respect to AIG’s stock option plans table above. DSUs are reported under
Non-Employee Director Stock Awards. For the AIG DCPPP, includes all incremental shares granted. This table excludes 45,913 shares of fully
vested restricted stock granted to a senior executive with a weighted average grant-date fair value of $33.51, which was issued under a separate
agreement.
321 AIG 2009 Form 10-K