AIG 2014 Annual Report Download - page 320

ITEM 8 / NOTE 21. SHARE-BASED AND OTHER COMPENSATION PLANS
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AIG 2013 Omnibus Incentive Plan
The 2013 Plan was adopted at the 2013 Annual Meeting of Shareholders and provides for the grants of share-based awards to
our employees and non-employee directors. The total number of shares that may be granted under the 2013 Plan (the
reserve) is the sum of 1) 45 million shares of AIG Common Stock, plus 2) the number of authorized shares that remained
available for issuance under the 2010 Plan when the 2013 Plan became effective, plus 3) the number of shares of AIG
Common Stock relating to outstanding awards under the 2010 Plan at the time the 2013 Plan became effective that
subsequently are forfeited, expired, terminated or otherwise lapse or are settled in cash. Each share-based unit granted under
the 2013 Plan reduces the number of shares available for future grants by one share. However, shares with respect to awards
that are forfeited, expired or settled for cash, and shares withheld for taxes on awards (other than options and stock
appreciation rights (SARs) awards) are returned to the reserve.
During 2014, performance share units (PSUs) and deferred stock units (DSUs) were granted under the 2013 Plan and
50,206,557 shares are available for future grants as of December 31, 2014. PSUs were issued for off-cycle grants, which are
made from time to time during the year as sign-on awards to new hires or as a result of a change in employee status.
AIG 2010 Stock Incentive Plan
The 2010 Plan was adopted at the 2010 Annual Meeting of Shareholders. The total number of shares of AIG Common Stock
that could be granted under the 2010 Plan was 60 million. During 2013 and 2012, we granted PSUs, DSUs, and restricted
stock units (RSUs), under the 2010 Plan. Each PSU, DSU, and RSU, awarded reduced the number of shares available for
future grants by one share. Subsequent to the adoption of the 2013 Plan in May 2013, no additional grants were made under
the 2010 Plan.
Share-settled Awards
AIG 2013 Long Term Incentive Plan
The 2013 Long Term Incentive Plan (2013 LTIP), adopted in March 2013, provides for the annual grant of PSUs to certain
employees, including our senior executive officers and other highly compensated employees. Each recipient of an award is
granted a number of PSUs (the target) that provides the opportunity to receive shares of AIG Common Stock based on AIG
achieving specified performance goals at the end of a three-year performance period. These performance goals are pre-
established by AIG’s Compensation and Management Resources Committee for each annual grant and may differ from year to
year. The actual number of PSUs earned can vary from zero to 150 percent of the target depending on AIG’s performance
relative to a specified peer group. Vesting occurs in three equal installments beginning on January 1 of the year immediately
following the end of a performance period and January 1 of each of the next two years. Dividends do not accrue on unvested
PSUs or underlying shares. Recipients must be employed at each vesting date to be entitled to share delivery, except upon
the occurrence of an accelerated vesting event, such as an involuntary termination without cause, disability, or retirement
during the vesting period.
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 us prior to normal retirement age. A significant portion of the awards under the SICO Plans
vest the year after the participant reaches age 65, provided that the participant remains employed by us through age 65. The
portion of the awards for which early payout is available vests on the applicable payout date.
SICO Plan awards issued in the form of restricted stock were valued based on the closing price of AIG’s Common Stock on the
grant date. Although none of the costs of the various benefits provided under the SICO Plans have been paid by us, we have