Ex. 10(5)
Assurance
Agreement , dated as of June 27, 2005 (this “
Agreement ”), by American International Group,
Inc. , a Delaware corporation (“ AIG ”),
in favor of each Eligible
Employee (as defined below).
Recitals
A.
The Covered Payments . C.V. Starr & Co., Inc. (“
Starr ”) has historically offered members of
AIG’s senior management the opportunity to purchase shares of
its common stock. The payments owed by Starr in respect of which a
notice of redemption or repurchase of “Covered Stock”
(as defined below) has been given in accordance with Starr’s
Amended and Restated Stockholders Agreement, dated as of
July 16, 2002, its Certificate of Incorporation and its
By-Laws, each as in effect December 31, 2004 (the “
Governing Documents ”), are referred to in this
Agreement, collectively, as the “ Covered Payments
”.
B.
The Eligible Employees . AIG has determined, subject to the
conditions set forth in this Agreement, to assure each person who
was as of May 18, 2005 both (1) a stockholder of Starr
and (2) an employee of AIG or its subsidiaries (each, an
“ Eligible Employee ”) that all Covered Payments
are promptly paid to the Eligible Employee.
Now, Therefore
, AIG agrees as follows, intending to be legally bound:
1.
Assurance of Payment . AIG agrees to make any Covered
Payment to any Eligible Employee that is not promptly paid by Starr
as required by the express terms of the Governing Documents,
subject to the conditions set forth in Section 2 and the terms
of this Agreement. The agreement to make the payments described in
this Section 1 is irrevocable.
2.
Conditions . AIG’s obligation to make the payments
contemplated by Section 1 is subject to the following
conditions:
(a) For purposes
of this Agreement, “Covered Stock” shall mean all
Covered Stock (as defined in Governing Documents) owned by an
Eligible Employee on May 18, 2005 and all subsequent dividends
of preferred stock that would constitute such Covered Stock made by
Starr consistent with past practice as determined by the
Compensation Committee of the Board of Directors of AIG (the
“ Compensation Committee ”);
(b) The obligation
will apply only to the Covered Payments owed under the express
terms of the Governing Documents as in effect on December 31,
2004, without giving effect to any subsequent modification, waiver
or amendment or action or inaction by the directors or stockholders
of Starr, in each case not approved by the Compensation
Committee;
(c) The obligation
will apply only to payments to an Eligible Employee who is not
terminated by AIG for cause, as determined by the Compensation
Committee; and
(d) The Eligible
Employee shall agree to take all actions reasonably requested by
the AIG to subrogate AIG to his or her rights against Starr for any
payment made by AIG. Without limiting the generality of the
preceding sentence, each Eligible Employee shall be required to
agree, before receiving a payment pursuant to Section 1, that
he or she will repay the payment if the underlying obligation is
ultimately satisfied by Starr.
3.
Nature of Obligations . This Agreement shall remain in full
force and effect and shall be binding on AIG, its successors and
assigns until all Covered Payments owed to Eligible Employees under
the express terms of the Governing Documents have been made in
full. In the event that any payment to an Eligible Employee in
respect of a Covered Payment is rescinded or must otherwise be
returned for any reason whatsoever, AIG shall remain liable under
this Agreement with respect to payment as if it had not been made.
AIG reserves the right to assert any and all defenses that Starr
may have to any payment.
4.
Subrogation . On making any payment under Section 1,
AIG shall be subrogated to the rights of the Eligible Employee
against Starr with respect to the underlying obligations of
Starr.
5.
Administration of this Agreement .
(a) This Agreement
shall be administered by the Compensation Committee. Actions of the
Compensation Committee may be taken by the vote of a majority of
its members. The Compensation Committee may allocate among its
members and delegate to any person who is not a member of the
Compensation Committee any of its responsibilities and, unless the
context otherwise requires, all references to the Compensation
Committee in this Agreement shall include any member or person so
allocated or delegated.
(b) All decisions,
writings and actions under this Agreement shall be
