Ex. 10(6)
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 Plans . Starr International Company, Inc.
(“ SICO ”) has historically established Deferred
Compensation Profit Participation Plans for the benefit of
employees of AIG and its subsidiaries (each such plan established
through December 31, 2004, a “ Covered Plan
”). In the letter to participants attached as an Annex to
this Agreement (the “Annex ”) , SICO
reaffirmed its obligations under each Covered Plan.
B.
The Eligible Employees . AIG has determined, subject to the
conditions set forth in this Agreement, to assure each participant
in a Covered Plan who was as of May 18, 2005 an employee of
AIG or its subsidiaries (each, an “ Eligible Employee
”) that all cash or AIG common stock, par value $2.50 per
share (as adjusted for any Fundamental Transaction (as defined
below), the “ Common Stock ”), due under the
express terms of the Covered Plans is promptly paid or delivered to
the Eligible Employee.
Now, Therefore
, AIG agrees as follows, intending to be legally bound:
1.
Assurance of Delivery . AIG agrees (a) to pay to any
Eligible Employee any cash that is not promptly paid and
(b) to deliver to any Eligible Employee any shares of Common
Stock that are not promptly delivered, in each case by SICO to such
Eligible Employee as required by the express terms of any Covered
Plan, subject to the conditions set forth in Section 2 and the
terms of this Agreement. The agreement to make the deliveries and
payments described in this Section 1 is
irrevocable.
2.
Conditions . AIG’s obligation to make the deliveries
and payments contemplated by Section 1 is subject to the
following conditions:
(a)
The obligation will apply only to the express terms of the Covered
Plans as in effect on December 31, 2004, without giving effect
to any subsequent modification, waiver or amendment or action or
inaction by the directors of SICO (or any committee thereof), in
each case not approved by the Compensation Committee of the Board
of Directors of AIG (the “ Compensation
Committee” );
(b)
The obligation will apply only to deliveries and payments to an
Eligible Employee who is not terminated by AIG for cause, as
determined by the Compensation Committee;
(c)
Whether obligations under the Covered Plans are satisfied by
delivery of shares of Common Stock, payment of cash or combination
of the two shall be determined by the Compensation Committee (from
time to time, in its sole discretion and regardless of the form of
consideration the directors of SICO elected to pay);
(d)
AIG’s total obligation under this Agreement will be limited
to a combination of shares of Common Stock and cash that does not
exceed the number of shares of Common Stock set forth in the Annex,
as such number shall be equitably adjusted in the event of a
recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation, rights offering,
separation, reorganization, or liquidation or any other change in
the corporate structure of AIG or shares of the Common Stock (a
“ Fundamental Transaction ”), and, for purposes
of calculating this limit, cash payments shall be converted into a
number of shares of Common Stock based on the fair market value of
the Common Stock (as determined by the Compensation Committee) on
the date the payment is due under the relevant Covered Plan;
and
(e)
The Eligible Employee shall agree to take all actions reasonably
requested by AIG to subrogate AIG to his or her rights against SICO
for any delivery or payment made by AIG. Without limiting the
generality of the preceding sentence, each Eligible Employee shall
be required to agree, before receiving a delivery or payment
pursuant to Section 1, that he or she will repay the shares or
payments if the underlying obligation is ultimately satisfied by
SICO.
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 deliveries and payments under the express terms
of the Covered Plans to Eligible Employees have been made in full.
In the event that any delivery of shares or payment to an Eligible
Employee under a Covered Plan is rescinded or must otherwise be
returned for any reason whatsoever, AIG shall remain liable under
this Agreement with respect to delivery or payment as if it had not
been made. AIG reserves the right to assert any and all defenses
that SICO may have to any delivery or payment.
4.
Subrogation . On making any delivery or payment under
Section 1, AIG shall be subrogated to the rights of the
Eligible Employee against SICO with respect to the underlying
obligations of SICO.
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, any and 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
subject to the approval to the Compensation Committee in its sole
and absolute discretion. Without limiting the generality of the
foregoing, the Compensation Committee shall have power to interpret
this Agreement, to make regulations for carrying out its purpose
and to make all other
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