AMERICAN INTERNATIONAL GROUP, INC. (NYSE:AIG) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

AMERICAN INTERNATIONAL GROUP, INC. (NYSE:AIG) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

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Item5.02

Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.

On May15, 2017, American International Group, Inc. (AIG)
announced that its Board of Directors (Board) appointed Brian
Duperreault as President, Chief Executive Officer and a member of
the Board, and PeterD. Hancock resigned from his roles as
President, Chief Executive Officer and a member of the Board in
accordance with AIGs previously disclosed succession plan,
effective May 14, 2017 (the Transition Date). Mr.Duperreault was
previously Chairman of the Board of Directors and Chief Executive
Officer of Hamilton Insurance Group, Ltd. (Hamilton).

To enable Mr.Duperreaults prompt appointment free of conflicts of
interest and to continue to accelerate its application of
cutting-edge technology to insurance underwriting, AIG
simultaneously entered into various arrangements with Hamilton,
Two Sigma Insurance Quantified, LP (Two Sigma) and Attune
Holdings, LLC (Attune). These arrangements, which are described
in more detail below, provide for the release of Mr.Duperreault
from his existing restrictive covenants and the divestiture of
his interests in Hamilton, AIGs purchase of Hamiltons U.S.
operations, the exploration of a technology relationship with Two
Sigma and the expansion of the existing Attune joint venture
between affiliates of Hamilton, Two Sigma and AIG.

Biographical Background

Mr.Duperreault, age70, was appointed as AIGs President, Chief
Executive Officer and a member of the Board effective May 14,
2017. Mr.Duperreault was previously the Chief Executive Officer
of Hamilton, a Bermuda-based holding company of property and
casualty insurance and reinsurance operations in Bermuda, the
U.S. and the UK, from December 2013 to May 2017, and served as
Chairman of Hamilton from February 2016 to May 2017. He served as
President and Chief Executive Officer of Marsh McLennan
Companies, Inc. from February 2008 until his retirement in
December 2012. Before joining Marsh, he served as non-executive
Chairman of ACE Limited from 2006 through the end of 2007 and as
Chief Executive Officer from October 1994 to May 2004. Prior to
joining ACE, Mr.Duperreault served in various senior executive
positions with AIG and its affiliates from 1973 to 1994.
Mr.Duperreault is a director of Johnson Controls International
plc, where he is a member of the Corporate Governance Committee,
and was a director of Tyco International plc from 2004 to 2016,
when it merged with Johnson Controls International plc. In light
of Mr.Duperreaults deep experience in the insurance industry, his
history with AIG and his management of large, complex,
international institutions, AIGs Board has concluded that
Mr.Duperreault should be elected to the Board.

Letter Agreement with Mr.Duperreault

On May14, 2017, AIG entered into an agreement with Mr.Duperreault
(the Letter Agreement) establishing his compensation as President
and Chief Executive Officer. Under the Letter Agreement,
Mr.Duperreaults initial compensation will consist of an annual
base salary of $1.6million, a short-term annual incentive target
of $3.2million (which will be prorated for 2017 and is not
subject to any guarantee) and an annual long-term incentive award
of $11.2million. For 2017, consistent with AIGs compensation
program for other executive officers, Mr.Duperreaults long-term
incentive award is 70% in the form of performance share units
earned based on achievement of performance criteria for the
three-year performance period covering January 2017 through
December 2019, and 30% in the form of restricted stock units
earned based on continued employment through such three-year
period.

In addition, Mr.Duperreault will receive a one-time, make-whole
cash award of $12million as compensation for unvested Hamilton
equity awards to be forfeited by him in connection with his
appointment as President and Chief Executive Officer of AIG, and
a one-time, sign-on award of stock options (the Stock Options) to
purchase 1,500,000shares of AIG common stock (the Shares) for an
exercise price equal to the fair market value per Share on the
Transition Date and having a seven-year term, as follows:

Stock Options for 500,000Shares will vest in equal, annual
installments on each of the first three anniversaries of the
Transition Date;
Stock Options for 300,000Shares will vest only if, for twenty
consecutive trading days, the closing price per Share is at
least $10.00 over the closing price on May12, 2017 (the
Reference Price), but in no event will these Stock Options
vest faster than in equal, annual installments on each of the
first three anniversaries of the Transition Date;
Stock Options for 300,000Shares (of which Stock Options in
respect of 100,000Shares constitute the $20 Inducement
Options) will vest only if, for twenty consecutive trading
days, the closing price per Share is at least $20.00 over the
Reference Price; and
Stock Options for 400,000shares (the $30 Inducement Options)
will vest only if, for twenty consecutive trading days, the
closing price per Share is at least $30.00 over the Reference
Price.

The Stock Options are exercisable only after vesting, are subject
to the terms of the American International Group, Inc. 2013
Omnibus Incentive Plan (the Plan) and, other than the $20
Inducement Options and $30 Inducement Options, are issued under
the Plan. The $20 Inducement Options and the $30 Inducement
Options are granted outside of the Plan as employment inducement
grants under New York Stock Exchange Listing Rule303A.08 and were
approved by the Compensation and Management Resources Committee
of the Board.

Any bonus, equity or equity-based award or other incentive
compensation granted to Mr.Duperreault will be subject to the AIG
Clawback Policy (and any other AIG clawback policies as may be in
effect from time to time). Mr.Duperreault will be entitled to
severance in accordance with AIGs Executive Severance Plan.

The foregoing summary is qualified in its entirety by reference
to the Letter Agreement and the related form of Stock Option
award agreement, which are attached as Exhibits10.1 and 10.2 to
this Current Report on Form8-K, respectively, and which are
incorporated by reference.

Transactions with Hamilton Insurance Group, Two Sigma
Insurance Quantified and Attune Holdings

On May14, 2017, AIG entered into a waiver agreement with Hamilton
(the Hamilton Waiver Agreement) to which AIG will pay Hamilton
$20million in exchange for Hamiltons release of Mr.Duperreault
from restrictive covenants that would prevent or restrict
Mr.Duperreault from being employed by AIG or serving on the
Board. to the Hamilton Waiver Agreement, AIG will make an
additional payment of $20million contingent upon the completion
of Mr.Duperreaults second year as Chief Executive Officer of AIG,
which would continue to be payable in the event Mr.Duperreault is
no longer employed as AIGs Chief Executive Officer at such time
due to his death or disability. In addition, Hamilton has advised
AIG that, in connection with Mr.Duperreaults appointment as AIGs
President and Chief Executive Officer effective May14, 2017,
Hamilton has cancelled or agreed to repurchase all of
Mr.Duperreaults equity and equity-related interests in Hamilton
and its affiliates. As noted above, Mr.Duperreault was a founding
member of Hamilton, served as Chief Executive Officer of Hamilton
from 2013 to 2017 and as Chairman from 2016 to 2017 and, as of
May12, 2017 held shares and warrants representing approximately
1.6% of Hamiltons outstanding common stock. In addition, Attune
and certain affiliates of Hamilton and Two Sigma entered into a
waiver and agreement (the Attune Waiver Agreement) waiving their
respective rights to enforce certain employee non-solicitation
restrictions relating to Attune, a joint venture in which
affiliates of AIG, Hamilton and Two Sigma are equal parties.
Attune was formed in September 2016 by affiliates of AIG,
Hamilton and Two Sigma as a technology-enabled platform to serve
the U.S. small to medium sized enterprise commercial insurance
market. Affiliates of AIG made a $10 million capital contribution
to Attune. In addition to having had an indirect ownership
interest in Attune by virtue of his interests in Hamilton,
Mr.Duperreault has served as Chairman of Attune since its
formation in September 2016.

Also on May 14, 2017, AIG entered into a memorandum of
understanding (the MOU) with Hamilton and Two Sigma. The MOU
provides that, subject to the negotiation of mutually agreeable
terms and conditions, AIG and Hamilton will enter into a stock
purchase agreement to which AIG will acquire all of the
outstanding shares of Hamilton U.S. Holdings, Inc. (HUSA), a
wholly owned subsidiary of Hamilton, for a purchase price equal
to HUSAs book value at closing plus $30 million. HUSAs book value
plus the $30 million premium is currently estimated by Hamilton
to total approximately $110 million. to the terms of the MOU, AIG
will deliver a deposit to Hamilton of $30 million within three
business days after the Transition Date, which is non-refundable
and will be applied towards the ultimate purchase price for the
acquisition. Hamilton will retain its one-third ownership of
Attune in the transaction. In addition, AIG will offer Hamilton
the opportunity to participate in at least $150 million of
reinsurance premium per year for six years (the Reinsurance
Strategic Partnership), which minimum amount will increase by
seven percent per year following the first year. If Hamilton
elects to participate in AIGs reinsurance panel, all pricing and
other terms and conditions offered to Hamilton will be on
arms-length, market terms, and Hamiltons involvement in AIGs
reinsurance panel will be subject to the requirements of AIGs
risk management framework.

The MOU also calls for AIG and Two Sigma to negotiate in good
faith the terms of a development contract to which Two Sigma and
AIG will develop a next generation insurance platform for AIGs
use. to the terms of the MOU, AIG will deliver a non-refundable,
good faith initial installment to Two Sigma of $37.5 million
within three business days after the Transition Date, which
amount will be used towards the development of the platform while
the relationship is being finalized and will be applied towards
the eventual compensation to be paid to Two Sigma under any
definitive development contract ultimately agreed to. The
ultimate cost for the development of the platform is currently
estimated to be approximately $250 million over a five-year
period.

On May14, 2017, affiliates of AIG, Hamilton and Two Sigma agreed
to expand the scope of Attunes target market for small-to-medium
enterprise businesses to include companies with annual revenues
of up to $35 million.

AIGs Nominating and Corporate Governance Committee approved the
Hamilton Waiver Agreement, the Attune Waiver Agreement, the MOU,
the Reinsurance Strategic Partnership and the expansion of the
scope of Attunes target market in accordance with AIGs
Related-Party Transactions Approval Policy.

Section 7 Regulation FD

Item7.01 Regulation FD Disclosure.

On May 15, 2017, AIG issued a press release announcing Mr.
Duperreaults appointment as President, Chief Executive Officer
and a director of AIG. A copy of the press release is furnished
as Exhibit 99.1 to this Current Report on Form 8-K.

The information in Item 7.01 of this Current Report on Form 8-K,
including Exhibit 99.1 hereto, shall not be deemed filed for the
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liabilities of that section.
Furthermore, Item 7.01 of this Current Report on Form 8-K,
including Exhibit 99.1 hereto, shall not be deemed incorporated
by reference in any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934.

Section9 Financial Statements and Exhibits

Item9.01 Financial Statements and Exhibits

(d)Exhibits.

10.1 Letter Agreement, dated May 14, 2017, between American
International Group, Inc. and Brian Duperreault.
10.2 Form of Stock Option Award Agreement, between American
International Group, Inc. and Brian Duperreault.
99.1 Press Release of American International Group, Inc., dated
May 15, 2017 (furnished and not filed for purposes of Item
7.01).


About AMERICAN INTERNATIONAL GROUP, INC. (NYSE:AIG)

American International Group, Inc. (AIG) is an insurance company. The Company provides a range of property casualty insurance, life insurance, retirement products, mortgage insurance and other financial services to customers in over 100 countries and jurisdictions. The Company operates through two segments: Commercial Insurance and Consumer Insurance, as well as a Corporate and Other category. Commercial Insurance has three operating segments: Property Casualty, Mortgage Guaranty and Institutional Markets. Commercial Insurance segment is a provider of insurance products and services for commercial and institutional customers. Consumer Insurance also has three operating segments: Retirement, Life and Personal Insurance. Consumer Insurance is a franchise that offers a portfolio of retirement, life insurance and property casualty products through multiple distribution networks. Corporate and Other includes the Company, as well as certain legacy assets and run-off insurance businesses.

AMERICAN INTERNATIONAL GROUP, INC. (NYSE:AIG) Recent Trading Information

AMERICAN INTERNATIONAL GROUP, INC. (NYSE:AIG) closed its last trading session down -0.80 at 60.99 with 14,479,145 shares trading hands.

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