Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Peter Zaffino Employment Agreement
On November 10, 2022, American International Group, Inc. (the "Company" or
"AIG") and Peter Zaffino, the Company's President & Chief Executive Officer and
Chairman of the Board of Directors (the "Board"), entered into an employment
agreement (the "Employment Agreement"), pursuant to which Mr. Zaffino will
continue to serve as the Company's President & Chief Executive Officer for a
five-year employment term which will continue through November 10, 2027. During
the term of the Employment Agreement, Mr. Zaffino will be nominated to continue
to serve as a member of the Board and, if elected by AIG's shareholders as a
director, will continue to serve as Chairman of the Board, in accordance with
the voting standards set forth in AIG's By-Laws and Corporate Governance
Guidelines.
As consideration for AIG's entry into the Employment Agreement, including the
Special RSU Grant (both of which are described in further detail below), Mr.
Zaffino will be subject to new non-competition restrictions that apply during
his employment and for a period of one year following his termination of
employment for any reason other than upon expiration of the five-year term
(which represents an expansion from his existing six-month non-compete that
applied only in limited instances), and he will otherwise remain subject to his
one-year non-solicitation and perpetual confidentiality obligations. In
addition, Mr. Zaffino will be required to provide AIG with at least 12 months'
notice prior to a termination of his employment without good reason or due to
his retirement (which represents an expansion from his existing six-month notice
period).
Under the Employment Agreement, Mr. Zaffino will receive an annual base salary
of $1,500,000 and will continue to be eligible to receive a target annual cash
bonus of $4,500,000, determined based on the Board's assessment of corporate and
individual performance goals under AIG's Annual Short-Term Incentive Plan. In
addition, Mr. Zaffino will be eligible to receive an annual award under AIG's
Long-Term Incentive Plan, which annual award will have a grant date target value
of $14,000,000 and will now be comprised 75% of performance share units and 25%
of stock options (which represents a shift toward a more performance-based award
mix as compared to the Company's historic annual long-term incentive award mix
comprised 50% of performance share units, 25% of stock options and 25% of
restricted stock units).
In recognition of Mr. Zaffino's continued leadership and the highly competitive
market for talent, the Board approved a special, one-time grant to Mr. Zaffino
in the form of restricted stock units having a grant date value of $50,000,000
(the "Special RSU Grant"). The Special RSU Grant will cliff vest in full on
November 10, 2027, subject to Mr. Zaffino's continued employment with AIG
through such date (except as described below).
The Special RSU Grant reflects the Board's expectation that Mr. Zaffino will
continue to provide exceptional leadership to the Company for at least an
additional five years. In developing the Special RSU Grant, the Board considered
the critical nature of retaining Mr. Zaffino to lead the Company over the long
term, his exceptional performance since joining AIG in 2017, and the importance
of leadership continuity as the Company continues to execute on significant
strategic and operational initiatives, including continued profitability
improvement in the General Insurance business, AIG's reinsurance strategy, the
continued operational separation of Corebridge Financial, Inc. and eventual full
separation of Corebridge from AIG, and the redesign of AIG's investment
management strategy. The Board also expects that Mr. Zaffino will continue to
build on his prior achievements, which include AIG's strong financial results,
particularly over the last two years, his exceptional leadership and financial,
technical and operational capabilities, the recruitment of high-caliber
executives to AIG across the global organization, and his significant
contributions to AIG's overall performance during his tenure, including during
the COVID-19 pandemic, an unstable geopolitical environment, and volatile market
conditions.
In the event of a termination of Mr. Zaffino's employment by AIG without "cause"
or if he resigns for "good reason" (each as defined in the Employment
Agreement), Mr. Zaffino will be eligible to receive severance payments and
benefits that are substantially comparable in amount to those he would have been
eligible to receive under the
AIG Amended and Restated 2012 Executive Severance Plan, as modified by his offer
letter with the Company, dated February 11, 2021 (the "Prior Agreement")
(including, for the avoidance of doubt, accelerated vesting of his outstanding
equity awards). In addition, if Mr. Zaffino's employment terminates due to his
death, disability or retirement or upon expiration of the initial five-year
employment term, he will be eligible to receive (i) a pro rata bonus for the
year of termination and (ii) accelerated vesting of unvested equity awards. All
severance payments and benefits payable to Mr. Zaffino under the Employment
Agreement are subject to his execution and non-revocation of a release of
claims.
A copy of the press release announcing the Company's entry into the Employment
Agreement with Mr. Zaffino is attached as Exhibit 99.1 to this Current Report on
Form 8-K and is incorporated by reference herein. The descriptions of the
Employment Agreement and Special RSU Grant set forth above are qualified in
their entirety by the Employment Agreement and the award agreement governing the
Special RSU Grant, copies of which will be filed as exhibits to the Company's
Annual Report on Form 10-K for the fiscal year ending December 31, 2022.
Item 9.01. Financial Statements and Exhibits.
The following exhibits are filed as a part of this Report.
Exhibit No. Description
99.1 Press Release of American International Group, dated November 10,
2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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