EMPLOYMENT AGREEMENT
AGREEMENT by and among American
International Group, Inc., a Delaware
corporation (the "Parent"), American General
Corporation, a Texas corporation (the
"Company"), and Xxxxxx X. Xxxxxx (the
"Executive") dated as of the 11th day of
May, 2001.
Parent has determined that it is
in the best interests of Parent and the
Company and their respective shareholders to
assure that the Company will have the
continued services of the Executive
following the merger (the "Merger") of the
Company and Washington Acquisition
Corporation, a Texas corporation and a
wholly owned subsidiary of Parent ("Merger
Sub"), pursuant to the Agreement and Plan of
Merger dated as of May 11th, 2001 (the
"Merger Agreement"), to provide the
surviving corporation after the Merger with
continuity of management. Pursuant to the
terms of the Prior Agreement (as defined
below), Executive would have had the right
to terminate his employment upon
consummation of the Merger. However, Parent
desires to retain the Executive's continued
services pursuant to the terms of this
Agreement. Therefore, in order to accomplish
these objectives, Parent, the Company and
the Executive agree as follows:
NOW, THEREFORE, IT IS HEREBY
AGREED AS FOLLOWS:
1. Effective Date. The "Effective Date"
shall mean the "Effective Date" (as defined
in the Merger Agreement) of the Merger. This
Agreement shall be and become effective on
the Effective Date. If the Effective Date
does not occur on or before February 28,
2002 or if the Merger Agreement is earlier
terminated in accordance with its terms,
then this Agreement shall terminate
automatically on February 28, 2002 or on
such earlier Merger Agreement termination
date and none of Parent, the Company or the
Executive shall have any obligation to the
other hereunder.
2. Employment Period. The Company hereby
agrees to employ the Executive, and the
Executive hereby agrees to continue to serve
the Company, subject to the terms and
conditions of this Agreement, for the period
commencing on the Effective Date and ending
on the third anniversary thereof (the
"Employment Period").
3. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period,
(A) the Executive shall serve in the position set
forth on Exhibit A attached hereto, with the
duties and responsibilities associated with
such position on the Effective Date (except
to the extent expressly provided in Exhibit
A) as shall be assigned to him by the Board
of Directors or Chief Executive Officer of
the Company and (B) the Executive's services
shall be performed in the location set forth
on Exhibit A hereto.
(ii) During the Employment Period, and
excluding any periods of vacation and sick
leave to which the Executive is entitled,
the Executive agrees to devote substantially
all of his attention and time during normal
business hours to the business and affairs
of the Company and Parent and to use the
Executive's reasonable best efforts to
perform faithfully and efficiently such
responsibilities. During the Employment
Period it shall not be a violation of this
Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational
institutions and (C) manage personal
investments, so long as such activities do
not interfere with the performance of the
Executive's responsibilities as an employee
of the Company and Parent in accordance with
this Agreement, and with respect to the
activities described in clauses (A) and (C)
hereof subject to Parent's policies as in
effect from time to time.
(b) Compensation.
(i) Initial Payment. On the Effective
Date, the Company shall pay to the Executive a
lump sum payment equal to the amount set
forth on Exhibit A hereto, which is equal to
the cash payment that the Executive would
have been entitled to receive pursuant to
Section 4.5 (the "Cash Severance") of the
Change in Control Severance Agreement
between the Company and the Executive dated
as of April 1, 2000 (the "Severance
Agreement"), had he been terminated by the
Company without "cause" (as defined therein)
upon the Effective Date. In addition, on the
Effective Date, the Company shall pay to the
insurance company which has issued the
policy which is the subject of the Split-
Dollar Agreement between the Executive and
the Company, dated as of May 15, 1998 (the
"Split-Dollar Agreement"), the amount set
forth on Exhibit A hereto (the "Split Dollar
Payment"), which is equal to the projected
amount of the premium payments that the
Company would have been required to make
during the three-year period immediately
following the Effective Date on the policy
underlying the Split-Dollar Agreement,
pursuant to Paragraph 5(b) of the Split-
Dollar Agreement. The Executive shall also
be entitled to an excise tax gross-up
payment as set forth in Section 4.7 of the
Severance Agreement solely with respect to
the payments and benefits that the Executive
was entitled to receive under the terms of
the Severance Agreement, the Employment
Agreement between the Executive and the
Company dated as of May 1, 2000 (the "Prior
Employment Agreement"), the Supplemental
Executive Retirement Agreement between the
Company and the Executive, dated as of May
1, 2000, as amended (the "SERA") and the
Split-Dollar Agreement (collectively, the
"Pre-Effective Date Agreements") or with
respect to the vesting of or lapse of
restrictions on, as a direct result of the
Merger, compensation earned, benefits
accrued or equity awards granted prior to
the Effective Date (including, without
limitation, benefits due and owing under the
Pre-Effective Date Agreements and
specifically incorporated herein). Except as
set forth in the preceding sentence, in no
event shall the Executive be entitled to an
excise tax gross-up payment with respect to
any amounts payable or benefits provided
under the terms of this Agreement. The
Executive acknowledges and agrees that in no
event shall he be entitled to the payments
or benefits under the Severance Agreement
based upon a termination during a "Period of
Anticipated Change in Control" (as defined
in the Severance Agreement).
(ii) Base Salary. During the Employment
Period, the Executive shall receive an
annual base salary ("Annual Base Salary") of
no less than the annual base salary in
effect with respect to the Executive for
calendar year 2001.
(iii) Annual Bonus. For each calendar
year ending during the Employment Period,
the Executive shall receive (or at his
election pursuant to the deferred
compensation plan of the Company (if any)
defer part or all of) an annual cash bonus
at least equal to the amount set forth on
Exhibit A hereto (the "Annual Bonus") no
later than January 31 of the following year,
and the Annual Bonus hereunder shall be in
lieu of any bonus amount (or portion
thereof) payable to the Executive under any
agreement or bonus plan of the Company,
including without limitation, the Company
Performance-Based Plan for Executive
Officers with respect to the calendar year
in which the Effective Date occurs, and the
Executive hereby waives all right under any
such agreements or plans. For the calendar
year within which the Employment Period
ends, the Executive shall receive no later
than January 31 of the following year (or at
his election pursuant to the applicable
deferred compensation plan of the Company
(if any) defer part or all of) a bonus which
shall equal or exceed an amount determined
by multiplying the Annual Bonus amount set
forth on Exhibit A by a fraction the
numerator of which shall be the number of
days in such calendar year which were
included in the Employment Period and the
denominator of which shall be 365.
(iv) Incentive Awards. At the time equity
grants are made to other employees of the
Company pursuant to the Merger Agreement,
the Executive will be granted equity based
awards with respect to the common stock of
Parent (the "2001 Service Awards"), pursuant
to the terms of the applicable Parent plan
as in effect from time to time, that is
equal in value to the value of all options
(valued using a Black-Scholes value of
$10.00, after giving effect to the stock
split in 2001), restricted shares and
Performance Awards contained in a
Performance Based Restricted
Stock/Restricted Share Unit Award (valued
using the fair market value of the Company's
common stock on the date of grant) with
respect to restricted share units and
performance awards that were granted to the
Executive by the Company on January 17,
2001, and with the ratio of the options,
restricted shares and performance awards
being the same as the ratio of the awards
granted to the Executive on January 17,
2001. For purposes of the immediately
preceding sentence, the value of the options
in Parent's common stock shall be determined
using the Black-Scholes valuation model,
using assumptions established in manner
consistent with the assumptions applied by
Parent, consistent with past practices, in
respect of stock option grants in 2001. Any
stock options on Parent common stock granted
in connection with the 2001 Service Awards
will have an exercise price equal to the
fair market value of the Parent common stock
subject thereto on the date of grant and,
except as otherwise provided herein, shall
vest in four equal installments on each of
the first, second, third and fourth
anniversaries of the date of grant. Any
restricted shares and Performance Awards
granted in respect of Parent common stock
shall have terms and conditions that are
substantially comparable to those applied in
respect of the 2001 awards made by the
Company. In the event that the Executive
receives any equity award grants (other than
reload options) from the Company after the
date hereof, the 2001 Service Awards shall
be reduced by the value of any such awards
(determined using a Black-Scholes value with
respect to options, using assumptions
established on a basis consistent with those
applied by the Company in determining such
Black-Scholes value in respect of the 2001
grants to the Executive, and the fair market
value on the date of grant with respect to
performance based or restricted stock
awards).
(v) Retirement Benefits. On the Effective
Date, the Executive shall be paid the
benefits payable to the Executive under the
SERA, which benefits shall be calculated
under the terms and conditions thereof
(including without limitation, any enhanced
service and age credits provided under
Section 2.6 in respect of a termination of
the Executive's employment following the
occurrence of a Change of Control) as though
the Executive's employment terminated on the
Effective Date without Cause and the
Executive elected to receive a lump sum
distribution of such benefits, with any
offset against such benefits related to the
benefits payable to the Executive under any
other retirement plan maintained by the
Company based on the benefits
accrued by the Executive thereunder as of the
Effective Date. From and after the Effective Date,
the Executive shall not be entitled to accrue
any additional benefit under the SERA. From
and after the Effective Date, the Executive
shall participate in the applicable
retirement plans of the Company as though no
SERA benefit was accrued, provided that the
Executive shall not become a participant in
the Company's or Parent's Supplemental
Executive Retirement Plan and that in no
event shall the Executive be entitled to
duplicate benefits with respect to the same
period of service. To the extent anything
contained in this Section 3(b)(v) is
inconsistent with the terms and conditions
of the SERA, the SERA shall be deemed
amended hereby.
(vi) Other Employee Benefit Plans. During
the Employment Period, except as otherwise
expressly provided herein, the Executive
shall be entitled to participate in all
employee benefit, welfare and other plans,
practices, policies and programs generally
applicable to similarly situated executives
of the Company, provided that, in no event
shall the Executive be entitled to receive
duplicate benefits with respect to the same
period of service under any plans,
practices, policies or programs of the
Company and/or Parent. Notwithstanding
anything contained herein to the contrary,
the Executive expressly understands and
agrees that he will not initially be
entitled to become a participant in the
STARR International Co., Inc. ("SICO")
Deferred Compensation Profit Participation
Plan ("SICO Plan") or to become a
stockholder of X.X. XXXXX & Co., Inc.
("STARR"), but that following the first
anniversary of the Effective Date, Parent
will recommend to the Boards of Directors of
SICO and of STARR that the Executive be
eligible to commence participation in the
SICO Plan and to become a stockholder of
STARR, consistent with similarly situated
executives of subsidiaries of Parent. Any
participation in the SICO Plan or STARR will
require a mutually agreeable reduction in
the other compensation payable or provided
to the Executive, including without
limitation the Base Salary and the Annual
Bonus, and such reduction will be a
condition to participation in such plans and
will in no event be deemed a breach of this
Agreement. Any reduction in the compensation
otherwise payable hereunder shall be agreed
to, in writing, by the parties in advance of
the time such reduction is to be effective,
and such writing shall set forth, in
reasonable detail sufficient for the
Executive to understand, the compensation
being provided in lieu thereof and all
vesting and forfeiture provisions related
thereto (and other restrictions, if any, on
the ability of the Executive to access or
receive such compensation).
(vii) Indemnification. The Company shall
indemnify the Executive during his
employment hereunder and following the
termination of the Executive's employment
hereunder, on the same basis as the Company
indemnifies similarly situated executives of
the Company.
(viii) Expenses. During the Employment
Period, the Executive shall be entitled to
receive prompt reimbursement for all
reasonable expenses incurred by the
Executive in accordance with the Company's
policies.
(ix) Perquisites. During the Employment
Period, the Executive shall be entitled to
perquisites in accordance with the plans,
practices, policies and programs generally
applicable to similarly situated executives
of the Company.
(x) Vacation. During the Employment Period,
the Executive shall be entitled to paid
vacation in accordance with the plans,
policies, programs and practices of the
Company as in effect with respect to the
similarly situated executives of the
Company.
(xi) Other Benefits From Prior Employment
Agreement. Upon and following any
termination of the Executive's employment
with the Company following the Effective
Date, regardless of the reason, the Company
shall provide the Executive with the
benefits described in Section 8(c)(iv) of
the Prior Employment Agreement for the
duration described in the Prior Employment
Agreement, based on the comparable benefits
provided immediately prior to the Date of
Termination.
4. Termination of Employment.
(a) Death or Disability. The Executive's
employment shall terminate automatically
upon the Executive's death during the
Employment Period. If the Company or Parent
determines in good faith that the Disability
of the Executive has occurred during the
Employment Period (pursuant to the
definition of Disability set forth below),
it may give to the Executive written notice
in accordance with Section 10(b) of this
Agreement of its intention to terminate the
Executive's employment. In such event, the
Executive's employment with the Company
shall terminate effective on the 30th day
after receipt of such notice by the
Executive (the "Disability Effective Date"),
provided that, within the 30 days after such
receipt, the Executive shall not have
returned to full-time performance of the
Executive's duties. For purposes of this
Agreement, "Disability" shall mean the
absence of the Executive from the
Executive's duties with the Company on a
full-time basis for 180 consecutive business
days as a result of incapacity due to mental
or physical illness which is determined to
be total and permanent by a physician
selected by the Company or its insurers and
reasonably acceptable to the Executive or
the Executive's legal representative.
(b) With or Without Cause. The Company or
Parent may terminate the Executive's
employment during the Employment Period with
or without Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the continued failure of the Executive
to perform substantially the Executive's
duties with the Company or one of its
affiliates (other than any such failure
resulting from incapacity due to physical or
mental illness), after a written demand for
substantial performance is delivered to the
Executive by Parent that specifically
identifies the manner in which Parent
believes that the Executive has not
substantially performed the Executive's
duties, or
(ii) the engaging by the Executive in
illegal conduct or gross misconduct that is
materially and demonstrably injurious to the
Company or one of its affiliates, or
(iii) conviction of a felony or guilty
or nolo contendere plea by the Executive
with respect thereto.
Any act, or failure to act, based
upon authority given pursuant to a
resolution duly adopted by the Parent Board
or the Board of Directors of the Company or
upon the instructions of the Chief Executive
Officer of Parent or the Company or based
upon the advice of counsel for Parent or the
Company shall be conclusively presumed to be
done, or omitted to be done, by the
Executive in good faith and in the best
interests of the Company. The acts and/or
omissions which are alleged to constitute
the basis for a Cause termination shall be
identified to the Executive in reasonable
detail in writing, at the time of any such
termination of the Executive's employment
for Cause.
(c) Good Reason. The Executive's employment
may be terminated by the Executive for Good
Reason. For purposes of this Agreement,
"Good Reason" shall mean a material breach
by the Company or Parent of a material
provision of this Agreement. Without
limiting the generality of the foregoing,
Parent and the Executive agree that any of
the following would constitute a material
breach of this Agreement by Parent: (i) any
reduction in the Executive's base salary or
annual bonus (other than a reduction
consented to by the Executive in writing,
including, without limitation, any reduction
contemplated by Section 3(b)(vi)); (ii) any
material adverse change (without his prior
written consent) in the Executive's duties
and responsibilities, or titles, as set
forth in Section 3(a)(i) and Exhibit A
attached hereto; and (iii) any relocation of
his principal place of employment in
violation of Section 3(a)(i) and Exhibit A
attached hereto.
(d) Notice of Termination. Any termination
by the Company for Cause, or by the
Executive for Good Reason, shall be
communicated by Notice of Termination to the
other party hereto given in accordance with
Section 10(b) of this Agreement. For
purposes of this Agreement, a "Notice of
Termination" means a written notice which
(i) indicates the specific termination
provision in this Agreement relied upon,
(ii) to the extent applicable, sets forth in
reasonable detail the facts and
circumstances claimed to provide a basis for
termination of the Executive's employment
under the provision so indicated and (iii)
if the Date of Termination (as defined
below) is other than the date of receipt of
such notice, specifies the termination date
(which date shall be not more than thirty
days after the giving of such notice). The
failure by the Executive, the Company or
Parent to set forth in the Notice of
Termination any fact or circumstance which
contributes to a showing of Good Reason or
Cause shall not waive any right of the
Executive, the Company or Parent,
respectively, hereunder or preclude the
Executive, the Company or Parent,
respectively, from asserting such fact or
circumstance in enforcing the Executive's,
the Company's or Parent's rights hereunder.
(e) Date of Termination. "Date of
Termination" means (i) if the Executive's
employment is terminated by the Company or
Parent for Cause, or by the Executive with
or without Good Reason, the date of receipt
of the Notice of Termination or any later
date specified therein within 30 days of
such notice, as the case may be, (ii) if the
Executive's employment is terminated by the
Company or Parent other than for Cause or
Disability, the Date of Termination shall be
the date on which the Company or Parent
notifies the Executive of such termination
and (iii) if the Executive's employment is
terminated by reason of death or Disability,
the Date of Termination shall be the date of
death of the Executive or the Disability
Effective Date, as the case may be.
5. Obligations of the Company upon
Termination. (a) Good Reason; Other Than for
Cause, Death or Disability. If, during the
Employment Period, the Company or Parent
shall terminate the Executive's employment
other than for Cause, death or Disability or
the Executive shall terminate employment for
Good Reason:
(i) the Company shall pay to the Executive
in a lump sum in cash within 30 days after
the Date of Termination the aggregate of the
following amounts:
A. (1) the Executive's Annual Base Salary
through the Date of Termination to the
extent not theretofore paid ("Accrued
Salary"), (2) the benefits described in
Section 3(b)(xi) hereof and (3) any benefits
to which the Executive is entitled under the
terms and conditions of any applicable
employee benefits plan, program or agreement
(collectively, subclause (1)-(3) shall be
referred to as the "Accrued Obligations");
and
B. a lump sum amount equal to the greater
of (x) the severance under the severance
policy applicable to similarly situated
executives of the Company, as in effect from
time to time, and (y) the sum of the
Executive's Annual Base Salary and the
Annual Bonus amount set forth in Section
3(b)(iii); and
C. a pro-rata portion of the Annual Bonus
payable to the Executive under Section
3(b)(iii), which shall be determined by
multiplying such bonus by a fraction, the
numerator of which is the number of days in
the calendar year in which the Executive's
date of termination occurs which have
elapsed prior to such date of termination
and the denominator of which is 365; and
D. outplacement services for the duration
and of the nature described in Section
8(c)(v) of the Prior Employment Agreement;
and
(ii) to the extent granted prior to the
Date of Termination, the 2001 Service Awards
shall vest immediately.
(b) Death. If the Executive's employment is
terminated by reason of the Executive's
death during the Employment Period, this
Agreement shall terminate without further
obligations to the Executive's legal
representatives under this Agreement, other
than the Accrued Obligations (to the extent
applicable upon the Executive's death).
Accrued Salary shall be paid to the
Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30
days of the Date of Termination. In
addition, (i) to the extent granted prior to
the Date of Termination, all of the 2001
Service Awards shall become fully vested
and, to the extent applicable, exercisable
for the maximum period allowable under the
applicable plan for a termination due to
death and (ii) the Executive's estate shall
be entitled to the death benefits as in
effect on the date of the Executive's death
with respect to similarly situated
executives of the Company (including,
without limitation, any rights to
accelerated vesting and enhanced exercise
periods applicable in respect of any equity
awards made to the Executive in connection
with his employment after the Effective Date
(excluding the 2001 Service Awards, which
are addressed in subclause (i)) that are
generally available to similarly situated
executives of subsidiaries of Parent whose
employment has terminated for such reason
under the terms of the plan, program or
arrangement under which such awards have
been made (the "Equity Enhancements")).
(c) Disability. If the Executive's
employment is terminated by reason of the
Executive's Disability during the Employment
Period, this Agreement shall terminate
without further obligations to the
Executive, other than in respect of the
Accrued Obligations. Accrued
Salary shall be paid to the Executive in a lump
sum in cash within 30 days of the Date of Termination.
In addition, (i) to the extent granted prior
to the Date of Termination, all of the 2001
Service Awards shall become fully vested
and, to the extent applicable, exercisable
for the maximum period allowable under the
applicable Parent plan for a termination due
to disability and (ii) the Executive shall
be entitled after the Disability Effective
Date to receive, disability and other
benefits as in effect at any time thereafter
generally with respect to similarly situated
executives of the Company and to the Equity
Enhancements).
(d) Cause; Other than for Good Reason. If
the Executive's employment shall be
terminated for Cause or the Executive
terminates his employment without Good
Reason during the Employment Period, this
Agreement shall terminate without further
obligations to the Executive other than the
obligation to pay to the Executive the
Accrued Obligations and the only duties,
obligations and liabilities of the Executive
to the Company or Parent thereafter shall be
the restrictive covenants set forth in
Section 7 hereof.
6. Full Settlement. The Company's
obligation to make the payments provided for
in this Agreement and otherwise to perform
its obligations hereunder shall not be
affected by any set-off, counterclaim,
recoupment, defense or other claim, right or
action which the Company or Parent may have
against the Executive or others.
7. Confidential Information;
Noncompetition; Nonsolicitation.
(a) The Executive shall hold in a fiduciary
capacity for the benefit of the Company and
Parent all secret or confidential
information, knowledge or data relating to
the Company, Parent or any of their
affiliated companies, and their respective
businesses, which shall have been obtained
by the Executive during the Executive's
employment by the Company, Parent or any of
their affiliated companies and which shall
not be or become public knowledge (other
than by acts by the Executive or
representatives of the Executive in
violation of this Agreement). After
termination of the Executive's employment
with the Company, Parent or any of their
affiliated companies, the Executive shall
not, without the prior written consent of
Parent or as may otherwise be required by
law or legal process, communicate or divulge
any such information, knowledge or data to
anyone other than the Company, Parent or any
of their affiliated companies and those
designated by them.
(b) The Executive agrees that until the
earlier of (i) the fourth anniversary of the
Effective Date and (ii) the first
anniversary of the Executive's termination
of employment for any reason (the
"Restricted Period"), the Executive will
not, without the written consent of Parent,
engage in any business of, or enter the
employ of, or have any interest in, directly
or indirectly, any other person, firm,
corporation or other entity engaged in a
business that competes with, or provides
services and/or products of a nature
substantially similar to those provided by,
the Company, Parent or their affiliates,
with an office or facility in any geographic
area in which the Company, Parent or their
affiliates do business. Nothing herein shall
restrict the Executive from owning 1% or
less of the outstanding securities of any
corporation or other entity whose securities
are listed on any national securities
exchange or traded over-the-counter, if the
Executive has no other connection or
relationship with the issuer of such
securities.
(c) During the Restricted Period, the
Executive will not, directly or indirectly,
on behalf of the Executive or any other
person, solicit for employment or employ by
other than the Company or Parent any person
who, at any time during the six-month period
immediately preceding the date of such
solicitation, was an employee of the
Company, Parent or any of their affiliates.
(d) The Executive acknowledges and agrees
that due to the nature of the business in
which the Company, Parent and their
affiliates are engaged and because of the
nature of the confidential information to
which the Executive has access, it would be
impractical and excessively difficult to
determine the actual damages of the Company
or Parent in the event the Executive
breached any of the covenants of this
Section 7 and that remedies at law (such as
monetary damages) for any breach of the
Executive's obligations under this Section 7
would be inadequate. The Executive therefore
agrees and consents that, if the Executive
commits any breach of a covenant under this
Section 7 or threatens to commit any such
breach, the Company and Parent shall have
the right (in addition to, and not in lieu
of, any other right or remedy that may be
available to each of them) to temporary and
permanent injunctive relief from a court of
competent jurisdiction. With respect to any
provision of this Section 7 finally
determined by a court of competent
jurisdiction to be unenforceable, the
Executive, the Company and Parent hereby
agree that such court shall have
jurisdiction to reform this Agreement or any
provision hereof so that it is enforceable
to the maximum extent permitted by law, and
the parties agree to abide by such court's
determination.
(e) The provisions of this Section 7 shall
remain in full force and effect until the
expiration of the period specified therein,
notwithstanding the earlier termination of
the Executive's employment hereunder, the
Employment Period or this Agreement,
provided that the Effective Date has
occurred.
8. Successors.
(a) This Agreement is personal to the
Executive and without the prior written
consent of the Company and Parent shall not
be assignable by the Executive otherwise
than by will or the laws of descent and
distribution. This Agreement shall inure to
the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the
benefit of and be binding upon the Company
and Parent and their respective successors
and assigns.
(c) The Company and Parent will require any
successor (whether direct or indirect, by
purchase, merger, consolidation or
otherwise) to all or substantially all of
the business and/or assets of the Company or
Parent, as applicable, to assume expressly
and agree to perform this Agreement in the
same manner and to the same extent that the
Company and/or Parent would be required to
perform it if no such succession had taken
place. As used in this Agreement, "Company"
and "Parent" shall mean the Company and
Parent as hereinbefore defined and any
successor to their respective businesses
and/or assets as aforesaid which assumes and
agrees to perform this Agreement by
operation of law, or otherwise. As used in
this Agreement, the term "affiliated
companies" and "affiliates" shall include
any company controlled by, controlling or
under common control with the Company.
9. Dispute Mechanism.
(a) Pre-Effective Date Agreements. To the
extent that there is any dispute between the
parties with respect to any benefits payable
hereunder which are due and payable under a
Pre-Effective Date Agreement (including,
without limitation, the amounts payable
under Section 3(b)(i), the SERA benefits
payable under Section 3(b)(v) and the
benefits payable or provided under Section
5(a)(i)(D)), such dispute shall be resolved
pursuant to the mechanism set forth in
Section 20 of the Prior Employment
Agreement, which is incorporated by
reference herein and made a part hereof, and
Parent shall be obligated to pay (or shall
cause the Company to pay) the Executive's
legal and arbitration fees and expenses as
provided under Section 10 of the Prior
Employment Agreement, which is incorporated
by reference herein and made a part hereof.
(b) Benefits and Claims Not Related to the
Pre-Effective Date Agreements. To the extent
that there is any dispute between the
parties with respect to any benefits payable
hereunder which are not due and payable
under a Pre-Effective Date Agreement (and
therefore not subject to the dispute
mechanism set forth in Section 9(a) above),
Parent shall be obligated to pay (or shall
cause the Company to pay) the Executive's
legal and arbitration fees and expenses
related to such dispute in the event that
the Executive prevails at arbitration or
trial as to any material issue presented in
such dispute.
10. Miscellaneous.
(a) This Agreement shall be governed by and
construed in accordance with the laws of the
State of New York, without reference to
principles of conflict of laws. The captions
of this Agreement are not part of the
provisions hereof and shall have no force or
effect. This Agreement may not be amended or
modified otherwise than by a written
agreement executed by the parties hereto or
their respective successors and legal
representatives.
(b) All notices and other communications
hereunder shall be in writing and shall be
given by hand delivery to the other party or
by registered or certified mail, return
receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
At the most recent address on file
at the Company
If to the Company:
American General Corporation
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Copy to Parent:
American International Group, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
or to such other address as either party
shall have furnished to the other in writing
in accordance herewith. Notice and
communications shall be effective when
actually received by the addressee.
(c) The invalidity or unenforceability of
any provision of this Agreement shall not
affect the validity or enforceability of any
other provision of this Agreement.
(d) The Company's obligations (i) to
indemnify the Executive pursuant to Section
3(vii), (ii) to provide the Executive with
benefits and compensation pursuant to
Section 5, (iii) to pay any gross-up payment
required to be paid under Section 3(b)(i),
and (iv) to pay any amount not previously
paid (and required to be paid hereunder ) in
respect of any Pre-Effective Date Agreement,
as well as the dispute mechanisms set forth
in Section 9, shall survive the termination
of the Executive's employment hereunder, the
Employment Period or this Agreement,
provided that the Effective Date has
occurred.
(e) None of the benefits provided to the
Executive under any of the Pre-Effective
Date Agreements or under Section 5 hereof
shall be subject to any mitigation or
offset, except as may otherwise be expressly
provided hereunder.
(f) The Company or Parent may withhold from
any amounts payable under this Agreement
such Federal, state, local or foreign taxes
as shall be required to be withheld pursuant
to any applicable law or regulation.
(g) The Executive's or the Company's or
Parent's failure to insist upon strict
compliance with any provision of this
Agreement or the failure to assert any right
the Executive, the Company or Parent may
have hereunder shall not be deemed to be a
waiver of such provision or right or any
other provision or right of this Agreement.
(h) From and after the Effective Date, this
Agreement shall supersede and terminate the
Severance Agreement, the Prior Employment
Agreement, and any amendments thereto,
except to the extent that any of the
benefits made available under the Prior
Employment Agreement are expressly intended
to continue under the terms of this
Agreement. From and after the Effective
Date, the SERA and the Split-Dollar
Agreement shall be amended in accordance
with the terms hereof, and, upon
satisfaction of the Company's obligations as
set forth herein, the Company and Parent
shall have no further obligations under such
agreements.
IN WITNESS WHEREOF, the Executive
has hereunto set the Executive's hand and,
pursuant to the authorization from their
respective Boards of Directors, each of the
Company and Parent has caused these presents
to be executed in its name on its behalf,
all as of the day and year first above
written.
/s/ Xxxxxx X. Xxxxxx
XXXXXX X. XXXXXX
AMERICAN GENERAL CORPORATION
By /s/ Xxxx X. Xxxx
Name: XXXX X. XXXX
Title:Executive Vice President, General
Counsel and Corporate Secretary
AMERICAN INTERNATIONAL GROUP, INC.
By /s/ Xxxxxx X. Xxxxxxxx
Name: XXXXXX X. XXXXXXXX
Title:Senior Vice President and General Counsel
Exhibit A
Name: Xxxxxx X. Xxxxxx
Position: Senior Vice Chairman
Adjustments to Responsibilities: Excluding
responsibilities related to consumer
finance.
Location: Houston, Texas
Cash Severance Amount: $5,062,500
Split-Dollar Payment: $572,052
Annual Bonus: $1,250,000
