(Form for Xxxxxxxxxx and Xxxxxx)
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS AGREEMENT is made as of the 1st
day of May, 2000, by and between AMERICAN
GENERAL CORPORATION, a Texas corporation
(the "Company"), and [ ] (the
"Executive").
WHEREAS, the Executive has been
employed by the Company in valuable
executive service to the Company; and
WHEREAS, the Company desires to reward
such past service and to encourage and
reward the continued employment of Executive
with the Company until his retirement and to
promote his devotion to his duties on behalf
of the Company without uncertainty or
concern as to his retirement income security
or that of his spouse;
NOW, THEREFORE, the Company and the
Executive hereby enter into this
Supplemental Executive Retirement Agreement
as hereinafter provided:
ARTICLE I.
GENERAL
Section 1.1 Effective Date. This
Agreement shall be effective as of May 1,
2000 (the "Effective Date").
Section 1.2 Defined Terms. The
definitions of capitalized terms used in
this Agreement (if not provided where a
capitalized term initially appears) are
provided in the last Article hereof.
ARTICLE II.
RETIREMENT BENEFITS
Section 2.1 Normal Retirement Benefit.
If the Executive retires on or after his
Normal Retirement Date, the Retirement
Benefit shall be an annual retirement
benefit payable to the Executive for his
lifetime, with a ten-year term certain (the
"Normal Retirement Benefit"), in an annual
amount equal to (X) minus (Y), calculated as
follows:
(A) The amount of (X) equals (a)
multiplied by (b):
(a) sixty-seven-and-2/10ths
percent (67.2%) of such
Executive's Final Average
Compensation;
(b) the fraction equal to his
Years of Service (not in
excess of twenty-eight (28)
years) divided by twenty-
eight (28); and
(B) The amount of (Y) equals (e) plus
(f) plus (g):
(e) the Social Security
Benefit;
(f) the Qualified Plan Benefit;
and
(g) the Restoration Plan
Benefit.
Unless the Executive shall have
notified the Company in writing no later
than July 1, 2000 (and prior to any
termination of his employment) of his
election that this paragraph shall be null
and void and of no effect, then,
notwithstanding the foregoing provisions of
this Section 2.1, if payment of a lump sum
amount equal to the actuarial equivalent of
a Normal Retirement Benefit is to be made
pursuant to Section 2.6 hereof, the annual
amount of the Normal Retirement Benefit
shall equal (X) minus (Y), where (X) is
calculated as set forth above, but the
amount of (Y) equals only the Social
Security Benefit plus the Qualified Plan
Benefit (and not the Restoration Plan
Benefit). The resulting increase in such
lump sum amount shall be paid in lieu of any
Restoration Plan Benefit under the
circumstances described in Section 2.6
hereof and the Executive hereby waives his
right to any Restoration Plan Benefit under
(and only under) such circumstances.
Section 2.2 Early Retirement Benefit.
If the Executive retires on or after his
Early Retirement Date (but before his Normal
Retirement Date), the Retirement Benefit
shall be the annual Retirement Benefit
computed under Section 2.1, reduced as
follows:
(A) If payment of the Retirement
Benefit commences after the
Executive has attained age sixty
(60), the Retirement Benefit shall
be reduced by two-and-one-half
percent (2.5%) per year for each
complete year between such
commencement
and the Executive's
Normal Retirement Date; the
reduction per year shall be pro-
rated for incomplete years;
(B) If payment of the Retirement
Benefit commences before the
Executive attains age sixty (60),
the Retirement Benefit shall be
further reduced (beyond the
reduction imposed by Section
2.2(A) hereof) by five percent
(5%) per year for each complete
year between such commencement and
the Executive's attaining age
sixty (60); the reduction per year
shall be pro-rated for incomplete
years.
Section 2.3 Termination of Employment
Prior to Early Retirement Date and Normal
Retirement Date. If the Executive incurs a
termination of employment with the Company
after satisfying the vesting requirement
under Section 2.7, but before attaining
either an Early Retirement Date or a Normal
Retirement Date, he shall receive a
Retirement Benefit determined under Section
2.1, but, unless such termination is
described in Section 2.6 hereof, such
benefit shall be calculated by using his
actual Years of Service (including all
periods credited as Years of Service
pursuant to this Agreement) and actual
compensation at the time of his termination
and the actual Social Security Benefit that
he is entitled to receive at his Normal
Retirement Date. Unless such termination is
described in Section 2.6 hereof, payment of
such benefit shall commence after, but not
more than sixty (60) days after, his Normal
Retirement Date.
Section 2.4 Disability. If the
Executive is receiving either short-term or
long-term disability benefits under any
Company plan, then, during the period of
payment of such disability benefits, the
Executive shall be treated as employed for
all purposes of the Agreement, including,
without limitation, attainment of the age,
service and vesting requirements under the
Agreement. The parties hereto agree that
such disability benefits will cease and the
Executive will no longer be considered
employed by the Company on the date on which
the Executive attains his Normal Retirement
Age. Payment of the Executive's Retirement
Benefit shall commence after, but not more
than sixty (60) days after, his Normal
Retirement Date.
Section 2.5 Termination by Reason of
Death. If the Executive dies (i) while in
the employment of the Company, (ii) after
the attainment of age fifty-five (55), (iii)
having been credited with ten (10) Years of
Service, and (iv) prior to the commencement
of the payment of the Retirement Benefit
hereunder, the Executive's surviving spouse,
if any, shall receive for her lifetime an
annual benefit equal to the two-thirds (2/3)
survivor annuity she would have received had
the Executive retired on the day before his
death, deeming the Executive, for purposes
of this Section 2.5 only, to have elected a
joint and survivor annuity payable
immediately at a reduced amount with a two-
thirds (2/3) survivor annuity. The payment
of spouse's benefit shall commence not later
than sixty (60) days after the Executive's
death.
Section 2.6 Termination on or after
Change in Control; Certain Other
Terminations. Notwithstanding any other
provision of this Agreement, upon any
termination of the Executive's employment
(whether occurring before or after any
Change in Control), which termination is (i)
by the Company without Cause, or (ii) by the
Executive with Good Reason (as such terms
are defined in the Executive's Employment
Agreement with the Company dated as of May 1,
2000, as it may be amended from time to
time (the "Employment Agreement")), the
Company shall pay the Executive within the
five (5) business days immediately following
such termination a lump sum amount, in cash,
equal to the actuarial equivalent of the
Normal Retirement Benefit which the
Executive would have accrued, if the
Executive had accumulated (after his
termination of employment) thirty-six (36)
additional months of service and age credit
(but in no event shall the Executive be
deemed to have accumulated additional
service and age credit after the Executive's
sixty-fifth birthday). For purposes of this
Section 2.6, an "actuarial equivalent" shall
be determined using the same assumptions
utilized under the American General
Retirement Plan (or any successor plan
thereto) immediately prior to the
Executive's termination of employment, or,
if earlier and more favorable to the
Executive, immediately prior to the Change
in Control. The Retirement Benefit so
calculated shall be based on a projected Social
Security Benefit that is determined under
the provisions of the Social Security Act as
in effect on the date of such termination,
using the estimated "primary insurance
amount" the Executive would be entitled to
under such Act
at his Normal Retirement
Date, assuming (i) the amount of income he
is receiving on the date such termination
becomes effective which would be treated as
wages for purposes of such Act would remain
constant through his Normal Retirement Date,
and (ii) an annual cost-of-living adjustment
equal to four percent (4%). Notwithstanding
the foregoing provisions of this Section
2.6, if termination of the Executive's
employment occurs after a Change in Control
(or during a Period of Anticipated Change in
Control, as defined in the Executive's
Change in Control Severance Agreement with
the Company, as it may be amended from time
to time (the "Severance Agreement")) and if
payment of a lump sum amount equal to the
actuarial equivalent of a Normal Retirement
Benefit is to be made pursuant to this
Section 2.6 after the Executive shall have
attained age 57, the Normal Retirement
Benefit calculated pursuant to this Section
2.6 shall not be less than the Normal
Retirement Benefit which the Executive would
have accrued if the Executive had continued
to be employed by the Company until his
Normal Retirement Date.
Section 2.7 Vesting of Retirement
Benefit. The Executive shall have a vested
right to his Retirement Benefit upon the
occurrence of any of the following while the
Executive is employed by the Company:
(i) his completion
of ten (10) Years
of Service;
(ii) the attainment
of his Normal
Retirement Age;
(iii) the termination of
the Executive's
employment pursuant
to Section 8(c) of
the Employment
Agreement; or
(iv) the occurrence of a
Change in Control
at any time.
Section I.8 Time and Form of Payment.
(A) Time of Payment. Except where
specifically otherwise provided herein, the
payment of any Retirement Benefit to which
the Executive has become entitled shall
commence after, but no more than sixty (60)
days after, the Executive's date of
retirement.
The Executive shall give the
Company reasonable advance notice in writing
of his intention to retire (which shall be
given at least one month before his intended
retirement date).
(B) Normal Form of Payment. A life
annuity with a ten-year term certain is the
normal form of payment of the Retirement
Benefit for the Executive and any actuarial
equivalents to be calculated pursuant to
this Agreement will be based on the normal
form of payment. If the Executive dies after
payment of the Retirement Benefit in the
normal form has commenced, payments shall
continue for the remainder of the ten-year
term certain to the beneficiary or
beneficiaries designated by the Executive by
written instruction delivered to the
Administrator during the Executive's
lifetime. The Executive may designate one or
more primary and contingent beneficiaries to
receive the remaining payments of the
Retirement Benefit, and may designate the
proportions in which such beneficiaries are
to receive such payments. The Executive may
change such designations from time to time,
and the last written designation filed with
the Administrator prior to the Executive's
death shall control. If the Executive fails
to specifically designate a beneficiary, or
if no designated beneficiary survives the
Executive, payment shall be made by the
Administrator in the following order of
priority:
(i) to the Executive's
surviving spouse, or,
if none,
(ii) to the Executive's
children, or, if none,
(iii) to the Executive's
estate.
(C) Election of Alternative Forms
of Payment. Subject to Section 2.6 hereof,
the Executive can elect that his Retirement
Benefit be paid in any of the following
forms by an irrevocable election in writing
which is delivered to the Company within
sixty (60) days after the Effective Date,
or, with the permission of the Committee, by
an irrevocable election in writing which is
delivered to the Company at any time before
his retirement becomes effective:
(i) a joint and survivor
annuity payable at a
reduced amount for the
life of the Executive
with a survivor annuity
for the life of the
Executive's surviving
spouse which shall be
one hundred percent
(100%) of the annuity
payable during the
joint lives of the
Executive and the
surviving spouse;
(ii) a joint and survivor
annuity payable at a
reduced amount for the
life of the Executive
with a survivor annuity
for the life of the
Executive's surviving
spouse which shall be
seventy-five percent
(75%) of the annuity
payable during the
joint lives of the
Executive and the
surviving spouse;
(iii) a joint and survivor
annuity payable at a
reduced amount for the
life of the Executive
with a survivor annuity
for the life of the
Executive's surviving
spouse which shall be
fifty percent (50%) of
the annuity payable
during the joint lives
of the Executive and
the surviving spouse;
or
(iv) a lump-sum payment of
the actuarial present
value of the normal
form of payment of the
Retirement Benefit.
In calculating an alternative form of
payment for the Retirement Benefit, the
Administrator shall use the same assumptions
utilized under the American General
Retirement Plan (or any successor plan
thereto) immediately prior to the
Executive's termination of employment, or,
if a Change in Control shall have occurred
prior to the Executive's termination of
employment, the assumptions so utilized
immediately prior to the Change in Control,
if more favorable to the Executive.
ARTICLE III.
ADMINISTRATION
Section 3.1 General. Except as
otherwise specifically provided in the
Agreement, the Administrator shall be
responsible for administration of the
Agreement.
Section 3.2 Administrative Rules. The
Administrator may adopt such rules of
procedure as it deems desirable for the
conduct of its affairs, except to the extent
that such rules conflict with the provisions
of the Agreement.
Section 3.3 Duties. The Administrator
shall have the following rights, powers and
duties:
(A) The decision of the Administrator
in matters within its jurisdiction
shall be final, binding and
conclusive upon the Company and
upon any person affected by such
decision, subject to the claims
procedure hereinafter set forth.
(B) The Administrator shall have the
duty and authority to interpret
and construe the provisions of the
Agreement, to determine
eligibility for a Retirement
Benefit and the appropriate amount
of any Retirement Benefit, to
decide any question which may
arise regarding the rights of the
Executive hereunder and to
exercise such powers as the
Administrator may deem necessary
for the administration of the
Agreement.
(C) The Administrator shall maintain
full and complete records of its
decisions. Its records shall
contain all relevant data
pertaining to the Executive and
his rights and duties under the
Agreement. The Administrator shall
maintain a bookkeeping account
with respect to payment of any
Retirement Benefit.
(D) Notwithstanding any other
provision of this Agreement, upon
and after the occurrence of a
Change in Control and within the
six-month period immediately
preceding a Change in Control, the
Administrator's authority and
powers
shall not be used to
interpret or construe the
provisions hereof in any way (or
to take any other action) which
would adversely affect any right
given the Executive by this
Agreement.
Section 3.4 Fees. No fee or
compensation shall be paid to any person for
services as the Administrator.
ARTICLE IV.
CLAIMS PROCEDURE
Section 4.1 General. Any claim for a
Retirement Benefit under the Agreement shall
be filed by the Executive or beneficiary
(either of which is referred to in this
Article as the "claimant") in the manner
prescribed by the Administrator.
Section 4.2 Denials. If a claim for a
Retirement Benefit under the Agreement is
wholly or partially denied, notice of the
decision shall be furnished to the claimant
by the Administrator within a reasonable
period of time after receipt of the claim by
the Administrator.
Section 4.3 Notice. Any claimant who
is denied a claim for Retirement Benefits
shall be furnished written notice setting
forth:
(i) the specific reason or
reasons for the denial;
(ii) specific reference to the
pertinent provision of the
Agreement upon which the
denial is based;
(iii) a description of any
additional material or
information necessary of
the claimant to perfect the
claim; and
(iv) an explanation of the
claims review procedure
under the Agreement.
Section 4.4 Appeals Procedure. In
order that a claimant may appeal a denial of
a claim, the claimant or the claimant's duly
authorized representative may:
(i) request a review by written
application to the
Committee, no later than
sixty (60) days after
receipt by the claimant of
written notification of
denial of a claim;
(ii) review pertinent documents;
and
(iii) submit issues and comments
in writing.
Section 4.5 Review. A decision on
review of a denied claim shall be made by
the Committee not later than sixty (60) days
after receipt of a request for review,
unless special circumstances require an
extension of time for processing, in which
case a decision shall be rendered within a
reasonable period of time, but not later
than one-hundred-and-twenty (120) days after
receipt of a request for a review. The
decision on review shall be in writing and
shall include the specific reason(s) for the
decision and the specific references(s) to
the pertinent provisions of the Agreement on
which the decision is based.
Section 4.6 Arbitration. Any further
dispute or controversy arising under or in
connection with this Agreement which is not
resolved by agreement pursuant to Sections
4.1 through 4.5 hereof shall be resolved by
binding arbitration pursuant to the Federal
Arbitration Act in accordance with the
Employment Dispute Resolution Rules then in
effect with the American Arbitration
Association. The arbitration proceeding
shall be conducted in Houston, Texas. This
agreement to arbitrate shall be enforceable
in either federal or state court.
The enforcement of this agreement to
arbitrate and all procedural aspects of this
agreement to arbitrate, including but not
limited to, the construction and
interpretation of this agreement to
arbitrate, the issues subject to arbitration
(i.e., arbitrability), the scope of the
arbitrable issues, allegations of waiver,
delay or defenses to arbitrability, and the
rules governing the conduct of the arbitra
tion, shall be governed by and construed
pursuant to the Federal Arbitration Act and
shall be decided by the arbitrators. In
deciding the substance of any such claims,
the arbitrators shall apply the substantive
laws of the State of Texas (excluding Texas
choice-of-law principles that might call for
the
application of some other state's law);
provided, however, it is expressly agreed
that the arbitrators shall have no authority
to award treble, exemplary, or punitive
damages under any circumstances regardless
of whether such damages may be available
under Texas law, the parties hereby waiving
their right, if any, to recover treble,
exemplary, or punitive damages in connection
with any such claims.
The arbitration may be initiated by any
party by providing to the other parties a
written notice of arbitration specifying the
claims. Within thirty (30) days of the
notice of initiation of the arbitration
procedure, (1) the Executive shall
denominate one arbitrator and (2) the
Company shall denominate one arbitrator. The
two arbitrators shall select a third
arbitrator failing agreement on which within
sixty (60) days of the original notice,
either the Executive or the Company shall
apply to the Senior Active United States
District Judge for the Southern District of
Texas, who shall appoint a third arbitrator.
While the third arbitrator shall be neutral,
the two party-appointed arbitrators are not
required to be neutral and it shall not be
grounds for removal of either of the two
party-appointed arbitrators or for vacating
the arbitrators' award that either of such
arbitrators has past or present minimal
relationships with the party that appointed
such arbitrator. Evident partiality on the
part of an arbitrator exists only where the
circumstances are such that a reasonable
person would have to conclude there in fact
existed actual bias and a mere appearance or
impression of bias will not constitute
evident partiality or otherwise disqualify
an arbitrator.
The three arbitrators shall by majority
vote resolve all disputes between the
parties. There shall be no transcript of the
hearing before the arbitrators. The
arbitrators' decision shall be in writing,
but shall be as brief as possible. The
arbitrators shall not assign the reasons for
their decision. The arbitrators shall
certify in their award that they have
faithfully applied the terms and conditions
of this Agreement and that no part of their
award includes any amount for exemplary or
punitive damages. All proceedings conducted
hereunder and the decision of the
arbitrators shall be kept confidential by
the parties, e.g., the arbitrators' award
shall not be released to the press or
published in any of the various arbitration
reporters. Judgment upon any
award rendered in any such arbitration
proceeding may be entered by any federal or
state court having jurisdiction.
ARTICLE V.
MISCELLANEOUS PROVISIONS
Section 5.1 Amendment and Termination.
This Agreement may be amended or modified
only with the written consent of the parties
hereto.
Section 5.2 No Assignment. The
Executive shall not have the power to
pledge, transfer, assign, anticipate,
mortgage or otherwise encumber or dispose of
in advance any interest in amounts payable
hereunder of any of the payments provided
for herein, nor shall any interest in
amounts payable hereunder or in any payments
be subject to seizure for payments of any
debts, judgments, alimony or separate
maintenance, or be reached or transferred by
operation of law in the event of bankruptcy,
insolvency or otherwise.
Section 5.3 Successors and Assigns.
The provisions of the Agreement are binding
upon and inure to the benefit of each
Company, its successors and assigns, and the
Executive, his beneficiaries, heirs and
legal representatives.
Section 5.4 Governing Law. The
Agreement shall be subject to and construed
in accordance with the laws of the State of
Texas to the extent not preempted by the
provisions of ERISA.
Section 5.5 No Guarantee of
Employment. Nothing contained in the
Agreement shall be construed as a contract
of employment or deemed to give the
Executive the right to be retained in the
employ of an Company or any equity or other
interest in the assets, business or affairs
of an Company.
Section 5.6 Severability. If any
provision of the Agreement shall be held
illegal or invalid for any reason, such
illegality or invalidity shall not affect
the remaining provisions of the Agreement,
but the Agreement shall be construed and
enforced as if such illegal or invalid
provision had never been included herein.
Section 5.7 Notification of Addresses.
The Executive and each beneficiary shall
file with the Administrator, from time to
time, in writing, the post office address of
the Executive, the post office address of
each beneficiary, and each change of post
office address. Any communication, statement
or notice addressed to the last post office
address filed with the Administrator (or if
no such address was filed with the
Administrator, then to the last post office
address of the Executive or beneficiary as
shown on the Company's records) shall be
binding on the Executive and each
beneficiary for all purposes of the
Agreement and neither the Administrator nor
the Company shall be obliged to search for
or ascertain the whereabouts of the
Executive or beneficiary.
Section 5.8 Bonding. The Administrator
and all agents and advisors employed by it
shall not be required to be bonded, except
as may otherwise be required by ERISA.
Section 5.9 Taxes. The Company shall
have the right to withhold from any cash or
other amounts due or to become due from the
Company to a Executive (including by
reducing the amount of any Retirement
Benefit payable in the future) the amount of
any federal, state and local taxes required
to be withheld or otherwise deducted and
paid by the Company with respect to the
vesting or payment of any Retirement Benefit
hereunder.
Section 5.10 No Funding. There shall be
no funding of the benefit amounts to be paid
pursuant to this Agreement. The Agreement
shall not confer upon the Executive (or
beneficiary or any other person) any
security interest or any other right, title
or interest of any kind in or to any
property of the Company. The Agreement shall
constitute merely the unsecured promise of
the Company to make the benefit payments
provided for herein. Notwithstanding the
foregoing provisions of this Section 5.10,
the Company, in its discretion, may
establish a trust to pay the benefit amounts
hereunder, which trust shall be subject to
the claims of the Company's general
creditors in the event of the Company's
bankruptcy or insolvency. If such a trust is
established, the Company shall remain
responsible for the payment of any benefit
amounts provided hereunder which are not
paid in accordance with the provisions
hereof by such trust.
ARTICLE VI.
DEFINITIONS AND USAGE
Section 6.1 Definitions. Wherever used
in the Agreement, the following words and
phrases shall have the meaning set forth
below, unless the context plainly requires a
different meaning:
"Administrator" means the Company,
acting through the Personnel Committee of
the Board, or other person or persons
designated by the Personnel Committee.
"Affiliate" shall have the meaning set
forth in Rule 12b-2 promulgated under
Section 12 of the Exchange Act.
"Agreement" means this Supplemental
Executive Retirement Agreement, as set forth
herein and as amended from time to time.
"Beneficial Owner" shall have the
meaning set forth in Rule 13d-3 under the
Exchange Act.
"Board" means the Board of Directors of
the Company.
"Change in Control" means a change in
the control of the Company, which shall be
deemed to have occurred if the event set
forth in any one of the following paragraphs
shall have occurred:
(I)any Person is or becomes
the Beneficial Owner, directly or
indirectly, of securities of the
Company (not including in the
securities beneficially owned by
such Person any securities
acquired directly from the Company
or its Affiliates) representing
thirty percent (30%) or more of
the combined voting power of the
Company's then outstanding
securities, excluding any Person
who becomes such a Beneficial
Owner in connection with a
transaction described in clause
(i) of paragraph (III) below; or
(II) the following
individuals cease for any reason
to constitute a majority of the
number of directors then serving:
individuals
who, on the date
hereof, constitute the Board and
any new director (other than a
director whose initial assumption
of office is in connection with an
actual or threatened election
contest, including but not limited
to a consent solicitation,
relating to the election of
directors of the Company) whose
appointment or election by the
Board or nomination for election
by the Company's shareholders was
approved or recommended by a vote
of at least two-thirds (2/3) of
the directors then still in office
who either were directors on the
date hereof or whose appointment,
election or nomination for
election was previously so
approved or recommended; or
(III) there is consummated
a merger or consolidation of the
Company or any direct or indirect
subsidiary of the Company with any
other corporation (or a share
exchange between shareholders of
the Company or any direct or
indirect subsidiary of the Company
and another corporation or entity
pursuant to Article 5.02 (or any
successor provision thereto) of
the Texas Business Corporation
Act), other than (i) a merger or
consolidation which would result
in the voting securities of the
Company outstanding immediately
prior to such merger or
consolidation continuing to
represent (either by remaining
outstanding or by being converted
into voting securities of the
surviving entity or any parent
thereof), in combination with the
ownership of any trustee or other
fiduciary holding securities under
an employee benefit plan of the
Company or any subsidiary of the
Company, at least fifty-one
percent (51%) of the combined
voting power of the securities of
the Company or such surviving
entity or any parent thereof
outstanding immediately after such
merger or consolidation, or (ii) a
merger or consolidation effected
to implement a recapitalization of
the Company (or similar
transaction) in which no Person is
or becomes the Beneficial Owner,
directly or indirectly, of
securities of the Company
representing thirty percent (30%)
or more of the combined voting
power of the Company's then
outstanding securities; or
(IV) the shareholders of
the Company approve a plan of
complete liquidation or
dissolution of the Company or
there is consummated an agreement
for the sale or disposition by the
Company of all or substantially
all of the Company's assets, other
than a sale or disposition by the
Company of all or substantially
all of the Company's assets to an
entity, at least fifty-one percent
(51%) of the combined voting power
of the voting securities of which
are owned by shareholders of the
Company in substantially the same
proportions as their ownership of
the Company immediately prior to
such sale.
Notwithstanding the foregoing, a
"Change in Control" shall not be deemed to
have occurred by virtue of the consummation
of any transaction or series of integrated
transactions immediately following which the
record holders of the common stock of the
Company immediately prior to such
transaction or series of transactions
continue to have substantially the same
proportionate ownership in an entity which
owns all or substantially all of the assets
of the Company immediately following such
transaction or series of transactions.
"Code" means the Internal Revenue Code
of 1986, as amended from time to time. Any
reference to a particular Code section shall
include any provision which modifies,
replaces or supersedes it.
"Committee" shall mean the Personnel
Committee of the Board until six months
prior to the occurrence of a Change in
Control and thereafter shall mean (i) the
individuals (not fewer than three in number)
who, on the date six months before a Change
in Control, constitute the Personnel
Committee of the Board, plus (ii) in the
event that fewer than three individuals are
available from the group specified in clause
(i) above for any reason, such individuals
as may be appointed by the individual or
individuals so available (including for this
purpose any individual or individuals
previously so appointed under this clause
(ii)); provided, however,
that the maximum
number of individuals constituting the
Committee shall not exceed five.
"Company" means American General
Corporation, a Texas corporation, and,
except in determining under the definition
of Change in Control herein whether or not
any Change in Control of the Company has
occurred, shall include any successor to its
business and/or assets which assumes and
agrees to perform this Agreement by
operation of law, or otherwise.
"Early Retirement Date" means the first
date on which the Executive (i) has
completed ten (10) Years of Service and (ii)
has attained the age of fifty-five (55).
"ERISA" means the Employee Retirement
Income Security Act of 1974, as amended from
time to time. Any reference to a particular
ERISA section shall include any provision
which modifies, replaces, or supersedes it.
"Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended
from time to time.
"Final Average Compensation" means the
following sum divided by three (3): the sum
of the base salary received by the Executive
during, and the incentive payments received
by the Executive pursuant to any annual
bonus, incentive compensation or similar
plan maintained by the Company with respect
to, the three (3) calendar years (whether or
not consecutive) ending within the last
sixty (60) months of the Executive's
employment with the Company which produce
the highest total of such base salary and
incentive payments (for purposes of this
sentence, any amount of such base salary or
incentive payment which is deferred by the
Executive shall be included in the
calculation of amounts received).
Notwithstanding the immediately preceding
sentence, if the Executive's termination of
employment is described in Section 2.6
hereof and the Executive receives (pursuant
to Section 8(c)(iii) of his Employment
Agreement (or any successor provision
thereto), or Section 4.5 of his Severance
Agreement (or any successor provision
thereto) and in lieu of any further salary
or bonus payments) a lump sum amount (the
"Severance Amount"), Final Average
Compensation shall mean the Severance Amount
divided by three (3).
"Normal Retirement Age" means age sixty-
two (62).
"Normal Retirement Date" means the date
on which the Executive attains his Normal
Retirement Age.
"Person" shall have the meaning given
in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and
14(d) thereof, except that such term shall
not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other
fiduciary holding securities under an
employee benefit plan of the Company or any
of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to
an offering of such securities, or (iv) a
corporation owned, directly or indirectly,
by the shareholders of the Company in
substantially the same proportions as their
ownership of stock of the Company.
"Qualified Plan" means the American
General Retirement Plan, together with any
other defined benefit retirement plan
intended to be qualified under Section
401(a) of the Code which is adopted and
maintained by the Company and under which
the Executive is entitled to a retirement
benefit at the date of his retirement or
other termination of employment.
"Qualified Plan Benefit" means the
aggregate annual retirement benefit to which
the Executive (at the date of his retirement
or other termination of employment) is
entitled under the plan or plans which
comprise the Qualified Plan (expressed in
the form of a single life annuity with a ten-
year term certain commencing payment on the
date payment of the Retirement Benefit
hereunder commences).
"Restoration Plan Benefit" means the
annual retirement benefit to which the
Executive (at the date of his retirement or
other termination of employment) is entitled
under the American General Corporation
Restoration of Retirement Income Plan
(expressed in the form of a single life
annuity with a ten-year term certain
commencing payment on the date payment of
the Retirement Benefit hereunder commences).
"Retirement Benefit" means the benefit
payable under this Agreement, as determined
under Article II.
"Social Security Benefit" means one-
half of the annual benefit payable under the
Social Security Act, relating to Old-Age and
Disability benefits, as of the Executive's
Normal Retirement Date, or upon actual
retirement, if later.
"Years of Service" means the total
number of years (measured in full and
partial years, in increments of one-twelfth
years) of active employment with the
Company during which substantial services
were rendered as an employee, commencing on
the date the Executive was first employed
by the Company and ending on the date he
ceases to perform services for the Company
(including employment before the Effective
Date), but in no event shall more than
twenty-eight (28) years be credited to the
Executive regardless of his actual period
of service with the Company.
Notwithstanding the foregoing, if the
Executive retires on or after the
attainment of age 62, he shall be credited
with twenty-eight (28) Years of Service.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement on the day and
year first above written.
AMERICAN GENERAL CORPORATION
By_____________________________
Xxxxxx X. Xxxxxx
Chairman, President and
Chief Executive Officer
____________________________
Executive
