2007 Annual Report - AIG.com

American International Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements Continued
17. Share-based Employee Compensation Plans
Continued
The following table presents a summary of shares relating to outstanding awards unvested under the foregoing plans at
December 31, 2007, and changes for the year then ended * :
Number of Shares
Weighted Average Grant-Date Fair Value
Total Total Total Total
Time-vested AIG Partners AIG SICO Time-vested AIG Partners AIG SICO
RSUs DCPPP Plan Plan Plans RSUs DCPPP Plan Plans Plans
Unvested at January 1, 2007 7,181,595 4,590,622 3,607,040 15,379,257 11,443,772 $66.56 $52.09 $56.50 $59.88 $61.72
Granted 4,752,738 — 2,547,620 7,300,358 — 57.90 — 53.93 56.51 —
Vested (168,214) (196,690) (550) (365,454) (1,691,306) 63.82 61.44 66.97 62.55 64.18
Forfeited (422,431) (173,472) (1,212,585) (1,808,488) (282,657) 65.34 53.25 56.83 58.47 59.93
Unvested at December 31,
2007 11,343,688 4,220,460 4,941,525 20,505,673 9,469,809 $63.01 $54.53 $55.08 $59.36 $61.27
* Options and DSUs awarded under the 2007 Plan are not included. For the AIG DCPPP, includes all incremental shares granted or to be granted.
The total unrecognized compensation cost (net of ex-
In 2007, AIG acquired the outstanding minority interest of 21st
pected forfeitures) related to non-vested share-based
Century. Assets, obligations and costs with respect to 21st
compensation awards granted under the 2002 Plan, the Century’s plans are included herein. The assumptions used by
2007 Plan, the AIG DCPPP, and the SICO Plans at 21st Century in its plans were not significantly different from
December 31, 2007 and the blended weighted-average those used by AIG in AIG’s U.S. plans.
periods over which those costs are expected to be
AIG also sponsors several unfunded defined benefit plans for
recognized at December 31, 2007 are as follows:
certain employees, including key executives, designed to supplement
pension benefits provided by AIG’s other retirement plans.
Blended
Unrecognized Weighted- These include the AIG Excess Retirement Income Plan, which
Compensation Average provides a benefit equal to the reduction in benefits payable to
(in millions) Cost Period certain employees under the AIG U.S. retirement plan as a result
Time-vested RSUs - 2002 Plan $218 1.35 years of federal tax limitations on compensation and benefits payable,
Time-vested RSUs - 2007 Plan $209 2.05 years and the Supplemental Executive Retirement Plan (Supplemental
AIG DCPPP $146 5.47 years Plan), which provides additional retirement benefits to designated
Total AIG Plans $573 2.65 years executives. Under the Supplemental Plan, an annual benefit
Total SICO Plans $249 5.93 years accrues at a percentage of final average pay multiplied by each
year of credited service, not greater than 60 percent of final
The total cost for awards outstanding at December 31, 2007
average pay, reduced by any benefits from the current and any
under the 2002 Plan, the 2007 Plan, the AIG DCPPP and the
predecessor retirement plans (including the AIG Excess Retire-
SICO Plans is expected to be recognized over approximately
ment Income Plan and any comparable plans), Social Security, if
4 years, 4 years, 32 years and 32 years, respectively.
any, and from any qualified pension plan of prior employers.
18. Employee Benefits
Postretirement Plans
Pension Plans
AIG and its subsidiaries also provide postretirement medical care
and life insurance benefits in the U.S. and in certain
non-U.S. countries. Eligibility in the various plans is generally
based upon completion of a specified period of eligible service
and attaining a specified age. Overseas, benefits vary by geo-
graphic location.
U.S. postretirement medical and life insurance benefits are
based upon the employee electing immediate retirement and
having a minimum of ten years of service. Medical benefits are
contributory, while the life insurance benefits are non-contributory.
Retiree medical contributions vary with age and length of service
and range from requiring no cost for pre-1989 retirees to requiring
actual premium payments reduced by certain credits for post-
1993 retirees. These contributions are subject to adjustment
annually. Other cost sharing features of the medical plan include
deductibles, coinsurance and Medicare coordination and a lifetime
maximum benefit of $2 million.
AIG, its subsidiaries and certain affiliated companies, offer
various defined benefit plans to eligible employees based on
either completion of a specified period of continuous service or
date of hire, subject to age limitations.
AIG’s U.S. retirement plan is a qualified, noncontributory
defined benefit plan which is subject to the provisions of ERISA.
U.S. employees who are employed by a participating company,
have attained age 21 and completed twelve months of continuous
service are eligible to participate in this plan. Employees generally
vest after 5 years of service. Unreduced benefits are paid to
retirees at normal retirement (age 65) and are based upon a
percentage of final average compensation multiplied by years of
credited service, up to 44 years. Non-U.S. defined benefit plans
are generally either based on the employee’s years of credited
service and compensation in the years preceding retirement, or on
points accumulated based on the employee’s job grade and other
factors during each year of service.
188 AIG 2007 Form 10-K