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ITEM 8 / NOTE 21. SHARE-BASED COMPENSATION AND OTHER PLANS.....................................................................................................................................................................................21. SHARE-BASED COMPENSATION AND OTHER PLANS..............................................................................................................................................................................................Our Consolidated Statement of Operations included share-based compensation expense as follows:Years Ended December 31,(in millions) 2012 2011 2010Share-based compensation expense – pre-tax * $ 286 $ (16) $ 333Share-based compensation expense – after tax 186 (10) 216* As of December 31, 2012, compensation expense for the majority of our outstanding share-based awards is attributed to liability-classifiedawards, the value of which are based on our share price at the reporting date. Our share price was $35.30, $23.20 and $57.62 at December 31,2012, December 31, 2011 and December 31, 2010, respectively, and is the primary driver of the volatility in share-based compensation expense.Pre-tax share-based compensation expense related to discontinued operations for the years ended December 31, 2012, 2011 and 2010 of$15 million ($10 million after tax), ($4 million) (($3 million) after tax) and $18 million ($13 million after tax), respectively, is also included.Employee Plans..............................................................................................................................................................................................Our employees are granted awards under the AIG 2010 Stock Incentive Plan, as amended (2010 Plan), under whichwe have issued restricted stock, restricted stock units (RSUs) and stock appreciation rights (SARs). The 2010 Plansupersedes all plans for which share-based awards remain outstanding and is currently the only plan under whichshare-based awards can be issued.However, of all grants made under the legacy plans, only grants under the 2007 Stock Incentive Plan (the 2007Plan) and the Starr International Company, Inc. Deferred Compensation Profit Participation Plans (the SICO Plans)remain unvested as of December 31, 2012.Our share-settled awards are settled with newly-issued shares of AIG Common Stock. Share awards made by SICOare settled by SICO.Non-Employee Plans..............................................................................................................................................................................................Our non-employee directors received share-based compensation in the form of deferred stock units (DSUs) under the2010 Plan with delivery deferred until retirement from the Board. In 2012, 2011 and 2010, we granted to directors19,434, 21,203 and 14,484 DSUs, respectively.Stock Options..............................................................................................................................................................................................AIG Stock Option Plan..............................................................................................................................................................................................Options granted under the 2007 Plan and the 1999 Stock Option Plan are vested and out of the money atDecember 31, 2012. These awards generally vested over four years (25 percent vesting per year) and expired10 years from the date of grant. There were no stock options granted since 2008; however, in 2012, we issued558,358 shares in connection with previous exercises of options with delivery deferred.The following table provides a roll forward of stock option activity:WeightedAverageRemainingAs of or for the Year Weighted Average ContractualEnded December 31, 2012 Shares Exercise Price LifeOptions:Exercisable at beginning of year 710,298 $ 1,172.25 2.96Expired (196,053) $ 1,284.58Exercisable at end of year 514,245 $ 1,129.42 2.49The aggregate intrinsic value for all unexercised options is zero, and no unrecognized compensation costs remain forstock options under these plans at December 31, 2012...................................................................................................................................................................................................................................AIG 2012 Form 10-K 315
ITEM 8 / NOTE 21. SHARE-BASED COMPENSATION AND OTHER PLANS.....................................................................................................................................................................................Other Share-Settled Awards under Share-Based Plans..............................................................................................................................................................................................AIG 2010 Stock Incentive Plan..............................................................................................................................................................................................The 2010 Plan was adopted at the 2010 Annual Meeting of Shareholders. The total number of shares of AIGCommon Stock that may be granted under the 2010 Plan is 60,000,000 (the reserve). During 2012, 2011 and 2010,we granted DSUs, RSUs, restricted stock and stock appreciation rights (SARS) under the 2010 Plan. Each RSU,DSU, SAR and share of restricted stock awarded reduces the number of shares available for future grants by oneshare. The reserve is also reduced for the issuance of cash-settled share-based awards regardless of the form inwhich the award is originally granted. At December 31, 2012, a total of 25,031,720 shares remained in reserve forfuture grants under the 2010 Plan.AIG 2007 Stock Incentive Plan..............................................................................................................................................................................................The 2007 Plan was adopted at the 2007 Annual Meeting of Shareholders. The 2010 Plan superseded the 2007 Plan,therefore, there were no grants made under the 2007 Plan subsequent to May 11, 2010. During 2010, 114,521time-vested RSUs were granted under the 2007 Plan and vest on the second or the third anniversary of the date ofgrant.SICO Plans..............................................................................................................................................................................................The SICO Plans provide that shares of AIG Common Stock currently held by SICO are set aside for the benefit ofthe participant and distributed upon retirement. The SICO Board of Directors currently may permit an early payout ofshares under certain circumstances. Prior to payout, the participant is not entitled to vote, dispose of or receivedividends with respect to such shares, and shares are subject to forfeiture under certain conditions, including but notlimited to the participant’s termination of employment with us prior to normal retirement age. A significant portion ofthe awards under the SICO Plans vest the year after the participant reaches age 65, provided that the participantremains employed by us through age 65. The portion of the awards for which early payout is available vest on theapplicable payout date.Although none of the costs of the various benefits provided under the SICO Plans have been paid by us, we haverecorded compensation expense for the deferred compensation amounts payable to our employees by SICO, with anoffsetting amount credited to Additional paid-in capital reflecting amounts deemed contributed by SICO.Restricted Stock and Restricted Stock Unit Valuation..............................................................................................................................................................................................The fair value of restricted stock and RSUs is based on the closing price of AIG Common Stock on the date of grant.The following table summarizes outstanding share-settled awards and RSUs that are fully vested on the dateof grant but subject to transfer restrictions under the foregoing plans (a) :Weighted AverageNumber of Shares/RSUs Grant-Date Fair ValueAs of or for the Year AIG SICO AIG SICOEnded December 31, 2012 Plans (b) Plans Plans PlansUnvested, beginning of year (c) 48,892 195,907 $ 74.57 $ 1,209.45Granted 241,268 – 31.04 –Vested (240,765) (48,391) 34.47 747.11Forfeited (10,146) (27,572) 92.70 1,210.60Unvested, end of year 39,249 119,944 $ 48.29 $ 1,197.96(a) Excludes DSUs and options, which are discussed under the Non-Employee Plans and Stock Options sections above.(b) Excludes legacy Deferred Compensation Profit Participation and Partners Plan for which the final installments (38,959 RSUs) vested onJanuary 1, 2012.(c) Adjusted to reflect the Company’s election in 2012 to cash-settle RSUs that were previously expected to be share-settled.The total unrecognized compensation cost (net of expected forfeitures) related to unvested SICO awards is$46 million and the weighted-average and expected period of years over which those costs are expected to berecognized are 5.44 years and 27 years, respectively. The unrecognized expense for all other awards totals less than$1 million, with a weighted average period of less than one year...................................................................................................................................................................................................................................316 AIG 2012 Form 10-K
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American International Group, Inc.2
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KEY FACTS & FIGURES52,000+ $65.7 bi
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■We said we would return to profi
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Financial HighlightsYears Ended Dec
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~63,000AIG EMPLOYEES AROUND THE WOR
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$115.1 millionAVERAGE CLAIMS PAID E
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$10,000MAXIMUM DONATION MADE BY AIG
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American International Group, Inc.F
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AMERICAN INTERNATIONAL GROUP, INC.A
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ITEM 1 / BUSINESS / AIG............
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ITEM 1A / RISK FACTORS.............
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ITEM 6 / SELECTED FINANCIAL DATA...
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ITEM 6 / SELECTED FINANCIAL DATA...
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ITEM 7 / MANAGEMENT’S DISCUSSION
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ITEM 7 / INVESTMENTS...............
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ITEM 7 / GLOSSARY..................
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ITEM 7 / GLOSSARY..................
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ITEM 7A / QUANTITATIVE AND QUALITAT
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ITEM 8 / INDEX TO FINANCIAL STATEME
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AMERICAN INTERNATIONAL GROUP, INC.C
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ITEM 8 / NOTE 1. BASIS OF PRESENTAT
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Page 365 and 366: SignatureTitle/s/ ARTHUR C. MARTINE
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Valuation and Qualifying AccountsFo
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Subsidiaries of RegistrantExhibit 2
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Percentageof VotingSecuritiesJurisd
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Percentageof VotingSecuritiesJurisd
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CONSENT OF INDEPENDENT REGISTERED P
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CERTIFICATIONSI, Robert H. Benmosch
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CERTIFICATIONExhibit 32In connectio
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SECURITIES REGISTERED PURSUANT TO S
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American International Group, Inc.1
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