Exhibit 10.9
July 22, 2015
JEFFREY J. HURD
EXECUTIVE VICE PRESIDENT
HUMAN RESOURCES
& ADMINISTRATION
175 Water Street, 30 th Floor
New York, NY 10038
T: 212,770.7292
Douglas A. Dachille
First Principles Capital Management, LLC
140 Broadway, 21st Floor
New York, NY 10005
Dear Doug:
We are pleased to confirm the terms of your joining American International Group, Inc. (“AIG” or the “Company”).
• Position. Beginning on the Closing Date or such earlier date as may be practicable for you, you will serve as Executive Vice President and Chief Investment Officer, AIG, a grade 30 position. In this capacity, you will be a member of the AIG Operating Committee and report directly to the Chief Executive Officer of AIG, Peter Hancock. “Closing Date” has the meaning provided in the Purchase and Sale Agreement, date pending, among AIG Capital Corporation and the members of First Principles Capital Management, LLC.
• Location & Employer. You will be based in New York, New York and employed directly by AIG (your "Employer").
• Total Direct Compensation. Your initial annual target direct compensation will be US$7,000,000.00 as follows:
• Base Salary. Your initial base cash salary will be at a rate of US$1,000,000.00 per year.
• Short Term Incentive. Your annual incentive target for 2015 will be US$2,000,000.00 and will not be pro-rated.
As a member of the AIG Operating Committee, your Short-Term Incentive Award will be based solely on objective Company measures and the performance of the Company as a whole. To maintain continuity with the American International Group Inc. Short-Term Incentive Plan, the Company’s general program for Short-Term Incentives for employees, which uses two scores that are multiplied together and are calibrated accordingly, awards for Operating Committee members are determined using two times the annual Company
funding score, measured against target. For example, if Company performance is 10% above target, awards for the Operating Committee would be 120% of target; conversely, if Company performance is 10% below target, Operating Committee awards would be 80% of target. The effect is to appropriately reflect objective Company performance (whether positive or negative) for Operating Committee members and bring the revised payout range from 0-125% to 0-150% of target.
For 2015, your award will vest upon grant (in the first quarter of the year following the performance year) provided you are still an employee of the Company on the grant date, and be payable 50% in March following the performance year and 50% following the one-year anniversary of the first payment.
Any bonus or incentive compensation paid to you is subject to the AIG Clawback Policy as may be amended from time to time.
• Long Term Incentive. For 2015, a recommendation on your behalf will be made to the Compensation and Management Resources Committee (CMRC) of the Board of Directors that, under the AIG Long Term Incentive Plan (the “LTIP”), you be granted Target Performance Share Units (PSUs) based on a cash value of US$4,000.000.00 for the three-year performance period covering January 2015 through December 2017, which will provide you the opportunity to earn shares of AIG Common Stock based on the degree of AIG’s achievement of its performance criteria, during the Performance Period. This recommendation and grant is contingent on your being an active employee of the Company on the date of CMRC approval of the grant, and will be subject to the terms and conditions of the relevant LTIP and the award agreement governing the grant.
Following the performance period, in the first quarter of 2018, the number of PSUs earned (from 0% to 150%) will be determined in accordance with the LTIP. Earned PSUs will vest in three equal installments, on January 1 of each 2018, 2019 and 2020, and each installment will be delivered in shares of AIG Common Stock no later than April 2018, January 2019 and January 2020, respectively.
Any long term incentive compensation paid to you is subject to the AIG Clawback Policy as may be amended from time to time.
• Benefits. You will be entitled to benefits consistent with senior executives of AIG and reimbursement of reasonable business expenses, in each case in accordance with applicable AIG policies as in effect from time to time.
• Paid Time Off. Consistent with AIG’s Paid Time Off (PTO) policy, you will receive a minimum
of 30 PTO days each calendar year, which will be prorated for 2015. Your PTO will accrue in accordance with the terms set forth in the AIG Employee Handbook with credit for prior service at FPCM.
• Executive Severance Plan. You will participate in the Company’s Executive Severance Plan.
• Notice Period. You agree that if you voluntarily resign, you will give six months’ written notice to the Company of your resignation, which may be working notice or non-working notice at the Company’s sole discretion and which notice period is waivable by the Company at the Company’s sole discretion.
• Clawback Policy. Any bonus, equity or equity-based award or other incentive compensation granted to you will be subject to the AIG Clawback Policy (and any other AIG clawback policies as may be in effect from time to time).
• Indemnification and Cooperation. During and after your employment, AIG will indemnify you in your capacity as a director, officer, employee or agent of AIG to the fullest extent permitted by applicable law and AIG's charter and by-laws, and will provide you with director and officer liability insurance coverage (including post-termination/post-director service tail coverage) on the same basis as AIG's other executive officers. AIG agrees to cause any successor to all or substantially all of the business or assets (or both) of AIG to assume expressly in writing and to agree to perform all of the obligations of AIG in this paragraph.
You agree (whether during or after your employment with AIG) to reasonably cooperate with AIG in connection with any litigation or regulatory matter or with any government authority on any matter, in each case, pertaining to AIG and with respect to which you may have relevant knowledge, provided that, in connection with such cooperation, AIG will reimburse your reasonable expenses and you shall not be required to act against your own legal interests.
• Tax Matters. Tax will be withheld by AIG as appropriate under applicable tax requirements for any payments or deliveries under this letter. To the extent any taxable expense reimbursement or in-kind benefits under this letter is subject to Section 409A of the U.S. Internal Revenue Code of 1986, the amount thereof eligible in one taxable year shall not affect the amount eligible for any other taxable year, in no event shall any expenses be reimbursed after the last day of the taxable year following the taxable year in which you incurred such expenses and in no event shall any right to reimbursement or receipt of in-kind benefits be subject to liquidation or exchange for another benefit. Each payment under this letter will be treated as a separate payment for purposes of Section 409A.
• No Guarantee of Employment or Target Direct Compensation. This offer letter is not a
guarantee of employment or target direct compensation for a fixed term.
• Entire Agreement. This offer letter constitutes AIG's only statement relating to its offer of employment to you and supersedes any previous communications or representations, oral or written, from or on behalf of AIG or any of its affiliates.
• Miscellaneous Representations. You confirm and represent to AIG, by signing this letter, that:
(a) you are under no obligation or arrangement (including any restrictive covenants with any prior employer or any other entity) that would prevent you from becoming an employee of AIG or that would adversely impact your ability to perform the expected services on behalf of AIG other than as previously disclosed in writing to AIG; (b) you have not taken (or failed to return) any confidential information belonging to your prior employer or any other entity, and, to the extent you remain in possession of any such information, you will never use or disclose such information to AIG or any of its employees, agents or affiliates; and (c) you understand and accept all of the terms and conditions of this offer.
• Non-solicitation. This offer and your employment with AIG are contingent on your entering into the enclosed Non-Solicitation and Non-Disclosure Agreement.
• Employment Dispute Resolution. You are a participant in the Company’s Employment Dispute Resolution (“EDR”) program, which provides for various ways to address work-related disputes, including mediation and arbitration, through the American Arbitration Association (“AAA”). Information on the company’s EDR Program is available to employees via the Company Intranet and can be made available to you prior to your date of hire upon request.
• Background Investigation. This offer is contingent upon the successful results of a background investigation, which may include, but may not be limited to, verification of employment, prior salary, professional certifications, designations or licenses, criminal and credit history, and educational background.
We look forward to having you as a member of AIG's senior leadership team.
Sincerely,
AMERICAN INTERNATIONAL GROUP, INC.
/s/ Jeffrey J. Hurd
By: Jeffrey J. Hurd
Executive Vice President – Human Resources and Administration
I agree with and accept the foregoing terms.
/s/ Douglas A. Dachille
Douglas A. Dachille Date: 7/22/2015
