Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 19, 2009, Edmund S.W. Tse notified American International Group, Inc. (AIG) that he would be retiring as Senior Vice Chairman-Life Insurance of AIG, effective at the AIG 2009 Annual Meeting of Shareholders. In connection with his retirement, Mr. Tse also will not be standing for re-election to the AIG Board of Directors. Except as noted below, Mr. Tse will retire from all director and officer positions that he currently holds at AIG subsidiaries effective at the Annual Meeting.
Mr. Tse is retiring at age 71, having worked with AIG since 1961. At the request of AIG, Mr. Tse has agreed to enter into a Service Agreement with American International Assurance Company, Limited (AIA), an insurance subsidiary of AIG based in Hong Kong, that will become effective upon his retirement from AIG. As part of that agreement, Mr. Tse agreed to serve as Honorary Chairman of AIA and Non-Executive Chairman of each of Nan Shan Life Insurance Company, Limited and The Philippine American Life and General Insurance Company for a one-year period, subject to future extensions as agreed between AIA and Mr. Tse. AIG requested this continuing service so that it would continue to benefit from Mr. Tse's expertise and relationships in Asia as AIG continues its restructuring and divestiture program. As part of the agreement, Mr. Tse agreed to abide by certain restrictive covenants and to execute a release of claims in favor of AIG. Mr. Tse will receive an annual fee of U.S. $250,000 for his service. The agreement is terminable on 30 days notice by either party, in which case the fee would be prorated. In addition, Mr. Tse will be eligible to receive a transaction bonus in an amount to be determined by AIG in its sole discretion in the event of a sale or initial public offering of any of AIG's foreign life operations (subject to limitations imposed by any other agreement or arrangement of AIG).

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