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Dec 29 (Reuters) - The following were the top stories in The Wall Street Journal on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy.
* American International Group Inc (AIG.N) is preparing to pay its outgoing general counsel Anastasia Kelly several million dollars in severance after she resigned over federal pay curbs, according to people familiar with the matter.
* Morgan Stanley (MS.N) is poised to overhaul the way it pays its most senior executives, deferring more of their compensation over time, and benchmarking their pay against rival firms.
* The Federal Reserve proposed selling interest-bearing term deposits to banks, a move the U.S. central bank would make when it decides to drain some of the liquidity it pumped into the economy during the financial crisis.
* An aggrieved suitor in a 2006 bid to buy an appliance firm alleges that Harbinger Capital Partners, a prominent hedge fund that won the takeover battle, received nonpublic information about the rival bid and accumulated a big stake before the deal talks were made public, according to documents cited in a preliminary ruling in the Delaware Chancery Court.
* Nufarm Ltd (NUF.AX) said it has rejected a revised 2.62 billion Australian dollar (US$2.33 billion) takeover offer from China's Sinochem and has instead agreed for Sumitomo Chemical Co (4005.T) to buy a 20 percent stake through a tender offer to existing shareholders.
* Brazil's leading airline, TAM SA TAMM4.SA TAM.N, expects the country's domestic aviation market to grow by up to 12 percent next year as incomes and employment levels continue to rise in Latin America's largest economy and new promotions attract first-time, lower-income fliers.
* Sumitomo Mitsui Financial Group Inc (8316.T), Japan's third largest bank by assets, may consider raising capital by issuing common shares if needed to further expand its business, its president said.
* Russia has rid itself of Soviet-era debt, paving the way for it to re-enter international capital markets after a decade.