Warrant FAQ


  • 1. Why did AIG distribute warrants?
  • As part of a series of integrated transactions to recapitalize AIG in January 2011, AIG's Board of Directors declared a conditional dividend on January 6, 2011 to holders of record of AIG common stock as of January 13, 2011, the record date.  The dividend consisted of 10-year warrants to purchase up to 75 million shares of AIG common stock in the aggregate at a price of $45 per common share. The warrants were distributed on January 19, 2011.
  • 2. What was the record date for the January 2011 distribution of the warrants?
  • January 13, 2011
  • 3. What was the ex-dividend date for the January 2011 distribution of the warrants?
  • January 20, 2011
  • 4. What is the trading symbol for the warrants?
  • The warrants are listed on the NYSE under the ticker symbol "AIGWS", although different financial information websites may use slightly different formulations.
  • 5. What is the CUSIP number for the warrants?
  • The CUSIP number is 026874156.
  • 6. How many warrants did shareholders receive relating to the January 2011 distribution?
  • AIG common shareholders received 0.533933 warrants for each share of AIG common stock owned.  Each warrant entitled the holder to purchase one share of AIG common stock at a price of $45 per share, subject to anti-dilution adjustment for certain events. See FAQ#11 below for information about anti-dilution adjustments which have occurred.
  • 7. Was the issuance of the warrants a spin-off?
  • No. The issuance of the warrants was the result of a dividend.
  • 8. Do the warrants expire?
  • Yes. The warrants will expire on January 19, 2021, which is ten years from the date of issuance. If January 19, 2021 is not a business day, the warrants will expire on the next business day. The warrants may be exercised on any business day prior to 5:00 p.m. New York time.
  • 9. Will holders of the warrants be entitled to receive any future cash dividends?
  • No. Holders of unexercised warrants are not entitled to the rights of holders of AIG common stock, including the right to receive dividends. Future cash dividends, if any, would be paid on shares of AIG common stock outstanding on the record date set for any such dividend.
  • 10. What type of event would cause an anti-dilution adjustment to the warrant?
  • The initial exercise price is subject to anti-dilution adjustment for certain events, including (i) future stock dividends, distributions, subdivisions or combinations; (ii) the issuance of below market rights, options or warrants entitling the holder to purchase AIG common stock for a period of sixty days or less; (iii) dividends or other distributions of capital stock (other than AIG common stock); rights to acquire capital stock, debt or other assets (subject to certain exclusions); (iv) per share cash dividends in excess of $0.675 in the aggregate in any twelve-month period; and (v) certain above-market issuer tender offers for more than 30 percent of the then-outstanding AIG common stock.
  • 11. Have there been any anti-dilution adjustments to the warrants?
  • As previously disclosed, on November 2, 2015, AIG’s Board of Directors declared a dividend of $0.28 per share on AIG common stock, payable on December 21, 2015, to stockholders of record at the close of business on December 7, 2015.  This dividend resulted in a decrease in the exercise price of the warrants from $45.00 per share to $44.9036 per share and an increase in the number of shares of AIG common stock receivable upon exercise of a warrant from 1.000 to 1.002, each of which became effective at the close of business on December 7, 2015.  Any warrant exercised on or prior to December 7, 2015 was not entitled to these adjustments.
  • 12. In regards to the January 2011 distribution of the warrants, why did the warrants trade before the ex-dividend date?
  • The warrants began trading on the NYSE on a "when issued" basis on January 13, 2011. AIG was advised by the NYSE that from January 11, 2011 through January 19, 2011 AIG common stock traded with "due bills" attached, and that AIG common stock began trading in a regular way, ex-dividend, on January 20, 2011, the date following the distribution of the warrants. Due bills are essentially an assignment from a seller of common stock to a buyer of the right to receive the dividend.
  • 13. Did I receive certificates for the warrants or are they held in an electronic account?
  • The warrants are not certificated.
  • 14. How were fractional warrants handled?
  • Direct registration holders received whole and fractional warrants credited to their Wells Fargo account.

    Shareholders who held shares through a broker, bank or other intermediary might not have received fractional warrants. In many cases, brokers, banks or other intermediaries do not distribute fractional securities in connection with in-kind distributions, but rather pay their clients cash in lieu of posting the fraction of a security. Brokers, banks and other intermediaries set their own policies regarding fractional securities – AIG did not give instructions for intermediaries to cash out (sell) fractional warrants. Holders in street name should contact their broker, bank or other intermediary for information on fractional warrants and how to sell or exercise their warrants.
  • 15. What is the process to sell my warrants?
  • Direct registration holders should contact Wells Fargo, the warrant agent. Holders in street name should contact their broker, bank or other intermediary.
  • 16. What is the process to exercise my warrants?
  • Direct registration holders should contact Wells Fargo, the warrant agent.  To exercise, you will be required to complete an exercise notice and provide payment to Wells Fargo by certified check or official bank check in an amount equal to the exercise price times the number of shares issuable in connection with the exercise (including any fractional shares).  Upon exercise, you will receive the whole number of shares of AIG common stock that you are entitled to receive, together with cash in respect of any fractional share of AIG common stock otherwise issuable in connection with the exercise.

    Holders in street name should contact their broker, bank or other intermediary for information on how to exercise warrants.
  • 17. How can I exercise my fractional warrant?
  • For direct registration holders, fractional warrants may be exercised in the same manner as whole warrants. Direct registration holders should contact Wells Fargo.

    Holders in street name should contact their broker, bank or other intermediary for information on how to exercise whole or fractional warrants.
  • 18. Can I trade my fractional warrant on the NYSE?
  • Direct registration holders should contact Wells Fargo, the warrant agent, for information on how to sell warrants, including fractional warrants.

    Holders in street name should contact their broker, bank or other intermediary for information on how to sell whole or fractional warrants.
  • 19. How can I obtain a copy of the Warrant Agreement?
  • The warrant agreement contains the complete terms and conditions of the warrants and is attached as an exhibit to AIG's Current Report on Form 8-K, which was filed with the Securities and Exchange Commission (SEC) on January 7, 2011. It is available on the SEC's website at www.sec.gov.
  • 20. Who is the warrant agent and how can I contact them?
  • Wells Fargo Bank, N.A. is the warrant agent.

    The contact information is as follows for direct registration warrant holders.

    By mail:
    Wells Fargo Bank, N.A.
    Shareowner Services
    American International Group, Inc. Warrants
    PO Box 64874
    St. Paul, MN 55164-0874

    Telephone number:
    888-899-8293 (U.S.)
    651-450-4064 (Outside U.S.)

    Fax number:
    651-450-4085

    For online account information for holders who hold through the direct registration system, please visit shareowneronline.com

    Shareholders who hold their common stock or warrants through a broker, bank or other intermediary should contact their broker, bank or other intermediary for information.
  • 21. Is there a waiting period to exercise the warrants?
  • No, you can exercise the warrants as soon as you receive them.
  • 22. Do I need to hold the shares of AIG common stock I receive from exercising my warrants for a certain time period before I can sell the shares?
  • No, once you receive the shares of common stock you can trade them.

TAX-RELATED FAQs

CONSULT YOUR TAX ADVISOR

The information contained herein provides a general summary regarding the application of certain U.S. Federal income tax laws and regulations relating to the distribution of, or adjustments to, the warrants.  The information contained herein does not constitute tax advice and does not purport to be complete or to describe the consequences that may apply to particular categories of shareholders or warrant holders.  AIG does not provide tax advice to its shareholders or warrant holders.  The answers provided below are provided solely for illustrative purposes and as a convenience to shareholders and warrant holders and their tax advisors when establishing their specific tax position.  You are urged to consult your own tax advisor regarding the particular consequences of the distribution of, or adjustments to, the warrants to you, including the applicability and effect of all U.S. Federal, state and local and foreign tax laws.


  • 23. Are there any substantial tax implications related to the January 2011 distribution of the warrants?
  • The United States Internal Revenue Service (“IRS”) has ruled that the distribution of the warrants does not qualify as a tax-free stock distribution.  However, based on available information and under the rules of the United States Internal Revenue Code, AIG characterized the distribution of each warrant on the Form 1099s it provides to shareholders as a nondividend distribution in an amount of, and having a tax basis equal to, $16.29.  Under such treatment, the distribution of the warrants will not be taxable (except to the extent that a holder’s adjusted tax basis in each common share on which the warrants were distributed is less than $8.70).  A holder’s adjusted tax basis in the common shares on which the warrant was distributed should be reduced by $8.70 per common share with respect to which such distribution was made, but not below zero.  To the extent that the warrant distribution exceeds a holder’s adjusted tax basis in the common shares, such excess generally should be included in income of a U.S. holder and certain foreign holders as gain.  This gain generally will be long-term capital gain if the common shares have been held as capital assets and for more than one year.  In addition, under such treatment, corporate holders will not be entitled to the dividends-received deduction.

    At the time of the distribution of warrants, AIG was unable to determine whether the distribution was a dividend subject to U.S. federal income tax.  Accordingly, AIG withheld tax on the distribution of the warrants to non-U.S. direct registered holders of common stock.   Indirect holders should contact their broker, bank or other intermediary for information concerning whether taxes were withheld from them on the distribution of the warrants.  Because AIG reported the distribution of warrants as a nondividend distribution, non-U.S. holders may be entitled to a refund of the withholding tax paid on the distribution of warrants by filing a claim with the IRS.

    Holders should consult their own tax advisors regarding the United States federal and other tax consequences of the distribution of the warrants.
  • 24. Was the January 2011 distribution of the warrants a qualified dividend?
  • AIG did not report the distribution of the warrants as a dividend on the Form 1099s it provided to shareholders.
  • 25. What was the fair market value of the warrants for tax purposes, when originally distributed in January 2011?
  • For U.S. federal income tax purposes, AIG has used $16.29 per warrant as the fair market value of the warrants when distributed.  The fair market value of the warrants when distributed generally was your initial tax basis in the warrants. Your current tax basis in the warrants should equal your initial tax basis in the warrants, increased by any taxable dividends to you with respect to such warrants. See FAQ #29.
  • 26. How was the fair market value of the warrants determined for tax purposes, when originally distributed in January 2011?
  • The fair market value for tax purposes was calculated by averaging the highest ($16.93) and lowest ($15.65) price at which warrants were purchased and sold on the NYSE on the ex-dividend date, January 20, 2011.
  • 27. What adjustment is needed to the tax basis per share of my AIG common stock as a result of the January 2011 distribution of the warrants?
  • AIG used $16.29 as the fair market value of each warrant and reported the distribution of the warrants as a nondividend distribution.  Under such treatment, a holder’s adjusted tax basis of the common shares on which the warrant was distributed generally should be reduced by an amount of $8.70 per each common share with respect to which such distribution was made, but not below zero.
  • 28. What was my initial tax basis for the warrants I received or obtained through buying common stock with due bills attached?
  • Generally, if you purchased your common stock after the record date with a due bill attached, your initial tax basis in the warrants was the fair market value of the warrants at the time that you purchased the common stock. Your current tax basis in the warrants should equal your initial tax basis in the warrants, increased by any taxable dividends to you with respect to such warrants. See FAQ #29.
  • 29. What are the U.S. federal income tax implications of adjustments to the warrants resulting from the cash dividends declared on November 2, 2015 and payable on December 21, 2015 on AIG’s common stock?
  • As previously disclosed, on November 2, 2015, AIG’s Board of Directors declared a dividend of $0.28 per share on AIG common stock, payable on December 21, 2015, to stockholders of record at the close of business on December 7, 2015.  This dividend resulted in a decrease in the exercise price of the warrants from $45.00 per share to $44.9036 per share and an increase in the number of shares of AIG common stock receivable upon exercise of a warrant from 1.000 to 1.002, each of which became effective at the close of business on December 7, 2015.  Any warrant exercised on or prior to December 7, 2015 was not entitled to these adjustments.

    For U.S. Federal income tax purposes, AIG treated the anti-dilution adjustments to the warrants will be treated for U.S. federal income tax purposes as taxable dividend distributions of $0.10 per warrant to warrant holders owning warrants at the close of business on December 7, 2015.  For non-U.S. holders of warrants, such distributions may be subject to U.S. federal withholding tax.  Each warrant holder should consult its own tax advisor concerning the U.S. federal income tax consequences of the warrant adjustments in light of the holder’s particular circumstances, as well as any consequences arising under the laws of any other applicable taxing jurisdiction.

Last Updated: January 15, 2016



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