AIG Stock warrants / dividends - what does it mean?

Got this email - please explain - I own 17 shares.

Dear Shareholder:
We are pleased to announce that on January 19, 2011 each holder of common stock of American International
Group, Inc. (AIG) as of January 13, 2011 was issued a dividend in the form of a pro rata allocation of common stock
warrants. AIG issued a total of 74,997,777.598 warrants, each of which represents the right to purchase one share of
common stock of AIG. AIG retained 67,650.196 of these warrants due to tax withholding. The warrants were issued
as part of the recapitalization of AIG through a series of integrated transactions that occurred on January 14, 2011.
The warrants have been approved for listing on the New York Stock Exchange under the ticker symbol “AIGWS”.
Sales of AIG common stock from January 11, 2011 through January 19, 2011 on the NYSE were made with a
“due bill” attached. Due bills are essentially an assignment from a seller of common stock to a buyer of the right to
receive the dividend. Therefore, with respect to sales of AIG common stock during this period, even though the
seller was the holder as of the record date, the buyer will receive the dividend through settlement of the due bills.
Terms of Warrants. Each holder of AIG common stock as of January 13, 2011, the record date, was issued a
number of warrants equal to the number of shares such holder held on that date multiplied by 0.533933. Each
warrant has an initial exercise price of $45.00 per share, payable in U.S. dollars. 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. The warrants will be exercisable
through January 19, 2021, which is ten years from the date of issuance (or, if January 19, 2021 is not a business day,
the next business day).
Issuance; Fractional Warrants. The warrants were issued in uncertificated, direct registration form. Because
you were a holder in “street name” of AIG common stock as of the record date, the warrants were credited to the
account of the broker, bank or other intermediary through which you hold your shares. You might not receive
fractional warrants from such broker, bank or other intermediary. In many cases, brokers, banks and 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. You should contact your broker, bank or other intermediary for information on fractional
warrants and how to sell or exercise your warrants.
Registration of Common Stock. AIG has filed a prospectus supplement with the U.S. Securities and
Exchange Commission (SEC) registering the issuance of AIG common stock upon exercise of the warrants under
its shelf registration statement filed pursuant to the U.S. Securities Act of 1933, as amended. You can obtain a copy
of the prospectus supplement on the website of the SEC at www.sec.gov. The exercise of the warrants is subject to
certain conditions, including that a shelf registration statement relating to the AIG common stock issuable upon
exercise of the warrants is effective, that the shares of AIG common stock issuable upon exercise are qualified for
sale or exempt from qualification under the applicable securities laws of the states or other jurisdictions in which the
exercising warrant holder resides and that AIG has not exercised its right to suspend warrant exercises for certain
periods.
Warrant Agreement. AIG is issuing the warrants pursuant to a warrant agreement between AIG and Wells
Fargo Bank, N.A., as warrant agent. 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 SEC on
January 7, 2011 and is available on the SEC’s website at www.sec.gov. You should carefully read the warrant
agreement to understand the terms and conditions of the warrants.
U.S. Federal Income Tax Treatment. United States Internal Revenue Service Circular 230 Disclosure: To
ensure compliance with requirements imposed by the United States Internal Revenue Service, we inform you that
(i) any U.S. tax advice