AIG 2011 Annual Report Download - page 54

These rights could have a material adverse effect on the operations of the Designated Entity and could adversely
affect the value of the Designated Entity.
As a result of the issuance of the shares of AIG Common Stock to the Department of the Treasury in connection
with the Recapitalization, the Department of the Treasury is AIG Parent’s controlling shareholder. As of January 31,
2012, the Department of the Treasury owns approximately 77 percent of the outstanding shares of AIG Common
Stock. The Department of the Treasury is able, to the extent permitted by law, to control a vote of AIG
shareholders on substantially all matters, including:
• approval of mergers or other business combinations;
• a sale of all or substantially all of our assets;
• amendments to AIG Parent’s restated certificate of incorporation; and
• other matters that might be favorable to the Department of the Treasury, but not to our other shareholders.
Moreover, the Department of the Treasury’s ability to cause or prevent a change in control of AIG could also
have an adverse effect on the market price of AIG Common Stock. The Department of the Treasury may also,
subject to applicable securities laws, transfer all, or a portion of, the AIG Common Stock to another person or
entity and, in the event of such a transfer, that person or entity could become our controlling shareholder. The
Department of the Treasury’s rights under a registration rights agreement executed in connection with the
Recapitalization may be assigned to any person purchasing over $500 million of AIG Common Stock.
We granted the Department of the Treasury certain registration rights and, subject to certain exceptions, the ability to
control the terms, conditions and pricing of any offering in which it participates, including any primary offering by us.
We have granted the Department of the Treasury registration rights with respect to the shares of AIG Common
Stock issued in connection with the Recapitalization, including:
• the right to participate in any registered offering of AIG Common Stock by us;
• the right to demand no more than twice in any 12-month period that we effect a registered marketed
offering of our shares;
• the right to engage in at-the-market offerings; and
• subject to certain exceptions, the right to approve the terms, conditions and pricing of any registered offering
in which it participates until its ownership falls below 33 percent of our voting securities.
Possible future sales of AIG Common Stock by the Department of the Treasury could adversely affect the market for
AIG Common Stock. We have granted the Department of the Treasury the registration rights described above.
Although we can make no prediction as to the effect, if any, that sales by the Department of the Treasury would
have on the market price of AIG Common Stock, sales of substantial amounts of AIG Common Stock, or the
perception that such sales could occur, could adversely affect the market price of AIG Common Stock.
Mr. Benmosche may be unable to continue to provide services to AIG due to his health. Mr. Robert Benmosche,
the President and Chief Executive Officer of AIG, was diagnosed with cancer and has been undergoing treatment
for his disease. He continues to fulfill all of his responsibilities and has stated his desire to continue in such roles
beyond 2012. However, there can be no assurance that his condition will not change and prevent him from
continuing to perform these roles.
The limitations on incentive compensation contained in the American Recovery and Reinvestment Act of 2009 and
the restrictions placed on compensation by the Special Master for TARP Executive Compensation and in our agreement
with the Department of the Treasury may adversely affect our ability to attract talent and retain and motivate our
highest performing employees. The American Recovery and Reinvestment Act of 2009 contains provisions which,
40 AIG 2011 Form 10-K
CONTROLLING SHAREHOLDER
EMPLOYEES