Humana 2015 Annual Report Download - page 26

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The number of shares of Aetna common stock that our stockholders will receive in the Merger is based on a
fixed exchange ratio. Because the market price of Aetna’s common stock will fluctuate, our stockholders cannot be
certain of the value of the portion of the merger consideration to be paid in Aetna common stock.
Upon completion of the Merger, each outstanding share of our common stock will be converted into the right to
receive (i) 0.8375 of a share of Aetna common stock and (ii) $125 in cash without interest, subject to any required
withholding taxes. The exchange ratio for determining the number of shares of Aetna common stock that our stockholders
will receive in the Merger is fixed and will not be adjusted for changes in the market price of Aetna’s common stock,
which will likely fluctuate before and after the completion of the Merger. Fluctuations in the value of Aetna’s common
stock could result from changes in the business, operations or prospects of Aetna prior to or following the closing of
the Merger, regulatory considerations, general market and economic conditions and other factors both within and beyond
the control of us or Aetna.
While the Merger is pending, we are subject to business uncertainties and contractual restrictions that could
materially adversely affect our results of operations, financial position and cash flows or result in a loss of employees,
customers, members or suppliers.
The Merger Agreement includes restrictions on the conduct of our business prior to the completion or termination
of the Merger, generally requiring us to conduct our business in the ordinary course and subjecting us to a variety of
specified limitations absent Aetna’s prior written consent. We may find that these and other contractual restrictions in
the Merger Agreement may delay or prevent us from responding, or limit our ability to respond, effectively to competitive
pressures, industry developments and future business opportunities that may arise during such period, even if our
management believes they may be advisable. The pendency of the Merger may also divert management’s attention and
our resources from ongoing business and operations.
Our employees, customers, members and suppliers may experience uncertainties about the effects of the Merger.
In connection with the pending Merger, it is possible that some customers, members, suppliers and other parties with
whom we have a business relationship may delay or defer certain business decisions or might decide to seek to terminate,
change or renegotiate their relationship with us as a result of the Merger. Similarly, current and prospective employees
may experience uncertainty about their future roles with us following completion of the Merger, which may materially
adversely affect our ability to attract and retain key employees. If any of these effects were to occur, it could materially
and adversely impact our results of operations, financial position, cash flows and the price per share for our common
stock.
Failure to consummate the Merger could negatively impact our results of operations, financial position, cash
flows and the price per share for our common stock.
If the Merger is not consummated, our ongoing businesses may be materially and adversely affected and, we will
not have realized any of the potential benefits of having consummated the transaction, and we will be subject to a
number of risks, including the following:
• matters relating to the Merger (including integration planning) may require substantial commitments of time
and resources by our management, which could otherwise have been devoted to other opportunities that may
have been beneficial to us;
• the Merger Agreement includes restrictions on the conduct of our business prior to the completion or termination
of the Merger, generally requiring us to conduct our business in the ordinary course and subjecting us to a
variety of specified limitations absent Aetna's prior written consent. We may find that these and other contractual
restrictions in the Merger Agreement may delay or prevent us from responding, or limit our ability to respond,
effectively to competitive pressures, industry developments and future business opportunities that may arise
during such period, even if our management believes they may be advisable. The pendency of the Merger may
also divert management’s attention and our resources from ongoing business and operations;
• we may be required to pay a termination fee to Aetna and would have incurred expenses relating to the Merger;
and