Travelers 2003 Annual Report Download - page 150

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148
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15. COMMITMENTS AND CONTINGENCIES, Continued
In addition to those described above, Travelers is involved in numerous lawsuits, not involving asbestos and
environmental claims, arising mostly in the ordinary course of business operations either as a liability insurer
defending third-party claims brought against policyholders or as an insurer defending coverage claims brought
against it. While the ultimate resolution of these legal proceedings could be significant to Travelers results of
operations in a future quarter, in the opinion of Travelers management it would not be likely to have a material
adverse effect on Travelers results of operations for a calendar year or on Travelers financial condition or
liquidity.
See note 7 for additional discussion of asbestos and environmental reserves and claims matters.
Merger-Related Termination Fees
Under the merger agreement, each of SPC and Travelers has agreed to pay the other party a fee of $300 million
in cash in any of the following payment events:
• if the other party (i) terminates the merger agreement as a result of the paying party having made a
change of recommendation; or (ii) willfully and materially breaches its obligations or certain of its
obligations in connection with the filing with the SEC of the companies’ joint proxy
statement/prospectus;
• if (i) prior to termination, an Acquisition Proposal (as defined in the merger agreement) relating to the
paying party was made or renewed and not publicly withdrawn at least 20 days prior to such party’s
shareholder vote, (ii) either party terminates the merger agreement following the paying party’s failure
to obtain its required shareholder approval and (iii) within 18 months following termination, the paying
party enters into a definitive agreement for, or consummates, an Acquisition Proposal; or
• if (i) prior to termination, an Acquisition Proposal relating to the paying party was made or renewed and
not publicly withdrawn at least 20 days prior to the termination of the merger agreement, (ii) either party
exercises its right to terminate the merger agreement based on the merger not having been consummated
on or before November 30, 2004 and (iii) within 18 months following termination, the paying party
enters into a definitive agreement for, or consummates, an Acquisition Proposal.