Unum 2009 Annual Report Download - page 147

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145
Unum 2009 Annual Report
Note 14. Commitments and Contingent Liabilities
Commitments
We have noncancelable lease obligations on certain office space and equipment. As of December 31, 2009, the aggregate net minimum
lease payments were $102.2 million payable as follows: $25.7 million in 2010, $20.2 million in 2011, $16.3 million in 2012, $11.5 million in
2013, $8.9 million in 2014, and $19.6 million thereafter. Rental expense for the years ended December 31, 2009, 2008, and 2007 was
$30.1 million, $34.5 million, and $35.7 million, respectively.
Contingent Liabilities
We are a defendant in a number of litigation matters. In some of these matters, no specified amount is sought. In others, very large or
indeterminate amounts, including punitive and treble damages, are asserted. There is a wide variation of pleading practice permitted in the
United States courts with respect to requests for monetary damages, including some courts in which no specified amount is required and
others which allow the plaintiff to state only that the amount sought is sufficient to invoke the jurisdiction of that court. Further, some
jurisdictions permit plaintiffs to allege damages well in excess of reasonably possible verdicts. Based on our extensive experience and that
of others in the industry with respect to litigating or resolving claims through settlement over an extended period of time, we believe that
the monetary damages asserted in a lawsuit or claim bear little relation to the merits of the case, or the likely disposition value. Therefore,
the specific monetary relief sought is not stated.
Unless indicated otherwise in the descriptions below, reserves have not been established for litigation and contingencies. An estimated
loss is accrued when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
In the disclosures that follow about litigation, we refer to the name of the company specified in the original complaint, following the
practice in the courts. Therefore, references to UnumProvident Corporation should be understood as references to Unum Group.
Claims Handling Matters
Multidistrict Litigation
Between November 22, 2002 and March 11, 2003 five purported derivative actions were filed in state and federal courts in Tennessee.
The defendants removed each of the actions that were filed in Tennessee state court to the U.S. District Court for the Eastern District of
Tennessee, and the cases were consolidated. The plaintiffs then filed a single consolidated amended complaint, which purports to assert
claims on behalf of the Company against certain current and past members of our board of directors and certain executive officers alleging
breaches of fiduciary duties and other violations of law by establishing or permitting to be established an unlawful policy of denying legitimate
disability claims and improper financial reporting, and that certain defendants engaged in insider trading.
On August 27, 2008, the parties entered into a stipulation of settlement to resolve the litigation. Under the terms of the settlement,
which was subject to approval of the court, we agreed to implement or continue certain corporate governance measures and pay plaintiffs’
attorneys’ fees in an amount to be determined by the court. In January 2010, the court approved this settlement and awarded an immaterial
amount of attorneys’ fees.