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Exhibit 99.02
For information concerning sixteen purported class actions and one multi-party
suit, with substantially the same allegations, commenced in various courts
against certain subsidiaries of the Company, dozens of other insurers and the
National Council on Compensation Insurance ("NCCI"), see the description that
appears in the second paragraph under the caption "Legal Proceedings" beginning
on page 44 of the Annual Report on Form 10-K of TAP for the year ended December
31, 1999 (File No. 1-14328), which description is included as Exhibit 99.01 to
this Form 10-Q and incorporated by reference herein. In February 2000, the
Alabama court granted the defendants' motion for partial dismissal, while the
Michigan court denied a similar motion. In March 2000, the appellate courts in
Texas and Michigan dismissed the defendants' interlocutory appeals, and
plaintiffs sought leave to dismiss their class claims in New York. In April
2000, plaintiffs appealed the New York trial court's dismissal of all claims
with prejudice.
On March 21, 2000, Citigroup Inc. and TAP announced that they had entered into a
Merger Agreement (the "Merger Agreement"), pursuant to which TIGI, a wholly
owned subsidiary of Citigroup, purchased the publicly held shares of TAP in a
Tender Offer (the "Tender Offer"). The Tender Offer was followed by a merger
pursuant to which TAP became a wholly owned subsidiary of TIGI (the "Merger").
Following the announcement of the Tender Offer, certain putative stockholders of
TAP filed thirteen lawsuits in the Delaware Chancery Court for New Castle County
against Citigroup, TAP and TAP's board of directors, captioned Civil Action No.
17902, Vogel v. Travelers, et al., filed March 21, 2000; Civil Action No. 17903,
Susser v. Travelers, et al., filed March 21, 2000; Civil Action No. 17905, Leone
v. Travelers, et al., filed March 21, 2000; Civil Action No. 17906, Schore v.
Travelers, et al., filed March 21, 2000; Civil Action No. 17907, Crandon Capital
Partners v. Lipp, et al., filed March 21, 2000; Civil Action No. 17908, Ronconi
v. Bialkin, et al., filed March 21, 2000; Civil Action No. 17909, Wycher v.
Bialkin, et al., filed March 21, 2000; Civil Action No. 17910, Geo-Centers, Inc.
v. Bialkin, et al., filed March 21, 2000; Civil Action No. 17911, Welch v.
Travelers, et al., filed March 21, 2000; Civil Action No. 17919, Rodman
Insurance Agency, Inc. v. Travelers, et al., filed March 23, 2000; Civil Action
No. 17920, Lewis v. Travelers, et al., filed March 23, 2000; Civil Action No.
17929, Settos v. Travelers, et al., filed March 29, 2000; and Civil Action No.
17956, Wolgin v. Travelers, et al., filed March 31, 2000. All of the cases were
ultimately consolidated by Court Order on April 6, 2000, under Civil Action No.
17902 NC, In Re Travelers Property Casualty Corp. Shareholders Litigation (the
"Action"). The complaint in the Action alleges, among other things, that the
consideration to be paid in the Tender Offer was inadequate and that various
duties had been violated by Citigroup, TAP or the Special Committee of TAP's
directors appointed to evaluate the transaction. The complaint in the Action
seeks, among other things, to rescind the Merger, to obtain compensatory damages
in an unspecified amount and to obtain an award of plaintiffs attorneys' fees
and other litigation expenses.
Subsequent to the filing of the complaint in the Action, the Tender Offer and
Merger closed and the parties have entered into a Memorandum of Understanding
(the "Memorandum") to settle the Action, which grants a full release of the
defendants and certain related or affiliated persons and extinguishes all claims
by or on behalf of any member of the class in the Action relating to the
transactions contemplated by the Merger Agreement, including the Tender Offer
and the Merger. The Memorandum also provides for the payment of up to $4,400,000
in attorney fees to counsel for the plaintiffs.
The parties are currently engaged in confirmatory discovery with respect to the
settlement. Following the completion of discovery, the parties will prepare
definitive settlement documents, including, among other things, a stipulation of
settlement and notice to stockholders, which will be submitted to and reviewed
by the Court. The Court will subsequently hold a settlement hearing to consider
approval of the settlement. There can be no assurance that such approval will be
obtained.
