With four days remaining until a special stockholder’s meeting was planned to vote on the a merger with Allied World Assurance Company Holdings, Transatlantic Holdings, Inc. announced today that the two have mutually terminated their merger agreement.

Consistent with the terms of that agreement, Transatlantic must now pay a termination fee of $35 million, and should the company, within one year, enter a definitive agreement with a competing transaction, submit a competing transaction to their stockholders or consummate one, they will owe Allied an additional $66.7 million.

Transatlantic’s largest stockholder, Davis Selected Advisors, who originally outlined their disapproval in a submission to the SEC in late August, supports the company’s decision to re-evaluate: “Davis Advisors applauds Transatlantic’s efforts to create value for shareholders with an intelligent capital management plan while at the same time remaining open to other strategic alternatives.”

Transatlantic received two unsolicited offers after the Allied World merger was announced, from Validus Holdings and National Indemnity Company, a member of Berkshire Hathaway. Confidential negotiations with Berkshire have stalled at a seeming impasse in focus, while Validus has refused to engage confidential negotiations as Transatlantic persists that the initial proposal from Validus “continues to be inadequate for numerous reasons.”

In addition to the termination, Transatlantic announced the promotion of Michael C. Sapnar, current EVP and COO, to President (effective immediately) and CEO (effective Jan. 1, 2012). Sapnar will replace the retiring CEO Robert F. Orlich, who will continue to hold a position on the company’s board of director’s.

Also part of the long-term plans reported to be included in a letter to stockholders, Transatlantic has approved a $600 million open market or negotiated share repurchase program, committing to repurchasing $300 million during the remainder of this year and the remaining $300 million of shares during 2012.

According to the release, the Transatlantic Board of Directors will continue to entertain and evaluate any serious proposal or opportunity that offers its stockholders full and fair value.

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Corrected September 16, 2011 at 11:04AM: yes