case6:06-cv-00637-ja-krs document56 filed 05/08/2008 page 1...

Case 6:06-cv-00637-JA-KRS Document 56 Filed 05/08/2008 of 34

UNITED STATES DISTRICT COURTMIDDLE DISTRICT OF FLORIDA

ORLANDO DIVISION

GENE BADGER, JOHN LOVE, MARVIN CASE NO. 6:06-cv-1253-ORL-19JGG

EVANS, SID BANACK, and JOHN WILLIS , filed herein in Case No . 6:06-cv-637-ORL-28KRS pursuant to this Court ' s Order dated

derivatively on behalf of March 30, 2007 consolidating actions (Doc.

No. 22)PLAINTIFFS' SHAREHOLDERSCORPORATION, a Florida corporation,

Plaintiffs,

vs.

SOUTHERN FARM BUREAU LIFE Jury Trial DemandedINSURANCE COMPANY, a Mississippicorporation, and

PLAINTIFFS' SHAREHOLDERSCORPORATION, a Florida corporation,

Defendants.

AMENDED VERIFIED DERIVATIVE COMPLAINT FOR VIOLATIONS OF

FEDERAL SECURITIES LAWS

Plaintiffs, Gene Badger, John Love, Marvin Evans, Sid Banack, and John Willis,

derivatively on behalf of Plaintiffs' Shareholders Corporation (collectively, "Plaintiffs")

and through their undersigned counsel, and in accordance with this Court' s Order

Granting Plaintiff Leave to File Amended Complaint, allege the following based upon

personal knowledge as to the individual named plaintiffs and their own acts, and, as to all

other matters, upon information and belief and an investigation made by their

undersigned counsel which included, inter alia, a review of the notice of a special


stockholders' meeting to consider approval of the sale of the security at issue , the proxy

statement and proxy form for this special meeting, the meeting minutes for the

August 24, 2004 joint meeting of the Board of Directors of the Florida Farm Bureau

Federation and Florida Farm Bureau Holding Corporation, the opinion letter of Towers,

Perrin , Forster & Crosby, Inc. containing a valuation of the security at issue, and the

related opinion letter of Harold G. Ingraham, Jr., Consulting Actuary.

This derivative action was consolidated into the class action filed by the Plaintiffs

(Case No. 6:06-cv-637-28KRS) due to the similar nature of the claims . However, due to

the differences in the types of actions, Plaintiffs are filing separate complaints in both the

class action and the derivative action.

NATURE OF THE ACTION

1. This is a shareholder derivative action on behalf of Plaintiffs'

Shareholders Corporation ("PSC"), a Florida corporation, for violations of federal

securities laws and common law fraud under Florida law arising from Defendant

Southern Farm Bureau Life Insurance Company's ("Southern Life") fraudulent and

unlawful omissions and misrepresentations of material fact made in connection with its

purchase of a single security owned by PSC , defined in paragraph 7 below as the

"Debenture."

2. Plaintiffs have been damaged by Southern Life's fraudulent omissions

and misrepresentations of material fact in connection with its purchase of the Debenture

from PSC and hereby seek remedies pursuant to Section 10(b) of the Securities Exchange

Act of 1934 (the "1934 Act") (codified at 15 U.S.C. § 78j), Rule 10b-5 (codified at 17

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C.F.R. § 240. 10b-5), and fraud under Florida common law.

JURISDICTION AND VENUE

3. One of the claims asserted herein (Count 1) ari ses under Section 10(b) of

the 1934 Act and Rule IOb-5. Thus, this Court has jurisdiction pursuant to Section 27 of

the 1934 Act (15 U.S.C. § 78aa) and 28 U.S.C. § 1331, 1337.

4. Venue is proper in the Middle District of Florida pursuant to Section 27

of the 1934 Act (15 U.S.C. § 78aa) and 28 U.S.C. § 1391(b), as many of the acts and

omissions complained of herein, including Southern Life's dissemination of false and

misleading material information, occurred in substantial part in the Middle District of

Florida. Furthermore, Southern Life conducts business throughout the Middle District,

including in Orange County, Florida.

5. In connection with the acts and omissions alleged in this complaint,

Southern Life, directly or indirectly, used the means and instrumentalities of interstate

commerce including, but not limited to, the United States mails and interstate telephone

communications.

THE PARTIES

6. Plaintiffs Gene Badger, John Love, Marvin Evans, Sid Banack, and John

Willis, suing derivatively on behalf of PSC , were shareholders in PSC when all of the

events giving rise to this cause of action occurred. At all such times, Gene Badger, John

Love, Marvin Evans, Sid Banack and John Willis held, respectively, 5,288, 2,500, 466,

2,580, and 220 shares of common stock of PSC.

7. PSC, which is being sued herein as a nominal defendant because this is a

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derivative action, is a Florida corporation with its principal place of business in

Gainesville, Alachua County, Florida, 32614-7030. PSC was formed out of a prior Rule

lOb-5 class action against Southern Life, Winchester v. Florida Farm Bureau Equities,

Inc., Case No. GCA 840148-MMP (Sept. 4, 1987), that was settled in 1987 (the

"Winchester Settlement"). As a part of the Winchester Settlement, PSC was to receive a

27.7% equity interest in Florida Farm Bureau Holding Corporation ("Florida Holding"),

a Florida corporation that owns 10% of the common stock of Southern Life. Thus, PSC

was the beneficial owner of 2.77% of the stock of Southern Life, which as of December

31, 2004 had an adjusted net worth in excess of one billion one hundred million dollars

($1,100,000,000). Because of concern about restrictions in a certain trust agreement

discussed below, PSC's ownership of Florida Holding was evidenced by Florida

Holding's issuance of a convertible debenture (the "Debenture") to PSC. PSC was

formed specifically for the purpose of holding the Debenture and does not otherwise

conduct any business.

8. Pursuant to the terms of the Debenture as approved by the court in

Winchester , PSC became entitled to 27.7% of any cash dividends paid by Southern Life

to Florida Holding . In other words, PSC was entitled to payment of 2.77% of all

dividends declared by Southern Life.

9. As part of the Winchester Settlement, the Stipulation of Settlement

approved by the court provides in relevant part:

(d) FLORIDA FARM BUREAU HOLDING

CORPORATION, a Florida corporation ("Florida

Holding" ), owns 10% of the Common Stock of Southern

Life, which is subject to certain restrictions contained in

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the Agreement and Declaration of Trust dated July 15,

1947, as amended, a copy of which is attached hereto as

Exhibit "A") (sic). Florida Holding is in good standing in

the State of Florida and is a wholly-owned subsidiary of

[Florida Farm Bureau] . Within seven days of the

settlement effective date , [ Florida Farm Bureau] will cause

Florida Holding to issue to a corporation , partnership, trust

or other entity to be formed by class members

("Shareholders Corporation ") [incorporated as PSC] a

convertible debenture or debentures which shall be

convertible into twenty- seven point seven percent (27.7%)

of the outstanding common capital stock of Florida

Holding....

(e) It is the intent of the parties that

Shareholders Corporation shall be entitled to receive the

same financial benefits it would receive if it owned

outright 27.7% of the common stock of Florida Holding In

the event Southern Life pays any cash dividend(s) on its

stock owned by Florida Holding, then in such event,

Florida Holding shall pay to Shareholders Corporation

27.7% of such dividend(s) within seven days of receipt

thereof...

(g)...

(iv) Except as provided in said Agreement

and Declaration of Trust dated July 15, 1947, as

amended, [Florida Farm Bureau] will not sell,

transfer, pledge, assign, convey, or otherwise

dispose of its shares in Florida Holding, or anyinterest therein, nor will it allow same to occur by

operation of law or otherwise, nor will it authorize

or permit the issuance of any additional shares in

Florida Holding, other than strictly in accordance

with the terms of this Stipulation and the terms of

the convertible debenture.

(v) [Florida Farm Bureau] has caused

Florida Holding to place, on the face of all issued

and outstanding stock certificates in Florida

Holding, a legend giving notice that the sale,

transfer, pledge assignment, conveyance, or other

disposition of any interest therein, is subject to the

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provisions of the convertible debenture; and

(vi) [Florida Farm Bureau] will not take, or

permit any action to be taken by Florida Holding,

which would dilute or reduce the interest of the

class members in Florida Holding, including, but

not limited to, doing, or failing to do, any act which

would trigger the rights of first refusal under Article

"I (e)" or Article "II (b)" of the Agreement and

Declaration of Trust dated July 15, 1947, as

amended....

(i) [Florida Farm Bureau]'s counsel shall provide

Plaintiffs' escrow counsel prior to the settlement hearing

with an opinion in the form reasonably acceptable to

Plaintiffs' escrow counsel that neither the issuance of the

convertible debenture, nor any provision of the settlement

documents, will trigger the rights of first refusal as set

forth in Article "I (e)" or Article "II (b)" of the Agreement

and Declaration of Trust dated July 15, 1947, as amended,

or otherwise violate the provisions of that instrument, ... .

A copy of the Stipulation of Settlement is attached hereto and incorporated by

reference as Exhibit "1."

10. Pursuant to the Stipulation of Settlement, and the court orders approving

same, Florida Holding ultimately issued to PSC the Debenture in the form attached

hereto and incorporated by reference as Exhibit "2." The Debenture was validly issued

by Florida Holding to PSC.

11. The Debenture was automatically convertible into 27.7% of the capital

stock of Florida Holding upon the earliest of the following:

(1) the termination of the above-referenced Agreement and

Declaration of Trust dated July 15, 1947, as amended (the "Trust

Agreement");(2) the elimination or modification of the restrictions set forth in

Article I (e) and/or Article II (b) of the Trust Agreement to permit

the transfer of capital stock of Florida Holding to PSC; or

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Case 6 : 06-cv-00637-JA-KRS Document 56 Filed 05/08/2008 of 34

(3) the bankruptcy, insolvency, reorganization, liquidation orreceivership of Southern Life.

12. The Debenture also provides that PSC:

"shall be entitled to receive the same financial benefits itwould receive if it owned outright 27.7% of the capitalstock of [Florida Holding]. Accordingly, in the eventSouthern Life pays any cash dividend to holders of itsstock, then in such event, [PSC] shall be entitled to receivea payment hereunder of an amount equal to 27.7% of suchdividends received by [Florida Holding] on the shares ofcapital stock of Southern Life owned by [Florida Holding].

13. Under the unique circumstance created by the Stipulation of Settlement,

the orders approving same, and the Debenture, PSC became the equitable and beneficial

owner of 27.7% of the common stock of Florida Holding.

14. Defendant, Southern Life, is a privately-held, multi-state company

incorporated in the State of Mississippi and is authorized to do business in the State of

Florida and doing business in Florida.

15. Southern Life' s issued and outstanding shares of common stock are

owned by ten holding companies, one of which is Florida Holding, which became part of

Southern Life's ownership structure in 1984. Florida Holding and the other nine holding

companies each own 10% of Southern Life's outstanding common stock.

16. All of the common stock of each of the ten holding companies is held by

its own respective state farm bureau federation. These farm bureau federations are

corporations providing products and services to member families who join county farm

bureaus, including access to insurance products sold by Southern Life and its

subsidiaries.

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17. Shortly after Southern Life' s incorporation in 1946, several of the farm

bureau federations formed their respective holding companies which in turn issued

common stock to the farm bureau federations and preferred stock to individual member

families which belonged to the farm bureau federations. The holding companies, in turn,

used the money raised by the issuance of that stock to purchase capital stock in Southern

Life. Southern Life issued 400 shares of capital stock, priced at $200 per share, to the

holding companies, thereby raising $80,000 in initial capital and surplus from each of

the holding companies.

THE TRUST AGREEMENT

18. On July 15, 1947, the initial holding companies and the respective farm

bureau federations that owned them entered into the Trust Agreement. The Trust

Agreement was amended in 1972, 1973 and 1984 to include all of the current holding

companies and their respective farm bureau federations, as if they had been original

signatories to the Trust Agreement. Pursuant to the terms of the Trust Agreement, any

amendment to the Trust Agreement requires unanimous consent of all signatories to the

Trust Agreement. A true and accurate copy of the Trust Agreement and the amendments

thereto is attached and incorporated by referenced as Composite Exhibit "3."

19. The Trust Agreement was created by the farm bureau federations for the

benefit of the 20,000 original charter policyholders ("Charter Policyholders") who

bought an insurance policy ("Charter Policy") offered by Southern Life on or before

May 1, 1947.

20. The Trust Agreement was designed to ensure that the Charter

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Policyholders would receive, at most, three times their gross annual premiums over

each three-year period as a return on non-transferable participation certificates that were

issued to the original 20,000 Charter Policyholders. The 20,000 Charter Policyholders,

as the trust beneficiaries, were and are essentially receiving an annual investment return

equal, at most, to three times the amount of their respective insurance premiums over a

three year period.

21. The Trust Agreement terminates within three years after maturity of the

last surviving holder of a Charter Policy Contract. Each of the 20,000 Charter Policies

matures when the Charter Policyholder reaches 85 or upon death , whichever event

occurs first.

22. According to the express terms of the Trust Agreement, the farm bureau

federations agreed to release and relinquish any claim to dividends greater than $5,700

out of the dividends paid annually to the holding companies by Southern Life. Also

according to the Trust Agreement, the dividends in excess of $5,700, must be

transferred by the holding companies to a trustee committee designated as the Southern

Farm Bureau Charter Committee ("Charter Committee"). The Charter Committee is

made up of the treasurers from each of the farm bureau federations and is responsible

for distributing the excess dividends.

23. The Charter Committee is also responsible for making distributive share

payments to the Charter Policyholders. Although the distributive share payments are

made to the Charter Policyholders annually, the amount paid cannot exceed three times

the premiums of their individual life insurance premiums over each three-year period.

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Any excess funds after the distributive share payments must be distributed

proportionately to each of the farm bureau federations to carry on general education

programs.

24. Despite the fact that the Trust Agreement contains no limitation on the

amount of dividends paid to Southern Life's ten shareholders (and, instead, limits the

amount of the distributed dividends that those shareholders can retain), Southern Life

has relied on the Trust Agreement to avoid paying any reasonable dividends to its ten

holding company stockholders, including Florida Holding, and thereby has been able to

accumulate a rapidly increasing net worth that in 2004 exceeded one billion one

hundred million dollars ($1,100,000,000).

SUBSTANTIVE ALLEGATIONS

25. On April 5, 2002, the individually named plaintiffs in the instant action,

other than John Willis and John Love, filed a lawsuit in state court in Orange County,

Florida, derivatively on behalf of PSC against Southern Life for its failure to pay

reasonable dividends to Florida Holding, in which PSC was a 27.7% beneficial owner

pursuant to the Debenture . See Badger v. Southern Farm Bureau Life Ins. Co., Case No.

C1002-3303 (9th Jud. Cir. Fla.) (Apr. 5, 2002) ("Badger"). While Badger was stayed

pending the resolution of federal injunction proceedings initiated by Southern Life, and

before any discovery on the merits, Southern Life made an offer to purchase and

ultimately did purchase the Debenture from PSC, thereby foreclosing any further

consideration of that action. It is Southern Life's fraudulent omissions and

misrepresentations in connection with its purchase of the Debenture that are the subject

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of the instant action.

26. From time to time before 2004, and with greater urgency during the year

2004, Southern Life engaged in efforts to extend the term of the Trust Agreement for as

long as was legally permissible. At all material times, Southern Life knew that under the

requirements of the Trust Agreement, in order to extend the Trust Agreement, all

signatories to the Trust Agreement, including all ten of Southern Life's shareholders had

to consent to the extension. At all material times, Southern Life also knew that under the

Winchester Settlement, neither Florida Holding nor Florida Farm Bureau Federation

("Florida Federation") could approve the extension of the Trust Agreement without the

consent of the holders of the Debenture (i.e., PSC and its shareholders).

27. As part of its scheme to defraud Plaintiffs, on July 19, 2004, Southern

Life hired the actuarial firm of Towers Perrin Forster & Crosby, Inc. ("Towers Perrin") to

valuate the Debenture (the "Valuation").

28. On August 25, 2004, the Florida Farm Bureau Federation Board of

Directors and the Florida Holding Board of Directors (collectively, the "Board") met in

Gainesville, Florida (the "August Board Meeting"). Joseph Stroble, the CEO of Southern

Life, and Joseph Purvis, the Secretary and General Counsel of Southern Life, attended the

August Board Meeting and made a presentation to the Board concerning, inter alia,

Southern Life's desire to extend the Trust Agreement. After hearing from Messrs.

Stroble and Purvis, the Board deliberated and passed the following resolution concerning

extension of the Trust Agreement:

Florida Holdings is authorized and directed to vote in favorof the extension and amendment of the [Trust Agreement]

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and related matters, if, and only if (i)Southern Life firstpurchases the Debenture from PSC; and (ii) Southern Life,as the holder of the debenture provides written consent tothe extension and amendment of the [Trust Agreement.]

A true and correct copy of the Minutes from the August Board Meeting is attached hereto

as Exhibit "4."

29. Immediately after the August Board Meeting, Southern Life offered to

purchase the Debenture from PSC for $3,300,000 based upon the Valuation of the

Debenture which Southern Life provided to PSC at the time of its offer. Southern Life

knew that the Valuation would also be presented to each of the PSC shareholders for

them to consider in deciding whether to vote to approve the sale of the Debenture to

Southern Life. A true and correct copy of the Valuation is attached hereto as

Exhibit "5." Southern Life also knew that the Valuation omitted material facts and

contained material misrepresentations, including the value of the Debenture itself which

was grossly understated.

30. Southern Life knowingly and intentionally misrepresented to Towers

Perrin, and subsequently to PSC and its shareholders, including Plaintiffs, that the Trust

Agreement was not expected to terminate until 2033 and that the Debenture would not or

was not expected to convert into actual stock of Florida Holding until that time. In

making that material misrepresentation, Southern Life knowingly and intentionally or

with severe recklessness omitted the material fact that the trust created by the Trust

Agreement (the "Trust") had long since served its purpose and was no longer necessary

to protect the entitlement of any remaining Charter Policyholders to receive the de

minimis amount of three times their respective insurance premiums over each three-year

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period. Thus, Southern Life knowingly and intentionally or with severe recklessness

omitted the material fact that the Trust Agreement had effectively terminated such that

PSC had a present right to 27.7% of the stock of Florida Holding equivalent to a 2.77%

interest in Southern Life.

28. Substantially all of the original 20,000 Charter Policyholders who

purchased Charter Policies prior to 1947 have died or their Charter Policies have lapsed.

With Southern Life's net worth in excess of one billion one hundred million dollars

($1,100,000,000) as of 2004, no need or reasonable basis for maintaining the Trust has

existed for years, if not decades. In providing Towers Perrin with the information upon

which the Valuation is based, Southern Life omitted the material fact of how many

Charter Policyholders were alive or under 85 years of age as of 2004, as well as the

amount of funds necessary to pay their de minimis premiums.

29. Southern Life failed to inform Towers Perrin that Southern Life had a

specific corporate policy and goal to extend the Trust Agreement and that it could not do

so without the consent of the Debenture holder. Further, Southern Life knew that Florida

Holding and Florida Federation would only vote to extend the Trust Agreement if

Southern Life purchased the Debenture from PSC and subsequently consented to the

extension of the Trust Agreement, however, Southern Life also failed to tell this to

Towers Perrin. As a result, Towers Perrin did not consider Southern Life's desire to

extend the Trust Agreement and PSC's control, as the holder of the Debenture, over the

extension of the Trust Agreement.

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30. Upon information and belief, Southern Life did not inform PSC that

missing from the Valuation was any consideration of (i) Southern Life's attempts to

extend the Trust Agreement, (ii) PSC's control of any such extension or (iii) Southern

Life's need to purchase the Debenture because Florida Holding and Florida Federation

would only vote to extend the Trust Agreement if Southern Life purchased the Debenture

from PSC and subsequently consented to the extension of the Trust Agreement.

31. Southern Life also knew that the Valuation was not a market valuation

but rather an actuarial valuation, and Southern Life failed to disclose this to PSC.

32. Upon information and belief, Bruce Brashear, general counsel of PSC,

and Donald Nelson, a director of PSC, attended all or a portion of the August Board

Meeting and may have learned that Florida Holding and Florida Federation would only

agree to extend the Trust Agreement if Southern Life purchased the Debenture and

subsequently consented to the extension of the Trust Agreement. With regard to these

conditions imposed by Florida Holding and Florida Federation, PSC and its shareholders

were misled as to these facts because either Bruce Brashear and Donald Nelson did not

disclose these material facts to PSC, the remainder of the PSC Board of Directors or the

PSC shareholders, or Bruce Brashear and Donald Nelson disclosed these material facts to

the remainder of the PSC Board of Directors and the Board did not disclose these

material facts to the PSC shareholders. Acting intentionally in concert with Southern

Life, or having been deceived themselves, the PSC Board failed to disclose that Florida

Holding and Florida Federation would not agree to extend the Trust Agreement unless

Southern Life purchased the Debenture and then consented to the extension of the

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Debenture, failed to consider these facts as a reasonable person would under the same

circumstances or otherwise deceived PSC as a corporate entity.

33. In addition, Southern Life did not tell PSC that when it submits Southern

Life's offer to purchase the Debenture to a vote of the PSC shareholders, it must inform

them that the Valuation was not a market valuation and did not consider (i) Southern

Life's attempts to extend the Trust Agreement, (ii) PSC's control of any such extension

or (iii) Southern Life's need to purchase the Debenture because Florida Holding and

Florida Federation would only vote in favor of extending the Trust Agreement if

Southern Life purchased the Debenture.

34. Southern Life failed to tell the PSC shareholders that it was attempting

to extend the Trust Agreement or that Florida Holding and Florida Federation would only

consent to the extension of the Trust Agreement if Southern Life first purchased the

Debenture. Further, Southern Life never told the PSC shareholders that the Valuation

was not a market valuation and did not consider (i) Southern Life's attempts to extend the

Trust Agreement, (ii) PSC's control of any such extension or (iii) Southern Life's need to

purchase the Debenture because Florida Holding and Florida Federation would only vote

in favor of extending the Trust Agreement if Southern Life purchased the Debenture.

35. The materiality of Southern Life's omissions and misrepresentations is

obvious on the face of the Valuation. The Valuation assumes , based on Southern Life's

omissions and misrepresentations, that the Debenture will not become a 2.77% ownership

interest in Southern Life until 2033, when Southern Life is expected, pursuant to Towers

Perrin's own estimations, to have a total value of $5.737 billion. Applying an actuarial

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discount rate of 14% for each year between 2004 and 2033, Towers Perrin reduced PSC's

2.77% interest in Southern Life's future estimated value of $5.737 billion in 2033 to a

present value of only $3.3 million. If, however, Southern Life had truthfully disclosed

that PSC had a present right to convert the Debenture into Florida Holding stock based on

the actual or effective termination of the Trust Agreement and, therefore, that PSC had a

present 2.77% ownership interest in Southern Life, the Debenture would have been

valued, using Southern Life's own actuarial data, at $34,868,760, or 2.77% of Southern

Life's 2004 estimated total value of $1.259 billion.

36. Thus, Southern Life made the following omissions of material fact to

PSC and its shareholders in connection with its purchase of the Debenture from PSC

(hereinafter collectively referenced as "Material Omissions"):

(a) Southern Life omitted the number of Charter Policyholders

whose policies remained in effect pursuant to the Trust Agreement;

(b) Southern Life omitted the dollar amount necessary to pay the

surviving Charter Policyholders their de minimis premiums

pursuant to the Trust Agreement;

(c) Southern Life omitted that there was no longer a business purpose

for maintaining the Trust in order to pay de minimis premiums to

surviving Charter Policyholders; and

(d) Southern Life omitted that it was and is legally permissible to

terminate the Trust by setting aside the funds needed to satisfy its

payment of de minimis premiums to surviving Charter Policyholders.

(e) Southern Life, knowing the Valuation would be provided to each

of the PSC shareholders, omitted to tell Towers Perrin that Southern

Life was attempting to extend the Trust Agreement and that it could

not do so without the consent of the Debenture holder.

(f) Southern Life failed to inform Towers Perrin that Florida Holding

and Florida Federation would only consent to extension of the Trust

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Agreement if Southern Life first purchased the Debenture from PSC.

(g) Southern Life omitted to tell PSC that the Valuation was not a

market valuation and that missing from the Valuation was any

consideration of (i) Southern Life's attempts to extend the TrustAgreement, (ii) PSC's control of any such extension or (iii) SouthernLife's need to purchase the Debenture because Florida Holding andFlorida Federation would only consent to the extension of the TrustAgreement if Southern Life first purchased the Debenture.

(h) Southern Life omitted to tell PSC that when it submits SouthernLife's offer to purchase the Debenture to a vote of its shareholders, itmust inform them that the Valuation was not a market valuation anddid not consider (i) Southern Life's attempts to extend the TrustAgreement, (ii) PSC's control over such extension or (iii) SouthernLife's need to purchase the Debenture because Florida Holding andFlorida Federation would only vote to extend the Trust Agreement ifSouthern Life first purchased the Debenture.

(i) Southern Life omitted to tell the PSC shareholders that it wasattempting to extend the Trust Agreement or that Florida Holding andFlorida Federation would only vote to extend the Trust Agreement ifSouthern Life first purchased the Debenture.

(j) Southern Life omitted to inform the PSC shareholders that theValuation was not a market valuation and did not consider (i) SouthernLife's attempts to extend the Trust Agreement, (ii) PSC's control oversuch extension or (iii) Southern Life's need to purchase the Debenturebecause Florida Holding and Florida Federation would only vote infavor of extending the Trust Agreement if Southern Life firstpurchased the Debenture.

37. Southern Life' s Material Omissions caused its actuarial agent , Towers

Perrin, to understate the value of the Debenture in the Valuation by, at a minimum, more

than 90%, or approximately $31.6 million. See Ex. 5. Thus, Southern Life misrepresented

the true value of the Debenture by at least $31.6 million.

38. Southern Life knew that the Debenture was PSC 's sole asset and that

majority shareholder approval would be required by Florida statute to approve its sale.

Nonetheless, in connection with Southern Life 's offer to purchase the Debenture from

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PSC, Southern Life provided the Valuation to PSC knowing that it was based on

Southern Life's Material Omissions and that it grossly misrepresented the true value of

the Debenture, and that PSC would rely on and use the Valuation, the misrepresentation

of value stated therein, and the Material Omissions to solicit the approval of PSC's

shareholders to sell the Debenture to Southern Life. In fact, a majority of PSC's

shareholders, in reliance on Southern Life's Material Omissions and its

misrepresentations regarding the value of the Debenture, voted to approve the sale of the

Debenture by PSC to Southern Life, as a result of which the Debenture was sold, at a

minimum, for more than $30 million less than its true value.

39. Specifically, on September 22, 2004, PSC retained its own actuary,

Harold G. Ingraham, Jr. ("Ingraham"), to render an opinion about the Valuation,

specifically, the discount rate of 14% used by Towers Perrin. A true and correct copy of

Ingraham's opinion letter is attached hereto as Exhibit "6." Ingraham did not

independently valuate the Debenture and instead merely analyzed the appropriateness of

the discount rate used by Towers Perrin, thereby relying on all of the same material

omissions and misrepresentations provided by Southern Life to Towers Perrin.

40. Ingraham concluded that a reasonable range for a discount rate was 11-

14°/x. Based on Towers Perrin's estimation of the 2033 total value of Southern Life, $5.37

billion, Ingraham's range of discount rates of 11-14% resulted in a present value for the

Debenture of $4.3 to $4.9 million, respectively. On that basis, PSC advised Southern Life

that it would sell the Debenture to Southern Life for $4.4 million, subject to a majority

vote by PSC's shareholders to approve the sale at that price.

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41. Southern Life then counter-offered to purchase the Debenture for $4.4

million, to be paid with $3.3 million in cash and a $1.1 million promissory note to be paid

with interest within two years.

42. On September 29, 2004, PSC, through its president, Royal French, sent

a letter to Plaintiffs in their capacities as shareholders of PSC, stating PSC's intent to hold

a special meeting of stockholders on October 15, 2004, for the purpose of voting on

Southern Life 's offer to purchase the Debenture for $4.4 million . Since the Debenture

constituted substantially all of the assets of PSC, a shareholder vote with majority

approval was required to effectuate a sale of the Debenture to PSC. Accordingly, the

letter enclosed a proxy statement ("Proxy Statement") and proxy form ("Proxy Form")

soliciting Plaintiffs' individual votes on the proposed sale of the Debenture to Southern

Life for $4.4 million. A true and correct copy of Royal French's September 29, 2004

letter with the attached proxy statement and proxy form are attached hereto as Composite

Exhibit "7."

43. In recommending in the Proxy Statement that Plaintiffs vote to approve

the sale of the Debenture to Southern Life for the grossly understated and inadequate

price of $4.4 million, PSC relied on the Material Omissions and misrepresentations

provided by Southern Life in the Valuation, which Valuation provided the basis of PSC's

own actuary's analysis regarding the Debenture, and which Valuation was distributed to

the shareholders of PSC to seek their approval for the sale of the Debenture to Southern

Life.

44. Thus, Southern Life's Material Omissions and misrepresentations in the

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Valuation directly form the basis of the Proxy Statement provided to PSC 's shareholders,

including Plaintiffs. PSC's shareholders relied on the Proxy Statement and the Material

Omissions and misrepresentations of Southern Life upon which the Proxy Statement was

based, including the Material Omissions and the misrepresentation regarding the value of

the Debenture, in voting by a majority of shares to approve the sale of the Debenture to

Southern Life for $4. 4 million.

45. The majority vote approving the sale of the Debenture to Southern Life

for $4.4 million forced each and every shareholder of PSC either to accept his pro rata

distribution for the sale of the Debenture or to elect Florida statutory appraisal rights and

sell his PSC shares. Thus, even those PSC shareholders who dissented from PSC's sale of

the Debenture were forced to obtain their appraisal rights pursuant to Sections 607.1301,

.1333, Florida Statutes, and exchange their shares in PSC for "fair value."

46. Southern Life' s Material Omissions and misrepresentations in

connection with its purchase of the Debenture, as specifically alleged above, convinced

PSC's Board of Directors to recommend approval of the sale and forced each of PSC's

shareholders to accept his or her pro rata distribution from the sale of the Debenture to

Southern Life or to exercise appraisal rights and sell his or her shares in PSC, thereby

causing damage to PSC and to the majority of PSC' s shareholders who voted to approve

the sale, as well as to the remaining shareholders, including Plaintiffs, who were forced to

exercise their appraisal rights and, thus, were forced sellers of their PSC stock.

FRAUDULENT SCHEME AND COURSE OF BUSINESS

47. Southern Life is liable for (a) making false statements, or (b) failing to

20


disclose adverse facts known to it in connection with its purchase of the Debenture.

Southern Life's fraudulent scheme and course of business, which operated as a fraud or

deceit on PSC as the seller of the Debenture and on its shareholders as sellers and forced

sellers of their shares in PSC, enabled Southern Life to profit at the expense of PSC and

its shareholders, including Plaintiffs.

DERIVATIVE DEMAND WAS MADE AND PSC'S BOARD OF DIRECTORS

WRONGFULLY REFUSED TO TAKE ACTION

48. On May 11, 2006, Plaintiffs served PSC's Board of Directors with a

formal written demand ("Demand") that PSC's Board of Directors take the following

action:

[T]he Shareholders hereby demand that PSC, on behalf of

all of its shareholders, immediately bring an action in the

United States District Court for the Middle District of

Florida against [Southern Life] for federal securities fraud

in violation of section 10(b) of the Securities Exchange Act

of 1934 (15 U.S.C. § 78j(b)), and Rule lOb-5 (17 C.F.R. §

240.10(b)(5)), and for common law fraud in connection

with Southern Life's purchase, on October 15, 2004, of [the

Debenture] ....

Demand at p.1. A true and correct copy of the Demand dated May 11, 2006, and

received by PSC on May 15, 2006, is attached hereto and incorporated by reference as

Exhibit "8."

49. The Demand sets forth with specificity the acts of securities fraud, as

alleged herein, committed by Southern Life against PSC and its shareholders, including

Plaintiffs.

50. Nonetheless, PSC's Board of Directors (the "Board") rejected the

Demand by letter dated August 10, 2006, taking the position, without any explanation

21


whatsoever, that it is not in PSC's best interests to sue Southern Life for the securities

fraud or common law fraud alleged herein. A true and correct copy of the Board's

response to the Demand is attached hereto and incorporated by reference as Exhibit "9."

51. The Board's rejection of the Demand was clearly a wrongful refusal as

the Board failed to conduct a reasonable investigation to support it. In fact, there is no

indication that any investigation whatsoever was conducted to support the Board's

conclusion that suing Southern Life was not in PSC's best interests. The rejection

merely states in conclusory form that suing Southern Life for the fraud alleged herein is

not in PSC's best interests.

52. On information and belief, the Board failed to inquire with Southern

Life as to any of its material misrepresentations or omissions in connection with its

purchase of the Debenture from PSC, including the Material Omissions. Specifically, the

Board did not inquire with Southern Life as to whether the Trust Agreement was not

expected to terminate until 2033 as misrepresented by Southern Life; the Board did not

inquire with Southern Life as to the number of Charter Policyholders whose policies

remained in effect pursuant to the Trust Agreement at the time of the Valuation or the

time of Southern Life's offer to purchase the Debenture; the Board did not inquire with

Southern Life as to the dollar amount necessary to pay the surviving Charter

Policyholders their de minimis premiums pursuant to the Trust Agreement; the Board

failed to inquire as to whether there was a business purpose for maintaining the Trust in

order to pay de minimis premiums to surviving Charter Policyholders, if any; the Board

failed to inquire as to whether it was legally permissible to terminate the Trust by setting

22


aside the funds needed to satisfy the de minimis payments of premiums to surviving

Charter Policyholders; and the Board failed to obtain a new and correct valuation of the

Debenture in light of Southern Life' s material misrepresentations and omissions.

53. On information and belief, the Board failed to conduct a reasonable

investigation, which would have included making the inquiries and obtaining a new

valuation for the Debenture as described in paragraph 52 above, despite the fact that the

Debenture was PSC's only asset, and despite the fact that there was no other PSC

business to impede such an investigation since PSC did not conduct any business other

than to hold the Debenture.

54. The Board's rejection of the Demand without explanation is in bad faith.

No good faith basis exists to conclude that bringing this action is not in the best interests

of PSC . PSC has lost its only asset due to fraud . Any reasonable investigation into the

Demand would have revealed that pursuing such an action would not expose PSC to

liability or cost PSC significant sums. Further, any reasonable investigation done in

good faith would have required the Board to inquire with Southern Life about the

allegations of fraud in the Demand, would have caused the Board to obtain a new

valuation of the Debenture, and would have revealed Southern Life' s fraud.

55. On information and belief, the Board's rejection of the Demand was also

in bad faith because Southern Life and Florida Farm Bureau Federation, which owns

Florida Holding (a ten percent shareholder in Southern Life), effectively control the

selection of PSC' s Board of Directors and its decisionmaking . Southern Life's and

Florida Farm Bureau Federation's effective control over the Board prevented it from

23


considering the Demand in good faith. In fact, on information and belief, Southern Life

and Florida Farm Bureau Federation controlled the Board's wrongful refusal of the

Demand. Thus, the Board clearly acted in bad faith in wrongfully refusing the Demand.

56. The Board ' s wrongful refusal of the Demand , through its bad faith and

failure to conduct a reasonable investigation into Plaintiffs' claims of fraud against

Southern Life contained in the Demand, compelled Plaintiffs to bring the present

derivative action for the benefit of PSC and all of its shareholders.

57. Plaintiffs are compelled to bring the present action for the benefit of

PSC, so that PSC's shareholders, including Plaintiffs, may have their rights as such

protected.

58. Plaintiffs do not have an adequate remedy of law.

59. This action is not a collusive one to confer jurisdiction on a court of the

United States which it would not otherwise have.

60. All conditions precedent to the filing of this cause have been performed,

have occurred or have been waived.

61. Plaintiffs have employed the undersigned firm of Baker & Hostetler,

LLP, to represent it in this action and have agreed to pay said firm a reasonable attorney's

fee for its services.

COUNT I

(For Southern Life 's violations of Section 10(b) of the 1934 Act and Rule lOb-5)

62. Plaintiffs incorporate herein by reference and reallege paragraphs 1

through 61 above as if fully set forth herein.

24


63. Southern Life violated Section 10(b) of the 1934 Act and Rule I Ob-5 by

using means or instrumentalities of interstate commerce or of the mails:

(a) To employ devices, schemes, or artifices to defraud Plaintiffs and

the other members of the Class;

(b) To make untrue statements of material facts or to omit to state

material facts necessary in order to make the statements made, in light of the

circumstances under which they were made, not misleading; or

(c) To engage in acts, practices, or courses of business that operated

as a fraud or deceit upon Plaintiffs and the other members of the Class in connectionwith its purchase of the Debenture from PSC and the resulting forced sale of the Class'

stock in PSC.

64. Southern Life omitted material facts and misrepresented material facts

in its dissemination of information, including the Valuation, to Plaintiffs, which

omissions and misrepresentations, including the Material Omissions and the gross

misrepresentation of the value of the Debenture, were provided by using means or

instrumentalities of interstate commerce or of the mails in connection with Southern

Life's purchase of the Debenture . Specifically , Southern Life knowingly and

intentionally, or with severe recklessness, made the Material Omissions defined in

paragraph 36 above including omissions regarding the number of surviving Charter

PolicyHolders, the amount of money needed to pay their de minimis premiums, that there

was no longer a business purpose for maintaining the Trust in order to pay de minimis

premiums to surviving Charter PolicyHolders, and that it was and is legally permissible

to terminate the Trust by setting aside the funds needed to satisfy its payment of de

minimis premiums to surviving Charter PolicyHolders.

65. In so doing, Southern Life misrepresented that the Trust Agreement was

25


not expected to terminate until 2033 and that the Debenture would not or was not

expected to convert into actual stock of Florida Holding until that time. In making that

material misrepresentation , Southern Life knowingly and intentionally or with severe

recklessness omitted the material fact that the trust created by the Trust Agreement (the

"Trust") had long since served its purpose and was no longer necessary to protect the

entitlement of any remaining Charter Policyholders to receive the de minimis amount of

three times their respective insurance premiums over each three-year period. Thus,

Southern Life knowingly and intentionally or with severe recklessness omitted the

material fact that the Trust Agreement had effectively terminated such that PSC had a

present right to 27.7% of the stock of Florida Holding equivalent to a 2 . 77% interest in

Southern Life.

66. Southern Life thereby also knowingly and intentionally or with severe

recklessness misrepresented the material fact that the Debenture was worth in excess of

$34.9 million rather than the grossly understated amount of $3.3 million misrepresented

in the Valuation.

67. Southern Life also failed to inform Towers Perrin that Southern Life was

trying to extend the Trust Agreement and could not do so without the consent of the

Debenture holder and never informed Towers Perrin that Florida Holding and Florida

Federation would only vote to extend the Trust Agreement if Southern Life first

purchased the Debenture. Southern Life failed to inform PSC that missing from the

Valuation was any consideration of Southern Life 's attempts to extend the Trust

Agreement, PSC's control over any such extension and Southern Life's need to purchase

26


the Debenture because Florida Holding and Florida Federation would only vote to extend

the Trust Agreement if Southern Life first purchased the Debenture. In addition,

Southern Life failed to inform PSC that when it submitted Southern Life's offer to

purchase the Debenture to its shareholders, it must inform them that the Valuation did not

consider that Florida Holding and Florida Federation would only vote in favor of

extending the Trust Agreement if Southern Life first purchased the Debenture from PSC.

Moreover, Southern Life did not tell the PSC shareholders that it was attempting to

extend the Trust Agreement or that Florida Holding and Florida Federation would only

consent to the extension of the Trust Agreement if Southern Life purchased the

Debenture. Finally, Southern Life failed to inform the PSC shareholders that the

Valuation did not consider Southern Life's attempts to extend the Trust Agreement,

PSC's control of such extension or Southern Life's need to purchase the Debenture

because Florida Holding and Florida Federation would only consent to the extension of

the Trust Agreement of Southern Life purchased the Debenture.

68. Southern Life also knew that its Material Omissions and

misrepresentations involved in the Valuation would be relied on by PSC to seek and

obtain approval by a majority of PSC's shareholders of the sale of the Debenture to

Southern Life and, ultimately, to sell the Debenture to Southern Life.

69. Alternatively, Southern Life acted with severe recklessness with respect

to the Material Omissions and misrepresentations contained in the Valuation and other

information provided to PSC and Plaintiffs and further acted with severe recklessness

with regard to the dissemination of that misleading information to PSC and Plaintiffs.

27


70. PSC relied directly on Southern Life 's Material Omissions and

misrepresentations in soliciting , through the Proxy Statement , a vote by PSC's

shareholders, including Plaintiffs, to approve by a majority the sale of the Debenture to

Southern Life. Those PSC shareholders who voted to approve the sale of the Debenture

by PSC to Southern Life also directly relied on Southern Life' s Material Omissions and

misrepresentations . Those PSC shareholders who did not vote to approve the sale of the

Debenture , and who instead dissented and exercised their appraisal rights, including

Plaintiffs, were nonetheless forced sellers of their shares in PSC.

71. Southern Life 's Material Omissions and misrepresentations in

connection with its purchase of the Debenture and the resulting forced sale of Plaintiffs'

stock in PSC directly and proximately caused PSC and all of its shareholders, including

Plaintiffs, to suffer damages.

WHEREFORE, Plaintiffs, derivatively on behalf of PSC, demand judgment in

their favor and against Southern Life for damages plus interest, court costs , reasonable

attorney's fees and such other relief as may be just and equitable.

COUNT II

(For Common Law Fraud Under Florida Law)

72. Plaintiffs incorporate herein by reference and reallege paragraphs 1

through 61 above as if fully set forth herein

73. Southern Life omitted material facts and misrepresented material facts

in its dissemination of information, including the Valuation, to PSC and Plaintiffs, which

omissions and misrepresentations were provided by using means or instrumentalities of

28


interstate commerce or of the mails in connection with Southern Life's purchase of the

Debenture.

74. Specifically, Southern Life knowingly and intentionally, or with severe

recklessness, made the Material Omissions defined in paragraph 36 above including

omissions regarding the number of surviving Charter PolicyHolders, the amount of

money needed to pay their de minimis premiums, that there was no longer a business

purpose for maintaining the Trust in order to pay de minimis premiums to surviving

Charter PolicyHolders, and that it was and is legally permissible to terminate the Trust by

setting aside the funds needed to satisfy its payment of de minimis premiums to surviving

Charter PolicyHolders. In so doing, Southern Life misrepresented that the Trust

Agreement was not expected to terminate until 2033 and that the Debenture would not or

was not expected to convert into actual stock of Florida Holding until that time. In

making that material misrepresentation, Southern Life knowingly and intentionally or

with severe recklessness omitted the material fact that the trust created by the Trust

Agreement (the "Trust") had long since served its purpose and was no longer necessary to

protect the entitlement of any remaining Charter Policyholders to receive the de minimis

amount of three times their respective insurance premiums over each three-year period.

Thus, Southern Life knowingly and intentionally or with severe recklessness omitted the

material fact that the Trust Agreement had effectively terminated such that PSC had a

present right to 27.7% of the stock of Florida Holding equivalent to a 2.77% interest in

Southern Life. Southern Life thereby misrepresented the value of the Debenture by at

least $31.6 million.

29


75. Southern Life also failed to inform Towers Perrin that Southern Life was

trying to extend the Trust Agreement and could not do so without the consent of the

Debenture holder and never informed Towers Perrin that Florida Holding and Florida

Federation would only vote to extend the Trust Agreement if Southern Life first

purchased the Debenture. Southern Life failed to inform PSC that missing from the

Valuation was any consideration of Southern Life' s attempts to extend the Trust

Agreement, PSC's control over any such extension and Southern Life's need to purchase

the Debenture because Florida Holding and Florida Federation would only vote to extend

the Trust Agreement if Southern Life first purchased the Debenture. In addition,

Southern Life failed to inform PSC that when it submits Southern Life's offer to purchase

the Debenture to its shareholders, it must inform them that the Valuation did not consider

that Florida Holding and Florida Federation would only vote in favor of extending the

Trust Agreement if Southern Life first purchased the Debenture from PSC. Moreover,

Southern Life did not tell the PSC shareholders that it was attempting to extend the Trust

Agreement or that Florida Holding and Florida Federation would only consent to the

extension of the Trust Agreement if Southern Life purchased the Debenture. Finally,

Southern Life failed to inform the PSC shareholders that the Valuation did not consider

Southern Life' s attempts to extend the Trust Agreement, PSC's control of such extension

or Southern Life' s need to purchase the Debenture because Florida Holding and Florida

Federation would only consent to the extension of the Trust Agreement of Southern Life

purchased the Debenture.

76. Southern Life knew or should have known of the falsity of these

30


Material Omissions and misrepresentations made in connection with its purchase of the

Debenture from PSC.

77. Southern Life intended that its Material Omissions and

misrepresentations, as set forth in Paragraph 30 above, would induce PSC to rely on them

to seek and obtain approval by a majority of PSC's shareholders of the sale of the

Debenture to Southern Life and, ultimately, to sell the Debenture to Southern Life. A

majority of PSC's shareholders relied on Southern Life's Material Omissions and

misrepresentations in voting to approve the sale of the Debenture to Southern Life. Those

PSC shareholders who did not vote to approve the sale of the Debenture, and who instead

dissented and exercised their appraisal rights were nonetheless forced sellers of their

shares in PSC.

78. PSC and all of its shareholders, including Plaintiffs, suffered injury in

justifiable reliance on Southern Life' s Material Omissions and misrepresentations.

WHEREFORE, Plaintiffs, derivatively on behalf of PSC, demand judgment in

their favor and against Southern Life for damages plus interest, court costs, reasonable

attorney's fees and such other relief as may be just and equitable.

DEMAND FOR JURY TRIAL

Plaintiffs demand trial by jury on all issues so triable.

DATED this 8th day of May, 2008.

By: s/Robert W. Thielhelm, Jr.Jerry R. LinscottFlorida Bar No. 148009

[email protected]

31


Robert W. Thielhelm, Jr.Florida Bar No. [email protected]

Eric S. Golden

Florida Bar No. [email protected] & HOSTETLER LLP

SunTrust Center, Suite 2300200 South Orange AvenuePost Office Box 112Orlando, Florida 32802-0112Telephone: (407) 649-4000Telecopier: (407) 841-0168

Attorneys for Plaintiffs, suing derivatively

on behalf of PSC

32


VERIFICATION

STATE OF FLORIDA

) SS:

COUNTY OF

I have read the foregoing VERIFIED DERIVATIVE COMPLAINT FOR

VIOLATIONS OF FEDERAL SECURITIES LAWS and know its contents:

I am a party to this action. The matters stated in the foregoing VERIFIED

DERIVATIVE COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWSare true of my knowledge except as to those matters which are stated on information and

belief, and as to those matters I believe them to be true.

Executed on May , 2008, at f )/e 4 4 ' , Florida.

GENE BADGER

SWORN TO AND SUBSCRIBED before me this day of May, 2008, by

GENE BADGER, who is personally known to me or has producein k n u>,-) as identification.

(Notary

(Notary Name Printed)NOTARY PUBLICCommission No.:

D_'^ 7 O53q

PATRICIA MCLAUGHLIN

g MY COMMISSION # OD590539

0046f11.15 EXPIRES: Aug. 30.2010

(407) 398&0163 Florida Notary Sorvio®.com

33


CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on May 8, 2008, I electronically filed the foregoing

with the Clerk of the Court using the CM/ECF system which will send a notice of

electronic filing to the following:

Karl Joseph Brandes

[email protected],[email protected]

• E. Clifton Hodge, [email protected],[email protected]

• James W. O'[email protected],[email protected]

• B. Lyle [email protected],[email protected]

s/Robert W. Thielhelm, Jr.Robert W. Thielhelm, Jr.Florida Bar No. 889679

026588, 000002, 501825334.1

34

Case 6:06-cv-00637-JA-KRS Document 56-2 Filed 05/08/2008 Page 1 of 1

INDEX TO EXHIBITS

Exhibit Description

1 Stipulation of Settlement

2 Debenture

3 Trust Agreement and Amendments

4 Minutes from August 25, 2004 Board Meeting

5 Valuation

6 Ingraham Opinion Letter

7 French Letter

8 May 11, 2006 Demand

9 August 10, 2006 Response to Demand

026588, 000002 , 501877592.1


EXHIBIT 1

Case 6:06-cv-0063 RS Document 56-3 FileddO /2008 Page 2 of 27

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF FLORIDA

GAINESVILLE DIVISION

BILL R. WINCHESTER, ETC.,ET AL.

VS.

FLORIDA FARM BUREAU EQUITIES,INC., ETC., ET AL. DEFENDANTS

STIPULATION OF SETTLEMENT

IT IS HEREBY STIPULATED AND AGREED , by and among the

members of the class ( the "Class") and defendants , by their duly

authorized counsel, subject to the approval of the United States

District Court for the Northern District of Florida (the "Court")

pursuant to Rule 23( e) of the Federal Rules of Civil Procedure,

that the above-captioned action (the "Litigation") and all claims

which have or could have been asserted in the Litigation arising

out of the subject matter of the Amended Complaint (the

"Complaint") with respect to defendants shall be and hereby are

settled, compromised and dismissed with prejudice without costs,

upon and subject to the following terms and conditions (the

"Settlement") :

EHIBifJ

PLAINTIFF

CASE NO. GCA 84-0148-MMP

Case 6:06-cv-00637#KRS Document 56-3 Filed 0468/2008 Page 3 of 27

A. Background

1. On or about October-26, 1984 , a complaint was filed on

behalf of the named plaintiff and all others similarly situated

against FLORIDA FARM BUREAU EQUITIES, INC., a Florida

corporation ("Equities"), FLORIDA FARM BUREAU FEDERATION, a

non-profit general farm membership organization ("Federation"),

and SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY, a Mississippi

corporation ("Southern Life*).

2. On or about January 24, 1985, the plaintiff filed a

motion for determination under Rule 23(c)(1) of the Federal Rules

of Civil Procedure that the action may be maintained as a class

action.

3. On or about March 14, 1985, the Court granted the

plaintiff' s class ' certification motion. The action has proceeded

on behalf of all persons who were beneficial owners of common

stock of Equities on or after October 4, 1983, and who were

requested to surrender their stock for a cash payment due to the

liquidation of Equities, excluding the defendants and members of

the board of directors of the defendant companies who approved

the transactions which are the subject of this action, as well as

members of their immediate families, pursuant to Rule 23(b) (3) of

the Federal Rules of Civil Procedure.

4. On or about July 18, 1985, the plaintiff filed an

amended complaint and added CARL.B LOOP, JR. ("Loop"), SCOTTIE J.

BUTLER ("Butler"), and RAYMOND V. MOSELEY, JR. ("Moseley") as

defendants in the action.

-2-

Case 6:06-cv-00637-SKRS Document 56-3 Filed 0S/2008 Page 4 of 27

S. The amended complaint generally alleged that the

defendants, among other things, engaged in actionable conduct by

participating in and causing the sale of FLORIDA FARM BUREAU LIFE

INSURANCE COMPANY ("Florida Life") to Southern Life for less than

its true value and for diverting a portion of the value received

for the sale away from Equities' minority shareholders.

6. The defendants filed answers denying the alleged

violations and denying any liability to the plaintiff and other

members of the Class.

7. During the pendency of the action from 1985 through

the date of the execution of this Stipulation , extensive

pre-trial discovery of the parties and non-parties has taken

place. An exhaustive investigation into the facts. and

circumstances relevant to the allegations of the Complaint has

been completed. Having conducted this thorough investigation,

counsel for the respective parties have concluded that the

principal issue in the action involves differing opinions by

experts as to the proper method of valuing Florida Life.

Qualified experts in evaluations of life insurance companies have

expressed differing opinions as to the complicated question

concerning the value of Florida Life. The plaintiff and the

defendants acknowledge that each of them has acted in the utmost

good faith in prosecuting and defending the litigation and in

attempting to arrive at an appropriate evaluation of Florida Life

which is fair to all shareholders.

S. Counsel for plaintiff and the defendants have

evaluated t_`:-B expense and length of time necessary to prosecute

-3-

Case 6:06-cv-0063TOKRS Document 56-3 Filed 00/2008 Page 5 of 27

the action through trial, taking into account the uncertainties

of predicting the outcome of complex litigation such as this.

Based upon consideration of all these factors, counsel for the

Class has concluded that it is in the best interest of the Class

to settle the action with defendants as set forth in this

Stipulation of Settlement, which settlement will result in

substantial benefits to the Class.

9. This Stipulation shall in no event be construed or be

deemed to be evidence or an admission or a concession on the part

of any of the defendants of any fault or liability or damages

whatsoever. The defendants deny any and all wrongdoing of any

kind whatsoever and deny any liability to the plaintiff or the

Class in this Litigation, and do not concede any infirmity in the

defenses which they have asserted in the Litigation. The parties

are entering into this Stipulation in order to avoid further

expense, inconvenience and delay, to dispose of this burdensome

and protracted litigation on the terms provided herein, and

thereby to put to rest all controversy concerning all claims

which have or could have been asserted in the Litigation.

B. ADDITIONAL DEFINITIONS

10. As used in this Stipulation of Settlement and the

related documents annexed hereto as exhibits, which are

incorporated by reference herein, the following terms shall have

the meanings set forth below:

(a) "Class member" means any beneficial owner of

common stock of Ecuities who on or after October 4, 1983

was requested to surrender his or her stock for a cash

-4-

Case 6:06-cv-0063740KRS Document 56-3 Filed 0S/2008 Page 6 of 27

payment due to the liquidation of Equities excluding the

individual defendants and members of their immediate

family.

(b) The "Stipulation" means this Stipulation of

Settlement and the exhibits attached hereto all of which

are incorporated herein by reference;

(c) The "Settlement Hearing" means the hearing which

will be held by the District Court to consider final

approval of this settlement pursuant to F.R.Civ.P. 23(e);

(d) The "Settlement Effective Date" means the date

by which (1) the settlement (including provision for

attorney' s fees and reimbursement of costs) is finally

approved in all respects by the Court, (2) a final

judgment in accordance with Section F hereof is entered

thereon, and (3) the time for appeal from such final

judgment shall have expired (which shall be deemed to be

33 days from the entry of such final judgment), or, if any

appeal is taken, the expiration of three days after such

appeal shall have been finally determined by the highest

court before which appellate review is sought ("appeal"

includes a petition for certiorari filed in the United

States Supreme Court), and not subject to further appeal;

(e) The "Settlement Fund" means Two Million Dollars

($2,000,000.00) plus any interest earned on any part

thereof as provided in paragraph 12 less any costs

incurred in connection with the administration of the

settlement;

-5-

Case 6:06-cv-00637*KRS Document 56-3 Filed 0S/2008 Page 7 of 27

(f) "Net Settlement Fund" means the Settlement Fund

less all attorney 's fees , costs and reimbursement for

expenses and interest thereon;

(g) "Claimant" means any class member who files a .

proof of claim in such manner and within such time as the

Court shall prescribe;

(h) "Authorized Claimant" means a claimant whose

claim has been allowed as provided in paragraphs 18 and 19

below;

(i) "Current Shareholders " means all holders of

record of common stock of Equities on or after October 4,

1983;

(j) "Non-Appealable order" means the order of the

court approving the settlement and as to which clauses (2)

and (3 ) of the definition of "Settlement Effective Date"

shall have occurred; and

(k) "Plaintiff' s Escrow Counsel" means Kenny

Nachwalter & Seymour, P.A.

C. The Settlement

11. The obligations incurred pursuant to this Stipulation

shall be in full and final disposition and settlement of all

claims, demands , rights and causes of action whatsoever (whether

class or individual in nature , and whether or not now known)

which have or could have been asserted by the Class Members or

any of them against the defendants , or by any of the defendants

against the Class Members or any of them, in connection with,

arising out of, or in any way related to any acts , failures to

-6-

Case 6:06-cv-00637#KRS Document 56-3 Filed 08/2008 Page 8 of 27. ,

act, omissions, misrepresentations, facts, events, transactions,

occurrences or other matters set forth, alleged, embraced or

otherwise referred to in the Litigation, including without

limitation in the Complaint, the amended complaint, and pre-trial

proceedings herein, against the defendants or any of them,

including all claims for violations of federal, state, common or

other law.

12. In full and complete settlement of the claims which

have or could have been asserted by the Class against defendants

or the defendants against the Class in the Litigation and subject

to the terms and conditions of this Stipulation:

(a) Payment of $2,000,000.00 shall be made on behalf

of the defendants in the following manner:

(i) Federation, on behalf of Loop, Butler, and

Moseley, shall pay $1,500,0700.00 to the Class Members

($250,000.00 of which shall be borrowed by Federation

from Southern Life); and

(ii) Federation, on behalf of Loop, Butler and

Moseley and/or THE MUTUAL FIRE, MARINE AND INLAND

INSURANCE COMPANY (and/or its successor in interest)

("Mutual Fire") and/or Loop, Butler, and Moseley,

shall pay $500,000.00 to the Class Members from any

and all proceeds received by Federation and/or Loop,

Butler or Moseley from Mutual Fire pursuant to the

claim filed under Federation's directors and officers

liability insura:re policy. Loop, Butler and Moseley

shall execute and deliver to plaintiff an

Case 6:06-cv-00637S-KRS Document 56-3 Filed •8/2008 Page 9 of 27

assignment, security agreement and UCC- 1 Financing

Statement (in form reasonably acceptable to counsel

for the Class ) within seven days after the Settlement

Effective Date securing the payment of the. first

$500,000 . 00 paid by Mutual Fire (or its successor in

interest ) relating to such claim . Copies of these

documents shall be forwarded to Mutual Fire (or its

successor in interest).

(b) All interest earned on the $2,000,000.00 less

any fees and expenses incurred to maintain and administer

the escrow account shall become part of the Settlement

Fund. Withdrawals from the escrow account shall be made

as necessary to pay any Court awarded attorney 's fees,

costs, and expenses on or after the Settlement Effective

Date.

(c) The payment required pursuant to paragraph

12(a)(i) above shall be made to Plaintiff' s Escrow Counsel

within seven (7) days after the Settlement Effective Date.

The payment required pursuant to paragraph 12(a)(ii) above

shall be made on behalf of Loop, Butler and Moseley to

Plaintiffs' Escrow Counsel within seven (7) days after

Federation and/or Loop, Butler and/or Moseley receive any

payment from Mutual Fire (or its successor in interest)

with respect to their claims(s) filed with Mutual Fire (or

:mss successor in interest).

(d) FLORIDA FARM BUREAU HOLDING CORPORATION, a

-8-

Case 6:06-cv-00637.KRS Document 56-3 Filed 008/2008 Page 10 of 27

Florida corporation ("Florida Holding"), owns 101 of the

common capital stock of Southern Life, which is subject to

certain restrictions contained in the Agreement and

Declaration of Trust dated July 15, 1947, as amended, a

copy of which is attached hereto as Exhibit "A"). Florida

Holding is in good standing in the State of Florida and is

a wholly-owned subsidiary of Federation. Within 7 days

after the Settlement Effective Date, Federation will cause

Florida Holding to issue to a corporation, partnership,

trust or other entity to be formed by Class Members

("Shareholders Corporation"), a convertible debenture or

debentures which shall be convertible into twenty-seven

point seven percent (27.7%) of the outstanding common

capital stock of Florida Holding. Assuming all Class

Members file proofs of claim, each Class Member shall own

a pro rata interest in the convertible debenture or

debentures which approximately corresponds to the pro rata

minority interest such Class Members held in Equities

prior to its liquidation. The convertible debenture or

debentures to be issued shall be convertible into 27.7%

of the outstanding common capital stock of Florida Holding

upon the earliest of the following dates: (i) the

termination of the Trust for the benefit of the charter

policy holders pursuant to -the terms of the Agreement and

Declaration of Trust dated July 15, 1947 as amended ( a

copy of which is attached hereto as Exhibit A and which

Federation and Southern Life represents is a true and

-9-

• I I

Case 6:06-cv-00637-OKRS Document 56-3 Filed 0•/2008 Page 11 of 27

correct copy of the Agreement and all amendments or

modifications thereof) ; or (ii) the bankruptcy,

liquidation or dissolution of Southern Life.

(e) It is the intent of tho parties that

Shareholders' Corporation shall be entitled to receive the

same financial benefits it would receive if it owned

outright 27.7% of the Common Stock of Florida Holding. In

the event Southern Life pays any cash dividend(s) on its

stock owned by Florida Holding, then in such event,

Florida Holding shall pay to Shareholders' Corporation

27.7% of such dividend(s) within 7 days of receipt

thereof. By the terms of said Agreement and Declaration

of Trust, these dividends are presently limited to 6% of

$80,000.00 and the dividend paid in the past has been said

$4,800.00 plus $900.00 expenses and it is not presently

anticipated that this will increase.

(f) Federation, Loop, Butler and Moseley shall

diligently pursue their claims filed with Mutual Fire (or

its successor in interest) and shall keep Plaintiff's

Escrow Counsel reasonably informed as to their progress,

and will honor all reasonable requests for information

relative thereto.

(g) Federation shall execute and deliver to

Plaintiff' s Escrow Counsel on or before the Settlement

Effective Date a certificate confirming the following:

(1) It is the owner and holder of all issued

and outstanding shares of Florida Holding;

-10-

Case 6:06-cv-00637.-KRS Document 56-3 Filed 08/2008 Page 12 of 27

(ii) Florida Holding is the owner and holder of

1,360 shares of common stock in Southern Life which

is 10% of the outstanding stock of Southern Life.

(iii) Its shares of Florida Holding and Florida

Holding's shares of Southern Life are not pledged or

encumbered and that no other person or entity has, or

claims, any interest in such shares except for the

restrictions applicable to such shares contained in

the Agreement and Declaration of Trust dated July 15,

1947, as amended, a copy of which is attached hereto

as Exhibit '"A" ;

(iv) Except as provided in said Agreement and

Declaration of Trust dated July 15, 1947, as amended,

it will not sell, transfer, pledge, assign, convey,

or otherwise dispose of its shares in Florida

Holding, or any interest therein, nor will it allow

same to occur by operation of law, or otherwise, nor

will it authorize or permit the issuance of any

additional shares in Florida Holding, other. than

strictly in accordance with the terms of this

Stipulation and the terms of the Convertible

Debenture.

(v) It has caused Florida Holding to place,

upon the face of all issued and outstanding stock

certificates in Florida Holding, a legend giving

notice that the sale, transfer, pledge, assignment,

conveyance or other disposition of any interest

-11-

Case 6:06-cv-00637-*KRS Document 56-3 Filed 0•/2008 Page 13 of 27

therein, is subject to the provisions of the

Convertible Debenture; and

(vi) It will not take, or permit any action to

be taken by Florida Holding, which would dilute or

reduce the interest of the Class Members in Florida

Holding including, but not limited to, doing, or

failing to do, any act which would trigger the rights

of first refusal under Article "I (e) " or Article

"II(b)" of the Agreement and Declaration of Trust

dated July 15, 1947, as ainended .Nothing herein shall

prevent Florida Farm Bureau Federation or Florida

Holding from purchasing the interests of individual

class members - on such terms as may be agreed to by

the parties.

(vii) it will not permit , or allow , Florida

Holding to expand or modify its operations by

entering into any other enterprise, or type of

business or venture other than directly related to

the business of Southern Life.

(h) Federation shall at all times comply and shall

cause Florida Holding to comply with the covenants set

forth in paragraphs 12(g) (i) through 12(g) (vii) above.

(i) Federation's counsel shall provide Plaintiff's

Escrow Counsel prior to the Settlement Hearing with an

opinion in form reasonably acceptable to Plaintiff's

Escrow Counsel that neither the issuance of the

Convertible Debenture, nor any provision of the settlement

-12-

Case 6:06-cv-00637.KRS Document 56-3 Filed 008/2008 Page 14 of 27

documents, will trigger the rights of first refusal as set

forth in Article "1(e)" or Article "11(b)" of the

Agreement and Declaration of Trust dated July 15, 1947, as

amended, or otherwise violate the provisions of that

instrument, that all corporate action and approvals

necessary for entry into and the performance of this

settlement have been taken and that the provisions of this

Stipulation shall be fully binding upon the De fendants and

that the corporate Defendants are duly organized, validly

existing and in good standing.

13. This entire settlement is conditioned upon and

subject to the granting of the Motion for Approval of the

Settlement by the Court as provided below.

14. As'soon as practicable after this Stipulation has

been executed , the parties shall jointly apply to the Court for

an Order with Respect to Notice, Settlement Hearing and

Administration (in the form attached hereto as Exhibit "B"), as

follows:

(a) Directing tat a Settlement Hearing be held to

determine whether the settlement should be approved as

fair, reasonable, and adecuate, and in the best interests

of the Class, and, whether judgment should be entered

dismissing the Litigation on the merits and with

prejudice, and in the event that the Court approves this

settlement, to pass upon the application of plaintiff's

counsel for allowances of fees and expenses; and to pass

on such other matters as the Court may deem appropriate;

-13-

• Case 6:06-cv-006370-KRS Document 56-3 Filed 138/2008 Page 15 of 27

(b) Providing that notice of this settlement and o f

the Settlement Hearing be given in the name of the Clerk

of the Court by or at the direction of the Court by

mailing a copy of the Notice, Proposed Settlement of Class

Action and Settlement Hearing (the "Notice"),

substantially in the form attached hereto as Exhibit "C",

to all members of the Class at their last know address

appearing on the records maintained by Equities' transfer

agent substantially in the form annexed hereto as Exhibit

"D";

.(c) Requiring a filing of a sworn statement by

counsel for the Class, prior to the hearing to be

scheduled pursuant to subparagraph (a) above, of mailing

of the Notice and of publication of the Publication

Notice;

(d) Determining that the Notice and Publication

Notice described in paragraph (b) above constitute the

best notice practicable under the circumstances and

constitute due and sufficient notice of the Settlement

Hearing to all persons entitled to receive notice; and

e) Providing for other matters set forth in Exhibit

B.

D. Administration and Calculation of Claims

15. Plaintiff 's Escrow Counsel shall be responsible for

supervising the administration of the settlement and disbursement

of the Settlement Fund, subject to order of the Court. Any

portion of The Net Settlement Fund shall be distributed to

-14-

Case 6:06-cv-0063.KRS Document 56-3 Filed.c 8/2008 Page 16 of 27

Authorized Claimants as soon as practicable on or after the date

plaintiff's Escrow Counsel receives any payment pursuant to

either paragraph 12 (a) (i) or 12 (a) (ii) above.

16. Each Class Member shall be paid approximately $6.00

for each share of Equities' common stock owned by them on or

after October 4, 1983, from the payment received pursuant to

paragraph 12(a) (i) above, less attorney's fees and costs. Each

Class Member shall be paid approximately $2.00 for each share of

Equities' common stock owned by them on or after October 4, 1983,

from any payment received pursuant to paragraph 12 (a) (ii) above,

less attorney's fees and costs, if, as and when such payment' is

received by Plaintifs Escrow Counsel.

17. Payment in the manner set forth above shall be deemed

conclusive against all Class Members. All Class Members whose

claims are not approved by the Court shall be barred from

participating in distributions from the Settlement Fund, but

otherwise shall be bound by all of the term of this 'Stipulation,

including the terms of any judgment entered in the Litigation.

E. Processing and Determination of Claims

18. For purposes oil determining the extent, if any, to

which a Class Member shall be entitled to be treated as an

Authorized Claimant, the following conditions shall apply:

(a) Each Class Member shall be required to submit a

Proof of Claim, substantially in the form annexed hereto

as Exhibit"E", supported by such documents as are

designated therein or such additional documents or proof

-15-

Case 6:06-cv-00637-ISKRS Document 56-3 FiledD,S/2008 Page 17 of 27

as Plaintiff's Escrow Counsel, or their agents, in their

discretion, may deem acceptable;

.(b) All Proofs of Claim must be submitted by the

date specified in the Notice unless such period is

extended by Order of the Court. Any Class Member who

fails to file a Proof of Claim by such date shall be

forever barred from receiving any payment pursuant to this

Stipulation ( unless , by order of the Court, a later filed

proof of Claim by such Class Member is approved ) but shall

in all other respects be bound by the terms of this

Stipulation and. by final judgment entered in the

Litigation. A Proof of Claim shall be deemed to have been

submitted when posted, if received and if a postmark is

indicated on the envelope and it is mailed first-class

postage prepaid and addressed in accordance with the

instructions thereon, and in all other cases shall be

deemed to have'been submitted when actually received by

Plaintiff' s Escrow Counsel or their designee;

(c) Each Proof of Claim shall be submitted to and

reviewed by Plaintiff 's Escrow Counsel or its agents who

shall determine in accordance with this Stipulation and

Order of the Court the extent, if any, to which each claim

shall be allowed, subject to review by the Court pursuant

to paragraph 18 (e) below;

(d) Plaintiff' s Escrow Counsel or its agents may

communicate with Claimants in order to remedy deficiencies

in proofs of Claim submitted. Plaintiff' s Escrow Counsel

-16-

Case 6:06-cv-00637-.O(RS Documenf 56-3 Filed 0S/2008 Page 18 of 27

or its agents shall notify, in a timely fashion and in

writing, all Claimants whose Proofs of Claim they have

rejected in whole or in part, setting forth the reasons

therefor, and shall indicate in such notice that the '

Claimant whose claim is rejected has the right to a review

by the court if the Claimant so desires and complies with

the requirements of paragraph 18(e) below;

(e) If any Claimant whose claim has been rejected in

whole or in part desires to contest such rejection, the

Claimant must , within twenty ( 20) days after the date of

mailing of the notice required in subparagraph (d) hereof,

serve upon Plaintiff' s Escrow Counsel or its designee, a

notice and statement of reasons indicating the Claimant's

grounds for contesting the rejection along with any

supporting documentation , and requesting a review thereof

by the Court; and

(f) In the event any proceeds of settlement remain

with Plaintiff 's Escrow Counsel after processing all

Proofs of Claim,. any such remaining proceeds shall be paid

and transferred to Shareholders' Corporation.

?9. Each Claimant shall be deemed to have submitted to

the jurisdiction of the United State District Court for the

Northern District of Florida with respect to the Claimant's

claim, and the claim will be subject to investigation and

discovery under the Federal Rules of Civil Procedure , provided

that such investigativn and discovery shall be limited to that of

Case 6:06-cv-00637 .KRS Document 56-3 Filed d*8/2008 Page 19 of 27

Claimant' s status as a Class Member and the amount of the

Claimant' s. claim.

20. All proceedings with respect to the settlement

described by this Stipulation and the det

controversies relating thereto, including

law and fact with respect to the validity

subject to the jurisdiction of the United

for the Northern District of Florida.

F. Final Order and Judgment

ermination of all

disputed questions of

of claims, shall be

States District Court

21. If the Court approves the settlement as provided

herein, Loop, Butler and Moseley must execute and deliver to the

Class an assignment, security agreement and OCC-1 Financing

Statement and the parties shall submit for entry by the Court a

proposed Final Order and Judgment, substantially in the form

annexed hereto as Exhibit "F", providing as follows:

(a) Approving the settlement, as provided herein, as

fair, reasonable, and adequate and in the best interest of

the Class and directing consummation of the settlement in

accordance with all of its terms and conditions;

(b) Dismissing the Litigation with prejudice and on

the merits and without costs and extinguishing all claims,

rights, demands and causes of action which either the

Class Members or any of them have or may have, and which

have been or could have been asserted against any of the

defendants or which any of the defendants have or may

have, and which could have been asserted against the

members of the Class in connection with, arising out of,

-18-

Case 6:06-cv-00637S-KRS Document 56-3 Filed.608/2008 Page 20 of 27

or in any way related to any acts, failures to act,

omissions, misrepresentations, facts, events,

transactions,, occurrences or otherwise referred to in the

Litigation, including without limitation in the amended

complaint herein, including all claims for violations of

federal, state, common or other law settled as described

of provided for in this settlement agreement;

(c) Permanently barring each and every Class Member

either directly or representatively , from asserting

against any of the defendants , or any defendant from

asserting against any member of the Class, any claim

right, demand of cause of action .(whether class or

individual in nature ) in connection with, arising out of

or in any way related to any acts, failures to act,

omissions , misrepresentations , facts, events,

transactions , occurrences or other matters set forth,

alleged, embraced or otherwise referred to in the


complaint and pretrial proceedings therein, including all

claims for violations of federal , state , common or other

law; and

(d) Reserving jurisdiction over all matters relating

to the administration, consummation and enforcement of the

settlement provided for herein.

G. Effect of Disapproval of Settlement

22. If final approval of the settlement described in this

Stipulation is not obtained for any reason whatsoever, the

-19-

Case 6:06-cv-00637 ,-KRS Document 56-3 Filed 38/2008 Page 21 of 27

.Stipulation shall be null and void, shall have no further force

and effect with respect to any party in the Litigation, and shall

not be used in the Litigation or in any other proceeding for any

purpose. All negotiations, proceedings and statements made in

connection herewith shall be without prejudice to any person or

party hereto, shall not be deemed or construed to be an admission

by any party of any act, matter or proposition and shall not be

used in any manner or for any purpose in any subsequent

proceeding in the Litigation or in any other action or

proceeding.

if. Fee Application

23.• At a hearing immediately following the hearing

concerning approval of the settlement, plaintiff's counsel will

apply to the Court for an award of attorney's fees and

reimbursement of expenses from the Settlement Fund. Plaintiff's

counsel shall apply for attorneys' fees not exceeding 25% of the

total payments due pursuant to paragraph 12 above, plus the

reimbursement of plaintiff's expenses, plus interest on such

sums.

1. Stivulation In Not An Admission

24. This Stipulation and the settlement provided for

herein, whether or not consummated, and any proceedings taken

under the Stipulation, are not and shall not in any event be:

(a) construed as or deemed to be evidence or a

presumption , concession or an admission by defendants or

any of them of the truth of any fact alleged or the

validity of any claim which has or could have been

-20-

Case 6:06-cv-006370-KRS Document 56-3 Filedt8/2008 Page 22 of 27

asserted in the Litigation, of the deficiency of any

defense which has or could have been asserted in the

Litigation, of the deficiency of any defense which has or

could have been asserted in the Litigation, or any

liability, fault, wrongdoing or otherwise of defendants or

any of them; or

(b) offered or received as evidence as a

presumption, concession-or an admission of any fault,

misrepresentation or omission in. any statement or written

document, report or financial statement heretofore issued,

filed, approved-or made by defendants or any of them; or

(c) offered or. received as evidence as a

presumption, concession or an admission of any liability,

fault or wrongdoing or in any way referred to for any

other reason against defendants or any of them in the

Litigation or in any other civil, criminal or

administrative action or proceeding other than such

proceedings as may be necessary to consummate or enforce

this Stipulation of Settlement; or

(d) construed by anyone for any purpose whatsoever

as a presumption , concession or an admission of any

liability, fault, wrongdoing or otherwise on the part of

defendants or any of them; or

(e) construed as a concession or an admission that

plaintiff and the Class Members or any of them have in

=act suffered any damages or that defendants or any of

them are liable to any member of the Class; or

-21-

Case 6:06-cv-0063710-KRS Document 56-3 Filed-48/2008 Page 23 of 27

(f) Construed as an admission or concession by

anyone that the consideration to be given hereunder

represents the amount which could be recovered after

trial.

J. Release

25. If the

herein, prior to a

and Moseley must e:

security agreement

the Class agree to

Court approves the settlement as provided

complete release taking effect, Loop, Butler

icecute and deliver to the Class an assignment,

and UCC-l Financing Statement . The members of

the following general release:

(a) Upon final approval by the Court of the

settlement described in this Stipulation, all class

Members and their respective heirs, executors,

administrators, representatives, agents, successors and

assigns, shall be deemed to release and forever discharge

each and all of defendants of and from any and all manner

of claims, actions, causes of actions, suits, obligations,

debts, demands, agreements, promises, liabilities,

controversies, costs, expenses, and attorneys' fees

whatsoever (whether class or individual in nature),

whether based on any federal or state law or right of

action or otherwise, foreseen or unforeseen, matured or

unmatured, known or unknown, accrued or not accrued, which

the Class, the Class Members or any of them ever had, now

have or can have, or shall or may hereafter have in

connection with, arising out of, or which are in any way

related to any acts, failures to act, omissions,

-22-

Case 6:06-cv-00637S-KRS Document 56-3 Filed 48/2008 Page 24 of 27

misrepresentations, facts, events, transactions,

occurrences or other matters set forth, alleged, embraced

or otherwise referred to in the Litigation, including

without limitation in the complaint herein, the pre-trial

proceedings herein, or in connection with this settlement

or the distribution thereof. Notwithstanding the

provisions of this paragraph 25(a), the Class is not

releasing any claim or right they have to' seek enforcement

of the terms of this Stipulation of Settlement or any

other agreement(s) relating thereto.

(b) Upon final approval by' the Court of the

Settlement described in this Stipulation, all defendants,

and any corporations or other entities in which any

defendant has a controlling interest, shall be deemed as a

matter of law to have released and forever discharged all

Class Members and their respective heirs, executors,

administrators , representatives, agents , attorneys,

successors and assigns of and from any and all manner of

claims, actions,- causes of action, suits, obligations,

debts, demands, agreements, promises, liabilities,

controversies, costs, expenses, and attorney's fees

whatsoever (whether class or.individual in nature),

whether based on any federal or state law or right of

action or otherwise, foreseen or unforeseen, matured or

unrnatured, known or unknown, accrued or not accrued, and

whether or not asserted in the Litigation, which the

defendants or any of them ever had, now have or can have,

_-,13 -

Case 6:06-cv-00637 ,-KRS Document 56-3 Filed0g/2008 Page 25 of 27 .

or shall or may hereafter have in connection with, arising

out of, or which are in any way related to any acts,

failures to act, omissions, misrepresentations, facts,

events, transactions, occurrences or other matters set -

forth, alleged, embraced or otherwise referred to in the


complaint herein, the pre-trial proceedings herein, or in

connection with this settlement or the distribution

thereof. Notwithstanding the provisions of this paragraph

25(b), the defendants are not releasing any claim or right

they have to seek enforcement of the terms of this

stipulation of settlement or any other agreement(s)

relating thereto.

K. Miscellaneous Provision

26. All attorneys agree to cooperate fully with one

another in seeking Court approval of this Stipulation and to use

their best efforts to effect consummation of this Stipulation and

the settlement provided for herein.

27. All of the exhibits to this Stipulation are an

integral part of this Stipulation and the agreement of the

parties to this Stipulation, except that the agreement attached

hereto as Exhibit 2 between the plaintiff and all defendants

except Southern Life is not a part of the agreement between

Southern Life and the plaintiff and is not a part of this

settlement as to Southern Life and the said agreement is not

binding upon or enforceable against Southern Life.

-24-

Case 6:06-cv-00637*KRS Document 56-3 Filed ®W/2008 Page 26 of 27

28. This stipulation, and its exhibits, may be executed

in one or more counterparts, all of which together shall be one

instrument, and all of which shall be considered duplicate

originals.

29. The Court shall retain jurisdiction with respect to

enforcement, construction and/or interpretation of the terms of

the Stipulation of Settlement and any agreement(s) related

thereto.

30. Should the enforcement, construction and/or

interpretation of this Stipulation be the subject of litigation

between the parties, the prevailing party shall be entitled to

receive reasonable attorneys' fees and court costs for all

proceedings, trials and appeals incurred by such party.

IN WITNESS WHEREOF, this Stipulation of Settlement has

been executed by the undersigned counsel of record as of the

dates set for below.

_7c_

Case 6:06-cv-0063 k KRS Document 56-3 Filed 008/2008 Page 27 of 27

KENNY NACHWAL ER & SEYMOIIR, A.400 Edward.-ma11 Bu lding100 Cho Plaz;

44 LJ:Aw-Bic r /omas K. Seyymo r

17Date : / •3 -

Attorneys for the Class Members

COMMANDER LEGLER WERBER DAWESSADLER & HOWELL

200 Laura eetJacks I le , F r dZ2201-0240

BSteven A. Werber

Date : 7/X//f4-

Attorneys for DefendantsFlorida Farm Bureau Equities, Inc.Florida Farm Bureau Federation,Carl B. Loop, Jr., Scottie J.Butler and Raymond V. Moseley

HEIDELBERG , WOODLIFF& FRANKS

Suite 1400 , Capit Towers

B.- l-

Jack

z

s pi 392

Samuel . Scott

'Date: 3 7

Attorneys for Defendant

Southern Farm Bureau LifeInsurance Company

-26-


EXHIBIT 2

H . t HKf4 ovr-taAR 6:Q -cv-OQ6-OA-KRS-' • 'ocument 56-4 File•/08/2008 Page 2 of 5 uj

0

FLORIDA FARM BUREAU HOLDING CORPORATION

Convertible Debenture

Florida Farm Bureau Holding Corporation, a corporation

organized under Florida law, herein called the "Company", for

value received, and in accordance with the terms of the Agreement

dated September 4, 1987 executed by the Company and the attorneys

for a class of former stockholders of Florida Farm Bureau

Equities, Inc., hereby promises that on the "Conversion Date" as

defined below ("Bolder") shall be entitled to

receive newly-issued, shares of capital stock of the Company in

such number as shall be equal to twenty-seven and seven-tenths

percent (27.7%) of the total number of shares of capital stock

which shall be authorized for issuance and outstanding

immediately following such issuance to Holder.

The Conversion Date shall be the earliest to occur of the

followings

(i) The termination date of the trust established

under that certain Agreement and Declaration of Trust dated July

15, 1947, as amended, 'among the Farm Bureau Federations of the

states of Arkansas, Florida, Georgia, Kentucky, Louisiana,

Mississippi, North Carolina, South Carolina, Texas and Virginia,

and certain of their affiliates, a true and complete copy of

EEXtlBR

2

Case 6:06-cv-0063*-KRS Document 56-4 Filed 008/2008 Page 3 of 5

Which, as amended as of the date hereof, is attached hereto as

Appendix A and incorporated herein ( the ":'rust Agreement") ; or

(ii) The elimination or modification of the restrict-

ions set forth in Article n e; and/or Article 1I(b) of the Trust

Agreement to permit the transfer of capital stock of the Company

to the Holders or

(iii) The occurrence of any of the following:

(a) Southern Farm Bureau Lite Insurance

Company, a Mississippi corporation, hereinafter called " Southern

Life", shall (1) voluntarily terminate operations or apply for or

consent to the appointment of, or the taking of possession by, a

receiver, custodian, trustee or liquidator of Southern Life or of

all or a substantial part of its assets, (2) admit in writing its

inability, or be generally unable, to pay its debts as such debts

become. due, (3) make a general assignment for the benefit of its

creditors, (4) commence a voluntary case or proceeding under any

applicable federal or state bankruptcy, insolvency, reorganiza-

tion or other similar law, (6) fail to controvert in a timely and

appropriate manner, or acquiesce in writing to, any case or

proceeding filed against it under any applicable federal or state

bankruptcy, insolvency, reorganization or other similar law, or

(7) take any corporate action for the purpose of effecting any of

the foregoing; or

- 2 -

.r

r^ FAi^MC cv- A_K -15

BU ^ ^^ Obcurnent 56-4Mar ^i 11 :1U

Fitt /08/2008No.U1U I UbPage 4 of 5

(b) without its application, approval or

consent , a proceeding shall be commenced in any court of

competent jurisdiction seeking the liquidation, reorganization,

dissolution, winding-up, or composition or-re-adjustment of debt,

the appointment of a trustee , receiver , liquidator or the like or

any other like relief with respect to Southern Life under any

federal or state law relating to bankruptcy, insolvency, or.

reorganization , and if any such proceeding i s being contested in

good faith by Southern Life, the same shall continue undismissed,

or unstayed and in effect for any period of sixty consecutive

days; or

(c) Southern Life shall be liquidated or

• dissolved.

Holder shall be entitled to receive the same financial

benefits it would receive if it owned outright 27.7% of the

capital stock of the Company. Accordingly, in the event Southern

Life pays any cash dividends to holders of its stock, then in

such event, solder shall be entitled to receive a payment

hereunder of an amount equal to 27.7% of such dividends received

by the company an the shares of capital stock of Southern Life

owned by the Company. Such payment to Holder shall be made

within seven days of the Company's receipt of such dividends or

other distributions.

This Convertible Debenture may not be redeemed or amended in- 3 -

0

.. • = - Case 6:06-cv-0063*-KRS Document 56-4 Filed 008/2008 Page 5 of 5

0

any manner without the written consent of Holder.

Date s l^-

0

- 4 -

11 dw

FLORIDA FARM BUREAU HOLDINGCORPORATION


EXHIBIT 3

• Case 6:06-cv-00637*- Document 56-5 Filed 008 Page 2 of 43ACPEra-&M ANC D FEOLAAA TRUST to

ok" .

k"THISAOAZD fl ' AND DECLAAd1ICH OF TRUST made and entered into on

th!i 15th day of JU171 Al).,.1967, In the City of Son lntonio, state of Taxes,bt'Ud botcoon the following named and daeignotod purtieso Alebaae Fora Bureau1'etIlotion, an association organized not for profit under the lows of the Stateof Albboma , with its home office located in the city of 11ontgomor7 , llsbama,Arklneas Farm Bureau Federation, an association organised not for profit underth1 lane of the State of Arkoncoe, Pith its home office located at Little Rock,Arkanscal Kentucky Form Bureau Federation , ann association organized not forprofit under the love of the State or Kentucky, with the host office located atLouisville, Kentucky] I,liasiosippi Form bureau Federation , an association argor-iaod not for profit under the lane of the State of 11issisbippil with its hostoffice located at Jeekson, Mississippi and Texal ' Farm Bureau Federation, anassociation organised not for profit under the lorn of the State of 7sxos• withits home office loedted at Saco, Toxass all of ouch five associations beinghoteinofter designated on "State Form Bureaus ;" and Aloboaa Farm Bureau Invest-nent Corporation , n corporation organized under the laws of the state of Alabama,with its home office located in liontgomery , Alabama; Arkansas Farm Bureau invest-

mant Corporation ,_ a corporation organized under the laws of the state of Arkansas,with its home offieC located at Little Rock , Arhancos; Kentucky Fora Bureau

Investment Corporation , a corporation organized undor the lows of the State of

Kentucky , with its home office located at Louisville, Kentucky; Mississippi Form

Burdou Investment Corporation, a corporation organized under the loon of the

Stat i of Mississippi; with its home office located at Jackson , liisaissippi;

and Texas Farm Bureau Investment Corporation, a corporation organized under the

laws of the State of Texas, with its home office located at Uncap Texas, all or

such five investment corporations being hereinafter dosignatod "State invostasnt

Corporations " p flITNESSETH,

M WSj State Flare Bureaus are general farm organizations, each

with a very substantial number of fore families living nithin their respective

states nhoroin each of such State Farm Bureaus is organized for the purpose oradvancing the educational, social and economic Pell-being of agriculture iii

genOtol and Its mombete in particular bud representing its membership in natters

ofr.dublio policy and public relations bad to this and State Form Bureaus have

been intetaetod in and have eponeored the organization of State Investment

Corporations and of Southern Fero Bureau Life Inourence Company# a legal reserve

life inauronoo company , which company is organized under the lute of the State

of Mississippi, with its principal office located in Jackson ., Mississippi, andwherein such legal roservo life insurance company has boon and is now licensedto operate as a life insurance company in each of the states of Alabama,Arkansas , Kentucky Mississippi and Texas; and

nHEREAB, prior to the organization of Southern Farm Bureau LifeInsurance Company and prior to the organization of State Investment Corporationssaid State Form Bureaus made a preliminary canvass of their members to aseor`ainthe interest of such bombers in having their can legal reserve life insurancecompany, the readiness of such members to eubacribo to the capital needed inthe organization of such a life insurance company and the readiness of suchmembbrs to apply fat and pay for a rooeonablo amount of life insurance to beknonm as Chortat lnsulanceg and ohoreas repro sontationq sore mode that FordBursbu monbora willing to become charter policy holdord in such an insurancecompany vnuld hnva ovary advnntago of -a participating policy contract find inaddition would be entitled on an oquitablo basis to hor*icipoto in the ocrhingsof such life Insurance company over and above a rnoeonable return on the capitalfund invested therein and within the limitation ulroroih all policy holders wouldbe lntitlod to participating policies on a not cost comparable to the not costof the leading life insurance companies in the United States ; this being thoughtby such State Farm Aftroaus to properly and equitably reflect the odvontoge oforganization in ostebliehing expeditiously and efficiently and Without heavycost to such life IfbUtanee company a legal reserve life insurance companyoperating on a log net eedt and also reflecting the desire of such State FormBuroauo and State Investment Corporatibhe hot to receive a return In oxceee ofsix per cent ( 6%), cumulative , on the bepital fund invoetod, plus such addi-tional amount as might be roquirod to clay necosnary oxponsoel and

#2766 EXHIBIT

3COM;SITE 1 o r g

Case 6:06-cv-00637S- Docun t&S; t,t. FJ of04*QP. io;,g; COn43,neorcd anu

nizcd under the direction of their z ,,odtivo State Form Buroaus far tiropurpose of obtaining the needed capital fund and for the holding of the capitalstock of tho said Southern Fars Bureau Life Insurance Company, the amount ofthe capital fund contributed by each of ouch State Invostrabt Corporations tothe capital no.da of ouch Life Ineuranco Company being approrimatoly $80,000.,each of such State Investment Corporations having capital stock of too closecs;namely, a class of preforred stock of the par value of $100.00 with dividendslimited to six percent (6%) par arnum, cumulative, and a second class of stockdc3ipnated "common stock" of the par value of 11.00 per share without linito-tion as to dividends such preferred stock being hold in large part by individualfares bureau members of such State Farm Bureaus and the cc on stook in each ofsuch State Investment Corporations having bean issued to and now being hold byt.hn rr.apactivo State Farm Duronusl and all dividends doelAred and distributedby Southern Form Bureau Life Insurance Company to the holders of its stock,State lnvomtndbt Corporations, are after Payment of necessary expensce and the

payment of dividends on the preferred stock of State Invootacnt Corporations-payable to the holders of the common stock of such State lnvcatmont Corporations,namely, such State Form Dureaus; and such State Form Bureaus being desirous of

retaining from bush dividends on amount not to exceed six percent (6%) per annum,

cumulative, on the investacnt of their funds in the common stock of State Invest-

ment Corporntiohs and all of such State Farm bureaus recognizing the pro-orgnnization obligntione to thooa Form Ilurouu nonbcra who become the ot-crs

of charter pelicios are ready and trilling fo n"rlly to onivo and relinquish all

right and title to di4ldcnds on the common atock of ouch State lnvostnontCorporotiono in excess of six percent (6%.) par annum, cumulative, and declarethat all such excess shall be made payable to a trustee conmitten.hereinafterprovided for and horoinoftor designated Southern Faro Bureau Charter Committee;

and

hmE8EAS, Southern Farm Bureau Life Insurance Company has offered

and issued to fart bureau menbere or monbcro of their immediate familiescharter policies known as continuous pronium ondotimant policies maturing atago eighty-five (85), such charter policica on liovn been issued tirithin the St.oto

of ltisninsi pp i bein aerially numbered by such Life Insurance Company within therange of Numbot (1) to. Number (3+000) inalusivo1 such charter policies of haveboon issued within the State of Alabaoo being serially numbered by such LifeInsurance Cocmpahy within the range of Number (3,001) to fumbor (8,000), in-elusive, such charter policies as have boon issued within the Stuto of Arkonansbeing serially numbered by such Life Inouronca Conpany within the range ofNumber (8,00l) to Number (12,000)1 inclusive, ouch charter policies as havebeen issued within the state of Kentucky being serially numbered by such Lifeinsurance Conpahy within the range of Number (12,001) to number (16,000) Inclu-sive, much charter policies as have boon leaved aitlein the Stato of Texas beingseriallynumbered by such Lira Insurance Conpany within the range of Number(16,001) to Number (20,000), incliioivo, ouch policies having identical policycontract provisions and varying only in the amount of insurance for the oovcralholdcro of suclr policies and in ruton according to ages and standards ofclasnificution us to nodicul risked all of ouch policies no issued being heroindesignated as charter policies, and no policy conttucts in the farm of ouchcharter policy contracts have boon issued by such Lifeincurence Company onapplications dated later than Ilny 1, 1947 and no further applications Trill beaccepted by much Life Incuronco Company for policioo of such form and Characteron and after May 1, 19471 and

111IEREAS1 State Farm Durcalia are roody and willing to eirp^ort toevery reuconoblo extent the distribution of life insurance among the farm bureaufamilion rrithin their ranpoctivo Acton by Southern Form Bureau Lifo InsuranceCompany and to such and arc ready to endorse or have endorsed said lifeinsurance company and are ready and milling to obtain or hove obtained theendorsement of such life inouranoo company by County Form Bureaus within theirrespective stated and are further ready and willing to publicize the merits ofsuch Life Insurance Company in their official publications and through otherproper channels# provided honovcr, this in no uimo contenpiotce such StateForm Durcnus or the County Form Bureaus as ngonts of such Lira Innuranco Corn-pany in the distribution of its life insurance policies and enrvicoe.

IN CONSIDERATION OF THEIR MUTUAL GBLICATIC'NS, IT IS AGREED ASFOLLO'T,S I

Vo.B

I I

Case 6: 06-cv-0063 S Document 56-5 Filed 2008 Page 4 of 431. STATE FAIW BUflE,1U5 AOYU

(a) To approve and encourage the distribution of lifeinsurance cervices to their respective members by Southern Form i)uraau LifeInauronco Company and to use ovary reasonable effort to obtain the ondorecncntand the kindly support of such life insurance coupany by their rcapcctiveCounty Farm Bureaus. Neither the State Fare Bureau@ nor the County Form Burccusshell Iwo any obligation to actively solicit life insurenco among their nonborothis being the duty and obligation of the rccognizcd agents of such Life Ineur-once Company . Such State Farm Bureaus and their County Farm Bureaus shall cc-opcrato pith those in charge of the direction and oduinistrntion of such lifeinsurunco company in the selection of qualified pcroons within their rcopcctivrareas , such gnrlifiod rcrcono presently having the ability to act as an agentor pith a reasonable amount of training to become qualified and such agents tobe able to fully eooporeto and support the general and particular programs ofthe respective State Form Duroous and their County Farm Bureaus.

(b) An the holders of the cowon capital stock in theirrespective Stuto Investment Corporations, horeuith formally to release hndrelinquish any claim or claine to dividends on ouch common c;ipital oteek pnyoblcfrom the annual income of such State Investment Corporations beyond an nnsountof $5,700. of ouch income per annum, cumulative, such amount decried to be onamount sufficient for tho payment of a oix percent (G%) per onnutr, cumulativedividend on both the preferred and cocoon capitol atoek of state Invent entCorporationo and to provide State investment Corporations with enough additionalmoney to cleat Fodcral, State and local tnz obligations and to prnvido a rooson-ablu faurd for incidental cspcnscn connected with the corporate operation ofeach of ouch State Investment Corporations. All dividends in w-cone of $5,700.per nnnua, cumulative, received from such Lila lnourance Company by the teepce-

tivo State Investment Corporations shall be paid promptly and uitleout anyunnecessary delay to Southern Fnro1 Bureau Chortcr Cassittoo hereinafter dcsig-noted and provided for. State Fnrm Bureaus apncifically haionith cuthorito such

State Invostnont Corporations to pay mach ozeoas funds to such Southern FormBurt-nu Charter Conmittoo.

(6) To cooporuto with the 9outhorn Form Bureau Charter

towittoo in carrying out the dutios •impusod by this ogrccnont upon ouchCommittee, and spocificolly to obtdin for such comittee, Phan roquorted inwriting by such eor u:iittoo, the nonce and addreusao of their ncnbere in eachStale who are charter policy contract holdors in much Life Insurance Cocipony,togcthar with the nnount of innurunco in force for each such policy contractholder and the gross premium of ouch policy contracts.

(d) To allow, permit and diroct their duly eloctcd andqualified Trenourcre to be and bocomo the n?i. ibcrs of such Southern Fora BureauCharti.r Committee , roquiring such persona to be duly and adequately bonded, notonly to cover their dution no Treosumor of their rr.epeetivo Stntc Form Burnousbut aloe as a member of ouch Committee.

State Farm Bureaus shall cnnpeitecto and meat all noc-ossury expenses of such Treasurers sihilc porforriing their duties no members ofsuch Coemittco ' co that such nonburs of such Goa!nittoc will not, for thcnoolvosbr their respective State Farm Duroaus , use any funds paid by Stato investrcntborporetions to such Cor.rc+ittoo othor than for thu use and distribution noherein provided.

(a) Not to dioposo of their corinon capital stock in theirrospectivo Stato Investment Corporations nhich has been issued to then priorto .July 1, 19L7 whilo this Atrccncht and Dcclurotion of Trust in in full forceland effect unless by operation of inn any of such State Faro Durenus shall berequired to do soy III which event the remaining Strata Form Durcnus or any nnoof then oholl have the first right and rcfuonl to purchase such stoct. at thnpar value thereof and assuno the obligations of thin agreement in reference tosuch common capital otock.

(f) To hcrcuith create and cntnblish a Southern Forn BureauCharter Comnittoo, such connittoc, during the celondar year of A.D., 1947, tobonsiot ofr

#2766-B

Case 6:06-cv-00637E-K6 Document 56-5 Filed A 08 Page 5 of 43(1) V. V. Kitchell of TalOc, Alabama

- Treasurer of the Alabaca Farm Bureau Federation.

(2) Clifford L. Smith of Fayetteville, ArkansasTreasurer of the Arl:ansaa Farm Bureau Federation.

(3) J. E. Stanford of Louisville, KentuckyTreasurer of the Irntucky Fero Duruau Federation.

(6) Sue Tat= of Jackson, Uiosisoi.ppiTrocouror of the 3riz!e I! Bureau federation.

(5) J. 11. post of Bishop, cxTreasurer of the Texas Fare Bureau Federation.

Said V. V. 11itcholl to act an Chairman of such cornittoo and J. H. Ucst to act

as the Secretary and Treasurer of such corwittoa. As of the first of January

in each succeeding your thereafter uhilo thin Agrccnout and Declaration of Trust

is in full force and affect the Choirmonohip for cacti orrouing respective yearshall be the duly elected and qualified Treacurcr of the respective State FormBureaus in the following rotation ordori Arhoironer Kontucky, Hieeisaippi, Taxes

and Alnbnna. The Socrctary-Treacuror of such eonnittco for each ensuing rco-poctivo yrar shall be the duly elected and quulificd treasurer of his rcopocL1vcState Form Burenu and such office ohnll rotnto In the following orrir:riMiesiosirpi, Arkansas, Kentucky, Alobnen, anti Texua.

The pcroons cc designated us of January 1st of any year

shall be and bocono the nombers of such corvaittoo and tho officers thereof and

the mcnbcrship an such connittco and such officors ohall continuo for the full

respective calendar year. Should any pcraon dcaigrurtcd to act on such cosssittoo

or as an officer thereof fail or refuse, or through r)ioobilitr or resignation

copse to be a nocher of ouch cncoittco or an officer thereof, tho State Fora

Bureau of the reopoctive Stnto frocrudrich such pcrnon originotus is herewith

duly authorized to fill much vacancy for thu balcinro of such respcctivc calendar

year.

II . STATE IIIVESTUE2IT COAPCIUITICNS AGREE 1

(a) To receive all divid mule drelored and paid to them bySouthern Fnrn Bureau Life inouranco Company. Out of ouch dividend fund soreceived by then they shall retain, not to cxccod 35,700. per annum, cumula-tive, for the purpose of rioting their expenses of opcrution, tax obligationsand dividend roquirononto on their issued and outotmnIng capital stock inthe amount of six percent (60) per annum, cumulative. Any annunt so rocoivadby State Inroatncnt Corporntiono in cxcoao of $5,700., per anus , cumulative,shall promptly and without dclny be puid to the South.:rn Farm Bureau CharterCorcitteo, so long no this Agrcnoont and Dnclaretion of Trust shall remain infull affect and force.

(b) State Invootr'ont Corporations olrnll not alienate, pledge,hypothoeato or oncunbor in any nay the capital otoek no Ircld by they, in SouthernFare Burcou Life lnournnco Company cc long no this ,igruucumt and Doclnrntionof Trust in in full forco and effect. Should, through operation of lows a"one of the St.oto Invostnont Corporatiohs be required to dispose of such capitalsteak it shall first be nffcrcd to the rcnnihinq State Investment Corporotionoht the per vtluc of oucti ot.ock anri with thu obligation on Of) part of such BtotcInvcotrmmnt Corporations to naaucv: the oblipntiono unrier this Agrcc;,cnt andDeclaration of Trust in reference to ouch stock.

III. FARM BUREAU CHARTER CCl111ITTEE SHALL:

(a) float during any respective calendar year in thin homeoffice of the State Fares Bureau of the State from which the chnirnon may beselected or such other place within tJIe states of Alabnou , Arlransau , Kentucky,tlisdisnippi and Texas as the Chairman tiny designate. Tiro Chairman shall bavothe duty to call, after collaboration frith the Secretory , a ncutin $ of thecommittee . Each nonbor of the cormittoe shall be entitled to ton ` 10) dayswritten notice of such mooting of the committee . Such connittoo shall in itsprocedure use Roberts Rules of Crdar, shall keep a einuto record of itsproceedings , record of oecounta and shall function an trustees of the fundreceived annually from Southern Fern Bureau Life Insurance Conpany.

#2766-C

4 ofs

Case 6:06-cv-006370- S Document 56-5 Filed 008 Page 6 of 43

(b) Rcecivc all fugdo cc r•rovided for herein from SnuthcrnForm Durcau Life Inauroncc Company, shall deposit Ouch funds in the UnionNational Banc of Little Rock, Arkonaaa, and shell iaairc ordure and chocks againstsuco fund in ouch dcpocitory only on the signature of the Trcnaurcr rind cow,tcr-signature of the Clrnirnon of the eotnittco. Such funds rucoivcd by ouchcormittoc ahnl1 be received in truot by it and without profit to the comittecor to any officcra or ncubars of the cotruittcc and without profit to the StateFarm Bureau and shall be distributed only in the folloning aanncr:

The corstittcc shall have the duty to tributo promptlyand without any unncccsaary delay and rritlu I linitotions ofthe participation ccrtificatc hereinafter dcacribed, such fundsto the chartar policy holders as described heroin, any and alldistfibution • made in a" calendar year bhall be ado to charterpolicy contract holders vhoco charter policy contracts Vora infull force and effect on the 31st day of Docor .ibor of the yearnext preceding the year in rdrich ouch fund lion been receivedby the coanittoo rind is dintributed by nuch cnrsrittco.

Tito cornittco, houcver, out of such fund shall estimateand dotorninc the actual coot (not including tiro coat andexponoco of the members of the cntsittco or ouch State FernPurcoua ) of much distribution or funds to the peroons untitledthereto and any other limited incidr : nta]. cxponnoa that suchcornittco ,right have, the renaming portion of such fund olrallbe distributed to the charter policy contract holders asdescribed herein on the folloninC basins The eorzaittco shallooccrtain the agr-rcgeto gross preriuun of charter policies infull force and effect on the )lot day of Deccnbur next proccd-ing and shall dictributo to each chnrtcr policy contractholder entitled to to dintributivn ,.hare a nun determined onthe basic that time Prose annual I•r^rrirv , on his charter policyis related to the aggregate of ail charter policy grottorrcuiuuo on I+•+licico in full force and urfuct on Dcccubur 31stnext preceding , nith this limitation, hooevcrl that for theperiod bcginuing January 1, 1947 and ending December 31, 1949and in each and every bucccoaivo thr,:c year period thereafter,and ,:Idle such charter policy contract is in full force andcffoct, the total unouht of all rliotrihution from ouch fundraado to a charter policy holder and a holder of a e_rtificatocc hcroinaft.r described nhall not exe,:rd the sun of threeannual groan guaranteed prcniur:ww of ouch charter policycontract !older vitlin ouch roepectivc thrco year period.

(c) In the year 19L7, iuauo to each Southern Form BureauLife Inauroncc Cor.mpnry charter policyholder a Pnrtiripatinu Certificate,

which rcrtificaty uhull be oc:rially nunbcrcd and whirls nc:rial number shell

coincirlo rith thu onrial nunbcr of tiro charter policy contract mewed by

Southern Forn Bureau Lifn lrrcuroncc Coupony to such holder of such rorticipa-

tion Ccrtificnte ohnll be nnn-trnnsforabin and nhnll retina in full force and

effect only rdrilc the ruopoctivc ].ifo i : rmrranee cl,nrt.rr policy contrc:ct Ito in

fUll force nnrl rffcct. The participation Ccrtificat.u shall follow ovbatantially

the follnuing forms

"9arial Ilurrbrr

PA1tTIC IPAT1011 CMIFICATE

Thiu is to certify that ofac one of the Chrurtcr policy holders in

Southern Form Bureau Life Lrcurancc Company pith Chnrtcir Policy Contract Ilunbcr

and nithin the group of Garter l'olicy Contract numbered frc+d (1)to (20,000), inclusive, has a buncficinl distributive interest In n fund hcro-

after to be created and augricntod Cron tine to tine by ccrtnin cxccsa earningsIron capital ctocl; dividends received by South.:rn Frtrn L'urcau Charter Comriitt.ecsuch (undo being dosignatcd as "Thu Southern Fnnr Durnau Charter Fund." Thenonicn creating and nugncnting much fund to he rr:eoivcd frrxr time to tine bythe Southern Fern Bureau Charter Cormittec for di.otribution to the holder of

thin ocrtificatc and ether persons holding similar rcrtificatez puraunnt to the

provi:1ono of an agrconcnt heretofore ontorcd into under date of Jelly 15, 191.7

#2766-D

Case 6:06-cv-00637 aaarpd r rR.,j... Filed 8O&-n, J,o#,43eurco,,or Corporot on, cntuc y Faro Bureau tncnt Corporation, Illosls-sipp^. .i Buroou lnvostncnt corporation and Tcxos Fore Bureau Invcotocnt

Corporation thoroin styled State Invcatrxnt Corparational and Alabana FarmBureau Federation, Arronaas Tara BurcaU Fcdoration, Kentucky Fare BureauFederation, Ilissisaippi Fora Bureau Federation and Texas Farm Bureau Fcdero-tionj therein etylod State Form Bureaus, rdtercin within the provisions of suchogrooucnt, such Southern Torn Bureau Charter Concitteo shall receive, holdand distribute in trust said funds to the holder of this certificate and otherporaona holding sinilar certificates, all of idrich is more fully act forthwithin the provisions of such nprccnont.

Tho holder of this ccrtifieato ohall bo ontitlod, uhilo hisChortor Pnllcy Contrnrt is in full force end effect; to roccivo periodicallyas his distributive share of such funds an anount equal to the proportionthoi*tho grous annual premium ad his Charter Policy Contract shall bear tothe aggrogoto of the gross gunrontoed annual prcniuris of all Charter PolicyContracts nunborod from (1) to (20,000), inclusive, in full force and affecton the 31st day of Docenbcr next preceding such distribution, provided, Irnn-ever, that during tho threo year period beginning January 1, 1947 and endingDccanber 31, 1949 and in each and every successive thrcc year period there-aftor and while ouch Charter Policy Contract and this Certificate arc in fullforce and effect that the total :uv+inrt of all distributions wade to tho Balderof this Certificate by the Southern Fnru Durcnu Chartcr Cormittno shall riotcxcocd the can of three annual Croon gunrontecd prroiurm of such holdi•r'oCharter Policy Contract within such rc:apcctivo throe yr.:er licriod.

The obligations of ouch Southern F:rrn Bureau Charter ComI ttccto the holder of this Certificate uhall be fully dinchargcd when Such comit-too sends to the holder liarcof any sun to ulrich Ira i.iny be entitled by ragulorU. S. Mail, to the lost known address of the holdsir hereof.

This certificate is not transferroblc.

IN WITNESS WHEREOF, The Southern Fnrn Drrr..nu Charter Comittcohas cnunrd tide c:rtificote to bu r:xucutcd by its duly nuthorizod Chairmanand Socrotnry at Jackson, Gissiosippi this 15th day of July, A.D., 1947.

SCUTIIENI FMiI DUItF.RU CHARTER CWH1TTEE

J. H. Vast, Secretary - By^Y. V 11itchcll' Chnirnan

(d) Slinuld the funds in any eo&em"r yoofAu an ooountsufficient to tnhn coro of the arrounts provided herein for oduinistretion anddistribution to )roldo=a of Porticiption Certificates, than such excess onowitshall be distributed per oapitu among the roapcctivn Unto Faro Durcous andshall be used by than to carry on general education program in such nzruteras they any conoirlcr ndvisablc.

(a) The conriittca nay, in all thinrn !lone nurouant hereto,act on tho opinion or ndvico of any rcputnblo attorney at law, public account-nnt or actuary cithor obtained by tho oorvrittco or by the pnrtios hereto andshall not be rospondiblc for- any loco oocaoioriad by no noting.

IV. IT 18 EIUTUr1LLI AGJ1 1 DET?.77.N Tlm rjuiriFSt

(a) That the portion hcir.to shall conpcrate in every wayWithin reasonable linitntionn with the Southorn Fnr•n Bureau Charter Coraiitteeto the cud that auch connittec shall handle ouch tricot land in an cxpcditinusand efficient nonner and with a nininua of burden upon the r et1.ir s of suchcorrnittce and the officers thereof.

b) That State Fnrr1 durcnus will save haznlcsn the ncnbcreof each corurit.tco nn the officers thoroof from ouy :rod all linbilitlas arisingiron the rcrfornnnco of their duties an truotuoo except t:hcre any ncl.rbcr ofsuch connittoo has been guildy of dclivornto reilfcm anncu and rrisfcncancc. Anyliability that might bo incurred by any ricrrber of ouch, cni.mittcc and not aria-ing iron dcliborato nalfcncance or iiiefcnnonncc shell ho nsouned by the

#2766-E

L an g

Case 6:06-cv-00637- , ,etip r6 t. 5pu5pus Fi!d^c3 O8 juPage

sim8of 43

fully iuudcr,2,.Cy• onbor of such eoouittoo incurrittig an) ,,uch liability.

(o) The right of the Charter policyholders of,Southcrn Fsrn?uroou Life Insuronec Cohpany to redoivo fran tho Southern Faro Burcnu ChortcrCdwIttoo the paytsonts provided for heroin is rooted and shall not be ooJificdof clinngod In any Bonner as long as any, of said Chartcr Folicics is In fullfdlco and cffcots It trill be porrsisoablo to cnond or rcviao this ogrvorncntwith rcopoct to matters of procoduro and not of oubntonco provided any euchrevision or anondnont has the unanirtouo approval of all parties heroto.

(d) The trust eroatcd by this a reonont shall be tern rwitcdnithln three yrara oftcr the death of the loot aurvlving holder of any suchCharter Policy Contract, Upt#n torutnation of ouch •t not the Southarn FareBtlroaU Coc¢.rittoo br the bcnb•:rs thot6ot shall dietributo any bblanco tenaining,dftcr poyttcnt of expanses and all obligations to Charter polioyholdorep to theStbtc Tarn Burcoue in equal slhares. This agrcanent shell rennin in full forceofd offcct until the torain•ition of such trust.

III WITNESS 111EfEOF ► the portico licroto [love placed their handsand neale to tvclvo ( 12) ol•igin:Ll copies hereof this 15th day of July, A.D. 1947.

AtABA11A PANT BUflZAU FO)EMTIONATTESTt

PresidentSecretary --- -- - r

ARJ AflSAS FANI I3UBZAU FEDFJtATIONAtibetI

flyPrcoidcnt

.' LGt SecretoryK12ITUCKI FANJ BUREAU mmuria1

AI STs

B7

Prooidcnt_ 9uorot

MISSISSIPPI IAIUI BUREAU FIDERATICHT4'ESf ^

^ By CLt!LCLL [C• •'^'^1^ ^

llY.C( ^^" Proaidcnt

SocrotaryATTEST I TEXAS FAlU1 BUREAU FEVErIATICA

9-k')L

Secretary Prusidont^

ALABAXA FANI BUREAU 111VESTIEIIT CORFCRATIONATT$BTt

Pruni.dcntSoc_rotary.. ^__--- . -

AIUSANBA9 FAN. [ DUREAU IIIVF-STIIEflT CCIIFCMTIONATT)8Ti

Prooiduitsecretary/ I

#276&-F

Case 6:06-cv-0063'70-(r Document 56-5

A2'tEST t

V

8cerctar

ATTESTS

Soeratary

Sccrctory

#2166-0

Filed00

008 Page 9 of 43

MWTUCNI FAnft Bunmu 211VE,STIQft ccnrcMrIa.

BL4^"Prooiduit

HIsszssirri FItTJ DUREJIU IINES[IlfNT Cr'RrCRATICM

^j CC Yi((I l[ <`t ,7(C^/ .ByProsidont

TLXAS FMW 1UflL 1i IHVESTkUIT Cc1 PCRATICH

BYS?2^aZ6 Va^^ 4a^

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Case 6:06-cv-00637*41 Document 56-5 Filed 08 Page 10 of 43

AGk1: i: OI

This agreetr•r.t made and ent_r::J ichco on this theday of February _, 1572, in !.I:: ;L r of Jac;:so.1, '•':s:, ssii:piby, between and among the foliowin; ii:imeu' andAlabama Farm Bureau Federation, an association.orranizc:d rot f -jrprofit under the laws cf the Scacc of Alahar..a, with its homeoffice located in Muntgamory, Alaha=.a : Arkansas Farm Bureau Fed-eration, an association organized not fur orofic under the lawsof the State of Arkansas, with its home office in Littie.fc-ck.Arkansas, I:entucky Farm Bureau Federation, an association orglniced not for profit under the laws of the State of I:cncucky,with its home office in Louisville, Icntucky, Mississippi Fa.rn,Bureau Federation, an association organized not for profit undithe laws of the State of Mississippi, with its home office InJackson, Mississippi, and Texas Farr. I;urcau (corporate ncine :Ua:formerly Texas Farm Bureau Federation), an association or-ani;-cunot for profit under the laws of the State of Texar, with itshone office in Waco, Texas, all of such associations beinghereinafter sometimes referred to as "State Farm ;lurraus"; andAlabama Farm Bureau Investment Corporation, a corporationorganized under the laws of the State of 'Mississippi, but qual-ified to do business and loin husines, in the State of A 1aha;:with its home office in t•lontg orrery, Alaba:na, Arkansas r :-nBureau Investment Corporation, a corporation organiz':dj underthe laws of the Ststn of Arkcnsar, with its hone c:ftice in

poration, a corporation organized under the laws of t•hc Scarceof l:entochy, with its home office in Ln:lisville, Kentucky,Mississippi Farm Bureau Investment Corporation, a corporationorgw zed under the laws of the State of i-iississi'ppi., with itshome office in Jackson, Mississippi, and Texas Farm. llureall

Investment Corporation, a corporation. •.-rganized ::cider the laws,of Lhc State of Texas, with its home office in Waco, Tc.'cas,E11 of such corporation: being ocreinaftet So;1.atiiiics ra_fC::c tto as "State Investment Corporations",-

td ITNI SSETII :

WHEREAS, on July 15, 1947, the partics hereto inadc andentered into an "ACfELi•1ENT AND L'ECLAfAT1I OF TRUST", a truecopy of which is annexed hereto as Exhibit "A" and made apart hereof; and

tvHl:r%L'11S, there is a dispute bels•woen Alabatra Farin Bureau

Federation and Alabama Firm Bureau Investment Co+:purntion and

the remaining parties hereto as to the interpretation, i.ppli-caticn, validity, and eniarccability of the aforrsricl "AiGPf!:-I•JEtlT AND AF.CIAaATTOR OF Ti:l.ST" d::ted .1LI%' lS, 1:'/:7 and for tl:cp'1rpn;e Of Sattlinr said disp ut:e and forevor pret'_ltcling anyfurther proceedings or c].ii;n ni an,,, kind lint-can said p-irriospertaining thereto, the I:arcies t•te_ ero hive .1,,i ecec! u!._n a fie-a 1sor.tJ.em`nt i.n the :,araer and upon the. terns Ii.:r_i.n scc Lu_tn:

I e. 7

Case 6:06-cv-0063710- Document 56-5 Filed 008 Page 11 of 43

NOW, 111EREFORF., in cen.:ideration of the premise- :,,,d thefurther agreements .nd consi(l.:rations herein sct focth, it i_stipulated and agreed by, bcrwcen and among the par, hercroas follows:

5CC1'IoN I

1 . A labamna Farm Bureau Ines twntic Corporation w i l l

simultaneously with the cxecution and delivery of this a rue-

ment assign and deliver unto Southern Farm Burer.u Life Ir.sui-o,:cc

Company of Jackson, Mississippi, being the legal reserve life

insurance company more fully described in the document, E-.hibic

"A" hereto, the Four Hundred (1,00) shares of con-non scocI of

said insurance company owned by said investment corporation

for Eighty Thousand Dollars ($80,000.00). The parties thereto

other than Alabama Farm Bureau Investment Corporation andA1ab::mo Fart,, Bureau icderaciun will cause said insurance cnrtp:iny

.to pay said sum in cash. Such sale and assignment shell convey

absolute title to such stock without any reserved or re.sultin-,

lien, equity or claim, inchoate or other::ise, of any sort

wh. tsoever in or unto said Alabama Farr_ Bureau Jnvestment Cor-

poration.

2. A,s of the close of business tin Decuirber. 31, 1971,

Southern Farm L'urenu Life Insurance Comp-nn '• had a ::iirp 1 us accou:ct

in the sum of Twenty-Five Million Five hundred T:cettc}°-1\:n Tisous-

and Four Hundred Thirty-Eight Dollars an•! Forty-'ltro Ccnts

($25,522,431:412) . It .s agreed that for the period frotu or.guii-

premiums paid to said company on hlabacu policies nmotint:cd is

approximatcly thirteen percent (131) of total premiums paid t:u

said company on all policies fur said period. Thirteen percent

(131) of Twenty-Five Million Five Hundred 'naency-Two T;iottsa.:d

Four Hundred Thirty-Eight Dollars and Fort,-I'vo Cent:; ($25,5222,=3P

i.rr Three Million Three Hundred Seventeen Thousand Mi ue Hundred

Si::tcen Dollars and Minery-Nirtie Cents ($3,317,916.V91 . The d(iIinr

figures stated in this paragraph r,d where referred to elsewitc:,1_

in this agreement are subject to adjustments for any

expenses, taxes, etc., includinL, any Lax consequene:c:: StCL'5^311^_

from this agreerc,ent, which were incurrcd prior to Ue::urib• er 3 1 ,

1971, and also to any unknown credits and additions to .lccttra! Ly

fix the earned surplus account as of Daceniber 31., 1971.

3. In the event a sale, liquidation , merger w ith anotl*cr

company, or other reshap ng of the cerporare structure of Sot•r5-

ern Farm Bureau Life In hence Company , : hall result in di!:tril,-

ution to stockholders of rue surplus of said companv, or ati)•

part thereof , then and in that .:vent , Lhe Stoclcholdcrs r.eceiVi.fZ

such distribution shall share t1 i same with Alabanr: • F.irri Eurt!at.

lnvststment (: nr.nnratinn. its ac ni +ne or irs ]ceel successor in

i.ntor est by paying twat t: stico corpornticr• or sn •:! t asnirra; ot-

successor in interes t ; St:m equal to t1kc : distribuLi.0.1 that t:ould

h ave been paid to such i-•v^_,t:;:ent corporation had it been at iI:c

time of the distribution rue I:nlder of mcn.ty pe::corn: ('(J..) u

the co=on capital stuck of said life insur a nce cc':ip::ay, uittil.

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1 [ 1 1_ i ,

Case 6: 06-cv-0063 - S Document 56-5 Filed 2008 Page 12 of 43

pay!cnts so ;made tr gc•t her with cry sun paid to Alabaut faro,Bureau Federation under the provisions of paragraph 4 next hclv.,aggregate the slim of Three Hil lion Three I!urdred Scvc,tt ccnThousand Nine 11und;ccl Si:cLaen Cullers and Ninety-:tine r_et)cs($3,317,9)13.99), without interest. In the event of any suchdistribution of surplus heinr made. the parties h:rcto ocherthan Alabama Farm Bureau Inve::tncr,c Corporation and Alabano ['z:mBureau Federation assume the burden of seeing that and sun>.;due hereunder to Alab.:m:l Farm l:ur.eau Investment Corporation orits assigns or legal successor in interes are paid, withoutundue delay.

4. In the event that dividends upon the common s tocl:of Southern Farm l;ureau Life Insurance Company shall hereafterbe declared and paid in excess of an amount sufficient to enableeach of the investment corporations in Arkansas, Kentucky, 1'!is'•-i.ssippi and Texas (and any other similar corporations in otherstates which may hereafter become stockholders.in said liftinsurance company) to pay: (a) actual expenses, (b) tax obli-

gations, (c) dividends on its own capital stock in a sum equal

to six percent (6x) per annum, cumulative, on the anount paid

by such corporation for cournon capital stock held by it in

SouthErn Farm Bureau Life Insurance Company (the parties heretorecognize that the su.n of items (a), (b) and (c) may exceed the

ettilnate therefor of Five Thousand Seven Hundred Dollar-it($5,700.00) contained in the aforesaid allreament and dec larnti na

of trust, F•:hibit "A" hereto) and (d) sums to be 1)a.-.d over to

Southern Farm Bureau •C: arter Conmittee to be disbursed to

iimri,:r i-ni ir.vi,nirirr'i :ice r+rrnri,i: A fur i,. vain earn.+.._...r ,....

declaration of trust, Exhibit "A" hereto; and such excess is,

pursuant to the terms and provisions of the aforesaid agrecn:e,it

and declaration of trust, F.rhibit "A" hereto, in the hands of

Southern Farm Bureau Charter Comnittce for disbursv•ucnt pursuar.u

to the provisions of paragraph (d) of Sect ion III of said

ment and declaration of trust; then and in that event, ct sum

equal to twenty percent (20;.) of such exccss shall be disburs_c1

and paid to Alabama Farr: Bureau Federation.. Any payments rr.k r

this paragraph 4 of Section I hereof to Alabama Farm Bureau

Federation and any payments under paragraph 3 next above to

Alnh;,,rm Farm Bureau Investment Corporation and/or its legal

assigns or successor in interest shall never exceed in the

aggre;,,ate the sum of Three Million Three Hundred Scvcutccn Tl-.ok-s-

and Nine Hundred Sixteen Dollars and Ninety-Nine Cents ($3,30,91-6

withou_ interest. It is agr::ed that Southern Farm Bureau Charts-r

Committee shall not be required to disburse any such funds in

its hands unless the ;cnount thereof exceeds Three Thous--Ind U.,ilar:

($3,000.00). "Actual. itxhenses" as used in this pate^1'np!^ 4

of Section I hereof nicans only postage, supplies, rent for

space occupied, clerical salaries, and the like, of corpornLiiiims. ..n••who are St4rlrhnlrl^.rr of sai d 1'f mss':^...n,^ r dcM,%r^n

include any nortian of tzil.irie_ or exr,c:n:^:s of tcrir•r•rc ofFarm Bmicaus sponsor such shareholder corporai•ions likeprovi :ions of this pzragraphh Is of Section I hereof rrl.ate tocash dividends only and not to stock dividends, if any.

-3-

3. I

• -

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Case 6:06-cv-00637S- S Document 56-5 Filed 2008 Page 13 of 43

5. When an n grc ra rc: sum of l'a'ce Million Thrc•c HundredSeventeen Thousand Nine Iluru red Sixt- .r Dollars and Ninet y-NineCents ($ 3,317,916.99), withou t inters•rt, has been paid coAlaba ma Farm Bureau Investment Corp-:ration and/cr its zrs igns or

legal successor in interest and/o r Alabama Farm Bureau ruder-

ation from any of the sources mentioned in paragraphs 3 and/or

4 above , said inv::st. nt cor.uoratiun . Sul/or. its assign = or 1,:6111

successor in interest and; or said federation shall have no

further rights whatever to receive from any of the part its here-

to or from Southern Farm Bureau Charter Conrnittcc any sum:. On

account of dividend income, direct or indirect, distributions

of surplus, or other income whatsoever, which the stocl ; tiolders

of South e rn Farm Bureau Life Insurance Company may receive from

said company.

SECTION II

1. To the full extent that they have legal authority

to do so, the parties hereto other than Alabama Farm Bureau

Investment Corporation and Alabama Farm Bureau Federation,

hereby release and relieve Alabama Farm Bureau Investment Cor-

poration and Alabama Farm Bureau Federation of all liability,

obligations and recpcnsibilitics assumed by them 3:.. spactivcly

under the terms and provisions of the aforesaid acrcement ;.nd

declaration of trust dated July 15, 1947, Exhibit "A " hcrc:to.

2. To the full extent that they have legal aut hority

to do• so, the parties hereto' other than Alshanre farm Bureau

hereby_Assun:e and agree to fulfill and carry out the 1i:.bili._y,

obligations and responsibilities of said Alabama corporation

and federation under the terns and provisions of the aforesaid

agreement: and declaration of trust dated July 15, 1947, L::hibit

"A" hereto.

3. Alabama Farm Lurcari Federation and Alabama F-jrw

Bureau Investment Corporation hereby renounce, give no and

forever surrender all rights or privileges of ever. kind and

character which they have had or now have under =nd pursuant

rc the terra: and provisions c+f the said agreement and dec Tara t ion

of trust dated July 15, 1947, l:::hibit "A" hereto, in like manner

and with like effect as if they had not been parties s ignator y

thereto; and they e^preesly agree that the execution of this

agreement confers no rights whatever upon them in respect of

said agreement and declaration of trust, Exhibit ".1" hereto,

or in respect of the making of any modificarions or char-es

therein or even in the total cancellation and terminctivn

thereof, or in the conduct of the business and affairs of

Southern Farm Bureau Life Insurance Company.

SL'CTI')W III.

1. From this time forward neither Alaban::r Farm l.trrcat,

Investment Ccrpnratir'n (or its legal sup-Crssor in inter t) nor

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i i t t rCase 6:06-cv-00637S.S Document 56-5 Filed %2008 Page 14 of 43

Alabama Farm -) Lircnu Federation shall have any voice whatcverthe conduct of the business or affairs of Southern Farm BureauLife. Insurance Company.

2. The parties hereca other than Alabama Farm Bureat:Investment Corporation and Alabanwi Earns Fact rarion oblthemselves to give reasonable notice to said Alabama corporal icnor its legal successor in interest and said federation ui theoccurrence of any of the things specified in paragrap;is 3 ot• 4of Section I hereof which would or give rise to rightsof said corporation or its legal successor in interest orsaid federation.

SECTION IV

1. The parties hereto other than Alabama Far m. I;urcauInvestment Corporation and Alnbacu Farm Bureau Federation obli.;at«themselves to employ all reasonable means of seein g thatFarm Bureau Life Insurance Company shall provide to its policy-holders in Alabama company services reasonably comparable andequivalent to those provided to its policyholders in other

states wherein it operates.

SECTION V

1. Nothing in this agreement shall create a debtor--

cf-A

Southern Farm Bureau Life Insurance Company.

'2. Alahams Farm Bureau Investment Corporation and

Alabama Farm Bureau Federation e::pressly ack:ioviled-- ar.d eSre.

that neither of them has any right whatever to demand or cause

to he taken any action which would bring about tip= disrril:uti or

to stockholders of the surplus, or any part thereof, of St.uth-

Prn Farm Bureau Life Insurance Cemp^ny; or to cause any 'exce

dividends to be declared and paid on the stock of said ;

or to participate in any way in the business and affairs -of

said company.

SECTION VI

1. This agreement shall be binding upon and its benefits

shall inure to the parties hereto and their successors and ass

and also shall be binding upon subsequent stockholders of Soutlh-

ern Farm Bureau Lille Insurance Company, i f any , in at;cordancawith the terms hereof, and this agrccn ►cnt shall continue inforce and effect until Alabama Farm Bureau Corrc+r.lionand/or its assigns or lr.gat successors in interest .11'u;ur Ala-b3uw Farm Federation shall have recei ved said sum ccThree Million. Threm Hundred Seventec Thous a nd Pin' : ! ur.dr^ vSixteen Dollars and Ninety-;line Cents (c3,317, 91(.99 ), ••lit:hc-ct:interest , or until the end of two (2) -,-eatra after the r•=: rr.-ination of lire aforesai d AGRL•::I' NT AI•:D 1;ECI.1kA71O UC '1R1;:5'1•dated July 15, 1947, t'hich evcr shall first occur . ThcrcatCor,

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S oe-, 1


no party hereto nor any other person shall have or claim anyright or be tinder any obligation under or pursuant to the pl-o-visions hereof.

IN WITihhESS WHEREOF, the parties hereto have placed th=irhands and scats to t:+nlvc (12) original copies hereof cn che.

day and year hcreinabovc first csritten.

ATTEST :

Secretary

ATTI+ST : ..

Secretary •J/

ATTEST:

Secretary:

AT ESa' :

Secret ary

Secretary

ATTEST :

S retary

ATTEST :

Secretary

ATTEST :

Secretary

ALABAMA FARM BUREA FEDEI L\T IC`I

By\Pres ident

ARILANSAS FARM BUREAU FEDERATION

DY 4-41

President

KENTUCKY FARM BUREAU EEDERATIO1H

President

MISSISSIP I FARM BUREAU FEDERATION

President

President

AIADAt ta FARH BUREAU Tl,'l^t:STt•^^Z'CORPORhT a

DyPresident

ARKANSAS FARM BUREAU Ii:VE• STMF.NT

CORPORATION

Yresidenc

KENTUCKY FA ? ; BUREAU INVEST ENT

CDRPOL4TIOi1

AY /President

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b e''.

Case 6: 06-cv-00637 S Document 56-5 Filed %2008' Page 16 of 43

ATTE MISSISSIPPI FAR:9 BUREAU II4VESTMr,?CORPORAT I O;$

^ Secietolry Yrcsidenc

ATTEST: TEXAS FARM BUREAU Itl'/ESTME\T

CORPORATION

Secrccary / Presidenc

-7-

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1 I ^


KENTUCKT FAIUI oUPTAU IIt'ESTID7 CCN'CMT10(,ATtZSTI

Prooidcnt

-7 8ccrctarHIssissiPr i FAN.1 ounF.AU Ilrvcsrwa CCUMA7ICH

A^'IEST

I

By. /t eti ltt "t X710 I ,Provident

Soervtary?ELl9 FARM BUlt>;.1U IHVES?!1F]i? CCRPCRATICH

Alt= 1.

By rcoidcntSccrctary

N27bb-a

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Case 6: 06-cv-00637 - RS Document 56-5 Filed 2008 Page 18 of 43

At;kF.FI,T n'!'

'rLMi A(;AF..F,'1-;-RT made miJ C;lr.170 '.1 i.,-,CC' (W ..his i.l:. 16th --

dily ofFebru nrr 1973 it L1,^ Ci:.; :,1 .".,1:.

7CXis, by, 13Ctti.?ft11 and aui)ng Lt:e fi^1I•..t•:lllt; 1;.IT2:.J %iii• d.F 7:" :1:.tL:•I

Farti.a-r .

01; ENE ONE PAg1':

Arkansas Form Bu:au Feu =:-JLi:;n, all

not i:ar profit uncle, thn ]nws of th_ Start )[ Ai.l::,'.;as, 'rich

Lc,- lboin•: office. at Little iccck, AvIcar-.Y_]::, 1::-llcuc4; 1-'arm hur_n,u

J: ucLaY. i.q::, an u.S000i YCli:1 orrrnnizr-d nJ! IOr 7=GL:L :j i i j: :I,_

o!: the State G.r ::c],ttuL•i:; , ui.t:;l it:.. ......,_ ^•tli^: at ;.uu;.-

l.c 1tL'ck , 1•iiss^.:.d]71i1 tunrl tiijyejju F ti•^L' Li. ^Q:, :i). il^j\ •^ J:]Ci:'n `.

t.ln:: ; c:tt t .• L ^^:.. _ i s :. ;';:urKsnizec! for profit under the 1:!v; s of

wi r.h i ts,; h:rme cif Ice at. Jar_k,on, Iii S.; isr, i pp ! , -I. i d i

Bureau t;curporete ran.was fcrnr_rly Far= L--roll 1 'a:.!_r3Li,7r1: ,

an a o t'i. tion or: -;zc-L not for profi t L,,.a3r L,".-: laws \7S tl".•.

St.itc of with tt:s 11=we rffir.c a: Waco, ':':.: ate; :..:•^ Sri:,...,....

I'mu; turcSlr Jnves i:,!nt (''Jrporal i.un, v l:J l'l)•!L'tt:.!). 1

the Laws cf the. Star•i: r,f Ari:ai''s, with it= ho:s..t ui, L •:• : t1

Inch, /!^•:::,l:ail.±, ::.^:;^:.:::j• Far-as Bure:i: Inve::tmr-iii: CoraJrnr.io.i, :r

corporation oroal:iz.:J mid,--r the ::14:5 of tttGL1: cif '

with its htnue of*i&. rt Louisviiia, Kentucky, MIsc::.sipni

Bureau InvPStrr:nt C:.:rpor:utir.n, a cc.i:pnratiolt e:•;;sni^2d rl;• i::r r.::

lat73 of tile St;iL*. of il.ti}.'i sip111^ with its 17.I1 .r. ;AS ' .^• 1::.:..:^i

liississippi, and Te :; :'arm iiureau i:l•'r.^.tinen :G:It..1'aLi•:i: l

corpor:nti c.., .:ride the lm-:, of t:lte St:,tu

it: harr of ice ::': :rata,

I ti li'

f Case 6: 06-cv-00637 - S Document 56-5 Filed S2008 Page 19 of 43

ON THE OVER PART:

Georgia Farm Bureau Federation , an association urganizud

not for profit under the Lfws ,f the State of Georgia, t,.ich its

home office at Mcicon,Geor` ia, li^uiai. a^^a Fair„ burceu 1'cderatiui

an association organi :e d not for profit uude: i: the laws or the

Slate of Louisiana, with its home office at Baton l:ou_ru, Louisi :i.i•;,

North %r:olina Farm Bureau Federat i on, an asSoci :ction orbaciz.:J

not for profit under the laws of the State of North Caro ).ilia ,

with its home office at Raleigh, North Carolina, South Caroli,-•.

Farm Bureau Federation , Inc., an Yasuciation organiccd pint fo.

profit under the laws of the State of South Carolina with its

home office at Columbia , South Carolina , and Virginia Farm Btsrc;;c:

Federation an association organized not for profit under the Jcc-•:;

of the State of Virginia , with its hour_ office at Ri._ hra.nu, Vi: -

einia : and Georgia Farm Bureau Federation Holding Comoannv. Inc_.

a ccirpoi:etion organi :.eu under the lar+ s of the State. of GL-urgin.

with its hoake office at Macon, Georgia, Louisiana Farm Buraau

Invcat runL Corpor:..tion , a corporation organized under the laws

of the. Srate of Louisiana, with its home office at Laton l2nuo: ,

l.cui iana, North (;aroiina Farm Bureau Investment Corpora::inti,,

a corporation crgsaized under the laws of the State of N.^rth

Carolina, with its Lowe office at Raleigh, torch Carolina, SouLi.

Uarolina Farm Bureau InvesttenL Corporation, a corporltiur

under the laws of the State of Soulli Carolina, with its home- 0.C L i.':r:

at Columbia, South Carolina, and Virginia Farm Bureau Holding

Corporation, a corporation or-ani:cr' 'in±er the. l.!w, cif !' StArp

of Virginia, witi, its houia office at Richmond, Virginia;

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1 << is

Case 6:06-cv-00637 - S Document 56-5 Filed 2008 Page 20 of 43

(ile nine farm bureau (^rir^3tic,u^ :1erc:.•rhovenamed as parties hereto will ba ccreinaftci ..nc-times referred to as r'Stacu Farm Gurcaus"; nineother corporations hereinabovu named as liar: ;.::;hereto will Iiereinattrr• ronrLii:.rIs he refer:::', coas "State Investment Ccritoracioiis"; the eta:.,:-(if Arkansas, Kcntucky, ?1lssis::ippi and Te.,:as willhcreinni'ter snraetirucs be et:fsrl:ed Lo as "OriginalStates"; and the states of Gcungia, Louisiana,North Carolina, South Carolina and Virginia willhereinafter sometimes be referred to as "NLW States") -

WITHESSrrli :

WHEREAS, the above named Stare Farm Bureaus and State

Investment Corporations of the Original States (with two other

parties to be referred to presently) rude and enccrrd into ar

agreement called "AGkEUIFNT P_ND DECLARATION OF TRUST" ct Sac

Antonia, Texas, on July 15, 1947, a true copy of which is

hereto, marked Exhibit "A" and made a part hereuf, (which in::r_.-

her: inal^^::lnent will for convenience be sometimes referred to

as the docuuent, Exhibit "'A" hereto"); and

\-IUEREAS, Alabama Farm Bureau Federation, an assc+ciutiiru

organized nut for profit under die laws cf the State of Alabe-,,

with its home office at Nontijocicry , Alabama, and 1.ai; tr.a lariti

Bureau Investment Corporation, a corporation ore.laizcd un'Icr t.h^

o :ac-L^•,1awr, of the State of Alabama, with its home office at Monti

Alabama, (which federation ar.d r. urpo:atino arc

tines r e ferred to as "A1ahrrs Corpora rions" '). were

parties to said docuuiuut E:a,ihit "A " hereto; and

W1IF.REAS, in July, 1950, there was organized in ti-.e Sate

of 14iacissippi un 3ai. 1i1.^.: iss ^^1:i 1:r? it ..:r1::1rur i nn is tthl File? 11291.1

"Alsbamr Farm Bureau Investment Corpo ", which Later yoaliiiz'

to do Lusinnss in the. State of Alabcri and acquired all nc Lt-.c.:

:asi:ts and assuwcd 111 of the liabilities of the :.foro : iii cn::1.11-

SLion by the same name whk h ilbd bee n o ri ool;,ed Unfit r Li+r iuwN

-'A-

3 0 F

• Case 6:06-cv-0Q63\ S Document 56-5 Filed%

2008 Page 21 of 43

of Alabama, and hereinafter ti.1,ei•ever reference is made t.:, "A1ac..;.

Farm Bureau Investment Corporation", whether by that naaac oc by

reference to "Alahama Corporar.ions", the reference will he co

the Mississippi corporation with the orpor to nzma ".;isb^nu Fc: nt

Bureau Investme-nt Corporation"; and

WHEREAS, on February 21, 1972, ac Jackson, Mississippi,

the above referred to State Farm Bureaus and State Invest::r.nt

Corporations of the original States, on the one part, and the

above referred to Alabarm Corporations, on the other pare,

entered into an agreement entitled simply "AGREEHErIT", a pr ims y

purpose of which was for the said State Farm Bureaus and State

Investment Corporation1 of the Original States to relieve- the

Alah:wia Corporations of their obligations under the terms of the

aforesaid document , Exhibit "A" hereto, insofar as chat might

c HtJ.1aaL^aC . dtt,i aUa Yutal l {.h LM

Investment Corporations of the Origit•a1 States to assume , insc.far

as legally i,;;ssib1c, those obligations of the A1abazed

a true copy of said Agreement of February 21, 1972, being atc..;i:.itc,1

hereto, n it it'd Exhibi t "B", and :node a part hercci ; and

WHEREAS, the State Farm Bureaus of the New States auc

members of the American Farm Bureau Federation and carry on

operations and functions within their respective states S 11ailar

to those carried on by the State Farm 5ureaus of the. Origirwi

States within their respective states; and

W1TREAS, Sourhern Farm Bureau life Insurance Compa»y, tna

insurance company referred to and described in the ai.ct:esaid

document, Exhibit "A" hereto, and in rbe aforesaid agreer.-:nc,

Exhibit "Ii" hereto, has qualified to do business and is 3c. ng

business in each and all of the New States (as well. as in the

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Case 6: 06-cv-00637 Document 56-5 Filed %008 Page 22 of 43

Original States and other states ) and r.' - State Firm Bureaus

in the New States are, and for some years next past have been

cooperating with, proraiting and sponsoring the operariun. r

said life insurance company in substantially the manner pru.+iti_u

for by the terms and provisions of said document, F:rhibi t 'A"

hereto, to be done by the State Farm Bureaus of the Original

States who were parties signatory to I.h3t document; and

WHEREAS, the State Farm Bureau in each of tlla New Start t

sponsored the organization of the State Investment Cor.poratiu,t

in its respective state, as was the case in the Original Stat;•_=,

and in each New State the State Investment Corporation has two

classes of capital stock, namely, a class; of preferred stock

with dividends limited to six percent (6'/.) per annum, earn.' Iat :.:•.: ,

and a second class of stock desigr 3ted "common stock" without

ii^.^i r'a^ innc sic r^ rii..irienna ern rn_ ___^_. _. ...=^• ''" .•••. .. +;^ •-•-

to and is held by the State Farm Bureau, tills arrangement lbei&:L;

similar to that in the Original States; and

WHEREAS, when Southern Farm Bureau Life Insurance c. pans

was chartered, October 30, 1946, its authorized capital --:lock

was Two Thousand (2,000) shares of co:Mou stuck Of the par valL::

of One Hundred Dollars ($100.00) per share to be sold upon the

basis of not less than Two Hundred Dollars ($200.00) per sIwut:,

each share having one vote;, all of said shares were issued a,id

sold to the State Investment Corporations in the four Original

States and Alabama Farm Bureau Inveetztent Corporation in equal

parts, each paying Eighty Thousand Dollars ($$0,000.00) fo: fnit:;

hundred shares, one half of which sum bet-unw capiLal of said

company and the other half contribut'ri surplus; when the 9ioI-urn2LIL

Exhibit "B" hereto, was executed Alabama Farm Bureau Investment

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1 1 I c ,Case 6 : 06-cv-0063-0-KRS Document' 56-5 Filed%2008 ' Page 23 of 43

Corporation con:cycd hick to said insurance cccpany its !Fur

Hundred (400) shares for the sum of Eighty Thousand Du 1 leers

($80,000.00) leaving outstanding only the stock hold b)- the

State Investment Corporations in the Original States; on July

3, 1972, said inscrance company's Articles of Associaticn =nd

Special Charter was amended to increase the authorized capital

stock to Ten Thousand (10,000) shares of common stock i.dentic:.]

in character and with identical provisions with respect. to sale

price and voting privileges as that originally authorized; sii,ct

that time the State Investment Corporations in the New States

have each purchased from said life insurance company Four 11uuulre-J

(400) shares of its stock for Eighty Thousand Dollars ($80,000.t11.1),

one half of which sum went into the capital of saia company ar:d

the other half into the surplus as contributed surplus ; :o that

t-h ieeijprl and -,,roranAinv ran4raI cr.,rk of e.iri l+ ..r e. .. r..^...-: .+

as of December 31, 1972, was Three Thousand Six Hundred (3,600)

shares of which Four Hundred (400) shares were held b-- eacr: of

the State Investment Corporations in the Original States and r.he

New States; and

WHEREAS, the State Farm Bureaus and State inves t:n.-iiL

porations in the original States 'Unanimously consented to tIU

issuance and sale of capital stock of said insurar.ce ro

the State Investment Corporations in the New Stares as aforesaid

upon condition that they and the State Farm Bureaus of the New

States should enter into this agreement; and

WI:ErEkS, all I,arttos hereto agrac that in v iew a:: r',*.-

way the capital stock of said life insurance company is now he!t,

the document, Exhibit "A" hereto, siiotild be amended to incr.uasz

the membership of Lire Scuthern Farm bureau Charter C nunicteu

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Case 6:06-cv-0063. RS Document 56-5 Filed /2008 Page 24 of 43

established': ender the terms of that to nine

and to make other Previsions With respect to said •:onni uc.

as are hereinafter set forth; and

WHEREAS, all parties hereto agree that ccrcair. oncc

amendments should be made to said dor.umant, Exhibit "„" hrretn,

as hereinafter fully set forth; and

W}TEREAS, the parties hereto dee m and hold the aauanci

hereinafter made to said document, Exhibit "A" hereto, not to

be in violation or derogation of the provisions of Article IV,

Section (c), of said document; and nut to impair in any 'iav

the vested rights of charter policyholders, but to strengthen

them:

NOW, THEREFORE, in consideration of mutual benefits to

the parties hereto, it is agreed by, between and nixing the

parties hereto as follows:

1.. Each of the State Farm Bureaus in the E,-.-) States

hereby becomes a party to the aforesaid document, Exhibit "A"

hereto, and the aforesaid agreement, Exhibit "B" hereto, in

like manner, to like extent and with like import as if i t had

been it party aignatoty to the said original ciocunient, E:chiblt ".."

hereto, as a "State Farm Bureau", and had been a party Sig;IaCary

to said original agrc^:nacut, Exhibii "B" hereto, as a "State F:crr•

Bureau " (ocher than Alabama Farr- bureau Federation).

2. Each of the State Farm Bureaus in t!::- New States i.;

hereby bound by every obligation of said document, :.:chibit "k"

l'nretn, imhrsed by the rums thercof.u'-nn ".Star:,: F:!csn

therein described , and is hereby accc; rde'1 every right and

accorded by the terms of that instrument Co "Stale

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1 .4(5

- Case 6:06-cv-00637 - S Document 56-5 FiledO%F

008 Page 25 of 43

therein described. The date "July 1; 1947" appearins in Article

I, Section (e) of said docnr nic, Exhibit "A" hereto, ;ha 11, i:,

respect of the State Farm Bureaus in Ntw States nriiy be ct ite,

to the data of this agreenrnt.

3. Each of the State Farm Bureaus in the New St:,tcs is

hereby bound by every obligation of said agrceawr,t, Exhibit "ii"

hereto, Imposed by the terms thereof upon "State Farm Duc:aus"

therein described (ocher than Alabama Farm Bureau Federation),

and is hereby accorded every right and benefit accorded by tho

terms of that instrument to "State Farm Bureaus" therein describesi

(other than Alabama Farm Bureau Federation).

4. In general, said document, Exhibit "A" hereto, and

said agreement, Exhibit "8" hereto, shall henceforth be read,

interpreted 'and applied, in all re_pects as if each of the Sc.cc

Farm Bureaus in the New States had been named. in the doc„nwnt.

Exhibithereto, as one of the "State Farm Burazus" therein

described and had actually executed s aid instrument as such,

and had been named as one of the "Stat e Farm Bureaus" (other

than Alabama Farm Bureau Federation ) in the agreeIicent , Exhibit "Ti'

hereto, and had actually executed that as such.

5. Each of the State investment Corpora t:inns in the Flew

States hereby become:; a parry to the .zfores.,i.d docuirk-anc, Exhibit

"A" hereto, and the aforesaid agreetacnc, Exhibi "B" hereto, in

like manner, to like extent and with like import as if it had

been a party signatory to said original instrument, Exhibit "?"

hereto, as a "State Invarturnt Corpc•ratinn" and had, eC'tll 7

party signatory to said original agreement, Exhibit "E" hereto'

as a "State Investment Corporation" (ocher than A1:, hama Farm

Bureau Investment Corporation).

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Case 6:06-cv-OOQ37I- S Document 56-5 Filed 008 Page 26 of 43

6." Each of the State Live6c cnt Corporations ir. ...

New States is hereby bound by every obligation of sai .i

Exhibit "A" hereto , imposed by the tarry; :hereof ul ,ua ' . i.irc

Investment Corporations" therein described and is

accorded every right and benefit accorded by the terms c)f tha'.

instrument to "State investment Corporations " therein describe:J.

7. Each of the State Investnrnt Corporations it the

New States is hereby bound by every obligation of said agreemcni

Ethibit '$" hereto , imposed by the terms thereof upon

Investment Corporations" therein described (other than Alabe;nn

Farm bureau Investment Corporation) and is hereby accorded

every right and benefit accorded by the terms of that iiistruu.-tit

to "State Investment Corporations" therein describ,,d (other Lk.--,r

Alabama Farm Bureau I.nvestmant Corporation).

._8. In genera] said document, Exhibit "A" hereto , and

said agreement, Exhibit "B" hareto, ::hall henceforth be read,

interpreted and applied in all respects as if each of the St:ct'u

Investment Corporations in the New States had been nanw--d in 1-he

document, Exhibit "A" hereto, as one of the "State Ir, escnrnt

Corporations" therein described and had actually e::ecut_ed said

instrument as such and had been named as o:za of tiro "State

Investment Corporations" (other than Alabama Farm Bureau Ic:vc::c-

ment Corporation) in the agreement, Exhibit "B" hereto, and hod

actually executed that agreement as such.

9. Arti.c:te I, Section (b), of tIw ducum.:'1t., Exhibit

hereto, is hereby amended to rend as follows:

(b) As the holders of the comion capital

stock in their respective St:tc lnvestmenr Cor-porations, herewith f.orsially to release and

relinquish any claim or claim., to dividends onsuch co oiV,I Capital Stock payLbbe frv~.. tk.c; z:Inua 1

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Case 6:06-cv-00637WK Document 56-5 Filed d*V#08 Page 27 of 43

incoiae of such State Investment Gu'poratioos,received by them as dividends on the coamcuicapital stock of Southern Farm Bureau UfaInsurance Company, beyond au a:uount' of 55,700of such income per annum, cusulative, sucnamount deemed to be an amount sufficient forthe payment of a six paecant (6%) per annum,

cumulative dividend on both the preferred ::od

r_o:amon capital stock of State Investment Cur-

porations the proceeds from the sales of which

were used to purchase conson :apital stock of

said Life Insurance Company and to provide

State Investment Corporations with enoughadditional money to meet Federal, State andlocal tax obligations stemming from theiroperations as stockholders in said Life Insur-ance Company and to provide a reasonable fundfor incidental. expenses connected with thecorporate operation of each of such StateInvestment Corporation stemming from itsbeing a stockholder in said Life InsuranceCompany. All dividends in excess of $5,700per annum, cumulative, received from such LifeInsurance Company by the respective State invest-ment -Corporations shall be paid promptly andwithout any unnecessary delay to Southern FarmBureau Charter -Committee l.ereinafter designated

. ^- zcr. ..z rzr-- uuraaYJ O'!C^ lam'

=sii-y herewith authorize such State Investment

Corporations to pay such ercess funds to such

Southern Farm Bureau Charter Committee.

10. From and after the d--te of this agreement Lhe South.:'

Farm Bureau Charter Committee created and established by A:tir to

I, Section (f), of the decur. nt, Exhibit "A" hereto, shall be

constituted of the Treasureraof the State Farm bureaus of the

States of Arkansas, Georgia, Kentucky, Louisiana, Mississippi

North Carolina, South Carolina, T'^Aas and Virginia; provided,

the conQOittee now in office for the calendar year 1973 pursuaa&t:

to the provisions of said document, Exhibit "A" hereto, to -wit:

^Md::^_ ^ , i.^!'^:^^ ^•!',the Treasurers of the State ral'm i3t11.:80n Of

Mississippi and Texas (because of the document, Exhibit "B"

hereto, Alabama no longer has a member on the committee), of

which the Treasurer of the State Farm Bureau of Arkansas is

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• Gase 6:06-cv-0063 S Document 56-5 Filed ft2008 Page 28 of 43

chairman and the Trea'.tz:er of the State Farm Bureau of ?tississippi

is Secretary and Tre;. rer, shall serve for the remainder of Inc

calendar year 1973.

As of the first of January of each succeeding ye.lr th4--;:--

after while the said document, Exhibit "d" hereto, is in full

force and effect the chairmanship for each ensuing year shall

pass to and be held by a duly elucted and qualified TreasureL

of the respective State Farm Bureaus in the following rotation"

order: Georgia, Kentucky, Louisiana, Mississippi, North Caro li,<:.,

South Carolina, Texas, Virginia, and Arkansas. The Secretary and

Treasurer of such committee for each ensuing respective year

shall be the duly elected and qualified Treasurer of him respe%_-i%r'

State Farm Bureau and such office shall rotate in the fc^llowir;;

order: North Carolina, South Carolina, Texas, Virginia , Louisian_

Kentucky, Georgia, Arkansas, and Mississippi. Whenever a

of the coimnittee is unable to attrnd a mreting, the Pres iilenr,

a Vice President or the Secretary of his respective Stace Farm

Bureau may serve as his alternate for that meeting. The provis:un<_

of this paragraph shall from and after this date snparcede the

said Article I, Soctirn (f), of the document, Exhibit ".4" her .a:n,

except for the last paragraph theraaf beginning "rhe pei sons -:o

designated", and ending "respective calendar year" which shall

remain in'full force and effect.

11. Article II, Section (a), of the docunsent, Exhibit "A"

hereto, is hereby amended to read as follows:

(a) To reten'.,e -01. d i.v idenrt:; ciec la ,:J andpaid to them by Southern Farm- Bureau Life liesur-ance Company. Out of such dividend fund soreceived by them they shall retain, not: r.) a;;ceed$5,700 per annum, cumulative, for the purp:aan: ofmeeting their expenses rf oneraticv stenviing *'rombeing stockholders in said Lift Insurance C..iupany ,tax -bligetions and dividend requirements on their

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I, •F I

Case 6: 06-cv-0063 - Document 56-5 Filed 008 Page 29 of 43 ,04^ ' A*

issued and outstanding capital etcck the proceedsfrom the sale of which were used to purchase commoncapital stock of s aid Life Insurance Company inthe amou.at of six per,:euL (Fx) per annum, cumulative.Any amount so received by State Inves tment Corpor-ations in excess of $5,7CG per annum, cumuiacive,shall promptly and r:ithr,ut delay be. paid t,, LheSouthern Farm Bureau Chartor Committee, so lung

as this ?.greened and reclaratiou of Trust shallremain in full effect and force.

12. Article III, Section (a), of the document, Exhibit

"A" hereto, is hereby amended to read as follows:

(a) Meet during any respective calendaryear in the home office of the State Farm Bureauof the State from which the chairman may beselected or such other place within the Statesof Arkansas, Georgia, Kentucky, Louisiana,Mississippi, North Carolina, South Carolina,Texas and Virginia as the Chairman may designate.The Chairman shall have the duty to call, aftercollaboration with the Secretary, a maeting ofthe committee. Each member of the conniitteea hall be entitled to ten (10) days written noticeof such meeting of the coo aittee . Such coonni treeshall in its procedure use. Roberts Rules of Order,shall keep a minute record of its proceedings,•___rd r tJ ..J 5.all fu .....ivl• 45 \_..i_...:J

of the fund received annually from State Invest-ment Corporations.

13. The first sentence of Section (b) of Article III

of the document , Exhibit "A" hereto, is amended to read as

follows:

(b) Receive all. funds as provided for hereinfrom State Investment Corporations, shall dcpvsit

such funds in the Union National Bank of LittleRock, Arkansas, and shall Issue orders and checksagainst such fund in such tlnpository only on the

signature of the Treasurer and countersignature

of the of the committee.

As so amended, said Section (b) of Article III o-E said

docunr-nt, Exhibit "P." hereto , is reaffirmed and remains in

full force and effect.

14. This agreement shall be deemed to he made under

and shall be construed under the law; of the State of Miss iss ipn L .

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Case 6:06-cv-00630- S Document 56-5 FiledS2008

Page 30 of 43

IN WITNESS. WHEREOF Lite parties hereto acting through

their duly authorized officers res,3ectively have hereunto

affixed their hands and seals to t4tnty (23) original copies

hereof an the date hereinabove first recited.

AEIE

v^ -

ARI(ANSAS FARM BUREAU EDL'R?.'t' ION

ByPresident

A:TEST :

"Z.9^^Secretary

KENTUCKY FARM BURI_A FEDERATION

ByPrc ident

'A1I' S MISSIS 71'PI Far.N DU U FEDERATION

/T-Ali/0 Y/,/Y .41WSacrc ar By resident

TEXAS A11 BU;.EAU

Becretary President

A11E r: 7 ARKANSAS FARM BUREAU INVESTMENTCORPORATION

-1 -7

P re. ent

ATTEST: KIEN1'UCKY T'AR N BUREAU INVESII- M.NT

CORPORAT N

.r c v .^,,s By • _ _.Secretary President

ATTEST : MISS IS IPPI FM ISUREAL; DIVESTMENT,COR )1 L N

y/1r' _Se:: cry res iden t

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13 0 A

Case 6:06-cv-00631-, Document 56-5 Filedof

008 Page 31 of 43

AWEST: TEXAS FARM BUREAU INVESTIMNTCO RP O^y

Secretary President

ATrc T: r.-11,21A 760 AU .U FEUERATIf1N

Secretary esident

t:! ;T: LOUI::IAiL1 PARK BUREAU FEDERATION

BPres idr

A'L S .: NORTH CAROLINA FARM BUREAU FEDER&TIOX:

Bysecretary President

AC.^

.t11 T• ^^^{.11Q^^/

:ATrELT,

Secretary

S01rr!1 CAROLINA FARM BURI.AIJ I'EUERATIOU,

ByFrts icie u..

VIRGINIA 'Alai B)IU loll

By_Pres idcnt

ATTEST : GEO;-Y:L•; FARM i3Uf1 AU Fy, /AI*ION

}IOLUIN C(;ANY, 1tC. /J

Secretary I Pros dent.

AT.SST: LOUISIANA FAP.N BUREAU '0.,7.'Ef',THE1NTCORPORATION

froevitemy ,ru -/ Presiden

ATTEST : NORTH (A)toLIN.. t:ARM BU:ZFAU I11VE.S11 (EnCORFORATiON

S rotary Pres :dcnt C

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• Case 6:06-cv-0063*- Document 56-5 Filed 008 Page 32 of 43

ATTEST: SOUTH CMOLINA FARM DURGAU INVESTTGc:TG :LA' ION

Secre ry President

ATT1^S=: VIRGINIA

Secretary President

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Case 6:06-cv-006 - Document 56-5 Filed*/IF008 Page 33 of 43

AGREEMENT

THIS AGREEMENT made and entered into on this the 29th

day of October, 1984 , in the City of Jackson, Mississippi,

by and between the following named and designated parties:

ON THE ONE PART:

Arkansas Farm Bureau Federation, an association organized

not for profit under the laws of the State of Arkansas, with

its home office at Little Rock, Arkansas ; Kentucky Farm Bureau

Federation, an association organized not f or profit under the

laws of tim crate of Kentucky, with its home office at

Louisville, Kentucky; Mississippi Farm Bureau Federation, an

association organized not for profit under the laws of the

State of Mississippi, with its home office at Jackson, Mississippi;

Texas Farm Bureau (corporate name was formerly Texas Farm Bureau

Federation), an association organized not for profit under the

laws of the State of Texas, with its home office at Waco , Texas;

Georgia Farm Bureau Federation, an association organized not

for profit under the laws of the State of Georgia, with its

home office at Macon, Georgia; Louisiana Farm Bureau Federation,

an association organized not for profit under the laws of the

State of Louisiana, with its. home office at. Baton Rouge,

Louisiar_z; North Carolina Farm Bureau Federation , an association

organized not for profit under the laws of the State of North

Carolina, with its home office at Raleigh , North Carolina;

South Carolina Farm Bureau Federation, Inc., an association

organized not for profit under the laws of the State of

South Carolina, with its home office at Columbia. South

Carolina; Virginia Farm Bureau Federation, an association

organized not for profit under the laws of the State of Virginia,

with its home office at Richmond, Virginia; Arkansas Farm

Bureau Investment Corporation, a corporation organized under-

the laws of the State of Arkansas, with its home office at

Case 6:06-cv-0063• S Document 56-5 Filed#02008 Page 34 of 43

,tile Rock, Arkansas; Kentucky Fa-0 Bureau investment -Cor-

poration, a Corporation organized under ths laws of the State

of Kentucky, with its home office at Louisville, Kentucky;

Mississippi Farm Bureau investment corporation, a corporation

organized -under the laws of the State of Mississippi, with its

home office at Jackson, Mississippi; Texas Farm Bureau Invest-

ment Corporation, a corporation organized under the laws of the

State of Texas, with its home-office at Waco, Texas; Georgia

Farm Bureau Federation Holding Cbmpany, Inc., a corporation

organized under the laws of the State of Georgia, with its

home office at Macon, Georgia; Louisiana Farm Bureau Investment

Corporation, a corporation organized under the laws of the State

of Louisiana, with its home office at Baton Rouge, 'Louisiana;

North Carolina Farm-Bureau Investment Corporation, a corporation

organized under the laws of the State of North Carolina, with

its home office at Raleigh, North Carolina; South Carolina Farm

Bureau Investment Corporation, a corporation organized under

the laws of the State of South Carolina, with its office at

Columbia, South Carolina; and Virginia Farm Bureau Holding

Corporation, a corporation organized under the laws of the State

of Virginia, with its home office at Richmond, Virginia;

ON THE OTHER PART;

Florida Farm Bureau Federation, an association organized

not for. profit under the laws of the State of Florida, with its

home office at Gainesville, Florida; and Florida Farm Bureau

Holding Corporation, a corporation organized under the laws

of the State of Florida, with. its home office at Gainesville,

Florida;

(The ten farm bureau federations hereinabove

named as par.ties hereto will be hereinafter some-

times referred to as."State Farm bureaus"; the ten

other corporations hereinabove named as partieshereto will hereinafter sometimes be referred to

as."State Investment Corporations";, the states

of Arkansas, Kentucky, Mississippi and Texas will

hereinafter sometimes be referred to as "Original

States"; the Original States and the States of

Georgia, Louisiana, North Carolina, South Carolina

and Virginia will hereinafter sometimes be referred

to as "1973 States").

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Case 6:06-cv-006SA- Document 56-5 Filedev 008 Page 35 of 43

WI TNESSETh ;

WHEREAS, the above named State Farm Bureaus and State

Investment Corporations of the Original States (with two other

parties to be referred to presently) made and entered into an

agreement called "AGREEMENT AND DECLARATION OF TRUST" at San

Antonio, Texas, on July 15, 1947, a true copy of which is

annexed hereto, marked Exhibit "A" and made a part hereof,

(which instrument will for convenience be sometimes referred

to hereinafter as the "document, Exhibit "A" hereto"); and

WHEREAS, Alabama Farm Bureau Federation, an association

organized not for profit under the laws of the State of Alabama.

with its home office at Montgomery, Alabama; and Alabama Farm

Bureau Investment Corporation, a corporation organized under

the laws of the State of Alabama, with its home office at

Montgomery, Alabama, (which federation and corporation are

hereinafter sometimes referred to as "Alabama Corporations"),

were likewise parties to said document Exhibit "A" hereto: and

WHEREAS, in July, 1950, there was organized in the State

of Mississippi under Mississippi law a corporation with the name

"Alabama Farm Bureau Investment Corporation," 'which later

qualified to do business in the State of Alabama and acquired

all of the assets and assumed all of the liabilities of the

aforesaid corporation by the same name which had been organized

under the laws of Alabama, and hereinafter wherever reference

is made to "Alabama Farm Bureau Investment Corporation." whether

by that name or by reference to "Alabama Corporations," the

reference will be to the Mississippi corporation with the

corporate name "Alabama Farm Bureau Investment Corporation"; and

WHEREAS, on February 21, 1972, at Jackson, Mississippi,

the above referred to state Farm Bureaus and State Investment

Corporations of the Original States, on the one part, and the

above referred to Alabama Corporations, on the other part,

entered into an agreement entitled simply "AGREEMENT," a primary

purpose of which was for the said State Farm Bureaus and State

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Case 6: 06-cv-00630I Document 56-5 Filed*/ 008 Page 36 of 43

vestment Corporations of the L din:l States to relieve theAlabama Corporations of their obligations under the terms of

the aforesaid document , Exhibit "A" hereto, insofar as that

might be legally possible, and for such State Farm Bureaus

and State Investment Corporations of the Original States to

assume , insofar as legally possible, those obligations of the

Alabama Corporations ; a true copy of said Agreement *:f

February 21, 1972, being attached hereto, marked Exhibit "B,"

and made a part hereof; and

WHEREAS, on February 16, 1973, at Dallas, Texas , the above

referred to State Farm Bureaus and State Investment Corporations

of the Original States. on the one part, and the State Farm

Bureaus and State Investment Corporations of the other 1973 State

on the other part, entered into-an agreement entitled simply

"AGREEMENT,` the primary Purpose of which was for all of the

1973 States to .bind . themselves to the terms of the Agreements

attached-as Exhibit "A" and Exhibit "B"; a 'true copy o :f this

said Agreement is attached hereto, marked Exhibit "C," and

made -a part hereof; and

WHEREAS, Florida Farm Bureau Federation is a member of

the American Farm Bureau Federation and carries on ope rations

and functions within its state similar to those •carrie d on by

the 5tate.Farm Bureaus of the 1973 States within their respective

states; and

WHEREAS, Southern Farm Bureau Life Insurance Company, the

insurance company referred to and described in the aforesaid

document , Exhibit "A" hereto , in the aforesaid document,

Exhibit " B!' hereto, and in the aforesaid document , Exhibit "C"

hereto, has qualified to do business and is -doing business in

the State of Florida as well as in the 1973 States; and

WHEREAS,. Florida Farm. Bureau. Federation has sponsored the

organization of Florida Farm. Bureau Holding Corporation ; and

WHEREAS, when Southern Farm Bureau Life Insurance Company

was chartered on October 30, 1946, its authorized capital stock

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,i ,<

' Case 6:06-cv-0063^A- RS Document 56-5 Filed /2008 Page 37 of 43

Two Thousand (2,000) shares of 'Loaaon stock of the par

value of One Hundred Dollars ($100.00) per share to be sold

upon the basis of not less than Two Hundred Dollars (1200 .00)

per share, each share having one vote; all of said shares

were issued and sold to the State investment corporations in

the four Original States and Alabama Farm Bureau Investment

Corporation in equal parts, each paying Eighty Thousand Dollars

($80,000.00) for four hundred shares, one-half of which sum

became capital of said company and the other one-half contributed

to surplus; when the document, Exhibit "B" hereto, was executed

Alabama Farm Bureau Investment Corporation conveyed back to

said insurance company its Four Hundred (400) shares for the sum

of Eighty Thousand Dollars ($80,000.00) leaving outstanding

only the stock held by the State Investment Corporations in the

Original States; on July 3, 1972, said insurance company's

Articles of Association and Special Charter was amended to in-

crease the authorized capital stock to Ten Thousand (10.000)

shares of common stock identical in character and with identical

provisions with respect to sale price and voting privileges as

that originally authorized; since that time the State Investment

Corporations in those 1973 States which were not original States

have each purchased from said life insurance company four

Hundred (400) shares of its stock for Eighty Thousand Dollars

($80,000.00), one-half of which sum went into the capital of

said company and the other one-half into the surplus as con-

tributed surplus; and

WHEREAS, On February 21, 1983, said insurance company's

Articles of Association and Special Charter was amended to in-

crease the authorized capital stock to Twenty Thousand (20.000)

shares of common stock identical in character and with identical

provisions with respect to sale price and voting privileges as

that originally authorized; and

WHEREAS, stock dividends have been declared from time to

time increasing the amount of stock held by each of the 1973 States

-S-

,- _. 01

l

Case 6:06-cv-0063S Document 56-5 Filed /2008 Page 38 of 43One Thousand Three Hundred a, ixty ( 1,360 ) shares ; and

WHEREAS, the State Farm Bureaus and the State Im+ estment

Corporations of the 1973 States unanimously consented to the

issuance and sale . of capital stock of said insurance company

to the Florida Farm Bureau Holding Corporation upon condition

that it and Florida. Farm Bureau Federation should enter into

this agreement; and

WHEREAS, all parties hereto agree that in view of the

way the capital stock of said life Insurance company is now

held, the document , Exhibit "A" hereto, should be amended to

increase the membership of the Southern Farm Bureau Charter

Committee established under the terms of that document to ten

members. and to make other provisions with respect to said

committee as are hereinafter set forth; and -I

WHEREAS, all parties. hereto agree that certain other

amendments should be made to said document, Exhibit "A" hereto,

as hereinafter fully set forth:

NOW, THEREFORE, in consideration of mutual benefits to

the parties hereto, it is agreed by, between and among the

parties hereto as follows:

1. The Florida Farm Bureau Federation hereby becomes a

party to the aforesaid document , Exhibit "A " hereto, the afore-

said agreement , Exhibit "B" hereto, and the Aforesaid agreement.

Exhibit "C" hereto, in like manner , -to like extent and with

like import as if it had been a party signatory to the said

original document , Exhibit "A" hereto, as a "State Farm Bureau,"

and had been a party signatory to said original agreement,

Exhibit "B" hereto, as a "State Farm- Bureau " (other than

Alabama Farm Bureau Federation), and had been a party to said

original agreement , Exhibit "C" hereto , as a "State Farm Bureau."

2. Florida Farm Bureau Federation is hereby-bound by

every obligation.of said document, Exhibit "A" hereto, imposed

by the terms thereof upon "State Farm Bureaus " therein described,

and is hereby accorded every right and benefit accorded by the

terms of this instrument to "State Farm Bureaus " therein

-6-.

,s

Case 6:06-cv-006*S Document 56-5 File40/2008 Page 39 of 43scribed. The date "July 1, 194. appearing in Article 1,

Section (e) of said document, Exhibit "A" hereto, shall in

respect to the Florida Farm Bureau Federation be changed to

the date of this agreement.

3. .Florida Farm Bureau Federation is hereby bound by

every obligation of said agreement, Exhibit "B" hereto, imposeJ

by the terms thereof upon "State Farm Bureaus" therein d e-

sc.ribed (other than Alabama Farm Bureau Federation), -snct is

hereby accorded every right and benefit accorded by the terms

of that instrument to "State Farm Bureaus" 'therein descr ibed

(other than.Alabama Farm Bureau Federation).

4. Florida Farm Bureau Federation is hereby bound by

every obligation of said agreement, Exhibit "C" hereto, im-

posed by the terms thereof upon "State Farm Bureaus" therein

described,. and is hereby accorded every right and benef i t

accorded by the terms of that instrument to "State Farm Bureaus"

therein described.

5. In general, said document, Exhibit "A" hereto, said

agreement, Exhibit "B" hereto, and said agreement, Exhibit "C"

hereto, shall henceforth be read. interpreted and applied, in

all respects as if Florida Farm Bureau Federation had been

named in the document, Exhibit "A" hereto, as one of the

"State.Farm Bureaus" therein described and had actually ex-

ecuted said instrument as such, and had been named as one of

the "State Farm Bureaus".(other than Alabama Farm Bureau

Federation) in the agreement, Exhibit "B" hereto, and ha d

.actually executed that agreement as such, and as one of the

"State Farm Bureaus" in the agreement, Exhibit "C" hereto.

and had actually executed that agreement as such.

6. Florida Farm Bureau -Holding Corporation hereby

becomes a-party to.the aforesaid document, Exhibit "A" hereto,

the aforesaid agreement, Exhibit "B" hereto, and the aforesaid

agreement, Exhibit "C" hereto, in like manner, to like extent

and with like import as if it had been a party signatory to

-7-

q .f

. i t

Case 6:06-cv-0063

4-Aid

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original instrument, Exhibit .A, ' hereto, as a "state

Investment corporation" and had been a party signatory to

said original agreement, Exhibit "B" hereto.-as a "State

Investment Corporation" (other than Alabama Farm bureau In-

vestment Corporation) and had been a party signatory to said

original agreement, Exhibit "C" hereto, as a "State Investment

Corporation. "

7. In general, said document, Exhibit "A" hereto, and

said agreements, Exhibits "B" and "C" hereto, shall henceforth

be read, interpreted and applied in all respects as if Florida

Farm Bureau 'Holding Corporation had been named in the docu-

ment, Exhibit "A" hereto, as one of the "State Investment

Corporations" therein described and had actually executed

said instrument as such and had been named as one of the "State

Investment Corporations" (other than Alabama Farm Bureau In-

vestment Corporation) in the agreement,- Exhibit "B" hereto,

and.had -actually executed.that agreement as such, and had been

.named as one of the "State Investment Corporations" in the

agreement, Exhibit "C" hereto, and had actually executed that

agreement as such.

8. From and after the date of this agreement the Southern

Farm Bureau Charter Committee created and established by

Article I, Section . (f) , of the document, Exhibit "A" her eto,

shall be constituted of the Treasurers of the State Farm& Bureaus

of the States of Arkansas,.Plorida, Georgia, Kentucky, Louisiana,

Mississippi, North Carolina, South Carolina, Texas and Virginia-

As of. the first of January of each succeeding year hereafter

while the said document, Exhibit "A" hereto, is in full force

and. effect the chairmanship for each ensuing year shall pass

to and be held by a duly elected and qualified Treasurer of the

respective State Farm Bureaus in.-the following rotation order:

Georgia, Kentucky, Louisiana,. Mississippi, North Carolina,

South Carolina, Texas, Virginia,. Arkansas, and Florida.. The

Secretary and Treasurer. Of such committee for each ensuing

-8-

a 000

Case 6:06-cvt0Q6* RS Document 56-5 Filed /2008 Page 41 of 43

active year shall be the duly cted and qualified Treasurer

of his respective State Farm Bureau and such office shall rotate

in the following order : North Carolina , South Carolina, Texas,

Virginia , Louisiana , Florida, Kentucky , Georgia , Arkansas , and

Mississippi.

9. Article III, Section ( a), of the document , Exhibit "A"

hereto, is hereby amended to read as follows:

(a) Meet during any respective calendaryear in the home office of the State Farm Bureauof the State from which the chairman may beselected or such other place within the Statesof Arkansas, Florida, Georgia, Kentucky, Louisiana,Mississippi, North Carolina, South Carolina, Texasand Virginia as the chairman may designate. TheChairman shall have the duty to call, aftercollaboration with the Secretary, a meeting ofthe committee. Each member of the committeeshall be entitled to ten (10) days' written noticeof such meeting of the committee. Such committeeshall in its procedure use Roberts Rules of Order,shall keep a minute record of its proceedings,record of accounts and shall function as trusteesof the fund received annually from the StateInvestment Corporations.

10. This agreement shall be deemed to be made under mad

shall be construed under the laws of the State of Mississippi.

IN WITNESS WHEREOF the parties hereto acting through

their duly authorized officers respectively have hereunto

affixed their hands and. seals to twenty ( 20) original copies

hereof on the date hereinabove first recited.

ATTEST : ARKANSAS Rat BUR AU RAT ION

BySecretary res ant

ATTEST; FLORIDA FARM BUREAU -FEDERATION

-f, e ^- By -Ae rotary nPresid e

ATTEST : GEORGIA FARM BUREAU FEDERATION

&24,,Jzk- BySecretary 61 resid nt

ATTEST: KENTUCKY FARM BUREAU FEDERATION

L^vww;(t-' By ca w- ^^a.Secretary P residers

-9-

Case 6:06-cv-0063 RS Document 56-5 Filed /2008 Page 42 of 43

EST: LOU1 .._ANA FARM BUREAU FEDERATION

Ey-"W.ret y resaaen

ATTEST: MISSISS PI FARM BUREAU FEDERATION

1,1d . Y/, J-// By r^,LSj5C d-TCtaTy' L/ resa eat

ATTEST: NORTH CAROLINA' FARM BUREAU FEDERATION

hz,;w 1 /-+./-^• BySecretary is resaoent

ATTEST: SOUTH CAROLINA FARM BUREAU FEDERATION

INCD^4

esi 'By

ecretary P resi dent

ATTEST : TEXAS FARM BUREAU

Az;^< .^-^--` By f? ,etary resi'd t

ATTEST : VIRGINIA FARM BUREAU FEDERATION

^.^•-`.- s.r.^^ra^j Bysecretary FTeS1 d C 1U

ATTEST : ARKANSAS ARM BUREA STMENTCO QN

ecr r ent

ATTEST: FLORIDA FARM BUREAU HOLDINGCORPORATION

BySecretary Presi d ent

f-lu

.ATTEST: GEORGIA FARM BUREAU FEDERATIONHOLDING PAN INC.

_d?^^7I.,L^ A7 Z-104 116^]_: By

P es e tSecretary

ATTEST KENTUCKY FARM BUREAU INVESTMENTCORPO TION

By U:ecr P res i dent

-10-

/0

Case 6:06-cv-006,3 S Document 56-5 Filed/2008 Page 43 of 43

&'EST: LOUISIANA FARM BUREAU INVESTMENTCORPORATIONBy

cretary P rescient

ATTEST :• MISSISSIPPI FARM BUREAU INVESTMENTCORPORATIO

Byecretary resiaenz

ATTEST: NORTH CAROLINA FARM BUREAU INVESTMENT

CORPORATION

Secretary ice- esident

ATTEST: SOUTH CAROLINA FARM BUREAU INVESTMENTCORP T ON

By 61 ^,Secretary 61

61Fre s2 d ent

ATTEST : TEXAS FARM BUREAU INVESTMENTCORPORATION

By 2'). Z. 'Jrotary Fresi'3ent

ATTEST: VIRGINIA FARM BUREAU 11OLDI N GCORPORATION

secretary resicen1

-11-// 0 v


EXHIBIT 4

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•FLORIDA FARM BUREAU FEDERATION

BOARD OF DIRECTORSGAINESVILLE , FLORIDAAUGUST 24-25, 2004

The meeting of the Board of Directors of the Florida Farm Bureau Federation was called to orderat 1:15 p.m. Tuesday, August 24, 2004 by President Carl B. Loop, Jr. at the Florida Farm Bureauheadquarters, Gainesville, Florida pursuant to notice duly given.

Vice Chair of the Women's Committee, Marilyn Grant gave the invocation.

YF&R Chair Drew Phypers led the Pledge ofAllegiance.

DIRECTORS PRESENT: Bodiford, Bryan, Byrd, Coleman, Deas, Dickinson, Dooner, Grant,Hoblick, Loop, Lynn, Martin, McMullian, Paarlberg, Phhypers,Poppell, Roth, Smith, Smith, Tidwell, Waring, Wetherington,Wilson and Wilson.

DIRECTORS ABSENT: Ron Wetherington (8/25).

STAFF PRESENT: Basford, Butler, Cockrell, Crawford, Harrison, Hemphill, Howe,Kwader, Leary, Morgan, Parks, Richardson, Singleton, Lee AxwFisch and Field Staff: John Eubanks, District 5.

President Loop stated we would deviate from the agenda in the board book due to the boardplanning sessions and the Florida Holding Corporation board meeting.

The minutes of the June 2004 Board of Directors' meeting as mailed to the board wereconsidered.

ACTION NO. 1 APPROVAL OF THE JUNE 2004 MINUTES

Motion was made by Cecil Bodiford, seconded by John Hobliek and carriedto approve the June 2004 board minutes.

ACTION NO. 2 APPROVAL OF THE JULY 2004 EXECUTIVE COMMITTEEMINUTES

Motion was made by Cecil Bodiford, seconded by John Hoblick and carried toapprove the July 2004 Executive Committee minutes.

BF,PORTS

• FINANCJAI : Director of Finance Bob Richardson presented the June 30, 2004 financialstatements . (A copy is appended to the original ofthe minutes.)

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iMinutesFlorida Farm Bureau FederationAugust 24-25, 2004Page 3

DISTRICT 8: MYRON BRYAN: Mr. Bryan reported Alachua County Farm Bureau's CompPlan suit is at a stand still following the hearing last December. Mr. Bryan stated the vegetablemarket and prices have been about the same for his district - good crops, poor markets.

DISTRICT 11: KEN SMITH: W. Smith reported the Young Farmers and Ranchers in thedistrict did an excellent job with the fundraiser for Senator Nancy Argenziano. Rezoning is alsobeing considered in Hernando county.

DISTRICT 16: RORY MARTIN: Mr. Martin reported the counties in District 16 are doingwell financially. They have had their second district officers meeting. Sarasota will hold afundraiser in September for their Congresswoman. Rory stated he is involved on the localzoning issue.

WOMEN'S VICE CHAIR: MARILYN GRANT: Mrs. Grant stated land use amendments arebeing developed in Marion County. These changes will involve her place of residence.

DIVISION REPORTS

ADMINISTRATIVE ASSISTANT/GENERAL COUNSEL: Administrative Assistant andGeneral Counsel Scottie J. Butler stated Joe Purvis and Joey Strobble officers for Southern FarmBureau Life, would be joining us for our evening meal as well as participating in the FloridaFarm Bureau Holding Corporations board meeting on Wednesday.

ACCOUNTING - COUNTY SERVICES : Director of Finance Bob Richardson reported theDepartment is in the process of preparing the county Farm Bureau Federal Income Tax Returns.Their goal for completion is September 30, 2004.

ORGANIZATION AND PROGRAMS: Executive Director Pat Cockrell reported he andAdam Basford attended an industry meeting on the affect of Hurricane Charley.

Pat reported Federation is looking at the upcoming legislative issue. Backgrounders will be

prepared and distributed prior to the legislative session to better assist our members on these

issues,

Pat reported the University of Florida, IFAS, search committee met recently at the Farm Bureaubuilding. They are working on the top twelve candidates and the search will then be narroweddown.

AG POLICY: Director of Ag Policies Kevin Morgan reported the departwent is working withUSDA on the hurricane disaster.

Kevin reported the FFBF State Advisory Committees are about half finished for the year. Newpolicies are being developed for current issues'facing Florida agriculture.

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BOARD OF DIRECTORS MEETING

Page 4Aq 1?e4

FLORIDA FARM BUREAU HOLDING CORPORATION

August 25, 2004

The Board of Directors of Florida Farm Bureau Holding Corporation met onAugust 25, 2004 at 10:00 a.m. in the boardroom of Florida Farm Bureau Federation inGainesville, Florida. Carl Loop, President, called the meeting to order. The following directors,constituting a quorum, were present:

DIRECTORS PRESENT: Directors Bodiford, Bryan, Byrd, Coleman, Deas, Dickinson,Dooner, Grant, Hoblick, Loop, Lynn, Martin, McMullian,Nelson, Paarlberg, Phypers, Poppell, Roth, Smith, Smith,Tidwell , Waring, Wilson and Wilson.

DIRECTORS ABSENT: Ron Wetherington

STAFF PRESENT: Scottie Butler, General Counsel of Florida Farm BureauFederation, Bruce Brashear, Counsel to Plaintiffs ShareboldersCorporation ("PSC"), Gardner Davis, Special Counsel to FloridaHolding, Joey Stroble, Chief Executive Officer of Southern FarmBureau Life Insurance Company ("Southern Life") and JoePurvis, General Counsel of Southern Life, attended as guests,

Mr. Loop began the meeting by reviewing the purpose of the meeting. Mr. Loopreminded the Board that at their June meeting, the Board had considered and discussed theproposed recapitalization of Southern Life to permit Oklahoma Farm Bureau to become ashareholder, and the related amendment of the Agreement and Declaration of Trust dated July15, 1947, as amended (the "Charter Treaty"), and that the Board had requested a legal opinionregarding whether the proposed recapitalization would constitute a breach by Florida Holding of.............. . .its obligations under the convertible debenture and other settlement documents wiith-PSC arisingfrom the Winchester class action litigation. Mr. Loop indicated that at this meeting, the Boardwould bear from Joey Stroble, CEO of Southern Life and Joe Purvis, the Vice President andGeneral Counsel of Southern Life, regarding the background of the proposed recapitalization topermit Oklahoma to become a shareholder, including more details regarding the specifictransaction, the potential advantages and disadvantages of the transaction, and therecommendation of Southern Life management that Florida Holding approve the recapitalization.In addition, the Board was being asked to approve the extension of the term of the Charter Treatyand related amendments to the Charter Treaty.

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MinutesFlorida Farm Bureau Holding CorporationAugust 25, 2004Page 2

Mr. Loop indicated that because this information was also relevant to the FloridaFarm Bureau Federation Board's deliberation on whether to approve the Oklahoma

recapitalization and extension of the term of the Charter Treaty, that fox that portion of the

meeting, the board meeting ofFlorida Holding would be conducted as a joint board meeting with

the board of the Federation. (All of the directors ofFlorida Holding, except Don Nelson are also

directors of the Federation.) Mr. Loop also announced that in light of his position as President of

Southern Life and Rick Roth's position as a director of Southern Life, following the presentation

by Southern Life management and the opportunity to make a few brief remarks, they wouldrecuse themselves from further discussion and leave the room and ask John Hoblick to chair themeeting from that point forward.

The first matter of business was review and approval of the minutes from the priormeeting. Upon motion properly made and seconded, the minutes were unanimously approved.

The second matter of business was review of Florida Holding's financialstatements , including a balance sheet and statement of income. Following presentation-of thefinancial statements and the opportunity for the directors to ask questions, upon proper motion,the financial statements were unanimously accepted.

The next matter ofbusiness was the request from Southern Life that FloridaHolding, as a shareholder of Southern Life, vote to approve the proposed recapitalization toadmit Oklahoma as a shareholder and to separately approve the amendment and extension of theCharter Treaty. At this point, Mr. Loop formally moved that this section ofthe meeting beconducted as a joint meeting of the Boards of Florida Holding and Florida Federation, Uponproper motion, it was unanimously approved that the presentation by the Southern life executivemanagement team be conducted as a joint meeting of the Florida Holdings Board and the FloridaFederation Board in the interest of efficiency.

Mr. Loop asked Scottie Butler, the General Counsel of Florida Federation, topresent an overview of Florida Holding's investment in Southern Life, including the Winchesterlitigation and the resulting settlement with PSC, as well as a review of operation of the Charter.Treaty and the proposed recapitalization to permit Oklahoma to become a shareholder and theseparate request to amend and extend the Charter Treaty. Mr. Butler provided a comprehensivereview of the facts and the background. He recapped the Florida Holding Board's discussions atthe June meeting and the issues presented for- the Board's consideration.

Mr. Butler also reviewed the background and provisions of the Winchester classaction settlement, including delivery of the convertible debenture, which would convert intostock ofFlorida Holding as soon as permitted under the Charter Treaty. Mr. Butler alsoexplained that in 1995, PSC was formed as a vehicle for holding the debenture and in order toorganize all of the minority shareholders, Mr. Butler explained the present terms of the CharterTreaty and proposed modifications.

After an opportunity for the directors to ask questions, Mr. Butler introduced JoeyStroble, Chief Executive Officer of Southern Life, and Joe Purvis , General Counsel. Mr. Butler

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Page 6 of 12PAGE 06

asked the Board to listen carefully to their presentation, to ask any questions that they might

have, and in particular, to "listen critically to Mr. Stroble's explanation about why one-eleventh

of a bigger Southern Life pie is better than the one-tenth share Florida Holding holds today" and

why Southern Life management and the Southern Life Board believe that the proposed

recapitalization is good for Southern Life and the shareholders and has recommended approval.

Mr. Butler also reminded the Board that, as Mr. Davis would address later, Southern Life wantedto avoid disadvantaging PSC. Mr. Butler stated that Mr. Brashear, who was counsel the PSCBoard and who was at the meeting today, would also have the opportunity to address the FloridaHoldings Board and provide input

Joey Stroble, Chief Executive Officer of Southern Life, began his presentation byproviding his background with Southern Life and recounting Florida Farm Bureau Federation'shistory with Southern Life.

Mr. Stroble explained that Southern. Life was asking the Florida Holdings Boardto consider two separate questions:

Whether or not to approve the admission of Oklahoma as a shareholder ofSouthern life; and

0 0 Whether to approve the extension of the Charter Treaty.

Mr. Stroble began by providing an overview of trends affecting the life insuranceindustry, including consolidation, increased competition and the difficulty ofrecruiting agents.He explained Southern Life's present financial condition and its strategy for responding to thesechallenges.

With the assistance of a presentation booklet provided to each director, Mr.Stroble reviewed a map of the United States and the various Farm Bureau-related life insurancecompanies . With the aid of the map, Mr . Stroble provided a review of Southern Life'scompetitors and analysis of the insurance marketplace.

Mr. Stroble reviewed the history of the potential Oklahoma affiliation, includingOklahoma's concerns of being affiliated with a public company. Among other things, Oklahomawas concerned about the inherent conflict of interest between the shareholders and thepolicyholders and the need to focus on short term financial performance rather than long-termgrowth and investment.

Mr. Stroble addressed in detail what he believed were the benefits of theadmission of Oklahoma to Southern Life, including geographic growth, economics of scale, andacquisition of an experienced Farm Bureau agency force, as well as expanded opportunities forpotential future growth. Mr. Stroble reviewed in detail the statistics relating to Oklahoma'sinsurance business and compared it to each of the ten existing Southern Life shareholders. W.Stroble believed that Oklahoma compared favorably to the average Southern Life state, that

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Oklahoma provided excellent prospects for growth and combined cost savings , and that inclusionof. Oklahoma would be accretive to the economic interests of the ten existing shareholders.

Mr. Stroble reported that it was the strong recommendation of Southern Lifemanagement and board that the admission of Oklahoma would be good for the company andeach of its shareholders and that the transaction should be approved. The directors asked severalquestions regarding the comparative strength of Oklahoma to the other Southern Lifeshareholders and the impact of the transaction.

Mr. Stroble then explained the steps, which Southern Life management and board

bad taken to protect the existing Southern Life shareholders, including the valuation prepared byTillinghast, an outside valuation firm, which established a valuation methodology yielding a$1,358,000,000 valuation for the Company. MT. Stroble reviewed the terms of the proposedadmission of Oklahoma, including the issuance ofpreferred stock to the ten existingstockholders, and the terms of the preferred stock. The directors asked several questionsregarding the business and financial terms of the transaction. Joe Purvis, General Counsel ofSouthern Life, assisted with providing information on the specific legal terms and structure ofthe transaction.

Mr. Stroble then discussed the Charter Treaty, including a summary oftheexisting terms and the reasons that management, as well as Oklahoma, believed that an extensionof the Charter Treaty was in the best interests of the Southern Life shareholders andpolicyholders. Mr. Stroble explained Oklahoma's concern that it would be best to extend theCharter Treaty to make sure the focus is on the policyholders and long-tens stability of Southern.Life. Mr. Stroble also expressed the concerns of the employees of Southern Life regarding thelong-term stability and the impact of an extension of the Charter Treaty. The directors askedseveral questions about the advantages and potential disadvantages of extending the CharterTreaty, as well as the specific terms of the proposed changes.

At the conclusion of Mr. Stroble's presentation, Ken Smith asked Messrs. Strobleand Purvis "ifthey saw any downside in the acquisition." Mr. Stroble and Mr. Purvisunequivocally answered that they saw no negatives or downside and that they believed it was "agreat deal for Southern Life." Among other things, they pointed to the new territory, the 155,000Oklahoma members and the experienced agency force that would be acquired in the transaction.Mr. Stroble characterized the transaction as "very positive" for Southern Life and itsshareholders.

Mark Wilson asked the Southern Life management team to address further theconsolidation trends facing the industry and bow the Oklahoma transaction fit into theCompany's long-term business strategy. Mr. Stroble responded that in light of the consolidationof the number of life insurance companies, he believed that Southern Life must grow its businessand assets in order to remain competitive and to offer the strongest service and pricing to itspolicyholders. He stated that he believed it was in the best interests of Southern Life, itspolicyholders and its shareholders for the Company to grow and that he believed the Oklahoma

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MinutesFlorida Farm Bureau Holding Corporation

August 25, 2004Page 5

transaction and the extension of the Charter Treaty were both very positive steps in preparing forthe future.

Mark Wilson asked a follow-up question about how Oklahoma's profitabilitynumbers compared with Southern Life's average numbers and the profitability numbersgenerated by the various Southern Life states. Mr. Stroble explained that he had only receivedinformation from Oklahoma, not Iowa, and therefore, he did not have specific profitabilitynumbers. However, Southern Life's management had projected the Oklahoma profitabilitybased on the number and types ofpolicies and types of members. Mr. Stroble believed thatOklahoma had good member growth and a favorable agency structure. Mr. Wilson expressed hisbusiness opinion that, from a profitability analysis, Oklahoma appeared comparable to theSouthern Life states and therefore the transaction would not negatively impact Southern Life'sprofitability.

Mr. Stroble added that this profitability analysis was without taking into account

the significant syiaergies and cost savings of combining the organizations. Joe Purvis explainedthat Southern Life's analysis had carefully focused on the operations side of the Oklahomaacquisition, and he believed that there was :`tremendous" value from the agency force and thatOklahoma would "fit very well" with Southern Life's structure.

Mark Byrd asked why Oklahoma wanted to join Southern Life. Mr. Stxoblcanswered because Southern Life is a "Farm Bureau company," which is focused on service andthe policyholder. Mr. Stroble believed that Iowa was a very different company, because of itsstatus as a publicly held corporation and its focus on short-term profitability. Mr. Stroble alsoadded that the Oklahoma agents are very excited about the prospects ofjoining Southern Life.

Don Nelson, PSC's nominee to the Florida Holding Board , asked how theOklahoma transaction would affect FSC. Mr. Stroble believed that the transaction would benefitPSC, as a shareholder of Florida Holding, because the transaction would be good for Southern

Life and all of its shareholders. A discussion ensued regarding PSC's potentially distinct and

separate interests and concerns.

Mr. Butler asked whether Southern Life's sales management team had actuallybeen to Oklahoma. Mr. Stroble answered that Southern Life's management had been there andmet with the Oklahoma salespeople, and_that.they were "very excited" about the transaction.

Mr. Butler asked a follow-up question regarding the opportunity of Southern Lifeto sell products in Oklahoma. Mr. Stroble explained that the Oklahoma sales force would sellSouthern Life products.

Mr. Butler asked for more details on the potential economies of scale. Mr.Stroble responded that there would be various opportunities for cost savings and economics ofscale, particularly in the data processing area. Mr. Stroble believed that Southern Life hadadequate IP and data processing capacity to handle the addition of Oklahoma with no additional

0-

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personnel or capital investment. Mr. Stroble believed that he would not need any additional

employees for the changes.

.W. Butler then shared his view that the Florida Holding Board must focus on the

question as a business decision and that the critical question is whether the stockholders ofSouthern Life will be better off with 1/11' ownership of the combined organization withOklahoma than the present 1/10th ownership in Southern Life. Mr. Stroble responded that hebelieved the answer was clearly "yes," that the stockholders would be better oft from a businessperspective, with a 1/11"' interest in the combined enterprise because it would be substantiallymore profitable and more competitive and would have access to better markets and a betteragency force. Mr. Stroble also stressed the consolidation trends and the need for Southern Lifeto make this move to position the company for the future.

Dou Nelson asked whether PSC's investment in Florida Holdings would be moreor less valuable as a result of the transaction. Mr. Stroble stated that he believed PSC's interestwould be "more valuable" because the Company would be more valuable.

At the conclusion of the question-answer session, Mr. Loop reminded the Boardof his conflict of interest. W. Loop stated, however, that be had looked at the Oklahoma

transaction for a long time, had reviewed it in terms of management, products , sales force andmarket opportunity and that he believed that the Oklahoma transaction was in the best interestsof the Southern Life and all of the shareholders. Mr. Loop then stated that he and Mr. Rothwould recuse themselves from further discussion of the issue and they left the room.

Mr. Hoblick chaired the meeting in Mr. Loop' s absence. The Board decided totake a 5-minute recess,

Upon reconvening, Mr. Hoblick asked Bruce Brashear, counsel to PSC, to addressthe Florida Holding Board. W. Brasbear reminded the Board of their duty of loyalty and thefour separate and distinct interests involved: Federation, Florida Holding, PSC and theShareholders of PSC. W. Brashear believed that for the purpose of analysis. PSC should betreated as a shareholder, rather than a debenture bolder, and the Florida Holdings Board'sanalysis must include whether the proposed action is in the best interests ofPSC. Mr. Brashcardiscussed his belief that Florida Holdings' obligation to PSC arose from both general fiduciaryduty, as well as the settlement agreement. Mr. Brashear stated that, in his opinion, the Board didnot have enough financial analysis for the decision, and that reasonable minds could differ - itwas not an open and shut case.

Mr. Brashear discussed concerns about the preferred stock to be received inconnection with the recapitalization , including the fact that it could not be traded and could notbe sold and carried only a 5% return.

Mr. Hoblick then asked Mr. Davis to address the meeting.

0

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Mr. Davis, the special counsel to the Florid Holdings Board, explained that hisfirm, Foley & Lardner LLP, bad provided a written legal opinion regarding whether FloridaHoldings' approval of the proposed recapitalization of Southern Life to permit Oklahoma tobecome a shareholder and related amendment of the Charter Treaty, all as specifically outlined in

the Summary ofTerms dated May 6, 2004, would constitute a breach by Florida Holdings of its

obligations under the PSC Convertible Debenture and certain related settlement documents. Mr.Davis reviewed the terms of the PSC settlement documents with the Board.

W. Davis advised the Board that the proposed recapitalization of Southern We,including the admission of Oklahoma as a new shareholder of Southern Life, does not extend thedate upon which PSC can become a 27.7% shareholder of Florida Holdings and does notmaterially modify the restrictions imposed by the Charter Treaty on Florida Holdings, such asthe duration and scope of the restrictions on Southern Life's payment of dividends or theduration or scope of the restrictions on Florida Holdings' ability to sell or otherwise transfer itsstock of Southern Life. Instead, the proposed admission of Oklahoma as a new shareholder ofSouthern life involves fundamental business decisions relating to Southern Life, includingwhether the benefits to Southern Life from the transaction outweigh the disadvantages andwhether Florida Holdings' stock in Southern Life will become more or less valuable as a resultof the proposed transaction.

Mr. Davis indicated that based on his' examination, of the Summary of Termsdated May 6, 2004 and the settlement documents, and upon consideration of other matters whichhis firm believed appropriate, it was his opinion that Florida Holdings' approval of the admissionof Oklahoma as a shareholder of Southern Life and the proposed recapitalization, all as outlinedin the Summary of Terms dated May 6, 2004, would not violate or constitute a default under thesettlement documents. Mr. Davis noted that his opinion did not address the proposed extensionof the Charter Treaty.

Mr. Davis also noted that the Florida Business Corporation Act imposes afiduciary duty on the Board of Directors of Florida Holdings to act in good.faith, with the care anordinarily prudent person in a like position would exercise under similar circumstances and in amanner reasonably believed to be in the best interests of the corporation when deciding whetheror not to approve the proposed admission of Oklahoma. Mr. Davis noted that, as a matter ofcorporate law, directors are required to act in the utmost good faith and they have an obligationto give the enterprise the benefit oftheir best care and judgment, and to exercise their-powers asa director solely in the interests of the corporation.

Mr. Davis stressed that the directors' so-called "duty of care" requires thatdecisions by the Board of Directors be made on an informed basis, after reasonable investigation.However, directors arc entitled to rely on information, opinions, reports or statements preparedor presented by officers or employees of the corporation and by legal counsel, public accountantsand other persons as to matters the directors reasonably believe are within the person'sprofessional or expert competence.

•

004.44 7557.2

SOLIFE00026268

CONFIDENTIAL

Case 6:06-cv-00637-JA-KRS Document 56-6 Filed 05/08/2008 Page Oof 11203107/2008 17:63 352-374-1501 FFBF EX OFFICE

MinutesFlorida Farm Bureau Holding CorporationAugust 25, 2004

Page 8

Mr. Davis cautioned the Board that, for the purpose of deliberations regarding the

proposed recapitalization , that given the undetermined scope ofthe duty owed to PSC, the moreconservative approach would be to recognize and consider the economic interests ofPSC aspotential future owners ofFlorida Holdings ' shares. Therefore, Mr. Davis recommended that theBoard consider, among other things , whether the approval of the proposed transaction isreasonably expected to make the value of Florida Holdings ' investment in Southern life greaterthan it would otherwise be if the transaction were not approved.

At the close ofhis presentation, Mr. Davis asked Mr. Brashear if he had anycomments or corrections regarding what be had said. Mr. Brashear responded that he generallyagreed with Mr. Davis' explanation ofthe law and that it was the Board of Directors'

responsibility to act carefully, prudently and in what they believe to be the best financial interests

of Florida Holdings, taking into account the .financial interests ofPSC.

The Board ofDirectors discussed the issues further. During these discussions, ageneral consensus developed that the Oklahoma transaction was fundamentally a businessquestion about Southern Life's business strategy and competitive position. The directorsconcluded that Southern Life's management had carefully considered the acquisition, includingthe potential benefits and disadvantages, and that Mr. Stroble had presented a sound and logical

• explanation supporting the decision.

The directors also discussed whether the approval of the Oklahoma transactionwould have a potential adverse impact on PSC. The consensus developed that in this matter,where the Board was essentially dealing with a business decision relating to Southern Life'sbusiness strategy, that PSC should not be prejudiced and that the economic interests ofPSC andFlorida Holdings were reasonably aligned.

The following motion was properly approved, with only Don Nelson votingagainst it:

RESOLVED, that Florida Holdings authorizes andapproves, and shall vote in favor of the proposed recapitalizationof Southern Life to permit Oklahoma to become a shareholder,including the issuance of the proposed preferred stock to theexisting Southern. Life shareholders and the issuance of 1/11" ofthe common stock to Oklahoma.

The deliberations then turned to further discussion of the extension of the CharterTreaty. The Board tried to consider the proposed amendment from the individual perspective ofPSC, as well, as the best interests of Southern Life and Florida Holdings. The consensusdeveloped that the extension ofthe Charter Treaty would be in the best interests of SouthernLife, and its policyholders and shareholders, insofar as it .furthered the long-term business andstability of Southern Life. However, the Board recognized that PSC's interests arguably mightbe prejudiced, to the extent that the amendment arguably might impose additional potentialobstacles on PSC's right to receive value for its shares. The parties discussed that Southern Life

004.447557.2SOLIFE00026269

CONFIDENTIAL

Case 6 : 06-cv-00637 -JA-KRS Document 56 F5/08/2008 Page 13,E 12203707/ 2006 17:03 352-374-1501


intended to make an offer to purchase the debenture from PSC. The consensus developed that inorder to protcct PSC, the Board would only approve the amendment of the Charter Treaty ifPSCsold its debenture to Southern Life and Southern Life, as the holder of the debenture, providedwritten consent to the proposed transaction. Don Nelson spoke in favor of the practical benefitto PSC and its shareholders of selling the debenture and getting out of this investment.

Upon motion duly made and seconded, the following resolution was unanimouslyapproved by the Board:

Florida Holdings is authorized and directed to vote in favorof the extension and amendment of the Charter Treaty and relatedmatters if, and only if (i) Southern life first purchases thedebenture from PSC; and (ii) Southern We, as the holder ofthedebenture, provides written consent to the extension andamendment of the Charter Treaty.

0

There being no further business, the meeting of the Florida Holdings Board ofDirectors was adjourned. The directors held over thereafter for a meeting of the FloridaFederation Board, at which time the Florida Federation Board adopted the same two resolutionsas previously adopted by the Florida Holdings Board.

egZ t

Carl B. Loop, Jr., President

Jo c Husk, Recording Secretary

Hobli retary

•

004.447557.29

SOLIFE00026270

CONFIDENTIAL


EXHIBIT 5

Case 6:06-cv-006370-KRS Document 56-7

1t0 and J913I;soH ! j'les-01

Filed 608/2008 Page 2 of 11

r-Nil 60:10 f0-91-AOV PIAIIAIV

PERRINTtUjNOHAI T

CONFIDENTIAL-A1'TORNEY/CUENT PKIWLEGE

August 2.3. 2004.

Mr. Stsphsn M. YNhonPhelps Dunbar. LLP.P.O. Box 23018111 Esst CapRal 8bsst, Suks 600dadt'son, MS 89225.3006

Dow Mr. 1Mlson • .

ANALYSIS OF CONVERTIBLE DEBENTURE

TAtTUNnghast bwiness.of Towers. Perrin, Forster & Crosby, Inc. ('I inghast7 was

wonnnnecOon withlegaladvies that Phslps,Cunbar has t+endirod and render toSouthern Farm Bureau Lit. Insurance Company ('BFB related to.pending pupation(`the 'LitIga on') between SF6 and Florida Farm Bureau Holding Corporation, Plaintiffs'Shareholders Corporatlon ('P50') and certain vinoft. shareholders of PSC. The tomsat our engagernent we set out In a signed letter dated July 19, 2004.

Part of our psistnca is In relation to analysis of to awwarlible dsbenturl. This letter isorganized as 1ONows:

n Background and scopen Approachs Components of value of SFB• Value of convertible debenturea Rellancss and WYMdons.

'BACKOFtOUND AND SCOPE

A cone a debenture was Issued by Florida Farm Bureau Holding CorporationCFFBHC') to PSC. Upon conversion, PSC wall own 27.7% of the common stock ofFFBHC, which currently owns 10% of the common stock of SF9.

Carnrerslon ofthe debenture Into common stock of FFSHC will occur upon the earliest" . , of severd dates. as set forth In the debenture. Terminaion ofSm's Charter Treaty in

=4 Wd1 m Amffla, I WYodt. NY 10017 4eo6 twM"AMhm 212 DUM

APPENDIX APage 1 of 10

5LTO

Case 6:06-cv-00637*KRS Document 56-7

Ito and J'l.. - ? J11294l

Mr. Slophen M. WilsonAugust Z3, 2004Pne 2.

Filed S8/2008 Page 3 of 11-L-^ zo:eo f0-91-AO P•A18311

IILLU4ew+sr

most likely do ooaz:fl st. ThsUtminatlon date,-based on analysts done by$FB, W,expected to oo= in or abo!•23&

Phelps Dunbar has asked Tillinghast to provide an analysis of the valve of Onconvertible debenture as ofJuly 1, 2004. This letter out s our approach and theresutss of this analysts.

APPROACH

The value'of the convertible dsb.cbune Is related to the expected ltibum vatsa of SRS.As such, we considered the value of SFB. Our approach to assewft the vales atom

Is bas" on established aatuerlal appraisal value methodology to the U.B. The

methodology we used I. based on guidance provided in the Astusried Sta ndwd atProcilce Number 19 (A9oP 140); qfled "Actuarlat AppnsbtlW'•ae developed by theAommW $bmdards Board of the Ames $ n Acodsmy of Acluii1es. Ourwatt inpnepsrlng this lets has not considered the es1 mabn of voka that may be producedfrom applyhi alternative valuation methodolo^es cr approadws.

1n assees!ng the value of SF8, we considered the following component:

• icAusted'Mt wo. Which I. statutory capital .and surplus with certain sontawft

w In-foroe business, whlch'is the value of projected alter-tax sbtutory earningsexpelled ' to emerge 1 InMbroe polides. and contracts

a now business, which Is the value ofprojected afbe"tax statutory Nrnings dto emerge from policies and contracts expected to be issued In to 1Wum

n at of oepitaf, which represents the Impact of holding a lsrpet level of capital andsurplus In support of the lnrbroe and new business.

We projected each of these components to the end of 2033 to delsm** an es*mla of

the future value of SFB at the ime the debenhns is expected to convert Our pro*clIon

assumes an earned rata on the free surplus that Is based on•a single interest so.a.Ao

developed from the December 31, 2003 yield curve for U.B. Traswry constant

mai^rities. -

The estimated value of the convertible debenture In 2033 is ca{adabd as 2.77% oftheesSmated 2033 value of SFB. The 2.77% factor is determined by muIlp1yb g FFBHCsownership shags of8FB •snd PSCs ownership stare of FFBHC; that h,10% multipliedby 227.7%, or 2.77%. To determine the present value of the convertible debenture as of

CONFIDENTIAL-ATTORNEY/CLIEM' PRIVILEGE

VTOO Ivor ro:oT r009/4T/tt

Case 6:06-cv-00637SKRS Document 56-7

110 ued J81;NJsGH V JBIee-01

Filed 0O/2008 Page 4 of 11

-Ni l Z0=00 ti0•11-OM PDAISi•y

Mr. Stmph*n M. WisonAugust=. =4 iR' IRAP"G a.

-nLLOHMAIrr

July 1, 2004, we discounted the- V somata- of the value Otto rower ledebenture at the and of2033 to July Is 2004 at an assutled risk cRsoou n raft,.

COMPONENTS OF VAt OF.

For purposes Of assassins the value of SFH, we segmented SFB's business into threeblock.:

n We insurance. Including temp paMdpattng tradltIonol Ilb, univeasi ds and variableEh

n am uWea, fndudkV debrred .annuRies, both fbcsd'and variable, and payoutannuities, both lmm dIate and fired setllemonb

s other business, Including grdupW group loft-Iterrn dise ity, indMdual dlsabl ltyand long arm oa^e.

We used Dumber M. 2003 for t e as or date ofour initial data gather ng and settingup of Uta prooeoWn models for cola fion ease and because kdb on from thecompany was more rem available as ofthis date. W(e that projected Oft value, asdescrom d below to det'hti the Ssgmatsd value of BPS as of 2033. The following Itemswere considered in developing this eedhnats of fut re value:

• adjusted net worthn In4orce busksn new bustnsssa. cOat of capita, and terry t surplus

.. n fw suspiuan earned race on free surplus..

Adjusted Net Worth

Ini ialy, the adjusted.netvxwlh . ls equal to the statutory capital and surplus of 8F9 as ofDewmber.31, 2003, pie certain adjustments. Adjcstlients Indude thw required.s our Itab for asset defaults (the and valuation reserve or'AVR"), an a rentfor defined tax assets not valued Nsewbere, an assigned value to certain assets thatare non-admitted under statutory aaooundng tales, and an aRertan market valueadjustment for assets assumed to be liquidated at the valuation date.

Coins forward, adjusted net worth is equal to. the sum of the !be surplus and the targetsurplus, as described f t mar below.

CONFIDENTIAL-ATTORNEY/CLIENT PRIVILEGE

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Case 6:06-cv-00637-*KRS Document 56-7 Filed 0&/2008 Page 6 of 11

f

IN Ind JSUI'OH I J811"1 -raid ZVt0 10-91-AN PSAISOga

Mr. Stephen M. VasonAUgunt 23,2004 raRI"APa" IL

-second NO of 2004.-New business production thetsi UT Is based on..tsd industryaverage growth takIna into acoourf! fhb d aclerblics of SFB's business. !assumptions for items eaten p'morbdily. lapses, expenses, eta WOM sot consistent withthe assumptbns used far project ng in-iota bestwith-appropdat abb.

The valve of new business is based on a ski bftfst scenario developed from theD.csmber 31,2003 yIsld dLrve for U.S. Treasury constant matvritss with adjjusbnanefor interest rats dsi for hAirest sensltlv. annuity business.

Future profits for each year of issue of new business were projected for 30 years fordstns of buakhss. Target surplus was released at the and ofthe projection period. carryfuture profits beyond 30 years from the data of Issas wen deemed to be kn=hmid asmost of the business has expk.d by this tin..

Cost of Capital and Target Surplus

Cost of capital has been calaulatad under the issumption that required capital or "ter+getsurplus" is held at a level appro,dmataly equal to 200% of fire NM Company ActionLevel Risl-Basted Capital ('RBW') fbr the In-force and new business.

The distributable earnk^ga developed for the In-Imes business and now business webased on the assumption that Insurance co nies wifi retain a certain level of statutorycapita and surplus to support ongoing operations and maintain favorable sptlaboey andraring agency treatm nt. Such retained capft and surplus Is referred to as the "targetsurpkW In this letter. To to extent that the after-tax yield on assets supporting getsurplus, Is less than the trek discount rates used to calculate the values of bnlacsbusiness and new bigh , there is a cost asfioe bed with holding target surpkmLThroughout this telesr, such cost Is referred to as ms `coat ofa~

Free Surplus

The free surplus.rvpmsents the amount of surplus hold by the company In excess of

to get surplus. InWally, free surplus is equal to the excess of adjusted net worm over theInitial target surplus. in future years. the free surplus at the-and of the year is equal to(a) free surplus at the beginning of the year, plfn (b) Interest earnings on *es

surplus, plus (b) distributable earnhVs for the yearfrvnt both In-force business and newbusiness.

gamed Rat. on free Surplus

To project the value of 9F9 at'the'end of 2033, free surplus Is•acaumulated to relict the

investment earnings expected to be earned on the amount.. Our projection assumes an

CONFIDENTIAL-ATTORNEY/CUENT PRMLEGE

TMVI rod TO:OT 6002/9T/TT

Case 6:06-cv-006370-KRS

220 SIMd J9139420H ! »JI9-Ot

Mr. Stephen M. WltsonU5123, 2004

Page IL

earned rats .on-the flee surplus that is based on a skngle Interest sesnsdo devsIop.dfTcm the June 30, 2004 yield auvs .Yor U.S. Thmmiy cornstant •matudtles. The earnedrate on tree surplus Is assutrvpd to be '5.62%: Wwas determined as the dslc free rate plusa credit spread less a provision for defaults. The risk free rate is 4.67 %, which 1s theannual effective 10-rear U.B. Treasury rate as of Jyme 30, 2004. The assumed craftspread is 95 basis points ("bpa'.). which In consistent with an A rated corporate bond andWS's At rating. Defaults are 10 bps, which is consistent with expected default rstse.fbran,A rated band. The Mvesbnent ngs were adjusted to an afteMax basis based anan assumed marginal tax rate of 35%.

Estimated Value of SFB In 20313

The estimated value of SF9 In 2033 was determined as the sum of (a) the fiM surplusat the end of 2033, (b) the target surplus at the end of 2033, (e) the present vale, of theremaining In-tor x and new business as of the end of 2033, discounted at anappropriate risk discount rate. Risk dlacoount tales we discussed below in the sectiontitled Value of Con to Dsbenbms'

VALUE OF CONVFRTIB .E DEBWYTURE

Ae. noted above, the estimated value or the convertible debenture In 2033 is caicuktadas.2.T7% of the estimated 2033 valai ofWO. To dste a the present value oftheconvertible debenture as ofJuly 1, 2004.'we discounted the resulting eatirnate, ofthevalue of the convertible debenture at the end of2033 to July *1 2004 at an ssawmed riskdiscount rate.

The Flak discount rate (`RDR") Is used to develop the present value of the convertibledebenture based on the projected value of the convertible -debenture in 2033. toconsidering the appropriate RDR to use for this purpose, we find considered areasonable RDR to use for a sale of a company If that sate occurred today and thenadjusted this rate further for mirnstances specific to this situafbh.

We developed the RORS, in paft, based on guidance provided in ASOP 19. In ASoP 19,it states that the RDR should lndade we risk-tea, return that compensates the Investorfor the use of the funds (recognWng antidpated Inflation so as to maintain the real valueofthose funds), plus a risk premium above the rtsk4We rate that compensates theinvestor for the risk that actual returns will deviate from expected. The size of the maltpremium varies with the degree of risk associated with the returns.`

In developing appraisal values, it is common lndustey. pnadic e*lo present a range ofvalues based on a range of RDRs. For SFB, a range of risk discount rates we would usefor an assumed sale of the company today would be 8.0%. 9.6% and 11.0%. This range

CONFIDENTIAL---ATTORNEY/CUENT PRM.LEGE

Document 56-7 Filed 08/2008 Page 7 of 11

-mid ZO: so 10-i -AON PDA I e2*y

ZZn01 YVd TOOT b003/9T/TT

Case 6:06-cv-0063*-KRS Document 56-7

6Z0 and J813O;aON ! J1186-01

Mr. Stephen M. WlsanAugust 23.2004Page 7. raa S

of discount rasa is representative of rates of return commonly used In sclusrWappraisal vahass in the U.8. insurance Industry In today's econoinle envlronmsr t. Thessdiscount rates illustrate the effects on value of varying investorinsandrepresent returns Inclusive of inflation. With regard to recent Insurance transadlons,#mmUs been a significant disparity between buyer and Wier expedstions In recentyear sv with buyers often targettnp a 12% or higher return, while sellers are closer to 0%.As such, It is unlikely that SF8 could.e euwt• a sale of the company today based on anROR of less than 11%.

The RDR used to value the conwrttble debenture reflects certain equabnarris formatanees specific to. fts situation. Adjustments are needed for the ftlowlnq (1)

the it lquldit of the dsbent ", (2)nsbSctlons on transfer of stock In FFBHC and SFB forover 30 years, (3) nwirk Ions on dividends from SFB retained by FFBHC, (4) theminority interest of the debenture in FFBHC, and (5) the minority barest of FFBHC inSFB. The lnablilty to access value through the debenture over such a long period.Cori bk+ed with the inability to control SFB•a actions creates a tremendous opportunitycost and causes a scar cant degree of uncertainty and risk in terns of the expectedreturns. As such, we believe that the resulting RDR should be well above an 11% rats.that might be appropriate for en assumed sale oo the company today. Based on the"mss, ws haws chosen RDRi of 12%, 14% and 16% to 1Nustrati for this purpose.

The values in this loner were determined In accordance with our.ear,mates ofwhat winbelieve to be the most probable future experience of SFB. The table below presents theresult of our analysis of the value of the convertible debenture today at discount ratesof 12%,44% and 18%. •

TABLE 4

Estimates of Value of Convertible Debenture as of July 1, 2004 ($ mUflens)

teak D{s wd Rea

12% 14%

ii6.e . p.3,- ofEonsDatumss $21

You have asked us to provide you with a single estimate of OW value of the convertibledebenture. The single estimate we have chosen is based on Table I at the centraldiscount rate of 14%. which is $3.3 million. E, hIblt 1, attached to this letter, providesfurther details of this calculation.

CONFIDENTIAL-ATTORNEY/CUENT PRIVILEGE

Filed S8/2008 Page 8 of 11

-wig Z0:00 YO-11-ACM PDA14581

^^^^ Iv. ZO:Oi 9002/97/TT

Case 6:06-cv-006-*A-KRS

NO end J1116,-(+ ,91s941

Mr. Stephen M.1M1sonA: st 23, 2004Pale &

RMIANCISS AND UMITATION$

TOWRRsPBRRIN

TILLINOMAWT

In preparing this analysts arid developing this letter. l lGnghsst railed upon data andiniom*tlon supplied by Phelps Dunbar and BF8 In writing and in discussions.Tdlinghast has not reviewed this data for acWuacy, but has considered It for penerWreasonableness and consistency with our knowledge of the Insurance Indusby. We tookInto account previous work we have done for 6F8 as well as the specific details of#wconvertible debenture, PSCs Interest In FFBHC'end,FFBHC's Interest In 8FB, ascontained in On bsdcpround matodala that wars provided to us.

In accordance with the letter ofengagement dated July 19, 2004, this heder and theopinions and conclusions contained herein am for the Internal use ofPhelps Dunbar,SF8 and other experts in connection with the Litigation. Y also understand you will bepmvkft a copy tis letter to P$C.

Tlfrwhast has performed the work assigned and has prepared this •lettsr in conformitywith its intended utilization by a person(s)'tedhnicapy competent in-go area addressedand for the stated purposes only. Judgments as to ft data contained In the letsshe be made only alter studyJng the fetter QWwding ate) in Its entirety.Furthermore, members of the Tinhlnghast d? are available to explain and/or ship y anymatters preunied heroin, and it is assumed that the user of this letter will seek suchwcpiariation and/or ampU tton wto any maUer•in questkin..

Although we have devetoped model pr 4coft s in conformity with whatwe betteve to bethe current and proposed .operating envkmments and the rnost probable" futur*.experience within such environments, it should be recog nhsd that actu i talu a remv4H vary from those projected. Deviations in the parameters used to rsflact theenvirvrunent could alter the projected results substantially. These parameters includereinsurance practices, management direction. insurance regulations, accountingpractices, federal and local taxation. and external economic factors such as Inflationrates and available Investment yields. Finally. deviatlons from 'most provable"experience are normal and are to be expected. Even without any change In peroalvedenvironments. and in parameters used to reflect them, actual results from year -to-yearwIA vary from those projected because of normal random fluctuations,

CONFIDENTIAL. --ATTORNEY•/CLIENT PRIVILEGE

Document 56-7 Filed*/08/2008 Page 9 of 11

-W.bw( 30:10 f0-91-AcW PSA11Sol

VZOOVd SO:Ot 9OO9/9t/tt

Case 6:06-cv-00637-*KRS Document 56-7 Filed 0&/2008 Page 10 of 11

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W. Swoon M. MUMAugust 23, 2004

p4+ 9• rLLMa+n$T

am avaabli 5s requested to provide supplem.fltaIy exp1iin8 Mons or details nerve to

• the matters dlsouusd in:V* Ntte .

JadeL Gibson. FBA, MAM 'Manag Prfidpai , NoMAmps Lre Pr oeDirod DIel: 212.3O9.39^Z

c Pony McGWO. am.Joe Purvis, BFB

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EXHIBIT 6

Case 6:06-cv-0063 111hkA -KRS Document 56-8 Filed 08/20%60 Pq00 lead ioiio^otl YO'SgZNof 19A I038S

HAROLD G. INGRA$A,M,.JR., FSA, MAAAConsulting Actuary

5260 N.W. Second AvenueSutte 304

Boca Raton FL 33487

September 22, 2004

Bruce Brasheer, Esq.BRASHEAR'&ASSOC., P.L.926 N.W. 13'b StreetGainesville FL 32601

RE: Tillinghast Analysis of Plaintiffs' Shareholders Corporation's ("PSC"j... Convertible Debenture

Dear Mr. Brashear:

In an August 23, 2004, report to Stephen M. Wilson of Phelps T)unbar, . LLP, the Tillinghastbusiness of Towers, Perin, .Forster & Crosby, Inc. provided an analysis of the valuation of the above-referenced. convertlblo debenture , as of July 1. 2004. Tillingbast's approach involved projecting • eestimated future value of Southern Farm Bureau Life Insurance Company ("SFB").to year-end 2033 usinga variety of assumptions and than determining the present value of the convertible debenture (2.77% ofSFB's estimated value) as ofJuly 1, 2004, at"an assumed risk discount ram."

The-Tillinghast report sots forth an assumed 12%-16% range of-discount rates and also provided asingly estimated value for the convertible.debenture of $33M based on a 14% discount rate that wascentral to their 12%-16% assumed range of discount rates.

I have been retained by the PSC Board of Directors to render an opinion with respect toTillinghast's valuation ofthe convertible debenture - with particular reference to Tillinghast's choice of arange of reasonable discount rates. In formulating •my opinion, I sought guidance from two Ac zanialStandards of Practice (`ASOPs") as follows:. .

EXHIBIT

APPENDIX B 6Page 1 of 3

' Case 6:06-cv-0063&A-KRS Document 56-8900 'sed nMats ? ^s^lsg-01

Letter to Bruce Brasnww, Esq.septcmba• 22„ 2004Pqe 2

ASOF 19: Appraisals of Insurance Companies

FJcO/08/2jQA Vo1pa 3 1ai#eiss

"Discount Rate: If the appraisal I. based on the discounted value of ftrture earnings, the actuary shouldconsider providing appraisal values based on a age of discount rates In. order to illustrate the sensitivityofthe appraisal value to the discount rate."

"Sensitivity Testing: When appropriate and practical in the actuary' s judgment, the actuary shouldaddress the sensitivities of the appraisal, value to changes in key assumptions. The actuary shouldconsider the intended purpose ofthe use ofthe appraisal and whether the results reflect a reasonable raaof variation in the assumptions consistent with the intended purpose and use when determining whetherthese sensitivities have been appropriately addressed."

(underlining is mine)

ASOP 21.,_ Selecting Economic Assumntians fpr Messurina Pension Obligation

"Best Estimate Range: For each economic assumption, it is the narrowest range within which the actuaryreasonably anticipates that the actual results compounded over the measurement period are more, likelythan not to fall."

• On page 7 of the referenced Tillinghast report, it states : "... there has been a significant disparitybetween buyer and seller expectations in recent years, with buyers targeting a 12% or higher returnwhile sellers are close to 9%. As such, it is unlikely that SFB could execute a sale of the companytoday based on a RDR.. (risk discount race) less than 11%."

• 'I'illingbast applied-certain subjective ad ustments to define- a range of discount rates between 12%end- I'6%, and made- a single- estimate of the convertible debentt re's value using the 14% central.discount' rate of the 12%-16% range. ' That set of assumptions produced an assumed convetti'biedebenture present value &of $33M.

• I contend that an equally reasonable-range of discount rates pertinent to this cue would be 12%-148,kthe central discount rate of which is 13% and the correspondingly convertible debenture value is

• $43M. Alternatively, another range of reasonable discount rates could be, defined as I l%-14%. Thecentral discount -rate of this range is 12.5% and the corrdsponding convertible debenture value is$4.9M. _ •

Thus, we see from the foregoing that

L -Where le no single discount rate that exactly applies here. Instead; there is a fairly wide 'range ofreasonable discount rates applicable to the convertible debenture valuation. .

2. The resulting valuation is highly sensitive to the discount rate used.

Case 6:06-cv-0063A-KRS Document 56-8 Filed*08/2008 Page 4 of 4

900 seed J9149430H ? JE!..O1 -mOJd ZV60 VO-9l-AON PuA1s3sa

4„e^er to eruct Bmshow. Esq.Septambe' 2'A, ZOOSPops 3

3. There Is much room for reasonable differences of opinion between PSC and SFB as to the single

discount rate to be finally settled upon. Tillinghast' s use of 14% in this regard is one such

estimate, but it is no better than a number of other discount rates within a reasonable range.

I hope that this letter provides the PSC Board of Directors with information that they find useful. If I

can be ofany further assistance in this regard. please let me know.

Sincerely,

Is,

Harold C. Ingraham, Jr., FSA, MAAAConsulting Actuary


EXHIBIT 7

Case 6:06-cv-00631A-KRS

800 end

Dear Stockholder.

Document 56-9 FiledQ/08/2008 Page 2 of 8

JSI1'I9°H ! i618841 -mid ZZ:ft t009-90-320 139AIs39V

PLAINTIFFS' SHAREHOLDERS CORPORATION5700 SOUTHWEST 34 STREET

GAINESVJLLE FL 32608PH: 352t374-IM,FAX: 352/374-1501

September 29, 2004

We are pleased to enclose a notice of a special stockholders ' meet' of Plaintiffs ' ShareholdersCorporation ( PSC'y) to be held at 5700 Southwest 34 Street, Gainesvl le, Florida at 10:00 AM onFriday, October 15. 2004. The purpose or this meeting will be ( 1) to consider approval of the sale ofPSC's Convertible Debenture to Southern Form Bureau Life insurance Company and (2) to transact suchother business as many. properly come before the meeting.

The Convertible I)ehenture constitutes substantially all of the property of PSC. PSC has concluded thatshareholders are entitled to assert appraisal rights pursuant to Sections 607.1301 through 607.1333Florida Statutus (2003), a copy of which accompanies this note. Pursuant to these statutes , If the sale ofthe Convertible Debenture is effected, shareholders dissenting therefrom are entitled. If they comply withthe provisions of $cc . 607.1301 -607.1333 , FLA. STAT. (2003 ), to be paid the fair value of their shares.

We urge you to review the enclosed Proxy Statement and to complete and return the enclosed proxy evenifyou plan to attend the meeting. Sending us your proxy will not prevent you from voting in person at'the meeting, should you wish to do so. If you have any questions concerning PSC, please do not hesitateto contact us at the numbers set forth above.

s iy,

Plaintift^' S cmarspon

Y =

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Case 6:06-cv-0063&A-KRS Document 56-9zoo .led J81491ae JONeO-°.L 8/ ^ to-Page 3p81A8oaoy

PROXY STATEMENTFOR

SPECIAL MEETING OF STOCKHOLDERSOF

PLAINTIFFS' SRA1 BOLDERS CORPORATION• 5700 SW 34T STREET -

GAINESV11LE, FLORIDA 32608TO BE HELD AT 10:00 AMON FRIDAY, OCTOBER 15, 2004

To Stockholders of Plaintiffs' Shareholders Corporation:

Plaintiffs' Shareholders Corporation (the "Corporation" or "PSC") is a Fiotida corporationchartered on April 26, 1995. As set forth. in its Articles .of Incorporation, the Corporation is a limitedpurpose corporation organized for the exclusive purpose of owning, administering, transferring andselling the Convertible Debenture (the "Debenture") issued by Florida Farm Bureau Holding Coipomtioso("Florida Holding") pursuant to the Stipulation of Settlement and Agreement as approved in the FinstiOrder and Judgment dated November 19, 1987, (the "Settlement") in Winchester, at aL,•vs 1 rfda•Ferr nBureau Equities,. Inc., et at., Case Number GCA 84-0148MW. United Statue District Court for theNorthern District of Florida, Gainesville Division ; (the "Count") or surrendering, the Debenture fmconversion into common capital stock of Florida I}olding, and-to Issae,shares'of•thla Corporation's NoPar Value Common Stock'representing pkoportionat,e interests is the.Cbiporaiion to theiuem,bers or theplaintiff class or to their heirs, administrators, executors„ successors'or assigns.(ther"C1ass.Membars") insaid case, as provided in the Settlement : • . .. . . ' . • . ,,

The Board of Directors. of the Corporation has called. a special meeting of the stockholders to beheld on October 15, 2004 at 10:00. AM at tbe•Cotpora#ion's office located at 5700 Southwest 34e Street,Gainesville, Florida 32608. As'.stated •inr-thc.notice of the- stockholders' meeting the purpose of'themeeting is to consider approval -of the sale of the. Debenture to. Southern'- Farm • Bureau L. Itisu iitooCompany *("Southern. Life") for a .total consideration of $4,440,000 •to be• paid $3;330,040' in: cash at.closing and-by the execution of a promissory note in the.principal amount of $1,100,000 bearing intere*at the prime 'rate reported by the. Will Street .lours al on the date of closing.; TM sally of the Debenturemnst,be'approved,by a' majority, of thc'outstanding 'shares of`the Corporation, or A total Of X24,719common shares. if approvc;d'by the'Corporation's sharehdlders, closing will.pccur•on October 15,3004.The Corp ration will be subject to federal and state tax on the gain realized from the sale,' he amountand timing of distributions to shareholders will be determined by the Board of Directors approximately 30days following closing.

Frequently Asked Questions Regarding the Corporation

The Corporation is a limited purpose holding corporation with no business -operations of its *Wn,Its sole assets are cash ($29,286.01 as of August 31, 2004) and the Debenture. .

1. How did this all come about?

This resulted from a 1987 settlement of a Federal Court lawsuit which followed the sale ofFlorida Farm Bureau Life Insurance Company (owned by Florida Farm Bureau Equities, Inc.) to SouthernFarm Bureau Life Insurance Company. As a part of the settlement of that suit, Florida Farm BureauHolding Corporation (a company which was set up to bold Florida Farm Bureau Federation's 10% ofSouthern Farm Bureau Life Insurance Company) issued to the Class Plaintiffs a convertible debenture.The debenture is convertible at the expiration of the Charter Treaty among the various state farm Bureauswhich own stock in Southern Farm Bureau Life Insurance Company. At the time of conversion, which is

--Case ovOf16 AKF^S"` bocu`ment 56-9 Filede/08/2008 Page 4 of 8 - v J

actuarially calcub icd to be approximately 2033, the debenture will be exchanged for 27 7% of the shares

of stock of Florida Farm Aureau Ilolding Corporation. This percentage corresponds with the prior

ownership of the class i'laintiffs in Florida Farm Bureau Equities, Inc.

2. Why sus lTlhtiniitfs' Shareholders Corporation ("PSC") set up?

71w 19R7 s4ttleinent called for the debenture to be issued to a corporation or similar legal

mechanism to manage and hold the debenture and so that the Class YlaintiITS had evidenev of their

ownership interest and it rneins to record and transfer their interest. PSC was established in 1995 aril

shares issued in 1e-,06 lol this purpose.

3. Why 1 1 1 i s Corporation set up in 1987?

Apparently the attorney for the Cams Plaintiffs was unable to loc ate a suitable transfer agent ortrustee. In 1994 he asked the Florida Farm lure u Federation, a co-defendant in the original litigations, toconsider assuming r4spunsibility t'ar the Class Plaintiff records as the Class Plaintiff: hnd originally beenFarm Bureau rnernbi rc. and he was having difficulty keeping addrussc i current. Flotida Farm BureauFederation declined to assume this directly but was instrumental in forming l'SC to perti-nn this service.

4. Ilow wits slack ownership calculated? How many shareholders are there?

Stock ownership was calculated according to stock ownership of the Class Plaintiffs in three oldFlorida Farm Bureau Equities. Inc. 'I beru are 249,437 shams of 1'SC stock outstanding. There wereinitially approxnnatuly 892 shareholders, the same as in the old Equities corporation.

The Proposed Debdutare Sale

On August 24. 2004, Southern Lite offered to purchase the Corporation's Comerlible Debenturefor a total purchase price of $3,300,000 to he paid $2,500,000 in cash at closing, which was to occur on orbefore O tober A. 2604. The balance or the purchase price was to be paid by a, pn+rninvixy note in theamount of $800,000 to be paid within one year of execution. Accompanying Southern I i I'u's oncr was anAnalysis of Convertible Debenture dated August 23, 2004, provided by Towers Perrin Forster & Cr eby,Inc. ("Tillinghast") IMF ['helps Dunbar, I.I.P. counsel to Southern L.ifc (the "Tillinghast Letter"), a copy of,which is attached Mete as Appendix A. The Tillinghast I.otter stated that the Convertible Debenture hada value within the range of $2,000,000 to $5,600,000 based on discount rates ranging from 16% to 12%,and concluded that the value ofthe debenture was $3,300,000.

The Corporation then retained the services of Harold G. Ingraham, Jr. to review the TillinghastLetter. On Upictnhur 22, 2004, Mr. Ingraham rendcrcd his opinion to t3rashear & Arse.. P.L., counselto the Corporation (the "Ingraham 1,ener"), a copy of which is attached hereto as Appendix B. TheIngraham Letter co4chided that the estimated value of the Debenture was dependent ulxm the disaauntrate chosen. Ingraham concluded that discount rate ranges from 12% to 14% and l l%yo to 14% wereequally reasniuil'le as the discount rate range of 12% to 16% used in the Tillinghast Letter. Use of the12% to 14% Anal I I'%a to 14% ranges resulted in values of $4,300,(100 and $4,900,000. respectively.

On the basis of Mr. Ingraham ' s opinion , the Board on September 22, 2004 . countered SouthernLife's offer with an r,tli,r for an all-cash sale of the Convertible Debenture for $4 ,4(9),000. On September23, 2004. Southern L ite counter-offered with a purchase pries of $4,400, 000 to he paid $3,300,000 incash and S 1,100.0011 by the execution of a promissory note to be paid in not more than two years from thedate of execution bdnring interest at the prime rate as reported by the Wall Strout Journal nsr of the date ofclosing . On .eptumber 27. 2004 . the Board accepted Southern Li(e's cc,untur i lbr subject to theapproval of the. (.'orp4. )ration 's shareholders.

Received Oct-05- 2004 14:22 Free- To-Baker i Hostetler Page 003

opt-mss-^ CQ:Q6-av =Doe ent 56-9 File*5/08/2008 Page 5 of 8

The Corporation ' s 13oard of Directors is recommending approval of the yule of corporation'sConvertible Debenture for the following reasons;

• The Convertible Debenture and common stock in Florida Farm Bureau Holding Corporation("Florida Holding") are highly illiquid. The Corporation's Convertible Debenture is unique. It isconvertible into 27.7% of the shares of stock in Florida Holding at a date which is actuariallycalculated to he approximately 2033. if the Convertible Debenture is not saki, it will remain theCorporation's sole asset until 2033. Following the date of conversion, the Corporation would thathold shares in Florida Ilolding, which itself owns a minority interest in Southern Farm Bureau Lifeinsurance Company ("Southern Life"). There is no public market for the Convertible Debenture,Florida tickling's stuck or the Southern Life's stock. The Corporation has not received any otheroffer to purchase the Convertible Debenture since its inception in 1995.

• The purchase price Is reasonable. The purchase price is within the ranRtcs of estimats;.d valueestablished both by the Tillinghast Letter and the Ingraham Letter.

a The Corporation is operating at a deficit and will continue to do so for the foreseeable future,The Corporation's income is derived from its share of the annual dividend paid by Southam Life toFlorida Holding and interest income. Income to the Corporation was $2,805.42 in 2002, and$2,072.72 iit 2003. The Corporation's expenses in 2002 were $11,612.71 and $10,033.62 in 2003.At the preseet rate of expense and income, the Corporation cannot continue to operate for many moregroan. The current financial statements for the Corporation for the period from January 1, 2004through August 31, 2004, are attached hereto as Appendix C.

Rights of Disscoting Stockholders

Stockholders who do not vow in favor of the proposed Debenture sale and who follow certainother procedures summarized below have the right to dissent from, and obtain payment fur, their Shares inthe event of the consummation of the proposed Debenture sale ("dissenter's rights or "appraisal rights").The folkwing is a summary of the provisions of the Florida Business Corporatism Act that specify theprocedures to be followed by any stockholder who wishes to dissent and demand payment for his sharesin the event of consummation of the proposed Debenture sale. Curtain provisions of the Florida BusinessCorporation Act regarding rights of dissenting stoekholderp are set forth in their entirety in Appendix Dattached to this proxy statement, and this summary is qualified by reference to these provisions.

We have furnished to stockholders in this proxy statement information with respect to theproposed l)cberituro sale in order to enable a stockholder to evaluate the proposal and to determinewhether or not to exercise dissenter's rights. A stockholder may assert these rights only if (a) thestockholder delivers to the Corporation, before the vote is taken at the stockholders' meeting, a writtendemand for payment for his shares in the event the proposed Debenture sale is consummated, and (b) thestockholder does not vote in favor of the proposed Debenture sale. If a stockholder votes in favor of theproposed L)ebenture sale, the stockholder will not be entitled to dissent and demand payment for thestockholder's shares, and a dissenting vote on the proposed Debenture sale will not satisfy the aboverequirement that a written demand for payment be delivered to the Corporation. If the proposedDebenture sale is not approved by the holders of a majority of the outstanding shares of the Corporation,no dissenter's rights will arise.

Within 10 days after approval of the proposed Debenture sale at the stoekholdera' meeting, theCorporation shall give written notice of such consent or adoption of the proposed Debenture sale to eachstockholder who filed notice of intent to demand payment fur his shares, except any who voted for theproposed action. Within 20 days after giving notice to such stockholder, any stociholder who elects todissent shall file with the Corporation a notice of such election and demand for payment of the fair value

Received Oct-05-2004 14:22 From- To-Baker i Hostetler Pap 004

Oct-b^ - o4Cg :^O^cC-OOJd=KI^^- Document 56-9 FiIS5/08/2008 Page 6 of 8

of his shares. Any stockholder failing to rile such election to dissent within the 20-day period shalt be

bound by the tc:nni of the proposed Debenture sale. Any stockholder filing an election to dissent shall

deposit the susekliolder's certificate(s) with the Corporation simultaneously with the filing of the election

to dissent. Upon filing a notice of clcvlion to dissent, the stockholder shall thercafier he entitled only to

payment, and shall not be entitled to vote or exercise any other rights as a stockholder of the Corporation.

Within lU day% after the expiration of the period in which stockholders may the their notices ofclectiun to dissent, or within 10. days after such Debenture sale is effective, whichever ii later (but its nocase later than )0 days from the date of the stockholders' meeting), the Corporation ,hall make a writtenoffer to each dissemang shareholder who made demand to pay an amount the Corporation estimates to bethe fair value of such shares. If within 30 days after making of such oiler any sitickhoold r accept-. theover. payment of his hares shall be made within 90 days after making of such offer or the consummationof the prupns.d Debenture sale, whichever is later. Upon payment of the agreed 'nl'tc. the dissentingstockholder will cease its have any interest in such shares.

If the Corporation fails to make such offer within the pcriod.specificd or if it nt.tkcs the otter andany dissenting shareholder fails to accept the offer within the period of 30 days thereafter, then theCorporation, within 30 days of receipt of written demand from dissenting stockholder given within 60days after the date on which such pmposed Dohcnture sale was affected, shall, or at its election at anytime within such period of 60 days may, rile an action in any court of competent jurisdicticnt in the coatntyof Florida where the Corporation maintains a registered office requesting that the fair', aluu of such sham$be dotetminud. '11w ccxurt shall also determine whether each dissenting stoukholdcr. as to whwn theCorporation requests the court to make such determination, is entitled to receive payment for his shares. Ifthe Corporation fails to institute the proceedings, any dissenting shareholder may do so in the name of theCorporation. All di •ntinq stockholders (whether or not residents of Florida), other than stockhotdurswho have agreed with the Curpanitiun an to the value of the sherc , shall be made parties to theproceeding as an action against the sham.

The court rraty. if it so elects, appoint one or more persons as appraisers to receive evidence andrecommend a decision on the question of fair value. 'l1te Corporation shall pay each dissentingstockholder the amount found to be due within 10 days after final determination of the proceedings. I. Jponpayment of the ,judgment, the dissenting stockholder shall cease to have any intent in such sh,arec.Judgment may, at the discrution of the court, include a fair rate of interest, to be determined by the court.

The court will determine all costs of the proceedings, including the reasonable i. c mpensatiora andexpenses of the appraisers appointed by the court, and shall assess such costs agamet the Corporationunless the court finds some or all of such shareholders acted arbitrarily, vexatiously or not in good faithwith respect to the appraisal rights. The court may also assess the fees and espunsus of couriml andexperts for the respective parties, in amounts'the court finds equitable. (a) against the Corporation if thecourt rinds it did not substantially comply with Sec. 607.1320 and 607.1322 Ft.n.S't'n't.; or (b) againsteither the Corporation orthe shareholder(s) demanding appraisal, in favor of any other party if the courtfinds that the party against who the fees are assessed acted arbitrarily, vexatiously or not in good faithwith respect to appraisal rights. If the court In an apprai,al proceeding finds that the services of counselfor any shareholder %ere of substantial benefit W other shareholders similarly situated. and that the feesfor those services should not be assessed against the Corporation, the court may award to such eounsclreasonable fees to be paid out of the amounts awarded the shareholders who were bcncf lvtl.

Stockholders of record an September 29. 2004, are entitled to vote at the meeting. TheCorporation has outstanding 249,437 shares of its Cnmmun Stuck. Stockholders are entitled to one votefor each share owned.

Manitgement hereby solicits your proxy if you art; not able to attend the meeting. You are urgedto sign and return the enclosed proxy promptly in the enclosed self-addressed, posin a-paid envelope.

Received Oct-05-2004 14:22 Frog- To-Baker A Hostetler Pass 005

0'5 - o4 Ease 66-cw00*;11k-KRS- • •[7o cument 56-9 File*5/08/2008 Page 7 of 8

Sale of the Debenture must be approved by a majority of the outstanding shares of the Corporation or124,719 common shares. If you have any questions, please contact the Corporation at 352-3744504, ofits Directors at the following telephone numbers:

Royal French 352-528-4491George James 352-588-2266Earl Ference 352-332-1072Kay Richardson 352-591-1888

Shares represented by your proxy will be voted as you direct Management recommends a votefor the above proposal, and, if no choice is specified, shares will be voted for such proposal . For othermatters that may properly come before the meeting, the shares will be voted in the discretion of theproxies.

Thank yvu in advance fbryow an

vay truPY,

September 291,2004

Received Oct-05-2004 14:22 From- To-Baker A Hostetler Page 006

Case 6:06-cv-00•JA-KRS Document 56-9

600 02ed J6149130H I Jells-al

FiIe*5/08/2008 Page 8 of 8

-mold Z0:60 P0-41-AGN Poala0sa

PLAINTIFFS' SHAREHOLDERS CORPORATION

PROXY

1he undersigned hereby appoints, as proxies, Royal French, George James, Earl Ferrate. KayRichardson and Donald Nelson to vote, as designated hereon, all shares which the undersigned would beentitled to vote at the meeting of the stockholders of Plaintiffs' Shareholders Corporation (the"Corporations'") to be held at Gainesville. Florida on Friday, October 15, 2004, or at any adjo=mneniathereof. Action hereunder may be taken by a majority of said proxies who are present or, if only one bepresent, by that one.

1. Approval of the sale of the Corporation's Convertible Debenture to Southern Farm Bureau LifeInsurance Company for a total purchase price of$4,400,000:

FOR AGAINST WITHHOLD

SUAIMS REPRESENTED BY THIS PROXY WILL BE VOTED AS D CI" REREON.MANAGEMENT RECOMMENDS A VOTE "FOR" THE ABOVE PROPOSAL. IF NO CHOICEIS SPECIFIIxv, TJiiS PROXY WILL BEVOTED "FOR" THE ABOVE PROPOSAL.

The uidessigned further authorizes said proxies to vote such shares upon such other business asmay properly come before the meeting in the discretion of said proxies.

The undersigned acknowledges receipt of the Notice of the Meeting of Stoohholdera, and theProxy Statement, each dated September 29, 2004.

THIS day of . 2004.

PLAS COM 5268 P30160 STOCKHOLDER SIGNATUREEUGENE C BADGERPO BOX 2345BELLE GLADE FL 33430

- --- STOCKHOLDER SIGNATURE(ifheld is joint names)

PLEASE RET :'V`IA I+`AX: 352/314 1SOf

URMAII:. 1N: P.O.STAGE.PAID E^![V'EI:oP^•:•

NOTE TO .PERSONAL RED1 ESENTAi1VES ;TAUS' '.^'S,Z 'C. ' L;FLO UDA.ZwALLOW THE CCOI PORAUO T TOA.CCEPT•PIWXIE.S:•SIGNED BY,' ::'

I AL REP,t2ESEN1iTIV:ES`SHOVING .THEIRCAt'ACrrI TO.ACTAS SUS;.'' =='


EXHIBIT 8

Case 6: 06-cv-00634-KRS Document 56-10 File&/08/2008

Baker Hostetler

May 11, 2006

Board. of Directors, Plaintiffs' Shareholders Corporation926 NW 13th StreetGainesville, Florida 32601

To the Board of Directors of Plaintiffs' Shareholders Corporation:

Page 2 of 24

Bakes-&Hostetler LLPSunTrust Center, Suite 2300200 South Orange AvenuePost Office Box 112Orlando, FL 32802-0112

T 407. 649.4000F 407. 841.0168www.bakerlaw.com

Jerry R. Unscottdirect dial : [email protected]

The undersigned lawyers have been retained to represent certain shareholdersof Plaintiffs' Shareholders Corporation ("PSC"), including, at present, Gene Badger,John Love, Marvin Evans, Sid Banack, and John Willis (collectively, the"Shareholders").

As set forth below, the Shareholders hereby demand that PSC, on behalf ofall of its shareholders, immediately bring an action in the United States DistrictCourt for the Middle District of Florida against Southern Farm Bureau LifeInsurance Corporation ("Southern Life's for federal securities fraud in violationof section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. § 781(b)), andRule 10b-5 (17 C.F.R. § 240. 10(b)(5)), and for common law fraud in connection withSouthern Life's purchase, on October 15, 2004, of PSC's debenture (the "Debenture")which was issued by Florida Farm Bureau Holding Corporation ("Florida Holding") toPSC pursuant to the Stipulation of Settlement and Agreement as approved in the FinalOrder and Judgment dated November 19, 1987 (the "Settlement"), in Winchester v.Florida Farm Bureau Equities, Inc., Case No. GCA 84-0148-MMP, p.3, 12 (Nov. 19,1987).

As you know, PSC is a Florida corporation that was formed as a result of theSettlement of Winchester, a lawsuit arising out of Southern Life's purchase of FloridaFarm Bureau Life Insurance Company ("Florida Life"), whose stock was held by FloridaFarm Bureau Equities, Inc. ("Equities").' Specifically, in 1984, the minorityshareholders of Equities filed a class action in Winchester, suing Equities' majorityshareholder, Florida Farm Bureau Federation ("Florida Farm Bureau"), Southern FarmBureau Life Insurance Company ("Southern Life"), a Mississippi life insurance andannuities company operating in a number of states including Florida, as well as Equities(collectively, the "Winchester Defendants") for alleged violations of federal and Floridasecurities laws arising from Southern Life's purchase of Florida Life from Equities. Id.

' Equities was a holding company which owned 100% of the stock in Florida Life.

Winchester Complaint ¶36.Bff ngeles New York Orlando Washington, DCCincinnati Cleveland Columbus Costa Mes IXHI

8

Case 6:06-cv-00630--KRS Document 56-10 Files/08/2008 Page 3 of 24Plaintiffs' Shareholders c. ,_JrationMay 11, 2006Page 2

Equities' minority shareholders alleged, in pertinent part, that the WinchesterDefendants violated federal and state securities laws by failing to disclose to theminority shareholders that Florida Farm Bureau, as the majority shareholder in Equities,in addition to the receipt of its pro rata share of the proceeds of the sale, was to receivethe right to purchase 10% of Southern Life's common stock for the sum of $80,000.The sale, as structured between Southern Life and Equities' majority shareholder,Florida Farm Bureau, did not give Equities' minority shareholders any interest inSouthern Life or an opportunity to purchase such an interest. Winchester Complaint ¶37. Instead, Florida Farm Bureau's wholly-owned holding company, Florida FarmBureau Holding Corporation ("Florida Holding"), purchased 10% of Southern Life'scommon stock, allowing Florida Farm Bureau to share ownership of Southern Life withnine other state farm bureau federations, in nine respective states. Id. ¶9.

The Winchester Defendants settled Winchester (the "Settlement") with Equities'minority shareholders in 1987. The Winchester Defendants agreed that Southern Lifewould pay Equities' minority shareholders $2 million and give them a 27.7% interest inFlorida Holding, itself a 10% owner of Southern Life. Winchester Stipulation ofSettlement ¶ 12. Due to Southern Life's unfounded and insupportable concerns over aparticular trust agreement (the "Trust Agreement"), to which Southern Life's ten farmbureau federation shareholders, including Florida Farm Bureau, are parties, FloridaHolding issued a convertible debenture (the "Debenture") to PSC rather than transfer27.7% of Florida Holding's stock in Southern Life or 27.7% of the stock in FloridaHolding. Pursuant to the terms of the Debenture, PSC became entitled to 27.7% of alldividends paid by Southern Life to Florida Holding, or 2.77% of all dividends distributedby Southern Life.2

The Debenture provides that PSC:

... shall be entitled to receive the same financial benefits it would receiveif it owned outright 27.7% of the capital stock of [Florida Holding].Accordingly, in the event Southern Life pays any cash dividend toholders of its stock , then in such event [PSC] shall be entitled to receivea payment hereunder of an amount equal to 27.7% of such dividendsreceived from [Florida Holding) on the shares of capital stock ofSouthern Life owned by [Florida Holding].

The Debenture, by its terms, automatically converts to 27.7% of the capitalstock of Florida Holding upon the earliest of: (1) the termination of the Trust; (2) theelimination or modification of the Trust Agreement provisions that restrict FloridaHolding's transfer of Southern Life stock; or (3) Southern Life's insolvency.

" The Debenture is not actually a debenture, or debt instrument, because immediatelyupon its issuance PSC became entitled to 27.7% of dividends paid by Southern Life toFlorida Holding, as if PSC were a shareholder of Florida Holding. Thus, while theDebenture would convert into 27.7% of Florida Holding's stock upon the termination ofthe Trust Agreement, PSC had all of the rights of a Florida Holding stockholder whenthe Debenture was issued.

Case 6:06-cv-0063 -KRS Document 56-10 Files/08/2008 Page 4 of 24Plaintiffs' Shareholders c..,,oration

May 11,Page 3

The Shareholders, suing derivatively on behalf of PSC, filed a state courtlawsuit separate and apart from the settled Winchester class action in April 2002. SeeBadger v. Southern Farm Bureau Life Ins. Co., No. C1002-3303 (Fla. 9th Cir. Ct. Apr. 5,2002) (hereinafter "Badger"). The gravamen of the complaint filed in Badger was thatSouthern Life was improperly relying on the Trust Agreement to justify its failure to payreasonable dividends to its shareholders, including Florida Holding, of which PSC is abeneficial 27.7% owner. In order to understand the claims in Badger, as well as thefraud claims that must now be filed against Southern Life, a brief discussion of the TrustAgreement is necessary.

Shortly after Southern Life's incorporation in 1946, the initial holding companiesand their respective farm bureau federations entered into the Trust Agreement. TheTrust Agreement was amended in 1972, 1973 and 1984 to include all of the currentholding companies and the respective farm bureau federations. The trust created underthe Trust Agreement (the "Trust") was intended to benefit the 20,000 original charterpolicy holders ("Charter Policy Holders") who bought an insurance policy ("CharterPolicy") offered by Southern Life on or before May 1, 1947. The Trust was designed toensure that the Charter Policy Holders would receive, at most, three times their grossannual premiums over each three-year period as a return on non-transferableparticipation certificates that were issued to the original 20,000 Charter Policy Holders(effectively reimbursing Charter Policy Holders for their annual premiums as the form ofthe return on their initial investment in a Charter Policy).

The Trust Agreement was intended to accomplish its purpose by requiring thatthe various holding companies transfer any Southern Life dividends in excess of$5,700.00 to a trust committee designated as the Southern Farm Bureau CharterCommittee ("Charter Committee"). The Charter Committee is responsible for makingthe distributive share payments to the Charter Policy Holders (which could not exceedthree times the premiums of their individual life insurance premiums over a three-yearperiod) and delivering any excess funds after those distributive share paymentsproportionally to each of the farm bureau federations to carry on general educationprograms. Thus, although the Trust Agreement did not limit the amount of dividends tobe paid by Southern Life, it placed restrictions on the use of those dividends once paidto the holding companies, including Florida Holding. Southern Life nonetheless hasmisinterpreted and misapplied the plain language of the Trust Agreement in maintainingthat it only permits Southern Life to pay a $5,700 annual dividend to its shareholders.

While Southern Life became increasingly profitable with each passing year after1947, the amount of funds necessary to cover its obligations to the Charter PolicyHolders naturally decreased. Badger Complaint 127. That is because each of the20,000 Charter Policies matures when its Charter Policy Holder reaches 85, or upondeath, whichever event occurs first. A Charter Policy Holder who was as young astwenty years of age at the time of signing a Charter Policy in 1947 would be seventy-eight years old today; accordingly, national life expectancy averages dictate that manyif not most (or all) Charter Policy Holders are no longer living.3 This reality coupled with

3 With this example, which assumed a very young age of twenty for a purchaser of aCharter Policy in 1947, his or her life expectancy, without regard to gender or race, was

Case 6: 06-cv-0063 4-KRS Document 56-10 Files/08/2008 Page 5 of 24Plaintiffs' Shareholders Cc, ,.orationMay 11, 2006Page 4

Southern Life's net worth in excess of one billion dollars ineluctably leads to a singleconclusion: the Trust Agreement has long since served its purpose and an extremely

small portion of Southern Life's net worth can be set aside, without maintaining theTrust, in order to protect the few surviving Charter Policy Holders and their contractualright to receive reimbursement for their annual premiums pursuant to their respectiveCharter Policies.

Thus, the Trust Agreement does not in the first instance impose a limitation onthe amount of reasonable dividends to be paid by Southern Life to its shareholdersincluding Florida Holding. Second, even if the Trust Agreement did impose such alimitation, which it does not, the incredibly large net worth of Southern Life has longsince removed any need for restricting dividends in order to maintain the relativelysmall trust res required to protect the contractual rights of the few (if any) survivingCharter Policy Holders. Nonetheless, Southern Life failed to disclose these materialfacts to PSC and to its shareholders in connection with its purchase of the Debenturefrom PSC, including in connection with the antecedent PSC shareholder vote whichwas necessary to approve that transaction. Accordingly, Southern Life committedfederal securities fraud in violation of section 10(b) of the Securities Exchange Act of1934 (15 U.S.C. § 78j(b)), and Rule 10(b)(5) (17 C.F.R. § 240.10(b)(5)), and commonlaw fraud.

Southern Life also misstated material facts by grossly understating the value ofthe Debenture, which PSC and a majority of its shareholders relied on in approving thesale of the Debenture (PSC by approving and consummating the sale and PSC'sshareholders by voting to approve the sale).4 Specifically, Southern Life knowinglyand significantly understated the value of the Debenture by more than $30 million, inpart, by discounting its present value pursuant to the erroneous position that the TrustAgreement imposes a limitation on the dividends that PSC would have received fromdistributions by Southern Life to Florida Holding between the date of purchase of theDebenture and the January 1, 2033, the latest date on which the Trust wouldautomatically terminate. See the valuation of the Debenture provided by Southern Lifethrough the actuarial firm of Towers Perrin Forster & Crosby, Inc. ("Valuation"), which isattached as Appendix A to the Proxy Statement for Special Meeting of Stockholders ofPSC and which is attached hereto as Exhibit "A." As set forth above, there is no basiswhatsoever for (1) Southern Life's position that the Trust Agreement imposes a

60.4 years, making the expected year of death no later than 1988, which was seventeenyears ago. For the many Charter Policy Holders who were older than twenty when theyobtained a Charter Policy in 1947, their expected years of death were prior to 198 8. SeeNat'l Vital Statistics Reports, Vol. 53, No. 6, Table 12, Nov. 10, 2004, available at theinternet web site of the National Center for Health Statistics, Centers for DiseaseControl and Prevention, U.S. Dep't of Health and Human Svcs., www.cdc.gov.4 Even those shareholders who did not vote to approve the sale of the Debenture wereinjured by Southern Life's fraudulent omissions and misrepresentations made inconnection with the sale because they were forced to exercise their appraisal rights. Allshareholders, regardless of whether they voted to approve or disapprove the sale of theDebenture, were forced, through the sale of PSC's sole asset, to accept a payment thatwas less than the full, true value of their respective shares.

Case 6: 06-cv-0063 A-KRS Document 56-10 File 5/08/2008 Page 6 of 24Plaintiffs' Shareholders Coi (,oration

May 11, 2006Page 5

limitation on its distribution of dividends or, (2) even if such a limitation did exist, forSouthern Life's perpetuation of the unnecessary Trust. Accordingly, Southern Lifemisstated material facts with respect to its valuation of the Debenture which constituteadditional acts of federal and state securities fraud.

More specifically, on September 29, 2004, PSC, through its president, RoyalFrench, sent a letter to Plaintiffs in their capacities as shareholders of PSC, statingPSC's intent to hold a special meeting of stockholders on October 15, 2004, for thepurpose of voting on Southern Life's offer to purchase the Debenture for $4.4 million.Since the Debenture constituted substantially all of the assets of PSC, a shareholdervote with majority approval was required by Florida statute to effectuate a sale of theDebenture to PSC. Accordingly, the letter enclosed a proxy statement ("ProxyStatement") and proxy form ("Proxy Form") soliciting Plaintiffs' individual votes on theproposed sale of the Debenture to Southern Life for $4.4 million. A true and correctcopy of Royal French's September 29, 2004 letter with the attached proxy statementand proxy form are attached hereto as Composite Exhibit "B." The Valuation wasincluded as Appendix A to the Proxy Statement

PSC, in recommending in the Proxy Statement that Plaintiffs vote to approvethe sale of the Debenture to Southern Life for the grossly understated and inadequateprice of $4.4 million, relied on the material omissions and misrepresentations providedby Southern Life in connection with the Valuation, which Valuation provided the basis ofPSC's own actuary's analysis regarding the Debenture, and which Valuation wasdistributed to the shareholders of PSC to seek their approval for the sale of theDebenture to Southern Life.

Thus, Southern Life's material omissions and misrepresentations in theValuation directly form the basis of the Proxy Statement provided to Plaintiffs. PSC'sshareholders relied on the Proxy Statement and the material omissions andmisrepresentations of Southern Life upon which the Proxy Statement was based,including the misrepresented value of the Debenture contained in the Valuation, invoting by a majority of shares to approve the sale of the Debenture to Southern Life for$4.4 million. The majority vote approving the sale of the Debenture to Southern Life for$4.4 million forced each and every shareholder of PSC either to accept his pro ratadistribution for the sale of the Debenture or to elect Florida statutory appraisal rightsand sell his PSC shares. Thus, even those PSC shareholders who dissented fromPSC's sale of the Debenture were forced to obtain their appraisal rights pursuant toSections 607.1301, .1333, Florida Statutes, and exchange their shares in PSC for "fairvalue."

Southern Life's material omissions and misrepresentations in connection with itspurchase of the Debenture, as specifically alleged above, forced each of the individualplaintiffs, as a PSC shareholder, to accept the pro rata distribution from the sale of theDebenture to Southern Life or to exercise appraisal rights and sell his or her shares inPSC. Thus, not only did Southern Life's fraud damage PSC through a grosslyinadequate sales price for the Debenture, but each and every one of PSC'sshareholders, regardless of whether they voted to approve the sale, were damaged byhaving to accept significantly less for their shares than their true value.

Case 6:06-cv-0063-KRS Document 56-10 Filed&/08/2008 Page 7 of 24Plaintiffs' Shareholders Col f,oration

May 11, 2006Page 6

For the reasons set forth above, the Shareholders hereby reiterate their demand

that PSC bring an action against Southern Life for its violations of federal and state

securities laws arising from Southern Life's purchase of the Debenture from PSC on

October 15, 2004. If PSC has not filed claims, within ninety (90) days of receipt of the

instant letter, against Southern Life in the United States District Court for the Middle

District of Florida, including claims of violations of section 10(b) of the Securities

Exchange Act of 1934 (15 U.S.C. § 78j(b)), violations of Rule 10(bX5) (17 C.F.R. §

240.10(b)(5)), and common law fraud, then the Shareholders will take all available legal

action including, without limitation, the filing of a derivative action against Southern Life

raising the claims described herein.

Sincerely,

Jerry R. Linscott

JRUsgj

Gene BadgerJohn LoveMarvin EvansSid BanackJohn Willis

Complete items 1, 2, and 3. Also completeitem 4 if Restricted Delivery is desired.Print your name and address on the reverse3o that we can return the card to you.4ttach this card to the back of the maiipiece,:)ion the front if space permits.

Addressed to:

aid of Directorsaintiffs' Shareholders'rporation

6 NW 13th Streetinesville, FL 32601

A. Signaturex(^ v

.- jXa q Addressee

B. R ad by ( Printed ) C. Date of Delivery

D. Is delivery address different from item 1? q Yes

If YES, enter delivery address below: q No

3. Service Type

]7 Certified Mail q Express Mail

q Registered q Return Receipt for Merchandiseq Insured Mail q C.O.D.

4. Restricted Delivery? (Extra Fee) q Yes

article Number

Transfer from service label) 7004 1160 0001 8328 7 9 1 8

Form 3811, February 2004 Domestic Return Receipt 102595-02-M-1540

Case 6:06-cv-0063*-KRS Document 56-10

1 10 't'd J S I 3I 3OH Z J 812"I .mid

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Z0'00 fO-91-AON PSAII IV

P8RRINT1U.INGHX*T

CONFIDENTIAL-ATTORNEY/CUEN1 PRIVILEGE

AtguM 23,2004.

Mr. Stephen M. WisonPhelps Dunbar, LLP.P.O Boot 230ad111 East Capital Slr..t, Suits 604Jadcson. MS OMS-3080

Deer Mr. 1Mso x

ANALYSIS OF CONVERTIBLE DEBENTURE. '

TjWTllHnghast business-of Towers, Perrs[f. Forster & Crosby, Ina ('TiIUnghast') wasengaged' by- Phelps Dunbar. L•.LLP ('Phelps Dunbar') to Perform Certain services Inconnection with legal advice that Phslps.Dunber has rendered and will render toSouthern Fern Bureau Ufe Inwrancs•Cornpany ('8FB7 related to.pending RUCanon(the autigstftnw) between SFB and Florida Farm Bureau Ho(dlnq Corporation. Plahr s•Shareholders Corporadon ('PSC7 and certain oiinoifty.sharaholders of PSC. The termsof our engagement are set out In a signed letter dated July 19, 2004.

Part of our assistance is In capon to analysis of the convertible debenture. This letter isorganized as follow=

n Background and scope •a Approachn Components of value of 8FBn Value of convertible 'debenturen Rellances and limitations.

'BACKGROUND AND SCOPE

A convertible debenture was issued by Floclda Farm Bureau Holding CorporationC'FFBHO to PSC. Upon conversion, PSC will own 27.7% of the common stock ofFFBHC1 which currently owns 10% of the common stock of SFB.

' Conversion ',of the debenture into eomnwn stock of FFBHC will occur upon the earliestof several dates; as set forth in the debenure. Termination of SFBs Charter Treaty Is

334 MedKm Jl.r^ !Nw Ycdr. WY 10017-4aioe $st 2U.1=24N Am 212X4. O75

AFFMIXAPage 1 of 10 EXHIBIT

Fi Ied*/08/2008

Case 6:06-cv-0063 A-KRS Document 56-10 File*/08/2008 Page 9 of 24L- 20:10 ti0-11-ACM pIAIS Sa

Mr. Stephen M. WilsonAugust 23,2004

MwinPop 2.

net likely to oocvr:f rs Theiarminadon daft, based on analysis done by:8F , Isexpected to occur in or about2033

Phelps Dunbar has asked Tillinghast to provide an analysis of the value of VWconvertible debenture as of July 1, 2004. This letter outlines our *mich and theresults of this analysis.

APPROACH

The value of the convertible debenture Is related 10 the expected l vale of SFe.As sucti, we considered the value of BFB. Our approach to asse sing the value of8F8Is basgd on estabfaheo actuarial appraisal value methodology In ft U.S. Themethodology we used is based on guidance provided In the Actuarial Standard ofPractice Number 10 ("ASop 1Y) titled "Aduacll Appr lsds,'.as developed by thActuarial Standards Board of the American Academy of Aituarlee. Our woos t inpreparing this letter has not considered the estimates of vale tlst may be producedfrom applying attemadve valuation methodologies or approaches..

In assessing the value of SF8, we considered the following components:

n a4justedi t wordy: which is st autory eapital and aurpius with certain ac u nerds

a in-force business, whkh'is the value of projected after-tax story earningsexpec ted' oo emerge from in-tbres policies and cordructs

n new business, which is the value of projected attar-tax statutory earnings expectedto emerge from polldes and contracts expected to be Issued In the 1fiuro

. cost of capital, which represents the Impact of holding a target level of capital andsurplus in support of the Inrbrce and new business.

We projected each of these components to the end of 2033 to detem ne an e. ate ofthe futum value of SFB at the time the debenture Iswed to convert Our projectionassumes an earned rate on the free surplus that is based on •a single interest scenariodeveloped from the December 31, 2003 yield curve for U.S. Treasury constant

The estimated value of the convertible debenture in 2033 Is calculated as 2.77% oftheas*mated 2033 value of SFB. The 2.77% factor to deter rained by multiplying FFBHCsownership share of SFB-and PSC's owner hip share of FFBHC; that Is, 10% multipliedby 27.7%, or 2.77%. To determine the present value of the convertible debenture as of

CONFIDENTIAL- ATTORNEYICUt^N T PRMLEGE

4T" F" YVid MOT 100Z/4T/TT

Case 6:06-cv-00637*KRS Document 56-10

010 828d JsI311!0H ! J9129-01

Mr. Stephen M. WISM

FiledSP8/2008

-0101 j

Page 10 of 24

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August 23,2M Towpop 3' TILL

.July 7, X004. we discounted the•resutlkng e,Umote• of the value of the oonvsrtlbidebentwe at the and of 203$ to July 1, 2004 at an asswmd t d soount rule.

COMPONENTS OF VAIJ* OF.sFs

For purposes of assesstna the value of SFa, we segmented 8FB's bus ss Into lhrssbike: .. • .

n aft Insurance, irndudin team, paAdpsttn9trad1Nond1lia. universal qh and variableHf.

n uitJes. h,dud deft rred .annulties, both tb d'end variable , and payouta inuhfts, both hnrn late end urod .sWe nests

a other business, Including grdup if., group loner disability, individual cum MVand long term Cats.

We used December 31, 2003 forthe 'as or date ofmr Initial data gathering and settingup of the proje dton models for calculation ease and because Wom afbn from thecompany was more readily avalisbls as of this data. Vye then projeded this value, asdescribed below, to derive the Sslimated value of BFB as of 2033. The follovwing itemswere considered In developing this estimate of flrb re value:

a adjusted net worthn in-forces businessa new business

cost of capttat and target surplus..a flN, sutp*s

n earned rate on free surplw.

Adjusted Net Worth

Initially, the adjusted .net worth . Is equal to the statutory capital and surplus of 8FB as ofDecember-31, 2003, plus certain adjustments . Adjustments Indude the required .statutory liability for asset default (the asset valuation reserve or'AVR7. an adjustmentfor deferred tax assets not valued elsewhere, an assigned value to certain assets thatare non-admitted under statutory acocxmdrg rules. and an after-tax market valueadjustment for assets as3urned to be liquidated at ins valuation date.

Going ibrww d, adjusted net worth is equal to. the sum of the *e surplus and the targetsurplus, as described further below.

CONFIDENTIAL--ATTORNEY/CUENT PRJVILEGE

xv.I TO:OT 4002/9T/TT

Case 6:06-cv-006370-KRS Document 56-10 Filedo/08/2008 Page 11 of 24OZO and uluas_r a 11112A-a1 E0:10 po-gI-ACN P.A1e29N

Mr. Stephen M. WilsonMoat 23, 2004Pape 4.

In-Fons Business

;1117ATIUJH WAST

Distributable earnings for the In-force business were determined lbr a gNen yew basedon the projected ~tax statutory book profts In that year adjusted for the ahanpe intarget surplus assodatrd with the in-force business (as described further b.low.under'Cost of Capital and Target Sutpiuo).

Projections of aftertau statutory book praMa wwo developed from assetmabmty models.BFB developed ability models of its to-force l and annuity buatnsss p ofDecember 31, 2003 using TAB TiVfighast Actuacial S0Rwaf& (7A6 for purposes ofcash flow testing. W retied on SFB's models to form the basis of the models used topr4404 future sxpa A Profits for the value of In-lam business. We reviewed BFB'smodels, representative model points and assumptions for general reasonableness andcorn pieteness, 'focus" On the ghost signiDcw vt products wMilln each Ins of business.We made modlficatlons and adjustments to tha models, aswe deemed approprivts.

Future profits tot certain other products wavers modeled using lllltnghest's proprietaryspreadsheet Habiilty models representing the business in-force as of December 31,2003.

Future profits were prajacted for 30 yenta for ell Ines; of businewTarge! surplus wasreleased at the end of the projection period. Any ffuturo profits beyond 30 years weredeemed to be Immaterial, as most of the business has a k.d by this time.

New Business

Distributable earnings for the new business expected to be written in 2004 through 2013were determined for a given year bused an in projected aR twx statutory book proflesin that year adjusted for the ctuar ige In target surplus assodated with the now business(as described further below under 'Cost of Capital and Target Surplus"). consistent withtypical practice for developing actuarial appraisals, the projections assume ten years ofnew issues.

Statutory book profits for new business were projected using models representingexpected future asset and nabifity portfolios of modeled business. Us models used aresimilar to those used for In-force projections except that assumptions regarding Mum,production amounts and acquisition expenses are also required.

Now business product mix and average policy she are based on SFB's actual productmix in the first halt of 2004. Distribution of issue ages, risk dam gender and premhimmods are based on actual new business Issued in 2003. Production amounts for 2004are based on actual production in the first half of 2004 and projected production for the

CONFIDENTIAL-r-ATTORNEYICU ENT PRIVILEGE

TVd TO: O T 1002/QT/TT

Case 6:06-cv-00637S-KRS Document 56-10

^r

IZ0 Red J11114soM I JrnieI.Oi

Mr. Stephen M. WilsonAugust 23, 2004Page a.

FiledID/08/2008 Page 12 of 24

-10o^d I0;00 f0-91-ADN p$AgIosa

;TWINIATILLINSHAwr

-second half of 2M.- 146w business produWon tereaftsc Is based on W0ected tndu*yaverage growth talSing into aooouait shed aractedstlcs of SFB's bus ss. Otherassumptions Mr Items auct a 'MottalKy, lap - expenses. aba were se! oonssatsnt wtlhthe aswmptk^ns used forpipIn-fora business wlth•appropdots

The value of new business is based on a single Weitst scenario developed from tDecember 31, 2003 yield djrve !br U.L. Tresetsy constantmkswith a**8bnW*for interest rats risk for interest sensltM shnuhy business.

Future profits for each your of Issue of new business were projected for 30 yearns fordlines of buskms. Target surplus was released at the end of projection period. AnyMora prollts beyond 30 years from the date of Issue were deemed to be Inrnat el asmost of the business has expired by this time.

Cost of Capital and Tarprt Surplus

Cost of capital has been calculated under the assumption that required capital or -targetsurplus' is held at a level eppru dmatsty equal to 200% of the NAIC Company ActionLevel Risk-Based Capital ('RBC7 for the' in-force and new business.

Thp amble earn s developed for the In-force business and new business arebased on to mssumptton that insurance companies wad retain a certain level of statutorycapital and surplus to support ongoing operations and maintain fa voreble*r*9ufat iy andrating agency treatment. Sikh retained capital and surplus Is referred to as the "targetsurplus"' In this haw. To the extent that the after-tax yield on assets suppo'surplus Is less than the risk discount rates used to calculate the values of h-forcebus ness and new business, there to a cost associated with holding target surplus.Throughout this letter, such coat Is referred to as the `cost of capita R

Free Surplus

The tree surpiua.ropresenha the amount of surplus hold by the company In excess oftarget surplus. initially, free surplus is equal to the excess of adjusted net worth over theInitial target surplus. In future years, the tree surplus at the end of the year is equal to(a) the free surplus at the beginning of the year, pitis (b) Interest earnings on 1heesurplus, plus (b) distributable earrings for the yearfrom both in-fbrce business and newbusiness.

Earned Ptaft on Free Surplus

To project the value of SPO at 'ths'end of 2033, free surplus Is-accumulated to reflect theinvestment earnings expected to be earned on this arnbunt.. Our projection assumes an

CONFIDENTIAL.--ATTORNEY/CLIENT PRMLEGE

rvr TG: 0T boot/9T/Tr

Case 6:06-cv-00637-*KRS Document 56-10

(. .

ZZO •JMd

.Mr. Stephen M. WlsonAugust 23,2004Peg. a.

Filed S08/2008 Page 13 of 24

-mid ZQ : $Q f0-21-ACM P@AIS3y

Pg*1i1 ATIWNSNAsr

earned rate on-the free surplus that is based on a single Interest scenario developedfrom the June 30.2004 yield curve .tor UAL Tmasury constantimatu,itss. T e ownedrate on lira surplus Is assurned to be 1.82%: It was determined as the dsk free rate pkWa credit spread tees a provision for defaults. The risk free rate is 4.17%, which is theannual effective 10-year U.S. Treasury rate to of Jpme 30,2004. The asmwnod c editspread is 95 basis points ("bps':). which is consistent with an A rated corporate bond andSFE's Af rating. Defaults are 1o bps, which Is consistent with expected def dt rates foran,A rated bond. The invastrnent so,A gs were adjusted to an aftor4m bests based anan assumed marginal tax rats of 35%.

Esthnated valve of *F13 In 2M

The estimated value of SFB In 2033 was determined as the sum of fa) On *so surplusat the end of 2033, (b) the target surplus at 1he end of 2033. (a) the present vah,m of theremaining In-dome and now business as of the end of 2033, discounted at anappropriate risk di scount rate. Risk dlscaoivit rates are discussed below in the sectiontilled Value of Convertible Debentures'

VALUEOF CONVERTIBLE DEBEN URB

As. noted above, t estimated value of the convertible debenture In 20331s calculatedas2.77% of the estimated 2033 vale of BFB. To determine the present value of theconvertible debenture as of July 1, 2004,we discounted the resulting ate of ttisvalue ofthe convertible debenture at the end of2033 to July -1: 2004 at an assumed riskdiscount rate.

The Ask discount rate CRDR') is used to develop the pr sent value of the convertibledebenture based on the projected value of the convertible debenture In 2033. Inconsidering the appropriate RDR to use for this purpose, we first cons rad areasonable RDR to use for a sale of a company K that sate occurred today and thenadjusted this rate Author for cirrcumstances specs to to this situation.

We developed the RORs, to part based an guidance provided in ASoP 19. In ASoP 19.it states that the RDR should induide an risk-frea return that compensates the Investorfor the use of the funds (recognizing anticipated Inflation so as to maintain the real voids-of those funds), plus a risk premium above the risk-N+ee rate that compete theinvestor for the risk that actual returns will deviate from expected. The size of the riskpremium varies with the degree of risk associated with the returns

in developing appraisal values, ft is common industry, practice to present a range ofvalues based on a range of RDRs. For SFB, a range of risk discount rates we would usefor an assumed sale of the company today would be 0.0%. 2.5% and 11.0%. This range

CONFIDENTIAL---ATTORNEY/CLIENT PRIVILEGE

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Mr. Stephen M. WilsonAugust 23, 2004Page 7.

of discount rates is representative of rates of return commonly used in seuarlalappraisal values in the U.8. insurance Industry In todas economic envle+onmeryt. Thesediscount rates WUusirat the efiecis on value of varying Investor expectations andrepr+tlseot returns tndusivs of inflation. With regard b tscxnt is ce transaetions,then has been a signMoant disparity be w en buyer and seller expectations in rwcsntyeas, with buyers often targaung a 12% or higher return, whits setters are dolor to 0%.As such, it is unlikely that SFB could, scuts a sate of the company today based on anROR of less than 11%.

The ROR used to value the convertible debenture reflects certain adjustments fordrwcumstanae specifsc to this si uation. Adjustments are needed for the folowarW (1)t e Equidity of the debenture, (2)'rastrictions on transfer of stock In FFBHO and BPS forover 30 years, (3) restrictions on dividends from SF6 retained by FFBHC, (4) theminority Interest of the debenture in FFBHC, and (5) the minority Interest of FFBHC toSFB. The Inability to access value through the debenture over such a long period,can toed with the Inability to control SFE s actions creates a tremendous opportunitycost and causes a• significant degree of uncertainty and risk in terns of the a idreturns. As such, we believe that the resulting RDR should be well above an 13% ratsthat mlgM be aappropriate for an assumed sale of the company today. Based on thesefactots,ws have chosen RORs of 12%1 14% and 18% to illustrate for this purpose.

The values in this letter were determined in accordance with our. estimates of what webelieve to he the most probable future experience ofM. The table below presents theresult. of our analysis of the value of the convertible debenture today at discount ratesof 12%, .14% and 18%.

TA1LE 4

Estimates of Value of Convertible Debenture as of July 1 , 2004 (i minions)

Risk Dfsoount Rate

12%

V is of Convey"Deb* Sue $6.0

14% 1d%

>X3^ $2A

You have asked us to provide you with a single estimate of the value of the convertibledebenture. The single estimate we have chosen is based on Table I at the centraldiscount rate of 14%, which is $3.3 million. Mshibit 1. attached to this letter, providesfurther details of this calculation.

CONFIDENTIAL--ATTORNEY/CUENT PRIVILEGE

Case 6:06-cv-006370-KRS Document 56-10

M tad 1914.,_,r + JEE18-ol

Mr. Stephen M. WhorlAugust 23, 2004Page 8.

RELIANCE! AND LIMITATIONS

Filec /08/2008 Page 15 of 24-O

ao=eo to-91-Aoi1 P,A11511

PUR ERRSTI L.UPtQPIAST

In preparing this analysis and developing this letter, Tillinghast relied upon data andinformation supplied by Phelps Dunbar and BM In writing and in discussions,Tillinghast has not reviewed this data for acCursq, but has considered It for generalreasonableness and consistency with our knowledge of the insurance industry. We tookinto account previous workwe have done for SF8 as well as the specuic details of theconvertible debenture, PBCs Interest in FFEHC and'FFBHC's interest M OF% ssmined in on background materials that were provided to us.

In accordance with the letter ofengagement dated July Ili, 2004, this letter and theopinions and conclusions contained herein are for the Internal use of Phelps Dunbar,we and other experts In connectIon with the LWgadon. Y also understand you will beproviding a copy Th1s slier to P$G.

TgUnghast has performed the work assigned 'and has. prepared this-letter in conformitywith its intended utilization by a person(s)' tedhnically competent in- the areas addressedand for the stated purposes ony. Judgments as to ft data contained in the letterahoM, be made only alter studyJng the le~ (Mdudin0 attachments) In Its entirety.Furthemwre, members of the Tit hest staff are available to explain and/or amplify anymatters presented herein. and it is assumed that the user of this letter will seek suchsxpiariadon and/or amplificaltioh w1o any n^atber•in question:.

Although we have' developed model projections in conformity with what we believe to bethe current and proposed operating environments and the "Most probable" AAM.experience within such environments, it should be recognized that actual fisture resultswill vary from those projected. Deviations in the parameters used to rafec t theenvironment could e1ter the projected results substantially. These parameters eludereinsurance practices. management direction. Insurance regulations, accountingprat aces, federal and local taxation, and external economto factors such as Inflationrates and available investment yields. Finally, deviations from "most probabtd`experience are normal and are to be expected. Even without any change In perceivedenvironments, and in parameters used to reflect them, actual results from year-to-yearwill vary from those projected because of normal random fluctuations.

CONFIDEIMAL-- A7TCRNEYJCLIENT PRIVILEGE

TfL1 •lA!AT •AA7/CT/TT

Case 6:06-cv-00637-*KRS Document 56-10 Filed 38/2008 Page 16 of 24

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PLAINTIFFS' SHAREHOLDERS CORPORATION5700 SOUTHWEST 34 STREET

GAINESVILLE FL 32608PHi 35=74-11M,FAX: 352/374-1501

September 29, 2004

Dear Stockholder:

We are pleased to enclose a notice of a special stockholders ' meeting of Plaintiffs' ShareholderCorporation ( PSC'y) to be held at 5700 Southwest 34 Street, GainesvillFlorida at 10:00 AM onFriday, October 15. 2004. The purpose of this meeting will be (1) to consider approval of the sale ofPSC's Convertible Debenture to Southern Form Bureau Life Insurance Company and (2) to transact suchother business as mrany properly come before the meeting.

The Convertible Debenture constitutes substantially all of the property of PSC. I'SC has concluded thatshareholders are entitled to assert appraisal rights pursuant to Sections 607.1301 through 607.1333Florida Statutes (2003), a copy of which accompanies this note. Pursuant to these statutes, if the sale ofthe Convertible Debenture is effected , shareholders dissenting thereflom are entitled, If they comply withthe provisions of Sac . 607.1301-607.1333. FLA. STAT. (2003), to be paid the fair value of their shares.

We urge you to review the enclosed Proxy Statement and to complete and return the enclosed proxy evenIf you plan to attend the meeting. Sending us your proxy will not prevent you from voting in person at'the meeting, should you wish to do so. If you have any questions concerning PSC, please do not hesitateto contact us at the numbers set forth above.

Sincerelys

plaintiffs, Cotpotagod

ym .^e

EXHIRIT

B

Case 6:06-cv-006370-KRS Document 56-10Z00 and i9149130ti Aole9-01 Fit ,08120Q0.0 R II of

PROXY STATEMENTFOR

SPECIAL MEETING OF STOCKHOLDERSOF

PLAINTIFFS' SHAR19HOLDERS CORPORATION• 5700 SW34 STREET -

GAINESVLI LE, FLORIDA 32608TO BE HELD AT 1,0:00 AMON FRIDAY, OCTOBER 15, 2004

To Stockholders of Plaintiffs' Shareholders Corporation:

Plaintiff' Shareholders Corporation (the "Corporation" or 'PSG"") is a Florida corporationchartered on April 26, 1995. As set forth. in Its Arliclec of Incorporation, the Corporation is a limitedpurpose corporation organized for the exclusive purpose of owning, administering, transferrls,8 andselling the Convertible Debenture (the "Debenture") issued by Florida Farm Bureau Holding Corporatio("Florida Holding") pursuant to the Stipulation of Settlement and Agreement as approved in the FinalOrder and Judgment dated November 19, 1987, (the "Settlement") in Winchester, at at,•vs FloridaTicsBureau Equities,. be., et aL. Case Number GCA 84-014SMMP, United States District Court for theNorthern District of Florida, Gainesville Division ; (the "Court") or 4urrendering, the Debenture flex'conversion into common caliital stock of Florida I olditig, and'to issue,sbares'of tha& Corporation's NoPar Value Common Stock 'representing piopordonatri interests in the.Cotporalion to the.menibir ofd( eplaintiff 04Wor to their heirs, administrators, executorsi, successors'oi assigns (the;•"C1ess.Members") insaid case, as provided in the Settlement

• The Board of Directors. of the Corporation has called a special meeting of the stockholders -to befield on October 15, 2004 at 10:00. AM at the-Corporation's office located at 5700 Southwest 34th Street,Gainesville, Florida 32608. 'Aa•.stated •in=•thi,notice of the-stockholders' 'meeting.the purpose of'themeeting is to consider approval •of the sale of -the• Debenture to. Southern— Farm • Bureau L.if* IriaurenoeCompany'("Southem• Life") for a.total consideration of $4,460.066 -to be. paid $3,330,008' in= aaA at.closing and-by the execution of a promissory note in the principal amount of $1,100,000 bearing imerestat t i prime fate reported by the Will Street Jourfla1 on the date of diosing.: The safe of the DebentureIniust. be 'approved by' a• majority, of tho' outstanding shares ofof the Ccsrporation, or a total df 124,719common shares. If approved by the'Corporation's sharehdlders, closing will.pccur.on October 15,1004.The Corporation will be subject to federal and state tax on the gain realized from the sale,' The amebatand timing ofdistributions to shareholders will be determined by the Board of Directors approximately 30days following closing.

Frequently Asked Questions Regarding the Corporation

The Corporation Is a limited purpose holding corporation with no business operations of ats own.Its sole assets are cash ($29,286.01 as of August 31, 2004) and the Debenture. .. '

1. How did this all come about?

This resulted from a 1987 settlement of a Federal Court lawsuit which followed the sale ofFlorida Farm Bureau Life Insurance Company (owned by Florida Farm Bureau Equities, Inc.) to SouthernFarm Bureau Life Insurance Company. As a part of the settlement of that suit, Florida Farm BureauHolding Corporation (a company which was set up to hold Florida Farm Bureau Federation's 10% ofSouthern Farm Bureau Life Insurance Company) issued to the Class Plaintiffs a convertible debenture.The debenture is convertible at the expiration of the Charter Treaty among the various state Farm Bureauswhich own stock in Southern Farm Bureau Life Insurance Company. At the time of conversion, which is

-^- • --^ LaspZ:O6-cv-006376-"pCR'S ' Document 56-10 Fileci /08/2008 Page 20 of 24

actuarially calcuiateil to be approximately 2033, the debenture will be exchanged for 27 7"/% of the shares

of stock of Florida Farm 1 ureau Ilolding Corporation. This percentage cormaponds with the prior

ownership of the i'tass Plaintiffs in Florida Farm Bureau tquitiua, Inc.

2. Why %,%as I'Ihti»tiffs' Shareholders Corporation ("PSC.") set up?

Thu 1987 s4ttlc'nent called for the debenture to be issued to a corporation or similar legalmechanism to nuinape• and hold the debenture and so that the Class l'laintifs had evidcnei, of theirownership interest and it means to record and transfer their interest. PSC wait established in 1995 and

shares issued in V)')61iir this purpose.

3. Why s isrt't this Corporation aft up in 1987?

Apparently %he attorney for the ('lass Plaintiffs was unable to locate a suitable transfer amt ortrustee. In 19')4 he asked the Florida Farm i;urau Federation, a co-defendant in the original litigation, toconsider assuming r4sponsibility for the Class 1'laintifi'records as the Class Plaintiffs had originally beenFarm Bureau memnhcrs, and he was having difficulty keeping addruascsr current. Floilda l:arm BureauFederation to „+aume this directly but was instrumental in forming l'SC to pertvrin this service.

4. How was '*ock ownership calculated? How many shareholders are there?

Stock owner,d ip was calculated according to stock ownership of the Class ('l:tintiffs in the AllFlorida Farm Rum-au Equities. Inc. 'There are 249,437 shares of l'SC stock outxtunding . There wereinitially approxnnaluly 882 shareholders , the same as in the old Equities

The Prnpnsed Debenture Sale

On August 24. 2004, Southern T.ite offered to purchase the Corporation's Convertible Debenturefor a total purchase price of $3,300,000 to he paid $2,500,000 in cash at closing, which was to occur on orbefore October 8. 2604. The balance of the purchase price was to be paid by A pnnni:Moiy note in theamount of $800,000 to he paid within one year of execution. Accompanying Southeast 1 fife's o1Tor was anAnalysis of Convertible Debenture dated August 23, 2004, provided by Towers Perrin Forster dk Crosby,Inc. ("Tillinghast") Phelps Dunbar, I.I.P. counsel to Southern Life (the "Tillinghast letter"), a copy of,which is attached hereto as Appendix A. The Tillinghast Letter stated that the Convertible: Debenture hada value within the range of $2,000,000 to $5,600,000 based on discount rates ranging from 16% to 12%,and concluded that the value of the debenture was $3,300,000.

'1'hc (:orimrstion then retained the services of Harold Q. Ingraham, Jr. to review the TillinghastLetter. On Septeinhur 22, 2004, Mr. Ingraham rendered his opinion to Brashear & Ast.rc.. P.L., counselin the Corporation (the "Ingraham i.etter"), a copy of which is attached herein as Appendix 13. TheIngraham Letter concluded that the estimated value of the Debenture was dependent upon the discountrate chosen. Ingraham concluded that discount rate ranges from 12% to 14% and 11% to 14% wereequally rcasomuil'le as the discount rate range of 12% to 16% used in the Tillinghast letter. Use of the12% to 14% anal I I % to 14% ranges resulted in values of $4,300,000 and $4,900.0000, respectively.

On the hu+sis o Mr. Ingraham's opinion, the hoard on September 22, 2004. countered SouthernLife's offer with an nt'Icr fir an all-cash sale of the Convertible Debenture for $4,400,000. On September23, 2004. Southern L ife counter-offered with a purchase pries of $4,400,000 to he paid $3,300,000 incash and $1, 100.000 by the execution of a promissory note to be paid in not more than two years from thedate of execution bdnring interest at the prime rate as reported by the Wall Street Journal ns of the data ofclosing. On September 27. 2004, the Hoard accepted Southurn Life's eountur. ,1k:r subjcei to theapproval of the Corpooration's shareholders.

Received Oct-05-2004 14:22 Pros- To-Baker Hostetler Page 003

Case 6:06-cv-003F^ anoent 56-10 Fileto/08/2008 Page 21 of 24 -'-pct-cif-U•^ vl :sir r+ r

The Corporation ' s Hoard of Directors is recommending approval of the yule of Corporation'sConvertible Debenture for the following reasons:

• The Convertible Debenture and common stock in Florida Firm Bureau Holding Corporation

("Florida Holding") are highly illiquid. The Corporation's Convertible Debenture is unique. It isconvertible into 27.7% of the shares of stock in Florida Holding at a date which is actuariallycalculated to he approximately 2033. 'if the Convertible Debenture is not sukl, it will remain theCorporation s sole asset until 2033. Following the date of conversion, the Corporation would thenhold shares in Florida Iloiding, which itself owns a minority interest in Southern Farm Bureau Lifeinsurance Company ("Southern Lite"). There is no public market for the Convertible Debenture,Florida Holding's stock or the Southern Life's stock. The Corporation has not received any otheroffer to purchase the Convertible Debenture since its inception in 1995.

• The purchase price is reasonable. The purchase price is within the ranttes, of estimated valueestabli:thed both by the Tillinghast Letter and the Ingraham Letter.

• The Corporation is operating at a deficit and will continue to do so for the foreseeable futpmThe Corporation' s income is derived from its share of the annual dividend paid by Southern Lifo toFlorida Holding and interest income. Income to the Corporation was $2,805.42 in 2002, and$2,079.72 iii 2003. The Corporation' s expenses in 2002 were $11 .612.71 and $10,033.62 in 2003.At the prsuit rate of expense and income, the Corporation cannot continue it, operate for many moreyears. '1'Ite current financial statements for the Corporation for the period from January 1, 2004through August 31. 2004, an: attached hereto its Appendix C.

Rights of Disseeting Stockhollders

Stockholders who do not vote in' favor of the proposed Debenture sale and who follow certainother procedures summarized below have the right to dissent tom. and obtain payment few, tlseir shares inthe event of the consummation of the. proposed Debenture sale ("dissenter's rights" or "appraisal rights").The following is a summary of the provisions of the Florida Business Corporation Act that specify theprocedures to be followed by any stockholder who wishes to dissent and demand payment for his sbaresin the event of consummation of the proposed Debenture sale. Ccdain provisions of the Florida HusinarCorporation Act regarding rights of dissenting stockholders are set forth in their entirety in Appendix Dattached to this proxy statement, and this summary is qualified by reference to these provisicros.

We have furnished to- stockholders in this proxy statement information with respect to theproposed 1)cbcnturu sale in order to enable a stockholder to evaluate the proposal and to determinewhether or not to exercise dissenter's rights. A stockholder may assert these rights only if (a) thestockholder dulivcrs to the Corporation, before the vote is taken at the stockholders' meeting. a writtendemand for payment for his shares in the event the proposed Debenture sale is consummated, and (b) thestockholder does not vote in favor of the proposed Debenture sale. If a stockholder votes in favor of theproposed Debenture sale, the stockholder will not be entitled to dissent and demand payment for thestockholder's shares, and a dissenting vote on the proposed Debenture sale will not satisfy the aboverequirement that a written demand for payment be delivered to the Corporation. if the proposedDebenture sale is not approved by the holders of a majority of the outstanding shares of the Corporation,no dissenter's rights will arise.

Within 10 days after approval of the proposed Debenture sale at the succ;kholders ' meeting, thvCorporation shall give written notice of such consent or adoption of the proposed Debenture sale to eachstockholder who filed notice of intent to demand payment for his shares, except any who voted for theproposed action. Within 20 days after giving notice to such stockholder, any stocl.holder who elects todissent shall file with the Corporation a notice of such election and demand for payment of the fair value

Received Oct-05-2004 14:22 From- To-Baker i Hostetler Pass 004

)mot-05,- o asaf)m -06631 ,-KF - -DoCUment 56- 10 File 08/2008 Page 22 of 24

of his shares. Any stockholder failing to file such election to dissent within the 20-day period shall be

bound by the icn»s or the proposed Debenture sale. Any stockholder filing an election to dis;Rent shall

deposit the si(wkliolder's ecrtificate(s) with the Corporation Yimultaneously with the filing of the election

to dissent. Upon riling a notice of election to dissent, the stockholder shall thereafter he entitled only to

payment;, and shall no' be entitled to vote or exercise any other rights as a stockholder of the Corporation.

Within 10 days after the expiration of the period in which stockholders may tilt their notices of

election to dissent, or within 10. days after such Debenture sale is effective, whichever i. later (but in no

case later than 90 dhy% from the date of the stockholders' meeting), the Corporation ,hall make a written

offer to each dissenting sharcholder who made demand to pay an amount the Corporation estimates to be

the fair value of xuvh shares. It within 30 clays after making of such offer any slcx:kholder ace" the

offer. payment of his 'shares shall be made within 90 days after making of such offer or the eunaeammMioh

of the proposed Debenture sale. whichever is later. Upon payment of the agreed .nl:tc. the dissentingstockholder will uussc to have any interest in such shares.

If the C'urptwation fails t~) make such offer within the period specified or if it makes rho af't'er andany dissenting shareholder fails to accept the ofY'ur within the period of 30 days ihureafcsr, that theCorporation, within 3l) days of receipt of written demand from dissenting stockholder given within 60days after the elate on which such proposed Debenture sale was effected, shall, or at its ekc*ion at anytime within such period cif d0 days may, file an action in any court of competent Jurisdlctiun in the countyof Florida wherc the Corporation maintains a registered office requesting that the fair salue of couch sharesbe determined. 'lire court shall also determine whether each dissenting stockholder, its to whom theCorporation requests the court to make such determination, is entitled to receive payment for his shares. ifthe Corporation tails to institute the proceedings. any dissenting shareholder may do sou tit the name of theCorporation. All di •ntinq stockholders (whether at not residents of Florida), artier than stuekholdurswho have agreed with the Ctwrpan dcrn no to the value of the shares, shall be made pas-ties to theproceeding as an action against the shares.

The court may. if it so elects, appoint one or more persons as appraisers to rec.rive evidence andrecommend a decision on the question of fair value. The Corporation shall pay each dissentingstockholder the amount found to be due within 10 days after final determination of the proceedings. Uponpayment of the judg,nent, the dissenting stockholder shall cease to have any interest in such shares.Judgment may. at the discrutinn of the court, include a fair rate of intereal, to be determined by the court.

The court will determine all costs of the proceedings, including the reasonable Compasssatlon andexpenses of the Appraisers appointed by the court, and shall assess such costs against the Corporationunless the court finds some or all of such shareholders acted arbitrarily, vexatiously or not in good faithwith respect to the appraisal rights. The court may also assess the fees and expenses of oounsuI andexperts for the rc:cpuclive parties, in amounts'the court finds equitable: (a) against the Corporation if thecourt rinds it did not substantially comply with Sec. 607.1320 and 607.1322 FtA.S't'n't.; or (h) againsteither the Corporation or-the shareholder(s) demanding appraisal, in favor of any other party if the courtfinds that the patty against who the fees are assessed acted arbitrarily, vexatiously or not in good faithwith respect to appraisal rights. If the court in an appraisal proceeding finds that the services of counselfor any shareholder Kerr of substantial benefit W other shareholders similarly situated. and that the fees,for those services should not be assessed against the Corporation, the court may award to such counselreasonable fees to bd paid out of the amounts awarded the shareholders who were buncMud.

Stockholders of record on September 29, 2004, are entitled to vote at the meeting. TheCorporation has outstanding 249,437 shares of its Common Stock. Stockholders are entitled to one votefor each share owned.

Marutgemeni hereby solicits your proxy if you are not able to attend the electing. You are urgedto sign and return the enclosed proxy promptly in the enclosed self-addressed, postage-paid envelope.

Received Oct-05-2004 14:22 From- To-Baker i Hostetler Pale 006

t-o6-oa ke. +Qf)-CV- RSa-=Dbcument 56-10 File /08/2008 Page 23 of 24

Sale of the Debenturc must be approved by a majority of the outstanding shares of the Corporation or124,719 common shares. If you have any questions, please contact the Corporation at 352-374-1504, oritS Directors at the following telephone numbers:

Royal French 352-528-4491George James 352-588-2266Far[ Ference 352-332-1072Kay Richardson 352-591.1888

Shares, represented by your proxy will be voted as you direct Management recommends a votefor the above proposal, and. if no choice is specified, shares will be voted for such proposal. For othermanors that may property come before the meeting, the shares will be voted in the discretion of theproxies.

Thank yvu In advance foryaw an

very trvMy,

September 20, 2004

Received Oct-05-2004 14:22 From- To-Baker t Hostetler Pus 0 06

Case 6:06-cv-006304-KRS Document 56-10 File*/08/2008 Page 24 of 24

£00 Band J9119430H I Jsê9-ol t0:00 to-91-AON P9A I90ad

PLA3.N'T "S' SHAREHOLDERS CORPORATION

PROXY

The undersigned hereby appoints, as proxdcs, Royal French, George Tamer, Earl Fere=e, KayRichardson and Donald Nelson to vote, as designated hereon, all shares which the undersigned would beentitled to vote at the meeting of the stockholders of Plaintiffs' Shareho1dm Corporation (the"Corporation") to be held at Gainesville, Florida on Friday, October 15, 2004, or at any adjovmmeontsthereof Action hereunder may be taken by a majority of said proxies who are present or, if only one bepresent. by that one.

1. Approval of the We of the Corporation's Convertible Debenture to Southern Farm Bureau LifeInsurance Company for a total purchase price of$4,400,000:

FOX AGAINST WITHHOLD-

SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS D CIÈD HEREON.MANAGESRECOMMENDS A VOTE "FOR" TEE ABOVE PROPOSAL. IF NO CHOICEIS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" THE ABOVE PROPOSAL.

The undersigned further authorizes said promes to vote such shares upon such other business asmay properly come before the meeting in the discretion of said proxies.

The undersigned acknowledges receipt of the Notice of the Meeting of Stockholders, and theProxy Statement, each dated September 29, 2004.

TMS day of . 2004.

PLAS COM 5288 P30160 STOCKHOLDER SIGNATUREEUGENE C BADGERPO BOX 2345BELLE GLADE FL 33430

--- - STOCKHOLDER SIGNATURE(if held in joint names)

PLEASE.RETiJi#1^#: IA FÀXx 3521374-1SO1

OR3L4M.IN P.OSTAGE.PAID'E^!]VEIAP

14OTE TO .P RS0 1AL:-RI•^PItESENTATiVES TRUST tZCVC. -'-.0RIDA.LA W$lTHE CORPORATION•TOACCEPT•PROXTJS.*SIGNED 'BY'!`*

.^ ='.-I SAL,REPRESENTATIVES'SHOWIlYG,THEIR.CAPACIT7r'


EXHIBIT 9

.A Case 6 : 06-cv-0063E-KRS Document 56-11 Filet/08/2008

BRASHEAR & ASSOC. P.L.

C o u n s e l o r s A t L a w

August 10, 2006

Jerry R. Linscott, Esq.BAKER & HOSTETLER, LLPP.O. Box 12Orlando, FL 32802

Dear Mr. Linscott:

Page 2 of 2

926 N.W. 13th Street

Gainesville , FL 32601-4140

voice: 352/336-0800

fax: 352/336-0505

[email protected]

www.NFIaLaw.com

BRUCE BRASHEAR

WILLIAM CLAYTON MARTIN III

Of Counsel

LARRY D. MARSH

Florida Bar Board Certified Tax Lawyer

This is in response to your letter of May 11, 2006, demanding that the Board of Directors

(the "Board") of Plaintiffs' Shareholders Corporation ("PSC") take action against Southern Farm

Bureau Life Insurance Company ("Southern Farm Bureau") based on certain alleged omissions

and misrepresentations in connection with PSC's sale of the convertible debenture to Southern

Farm Bureau in October 2004. Please be advised that the Board has considered your demand

and has determined that it is not in the best interests of PSC to pursue the action as requested.

Sincerely,

BRASHEAR & ASSOC., P.L.

By:ruce Brashear, Esq.

Copies to: Mr. Royal French

1-/, Mr. Earl FerenceMr. George JamesMr. Kay Richardson

.v _

EXHIBIT

$ 9

case6:06-cv-00637-ja-krs document56 filed 05/08/2008 page 1...

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