<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 16, 1996
REGISTRATION NO. 333-4446
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
POST-EFFECTIVE AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
FARM FAMILY HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 6719 14-1789227
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification Number)
incorporation or Code Number)
organization)
FARM FAMILY HOLDINGS, INC.
P.O. BOX 656
ALBANY, NY 12201-0656
(518) 431-5000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal offices)
------------
VICTORIA M. STANTON
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
FARM FAMILY HOLDINGS, INC.
P.O. BOX 656
ALBANY, NY 12201-0656
(518) 431-5000
(Name, address, including zip code, and telephone number, including area code,
of agents for service)
------------
Copies to:
LARS BANG-JENSEN PETER J. GORDON
LEBOEUF, LAMB, GREENE & MACRAE, L.L.P. SIMPSON THACHER & BARTLETT
125 WEST 55TH STREET 425 LEXINGTON AVENUE
NEW YORK, NY 10019 NEW YORK, NY 10017
(212) 424-8000 (212) 455-2000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses of the issuance and distribution, all of which are
payable by the Registrant, are as follows:
<TABLE>
<S> <C>
SEC Registration Fee....................................... $ 21,725
NASD Fee................................................... 6,800
Stock Exchange Listing..................................... 92,764
Printing and Engraving..................................... 360,000
Accounting Fees and Expenses............................... 100,000
Legal Fees and Expenses.................................... 650,000
Blue Sky Fees and Expenses................................. 25,000
Transfer Agent and Escrow Agent's Fees and Expenses........ 135,000
Miscellaneous Expenses..................................... 25,000
----------
Total.................................................... $1,416,289(/1/)
</TABLE>
- --------
(1) Includes $1,234,395 which will be paid to cover expenses of the
Subscription Offering.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Fourteenth of the Registrant's Certificate of Incorporation (the
"Certificate") requires indemnification to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law (the "DGCL"). Section 145
of the DGCL provides that a corporation may indemnify directors and officers
as well as other employees and individuals against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative, or investigative (other
than action by or in the right of the corporation--a "derivative action"), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. A similar standard is applicable in the case of
derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with the defense or
settlement of such actions, and the statute requires court approval before
there can be any indemnification where the person seeking indemnification has
been found liable to the corporation. Indemnification provided by or granted
pursuant to Section 145 is not exclusive of other indemnification that may be
granted by a corporation's bylaws, any agreement, any vote of stockholders or
disinterested directors or otherwise. Article VIII of the Registrant's bylaws
provides for indemnification consistent with the requirements of Section 145
of the DGCL. Reference is made to Exhibits 3.1 and 3.2 to this Registration
Statement for the complete text of, respectively, Article Fourteenth of the
Registrant's Certificate and Article VIII of the Registrant's bylaws.
Section 145 of the DGCL also permits a corporation to purchase and maintain
insurance on behalf of directors and officers. Article VIII of the
Registrant's bylaws permits it to purchase such insurance on behalf of its
directors and officers. The Registrant intends to obtain, prior to the
consummation of the public offering of its common stock pursuant to this
Registration Statement, directors' and officers' liability insurance providing
aggregate coverage in the amount of $20 million.
Article Thirteenth of the Registrant's Certificate provides for, to the
fullest extent permitted by the DGCL, elimination or limitation of liability
of directors to Farm Family Holdings, Inc. or its stockholders for breach of
fiduciary duty as a director. Section 102(b)(7) of the DGCL permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders
II-1
<PAGE>
for monetary damages for breach of fiduciary duties as a director, except for
liability (i) for any breach of a director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
for improper payment of dividends or redemptions of shares, or (iv) for any
transaction from which the director derives an improper personal benefit.
Reference is made to Exhibit 3.1 to this Registration Statement for the
complete text of Article Thirteenth of the Registrant's Certificate.
Reference is made to the form of Underwriting Agreement filed as Exhibit 1.1
to this Registration Statement which provides for the indemnification of the
directors and officers of the Registrant signing this Registration Statement
and certain controlling persons of the Registrant against certain liabilities,
including those arising under the Securities Act of 1933, as amended (The
"Securities Act"), in certain instances by the Underwriters.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On February 14, 1996, the Registrant issued 1,000 shares of Common Stock to
Farm Family Mutual Insurance Company for $1,000 in cash. This sale is exempt
from registration under Section 4(2) of the Securities Act. It is contemplated
that such shares will be cancelled pursuant to the plan of reorganization and
conversion described in this Registration Statement and which is included as
Exhibit 2.1 to this Registration Statement.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<C> <C> <S>
1.1 -- Form of Underwriting Agreement
*2.1 -- Plan of Reorganization and Conversion, dated February 14,
1996, as amended by Amendment No. 1, dated April 23, 1996
(Exhibits A, B and C to Exhibit 2.1 are included as Exhibits
10.1, 3.1 and 3.2, respectively, to this Registration
Statement)
*3.1 -- Certificate of Incorporation of Farm Family Holdings, Inc.
*3.2 -- Bylaws of Farm Family Holdings, Inc.
*4.1 -- Form of Certificate for shares of Common Stock
*5.1 -- Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
5.2 -- Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P. for the
Public Offering
*8.1 -- Tax Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
*10.1 -- Option Purchase Agreement, dated February 14, 1996, among Farm
Family Holdings, Inc. and The Shareholders of Farm Family Life
Insurance Company Listed Therein
10.2 -- Amended and Restated Expense Sharing Agreement, made effective
as of February 14, 1996, by and among Farm Family Mutual
Insurance Company, Farm Family Life Insurance Company and Farm
Family Holdings, Inc.
*10.3 -- Indenture of Lease, made the 1st day of January 1988, between
Farm Family Life Insurance Company and Farm Family Mutual
Insurance Company as amended by the Amendment to Lease,
effective January 1, 1994
*10.4 -- Underlying Multi-Line Per Risk Reinsurance Contract, effective
January 1, 1995, issued to Farm Family Mutual Insurance
Company by The Subscribing Reinsurer(s) Executing the
Interests and Liabilities Agreement(s) Attached Thereto, as
amended by Addendum No. 1, effective January 1, 1996
*10.5 -- Umbrella Quota Share Reinsurance Contract, effective January
1, 1995, issued to Farm Family Mutual Insurance Company and
United Farm Family Insurance Company, as amended by Addendum
No. 1, effective January 1, 1995
*10.6 -- Excess Catastrophe Reinsurance Contract effective January 1,
1996, issued to Farm Family Mutual Insurance Company
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <C> <S>
*10.7 -- Assumption Agreement, commencing January 1, 1995, between Farm
Family Mutual Insurance Company and United Farm Family
Insurance Company
*10.8 -- Service Agreement, made effective as of July 25, 1988, by and
between Farm Family Mutual Insurance Company and United Farm
Family Insurance Company
*10.9 -- Form of Membership List Purchase Agreement between Farm Family
Mutual Insurance Company and each of the Farm Bureaus
*10.10 -- Farm Family Mutual Insurance Company 8% Subordinated Surplus
Certificate, as amended by Certificate of Amendment No. 1 and
Trust Indenture, dated as of December 29, 1976 relating to the
8% Subordinated Surplus Certificates
*10.11 -- Farm Family Mutual Insurance Company 5% Debenture, as amended
by Certificate of Amendment, effective January 1, 1969,
Certificate of Amendment No. 2, effective January 1, 1979,
Certificate of Amendment No. 3 and Supplemental Trust
Indenture, dated as of August 25, 1955, Amending Trust
Indenture Dated as of May 16, 1955 Relating to The 5%
Debentures, as amended by Certificate of Amendment, dated as
of August 25, 1955, Certificate of Amendment No. 2, dated as
of August 25, 1955, Certificate of Amendment No. 3, dated as
of August 25, 1955
*10.12 -- Farm Family Mutual Insurance Company Officer Severance Pay
Plan, adopted effective August 1, 1994
*10.13 -- Farm Family Mutual Insurance Company Supplemental Employee
Retirement Plan, adopted as of January 1, 1994
*10.14 -- Escrow Agreement between Farm Family Holdings, Inc. and The
Bank of New York, dated as of April 26, 1996
*21.1 -- List of Subsidiaries
23.1 -- Consent of Coopers & Lybrand L.L.P.
*23.2 -- Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (contained
in their Opinion filed as Exhibit 5.1)
23.3 -- Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (contained
in their Opinion filed as Exhibit 5.2)
*24.1 -- Power of Attorney (included with the signatures in Part II of
this Registration Statement)
*28.1 -- Information from reports furnished to State insurance
regulatory authorities
*99.1 -- Form of Subscription Order Form for Subscription Policyholders
*99.2 -- Form of Subscription Order Form for Participating Surplus Note
Holders
</TABLE>
- --------
* Previously filed.
(b) Financial Statement Schedules
*Schedule VI--Reinsurance
*Schedule X--Supplemental Information Concerning Property/Casualty
Insurance Operations
- --------
* Previously filed.
ITEM 17. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
II-3
<PAGE>
precedent, submit to a court of appropriate jurisdiction on the question
whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as a part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rules 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement.
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(d) The undersigned Registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Post-Effective Amendment No. 3 to the
Registration Statement to be signed on its behalf by the Undersigned,
thereunto duly authorized, in the Town of Bethlehem, State of New York on July
15, 1996.
FARM FAMILY HOLDINGS, INC.
By: /s/ Philip P. Weber
----------------------------------
Philip P. Weber
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Post-Effective Amendment No. 3 to the Registration Statement has been signed
below on July 15, 1996 by the following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* Chairman of the Board of Directors
------------------------------------
WILLIAM M. STAMP, JR.
* Vice Chairman of the Board of
- ------------------------------------- Directors
JOHN W. LINCOLN
/s/ Philip P. Weber President and Chief Executive
- ------------------------------------- Officer
PHILIP P. WEBER (Principal Executive Officer)
* Executive Vice President and
- ------------------------------------- Treasurer
CHARLES E. SIMON (Principal Financial and Accounting
Officer)
* Director
- -------------------------------------
ROBERT L. BAKER
* Director
- -------------------------------------
FRED G. BUTLER, SR.
* Director
- -------------------------------------
RANDOLPH C. BLACKMER, JR.
* Director
- -------------------------------------
JOSEPH E. CALHOUN
* Director
- -------------------------------------
JAMES V. CRANE
* Director
- -------------------------------------
STEPHEN J. GEORGE
* Director
- -------------------------------------
GORDON H. GOWEN
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* Director
- ------------------------------------
JON R. GREENWOOD
* Director
- ------------------------------------
CLARK W. HINSDALE III
* Director
- ------------------------------------
RICHARD A. JEROME
* Director
- ------------------------------------
ARTHUR D. KEOWN, JR.
* Director
- ------------------------------------
DANIEL R. LAPOINTE
* Director
- ------------------------------------
WAYNE A. MANN
* Director
- ------------------------------------
JOHN P. MOSKOS
* Director
- ------------------------------------
NORMA R. O'LEARY
* Director
- ------------------------------------
JOHN I. RIGOLIZZO, JR.
* Director
- ------------------------------------
HARVEY T. SMITH
* Director
- ------------------------------------
HOWARD T. SPROW
* Director
- ------------------------------------
RICHARD D. TRYON
* Director
- ------------------------------------
CHARLES A. WILFONG
* Director
- ------------------------------------
TYLER P. YOUNG
</TABLE>
*By:/s/ Philip P. Weber
----------------------------------
Philip P. Weber as
attorney-in-fact for each of
the persons indicated
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL PAGE
EXHIBITS NUMBER
-------- ---------------
<C> <C> <S> <C>
1.1 -- Form of Underwriting Agreement
*2.1 -- Plan of Reorganization and Conversion, dated
February 14, 1996, as amended by Amendment No.
1, dated April 23, 1996 (Exhibits A, B, and C
to Exhibit 2.1 are included as Exhibits 10.1,
3.1 and 3.2, respectively, to this Registration
Statement)
*3.1 -- Certificate of Incorporation of Farm Family
Holdings, Inc.
*3.2 -- Bylaws of Farm Family Holdings, Inc.
*4.1 -- Form of Certificate for shares of Common Stock
*5.1 -- Opinion of LeBoeuf, Lamb, Greene & MacRae,
L.L.P.
5.2 -- Opinion of LeBoeuf, Lamb, Greene & MacRae,
L.L.P. for the Public Offering
*8.1 -- Tax Opinion of LeBoeuf, Lamb, Greene & MacRae,
L.L.P.
*10.1 -- Option Purchase Agreement, dated February 14,
1996, among Farm Family Holdings, Inc. and The
Shareholders of Farm Family Life Insurance
Company Listed Therein
10.2 -- Amended and Restated Expense Sharing Agreement,
made effective as of February 14, 1996, by and
among Farm Family Mutual Insurance Company,
Farm Family Life Insurance Company and Farm
Family Holdings, Inc.
*10.3 -- Indenture of Lease, made the 1st day of January
1988, between Farm Family Life Insurance
Company and Farm Family Mutual Insurance
Company as amended by the Amendment to Lease,
effective January 1, 1994
*10.4 -- Underlying Multi-Line Per Risk Reinsurance
Contract, effective January 1, 1995, issued to
Farm Family Mutual Insurance Company by The
Subscribing Reinsurer(s) Executing the
Interests and Liabilities Agreement(s) Attached
Thereto, as amended by Addendum No. 1,
effective January 1, 1996
*10.5 -- Umbrella Quota Share Reinsurance Contract,
effective January 1, 1995, issued to Farm
Family Mutual Insurance Company and United Farm
Family Insurance Company, as amended by
Addendum No. 1, effective January 1, 1995
*10.6 -- Excess Catastrophe Reinsurance Contract
effective January 1, 1996, issued to Farm
Family Mutual Insurance Company
*10.7 -- Assumption Agreement, commencing January 1,
1995, between Farm Family Mutual Insurance
Company and United Farm Family Insurance
Company
*10.8 -- Service Agreement, made effective as of July
25, 1988, by and between Farm Family Mutual
Insurance Company and United Farm Family
Insurance Company
*10.9 -- Form of Membership List Purchase Agreement
between Farm Family Mutual Insurance Company
and each of the Farm Bureaus
*10.10 -- Farm Family Mutual Insurance Company 8%
Subordinated Surplus Certificate, as amended by
Certificate of Amendment No. 1 and Trust
Indenture, dated as of December 29, 1976
relating to the 8% Subordinated Surplus
Certificates
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIAL PAGE
EXHIBITS NUMBER
-------- ---------------
<C> <C> <S> <C>
*10.11 -- Farm Family Mutual Insurance Company 5%
Debenture, as amended by Certificate of
Amendment, effective January 1, 1969,
Certificate of Amendment No. 2, effective
January 1, 1979, Certificate of Amendment No. 3
and Supplemental Trust Indenture, dated as of
August 25, 1955 Amending Trust Indenture, dated
as of May 16, 1955 Relating to The 5%
Debentures, as amended by Certificate of
Amendment, dated as of August 25, 1955,
Certificate of Amendment No. 2, dated as of
August 25, 1955, Certificate of Amendment No. 3
dated as of August 25, 1955
*10.12 -- Farm Family Mutual Insurance Company Officer
Severance Pay Plan, adopted effective August 1,
1994
*10.13 -- Farm Family Mutual Insurance Company
Supplemental Employee Retirement Plan, adopted
as of January 1, 1994
*10.14 -- Escrow Agreement between Farm Family Holdings,
Inc. and The Bank of New York, dated as of
April 26, 1996
*21.1 -- List of Subsidiaries
23.1 -- Consent of Coopers & Lybrand L.L.P.
*23.2 -- Consent of LeBoeuf, Lamb, Greene & MacRae,
L.L.P. (contained in their Opinion filed as
Exhibit 5.1)
23.3 -- Consent of LeBoeuf, Lamb, Greene & MacRae,
L.L.P. (contained in their Opinion filed as
Exhibit 5.2)
*24.1 -- Power of Attorney (included with the signatures
in Part II of this Registration Statement)
*28.1 -- Information from reports furnished to State
insurance regulatory authorities
*99.1 -- Form of Subscription Order Form for
Subscription Policyholders
*99.2 -- Form of Subscription Order Form for
Participating Surplus Note Holders
</TABLE>
- --------
* Previously Filed
<PAGE>
EXHIBIT 1.1
Farm Family Holdings, Inc.
2,470,000 Shares/1/
Common Stock
($.01 par value)
Underwriting Agreement
July __, 1996
Salomon Brothers Inc
As Representative of the several
Underwriters,
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Farm Family Holdings, Inc., a Delaware corporation (the "Company"),
proposes to issue shares of its common stock, par value $.01 per share (shares
of which class of stock of the Company are hereinafter referred to as "Common
Stock"), in connection with the reorganization (the "Reorganization") of Farm
Family Mutual Insurance Company, a New York mutual property and casualty
insurance company ("Farm Family Mutual"), into a New York stock property and
casualty insurance company pursuant to Farm Family Mutual's Plan of
Reorganization and Conversion, as adopted on February 14, 1996 by the Board of
Directors (the "FFM Board") of Farm Family Mutual (as amended on April 23, 1996
by the FFM Board, the "Plan"). Farm Family Mutual will become a wholly owned
subsidiary of the Company and be renamed Farm Family Casualty Insurance Company
("FFCIC") upon the FFM Board's declaring the Plan effective, the confirming of
the opinion of special tax counsel as specified in the Plan, and the issuance by
the New York Superintendent of Insurance (the "Superintendent") of a certificate
of authority for FFCIC (collectively, the "Effectiveness of the Plan"). For
purposes of this Agreement, the term "Farm Family" refers to Farm Family Mutual
prior to the Effectiveness of the Plan and FFCIC upon and after the
Effectiveness of the Plan. Pursuant to the Plan, the Company proposes: (i) to
issue to certain Eligible Policyholders (as defined in the Plan) shares of
Common Stock (the "Policyholder Shares") in exchange for their Policyholder
Interests (as defined in the Plan); (ii) to issue to Participating Surplus Note
Holders (as defined in the Plan) shares of Common Stock in exchange for such
notes (collectively with the Policyholder Shares, the "Reorganization Shares");
(iii) to issue and sell shares of Common Stock to Subscription Policyholders (as
defined in the Plan) and to Participating Surplus Note Holders who elect to
- -----------------------
/1/ Plus an option to purchase from the Company up to 366,020 additional
shares to cover over-allotments.
<PAGE>
2
subscribe for such shares of Common Stock pursuant to the Subscription Offering
(as defined in the Plan); and (iv) to issue and sell to the underwriters named
in Schedule I hereto (the "Underwriters"), for whom Salomon Brothers Inc (the
"Representative") is acting as representative, 2,470,000 shares of Common Stock
of the Company (said shares to be issued and sold by the Company being
hereinafter called the "Underwritten Securities"). The Company also proposes to
grant to the Underwriters an option to purchase from the Company up to 366,020
additional shares of Common Stock to cover over-allotments (the "Option
Securities"; the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities"). Upon the Effectiveness of the Plan,
the Eligible Policyholders' Policyholder Interests will be extinguished.
1. Representations and Warranties.
------------------------------
(a) Each of the Company and Farm Family represents and warrants to,
and agrees with, each Underwriter as set forth below in this Section 1.
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (file number 333-
4446) on Form S-1 relating to the Subscription Offering, including a
related prospectus, in accordance with the Securities Act of 1933, as
amended (the "Act"), and in the form heretofore delivered to you, and such
registration statement has been declared effective by the Commission. The
Company has filed a post-effective amendment to such registration statement
(the "Post-Effective Amendment"), relating to the offering of the
Securities, including a related preliminary prospectus, each of which has
been previously furnished to you. The Company will next file with the
Commission either (A) prior to effectiveness of the Post-Effective
Amendment, a further amendment to such Post-Effective Amendment (including
the form of final prospectus) or (B) after effectiveness of such Post-
Effective Amendment, a final prospectus in accordance with Rules 430A and
424(b)(1) or (4). In the case of clause (B), the Company has included in
such Post-Effective Amendment, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the
rules thereunder to be included in the Prospectus with respect to the
Securities and the offering thereof. As filed, such amendment and form of
final prospectus, or such final prospectus, shall contain all Rule 430A
Information, together with all other such required information, with
respect to the Securities and the offering thereof and, except to the
extent the Representative shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond
that contained in the latest Preliminary Prospectus) as the Company has
advised you,
<PAGE>
3
prior to the Execution Time, will be included or made therein.
The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that the
Post-Effective Amendment and any additional post-effective amendment or
amendments thereto became or become effective. "Execution Time" shall mean the
date and time that this Agreement is executed and delivered by the parties
hereto. The term "Initial Effective Date" shall mean the date the Registration
Statement relating to the Subscription Offering became effective. "Preliminary
Prospectus" shall mean any preliminary prospectus referred to in paragraph
(i) above and any preliminary prospectus included in the Registration
Statement at the Effective Date that omits Rule 430A Information. "Prospectus"
shall mean the prospectus relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time or, if no filing pursuant to
Rule 424(b) is required, shall mean the form of final prospectus relating to
the Securities included in the Post-Effective Amendment at the Effective Date.
"Registration Statement" shall mean the registration statement referred to in
paragraph (i) above, as amended, and the Post-Effective Amendment, as further
amended, each time such registration statement and the Post-Effective Amendment
were declared effective, including in each case all exhibits and financial
statements thereto, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective). Such
term shall include Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A. "Rule 424" and "Rule 430A" refer to
such rules under the Act. "Rule 430A Information" means information with
respect to the Securities and the offering thereof permitted to be omitted from
the Post-Effective Amendment, as further amended, when it becomes effective
pursuant to Rule 430A.
(ii) On the Initial Effective Date and at all times from the
Initial Effective Date through the Closing Date (or, if applicable, the
settlement date with respect to the Option Securities as described in
Section 3 hereof), the Registration Statement and the Prospectus (and any
supplements thereto) did and will comply in all material respects with the
applicable requirements of the Act and the rules thereunder; on the Initial
Effective Date and at all times from the Initial Effective Date through the
Closing Date (or, if applicable, the settlement date with respect to the
Option Securities as described in Section 3 hereof), the Registration
Statement did not or will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading, and the
Prospectus (together with any supplements thereto) did not and will not
include any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances
<PAGE>
4
under which they were made, not misleading; provided, however, that neither
-------- -------
the Company nor Farm Family makes any representation or warranty as to the
information contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of any
Underwriter through the Representative specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement thereto).
(iii) The Company has as of the date hereof, and will have until
immediately prior to the Effectiveness of the Plan, no subsidiaries. Prior
to the Effectiveness of the Plan, Rural Agency and Brokerage, Inc., a New
York corporation ("Rural"), Rural Insurance Agency and Brokerage of
Massachusetts, Inc., a Massachusetts corporation ("RIAB"), and R.A.A.B. of
W. Va., Inc., a West Virginia corporation ("R.A.A.B."), are the only
subsidiaries of Farm Family Mutual. Upon the Effectiveness of the Plan,
FFCIC, Rural, RIAB, and R.A.A.B. (collectively, the "Post-Effective
Subsidiaries") will be the only subsidiaries of the Company. The Company
is duly organized and validly existing as a corporation in good standing
under the laws of the State of Delaware with corporate power and authority
under such laws to own, lease and operate its properties and conduct its
business as described in the Prospectus. Farm Family Mutual has been and,
until immediately prior to the effectiveness of the Plan, will continue to
be duly organized and validly existing as a mutual property and casualty
insurance company in good standing under the laws of the State of New York;
upon the Effectiveness of the Plan, FFCIC will be duly organized and
validly existing as a stock property and casualty insurance company in good
standing under the laws of the State of New York with corporate power and
authority under such laws to own, lease and operate its properties and
conduct its business as described in the Prospectus. Each of Rural, RIAB
and R.A.A.B. is a corporation duly organized, validly existing and in good
standing under the laws of the State of New York, the State of
Massachusetts and the State of West Virginia, respectively, with corporate
power and authority under such respective laws to own, lease and operate
its properties and conduct its business. Each of the Company, Farm Family
Mutual, Rural, RIAB and R.A.A.B. is and, upon the Effectiveness of the
Plan, FFCIC will be, duly qualified to transact business as a foreign
corporation and in good standing in each other jurisdiction in which its
ownership or lease of property or the conduct of its business requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not, individually or in the aggregate, have a
material adverse effect on the Company, Farm Family Mutual or FFCIC, as the
case may be. All of the outstanding shares of capital stock of each of
Rural, RIAB and R.A.A.B. have been, and, upon the Effectiveness of the
Plan, all of the
<PAGE>
5
outstanding shares of capital stock of FFCIC will be, duly authorized and
validly issued and are fully paid and non-assessable. Upon the
effectiveness of the Plan, all of the outstanding shares of capital stock
of each Post-Effective Subsidiary will be owned by the Company, directly or
through one or more Post-Effective Subsidiaries, free and clear of any
pledge, lien, security interest, charge, claim, equity or encumbrance of
any kind.
(iv) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and conform to the description thereof contained in the
Prospectus; the Securities to be issued and sold by the Company pursuant to
this Agreement have been duly authorized and, when issued and delivered
against payment therefor as provided herein, will be fully paid and non-
assessable and will conform to the description thereof contained in the
Prospectus.
(v) The Reorganization Shares have been duly authorized and, when
issued and delivered to Eligible Policyholders and Participating Surplus
Note Holders pursuant to the Plan, will be validly issued, fully paid and
non-assessable; no holder thereof will be subject to personal liability by
reason of being such a holder; such Reorganization Shares are not subject
to the preemptive rights of any stockholder of the Company and, assuming
the FFM Board declares the Plan effective, the opinion of special tax
counsel is confirmed as specified in the Plan, and the Superintendent
issues a certificate of authority for FFCIC, all corporate action required
to be taken for the authorization and issuance of the Reorganization Shares
has been validly and sufficiently taken.
(vi) The offering, issuance and delivery of the Reorganization
Shares to Eligible Policyholders and Participating Surplus Note Holders
pursuant to the Plan is exempt from the registration requirements of the
Act.
(vii) The Plan has been duly adopted by the required vote of the FFM
Board (which adoption complied with the applicable requirements of Section
7307 of the New York Insurance Law ("Section 7307")) and has been submitted
to the Superintendent as required by Section 7307 and conforms in all
material respects to the requirements of the laws of the State of New York
applicable to the reorganization of mutual property and casualty insurance
companies into stock property and casualty insurance companies as
administered or interpreted by the Superintendent (collectively, the "New
York Reorganization Laws"); on or before March 7, 1996, a notice was mailed
(the "Hearing Notice") to all persons entitled to appear at the hearing
regarding the Plan (the "Hearing"), in accordance with the requirements of
Section
<PAGE>
6
7307; on or before February 27, 1996, Farm Family Mutual gave notice of
such Hearing by publication in the publications set forth on Schedule II
hereto; on April 2, 1996, a hearing officer designated by the
Superintendent held the Hearing; on May 1, 1996 the Superintendent issued
an opinion and decision approving the Plan in accordance with the
requirements of Section 7307 (the "Superintendent's Opinion and Decision");
the Plan was duly adopted on June 17, 1996 by a vote (the "Policyholder
Vote") of more than two-thirds of the votes validly cast at the Special
Meeting (as defined in the Plan) by Voting Policyholders (as defined in the
Plan) (which adoption complied with the applicable requirements of Section
7307) and such adoption has not been rescinded or otherwise withdrawn;
other than FFM Board's declaring the Plan effective, the confirming of the
opinion of special tax counsel as specified in the Plan, and the issuance
by the Superintendent of a certificate of authority for FFCIC, there are no
conditions or other requirements remaining for the effectiveness of the
Plan; no other approvals are required to be obtained under Section 7307 for
the effectiveness of the Plan; upon the Effectiveness of the Plan, the Plan
will become effective in accordance with its terms pursuant to Section 7307
and the Reorganization will be completed in accordance with the Plan and
the New York Reorganization Laws; and prior to or contemporaneously with
the Closing Date (as defined in Section 3) each of the actions required to
occur on or prior to the Effective Date pursuant to the Superintendent's
Opinion and Decision or the Plan will have occurred.
(viii) The policyholder information statement for the Special Meeting
(the "Information Statement"), as of its date and as of the date of the
Policyholder Vote, did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(ix) Farm Family Mutual holds such insurance licenses, certificates
and permits from governmental authorities (including, without limitation,
from the insurance regulatory agencies of the various jurisdictions where
it conducts business (the "Insurance Licenses")) which are necessary to the
conduct of its business as described in the Prospectus, except to the
extent that the failure to hold such Insurance Licenses would not,
individually or in the aggregate, have a material adverse effect on Farm
Family Mutual; the Company and Farm Family Mutual have fulfilled and
performed all obligations necessary to maintain the Insurance Licenses,
except to the extent that the failure to fulfill and perform such
obligations would not, individually or in the aggregate, have a material
adverse effect on Farm Family Mutual; neither the Company nor Farm Family
Mutual has received any notice of, or otherwise has any knowledge of, any
action, suit, proceeding or investigation, and, to
<PAGE>
7
the knowledge of the Company and Farm Family Mutual, there is no threatened
action, suit, proceeding or investigation, that could reasonably be
expected to result in the revocation, termination or suspension of any
Insurance License; and neither the Company nor Farm Family has received any
notice of, or otherwise has any knowledge of, the issuance of, or
commencement of any proceeding for the issuance of, any order or decree of
an insurance regulatory agency or body, which order or decree would impair,
restrict or prohibit the payment of dividends by Farm Family to the
Company.
(x) Farm Family has made no material changes in its insurance
reserving practices since December 31, 1995.
(xi) All ceded and material assumed reinsurance treaties and
arrangements to which Farm Family is a party are in full force and effect
and Farm Family is not in violation of or in default in the performance,
observance or fulfillment of, any obligation, agreement, covenant or
condition contained therein, except to the extent that such violation of or
default in the performance, observance or fulfillment of any such
obligation, agreement, covenant or condition contained therein would not,
individually or in the aggregate, have a material adverse effect on Farm
Family; Farm Family has not received notice from any of the other parties
to such treaties, contracts or agreements that such other party intends not
to perform such treaty and, to the best knowledge of the Company and Farm
Family, the Company and Farm Family have no reason to believe that any of
the other parties to such treaties or arrangements will be unable to
perform such treaty or arrangement except to the extent adequately and
properly reserved for in the consolidated financial statements of the
Company included in the Prospectus.
(xii) Coopers & Lybrand L.L.P., who are reporting upon the audited
consolidated financial statements and schedules included in the
Registration Statement, are independent public accountants required by the
Act and the rules and regulations thereunder.
(xiii) The consolidated financial statements, including the notes
thereto, included in the Registration Statement present fairly the
consolidated financial position of Farm Family Mutual and its subsidiaries
as of the dates indicated and the consolidated results of operations and
the consolidated cash flows of Farm Family Mutual and its subsidiaries for
the periods specified. Except as otherwise stated in the Registration
Statement, such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. The financial statement schedules, if
any, included in the Registration Statement present fairly the information
required to be stated
<PAGE>
8
therein. The selected financial data included in the Prospectuses present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited consolidated financial statements
included in the Registration Statement.
(xiv) The statutory financial statements of Farm Family Mutual from
which certain ratios and other statistical data filed as part of the
Registration Statement or included or incorporated in the Prospectus have
been derived, have for each relevant period been prepared in conformity
with statutory accounting practices required or permitted by the New York
State Department of Insurance, and such statutory accounting practices have
been applied on a consistent basis throughout the periods involved, except
as may otherwise be indicated therein or in the notes thereto, and present
fairly the statutory financial position of Farm Family Mutual as of the
dates thereof, and the statutory basis results of operations of Farm Family
Mutual for the periods covered thereby.
(xv) Each of the Company and Farm Family maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (A) transactions are executed in accordance with management's general
or specific authorizations; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences and, as of the
Closing Date (as defined in Section 3 hereof), each of the Company and Farm
Family will continue to maintain such a system.
(xvi) The Company and Farm Family have good and marketable title in
fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as do not materially affect the value
of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and Farm Family; and
all real property and buildings held under lease by the Company and Farm
Family are held by them under valid, subsisting and enforceable leases,
with such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by the Company
and Farm Family.
(xvii) The Company and Farm Family have filed all federal, state and
local income and franchise tax returns required to be filed (or have
received an extension with respect thereto), except to the extent that the
failure to
<PAGE>
9
file such tax returns would not, individually or in the aggregate, have a
material adverse effect on the Company or Farm Family, through the date
hereof and have paid all taxes due thereon, to the extent such taxes are
not being contested in good faith, and no tax deficiency has been
determined adversely to the Company or Farm Family, except to the extent
that such adverse determination would not have a material adverse effect on
the Company or Farm Family.
(xviii) Neither the Company nor Farm Family is aware of the
introduction of any change in any insurance laws, rules or regulations has
been introduced which would reasonably be expected to be adopted and if
adopted, would reasonably be expected to have, individually or in the
aggregate with all such changes, a material adverse effect upon the
financial condition, business affairs or results of operations of the
Company and Farm Family Mutual considered as one enterprise.
(xix) The execution, delivery and performance of this Agreement by
the Company and Farm Family, the consummation of the transactions
contemplated hereby and the issuance and delivery of the Securities
hereunder, will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or Farm Family is a party or by which the
Company or Farm Family is bound or to which any of the property or assets
of the Company or Farm Family is subject, except to the extent that such
breach, violation or default would not, individually or in the aggregate,
have a material adverse effect on the Company or Farm Family. The
execution, delivery and performance of this Agreement by the Company and
Farm Family, the consummation of the transactions contemplated hereby and
the issuance and delivery of the Securities hereunder will not result in
any violation of the provisions of the charter or by-laws of the Company or
Farm Family or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or Farm
Family or any of their properties or assets, assuming compliance with the
applicable state or foreign securities laws. Except for the registration
of the Securities under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
New York Insurance Law and applicable state or foreign securities laws in
connection with the purchase and distribution of the Securities by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by
the Company and Farm Family Mutual or the consummation of the transactions
contemplated hereby by the Company and Farm Family Mutual, other than the
issuance
<PAGE>
10
by the Superintendent of a certificate of authority for FFCIC.
(xx) This Agreement has been duly authorized, executed and
delivered by the Company and Farm Family Mutual.
(xxi) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
Securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the Act, except as disclosed in the Registration
Statement.
(xxii) There are no legal or governmental proceedings pending to
which the Company or Farm Family is a party or of which any property or
assets of the Company or Farm Family is the subject which could reasonably
be expected to have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business or
prospects of the Company or Farm Family; and, to the best of the Company's
and Farm Family's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(xxiii) Neither the Company nor Farm Family (A) is in violation of
its charter or by-laws, (B) is in default in any material respect, and no
event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of its properties or
assets is subject or (C) is in violation in any material respect of any
law, ordinance, governmental rule, regulation or court decree to which it
or its property or assets may be subject or has failed to obtain any
material license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or to
the conduct of its business.
(xxiv) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Act or by the rules and regulations
thereunder which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by reference
as permitted by such rules and regulations.
<PAGE>
11
(xxv) The Company and Farm Family have filed all reports, information
statements and other documents with the insurance regulatory authorities
of their respective jurisdictions of incorporation as are required to be
filed pursuant to the insurance statutes of such jurisdictions and the
rules and regulations of the insurance regulatory authorities thereunder,
except to the extent that the failure to file such reports, information
statements and other documents would not, individually or in the aggregate,
have a material adverse effect on the Company and Farm Family.
2. Purchase and Sale. (a) Subject to the terms and conditions and
-----------------
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
$____ per share, the amount of the Underwritten Securities set forth opposite
such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
366,020 shares of the Option Securities at the same purchase price per share as
the Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in
part at any time (but not more than once) on or before the 30th day after the
date of the Prospectus upon written or telegraphic notice by the Representative
to the Company setting forth the number of shares of the Option Securities as to
which the several Underwriters are exercising the option and the settlement
date. Delivery of certificates for the shares of Option Securities by the
Company, and payment therefor to the Company, shall be made as provided in
Section 3 hereof. The number of shares of the Option Securities to be purchased
by each Underwriter shall be the same percentage of the total number of shares
of the Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. Delivery and Payment. Delivery of and payment for the
--------------------
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third business
day prior to the Closing Date) shall be made at the office of Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, New York, at 10:00 A.M., New York City
time, on , 1996, or such later date (not later than , 1996) as the
Representative shall designate, which date and time may be postponed by
agreement between the Representative and the Company or as provided in Section
10 hereof (such date and time of delivery and payment for
<PAGE>
12
the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representative for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representative of the respective aggregate purchase prices of the Securities
being sold by the Company to or upon the order of the Company by certified or
official bank check or checks drawn on or by a New York Clearing House bank and
payable in next day funds. Delivery of the Underwritten Securities and the
Option Securities shall be made at such location as the Representative shall
reasonably designate at least one business day in advance of the Closing Date
and payment for such Securities shall be made at the office of Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, New York 10017. Certificates for the
Securities shall be registered in such names and in such denominations as the
Representative may request not less than two full business day in advance of the
Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Representative in New York, New York, not later
than 1:00 P.M. on the business day prior to the Closing Date.
If the option provided for in Section 2(b) hereof is exercised after
the third business day prior to the Closing Date, the Company will deliver (at
the expense of the Company) to the Representative, at One New York Plaza, New
York, New York, on the date specified by the Representative (which shall be
within three business days after exercise of said option), certificates for the
Option Securities in such names and denominations as the Representative shall
have requested against payment of the purchase price thereof to or upon the
order of the Company by certified or official bank check or checks drawn on or
by a New York Clearing House bank and payable in next day funds. If settlement
for the Option Securities occurs after the Closing Date, the Company will
deliver to the Representative on the settlement date for the Option Securities,
and the obligation of the Underwriters to purchase the Option Securities shall
be conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
------------------------
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements.
----------
(a) The Company and Farm Family agree with the several Underwriters
that:
(i) The Company will use its best efforts to cause the Post-
Effective Amendment, if not effective at the Execution Time, and any
amendment thereto, to become effective. Prior
<PAGE>
13
to the termination of the offering of the Securities, the Company will not
file any amendment of the Registration Statement or supplement to the
Prospectus without your prior consent. Subject to the foregoing sentence,
if the Post-Effective Amendment or any amendment thereto has become or
becomes effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed with
the Commission pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to the
Representative of such timely filing. The Company will promptly advise the
Representative (A) when the Post-Effective Amendment, if not effective at
the Execution Time, and any amendment thereto, shall have become effective,
(B) when the Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b), (C) when, prior
to termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (D) of
any request by the Commission for any amendment of the Registration
Statement or supplement to the Prospectus or for any additional
information, (E) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (F) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(ii) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to
amend the Registration Statement or supplement the Prospectus to comply
with the Act or the rules thereunder, the Company promptly will prepare and
file with the Commission, subject to the second sentence of subparagraph
(i) of paragraph (a) of this Section 5, an amendment or supplement which
will correct such statement or omission or effect such compliance.
(iii) Not later than 45 days after the end of the 12-month
period beginning at the end of the fiscal quarter of the Company during
which the Effective Date occurs (or 90 days if such 12-month period
coincides with the Company's fiscal year), the Company will make generally
available to its security holders and to the Representative an earnings
<PAGE>
14
statement or statements of the Company and its subsidiaries, covering such
12-month period, which will satisfy the provisions of Section 11(a) of the
Act and Rule 158 under the Act.
(iv) The Company will furnish to the Representative and counsel
for the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of each Preliminary Prospectus and the Prospectus and
any supplement thereto as the Representative may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the offering.
(v) The Company will endeavor to qualify the Securities for
sale under the laws of such jurisdictions as the Representative may
designate (provided that the Company shall not be required to qualify as a
foreign corporation or to take any action which would subject it to
taxation or service of process in suits, other than as to matters and
transactions relating to the offer and sale of the Securities, in any
jurisdiction where it is not now so subject) and will maintain such
qualifications in effect so long as required for the distribution of the
Securities and will pay the fee of the National Association of Securities
Dealers, Inc., in connection with its review of the offering.
(vi) The Company will not, for a period of 180 days following
the Execution Time, without the prior written consent of the
Representative, offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any other shares of
Common Stock or any securities convertible into, or exercisable or
exchangeable for, shares of Common Stock other than: (A) the Reorganization
Shares to Eligible Policyholders and Participating Surplus Note Holders in
connection with the consummation of the Reorganization pursuant to the
Plan; (B) Common Stock issued and sold pursuant to the Subscription
Offering; and (C) Common Stock issued and sold pursuant to the Option
Purchase Agreement dated February 14, 1996 between the Company and the
shareholders of Farm Family Life Insurance Company.
(vii) The Company will use its best efforts to effect the
listing of the Common Stock on the New York Stock Exchange.
6. Conditions to the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties
<PAGE>
15
on the part of the Company and Farm Family contained herein as of the Execution
Time, the Closing Date and any settlement date for the Option Securities
pursuant to Section 3 hereof, to the accuracy of the statements of the Company
and Farm Family made in any certificates pursuant to the provisions hereof, to
the performance by the Company and Farm Family of their respective obligations
hereunder and to the following additional conditions:
(a) If the Post-Effective Amendment or an amendment thereto has not
become effective prior to the Execution Time, unless the Representative
agrees in writing to a later time, the Post-Effective Amendment or an
amendment thereto will become effective not later than (i) 6:00 P.M., New
York City time, on the date of determination of the public offering price,
if such determination occurred at or prior to 3:00 P.M., New York City
time, on such date or (ii) 12:00 Noon on the business day following the day
on which the public offering price was determined, if such determination
occurred after 3:00 P.M., New York City time, on such date; if filing of
the Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Prospectus, and any such supplement, will be filed in the
manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted
or threatened.
(b) The Company shall have furnished to the Representative the
opinion of LeBoeuf, Lamb, Greene & Macrae, L.L.P., counsel for the Company,
dated the Closing Date, to the effect that:
(i) the Company's authorized equity capitalization is as set forth in
the Prospectus; the capital stock of the Company conforms to the
description thereof contained in the Prospectus; the Securities being sold
hereunder by the Company have been duly and validly authorized, and, when
issued and delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; the form of the
certificates for the Securities conforms to the requirements of the
Delaware General Corporation Law; and, except for the subscription rights
provided to certain Eligible Policyholders and Participating Surplus Note
Holders under the Plan and Section 7307 of the New York Insurance Law and
to which the Subscription Offering related, the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the Securities pursuant to any agreement or
instrument to which the Company is a party or by which it is bound and of
which such counsel has knowledge, or under the Delaware General Corporation
Law, the laws of the State of New York, or the charter or by-laws of the
Company;
<PAGE>
16
(ii) the statements in the Prospectus under the headings "The
Reorganization" and "Business -- Regulation", to the extent that they
constitute matters of law or legal conclusions, have been reviewed by such
counsel and fairly present the information disclosed therein in all
material respects;
(iii) the Post-Effective Amendment, as amended, has become
effective under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in the manner
and within the time period required by Rule 424(b); to the best knowledge
of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that purpose
have been instituted or threatened and the Registration Statement and the
Prospectus (other than the financial statements, schedules and other
financial and statistical information contained therein as to which such
counsel need express no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the rules thereunder; and
such counsel has no reason to believe that at the Initial Effective Date
and at all times from the Initial Effective Date through the Closing Date
(or, if applicable, the settlement date with respect to the Option
Securities as described in Section 3 hereof), the Registration Statement
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus includes any
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(iv) no consent, approval, authorization or order of any court
or governmental agency or body is required under the General Corporation
Law of the State of Delaware, the Business Corporation Law of the State of
New York or the New York Insurance Law for the consummation by the Company
and Farm Family of the transactions contemplated herein, or for the
execution, delivery and performance by the Company and Farm Family of this
Agreement, except (A) such as have been obtained or made under the Act, the
Exchange Act, the New York Insurance Law and the rules and regulations
thereunder and (B) such as may be required under state securities or blue
sky laws or foreign securities laws in connection with the purchase and
distribution of the Securities by the Underwriters and such other approvals
(specified in such opinion) as have been obtained; and
(v) to the best knowledge of such counsel, no holders of
securities of the Company have rights to the registration of such
securities under, or by reason of the filing of, the Registration
Statement, except as disclosed in the Registration Statement.
<PAGE>
17
In rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than the State of New York,
the Delaware General Corporation Law or the United States, to the extent such
counsel deems proper and specified in such opinion, upon the opinion of other
counsel of good standing whom such counsel believes to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent such counsel deems proper, on certificates of responsible officers of
the Company and Farm Family and public officials. References to the Prospectus
in this paragraph (b) include any supplements thereto at the Closing Date.
(c) The Company shall have furnished to the Representative the opinion of
Victoria M. Stanton, Executive Vice President, General Counsel and Secretary of
the Company, dated the Closing Date, to the effect that:
(i) each of the Company and FFCIC has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full corporate
power and authority to own its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or leases
properties or conducts business, except to the extent that the failure to
be in good standing or to be so qualified would not, individually or in the
aggregate, have a material adverse effect on the Company or FFCIC;
(ii) except for the delivery of certificates for the Reorganization
Shares and the shares of Common Stock to be issued pursuant to the
Subscription Offering, all the outstanding shares of capital stock of each
of the Company and FFCIC have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise set forth in
the Prospectus, all outstanding shares of capital stock of FFCIC are owned
by the Company free and clear of any perfected security interest and, to
the knowledge of such counsel, after due inquiry, any other security
interests, claims, liens or encumbrances;
(iii) to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened and such
counsel has no reason to believe that at the Initial Effective Date and at
all times from the Initial Effective Date through the Closing Date (or, if
applicable, the settlement date with respect to the Option Securities as
described in Section 3 hereof), the Registration Statement contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to
<PAGE>
18
make the statements therein not misleading or that the Prospectus includes
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(iv) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or FFCIC
of a character required to be disclosed in the Registration Statement which
is not adequately disclosed in the Prospectus, and there is no franchise,
contract or other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit, which
is not described or filed as required; and the statements in the Prospectus
under the heading "Business -- Legal Proceedings", to the extent that they
constitute matters of law or legal conclusions, have been reviewed by such
counsel and fairly present the information disclosed therein in all
material respects;
(v) this Agreement has been duly authorized, executed and delivered
by the Company and Farm Family Mutual;
(vi) neither the issue and sale by the Company of the Securities, nor
the consummation by the Company and FFCIC of any other of the transactions
herein contemplated nor the fulfillment by the Company and FFCIC of the
terms hereof will conflict with, result in a breach or violation of, or
constitute a default under, any indenture or other agreement or instrument
to which the Company or FFCIC is a party or bound, except to the extent
that such conflict, breach, violation or default would not, individually or
in the aggregate, have a material adverse effect on the Company and FFCIC;
nor will such actions result in any violation of the provisions of any law
or the charter or by-laws of the Company and FFCIC or any judgement, order
or decree known to such counsel to be applicable to the Company or FFCIC of
any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or FFCIC;
(vii) FFCIC holds such insurance licenses, certificates and permits
from governmental authorities (including, without limitation, Insurance
Licenses) which are necessary to the conduct of its business as described
in the Prospectus, except to the extent that the failure to hold such
Insurance Licenses would not, individually or in the aggregate, have a
material adverse effect on FFCIC; the Company and FFCIC have fulfilled and
performed all obligations necessary to maintain the Insurance Licenses,
except to the extent that the failure to fulfill and perform such
obligations would not, individually or in the aggregate, have a material
adverse effect on FFCIC; neither
<PAGE>
19
the Company nor FFCIC has received any notice of, and such counsel has no
knowledge of, any action, suit, proceeding or investigation, and to the
best knowledge of such counsel there has been no threatened action, suit,
proceeding or investigation, that could reasonably be expected to result in
the revocation, termination or suspension of any Insurance License; and
neither the Company nor FFCIC has received any notice of, and to the best
knowledge of such counsel there has been no, issuance of, or commencement
of any proceeding for the issuance of, any order or decree of an insurance
regulatory agency or body, which order or decree would impair, restrict or
prohibit the payment of dividends by FFCIC to the Company; and
(viii) to the best knowledge of such counsel, no holders of securities
of the Company have rights to the registration of such securities under, or
by reason of the filing of, the Registration Statement, except as disclosed
in the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of New York, the
Delaware General Corporation Law or the United States, to the extent such
counsel deems proper and specified in such opinion, upon the opinion of other
counsel of good standing whom such counsel believes to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent such counsel deems proper, on certificates of responsible officers of
the Company and Farm Family and public officials. References to the Prospectus
in this paragraph (c) include any supplements thereto at the Closing Date.
(d) The Representative shall have received from Simpson Thacher &
Bartlett, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities, the Post-
Effective Amendment, as amended, the Prospectus (together with any supplement
thereto) and other related matters as the Representative may reasonably require,
and the Company and Farm Family shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(e) The Company shall have furnished to the Representative a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company and Farm
Family in this Agreement are true and correct in
<PAGE>
20
all material respects on and as of the Closing Date with the same effect as
if made on the Closing Date and each of the Company and Farm Family have
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements included
in the Prospectus (exclusive of any supplement thereto), there has been no
material adverse change in the condition (financial or other), earnings,
business or properties of the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(f) At the Execution Time, the Representative shall have received
from Coopers & Lybrand L.L.P. a letter dated as of the Execution Time, in form
and substance satisfactory to the Representative, together with signed or
reproduced copies of such letter for each of the other Underwriters, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus.
(g) At the Closing Date, the Representative shall have received from
Coopers & Lybrand L.L.P. a letter, dated such date, to the effect that they
reaffirm the statements made in the letter furnished pursuant to paragraph
(f) of this Section 6, except that the specified date referred to shall be a
date not more than three days prior to Closing Date.
References to the Prospectus in paragraphs (f) and (g) in this Section
6 include any supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraphs (f) and (g) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the judgment of the
Representative, so material and adverse as to make it impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Registration Statement
<PAGE>
21
(exclusive of any amendment thereof) and the Prospectus (exclusive of any
supplement thereto).
(i) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the A- rating of Farm Family by A.M. Best
Company Inc. and (ii) except as and to the extent disclosed in the Registration
Statement, A.M. Best shall not have indicated that it has under surveillance or
review, with possible negative implications, its rating of Farm Family.
(j) Prior to the Closing Date, the Company and Farm Family shall have
furnished to the Representative such further information, certificates and
documents as the Representative may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representative and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representative. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
7. Reimbursement of Underwriters' Expenses. If the sale of the
---------------------------------------
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 11 hereof or because of any
refusal, inability or failure on the part of the Company or Farm Family to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will, subject to the
approval of the Superintendent, if required, reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities. The Company
shall use its reasonable best efforts to obtain any such approval of the
Superintendent which may be required.
8. Indemnification and Contribution. (a) The Company and, subject
--------------------------------
to Section 9 hereof, Farm Family agree to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or
<PAGE>
22
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in any
amendment thereof, or in any Preliminary Prospectus or the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
-------- -------
that neither the Company nor Farm Family will be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representative specifically for inclusion therein. The foregoing indemnity
agreement with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter (or any person who controls such Underwriter within
the meaning of either the Act or the Exchange Act) from whom the person
asserting any such loss, claim, damage or liability purchased Securities if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of such
Securities to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage or
liability. This indemnity agreement will be in addition to any liability which
the Company or Farm Family may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company and Farm Family, each of their respective directors, officers,
employees and agents, and each person who controls the Company and Farm Family
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company by or on
behalf of such Underwriter through the Representative specifically for inclusion
in the documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any Underwriter may
otherwise have. The Company and Farm Family acknowledge that the statements set
forth in the last paragraph of the cover page, the first paragraph of the inside
cover page and under the heading "Underwriting" in any Preliminary Prospectus
and the Prospectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any Preliminary Prospectus
or the Prospectus,
<PAGE>
23
and you, as the Representative, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
-------- -------
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, which consent
shall not be unreasonably withheld, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding. An indemnified party
will not, without the prior written consent of the indemnifying parties, which
consent shall not be
<PAGE>
24
unreasonably withheld, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnifying parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnifying party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Underwriters and, subject to
Section 9 hereof, Farm Family agree to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which the Company, Farm Family and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and Farm Family on the one hand and by the
Underwriters on the other from the offering of the Securities; provided,
--------
however, that in no case shall any Underwriter (except as may be provided in any
- -------
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company, Farm Family and the Underwriters shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and Farm Family on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company and Farm Family shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses), and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company and Farm Family or by the Underwriters. The Company, Farm Family
and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 8, each person
who controls an Underwriter within the meaning of either the Act or the Exchange
Act and each director, officer, employee and agent of an Underwriter shall
<PAGE>
25
have the same rights to contribution as such Underwriter, and each person who
controls the Company and Farm Family within the meaning of either the Act or the
Exchange Act, each officer of the Company and of Farm Family who shall have
signed the Registration Statement and each director of the Company and Farm
Family shall have the same rights to contribution as the Company and Farm
Family, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. Limitations on Indemnification and Other Liability.
--------------------------------------------------
Notwithstanding anything to the contrary elsewhere in this Agreement, if the
Company or Farm Family (i) are required to provide indemnification or
contribution pursuant to paragraph (a) or (d) of Section 8 or (ii) otherwise
become liable for any breach of any of the representations and warranties of the
Company or Farm Family contained in this Agreement or for any failure of the
Company or Farm Family to perform or observe, or to cause to be performed or
observed, any covenant, agreement or condition to be performed or observed by
either of them pursuant to this Agreement, such indemnification or contribution
payable as described in clause (i) above or amounts payable with respect to such
liabilities described in clause (ii) above shall be subject to the following
limitation: any such amounts shall be payable solely by the Company in the first
instance, provided that, if the Company fails to fully satisfy a claim for
--------
indemnification or contribution referred to in clause (i) above or other
liability referred to in clause (ii) above, Farm Family shall pay such
additional amounts as are required to fully satisfy such claim or other
liability, provided, further, that such payments by Farm Family shall not, in
-------- -------
the aggregate, exceed the portion of the proceeds from the offering of the
Securities that was received by Farm Family.
10. Default by an Underwriter. If any one or more Underwriters shall
-------------------------
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
-------- -------
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Company or Farm Family. In the event of a default by any Underwriter as
<PAGE>
26
set forth in this Section 10, the Closing Date shall be postponed for such
period, not exceeding seven days, as the Representative shall determine in order
that the required changes in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company, Farm Family and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
11. Termination. This Agreement shall be subject to termination in
-----------
the absolute discretion of the Representative, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Representative, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Prospectus (exclusive of any supplement thereto).
12. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company and Farm Family or their officers and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter, the
Company or Farm Family or any of their officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
13. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Representative, will be mailed,
delivered or telegraphed and confirmed to Salomon Brothers Inc at Seven World
Trade Center, New York, New York, 10048; or, if sent to the Company or Farm
Family, will be delivered or telegraphed and confirmed to the Company or Farm
Family, whichever is applicable, at 344 Route 9W, Glenmont, New York 12077, or
mailed to it at P.O. Box 656, Albany, N.Y. 12201-0656, attention of the General
Counsel.
14. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and
<PAGE>
27
controlling persons referred to in Section 8 hereof, and no other person will
have any right or obligation hereunder.
15. Applicable Law. This Agreement will be governed by and construed
--------------
in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, Farm Family and the several Underwriters.
Very truly yours,
Farm Family Holdings, Inc.
By:__________________________
[Title]
Farm Family Mutual Insurance
Company
By:__________________________
[Title]
<PAGE>
28
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
By: _______________________
Vice President
For itself and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
<PAGE>
1
SCHEDULE I
Number of Shares of
Underwritten Securities
Underwriters To Be Purchased
- ------------ -----------------------
Salomon Brothers Inc.........................
-------------------------
Total....................................
-------------------------
<PAGE>
2
SCHEDULE II
PUBLICATIONS IN WHICH NOTICE OF HEARING APPEARED
(LeBoeuf to provide)
<PAGE>
EXHIBIT 5.2
[LETTERHEAD OF LEBOEUF, LAMB, GREENE & MACRAE, L.L.P. APPEARS HERE]
July 16, 1996
Farm Family Holdings, Inc.
344 Route 9W
Glenmont, New York 12077
Re: Registration Statement on Form S-1 (File 333-4446
of Farm Family Holdings, Inc. (the "Registration
Statement")
-------------------------------------------------
Dear Ladies and Gentlemen:
We are acting as counsel to Farm Family Holdings, Inc., a Delaware
corporation (the "Company"), in connection with the proposed issue and sale and
sale of up to 2,836,020 shares of the Company's common stock, par value $.01 per
share (the "Shares"), pursuant to a post-effective amendment (the "Post-
Effective Amendment") to the Registration Statement to be filed with the
Securities and Exchange Commission on July 16, 1996. Capitalized terms not
otherwise defined herein have the meaning set forth in the Post-Effective
Amendment.
We have examined such corporate records, certificates and other
documents as we have considered necessary for the purposes hereof. In such
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity to the original
documents of all documents submitted to us as copies and the authenticity of the
originals of such latter documents. As to any facts material to our opinion, we
have, when relevant facts were not independently established, relied upon the
aforesaid records, certificates and documents.
<PAGE>
Farm Family Holdings, Inc.
July 16, 1996
Page 2
Based on the foregoing, we are of the opinion that upon issuance,
delivery and payment therefor in the manner described in the Registration
Statement and in accordance with the terms of the underwriting agreement (the
form of which is filed as Exhibit 1.1 to the Registration Statement), the Shares
will be duly authorized, validly issued, fully paid and nonassessable.
Our opinion set forth herein is limited in all cases to matters
arising under the laws of the State of New York and the General Corporation Law
of the State of Delaware. We consent to the use of this opinion as an Exhibit
to the Registration Statement and to the reference to our firm under the caption
"Legal Matters" in the Prospectus that is a part of the Registration Statement.
In giving such consent, we do not thereby concede that we are within the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission thereunder.
Very truly yours,
LeBOEUF, LAMB, GREENE &
MacRAE, L.L.P.
<PAGE>
1
AMENDED AND RESTATED
EXPENSE SHARING AGREEMENT
-------------------------
This Amended and Restated Expense Sharing Agreement, made effective as of
February 14, 1996, by and among Farm Family Mutual Insurance Company ("FFMIC"),
Farm Family Life Insurance Company ("FFLIC"), and Farm Family Holdings, Inc.
("FFH").
WHEREAS, FFMIC and FFLIC entered into an Expense Sharing Agreement,
effective as of January 1, 1996 (the "Agreement"), providing for the sharing of
certain expenses between the parties and defining the methods to be used for
allocating such expenses; and
WHEREAS, FFMIC and FFLIC wish to amend and restate the Agreement, for the
purpose of making FFH a party; and
WHEREAS, FFH wishes to become a party to the Agreement, as amended and
restated, for the purpose of sharing certain expenses with FFMIC and FFLIC using
the methodology described therein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and intending to be legally bound hereby, FFMIC,
FFLIC and FFH agree that the text of the Agreement is hereby amended and
restated, effective February 14, 1996, to read in full as follows:
<PAGE>
2
1. Methods of Allocation. Subject to New York Insurance Law and
---------------------
Regulations, the methods for allocating expenses shared pursuant to this
Agreement shall be those used by the parties for internal cost distribution
including, where appropriate, time records prepared at least annually for this
purpose.
As used in this Agreement, the following capitalized terms shall have the
following meanings:
(a) Weighted Time Method. Weighted Time Method means the method of
--------------------
allocation based on a series of ratios derived from weighted time studies
conducted from time to time for the purpose of quantifying the efforts of
directors, officers and employees as applied to each party.
(b) Written Premium Method. Written Premium Method means the method
----------------------
of allocation based on the ratio of (i) the annual amount of direct written
premium written by each individual party to this Agreement as reported in the
statements filed with the New York Insurance Department to (ii) the annual
amount of direct written premium written by all parties to this Agreement in the
aggregate as reported in the statements filed with the New York Insurance
Department. Such direct written premiums for clauses (i) and (ii) shall be
calculated as gross premiums less return premiums.
(c) Actual Usage. Actual Usage means the estimated actual hours (or
------------
fractions thereof) of use benefiting a party.
<PAGE>
3
2. Direct Expenses. All expenses for goods, services or facilities that
---------------
are incurred for the sole benefit of any party shall be charged to the party for
whose benefit such expenses were incurred at cost.
3. Shared Expenses. If any party incurs an expense for goods, services,
---------------
or facilities that benefits the other parties to this Agreement, then that
expense shall be shared among the parties on a reasonable and equitable basis.
Unless otherwise agreed to by the parties hereto the following basis of
allocation shall be used:
(a) Salaries. Salaries and expenses related to officers and employees,
--------
including but not limited to employee benefits and payroll taxes, shall be
allocated pro rata among the parties according to the Weighted Time Method.
(b) Directors' Expenses. Directors' expenses shall be allocated pro
-------------------
rata among the parties according to the Weighted Time Method.
(c) Office Space. (i) Home office costs will be shared between FFMIC
-----------------
and FFLIC pursuant to a presently existing lease between these companies, dated
July 1, 1988, as amended. FFH agrees to reimburse FFMIC for its share of Home
Office costs according to the Weighted Time Method. (ii) The costs for all other
joint office space shall be allocated among the parties according to the
Weighted Time Method.
(d) Fixed Assets. Where fixed assets, including but not limited to
------------
office equipment, furniture, computer equipment and motor vehicles, are held in
the name of one party and used jointly by the parties, the annual depreciation
or costs of such assets shall be allocated pro rata among the parties according
to the Weighted Time Method.
<PAGE>
4
(e) General Expenses. (i) General expenses, including but not
----------------
limited to postage, telephone, equipment rental, books and subscriptions, shall
be allocated pro rata among the parties according to the Weighted Time Method.
(ii) The costs associated with conferences and meetings shall be allocated pro
rata among the parties according to the Written Premium Method. (iii) The costs
of electronic data processing services shall be allocated pro rata among the
parties according to Actual Usage.
(f) Advertising. Advertising expenses shall be allocated pro rata
-----------
among the parties according to the Written Premium Method.
(g) Other Shared Expenses. All other shared expenses, if any, shall
---------------------
be allocated among the parties in accordance with the applicable New York
Insurance Law and Regulations, as the same may be amended from time to time.
4. Modification of Allocations. The methods and bases used to allocate
---------------------------
the expenses shared pursuant to this Agreement shall be reviewed, at least
annually, and modified and adjusted by the mutual agreement of the parties
hereto where necessary or appropriate to reflect fairly and equitably the actual
incidence of cost incurred by the parties.
To the extent that any allocation methodology set forth herein is
determined to be contrary to, or in violation of, an existing New York Insurance
Law or Regulation, the parties agree that this Agreement shall be automatically
conformed to comply with said Law or Regulation.
5. Payment. The amounts due hereunder shall be determined at the end of
-------
each month using the same accounting principles and practices used for filing
quarterly and
<PAGE>
5
annual statements with the New York Insurance Department. All charges under this
Agreement shall be paid within fifteen (15) days following the end of each
month.
6. Termination and Modification. This Agreement or any part thereof shall
----------------------------
remain in effect until terminated in whole or in part by mutual consent or by
any party upon giving at least 60 days advance written notice.
This Agreement may be amended only by mutual consent in writing signed by
the parties.
7. Settlement on Termination. No later than thirty (30) days after the
-------------------------
effective date of termination of this Agreement, each party shall deliver to the
other parties a detailed written statement of all charges incurred and not
included in any statement prior to the effective date of termination. The
amount owed hereunder shall be due and payable within thirty (30) days of
receipt of such statement.
8. Assignment. This Agreement and any rights pursuant hereto shall not be
----------
assignable by any party hereto, except by operation of law. Nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto, or their respective legal successors, any rights, remedies,
obligations or liabilities, or to relieve any person other than the parties
hereto, or their respective legal successors, from any obligations or
liabilities that would otherwise be applicable.
9. Governing Law. This Agreement is made pursuant to and shall be
-------------
governed by, interpreted under, and the rights of the parties determined in
accordance with the laws of the State of New York.
<PAGE>
6
10. Notice. All notices, statements or requests provided for hereunder
------
shall be in writing and shall be deemed to have been duly given when delivered
by hand to an officer of the other party, or when deposited with the U.S. Postal
Service, as certified or registered mail, postage prepaid, addressed:
(a) If to FFMIC to:
Farm Family Mutual Insurance Company
PO. Box 656
Albany, New York 12201
Attn: Corporate Secretary
(b) If to FFLIC to:
Farm Family Life Insurance Company
PO. Box 656
Albany, New York 12201
Attn: Corporate Secretary
(c) If to FFH to:
Farm Family Holdings, Inc.
P.O. Box 656
Albany, New York 12201
Attn: Corporate Secretary
<PAGE>
7
or to such person or place as each party may from time to time designate by
written notice sent as aforesaid.
11. Headings. The headings of the various paragraphs of this Agreement
--------
are for convenience only, and shall be accorded no weight in the construction of
this Agreement.
12. Entire Agreement. This Agreement, together with such Amendments as
----------------
may from time to time be executed in writing by the parties, constitutes the
entire Agreement among the parties with respect to the subject matter hereof.
<PAGE>
8
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers as of the date and year first above
written.
FARM FAMILY MUTUAL INSURANCE COMPANY
BY: /s/ Charles E. Simon
--------------------------------
Charles E. Simon
Senior Vice President and Chief Financial Officer
FARM FAMILY LIFE INSURANCE COMPANY
BY: /s/ Philip P. Weber
--------------------------------
Philip P. Weber
Executive Vice President and Chief Executive Officer
FARM FAMILY HOLDINGS, INC.
BY: /s/ Philip P. Weber
--------------------------------
Philip P. Weber
President and Chief Executive Officer
<PAGE>
EXHIBIT 23.1
COOPERS COOPERS & LYBRAND L.L.P.
&LYBRAND a professional services firm
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-1 (File No.
333-4446) of our reports dated February 13, 1996, on our audits of the financial
statements of Farm Family Mutual Insurance Company and Subsidiary and our report
dated April 19, 1996 on our audit of the balance sheet of Farm Family Holdings,
Inc.. We also consent to the reference to our firm under the caption "Experts"
and in the tables "Summary Consolidated Financial Data" and "Selected
Consolidated Financial Data."
COOPERS & LYBRAND L.L.P.
Albany, New York
July 16, 1996
