FFG FBL Financial Group Inc

PROPOSAL NO. 3

Adjournment PROPOSAL

You are being asked by FBL to approve a proposal that will give the Board authority to adjourn the Special Meeting to a later date or time if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the Merger Agreement if there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement.

CAPITAL RETURNS urges you to vote “AGAINST” THE ADJOURNMENT proposal ON THE ENCLOSED [COLOR] PROXY CARD and intendS to vote ITS shares “against” this proposal.

Consequences of Defeating the FBL Merger Proposals

The approval of the Merger Agreement Proposal by FBL shareholders is a condition to the obligations of FBPCIC and FBL to complete the Merger. Under specified circumstances, FBL and/or FBPCIC may be required to reimburse the other party for the expenses it incurred in connection with the Merger Agreement. For example, FBL will be required to reimburse FBPCIC reasonable out-of-pocket fees and expenses (including reasonable legal fees and expenses) up to $5,279,229 (the “Fee Reimbursement”) if FBPCIC or FBL terminates the Merger Agreement because a proposal to adopt the Merger Agreement was submitted to a vote of shareholders of FBL and not approved. If the Merger Agreement Proposal is not approved by FBL shareholders, the Merger cannot be consummated and, instead, FBL will remain a public company and such shares of Common Stock will continue to be registered under the Exchange Act, and listed and traded on the New York Stock Exchange. FBL has agreed to pay FBPCIC a termination fee of $18,477,300 (the “Termination Fee”) if FBPCIC terminates the Merger Agreement following an adverse Company recommendation or FBL willfully and materially breaches its non-solicitation or related covenants under the Merger Agreement as described below and in the FBL Proxy Statement.

Pursuant to the Merger Agreement, except as described in the FBL Proxy Statement, FBL will not, nor will it authorize or permit any of its subsidiaries or any of its or their respective officers, directors or employees (in their capacities as such) to, and it will direct its investment bankers, attorneys, accountants, consultants and other advisors and representatives (we refer to such officers, directors and employees (in their capacities as such) and investment bankers, attorneys, accountants, consultants and other advisors or representatives, collectively, as “representatives”) not to, directly or indirectly: (i) initiate, solicit, encourage, induce, or knowingly facilitate or assist any inquiries or the making, submission, announcement or commencement of any proposal or offer that constitutes, or would reasonably be expected to lead to, any acquisition proposal; (ii) approve, adopt or recommend, or propose to approve, adopt or recommend, any Acquisition Proposal (as defined in the FBL Proxy Statement) or execute or enter into any contract, binding letter of intent or agreement in principle relating to, or that would reasonably be expected to lead to any acquisition proposal (other than a confidentiality agreement between FBL and a person making an acquisition proposal entered into in accordance with the Merger Agreement and on terms and conditions customary with respect to transactions of the nature contemplated by such acquisition proposal (an “acceptable confidentiality agreement”)); (iii) enter into any contract or agreement in principle requiring FBL to abandon, terminate or fail to consummate the merger or any other transactions contemplated by the Merger Agreement or breach its obligations thereunder, or propose or agree to do any of the foregoing; (iv) engage in, continue or otherwise participate in any discussions or negotiations regarding, or provide or furnish any non-public information or data relating to FBL or any of its subsidiaries or afford access to the business, properties, assets, books and records or personnel of the Company or any of its subsidiaries to any person (other than FBPCIC, Merger Sub, or any of their respective affiliates or representatives) with the intent to initiate, solicit, encourage, induce or assist with the making, submission, announcement or commencement of any proposal or offer that constitutes, or could reasonably be expected to lead to, any acquisition proposal; or (iv) otherwise knowingly facilitate any effort or attempt to make any acquisition proposal.

As described in the FBL Proxy Statement, the Company has agreed that it will, and will cause each of its affiliates and its or their respective officers, directors or employees (in their capacities as such) and direct its other representatives to, immediately cease all solicitations, discussions, negotiations and access to nonpublic information with, to or by any person (other than FBPCIC, Merger Sub, or any of their respective affiliates or representatives) that may be ongoing as of the date of the Merger Agreement with respect to any proposal that constitutes or would reasonably be expected to lead to an acquisition proposal.

As described in the FBL Proxy Statement, if, prior to the time shareholders approve the proposal to adopt the Merger Agreement, (i) FBL receives an unsolicited bona fide written acquisition proposal that did not result from FBL or its representatives taking any actions prohibited under the Merger Agreement, (ii) the Special Committee determines in good faith, after consultation with its outside financial advisors and outside legal counsel, that the acquisition proposal constitutes or would reasonably be expected to lead to a superior proposal and (iii) after consultation with its outside financial advisors and outside legal counsel, the Special Committee determines that failure to take the actions below with respect to such acquisition proposal would be inconsistent with its fiduciary duties under Iowa law, then FBL may in response to such acquisition proposal: (a) furnish access and non-public information with respect to FBL and its subsidiaries to the person who has made such acquisition proposal pursuant to an acceptable confidentiality agreement meeting certain requirements specified by the Merger Agreement (as long as all such information provided to such person has previously been provided to FBPCIC or is provided to FBPCIC prior to or within the 24-hour period following the time at which it is provided to such person) and (b) participate in discussions and negotiations with such person regarding such acquisition proposal.

VOTING AND PROXY PROCEDURES

According to the FBL Proxy Statement, only shareholders of record on the Record Date will be entitled to notice of, and to vote at, the Special Meeting. Each share of Common Stock Common Stock is entitled to one vote per share and each share of Series B Preferred Stock is entitled to two votes per share. Shareholders who sell shares of Common Stock before the Record Date (or acquire them without voting rights after the Record Date) may not vote such shares of Common Stock.

Shares of Common Stock represented by properly executed [COLOR] proxy cards will be voted at the Special Meeting as marked and, in the absence of specific instructions, will be voted AGAINST the Merger Agreement Proposal, AGAINST the Compensation Proposal, and AGAINST the Adjournment Proposal, and, in the discretion of the persons named as proxies, on all other matters as may properly come before the Special Meeting.

QUORUM; BROKER NON-VOTES; DISCRETIONARY VOTING

According to the FBL Proxy Statement, the presence by the holders of a majority of each of the shares of Class A Common Stock, the Class B Common Stock and Series B Preferred Stock of the Company entitled to vote on the Record Date will constitute a quorum. Proxies received but marked as abstentions will be included in the calculation of the number of shares considered to be present at the Special Meeting for purposes of the quorum determination.

According to the FBL Proxy Statement, if you hold shares of Common Stock in “street name” through a broker, bank, or other nominee, you should refer to the proxy card or the information forwarded by such broker, bank or other nominee to see what voting options are available to you. Without your specific instruction, a broker, bank or other nominee may only vote your shares on “routine” proposals and may not vote your shares on “non-routine” matters. It is expected that the FBL Merger Proposals to be voted on at the Special Meeting are considered “non-routine” proposals which your bank, broker, or other nominee cannot vote on your behalf, resulting in a “broker non-vote.” As a result, if you hold your shares of Common Stock in “street name” and you do not provide voting instructions, your shares of Common Stock will have the same effect as a vote “against” the Merger Agreement Proposal, but shall be of no effect with respect to the Compensation Proposal and shall be of no effect with respect to the Adjournment Proposal.

VOTES REQUIRED FOR APPROVAL

Approval of the Merger Agreement Proposal: According to the FBL Proxy Statement, the affirmative vote of (i) holders of at least a majority of all outstanding shares of Class A Common Stock and Series B Preferred Stock, voting together as a single class, (ii) holders of at least a majority of all outstanding shares of Class B Common Stock and (iii) holders of at least a majority of all outstanding shares of Common Stock held by all of the holders of outstanding shares of Common Stock (excluding IFBF and its affiliates, FBPCIC and its affiliates, and the directors and officers of IFBF, FBPCIC and each of their respective affiliates). Pursuant to the Company’s Fifth Restated Bylaws, as amended, and Restated Articles of Incorporation, each of the shares of Class A Common Stock and Class B Common Stock are entitled to one vote per share and shares of Series B Preferred Stock are entitled to two votes per share. FBL has indicated that abstentions and broker non-votes will have the same effect as a vote “against” the approval of the Merger Agreement Proposal.

Approval of the Compensation Proposal: According to the FBL Proxy Statement, the approval of the Compensation Proposal requires the affirmative vote of (i) holders of at least a majority of the shares of Class A Common Stock and shares of Series B Preferred Stock present or represented and entitled to vote either in person or by proxy, voting as a single class and (ii) holders of at least a majority of the shares of Class B Common Stock present or represented and entitled to vote either in person or by proxy. FBL has indicated that abstentions from voting will have the same effect as a vote “against” the Compensation Proposal.

Approval of the Adjournment Proposal (if necessary): According to the FBL Proxy Statement, the approval of Adjournment Proposal requires the affirmative vote of (i) holders of at least a majority of the shares of Class A Common Stock and shares of Series B Preferred Stock present or represented and entitled to vote either in person or by proxy, voting as a single class and (ii) holders of at least a majority of the shares of Class B Common Stock present or represented and entitled to vote either in person or by proxy. FBL has indicated that abstentions from voting will have the same effect as a vote “against” the Adjournment Proposal. The Company has indicated that abstentions will have the same effect as a vote “against” the Adjournment Proposal.

REVOCATION OF PROXIES

Shareholders of the Company may revoke their proxies at any time prior to exercise by attending the Special Meeting and voting in person. Your attendance alone at the Special Meeting will not in and of itself constitute revocation of a proxy. The delivery of a subsequently dated proxy which is properly completed will constitute a revocation of any earlier proxy. The revocation may be delivered either to Capital Returns in care of Saratoga at the address set forth on the back cover of this Proxy Statement or to the Secretary of the Company to Secretary, FBL Financial Group, Inc., 5400 University Avenue, West Des Moines, Iowa 50266, or any other address provided by the Company. Although a revocation is effective if delivered to the Company, we request that either the original or photostatic copies of all revocations be mailed to Capital Returns in care of Saratoga at the address set forth on the back cover of this Proxy Statement so that we will be aware of all revocations and can more accurately determine if and when proxies have been received from the holders of record on the Record Date of a majority of the outstanding shares of Common Stock. Additionally, Saratoga may use this information to contact shareholders who have revoked their proxies in order to solicit later dated proxies against the FBL Merger Proposals.

SOLICITATION OF PROXIES

The solicitation of proxies pursuant to this Proxy Statement is being made by Capital Returns. Proxies may be solicited by mail, facsimile, telephone, Internet, in person and by advertisements.

Capital Returns has entered into an agreement with Saratoga Proxy Consulting LLC (“Saratoga”) for solicitation and advisory services in connection with this solicitation, for which Saratoga will receive a fee not to exceed $_______, together with reimbursement for its reasonable out-of-pocket expenses, and will be indemnified against certain liabilities and expenses, including certain liabilities under the federal securities laws. Saratoga will solicit proxies from individuals, brokers, banks, bank nominees and other institutional holders. Capital Returns has requested banks, brokerage houses and other custodians, nominees and fiduciaries to forward all solicitation materials to the beneficial owners of the Shares they hold of record. Capital Returns will reimburse these record holders for their reasonable out-of-pocket expenses in so doing. It is anticipated that Saratoga will employ approximately __ persons to solicit shareholders for the Special Meeting.

The entire expense of soliciting proxies is being borne by Capital Returns. Costs of this solicitation of proxies are currently estimated to be approximately $______ (including, but not limited to, fees for attorneys, solicitors and other advisors, and other costs incidental to the solicitation). Capital Returns estimates that through the date hereof its expenses in connection with this solicitation are approximately $_____. Capital Returns intends to seek reimbursement from the Company of all expenses it incurs in connection with this solicitation. Capital Returns does not intend to submit the question of such reimbursement to a vote of security holders of the Company.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE SPECIAL MEETING

No other business will be conducted at the Special Meeting.

Please see the sections entitled “Proposal 1: Merger Agreement Proposal”, “Proposal 2: Compensation Proposal”, and “Proposal 3: Adjournment Proposal” for more about each of these proposals.

Beneficial Owner. If you hold shares of Common Stock in “street name” through a broker, bank or other nominee, you should follow the directions provided by it regarding how to instruct it to vote your common shares. Without those instructions, your shares of Common Stock of the Company will not be voted, which will have the same effect as voting “against” adoption of the Merger Agreement.

Participant in Farm Bureau 401(k) Savings Plan. If you hold shares of Common Stock in the Company stock fund investment option of the Farm Bureau 401(k) Savings Plan (the “Company Stock Fund”), the voting instructions you select pursuant to the applicable procedures under the 401(k) plan will be given to the Company Stock Fund trustee. All shares held in the Company Stock Fund are voted by trustee, but each participant may direct the trustee on how to vote the common shares credited to his or her account. Shares for which no timely voting instructions are received will be voted by the trustee in the same ratio as to those shares for which participant instructions are received.

According to the FBL Proxy Statement, the Merger cannot be completed unless the Merger Agreement Proposal is approved by FBL shareholders.

We urge you to demonstrate your opposition to the proposed Merger and to send a message to the Board that the proposed Merger is not in the best interest of FBL shareholders by signing, dating and returning the enclosed [COLOR] proxy card as soon as possible.

We take no responsibility for the accuracy or completeness of information contained in the FBL Proxy Statement. Except as otherwise noted herein, the information in this Proxy Statement concerning the Company has been taken from or is based upon documents and records on file with the SEC and other publicly available information.

We urge you to carefully consider the information contained in this Proxy Statement and then support our efforts by signing, dating, and returning the enclosed [COLOR] proxy card today to vote AGAINST the FBL Merger Proposals.

ADDITIONAL PARTICIPANT INFORMATION

The members of Capital Returns are participants in this solicitation. The principal business of Capital Returns Master is investing in securities. Capital Returns Management serves as the investment manager of Capital Returns Master. Mr. Bobman serves as President of Capital Returns Management.

The address of the principal office of each of Capital Returns Master, Capital Returns Management, and Mr. Bobman is 641 Lexington Avenue, 18th Floor, New York, NY 10022.

As of the date hereof, Capital Returns Master directly owned 130,000 shares of Class A Common Stock. As the investment manager of Capital Returns Master, Capital Returns Management may be deemed to beneficially own the 130,000 shares of Class A Common Stock owned directly by Capital Returns Master. Mr. Bobman, as President of Capital Returns Management, may be deemed to beneficially own the 130,000 shares of Class A Common Stock owned directly by Capital Returns Master.

The shares of Class A Common Stock purchased by Capital Returns Master were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases, except as otherwise noted, as set forth in Schedule I.

As set forth on Schedule I attached hereto, Capital Returns Master purchased over the counter market American-style call options referencing an aggregate of 61,500 shares of Class A Common Stock, which had an exercise price of $55.00 per share and expired on January 15, 2021 (the “January 2021 Call Options”). Capital Returns Master sold short certain of the January 2021 Call Options in the over the counter market referencing an aggregate of 5,000 shares of Class A Common Stock. Additionally, Capital Returns Master exercised the remaining January 2021 Call Options and thereby acquired an aggregate of 56,500 shares of Class A Common Stock. Accordingly, Capital Returns Master no longer has any exposure to the January 2021 Call Options.

Except as set forth in this Proxy Statement (including the Schedules hereto), (i) during the past 10 years, no participant in this solicitation has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); (ii) no participant in this solicitation directly or indirectly beneficially owns any securities of the Company; (iii) no participant in this solicitation owns any securities of the Company which are owned of record but not beneficially; (iv) no participant in this solicitation has purchased or sold any securities of the Company during the past two years; (v) no part of the purchase price or market value of the securities of the Company owned by any participant in this solicitation is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding such securities; (vi) no participant in this solicitation is, or within the past year was, a party to any contract, arrangements or understandings with any person with respect to any securities of the Company, including, but not limited to, joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits; (vii) no associate of any participant in this solicitation owns beneficially, directly or indirectly, any securities of the Company; (viii) no participant in this solicitation owns beneficially, directly or indirectly, any securities of any parent or subsidiary of the Company; (ix) no participant in this solicitation or any of his or its associates was a party to any transaction, or series of similar transactions, since the beginning of the Company’s last fiscal year, or is a party to any currently proposed transaction, or series of similar transactions, to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeds $120,000; (x) no participant in this solicitation or any of his or its associates has any arrangement or understanding with any person with respect to any future employment by the Company or its affiliates, or with respect to any future transactions to which the Company or any of its affiliates will or may be a party; and (xi) no participant in this solicitation has a substantial interest, direct or indirect, by securities holdings or otherwise, in any matter to be acted on at the Special Meeting.

There are no material proceedings to which any participant in this solicitation or any of his or its associates is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.