AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

among

ALFA CORPORATION,

ALFA MUTUAL INSURANCE COMPANY,

ALFA MUTUAL FIRE INSURANCE COMPANY

and

ALFA DELAWARE MERGER SUB, INC.

Dated as of November 4, 2007

TABLE OF CONTENTS

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), is dated as of November 4, 2007, among Alfa Corporation, a Delaware corporation (the “ Company ”), Alfa Mutual Insurance Company, an Alabama corporation (“ AMI ”), Alfa Mutual Fire Insurance Company, an Alabama corporation (“ AMF ”) (AMI and AMF are together, the “ Mutual Group ”), and Alfa Delaware Merger Sub, Inc., a Delaware corporation (“ Merger Sub ”).

RECITALS

WHEREAS, the boards of directors of the Mutual Group and Merger Sub have approved and declared advisable the merger of Merger Sub with and into the Company (the “ Merger ”) upon the terms and subject to the conditions set forth in this Agreement and have approved and declared advisable this Agreement;

WHEREAS, the board of directors of the Company, upon the recommendation of a special committee of the board of directors of the Company consisting solely of independent directors not affiliated with the Mutual Group (the “ Special Committee ”), has ( i ) determined that the Merger and the other transactions contemplated hereby are fair to and in the best interests of the Company and its stockholders other than the Mutual Group and its Affiliates, ( ii ) approved and declared advisable this Agreement, the Merger and the transactions contemplated hereby, ( iii ) resolved to recommend to such stockholders their approval of the Merger and this Agreement, and ( iv ) approved, for purposes of Section 203 of the DGCL, the transactions contemplated hereby; and

WHEREAS, the Company, the Mutual Group and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with this Agreement.

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:

ARTICLE I

Definitions

1.1 Certain Defined Terms . For purposes of this Agreement, unless the context requires otherwise, the following terms shall have the following meanings:

“ Affiliate ” when used with respect to any party shall mean any Person who is an “affiliate” of that party within the meaning of Rule 405 promulgated under the Securities Act.

“ Aggregate Merger Consideration ” means the aggregate Per Share Merger Consideration required to be paid under the terms of this Agreement, including for Shares subject to Company Awards.

“ Bankruptcy and Equity Exception ” means bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

“ Business Day ” means any day ending at 11:59 P.M. (eastern time) other than a Saturday or Sunday or a day on which banks are required or authorized to close in the City of New York.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Company Award ” means any Restricted Share or Company Option.

“ Company Material Adverse Effect ” means a material adverse effect on the financial condition, assets, liabilities, business or results of operations of the Company and its Subsidiaries, taken as a whole; provided , however , that any effect to the extent resulting from any of the following, in and of itself or themselves, shall not constitute, and shall not be taken into account in determining whether there has been or will be, a Company Material Adverse Effect:

(A) changes in general economic, regulatory or political conditions or changes generally affecting the securities or financial markets;

(B) any action required to be taken by the Company pursuant to this Agreement or taken by the Company at the written request of the Mutual Group;

(C) any actions, suits, claims, hearings, arbitrations, investigations or other proceedings relating to this Agreement, the Merger or the transactions contemplated by this Agreement by or before any Governmental Entity;

(D) any change in the market price or trading volume of securities of the Company, provided that this clause will not exclude any underlying change, event, circumstance, development or effect that may have resulted in, or contributed to, a decline in trading price or change in trading volume;

(E) a material worsening of current conditions caused by an act of terrorism or war (whether or not declared) occurring after the date of this Agreement;

(F) changes generally affecting auto insurers, homeowners and/or life insurers;

(G) seasonal fluctuations in the revenues, earnings, or other financial performance of the Company to the extent generally consistent in magnitude with prior years;

(H) any loss of, or adverse change in, the relationship of the Company with its customers or agents primarily caused by the pendency or the announcement of the transactions contemplated by this Agreement;

(I) any failure by the Company to meet any internal or published projections, forecasts or revenue or earnings predictions, provided that this clause

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will not exclude any underlying change, event, circumstance, development or effect that may have resulted in, or contributed to, any failure by the Company to meet such projections, forecasts or revenue or earnings predictions;

(J) changes in GAAP, SAP or applicable Law after the date hereof;

provided further that, with respect to clauses (A), (E), (F) and (J), such change, event, circumstance or development does not disproportionately adversely affect the Company and its Subsidiaries taken as a whole compared to other companies operating in the auto, homeowners and/or life insurance industries in the United States.

“ Company Portion ” means an amount to be determined by the Mutual Group prior to the Effective Time, taking into account the financing transactions described on Schedule 6.8 of the Mutual Group Disclosure Letter, but in no event to exceed $500 million.

“ Company Requisite Vote ” means the affirmative vote of the holders of at least a majority of the outstanding Shares entitled to vote on this Agreement and the Merger at a stockholders’ meeting duly called and held for such purpose.

“ Company Stock Plan ” means the Alfa Corporation 2005 Amended and Restated Stock Incentive Plan, which amended and restated the Alfa Corporation Amended and Restated Stock Incentive Plan (dated February 27, 2001), which amended and restated the 1993 Stock Incentive Plan.

“ Contract ” means any agreement, lease, license, contract, note, mortgage, indenture, arrangement or other obligation.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

“ GAAP ” means United States generally accepted accounting principles consistently applied.

“ Governmental Entity ” means any Insurance Authority or other domestic or foreign governmental or regulatory authority, agency, commission, body, court or other legislative, executive or judicial governmental entity or self-regulatory organization.

“ Insurance Authority ” means any federal or state regulatory authority governing insurance.

“ Insurance Law ” means any federal, state or local law, statute, ordinance, regulation or rule regulating the business and products of insurance and reinsurance and all applicable orders, bulletins, interpretations, opinions, circular letters and directives of Governmental Entities relating to the regulation of insurance.

“ IRS ” means the U.S. Internal Revenue Service.

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“ Law ” means any Insurance Law and any other federal, state or local law, statute or ordinance, or any rule, regulation, judgment, order, writ, injunction or decree of any Governmental Entity.

“ License ” means any permit, license, certification, approval, registration, consent, authorization, franchise, variance, exemption or order issued or granted by a Governmental Entity.

“ Lien ” means any lien, charge, pledge, security interest, claim or other encumbrance.

“ Mutual Group Material Adverse Effect ” means a material adverse effect on the financial condition, assets, liabilities, business or results of operations of the Mutual Group and its Subsidiaries (including the Company and its Subsidiaries), taken as a whole; provided , however , that any effect to the extent resulting from any of the following, in and of itself or themselves, shall not constitute, and shall not be taken into account in determining whether there has been or will be, a Mutual Group Material Adverse Effect:

(A) changes in general economic, regulatory or political conditions or changes generally affecting the securities or financial markets;

(B) any action required to be taken by the Mutual Group pursuant to this Agreement;

(C) any actions, suits, claims, hearings, arbitrations, investigations or other proceedings relating to this Agreement, the Merger or the transactions contemplated by this Agreement by or before any Governmental Entity;

(D) a material worsening of current conditions caused by an act of terrorism or war (whether or not declared) occurring after the date of this Agreement;

(E) changes generally affecting auto insurers, homeowners and/or life insurers;

(F) seasonal fluctuations in the revenues, earnings, or other financial performance of the Mutual Group to the extent generally consistent in magnitude with prior years;

(G) any loss of, or adverse change in, the relationship of the Mutual Group with its customers or agents primarily caused by the pendency or the announcement of the transactions contemplated by this Agreement;

(H) any failure by the Mutual Group to meet any internal or published projections, forecasts or revenue or earnings predictions, provided that this clause will not exclude any underlying change, event, circumstance, development or effect that may have resulted in, or contributed to, any failure by the Mutual Group to meet such projections, forecasts or revenue or earnings predictions;

(I) changes in GAAP, SAP or applicable Law after the date hereof;

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provided further that, with respect to clauses (A), (D), (E), and (I), such change, event, circumstance or development does not disproportionately adversely affect the Mutual Group and its Subsidiaries taken as a whole compared to other companies operating in the auto, homeowners and/or life insurance industries in the United States;

provided further that, any action contemplated by Section 7.6 of this Agreement shall not be taken into consideration in determining whether a Mutual Group Material Adverse Effect has occurred.

“ Nasdaq ” means The NASDAQ Global Select Market.

“ Person ” means any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity of any kind or nature.

“ Representatives ” means a Person’s officers, directors, employees, investment bankers, attorneys, accountants and other advisors or representatives.

“ SAP ” means applicable statutory accounting practices prescribed or permitted by an Insurance Authority or other applicable Governmental Entity.

“ SEC ” means the Securities and Exchange Commission.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

“ Subsidiary ” means, with respect to any Person, any other Person of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other persons performing similar functions is directly or indirectly owned or controlled by such Person and/or by one or more of its Subsidiaries. In no event shall Merger Sub be considered a “Subsidiary” of the Company for purposes of this Agreement,

“ Tax ” means any federal, state, local and foreign income, profits, franchise, gross receipts, environmental, customs duty, capital stock, severances, stamp, payroll, sales, employment, unemployment, disability, use, property, withholding, excise, production, value added, occupancy or other tax, duty or similar governmental assessment, together with all interest, penalties and additions imposed with respect to such amount and any interest in respect of such penalties and additions.

1.2 Index to Defined Terms . Each of the following terms is defined on the page of this Agreement set forth opposite such term:

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1.3 Construction; Absence of Presumption .

(a) For the purposes of this Agreement, ( i ) words (including capitalized terms defined herein) in the singular shall be held to include the plural and vice versa , and words (including capitalized terms defined herein) of one gender shall be held to include the other gender as the context requires; ( ii ) the terms “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement; ( iii ) Article and Section references are to the Articles and Sections to this Agreement, unless otherwise specified; ( iv ) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation”; ( v ) all references to any period of days shall be deemed to be to the relevant number of calendar days unless otherwise specified; and ( vi ) all references herein to “$” or dollars shall refer to United States dollars.

(b) The table of contents and headings herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.

(c) The parties have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

ARTICLE II

The Merger; Closing; Effective Time

2.1 The Merger . Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into the Company and the separate corporate existence of Merger Sub shall thereupon cease. The Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the “ Surviving Corporation ”), and the separate corporate existence of the Company, with all its rights, privileges, immunities, powers and franchises, shall continue unaffected by the Merger. The Merger shall have the effects specified in the Delaware General Corporation Law (the “ DGCL ”).

2.2 Closing . Unless otherwise mutually agreed in writing by the Company (at the direction of the Special Committee) and the Mutual Group, the closing of the Merger (the “ Closing ”) shall take place at the offices of Alston & Bird LLP, 90 Park Avenue, New York, New York, at 9:00 A.M. local time on the first Business Day (the “ Closing Date ”) following the day on which the last to be satisfied or waived of the conditions set forth in Article VIII (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions) shall be satisfied or waived in accordance with this Agreement.

2.3 Effective Time . As soon as practicable following the Closing, the Company (at the direction of the Special Committee) and the Mutual Group will cause a Certificate of Merger (the “ Delaware Certificate of Merger ”) to be executed, acknowledged and filed with the Secretary of State of the State of Delaware as provided in Section 251 of the DGCL. The Merger shall become effective at the time when the Delaware Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or at such later time as may be agreed upon by the parties in writing and specified in the Delaware Certificate of Merger (the “ Effective Time ”).

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ARTICLE III

Certificate of Incorporation, By-Laws, Officers and

Directors of the Surviving Corporation

3.1 Certificate of Incorporation . The certificate of incorporation of the Company as in effect immediately prior to the Effective Time shall, from and after the Effective Time, be the certificate of incorporation of the Surviving Corporation (the “ Charter ”), until duly amended as provided therein or by applicable Laws.

3.2 By-Laws . The by-laws of the Company in effect immediately prior to the Effective Time shall, from and after the Effective Time, be the by-laws of the Surviving Corporation (the “ By-Laws ”), until thereafter amended as provided therein or by applicable Laws.

3.3 Directors . The board of directors of Merger Sub at the Effective Time shall, from and after the Effective Time, be the directors of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Charter and the By-Laws.

3.4 Officers . The officers of the Company at the Effective Time shall, from and after the Effective Time, be the officers of the Surviving Corporation until their successors shall have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Charter and the By-Laws.

ARTICLE IV

Effect of the Merger on Capital Stock; Exchange of Certificates

4.1 Effect on Capital Stock . On the terms and subject to the conditions set forth in this Agreement:

(a) Merger Consideration . At the Effective Time, as a result of the Merger and without any action on the part of the holder of any capital stock of the Company, each share of the common stock, par value $1.00 per share, of the Company (a “ Share ”) issued and outstanding immediately prior to the Effective Time, other than the Excluded Shares (as defined below), shall be converted into the right to receive $22.00 per Share (the “ Per Share Merger Consideration ”). “ Excluded Shares ” means ( i ) Shares owned by the Mutual Group, ( ii ) Shares owned by Merger Sub, or by the Company or any of its wholly owned Subsidiaries, ( iii ) Shares subject to Company Awards, and ( iv ) Shares that are owned by stockholders who have perfected and not withdrawn a demand for appraisal rights pursuant to Section 262 of the DGCL (“ Dissenting Stockholders ”).

(b) Cancellation of Shares; Mutual Group-Owned Stock to Remain Outstanding . At the Effective Time:

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(i) all of the Shares (other than Excluded Shares referred to in clause ( i ) of Section 4.1(a)), as a result of the Merger and without any action on the part of the holder thereof, shall cease to be outstanding, shall be cancelled and shall cease to exist;

(ii) each certificate formerly representing any Shares (a “ Certificate ”) (other than any of the Excluded Shares) shall thereafter represent only the right to receive the Per Share Merger Consideration, without interest;

(iii) each Certificate formerly representing Shares owned by Dissenting Stockholders shall thereafter represent only the right to receive the payment to which reference is made in Section 4.2(f);

(iv) each Excluded Share referred to in clause ( ii ) of Section 4.1(a), as a result of the Merger and without any action on the part of the holder thereof, shall cease to be outstanding, shall be cancelled without payment of any consideration therefor and shall cease to exist;

(v) each Excluded Share referred to in clause ( iii ) of Section 4.1(a) shall be afforded the treatment provided in Section 4.3; and

(vi) each Excluded Share referred to in clause ( i ) of Section 4.1(a) shall remain outstanding without change.

(c) Merger Sub Stock . At the Effective Time, each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, automatically be converted into one million (1,000,000) shares of common stock of the Surviving Corporation.

4.2 Exchange of Certificates .

(a) Paying Agent . For the benefit of the holders of Shares (other than Excluded Shares), promptly following the Effective Time, ( i ) Mutual Group shall cause the Company to deposit, or cause to be deposited, with a paying agent selected by the Mutual Group with the Special Committee’s prior approval (such approval not to be unreasonably withheld, conditioned or delayed) (the “ Paying Agent ”), a cash amount in immediately available funds equal to the Company Portion less the amount to be paid by the Company pursuant to Section 4.3, and ( ii ) Mutual Group shall deposit, or shall cause to be deposited, with the Paying Agent a cash amount in immediately available funds equal to the amount necessary (when combined with the amount deposited by the Company pursuant to the foregoing subsection (i)) for the Paying Agent to make payments under Section 4.1(a) (the amounts so deposited with the Paying Agent under (i) and (ii) are referred to as “ Exchange Fund ”). The Paying Agent shall invest the Exchange Fund as directed by the Mutual Group, provided that such investments shall be in obligations of or guaranteed by the United States of America, in commercial paper obligations rated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, respectively, or in certificates of deposit, bank

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repurchase agreements or banker’s acceptances of commercial banks with capital exceeding $1 billion. Any interest and other income resulting from such investment shall become a part of the Exchange Fund, and any amounts in excess of the amounts payable under Section 4.1(a) shall be promptly returned to the Company; provided that no such investment or loss thereon shall reduce the amounts payable to holders of Shares pursuant to this Article IV.

(b) Exchange Procedures . Immediately after the Effective Time (and in any event within three Business Days thereafter), the Surviving Corporation shall cause the Paying Agent to mail to each holder of record of Shares (other than holders of Excluded Shares) ( i ) a letter of transmittal in customary form specifying that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates (or affidavits of loss in lieu thereof as provided in Section 4.2(e)) to the Paying Agent, such letter of transmittal to be in such form and have such other provisions as the Mutual Group and the Company may reasonably agree, and ( ii ) instructions for use in effecting the surrender of the Certificates (or affidavits of loss in lieu thereof as provided in Section 4.2(e)) in exchange for the Per Share Merger Consideration. Upon surrender of a Certificate (or affidavit of loss in lieu thereof as provided in Section 4.2(e)) to the Paying Agent in accordance with the terms of such letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor a cash amount in immediately available funds (after giving effect to any required tax withholdings as provided in Section 4.2(g)) equal to ( x ) the number of Shares represented by such Certificate (or affidavit of loss in lieu thereof as provided in Section 4.2(e)) multiplied by ( y ) the Per Share Merger Consideration, and the Certificate so surrendered shall forthwith be cancelled. No interest will be paid or accrued on any amount payable upon due surrender of the Certificates. In the event of a transfer of ownership of Shares that is not registered in the transfer records of the Company, a check for any cash to be exchanged upon due surrender of the Certificate may be issued to such transferee if the Certificate formerly representing such Shares is presented to the Paying Agent, accompanied by all documents reasonably required to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid or are not applicable.

(c) Transfers . From and after the Effective Time, there shall be no transfers on the stock transfer books of the Company of the Shares that were outstanding immediately prior to the Effective Time, except for Shares owned by the Mutual Group or any direct or indirect wholly owned subsidiary of the Mutual Group. If, after the Effective Time, any Certificate is presented to the Surviving Corporation, the Mutual Group or the Paying Agent for transfer, except for Shares owned by the Mutual Group or any direct or indirect wholly owned subsidiary of the Mutual Group, and pursuant to the terms of Section 4(f), it shall be cancelled and exchanged for a cash amount in immediately available funds (after giving effect to any required tax withholdings as provided in Section 4.2(g)) equal to ( x ) the number of Shares represented by such Certificate multiplied by ( y ) the Per Share Merger Consideration.

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(d) Termination of Exchange Fund . Any portion of the Exchange Fund (including the proceeds of any investments thereof) that remains unclaimed by the stockholders of the Company for one year after the Effective Time shall be delivered to the Surviving Corporation. Any holder of Shares (other than Excluded Shares) who has not theretofore complied with this Article IV shall thereafter look only to the Surviving Corporation for payment of the Per Share Merger Consideration (after giving effect to any required tax withholdings as provided in Section 4.2(g)) upon due surrender of its Certificates (or affidavits of loss in lieu thereof), without any interest thereon. Notwithstanding the foregoing, none of the Surviving Corporation, the Mutual Group, the Paying Agent or any other Person shall be liable to any former holder of Shares for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar Laws.

(e) Lost, Stolen or Destroyed Certificates . In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by the Mutual Group or the Surviving Corporation, the posting by such Person of a bond in customary amount and upon such terms as may be reasonably required by the Mutual Group or the Surviving Corporation as indemnity against any claim that may be made against it or the Surviving Corporation with respect to such Certificate, the Paying Agent will issue a check in the amount (after giving effect to any required tax withholdings) equal to the number of Shares represented by such lost, stolen or destroyed Certificate multiplied by the Per Share Merger Consideration.

(f) Appraisal Rights . No Person who has perfected a demand for appraisal rights pursuant to Section 262 of the DGCL shall be entitled to receive the Per Share Merger Consideration with respect to the Shares owned by such Person unless and until such Person shall have effectively withdrawn or lost such Person’s right to appraisal under the DGCL. Each Dissenting Stockholder shall be entitled to receive only the payment provided by Section 262 of the DGCL with respect to Shares owned by such Dissenting Stockholder. The Company shall give the Mutual Group the opportunity to direct all negotiations and proceedings with respect to demand for appraisal under the DGCL. The Company shall not, except with the prior written consent of the Mutual Group, voluntarily make any payment with respect to any demands for appraisal, offer to settle or settle any such demands or approve any withdrawal of any such demands.

(g) Withholding Rights . Each of the Mutual Group and the Surviving Corporation shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Shares such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code, or any other applicable state, local or foreign Tax Law. To the extent that amounts are so withheld by the Surviving Corporation or the Mutual Group, as the case may be, such withheld amounts ( i ) shall be remitted by the Mutual Group or the Surviving Corporation, as applicable, to the applicable Governmental Entity, and ( ii ) shall be treated for all purposes of this

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Agreement as having been paid to the holder of Shares in respect of which such deduction and withholding was made by the Surviving Corporation or the Mutual Group, as the case may be.

4.3 Treatment of Company Awards .

(a) In accordance with the terms of the Company Stock Plan, the Company shall provide that, immediately prior to the Effective Time, each option to purchase Shares (a “ Company Option ”) granted under the Company Stock Plan that, in each case, is outstanding and unexercised as of the Effective Time (whether vested or unvested) shall be cancelled, and the holder thereof shall be entitled to receive at the Effective Time from the Company, or as soon as practicable thereafter from the Surviving Corporation, in consideration for such cancellation, an amount in cash equal to the product of ( i ) the number of Shares previously subject to such Option, and ( ii ) the excess, if any, of the Per Share Merger Consideration over the exercise price per Share previously subject to such Option, less any required withholding taxes.

(b) The Company shall provide that, immediately prior to the Effective Time, each Share that is subject to a restricted share award that is outstanding immediately prior to the Effective Time and remains subject to vesting or other lapse restrictions pursuant to the Company Stock Plan (including “Career Shares” and Shares credited to restricted share awards as dividend equivalents) (each a “ Restricted Share ”) shall vest and become free of all such restrictions as of the Effective Time, and at the Effective Time the holder thereof shall, subject to this Article IV, be entitled to receive the Per Share Merger Consideration from the Company in exchange for each such Restricted Share, less any required withholding taxes.

(c) The Company (at the direction of the Special Committee) shall, after the date hereof, take all actions necessary to provide that any outstanding offering periods in effect as of the opening of business on the date hereof under the Company’s Employee Stock Purchase Plan or any other plan, program or arrangement intending to qualify as a stock purchase plan under Section 423 of the Code (the “ Company ESPP ”) shall continue through the next scheduled purchase date pursuant to their terms and shall ensure that no new offering periods thereunder shall commence following the date hereof.

(d) At or prior to the Effective Time, the Company (at the direction of the Special Committee) and the compensation committee of the board of directors of the Company, as applicable, shall adopt any resolutions and use its reasonable best efforts to effectuate the provisions of Section 4.3(a), 4.3(b) and 4.3(c). The Company (at the direction of the Special Committee) shall use its reasonable best efforts to ensure that from and after the Effective Time neither the Mutual Group nor the Surviving Corporation will be required to deliver Shares or other capital stock of the Company to any Person pursuant to or in settlement of Company Awards.

4.4 Adjustments to Prevent Dilution . In the event that the Company changes the number of Shares or securities convertible or exchangeable into or exercisable for

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Shares issued and outstanding prior to the Effective Time as a result of a reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, issuer tender or exchange offer, or other similar transaction, the Per Share Merger Consideration shall be equitably adjusted.

ARTICLE V

Representations and Warranties of the Company

Except as set forth in the corresponding schedules of the disclosure letter delivered to the Mutual Group by the Company concurrent with entering into this Agreement (the “ Company Group Disclosure Letter ”), the Company hereby represents and warrants to the Mutual Group and Merger Sub as follows:

5.1 Approval and Fairness .

(a) The Company has all requisite corporate power and authority and has taken all corporate action necessary in order to execute, deliver and perform its obligations under this Agreement, and to consummate the Merger, subject only to adoption of this Agreement by the Company Requisite Vote.

(b) The Special Committee has determined that the Merger and the other transactions contemplated by this Agreement are fair to, and in the best interests of, the holders of Shares other than the Mutual Group and its Subsidiaries, approved and declared advisable this Agreement, the Merger and the other transactions contemplated hereby, and resolved to recommend the Merger and adoption of this Agreement to the holders of Shares (the “ Company Recommendation ”). The board of directors of the Company has adopted a resolution approving this Agreement and declaring its advisability and has directed that this Agreement be submitted to the holders of Shares for their adoption.

(c) The Special Committee has received the written opinion of its financial advisor, Lazard Freres & Co. LLC, to the effect that, as of the date of such opinion, the Per Share Merger Consideration is fair to such holders (other than the Mutual Group and its Subsidiaries) from a financial point of view (a true and complete copy of which opinion has been delivered to the Mutual Group).

(d) Other than ( i ) the filings and/or notices pursuant to Section 2.3, ( ii ) the filing of applications and/or notices with Insurance Authorities and other Governmental Entities as set forth on Schedule 5.1(a) of the Company Disclosure Letter, and the approval of such applications or the expiration of any applicable waiting periods (the “ Company Approvals ”), and ( iii ) the filing with the SEC of the Proxy Statement and a Schedule 13E-3, in the case of clauses ( ii ) and ( iii ) to the knowledge of the Special Committee after due inquiry of the officers of the Company, no notices, reports or other filings are required to be made by the Company with, nor are any Licenses required to be obtained by the Company from, any Governmental Entity in connection with the execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the Merger and the other transactions contemplated hereby, except those that the failure to make or obtain would not, individually or in the

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aggregate, reasonably be expected to have a Company Material Adverse Effect or prevent or materially delay the ability of the Company to consummate the Merger and the other transactions contemplated b