Notice to Employees of Archer Daniels Midland Company of

Notice to Employees of Archer Daniels Midland Company

of Application for Authorization under

Prohibited Transaction Exemption 96-62, as Amended

You are hereby notified that Archer Daniels Midland Company ("ADM") has applied

to the U.S.

Department of Labor (the "DO!]) for authorization of a reinsurance transaction. The transaction

involves the reinsurance of risks and the receipt of premiums by Agrinational Insurance

Company (" Agrlnational"), a subsidiary of ADM, from insurance

contracts that

will fund

ADM's long-term disability insurance programs. The purpose of the authorization is to exempt

the transaction from certain of the prohibited transaction rules of the

Employee

Retirement

Income Security Act of 1974, as amended ("ERISA"). The authorization is necessary because

Agrinational is an affiliate of ADM. Due to the relationship between Agrinational and ADM,

such reinsurance might otherwise constitute a prohibited transaction under ERISA. This notice

informs you of the application to the DOL and certain changes to the ADM Omnibus Health &

Welfare Plan

for

Hourly Employees and the ADM Omnibus Health & Welfare Plan for Salaried

Employees (the "Plans"), and describes your right

to comment

to the DOL about the proposed

transaction.

The Plans

ADM is the sponsor of the Plans. The Plans provide long-term disability benefits to eligible

participants.

The Plans will provide this benefit to eligible participants under an insurance policy

(the "Policy"), issued by Aetna Life Insurance Company ("Aetna"), an unaffiliated insurer which

is licensed to conduct disability insurance business and has an A or better rating

from A.M. Best

Company or the equivalent from a similar rating agency.

Changes to the Plan

Agrinational intends to enter into an arrangement with Aetna, in which Aetna will reinsure with

Agrinational up to 100% of Aetna's risk under the Policy. Participants who

are

eligible to

receive benefits under the Policy, pursuant to the provisions of the Plans, will not be adversely

affected by the proposed reinsurance arrangement, as Aetna will remain fully liable for the

payment of long-term disability benefits under the Policy. In addition, in anticipation of the

Proposed Transaction, ADM is adding an enhanced benefit to the Plans by providing financial

planning services consultations with Ayco, L.P., a division of the Goldman Sachs Group, Inc.,

for all non-collectively

bargained hourly and salaried employees participating in the long-term

disability insurance programs under the

Plans without cost

the participants.

The value of this

enhanced benefit for each participant is in a range of $240 per year to $1,500 per year. ADM

will

mplement these

changes for bargaining unit employees if they are agreed to during

negotiations by the unions representing these hourly employees. In addition to the benefit

enhancement, the Plans will extend long-term disability benefit coverage eligibility to all non-

collectively bargained hourly employees and increase the minimum monthly long-term insurance

benefit from $50 to $100 for all non-collectively bargained hourly employees and salaried

employees.

The financial pl

ting

services benefit will provide all non-collectively bargained hourly and

salaried employees participating in the long-term disability insurance programs under the Plans

with Company-paid financial planning services, including personalized phone-based financial

counseling, financial planning web tools and financial education seminars.

The Plans do not

presently provide a financial planning services benefit

As stated above, the terms of the reinsurance agreement will not adversely affect the Plans'

benefits in arty way, as it is simply an internal arrangement between Agrinational and Aetna.

Aetna will insure the long-term disability benefits provided under the Plans.

Overview of Exemntion,Conditions end Representations

The following are the principal conditions and representations imposed by the DOL

authorization

full version of the draft authorization is set forth in the attached "Pending

Authorization" Appendix):

•



Agrinational is a party in interest with respect to the Plans, as described in section

3(14)(E) of ERISA, by virtue of its stock affiliation with ADM;

•

Agrinational is licensed to sell insurance or conduct reinsurance operations in at

least one State as defined in section 3(10) of ERISA.

For purposes of this

transaction,

Agrinatiomal is currently licensed to sell insurance or conduct

reinsurance operations in the State of Vermont;

•

Agrinational

has obtained a Certificate of Authority from the insurance

commissioner of the State of Vermont to transact the business of a captive

insurance

company, which has

neither been revoked nor suspended;

•

Agrination al has undergone an examination

by the

independent certified public

accounting firm of Saslow Lufkin & Buggy, LLP for its last completed taxable

year immediately prior to the taxable year of the reinsurance transaction.

•

Agrinational is licensed to conduct reinsurance transactions by a State whose law

requires that an actuarial review of reserves by conducted annually by

independent

firm of actuaries and reported to the appropriate regulatory authority;

•



The Plans will pay no more than adequate consideration for the insurance

contracts;

•



No commissions will be paid by the Plans with

respect

to the insurance

or the

reinsurance;

•

In the

initial

year of any contract for coverage of the long-term disability benefits

involving Agrinational, there will be an immediate and objectively determined

benefit

enhancement for

those

participants

and beneficiaries eligible

for

participation in the long-term disability benefits

in the form of increased benefits;



Section 3(10) of ERISA defines "State" to include any State of the United States, the ,District of Columbia,

Puerto Rico, the Virgin Islands, American Samoa, Guam, Wake Island

and the Canal

Zone.

In subsequent years, the formula used to calculate premiums by Aetna or any

successor insurer will be similar to formulae used by other insurers providing

comparable coverage under similar programs, the premium charge calculated

under the formula will be reasonable, and the premiums will be comparable to the

premium charged by the insurer and its competitors with the same or better rating

providing the same coverage under comparable programs;

•

The Plans will only contract for coverage of the long-term disability benefits with

insurers with a rating of A or better from A.M. Best Company or the equivalent

rating from another rating agency. The reinsurance arrangement between Aetna

and Agrinational will be indemnity reinsurance only (i.e., Aetna is not relieved of

liability to the Plans should Agrinational be unable or unwilling to cover any

liability arising from the reinsurance arrangement); and

•



Agrinational will retain an

independent fiduciary (the "Independent Fiduciary"),

atADM's expense, to analyze the transaction and render

opinion that the

requirements

listed above have been met. For purposes of this transaction, the

Independent Fiduciary is a person who:

Is not directly or indirectly, through one or more intermediaries,

controlling, controlled by, or under common control with ADM or Agrinational

(this relationship hereinafter referred to as an "Affiliate");



Is not an officer, director, employee of, or partner in, ADM or

Agrinational (or any Affiliate of either);



Is not a corporation or partnership in which ADM or Agrinational

has an ownership interest or is a partner;



Does not have an ownership interest in ADM or Agrinational, or

any of either's Affiliates;



Was not a fiduciary with respect to the long-term disability

insurance program prior to the appointment in connection with the proposed

transaction;



Has acknowledged in writing acceptance of fiduciary

responsibility and has agreed not to participate in any decision with respect to any

transaction in which the Independent Fiduciary has an interest that might affect its

best judgments as a fiduciary;



Has not received gross income from ADM or Agrinational, or their

Affiliates (including amounts received for services as Independent Fiduciary

under any prohibited transaction exemption granted by the DOL) for this fiscal

year in excess of five percent of its annual gross income from all sources for such

fiscal year; and



Has not acquired any property from, sold any property to, or

borrowed funds from ADM or Agrinational, or their Affiliates, during the period

that it serves as an Independent Fiduciary and continuing for a period of six

months after it ceases to be an Independent Fiduciary, or negotiates any such

transaction during the period that it serves as an Independent Fiduciary.

Independent Fiduciary

For purposes of this transaction, Agrinational has retained Milliman, Inc. ("Milliman") to serve

as the Independent Fiduciary.

Milliman will represent the interests of the Plans as the

Independent Fiduciary at all times with respect to the proposed transaction.

Mill man will

monitor compliance by the

parties with the terms and conditions of the proposed transaction, and

will take whatever action is necessary and appropriate to safeguard the interest of the Plans and

their participants and beneficiaries, with respect thereto, and to insure that the proposed

transaction remains in the interest of the Plans and its participants and beneficiaries.

Tentative Authorization of Proposed Transaction

Authorization of the DOL was requested under a procedure, Prohibited Transaction Exemption

96-62, 61 Fed. Reg. 39988 (July 31, 1996), as amended by 67 Fed. Reg. 44622 (July 3, 2002)

("PTE 96-62" the "EXPRO" exemption), which requires that at least two prior exemptions that

are substantially similar to the proposed transaction have been granted by the DOL.

ADM and Agrinational , have represented to the

DOL

that the proposed transaction is

substantially similar to three previous prohibited transaction exemptions that were granted by the

DOL within the requisite time period: (i) Prohibited Transaction Exemption 2000-48, 65 Fed.

Reg. 60452 (Oct. 11, 2000) (Columbia Energy Group); (ii) Prohibited Transaction Exemption

2003-07, 68 Fed. Reg. 23764 (May 5, 2003) (Archer Daniels Midland Company); and (iii) Final

Authorization 2003-32E (Nov. 7, 2003) (International Paper Company). In each of these

transactions, the

parties

proposed using their respective

captive

insurance companies to reinsure

employee benefits. In each case, the parties agreed to provide improved benefits, retain an

independent fiduciary, contract only withh insurers with an A rating or better from A.M. Best

Company or a similar rating agency, and arrange the transaction with the captivee as indemnity

insurance only.

further

description of the Columbia Energy Group and Archer Daniels

Midland Company transactions and the DOL's comments relating thereto may be found in the

notice of proposed exemptions published in the Federal Register at the following citations: PTE

2000-48, 65 Fed. Reg. 50237 (Aug. 17, 2000) and PTE 2003-07, 68 Fed. Reg. 10043 (March 3,

2003).

The proposed transaction described in this notice has met all of the requirements for tentative

authorization from the DOL under PTE 96-62. Unless the DOL otherwise notifies ADM, final

authorization under PTE 96-62 will be effective on January 25, 2009.

Your Right to Convent on Tentative Authorization

All interested persona have

the

right

to submit comments, if they choose, on the tentative

authorization. Comments

should be sent to the following address:

Employee

Benefits Sewrity Administration

Office of

Exemption Determinations, Division of Individual Exemptions

U.S.

Dep

ment

of Labor

200 Constitution Avenue,

N. W .,

Room N-5700

Wash i, D, C. 20210

Any come t should note that it relates to EXPRO Submission No. E-00612. All comments

must be received by the Department of Labor by January 20, 2009.

Comments or questions may

faxed or e-mailed to the DOL. The fax

number

is (202) 219-0204

and the e-mail address is vaughan.anna

a®doLgov.

In anticipation of the proposed transaction, ADM implemented the enhanced benefit, financial

planning services consultations with Ayco, L.P.

ADM will implement these changes for

bargaining: unit employees if they

are

agreed to during negotiations by the unions representing

these hourly employees.

Also in anticipation of the proposed transaction, ADM expects to

mplement, the extension of benefit coverage and increase in monthly long term insurance

benefits, as discussed above in page 1, effective January 1, 2009. ADM expects to implement

the reinsurance arrangement as of

January

25, 2009, assuming the. final authorization of the

proposed transaction by the DOL

will

be effective on that date.

Agrinational -

APPENDIX

Pending Authorization

The restrictions of sections 406(a) and 406(b) of the Employee Retirement Income Security

Act of 1914, as amended (the "Act") shall not apply to the reinsurance of risks and the receipt of

premiums therefrom by Agrlnational Insurance Company ("Agrinational") in connection with

insurance contracts sold by Aetna Life Insurance Company ("Aetna"), or any successor insurance

company to Aetna which is unrelated to Archer Daniels Midland Company ("ADM"), to provide

long-term disability beueftts to participants in the ADM Omnibus Health & Welfare

Plan

for Hourly

Employees and the ADM Omnibus Health & Welfare Plan for Salaried Employees (the "Plans"),

provided the following conditions are met:

I .



Is a party in interest with respect to the Plans, as described in section 3(14)(E)

of ERISA, by virtue of its stock affiliation with ADM;



Is licensed to sell insurance or conduct reinsurance operations in at least one

State as defined in section 3(10) of ERISA;



Has obtained a Certificate of Authority from the Insurance Commissioner of

its dorniciliary state which has neither been revoked nor suspended;

(A)

Has undergone an examination by an independent certified public

accountant

for

itss last completed taxable year immediately prior to the taxable year of the reinsurance

transaction; or

(B)

Has undergone a financial examination (within the meaning of the

law of its domiciliary State, Vermont) by the Insurance Commissioner of the State of Vermont within

the 5 years prior to the end of the year in which the reinsurance transaction occurred; and

Is licensed to conduct reinsurance transactions by a State whose law requires

that an actuarial review of reserves be conducted annually by an independent firm of actuaries and

reported to the appropriate regulatory authority; and



The Planss

pay

no more than adequate consideration for the insurance contracts;



No commissions are paid by the Plans with respect to the insurance or the

reinsurance;

In the initial year of any contract for coverage of the long-term disability benefits

involving Agrinational, there will be an immediate and objectively determined benefit enhancement

for those participants and beneficiaries eligible for participation in the long-term disability benefits in

the form of increased benefits;

e..

1n. subsequent years, the formula used to calculate premiums by Aetna or any

successor insurer will be similar to formulae used by other insurers providing comparable coverage

under similar programs. Furthermore, the premium charge calculated in accordance with the formula

will be reasonable and wilt be comparable to the premium charged by the insurer and its competitors

with the same or a better rating providing the same coverage under comparable programs;

The Plans only contracts for coverage of the long-term disability benefits with

insurers

with a rating of A or better from A.M. Best Company. The reinsurance arrangement

between the insurers and Agrinational will be indemnity reinsurance only (i.e., the insurer will not be

relieved of liability to the Plan should Agrinational be unable or unwilling to cover any liability

arising from the reinsurance arrangement);

Agrinational retains an independent fiduciary (the "Independent Fiduciary"), at

ADM's expense, to analyze the transaction and render an opinion that the requirements of sections a.

through f. have been met. For purposes of this exemption, the Independent Fiduciary is a person

who:

not directly or indirectly, through one or more intermediaries, controlling,

controlled by, or under common control with ADM or Agrinational (this relationship hereinafter

referred to as an "Affiliate");



Is not an officer, director, employee of, or partner in, ADM or Agrinational

(or any Affiliate of either);



not a corporation or partnership in which ADM or Agrinational has an

ownership interest or is a partner;



Does not have an ownership interest in ADM or Agrinational, or any of

either's Affiliates;

not a fiduciary with respect to the long-term disability insurance

program in the Plans prior to the appointment in connection with a transaction involving the long-

term disability benefits; and

Has acknowledged in writing acceptance of fiduciary responsibility and has

agreed not to participate in any decision with respect to any transaction in which the Independent

Fiduciaryhas an interest that might affect its best judgments as a fiduciary.

For purposes of this definition of an "Independent Fiduciary," no organization or individual

may serve as an

Independent Fiduciary for any fiscal year if the gross income received by such

organization or

individual (or partnership or

corporation of which such individual

is an officer,

director, or 10 percent or more partner or shareholder) from ADM, Agrinational.

or their Affiliates

(including amounts received for services as Independent Fiduciary under any prohibited transaction

exemption granted by the Department) for that fiscal year exceeds 5 percent of that organization or

individual's annual gross income from all sources for such fiscal year.

In addition, no organization or individual who is an Independent Fiduciary, and no

paruiership or corporation

which such organization or individual is an officer, director, or 10

percent or

more partner or shareholder, may acquire any property from, sell any property to, or

borrow funds from ADM, Agrinational, or their Affiliates during the

period

that such organization or

individual serves as Independent Fiduciary, and continuing for a period of six months after such

organization

or individual ceases to be an Independent Fiduciary, or

negotiates

any such transaction

during the period that such organization or individual serves as

Independent Fiduciary.

III