APPELLANT S REPLY BRIEF

E-Filed Document Nov 12 2015 16:46:37 2015-CA-00260-SCT Pages: 19 IN THE SUPREME COURT OF THE STATE OF MISSISSIPPI 2015-CA-00260-SCT WILLIAM BURGESS, DERIVATIVELY ON BEHALF OF BANCORPSOUTH, INC. PLAINTIFF/APPELLANT V. AUBRAY B. PATTERSON, HASSELL H. FRANKLIN, JAMES VIRGIL KELLEY, TURNER O. LASHLEE, ROBERT C. NOLAN, ALAN W. PERRY, JAMES E. CAMPBELL III, WILBERT G. HOLLIMAN JR., LARRY G. KIRK, GUY W. MITCHELL III, WILLIAM CAL PARTEE, JR., WARREN A. HOOD, JR., WILLIAM L. PRATER AND GREGG COWSER DEFENDANTS/APPELLEES On Appeal from the Circuit Court of Lee County, Mississippi APPELLANT S REPLY BRIEF ORAL ARGUMENT REQUESTED DON BARRETT, P.A. David McMullan, Jr., MSB#8494 404 Court Square PO Box 927 Lexington, MS 39095 Telephone: (662) 834-2488 Facsimile: (662) 834-2628 THE SHUMAN LAW FIRM Kip B. Shuman (admitted pro hac vice) Rusty E. Glenn (admitted pro hac vice) 885 Arapahoe Avenue Boulder, CO 80302 Telephone: (303) 861-3003 Facsimile: (303) 484-4886 THE WEISER LAW FIRM, P.C. Robert B. Weiser (admitted pro hac vice) Brett D. Stecker (admitted pro hac vice) James M. Ficaro (admitted pro hac vice) 22 Cassatt Avenue, First Floor Berwyn, PA 19312 Telephone: (610) 225-2677 Facsimile: (610) 408-8062 Attorneys for Plaintiff/Appellant William Burgess

TABLE OF CONTENTS Page INTRODUCTION...1 ARGUMENT...2 I. The Circuit Court Relied on the SLC Report in Dismissing the Action and Expressly Said So...2 II. III. IV. Derivative Pleadings in Mississippi Are Not Subject to a Heightened Pleading Standard...4 Defendants Attempt to Blur the Lines of Well Established Derivative Precedents...6 Discovery Was Improperly Refused Because the Special Committee Failed to Prove Its Independence and the Reasonableness of Its Investigation...8 A. There Is Reason to Doubt Whether the Special Committee Members Were Qualified...10 B. There Is Reason to Doubt the Special Committee s Investigation Was Conducted in Good Faith...12 CONCLUSION...13 i

TABLE OF AUTHORITIES Page(s) CASES Allison v. General Motors Corp., 604 F.Supp. 1106 (D.Del. 1985)...6, 7 In re Asyst Techs., Inc. Derivative Litig., No. C-06-04669 EDL, 2008 U.S. Dist. LEXIS 41173 (N.D. Cal. May 23, 2008)...6 Barovic v. Ballmer, No. C14-0540-JCC, 2014 WL 7011840 (W.D. Wash. Dec. 10, 2014)...12 Ryskamp ex rel. Boulder Growth and Income Fund v. Looney, No. 10-CV-00842-WJM-KLM, 2011 WL 1456729 (D. Colo. Apr. 15, 2011)...8 Delaware Cnty. Emps. Ret. Fund v. Sanchez, No. 702, 2014, 2015 WL 5766264 (Del. Oct. 2, 2015)...11 Frank v. LoVetere, 363 F. Supp. 2d 327 (D. Conn. 2005)...4, 5 Grimes v. DSC Commc ns Corp., 724 A.2d 561 (Del. Ch. 1998)...8 Gutierrez v. Gutierrez, 153 So. 3d 703 (Miss. 2014)...4 Kaplan v. Wyatt, 499 A.2d 1184 (Del. 1985)...10 Beam ex rel. Martha Stewart Living Omnimedia, Inc. v. Stewart, 845 A.2d 1040 (Del. 2004)...7, 11, 12 McMahon v. McMahon, 247 Miss. 8222, 157 So. 2d 494 (1963)...5 In re MFW S holder Litig., C.A. No. 6566-CS (consol.) (Del. Ch. Mar. 12, 2013) (Transcript)...11 In re Oracle Corp. Derivative Litig., 824 A.2d 917 (Del. Ch. 2003)...10 In re Silicon Graphics, Inc. Sec. Litig., 183 F.3d 970 (9th Cir. 1999)...5 ii

Sutherland v. Sutherland, 968 A.2d 1027 (Del. Ch. 2008)...9 Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007)...5, 6 Weiss v. Swanson, 948 A.2d 433 (Del. Ch. 2008)...6 White v. Panic, 783 A.2d 543 (Del. 2001)...7 Zapata Corp. v. Maldonado, 430 A.2d 779 (Del. 1981)...9 STATUTES, RULES, AND REGULATIONS 8 Del. C. 220...7 Fed. R. Civ. P. Rule 9(b)...5, 6 Miss. Code Ann. 79-4-7.44...9 79-4-16.02...7 M.R.C.P. Rule 8...6 Rule 9(b)...5, 6 Private Securities Litigation Reform Act of 1995...5 Securities Exchange Act of 1934 10(b)...5 iii

INTRODUCTION 1 Choices have consequences. BancorpSouth s Board chose to create a so-called Special Committee and chose to empower that Special Committee with the full power of the Board to review the Demand. 2 The Special Committee then chose to evaluate its own independence, and the Special Committee chose to create the Report, which detailed its findings. The consequence of this series of choices is that BancorpSouth, the Board, and the Special Committee do not get to now ask the Court for a favorable and inapplicable pleading standard that would only apply had those choices never been made. Rather, by affirmatively creating an evidentiary record, the alleged findings of which directly impacted, if not controlled, the question before the Circuit Court, Defendants must now shoulder the burden of proving that that the Special Committee was truly independent and that its investigation was conducted reasonably and in good faith. A single choice dooms Defendants above all others: their choice to submit the Report to the Circuit Court while simultaneously refusing to provide a copy of the Report to Plaintiff. The in camera submission of the Report to the Circuit Court as part of the Motion for Protective Order invited the Circuit Court to review the Report as part of and in connection with his consideration of Defendants Motion to Dismiss the Complaint. And Judge Barnett, unequivocally, did just that. In their opposition (the Opposition ), Defendants now hitch their hopes of success before this Court to a desperate and untenable claim: that the Circuit Court did not rely on the Report in granting the Motion to Dismiss. Defendants argument, however, is contradicted by Judge Barnett s own words. 1 Citations to the Record shall appear in the following format: R. _. Citations to the Record Excerpt shall appear in the following format: R.E. _. 2 Unless otherwise noted, all capitalized terms shall have the same meaning as in Plaintiff s opening brief ( Opening Brief ). 1

In the Order of Dismissal (the Order ), Judge Barnett clearly and explicitly listed the materials, which were read, studied, and reviewed. R. 572; R.E. 1. These materials clearly included the report of the Special Committee. Id.. These facts lead to one conclusion: that the Circuit Court considered and relied upon the Report in ruling on the Motion to Dismiss. The Defendants never provided Plaintiff with a copy of the report, depriving them of an opportunity to respond or test it. This Court s review should end there. The rest of the arguments presented on appeal, from the applicable pleading standards to the burdens of proof, from the intricacies of statutory construction to the nuances of SLC jurisprudence, also warrant reversal. ARGUMENT I. The Circuit Court Relied on the SLC Report in Dismissing the Action and Expressly Said So. Defendants arguments that the Circuit Court did not consider and rely upon the Report are contradicted by the Record. A plain reading of the Order yields one conclusion: the Circuit Court reviewed the Report in camera and considered and relied on the Report in granting the Motion to Dismiss: THIS CAUSE came on for decision on the Defendants Motion to Dismiss pursuant to Section 79-4-7.44(a) and the Defendants' Motion for Protective Order and the Court having read, studied and reviewed-the twenty-five pounds (not an exaggeration, weighed) of briefs, cases, affidavits, and the report of the Special Committee in camera, oral arguments having been waived, finds that the Motion to Dismiss Pursuant to Section 79-4-7.44(a) should be granted. The Court further finds that the dismissal of this cause renders the Motion for Protective Order moot. R. 572; R.E. 1. The Order leaves no room for any interpretation. Defendants seek to introduce ambiguity where there is none. Defendants accuse Plaintiff of mischaracterizing the above excerpted passage because of the Circuit Court s use of the conjunctive. Opposition at 1. Defendants then 2

make unsupported claim that it is clear that the in camera review of the Special Committee Report was used, and only used for the discovery motion, in light of the dismissal it was rendered moot. Id. at 2. Defendants tortured reading of the Order does not pass muster. First, the Order speaks for itself. In a single sentence, the Circuit Court details precisely what it read, studied, and reviewed ( briefs, cases, affidavits, and the report of the Special Committee in camera ) and what it decided ( that the Motion to Dismiss Pursuant to Section 79-4-7.44(a) should be granted ). No interpretation of the Order is required. Second, Defendants arguments defy logic. Defendants ask this Court to adopt the following timeline of events: the Circuit Court, relying solely on the proper evidence, first decided to grant the Motion to Dismiss. Then, despite deciding that the Action was concluded, the Circuit Court reviewed the Report anyway, only to determine that the Motion for Protective Order was moot. Defendants timeline reverses the language in the Order: the dismissal of this cause renders the Motion for Protective Order moot. R. 572, R.E. 1. There is nothing in the Order to suggest that Judge Barnett even entertained the Motion for Protective Order, given his ruling on the Motion to Dismiss. Finally, even if this Court were to accept as possible Defendants illogical view of Judge Barnett s deliberations (which, respectfully, it should not), in that circumstance the Order could only at best be considered ambiguous. While Plaintiff respectfully submits that the Order is not ambiguous, ambiguity alone would be enough for this Court to err on the side of protecting Plaintiff s due process and remand the Action. See Gutierrez v. Gutierrez, 153 So. 3d 703, 714 (Miss. 2014) (remanding to resolve ambiguity in lower court order). Apart from their interpretation of the Order Defendants make no attempt to refute Plaintiff s primary contention that Judge Barnett s reliance on the Report in ruling on the Motion to Dismiss was improper, and runs contrary to the principles of fundamental fairness and due 3

process. Opening Brief at 27. Defendants do not address the due process concerns because they cannot. Defendants submission of the Report to the Circuit Court while refusing to produce a copy of the Report to Plaintiff clearly prejudiced Plaintiff. Plaintiff has the right to obtain the information relied upon and submitted by opposing counsel to the Court. Id. at 26. II. Derivative Pleadings in Mississippi Are Not Subject to a Heightened Pleading Standard. Defendants arguments that Plaintiff failed to meet Mississippi s pleading standards also fail. Defendants ask this Court adopt a heightened pleading standard for shareholder derivative actions in Mississippi. To do so, Defendants admittedly sew together piecemeal law and ignore the statutory provision whose protection they seek. As a threshold matter, that several U.S. jurisdictions are universal demand states does not, as Defendants suggest, automatically make those states jurisprudence regarding demand refusal identical. Opposition at 22. 3 Even so, Defendants reliance on Frank v. LoVetere, 363 F. Supp. 2d 327 (D. Conn. 2005) is misplaced. First, while the Frank court did suggest that the Connecticut statutes appear[] to contemplate the use of a heightened pleading standard akin to Fed. R. Civ. P. 9(b), it notably did not apply that standard. Instead, the District of Connecticut applied plaintiff s proffered evidence adduced during discovery to particularize the general allegations of the complaint, many of which are made on information and belief. Id. at 333. And most significantly, in Frank the Court permitted discovery on the issue of whether the SLC s determination was made independently, in good faith and after reasonable inquiry, just as Plaintiff s counsel sought below. Id. 3 For example, Connecticut (a universal demand state) has adopted the Model Business Corporation Act while Pennsylvania (also a universal demand state) has adopted the ALI Principles of Corporate Governance. 4

Defendants citation to the Official Comment to Mississippi Rule of Civil Procedure 9(b) is also misplaced. The subject of the Official Comment is fraud. See McMahon v. McMahon, 247 Miss. 822, 157 So. 2d 494 (1963) ( fraud will not be inferred or presumed and cannot be charged in general terms; the specific facts which constitute fraud must be definitely averred. ). Plaintiff s breach of fiduciary duty claims are not fraud claims nor do they sound in fraud. As such, Defendants reliance on a domestic relations case (a case which centered on fraud) and federal securities fraud class actions are also unavailing. 4 Opposition at 24-25. It is well-established that breach of fiduciary duty claims need only satisfy basic Rule 8 pleading requirements, not heightened Rule 9(b) standards. In re Asyst Techs., Inc. Derivative Litig., No. C-06-04669 EDL, 2008 U.S. Dist. LEXIS 41173, at *21 (N.D. Cal. May 23, 2008). Indeed, even claims for breach of fiduciary duty which at their core charge that the defendants knew something need only be averred generally. Weiss v. Swanson, 948 A.2d 433, 449 n.60 (Del. Ch. 2008). Defendants arguments regarding the governing pleading standard involve grafting of language from inapposite statutes. Opposition at 23. Such an effort should not be entertained by this Court. III. Defendants Misread Well Established Derivative Precedents. 4 Federal securities class actions, like those at issue in In re Silicon Graphics, Inc. Sec. Litig., 183 F.3d 970 (9th Cir. 1999) cited by Defendants, are governed by the Private Securities Litigation Reform Act of 1995 (the PSLRA ). The PSLRA requires plaintiffs seeking to advance a private cause of action for securities fraud under 10(b) of the Securities Exchange Act of 1934 to plead both fraud subject to the heightened pleading requirement of FRCP Rule 9(b) and plead facts evidencing scienter, or defendant s intention to deceive, manipulate or defraud. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 308 (2007). The irony here, of course, is that the Class Action, which is based on substantially similar factual allegations as this Action, and which Defendants beseech this Court to ignore (despite the fact that BancorpSouth ultimately settled the Class Action for over $29 million) was such a securities class action, and a federal judge concluded that the complaint in the Class Action did meet the heightened pleading standards of FRCP 9(b). The only individuals who seem to think Defendants did nothing wrong are the Special Committee Members. 5

Defendants position that a demand futility analysis and wrongful demand refusal analysis is a distinction without a difference is seriously flawed. Opposition at 33. As laid out in detail in Plaintiff s Opening Brief, the distinctions between the analyses employed by courts in the varying procedural postures of derivative actions are real and material to the questions in this case. Opening Brief at 14-23. Defendants failure to address these differences undermines their arguments. Defendants attempt to characterize discovery as fundamentally unavailable in the SLC context by relying on traditional wrongful demand refusal case law. Opposition at 33-34. Specifically, Defendants reliance on Allison v. General Motors Corp., 604 F.Supp. 1106 (D.Del. 1985) for this proposition is misplaced. Allison did not involve a true Special Litigation Committee, but rather a purportedly independent sub-committee of the board that recommended to the full board of General Motors Corp. that the shareholder demand in question be refused. Id. at 1122. This distinction precludes its application here. Next, Defendants argue that Plaintiff should have employed the tools at hand and utilized Mississippi s inspection statute ( 79-4-16.02). But this argument demonstrates a misunderstanding of how books-and-records inspection statutes operate in the shareholder derivative context. First, in analogizing Mississippi s inspection statute to its equivalent in Delaware, 8 Del. C. 220 ( Delaware Section 220 ), Defendants misinterpret the rationale for the Delaware Court of Chancery s urging of shareholder derivative plaintiffs to use Delaware Section 220. Delaware courts implore prospective derivative plaintiffs to utilize Delaware Section 220 in order to plead demand futility with particularity, not wrongful demand refusal. See Beam ex rel. Martha Stewart Living Omnimedia, Inc. v. Stewart, 845 A.2d 1040, 1056 (Del. 2004) ( Both this Court and the Court of Chancery have continually advised plaintiffs who seek to plead facts establishing demand futility that the plaintiffs might successfully have used a Section 220 books and records inspection to uncover such facts. ); White v. Panic, 783 A.2d 543, 6

556-57 (Del. 2001) ( [T]his case demonstrates the salutary effects of a rule encouraging plaintiffs to conduct a thorough investigation, using the tools at hand including the use of actions under 8 Del. C. 220 for books and records, before filing a complaint.[f]urther presuit investigation in this case may have yielded the particularized facts required to show that demand is excused or it may have revealed that the board acted in the best interests of the corporation. ) (footnote omitted). Second, Delaware Section 220 is only available in very limited circumstances when a pre-suit demand is made. Even if such inspection requests were available under Mississippi law given the procedural posture of this case (see, e.g., Grimes v. DSC Commc ns Corp., 724 A.2d 561 (Del. Ch. 1998)), Defendants argument fails due to futility. Plaintiff s first request would be the Report, which Defendants have already repeatedly refused to produce to Plaintiff, even after submitting the Report to the Court. Defendants also fail to distinguish Ryskamp ex rel. Boulder Growth and Income Fund v. Looney, No. 10-CV-00842-WJM-KLM, 2011 WL 1456729 (D. Colo. Apr. 15, 2011) ( Boulder Growth ), which provides persuasive authority here. Although the plaintiff in Boulder Growth had made pre-suit requests for information regarding the committee s investigation or alleged a conflict on behalf of the committees counsel is of no import here. As Defendants concede, the court in Boulder Growth allowed discovery on the issue of the committee s investigation. Opposition at 40. That is exactly what Plaintiff seeks here: discovery which would not be related to the merits of the underlying action, but rather solely regarding the Special Committee s investigation into its own independence and the allegations made in the Demand. IV. Discovery Was Improperly Refused Because the Special Committee Failed to Prove Its Independence and the Reasonableness of Its Investigation. 7

Defendants next assert that Plaintiff seeks to upend Mississippi law in his request for limited discovery. This is not so. Defendants chose to create an evidentiary record, who chose to rely on that record for the basis of motion practice before the Circuit Court, and who chose to submit the record only to the Circuit Court, which in turn relied on that record in dismissing the Action. Defendants ignore the distinction made by Plaintiff in his Opening Brief that discovery is required when the board of directors of a Mississippi corporation creates a Special Litigation Committee rather than a mere sub-committee of the board of directors. Opening Brief at 24-25. Defendants do not even argue that the Special Committee is not a true SLC. 5 The Board s complete transfer of its authority to respond to the Demand to the Special Committee, the Special Committee s refusal of the Demand, and its engagement of advisors all make this so. Id. This concession is critical as it definitively alters the burden of proof in the Action. Given Miss. Code Ann. 79-4-7.44 s silence on what procedural steps are required when a corporate board chooses to appoint a SLC and create an evidentiary record, Defendants must carry the burden to affirmatively prove that the Special Committee members were all qualified directors, i.e., their independence and disinterestedness. See, e.g., Sutherland v. Sutherland, 968 A.2d 1027, 1029 (Del. Ch. 2008) ( The SLC is not entitled to any presumptions of independence, good faith, or reasonableness ); Zapata Corp. v. Maldonado, 430 A.2d 779, 788 (Del. 1981) ( The corporation should have the burden of proving independence, good faith and a reasonable investigation, rather than presuming independence, good faith and reasonableness. ). Defendants misread the burden of proof under Miss. Code Ann. 79-4-7.44 claiming that the burden only shifts to Defendants when a majority of the board members are not qualified. Opposition at 27. By appointing an SLC, and conveying full Board authority to respond to the Demand to the Special Committee (R. 166-168), the Board removed itself from the equation. As 5 Defendants themselves even refer to the Special Committee as a Special Litigation Committee. Opposition at 34. 8

a result, the question of independence regarding the non-slc Member directors of BancorpSouth under Miss. Code Ann. 79-4-7.44 is irrelevant: after all, they did not choose to reject the Demand the Special Committee did. R. 207. The burden of proof shifts to the Special Committee to prove its independence, its good faith, and the reasonableness of its investigation. This is because the Court is to determine whether, on the basis of the undisputed factual record, [it is] convinced that the SLC was independent, acted in good faith, and had a reasonable basis for its recommendation. If there is a material factual question about these issues causing doubt about any of these grounds, [the motion to dismiss must be denied]. In re Oracle Corp. Derivative Litig., 824 A.2d 917 at 928-29 (Del. Ch. 2003) (emphasis added). Plaintiff was denied any opportunity to test the record which Defendants improperly placed before the Circuit Court and neither Plaintiff nor the Circuit Court were provided the opportunity to examine the reasonableness of the investigation. If the Special Committee fails to meet any of these requirements, its motion to dismiss must be denied, and the plaintiff must be allowed to prepare the action for trial. Kaplan v. Wyatt, 499 A.2d 1184, 1188 (Del. 1985). Plaintiff made such a prima facie case below and limited discovery should have been granted. A. There Is Reason to Doubt Whether the Special Committee Members Were Qualified. The standard for independence is different for a special litigation committee member than in the demand futility context. Opening Brief at 31. For members of a Special Litigation Committee, [t]he question of independence turns on whether a director is, for any substantial reason, incapable of making a decision with only the best interests of the corporation in mind. That is, the independence test ultimately focus[es] on impartiality and objectivity. In re Oracle Corp. Derivative Litigation, 824 A.2d at 920 (internal citations omitted). 9

The members of the Special Committee (Defendants Franklin, Holliman, and Mitchell) have all served in various charitable capacities with each other and with the other Defendants that they were purportedly charged with investigating as members of the Special Committee. Opening Brief at 33-34. In opposition to the Motion to Dismiss, even without the benefit of any discovery, Plaintiff argued facts which demonstrated that Franklin, Holliman and Mitchell were interconnected through a series of long-term relationships, including a two decade long friendship between Patterson and Holliman, a ten-year friendship between Patterson and Mitchell, fifteen-year long tenures as co-directors at the Company, and several personal relationships outside the BancorpSouth boardroom. R. 302-306. The interconnectedness of the members of the BancorpSouth Board is significant and precisely why discovery into the independence of the Special Committee is appropriate. The Delaware Court of Chancery has opined on the effect of such long-term relationships between directors. Then-Chancellor Leo E. Strine, Jr. ( Strine ) noted:... [W]hen human beings do important and meaningful things together over time, their relationships change. And I think one of the emerging issues I agree the law hasn't gone there yet; but it would be surprising to me for an independent director to have the same relationship with a manager and controlling stockholder after a decade of such service that he or she did at the beginning. It would actually creep me out to think that people were so robotic that they would not change. In re MFW S holder Litig., C.A. No. 6566-CS (consol.) (Del. Ch. Mar. 12, 2013) (Transcript) at 139-140. Two years later, Chief Justice Strine concluded that derivative plaintiffs who alleged a decades-long friendship along with business ties raised an inference that the directors lacked independence, noting: [c]lose friendships of that duration are likely considered precious by many people, and are rare. People drift apart for many reasons, and when a close relationship endures for that long, a pleading stage inference arises that it is important to the parties. 10

Delaware Cnty. Emps. Ret. Fund v. Sanchez, No. 702, 2014, 2015 WL 5766264, at *4 (Del. Oct. 2, 2015). Defendants seek to downplay these relationships, but even the cases upon which they rely found and held that allegations of close ties may raise a reasonable doubt whether a director can appropriately consider demand. Opposition at 50, citing Martha Stewart Living Omnimedia, Inc., 845 A.2d at 1050. The may is the very reason that the Report must be turned over to Plaintiff in this Action and discovery is necessary here. Plaintiff has no way of knowing whether the relationships raised below were known to the Special Committee, vetted by the Special Committee, or ignored by the Special Committee to say nothing of whether additional relationships exist between the Special Committee Members and the subjects of their investigation. All of these facts, shielded from Plaintiff by the Defendants and the Circuit Court, are probative to the Special Committee s purported investigation. B. There Is Reason to Doubt the Special Committee s Investigation Was Conducted in Good Faith. Without discovery the Circuit Court considered and relied upon one side to the story. Specifically, Plaintiff (and the Circuit Court) was and is unaware of the full list of interviewees or those who may have declined an interview with the Special Committee. Such information would shed further light on what efforts the Special Committee made to thoroughly examine the allegations raised in the Demand. For instance, if a stockholder identifies a witness or set of witnesses who should have been interviewed but were not in connection with a board s investigation, a court may find that the investigation was unreasonable. Barovic v. Ballmer, No. C14-0540-JCC, 2014 WL 7011840, at *4 (W.D. Wash. Dec. 10, 2014) (citing City of Orlando Police Pension Fund v. Page, 970 F. Supp. 2d 1022, 1032 (N.D. Cal. 2013). Defendants response to this very real possibility is to suggest that Plaintiff should have contacted the Special Committee to provide additional information and potential interviewees. 11

Opposition at 33., Defendants have done nothing short of attempting to turn the entire pre-suit demand requirement and demand review process on its head. It was the Special Committee s duty and the Special Committee s duty alone not Plaintiff s or any other shareholders duty to make a reasonable effort to identify and interview the individuals most knowledgeable about the allegations of misconduct set forth in the Demand.. CONCLUSION The Circuit Court s reliance on the Report in camera to grant Defendants motion to dismiss was plain error. Mississippi law does not permit dismissal of shareholder derivative actions based on secret evidentiary records. Plaintiff respectfully requests that the order of the Circuit Court be reversed. Dated: November 12, 2015 Respectfully submitted, 12 /s/ David McMullan, Jr. David McMullan, Jr., MSB#8945 DON BARRETT, P.A. 404 Court Square PO Box 927 Lexington, MS 39095 Telephone: (662) 834-2488 Facsimile: (662) 834-2628 THE SHUMAN LAW FIRM Kip B. Shuman (admitted pro hac vice) Rusty E. Glenn (admitted pro hac vice) 885 Arapahoe Avenue Boulder, CO 80302 Telephone: (303) 861-3003 Facsimile: (303) 484-4886 THE WEISER LAW FIRM, P.C. Robert B. Weiser (admitted pro hac vice) Brett D. Stecker (admitted pro hac vice) James M. Ficaro (admitted pro hac vice) 22 Cassatt Avenue, First Floor

Berwyn, PA 19312 Telephone: (610) 225-2677 Facsimile: (610) 408-8062 Counsel for Plaintiff/Appellant William Burgess 13

CERTIFICAT OF SERVICE I, David McMullan, Jr., of the law firm of Don Barrett, P.A., do hereby certify that a true and correct copy of the foregoing Appellant s Reply brief was filed with the Clerk of the Court using the MEC system which sent notification to the following on this the 12th day of November, 2015: Attorneys for Defendants/Appellees J. Patrick Caldwell, Esq. pcaldwell@rccalaw.com /s/ David McMullan, Jr. David McMullan, Jr. 14