MEMBERSHIP COUNCIL REGULATIONS COÖPERATIE FROMFARMERS U.A.

Transcription

1 1 MEMBERSHIP COUNCIL REGULATIONS COÖPERATIE FROMFARMERS U.A. Introduction A. The corporate governance of the Cooperative is determined by the law, the articles and the relevant regulations. B. These regulations regulate internal matters of the Membership Council. Article 1 Definitions For the purpose of these regulations the following definitions are used: General Meeting Board Cooperative Subsidiary Membership Council Member, Members Articles Company the general meeting of shareholders of the Company the board of the cooperative Coöperatie FromFarmers U.A the legal person or company as intended in section 24a of Book 2 of the Dutch Civil Code; for the purpose of these regulations ForFarmers DML B.V. (previously: FarmFeed Hedimix B.V.), ForFarmers Nederland B.V., Stimulan B.V. and Reudink B.V. shall in any case be qualified as a subsidiary the general meeting of the Cooperative that consists of twenty-six (26) members of the Cooperative, which are distributed as follows over the sectors (as intended in the articles): a. at least five (5) members from the ruminant sector; b. at least five (5) members from the swine sector; c. at least three (3) members from the poultry sector; d. at least three (3) members from the crop-farming sector. the member respectively the members of the Cooperative the articles of the Cooperative as they read from time to time ForFarmers N.V.

2 2 Absolute Majority Chairman more than half of the number of votes cast the chairman of the Board Article 2 Scope of application To the extent that the regulations deviate from the provisions in the Articles the provisions in the Articles shall prevail. The term ForFarmers is understood as ForFarmers N.V. and any and all companies with which it is affiliated in a group, both collectively and each individually. Article 3 Guiding principles 1. The Membership Council forms the general meeting of the Cooperative. 2. The Membership Council can in accordance with article 27 of the Articles prepare one or more regulations that regulate subject matters that are not or not fully anticipated by the Articles. Article 4 Scope 1. These regulations were established and approved by the Membership Council and may be changed by resolution of the Membership Council in consideration of the provisions set forth in article 28 paragraphs 1 up to and including 4 of the Articles. 2. These Regulations provide, in addition to the statutory provisions and the provisions pursuant to the Articles as well as other regulations, rules with regard to matters of the Membership Council. In its meeting of 25 April 2016 the Board declared that it agrees with the content of these regulations and that it shall comply with the rules included in it, to the extent that they are related to the Board. Article 5 Introduction and composition 1. After appointment all members of the Membership Council are given the opportunity to follow an introduction programme in which attention is, in any case, paid to general financial and legal matters, the financial reporting of the Cooperative and its activities and the responsibilities of a member of the Membership Council. The members of the Membership Council can be offered the possibility of following an education or training. This is also possible in the form of one or more collective meetings. 2. The resignation roster of members of the Membership Council is generally available and is in any case posted on the website of the Cooperative.

3 3. Members of the Membership Council shall resign in the interim if this is required in case of insufficient performance, structural difference of opinions or otherwise, the latter inter alia at the discretion of the Membership Council and/or the sector of which the relevant member of the Membership Council is part. It is possible to lodge an appeal with the Membership Council against the opinion of the sector. 4. The Membership Council has such composition that the members can, in relation to each other and the Board, operate independently. 5. On the basis of article 19 paragraph 3 of the Articles the following applies to members of the Membership Council: for the sector to which the company of the member basically belongs he / she must mainly be a buyer of the business supplies, products and services of the Cooperative or an affiliated party (as defined in the Articles). 6. The number of members for the Membership Council was set at 26 in the Articles in the course of which a subdivision into sectors was made. With regard to the composition of the Membership Council apart from the quality the reflection from the sectors plays a relevant factor. In order to have more flexibility upon the composition of the Membership Council the following division over the sectors was set (article 19 paragraph 2 of the Articles). Sectors and representation Ruminant At least 5* Swine At least 5* Poultry At least 3* Crop-farming At least 3* Total Total 26* *) Including vacancies 7. For the position of member of the Membership Council, chairman of the Membership Council and general deputy chairman of the Membership Council the job profiles are included in the schedule. 8. The recruitment of potential members of the Membership Council is carried out by the Membership Council. The chairman of the Membership Council and the general deputy take the lead in terms of the elections. From the commercial organisation of ForFarmers candidates can also be proposed. Candidates are discussed with the ForFarmers organisation. Potential candidates are visited by a sector member and the chairman of the Membership Council or general deputy. If both sides have a positive reaction then a meeting at the office of ForFarmers in Lochem follows. A delegate from the Board is also present during this meeting. 3 Article 6 Committees 1. The Membership Council shall at least establish the following committees:

4 4 a. an Audit Committee; b. a Complaints Committee; c. a Nomination Committee; and d. an Agenda Committee. 2. In conformity with the provisions set forth in article 27 of the Articles the method of appointment, suspension and dismissal of the members of the aforementioned committees as well as the duties and authorities of the committees are established in these regulations by the Membership Council. 3. The members of the Membership Council appoint: a. per sector: a member for the Audit Committee; b. per sector: a member for the Complaints Committee; c. per sector: a member for the Nomination Committee; d. per sector: a member for the Agenda Committee; and e. from the four members of the Agenda Committee as intended under d.: a general chairman and a general deputy. 4. A person can sit on at most two committees. Article 7 Method of operation of the Membership Council and the Agenda Committee 1. Apart from the decision-making / formal meetings of the Membership Council informal meetings are also held for the members of the Membership Council. 2. Of each and every member of the Membership Council the following is in case of a (new) election reported with the announcement of the election: i. gender; ii. age; iii. place of residence; iv. profession / sector; v. ancillary positions to the extent that they are relevant to the performance of the position of member of the Membership Council; vi. the time of the first appointment; vii. the current term of office for which he / she was appointed. 3. Members of the Membership Council aim to be present during each and every meeting of the Membership Council and to participate actively in the meeting from a critical, independent approach motivated by the interests of the Cooperative. 4. Members of the Board cannot be elected for the Membership Council. Article 19 paragraph 3 last sentence of the Articles must be read accordingly.

5 5. The Membership Council elects representatives from the various sectors who jointly form the Agenda Committee. The chairman of the Membership Council and the general deputy (secretary) are elected from the Agenda Committee. The procedure for the election of the representatives from the different sectors and the positions of chairman and general deputy is as follows: i. the elections are held during a meeting of the Membership Council in the course of which more than half of the number of members of the Membership Council is present; ii. the elections take place in writing; iii. candidates for the representation of a sector can report to the chairman of the Membership Council in office up to the moment of the elections; iv. the chairman requests three members of the Membership Council who are not candidates for the election to count the votes; v. the chairman of the Membership Council indicates what candidates are available for what sectors; vi. the present members of the Membership Council cast their vote(s) by ballot; vii. the votes cast are counted; viii. those who receive the most votes are elected; ix. if the votes are equally divided then a second voting round is held. If the votes are again equally divided then the drawing of lots decides; x. for the election of the chairman and the general deputy, who need to be a representative of a sector, the same procedure as described in the previous points is followed. 6. The Agenda Committee has the following duties: a. the preparation of the meetings of the Membership Council; b. the preparation of the elections of the members of the Membership Council; c. the coordination of the general developments with the Board; d. the preparation of the agenda for the meetings of the Membership Council; e. holding discussions with the Board about a candidate for a vacancy for the Board; f. holding discussions with the Board about the proposal for appointment of the chairman of the Board. 7. The Agenda Committee elects a chairman and a secretary for keeping the minutes from its midst. The chairman is responsible for the organisation of the consultation meetings of the Agenda Committee. The secretary makes the minutes available to committee members within 15 working days after a consultation meeting and provides the Board with a copy for administration and archiving in the minutes register. The Agenda Committee can rely on the assistance of one or more advisers. 8. A member of the Agenda Committee is appointed for a term of at most 4 years and can be reappointed for two consecutive terms of at most 4 years. The chairman of the Membership Council who is also a member of the Agenda Committee can moreover be reappointed for a third consecutive term of at most 4 years. The maximum term of office is 5

6 8 years for an ordinary member of the Agenda Committee and 12 years for the chairman of the Membership Council. 9. A member of the Agenda Committee can be suspended or dismissed at any time by the Membership Council. A resolution of the Membership Council regarding suspension or dismissal of a member of the Agenda Committee is adopted by a majority of at least two thirds of the number of votes cast in a meeting of the Membership Council during which at least three quarters of the number of members of the Membership Council are present. If in case of suspension of a member of the Agenda Committee the Membership Council does not resolve to proceed with his dismissal within three months thereafter then the suspension comes to an end. A suspended member of the Agenda Committee is given the opportunity to account for his actions in the meeting during which his dismissal is discussed. 6 Article 8 Audit Committee 1. The Audit Committee is appointed by the Membership Council and consists of four persons who jointly represent all sectors as intended in article 18 paragraph 1 of the Articles, to this end each year to be appointed from its midst by the Membership Council, to the extent that a vacancy in the Audit Committee must be filled. The candidates who obtained the largest number of votes shall be elected. If the votes are equally divided then the drawing of lots shall decide. 2. The Audit Committee has the duty to audit the annual accounts of the Cooperative and the thereto-pertaining proposals of the directors report and to advice the Membership Council in connection therewith. The Audit Committee may advice on the appointment of the external auditor of the Cooperative and designation of the lead partner. In view of the relevant costs the Cooperative shall basically use the same accounting firm as the Company on the condition that the lead partner and the auditing team do not consist of the same persons. The Audit Committee can rely on the assistance of one or more advisers. 3. The Audit Committee elects a chairman and a secretary for keeping the minutes from its midst. The chairman is responsible for the organisation of the consultation meetings of the Audit Committee. The secretary makes the minutes available to the committee members within 15 working days after a consultation meeting and makes a copy available to the Board for administration and archiving in the minutes register. 4. A member of the Audit Committee is appointed for a term of at most 4 years and can be reappointed for a second term of at most 4 years. The maximum term of office is 8 years. 5. A member of the Audit Committee can be suspended or dismissed at any time by the Membership Council. A resolution of the Membership Council regarding suspension or dismissal of a member of the Audit Committee is adopted by a majority of at least two thirds of the number of votes cast in a meeting of the Membership Council during which at

7 least three quarters of the number of members of the Membership Council are present. If in case of suspension of a member of the Audit Committee the Membership Council does not resolve to proceed with his dismissal within three months thereafter then the suspension comes to an end. A suspended member of the Audit Committee is given the opportunity to account for his actions in the meeting during which his dismissal is discussed. 7 Article 9 Complaints Committee 1. The Cooperative has a Complaints Committee where appeal can be lodged against resolutions as indicated in the Articles. 2. The Complaints Committee consists of four persons who jointly represent all sectors as intended in article 18 paragraph 1 of the Articles. Only members of the Membership Council can be appointed as a member of the Complaints Committee. 3. The members of the Complaints Committee are appointed by the Membership Council. 4. The Complaints Committee elects a chairman and a secretary for keeping the minutes from its midst. The chairman is responsible for the organisation of the consultation meetings of the Complaints Committee. The secretary makes the minutes available to the committee members within 15 working days after a consultation meeting and makes a copy available to the Board for administration and archiving in the minutes register. 5. The Complaints Committee may rely on the assistance of one or more advisers. 6. A member of the Complaints Committee is appointed for a term of at most 4 years and can be reappointed for a second term of at most 4 years. The maximum term of office is 8 years. 7. A member of the Complaints Committee can be suspended or dismissed at any time by the Membership Council. A resolution of the Membership Council regarding suspension or dismissal of a member of the Complaints Committee is adopted by a majority of at least two thirds of the number of votes cast in a meeting of the Membership Council during which at least three quarters of the number of members of the Membership Council are present. If in case of suspension of a member of the Complaints Committee the Membership Council does not resolve to proceed with his dismissal within three months thereafter then the suspension comes to an end. A suspended member of the Complaints Committee is given the opportunity to account for his actions in the meeting during which his dismissal is discussed.

8 8 Article 10 Nomination Committee 1. The Nomination Committee is appointed by the Membership Council and consists of four persons who jointly represent all sectors as intended in article 18 paragraph 1 of the Articles, to this end each year to be appointed from its midst by the Membership Council, to the extent that a vacancy in the Nomination Committee must be filled. The candidates who obtained the largest number of votes shall be elected. If the votes are equally divided then the drawing of lots shall decide. 2. The Nomination Committee has the following duties: a. nomination of a candidate for the election as a member of the Membership Council in conformity with article 19 paragraph 5 of the Articles; b. the handling of appeal against an establishment resolution as intended in article 18 paragraph 2 of the Articles; c. the establishment of the result of the elections for the Membership Council; d. the establishment of the result as intended under c. in an official report; e. other duties as follow from the Articles. 3. The Nomination Committee elects a chairman and a secretary for keeping the minutes from its midst. The chairman is responsible for the organisation of the consultation meetings of the Nomination Committee. The secretary makes the minutes available to the committee members within 15 working days after a consultation meeting and makes a copy available to the Board for administration and archiving in the minutes register. The relevant minutes are also made available to the Membership Council. 4. A member of the Nomination Committee is appointed for a term of at most 4 years and can be reappointed for a second term of at most 4 years. The maximum term of office is 8 years. 5. A member of the Nomination Committee can be suspended or dismissed at any time by the Membership Council. A resolution of the Membership Council regarding suspension or dismissal of a member of the Nomination Committee is adopted by a majority of at least two thirds of the number of votes cast in a meeting of the Membership Council during which at least three quarters of the number of members of the Membership Council are present. If in case of suspension of a member of the Nomination Committee the Membership Council does not resolve to proceed with his dismissal within three months thereafter then the suspension comes to an end. A suspended member of the Nomination Committee is given the opportunity to account for his actions in the meeting during which his dismissal is discussed. Article 11 Meetings of the Membership Council (formal meetings / decision-making meetings of the Membership Council) 1. The Board determines the agenda for the meeting of the Membership Council in consultation with the Agenda Committee.

9 2. The notice convening the meeting of the Membership Council is given by the responsible employee for cooperative matters / the secretariat of the Cooperative in the name of the Board. The notice convening the meeting is give in writing and/or electronically and is accompanied by the agenda and documents that may require discussion. 3. The thereto-designated employee(s) support(s) the Board in the actual organisation of the convocation and the meetings of the Membership Council (information, agenda, introduction programme, etc.). 4. The chairmanship of a formal / decision-making meeting is vested in the chairman of the Membership Council (or his deputy). The chairman of the Membership Council (or his deputy) sees to it and monitors that there is sufficient room for discussion in the meeting of the Membership Council in order to facilitate proper perception, formation of an opinion and decision-making. 5. The minutes of the meeting of the Membership Council are prepared by the theretodesignated employee under the responsibility of the secretary of the meeting and are adopted by the Membership Council in the first following meeting. 6. The minutes shall show the subject matters, standpoints, considerations and resolutions during the meeting in a concise but adequate manner. This takes place in such manner that those who were absent are provided with a clear and complete picture of the where relevant deliberations during the meeting. The minutes are made available to the Membership Council and the Board and are recorded in the minutes register of the Cooperative. 9 Article 12 Meetings of members of the Membership Council (informal meetings, sector meetings) 1. If so required meetings for sectors within the Membership Council are organised on an ad hoc basis. 2. Apart from the formal (decision-making) meetings of the Membership Council three informal meetings take place per year. These take place during the day or in the evening and also depend on the subject matters and/or the location. Meeting locations may, apart from the head office in Lochem, also be other (ForFarmers) locations. 3. The chairmanship of an informal meeting for members of the Membership Council (nondecision-making meeting) is vested in the chairman of the Membership Council or his deputy.

10 10 Article 13 Confidentiality Each and every member of the Membership Council and member of a committee is held with regard to any and all information and documentation obtained within the framework of this membership of the Membership Council and/or a committee to observe the necessary discretion and, in respect of the confidential information, the confidentiality. Members and former members of the Membership Council and/or a committee shall not take confidential information outside the Membership Council or divulge it to the public or otherwise make it available to third parties, unless the Cooperative divulged this information or it was determined that this information had already been available in the public domain. Article 14 Information 1. The Board provides the Membership Council and its committees with any and all relevant information that it requires for the performance of its duties to the extent that the interests of the Cooperative and/or the law and/or regulations do not oppose this. This includes, but is not limited to, obligations regarding confidentiality, prior knowledge, price sensitive information, privacy legislation and the like. 2. The Board performs, in consultation with the Audit Committee, a thorough assessment of the performance of the external auditor within the various entities and the capacities in which the external auditor operates at least once every four years. The most important conclusions hereof are communicated to the Membership Council. 3. The external auditor is present during the meeting of the Membership Council when it comes to the agenda items regarding handling and adoption of annual accounts (the annual meeting of the Membership Council). 4. A member of the Membership Council informs the responsible employee for cooperative matters as soon as possible of changes in personal details (e.g. change of address, change of address, etc.). Article 15 Consultation between the Board and the chairman of the Membership Council The chairman of the Membership Council annually consults with the Board. Article 16 Corporate Governance / Priority Each and every substantial change in the corporate governance structure of the Cooperative is submitted to the Membership Council for deliberation as a separate agenda item.

11 11 Article 17 Priority If and as long as the Cooperative is priority shareholder of the Company the Membership Council shall determine in advance how the Board shall vote on the priority share on behalf of the Cooperative in its aforementioned capacity. To this end the Membership Council shall provide the Board with a voting instruction. If the Membership Council does not provide the Board with this kind of voting instruction in a timely fashion then the Board shall exercise the voting right associated with the priority share at its sole discretion. Article 18 General Meeting of the Company: voting right and prior meeting of the Membership Council 1. Introduction Pursuant to the trust terms and conditions of the ForFarmers Trust Office Foundation (the foundation ) the Cooperative can issue a voting instruction to the foundation regarding the method of exercising the voting right that is associated with the shares in the share capital of the Company held by the foundation to the extent that the voting right was not, in accordance with the trust terms and conditions, requested by the depositary receipt holders of the foundation on the condition that if the Cooperative and certain affiliated parties (as further described in the aforementioned trust terms and conditions) jointly at any time hold fewer than 30% of the voting rights in the General Meeting the number of shares held by the foundation for which the Cooperative can issue a voting instruction is limited to such number of shares that, jointly with the shares held by the Cooperative and the aforementioned affiliated parties, does not represent more than 29.9% of the voting rights in the General Meeting. In addition the Cooperative itself holds shares in the share capital of the Company. On the basis of the Articles a Member can request the voting right with regard to such number of shares into which he can convert his participation account (all as further described in the Articles). The shares held by the Cooperative for which a voting right as intended in the previous sentence is not requested the Cooperative exercises the voting right in the General Meeting in consideration of the provisions set forth below. 2. The shares in the share capital of the Company for which the Cooperative can issue a voting instruction as intended in the first section of paragraph 1 are hereinafter referred to as the Foundation Shares. The shares held by the Cooperative for which the voting right as intended in the second section of paragraph 1 is not requested are hereinafter referred to as the Own Shares. 3. The Cooperative deems it appropriate that the Membership Council influences the manner that the Cooperative (i) issues voting instructions to the foundation with regard to the Foundation Shares and (ii) exercises the voting right associated with the Own Shares.

12 4. Pursuant to article 27 of the Articles the Membership Council is authorised to agree on relevant regulations. 5. Approval of the Membership Council With regard to each and every General Meeting where one or more items are on the agenda for vote the Cooperative requires the prior approval of the Membership Council for (i) issuing voting instructions to the foundation with regard to the Foundation Shares and (ii) exercising the voting rights associated with the Own Shares. To this end the Cooperative shall, as soon as practically possible after having received a notice convening a General Meeting that includes one or more items on the agenda for vote, send the chairman of the Membership Council the agenda of the said General Meeting (with the relevant explanation) and it shall inform the chairman of the Membership Council of the manner that with regard to each of the relevant items for vote the Cooperative (i) wishes to issue voting instructions to the foundation with regard to the Foundation Shares and (ii) wishes to exercise the voting right associated with the Own Shares. 6. The approval as intended in paragraph 5 can be granted or withheld in a meeting of the Membership Council or in writing. If the agenda of the General Meeting includes an item regarding a proposal regarding appointment, dismissal or suspension of a supervisory director or a director then approval as intended in paragraph 5 requires a majority of at least two thirds of the members of the Membership Council present (or represented) in a meeting. 7. Unless at the latest on the day prior to the relevant General Meeting the Cooperative is informed by the chairman of the Membership Council that the approval as intended in paragraph 5 is expressly withheld by resolution of the Membership Council, the approval as intended in paragraph 5 is deemed to have been granted and the Cooperative shall with regard to the said General Meeting be free in the manner of (i) issuing its voting instructions with regard to the Foundation Shares (ii) exercising the voting right associated with the Own Shares. Article 19 Applicable law and forum 1. These regulations are subject to and must be interpreted in accordance with Dutch law. 2. The District Court in Amsterdam is exclusively competent to take cognisance of each and every dispute with regard to these regulations, which also includes disputes regarding the existence, the validity, the application, the interpretation and the termination of these regulations. 12 Article 20 Entry into force and publication of these regulations 1. These regulations take effect on 24 May The regulations were adopted by the meeting of the Membership Council of 21 March 2016 and are posted on the website of the Cooperative.

13 13 Profile for a member of the Membership Council / chairman of the Membership Council / general deputy chairman of the Membership Council of Coöperatie FromFarmers U.A. (For the definitions used in this document reference is made to the Membership Council Regulations of Coöperatie FromFarmers U.A.) Background for the position - In the past the Cooperative was incorporated to provide for the material needs of the Members; or rather the Cooperative produced the feed for and also supplied commercial articles to the Members. This was an important strategic part of the business of the farmer. In the past years after shrinkage a path of growth was chosen in order to maintain and further improve the services to the Members and to maintain and grow the assets in the Cooperative. Meanwhile the Members of the Cooperative have, for instance, purchased < 20% of the turnover of ForFarmers. The assets of the Cooperative basically consist of the holding of (depositary receipts for) shares in the share capital of the Company. The Membership Council is in particular the representative on behalf of the Members for the supervision on the assets, which consists of the (depositary receipts for) shares in the share capital of the Company. - From a formal point of view the most important task of the Cooperative is holding (depositary receipts for) shares in the share capital of the Company and the implementation of the Registered Assets process. - The Membership Council is the highest decision-making body of the Cooperative and can also issue voting instructions with regard to exercising the voting right on shares in the General Meeting (in consideration of the relevant provisions set forth in the Membership Council Regulations). - The Membership Council has the responsibilities and authorities as established in the Articles and regulations of the Membership Council. - As a representative of the Members the Membership Council must know what is going on amongst the members of the Cooperative. - For members of the Membership Council a broad orientation on developments in the agricultural business as also on developments in the financial-economic area is required. A member of the Membership Council (M/F) must: 1. be or become a member of the Cooperative; 2. be an entrepreneur / be actively involved in a business in the primary agricultural production; 3. preferably function, though education and/or experience, at the higher professional ( HBO ) level; 4. preferably have (reasonable) knowledge of the English and the German language or the willingness to master the said knowledge; 5. have knowledge of the agriculture and horticulture and the cattle farming and have affinity with the sector; 6. have a commercial attitude with a sense for social issues; 7. dispose of good communicative skills;

14 14 8. be able to work in a team; 9. enjoy confidence in the environment; 10. dispose of sufficient time. Chairman of the Membership Council and general deputy chairman of the Membership Council The chairman of the Membership Council and the general deputy chairman of the Membership Council moreover dispose of the following characteristics / have the following specific duties: 1. the chairman of the Membership Council is able to preside informal meetings of the Membership Council; 2. they are proactive with regard to the signalling and passing on of developments that are relevant to the performance of the Membership Council; 3. the chairman of the Membership Council coordinates subject matters / agendas and relevant action points with the coordinator of cooperative matters; 4. they take the initiative for the recruitment of potential candidates as a member of the Membership Council.