LIC Board proposes simpler, fairer share structure

Private Bag 3016
Hamilton 3240
New Zealand

0800 651 156
www.lic.co.nz
LIC is the trading name of Livestock Improvement Corporation Limited
Market statement
9 February 2018
LIC Board proposes simpler, fairer share structure
The Board of Livestock Improvement Corporation Limited (NZX: LIC) (LIC) has released its
proposal to simplify LIC’s share structure by bringing the farmer-owned co-operative’s existing two
classes of shares together into a single class.
Share simplification proposal key points:
1. From two classes of shares to one
2. Fundamentals of co-operative protected
3. All shareholders will have a vote and receive dividends based on profitability
4. Share standard will increase
5. All shares will be listed and subject to market pricing
LIC currently has two classes of shares – co-operative control shares and investment shares,
which are listed on the NZX Alternative Market (NZAX).
Board Chair, Murray King, said the Board is pleased to recommend the new share structure to
shareholders following a comprehensive review of LIC’s share structure that began in 2016 in
response to concerns around the growing disparity between LIC’s two share classes.
The proposed new structure will:
• Protect the co-operative principles that are fundamental to LIC
• Ensure a fairer system that treats all shareholders equally
• Give LIC capital flexibility in the future
• Support LIC’s strategy (Vision, Purpose, Strategic Themes and Values)
• Deliver a simpler share structure with less hassle for shareholders and LIC
“Under the current share structure, co-operative shareholders have greater voting rights but have
limited exposure to the financial benefits of our recent transformation programme and future growth
opportunities. Conversely, investment shareholders, whilst having a right to a greater share of the
economic value created by LIC for its shareholders, have limited ability to control the strategy or
direction that LIC takes to optimise that value.
“This creates potentially serious conflicts between the two existing classes of shares. The Board
believes these conflicts will worsen over time and that now is the time to address these conflicts
given they will otherwise lead to issues for the on-going management and governance of LIC.
“The proposal will reduce this conflict, preserve LIC’s co-operative principles and allow us to focus
on a strategy designed to benefit all shareholders equally.

“Share simplification is in the best interests of both classes of shareholders and LIC. While the
impacts of moving to a single share structure differ for shareholders depending on their current
investment mix, we believe that the overall benefits outweigh the negative effects,” he said.

Page 2 of 2
King said the Board of LIC along with the Shareholder Council recommend a Yes vote. The
Independent Adviser believes that, on balance, the proposal is in the best interests of both classes
of shareholders and LIC.
“It is unusual for a company to have two classes of shares. Moving to a single class of shares is
about future proofing LIC and ensuring a resilient and adaptable co-op for generations to come.
“For our co-op to stay strong, it is important that these changes happen. That’s why the Board has
made it an important part of its strategic roadmap for LIC, and spent the last 18 months working to
find a solution that is fair and as simple as possible.
“We urge shareholders to read the information coming to their mailboxes soon, and support the
proposal by voting yes.
“Two classes of shares with unequal rights are not suitable for this modern, progressive co-op.”
The changes will only happen if approved by co-operative shareholders and investment
shareholders, each to a level of 75% or more of the votes received.
A description of how, and the relative values at which, the share simplification would be
implemented and the advice from the Independent Adviser that supports the proposal is set out in
the attached Introduction to LIC’s Share Simplification Booklet and the Notice of Meeting. These
contain important information.
Information about the proposal is available on LIC’s website and detailed information packs will be
mailed to all shareholders next week. The information packs outline the proposal, how it would be
implemented and provide an exact breakdown of how each LIC shareholding would change under
the proposed share simplification process.
The proposal is now subject to a shareholder vote which can be done online, by post, in person or
by proxy at a Special Meeting at LIC’s head office in Newstead, Hamilton on 14 March 2018.
Voting papers and Notice of Meeting details are contained in the information packs.
More information about the proposed changes is available at www.lic.co.nz/vote.
ENDS
Media contact: Ashleigh Sattler ashleigh.sattler@lic.co.nz 027 617 1942
For any shareholder enquiries please phone 0800 264 632
About LIC
LIC is a farmer-owned co-operative that provides a range of services and solutions to improve the productivity and
prosperity of farmers. This includes dairy genetics, information technology, herd testing, DNA parentage verification and
farm advisory services through FarmWise. Subsidiary business LIC Automation also provides integrated automation
systems and unique milk testing sensors that present real-time data while a cow is being milked. With origins dating back
to 1909, LIC has a long history of world-leading innovations for the dairy industry.
Today the New Zealand-based co-operative employs more than 700 permanent staff, swelling to 2000 during the peak
dairy mating season. LIC also has offices in the United Kingdom, Ireland and Australia. All LIC profit is returned to its
farmer owners/shareholders in dividends or re-investment for new solutions, research and development. www.lic.co.nz

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NOTICE OF SPECIAL MEETING AND
EXPLANATORY MEMORANDUM
Share Simplification Proposal
Single Share Structure
LIVESTOCK IMPROVEMENT
CORPORATION LIMITED
February 2018

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NOTICE OF MEETING AND EXPLANATORY MEMORANDUM

SHARE SIMPLIFICATION PROPOSAL
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IMPORTANT TRANSACTION FOR LIC SHAREHOLDERS
Livestock Improvement Corporation Limited (LIC) is proposing
to make some important changes to its share structure. There
are various steps required to effect the reorganisation of
LIC’s share structure. These steps and associated changes
described in this document are collectively referred to as the
“Proposal”.
Each Shareholder has been sent an “Information Pack” which
requires your immediate attention. The Board strongly advises
that you read it carefully and in full before deciding how to vote.
The Information Pack includes:
• a letter from the Chairman of LIC, Introduction to the
Proposal, and Q&A;
• this Notice of Special Meeting and Explanatory
Memorandum (this document);
• the Independent Adviser’s Report commissioned by LIC;
and
• a Voting Form / Proxy Appointment Form.
The Information Pack is intended to inform you about the
Proposal, enable you to consider its implications, and help you
decide whether to vote for or against the Resolutions.
This document is a limited disclosure document for the
purposes of clause 24 of Schedule 1 to the Financial Markets
Conduct Act 2013 (FMCA) (the variations exclusion) and clause
35 of Schedule 8 of the Financial Markets Conduct Regulations
2014 (Regulations). The variations exclusion allows LIC to offer
a variation of the terms of a security (in this case, both LIC’s
Co-operative Control Shares and Investment Shares) without
the need for a product disclosure statement. The limited
disclosure document must meet the disclosure requirements
prescribed by clause 35 of Schedule 8 of the Regulations.
If you choose not to vote at all, whether the Resolutions are
passed or not will be determined solely by reference to the
number of votes cast by the shareholders who do vote. If the
Proposal is approved, it will be implemented and apply to all
Shareholders, regardless of whether or not they voted.
The full copy of the Independent Adviser’s Report by
Northington Partners is provided with this document and a
summary of the Independent Adviser’s Report is set out on
page 14 of this document. A summary of the proposed changes
to the Constitution is provided in Schedule 2
and the full copy of the New Constitution is available at
www.lic.co.nz/vote
You should note the risk factors associated with an investment
in LIC described on page 6 and in Schedule 3.
NO INVESTMENT ADVICE
The Information Pack has been prepared without reference to
the commercial or investment objectives, financial and taxation
situation or particular needs of any Shareholder or any other
person or entity. The information and recommendations
contained in the Information Pack do not constitute, and
should not be taken as, financial or investment advice.
The Board encourages you to seek independent financial,
investment or other professional advice before making
any decision as to whether or not to vote in favour of the
Resolutions or any other investment decision in connection with
any matter related to the Information Pack.

NZAX LISTING
Application has been made to New Zealand’s stock exchange
(NZX) for permission to quote the Ordinary Shares on the NZX
Alternative Market (NZAX) if the Proposal is approved. All
requirements of NZX relating to the application that can be
complied with on or before the date of this Information Pack
have been duly complied with. However, NZX accepts no
responsibility for any statement in this Information Pack. The
NZAX is a licensed market operated by NZX, which is a licensed
market operator regulated under the FMCA.

DEFINED TERMS
Unless otherwise indicated, capitalised terms used in this
document have the specific meaning given to them in the
Glossary on page 40 of this document.

DATE OF THIS DOCUMENT AND INFORMATION PACK
This document and the Information Pack are dated
9 February 2018.

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SECTION A
Introducing the Proposal 5
Introduction – Have your say on LIC’s Future 5
Key Points 5
Proposal Recommended by the Board and Shareholder Council 6
Independent Adviser’s Report 6
Key risks 6
What you need to do 7
Key dates 8
Approval Timetable for the Proposal 8
Implementation Timetable for the Proposal (if approved) 9
Overview of the Proposal 10
Summary of Impact of the Proposal 12
Impact of the Proposal on Existing Shareholders 12
Summary of the Independent Adviser’s Report 14
The Proposal in More Detail 18
Why does LIC need a single share structure? 18
What does the Proposal involve? 21
How will the Proposal be Implemented? 27
Governance of LIC and Representation of Farmers 27
Qualifying Expenditure 28
Taxation Implication for NZ Resident Shareholders 28
Overview of the Structure Post Capital Reclassification 29

SECTION B
Notice of Special Meeting 32
Resolutions 32
Eligibility to Vote and Required Approvals 33
How to Cast a Vote 34
Explanation of the Resolutions and Additional Information 36
Glossary 40
SCHEDULE 1 Summary of Shareholding Rights between Classes 42
SCHEDULE 2 Summary of the Changes to the Constitution 44
SCHEDULE 3 Risks Affecting an Investment in LIC 49
SCHEDULE 4 Roadshow Timetable 52
DIRECTORY 58

Note: The Independent Adviser’s Report has been circulated with this document.

Contents
ENQUIRIES
Enquiries in connection with the Information Pack can be directed to your broker, financial, investment, or other professional
adviser. If you have any questions about the number of Shares you hold in LIC, or how to vote or complete the Voting Form,
please contact the Election Helpline on 0800 666 033.

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SECTION A

SHARE SIMPLIFICATION PROPOSAL
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SECTION A: INTRODUCING THE PROPOSAL
Introducing the Proposal
Introduction – Have Your Say on LIC’s Future
LIC is proposing to simplify its share structure so that it will have
a single class of Ordinary Shares. This Proposal is part of a
broader process of change and transformation that LIC began
in 2016. The focus of this process is to help ensure a resilient
and adaptive co-operative that is able to respond in an agile
way to challenges and opportunities that may lay ahead.
The overriding priority of the Board in reaching this point has
been protecting the co-operative principles that are at the
heart of LIC and helping prepare it for the future. The Proposal
detailed in this document does just that.
You will have received with this document a letter from Murray
King, the Chairman of LIC, and an Introduction to the Proposal.
This document should be read together with those documents,
as this document provides more detail about the Proposal and
includes details of the notice of the meeting at which you will be
asked to vote on the Proposal.
It is important that you understand what is being proposed and
you are actively involved in the decision making. A Roadshow
has been arranged to allow us to answer any questions you
may have. In addition, you will shortly be contacted directly by
an LIC representative to talk through how you can vote and to
answer any further questions you may have.
Most importantly, we want you to vote. If the Proposal is
approved, it will be binding on all Shareholders, whether or not
they voted for the Proposal.
All Co-operative Control Shareholders and Investment
Shareholders will be entitled to vote on the Proposal. Details
on eligibility to vote on the Resolutions proposed and how to
cast your vote are set out on page 33 of this document.
Have your say on LIC’s future – vote online, in person,
via postal vote, or appoint a proxy to vote on your behalf.
See page 8 for relevant deadlines for submitting your vote.
Key Points
• LIC will move from having two classes of shares, being
Co-operative Control Shares and Investment Shares, to a
single class of Ordinary Shares. The existing Shares will
be reclassified as Ordinary Shares after adjustment for
their relative rights and values.
• The fundamentals of the co-operative will be preserved.
• The Share Standard will increase but, at Implementation,
additional shares will be issued on a nil-paid basis (to
be repaid over time as described on page 24) to ensure
all existing Shareholders comply with the new Share
Standard at Implementation.
• Following Implementation, each Ordinary Share will have
a vote and will be entitled to receive dividends based on
LIC’s profit.
• The Ordinary Shares will be traded on the NZAX
1
and
subject to market pricing. All Shareholders will be able
to benefit from dividends and capital appreciation over
time if the Shares increase in value, noting that the
Shares may also reduce in value.

An overview of the Proposal is set out in this document under
the headings
Overview of the Proposal and Summary of Impact
of the Proposal. The Overview describes where Shareholders
can find more information later in this document.

1. Provided they are fully paid up.

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Proposal Recommended by the
Board and Shareholder Council
The LIC Board and the Shareholder Council both fully support
the Proposal and recommend that all Shareholders vote
in favour of the Resolutions proposed. Each Director has
indicated that he or she will be voting the Shares they control
in favour of all of the Resolutions.
Independent Adviser’s Report
The LIC Board has commissioned Northington Partners to
assess the rationale for the Proposal, its merits and relative
fairness to the holders of Co-operative Control Shares and
Investment Shares.
The Independent Adviser has concluded that, on balance,
it is in the best interests of both classes of Shareholders
and LIC.
A summary of the Independent Adviser’s Report is set out on
page 14. A full copy of the Independent Adviser’s Report is
circulated with this document. You are encouraged to read the
Independent Adviser’s Report in full.
Key Risks
Any investment in LIC will be subject to industry and LIC-
specific risks, and your exposure to these risks may change
as a consequence of the Proposal being implemented.
These risks relate to the financial position and performance
of LIC, and to LIC’s ability to deliver products and services
to its Shareholders. In particular, under the Proposal, the
value of the Shares going forward will be determined by the
market and will move up and down depending on a variety
of factors, including LIC’s performance and other external
macroeconomic and geopolitical factors. That means any
Shareholders looking to buy or sell Shares will be exposed to
market price risk.
Shareholders should consider these potential risks, the
likelihood of a risk event occurring, and the impact it may have
on a Shareholder’s investment. Schedule 3 of this document
outlines the key risks to LIC’s business and your investment
identified by the Directors and includes an assessment of the
exposure and any steps LIC has taken, or proposes to take, to
mitigate such risks.
SECTION A: INTRODUCING THE PROPOSAL

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What You Need To Do
DETAILS STEP
1. Read and carefully consider the Information Pack The Information Pack contains the information your Board
believes will assist you to understand the Proposal and the
reasons for it.
2. Consider the Notice of Special Meeting
included in this document
The Notice of Special Meeting outlines your eligibility to vote
on the Proposal, the voting process and the key dates and
deadlines. If you are eligible to vote, choose the voting method
that suits you best and diarise the relevant deadlines. If you
are not attending the Special Meeting in person, you will need
to submit the relevant forms in advance in order to vote.
3. Participate in the process and be informedAttend your nearest Roadshow. Details of the Roadshow are
set out in Schedule 4 and you can choose which Roadshow
meeting to attend. If you have any questions or want
further information about the Proposal, voting process or
Implementation, please be sure to ask. The contact details are
set out in the Directory at the back of this document. You may
also wish to consult with your usual financial, investment or
other professional adviser.
4. Vote on the ProposalMake sure you vote on the Proposal by attending the meeting
in person, appointing a proxy to attend the meeting in your
place, or submitting a postal or electronic vote in advance
of the Special Meeting. Check page 34 of this document for
detailed requirements for your preferred voting method.
During the voting period, if you have not voted, you will receive
“reminder to vote” emails from iro@electionz.com.
SECTION A: INTRODUCING THE PROPOSAL

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Keys Dates
Approval Timetable for the Proposal
The below timetable outlines the process for the approval of the Proposal.
D AT ETIMEDETAILS
26 Feb 2018 –
9 March 2018
Roadshow to introduce the Proposal and answer any
questions on the Proposal (see Schedule 4 for details).
6 March 20185.00 pmShareholders’ voting eligibility determined. Any
Shareholder on the share register as at 5.00 pm on
this date will be eligible to vote the Shares they hold
at that time.
12 March 201810.30 amCut-off for receipt of postal voting and proxy forms.
Internet voting closes.
14 March 201810.30 amSpecial Meeting is held at LIC’s Tempero Centre, Cnr.
Ruakura and Morrinsville Roads, Newstead, Hamilton, with
registration starting from 9.30 am.
SECTION A: KEY DATES

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Implementation Timetable for the Proposal
(if approved)
The timetable below shows how the Proposal will be implemented, if approved. These steps will take effect in the order listed below.
The dates listed below may be subject to change, as may be approved by the Board and Announced to Shareholders.
D AT E
2
TIMEACTION
14 March 2018On passing of the ResolutionsExisting Constitution is amended in accordance with
Resolution 2(a) (see Section B of this document).
5 July 2018Notice of Implementation Date is Announced to
Shareholders.
16 July 20185.00 pmTrading in Investment Shares is suspended.
19 July 2018New Co-operative Control Shares are issued / relevant
excess Co-operative Control Shares are redeemed in any
such case to meet the Share Standard as part of LIC's
2018 Annual Update.
19 July 2018Share Standard is amended in accordance with Resolution
1(a) (effective immediately after LIC's 2018 Annual
Update).
19 July 2018New Co-operative Control Shares are issued on a nil
paid basis (with the liability of $1 per new Share to be
repaid over time) and Co operative Control Shareholders
subscribe for those Shares to meet the new Share
Standard in accordance with Resolution 1(b).
Investment Shares are subdivided in accordance with
Resolution 1(c).
19 July 2018The existing Constitution is revoked and the New
Constitution is adopted in accordance with Resolution
2(d).
All Co-operative Control Shares and Investment Shares
are Reclassified into Ordinary Shares in accordance with
Resolutions 2(b) and 2(c).
23 July 201810.00 amTrading in Ordinary Shares opens.
SECTION A: KEY DATES


2. These dates are subject to change, as stated above.

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Overview of the Proposal
TOPICSUMMARYSEE ALSO
Why does LIC
need a new share
structure?
Protecting the Co-operative: The overriding priority is protecting the co-operative
principles that are at the heart of LIC. The Proposal will allow LIC to continue to
look after the interests of all its Shareholders with the core services it provides,
while also enabling it to generate sufficient profits to better position it for the future.
Page 18
To be fair to all: The Proposal seeks to remove the tension in LIC's share structure
which exists because of the different rights between the two classes of Shares.
The Co-operative Control Shares have substantively all voting rights and the
Investment Shares have most of the economic rights.
Page 19
Capital flexibility: The proposed capital structure would give LIC greater flexibility
to address any future capital needs, noting that LIC has no current intention to
seek investment from a third-party investor for either LIC or LIC Agritechnology
Company Limited. If LIC wishes to introduce further equity funding from a third-
party investor for LIC or LIC Agritechnology Company Limited in the future, it would
seek Shareholder approval for it at that time. However, LIC may acquire interests
in other companies, make further minority or majority investments, and form joint
ventures from time to time as it grows and diversifies the business.
Page 20
Supporting LIC's strategy: Moving to a single class structure is an important part
of ensuring LIC Shareholders’ collective voice is heard on LIC’s strategy without the
conflicting perspectives that arise from the different rights attaching to the two
classes of Shares.
Page 20
Simplicity: Having a single Share structure will simplify the administrative
requirements for both LIC and its Shareholders and assist to make the share
structure more easily understood by LIC's stakeholders.
Page 20
What does the
Proposal involve?
Move to a single class of Shares: In broad terms, the Proposal involves
reclassifying all Co-operative Control Shares and Investment Shares into a single
class of Ordinary Shares.
Page 21
Need to equalise values between the classes: Because Investment Shares are
worth more than Co-operative Control Shares, Co-operative Control Shareholders
will need to invest additional capital over time to bridge this gap. This will be
done by way of an issue of additional Co-operative Control Shares to holders of
Co-operative Control Shares on a nil paid basis (Nil Paid Shares), meaning the
Shareholders receiving these Shares will owe $1 for each such Share and will be
required to pay for them over time in the way described below.
Page 21
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TOPICSUMMARYSEE ALSO
What does the
Proposal involve?
Cont
Additional investment met from dividend flow: Co-operative Control
Shareholders will meet their additional investment obligation from dividends
paid on all Nil Paid Shares and other Ordinary Shares held to meet the Share
Standard
3
. Dividends on all other Shares, including Investment Shares
reclassified into Ordinary Shares will continue to be paid to Shareholders to do
with as they wish.
Page 23
NZAX listing: Ordinary Shares will trade on the stock exchange with a market
price and there will no longer be a $1 Co-operative Control Share. The price
of Ordinary Shares will likely move up and down over time. Importantly, if a
Shareholder is required to purchase more Shares to meet the Share Standard,
the Shares will need to be purchased via the market or from another Shareholder
(unless LIC decides in the future to issue more Shares). The price paid for these
Shares will vary. If a Shareholder fails to purchase the Shares needed to meet
the Share Standard, LIC will purchase the necessary Shares on behalf of the
Shareholder.
Page 23
Share Standard reset: The Share Standard will be reset to one Share for
every $6.25 of Qualifying Expenditure from the current $1 of share capital for
every $25 of Qualifying Expenditure. The Nil Paid Shares to be issued to Co-
operative Control Shareholders on Implementation can be used to meet the
Share Standard so all Shareholders will automatically meet the Share Standard
following Implementation. Going forward, Shareholders will be required to
purchase additional Shares if required to do so to meet the Share Standard. The
price of the Shares will have no effect on the number of Shares a Shareholder is
required to hold under the Share Standard and the new Share Standard will test
compliance by reference to the number of Shares rather than their value.
Page 24
Constitutional changes: The Proposal will result in a relatively substantial
number of changes to LIC's Constitution. Most of the changes are consequential
– that is, they reflect the key elements of the Proposal described in this
document. Some changes have also been made to increase the flexibility of the
Board's decision-making ability with respect to changes to the Share Standard,
Minimum Purchases Amount and Qualifying Products and Services.
Page 26
What are the
conditions to the
Proposal?
The Proposal will only take effect if approved by holders of Co-operative Control
Shares and Investment Shares, each to a level of 75% of the votes received. The
changes to the Constitution are subject to Ministerial consent.
Page 27
How will the
Proposal be
implemented?
Implementation of the Proposal, if approved by Shareholders, will take place in
July 2018 as part of the 2018 Annual Update (except for Resolution 2(a) which will
take effect immediately upon approval of the Resolutions).
Before the Reclassification takes effect, Shareholders' current holdings of
Co-operative Control Shares will be adjusted by reference to their Qualifying
Expenditure in the 2017/2018 season.
Page 27
SECTION A: OVERVIEW OF THE PROPOSAL

3. If a Shareholder wishes to sell a Nil Paid Share before it has been paid up through dividends or otherwise, that Shareholder will need to pay it up out of their own resources
before it can be sold. See page [ ] for more information.

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Summary of Impact of the Proposal

A detailed comparison of the rights attaching to each of the Co-operative Control Shares, the Investment Shares and the
Ordinary Shares is set out in Schedule 1. A summary of the key impacts on Co-operative Control Shareholders and the Investment
Shareholders is set out below.
Impact of the Proposal on Existing Shareholders
WHAT DO I HAVE THAT IS CHANGING? WHAT DO I GET?
Co-operative
Control
Shareholders
Your Co-operative Control Shares.A Shareholder will receive, for each
Co-operative Control Share they hold:
• One fully paid Ordinary Share; and
• Three Nil Paid Shares. Nil Paid Shares
must be paid up over time but have full
dividend and voting rights even while not
fully paid.
For example: A Shareholder holding 20
Co-operative Control Shares will receive
20 Ordinary Shares and 60 Nil Paid Shares.
They will have an outstanding liability on
their Nil Paid Shares of $1 per Share.
Co-operative Control Share priority dividend
(based on the first mortgage lending rate of LIC's
principal banks in respect of secured loans made
to dairy farmers) and priority rights to capital on
liquidation.
A right to any dividends declared by LIC
largely determined by reference to LIC’s
profits. These will be paid equally to all
Shareholders (there will be no priority).
Dividends received on all Nil Paid Shares and
any Ordinary Shares held to meet the Share
Standard must be applied to pay up the Nil
Paid Shares. See page 27 for an example.
The right and obligation to redeem Co-operative
Control Shares at nominal value of $1.
Co-operative Control Shareholders currently do
not share in any capital appreciation.
For example: If a Co-operative Control
Shareholder holding 1,000 Co-operative Control
Shares has reduced their Qualifying Expenditure in
the last season so that it is required and permitted
to hold only 800 Co-operative Control Shares, they
must redeem the excess 200 Co-operative Control
Shares by returning them to LIC and receiving $1
per Share, or $200 in total.
Shares may no longer be redeemed and must
be sold to another Shareholder directly or
on the share market at the prevailing market
price. Shares will benefit from any capital
appreciation but may also reduce in value.
If a Shareholder is required to purchase
further Shares in the future in order to meet
the Share Standard, they will need to be
bought at the then prevailing market price.
For example: If a Shareholder holding
1,000 Shares has reduced their Qualifying
Expenditure in the last season in such a way
that it is now required to hold only 800 Shares
under the new Share Standard, they may
choose to:
• sell the excess 200 Shares, provided
these Shares are fully paid, on the NZAX
or directly to another Shareholder. Those
Shares would be sold at market price; or
• retain those Shares.
SECTION A: SUMMARY OF IMPACT OF THE PROPOSAL

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WHAT DO I HAVE THAT IS CHANGING? WHAT DO I GET?
Voting rights. Co-operative Control Shareholders
currently hold 100% of voting rights (other than
with respect to matters affecting the rights of the
Investment Shareholders).
The Proposal will result in voting rights on
all Shares. Co-operative Control Shares will
be reclassified into Ordinary Shares holding
voting rights. Because Investment Shares
will also be reclassified into Ordinary Shares
with voting rights, the total voting rights
attributable to the Co-operative Control
Shares will be diluted. Based on the current
ratio of Co-operative Control Shares to
Investment Shares, it is expected that Co-
operative Control Shares (together with any
Nil Paid Shares issued as part of the Proposal)
will collectively be attributed approximately
18% of total votes following Implementation.
The final percentage will be determined once
adjustments are made to the total number of
Co-operative Control Shares at the time of
the 2018 Annual Update. LIC does not expect
that change to be material but it could vary by
several percent.
Control over Director appointments. The Proposal will give voting rights to all
Shareholders who will be able to participate
in all voting decisions, including Director
appointments, in a manner provided in the
New Constitution.
Investment
Shareholders
Your Investment Shares. A Shareholder will receive four fully paid
Ordinary Shares for each Investment Share
they hold.
A dividend declared by LIC, after payment of the
priority dividend payable to holders of the Co-
operative Control Shares.
A right to any dividends declared by LIC
largely determined by LIC’s profit. The
Proposal will ensure all Shares have equal
dividend rights, with no priority. Based on
the current ratio of Investment Shares to
Co-operative Control Shares, it is expected
that Investment Shares will collectively
be attributed approximately 82% of the
total dividend rights immediately following
Implementation. The final percentage will be
determined once adjustments are made to the
total number of Co-operative Control Shares
at the time of the 2018 Annual Update.
Investment Shareholders currently have no voting
rights except with respect to matters affecting the
rights of the Investment Shareholders.
As explained above, the Proposal will
give full voting rights on all Shares.
Upon Implementation, former Investment
Shareholders will collectively hold
approximately 82% of voting rights
(including Director appointment rights).
The final percentage will be determined once
adjustments are made to the total number
of Co-operative Control Shares at the time of
the 2018 Annual Update.
SECTION A: SUMMARY OF IMPACT OF THE PROPOSAL
Impact of the Proposal on Existing Shareholders

14
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LIC
—
NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
Summary of the Independent Adviser’s Report
SECTION A: SUMMARY OF IMPACT OF THE PROPOSAL
Northington Partners Limited
Mergers, Acquisitions & Divestments • Debt & Equity Capital Raising • Corporate Finance



9 February 2018

The Board of Directors
Livestock Improvement Corporation Limited
Private Bag 3016
Hamilton 3240

Dear Directors

Introduction
Livestock Improvement Corporation Limited (“LIC” or the “Company”) is a user-owned co-operative
that develops, produces and markets artificial breeding, genetics, farm software, farm automation
and herd testing services to over 10,000 New Zealand dairy farmers and international customers.
The Company currently has two classes of shares:
▪ “Co-operative Control Shares” – 100% owned by LIC customers, who must subscribe for
shares with a nominal value equal to 4% of their Qualifying Expenditure with the Company
over the preceding dairy season; and
▪ “Investment Shares” - lis ted on the NZAX market, with trading restricted to Co-operative
Control Shareholders.
In response to inherent conflicts between the holders of the two classes of shares, LIC began a
comprehensive review of its share structure two years ago. A number of alternative structures have
been evaluated and the LIC Board has now resolved to proceed with a proposal to simplify the
Company’s capital structure and move to a single class of Ordinary Shares (the “Proposal”).
The LIC Board has commissioned Northington Partners Limited (“Northington Partners”) to
prepare an Independent Appraisal Report (“IAR”) in relation to the Proposal. While a report is not
formally required from a regulatory point of view, it will be made available to all shareholders to
ensure that they are appropriately informed when deciding whether or not to approve the relevant
resolutions in relation to the Proposal.
The principal purpose of the IAR is to provide an independent assessment of the rationale for the
Proposal, its merits and the fairness to the holders of Co-operative Control Shares and Investment
Shares respectively. These issues are all considered within the context of the current purpose and
potential future strategy of the Company.
This letter summarises the findings of our IAR.
Summary of the Proposal
Full details of the Proposal are set out in the Notice of Special Meeting and Explanatory
Memorandum (“Notice of Meeting”) including a description of the background and purpose of the
Proposal, as well as details on the mechanics of the process and the impact of the changes for
each individual shareholder.
Table 1 summarises the key features of the two share classes currently on issue.
Auckland
+64 9 913 4600
Level 26, 151 Queen St
PO Box 105-384
Auckland 1143

Christchurch
+64 3 378 2105
L4, 70 Gloucester Street
PO Box 13-804
Christchurch 8011

www.northington.co.nz

SHARE SIMPLIFICATION PROPOSAL
—
SINGLE SHARE STRUCTURE
|
15

SECTION A: SUMMARY OF IMPACT OF THE PROPOSAL

Livestock Improvement Corporation – Independent Appraisal Report Page | 2
Summary of our Assessment
Table 1: Summary of Key Features of Co-operative Control Shares and Investment Shares
Feature Co-operative Control Shares Investment Shares
Shares on
Issue
6,281,892 (18% of total shares on issue) 29,528,590 (82% of total shares on issue)
Voting
Rights
1

Full standard voting rights Voting rights only in respect of matters
affecting their rights and in the event of a
liquidation of the Company
Dividend
Policy
Receive preferred dividends based on
Westpac New Zealand’s farm first mortgage
interest rates (to the extent they are paid)
Receive ordinary dividends based on LIC’s
financial performance
Ownership
Requirement
Must hold shares with aggregate nominal
value equal to 4% of expenditure on LIC’s
qualifying products or services (assuming
this expenditure is more than $500)
No obligation to own Investment Shares
Ownership
Restrictions
Cannot be traded; shares are issued or
redeemed by the Company so that
customers remain compliant with the Share
Standard

Can only be traded between Co-operative
Control shareholders. A shareholder can
own a maximum of 5% of Investment Shares
on issue and must sell within two years of no
longer holding Co-operative Control Shares
Number of
Shareholders
10,212 6,691
Share
Trading and
Redemption
Issued and redeemed by LIC at a nominal
value of $1.00 per share
Traded on the NZAX through registered
brokers or directly between shareholders off-
market
1
Any single shareholder is limited to 1% of total voting rights.
Under the Proposal, all shares in LIC will be reclassified into a single class of shares which are
Ordinary Shares. The steps involved in the process are set out in the Notice of Meeting under the
section titled “What does the Proposal involve” and are designed to deliver an outcome whereby
the aggregate number (and value) of Ordinary Shares held by each group of shareholders is
consistent with the number of Co-operative Control Shares and Investment Shares that are
currently on issue.
Summary of our Assessment of the Proposal
A full assessment of the merits of the Proposed Transaction for LIC shareholders is set out in the
IAR which accompanies the Notice of Meeting sent to LIC shareholders. Table 2 below summarises
the conclusions contained in the IAR.
Table 2: Summary of Conclusions
Item Key Conclusions
Overview
▪ The current share structure creates potential conflicts between the Co-operative
Control Shares and the Investment Shares, which in turn gives rise to a number of
issues for the on-going management and governance of the Company.
▪ The key conflicts relate to shareholders at two ends of the Co-operative Control
Share and Investment Share ownership spectrum (those having the majority of
their investment in LIC weighted to either class). Shareholders weighted to Co-
operative Control Shares have greater voting rights but a limited share in the future
prospects of the Company or exposure to the potential financial benefits of LIC’s
recent transformation programme and new growth opportunities. Conversely, those
shareholders with more Investment Shares obtain a greater share of the economic
value of LIC and its potential future growth with no ability to control the strategy or
direction of the Company.
▪ These potential conflicts are exacerbated by the fact that the shareholders do not
own the same proportions of the two share classes; for example, about 36% of
shareholders only hold Co-operative Control Shares, while another 31% are
overweight in Investment Shares (own a higher ratio of Investment Shares

16
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LIC
—
NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
Summary of the Independent Adviser’s Report Cont
SECTION A: SUMMARY OF IMPACT OF THE PROPOSAL

Livestock Improvement Corporation – Independent Appraisal Report Page | 3
Summary of our Assessment
Item Key Conclusions
compared to the overall ratio of 18% Co-operative Control Shares / 82%
Investment Shares).
▪ We believe that simplifying the capital structure to one class of share now is a
sensible goal. Doing so will eliminate the conflict, preserve the company’s co-
operative principles and allow the Company to focus on a strategy designed to
benefit all shareholders equally.
▪ Unfortunately, the proposed implementation process is relatively complicated and
has different impacts for different groups of shareholders, largely dependent on the
relative holding of Co-operative Control Shares compared to Investment Shares.
▪ Those shareholders who currently only own Co-operative Control Shares are likely
to do so simply to meet the Share Standard required to access LIC’s goods and
services. The Proposal results in these farmers both increasing their investment in
LIC through Nil Paid Shares (in essence, an interest free loan from the Company)
and, given the terms of the Ordinary Shares, effectively converting their exposure
to the Company to more of a standard commercial interest. This commercial focus
is more in line with the current objectives of the Investment Shares.
▪ While some of the current shareholders who are underweight in Investment Shares
may view the consequences of the Proposal negatively, we suggest that the
impacts on an individual basis are relatively limited. Most farmers’ investment in
LIC is not very material in the context of their overall farming operations and the
Proposal will not significantly change that position.
▪ Those shareholders overweight in Investment Shares are giving up some
economic value in LIC through a reduced share of the future profits of the
Company but obtain voting rights that will provide greater influence over the
strategy and future direction of the Company (including the ability to vote on
director appointments). This change will ensure Investment Shareholders have
greater ability to preserve their economic interests.
▪ When considered across all LIC shareholders, we conclude that the benefits of the
Proposal outweigh the potential negative impacts for some groups of existing
shareholders.
Relative Value
Attributed to
Investment
Shares
▪ Implementation of the Proposal requires an assessment of the current intrinsic
value of the Investment Shares compared to the $1.00 nominal value attributed to
the Co-operative Control Shares. The relative value attributed to each share class
is important because it determines how much of the total economic value of the
business is allocated to each group of shareholders as part of the Proposal.
▪ Based on a range of factors, including independent expert advice, the LIC Board
has attributed a relative value of $4.00 to each Investment Share. This is broadly in
line with our assessed value range for the Investment Shares of between $3.81
and $4.88 per share, with a mid-point of $4.34.
▪ We therefore conclude that the adopted Investment Share value of $4.00 per share
is fair to all shareholders.
Impact on
Control
Position of the
Company
▪ Under the current capital structure, 100% of the voting rights in the Company are
attached to the Co-operative Control Shares. Following completion of the Proposal,
all Ordinary Shares on issue will have voting rights and the distribution of voting
rights amongst shareholders will change.
▪ The Proposal would have no impact on the control position if all shareholders held
the same ratio of Co-operative Control Shares and Investment Shares. However,
the shareholders who are underweight in Investment Shares will end up with a
lower level of voting rights and those with an overweight position in Investment
Shares will increase their relative voting control.
▪ These changes for individual farmers are not material. No shareholder currently
has a significant control position in LIC and the Proposal will not change that
position at an individual farmer level.
▪ However, the overall control position for the group of farmers who currently only
own Co-operative Control Shares will be materially affected, moving from 40% of
the total voting rights on issue down to 7%. Conversely, the total voting rights
currently held by those shareholders who are characterised as being overweight in
Investment Shares will increase from 26% to 69%.
▪ That means that a significant block of voting rights will effectively be transferred
from a group of shareholders who currently have limited commercial interest in the
Company (via either zero or a limited position in Investment Shares) to those that
are currently most focused on commercial outcomes (holding a relatively high

SHARE SIMPLIFICATION PROPOSAL
—
SINGLE SHARE STRUCTURE
|
17

SECTION A: SUMMARY OF IMPACT OF THE PROPOSAL

Livestock Improvement Corporation – Independent Appraisal Report Page | 4
Summary of our Assessment
Item Key Conclusions
number of Investment Shares). In effect these shareholders are giving up their
voting interests in exchange for a greater entitlement to the future profits of LIC.
▪ While these changes are important, we note that if the Proposal does go ahead, all
shareholders should then be uniformly focused on commercial returns irrespective
of their current relative holdings in Co-operative Control Shares and Investment
Shares.
Other
Implications for
LIC
Shareholders
The Proposal will have a range of other potential implications for all LIC shareholders:
▪ Share Standard: A number of changes to the current Share Standard are
proposed as part of the Proposal. We believe that these will provide some benefits
to both the Company and its shareholders in the future and will be implemented in
a way which has limited short-term impact on the current shareholders.
▪ Market Price Risk: All Ordinary Shares will be subject to market price risk and
may trade at prices above or below the implied issue price at inception (which is
based on the assessed $4.00 value of the Investment Shares). The risk is
especially relevant to farmers who may be looking to retire in the short term and
will therefore need to sell all of their shares. In relation to the nil paid Ordinary
Shares issued in exchange for Co-operative Control Shares, it is possible that a
retiring farmer will need to pay-up the share to $1.00 and then sell the share on-
market at a lower price.
▪ Liquidity: While the Investment Shares are currently listed on the NZAX market,
liquidity is extremely low. We believe that there could be a higher level of liquidity
in the Ordinary Shares following the Proposal, but note that the improvement is
likely to be modest.
▪ Dividends Returns: Shareholders will be giving up the preferred dividend on their
Co-operative Control Shares for ordinary dividends meaning all shareholders’
future dividends will be directly linked to the future financial performance of LIC.
While LIC paid no dividends on Co-operative Control or Investment Shares in
FY17, assuming future dividends in-line with historic averages, shareholders with
no Investment Shares (or underweight Investment Shares) will receive a greater
share of future total dividends and shareholders overweight Investment Shares will
suffer a modest level of dilution in exchange for greater control. Shareholders with
a relatively balanced level of Co-operative Control to Investment Shares will
receive similar dividend returns to what they do currently.
Conclusion
On balance, we believe that the Proposal is in the best interests of both classes of shareholders
and the Company. While the impacts of moving to a single share structure differ for some groups of
shareholders depending on their current relative investment in Co-operative Control Shares and
Investment Shares, we believe that the overall benefits outweigh the negative effects. The current
dual share structure gives rise to a potentially serious conflict of interest between the two
shareholder groups and poses a considerable barrier to meeting the objectives of the Company.
The reclassification to one class of Ordinary Shares will ensure that the Company can retain its co-
operative principles while focusing on a future strategy that optimises the outcomes for all
shareholders.
Yours faithfully
Northington Partners Limited

Greg Anderson
Director
+64 9 302-6211 | +64 27 457-6780
greg.anderson@northington.co.nz

18
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LIC
—
NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
SECTION A: THE PROPOSAL IN MORE DETAIL
The Proposal in more detail
Why does LIC need a single share structure?
History
In 2003, LIC Shareholders voted to move to two classes of
Shares – Co-operative Control Shares and Investment Shares.
The share structure change was driven by a number of reasons
at the time including:
• a desire to give Shareholders a greater share in the
Co-operative’s value;
• providing Shareholders choice over the degree of their
exposure to investment risk; and
• supporting a strategy of growth and giving LIC more
options to raise capital in the future.

These were all legitimate issues at the time but, 14 years on,
the circumstances and LIC have evolved.
In 2015 and 2016, an LIC roadshow canvassed Shareholders’
views about strategy and the longer term needs of LIC. In
particular, the different growth and earnings profiles, and
the capital requirements of key parts of the business were
discussed. The proposal was made to separate the company
into two – its core genetics and its agri-technology businesses.
That legal separation took place in December 2016, although it
has not been implemented structurally.
During the course of that roadshow, the Board received
considerable Shareholder feedback to the effect that the
interests of the co-operative and its farmers now and into
the future would be better served by a single class of Shares.
Increasingly, Shareholders are not purchasing Investment
Shares (around a third of Shareholders only hold Co-operative
Control Shares). These Shareholders are missing out on the
value created by the Company. Recent feedback has also
indicated that the current share structure is complex and not
well understood.
The Board considers the existing Share structure to be
unsustainable and that a move to a single class of Shares is the
best strategy for ensuring a strong farmer owned co-operative
with aligned incentives for all Shareholders. The Independent
Adviser’s Report also opined that “the current dual share
structure gives rise to a potentially serious conflict of interest
between the two [S]hareholder groups, and the reclassification
to one class of Ordinary Shares will ensure that [LIC] can retain
its co-operative principles while focusing on future strategy
that optimises the outcomes for all [S]hareholders”.
4

The key reasons why LIC is recommending the Proposal are
summarised below.
Protecting the Co-operative
The Proposal is intended to protect the co-operative principles
that are fundamental to LIC. Critically, LIC will remain owned
exclusively by New Zealand dairy farmer customers (except for
a limited shareholding by LIC employees, as is the case now)
5
,
and the minimum shareholding requirement will be based
on each Shareholder’s spend with LIC. At the same time,
Shareholders may continue to choose to invest more than the
minimum share requirement, just as they do now.
The new share structure will help future-proof the Co-operative
by allowing it to continue to look after its farmer Shareholders
through the core products and services it supplies, while also
earning sufficient returns to reinvest for the future.
4. See section 1.4 of the Independent Adviser’s Report.
5. The Proposal will preserve the existing right for LIC employees to hold Shares
through the employee share scheme. The total number held by all employees at
any time will be limited under the new Constitution to 5% of LIC’s Shares.

SHARE SIMPLIFICATION PROPOSAL
—
SINGLE SHARE STRUCTURE
|
19

SECTION A: THE PROPOSAL IN MORE DETAIL
Fairness
The Proposal is intended to remove the tension between
the two classes of Shares and create fairness in the share
structure. In broad terms, this tension is a bi-product of
the fact that the Co-operative Control Shareholders do not
benefit from capital appreciation or (in any material sense)
the profitability of LIC. At the same time, Co-operative Control
Shareholders control the voting rights, while the non-voting
Investment Shares carry all material economic rights to LIC’s
profits and surplus assets. This tension is particularly acute in
the context of the distinct growth and earnings profiles and
capital requirements of LIC’s two businesses – its core genetics
business and its agri-technology business.
In creating a single class of Shares, the Proposal allows every
Shareholder to:
• have a vote for each Share they hold which will count
towards all Shareholder decisions in the manner
provided in the New Constitution;
• share equally in all distributions and therefore in the
distributed value created through LIC’s products and
services; and
• share any capital gains as the value of the Ordinary
Shares rises among all Shareholders (acknowledging
that the Shares could go down in value). Currently, only
Investment Shareholders are able to realise any capital
appreciation on their Shares. Co-operative Control
Shares have a nominal value of $1 and are bought and
sold at that nominal value.

As a significant component of LIC’s earnings is derived from
the business it does with its Co-operative Control Shareholders,
the Board considers that, if LIC is successful in executing its
strategic initiatives and business plans, all Shareholders should
benefit from the associated dividends and appreciation in the
LIC Share price that is expected to result.
If the Proposal does not go ahead, the disparity between the
two classes of LIC Shares is expected to continue to widen
over time, with fewer Shareholders holding both Co-operative
Control and Investment Shares. What this means is LIC will be
required to balance the interests of those Shareholders who
vote on Shareholder matters, who generally want improved
products and services at an affordable price, with the interests
of those Shareholders expecting a strong financial return on
their investments. The Independent Adviser opined that, in its
view, “the status quo arrangements pose a serious impediment
to meeting the objectives of the business”.
6

6. See section 4.1 of the Independent Adviser’s Report.

20
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LIC
—
NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
Capital Flexibility
While there is currently no intention to raise capital from
a third-party investor for either LIC or LIC Agritechnology
Company Limited, if LIC is required to do so in the future,
its ability to raise capital is significantly constrained by the
existing share structure. We think it is prudent to consider this
now as part of future-proofing the Co-operative.
The Proposal would provide LIC with capital flexibility to ensure
it can respond appropriately to any future funding needs and
help secure a financially sustainable future for LIC through a
stronger capital base without redemption risk, and without
requiring all Shareholders to contribute that capital.
If LIC wishes to introduce further equity funding from a third-
party investor for LIC or LIC Agritechnology Company Limited
in the future, it would seek Shareholder approval for it at that
time. However, LIC may acquire interests in other companies,
make further minority or majority investments, and form
joint ventures from time to time as it grows and diversifies
the business.
Supporting LIC’s Strategy
LIC’s purpose is empowering livestock farmers through the
delivery of superior genetics and technology. This purpose
reflects the two separate businesses within LIC – the core
genetics business and its agri-technology business.
These businesses have distinctly different growth and earnings
and risk and return profiles. They also have different capital
requirements. While nothing is currently proposed, it is
foreseeable that decisions may need to be made in the future
about capital allocation and focus, and that can only sensibly
occur with all Shareholders having one voice.
The Proposal will put in place a share structure which will better
support LIC’s strategy by ensuring that LIC Shareholders’ voice
is heard on both parts of business, without the conflicting
perspectives that arise from the two class Share structure.
Simplicity
The capital structure of any co-operative is complex and
LIC is particularly complex given the existence of the
Investment Shares.
While the Proposal in its own right has a number of elements
to it, the intention with the Proposal is to simplify the
administrative requirements for both LIC and its Shareholders.
There are a number of aspects to this:
• Having a single share structure will simplify the
administrative requirements for both LIC and its
Shareholders and it will eliminate the complexity of
having two classes of Shares with different rights.
• The Proposal seeks to minimise the steps which
Shareholders are required to take to meet the Share
Standard. This includes changes such as:
–basing the Share Standard on a three-year
average of Qualifying Expenditure instead of
an annual spend;
–a compliance window to allow Shareholders time to
acquire the necessary Ordinary Shares on-market,
with a mechanism whereby LIC will do this on behalf
of Shareholders if they fail to do so;
–introducing bands, to allow some flexibility in
customer purchases in any season without the
increased spend resulting in the Shareholder having
to purchase additional Shares to meet the Share
Standard; and
–allowing Shareholders to hold Shares in excess of the
Share Standard (except where they cease to spend
the Minimum Purchases Amount in any season or fail
to meet other Qualifying Customer criteria).

These changes are discussed in detail under the heading
Share
Standard on page 24.
SECTION A: THE PROPOSAL IN MORE DETAIL

SHARE SIMPLIFICATION PROPOSAL
—
SINGLE SHARE STRUCTURE
|
21

What does the Proposal involve?
Reclassification to a Single Class of Shares

The Concept
Under the Proposal, all Shares in LIC will be reclassified into a
single class of Shares – Ordinary Shares.
The Reclassification is complex given the need to balance
Shareholders’ interests in the context of the different voting
and economic rights of the two classes of Shares and the
different values of such Shares.

Core Principles
The core principles of the Proposal are as follows:
• to align the relative values between the Co-operative
Control Shares and the Investment Shares before they
are reclassified into Ordinary Shares.
• to maintain the relative proportions between the
classes of Shares (by number) – meaning that the
Reclassification will take place on a 1:1 basis (Share
Ownership Ratio).

These core principles are discussed in more detail below.

Aligning Relative Values
To ensure that the Proposal is fair to all Shareholders, it must be
done in a way that reflects the relative rights and also the value
of each class of Shares. The Co-operative Control Shares and
Investment Shares have different values. Co-operative Control
Shares have a nominal value of $1 each. Investment Shares are
traded on the NZAX, with a price that fluctuates.
The Board has determined its view of the relative values of the
Co-operative Control Shares and the Investment Shares after
taking external financial and valuation advice on the relative
values of the Co-operative Control Shares and the Investment
Shares. The Board has attributed a value of $4 to each
Investment Share for the purposes of the Proposal.

Maintaining the Share Ownership Ratio
The total number of LIC Shares on issue as at the date
of this document is approximately 35.8 million, comprising
approximately 6.3 million Co-operative Control Shares and
approximately 29.5 million Investment Shares. Co-operative
Control Shares therefore currently make up 18% of the total
number of Shares on issue and Investment Shares make up 82%
of the total number of Shares on issue. The Share Ownership
Ratio is therefore currently 18:82, although this will change
when Co-operative Control Shares are issued and redeemed
as part of the 2018 Annual Update. LIC does not expect
a material change to the number of Co-operative Control
Shares at the 2018 Annual Update but it could vary by several
percent. The Share Ownership Ratio used for the purposes of
Implementation will be determined by the actual ratio of Co-
operative Control Shares to Investment Shares at that point in
time.
The Board considers that the Share Ownership Ratio reflects
a fair allocation of the Ordinary Share capital between the
two classes of Shares. This is particularly so given that
Co-operative Control Shares currently hold substantively all
of the voting rights. To preserve the Share Ownership Ratio,
Co-operative Control Shareholders will be required to subscribe
for three additional Shares for each Co-operative Control
Share they hold as shown in the table on the following page.
If we consider the ratio based on the pre-2018 Annual Update
Share numbers, on Implementation, the holders of the Co-
operative Control Shares will together hold 18% of the total
voting rights and will be entitled to 18% of the total dividend.
Therefore, the holders of the Investment Shares will together
hold 82% of the total voting rights and will be entitled to 82%
of the total dividend. These percentages will, of course,
change to reflect the actual Ownership Ratio based on the
post-2018 Annual Update Share numbers, as explained above.
SECTION A: THE PROPOSAL IN MORE DETAIL

22
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LIC
—
NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
18%
of shares by
number
25.2m Ordinary Shares
$
1
NIL PAID
ORD
SHARE
$
1
NIL PAID
ORD
SHARE
$
1
NIL PAID
ORD
SHARE
$
1
$
1
$
1
INV.
SHARE
INV.
SHARE
$
1
$
1
INV.
SHARE
INV.
SHARE
Co-operative Control SharesInvestment Shares
Current Position
7
$
1
6.3m x
18%
CO
-
OP
SHARE
of shares by
number
$
4
29.5m x
82%
INV.
SHARE
of shares by
number
Step 1A
8
– Aligning Value of
each Class
Subdivide each Investment Share
into 4. Align the value of the
Investment Shares and
Co-operative Control Shares
$
1
$
1
INV.
SHARE
INV.
SHARE
$
1
$
1
INV.
SHARE
INV.
SHARE
$
4
INV.
SHARE
Step 1B – Restoring the
Share Ownership Ratio
Increase the number of
Co-operative Control Shares by
raising the Share Standard and
issuing 3 nil paid Co-operative
Control Shares for each current
Co-operative Control Share
$
1
CO
-
OP
SHARE
$
1
FULLY PAID
CO
-
OP

SHARE
1X
NIL PAID
CO
-
OP
SHARE
1X
NIL PAID
CO
-
OP
SHARE
1X
NIL PAID
CO
-
OP
SHARE
Step 2 – Reclassifying
all Shares
Reclassify each Co-operative
Control Share (including nil paid
Co-operative Control Shares)
and Investment Share into an
Ordinary Share
Post Implementation
Position
10
82%
of shares by
number
118m Ordinary Shares
$
1
ORDINARY
SHARE
$
1
ORDINARY
SHARE
$
1
ORDINARY
SHARE
$
1
ORDINARY
SHARE
Co-operative Control SharesOrdinary Shares
$
1
$
1
FULLY PAID
CO
-
OP
SHARE
ORDINARY
SHARE
1X
NIL PAID
CO
-
OP
SHARE
1X
NIL PAID
ORD
SHARE
1X
NIL PAID
CO
-
OP
SHARE
1X
NIL PAID
ORD
SHARE
1X
NIL PAID
CO
-
OP
SHARE
1X
NIL PAID
ORD
SHARE
Investment SharesOrdinary Shares
$
1
ORDINARY
SHARE
$
1
ORDINARY
SHARE
$
1
ORDINARY
SHARE
$
1
ORDINARY
SHARE
SECTION A: THE PROPOSAL IN MORE DETAIL
7. The number of Shares and the ratio between Share classes will be determined following the 2018 Annual Update by reference to the number of Shares and the ratio of Co-
operative Control Shares to Investment Shares at that point in time.
8. As shown in the Implementation Timetable, Step 1A and Step 1B take effect simultaneously.
9. Without adjustment, Co-operative Control Shares would, as a result of the subdivision, have only approximately 5% of the Ordinary Shares – representing approximately 5%
of voting rights.
10. See note 7.
ORDINARY
SHARE

SHARE SIMPLIFICATION PROPOSAL
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SINGLE SHARE STRUCTURE
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23

Nil Paid Shares
The nil paid Co-operative Control Shares will be issued as
part of Step 1B following the 2018 Annual Update and will
immediately be Reclassified as nil paid Ordinary Shares
(Nil Paid Shares). The Board has determined those Shares
(following Reclassification) will have the following features:
• The Shares will be issued nil paid but with a liability
outstanding on each Share of $1.
• The liability on the Nil Paid Shares will be called and paid
over time from dividends declared and paid by LIC on
Ordinary Shares held from time to time to meet the Share
Standard (and such additional amounts as a Shareholder
wishes to apply towards the outstanding liability). This
additional investment required to pay up such Shares will
bridge the value gap between the Co-operative Control
Shares and Investment Shares.
• Each Nil Paid Share will carry full voting rights and the
right to a full dividend.
• Each Nil Paid Share will count towards meeting the
Share Standard.
• If a Shareholder wishes to transfer an Ordinary Share
that is not fully paid, they will need to pay it up fully
before the transfer
11
. A Nil Paid Share may not be traded
on the NZAX platform until it is paid up in full.
Shareholders should note that in the unlikely event that LIC
fell into such significant financial difficulties that it was placed
into liquidation, the liquidator would be entitled to call up
the unpaid balance of any Nil Paid Shares existing at that
time. Similarly, the unpaid balance will have to be paid if the
Shareholder leaves LIC, at which time that Shareholder will
be required to sell their Ordinary Shares. The unpaid balance
of any Nil Paid Share will not be affected by any changes in
the trading price of Ordinary Shares (i.e. Shareholders may
need to pay more than the trading price when they exit the
Co-operative).
Shareholders should recognise that these risks need to be
considered in the context of market-based pricing (which may
be above or below the Nil Paid Share issue price of $1), the
potential for capital appreciation, and the other aspects of the
Proposal as a whole.
NZAX Listing and Share Trading of Fully Paid Ordinary Shares
Fully Paid Ordinary Shares will trade on the NZAX platform, as
the Investment Shares currently do. The price of those Shares
will likely move up and down over time.
If a Shareholder is required to purchase more Ordinary Shares
to meet the Share Standard in the future, the Shares will
need to be sourced on-market at the then applicable market
price or off-market from another Shareholder. Similarly, if a
Shareholder ceases to be a customer of LIC, that customer’s
Shares will need to be sold on or off-market. Shareholders will
be entitled to sell, at any time, any Ordinary Shares they hold
over and above what is needed to meet the Share Standard.
Shareholders will need to establish a relationship with a broker
if they need to purchase or sell Ordinary Shares on-market.
Just as is the case currently for trading in the Investment
Shares, a broker engaged to buy or sell Shares on behalf of a
Shareholder will charge that Shareholder a brokerage fee for
this service.
LIC will have the discretion to issue Ordinary Shares from time
to time should it decide it needs to do so. This discretion may,
by way of example, be exercised if there is a material demand
and supply imbalance adversely affecting Shareholders or if
LIC wishes to raise capital from Shareholders more generally.
The Proposal does not give LIC the right to issue Shares to any
person other than a current customer or participant in one of
the Company’s share schemes.
Under the Proposal:
• LIC will have the right to compulsorily purchase,
or procure the purchase of, Shares on behalf of a
Shareholder who has not shared up to meet their Share
Standard obligation by 15 October in any year (this is
the Compliance Date, which is three months after 15
July – the target date by which LIC typically notifies
Shareholders of how many Shares they need to purchase
to meet the Share Standard). In certain circumstances,
LIC may not be able to notify Shareholders by 15 July but
will do so as soon as practicable thereafter.
• The period for those Shareholders, who have ceased to
be customers meeting the Minimum Purchases Amount,
to sell their Shares will reduce from 24 months to around
16 and a half months, to align with the same 15 October
date. LIC can compulsorily sell those Shares on behalf of
the relevant Shareholder should the Shareholder fail to
sell them by that date.
SECTION A: THE PROPOSAL IN MORE DETAIL
11. The Board reserves the right to approve the transfer of Nil Paid Shares before
they have been paid up in full, which it expects to exercise in exceptional
circumstances only.

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NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
• The dates have been aligned to assist any compulsory
transaction process as it is LIC’s intention (but not
its obligation) to net the compulsory buys and sells
off against each other and then seek to transact the
outstanding balance (which could be a buy or sell)
through the market. On occasion, LIC may choose to
reduce any outstanding balance by issuing, buying or
selling Shares for its own account as required.
There will be no defined period for the process to be completed
but ultimately all the compulsory buys and sells will be
transacted at the same volume weighted-average price as was
achieved in the market. Shareholders should be aware that if
there is a large number of Shares to buy or sell this may take
some time to complete and it may also have an effect on the
LIC Share price during this period, despite any efforts that LIC
may make to minimise this.
Where LIC is required to instruct a broker to buy Shares on
behalf of a Shareholder, this will be done in substantively
the same manner as is currently undertaken for the Dividend
Reinvestment Plan and Voluntary Investment Scheme operated
by LIC. LIC will in effect calculate the required number of
Shares and then instruct a broker, currently Craigs Investment
Partners (Craigs), to acquire those Shares on-market as and
when appropriate. The length of time that Craigs is in the
market buying Shares will depend on the number of Shares to
be acquired and the number of Shares being offered into
the market by or on behalf of selling Shareholders at the
relevant time.
From an implementation perspective, while Craigs is in the
market acquiring the Shares and until all necessary Shares
are purchased, any purchased Shares will be held on trust by
an Approved Holding Entity (currently, NZ Guardian Trust).
Once all necessary Shares are purchased, the Shares will
be transferred from the trust entity to the new owners (i.e.
Shareholders). The Share price paid by the new owners will be
set by reference to the average price achieved on all Shares
purchased, being the volume weighted average price.
The key difference from the existing Share purchasing schemes
going forward will be that there will likely be more Shares
available for sale at any given time. This will be due to the
Ordinary Shares not being redeemable (unlike the existing Co-
operative Control Shares) and the Shareholders remaining free
to sell any Shares they hold in excess of the Share Standard.
The Proposal also aligns the window for selling and buying
Shares to promote availability of Shares on the market during
the period of high demand.
Market Share Price and Dividend Distribution
As part of the Proposal, all fully paid Shares will be listed on
NZAX, providing market pricing.
Reflecting its strong linkage to the financial health of the dairy
sector and the agricultural sector more generally and other
risks set out in Schedule 3, LIC’s earnings, and therefore its
dividends, can display significant volatility. For example, LIC
paid a dividend of 6.4365 cents in 2017, paid no dividend in
2016, and paid its highest ever dividend of 54.9142 cents
in 2013.
Unsurprisingly, given the dividend history, the Investment
Share price has also exhibited similar volatility. For example,
in the past 12 months, the Investment Share price has
fluctuated between $2.10 and $2.65, but was as high as
$8.00 in May 2014.
Share Standard
The following changes are proposed to be made to the Share
Standard under the Proposal:
• The Share Standard is being increased by a factor
of four.
• The Minimum Purchases Amount before the Share
Standard applies is being increased to $1,000 (although
existing Shareholders whose spend is between $500
and $999 will be unaffected until they exceed $1,000,
at which point they will become bound by a Minimum
Purchases Amount of $1,000).
• The Share Standard will be based on a three-year
average of Qualifying Expenditure rather than the
previous year’s expenditure, as is currently the case.
• Shareholders will not be required to sell down Shares
held in excess of the Share Standard.
• Shareholders whose Qualifying Expenditure in the most
recent year is above, but whose three-year average is
below, the Minimum Purchases Amount, will be allowed
(but not obligated) to buy Shares.
• A compliance window is being introduced to allow
Shareholders required to share up time to acquire
the necessary Ordinary Shares on-market. If any
Shareholder fails to do so, LIC will do this on behalf of
that Shareholder by acquiring the relevant Shares in the
manner described on the previous page and charging
their LIC debtor accounts with LIC the purchase price
and any associated costs, or alternatively issuing new
Shares to the Shareholder.
• The Share Standard will apply subject to bands, to
allow some flexibility in customer purchases in any
season without the purchase resulting in the Shareholder
having to purchase additional Shares to meet the
Share Standard.
SECTION A: THE PROPOSAL IN MORE DETAIL

SHARE SIMPLIFICATION PROPOSAL
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SINGLE SHARE STRUCTURE
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25

These changes are described in more detail below.
Increased Share Standard
The Share Standard is being increased so that it captures the
share capital currently represented by Co-operative Control
Shares plus the additional capital which the Proposal requires
Co-operative Control Shareholders to pay up on their Nil Paid
Shares over time. This additional capital is the capital that will
be paid up from future LIC dividends.
To give customers ongoing certainty around the number of
Ordinary Shares they must hold for a given level of Qualifying
Expenditure, the Share Standard will be expressed in terms of
the dollar value of goods and services to which ownership of
an Ordinary Share (as opposed to amount paid on that
Share as is currently the case) entitles the Shareholder.
As a result of the increase in the Share Standard and this
change, the Share Standard will change from One
Co-operative Control Share (with a nominal value of $1) for
each $25 of Qualifying Expenditure to one Share for every
$6.25 of Qualifying Expenditure.
For example, a Shareholder with a Qualifying Expenditure
of $10,000 is currently required to hold $400 worth of
Co-operative Control Shares, being 400 Shares. From
Implementation, a Shareholder with a Qualifying Expenditure
of $10,000 will now be required to hold 1,600 Ordinary
Shares. While this is higher than the existing Share Standard,
the Proposal will not, on Implementation, require current
Shareholders to invest any additional capital. The reason for
this is that Nil Paid Shares issued as part of the Proposal will be
considered to satisfy the Share Standard
12
.
New customers and Shareholders increasing their Qualifying
Expenditure in the 2017/2018 season will need to share up
based on the current Share Standard before the new Share
Standard comes into effect. See the
Implementation Timetable
for the Proposal section on page 9 of this document for
more details.
Any Investment Shares which are reclassified into Ordinary
Shares as part of the Proposal may also be used to meet the
Share Standard.
Minimum Purchases Amount
As part of the Proposal, the Minimum Purchases Amount will
be increased from $500 to $1,000. The existing Minimum
Purchases Amount threshold has been in place since 2002 and
the Board believes it is appropriate to increase it given the
costs and administration requirements associated with holding
such a small parcel of Shares.
Existing customers of LIC who currently do not meet the
proposed higher Minimum Purchases Amount will be unaffected
by the increase in the Minimum Purchases Amount threshold.
This means any Shareholders whose Qualifying Expenditure is
currently between $500 and $999 will be exempt from having
to comply with the new Minimum Purchases Amount standard
in order to hold their existing Ordinary Shares, provided they
continue to meet the existing $500 Minimum Purchases Amount
threshold. Once their Qualifying Expenditure exceeds $1,000,
they will be bound to a $1,000 Minimum Purchases Amount.
A new customer may apply to become a Shareholder once they
exceed the Minimum Purchases Amount in any season.
Move to a Three-Year Average
Under the Proposal, the Share Standard will be based on a
three-year average of Qualifying Expenditure rather than
exclusively on the previous year’s Qualifying Expenditure as is
currently the case. The three-year average will be relevant in
relation to the obligation to meet the Share Standard for any
season commencing from the 2017/2018 season. This removes
any immediate obligation for a Shareholder to trade at, or soon
after, launch of the new arrangements.
For new farmers joining LIC, or Shareholders increasing their
Qualifying Expenditure, it will take up to three years for the
Share Standard to fully reflect the spend, thereby allowing
the Shareholder to spread their Share purchases over that
same period.
Shareholders will not be Required to Sell Down Shares Held in
Excess of the Share Standard
From Implementation, Shareholders will not be required to sell
Shares held in excess of the Share Standard but may sell those
surplus Shares on or off market if they wish (except for Nil Paid
Shares which must first be paid in full).
SECTION A: THE PROPOSAL IN MORE DETAIL
12. Existing Shareholders may still be required to share up to the current Share
Standard by reference to their Qualifying Expenditure in the 2017/2018 season.
This sharing up process will be undertaken before the new share standard
comes into effect and Nil Paid shares are issued.

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NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
Introducing Bands
To avoid the need for Shareholders to purchase a small number
of Shares to reach the new Share Standard each year in
circumstances where there is a small change in the customer’s
Qualifying Expenditure, the Proposal introduces bands.
Qualifying Expenditure will be measured in uniform $5,000
bands
13
, meaning Shareholders will not need to adjust their
Shareholdings, unless there has been a material change in
their spending with LIC (i.e. unless the Shareholder passes
through the upper end of the relevant band).
For example, if a Shareholder’s spend changes from $5,000
in one year to $7,000 in the next year, the Shareholder will not
need to buy additional Shares. In this example, they will only
be required to buy further Shares if their spending increases to
$10,000 or more.
The primary advantage of banding is that it reduces the
number of purchases Shareholders have to make, and makes
it easier for the Shareholders to predict their required LIC
Shareholding each year.
Compliance Date
Under the Constitution, LIC is required every year to notify
Co-operative Control Shareholders by 15 July, or as soon as
reasonably practicable thereafter, how many Co-operative
Control Shares they are required to subscribe for, for them to
meet the Share Standard. Such Shares are subscribed for and
issued each year as part of the Annual Update. Compliance
is determined by reference to Qualifying Expenditure in the
preceding season ending 31 May.
Under the Proposal, Shareholders will continue to be
notified as soon as practicable after 15 July in any year
how many Ordinary Shares they need to hold and will have
until 15 October in that year to purchase such number of
Ordinary Shares to meet the Share Standard. This provides
Shareholders with a trading window to share up after
notification.
LIC may automatically “share up” on behalf of Shareholders
insofar as required to comply with the Share Standard, should
Shareholders fail to do so themselves. Refer to the information
on page 23 under the heading
NZAX Listing and Share Trading
of Fully Paid Ordinary Shares
for more information on this
process.
Shareholding and Voting Restrictions
• At present, the LIC Constitution includes two caps on
its shares. The first cap is a 5% ownership cap, which is
applicable to Investment Shares only. The second is a 1%
voting cap required by DIRA which applies to both
Co-operative Control Shares and Investment Shares.
• Under the Proposal, the 5% ownership cap would remain
and, if relevant, would override the requirement to hold
a greater number of Shares to meet the Share Standard.
Given current shareholding levels, the Proposal is not
expected to result in any Shareholder breaching this 5%
ownership cap.

LIC has engaged with the Minister of Agriculture to seek to
remove the 1% voting cap but the relevant amendment has
not yet passed through the legislative processes. It is not
clear if or when this requirement will be removed from the law.
If adopted, the New Constitution will see the 1% voting cap fall
away if and when the law is changed.
Changes to LIC’s Constitution
The Proposal will result in a substantial number of changes to
LIC’s Constitution. In broad terms, most of the changes are
consequential – that is, they reflect the key elements of the
Proposal described above and elsewhere in this document.
In addition to these consequential changes, changes have also
been made to increase the flexibility of the Board’s decision-
making ability with respect to changes to the Share Standard,
Minimum Purchases Amount and Qualifying Products and
Services. The changes are described in more detail on page 45
of this document. The Board has looked at other co-operatives
and the proposed changes broadly replicate the flexibility that
these other companies have in their own constitutions.
The proposed amendments to the Constitution would also give
LIC the necessary flexibility to migrate from NZAX onto the
NZX Main Board in the future, if required. The NZX is currently
consulting on some proposed changes to its licensed markets,
which would consolidate its existing key equity markets into a
single market.
Ministerial consent is required for these changes to proceed.

SECTION A: THE PROPOSAL IN MORE DETAIL
13. Other than the initial $1,000 to $4,999 band.

SHARE SIMPLIFICATION PROPOSAL
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SINGLE SHARE STRUCTURE
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27

Dividends
The Proposal contemplates that dividends will be paid equally
on all Shares after Implementation (regardless of whether or
not the Shares are fully paid up). Dividends will be determined
by the Board applying normal commercial principles.
LIC will make dividend payments to Shareholders based on
LIC’s profitability and balance sheet position at the time of
the proposed dividend, having regard to the future investment
plans of LIC.
On implementation of the Proposal, each Co-operative
Control Share will be reclassified into one fully paid Ordinary
Share, and each nil paid Co-operative Control Share will be
reclassified into a nil paid Ordinary Share. Any dividends paid
on Nil Paid Shares and on any Ordinary Shares required to be
held to satisfy the Share Standard will be applied to repay the
outstanding commitments on Nil Paid Shares. Shares will be
paid up incrementally (so that the amount due on account of
any dividend is used to fully pay up such number of Shares as
can be paid up) as opposed to the dividend being applied pro
rata to all outstanding Nil Paid Shares.
Customers can apply dividends on any additional Ordinary
Shares they own to pay up the Nil Paid Shares. They can also
make additional payments if they wish to pay up the Nil Paid
Shares sooner. Shareholders will need to give notice to LIC in
writing if they wish to exercise these rights.
For example, consider a Shareholder who is required to hold
1,000 Ordinary Shares under the Share Standard but in fact
holds 1,200 Ordinary Shares. Of those Ordinary Shares, 600
Shares are Nil Paid Shares, with the full $600 outstanding.
If in a particular year LIC declared a dividend which, net of
imputation credits and resident withholding tax, is equal
to $0.20 per Share, the Shareholder would be entitled to a
net dividend of $240 in total. The dividend attributable to
the 1,000 Shares held to satisfy the Share Standard ($200),
must be used to pay for the outstanding amount on the Nil
Paid Shares. This dividend would be used to pay up and fully
discharge the liability on 200 Nil Paid Shares leaving 400
unpaid. The residual $40 dividend could be retained by the
Shareholder or used to pay up a further 40 Nil Paid Shares.
How will the Proposal be Implemented?
Implementation of the Proposal, if approved by Shareholders,
will take place in July 2018 as part of the 2018 Annual Update
(except for Resolution 2(a) which will come into effect
immediately). In summary:
• Co-operative Control Shareholders will be subject to
the normal annual adjustments to their shareholdings,
by reference to Qualifying Expenditure in the 2017/2018
season and the current Share Update.
• The Proposal will be implemented immediately after the
conclusion of the 2018 Annual Update. The detailed
Implementation steps are set out on page 22.
• Investment Shares will continue to trade on the
NZAX platform until a date shortly before the 2018
Annual Update.
Details of the exact timing of the Implementation are set out in
the Implementation Timetable for the Proposal on page 9. Any
changes to the Implementation Timetable will be Announced to
the Shareholders.
Governance of LIC and Representation of Farmers
The Proposal does not involve any change to the governance
structure of LIC or the representation of farmers by the
Shareholder Council, except that, from Implementation,
all Shares will carry the right to vote.

Board of Directors
Board will consist of no more than ten Directors, comprised of:
• up to seven elected Directors who are Qualifying
Customers elected by the Ordinary Shareholders within
the region each Director represents (four regions in
total); and
• up to a further three appointed Directors. Appointed
Directors are independent and subject to the prior
approval of the Shareholder Council and ratification by
Ordinary Shareholders.
Elected Directors serve a four-year term and appointed
Directors up to a three-year term. Retiring Directors are eligible
for re-election or re-appointment.
Shareholder Council
The Shareholder Council will consist of up to twenty-one
Councillors. Each of the twenty-one wards will be represented
by one Councillor who is elected by the Ordinary Shareholders
of that ward.
Councillors serve a four-year term. Councillors retire
subject to the rotation schedule and upon retiring are eligible
for re-election.
SECTION A: THE PROPOSAL IN MORE DETAIL

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NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
Qualifying Expenditure
The Proposal includes flexibility for the Board to change
the Qualifying Products and Services from time to time in
consultation with the Shareholder Council, and to allow
Subsidiaries (eg LIC Agritechnology Company Limited)
to supply Qualifying Products and Services directly to
Shareholders but have the associated expenditure classed
as Qualifying Expenditure. Those products and services
supplied by the Company or any Subsidiary that are
identified by the Company in its Conditions and Service Rules
as “Qualifying Products and Services” will count towards
Qualifying Expenditure.
Taxation Implications for NZ Resident Shareholders
Tax ruling
LIC has obtained a binding ruling from Inland Revenue
concerning the Proposal. Inland Revenue has ruled that:
• the issue of Nil Paid Shares as part of the Proposal,
and the Reclassification of Co-operative Control and
Investment Shares into Ordinary Shares, will not give rise
to a dividend to Shareholders; and
• any revenue account Shareholders will not be
treated as deriving income as a consequence of the
Reclassification.
Tax on sale or disposal of Ordinary Shares
Following the Reclassification, unlike the current Co-operative
Control Shares which have a nominal value, the value of
the new, single class of Ordinary Shares will fluctuate. The
tax treatment in respect of the Ordinary Shareholders will
be the same as the existing treatment of the Investment
Shares. Shareholders will not be subject to tax on any gain (or
allowed to deduct any loss) arising from the sale or disposal
of additional Ordinary Shares acquired on the NZAX after the
restructuring unless a Shareholder:
• acquires the Shares as part of a profit-making
undertaking or scheme; or
• acquires the Shares with the dominant purpose of
selling them.

Shareholders will also not be subject to tax on any gain
(or allowed to deduct any loss) arising from the sale or
disposal of Ordinary Shares received as part of the Proposal
in replacement for Investment Shares held prior to the
Reclassification (i.e. Investment Shares that are Reclassified as
Ordinary Shares as part of the Proposal) unless:
• acquired as part of a profit-making undertaking or
scheme; or
• acquired with the dominant purpose of selling them.
In addition, Shareholders will be subject to tax on any gain (or
allowed to deduct any loss) arising from the sale or disposal
of any Ordinary Shares if the relevant Shareholder is in the
business of dealing in shares.
Distributions received from LIC on Ordinary Shares
Distributions received from LIC on Ordinary Shares will
generally be taxable dividends for New Zealand tax purposes.
Some distributions received from LIC may not be taxable
dividends (for example, non-taxable bonus issues and certain
returns of capital).
New Zealand operates an imputation regime under which
any income tax paid by LIC gives rise to credits, known as
imputation credits, which may be attached to dividends
it pays. Imputation credits attached to dividends may be
used by Shareholders to offset their tax liability in respect of
the dividends. The maximum ratio at which LIC can attach
imputation credits to dividends is 28:72 (that is, $28 of
imputation credits to $72 of cash dividend).
LIC will generally be required to deduct resident withholding tax
(RWT) from dividends it pays to Shareholders. Currently, the
rate of RWT on dividends is 33%, less the amount of imputation
credits attached to the dividend. Accordingly, where
imputation credits are attached to dividends at the maximum
permitted ratio (that is, the dividends are fully imputed), RWT
equal to 5% of the gross dividend (that is, cash plus imputation
credits) will be deducted. Where dividends are partially
imputed, the amount of RWT deducted will be greater than 5%
of the gross dividend. Shareholders will be entitled to a credit
against New Zealand income tax liability for the amount of RWT
deducted. LIC will not deduct RWT from dividends received
if a Shareholder holds a current RWT exemption certificate
and have provided a copy of that certificate to LIC before the
dividend is paid.
The tax treatment of dividends described above will apply
equally to dividends that must be used to pay up a call on
unpaid Shares received as part of the Reclassification.
Such dividends will, like other dividends, be included in a
Shareholder’s assessable income, with a credit allowed for
attached imputation credits and RWT deducted. The cash
dividend, net of imputation credits and RWT, will be applied in
satisfaction of the call.
SECTION A: THE PROPOSAL IN MORE DETAIL

SHARE SIMPLIFICATION PROPOSAL
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SINGLE SHARE STRUCTURE
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Overview of the Structure Post Reclassification
CONSIDERATIONCHANGE?FURTHER DETAILS
Share
Standard
Share Standard quantified Ye sPre Reclassification: $1 of Share capital for
each $25 of Qualifying Expenditure.
Post Reclassification: 1 Ordinary Share for
each $6.25 of Qualifying Expenditure.
Note:
• Shareholders will have three years to
share up;
• On Implementation (and following the
2018 Annual Update to reflect any
increased spend during the 2017/2018
season), all Shareholders will satisfy the
new Share Standard;
• Ordinary Shares Reclassified from
Investment Shares will also count for the
purposes of the Share Standard.
Qualifying ExpenditureYe sQualifying Expenditure will be measured in
uniform $5,000 bands
14
rather than a specific
amount of expenditure.
Time period on which the Share Standard is
based
Ye sMove to three-year average as opposed to
just the prior year.
Compliance Date for meeting the Share
Standard
Ye sPre Reclassification: 15 July
Post Reclassification: 15 October
Consequence of a Shareholder not sharing
up by the Compliance Date
Yes The Shareholder will have until the
Compliance Date to share up after notification
of the number of Shares they need to acquire
to meet the Share Standard.
If the Shareholder does not hold the required
number of Shares by the Compliance Date,
LIC will seek to acquire the shortfall on behalf
of the Shareholder but retains the right to
instead issue new Shares to the Shareholder.
SECTION A: THE PROPOSAL IN MORE DETAIL
14. Except for the initial band between $1,000 and $4,999.

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NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
Overview of the Structure Post Reclassification
CONSIDERATIONCHANGE?FURTHER DETAILS
Share
Ownership
Minimum Purchases Amount to be entitled to
become a Shareholder
Ye sThe Minimum Purchases Amount threshold
will increase from $500 to $1,000, although
existing Shareholders will be unaffected, as
explained on page 25.
Date from which new customers can buy
their Shares
Ye sAs soon as the customer passes the Minimum
Purchases Amount threshold, they can apply
to be a Shareholder and can buy Shares,
provided they meet all other Shareholder
requirements (which are not changing).
Period for exiting customers to sell their
Shares
Ye sShareholders will not be required to sell
their Shares unless they cease to spend
the Minimum Purchases Amount (except for
existing Shareholders below that threshold
who will be unaffected) or are no longer a
supplier to a New Zealand milk processor.
Exiting Shareholders will be given until 15
October in the second year after the end of
the relevant season (i.e. approximately 16
and a half months after the end of the season
in which they did not spend the Minimum
Purchases Amount) to sell their Shares.
Consequence of an exiting Shareholder not
selling their Shares within the required period
NoLIC will be entitled to sell the Shares
on-market on the Shareholder’s behalf.
LIC retains the rights to buy back such
Shares instead.
Share
Trading
Shares will be listed on NZAX Ye sPreviously, only the Investment Shares
were listed. The new Ordinary Shares will be
listed instead.
Sourcing of Shares Ye sShare purchases will be sourced from the
market or from a Shareholder looking to sell
its Ordinary Shares at the prevailing market
price. LIC reserves the right to issue new
Ordinary Shares.
DividendDividend entitlementYe sAll Shares will have an equal dividend
entitlement.
100% of dividends received on Nil Paid Shares
and any Ordinary Shares held to meet the
Share Standard must be applied in paying up
outstanding obligations on Nil Paid Shares.
Voting /
Ownership
restrictions
Voting restrictionsYe sRetain 1% cap only while the relevant
provisions of DIRA remain in force. If the
restriction is removed from DIRA in the future,
the 1% voting restriction will no longer apply to
LIC Shareholders but they will still be subject
to the ownership restriction described below.
Ownership restrictionsNoRetain 5% cap but this is applied across all
Relevant Interests.
SECTION A: THE PROPOSAL IN MORE DETAIL

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SECTION B:

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NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
Notice of Special Meeting
SECTION B: NOTICE OF MEETING
Notice is given that a special meeting of the
Shareholders of Livestock Improvement Corporation
Limited will be held at LIC’s Tempero Centre, Cnr.
Ruakura and Morrinsville Roads, Newstead, Hamilton
on Wednesday 14 March 2018 commencing at 10.30 am,
with registration from 9.30 am.
Resolutions
Resolution 1:
To increase the Share Standard, issue new nil paid
Co-operative Control Shares and subdivide the
Investment Shares
As an ordinary resolution to be passed by eligible
holders of Co-operative Control Shares:
“That, the Co-operative Control Shareholders confirm
and approve in each case:
a. that the Co-operative Control Shareholding
Requirement be increased by a factor of four for
the purposes of implementing the Proposal;
b. that the Company issue to Co-operative Control
Shareholders such number of Co-operative
Control Shares as required to meet the
new Co-operative Control Shareholding
Requirement, on a nil paid basis; and
c. that each Investment Share be subdivided into
four Investment Shares,
each in accordance with the Implementation
Timetable, and subject to the passing of Resolution 2,
and the approval by the Minister of Agriculture of the
proposed changes to the existing Constitution.”
Resolution 2:
To amend the existing Constitution, reclassify Shares
as Ordinary Shares and adopt New Constitution
As a special resolution to be passed by separate
interest groups comprising the eligible holders of
Co-operative Control Shares and eligible holders of
Investment Shares:
“That, the Shareholders confirm and approve in
each case:
a. that the existing Constitution be amended by
adding a new clause 3.12 reading as follows:

the Company may alter the rights attaching to
Shares provided that it has been approved by
a special resolution of each interest group in
accordance with section 117 of the Companies
Act, and it does not matter whether or not the
special resolution was passed before or after
this provision came into effect;
b. the Reclassification of each Co-operative
Control Share into an Ordinary Share;
c. the Reclassification of each Investment Share
into an Ordinary Share; and
d. the revocation of the existing Constitution of
the Company (as amended from time to time)
and the adoption of a new Constitution by the
Company in the form tabled at the meeting and
signed by the Chairperson for the purpose of
identification,
each in accordance with the Implementation
Timetable, and subject to the passing of Resolution 1,
and the approval by the Minister of Agriculture of the
proposed changes to the existing Constitution.”
The business of the meeting will be to consider and, if
thought fit, to resolve the Resolutions set out below.
Resolutions 1 and 2 are inter-conditional, meaning that both
of them must be passed in order for either of them to be
effective. See Explanation of the Resolutions and Additional
Information on pages 36 to 39 for further information
about these Resolutions.

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SECTION B: NOTICE OF MEETING
Eligibility to Vote and Required Approvals
All Shareholders are entitled to attend the Special Meeting.
The below table sets out who is eligible to vote on the Resolutions, and what voting thresholds and conditions need to be met
for the Resolutions to be passed. If the Proposal is approved, it will be binding on all Shareholders, whether they voted for the
Resolution or not and all Shareholders will be deemed to have made an application in respect of the Reclassification.
RESOLUTION 1RESOLUTION 2
Type of resolution
and approval
threshold
Ordinary resolution to be passed by a majority
(50% plus one Share) of Co-operative Control
Shareholders entitled to vote and voting
Special resolution to be passed by:
• 75% of Co-operative Control
Shareholders entitled to vote and
voting; and
• 75% of Investment Shareholders entitled
to vote and voting
Who is entitled to
vote?
Co-operative Control Shareholders onlyCo-operative Control Shareholders and
Investment Shareholders
ConditionalityConditional on the approval of Resolution 2
Conditional on the approval by the Minister of
Agriculture of the proposed changes to the
existing Constitution
Conditional on the approval of Resolution 1
Conditional on the approval by the Minister
of Agriculture of the proposed changes to the
existing Constitution

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NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
How to cast a vote
Co-operative Control Shareholders and Investment
Shareholders have separate rights to vote. The matters in
respect of which each of them may vote are set out above,
and in the Voting Form.
Shareholders can vote in the following ways:
1. Attend the Special Meeting – bring your Voting Form to
the meeting as the barcode is required to assist with your
registration; or
2. Electronic voting – visit www.electionz.com/LIC2018 and
follow the prompts. You will require your PIN and Password
as shown on your Voting Form. Electronic voting will close
at 10.30 am on 12 March 2018; or
3. Postal voting – complete the Postal Vote section of the
Voting Form and return it in the reply paid envelope
provided to electionz.com Limited or address to
electionz.com Limited as per the details provided at
the bottom of this section. Your form must be received
before 10.30 am on 12 March 2018; or
4. Appoint a Director or Councillor of LIC, or another
person as your proxy – complete the proxy appointment
section on the Voting Form including how you wish them
to vote (as a directed vote) or as “Proxy’s Discretion” and
return in the reply paid envelope provided to electionz.com
Limited before 10.30 am on 12 March 2018. Your appointed
Director/Councillor/Representative will receive voting
papers upon registration at the meeting.

Each method of voting and the way to use the Voting Form
enclosed with this document are explained in detail below.
Please choose only one voting option.
Full details on how to return your Voting Form to electionz.com
Limited are available at the end of this section.
1. To attend and vote at the Special Meeting

You must register at the registration desk prior to entering
the meeting. Please bring your Voting Form with you, as
the barcode is required for your registration.

The registration and poll will be managed by
electionz.com.

Upon registration, if you have not already submitted an
electronic or postal vote, or appointed a proxy, you will
receive a separate voting card to mark your vote at the
time that each poll is put to the meeting by the Chairman.
Once the voting is completed, electionz.com Limited will
collect your voting cards from you.
2. To vote electronically

If you wish to cast your vote electronically:
a. Visit www.electionz.com/LIC2018
b. Enter your PIN and Password as shown on your
Voting Form.
c. Follow the prompts to complete your vote.
Electronic voting will close at 10.30 am on Monday 12
March 2018.
3. To cast a postal vote

If you wish to cast a postal vote, complete the Postal Vote
section on your Voting Form, indicate how you wish to
vote on each Resolution and return the form to electionz.
com Limited in any manner described at the bottom of
this section.
SECTION B: NOTICE OF MEETING

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4. To appoint a Director or Councillor of LIC, or another
person, to attend the meeting and vote on your behalf
as your proxy
If you wish to appoint a Director or Councillor of LIC or
any other person as your proxy, you need to complete the
proxy section on your Voting Form. A proxy need not be a
shareholder of LIC.
Please read the information on “Proxy Appointment”
on the reverse of your Voting Form carefully. In the
area provided, please insert the name of the Director,
Councillor or other person you wish to appoint. Use the
voting boxes to indicate how you wish your proxy to vote.
Alternatively indicate “Proxy Discretion”.
If you return the Proxy section of the Voting Form without
indicating how you wish your proxy to vote, your proxy will
vote, or abstain from voting, as he or she sees fit. If you
indicate on the Voting Form how you wish your proxy to
vote, your proxy will vote as directed.
Any Director or Councillor of LIC who is appointed as a
proxy and is given discretion as to how to vote will vote in
what he or she believes to be the best interest of LIC.
Please advise your proxy that he or she must register
at the registration desk prior to entering the meeting to
obtain the necessary voting papers.
The proxy appointment section of the Voting Form must
be completed, signed and received by electionz.com
Limited no later than 10.30 am on 12 March 2018.
If you are a postal voter or appointing a proxy, return
your Voting Form to electionz.com Limited in any of the
following ways:
• mail to electionz.com Limited in the reply paid
envelope provided; or
• address and mail to Livestock Improvement
Corporation Limited, PO Box 3138, Christchurch 8140;
or
• deliver to electionz.com Limited, 3/3 Pukaki Road,
Yaldhurst, Christchurch 8042; or
• fax to 03 377 1474 ; or
• scan and email to info@electionz.com (please put
the words “LIC Meeting” in the subject line for easy
identification).
Alternatively vote electronically as per the instruction
in the
To Vote Electronically on the previous page.
If you are not attending and voting at the Special
Meeting, your electronic vote must be cast or your
Voting Form must be received by electionz.com Limited
no later than 10.30 am on 12 March 2018 to be valid.
The Board has appointed Melanie Tonkin as the Returning
Officer. She has authorised electionz.com Limited to
receive, record and count all postal votes, electronic
votes and proxy votes.
If you have any questions regarding the voting, please
contact the Election Helpline on 0800 666 033.
All persons attending the Special Meeting must
register at the registration desk prior to entering the
meeting room.
Multiple herd owners are reminded that to fully exercise
their voting rights, they need to separately exercise the
votes for each participant code.
SECTION B: NOTICE OF MEETING

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NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
Explanation of the Resolutions and
Additional Information
Resolution 1: To increase the Share Standard,
issue new nil paid Co-operative Control Shares
and subdivide Investment Shares

Resolution 1 proposes that Shareholders confirm and approve:
• that the Co-operative Control Shareholding Requirement
be increased to an equivalent of 16% of Qualifying
Expenditure;
• the issue of such number of nil paid Co-operative Control
Shares as is required to ensure that Co-operative Control
Shareholders meet the new Share Standard; and
• the subdivision of each Investment Share into four
Investment Shares.
Constitution
The existing Constitution of the Company allows the Company
to change the Share Standard by Ordinary Resolution of
Shareholders. Currently, only the Co-operative Control
Shareholders have the right to vote on this Resolution.
15

The Constitution coupled with the Companies Act gives the
Board the power to issue Shares to Shareholders and to
subdivide the Company’s Shares, but notwithstanding this, we
are presenting this resolution to Shareholders as part of the
process for seeking overall approval for the Proposal.
In accordance with LIC’s Constitution, no person may exercise,
or control the exercise of, more than 1% of the maximum
number of votes that may be exercised at a meeting of LIC.
Companies Act
Section 105 of the Companies Act provides that an ordinary
resolution must be approved by a simple majority of the votes
of those Shareholders entitled to vote and voting on the
resolution. To approve Resolution 1, 50% plus one vote of the
Co-operative Control Shareholders entitled to vote and voting
on that Resolution must be cast in favour of the Resolution.
Resolution 2: To amend the Constitution,
reclassify Shares as Ordinary Shares and adopt
the New Constitution

Resolution 2 proposes that Shareholders confirm and approve:
• a new provision be included in the Constitution
permitting the alteration of rights attaching to Shares
with the approval of a special resolution of each
interest group;
• alteration of the rights attaching to the Shares by
reclassifying the Co-operative Control Shares and
Investment Shares into Ordinary Shares; and
• revocation of the existing Constitution and adoption of
the New Constitution.
Constitution
The proposed changes to the Constitution have been
approved by NZX. A summary of the proposed changes to the
Constitution is set out at page 45.
A copy of the existing Constitution, a clean copy of the
proposed New Constitution and a marked copy showing all
changes made to the existing Constitution by the proposed
New Constitution may be viewed on the Company’s website:
www.lic.co.nz/vote. The Listing Rules may be viewed on the
NZX website: www.nzx.com.
In accordance with LIC’s Constitution, no person may exercise,
or control the exercise of, more than 1% of the maximum
number of votes that may be exercised at a meeting of LIC.
The changes to the Constitution are subject to
Ministerial consent.
Companies Act
Under the Companies Act, LIC must not take any action which
affects the rights attached to Shares, unless that action has
been approved by a special resolution of each interest group
of LIC. For the purposes of section 117 of the Companies Act,
the rights attached to Shares include voting rights and rights
to distributions. Therefore, both the proposed Reclassification
of the Shares and the adoption of the New Constitution, will
require approval by each interest group.
There are two interest groups in LIC for the purposes of section
116 of the Companies Act:
• Co-operative Control Shareholders; and
• Investment Shareholders.
To approve Resolution 2, at least 75% of the votes of
Shareholders in each interest group entitled to vote and voting
on that Resolution must be cast in favour of the Resolution.
SECTION B: EXPLANATION OF THE RESOLUTIONS AND ADDITIONAL INFORMATION
15. The Investment Shareholders are entitled to vote on resolutions where the
proposed resolution directly affects any rights or privileges attached to the
Investment Shares. The Board is of the view that the proposed subdivision of the
Investment Shares will not affect the rights of the Investment Shareholders and
their entitlements will remain unchanged. Accordingly, only the Co-operative
Control Shareholders will be entitled to vote on this Resolution.

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Listing Rules – Waivers, Rulings, and Approvals
LIC has obtained a number of waivers, rulings, and approvals
from the Listing Rules from the NZX, as described below. These
waivers, rulings and approvals are conditional on the Proposal
being approved.
•
Listing Rule 1.6.1: A waiver has been obtained to allow
the definition of “Renounceable” to refer to a right or
offer that is transferable by any Shareholder to another
person entitled to hold the securities (rather than any
person). This reflects the ownership restrictions on
Shares, as a result of the co-operative nature of LIC.
•
Listing Rules 3.2.2, 3.2.3 and 3.2.6: Waivers have been
granted to allow LIC to continue to operate its director
nomination (including restrictions on who may be
nominated) and rotation, each in accordance with the
New Constitution.
•
Listing Rule 7.3.11(c): A ruling has been granted to
allow LIC to issue new Shares to a Shareholder in order
to ensure they meet the Share Standard. The waiver
treats the Share Standard as the “Minimum Holding”
requirement for LIC for the purposes of the Listing Rules.
•
Listing Rule 7.6.3: A waiver has been granted to allow
LIC to provide financial assistance to the “Approved
Holding Entity” under the New Constitution. The
Approved Holding Entity acquires Shares in LIC on behalf
of Shareholders in administering a voluntary investment
scheme or dividend reinvestment plan approved by the
Board.
•
Listing Rule 7.6.9: A ruling has been granted to allow
LIC to buy back Shares from an exiting Shareholder as a
“routine buyback”.
•
Listing Rule 8.1.3: A waiver has been granted to allow
the Nil Paid Shares to carry full voting rights. Without this
waiver, the Nil Paid Shares could only carry voting rights
in proportion to which the Share is paid up.
•
Listing Rule 8.2.1: As LIC is a non-standard issuer, a
ruling has been granted that allows LIC a more extensive
lien over the Shares than would otherwise be the case.
This is because the lien secures all monies owing to LIC.
•
Listing Rule 11.1.5: Approvals have been granted to
certain restrictions on the issue, acquisition or transfer
of Shares. For the most part, these relate to the
co-operative nature of LIC and the fact that only
Qualifying Customers can hold Shares (other than a
limited pool of Shares available to employees under the
employee share scheme).
Minority Buy-out Rights
Sections 110 and 118 of the Companies Act grant minority
buy-out rights to any Shareholders who vote all of their Shares
against a special resolution approving any matter that affects
the rights attaching to shares. Resolution 2 affects the rights
attaching to Co-operative Control Shares and to Investment
Shares, and so minority buy-out rights will be available to those
Shareholders voting against Resolution 2.
Exercising Buy-out Rights
A Shareholder who wishes to exercise those minority buy-out
rights must cast all votes attached to Shares registered in the
Shareholder’s name and having the same beneficial owner,
against Resolution 2.
If a Shareholder votes all of their Shares against Resolution 2
but it is nevertheless approved, in order to exercise minority
buy-out rights, the Shareholder must, within 10 Business Days
of the passing of Resolution 2, give written notice to LIC that
the Shareholder requires LIC to purchase the Shareholder’s
Shares. This notice will apply to all Shares held by the
Shareholder.
LIC must, within 20 Business Days of receipt of such notice:
• agree to the purchase of the relevant Shares; or
• arrange for some other person to agree to purchase the
relevant Shares; or
• apply to the court for an order exempting LIC from the
obligation to purchase the Shares, on the grounds that
the purchase would be:
–disproportionately damaging to LIC; or
–that LIC cannot reasonably be required to finance the
purchase; or
–it would not be just and equitable to require LIC to
purchase the Shares; or
• arrange for Resolution 2 to be rescinded by another
special resolution of Shareholders, or decide in the
appropriate manner not to take the action concerned, as
the case may be; and
• give written notice to the Shareholder of the Board’s
decision as to which of the above actions it will take.
SECTION B: EXPLANATION OF THE RESOLUTIONS AND ADDITIONAL INFORMATION

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NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
Where LIC agrees to purchase the Shares, it must, within 5
Business Days after the written notice of LIC’s decision in the
preceding paragraph, give written notice to the Shareholder,
setting out the price (or prices, in the case of Shares of
different classes) the Board offers to pay for the Shares and
certain information relating to how the price was calculated.
Co-operative Control Shares
The price payable for a Co-operative Control Share will be
calculated in accordance with section 22 of the Co operative
Companies Act 1996 and the Constitution. Together, they
provide that the price may be the lower of:
• the nominal value of that Share;
• the amount paid up on the Share; or
• the amount determined under clause 8.3 of the
Constitution.
Investment Shares
The price payable by LIC for an Investment Share will be a
“fair and reasonable” price, which does not take into account
any fluctuation (positive or negative, and whenever occurring)
attributable to the proposed Reclassification.
Arbitration
If the Shareholder considers that the price offered is not fair
and reasonable, they must within a further 10 Business Days,
give written notice of their objection to LIC.
If within 10 Business Days of the Board giving notice to the
Shareholder, no objection to the price has been received by
LIC, LIC must purchase the Shares at the nominated price:
• on a date agreed between LIC and the Shareholder; or
• if no date is agreed, as soon as practicable.
If the Shareholder objects to the price being offered by LIC:
• the question of what is fair and reasonable must be
referred to arbitration; and
• LIC must, within 5 Business Days of receiving the notice
of objection pay a provisional price in respect of the
Shares equal to the price nominated by the Board.
The arbitration is to be conducted in accordance with the
Arbitration Act 1996. The arbitrator must expeditiously
determine a fair and reasonable price for the Shares to be
purchased. If the price determined by the arbitrator exceeds
the provisional price paid by LIC, LIC must immediately pay
the balance owing to the Shareholder. If the price determined
is less than the provisional price paid by LIC, LIC may recover
the excess paid from the Shareholder. The arbitrator may
award interest on any balance payable or excess to be repaid.
The Arbitration Act preserves the right of an arbitrator to
award legal and expert costs and, therefore, both LIC and the
relevant Shareholder(s) bear the risk of an adverse cost award
in connection with any arbitration if they are unsuccessful.
On-Market Sales as Preferred Remedy
LIC encourages any Investment Shareholders who would wish
to exercise minority buy-out rights to consider selling their
Investment Shares on-market, rather than exercising their
formal rights. That approach is the traditional avenue open to
shareholders of listed companies where the shareholder does
not agree with the company’s direction.

SECTION B: EXPLANATION OF THE RESOLUTIONS AND ADDITIONAL INFORMATION

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NOTICE OF MEETING AND EXPLANATORY MEMORANDUM
Glossary
Announced means a disclosure to Shareholders made through
the market announcement platform for NZAX.
Annual Update means the annual process of adjusting the
shareholdings of Co-operative Control Shareholders so that
their respective shareholdings meet the Share Standard in
respect of the Qualifying Expenditure of each such Shareholder
for the preceding season.
Approved Holding Entity has the meaning given to it in the
Constitution.
Board means the Directors numbering not less than the
required quorum acting together as a board of Directors.
Business Day has the meaning given to “Working Day” in the
Companies Act.
Companies Act means Companies Act 1993.
Company, Co-operative or LIC means Livestock Improvement
Corporation Limited.
Compliance Date means the date by which Shareholders
or new customers are required to share up (or sell down) in
relation to any particular year. Under the existing Constitution,
this is 15 July of the following year (or as soon as practicable
thereafter) and under the Proposal, this will be 15 October of
the following year.
Conditions and Service Rules has the meaning given to the
term “Service Rules” in the Constitution.
Constitution means the company constitution of LIC.
Co-operative Control Shareholding Requirement has
the meaning given to it in the Constitution being shares
equivalent to 4% of Qualifying Expenditure as at the date of
this document. Under the Proposal, the concept of “Share
Standard” is used from Implementation instead of Co-operative
Control Shareholding Requirement.
Co-operative Control Shareholder means a Shareholder
holding one or more Co-operative Control Shares.
Co-operative Control Shares means Shares having a nominal
value and designated as Co-operative Control Shares.
Council or Shareholder Council means the LIC Shareholder
Council.
Councillor means a person elected by Shareholders within a
ward to represent that ward on the LIC Shareholder Council.
DIRA means the Dairy Industry Restructuring Act 2001.
Directors mean the directors for the time being of the
Company.
FMCA means the Financial Markets Conduct Act 2013.
Implementation means the process of the Reclassification.
Implementation Date means the date the Reclassification
takes effect in accordance with the Implementation Timetable.
Implementation Timetable means the timetable for the
implementation of the Proposal set out on page 9 of this
document, as amended from time to time by the Board and
Announced to Shareholders.
Independent Adviser means Northington Partners.
Independent Adviser’s Report means the report of
Northington Partners dated 9 February 2018, a summary of
which is set out on pages 14 to 17.
Information Pack means the suite of documents described on
the inside cover of this document.
Investment Shareholder means a Shareholder holding one or
more Investment Shares.
Investment Shares means Shares which bear no par or
nominal value and which are designated as Investment Shares.
Listing Rules means the NZAX Listing Rules which relate to the
NZAX as amended from time to time, and may be a reference
to a particular Rule or Rules as specified.
Minimum Purchases Amount has the meaning given in the
Constitution.
New Constitution means the constitution of LIC proposed to be
adopted pursuant to the Proposal.
Nil Paid Shares means, pre-Reclassification, the nil paid Co-
operative Control Shares issued under the Proposal to holders
of Co-operative Control Shares or, post-Reclassification, the nil
paid Ordinary Shares. These Shares must be paid up over time
as explained in this document.
NZAX means the NZX Alternative Market operated by NZX
Limited.
Ordinary Shareholder means a Shareholder holding one or
more Ordinary Shares.
Ordinary Shares means a share in the capital of the Company
which has the rights set out in section 36(1) of the Companies
Act.
Proposal means the actions contemplated by the Resolutions,
taken together.
Qualifying Customer means any person who satisfies the
requirements in the Constitution to become a Shareholder.
Qualifying Expenditure means expenditure on Qualifying
Products and Services.
Qualifying Products and Services has the meaning given in
the Constitution.
Regulations means the Financial Markets Conduct Regulations
2014.
SECTION B: GLOSSARY

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Reclassification:
a. means, in relation to each Co-operative Control Share and
each Investment Share:
i. all rights and restrictions conferred on a Share
pursuant to its terms of issue will no longer have
effect (except for any rights relating to any dividend,
distribution, or other entitlement accrued on or
before the Implementation Date, which will subsist);
ii. the terms on which that Share is issued will be
replaced with the terms of issue of an Ordinary
Share; and
iii. from the Implementation Date, such Share will be an
Ordinary Share, and the holder of such Share will be
an Ordinary Shareholder who will be conferred all
the rights and obligations in respect of an Ordinary
Share (other than in respect of any dividend,
distribution, or other entitlement that has accrued
before the Implementation Date); and
b. for the avoidance of doubt, does not constitute
redemption, cancellation or buy-back of Shares or an
issue, allotment or creation of a new Share,

and Reclassify shall be construed accordingly.
Relevant Interest has the meaning given to that term in the
FMCA.
Resolutions means Resolution 1 and Resolution 2 set out at
pages 32 of this document.
Returning Officer has the meaning given in the Constitution.
Roadshow means the Shareholder meetings arranged by
LIC for the purpose of discussing the Proposal and the voting
process with the Shareholders, the current timetable and
venues for which are set out in Schedule 4.
Share Standard means the existing share standard (as defined
as the Co-operative Control Shareholder Requirement in the
current Constitution) prior to Reclassification; or the new share
standard (defined as the Shareholding Requirement in the New
Constitution) after Reclassification, as the case may be.
Shares means shares in the Company that have been or may
be issued from time to time, including Co-operative Control
Shares, Investment Shares, Ordinary Shares and Nil Paid
Shares as appropriate.
Shareholder means a person whose name is entered in the
register of security holders maintained by the Company as the
holder for the time being of one or more Shares.
Special Meeting means the special meeting of Shareholders to
be held at LIC’s Tempero Centre, Cnr Ruakura and Morrinsville
Roads, Newstead, Hamilton on Wednesday, 14 March 2018 at
10.30 am.
Subsidiary means a subsidiary of LIC.
Voting Form means the combined proxy appointment and
voting form to be used for the purposes of the Special Meeting.
Additional Notes:
• Percentages in this document have been rounded to the
nearest percent.
• Numbers of Co-operative Control Shares and Investment
Shares, when referenced as a group, have been rounded
to the nearest 100,000.
• References to legislation refer to that legislation as
amended from time to time.
SECTION B: GLOSSARY

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SCHEDULE 1

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SCHEDULE 1
Summary of Shareholding Rights between Classes


The table below describes LIC’s assessment of the principal changes proposed to be made to the Shareholders’ rights.
PRE-RECLASSIFICATIONPOST-RECLASSIFICATION
Key FeatureCo-operative Control
Shares
Investment SharesOrdinary Shares
Are the Shares Listed?NoYes – on the NZAX Yes – on the NZAX
How are Shares valued?Nominal Value of $1.00 No par or nominal value.
Value is set by trading on the
NZAX
No par or nominal value.
Value is set by trading on the
NZAX
Who can hold Shares?New Zealand dairy
farmers who are Qualifying
Customers
Investment Shares can only
be held by Co-operative
Control Shareholders (with
some limited exceptions)
16
New Zealand dairy
farmers who are Qualifying
Customers (with some limited
exceptions)
17
How many Shares can /
must be held?
Based on a share standardMaximum holding of 5% of
Investment Shares on issue
Hybrid of rules for Co-
operative Control Shares and
Investment Shares:
Minimum holding based
on a Share Standard
(being increased under the
Proposal). Maximum holding
of 5% of the Ordinary Shares
on issue
Are Shareholders
required to surrender
or sell Shares?
Yes – if shares held exceed
the Share Standard at the
end of any season they must
be surrendered
Yes – if Shareholder ceases
to be a Co-operative Control
Shareholder they must
surrender or sell their Shares
within 2 years of no longer
being a Co-operative Control
Shareholder
Hybrid of rules for Co-
operative Control Shares
and Investment Shares:
Yes – if Shareholder ceases
to be a Qualifying Customer,
they must sell their Shares by
15 October in the second year
after the end of the relevant
season
What consideration
will Shareholders
receive for surrendered
Shares?
Generally, an amount equal
to the Nominal Value paid
Price set by NZAXPrice set by NZAX
Do voting rights attach
to the Shares?
Yes – but maximum voting
entitlement capped
No – except in limited
circumstances – voting
entitlement capped
Yes – but maximum voting
entitlement capped at 1%
(unless and until DIRA is
amended to remove this
requirement)
Are Shareholders
entitled to Dividends?
Yes – but the maximum
entitlement is capped
Ye s Ye s
Can Shares be
transferred and, if so,
to who?
No – except in limited
circumstances
Yes – this can be done on-
market or off-market and,
generally, only between
Qualifying Customers
18

Yes – this can be done on-
market or off-market and,
generally, only between
Qualifying Customers
19

Can Shares be held by
someone else on behalf
of a Shareholder?
No – except in limited
circumstances
No – except in limited
circumstances
No – except in limited
circumstances
SCHEDULE 1: SUMMARY OF SHAREHOLDING RIGHTS BETWEEN CLASSES
16. Employees may also hold, in aggregate, up to 5% of the Ordinary Shares.
17. The existing employee share scheme is reserved.
18. The exception being LIC employees to hold Shares through the employee share scheme.
19. As above. The Proposal preserves the existing employee share scheme in its existing form. Nil Paid Shares must be paid up prior to transfer, except in exceptional
circumstances approved by the Board.

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SCHEDULE 2

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SCHEDULE 2
Summary of the Changes to the Constitution
The table below summarises LIC’s assessment of the principal changes proposed to be made to the current Constitution.
A copy of the New Constitution and a version of the Constitution showing all proposed changes is available at www.lic.co.nz/vote
DESCRIPTIONNEW POSITIONCURRENT POSITIONREASON FOR CHANGE
Share StructureThere will only be a single
class of shares – Ordinary
Shares.
Key features of the Ordinary
Shares will be:
• Listed on NZAX with a
market-driven price
• Full voting rights
• Full economic rights (all
dividends and return of
capital on liquidation)
• 1% voting cap unless
and until DIRA is
amended to remove
this cap
Relevant references
throughout the Constitution
updated to reflect the
rights proposed to attach
to the Ordinary Shares and
remove the rights attaching
and references to both Co-
operative Control Shares and
Investment Shares.
There are two classes of
securities: Co-operative
Control Shares and
Investment Shares.
Key features of Co-operative
Control Shares are:
• Nominal value of $1
• Full voting rights
• Economic rights limited
to the Priority Dividend
(based on the first
mortgage lending rate
of LIC’s principal banks
in respect of secured
loans made to dairy
farmers) and a priority
return of capital on
liquidation
• 1% voting cap
Key features of Investment
Shares are:
• Listed on NZAX with
market-driven price
• No substantive voting
rights
• Subordinated dividend
• Subordinated rights
to residual capital in a
liquidation
All current Shares will be
reclassified as Ordinary
Shares.
Details of the reason for the
Reclassification are set out at
pages 18 to 20.
Minimum Purchases
Amount
Under the New Constitution,
the Board will be permitted
to change the Minimum
Purchases Amount from
time to time (with the
initial amount being as
set out below), subject
to consultation with the
Shareholder Council.
Any changes will be set
out in the Conditions and
Service Rules.
The Board has determined
that the initial Minimum
Purchases Amount will
be increased to $1,000
per season, which will be
specified in the Conditions
and Service Rules.
The Minimum Purchases
Amount is fixed at $500 per
season.
Amendments require
Shareholder approval by
ordinary resolution.
The Board believes that
$1,000 per season is an
appropriate Minimum
Purchases Amount. The
existing Minimum Purchases
Amount has not changed
since it was introduced
in 2002. Any current
Shareholders spending less
than $1,000 (approx 1% of
all Shareholders) will be
grandfathered (see page 25).
The Board believes it is
sensible to have the flexibility
to amend the Minimum
Purchases Amount from time
to time, without having to
amend the New Constitution,
whilst recognising the need to
be clear for all customers.
SCHEDULE 2: SUMMARY OF THE CHANGES TO THE CONSTITUTION

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DESCRIPTIONNEW POSITIONCURRENT POSITIONREASON FOR CHANGE
Share StandardUnder the Constitution, the
Board will be permitted to
change the Share Standard
and how it is calculated
from time to time, subject
to consultation with the
Shareholder Council. Any
changes will be notified in
the Conditions and Service
Rules.
The Board has determined
that the initial Share
Standard will be increased to
one Share for each $6.25 of
Qualifying Expenditure and
a banded Share Standard
will be introduced, as
further described on page
24. Qualifying Expenditure
will be measured in uniform
$5,000 bands
20
.
The Share Standard will be
measured on the basis of
Qualifying Expenditure for
a Qualifying Customer on a
rolling three-year average
basis.
The Share Standard is fixed
at an equivalent to 4% of
Qualifying Expenditure in the
preceding year.
Amendments require
Shareholder approval by
ordinary resolution.
The Board believes it is
appropriate to set a higher
Share Standard, to effect a
greater alignment between
ownership in the Company
and spend with it. Averaging
the Qualifying Expenditure
over three years reduces the
financial burden of the higher
Share Standard by allowing
Shareholders to spread their
Share purchases over the
same period.
The Board believes it
is sensible to have the
flexibility to amend the Share
Standard from time to time,
without having to amend
the New Constitution, whilst
recognising the need to be
clear for all customers.
Maximum HoldingOrdinary shareholding
capped at 5%.
Investment shareholding
capped at 5%.
Consequential change
from the Reclassification.
The largest shareholding
immediately following the
Reclassification is anticipated
to be 2.2%.
New customers A new customer may apply to
become a Shareholder once
they exceed the Minimum
Purchases Amount in any
season.
Once a customer’s average
expenditure on Qualifying
Products and Services over
the three preceding seasons
exceeds the Minimum
Purchases Amount, they will
be deemed to have made
an application to become a
Shareholder and they must
hold the Share Standard on
the Compliance Date.
No Shares are acquired
on behalf of a Qualifying
Customer, except where a
Qualifying Customer fails to
meet the Share Standard on
the Compliance Date (see
page 26).
A new customer may apply
to become a Shareholder
(and will be deemed to
have applied to become
a Shareholder) once they
have exceeded the Minimum
Purchases Amount in any
season and are notified of
this by LIC.
The new customers will then
be issued Co-operative
Control Shares to ensure
they meet the Share
Standard. That issuance
will occur following the close
of the Season during which
that shareholder exceeds the
Minimum Purchases Amount.
The Co-operative Control
Shares are issued at the
nominal value at the time of
issuance (currently $1 each).
Consequential change
from the Reclassification
and the decision to set the
Share Standard based on
three-year average spend
on Qualifying Products and
Services.
The Board believes it is
sensible to allow a new
customer to apply to be
a Shareholder as soon as
they exceed the Minimum
Purchases Amount – this is
consistent with the existing
arrangement.
SCHEDULE 2: SUMMARY OF THE CHANGES TO THE CONSTITUTION
20. Except for the initial band which will apply from $1,000 to $4,999.

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DESCRIPTIONNEW POSITIONCURRENT POSITIONREASON FOR CHANGE
Compulsory acquisition
of Shares for existing
Shareholders
At the end of the Season,
the Company will notify each
Shareholder of its existing
holdings and any additional
Shares required to meet the
Share Standard.
Shareholders must then
acquire such number
of additional Shares to
ensure they meet the Share
Standard by the Compliance
Date (currently set as 15
October).
If a Shareholder does not
hold the Share Standard by
the Compliance Date, the
Company will acquire the
shortfall on behalf of the
Shareholder or issue new
Shares to the Shareholder in
which case the Shareholder
will be deemed to have
applied. Details of the
acquisition process are set
out at page 26.
Following the issue of Shares
under the Annual Update,
the Company sends each
Shareholder an annual
statement.
Where a Shareholder holds
fewer Co-operative Control
Shares than the Share
Standard on the Compliance
Date (currently, the Board
issues the additional Shares
to that Shareholder as part
of the Annual Update).
Moving to a market-traded
Share for the Share Standard,
rather than the current Co-
operative Control Shares,
means that Shareholders
have the opportunity to
determine how and when
to acquire Shares to meet
the Share Standard by the
Compliance Date.
The Compliance Date has
been pushed back following
the end pf each season to
allow Shareholders more time
to acquire any necessary
additional shares on market.
Compulsory disposal of
shares
Shareholders will not be
required to sell their Shares
unless they cease to spend
the Minimum Purchases
Amount in any season or
fail to meet other Qualifying
Customer criteria. They must
then sell their Shares by 15
October in the second year
after the end of the relevant
season (i.e. approximately
16 and a half months after
the end of the season in
which they did not spend the
Minimum Purchases Amount).
If a Shareholder has not sold
their Shares by that point,
the Company will be entitled
to sell their Shares on the
Shareholder’s behalf.
(An exception to this applies
for any Shareholder who, at
the Implementation Date,
met the previous Minimum
Purchases Amount and
continues to do so.)
Excess Co-operative Control
Shares must be surrendered
at nominal value.
Investment Shares must
be sold within 24 months of
ceasing to be a Co operative
Control Shareholder. A
Shareholder who ceases
to spend the Minimum
Purchases Amount with the
Company must surrender
their Co operative Control
Shares. If a Shareholder has
not sold their Investment
Shares by the required
date, the Company is
entitled to sell them on the
Shareholder’s behalf.
Shareholders should be able
to hold more Shares than the
Share Standard (subject to a
cap of 5%) but, generally, only
customers of LIC are entitled
to hold Ordinary Shares.
With LIC as a co-operative,
once a Shareholder ceases
to spend the Minimum
Purchases Amount, they
should be required to sell
their Shares within a defined
period (and the Company
must have the ability to
ensure that they are sold).
The period within which the
Shareholder is required to
sell their Shares has been
shortened to align it with the
Compliance Date to assist
liquidity in a period where
there is likely to be high
volumes of trading.
SCHEDULE 2: SUMMARY OF THE CHANGES TO THE CONSTITUTION

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DESCRIPTIONNEW POSITIONCURRENT POSITIONREASON FOR CHANGE
Transfer of SharesOrdinary Shares will be listed
and freely tradable amongst
Qualifying Customers on the
NZAX.
However, Ordinary Shares
that are unpaid or partly
paid will not be able to
be transferred until they
have been fully paid up (or
otherwise with the approval
of the Board).
Co-operative Control Shares
may be transferred to a
Qualifying Customer (subject
to prior Board approval).
Investment Shares are listed
and traded on the NZAX.
This change is consequential
to the decision to move to
one class of Shares. It allows
Shareholders to still seek
an economic investment
in LIC beyond meeting the
Share Standard. It also
gives Shareholders a choice
as to when to acquire the
Shares and when to sell them
for them to meet the Share
Standard.
DirectorsElected directors will
be elected by Ordinary
Shareholders in the relevant
region.
Elected directors are elected
by Co-operative Control
Shareholders in the relevant
region.
Consequential in that it
reflects the key elements of
the Proposal.
Honoraria CommitteeThe Honoraria Committee
will comprise up to four
Ordinary Shareholders,
elected by the Ordinary
Shareholders.
The Honoraria Committee
comprises up to four
Co-operative Control
Shareholders, elected by
the Co operative Control
Shareholders.
Consequential in that it
reflects the key elements of
the Proposal.
LIC Shareholder
Council
Councillors will be elected by
Ordinary Shareholders in the
relevant ward.
Councillors are elected
by Co-operative Control
Shareholders in the
relevant ward.
Consequential in that it
reflects the key elements of
the Proposal.
Qualifying Products
and Services
Those products and services
supplied by the Company
or any Subsidiary that are
identified by the Company
in its Conditions and Service
Rules as “Qualifying Products
and Services”, as may be
amended from time to time
in consultation with the
Council.
Stated Products and
Services provided by the
Company were classed as
“Qualifying Products and
Services” with any other
products and services as the
Board specifies from time to
time, subject to obtaining the
prior approval of the Council.
The Board believes it sensible
to have the flexibility to
change the Qualifying
Products and Services
from time to time, and to
allow Subsidiaries (eg LIC
Agritechnology Company
Limited) to supply Qualifying
Products and Services and
to reflect changes in the
broader Group product suite.
Modification of NZAX
Listing Rules
As there is only one class
of Shares, no distinction
needs to be drawn between
multiple classes for NZAX
Listing Rules purposes.
A number of provisions were
required to be included to
modify the Listing Rules
to reflect the listing of
Investment Shares only.
Consequential in that it
reflects the key elements of
the Proposal.
SCHEDULE 2: SUMMARY OF THE CHANGES TO THE CONSTITUTION

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SCHEDULE 3

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SCHEDULE 3: RISKS AFFECTING AN INVESTMENT IN LIC
SCHEDULE 3
Risks Affecting an Investment in LIC
The risks set out in the below table are provided in the context of Ordinary Shares tradable on the NZAX Main Board. These risks
are based on the knowledge and assessment of the Directors as at the date of this document and it is possible that other risks may
emerge in the future.
RISKDESCRIPTION AND
ASSESSMENT OF RISK
STEPS TO MITIGATE RISK
Risks relating to Implementation of the Proposal
1
Adverse price of
Ordinary Shares
Following Implementation, Ordinary Shares
will be listed on the NZAX and, as such, will be
subject to market pricing. It is possible that the
market price following Implementation is lower
than the value attributed to the Shares for the
purposes of the Implementation of the Proposal.
Since Ordinary Shares will not be redeemable,
Shareholders would be exposed to the
associated financial risk inherent in trading in
listed securities.
It is possible that an exiting Shareholder may
need to pay more than the then market price
of the Ordinary Shares to exit the Co-operative
because the balance owing on each Nil Paid
Share will not be affected by any changes in the
trading price of Ordinary Shares.
Assessment of likelihood of circumstances
arising: Medium
Assessment of impact: Medium
LIC has sought external financial and
valuation advice on the relative values of
the Co-operative Control Shares and the
Investment Shares and considered the
conclusions expressed by the Independent
Adviser to assist it in setting the relative
values for the purposes of the Proposal.
Risks relating to financial position and performance
2
Volatility of
New Zealand milk
price
Volatility of New Zealand milk price will affect
returns paid to farmers. A decrease in milk price
could reduce returns to farmers. The Company’s
revenue may therefore be reduced as farmers
decrease expenditure as a consequence of their
reduced returns.
As a net exporter of milk, New Zealand’s milk
price is heavily influenced by reference to the
price set by the Global Dairy Trade.
Assessment of likelihood of circumstances
arising: High
Assessment of impact: High
Continue to explore diversified growth
opportunities and ways to improve efficiency.
Reduce dependency on the New Zealand
market by continuing to diversify into
international markets.
Reduce dependency on the dairy sector by
continuing to diversify product offerings to
other species.
Continue to focus on innovating products and
solutions that provide operational efficiencies
to New Zealand dairy farms.

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SCHEDULE 3: RISKS AFFECTING AN INVESTMENT IN LIC
RISKDESCRIPTION AND
ASSESSMENT OF RISK
STEPS TO MITIGATE RISK
Risks relating to delivery of products and services to Shareholders
3
Disruption to
semen straw
production
The Company’s ability to provide sufficient quality
semen during a season relies on a number of
factors including the maintenance and operation
of key equipment, staff training and adherence to
approved procedures and processes. An inability
to meet demand for the Company’s semen would
result in significant reputational damage as well as
a reduction in New Zealand revenue.
Assessment of likelihood of circumstances
arising: Medium
Assessment of impact: Medium
Each year a pre-season risk review is
conducted of all aspects of the production
process and any necessary remedial actions
are initiated prior to the season start.
Key equipment is routinely maintained and
staff trained in its correct use. Standard
operating procedures are well documented
and regularly reviewed.
Semen quality is monitored daily and non-
return rates are monitored weekly during the
peak of the season.
Contingency stock of frozen semen is
maintained at a separate location.
4
Major IT system
issues
Increased reliance both by farmers and the
Company on technology, IT systems and services
increases vulnerability to system outages and
data loss as a result of cyber intrusions or system
failures.
Assessment of likelihood of circumstances
arising: Medium
Assessment of impact: Medium
Security strategy, measures, reviews and
audits in place both within the Company and
within its technology service providers.
Business continuity and disaster recovery
plans and procedures documented and
regularly tested.
5
Bio-security /
animal health
issues
An exotic disease outbreak in New Zealand could
severely limit the Company’s ability to provide
biological products, including semen, to dairy
farmers in New Zealand and overseas, and to
continue testing of milk and other biological
samples. Health issues within the Company’s bull
team could equally reduce its ability to provide
quality products and services to dairy farmers.
Assessment of likelihood of circumstances
arising: Medium
Assessment of impact: High
Quarantine procedures on all LIC-controlled
locations.
Animals maintained at separate locations and
effective segregation of bulls occurs within a
single location.
Business continuity plans in place with regular
reviews and scenario testing.
Contingency stock of frozen semen
maintained at a separate location.
Veterinary expertise within the Company.
Regular bull inspections.
6
Introduction of
disruptive
technologies
Inability to commercialise new innovations and/or
respond quickly to disruptive technologies causing
reduced demand for existing products and services
with resultant reduction in revenue.
A core part of LIC’s business is its information
gathering and analysis, much of which occurs
through LIC’s software and connected devices.
This is an area where the speed and frequency
of new disruptive technologies, being developed
globally, is rising at an accelerated pace. We
believe this, together with the increasing
interconnectivity and decreasing cost of
development, presents a risk to LIC’s software
product offerings, in particular.
Assessment of likelihood of circumstances
arising: High
Assessment of impact: Medium
Adoption of world-leading software and
product development methodologies to
enable quicker commercialisation of new
and improved products and services and
prioritisation of capital spend to ensure
developments align with farmer needs.

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SCHEDULE 4

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SCHEDULE 4: ROADSHOW 2018 TIMETABLE
SCHEDULE 4
Roadshows 2018 Timetable
Connecting your co-operative to the future
Locations/Schedule
TIMING
Day sessions — 11am - 1pm with a light lunch
Evening sessions — 7.30pm - 9.30pm followed by a light supper
NORTHLAND / WAIKATO / TARANAKI
DayDate am/pmLocationVenue
Mon26 Feb amKerikeri Okaihau Golf Club
Mon26 FebpmWhangareiTo be advised – see www.lic.co.nz/vote
Tues27 Feb amDargavilleTo be advised – see www.lic.co.nz/vote
Tues27 Feb pmWellsfordWellsford Community Centre
Wed28 Feb amPukekoheCampbell Tyson Events Centre
Wed28 Feb pmMatamataMatamata Club
Thur1 Mar amTaupiriTaupiri Rugby Club
Thur1 Mar pmHamiltonMatangi Hall
Fri2 Mar amCambridgeFarm Source Store on Albert Street
Mon5 MaramWaitaraClifton Rugby Club
Mon5 MarpmNew PlymouthQuality Hotel New Plymouth
Tues6 Mar amMidhirst (Inglewood)Farm Source, Inglewood
Tues6 Mar pmElthamEltham Vet Clinic
Wed7 Mar amWaverleyWaverley Community Centre
Wed7 Mar pmHaweraTSB HUB
Thur8 Mar amRahotuOaonui Hall
Thur8 Mar pmOtorohanga To be advised – see www.lic.co.nz/vote
Fri9 Mar amPutaruruSt John’s Hall

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WAIKATO / BOP / LOWER NORTH ISLAND
DayDate am/pmLocationVenue
Mon26 Feb amTe PukePongakawa Hall
Mon26 FebpmTaurangaSt Peters Church, Tauranga
Tues27 Feb amWhakataneAwakeri Events Centre
Tues27 Feb pmOpotikiSenior Citizens Club
Wed28 Feb amReporoaTo be advised – see www.lic.co.nz/vote
Wed28 Feb pmRotoruaDistinction Hotel
Thur1 Mar amGalateaGalatea RSA
Thur1 Mar pmWestern BayMangakino Hotel
Fri2 Mar amMorrinsvilleElstow Hall
Mon5 MaramTe AwamutuWaipa Workingmens Club
Mon5 MarpmNgateaNgatea Rugby & Sports Club
Tues6 Mar amWaipukurau To be advised – see www.lic.co.nz/vote
Tues6 Mar pmTaradaleTaradale Hall
Wed7 Mar amDannevirkeThe Hub
Wed7 Mar pmPahiatuaTararua Club
Thur8 Mar amGreytownSouth Wairarapa Working Mens Club
Thur8 Mar pmFoxton To be advised – see www.lic.co.nz/vote
Fri9 Mar amBullsSouth Rangitikei Vets
SCHEDULE 4: ROADSHOW 2018 TIMETABLE
Roadshows 2018 Timetable
Connecting your co-operative to the future
Locations/Schedule

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SCHEDULE 4: ROADSHOW 2018 TIMETABLE
SOUTH ISLAND
DayDate am/pmLocationVenue
Mon26 Feb amGolden BayGolden Bay Recreation centre
Mon26 FebpmReefton To be advised – see www.lic.co.nz/vote
Tues27 Feb amWhataroaWhataroa Hall
Tues27 Feb pmHokitikaTo be advised – see www.lic.co.nz/vote
Wed28 Feb amDarfield Rec and Community Centre
Wed28 Feb pmAshburtonHotel Ashburton
Thur1 Mar amTemukaTemuka Alpine Energy Stadium
Thur1 Mar pmRakaiaTo be advised – see www.lic.co.nz/vote
Fri2 Mar amCulverdenAmuri St. John’s
Mon5 MaramWaimateWaimate Event Centre
Mon5 MarpmWaitaki/PapakaioPapakaio Hall
Tues6 Mar amTaieriHenley Hall
Tues6 Mar pmClydevaleClutha Valley Rugby Club
Wed7 Mar amGoreJames Cumming Wing
Wed7 Mar pmWintonSalvation Army Hall
Thur8 Mar amSeaward Downs Seaward Downs Hall
Fri9 Mar amOtautauOtautau Sports Complex
Roadshows 2018 Timetable
Connecting your co-operative to the future
Locations/Schedule

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DIRECTORY

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LIC
Livestock Improvement Corporation Limited
LIC Head Office
Corner Ruakura and Morrinsville Roads
Newstead, Hamilton
Private Bag 3016
Hamilton 3240
Tel: +64 7 856 0700
Website: www.lic.co.nz
Financial advisers to LIC
Deutsche Craigs Limited
Vero Centre
48 Shortland Street
Auckland 1010
PO Box 1196
Auckland 1140
Tel: +64 9 919 7400
Website: www.deutschecraigs.com
Financial and valuation advisers to LIC
PwC
PwC Tower
Level 22, 188 Quay Street
Auckland 1010
Private Bag 92162
Auckland 1142
Tel: +64 9 355 8000
Website: https://www.pwc.co.nz/
Independent adviser
Northington Partners
Level 14, 52 Swanson Street
Auckland 1010
PO Box 105 384
Auckland 1143
Tel: +64 9 913 4600
Website: http://northington.co.nz/

Legal advisers to LIC
Simpson Grierson
Lumley Centre
88 Shortland Street
Auckland 1010
Private Bag 92518
Auckland 1141
Tel: +64 9 358 2222
Website: www.simpsongrierson.com
Election manager
electionz.com Limited
3/3 Pukaki Road
Yaldhurst
Christchurch 8042
PO Box 3138
Christchurch 8140
Tel: +64 3 377 3530
Email: info@electionz.com
Registrar
Link Market Services Limited
Level 11, Deloitte Centre
80 Queen Street
Auckland 1010
PO Box 91976
Auckland 1142
Tel: +64 9 375 5998
Email: enquiries@linkmarketservices.co.nz
Election helpline
0800 666 033
DIRECTORY

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Internet voting, postal voting & proxy
appointments close
10:30am Monday 12 March 2018
Or
Vote in person at the Special Meeting
10:30am Wednesday 14 March 2018
ote
Our Co-operative. Our Future. Your Vote.

---

Private Bag 3016
Hamilton 3240
New Zealand
PHONE 0800 264 632
www.lic.co.nz
February 9, 2018
John Smith
1090 Farm Road
RD 12, Waikato
New Zealand
Our Co-Op. Our Future. Your vote.
Dear Name,
Have your say on LIC’s future - Internet voting, postal voting & proxy appointments close 10:30am
Monday 12 March 2018 or you can vote in person at the Special Meeting, 10:30am Wednesday 14 March
2018 at LIC Newstead.
I am writing to you about an important proposal to simplify LIC’s share structure by bringing LIC’s two
classes of shares (co-operative and investment) together into a single class.
After a comprehensive process that began in 2016 in response to shareholder concerns about the
existing share structure, we are now pleased to recommend to you the proposed new share structure.
It will:
• Protect the co-operative principles that are fundamental to LIC
• Ensure a fairer system that treats all shareholders equally
• Give LIC capital flexibility in the future
• Support LIC’s strategy (Vision, Purpose, Strategic Themes and Values)
• Deliver a simpler share structure with less hassle for shareholders and LIC
Under the current share structure co-operative shareholders have greater voting rights but have
limited exposure to the financial benefits of our recent transformation programme and future growth
opportunities. Conversely, investment shareholders, while having a right to a greater share of the
economic value created by LIC for its shareholders, have limited ability to control the strategy or
direction that LIC takes to optimise that value.
This creates potentially serious conflicts between the two existing classes of shares. The Board
believes these conflicts will worsen over time and that now is the time to address these conflicts given
they will otherwise lead to issues for the on-going management and governance of LIC.
The proposal will reduce these conflicts, preserve LIC’s co-operative principles and allow us to focus
on a strategy designed to benefit all shareholders equally.
Share simplification is in the best interests of both classes of shareholders and LIC. While the
impacts of moving to a single share structure differ for some shareholders depending on their
current investment mix, we believe that the overall benefits outweigh the negative effects.
It is now time for you as an LIC shareholder and owner of the co-operative to vote on these
important changes.