Waiver from LR 4.15.1

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NZX REGULATION DECISION – 30 August 2019














NZX Regulation Decision
Livestock Improvement Corporation Limited (LIC) (NS)
Application for Waiver from NZX Listing Rule 4.15.1






30 August 2019

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NZX REGULATION DECISION – 30 August 2019
Background
1. This decision relates to prior waiver decision granted by NZX Regulation (
NZXR
) to LIC on 9
February 2018.
2. The information on which this decision is based is set out in Appendix One to this decision. This
decision will not apply if that information is not, or ceases to be, full and accurate in all material
respects.
3. The 1 January 2019 NZX Listing Rules (
Rules
) to which these decisions relate are set out in
Appendix Two to this decision.
4. Capitalised terms which have not been defined in this decision have the meaning given to them in
the Rules, and in Appendix One.

Waiver from Rule 4.15.1
Decision
5. On the basis that the information provided by LIC is complete and accurate in all material respects,
NZXR grants LIC a waiver from Rule 4.15.1 to allow LIC to provide financial assistance to an
Approved Holding Entity, for the purposes of, or in connection with, the acquisition of Equity
Securities issued, or to be issued, under the Voluntary Investment Scheme.
6. This waiver is granted on the conditions that:
a. Key terms of the Voluntary Investment Scheme and the arrangements to be entered into by
the Approved Holding Entity are disclosed to LIC shareholders when the Voluntary Investment
Scheme is established and launched; and
b. The terms of the Voluntary Investment Scheme, including quantum of financial assistance, are
approved by Independent Directors who are not LIC co-operative members and who are not
entitled to utilise the Voluntary Investment Scheme or hold the LIC shares.
Reasons
7. In coming to the decision to provide the waiver set out above, NZXR has considered that:
a. The policy behind Rule 4.15.1 is to ensure that Directors and others closely associated with an
Issuer do not unduly influence a proposal to receive financial assistance from the issuer. Any
financial assistance given under the Voluntary Investment Scheme is given solely to the
Approved Holding Entity to cover its costs and does not cover the costs of the shares, which
will be borne by the participants of the Voluntary Investment Scheme directly;
b. While the financial assistance will be given directly to an Approved Holding Entity that
administers LIC’s Voluntary Investment Scheme, the purpose of the financial assistance is to
allow Directors and other senior, shareholding managers to participate in the co-operative in a
meaningful way, creating alignment with other shareholders without being in breach of the law;
c. The financial assistance will be given on an arms-length basis, and in accordance with LIC’s
Governing Document; and
d. LIC has previously been granted a waiver from an equivalent provision under the 1 October
2017 NZAX Listing Rules (the NZAX Rules) in an NZXR decision dated 9 February 2018, and
LIC’s operating structure has not materially changed.

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NZX REGULATION DECISION – 30 August 2019
Confidentiality
8. LIC has requested that this application and any decision remain confidential until LIC announces the
launch of the Voluntary Investment Scheme.
9. In accordance with Rule 9.7.2(a), NZXR grants this request.

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NZX REGULATION DECISION – 30 August 2019
Appendix One
Background
1. Livestock Improvement Corporation Limited (
LIC
) is a Listed Issuer with a “Non Standard” (
NS
)
designation.
2. LIC is a farmer-owned co-operative company registered under the Companies Act 1993, operating
in the dairy industry in New Zealand.
3. LIC’s shareholders are its customers who spend more than the prescribed minimum expenditure
on qualifying products and services in a season, and employees of LIC. It is compulsory for
customers of LIC purchasing LIC’s products and services to hold a certain number of shares in LIC
based on their expenditure with LIC.
4. LIC has approximately 10,300 shareholders, spread across four regions (Northern, Midland,
Central and Southern regions as defined in its Constitution). LIC shareholders are only able to
nominate and vote for Directors that represent their region (
Elected Directors
). The regional
elections are a key part of the process to ensure appropriate representation of LIC’s shareholders.
The respective Elected Directors make up seven out of the ten Directors, with the remaining being
Board appointed Directors from outside of the co-operative.
Voluntary Investment Scheme
5. LIC plans to offer a voluntary investment scheme (the
Voluntary Investment Scheme
) so that
eligible directors and senior managers are able to invest in LIC without the risk of breaching
securities trading restrictions. The Voluntary Investment Scheme will be a fixed trading plan under
the Financial Markets Conduct Act 2013.
6. Pursuant to LIC’s Governing Document, the Board of LIC may approve one or more persons to
be an approved holding entity to administer any voluntary investment scheme or dividend
reinvestment plan adopted by the Board (
Approved Holding Entity
). The Approved Holding
Entity will be a Board appointed third party who administers the Voluntary Investment Scheme
by acquiring shares on behalf of the Voluntary Investment Scheme participants.
7. LIC intends to pay money to the Approved Holding Entity to meet the Approved Holding Entity’s
administrative costs and brokerage fees for the shares that are acquired on a participant’s
behalf. This financial assistance provided will be on arm’s length terms and represents a de
minimus amount annually. The terms and the quantum payable under the arrangement will be
approved by Independent Directors who are not co-operative members and who are not entitled
to utilise the Voluntary Investment Scheme or hold LIC shares.
8. The cost of any shares acquired under the Voluntary Investment Scheme will be borne by the
participants (i.e. eligible Directors and senior, shareholding managers) directly.
Application for waiver from NZX Listing Rule 4.15.1
9. As part of LIC’s recent migration to the NZX Main Board, LIC has applied for the re-documentation
of a waiver that was previously granted by NZXR on 9 February 2018. LIC considers that there
has been no substantive policy change between the NZAX Listing Rules in respect of which the
previous waiver was granted, and the Rules that would impact on the decision. LIC also submits
that there have been no material changes in LIC’s structure or circumstances since the
previous waiver was granted in 2018.

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NZX REGULATION DECISION – 30 August 2019
Appendix Two

Rule 4.15.1 Financial Assistance
4.15.1 As Issuer must not give financial assistance for the purpose of, or in connection with,
the acquisition of its Equity Securities except if that assistance:
(a) complies with Rule 4.15.2, or
(b) is approved in accordance with Rule 4.15.1