Notice of Special Meeting Fonterra Co-operative Group Ltd

CHAIRMAN’S EMAIL RE NOTICE OF MEETING/SPECIAL MEETING
17 NOVEMBER 2021

Subject: Notice of Annual and Special Meetings

Dear [name],
Today we have released our Notice of Annual Meeting and Notice of Special Meeting
(Capital Structure).
Hard copies have been posted to you, but in the meantime, you can read the documents
online:
Notice of Annual Meeting
Notice of Special Meeting – Capital Structure
Our 2021 Annual Meeting and Special Meeting will be held at the ILT Stadium Southland,
Surrey Park Sports Centre, 18 Surrey Park Road, Invercargill on Thursday 9 December. Due
to the current COVID-19 restrictions, these meetings will be held as hybrid meetings and
shareholders will also be able to attend the meetings online.
Immediately following the conclusion of the Annual Meeting, we will begin the Special
Meeting to consider changes to our Capital Structure.
The Notice of Special Meeting booklet includes an overview of the recommended capital
structure changes and details of the associated special resolution that you are being asked
to vote on. I encourage you to read the details of the recommendation in conjunction with our
long-term strategy booklet: Our Path to 2030.
The Board and senior management are united in the view that what we are recommending is
in the best interests of our Co-operative. There is no perfect answer, but we are confident
that the Flexible Shareholding structure will support the sustainable supply of New Zealand
milk that our long-term strategy relies on. One enables the other, and together they give our
Co-op the potential to deliver the competitive returns that will continue to support our
families’ livelihoods from this generation to the next.
Having already obtained the support of 92% of the Co-operative Councillors, the
recommended changes now require a minimum 75% support of voting farmers.
This is one of the most profound decisions we will make as farmers. I strongly encourage
you to use your vote.
A successful farmer vote would not take effect until the Board is satisfied that any steps
necessary for implementation have been (or will be) completed. We are continuing to work
with the Government on what the changes might mean under the Dairy Industry
Restructuring Act (DIRA).
In the interests of transparency, in our Notice of Special Meeting we have included a letter
from the Minister of Agriculture outlining the Government’s position on our capital structure
proposal.

I believe we are philosophically aligned with the Government. We both want to see Fonterra
continue to thrive as a New Zealand co-operative and deliver increasing value for the New
Zealand economy and for farmers.
The Government is not at this stage in a position to support DIRA changes to facilitate our
proposal. We understand the Government is looking for further assurance that our proposal
supports contestability, drives performance and innovation, and protects alignment of
shareholder interests.
I have spoken to the Minister since receiving his letter and remain confident that we can
provide the Government with the necessary assurances and work together to find a
regulatory framework that supports the Flexible Shareholding structure.
One of the considerations will be a strong mandate for change from the Co-op’s farmers, so
please exercise your ownership and control rights by voting.
If you can’t attend the Annual Meeting or Special Meeting in person or online, you can vote
online, by post, or by way of proxy. Further instructions on how to vote by all of these
methods can be found on the respective voting papers in your voting pack. Today you will
also receive a separate email from the Co-operative Council Chairman, James Barron, with
details about this year’s Fonterra Board of Directors’ Election, Directors’ Remuneration
Committee Election, and the Co-operative Councillor Elections.
I look forward to seeing as many of you as possible in Invercargill and online on 9
December.
Peter

---

Proposed Constitution Changes
for Flexible Shareholding
Capital Structure
Fonterra Special
Meeting 2021
Notice of Special Meeting
of Shareholders and Explanatory Notes
1.00pm on Thursday, 9 December 2021
ILT Stadium Southland
Surrey Park Sports Centre
18 Surrey Park Road
Invercargill

Contents
FONTERRA CO-OPERATIVE GROUP LIMITED SPECIAL MEETING 20211
COVID-19 Implications1
Virtual Meeting1
Special Meeting Documents1
Voting2
Voting Entitlements2
Proxies or Representatives2
Questions2
Votes Required and Quorum2
Results of Voting2
Meeting Attendees2
FONTERRA BOARD CHAIRMAN LETTER3
FONTERRA CHIEF EXECUTIVE LETTER4
FONTERRA CO-OPERATIVE COUNCIL CHAIRMAN LETTER5
FONTERRA CO-OPERATIVE GROUP LIMITED SPECIAL MEETING AGENDA6
PART ONE7
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF FONTERRA CO-OPERATIVE GROUP LIMITED
7
Business7
Special Meeting Proceedings7
Approval of Capital Structure amendments to the Constitution7
PART TWO8
WHAT YOU ARE VOTING ON AND WHY8
OVERVIEW OF THE PROPOSED AMENDMENTS 9
WHAT HAS CHANGED SINCE THE SEPTEMBER BOOKLET14
WHEN THE AMENDMENTS WOULD BE EFFECTIVE16
PART THREE17
CONSTITUTION AMENDMENTS AND EXPLANATORY NOTES 17
MINISTER OF AGRICULTURE LETTER78
GLOSSARY80
This Notice of Meeting contains a special resolution to approve changes to
Fonterra’s Constitution relating to the Flexible Shareholding proposal.
It is important you read the detail about the proposed changes to the Fonterra
Constitution set out in this Notice of Meeting, including the explanatory overview
provided in Part Two and the explanatory notes set out alongside the specific
Constitution changes in Part Three. This will provide you with the information that
you need to enable you to vote.

1
FONTERRA SPECIAL MEETING 2021
This Special Meeting will be held as a hybrid meeting so that Shareholders may either attend at the ILT Stadium Southland,
Surrey Park Sports Centre, 18 Surrey Park Road, Invercargill at 1.00pm or if later, immediately after conclusion of
Fonterra’s Annual Meeting of Shareholders, on Thursday, 9 December 2021 or virtually using the instructions set out
below under the heading ‘Virtual Meeting’.
COVID-19 Implications
Fonterra intends to hold this Special Meeting as a hybrid
meeting so that Shareholders can attend either:
• in person at ILT Stadium Southland, Surrey Park Sports
Centre, 18 Surrey Park Road, Invercargill; or
• virtually, using the instructions set out below under the
heading ‘Virtual Meeting’.
However, due to the current uncertainty relating to the
COVID-19 pandemic, Fonterra may elect to hold this
Special Meeting as an online only meeting, depending on
the COVID-19 restrictions that are in place for Thursday,
9 December 2021. Fonterra will provide Shareholders with
as much notice as is reasonably practicable, by way of an
announcement to the NZX and an email to Shareholders,
if the meeting is to be held as an online only meeting.
This Special Meeting will follow the Ministry of Health
COVID-19 guidelines. This means that everyone attending
the meeting in person will need to comply with the current
government requirements in relation to the hosting of
meetings. These are presently to scan in using the COVID-19
tracer app and follow all requirements around wearing face
coverings and social distancing. If you are feeling unwell or
have been to any COVID-19 locations of interest, we strongly
recommend you join the meeting virtually.
Virtual Meeting
To attend the meeting and participate online use the
following link to the virtual meeting platform:
https://edge.media-server.com/mmc/go/Fonterra-Meeting
Shareholders attending and participating in the meeting
virtually via the online platform will be able to watch the
Special Meeting, vote and ask questions during the meeting.
Shareholders participating online will be required to enter
their name, contact number and supply number(s) for
verification purposes.
More information regarding virtual attendance at the
meeting (including how to vote and ask questions
virtually during the meeting) is available here:
https://www.fonterra.com/online-meeting-guide
Special Meeting Documents
Each Shareholder has been sent:
• This Notice of Meeting booklet, which includes:
–Letters from the Chairman, Chief Executive Officer,
and Co-operative Council Chairman
–Notice of Meeting (including the text of the matter to
be voted on by Shareholders) (Part One)
–Overview of proposed changes (Part Two)
–Explanatory Notes regarding the matter to be voted
on by Shareholders (Part Three)
• A combined Special Meeting Voting Paper/Proxy Form.
Use this Voting Paper/Proxy Form:
–To vote online or by post by 1.00pm on Tuesday,
7 December 2021.
–If you are attending the Special Meeting to vote in
person.
–If you are unable to attend the Special Meeting, and
you do not wish to vote online or by post, you can
appoint a proxy to attend and vote on your behalf by
completing the Proxy Form and returning it to the
address specified on the freepost envelope included
in the voting pack or otherwise set out on the form,
so that the Returning Officer receives it no later than
1.00pm on Tuesday, 7 December 2021.
–If you are a company or other body corporate, you can
appoint a representative to attend and vote on your
behalf by completing the Proxy Form.
Further instructions are on the back of the Special Meeting
Voting Paper/Proxy Form and on page 2 of this Notice
of Meeting.
Fonterra Co-operative Group Limited
Special Meeting for 2021

2
FONTERRA SPECIAL MEETING 2021
Voting
Shareholders can vote on the matters to be considered at the
Special Meeting online or by post. The instructions on how
to vote in this manner can be found on the Special Meeting
Voting Paper/Proxy Form.
electionz.com Limited has been authorised by the Board to
receive, at the address specified on the freepost envelope
included in the voting pack or otherwise set out on the Voting
Paper, and count, all online and postal votes.
For the Special Meeting Shareholders can also vote by
attending the meeting in person or virtually, or by
appointing a proxy or representative (who can attend the
meeting in person or online to vote on their behalf).
All online and postal votes must be received by the Returning
Officer by 1.00pm on Tuesday, 7 December 2021.
Voting Entitlements
A Shareholder’s voting entitlement is based on their
milksolids production. Shareholders will receive one vote
for every 1,000 kilograms of milksolids supplied to Fonterra
during the season ended 31 May 2021.
If a Shareholder did not supply last season but now owns
an existing farm that supplied last season, the voting
entitlement will be based on that farm’s supply last season
or on the Board’s estimate of milksolids production for
this season. In the case of a dry farm conversion and farm
amalgamations/ divisions, voting entitlement is based on
one vote for every estimated 1,000 kilograms of milksolids
to be supplied during the season ended 31 May 2022. Milk
supplied on Contract Supply and milk which is not backed
by shares or counting vouchers is excluded from milksolids
production when calculating voting entitlements.
In accordance with the Companies Act, the Board has fixed
5.00pm on 11 November 2021 as the date for determining
voting entitlements of Shareholders for this meeting.
Accordingly, those persons who are, at 5.00pm on
11 November 2021, registered as Shareholders will be
entitled to vote at the Special Meeting in respect of the shares
registered in their name on that date backed by production.
A Shareholder’s voting entitlement for a farm is shown on
the Voting Paper enclosed for that farm with this pack. If a
Shareholder appoints a proxy or representative, the proxy
or representative will exercise that Shareholder’s voting
entitlement as described above.
Proxies or Representatives
Instructions to appoint a proxy or representative are
outlined in this Notice of Meeting and the Combined Special
Meeting Voting/Proxy Paper. The Returning Officer will
contact each proxy or representative ahead of the Special
Meeting to provide them with the necessary information
required to enable them to participate in and vote during
the Special Meeting.
You may appoint the Chairman of the meeting or any
director, or any other person, as your proxy (a proxy need
not be a Shareholder). Where a Shareholder does not name
a person as their proxy but otherwise completes the proxy
form in full, or where a Shareholder’s named proxy does not
attend the meeting, the Chairman of the meeting will act as
that Shareholder’s proxy and will vote in accordance with that
Shareholder’s express direction.
The Chairman intends to vote any discretionary proxies,
for which they have authority to vote, in favour of
the resolutions.
All proxy or representative appointments must be
received by the Returning Officer by 1.00pm on
Tuesday, 7 December 2021.
Questions
Shareholders will be able to ask questions in person or, for
those attending online, via the online platform during the
Special Meeting. We encourage Shareholders to submit
questions as early as possible to ensure that as many
questions as possible are received and addressed at the
appropriate time during the meeting.
Votes Required and Quorum
The special resolution will be passed if approved by a majority
of 75% or more of the votes of those Shareholders entitled to
vote and voting on the resolution.
The quorum for the meeting is present if not fewer than 50
Shareholders have cast postal votes (including by electronic
means) or are present in person or by a representative, who
between them hold or represent the holder or holders of
not less than two per cent of the voting rights entitled to be
exercised on the resolutions to be considered at the meeting.
There are no voting restrictions on the resolution to be
considered at the meeting.
Results of Voting
The results of voting at the Special Meeting will be posted on
NZX, the Farm Source website and our My Co-op app as soon
as vote counting is complete and the Chairman has declared
the results.
Meeting Attendees
The Special Meeting is held for the benefit of Shareholders
and their authorised proxies and representatives. Fonterra
management will also be in attendance, as well as the
auditors and invited members of the media.

3
FONTERRA SPECIAL MEETING 2021
Fonterra Board Chairman Letter
Dear Farmer Shareholders,
Your Board is pleased to put forward this final proposal to
improve our capital structure as we seek to better enable our
strategy and protect your farmer ownership and control of
our Co-op.
The proposed “Flexible Shareholding” structure is a further
progression on what we have consulted on this year.
We would like to thank the thousands of farmers who gave us
their time and ideas as part of that process. Your feedback has
helped us to shape this proposal into a model we believe best
addresses the broad, and at times conflicting, views within
our ownership base.
I encourage you to read all of the information provided in this
Notice of Meeting. The full proposal is described on pages
9-13, and the changes we have made since September are
described on pages 14-15.
The Board and senior management are united in the belief
that this proposal is the best course of action for our Co-
operative. Moving to a new capital structure now, while
we are in a strong financial position and have all options
available to us, is our best course of action.
The recommended changes have received 92% support from
your Co-operative Council.
We are confident that these changes will support the
sustainable supply of New Zealand milk that our long-term
strategy is based on. Our future success relies on our ability
to hold our own in an increasingly competitive environment,
and one that is rapidly changing due to factors such as
environmental pressures, new regulations and alternative
land uses.
We see total New Zealand milk supply as likely to decline,
and flat at best. Our Co-op’s supply depends on the actions
we take with our capital structure, performance,
productivity and sustainability. If we do nothing, we are likely
to see around 12-20% decline by 2030 based on the milk
supply scenarios we have modelled.
Protecting a strong New Zealand farmer-owned Co-operative
of scale is in all our interests.
Fonterra delivers value to all of our New Zealand
communities. A strong Co-op ensures we pay the highest
sustainable milk price, and our milk price sets the benchmark
for prices kiwi dairy farmers are paid for their milk. Securing
our scale efficiency keeps our manufacturing sites utilised,
and increases our ability to invest in on-farm support
services, innovation, new markets and product development
– all of which create value for New Zealand through milk
price and profits returned to regions, export performance,
employment, environmental performance, and community
development.
Based on our current operations, our Farmgate Milk Price
could be 6-13 cents lower by 2030 if we make no changes
to our capital structure and continue to lose market share
at the rate we’ve seen over the past 5 seasons to May 2020.
We believe this represents a structural impact on industry
profitability that is likely to impact New Zealand dairy farmers
every year.
Farmers leave for different reasons, but one of the most
influential ones is the high level of compulsory investment
that’s required to be part of our Co-op. A capital structure
with flexible shareholding will help to level the playing field
with our competitors, many of whom are foreign-backed and
don’t require farmers to invest capital.
Deciding to stay with Trading Among Farmers (TAF) is an
option, but we risk becoming a smaller and less efficient
Co-op. If that is our collective decision, we would need to
re-look at how we implement the strategy based on even
more conservative risk settings. Under TAF, we are unlikely
to be in a position to achieve the same level of returns in
terms of capital and dividends as we have outlined in our
long-term strategy.
As I said earlier, the Board is united in its view that what
we are recommending is in the best interests of our Co-
operative. There is no perfect answer, but we are confident
that this structure will support the sustainable supply of
New Zealand milk that our long-term strategy relies on.
One enables the other, and together they give our Co-op the
potential to deliver the competitive returns that will continue
to support our families’ livelihoods from this generation to
the next.
Changing our capital structure is the most profound decision
we will make as farmers in almost a decade. I strongly
encourage you to use your vote. It is a critical part of
exercising our ownership and control of our Co-operative, and
our external stakeholders will be looking for a strong mandate
for change.
A successful farmer vote would not take effect until the Board
is satisfied that any steps necessary for implementation
have been, or will be, completed. We are aiming for 1 June
2022, but we need to keep working with the Government
on what the changes might mean under the Dairy Industry
Restructuring Act. We will keep you updated on the likely
date on which the changes would take effect.

Peter McBride
Chairman

4
FONTERRA SPECIAL MEETING 2021
Chief Executive Letter
Dear Farmer Shareholders,
The last three years have been about resetting the business
and showing what we can achieve when we focus on quality
execution and our Co-op is aligned.
I want to thank you for giving your Management Team your
support through this period and supplying the Co-op with
your milk. Together, we’ve shored up our Co-op’s foundations
and done this despite the challenges of operating in a
COVID-19 world.
As we come to the end of our business reset, we have
turned our attention to the next phase of our strategy to
focus on value growth. We’ve looked out to 2030 and the
fundamentals of dairy – in particular, New Zealand dairy –
are strong.
The world wants our sustainably produced, high-quality milk
and this comes at a time when we see total New Zealand milk
supply as likely to decline, and flat at best.
On the one hand, this requires the right capital structure to
help ensure we don’t lose the benefits of what generations
of farmers have built – a New Zealand dairy co-operative
of scale. But on the other hand, it gives us more options
to be selective about what we do with your milk. In doing
so, we can increase the value we generate for farmers and
New Zealand over the next decade.
To make this happen we have made three strategic choices:
1. Focus on New Zealand milk
2. Be a leader in sustainability
3. Be a leader in dairy innovation and science.
Our strategy requires us to focus our capital and people on
enhancing New Zealand milk and for these reasons we have
reviewed our ownership of our two other milk pools – in
Australia and Chile.
Both decisions are critical to achieving a greater focus
on our New Zealand milk and, importantly, allowing us
to free up capital – much of which is intended to be
returned to shareholders.
We are confident that with access to a sustainable supply
of New Zealand milk, Fonterra’s strategy can deliver the
financial targets we have set under our long-term strategy.
While continuing to pay the maximum sustainable milk
price, the key value targets we’re aiming to achieve by
2030 include:
1. A 40-50% increase in operating profit from FY21 and,
with the reduced interest from having less debt, this
should translate into an approximately 75% increase in
earnings, giving us the ability to steadily increase dividends
to around 40-45 cents per share by FY30
2. A Group Return on Capital of 9-10%, up from 6.6%
in 2021
3. Through planned divestments and improved earnings,
an intended return of about $1 billion to shareholders by
FY24, and around $2 billion of additional capital available
for a mix of investment in further growth and return to
shareholders. This is in addition to the approximately
$2 billion expected to be invested in sustainability and
moving milk into higher value products.
We also intend to increase our current total annual R&D
investment by over 50% to around $160 million per annum in
2030, with about $60 million per annum specifically targeted
at growth in Active Living.
These value targets are of course subject to successfully
completing a number of business initiatives, and a number of
assumptions and risks, each of which could materially affect
the actual outcomes. The details of these are set out in the
strategy booklet titled Our Path to 2030 which was provided
to you in September.
Our strategy and ability to achieve these targets depend on a
sustainable supply of New Zealand milk and in turn a capital
structure that enables this.
To achieve that, Fonterra must be an attractive option to
farmers who have a choice on where their milk goes.
Our proposed capital structure gives all farmers a level of
flexible shareholding, which is critical to supporting farmers
to join or stay with our Co-op.
Your Management Team considers these changes to be our
best course of action if we are to maintain farmer ownership
and control of a financially sustainable Co-operative.
We have an incredible natural product made on your farms,
a business supported by a talented and committed team, and
an exciting opportunity to create value. It’s up to us as a
Co-op to work together, make the necessary changes and
ensure we’re creating goodness for generations.
Miles Hurrell
Chief Executive Officer

5
FONTERRA SPECIAL MEETING 2021
Dear Fellow Farmer Shareholders,
This Notice of Special Meeting contains important
information for you to consider ahead of your vote on a
resolution concerning our Co-operative’s capital structure.
Your Co-operative Council strongly encourages you to take
time to consider this information to ensure you have a clear
understanding of what you are being asked to vote on, and
to exercise your ownership and control rights by voting. A
well informed and participating shareholder base is critical to
the success of our Co-operative, and every farmer shares in
this responsibility.
In May, I informed you that the Council supported the
guiding principles for the review. Since then there has
been a significant consultation process that has included
many opportunities for farmers to engage across a variety
of formats. In response to the feedback, a lot of thought
has been given to the proposed changes across all key
stakeholders – Board, Management, Shareholders and your
Co-operative Council.
I would like to acknowledge the efforts that the Board have
gone to, to engage with all corners of our Co-op. We can
see evidence that this has been true consultation through
the number of changes to the proposal over time, and I have
no doubt that all contributions have added value to the
final outcome. We should all feel some ownership of the
final outcome.
During the process we heard your feedback that, to make
a decision on Capital Structure, we all needed more detail
on Fonterra’s strategy and the results that it could be
expected to deliver. In September Miles and his management
team were able to clearly articulate the path ahead, with a
detailed strategic plan out to 2030. I commend them for this
transparency and note that both the direction of travel and
the level of detail have been well supported by farmers.
The changes the Board is recommending require changes
to our Co-operative’s Constitution. Under the Fonterra
Constitution, changes to Part A of the Constitution require
the support of a majority of 50% or more of Councillors.
To inform our vote Councillors attended consultation
meetings; talked extensively with Co-op members to gather
feedback and understand views; discussed and debated
the proposals amongst ourselves, and with Board and
Management. We have deeply considered the problem
to be solved, the milk supply scenarios and the assumptions
they are based on, the preferred option and the other
options considered.
We have also received presentations from two external
advisers to the Board; sought and considered our own
independent advice; considered ‘outlier’ scenarios that
might arise under the proposal; and carefully reviewed
and considered the proposed Constitution changes.
Our particular areas of focus have been:
• the proposed changes alongside the Co-operative
Principles
• ensuring democratic control is maintained for
supplying shareholders
• the impacts of moving the minimum and maximum
shareholding requirements away from the share standard
• analysing possible outcomes, in particular in relation to
ownership and voting concentration
• the likely market dynamics of the proposed farmer
only market.
Since the September proposal we have provided specific
feedback to the Board on the Constitutional Thresholds,
Associated Shareholders, and the capped Fund size. These
discussions have been detailed, constructive, robust and have
always been focused on the best outcome for Fonterra.
As a result, I am confident that the final proposal will give
appropriate protections to supplying shareholders’ ownership
and control.
The Board is proposing an expanded Risk Management Policy
(which currently monitors the size of the Fund) be developed
in consultation with Council. The policy will monitor the total
number of shares on issue compared to milk supply, and the
level of shareholding in our Co-operative by former suppliers
and their permitted transferees.
The proposed changes to the Constitution recognise our
differences as farmers, but that we come together as a
co-operative with a common purpose:
Our Co-operative,
Empowering people
To create goodness for generations.
You, me, us together
Tātou, tātou.
I encourage you to consider the recommendation from
the lens of what’s in the best long-term interest of our
Co-operative.
The recommended changes have received 92% support from
your Co-operative Council.
Ultimately, however, the mandate for change must come from
all shareholders. To be successful, the resolution requires the
support of 75% of shareholders who vote.
It is very important that you participate, so please make time
to consider the proposal and cast your vote.
James Barron
Chairman, Fonterra Co-operative Council
Co-operative Council Chairman Letter

6
FONTERRA SPECIAL MEETING 2021
Fonterra Co-operative Group Limited
Special Meeting Agenda
Below is the proposed programme for the Special Meeting.
Shareholders should note that the order may change at the discretion of the Chairman. Shareholders should allow sufficient time
to register their attendance upon arrival prior to the start of the meeting.
1.00 pm (approximately) – Welcome
Welcome / Introduction - Peter McBride, Chairman of the Board
Special Meeting Proceedings
Chairman of the Board’s Address
Chairman of the Fonterra Co-operative Council’s Address
Approval of Capital Structure related Amendments to the Constitution
Resolution 1: Approval of Capital Structure related Amendments to the Constitution
Voting Paper Collection
2.00pm – Closing (approximately)

7
FONTERRA SPECIAL MEETING 2021
PART ONE
Notice of Special Meeting of Shareholders of
Fonterra Co-operative Group Limited
Notice is given that the Special Meeting of the Shareholders of Fonterra Co-operative Group Limited (“Company”)
will be held on Thursday, 9 December 2021 at ILT Stadium Southland, Surrey Park Sports Centre, 18 Surrey Park
Road, Invercargill. Shareholders can also attend the meeting virtually using the instructions set out under the heading
“Virtual Meeting”.
Peter McBride
Chairman, on behalf of the Board
Notice of Meeting dated 16 November 2021
Business
Welcome / Introduction
The Chairman will welcome Shareholders.

Special Meeting Proceedings
Chairman of the Board’s Address
Chairman of the Fonterra Co-operative Council’s Address

Approval of Capital Structure related
Amendments to the Constitution
Resolution 1: Approval of Capital Structure related
Amendments to the Constitution
To consider and, if thought fit, to resolve as a special
resolution:
“To approve that:
(a) the Constitution of the Company be amended as set out in
Part Three of this Notice of Meeting; and
(b) the amendments to the Constitution be effective on and
from the date determined by the Board and advised to
Shareholders once the Board is satisfied that any steps
necessary for implementation have been (or will be)
completed in a manner that the Board considers (in its
discretion) to be appropriate.”
The above resolution is a special resolution required by
section 106(1)(a) of the Companies Act 1993.
On 2 November 2021 the Board of Fonterra approved the
changes to the Constitution of the Company as outlined
in Resolution 1, subject to Shareholders’ approval. The
Board recommends that Shareholders vote to support the
amendments proposed in Resolution 1.
As the proposed amendments will alter Part A of Fonterra’s
Constitution, the support of a majority of 50 per cent or
more of Co-operative Councillors is required under clause
18.1 of the Constitution. The Co-operative Council has
confirmed that 92% of Councillors support the proposed
amendments.
A solicitor’s opinion regarding the Constitution of the
Company, as required under Rule 1.11.1 of the Fonterra
Shareholders’ Market Rules, has been provided to NZX.
If Resolution 1 is passed by the requisite majority of 75
per cent or more of votes cast by Shareholders entitled to
vote and voting on the resolution, the Constitution will be
amended as set out in Part Three of this Notice of Meeting,
with effect from the date determined by the Board and
advised to Shareholders once the Board is satisfied that any
steps necessary for implementation have been (or will be)
completed. If Resolution 1 is not passed then the Constitution
will not be amended as outlined above. In that case, the
Company will engage with Shareholders about next steps,
and the temporary cap on the size of the Fund is expected
to remain in effect until then, at least.
It is important you read the detail about the proposed
changes to the Company’s Constitution, as set out in
the Overview provided in Part Two, and the Explanatory
Notes set out in Part Three of this Notice of Meeting. This
will provide you with all the detail that you need to enable
you to vote on the special resolution set out above.

8
FONTERRA SPECIAL MEETING 2021
PART TWO
1. What you are voting on and why
You are being asked to vote on changes to Fonterra’s Constitution that enable a Flexible Shareholding structure.
At a high level this means that:
• the Share Standard of 1 share per 1 kgMS supplied would remain, but the minimum shareholding requirement would be set
at 33% of the Share Standard, or around 1 share per 3 kgMS supplied, and the maximum holding would increase to 4x the
Share Standard, so all farmer shareholders would have more flexibility around increasing and decreasing their shareholding
during their farming career;
• the Fonterra Shareholders’ Market (FSM) would continue to operate as a farmer-only market, and the Fonterra Shareholders’
Fund (the Fund) would remain capped so that shares would not be able to be exchanged into units by shareholders selling
them into the market on a day-to-day basis. The overall limit on the Fund size in the Constitution would reduce from 20%
to 10% of total shares on issue.
The Board unanimously recommends these changes to put us in the best position to deliver the value outlined in our strategy
and protect farmer ownership and control of our Co-op.
Given the Board’s unanimous recommendation and the support of 92% of the Co-operative Council, if the resolution is not
passed the Co-op will need to engage with shareholders about next steps, and the temporary cap on the size of the Fund is
expected to remain in effect until then, at least. As outlined in the May announcements, the Co-op will provide shareholders
with at least 6 months’ notice of any new date for compliance obligations to be met.
IMPORTANT NOTES:
The meeting on 9 December 2021 is intended to be the only meeting where shareholders will vote on proposed changes
to Fonterra’s Constitution before implementation of the Flexible Shareholding structure.
If the resolution is passed, the Co-op will continue to work on any necessary steps for implementation. It is not expected
that any further meetings of shareholders, or additional resolutions, would be needed. The Board would continue to keep
shareholders informed in relation to the likely date on which the amendments to the Constitution will come into effect.
The changes to the Constitution you are being asked to vote on now set out the parameters and protections for the
Flexible Shareholding structure.
• There will need to be more detailed rules, processes and procedures such as the rules and requirements for how
sharemilkers, contract milkers and farm lessors become associated shareholders, and in what circumstances shares
may be transferred when a shareholder ceases to supply the Co-op.
• Some of these details are yet to be determined and will continue to be developed (as appropriate) by the Board in
consultation with the Co-operative Council, and communicated to shareholders before any changes become effective.
• The detailed rules, processes and procedures may change from time to time to, for example, allow for new or
unforeseen circumstances. However, they will need to remain within the parameters and protections in the overall
framework of the Constitution that you are being asked to vote on now.

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FONTERRA SPECIAL MEETING 2021
2. Overview of Flexible Shareholding
This section describes how Flexible Shareholding will operate if it is approved by Shareholders at the Special Meeting.
Share Standard, Minimum Holding, Maximum Holding and Individual Limit
• The Share Standard of 1 share / 1 kgMS supplied, which has been a feature of our Co-op for many years, remains.
• The Minimum Holding (often referred to as the minimum shareholding requirement) is set at 33% of the Share Standard
(rounded down to the nearest whole number), which is around 1 share for every 3 kgMS.
–This provides flexibility for all farmers, which is critical to maintaining a sustainable milk supply, while ensuring all
supplying shareholders have some capital-backed supply.
• The Maximum Holding increases to 4x the 1:1 Share Standard.
–Lifting the cap on share ownership from the current 2x helps to ensure that there is more capacity for other farmers to
buy shares from those who want to sell.
–The Board retains the ability to reduce the Maximum Holding, but it has no current intention to do so.
• The Minimum Holding and Maximum Holding are still determined based on a rolling three-season average (or relevant
estimates where there is no average).
• Separate to the Maximum Holding, the overall limit on the number of shares any individual shareholder can hold on a
“relevant interest” basis, referred to as the Individual Limit, is tightened so that the limit (of 5% of the total shares in the
Co-op) applies to all shares held rather than only applying to dry shares.
• The total number of shares on issue in the Co-op is intended to stay within +/- 15% of the Share Standard in aggregate for
all supplying shareholders. The Board will monitor this under a policy and will consult with the Co-operative Council on the
terms of the policy.
Who could hold shares?
• The following types of farmers will be able to hold shares in our Co-op:
–Supplying shareholders - farmers who supply milk to our Co-op and meet our Terms of Supply. This type of farmer can
currently hold shares and is referred to in our Constitution as “a Shareholder that is supplying milk to the Company.”
–Associated shareholders - farmers who are associated with a supplying shareholder, being:
>Sharemilkers under a sharemilking arrangement with a supplying shareholder;
>Contract milkers under a contract milking arrangement with a supplying shareholder; and/or
>Farm lessors – that is dairy farmland owners who have leased their land to a supplying shareholder.
This recognises their connection to our Co-op, provides a pathway for our future supplying shareholders to buy shares
and supports liquidity in a farmer-only market.
–Ceased shareholders and their permitted transferees – a supplying shareholder or associated shareholder who
ceases can hold their shares for their applicable exit timeframe as set out further below. Supplying shareholders (but not
associated shareholders) who cease may transfer their shares to a related or associated party as a “permitted transferee”
as set out further below.
• We will still have only one class of share in the Co-operative, and we can still think of shares as:
–“wet shares” being shares up to the 1:1 Share Standard for a supplying shareholder
–“dry shares” being shares that are not backed by milk supply
• Supplying shareholders need to hold at least the new Minimum Holding of 33% of their Share Standard (subject to the
entry timeframes outlined below). Supplying shareholders may also hold additional wet shares up to their 1:1 Share Standard
and further dry shares, up to the 4x Maximum Holding in total. As the wet shares are backed by milk supply, supplying
shareholders can exercise votes on them (as they currently can).

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FONTERRA SPECIAL MEETING 2021
• Associated shareholders are not suppliers of milk to our Co-op under our Terms of Supply, so they will only hold dry shares.
This means that associated shareholders, like dry shareholders, will not be able to exercise any votes except where their
rights are proposed to be affected differently to wet shareholders, or other dry shareholders (which is not contemplated).
• Associated shareholders in respect of a farm can apply directly to the Co-op to own shares, provided the total held by all
associated shareholders in respect of that farm does not exceed 1x the milk supply from that farm.
–This means that where there is an associated shareholder in respect of farm, the total number of shares that may be held
in respect of that farm is 5x that farm’s milk supply.
• The amendments to the Constitution refer to separate rules setting out the specific criteria such as who would qualify as an
associated shareholder, the process to apply to be an associated shareholder and the process for allocation of shares. These
rules are still being developed and will be able to be changed from time to time but must remain consistent with the overall
framework of the Constitution. The rules will be made available to shareholders before any changes are effective.
• Supplying shareholders with more than one farm will no longer need to hold shares against specific farms, but they may
continue to do so if they wish.
–This means that instead of having a separate Common Shareholder Number (CSN) to register the Minimum Holding
and Share Standard for each farm, supplying shareholders could have a single CSN for all of their farms going forward.
Equally, supplying shareholders can retain separate CSN’s for each farm, if they prefer.
–Any dry shares held by associated shareholders are recorded against the relevant farm so that the Co-op can maintain
clear records.
–The supply of milk from each farm will still be treated separately for milk quality and supply purposes.
Entry timeframes, Share-Up Over Time and MyMilk Contracts and the Contract Fee for
Units Trust
• New supplying shareholders, or existing supplying shareholders who have a material increase in milk supply, can purchase
shares, or increase their shareholding, to achieve their 33% Minimum Holding over six seasons. In their first season, they are
required to hold 1,000 shares, with the remainder split evenly over the following five seasons (with the ability to buy more
shares earlier if a shareholder chooses to do so).
–The Board considers that this strikes a balance between flexibility and retaining a minimum requirement for supplying
shareholders to share up. At approximately 6.6% of supply in each of those five seasons, the compulsory investment to
supply the Co-op is significantly reduced compared to the current requirements.
–The Board can still set a timeframe for new or existing shareholders that is longer or shorter than the six seasons
(and can still adjust the number of shares that must be bought in each season). The Board currently intends to maintain
the position outlined above, but it is possible in the future that it may have to change this depending on the
circumstances at the time.
–New supplying shareholders who choose to purchase their Minimum Holding over six seasons are committed to supply
the Co-op for that period, although this is subject to any DIRA and other legal requirements. If the supplying shareholder
then purchases their Minimum Holding before the end of the six seasons, they are still required to supply the Co-op for
the six seasons, unless the Board decides otherwise.
• The existing Share-Up Over Time and MyMilk contract options are no longer offered. However the Co-op will honour all
existing contractual commitments. To make these contracts more consistent with the capital structure changes:
–The share-up obligations under existing Share-Up Over Time contracts would be reduced to reflect the
33% Minimum Holding
–The contract fee under all existing contracts would be set to zero for their remaining terms.
• Since the 2018/19 season, the contract fee under Share-Up Over Time and MyMilk contracts has been transferred to the
“Contract Fee for Units Trust”, which uses those fees to purchase units that are held on trust for, and distributed to, the
relevant supplying shareholder or MyMilk supplier when they need to share up. Under Flexible Shareholding:
–All units (and any cash) held on trust for supplying shareholders under a Share-Up Over Time Contract will be distributed
to them.

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FONTERRA SPECIAL MEETING 2021
–Units (and any cash) held on trust for MyMilk suppliers will be distributed to the supplier when they become a supplying
shareholder, which they can do at any time.
–If MyMilk suppliers choose not to transition to become a supplying shareholder at the end of their contract term, the
units (and any cash) held on trust will be forfeited to the Co-op.
–Once all units have been distributed or forfeited, the Contract Fee for Units Trust would also be wound up.
• Where a supplying shareholder’s obligation to purchase shares, whether under an existing contract or as a new supplier,
is treated as a contingent liability by the supplying shareholder’s bank, the Minimum Holding of 33% means that the
contingent liability reduces to 33% of what it would otherwise be under the current Constitution.
Exit timeframes
• Supplying shareholders have longer timeframes to hold onto or sell their shares once they have ceased supplying the Co-op.
–All supplying shareholders on the date of the Special Meeting, and who subsequently cease to supply the Co-op by giving
not less than three months’ notice prior to the start of the season in which the cease would be effective, will have up to
15 seasons to sell their shares, reducing by one season each year to 10 seasons from 1 June 2027. The Board can adjust
these timeframes depending on the circumstances at the time – as noted further below in this section.
–All new supplying shareholders who join after the date of the Special Meeting and who subsequently cease to supply the
Co-op by giving not less than three months’ notice prior to the start of the season in which the cease would be effective,
will have up to five seasons to sell their shares.
–Currently, supplying shareholders who cease but do not give the Co-op at least three months’ notice prior to the start
of the season in which the cease is effective, have to sell their shares by the next compliance date. Often these are
unplanned, such as mid-season farm sales. The Board will have a new discretion to determine whether these exiting
shareholders would be eligible for the above timeframes to sell their shares. The rules setting out the criteria for the
exercise of this discretion from time to time are still being developed, and will be able to be changed from time to time,
within the overall framework of the Constitution. The rules will be made available to shareholders before any changes are
effective.
–All ceased shareholders who gave the Co-op not less than three months’ notice prior to the start of the season in which
the cease was effective and who still hold shares on the date of the Special Meeting will have up to the compliance date
in the season ending 31 May 2037 (being 15 seasons) to sell their shares. Any shareholders who have ceased since 28
February 2021 and did not give the Co-op three months’ notice will be advised of whether they are eligible for the above
timeframes applying the criteria outlined above.
The above timeframes give all existing shareholders greater choice about how long they retain an investment in our Co-op
after they cease and should help reduce any shorter-term sell-side pressure that may arise from the changes. This is intended
to reflect feedback that existing farmer shareholders should be given a longer timeframe to sell, recognising that they would
be impacted by the move to a restricted market.
• Associated shareholders will have up to three seasons to sell shares, once they cease to be associated with a
supplying shareholder.
–This shorter timeframe is intended to reflect that they are not the supplier of milk to the Co-op, while providing some
flexibility to allow for adjustments when they switch to a different supplying shareholder.
• The proportion of shares in the Co-op held by ceased shareholders and permitted transferees is not intended to exceed
25% of total shares. This 25% threshold is in the Constitution. The Board will monitor this threshold under a policy and will
consult with the Co-operative Council on the terms of the policy.
• The Board can still set timeframes that are longer or shorter than the periods noted above (and can adjust the number
of shares that must be sold in each season). The Board can also change the timeframes and number of shares for any
shareholder that has already ceased.
• While the Board currently intends to maintain the timeframes outline above, it is possible that it may have to change one or
more of them in the future depending on the circumstances at the time. For example, in the unlikely event that the proportion
of shares held by ceased shareholders or their transferees exceeds the 25% of total shares on issue, the Board may reduce the
timeframes in a way that applies fairly to shareholders who had already ceased and those who cease going forward.

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FONTERRA SPECIAL MEETING 2021
Permitted transfers when leaving our Co-op
• Supplying shareholders leaving the Co-op can transfer their shares to a person approved by the Co-op who is related to
or associated with them:
–if it is completed by the end of the first season in which the supplying shareholder ceases supplying the Co-op; or
–at any time in the event of the death of the supplying shareholder, or a member of a partnership, trustee or shareholder
of that supplying shareholder.
• The amendments to the Constitution refer to separate rules for how this will work including the types of people or entity that
would qualify as related to or associated with a supplying shareholder, the types of supporting documentation required, and
ongoing certification requirements to ensure the permitted transferee remains related to or associated with the supplying
shareholder. These rules are still being developed, and will be able to be changed from time to time, within the overall
framework of the Constitution. The rules will be made available to shareholders before any changes are effective.
• Associated shareholders do not have these same rights because they are not the supplying shareholder and they are
required to sell down their shares over a shorter exit timeframe. However, the existing provisions for shares to pass with the
estate of a deceased shareholder still apply to associated shareholders.
Voting rights
• Voting rights stay the same as they are today – that is based on both milk supply and shares in our Co-op, at a ratio of 1 vote
per 1,000 kgMS of share-backed supply in the previous season. This means that to the extent a supplying shareholder
chooses to reduce their shareholding below the 1:1 Share Standard, their voting rights would also reduce.
Vouchers
• Vouchers are cancelled as part of the proposed changes. Supplying shareholders who currently hold vouchers are not
required to purchase more shares, because vouchers have only been able to count towards a maximum of 25% of the Share
Standard. With a reduction in the Minimum Holding to 33% of the Share Standard, those supplying shareholders still hold
shares well in excess of the new Minimum Holding. Those supplying shareholders lose the voting entitlement that their
vouchers currently count towards, which is consistent with the position on voting outlined above. They would need to
acquire further shares (up to the 1:1 Share Standard) to be able to exercise full voting rights on their share-backed supply.
Where voucher holders already also hold additional dry shares, the dry shares would automatically start being counted as
wet shares up to the 1:1 Share Standard.
Tax impacts
• Dividends or other distributions paid on wet shares held by a supplying shareholder are still tax-deductible for the Co-op.
Depending on how many wet shares are held by shareholders as a result of the 33% Minimum Holding, there may be an
impact on the Co-op’s tax profile.
• Shareholders are still required to account for these dividends or distributions as income and pay income tax depending on
their own tax status.
The Fonterra Shareholders’ Market (FSM)
• Shares are still traded between farmer shareholders in the FSM. However, shares are not able to be exchanged into units in
the Fonterra Shareholders’ Fund (Fund) on a day-to-day basis in the same way as they were before the temporary cap on the
Fund in May. This is to protect farmer ownership and control of the Co-op because the overall limit on the Fund size could
otherwise be exceeded relatively quickly with Flexible Shareholding.
• The price of shares in the FSM will reflect the prices at which farmer shareholders buy and sell shares. Shares are likely to
trade at a discount to the price for units in the Fund, because they can no longer generally be exchanged into units in the
Fund. The FSM is therefore restricted to farmers and the likely discount reflects that restricted market. However, the FSM
remains a fully regulated and functioning market with a large number of participants.

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FONTERRA SPECIAL MEETING 2021
• Arrangements will be put in place to support liquidity in the FSM including:
–A registered volume provider or market maker will provide buy and sell quotes for shares in the FSM within certain price
limits and timeframes so that there is a price available for shares to be traded.
–The Co-op will allocate up to $300m to support liquidity as farmer shareholders transition to the new structure, through
an on-market share buy-back programme, which would reduce the total number of shares on issue, and potentially other
tools such as market maker arrangements.
–The Co-op may provide additional financial support through a market maker where appropriate.
• Flexible Shareholding is intended to provide farmers with greater flexibility in share ownership to meet the circumstances
of their farming career. It does not mean that all farmers who hold 100% of the Share Standard (or more) will sell their
shareholding in the Co-op so that they only hold 33% of their Share Standard.
The Fonterra Shareholders’ Fund
• The Fund remains in place, preserving capital, and preserving the ability for non-farmers to invest in the economic rights
of a share in our Co-op by purchasing units in the Fund.
–The Fund gives those in our wider community an opportunity to invest in the New Zealand agri-food sector and share
in our Co-op’s future.
–It provides a reference for how outside investors value the economic rights in a share.
–Maintaining the Fund listed on the NZX supports research coverage of the Fund and Fonterra’s performance, which
is useful for both shareholders and unit holders.
• The current overall limit on the size of the Fund in the Constitution reduces from 20% to 10% and shares are not able to
be exchanged into units as part of day-to-day trading as they were prior to the temporary cap in May. The Board will monitor
this overall limit under a policy and will consult with the Co-operative Council on the terms of the policy.
• While the actual size of the Fund is currently around 6.7% of total shares on issue, it could change from time to time.
This includes:
–If the total shares on issue change, for example, through the on-market share buy-back programme or a dividend
reinvestment plan. By way of example, if the current total shares on issue reduced by 100 million shares, with no change
to the number of shares in the Fund, the Fund size would increase by about 0.5%.
–Decreases in the Fund size if farmer shareholders holding units convert those units into shares.
–Changes in the Fund size arising as a result of any market maker arrangements the Co-op enters to support liquidity
in the FSM.
–If, in the future, the Board considered it was appropriate to increase the Fund size, it could do so subject to the overall
limit of 10%.
• Additional protections are included in the Constitution to prevent shareholders from transferring their economic interests
in shares to third parties (other than where genuine reasons exist such as security for lending) and to prevent unauthorised
funds from being established.
• The Board may still choose to buy back the Fund in the future.
If you have any questions on these materials, please feel free to discuss them with your rural professional advisers or your
Area Manager. For any questions about your own financial circumstances or your holding of shares or units, please contact
your accountant, lawyer, financial advisor or other rural professional.

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FONTERRA SPECIAL MEETING 2021
3. What has changed since the
September booklet
The following changes have been made to the Flexible Shareholding structure since the revised proposal was announced in
September. These changes have resulted from feedback from shareholders and further consultation with the Co-operative
Council and the independent directors of the management company for the Fund.
Constitutional Thresholds / Policy
• The following thresholds have been added to the Constitutional parameters for the Flexible Shareholding structure, to
support alignment of share ownership and milk supply. The Board will monitor these thresholds under a policy and the Board
will consult with the Co-operative Council on the terms of the policy.
–The total number of shares on issue in the Co-op is intended to stay within +/- 15% of the Share Standard in aggregate
for all supplying shareholders.
–The proportion of shares in the Co-op that are held by ceased shareholders and permitted transferees is not intended to
comprise more than 25% of total shares.
Associated Shareholders
• The way dry shares are allocated to associated shareholders has been updated and simplified to make it easier for Associated
Shareholders to apply to hold dry shares.
• Associated shareholders can apply directly to the Co-op to hold up to 1x the milk supply from the Farm. This replaces the
September proposal which required sharemilkers, contract milkers and farm lessors to get their supplying shareholder to
allocate a part of the supplying shareholder’s dry shares up to the Maximum Holding to them.
• This change means that where there is an associated shareholder, the total number of shares that could be held in respect
of a single farm is 5x that farm’s milk supply (rather than 4x milk supply, which is what the September booklet proposed).
• Also, in the September booklet there was the ability for sharemilkers who are associated shareholders to apply to have their
shares count towards the Minimum Holding in limited circumstances. This has now been removed from the proposal.
Capped Fund Size
• The overall limit on the size of the Fund in the Constitution would be reduced from 20% to 10%, rather than a total ban on
any further shares being exchanged into units. Shares will still not be able to be exchanged into units on a day-to-day basis –
the Board retains its current rights to regulate this process.
• Reducing the overall limit on the size of the Fund in the Constitution from 20% to 10% recognises that the Fund size is
currently around 6.7% of total shares on issue, but that this percentage could change from time to time subject to the overall
limit of 10%, for example:
–If the total shares on issue change, for example, through the on-market share buy-back programme or a dividend
reinvestment plan.
–If farmer shareholders holding units convert those units into shares.
–As a result of any market maker arrangements the Co-op enters to support liquidity in the FSM.
–If, in the future, the Board considered it was appropriate to increase the Fund size, it could do so up to the overall limit
of 10%.
• The Board will still monitor this overall limit of 10% under a policy, and will consult with the Co-operative Council on the
terms of the policy.
Ceased Shareholders who have not provided 3 months’ notice
• The Board has a new discretion to allow ceased shareholders who have not provided the required 3 months’ notice prior to
ceasing to still hold their shares for the relevant extended exit timeframes. Currently, shareholders who do not provide this
notice are required to sell all of their shares by the next compliance date. The discretion would be exercised in accordance
with Board approved rules setting out the criteria the Board would consider, which could be changed from time to time, when

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FONTERRA SPECIAL MEETING 2021
exercising the discretion. The criteria could include factors such as how long the ceased shareholder has supplied the Co-op,
whether the ceased shareholder has facilitated the continuation of the milk supply to the Co-operative and whether there
are any other particular circumstances of the ceased shareholder that are relevant.
Invest As You Earn
• Some shareholders have asked whether there would be any ability for the Co-op to purchase shares on their behalf by
deducting an amount from their monthly milk payments. This would be similar to the “Invest As You Earn” financial
tool where the Co-op purchased units on behalf of farmers by deducting an amount from the farmer’s milk payments. If
shareholders vote in favour of the resolution, the Co-op would look to make this available as soon as possible after the
changes become effective.
Co-operative Principles
The Co-operative Council has proposed that if farmers vote in favour of the Flexible Shareholding structure the Co-operative
Principles should be reviewed for consistency with the Constitution. The particular principles the Co-operative Council has
identified as potentially needing revision are:
Principle 1: Shares in Fonterra can only be acquired by persons supplying milksolids to Fonterra
– To allow for Associated Shareholders and Permitted Transferees who are not suppliers of milksolids to the Co-op
Principle 3: Supplying shareholders must comply with the Co-operative Share Standard in respect of their milk solids
supplied
– To allow for the Share Standard remaining at 1:1 with the minimum requirement at 33% of the Share Standard
Principle 4: Control of Fonterra is exercised by its supplying shareholders who have voting rights in proportion to their
total milksolids supplied
– To clarify that voting rights are proportional to share-backed milksolids (which is the current position)

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FONTERRA SPECIAL MEETING 2021
4. When the proposed changes would
be effective
The proposed changes would be effective on a date notified by the Board to shareholders once the Board is satisfied any steps
necessary for implementation have been (or will be) completed.
At this stage the Board is aiming for an effective date of the start of next season, being 1 June 2022. If that date is not achieved,
the changes could be effective sometime during the next season, or later if needed.
Compliance obligations would remain on hold until at least 6 months after the changes are effective to allow shareholders
a reasonable time to adjust to the new structure.
Legislative Changes
We have been consulting with the Government for a number of months on proposed changes to our capital structure and what
the changes might mean under DIRA.
We are aligned with the Government on the importance of ensuring the Co-op operates as a strong, intergenerational, farmer-
owned dairy processor, and that a successful and innovative Co-op is central to a well-functioning dairy industry.
A copy of a letter from the Minister of Agriculture outlining the Government’s views on our capital structure as at 3 November
2021 is provided at the back of this Notice of Meeting. In that letter, the Government has indicated that at this stage it would
be difficult for it to support an amendment to DIRA to facilitate Flexible Shareholding, and we understand that the Government
is prepared to work with us to arrive at a mutually acceptable outcome.
We acknowledge the Government’s current position, but believe the Flexible Shareholding structure is the best option for
maintaining a strong intergenerational farmer-owned Co-op of scale.
Accordingly, if shareholders vote in favour of the Flexible Shareholding structure, we will continue to work with the Government
over the coming months to achieve a mutually acceptable outcome.
Up to $300m Liquidity Support
When the changes are effective, there may be a small subset of farmers that come under pressure to sell those shares which they
are no longer required to hold in order to supply the Co-operative. Depending on the number of shares, selling by those farmers
could result in downward pressure on the share price in the months after moving to the new capital structure.
Recognising this potential impact on trading in the FSM, the Co-op would allocate up to $300 million to support liquidity in the
market as farmer shareholders transition to the new structure, starting when the changes become effective.
This would be through an on-market share buy-back programme, which would reduce the total number of shares on issue, and
potentially other tools such as market maker arrangements. The Co-op would only exercise these options in order to support
liquidity where there is an imbalance between the number of shares that farmers shareholders want to sell and buy, and where
the price represents value to the Co-op and is in the best interests of shareholders.
Shareholders would know when the Co-op has bought back shares on the market, because the Co-op would be required to
disclose details such as the number of shares bought and the average price.

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FONTERRA SPECIAL MEETING 2021
PART THREE
Constitution Changes and
Explanatory Notes
The Board is putting Resolution 1 to Shareholders at the Special Meeting on Thursday 9 December 2021 to approve
amendments to the Constitution to give effect to the Flexible Shareholding capital structure.
A full copy of the Constitution is set out in the first column of the table below showing the specific amendments in blue (for
additions) and red (for deletions). The specific explanatory notes for each amendment are set out in the second column of the
table below, and there are further explanatory notes and commentary provided in Part Two of the Notice of Meeting.
The base version of the Constitution shown in this Part Three is current as at the date of this Notice of Meeting – it does not
reflect the separate changes that are proposed in the Notice of Meeting for the Annual Meeting. If some or all of the changes
proposed in the Notice of Meeting for the Annual Meeting are passed at that meeting, the final Constitution as amended
by Resolution 1 (when it takes effect as described below) will reflect those other changes as well. A consolidated version of
the Constitution would be prepared at the point that Resolution 1 takes effect and made available to Shareholders, showing
all of the changes together.
The explanatory notes in the second column below do not form part of the Constitution, and if Resolution 1 is passed, the
resulting form of Constitution will exclude the explanatory notes contained in that column.
If Resolution 1 is passed by the requisite majority of 75 per cent or more of votes cast by Shareholders entitled to vote and
voting on the resolution, the Constitution will be amended as set out below, with the amendments being effective on and from
the date to be advised by the Board once it is satisfied that any necessary changes to legislation have been (or will be) obtained
in a form that the Board (in its discretion) considers to be appropriate.
If Resolution 1 is not passed then the Constitution will not be amended as outlined above. However, in that case, the Co-op will
engage with Shareholders about next steps, and the temporary cap on the size of the Fund is expected to remain in effect until
then, at least.
Amendments to Constitution Explanatory Notes
PART A – CO-OPERATIVE PRINCIPLES OF COMPANY
1. PURPOSE AND PRINCIPAL ACTIVITIES
1.1 Continuation of co-operative activity: The Company is registered as a
co-operative company under the Co-operative Companies Act and intends to
continue its business as a co-operative dairy company.
1.2 Purpose: The purpose of the Company in carrying out its business is to maximise
the wealth of its Shareholders by:
(a) the sale of their Milk;
(b) providing a purchaser of that Milk; and
(c) enhancing the value of the Company as a co-operative.
1.3 Principal activities: The principal activities of the Company are:
(a) the manufacture and sale of butter, cheese, dried Milk, or casein, or any
other product derived from Milk or Milksolids supplied to the Company by
its Shareholders;
(b) the sale to any person of Milk or Milksolids supplied to the Company by its
Shareholders; or
(c) the collection, treatment, and distribution for human consumption of Milk
or cream supplied to the Company by its Shareholders.
1.4 No restriction on activities: Clause 1.3 does not limit, or impose a restriction on,
the activities of the Company.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
1.5 Fonterra Shareholders Market: Co-operative Shares may, on and from a date
determined by the Board, be quoted and traded on the Fonterra Shareholders
Market. At all times while Co-operative Shares are quoted and traded on that
Market the Company will comply with the Market Rules, subject to:
(a) the requirements of the Act, the Co-operative Companies Act, and any other
applicable legislative or regulatory requirements; and
(b) the terms of any Ruling given by the Operator.
1.6 Authorised Fund: The primary purpose of the arrangements in clause 7 is to
facilitate regulate the operation of the Authorised Fund,:
(a) liquidity in relation to the trading of Co-operative Shares; and
(b) the ability of Shareholders to exchange some or all of the rights or interests
in Co-operative Shares for securities issued by an Authorised Fund, and vice
versa,
but subject always to the rights, powers and limitations contained in this
Constitution (including in clause 7).
This amendment reflects the cap
on the size of the Fund.
2. SHAREHOLDERS
2.1 Applications for supply: Any person that intends to commence the supply of Milk
to the Company shall give written notice of that intention to the Company and
complete such application in the form and by the time the Board may from time to
time determine in a manner consistent with any applicable enactment.
No change. This clause provides
for parties that are supplying
Milk to the Co-op (and therefore
subject to the Terms of
Supply) to apply to become a
Shareholder.
This could include a Sharemilker
that is supplying Milk to the
Co-op. Sharemilkers that do
not supply milk directly to the
Co-op will be able to become
“Associated Shareholders” under
clause 2.2(b).
2.2 Irrevocable application:
(a) The supply by any person of Milk to the Company is an irrevocable application
by that person to become a Shareholder and to hold the number of Co-
operative Shares from time to time required under this Constitution by the
Share Standard, or by the Board under clause 3.21, as applicable.
(b) A Farm Lessor, Sharemilker or Contract Milker may apply to become an
Associated Shareholder, and to hold Co-operative Shares (subject to any
limitations in, and otherwise in accordance with, any rules adopted by the
Board or from time to time applicable).
These amendments provide
flexibility for suppliers to hold
the 33% Minimum Holding,
rather than the Share Standard.
They also remove the redundant
reference to clause 3.21, which
is superseded by the reduced
Minimum Holding.
Farm Lessors, Sharemilkers and
Contract Milkers may also apply
to become Shareholders (to the
extent permitted by the rules
referred to here), even though
they are not the “supplier”
of Milk to the Co-op – rather
they have been grouped as
“Associated Shareholders” of a
Shareholder that is supplying
Milk to the Co-op.
The Minimum Holding will
remain the responsibility of the
supplying Shareholder.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
2.3 Board may accept application:
(a) Subject to clause 2.3(b), the Board may in its absolute discretion decide:
(i) whether or not to accept an application by a person to become a
Shareholder made in accordance with clause 2.2 or any application
procedure which the Board may from time to time determine; and
(ii) whether or not to accept the supply of Milk from any person, on such
terms and conditions as the Board thinks fit, without requiring that
person to become a Shareholder in respect of that supply.
The application procedures
would be updated to cover
Farm Lessors, Sharemilkers and
Contract Milkers applying to
become Shareholders.
(b) In respect of applications for the supply of Milk to the Company that are
made on or after 1 June 2023, the Board will (subject to clause 2.4) accept
an application by a person to supply Milk to the Company from any Farm
from which, at the time of the application, Milk is supplied to the Company,
provided that the Board is satisfied that the applicant and the relevant Farm
comply with the Terms and Conditions. This clause 2.3(b) will cease to apply
on the first date that subpart 5 of Part 2 of the Dairy Industry Restructuring
Act 2001 is repealed or otherwise ceases to apply to the Company.
2.4 Board may not admit certain persons: The Board may not only admit, as a
Shareholder, any person:
(a) whose supply or estimated supply of Milksolids obtainable from Milk to be
supplied to the Company by that person in a Season is not less than 1,000
kilograms of Milksolids or such minimum level of supply as determined from
time to time by the Board, being a level not more than 15% greater than the
level applying in the preceding Season; or
(b) who is an Associated Shareholder Sharemilker
who has not been approved by
the Board as a Shareholder in accordance with either any rules established by
the Board from time to time or any applicable enactment; or
(c) who is a Permitted Transferee of a Shareholder.
These amendments are to
express the requirements
positively rather than negatively,
and to confirm that Associated
Shareholders (ie Farm Lessors,
Sharemilkers, Contract Milkers)
and Permitted Transferees
(direct relatives, partners,
shareholders etc of ceased
Shareholders, and entities
controlled by them) may be
admitted as Shareholders
if they meet the applicable
requirements, even though they
do not supply Milk to the Co-op.
Sharemilkers have a statutory
right under section 44 of the
Co-operative Companies Act to
become Shareholders in some
situations. Their rights under
that “enactment” are preserved
here.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
2.5 [Not used] Separate designation for supplies from each Farm: The supply of
Milk to the Company from each Farm shall be treated as a supply from a separate
Shareholder, and the Company shall take appropriate steps to ensure the Co-
operative Shares relating to the supply from each such Farm are registered
separately in the Share Register and other applicable records of the Company.
This is being removed to allow
Shares to be registered at a
Party level (which is the default
under the Companies Act, so
no specific provision is needed).
Associated Shareholders would
have their Shares registered in
their own names, as a separate
Shareholder.
This means CSN numbers
could be issued at the Party
level rather than the Farm
Supply Number level. Milk
supply, quality and similar
matters would continue to be
determined on a Farm by Farm
basis.
2.6 Requests for separate designation for suppliers from same Farm: A Shareholder
may request the Company to treat the supply of Milk from the same Farm as split
between supply by two or more persons in accordance with any rules established
by the Board from time to time and, subject to clause 2.7, the Company shall take
appropriate steps to ensure the Co-operative Shares relating to each such separate
supply are registered separately in the Share Register and other applicable records
of the Company.
2.7 Requests for acceptance of supply as not being from a Shareholder: A
Shareholder may request the Company to accept one or more of the supplies of
Milk described in clause 2.6 as being a supply from a person not required to become
a Shareholder in respect of that supply, and that request shall be determined by the
Board in accordance with clause 2.3(a)(ii).
2.8 Identification of separate supply: For the purposes of clauses 2.5,
2.6 and 2.7 a
Farm or separate supply from a Farm shall be identified in such reasonable manner
as the Board determines shall most effectively ensure that the Company may
treat supply from that Farm as being separate and distinct from any other Farm,
or from other Milk supplied from that Farm, in the case of clauses 2.6 and 2.7, for
operational, Milk quality and commercial purposes. The initial identification shall,
in the Company’s discretion, be by reference to the Farm supply number, party
number, farm grouping number, Farm tank number or such other identifier as the
Company may specify or by which that Farm or that separate supply is identified in
the records of the Company for the time being.
Clause 2.5 is being removed to
allow Shares to be registered at
a Party level – see comments
above.
3. CO-OPERATIVE SHARE STANDARD
3.1 Obligation of Shareholders to hold a number of Co-operative Shares: Subject to
the provisions of this clause 3 each Shareholder supplying Milk to the Company in a
Season shall hold a number of Co-operative Shares for that Season:
(a) not less than the number of Co-operative Shares (“Minimum Holding”)
required under equal to 33% of the Share Standard for that Season; and
This amendment specifies that
the Minimum Holding will be
33% of the Share Standard,
rather than being equal to the
Share Standard (ie 100%).

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
(b) not greater than a number of Co-operative Shares (“Maximum Holding”)
which is equal to the number of Co-operative Shares derived (subject to
clauses 3.2 and 3.3 3.4) by multiplying the number of Co-operative Shares
(determined in accordance with the Share Standard for that Season, rounded
down (where necessary) to the nearest whole number of Co-operative Shares)
that the Shareholder is required to hold under subclause (a) above, by a factor
(“Limiting Factor”) specified by the Board from time to time and being not
less than one and not more than two four,
provided that no Shareholder may at any time hold, or have Relevant Interests in, a
number (“Individual Limit”) of Co-operative Shares such that:
(c) the total number of Co-operative Shares which the Shareholder holds, or has
Relevant Interests in; less
(d) the number of Co-operative Shares which that Shareholder is required to hold
under clause 3.1(a),
exceeds 5% of the total number of Co-operative Shares then on issue in the capital
of the Company (excluding any Co-operative Shares which are, at the relevant time,
on issue but have been surrendered to, or have been acquired by, the Company, and
have not been cancelled).
This amendment increases the
maximum number of Shares
that a supplying Shareholder
may hold to 4x the Share
Standard (up from the current
2x). The “Share Standard”
remains defined as the number
of shares that 100% backs milk
supply. Clause 3.4 sets out the
shareholding provisions for
Associated Shareholders.
The Individual Limit is being
tightened to cap any individual
Shareholder’s total interests in
Shares (on a relevant interest
basis) at 5%, including wet and
dry shares. Currently, it only
applies to dry shares.
3.2 Aggregate Threshold: Notwithstanding the provisions of clause 3.1(b), if at any
time:
(a) the aggregate number of Co-operative Shares then on issue in the capital
by
of the Company (excluding treasury stock) is greater or lesser than in
excess of the aggregate Share Standard for all number of Co-operative Shares
required to be held by Shareholders under clause 3.1(a) (irrespective of the
period of time within which Shareholders may acquire such Co-operative
Shares) exceeds by a factor of more than 15% (“Aggregate Threshold”) of
the aggregate number of Co-operative Shares then on issue (excluding any
Co-operative Shares which are, at the relevant time, on issue but have been
surrendered to, or have been acquired by, the Company, and have not been
cancelled); or
The Aggregate Threshold will
be retained, but with a plus
or minus 15% target range
for shares on issue relative to
overall milk supply. Shares held
by the Co-op in itself (known
as “treasury stock”) would be
excluded from the calculation.
The Board will monitor this
under a policy and will consult
with the Co-operative Council
on the terms of that policy – see
clause 16.10.
(b) the Board specifies a Limiting Factor under clause 3.1(b) which is less than the
previously operative Limiting Factor,
The ability for the Board to
reduce the Maximum Holding
would also be retained. (These
provisions only need to deal
with reductions, not increases,
because increases to the
Maximum Holding would not
require Shareholders to sell
Shares as contemplated in (d)
below.)
then the Board:
(c) where subclause (a) applies, shall take such steps and do such things, within
such timeframes as the Board considers appropriate, to increase or reduce
the total number of Co-operative Shares on issue by the Company (excluding
treasury stock) to a number which is less than
within the Aggregate Threshold;
and
As above, the Aggregate
Threshold will be retained,
but with a plus or minus 15%
target range for shares on issue
relative to overall milk supply.
Shares held by the Co-op in itself
(known as “treasury stock”)
would be excluded from the
calculation.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
(d) where subclause (b) applies, may by notice in writing to any Shareholder
who at the relevant time holds Co-operative Shares in excess of the number
permitted by the most recently specified Limiting Factor under clause 3.1(b),
require such Shareholder to dispose of a number of Co-operative Shares which
is in excess of that limit, and the Shareholder must dispose of the relevant
Co-operative Shares within a period specified by the Board (not being less
than 10 Working Days after the date of the Board’s notice), and the provisions
of clause 4.3 and (if the Shareholder does not comply with a notice given
under clause 4.3(c)) clause 4.4 shall apply.
As above – this provision is still
relevant to circumstances where
the Board reduces the Maximum
Holding factor below 4x supply.
3.3 Interrelationship of limits: Notwithstanding the restrictions in clauses 3.1(b) and
3.2 above,:
(a) the Board may from time to time specify a percentage limit which, for such
period as the Board may determine, is to apply instead of the Aggregate
Threshold referred to in clause 3.2 and any percentage specified under this
subclause (a) (“Target Percentage”) shall be deemed to be the Aggregate
Threshold unless or until the Board specifies a further Target Percentage
under this subclause (a);
(b) no Target Percentage specified under subclause (a) shall exceed the Aggregate
Threshold specified in clause 3.2; and
(c) if at any time the total number of Co-operative Shares on issue by the
Company exceeds is outside the Aggregate Threshold:
(i
a) all the number of Co-operative Shares in excess of the Aggregate
Threshold (“Extra Shares”) shall remain validly issued;
(ii
b) the rights and powers conferred by Co-operative Shares the Extra Shares
shall not be affected; and
(iii
c) no person shall be entitled to take any action (whether against, or in
respect of, the Company, any Director, or any Shareholder) in respect
of the total number of Co-operative Shares on issue being outside the
Aggregate Threshold issue or holding of such Extra Shares, and none of
the Company, any Director, nor any Shareholder shall have any liability
to any person in respect of the issue or holding of such Extra Shares total
number of Co-operative Shares on issue being outside the Aggregate
Threshold.
Instead of the Board having
discretion to adopt a narrower
target range for the Aggregate
Threshold under these
provisions, the Board would
adopt a Risk Management Policy
(in consultation with the Co-
operative Council), as referred
to in clause 16.10, regarding the
total number of Shares on issue
and the proportion of Shares
that are not held by Shareholders
that supply Milk to the Co-op
(including the proportion of
Shares that are held for the
Fund).
The existing provisions for the
situation where the Aggregate
Threshold is exceeded would
continue to apply. These
provisions would also be
extended to cover the situation
where the number of Shares was
below the Aggregate Threshold
range.
3.4 Share Standard: Subject to clauses 3.6, 3.9 and 3.10, the Share Standard applicable
to a Shareholder for each Season shall be one Co-operative Share for each kilogram
of Milksolids obtainable from the Average Quantity of Milk determined by the
Board in relation to that Shareholder (excluding Milk supplied on Contract Supply),
provided that:
(a) Shareholders may elect to hold at least the Minimum Holding (if any)
applicable to them, rather than holding the full Share Standard;
(b) the Share Standard and Minimum Holding for an Associated Shareholder shall
be zero; and
(c) the Associated Shareholder(s) of a Shareholder supplying Milk to the
Company may (subject to any limitations in, and otherwise in accordance
with, any rules adopted by the Board and applicable from time to time)
apply to the Company for approval to acquire and (if approved) hold Co-
operative Shares up to an overall maximum number (in aggregate for all
that Shareholder’s Associated Shareholders) equal to the Share Standard
applicable to that Shareholder in respect of the relevant Farm(s), or any lesser
number of Co-operative Shares which may from time to time be permitted or
provided for in those rules.
The Share Standard of 1 share
/ 1 kgMS supplied, which has
been a feature of our Co-op for
many years, remains. However,
Shareholders may choose to hold
a reduced “Minimum Holding”
under clauses 3.1(a) and 3.4(a).
Associated Shareholders are
not required to hold any Shares.
A supplying Shareholder’s
Associated Shareholders may
apply to hold Shares up to 1x the
supplier’s milk supply from the
relevant Farm(s) in total, subject
to the rules referred to here.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
The Company may, at any time, disclose the number of Co-operative Shares held
or permitted to be held by, and/or the Share Standard of, a Shareholder and its
Associated Shareholder(s) in respect of the relevant Farm(s), to each of them.
(a) the Board may from time to time permit the Share Standard to be satisfied
through the holding of both Co-operative Shares and certificates or other
instruments issued by (or for) an Authorised Fund in relation to any Co-
operative Shares which are, at that time, the subject of Fund Arrangements
entered into by the Shareholder under clause 7; and
(b) if and to the extent that the Board permits the Share Standard to be satisfied
in the manner provided in subclause (a), each reference in this Constitution to:
(i) a minimum number or maximum number of Co-operative Shares
required to be held, or permitted to be held, by a Shareholder shall
(to the extent permitted by the Board) include such certificates or
instruments; and
(ii) the number of Co-operative Shares held by a Shareholder (including
for the purposes of determining voting or other entitlements of that
Shareholder) shall, to the extent permitted by the Board, include such
certificates and instruments.
The Co-op would have the
ability to disclose these key
shareholding parameters to the
supplying Shareholder and any
Associated Shareholder.
The deleted subclauses (a) and
(b) permitted Vouchers to count
towards the Share Standard.
This deletion means that all
Vouchers would immediately
cease to count. Because the
Minimum Holding is being
reduced to 33% at the same
time, no Shareholders would
need to buy additional Shares as
a result of cancelling Vouchers,
but they would lose the votes
associated with those Vouchers
unless they already hold
additional dry Shares or acquire
more Shares.
3.5 Average Quantity: Subject to clauses 3.6, 3.9 and 3.10, the Average Quantity shall,
in relation to the Farm from which a Shareholder is to supply Milk to the Company,
be the quantity determined by the Board as being of the average of:
(a) the quantity of Milk supplied by the Shareholder from that Farm to the
Company during the Season immediately preceding the Season to which the
Share Standard applies;
(b) the quantity of Milk supplied by the Shareholder from that Farm to the
Company in the Season immediately preceding the Season referred to in
subclause (a); and
(c) the quantity of Milk supplied by the Shareholder from that Farm to the
Company in the Season immediately preceding the Season referred to in
subclause (b).
No change – the Share Standard
(off which the Minimum Holding
and Maximum Holding are
calculated) will continue to
be determined using a rolling
three-Season “Average Quantity”
of Milk as calculated under this
clause.
3.6 Estimate: Where:
(a) a Shareholder has not supplied Milk to the Company in any one or more of the
three Seasons immediately preceding the relevant Season; or
(b) the Board determines, for any other reason, that the mechanism in clause 3.5
is inappropriate with respect to that Shareholder,
the Board may require the Shareholder to provide an estimate of the quantity of
Milk which it expects to supply to the Company in the relevant Season and the
Board may, having regard to any such estimate provided by the Shareholder, specify
a quantity which will be deemed to be the Average Quantity for that Shareholder.
The Board’s determination on that issue shall, absent manifest error, be conclusive
and binding.
No change – the Board will
retain its ability to use an
estimate of kgMS supplied for
the purposes of the calculation
of the “Share Standard” (and
hence the “Minimum Holding”
and “Maximum Holding”).

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
3.7 Reliance on information: In:
(a) specifying a quantity under clause 3.6;
(b) issuing any determination (or re-determination) under clause 3.8; or
(c) otherwise exercising its powers under this Constitution,
the Board may rely on any information or estimate of supply provided to it by a
Shareholder, and the Board may, but shall not be required to, reissue any statement
or alter any determination previously made by it in relation to the number of
Co-operative Shares which the Shareholder is required, or permitted, to hold under
this Constitution where any such information or estimate is subsequently shown to
have been inaccurate or has failed to take in to account any particular circumstance
or contingency.
No change – the Board will
retain its ability to use an
estimate of kgMS supplied for
the purposes of the calculation
of the “Share Standard” (and
hence the “Minimum Holding”
and “Maximum Holding”).
3.8 Company may re-determine: The Company may at any time during a Season
determine, or re-determine, the Minimum Holding and Maximum Holding
applicable to a Shareholder for that Season under clauses 3.1(a) or clause 3.1(b)
respectively, and any such determination (or re-determination) may differ from the
number of Co-operative Shares previously determined as the Minimum Holding or
Maximum Holding (as applicable) in relation to that Shareholder. In that case and
based on that determination (or re-determination):
(a) the Board may at any time by notice in writing to the Shareholder require that
Shareholder to acquire any additional number of Co-operative Shares that
the Board may determine to ensure that the Shareholder holds the Minimum
Holding applicable to that Shareholder under clause 3.1(a);
(b) the Board may at any time by notice in writing to the Shareholder require that
Shareholder to dispose of any number of Co-operative Shares held, or in which
it holds Relevant Interests, which the Board may determine to be in excess of
the Maximum Holding applicable to that Shareholder under clauses 3.1, 3.2
and 3.3; and
(c) if the Board issues a notice under subclauses (a) or (b):
(i) at any time prior to the Compliance Date in the relevant Season, the
Shareholder must acquire, or dispose of, the relevant number of Co-
operative Shares (as applicable) in each case not later than the later of
that Compliance Date, or the date 20 Working Days after the date of the
Board’s notice; and
(ii) at any time following the Compliance Date in the relevant Season, the
Shareholder must acquire, or dispose of, the relevant number of Co-
operative Shares, in each case within a period of 20 Working Days of the
date of the Board’s notice.
No change – the Co-op will
retain its ability to redetermine a
Shareholder’s Minimum Holding
and Maximum Holding.
3.9 New entrants: Where:
(a) a person applies under clauses 2.1 and 2.2 to commence the supply of Milk to
the Company and to become a Shareholder in respect of that supply, and that
application is accepted under clause 2.3;
(b) a person has supplied Milk to the Company without being required to hold
Co-operative Shares, or to hold the number of Co-operative Shares required
by
to satisfy the Share Standard Minimum Holding, and that person wishes to
acquire Co-operative Shares in respect of that supply; or
(c) a Shareholder wishes, in relation to a Season, to increase the quantity of Milk
which the Shareholder supplies to the Company, as a result of a Material
Change, and the Board determines that such increase is material,
This amendment reflects that
the Minimum Holding will no
longer be equal to the Share
Standard.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
then:
(d) in the case of subclauses (b) and (c), the person must, not later than three
months before the commencement of the relevant Season, apply to the
Company in writing for permission to acquire the relevant Co-operative
Shares or to make the Material Change (as applicable). The Board may, in its
absolute discretion, decide whether to accept any such application.
If the Board gives notice in writing to any person who has applied under subclauses
(b) or (c) accepting the relevant application, or where subclause (a) applies:
(e) the Board may specify a period (“Transition Period”) in which the Shareholder
shall be permitted to achieve compliance with standards for the holding of
Co-operative Shares (determined in accordance with this clause 3.9);
(f) the Board shall estimate the minimum quantity of Milk which the Shareholder
is expected to supply in each Season in that Transition Period, and the Board
shall estimate the maximum quantity of Milk which the Shareholder is
expected to supply:
(i) where subclause (a) above applies, in the Season in which the
Shareholder is to commence supply of Milk to the Company;
(ii) where subclause (b) above applies, in the Season in which the person
becomes a Shareholder in relation to the relevant supply; and
(iii) where subclause (c) above applies, in the Season in which the Material
Change referred to in that subclause will be completed;
(g) the Shareholder must supply Milk to the Company in accordance with clauses
3.12 and 9 throughout the period, and in accordance with the quantities,
referred to in subclause (f), in each case unless otherwise determined by the
Board and notified to the Shareholder;
Because the maximum Transition
Period is being extended, this
requirement for continuous
supply would be able to be
waived by the Board – eg to
comply with restrictions in DIRA
on contracting for more than
one season.
(h) the Transition Period shall be a period commencing on the date
(“Commencement Date”) of acceptance of the relevant application
and expiring at the end of the third sixth complete Season after such
acceptance but the Board may in its discretion, in relation to any one or more
Shareholders, specify a shorter or longer Transition Period;
This amendment is to extend
the transition period for sharing
up to the Minimum Holding (in
the ordinary course) from three
Seasons to six Seasons, but the
Board already has (and retains) a
discretion to make this longer or
shorter.
(i) the Shareholder may, immediately on acceptance of such application by the
Board, commence the acquisition of any Co-operative Shares which it will be
required to hold in relation to the Milk proposed to be supplied by it;
( j) the Shareholder must, by each Compliance Date in the Transition Period,
acquire a number of Co-operative Shares which is not less than the number
(“Transition Minimum”) specified by the Board (having regard to the
minimum quantity of Milk specified under subclause (f)) in relation to the
relevant Season;
(k) the Shareholder may, at any time following acceptance of such application,
acquire a maximum number of Co-operative Shares (“Transition Maximum”)
which the Board may specify in relation to that Shareholder;
The reference to “required to
hold” will mean the Minimum
Holding going forward, rather
than the Share Standard – see
clauses 3.1(a) and 3.4(a).
The Board would specify a
Transition Minimum of 1,000
Shares in the first Season, and
stepping up progressively after
that in equal tranches.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
(l) without limiting subclause (k) above, when the Board specifies a Transition
Maximum with respect to any Season in the Transition Period applicable
to a Shareholder, it shall do so having regard to the estimated maximum
quantity of Milk which the Shareholder is expected to supply under subclause
(f), irrespective of (and without being limited by) the Transition Minimum
specified by the Board under subclause ( j) in relation to that Season; and
(m) the Board shall be entitled to determine (or re-determine) in any Season in
a Transition Period the Transition Minimum and the Transition Maximum
applicable to any such Shareholder in that Season.
3.10 Exiting Shareholders: Where:
(a) a person wishes to cease to supply Milk to the Company;
(b) a person wishes to continue the supply of Milk to the Company but on the
basis that it will hold a number of Co-operative Shares which is less than the
Share Standard
Minimum Holding (whether under clauses 3.21 or 3.22 or
otherwise); or
(c) a Shareholder wishes, in relation to a Season, to reduce the quantity of Milk
which the Shareholder supplies to the Company as a result of a Material
Change, and the Board determines that such reduction is material,
then, in any such case that person must, not later than three months before the
commencement of the Season in which the relevant change will occur, apply in
writing to the Company for permission to make that change. Any application under
clause 3.10(a) must set out the date on which the Shareholder intends to cease the
supply of Milk to the Company. Where a person has not applied to the Company
under this clause 3.10 within the required timeframe, the Board may (in accordance
with any rules established by the Board from time to time) waive that requirement
and treat the person as having submitted such an application. The Board may in its
absolute discretion decide whether to accept any such application, subject to the
terms of any enactment.
The following clauses specify arrangements which apply I
if the Board gives notice
in writing to such person accepting an the relevant application made, or treated
as having been made, under this clause (subject also to any rules applicable to
Associated Shareholders):
(d) the Board may specify a period (“Reduction Period”) in which the
Shareholder and any Associated Shareholders shall be required to achieve
compliance with modified standards for the holding of Co-operative Shares
determined in accordance with this clause 3.10;
(e) the Board shall (where applicable) estimate the quantity of Milk which the
Shareholder is expected to supply to the Company in each Season in that
Reduction Period and the Shareholder must, in accordance with clauses 3.12
and 9, supply Milk to the Company until (where subclause (a) applies) the
date specified in the Shareholder’s application as being the date on which the
Shareholder intends to cease supply of the Milk to the Company and, where
subclauses (b) and (c) apply, throughout the relevant Season and, in all such
cases, in accordance with the quantities specified in this subclause (e);
This amendment is to reflect
that the “Minimum Holding” is
being reduced below 100% of
the Share Standard.
There is also a minor
typographical correction to the
existing Constitution in clause
3.10(b).
The Board would be able to
waive the requirement for three
months’ notice of ceasing or
reducing supply. This would
provide a mechanism for the
Board, in specific circumstances,
to relax the notice requirement.
The basis on which these
situations would be assessed
would be outlined in the rules
referred to here.
The clause also specifies
arrangements for outgoing
Associated Shareholders to
share down. These arrangements
would operate in conjunction
with the separate rules referred
to in clause 3.4. This amendment
lets the Board specify a
Reduction Period for them as
well.

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FONTERRA SPECIAL MEETING 2021
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(f) the Reduction Period shall generally be a period commencing on the date
(“Reduction Date”):
(i) where subclause (a) above applies, which is the start of the Season in
which the Shareholder will cease to supply Milk to the Company; and
(ii) where subclauses (b) or (c) apply, on which the relevant application is
accepted by the Company,
and expiring:
(iii) for any person that was a Shareholder on 9 December 2021, on the
later of 31 May 2037 or the end of the tenth complete Season after the
applicable Reduction Date;
(iv) for any other Shareholder supplying Milk to the Company, at the end of
the third
fifth complete Season after the applicable Reduction Date; and
(v) for any Associated Shareholder, at the end of the third complete Season
after the applicable Reduction Date,
but the Board may in its discretion, in relation to any one or more
Shareholders, specify a shorter or longer Reduction Period (and may re-
determine any Reduction Period that has previously been specified);
(g) the Shareholder may, immediately on
following acceptance of such application
by the Board, commence the disposal of any Co-operative Shares which it will
be required to dispose of as a result of cessation or reduction in its supply;
This amendment is to extend
the maximum reduction period
for selling shares from three
Seasons to 15 Seasons for
existing suppliers as at the
vote date, reducing down to
10 Seasons for each complete
Season after then that they
remain a supplier.
Subject to the comments below
on the Board’s discretion to
specify a shorter or longer
Reduction Period:
• The earliest date on which a
current supplier that ceases
would need to have finished
selling their shares would be
the Compliance Date in the
Season ending 31 May 2037.
• New entrants will have five
Seasons to share down.
• Associated Shareholders will
have three Seasons.
The discretion to specify a
shorter or longer Reduction
Period will be extended so
that a new period could be
set for any farmer owners
who had already ceased, to
enable the Board to respond
to different circumstances as
fairly as possible. Any such re-
determination would be binding
on any Permitted Transferees
as well – see further comments
at the end of this clause 3.10.
The applicable rules would also
provide for these periods to be
re-determined for Associated
Shareholders.
Shareholders that cease supply
can start selling shares from
the beginning of the next
Season, once they are no longer
supplying the Co-op.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
(h) the Shareholder and any Associated Shareholder must, by each Compliance
Date in the Reduction Period, dispose of a number of Co-operative Shares
such that its holding of Co-operative Shares is not more than the number
(“Reduction Maximum”) specified by the Board (having regard to the
estimated quantity of Milk specified under subclause (e)) in relation to the
relevant Season;
(i) where subclauses (b) or (c) above apply, the Shareholder must, at each
Compliance Date in the Reduction Period, hold a number of Co-operative
Shares which is not less than the number (“Reduction Minimum”) specified
by the Board in relation to the relevant Season;
( j) without limiting subclause (i) above, when the Board specifies a Reduction
Minimum with respect to any Season in a Reduction Period applicable to a
Shareholder, it may do so irrespective of (and without being limited by) the
Reduction Maximum specified by the Board under subclause (h); and
(k) the Board shall be entitled to determine (or re-determine) in any Season in a
Reduction Period the Reduction Maximum and (where applicable) Reduction
Minimum applicable to any such Shareholder in that Season.;
(l) notwithstanding subclauses (d) to (k) of this clause 3.10, a Shareholder
whose application (or deemed application) under clause 3.10(a) has been
accepted by the Board may (subject to any limitations in, and otherwise
in accordance with, any rules established by the Board from time to time)
transfer Co-operative Shares to one or more persons who have been approved
by the Company and who are (and remain) related to or associated with that
Shareholder, as determined in accordance with those rules (each a “Permitted
Transferee”):
(i) during the first complete Season after the Season in which the
Shareholder’s application is accepted; or
(ii) at any other time during the Reduction Period in the event of the death
of the Shareholder or of any member of a partnership, direct or indirect
shareholder, or trustee of the Shareholder,
and any person or persons to whom Co-operative Shares are transferred
in accordance with subclauses (i) or (ii) above must continue to comply
with the Reduction Maximum throughout the remaining Reduction Period
as if they were the transferring Shareholder (in each case subject to any
re-determination in accordance with clauses 3.10(f) and 3.10(k)), but in
proportion to the number of the transferor’s Co-operative Shares transferred
to them, and must otherwise continue to comply with the rules established by
the Board from time to time for Permitted Transferees; and
Subclauses (h) – (k) provide for
a progressive share down (ie
currently 1/3, 1/3, 1/3).
As a step down is not intended
going forward, the Board would
use the existing provisions to
set a Reduction Maximum equal
to the number of Shares held
by the Shareholder when they
cease (or any lesser number held
during the Reduction Period),
and a Reduction Minimum equal
to zero (until the final Season,
where the Reduction Maximum
and Minimum will both be equal
to zero, so that any remaining
shares must be sold by the
relevant Compliance Date).
However, the Board would
retain its ability to re-determine
the Reduction Maximum and
Reduction Period, for example
if the proportion of shares held
by ceased Shareholders became
too high.
The ability to apply for
permission to transfer Shares to
a Permitted Transferee is only
available to ceased Shareholders
that supplied Milk to the
Co-op, ie it is not available to
Associated Shareholders or
other Permitted Transferees.
The rules referred to here could
restrict transfers to Permitted
Transferees if circumstances
required that in future.
However, for all Shareholders
(ie, including Associated
Shareholders and Permitted
Transferees), Shares may also
pass into the Shareholder’s
estate on the death of the
Shareholder – see clause 31.1.
The Board’s discretion to re-
determine these matters for
ceased Shareholders would
extend to their Permitted
Transferees as well.

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(m) if at any time the number of Co-operative Shares held by Shareholders whose
applications made, or treated as having been made, under clause 3.10(a)
have been accepted by the Board, or who are Permitted Transferees of such
persons, is greater than 25% of the total number of Co-operative Shares on
issue by the Company (excluding treasury stock):
(i) the Board shall take such steps and do such things, within such
timeframes as the Board considers appropriate, with a view to returning
to within that 25% threshold; and
(ii) the provisions of clause 3.3 shall apply as if the excess Co-operative
Shares above that 25% threshold were Co-operative Shares outside the
Aggregate Threshold, as referred to in that clause.
The Board would target a
proportion of not more than
25% of total Shares being held
by ceased Shareholders or
Permitted Transferees. However,
the rights of the excess Shares
would not be affected, the same
as is specified in clause 3.3
(which relates to the Aggregate
Threshold) – that clause is cross-
referred to here and would also
apply in these circumstances.
The Board would also adopt
a Risk Management Policy (in
consultation with the Co-
operative Council), as referred
to in clause 16.10, regarding the
total number of Shares on issue
and the proportion of Shares
that are not held by Shareholders
that supply Milk to the Co-op
(including the proportion of
Shares that are held for the Fund).
3.11 Compliance in transitional periods: If the provisions of clauses 3.9 or 3.10
apply and, as at any Compliance Date in a Transition Period or Reduction Period
applicable under those clauses, a Shareholder is holding a number of Co-operative
Shares which is more than the maximum or less than the minimum number of
Co-operative Shares which the Shareholder is permitted or required (as applicable)
to hold, the provisions of clauses 3.14 to 3.17 inclusive, and clause 4.3 and (if the
Shareholder does not comply with a notice given under clause 4.3(c)) clause 4.4
shall apply.
No change – these provisions
will continue to apply on the
basis of the reduced Minimum
Holding.
3.12 Continuous Supply: Where:
(a) under clause 3.9, a Shareholder is permitted to achieve compliance with
the Share Standard
Minimum Holding over a Transition Period specified
under that clause, the Shareholder may not, at any time prior to the end of
the applicable Transitional Period, give a notice under clause 3.10(a), that it
intends to cease or reduce, nor otherwise cease or reduce, the supply of Milk
to the Company (in each case unless otherwise determined by the Board and
notified to the Shareholder);
(b) under clause 3.10(a), a Shareholder has given a notice that it intends to cease
the supply of Milk to the Company on a particular date, the Shareholder must
continue to supply Milk to the Company up to that date; and
(c) the Board estimates a quantity of Milk to be supplied by a Shareholder under
clauses 3.9 or 3.10, the Shareholder must (in accordance with clause 9)
supply Milk to the Company throughout the period, and in accordance with
quantities, referred to in those clauses.
These provisions will continue
to apply, but on the basis of
the reduced Minimum Holding
rather than the full Share
Standard. Because the maximum
Transition Period is being
extended, this requirement for
continuous supply would be able
to be waived by the Board – eg
to comply with restrictions in
DIRA on contracting for more
than one season.

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FONTERRA SPECIAL MEETING 2021
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3.13 Measurement Dates: Each Shareholder’s compliance with the requirements of
this clause 3 in relation to a Season shall be determined by the Board on or with
effect from the first day in that Season (“Measurement Date”) and the Company
shall, not later than 20 Working Days after that date, issue to each Shareholder
a statement (“Measurement Statement”) setting out such information as the
Board may from time to time consider appropriate in relation to the numbers of
Co-operative Shares which the Shareholder is required, or permitted, to hold in that
Season. Each Measurement Statement shall, absent manifest error, be conclusive
and binding. Nothing in this clause 3.13 limits the provisions of clause 3.8.
3.14 Obligation to comply - Individual Limit: The Individual Limit applies throughout
each Season, and applies on each day in the Season. Each Shareholder must give
notice in writing to the Company if at any time it becomes aware that the number
of Co-operative Shares which it holds, or in which it has Relevant Interests is, or
may be, in excess of the Individual Limit. If a Shareholder gives such a notice to the
Company or the Company otherwise ascertains at any time that the Shareholder
is in breach of the Individual Limit, the Shareholder must, within such period as is
determined by the Board (not being less than 10 Working Days), dispose of such
number of Co-operative Shares as will result in the number of Co-operative Shares
held by that Shareholder, or in which it has Relevant Interests, being reduced to
a number of Co-operative Shares which is less than the Individual Limit. If the
Shareholder fails to comply with the requirements of this clause 3.14, the provisions
of clause 4.3 and (if the Shareholder does not comply with a notice given under
clause 4.3(c)) clause 4.4 shall apply.
No change. This provides for
monitoring and enforcement
of the Individual Limit in
accordance with clause 3.1.
3.15 Obligation to comply - other limits: Without limiting clause 3.14, in the period
between the Measurement Date and the Compliance Date (specified under clause
3.16) in each Season the Shareholder must, to the extent required:
(a) dispose of such number of Co-operative Shares as will result in the number
of Co-operative Shares held by that Shareholder being not more than the
maximum number of Co-operative Shares that the Shareholder is permitted,
under this clause 3, to hold in that Season; and
(b) acquire such number of Co-operative Shares as will result in the number
of Co-operative Shares held by that Shareholder being not less than the
minimum number of Co-operative Shares that the Shareholder is required,
under this clause 3, to hold in that Season,
and all disposals and acquisitions necessary to achieve compliance with this clause
3.15 must be completed by the Compliance Date. In order to give effect to the
requirements in this clause 3.15:
No change – these provisions,
including the ability to offer
Delegated Compliance Trading,
will continue to apply on the
basis of the reduced Minimum
Holding, and will apply (or
be available) to Associated
Shareholders or Permitted
Transferees that hold more than
the number of Shares they are
permitted to hold.
(c) the Shareholder may, if and to the extent that the Company offers such
a facility to Shareholders from time to time, either following receipt of
a Measurement Statement in relation to any Season, or as a standing
instruction to the Company, request that an Independent Agent disposes
of, or acquires, such number of Co-operative Shares as the Shareholder is
required to dispose of or acquire under subclauses (a) or (b) (as applicable);
(d) each request by a Shareholder under subclause (c) shall operate to appoint an
Independent Agent as the attorney and agent of the Shareholder, with power
to delegate to any director or employee of the Independent Agent, to dispose
of or acquire (as applicable) the relevant number of Co-operative Shares;

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
(e) any facility provided under subclause (c) shall be established:
(i) with such Independent Agent as the Company may from time to time
select; and
(ii) on terms and conditions notified by the Company to Shareholders from
time to time,
and each request by a Shareholder under subclause (c) shall be processed and
acted upon by the Independent Agent in accordance with those terms and
conditions; and
(f) without limiting the content of those terms and conditions, each such
transaction shall be processed on the basis that the Independent Agent
shall not be required to obtain any particular price for any Co-operative
Shares disposed of, or to pay any particular price for any Co-operative Shares
acquired, under such facility, and none of the Company, the Independent
Agent, nor their respective directors and employees shall be liable to any
person on any basis in relation to any such disposals or acquisitions.
If the Shareholder fails to comply with the requirements of this clause 3.15, the
provisions of clause 4.3 and (if the Shareholder does not comply with a notice given
under clause 4.3(c)) clause 4.4 shall apply.
3.16 Review of compliance: The Board shall review each Shareholder’s compliance
with clause 3.15 on a date (“Compliance Date”) set by the Board and notified to
Shareholders prior to the commencement of each Season (such date being not
less than 6 months after the Measurement Date). The Board may postpone the
Compliance Date by further notice to Shareholders. The and the Board shall, not
later than 20 Working Days after that date the Compliance Date, issue to each
Shareholder a second statement (“Compliance Statement”) setting out the
number of Co-operative Shares held by the Shareholder as at the Compliance Date.
The Board’s determination on that issue shall, absent manifest error, be conclusive
and binding. Nothing in this clause 3.16 limits the provisions of clause 3.8.
The Board has the reserve power
to defer compliance obligations
under clause 3.25 of the current
Constitution. This amendment
is to specifically record that the
Compliance Date itself may be
postponed as part of such a
deferral – eg if an unexpected
event occurs that the Board
considers merits a change to the
Compliance Date.
3.17 Consequences: If the Compliance Statement issued to a Shareholder indicates that,
as at the Compliance Date, the Shareholder held:
(a) a number of Co-operative Shares which is more than the maximum number of
Co-operative Shares which the Shareholder is permitted, under this clause 3,
to hold in that Season; or
(b) a number of Co-operative Shares which is less than the minimum number of
Co-operative Shares which the Shareholder is required, under this clause 3, to
hold in that Season,
the Shareholder shall be deemed to be in breach of this Constitution and an
Independent Agent shall automatically and irrevocably (and without the need for
any further confirmation by, or notice to, the Shareholder) be appointed to act as
the attorney and agent of the Shareholder (with power to delegate to any director
or employee of the Independent Agent) to dispose of or acquire (as applicable) such
number of Co-operative Shares as will result in the Shareholder holding a number of
Co-operative Shares which complies with the limits and requirements in this clause
3, and in any such case the provisions of clause 4.3 and (if the Shareholder does not
comply with a notice given under clause 4.3(c)) clause 4.4 shall apply.
3.18 Information: Each Shareholder shall provide such information as the Board
may from time to time require to enable the Board to determine whether the
Shareholder holds, or has Relevant Interests in, a number of Co-operative Shares
required, or permitted, to be held by that Shareholder under this clause 3.

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3.19 Declarations: Without limiting clause 3.18, the Board may at any time, by notice in
writing to any Shareholder, require that Shareholder to give a statutory declaration
(or other disclosure in a form acceptable to the Board) confirming such matters as
the Board may require, including whether the Shareholder holds, or has Relevant
Interests in, a number of Co-operative Shares which the Shareholder is required,
or permitted, to hold or have Relevant Interests in under this clause 3. On receipt
of any such notice, the Shareholder must provide such declaration or disclosure
to the Board (or as the Board directs), within 10 Working Days of the date of the
Board’s notice. If the Shareholder fails or refuses to provide such declaration or
disclosure in accordance with this clause, the Board shall be entitled to make a
determination on the relevant issue on the basis of the information available to it
and (without limiting the Company’s other rights and remedies) the provisions of
clause 4.3 and (if the Shareholder does not comply with a notice given under clause
4.3(c)) clause 4.4 shall apply to compel compliance by the Shareholder with any
requirement under this Constitution which the Board determines is applicable to
that Shareholder.
3.20 Split Supply Shareholders: A Shareholder must give not less than 20 Working
Days notice in writing prior to the commencement of the relevant Season where it
intends to not supply, in that Season, a percentage of the Milk previously supplied
by that Shareholder from a Farm (the percentage so notified being called “Diverted
Milk Percentage”) where that Milk is to be supplied by that Shareholder to another
purchaser. In that event the Company may require that Shareholder to reduce the
number of Co-operative Shares held by that Shareholder (such that the Shareholder
will hold a number of Co-operative Shares not exceeding the Maximum Holding
determined by the Board in relation to that Shareholder for the relevant Season,
based on the Company’s estimate of the quantity of Milk (excluding Milk to be
supplied on Contract Supply) which that Shareholder is expected to supply to the
Company during that Season). The Diverted Milk Percentage shall not at any time
exceed 20% of the total Milk produced in the whole of the applicable Season and
in each day of that Season on that Farm. Whether any such notice may be given by
any Shareholder, the time for giving any such notice, and the conditions on which it
shall be given or accepted and the dates by which the Shareholder must reduce its
holding of Co-operative Shares, shall in each case be determined by the Board from
time to time in a manner consistent with any applicable enactment.
3.21 [Not used] Unshared supply: The Board may permit, at its discretion and on such
terms as it sees fit, Shareholders to hold fewer Co-operative Shares than required by
the Share Standard in a Season, provided that no Shareholder may hold a number of
Co-operative Shares which is less than the number of Co-operative Shares required
by the Share Standard in a Season by a number of Co-operative Shares which is
greater than 20% of the number of Co-operative Shares required by the Share
Standard in that Season.
This clause allows shareholding
to 80%. It would be superseded
by the reduced Minimum
Holding, which will give farmers
greater flexibility than is
provided for in this clause.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
3.22 Contract Supply: Without limiting any other provision of this Constitution, the
Board may, at its discretion and on such terms as it sees fit, permit a Shareholder to
supply Milk to the Company in a Season on Contract Supply. The aggregate amount
of Milksolids obtained from Milk supplied to the Company by Shareholders in a
Season on Contract Supply shall not exceed 15% of the total Milksolids obtained
from all Milk supplied by Shareholders to the Company in a 12-month period prior
to the commencement of that Season selected by the Board. Without limiting the
terms which the Board may set for Contract Supply under clause 9.4, the Board:
(a) shall set, or determine the methodology for setting, the amount to be paid to
a Shareholder for Milk supplied to the Company on Contract Supply;
(b) may require a Shareholder to hold a number of Co-operative Shares
continuously throughout the term of any arrangements for the supply of Milk
to the Company by that Shareholder on Contract Supply; and
(c) may set different terms under this clause 3.22 as between individual
Shareholders.
“Contract Supply” means
supply by a Shareholder without
the Milksolids obtainable from
that Milk being taken into
account for the purposes of the
Share Standard for that Season
(and hence also not taken
into account for the Minimum
Holding).
Although Share Up Over Time
contracts would be phased out
(but with all existing contractual
entitlements being honoured),
this clause does not need to
change and the Board would
retain a discretion to allow
further Contract Supply.
MyMilk would also be phased
out under the preferred option,
but with all existing contractual
entitlements being honoured.
3.23 Continuous Shareholding: Notwithstanding that each Shareholder’s compliance
with the requirements of this clause 3 (specifying minimum and maximum numbers
of Co-operative Shares which Shareholders are required to hold) are intended to be
tested on the Measurement Date and the Compliance Date, the Board may from
time to time specify a minimum number (“Base Limit”) of Co-operative Shares
(which may be expressed numerically, in percentage terms relative to the Share
Standard, or otherwise) which a Shareholder is required to hold continuously,
throughout the relevant Season provided that:
(a) the number of Co-operative Shares specified as the Base Limit in respect of
a Shareholder shall not exceed the number of Co-operative Shares which
the Shareholder would have been required to hold under the Share Standard

Minimum Holding; and
(b) in setting a Base Limit under this clause the Board must give not less than
20 Working Days prior notice in writing to Shareholders of the introduction
of (or any variation to) the Base Limit, and no such Base Limit shall operate
retrospectively.
If the Board specifies a Base Limit under this clause:
(c) each Shareholder must hold a number of Co-operative Shares which is not less
than the Base Limit on each day, and at all times, during the relevant Season;
and
(d) the provisions of clause 4.3 and (if the Shareholder does not comply with a
notice given under clause 4.3(c)) clause 4.4 shall apply to compel compliance
by the Shareholder with the Base Limit.
These provisions will continue to
apply on the basis of the reduced
Minimum Holding.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
3.24 Termination: If at any time:
(a) the Company becomes aware that a Shareholder is a person who the Board is
not permitted to admit as a Shareholder in accordance with clause 2.4; or
(b) a Shareholder has failed to comply in any material respect with the Terms and
Conditions on which that Shareholder supplies Milk to the Company,
the Board may give that Shareholder a notice in writing to that effect and:
(c) the Board may require that Shareholder to cease the supply of Milk to the
Company; and
(d) the Board may require that Shareholder to dispose of all of the Co-operative
Shares which that Shareholder holds, such disposal to be effected within a
timeframe specified by the Board (not being less than 10 Working Days).
No change. The amendments to
clause 2.4 mean that this clause
3.24 will also apply to Associated
Shareholders and Permitted
Transferees.
3.25 Extensions etc: The Board may, at its discretion, at any time grant extensions in
relation to, or waivers of, dates and time periods for compliance with obligations
arising under this clause 3 provided that, in doing so, it treats all Shareholders in
similar circumstances equitably.
3.26 No application to certain persons: The provisions of clauses 2 and 3 do not apply
to any RVP, any Custodian, or any Authorised Fund, and no RVP, Custodian, or
Authorised Fund is required to hold Co-operative Shares under this clause 3.
4. COMPLIANCE AND REMEDIES
4.1 Application of Clause 3 restrictions: The requirements contained in clause 3
relating to the numbers of Co-operative Shares which Shareholders are required, or
permitted, to hold (or have Relevant Interests in) are in each case of fundamental
importance to the Company. Each Shareholder must comply with, and give effect
to, those requirements (and, in the case of Associated Shareholders and Permitted
Transferees, the requirements of the rules from time to time applicable to
Associated Shareholders and Permitted Transferees), in form and in substance, and
each such requirement shall be construed having regard to its purpose and intent.
4.2 Ensuring compliance: If at any time the Board determines, in its discretion, that
any Shareholder has arranged its affairs or is circumventing, or may be seeking
to circumvent, the purpose and/or intent of the restrictions in clause 3 or any
applicable rules the Board may, after taking such steps as it considers practicable
and available (including but not limited to exercise of the powers in clauses 3.18
and 3.19) declare any such Shareholder to be in breach of the requirements of the
Constitution, in which case clause 4.3 and (if the Shareholder does not comply with
a notice given under clause 4.3(c)) clause 4.4 shall apply.
4.3 Final opportunity to comply: If it is found (whether as a result of information
provided under clauses 3.18 and 3.19 or otherwise) that any Shareholder holds
(or, where the Individual Limit applies, has Relevant Interests in) a number of Co-
operative Shares which is more than the maximum number of Co-operative Shares
that the Shareholder is permitted to hold, or is less than the minimum number of
Co-operative Shares that the Shareholder is required to hold, in each case under
clause 3 then, in any such case:
(a) all dividends or other Distributions which would otherwise accrue or be
payable on or in relation to Co-operative Shares held by the Shareholder (or,
where the Individual Limit applies, in which it has Relevant Interests) which
are in excess of an applicable limit under clause 3 shall be forfeited by the
Shareholder and retained by the Company;
These provisions will continue to
apply on the basis of the reduced
Minimum Holding. These
mechanisms will also apply to
Associated Shareholders and
Permitted Transferees that
exceed the maximum number
of Shares they are permitted to
hold.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
(b) no vote may be exercised in relation to any Co-operative Shares held by the
Shareholder (or, where the Individual Limit applies, in which it has Relevant
Interests), and any purported exercise of any right to vote by such Shareholder
may be disallowed by the Company; and
(c) the Board may give the Shareholder notice in writing requiring the
Shareholder to take all steps (within a period specified by the Board, but not
to be less than 10 Working Days after the date of the notice) to reduce or
increase (as the case may require) the number of Co-operative Shares which it
holds, or, where the Individual Limit applies, in which it has Relevant Interests,
to such level as will result in the Shareholder being in compliance with the
relevant obligation.
4.4 Breach: If the Shareholder fails to comply with a notice given by the Board under
clause 4.3(c) within the period specified in the notice given under that clause:
(a) an Independent Agent selected by the Board shall automatically and
irrevocably (without the need for any further confirmation by, or notice
to, the Shareholder) be appointed to act as the attorney and agent of the
Shareholder, with power to delegate to any director or employee of the
Independent Agent to dispose of or acquire, or procure the disposal or
acquisition (either through the RVP or otherwise) of, such number of Co-
operative Shares (“Breach Shares”) as will result in the Shareholder being in
compliance with the relevant obligation;
(b) such disposal or acquisition may be effected by one or more transactions at
such time or times as the Independent Agent determines;
(c) such disposals or acquisitions shall be effected at the prices for Co-operative
Shares prevailing on the Fonterra Shareholders Market at the time(s) and on
the date(s) on which the relevant transactions are conducted;
(d) none of the Company, the Independent Agent, any RVP, or any of their
respective directors or employees, any other third party used to effect any
such transaction, nor any other person, shall be under any duty or obligation
to obtain (or to pay) any particular price for the Breach Shares, and none of
such persons shall be liable to the Shareholder on any basis for, or in relation
to, the relevant disposal or acquisition, or for any loss suffered or claimed to
have been suffered by the Shareholder as a result of such transaction;
These provisions will continue to
apply on the basis of the reduced
Minimum Holding.
In particular, Enforced
Compliance Trading will apply
if Shareholders (including
Associated Shareholders and
Permitted Transferees) do not
comply with the applicable limits
under the Constitution or under
any applicable rules.
(e) the proceeds of disposal of any such Breach Shares, less any or all of the
following (which the Board may determine to deduct):
(i) any amount payable by the Shareholder under Fund Arrangements
entered into with an Authorised Fund; and
(ii) all external costs and expenses incurred by the Independent Agent or
the Company in connection with the sale, and all fees charged by any
Independent Agent, any RVP, or any other third party utilised to effect
such disposal,
shall be paid to the Shareholder as and when they are available for payment;

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FONTERRA SPECIAL MEETING 2021
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(f) where any Co-operative Shares are acquired under the foregoing provisions,
an amount equal to any or all (as the Board may determine) of the following:
(i) the cost of acquisition of the relevant Co-operative Shares; and
(ii) all external costs and expenses incurred by the Independent Agent or
the Company in connection with the purchase, and all fees charged by
any Independent Agent, any RVP, or any other third party utilised to
effect such acquisition,
shall be charged to the account of the Shareholder with the Company and
may be set off and deducted by the Company from any other amount due by
the Company to the Shareholder and/or recovered by the Company from the
Shareholder as a debt due. Any such amount shall accrue (and the Shareholder
shall pay) interest at the Interest Rate in the period between acquisition of
the relevant Co-operative Shares and payment of the amount specified in this
subclause (f), such interest to accrue on a daily basis both before and after
judgment;
(g) the Shareholder irrevocably indemnifies the Company, each Independent
Agent, and each other person utilised to effect any disposal or acquisition of
Co-operative Shares or to take any other step contemplated by this clause
4.4 in relation to all costs, losses, expenses, claims and liabilities suffered or
incurred by any of such persons in giving effect to such matters;
(h) no person shall be concerned or shall need to make any inquiry in relation
to the exercise of the powers conferred under this clause or the disposal
or acquisition of any Co-operative Shares arising from the exercise of such
powers; and
(i) any determination of the Board or exercise of any discretion or power by the
Board or its delegates under this clause 4.4 shall, absent manifest error, be
conclusive and binding, and no disposal or acquisition or other action taken by
the Board, the Independent Agent or any other person under this clause shall
be open to challenge (whether as to its validity or otherwise on any ground
whatsoever). A certificate signed by a Director or a delegate of the Board as
to the exercise of the powers in this clause 4.4 shall be conclusive evidence of
the facts stated therein.
5. THE FONTERRA SHAREHOLDERS MARKET
5.1 Trading Agreement: The Board may cause, or may prior to the date on which
this Constitution takes effect have caused, the Company to enter into a Trading
Agreement with the Operator. The Board may do such things and take such steps
as may be necessary or appropriate to facilitate quotation and trading of Co-
operative Shares on the Fonterra Shareholders Market pursuant to any such Trading
Agreement, to maintain such quotation and trading and to agree any modified,
additional, or replacement arrangements in relation to the Fonterra Shareholders
Market as the Board considers appropriate including:
(a) specifying or agreeing access protocols, rules, and procedures for trading of
Co-operative Shares on the Fonterra Shareholders Market; and
(b) facilitating compliance by the Company with the Trading Agreement, the
Market Rules, and any legislative or regulatory requirements applicable to the
Company in relation to the Fonterra Shareholders Market.
No change – shares will continue
to be traded among farmers on
the FSM.

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6. REGISTERED VOLUME PROVIDERS
6.1 Engagement: The Board may, from time to time and on such terms as it thinks fit,
appoint, engage, or authorise one or more persons to:
(a) provide services intended to enhance the operation and liquidity of the
Fonterra Shareholders Market and/or any market for securities issued by any
Authorised Fund; and
(b) provide such other services as the Company may from time to time require for
the purposes referred to in subclause (a),
and the Board may terminate the services of, or replace, any such person, or appoint
additional persons to perform such roles, at any time. The terms on which any such
person is appointed shall be set out in a contract (“RVP Contract”). Any such RVP
Contract:
(c) must contain provisions which reflect, or give effect to, the restrictions
contained in clauses 6.4 and 6.5; and
(d) subject to subclause (a) above, may be varied, supplemented or replaced at
any time.
6.2 Custodian: The Board may from time to time and on such terms as it thinks fit
require, or permit, some or all of the rights and interests in Co-operative Shares
to which an RVP is entitled to be held by a Custodian for the purposes outlined in
this clause 6, in which case the Board may require such Custodian to enter into a
contract (which is for the benefit of, and is enforceable by, the Company) which
contains provisions which reflect, or give effect to, the restrictions contained in
clauses 6.4 and 6.5.
6.3 No Liability for the Company: Notwithstanding that the Board may appoint,
engage, or authorise a person to perform the role of a RVP under clause 6.1, none
of the Company, any Director, nor any employee of the Company shall have any
liability to any person for, or in connection with, anything done or not done by
a RVP or a Custodian, any termination or variation of any RVP Contract, or any
termination or variation of any contract with a Custodian.
6.4 Restricted capacity: No RVP shall be entitled to hold any Co-operative Shares for
any purpose, or in any capacity. If any RVP ceases to perform the role described in
the RVP Contract (whether as a result of termination of the relevant RVP Contract
or otherwise) the RVP must cause the Custodian to transfer all Co-operative Shares
held by it for or on behalf of the RVP (or in which it holds rights or interests for or on
behalf of the RVP) to such person or persons as the Board may (by notice in writing
to the RVP and the Custodian) direct.
6.5 No exercise of voting rights: Each RVP Contract shall contain such mechanisms
as the Board thinks fit which prohibit the RVP (and any Custodian) from exercising,
Controlling or exerting any influence over any voting rights attached to any Co-
operative Shares held by the Custodian (or in which it holds rights or interests) for
any RVP from time to time or appointing any proxy or Representative to do so on
its behalf. No exercise or purported exercise by any RVP or any Custodian (or by
any person for or on behalf of such parties, whether as proxy, Representative, or
otherwise) of any voting rights attached to Co-operative Shares shall be recognised
or of any effect.
6.6 RVP limit: The aggregate number of Co-operative Shares in which rights or
interests may be held for any (or all) RVPs at any time shall not exceed an amount
equal to 5% of the total number of Co-operative Shares then on issue in the capital
of the Company, excluding any Co-operative Shares which are, at the relevant time,
on issue but have been surrendered to, or have been acquired by, the Company, and
have not been cancelled.
No change – shares will
continue to be traded among
farmers on the FSM, and these
arrangements (relating to a
market-maker operating on that
platform to enhance liquidity)
will be retained.

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7. AUTHORISED FUND
7.1 Authorisation: The Board may, from time to time and on such terms as it thinks
fit, authorise any person (“Authorised Fund”) to acquire, hold, or dispose of some
or all of the or rights or interests in Co-operative Shares for the purpose set out in
clause 1.6 and for that purpose:
(a) permit any such Authorised Fund to enter into contracts or arrangements
(“Fund Arrangements”) with any person (“Disposing Holder”) holding or
controlling Co-operative Shares, and to receive any rights or benefits arising
from any such Fund Arrangements at any time. The terms on which any such
Authorised Fund is authorised by the Board to perform this role shall be set
out in a contract (“Fund Contract”). Any such Fund Contract:
(i) must contain provisions which reflect, or give effect to, the restrictions
in clauses 7.7 and 7.8; and
(ii) subject to subclause (i), may be varied, supplemented or replaced at any
time; and
(b) require rights or interests in Co-operative Shares to which any such
Authorised Fund is entitled to be held by a Custodian, in which case the Board
may require that Custodian to enter into a contract (which is for the benefit of,
and is enforceable by, the Company) which contains provisions which reflect,
or give effect to, the restrictions contained in clauses 7.7 and 7.8.
7.2 No liability for the Company: Notwithstanding that the Company may authorise
a person to perform the role of an Authorised Fund under this clause, none of the
Company, any Director, nor any employee of the Company shall have any liability to
any person for, or in connection with, anything done or not done by an Authorised
Fund, any termination or variation of any Fund Contract, or any termination or
variation of a contract with a Custodian.
No change.
The cap on the Fund referred to
in clause 7.3 below means that
no further Shares may be sold
into the Fund while that cap is in
place.
These provisions will otherwise
be left in place. They permit
(but do not require) the Fund
to continue in existence. The
Board could in future decide to
buy back the Fund, based on
circumstances at the time.
The new provisions at clause
7.9 prohibit unauthorised new
funds from being established,
or economic interests in Shares
from being transferred by
Shareholders to third parties.
7.3 Participation: The Board may from time to time:
(a) specify limits on the extent to which any Disposing Holder may:
(i) dispose of any Co-operative Shares or rights or interests in Co-operative
Shares to or for the benefit of any Authorised Fund; or
(ii) enter into any agreement, arrangement or understanding with any
person to that effect or for that purpose; and/or
(b) approve the terms of any Fund Arrangements proposed to be entered into by
an Authorised Fund with Disposing Holders pursuant to clause 7.1,
provided that at any time the maximum number of Co-operative Shares in which
any Disposing Holder (except an RVP or any Custodian acting on behalf thereof)
may dispose of rights or interests to or for the benefit of any Authorised Fund shall
not exceed 33% of the minimum number of Co-operative Shares required to be held
by the Disposing Holder at that time in accordance with this Constitution.
No change.
The current cap on the Fund
implemented by the Board in
May 2021 pursuant to clause
7.3(a)(i) would continue.
The Board would be able to
adopt Fund Arrangements to
let Shareholders sell Shares
into the Fund in an orderly
manner, subject to the overall
maximum cap in clause 7.5 and
the proviso that no Shareholder
can sell more than 33% of their
Minimum Holding into the Fund.
7.4 Basis: Any limit specified by the Board under clause 7.3(a) may be set by the Board
on any basis, by reference to any benchmarks, and incorporating any restrictions
(whether expressed numerically, in percentage terms, or otherwise) that the Board
determines, and may be re-determined by the Board at any time and from time
to time.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
7.5 Overall limit: The aggregate number of Co-operative Shares which are at any time
the subject of Fund Arrangements shall not exceed an amount (“Overall Limit”)
equal to 10% 20% of the total number of Co-operative Shares then on issue in
the capital of the Company, excluding any Co-operative Shares which are, at the
relevant time, on issue but have been surrendered to, or have been acquired by, the
Company, and have not been cancelled.
The Overall Limit on the size of
the Fund is reduced from 20% to
10% of the Co-operative.
The cap on the Fund referred to
in clause 7.3 above means that
no further Shares may be sold
into the Fund while that cap is in
place.
In addition to this 10% Overall
Limit on the Fund, the Board
would adopt a Risk Management
Policy (in consultation with
the Co-operative Council), as
referred to in clause 16.10,
regarding the total number
of Shares on issue and the
proportion of Shares that are not
held by Shareholders that supply
Milk to the Co-op (including the
proportion of Shares that are
held for the Fund).
7.6 Consequences: If at any time the aggregate number of Co-operative Shares which
are the subject of Fund Arrangements exceeds the Overall Limit:
(a) the Board shall, take such steps and do such things, within such timeframes as
the Board considers appropriate, to cause, or to require any Authorised Fund
to cause, the number of Co-operative Shares which are the subject of Fund
Arrangements to be reduced to a number which is less than the Overall Limit;
but
(b) all Fund Arrangements entered into in excess of the Overall Limit shall remain
valid and enforceable;
(c) the rights and powers conferred on Disposing Holders (and on the Authorised
Fund) under Fund Arrangements entered into in excess of the Overall Limit
shall not be affected; and
(d) no person shall be entitled to take any action (whether against, or in respect
of, the Company, any Director, any Shareholder, or the Authorised Fund), in
respect of the entry into Fund Arrangements in excess of the Overall Limit,
and none of the persons referred to in this subclause (d) shall have any liability
in respect of the entry into, or continuation of, such Fund Arrangements.
7.7 Restricted Capacity: No Authorised Fund shall be entitled to hold any Co-
operative Shares for any other purpose, or in any other capacity. If any Authorised
Fund ceases to perform the role described in the Fund Contract (whether as a result
of termination of the relevant Fund Contract or otherwise) the Authorised Fund
must transfer, or cause the Custodian to transfer, all Co-operative Shares or rights or
interests which it may, at the relevant time, hold in any Co-operative Shares to such
person or persons as the Board (by notice in writing to the Authorised Fund) directs.

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FONTERRA SPECIAL MEETING 2021
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7.8 No exercise of voting rights: Each Fund Contract shall contain such mechanisms
as the Board thinks fit which prohibit the Authorised Fund (and any Custodian) from
exercising, Controlling, or exerting any influence over, any voting rights attached
to any Co-operative Shares in which it holds rights or interests from time to time,
or appointing any proxy or Representative to do so on its behalf. No exercise or
purported exercise by any Authorised Fund or any Custodian (or by any person for
or on behalf of such parties, whether as proxy, Representative, or otherwise) of any
voting rights attached to Co-operative Shares shall be recognised or of any effect.
7.9 No alienation of economic rights or establishment of unauthorised funds:
(a) Notwithstanding the provisions for capping of the size of any Authorised
Fund in this clause 7, the Company expects that Shareholders will retain an
economic interest in the Company’s financial performance in proportion to
their shareholding.
(b) To give effect to clause 7.9(a) above, the Board may, by notice to any
Shareholder, prohibit that Shareholder from entering into or giving effect
to, or require that Shareholder to terminate or reverse (or procure the
termination or reversal of) any structure, arrangement or understanding to
which the Shareholder is a party, or of which it forms a part, if in the Board’s
view:
(i) the structure, arrangement or understanding involves (or is likely to
involve) the Shareholder directly or indirectly and whether by one
or more transactions, assigning, transferring, or otherwise Disposing
of, or conferring Control over, any economic or legal right or interest
attaching to, or any benefit derived from or associated with the holding
of, Co-operative Shares (including an entitlement to all or part of any
Distributions, and the benefit of all or part of any changes in the price or
value of Co-operative Shares);
(ii) the structure, arrangement or understanding is of a kind that the
Board determines (in its discretion) involves the giving or receipt of
commercial benefits or rights (other than a bona fide arm’s-length
security arrangement in favour of a lender or a bona fide Farm holding
structure); and
(iii) a material purpose or effect of the agreement, arrangement or
understanding is to provide a mechanism for persons that are not
Shareholders to receive or participate in any economic rights in, or
arising from, Co-operative Shares.
(c) Clauses 8.6 and 8.7 of this Constitution apply to any structure, arrangement
or understanding to which this clause 7.9 applies, as if references in those
clauses to “clause 8.5” were to this clause 7.9. In addition to the consequences
in clause 8.6, the Board may withhold any dividends declared or other
economic rights in or arising from, Co-operative Shares where a Shareholder
has not retained an economic interest in breach of clause 7.9(a).
(d) No person shall be concerned or shall need to make any inquiry in relation
to the exercise of the powers conferred under this clause 7.9, and none of
the Company, any Director, nor any employee of the Company shall have any
liability to any person for, or in connection with, any step taken by the Board
in accordance with this clause 7.9.
This new clause is intended
to prevent the establishment
of unauthorised funds, and
prevent economic interests in
Shares from being transferred
by Shareholders to third
parties except in bona fide
circumstances. For example, the
Board would be able to direct
Shareholders, directly or in a
blanket/general notice, not to
participate in a replacement
Fund that was not approved by
the Board – eg if an overseas
investor sought to buy up
interests in Fonterra. See also
the expanded definition of
“Dispose” in clause 48.1.
The effect of new clause
7.9(c) is that the enforcement
mechanisms available to protect
against alienation of voting
rights are also available to
protect against alienation of
economic rights, and in addition
to losing the vote, the shares
would also lose any dividends.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
8. SHAREHOLDERS’ VOTING ENTITLEMENTS
8.1 Voting in Person or by Representative: At a meeting of Shareholders where voting
is by show of hands or by voice every Shareholder who is supplying Milk to the
Company in the current Season and who is present in person or by Representative
has one vote.
8.2 Number of votes: Subject to clause 8.3 (and except where otherwise provided in
this Constitution), on a poll or postal ballot every Shareholder who is supplying Milk
to the Company in the current Season has one vote for every 1,000 kilograms of
Milksolids obtainable:
(a) from Milk supplied by the Shareholder to the Company during the Season
preceding the taking of the poll or postal ballot; or
(b) if a Shareholder did not supply Milk to the Company during the Season
preceding the taking of a poll or postal ballot, from Milk supplied from the
Farm during that preceding Season from which the Shareholder is now
supplying Milk to the Company,
but in either case excluding Milk supplied to the Company on Contract Supply or in
accordance with either of clauses 2.3(a)(ii) or 2.7, and excluding any amount of Milk
for which the supplier of the Milk does not hold a number of Co-operative Shares in
accordance with the Share Standard.
No change. Supplying
Shareholders’ current voting
entitlements will continue,
under which Shareholders have
the maximum number of votes
if they hold shares that back
their kgMS supplied on a 1:1
basis (ie, the Share Standard).
A Shareholder that holds only
the reduced Minimum Holding
would have 33% of the number
of votes compared to if it held
the full Share Standard.
Shareholders that supply Milk
may appoint an Associated
Shareholder as their proxy with
respect to some or all of their
votes – see clause 8.5. However,
any Shares held by Associated
Shareholders are “dry”, ie they do
not count towards the supplier’s
voting entitlements, except to
the extent permitted under the
Co-operative Companies Act.
8.3 Estimated supply: If in a Season the Farm from which a Shareholder is supplying
Milk to the Company did not supply Milk to the Company during the Season
preceding the taking of a poll or postal ballot then the number of votes shall be
based on the Board’s reasonable estimation of Milksolids obtainable from the Milk
to be supplied by that Shareholder during the Season in which the poll or postal
ballot is taken, but excluding Milk supplied to the Company on Contract Supply
or in accordance with either of clauses 2.3(a)(ii) or 2.7, and excluding any amount
of Milk for which the supplier of the Milk does not hold a number of Co-operative
Shares in accordance with the Share Standard.
8.4 Change in basis of supply: The Company shall, in determining the quantity of
Milksolids obtainable from Milk supplied by the Shareholder to the Company for
the purposes of clause 8.2, take into account any change in the basis of supply used
by the relevant supplier (including but not limited to any cessation or reduction of
supply, and any commencement or termination of Contract Supply).
8.5 Prohibition on assignment or alienation: Subject to any applicable enactment,
and except as permitted by the Board from time to time, no Shareholder may,
directly or indirectly and whether by one or more transactions:
(a) except as permitted under subclause (b), assign, transfer, or otherwise Dispose
of, or confer Control over, any right to exercise any vote attaching to any
Co-operative Shares held by the Shareholder from time to time; or
(b) appoint a proxy or Representative to vote on behalf of the Shareholder at a
meeting of Shareholders,
to or in favour of any person under, or as a result of, any agreement, arrangement or
understanding which, the Board determines (in its discretion):
(c) is not, or is inconsistent with, a bona fide appointment of a proxy or
Representative; or
No change.
See also new clause 7.9, which
is intended to prevent the
establishment of unauthorised
funds, or economic interests in
Shares from being transferred
by Shareholders to third
parties except in bona fide
circumstances.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
(d) involves the giving or receipt of commercial benefits or rights (other than by
reason of a proxy or Representative being an Associated Shareholder),
and in particular no Shareholder may (whether through any arrangement described
in this clause or otherwise) cause or allow any RVP, any Authorised Fund, any
Custodian, or any other entity which the Board determines is performing a similar
role or function, to exercise, Control, or exert influence over, the exercise by any
Shareholder of any such vote.
Shareholders may appoint
Associated Shareholders as
their proxies, despite such
arrangements involving
commercial benefits – but
it must still be a bona fide
appointment.
8.6 Power to require declaration: The Board may at any time and from time to time,
by notice in writing, require any Shareholder to lodge with the Company a statutory
declaration (or other disclosure in a form acceptable to the Board) stating whether
or not the Shareholder has complied, and is complying, with the restrictions in
clause 8.5 (and, for a Permitted Transferee, clause 3.10). On receipt of any such
notice the Shareholder must provide such declaration or disclosure to the Board
(or as the Board directs) within 10 Working Days of the date of that notice. If the
Shareholder fails or refuses to provide such declaration or disclosure in accordance
with this clause the Board shall be entitled to make a determination on the relevant
issue on the basis of the information available to it and (without limiting the
Company’s other rights and remedies) the provisions of clause 8.7 shall apply.
8.7 Consequences: If the Board at any time determines (whether as a result of a
declaration or disclosure under clause 8.6 or otherwise) that any person:
(a) has entered into or is a party to any agreement, arrangement or
understanding of a type prohibited under clause 8.5;
(b) is attempting, or has purported, to exercise any vote, or to Control or exert
influence over any votes, attached to Co-operative Shares as a result of any
such agreement, arrangement or understanding; or
(c) is otherwise circumventing, or attempting to circumvent, the purpose and
intent of the restrictions contained in clause 8.5,
the Board may disallow any votes exercised, or proposed to be exercised, pursuant
to any such arrangement, and the Board’s determination on that issue shall be
conclusive and binding.
This enforcement provision will
continue to apply, and would
also apply to ensuring that
Permitted Transferees continue
to qualify in accordance with the
applicable rules referred to in
clause 3.10.
9. TERMS AND CONDITIONS OF SUPPLY OF MILK BY SHAREHOLDERS
9.1 Shareholders to supply all Milk to the Company: Except as may otherwise
expressly be agreed in writing between a Shareholder and the Company or required
pursuant to and on conditions permitted or required by any enactment, and subject
to this Constitution, each Shareholder is required to make available for supply to
the Company, all Milk produced on each Farm referred to in clause 2.5 and
clause
2.6 except for:
(a) Milk required for the personal use of the Shareholder’s family, employees or by
a Sharemilker or Contract Milker engaged by the Shareholder on that Farm;
(b) Milk required for the raising of calves reared on that Farm;
(c) Milk from that Farm which the Company and the Shareholder have expressly
agreed in writing is not required for supply to the Company;
(d) any Diverted Milk Percentage; and
(e) Milk which the Company has agreed need not be supplied from that Farm in
accordance with clause 2.6 and clause 2.3(a)(ii).
Clause 2.5 is being deleted to
allow Shares to be registered at
a Party level rather than a Farm
level.
This change is to recognise
that Milk may also be retained
for personal use by Contract
Milkers.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
9.2 Notice may not be given if inconsistent with Terms and Conditions: A notice of
intention to cease or reduce the supply of Milk to the Company may not be given by
a Shareholder under clause 3.10 if the giving of such notice would be inconsistent
with the Terms and Conditions on which that Shareholder supplies Milk to the
Company, or would be in breach of a requirement under clause 3, including but not
limited to the requirements in clauses 3.9, 3.10, 3.12, 3.20, 3.21 and 3.22.
9.3 Terms and Conditions of supply: The Board may fix from time to time such
standard Terms and Conditions as it sees fit which shall apply to the supply of Milk
by Shareholders to the Company, in cases where special Terms and Conditions do
not apply.
9.4 Special Terms and Conditions: The Board may fix from time to time special Terms
and Conditions for the supply of Milk to the Company by specified Shareholders
which reflect the costs and benefits to the Company of the supply of that Milk
at different times, of different qualities, at different places and on different
commercial terms from other Milk, and/or arrangements for the Contract Supply of
Milk under clause 3.22, and/or requirements of the Board under clauses 3.9, 3.10,
3.12,
and 3.20 and 3.21.
9.5 Terms and Conditions to be notified: The Company shall notify all Shareholders
in writing of the standard Terms and Conditions and shall notify Shareholders
concerned in writing of special Terms and Conditions fixed by the Board.
9.6 Terms and Conditions binding: The standard or special Terms and Conditions shall
be binding on the Company and on each Shareholder to whom they apply.
9.7 Other Terms and Conditions: The Company may agree such terms for the supply
of Milk by suppliers other than Shareholders as it thinks fit.
Clause 3.21 will be redundant
and is being deleted – see
comments at that clause.
10. PAYMENT FOR MILK SUPPLIED BY SHAREHOLDERS
10.1 Payment for Milk supplied: After each Season the Board shall determine the
payment to be made for Milk supplied by Shareholders during that Season by
reference to such components as shall be identified by the Board, including but
not limited to such adjustments for Milk volumes or such other factors as the
Board determines (including any adjustment the Board considers appropriate for
Shareholders permitted under clause 3.21 to
that hold fewer Co-operative Shares
than required by the Share Standard for that Season). In determining that payment,
the Board shall have regard to the income from all activities of the Company,
including any dividends received or receivable by the Company and any transfers to
or from reserves as the Board, in its absolute discretion, determines are desirable,
less the costs of the Company. The costs of the Company include all manufacturing
costs, principal repayments, interest and financing costs, and other costs directly
attributable to the other activities of the Company.
10.2 Determination of Milk Price: The Company shall maintain, in a form approved
by the Board from time to time, a manual (“Milk Price Manual”) setting out
the policies and methodology for the determination of the Milk Price. The Milk
Price Manual must reflect the application of the Milk Price Principles which,
for the purposes of this Constitution, are deemed to be included in Part A of
this Constitution. The Milk Price must be determined in accordance with the
Milk Price Manual.
Shareholders will no longer be
“required” to hold Shares equal
to the Share Standard.
Fonterra already directly pays
some Sharemilkers and Contract
Milkers part of the milk cheque
that would otherwise be payable
to the supplying Shareholder.
Direct payment arrangements of
that kind could continue to be
entered into.

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FONTERRA SPECIAL MEETING 2021
Amendments to Constitution Explanatory Notes
10.3 Milk Price Panel: The Board shall establish and maintain a committee known as the
“Milk Price Panel” (“Panel”). The following requirements shall apply to the Panel:
(a) The Board shall set the terms of reference for the Panel which must provide
that, for each Season, the Panel will:
(i) supervise the calculation of the Milk Price;
(ii) advise the Company on the application of the Milk Price Manual; and
(iii) recommend to the Board the Milk Price.
(b) The Panel may make recommendations to the Board in respect of the Milk
Price Manual.
(c) The Panel must at all time comply with the following requirements:
(i) it must comprise five members;
(ii) not less than 50% of the members must qualify for appointment as
“independent” (“independent”) members (within the meaning of
any applicable enactment or, if there is no applicable enactment, as
determined by the Board from time to time);
(iii) the Shareholders’ Council is entitled to appoint up to two members (at
least one of whom must be independent) and the remaining members
shall be appointed by the Board; and
(iv) the chairman of the Panel must be independent and shall have no
casting vote.
(d) The Board must identify (and annually disclose) which members it has
determined, in its view, to be independent.
10.4 Special Terms and Conditions: The payment for Milk supplied under special Terms
and Conditions determined pursuant to clause 9.4 may be adjusted by the Board, in
accordance with those Terms and Conditions.
10.5 Shareholder accounts: The Company shall establish an account in respect of
each Shareholder to which the Company shall credit from time to time all amounts
payable by the Company to that Shareholder and may debit from time to time
all amounts payable by the Shareholder to the Company or any subsidiary of the
Company in accordance with the provisions of this Constitution or the Terms and
Conditions.
10.6 Interim payments: The Board may, in its absolute discretion, and in accordance
with the standard or special Terms and Conditions, decide to set and to credit to
Shareholders’ accounts interim part payments of the payment to be made for Milk.
Separate proposed changes
to this clause to address the
requirement for a Ministerial
appointee to the Milk Price Panel
are the subject of Resolution 6
in the Notice of Meeting for the
Annual Meeting.
11. DISTRIBUTIONS
11.1 Power to authorise: Subject to the Act and this Constitution the Board may,
if satisfied on reasonable grounds that the Company will immediately after the
Distribution satisfy the solvency test, authorise Distributions by the Company
at times, and of amounts, and to any Shareholders, as it thinks fit and may do
everything which is necessary or expedient to give effect to any such Distribution.
11.2 Form of Distribution: Subject to the rights of holders of any Shares in a Class and
to any enactment, the Board may make a Distribution in such form as it thinks fit,
but shall not differentiate between Shareholders in a Class as to the form in which a
Distribution is made without the prior approval of the Shareholders.

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11.3 Method of payment: A Distribution payable in cash may be paid in such manner as
the Board thinks fit to the entitled Shareholders or, in the case of joint Shareholders,
to the Shareholder named first in the Share Register, or to such other person and
in such manner as the Shareholder or joint Shareholders may in writing direct. Any
one of two or more joint Shareholders may give a receipt for any payment in respect
of the Shares held by them as joint Shareholders.
11.4 No interest on Distributions: The Company is not liable to pay interest in respect
of any Distribution.
11.5 Unclaimed Distributions: Dividends or other monetary Distributions unclaimed
for more than one year after the date determined for payment, may be used for the
benefit of the Company until claimed. All dividends or other monetary Distributions
unclaimed for more than five years after the date determined for payment may be
forfeited by the Board for the benefit of the Company. The Board shall nevertheless,
at any time after such forfeiture, annul the forfeiture and agree to pay a claimant
who produces satisfactory evidence of entitlement.
12. APPOINTMENT ROTATION AND REMOVAL OF DIRECTORS
12.1 Number of Directors: There shall be not more than 13 Directors until the
conclusion of the 2016 annual meeting of the Company, not more than 12 Directors
until the conclusion of the 2017 annual meeting of the Company, and not more
than 11 Directors thereafter, of whom:
(a) not more than 9 until the conclusion of the 2016 annual meeting, 8 until the
conclusion of the 2017 annual meeting, and 7 thereafter, are Directors elected
by Shareholders in accordance with clauses 12.2 and 33.4 or appointed by the
Board in accordance with clause 33.1; and
(b) not more than 4 are Directors appointed by the Board in accordance with
clause 12.4.
12.2 Election by Shareholders: Subject to clause 12.1, a person may be elected or
removed as a Director by a postal ballot of Shareholders held in accordance with
the written procedures adopted by the Shareholders’ Council from time to time for
holding postal ballots by Shareholders for the election or removal of Directors.
12.3 Qualifications of Directors: No person shall be elected as a Director by
Shareholders or hold office as a Director elected by Shareholders in accordance with
clause 12.1(a) unless he or she has a direct or indirect interest in a Shareholder that
is supplying Milk to the Company which comprises either:
(a) a direct or indirect legal or beneficial interest in that Shareholder (including as
a beneficiary of a trust); or
(b) a right or entitlement to participate (directly or indirectly) in the distributions
of, or made by, that Shareholder,
and, without limiting the entities, arrangements or structures through which any
such interest may arise or be held, a person will be deemed to hold such an interest
if he or she:
(c) is a Shareholder that is supplying Milk to the Company; or
(d) is a shareholder of a company that is a Shareholder that is supplying Milk to
the Company; or
(e) is a member of a partnership that is a Shareholder that is supplying Milk to
the Company.
No person shall take office as a Director unless he or she has signed a
Confidentiality Deed and Indemnity in the form determined by the Board relating to
information he or she may receive in his or her capacity as a Director.
No change. Associated
Shareholders and Permitted
Transferees would not acquire
any particular eligibility to be
elected as directors of Fonterra.
The core eligibility requirement
is the holding of an interest in a
Shareholder “supplying Milk to
the Company”.

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12.4 Appointment by Board: Subject to clause 12.1, the Board may at any time appoint
a person to be a Director for such period, and on such terms, as the Board thinks fit,
provided however that the Board may not alter the rights or powers of a Director
appointed pursuant to this clause. If the Shareholders do not ratify the appointment
of any Director appointed pursuant to this clause by the first annual meeting of
the Company following the appointment of that Director then that Director shall
cease to hold office at the conclusion of that meeting. If a Director is appointed for
a term exceeding three years, then that Director’s appointment shall be ratified by
Shareholders every three years.
12.5 Managing Director: The Board may from time to time appoint one of the Directors
appointed by the Board in accordance with clause 12.4 to the office of managing
Director for such period, and on such terms, as the Board thinks fit and, subject to
the terms of any agreement entered into in any particular case, may revoke such
appointment.
12.6 Continuation of current directors: The persons who are, at the date on which this
Constitution takes effect, the directors of the Company continue in office on the
terms on which each such director holds office at such date.
12.7 Rotation of Directors: At each annual meeting of the Company one third of the
Directors elected by Shareholders pursuant to clause 12.2, or if their number is
not a multiple of three then the number nearest to one third, shall retire from
office. The Directors to retire shall be those who have been longest in office since
their last election. If two or more of those Directors were last elected on the same
day, the Directors to retire shall (unless they otherwise agree among themselves)
be determined by lot. A retiring Director is eligible for re election. Where the
application of this rule would cause an elected Director to serve a term exceeding
three years, then that Director must also retire from office.
13. POWERS OF DIRECTORS
13.1 Management of Company: The business and affairs of the Company shall be
managed by, or under the direction or supervision of, the Board, provided that the
chairperson of the Board shall be a Director elected in accordance with clause 12.2.
13.2 Exercise of powers by Board: The Board may exercise all the powers of the
Company which are not required either by the Act, the Co-operative Companies Act
or this Constitution to be exercised by the Shareholders.
13.3 Delegation of powers: The Board may delegate to a committee of Directors, a
Director, an employee of the Company, or to any other person, any one or more of
its powers, other than a power set out in the second schedule to the Act.
14. EXERCISE OF POWERS OF SHAREHOLDERS
14.1 Powers exercisable by Ordinary Resolution: Unless otherwise specified in the Act
or the Co-operative Companies Act 1996 or this Constitution, a power or right of
approval reserved to Shareholders may be exercised by Ordinary Resolution.

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15. SHAREHOLDER PROPOSALS AND MANAGEMENT REVIEW
15.1 Shareholder proposals: A Shareholder may give written notice to the Board of
a matter which the Shareholder proposes to raise for discussion or resolution at
the next meeting of Shareholders at which the Shareholder is entitled to vote. The
provisions of section 9 of the first schedule to the Act apply to any notice given
pursuant to this clause.
15.2 Management review by Shareholders: The chairperson of a meeting of
Shareholders shall allow a reasonable opportunity for Shareholders at the meeting
to question, discuss, or comment on the management of the Company. The
Shareholders may pass a resolution relating to the management of the Company at
that meeting but the resolution will not be binding on the Board.
16. SHAREHOLDERS’ COUNCIL
16.1 Establishment of Shareholders’ Council: Subject to casual vacancies there shall
be a Shareholders’ Council of not fewer than 25 Councillors which shall be elected
in accordance with the by-laws of the Shareholders’ Council. The Shareholders’
Council shall have the following functions:
(a) working with the Board to develop the Company’s co-operative philosophy;
(b) adopting from time to time such written procedures as the Shareholders’
Council thinks fit for holding a postal ballot of Shareholders for the election
and removal of Directors pursuant to clause 12.2;
(c) approving the Company’s mission statement and values as proposed by the
Board. After such approval, the Company’s mission statement and values may
not be changed by the Board except with the consent of the Shareholders’
Council;
(d) receiving from the Board and reviewing the Board’s statement of intentions
for the performance and operations of the Company for each Season;
(e) subject to any applicable legislative or regulatory requirement and to the
Market Rules, receiving and commenting on reports from the Board on the
Company’s consolidated and key business unit operations at least four times
each Season, such reports to include a commentary on actual achievements
compared with the Board’s statement of intentions for the performance
and operations of the Company for that Season, and the Company’s key
performance indicators;
(f) representing the views of Shareholders;
(g) preparing the Shareholders’ Council’s programme and budget for each Season
and, at each annual meeting of the Company:
(i) presenting that programme and budget to Shareholders for approval;
(ii) reporting on the activities of the Shareholders’ Council in the preceding
Season;
(iii) reporting on the view of the Shareholders’ Council as to the Company’s
direction, performance and operations including a commentary on
actual achievements compared with the Board’s statement of intentions
for the performance and operations of the Company for the most
recently completed Season;
(iv) presenting the Milk Commissioner’s report for the most recently
completed Season provided that, at the Milk Commissioner’s discretion,
the Milk Commissioner may present that report;
Separate proposed changes to
this clause 16 are the subject
of Resolutions 7 and 8 in the
Notice of Meeting for the Annual
Meeting. The version of this
clause shown here is current
as at the date of this Notice of
Meeting, ie it does not reflect
the separate changes proposed
in Resolutions 7 and 8 in the
Notice of Meeting for the Annual
Meeting.

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(v) communicating with and commenting to Shareholders and Sharemilkers
on Company and dairy industry matters in accordance with protocols
agreed between the Board and the Shareholders’ Council;
(h) administering training programmes for prospective Directors and Councillors
and providing to Shareholders learning and development opportunities with a
view to facilitating informed and participating Shareholders;
(i) consulting with the Board in relation to specific projects or activities, if it
considers that the projects or activities warrant discussion;
( j) recommending to the Board, if it decides that circumstances have arisen
which require a report, the commissioning of a special report (whether
internal or independent) on specific projects or activities as identified by the
Shareholders’ Council;
(k) recommending to the Shareholders, if it decides that circumstances have
arisen which require a report, the commissioning of a special report (whether
internal or independent) on specific projects or activities as identified by the
Shareholders’ Council;
(l) calling a special meeting of Shareholders, if the Shareholders’ Council has
serious concerns about:
(i) the Company’s compliance with the co-operative philosophy; or
(ii) whether the Company is achieving its purpose of maximising the wealth
of its Shareholders; or
(iii) the achievement of the Company’s key performance indicators; or
(iv) any other material issue which the Shareholders’ Council considers has a
detrimental effect on the Company,
and the calling of that meeting is supported by a majority of 75% or more of
Councillors;
(m) considering and, in consultation with the Board, proposing to Shareholders
changes to this Constitution;
(n) consulting with the Board in relation to the operation of the Fonterra
Shareholders Market and any Authorised Fund;
(o) consulting with the Board in relation to any changes to the Milk Price Manual
and the Milk Price Principles;
(p) appointing any Valuer and procuring that any such Valuer acts in accordance
with the provisions of this Constitution;
(q) in relation to the Milk Commissioner:
(i) appointing the Milk Commissioner in accordance with clause 17.1;
(ii) giving such assistance to the Milk Commissioner concerning the
performance of its duties as shall seem expedient to the Shareholders’
Council;
(iii) receiving reports from the Milk Commissioner on the status and
outcome of concerns or complaints referred to it;
(iv) receiving and considering recommendations from the Milk
Commissioner for changes to the by-laws of the Milk Commissioner;
(v) monitoring the by-laws of the Milk Commissioner and subject to
clause 17 from time to time amending or fixing the by-laws of the Milk
Commissioner;

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(vi) receiving and, if thought fit, approving the report of the Milk
Commissioner for each Season;
(vii) considering and, if thought fit, approving a draft financial budget
prepared by the Milk Commissioner for each upcoming Season, which is
to then be incorporated into the Shareholders’ Council budget;
(viii) suspending or removing the Milk Commissioner; and
(ix) at any time and from time to time obtaining additional money for
the purposes of the Milk Commissioner by levying the Company, the
amount of any such levy being determined by the Milk Commissioner
and approved by the Shareholders’ Council, which shall be due and
payable by the Company four weeks after a notice in writing requesting
the money has been given to the Company by the Shareholders’ Council.
16.2 Wards: Pursuant to determinations of the Shareholders’ Council:
(a) the area covered by the operations of the Company in New Zealand is divided
into Wards; and
(b) the number of Councillors by whom each Ward is entitled to be represented is
set.
16.3 Review of Wards: The Shareholders’ Council shall from time to time review the
Ward boundaries and Ward representation and determine whether they should
be changed. The Shareholders’ Council may then change the Ward boundaries
and representation having regard, with respect to each Ward, to the number of
Shareholders, the amount of Milksolids supplied and communities of interest,
provided that:
(a) a minimum of one and no more than two Councillors shall be allocated to
each Ward; and
(b) the Shareholders’ Council shall not reduce the number of Wards below 25.
16.4 Election of Councillors: Subject to the provisions of this clause 16, the manner
in which Councillors are nominated, elected and removed by the respective Wards
shall be governed by the by-laws of the Shareholders’ Council. Every election of
Councillors shall be held in the manner for the time being approved pursuant to this
clause. The Shareholders’ Council at the date of this Constitution shall continue in
office.
16.5 Qualifications of Councillors: No person may be elected or hold office as a
Councillor unless he or she:
(a) is a person who would be qualified for election as a Director in terms of clause
12.3;
(b) is not during their tenure as a Councillor, a Director or executive of the
Company or the Milk Commissioner; and
(c) has signed a Confidentiality Deed and Indemnity in the form determined by
the Board relating to information he or she receives in his or her capacity as a
Councillor.
16.6 Councillors to be bound by Constitution: If a Councillor is not a Shareholder, that
Councillor shall, before taking office, execute a document agreeing to be bound by
the provisions of this Constitution.
16.7 By-laws of Shareholders’ Council: Subject to this clause 16, the Shareholders’
Council has the rights, powers, duties and obligations set out in the by-laws of
the Shareholders’ Council. The Shareholders’ Council may with the approval of
Shareholders by Special Resolution amend the by-laws of the Shareholders’ Council
from time to time.

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16.8 Indemnity for Councillors: Each Councillor shall be granted an indemnity by the
Company in respect of liability to any person other than the Company or a related
company. The indemnity will be for any act or omission of the Councillor in his or
her capacity as a Councillor and for costs incurred by the Councillor in defending
or settling any claim or proceeding relating to any such liability. The indemnity will
not cover criminal liability or liability in respect of a breach of any duty owed by the
Councillor to the Company. The form of the indemnity will be determined by the
Board.
16.9 Power to retain advisers: The Shareholders’ Council shall, for the purpose of
performing its functions, have power to retain such legal, accounting, financial and
other advisers as the Chairperson of the Shareholders’ Council acting reasonably
deems fit.
16.10 Board to Provide Information to Shareholders’ Council: The Board will, subject
to all relevant legislative and regulatory requirements and to the Market Rules,
provide the level of information to the Shareholders’ Council that enables the
Shareholders’ Council to fully perform its roles, duties and functions as envisaged
by the Company’s Constitution. In addition the Board will, subject to legislative
and regulatory requirements and the Market Rules, consult with the Shareholders’
Council in relation to matters on which consultation is contemplated in clause 16.1,
including the terms of the Risk Management Policy adopted from time to time by
the Board (and on any changes thereto) in relation to an Authorised Fund
the total
number of Co-operative Shares on issue and the proportion of Co-operative Shares
that are not held by Shareholders that supply Milk to the Company (including Co-
operative Shares that are the subject of Fund Arrangements), and the Board will
take all practical steps to facilitate such consultation. To the extent that information
is provided to the Shareholders’ Council it shall be subject to the Confidentiality
Deed and Indemnity referred to in clause 16.5(c) of this Constitution being entered
into by each Councillor.
16.11 Working Interface between Board and Shareholders’ Council: The Board and
the Shareholders’ Council will comply with the document entitled “Fonterra Board,
Executive and Shareholders’ Council working interface” agreed between the Board
and the Shareholders’ Council from time to time.
The Board would adopt a
Risk Management Policy (in
consultation with the Co-
operative Council) regarding
the total number of Shares
on issue and the proportion
of Shares that are not held by
Shareholders that supply Milk
to the Co-op (including the
proportion of Shares that are
held for the Fund, ie subject to
“Fund Arrangements” under
clause 7).
If the separate proposed changes
to this clause in Resolution
8 are passed at the Annual
Meeting and Resolution 1 is
passed at the Special Meeting,
this clause 16.10 will be
renumbered as clause 16.14 and
the amendments shown here
(relating to the subject-matter
of the Risk Management Policy)
will be made to that renumbered
clause, in addition to the
amendments to that clause
provided for in Resolution 8 at
the Annual Meeting.
17. MILK COMMISSIONER
17.1 Appointment of Milk Commissioner: The Shareholders’ Council shall, in
consultation with the Minister, appoint a Milk Commissioner for such period (not
exceeding two years) and on such terms as the Shareholders’ Council thinks fit.
17.2 Functions and jurisdiction: The Milk Commissioner’s principal functions are to:
(a) consider, at no cost to a complainant Shareholder, Shareholders’ complaints or
disputes which cannot be resolved in accordance with the Company’s internal
complaints procedure, arising out of:
(i) the supply of Milk to the Company pursuant to this Constitution and the
Terms and Conditions; or
(ii) the Board’s determination of the Average Quantity applicable to that
Shareholder; and

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(b) subject to clause 17.3, facilitate the settlement, resolution or withdrawal of
such complaints by agreement, by making non-binding recommendations or
by such other means as seem expedient. In particular, in relation to disputes
under clause 17.2(a)(ii), the Milk Commissioner may, if he or she considers
such action to be fair and equitable as between the Company and the relevant
Shareholder, recommend to the Company that the Company not enforce any
provision of this Constitution relating to the number of Co-operative Shares
that the Shareholder is permitted, or required, to hold where the Company’s
determination of that issue may be affected by the outcome of a dispute
referred to in clause 17.2(a)(ii).
(c) report to the Board and Shareholders’ Council on the status and outcome of
all concerns or complaints referred to the Milk Commissioner.
17.3 Limits on jurisdiction of Milk Commissioner: The Milk Commissioner shall not
have jurisdiction to bind the Company to its recommendations.
17.4 Persons not to be Milk Commissioner: No person shall be appointed as the Milk
Commissioner that is a Director, Councillor or an employee of, or holds any office or
position with the Company or subsidiary of the Company, (nor shall he or she, either
personally or by his or her firm, act in a professional capacity for the Company)
and if any person holding office as Milk Commissioner becomes a person of the
nature referred to in this clause, that person thereupon ceases to be the Milk
Commissioner.
17.5 Company’s response to recommendations of Milk Commissioner: If the
Company does not accept a recommendation made by the Milk Commissioner, then
it shall not be bound to follow that recommendation but shall:
(a) respond to the Milk Commissioner in writing stating the reasons for not
accepting the recommendation;
(b) report to the Shareholders’ Council both:
(i) the substance of the recommendation; and
(ii) the reasons for not accepting the recommendation.
17.6 Milk Commissioner by-laws: Subject to this clause 17, the powers, duties and
obligations of the Milk Commissioner shall be set out in the by-laws fixed by the
Shareholders’ Council from time to time, which shall be binding on the Company.
17.7 Complaints to be in writing: Complaints to the Milk Commissioner are to be made
in writing.
17.8 Company to develop complaints procedure: The Company shall, promptly after
the first meeting of the Board, develop and publish guidelines for the purpose of
dealing with complaints arising out of the supply of Milk to the Company pursuant
to this Constitution and the Terms and Conditions or the issue and surrender of
Co-operative Shares. These guidelines shall be made available to Shareholders on
request free of charge.
18. ALTERATIONS TO PART A OF THIS CONSTITUTION
18.1 Not without support of Shareholders’ Council: Part A of this Constitution (except
clause 16) may not be altered or revoked unless the proposal to alter or revoke Part
A of this Constitution (except clause 16) is supported by a majority of 50% or more
of Councillors.
18.2 Evidence of Shareholders’ Council support: A certificate signed by the
chairperson of the Shareholders’ Council stating the requisite majority of
Councillors support a proposal to alter or revoke Part A of this Constitution and
given to the chairperson of the Board is conclusive evidence of that fact.

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PART B – OTHER PROVISIONS
19. REGISTRATION AS A CO-OPERATIVE DAIRY COMPANY
19.1 Authorisation to register as a Co-operative company: Any Director of the
Company is authorised to make an application for the registration of the Company
as a co-operative dairy company under Part III of the Co-operative Companies Act.
20. VALUER
20.1 Appointment of Valuer: The Shareholders’ Council may, but shall not be obliged
to, appoint a Valuer to estimate the value from time to time of Co-operative
Shares, having regard to the ability of Shareholders to trade Co-operative Shares
between themselves on the Fonterra Shareholders Market, and to the other matters
contained or provided for in this Constitution. Any report of the Valuer on that issue
must confirm that the amount determined by the Valuer is an estimate only, is for
the information of Shareholders, and does not affect or limit the prices at which
Shareholders may sell or purchase Co-operative Shares from time to time.
20.2 Vacancies: The Shareholders’ Council may fill any vacancy in the office of Valuer.
20.3 Valuer’s fees and expenses: The fees, expenses and other terms and conditions of
appointment of the Valuer shall be fixed by the Shareholders’ Council, in a manner
consistent with this Constitution.
20.4 Qualifications of Valuer: A person shall not be appointed or act as Valuer unless
that person:
(a) is a person with a firm of international repute as a valuer of shares in large
widely held companies in the food and primary sectors;
and that person:
(b) is not a Director or employee of, and does not hold any office or position with,
the Company or a subsidiary of the Company; and
(c) is not, either personally or by his or her firm, engaged by the Company or a
subsidiary of the Company in any capacity that, in the reasonable view of the
Shareholders’ Council, compromises the independence of the Valuer; and
(d) does not, either personally or by his or her firm, benefit financially from
the supply of milk within the dairy industry of any country including New
Zealand in any way that, in the reasonable view of the Shareholders’ Council,
compromises the independence of the Valuer; and
(e) is not a Shareholder or Councillor; and
(f) is not the Milk Commissioner; and
(g) has signed a Confidentiality Deed and Indemnity in the form determined
by the Board relating to information that person receives in that person’s
capacity as Valuer.
20.5 Vacancy of Office: The Valuer ceases to be the Valuer if:
(a) the Valuer is not qualified to hold the office of Valuer; or
(b) the Shareholders’ Council appoints another person to be the Valuer; or
(c) the Valuer has given notice to the Company resigning as Valuer; or
(d) the Valuer is removed from office by the Shareholders’ Council.
20.6 Company to provide information: The Company shall, subject to all applicable
legislative and regulatory requirements and to the Market Rules, promptly provide
the Valuer with any information the Valuer may reasonably require for the purposes
of this clause 20.

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21. SHARES GENERALLY
21.1 No pre-emptive rights: The provisions of sections 45(1) and 45(2) of the Act shall
not apply to any issue or proposed issue of Shares by the Company.
21.2 Board may issue Shares and other securities: The Board may issue Shares,
securities that are convertible into or exchangeable for Shares, or options to acquire
Shares, to any person in any number the Board thinks fit. In addition, different
Classes of Shares may be issued by the Company in accordance with the provisions
of this Constitution. Without limiting the Classes which may be issued, any Share
may be issued upon the basis that it:
(a) confers preferential rights to distributions of capital or income;
(b) confers special, limited or conditional voting rights;
(c) does not confer voting rights; or
(d) is redeemable in accordance with section 68 of the Act.
No issue may be made under this clause 21.2 which will jeopardise the Company’s
status as a co-operative company.
21.3 Bonus issues: Without limiting the rights of the Board under any enactment, the
Board may resolve to apply any amount which is available for Distribution:
(a) in paying up in full Shares or other securities of the Company to be issued
credited as fully paid to:
(i) the Shareholders who would be entitled to that amount if it were
distributed by way of dividend, and in the same proportions; or
(ii) Shareholders who hold Shares of the same Class, in proportion to the
Shares held by those Shareholders of that Class; or
(iii) Shareholders who hold Shares of the same Class, in proportion to the
quantity of Milksolids obtainable from Milk supplied by each such
Shareholder to the Company or the value of, or profit derived from, the
supply of Milk, by Shareholders of that Class to the Company; or
(iv) the holders of any other securities of the Company who are entitled
by the terms of issue of such securities to participate in bonus issues
by the Company, whether at the time the bonus issue is made to the
Shareholders, or at some later time, in accordance with their respective
entitlements; or
(b) in paying up any amount which is unpaid on any Shares held by any
Shareholder,
or partly in one way and partly in the other.
21.4 Payment for the issue of Shares: The Board may issue Shares on the basis that
the consideration for the issue of those Shares may be debited to an account of the
Shareholder held with the Company and may require payment in cash of the issue
price at such time or times as the Board shall specify.
21.5 Consolidation and subdivision of Shares: The Board may:
(a) consolidate, or consolidate and divide, the Shares or any Class; and
(b) subdivide the Shares or any Class,
in each case in proportion to those Shares or the Shares in that Class, as the case
may be, and in each case without cancellation or issue of Shares.

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21.6 Shares in lieu of dividends: The Board may exercise the right conferred by section
54 of the Act to issue Shares to any Shareholders, wholly or partly, in lieu of
proposed dividends or proposed future dividends.
21.7 Fractional entitlements: The Board may, in exercising any powers pursuant to
this Constitution relating to Shares, deal with fractional entitlements to Shares or
other securities in such manner as the Board considers equitable and as being in the
interests of the Company.
22. SHAREHOLDING STATEMENTS
22.1 Statements for lenders: If requested by a Shareholder by written notice to the
Company to provide the information contained in the statements referred to in
clauses 3.13 and 3.16 to any lender to that Shareholder specified in that notice, the
Company may, at its discretion, provide that information.
23. ACQUISITION, REDEMPTION AND HOLDING OF OWN SHARES
23.1 Power to acquire, redeem and hold Shares: The Company may:
(a) purchase or otherwise acquire Shares from one or more Shareholders;
(b) require or accept the surrender of Shares, or redeem any redeemable Shares,
from one or more Shareholders; and
(c) hold any Shares surrendered, purchased, acquired or redeemed,
in accordance with the provisions of the Co-operative Companies Act (including
sections 21(1)(a) and (b)) and any other enactment, and subject to the restrictions
of the Act, the Co-operative Companies Act, and this Constitution, and otherwise
on such terms as the Board may from time to time determine.
23.2 Transfer of own Shares: The transfer by the Company of a Share held pursuant to
the provisions of the Act, the Co-operative Companies Act and this Constitution
shall for the purpose of clause 21 constitute an issue of a Share.
24. ALTERATION OF SHAREHOLDER RIGHTS
24.1 Special Resolution required: Any action affecting the rights, privileges, limitations
or conditions attached to any Shares by this Constitution or the Act shall be
approved by Special Resolution of each Interest Group. The holding of a greater
or lesser number of Co-operative Shares than required by
the Share Standard
or Minimum Holding in accordance with clause 3 is not a right attached to Co-
operative Shares, and neither is being an Associated Shareholder or Permitted
Transferee, or making Contract Supply. The Shareholders at any time that are
Associated Shareholders or Permitted Transferees, making Contract Supply,
or holding a greater or lesser number of Co-operative Shares than required by

the Share Standard or Minimum Holding in accordance with clause 3, shall not
constitute separate Interest Groups, nor shall the Co-operative Shares held by any
of them constitute a separate Class or separate Classes.
This amendment is to confirm
that persons holding more or
less than the Minimum Holding
are not a separate class of
Shareholders, and neither are
Associated Shareholders (ie
Farm Lessors, Sharemilkers and
Contract Milkers) or Permitted
Transferees.
Shareholders will no longer
be “required” to hold Shares
matching the Share Standard
– instead there will be a 33%
Minimum Holding for supplying
Shareholders.

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24.2 Meetings of Interest Groups: The provisions of this Constitution relating to
meetings of Shareholders shall apply to separate meetings of the Shareholders in
each Interest Group, except that:
(a) the necessary quorum shall be two persons holding, or representing the
holders of, not less than one third of the Shares of the relevant Interest Group;
(b) any Shareholder in the Interest Group present in person or by Representative
may demand a poll; and
(c) if the result of this clause 24.2 would be that, in relation to any particular
meeting of an Interest Group, there would be no Shareholders who are
entitled to vote at the relevant meeting, each Shareholder in that Interest
Group shall have one vote.
24.3 Issue of further Shares: The issue of further Shares ranking equally with, or
in priority to, any existing Shares, whether as to voting rights, Distributions or
otherwise, is deemed not to be an action affecting the rights attaching to the
existing Shares of that Class.
25. EQUITABLE INTERESTS IN SHARES
25.1 No notice of trusts: Subject to clause 25.3, no notice of a trust, whether express,
implied, or constructive, may be entered on the Share Register.
25.2 No recognition of equitable interests: Subject to clause 25.3, except as required
by law, no person shall be recognised by the Company as holding any Share upon
trust and the Company shall not be bound by, nor be compelled to recognise (even
after notice), any equitable, contingent, future or partial interest in any Share (or
in any rights attaching to a Share, or in any benefit derived from or associated with
the holding of a Share), or any interest in any fraction or part of a Share or (except
as provided by this Constitution or by law) any other rights in respect of any Share,
except an absolute right of the registered holder to the entire Share and all rights
attaching to it and benefits derived from or associated with the holding of the
Share.
These provisions are intended
to support the new controls on
alienation of economic interests
in clause 7.9.
25.3 Recognition of Fund interests: To the extent permissible by law the Company
may establish and maintain systems and processes for recording any rights or
interests granted under Fund Arrangements entered in to with an Authorised Fund,
and may provide access to that data to the Operator from time to time, and each
Shareholder irrevocably consents to the provision of that data to the Operator.
26. CALLS ON SHARES
26.1 Consideration payable on issue: Unless the Board decides otherwise, the amount
payable for the issue of each Share will be payable in full to the Company at its
registered office on the date of issue of that Share.
26.2 Consideration payable by instalments: Notwithstanding clause 26.1, the Board
may, for so long as a Shareholder supplies Milk to the Company, agree to the
amount payable for the issue of each Co-operative Share being made payable by
such instalments and on such terms (including the payment of interest) as the
Board thinks fit and by deducting such amounts from time to time from any amount
payable by the Company to the Shareholder. If a Shareholder ceases to supply Milk
to the Company or has failed to comply in any material respect with the Terms and
Conditions on which that Shareholder supplies Milk to the Company the Board
may make a call of any amount unpaid on any Co-operative Shares held by that
Shareholder in accordance with clause 26.3.

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26.3 Board may make calls: The Board may, from time to time, make such calls as it
thinks fit upon the Shareholders in respect of any amounts unpaid on any Shares
held by them which are not made payable at fixed times by the terms of issue of
those Shares. A call may be made payable by instalments. The Board may revoke or
postpone any call.
26.4 Time of call: A call is deemed to be made at the time when the resolution of the
Board making the call is passed.
26.5 Fixed instalments deemed calls: An amount which, by the terms of issue of a
Share, is payable on allotment or at a fixed date is deemed for the purposes of this
Constitution to be a call duly made and payable on the date on which the amount is
payable.
26.6 Notice of call: At least 14 Working Days’ notice of any call shall be given to the
holder of the Share in respect of which the call is made, specifying the time and
place of payment.
26.7 Differential calls: The Board may, on the issue of Shares, differentiate between
Shareholders as to the amounts to be paid in respect of Shares and the times of
payment of such amounts.
26.8 Manner of payment: A Shareholder by whom a call is payable shall pay the amount
of the call to the Company at the time and place specified by the Board.
26.9 Joint Shareholders: Joint Shareholders are jointly and severally liable to pay all
calls in respect of Shares registered in their names.
26.10 Default interest: If a call in respect of a Share is not paid on or before the due date,
the Shareholder by whom the call is payable shall pay interest on the call from the
due date to the date of actual payment at such rate as the Board may reasonably
determine, unless the Board waives payment of interest wholly or in part.
26.11 Proceedings for recovery of call: In any proceedings for recovery of a call:
(a) it is sufficient to prove that:
(i) the name of the relevant Shareholder is entered in the Share Register
as the holder, or as one of the holders, of the Shares to which the call
relates; and
(ii) except in relation to any amount which, by the terms of issue of a Share,
is payable on allotment or at a fixed date, the resolution making the call
is entered in the Records and notice of the call has been duly given,
and proof of the matters mentioned in this clause is conclusive evidence of
the debt; and
(b) it is not necessary to prove the appointment or qualification of any member of
the Board which made the call nor any other matter.
26.12 Payment in advance of calls: The Company may receive from any Shareholder in
advance any amount uncalled and unpaid upon any Shares held by that Shareholder
and may, until the date on which the amount becomes payable pursuant to a call,
pay interest on the amount at such rate as the Board and the Shareholder agree.
26.13 Order of Surrender of Co-operative Shares: At any time that a Shareholder is
required to surrender Co-operative Shares under this Constitution, the Board may,
in accordance with its procedures established from time to time, require that certain
Co-operative Shares be surrendered prior to other Co-operative Shares.

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27. FORFEITURE OF SHARES
27.1 Notice requiring payment of call: If a Shareholder fails to pay any call or
instalment of a call on the due date, the Company may at any time thereafter by
written notice to that Shareholder require payment of the amount unpaid together
with any accrued interest and all expenses incurred by the Company by reason of
such non-payment.
27.2 Contents of notice: The notice shall specify a further date (not earlier than
10 Working Days after the date of service of the notice) on or before which the
payment is to be made, and shall state that, if payment is not made by the specified
date, the Share in respect of which the call or instalment of a call is due, is liable to
be forfeited.
27.3 Forfeiture for non-payment: If payment is not made by the date specified in
the notice then, at any time thereafter before the payment required by the notice
has been made, any Share in respect of which the notice has been given may be
forfeited by a resolution of the Board to that effect. The forfeiture shall include
all dividends declared in respect of the forfeited Share and not paid before the
forfeiture.
27.4 Notice of forfeiture: When a Share has been forfeited, the Company shall give
written notice of the resolution to the Shareholder in whose name the Share stood
immediately prior to the forfeiture, and shall enter in the Share Register details of
the forfeiture.
27.5 Cancellation of forfeiture: A forfeiture may be cancelled at any time before the
sale of the forfeited Share, on such terms as the Board thinks fit.
27.6 Effect of forfeiture: The holder of a Share which has been forfeited ceases to be a
Shareholder in respect of the forfeited Share, but remains liable to the Company for
all money payable in respect of the forfeited Share.
28. LIEN ON SHARES AND PAYMENTS
28.1 Lien on Shares and other payments: The Company has a first and paramount lien
upon each Share, the proceeds of sale of the Share, all Distributions made in respect
of the Share, and any other amount payable by the Company to a Shareholder for:
(a) all unpaid calls owing in respect of the Share and interest thereon (if any); and
(b) any amount which the Company may be called upon to pay under any
legislation in respect of the Share, whether or not the due date for payment
thereof has arrived; and
(c) all liabilities and obligations of the Shareholder to the Company, whether
solely or jointly with any other person, and whether or not the date for
payment, fulfilment or discharge thereof has arrived, in relation to the
purchase or subscription of Co-operative Shares or Peak Notes
.
28.2 Waiver of lien: Unless otherwise agreed between the Company and the relevant
Shareholder, the registration of a transfer of a Share shall operate as a waiver of any
lien which the Company may have on that Share, except as provided in clauses 31.1
and 32.1.
28.3 Deduction of money: The Company may deduct from a Distribution or any other
amount payable by the Company to a Shareholder any amount which is due and
payable by the Shareholder to the Company on account of calls in relation to any
Shares held by that Shareholder or otherwise in relation to any liability or obligation
of the Shareholder to the Company.
This reference to Peak Notes
is being deleted because it is
no longer relevant, as no Peak
Notes remain outstanding and
no new Peak Notes are being
issued.

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29. SALE OF SHARES SUBJECT TO FORFEITURE OR LIEN
29.1 Company may sell Shares: The Company may sell any forfeited Share, or any Share
on which the Company has a lien, in such manner as the Board thinks fit, but the
Company shall not sell any Share:
(a) if the purchaser would after that sale hold more Co-operative Shares than
permitted by clause 3;
(b) unless the amount in respect of which a lien exists is due and payable;
(c) until the expiry of 10 Working Days after written notice demanding payment
of the amount owing has been given to the person entitled to receive notice
of meetings of Shareholders in respect of the Shares.
29.2 Proceeds of sale: The net proceeds (after deduction of any expenses) of the sale
of a forfeited Share or of any Share sold for the purpose of enforcing a lien shall be
applied in or towards satisfaction of any unpaid calls, interest or other amount in
respect of which any lien exists (as the case may require). The residue, if any, shall
be paid to the holder of the Share at the time of its forfeiture or, in the case of a
Share sold for the purpose of enforcing a lien, the holder immediately prior to the
sale or, if applicable in either case, to the Personal Representative of the holder.
29.3 Evidence: A certificate by a Director that any power of sale has arisen and is
exercisable by the Company under this Constitution, or that a Share has been forfeited
on the date stated in the certificate, shall be conclusive evidence of those facts.
29.4 Sale procedure: For giving effect to any sale after forfeiture of any Share or for
enforcing a lien over any Share, the Board may authorise any person to transfer any
Share to the purchaser. The purchaser shall be registered as the holder of the Share
and shall not be bound to see to the application of the purchase money, and the
title of the purchaser shall not be affected by any irregularity or invalidity in relation
to the sale. The remedy of any person having a cause of action in relation to the sale
is in damages only and solely against the Company.
30. TRANSFER OF CO-OPERATIVE SHARES
30.1 Right to transfer: Subject to any restrictions contained in this Constitution, a
Shareholder or Personal Representative may transfer any Co-operative Share:
(a) under a system of transfer approved under section 7 of the Securities Transfer
Act 1991 376 of the Financial Markets Conduct Act 2013 or any replacement
legislation which is applicable to the Company;
(b) under any other share transfer system which operates in relation to the
trading of Co-operative Shares on the Fonterra Shareholders Market; or
(c) by an instrument of transfer which complies with this Constitution.
These amendments are to
recognise that Co-operative
Shares may be transferred in
accordance with a settlement
system approved under the
Financial Markets Conduct Act
2013, which has replaced the
previous enactment referred to
here.
30.2 Method of Transfer: A Co-operative Share which is disposed of in a transaction
which complies with the requirements of a system of transfer authorised under
clauses 30.1(a) or (b) may be transferred in accordance with the requirements
of that system. Where an instrument of transfer executed by a transferor would
have complied with the requirements of such a system provisions of the Securities
Transfer Act 1991 if it had been executed in New Zealand, it may nevertheless be
registered by the Company if it is executed in a manner acceptable to the Company
or the share registrar from time to time appointed by the Company.
This amendment is to align with
the amendment at clause 30.1
above, ie that the Securities
Transfer Act 1991 has been
replaced and no longer applies to
systems for share transfers.
30.3 Other forms of transfer: An instrument of transfer to which the provisions of
clause 30.1 are not applicable shall:
(a) be in any common form or any other form which the Board may approve;
(b) be signed or executed by or on behalf of the transferor; and
(c) if registration as holder of the Co-operative Share imposes a liability on the
transferee, be signed or executed by or on behalf of the transferee.

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30.4 Restrictions on Transfer: No Co-operative Shares may be transferred by a
Shareholder to:
(a) any person who is not:
(i) a Shareholder or Permitted Transferee;
(ii) a person whose application to become a Shareholder has been accepted
in writing by the Company in accordance with clause 2.3; or
(iii) a Custodian (but only for the purposes of carrying out duties under
clauses 6 and 7); or
(b) a Shareholder who, following the transfer, would hold more than the
maximum number of Co-operative Shares that the Shareholder is permitted to
hold under clause 3 (but this subclause (b) does not apply to a Custodian for
the purposes of carrying out duties under clauses 6 and 7).
Shares may be transferred by
ceased Shareholders to their
Permitted Transferees – see
clause 3.10.
This clause 30.4(a)(ii) permits
Associated Shareholders (if they
have been approved to become
Shareholders) to buy Shares,
including directly on the FSM.
The references to the Custodian
are still relevant despite the
Fund being capped, because
the Custodian will continue to
hold shares (as it currently does)
for the RVP that operates to
provide liquidity in the Fonterra
Shareholders’ Market.
30.5 Transfer to a Sharemilker: Notwithstanding clause 30.4(a), a Shareholder
may transfer Co-operative Shares to a Sharemilker subject to satisfaction of
the condition that the Shareholder and the Sharemilker comply with any rules
established by the Board from time to time in relation to the transfer of Co-
operative Shares to Sharemilkers, which rules may include provisions requiring
the Shareholder and the Sharemilker to enter into agreements or deeds with each
other and with the Company, and requiring the Shareholder to retain at least 1 Co-
operative Share.
No change is required to
this clause. The further rules
contemplated by this clause
(which is permitted under
section 44 of the Co-operative
Companies Act) will sit
alongside the rules referred to in
clause 3.4.
30.6 Delivery to Company: Except where the instrument of transfer is of the type
permitted under clauses 30.1(a) or (b), an instrument transferring Co-operative
Shares shall be delivered to the Company or to the agent of the Company who
maintains the Share Register and the transferee shall provide such evidence as the
Board or the agent reasonably requires to prove the title of the transferor to, or
right of the transferor to transfer, the relevant Co-operative Shares.
30.7 Board may refuse to register: Subject to section 84 of the Act (which imposes
certain procedural requirements on a board), the Board may refuse to register a
transfer of any Co-operative Share if:
(a) the transfer is prohibited by clause 30.4;
(b) in the Board’s opinion the transfer is prohibited by law or does not comply
with the Market Rules;
(c) the Company has a lien on the Co-operative Share;
(d) the transferor has any liability or obligation to the Company, whether solely
or jointly with any other person, and whether or not the date for payment,
fulfilment or discharge thereof has arrived, including where the Co-operative
Share is not fully paid up (whether by way of consideration for the issue of
the Co-operative Share or in respect of sums payable by the holder of the
Co-operative Share in accordance with the Constitution) or any instalments
payable on that Co-operative Share remain outstanding (whether due or not);

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(e) the transferor has entered in to Fund Arrangements in relation to the relevant
Co-operative Share, unless the Board is satisfied that any obligations of the
Shareholder under those arrangements will be satisfied, extinguished, or
assumed by the transferee at, or prior to, registration of the relevant transfer;
(f) the instrument of transfer is not accompanied by any evidence which the
Board reasonably requires to prove the title of the transferor to, or right of the
transferor to transfer, the Co-operative Share and any other documentation
required by the Board from time to time;
(g) the Board, in its absolute discretion, believes that the proposed transferee is
either not a desirable person to become a Shareholder or that registration of
the transfer would not be in the best interests of the Company;
(h) the instrument of transfer and any other documentation required has not
been provided or has not been duly executed;
(i) the transferee has failed to comply with any request to identify the current or
intended beneficial owner of the Share subject of the transfer;
( j) in the Board’s opinion the transfer does not comply with any share trading
policy adopted by the Board from time to time; or
(k) the transfer would cause the transferor to be in breach of any terms set under
clause 3 or of any Terms and Conditions applicable to the transferor,
provided that the Board resolves to exercise its power pursuant to this clause within
30 Working Days after receipt of the relevant transfer and written notice of the
resolution is sent to the transferor and to the transferee within five Working Days of
the resolution being passed by the Board.
30.8 When transfer effective: A transferor of a Co-operative Share is deemed to remain
the holder of the Co-operative Share until the name of the transferee is entered in
the Share Register in respect of the Co-operative Share.
30.9 Company to retain transfer: If the Company registers a transfer it shall retain the
instrument of transfer.
30.10 Multiple registers: The Share Register may, by resolution of the Board, be divided
into two or more registers, which may be kept in different places.
30.11 Securities other than Co-operative Shares: The provisions of this clause 30 shall
apply, with any necessary modifications, to Securities of the Company other than
Co-operative Shares except to the extent (if any) provided otherwise by the terms of
issue of such Securities, by the Market Rules, or by law.
31. TRANSMISSION OF SHARES
31.1 Transmission on death of Shareholder: If a Shareholder dies the survivor, if the
deceased was a joint Shareholder, or the Personal Representative, shall (subject to
clause 25.3) be the only persons recognised by the Company as having any title
to or interest in the Shares of the deceased Shareholder, but nothing in this clause
shall release the estate of a deceased joint Shareholder from any liability in respect
of any Share, or constitute a release of any lien which the Company may have in
respect of any Share.

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32. PERSONAL REPRESENTATIVES
32.1 Rights of Personal Representatives: A Personal Representative of a Shareholder:
(a) is entitled to exercise all rights (including without limitation the rights
to receive Distributions, to attend meetings and to vote in person or by
Representative), and is subject to all limitations, attached to the Shares held
by that Shareholder; and
(b) is entitled to be registered as holder of those Shares, but such registration
shall not operate as a release of any rights (including any lien) to which the
Company was entitled prior to registration of the Personal Representative
pursuant to this sub-clause.
32.2 Joint Personal Representatives: Where a Share is subject to the control of two
or more persons as Personal Representatives, they shall, for the purposes of this
Constitution, be deemed to be joint holders of the Share.
33. GENERAL PROVISIONS RELATING TO DIRECTORS
33.1 Casual vacancies: Subject to clause 12.1, the Board may at any time appoint
a person to fill a casual vacancy in the Directors to be elected by Shareholders
pursuant to clause 12.2 who is qualified in terms of clause 12.3 to be a Director and
shall appoint such a person if a casual vacancy would otherwise continue for six
months or more. A Director so appointed holds office only until the conclusion of
the next annual meeting of the Company but is eligible for re-election.
33.2 Exceptions to rotation: In determining the Directors who are to retire by rotation
at each annual meeting of the Company pursuant to clause 12.7:
(a) a Director who is retiring pursuant to clause 33.1 is not liable to retire by
rotation or be taken into account in calculating the number of Directors to
retire; and
(b) a Director who is retiring pursuant to clause 33.5 shall be taken into account
in calculating the number of Directors to retire, but shall not be counted as
one of the Directors retiring unless he or she is also due to retire by rotation.
33.3 [Not used] This unused clause number
relates to a provision that was
deleted in the 2016 Governance
and Representation Review
amendments.
33.4 Nomination of Directors: Notwithstanding anything in clauses 12.7 or 33.1, no
person may be elected as a Director by a postal ballot of Shareholders in accordance
with clause 12.2 unless that person qualifies to be appointed as a Director in terms
of clause 12.3 and has been nominated in accordance with the written procedures
adopted by the Shareholders’ Council in accordance with clause 12.2 for holding
postal ballots of Shareholders for the election or removal of Directors. Notice of
every valid nomination of a Director received by the Company before the closing
date for nominations shall be sent by the Company to all persons entitled to vote
in the postal ballot in accordance with the written procedures adopted by the
Shareholders’ Council in accordance with clause 12.2.

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33.5 Vacation of office: A Director ceases to be a Director if he or she:
(a) retires by rotation pursuant to clause 12.7 and is not re-elected or deemed to
have been re-elected; or
(b) is removed from office by an Ordinary Resolution; or
(c) dies, or becomes mentally disordered or subject to a property order or
personal order made under the Protection of Personal and Property Rights Act
1988; or
(d) resigns by written notice delivered to the Company at its address for service
or at its registered office (such notice to be effective at the time when it is so
received unless a later time is specified in the notice); or
(e) becomes disqualified from being a Director pursuant to the Act or this
Constitution; or
(f) becomes bankrupt or makes an arrangement or composition with his or her
creditors generally; or
(g) has for more than three months been absent without approval of the Board
from meetings of the Board held during that period.
33.6 Timing of retirement and appointment: If:
(a) a Director retires at an annual meeting of the Company and is not re-elected
or deemed to be re-elected in accordance with this Constitution, the Director
shall remain in office until, and his or her retirement shall take effect at, the
conclusion of that annual meeting;
(b) a Director is removed from office at a meeting of Shareholders by Ordinary
Resolution, the Director shall remain in office until, and his or her removal
shall take effect at the conclusion of the meeting;
(c) a person who is not already a Director is elected as a Director by a postal
ballot of Shareholders prior to an annual meeting of the Company, that person
shall take office as a Director at the conclusion of that annual meeting.
34. REMUNERATION AND OTHER BENEFITS OF DIRECTORS
34.1 Power to authorise: Except in the case of Directors appointed by the Board in
accordance with clause 12.4 the Board may not exercise the power conferred
by section 161 of the Act to authorise any payment or other benefit of the kind
referred to in that section to or in respect of a Director in his or her capacity as such,
without the prior approval of the Shareholders, except as provided in this clause 34.
There is, at the date this Constitution takes effect, and there shall continue to be, a
committee of six Shareholders (“Directors’ Remuneration Committee”) elected
by postal ballot of Shareholders. The provisions of this Constitution relating to the
appointment, rotation and removal of Directors shall apply to the appointment,
rotation and removal of members of the Directors’ Remuneration Committee, with
necessary modifications. The Board shall consider and recommend to Shareholders
for their approval the form and amount of the remuneration to be paid to
members of the Directors’ Remuneration Committee. The Directors’ Remuneration
Committee shall consider and recommend the form and amount of Directors’
remuneration to the Shareholders for their approval. No such recommendation
may be made which would result in any change to the terms of the remuneration
for any Director appointed in accordance with clause 12.4. The Board may exercise
the power conferred by section 161 of the Act to authorise any payment or other
benefit of the kind referred to in that section to or in respect a Director appointed
by the Board pursuant to clause 12.4.

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34.2 Payment of expenses: Notwithstanding the provisions of clause 34.1, Directors
are entitled to be paid for all travelling, accommodation and other expenses
properly incurred by them in attending meetings of the Board, or any committee of
the Board, or meetings of Shareholders, or in connection with the business of the
Company.
34.3 Special remuneration: The Board may authorise the Company to pay special
remuneration to any Director who is, or has been, engaged by the Company to carry
out work in a capacity other than that of Director.
34.4 Special skills: The Board may authorise the Company to pay greater remuneration
to a Director who is called upon to utilise special skills for the benefit of the
Company.
35. INDEMNITY AND INSURANCE
35.1 Indemnity of Directors: Every Director shall be indemnified by the Company to
the maximum extent permitted by section 162 of the Act and this indemnity shall
continue in force, despite any subsequent revocation or amendment of this clause,
in relation to any liability which arises out of any act or omission by a Director prior
to the date of such revocation or amendment.
35.2 Other indemnities: The Company may, with the prior approval of the Board,
indemnify a director of a related company, or an employee of the Company
or a related company to the extent permitted by section 162 of the Act.
35.3 Insurance: The Company may, with the prior approval of the Board, effect
insurance for a Director or employee of the Company or a director or employee
of a related company, to the extent permitted by section 162 of the Act.
36. PROCEEDINGS OF BOARD
36.1 Third schedule to Act to apply: The provisions of the third schedule to the Act
(relating to proceedings of a board) apply to the Company, except to the extent
expressly negated, altered, or added to by this Constitution.
36.2 Notice of meeting: Not less than two days’ notice of a meeting shall be given to
each Director (other than a Director who has waived that right). A notice of meeting
shall specify the date, time and place of the meeting and, in the case of a meeting
by means of audio, or audio and visual, communication, the manner in which each
Director may participate in the proceedings of the meeting. Notice to a Director of a
meeting may be:
(a) given to the Director in person by telephone or other oral communication;
(b) delivered to the Director;
(c) posted to the address given by the Director to the Company for such purpose;
(d) sent by facsimile transmission to the facsimile telephone number given by the
Director to the Company for such purpose; or
(e) sent by electronic means in accordance with any request made by the Director
from time to time for such purpose;
and is deemed to be given:
(f) in the case of oral communication, at the time of notification;
(g) in the case of delivery, by handing the notice to the Director or by delivery
of the notice to the address of the Director;
(h) in the case of posting, three days after it is posted;

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(i) in the case of facsimile transmission, when the Company receives a
transmission report by the sending machine which indicates that the
facsimile was sent in its entirety to the facsimile telephone number given
by the Director;
( j) in the case of electronic means, at the time of transmission;
but the forgoing provisions relating to the timing, method and giving of notice
of meeting may be amended or applied in such manner as the Directors may
unanimously resolve from time to time.
36.3 Director may convene meeting: A Director or, if requested by a Director to do so,
an employee of the Company, may convene a meeting of the Board by giving notice
in accordance with clause 36.2.
36.4 Committees: A committee of Directors shall, in the exercise of the powers
delegated to it, comply with any procedural or other requirements imposed on it
by the Board. Subject to any such requirements, the provisions of this Constitution
relating to proceedings of Directors apply, with appropriate modification, to
meetings of a committee of Directors.
37. MEETINGS OF SHAREHOLDERS
37.1 Annual meetings: The Company shall hold an annual meeting of Shareholders in
accordance with section 120 of the Act.
37.2 Special meetings: A special meeting of Shareholders entitled to vote on the issue:
(a) may be called by the Board at any time;
(b) shall be called promptly by the Board on the written request of the
Shareholders’ Council, if the calling of the meeting is supported by 75% or
more of the Councillors;
(c) shall be called promptly by the Board on the written request of Shareholders
holding Shares carrying together not less than 5% of the voting rights entitled
to be exercised on any of the questions to be considered at the meeting.
37.3 Time and place of meetings: Each meeting of Shareholders shall be held at such
time and place as the Board appoints.
37.4 Alternative forms of meeting: A meeting of Shareholders may be held either:
(a) by a number of Shareholders, who constitute a quorum, being assembled
together at the place, date and time appointed for the meeting; or
(b) if determined by the Board, by means of audio, or audio and visual,
communication by which all Shareholders participating and constituting
a quorum, can simultaneously hear each other throughout the meeting.