To approve the proposed Constitution changes, certain votes will be required of shareholders at the Special Meeting.
The Companies Act and Zespri’s current Constitution require that amendments to the Constitution must be approved by a special resolution of shareholders (75 percent approval of those who vote) in accordance with the current production-based voting cap.
The Kiwifruit Export Regulations require changes to the Zespri Constitution to introduce the share cap and dividend cap to also be approved by 75 percent of those who vote. All shareholders (producers and non-producers) vote on a one-vote-per share basis.
INTEREST GROUP VOTE
Under The Companies Act, shareholder interest groups also have a separate vote. The resolution must achieve 75 percent support among those who vote on a one-vote-per-share basis.
The definition of an interest group is based on a legal test. It applies if there is a group of shareholders to which a proposal for an amendment to the Constitution has a unique effect on the rights attached to their shares.
Zespri has received independent legal advice that the proposed changes to Zespri’s Constitution create two interest groups. These groups are:
- Producer shareholders – whose voting entitlements and share entitlements will be affected.
- Non-producer shareholders – whose rights to dividends will be affected.
The key reason is, in summary, that the Regulations allow different changes to be made applying to each group – share cap and voting cap changes for producers only, and dividend cap changes for non-producers only.
PRODUCER VOLUNTARY VOTE
Zespri’s Board has decided to offer producers a voluntary vote on the dividend cap on a one-vote-per-share basis.
Three alternative Constitution models will be presented at the Special Meeting of shareholders:
- A new Constitution reflecting the entire package of proposed amendments. The share cap, voting entitlements and other associated measures, plus the inclusion of dividend restrictions. The Board recommends that the full set of changes be approved by shareholders.
- A new Constitution reflecting the entire package, minus the dividend restrictions on current dry shareholders.
- A new Constitution reflecting the entire package, minus the dividend restrictions on future dry shareholders.
These models will be shown in a colour-coded version of the new proposed Constitution, which will be distributed to shareholders ahead of the Special Meeting.
The Special Meeting of shareholders will recognise two shareholder interest groups in the vote on Zespri’s proposed amended Constitution.
Producers will have an interest group vote on the share cap and the changes to voting rights.
Producers do not have an interest group vote on dividend restrictions for ‘dry’ non-producer shareholders. However, the Board has decided to ask producers, by way of an additional vote, to agree to dividend restrictions for future non-producers.
Non-producers will have two interest group votes on the dividend cap: one on a cap applying to current dry shareholders and one on a cap applying to future dry shareholders.
In summary, there will be seven resolutions put forward at the Special Meeting:
Resolution 1: Constitution vote for or against the two proposed Constitution options. The voting cap applies
Resolution 2: Regulatory vote for or against the two proposed Constitution options. One vote per share.
Resolution 3: Producer interest group vote on the share cap and changes to voting rights. One vote per share.
Resolution 4: Non-producer interest group vote on the dividend cap for future dry shareholders (after three years). One vote per share.
Resolution 5: Producer voluntary vote on the dividend cap for future dry shareholders (after three years). One vote per share.
Resolution 6: Non-producer interest group vote on the dividend cap for current dry shareholders (after seven years). One vote per share.
Resolution 7: Vote of all shareholders to approve share issue, buy-back and distribution
as a ‘major transaction’ (current voting cap applies).
Note: the advice above is based on the information available at the time of publication and is subject to change. Details are still being finalised and could potentially change. Comprehensive information will be provided in advance of the Special Meeting
and in the Notice of Meeting.