Corporate Governance

1.6.6.1

The corporate governance of the Company is determined by law, the articles of association and the relevant regulations. Considering the potential transition of the Company from a trading platform to Euronext Amsterdam the regulations were drawn up on the basis of the Dutch Corporate Governance Code (the “Code”) as applicable on 1 January 2009, to the extent that it is considered to be relevant to the Company and it provides added value to the Company as a whole. Even if the Code (primarily) focuses on companies listed on a regulated Stock Exchange, the Board of Directors and the Supervisory Board are of the opinion that the Code should also be applied as much as possible before the listing on the stock exchange of the Company.

The Board of Directors and the Supervisory Board annually discuss the corporate governance structure of ForFarmers and/or the components thereof that currently require attention. During the year under review it was identified and listed to what extent ForFarmers complies with the Code. The deviations from the Code are described separately below under “Deviations from the Code”. In this respect a distinction is made between the deviations on the date of the Annual General Meeting in April 2016 and the (expected) deviations on the date of a potential listing on Euronext. At the latest on the latter date ForFarmers shall post an overview of the implementation of the Code on its website.

1.6.6.2

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Deviations from the Code

  On the date of the Annual General Meeting on 15 April 2016 On the date of a potential listing on Euronext
II.1.1 Arnout Traas (CFO) and Jan Potijk (COO) were appointed as directors without a relevant term. In order to bring this into line with the Code, without terms ending simultaneously, it shall be proposed during the Annual General Meeting in April 2016 to connect a term to these appointments that for one of them ends with the Annual General Meeting in 2019 and for the other with the Annual General Meeting in 2020, without any restriction on the number of times that reappointment can take place. The employment agreements of Arnout Traas en Jan Potijk shall be converted into agreements for a fixed term in conformity with the (maximum) term of appointment. This is expected to be aligned with the Code on the Annual General Meeting of the 15th of April 2016
II.2.8 The current agreement with Yoram Knoop (CEO) was concluded for a term up to the Annual General Meeting in 2018. If the agreement with the CEO is terminated by the company then he is paid up to the end of the contract term. A subsequent agreement shall basically be concluded for a term of four years and shall include that in case of termination by the Company a maximum of once the fixed annual salary shall be paid out. This is expected to also remain applicable on the date of a potential listing on Euronext.
III.2.1 The Supervisory Baord considers members of the Supervisory Board who are also directors of Coöperatie FromFarmers U.A., i.e. Jan Eggink and Vincent Hulshof, not to be independent. Considering the current organisation of the Company it was included in article 4.4 under d of the Regulations of the Supervisory Board that each of the members of the said Board, barring a maximum of two persons, must be independent within the meaning of article 4.5. This is all further explained in the annual report of the Company. This shall also be the case on the date of a potential stock exchange listing.

Deviations from the Code

Afwijkingen van de Code

  On the date of the Annual General Meeting on 15 April 2016 On the date of a potential listing on Euronext
III.3.5 The current chairman of the Supervisory Board was appointed for a 4-year term a fourth time in 2014. He shall resign at the latest in 2018. The Regulations of the Supervisory Board are in line with this. This shall also be the case on the date of a potential stock exchange listing.
IV.1.1 The overriding of a binding nomination for the appointment of a member of the Executive Board is currently regulated in article 15 paragraph 5 of the articles of association and for the appointment of a supervisory director in article 19 paragraph 3. Both provisions in the articles of association imply that the Annual General Meeting can deprive the nomination of its binding nature by a resolution adopted by at least two thirds of the validly cast votes representing more than half of the issued share capital. These provisions shall further be examined when preparing the aAticles of Association within the framework of the conversion into a public limited company (N.V.). The same applies to the provisions regarding dismissal as included in, respectively, article 15.4 and article 19.6 of the articles of association. When preparing the articles of association for the public limited company these provisions shall be brought into line with the Code.
IV.2.2 Members of the Supervisory Board currently still sit on the board of the ForFarmers Trust Office Foundation. On the date of listing ForFarmers shall comply with this best practice provision and (former) directors, (former) supervisory directors, employees or fixed advisors of the Company shall not (no longer) sit on the board of the Trust Office Foundation.
IV.2.8 It is included in article 8 paragraph 2 of the current trust terms and conditions of the ForFarmers Trust Office Foundation that holders of depositary receipts and participation accounts can request the associated voting rights. The restrictions as indicated below under “Protective measures” apply to this. At present holders of depositary receipts cannot give a binding voting instruction for the shares held on their behalf by the Trust Office Foundation. Only depositary receipt holders who are also an employee of ForFarmers or a member of Coöperatie FromFarmers U.A. can request voting rights as determined in the trust terms and conditions. Other depositary receipt holders cannot request voting rights. Only Coöperatie FromFarmers U.A. can give a binding voting instruction to the trust office that holds the shares. Other depositary receipt holders cannot give binding voting instructions. In addition the restrictions as outlined in the trust terms and conditions are applicable.
IV.3.12 Currently parties entitled to vote do not have the possibility of granting voting authorisations respectively of giving voting instructions to an independent third party prior to the Annual General Meeting. On the date of listing ForFarmers shall comply with this best practice provision and offer a shareholder and other parties entitled to vote the opportunity to grant voting authorisations respectively to give voting instructions to an independent third party prior to the Annual General Meeting.
V.3.1 ForFarmers is currently working on the recruitment of an internal auditor.  

1.6.6.3

Executive Board and Board of Directors

As indicated in the regulations the Executive Board is understood as the statutory (also under the articles of association) management of the Company (as registered with the Chamber of Commerce). Externally the Executive Board also acts, together with the other directors (not being directors under the articles of association) who are mentioned on the website of the Company, under the name “Board of Directors ForFarmers”. The regulations of the Executive Board were posted on the website of the Company. For an overview and the composition of the Board of Directors reference is made to page *.

Supervisory Board

The Supervisory Board consists of six natural persons who are all mentioned on the website. The Supervisory Board has three key committees, i.e. the remuneration committee, the selection and nomination committee and the audit committee. The regulations of the  Supervisory Board and its committees as well as the profile of the Supervisory Board were posted on the website of the Company.

ForFarmers Trust Office Foundation

ForFarmers Trust Office Foundation holds all shares in the share capital of the Company and has – among other things – the objective of acquiring and administering shares on account of a trust upon the issue of depositary receipts and of exercising the relevant voting rights and other control rights. The articles, trust terms and conditions and the report of the ForFarmers Trust Office Foundation were posted on the website of the Company.

Priority shareholder

The priority share as defined in the articles of association of the Company is held by Coöperatie FromFarmers U.A. The rights as determined in the articles of association are vested in the priority shareholder. This includes, among other things, a right of recommendation of the number of members of the Supervisory Board as formulated in article 19.4 of the articles of association and the designation and/or the consultation regarding the chairman of the Supervisory Board. In addition some important resolutions as intended in article 17.1 under b, article 17.2 and article 17.3 under h of the articles of association require the approval of the priority shareholder. During the year under review the priority shareholder was also the majority depositary receipt holder of the Company.

Protective measures

It is included in article 8 paragraph 2 of the current trust terms and conditions of the ForFarmers Trust Office Foundation that holders of depositary receipts and participation accounts can request the associated voting rights. Paragraph 3 of this article states that one person can be authorised for a maximum of five per cent of the number of outstanding depositary receipts (on the basis of depositary receipts and a balance on the participation account). This restriction is not applicable to Coöperatie FromFarmers U.A. or a person who exercises the voting right on behalf of the Cooperative. The aforementioned percentage can in general and special circumstances be increased at the request of the Executive Board or a (proposed) depositary receipt holder by resolution of the Supervisory Board, however up to at most fifteen per cent. This protective measure expires upon the transition to a public stock exchange. 

Within the framework of the preparations for a public listing a Continuity Foundation shall be incorporated. For more information about this reference is made to the chapter “The ForFarmers share”.

Changes within the framework of a public stock exchange listing

As indicated in the chapter that deals with “The ForFarmers share”, the necessary changes shall be made within the framework of a public stock exchange listing. To this end the articles of association of the Company as well as the articles and trust terms and conditions of the ForFarmers Trust Office Foundation shall – among other things – be amended and changed. Definitive documentation shall be posted on the website when convening the Annual General Meeting. Potential decision-making on a stock exchange listing shall at the earliest take place during the Annual General Meeting that has been scheduled for 15 April 2016.