Fonterra Shareholders Fund : Notice of Special Meeting Fonterra Co-operative Group Ltd

For personal use only

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.

For personal use only

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 onlyfor Flexible Shareholding

Capital Structure

usepersonalFonterra Special Meeting 2021

Notice of Special Meeting

of Shareholders and Explanatory Notes

For1.00pm on Thursday, 9 December 2021 ILT Stadium Southland

Surrey Park Sports Centre 18 Surrey Park Road Invercargill

For personal use only

Contents

FONTERRA CO-OPERATIVE GROUP LIMITED SPECIAL MEETING 2021	1
COVID-19 Implications	1
Virtual Meeting	1
Special Meeting Documents	1
Voting	2
Voting Entitlements	2
Proxies or Representatives	2
Questions	2
Votes Required and Quorum	2
Results of Voting	2
Meeting Attendees	2
FONTERRA BOARD CHAIRMAN LETTER	3
FONTERRA CHIEF EXECUTIVE LETTER	4
FONTERRA CO-OPERATIVE COUNCIL CHAIRMAN LETTER	5
FONTERRA CO-OPERATIVE GROUP LIMITED SPECIAL MEETING AGENDA	6
PART ONE	7
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS	7
OF FONTERRA CO-OPERATIVE GROUP LIMITED
Business	7
Special Meeting Proceedings	7
Approval of Capital Structure amendments to the Constitution	7
PART TWO	8
WHAT YOU ARE VOTING ON AND WHY	8
OVERVIEW OF THE PROPOSED AMENDMENTS	9
WHAT HAS CHANGED SINCE THE SEPTEMBER BOOKLET	14
WHEN THE AMENDMENTS WOULD BE EFFECTIVE	16
PART THREE	17
CONSTITUTION AMENDMENTS AND EXPLANATORY NOTES	17
MINISTER OF AGRICULTURE LETTER	78
GLOSSARY	80

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.

only

Fonterra Co-operative Group Limited Special Meeting for 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'.

For personal use

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 SPECIAL MEETING 2021	1