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Silver Fern Farms' Proposed New Board

Thu, 2/07/2009 10:47:00 a.m.

Further to yesterday's announcement that Silver Fern Farms would be seeking to raise additional capital from its 20,000 shareholders, the company has outlined the composition of a proposed new Board, to be formalised following the approval of shareholders on 30 July.

In line with the company's strategic focus the Silver Fern Farms' Board would be reduced from the current 12 directors to eight, consisting of five farmer directors (including the Chairman) elected by transacting shareholders and three independent directors, chosen on the basis of their commercial acumen across strategic, financial and marketing areas of the business.

On approval of constitutional amendments, the proposed structure provides for a majority of the Board to comprise Farmer Elected Directors, and for the Chairman to be one of those directors, allowing for the preservation of Farmer Elected Director control at Board level.

The initial Board would, for the purposes of continuity, comprise five of Silver Fern Farms' current Board members, including:

Eoin Garden (Chairman); a director since 1998, Mr Garden operates a 2,500ha of high country breeding and finishing land at Millers Flat in Central Otago. His 10,000su include sheep, cattle and deer
Joe Ferraby; owner and farmer of a 650ha sheep and beef property carrying about 3500 su, and trustee and advisor in a 4,800ha property with 15,000su
Rob Hewett; a Board member since March 2008 and shareholder and managing director of Hewett Farm Ltd, a 960ha (9,500su) sheep and beef breeding and finishing farm in Manuka Gorge, South Otago
Angus Mabin; a Board member since 2007, farms Angus bull beef in Waipukurau, Central Hawke's Bay.
Herstall Ulrich; elected to the Board in 2008, farms in Cave, South Canterbury and is Chairman of the Northern South Island Sheep and Beef Council

Proposed independent directors are:

Richard Somerville; a Chartered Accountant was appointed to the Board in 2004. Current deputy Chairman, Chairman of the Board's Executive Committee and Chairman of Milford Asset Management Limited
Tony Balfour an experienced senior executive with a strong track record in a wide diversity of industries including Food, Beverages and Merino. Currently GM Markets for Icebreaker
Trevor Burt; former member of the Executive Board of Munich based Linde Group, a €10 billion global gas and engineering company, with high level expertise in strategic leadership and change management.

Irrespective of the outcome of this transaction Bill Luff, who is currently an independent director and who completes his term on 30 July 2009, has advised that due to other commitments he will not be available for a further term. He is being replaced by Trevor Burt.

Mr Garden extends the gratitude of the board to Mr Luff for his commitment and contribution to the company.

Commenting on the proposed new Board make up, Mr Garden says while farmers' skill sets are in primary production, directors of Silver Fern Farms will require a much wider grasp of the supply chain and of trade and consumer brand development.

"It will be crucial that Board composition reflects this spread of experience and skills – from those knowledgeable of retail and food service all the way back to the point of raw material production. In a farmer owned global food business, diversity of experience will be a crucial determinant of long term commercial success."

The proposed capital structure and governance amendments require constitutional changes, for which shareholder approval is required. The company will be conducting a series of meetings with farmer shareholders across the country during July with a Special Meeting scheduled for 30 July 2009. Following that approval, documentation with regard to the Exchange Offer and Rights Issue will be mailed to shareholders in August 2009. The bonus issue will occur in September 2009.

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