Seeka Limited — Proxy Solicitation & Information Statement 2019

Jan 29, 2019

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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

Letter from the Chairman

29[th] January 2019

Dear Shareholder

On 12 November 2018 your directors announced a capital raising strategy to be implemented over the course of the next three years, including a rights offer, an issuance of shares under a new Grower Loyalty Share Scheme and an issuance of shares under Seeka’s existing Employee Share Ownership Scheme. The rights offer is now completed and the Company is now establishing the new Grower Loyalty Share Scheme. This scheme will reward loyal growers who supply all their fruit to Seeka over a three-year period. This loyalty benefits all shareholders by securing fruit supply at a time when the industry continues to invest in post-harvest capacity in anticipation of increasing volumes.

The Grower Loyalty Share Scheme involves the issue of shares, and the making of loans, and is required by the NZX Listing Rules to be approved by shareholders. That is because the loans made to the trustee on behalf of growers constitute the giving of financial assistance for the purpose of or in connection with the acquisition of shares, and the potential amount of the loans exceeds the amount which under the NZX Listing Rules may be made without shareholder approval. Shareholder approval to the issue of the shares is also sought.

This notice of meeting proposes a resolution to grant the necessary approvals. If you are a grower and intend to participate in the grower share scheme you may not vote on this resolution. If you do vote you will be ineligible to receive shares under the scheme. Details of the scheme are contained in the explanatory notes. I urge you to read those notes in full. This notice of meeting also contains a formal disclosure under the Companies Act in respect of the loans to be made under the scheme.

The meeting will be held at 3.00pm on Thursday 14 February 2019 at Seeka360, 34 Young Road, Te Puke.

The essence of the scheme is that if a grower supplies all their fruit to Seeka for a three-year period, that grower will have the right to receive shares in Seeka based on trays supplied at the market price at the beginning of the scheme. Any dividends paid by Seeka on those shares will reduce the loan repayable at the end of the scheme. The Grower Loyalty Share Scheme provides a substantial incentive and rewards those growers who remain loyal to Seeka.

The incentive scheme is intended to secure and increase crop supply which will benefit Seeka’s post-harvest business profitability. Assurances of supply also provide operational efficiencies when capacity planning. The scheme adds to Seeka’s value proposition to existing growers and is a procurement tool in a competitive landscape.

Under the scheme the Company will issue up to 2.6m new shares at a minimum value of $4.25 per share. If all potential shares are issued under the scheme this represents an 8.9% increase in issued capital, with a loan value of $11.05m if the issue price is $4.25.

Phone +64 (7) 573 0303 POSTAL Seeka Limited VISITOR Seeka Head Office Fax +64 (7) 573 9831 ADDRESS PO Box 47 ADDRESS 34 Young Road Email info@seeka.co.nz Te Puke 3153, NZ Paengaroa 3189, NZ seeka.co.nz

The new shares will qualify for dividends paid from September 2019. These dividends will be applied in reduction of the loan. There can of course be no assurance or certainty as to future dividends.

The board is satisfied that the scheme is in the best interests of Seeka and of all shareholders, and unanimously recommends that shareholders vote in favour of the resolution.

We look forward to seeing you at the meeting. However if you cannot make it please complete and submit the enclosed proxy form so that it reaches our share register, Link Market Services Limited, by 3.00pm on 12 February 2019.

For shareholders attending the meeting, please bring the enclosed proxy form to assist with your registration.

Yours sincerely

Fred Hutchings Chairman Seeka Limited

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SEEKA LIMITED

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

Notice is given that a special meeting of shareholders of Seeka Limited (“Seeka”) will be held at Seeka360, 34 Young Road, Te Puke, on Thursday 14 February 2019 commencing at 3.00pm.

Business

To consider and if thought fit pass the following ordinary resolution.

That Seeka:

• (a) issue up to 2,600,000 ordinary shares of Seeka, at the issue price described in the explanatory notes, pursuant to the Grower Loyalty Share Scheme (“Scheme”) described in the explanatory notes;

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SEEKA360
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• (b) make the loans required pursuant to the Scheme, and described under the heading “Loan” in the explanatory notes, to fund the issue price of the shares referred to in (a).

Voting and proxies

The Chairman will, pursuant to Seeka’s constitution, call for voting on the resolution to be by way of a poll, meaning that each Shareholder has one vote for each share held.

The resolution is an ordinary resolution, and must be passed by a simple majority of the votes of those shareholders entitled to vote and voting on the resolution.

Any Shareholder entitled to attend and vote at the Meeting may appoint a proxy to attend and vote instead of that Shareholder. The proxy need not be a Shareholder. You may appoint Ashley Waugh, the Chairman of the Audit Committee, as your proxy. If you appoint Mr Waugh as your proxy and do not direct him how to vote in the proxy form, he will vote in favour of the Resolution.

A corporation that is a Shareholder may appoint a person as its representative to attend the meeting and vote on its behalf, in the same manner as that in which it could appoint a proxy.

A proxy form accompanies this Notice of Meeting. If you are unable to attend the Meeting in person, please complete the Proxy Form and return it in the reply-paid envelope provided to Link Market Services, PO Box 91976, Victoria Street West, Auckland 1142, or scan and email to meetings@linkmarketservices.co.nz (please put the words “Seeka Proxy Form” in the subject line for easy identification) to arrive no later than 3.00pm on 12 February 2019.

Alternatively, you may lodge your proxy online. Go to https://investorcentre.linkmarketservices.co.nz/voting/SEK.

Initial information including your CSN/Holder number and FIN (authorisation code) will be required to successfully validate your holding online before shareholding information and voting pages are displayed.

A Shareholder will be taken to have signed the Proxy Form by lodging it in accordance with the instructions on the website.

The appointment of a proxy or representative does not preclude a Shareholder from attending and voting at the Meeting.

Directors Fred Hutchings, Martyn Brick, John Burke, and Ratahi Cross, or their associated persons are growers and are entitled to participate in the Scheme, be issued Shares in terms of the Scheme, and receive loans.

Shareholders who are growers eligible to participate in the Scheme (as described under “Eligibility” in the summary of the Scheme in the explanatory notes) or are an associated person of such a grower, are, under the NZX Listing Rules, not entitled to vote on the resolution. Those include the directors named above, and the growers with which they are associated. If any of those directors are appointed as proxy, they may vote in accordance with express directions recorded on the proxy form, but may not vote undirected proxies.

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SEEKA LIMITED

An “associated person” referred to above is defined in the NZX Listing Rules as a person who, in making a decision or exercising a power affecting Seeka, could be influenced as a consequence of an arrangement or a relationship existing between, or involving, that person and the director or grower referred to above.

EXPLANATORY NOTES

The resolution authorises the issue of shares, and the making of loans, for the purposes of the proposed Seeka Grower Loyalty Share Scheme (the “Scheme”). If the resolution is not passed, the Scheme will not proceed. If the resolution is passed, the Scheme will be implemented, and shares will be issued, within three months. A summary of the Scheme is set out below. The full terms of the Scheme are contained in the Trust Deed and Scheme Rules relating to the Scheme. Those documents may be viewed at www.seekashareoffer.com and a printed copy may be obtained from Seeka Limited, 34 Young Road, Te Puke.

Summary of the Key Terms of the Scheme

Eligibility

A participant in the Scheme must be a person who is the registered owner of a kiwifruit, kiwiberry or avocado orchard (“Orchard”), other than an Orchard leased to Seeka or one of its subsidiaries under a lease with a term of 10 years or more (a “Grower”). A person is the registered owner of an Orchard if the KPIN or PPIN for the Orchard is registered in his or her name. A person will not however be entitled to participate if that person or an associated person (as defined in the NZX Listing Rules) voted in favour of the resolution proposed in this notice of meeting.

Issue of Shares If a Grower elects to participate in the Scheme, Seeka will issue to Seeka Share Trustee Limited (the “Trustee”) on behalf of the Grower a number of ordinary shares in Seeka (“Shares”) determined by the board in accordance with the following principles:

• (a) subject to (c) below, for production of Kiwifruit Green (Hayward Green, Wilkins and Zespri Sweet Green) one Share for every 14 class 1 trays produced in the season ended 30 June 2018 (“2018 Season”);

• (b) subject to (c) below, for production of Kiwifruit Gold (Zespri Sungold and ENZA Gold) one Share for every 14 class 1 trays produced in the 2018 Season;

• (c) for production of kiwifruit from Orchards converting from Kiwifruit Green to Kiwifruit Gold in the 2018 Season, one Share for every 14 class 1 trays, based on an assumed production of 13,000 trays for each canopy hectare in the 2018 Season, regardless of actual production;

• (d) for production of kiwiberry, one Share for every six class 1 trays produced in the 2018 Season;

• (e) for production of avocado, one Share for every three class 1 trays, based on the highest of production in the season ended 31 March 2018, and production in the season ended 31 March 2017.

In determining allocations of Shares, the Seeka board may make such determinations in respect of, or adjustments to, the principles set out above as the board deems appropriate.

Fractions of a Share will be rounded down to the nearest whole Share. If the calculations produce less than 200 Shares, the Grower will be entitled to 200 Shares. The maximum number of Shares which may be issued for the purposes of the Scheme is 2,600,000.

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SEEKA LIMITED

Issue price

The issue price per Share will be the volume weighted average price of Shares on the NZX Main Board over the 10 business days ending two business days before the issue of the Shares. That price may be adjusted by the Seeka board at its discretion to take account of any event occurring during that period of 10 business days, or any transaction or circumstance that in the opinion of the board is exceptional or unusual. The issue price shall not in any event be less than $4.25 per Share.

Loan

Seeka will make a loan to the Trustee to fund the whole issue price of the Shares issued to the Trustee on the Grower’s behalf. That loan will be on the following terms:

• it will not bear interest;

• it may only be applied for the purpose of acquiring Shares;

• all distributions in cash (after tax) paid in respect of the Shares will be applied in repayment of the loan;

• the loan will be limited in recourse to the Shares and may be secured over the Shares by a security in such form as the Board may require; and

• the loan will be repayable by the Grower if the Grower decides to have the Shares transferred to the Grower as described below under “Right to Shares”.

The aggregate amount of the loans made to all Growers will depend on the number of Growers who participate in the Scheme, and the issue price of Shares. If all eligible Growers participated, and the issue price per Share was $4.25 the aggregate amount of the loans would be approximately $11,050,000.

Terms of Shares	The Shares will be fully paid ordinary shares in Seeka which will subject to the next
	sentence have all of the rights (including voting and dividend rights) of, and rank
	equally in all respects with, the existing fully paid ordinary shares in Seeka. The
	Shares will not however participate in the dividend in respect of the year ended
	31 December 2018, expected to be paid as at a record date in March 2019.
Voting rights	While Shares are held by the Trustee on a Grower’s behalf, the Trustee will exercise
	the voting rights on those Shares in accordance with any directions of the Grower. If
	the Trustee receives no directions, it will not vote.
Right to Shares	If the Board is satisfed that the Grower has supplied all fruit from the Grower’s
	Orchard(s) to Seeka or one of its subsidiaries for;
	– in the case of kiwifruit and kiwiberry, the period from 1 February 2019 to
	30 June 2021; and
	– in the case of avocado, the period from 1 July 2019 to 31 March 2022,
	(“Supply Period”) the Grower will be entitled to elect to have all of the Shares
	transferred to the Grower. The Grower must repay the outstanding balance of the
	loan before the Shares are transferred. The Board’s decision as to whether a Grower
	has supplied all fruit from an Orchard for the Supply Period will be conclusive.

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Loss of Rights

If the Board is not satisfied that the Grower has supplied all fruit from the Grower’s Orchard(s) to Seeka or one of its subsidiaries during the Supply Period, or if the Grower does not elect to have the Shares transferred to the Grower, the Grower will lose all rights to the Shares and will cease to have rights under the Scheme. The Trustee will purchase the Grower’s beneficial interest in the Shares for a consideration equal to the outstanding balance of the loan that was advanced to the Trustee to pay for the Shares. This consideration will be satisfied by way of a novation (i.e. transfer) of the loan to the Trustee (so that the Trustee will become liable to Seeka in respect of the loan, rather than the Grower).

Unallocated Shares

• Shares which have been purchased by the Trustee in terms of “Loss of Rights” above (“Unallocated Shares”) may be dealt with as follows:

• The Trustee may require Seeka to buy back those Unallocated Shares for a sum equal to the outstanding balance of the loan related to those Unallocated Shares. Seeka will be required to do that only if Seeka is entitled to make the buyback under the relevant provisions of the Companies Act 1993, NZX Listing Rules, and other laws. If the Unallocated Shares are bought back, the Trustee will apply the proceeds in repayment of the loan.

• The Trustee may with the approval of the Seeka board sell Unallocated Shares on the sharemarket or in some other manner. If the Unallocated Shares are sold, the proceeds will be applied in repayment of the relevant loan. Any excess of the proceeds of sale over the amount of the loan will at the discretion of the Trustee be held by the Trustee, or applied in payment of management fees payable to Seeka or other costs of the trust, or applied in reduction of all other loans outstanding at the time of sale, pro rata so far as practicable to the amount outstanding under each loan.

None of Seeka, the Trustee or any other subsidiary may have any beneficial interest in Unallocated Shares.

Sale of Orchard If during the Supply Period, the Grower sells an Orchard:

• the Grower will nevertheless retain rights under the Scheme; and

• supply by the new owner of the Orchard will be deemed to be supply by the Grower, so that if the Grower and the new owner together supply all fruit from the Orchard to Seeka for the Supply Period, the Grower will for the purposes of the Scheme be deemed to have supplied that fruit.

No Obligation

The Grower is not required by the Scheme to supply fruit to Seeka, or to repay the relevant loan. The only consequence if the Grower does not do so is that the Grower does not get title to the Shares.

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Disclosure document under section 79 of the Companies Act 1993

The section below constitutes a disclosure document in respect of financial assistance under section 79 of the Companies Act 1993. Because new shares will be issued for the purposes of the Scheme, Seeka is advised that this document is not required by law to be provided. It is however provided in the interests of ensuring full disclosure.

1. Financial assistance in respect of the subscription for shares will be in the form of loans which will be made to the Trustee on behalf of growers participating in the Scheme. The terms of those loans will be as described under the heading “Loan” in the summary of the Scheme above.

2. The text of the resolution passed by the Board under section 78(1) of the Companies Act 1993 is as follows:

Resolved that, subject to the Grower Loyalty Scheme being approved by shareholders and proceeding:

• (a) the company make loans (“Loans”) to Seeka Share Trustee Limited for the purposes of, and on the terms required by, the Seeka Grower Loyalty Share Scheme (“Scheme”);

• (b) the making of the Loans is in the best interests of the company;

• (c) the terms and conditions under which the Loans are made are fair and reasonable to the company;

• (d) the making of the Loans is of benefit to those shareholders not receiving Loans; and

• (e) the terms and conditions under which the Loans are made are fair and reasonable to those shareholders not receiving Loans.

The reasons for the directors’ conclusions in paragraphs (b), (c), (d) and (e) above are as follows:

• (f) the purpose of the Scheme is to incentivise growers to supply all of their fruit to the company over three seasons, thereby securing the supply of fruit to the company, and the business of the company;

• (g) the making of the Loans is a necessary part of the Scheme; and

• (h) for the reasons in paragraph (f), the Scheme is in the best interests of the company, and of all of its shareholders.

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