The Milk Marketing Board (Residuary Functions) Regulations 1994

Regulation 21(1)(d)

SCHEDULE 5 DISPOSAL OF DAIRY CREST SHARES

1.  This Schedule shall apply to the extent that the Dairy Crest shares are retained.

2.  As soon as practicable after Vesting Day the Board shall proceed to determine the feasibility of achieving a flotation of the company.

3.—(1) In determining the feasibility of achieving a flotation of the company and in assessing the timetable for such flotation the Board shall have regard to all relevant considerations.

(2) Subject to sub–paragraph (1) above, the considerations to which the Board may have regard shall include–

(a) the circumstances which prevented the achievement of a flotation prior to Vesting Day,

(b) the continuing suitability of the company for the admission of its ordinary share capital to the Official List of the London Stock Exchange,

(c) their views and the views of their financial advisers, the company and the company’s financial advisers as to the company’s suitability for a flotation and the stock market conditions for such flotation,

(d) the amount of funding which the Board require to achieve from the disposal of their interest in the company, and

(e) such other factors as they, the company and their own and the company’s advisers consider to be relevant.

4.  If the Board determine that it is feasible, and that it is in the interests of registered eligible producers, to proceed with a flotation of the company, the Board shall take such steps as they consider necessary or appropriate to undertake the objective specified in paragraph 5 below.

5.  The objective mentioned in paragraph 4 above is to implement the flotation in the shortest time scale that (having regard to all relevant considerations) the Board consider appropriate unless any material change in circumstances arises which has the effect that the flotation is no longer considered by the Board and their advisers and other persons mentioned in paragraph 3(2)(c) above to be feasible or consistent with the interests of registered eligible producers.

6.  In implementing the flotation of the company the Board may give such undertakings, warranties and indemnities and bear such costs as they consider necessary or appropriate having regard to the advice of their advisers.

7.  Nothing in paragraphs 2 to 6 above shall be construed as restricting the Board from disposing of their interest in the company by such other method as they consider appropriate if, having regard to the interests of registered eligible producers, they consider the advantages of proceeding with that method to outweigh the advantages of proceeding with a flotation.

8.  Until such time as their entire interest in the share capital or business of the company has been disposed of the Board shall, subject only to taking any steps they consider necessary to protect the interests of registered eligible producers–

(a) consult with the management of the company as to the Board’s plans for the disposal of their interest;

(b) not seek to use their rights as a shareholder to intervene in commercial decisions made by the company in the day to day management of its business;

(c) to the extent that any goods or services are required to be supplied by the Board to the company or by the company to the Board, ensure that such supplies are made on reasonable arm’s length terms;

(d) to the extent that any arrangements are required to be entered between the Board and the company with regard to the financing of the Board, ensure that such arrangements are entered into on reasonable arm’s length terms.

9.  In this Schedule “company” means Dairy Crest Limited, Dairy Crest plc, or any other company formed to acquire the shares or business of Dairy Crest Limited.