Agri-Mark, Inc. Member Equity Plan

Agri-Mark, Inc. Member Equity Plan Revised to 2014

Mission Statement Adopted June 20, 1991 Agri-Mark s mission is to serve the member- owners by: Providing a secure market for members milk at a competitive price, and High quality products and services to customers While maintaining profitable operations. Agri-Mark will pursue this mission by: Serving members in the Northeast; Working with others in the industry for the benefit of members; Maintaining an environment that encourages innovation and efficiency for members and employees; Maintaining honesty, integrity and high ethical standards; Enhancing producer prices through regulatory and legislative activity.

Table of Contents Section Page I. Introduction... 1 II. Equity Level... 2 III. Equity Contribution Targets... 3 IV. Allocations... 3 V. Members, Age 70 and Above (Effective 01/01/2015)... 4 VI. Members, Age 70 and Above (Expires 12/31/2014)... 6 VII. Former Members... 8 VIII. Re-Investment of Cash Patronage and/or Equity Refunds... 10 IX. Tax Implications for Members... 11 X. Equity Transfers... 11 XI. Other... 12 Appendix

I. Introduction A. Agri-Mark Mission Statement: Mission Statement Adopted June 20, 1991 Agri-Mark s mission is to serve the member-owners by: providing a secure market for members milk at a competitive price; and high quality products and services to customers while maintaining profitable operations. Agri-Mark will pursue this mission by: serving members in the Northeast; working with others in the industry for the benefit of members; maintaining a strong and knowledgeable member base; maintaining an environment that encourages innovation and efficiency for members and employees; maintaining honesty, integrity and high ethical standards; enhancing producer prices through regulatory and legislative activity. B. General: Equity financing for the Cooperative is a basic responsibility of its Members. An appropriate level of Member equity provides the long-term financial strength and financing to support the operation of the business, property, and affairs of the Cooperative and permits control by its Members. This Equity Plan sets forth the policies and procedures for the collection, retention and repayment of Member equity. C. Definitions: 1) Board of Directors - The Board of Directors of the Cooperative. 2) Bylaws - The current bylaws of the Cooperative. 3) Cooperative - Agri-Mark, Inc. 4) cwt - Measurement per hundredweight. 5) Entity Member - A Member which is an entity rather than a natural person (for example a corporation, partnership, LLC or LLP). A husband and wife who both sign the Member Marketing Agreement are treated as an Individual Member, not a partnership. If other multiple individuals sign the Member Marketing Agreement, they will be treated as a partnership unless otherwise expressly provided in this Equity Plan. Unless advised to the contrary in writing by all owners of an Entity Member, the Cooperative shall have the right to treat all owners as if 1

they have an equal interest in the Entity Member and the Entity Member s equity. 6) Equity Plan - The policies and procedures set forth in this document constitute the Cooperative s Equity Plan. 7) Individual Member - A Member who is a natural person. A husband and wife who are both listed on the Member Marketing Agreement are treated as an Individual Member, not as a partnership or Entity Member. 8) Member - The person(s) or entity listed as the Member on the Member Marketing Agreement with the Cooperative. D. Incorporated Documents: The Equity Plan is subject to the Bylaws, Member Marketing Agreement and the rules and regulations of the Cooperative, all of which are incorporated herein by reference and any and all revisions or additions thereto will be deemed a revision or addition to the Equity Plan. E. Appendix: The Appendix to this Equity Plan will state the dollar amounts of current caps and targets, if applicable, as defined within the Equity Plan. II. Equity Level A. Member s Equity: To ensure the continuing financial strength of the Cooperative, a Member s equity level will be satisfied in such manner as the Board of Directors may authorize, including, but not limited to, the Member s then current equity in the Cooperative, future equity contributions, and future retained allocated patronage earnings. B. Multiple Farms: A Member with milk production from more than one farm will have an equity account for each farm. For purposes of this Section, equity amounts and production amounts will be combined to determine the Member s total equity, and the equity level per cwt. III. Equity Contribution Targets A. Setting Requirements: The Cooperative s Board of Directors will consider and may establish an equity contribution for all Members and/or equity targets to determine whether or not a Member will be subject to equity contributions. Such targets may be set based upon an equity level per cwt and/or total dollars of equity. (See Appendix for current targets). B. Calculating Equity: Each Member s equity total as of the end of the most recent fiscal year, including any retained allocated patronage earnings for such fiscal year, plus milk check equity deductions for the subsequent production months of January and February, and any adjustment required, will be divided by the Member s milk production during such fiscal year to determine the Member s equity level per cwt (rounded to the nearest whole 2

cent). This equity level per cwt will determine the annual amount of the equity contribution rate for milk production effective with April milk of each year. Details of this information for the Member will be reported annually to the Member. C. Contribution Targets: If the Member s equity level per cwt determined pursuant to Section III. B. or the Member s total equity as of the end of the most recent fiscal year is less than any applicable equity target levels adopted by the Board of Directors, equity contributions will be required. D. Contribution Payments: All equity contributions will be deducted from the proceeds of the Member s milk checks for subsequent credit to the Member s equity account unless the Member makes a lump-sum payment to bring its equity amount to the level which would not require an equity deduction. E. Varying Deductions: The Board of Directors may authorize a uniform equity contribution per cwt deduction amount from all Members or varying deduction amounts. IV. Allocations A. Earning Allocations: The Board of Directors will approve the amount of patronage earnings for each fiscal year that will be paid to Members in cash, retained and credited to Members equity accounts, or retained and credited to unallocated equity. B. Calculation of Year-End Equity: Each Member s equity total as of the end of the most recent fiscal year (December 31 st ), will be divided by the Member s milk production during such fiscal year to determine the Member s year-end equity level per cwt (rounded to the nearest whole cent). Such year-end equity level per cwt will then determine the percentage(s) of the annual patronage dividend paid out in cash and/or allocated to each Member s equity account in accordance with groupings or thresholds adopted by the Board of Directors. Details of the Member s year-end equity and year-end equity level per cwt will be reported annually to the Member. C. Earnings Paid in Cash: For purposes of this Section, the Board of Directors may authorize varying percentages (from a minimum of 20% to a maximum of 100%) of cash distributions of allocated patronage earnings to Members depending upon the range of year-end equity levels per cwt or year-end total equity that Members have invested in the Cooperative or as otherwise determined by the Board of Directors. D. Patronage Losses: For any fiscal year in which the Cooperative incurs a patronage loss, the Board of Directors will determine the disposition of such amount. If the patronage loss or a portion thereof is allocated to Members, it may be 3

set up as a receivable per Member basis. Appropriate provisions must be made for the recovery of the receivable on a current basis either by milk check deduction or in some other manner as determined by the Board of Directors. If the allocated loss is not set up as a receivable, such allocation will be carried as a negative equity amount for each applicable Member until such time as it has been recovered by or offset against and cancellation of other equity of such Member or in some other manner as determined by the Board of Directors. Negative equity shall be recovered or off-set first against the active equity of the Member and then against any equity (inactive) set aside for equity refunds to the Member. V. Members, Age 70 and Above (Effective as of January 1, 2015) A. Applicability: Except as noted below, this program is available to any Member who is an Eligible Individual, or in the case of an Entity Member, has an Eligible Individual as an owner. This program shall not be available, however, to Individual Members who are receiving, or have already received, equity refunds pursuant to Section VI prior to the effective date of this Section. Any unpaid equity refunds under Section VI will continue to be made and governed by such Section VI. B. Eligible Individual Definition: An Eligible Individual means, (i) in the case of an Individual Member (or husband and wife signing as an Individual), the Member (or husband or wife) who has reached the age of 70, and (ii) in the case of an Entity Member, a natural person who is an owner of the Entity Member and who has reached the age of 70. C. Refund Eligibility: A Member with an Eligible Individual who has reached the age of 70 on or before the end of a fiscal year (starting with the fiscal year ending December 31, 2014), may apply for a refund of the Member s total equity attributable to the Eligible Individual determined as of the end of the fiscal year for which the application is made. D. Application Procedure: The application for refund must be made in writing and submitted to the Cooperative prior to March 31 st following the end of the fiscal year for which the application is made. The application must include proof of age and date of birth of the Eligible Individual and such proof of ownership by the Eligible Individual of the electing Member as the Board of Directors may require. In the case of an Entity Member, all owners must authorize in writing the equity refund with respect to the Eligible Individual along with the percentage of the total equity of such Entity Member to be refunded. E. Refund Limitations: Refunds of equity under this Section V. may be applied for only once for any Eligible Individual of a given Member. An Entity Member 4

shall not be entitled to any additional refund of equity under any other provision of this Equity Plan with respect to an Eligible Individual once an equity refund has been applied for on behalf of such Eligible Individual under this provision (for example, even if the Entity Member subsequently ceases shipping to the Cooperative, no additional equity shall be refunded with respect to such Eligible Individual). F. Approval; Payments: The approved refund will be paid in five (5) equal annual installments, without interest, on or before May 31st of each year commencing the year following the fiscal year for which application has been made. All refund payments are subject to the annual approval of the Board of Directors. The Board of Directors may authorize the withholding from such refund of any amounts that it may deem necessary. G. Treatment of Unpaid Refunds: Unpaid refund installments will remain in equity until paid, but segregated in a separate refund account for the Member. The equity in this separate refund account will be combined with the other equity of the Member to determine total year-end equity and equity per cwt as required for this Equity Plan, but any additional equity allocated to the Member (for example, from equity deductions and patronage earnings) shall be added to the Member s regular equity account and not to the segregated refund account. H. Multiple Signers of Agreement: In the case of a Milk Marketing Agreement signed by both a husband and wife (only), an application for refund of all of the Members equity may be made if either the husband or wife is an Eligible Individual. In all other cases where multiple individuals have signed the Milk Marketing Agreement, the Member will be treated as an Entity Member. I. Continued Application of Equity Plan: Except as provided in this Section V, all provisions of the Equity Plan other than Section VI will continue to apply to Members receiving repayments of equity under this Section. J. Cessation of Milk Shipments: A Member who ceases shipping milk to the Cooperative while receiving refunds of equity under this Section shall continue to receive such refunds in accordance with the provisions of this Section. K. Shipping to Another Market: Unless paragraph J. of this Section V applies, a Member who cancels their Member Marketing Agreement to ship to another market while receiving a repayment of equity under this Section shall have all such unpaid installments, and repayments of any additional retained allocated patronage earnings, delayed for five (5) years without interest and then refunded over a seven (7) year period in accordance with the provisions of Section VII, including the annual specific approval of the Cooperative s Board of Directors. L. Payment of Additional Equity: Equity contributions and patronage earnings allocated and retained for fiscal years ending subsequent to the date of an approved application under this Section shall be repaid after the Member 5

ceases shipping milk to the Cooperative in accordance with the provisions of Section VII or is otherwise eligible for an additional equity refund pursuant to the Equity Plan. M. Payment Source: Repayments of equity will first come from equity contributions until they are fully repaid; then from retained allocated patronage earnings, starting with the earliest year first. To the extent that equity contributions include equity credits issued by the Cooperative in connection with a merger or consolidation, repayments of equity contributions will first come from such credits. N. Offset Against Payments: Any repayments of equity due to a Member pursuant to this Section will first be offset against any amounts due to the Cooperative from that Member. O. Payment to Third Parties: Upon the receipt and acceptance of such documentation as the Cooperative may require, repayments of equity determined pursuant to this Section may, as they become due and payable, be made to a designated third party for the account of the Member. VI. Members, Age 70 and Above A. Applicability: Except to the extent provided below, the program set forth in this Section VI expires on December 31, 2014. No Member may apply for an equity refund with respect to an Eligible Individual under this Section VI after such date, but must apply under Section V. However, refund payments to Members who have validly applied for a refund under this Section VI before December 31, 2014 will continue to be governed by this Section VI until fully paid. B. Individuals Eligible To Apply: An Individual Member who reaches the age of 70, and a Member consisting of individuals all of whom have signed the Member Marketing Agreement and all of whom have reached the age of 70, may apply for a refund of the Member's total equity determined at the end of the most recently completed fiscal year. Such refund will be paid in four equal installments, without interest, with the first installment to be paid at the time of approval of the Individual Member's application. The remaining three installments will be segregated to an inactive equity account to be repaid in equal annual installments beginning not later than May 31 following the first installment, subject to the annual specific approval of the Board of Directors. From the date that the equity is converted to inactive equity, the inactive equity will not be included in subsequent calculations of total equity and equity per cwt for purposes of setting equity contributions under Section III.B. or allocating patronage earnings under Section IV.B. The Board of Directors may authorize the withholding from such redemption of any amounts that it may deem necessary. 6

C. Application Procedure: The application for refund must be in writing and include proof of age and date of birth of the Eligible Individual. Repayments of equity under this Section will be approved only once for any Individual Member. D. Continued Application of Equity Plan: Except as provided in this Section VI, all provisions of the Equity Plan, other than Section V, will continue to apply to Members receiving refunds of equity under this Section. E. Cessation of Milk Shipments: Unless paragraph F of this Section VI applies, a Member who ceases shipping milk to the Cooperative while receiving refunds of equity under this Section shall continue to receive such payments in accordance with the provisions of this Section. F. Shipping to Another Market: A Member who cancels their Cooperative Member Marketing Agreement to ship to another market while receiving a repayment of equity under this Section shall have all such unpaid installments, and repayments of any additional retained allocated patronage earnings, delayed for five (5) years without interest and then refunded over a seven (7) year period in accordance with the provisions of Section VII, including the annual specific approval of the Cooperative s Board of Directors. G. Payment of Additional Equity: Equity contributions and patronage earnings allocated and retained for fiscal years ending subsequent to the date of an approved application under this Section shall be repaid in accordance with the provisions of Section VII after the Individual Member ceases shipping milk to the Cooperative. H. Payment Source: Repayments of equity will first come from equity contributions until they are fully repaid; then from retained allocated patronage earnings, starting with the earliest year first. To the extent that equity contributions include equity credits issued by the Cooperative in connection with a merger or consolidation, repayments of equity contributions will first come from such credits. I. Offset Against Payments: Any repayments of equity due to a Member pursuant to this Section will first be offset against any amounts due to the Cooperative from that Member. J. Board of Directors Review: The policy pursuant to this Section is subject to at least an annual determination of the Board of Directors as to the financial appropriateness of the equity repayment. K. Payment to Third Parties: Upon the receipt and acceptance of such documentation as the Cooperative may require, repayments of equity determined pursuant to this Section may, as they become due and payable, be made to a designated third party for the account of the Member. 7

VII. Former Members A. Refunds to Members Who Cease Shipping: Subject to at least the annual specific approval of the Cooperative's Board of Directors, a Member who ceases shipping milk to the Cooperative, and who has not transferred all of its equity as provided by this Equity Plan will have its un-transferred equity repaid, in equal installments over a seven (7) year period beginning not later than May 31 of the fiscal year following the fiscal year in which the Member ceases shipping milk to the Cooperative. The un-transferred equity being repaid will be converted to inactive equity and thereafter will neither entitle the Member to patronage distributions under Section IV. nor be included in the calculation of equity per cwt for equity contribution purposes under Section III.B. B. Shipping to Another Market: Notwithstanding the above, if a Member cancels its Member Marketing Agreement with the Cooperative in order to ship to another market, the repayment of equity to such former Member will be delayed for five (5) years without interest and then repaid in equal installments over a seven (7) year period in accordance with the other provisions of this Section, including the annual specific approval of the Board of Directors. C. Notice of Information; Process: Former Members will receive a summary of their final equity total, after giving effect to any equity transfers, and an anticipated repayment schedule. The Board of Directors may authorize the withholding from such redemption of any amounts that it may deem necessary. 1) Repayments of equity will first come from equity contributions until they are fully repaid; then from retained allocated patronage earnings, starting with the earliest year first. To the extent that equity contributions include equity credits issued by Agri-Mark in connection with a merger or consolidation, repayments of equity contributions will first come from such credits. 2) Any repayment of equity due to a former Member pursuant to this Section will first be offset against any amounts due the Cooperative from that former Member. D. Special Lump Sum Payments: Instead of repayment over seven (7) years as provided in this Section VII.A., equity repayments may be made in a lump sum amount as provided herein in the event of death of an Individual Member, or owner of an Entity Member (to the extent of such owner s interest in the equity of the Entity Member), or the permanent disability of an Individual Member or owner of an Entity Member (to the extent of such owner s interest in the equity of the Entity Member). 1) In the event of a death, the death certificate, appointment of the executor or other personal representative, and, in the case of an owner of an 8

Entity Member, proof of the percentage of ownership by the individual of the Entity Member, and such other documentation as the Board of Directors may require must be presented with the request for accelerated payment. In the case of an Entity Member, all owners of the Entity Member will have to agree in writing to the ownership percentage of the deceased owner and to the lump sum payment of such equity. 2) With respect to payments as a result of permanent disability, the disabled individual must have been actively engaged in operating the Member farm immediately prior to the disability, and must have become permanently unable to further engage in the normal daily duties of farming solely as a result of the disability. The Member may request a repayment of the portion of equity attributable to such disabled individual within thirty days of when the Member ceases shipping. At a minimum, and subject to verification, written certification of such permanent disability must be submitted by the disabled individual and the individual s physician. In addition, proof of the percentage of ownership by the disabled individual of the Entity Member, and such other documentation as the Board of Directors may require must be presented with the request for accelerated payment. In the case of an Entity Member, all owners of the Entity Member will have to agree in writing to the ownership percentage of the disabled owner and to the lump sum payment of such equity. 3) Payments to estates in bankruptcy will be made as requested in writing by the bankrupt estate. The Cooperative reserves the right to request any documentation that it may require, and to take any and all matters as it may require, in its sole and exclusive judgment, to the Bankruptcy Court for clarification or approval. E. Payment to Third Parties: Upon the receipt and acceptance of such documentation as the Cooperative may require, repayments of equity determined pursuant to this Section may, as they become due and payable, be made to a designated third party for the account of the former Member. F. Resumptions: If a Member who has ceased shipping milk to the Cooperative and has received at least one payment pursuant to this Section VII subsequently enters into a new Milk Marketing Agreement with the Cooperative, such Member s equity account will be converted from inactive to active status. In that case, the equity contribution per cwt will be determined in accordance with provisions of Section III.B., and the earning allocations will be determined in accordance with Section IV.B., in each case based on the date such inactive equity was converted back to active equity. 9

VIII. Re-Investment(s) of Cash Patronage and/or Equity Refunds IX. A. Re-Investment(s): Any Member may re-invest their annual cash patronage distribution and any equity refund due to the Member in a separate non-equity account in the Member s name. A former Member may not re-invest any amounts paid to it by the Cooperative. However, a former Member may retain any re-investment account it accumulated while still a Member, and re-invest the interest accrued thereon, as long as the account, when added to any unrefunded equity in the Cooperative of the former Member, has a minimum balance of $4,000, otherwise the balance of such account and any accrued interest will be refunded. Interest of the re-investment accounts will be compounded annually, and pro-rated to the total number of months funds were invested during the current year. The annual interest rate will be set by the Board of Directors in November of each year and go into effect on January 1 st of the following year. B. Withdrawals: Up to four (4) times a year, a withdrawal from the non-equity reinvestment account may be requested in writing, and will be paid within fifteen (15) business days following receipt by the Cooperative of an appropriate written request. Withdrawals made before the last day of any month will receive no interest for that month. Interest will accrue on an annual basis and be automatically reinvested in the Member s (or former Member s) account, unless a written election is made to receive an annual payment of the interest accrual in cash in lieu of reinvestment. C. Cancellation: A former Member that has cancelled its Milk Marketing Agreement with the Cooperative to ship to another market is not eligible for this re-investment program. Any amount which it may have previously reinvested in a non-equity reinvestment account with the Cooperative will be refunded by the Cooperative within sixty (60) business days following the cancellation. No interest will be paid for the year in which the cancellation occurs or for any subsequent period. Tax Implications for Members A. Cash Distributions: Up to 80% of each Member's allocated patronage earnings for any fiscal year may be retained by the Cooperative as additional Member equity. Internal Revenue Service regulations require that a minimum 20% cash distribution be made to each Member. Written notices of allocation representing the amounts paid and retained will be provided to Members. Members are required to include their allocated share of patronage earnings (both cash and retained) as patronage dividends in their taxable income. Internal Revenue Service Form 1099-PATR will be issued. B. Contributions; Business Expense: Entity contributions deducted from proceeds of monthly milk checks should be considered by Members as a 10

business expense in the year deducted from milk checks. Such per cwt deductions are "Per Unit Retains" and will be subsequently reported to Members in the form of a "Per Unit Retain" certificate. Members should include the amount on the certificate in their gross income in the year they receive the certificate along with their gross milk check proceeds in the calendar year they received such amounts. Both these amounts are totaled and reported in Box #3 on the Internal Revenue Service Form 1099-PATR. C. Consent To Taxation: Article 11.9 of the Bylaws sets forth each Member's consent to taxation of allocated and retained amounts. D. Loss Allocations: Members with a loss allocation will be entitled to a tax deduction for the amount of such loss allocation in the year that they are advised that the loss has been actually offset against other equities. Offset will be made first against per unit retains, starting with the earliest year, then from retained allocated patronage earnings starting with the earliest year, then from all other equities. E. No Tax Advice: The Cooperative cannot provide individual tax advice. Members should consider contacting a tax advisor for individual advice on the tax implications referred to in this Section. X. Equity Transfers A. Transfers By Agreement: If a Member Marketing Agreement is terminated, but the dairy farm operation continues by the signing of a new Member Marketing Agreement by a new Member, the equity from the former Member may be transferred, in whole or in part, to such new Member upon the written mutual request of the respective Members and the approval of the Cooperative. B. Mandatory Transfer of Equity: If the operation of an Entity Member s farm is taken over by a new entity, the new entity must execute a new Milk Marketing Agreement and the equity share of the former Entity Member attributable to its owner(s) who participate as owners of the new Member shall be transferred to the new Entity Member. If the transferred equity is less than all of the former Entity Member s equity, the un-transferred equity may be subject to refund under Sections V, VI, or VII, as applicable. C. Effect of Equity Transfers: If the total equity of a Member is transferred, the total equity and the equity per cwt of the such Member will apply to the new Member. If less than the total equity is transferred, as of the effective date of the transfer, the transferred amount shall be added to any other equity of the new Member for purposes of calculating total equity and equity per cwt pursuant to Sections III.B. and IV. D. Equity Reallocations: If equity of an Entity Member is reallocated among the owners of the Entity Member, or changes are made in the ownership of the Entity Member, the total equity of the Entity Member continues unchanged 11

unless an owner or former owner is entitled to obtain a refund of the equity attributable to him/her pursuant to this Equity Plan (such as the Over 70 provisions of Section V, or the provisions for equity refund to a Member who ceases shipping under Section VII.) The Cooperative may require written evidence of any equity reallocations or ownership changes of a Member as it deems appropriate. XI. Other A. Equity Non-Transferable: A Member's equity in the Cooperative is nontransferable, except as provided in this Equity Plan or as the Board of Directors may in its sole and absolute discretion specifically authorize. Equity may not be traded at face value or for discount, marketed, or encumbered. Authorized transfers, if any, will require notation and transfer on the books of the Cooperative. B. Interest; Preemptive Rights: Equity in the Cooperative, including inactive equity and all equity being held pending payment of refund installments, shall be non-interest bearing, and will not carry any preemptive rights. C. No Extra Voting Rights. Equity will not afford the Member any "voting rights" not otherwise provided for in the Bylaws of the Cooperative. D. Equity is Subordinate: Member equity is subordinate to the interest of any creditor in regard to present or future, secured or unsecured indebtedness of the Cooperative, and the Cooperative reserves the right to mortgage, pledge, or otherwise encumber, any of its properties and assets to pay or secure to be paid any of its present or future creditors. E. Records Conclusive: The records of the Cooperative will be the exclusive evidence of the equity of the Member in the Cooperative. F. Equity Is Not Debt: Equity is not a debt obligation and no claim for repayment of any amount due pursuant to the Equity Plan may be made against any Member, officer, director, or representative of the Cooperative either directly, or through the Cooperative. G. No Representations: No Member or employee of the Cooperative, or any other person or entity has been authorized to give any information or to make any statement or representations concerning the Equity Plan, other than those contained herein and, if given or made, the information or representations should not be relied upon as having been authorized by the Cooperative. The language of the Equity Plan governs at all times. H. Minimum Installment Refund Level: If equity is being refunded in installments under any Section of this Equity Plan and the total equity remaining unpaid is $4,000 or less, the Cooperative may pay the entire unpaid amount at the due date of the next regular installment. 12

I. Board Review: The Board of Directors will periodically, at its sole discretion, review all concepts, procedures and policies of the Equity Plan, including pertinent financial and other data (the Cooperative's equity requirements, etc.), and will have the authority to make amendments when necessary. Increases or decreases in Member equity requirements may result from, but are not limited to, any of the following: Inflation and its effect on assets (including increase in milk prices) Increase or decrease in receivables, inventories, fixed assets or any other assets employed in the business and its growth Change in membership and/or milk production levels Major capital expenditures Necessity to fund equity repayments to former Members. 13

Agri-Mark, Inc. Member Equity Plan Appendix The following provisions are effective as of the date of this Appendix until revised by the Cooperative s Board of Directors (References are to the Sections of the Equity Plan): II. (A) Equity Level: There is no current cap established for either total equity or equity per cwt. III.A. Equity Contribution Targets; Target equity level: Below $3.00/cwt. or $150,000 Equity contribution equals $0.20/cwt Target equity level: Above $3.00/cwt. or $150,000 Equity contribution equals $0.10/cwt III.C. Equity Contributions: All members will have a minimum contribution amount of $0.10/cwt. Effective Date: January 24, 2014