is the ‘G3 Farmers Equity Plan’?
The G3 Farmers Equity Plan was launched in
2013, and is a program under which eligible farmers are entitled to $5.00 of
Trust Units in the Farmers Equity Trust for every tonne of grain they deliver to
G3 Canada Limited.
are the benefits of the G3 Farmers Equity Plan?
The G3 Farmers Equity Plan provides
eligible farmers with a long-term ownership interest in their supply chain via
the Farmers Equity Trust, at no cost. Through the ownership of Trust Units,
farmers may benefit from the financial success of G3 Canada Limited through the
potential for future cash distributions.
is the purpose of the Farmers Equity Trust?
The primary purpose of the Farmers Equity
Trust is to own the 499,000 Class B shares in G3 Canada Limited which were
issued to the Trust on July 31, 2015.
is the difference between a Trust Unit and a share in G3 Canada Limited?
The Farmers Equity Trust holds 499,000 Class
B shares in G3 Canada Limited. Eligible farmers may be issued Trust Units by
the Farmers Equity Trust under the terms of the G3 Farmers Equity Plan.
farmers are eligible under the G3 Farmers Equity Plan?
Western Canadian farmers who have delivered
grain to G3 Canada Limited or the former CWB after August 1, 2013 and are not
tax exempt as defined by Section 149 of the Income Tax Act are eligible. In
addition, these qualifying farmers must complete and deliver an Eligibility
Certificate representing and warranting that they are a resident of the
Province of British Columbia, Alberta, Saskatchewan or Manitoba and are not tax
exempt in order to receive Trust Units.
Trust Units be held in a corporation or partnership?
Yes, provided the corporation or
partnership is engaged in the production of grain and is resident in Western
many Trust Units are eligible farmers entitled to receive?
An eligible farmer will be entitled to receive
Trust Units calculated on the basis of (i) the amount of grain that such farmer
delivers to G3 Canada Limited, net of dockage; (ii) the Incentive Rate per
tonne to be issued per metric tonne of grain delivered; and (iii) the value of
the Trust Units, as determined by the Trust and disclosed from time to
time. The Trustees will issue Trust
Units to eligible farmers who have completed and returned the prescribed
Eligibility Certificate until all available Trust Units have been fully
allocated. These transactions will be administered and recorded in a Trust
Registry maintained by the Trust’s transfer agent, Alliance Trust Company.
is the current Incentive Rate per tonne of grain delivered to G3 Canada
The Incentive Rate per tonne of grain
delivered to G3 Canada Limited has been set at $5.00. This amount is subject to
change from time to time, as agreed to by the Trustees and G3 Canada Limited.
Trust Units automatically be issued to farmers who deliver grain?
No. An eligible farmer must complete and return an Eligibility Certificate
which confirms that the farmer is eligible to receive Trust Units.
eligible farmers have a time limit in which to submit the Eligibility
No, so long as the Trust has not been wound
up in accordance with the Declaration of Trust. However, until such time as an Eligibility Certificate is submitted and
Trust Units are actually issued, a farmer will have no entitlement to any distribution
that may have been made by the Trust prior to the actual issuance of the Trust
constitutes ‘delivery’ of grain?
Grain is considered “delivered” to G3
Canada Limited after the grain has been offered, accepted, delivered and
settlement has been made. Grain delivered to an agent with a handling agreement
with G3 Canada Limited is considered delivered once they have reported
receiving the grain to G3, and initial payment has been settled.
and when can Trust Units be redeemed or transferred?
There are some scenarios under which
farmers may be able to redeem their Trust Units; however, the primary intention
of the G3 Farmers Equity Plan is to foster a long-term relationship between
farmers and G3 Canada Limited, as opposed to providing a cash-out opportunity.
The Declaration of Trust stipulates that farmers
may redeem their Trust Units at the age of 75, provided they have held them for
a minimum of three years, or, in the event of a Unitholder’s death, Trust Units
are redeemable by the estate. In both instances the redemption of Trust Units
is at the sole discretion of the Trustees having determined that there are
sufficient cash reserves in the Trust to complete the redemption.
Trust Units may also be redeemed in the
event the Trust is bought out.
The transfer of Trust Units by a Unitholder
is permitted in certain circumstances, where the transferee is related to the
Unitholder, as provided in the Declaration of Trust. Any other transfer of Trust
Units from one eligible farmer to another will only be permitted subject to the
approval of the Trustees, in their sole discretion.
The key opportunity for farmers is to share
in the long term success of G3 Canada Limited through the potential for future
there be cash distributions?
G3 Canada Limited may, from time to time,
decide to issue dividends to its shareholders – G3 Global Grain Group and the
Farmers Equity Trust. All or a portion of any dividends received by the Trust
may either be distributed to Unitholders or retained by the Trust as cash
reserves, at the sole discretion of the Trustees.
are cash distributions not guaranteed?
As with any business, there is risk, so any
financial return is not guaranteed. However, the more successful G3 Canada
Limited becomes, the more likely G3 Canada Limited is to issue dividends to its
shareholders. Cash distribution by the Trust to Unitholders is at the sole
discretion of the Trustees who must also take into account the cash
requirements of future potential redemptions.
can I find further information about the Farmers Equity Trust?
Further information about the Farmers
Equity Trust can be found at www.farmersequitytrust.ca.