FREIGHTWAYS GROUP LIMITED — AGM Information 2023

Sep 28, 2023

Thursday 26 October 2023

Notice of Annual Shareholders Meeting

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Notice of Freightways’ Annual Shareholders Meeting:

NOTICE OF MEETING

Notice is hereby given to all Shareholders that the Annual Meeting of Shareholders of Freightways Group Limited ( Freightways ) will be held on Thursday, 26 October 2023 at 10.00am.

Freightways expects to offer shareholders the ability to attend the Annual Meeting virtually through the Computershare Meeting Services web platform, as well as in-person in the World Cup Lounge, Eden Park, Reimers Avenue, Kingsland, Auckland. Your CSN/Securityholder Number can be found on your Proxy/Voting Form for verification purposes.

Further details on how to participate virtually are provided in the Virtual Meeting Guide available at www.computershare.com/vm-guide-nz . Shareholders are encouraged to review this Guide prior to the Annual Meeting. If you have any questions or need assistance with the online process, please contact Computershare on +64 9 488 8777 between 8.30am and 5.00pm, Monday to Friday.

KEY DATES:

• Latest time for receipt of proxy forms: 24 October 2023, 10.00am

• Annual Shareholders Meeting: 26 October 2023, 10.00am

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Notice of Freightways’ Annual Shareholders Meeting:

BUSINESS

• A. Chairman’s introduction

• B. Chief Executive Officer’s Review and Trading Update

• C. Resolutions

To consider, and if thought fit, pass the following ordinary resolutions:

1. That Mark Rushworth be re-elected as a director of Freightways.

2. That Peter Kean be re-elected as a director of Freightways.

3. That the total quantum of the annual directors’ fee pool be increased by $107,855 from an aggregate of $857,145 to an aggregate of $965,000, such aggregate amount to be divided amongst the directors as they deem appropriate.

4. That the directors are authorised to fix the Auditors’ remuneration.

By Order of the Board

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Stephan Deschamps

CHIEF FINANCIAL OFFICER

29 September 2023

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Notice of Freightways’ Annual Shareholders Meeting:

PROXIES AND REPRESENTATIVES

Shareholders may exercise their right to vote at the meeting either by being present in person or by appointing a proxy to attend and vote in their place. A proxy need not be a shareholder of Freightways. A body corporate shareholder may appoint a representative to attend the meeting on its behalf. A combined admission card and proxy form is enclosed with this notice. If you wish to vote by proxy, you may either visit www.investorvote.co.nz to lodge your proxy or by completing and signing the proxy form and sending it to Freightways’ share registrar, Computershare Investor Services Limited. The proxy form will only be effective if it is received by Freightways’ share registrar no later than 10.00am Tuesday, 24 October 2023 , being 48 hours prior to the commencement of the meeting. A reply-paid envelope is enclosed if mailing the proxy form from within New Zealand.

EXPLANATORY NOTES

All references to the "Listing Rules" are references to the NZX Listing Rules, dated 1 April 2023.

RESOLUTIONS ON RE-ELECTION OF DIRECTORS

Shareholders should note the average tenure on the Board among the current directors is less than 5 years, following the retirement of two directors of long tenure (including the previous Board Chair) in 2021 and the appointment of three directors during 2021 and 2022.

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Notice of Freightways’ Annual Shareholders Meeting:

RESOLUTION 1: RE-ELECTION OF DIRECTOR

That Mark Rushworth be re-elected a director of the Company.

Mark Rushworth is retiring by rotation and offers himself for reelection. The Board has determined that Mark is an independent director and unanimously recommends that shareholders vote in favour of his re-election.

Mark was appointed a director in September 2015. He has extensive experience in the technology sector, with a decade’s governance experience, predominantly in the high tech and innovation space. An electrical engineer by training, with widespread operations and marketing experience, he spent 4 years on the senior executive team of Vodafone NZ, where among other things he had executive accountability for the fixed line business and as director of Marketing. Mark previously served as chief executive of Pacific Fibre, ihug and financial services company, Paymark Limited. Mark is currently Chief Executive Officer of private equity owned UP Education and a director of a number of private companies.

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Mark Rushworth BE(Hons), MEM

RESOLUTION 2: RE-ELECTION OF DIRECTOR

That Peter Kean be re-elected a director of the Company.

Peter Kean is retiring by rotation and offers himself for reelection. The Board has determined that Peter is an independent director and unanimously recommends that shareholders vote in favour of his re-election.

Peter was appointed a director in July 2016. He brings to Freightways many years of senior executive experience with the Lion group of companies in both New Zealand and Australia. Peter’s last executive roles were as Managing Director of Lion Nathan New Zealand and Managing Director of Lion Dairy and Drinks, based in Melbourne. Peter retired from Lion in 2014 and has since developed his career in governance. Peter is involved in a number of private companies both in New Zealand and in Australia.

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Peter Kean PMD Harvard

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Notice of Freightways’ Annual Shareholders Meeting:

RESOLUTION 3: DIRECTORS’ FEES

That the total quantum of the annual directors’ fee pool be increased by $107,855 from an aggregate of $857,145 to an aggregate of $965,000, such aggregate amount to be divided amongst the Directors as they deem appropriate.

The Directors review fees annually to ensure the aggregate amount available for Directors’ remuneration is adequate to allow Directors’ fees to remain aligned with market levels. The Directors did not apply for any annual incremental adjustment to the aggregate pool of Directors’ fees last year, so the current fee levels were last adjusted in 2021.

This year, the directors obtained independent market advice from Ernst & Young Limited ( EY ). A summary of EY’s benchmarking report is attached, including an independence declaration from the EY engagement partner. The Directors propose to apply an increase this year which allows non-executive directors to be paid at approximately the median level of peer group market data presented in the EY report. The proposed increase also allows for members of Board committees, in particular the Chairs of the committees whose workload is higher to be paid at approximately the median level of peer group market data presented in the EY report.

The increase in the aggregate fee pool requested of shareholders, which is below the amount recommended by EY, is 12.6%, with anticipated payments as follows:

		POOL Fees(per annum)	POOL Fees(per annum)
	Position	2022 $	2023 $	Percentage Increase
Board of Directors	Chair	180,000	185,000	2.8%
	Director	100,000	100,000	0%
Audit & Risk Committee	Chair	20,000	23,000	15%
	Member	-	14,000	-
People & Remuneration Committee	Chair	15,000	19,000	26.7%
	Member	-	10,000	-
Committee Work Pool (unallocated - only used if required)		42,145	42,145	-
Total Annual Pool Limit		857,145	965,000	12.6%

The specified fees are the total fees that were or are anticipated to be paid to each director for each relevant period, including committee chair or committee member fees (as applicable).

It should be noted that currently the aggregate annual fees paid to six directors amounts to $857,145. The total amount of proposed fee increases the Board is contemplating paying going forward amounts to $107,855 in aggregate above current levels. This would allow for the payment of the additional director if deemed appropriate and would leave a balance of $42,145 unused (4.3 percent of the aggregate increased fee pool) for any unforeseen and extraordinary work.

In accordance with NZX Main Board Listing Rule 6.3.1, the directors and their Associated Persons are restricted from voting on this resolution.

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Notice of Freightways’ Annual Shareholders Meeting:

RESOLUTION 4: AUDITORS

That the directors are authorised to fix the Auditors’ remuneration.

The present auditors of the Company are PricewaterhouseCoopers. Under the Companies Act 1993 they will continue in office.

MEETING VENUE – EDEN PARK

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P5
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The Freightways Annual Shareholders Meeting will be held on Thursday 26 October 2023 at 10am in the World Cup Lounge, Level 4, South Stand, Eden Park, entrance via Gate G (off Reimers Avenue). Please park in the P5 parking area (highlighted green above).

There will be a limited number of car parks available by the South Stand entrance on a first come, first served basis.

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Review of NonExecutive Director Fee Practices

Summary report

Freightways Group Limited

27 September 2023

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Freightways Group Limited September 2023

1. Executive summary

Freightways Group Limited (Freightways) has engaged Ernst & Young Limited (EY) to prepare a report in relation to Non-Executive Directors’ (NED) fees. We confirm that our report has been prepared independently and is not subject to any influence from the management or any Board member of Freightways or any third party.

The findings in this section summarise the market positioning of Freightways’ Chair, other NEDs and Committee fees compared to the market data. Fees are ‘at’ the relevant market reference point if positioned within 10% of the market data reference point.

The market information pertaining to fee policy practices within the comparator group has been sourced from EY’s Directors’ fees database, supplemented with data from the most recent financial year-end annual reports. The information from annual reports is publicly available information. The comparator group has been agreed with Freightways as the basis from which we perform our analysis.

We acknowledge that there is a time lag in remuneration disclosures from the chosen organisations. Generally, Ernst & Young does not support ‘ageing’ market data to account for this time lag. Therefore, the data used in this analysis is factual and has not been aged.

1.2 Board Chair, Other NEDs and fee pool policy positioning

Table 1 below compares Freightways’ Board Chair fee policy, other NEDs fee policy and the aggregated fee pool to the agreed comparator group.

Table 1: Board Chair, Other NEDs and fee pool policy positioning	Table 1: Board Chair, Other NEDs and fee pool policy positioning
Chair fee policy	Other NEDs fee policy	Fee pool policy
Freightways’ Board Chair fee policy is aligned to all three quartiles, although we note that the interquartile range is narrow.	Freightways’ other NEDs fee policy is aligned to both the median and the 75th percentile, although we note that the interquartile range is narrow.	Freightways’ approved maximum aggregate fee pool is aligned to the median of the market data.

1.3 Recommendations

When developing the recommendations below, we have considered the following factors:

• Director workload, including whether the workload required of NEDs has changed significantly since Freightways’ last review of Director’s fees and/or is likely to increase prior to the next review. This also includes consideration of Committee workload as represented by meeting frequency compared to the comparator group.

• Market movements and trends for NED fees as observed in the Institute of Directors’ Fees Report 2022/23 (3.5% for Chairs and 3.1% for other NEDs respectively)

• Current NED fees versus the comparator group and Freightways’ position against the comparator group data set: equating to 112% of the median for market capitalisation (i.e. between the median and the 75[th] percentile)

• The internal relativities of fee practices between the Chair, other NEDs and Committee Members at Freightways.

Based on the considerations above, information provided by Freightways’ Board and the EY Directors’ fee database, our recommended fee structure for Freightways NEDs is set out in Table 2 below.

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Freightways Group Limited September 2023

Table 2: Recommended fee increases
Role	Freightways’ Current Practice ($)	Recommended Fee ($)	Recommended Increase (%)
Chair fee policy	180,000	185,000	2.8
Other NEDs fee policy	100,000	100,000	-
Committee feepolicies
Audit and Risk Committee – Chair	20,000	23,000	15
Audit and Risk Committee – Member	-	14,000	-
People and Remuneration Committee – Chair	15,000	19,000	26.7
People and Remuneration Committee – Member	-	10,000	-
Nominations Committee - Chair	-	-	-
Nominations Committee - Member	-	-	-
Feepool
Aggregate fee pool	857,145	990,000	12.6

1.4 Aggregate fee pool

The current available fee pool is $857,145. The fees received by Directors of Freightways for the year ended 30 June 2022 was $723,668, impacted by Director resignations during this period. If the above recommendations were adopted, the aggregate fees paid to Directors would exceed the current maximum aggregate fee pool limit of $857,145.

To ensure Freightways has sufficient aggregate fee pool headroom, EY recommends the approved maximum aggregate fee pool limit be increased to $990,000 inclusive of the committee work pool of $42,145. Increasing the maximum aggregate fee pool limit to $990,000 would provide Freightways with fee pool headroom of approximately 1.5x the proposed NED fee policy.

Thank you for the opportunity to assist Freightways with this assignment.

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Una Diver Partner – People Advisory Services Ernst & Young Limited

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Freightways Group Limited September 2023

Appendix A

Freightways’ comparator group (n=19)

Table 3: Comparator group (n=19)
Organisation	Market Capitalisation ($ millions) as at 1June 2023
Air New Zealand Limited	2,611
Argosy Property Limited	932
Arvida Group Limited	861
Briscoe Group Limited	971
Chorus Limited	3,626
Delegat Group	977
Genesis Energy	2,930
Goodman Property Trust	3,066
Kiwi Property Group Limited	1,445
Manawa Energy	1,487
Precinct Properties New Zealand Limited	1,927
Property for Industry Limited	1,180
Pushpay Holdings Limited	1,622
Skellerup Holdings Limited	939
SkyCity Entertainment Group Limited	1,726
Summerset Group Holdings Limited	2,087
Tourism Holdings	831
Vital Healthcare Property Trust	1,523
Vulcan Steel	1,072
25thpercentile	974
Median	1,487
75thpercentile	2,007
Freightways Group Limited	1,670
	Between the median and the 75th percentile

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EY | Assurance | Tax | Transactions | Advisory

About EY

EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organisation and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organisation, please visit ey.com.

Our report may be relied upon by Freightways Group Limited for the purpose of understanding the remuneration market for Non-Executive Director roles only pursuant to the terms of our engagement letter dated 19 April 2023. We disclaim all responsibility to any other party for any loss or liability that the other party may suffer or incur arising from or relating to or in any way connected with the contents of our report, the provision of our report to the other party or the reliance upon our report by the other party.

© 2023 Ernst & Young, New Zealand. All Rights Reserved.

ey.com

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Freightways Group Limited

Lodge your proxy

Online www.investorvote.co.nz

By Mail Computershare Investor Services Limited Private Bag 92119 Auckland 1142 New Zealand

For all enquiries contact

+64 9 488 8777

corporateactions@computershare.co.nz

Proxy/Voting Form

www.investorvote.co.nz

Lodge your proxy online, 24 hours a day, 7 days a week:

Smartphone? Scan the QR code to vote now.

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Your secure access information

Control Number:

CSN/Shareholder Number:

PLEASE NOTE: You will need your CSN/Shareholder Number and postcode or country of residence (if outside New Zealand) to securely access InvestorVote and then follow the prompts to appoint your proxy and exercise your vote online.

For your proxy to be effective it must be received by 10:00am Tuesday 24 October 202 3

How to Vote on Items of Business

All your shares will be voted in accordance with your directions.

Casting your vote

You may cast your vote in one of the two ways described below. You may abstain from voting on the resolutions.

(a) Attending and voting in person or virtually:

You can attend the meeting virtually through the Computershare Meeting Platform https://meetnow.global/nz. Select the Freightways meeting and click ‘JOIN MEETING NOW’ Further information is provided in the Virtual Meeting Guide available at www.computershare.com/vm-guide-nz. If you attend in person you should bring your proxy/voting form or your CSN/Shareholder Number to assist with registration at the meeting.

(b) Appointing a proxy:

You may appoint a proxy to attend the meeting and vote on your behalf. Visit www.investorvote.co.nz to lodge your proxy, or, complete step 1 and step 2 on the reverse of this proxy/voting form, sign where indicated and return to Computershare in the reply paid envelope provided.

Note: The proxy holder does not need to be a shareholder of the Company. If you appoint a Director as your proxy, then any undirected proxies granted to the Director will be voted in favour of the resolutions except that Directors standing for election or re-election will abstain from voting discretionary proxies in respect of their own appointment. In accordance with NZX Main Board Listing Rule 6.3.1, the Directors and their Associated Persons are restricted from voting on resolution 3. A body corporate which is a shareholder may appoint a representative to attend the meeting on its behalf in the same manner as that in which it can appoint a proxy.

Attending the Physical Meeting

Bring this form to assist registration. A corporate shareholder may appoint a representative to attend the meeting by completing the form overleaf and returning it to Computershare by no later than 10:00am Tuesday 24 October 2023.

QR Code

To scan the code above you need to have already downloaded a free QR code reader application to your smart phone.

Signing Instructions for Proxy Forms

Individual

Where the holding is in one name, the shareholder must sign.

Joint Holding

Where the holding is in more than one name, all of the shareholders should sign.

Power of Attorney

If this Proxy Form has been signed under a power of attorney, a copy of the power of attorney (unless already deposited with the Company) and a signed certificate of non-revocation of the power of attorney must be produced to the Company with this Proxy Form.

Companies

This form should be signed by a Director jointly with another Director, or a Sole Director can sign alone. Please sign in the appropriate place and indicate the office held.

If you do not name a person as your proxy (but have otherwise completed the proxy form in full) or your named proxy does not attend the meeting, the Chair will be appointed your proxy and will vote in accordance with your express direction, and any undirected votes will (subject to any restriction(s) set out in the NZX Listing Rules) be voted in accordance with the Chair's discretion.

Go online to lodge your proxy or turn over to complete the form

CSN/Shareholder Number: Number of Shares:

Elect Electronic Communications

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Email Address

(By providing an email address above it is acknowledged that all communications for my portfolio will be received electronically where offered)

Proxy/Voting Form

STEP 1 Appoint a Proxy to Vote on Your Behalf

I/We being a shareholder/s of Freightways Group Limited

hereby appoint

of

or failing him/her

of

as my/our proxy to vote for me/us on my/our behalf in accordance with the following directions at the Annual Meeting of Freightways Group Limited to be held in the World Cup Lounge, Level 4, South Stand, Eden Park, Reimers Avenue, Kingsland, Auckland on Thursday, 26 October 2023 at 10:00am and at any adjournment of that meeting.

If your proxy is not the Chair of the Meeting or any other director of the Company, please ensure that you provide their contact details (phone and email address). If this information is not provided, we cannot guarantee remote admission to the virtual meeting for your proxy. Proxy contact Details (Phone): and (Email):

STEP 2

Items of Business - Voting Instructions/Ballot Paper

Please note: For each resolution below you must tick one box. If a box relating to a resolution is not ticked, the vote on that resolution will be invalid.

Business

To consider, and if thought fit, to pass the following ordinary resolutions:

1. That Mark Rushworth be re-elected as a director of Freightways.

2. That Peter Kean be re-elected as a director of Freightways.

3. That the total quantum of the annual directors’ fee pool be increased by $107,855 from an aggregate of $857,145 to an aggregate of $965,000, such aggregate amount to be divided amongst the directors as they deem appropriate.

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Proxy
For Against Abstain Discretion
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1. That the directors are authorised to fix the Auditors’ remuneration.

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SIGN Signature of Shareholder(s) This section must be completed.
Shareholder 1 Shareholder 2 Shareholder 3
or Sole Director/Director or Director (if more than one)
Contact Name Contact Daytime Telephone Date
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ATTENDANCE SLIP

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Annual Meeting of Freightways Group Limited to be held in the World Cup Lounge, Level 4, South Stand, Eden Park, Reimers Avenue, Kingsland, Auckland on Thursday, 26 October 2023 at 10:00am

CSN/Shareholder Number: Number of Shares: