Ann: WAV/RULE: FRE: FRE - Waiver from NZSX Listin

• Release Date: 01/05/12 12:33
• Summary: WAV/RULE: FRE: FRE - Waiver from NZSX Listing Rule 7.6.1
• Price Sensitive: No
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FRE
01/05/2012 10:33
WAV/RULE

REL: 1033 HRS Freightways Limited

WAV/RULE: FRE: FRE - Waiver from NZSX Listing Rule 7.6.1

30 April 2012

NZX Market Supervision Decision

Freightways Limited

Application for Waiver from NZSX Listing Rule 7.6.1

Background

1. Freightways Limited ("FRE") is a Listed Issuer with ordinary shares Quoted
on the NZSX Market.

2. FRE operates an employee share scheme known as the Freightways Limited
Senior Executive Share Plan (the "Scheme") under the terms of the Freightways
Senior Executive Performance Share Plan Rules in a Deed consolidated as at 31
March 2012.

3. Pursuant to the Scheme, FRE offers selected senior executives of FRE
("Participants") the opportunity to subscribe for redeemable partly paid
shares in FRE ("Shares"), in accordance with NZSX Listing Rules ("Rule")
7.3.6.

4. The mechanism for calculating the issue price of the Shares is prescribed
by the rules of the Scheme as being the issue price determined by the Board
of FRE at the time of issue, being generally the volume weighted average
price over the 10 trading days following the most recent announcement of
FRE's full year results to the market. On the issue date, the Participant
pays an initial payment as specified in a letter of offer to an eligible
employee; this will usually be 1 cent per Share.

5. The Shares become eligible for the conversion to ordinary shares (upon
payment of the unpaid amount) when, and if, the certain conditions are
satisfied.

6.  When a Share is fully paid, it will have all the rights, powers and
privileges of an ordinary share issued by FRE.

7. Shares that are not eligible for conversion are required to be redeemed on
the date which is 10 working days following the occurrence of:

(a) the relevant performance standard hurdle not being met within the
specified period (as may be extended):

(b) the Participant failing to pay any unpaid amount within the requisite
timeframe; or

(c) the Participant ceasing to be an employee or contractor of the FRE group.

8. This enables FRE to cancel a Participant's participation in the Scheme if
the Participant ceases to be entitled to require the conversion of a share to
an ordinary share for any reason, and to remove the Shares from the Scheme
and cancel the now surplus Shares.

9. When a redemption of Shares is required, FRE redeems the Shares by
repaying the Participant its paid up amount per Share. The redeemed Shares
are then cancelled by FRE.

10. Rule 7.6.1 prohibits the redemption of Equity Securities by an Issuer,
except in accordance with one of the exceptions in Rule 7.6.1(a)-(j). The
terms of the redemption contained in the Scheme do not fit within one of the
exceptions in Rule 7.6.1(a)-(c) and (e)-(j).

11. Rule 7.6.1(d) requires shareholder approval to be obtained for a
redemption, where the redemption does not fall within any of the other
exceptions in Rule 7.6.1.

Application

12. FRE seeks a waiver from Rule 7.6.1 so that it may redeem Shares pursuant
to the terms of the Scheme from time to time, without the need to seek
shareholder approval under Rule 7.6.1(d).

13.  In support of its application, FRE submits that:

(a) In seeking the waiver FRE has had regard to the policy of Rule 7.6.1 as
stated in the waiver granted to Renaissance Corporation Limited on 30 March
2010, where NZX Market Supervision ("NZXMS") noted:

"The policy behind Rule 7.6.1 is to ensure that redemptions or acquisitions
are not conducted on terms that are unfairly preferential or advantageous to
certain shareholders at the expense of remaining shareholders."

The waiver sought does not offend the stated policy behind Rule 7.6.1.

(b) There is precedent for waivers from Rule 7.6.1 for employee share
schemes, including that granted to Wellington Drive Technologies Limited on
24 March 2011.

(c) There is no prejudice to shareholders and no advantage to the executives
holding the partly paid shares, so the policy behind Rule 7.6.1 is not
offended.

(d) The redemption of the partly paid Shares is a mechanism to remove partly
paid employee shares from FRE's share register which will never be paid up
and will never convert to ordinary shares. It does not impact the holders of
ordinary shares and it is of no benefit or detriment to the Participants
concerned.

Rule 7.6.1

14. Rule 7.6.1 provides:

An Issuer shall not acquire or redeem Equity Securities of that Issuer other
than by way of:

(a) an acquisition effected by offers made by the Issuer through NZX's order
matching market, or through the order matching market of a Recognised Stock
Exchange; or

(b) an acquisition effected in compliance with section 60(1)(a) (read
together with section 60(2)) of the Companies Act 1993; or

(c) an acquisition of the nature referred to in section 61(7) of the
Companies Act 1993; or

(d) an acquisition or redemption approved in accordance with Rule 7.6.5; or

(e) an acquisition required by a shareholder of the Issuer pursuant to
sections 110 or 118 of the Companies Act 1993; or

 (f) an acquisition effected in compliance with section 60(1)(b)(ii) (read
together with section 61) of the Companies Act 1993 and:

   (i) is made from any person who is not a Director or an Associated Person
of a Director of the Issuer; and

   (ii) the total number of Equity Securities of the same Class acquired
together with all other Equity Securities of the same Class as those Equity
Securities that are to be acquired, pursuant to this Rule 7.6.1(f) during the
shorter of the period of 12 months preceding the date of the acquisition and
the period from the date on which the Issuer was listed to the date of the
acquisition, will not exceed 15% of the total number of Equity Securities of
that Class on issue at the commencement of that period; or

(g) a redemption from a holder who holds less than a Minimum Holding; or

(h) a redemption of Equity Securities issued:

  (i) before 1 September 1994; or

  (ii) in compliance with Rule 7.3.1(a) or Rule 7.3.4, where the Issuer is
bound or entitled to redeem those Equity Securities pursuant to their terms
of issue; or

(i) a redemption in compliance with section 69(1)(a) of the Companies Act
1993; or

 (j) a redemption of Equity Securities that are Debt Securities which may be
Converted into shares in an Issuer which is a company, and, before that
Conversion, they are redeemed in cash;

Provided that for the purposes of Rule 7.6.1(f):

(k) Securities which will, or may, convert to other Equity Securities shall
be deemed to be of the same Class as, and to correspond in number to,
Securities into which they will, or may, convert; and

(l) where the Conversion ratio is fixed by reference to the market price of
the underlying Securities, the market price for the purposes of Rule 7.6.1(f)
shall be the volume weighted average market price over the 20 Business Days
before the earlier of the day the acquisition is entered into or announced to
the market.

Decision

15. On the basis that the information provided to NZXMS is full and accurate
in all material respects, NZXMS grants FRE a waiver from Rule 7.6.1, to allow
FRE to redeem Shares pursuant to the terms of the Scheme without shareholder
approval.

Reasons

16. In granting a waiver from Rule 7.6.1, NZXMS has considered the following:

(a) The policy behind Rule 7.6.1 is to ensure that redemptions and/or
acquisitions are not conducted on terms that are unfairly preferential or
advantageous to certain shareholders at the expense of remaining
shareholders;

(b) FRE submits, and NZXMS accepts, with particular regard to paragraph
13(c)-(d) above, that this concern does not arise in the present
circumstances;

(c) To require FRE to call a meeting of shareholders to consider a resolution
to redeem Shares under the terms of the Scheme would impose an unnecessary
cost on FRE and, in effect, its shareholders;

(d) Under the Scheme terms, the ability to redeem Shares functions solely as
a mechanism for unwinding participation in the Scheme. Accordingly, there is
no financial advantage or detriment to any party; and

(e) There is precedent for granting waivers from Rule 7.6.1, including those
referred to in paragraph 13(a)-(b) above.

ENDS.
End CA:00222388 For:FRE    Type:WAV/RULE   Time:2012-05-01 10:33:17