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Andrew Tinkler

Newby Grange
Crosby on Eden

By Email and by Post

29 June 2018

Dear Fellow Shareholders

The Forthcoming Annual General Meeting of Stobart Group Limited

You will have received notice of the Annual General Meeting convened for 6 July 2018 and the
subsequent general meeting, to be held on 18 July 2018, and indeed may have already voted or be
about to vote. I believe it is of paramount importance that you have the facts fairly placed before you
so that you can make a clear and informed decision.


As you will be aware, the directors of Stobart Group Limited (the “Company" or "Stobart Group") are
currently engaged in a dispute which, fundamentally, is about the rights of shareholders to choose
who should run the Company on their behalf, and the strategy they wish the Company to pursue. I am
therefore writing to you, as the shareholders and owners of Stobart Group, to explain my position in
that dispute.

A few weeks ago, in May, I told the board of Stobart Group that I did not believe it was in the best
interests of the Company for the current chairman, Mr Ferguson, to remain in office. I believe that the
Company requires a robust, independent chairman to ensure that the Company sticks to its agreed
strategy and concentrates on delivering value to shareholders. The recent actions of Mr Ferguson
prove beyond doubt that he is the not the man for the job.

Instead of listening to the concerns expressed by me and a number of other significant shareholders,
Mr Ferguson and his supporters on the board chose to engage in a campaign of vilification, repeatedly
trying to blacken my name whilst claiming credit for the growth achieved and for the strategy which
William Stobart and I played an integral part in developing alongside the Company’s management

On 29 May 2018, an RNS announcement was published in the Company’s name which contained
defamatory comments about me and a considerable amount of misleading information. The wording
of this announcement had apparently been approved by a 'committee' of board members, namely,
Mr Brady, Mr Wood and Mr Coombs (the "Committee"). In my view the Committee is improperly
constituted, and is not acting either independently or impartially, a view which has been borne out by
all its actions since Mr Brady, Mr Wood, Mr Coombs and Mr Ferguson voted in favour of setting it up.
No other director voted in favour of the establishment of the Committee.

On 8 June 2018, the Company issued a notice of an Annual General Meeting which included a
resolution for my re-election as a director, alongside all other continuing directors, as is required by
the Listing Rules. Four working days later, one of my colleagues in Stobart Capital told me that he had
seen an announcement from the Company to the effect that I had been summarily dismissed. I
checked my emails, and discovered that, some 20 minutes prior to the release of that announcement,
I had been sent an email from Mr Wood on behalf of the Committee, purporting to terminate my
employment. This arrived without any prior warning or discussion. Given that the Committee is
improperly constituted and its terms of reference expressly exclude any power to terminate my

employment, the alleged termination is invalid, and in any event, the alleged grounds for termination
are without foundation. Notwithstanding this lack of any legal basis for the termination of my
employment, the Committee has purported to use the provisions of a service contract signed in 2007
with another group company to remove me from office as a director of the Company, even though
that contract gave the Company no such power. This is something which Mr Ferguson had been
planning to do since at least January 2018, when he presented me with a draft announcement
confirming my resignation, and followed that up with draft board minutes falsely stating that I had
tendered my resignation to the board - according to Mr Ferguson, in his statement to the Guernsey
Court, that was discussed at a meeting of the nominations committee at which I wasn’t even present.

Voting at the AGM

According to Mr Ferguson and the Committee, one of the effects of their attempt to remove me from
office as a director (notwithstanding that even they admit that is open to challenge) is to deprive
shareholders of the opportunity to vote for my re-election as a director at the AGM to be held on 6
July 2018, notwithstanding that a resolution for my re-election is part of the business of the AGM. The
contempt which Mr Ferguson and the Committee have for the views of shareholders is therefore very
clear. According to them, even if shareholders vote in favour of my re-election, that vote - your vote -
will be ignored. The resolution will not even be put to the meeting, if Mr Ferguson and the Committee
get their way.

I have therefore had to apply to the Court in Guernsey for an order to compel the directors to put the
resolution for my re-election to the AGM so that you, as shareholders, can decide the matter. I am
currently waiting to hear if the injunction has been granted. Irrespective of the outcome, I would urge
you to vote in favour of my re-election and to send a clear message to Mr Ferguson and the Committee
that it is for the shareholders, not them, to decide who should manage the Company on shareholders’

I would also urge you to vote against Mr Ferguson’s re-election. His willingness to use all the resources
of the Company against me, without any apparent regard for the cost or the harm done to the
Company and its relationships with its customers, suppliers and employees, makes him, in my view,
clearly unfit to continue in office.

Recent RNS announcements from the Company, both of which had to be quickly corrected, show that
the Company transferred more than 1.7 million shares on 19 June 2018 and more than 5.3 million
shares on 25 June 2018, a total of more than 7 million shares, worth more than £16m at the current
market price and carrying more than 2% of the voting rights in the Company, from treasury to the
trustee of the Company’s employee benefit trust. There was no requirement for any such transfers to
be made, certainly not on that scale, and shareholders are entitled to ask whether the transfers were
made with a view to the trustee voting in favour of Mr Ferguson’s re-election at the AGM, and diluting
all other shareholders’ voting rights in the process. My lawyers are writing to the trustee urging him
not to cast the votes attaching to any of the shares held in the trust, since that would very clearly be
inappropriate in the current circumstances. Since the shares have been taken out of treasury, the
Company will have to pay dividends on them, thereby increasing the cost of the dividend. Again, it
appears that Mr Ferguson and the Committee are prepared to take actions without regard to the costs
to the Company.

My response to the defamatory statements and the alleged grounds for my dismissal

As I have already stated, the allegations made to justify my alleged dismissal are completely without
foundation. They are largely based on the defamatory statements and half-truths included in the

announcement of 29 May 2018, and repeated in the letter which Mr Wood sent to you on 15 June
2018. Those statements are the subject of defamation proceedings which I am taking against all
ongoing board of directors, so I will not go into them in detail here, although I do summarise them
briefly below. As regards the alleged grounds for my dismissal, and the reasons why they are baseless:

• I am accused of “subverting the Board” by challenging Mr Ferguson and discussing the future
with fellow shareholders. It is right that I have challenged Mr Ferguson, who I believe is
responsible for a number of failures of corporate governance. My initial discussions with
shareholders were about my own role in the Company and were held with Mr Ferguson’s
knowledge and agreement although they quickly turned to my concerns, as a shareholder,
regarding the erosion of shareholder value arising from the board’s loss of focus on the
Company’s agreed strategy.

• I am accused of “destabilising the staff”. As I understand it, this is because over 80% of the
Executive Leadership Team have written an open letter to the board saying that they are
appalled (as I am) that this dispute is being fought out in public and giving their support for
the election of Philip Day, who has put himself forward to take over from Mr Ferguson as
chairman of the board. I am in no doubt that the true value of Stobart Group lies in its tireless
and professional employees. It is not my doing that Mr Ferguson has lost their support.

• I am accused of proposing transactions for Stobart Group that would benefit me and my
associates, to the detriment of other shareholders. The proposals I put forward through
Stobart Capital were proper and commercially sensible. Most if not all of these proposals did
not get beyond the planning stage and none of them could ever have proceeded without the
support of the board. Where related party transactions are concerned, they require the
approval of shareholders or at least confirmation that they are fair and reasonable. Some of
the proposals which are now said to have been contrary to the interests of the Company were
enthusiastically received at the time by the directors.

• I am accused in wholly non-specific terms of wrongdoing with respect to my expenses. All my

expenses claims were properly vetted and approved, and no concerns have ever been raised
until now. I am always conscious of the fact when claiming expenses that I am spending
shareholders’ money. If the Company were to identify any amount at all which it believed had
been incorrectly claimed, I would pay it back immediately. I hope all the other directors would
agree to do the same. The fact that the letter in which this claim was made was immediately
leaked to press tells you everything you need to know about it.

• The Company has made other claims in its circular of 16 June 2018 and in the RNS of 29 May

As regards the other defamatory statements made about me:

• The Company has brought a vexatious piece of litigation against me in relation to time-barred
tax indemnities given as part of a transaction which completed in 2008. The parties to the
transaction were independently advised and there is nothing unusual or wrongful about any
aspect of the transaction. I am fully committed to paying all sums owing, but there are no
sums due in this case. Again, this claim is without merit and is more a publicity stunt than a
piece of serious litigation.

All of these points have been raised now, not because there is any substance in them, but in an
attempt to discredit me in your eyes. I firmly believe the truth will prevail and my name will be cleared.

My relationships with Mr Day and Mr Woodford

The nature of my relationship with Mr Day and Mr Woodford has been wrongly portrayed and I believe
that it is important that you have the facts fairly placed before you.

Mr Day and I are business acquaintances, who have considered investing in projects together, but in
fact we have no business interests in common. We are also acquainted socially, and I have seen him
at events 7 times in the last 7 years. I have asked Mr Day for his advice on potential investments from
time to time and in that regards we have not had more than 4 business meetings. He is a highly
successful businessman, and a person whose advice I respect. For example, Mr Brady and I approached
Mr Day for his advice on an investment structure in relation to a structure for regional airline

As you are aware, Woodford Investment Management is, through the funds that it manages, a
significant shareholder in Stobart Group. Mr Woodford is one of the UK’s best known fund managers.
The idea that it might be somehow improper for me, as a director and fellow shareholder in Stobart
Group, to speak to Mr Woodford about matters concerning Stobart Group is of course nonsensical. I
have no investments in common with Mr Woodford, other than Stobart Group.

Your vote

I hope that you will vote to re-elect me as a director on 6 July, and vote against the re-election of Mr
Ferguson, who must accept full responsibility for the situation in which the Company now finds itself.
Then, at the EGM on 18 July, I urge you to elect Philip Day to be our new chairman. I believe he will
provide the strong independent leadership that the Company so badly needs, and with properly
constituted board around him he will be able to lead the Company past the recent unpleasantness,
and return it to the business of building shareholder value.

If you can attend the meetings in person, please do. General meetings are the proper forum for
shareholders to express their views. In any event, please submit your proxy form, showing how you
wish your proxy to vote, as soon as possible and by no later than the cut-off time on 4 July (for the
AGM) and 16 July (for the general meeting). If you have already submitted a proxy form and would
like to change your vote, please contact the Company’s registrars to obtain a new form of proxy and
submit that by the relevant cut-off date.

I believe that, with your support, we will be able to restore order to the Company’s affairs. It is time
for a change at the top, but I passionately believe that with the right independent chairman and board,
the business will prosper and build on the good work that the Company’s employees have been doing
over the last 10 years.

Yours sincerely

Andrew Tinkler