Keioc A3 Appendices

Public Inquiry into application for: mixed-use development including a new football stadium, retail, residential and leisure uses on land in Kirkby

Proof of Evidence of KEIOC Campaign Mark Grayson – Everton Football Club Shareholder

Appendices

Reference: KEIOC/A/3 Planning Inspectorate Reference: APP/V4305/V/08/1203375

December 2008

KEIOC/A/3 Proof of Evidence - Mark Grayson Appendices

Appendix 1:

Guardian Article ‘Hopes Fade for Everton Stadium, dated 22nd February 2003 BBC Sport Article ‘Everton Fail in King’s Dock Bid’, dated 11th April 2003

Appendix 2:

BBC Sport Article ‘Vital backing for new Everton home’, dated 20th June 2001 Liverpool Echo Article ‘Dream Comes True for Bill’, dated 23 Jul 2001

Appendix 3:

Kings Dock Ballot Brochure ‘Moving to a Vision in Blue’, November 2000

Appendix 4:

Liverpool Echo Article ‘Blues’ Fans Yes to Kings Dock Move’, 27th November 2000

Appendix 5:

Liverpool Echo Article ‘ Kenwright Calls for Trust’, dated 4th December 2001

Appendix 6:

BBC Sport Report ‘Everton Revive Stadium Move’, dated 18th December 2002

Appendix 7:

Property Week Article ‘Cash Query Catches Everton Stadium Plans Offside, dated 6th September 2002 Daily Post Article ‘Everton FC’s £30m Stadium Challenge’, dated 30th August 2002

Appendix 8:

Liverpool Echo Article ‘The Deal that got away by two hours’, dated 5th October 2001

Appendix 9:

Daily Telegraph Article ‘Smith to Stay at Everton’, dated 13th November 2000 Liverpool Echo Article ‘A Most Untimely On-Field Crises’, dated 3rd January 2002

Appendix 10: BBC Sport Report ‘Everton Bid For More Time’, dated 5th December 2002 Appendix 11: Daily Post Article ‘Gregg Must Step Out of the Shadows’, dated 4th September 2002 Daily Post Article ‘Everton Kings Dock Bombshell’, dated 25th October 2002 Appendix 12: Daily Post Article ‘Blues Share Plan Backed’, dated 14th January 2004 Appendix 13: Transcript of the 2004 EGM Appendix 14: BBC Sport Article ‘Everton Chief Birch Resigns’, dated 16th July 2004 Appendix 15: Independent Article ‘Kenwright Gives Himself Four Days to Save Everton’, dated 27th July 2004 Appendix 16: Independent Article ‘Gregg Pledges Cash for Moyes in Battle of Goodison’, dated 1st August 2004 Appendix 17: Daily Post Article ‘Everton Man in the Middle Does a U-Turn’, dated 3rd August 2004 Appendix 18: Sunday Times Article ‘Geneva Financier Mounts Takeover Bid for Everton’, dated 19th September 2004 Appendix 19: Liverpool Echo ‘Blues Wait for Fortress Money’, dated 21st December 2004 Appendix 20: Liverpool Echo ‘Gregg; I’m Not the Issue in Fund Farce’, dated 5th April 2005 Appendix 21: Copy of Ian Ross’ email to Everton Shareholder Colm Kavanagh Appendix 22: Companies Form 403a, dated 2nd September 2004 Appendix 23: Toffeeweb Article ‘Finally the £10.4m truth’, dated 14th January 2005 Appendix 24: Everton Football Club Company Limited 2006/2007 Annual Report and Accounts Appendix 25: 1996 Six for One Rights Issue of 30,000 new shares of £1 each at £500 per share

KEIOC/A/3 Proof of Evidence - Mark Grayson Appendix 26: Norwich City Official Website ‘Share Offer and Annual Accounts Announced’, dated 5 Dec 2003 Appendix 27: An Extract from the Official Matchday Programme, dated 11th August 2008 Appendix 28: Destination Kirkby Ballot Literature ‘The Future for Everton’ Appendix 29: Copy of the Pre EGM Requisition Form and Literature, dated June 2008 Appendix 30: BBC Sport Article ‘Everton Chief Executive Resigns’, dated 30th July 2008 Appendix 31: Articles of Association (since amended) Appendix 32: Copy of the 2nd EGM petition and Accompanying EGM literature Appendix 33: Evening Standard ‘Green at Heart of Everton Battle’, dated 27th October 2006 Appendix 34: Daily Mail ‘Wyness Exit Leaves Green to Hold Sway’, dated 2nd August 2008 Liverpool Echo ‘Everton FC, Blues Fans and the Credit Crunch’, dated 5th August 2008 The Times ‘Disquiet Grows over Keith Wyness Exit’, dated 6th August 2008 Appendix 35: Everton FC Official Website ‘EGM Resolution Defeated’, dated 3rd September 2008 Appendix 36: Everton FC Official Website ‘Elstone on Clear Mandate’, dated 4th September 2008 Appendix 37: Extract from the verbatim minutes of the 2008 EGM Appendix 38: Official Everton FC website ‘Kenwright’s Billionaire Wish’, dated 3rd September 2008 Daily Post Article ‘Everton Pledge to Fight on for Kirkby Stadium’, 4th September 2008 Appendix 39: The Observer ‘Everton Sale if Stadium Gets Go Ahead’, dated 3rd August 2008 Appendix 40: BBC Sport ‘Everton on the Verge of Sale’, dated 10th October 2008 Appendix 41: Official Everton FC website ‘Club Statement’, dated 10th September 2008 Liverpool Echo ‘Everton EGM Ruling Grounds to Make a Point’, 12th September 2008

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 1

Everton fail in King's Dock bid BBC Sport, Friday, 11 April, 2003

King's Dock will not be Everton's new home Everton's dream of building a new 55,000-seater waterfront stadium at King's Dock has died. The audacious plan to relocate Everton from Goodison Park to a new home has been abandoned after they failed to raise enough cash to fund their share of the £155m project. The Liverpool Vision development agency and Everton have released a statement confirming the end of the scheme - although the club insist they will still leave Goodison. Everton owner Bill Kenwright - who had made it a personal mission to move the club to a new home on the banks of the River Mersey - admitted it was a bitter blow to their ambitions. He said: "I know that everybody connected with Everton - board, shareholders and above all our fans will be disappointed. "We intend however to use the experience we have gained in this venture to help bring about our ambitions to take Everton forward. "Everton will now be working very closely with Liverpool City Council to deliver the first class stadium which Everton supporters want and deserve." A joint statement issued by Liverpool Vision and Everton confirmed: "Over the last year Liverpool Vision and Everton FC have made enormous efforts to deliver proposals for a purpose-built Arena and associated developments at King's Dock. "It was a hugely bold, ambitious and exciting plan - one of the biggest developments of its kind taking place in Europe. "However, it became clear that the funding of the scheme had become problematical and on 31 December, 2002 it was decided that Liverpool Vision would end Everton's status as the preferred developer for the site. "At the same time, it was made clear that there would be a three month window of opportunity for Everton to come forward with alternative proposals which would still be considered alongside other options for the site. "The club has recently presented new proposals for the Kings Dock site which have been the subject of close and detailed examinations. "Unfortunately, it is accepted by both parties that these plans are not now achievable. "The sheer scale and ambition of both the original and amended schemes mean that they will not be able to attract the level of funding needed to deliver the standard of development which the city of Liverpool deserves."

http://news.bbc.co.uk/sport1/hi/football/teams/e/everton/2940481.stm

Hopes fade for Everton stadium Helen Carter guardian.co.uk, Saturday 22 February 2003 Everton football club's dream of moving to a multi-million pound waterfront stadium has turned to dust amid spiralling costs, it emerged yesterday. The club had hoped to leave the outdated Goodison Park stadium, its home since 1892, for a £300m state of the art building in Kings Dock, Liverpool. But Everton had to pull out of the project as it was unable to raise sufficient funds. Construction costs have risen from £155m two years ago to £170m now. Instead of a football stadium, a smaller £100m concert arena and conference centre will be built on the dock site. It could open within five years and the project is key to the city's attempt at becoming European Capital of Culture in 2008. "During the course of what has been a protracted process, Everton's commitment to Kings waterfront has never wavered," said Ian Ross, the club's head of corporate affairs. "We have pursued the vision of a new and spectacular stadium with vigour, determination and professionalism. "It is untrue to suggest that Everton football club has attempted to modify the arena's original masterplan to reduce construction costs." The club said it had promised supporters a unique, world-class stadium. It was that or nothing. Everton lost its status as preferred bidder for the Kings Dock site last December. The club had hoped a rescue package put together by deputy chairman Bill Kenwright would keep the dream alive. The club has reportedly been planning a cheaper design alternative - sacrificing the retractable roof and sliding pitch which made the stadium such a versatile scheme. With the team currently fifth in the Premiership under new manager David Moyes, the club has been playing to large crowds all season. Despite the collapse of the Kings Dock plan, Everton will eventually move to a new stadium. A number of potential sites were identified six years ago when the initial decision was taken to move out of Goodison.

http://www.guardian.co.uk/uk/2003/feb/22/football.helencarter

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 2

Vital backing for new Everton home Wednesday, 20 June, 2001, 15:52 GMT 16:52 UK Plans by Everton Football Club to build a new waterfront stadium have received vital approval from regeneration leaders. Board members of Liverpool Vision - the company charged with spearheading the city's economic revival have backed the move which would see the club quit its historic Goodison Park ground.

How Everton's new Kings Dock stadium would look

The club wants to create a 55,000-seater stadium at Liverpool's Kings Dock on the banks of the River Mersey. Everton's plans are being put forward by Houston Securities, a consortium which includes Everton and Texas-based entertainment giant SFX. The new stadium will boast a retractable roof and roll-out pitch. The £125m complex will also include a 150-bed hotel, a night club, health spa, multiplex cinema and family entertainment centre, as well as 400 homes. Bill Kenwright, Everton's deputy chairman, said of Liverpool Vision's decision: "This is a tremendous step forward in our bid to provide a world-class facility for our city and for all Evertonians." Everton had faced a head-to-head battle with the Ician consortium, which wants to create a 250,000 sq ft conference and sports arena, a network of canals surrounded by apartment blocks and a landmark Liverpool Eye tower. However, the backing of Liverpool Vision means the club is almost certain to receive approval from English Partnerships, which owns the 36-acre site, and is due to make a final decision on its future in July. Sir Joe Dwyer, chairman of Liverpool Vision, said: "The Liverpool Vision Board has considered the two excellent proposals of Ician and Houston Securities for the development of Kings Dock. "After detailed consideration, Liverpool Vision has recommended the Houston Securities scheme to the English Partnerships Board for approval at their next meeting in early July. "The Liverpool Vision Board reached this decision being fully aware of the hurdles to be overcome in achieving a successful outcome." Liverpool City Council leader Mike Storey said: "I think this is really good news for the city. "The company involved in this also built the Amsterdam Stadium so they are very experienced. "As well as football, the venue would also be used for two or three major concerts each which should attract 50,000 or more visitors each." However some people living near the site are opposed to Everton's plans. The proposal will also have to be considered by Liverpool's planning committee and could be considered by a public inquiry.

http://news.bbc.co.uk/sport1/hi/football/teams/e/everton/1398751.stm

Dream comes true for Bill, Jul 23 2001 By KEN ROGERS, Liverpool Echo EVERTON owner Bill Kenwright today told of his relief and elation that his stadium dream can now become a reality. Kenwright was centre stage at the Maritime Museum as Liverpool Vision formally announced that Houston Securities the working name for the Everton-led project is the preferred developer for the riverside site after a lengthy battle with a host of rivals. Everton's majority shareholder said: "Alongside the feelings of relief that the announcement has now been made is also a huge rush of adrenalin and a desire to get on with the job." He recently jetted to Holland and Germany with fellow director and SFX Europe chairman Paul Gregg to view two state of the art venues. SFX is one of the world's largest entertainments companies, and will help make the Kings Dock arena a 52 weeks of the year multi-purpose facility. Kenwright said: "When Paul Gregg and I visited the Amsterdam Arena I was impressed by the 24hour operation and the way it seemed to be non-stop. An army of people were getting the arena back into shape after a major event which had attracted an audience of around 77,000. "In the middle of all this, the Ajax players were walking around in their training gear while a constant stream of visitors came and went. There was a real buzz about the place. "It was fantastic. I thought to myself just how much our club and our city would love a facility like this. "But it is always easier building an arena of this sort when you can learn from other people's lessons. The Amsterdam Arena was built in 1996. It is spectacular but there are things they would definitely change if they were to build it all over again. We will benefit from their advice." Kenwright added: "Our stadium will be of the highest order. We also have this extraordinary position on the banks of the Mersey. It is a prime site. We must be visionary with the design. It's a real opportunity for the architects, who already have shown us a thrilling concept. "Whether you are talking about a corporate situation or ordinary fans, for football or other events, the views inside the stadium will be sensational." He added: "If my final legacy to my home town is that I am part of a fantastic monument to entertainment that will bring a lot of pleasure to people on the banks of the Mersey then I will be a very happy man. The dream is drawing ever closer." LIVERPOOL will be given a major boost by the arena and stadium development said Sir Joe Dwyer, chairman of the city-council backed regeneration agency, Liverpool Vision, today. The former boss of Wimpey plc said the development is crucial to the emergence of Liverpool as an international tourist destination. His view was echoed by the leader of Liverpool city council, Mike Storey, who said: "This announcement today paves the way for a superb world class arena and stadium for the city of http://icliverpool.icnetwork.co.uk/0400evertonfc/0100news/0100newsarchive/0800july/tm_method=fu ll%26objectid=11171824%26siteid=50061-name_page.html

Liverpool and Merseyside. It will be a fanastic showcase for our city and will also give Everton FC an amazing stadium. "When I became the leader of the city council I expressed my ambition to see an arena being built and now we are on the brink of achieving that aim. It will take the whole area forward, bringing international stars and major events." Cllr Storey acknowledged that there are still hurdles to cross as the project goes through planning, environmental impact and finance procedures. The expectation, however, is that the development will be completed in the autumn of 2005. Sir Joe spoke of the global impact of the prestige development at the official announcement of the Everton FC consortium being the preferred development partner for Kings Dock. "In order to achieve true international tourist destination status, there is a need to create more diverse opportunities," said Sir Joe. "This is precisely why the Kings Waterfront development is so important to the future of the city and the region. "The developers' brief for Kings Waterfront indicated a preference for arena/conference/exhibition/family entertainment facilities together with non-competing retail and specialist residential development." Earlier this year Liverpool Vision launched a world wide search for a potential developer for Kings Dock. Interest was expressed from every continent but it came down to five bidders and finally two Houston Secur ities, fronting Everton's bid, and rival developer Ician, who wanted to create a "Venice of the North". Sir Joe added: "Many of the excellent proposals submitted had elements of acceptability. Ultimately, it was the multi-functional Houston Securities scheme that attracted the support of the Liverpool Vision Board. "I am pleased, therefore, that with the support of our public sector partners, we are pleased to formally announce that the Houston Securities Bid has been successful and will be awarded preferred developer status for an initial period of six months. "During this time, the public bodies (English Partnerships, Liverpool city council and the Northwest Development Agency) will work closely with the preferred development partner to overcome a number of issues that exist in order to be confident that this stunning world class opportunity is realised for the benefit of the region. "And it will prove to be the catalyst for the creation of Liverpool as a truly international tourist destination." TODAY'S decision triggers the start of an exercise to dissect every aspect of the stadium plan. Planning, environmental impact, transport implications and the way the scheme will be financed will be examined. Developer Houston Securities and partner Everton FC have been given six months to come up with answers. http://icliverpool.icnetwork.co.uk/0400evertonfc/0100news/0100newsarchive/0800july/tm_method=fu ll%26objectid=11171824%26siteid=50061-name_page.html

Critical will be the share of public and private money invested. Millions of pounds of public money will be sought from Europe under Objective One and other regional development sources to help pay for infrastructure. The North West Development Agency will also be involved in funding, as will Liverpool city council. Officials insist the project will not cream off Euro money that would have gone to other parts of Merseyside. All the processes will take place over the next year, with work hopefully starting on the £300m project before the end of 2002, for completion in 2005. International promoter Clear Channel Entertainment Europe, formerly known as SFX, has put in at least £30m. The arena and stadium will be run by a joint venture company, with a 51% public stake held by site owner English Partnerships, the North West Development Agency and Liverpool City Council. The other 49% will be owned by the Everton consortium. Everton will be the main tenant, effectively paying rent to a company half owned by its own consortium.

http://icliverpool.icnetwork.co.uk/0400evertonfc/0100news/0100newsarchive/0800july/tm_method=fu ll%26objectid=11171824%26siteid=50061-name_page.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 3

In March this year, the Directors commissioned a further feasibility study to report on the options of remaining at the ancestral home of Goodison Park, engaging Architects Ward McHugh Associates and Accountants Deloitte & Touche, to investigate the architectural issues and commercial viability of the project. Remaining at Goodison Park realistically centres around two options. THE EXTENDED GOODISON FOOTPRINT OPTION

be restricted to bui lding a 45,000 capacity

There are still issues to be addressed before

The opportunity to redevelop a new 55 ,000

stadium. This alternative scheme could only

our vision could become a reality.

capacity stadium would necessitate us

be achieved by a phased redevelopment over a

extending t he existing footpr int from 8 to

3/4 year period, wit h our capacity being

15 acres. If achievable this would also give

reduced to around 30,000 for anyone period

the Club the opportunity to create a mix of

during redevelopment and would be greater

commercial and retail development which

for a major part of anyone season. That in

.For instance we must receive guarantees that an integrated transport and infrastructure plan is delivered to cope with the additional pressures such a development would create.

in theory should have supported t he project

itself would have put a stra in on being able

The Board must give detai led considerat ion

financ ially. This extended footprint would

to sat isfy t he demands from our supporters

to the finan cial consequences of any such

however have necessitated the permanent

as our average attendance in recent years has

proposal. This must not put an undue

closure of Bullens Road, compulsory

reached 35,000 .

burden on our financial resources. Too often

Infight ofall these considerations the Board had feltthey had no alternative but to investigate alternative sites within the City boundaries.

facil ity or stadium only to have to sell their

purchase of 91 residential properties and the relocation of the Gwladys Street School. To some degree a number of these issues could have been overcome by offering to re-house

in the past we have seen clubs create a new best players to f inance t he project. The Board is clearly of the view that any stadium must be capable of increasing our revenue

the school and approximately half the residentia l properties on the former Eileen

THE KINGS DOCK WATERFRONT OPPORTUNITY

Craven School site (Walton Lane). Deloitte

Thi s summer the Board decided to explore

of the squad rather than weakening it. The

& Touche advised us however, that their research

an interest in t he Kings Dock site currently

early indicators are that the Kings Dock

streams, to assist with f urther strengthen ing

had indicated that the revenue created from

owned by The English Partnership . The site

scheme may ultimately cost the Club

any ancillary development was unlikely to

is described as being one of the most exciting

considerably less than either of the two Goodison options .

be substant ial and as such a new stadium

waterfront development opportu nities in

was likely to have a net cost to the Club of

Europe and simply cannot be ignored. Our

approaching £50m, all of which would have

ult imate vision would be to create a unique

had to be financed by the Club itself. '

55,000 super stadium, retaining many of Goodison's traditional features.

.We shared our plans with Mr D Henshaw, Liverpool City Council 's Chief Execut ive.

Hist orically the name of Everton has been

Senior City Council officers responded by

synonymous with being at the foref ront of

suggesting that the problems associated

stadium design. The Kings Dock site offers

with such a proposal would have been

us a once in a lifet ime chance to investigate

enormous and would meet with substant ial

in detai l a proposal to build a new home for

objections from not only local residents , but

the benefit of future generations of Evertonians.

also the City Planners, as the scheme fell outside the Liverpool Unitary Development

The new stadium would be owned and

Plan. The Club could certainly still , and

controlled by the Club and with the

may still have to , pursue this avenue but

introducti on of a retractable roof and pit ch

our advice is that it would take years for an

the stadium could be transformed into a

eventual outcome to be made known and

futuristic indoor arena capable of staging

with little likelihood of success.

major Exhibitions and Conferences. Simply

THE EXISTING GOODISON FOOTPRINT OPTION

Soccer Ex event comi ng to Liverpool, not to

imagi ne World Championship Boxing or The To totally redevelop Goodison Park on the

mention the opportunity created by joining

existing 8-acre site in a phased manner. In

forces with entertainment giants SFX to

these circumstances planning issues would

bring the top names in music to our city. All

not be such a major obstacle . However

these additiona l features would not only

given the constraints of the site we would

benefit the Club but would attract much needed inward investment to our city and place the Everton Brand on the world stage.

WATERFRONT STA

• The Kings Dock is the largest available site in Liverpool City Centre. • The location has good access to Liverpool City Centre. • Very visual, highly prominent waterfront site.

• The Club has the ability to secure ownership as the site is owned by English Partnerships. • A site that seeks to provide a facility in accordance with Government I Regional Guidance. • Unlike Goodison, a site that should have Local Authority support.

• A site that would have substantial urban regeneration benefits. • A site that would have substantial economic benefit to the City of Liverpool. • A site that is within an area that has access to public funding, through ERDF.

~IUM,

KINGS DOCK

THEREFORE, THE BOARD SEEKS YOUR MANDATE TO DO THE FOLLOWING: Fully investigate the opportunity at the Kings Dock. Everton to join a Consortium, together with a first class Development Partner, and co-ordinate with English Partnerships, Liverpool Vision, Liverpool City Council and North West Development Agency. Wapp m9 Basin

OPTION TWO • This Option provides for redevelopment of the whole area bounded by Goodison Road, Gwladys Street and Walton Lane, and allows for a new Ground to be developed on a bigger footprint to that of Option One. • In th is case the newly rebu iIt Ground would provide a total capacity of 55,000, with a stadium which would retain many of the features associated with Goodison Park, as described in Option One. • There would be excellent views of the pitch from all parts of the new stadium, with safe, comfortable and convenient facilities for all spectators, including those supporters with d isabi Iities.

• The redevelopment would need to be phased, and could take between 3 to 4 years to complete, but the Club would continue to play all their home matches at Goodison Park. The capacity should not fall below 30,000 at anyone time, and would be greater than this for the major part of anyone season.

• Developing the larger site would aIlow for safer spectator movement around the Ground, and provide a more appropriate setting. It would also allow for additional commercial development to help the Club fund the redevelopment proposals. • The existing Gwladys Street Infants School could be relocated in a brand new school building on the old Eileen Craven School site, which would also have room for a significant number of new houses to be bu iIt as replacements.

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 4

Blues’ fans Yes to Kings move Nov 27 2000 By David Prentice, Liverpool Echo EVERTON fans have voted overwhelmingly to leave Goodison Park and move to Kings Dock. More than 86% of Blues say they want to move to a new stadium. From 17,410 votes cast, 15,049 were in favour of the Kings Dock proposal and 2,349 against. Twelve ballot papers were spoiled. The figures are greater than the last stadium vote in 1997, when 83.6% voted to move. Everton Chief Executive Michael Dunford said: "We are obviously delighted that the vast majority of our supporters share the board's vision, but we would emphasise this is only a partial step in the process. We haven't got removal vans coming into tomorrow. "There is still an awful lot of work to be done for us to turn this dream into a reality, but we are delighted the fans share our ambitions." Everton's next step is to put together a presentation for Kings Dock owners English Partnership. This will be done in January, after which the Blues will hear whether they or one of their five bidding rivals have been successful in acquiring the site. The Goodison For Ever-ton group, the chief rivals to a move away from Goodison Park, will make an official statement tomorrow. Ian Macdonald from the Everton Independent Supporters said: "It's great news. But just because we have voted positively doesn't mean to say we have secured that magical site. All the hard work starts now. "Bill Kenwright went to the fans and gave us his respect and asked to be given the mandate to proceed."

http://www.liverpoolecho.co.uk/everton-fc/everton-fc-news/2000/11/27/blues-fans-yes-to-kings-move-10025270474/

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 5

Kenwright calls for trust Dec 4 2001, icLiverpool BILL KENWRIGHT last night urged Evertonians to trust the Blues board in their fight to turn the Kings Dock dream into a reality. Speaking at the club's 122nd annual general meeting, Everton's deputy chairman revealed that while a final agreement on the £300million development has yet to be reached, he was confident the Blues would kick off the 2005-6 season in one of "the finest stadiums in the world". Everton currently hold preferred bidder status to redevelop the prestigious waterfront although calls were made at the AGM for more information about the project and its chances of succeeding. Chairman Sir Philip Carter explained the current due diligence procedure - expected to end next May placed all groups involved under strict confidentiality rules. However, Kenwright (pictured) and fellow Goodison director Paul Gregg showed they remain confident the stadium switch will take place. Mr Kenwright said: "There is still an if behind all of this, but when, and if we get this, it will be the finest stadium in the world. "It is a fantastic opportunity for Everton Football Club for one reason - that site needs Everton. Everton wants it and we will continue working every solitary hour so that one day, hopefully, we will all be sitting there at the Kings Dock. "Until then, just trust us. "The people on this board have brains and have worked relentlessly to get the most sensational deal ever." And Mr Gregg added: "It is amazing the opportunities that have come out of this project from where we where 12 months ago. From Everton's point of view, we've had fantastic support and it is a fantastic opportunity." Mr Gregg continued: "Leeds and Arsenal are looking at new stadiums and would kill for the position Everton have got. "I personally believe, from all the meetings I've been to, that we will have one of the best stadiums in Europe and one everyone will be envious of. "The ambition behind the project is amazing. I'm proud of where we've got so far and I'll be even more so when we kick the first ball there." Both Mr Kenwright and chairman Carter, who announced the longawaited Youth Academy will be addressed this financial year, were re-elected to the Goodison board at one of the most harmonious AGMs in recent years. Once again the majority of questions from the floor were directed at manager Walter Smith rather than the board, namely over the club's youth and scouting systems.

http://icliverpool.icnetwork.co.uk/0400evertonfc/0150kingsdock/tm_objectid=11461427%26method=full %26siteid=50061%26headline=kenwright-calls-for-trust-name_page.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 6

Everton revive stadium move BBC Sport, Wednesday, 18 December 2002

Everton could be set to revive their King's Dock move

Everton are close to raising the £30m required to finance their move from Goodison Park to a new 55,000-seater stadium at King's Dock. It was feared owner Bill Kenwright and the Everton board were struggling to find the money for their part of the £160m scheme on the banks of the River Mersey. A "reverse mortgage" scheme proposed by director Paul Gregg - which would mean Everton buying the stadium back from private investors over a number of years - did not meet with total boardroom approval. Everton given more time Everton have been given until the turn of the year by city regeneration company Liverpool Vision to put a financial package in place. And it appears Everton are poised to present an acceptable deal to secure 50% ownership of their new home. If Everton press on with the scheme, it will delight boss David Moyes, who considers a move away from Goodison Park to be crucial to his plans.

http://news.bbc.co.uk/sport1/hi/football/teams/e/everton/2586251.stm

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 7

Cash query catches Everton stadium plans offside 06.09.02 By Tim Danaher Property Week Plans for a new stadium for Everton Football Club on Liverpool's Kings Dock are in jeopardy because of the club's failure to come up with financial guarantees for its side of the project. The £300m project, which would create a mixed commercial and residential development alongside the stadium on the city's waterfront, is planned to be a 50:50 project between the public and private sectors. However, the public-sector backers – English Partnerships, the Northwest Development Agency and Liverpool Vision – are understood to be unhappy that no guarantees of either Everton's contribution to the project or the revenue likely to be generated by the non-arena elements of the scheme have been forthcoming. A senior source on the public-sector side said the consortium had yet to answer key financial questions which were asked three months ago, and without that information, the project could not go ahead. 'The ball is firmly in their court, and at the moment nothing is happening,' said the source. A key factor in the delays is thought to be the club's difficulty in raising its £30m contribution towards the scheme. It is understood that Everton director Paul Gregg has been asked to guarantee the necessary funds personally, but has yet to commit to doing so. Gregg is founder of global entertainment promoter Clear Channel, which was one of the original members of the consortium, but is now contracted to arrange events there. In a statement, the scheme's promoters claimed the plans were still on track and they hoped to submit a planning application late this year or in early 2003. Local developer Neptune Developments is believed to be in advanced talks with the consortium to develop the elements around the arena. The public-sector partners are not yet revisiting rival proposals submitted in the competition to develop the site. If the Everton plans fail they would probably have to restart the selection process from scratch.

http://www.propertyweek.com/story.asp?sectioncode=36&storycode=3021314

Everton FC's £30m stadium challenge, Aug 30 2002 By Bill Gleeson Business Editor, Daily Post

EVERTON Football Club's proposed new home at Kings Dock has hit major hurdles that will result in the project being put on hold and possibly even completely abandoned. Two problems affecting the funding of the waterfront stadium mean much of the work needed to submit a planning application has been halted. The revelations come in a report presented to the board of Liverpool Vision, the regeneration company in charge of revitalising Kings Dock. Liverpool Vision now believes it is unlikely a planning application for the stadium will be submitted until next year at the earliest. Originally the application was to be submitted last April. The first problem has arisen because Everton cannot raise the money needed to meet its share of the construction costs. Another report compiled last year by accountancy firm KPMG for Liverpool Vision concluded that Everton does not have £30m to invest in the new arena. Since Everton has been unable to raise its £30m stake, Liverpool Vision has asked Paul Gregg, the wealthy entrepreneur who coowns the club, to use his personal fortune to guarantee the £30m. However Mr Gregg, who is worth around £120m, said yesterday he was unhappy with the proposal as it presently stands. He said: "There is an ongoing discussion about that. Every effort will be made to support the club and its ambition to build the stadium. "But nobody in their right mind is going to turn around and say I'm going to write a cheque out for £30m. "The funding for the scheme will be found. How that will happen is not finally resolved, but we will make sure Everton will cover its contribution to the scheme. "I am personally not going to write out a guarantee for £30m on the terms and conditions proposed by Liverpool Vision and nobody other than somebody in the lunatic asylum would do that. http://icliverpool.icnetwork.co.uk/0400evertonfc/0150kingsdock/tm_headline=everton-fc-s---xa3-30mstadium-challenge%26method=full%26objectid=12157700%26page=1%26siteid=50061-name_page.html

"The answer is we are working on resolving this dispute with Liverpool Vision." A second funding snag has arisen because it had been envisaged that the £155m construction cost of the arena would be subsidised from part of the profits made from building 1,000 homes on the bit of the Kings Dock site not being used by Everton. This cross-subsidy was meant to be guaranteed by the project's construction firm, Bovis Lend Lease. However Bovis has now said it is not prepared to give such a guarantee. Following Bovis's refusal to guarantee the subsidy, Liverpool-based Neptune Developments has been asked to step in. But Neptune has yet to sign an agreement binding it to delivering the subsidy amounting to £32m. Neptune's managing director, Peter Hynd, said yesterday that this was dependent on his finding housebuilders who are prepared to help fund the total development cost of the residential side of Kings Dock. He is in talks with Wimpey City Homes, Countryside Properties and a private London property developer. Mr Hynd discounted worries that his company does not have the financial capacity to raise the money needed. He said: "We may not have an asset value of £32m, but we can certainly raise the money. That's why we have chosen to approach large companies with strong balance sheets. "In principle we hope to have done a deal with the other developers within a fortnight. It is all going very well at the moment." Neptune developed Liverpool's Queen Square in the mid-90s and more recently developed Speke's awardwinning Marriott hotel. Jim Gill, chief executive of Liverpool Vision, said: "There are a number of conditions that must be met before the project can progress. "Those talks are ongoing, but in the meantime the feasibility work has been put on hold at the moment. It will be early in the new year before we make a planning application in my current assessment."

http://icliverpool.icnetwork.co.uk/0400evertonfc/0150kingsdock/tm_headline=everton-fc-s---xa3-30mstadium-challenge%26method=full%26objectid=12157700%26page=1%26siteid=50061-name_page.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 8

The deal that got away - by two hours Oct 5 2001 Liverpool Echo THE COLLAPSE of an Everton " media deal" two hours before contracts were to be signed set the club's financial recovery plans back by years. Bill Kenwright and his team spent over four months last year negotiating with American internet company NTL on the deal. They were following in the footsteps of ten other English clubs, including Liverpool, who signed media deals between September 1999 and September 2000. Between them the ten clubs shared a cash injection of over £235m. Everton's proposed deal with NTL was as complex as it was colossal. The contract looked like a telephone directory. It would have instantly wiped out the club's debts, bringing its long term plans forward by several years. That summer Everton went into the red on transfers. The controversial sale of Nick Barmby to Liverpool was the major factor in over £13m worth of outgoing sales, but Kenwright was so confident of the NTL deal going through that he authorised spending of around £19m. The Duncan Ferguson deal was basically one purchase too many, though it is hard to imagine any Evertonian in Kenwright's position who would have done things any differently at the time. Then, in October 2000, NTL appeared to cool on football. The company pulled out of a major pay per view deal with the Premier League and then, two hours before the contract was due to be signed, they backed out of the Everton deal. Suddenly the overdraft that should have been obliterated was up to £25m, edging up to £26.5m with interest, and the bank manager was not happy. T h e p r o g r e s s made since in easing that figure down to below £20m is a testimony to the careful housekeeping that has become the watchword of the current administration. The big prize behind the big money media deals was rights to the internet, with corporations positioning themselves for the day when we will be able to watch matches on the screens on our mobile phones. The collapse of the dot.com industry rocked confidence in the whole sector, but the good news for Everton is that it now retains those rights. The club may have missed out forever on its chance to cash in on a technological dream that never becomes reality. But it is more likely that, in one form or another, this kind of technology will come back to the forefront. Everton could then cash in with a deal immeasurably better than those already signed and sealed by other clubs.

http://www.liverpoolecho.co.uk/everton-fc/everton-fc-news/2001/10/05/the-deal-that-got-away-by-twohours-100252-11347787/

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 9

Smith to stay at Everton By Charles Carrick Last Updated: 10:56PM GMT 13 Nov 2000 EVERTON manager Walter Smith has rubbished claims that he is about to leave the struggling Premisership side. Reports at the weekend suggested that the former Rangers manager could soon resign if he has to sell some of his most talented players because of the supposed breakdown of talks with media group NTL over a 9.9 per cent share sale and £26million cash injection into the club. But Smith said yesterday: "I find it incredible that there are suggestions I'm going to quit, it's staggering. There is absolutely no foundation in the claims and I am as committed to the job as I have ever been. "I couldn't make out if the claims were that I was being sacked or I was resigning. I can only obviously comment on one of those that said I was resigning. I'm certainly not and as far as I am concerned that is where it starts and finishes. "Anybody can look at any football club and try and pick out a problem but our job here is to get on and try and make Everton as successful as we possibly can." Only last Christmas, Smith signed a two-year extension to his contract which will keep him at Goodison Park until 2003, following the successful takeover of the club by vice chairman Bill Kenwright. The speculation over Smith's future was the last thing Kenwright wanted in a critical few days when he will be attempting to re-negotiate the terms of the deal with NTL, as well as overseeing a fans' vote on a proposed move from Goodison to a 50,000-plus all-seater stadium complex at Kings Dock overlooking the River Mersey. Supporters will be balloted at Saturday's home match with Arsenal. The new stadium will also include cinemas, hotels, restaurants and apartments and be built in conjunction with SFX, a major player in the entertainment industry, whose European chairman is Everton director Paul Gregg. Everton's shareholders association have urged fans to back the plans.

http://www.telegraph.co.uk/sport/football/leagues/premierleague/2992919/Smith-to-stay-at-Everton.html

A most untimely on-field crisis Jan 3 2002 By Mark Thomas, Liverpool Echo CLEAR VISION: But plans may be affected EVERTON'S on field crisis could not have come at a worse time for the money men working on securing the club's long term future. The King's Dock arena plan would give the club a 49% share in an asset worth, conservatively, £300m. But the final deal has yet to be signed, and is unlikely to be clinched much before the end of this season. The club could try to take out an expensive unsecured loan now to provide the urgently needed injection of cash to buy players, and then secure it at a more favourable rate of interest when the King's Dock deal is done. But owner Bill Kenwright has been down that road before, spending millions on new players in the expectation that an NTL media deal worth over £30m would go ahead. When NTL backed out on the day they were due to sign, Everton was left with an overdraft that could have sunk the club. If Kenwright tried to make a substantial loan now, with the intention of securing it against the King's Dock, he would be gambling everything. While all the signs are that the King's Dock project will go ahead, if it was to fail the club could this time be left with a debt on a scale that it could not survive. Everton's share in the 55,000 seat arena and its surrounding housing, retail, and leisure facilities would dwarf the current debts of around £20m. Ironically, this boost should at last attract major investors who will want to buy into the club and maybe even seek to take it over from cash-strapped Evertonian Kenwright. But Walter Smith is walking an increasingly wobbly tightrope towards another season of Premiership safety with his injury ravaged and over-aged squad. It would be cruel on this canniest of Scottish budgetkeepers if the financial lifeline was thrown too late to save his job. And crueller still for all Evertonians if the club finally slumped into the First Division just when rescue from the financial quicksand was at hand.

http://www.liverpoolecho.co.uk/everton-fc/everton-fc-news/2002/01/03/a-mostuntimely-on-field-crisis-100252-11512412/

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 10

Everton bid for more time

Thursday, 5 December, 2002, 12:46 GMT

Everton fans hope to set up home at King's Dock

By Phil McNulty BBC Sport Online chief football writer Everton are poised to be given extra time to raise the £30m they need to set up a move to a new 55,000-seater stadium on the River Mersey waterfront. It had been suggested that Everton's bid to leave Goodison Park for the new King's Dock development would end on Friday, after they had failed to convince city regeneration company Liverpool Vision they had the finance in place. Liverpool Vision wanted Everton owner Bill Kenwright and his board to prove We are 100% they could finance their share of the project before the weekend. behind the Kings But BBC Sport Online understands Everton could now be given another four weeks to put together a package - and Kenwright is still privately convinced he can pull off the move. He is not expected to have the deal in place by Friday, but the fact that the campaign to quit Goodison Park is going into extra time suggests Everton may still pull off a deal.

Dock project

Everton deputy chairman Bill Kenwright

Everton director Paul Gregg has already put a £30m 'reverse mortgage' package before the club's board. This would mean they would buy the stadium back from private investors over a number of years. But it is understood the Everton board's preferred option is now a move away from the "reverse mortgage", with Kenwright moving to secure funding. A meeting of Everton's board before the Worthington Cup tie at Chelsea confirmed significant progress had been made by Kenwright in his attempt to broker a new financial deal. He is believed to be putting together a package that would not involve Everton giving up its 50% equity share in the stadium.

http://news.bbc.co.uk/sport1/hi/football/teams/e/everton/2546309.stm

He is publicly committed to the move and boss David Moyes has insisted the ground switch is essential to the club's future success. And the extra time which is expected to be given to Everton by Liverpool Vision is a clear indication that Kenwright's dream is still alive. Kenwright is determined to explore all options to secure the move after leading Everton's campaign to leave Goodison Park and move to a new state-of-the-art stadium. Only last week he confirmed that the club were determined to build the new Moyes is leading stadium. Everton into new era Kenwright told the club's official website: "We continue to be very positive and we are 100% behind the King's Dock project."

http://news.bbc.co.uk/sport1/hi/football/teams/e/everton/2546309.stm

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 11

Gregg must step out of the shadows Len Capeling, Daily Post, Sep 4 2002 RUMOURS that Paul Gregg wants a greater say in the running of Everton could be good news for a club that, Bill Kenwright apart, lacks a powerful voice. As a businessman, Paul Gregg is a heavyweight. He turned soppy Southport into a mecca for international stars of the calibre of Marlene Dietrich, Oscar Peterson and Jack Jones and built up a theatre empire that earned him £160m when his SFX group was taken over.

FADING VISION: The Kings Dock venture hinges on a £30m capital injection

For all that, his role at Everton has never been defined. Simply a director - among many others - he remains a shadowy figure at Goodison, pulling some strings but rarely making pronouncements on team matters. Which is a pity, because, with his kind of cash and influence, Everton might just become a force once again. Critics of Gregg - even within the club - claim he's little more than an absentee landlord, whose interest extends only as far as a hi-tech, high-profile, showbiz venue at the Kings Dock, to which stars like Barbra Streisand, Michael Jackson and Madonna might be lured. Yet the Daily Post exclusive on Gregg's bid for greater control appears to give lie to that accusation. Becoming chairman of Everton Football Club would make him responsible for the well-being of the soccer side, as well as the acoustics and comforts at the new arena. Claims that Gregg (pictured left with Bill Kenwright) wants to become chief executive are wide of the mark if only because that would involve the multimillionaire in the messy day-to-day running of the business. In any case, Everton already have a chief executive in Michael Dunford whose honesty and endeavour during recent difficult times has been exemplary. No, Paul Gregg would make a very good chairman. His background shows that he has a natural feel for public relations and he would bring much-needed focus to a fragmented operation. Greater involvement with the footballing side might also convince him that finding a bit more cash for David Moyes would be an investment worth making. As for the new stadium, without Gregg's massive financial clout, the move is likely to be a non-starter. Which is why giving him the chair-manship makes sense, whichever way you look at it.

http://icliverpool.icnetwork.co.uk/0400evertonfc/0150kingsdock/tm_objectid=12170999&method=full&siteid=50061&headlin e=gregg-must-step-out-of--the-shadows-name_page.html

Everton Kings Dock bombshell, Oct 25 2002 Exclusive By Bill Gleeson, Daily Post A RIFT between the two most powerful men in Everton's boardroom is set to cause the imminent collapse of the club's Kings Dock stadium dream. The club's co-owners, Bill Kenwright and Paul Gregg (left), are at loggerheads about how to finance the construction of the planned 55,000 seat football stadium and entertainments arena on the Liverpool waterfront. Mr Gregg, who made £150m from the sale of his theatre business three years ago, has decided to look for other wealthy investors to replace Everton as part-owners of the £155m project. His proposal to introduce new investors follows Everton's failure to raise its £30m share of the building costs. As well as wealthy individuals, Mr Gregg may also approach venture capital firms. Under Mr Gregg's proposals, Everton would not own their own ground. Instead, the club would simply pay rent as a tenant. But the multi-millionaire is under pressure to finalise his plans quickly as Everton intend to make a final decision on Kings Dock within the next three weeks. Everton's deputy chairman, theatre impressario Bill Ken-wright, is strongly against the proposals because they could leave the club homeless in future years. A source at the club said: "There is no way Bill Kenwright would accept these terms. He has always made it quite clear to the fans that Everton would have at least a 50pc stake in their new ground. "There is no mandate from the fans to give up Goodison Park to become a tenant. "He and pretty much everyone else on the board would prefer to stay at Goodison Park or find somewhere else to move to." Two months ago Mr Gregg was asked by Liverpool Vision, the body overseeing the regeneration of Kings Dock, to guarantee the club's stake in the stadium. Mr Gregg now appears reluctant to do this and instead wants to take a direct investment himself. The rift now threatens the whole scheme. Without Mr Gregg's involvement, Everton's board would need to find new investors to raise the money to pay for the club's stake. It is understood that Mr Kenwright has begun the search for new partners. One possibility is Lord Grantchester, who used to be a member of Everton's board. As a member of the Moores family, Lord Grantchester is in line for a multi-million pound windfall following the recent agreement to sell stores group Littlewoods for £750m. Doubts had already begun to emerge about the £155m scheme on Wednesday when Mr Gregg pulled out of a public debate on the stadium plans organised by the Merseyside Civic Society. And the club has still not submitted a planning application for the stadium to Liverpool City Council. Last night, a spokesman for Everton would only say: "Negotiations with all parties still continue and we intend to submit a planning application before the end of the year." http://icliverpool.icnetwork.co.uk/0400evertonfc/0100news/tm_headline=everton-kings-dockbombshell%26method=full%26objectid=12311350%26page=1%26siteid=50061-name_page.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 12

Blues shares plan backed , Jan 14 2004 Report By Andy Hunter, Daily Post EVERTON have been urged to create a financial windfall for David Moyes through a share rights issue - by prominent members of their own Shareholders Association. Bill Kenwright, (right), is exploring various ways of raising transfer funds for the Blues manager, who has no money to spend during the January window. Now leading shareholders have called on the Blues' deputy chairman to sanction a shares issue that, if successful, could raise £15million. Steve Allinson, vice-chairman of the ESA, wants 15,000 new shares created at £1,000 a piece. The proposal is due to be discussed at a board meeting later this month and is similar to the one employed by Celtic under former owner Fergus McCann, who raised £9.4m and ploughed it into transforming the Scottish giant's stadium ten years ago. But whether the Blues board would agree to a proposal that dilutes their control of the club remains to be seen. True Blue (Holdings) Limited - which consists of directors Kenwright, Paul Gregg, John Woods and Arthur Abercromby - would have their majority stake reduced from more than 70 per cent to just over 50 per cent under Allinson's scheme. And Everton, who have rejected calls for share rights issues in the past, have held talks with the financial advisor used by Celtic in 1994 over an alternative share plan of their own. Allinson said: "Everton fans are a huge family and the sooner we give all fans the opportunity to demonstrate their support through ownership, the less the burden will rest solely on our magnificently faithful attendance." And Michael Owen, a member of the ESA's executive committee, added: "If the club's board of directors cannot or will not pump new money into the club then it's only logical and reasonable to give Everton's supporters the opportunity to do so."

http://icliverpool.icnetwork.co.uk/0400evertonfc/0100news/tm_objectid=13815455%26method=full%26si teid=50061-name_page.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 13

The Everton Football Club Company Limited

Extraordinary General Meeting Thursday, September 9, 2004 The following is a transcript of the EGM. Purely for the record I would like to make it clear that no attempt has been made to “tidy” up what was said at the meeting. What you’ll read is exactly what was said on the night. Bill Kenwright, opening comment: “I think its worth reminding ourselves of what I hope we all have in common before moving on to discuss the issues that I know will be more controversial and cause greater differences of opinion. The one thing we’ve got in common, more than anything else, is that we love the bones of this football club. Of the hundreds of thousands of fans all over the world – and I meet them everywhere – on the streets of New York, on the streets of Australia, on the streets of Brixton. Someone’s always coming up to me and saying, “Hello Blue, how are you? How’s the team?” But tonight we’ve got gathered together some of the most passionate Blues. That’s why you own shares, I own shares, and we own shares. Not for profit or involvement. So, it might amaze you to know this but I welcome tonight’s meeting because I know the sole reason it has been called is to improve Everton Football Club. Finally, because Everton is a passion for us I expect passion tonight but I’d like to thank Steve Allinson for saying “let’s do it in the Everton way – let’s keep things as calm and controlled as possible.” The Extraordinary Meeting tonight has been called to allow us to consider a number of motions put forward from the Shareholders.” Steve Allinson: “The shareholders of the Company express their deep concern at the current state of affairs in the Company – in particular the failure of the Board to realise the resources to ensure that a club, which is one of the five most successful (in terms of trophies and other achievements) and one of the half dozen best supported (in terms of average gates and wider support) in England, can compete at the highest level and match the achievements of previous generations. The shareholders therefore call upon the Board to provide a full account of the past expenditure and revenue issues, which have led to the current situation in which (a) the manager is alleged to say that we cannot compete for salaries with the likes of Bolton Wanderers (b) it is alleged that the Company cannot have any significant funds for signing players (c) the stadium no longer lives up to its history as a world class venue or the ambitions of its supporters. Present to the EGM a strategic plan and related, achievable short, medium, and long term policies that will restore the Company’s finances and provide resources for team building, stadium development, and other related issues. It (ESA) calls on all those in leadership positions at the Company, notably each individual Director, to commit themselves to use all means at their disposal to deliver these plans and related changes. Demands that the members of True Blue (Holdings) Limited clarify the nature of their relationship with the Company – in particular the extent to which proper checks and balances have been set up to ensure that the interests of Everton FC are protected and conflicts of interest between the Company’s interests and those of “True Blue” and its members avoided. “Failing that it calls on the current board to stand aside for a new Board and related appointments able to win the full support of the total membership of the Company and the wider support base”. [NOTE: The motion calls for the current board to step aside IF and ONLY IF they have not addressed the previous motion items to the satisfaction of the members.] Bill Kenwright: “Let’s begin with Motion One: The shareholders of the Company express their deep concern at the current state of affairs in the Company – in particular the failure of the Board to realise the resources to ensure that a club, which is one of the five most successful (in terms of trophies and other achievements) and one of the half dozen best supported (in terms of average gates and wider support) in England, can compete at the highest level and match the achievements of previous generations. I don’t argue with that at all. I totally agree with it. The directors of Everton Football Club have also been deeply concerned with the current state of affairs and have been working 24 hours a day to make the club successful again.

We obviously haven't succeeded – we’re not fools, we know that too - but it certainly hasn't been for the want of trying. So maybe, if we can, we can go to a reminder of where we came from at the start. Most of us all here will remember season 1997/1998 when we survived on the last day of the season against Coventry City. The owner of the Club, Peter Johnson, accepted the squad needed strengthening and the new manager spent nearly £20m after that, in preparation for the following season. Dacourt, Collins, Materazzi, Unsworth, Simonsen, Bakayoko came into the Club with monies that were raised through borrowing. Again, remember at the time, this was the 90’s when transfers and transfer wages were at frenzy. Boards around the country were spending loads of money with a choice of protect or getting relegated or staying in the Premier League and performing. A bad start to the season resulted in the sale of Duncan Ferguson to service borrowing. Peter decided to sell his stake, initially asking for over £70m for it but eventually lowering the price once it was clear there was no queue of potential investors. I’m sure you’ll remember there was a limbo period of around eighteen months when the price slowly did come down. Obviously as an individual I didn’t have anything like the money that was necessary but I was desperate to re-establish a sense of unity and togetherness back at the Club and this is why tonight is so ironic for me. There weren’t many people around who were willing to invest. I trudged up and down every street possible and I couldn’t really find the required investment. It’s also worth remembering that the season Peter Johnson left, the Club had a turnover of £25m and a wage bill of £20m – 80% of the turnover. Not surprisingly the Club was losing money even before player trading. Including this, the loss was £11m. Eventually a number of friends, two of whom are sitting at this podium tonight, came along and came up with the money to buy the Club. We bought the 71.8% holding for £22m but if you remember we had to find £30m because total share issue was necessary. Frankly, whether we called the investment vehicle True Blue Holdings or Up Yer Holdings or Down Yer Holdings or anything else – it was irrelevant. All it was therefore was a vehicle to buy a controlling stake in the Club. A stake that no one else wanted or certainly was trying to buy at the time. We bought a Club heavily in debt, a stadium that was looking tired and a team that was struggling to get together. But we bought it for one reason – to quote the motion – because we were deeply concerned of the state of the Club and the lack of a caring owner. First big mistake – we should’ve had £42m not £22m. We bought and the money went into someone’s pocket. It didn’t go into the Club so we had no safety valve, we had no cushion. As you know, a cushion was sought and it was NTL at the time. Every major football club was trying to do media deals with the cable companies. We were close to doing a media deal with NTL when NTL went bust, out of business in that particular area of its activities. It was literally on the day that we were accepting a cheque for over £30m. Literally on the day. That was the very final major deal, not to be completed in this case, but after that there was no other major deal so we were in the ……whatever. When we bought the Club – and you must know me well enough to know that to say this is horrible – but we were sadly no longer a top five club in terms of revenue. Clubs like Leeds, Villa and Sunderland were all enjoying revenue streams in excess of Everton. We were the tenth biggest club in the country in terms of turnover and had nearly half the revenue of the top five. The most pressing issue was that we needed to raise further monies to strengthen the squad – again, to ensure Premier League survival. In addition to this, finance needed to be raised, to pay for the move to a new stadium. So, to finish on motion one, I can only repeat that all the directors have been deeply concerned by the state of Everton. This one hasn’t slept for nine months. However, whereas the majority of people would never have been foolish enough to put their own money into the Club, the people on this stage did. And we did it at a real real cost. So can we then move onto motion two…. A call to provide a full account of the past expenditure and revenue issues which lead us to were we are now. “The strategy of the Board over the last four years – and I have to say it’s been pushed by me – has been to do everything in our power to ensure that the manager has been given every penny of spare cash available in order to strengthen the squad. There’s a particular manager sitting here whom I think has not been given enough to strengthen the squad – but we’ll get to that later. We believe that by pursuing success on the pitch that we can attract the much needed investment that will allow us to invest in infrastructure: stadium, academy, world class training facilities. The wages bill, as we’ve worked to, are way below many of the other Premier League clubs. They’re not terrible but they’re way way way below many Premier League clubs. A lot of people talk to me about Charlton, Birmingham, it used to be Ipswich, the clubs that have come up from lower divisions have asked how can these (clubs) suddenly go out and splash out on big signings. Well, the truth is they came up with no baggage. They came up with £7m, £8m or £9m wage bills and suddenly they were in fantasy time, in the Premier League, and had money to spend. We didn’t. We’ve had baggage for years and years and years. Before player trading we show £1m profit on operations throughout the last four years. But as we all know, this cannot be judged without bringing an analysis of player trading into it. So we’ve done well on the trading – we’ve broken even which is all really we can do with a stadium of this size, and the income we generate here. The income is not enough and we’ll get to that later but I believe we’ve done well to keep the trading profit. In terms of player trading, since we took over, the Club has spent £47.8m since March 2000. On the other side of the equation, we’ve received just over £33m in player sales, a nett deficit of £14m. Two of the ‘spends’ which don’t receive much attention in the press, but carry a heavy cost, are agents fees and the 5% Premiership levy on every transfer. This amounted to a further cost of £6.6m. So in the four years since taking over we felt it necessary to invest the nett spend of nearly £21m in the playing staff. Why did we do it? Simple, we were committed to providing the manager with the funding he required to produce results on the pitch. If we hadn’t purchased at this level the one thing we know for certain is that we’d be in even bigger trouble than we are today. So, in summary, what I’m saying is that we have worked hard to ensure that the wages bill is increased in order to remain competitive. We have tried to make every spare penny available, to the manager to strengthen the game. And I can tell you with this manager – spare penny means just that. He is….worse than anyone in this room about protecting Everton’s money. He is quite extraordinary about how he will not put the Club into debt. Every single solitary transfer, we sit down, we talk it through together, and he does what he feels is best for the Club – as I’ve said many many times I’m eternally grateful. But, in truth………there’s not enough money. What we’ve had to do, all of

this, without any new capital injection. As you know, within eighteen months of buying the Club, our failing with NTL…..we were going cap in hand to the bank far too much so we took out a securitisation of £30m, which a lot of clubs were doing at the moment. That £30m was soon swallowed up with the incoming David Moyes, the outgoing Walter and Archie, the signings of Carsley, Linderoth, Ginola. We had an £8m or £9m residue. Since then, we have lost, ie. the nett on transfers has been something like another £14m or £15m. I know that one of the shareholders spoke at a recent forum and asked that we used the word donation rather than investment because the difference is you expect to make money in one versus the other. I guess that’s why it’s been so hard to attract donations or investments because we’ve not been able to achieve the success on the pitch and we’re a middle turnover club that uses income, simply, to stay competitive in the Premier League. I hate that. He (Moyes) hates that. He (Gregg) hates that. We all hate that. But….the last four years has been day after day after day to try to get money. I’ve found it as difficult as anyone to accept that we do not have the financial muscle as we did in the 60s. But the fact is that since taking control of the club five years ago we had to try to satisfy the demands of the fans to spend money and attract players – and having no capital injection. I promise you no one has worked harder than the people around this table. And please, don’t be naïve enough to think that other people could’ve been more successful. It couldn’t have happened. We made mistakes. Of course we have. But not in a will to go out there and try to get the money that’s necessary. Trevor Brooking said on television quite recently, “I believe Bill Kenwright and his Gang are the very last of the breed of chairmen who put their own money into football clubs.” I don’t believe that will ever happen again. Second part of the motion is to present a strategic plan and relate it achievable short, medium and long term policies that will restore the Company’s finances and provide resources for team building, stadium development and other related issues. I’ll try and be simple: our strategy since taking the club on has been to focus all resources on the playing staff. I should also admit that my roll throughout this period, even before becoming chairman, has been to personally assist the manager in making things happen. There is no doubt whatsoever that we made mistakes. There is no doubt whatsoever that we have to learn from those mistakes. This year, I believe, will be a watershed for the Club. This year was always going to be a hard year. The bank knew it was going to be a hard year. I knew it was going to be a hard year. We had losses last season. We have the end of several major contracts this year and we knew that if we got through this year then hopefully things would get better, for the future. It’s been hard for all of us to admit we’ve fallen way behind the big five clubs in England, in terms of resources. However, it’s been great to accept there’s one area where we’ve not fallen away and that’s in the fans. What’s clear going forward is that if we are to compete then we have to drive the revenue line forward rapidly. Our income is far far far under what it should be, what it has to be, what it’s got to be. In short, we have to come to accept that performance off the pitch is the only sustainable way to drive performance on the pitch and by that I mean the performances of the directors in knocking even more doors down – taking even more blondes out to supper – in doing whatever is necessary in getting money into this Club. Plus our staff who have worked tirelessly this summer, trying to get their revenue streams up. The whole of football has learned, I’m sure you’ll agree from the Leeds experience. And the first job of any director is that we balance the books sensibly, to change in strategy, not to the detriment of the squad but to maximise the squad. We live in a world, as you know, where we get £500,000 a position, so top and bottom there’s a lot of difference. Where, if you’re one of the big clubs, you get a lot of money for television. Where, if you’re in Europe, if you’re in the Champions League….Arsenal, Man U….budget £25m - £30m more than we do. How doe we get there? We get there with sustainable growth. How do we get sustainable growth? By getting more money into the club. That’s what we’re about. We’re currently unable to pay the salaries that Newcastle, Arsenal, Chelsea, Liverpool and Manchester United pay. Our desire is to build a sustainable business that will eventually give us the revenue to do this. We recognise, for the present, that Goodison is the home of Everton Football Club and we will be embarking on a series of initiatives to develop the overall facilities and improve the quality of a visit to Everton Football Club. However, we also recognise that the longer term future of Everton Football Club has to involve a modern stadium which will become the business driver for a top class team. I was on record, some time ago, saying we’ll never be a tenant of Liverpool. I absolutely stick to that. However, having seen the financial projections and the reality of a shared stadium, it has to be taken into consideration. I can’t make any promises tonight about what will happen because nothing has been decided. I can promise that we will keep an open mind, focus on the commercial realities and work hard to bring this project meaning a better home, not necessarily a shared stadium, to life. That’s a promise. And equally, a critical strategic objective is to develop a leading academy in a reasonable time. This is central to our vision. Even in the present structure, we play at Netherton, we’ve achieved much to be proud of - seventeen players from the Academy to the first team in seven years. Ray Hall and I spoke every day this week and he tells me we’ve got a terrific crop of kids. The plan is, in fact, to have two academies now, as Manchester United do, as Arsenal do. Maybe have an academy for 6 to 12 year olds and maybe another academy for teenagers. Get them young. Our third strategy is developing the Everton brand, known as The People’s Club. I’ve often said you don’t need a good manager, you need a lucky manager – twenty seven seconds in David Unsworth….but you also need a brilliant manager and when I phoned David Moyes and said, ‘the good news is you’re the new manager of Everton Football Club’. We were at the Haydock Thistle Hotel – me and the Preston people, and Paul. David had said, as he would, ‘unless there’s a deal done with Preston I cannot manage you’. We did the deal so the good news is you’re the new manager of Everton. It was ten to seven. The bad news is at a quarter to eight you’ve got a press conference at Everton. He jumped in his car, he drove to Goodison, he walked passed me, he shook my hands, sat down and first thing I heard him say – first sentence was, you know, driving here, being thinking about this and I know Liverpool is a great massive wonderful club but I believe Everton is The People’s Club. Any Evertonian, who didn’t get a shiver down their spine when we heard that, didn’t recognise that we’d found the man……..I’m sure they don’t exist. So….The People’s Club – The People’s Club has to communicate with its supporters. There has to be an end to this kind of EGM. Other EGM’s…..smashing……but an EGM where you say, ‘hey guys, you’re crap, you’re doing it badly, we want you out’. If we’re to stay in, if we’re to run this Club there has to be better communication. The Board welcomes the initiative of the Shareholders. We welcome the formation of the Everton Council – a body which contains a broad representation

of the supporters as well as many shareholders and this will be a way to focus energy positively. We have come up with something, which I hope you will approve of, which will be lunches before (maybe for the Shareholders) three Board meetings a year so we can discuss your problems. Maybe afterwards, so you can tell us what you think of them. And also for the Everton Council. Share Issues…….a share issue has been mooted for the last two AGM’s. As you know, at the moment, we are discussing investment with a group – part of the contract states that the new investment group will welcome a share issue for the fans so we intend to talk to two bodies about that, one the shareholders and another body. At the same time, whilst embracing The People’s Club, and embracing communication, I do plead with you to understand that football is a very very tight business and confidentiality has to be kept. Everything in football is sent out to grapevines here there and everywhere. I often think if Ford sold rumours in Liverpool rather than cars we’d all be millionaires. So, there are certain things we can’t tell you. Certain things that you will have to read of. Hopefully, in the papers afterwards. It’s a cut throat business but we’re trying to keep those to a minimum.” A call those in leadership positions at the Company, notably each individual Director, to commit themselves to use all means at their disposal to deliver these plans and related changes. “Of course we commit ourselves and of course we recognise our duty to appoint and inspire an executive management team. I don’t know what committing oneself means actually. If it means, do you get paid? No. To take expenses? No. Do you watch every game? Yes. Do you put your hand in the till? Never. Would you ever do anything to harm your football club? No. Would you do anything to celebrate your football club? Yes. Are you always there for your football club? Yes. So, that is a straightforward commitment. We also acknowledge that there has to be significant change around here in executive management. We thought long and hard about introducing the new Chief Executive tonight because he was finally brought on board yesterday and a couple of people said, ‘well it will look like its staged if we bring it to other people.’ That’s what you want isn’t it? Because you want to show the shareholders the chief executive before you show anyone else. He’s not even been introduced to the staff or to the press or to anyone but I’m pleased to be able to introduce our new Chief Executive, to the shareholders tonight. He’s had several extraordinary years of success at Aberdeen, where on several occasions he won the Chief Executive of the Year award and got the real anger of the real anger of the Celtic and Rangers fraternity for his outspoken comments.” [NOTE: New CEO, Keith Wyness is formally introduced. Unfortunately, no recording was made of Mr. Wyness’ speech] Demands that the members of True Blue (Holdings) Limited clarify the nature of their relationship with the Company – in particular the extent to which proper checks and balances have been set up to ensure that the interests of Everton FC are protected and conflicts of interest between the Company’s interests and those of “True Blue” and its members avoided. “As I said before, True Blue Holdings was only ever a vehicle through which we were able to purchase Peter Johnson’s 71% shares and I confirm, as I mentioned earlier, because this obviously preoccupies the minds of a number of shareholders that we will be dissolving True Blue Holdings as soon as is practical – hopefully by the AGM.” “Failing that calls on the current board to stand aside for a new Board and related appointments able to win the full support of the total membership of the Company and the wider support base”. Well – I haven’t been able to satisfy you now. I hope for the rest of the evening will be able to satisfy all the concerns of everyone present tonight and convince shareholders that we have only one goal – the re-establishment of this club that we love as a contender. I would say to you that if you had a Jack Walker, if you had a Jack Hayward, if you had a Roman Abramovich………..if you had one of those, you should go for it. I don’t think you have, I don’t think they’re around, I wish they were – but I think you’ve got a very very very good, very committed Board here. My personal desire is to support, I believe, the best manager in the country to continue in progress that he has started this season, with a very very small squad. He has suddenly made them, and made us, feel proud of the boys in Blue again. And that’s no mean achievement. And I think…..I’m here to support him, we’re all here to support him. Everyone here is here to support him. And that’s what matters at the end of the day – David Moyes and his squad. We have to build that squad in January. We have to build that squad in the summer. We have to build that squad again in the next summer. Any investor who wants to come along and put even more money into the club – we will take more money into the club. But please don’t doubt just how seriously we are trying. How seriously I / we take your views. But you must also accept that I, and the Board, am very determined to finish the job that we started four years ago. I can promise you on my honour that resignation over the last ten weeks has seemed a wonderful wonderful way out. It didn’t happen because I believe in this club. And I believe in the people in this room. And I believe in the supporters. And I believe that we will make it. And we will get back there. I personally apologise for the fact that we haven’t, in the four years that we’ve been at it. We’ve had some good years – one good year, absolutely thanks to David Moyes and what you brought. The wonderful moment, for me, is when people came up to me as I stood outside and grabbed me and said, ‘he’s given us attacking football again. We want to go out there and attack and we smiled again.’ That’s what I want to bring back. That’s what we all want to bring back but it’s painful, difficult, and thankless – but it’s a privilege. So, to summarise, we were nearly relegated in 1994. We were nearly relegated in 1998. Our finances

have been stretched, not over the last four years, but over the last fifteen or sixteen years. We took on the challenge because we believed we could make the club great again. We have not made the club great again. We will continue and continue and continue to try and make the club great again and we will make the club great again with your help. I thank you for calling this EGM. I’m sorry for the reasons you think you had to call it but I applaud you all for coming. Thank you.” Prof. Tom Cannon: “I can’t be controlled when I talk about Everton. I can’t be calm when I talk about Everton. I can’t be calm or controlled, anymore, when I watch some of the performances and I read a lot of the newspaper coverage of Everton Football Club. I remember……I’m older than I look….and I was talking a minute ago, before this meeting started, about what it used to be like, as an Evertonian. The swagger, we had when we went to Blackburn, Bolton, and Newcastle while they were in the top division – which was pretty rare in those days – and Manchester a lot of the time. Where’s that swagger gone? I want that swagger back Bill. I am not interested in comparisons with Charlton Athletic or Birmingham City. That’s not who I compare Everton Football Club with, on any level. And please Bill, probably for the first time that I can remember at an EGM, or an AGM, that a chairman has admitted mistakes. Has admitted failure because last four years have been failure. In our terms and pretty well in any terms. I think its fair to compare with the year before you took over – but let’s be honest Bill, the end of last season was the worst points total in our history, and it is not enough. And thank you for dealing with a lot of the issues which were implicit in the first paragraph of my motion, which were basically: the first, the most important thing I’m looking for, out of the Board, is a willingness to accept mistakes and to change. I know you’re a good socialist, a supporter of the Labour party and I’m sure you’ll remember what Denis Healey once said, ‘if you’re in a hole, stop digging.’ What we want to see is major change. We want the same resources you’ve described. Whether it’s the ground, and I’m like a lot of people looking forward to much more tangible proposals on the ground. I want to see within months, by the AGM, specific proposals about a new ground – maybe not within a year, maybe not within three years, but I’m damn sure within five years because whatever you think about this plot, it is not big enough as it currently stands to maintain our ambition. And whether its European funding, or new investors, whatever it is…..I am demanding, as a shareholder, that the issue of our ground is dealt with as a priority. And it seems to be that’s the only way David Moyes will have money for players. It’s the only way we’ll be able to get back that greatness. It’s the only way that not only will I’ll get the swagger, not only will my son get the swagger, but I’ve got a one year old grandson and I want him to have the swagger that I used to know as an Evertonian. And that’s what I demand of the Board. I was a little worried, Bill, at one or two of your comments – particularly your references to change in the executive team. Because I think we need change not just in the executive team. And in many ways, changing the executive team is vital but we do need change at a much more broadly based Board. That’s a personal view. You talked about Roman Abramovich. You talked about Jack Hayward. You talked about Jack Walker. Frankly, I’m not interested in them, between them. In the last decade, we’ve won as much as they have. There’s only been one trophy to any of those teams while they’ve been in charge – and that was the League Championship one off, for Jack Walker. I was more interested in comparison with David Dein, and Arsenal, because that’s our competitor. It’s the dedicated leadership, that you know better than anyone else that occurs at Arsenal. And I know you have an enthusiasm but look at that role model. That’s the role model for Everton – not Roman Abramovich, not Jack Hayward, not even Jack Walker who was a great supporter of Blackburn. I want changes right through the club, Bill. You made a reference to one of the most brilliant insights that I have heard about a football club in the last twenty years. David – if you ever want to give up football management I’ll get you a job in brand management, because the concept of The People’s Club was a brilliant concept, which Evertonian bought into – but what have we done with it in three years? There’s a few posters outside the ground, but where’s that been used as a strategy to move the club beyond the core of hardcore supporters to a much wider group of Evertonians, and not just Evertonians who actually do want not just the club but players who see themselves of a wider community. Players who see themselves coming up from the grassroots of their city, who are proud to play for the team that they live for, who wear shirts, which say, ‘Once a Blue Always a Blue’ and then stick. And then deliver their career there. That should be an ambition not just for a headline but it should be something that goes right through the club and we’re developing those players. And those players want to stay with us forever and they want the bond with supporters. That’s what that brand means. It’s not a strap line. It’s in every aspect of the way the club operates. And that’s what I’m looking for, Bill, in this motion – that kind of commitment. But I’m also looking for communication to be real communication Bill. If I’d been in a bad mood tonight and you’d not been so open and constructive and willing to admit mistakes I might instead………..one of the great things about this close season is the £90m we’ve got! £90m we’ve got! We had £7m to buy Alan Smith. We had £15m that Paul Gregg got for us. We’ve got the £20m from Russia. We’ve got £6m from another gift. We’ve got £15m – perhaps – from ‘whoever’. And we’ve got the £27m we got from selling Wayne Rooney! That’s £90m from my addition isn’t it, if I’ve got my figures right. David, why don’t you go and buy Wayne Rooney back, buy Vieira and we can even get Sol Campbell because they’d sell Vieira and Campbell for £60m, wouldn’t they! That’s what I’m looking for. Now I know that communication is not just selling us easy stories. I know it’s not necessarily you. But that habit, which you referred to, that rumours every day, rumours every night, they must have some source Bill - stop it. I want to know after we sign a player and I want to know when we’ve really got money. You linked two things, the demands that members of True Blue are actually transparent. We hear all these stories about voters’ agreement. I wish they were transparent and open. I’m delighted that True Blue has actually decided to go the way that it has done. That’s a great move and it shows what I’ve been desperate for, to see change. And I want to see that change. Now, my motion was quite carefully phrased Bill. It wasn’t three, four or five motions – it was one motion. And what is says was….accept that you’ve learned the lesson and show us you’ve learned the lesson, that the last four years, the last ten years, the last fifteen years, my God the last twenty years…..show, in everything this club does that you’ve learned the lesson. Give us a strategy, and a plan, at the AGM, which is about a new ground in five years, is about Europe in three years, is about a broader shareholder basing one year. Give us that strategy at the AGM. I wish you’d given it to us tonight. If you do all that no one will

want your resignation because you will be delivering what we want and we will work with you. But work with us has to be the strategy for the future – and I hope, from what the Chief Executive said, and what you said, that’s the turning point, that’s the new beginning, that’s the future of Everton – and that’s what I’m looking forward to. So that when my grandson, for the first time goes to an away match, at Blackburn, at Bolton, Newcastle, even in Sunderland, Manchester – he goes there with swagger, not in shame.” Frank Hargreaves: “I’m Frank Hargreaves…I’m from nowhere really. I’m an Evertonian. I don’t represent anybody. Telling what Tom said is great – it’s great amongst gentlemen and it’s great to hear gentlemen talking at meetings. But I don’t see it like that…….I see that I’m an Evertonian and on a daily basis I get lied to. People tell me lies……Bill tells me lies. And what Tom said, ‘come to me when you’ve signed someone’ – there’s a list as long as your arm, Bill, of things you’ve said, that are not definite, they’re not things that are sound Bill. They’re downright out and out lies. They’ve turned out to be lies. I’ve spoken to Paul Gregg – over a week ago – that if we supplied the script to Dream Team or Footballers Wives about what goes on at this club, they’d kick out the door and they wouldn’t have it………because it’s unbelievable, the way these people carry on is unbelievable. It’s great that Tom stands up and says ‘almost mates’ and ‘above this’……I don’t know what to say in here…….I’m standing up as an Evertonian……because there’s 40,000 people out there who haven’t got a share – who are not privileged enough to be here tonight. And I’m trying me best, to put it into words, without swearing, without coming across as a hooligan, or a thug, that we get lied to on a daily basis by this club. And I’m sorry but it’s got to stop. If that means you (Kenwright) resigning, or you (Gregg) – or whatever…..this fella (Moyes) is putting up with the worst scenario that an Everton fan has ever had to put up with. It’s not good enough for me as an Evertonian. It might be good enough for you (Kenwright), and you (Gregg) and for Tom – but Tom’s got to be like that. This is the way people react. Shareholders Association and all that……with the constrictions of meetings, the etiquette of meetings. I’m sorry…..I’m an Evertonian……I don’t do etiquette……..I do the truth. Let’s hear the truth.” No comment offered from the top table. Michael Sampson: “My name’s Michael Sampson – I’m older than Mr. Cannon and I look it. I’m ashamed by this document because we’re True Blues. We’re the People’s Party. The previous speaker, and Mr. Cannon – Mr. Cannon is an academic. I’m a businessman and have been all my life. Bill is a businessman with the difficulty of raising money out of entertaining us. He has put his life on this ground and on this club. He works his day, twenty hours a day, worrying and ringing and trying to persuade. I think that this document is an insult to Bill and to this club because Bill is a true Evertonian. He’s a true patriot and he’s a good man. If he got things wrong, he’s admitted it. But we cannot listen to rhetoric of saying ‘they’re wrong, they’re wrong, they’re wrong’ because if they’re wrong Mr. Cannon – find the £20m or £30m, you’re an academic so you’ve long holidays. You’ve got nothing else to do in the holidays so find the £20m or £30m. Bill has done that 52 weeks of the year and I think he deserves a vote of thanks.” No comment offered from the top table. Colm Kavanagh: “Mr. Chairman, the Board, Mr. Moyes. My name’s Colm Kavanagh, from Ireland, a member of the Shareholders Executive committee – apologies for the accent, I’ve lost my scouse….. The disclosure, in the recent transfer of Wayne Rooney from this, his boyhood Club, to Manchester United, shows us that Mr. Paul Stretford, the players agent, received a payment of £1.5m for his ‘services’. That £1.5m is arguably more than David Moyes has had to spend on first team strengthening here this past summer, which does not say much for the financial well being of the School of Science. Mr. Stretford, who founded the ProActive Sports Management agency, holds over 3,330,000 ordinary shares in his own company – above and beyond his salary - and, needless to say, he remains a key figure in the ProActive Sports management wing of the Formation Group plc. He is also a director of Stoneygate 48, the company set up to manage Rooney’s image rights. He had much more than a vested interest, in ensuring that Rooney moved to another club before the transfer deadline. Mr. Chairman, you yourself said only last May that you enjoyed ‘a good relationship with Paul Stretford’ – you believe Paul when he tells you he too wants to see Wayne stay at Everton. How then can an eighteen year old boy, two years remaining on a contract at the club he has supported since birth, be allowed to move away to another club when both his Chairman and his agent are working on this ‘good relationship’ to ensure the player remained at Everton. Paul Stretford, not for the first time, ignored the rules and regulations set in place by FIFA. Article 14 of the Licensed Agents Regulations – the Rights & Obligations of an Agent stated that – ‘A licensed agent is required: Never to approach a player who is under contract with a club with the aim of persuading him to terminate his contract prematurely or to flout the rights and duties stipulated in the contract.’ Or, ‘To represent only one party when negotiating a transfer.’ The detail of Rooney’s transfer indicated – again, not for the first time – that Paul Stretford was representing more than one interested party during negotiations. Dining on both sides of the table in fact! It has been well documented, that this club - Everton Football Club - has in the past employed people, either on the playing staff or administrative staff who possessed a shareholding in ProActive. Is this not a potential conflict of interest? Not so long ago we faced a situation where the Chief Executive of this Club at the time, Michael Dunford, was known to be in possession of 40,000 shares in ProActive. During Mr. Dunford’s time at Everton, we saw a lot of ProActive players come and go at Everton: Quality, such as Peter Degn for example. Can you confirm as FACT that Everton Football Club no longer employs any individual who may have a shareholding in ProActive? And if not – why not? It is surely detrimental to the overall aim of improving our team, our Club, when we have people here possessing a financial interest in companies like ProActive – where business and dividends are generated with the continual movement of players from club to club. We all know that the game today is rotten – in fact it stinks. Continually dealing with people like Stretford helps no one bar Stretford himself and those with a

financial interest in ProActive. Its already being reported that Manchester United themselves are offering to pay Mr. Stretford a ‘reward’ of £500,000 if Rooney honours his contract! Thanks indeed to the likes of JP McManus and John Magnier, we humble shareholders are now beginning to witness a truer picture of football and its finances. Clearly it is in the interest of all shareholders to act with such transparency, particularly with regard to Paul Stretford, given his role in the transfer of Wayne Rooney. Have Everton Football Club since January 1st, 2003 instructed Paul Stretford or any company associated with him to act upon its behalf. If so in what circumstances and how much has been paid. Further since January 1st, 2003 have Everton Football Club like Manchester United Football Club paid fees to Paul Stretford or any company associated with him upon behalf of any player who is a client of Stretford and who was involved either in negotiations in respect of joining Everton Football Club or alternatively was entering into or renewing his contract with Everton Football Club. If so how much has been paid and why. This club has got to stop dealing with people like Paul Stretford.” Bill Kenwright: “It was true that Michael Dunford had shares in ProActive.” Colm Kavanagh: “He was a founding shareholder.” Bill Kenwright: “Was he? When the Board found out we instantly said get rid of those shares.” Colm Kavanagh: “You still deal with Mr. Stretford. Peter Degn was a prime example – we got sold a dud.” Bill Kenwright: “Yes, don’t disagree (about Degn).” Colm Kavanagh: “There’s a massive court case coming up……..” Bill Kenwright: “I’m not disagreeing with you.” Colm Kavanagh: “Are you going to stop dealing with Paul Stretford and his company?” Bill Kenwright: “Just hold on. Have we done any dealings with Paul Stretford in the last year?” Frank Hargreaves: “Wayne Rooney – last week!” Colm Kavanagh: “We’ve had shareholders on the playing staff.” Bill Kenwright: “Have we had shareholders on the playing staff? Right!” Frank Hargreaves: “You’re the boss, you’re supposed to know.” Colm Kavanagh: “You’re supposed to know…” Bill Kenwright: “I’m sorry guys, I’m not supposed to know everything. I’d like to but I’m not.” Colm Kavanagh: “You didn’t know your own CEO had 40,000 shares?” Bill Kenwright: “I didn’t till I found out.” Colm Kavanagh: “Four years ago?” Bill Kenwright: “No.” Colm Kavanagh: “I’m a newsagent in Ireland……I haven’t got my finger on the pulse as much as you Bill. Laugh you all may but it’s true. Laugh all you like Bill – it’s fact.” Bill Kenwright: “I know.” Colm Kavanagh: “Let’s clean this club up.” Bill Kenwright: “There’s nothing dirty about this football club.” Colm Kavanagh: “I disagree with that totally. How much did we pay players agents? What did Paul Stretford get?” Bill Kenwright: “I don’t think anyone would disagree with that – the players agents and the way they are paid is appalling.”

Colm Kavanagh: “I think the term, in this club, from the Head of PR, is ‘accepted business’.” Bill Kenwright: “Certainly not accepted business by me.” Colm Kavanagh: “That’s your Head of PR’s own words, sorry.” Bill Kenwright: “Okay – thank you.” Paul Gregg: “I think it’s an important point that’s been raised about the situation with agents. We’re prepared to say that we did represent to the Premier League that the agents fees should be paid by the players and not by the clubs. I also think that as a result of what we’ve seen happen that the Board are recommending that the club make a representation to the Premier League that any member of the Premier League staff – chairman, manager, employees, players should not have shares in agencies because it’s a conflict of interest by everybody and I think that the Premier League should give that some serious thought?” Unknown: “Did you instruct Paul Stretford, three or four months ago, to sell Wayne Rooney?” Bill Kenwright: “Absolutely not.” Unknown: “Well, that’s what he’s saying in the papers…..so why don’t you take him to court?” Bill Kenwright: “I don’t know what it says in the papers but for the last nine months, the manager and myself have been working hard on keeping Wayne Rooney. David and I have been meeting Paul Stretford, and indeed Wayne, for the last nine months now. David, in particular, has met him several times in the last two months. I’ve met him even more times. We were absolutely convinced up to two and a half weeks ago that Wayne would be signing the new contract that had been on his desk since July 9th. Two Sundays ago, David got a phone call from Paul Stretford saying that he and Wayne would like to see him the next day. We thought it was to discuss the newspaper problems that Wayne was having and it wasn’t – it was to discuss the fact that Wayne wanted to leave. So that’s when we first found out.”

Frank Hargreaves: “Somebody’s telling lies. Your Head of PR – ‘Wayne Rooney Hates Everton Football Club – he wants to leave Everton. I knew this six months ago.’ You’re the boss Bill; you’re accountable here now. You’re here tonight. I asked you to stop telling lies. If you haven’t got the answer or don’t know the answer say ‘I’ll get back to you’. Your Head of PR told me personally, looked me in the eye…” Bill Kenwright: “Frank – I’m giving you the answer. You’re choosing not to hear it.” Frank Hargreaves: “I’m telling you what Everton Football Club tell me.” Bill Kenwright: “But I’m telling you what Bill Kenwright, who you say is in charge, is telling you.” Frank Hargreaves: “Well how come everybody else is saying this Bill? We need to get a grip or do one. That’s it, find out what they’re doing because they know more than you.” Bill Kenwright: “Thanks Frank.” Unknown: “Bill – I’ve got a comment to make first. I’m a bit worried……..I’ve changed what I was going to say to be honest. I’m very very worried and me heart’s racing because I’m standing this close to Mr. Moyes. I am not going to swear but it scares me somethingless that all those arguing here…..that that man (Moyes) is going to be scared. Whatever argument goes on here, whatever comments are made….every single one of us is behind you. And if go what is left? Bill, you mentioned irony before. Do you find it ironic that five years ago a certain professor who’s on Sky a lot at the moment stood up to oust Mr. Peter Johnson – and I’m glad he did – and to get you on board. Now, five years on, ironically, he’s trying to do it to you. I find that quite ironic myself. There’s one thing I’d like to see for all Evertonians. I was very sad at the Real Sociedad game. I was sitting in the Bullens end. And I saw our Chairman sitting on his own. I saw a lot of people in their dangly beads, their great suits – Armani, the lot – in that director’s box but not one of them would go and sit by his side. He sat there for the second half on his own. And I as an Evertonian was ashamed for you. You’re a great guy in my book. The request I’ve got – I’d like to see these two men here (Kenwright and Gregg) shake hands: for Everton Football Club, not for money, not for profit, not for anything else. But for Everton Football Club I’d like to see you two shake hands, I really would. Thank you very much.” Bill Kenwright: “Let me just tell you, when we were discussing whether David should come tonight, I said ‘listen, its not really your forum’ but he said ‘I’m a part of this football club and I really wanted to be here’ so he’s here.” Phil Pellow: “My name’s Phil Pellow. I’ve had lots of roles over the last few years at Everton but I’m here tonight as the former co co-ordinator of EfKD – Evertonians for King’s Dock. Bill will know, and so will Paul, that we had a band of very very dedicated and talented Evertonians who worked strenuously to try and support the club, to get that amazing site. At the beginning, if you remember, when the tenders went out for the first bidder status, the Daily Post ran a headline, from someone inside

Liverpool Vision, that we were sixth in a five horse race. A year later, we’d won preferred bidder status. I like to think that the people I was involved with had a little bit to do with that. Every time someone criticised the Everton bid we were in their face – in the papers, television or radio. We never gave up. I know that Bill didn’t either. And in the end, we won preferred bidder status. A fantastic stadium. On a very very most conservative level, of projected income, from that stadium…….if you think of a stadium with a fifty years shelf life, the most conservative estimate of increased revenue for this club was £10m a year. I believe that was far too low. If you think of Arsenal at Ashburton Grove, they’re predicting £1.5m per match in added revenue, on a similar sized stadium. The King’s Dock was going to make this club great again. What happened? We lost it. Now what we have in front of us is the rump of the Board that was responsible for us losing it. This pains me Bill because you’re me mate but we never knew, we were never told at the time exactly what went wrong. It wasn’t good enough but hey ‘we’ve got Wayne Rooney’ and that was alright and our concentration was gathered somewhere else. Tom’s vision tonight is about governance of the football club. I don’t think Tom believes, or I’m sure that I don’t believe, that it’s good for the governance of this football club that the people sitting up here tonight bugger off and get someone else in. There is no one else. But what we do need though is more transparency. What we do need is less bullshit and more truth. What we do need is to know when we do something wrong why it went wrong? I still don’t know what happened to the King’s Dock. Anyone here? Hands up? Anyone know why we lost it? For the sake of £35m we lost, over the next fifty years, a minimum of half a billions pounds in added income. If you can’t get a bank loan on those terms, what the hell is going on? My last point has got nothing to do with the King’s Dock, Bill, it’s about Wayne Rooney. There happened to be a TV edit on ABC News in the States, when Man United were on holiday, on tour, in the summer. In the first week of July, they interviewed Tim Howard, their American goalkeeper – and Tim Howard said, ‘we should be very good up front next season: we’ve got van Nistelrooij, Saha, Alan Smith and Wayne Rooney!’ That was in the first week of July! How did he know if Wayne Rooney wasn’t even leaving this club till two weeks ago? Three phone calls in five minutes: one to Freddie Shepherd – sorry you’re not for sale. One to Man United – sorry you’re not for sale. One to David Moyes – tell him his transfer request is refused. He’d still be here now – and he should be.” Paul Gregg: “The problem with the King’s Dock was, I think really, the biggest concern, the biggest ambition was our ownership in that situation. The truth of the matter was at that time we put forward alternative proposals to fund it. You know, even in this room, one gentleman sat immediately opposite was very much opposed to that alternative funding. In my opinion it was to get past go because, I think we all realised, the only opportunities to raise money towards that scheme once you got past go. We didn’t get past go; it was as simple as that. And I think that if we actually accepted that we weren’t going to own it then maybe we might have made some more progress. But I think, you know, the stadium came up in an earlier conversation and what are we going to do? As Keith (Wyness) has said, and as we all understand it around this table, we desperately need a bigger capacity. We know that Liverpool have put their bid in for Stanley Park. From our point of view, the Board, we agreed that we wouldn’t object to that scheme because we actually thought that the North West Development Board were incredibly keen that those two should share that stadium. Now, obviously, we’ve all got our own thoughts on that, whether we should or we shouldn’t, but in a commercial sense it’s the fastest way to another £15m a year. The truth of the matter is maybe their scheme has got very expensive and there’s concerns that the scheme may be called in. I actually think it’s about time the two clubs got together and everybody realise that this should be a Merseyside project – it shouldn’t be a Liverpool project, it shouldn’t be an Everton project. It should be a Merseyside project that delivers something to the city that both clubs can use, totally independent of each other, and be absolutely equal in what they do. We just have to see what happens with the Liverpool stadium – but I agree, we need a new stadium. Tom, you’re absolutely right, we need a new stadium but a new stadium is going to cost £100m - £150m at least, if you want something reasonable. We’ll need help to do that. It’s not just a commercial project. It has to be community supported as well but we need that help. Every Evertonians help for the King’s Dock was fantastic. Everybody was disappointed it didn’t happen. But what we need now is the same support from Everton supporters, the same support from Liverpool supporters, to demand that the city gets behind it, providing they make it a joint stadium because the simple reality of it is that Everton Football Club can’t afford it and I doubt if Liverpool Football Club can afford it. So I think it’s about time everybody got together and made it work with the city leading that, with the North West Development’s £45m. Let’s find a site and go there.” Mark Denny: “I want to come onto something that’s still missing at the moment – I’m talking about the finances, going forward, and the recently reported £15m of credit. I want to know exactly what does that mean? Is it a loan – again – on top of our debt, which we struggle to pay as it is. Is it a personal loan to you Bill? Is it a loan to True Blue Holdings? Just exactly what is it that the papers are reporting?” Bill Kenwright: “As you know, we had a funding proposal in the pipeline. We were desperate that that funding proposal was in place in time for David to spend some money before the transfer deadline. To help see that proposal funding through we were extraordinarily lucky to get a £15m credit line, as you say, which cannot be changed into shares in a years time whilst be bring to fruition the new investment that we are working on very hard at the moment. So it’s there. It’s there to be used. But we’re not using it at the moment. We don’t need to use it.” Mark Denny: “Can I come back to…..I hear what you’re saying…..in other words, we haven’t got £15m at the moment? We haven’t got the £15m in Everton’s bank account, is that what you’re saying?” Bill Kenwright: “Not at all, it’s there.” Mark Denny: “Plus the £6m what we had two weeks ago? The alternative funding. Plus money from the sale we didn’t need to do, of Wayne Rooney, so therefore the manager in January has got £31m in his back pocket to spend. Is that correct?” Bill Kenwright: “That’s totally incorrect Mark.”

Unknown: “Have we borrowed it?” Bill Kenwright: “No. It’s a cash credit line and we are paying no interest. How much has the manager got? He will have a……..” Unknown: “Bill! Bill! I don’t want to know what the manager’s got. Once you tell people how much you’ve got the prices go through the roof.” Bill Kenwright: “David and I were discussing this only last night and we came to the same conclusion – and he will have a considerable pot in January and in the summer.” Michael Owen: “I’d like to approach the meeting tonight and I was going to ask about new investment but one or two people beat me to it. I would like to know what was the fine print of this cash credit line, and I’m particularly interested in when will it have to be paid back?” Bill Kenwright: “What is the fine print of the cash credit line? It can be converted into shares in a year’s time but it’s only there in place of the new investment we’re currently working on. So hopefully it’ll just be replaced by the new investment.” Michael Owen: “Would you be willing to call it a type of a bridging loan? Would I be wrong?” Bill Kenwright: “No, you wouldn’t be wrong. But with no onerous responsibilities to the football club.” Michael Owen: “How did you make, what sounds like a generous deal – how did you get this?” Bill Kenwright: “Through hard work, Mike.” Michael Owen: “It was your friend Philip Green?” Bill Kenwright: “You know, and I know, I am not going to answer that question. Because of confidentiality but Philip Green has been an extraordinary supporter and worked by my side for the last three months, and I’ve needed it, believe me.” Frank Hargreaves: “Isn’t it fact that you don’t need it though, so you can talk all you like about it all night…” Bill Kenwright: “This is Frank, by the way….” Frank Hargreaves: “Yeah it is yeah. Philip Green, in reality, £15m. You can talk all night about needing it. We can’t spend it till January so get the funding in. It’s like watching Tommy Cooper for God’s sake!” Bill Kenwright: “Thank you Frank.” Michael Owen: “Just continuing with the Philip Green line….” Bill Kenwright: “I’d rather you didn’t, Michael, continue with the Philip Green line.” Michael Owen: “Okay, okay……..how about then if we move onto the other reports about possible new investment which is being reported in the papers – the Russians are coming. Now, is this reported deal dead or is it still a possibility?” Bill Kenwright: “The reported deal, the Fortress Sports Fund, is an absolute possibility and hopefully will be sewn up in the next few weeks.” Michael Owen: “And there’s talk of, ending up with the Fortress Sports Fund owning 40% of Everton Football Club. Is that what we’re looking at?” Bill Kenwright: “I think it’s going to be more than that.” Michael Owen: “Well that sends a shiver down me Bill.” Bill Kenwright: “I know it does Mike because I got the Private Eye thing that you sent to me and thank you very much for sending it to me. I got it checked out immediately and I think it’s going to be the subject of a court case. And obviously as a football club we’ve done all of the searches that you need and all the names mentioned, they’ve all come out A1, Mike.” Michael Owen: “There’s a number of issues there. Other people mentioned in this story, including a 23 year old business student who seemed a quite central figure.”

Bill Kenwright: “I don’t really want to discuss that story.” Michael Owen: “There was also a football agent, talk of him being a director of Everton Football Club. Was he not the agent who brought Mike Walker to Everton?” Bill Kenwright: “I don’t know. I doubt it. He’s not going to be a director of Everton Football Club. Michael Owen: “On the general feeling of ownership of Everton Football Club, I think it’s worth making a point that throughout its entire history, one hundred and twenty six years now, the ownership of Everton Football Club has always been based on Merseyside. It wasn’t until True Blue became majority owners that the ownership, the majority ownership, of Everton Football Club, moved out of Merseyside, to the south east of England. That’s not a great problem because, as you know, we’ve got a great train service between Liverpool and London, Bill. And, for all your faults, yourself, Mr. Gregg and other directors are all fairly approachable………but how on earth are we going to feel with people who have control of Everton Football Club when they may well be based in offshore trusts, when they might be based in St. Petersburg….” Bill Kenwright: “They might well be based in lots of places but one of them is a gentleman who’s going to be on the Board and he’s based in Geneva.” Michael Owen: “Oh great, Bill. People tell me you can get EasyJet there. Look Bill, even a nameless company gives me the heebie-jeebies: Fortress Sports Fund? I mean, “fortress”?” Bill Kenwright: “Mike, as you suggested in your email, Emma made me a nice strong cup of tea and I sat down and I read the article. I didn’t get the heebie-jeebies. I rang him up and asked him what’s all this about? He said, ‘send me the article’…..and it’s a lawsuit I think.” Michael Owen: “But I just can’t understand why these people are interested in Everton Football Club. People may talk about Abramovich but it’s quite different from Abramovich. He walked into Chelsea – it was ready made, a ready made meal. Spanking new stadium, tea on the top floor. I mean, it’s there for him to want. Come here, it’s a whole new board game.” Bill Kenwright: “I agree.” Michael Owen: “And also, Bill, the one point I would like to make, more than anything is ……….you’re going out, here and there, talking to people, both say they’re businessmen who are weighing up……. Bill Kenwright: “Trying to negotiate with businessmen.” Michael Owen: “Trying to persuade them to invest. And they’re trying, these businessmen – outsiders – no emotional stake in Everton, are weighing up what they can get out of Everton. Yet, ready and waiting, here on Merseyside there’s plenty of people ready and waiting just to pump into Everton Football Club if only you’d give them the opportunity.” Bill Kenwright: “Mike, I think I did say that we were looking forward to giving them that opportunity. I think, Mike, people aren’t out there looking to put money into football clubs. There’s seriously not, and I think, to find a Geneva based institution that has got a lot of money; that is interested in putting money into the football club. It has been a long hard trawl. It’s something to be celebrated personally.” Unknown: “Will it own Everton Football Club?” Bill Kenwright: “I will remain the Chairman. I suppose if you put a lot of money in …..does Abramovich have control of Chelsea? Yes, he absolutely does. If they get fifty one per cent……..but they’re not going to get fifty one per cent, they’re going to get twenty nine per cent.” Colm Kavanagh: “Is Jerome Anderson part of that consortium?” Bill Kenwright: “Jerome Anderson was the chap who first of all came to me and said ‘I know some people who might be able to help you’, which I’ve got to tell you a lot of people do. And Jerome Anderson introduced me to some people that I hope will help you and help this football club.” Colm Kavanagh: “Okay, all well and good but we’re all under the umbrella of FIFA rules and the conflict of interest if an agent has any financial stake in a football club…” Bill Kenwright: “He won’t have.” Colm Kavanagh: “But when you talk a lot of money….basically you’re all going to dissolve True Blue Holdings and then jump ship with this new Sports Foundation….if Jerome Anderson is someway involved, even if he is not visible to all, then we are breaking the rules.”

Bill Kenwright: “Thank you Colm.” George Orr: “My name’s George Orr – just like to say to Bill, over the Rooney transfer – why did we go to the richest club in the world and get £10m now and £10m next year. And if they use that £10m in their vaults, which is £40k to £50k a week’s interest – aren’t we paying Wayne Rooney’s wages for the next year?” Bill Kenwright: “I think, George, all you can ever do is get the best deal you can. I got the best deal I could and it took me four and a half days of constant negotiations. Certainly the deal rose and rose and rose.” George Orr: “But it’s the richest club in the world – why did you accept £10m next year?” Bill Kenwright: “Because it’s £20m in eleven months and the bank was very very happy to advance us any money on the extra £10m if we needed it.” George Orr: “And we lost all that interest? We’ve lost all that interest on the £10m that we would’ve had immediately.” Bill Kenwright: “Yes. Unfortunately.” Phil Pellow: “Very briefly, the best deal you could’ve done was to keep Wayne Rooney at this football club. End of story.” Bill Kenwright: “I agree with you Phil.” Phil Pellow: “Well why didn’t you do it?” Bill Kenwright: “Because I couldn’t Phil.” Phil Pellow: “Yes you could. His transfer request is refused. United are told he’s not for sale.” Bill Kenwright: “Okay, maybe Phil, I wasn’t capable of doing it then. I tried and tried and I did my best.” Colm Kavanagh: “I think we’re all under the interpretation that kids that leave football clubs, picked up by bigger sharks for want of a better term, that the club that loses the young talent……maybe not even to the standard of Wayne Rooney, only get a token fee of £1m, £2m, £3m……….because they’re too young to qualify for a Bosman. I think it was Harry Harris, two weeks ago in the Express, he championed yourself….you held all the aces…..Rooney would be a test case…….that whole notion of kids being picked up by bigger clubs is gone……” Bill Kenwright: “Let me just tell you what Harry Harris has said. And Harry Harris got it dead right. David and I had both been to the tribunal system and what happens is…..at the end of a contract, you’re judged on just what you are. A footballer, as young as 18, 19 year old……twenty year old footballer in this instance…..and we realised we would’ve got something around about £3m or £4m. Colm Kavanagh: “Add eleven or twelve million Bill?” Bill Kenwright: “Hold on, hold on…..then you go to appeal. Appeal is based on status in the game. A1. International. A1. Age. A1. Contract he’d been offered. A1. And we were told exactly what you just said. You would probably be looking at £12m to £13m to £14m at the end of the two years.” Colm Kavanagh: “So you would’ve had two years to change the mind of an eighteen year old who would’ve been more mature at twenty?” Bill Kenwright: “Absolutely. We wanted to keep him for those two years.” Colm Kavanagh: “You didn’t fight hard enough Bill, sorry.” Bill Kenwright: “I fought harder than I’ve ever fought…….maybe David would like to say something here….” David Moyes: “It’s slightly difficult because we’ve the press in here as well and everything I say goes into the press. What I would say to you is that in the end the player wanted to go – and you need to trust me. I heard some talk earlier, saying they’d been told lies. Well, I’ll tell you what, every day I’m at this football club I’ll only tell you the truth and you can decide whether I’m telling you the truth just now. I’m telling you, we’ve done everything possible. We’ve saved every penny into the barrel we possibly could. You’re gonna have to decide that yourself whether you think that’s the truth or not. I hope you’ll want to state that that is the case.” Bill Kenwright: “And we did it side by side since last November.”

Mike Finnegan: “Here on behalf of my mother who’s a shareholder. I just want to ask, Bill – earlier on this evening you said about you made a mistake when True Blue Holdings came in and paid £22m, should’ve had £42m. Are Fortress Sports coming in with extra money or are they just come in and buy shares?” Bill Kenwright: “No, no, no – they’re not going to buy shares. There’s going to be a new share issue. So they’re not going to give the money to go into the football club. The idea is, contract, is for two share issues of a year or two years which will hopefully bring us about £30m – and from the way I talk to them, that will be a minimum and they want to invest again.” Mike Finnegan: “So they’re not making the same mistake as you did three years ago?” Bill Kenwright: “Certainly not! I don’t think anyone ever will again, to be honest with you.” Harry Markham: “Just an Evertonian, like everyone else here. I’d like to ask you about the proposed new academy at Halewood, I believe. I believe that the sale of Bellefield is going to fund the academy.” Bill Kenwright: “Part fund.” Harry Markham: “What we’ve been reading in the press lately is that we’ve missed the boat on planning permission at Bellefield, for residential buildings, which means that Bellefield is now worthless, virtually. Is that true? If it is true, how are we going to fund the new academy? When do you expect the first brick to be laid at Halewood?” Paul Gregg: “I think, the thing about Bellefield, very simply……is that there was an application submitted to the city. What has happened is that the Government has brought in new legislation on green field sites. If you want to get rid of green field sites you’ve got to find one alternatively. We put the application in. The city’s come back to us and said this is going to be called in and we advise you to withdraw the application at this point. Called in means the Government have a right to review it and it’s a 98% chance it gets called in because it’s a loss of green field in city centres. My property, the person who’s been working on it, he believes that we should withdraw the application – which the Board has agreed to do today – and we will continue to discuss, with the city, whether alternative green space can be made available so we can effectively put our application in again, for Bellefield in a slightly revised form. Our feelings are, within twelve to fifteen months, that we will be able to achieve that.” Unknown: “The planning application for Bellefield – was it put in at the same time as the planning application for the new centre at Halewood? If not, why not?” Paul Gregg: “It was. I think Halewood has been going on for the best part of twelve months actually. We do have full planning permission. I think what we need to do is to resolve our position at Bellefield, which we think we can achieve in the next twelve to eighteen months. As far as the Halewood site is concerned, we can exercise our options to go forward with that without making a full commitment for twelve months. I think the other part about it is that we recognise that we want to review our youth policy, generally, and I think, as Bill said, we want to decide what we want to do with a new academy, what we can achieve. So we just actually need to review the whole process, which we are going to do, now, and again, by the AGM we should give you some clearer indication what we can achieve.” Unknown: “You still haven’t answered the question.” Paul Gregg: “Well, the Halewood application went in well before Bellefield.” Unknown: “Why?” Paul Gregg: “Why? I think the problem was with Bellefield; the previous Chief Executive had been negotiating to buy certain properties as part of Bellefield. In hindsight, maybe we should have put in the application earlier than we did. And negotiated those purchases, from weakness rather than strength. And that’s what we did. I think the situation is that the value can be achieved.” Bill Kenwright: “Because there might be a delay we are investing some £600k, £700k in the facilities at Netherton in the next few months.” Julia Sykes: “Julia Sykes, Shareholders Association – I’d like to get back to the performance of True Blue over the last four years and really, two questions: what are the cumulative losses under True Blue Holdings’ stewardship and why are we continuing to finance this by selling assets at the same time as increasing debt?” Bill Kenwright: “I thought that was answered in the original speech.” Julia Sykes: “There was a lot of figures on there about how much money we’ve made, not about how much money we’ve lost.” Bill Kenwright: “No it wasn’t. It was how much money we’ve lost – the deficit between players in and players out. We’ve actually managed to break even, more or less, on the running column, we’ve lost about £24m on the playing side.”

Unknown: “Yourself and Mr. Gregg are on rather good speaking terms. You seem to be getting on quite well. I was wondering if Everton Football Club could now avail of the opportunity to tap into the money which Mr. Gregg said he had at his disposal earlier in the summer.” Paul Gregg: “The answer to that is we’ll wait and see where we are with the Fortress investment fund. The very fact that we’ve changed True Blue and agreed to dissolve True Blue would widen the Board representation – we’ll give that opportunity to consider any investment. What I’ve tried to resolve tonight is exactly what the Shareholders Association has tried to deliver, which was that True Blue, in its capacity to control the club, needed to be changed. We know that’s going to happen. We’ve effectively confirmed we’ll be leading a wider share ownership; the fan base will have a wide share ownership. We’re supporting that situation. I actually think, for my part, a lot has been achieved prior to this meeting. Look, everyone knows there’s been a stand up fight between Bill and I – how the company should be run. As far as we’re concerned we’ve got two ambitions: one for Everton Football Club to be successful. And my ambition has been the same, for Everton Football Club to be successful. Bill’s seen it his way, I’ve seen it my way but I think we all recognise that in the last four years our ambition….you know…….I suppose the truth of the matter is that there was too much loyalty – loyalty to the previous executive management. We should’ve actually taken a clean sheet of paper and started from scratch. We didn’t do that. I think we now recognise that for the club to seriously compete we’ll have to make those changes and I feel it’s been a sad summer for Evertonians in what’s gone on and where we’ve gone on but I think, you know, that clean sheet of paper is nearly there. And I think we can start moving forward now.” John Shearon: “Good evening, I’m John Shearon. And the gratuitous plug by the way - I’m the secretary of the Ruleteros Society, which is the link between Chile Everton and our good selves. The reason I pull this plug up is just because both clubs happen to be the home of semi finals for the World Cup, which leads to my question: Tom’s stated that, or basically asked, that you provide a sort of plan by the AGM of how we’re going to go forward with the stadium, whether we develop it etc. Listening to what’s come from the table this evening, it seems to be either we’re waiting to see what Liverpool throw our way, we might do a quick fix on the Old Lady or what? I remember coming here a few years ago before the King’s Dock was binned and we asked ‘where’s Plan B Bill?’and you all laughed……………‘Oh we don’t need a Plan B’…..” Bill Kenwright: “I know, I know.” John Shearon: “Well, have we got a Plan A?” Bill Kenwright: “I think Plan A, to some people, would be a shared stadium. I think Plan B would be one of four sites that we’re currently reviewing.” John Shearon: “These are dreams……..there’s nothing…….it strikes me that…..well, we’re going to get a five year plan on the basis of the EGM. It’s like you’re reacting to this EGM, which is great, but surely with regards to the stadium, from the collapse of the King’s Dock….you must have something concrete, even if you kept it close to your chest, would you like to ……in the interest of transparency?” Bill Kenwright: “We have two pretty concrete………” John Shearon: “Not Cronton?” Bill Kenwright: “No!” John Shearon: “You did say you had two sites, are they in the city or are they outside the city?” Bill Kenwright: “One is, one isn’t. It’s not in Manchester!” Gareth Jones: “Today you’ve shown some transparency, which is appreciated by most of us here I’m sure. My question really is do the board recognise that us as minority owners have some legitimate concerns and accept that in the past you haven’t provided us with a full account of past issues and why we’re in the financial situation we are today. Based on this, would it be possible for the club to provide a full forensic audit, appointed by the Shareholders Association Executive to address this situation.” Bill Kenwright: “A full forensic audit?” Gareth Jones: “That’s correct.” Bill Kenwright: “Don’t you get an audit every year?” Gareth Jones: “We get a breakdown of your accounts.” Bill Kenwright: “Why would you want a full forensic audit for? Why would you want one?” Gareth Jones: “We want to know exactly what’s happened in the past, what’s gone on. Where the money has gone. We’re three times more in debt than when you took over.”

Bill Kenwright: “Is that not in the accounts?” Paul Gregg: “I was just going to say that, with respect. The club’s published the accounts each year – particularly in our term of tenure, those accounts have been presented to the AGM. They’ve been approved by the AGM; they’ve been approved by our auditors. They do actually reflect the business of the club. Now, I think at any time that anybody wants to go and sit and talk to the chief executive and talk about those things then they can be explained. My belief is that for the last four years you can see where the money’s gone. I mean, whether decisions are right or wrong, it doesn’t matter – the principle is the money’s being spent in a proper way, and it’s being dealt with. Short answer is that those accounts are there and at the AGM in December you’ll have a new set of accounts for your approval and that will be an opportunity for you to discuss those accounts in more detail if you want.” Bill Kenwright: “And if you have any personal problems please proceed with the chief executive.” Colm Kavanagh: “Will agents fees be disclosed in that set of accounts?” Bill Kenwright: “Well, they certainly were there tonight. I hate them!” Unknown: “Question, Mr. Chairman: one name has not been mentioned, in the age of transparency – perhaps you could tell us what happened to the previous chief executive who vanished overnight. Trevor Birch is his name in case you’ve forgotten. What happened?” Bill Kenwright: “What happened with Trevor?” Unknown: “Yes.” Bill Kenwright: “He left the football club after seven weeks. I became chairman on the day he became chief executive. I’m not going to go into the private reasons why he left.” Unknown: “Why not?” Bill Kenwright: “Because I’m not going to.” Unknown: “Transparency?” Bill Kenwright: “It’s not transparency that Trevor desires.” Unknown: “He’s been silent.” Bill Kenwright: “He has indeed and he’s going to remain silent.” Unknown: “Is that part of the deal?” Bill Kenwright: “And he’s going to remain silent.” Unknown: “But you won’t tell us why?” Bill Kenwright: “I will not.” Unknown: “Perhaps when this chief executive goes you’ll tell us why?” Bill Kenwright: “Thank you.” Unknown: “No answer I see.” Bill Kenwright: “No, you got a perfectly good answer. I’m not going to tell you.” Unknown: “Transparent! Colin Lyons: “Okay, I’d like to look forward rather than back really. I suppose my question is directed towards David. Obviously it would be unwise to reveal how much the club had to spend. I’d really like to know whether David is happy with the money that’s going to be made available in January and again next summer, to take this club back into the top half of this division. Hopefully back into the European positions again and hopefully to make the club great again.” David Moyes: “Well we nearly got there a year ago without much money so I hope that with some investment, and players coming in hopefully in the January window, improving again in the summer – that we can try and make those improvements. The immediate thing, just now, is the players we’ve got at the club just now – they’re the most important ones – but I can tell you that they’re all working very hard on looking around the country to see who’s available from January. The figures I’ve been given by

Bill hopefully will make a big improvement. We’ll look very hard and hopefully try and bring in the right improvements. But as you all know, it’s January now before we can do that so the support of the players we’ve got playing in the team just now will be very important and I know that will happen because they desperately need your backing and continued support. Quality is a big word, and an over-used word, every football supporter and every talk radio station, whatever you want to call it, say their football club needs quality. I keep asking people to define quality – what does quality actually mean – and when you think about it, you start talking to players who have quality, and the money they cost – we might not have the money to buy the top quality but we’ll certainly have the money to get what will hopefully improve the side. We’ll be looking to do that as soon as we possibly can.” Craig Kearns: “My name’s Craig Kearns, I’m over from Yorkshire representing a shareholder who cannot be here tonight. Bill, you said in your earlier slides that you supported the idea of supporters’ involvement in ownership of the club and I think I’m right in saying that I heard Paul say the club would welcome investment from anywhere. Now, one of the problems in negotiations that are apparently going on at the moment with holdings like True Blue is that the existing shareholders basically have pre-emption rights. It’d be a sad irony if something like the supporters club, something that calls itself The People’s Club found itself in a situation that it got a supporters trust going, passed the hat around……” Bill Kenwright: “Can you do me a favour and just forget True Blue because it’s on its way out.” Craig Kearns: “The question is……I’m trying to look forward…..not make a speech, which I think I’ve heard too much of tonight. Are the Board prepared in their negotiations with Fortress, or whoever, to leave the door open for new money to come in and for new money, from the supporters trust or where else, on similar terms to that which is being offered to Fortress rather than people putting money in that’s either taking out existing shareholders…..” Bill Kenwright: “I think you missed it when I said I’d made that a contractual stipulation, and they’d agreed to that.” Unknown: “Just to touch on the still open wound of the Wayne Rooney transfer once again Bill. You said you got the best deal for Everton, which I know I questioned at the time, still to some extent do. Did you have to make it quite as complex? I got onto teletext the next day, to see exactly what the terms of the deal was. There’s one particular issue which raises concern with me and people are talking about conflict of interests all night…..there’s one issue in that deal, and you can confirm or deny as you wish, saying that if Manchester United win the Premier League we get £500,000 more. Now, if you think back two years ago, when we played Manchester United here on the last day of the season, how can it be good for football that its in our interest – half a million pounds worth of interest – for Manchester United to win the league, when we’ve got to play them on the pitch twice a season?” Bill Kenwright: “It’s what happens with all deals I’m afraid at the moment. If you’re doing big money deals – and this was – it’s going to be…..part of it is going to be involved on appearances if you remember. It was international. It was Manchester United – which I hated doing but……believe me, I tried for Manchester United to be relegated and all those things but they wouldn’t wear it and I tried for UEFA Cup…” Unknown: “It just strikes me as a conflict of interest Bill and I’m sure I’m not alone in that.” Bill Kenwright: “I don’t disagree with that.” Paul Gregg: “But I think we’ve had results where we’ve done £1.5m, or won £1.5m in place money, so you can’t actually consider that as a real consideration. At the end of the day you’ll want that place money.” Bill Kenwright: “Just to let you know what was behind the deal……David and I were saying £30m, £30m, £30m, £30m…….” Audience: “FIFTY MILLION!” Bill Kenwright: “Sorry?” Audience: “Fifty million!” Bill Kenwright: “No, no, no………there was a piece in the News of the World……….” Paul McMonnies: “On the Everton website!” Bill Kenwright: “There was a piece in the News of the World where it was said, ‘Bill and David look at each other and laugh and say he must be worth £50m now.’ Well, he’s worth £100m I think but…we were trying to get £30m that was the deal. The twenty five per cent sell on was vital. I don’t know any other club that has ever got a twenty five per cent. We got a twenty five per cent sell on. They offered…….” Mark Denny: “Only of the profit, Bill, isn’t it?” Bill Kenwright: “It’s always of the profit.” Mark Denny: “But they’ve got to sell him for more than £25m which is very unlikely.”

Bill Kenwright: “You think it’s unlikely Mark?” Mark Denny: “The bubble’s going to burst with this Sky deal, as you well know.” Bill Kenwright: “Did I not do well then? I didn’t want him to go. Okay, the twenty five per cent was important. They offered £20m, as you know. They then started using the steps deal, where you get money if you do ‘this’…and you then get money…..they wouldn’t accept international caps, we put in international caps. Eventually it was absolutely made clear to David and myself that the player wanted to go to Manchester United. David and I had a meeting with Alex Ferguson and David Gill. We went out in another room; we went back in and got an extra £3m. It was on top of the £25m. We got a guaranteed £3m and an extra £2m on top to take it to £27m. So we will make £23m. I hope we make £25m, £26m and I hope we get a good sell on. I did the very very best deal in heartbreaking circumstances. You either believe me or you don’t, you just believe David – fine. We did it together and it was heartbreaking for me and it still is.” Steve Jones: “I just want to ask, as we waited till the rest of Europe had seen just how good Wayne really was before opening contract negotiations with him……how long’s left on Mr. Moyes’ contract and are we going to start negotiating with him now or wait till Berti Vogts has been sacked?” Bill Kenwright: “Thank you Steve. Obviously I’ve not made myself clear. I think it was November, wasn’t it David, that we opened negotiations for his contract. We’ve done six months of negotiations - £50,000 a week has been on the desk since July 9th. We were convinced…….” Audience: “Take it Davey!” Unknown: “Dave – wanna buy a share?” Unknown: “Dave – don’t believe him!” Bill Kenwright: “When you’re all shouting out ‘sign it, sign it, sign it’ – and next year you’ll go ‘how could you pay him £50,000 a week!” Audience: “We’re not talking about Rooney!” Bill Kenwright: “Oh you want to know about that now! Nothing, nothing! I hate him! As has been proved, I think he’s a terrible manager as has been proved! David and I sat down before the Blackburn game and we talked about a new contract – and we were very happy to talk about a new contract and we wanted to get this horrible summer over first, for both of us as we will continue to easy, simple conversation.” James Lyon: “I’m James Lyon, member of the Shareholders Association, like many of us here tonight. Given that tonight Bill you have delivered two key words – transparency and openness…” Bill Kenwright: “Yes.” James Lyon: “I would like then, in the spirit of those words, to put a question to Mr. Woods. We all have our personal opinions of what Mr. Gregg’s for, what Mr. Kenwright’s for, what they’re trying to achieve – be it through personal conversations, be it through forums like this, be it through various media releases, websites etc. etc. Mr. Woods, what I am far from clear on, throughout your tenure on the Board and your time in True Blue Holdings, is what you actually bring to that. To make it absolutely clear, what I’m asking you to do, if you may, for the purposes of all the shareholders that are here tonight is to tell us in your own terms what it is you’ve actually done for us and what do you intend to achieve, intend to progress over the coming months etc. The reason I ask that is that when you’re on a committee or a Board – one of the purposes of doing that is to add value to that Board, committee etc. To add value to it. What I’m not clear about, Mr. Woods, and this is why now I would like to give you the opportunity to respond to this, is….what do you actually do to add value?” Jon Woods: “Well clearly you think I do nothing at all.” James Lyon: “I don’t have a view. I would just like you to enlighten us all. How do you add value?” Jon Woods: “Well my colleagues have had a lot to say, as has been evident in the last few months. But this is hardly a forum where there is anything to contribute, necessarily. I’ve quite a lot to say in normal Board affairs, or the company’s affairs – so there isn’t really much more to add other than I did put my hand in my pocket to rescue this club in earlier days, though that’s all now long forgotten along with my colleagues here. There isn’t anything more to say.” Bill Kenwright: “There is quite a lot more to say – and I object to that question. What Jon Woods has done consistently is support me, the manager whether it was Walter or David.” Sadly, our recording man ran out of tape at this point, meaning we missed Steve Allinson’s closing speech and the farce that surrounded the vote. The meeting closed soon after.

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 14

Everton chief Birch resigns Friday, 16 July, 2004, 17:58 GMT 18:58 UK By Phil McNulty Chief football writer Everton chief executive Trevor Birch has resigned after only six weeks. BBC Sport understands that Birch's exit has nothing to do with a reported showdown with manager David Moyes over a lack of transfer funds this summer. Birch was brought in to Goodison Park with the brief of overhauling the club's finances and long-term position. But it is thought he quit after a perceived lack of boardroom support for some of his proposals, one of which may have been to look for new owners. A statement on the club website confirmed on Friday: "Everton football club is disappointed to announce that Trevor Birch has resigned as chief executive officer. "But we are continuing discussions with Trevor about the possibility of an advisory role going forward." Everton chairman Bill Kenwright and the board will immediately start the search for a replacement for Birch, who is currently away on holiday and not intending to make any immediate comment. His departure follows hot on the heels of comments from Everton director Paul Gregg suggesting changes were needed in the club's structure to encourage much-needed investment. The Goodison club had turned to Birch - who previously held similar jobs at Chelsea and Leeds at the end of May as they sought to eat into an estimated £30m debt. But the summer's transfer problems have only compounded the pressure already on the club's hierarchy following a poor end to last season. A bid for Birmingham midfielder Robbie Savage broke down this week and moves for Dominic Matteo and Sean Davis also failed. Marcus Bent is the only new face so far and manager Moyes - currently on a pre-season tour in Austria - has been growing increasingly frustrated with the lack of progress. Moyes, and Birch, have also had to contend with Tomasz Radzinski's refusal to sign a new contract and comments attributed to the striker suggesting Wayne Rooney should leave to better himself. Only last week, Birch tabled a new five-year, £50-000-a-week contract offer to star striker Rooney in attempt to keep the youngster from the clutches of Europe's top clubs. In his short time at the club, Birch also sought talks with Liverpool over the possibility of sharing a new ground, but was swiftly rebuffed by Reds counterpart Rick Parry.

http://news.bbc.co.uk/sport1/low/football/teams/e/everton/3901225.stm

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Appendix 15

Kenwright gives himself four days to save Everton By Alan Nixon and Tim Rich Tuesday, 27 July 2004 Bill Kenwright last night gave himself four days to find backers for his regime at Everton or hand over control. Bill Kenwright last night gave himself four days to find backers for his regime at Everton or hand over control. The Everton chairman left a stormy two-and-a-half hour board meeting, admitting he was ready to walk away from running Goodison Park if he failed to come up with alternative funding for the club. Friends of the theatrical impresario, such as the billionaire head of British Home Stores, Phillip Green and Tesco chief executive, Terry Leahy, have either been unable or unwilling to come to Everton's aid. This leaves the investment package proposed by Kenwright's former ally and now bitter enemy, Paul Gregg, as the only alternative. Gregg, who failed to attend a single home game last season, has employed a PR agency to attack Kenwright in the Merseyside press to widen the gulf between himself and his former friend. Kenwright is incensed that one of Gregg's chief proposals to raise investment - a share issue to fans - was precisely the idea Gregg rejected two years ago. However, Kenwright was a reluctant chairman when Sir Philip Carter was ousted four years ago and would quit if he judged the circumstances were right. Yesterday he said: "A personal vendetta has been waged against me by Paul Gregg. If standing down is needed to bring money into this club, then that is what will happen. I am totally irrelevant. All that matters is this club and the new season." There are several potential takeover groups and it is possible that Everton's former chief executive, Trevor Birch, could return. Birch, whose resignation at the beginning of the month after six weeks in the job triggered the current crisis, spoke to several potential backers in his brief time at Goodison Park. He has the know-how and the ability to put together a takeover package. The main hurdle any buyer faces is that they would want to buy the shares cheaply - or even take over a club that is around £40m in debt for nothing. However, despite the level of debt, it is manageable, especially with an asset such as Wayne Rooney for whom the club will accept no bid lower than £30m. That sum represents the loan the club took out, guaranteed on season-ticket sales, repayable at £2.8m per year. There is also a £5m bank overdraft. Among the Merseyside millionaires with an interest, the smart money is on Mike McComb, who made his fortune in mobile phones, in an alliance with David McLean, who built up a housing empire. Both would want day-to-day involvement and unlike, Kenwright, who is based in London, they live in easy reach of Goodison Park; McComb in Ormskirk and McLean in north Wales.

http://www.independent.co.uk/sport/football/premier-league/kenwright-gives-himself-four-days-to-saveeverton-554587.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 16

Gregg pledges cash for Moyes in battle of Goodison By Kieran Daley Sunday, 1 August 2004 Paul Gregg, the Everton director who is aiming to take control of the club, apologised to manager David Moyes for the summer of turmoil at Goodison Park as he confirmed that Lord Grantchester was the key man financing his bid for power at Goodison Park. Paul Gregg, the Everton director who is aiming to take control of the club, apologised to manager David Moyes for the summer of turmoil at Goodison Park as he confirmed that Lord Grantchester was the key man financing his bid for power at Goodison Park. Gregg's plan would provide the manager, David Moyes, with money for transfers. "On Monday morning David Moyes and his team return from [their tour to] America with a desperate need to fulfil his ambitions for the team. We have made a commitment to support those ambitions immediately." Confirmation that Grantchester is funding Gregg's financial package smacks of revenge for the Moores family. Bill Kenwright, the chairman who is struggling to keep control of a club he bought four years ago, has ousted much of the old guard, many of whom, like Grantchester, were loyal to the Moores who had owned and run the club for many years. Moyes complained about his preparation for the season being disrupted by the in-fighting, and Gregg offered him words of support. He said: "David Moyes has had a hard time and this has not helped, and we are all sorry about that. But it is more important that these issues are sorted out in the close season." Everton's board met on Monday and delayed a decision on Gregg's proposals for the future funding of the club until Friday, when Kenwright had been expected to make a statement. Gregg took the initiative by going to Goodison Park, and revealing Grantchester as the main backer of his planned £15m investment into a club who are in debt by between £30m and £40m. That debt could be slashed by selling the club's prized asset, Wayne Rooney, probably to Manchester United. Time is running out for any club to test Everton's resolve with a transfer offer this summer, but there is also the January window. Last night David Gill, Manchester United's chief executive, who was in New York for the team's match against Milan, was unwilling to comment directly on rumours linking Rooney with a move to Old Trafford. But he said: "This time last year Louis Saha wasn't on the agenda but as we moved through the season, and he became available, and we needed to strengthen that position, we did that in January. We would react to the situation as it unfolded."

http://www.independent.co.uk/sport/football/premier-league/gregg-pledges-cash-for-moyes-in-battleof-goodison-555175.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 17

Everton: man in the middle does a U-turn, Aug 3 2004 By Mark Hookham, Daily Post

THE crisis at Everton Football Club descended into farce last night after Paul Gregg's millionaire backer announced he was not behind the scheme - and then changed his mind. Last week, Lord Grantchester, an heir to the Moores family fortune, was heralded as one of three investors willing to inject £15m into the club. But yesterday afternoon he released a statement denying he was offering financial support. He said: "It is not the case that I am behind Mr Gregg's proposals to underwrite funds for the Club, and indeed I have not seen Mr Gregg's proposals to the Board." Within hours, his advisers issued a second statement. This time, the Labour peer gave his full support for a "wider investment group" to be established by Gregg and and strongly hinted that he, like Gregg, wanted Everton chairman Bill Kenwright to dissolve True Blue Holdings, which owns 72% of the club. He said: "I welcome the continuation of discussions regarding how I could help with providing longterm stability for EFC. "Success is more likely to be achieved through a wider investment group that I understand Paul Gregg is seeking to develop to provide EFC with a sustainable future. "However, until such time that the current issues surrounding True Blue Holdings are resolved, it is difficult to see how I could be involved at this stage." The confusion follows a week of bitter in-fighting between Kenwright and Gregg. Last Monday, Gregg claimed cash would only flow into the club if True Blue Holding dissolved and Kenwright, the majority shareholder, resigned. But Kenwright has insisted he will not hand over the club without knowing who the investors are. Fans last night reacted with anger and the Daily Post understands supporter protests are likely to be held at Everton's pre-season friendly at Goodison against Real Sociedad on Saturday. Carl Roper, from Evertonians for Change, said: "The fans are the losers in all this. All sides are treating us with contempt. I would like to hear what Mr Gregg has to say about this because I was at the press conference on Friday and heard him confirm Lord Grantchester." Steve Allinson, chairman of the Everton Shareholders Association, said: "They (Gregg and Kenwright) are equally culpable for this mess and the situation is deteriorating." Lord Grantchester is the grandson of Littlewoods founder Sir John Moores and already owns 10% of the club's shares. The Cheshire dairy farmer resigned from the Everton board in 2000 amid rumours of a disagreement with Kenwright. http://icliverpool.icnetwork.co.uk/0100news/0100regionalnews/tm_headline=everton-man-in-themiddle-does-a-u-turn%26method=full%26objectid=14490533%26page=1%26siteid=50061name_page.html

Last night, he said he was frustrated at the club's lack of progress, explaining: "I am a lifelong Evertonian and share with all Evertonians deep disappointment and frustration at seeing our great club failing to compete at the highest level. "I look forward to the board's proposals to make progress with a clear vision for the development of Everton Football Club." Paul Gregg, the founder of Apollo Leisure Group, said the club now desperately needed stability. He said: "Lord Grantchester is reaffirming that Everton FC needs to change and find a new way forward before the start of the season. "I welcome Lord Grantchester's support in his second statement he issued today and I am committed to ensuring the necessary funds are available should the present board be prepared to step down." Kenwright declined to comment last night. The gloom at Goodison is being blamed for the cancellation of a pantomime starring former Everton players. Ticket sales for the midsummer run of Snow Blue and the Blue Noses at the Empire Theatre had been poor, with many thousands remaining unsold.

http://icliverpool.icnetwork.co.uk/0100news/0100regionalnews/tm_headline=everton-man-in-themiddle-does-a-u-turn%26method=full%26objectid=14490533%26page=1%26siteid=50061name_page.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 18

The Sunday Times September 19, 2004

Geneva financier mounts takeover bid for Everton Matthew Goodman THE Geneva-based financier Christopher Samuelson is close to leading a takeover of Everton Football Club with an initial £12.8m investment, climbing to an eventual £30m.

Samuelson’s vehicle, the Fortress Sports Fund, hopes to take over a £15m loan arranged for the club by retail tycoon Philip Green last month. As part of the deal, Samuelson will convert the loan into shares in the football club, emerging with a 29.9% stake. Fortress will have an option to enlarge its holding at a later date to a controlling 50.1% stake, at a price of £17.2m. Samuelson has assembled about a dozen investors for the scheme but they will not include Boris Zingarevich, a Russian millionaire businessman revealed by The Sunday Times to be a key figure in the takeover of the Merseyside club. Zingarevich dropped out because he did not want the publicity that came with the deal. Samuelson, who describes himself as a committed Everton fan, is investing part of his personal wealth in the deal. He said fellow investors include Michele Saba, a private banker; Patricia German-Ribon, a member of the Aramayo mining family; Guy de la Tour du Pin and Emily Willi, two wealthy Europeans; and Robert Steelhammer and Michele Miller, who are past business associates of Samuelson. Samuelson said another half dozen individuals had also contributed money but he declined to reveal their identities. Under the terms of the proposed deal, Everton’s current majority shareholder, a company called True Blue Holdings, would be liquidated and the shares in Everton passed to its shareholders, who include club chairman Bill Kenwright. Fortress has made it a condition of its investment that Kenwright stay on as chairman. The fund is also keen for team manager David Moyes to continue in his role. It is understood that Kenwright is keen to see the deal go through and resolve the issue of the club’s ownership. An announcement could be made in the next couple of days. Samuelson said he thought Everton had great potential and that it could draw regular crowds of between 55,000 and 60,000 people. “There is a lot of room for improvement but Everton has a good team,” he said. Samuelson is a co-founder of the Fortress Sports Fund alongside Kevin Neal, a fellow investment adviser, and Jerome Anderson, a football agent known for his links to Arsenal. Anderson’s clients include Thierry Henry and he has helped bring stars such as Dennis Bergkamp to the Premiership champions. Speculation has swirled round Everton for several weeks as it grapples with its finances. Kenwright has been searching for new investors for months. He first bought into the club four years ago, buying out hamper king Peter Johnson for £20m. His fellow shareholders include Paul Gregg, the leisure entrepreneur. Kenwright avoided being voted out at an extraordinary meeting this month, after introducing new chief executive Keith Wyness. He has provoked fans’ anger after selling the club’s star centre-forward, Wayne Rooney, to Manchester United for almost £30m. Everton have had their best-ever start to a Premiership season, including earning a draw against United at Old Trafford.

http://business.timesonline.co.uk/tol/business/article484382.ece

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 19

Blues wait for Fortress money Dec 21 2004 By David Prentice, Liverpool Echo EVERTON were still hoping to make an announcement today about the proposed Fortress Sports Fund investment - after the deadline for exclusive dealing expired last night. No-one from Goodison was today commenting on the situation, though the club remains in talks with Chris Samuelson, who heads the fund, and the board is still optimistic. Club officials have been verbally informed that the £12.8m investment has been transferred into the Fund, but they are waiting for documentary evidence before making a formal statement. But pointedly, the club's bankers have expressed their satisfaction at what they have seen. At Everton's AGM on December 6, Samuelson asked for a further two weeks to finalise the investment. Shareholders have since grown uneasy at the lack of public information, and secretary of the Shareholders' Association, Nick Williams, said: "Bill Kenwright promised at the club EGM that everything would be cleared up by the time of the AGM. "It came to the AGM and he said it would be another two weeks. Two weeks later there is still no firm news and it looks more and more likely these were a series of empty promises. "The players, the manager and the fans have stood up for Everton this season - we took 7,500 to Blackburn at the weekend - and it is time for Bill Kenwright to explain why he can't seem to bring Fortress to the club, or if he can, when it will happen." A report that Everton have had no official written contact with the FSF since September 28 was dismissed as irrelevant by Everton. Chairman Bill Kenwright is in daily contact with Chris Samuelson, who attended the club's recent AGM to address shareholders at Kenwright's request. The Fortress Sports Fund proposes to invest £12.8m into Everton in return for a 29.9 per cent stake in the club.

http://www.liverpoolecho.co.uk/everton-fc/everton-fc-news/2004/12/21/blues-wait-for-fortress-money100252-15000980/

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 20

Gregg; I’m not the issue in Fund farce, Apr 5 2005 By David Prentice, Liverpool Echo

EVERTON director Paul Gregg insists he is not the obstacle barring a £12.8m investment into the Blues. As revealed in Saturday's ECHO, the long-awaited Fortress Sports Fund is now finally open. Head of the fund, Chris Samuelson, confirmed "the Fund is completed and registered," but it was claimed that Paul Gregg's refusal to endorse the proposals was delaying an EGM to vote on the issue. Gregg, however, insisted today that the delays were not down to him, and that the "whole Fortress exercise has made a mockery of Everton." He said today: "As a director of Everton Football Club, I am not aware of any formal offer having been presented. "As a director I have not received any proof of funds - or that they even exist. "And as a board member I would like to know where the funds are coming from. Speaking as a director of the club I would like to know whether the people who are supposed to be investing are the kind of people that a club with the history and tradition of Everton Football Club should be dealing with. "I think we have been led down the garden path and that the whole exercise has embarrassed the club." Gregg admitted he has had serious reservations about the Fortress Sports Fund since it was first proposed last August, but that he did not want to rock the boat until the current season has ended. "The Fortress saga has dragged on for 10 months without delivery," he said. "There will be an opportunity at the end of the season to discuss the club's future, but until then I think every Evertonian's ambition should be to support David Moyes and the team and see us achieve our best league placing for years."

http://icliverpool.icnetwork.co.uk/0400evertonfc/0100news/tm_objectid=15368418%26method=full%26site id=50061-name_page.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 21

From: To: Date: 09 September 2005 08:20 morning Much as I have always embraced the concept of free speech...your constant banging on about the SFF is utterly ridiculous.... Clubs, large and small, chase such investment every day of every year.....the difference is, they are not forced to go public with the detail as Kenwright was last summer... Why? Because had he not done so, Gregg WOULD have taken control of this Club...and what would he have done? Well, you don't know...I, of course, do as I was in on the management/Board meetings. Trust me when I say this - the SFF may not have happened but Kenwright's decision to go public with news of the talks WAS wholly justified. Another thing...for your info only...Samuelsen DID colme through with both the fund and the cash....but by that point the SFF had served its purpose...Bill told him to go away... Why haven't we announced that small detail? ....because it doesn't really matter....what mattered was achieved. The belief that we are all f***ing idiots in here who couldn't run a sandwich stall is ill-founded....CL, a massively-improved performance and turnover, a place in the Deloitte's Top Twenty listing for the first time...... And still you moan about something which was designed to be used as a means to an end.......nothing more If we did what Kenwright's detractors wish us to do - produce the SFF investment on the terms we talked about 12 months ago - this Club would be (approx ) 30 per cent UNDER-VALUED...not a great idea, methinks have a good day Ian

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 22

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 23

Finally the £10.4M Truth? 14 January 2005 Michael Kenrick There was a strange exchange at the Everton AGM back in early December that few alert Evertonians missed... although far fewer ever claimed they understood. It involved a loan of £10.4M received by Everton in February 2004. So what? Well, when challenged to provide an explanation to Everton's Shareholders, this is what the Everton Chairman, Bill Kenwright, had to say: Harry Markham: "Harry Markham. On page 17, near the bottom, we have Increase in borrowings - a figure of £10.4 million." Bill Kenwright: "Yes." Harry Markham: "Could you just explain.... who we borrowed that from, under what terms was it borrowed and have we paid it back?" Bill Kenwright: "OK, that is what we've been doing really for the last 4 or 5 years and what you'll find most football clubs do, that is, bringing forward, i.e. factoring the SKY money, erm, you know, the money we get, a portion of the money we get each year – we haven't done that this year because we're in a better position and that's all it is. Erm... what was the other question ? How much did it cost us to borrow it?" Harry Markham: "Just really wanted to know — why have we borrowed 10 million from somebody?" Bill Kenwright: "No we didn't BORROW it, we've brought forward the payments we were due - we were probably due them in August and we brought them forward to January, which is..... common practice in football." Harry Markham: "So why didn't you do that last year?" Bill Kenwright: "Why DIDN'T.... I think we DID it last year, we're not doing it THIS year. I think we've done it every year 'til this year. We tried to stop it because at the end of the day you're just.... building up your borrowings and we're trying to stop that – that right Keith? OK? If anyone doesn't understand that I'll explain it again – you get several million from SKY, each year, obviously, and the minute your status for the following season is erm... in the bag, i.e. you're going to be in the Premier League, you can bring forward the money you are due, and we've done that." […then later on…] John Quinn: "Can we just make it clear about this 10.4 million pounds? You are saying that SKY owed us £10.4 million at the end of August...." Bill Kenwright: "No." John Quinn: "Well can you explain that then before I go any further?" Bill Kenwright: "I'll re-explain it again. Y ou can draw on your SKY's following season's money, when you attain your Premier League status and we just brought that money forward, but we were going to get it, so we got it earlier." John Quinn: "What money have you brought forward – where has this £10.4 million pounds come from?" Bill Kenwright: "SKY." http://www.toffeeweb.com/season/04-05/comment/viewpoint/13-truth.asp

John Quinn: "We get 10.4 million pounds a year?" Bill Kenwright: "We get a lot more than that." John Quinn: "OK, OK, thanks." Bill Kenwright: "I think you'll find most football clubs do it, because as you probably know, there's a time in the calendar when there is no money coming in, we've had all the season ticket money and we've got to pay a lot of things out, and you draw it early. But we haven't done it this year." If the loan was really against the next season's Sky money, it seems highly unlikely in the extreme that Sky would actually distribute money ahead of the time when they are contractually obligated to do so — Why would they? If they hold on to the money, they earn interest on it, improve their cash flow, etc. The truth, however, is somewhat different; It appears that the loan was provided by a third party, perhaps secured against the Sky money — which might in some twisted way be considered to represent a reasonable explanation for Bill's re-explanation of what actually happened. You have to be somewhat aware of the financial context to fully understand the significance of these events we are describing. Everton were financially in dire straits during the early months of 2004. At one point, the taxman apparently came knocking, looking for payment of unpaid VAT. Despite massive gates, built largely on Rooneymaina, most of the income was from season tickets (record sales of 22,000) and that money had all been spent. The fresh ticket sales for each game bring in relatively little cash at that stage of the season. And the new transfer windows were beginning to bite. Everton could not make quick influxes of cash — as they had done in the past — by liquidating one of the many appreciating assets that happened to be maturing nicely though the Youth Academy. Imagine, if you were getting a loan from a third party when your normal finance routes (the Bank) were effectively closed; that third party would put far less faith in Everton's survival at that stage (because the bookies had us at short odds for the drop) than they would in, say, Wayne Rooney's net worth to the Club... What if the loan was actually secured against Wayne's value (contrary to Bill's assertion)? Then the prospect of getting a third party loan would be clearly much higher. The Club had been advised that the Tribunal would agree a figure in the region of £10 million for him at the end of his contract, and he may have been insured for that amount. This would therefore be solid collateral with no risk — something which Everton's survival in the Premiership was not! Everton Shareholders have had their chance to look at the accounts: Everton borrowed £10.4 million from somebody — at a time when the Club couldn't even cash cheques, were rumoured to be hounded by the taxman for unpaid VAT, and looked increasingly likely for the drop into League Division 1. What else could corroborate this analysis? How about the Companies House Register of Charges. It explains with crystalline clarity exactly why Bill Kenwright chose to dress this loan up with that somewhat fantastical tale of an advance on Sky money: he simply could not tell Everton Shareholders the truth. •

These are the facts: The charge over this £10M loan was registered by Singer and Friedlander in February 2004, and was lifted when the loan was repaid... 14 days after Wayne Rooney signed for Manchester United.

•

This is what it means: o Despite all the protestations to the contrary, Everton had already made the decision that they would sell Wayne Rooney as early as February 2004; he was the only viable collateral they had left;

http://www.toffeeweb.com/season/04-05/comment/viewpoint/13-truth.asp

o o o

o

o

They needed to effectively put Rooney in hock in order to save the club and ensure its financial viability... at least for a few more months... (until the next fiscal crisis!) We understand from sources very close to the Rooney family that Wayne did not want to leave Everton; these circumstances meant that he was being forced out of the Club he loved. The first tranche of the Rooney transfer money had already been swallowed up by Everton's steadily increasing debts, and this happened way before there was any suggestion from the Club that Wayne Rooney would be allowed to leave Thus started the long and strangely coherent whispering campaign to discredit Wayne Rooney with his local fanbase (the whorehouse revelations; the Sun exclusive interviews; even his own teammates publically "advising" him that he needed to join a bigger club...) and other significant factors (the refusal to speak to the fans; selling up the family box at Goodison; failing to mention "Everton" as he surged to the pinnacle at Euro 2004) Perhaps the saddest aspect of this all: in order to save the Club face he had to submit a transfer request.

So Everton had already decided, some time in the spring of 2004, that they had to cash in on the bonanza that was Wayne Rooney. Remember, this was well before the Euro's and Wayne Rooney's rapid albeit temporary ascent to being a £50 million player... Indeed, the first time we at ToffeeWeb started to hear rumours of Wayne Rooney going to Manchester United was in February or March of 1004. Yes, they were rumours, but somehow they presaged the future with an indefinable element of inevitability. If you took off the blue-tinted specs, you just knew it was really going to happen. And then he broke a bone in his foot. You can just imagine the sense of panic that must have gripped Bill Kenwright and Michael Dunford. It even makes you wonder if this was the issue that so rapidly made Trevor Birch change his mind about the real challenge of sipping from on the poisoned chalice of CEO at Everton... This sorry, sordid story confirms beyond all doubt that Everton fans and shareholders have been lied to. Systematically and repeatedly. When will it ever end?

http://www.toffeeweb.com/season/04-05/comment/viewpoint/13-truth.asp

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 24

EVERTON FOOTBALL CLUB COMPANY LIMITED ANNUAL REPORT AND ACCOUNTS 2007

CONTENTS

DIRECTORS AND ADVISORS

Directors and Advisors

03

Notice of the AGM

04

Chairman’s Statement

05

Financial Review

06

Youth Academy

07

Sales and Marketing

08

Communications

09

Everton In The Community

10

Directors’ Report

11

Report of the Independent Auditors

12

Consolidated Profit and Loss Account

13

Historical Cost Profits and Losses

14

Group Balance Sheet

15

Company Balance Sheet

16

Consolidated Cash Flow Statement

17

Notes to the Accounts

18

Results and Attendances 2006/07

30

Final League Placings 2006/07

31

Fixtures 2007/08

31

Honours List

32

ANNUAL REPORT AND ACCOUNTS 2007

02

Directors W Kenwright CBE (Chairman) J V Woods (Deputy Chairman) K Wyness R I Earl Chief Executive K Wyness Company Secretary M J Evans Registered Office Goodison Park Liverpool L4 4EL Auditors Deloitte & Touche LLP Liverpool Bankers Barclays Bank plc Liverpool Registrars Capita IRG The Registry 34 Beckenham Road Beckenham Kent BR3 4TU

03

NOTICE OF THE AGM

CHAIRMAN’S STATEMENT

Notice is hereby given that the one hundred and twenty eighth Annual General Meeting of The Everton Football Club Company Limited (The Company) will be held in the Alex Young Suite, Goodison Park, Liverpool, L4 4EL on the 4th December 2007 at 7pm for the purpose of considering the following ordinary business. 1. To receive the Directors’ Report and Financial Statements for the year ended 31st May 2007. 2. To re-appoint Deloitte & Touche LLP as Auditors to the Company and to authorise the Directors to fix their remuneration. 3. To re-elect a Director – in accordance with the provisions of Article 18.2, Mr J V Woods retires by rotation and being eligible offers himself for re-election. 4. To elect a Director - R I Earl having been coopted to the Board on the 18th June 2007, be re-appointed to the Board. 5. To transact any other business which may be transacted at the Annual General Meeting of the Company. By order of the Board M J EVANS Company Secretary Goodison Park Liverpool L4 4EL Date: 1st November 2007

Notes A member entitled to attend and vote at the above meeting may appoint one or more proxies to attend, and on a poll, to vote in his/her place. A proxy need not be a member of the Company.

Tumultuous years have been something of the norm during Everton’s long and rich history. But there is little doubt that, even in the context of this great Club, the last 12 months have been incredibly eventful and emotive.

To be valid, a duly executed instrument of proxy must be lodged at the Registered Office of the Company at least 48 hours before the time appointed for holding the meeting.

On the field, the emotions evoked have mainly been ones of exhilaration. It fills me with great pride that, after the bitter disappointment of our premature exit from Europe in 2005, the manager and players demonstrated great resolve and consistency to secure a sixth place finish in May, and of course, a return to the European stage.

The stock transfer books of the Company will be closed until 5th December 2007. Information to Shareholders Shares in Everton Football Club Company Limited are “off-market”. If you wish to buy or sell shares in the Club you should, in the first instance, contact your own stockbroker. If they decline to act “off-market” you can then deal in Everton Football Club Company Limited shares through Blankstone Sington Limited, 91 Duke Street, Liverpool L1 5AA. Telephone no. 0151 707 1707, contact name Neil S Blankstone or Neil Turner, who have indicated they will be happy to deal with the transfer of Everton Football Club Company Limited shares “off-market”. If you require any information in connection with share matters then in the first instance please contact our Registrar, Capita IRG, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. Our Registrars or the stockbroker shown above will be able to advise any shareholder of the price at which Everton shares are being traded.

David has, as always, been fully supported by myself and the Board of directors – something I have always stressed was essential in order to build on the impressive foundations that have been put in place during the last six years. In each of the last two seasons we have found the funds to exceed our previous transfer record, with the signing of Andrew Johnson for £8.6m in June 2006 followed in August this year by the £11.25m acquisition of Ayegbeni Yakubu. That level of financial investment in the playing staff has affected the Club’s profits. But the impact on the finances has been restricted to a minimum thanks to careful fiscal management at the Club. A glance at our squad list and our list of senior internationals provides evidence of the clear progress being made. But it is not just in terms of playing staff that we have been able to make major advancements. Everton can now boast one of the most technically advanced training grounds in football, with Finch Farm now open to both the senior squad and the Everton Academy. It is a facility of which we can all be proud and, just as Bellefield was ground-breaking when it was redeveloped in the glorious summer of 66, Finch Farm underlines the high standards expected of Everton. At last year’s AGM I made a pledge to my fellow shareholders that a formal ballot would take place concerning the possibility of a move to a new ground development in Kirkby. That ballot, organised and conducted by the Electoral Reform Society, took place in August. In excess of 36,000 supporters were eligible to take part in the vote. A majority of 59.27 per cent of those fans who submitted a ballot paper voted in favour of the move. The ballot obviously proved a hugely emotional and soul searching time for Evertonians – just as I knew it would.

ANNUAL REPORT AND ACCOUNTS 2007

04

But a democratic process was the only way we wanted to proceed in what everyone at Everton felt was the most important decision we would have to take. Leaving the beautiful old lady that is Goodison will be akin to bidding farewell to a cherished family member, but our future progress will be best served at a new home. But we will never forget our heritage and our history – a history that can now be preserved for posterity thanks to the successful work carried out by the Everton Collection Charitable Trust in securing the David France Collection. David’s unparalleled collection will now be combined with Everton’s own impressive array of historical memorabilia to be housed in the Liverpool Records Office from early 2008 so that future generations will have the opportunity to immerse themselves in the deep well of Everton history. Alan Ball provided outstanding backing and support to the Everton Collection Charitable Trust’s work to secure the funding required. It is heartbreaking that one of our closest friends and greatest servants will not have the opportunity to visit the Collection. Bally’s untimely death in April at the age of just 61 was devastating. I feel privileged to have been able to call Alan a close friend. But such was his impact on this Club that he was, quite rightly, regarded by all Evertonians as their friend – his loss was felt throughout football but nowhere more so than at Goodison. The image of the little, flame-haired, white booted firebrand gliding across the Goodison turf will be permanently etched on the memories of all who were fortunate enough to have witnessed him in his pomp – myself included. In June 2007 the Club welcomed Robert Earl to the Board. I’m sure that Robert’s extraordinary entrepreneurial abilities and business acumen will compliment the existing strength of the Board in running and shaping the future of the Club. I am proud to be Chairman of what I believe to be the greatest club in football and, as ever, all I can promise is that I will continue to work tirelessly for that privilege. Bill Kenwright

05

FINANCIAL REVIEW

The increased investment in the playing squad, non participation in European football in the 2006/07 season and the outsourcing of the merchandising and catering operations at the start of the financial year are all reflected in the results for the year. Turnover for the year of £51.4m (2006: £58.1m) reflects the outsourcing of the merchandising and catering operations where only the commissions received from the subcontractors are included in the turnover figure. If these activities were still operated by the Club, reported turnover would have been £58.1m, consistent with the prior year. Gate receipts at £17.1m and sponsorship and advertising at £4.6m showed a reduction of £1.0m and £0.6m respectively, both as a result of there being no European football in the 2006/07 season compared with the Champions League and UEFA Cup matches in 2005/06. Turnover from broadcasting increased £1.1m to £27.5m, reflecting the improved finishing position of sixth in the Premier League. The Club’s annual wage bill as a proportion of turnover is 75%, however if the merchandising and catering operations had not been outsourced the wage bill as a proportion of turnover would have been 66% (2006: 64%). This increase arises partly from the significant additional investment in the playing squad during the year. This investment was made to remain competitive in the Premier League and contributed to the successful sixth place finish in the league and the achievement of UEFA Cup football for the 2007/08 season. The total wage bill increased to £38.4m (2006: £37.0m) and we will continue to closely monitor this cost and take appropriate action as required. In addition to the increased wage costs, significant maintenance costs of over £1 million were incurred in relation to the Goodison Park stadium and the training ground. However, overall operating expenses (excluding amortisation of players’ registrations) decreased to £51.9m (2006: £55.1m) due to the reduced costs from outsourcing the merchandising and catering operations. Given the increased investment in the playing squad and the non participation in European football in the 2006/07 season, we are pleased

YOUTH ACADEMY

to report that we have recorded only a small operating loss before player trading of £0.5m (2006: profit of £3.1m). The inclusion of the amortisation of players’ registrations of £10.4m (2006: £11.4m) means that in the current year we are reporting an operating loss of £10.9m (2006: £8.4m). In terms of player trading we recorded a profit of £4.0m (2006: loss of £0.4m) on disposal of players’ registrations, principally arising from the sale of Kevin Kilbane to Wigan Athletic and additional profits of £2.0m from the sale of Wayne Rooney to Manchester United. We also registered a profit of £0.3m (2006: £0.2m) from the disposal of tangible fixed assets. When we incorporate the annual interest charge of £2.9m (2006: £2.5m), principally arising from the servicing of the securitised debt and the bank overdraft, as well as interest receivable, the accounts show a pre tax loss of £9.4m (2006: £10.8m). Borrowings for the year have increased slightly to £29.2m (2006: £28.0m) reflecting the increased investment in the playing squad in terms of both transfer fees and player wage costs. However, £24.0m (2006: £24.8m) is not due for repayment for more than five years. The net debt position now stands at £26.4m (2006: £21.8m).

The Board recognise there are risks which affect the Group and have sought to minimise those risks. Our cost base, in common with other football clubs, is relatively fixed in the short term, hence unfavourable movements in revenue, including those arising from below budget on pitch performance, can lead to significant variation in profits. It is the aim of the Board to maximise the flexibility of the cost base to deal with unexpected revenue reductions. The Group enters into a number of transactions, relating mainly to player transfers, which create exposure to movements in foreign exchange. The Group monitors this foreign exchange exposure on a continuous basis and will seek to hedge any significant exposure in its currency receivables and payables. The Group’s policy is to reduce as far as possible the interest risk by entering into fixed interest rate borrowings when appropriate. The Group also addresses industry risks through the attendance and participation of Club management at Premier League meetings, where risks and issues affecting Premier League clubs are discussed with representatives of other Premier League clubs, with a view to mitigating any such identified risks.

The last 12 months has been one of significant change for the Everton Academy. There is no doubt that the biggest single event has been the transition from the former base at Netherton to the new cutting edge facility at Finch Farm that is now home to the senior squad and the Academy.

the top scorer in pre-season and continued to impress, netting four goals in the campaign and accumulating 23 appearances in total – albeit many as a substitute. The Academy takes pride in the fact that, in 2006/07, we extended our record to a sixth consecutive season of seeing at least one player make a senior first team debut.

Academy Manager Ray Hall and his team worked closely with the architects and builders throughout the year to ensure Finch Farm will offer unrivalled facilities for the youngsters eager to develop into the next generation of Everton stars. But whilst there has been a great deal of focus on technical advancements and ensuring an even brighter future for the Academy, that has not proved a distraction from the key aim – bringing through players capable of making the grade in the Everton first team.

In 2006/07 that honour fell to defender Mark Hughes, who earned his first senior start in the Carling Cup win at Peterborough and also made an appearance in the Premier League victory over West Ham United at Goodison in December. Mark ultimately moved on to a blossoming career at Northampton Town – and has become one of the multitude of players in the four divisions to have emerged as a product of the Everton Academy.

At the start of the 2006/07 season Victor Anichebe and James Vaughan, for varying reasons, had much to prove. For James, after a succession of long-term injury problems, 2006/07 was a season in which he had to justify the faith shown in him by the management team and the Academy staff. He did that impressively, forcing his way into the first team plans, scoring four goals - including three from five outings at the end of the season to help secure UEFA Cup football. If the season ended well for James, it certainly got off to a flyer for Victor. He was

There are currently eight Everton-produced players involved in the Premier League, six in The Championship, ten in League One and eight in League Two. The Everton Academy, then, offers a clear route or pathway to the top provided the players have the talent to succeed. The 2007/08 season has started superbly for the Academy’s Under-18s, many of whom were part of the squad that endured a tough campaign last year. The lessons heeded from the early exit in the FA Youth Cup to Millwall and the lowly finish in the FA Premier Academy League are clearly benefiting the players this term.

At time of writing, our youngsters are second in the table with an impressive succession of victories under their belts. Many of those youngsters have earned international honours in the last year and they are listed below. They are also enjoying their new training environment at Finch Farm – a development that Ray Hall believes provides a statement of intent concerning the Academy’s goals and ambitions. He explains: “Although creating a positive environment at our Academy may have little to do with bricks and mortar, the move to Finch Farm means that the best players are now being developed by the best people in the best facilities available.” “In the past our competitors have used our lack of quality facilities as a stick to beat us with. We have now come through that period and I for one will not miss working out of temporary Portakabins. We are now faced with an exciting new era. The place, with its cutting edge design, now befits the people, the programme and the pathway and hopefully will assist in our Academy bringing through more home grown youngsters.” International Honours 2007/08 Full International Victor Anichebe Nigeria Under 21 Bjarni Vidarsson James Vaughan Darren Dennehy Aidan Downes Ryan Harpur

As a result of the above trading including transfer activity the balance sheet now shows a net liability position of £19.8m (2006: £10.4m). However, it should be noted that the balance sheet contains £9.4m of deferred income in relation to advance season ticket and lounge membership sales which will be released to the profit and loss as games are played during the season hence will not require repayment. In addition, £24.0m of borrowings are not repayable for more than five years and the balance sheet attributes no value in respect of home grown players such as Tony Hibbert, Leon Osman, James Vaughan and Victor Anichebe.

Iceland England Rep. of Ireland Rep. of Ireland Northern Ireland (Standby)

Under 20 Michael McEntegart Australia

In terms of cash flows, the cash inflow from operating activities was £2.7m (2006: £13.0m). After net payments for interest of £2.7m, net capital expenditure of £4.6m and net loan repayments of £0.2m, the decrease in cash for the year was £4.7m (2006: decrease of £5.3m).

ANNUAL REPORT AND ACCOUNTS 2007

06

Under 19 Lars Stubhaug

Norway

Under 18 Eunan O’Kane

Northern Ireland

Under 17 Jack Rodwell George Krenn Nathan Craig Karl Sheppard

England Austria Wales Rep. of Ireland

Under 16 James Wallace Gerard Kinsella Lee McArdle Connor Roberts Jose Baxter Adam Davies

Rep. of Ireland Rep. of Ireland Wales Wales England England 07

SALES AND MARKETING

Filling the Stadium The Club continued to focus on filling the stadium on matchdays. In 2006/07, the average attendance for all fixtures was 35,476, which represents a 2.3% rise on 2005/06. Using over 39,500 as the benchmark, Goodison was effectively full on four occasions with total attendances supported by a successful early season ticket offer and regular offers via Everton In The Community into local schools. The Club secured over 2,500 new season ticket holders (many of whom were younger than the average age) and, over the course of the season, over 10,000 school children visited Goodison via community and promotional activities - many as part of the Young Everton initiative which commenced in January 2007 with ‘kids for free’ at the Reading fixture. The quality and accesibility of our database is the key to underpinning our marketing initiatives to fill Goodison. However, data management, analysis and use has proved to be challenging largely due to cumbersome systems. In order to improve this aspect of the business, the Club signed up to a major overhaul of its customer relationship management processes towards the end of the financial year. We are confident that fans will notice continued improvements in direct communication throughout 2007/08. The Club is also committed to improving ticket

COMMUNICATIONS

buying for fans. Once again, new systems were introduced towards the end of the financial year with this target in mind. A significant investment was made in staff and communications equipment to ensure information is readily to hand and it’s as easy as possible to buy tickets. A new Fan Centre has been introduced that is expected to be fully operational by early 2008. Lounge occupancies were maintained in 2006/07. Long established and valuable executive client-bases mean that most lounges at Goodison Park sell quickly. Strong sales were also underpinned by the service provided by Sodexho-Prestige. The Club believes food provision and service levels have improved noticeably in 2006/07. However, the popularity of the Marquee is variable. Filling the Marquee, game after game, has not been achieved and towards the end of 2006/07, the Club overhauled its corporate sales force.

product range to all our fans. Likewise, the deal significantly improves the commercial out-turn of our retail business. Work commenced in 2006/07 on extending the Club’s main sponsor deal with Chang. Both the Club and ThaiBev have been exploring terms to renew the partnership for a second time, testimony to the hard work on both sides devoted to making the deal a success. ThaiBev was particularly pleased that Chang was made available on draught throughout Goodison Park from the start of 2006/07. The Club continues to improve the range and quality of partner products and services being offered to fans. Ensuring at all times that products are tried, tested and represent good value, the Club has added to the existing financial services products with loans and car finance provided by Choice Finance and has added further services via BT Broadband and Carphone Warehouse. All the above deals have generated new revenue for the Club.

Partnerships Everton commenced its new exclusive, three year retail arrangement with JJB in 2006/07. The Club had worked hard to improve retail performance in 2005/06 but failed to generate satisfactory returns. JJB’s expertise and scale offers an improved retail service and

ANNUAL REPORT AND ACCOUNTS 2007

08

Once again it has been a period of constant change and improvement within the Communications department.   The team, headed by Mark Rowan, ensured that Everton were at the forefront of the latest developments in broadcasting and new media.   We have always prided ourselves as being innovators in the online space and our efforts were justifiably rewarded when the Club’s official website, evertonfc.com, was named the number one in the 2007 Premier League fans survey. To receive any award is pleasing but when your core audience votes for that award, then it is especially rewarding.   The website is the most pivotal marketing and communications tool at our disposal and we are happy to report that we are seeing traffic consistently improve. Indeed, significant changes made in the first half of 2007 resulted in a 22% increase on our previous record of unique supporters visiting in a single calendar month (620,000 August 2007).   We are continuing to introduce new innovations all the time and in the coming months Everton will become one of the first clubs to launch its own social networking site along with one of the most comprehensive Everton statistics sites on the web.   Our narrowband offering has been superbly complemented with the now successful evertonTV. This service has, in the past 12 months grown in stature, producing more content than ever before and streaming live the majority of our pre-season campaigns. As a direct result of this commitment to quality content we have witnessed the subscription numbers grow by over 320% since its June 2006 launch.   Another area of our Communications business that has also seen growth in the previous 12month period is the Everton Mobile brand. Now fully established, we are ready to exploit its potential as the technology improves and the demand from the consumer becomes greater.   Most of the work we have referred to is very much focused here in the UK but we have also been extremely active in international markets.   Our international TV programme is now firmly established in over 30 territories as a result of our much sought after distribution deal with Fox Sports International and work is continuing on breaking into new markets around the world. This has already happened in China where we

have launched the Official Everton Chinese website which will potentially bring coverage of Everton and its matches direct to the homes of millions of people.   Supplementing our international progress was the launch of the evertonway.com. This product is a unique player and coaching development programme that we feel is the first of its kind in the international marketplace.   Based on the methods and practices of our own Academy coaches, this new and exciting tool allows players and coaches to experience the expertise and prestige of Everton at the touch of a button and understand how Premier League players are prepared and moulded.   Already we have enjoyed some early successes and through a number of key strategic partnerships in North America and the Far East we are expecting to grow the subscription base further in the coming months.   Finally, the department has also been active in the past year working with the local, national and international media, enhancing the existing local broadcasting arrangements as we strive to continue to bolster the Club’s image to the footballing and business public.

09

EVERTON IN THE COMMUNITY

DIRECTORS’ REPORT

Everton In The Community (EITC) continues to grow and provide even more opportunities to both the immediate community and international communities. EITC continues to be recognised locally and internationally as an example of an innovative and forward thinking business and, despite significant growth, remains true to its core objectives – with football the most fundamental. Connecting with Evertonians young and old is vital, as it’s the fans that continue to drive many of our traditional core programmes and also acts as the driving force behind initiatives of specific importance that have been launched and developed in the last 12 months. Healthy School Bus Everton In The Community has teamed up with Liverpool Healthy Schools and Arriva to convert a bus into a mobile classroom. The bus has visited almost all primary schools during 2006/07 focusing on children aged seven to eight. Eight thousand children have already benefited from the experience of working with qualified staff to learn about key elements of health and nutrition and physical activity. From September 2007 the bus will be back re-visiting the same children to evaluate and reinforce the healthy message. So successful has the original bus become that a second bus is being built in order to provide more opportunities for a wider audience. SHAPE Everton In The Community is aiming to attract more and more young people under the umbrella of “Young Everton” to support the club and help build a long-term future for the Club. The SHAPE programme has been designed to have a positive effect on the safety of all young people through the setting up of diverse activities both after school and at weekends. This programme also helps to promote the health of young people through high quality physical activity and education programmes delivered by the partners involved in the programme. The SHAPE programme aims to provide employment opportunities for young people in sport, education and the leisure industry. The setting up of activities in non-curriculum time is also a main focus in extending the prospects for young people to gain extra training and employment whilst giving the participants the chance to experience a different environment and extended opportunities in other sporting activities. SHAPE has already engaged 8,000 key stage 1 pupils.

Social Inclusion As society changes Everton In The Community has to be conscious of the changes within communities, both locally and regionally. EITC has teamed up with Liverpool Football Club to deliver a Premier League initiative known as “Kickz”.

The Directors present their report and the audited financial statements of the Group and Company for the year ended 31st May 2007.

Kickz is a highly distinctive programme tackling anti-social behaviour in our city. It embraces the aspirations of the diverse partnership that lies behind it - a partnership that links broad government policy initiatives such as the “Every Child Matters” and “Respect” programmes with local policing strategies on the basis of football’s intrinsic appeal to many young people.

Review of Business The results of the year’s trading are shown on page 13 of the financial statements. A detailed review of the Group’s business, an indication of the likely future developments of its business and a description of principal, key performance indicators including wages to turnover ratio and operating profit before player trading, risks and uncertainties facing the Group are contained in the Chairman’s Statement and the functional reviews set out on pages 5 to 10.

Football connects young people and enables them to:

Dividend and Transfers from Reserves The loss for the year amounted to £9.4m (2006 - £10.8m), which has been transferred from reserves. The Directors do not recommend the payment of a dividend (2006 – £nil).

Principal Activity The principal activity of the Group continues to be that of a professional football club. The Group has continued to develop the Everton brand and associated media rights.

• Work on their talents • Look after themselves • Help others and give something back

Post Balance Sheet Events A description of the material aspects of these events can be found in note 25 to the accounts.

Everton In The Community/Kickz has engaged 7,500 participants over three evenings a week. Disability Everton In The Community continues to grow its disability programme and recognises the current change within the disability designation. The emergence and importance of recognising mental health and the associated barriers has been a major area of focus for the charity’s disability team. Developing new partners and growing existing long-standing partnerships is fundamental to sustainable programming.

Directors The Directors in office during the year and their beneficial interests in the share capital of the Company at the end of the financial year, and of the previous financial year, (or date of appointment where later) were as follows: Number of Shares 31st May 2007 W Kenwright CBE

8,754

8,754

J V Woods

6,622

6,622

2

-

8,146

-

K Wyness

EITC is now working closely with officials from the city of Shanghai in order to support its quest to emulate the success of the charity’s own disability programme. This partnership will help EITC dramatically increase the number of disabled groups it engages with. Currently, that figure stands at 2,500 groups across Merseyside, regionally and internationally. By the end of 2007 EITC will have engaged with more than 100,000 people worldwide. All of Everton In The Community’s growth and success is made possible by a dedicated staff that now numbers in excess of 40. Another vital component, however, is the charity’s growing relationships with partners who, through various sources, give all those people that come into contact with EITC the opportunity to take advantage of new exciting and challenging opportunities.

ANNUAL REPORT AND ACCOUNTS 2007

10

31st May 2006

R I Earl (Appointed 18/06/07) P R Gregg (Resigned 20/10/06)

-

3,779

A Gregg (Resigned 20/10/06)

-

4,075

In accordance with the Articles of Association, Mr J V Woods retires by rotation and being eligible offers himself for re-election. Directors’ Responsibilities The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The financial statements are required by law to give a true and fair view of the state of affairs of the Company and of the Group and of the profit or loss of the Group for that period.

In preparing these financial statements, the Directors are required to: • select suitable accounting policies and then apply them consistently; • make judgments and estimates that are reasonable and prudent; • state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Employment Policies The Group’s employment policies are designed to retain and motivate staff at all levels. Staff are, within the bounds of commercial confidentiality, kept informed of matters that affect the current performance and future prospects of the Group and are of interest to them as employees. The Group operates an equal opportunities policy to ensure that no member of staff or job applicant receives less favourable treatment on the grounds of gender, race, ethnic origin, age or disability. Every possible step will be taken to ensure that individuals are treated equally and fairly and that decisions on recruitment, selection, training, promotion and career management are based solely on objective and jobrelated criteria. When recruiting and retaining disabled employees, the Group will be guided by the principles and duties set out in the Disability Discrimination Act and its associated Codes of Practice. Auditors Each of the persons who is a Director at the date of approval of this report confirms that: • so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware; and • the Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of s234ZA of the Companies Act 1985. Deloitte & Touche LLP have expressed their willingness to continue in office as auditors and a resolution to reappoint them will be proposed at the forthcoming Annual General Meeting. Approved by the Board on 1st November 2007 and signed on its behalf by M J Evans, Company Secretary

11

Independent Auditors’ Report to the Members of Everton Football Club Company Limited

Consolidated Profit and Loss Account for the year ended 31st May 2007

We have audited the financial statements of Everton Football Club Company Limited for the year ended 31 May 2007 which comprise the consolidated profit and loss account, the Group and Company balance sheet, the consolidated cash flow statement, the statement of total recognised gains and losses, the consolidated note of historic profits and losses and the related notes 1 to 27. These Group financial statements have been prepared under the accounting policies set out therein.

2007

2006

Operations excluding

This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Notes

Respective responsibilities of directors and auditors

player

Player

trading

trading

Total

Total

£’000

£’000

£’000

£’000

1,2

51,412

-

51,412

58,123

Operating expenses

3

(51,917)

(10,438)

(62,355)

(66,493)

Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

Operating loss

4

(505)

(10,438)

(10,943)

(8,370)

-

4,048

4,048

(402)

We report to you our opinion as to whether the financial statements give a true and fair view, in accordance with the relevant financial reporting framework, and are properly prepared in accordance with the Companies Act 1985. We report to you whether in our opinion the information given in the directors’ report is consistent with the financial statements. We also report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration and other transactions is not disclosed.

Profit on disposal of tangible fixed assets

263

-

263

164

(242)

(6,390)

(6,632)

(8,608)

As described in the statement of directors’ responsibilities the Company’s directors are responsible for the preparation of the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Turnover

Profit / (loss) on disposal of players’ registrations

Loss before interest and taxation

We read the directors’ report and the other information contained in the annual report for the above year as described in the contents section and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements.

Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Company’s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

Interest receivable and similar income

5

145

271

Interest payable and similar charges

6

(2,939)

(2,457)

(9,426)

(10,794)

Loss on ordinary activities before taxation Tax on loss on ordinary activities

8

(1)

-

Loss after taxation for the year deducted from reserves

20

(9,427)

(10,794)

All the above amounts derive from continuing operations. There are no recognised gains and losses for the year ended 31 May 2007 and the prior year other than as stated in the profit and loss account, accordingly no statement of total recognised gains and losses is given.

Opinion In our opinion: •

the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the group’s and the individual Company's affairs as at 31 May 2007 and of the group’s loss for the year then ended;

•

the financial statements have been properly prepared in accordance with the Companies Act 1985; and

•

the information given in the directors’ report is consistent with the financial statements.

Deloitte & Touche LLP Chartered Accountants and Registered Auditors Liverpool Date: 1st November 2007

12

13

Consolidated Note of Historical Cost Profits and Losses for the year ended 31st May 2007

Group Balance Sheet at 31st May 2007 2007

Loss on ordinary activities before taxation Difference between the historical cost depreciation charge and actual depreciation charge for the year calculated on the revalued amount

2007

2006

£’000

£’000

(9,426)

(10,794)

Notes

189

Historical cost loss on ordinary activities before taxation

(9,274)

(10,605)

Historical cost loss for the year retained after taxation

(9,275)

(10,605)

£’000

£’000

£’000

Fixed Assets Intangible Assets

152

£’000

2006

10

26,486

20,646

Tangible Assets

11

10,267

11,303

Investments

12

-

-

36,753

31,949

Current Assets Stocks

14

-

521

Debtors

15

6,958

6,577

Investments

12

2,767

2,767

-

3,413

9,725

13,278

(37,662)

(26,314)

Cash at bank and in hand

Creditors - Amounts falling due within one year

16

Net Current Liabilities Total Assets Less Current Liabilities

(27,937)

(13,036)

8,816

18,913

Creditors - Amounts falling due after more than one year

17

(28,119)

(28,524)

Provision for liabilities and charges

18

(484)

(749)

(19,787)

(10,360)

Net Liabilities Capital and Reserves Called up share capital

19

35

35

Share premium account

20

24,968

24,968

Revaluation reserve

20

3,183

3,183

Profit and loss account - deficit

20

(47,973)

(38,546)

Equity shareholders’ deficit

21

(19,787)

(10,360)

The financial statements were approved by the Board on the 1st November 2007 and signed on its behalf by W Kenwright CBE & K Wyness Directors

14

15

Company Balance Sheet at 31st May 2007

Consolidated Cash Flow Statement for the year ended 31st May 2007 2007 Notes

£’000

2006 £’000

£’000

2007 £’000

Notes

Fixed Assets Intangible Assets

Cash inflow from operating activities 10

26,486

20,646

Tangible Assets

11

3,209

3,731

Investments

12

-

-

29,695

24,377

14

-

521

Debtors

15

6,699

6,540

-

571

6,699

7,632

(53,676)

(39,789)

Cash at bank and in hand

Creditors - Amounts falling due within one year

16

Net Current Liabilities Total Assets Less Current Liabilities

Interest received

£’000 12,991

Interest paid Finance lease and hire purchase interest

126

271

(2,800)

(2,519)

(57)

(4)

Taxation

(2,731)

(2,252)

(1)

-

Capital expenditure and financial investment Purchase of intangible fixed assets Purchase of tangible fixed assets

(46,977)

(32,157)

(17,282)

(7,780)

17

(467)

(285)

Provision for liabilities and charges

18

(484)

(749)

(18,233)

(8,814)

Proceeds from the disposal of tangible fixed assets Proceeds from the disposal of intangible fixed assets

(12,432)

(15,931)

(787)

(3,881)

330

4,149

8,339

2,708

Net cash outflow from capital expenditure and financial investment Net cash outflow before financing

Capital and Reserves

(4,550)

(12,955)

(4,551)

(2,216)

-

(2,767)

Management of Liquid Resources

Called up share capital

19

35

35

Share premium account

20

24,968

24,968

Financing

Revaluation reserve

20

1,299

1,299

New loans

Profit and loss account - deficit

20

(44,535)

(35,116)

Repayment of loans

(18,233)

(8,814)

Capital element of finance lease and hire purchase payments

Equity shareholders’ deficit

£’000

2,731

Net cash outflow from returns on investments and servicing of finance

Creditors - Amounts falling due after more than one year

Net Liabilities

22a

£’000

Returns on investments and servicing of finance

Current Assets Stocks

£’000

2006

Purchase of current asset investment

500

-

(640)

(531)

(32)

195

Net cash outflow from financing

22c

(172)

(336)

Decrease in cash

22b

(4,723)

(5,319)

The financial statements were approved by the Board on the 1st November 2007 and signed on its behalf by W Kenwright CBE & K Wyness Directors

2006 Annual Report & Accounts 04

16

17

Notes to the Accounts for the year ended 31st May 2007 1 ACCOUNTING POLICIES The principle accounting policies are summarised below. They have all been applied consistently throughout the year and the preceding year. (i) Accounting Convention The financial statements are prepared under the historical cost convention as modified by the revaluation of freehold properties, plant & equipment and in accordance with applicable United Kingdom law and accounting standards. (ii) Basis of Consolidation The consolidated financial statements incorporate the financial statements of the company and all its subsidiary undertakings. The results of subsidiary undertakings acquired or disposed of during the year are included in the consolidated profit and loss account from the date of their acquisition or up until the date of their disposal. Intra-group trading is eliminated on consolidation. (iii) Turnover Turnover is stated exclusive of value added tax, and match receipts are included net of percentage payments to visiting clubs, the Premier League, the Football Association and the Football League. (iv) Tangible Fixed Assets and Depreciation Depreciation is not provided on freehold land. On properties it is provided to write off the costs or revalued amounts less estimated residual value (based on prices prevailing at the date of acquisition or revaluation) in equal annual instalments over the estimated useful economic lives of the assets which are considered to be between 10 and 40 years. No depreciation is provided on assets in the course of construction. Depreciation is charged on a straight line basis of three years for Vehicles and five years for Plant and Equipment. The group has taken advantage of the transitional provisions of Financial Reporting Standard 15 ‘Tangible fixed assets’ and retained the book amounts of certain freehold properties which were revalued prior to implementation of that standard. The properties were last revalued at 31 May 1999 and the valuations have not subsequently been updated. (v) Stocks Stocks are valued at the lower of cost and net realisable value. From the 1st June 2006 the retail operation was outsourced. (vi) Grants Grants of a capital nature are credited to deferred income and amortised to the profit and loss account on a systematic basis over the useful economic life of the asset to which they relate. (vii) a) Current Taxation Current taxation, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

2006 Annual Report & Accounts 04

(vii) b) Deferred Taxation Deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted. (viii) Intangible Fixed Assets - Players’ Registrations The cost of players’ registrations is capitalised and amortised over the period of the respective players’ contracts in accordance with Financial Reporting Standard 10 ‘Accounting for goodwill and intangible assets’. The transfer fee levy refund received during the year is credited against additions to intangible assets. (ix) Contingent Appearance Fees Where the directors consider the likelihood of a player meeting future appearance criteria laid down in the transfer agreement of the player to be probable, provision for this cost is made (see note 18). If the likelihood of meeting these criteria is merely possible not probable, then no provision is made but the potential obligations are disclosed as contingent liabilities (see note 23).

Notes to the Accounts for the year ended 31st May 2007 2007

2006

2 TURNOVER

£’000

£’000

Gate receipts and programme sales

17,090

18,128

Broadcasting

27,462

26,349

Sponsorship and advertising

4,600

5,240

Merchandising and catering

1,082

7,623

Other commercial activities

1,178

783

51,412

58,123

The merchandising and catering operations were outsourced on 1st June 2006 and 10th July 2006 respectively. Consequently this significantly impacts the reported turnover figures for the year ended 31st May 2007 and future years, since under the new arrangements reported turnover is based on net amounts received from the sub-contractors. Had the merchandising and catering operations not been outsourced, the reported turnover for merchandising and catering would have been £7,726,000 and total reported turnover would have been £58,056,000.

2007

2006

3 OPERATING EXPENSES

£’000

£’000

(x) Signing-on Fees and Loyalty Bonuses Signing-on fees represent a normal part of the employment cost of the player and as such are charged to the profit and loss account in the period in which the payment is made, except in the circumstances of a player disposal. In that case any remaining signing-on fees due are allocated in full against profit or loss on disposal of players’ registrations in the year in which the player disposal is made. Those installments due in the future on continued service are not provided for but are noted as contingent liabilities (see note 23).

Amortisation of players’ registrations (note 10)

10,438

11,421

Staff costs (note 7)

38,427

36,966

Depreciation (note 11)

1,796

1,690

Other operating costs

11,694

16,416

62,355

66,493

2007

2006

(xi) Investments Investments held as fixed assets are stated at cost less any provision for impairment.

4 OPERATING LOSS

(xii) Lease Rentals Where the company enters into a lease which entails substantially taking all the risks and rewards of ownership of an asset the lease is treated as a finance lease. Assets acquired under finance leases are capitalised and depreciated over the shorter of their lease term or their estimated useful lives. The interest element of the rental obligations is charged to the profit and loss account over the period of the lease. Operating lease rentals are charged to the profit and loss account on a straight line basis over the period of the lease.

Depreciation - Other

£’000

£’000

751

691

1,045

999

(98)

(98)

189

184

43

60

706

225

35

39

169

201

The Operating Loss is stated after charging / (crediting) Depreciation - Property

(xiii) Foreign Currency Transactions Transactions denominated in foreign currencies are translated into sterling at the rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. All exchange differences are dealt with through the profit and loss account.

18

Grants released Operating lease rentals Motor vehicles Office equipment Land and properties Auditors’ remuneration For audit (including Company of £30,000; 2006; £28,000) For other services

19

2006 Annual Report & Accounts 05

Notes to the Accounts for the year ended 31st May 2007

Notes to the Accounts for the year ended 31st May 2007 2007

5 INTEREST RECEIVABLE AND SIMILAR INCOME Bank Interest Receivable

2006

£’000

£’000

145

271

2007 6 INTEREST PAYABLE & SIMILAR CHARGES On bank overdrafts On finance leases and hire purchase agreements On other loans

8 TAXATION ON LOSS ON ORDINARY ACTIVITIES a) Factors affecting tax charge for the current year The tax assessed for the period is disproportionate to that resulting from applying the standard rate of corporation tax in the UK: 30% (2006: 30%)

2007

2006

7 PARTICULARS OF EMPLOYEES

£’000

£’000

(9,426)

(10,794)

Tax on loss on ordinary activities at the standard rate

2,828

3,238

Expenses not deductible for tax purposes

(699)

(804)

Capital allowances in excess of depreciation

(460)

(413)

23

-

(1,691)

(2,021)

1

-

£’000

£’000

606

97

Loss on ordinary activities before taxation

57

49

2,276

2,311

2,939

2,457

Other short term timing differences

Included in interest on other loans is interest of £2,165,000 (2006: £2,208,000) on loans not wholly repayable in full within five years.

2007

2006

Number

Number

Carry forward of tax losses Current tax charge for period

b) Factors that may affect the future tax charge A deferred tax asset of £17.6m (2006: £16.0m) has not been recognised. The asset will be recovered when relevant profits are available against which the timing differences concerned will be offset.

The average weekly number of employees during the year was as follows: Playing, training and management

73

72

Youth Academy

25

23

1

1

Marketing and Media

28

29

Management and Administration

43

49

Maintenance, Security, Pitch and Ground Safety

30

30

10 INTANGIBLE FIXED ASSETS - GROUP AND COMPANY

2

55

Cost

202

259

Football in the Community

Catering and Retail

9 COMPANY PROFIT AND LOSS ACCOUNT The Company has taken advantage of Section 230 of the Companies Act 1985 and has not presented its own profit and loss account. The Company’s loss for the year was £9,419,000 (2006: £10,784,000).

Total

In addition, the Group employed an average of 425 temporary staff on matchdays (2006: 597).

2007

2006

2006

£’000

At 1st June 2006

53,543

Additions in year

19,549

Disposals in year

(12,181)

At 31st May 2007

60,911

Amortisation Aggregate payroll costs for the above employees were as follows:

£’000

£’000

Wages and salaries

34,195

32,778

Social security costs

3,902

3,683

Other pension costs

330

505

38,427

36,966

2007

2006

Directors’ Remuneration The Directors of the Company received the following remunerations: Emoluments (excluding pension contributions) Aggregate payments to pension schemes

£’000

£’000

395

440

31

26

426

466

At 1st June 2006

32,897

Provided during the year

10,438

Eliminated on disposals

(8,910)

At 31st May 2007

34,425

Net Book Value At 31st May 2007

26,486

At 31st May 2006

20,646

The above amounts include no values in respect of ‘home grown’ players.

Highest paid Director’s remuneration: Emoluments

2006 Annual Report & Accounts 04

20

21

Notes to the Accounts for the year ended 31st May 2007

Notes to the Accounts for the year ended 31st May 2007 11 TANGIBLE FIXED ASSETS (CONTINUED)

11. TANGIBLE FIXED ASSETS Group

Properties

Plant and

Vehicles

The Club’s premises at Goodison Park, the equipment and contents (but not including computer equipment or motor vehicles), together with an immaterial amount of residential properties were revalued at £13,097,550 by John Foord & Company as at 31st May 1999.

Total

equipment The freehold buildings at Goodison Park were valued at depreciated replacement cost, and the land at open market value for its existing use. The residential properties have been revalued at open market value basis with the benefit of full vacant possession or subject to and with the benefit of the various leases/agreements as appropriate. £’000

£’000

£’000

£’000

The Directors consider that the value of the remaining properties as at 31st May 2007, not sold since the year end, is not materially different to the valuation carried out as at 31st May 1999, based on existing use.

13,073

5,846

100

19,019

Additions in the year

65

757

5

827

If the freehold properties had not been revalued regularly since 1983 they would have been included at the following amounts on the basis previously appertaining:

Disposals in the year

(332)

-

-

(332)

12,806

6,603

105

19,514

Cost or valuation At 1st June 2006

At 31st May 2007

2007

At 1st June 2006

Aggregate depreciation

4,348

3,274

94

7,716

751

1,040

5

1,796

(265)

-

-

(265)

12 INVESTMENTS

4,834

4,314

99

9,247

FIXED ASSET INVESTMENTS Group The Group has no fixed asset investments (2006 - none).

At 31st May 2007

7,972

2,289

6

10,267

At 31st May 2006

8,725

2,572

6

11,303

Provided during the year On disposals At 31st May 2007

Properties

Plant and

Vehicles

Company

£’000

Total

(3,434)

(2,835)

6,228

6,827

£’000

Total

Cost

£

£

As at 1st June 2006 and 31st May 2007

4

4

4

4

Net book value

£’000

£’000 Details of the principal operating subsidiaries as at 31st May 2007, all registered in England and Wales, were as follows:-

Cost or valuation 1,973

5,846

100

7,919

Additions in the year

65

757

5

827

Disposals in the year

(332)

-

-

(332)

At 31st May 2007

1,706

6,603

105

8,414

At 1st June 2006

820

3,274

94

4,188

Provided during the year

237

1,040

5

1,282

(265)

-

-

(265)

792

4,314

99

5,205

At 31st May 2007

914

2,289

6

3,209

At 31st May 2006

1,153

2,572

6

3,731

Name of Company

% owned

Nature of business

Goodison Park Stadium Limited

100

Provision of football entertainment facilities

Everton Investments Limited

100

Issuer of loan notes

CURRENT ASSET INVESTMENTS Group Current asset investments consist of three month treasury deposits of £2,767,000 (2006: £2,767,000)

Depreciation

At 31st May 2007

9,662

Subsidiary

As at 1st June 2006 and 31st May 2007

On disposals

9,662

undertakings

equipment

At 1st June 2006

£’000

Net book value

Net book value

Company

£’000 Cost

Depreciation

2006

Net book value

22

23

Notes to the Accounts for the year ended 31st May 2007

Notes to the Accounts for the year ended 31st May 2007 2007

13 LEASE COMMITMENTS

2006

£’000

Group

£’000

17 CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

The Group and Company has operating lease commitments to meet during the next year in respect of motor vehicles, office equipment and land and property leases, as follows: Expiring within one year Expiring between two and five years Expiring in more than five years



















61

149

Other loans (see borrowings below)

373

296

Obligations under finance lease and hire purchase agreements

1,250

678

Accruals and deferred income

1,684

1,123

2006

2007

2006

£’000

£’000

£’000

£’000

26,824

27,041

333

-

113

204

113

204

1,182

1,279

21

81

28,119

28,524

467

285

Group 2007

BORROWINGS

Company 2006

2007

2006 Group

14 STOCKS

2007

Company

Bank Overdraft

Finance leases and hire purchase

Other loans

Total

£’000

£’000

£’000

£’000

Goods for resale

-

511

-

511

2007

2006

2007

2006

2007

2006

2007

2006

Maintenance stocks

-

10

-

10

£’000

£’000

£’000

£’000

£’000

£’000

£’000

£’000

-

521

-

521

1,310

-

717

573

208

149

2,235

722

Between one and two years

-

-

765

617

113

141

878

758

Between two and five years

-

-

2,556

2,156

-

63

2,556

2,219

After more than five years

-

-

23,995

24,827

-

-

23,995

24,827

Prepaid finance costs

-

-

(492)

(559)

-

-

(492)

(559)

1,310

-

27,541

27,614

321

353

29,172

27,967

Analysis of borrowings Payable by instalments:

On the 1st June 2006 the retail operation was outsourced, with the goods for resale at 31 May 2006 being sold to the subcontractors. Within one year 15 DEBTORS

Group 2007

Company 2006

2007

2006

£’000

£’000

£’000

£’000

Trade debtors

5,891

5,704

5,703

5,705

Other debtors

19

105

-

67

1,048

768

996

768

6,958

6,577

6,699

6,540

Prepayments and accrued income

Company 16 CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR

Group 2007

Company 2006

2007

2006

Bank Overdraft

Finance leases and hire purchase

Other loans

Total

2007

2006

2007

2006

2007

2006

2007

2006

£’000

£’000

£’000

£’000

£’000

£’000

£’000

£’000

3,406

-

100

-

208

149

3,714

149

£’000

£’000

£’000

£’000

Bank overdraft (secured)

1,310

-

3,406

-

Analysis of borrowings Payable by instalments:

Other loans (see note 17)

717

573

100

-

Within one year

208

149

208

149

Between one and two years

-

-

100

-

113

141

213

141

16,142

9,914

16,142

9,914

Between two and five years

-

-

233

-

-

63

233

63

-

-

22,619

21,597

3,406

-

433

-

321

353

4,160

353

4,280

3,426

5,274

4,639

-

391

-

369

15,005

11,861

5,927

3,121

37,662

26,314

53,676

39,789

Obligations under finance lease and hire purchase agreements Trade creditors Amounts due to subsidiaries Social security and other taxes Other creditors Accruals and deferred income

2006 Annual Report & Accounts 04

24

25

Notes to the Accounts for the year ended 31st May 2007

Notes to the Accounts for the year ended 31st May 2007

17 BORROWINGS (CONTINUED)

20 RESERVES

The bank overdraft is principally secured via legal charges over a number of the Company’s properties and a lightweight floating charge over all the assets and undertakings (excluding Goodison Park Stadium) of the Company. Other loans include £27,600,000 of loan notes (2006: £28,173,000) which are repayable in annual installments over a 25 year period at a fixed interest rate of 7.79%. The first payment under the agreement was made on 30th September 2002 amounting to £1,588,000 with subsequent annual payments of £2,767,000 (including interest) starting on 30th September 2003.

Share premium

Revaluation

Profit and

account

reserve

loss account

Group

£’000

£’000

£’000

Balance at 1st June 2006

24,968

3,183

(38,546)

-

-

(9,427)

24,968

3,183

(47,973)

The notes will be repaid in a securitisation agreement serviced by future season ticket sales and matchday ticket sales. The costs incurred in raising the finance, amounting to £710,000, have been offset against the original £30,000,000 loan, and are contained within prepaid finance costs and charged to the profit and loss in line with the interest charge over a period of 25 years.

Loss for the year

18 PROVISION FOR LIABILITIES AND CHARGES

Company

£’000

£’000

£’000

Balance at 1st June 2006

24,968

1,299

(35,116)

-

-

(9,419)

24,968

1,299

(44,535)

Group and Company Pensions

Contingent

(note 24)

appearance

Total

Loss for the year

fees (note 1) £’000

£’000

£’000

At 1st June 2006

100

649

749

Utilised in the year

(36)

(439)

(475)

-

210

210

64

420

484

Provided in the year At 31st May 2007

Balance at 31st May 2007

21 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ DEFICIT Group

2007

2007

2006

£’000

£’000

(9,427)

(10,794)

Opening shareholders’ (deficit) / funds

(10,360)

434

Closing shareholders’ deficit

(19,787)

(10,360)

Loss for the year and net reduction in shareholders’ funds

There are no amounts provided for deferred tax at 31st May 2007 or 31st May 2006.

19 EQUITY SHARE CAPITAL

Balance at 31st May 2007

2006

£’000

£’000

35

35

Authorised, allotted, issued and fully paid 35,000 ordinary shares of £1 each

26

27

Notes to the Accounts for the year ended 31st May 2007

Notes to the Accounts for the year ended 31st May 2007 2007

22 CASH FLOW STATEMENT

2007

2006

£’000

22 CASH FLOW STATEMENT (CONTINUED)

£’000

Loss before interest and tax

(6,632)

(8,608)

(Profit) / Loss on disposal of players’ registrations

(4,048)

402

(263)

(164)

(10,943)

(8,370)

Depreciation charge

1,796

1,690

Release of grants

(98)

(98)

10,438

11,421

521

274

(1,494)

1,385

(37)

(86)

2,548

6,775

2,731

12,991

Profit on disposal of tangible fixed assets Operating Loss

Amortisation of players’ registrations Decrease in stocks (Increase) / Decrease in debtors Decrease in provisions Increase in creditors Net cash inflow from operating activities

At 1st

Cash flows

June 2006

Decrease in cash in the period Purchase of current asset investment Cash outflow from decrease in net debt Cash outflow / (inflow) from decrease / increase in finance lease and hire purchase financing Change in net debt resulting from cash flows in the year Non cash movements Net Debt as at 1st June 2006 Net Debt as at 31st May 2007

Non cash

At 31st

movements

May 2007

£’000

£’000

£’000

3,413

(3,413)

-

-

-

(1,310)

-

(1,310)

3,413

(4,723)

-

(1,310)

(573)

(144)

-

(717)

(27,041)

284

(67)

(26,824)

Finance lease and hire purchase agreements

(353)

32

-

(321)

Current asset investments

2,767

-

-

2,767

(21,787)

(4,551)

(67)

(26,405)

Bank overdraft

Debt due within one year Debt due after one year

£’000

(4,723)

(5,319)

-

2,767

140

531

32

(195)

(4,551)

(2,216)

(67)

(42)

(21,787)

(19,529)

(26,405)

(21,787)

23 CONTINGENT LIABILITIES No provision is included in the accounts for transfer fees of £3,045,000 (2006: £1,502,000) which are, as at 31st May 2007, contingent upon future appearances of certain players; or signing-on fees and loyalty bonuses, as at 31st May 2007, of £749,000 (2006: £1,019,000) which would become due to certain players if they are still in the service of the Club on specific future dates.

£’000 Cash at bank and in hand

£’000

(c) Reconciliation of movements in Net Debt

(a) Reconciliation of operating loss to net cash inflow from operating activities

(b) Analysis of changes in net debt

2006

24 PENSIONS Certain staff of the Group are members of either the Football League Limited Players Retirement Income Scheme, a defined contribution scheme, or the Football League Limited Pension and Life Assurance Scheme (“FLLPLAS”), a defined benefit scheme. As the Group is one of a number of participating employers in the FLLPLAS, it is not possible to allocate any actuarial surplus or deficit on a meaningful basis and consequently contributions are expensed in the profit and loss account as they become payable. The assets of the scheme are held separately from those of the Group, being invested with insurance companies. At 1st April 2003 a further MFR deficit was identified in the scheme, which increased the outstanding deficit allocated to the Group by £189,000 resulting in an increase in contributions advised by the Actuary. The additional deficit was provided in the year ended 31st May 2003. Contributions are also paid into individuals private pension schemes. Total contributions across all schemes during the year amounted to £330,000 (2006: £505,000). 25 POST BALANCE SHEET EVENTS Since 31st May 2007, the Club has entered into transfer agreements for confirmed contracted net transfer fees payable of £18,308,000. 26 FRS 8-RELATED PARTY TRANSACTIONS Related parties - Houston Securities is a company controlled by the Gregg family and Mrs A Gregg is a Director of that company. Mrs Gregg was a Director of Everton Football Club Company Limited during the year until her resignation on 20th October 2006. During the year £53,000 (2006: £60,000) was paid to Houston Securities by Everton Football Club Company Limited in relation to property transactions. Everton In The Community Limited is a registered Charity (Number 1099366) incorporated on 31st July 2003 and began trading on 1st June 2004. The Charity operates separately from the Group hence has not been consolidated in the Group results, but as at 31st May 2007 Everton Football Club Company Limited employees held three of the five Trustee positions at the Charity. During the year Everton Football Club Company Limited incurred net operating costs of £100,000 (2006: £83,000) on behalf of the Charity. 27 CAPITAL COMMITMENTS There were no capital commitments at 31st May 2007 or 31st May 2006.

2006 Annual Report & Accounts 04

28

29

First Team Results - Season 2006 - 2007 DATE

OPPONENT

19.08.06

Barclays Premiership - Final League Placings 2006 - 2007 V

RES

ATTENDANCE

PTS

POS

WATFORD

HOME

2-1

39,691

3

7

23.08.06

BLACKBURN ROVERS

AWAY

1-1

22,015

4

6

26.08.06

TOTTENHAM HOTSPUR

AWAY

2-0

35,540

7

4

09.09.06

LIVERPOOL

HOME

3-0

40,004

10

3

HOME

AWAY

P

W

D

L

F

A

W

D

L

F

A

GL DIFF

PTS

MANCHESTER UNITED

38

15

2

2

46

12

13

3

3

37

15

56

89

CHELSEA

38

12

7

0

37

11

12

4

3

27

13

40

83

LIVERPOOL

38

14

4

1

39

7

6

4

9

18

20

30

68

ARSENAL

38

12

6

1

43

16

7

5

7

20

19

28

68

TOTTENHAM HOTSPUR

38

12

3

4

34

22

5

6

8

23

32

3

60

EVERTON

38

11

4

4

33

17

4

9

6

19

19

16

58

5

5

26

20

7

3

9

21

32

-5

56

16.09.06

WIGAN

HOME

2-2

37,117

11

4

19.09.06

PETERBOROUGH UNITED (CC2)

AWAY

2-1

10,756

-

-

24.09.06

NEWCASTLE UNITED

AWAY

1-1

50,107

12

4

30.09.06

MANCHESTER CITY

HOME

1-1

38,250

13

5

BOLTON WANDERERS

38

9

14.10.06

MIDDLESBROUGH

AWAY

1-2

27,156

13

7

READING

38

11

2

6

29

20

5

5

9

23

27

5

55

38

11

5

3

28

15

3

7

9

17

27

3

54

21.10.06

SHEFFIELD UNITED

HOME

2-0

37,900

16

6

PORTSMOUTH

24.10.06

LUTON TOWN (CC3)

HOME

4-0

27,149

-

-

BLACKBURN

38

9

3

7

31

25

6

4

9

21

29

-2

52

ASTON VILLA

38

7

8

4

20

14

4

9

6

23

27

2

50

MIDDLESBROUGH

38

10

3

6

31

24

2

7

10

13

25

-5

46

NEWCASTLE UNITED

38

7

7

5

23

20

4

3

12

15

27

-9

43

MANCHESTER CITY

38

5

6

8

10

16

6

3

10

19

28

-15

42

28.10.06

ARSENAL

AWAY

1-1

60,047

17

6

04.11.06

FULHAM

AWAY

0-1

23,327

17

7

08.11.06

ARSENAL (CC4)

HOME

0-1

31,045

-

-

11.11.06

ASTON VILLA

HOME

0-1

36,376

17

7

WEST HAM UNITED

38

8

2

9

24

26

4

3

12

11

33

-24

41

18.11.06

BOLTON WANDERERS

HOME

1-0

34,417

20

7

FULHAM

38

7

7

5

18

18

1

8

10

20

42

-22

39

25.11.06

CHARLTON

AWAY

1-1

26,435

21

8

WIGAN

38

5

4

10

18

30

5

4

10

19

29

-22

38

29.11.06

MANCHESTER UNITED

AWAY

0-3

75,723

21

9

SHEFFIELD UNITED

38

7

6

6

24

21

3

2

14

8

34

-23

38

CHARLTON ATHLETIC

38

7

5

7

19

20

1

5

13

15

40

-26

34

WATFORD

38

3

9

7

19

25

2

4

13

10

34

-30

28

03.12.06

WEST HAM UNITED

HOME

2-0

32,968

24

7

09.12.06

PORTSMOUTH

AWAY

0-2

19,528

24

10

17.12.06

CHELSEA

HOME

2-3

33,970

24

10

FIXTURES 2007 - 2008

23.12.06

READING

AWAY

2-0

24,053

27

10

26.12.06

MIDDLESBROUGH

HOME

0-0

38,126

28

8

30.12.06

NEWCASTLE UNITED

HOME

3-0

38,682

31

7

01.01.07

MANCHESTER CITY

AWAY

1-2

39,836

31

8

07.01.07

BLACKBURN ROVERS (FAC3)

HOME

1-4

24,426

-

-

14.01.07

READING

HOME

1-1

34,722

32

7

21.01.07

WIGAN

AWAY

2-0

18,149

35

7

03.02.07

LIVERPOOL

AWAY

0-0

44,234

36

8

10.02.07

BLACKBURN ROVERS

HOME

1-0

35,593

39

8

21.02.07

TOTTENHAM HOTSPUR

HOME

1-2

34,121

39

8

24.02.07

WATFORD

AWAY

3-0

18,761

42

7

03.03.07

SHEFFIELD UNITED

AWAY

1-1

32,019

43

6

18.03.07

ARSENAL

HOME

1-0

37,162

46

6

02.04.07

ASTON VILLA

AWAY

1-1

36,407

47

7

06.04.07

FULHAM

HOME

4-1

35,612

50

5

09.04.07

BOLTON WANDERERS

AWAY

1-1

25,179

51

6

15.04.07

CHARLTON

HOME

2-1

34,028

54

5

21.04.07

WEST HAM UNITED

AWAY

0-1

34,945

54

5

28.04.07

MANCHESTER UNITED

HOME

2-4

39,682

54

6

05.05.07

PORTSMOUTH

HOME

3-0

39,619

57

5

13.05.07

CHELSEA

AWAY

1-1

41,746

58

6

AUG SAT 11 TUES 14 SAT 18 SAT 25 WED 29 SEPT SAT 1 SAT 15 THURS 20 SUN 23 WED 26 SUN 30 OCT THURS 4 SUN 7 SAT 20 THURS 25 SUN 28 WED 31 NOV SAT 3 THURS 8 SUN 11 SAT 24 THURS 29 DEC SAT 1 WED 5 SAT 8 WED 12 SAT 15 THURS 20 SUN 23 WED 26 SAT 29 JAN TUES 1 SAT 5

FAC = FA CUP

CC = CARLING CUP

2006 Annual Report & Accounts 04

30

WIGAN ATHLETIC TOTTENHAM HOTSPUR READING BLACKBURN ROVERS CARLING CUP 2 BOLTON WANDERERS MANCHESTER UNITED METALIST KHARKIV (UEFA R1L1) ASTON VILLA SHEFFIELD WEDNESDAY (CC 3) MIDDLESBROUGH METALIST KHARKIV (UEFA R1L2) NEWCASTLE UNITED LIVERPOOL AE LARISSA (UEFA GRP 1) DERBY COUNTY LUTON TOWN (CC 4) BIRMINGHAM CITY FC NURNBERG (UEFA GRP 2) CHELSEA SUNDERLAND UEFA GROUP MATCH 3 PORTSMOUTH ZENIT ST. PETERSBURG (UEFA GRP 4) FULHAM CARLING CUP5 WEST HAM UNITED AZ ALKMAAR (UEFA GRP 5) MANCHESTER UNITED BOLTON WANDERERS ARSENAL MIDDLESBROUGH FA CUP 3

H A A H A H H A A H A A H H A A H A A H A H H A A A H H A

FEB MAR APR MAY

WED SAT WED SUN WED SAT WED SAT SAT THURS SAT THURS SAT SUN SAT THURS SAT THURS SAT SAT SAT THURS SUN SUN THURS SAT SAT THURS SAT THURS SAT SUN WED SAT

9 12 16 20 23 26 30 2 9 14 16 21 23 24 1 6 8 13 15 22 29 3 6 6 10 12 19 24 26 1 3 11 14 17

CARLING CUP SEMI FINAL 1 MANCHESTER CITY FA CUP 3 REPLAY WIGAN ATHLETIC CARLING CUP SEMI FINAL 2 FA CUP 4 TOTTENHAM HOTSPUR BLACKBURN ROVERS READING UEFA CUP R3 L1 (ROUND OF 32) FA CUP 5 UEFA CUP R3 L2 (ROUND OF 32) MANCHESTER CITY CARLING CUP FINAL PORTSMOUTH UEFA CUP R4 L1 (ROUND OF 16) SUNDERLAND (FAC 6) UEFA CUP R4 L2 (ROUND OF 16) FULHAM WEST HAM UNITED LIVERPOOL UEFA CUP QF L1 DERBY COUNTY FA CUP SEMI FINAL UEFA CUP QF L2 BIRMINGHAM CITY CHELSEA UEFA CUP SF L1 ASTON VILLA UEFA CUP SF L2 ARSENAL NEWCASTLE UNITED UEFA CUP FINAL FA CUP FINAL

H A

H A H

A H A A H A H

A H H A H

31

HONOURS LIST FIRST DIVISON CHAMPIONS 1890/91, 1914/15, 1927/28, 1931/32, 1938/39, 1962/63, 1969/70, 1984/85, 1986/87 RUNNERS-UP 1889/90, 1894/95, 1901/02, 1904/05, 1908/09, 1911/12, 1985/86 SECOND DIVISION CHAMPIONS 1930/31 RUNNERS-UP 1953/54 FA CUP WINNERS 1906, 1933, 1966, 1984, 1995 RUNNERS-UP 1893, 1897, 1907, 1968, 1985, 1986, 1989

FOOTBALL LEAGUE CUP RUNNERS UP 1976/77, 1983/84 FA CHARITY SHIELD WINNERS 1928, 1932, 1963, 1970, 1984, 1985, 1987, 1995, shared: 1986 EUROPEAN CUP-WINNERS’ CUP WINNERS 1984/85 FA YOUTH CUP WINNERS 1964/65, 1983/84, 1997/98 RUNNERS-UP 1960/61, 1976/77, 1982/83, 2001/02

The Everton Football Club Company Limited Goodison Park, Liverpool L4 4EL

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 25

THIS DOCUMENTIS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended immediately to seek personal financial advice from your bank manager, stockbroker, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services Act 1986. Copies of this document, which comprises a prospectus relating to The Everton Football Club Company Limited made under The Public Offers of Securities Regulations 1995, have been delivered for registration to \, the Registrar of Companies in England and Wales in accordance with Regulation 4(2) of those Regulations. If you have sold or transferred all of your registered holding of Stock Units in The Everton Football Club Company Limited ("the Company"), please forward this document and the accompanying form of proxy to the purchaser or stockbroker, bank or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee. Otherwise, holders of Stock Units should retain this document for reference pending receipt of a provisional allotment letter. The Directors of the Company whose names are set out on page 4, accept responsibility for the information contained in this document. To the best of the knowledge, information and belief of the Directors, who have taken all reasonable care to ensure that such is the case, the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. N M Rothschild & Sons Limited, which is regulated by the Securities and Futures Authority, is acting for the Company and no one else in relation to the proposals set out in this document and will not be responsible to anyone other than the Company for providing the protections afforded to customers of N M Rothschild & Sons Limited nor for providing advice in relation to the proposals to Qualifying Shareholders.

The Everton Football Club Company Limited o~o

Six for one Rights Issue of30,000 new shares of £1 each at £500 per share

""" ""'" , '"

IKLOI IK0PA10CKI I 8431 ICOMPAN I ES HOUSE 23/08/881

'"

Notice of an Extraordinary General Meeting of The Everton Football Club Company Limited to be held at The Alex Young Lounge at Goodison Park, Liverpool, IA 4EL at 6.00 pm on 16th September, 1996, is set out at the end of this document. The enclosed form ofproxy should be completed and returned to the Company's Registered Office, Goodison Park, Liverpool IA 4EL so as to be received no later than 6.00 pm on 14th September, 1996. The latest time for acceptance and payment in full under the Rights Issue is 6.00 pm on 9th October, 1996. The procedure for acceptance and payment is set out in Part II of this document.

CONTENTS Page TIMETABLE

2

DEFINITIONS

3

DIRECTORS, SECRETARY AND ADVISERS

4

PARTI

Letter from the Chairman of Everton

5

PART II

Terms and conditions of the Rights Issue

9

PART III

Financial information

13

PARTIV

Additional information

45

NOTICE OF EXTRAORDINARY GENERAL MEETING

52

TIMETABLE 1996 Record date for the Rights Issue

22ndAugust

Latest time and date for receipt offorms of proxy

6.00 pm on 14th September

Extraordinary General Meeting

6.00 pm on 16th September

Expected date for despatch of Provisional Allotment Letters

16th September

Dealings to commence in Provisional Allotment Letters, nil paid

17th September

Latest time for splitting Provisional Allotment Letters, nil paid

6.00 pm on 7th October

Latest time and date for acceptance and payment, in full

6.00 pm on 9th October

Latest time for splitting Provisional Allotment Letters, fully paid

6.00 pm on 28th October

Latest time for registration of renunciation

6.00 pm on 30th October

Expected date for despatch of Stock Unit certificates

20th November

If you have any queries about the procedures for acceptance and payment, you should contact the Company's registrars, Independent Registrars Group Limited, New Issues Department, Balfour House, 390/398 High Road, liford, Essex IG1 INQ (telephone 0181478 8241). 2

DEFINITIONS The following definitions apply throughout this document and in the accompanying form of proxy, unless the context otherwise requires:

"AlB"

AlB Trust Company (Jersey) Limited, the trustee of The Peter Johnson Settlement

"Board" or "Directors"

the directors of Everton

"Everton", "the Club" or

The Everton Football Club Company Limited

"the Company" "Extraordinary General Meeting" the extraordinary general meeting of the Company, notice of which appears at the end of this document "form of proxy"

the form of proxy for use by holders of Stock Units in connection with the Extraordinary General Meeting

"new Stock Units"

the new Stock Units of £1 each which will come into existence following the conversion of the shares in accordance with part (c) of the special resolution to be proposed at the Extraordinary General Meeting

"Provisional Allotment Letter(s)"

the provisional allotmentletter(s) proposed to be despatched to Qualifying Stockholders (other than certain overseas stockholders, as described in paragraph 13 of Part II) on 16th September, 1996 pursuant to the Rights Issue

"Qualifying Stockholders"

registered holders of Stock Units on the Record Date

"Record Date"

the close of business on 22nd August, 1996

"Rights Issue" or "the Issue"

the proposed offer, by way ofrights, to Qualifying Stockholders as described in this document

"Rothschilds"

N M Rothschild & Sons Limited

"Stock Units"

stock units of£1 each in the capital of the Company

"The Peter Johnson Settlement" or "the Settlement"

The Peter Johnson 1989 Settlement, details of which are set out in paragraph 6 of Part IV of this document

"Underwriting Agreement"

the Agreement dated 22nd August, 1996between the Company (I) and AlB, as trustee of The Peter Johnson Settlement (2), details of which are set out in paragraph 5 of Part IV of this document

"United Kingdom" or "UK"

the United Kingdom of Great Britain and Northern Ireland

3

DIRECTORS, SECRETARY AND ADVISERS Directors P R Johnson, Chairman Sir Desmond H Pitcher DL, Deputy Chairman BCFinch RJHughes Sir Philip D Carter CBE DrDMMarsh KMTamlin WKenwright A J L Abercromby Lord Grantchester all non executive and of Goodison Park, LiverpoollA 4EL SECRETARY MJDunford AUDITORS KPMG Richmond House I Rumford Place Liverpool L3 9QY SOliCITORS Beachcroft Stanleys 20 Furnival Street London EC4A IBN FINANCIAL ADVISERS N M Rothschild & Sons Limited Trinity Court 16 John Dalton Street Manchester M2 6HY BANKERS National Westminster Bank pic Liverpool Business Centre POBox 138 First Floor 22 Castle Street Liverpool L692BE REGISTRARS Independent Registrars Group Limited Balfour House 390/398 High Road Ilford Essex IGlINQ

4

PART I

TheEverton Football Club Company Limited (Registered in England and Wales with Registered No: 36624)

/

Registered Office: Goodison Park LIVERPOOL lA4EL

Directors: PR Johnson (Chairman) Sir Desmond H Pitcher DL (Deputy Chairman) BCFinch RJHughes Sir Philip D Carter CBE DrDMMarsh KMTamiin .W Kenwright A J L Abercromby Lord Grantchester

23rd August, 1996

To the holders ofStock Units

Dear Stockholder Rights Issue to raise £15 million 1. Introduction Your Directors announced today that Everton is to raise £15 million, before expenses, by way of a Rights Issue. The Issue will be made to Qualifying Stockholders at a price of £500 per share on the following basis:

six newshares for everyone Stock Unit held, and so in proportion for any other number of Stock Units held on the Record Date. The Rights Issue will be fully underwritten by AlB, as trustee of The Peter Johnson Settlement. The Rights Issue is conditional, inter alia, on the passing ofthe special resolution set out in the notice of the Extraordinary General Meeting at the end ofthis document. I am writing to you to provide you with information on the Rights Issue, to set out the reasons why the Board considers it to be in the best interests of the Company and its stockholders and to seek your approval and support for it. 2. Reasons for the Rights Issue Your Directors believe that additional capital is required in order to fulfil Everton's current and anticipated future needs. The capital raised will strengthen the financial resources of the Company, thus improving its ability to fund future development.

The Board believes that the level of equity fund-raising necessary to support the continuing strategy of upgrading Club facilities and strengthening the playing staff is £15 million and AlB, as trustee of The Peter Johnson Settlement, has agreed to underwrite the Rights Issue to raise that sum, at no cost to the Company. The Rights Issue price is significantly lower than the average prices at which Stock Units have been traded for value during each of the last six months and the Board believes that this will be attractive to Qualifying Stockholders in providing an opportunity to acquire Stock Units at a lower cost. Details of the prices at which Stock Units have been traded are set out in paragraph 14(1) of Part IV of this document. 5

3. The Peter Johnson Settlement The Peter Johnson Settlement is a family trust in which I have a beneficial interest. It is resident and administered in Jersey. 4. Current tradingandprospects The results ofthe Company, before transfer feesand interest, since 31 May 1996have continued to be satisfactory. Since May 1996, the Company has made a net investment in new players in excess of £2.7 million which will be written off in the profit and loss account for the year ending 31st May, 1997 in accordance with the Company's normal accounting policy. Your Board views the Company's future prospects with confidence, particularly in the light of the Club's continuing football successtogether with the growth in interest in football as a media product.

5. Details ofthe Rights Issue The Board is proposing to offer 30,000 new shares of £ I each by way of rights at a price of £500 per share, payable in full on acceptance, to Qualifying Stockholders on the following basis: six newshares for everyone Stock Unit held, and so in proportion for any other number ofStock Units held on the Record Date. The new shares will be converted into new Stock Units when fully paid, and will rank pari passu in all respects with the Stock Units currently in issue. The Rights Issue is conditional on the passing of the special resolution set out in the notice of the Extraordinary General Meeting and the conditions of the Underwriting Agreement being fulfilled. Any Qualifying Stockholders who wish to sell their provisional allotment of rights, nil paid or fully paid are referred to Part II of this document. Any rights which are not taken up by Qualifying Stockholders or by any persons to whom such rights are sold, will lapse and will then pass to AlB, as trustee ofThe Peter Johnson Settlement under the terms of the Underwriting Agreement. Holders oflapsed rights will not receive any consideration for their rights from the Company or from AlB, as trustee of the Settlement and as underwriter under the Underwriting Agreement. The attention of stockholders who have registered addresses outside the United Kingdom is drawn to paragraph 13 of Part II of this document.

6. Intentions ofDirectors Your Directors believe that it is in the interests of the Company for AlB, as trustee of The Peter Johnson Settlement, to retain and, depending on the extent to which other Qualifying Stockholders take up their rights under the Rights Issue, enhance through the Underwriting Agreement, its substantial shareholding in Everton. AlB, as trustee of the Settlement, is currently the registered holder of 2,920 Stock Units and accordingly, through my beneficial interest in the Settlement, I currently have a beneficial interest in those Stock Units, which comprise 58.4 per cent. of the existing issued capital of the Company. AlB, as trustee of the Settlement, has confirmed to the Company in writing that it is its intention to take up all its rights under the Rights Issue and, if the other Qualifying Stockholders do likewise, the percentage interest ofAlB, as trustee of the Settlement in the enlarged issued capital ofthe Company will remain unchanged. Ifthe other Qualifying Stockholders do not take up all their rights and if such rights lapse, AlB's percentage interest could increase, under the Underwriting Agreement, to a maximum of94.1 per cent. of such enlarged capital.

7. The City Codeon Take-oversand Mergers The City Code on Take-overs and Mergers (the "City Code") stipulates that a person owning shares carrying more than 50 per cent. of a company is normally free to purchase any number of shares without triggering the requirement to make a general offer. Consequently, AlB, as trustee of The Peter Johnson Settlement, is free to act as underwriter to the proposed Rights Issue without being required by the City Code to make a general offer. 6

8. Extraordinary GeneralMeeting You will find set out at the end of this document a notice of Extraordinary General Meeting of Everton to be held at The Alex Young Lounge at Goodison Park, Liverpool L4 4EL at 6.00 pm on 16th September, 1996 at which the following resolution will be proposed: A specialresolution:

•

to increase the authorised share capital of the Company to £35,000 by the creation of 30,000 new shares of £1 each;

•

to authorise the Directors to allot such new shares and the specific allotment of the new shares to all stockholders registered on the Record Date pro rata to their existing stockholdings, with any new shares up to a value of £6.2 million not so taken up by Qualifying Stockholders other than AlB, as trustee of the Settlement, being allotted to AlB, under the terms of the Underwriting Agreement; and

•

immediately following the allotment, fully paid, of the shares, to convert the same into new Stock Units.

A special resolution requires the approval of a majority of not less than 75 per cent. of such stockholders who (being entitled to do so) are present and vote in person or by proxy at the Extraordinary General Meeting.

9. Taxation Information regarding United Kingdom taxation in respect of the Rights Issue is set out in paragraph 14 of Part II and paragraph 12 of Part IV of this document. If you are in any doubt as to your tax position, you should consult your professional adviser without delay. 10. Action to be taken Whether or not you intend to be present at the Extraordinary General Meeting, you are asked to complete and return the form of proxy in accordance with the instructions printed thereon so that it arrives at the Company's Registered Office, Goodison Park, Liverpool L4 4EL no later than 6.00 pm on 14th September, 1996.Completion and the return ofthe form ofproxy will not preclude you from attending the Extraordinary General Meeting and voting in person should you so wish. If the special resolution to be proposed at the Extraordinary General Meeting is passed, the Rights Issue will be implemented and you will receive a Provisional Allotment Letter. To take up your entitlement to shares in whole or in part you must lodge your Provisional Allotment Letter in accordance with the instructions thereon, together with a remittance for the full amount payable, by post or by hand so that it arrives at the Company's registrars, Independent Registrars Group Limited, Balfour House, 390/398 High Road, Ilford, Essex IG 1 lNQ, no later than 6.00 pm on 9th October, 1996. Important details concerning the Rights Issue and the shares (including the conditions of the Rights Issue) are set out in Part II of this document and in the Provisional Allotment Letter.

11. Financial and additionalinformation Your attention is drawn to the financial and additional information set out in Parts III and IV respectively of this document. 12. Recommendation Your Directors consider that the Rights Issue is in the best interests of the Company and unanimously recommend that you vote in favour of the special resolution to be proposed at the Extraordinary General Meeting, as they intend to do in respect of their own beneficial shareholdings carrying voting rights exercisable at the Extraordinary General Meeting, amounting in aggregate to 2,818 Stock Units, representing 56.4 per cent. of the existing issued capital of the Company. 7

The holding ofAlB, as trustee of The Peter Johnson Settlement, of2,497 Stock Units after deduction of the 423 Stock Units acquired less than three months prior to the Extraordinary General Meeting, is included in this calculation, as the Company has received an irrevocable undertaking from AlB to vote in favour of the special resolution. The Company has also received irrevocable undertakings to vote in favour of the special resolution, from Mrs Janatha Stubbs in respect ofher beneficial holding of249 Stock Units and from The Lady Grantchester and Mrs Janatha Stubbs, as trustees of The Lady Betty Grantchester Settlement, in respect of its holding of 249 Stock Units. Accordingly, the Company has received irrevocable undertakings to vote in favour of the special resolution from stockholders holding, in aggregate, 3,316 Stock Units, representing 66.3 per cent. of the existing issued capital of the Company.

Yours faithfully

Peter Johnson Chairman

8

PART II TERMS AND CONDITIONS OF THE RIGHTS ISSUE 1. Terms Subject to the conditions referred to below, the Company is proposing to raise £15 million, before expenses, by the issue of new shares. The new shares willbe offered by way of rights at £500 per share, payable in full on acceptance, to Qualifying Stockholders on the register of Everton on the Record Date on the following basis: six new Everton shares for everyone Stock Unit held, and so in proportion for any other number of Stock Units held on the Record Date. The new shares will, when fully paid, be converted into new Stock Units and will rank pari passu in all respects with the Stock Units currently in issue. The attention of overseas stockholders is drawn to paragraph 13 of this Part II below. 2. Conditions The Rights Issue is conditional on the approval by stockholders of the special resolution to be proposed at the Extraordinary General Meeting and on the conditions of the Underwriting Agreement being fulfilled. 3. Provisional Allotment Letters The Provisional Allotment Letters will set out the holdings of Stock Units on which Qualifying Stockholders' entitlements are based and the number of new shares for which Qualifying Stockholders are entitled to subscribe and will contain full details regarding acceptance and payments, renunciation, splitting and registration. Provisional Allotment Letters are expected to be despatched on 16th September, 1996. All queries in connection with the Provisional Allotment Letters should be addressed to the Company's registrars, Independent Registrars Group Limited, New Issues Department, Balfour House, 390/398 High Road, Ilford, Essex IGI INQ (telephone 0181478 8241). 4. Dealings in nil paid rights Qualifying Stockholders who wish to sell their provisional allotment of rights, nil paid, are recommended to seek personal financial advice from their bank manager, stockbroker, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services Act 1986.Any rights not taken up by Qualifying Stockholders or any such purchasers, will lapse and will then pass to AlB, as trustee of The Peter Johnson Settlement, under the terms of the Underwriting Agreement. Holders of lapsed rights will not receive any consideration for their rights from the Company or from AlB, as trustee of the Settlement and underwriter. A transfer of such rights can be made by renunciation of the Provisional Allotment Letter or, in the case of any person in whose favour the rights have been renounced, by delivery of such letter to the transferee, without payment of the subscription price for the new shares provisionally allotted, up to 6.00 pm on 9th October. Thereafter, transfers of rights may only be made if the subscription price for the new shares provisionally allotted, has been paid in full. The latest time for transfers of rights for registration of renunciation is 6.00 pm on 30th October. 5. Procedure for acceptance and payment The Provisional Allotment Letters will contain full details regarding acceptance and payment. To take up entitlements under the Rights Issue in whole or in part, Qualifying Stockholders must return their Provisional Allotment Letter in accordance with the instructions thereon, together with a remittance for the full amount payable, by post or by hand to the Company Registrars, Independent Registrars Group Limited, New Issues Department, Balfour House, 390/398 High Road, Ilford, Essex IG I INQ, not laterthan 6.00 pm on 9th October, 1996. 9

Cheques should be made payable to "Independent Registrars Group Limited - Everton FC" and crossed "AI c payee only'. All payments must be made by cheque or bankers draft in sterling. Return by the Qualifying Stockholder of the Provisional Allotment Letter with the appropriate remittance will constitute a warranty that all cheques (which the Company reserves the right to present on receipt) will be honoured on first presentation although the Company may elect to treat as valid acceptances in respect of which cheques are not so honoured. Prior to the posting of stock certificates, monies received by Independent Registrars Group Limited, pursuant to the Rights Issue, will be held in a bank account opened on behalf of the Company and will be paid over to the Company in accordance with the Company's instructions. Monies received pursuant to applications not accepted under the Rights Issue, will be returned by Independent Registrars Group Limited without the payment of any interest, by 20th November, 1996. 6. Procedure in respect of any rights not taken up Ifpayment in full in respect of any new shares (whether from the original provisional allottee or any person in whose favour the rights have been renounced or any subsequent transferee thereof) has not been received by 6.00 pm on 9th October, 1996, then the provisional allotment of such shares will be deemed to have been declined and will lapse. In such instances, the rights will be allotted to AlB, as trustee of The Peter Johnson Settlement, under the terms of the Underwriting Agreement, and the Qualifying Shareholders willnot receiveany consideration for their lapsed rights from the Company or from AlB, as trustee of the Settlement and underwriter. 7. Registration in names of Qnalifying Stockholder A Qualifying Stockholder who wishes to have all his entitlement to new shares registered in his name, must accept and make payment for his allotment in accordance with the provisions summarised in this document and set out in the Provisional Allotment Letter, but need take no further action. 8. Renunciation and splitting The Provisional Allotment Letters will be fully renounceable, save as required by the laws of certain foreignjurisdictions. A Qualifying Stockholder who wishes to renounce all the new shares comprised in a Provisional Allotment Letter must complete and sign Form X on such letter and hand the entire letter to the renouncee, or to the broker or bank or other agent who acted for such stockholder in the transaction. The latest time for registration of renunciations is 6.00 pm on 30th October, 1996. Ifa Qualifying Stockholder wishes to have registered in his own name only some ofthe new shares to which he is entitled and to transfer the remainder or to renounce all ofsuch new shares but to different persons, he may have the letter split, for which purpose he must complete and sign Form X on such letter. The letter must then be delivered by post or hand to Independent Registrars Group by 6.00 pm on 7th October, 1996, nil paid, or by 6.00 pm on 28th October, 1996 fully paid, to be cancelled and exchanged for the split letters required. The number of split letters required and the number of new shares to be comprised in each, should be stated in an accompanying letter. Form X on split letters will be marked "Original Duly Renounced" before issue. 9. Registration in names of persons other than Qualifying Stockholders The renouncee or any subsequent transferee thereof, or their respective agents, must complete Form Y on the Provisional Allotment Letter and lodge the entire letter by post or by hand with Independent Registrars Group by 6.00 pm on 30th October, 1996. Registration cannot be effected unless the letter is fully paid. 10. Dealings in fully paid rights After acceptance of the provisional allotment in accordance with the provisions set out in this document and in the Provisional Allotment Letter, fully paid rights to new shares may be transferred by renunciation of the relevant Provisional Allotment Letter and delivery of it by post or by hand to Independent Registrars Group Limited, New Issues Department, Balfour House, 390/398 High Road, Ilford, Essex IGl INQ by 6.00 pm on 30th October, 1996. 10

11. Stock certificates Stock certificates are expected to be despatched by post by 20th November, 1996.After 30th October, 1996, and pending the issue of stock certificates, instruments of transfer will be certified by Independent Registrars Group Limited against lodgement of fully paid Provisional Allotment Letters and/ or in the case of renunciations, with the registration of renunciation in the possession of Independent Registrars Group Limited. 12. Posting All documents and cheques posted to or by stockholders, renouncees, transferees or their respective agents will be posted at their risk. 13. Overseas stockholders No person receiving a Provisional Allotment Letter in any territory other than the United Kingdom may treat the same as constituting an invitation or offer to him nor should he in any event use such allotment letter unless, in the relevant territory, such an invitation or offer could lawfully be made to him and such allotment letter could lawfully be used without contravention of any registration or other legal requirements. Any Qualifying Stockholder outside the United Kingdom wishing to accept the offer of shares comprised in a Provisional Allotment Letter must satisfy himself as to full observance of the laws of any relevant territory in connection therewith, including obtaining any requisite governmental or other consents, observing any other requisite formalities and paying any issue, transfer or other taxes due in such territories. If Qualifying Stockholders are in any doubt as to their position, they should consult their professional advisers. In cases where overseas stockholders do not take up shares provisionally allotted to them, the provisions of paragraph 6 of this Part II will apply. The attention of Qualifying Stockholders who are not resident in or who have registered addresses outside the United Kingdom, is drawn to the following paragraphs. In accordance with section 90(5) of the Companies Act 1985, the offer by way of rights to Qualifying Stockholders who have no registered address in the United Kingdom and who have not given to the Company an address within the United Kingdom for the service of notices, will be made by the Company publishing a notice in the London Gazette during the week following the posting of this document to stockholders. The Provisional Allotment Letters, the shares to be issued in connection with the Rights Issue and the new Stock Units to be created on conversion of the shares, have not been and will not be registered under the United States Securities Act of 1933, as amended; the relevant clearances have not been and will not be obtained from the Securities Commission of any province of Canada; and no prospectus has been or will be lodged with or registered by the Australian Securities Commission. Accordingly, subject to certain limited exceptions, the Provisional Allotment Letters, the shares and the new Stock Units may not be offered, sold or delivered directly or indirectly in or into the United States, Canada or Australia. Provisional Allotment Letters will not be sent to Qualifying Stockholders with registered addresses in the United States, Canada or Australia. The offer by way of rights to Qualifying Stockholders with registered addresses as aforesaid will be made by means ofa notice in the London Gazette referred to above. In order to comply with South African law, Provisional Allotment Letters sent to Qualifying Stockholders with registered addresses in South Africa will not be renounceable. Such stockholders may require the approval of the South African Exchange Control authorities if they wish to take up their rights. The Company reserves the right to treat as invalid any Provisional Allotment Letter which appears to it or its agents to have been executed in or despatched from the United States, Canada or Australia or which provides an address in the United States, Canada or Australia for delivery of definitive certificates for the Stock Units to be issued following conversion of the fully paid shares pursuant to the Rights Issue or which does not provide a representation and warranty that the person taking up his rights is not a North American person or a resident in Australia. Any entitlement set out in such invalid Provisional Allotment Letters will be treated as not having been taken up and the provisions of paragraph 6 of this Part II will apply. 11

Notwithstanding the foregoing, the Company will retain the right to permit any Qualifying Stockholder to take up his rights if the Company, in its sole and absolute discretion, is satisfied that the transaction in question is exempt from or not subject to the legislation or regulation giving rise to the restriction in question. Qualifying Stockholders resident in overseas territories should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their entitlement. 14. Capital gains tax These comments are intended only as a general guide to certain aspects of current United Kingdomlaw and Inland Revenue practice. They may not apply to certain classes of persons. The comments are of a general nature and concern only the position of Qualifying Stockholders who are the beneficial owners of their Stock Units. A Qualifying Stockholder who is in any doubt as to his tax position or who is subject to tax in a jurisdiction other than the United Kingdomshould consult an appropriate adviser. The Directors have been advised as follows: (a)

Taxation of chargeable gains: (i)

For the purpose of United Kingdom taxation oftaxable gains, if you take up all or part of your rights to new shares under the Rights Issue, your existing Stock Units and the new shares issued in respect of those Stock Units, will be treated as the same asset, acquired at the time you acquired your existing Stock Units. The subscription monies will be added to the base cost of your existing holding(s), but for the purpose of calculating indexation allowance on a subsequent disposal of Stock Units, these monies will only be taken into account from the time at which you became liable to make, or made payment, for the new shares.

(ii) If the Stock Units were held at 31st March, 1982 the value at that date may in certain circumstances be substituted for the original cost of acquisition for the purposes of the taxation of chargeable gains. In these circumstances, any amounts paid for the new shares acquired under the Rights Issue will be aggregated with the 31st March, 1982 valuation for the purposes of base cost. However, indexation on this subscription money will only be available from the time you become liable to make, or made, payment. (iii) There are no tax consequences if you allow your rights to lapse. You will retain the existing base cost of your Stock Units for the purposes of the taxation of chargeable gains. If you do not take up your rights but sell them nil paid, the sale of rights is treated as a part disposal for the purposes of taxation of chargeable gains unless the proceeds are "small" (typically 5 percent. or less ofthe value ofthe shareholding giving rise to the disposal). The calculation of tax arising where rights are sold nil paid can be complex and if you are unsure, you should consult an appropriate adviser. (iv) For purposes of identifying allowable base cost for future disposals of Stock Units, including shares acquired under the Rights Issue, there are complex rules for identifying the order of sale of Stock Units and the related base costs which will depend on the individual stockholder's own circumstances. The calculation of tax arising where rights are sold nil paid can be complex and if you are unsure, you should contact an appropriate adviser. (b)

Stamp Duty and Stamp Duty Reserve Tax

No Stamp Duty or Stamp Duty Reserve Tax will be payable on the issue of Provisional Allotment Letters.

12

PART III FINANCIAL INFORMATION Set out below are copies of the Company's accounts for the three years ended 31st May, 1996, together with the auditors' reports thereon. The accounts in respect of the years ended 31st May, 1994 and 31st May, 1995 have been filed with Companies House. Accounts for the year ended 31st May, 1996have not been filed with Companies House and are subject to adoption by stockholders at the forthcoming Annual General Meeting of the Company. The annual report and accounts for the year ended 31st May, 1996 have not yet been printed and therefore the page numbers referred to in the notes to such accounts are approximations. The Directors have confirmed that the accounts set out below for the three years ended 31st May, 1996, for which they accept responsibility, have been prepared in accordance with the law. KPMG have confirmed that they consent to the inclusion in the prospectus dated 23rd August, 1996 oftheir audit report given within the meaning of Section 235 of the Companies Act 1985 in respect of the statutory accounts ofThe Everton Football Club Company Limited for the year ended 31st May, 1996 and accept responsibility for that report, and have not become aware since that date ofany such report of any matter affecting the validity of that report at that date. Rogers, Bowler & Co. have confirmed that they consent to the inclusion in the prospectus dated 23rd August, 1996 of their audit reports given within the meaning of Section 235 of the Companies Act 1985in respect ofthe statutory accounts ofThe Everton Football Club Company Limited for the two years ended 31st May, 1995 and accept responsibility for those reports, and have not become aware, since the date of either such report, of any matter affecting the validity of that report at that date.

13

Profit and Loss Account for the year ended 31st May 1994 Notes

1994

1993

£

£

Gate receipts and income from related footballing activities

6,721,342

5,819,864

Trading and other income

2,162,861

2,173,867

8,884,203

7,993,731

719,259

748,763

4,977,646

4,518,839

Training, travel, match and other expenses

754,932

711,304

Ground expenses and maintenance

180,648

383,430

Utilities

409,908

418,589

Depreciation

123,028

121,865

Other operating expenses

629,260

436,715

7,794,681

7,339,505

Balance before transfer fees

1,089,522

654,226

Add: Transfer fees receivable

2,575,000

2,325,000

(3,803,212)

(1,617,866)

(138,690)

1,361,360

Income

Expenditure Cost of goods for resale Staff costs

9

Deduct: Transfer fees, compensation etc payable Operating Loss (1993: Profit)

10

Add: Interest receivable

6,333

Deduct: Interest payable

11

(227,698)

Deduct: Non-recurring expenses

12

(131,650)

Loss on Ordinary Activities Before Taxation (1993: Profit) Taxation re ordinary activities

(491,705) 13

Loss on Ordinary Activities After Taxation (1993: Profit) Add: Donations receivable

14

Loss Transferred to Reserves (1993: Profit)

7

9,745 (384,440)

986,665

(4,414) (496,119)

986,665

41,079

4,779

(455,040)

991,444

The company's income and expenditure all relate to continuing operations.The company has no recognised gains or losses other than the above loss for the year.

I

The Everton Football Club Company Limited

'.

14

Balance Sheet as at 31st May 1994 1994 Notes

£

1993

£

£

£

Fixed Assets Tangible assets

2

8,633,266

7,444,510

Current Assets Stocks

3

68,105

80,896

Debtors

4

1,776,093

1,309,722

110,166

68,327

1,954,364

1,758,945

Cash at bank and in hand Creditors Amounts falling due within one year

5

7,340,561

5.501.346

Net Current Liabilities

(5,386,197)

(3.742,401)

Totai Assets Less Current Liabilities

3.247,069

3,702.109

6

2,500

2.500

7

4,527,325

4,527.325

7

(1,282.756) 3,247.069

Representing: Capital and Reserves Called up share capital Revaluation reserve Profit and loss account

8

(827.716) 3,702.109

Signed on behalf of the Board, who approved the accounts on 26th July 1994 Dr. D.M. Marsh

}

Sir Desmond H. Pitcher

,

Directors

,:',,: '

The Everton Football Club Company Limited , 15

'

•

& .

.

Cash Flow Statement for the year ended 31st May 1994 1994

£

Notes Net Cash Inflow from Operating Activities

17(i)

1993

£

£

1,065,062

£

293,850

Returns on investments and servicing of finance Interest received Interest paid

9,745

6,333

(384,440)

(227,698)

Net cash outflow from returns on investments and servicing of finance

(374,695)

(221,365)

Taxation 5,322

Tax refunded Investing Activities Payments to acquire tangible fixed assets

(1,392,054)

(147,875)

Grants from The Football Trust Receipts from sales of tangible fixed assets

32,521 80,270

Net cash outflow from investing activities Net Cash Outflow Before Financing

92,653 (1,311,784)

(22,701)

(462,765)

(103,546)

Financing Donations receivable

41,079

4,779

Loans repaid

(4,858)

(4,621)

Net cash inflow from financing

36,221

Decrease in cash and 17 (iii) cash equivalents

•

(426,544)

The Everton Football Club Company Limited

16

158

(103,388)

Notes to the Accounts for the year ended 31st May 1994 1. Accounting Basis and Policies These accounts have been prepared on the historical cost basis of accounting as modified to include valuations of the Club's properties, and in accordance with applicable U.K. accounting standards, and accounting polices consistent with those adopted previously. The main accounting policies are as follows:-

(i) Income Income is stated exclusive of value added tax and gate receipts are included net of percentage payments to visiting clubs, Tne FA Premier League and The Football Association.

(ii) Fixed Assets and Depreciation It is the Club's policy to maintain the value and extend the life of its properties by regular expenditure charged to revenue, and to revalue the properties every four years and adjust the book values accordingly. Having regard to this, depreciation is not provided on the Club's properties as the Directors are of the opinion that the sum involved would be immaterial. Depreciation on other fixed assets has been calculated at 25% on the book value.

(iii) Stocks Stocks are valued at the lower of cost and net realisable value.

(iv) Transfer Fees Transfer fees payable and receivable are dealt with in the profit and loss account in the year in which the transfer contract is signed.

(v) Signing-on Fees and Loyalty Bonuses Signing-on fees and loyalty bonuses are charged on an accruals basis and those instalments due in the future on continued service are not provided for but are noted as contingent liabilities at Note 16.

(Vi) Grants Grants receivable from The Football Trust are deducted from the expenditure to which they relate.

(vii) Deferred Taxation Deferred tax is provided at current rates in respect of the tax effect of all material timing differences, to the extent that it is probable that a liability or asset will crystallise in the foreseeable future.

I 17

Notesto the Accounts for the year ended 31st May 1994 (continued) 2. Tangible Fixed Assets Properties

Plant & Equipment

£

£

£

At 1st June1993

7,106,111

790,375

318,413

8,214,899

Additions

1,199,215

79,309

113,530

1,392,054

Vehicles

Total £

Cost or valuation

Grants (180,199)

Disposals

(180,199)

Revaluation adjustments At 31st May 1994

8,305,326

869,684

251,744

9,426,754

Cost

1,821,326

869,684

251,744

2,942,754

Valuation in April 1991

6,484,000 8,305,326

6.484,000 869,684

251,744

9,426,754

629,545

140,844

770,389

60,034

62,994

123,028

Depreciation At 1st June 1993 Provided during year On disposals

(99,929)

At 31st May 1991

(99,929)

689,579

103,909

793,488

Net book value At 31st May 1994

8,305,326

180,105

147,835

8,633,266

At 31st May 1993

7,106,111

160,830

177,569

7,444,510

Expenditure of £1,173,766 incurred on the new Park End Stand up to 31st May 1994 is included above under properties. The total estimated cost of the stand is £2.6 million, in respect of which the club expects to receive grants of £1.5 million from The Football Trust. The Club's properties are freehold, with the exception of certain minor residential properties which are long leasehold. If the freehoid properties had not been revalued regularly since 1983 they would have been included at the following amounts on the basis previously appertaining:-

Cost Aggregate depreciation Net book value

I

The Everton Footban Club Company L i m i t e d ' 18

1994

1993

£

£

3,958,523

2,759,308

156,876

150,662

3,801,647

2,608,846

.

Notes to the Accounts for the yearended 31 st May 1994 (continued) 1994

1993

£

£

3. Stocks Refreshments, souvenirs and goods for resale

66,188

78,980

1,916

1,916

68,104

80,896

Trade Debtors

1,350,845

1,264,191

Other Debtors

258,975

171,047

Prepayments and accrued income

166,273

174,484

1,776,093

1,609,722

2,053,324

426,197

130,658

313,873

905

1,089

2,683

2,287

808,197

878,981

2,995,767

1,622,427

Maintenance Stocks

4. Debtors

5. Creditors: Amounts falling due within one year Trade creditors Social security and other taxes

Pension scheme premiums Other creditors Accruals and deferred income

Corporation tax

2,350

Bank overdraft Loan from brewery

4,289,092

3,820,709

53,352

58,210

7,340,561

5,501,346

The bank overdraft is secured on the Club's premises at Goodison Park and Bellefield. There is no fixed repayment date for the brewery loan and interest is not charged during the continuance of specified trading arrangements.

6. Called Up Share Capital Authorised: 2,500 £1 stock units

1994

1993

£

£

2,500

2,500

2,500

2,500

Allotted, issued and fully paid: 2,500 £1 stock units

Since the end of the financial year, a resolution has been passed to increase the authorised share capital of the Company to £5,000 and to give authority for the allotment of 2,500 shares of £1.00 each at £4,000 per share by way of a rights issue to existing stockholders.

II 19

Notesto the Accounts for the year ended31 st May 1994 (continued) 1994

1993

£

£

7. Reserves Revaluation reserve Balance at 1st June 1993 Adjustments in current year

4,527,325

4,527,325

Balance at 31st May 1994

4,527,325

4,527,325

Profit and loss account Balance 1st June 1993 Loss for the year (1993: Profit)

(827,716) (455,040)

(1,819,160) 991,444

(1,282,756)

(827,716)

(455,040)

991,444

Opening shareholders' funds at 1st June 1993

3,702,109

2,710,665

Closing shareholders' funds at 31st May 1994

3,247,069

3,702;109

Number

Number

Playing, training and management

54

48

Maintenance and administration

29

30

Catering and Sales

31

32

114

110

Balance at 31st May 1994

8. Reconciliation of Movements in Shareholders' Funds Loss for the year (1993:Proflt)

9. Particulars of Employees The average weekly number of employees during the year was as follows:

£

£

The aggregate payroll costs of the above persons were as follows: Wages and salaries

4,398,534

3,859,645

Social security costs

390,722

367,452

Other pension costs

188,390

291,742

4,977,646

4,518,839

Other pension costs comprise contributions made by the Company in respect of the majority of its permanent employees to pension schemes which are independently administered by The Football League Limited, together with contributions made to individual pension contracts with insurance companies under agreements with certain employees. All pension arrangements are defined contribution schemes. The Directors received no emoluments from the Company during the year.

•

The Everton Football Club Company Limited

20

Notes to the Accounts for the year ended 31st May1994 (continued) 1994

1993

£

£

10. Operating Loss The operating loss is stated after charging: Auditor's remuneration

7,500

7,500

227,698

382,249

11. Interest Payable On bank loans and overdrafts

2,191

On other loans

227,698

384,440

12. Non-Recurring Expenses Non-recurring expenses comprise professional charges incurred in connection with the proposed capital restructuring of the Club.

13. Taxation The charge for taxation comprises an underprovision in respect of a prior year. No taxation arises on the results of the current year and losses are available for relief against future profits for taxation purposes. In view of the continuing use of the freehold properties no provision is considered necessary in respect of the potential tax liability which may arise in the event of the disposal of the properties at the amounts at which they are included in these accounts, and in the opinion of the Directors it is impracticable and of no useful purpose to attempt to quantify it.

14. Donations Receivable Donations receivable comprise amounts receivable from the various Everton development associations, reduced by expenses relating thereto.

1994

15. Future Capital Expenditure Capital expenditure contracted for but not provided for in these accounts amounted to Further capital expenditure authorised by the Directors on which orders had not been placed prior to the Balance Sheet date amounted to

.

..

1993

£1.4m

Nil

Nil

Nil

The Everton FootballClub CompanyUmited 21

-

•

t6

U

W

)

Notes to the Accounts for the year ended 31st May 1994 (continued) 16. Contingent Liabilities No provision is included in the accounts for transfer fees of £850,000 which are contingent upon future appearances of certain players, and signing-on fees and loyalty bonuses of £1,313,045 which will become due to certain players if they are still in the service of the Club on specific future dates. The Club, in common with other clubs in the Football Association Premier League, has been requested by the Inland Revenue to commission the preparation of a report, on tax sensitive issues. Contingent upon the outcome of such a report Everton mayor may not face additional tax liabilities arising in respect of periods ended 31st May 1994. 1994

1993

£

£

17. Cash Flow Statement (i) Reconciliation of operating profit to net cash inflow from operating activities:Operating profiV(loss)

(270,340)

1,361,360

Depreciation charges

123,028

121,865

12,791

15,642

Decrease/(increase) in stocks Increase in debtors

(173,757)

(289,485)

(Decrease)/lncrease in creditors

1,373,340

(915,532)

Net cash inflow from operating activities

1,065,062

293,850

(ii) Analysis of changes in cash and cash equivalents during the year:Balance at 1st June 1993 Net cash outflow Balance at 31st May 1994

(3.752,382)

(3,648,994)

(426,544)

(103,388)

(4,178,926)

(3,752,382)

(iii) Analysis of the balances of cash and cash equivalents as shown in the balance sheet:-

Cash at bank and in hand Bank overdrafts

•

1994

1993

Change in Year

Change in Year

£

£

£

£

110.166

68,327

41.839

57,322

(4,289.092)

(3,820,709)

(468,383)

(160,710)

(4.178.926)

(3,752,382)

(426.544)

(103.388)

22

I~\

Report of the Auditors to the Members of The Everton Football Club Company Limited

~

We have audited the financial statements on pages 10 to 18 which have been prepared under the historical cost convention as modified by the revaluation of certain fixed assets and on the basis of the accounting policies set out on page 13. Respective Responsibilities of Directors and Auditors As described on page 6 the Company's Directors are responsible for the preparation of the financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you. Basis of Opinion We conducted our audit in accordance with AUditing Standards issued by the AUditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion the financial statements give a true and fair view of the state of the Company's affairs as at 31st May 1994 and of its loss for the year then ended and have been properly prepared in accordance with the provisions of the Companies Act 1985.

Rogers, Bowler & Co, Chartered Accountants and Registered Auditors Birkenhead 18th October 1994

..

. The Everton Football ClubCompany Umlled

23

•

ANNUAL REPORT and statement of ACCOUNTS 1995

PROFIT AND LOSS ACCOUNT For the year ended 31 May 1995 Notes

Turnover

2

Direct operating costs

Gross Profit

1995

1994

£

£

13,545,624

8,858,407

(12,607,814)

(8,007,302)

937,810

851,105

Other income

3

146,471

147,846

Operating Profit

4

1,084,281

998,951

Interest receivable

5

62,760

6,333

Interest payahle

6

(143,277)

(227,698)

1,003,764

777,586

(10,377,160)

(1,228,212)

(9,373,396)

(450,626)

Profit on ordinary activities before transfer fees

7

Transfer fees

Loss on ordinary activities before taxation

(4,414) .

9

Taxation

Loss for the year

15

(9,373,396)

(455,040)

All amounts relate to continuing operations.

The company has no recognised gains or losses other than the loss for each of the above two financial years.

24

ANNUAL REPORT and statement of ACCOUNTS 1995

BALANCE SHEET At 31 May 1995 1994

1995 Notes

£

£

£

£

Fixed Assets 9,544,301

8,633,266

Tangible assets

10

Current Assets Stocks

II

208,887

68,105

Debtors

12

3,306,112

1,776,093

32,699

110,166

3,547,698

1,954,364

9,218,326

7,340,561

Cash at bank and in hand

Creditors: Amounts falling due within one year

13

Net Current Liabilities

(5,670,628)

(5,386,197)

Total Assets Less Current Liabilities

£3,873,673

£3,247,069

2,500

Representing:

Capital and Reserves Called up share capital

14

5,000

Share premium account

15

9,997,500

Revaluation reserve

15

4,527,325

4,527,325

Profit and loss account

15

(10,656,152)

(1,282,756)

Shareholders' funds

16

£3,873,673

£3,247,069

The financial statements were approved by the Board on 26th September 1995 and signed on its behalf by P R Johnson & R J Hughes, Directors

25

ANNUAL REPORT and statement of ACCOUNTS 1995

CASH FLOW STATEMENT For the year ended 31 May 1995 1995 Notes

NET CASH INFLOW FROM OPERATING ACTIVITIES

1994

£

£

17a

£

£

2,966,299

2,334,353

Returns on inve'stments and servicing of finance Interest received

62,760

Interest paid

6,333

(143,277)

(227,698)

Net cash outflow from returns on investments and servicing of finance

(80,517)

(221,365)

Taxation Tax refunded

3,382

5,322

Investing activities Payments to acquire

tangible fixed assets

(2,644,175)

Grants from The Football Trust

1,503,465

(1,392,054)

Receipts from sales of tangible fixed assets Transfer fees payable (net)

86,484

80,270

(10,377,160)

(1,228,212)

Net cash outflow from investing activities

NET CASH OUTFLOW BEFORE FINANCING

(1l,431,386)

(2,539,996)

(8,542,222)

(421,686)

Financing Issue of new share capital, including premium

10,000,000

Loans repaid

(53,352)

(4,858)

Net cash inflow/(outflow) from financing

17c

INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 17b

26

9,946,648

(4,858)

£1,404,426

.£ (426,544)

ANNUAL REPORT and s t at e m e n t of ACCOUNTS 1995

NOTES TO THE ACCOUNTS For year ended 31 May 1995 ACCOUNTING BASIS AND POLICIES These accounts have been prepared on the historical cost basis of accounting as modified to include valuations of the Club's properties, and in accordance with applicable UK accounting standards, and accounting policies consistent with those adopted previously. The principal accounting policies are as fol1ows:(i) Turnover Turnover is stated exclusive of value added tax and match receipts are included net of percentage payments to visiting clubs, The FA. Premier League and The Football Association.

(ii) Fixed Assets and Depreciation It is the Club's policy to maintain the value and extend the life of its properties by regular expenditure charged to revenue, and to revalue the properties every four years and adjust the book values accordingly. However, in view of the significant developments in progress at the year end, the directors felt that it would be inappropriate to undertake the revaluation due this year and have postponed it for one year. Having regard to the aforementioned policy, depreciation is not provided on the Club's properties as the directors are of the opinion that the sum involved would be immaterial. Depreciation on other fixed assets has been calculated at 25% on the book value.

(iii) Stocks Stocks are valued at the lower of cost and net realisable value. (iv) Transfer fees Transfer fees payable and receivable are dealt with in the profit and loss account in the year in which the transfer contract is signed. (v) Signing-on Fees and Loyalty Bonuses Signing-on fees and loyalty bonuses are charged on the accruals basis and those instalments due in the future on continued service are not provided for but are noted as contingent liabilities at Note 19. (vi) Grants Grants receivable from The Football Trust are deducted from the expenditure to which they relate. (vii) Deferred Taxation Deferred tax is provided at current rates in respect of the tax effect of all material timing differences, to the extent that it is probable that a liability or asset will crystallize in the foreseeable future. 1995 £

TURNOVER Match receipts and income from related footballing activities Commercial and sundry income

OTHER INCOME <:

Donations from development associations Rents receivable

27

1994 £

10,322,364 3,223,260

6,721,342 2,137,065

13,545,624

8,858,407

1995 £

1994 £

127,792 18,679

122,050 25,796

146,471

147,846

ANNUAL REPORT and statement of ACCOUNTS 1995

OPERATING PROFIT The operating profit is stated after charging: Depreciation Costs of capital restructuring Auditors' remuneration - for audit - for other services

INTEREST RECEIVABLE

Bank deposit interest Other interest

INTEREST PAYABLE

On bank overdrafts On other liabilities

TRANSFER FEES

1995 £

1994 £

143,191 106,315 9,000 11,650

123,028 131,650 7,500 8,950

1995 £

1994

52,485 10,275

6,333

62,760

6,333

1995 £

1994 £

143,215 62

227,674 24

143,277

227,698

1995

1994 £

.£ Transfer fees payable and related levies Transfer fees receivable

PARTICULARS OF EMPLOYEES

£

(12,727,160) 2,350,000

(3,803,212) 2,575,000

(10,377,160)

(1,228,212)

1995 Number

1994 Number

The average weekly number of employees during the year was as follows: Playing, training and management Maintenance and administration Catering and sales

Aggregate payroll costs were as follows:-

Wages and salaries Social security costs Other pension costs

28

57 35 50

54 29 31

142

114

1995 £

1994 £

6,679,794 587,216 164,348

4,597,099 390,722 188,390

7,431,358

5,176,211

ANNUAL REPORT and statement of ACCOUNTS 1995

Other pension costs comprise contributions made by the Company in respect of the majority of its permanent employees to pension schemes which are independently administered by the Football League Limited, together with contributions made to individual pension contracts with insurance companies under agreements with certain employees. All pension arrangements are defined contribution schemes and contributions are charged to the profit and loss account in the year to which they relate. The directors received no emoluments from the company during the year.

TAXATION No taxation arises on the results of the current year and losses are available for relief against future profits for taxation purposes. In view of the continuing use of the freehold properties by the company in the future, no provision is considered necessary in respect of the potential tax liability which might arise in the event of the disposal of the properties at the amounts at which they are included in these accounts, and in the opinion of the directors it is impracticable and of no useful purpose to attempt to quantify it.

TANGIBLE FIXED ASSETS Properties £ Cost or valuation At 31 May 1994 Additions Grants Disposals Revaluation adjustment

8,305,326 2,342,397 (1,503,465)

Plant and equipment £

Vehicles £

Total £

869,684 254,348

251,744 47,430 (170,192)

9,426,754 2,644,175 (1,503,465) (170,192)

At 31 May 1995

9,144,258

1,124,032

128,982

10,397,272

Cost

2,660,258

1,124,032

128,982

3,913,272

Valuation in April 1991

6,484,000 9,144,258

6,484,000 1,124,032

128,982

10,397,272

Depreciation At 31 May 1994 Provided during year On disposals

689,579 108,613

103,909 34,578 (83,707)

793,488 143,191 (83,707)

At 31 May 1995

798,192

54,780

852,972

Net book value At 31 May 1995

9,144,258

325,840

74,202

9,544,300

At 31 May 1994

8,305,326

180,105

147,835

8,633,266

Expenditure of £1,552,202 incurred during the year on the completion of the new Park End Stand is included above under additions to properties. The aggregate cost of the stand over the past two years is £2.7 million, in respect of which the Club has received or been promised grants of £1.5 million from the Football Trust. The Club's properties are freehold, with the exception of certain minor residential properties which are long leasehold.

29

ANNUAL REPORT and statement of ACCOUNTS 1995

10 ~1 '~

1

12 ...iI...

If the freehold properties had not been revalued regularly since 1983 they would have been included at the following amounts on the basis previously appertaining: 1995 £

1994 £

Cost Aggregate depreciation

4,800,920 162,846

3,958,523 156,876

Net book value

4,638,074

3,801,647

STOCKS

1995 £

1994 £

Refreshments. souvenirs and goods for resale Maintenance stocks

199,982 8,905

66,188 1,917

208,887

68,105

DEBTORS

1995 £

1994

Trade debtors Other debtors

2,661,737 211,781 432,594

1,350,845 258,975 166,273

3,306,1l2

1,776,093

Prepayments and accrued income

e

Other debtors includes a bridging loan of £190,000 (1994 - Nil) to an officer of the company other than a director.

n

CREDITORS, Amounts falling due ,"'' , within one year 'e....<1}i Trade creditors

..)1

Social security and other taxes Pension scheme premiums Other creditors Accruals and deferred income

1995 £

1994 £

4,206,456 824,069 1,307 1,379,295

2,053,324 130,658 905 2,683 808,197

6,411,127

2,995,767

2,807,199

2,350 4,289,092 53,352

9,218,326

7,340,561

Corporation tax

Bank overdraft Loan from brewery

The bank overdraft is secured by fixed and floating charges over all the company's assets and undertakings.

30

ANNUAL REPORT and statement of ACCOUNTS 1995

14

EQUITY SHARE CAPITAL

1995 £

1994 £

Authorised: 5,000 (1994 - 2,500) stock units of £1 each

5,000

2,500

Allotted, issued and fully paid: 5;000 (1994 - 2,500) stock units of £1 each

5,000'

2,500

An increase in the authorised share capital of the company from £2,500 to £5,000 and a rights issue of shares were approved by a special resolution passed at an extraordinary general meeting of the company held on 26 July 1994. Following the approval of the rights issue. 2,500 stock units of £1 each were allotted and fully paid up for cash at £4,000 per stock unit to provide additional working capital.

RESERVES

Share

Profit and Loss

Premium Account

Revaluation Reserve

£

£

£

4,527,325

(1,282,756)

Balance at 1 June 1994

Account

Premium arising on rights issue

of shares

9,997,500

Loss for the year

Balance at 31 May 1995

1

(9,373,396)

9,997,500

4,527,325

(10,656,152)

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 1995 £ Loss for the year New share capital subscribed, including premium

(9,373,396)

1994 £ (455,040)

10,000,000

Net addition to shareholders' funds

Shareholders' funds at I June 1994

626,604 3,247,069

(455,040) 3,702,109

Shareholders' funds at 31 May 1995

3,873,673

3,247,069

CASH FLOW STATEMENT

(a) Reconciliation of operating profit to net cash inflow from operating activities: 1995 £

1994 £

Operating profit Depreciation charges Decrease/llncrease) in stocks Increase in debtors Increase in creditors

1,084,281 143,191 (140,782) (1,535,751) 3,415,360

998,951 123,028 12,791 (173,757) 1,373,340

Net cash inflow from operating activities

2,966,299

2,334,353

31

ANNUAL REPORT and statement of ACCOUNTS 1995

17

(b) Analysis of cash and cash equivalents:

Cash at bank and in band Bank overdrafts

Change in year

Change in

£

£

1995 £

1994 £

32,699

110,166

(77,467)

(2,807,199)

(4,289,092)

1,481,893

(468,383)

(2,774,500)

(4,178,926)

1,404,426

(426,544)

year

41,839

(c) Analysis of changes in financing: Sbare capital (including

Balance at 1 June 1993

premium)

Loans

£

£ 2,500

58,210 (4,858)

2,500

53,352

from financing

10,000,000

(53,352)

Balance at 31 May 1995

10,002,500

Net cash outflow from financing

Balance at 31 May 1994 Net casb inflow/(outflow)

FUTURE CAPITAL EXPENDITURE 1995

1994

£2.4m

£l.4m

Nil

Nil

Capital expenditure contracted for but not provided for in these accounts amounted to

Further capital expenditure authorised by the directors on which orders had not been

placed prior to the Balance Sheet date amounted to

CONTINGENT LIABILITIES No provision is included in the accounts for transfer fees of £934,000 which are contingent upon future appearances of certain players, and signing-on fees and loyalty bonuses of £2,644,863 which will become due to certain players if they are still in the service of the Club on specific future dates. The Club, in common with other clubs in The Football Association Premier League, has been requested by the Inland Revenue to commission the preparation of a report on tax sensitive issues. Contingent upon the outcome of such report, Evertori mayor may not face additional tax liabilities arising in respect of earlier periods.

32

ANNUAL REPORT a n d statement of ACCOUNTS 1995

REPORT OF THE AUDITORS TO THE MEMBERS OF THE EVERTON FOOTBALL CLUB COMPANY LIMITED We have audited the financial statements on pages 12 to 20 which have been prepared" under the historical cost convention as modified by the revaluation of certain fIXed' assets and on the basis of the accounting policies set out on page 15.

Respective Responsibilities of Directors and Auditors As described on page 9 the company's directors are responsible for the preparation of the financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you.

Basis of Opinion We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment

of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed. Wc planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from

material misstatement, whether caused by fraud or other irregularity or error- In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion In our opinion the financial statements,give a true and fair view of the state of the

company's affairs as at 31 May 1995 and of its loss for the year then ended and have been properly prepared in accordance with the provisions of the Companies Act 1985.

Rogers, Bowler & Co Chartered Accountants and Registered Auditors

Birkenhead 12 October 1995

33

Annual Report and statement of Accounts 1996

PROFIT AND LOSS ACCOUNT For the year ended 31 May 1996 Notes Turnover

2

1996 £ 17,004,370

1995 £ 13,545,624

(15,851,634)

(12,607,814)

+ Direct operating costs Gross Profit Other income

3

1,152,736 141,137

937,810 146,471

Operating Profit Interest receivable Interest payable

4 5 6

1,293,873 6,170 (858,988)

1,084,281 62,760 (143,277)

Profit on ordinary activities before transfer fees Net transfer fees Loss on ordinary activities before taxation Taxation

7

441,055 (8,403,019)

1,003,764 (10,377,160)

(7,961,964)

(9,373,396)

9

Loss for the year

15

(7,961,964)

(9,373,396)

All amounts relate to continuing operations.

The company has no recognised gains or losses other than the loss for each of the above two financial years.

There is no material difference between reported profits and losses and historical cost profits and losses.

34

Annual Report and statements of Accounts 1996

BALANCE SHEET At 31 May 1996 1996

Notes Fixed Assets Tangible assets Current Assets Stocks Debtors Cash at bank and in hand

14,145,206

10

11 12

£

£

£

684,838 1,080,698 37,246 1,802,782

Creditors Amounts falling due within one year

13

(9,218;?26)

(18,899,989)

Net Current Liabilities Total Assets Less Current Liabilities

(17,097,207)

(5,670,628)

(2,952,001)

3,873,673

Capital and Reserves Called up share capital Share premium account Revaluation reserve Profit and loss account

14 15 15 15

5,000 9,997,500 5,663,617 (18,618,118)

5,000 9,997,500 4,527,325 (10,656,152)

Shareholders' funds

16

(2,952,001)

3,873,673

The financial statements were approved by the Board on and signed on its behalf by

P. R. Johnson & R. J. Hughes Directors

35

Annual Report and statement of Accounts 1996

CASH FLOW STATEMENT For the year ended 31 May 1996 1996 Notes

£

1995 £

£

£

NET CASH INFLOW FROM OPERATING ACTIVITIES

17a

Returns on investments and servicing of finance Interest received Interest paid

782,433

6,170 (604,442)

Net cash outflow from returns on investments and finance

2,966,299

62,760 (143,277) (598,272)

Taxation Tax refunded Investing activities Payments to acquire tangible fixed assets Grants from The Football Trust Receipts from sales of tangible fixed assets Transfer fees paid Transfer fees received

(80,517)

3,382 (3,602,878)

(2,644,175)

100,000

1,503,465

(9,183,019) 705,000

86,484 (12,727,160) 2,350,000

Net cash outflow from investing activities

(11,980,897)

(11,431,386)

(11,796,736)

(8,542,222)

NET CASH OUTFLOW BEFORE FINANCING

Financing Issue ofnew share capital, including premium Loans repaid

10,000,000 (53,352)

Net cash inflow from financing

9,946,648

(DECREASE)IINCREASE IN CASH AND CASH EQUIVALENTS

17b

(11,796,736)

36

1,404,426

Annual Report and statement of Accounts 1996

NOTES TO THE ACCOUNfS For year ended 31 May 1996

1.

ACCOUNTING BASIS AND POUCIES These accounts have been prepared on the historical cost basis of accounting as modified to include valuations of the Club's properties, and in accordance with applicable UK accounting standards and accounting policies consistent with those adopted previously. The principal accounting policies are as follows: (i) Turnover Turnover is stated exclusive of value added tax and match receipts are included net of percentage payments to visiting clubs, The F.A. Premier League and The Football Association. (ii) Fixed Assets and Depreciation Depreciation is not provided on freehold properties. It is the group's policy to maintain all its properties in such a condition that the estimated aggregate residual values are at least equal to their book values. Consequently, any element of depreciation would, in the opinion of the directors, be immaterial. Residual values are appraised each year by reference to the estimated depreciated replacement cost of the properties in aggregate, and the Goodison Park stadium in particular. Provision will be made against the cost of the properties in the event of any permanent diminution in their values. Depreciation on other fixed assets has been calculated at 25% on book value. (iii) Stocks Stocks are valued at the lower of cost and net realisable value.

(iv) Transfer Fees Transfer fees payable and receivable are dealt with in the profit and loss account in the year in which the transfer contract is signed. (v) Signing-on Fees and Loyalty Bonuses Signing-on fees and loyalty bonuses are charged on the accruals basis and those instalments due in the future on continued service are not provided for but are noted as contingent liabilities at Note 19. (vi) Grants Government grants towards freehold properties are deducted from the cost of these assets. Although this treatment is permitted by Statement ofStandard Accounting Practice No 4, it is not in accordance with Schedule 4 to the Companies Act 1985 under which the freehold properties should be stated at their purchase price or production cost and the government grants treated as deferred income and released to profit and loss account over the useful life of the corresponding assets.

The directors are of the opinion that, as the freehold properties are not depreciated as explained above and the government grants would therefore remain in the balance sheet in perpetuity, the treatment otherwise required by the Companies Act 1985 would not present a true and fair view of the group's effective investment in non-depreciating assets. The amount of grants deducted from the properties are set out in note 10, which therefore shows the effect of the company's policy. (vii) Deferred Taxation Deferred tax is provided at current rates in respect ofthe tax effect ofall material timing differences, to the extent that it is probable that a liability or asset will crystallise in the foreseeable future.

37

Annual Report andstatement ofAccounts 1996

2.

TURNOVER

1996 £

Match receipts and income from related footballing activities Commercial and sundry income

3.

OTHER INCOME

Donations from development associations Rents receivable

4.

OPERATING PROFIT

The operating profit is stated after charging: Depreciation Costs ofcapital restructuring Auditors'remuneration - for audit for other services

5.

10,322,364 3,223,260

17,004,370

13,545,624

1996 £ 119,699 21,438

1995 £ 127,792 18,679

141,137

146,471

1996 £

1995 £

14,000 7,000

143,191 106,315 9,000 11,650

1996

1995

£ Bank deposit interest Other interest

6,170 6,170

6.

INTEREST PAYABLE

1996

£ On bank overdrafts On other liabilities

38

£

12,520,006 4,484,364

204,556

INTEREST RECEIVABLE

1995

£ 52,485 10,275 62,760

1995

£

857,259 1,729

143,215 62

858,988

143,277

Annual Report and statement of Accounts 1996

7.

TRANSFER FEES

Transfer fees payable and related levies Transfer fees receivable

8.

PARTICULARS OF EMPLOYEES

1996 £ (9,183,019) 780,000

1995 £ (12,727,160) 2,350,000

(8,403,019)

(10,377,160)

Number

65 61 44

57 35 50

170

142

1996 £ 8,976,377 768,148 320,035

1995 £ 6,679,794 587,216 164,348

10,064,560

7,431,358

The average weekly number of employees during the year was as follows: Playing, training and management Management and administration Catering and sales

Aggregate payroll costs were as follows: Wages and salaries Social security costs Other pension costs

I~~?

1996 Number

Other pension costs comprise contributions made by the Company in respect of the majority of its permanent employees to pension schemes which are independently administered by the Football League Limited, together with contributions made to individual pension contracts with insurance companies under agreements with certain employees. All pension arrangements are defined contribution schemes and contributions are charged to the profit and loss account in the year to which they relate. The directors received no emoluments from the company during the year.

9.

TAXATION

No taxation arises on the results of the current year and losses are available for relief against future profits for taxation purposes. In view of the continuing use of the freehold properties by the company in the future, no provision is considered necessary in respect of the potential tax liability which might arise in the event of the disposal of the properties at the amounts at which they are included in these accounts, and in the opinion of the directors it is impracticable and of no useful purpose to attempt to quantify it.

39

Annual Report and statement ofAccouuts1996

10.

TANGIBLE FIXED ASSETS

Properties £ Cost or valuation at 31 May 1995 Additions Grants Disposals Revaluation adjustment At 31 May 1996

9,144,258 3,333,450

Plant and equipment £ 1,124,032 409,960 (100,000)

Vehicles £

Total £

128,982 25,760

10,397,272 3,769,170 (100,000) (8,800) 1,136,292

(8,800) 1,136,292 13,614,000

1,433,992

145,942

Depreciation At 31 May 1995 Provided during year On disposals

798,192 167,465

54,780 31,866 (3,575)

At 31 May 1996

965,657

83,071

1,048,728

15,193,934

852,972 199,331 (3,575)

Net book value At 31 May 1996

13,614,000

468,335

62,871

14,145,206

At 31 May 1995

9,144,258

325,840

74,202

9,544,300

The Club's properties are freehold, with the exception of certain minor residential properties which are long leasehold. The Club's premises at Goodison Park (including the Megastore), the training grounds at Bellefield and Netherton, together with certain minor residential properties were revalued at £13,614,000 by Edward Symmons & Partners, Chartered Surveyors, as at the 14th May 1996. Their book value has been adjusted accordingly and the surplus on revaluation of £1,136,292 has been credited to reserves. The freehold buildings at Goodison Park (including the Megastore) were valued at depreciated replacement cost, and the land at open market value for its existing use. The valuation of the training grounds has been prepared on an existing use value basis, and the residential properties have been revalued at open market value basis with the benefit of full vacant possession or subject to and with the benefit of the various 1eases/agreements as appropriate. Ifthe freehold properties had not been revalued regularly since 1983they would have been included at the following amounts on the basis previously appertaining:

Cost Aggregate depreciation

1996 £ 8,134,370 169,944

1995 £ 4,800,920 162,846

I'

Net book value

7,964,426

4,638,074

I

I. I

I

40

Annual Report and statement of Accounts 1996

11.

STOCKS Refreshments, souvenirs and goods for resale Maintenance stocks

12.

DEBTORS Trade debtors Other debtors Prepayments and accrued income

1996 £ 675,933 8,905

1995 £ 199,982 8,905

684,838

208,887

1996 £ 708,654 195,665 176,379

1995 £ 2,661,737 211,781 432,594

1,080,698

3,306,112

Other debtors includes a bridging loan of £190,500 (1995 - £190,500) to an officer of the company other than a director

13.

1996 £ 595,149 628,407

CREDITORS Amounts falling due within one year Trade creditors Social security and other taxes Pension scheme premiums Other creditors Accruals and deferred income

56,133 3,011,818

Bank overdraft

1995 £ 4,206,456 824,069 1,307 1,379,295

4,291,507 14,608,482

6,411,127 . 2,807,199

18,899,989

9,218,326

The bank overdraft is secured by fixed and floating charges over all the company's assets and undertakings.

14.

1996 £

EQUITY SHARE CAPITAL

1995 £

Authorised: 5,000 (1995 - 5,000) stock units of£1 each

5,000

5,000

Allotted, issued and fully paid: 5,000 (1995 - 5,000) stock units of £1 each

5,000

5,000

41

Annual Report and statement of Accounts 1996

15.

16.

RESERVES

Share Premium Account

£

£

Balance at I June 1995 Loss for the year Adjustment on revaluation of properties

9,997,500

4,527,325

Balance at 31 May 1996

9,997,500

RECONCILiATION OF MOVEMENTS iN SHAREHOLDERS' FUNDS

£ (10,656,152) (7,961,964)

5,663,617

(18,618,116)

1996

1995

£ (7,961,964)

£ (9,373,396) 10,000,000

1,136,292

Net (reduction)/addition to shareholders' funds Shareholders' funds at 1 June 1995

(6,825,672) 3,873,671

626,604 3,247,069

Shareholders' funds at 31 May 1996

(2,952,001)

3,873,673

1996

1995

£ 1,293,873 204,556 (475,951) 2,300,414 (2,540,459)

1,084,281 143,191 (140,782) (1,535,751) 3,415,360

CASH FLOW STATEMENT (a) Reconciliation of operating profit to net cash inflow from operating activities: Operating profit Depreciation charges Increase in stocks Increase in debtors Increase in creditors Net cash inflow from operating activities

782,433

(b) Analysis of cash and cash eqnivalents 1996

£ Cash at bank and in hand Bank overdrafts

18.

Profit and Loss Account

1,136,292

Loss for the year New share capital subscribed, including premium Adjustment on revaluation of properties

17.

Revaluation Reserve

£

2,966,299 Change in year

£

37,246 (14,608,482)

32,699 (2,807,199)

4,547 (11,801,283)

(14,571,236)

(2,774,500)

(11,796,736)

1996 £

1995 £

512,000

2,400,000

FUTURE CAPlTAL EXPENDITURE Capital expenditure contracted for but not provided for in these accounts amounted to

42

1995

£

Annual Report and statement of Accounts 1996

19.

CONTINGENT LIABILITIES No provision is included in the accounts for transfer fees of£795,000 which are contingent upon future appearances of certain players, and signing-on fees and loyalty bonuses of £2,073,633 which will become due to certain players if they are still in the service of the Club on specific future dates. The Club, in conunon with other clubs in The Football Association Premier League, has prepared a report for the Inland Revenue on certain tax sensitive issues. Negotiations are continuing with the Inland Revenue and at this time no assessment to tax has been raised by them. Contingent on the outcome of such negotiations, Everton mayor may not face additional tax liabilities arising in respect of earlier periods. The directors consider that given the uncertainties involved they are unable to make a reasonable assessment as to any potential liability which may arise.

20.

POST BALANCE SHEET EVENTS Since 31st May 1996 the Club has incurred £2.7 million net transfer fees payable.

43

REPORT OF THE AUDITORS TO THEMEMBERS OF THEEVERTON FOOTBALL CLUBCOMPANYLIMITED We have audited the financial statements on pages 12 to 20.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS As described on page 9 the company's directors are responsible for the preparation of the financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you.

BASIS OF OPINION We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, ofevidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and ofwhether the accounting polices are appropriate to the company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy ofthe presentation ofinformation in the financial statements.

OPINION In our opinion the financial statements give a true and fair view of the state of the company's affairs as at 31st May 1996 and of its loss for the year then ended and have been properly prepared in accordance with the Companies Act 1985.

Richmond House I Rumford Place Liverpool L3 9QY 22nd August 1996

KPMG Chartered Accountants Registered Auditors

44

PART IV ADDffiONAL INFORMATION 1. Activities and incorporation Everton was incorporated on 14th June, 1892 in England under the Companies Acts 1862-1890. Everton is registered in England and Wales under number 36624 and is governed by the Companies Act 1985. The principal activity of the Company is that of a professional football club.

2.

Capital

The authorised and issued capital of the Company as at 22nd August, 1996, and as it will be following the Rights Issue, is as follows:

Present Issuedand Authorised Fully Paid Stock units -Numbers -Nominal value

5,000 £5,000

5,000 £5,000

Following the Rights Issue Issuedand Authorised Fully Paid 35,000 £35,000

35,000 £35,000

Following the Rights Issue, the Directors will have authority to allot the authorised and unissued capital of the Company as set out in the special resolution in the attached notice of Extraordinary General Meeting of the Company.

3. (a)

Directors' and other interests The interests ofthe Directors in the Stock Units as notified to the Company pursuant to sections 324, 328 and 346 of the Companies Act 1985 (the "Act") or shown in the register of such interests required to be maintained under the provisions of section 325 of the Act, are as follows:

Number ofStock Units Beneficial Non-beneficial 2,920 15 121 3 103 10 17 25 15 112

PRJohnson Sir Desmond H Pitcher DL BCFinch RJ Hughes Sir Philip D Carter CBE DrDMMarsh KMTamlin WKenwright A J L Abercromby Lord Grantchester

Under the Articles of Association of the Company, stockholders are not entitled to exercise the voting rights attaching to any stock units which are registered in their names for less than three months prior to the date of any General Meeting of the Company. (b)

In addition to those interests referred to in paragraph 3(a) above, the Company has been notified of the following other interests in 3 per cent. or more of the current issued capital of the Company:

Stock Units Beneficial Non-beneficial Number Percentage Number Percentage The Lady Betty Grantchester Settlement Mrs Janatha Stubbs

249 249

4.98

4.98

The votes attaching to the Stock Units held by The Lady Betty Grantchester Settlement are exercisable by the trustees who are The Lady Grantchester and Mrs Janatha Stubbs. 45

(c)

Save as disclosed in paragraphs 3(a) and 3(b) above, the Directors are not aware of any person interested in 3 per cent. or more of the current issued capital of the Company.

(d)

K M Tamlin was until 30th June, 1994 a Partner in, and is now a Consultant with, the firm of Cuff Roberts, Solicitors, who provide legal services to the Company. None of the other Directors has or has had any interest in any transaction which is or was unusual in its nature or conditions or significant to the business of the Company and which was effected during the current or immediately preceding financial year or during any earlier financial year and which remains in any respect outstanding or unperformed.

(e)

So far as is known to the Company, and save as disclosed in paragraphs 3(a) and 3(b) above, no persons directly or indirectly, jointly or severally, exercise or could exercise control over the Company.

(f)

In the twelve months prior to 22nd August, 1996, there have been the following dealings for value in stock units by the Directors ofthe Company or parties connected therewith:

Transfer date

Registration date

Parties

Number of Stock Units

Total consideration

24.08.95

21.11.95

J W Bailey to Lord Grantchester

2

£5,000

20.09.95

26.10.95

S Black to A J L Abercromby

I

£2,500

22.09.95

25.01.96

M C Halliday to Lord Grantchester

1

£2,800

22.09.95

26.10.95

C Jenks to Lord Grantchester

2

£5,000

28.09.95

26.10.95

P Hughes to B C Finch

2

£5,600

15.11.95

25.01.96

C K Farrall to Lord Grantchester

5

£14,000

27.11.95

25.01.96

J A Taggart to A J L Abercromby

5

£14,000

27.11.95

25.01.96

S Traynor to A J L Abercromby

1

£2,800

20.12.95

25.01.96

N W Jones to B C Finch

2

£5,500

20.12.95

29.02.96

D Parry to A J L Abercromby

2

£5,500

20.12.95

29.02.96

K J Parry to A J L Abercromby

1

£2,750

20.12.95

29.02.96

Mrs M Parry to A J L Abercromby

2

£5,500

19.06.96

22.08.96

J Moores to AlB as trustee of The Peter Johnson Settlement

523

£1,372,875

AlB as trustee of The Peter Johnson Settlement to B C Finch

100

£262,500

02.08.96

22.08.96

(g)

Save as disclosed above, neither AlB, as trustee of The Peter Johnson Settlement, the Company, the Directors, nor any bank, financial or other professional adviser thereof, owned or controlled or was otherwise interested, at 22nd August, 1996 or has dealt for value in the twelve months prior to such date, in any Stock Units.

(h)

None of the Directors has a service contract with the Company and it is not intended that the Directors will receive any remuneration or benefits in kind from the Company in the current financial year.

4.

Memorandum aud Articles of Association

Set out below is a summary of the principal provisions of the Memorandum and Articles of Association of the Company:

(a)

Principal objects ofthe Company The principal objects of the Company are set out in Clause 3(a) of its Memorandum of Association and include carrying on the business of a Football and Athletic Club.

(b)

Increase in the capital ofthe Company and Variation ofRights The capital of the Company and the rights of the stock units can only be increased or varied by the passing of a special resolution of the stockholders.

(c)

Allotment ofnew shares Subject to any direction to the contrary given by the meeting that sanctions any increase of capital, all new shares shall be offered to the stockholders in proportion to existing stock units held by them and such offer shall be made by notice specifying the number of shares to which the stockholder is entitled and 46

limiting the time within which the offer, if not accepted, is deemed to be declined. After the expiration of such time or when the stockholder to whom such notice is given declines to accept the shares offered (if earlier) the Directors may dispose of the shares in such manner as they think most beneficial to the Company. (d)

Voting Rights Votes may be given either personally or by proxy. If given by proxy the instrument appointing the proxy must be in the form set out in the Articles of Association. On a show of hands every stockholder present in person shall have one vote and upon a poll every stockholder present in person or by proxy shall have one vote for each stock unit held by him. If two or more persons are jointly entitled to stock units, the stockholder whose name stands first in the Register of Stockholders as one of the holders of such stock units and no other, shall be entitled to vote in respect of the same. No stockholder shall be entitled to vote at any General Meeting unless all calls due from him have been paid. No stockholder shall be entitled to vote at any meeting in respect of any stock units that he has acquired by transfer unless he has possessed the stock unit and been the registered holder of it for at least three months prior to the time of holding the meeting at which he proposes to use the vote attaching to that stock unit.

(e)

Transfer and Transmission ofStock Units The instrument of transfer of any stock unit in the Company must be executed both by the transferor and the transferee and the transferor shall be deemed to remain a holder of such stock unit until the name of the transferee is entered into the Register of Stockholders. The Company may decline to register any transfer of stock units made by a member who is indebted to it. The transfer books shall be closed during the fourteen days immediately preceding the Annual General Meeting in each year. The executors or administrators of a deceased stockholder will be the only persons recognised by the Company as having any title to his stock units. Any person becoming entitled to stock units in consequence of the death of any stockholder may be registered as a stockholder upon such evidence being produced as may from time to time be required by the Company. Alternatively, any person who has become entitled to stock units in consequence of the death of a stockholder may, instead of being registered himself, elect to have some person to be named by him registered as a transferee of such stock units.

(I)

Winding up If the Company is wound up or dissolved, any surplus assets remaining after satisfaction of all debts and liabilities of the Company shall be applied, first, in repaying to the stockholders of the Company the amount paid on their stock units respectively, and if such surplus assets shall be insufficient to repay the same amount in full they shall be applied rateably, so that the loss shall fall upon the members in proportion to the amount called up on their stock units respectively and no stockholder shall be entitled to have any call made upon other stockholders for the purpose of adjusting his rights; but where any call has been made and has been paid by some of the stockholders, such call shall be enforced against the remaining stockholders for the purpose of adjusting the rights of the stockholders between themselves. If such surplus assets shall be more than sufficient to pay to the stockholders the whole amount paid upon their stock units, the balance shall be given to The Football Association Benevolent Fund or to some other company, club or institute in the Metropolitan County of Merseyside having objects similar to those contained in the Memorandum of Association of the Company, or to any local charity or charitable or benevolent institution situate within the same County, such company, club, institute, institution or charity to be decided upon and such assets apportioned among all or any of such companies, clubs, institutes, institutions or charities by the stockholders of the Company at or before the time of dissolution as they shall direct, or, in default of any such decision or apportionment by the stockholders of the Company, the same shall be decided upon and apportioned by a Judge of the High Court of Justice having jurisdiction in such winding-up or dissolution as he shall determine, or such assets may be disposed of in such other manner as the stockholders of the Company with the consent of The Football Association shall determine.

47

5. Underwriting Agreement On 22nd August, 1996the Company (I) entered into the Underwriting Agreement with AlB, as trustee of The Peter Johnson Settlement (2). The Underwriting Agreement is conditional, inter alia, upon the special resolution being passed at the Extraordinary General Meeting. If the special resolution is passed and the Rights Issue implemented, the rights to any new shares which are not taken up by Qualifying Stockholders, any persons in whose favour the rights have been renounced or any subsequent transferee thereof, by 6.00 pm on 9th October, 1996,will lapse and the new shares to which the rights relate will be allotted to AlB, as trustee ofThe Peter Johnson Settlement, at the price of £500 per share. No underwriting fees or commissions are payable under the Underwriting Agreement. The Underwriting Agreement contains certain warranties and indemnities by the Company. A copy of the Underwriting Agreement is available for inspection as set out in paragraph 15 below. 6. The Peter Johnson Settlement The Peter Johnson Settlement was established on 12th May, 1989, between P R Johnson and AlB, the sole trustee, and is for the benefit of P R Johnson and his family. The registered office of AlB Trust Company (Jersey) Limited is AlB House, PO Box 468, Grenville Street, St Helier, Jersey, Channel Islands, JE4 8WT.

7. Indebtedness At the close of business on 3lstJuly, 1996, Everton had the following indebtedness: Bank overdrafts (secured) Bank overdrafts (subject to guarantee by P R Johnson)

£13,500,000 £2,221,819

At 31st July, 1996, Everton had contingent liabilities of £795,000 in respect of transfer fees which are contingent upon future appearances of certain players; in addition, in respect of certain players, part of any profits on a future sale by Everton will be payable to their former clubs. Signing-on fees and loyalty bonuses of £3,243,408 will become due to certain players if they are still in the service of Everton on specific future dates. Everton, in common with other clubs in The Football Association Premier League, has submitted a report on tax sensitiveissues as required by the Inland Revenue. Contingentupon the outcome of such a report, Everton mayor may not face additional tax liabilities arising in respect of a seven year period ended on 5th April, 1994. Save as aforesaid, at the close of business on 31st July, 1996, Everton did not have any loan capital (including term loans) outstanding or created but unissued, nor any mortgages, charges, debentures or other loan capital or other borrowings or indebtedness in the nature of borrowings including bank overdrafts and liabilities under acceptances (other than normal trade bills), acceptance credits, finance leases, hire purchase commitments or guarantees or other material contingent liabilities. Working capital The Directors are of the opinion that, after taking into account the bank facilities available to the Company and the net proceeds of the Rights Issue, the Company will have sufficient working capital for its present requirements.

8.

9. Material contract Save as disclosed below, there have been no contracts entered into by the Company, other than in the ordinary course ofbusiness, within the two years immediately preceding the date of this document, which are or maybe material: The Underwriting Agreement dated 22nd August, 1996between the Company (I) and AlB, as trustee of The Peter Johnson Settlement (2), further details of which are set out in paragraph 5 of this Part IV above. 10. Litigation The Company is not involved in any legal or arbitration proceedings which may have or have had during the twelve months preceding the date of this document, a significant effect on the Company's financial position nor, as far as the Directors are aware, are any such proceedings pending or threatened against the Company. 48

11.

Dividends

Dividends payable on Stock Units are limited by the Rules of The Football Association which provide, inter

alia: "Rule 34(a)(i) Dividends - A larger dividend shall not be declared than the maximum dividend allowed from time to time by the Association and may be cumulative for a period not exceeding three years (that is to say the past three consecutive years). Until otherwise determined by the Association the maximum dividend payable in respect of any year shall be fifteen per cent. of the amounts credited as paid up on such share." 12. Taxation The comments below are only a guide to the general position based on the Company's understanding of Uuited Kingdom law and practice. They may not apply to certain classes of persons. If you are in any doubt as to your tax position or if you are subject to tax in a jurisdiction other than tbe United Kingdom, you should consult your own professional advisers. . Under current UK taxation legislation there is no withholding tax on dividends. When paying a dividend, however, the Company is required to account to the Inland Revenue for advance corporation tax ("ACT"). The rate of ACT is currently equal to 25 per cent. of the amount of the cash dividend. An individual stockholder who is resident in the United Kingdom for tax purposes (a "UK individual stockholder") will be entitled to a tax credit in respect of any dividend received from the Company and will be taxable on the aggregate ofthe dividend and the tax credit (the "gross dividend"). The value ofthe tax credit will be a quarter ofthe dividend. The gross dividend will be treated as the top slice ofan individual's income. A UK individual stockholder who, due to his personal circumstances, is not liable to income tax in respect of the gross dividend (or any part thereof) will be able-to reclaim the tax credit (or part thereof) from the Inland Revenue. In the case of a UK individual stockholder who is liable to income tax only at the lower rate or the basic rate, the tax credit will in each case discharge his tax liability in respect of the gross dividend and he will have no further tax to pay and no right to claim any repayment from the Inland Revenue. In the case of a UK individual stockholder who is liable to income tax at the higher rate, the tax credit will be set against but will not fully discharge his tax liability on the gross dividend and he will have to pay additional tax equal (at present rates) to 20 per cent. of the gross dividend, to the extent that such a sum, when treated as a top slice of his income, falls above the threshold for higher rate income tax. United Kingdom resident trustees who are liable to tax at the basic rate only will have no further income tax liability on a dividend they receive, as the tax credit attaching to the dividend will discharge their liability to tax on that dividend. United Kingdom resident trustees who are liable to income tax at the rate applicable to trusts (currently 34 per cent.) will have an additional tax liability equal to 14 per cent. (at current rates) of the gross dividend. A corporate stockholder which is resident for tax purposes in the United Kingdom will generally be treated as receiving franked investment income equal to the gross dividend. A United Kingdom tax resident corporate stockholder will not generally be liable to United Kingdom corporation tax on any such dividend received from another United Kingdom tax resident company. Subject to certain exceptions for Commonwealth citizens, citizens ofIreland, residents of the Isle of Man or the Channel Islands and certain others, the rights of a stockholder who is not resident in the United Kingdom for tax purposes to claim any part of the tax credit attaching to the dividend received will depend on upon the existence and terms of any double taxation convention between the United Kingdom and the country in which he is resident. A stockholder who is not resident in the United Kingdom for tax purposes should consult his own tax adviser concerning his tax liabilities on dividends received, his entitlement to claim any part of the tax credit and, if he is so entitled, the procedure for doing so. A stockholder resident outside the United Kingdom may also be subject to taxation on the dividend income under the law of their country of residence. A disposal of Stock Units may, after taking account ofindexation allowance, give rise to a chargeable gain (or allowable loss) for the purposes of United Kingdom taxation of chargeable gains for stockholders who are resident or ordinarily resident in the United Kingdom or other stockholders who carry on a trade, profession or vocation in the United Kingdom through a branch or agency in connection with which the Stock Units are held.

49

Transfers of Stock Units, which once registered, will be liable to stamp duty generally at the rate of 50p per £100 (or part thereof) of the price paid. Agreements to transferthe Stock Units (including the renunciation of Provisional Allotment Letters) may be subject to Stamp Duty Reserve Tax also generally at the rate of 50p per £100 (or part thereof) if within two months of such agreement a transfer of the Stock Units to which the agreement relates in favour of the purchaser is not executed and duly stamped. The Stock Units will be assets situated in the UK for the purposes of UK inheritance tax. The death of, or the gift of Stock Units by, a stockholder may (subject to certain exemptions and reliefs) give rise to a liability to UK inheritance tax, even if the stockholder is neither domiciled nor deemed to be domiciled in the UK. Inheritance tax is not chargeable on certain types of gifts made seven years or more before the death of the donor. 13.

Irrevocable Undertakings

(a)

The Directors (including, in respect ofP R Johnson, AlB, as trustee of The Peter Johnson Settlement) have given irrevocable undertakings dated 22nd August, 1996 to the Company that they will, in respect ofthe Stock Units carrying voting rights exercisable at the Extraordinary General Meeting to which they are beneficially entitled, vote in favour of the special resolution necessary to implement the Rights Issue at the Extraordinary General Meeting on 16th September, 1996.

(b)

Irrevocable undertakings to vote in favour ofthe special resolution have also been given by Mrs Janatha Stubbs in respect of her beneficial holding of Stock Units and by The Lady Grantchester and Mrs Janatha Stubbs as trustees of The Lady Betty Grantchester Settlement in respect of the Stock Units of that settlement. The aggregate number of Stock Units which are the subject of irrevocable undertakings given to the Company to vote in favour of the special resolution is 3,316 Stock Units representing 66.3 per cent. of the issued capital of the Company.

14.

General

(a)

Save as disclosed in Part I of this document, there has been no material change in the financial or trading position of the Company since 31st May, 1996, being the date to which the latest audited financial statements of the Company were prepared.

(b)

The expenses of the Rights Issue (including professional fees and the costs of printing and distribution), which are payable by the Company, are estimated to amount to approximately £100,000 (exclusive of VAT).

(c)

The total proceeds to be raised by the Rights Issue are £15 million and the net amount after the deduction of the expenses in 14(b) above is expected to be £14.9 million.

(d)

The Rights Issue price represents a premium of £499 per share to the nominal value of £1 per share.

(e)

The statutory accounts for the three years ended 31st May, 1996 have been audited but, in respect of the year ended 31st May, 1996 only, have been reported upon by the auditors pursuant to section 235 of the Companies Act 1985, but have not yet been adopted by the Company's stockholders. The auditors' reports on all such accounts were unqualified. The Company's auditors for the two financial years ended 31st May, 1995 were Rogers, Bowler & Co. of 56 Hamilton Street, Birkenhead UI 5HZ and for the financial year ended 31st May, 1996 were KPMG of Richmond House, 1 Rumford Place, Liverpool L3 9QY. KPMG and Rogers, Bowler & Co. have each confirmed to the Company that they have not become aware, since the dates of their respective reports, of any matter affecting the validity of their reports.

(f)

The Company only registers transfers of Stock Units at a Board Meeting. The table below sets out the average price at which Stock Units have been traded for value during each of the six months prior to the date of this document: Number of Number A verage price Month Transactions ofStock Units per Stock Unit 1996 March 2 13 £2,784 April 2 4 £2,850 May 2 8 £3,125 June 3 527 £2,647 July 4 118 £3,156 August 4 11 £7,750 50

(g)

Rothschilds, Rogers, Bowler & Co. and KPMG have given and have not withdrawn their respective written consents to the issue of this document with the inclusion herein of references to their respective names in the forms and contexts in which they appear.

(h)

Save as disclosed herein, no agreement, arrangement or understanding (including any compensation arrangement) exists between P R Johnson and any person acting in concert with him and any of the Directors, recent Directors, stockholders or recent stockholders of the Company having any connection with or dependence on the Rights Issue.

(i)

There is no agreement, arrangement or understanding whereby the beneficial ownership of the new Stock Units acquired by AlB, as trustee of The Peter Johnson Settlement as a result of the Rights Issue, willbe transferred to any other person.

G)

Application has not been made for the new Stock Units to be admitted to dealings on a recognised investment exchange. Save as set out in Part II of this document, there are no other arrangements for dealings in the new shares to be issued pursuant to the Rights Issue or the new Stock Units and no other such arrangements are intended.

(k)

The liability of the stockholders of the Company is limited.

15. Documents available for inspection Copies of the following documents will be available for inspection at the Registered Office of the Company during normal business hours on any weekday (Saturdays and public holidays excepted) up to and including 16th September, 1996; (a)

the Memorandum and Articles of Association of the Company;

(b)

the audited financial statements of the Company for the three years ended 31st May, 1996;

(c)

the material contract referred to in paragraph 9 above;

(d)

the irrevocable undertakings referred to in paragraph 13 above; and

(e)

the consentletters referred to in paragraph 14(g)above.

\

Date: 23rd August, 1996

;

.

51

mE EVERTON FOOTBALL CLUB COMPANY LIMITED Company Number 36624

NOTICE OF EXTRAORDINARY GENERAL MEETING NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of the Company will be held at The Alex Young Lounge at Goodison Park, Liverpool LA 4EL at 6.00 pm on 16th September, 1996 to consider and, if thought fit, pass the following Resolution:

SPECIAL RESOLUTION (a)

"THAT the authorised capital of the Company be and is hereby increased from £5,000 to £35,000 by the creation of 30,000 shares of £1 each such shares of £1 each to rank pari passu in all respects with the existing Stock Units of£1 each in the capital of the Company;

(b)

THAT the Directors of the Company be and are hereby generally and unconditionally authorised pursuant to and in accordance with section 80 of the Companies Act 1985 to exercise all the powers of the Company to allot relevant securities up to an aggregate nominal amount of£30,000 during the period commencing with the date of the passing of this Resolution and ending on 15th September, 2001 and pursuant to and during the period of the said authority the Directors be and are hereby empowered, pursuant to section 95 of the Companies Act 1985, to allot equity securities as if section 89(1) of the said Act did not apply Provided that this power shall be limited to the allotment of 30,000 shares of £1 each pursuant to the Rights Issue and Underwriting Agreement as each of those terms is defined and more fully explained in the circular to stockholders of the Company dated 23rd August, 1996 of which this notice forms part. For the purposes of this Resolution, words and expressions defined in or for the purpose of Part IV of the Companies Act 1985 shall bear the same meanings herein; and

(c)

THAT immediately following the allotment fully paid of all or any of the shares of £1 each created pursuant to paragraph (a) above pursuant to the authority granted pursuant to paragraph (b) above, each share of £1 each be thereupon converted into a stock unit of £1 each in the capital of the Company, each such stock unit of £1 to rank pari passu with the existing Stock Units of £1 in the capital of the Company."

Dated: 23rd August, 1996

Registered Office

By order ofthe Board

MJDunford Secretary

Goodison Park Liverpool

IA4EL

Notes: A member of the Company entitled to attend and vote at the Extraordinary General Meeting may appoint one or more proxies to attend and, upon a poll, vote in his stead. A proxy need not be a member of the Company. A form of proxy for use by stockholders is enclosed with the circular to stockholders of the Company dated 23rd August, 1996 of which the notice forms part. 2 To beeffective, the form of proxy, duly executed together with the power of attorney (if any) under which it is signed, must be lodged at the Company's Registered Office by not later than 6.00 pm on Saturday, 14th September. 1996.

52 FPC Greenaway - a Pillans & Wilson company London, Edinburgh. Glasgow, Manchester, Stroud, Tokyo, Bangkok. 104656

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 26

SHARE OFFER AND ANNUAL ACCOUNTS ANNOUNCED 5 Dec 2003 NORWICH City today announced a new share offer to boost Nigel Worthington's playing budget. Full details of the share offer are revealed today as the Club also announces its latest set of annual accounts for the year ended May 31, 2003, which show losses for the year of £4.6m. The figures show the Club's net debt rose to about £8m, but this does not include the cost of the new stand which will appear in the next set of accounts and which actually takes the current debt figure to around £15m. The share offer could potentially raise anything up to a maximum of £2.28m - and every penny raised will go to the Manager to spend on transfer fees, wages and/or loan signings. Worthington told First News: "We can't give any assurances about the futures of individual players - there are too many factors beyond our control. However, the share offer will free up more funds to help me bring more quality to the Club, which is vital if we are to have a realistic chance of promotion this season." City Chairman Roger Munby said: "The loss reflects the huge financial pressures on Norwich City in particular and on clubs outside the FA Premier League in general. Unless we can balance our finances and bring our expenditure down to where we can reasonably expect our income to be, we will be risking the long-term viability of the Football Club. "However, we find ourselves in the top 6 of Division One and with a realistic chance of promotion to the Premier League this season. The Board has received approaches from Shareholder Groups and Supporter Groups encouraging us to raise funds for the manager's player budget. "The proposed sale of land for residential development is earmarked to absorb the Club's losses while we try to bring expenditure in line with income - a process that will be made less difficult when the new stand opens. Meanwhile, the Directors' guarantees and new overdraft facility enable us to continue to trade for the foreseeable future. "We believe from individual discussions that there may be an appetite for a further share issue and accordingly we have resolved to make shares available to members and season ticket holders. All funds raised in this way will be made available to Nigel Worthington. "The Board strongly believes that this is an excellent opportunity for the Club to turn to the generosity and commitment of its supporters to make this Offer successful and that the Club will benefit greatly from the funds generated." The following headline facts and figures are being released to the media today: * Results for the year ended 31 May 2003 LOSSES for the year of £4.6million, against a profit of £0.4million in 2002. Turnover down from £15.4million to £13.0million, largely due to: - the collapse of ITV Digital meant TV income was down from £3.0million to £0.5million - the team were not in the 2003 play-off final, which meant that play-off income was down from £1.5million to £nil. Improvements in the Club's off-the-field trading performance: - catering turnover up from £2.3million to £2.7million - commercial income up from £3.5million to £3.7million http://www.canaries.co.uk/page/NewsDetails/0,,10355~459460,00.html

- ticket sales up from £4.1million to £4.6million. Despite its losses, the Club had a net cash inflow during the year of £2.3million, helped by the £2.4million of new cash raised under the public offer of shares in summer 2002 and by the issue of the first instalment of £7.5million of the loan notes. Expenditure up from £14.6million to £16.9million, partly due to the period for the accounts being 12 months, not 11 months. A further month of costs in the previous set of accounts would have resulted in increased costs of around £0.9million for the period ended 31 May 2002. The figure of £16.9million for expenditure also includes around £0.7million of costs incurred in the early termination of contracts of certain players, including Neil Emblen, Marc Libbra and Chris Llewellyn. Net debt up from £6.3million to £8million. This figure does not reflect the cost of the new stand however. The Club's net debt is actually around £15million when the cost of the new stand is accounted for. * Share Offers * TODAY the Club also announces offers of shares to raise money to boost Nigel Worthington's player budget. All cash raised under the offers will be allocated to the Manager's player budget, for wages, transfer fees, loan players etc. * An offer of 10,800 B Preference Shares to 50 individuals (most of whom have invested in the Club in the past) at £100 per share, which could raise up to £1,080,000. B Preference Shares are non-voting shares which carry the right to a 4.5% dividend and a bonus 10% dividend on the team winning promotion prior to 2007. * An offer of 48,000 Ordinary Shares to all members (including current shareholders) and season ticket holders, at £25 per share (minimum 4 shares per application), which could raise up to £1,200,000. * Neither share offer is being underwritten. * Annual General Meeting * The Club's 2003 Annual General Meeting will take place in the Norfolk Lounge of the Barclay Stand on Wednesday 7 January 2004 at 7pm, after being adjourned from 30 December 2003. * New borrowing facilities MEMBERS of the Board have given undertakings to provide the Club with additional loans amounting to £1,000,000 until 31 December 2004 if required. The Club has moved its banking arrangements from Girobank to Bank of Scotland in Norwich, and has put in place an increased overdraft Facility with the Bank of Scotland.

http://www.canaries.co.uk/page/NewsDetails/0,,10355~459460,00.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 27

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 28

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 29

The Directors/Company Secretary Everton Football Club Limited ("the Company") Goodison Park Liverpool L4 4EL REQUISITION BY MEMBERS OF EXTRAORDINARY GENERAL MEETING (Section 303 Companies Act 2006 and Article 10.3 of the Company’s Articles of Association) Dear Sirs We, the undersigned, being not less than one-fifth in number of members of the company as at the date of this notice REQUIRE you forthwith to proceed to convene a general meeting of the Company for the purpose of 1. Obtaining from the Board of Directors their comments on the recent DTZ report which; i.

describes the current funding options being pursued by the Club in order to meet its projected contribution of £78 million towards the Kirkby Stadium viz: • Long term bank debt • Syndicated debt • Private Equity funding • Securitisation of future income streams • Securitisation of new stadium naming rights • Realisation of existing assets

ii.

explains that the Club have indicated that additional borrowing beyond £78 million could expose the Club to an unsustainable level of debt, resulting in an unviable position;

iii.

projects that the stadium must be operational at the start of the 2010/2011 football season and that a delay of one year will increase stadium costs by circa £6 million, excluding fit out;

iv.

states that unless Tesco receive planning permission for an amount of retail space (which grossly exceeds that set out in planning legislation and policies), then the stadium will not be viable.

2. Obtaining from the Board of Directors details of contingency plans they have in place in the event of; i.

the planning application being called in by the Secretary of State thereby delaying the commencement of construction works;

ii.

a legal challenge by local residents whose homes are under threat of compulsory purchase;

iii.

the granting of planning permission for a reduced amount of retail space which renders the stadium unviable in economic terms.

and 3. To pass such resolutions in relation to 1 and 2 above as may be thought fit.

Dated

0

Name

1

Number of Shares

2

Signature

Fellow Shareholder

We write to ask for your support to request an Extraordinary General Meeting of Everton Football Club to discuss the proposed ground move to Kirkby. We believe that the events over the past year in relation to the Tesco led Destination Kirkby proposals must be discussed by the shareholders of Everton Football Club and the merits of such proposals considered fully to determine if the Kirkby scheme will be beneficial or detrimental to the long term welfare of the club. Clearly, the current custodians of the club are faced with a difficult task to address the stadium issue without any new investment and this matter has to be resolved for the club to move on from its strong foundation on the pitch. We request the support of fellow shareholders in our attempt to open up honest dialogue and debate with the club to enable all shareholders to fully understand the real facts surrounding the Kirkby proposals. We have contacted committee members of both the 1938 and 2006 Shareholders Associations and have received the support of both committees in our attempts to petition the club for the second EGM in just 4 years. Whether you are for or against the Kirkby proposals, we urge you to put aside your perception, take time to read through the accompanying literature and hope that after careful consideration you will support us in our efforts. The literature identifies what we were previously promised by the club and the reality of the situation according to a variety of sources including the Tesco led planning application submitted to Knowsley Borough Council. We trust you will agree that this matter is critical to the future of Everton Football Club and we hope to receive your considered support. Many Thanks, Mark Grayson and Tony Bennett, June 2008

The following comments were attributed to Keith Wyness prior to the vote concerning the Kirkby proposals and as you can see the reality of the situation would appear to be somewhat different from the claims made by the board of Everton Football Club. Keith Wyness, Wigan Programme, 10th August 2007

The Reality As set out within the sections above the key headline figures are; • Total cost of the new stadium circa £130m • EFC contribution circa £78m • Shortfall circa £52m

Q

You described Everton’s proposed stadium move as the deal of the century. Why?

A

We’re very lucky to have this opportunity; it’s a wonderful deal because we’ll end up with a stadium with a very low level of debt added to the club.

Q

It seems a very short timescale from confirming that this is where the club wants to go until the fans’ vote?

“[The reaction by Everton FC to} All efforts from me and my engaged professional team to meet with and openly discuss the Bestway ‘Loop site’ and promote it as a potential relocation site for Everton FC, having gained the technical support of HOK Sport Architecture and WSP Engineers, totally astounded me.

A

If you look at the facts and understand that this Is not just the best option but the only option we have at present

Realistically, I couldn’t have done much more and I was just stone-walled for much of the time by EFC’s Directors and to make things worse most of all that was said publicly regarding the Bestway site by EFC or it’s representatives was so inaccurate that so often it genuinely beggared belief and surprised me.” Malcolm Carter, Bestway, March 2008

Q

Towards the end of last year you announced that you had entered into an exclusivity agreement with Knowsley and Tesco to explore the feasibility of the project. However, there has been a negative reaction from supporters that “there is no Plan B”. Why is this the case?

A

There isn’t a Plan B because there is no other deliverable project that can actually finance and deliver the redevelopment of Goodison. There are sites within the city of Liverpool but there is no site that can deliver the contribution we are going to get from the Knowsley Project that can make the stadium affordable. This is the only one that can realistically be delivered

Q

You have said that the new stadium would bring in £10m additional revenue annually, which would be available to the manager for transfers. What is that based on?

A

I think it’s fair to look at that. All our studies so far have shown that a new stadium can produce revenues of that sort of scale. It depends on how well the team is doing and how many fans turn up.

Q

Are you confident that it will lead to extra investment?

A

It makes us an extremely attractive option. With a new training ground now, and potentially a new stadium, we’ve got to be one of the most attractive investment opportunities in the Premiership. I think this is another key factor we have all got to look at.

Q

The site already has decent transport links through the M57 motorway. What other infrastructure will be put in place?

A

There are already new train links being planned and built right next to the stadium almost. Obviously the M57 is already there but the transportation experts have already said they believe this will be the best transportation-served football stadium in the whole of the north west, if not the UK. That’s a very big factor as we look forward to the next 50 to 100 years. This is a decision we have got to look at to take us forward as a club. It is the next 50 to 100 years and transportation links are key to that, as is a bigger catchment areas for a potential new stadium, Those are key things we have got to look to.

Q

Are there other projects of its kind in this country you could compare it to?

A

I’m sure there are stadium and regeneration projects that are Similar. Coventry is one that people have spoken about as a similar type of model

THE BENEFITS FOR EVERTONIANS as detailed in the Kirkby Ballot Literature

The Club have indicated that additional borrowing beyond this point could expose the Club to an unsustainable level of debt, resulting in an unviable proposition. DTZ April 2008

“If the Kirkby project does not happen, then the Plan B will be to look again at Goodison Park and I suppose that the Scotland Road site would have to become a Plan C.” Bill Kenwright, Everton FC AGM, 4th December 2007

The business plan is unclear however it is questionable how the club can generate £10m per annum for the Manager and Team Building if there are to be just 10,000 additional seats and 25 new corporate boxes in comparison to Goodison? Furthermore, any additional income will be offset by servicing increased borrowing. A further point that is of relevance to any debate on the options that might be available to the Club to fund a new stadium, is the willingness and abilities of the Club’s directors to sell some or all of their interests in the Club in order to attract an investor who or which might have the ability in financial terms to fund a new stadium in its entirety or at the very least fund the shortfall that exists in the context of this proposals. As is pointed out in greater detail in the financial statement document 26), this is not an option as the current directors have no intention of selling any of their interests in the Club. Revised Planning Statement (Document 18), April 2008 The proposed station at Headbolt Lane will not service passengers from Liverpool and the line from Liverpool to Kirkby is a single line track with 6 carriage trains running at a maximum of 15 minutes. The train services to Kirkby are inadequate to cope with match day demands. The CPZ [Car Parking Zone] will be the most rigorously enforced at any football ground and cars will be clamped or towed away’. Parking will be 30 minutes walk away. One of Europe’s largest park and ride schemes requiring 95 buses to make 2 trips each will be required, leaving supporters queuing for an hour after the game with similar queues at the railway station which can process fewer than 4,000 passengers in the first 75 minutes after the final whistle. “The board of Coventry City Football Club can confirm that it has today filed in court notices of intent to go into administration”. Official Coventry City FC Statement, 3rd December 2007

The Reality

Comprehensive bus and rail public transport services

The transport infrastructure in Kirkby is inadequate to allow 50,000 supporters to attend football matches in Kirkby in a safe and timely manner.

Strategic highway accessibility is exceptionally good, providing direct connections to 4 million households within a 45 minute journey. A strong base for the future

Everton Football Club is turning its back on its spiritual home and the heart of its traditional fan base. 4 million households will not be within a 45 minute journey on match days. This is not a strong base for the future, this is a worrying concern. “The stadium shall not be used for any Events other than Sporting Events. No concerts or music events shall take place.”

Ability to hold concerts and other special events

The beauty of this new facility is that Everton will’ have a very small debt. We have the opportunity to receive a significant contribution towards the project from our development partners, ensuring we will be in a position to build this new home - worth £150million - without a large drain on the Club finances. Simply put, it’s more money to spend on the team itself.

“There shall be no more than 6 non-EFC major association football events per annum (where a major event is a single day event attended by 10,000 visitors or more). KIRKBY STADIUM USAGE (DOCUMENT 29) March 2008 If tickets were priced at an average of £35 each an increase in attendance from 40,100 to 50,400 would result in an increase of just £6.8m in gate receipts per annum assuming that the ground was sold out for all 19 home league matches. Costs associated with servicing the new debt would exceed £4.3m per annum if the club borrowed £50m over 25 years at 7%.

Petition for an Extraordinary General Meeting of Everton Football Club, Summer 2008

Extracts from Keith Wyness Open Letter, 9th August 2007 “In the light of the joint statement issued on Monday, August 6 by Liverpool City Council and Bestway, the owners of the “trumpet” loop site located just off Scotland Road, I feel it is imperative that we pass comment both by asking those who regard this site as a possible location for a new home for Everton Football Club a series of highly-pertinent questions and by making some general observations.” “Would any compulsory purchase orders be required in order that we could attain the size of site we require? If CPOs are required, is it not the case that they could take up to 12 months to attain?” “We do not believe that the existing transport infrastructure in the Scotland Road area would be able to cope with the volume of traffic generated on matchdays.” “Would the construction of a development which would also include a large retail element not dramatically undermine – and anger – those behind the Grosvenor and Project Jennifer schemes? Is there not a very real possibility of a legal challenge from these other developers?” “if the scheme was to be “called in” by central government, the entire project could be subjected to a delay of anything up to a year.” “Without wishing, in any way, to call into question the integrity and professionalism of those who have pulled the Scotland Road “rabbit” out of a hitherto cunningly-concealed hat, we do find it curious that it is being portrayed as a genuine, realistic and deliverable scheme at the precise moment our supporters are being invited to participate in a ballot about our proposed relocation to Kirkby”.

Extracts from Terry Leahy’s Open Letter to Evertonians “As a businessman my head rules, as a football fan it’s more complex – it’s about heart as well as head.” “I want to argue in this article that when it comes to the vote on Kirkby, it must be the other way round and in the best interests of the club we love, our heads must guide our hearts in making this decision.” “Now let me declare an interest right up front. Tesco will benefit if the £400 million redevelopment of Kirkby takes place.” “The construction of the stadium itself would cost around £110 million. Barr Construction have an integrated design, steel manufacture and construction operation which makes huge savings on that figure. Tesco as the developer is forgoing the normal development profit on the construction of around £15 million, in addition to the contribution it is making directly. So if you went out to buy this stadium it would cost you £150 million. It has been designed to be extendable to 60,000 seats which, when it happens, will cost another £25 million and there is ample space in the stadium to add further lounges, facilities and finishes to the highest standards in the Premier League when the club completes its investment. This would be in addition to the very good provision from day one, but could be anything from £15 – £25 million dependent on what you ultimately want. So you are looking at a stadium which when finally developed is around £200 million, and £150 million from day one. It is therefore, most definitely, not a stadium on the cheap. It will be a fitting home for a club of Everton’s tradition and standing“. “Clearly it’s possible to lift the stadium design for Kirkby (or one like it) and drop it onto Goodison or the loop site – and in my heart as a fan, it looks nice. But unless the club is offered a concrete proposal to own a £150 million stadium for around £35 million investment by Everton, and delivered by 2010 / 11 then I’m afraid it is not a realistic option.” “The Kirkby stadium is based loosely on the Cologne stadium. It will be a traditional four sided England Premier League ground, with 21st century facilities. Kirkby has the best access within 45 mins of any Premier League ground.” “I have heard it suggested that a ‘no’ vote for Kirkby would precipitate a change at the club, and thereby increase the likelihood of new investment. I have two reactions; first Bill Kenwright, Keith Wyness and David Moyes have turned a relegation side into a European side, something that a number of better invested clubs have failed to do. Second, the prospect of outside investment in the club is massively increased by the Kirkby proposal. Without it, any prospective investor knows that the first £150 million of investment would have to go into a stadium, with nothing to show on the pitch. With Kirkby, new investment could go straight into the team, with the prospect of a return by way of better results” “One final point, in my business life I have learned the most valuable commodity is trust. Without it you don’t have much to build on. I may not always like it, but I’ve learned to trust the people closest to issues to make the best judgement. When the Board, the manager and the leading players of Everton are unanimous that a move to Kirkby is right, I know they have the best interest of the club at heart and I trust their judgement. Whichever way I look at it, the heart says Goodison but the head says Kirkby.”

“We are now at the planning stage, to see if we can get it approved. That decision will be reached very shortly. Work will start very quickly then after that if it is approved The planning process is very complicated. There are lots of different factors. There is definitely a chance that it may not get through in the way we want it to. It could get called in by the government office. If that does happen, it may jeopardise the whole thing. It’s a very serious issue for us. Plan B at the minute is just being here at Goodison but that will give us longer term problems, as we have always known. There isn’t the opportunity to develop Goodison in the way we would have hoped, so the new stadium is crucial for us to go forward. There is no doubt for Everton to attract the right investor, the stadium is a crucial part of that. I don’t think people would be prepared to invest in the club until that is resolved.”

Keith Wyness, Liverpool Echo, 28th May 2008 Further information in relation to the Tesco/Everton Planning Application can be found at Knowsley Councils website: http://www.knowsley.gov.uk/consultation/kirkby/kirkby_tesco_intro.html Petition for an Extraordinary General Meeting of Everton Football Club, Summer 2008

Is Relocating to Kirkby in the best long term interest of Everton Football Club? After over a century of calling Goodison Park our home, the current board of Everton Football Club plan to relocate the club to a 50,000 seater stadium in Kirkby, some nine miles from the rejuvenated Liverpool city centre. Some reasons supplied by the board for this controversial upheaval would appear to be compelling. Goodison Park’s corporate and general facilities are undoubtedly dated and add little to the match day experience whilst the stadium itself with a capacity of 40,100 would appear to be unable to generate the revenue streams required by a top-flight premiership club. Obstructed views, inadequate catering and antiquated toilet facilities are all valid

Artist impression of the Kirkby development from the “Destination Kirkby” promotional material

criticisms of the current match day experience at Goodison Park, yet these are clearly symptomatic of the lack of investment, over the decades, in the stadium infrastructure by the board and perhaps these shortcomings could be addressed for significantly less than the burgeoning cost being attributed to a new stadium in Kirkby? Whilst undoubtedly dated, Goodison Park remains a bastion of classically designed football stadia and continues to attract critical acclaim from opposing managers, none more so than Arsene Wenger, referees and fan groups around the country. In 2008 it was identified as having more atmosphere than our illustrious neighbours at both Anfield and Old Trafford. However, it is clear that the experience for the general fan is not the primary motivator for the relocation to Kirkby. Whilst Evertonians were initially promised a world class stadium that would be effectively free under the ‘deal of the century’, it’s now apparent to even the casual observer that the proposed stadium at Kirkby is little more than a stock design facility found primarily, but not exclusively, on retail parks around the country. These are home to teams such as Coventry, Wigan, Southampton, Warrington Wolves and the proposed development for St Helens to name but a few. The Government’s think tank CABE has recently heavily criticised the design, describing it at best as a missed opportunity for Everton Football Club. A basic understanding of the proposed transport scheme, a scheme that again was promised to provide the best served stadium in the country, shows that with a heavily policed no parking zone, park and ride facilities based miles from the stadium, park and walk facilities based up to a 45 minute walk away from the ground were introduced only after it was discovered that there was an inadequate supply of buses for the park and ride scheme and a reliance on a grossly inadequate rail facility that, due to having only a single track can only handle just 3,840 passengers per hour, will be fundamentally detrimental to many aspects of the Evertonians match going experience. If the Kirkby relocation isn’t being pursued for the benefit of the general supporters then perhaps this scheme will benefit the club and its shareholders? The majority of people owning shares in the club don’t do so for financial gain. 56% hold only one share with these 724 individuals owning just 2% of the 34,305 issued

shares. They, like the majority of Shareholder Number of Shares % fans, are unlikely to benefit from 8754 26 the move to Kirkby. Allegedly, just Bill Kenwright 8146 24 five individuals own 85% of shares BCR Sports in Everton. Are these individuals Jon Woods 6622 19 likely to benefit as a result of the Arthur Abercromby 2878 8 club relocating to Kirkby? Tesco’s 2773 8 own consultants, DTZ, confirm Lord Grantchester that Everton’s contribution to the £130M stadium will be at least £78M with a further £52m to be cross subsidised from the retail element of the scheme. Clearly this subsidy is very appealing to the board of directors and its major shareholders as the club and their shareholding will benefit from the value obtained through this incentive. Does this incentive influence the ability of the board to adequately determine if the Kirkby proposals are actually in the best long term interest of the club? With no investment forthcoming from the board, the financial strategy to generate the club’s contribution is reliant on the sale of the club’s remaining assets, Goodison and Bellefield, the delivery and securitization of stadium naming rights with any subsequent shortfall being made up with additional debt finance. What is the level of this additional debt? To describe the figures promised for the sale of the assets and the stadium naming rights deal as ambitious would be an understatement; approaching £2M an acre for land with planning permission in Walton isn’t realistic. The application to turn Bellefield into housing has already been dismissed by Liverpool City Council due to its over ambitious nature and will only be granted planning permission for approximately thirty dwellings meaning a reduced monetary yield for Everton. Perhaps most ambitious of all is a naming rights deal for a stadium on an out of town retail park that will surpass anything secured in the history of the English Premier League. These targets are simply too ambitious; the reality is that the reliance on debt finance will inevitably approach £50M. In light of the shortcomings of the proposed stadium and the clubs current financial predicament, should Everton take on this level of additional debt? As a business, Everton Football Club is a loss-making organisation and despite Keith Wyness implementing a three-year plan to correct this position, this situation is set to prevail for the foreseeable future. The table below highlights Everton’s recent financial performance. It is interesting to note that in 2005/06 gate receipts of £18.1m were attained from an average league attendance of 36,827. In 2006/07 gate receipts of £17.1m were attained from an average attendance of 36,358. This calculation equates to average income of £481 per spectator and if cup games were included in the calculation this figure would drop. If a move to Kirkby resulted with attendances increasing from an average of 36,592 for the previous 2 seasons to a capacity of 50,401 for every game throughout the season gate receipt revenue will increase by just £6.6m per year. Will a move to Kirkby and an increase in capacity from 40,000 to 50,000 really improve this situation? Will an additional 25 executive boxes really make a huge difference to the finances of Everton Football Club. More importantly, will the club attain the demand and attendances necessary for this proposal to be successful?

Everton Football Club Financial Performance over previous 8 seasons Season

Gate Receipts

TV & Merit

Sponsorship

Merchandising

Other

Total Turnover

Net Profit/(Loss)

Total Debtor / Creditor Liability

1999/00

24,072,692

Inc

Inc

Inc

4,070,167

28,142,859

(11,169,099)

(19,513,571)

2000/01

12,969,000

12,856,000

3,542,000

2,152,000

1,333,000

32,852,000

(3,652,818)

(33,653,730)

2001/02

13,400,000

18,900,000

2,900,000

1,900,000

1,100,000

38,200,000

1,555,000

(31,938,000)

2002/03

14,700,000

25,100,000

2,400,000

3,300,000

1,100,000

46,600,000

(12,980,000)

(50,826,000)

2003/04

15,600,000

20,700,000

2,600,000

3,500,000

1,800,000

44,200,000

(15,376,000)

(56,568,000)

2004/05

18,700,000

29,500,000

4,200,000

5,400,000

2,000,000

59,800,000

25,510,000

(40,432,000)

2005/06

18,100,000

26,300,000

5,200,000

7,600,000

700,000

57,900,000

(10,794,000)

(48,261,000)

2006/07

17,090,000

27,462,000

4,600,000

1,082,000

1,178,000

51,412,000

(9,426,000)

(58,823,000)

If the majority of shareholders and fans of the club are not the main beneficiaries of a move to Kirkby then just who are? Petition for an Extraordinary General Meeting of Everton Football Club, Summer 2008

What are the planning issues? The planned move to Kirkby is complex and fraught with difficulties that are outside the control of Everton and its management team. The basic premise is that Tesco, as developers, have proposed the construction of a huge retail park the size of which is dictated by the offer to provide a £50M cross subsidy to the stadium. Without the stadium there is no need to build a retail park of the proposed size, the enormous size of the retail park with Britain’s largest Tesco store and major retail companies such as ARCADIA, Marks & Spencer and TK Maxx will ensure increased footfall, increased spending and increased profits for the retail operators. Without the enormous retail park there will be no stadium, conversely without the stadium there is no justification for the size of the retail park. You may not be aware of the planning policies that are in place to prevent exactly what Tesco are proposing at Kirkby. Not only is this development a 400% increase on what Knowsley Council and the Government agreed was required in Kirkby as recently as 2006, the proposal ominously contravenes a piece of regional planning policy known as the Regional Spatial Strategy (RSS) which incorporates a retail hierarchy identifying Liverpool at its summit. Kirkby is not included in this strategy. Despite this, Knowsley Council and Tesco have approached the Secretary of State and have attempted to influence the proposed changes to this document. This approach has failed. Furthermore, all neighbouring authorities and concerned developers such as Grosvenor (Liverpool 1) and St Modwen (Project Jennifer and Skelmersdale) have submitted major objections to this retail scheme. Nobody, apart from thousands of Kirkby residents, have actually objected to the stadium. Furthermore, the planned development also contravenes Knowsley’s own Planning Policy (UDP, 2004) and more importantly it fails to comply with the Governments own National Planning Policy. It is at major odds with PPS:6 as the development would seriously prejudice the vitality and viability of other centres in the Merseyside Region. It is also at odds with PPG:17 which states that out of centre retail and leisure uses associated with stadia should not be granted unless it complies with national policy on retailing. The recent offer by Tesco to apparently reduce the retail floor space did not appease the objectors and Liverpool, Sefton, West Lancs and St Helens Council have all lodged formal objections to the development.Whilst Knowsley Council will clearly indicate to the secretary of state their willingness to grant planning permission the whole project, at best, will be called in for detailed examination and at worst refused permission due to the level of the aforementioned objections based on government planning policy. In March of 2007, a full four months before the ballot, work began in earnest on the huge amount of documents that make up the Tesco planning application. For such an application, whose significant non-compliance with planning policy is readily accepted by Tesco, to be successfully accepted, it has to have enough weight or material considerations in order to attempt to balance out the contradiction to policy. We have been made aware of the ‘positive’ material considerations being used by Tesco as counter balance: regeneration, a revived town centre, 700 new jobs, road, parking and public transport improvements etc but are the vast majority of Evertonians aware of the ‘negative’ material considerations being used to add weight to the Tesco planning application? This unsurprisingly, is where Everton Football Club really comes in to the equation. A sample of these negative material considerations taken from the planning application documents can be read below: • “Without ‘a critical mass’ of retail development there can be no stadium, without a stadium there can be no retail development, without the retail development there can be no regeneration of Kirkby.” • “If an alternative viable site for a stadium could be found then the need for the massive retail element in Kirkby could not be justified.” Do these quotes from the Tesco planning application explain why the club entered into an exclusivity deal and has ignored and so easily dismissed other potential sites within the city? Does Everton Football Club actually benefit from such a blinkered approach?

Further reading of the Tesco planning documents reveal additional material considerations that appear to be detrimental to the club undertaking a serious investigation of alternatives. For example, the documents state: • “Goodison Park cannot be redeveloped beyond a 37,000 seat capacity.” Again, this statement is a material consideration in favour of the Tesco planning application by attempting to demonstrate that the club has done all it can to avoid building a new stadium upon the open green space at the Kirkby site. Some of you may recall that this statement directly contradicts the two options for a redeveloped Goodison provided by Bill Kenwright and the board during the Kings Dock ballot. Why where there no alternatives given during the Kirkby debate? Do the following quotes, again taken from the planning documents reveal the fundamental motivation of the board of Everton Football Club for moving to Kirkby? • “ Whilst the club has stabilised its position in the last few years there has been a legacy of debt which is long term in nature and impacts on present and future borrowing possibilities” • “The club cannot and are unlikely to be in a position in the future to fund the costs of the stadium. • “Everton FC have a desperate financial need to leave Goodison Park and the club have explored all of the options available in order to fund a new stadium.” • “A further point that is of relevance to any debate on the options that might be available to the Club to fund a new stadium, is the willingness and abilities of the Club’s directors to sell some or all of their interests in the Club in order to attract an investor who or which might have the ability in financial terms to fund a new stadium in its entirety or at the very least fund the shortfall that exists in the context of this proposal. As is pointed out in greater detail in the financial statement document 26), this is not an option as the current directors have no intention of selling any of their interests in the Club.” Are the above statements at the heart of the stadium issue and are these reasons sufficient justification for such a monumental decision that will likely affect us all for the remainder of our lifetime? Clearly the current board are struggling to finance a solution to the stadium problem and the Kirkby proposals, as inadequate and as flawed as they appear to be, do offer the current board their best opportunity to raise the funds necessary to construct a new stadium. However, will these individuals, who we had previously entrusted and who had previously struggled to find the finance to see the Kings Dock come to fruition, be able to deliver a stadium worthy to be the new home of Everton Football Club? Whilst the above statements may well be true of the situation today, if new investment was brought into the club through a change of ownership or through a rights issue the possibilities concerning what is ‘deliverable’ for Everton Football Club would no doubt change in the future. With this in mind is it wise for a 130 year old institution to turn away from its spiritual home, its heritage, its tradition and its heartland to relocate to an uncertain future in Kirkby as this is being portrayed as the only deliverable option to the club? Please remember that moving away from Goodison Park and relocating to Kirkby is not the only option available to Everton Football Club. There are other options available to the club if not to the board. Whilst the collapse of the previous Kings Dock proposals may have soured the relationship between the Officers of Liverpool City Council and members of the current board of Everton Football Club, the will of Liverpool City Council to retain Everton Football Club in its rightful heartland has been clearly stated. It should be noted that Liverpool City Council passed a resolution in October 2007 stating its intention to do everything possible to help Everton Football Club find a solution to this difficult stadium issue. We, as Evertonians, hope that the current custodians of Everton Football Club will reconsider the clubs position and enter into meaningful dialogue with the City Council to finally resolve this difficult situation to the satisfaction of all Evertonians.

Petition for an Extraordinary General Meeting of Everton Football Club, Summer 2008

What are the transport issues? In the summer of 2007 Evertonians were advised by the club that the proposed relocation to a new stadium in Kirkby would result in improved accessibility and comprehensive improvements to transport infrastructure. Unfortunately, this is not the case and the frailties with the transport proposals as revealed in the planning application make a mockery of the notion that the stadium will be the ‘best served stadium in the North West’. The unfolding facts confirm that the transportation issues would actually result in further inconvenience to the majority of match going Evertonians The club has failed to acknowledge that during the ballot process over 10,000 Evertonians registered their opposition to the idea of relocating the club to Kirkby. Little has been done to placate concerns and with the emergence of actual facts and information related to the move, subsequent independent studies have revealed that Everton FC will lose a significant proportion of existing match going Evertonians should the club relocate to Kirkby. This is a fundamental flaw in the long term business plan associated with the move to Kirkby as it is reliant on increased attendances. Whilst it is acknowledged that new stadia do benefit from a ‘new stadium effect’, concerns remain in relation to the long term sustainability of attendances should the transport proposals prove impracticable in reality. The proposals in relation to transportation are concerning. How will these proposals encourage the old, the young and the disabled to attend games when these supporters will be expected to walk for up to 45 minutes just to get to their cars, or be expected to wait in spectator queuing reservoirs with a density of 4 persons per m2 for over one hour prior to being ‘crush loaded’ into trains that are incapable of running more frequently than every 15 minutes? The inadequate plans incorporate the idea that 250 Evertonians will attend the game by bicycle and the bus strategy will require buses be brought in from all over the north west just to provide the numbers required, that is providing these buses are actually required during ‘off peak’ times. In essence, there will not be enough buses to service the stadium to capacity during peak times, including Saturday afternoons.

In light of the requirement to enforce a strictly controlled parking zone, the diagram below illustrates the distances Evertonians will be expected to walk to get to their vehicles under the proposals made by Steer Davies Gleeve in their optimistic transport plan. Clearly the distances being proposed will deter parents from bringing younger fans, the future of the club, to see Everton FC if they would be expected to walk distances of over 2 kilometres and for up to 45 minutes just to get to the ground. In addition, these weary young legs will still face a further 45 minute walk to return to their vehicles after the final whistle. Not only will the endurance of many a supporter be tested, the overall journey times will be increased for the majority of supporters attempting to get to and from the stadium. The board must consider if it is realistic to expect our supporters to tolerate the additional inconvenience that the Steer Davies Gleave report highlights? Will these transport proposals be conducive to encourage existing as well as new Everton supporters to attend and continue attending Everton football matches in the future? How will future generations of football supporter be encouraged to follow Everton when there will be a more convenient and accessible alternative waiting for them in Stanley Park? Liverpool fans already realise the significance ‘One City, One Club, One Name, Liverpool’. Is it realistic to expect home supporters to feel an affinity for the ground when they will be expected to turn up at the new stadium in more coaches than the away support? Will it really feel like home? It is worth noting that in its entire history Everton Football Club has only ever attained an average attendance of more than 50,000 spectators during one season; that was the championship winning season of 1962/63. Are the board confident that the transport proposals will help to facilitate regular capacity crowds of 50,401? This decision will burden the club for at least a generation. It must be the right one, the very future of Everton Football Club should not be left to chance and the belief that ‘it’ll be alright on the night’.

N

Will you or your family be happy to walk such great distances to get to and from your car on match days? Is this improvement? Petition for an Extraordinary General Meeting of Everton Football Club, Summer 2008

What are the costs and will the stadium be fitting for a club of Everton’s stature? Prior to the ballot, Evertonians were informed that the proposed stadium in Kirkby would leave the club with very little debt and it was implied that Tesco would provide a contribution of £50m towards the stadium. We now know that Tesco are not providing the club with £50m, rather that the club are reliant on a contribution of £52m which will be derived from the value of the proposed units to be incorporated into the retail element of the development. Due to the planning issues discussed previously, and the inappropriate scale of the proposed retail development, there is uncertainty if the actual quantity of retail will be approved on the scale anticipated by the club, raising doubts as to whether the retail element will provide a sufficient yield to subsidise the construction of a new stadium. Clearly, with the significant objections to the Destination Kirkby proposals from neighbouring local authorities such as Liverpool, Sefton, St Helens and West Lancs councils, this is almost certain to result in a reduction of the required retail enabling subsidy and raises questions as to whether the additional expenditure by the club would represent value for money. Having voted in good faith on the assumption that the club would get a new stadium for very little debt, have the proposals now changed sufficiently to question the outcome of the ballot? Would the majority of Evertonians continue to endorse the proposals knowing what we know today? The stadium itself is described in the planning documents as a ‘mid-level quality stadium’ and will cost £100m, this equates to £1,984 per seat. What is striking about these costs is that Everton will actually be spending less per spectator than a club like Brighton and Hove Albion, a lower league team who, without the benefit of massive amounts of TV revenue, intend to spend up to £2,364 per seat on their own proposed £52m 22,000 seater stadium. Are Evertonians really being given a stadium that is befitting of the club motto Nil Satis Nisi Optimum? It would appear that the reality of the situation is far from the iconic and world class structure promised. Barr Construction who have previously constructed new stadia for the likes of Bournemouth FC, Cheltenham Town FC and Kidderminster Harriers FC certainly have a track record for building cost effective structures but are these iconic and befitting a club of Everton’s standing within the game? Barr’s stadia portfolio can be found here: http://www.barr.co.uk/brochures/stadia.pdf. The cost benchmarking information below, taken from the planning application identifies how the Kirkby proposals fair with other recent schemes. It is interesting to note that Arsenal were prepared to spend £4,025 per spectator, Huddersfield Town, over a decade ago, spent £2,452 per spectator, Hull City £2,466 per spectator whereas Everton will spend just £2,000 per spectator.

Of course the club has identified that further costs will be incurred fitting out large areas but not all of the ground and the additional amount spent, up to £30m, would, if this work was actually undertaken, increase Everton’s spending to £2,579 per seat which would still be short of the £2,640 average for a stadium of this scale and these costs are still someway short of the £3,125 and £4,025 per seat spent by our Premiership competitors in Manchester City and Arsenal. Do these figures suggest that Everton are to achieve value for money or are Evertonians actually being given a lesser quality stadium than our contemporaries in the Premier League? Clearly, the Kirkby stadium proposals including the associated transport services will be a far cry from the world class or iconic stadium that Evertonians were promised. The reality will be functional, uninspiring and difficult to access and in a recent report commissioned by Tesco and Everton for Knowsley Metropolitan Borough Council, the Government sponsored advisors the Commission for Architecture and the Built Environment (CABE) stated the following about Everton’s proposed stadium: “We are not convinced by this masterplan that there is a clear understanding of the space required for managing large crowds converging on the stadium. Also, we do not feel that an inspiring sense of arrival, as one would expect to have upon approaching a stadium of this size and significance, has been achieved.” “It is our view that Design and Build contracts can produce successful outcomes only when high quality design is embedded in the process; we do not feel that this has been achieved in this case.” “We think that both Everton and Kirkby deserve a stadium of first class design quality, and we are not convinced that this has been realised by the current proposals.” CABE, April 2008 If you are not yet concerned by the quality of the proposed stadium design then perhaps the following statement by Knowsley Council may provide clarity concerning the reality of the Kirkby proposals and what Evertonians could expect for decades to come: “the building has been criticised by some consultees and local community representations as being of poor design quality. It has to be acknowledged that the design adopted here, in contrast to some recent stadium proposals, is not one for an iconic exemplar building. Rather, the design is a somewhat more traditional stadium design with four separate stands and this shows in its outward appearance. Indeed, a somewhat utilitarian and cost-conscious design is evident in the way that the underside of the upper stands is revealed to outward view.”

Thank you for your time. If you support our request for the holding of an EGM, please sign the attached Requisition, stating the number of shares that you hold, and return it in the enclosed prepaid envelope Petition for an Extraordinary General Meeting of Everton Football Club, Summer 2008

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 30

Everton chief executive resigns 30 Jul 2008 18:10 BST Everton chief executive Keith Wyness has resigned, the club has announced. Wyness had been the driving force behind the club's plans to build a new 50,000capacity stadium in Kirkby, which is awaiting Government approval. But Everton claim Wyness' sudden departure is not linked to the future of their proposed new stadium. BBC sports editor Mihir Bose believes Wyness's exit was prompted by retail tycoon Philip Green's involvement behind the scenes at Goodison Park. "Although Green, one of the richest men in the country, is not formally connected to Everton, he has been involved in much of the Toffees' recent activity," said Bose. "I understand the manager David Moyes has had to go to Green on his plans to buy and sell players, and also finalise his contract." Green is a long-standing friend of Everton chairman Bill Kenwright and Robert Earl, who owns nearly 24% of Everton through a British Virgin Islands company. Green confirmed his relationship with Kenwright, and speaking to Bose, he said: "Everybody knows I'm a friend of Bill Kenwright, and I helped him get Everton. "It is his club and his ball. He asked me for advice - If people ring me up and on a confidential basis ask me to help, what is wrong with that? "Dozens of people call me up and they get free advice. I am always willing to help. I have no interest in investing in football, I could have invested 10 years ago but I did not." In terms of the stadium project Wyness was overseeing, planning consent has been received for the Kirkby stadium but a government decision on whether or not to "call in" the project is expected this week. Wyness had previously voiced fears that calling it in could jeopardise the plans. But a club statement said: "The club wish to re-iterate our commitment to the Destination Kirkby project. "The departure of Keith Wyness is in no way connected to that project." Everton are concerned that an inquiry would put back the move for a year and kill off the controversial £400m scheme. The club's debts stand at about £66m, which is understood to include an overdraft of £40m and a long-term debt of £26m. The proposals to move to Kirkby have been opposed by some Everton fans angered by a possible move outside Liverpool's city boundaries. Club sources meanwhile though insist it is a case of "business as usual" at Goodison despite Wyness' departure, with a spokesman adding: "The board will meet in about a fortnight to discuss the situation." It is believed Wyness actually tendered his resignation by email after discussions with board members at the weekend, and that he will seek to negotiate a pay-off. http://news.bbc.co.uk/mobile/bbc_sport/football/teams/e/everton/753/75323/story7532345.shtml?PDA=1?

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 31

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 32

Fellow Shareholder We write to offer our thanks to those shareholders that have supported our petition to convene an Extraordinary General Meeting of Everton Football Club. We also wish to provide you with an update to the events that have occurred since we originally sought your support to petition the club for an EGM. As you will no doubt be aware, the Destination Kirkby proposals have been ‘called in’ by government office and the resulting public enquiry is scheduled to commence on the 18th November 2008 meaning that the decision to confirm whether or not the scheme will proceed is unlikely to be known until July 2009. The club has previously stated that a delay of 12 months could seriously undermine the viability of the proposals due to increased construction costs and we believe that it is of the utmost importance that the club take this opportunity to review the situation, free itself of the constraining exclusivity arrangement and consider other potential alternatives as of course there is no guarantee that a protracted and detailed examination of the Kirkby proposals will lead to the scheme being approved by the Secretary of State. Both Tony and I met with our new acting CEO Mr Robert Elstone on the 14th August to discuss the protocol to be observed on the night of the EGM. Mr Elstone has stated that the purpose of the EGM will be strictly related to the stadium issue as set out in our petition and that questions from the floor in relation to other concerning issues such as investment, transfers and the like will be out of bounds on the night. We would urge shareholders to heed this demand as it has been indicated to us that the Chairman is within his rights to cut short the EGM should it stray from the purpose of the meeting. Mr Elstone has acknowledged that the stadium relocation issue has been divisive and has generated much passion on both sides of debate however it has been stressed that the Chairman will cut short the meeting should it become unruly or abusive. We would remind shareholders that the purpose of the meeting is to determine if relocating to Kirkby will be in the best long term interest of Everton FC and as such we would request that shareholders remain respectful of the Chairman, the board and their advisors as they respond to our questions. In light of the above, we are concerned to report that we have been advised that the board will not give shareholders the opportunity to endorse the Kirkby proposals on the night with a traditional ‘show of hands’ vote but will rather go straight to a poll vote. For the record, the Articles of Association of the Everton Football Club Company Limited state “A resolution put to the vote of a meeting shall be decided on a show of hands unless before, or on the declaration of the result of the show of hands a poll is duly demanded.” A poll vote would ensure that should Mr Kenwright, Mr Earl and Mr Woods wish to continue with the Destination Kirkby proposals they will be able to do so regardless of the wishes of the 1,500 or so minority shareholders. We find this stance somewhat surprising as one would think that the board would be confident that shareholders will be appreciative of the merits of the Destination Kirkby proposals and its benefits to the long term prosperity of the club and endorse the boards proposals. We believe that the board, whilst demanding respect from the floor, should equally consider the wishes of minority shareholders who wish to safeguard the best interests of Everton Football Club. We believe that it is important that the board take this opportunity to listen to the concerns of shareholders and Evertonians who are not convinced about the wisdom of the Destination Kirkby proposals now that the facts are known. We would remind the board that Evertonians were furnished with few facts during the original ballot process and the club promised Evertonians a ‘world class’ and ‘effectively free’ stadium. It is clear that the board will fail to deliver on these promises and subsequent independent surveys have concluded that the Evertonian community would not have endorsed the Destination Kirkby proposals had they known what we know today. We believe that Destination Kirkby is a risky venture that will present Everton Football Club with a very uncertain future. Evertonians want what is best for the long term success of the club and as such if the scheme was genuinely the best possible solution to the stadium issue it would attain unanimous support, unfortunately the Destination Kirkby proposals have divided not united the fan base. A further development that has occurred since we submitted our EGM petition to the club on the 18th July 2008 has been the sudden resignation of Keith Wyness shortly before the ‘call in’ was announced. A number of articles have appeared in the media linking Mr Wyness’ departure (http://www.timesonline.co.uk/tol/sport/football/premier_league/everton/article4467155.ece) to the growing behind the scenes influence of retail tycoon Sir Philip Green. Further articles (http://www.guardian.co.uk/business/2008/aug/03/everton) suggest that Everton Football Club will be sold if the Destination Kirkby proposals are approved. Both Tony and I are concerned that these reports suggest that the board are pursuing the Kirkby proposals in order to enhance the short term value of the club prior to a sale. Indeed Section 8.6 of the ‘Proposed Stadium For EFC’ report by DppLLp state that “The Directors of the Club recognise the need to strengthen the balance sheet in the short term” We would also advise that we have been in negotiation with the club concerning the wording of the resolution to be put to the vote at the end of the EGM. Our original intention was to request that a fresh ballot be put to Evertonians based upon the known facts in relation to the Destination Kirkby scheme however this proposal was declined by Mr Elstone. We are disappointed that the board have declined this request citing that Evertonians have already been consulted on the matter; however we would point out to Mr Elstone and the board that the information provided by the club at the time of the ballot did not, in our view, reflect the reality of the Destination Kirkby scheme. Having discussed the matter through our solicitors we believe that we are now close to agreement with the board and it is hoped that the resolution to be put forward for a vote at the end of the evening will be worded as such: “In the best interests of the Everton Football Club the shareholders of the company request that the board extricate the club from the exclusivity agreement with Tesco followed by the immediate withdrawal from the Destination Kirkby scheme and forthwith commence negotiations with Liverpool City Council to ensure that the club can redevelop Goodison Park or relocate to a central location of the clubs choice within the city of Liverpool.” We trust that the board will not reject this proposal and will afford shareholders the opportunity to have a show of hands on this resolution. Finally, the Chairman and the Board, when requesting order and respect at the EGM, must remember, as one Goodison official recently proclaimed, “respect is a two way street.” It is hoped that the board will not use their authority to dismiss the concerns and wishes of minority shareholders. The club has recently promoted the notion that Everton FC is the ‘Peoples Club’ and as such should give Evertonians the opportunity to endorse or reject the Destination Kirkby proposals now that further facts have come to light.. Should the board fail to reconsider their current position and offer a ‘show of hands’ vote to shareholders on the night of the EGM we have taken this opportunity to enclose a further petition calling for another EGM to debate the specific off field affairs of the club. Should you wish to support us we would request that you complete the attached requisition form and present it to either Tony or myself on the night of the EGM or alternatively email a scanned copy of the requisition to [email protected] or post your signed copy to: Mark Grayson c/o PO Box 118, Aigburth, Liverpool, L17 6WX. Once again, thank you for your support. Mark Grayson and Tony Bennett, August 2008

The Business Plan - Should Evertonians be concerned? Everton supporters have unanimously welcomed the incredible transformation, under David Moyes, from perennial relegation fighters to re-establishing their rightful place as members of the elite in English football. Unfortunately this contrasts greatly with their performance off the field; starved of outside investment the management team had little choice other than to introduce cost cutting strategies that have included the outsourcing of their catering and merchandising operations, the disposal and mortgaging of tangible assets to fund day-to-day business requirements and the securitisation of intangible assets such as the annual TV and merit payments to provide much needed funds for the manager.

Season

Additions in year

Disposals in year

Profit/(Loss) on transfers

2006/07

19,549,000.00

12,181,000.00

(7,368,000.00)

2005/06

17,547,000.00

10,535,000.00

(7,012,000.00)

2004/05

15,398,000.00

26,906,000.00

11,508,000.00

2003/04

4,313,000.00

4,246,000.00

(67,000.00)

2002/03

13,304,000.00

2,182,000.00

(11,122,000.00)

Net Spend period 1/6/02 to 31/5/07

(14,061,000.00)

Average Spend per Season

(2,812,200.00)

As can be seen above, the board have been unable to support David Moyes with a transfer budget befitting one of English footballs most well supported clubs. The above figures, taken from the clubs own accounts, highlight that the business side of the club has generated a meagre average net transfer spend of just £2.8m per season from average attendances of 37,000. Due to the accessibility problems with the site it is questionable how the Kirkby proposals, with the potential to sell just an additional 10,000 seats, will improve this situation if the club fails to attain significantly increased attendances.

Evertonians are concerned that these strategies will eventually lead to a complete inability to compete in the transfer market. Many of these strategies were outlined in a three-year business plan, sadly, despite vast increases in media and merit payments, as can be seen in the chart on the left, this strategy has failed to improve Everton’s financial standing. In fact, save for the sale of Wayne Rooney which can be seen in 2005, it could be argued that the financial standing and prospects of the club today are perhaps worse than at any time in the last eight years with little hope of improvement as the asset base runs out and financial institutions review their lending criteria due to the credit crunch. Part of the problem is undoubtedly the inability of the club to generate sufficient revenue from attendances, corporate hospitality and commercial activities. To address this the board proposed a move to Kirkby, highlighting that the extra capacity and improved corporate areas would generate a net contribution of £10M per annum for the manager, many supporters opposed this as in their view the plan would be unlikely to achieve these objectives. Following representations by Tesco the board of Everton entered into an exclusivity deal preventing the club exploring alternatives to their Kirkby project, however shareholders and supporters believe that this agreement is not in the best interests of the club and that other proposals should be explored and developed.. The Destination Kirkby project was presented as a cost effective solution for a club with limited financial resources; the project is heavily reliant upon the size of the associated retail development as this provides a £52M cross subsidy to build the stadium, allegedly making possible the acquisition of a £130M stadium for £78M. Supporters and shareholders believe that the board of the club should immediately extricate itself from this exclusivity deal, identify potential sites within the city and make an approach to the City Council with a view of obtaining their support for a new Everton business development plan. Such a business plan should be for the long term benefit of the club and not merely a device to add short term value to the club. It is clear that the club needs to resolve the stadium issue for the benefit of team building however the business plan for Kirkby is unclear and the benefits to the long term prosperity of the club very much uncertain. It is essential that a new stadium will generate increased and sustainable revenue for the future prosperity of the club however the Kirkby proposals offer great risk for very little return. The table above right illustrates the transfer spending that the board has afforded to David Moyes since May 2002.

At best, assuming that the proposed ground attains capacity crowds for every home league match, the club could optimistically hope to generate an additional £8.9m on the basis of an additional 13,000 seats being sold at £35 for all home league games. A further £1.25m could be generated if the 25 additional executive boxes were sold at £50,000 each however these most optimistic figures will have to be offset by servicing the significantly increased debt and the other 12 or so outstanding loans that currently exist against property and assets. We believe that this is a risky business proposal requiring regular capacity attendances however where will the increased revenue for transfer funds come from should the stadium fail to attain regular capacity crowds? The planning documents state that the club will not be able to hold concerts and the like so how do the board expect this additional commercial income to be generated? The board must remember that over 10,000 Evertonians have already registered their opposition to the Kirkby stadium proposals so who will replace these supporters if they decide not to attend matches in Kirkby? What will happen to the club if it fails to regularly achieve capacity attendances? The business plan associated with the ground move clearly raises many questions about the future prosperity and status of the club. As minority shareholders, we acknowledge the potential to increase the value of our shareholding in the short term as the valuation of the club will no doubt be enhanced by the £52m retail subsidy to be derived from the Destination Kirkby development. However, we did not buy our shares for profit and we are concerned that the benefits of the Destination Kirkby development will merely provide the opportunity for short term financial gain rather than the long term prosperity of Everton Football Club? Aside the value of the major shareholders bloc shareholding; shares are currently changing hands for £1,300 per share and with 35,000 shares available this would suggest that Everton Football Club is currently valued in the region of £45m. Should the Destination Kirkby scheme be approved and the £52m subsidy become available to the club would the board anticipate that the club’s value will more than double? As the stadium is phased to be built before the retail element of the development; what mechanism has the board put in place to ensure that the retail subsidy is available to the club to offset stadium construction costs and increase the value of the club? We have noted comments in the media stating that investors are waiting to buy the club should the Destination Kirkby development proceed. As a consequence do the board believe that it would be prudent to sell shares shortly after they had been enhanced by a retail subsidy or would the board recommend that shareholders retain their shares despite the potential for the value of the club to later subside should the newly completed ground fail to attain capacity gates and generate the revenue that was previously anticipated by the board? If shareholders were intent on making a profit from their shareholding would they be wise to sell their shares after they had been enhanced by a retail subsidy and before any potential problems with insufficient attendances and revenue became apparent? We would like to take this opportunity to remind shareholders of the words spoken by Bill Kenwright at the 2004 EGM. “tonight we’ve got gathered together some of the most passionate Blues. That’s why you own shares, I own shares, and we own shares. Not for profit or involvement. So, it might amaze you to know this but I welcome tonight’s meeting because I know the sole reason it has been called is to improve Everton Football Club. Finally, because Everton is a passion for us I expect passion tonight”

Literature for an Extraordinary General Meeting of Everton Football Club, Summer 2008

The Directors/Company Secretary Everton Football Club Limited ("the Company") Goodison Park Liverpool L4 4EL REQUISITION BY MEMBERS OF EXTRAORDINARY GENERAL MEETING (Section 303 Companies Act 2006 and Article 10.3 of the Company’s Articles of Association) Dear Sirs We, the undersigned, being not less than one-fifth in number of members of the company as at the date of this notice REQUIRE you forthwith to proceed to convene a general meeting of the Company for the purpose of 1. Obtaining from the Board of Directors their comments on the financial performance of the club over the past eight years and under the chairmanship of Mr Kenwright and his fellow directors, specifically; 1.1 the effect on the football club of the decision to implement a policy of outsourcing commercial activities. 1.2 the effect and current status of implementing a policy of asset disposal and utilization. 1.3 the current level of debt and the club’s ability to service that debt whilst operating as a football club in the English Premier League. 1.4 the effect of relocating or not relocating in respect of the club’s ability to generate sufficient funds to meet current financial commitments. 1.5 the ability of the board to generate sufficient revenue to enable Everton Football Club to be competitive in a transfer market dominated by wealthy football club benefactors. 1.6 clarification concerning the sudden departure of both Trevor Birch and Keith Wyness from their role as CEO of Everton Football Club. 2. Obtaining from the Board of Directors actual details and a full account of past, present and future investment in the football club, specifically; 2.1 the level of actual investment into the club made by each individual member of the board directors above and beyond their acquisition of shareholding. 2.2 actual details and a full account of the search for additional outside investment undertaken in recent years in relation to the aforementioned financial performance of the football club. 2.3 clarification of approaches made to the board concerning any interest to acquire a major shareholding in the club and also clarification of the board’s interpretation of investment and whether or not the club is genuinely open to offers of external investment. 2.4 the extent of Sir Philip Green’s involvement in Everton Football Club. 2.5 an overview of the financial strategy that the club intends to implement over the next three years in relation to the aforementioned financial performance in recent years 3. Obtaining from the Board of Directors clarification of the situation to secure the services of David Moyes beyond his current contract in light of media statements that Mr Moyes wishes to work at a club that can match his ambition. 4. Obtaining from the Board of Directors further comments on the stadium issue, specifically; 4.1 the benefits of the exclusivity deal that is preventing the club from fully exploring alternative solutions to the stadium issue. 4.2 the concerns raised and potential effects on the clubs business strategy due to anticipated problems with the proposed transport plan at Kirkby which may deter supporters from attending football matches. 4.3 in light of the chairman’s comments that Goodison Park may soon struggle to attain a safety certificate. 5. To have a show of hands to pass a resolution, on receipt of the answers given by the board to the aforementioned questions, in relation to the shareholders confidence in the ability of the board to act in and secure the best long term interests of Everton Football Club. Dated 0

Name

1

Number of Shares

2

Signature

EGM Newsletter

On Wednesday the 3rd of September 2008 Everton will hold an extraordinary general meeting at which shareholders will have the opportunity to question the board, on behalf of all Evertonians, on specific aspects of the proposed move to Kirkby. Important issues surrounding the apparent departure from what Evertonians were told prior to the ballot in 2007 as opposed to what actually appears in the Tesco planning application require urgent clarification.

• In light of the decision to hold a public enquiry and on reflection, was the signing of an exclusivity agreement, binding the club into a development that represents a significant departure from planning policy, in the best interests of the club and its shareholders? • Would the board agree that, in light of the information that has surfaced since the publication of the planning application, the 2007 ballot is not a true reflection of the wishes of supporters of Everton Football Club?

In order to dispel the fears of shareholders, Everton’s Shareholders and supporters, having read the DTZ report, chairman, Bill Kenwright, will be asked to provide answers are now questioning the suitability of a plan to relocate to many questions including: Everton to a retail park beyond the outskirts of the city. For those unfamiliar with the report it can be found in full • Why did the club advise Evertonians that the club’s at www.keioc.net contribution to the proposed stadium would be effectively free when the DTZ report confirms that the One of the objectives of the EGM is to provide answers to club will have to contribute £78,000,000? concerned Evertonians; it is not an exercise to apportion • What are the current expectations surrounding the blame to any individuals on the board or indeed those proposed plan to raise £78,000,000? shareholders and supporters who believe that this • What is the actual cost of building the stadium? proposed relocation to Kirkby represents the best that • What level of long-term debt would be deemed the club can achieve given its present financial standing. acceptable to the board? The ultimate goal of the EGM is to guarantee that the • What will be the impact, for Everton, of the recently future direction of the club is one that offers an inclusive announced public inquiry? strategy ensuring the interests of all involved in making • Why does the chairman claim to have been searching the club what it is today and what it will be tomorrow are for investors or prospective buyers for the club when taken into consideration. With this in mind the chairman the DTZ report states that the directors have no will be asked take a vote on a further resolution, namely: intention of selling their shareholding?

“In the best interests of the Everton Football Club the shareholders of the company request that the board extricate the club from the exclusivity agreement with Tesco followed by the immediate withdrawal from the Destination Kirkby scheme and forthwith commence negotiations with Liverpool City Council to ensure that the club can redevelop Goodison Park or relocate to a central location of the clubs choice within the city of Liverpool.” Let us hope that in the spirit of the people’s club the people will be allowed to register their support or objection to Destination Kirkby now that the facts surrounding the relocation to Kirkby are known.

Should Evertonians be concerned?

Everton supporters have unanimously welcomed the incredible transformation, under David Moyes, from perennial relegation fighters to re-establishing their rightful place as members of the elite in English football. Unfortunately this contrasts greatly with their performance off the field; starved of outside investment the management team had little choice other than to introduce cost cutting strategies that have included the outsourcing of their catering and merchandising operations, the disposal and mortgaging of tangible assets to fund day-to-day business requirements and the securitisation of intangible assets such as the annual TV and merit payments to provide much needed funds for the manager. Evertonians are concerned that these strategies will eventually lead to a complete inability to compete in the transfer market. Many of these strategies were outlined in a three-year business plan, sadly, despite vast increases in media and merit payments, as can be seen in the chart on the left, this strategy has failed to improve Everton’s financial standing. In fact, save for the sale of Wayne Rooney which can be seen in 2005, it could be argued that the financial standing and prospects of the club today are perhaps worse than at any time in the last eight years with little hope of improvement as the asset base runs out and financial institutions review their lending criteria due to the credit crunch. Part of the problem is undoubtedly the inability of the club to generate sufficient revenue from attendances, corporate hospitality and commercial activities. To address this the board proposed a move to Kirkby, highlighting that the extra capacity and improved corporate areas

would generate a net contribution of £10M per annum for the manager, many supporters opposed this as in their view the plan would be unlikely to achieve these objectives. Following representations by Tesco the board of Everton entered into an exclusivity deal preventing the club exploring alternatives to their Kirkby project, however shareholders and supporters believe that this agreement is not in the best interests of the club and that other proposals should be explored and developed. The “Destination Kirkby” project was presented as a cost effective solution for a club with limited financial resources; the project was heavily reliant upon the size of the associated retail development as this provided a £52M cross subsidy to the stadium, allegedly making possible the acquisition of a £130M stadium for £78M. The pressure group KEIOC are one of many groups opposed this, citing that the development represented a major departure from planning policy; in August 2008 the Secretary of State, Hazel Blears, called the application in and announced that a public enquiry would begin in November. Supporters and shareholders believe that the board of the club should immediately extricate itself from this exclusivity deal, identify potential sites within the city and make an approach to the City Council with a view of obtaining their support for a new Everton business development plan. This should be for the benefit of the club as a whole and not just the major shareholders.

Literature for an Extraordinary General Meeting of Everton Football Club, Summer 2008

Potential Alternatives to Destination Kirkby Redevelopment of Goodison Park

The phased redevelopment of Goodison would perhaps offer the most cost effective solution to Everton’s current financial predicament and protect the historic elements of arguably the best remaining example of an Archibald Leitch designed football stadium in the country. An extended Bullens Road stand, similar to this seen here, comprising an additional tier and the conversion of the lower stand to corporate lounge facilities with a further extension of the Park End area that would include complementary developments involving a landmark tower hotel and leisure amenities, would see an incremental development from 40,000 to 52,000 with an ultimate target capacity, after the redevelopment of Gwladys Street and the Main Stand, including a new Spellow Lane corner, of 61,500. Additional finance would be derived from these enabling developments, an investment from a supporter based trust, a true reflection of the ethic surrounding “The Peoples Club” and through the support of the council and the NWDA that would be essential to the success of this innovative development plan. The projected cost for the redevelopment of the Bullens Road stand would be £28M with a figure of £15M for the extension of the Park End seating area alone leading to later redevelopment of the Main and Gwladys Street stands.

The Scotland Road Site

The location involved in this development includes land north and south of the tunnel loop site. It is perhaps notable that this location within Everton, alongside the university named after our illustrious benefactor and in close proximity to the city centre is perhaps more worthy of our great club than any other site. The owner of the land within the tunnel loop site, Bestway, previously commissioned a report from top stadia designers HOK Sport Architecture proving the feasibility of locating a 55,000 capacity stadium on the site. Support from the city council would be a prerequisite for this development; land surrounding the site would be required for non-retail based enabling, the value from which could be reinvested into the stadium. £220M would need to be raised through a combination of debenture sales, a naming rights agreement; supporters trust investment, a possible rights issue, debt finance and public money from the NWDA. However, the availability of the site will not exist forever, Malcolm Carter, Bestway’s head of Property, has recently said “Bestway are currently considering other uses on the Scotland Road site which will assist the overall regeneration of North Liverpool and in view of the news surrounding the progress of “Project Jennifer” and rumours that TESCO have pulled-out leaves open the possibility for wider opportunities. However, Everton have still not formally engaged with Bestway at all during the past 18 months or more. We will see how things progress regarding our latest proposals – whilst respecting the interests of our existing and future customers and staff.”

The Kings Dock

A location previously embraced by 86% of Evertonians may once again become a possibility. The land south and extending 900 to the arena, is capable of housing a stadium the size of the Millennium Stadium and, if built, would provide Evertonians with a location befitting a top-flight premiership club. Possible scenarios include leasing the stadium whilst its operators / owners promote the facility for other events that would be incapable of being accommodated at the smaller nearby arena or, alternatively, outright ownership with the possibility of deriving additional revenue from associated development on a site containing arena, conference and major stadium event facilities, a true combined leisure and business destination. Once again combined financing would be essential to this type of development and, due to its location - close proximity to a city centre - the increase in contributions from debenture sales, naming rights agreements, accommodation and leisure revenue would be a distinct possibility and one worthy of investigation.

A Shared Stadium Facility Looked at from a purely financial perspective this alternative is undeniably the most attractive, yet remains, for cultural reasons, the most controversial. The possibility of playing at Europe’s finest club football arena is undoubtedly appealing, as would be the benefits surrounding the opportunities available from a facility that offers so much top-flight football in a single location, the enhanced revenue levels derived from highend corporate debentures and a stadium naming rights deal would be unmatched in English football. Due to these factors the very real possibility exists for a £500M 80,000 seat stadium to be delivered at no capital cost to either club, whereby the facility would be leased by both clubs and operated by an independent stadium operating company.

The objections surrounding cultural identity of supporters and atmosphere could be accommodated through technology and a neutral stadium environment that changed its appearance according to the home team. Outside the stadium separate fans areas could exist where the individual clubs could operate accommodation, bars, restaurants, lounges, museums and leisure facilities for their fans. A key element to the success of this controversial scheme would be the chosen location; if chosen correctly, again, close to the city centre with it existing infrastructure and facilities, it could offer the city an iconic destination, expansion of the city centre and regeneration.

Literature for an Extraordinary General Meeting of Everton Football Club, Summer 2008

Statements Liverpool City Council Leader explains:

Liverpool City Council have worked hard to accommodate Everton FC within the boundary of the City; from the work undertaken on the King Waterfront project to the feasibility on the Bestway site. The Officers of the City Council alongside the elected members have worked to ensure full cooperation with Everton FC when requested to. I personally have met Everton FC directors on many occasions, and have also been engaged in conference calls and meetings with Officers and Joe Anderson. Sites have been offered to the football club to consider, including extending the footprint at Goodison Park; unfortunately the club have used the exclusivity agreement as a barrier to further dialogue. I hope Everton FC will reconsider their position and open full dialogue with the City Council and other partners, which will hopefully lead to the retention of the club in the City of Liverpool. Warren Bradley Leader of Liverpool City Council

Liverpool Labour Group Leader explains:

Since the Kings Dock failed over five years ago, neither Liverpool City Council or Everton Football Club have had discussions about the future of EFC and the need to move or improve their ground. Both Everton Football Club and Liverpool City Council blame each other for the lack of progress, EFC for their part are angry that Liverpool Council have done little to help, unlike Knowsley Council, whilst the City Council explain they have not been approached by EFC. For whatever reason Everton Football Club would not talk to anyone formally because of the exclusivity deal agreed with Knowsley and Tesco. I personally, along with Warren Bradley, met with Keith Wyness in March of this year and he refused point blank to talk about any option the City may have put forward, Keith Wyness has gone now and I believe this provides us with an opportunity for progress. Either EFC can bury its head in the sand and wait for the Public Enquiry result that in my opinion will not be favourable to the Kirkby move, or it can enter into serious discussions with the Council and others into exploring all options of staying in Liverpool including the redevelopment of Goodison Park. Being passionate about the redevelopment of the City of Liverpool and as an Evertonian I want our club to prosper and develop in this City, this can be done in partnership with the Council I will do everything possible to assist, let us stop the blame culture and work together for the good of EFC. Councillor Joe Anderson

The Shareholders Association explains:

TOP-flight football has reached a point where the pace of change off the field is almost as fast as the tempo on the pitch. At the same time, Everton FC has to decide whether to renew Goodison Park or relocate. As a result, the club is going through one of the most momentous periods in its 130-year history, possibly the most momentous since the ground move in 1892. Decisions taken by the custodians of the club may have ramifications for the next 130 years. The Everton Shareholders Association has, as an organisation, tried to maintain a neutral position on Kirkby, being mindful of the varying opinions of its members. Members of the executive committee feel the situation has not been helped by the release of vague and conflicting assertions, frequently lacking in supporting detail. The Shareholders Association therefore welcome the opportunity, offered by the Extraordinary General Meeting, to elicit further information about some of the main issues involved in the proposed Kirkby project and associated planning process, and to discuss them fully. We believe it is essential that legitimate concerns about the costs, funding options, transport issues and design/build quality of any proposed stadium are addressed. We also feel shareholders should be made aware of what contingency plans the Club have, should Destination Kirkby not prove feasible. We trust that all shareholders will take this opportunity to demonstrate their support for our common cause, Everton Football Club.

The Shareholders Association 2006 explains:

The members of the Everton 2006 Shareholders Group are extremely concerned about the current situation at the Football Club. The shareholders and supporters are deeply divided about the proposed move to Kirkby; there are also deep feelings about the club not offering an alternative plan to Kirkby. We are undoubtedly experiencing turbulent times, which can be said of a lot of other Premier League Clubs, but most of our current problems appear to be self inflicted. Our Team Manager has painstakingly built up a squad of players to create a platform, which with the right support, is capable of moving on to the success all Evertonians crave. Instead we find ourselves wondering what is going on, communication is so poor we really don’t know what the future holds. At the moment there are serious divisions between the supporters, the shareholders and the directors, this cannot continue we all only have one aim in view and that is for the good of Everton Football Club. We must regroup and move forward united and only then will the true spirit of Evertonians come to the surface and allow us to fulfil our dreams.

Nil satis nisi optimum Anne Asquith, Chair of the 1938 Shareholders Association

Richard Lewis Chairman

KEIOC explains:

Everton are at a crossroads in their long and illustrious history. The decision to relocate will shape and dictate the future success or failure of the club for many decades to come. KEIOC have diligently campaigned against the relocation to Kirkby on the basis that we do not consider the development to be in the best interests of the club as a whole, that the plan is fundamentally flawed due to the reliance on a retail scheme that is undeliverable as it represents a clear departure from agreed planning policy and that the majority of fans attending games will have their matchday experienced devalued due to an inadequate transport policy that will see fans walking, waiting and being “crush loaded” on to an insufficient number of trains and buses. KEIOC fully endorse all initiatives that will encourage constructive dialogue between Everton, Liverpool City Council and other stakeholders that will facilitate the redevelopment of Goodison Park or the construction of a stadium that befits a football club of the status of Everton. The campaign calls on Everton to establish a working group, comprising members of the council, executives of the club and representatives from shareholders and fans organisations, whose remit will be to identify all the requirements of the club, as a whole, leading to the identification of prospective sites, a development plan and an achievable timeline.

Literature for an Extraordinary General Meeting of Everton Football Club, Summer 2008

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 33

Green at heart of Everton battle Robert Lea, Evening Standard 27 October 2006, 8:55am Billionaire rag trader Sir Philip Green is the secret power broker in the bitter, multi-million-pound struggle for control of Everton Football Club, the Evening Standard can reveal. Green played a major role in the acquisition of a key 23% stake in the Merseyside club by Planet Hollywood tycoon Robert Earl from Everton board member Paul Gregg, the cinemas and leisure multimillionare. However, it is understood Green's involvement in the deal - at a time of unprecedented interest in the ownership of top Premiership clubs - is just the culmination of a longrunning relationship with Everton's other major minority shareholder, impresario Bill Kenwright, which also saw Green play a key role in the controversial sale of England superstar Wayne Rooney to Manchester United. Green admitted to the Standard: "Paul Gregg's stake in Everton was offered to me. I have always made it clear that I do not want to own a football club so I introduced Robert Earl, a good friend of mine. It is no secret that Bill Kenwright is a good friend of mine too' Evertonians are horrified that a king-making stake in the club has seen sold to a self-confessed Tottenham Hotspur supporter, and they have until now been unaware of Green's role in the deal-doing of club chairman Kenwright. Quizzed on the part he played in the £27m sale of Rooney two seasons ago when the club was in dire financial straits, Green replied: 'I have no comment to make on that. That is none of your business.' Green's involvement at Everton was first revealed by the Standard in the summer, but the retailer, who yesterday reported a slump in profits at his Arcadia High Street empire, has previously denied any interest, even telling the Daily Telegraph this week: 'It's nothing to do with me.' DEAL MAKER: Sir Philip Green is said to have played a key role in Wayne Rooney's move to Manchester United The Everton power struggle comes at a time of massive takeover action at the top of the game. Following the acquisitions of Chelsea, Manchester United and Aston Villa by Russian and American billionaires, British football is awash with speculation of further big deals in the offing. Middle East and Far East investors are reckoned to be stalking a number of clubs including West Ham United, Arsenal, Spurs and Liverpool. The acquisition of 23% of Everton for around £9m by the mysterious special purpose vehicle BCR Sports which is being fronted by Earl, values the club at around £80mincluding debt. Analysts reckon that Everton boardroom infighting - which has seen one-time friends Kenwright and Gregg part company as sworn enemies - have helped to stall attempts to revive the club's fortunes. For instance, plans to relocate the club from its Goodison Park home in Liverpool to a purpose-built, £200m development at King's Dock on the Mersey waterfront have so far come to nothing.

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=414100&in_page_id=3

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 34

Wyness exit leaves Green to hold sway Dan King, Daily Mail 02nd August 2008

Retail baron Philip Green should have an even bigger say in how Everton is run following the shock departure of chief executive Keith Wyness. Green's close relationship with chairman Bill Kenwright is well known, but what is less widely acknowledged are the links between the Arcadia boss and one of the club's other major shareholders, Robert Earl. It is understood that Green not only led the negotiations for Planet Hollywood founder Earl to buy Paul Gregg's 23 per cent in 2006 but also paid the £9million cost of the shares at the time of the transaction.

http://www.dailymail.co.uk/sport/othersports/article-1040998/Palace-chairman-Simon-Jordan-findsally-Bostock-row.html

Everton FC, Blues fans and the credit crunch Aug 5 2008 by David Prentice, Liverpool Echo David Prentice turns his expert eye on the power stakes at Everton BILL Kenwright put Everton up for sale the day he took over from Peter Johnson in 1999. The “for sale” notice never came down. The Blues chairman has repeated his willingness to stand aside like a mantra – “I’ve always said that if there’s anybody out there with more money than me and the best interests of the club at heart, I’ll walk away.” But yesterday’s statement indicates a subtle shift in thinking at Goodison Park. For the past eight years, Kenwright has always been willing to listen to offers for his majority shareholding. But now he appears to be actively chasing it. The reasons are evident. After breaking their transfer record in each of the past three seasons, Everton have lost five first-team squad members this summer – and recruited precisely none. On Sunday night in Colorado, Everton’s central midfield consisted of two promising but raw kids with a sum total of three first-team appearances between them. Unless there’s a rapid recruitment drive, Dan Gosling and Jack Rodwell could find themselves thrust into the unforgiving glare of the Premier League spotlight in 11 days’ time. The worldwide credit crunch – i.e. the ability to borrow money – has hit Everton hard. Much of the money Everton have spent in recent years has been borrowed. The £13m record fee which secured Yakubu’s signature last summer was loaned, with club directors Bill Kenwright, Jon Woods and Robert Earl acting as guarantors. It was suggested that Philip Green, the BHS mogul who is a friend and financial advisor of Kenwright, lent the money and now wants it back, leading to suggestions of a financial crisis at Goodison. The Blues chairman laughed off that suggestion yesterday. But while Green has no official status at Goodison, his influence extends deeper than just a sounding board for the club chairman.

http://www.liverpoolecho.co.uk/liverpool-news/local-news/2008/08/05/everton-fc-blues-fans-and-thecredit-crunch-100252-21466679/

Green is close friends with Earl – the pair are currently holidaying together on a yacht in the Mediterranean – and their growing influence at Goodison has been cited as a contributory factor to Keith Wyness’ shock departure as chief executive last week. Wyness was the driving force behind Everton’s plans to relocate to Kirkby, and with a possible new stadium in the offing, the Blues have suddenly become a more attractive proposition to would-be investors. But fans should beware. As their neighbours across the park discovered, sometimes it’s better the devil you know. Theatre impresario Kenwright first tried to take a hold of his beloved Blues in the summer of 1994. He ran head-to-head against Park Foods supremo Johnson after Lady Grantchester decided to break the Moores family’s long association with the club by selling up. Johnson, a former Liverpool season ticket holder, always possessed more financial clout than the lifelong Blue – and, as a result, was backed by the fans and the media. He bought the club for an outlay of little more than £10m. But after a honeymoon period yielding an FA Cup win and a spending spree which saw players of the calibre of Andrei Kanchelskis, Duncan Ferguson and Nick Barmby arrive at Goodison, Johnson’s reign imploded spectacularly. Spending was sanctioned which the club couldn’t afford, crowd idol Ferguson was sacrificed to keep the bank at bay, and Goodison became the scene of angry protests. Johnson was forced to quit in November 1998, but such was the chaotic nature of the club’s finances at that time, Kenwright was the only investor interested in taking over. By his own admission unable to pump money into the club, Kenwright remortgaged his London home to raise his stake and enlisted the aid of theatre-world friend Paul Gregg. Gregg admitted no prior knowledge of the sport of football and his interest in Everton was based around the planned move to Kings Dock. But when the waterfront stadium scheme foundered, so too did Kenwright and Gregg’s relationship. In the summer of 2004, Gregg led a very public and acrimonious bid to oust his former friend from the chair at Goodison. Goodison was riven by civil war once again and Kenwright was required to unearth a potential investor called Chris Samuelson to hold off Gregg’s challenge. Some would question Samuelson’s credibility – the fabled Fortress Sports Fund never did supply any investment – but his involvement did hold off the interests of Gregg. Since then, Kenwright has enjoyed an unchallenged run in control, and the stability has been reflected by three top-six finishes in four seasons. But if Everton are to take the most difficult step of all and break into the top four, greater investment is needed. Everton, effectively, is up for sale once again. http://www.liverpoolecho.co.uk/liverpool-news/local-news/2008/08/05/everton-fc-blues-fans-and-thecredit-crunch-100252-21466679/

Disquiet grows at Everton over Keith Wyness exit The Times August 6, 2008 Keith Wyness had a showdown meeting in Majorca James Ducker, Tony Evans Everton’s troubled pre-season took another twist yesterday when it emerged that Keith Wyness, the former chief executive, quit Goodison Park last month because of the growing influence of Sir Philip Green, the retail magnate, on the club. Wyness was linked with a similar role at Real Mallorca, but while he visited the Balearic island after leaving Everton, it was for a meeting with Robert Earl, the Planet Hollywood founder who owns 23 per cent of the Merseyside club, and Green, who has consistently denied any financial involvement in them. Wyness had become increasingly concerned by Green’s input at Everton. Financial information about the club was regularly passed to the billionaire, who has no official role at Goodison, and club officials have been summoned to conferences with Green at the headquarters of Bhs, which Green owns, in London to discuss strategy. After leaving the club, Wyness went to Majorca, where an acrimonious meeting took place. The two sides failed to agree on a severance package and Wyness is believed to be planning to take Everton to an industrial tribunal. There had been suggestions that the chief executive stood down because of controversy over Everton’s desire to move from Goodison Park to a new stadium in Kirkby, outside the Liverpool city boundary, or concerns about the financial future of the club. However, the sole reason was Wyness’s disquiet over the influence of Green. Green has a longstanding relationship with Bill Kenwright, the Everton chairman. He turned down the chance to buy a stake in the club two years ago, recommending Earl instead. It has been a summer of turmoil on all fronts at Everton. The club expect to hear this week whether their plans to relocate to Kirkby will be subject to government review. Should the £400 million scheme, in conjunction with Tesco, be called in for further scrutiny, it could hold up the move for at least a year — or kill it completely. It has been a frustrating time for David Moyes, who has expressed his anger at being unable to buy players. The manager has been forced to sell Andrew Johnson, whose move to Fulham should be completed today despite the concerns of the London club about an old knee injury after the striker’s medical. The initial fee is likely to be about £5 million, although Everton could still receive up to £13 million. Sporting Lisbon’s £16 million valuation of João Moutinho is prohibitive, although Moyes remains eager to land the Portugal midfield player, as well as Stéphane Mbia, Rennes’s £5 million-rated Cameroon midfield player. Any move for Diego Milito is likely to hinge on selling Johnson and Real Zaragoza lowering their price. For Wyness, too, the future is uncertain. The £40 million sale of Mallorca to Paul Davidson — the pipefitting tycoon known in City circles as “The Plumber” — is in its early stages. Although Davidson and Wyness are old friends, reports that the latter was to take up a role with the Spanish club were premature and he is furious at suggestions that he was working on behalf of Davidson while employed at Goodison.

http://www.timesonline.co.uk/tol/sport/football/premier_league/everton/article4467155.ece

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 35

EGM Resolution Defeated by Scott McLeod | Wednesday 3 September 2008, 23:23

A General Meeting of Everton's shareholders has voted against a resolution to explore alternatives to the Kirkby Project. The EGM took place in the Alex Young Suite of Goodison Park on Wednesday night in order for shareholders to address the Everton board over issues raised relating to the Destination Kirkby project. After an extensive 25-minute presentation by Acting CEO Robert Elstone concerning the stadium options, including the issues the redevelopment of the Goodison Park site would pose, Chairman Bill Kenwright and the board fielded questions from the floor relating to the Kirkby proposal from representatives of shareholders who attended by proxy and shareholders themselves. Key issues highlighted related to funding, transport factors, the redevelopment of Goodison and staying in the city. At the completion of the question and answer section of the evening a resolution was proposed and a ballot was held of those shareholders present. The resolution called for the Club to extricate itself immediately from the exclusivity agreement with Knowsley Borough Council and Tesco in relation to the Destination Kirkby project in favour of further talks with Liverpool City Council relating to possible sites in the city. The result of the ballot was 622 votes for and 26,553 against, representing 97.71% of all votes cast against the resolution.

http://www.evertonfc.com/news/archive/egm-resolution-defeated.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 36

Elstone On Clear Mandate by Scott McLeod | Thursday 4 September 2008, 11:53 Everton have pledged to continue to be open with fans after 97.7% of shareholders' votes cast defeated a resolution calling for an end to the exclusivity agreement over Destination Kirkby. The outcome of the ballot provided the Club with a clear mandate to continue with the exclusivity agreement with Tesco and Knowsley Borough Council. The vote took place at Wednesday's General Meeting at Goodison Park a meeting called by a group of shareholders to address the issue of the proposed ground move to Kirkby. Kirkby remains the Club's number one choice for a new home. Speaking exclusively to evertonTV, acting CEO Robert Elstone said: "We knew it was going to be an emotional evening – the whole Kirkby Project and the issue around Goodison is full of emotion and it’s emotion we can understand and respect. We knew feelings were going to be high, we tried to present the case for Kirkby in a balanced way we tried to genuinely look for other options and we still believe that the Kirkby project is the right one. "I think that where we sit today that we don’t believe that there are any other viable stadium options and we believe that the development of Goodison may be possible, but possible with some monumental hurdles to overcome – probably the biggest of all is cost. "What we showed tonight is that those cost are huge and that’s even making the assumption that we can do something with the Goodison site, because on the existing site it is just no go. We did a lot of work looking at other options and I think we believe that there aren’t any, but if there are, the message is talk to us. "The presentation talked about the billionaires in football. We don’t have a billionaire owner, but there are football clubs out there that are facility led. The Emirates is a good example of a facility that is generating a lot of cash. Old Trafford makes a phenomenal amount of money on a match-day and we have an opportunity now to try and close that gap. "It will be a big challenge for us to get our case prepared before that day and that’s going to take a lot of hard work. That’s not something we’re scared of and we will do it." The ballot of shareholders followed an extensive question and answer session, during which a number of individuals attending by proxy took the opportunity to address the gathered shareholders, whilst there were also questions from proxy attendees and shareholders aimed at the board. Mr Elstone added: "I think a couple of things that came out loud and clear is that the door is open at this Club. If there is a proposal out there and the Chairman said that the door is open to future investment. So I think there were three key messages – yes we will continue to support the Kirkby project but if there is a site out there we are happy to look at that and if there is an investor out there we will have a look at that. http://www.evertonfc.com/news/archive/elstone-on-clear-mandate.html

"We’ve had some good feedback on the presentation. It was absolutely a team effort, not just from Everton employees, but also our advisors. It was important that we tried to put it across in a way that people could understand and appreciate and in a way that explained that we were absolutely aware of the issues and emotions. It was an attempt to be very straight and very open and I think we did that. "There are still lots of unanswered questions and I think that one of the other messages is that we will continue to progress with Kirkby but we need to deal with some of the outstanding issues, but in the whole it is still a great opportunity for this Club and something we will continue to pursue." The result of a government inquiry into the planning application for the Kirkby Project is expected to be announced in the Spring, with the inquiry getting underway in November. Despite the complications to the project, the continued focus from all three parties gives the Everton CEO confidence in the outcome of the project. He added: "It’s a big ask and I think that the early inquiry date is good because I think that it’s critical that this project is only delayed one year because if it is beyond a year it will make the development a lot more difficult to deliver. "Getting in early on the inquiry is good. There are no guarantees that the debate at the inquiry and the subsequent report writing and consideration of results will be done as quickly as we would like but it gives us the chance to get back in business on this and get in potentially for 2011. "I think that staying at Goodison will continue to challenge our budget, our transfer kitty and our wage spend. It’s getting harder and harder, the Chairman has made it clear that we’ve pushed the envelope as far as it can go at Goodison or near to that limit. But if we are really looking to go to the next level then we have to do something about facilities. Goodison will not allow us to do that but a new stadium will, it may not get us every inch of the way but it’s a significant step forward for this club."

http://www.evertonfc.com/news/archive/elstone-on-clear-mandate.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 37

Everton EGM Questions & Answers - September 3rd 2008 Mark: Mr. Chairman, what concerns me most about this situation is that I believe you are moving us to Kirkby purely to enhance the value of the club prior to a sale. I believe your motivation is driven by the £52m subsidy that will increase the value of both yours and mine shareholding. You have gone on record to say that you do not want to be the man that oversaw the departure of Everton football club from it's traditional home and yet you will be. I would like to know, had you had sufficient resources, would you still be moving the club to the poorly accessible site that is Kirkby. In light of the money that is pumped into clubs like Manchester City, do you believe a wealthy owner would even contemplate such a risky venture? B.K.: The first statement was totally incorrect. There is nothing about this move that is nothing about the value of my shareholding. The value of the club, it is everything to do with. I love this club as much as anyone in this room. Do I believe a wealthy owner, I can't put an answer to that, I would have hoped that if I'd found a wealthy owner, that maybe that £250m project that we saw there would be viable. From my point of view, as chairman of this football club, it's not viable. I personally can't go on the way I've been going on,. As I've said every AGM, borrowing every year, to get transfer funds. We can't get any extra income for this football club. Do I want to be here, answering this question Mark? You know I don't. Do I find any alternative to it, you know I don't. I have tried and I will continue trying and if, in the next weeks, months, years, before this project goes forth, a new owner comes in, a new board comes in and they don't believe this is the right project, the right move, then it's up to them to say so. I cannot see an alternative. I cannot see any other way, of providing more funds for David. This summer has been the worst summer I've ever known in the transfer market and it's going to get worse and worse. The Arabs buying Man City will make things even more difficult for a football club like Everton. There was a chart in the Guardian on Monday that showed the top 13 owners in football. We weren't in it. This does not include Tottenham, Daniel Levy. It does not include Blackburn, which we know had a wonderful millionaire behind it. It does not include Sunderland, which has four multi millionaires behind it. And there was another club. So we're not in top 17. I'm a pauper when it comes to other chairmen. I do my best. I borrow. I bounce balls up in the air every season to try and support this man. Is this anything to do with my shareholding? No. And anyone who believes that, they've got the wrong chairman. Mark: All I'd like to say in response to that is, we've seen Man City twice in 18 months been taken over by billionaires. I would rather see a takeover and a new owner who can offer us a deliverable stadium within the city. I would like to see the club achieve the most money and the best business plan to back David Moyes. That's what we all want to see. I hope that can happen through a change of ownership. B.K: I agree with those statements. I would like the club to have a billionaire who can support David Moyes, not as a friend, not as a member of this football club, not in the way that David supports me and I support him but with more money. I think you're in fantasyland. I think there are people out there and I'd be very surprised... It's difficult for me to say anything because everytime I say something, you take a bit of it. Again, I don't want to be the chap who takes this club to Kirkby and I didn't want to be the man who sold Wayne Rooney but I am and I probably will be. I don't want to be here next year. I do not want be standing in front of you saying it's been another tough season. I don't know where the money is. I want you to have everything you want, which is a billionaire. Whether it's a Sheik, whether he's a Russian, whether he's American, whether he's one of the 14 or 15 people who I've probably met in the last 12 months. I want to give you that and I want you to say, okay Bill, now stand down. Now you've got your billionaire. And I want to give that to every single one of you. Why, because I want him [Moyes] to have money, because he and I fight every single year. He fights as much as I do for player’s salaries. We are a cabaret act when we meet players, about this football club, the salaries we can afford, about the transfer fees we can afford. We had 91/2 hrs together the day before yesterday getting in a substantial signing for this football club. That was not easy, that was really difficult. That was nothing to do with a chairman who wants money.

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That is a chairman who actually wants to fulfil a promise to this football club. That's all I want. I so want every single one of you to have your billionaire. It's not me, I apologise, it’s not me. Tony: I find it amazing that Robert could stand up and give us all the facts and figure about staying at Goodison and re-developing, more or less to the penny, yet it took us a long time to get this deposition together and I don't it's answered any of the questions, esp. 1.1. I fully expected the board not to tell the truth and to hide behind commercial sensitivities tonight. I think a lot of people expect that. Because, if planning permission was given a few weeks ago, to make this project viable [ ], according to the planning application, work would have had to start immediately. As I remember Keith Wyness saying the spade will be in the ground by July. To make it viable, bearing that in mind, you would have had to have the finances sorted out now. My question was to ask have you got a potential buyer for Goodison Park, have you got a potential buyer or bidder for the naming rights or are you going to be relying on the clubs sleeping partner and proxy shareholder, sir Phillip Green, to go guarantor for any future loans? Bill: Sorry, I object to that. Phillip Green is a friend of mine. You want to talk about Phillip Green, I'll talk to you about Phillip Green. Phillip Green was there when a lot of you were behind me to buy this club. He was my friend, he still is my friend. He's there 24 hrs a day for me. If you could find any fault in Phillip Green, one of the greatest businessmen in the world, giving me advice that I pass onto this football club, I can't see it. He is not a silent shareholder. Tony: Does he hold any shares? Bill: He owns no shares in this football club. Nil. He is my friend and consequently your friend.... I don't know why you think that's funny but he's a great friend to this football club. I promise you. Audience: In what way? Bill: If you have a friend who is one of the greatest business brains in the world, who is available for you 24hrs a day, will give you advice, would you not use that friend? Because I certainly do. He's been there for me and consequently for you. Through six very difficult years, even years before the six years. He became my friend in 1998 when we in big trouble. He quickly latched onto my passion for this football club and he's been there, through thick and thin ever since. He's my friend. Robert Elstone: The £78m pounds of funding is manageable and is achievable. It's broadly set out, we know what our parameters are. But it's surely sensible not to disclose what our targets are on stadium naming. That would be silly, that would be like telling an opposition manager how much David’s got to spend. Equally the sale of Goodison Park. We want to negotiate the best price. I don't want that figure to go into the public domain. Rest assured, that' £78m, in broad parameters, is set out and fundable. If it goes up and it's not clear yet by how much, it's not clear, as yet, who's going to pay for that. Tony: The point being, to make it viable in your own report, work would have to start immediately to be ready for 2010, so what I'm saying that the funds aren't available if work were to start today. Robert: No, we are not saying that. We are saying that if the point is making it viable that we start in 2010, then the overrun might make it more expensive. It is not going to change, as yet, how much this club will have to pay. We know how we will fund aspects of it. We won't have to find the whole £78m on day one. We believe we can manage that funding, Tony: Bearing that in mind, then after the November inquiry, the earliest decision will be possibly be June or July next year and if accepted there will be judicial reviews, appeals, village green applications and also legal proceedings from the residents of Kirkby who are being thrown out of their houses with CPO's. You've only got to look at the Edge Lane project to see how long that takes. Bearing in mind the planning application, a delay of one year will cost the club circa £6m, excluding fit out, also the

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[...............] on stadium design, could further increase cost. So how much is it going to cost the club for each yearly delay and, where is this money coming from, if you can't get the £78m together. Robert: We are not saying that. What we are saying is that we have not yet established what the cost of a one-year delay would be and who will bear that cost. We haven't yet done it on a two-year basis. We will have to manage that as we go. We are currently managing that situation. We have the broad parameters in place and we will have to deal with things like that as they arrive. Tony: I just find it incredible that you know all the costs about redeveloping Goodison and what it's going to cost us in lost revenue but you haven't got a clue about what it's going to cost us with the delays over Kirkby. You can't come up with any figures. Robert: I can't explain it any more clearly I'm afraid. Paul Cook: I think it's an absolute disgrace to have the manager of this great club sitting here at an EGM. This is to discuss busisness and to divert away from Davey, he shouldn't be here. I've got a couple of points. Will the Arcadia group be a partner in the retail side of this development? Bill: No is the answer to that question as far as I know. Paul: Can you categorically state that the Arcadia group will not be part of..[ ] Bill: I cannot categorically state that but as far as I know, no it's never been..[ ] Paul: But there's every possibility that the Arcadia group could benefit from the retail development in Kirkby? Bill: No Paul: How do you expect the current 10,000 fans to walk to Kirkby? How will the transport strategy accommodate all fans access to and from Kirkby in a safe manner? What price will it cost, additional, to the park and ride system being proposed? Where do you expect 10,000 fans to park their vehicles in and around Kirkby? Where will the extra fan base be built from on the basis that we are going to lose 10,000 walking fans going to Kirkby? Kara [SDG]: First of all I'd like to say it's definitely going to be different from you are used to here at Goodison and I think that needs to be taken into the spectrum when talking about the new stadium. In terms of car parking, we have a sister site in the surrounding seats and have concluded that within 1.5miles or a 30? min walk, there's the potential for 5, 700 spaces for cars, so that's more than enough. They will be secure car parks, managed by Everton football club. Paul: Will that additional cost be bourn by Everton? Kara: [..........] I'm not sure. Paul: Can you give me a ball park figure of Everton's contribution to the transport strategy that needs to be put into place for the Kirkby project, and if so what is the cost that is going to be bourn by Everton? Kara: The transport strategy's capital budget is in excess of £10m. Paul: That's Everton's contribution to improve and accommodate the transport? The current transport infrastructure dosen't accommodate what this stadium befits[?] What is Everton's contribution to the current transport strategy?

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Kara: The £10m is for improvements to the current Kirkby railway station and the construction of a new coach park and a new bus station next to the stadium. Paul: Kirkby's current railway station is a single line. There's only Kirkby station. It's a single line. What are we going to do? Are we going to ship in...[ ? ] Not being an expert but I think it's a four carriage maximum train to Kirkby. Now currently, let's say you can get 300 people in that, one train, per hour, in Kirkby, going back to Liverpool. How are you going to accommodate from Liverpool to Kirkby, transport wise? Kara: Currently the trains are 3 carriage trains and Merseytravel has agreed to double those to 6 carriage and we will be accomodating 960 people per train. 15 mins frequency per hour. Paul: Legally, Kirkby train station can only take and accommodate 3 carriage trains. Kara: That's not true, the platform is long enough to accommodate 6 carriage trains. Paul: I assume that's going to be reviewed. So again, it's only got one line to Kirkby. Is it a to and fro service? Kara: No, it's the end of line so they will turn back to Liverpool. So it's 960 people, per train, every 15 mins. That's just under 4,000 an hour. Paul: When I go the match, I'm a walking fan. I like to walk. I would prefer to use the bus system. How again, you're going to be talking 20, 30 buses buses an hour? Kara: There's one point I'd like to mention. Tescos will be funding the rail improvements and the bus and coach station. Paul: So the £10m is not Everton's cotribution? Kara: No, it's Tescos. In terms of the buses, you've got 68% of Everton season ticket holders that live within Merseyside so there's a great opportunity to use public transport. What we're proposing is to introduce 15 non-stopping buses to Kirkby stadium, from residential areas, from major stations and from the town centre. That's 15 new buses which are solely for the purpose of getting fans to the new stadium. Paul: So, the park and ride system.. Kara: The park and ride? Paul: It's the system to drop us off at Aintree and take us all to Kirkby. Kara: The park and ride sites will? be chosen. They'll be close to motorway junctions. You'll be able to get off the motorway, park your car and there will be really frequent, high quality shuttle buses that will go between the park and ride sites and the stadium. Now, they'll be dropped off across the road from the stadium and it'll be about 10, 5 min ride on that bus. Paul: So, it's going to take me, are you happy to put an hour on my journey alone and people who live outside the borough, you'd be happy to put another 2, 3 hours on their journey. Kara: Everyone's journey is going to be different. You tell me where you live, I can... Paul: will you provide me with a park and ride....?

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Kara: You could catch the train, that's a twelve minute walk to the stadium. Paul: I could also catch a helicopter to the nearest....? Kara: You could catch a bus that will drop you off right at the front door. There's many options of public transport available. If you wanted to drive, you could drive and use a park and ride site. You could also use one of the Everton managed park and walk sites. Paul: My final question is basically, where are you going to get the extra 10,000 fans from Bill? This is straight to you, as the chairman. We follow you, you're the main man, you're the bones of this club. At one point I loved you, now I think you're an absolute disgrace. Now that's my own personal opinion, you've given me an opportunity to say so. Bill: You'll always have an opportunity to say it. I don't believe that we will have to get an extra 10,000 fans. Paul: 10,000 fans didn't vote in your ballot. They decided against voting in your ballot. They're not fully supporting you Bill. Bill: They'll fully support Everton. Paul: But you're accommodating us with an extra 10,000 seats here. Where are you going to get.... Bill: I'm not. What I'm trying to do is give you a way forward financially for this football club. It's all to do with money. Football is all to do with money and that's what I'm trying to do for you. Paul: Just finally. I live in Walton, it's already a dump, you're now putting us in the bin mate. You're taking half the economy away from Walton. A lot of it. You're an absolute disgrace and I think it's terrible for the people of Walton. James Asquith: I'd like to follow up on a couple of points. You said that there would be 4 trains an hour, one every 15 minutes which would take 960 people... Kara: 960 is the number given to us by Merseytravel and it's the number they use at large events such as Aintree for the Grand National. James: So the last of those 4,000 people, assuming only 4,000 people come to the match by train, the last of those 4,000 people would just be getting on a train, 12 minutes walk from the ground, an hour after the final whistle and then when they get back into town, they've got the rest of their journey to do as well. Kara: There will be some people who will have to wait close to an hour, that's correct. James: And you're assuming only 4,000 people are going to come by train? Kara: What we've done is map all the train stations within a 45 minute catchment of the stadium and that's what we've based our analysis on. James: And how many people get to goodison by train or get the soccerbus and walk up? Kara cannot answer at this point so Robert helps out.

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Robert: It's fair to say that one of the requirements here is a satisfactory amount of people leave the stadium within an acceptable space of time. 85% of our fans will have left the Kirkby stadium within an hour. That is deemed to be acceptable. James: So 15% are still going to be about? Robert: Well Kirkby is a redeveloped site, people will want to stay around the stadium (laughter)... people stay around the Emirates after the game and have a drink. Stay on the concourse and watch TV. It's a business opportunity for us. Kara: 12% of visiting supporters catch the train. James: What's that in numbers? About 4,000? Okay. Moving on, a couple of questions on your presentation Rob. On of the things you said was that we've got a wonderful financial reporting system here at the club and we monitor cash flow on a day to day basis. A little bit later on, you then got to wage figures for ourselves and other clubs. They seem to come from the accounts two years ago. Do we not know what the figures up to May 2008 at least? Robert: we are making comparisons with other clubs and we have to rely on publicly available information. The parameters surrounding that chart will be not much different from 2007/8 to 2008/9. It what's publicly available information. James: Okay. One of the other things you said about the space being available in Kirkby but there isn't in the city, there's not enough room. Isn't the reason for that, that people want to be in a city. They don't want to be in a town on the outskirts of a city. That's why big businesses are in Liverpool, that's why big businesses are in the centre of Manchester. Robert:So where does that leave us if we need the space. James: Well, that's where the commercial opportunities are as well. I know it's difficult, I'm not saying that's a positive in terms of the land values in Liverpool. Robert: Is that like saying build a stadium on Regents Park in London because that's where the business is? James: What I'm saying is any enabling development in Liverpool would be worth more [...] because the land's more expensive. No? Silence from the top table James: Okay then. One of the key things about the exclusivity deal which was signed, is it two years ago now? What benefit to us, has that exclusivity deal had? To Everton football club, what was the benefit? After more silence Robert: The benefit was, we were wedded to two excellent partners who were supporting us through this project and it was our demonstration of commitment to them. James: But it prevented any other partners offering us anything. Robert: Absolutely not. The door was always open to approaches...[shouts from the floor].. James: So what was exclusive about it?

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Robert: We weren't able to go and source it, we weren't able to go and look but if any options were presented to us we could look at them and in two years, none of them came forward. James: So the director of Bestway, or the Chairman of Bestway didn't come forward and contact anybody at the club? Robert: He didn't come forward with a workable solution. He didn't come forward with anything that merited us revisiting the agreement we had with Tesco and Knowsley. We have asked repeatedly to see plans, repeatedly asked to see how we might make this thing work and nothing has been forthcoming. James: I must have misunderstood then because I thought that the chairman of Bestway had made public statements in the national media that he'd [attempted to engage with the club]? Maybe we ought to take him to task on that? Chris Potts [Savilles]: I'd greatly like to assist with the answer. In terms of, as a site, I mean clearly the planning application that we've been talking about contains details of many of the sites that the club has looked at over a period of time, including reference to the Bestway site. I'm aware of comments that have been attributed to the developer and landowner. I have never seen information, proposals, site area, funding strategy, masterplan or any information I could provide guidance to the board on whether there's a viable project there. So, it's fair to say that the club haven't engaged. There hasn't been any information to engage on and certainly the work we have done on assessing that particular site led us to the conclusion that it's not viable. James: I'm sorry, are you saying that the statements made in the national media [attributed]? to Bestway, are incorrect? Chris: I'm not aware that Bestway, or any other party associated with that deal or that proposal, have furnished the club with any information in terms of a masterplan, a programme of feasibility, appraisal. I'm not aware that that information has been submitted to the club. James: But you encouraged them to submit such information to enter into negotiations. Chris: Well clearly if you've got someone promoting a site, the first thing they would do, as indeed Tesco did with Kirkby, is approach the club with a well thought out proposal so the club could sit down and consider. Certainly on any sites that have been raised as potential alternatives, I'm not aware that anyone has gone into particular detail in order to entice the club to sit round the table. James: You said that, 4 or 5 weeks ago you'd asked the partners to re-look at redeveloping Goodison. You has a list of sites, the timeline that you put up, starting with the Kirkby golf course proposal from Peter Johnson and moving through. I think it was in 2006 that you had there you looked at a number of sites and one of them was Scotland Rd. Is that right? Where about on Scotland Rd. was that, do you know? Because presumably that wasn't the Loop site? Sir Philip Carter: Yes, the 2006 situation was the loop site. The Scotland Rd. situation was something that came through Tesco because they had been approached about a site on Scotland Rd. At the time, we were discussing the problems of Everton at Goodison and Tesco had been approached to say would they consider it as a site for retail for the development of north Liverpool. At the same time Scotland Rd. was put to the as a possibility of an alternative site and the discussions that they had, because it was really out of our hands, was that neither of those sites were suitable for a Tesco development. Eliminated us completely. James: So the tunnel loop wasn't suitable for a Tesco development but we never looked at it for a stadium development?

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Sir Phil: No, I didn't say that. Don't put words into my mouth. James: So they only to talked to Tesco about Scotland Rd.? Sir Phil: It came through Tesco, the Scotland Rd. site. It came through Tesco, not to us. It wasn't considered as a site for Everton. They, then, discussed it with us because we were talking about the site here so they had to talk to us. But the loop site, we've had no direct contact in the sense that this is a proposal with the actual dimensions. I think one of the difficulties facing us all, facing me for that matter, is that we look at this site here and say, well that's the size of it. In actual fact, you saw from the plans put before us. The site is enormous for a development. [..] enhancement that we want to actually make it viable for the club. From that point of view, if I go back now to the number of sites that I have personally have seen over the past 10, 20 years, way over 20 and in each case it's been primarily the size, the actual size. I can remember 12 years ago we weren't talking about development, we were talking about a site for a football club. You remember down on the docks, when were talking then about that site and the amount of work that went into that. We then started to talk about Anfield, should we have a joint and that went down the Swanee [........] some of which have been unacceptable, some of which have been worth looking at. But in terms of the overall size, this is the problem. Kirkby actually, at the moment gives us that size and fortunately gives us the money to go with it. Someone in audience: We couldn't find £30m for the Kings Dock. Sir Phil: That's not true. Audience: Well why didn't we go then? Sir Phil: I'll tell you why we didn't build it. We started off with a problem of £120m for the actual site itself. After that we had discussions. Don't forget, we had the local authorities, we had ourselves and we had the North West Development people. All of these were interested in this particular development. I was chairman of the NDC remember, down there with the development of the Docklands and we were... Audience: This isn't about the King's Dock, let's move on. Tony: Can I ask you [to Chris Potts] what you're an expert in? Chris: I'm a town-planning consultant. Tony: You mentioned there that when Tesco came to Everton with a proposal, they came with a masterplan, costings, and stadium drawings. A proper business plan. Chris: Tescos had commissioned a design team at their own cost, at their own risk. They put in place a strategy for land acquisition, their views on why the site was suitable. Their preliminary thoughts on accessibility. They set out a funding strategy and a programme for deliverability. Tony: Also, costings and a stadium plan? Chris: They are very well aware of the clubs requirements are. Indeed, I think the clubs requirements for a new stadium are pretty well documented as they've been searching for a number of years. So Tesco were able to work on those assumptions in order to come up with their initial proposals. Tony: So when we voted at the ballot, the board were well aware that this wasn't going to be a world class stadium, with a very poor transport plan and it wasn't going to be effectively free because Tesco had already brought the plans to the table.

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Robert: I think the information that Tesco had provided; they'd undertaken quite a lot of the feasibility work. The discussions that then continued [....] were able to work on the proposals in further detail. I don't think Tesco or Everton were misleading on those points. Tony: But you were much more aware of the facts than what's produced in this brochure? Robert: Most of the details in there remain valid. They've been subject to a lot of testing, evidence, scrutiny, assessment of the last two-year period. Tony: So we are still getting a world-class stadium, effectively free and the best transport policy as far as you're concerned? David Keirle (KSS): You've heard comments from Mr. Elstone about the quality, the cost per seat, about the engagement of professional advisors to make sure it's a design of a tradition to Everton's standards. Transportation. You've heard one of the other experts here this evening talk about the support of Merseytravel, the Highways Agency. Many consultants have looked at this in detail and their belief is that the strategy will work. Colin: Two questions to you Robert, because of your presentation. [....] around the statements you made, going beyond the £78m. It's no good having a stadium you can't afford. The DTZ report, section 3.1, contract sum analysis and it reads 'the stadium construction costs, calculated in Qu.3 2007 is £90m. There's an additional levy, 11% phasing, inflation,[ added to]? this £10m. The fit out and moving costs, £30m. We all know the total cost is £130m. This 11% phasing forecast, I understand is coming from Barr. It's quite realistic actually, 3 weeks ago the Royal Society for Chartered Surveyors Building Cost Information Service (BCIS) stated that raw material and lbour costs have risen by 12.2% over the past year. They have an additional forecast that it will rise by 12% over the next 2 years. Due to the delay caused by the Government inquiry, which is unlikely to deliver a verdict until Qu. 3 2009 and the probability, as T.B. mentioned, that further delays such as Kirkby residents objections, CPO's going to the European courts and supplementary legal challenges of which there are quite a few. It would be unrealistic to expect construction to begin before Qu. 3 2010. That's a two-year delay. That's not uncommon on large building projects. This means that by applying the BCIS inflation figures, you are talking of total construction costs in 2010 of £151m. That's a £21m increase on today's figures. We are all aware that Tesco are providing a cross subsidy of £52m but who will pay these additional costs? May I remind you that the cross subsidy is dependent on the size of the retail. It is this element of the planning application that has brought all the objections from the neighbouring authorities. Robert: As was said in the presentation, the precise costs of the specifications of this stadium has not yet been determined. There are broad parameters on the stadium specification and we know broadly what our funding requirement will be today. Absolutely, there are likely to be cost increases thrown up by delays and what we have to do is manage those with our partners, discuss them and manage them and find solutions. As we stand here today, we don't know the extent of the delay, we don't the extent of those cost increases and we have to deal with them as they arise. Colin: I appreciate what you're saying but the DTZ report is part of the planning application and that's what's sitting on Hazel Blears desk. Not what the board or anyone else might think, it's the planning application. And it's also the transport. It's no good looking at it after, it's what's getting looked at now. And what's getting looked now is £130m. Now I'm not going to argue with the Royal Society of Chartered Surveyors. They're saying, that using their figures, it'll be £151m. You're saying it will be difficult to manage anything in excess of £78m. Clearly, that's in excess of £78m. Silence.

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Colin: I'll ask my next question. Will Tesco provide the £73m or will Everton now need to find £99m through the funding options stated in 2.6 of the DTZ report. I now you've claimed commercial sensitivity but if you could give us some information. How is this broken down and what is the total monetary expectation from each stated option? They're in the DTZ report, it's not commercially sensitive, are we going to get a massive stadium naming rights deal or are we going to have to go and borrow the money? If we are going to borrow the money, what's it going to be borrowed against? Robert: Colin, as we sit here today, I cannot state what we will get for stadium naming rights, nor can I say what we will get for the sale of Goodison. There has already been work undertaken on stadium naming rights and we've had some encouraging meetings. The two things we don't know are the extent of the delay and we don't know the impact that's going to have on any cost. Secondly, we cannot state what the precise funding mix will be. The DTZ report, as you've said, sets out 6 different funding sources and they will all be considered. Indeed, all of them have been considered. Colin: [Fine] Another debt? Robert: Whoa, how is sale of Goodison, how is stadium naming right debt? Colin: You won't get that value from... Robert: How do you know? Colin: You won't because you're going to securitize the money. Robert: Didn't Arsenal get a substantial up front payment from Emirates? Colin: So is that what you're saying, you looking at an Emirates type value, in Kirkby? Robert: No. Colin: No. I know you're not. So, you say you don't know, I'll just remind you. The board were told repeatedly that this application was undeliverable because it represents a major departure away from existing planning policies and you were told repeatedly that it was going to get called in. It got called in and now we are telling you that it's going to go on and on because of these other problems. People are going to put in legal challenges, that's before the planning even gets through. I want to ask you something, Mr. Chairman. Aren't these figures a far cry from being effectively free, or even close to the claim by Sir Terry Leahy during the ballot, when with [...] accuracy, he stated that Everton would be obtaining a £150m stadium. I'm just reminding you of that £150m because that's what it looks like it's going to cost. A £150m stadium for an investment of around £35m. Do you Mr. Kenwright, believe that you still hold a mandate when it is clear that information given to obtain that mandate was inaccurate? Bill: I don't believe that was part of any mandate. I'll take you back a little bit to how this started because as I told the AGM last year. It was at the Man City game four years ago and we lost 5-1. Terry Leahy was on the same train as me and he said is there anything I can do to help out? I said we've got to find finance from somewhere. He [...? ...] over the next two years. Tesco came forward with 30? possible locations with LCC and they got nowhere. They were told, in no uncertain terms, there's no will to support a stadium and retail development. Just over two years ago now, he quoted those same figures to me but it was actually, if I remember, a £150m stadium: £50m enabling funding; between £30m, £40m, £50m from us; £50m of value in the site, in the infrastructure, in the fact that we would get no developers profit and because of Tescos involvement. When I saw the first designs I was, no I want more, I want this, I want that and that's why it started going up. [...?..] another 10,000 seats which will cost another £25 m. I've never doubted Terry Leahy's integrity or his support for this football club.

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Colin: Do you want me to ask you the question again? I'll just point out that Kirkby, I think you need to read the planning application; it's not going to go over 50,000. It's stipulated in that. I'll ask you the question again, do you believe, Mr. Kenwright, that you still hold a mandate, as claimed on the website and by the previous Chief Executive, given that the information used to gain that mandate was inaccurate? B.K: I don't believe it was inaccurate and I do believe we hold a mandate. Colin: So, you told the fans that they would be paying up to £100m? The club would have to fund £100m. B.K: I don't know what you mean, sorry. Colin: It's effectively free and Keith Wyness... B.K: I never said effectively free. Colin: That's what the fans were told, effectively free and Keith Wyness' first figure was, it would cost approximately £15m. Within a matter of weeks it had gone up to £30m and then Mr. Leahy came out in a statement and said it would be £35m. The DTZ report, as it stands now, says £78m and it looks like, if you put the phasing in, it's going to be £100m. So would you agree that the fans were misled? B.K: I told you, as far as I was concerned, it was always going to be a circa £50m investment and because I wanted more for the stadium, it's gone up. Colin: So they were misled then because you thought it was £50m, £78m.......[....?....] B.K: £78m. That is the figure that we put a cap on because it would be very difficult for us to go above that. Colin: That's what it says in the DTZ report, it breaks it down. John: Bill, I've got two questions for you. At the last AGM Trevor Skempton, who we all know, I don't know if he's here tonight, [...?...] redevelop stadiums such as Newcastle's stadium, said to you that he believed he could make Goodison into a world class stadium again. You asked for his details and said you'd be in touch. Did you ever get in touch with him because I believe you didn't and, if so, have your team been in touch with him because they've made statements, that [are] diametrically opposed to what Trevor Skempton said. Now, I know the background, the history and the ability of Trevor Skempton, I don't know about these people. I mean no disrespect.. B.K: Robert has met Trevor, has spoken to him and Chris Potts, I'm not sure he knows Trevor but he's... John: Was he the chap we laughed at last year. Yes? You're the one we laughed at last year. B.K: That's totally inappropriate.. John: It's a fact though Bill. B.K: You might have done, I didn't. John: All these people did....... Has someone actually spoken to Trevor Skempton?

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B.K: Yes, Trevor’s been spoken to and Chris Potts is down there and we actually had a meeting before [....?....] John: My second question. It's a hard time for you Bill, the credit crunch, people not queuing up to see Joseph; it's a hard time for me as well. Why don't you just sell up? B.K: I'd love to. John: Well, why don't you? B.K: Because you need a buyer. John: Are we the only team that can't get buyers? We don't know who's buying because they never tell us. B.K: I would like to. I think I did make that speech before. I think I did say [...?...] John: Is it for sale? B.K: It's been for sale since the day I bought it. John: You don't actually say that Bill. What you do say is that you are looking for investment and that's a different thing. Are you now saying the club is for sale? B.K: I'm saying the club is for sale. My shares have been for sale since the day I bought the club. In fact... Audience: The planning application says the club is not for sale. Trevor: Can I ask first of all, a simple question about the presentation and then if I can expand the enabling issue again. Robert, on your presentation on Goodison Park which you said was the best, you put forward a scenario of the best way of spending £78m. You didn't show any enabling at all in that equation. It's common knowledge, or a lot of people have put forward the idea that for Goodison, there might not be retail enabling, there might be other forms of enabling. Hotel or leisure. When you're talking about an exercise to spend £78m on the existing stadium, I think few people would believe that blowing it all on the Bullens Rd. stand was the right way to do it. Was any consideration given to enabling development at Goodison? Robert: Absolutely Trevor, yes but I will let David and Chris speak but in the brief that we gave them we looked and asked them to as favourable and as positive as possible and to look and find the space to bring in suitable enabling development. Enabling that would generate a reasonable level of funds. That was part of the brief. David: In order to get reasonable development you need value and the site area that's available, you're not going to get much retail, if any, on the site. People talk about leisure and hotels, they don't really offer a great deal of value. They don't have a great deal of subsidy to hand across. Therefore, we haven't attributed much value to those but they were looked at and I think on Robert's presentation, there was space for potential enabling development. It's very modest; we think the value would be very modest. Trevor: I would argue for redeveloping Goodison. What redeveloping Goodison offers is incremental development, rather in the way the team is being developed at the moment. Year on year, without the need for multi billionaires but with a business plan which is geared to gradual improvement in bite size chunks. That's what Goodison could offer. Not the only way forward for the club but it seems to many of us the healthiest way forward. Now, if you are going to examine Goodison, the first thing

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you've got to do is look at what enabling is available, even if that's quite small. It's patently obvious that enabling development, in a city where hotels are still in short supply, where leisure is still a growing market despite the credit crunch, that that kind of enabling development would be available at the Park End. Even if it were reasonably modest within the context of £78m of development, something could have been done which would have had a contribution from enablers. Now, that's my answer to the question there. I would say that the whole question of enabling on the basis of out of town retail is a one off shot. It's a short term way of exploiting loopholes in the planning system. Now, it's been successful with relatively small developments and perhaps medium size developments like Coventry, if you regard them as successful. I would say that that loophole is first of all firmly closed, because out of town development now is frowned upon by government and by the vast majority of people involved with planning. I think that having let the cat out of the bag and not being able to bounce this through on the first bounce, the chances of success at a public inquiry are very, very small but I would talk to Ladbrooks about that. I would say that if you want enabling, you look for where the high value is and that's in the city centre. You have to share the stadium with somebody, absolutely agree. It could be shared with events organisations in the way that the Kings Dock was put forward. It could be shared with leisure, it could be shared with city centre type development. It could be shared with another football club, possibly. It could be shared with [.. ?..] other organisations. Most of the organisations that are compatible with a major football club are in the city centre. There are sites in the city centre with could be looked at, which should be looked at if this limitation of exclusivity could be removed. It's a fast moving area, the Loop site came up during the exclusivity period and there are other sites coming up. For example, there is a site at the Kings Dock now which is likely not to be developed and you've got an arena developer possibly looking to expand. There are all these opportunities. By being locked into an exclusivity, based on out of town retail, which I think is undeliverable. Apart from undesirable, I think it's undeliverable. To pursue it is going to be to throw good money after bad. I think that the city centre offers multiple sites, it's a shifting market and the sooner the club starts taking a lead, not expecting supporters or other people to come forward with worked out proposals but the club, taking a lead in discussions with potential partners, with the city council. Yes, there have been informal meetings. Yes, we are all on the same side, we do chat informally but there has been no proper leadership given by the club in approaching the city council or people like Bestway, who really have been very upset that Everton haven't taken them up on their [offer]? B.K: May I invite you to meet KSS and Savilles, now, tonight, tomorrow, whenever you want and go through it with them and there will be no animosity whatsoever in that. Tony Barton: I'm going to put a different angle on it. I'm a resident of Kirkby and in all this, what we've been told tonight, very little has been asked of thought of, how the Kirkby residents actually perceive and think about a football stadium being built within our town centre. I'd like to thank Robert and he must be filling Keith Wyness' shoes... With respect to what he said, what we've been getting and what we've got again tonight, is another spin if you like, another way of telling us the benefits of this proposal, this development, in Kirkby. We've had it for 18 months, we've been spun round so many times. We've been told how it's going to benefit job creation, etc. etc. Regeneration is a great word, regeneration. But it's not, it's the reinvention of Kirkby. Because the land that is going to be taken by this proposed stadium, is green, open space land and it's being given away by our council to Tesco, on behalf of Everton. A few words Robert said there: affordable, achievable and deliverable, I wrote them down. Well it's affordable by like I just said, the residents, us, are giving away the land for next to nothing. That's how it will be affordable. It's achievable because 70 homes will have to be demolished in the process and all those families will have to be relocated and scattered, like refugees, from the community. They've only been up 15 years, those homes, by the way. It's deliverable, it could be argued because the greed of Tesco, the ignorance of Knowsley council and some would argue, the incompetence of the Everton board which has brought us to this situation where we are now. It's an Everton needs led project and that's what we in Kirkby object to. We don't want to be told, dictated to that because Everton need somewhere to go, then it's got to come up to Kirkby and disrupt everybody's life up there. We don't feel that's fair and we haven't had a chance, and I appreciate the chance to be able to get up and speak in front of yourselves because we haven't had a

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chance in Kirkby. Now, with the planning inquiry, with it being called in, which we said all along, we have got the chance so we welcome that. My second point is to the experts here, SDG. They quite eloquently put across the argument about the transport. Well I don't know if the lady has ever been in Kirkby and tried to get out on a train on the late night christmas shopping. It dosen't take 15 mins and trust me, it's jam packed and that's with only 3 carriages. With 6 it's going to take twice as long. I'm not an expert at maths but with twice as many people on a railway station platform, it takes twice as long to get out. Not forgetting, that when a train comes in, people have got to get off and people have got to get on and it's got to go back, all the way down. 15 mins, as I'm sure everyone knows, is going to be doubled. All that's been said, and I've read the transport assessment by the way, is that's if everything works like clockwork. And as we know, it doesn't work like clockwork anyway. One thing they haven't said. Kirkby, from town, stops there. There's another side from Bolton, that's the other side of the platform. What happens when they come, the away fans? Kara: That's the Wigan line you're talking about? There's a very low demand there at the moment, there's only a handful of people using it. Tony: But on matchdays, the away fans. You've got Wigan, Bolton, Manchester. Are they all going to arrive at the same time? Kara: [In]? terms of other forms of transport... Tony: What if they want to get the train? Kara: If they want to get the train, we've had discussions with the operator and they'd be willing to increase the services. At the moment, we are not forecasting a heavy use of that line. Most of the people will be using the Liverpool line.

Tony: So, what you're saying is, the people from Wigan, Bolton, Manchester, you'll increase the services from there. So you'll have more trains coming in from there, more trains coming in from town. I just don't know how it's going to work. Kara: The numbers of people using the Wigan line will not be as much as people using the Liverpool line. The demand is for people using the Liverpool line and a 15 min..... Tony: With respect, you don't know that, you're just hypothesizing. Kara: We will be monitoring the Kirkby railway station, there will be a [..?..] in the car park that will be carefully managed by the police and Merseyrail and only a safe number of people will be allowed on the platform. Tony: In theory I agree, it sounds great. In theory anyone who's been to an away match, a home match, got the train, knows what it's like, so that's something for you to consider. Secondly, just to reiterate what somebody said again, I think it was Robert. The chance to expand to 60,000. As Colin Fitz said, in the document itself, it says there will be no expansion, it's in black and white, there will be no expansion so why do people keep using that. Uefa and, we could do this and we could do that, it says we cannot expand the ground, it can't be done. It needs to be sunk into people's heads, that is the truth, if you care to read the document it's in there. David Keirle (KSS) : Can I just respond to that. The stadium has been designed for 50,000 but it has the capability to be expanded to 60,000. It would have to be subject to a separate planning

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application in due course. The club would have to make a case for that. Let me get it straight, the stadium is capable of expansion to 60,000. Tony: But the document says it wont be. David: The document says 50,000 is for planning application. It has the ability to be expanded to 60,000 with planning application and you make a case. Tony: There's no guarantees then, if that's what we're talking about. One last question. This whole thing has been put across like someone is going to wave a magic wand. Everton will be sorted, Kirkby will be sorted, Tesco will be sorted. No such thing. It's the biggest gamble, probably, in the history of Everton Football Club. It's the biggest thing that's ever going to happen to Kirkby. It's going to be the biggest Tesco, I believe, either in England or in Europe. It's flawed, that was admitted by Knowsley council's CEO, it's controversial, it's contentious, it contravenes policy law: local, regional and national policy. It's a bad idea, ill conceived, so wrong on many levels and, some are arguing, it could well be the end of Everton Football Club if it does happen. The residents will fight. The CPO's will be like Edge Lane, they will fight, tooth and nail, for it not to happen. Some people say that it could be a fight against Everton but I argue it's a fight for the benefit of Everton: to be surrendering the city; to be marooned on a retail park next to Tesco in a small town on the borders of Lancashire. This goes to Mr. Moyes, who's thinking about signing a new contract, think about that in the future, where you will be, because that's what will happen. So, my question is Mr. Chairman, why not stay in the city? B.K: I have to say I believe you put your case very eloquently and very well. I agree with you, the transport doesn't sound great, it doesn't sound great to me but I know there are people working on it diligently and I look to improvements all the time. Why don't we stay in the city? No one has come up with an alternative proposition that works. That's the reason, that's what I've been saying, that's what Philips been saying, that's what Tescos have said. I don't believe, maybe I'm naive but I don't believe that this is put forward by Terry Leahy solely for Tesco. The man is a great businessman but I think he has his Everton hat on in this. Tony: Just to finish off, that's what I'm trying to say, it's not going to work and we'd be best staying in the city. Where's the a will, there's a way and although it's challenging, I throw the challenge down to what you're saying. The challenge is to stay in Liverpool city centre. Daniel?: To Robert Elstone please. Can you clarify as to what date we are bound by the exclusivity agreement? Robert: Bound into the exclusivity agreement throughout the inquiry period and there are certain clauses which allow us to escape in certain situations. We are currently within it and we will continue through the planning phase within it. Daniel?: Are you confident that if we leave Goodison Park, that there is a suitable hotel, leisure of supermarket facility that is interested in investing in this part of Liverpool? Robert: At this stage, we haven't entered into any discussions regarding the sale of Goodison. It may well be a construction of that nature, it may well be residential, we don't know that at this stage. Daniel?: My final question is, perhaps to the room. If people took their blue tinted spectacles off and their rose tinted spectacles off, how would they have felft if Everton and Liverpool football clubs had, from the outset, as opposed to this moment in time, had joined together, with the co-operation of Liverpool city council and started from the beginning on one project as opposed to where we stand today where we might be conceived to be the lesser partner, being bolted onto a potential ground with Liverpool Football Club. How would people feel if we had started together as opposed to where

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we stand now? Would they be so opposed to such a situation, from both sides of the city, if that was the case. Do people have an opinion on that? B.K: I'll give my answer on that. I've been to several meetings many, many years ago on that and I didn't feel good about it. Warren Bradley [LCC]: First and foremost, I'm not here to make statements. I'm here to ask questions. I missed the presentation unfortunately. I'm here to ask questions about some of the answers I've heard. Can I just say, firstly, LCC objected to destination Kirkby solely on retail on development grounds based around planning policy: national, local and regional planning policy. We believe that there's a contravention in the planning application. On a point before Sir Philip said about Scotland Rd. in 2006, there was some dialogue held with Tescos and Everton Football Club about a site on Scotland Rd. I was leader of the council at that time and have been heavily involved in Project Jennifer, which has been an integral part of the redevelopment of north Liverpool, esp. Scotland Rd. Throughout that, Tescos have been an active partner, up till a couple of weeks ago. Can I ask when did Everton Football Club approach LCC, who are the accountable body? Alternatively, when did Tescos or their agents go to LCC about Everton Football Club looking at a site on Scotland Rd? Because, as leader of this city, I'm not aware of it and I don't believe any of the officers of council are aware of it who've led on the Project Jennifer application and subsequent approval that we are moving on with. Someone on the board: What's the question Warren? Warren: When or who had dialogue over a site in 2006, as Sir Philip mentioned before, about a site on Scotland Rd. The first time Scotland Rd. was mentioned, the Bestway site, was in a meeting that I had with Bestway who were looking to relocate from the tunnel trumpet site for expansion. They were looking at other sites in north Liverpool, around the Vauxhall Rd. area. We seem to now have secured that. It was at that point that the Bestway tunnel trumpet site became an option and some work was done, in feasibility by LCC and Bestway, to see if a football ground could actually be delivered in that location. So when, in 2006, did Tesco approach LCC, or Everton Football Club to LCC about a site on Scotland Rd.? B.K: All I can tell you is that the conversations you and I have had about Bestway, which confirm to what you just said. Audience: Then answer the question. B.K: I've answered part of the question, I'm asking Philip to answer the 2006 question. Sir Philip: I think, you'll have to go back here Warren, to remember, err, Keith, who was at that stage our Chief Executive....[couldn't answer further] Warren Bradley walks away. Paul?[proxy for Neil McCann]: The word, enabling development has been used a lot here tonight so a question to Robert. Whether it be here at Goodison or on a new site at Kirkby, what does that actually mean in respect to income for the club. Is it literally that we've got hotels and shops around the thing which bring people to the stadium when they then spend money in the stadium or do we make money out of the shops directly and the stuff around the edges? Robert: The enabling development is a contribution generated by the developer which will be put towards the capital costs of the development of the.... Paul?: So it's Tescos facility. So do we get that money?

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Robert: I don't understand the question. Paul?: It's Tescos project that we're just piggybacking on, isn't it? It's not our project. We don't own the stadium, we're just renting it from them? Keith Wyness' peppercorn rent for 999 years. Robert: It's essentially our stadium Paul: I pay rent on my house. If the value of my house goes up, I don't make any money out of it. Robert: We have full rights [....?...] any commercial activities of the stadium. Paul?: Of the stadium, yes, but not the shops around it? Someone in audience: You don't have access to it all the time, because the council have it 2 or 3 days a week so don't say that. Robert: That will not present any significant commercial incumberment on Everton Football club. Paul: Just in respect of what was mentioned before about misleading people. The brochure that was given out. I'm not sure how many people were aware that the actual project that was put forward in the brochure was actually scaled down, I believe, at a later stage. So that some of the conditions were brought into it, such as no music concerts were allowed to be held at the stadium, as Johns just said, there were only X amount of uses, non EFC amount of uses a year and things like that. So, the information that was in the brochure and all the numbers, not that there were many of them, in the brochure that was saying 'we're going to make an extra £10m a year', were all based on the original plans which have now been scaled down. That's why the thing about the mandate was.... Robert: I understand but we are confident that we can generate £10m, £11m of incremental revenue from this new stadium. Absolutely right, we will not be allowed to host pop concerts. We don't believe that will have a material impact on our business plan. It would be nice to be able to do it but it is absolutely not the reason why we are moving to Kirkby stadium. Paul?: So, just to reiterate. Even though we are renting the stadium, any non EFC use of the stadium, we will get the income from that, we will get the money from that? It is effectively our stadium in that respect, it's not Tescos. Robert: Absolutely and there is a minimal grant that is currently being negotiated, a grant of time and access to Knowsley council, but that is still being negotiated. There are no commercial constraints, unreasonable commercial constraints being put on the stadium. Paul?: Another one, just simple question then. We are talking about £78m going forwards, possibly more than that and you've done your figures for how much it would cost to develop Goodison. You're obviously very accurate with your numbers so could you tell me how much you have spent so far on the Kirkby project? Robert: It will be made available in published accounts. We've spent, as a club, in excess of a £1m on this project. Paul?: Only £1m. Everton have spent only £1m on all the brochures and the balloting and.... Robert: In excess of a £1m but less than £2m. The number has not yet..... Paul?: All these experts down here, for the last two years you've hired these people to do all these studies, into Goodison, into....

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Robert: There has been considerable investment in professional fees from Tesco, Knowsley. As you rightly hit on, this is about a tenth of what Liverpool football Club spent on their professional advisors... Paul?: I'm just asking how much you've spent, I just want a number. Silence from the board Paul?: So you haven't got a number..... Silence from the board Paul?: I'd also like to reiterate that the people were misled by the brochure and the thing has now changed and people should be made aware. I think the mandate would give a very different view if it was brought forward again today, inaccuracies such as Goodison failing it's safety certificate. I believe the mandate is no longer valid and I would like another vote. Joe Anderson: Chair, one of the things that strikes me is that everybody in this room would probably prefer Everton Football Club to stay within Liverpool City Council's boundary. I'm not going to stand here and argue with your professionals about the financial, commercial issues in regards to whether Everton move or relocate but there is a number of inaccuracies, misleading comments and people being economical with the truth. The fact of the matter is I met with Warren Bradley and Keith Wyness in March of this year and we wanted to constructively discuss with him alternatives, other than Kirkby, within LCC's boundaries. We were categorically told, absolutely, under no circumstances, would we break that exclusivity deal and we wouldn't enter into any negotiations. Now I can accept that if that was the case, that there was an exclusivity deal that was to run and run but the problem for me and for Everton Football Club is that I believe that we are now in a situation where we will bury our head in the sand because we believe that the Kirkby project will proceed. The fact of the matter is, there's a hell of a long way to go before that decision, it will take at least 2 years. I personally, because of the issues around planning, it won't be given the go ahead. Therefore, I believe we have a decision to make: do we bury our head in the sand or do we look at alternatives and discuss with people that want to look, in the best interests of EFC, into keeping Everton within the city boundaries. I don't believe for one minute that we have exhausted all of those particular sites. LCC and for instance, the development of Everton, of the footprint of Everton. Its said the school causes a problem. We've got building schools for the future programme, millions of pounds within the city where we can easily relocate that school within the ward and within easy accessibility to all the kids that are sent there now. That's not a problem. We've also got housing market renewal so we can compulsory purchase or look at taking over the properties within there, so we can develop the footprint. We own the freehold of the garage, we can negotiate with them to relocate them. So the footprint, with the will of LCC and EFC, can be achieved. I also believe that the Bestway site and other sites within Liverpool, Edge Lane, Long Lane, can all be looked at. With a will and a way, both parties could agree to do something. What I want from you, Chair, tonight is a commitment from you, that if you allow Warren Bradley, he's here tonight, and me, whatever, to broker a deal so we can talk to one another, with the NWDA, with EFC, with Bestway and with other people to try and see if we can broker a deal. Because if we don't have a plan B, we're going to look absolutely stupid in 2 years time, with egg on our faces, when Destination Kirkby is destined to hit the buffers. After a minutes applause and shouts of 'answer the question, Bill' B.K: I don't believe the exclusivity agreement stops anybody putting a viable proposal to EFC. I have never believed that Joe. I remember the meeting with Keith Wyness. As far as I'm concerned, you come up with a viable proposition, you and Warren, for Everton Football Club and yes, we're there...

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Audience: shouts of 'make a commitment...' B.K: If you come up with a viable proposal Joe Mark C: Why don't Everton come up with one? B.K: We are there with you, thank you. Tom Cannon: Mr. Chairman. Tom Cannon (loud jeers and shouts of 'sit down'). I'm a shareholder rather than a proxy (shouts of ooohhhhhhh). The first point is, can I just thank Robert, for probably the most comprehensive explanation of the scenario we have had. Can I ask you, Mr. Chairman [..?..] permission [.. ?..] communication programme of that quality for the future. B.K: Yes Tom, I agree with you. I though the presentation was terrific. I think Robert, in the 5 weeks he's been at the job, has done an extraordinary job. I think he'll continue to do an extraordinary job. When Keith Wyness left, he and I had a meeting within 24 hrs and I said there is a feeling in the football club that communications are not good. I want an open door policy and all the different factions about this, about everything. It's an emotional issue, which should be listened to and supported. I agree with you, he's done a fantastic job in the 5 weeks that he's been here and supported by a really terrific team at Everton Football Club. Tom: Second question, Mr. Chairman. Has anybody at this meeting, denied to anybody, LCC or any other local authority, the ability to come and put forward a viable proposal. In my understanding, what you are saying is, if somebody comes forward with a proposal which is viable, both in terms of the size of the site, in terms of the funding of the site, in terms of the viability of the site, in terms of the ability to deliver on the project, using the criteria that Robert states. If anybody indicates that you, or the board, or the officers of the board won't talk to them, can you confirm that you are willing to talk to them if they come up with viable proposals? I liked Joe's comments you know but I was one of those people who stood there and supported the Kings dock and felt stupid afterwards when a certain local authority that shall remain nameless, let this football club down over that development. Shouts of 'we couldn't come up with the money' Tom:.....?...]proposals, that there is an open door to them, but they've got to come up with them because they haven't come up with anything yet. B.K: What I am saying is, I think Warren and I have become, I think friends over the past few years and he knows the door is open. I thought Joe did a terrific speech and I support dialogue with you, Joe and hopefully you and warren can get together. Again, if there is a viable proposal to Everton Football Club, it will be listened to. Right at this moment, there is a viable proposal from Kirkby and from Tesco. They've been terrific partners, I'm loyal to them and I'll follow that partnership through. That is not to say that I will not listen to other proposals because I will. Tom: There's been an awful lot of speeches rather than questions so I'm going to take the opportunity, as a shareholder, to make a comment. I happen to believe that this football club currently faces an almost unique experience in the 50 years that I've been supporting this club. That is because our friends across the park have had a major setback, not only in the development of their stadium but in terms of their whole funding mix. I'd like to see this club move forward and if moving forward means getting an outstanding stadium in the Merseyside area, in the area that I was moved to from where I lived in Kirkdale, into a Liverpool council estate in what is now Kirkby. I certainly have no objection to it. I see the opportunity, and a unique opportunity with our friends across the park facing a distinctive set of major problems. This gives us the chance to jump over them, to jump ahead of them [laughter.....?....] The people I want to beat most are over the park and I think the Kirkby development, or a similar development with comparable funding?....? Quality, with the funding can do that. If we turn our back on Kirkby now, with no alternative, then you can say goodbye to the best

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chance we've had in the last 20 years, to overtake Liverpool as the premier club, not only in the city but in the whole of England. Mark Denny: I'm a supporter first and a shareholder second. Couple of points I want to make, or turn into questions if you want. It's to do with transport and I work in transport. With regards to Kirkby stadium, when Keith Wyness tried to sell this stadium in Kirkby, he talked about corridors of new fans coming from basically untapped sources. I don't know where he thought he was talking about, Lancashire is already full of Manchester fans, Liverpool fans, Everton fans. They're already there, they already come to Goodison. The fact is, these untapped people. I've just been told that the train coming from Bolton or Wigan will be under used and won't have the ability to come in with more fans so how are they going to get there for a start off? No trains go, after 7 o'clock from Kirkby to Wigan. These people go to Lime St. now, night games they will have to go back to Lime St. unless Merseytravel invest millions, and I mean millions of pounds, and Greater Manchester transport, into funding transport to Kirkby. They will not do it, for once or twice a week. You know that, everyone knows that. Another thing, when you talk about increased income for the manager. We all want that, I've spoke to David many times, and recently, and we all want the same thing. We want money for David to build a team what we are proud of. You talk about £10, £11m Robert, extra income. When we talk about [...?...] and you hope to raise it by this, by that, by the other. What if it's all debt? Debt's got to be paid back whatever way you look at it. £10m on top of our existing debts, on top of our increasing wage bill, that £10m doesn't half get smaller. Someone mentioned about shops around the stadium. We know what's going on there; we'll not get any extra income from them, that's all. That's what Tesco want to do, they want people in that area to spend for them, not for Everton. We all know Tesco are only interested in Tesco, they're not interested in Everton. They're a big business, it doesn't matter who the chairman is. We really need to re-look at Goodison and I've seen your spin, it's basically regurgitated spin from what we had off Peter Johnson basically. It's just moved on a little bit. You've got pretty graphs instead of drawings on a chalkboard like what Peter used to do. Do you all remember them? The fact is, Goodison can be rebuilt. Yes it will cost, yes it will take time but at the end of the day we're Everton, we're not Arsenal, we're not Manchester United, we're not Liverpool. We want to do as well as them on the pitch but at the end of the day, they're in Mars and we're on Earth. B.K: In response to that, which wasn't a question, in response to that Mark, you know I agree with your view. The truth is, every single year it becomes more and more difficult. Every year to find the money, becomes more and more impossible. A new stadium or a redeveloped Goodison that is worth something is an asset on a balance sheet. I presume people look at that, I presume that will make us more attractive. All I know is, and this is for all of you to hear, it is impossible to continue in the financial way we are doing at the moment. Last year, as you know, we spent 23, £24m and I explained it to you, painstakingly, at the last AGM. I went through it bit by bit. I said to you what you could get [...?...] PFA levy, agents fees. So this year, we got that in from the sale of a few players, we got back in, I think, £10m. So we overspent by 13, £14m. We done well, we made a profit thanks to this man [Moyes], that's all thanks to this man. And I have to say, thanks to the staff at Goodison who I do say, run a good ship and it's getting better all the time. That brought us in a profit, I don't know how much but it's an okay profit to us. It's a profit that we can go to the bank and say, look, we made 4 or £5m. But it still leaves us with an 8, 9, £10m deficit. I'm not clutching at figures, I don't know what the final figures are but it leaves us with a deficit to add on to last year’s deficit of 8, 9, or £10m. If you remember Joe Beardwood, a shareholder and a fan who I admire, brings the figures to you every year. He says, all we're doing is adding to the debt. True. Adding to the debt because of a board that guarantees more. We will have to guarantee some more this year because we've spent again. Next year, next January David will want more players. Next year he will want more players and I will be there wanting to support him. He and I talk about this, 5, 6, 7, 8 times a day. It can't be done any more with this situation. I don't know how better I can serve you other than with the relationship I've got with the bank, with the relationship the board's got with the bank and continually going and saying, we need more. You know what, we were 5th, I think we can get to 4th but to get to 4th

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Someone in audience: Sign your contract David, that's how you can help B.K: But to get to 4th, we need more money. Bank, will you lend us more money. We know what's going on at the moment in the world, the banks are tighter than they've ever been. Our bank's fantastic to us. All I can tell you, with absolute, genuine honesty, I don't know what to do anymore other than to get more money Shout from audience, sell it then. B.K: Sell it. You're right. If I can sell it, it will be sold tomorrow, the next day or the next day. There's a man called Keith Harris who I'm sure you all know, he did the Randy Lerner deal, hes done most of the big deals in the last few years. He's out there looking for me, John's been out there looking for the last ten months. We are out there with an open door policy. Everyone knows this football club needs investment. I don't know what more I can do to serve you, to serve the football club and to get you the success that you deserve. Shout from audience: The planning application said the club is not for sale. Andy: Just to go back the Goodison part of the presentation. Am I right in saying that that was commissioned 5 or 6 weeks ago, what we saw, Robert? Robert: It wasn't commissioned 5 or 6 weeks ago, it's really a refresh of a lot of existing work that's been going on at Goodison. Andy: I think I'm right in saying Mr. Chairman, there was a discussion last year about a plan B and towards the end of the AGM you came to the conclusion that plan B would need to be Goodison. I think I'm right in saying that at the end of that meeting you instructed Mr. Wyness to go away and start looking at a potential plan B. Is what we've seen today the outcome of that or is there more that was done in that process? David (KSS): We first looked at the redevelopment opportunities at Goodison about two years ago. We've been refreshing those over the last 3 or 4 months while looking at various other options. I've also looked at a number of presentations that have been submitted to the club, many of which are well intentioned but are completely not possible, they're not viable. They are totally unrealistic. So what we have produced in the last 3 or 4 months is really a rationalisation of the last 2 years of work. Andy: So that reference to a 5 week time scale, that wasn't relevant to Mr. Wyness' departure, a new look taking place... David: It was put together for this presentation. Andy: So it was written once the EGM was in place. In terms of what we were shown there, there was the high level figures, there is the high level of loss with that part of the ground, loss of income. Is there more detail behind that can be given about that to the shareholders? Robert: I'm not sure why [...?...] make it available. There was considerable detail behind that. It was our finance team that looked at the likely costs of renting a stadium, potential gates and that's when they came up with the losses and costs of moving away and we looked at the incremental revenue in a reasonably diligent way. We are confident that those numbers are broadly accurate. Andy : So there wouldn't be anything made available should the shareholders want to look at it in more detail? Robert: I think there’s commercial sensitivities. Absolutely, why would we disclose what our future ticket pricing strategy is going to be? We can't do that.

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Andy: Okay, maybe not on the income side but in terms of capital expenditure, the phasing implications and all that sort of stuff. I only say because, over the years there's been 3 or 4 other options at Goodison been talked about and there's still the information on the Internet. I think it's quite interesting to compare what you come to now and to where you've sometimes been in years gone by. Same as the phasing, how that will work? David: I made it clear to the board that I was happy to sit down with Tom Hughes and Trevor Skempton and one or two others if they want to sit down and see what we've done and see the reasons why, to debate that. I'm happy to debate any ideas. I've been doing this for 25 yrs around the world, designing and devising stadium. I know what I'm talking about. There are 2 other major sports architects who've looked at this site, both have come to the same conclusion. If someone's got a great idea, great, I'll listen to it but I can tell you now, I don't think there's one out there. Andy: Just to pick up on my last question, in terms of where the Kirkby stadium will sit.…….quality. David: It would be a good quality stadium. Andy: Is there a stadium you could.….compare. David: I worked on the City of Manchester stadium and that cost less than this stadium will cost. Andy: In terms of what it delivers? David: It's a very good spectator experience. As it is now, it will be a very good stadium. Ian: Can I ask the lady a couple of questions on public transport please? On a Sunday, the train service to Kirkby is every half hour. Last year, on 6 occasions, network rail, without asking anyone’s permission, closed the line to put in engineering work. What happens then, if I want to get to Goodison? Kara: I can't talk on behalf of Network Rail but I would assume that they would plan their engineering works around the football fixtures. Ian: They won't. They'll put a replacement bus on and it's a 70-seater bus to serve a 300 and odd seat train. Kara: I can't answer on behalf of Network Rail. Ian: So I can't go and watch Everton in Kirkby then? Kara: I'm not going to answer a question about Network Rail. It's beyond my control. Ian: You did the public transport plans. Kara: Sure, but that's a Network Rail decision and I'm sure Network Rail will work with the club... Ian: Haven't you asked them that question then, in your detailed study? Right, second question. If Everton are in the second leg of a cup or European game and it goes to penalties like Fiorentina and I get out about 10.40pm. I live in New Brighton, how am I going to get home? Wag in audience - 'Swim'

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Kara: Can I just say one thing? Rail problems exist with any football stadium and they deal with it with contingency planning and alternative transport. If you are travelling by coach... Ian: Can you answer my question please? Kara: It depends which mode you're travelling by. If you're driving... Ian: I want to get home by train. I'll be 67, 68 then. I won't be able to run down to the station to get the first train. So I'll be waiting an hour. So if I get on a train at 11.40, which gets me into Liverpool at midnight, that last train to New Brighton has gone. Kara: I'm sure Network Rail would put contingency plans in place.... B.K: Can I just say, I think some of the transport problems have been expertly asked tonight and what I think we should do is, I think we should have a open door policy for a fans committee to come and sit with our advisors and see if we can come up with any answers. Michael: I wasn't going to say anything. 50,000 was mentioned, then I heard the words 60,000. 6 quick questions and 6 quick answers will do. Perhaps Robert can... Last Saturday, 3pm KO, not on TV, what was the attendance? 34,000. Can people on Merseyside now watch live TV game in pubs, illegally or legally or indeed watch them live on the internet? Robert: Absolutely, illegally. Michael: Don't you think that puts some people off, Sundays and Monday evenings, attending games? Robert: Yes. Will ticket prices at Kirkby be cheaper than at Goodison Park? Robert: That's a sensitive question. Michael: Has any research been done by our consultants into the employment and unemployment levels in the City of Liverpool and Merseyside? Going beyond, I hasten to add, the official statistics, which are very poor and patchy these days. Robert: Not that I'm aware of. Michael: Could I make a request for the consultants to do so? With particular emphasis on youth unemployment levels and the number of people under 25 in jobs. Robert: Michael, are you asking are we going to fill Kirkby? Michael: This isn't the Home Counties. Does the board believe that given the change in the economy, technology, the number of people living in Merseyside attending games at Everton FC, or even Liverpool Football Club, will be as high in 20 years time. B.K: My crystal ball doesn't extend that far. Michael: My point is, I think we're going to struggle, even with the best of luck, I think we're going to be struggling to fill 40,000, never mind 50,000 and especially if we move to Kirkby.

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Robert: Michael, are we a big club? Are we an ambitious club? Are we a club that has half a million users to it's website every month? Are we nearly full every week at Goodison when you take out obstructed view seats? We are ambitious, we are a big club and we fill 50,000. Michael: Robert, don't get me wrong. We are the greatest club as far as I'm concerned but there is a change in technology. You've said yourself, people watching on the Internet. Mark: Thank you Mr. Chairman: The resolution that we'd like to propose at the meeting tonight is: In the best interests of Everton Football Club, the shareholders of the company request that the board extricate the club from the exclusivity agreement with Tesco followed by the immediate withdrawal from the destination Kirkby scheme and forthwith, commence negotiations with Liverpool City Council to ensure that the club can redevelop Goodison Park or relocate to a central location of the clubs choice within the City of Liverpool. After a several hour delay the club’s solicitor announced the result of the poll taken from the 700 people present, 622 in favour of the resolution, 26,553 against. The club’s solicitor declined to announce the individual votes for and against on the night.

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KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 38

Kenwright’s Billionaire Wish by Scott McLeod | Wednesday 3 September 2008, 21:12

Everton Chairman Bill Kenwright believes the buy-out at Manchester City will have a significant impact on the Premier League. The Chairman, talking at Wednesday night's EGM at Goodison Park, conceded that the massive investment made at Eastlands by the Abu Dhabi United Group and which led to the deadline beating British record purchase of Robinho from Real Madrid will make life harder for the likes of Everton. He also asserted he is more active than ever in his search for major investment to support the manager's ambitions - and that he would be willing to sell the Club to the right investor. Kenwright said: “This summer has been the worst summer I have ever known in the transfer window and it is going to get worse and worse and worse. “The Arab group buying Manchester City is going to make things worse for clubs like Everton. “I am a pauper when it comes to other chairmen, I borrow and I balance balls in the air every year to support this man (Moyes). "If I can find somebody who can bring that level of investment I would sell it tomorrow. The Club has been for sale since the day I arrived. We have people out there looking for more investment because everybody knows this Club needs investment and that's what we're looking for. "I would like the Club to have a billionaire who could support David Moyes with more money. I don't want to be standing here in a year's time saying its been another tough summer. I want to have everything you want, be it a Russian, an American or a Sheikh. Then I would stand down and give you that because I want David Moyes to have the money. I want you all to have a billionaire - it's not me and I apologise its not me."

http://www.evertonfc.com/news/archive/kenwright-story.html

Everton pledge to fight on for Kirkby stadium, Sep 4 2008 By David Bartlett, Liverpool Daily Post

EVERTON FC last night said it remains committed to relocating to Kirkby and will fight a public inquiry called into the scheme by the Government. Chairman Bill Kenwright also told an extraordinary general meeting (EGM) at Goodison Park, called by angry shareholders to demand a withdrawal from the plan, that he was looking for a billionaire to take over the club. "I am a pauper when it comes to other chairmen. I cannot go on like this, we need a new owner and we will continue to try to find one," said Kenwright, who endured a barrage of criticism. He said he had asked Keith Harris, a "Mr Fix it" of the football world, to try to find a buyer for the club which he would "sell tomorrow" to the right bidder. Despite insisting the proposed move to Kirkby alongside a Tesco supermarket would continue, Kenwright said his door remained open if Liverpool City Council could come up with a viable alternative. Last night council leader Warren Bradley said he would continue to try to find solutions but claimed former chief executive Keith Wyness had always dismissed the local authority’s suggested options. Everton’s plans to move to Kirkby with Tesco in a £400m development were cast into doubt when the government decided to call a public inquiry because of the large retail element. Last night was the first time the club had made public its intention to press ahead with the scheme which will be delayed by up to a year by the inquiry, which will start in November.

http://icliverpool.icnetwork.co.uk/0400evertonfc/0150kingsdock/tm_headline=everton-pledge-tofight-on-for-kirkby-stadium%26method=full%26objectid=21672821%26siteid=50061name_page.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 39

Everton sale if stadium gets go ahead Blues in crisis as tycoons clash over club's future Nick Mathiason , The Observer, Sunday 3 August 2008 Everton, the Premier League football club, could be put up for sale if the government approves its new 50,000-capacity stadium in Kirkby. A decision is expected within days. It is understood that tycoons from India, Russia and America will swoop for the club if the green light is given to the £400m stadium project on the outskirts of Liverpool. It is thought an offer would not be rejected out of hand by Everton's high-profile board, which includes theatre impresario Bill Kenwright and Planet Hollywood founder Robert Earl. The two are thought to have disagreements over the future of the club. This is denied by Earl, who is currently holidaying with billionaire tycoon, Philip Green, on his £32m yacht. It is understood that Green also has financial interests in Everton. Green helped Kenwright to buy the club four years ago. He is a lifelong friend of Earl, who owns 24 per cent of the club. It was claimed last week that highly regarded Everton manager David Moyes had to consult Green if he wanted a new player. However, Green denied he was financially linked to the club and downplayed his involvement. He said he gave advice to Kenwright when requested and that he regularly acted for Earl in club matters, as he lives in America and cannot always attend meetings. Moyes is known to be unhappy at the lack of progress in signing new players. Kenwright was forced to put out a statement last Friday to dispel growing anger among fans. A bitter war of words has now broken out between the tycoons running the club and their former chief executive, Keith Wyness, who resigned last Monday. Earl accused Wyness, a former marketing executive at British Airways, of looking for another job on company time. He said he had documents which confirmed this. Wyness has spent part of the summer advising Paul Davidson, the controversial City figure otherwise known as 'The Plumber', who is in the midst of due diligence on the purchase of Real Mallorca, the topflight Spanish club. It is thought Wyness is being lined up to become chief executive of Mallorca if Davidson buys the club in a deal worth over €50m. Wyness refused to comment on his departure but friends said he had done nothing wrong and was helping 'an old mate' while on annual leave. It has been suggested that his departure was linked to Green's influence at Everton. Wyness's departure prompted Green and Earl to sail from Sardinia to Mallorca for a confrontation with their former chief executive. Wyness is expected now to join Davidson at Mallorca if he becomes the first overseas owner of a Spanish football club. The due diligence process is expected to run for another four weeks. Davidson, who was convicted of market abuse by the Financial Services Authority and then had the decision overturned on appeal, will sell some of the club's property assets to fund new players. Davidson beat off former Newcastle United chairman, Freddy Shepherd and an unnamed wealthy Russian. http://www.guardian.co.uk/business/2008/aug/03/everton

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 40

Everton on verge of sale Mihir Bose - BBC sports editor 10 Oct 08, 05:11 PM Everton seem poised to be sold. Bill Kenwright, the Everton chairman, is flying off to meet an overseas buyer today which could see the Merseyside club sold for a total value of about £180m. The deal is said to be at an advanced stage. This would include taking over Everton's debt of about £65m (£25m securitised debt and a £40m overdraft). If the remaining £115m is paid for the club's shares that would represent quite a premium on the club. When Robert Earle paid about £8m for 23% of the club more than two years ago the shares were valued at about £40m.

Since then, the club has selected a site for its new home although the public inquiry means no progress can be made until March 2009. I am told the buyer wanted assurances that there are good prospects of the new home being realised. He also wanted to be assured all the directors wanted to sell. Kenwright, who has been looking for a buyer for the club for sometime, was able to give that. Although there has been speculation that the Indian billionaire Anil Ambani was interested, the buyer is not Ambani or any other Indian. This offer represents the first genuine bid for the club and if the talks progress well the club could change hands quite soon. Indeed the Everton sale may go through earlier than Newcastle's. Seven potential bidders have expressed an interest in Newcastle. None of them have made a bid or even an indicative offer. The seven do not include the the Nigerians or the South African consortium, which received a lot of publicity for their supposed bids which turned out be more in the realm of fantasy than any real interest.

http://www.bbc.co.uk/blogs/thereporters/mihirbose/2008/10/everton_on_verge_of_sale.html

KEIOC/A/3 Proof of Evidence - Mark Grayson

Appendix 41

Club Statement Wednesday 10 September 2008, 10:54 Everton Football Club wishes to announce an amendment to its Articles of Association in relation to the petitioning, by shareholders, for the convening of General Meetings. In future, shareholders wishing to convene such a meeting will be required to garner the support of members representing at least ten per cent of the paid-up capital of the Company (Companies Act 2006). However, if the Club has failed to hold a General Meeting of the Company in the previous 12 months, that figure shall drop to five per cent of the paid-up capital. The Club required – and has now attained – signed copies of the resolution from shareholders holding in excess of 75 per cent of the total voting rights of eligible members. Accordingly, the resolution has been passed, bringing Everton Football Club into line with the vast majority of professional English football clubs. “We held a General Meeting only last week but, as most people were aware, moves were already afoot to petition for a second meeting even before that first one had been staged," said Everton’s Acting CEO, Robert Elstone. “Whilst we are a Club which has always believed in freedom of speech – and which has always both encouraged and enjoyed a healthy and productive working relationship with its shareholders – we have to ensure that the integrity of Everton Football Club is preserved and protected at all times. “It was made clear to us that a section of our shareholders would continue to petition, every few weeks, for General Meetings until they won the right to hold a hand-vote on the future of the Destination Kirkby project – something which the Club insisted at last week’s meeting it was unwilling to consider. “Preparing for, and subsequently staging, a General Meeting is expensive and very, very timeconsuming. Put simply, it distracts us from the day-to-day running of the football club. If we were to be repeatedly found to be washing our dirty laundry in public, the damage to the Club’s reputation would be simply enormous. “By making this change, we are simply putting ourselves in line with our contemporaries." he added. Everton Football Club 10 September 2008

http://www.evertonfc.com/news/archive/30801/club-statement.html

Everton EGM ruling: Grounds to make a point Sep 12 2008 by David Prentice, Liverpool Echo EVERTON are the self-styled People’s Club. But they clearly don’t believe in power to the people. The Blues changed their articles of association this week. That’s a wordy way of saying that 10 per cent of the club’s total shareholding must now move for an EGM, rather than the previous five per cent. It’s legal, it’s hard-nosed, but it’s hardly democratic. “We are simply putting ourselves into line with our contemporaries,” said acting CEO Robert Elstone. Which is fine. But Everton can’t claim to be different any more. The decision to ballot fans on a ground move was a brave one – and still unique. But results revealing 59.27% in favour, 40.73% against showed a sizeable minority were opposed to the idea. Some of those shareholders want the opportunity to re-confirm that opposition. “It was made clear to us that a section of our shareholders would continue to petition, every few weeks, for General Meetings until they won the right to hold a hand vote on the future of the Destination Kirkby project,” added Elstone. Why is a hand vote so unpalatable? These are the customers the Blues hope to entice to a new stadium, so why not let them display their dissatisfaction?

http://www.liverpoolecho.co.uk/everton-fc/everton-fc-columnists/david-prentice-column/2008/09/12/everton-egm-rulinggrounds-to-make-a-point-100252-21804344/