Feedback Regulatory News (FDBK)

5 Jun 2007 07:02

Feedback PLC05 June 2007 Feedback plc Proposed CVA, Proposed Share Capital Reorganisation, Proposed Cancellation ofShare Premium Account and Reduction of Capital, Proposed increase in authorities to issue and allot New Ordinary Shares Placing of 46,666,667 New Ordinary Shares Highlights • The Group is proposing to enter into a CVA which will enable the Companies to, inter alia, compromise a loan owed to a former director and its Pension Scheme Liabilities which have a deficit on an FRS17 basis of £8.08 million, as at 28 February 2007 • Feedback to pay, in aggregate, £1.2 million to the Pension Scheme and allocate 14,846,411 New Ordinary Shares, representing 18 per cent. of the Enlarged Issued Share Capital to the Trustees of the Pension Scheme • Charles Stanley Securities has, on behalf of the Company, placed 46,666,667 New Ordinary Shares at 3 pence, with institutional and other investors, to raise £1.4 million, before expenses • The restructuring of the Group and its operations continues • The Group's current order book is at an encouraging level • The Group's year end is being changed to 31 May and the audited results for the 14 months to 31 May 2007 are expected to be released in September 5 June 2007 Enquiries: David Sawyer 01892 653322Chief ExecutiveFeedback plc Philip DaviesCharles Stanley Securities 020 7149 6457 Introduction The Board is pleased to announce that Feedback, FDL and FIL are proposing toenter into Company Voluntary Arrangements with their creditors which, providedthe terms and conditions are completed, will enable the Companies to compromise,inter alia, the Former Director's Loan and its Pension Scheme liabilities, whichhave a deficit, as at 28 February 2007, of £8.08 million. The Company has also announced the Placing, via Charles Stanley Securities toraise £1.4 million, in order to enable the Company to satisfy one of theconditions of the CVA. The Company is today posting the Circular to Shareholders regarding theProposals. In order for the Placing to be completed, the share capital of the Company willneed to be substantially restructured. The restructuring will require theExtraordinary General Meeting as well as a separate meeting of Shareholders, tobe held and for the various Resolutions to be passed. These meetings will be inaddition to the CVA Shareholders' Meeting to be held prior to the EGM on the 2July 2007, which is purely to consider and vote on the CVA. The Proposals require, inter alia, the approval of the creditors of the Companyand the Shareholders. In the opinion of the Directors the Proposals are the bestoption for the Group. The Board therefore unanimously and strongly recommendsthat the Shareholders vote in favour of the Resolutions to approve all of theProposals. Approval of the resolutions to be proposed at the EGM and the Ordinary ClassMeeting is essential if the Proposals are to succeed. The Directors considerthe Proposals are the only viable option for the Group and provide benefit forall stakeholders. If the Proposals are not approved by both the Shareholdersand the creditors of the Company, the Directors will need to take alternativeaction to address the financial position of the Group. This is likely torequire the Group to enter into different insolvency procedures that will belikely to result in a total loss for Shareholders. Accordingly, the Directors, who have been so advised by Charles Stanley,consider the Proposals described above to be in the best interests of theCompany and its Shareholders as a whole. If approved, they will give theDirectors the opportunity to pursue strategic business initiatives designed tocreate profitable operations and give value to the Company's shares. Therefore, the Board unanimously and strongly recommends that Shareholders votein favour of the resolutions to be proposed at the CVA Shareholders' Meeting,the EGM and the Ordinary Class Meeting as they intend to do in respect of theirown beneficial holdings of the Company's existing Ordinary Shares. Background to the Proposals and related Resolutions Feedback historically operated a defined benefit, or final salary, pensionscheme for its employees. As a result of changes in, inter alia, actuarialassumptions and life expectancy, the Pension Scheme was closed to new memberswith effect from April 2004 and to future benefits accrual for existing membersin August 2004. The Directors had also concluded that the Group would have difficulty in meetingthe anticipated ongoing contributions to the Pension Scheme. This reflected thethen financial performance of the Group. In recent years, steps have been taken by the Directors to restructure theGroup's operations primarily to improve profitability and to provide a morestable financial position. Whilst this restructuring, which is ongoing, hasshown positive benefits, the Board has not seen an improvement in the Company'sfinancial performance which would allow the contributions to the Pension Scheme,referred to in more detail below, to be funded from ongoing profitability. In the interim results of the Group for the period to 30 September 2006, whichwere published on 19 December 2006, the Group was required to show the financialposition under the Pension Scheme, in accordance with the requirements ofAccounting Standard FRS 17 - Retirement Benefits. Accordingly, the balance sheetdisclosed that the deficit under the Pension Scheme, as at 30 September 2006,amounted to £8.26 million. As at 28 February 2007, the deficit stands at £8.08million on the same basis. The provisional results of an actuarial valuation, as at 31 March 2006, show adeficit £17.07 million on a buy out basis. The Directors have been advised thatfunding this deficit would require annual contributions of approximately £1.3million, increasing in line with inflation, over a period of 10 years. Inaddition, a levy due to the PPF of around £120,000 per annum will be payablefrom 2007/08. Financial projections produced by the Directors, and reviewed by the Company'sadvisors, demonstrated that the Company could not generate sufficient funds tosupport this level of annual contributions. The Directors therefore helddiscussions with the Trustees, the PPF and the Pensions Regulator. As a consequence, subject to the Pension Scheme being eligible for PPF entry,the PPF has agreed to the terms of the CVA which will result in the Company'sliabilities to the Pension Scheme being compromised, subject to the approval ofthe CVA by the creditors of the Company and the Shareholders. It should benoted that the Pension Scheme's eligibility for entry into the PPF, and theexpectation that the PPF's powers will become exercisable, has been assumed forthe rest of this announcement. Agreement with the PPF As one of the conditions of the Settlement Agreement, the Company is required topay the net sum of £1.2 million in cash to the Pension Scheme and to allocate tothe Trustees of the Pension Scheme such number of New Ordinary Shares as equal18.0 per cent. of the Enlarged Share Capital, each in accordance with the CVA. The Board considers that following approval and subsequent completion of theCVAs, the Company, FDL and FIL will be able to pay, in full, all creditors ofthe Company other than the liabilities currently owed to the Pension Scheme andcertain of the Group's inter-company debts. A US$1 million loan provided by a former director (and significant shareholder)will also be written down by 80 per cent. and the balance will be satisfied bythe Company allotting 3,355,141 New Ordinary Shares, at the Placing Price. The Placing The purpose of the Placing is to raise the necessary money, net of costs, toassist the Company to comply with certain of its obligations pursuant to theSettlement Agreement and to provide working capital for the Company goingforward. The raising of funds, which the Company expects to achieve by the Placing, is acondition of the CVA being completed. Accordingly, the Placing will assist theCompany with restructuring its business and will allow the Directors' businessplan for returning the Group to profitability to continue to be implemented. There are conditions which have to be satisfied before the Placing is completed.These conditions include the passing of all resolutions at the CVA Meetings, thepassing and coming into effect of all the Resolutions to be proposed at the EGMand the Settlement Agreement becoming unconditional in all respects (save as tothe payment of the net sum of £0.7 million by the Company to the Trustees whichwould happen immediately thereafter and the payment of a further £0.5 millionwhich will happen following the completion of the sale of the Company'sCrowborough premises). Charles Stanley has agreed to use its reasonable endeavours to place 46,666,667New Ordinary Shares on behalf of the Company, representing a total of 56.58 percent. of the total issued share capital of the Company, (following theProposals). The Placing is conditional, inter alia, upon Admission. The Placing is intended to raise approximately £1.4 million, before expenses. Application will be made for the Placing Shares to be admitted to trading on AIMand it is anticipated that Admission will become effective and that dealingswill commence on 3 July 2007. The Placing is not a rights issue or open offer and New Ordinary Shares will notbe offered generally to Shareholders, whether on a pre-emptive basis orotherwise. The Directors believe that the considerable extra cost and delayinvolved in a rights issue or open offer would not be in the best interests ofthe Company in the circumstances. Certain of the Directors of the Company have participated in the Placing. DavidSawyer, Jed Bushell and the wife of John Westcott have agreed to acquire 500,000New Ordinary Shares, 250,000 New Ordinary Shares and 3,333,333 New OrdinaryShares respectively. The participation by Mrs Westcott is regarded as a related party transaction forthe purposes of the AIM Rules. In the opinion of the Directors, havingconsulted with Charles Stanley, the Company's Nominated Adviser, thesubscription by Mrs Westcott is fair and reasonable insofar as Shareholders areconcerned. Strategy to be implemented following completion of the Proposals The Directors have formulated a coherent plan intended to ensure the Group'sfuture growth and profitability once the Pension Schemes liabilities have beenaddressed. In recent years considerable cost reductions have been achieved and willcontinue to be sought together alongside efforts to improve margins and increaseturnover by introducing new products. It is intended that over the coming months all the Group's operations will beconsolidated into a new single site which will help to greatly improvecommunications and efficiency. The Directors believe that the Group's in housemanufacturing capabilities are essential given that the Group's extensiveproduct range is generally of a very specialised nature and volume sales ofindividual products can be small. In addition, demand, which is frequentlydependent upon the funding of large overseas aid projects, can be variable. It is imperative that the Group competes internationally in terms of cost andtherefore to improve competitiveness 'lean' techniques are being introduced tomanufacturing and other departments across the company. The Directors believethat these techniques will help reduce cost and waste whilst improving qualityand design by involving all employees in the supply process. The Group will also be installing an ERP system based on the Microsoft DynamicsNAV solution. Once fully implemented this will provide the reliable and timelymanagement information which will prove fundamental to the company's futuresuccess. The Directors also intend to focus efforts to improve routes to market and tocontinue to introduce innovative new designs. In addition, attention will befocused on increasing revenues arising from support and maintenance of productsas the Directors consider this to be a superior income stream. To help attract and retain key personnel a flexible benefits package will beintroduced together with ongoing staff training and development. Despite theclose links with universities and colleges throughout the UK it has proveddifficult to locate suitable engineers for development in some of the morespecialist areas. The development team located in Poland has proved a greatsuccess and will be maintained to complement the effort in the UK. The firstjoint venture project is due to be launched in July. The Directors intend to concentrate on efforts to grow the Group's businessorganically although they are of the opinion that opportunities also exist forgrowth via acquisitions, whether of a bolt on nature that should improveturnover without a substantial increase in cost, or in areas that arecomplementary to the existing operations Once the current restructuring is completed, and the improvements above areimplemented, the Directors are confident that the Group has a very successfulfuture. Current Trading Further to the update on trading provided on 1 March 2007, the Board continuesto be pleased with the progress made at each of the Group's subsidiaries and thecurrent order book remains at an encouraging level. There have been recentsigns of an improvement in output following the partial relocation of allmanufacturing facilities to one site. The Group continues to prepare for a move to a new site and although a site hasbeen identified no agreement has yet been finalised in this respect. The Company intends to change its accounting reference date from 31 March to 31May, with effect from the current financial year and therefore the auditedresults for the 14 months ended 31 May 2007 are expected to be published inSeptember. Proposed Company Voluntary Arrangements Copies of the CVA Proposals and the Nominee's Report are being sent toShareholders, together with a notice of the CVA Shareholders' Meeting, andassociated form of proxy, at which the CVA Proposals will be considered andvoted upon by Shareholders. Copies of the CVA Proposal and the Nominee's Report are being lodged with theHigh Court of Justice in accordance with the provisions of the Insolvency Act1986. The lodging of the CVA Proposals and Nominee's Report at the High Court ofJustice constitute a qualifying insolvency event and triggers the PPF'sassessment period under the Pensions Act 2004. At that point the rights andpowers of the Trustees in relation to any debt due to them by the employers areexercisable by the PPF to the exclusion of the Trustees. This includes the rightto vote on the CVA at the CVA Creditors' Meeting. The CVA Proposals will be approved if more than one half of Shareholders presentin person, or by proxy and voting, vote in favour whereupon the CVA will comeinto effect. If the CVA proposal is subsequently approved by the Companiescreditors, but not by Shareholders the Companies' creditors' decision willprevail and stand approved subject to any Shareholder applying to the courtwithin 28 days of the CVA Shareholders' Meeting and successfully challenging theapproval. In order for the CVA to be implemented, the CVA Proposals must be approved by amajority of more than three quarters in value of the creditors present inperson, or by proxy, voting in favour. Many standard agreements have a clause entitling a party to terminate a contractif the other party enters into a CVA. Therefore some of the Group's suppliersand / or customers may have the ability to terminate their contract with theCompany, FDL or FIL as a result of those companies entering into a CVA. The Board strongly and unanimously recommends that Shareholders vote in favourof the CVA Proposals as they believe that this offers the only realistic optionof preserving some value for existing Shareholders, as well as enabling theDirectors' plan for ensuring the long term future of the Group to continue to beimplemented. Arrangements with Tom Charlton In November 2003, Tom Charlton, at that time a non-executive director of theCompany, agreed to provide the Former Director's Loan of US$1 million toFeedback. The US denominated loan was provided on an unsecured basis at aninterest rate of 0.1 per cent per month, accruing on a daily basis. The loanwas originally provided for a term of one year and five months (with repaymentscheduled on 30 April 2005). Mr Charlton agreed to extend the term of the loanfrom 1 May 2005 until 30 September 2009, at a revised rate of interest of 0.575per cent per month, accruing on a daily basis. As at 23 May 2007, the amount ofthe loan stands at US$1 million or £503,271.26, based on a US$:£ exchange rateof 1.987 as at 23 May 2007. Mr Charlton has agreed to accept a write down of the loan to £100,654.25 (beingan 80 per cent. reduction) which will be satisfied by the issue of 3,355,141 NewOrdinary Shares, at the Placing Price, being the Director's Share Issue. In addition to the Director's Share Issue, Mr Charlton has also agreed toparticipate in the placing for 6,666,667 New Ordinary Shares. Following theProposals, Mr Charlton will own 11,400,302 New Ordinary Shares, representing13.82 per cent. of the Company's Enlarged Issued Share Capital. Proposed Share Capital Reorganisation Under the Placing, Charles Stanley has placed 46,666,667 New Ordinary Shares ata price per New Ordinary Share of 3 pence. Under Section 100 of the CompaniesAct, it is only possible to issue shares at a value greater than or equal totheir nominal value. Accordingly, in order for Feedback to issue shares at 3pence per share it is necessary to create shares with a nominal value of 3 penceor less. It is proposed to effect a capital re-organisation of the Ordinary Share capitalby means of a subdivision of the Ordinary Shares. This requires the passing ofcertain resolutions by Shareholders at the EGM and separately the approval ofOrdinary Shareholders at the Ordinary Class Meeting. As at the Record Date,Feedback had 17,611,841 Ordinary Shares in issue. It is proposed to reduce thenominal value of the issued Ordinary Share capital of the Company such that: 1. each of the existing 17,611,841 Ordinary Shares of 10 pence in the capital of the Company would be subdivided into one New Ordinary Share of 0.25 pence and one Deferred Share of 9.75 pence; 2. each of the remaining authorised but unissued Ordinary Shares of 10 pence each will be subdivided into 495,526,360 New Ordinary Shares of 0.25 pence each. Deferred Shares It is intended that the Deferred Shares to be created from the Ordinary Shares,having the rights referred to in resolution 3 to be proposed by the EGM, willeffectively be valueless in the hands of the holders. However, in the Company'sbooks, the capital paid up on the Deferred Shares will represent a capitalreserve of £1,713,520.20. That reserve can be applied for limited purposes.However, with the sanction of a special resolution of shareholders and theconfirmation of the High Court, the reserve may be cancelled and (inter alia)set against the deficit on the Company's profit and loss account, thus reducingthe deficit and bringing forward the time at which the Company may pay dividendsin the future should its profits permit it to do so. Accordingly, it is proposedthat the Deferred Shares will be cancelled. Resolution 3 to be proposed at theEGM is required to enable this. Capital Reduction Subject to the approval of Shareholders at the EGM and the confirmation of theCourt, the Company also intends to cancel the share premium account of theCompany. Under the Act, a company's ability to use its share premium account is verylimited. However, with the consent of the Court and the approval ofShareholders, it is possible for the Company to cancel its share premium accountand apply the sum which results from such cancellation to partially eliminatethe accumulated deficit on the Company's profit and loss account. Although theCompany has no present intention to start paying dividends to Shareholders, theDirectors believe that the cancellation of the share premium account and therelated reduction of the accumulated deficit on the Company's profit and lossaccount will bring forward the time when the Company may be in a position to paydividends and doing so will bring the Company's balance sheet and share capitalmore in line with its available assets. The cancellation of the share premium account also requires the passing of aspecial resolution by Shareholders at the EGM. The last audited balance sheet of the Company is at 31 March 2006. Thisdiscloses that, as at 31 March, there was an amount of £409,900 in the sharepremium account of the Company. The agreement with the PPF referred to above is anticipated to give rise to afurther amount of £408,276 on the share premium account by the allotting of14,846,411 New Ordinary Shares for £0.03 each at a premium of £0.0275 per NewOrdinary Share. The Placing referred to above is anticipated to give rise to the further amountof £1,283,333 on the share premium account by the allotting of 46,666,667 NewOrdinary Shares for £0.03 each at a premium of £0.0275 per New Ordinary Share. The arrangements with Tom Charlton referred to above are anticipated to increasethe value of the share premium account by an additional £92,266 by allotting3,355,141 New Ordinary Shares for £0.03 each at a premium of £0.0275 per NewOrdinary Share. The conversion of Preference Shares gave rise to the further amount of £522,967on the share premium account by: - the voluntary conversion of 405,719 Preference Shares with a nominal paid up value of £543,405 to Ordinary Shares with a value of £271,702.50; and - the compulsory conversion of 365,065 Preference Shares with a nominal paid up value of £502,527.93 to Ordinary Shares with a value of £251,264.50. It is anticipated that the aggregate on the share premium account will be thetotal of £409,900, £408,276, £1,283,333, £92,266 and £522,967 being £2,716,742. Accordingly, the Company is seeking Shareholder approval and the confirmation ofthe Court for the share premium account, anticipated to be £2,716,742 to becancelled. The Court Application The cancellation of the Deferred Shares and cancellation of the Company's sharepremium account will only take effect if sanctioned by the shareholders at theExtraordinary General Meeting and confirmed by the Court and upon theappropriate documents being lodged with the Registrar of Companies. Assuming the passing of the Reduction Resolution, application will be made tothe Court as soon as practicable. The Directors have been advised that, having regard to the circumstances at thedate of this announcement the Court should confirm the Capital Reduction. TheDirectors are not, however, able to guarantee the Court's confirmation of theReduction. The Directors have also been advised that the Court is likely to require thatthe Company give undertakings for the protection of the Company's existingcreditors and in particular that it will require an undertaking by the Companynot to make any distribution until all creditors outstanding at the date thatthe reduction of capital becomes effective consent or are paid or there is inplace replacement share premium or share capital. The Company will give suchfurther undertakings to the Court for the protection of creditors as it may beadvised are appropriate to be given. The application to the Court will be made as soon as practicable after thepassing of the Reduction Resolution and the procedure is expected to becompleted within six to eight weeks. The Company hopes that the hearing of thePetition will take place by the end of August 2007. However, this date issubject to postponement, depending on the Court timetable and the Board cannotguarantee that the hearing will in fact take place on that date. The Court Order confirming the Reduction will then need to be registered atCompanies House and advertised in the National press, which is likely to becompleted two to three weeks after the date of the hearing. Share Capital following completion of the Proposals Immediately following the Proposals becoming unconditional and being completedin accordance with their respective terms and conditions: • the authorised share capital of the Company will be £1,445,016.05 divided into 578,006,420 New Ordinary Shares of 0.25 pence each; and • the issued share capital will comprise 82,480,060 New Ordinary Shares which will be held as follows: Name No. of New Ordinary Shares held % Placees* 50,021,808 60.65Trustees 14,846,411 18.0Existing Ordinary Shareholders 17,611,841 21.35TOTAL 82,480,060 100 \* This includes the New Ordinary Shares being issued to Tom Charlton as detailedin above. Immediately following the Proposals becoming unconditional and completed inaccordance with their respective terms and conditions the interests of theDirectors and their families will be as follows:- Director Beneficial % of Enlarged Non- % of Enlarged Share Capital Share Capital beneficial D. H. Harding Nil - 4,067,461 4.93 D. J. Sawyer 510,000 0.62 Nil - J. H. Westcott 3,674,836 4.46 4,067,461 4.93 G. B. M. Bushell 250,000 0.30 Nil - Share Option Schemes The Directors intend to adopt the Share Option Schemes and a proposal to approvethis will be put to Shareholders at the EGM. In the opinion of the Directors, the ability to make grants of options isessential in the retention, recruitment and incentivisation of the Group'semployees. It is intended that grants of options pursuant to the Share Option Schemes willbe made following the EGM, assuming the Proposals are approved. The Directorsintend to limit the number of options granted pursuant to the Share OptionSchemes to approximately 10 per cent. of the Enlarged Share Capital. Summary of the Placing Agreement The Company has today entered into the Placing Agreement with Charles Stanley.The obligations of Charles Stanley under the Placing Agreement are conditionalupon certain conditions having being fulfilled (or waived), including, interalia, the passing of the Resolutions and Admission. The agreement containscertain representations and warranties by the Company as to the accuracy of theinformation contained in the Circular and other matters relating to the Companyand its business which are usual for an agreement of this nature. The Company has agreed to indemnify Charles Stanley against all losses, costs,charges and expenses which Charles Stanley may suffer or incur as a result ofcarrying out its duties under the Placing Agreement, save to the extent the samearise by virtue of the fraud, negligence or wilful default of Charles Stanley. Charles Stanley has certain rights, at any time prior to Admission, to terminatetheir obligations under the Placing Agreement in certain limited circumstances.Such circumstances include, inter alia, material breach by the Company of theterms of the Placing Agreement or any warranty therein being or becoming untrue,inaccurate or misleading in any material respect. Irrevocable Undertakings The Directors who own or are interested in 4,418,964 Ordinary Shares,representing approximately 25.09 per cent. of the Existing Ordinary Shares, haveirrevocably undertaken to vote in favour of the Resolutions to be proposed atthe EGM and the Ordinary Class Meeting in respect of their total holdings. The Company has also received an irrevocable undertaking to vote in favour ofthe Resolutions from the Westcott Family Trust in respect of 2,991,369 OrdinaryShares, representing approximately 16.98 per cent. of the Existing OrdinaryShares. APPENDIX 1 DEFINITIONS The following words and expressions apply in this announcement unless thecontext requires otherwise: "Act" or "Companies Act" the Companies Act 1985, as amended "Admission" admission of all the New Ordinary Shares to be issued pursuant to the Proposals, expected to be on 3 July 2007 "AIM" the market of that name operated by the London Stock Exchange "AIM Rules" the AIM Rules for companies published by the London Stock Exchange "Capita Registrars" a trading name of Capita IRG plc "Charles Stanley" Charles Stanley Securities, Nominated Adviser and Broker to Feedback and a division of Charles Stanley & Co. Limited, regulated by the FSA "Companies" the Company, Feedback Instruments Limited, Feedback Data Limited, Feedback GmbH and Feedback Incorporated. "CREST" the electronic, paperless transfer and settlement mechanism for equity trades transacted on AIM administered by CRESTCo "CRESTCo" CRESTCo Limited "CVA" or "Company Voluntary the Company Voluntary Arrangements of each of the Company, FILArrangement" and FDL, in its present form containing the proposals, with any modification thereof approved by the directors, which is subject to the approval of the Shareholders and the creditors of the Company "CVA Creditors' Meeting" the meetings of the creditors of each of the Company, FDL and FIL to be held at 10.00 a.m. on 2 July 2007 to consider the CVA "CVA Meetings" the CVA Creditors' Meetings and the CVA Shareholders' Meeting "CVA Proposals" The Companies' directors proposals for a CVA in respect of the Companies filed at the High Court of Justice on • June 2007 "CVA Shareholders' Meeting" a meeting of the Shareholders of the Company to be held at 10.15 a.m. on 2 July 2007 to consider the CVA of the Company "Deferred Shares" deferred shares of 9.75 pence each in the capital of the Company to be created pursuant to the Share Capital Reorganisation and then cancelled pursuant to the Reduction "Directors" or "Board" The directors of the Company "Director's Share Issue" the allotment of shares to Tom Charlton in consideration of the repayment of the Former Director's Loan "Enlarged Share Capital" the issued equity share capital of the Company as enlarged by the Placing, the PPF Allotment and the Director's Share Issue "Existing Shareholder" a holder of Existing Ordinary Shares "Existing Ordinary Shares" the 17,611,841 Ordinary Shares in issue at the date of this announcement "Extraordinary General Meeting" or the extraordinary general meeting of the Company to be held at"EGM" The Spa Hotel, Mount Ephraim, Tunbridge Wells, Kent, TN4 8XJ on 2 July 2007 at 10.30 a.m. and at which the Proposals will be considered and the Resolutions set out in the Notice of EGM will be proposed "Feedback" or the "Company" Feedback PLC "FDL" Feedback Data Limited "FIL" Feedback Instruments Limited "Former Director's Loan" the loan of US$1million granted by Tom Charlton, a former non- executive director of the Company under a document dated 27 November 2003 as amended by a document dated 1 December 2004 "Form(s) of Proxy" the form(s) of the proxy for use by Shareholders in relation to the EGM and the Ordinary Class Meeting "Group" Feedback and its subsidiaries from time to time "London Stock Exchange" London Stock Exchange plc "New Ordinary Shares" the new ordinary shares of 0.25 pence each to be created pursuant to the Share Capital Reorganisation "Nominees" David Crawshaw and Samantha Bewick of KPMG Licensed Insolvency Practitioners, 8 Salisbury Square, London EC4Y 8BB "Notice of EGM" the notice of the Extraordinary General Meeting of the Company set out in the Circular "Ordinary Class Meeting" the separate general meeting of the Ordinary Shareholders to be held at The Spa Hotel, Mount Ephraim, Tunbridge Wells, Kent, TN4 8XJ on 2 July 2007 at 11.00 a.m. (or as soon thereafter as the EGM has concluded or adjourned), at which the Resolutions set out in the notice of class meeting in the Circular "Ordinary Shares" the existing ordinary shares of 10 pence each in the capital of the Company "Pension Scheme" the Feedback Pension Scheme "Pensions Regulator" the Pensions Regulator as defined by the Pensions Act 2004 "Placing" the placing of the Placing Shares at the Placing Price with institutional and other investors by Charles Stanley on behalf of the Company "Placing Agreement" the conditional agreement dated 5 June 2007 between the Company and Charles Stanley in connection with the proposed Placing "Placing Price" 3 pence per share "Placing Shares" the 46,666,667 new Ordinary Shares which are to be allotted and issued pursuant to the Placing Agreement "PPF" Pension Protection Fund "PPF Allotment" the allotment of shares to the PPF for 14,846,411 New Ordinary Shares at 3 pence per share pursuant to the Settlement Agreement "Preference Shares" the 10 per cent (net) convertible redeemable cumulative preference shares of £1 each formerly in the capital of the Company "Proposals" together, the terms and conditions of the CVA, the Placing, the PPF Allotment, the Director's Share Issue, the Share Capital Reorganisation and the Reduction or each of them, as the context may require "Record Date" close of business on 1 June 2007 "Reduction" The proposed cancelling of the share premium account of the Company and of the Deferred Shares "Reduction Resolution" the proposed resolution to approve the Reduction "Resolutions" the resolutions variously set out in the Notice of EGM and the notice of the Ordinary Class Meeting in the Circular Settlement Agreement the terms of settlement agreed between the Companies and the PPF/Trustees, as detailed in the terms and conditions of the CVA, subject always to the PPF's powers becoming exercisable by the filing of the CVA documents at Court "Share Capital Reorganisation" the proposed share capital reorganisation in Feedback involving the Ordinary Shares "Shareholders" holders of issued Ordinary Shares on the Record Date "Share Option Schemes" the Enterprise Management Incentives Scheme and the Share Incentive Plan "Trustees" Capital Cranfied Pension Trustees Limited, the trustees of the Pension Scheme APPENDIX 2 EXPECTED TIMETABLE OF EVENTS Record Date 1 June 2007 Latest time for receipt of Forms of Proxy for the EGM 30 June 2007 no later than 48 hours prior to the meeting Latest time for receipt of Forms of Proxy for the Ordinary 30 June 2007 no later thanClass Meeting 48 hours prior to the meeting CVA Creditors' Meeting to be held 10 a.m. on 2 July 2007 CVA Shareholders' Meeting to be held * 10.15 a.m. on 2 July 2007 Extraordinary General Meeting * 10.30 a.m. on 2 July 2007 Ordinary Class Meeting * 11.00 a.m. on 2 July 2007 Commencement of dealings in New Ordinary Shares on AIM 8.00 a.m. on 3 July 2007 Court hearing of petition to confirm the Reduction + August 2007 Date when the Reduction becomes effective + September 2007 Notes: (1) * Or as soon thereafter as the previous meeting is concluded oradjourned. (2) +No specific dates have yet been agreed with the Court and there thesedates are indicative only and are subject to postponement according to the Courttimetable and cannot be guaranteed (3) The dates set out in the Expected Timetable of Events above andmentioned throughout this announcement may be adjusted by the Company. In whichevent, details of the new dates will be notified to AIM and, where appropriate,to the Shareholders. This information is provided by RNS The company news service from the London Stock Exchange