Tullow Oil plc Annual Report 2011 - The Group

Company’s assets in whole or in part in trustees upon suchtrusts for the benefit of shareholders, but no shareholder iscompelled to accept any property in respect of which thereis a liability; Control rights under employee share schemes – theCompany operates a number of employee share schemes.Under some of these arrangements, shares are held bytrustees on behalf of employees. The employees are notentitled to exercise directly any voting or other controlrights. The trustees will generally vote in accordance withemployees’ instructions and abstain where no instructionsare received. Unallocated shares are generally voted at thediscretion of the trustees; and Restrictions on holding securities – there are no restrictionsunder the Company’s Articles of Association or under UKlaw that either restrict the rights of UK residentshareholders to hold shares or limit the rights of nonresidentor foreign shareholders to hold or vote theCompany’s ordinary shares.There are no UK foreign exchange control restrictionson the payment of dividends to US persons on the Company’sordinary shares.Material agreements containing‘change of control’ provisionsThe following significant agreements will, in the event of a‘change of control’ of the Company, be affected as follows: US$3.235 billion senior secured revolving credit facilityagreement between, among others, the Company andcertain subsidiaries of the Company, BNP Paribas, Bank ofScotland plc, The Royal Bank of Scotland plc, StandardChartered Bank, Lloyds TSB Bank plc and Crédit AgricoleCorporate and Investment Bank and the lenders specifiedtherein pursuant to which each lender thereunder maydemand repayment of all outstanding amounts owed by theCompany and certain subsidiaries of the Company to itunder the agreement and any connected finance document,which amount will become immediately due and payableand, in respect of each letter of credit issued under theagreement, full cash cover will be required immediately, inthe event that any person (or group of persons acting inconcert) gains control of the Company; US$100 million junior secured revolving credit facilityagreement between, among others, the Company andcertain subsidiaries of the Company, BNP Paribas, Bank ofScotland plc, The Royal Bank of Scotland plc and Lloyds TSBBank plc and the lenders specified therein pursuant towhich each lender thereunder may demand repayment ofall outstanding amounts owed by the Company and certainsubsidiaries of the Company to it under the agreement andany connected finance document, which amount willbecome immediately due and payable, in the event thatany person (or group of persons acting in concert) gainscontrol of the Company; US$165 million finance contract in respect of a seniorsecured revolving credit facility agreement between, amongothers, the Company and certain subsidiaries of the Companyand International Finance Corporation and the lendersspecified therein pursuant to which each lender thereundermay demand repayment of all outstanding amounts owed bythe Company and certain subsidiaries of the Company to itunder the agreement and any connected finance document,which amount will become immediately due and payable, inthe event that any person (or group of persons acting inconcert) gains control of the Company; and US$500 million secured revolving credit facility agreementbetween, among others, the Company and certain subsidiariesof the Company, BNP Paribas, Credit Agricole Corporate andInvestment Bank, Standard Chartered Bank and HSBC Bankplc and the lenders specified therein pursuant to which eachlender thereunder may demand repayment of all outstandingamounts owed by the Company and certain subsidiaries of theCompany to it under the agreement and any connected financedocument, which amount will become immediately due andpayable, in the event that any person (or group of personsacting in concert) gains control of the Company.Under the terms of each of these agreements, a ‘change ofcontrol’ occurs if any person, or group of persons acting inconcert (as defined in the City Code on Takeovers and Mergers)gains control of the Company.Contractual or other arrangementsThe Group does not have any contractual or otherarrangements that are essential to the business of the Groupas described by section 417 (5)(c) of the Companies Act 2006.DirectorsThe biographical details of the Directors of the Companyat the date of this report are given on pages 81 to 83.Details of Directors’ service agreements and letters ofappointment are set out on page 95. Details of the Directors’interests in the ordinary shares of the Company and inthe Group’s long-term incentive and other share optionschemes are set out on pages 97 to 99 in the Directors’remuneration report.Directors’ indemnities and insurance coverAs at the date of this report, indemnities are in force underwhich the Company has agreed to indemnify the Directors, tothe extent permitted by the Companies Act 2006, against claimsfrom third parties in respect of certain liabilities arising out of,or in connection with, the execution of their powers, duties andresponsibilities as Directors of the Company or any of itssubsidiaries. The Directors are also indemnified against thecost of defending a criminal prosecution or a claim by theCompany, its subsidiaries or a regulator provided that where thedefence is unsuccessful the Director must repay those defencecosts. The Company also maintains Directors’ and Officers’Liability insurance cover, the level of which is reviewed annually.4CORPORATE GOVERNANCE107www.tullowoil.com