Peachtree 2013 Annual Report Download - page 74

the next Annual General Meeting and is then eligible for election by the
shareholders. The Board may from time to time appoint one or more
directors to hold employment or executive office for such period (subject
to the Companies Act 2006) and on such terms as they may determine
and may revoke or terminate any such appointment.
Under the articles of association, at every Annual General Meeting of
the Company, every director shall retire from office (but shall be eligible
for election or re-election by the shareholders). The Company may
by special resolution (or by ordinary resolution of which special notice
has been given) remove and the Board, by unanimous decision, may
remove any director before the expiration of his or her term of office.
The office of director shall be vacated if: (i) he or she resigns; (ii) he or
she has become physically or mentally incapable of acting as a director
and may remain so for more than three months, or by reason of his or
her mental health a court has made an order that prevents the director
from acting and, in either case, the Board resolves that his or her office
is vacated; (iii) he or she is absent without permission of the Board
from meetings of the Board for six consecutive months and the Board
resolves that his or her office is vacated; (iv) he or she becomes bankrupt
or makes an arrangement or composition with his or her creditors
generally; (v) he or she is prohibited by law from being a director; or (vi)
he or she is removed from office pursuant to the articles of association.
Powers of the directors
The business of the Company will be managed by the Board who may
exercise all the powers of the Company, subject to the provisions of the
Company’s articles of association, the Companies Act 2006 and any
ordinary resolution of the Company.
Shares held in the Employee Benefit Trust
The trustee of The Sage Group plc Employee Benefit Trust (“EBT”) has
agreed not to vote any shares held in the EBT at any general meeting.
If any offer is made to shareholders to acquire their shares the trustee
will not be obliged to accept or reject the offer in respect of any shares
which are at that time subject to subsisting awards, but will have regard
to the interests of the award holders and will have power to consult
them to obtain their views on the offer. Subject to the above the trustee
may take the action with respect to the offer it thinks fair.
Significant agreements
The following significant agreements contain provisions entitling the
counterparties to exercise termination or other rights in the event of
a change of control of the Company:
Under a dual tranche US$271,000,000 and €214,000,000 five-year
multi-currency revolving credit facility agreement dated 24 August 2010
between, amongst others, the Company and Lloyds Banking Group plc
(as facility agent), on a change of control, if any individual lender so
requires and after having consulted with the Company in good faith for
not less than 30 days following the change of control, the facility agent
shall, by not less than 10 business days’ notice to the Company, cancel
the commitment of that lender and declare the participation of that lender
in all outstanding loans, together with accrued interest and all other
amounts accrued under the finance documents, immediately due and
payable, whereupon the commitment of that lender will be cancelled and
all such outstanding amounts will become immediately due and payable.
Under a note purchase agreement dated 11 March 2010 relating
to US$200,000,000 senior notes, Series A, due 11 March 2015,
US$50,000,000 senior notes, Series B, due 11 March 2016 and
US$50,000,000 senior notes, Series C, due 11 March 2017 between
the Company and the note holders, on a change of control, the Company
will not take any action that consummates or finalises a change of control
unless at least 15 business days prior to such action it shall have given
to each holder of notes written notice containing and constituting an
offer to prepay all notes on a date specified in such offer which shall be
a business day occurring subsequent to the effective date of the change
of control which is not less than 30 days or more than 60 days after the
date of the notice of prepayments. Where a holder of notes accepts the
offer to prepay, the prepayment shall be 100% of the principal amount
of the notes together with accrued and unpaid interest thereon and shall
be made on the proposed prepayment date. No prepayment under a
change of control shall include any premium of any kind.
Under a note purchase agreement dated 20 May 2013 relating
to US$50,000,000 senior notes, Series D, due 20 May 2018,
US$150,000,000 senior notes, Series E, due 20 May 2020,
US$150,000,000 senior notes, Series F, due 20 May 2023 and
US$50,000,000 senior notes, Series G, due 20 May 2025 between
Sage Treasury Company Limited and the note holders and guaranteed
by the Company, on a change of control of the Company, the Company
will not take any action that consummates or finalises a change of control
unless at least 15 business days prior to such action it shall have given
to each holder of notes written notice containing and constituting an
offer to prepay all notes on a date specified in such offer which shall be
a business day occurring subsequent to the effective date of the change
of control which is not less than 30 days or more than 60 days after
the date of the notice of prepayments. Where a holder of notes accepts
the offer to prepay, the prepayment shall be 100% of the principal amount
of the notes together with accrued and unpaid interest thereon and shall
be made on the proposed prepayment date. No prepayment under a
change of control shall include any premium of any kind.
Under the terms of all three agreements, a “change of control” occurs
if any person or group of persons acting in concert gains control of
the Company.
Greenhouse gas emissions
All disclosures concerning the Group’s greenhouse gas emissions
(as required to be disclosed under the Companies Act 2006 (Strategic
Report and Directors’ Report) Regulations 2013 are contained in the
Corporate responsibility report forming part of the Strategic report on
pages 52 to 56.
Financial risk management
The Group’s exposure to and management of capital, liquidity, credit,
interest rate and foreign currency risk are summarised below.
Capital risk
The Group’s objectives when managing capital (defined as net debt
plus equity) are to safeguard our ability to continue as a going concern
in order to provide returns to shareholders and benefits for other
stakeholders, while optimising return to shareholders through an
appropriate balance of debt and equity funding. The Group manages
its capital structure and makes adjustments to it with respect
to changes in economic conditions and our strategic objectives.
The Group has set a long-term minimum leverage target of 1x net debt
to EBITDA and will work to maintain this going forward. Further detail
is provided in the Strategic report on page 25.
Liquidity risk
The Group manages its exposure to liquidity risk by reviewing the cash
resources required to meet its business objectives through both short
and long-term cash flow forecasts. The Company has committed
facilities which are available to be drawn for general corporate purposes
including working capital. The Company’s Treasury function has a policy
of optimising the level of cash in the businesses in order to minimise
external borrowings.
Directors’ report continued
72 The Sage Group plc | Annual Report & Accounts 2013