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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

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Form 6-K

 

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REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of April, 2015

Commission File Number: 1-32575

 

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Royal Dutch Shell plc

(Translation of registrant’s name into English)

 

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30, Carel van Bylandtlaan, 2596 HR The Hague

The Netherlands

(Address of principal executive offices)

 

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Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒  Form 40-F ☐ 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐ 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐ 

 

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Royal Dutch Shell plc (the “Registrant”) is furnishing the following exhibits related to its recently announced cash and share offer for BG Group plc on this Report on Form 6-K, each of which is hereby incorporated by reference to the extent indicated below:

 

Exhibit 99.1, excluding Schedule 2 thereto, and Exhibit 99.2, excluding the following pages and sections thereof:

are incorporated by reference into the Registration Statement on Form F-3 of Royal Dutch Shell plc (Registration Number 333-199736) and the Registration Statements on Forms S-8 of Royal Dutch Shell plc (Registration Numbers 333-126715, 333-141397, 333-171206, 333-192821 and 333-200953).

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Royal Dutch Shell plc

(Registrant)

 

 

Date: April 28, 2015

 

 

 

 

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DATED 8 APRIL 2015

ROYAL DUTCH SHELL PLC

and

BG GROUP PLC

___________________________________________

CO-OPERATION AGREEMENT
___________________________________________

Slaughter and May
One Bunhill Row
London
EC1Y 8YY
528239351

 

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CONTENTS

1.	Interpretation	4
2.	Publication of the Announcement and the terms of the Acquisition	12
3.	Undertakings in relation to satisfaction of the Pre-Conditions and the Conditions	13
4.	Scheme Document	14
5.	Shell public documents and shareholder approval	15
6.	Implementation of the Scheme and switching to an Offer	16
7.	Conduct of business	18
8.	Employees and share plans	18
9.	Tax matters	19
10.	Directors’ and officers’ insurance	20
11.	Break Payment	20
12.	Code and the Listing Rules	22
13.	Termination	22
14.	Representations and warranties	24
15.	Notices	24
16.	Remedies and waivers	26
17.	Variation	27
18.	Invalidity	27
19.	Entire agreement	27
20.	Language	27
21.	Contracts (Rights of Third Parties) Act 1999	28
22.	Assignment	28
23.	Costs and expenses	28
24.	Further assurance	28

25.	Counterparts	28
26.	Governing law and jurisdiction	28

SCHEDULE 1 BG Share Plans	31
SCHEDULE 2 Form of Announcement	36

 

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THIS AGREEMENT is entered into on 8 April 2015

BETWEEN:

1.	ROYAL DUTCH SHELL PLC, a public limited company incorporated in England and Wales, having the Netherlands as its effective place of management, with its registered address at Shell Centre, London SE1 7NA and company number 04366849 (“Shell”); and

2.	BG GROUP PLC, a public limited company incorporated in England and Wales with its registered address at 100 Thames Valley Park Drive, Reading, Berkshire RG6 1PT and company number 03690065 (“BG”),

together referred to as the “parties” and each as a “party” to this Agreement.

WHEREAS:

(A)	Shell proposes to announce an intention to make a recommended pre‑conditional offer for the entire issued and to be issued ordinary share capital of BG, excluding any shares held in treasury, (the “Acquisition”), on the terms and subject to the conditions set out in the Announcement.

(B)

It is intended that the Acquisition will be effected by way of a scheme of arrangement of BG pursuant to Part 26 of the Act (the “Scheme”), but Shell reserves the right, as set out in (and subject to the terms and conditions of) the Announcement and Clause 6.3 of this Agreement, to elect to implement the Acquisition by way of a takeover offer (the “Offer”).

(C)	The parties have agreed to take certain steps to effect the completion of the Acquisition and wish to enter into this Agreement to record their respective obligations relating to such matters.

IT IS AGREED AS FOLLOWS:

1.	Interpretation

1.1	In this Agreement, the following words and expressions have the meanings given below:

1.2	In this Agreement, except where the context otherwise requires:

(A)

the expression “group”, in relation to a party, means that party together with its subsidiaries and subsidiary undertakings from time to time;

(B)

the expressions “subsidiary” and “subsidiary undertaking” shall have the meanings given in the Act;

(C)

the expression “offer” shall have the meaning given in the Code and the expression “takeover offer” shall have the meaning given in section 974 of the Act;

(D)

the expression “acting in concert” shall be construed in accordance with the Code;

(E)

a reference to an enactment or statutory provision shall include a reference to any subordinate legislation made under the relevant enactment or statutory provision and is a reference to that enactment, statutory provision or subordinate legislation as from time to time amended, consolidated, modified, re-enacted or replaced;

(F)

references to one gender include other genders;

(G)

words in the singular shall include the plural and vice versa;

(H)

a reference to a “person” shall include a reference to an individual, an individual's executors or administrators, a partnership, a firm, a body corporate, an unincorporated association, government, state or agency of a state, local or municipal authority or government body, a joint venture or association (in any case, whether or not having separate legal personality);

(I)

a reference to a Recital, Clause or Schedule (other than to a schedule to a statutory provision) shall be a reference to a recital, clause or schedule to (as the case may be) this Agreement;

(J)

references to times are to London time;

(K)

any reference to a “day” (including within the phrase “Business Day”) shall mean a period of 24 hours running from midnight to midnight;

(L)

references to any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall in respect of any jurisdiction other than England be deemed to include what most nearly approximates the English legal term in that jurisdiction;

 

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(M)

references to “writing” shall include any modes of reproducing words in any legible form and shall include email except where otherwise expressly stated;

(N)

a reference to “includes” or “including” shall mean “includes without limitation” or “including without limitation” respectively;

(O)

references to “£” and “pounds sterling” are to the lawful currency of England;

(P)

the rule known as the ejusdem generis rule shall not apply and accordingly general words introduced by the word “other” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things;

(Q)

general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words;

(R)

a reference to any other document referred to in this Agreement is a reference to that other document as amended, varied, novated or supplemented at any time; and

(S)

references to this Agreement include this Agreement as amended or supplemented in accordance with its terms.

1.3	The headings in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.

1.4	The Schedules form part of this Agreement and shall have the same force and effect as if set out in the body of this Agreement and any reference to this Agreement shall include the Schedules.

2.	Publication of the Announcement and the terms of the Acquisition

2.1

The obligations of the parties under this Agreement, other than this Clause 2.1 and Clauses 15 to 26, shall be conditional on the release of the Announcement via a Regulatory Information Service at or before 7:30 a.m. on the date of this Agreement, or such later time and date as the parties may agree (and, where required by the Code, approved by the Panel).

2.2

The terms of the Acquisition shall be as set out in the Announcement, together with such other terms as may be agreed by the parties in writing (save in the case of an improvement to the terms of the Acquisition, which will be at the absolute discretion of Shell) and, where required by the Code, approved by the Panel. The terms of the Acquisition at the date of posting of the Scheme Document shall be set out in the Scheme Document. Should Shell elect to implement the Acquisition by way of an Offer in accordance with Clause 6.3, the terms of the Acquisition shall be set out in the Offer Document.

 

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3.	Undertakings in relation to satisfaction of the Pre-Conditions and the Conditions

3.1	Shell shall diligently pursue the Clearances with a view to satisfying the Pre-Conditions and the Regulatory Conditions as soon as is reasonably practicable and, in any event, by the Long Stop Date.

3.2	Shell shall use its reasonable endeavours to secure the Clearances, including by accepting the imposition of, or offering, any commercially reasonable conditions, obligations, undertakings, commitments, measures or modifications by or to the Relevant Authority.

3.3

Shell and BG shall co-operate with each other and provide each other with all reasonable information, assistance and access in a timely manner in order to allow Shell, or Shell and BG jointly, or BG, as may be required, to make any filings with the Relevant Authorities as are necessary in connection with the Clearances, taking into account all applicable waiting periods and to ensure that all information necessary for the making of (or responding to any requests for further information consequent upon) any such filings (including draft versions) is supplied accurately and promptly, provided that the co-operation will be conducted in a manner reasonably designed to preserve applicable lawyer/client and lawyer work product privileges and to limit the exchange of any competitively sensitive information to outside counsel or pursuant to an appropriately established clean team arrangement.

3.4

Shell shall be responsible for determining the strategy for obtaining the Clearances and (except where BG is required by law to do so) contacting and corresponding with the Relevant Authorities in relation to such Clearances. To the extent that BG is contacted by a Relevant Authority, it shall permit Shell to respond to that Relevant Authority (unless BG is required by law to provide the response).

3.5	Without prejudice to the generality of Clause 3.3, and except to the extent that to do so is prohibited by law:

(A)

Shell, or Shell and BG jointly, or BG, as may be required, will submit a notification to each Relevant Authority as soon as is reasonably practicable after the signing of this Agreement and within any applicable mandatory time periods where it is necessary or expedient to do so to obtain the Clearances;

(B)

Shell and BG shall closely co-operate in the preparation of all such filings referred to in this Clause 3 and in relation to the preparation of any other submissions, material correspondence or material communications to any Relevant Authority in connection with the Clearances;

(C)

each party shall provide, or procure the provision of, draft copies of all filings, submissions, material correspondence and material communications intended to be sent to any Relevant Authority in relation to obtaining any Clearances to the other party and its legal advisers at such time as will allow the receiving party a reasonable opportunity to provide comments on such filings, submissions, correspondence and communications before they are submitted, sent or made and each party shall provide the other party with copies of all such filings, submissions, material correspondence and material communications in the form finally submitted or sent (including, in the case of non-written communications, reasonably detailed summaries of material non-written communications);

 

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(D)

each party shall have regard in good faith to comments made in a timely manner by the other party on draft copies of filings, submissions, material correspondence and material communications provided pursuant to Clause 3.5(C);

(E)

Shell and BG shall notify each other, and provide copies (including, in the case of non-written communications, reasonably detailed summaries of material non-written communications), in a timely manner of any material communication or material correspondence from any Relevant Authority in relation to obtaining any Clearance.  Each party further agrees to keep the other party reasonably informed as to the progress of any notification submitted pursuant to Clause 3.5(A) and shall reasonably consider requests by the other party or its advisers to attend all meetings or material calls with any Relevant Authority or other persons or bodies (unless prohibited by the Relevant Authority, applicable law or other person or body or where commercially sensitive information is likely to be discussed at such meetings or on such calls) relating to obtaining any Clearance and requests to make oral submissions at such meetings or calls; and

(F)

where reasonably requested by a party, and insofar as permitted by the Relevant Authority, the other party shall make available appropriate representatives for meetings and calls with any Relevant Authority in connection with the obtaining of any Clearances,

provided that in respect of any information the circulation of which would adversely affect the relevant party’s legitimate business interests, this Clause 3 shall only require the disclosing party to provide, or procure the provision of, non-confidential versions of such information to the other party and in respect of any competitively sensitive information, such information shall be exchanged on an outside counsel basis only or pursuant to an appropriately established clean team arrangement.

3.6	Each party undertakes to keep the other informed promptly of (i) developments which are material or reasonably likely to be material to the obtaining of a Clearance and (ii) the satisfaction of the Pre-Conditions and the Regulatory Conditions.

3.7

To the extent that BG provides Shell with any information, assistance and / or access to BG’s senior management for the purposes of preparing for and monitoring the integration of the businesses of the Shell Group and the BG Group after completion of the Acquisition (which BG is under no obligation to provide), any competitively sensitive information shall be provided on an outside counsel basis only or pursuant to an appropriately established clean team arrangement.

4.	Scheme Document

4.1

Shell agrees to provide promptly to BG all such information about itself, its directors and the Shell Group (including any information required under applicable law or the Code regarding the intentions of Shell, quantified financial benefits statements and any public reports required by the Code on quantified financial benefits statements) as may be reasonably requested and which is required for the purpose of inclusion in the Scheme Document and to provide all other assistance and access which may be reasonably required for the preparation of the Scheme Document and any other document required by applicable law or under the Code to be published in connection with the Scheme, including access to, and ensuring that reasonable assistance is provided by, its professional advisers.

 

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4.2

Shell shall procure that its directors accept responsibility for all of the information in the Scheme Document relating to themselves (and members of their immediate families, related trusts and persons connected with them), the Shell Group, the financing of the Acquisition, any statements of the opinion, belief or expectation of the directors of Shell in relation to the Acquisition or the enlarged group of Shell following the completion of the Acquisition and any other information in the Scheme Document for which a bidder is required to accept responsibility.

5.

Shell public documents and shareholder approval

5.1	The parties intend that the Shell Circular and the Shell Prospectus will be published as soon as reasonably practicable following satisfaction or waiver of the Pre-Conditions and at the same time as the Scheme Document.

5.2

Shell shall provide, or procure the provision of, draft copies of the Shell Circular and the Shell Prospectus to BG (and / or its advisers) at such time as will allow BG (and / or its advisers) reasonable notice of and reasonable opportunity to review and comment on such drafts and Shell (and / or its advisers) shall in good faith consider all comments reasonably and promptly proposed by BG (and / or its advisers) before such drafts are submitted or sent to the UK Listing Authority or any other Relevant Authority or published in final form and, where practicable, Shell shall promptly notify BG (and / or its advisers) of any material comments received from the UK Listing Authority or any other Relevant Authority in relation to the Shell Circular and / or the Shell Prospectus.

5.3

The Shell Circular shall contain a unanimous and unconditional recommendation from the board of directors of Shell that the shareholders of Shell vote in favour of the Shell Resolutions (the “Shell Board Recommendation”), unless the board of directors of Shell has determined, following consultation with external legal counsel and Shell’s financial adviser, that including a Shell Board Recommendation would be inconsistent with any of the respective fiduciary duties of Shell’s directors. To the extent permitted by applicable law and regulation, and subject to the fact that the directors of Shell are considering such decision not being required to be publicly announced under any law, rule or regulation beforehand, where reasonably practicable, before a decision that the Shell Board Recommendation is inconsistent with any of the respective fiduciary duties of Shell’s directors is notified to the shareholders of Shell or made public, Shell will notify BG that it is considering making such a decision and will provide BG with the opportunity to provide representations to the board of directors of Shell for a period of 10 Business Days following notification.

5.4

BG agrees to provide promptly to Shell, to the standard that is required for Shell to meets its obligations in relation to the Listing Rules and the Prospectus Rules, all such information about itself, its directors and the BG Group as may be reasonably requested and which is required for the purpose of inclusion in the Shell Circular and / or the Shell Prospectus and to provide all other assistance and access which may be reasonably required for the preparation of the Shell Circular and / or the Shell Prospectus, including access to, and ensuring that reasonable assistance is provided by, its professional advisers.

 

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5.5

Shell shall use reasonable endeavours to ensure that the Shell Circular and the Shell Prospectus are dispatched and published, respectively, in accordance with the timetable agreed between the parties in writing from time to time and shall convene the Shell General Meeting for the same date as the Court Meeting and the BG General Meeting (or such later date as may be agreed by both parties in writing).

5.6	After the posting of the Shell Circular and before the Shell General Meeting, Shell shall keep BG informed, on a regular basis or as soon as reasonably practicable following a request from BG, of the number and content of proxy votes received in respect of the Shell Resolutions.

5.7	Shell shall permit up to six representatives of BG and its advisers to attend the Shell General Meeting.

5.8	Subject to the approval of the Shell Resolutions at the Shell General Meeting, Shell shall use all reasonable endeavours to cause all New Shell Shares to be issued to BG shareholders pursuant to the Acquisition to be approved for listing on the London Stock Exchange and Euronext Amsterdam.

5.9

For so long as the Acquisition is being implemented by way of the Scheme, Shell shall use all reasonable endeavours to cause all New Shell Shares which are issued to BG shareholders upon the Scheme becoming effective to be issued in reliance on the exemption from the registration requirements of the Securities Act provided by section 3(a)(10) of the Securities Act.

6.	Implementation of the Scheme and switching to an Offer

6.1	Where the Acquisition is being implemented by way of the Scheme, Shell undertakes that, before the Sanction Hearing, it shall deliver a notice in writing to BG either:

(A)

confirming the satisfaction or waiver of all Pre-Conditions and Conditions (other than the Scheme Condition); or

(B)

confirming its intention to invoke a Condition (if permitted by the Panel) and providing reasonable details of the event which has occurred, or circumstances which have arisen, which Shell reasonably considers entitle it to invoke the Condition.

6.2

If the Acquisition is being implemented by way of the Scheme, Shell shall instruct counsel to appear on its behalf at the Sanction Hearing and undertake to the Court to be bound by the terms of the Scheme in so far as it relates to Shell to the extent that all the Conditions have been satisfied or waived prior to or on the date of the Sanction Hearing.

 

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6.3	Shell shall be entitled, with the consent of the Panel, to implement the Acquisition by way of the Offer rather than the Scheme (such election being a “Switch”) if:

(A)

BG provides its prior written consent (an “Agreed Switch”), in which case Clause 6.4 shall apply;

(B)

a third party announces a firm intention to make an offer for the issued and to be issued ordinary share capital of BG (whether including or excluding any BG Shares held in treasury) which is recommended by the board of directors of BG; or

(C)

the board of directors of BG withdraws its unanimous and unconditional recommendation of the Scheme.

6.4	In the event of any Agreed Switch:

(A)

the Acceptance Condition shall be set at 90 per cent. (or such lesser percentage as may be agreed between the parties in writing after, to the extent necessary, consultation with the Panel, being in any case more than 50 per cent. of the BG Shares to which the Offer relates);

(B)

Shell shall not take any action which would cause the Offer not to proceed, to lapse or to be withdrawn in each case for non-fulfilment of the Acceptance Condition prior to the 60th day after publication of the Offer Document and Shell shall ensure that the Offer remains open for acceptances until such time;

(C)

Shell shall ensure that the only pre-conditions of the Offer shall be the Pre-Conditions and that the only conditions of the Offer shall be the Conditions (subject to replacing the Scheme Conditions with the Acceptance Condition referred to in Clause 6.4(A)) (unless the parties agree otherwise in writing); and

(D)

Shell shall keep BG informed, on a regular basis and in any event within two Business Days following receipt of a written request from BG, of the number of holders of BG Shares that have validly returned their acceptance or withdrawal forms or incorrectly completed their withdrawal or acceptance forms and the identity of such shareholders.

6.5	In the event of any Agreed Switch:

(A)

the parties agree that all provisions of this Agreement relating to the Scheme and its implementation shall apply to the Offer or its implementation mutatis mutandis;

(B)

Shell’s obligations under Clause 5.2 shall apply to the Offer Document as if references in such Clause to the Shell Circular were to the Shell Circular and the Offer Document; and

(C)

BG’s obligations under Clause 5.4 shall apply to the Offer Document as if references in such Clause to the Shell Circular were to the Shell Circular and the Offer Document.

 

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6.6

In the event that the board of directors of BG no longer unconditionally and unanimously recommends the Scheme (or Offer, as the case may be) both parties’ obligations under this Agreement shall terminate (including, for the avoidance of doubt, Shell’s obligation to make any Break Payment, unless a Break Payment Event has occurred prior to such change of recommendation) except for:

(A)

BG’s obligation to provide Shell with all reasonable information, assistance and access in a timely manner to the extent required in order to allow Shell to make and / or diligently pursue any filings with any Relevant Authority as are necessary in connection with the Clearances pursuant to Clause 3.3; and

(B)

Clauses 15 to 26 so far as they relate to such obligation referred to in (A) above.

7.	Conduct of business

Pending the Effective Date, Shell shall not (except (i) with BG’s prior written consent, (ii) where required by law or regulation or (iii) to the extent the relevant matter is expressly permitted or contemplated by this Agreement), and shall procure that no member of the Shell Group agrees, resolves, commits or announces publicly any agreement or intention to:

(A)

other than in the ordinary course of business and consistent with past practice (including, without limitation, the granting of options or awards in respect of shares to employees in the normal and ordinary course and in accordance with the Shell Group’s employee incentive plans and the issuance of shares necessary to satisfy such options or awards vesting or due to be settled under such plans):

(i)

allot or issue any Shell shares or any securities convertible into Shell shares; or

(ii)

grant any option over or right to subscribe for any such shares or any such securities referred to in (i) above

in each case that are allotted, issued or granted at less than the fair market value of the relevant security on the date of allotment, issuance or grant; or

(B)

split, combine or reclassify any of its shares or amend its memorandum or articles of association, in each case, in any manner that would have an adverse impact on the value of the New Shell Shares.

8.	Employees and share plans

8.1	The parties agree that the provisions of Schedule 1 (BG Share Plans) shall apply.

8.2

BG and Shell agree that if the Acquisition is implemented by way of the Scheme, the timetable for its implementation shall be fixed so as to enable options and awards under the relevant BG Share Plans which provide for exercise and / or vesting upon the sanction of the Scheme by the Court to be exercised or vest in sufficient time to enable the resulting BG Shares to be bound by the Scheme on the same terms as BG Shares held by BG shareholders.

 

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9.	Tax matters

9.1	Shell warrants to BG that:

(A)

in agreeing the Preliminary Settlement Agreement with the DRS, Shell has disclosed completely and correctly all relevant facts and circumstances to the DRS and there are no written or unwritten agreements between the DRS and Shell (other than the Preliminary Settlement Agreement), and there are no unilateral commitments by either Shell or the DRS to the other (other than under the Preliminary Settlement Agreement), that may in any way affect the validity of the Preliminary Settlement Agreement or may change, restrict or otherwise affect the points agreed therein; and

(B)

the Preliminary Settlement Agreement has been executed by an authorised representative of Shell, and to the best of Shell’s knowledge, by an authorised representative of the DRS.

9.2	Shell agrees that it will use all reasonable endeavours to reach a binding final settlement agreement with the DRS, reflecting, amongst other things, the matters set out in the Preliminary Settlement Agreement (the “Final Settlement Agreement”).

9.3	Without prejudice to Clause 9.2:

(A)

Shell shall provide each draft of the Final Settlement Agreement before it is submitted to the DRS to BG at such time as will allow BG a reasonable opportunity to provide comments on it before the draft is submitted or sent;

(B)

Shell shall have regard in good faith to comments promptly provided by BG on the draft copies provided pursuant to Clause 9.3(A);

(C)

Shell shall keep BG promptly and reasonably informed of any material actual or proposed developments in relation to the negotiation and / or agreement of the Final Settlement Agreement and will, where appropriate, consult with BG in relation to the process of finalising the Final Settlement Agreement; and

(D)

within three Business Days after execution of the Final Settlement Agreement, Shell will provide BG with a copy of such executed Final Settlement Agreement.

9.4	Shell undertakes that it will not:

(A)

terminate or amend the Preliminary Settlement Agreement or the Final Settlement Agreement;

(B)

waive or agree not to exercise any of its rights under the Preliminary Settlement Agreement or the Final Settlement Agreement; and / or

 

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(C)

agree to a termination or any amendment of the Preliminary Settlement Agreement or the Final Settlement Agreement by the DRS,

in each case other than: (i) (in relation to the Preliminary Settlement Agreement only and subject to Clause 9.2) as provided for in clause 3 of the Preliminary Settlement Agreement; or (ii) with the prior written consent of BG (such consent not to be unreasonably withheld or delayed).

10.	Directors’ and officers’ insurance

10.1

If and to the extent such obligations are permitted by law, for six years after the Effective Date, Shell shall procure that the members of the BG Group honour and fulfil their respective obligations (if any) existing as at the date of this Agreement to indemnify their respective directors and officers and to advance expenses, in each case with respect to matters existing or occurring at or prior to the Effective Date.

10.2

With effect from completion of the Acquisition, Shell shall, to the extent such cover is available on reasonable commercial terms, procure the provision of directors’ and officers’ liability insurance cover for both current and former directors and officers of the BG Group, including directors and officers who retire or whose employment is terminated as a result of the Acquisition, for acts and omissions up to and including the Effective Date, in the form of runoff cover for a period of six years following the Effective Date. Such insurance cover shall be with reputable insurers and provide cover, in terms of amount and breadth, at least as much as that provided under the BG Group’s directors’ and officers’ liability insurance as at the date of this Agreement.

11.	Break Payment

11.1

By way of compensation for any loss suffered by BG in connection with the preparation and negotiation of the Acquisition, this Agreement and any other document relating to the Acquisition, subject to Clause 11.2, Shell shall pay, or shall procure the payment by a member of the Shell Group of, the Break Payment to BG in the event that, following the publication of the Announcement in accordance with Clause 2.1:

(A)

on or prior to the Long Stop Date, the board of directors of Shell:

(i)

withdraws the Shell Board Recommendation;

(ii)

publicly announces its intention not to include the Shell Board Recommendation in the Shell Circular when it is sent to Shell shareholders or its intention not to send the Shell Circular to Shell shareholders; or

(iii)

does not include the Shell Board Recommendation in the Shell Circular when it is sent to Shell shareholders,

and, in any such case, BG or Shell exercises its right to terminate this Agreement pursuant to Clause 13.1(D);

 

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(B)

on or prior to the Long Stop Date, Shell invokes (and is permitted by the Panel to invoke) any Pre-Condition and / or any Regulatory Condition; or

(C)

on the Long Stop Date, any Pre-Condition and / or any Regulatory Condition has not been satisfied or waived by Shell,

(each a “Break Payment Event”).

11.2	No Break Payment shall be payable if:

(A)

at the time the relevant Break Payment Event occurs, this Agreement has been terminated pursuant to Clause 13.1(A), (B), (C), (E), (F) or (G), save where:

(i)

this Agreement has terminated pursuant to Clause 13.1(E) as a result of any Pre-Condition or Regulatory Condition: (a) being invoked by Shell (b) becoming incapable of satisfaction by the Long Stop Date and Shell stating that it will not be waived or (c) not being capable of being waived and becoming incapable of satisfaction by the Long Stop Date; or

(ii)

this Agreement has terminated pursuant to Clause 13.1(G) and the Scheme (or the Offer as the case may be) has been withdrawn or lapsed as a result of a Pre-Condition or Regulatory Condition being:  (a) invoked by Shell; (b) becoming incapable of satisfaction by the Long Stop Date and Shell stating that it will not be waived or (c) not being capable of being waived and becoming incapable of satisfaction by the Long Stop Date;

(B)

the Break Payment Event has been caused to a material extent by BG’s breach of its obligations under Clauses 3.1 to 3.6 or Clause 5.4 of this Agreement, provided that Shell shall have notified BG in writing promptly upon becoming aware of any such failure and BG shall not have remedied any such failure within 15 days of receipt of such notice or, if earlier, in sufficient time for Shell to reasonably meet any regulatory or legal deadline; or

(C)

at the time the relevant Break Payment Event occurs, Shell has already effected a Switch in accordance with Clauses 6.3(B) or 6.3(C).

11.3	Subject to Clause 11.4, Shell shall pay or procure the payment of the Break Payment to BG within 10 Business Days of the occurrence of the Break Payment Event.

11.4

The parties anticipate, and shall take the position and use all reasonable endeavours to ensure that it is accepted for the relevant tax purposes, that the Break Payment is outside the scope of VAT and is not treated for VAT purposes as consideration for a taxable supply.  If, however, the Break Payment is treated by any tax authority in whole or part as the consideration for a taxable supply: (i) BG shall provide Shell with a valid VAT invoice in respect of that supply; and (ii) if BG (or the representative member of the VAT group of which BG is a member) is liable to account for VAT in respect of that supply, Shell shall pay to BG (in addition to any other consideration for that supply) an amount equal to such VAT.  Any such additional amounts in respect of VAT shall be paid no later than the date falling 10 days before the date on which BG (or the representative member of the VAT group of which BG is a member) is liable to account for such VAT (the “Due Date”) or, if later, the date falling five days after BG has notified Shell in writing of the Due Date.

 

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11.5	Payment shall be made in immediately available funds (without any deduction or withholding, save only as requested by law, and without regard to any lien, right of set-off, counterclaim or otherwise) to such bank account as may be notified to Shell by BG for such purpose.

11.6

In the event that the Break Payment is paid in accordance with this Clause 11 and this Agreement terminates in accordance with Clause 13.1(D), except with respect to fraud, BG’s right to receive the Break Payment (plus any additional amounts in respect of VAT under Clause 11.4) shall be the sole and exclusive remedy of BG against Shell for any and all losses and damages suffered in connection with this Agreement and the transactions contemplated by this Agreement. In no event shall Shell be required to pay the Break Payment more than once or pay more than one Break Payment.

12.	Code and the Listing Rules

12.1	Nothing in this Agreement shall in any way limit the parties’ obligations under the Code, and any uncontested rulings of the Panel as to the application of the Code in conflict with the terms of this Agreement shall take precedence over such terms.

12.2	Nothing in this Agreement shall oblige:

(A)

BG to take any action which the Panel determines would not be permitted by Rule 21.2 of the Code;

(B)

BG or the directors of BG to recommend an Offer or a Scheme proposed by Shell or any member of the Shell Group; or

(C)

Shell to pay any amount over that which is permitted to be paid without the prior approval of its shareholders pursuant to LR 10.2.7R of the Listing Rules.

13.	Termination

13.1	Subject to Clauses 13.2 and 13.3, this Agreement shall terminate with immediate effect and all rights and obligations of the parties under the Agreement shall cease forthwith, as follows:

(A)

if agreed in writing between the parties;

(B)

upon service of written notice by Shell to BG, if the board of directors of BG withdraws or adversely modifies its unanimous and unconditional recommendation of the Scheme (or the Offer, as the case may be);

(C)

upon service of written notice by Shell to BG, if the Acquisition is being implemented by way of the Scheme and:

 

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(i)

the Court Meeting is not held on or before the 22nd day after the expected date of such hearing as set out in the Scheme Document (or such later date as may be agreed in writing between the parties with the consent of the Panel and the approval of the Court (if such approval is required)); or

(ii)

the Sanction Hearing is not held on or before the 22nd day after the expected date of such hearing as set out in the Scheme Document (or such later date as may be agreed in writing between the parties with the consent of the Panel and the approval of the Court (if such approval is required));

(D)

upon service of written notice by Shell to BG, following a Break Payment Event, or, upon service of written notice by BG to Shell, following a Break Payment Event under any of Clauses 11.1(A)(i), (ii) or (iii);

(E)

upon service of written notice by Shell to BG (without prejudice to Clause 11) prior to the Long Stop Date stating that either (i) any Pre-Condition or Condition which has not been waived is (or has become) incapable of satisfaction by the Long Stop Date and, notwithstanding that it has the right to waive such Pre-Condition or Condition, Shell will not do so; or (ii) any Pre-Condition or Condition which is incapable of waiver has become incapable of satisfaction by the Long Stop Date, in each case in circumstances where the invocation of the relevant Pre-Condition or Condition (or confirmation that the Pre-Condition or Condition is incapable of satisfaction, as appropriate) is permitted by the Panel;

(F)

upon service of written notice by Shell to BG, if a Competing Proposal is (i) recommended by the board of directors of BG or (ii) completes, becomes effective or is declared or becomes unconditional in all respects;

(G)

if the Scheme (or the Offer as the case may be) is withdrawn or lapses in accordance with its terms prior to the Long Stop Date and with the permission of the Panel (other than: (i) where such lapse or withdrawal is as a result of the exercise of Shell’s right to effect a Switch; or (ii) it is otherwise to be followed within five Business Days by an announcement under Rule 2.7 of the Code made by Shell or a person acting in concert with Shell to implement the Acquisition by a different offer or scheme on substantially the same or improved terms); or

(H)

if the Effective Date has not occurred by the Long Stop Date.

13.2

Termination of this Agreement shall be without prejudice to the rights of any of the parties which have arisen at or prior to termination. For the avoidance of doubt, if the Agreement is terminated pursuant to Clause 13.1, Shell will remain obliged to pay the Break Payment to the extent that it had become due and payable at or prior to any such termination (subject to the provisions of this Agreement then in force) on the occurrence of the Break Payment Event (together with any additional amounts in respect of VAT under Clause 11.4).

 

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13.3	The whole of this Clause 13, Clause 10 (but only in circumstances where this Agreement is terminated on or after the Effective Date), and Clauses 15 to 26 (inclusive) shall survive termination of this Agreement.

14.	Representations and warranties

14.1	Each party represents to the other party on the date of this Agreement that:

(A)

it has the requisite power and authority to enter into and perform its obligations under this Agreement;

(B)

this Agreement constitutes its binding obligations in accordance with its terms; and

(C)

the execution and delivery of, and performance of its obligations under, this Agreement will not:

(i)

result in any breach of any provision of its constitutional documents;

(ii)

result in a breach of, or constitute a default under, any instrument to which it is a party or by which it is bound; or

(iii)

result in a breach of any order, judgment, or decree of any court or governmental agency to which it is a party or by which it is bound.

14.2	Shell represents to BG that as at the date of this Agreement:

(A)

the only Shell shareholder resolutions that are required to implement the Acquisition are ordinary resolutions and no special resolutions are required; and

(B)

all material matters or circumstances of which employees of Shell engaged in the consideration of the Pre-Conditions and the Regulatory Conditions to the Acquisition are aware and which would or could reasonably be expected to result in any of the Pre-Conditions or Regulatory Conditions not being satisfied in the specific context of the Acquisition have been discussed with BG.

15.

Notices

15.1	A notice under this Agreement shall only be effective if it is in writing.

15.2	Notices under this Agreement shall be sent to a party by hand delivery or reputable international courier or by facsimile or by email at its physical address or facsimile number or email address respectively, and shall be marked for the attention of the individual set out below:

 

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(A)	Shell:
	Attention:	The Company Secretary
		Michiel Brandjes
	Physical address:	Royal Dutch Shell plc
		Carel van Bylandtlaan
		16, 2596 HR
		The Hague
		The Netherlands
	Fax number:	+31 70 377 3687
	Email address:	michiel.brandjes@shell.com
	with a copy to:
	Attention:	Roland Turnill and Hywel Davies
	Physical address:	Slaughter and May
		One Bunhill Row
		London EC1Y 8YY
		United Kingdom
	Fax number:	+44 (0)20 7090 5000
	Email address:	roland.turnill@slaughterandmay.com and hywel.davies@slaughterandmay.com
(B)	BG:
	Attention:	Chief Financial Officer and General Counsel
		Simon Lowth and Graham Vinter
	Physical address:	BG Group plc
		100 Thames Valley Park Drive
		Reading
		Berkshire RG6 1PT
		United Kingdom
	Fax number:	+44 (0)118 929 3791
	Email address:	simon.lowth@bg-group.com and graham.vinter@bg-group.com
	with a copy to:
	Attention:	Mark Rawlinson and Graham Watson
	Physical address:	Freshfields Bruckhaus Deringer LLP
		65 Fleet Street
		London EC4Y 1HS
		United Kingdom

	Fax number:	+44 (0)20 7108 7105 and +44 (0)20 7108 7263
	Email address:	mark.rawlinson@freshfields.com and graham.watson@freshfields.com

15.3	A party may change its notice details on giving notice to the other party of the change in accordance with Clauses 15.1 and 15.2.  That notice shall only be effective on the date falling one Business Day after the notification has been received or such later date as may be specified in the notice.

15.4	Any notice given under this Agreement shall, in the absence of earlier receipt, be deemed to have been duly given:

(A)

if delivered by hand, on delivery;

(B)

if sent by reputable international courier, on signature of a delivery receipt;

(C)

if sent by facsimile, when the sender’s facsimile system generates a message confirming successful transmission of the notice; or

(D)

if sent by email, when sent.

15.5	Any notice given under this Agreement outside the period between 9:00 a.m. and 5:00 p.m. (“Working Hours”) shall be deemed not to have been given until the start of the next period of Working Hours.

15.6	Each party shall, where it sends a notice by facsimile or email to the other party, within two Business Days send a hard copy of the relevant notice via hand delivery or reputable international courier to the physical address of the other party.

15.7	The provisions of this Clause 15 shall not apply in relation to the service of any claim form, application notice, order, judgment or other document relating to any proceedings, suit or action arising out of or in connection with this Agreement, whether contractual or non-contractual.

16.	Remedies and waivers

 

16.1	No delay or omission by any party to this Agreement in exercising any right, power or remedy provided by law or under this Agreement shall:

(A)

affect that right, power or remedy; or

(B)

operate as a waiver of it.

16.2	The single or partial exercise of any right, power or remedy provided by law or under this Agreement shall not preclude any other or further exercise of it or the exercise of any other right, power or remedy.

16.3	The rights, powers and remedies provided in this Agreement are cumulative and not exclusive of any rights, powers and remedies provided by law.

 

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16.4

Without prejudice to any other rights and remedies which either party may have, each party acknowledges and agrees that damages alone may not be an adequate remedy for any breach by either party of the provisions of this Agreement and either party shall be entitled to seek the remedies of injunction, specific performance and other equitable remedies, for any threatened or actual breach of any such provision of this Agreement by either party and no proof or special damages shall be necessary for the enforcement by either party of the rights under this Agreement.

17.

Variation

 

No variation of this Agreement shall be valid unless it is in writing (which, for this purpose, does not include email) and signed by or on behalf of each of the parties.

18.	Invalidity

 

If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, that shall not affect or impair:

(A)

the legality, validity or enforceability in that jurisdiction of any other provision of this Agreement; or

(B)

the legality, validity or enforceability under the law of any other jurisdiction of that or any other provision of this Agreement.

19.	Entire agreement

 

19.1

Save for the non-disclosure agreement between Shell and BG dated 31 March 2015 and the clean team confidentiality agreement between Shell and BG dated 2 April 2015 (each of which remains in force), this Agreement constitutes the whole and only agreement between the parties relating to the Acquisition and supersedes any previous agreement whether written or oral between the parties in relation to the Acquisition.

19.2	Except in the case of fraud, each party acknowledges that it is entering into this Agreement in reliance upon only this Agreement and that it is not relying upon any pre-contractual statement that is not set out in this Agreement.

19.3	Except in the case of fraud, no party shall have any right of action against the other party arising out of or in connection with any pre-contractual statement except to the extent that it is repeated in this Agreement.

19.4

For the purposes of this Clause 19, “pre-contractual statement” means any draft, agreement, undertaking, representation, warranty, promise, assurance or arrangement of any nature whatsoever, whether or not in writing, relating to the subject matter of this Agreement made or given by any person at any time before the date of this Agreement.

20.

Language

 

Each notice or other communication under or in connection with this Agreement shall be in English.

 

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21.

Contracts (Rights of Third Parties) Act 1999

The parties do not intend that any term of this Agreement should be enforceable, by virtue of the Contracts (Rights of Third Parties) Act 1999, by any person who is not a party to this Agreement.

22.	Assignment

 

No party shall be entitled to assign (whether absolutely or by way of security and whether in whole or in part), transfer, mortgage, charge, declare itself a trustee for a third party of, or otherwise dispose of (in any manner whatsoever) the benefit of this Agreement (or any part of it) or sub-contract in any manner whatsoever its performance under this Agreement without the prior written consent of the other party.

23.	Costs and expenses

 

Each party shall pay its own costs and expenses in relation to the negotiation, preparation, execution and carrying into effect of this Agreement and any matter contemplated by it.

24.	Further assurance

 

Each party shall, at its own cost, use reasonable endeavours to, or procure the doing of all acts that any relevant third party shall, do and execute and perform all such further deeds, documents, assurances, acts and things as may reasonably be required to give effect to this Agreement.

25.	Counterparts

 

25.1	This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart.

25.2	Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument.

26.	Governing law and jurisdiction

 

26.1	This Agreement is to be governed by and construed in accordance with English law.  Any matter, claim or dispute arising out of or in connection with this Agreement, whether contractual or non-contractual, is to be governed by and determined in accordance with English law.

26.2	The parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales in respect of any matter, claim or dispute arising out of or in connection with this Agreement, whether contractual or non-contractual.

 

 

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IN WITNESS WHEREOF the parties have executed this Agreement on the date first set out above:

 

 

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IN WITNESS WHEREOF the parties have executed this Agreement on the date first set out above:

 

 

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SCHEDULE 1
BG Share Plans

BG and Shell agree that the following provisions will, where appropriate, apply to the BG Share Plans and certain other employee incentive arrangements.

1.	General Employee Share Plan matters

1.1

Shell agrees that BG may amend the rules of any of the BG Share Plans in relation to the time at which options may be exercised or awards vest if, in the opinion of the BG directors or the BG Remuneration Committee, such amendments are necessary or desirable to implement the Scheme, facilitate the administration of the BG Share Plans or to obtain or maintain favourable tax treatment for participants in such plans or any member of the BG Group. BG agrees that in advance of making any such amendment, BG shall notify Shell that such amendment is being considered by the BG directors or the BG Remuneration Committee, as appropriate, and BG agrees that Shell shall be entitled to make representations to the relevant body, which the relevant body shall consider prior to making any such amendment. Shell acknowledges that neither the BG directors nor the BG Remuneration Committee shall be bound to act in accordance with Shell’s representations.

1.2

If BG considers it appropriate for tax, securities law or administrative reasons, in order to ensure that employees in all jurisdictions are treated so far as practicable equally, it may propose that holders of options and awards who are not resident in the United Kingdom receive a cash sum equal to the latent profit in their option or award being (i) in the case of an option, the difference between the exercise price per share (if any) and the value of the Offer Consideration at the time of the Scheme Order or the Unconditional Date (as the case may be) multiplied by the number of BG Shares in respect of which the option is exercised or (ii) in the case of an award, the value of the Offer Consideration at the time of the Scheme Order or the Unconditional Date (as the case may be) multiplied by the number of BG Shares in respect of which the award vests.  The parties will then discuss in good faith whether that is appropriate and, if they so agree, subject to any restriction under law, the Code or other regulation, the proposals made by BG and the Rule 15 proposals to be made by Shell will be adjusted accordingly in that jurisdiction.

2.	Long-Term Incentive Plan

2.1	References in this Schedule 1 to awards outstanding under the LTIP include awards outstanding and granted under the Deferred Bonus Plan and the Voluntary Bonus Deferral Plan.

2.2	Shell acknowledges that the extent to which awards outstanding under the LTIP vest at the date of the Scheme Order (or the Unconditional Date, as the case may be) in connection with the Acquisition is to be determined solely by the BG Remuneration Committee in accordance with the rules of the LTIP.

2.3

Shell acknowledges that BG grants awards on and subject to the rules of the LTIP on an annual basis in May. Shell acknowledges that BG proposes to grant awards on and subject to the rules of the LTIP in or around May 2015 with a total aggregate market value of approximately £70 million (“2015 Awards”) of which approximately £33 million will relate to performance based awards and approximately £37 million to non-performance based awards.

 

 

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2.4

Shell acknowledges that BG may decide to grant additional awards under the LTIP in accordance with its normal practice and in a manner and on a timetable consistent with historic practice, including making (i) additional ad hoc awards for recruitment and other similar purposes provided that such awards are not over shares with a value of more than £3 million measured at their date of grant; (ii) an annual grant in May 2016 if the Effective Date has not occurred by that time which shall be on terms which are consistent with the terms for the 2015 Awards and shall not be over shares with an aggregate market value greater than for those 2015 Awards; and (iii) deferred bonus awards and voluntary bonus deferral awards in respect of any bonuses payable in respect of BG’s financial year ending 31 December 2015 in a manner and on a timetable consistent with historic practice.

3.	Deferred Bonus Awards under the LTIP

Shell acknowledges that BG intends to grant awards on and subject to the rules of the Deferred Bonus Plan over an aggregate number not exceeding 34,333 BG Shares to two individuals who are “restricted persons” for the purposes of the UKLA Model Code as soon as BG is no longer in a prohibited period.

4.

Sharesave

 

4.1

Unless paragraph 4.2 applies, Shell agrees to offer participants in the Sharesave the opportunity following the date of the Scheme Order (or the Unconditional Date, as the case may be) to release all or any of their Sharesave options over BG Shares (“Original Options”) in consideration for the grant of an equivalent option over Shell B Shares (“Replacement Option”) on and subject to the rules of the Sharesave and any approvals that may be required of HMRC (“Option Rollover”). Shell and BG will seek to agree with HMRC that the ratios on the basis of which an Original Option shall be exchanged for a Replacement Option shall be calculated by reference to the respective market values attributable to a Shell B Share and a BG Share by the value of the Offer Consideration measured at the date of the Scheme Order (or the Unconditional Date, as the case may be) or at such other time as is agreed by Shell and BG and approved by HMRC.

4.2

This paragraph 4.2 applies if Shell is for whatever reason unable to grant a Replacement Option which satisfies the requirements of Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003 and the relevant Original Option becomes exercisable following the date of the Scheme Order (or the Unconditional Date, as the case may be), over less than the full number of BG Shares that could otherwise be acquired on maturity of the related savings contracts. Shell agrees that it will make (or procure that BG will make) within one month of the normal maturity date or any earlier lapse date after the cessation of employment a one off cash payment to the holders of those Original Options which were granted prior to the date of the Announcement and who (A) exercise those options at any time during the 6 month period following the date of the Scheme Order (or the Unconditional Date, as the case may be) and (B) either (i) are still at the normal time of maturity for the related savings contract employed by a member of the Shell Group or (ii) have ceased employment in circumstances where under Rules 10.2, 10.3 or 12 of the Sharesave their option remains exercisable. The cash payment will be of an amount equal, on a net of tax basis, to the additional profit which the participants would have received had they been able to exercise their options over the additional number of BG Shares which would otherwise have been available (i) on the maturity of their savings contracts; or (if earlier) (ii) the lapse date of the options after the cessation of employment and had then been able to accept the Scheme or Offer (as the case may be) in respect of that additional number of BG Shares. For the avoidance of doubt, any such cash payment would be subject to deductions for income tax and employee’s social security contributions.

 

 

 

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4.3	Shell acknowledges that BG may decide to grant options under the Sharesave prior to the date of the Scheme Order (or the Unconditional Date, as the case may be), in accordance with its normal practice and timetable and in a manner consistent with historic practice.

5.	SIP and Global Partnership Plan

5.1

Shell acknowledges that prior to the date of the Scheme Order (or the Unconditional Date, as the case may be), participants in the SIP and the Global Partnership Plan will continue to accumulate savings from their salary over six month accumulation periods and that those savings will (to the extent an accumulation period is completed prior to the date of the Scheme Order (or the Unconditional Date, as the case may be)) be used to purchase BG Shares in accordance with the rules of those plans and that BG may award (i) in the case of the SIP, free BG Shares (known as flex shares) for no consideration and (ii) in the case of the Global Partnership Plan, matching BG Shares for no consideration, in each case in accordance with BG’s normal practice and timetable and in a manner consistent with historic practice.

5.2

Shell and BG agree that BG shall retain the trust established pursuant to the SIP for at least five years following the date of the Scheme Order (or the Unconditional Date, as the case may be) as a vehicle available to participants in the SIP in which to hold any Shell B Shares they acquire under the Acquisition in exchange for the BG Shares they hold under the SIP so as to optimise the UK tax favourable treatment available to participants.

6.	Articles of Association

BG and Shell agree that shareholder approval will be sought for an amendment to the articles of association of BG so that any BG Shares transferred or issued after the Scheme Record Time pursuant to the exercise of options or vesting of awards under the BG Share Plans will be compulsorily acquired by Shell on the same terms as were available to other BG Shareholders under the Acquisition. Shell agrees that it is the commercial intention of the parties that, so far as practicable, the Shell B Shares comprised in the consideration to be provided under the amended terms of the articles of association will be issued by Shell. Shell agrees that it will use its reasonable endeavours to include in the Final Settlement Agreement provisions enabling Shell to issue Shell B Shares under such amended terms.  If for any reason it is not practicable to issue Shell B Shares then Shell will procure the transfer of such shares.

 

 

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7.

The Trust

As at 31 December 2014, the Trust held 2,830,140 unallocated BG Shares. Subject always to the BG Group’s ability to make recommendations to the trustee of the Trust to use the unallocated BG Shares to satisfy awards vesting or options being exercised in the normal course prior to the Effective Date, the parties agree that the trustee of the Trust will be requested to agree to satisfy certain options and awards vesting or becoming exercisable as a consequence of the Acquisition, using any unallocated BG Shares in priority to BG issuing BG Shares to satisfy such options and awards.

8.	Communications

BG and Shell shall co-operate with each other to prepare, in a form to be agreed between BG and Shell, communications (or, if applicable, multiple series of communications) to each of the participants in the BG Share Plans to enable Shell to satisfy its obligations under Rule 15 of the Code, and to send, or arrange for the sending of such communications (or series of communications, as the case may be) to participants at the appropriate time(s) (such time(s) to be agreed between the parties).

9.	Annual Incentive and other bonus schemes

9.1

Subject to paragraphs 9.2 and 9.3 below, Shell acknowledges that the BG Group operates annual incentive schemes for its group, management, and energy trading employees under which bonuses are awarded subject to corporate, financial, business unit and personal performance conditions and that the BG Group shall continue to operate these arrangements for the performance periods constituting the financial years ending 31 December 2015 and 31 December 2016 (if the Effective Date has not occurred by that time) in accordance with its normal practice and in a manner consistent with historic practice.

9.2

Shell agrees that if the Effective Date occurs before the end of a financial year, members of the BG Group may decide in accordance with the terms of the relevant incentive scheme to measure the extent to which performance measures for the relevant financial year have been satisfied as at the Effective Date and to determine and pay bonus awards for that period pro-rated to reflect the number of days in the relevant year that have been worked up to the Effective Date. If members of the BG Group do make such a pro-rated payment to employees of the BG Group, Shell agrees that employees shall continue to participate in the same or an equivalent incentive scheme in respect of the remainder of the relevant financial year and that it will make, or procure the BG Group to make, bonus awards to such employees to be assessed on the basis of their individual performance for that period (for these purposes with an appropriate mapping to the established BG annual performance rating system) with an assumed on target business performance.

9.3

Shell agrees that if the Effective Date occurs before the end of a financial year, and if members of the BG Group decide in accordance with the terms of the relevant incentive scheme that they will not measure the extent to which performance measures for the relevant financial year have been satisfied as at the Effective Date, then the relevant incentive scheme will continue to be operated in respect of the financial year and that it will make, or procure the BG Group to make, bonus awards to eligible employees to be assessed on the basis of each eligible employee’s individual performance during the relevant financial year (for these purposes with an appropriate mapping to the established BG annual performance rating system) with an assumed on target business performance.

 

 

 

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10.	Redundancy arrangements

Shell agrees that if any employee of the BG Group (an “Employee”) has their employment terminated during the period that is 12 months after the Effective Date (other than by reason of their gross misconduct or for poor performance reasons) Shell will provide, or procure that a member of the Shell Group will provide, termination benefits (in addition to contractual notice periods and any relevant statutory payments) to each Employee in accordance with terms that mirror the redundancy termination benefits most recently provided to employees of the BG Group in the country in which the relevant Employee is based prior to the Effective Date.

11.	Retention arrangements

Shell and BG will consult prior to the Effective Date with a view to agreeing the implementation of cash-based retention arrangements for employees of the BG Group whom BG considers critical to achieving the successful closure of the Acquisition or business continuity throughout the period up to the Effective Date. As part of such consultation Shell and BG will in good faith seek to agree a total budget for such arrangements.  BG will provide sufficient information to Shell in order for Shell to monitor the allocation of any agreed budget.

12.	Employment Matters

Shell agrees that, for at least the 12 month period following the Effective Date, in respect of each employee of the BG Group immediately prior to the Effective Date who remains in employment within the Shell Group, it will maintain their base salary and pension benefits at the level existing immediately before the Effective Date unless otherwise agreed with the relevant employee.

Shell’s acknowledgements in paragraphs 2.3, 2.4, 3, 4.3, 5.1 and 9.1 of this Schedule 1 do not impose any contractual restrictions or obligations on the BG Group or their boards of directors.

 

 

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2

3

4

5

6

5

These ranges are not intended to be capable of being aggregated to form a cash flow target for the Combined Group, and assume Brent oil prices return to around the middle of Shell’s long term planning range. These statements should not be construed as profit forecasts and are not subject to the requirements of Rule 28 of the City Code.

6

Per share impacts assume Brent oil prices 2016 $67/bbl; 2017 $75/bbl; 2018-2020 $90/bbl (all on a 2014 real terms basis) and completion of the Combination in early 2016. The statements that the Combination is expected to be accretive to cash flow from operations per share and to earnings per share, or that the effect on return on average capital employed is expected to be neutral in 2018, should not be construed as profit forecasts and are therefore not subject to the requirements of Rule 28 of the Code. Such statements should not be interpreted to mean that cash flow from operations and earnings per share, or income on a clean current cost of supply basis, in any future financial period will necessarily match or be greater than those for the relevant preceding financial period.

7

8

9

10

11

12

13

14

15

___________________

16

17

18

19

20

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Shell confirms its intention to pay dividends of $1.88 per ordinary share in 2015 and at least that amount in 2016.

22

____________________

23

24

__________________

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

 

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43

 

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Part B: Waiver and Invocation of the Pre-Conditions and Conditions

Shell reserves the right to waive, in whole or in part, all or any of the Pre-Conditions in Appendix 1 of this Announcement or the Conditions in Part A above, except for Conditions (a) (Scheme approval), (l) (Shell Shareholder approval), (m) (UK listing), (n) (Euronext Amsterdam listing) and (o) (SEC registration), which cannot be waived.

Conditions (l) (Shell Shareholder approval), (m) (UK listing), (n) (Euronext Amsterdam listing) and (o) (SEC registration), must be fulfilled by, and the Pre-Conditions and Conditions (b) to (k) (inclusive) and (p) to (u) (inclusive) fulfilled or waived by, no later than 11.59pm on the date immediately preceding the date of the Scheme Court Hearing, failing which the Scheme will lapse.  Shell shall be under no obligation to waive or treat as satisfied any of the Pre-Conditions or Conditions which are capable of waiver by a date earlier than the latest date specified above for the fulfilment or waiver thereof, notwithstanding that the other Pre-Conditions or Conditions to the Combination may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Pre-Conditions or Conditions may not be capable of fulfilment.

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If Shell is required by the Panel to make an offer for BG Shares under the provisions of Rule 9 of the City Code, Shell may make such alterations to any of the above Conditions as are necessary to comply with the provisions of that Rule.

If the Pre-Condition set out in paragraph (a) (European Commission clearance) of Appendix 1 is waived, the Scheme or Offer (as applicable) will lapse if: (i) after the point at which the Pre-Condition is waived, the European Commission either initiates Phase 2 proceedings in respect of the Combination before the Court Meeting and the BG General Meeting; or (ii) it makes a referral to a competent authority of the United Kingdom under Article 9(1) of the Regulation and, after the point at which the Pre-Condition is waived, the CMA then initiates a Phase 2 reference in respect of the Combination.

Part C:  Implementation by way of Offer

Shell reserves the right (with the consent of the Panel) to implement the Combination by way of an Offer: (i) with the consent of the BG Board; (ii) if a third party announces a firm intention to make an offer for BG which is recommended by the BG Board; or (iii) if the BG Board otherwise withdraws its recommendation of the Combination. If the Combination is implemented by way of an Offer, the consent of the Dutch Revenue Service to the issue of Shell B Shares described in paragraph 13 would cease to be in force and the share component of the Consideration would comprise Shell A Shares only. BG Shareholders would in such circumstances (if Shell is permitted to exercise its right to implement the Combination by way of an Offer) be entitled to receive 383 pence in cash and 0.4454 Shell A Shares per BG Share. In such event, such Offer will be implemented on the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments to reflect the change in method of effecting the Combination, including: (a) the offer of Shell A Shares alone in respect of the share component of the Consideration (as described in paragraph 13 of this Announcement); and (b) (without limitation and subject to the consent of the Panel) an acceptance condition that is set at 90% (or such lesser percentage, as Shell may, in accordance with the provisions of the Co-operation Agreement, decide) (i) in nominal value of the shares to which such Offer relates; and (ii) of the voting rights attached to those shares, and that is subject to Shell and/or (with the consent of the Panel) any members of the Shell Group having acquired or agreed to acquire, whether pursuant to the Combination or otherwise, shares carrying more than 50% of the voting rights normally exercisable at a general meeting of BG, including, for this purpose, any such voting rights attaching to BG Shares that are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise.

The Combination will be governed by English law and be subject to the jurisdiction of the English courts, to the conditions set out below and in the formal Scheme Document and related form of election.  The Combination will comply with the applicable rules and regulations of the FCA and the London Stock Exchange and the City Code.

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Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

Fractions of New Shell Shares will not be allotted to BG Shareholders but will be aggregated and sold as soon as practicable after the Scheme becomes effective. The net proceeds of such sale will then be paid in cash to the relevant BG Shareholders in accordance with their fractional entitlements. Individual entitlements, however, to amounts of less than £5 will not be paid but will be retained for the benefit of Shell.

The New Shell Shares, which will be issued in connection with the Combination, have not been and will not be registered under any of the relevant securities laws of Canada, Japan or Australia and no regulatory clearance in respect of the New Shell Shares has been, or will be, applied for in any jurisdiction other than the UK, the Netherlands and, if applicable, the US. The New Shell Shares may not be offered, sold or delivered, directly or indirectly, in Canada, Japan or Australia except pursuant to exemptions from applicable requirements of any such jurisdiction.

The New Shell Shares will be issued credited as fully paid and will rank pari passu in all respects with Shell shares in issue at the time the New Shell Shares are issued pursuant to the Combination, including the right to receive and retain dividends and other distributions declared, made or paid by reference to a record date falling after the Effective Date.  Applications will be made to the UK Listing Authority for the New Shell Shares to be admitted to the Official List with a premium listing and to the London Stock Exchange for the New Shell Shares to be admitted to trading.  Application will also be made for admission to listing and trading of the New Shell Shares on Euronext Amsterdam.

BG Shares which will be acquired under the Combination will be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now or hereafter attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this Announcement other than (i) the final dividend in respect of the year ended 31 December 2014 of 14.37 cents (9.52 pence) per BG Share which has already been announced by BG; (ii) any interim dividend in respect of the six month period up to 30 June 2015 of not more than 14.38 cents per BG Share; and (iii) if completion of the Combination occurs after the record date for Shell’s 2015 fourth quarter interim dividend, a further BG dividend in respect of 2015 of not more than 14.37 cents per BG Share to which BG Shareholders would be entitled.

If any BG dividend, distribution or return of value is declared, announced, made or paid at any time in excess of those described above, Shell reserves the right to reduce the value implied under the terms of the Combination at such date by an amount equal to the excess amount (based on the $/£ exchange rate at the time of such declaration, announcement, making or payment). In such circumstances, to the extent possible, the cash component of the Consideration would be reduced by the amount of such excess.

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APPENDIX 3

SOURCES OF INFORMATION AND BASES OF CALCULATION

In this Announcement:

 

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APPENDIX 4

DETAILS OF IRREVOCABLE UNDERTAKINGS

 

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APPENDIX 5

QUANTIFIED FINANCIAL BENEFITS STATEMENT

Part A

Paragraph 6 of this Announcement (Synergy potential of the Combination) contains statements of estimated cost savings and synergies arising from the Combination (together, the “Quantified Financial Benefits Statement”).

A copy of the Quantified Financial Benefits Statement is set out below:

“Shell and BG have a good portfolio and country fit which offer synergy potential in a number of areas.

Shell is confident that, as a direct result of the Combination, the Combined Group could generate attractive synergies and create additional shareholder value. Shell has identified pre-tax synergies that are expected to reach $2.5 billion per annum in 2018, comprising $1 billion of operating cost savings and a $1.5 billion reduction in exploration expenditure. As reported below, Shell is also confident of realising additional synergies that cannot be quantified for reporting under the City Code at this time.

The potential sources of quantified cost savings, which are in addition to savings previously targeted by Shell and BG separately, include savings from:

·	corporate, administrative, organisational and IT operational efficiencies;

·	efficiencies in marketing and shipping costs;

·	efficiencies in operated procurement spend; and

·	the reduction in exploration expenditure enabled by high-grading and optimisation of the combined exploration portfolio.

These savings would be incremental to any savings already planned by Shell.

The cost savings referred to in the first two bullets above are expected to be recurring.

Shell estimates that the implementation of the operating cost savings would give rise to one-off costs of approximately $980 million incurred in the first three years post completion to the end of 2018, of which approximately 65% would be incurred in 2016 and 30% in 2017.  No material costs are expected to arise in relation to the implementation of the reduction in exploration expenditure.”

In identifying these synergies, the Shell Directors have formulated the following bases of belief:

·

Corporate, administrative, organisational and IT operational efficiencies: $870 million from the de-duplication of overlapping back office and business support functions, the elimination of overlapping support costs, office consolidation, the migration of BG onto Shell IT systems, and removal of duplicative corporate costs;

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·	Efficiencies in operated procurement spend ($90 million), and marketing and shipping costs ($50 million): $140 million from economies of scale in addressable operating, capital and raw material cost areas and optimisation of shipping and marketing; and

·	Reduction in exploration expenditure: $1.5 billion from the reduction in exploration expenditure enabled by high-grading and optimisation of the combined exploration portfolio.

The Shell Directors expect that these synergies would be delivered progressively, and anticipate that 50% on a run rate basis would be achieved by the end of 2016, 80% by the end of 2017, and the full run-rate in 2018.

Aside from the one-off costs referred to in the statement above, the Shell Directors do not expect any material dis-synergies to arise in connection with the Combination.

In preparing the Quantified Financial Benefits Statement, BG has provided Shell with certain operating and financial information to facilitate a detailed analysis in support of evaluating the potential synergies available from the Combination. In circumstances where data has been limited for commercial or other reasons, the team has made estimates and assumptions to aid its development of individual synergy initiatives.

The cost base used as the basis for the quantified exercise is that contained in BG’s 2014 Annual Report and Accounts.

The assessment and quantification of the potential synergies have in turn been informed by Shell management’s industry experience as well as their experience of executing and integrating past acquisitions.

In arriving at the estimate of synergies set out in this Announcement, following discussions with BG, the Shell Directors made the following operational assumptions:

·	as regards headcount, Shell has assumed salary levels proportional to Shell’s own salaries by grade, aligned to BG reported employee expenditure;

·

as regards IT costs, Shell anticipates transitioning BG support function activities (such as Finance, HR etc.) onto Shell’s existing systems and legacy BG support function systems will cease to be used. Project IT, infrastructure and certain enterprise resource planning systems are assumed to be at least partially integrated into Shell;

·	as regards synergies targeting procurement expenditure for operating assets, these are based on scale reductions in operating and capital expenditure forecasts informed by third party analysts data;

·	as regards synergies targeting shipping and marketing, these are based on scale efficiencies across global marketing and shipping operations of the Combined Group; and

·	the targeted operating cost savings synergies assume inflation at 2% per annum; exploration expenditure savings do not include inflation.

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The Shell Directors have, in addition, assumed that:

·	the Combination will be completed in the first quarter of 2016 for these purposes;

·	following completion of the transaction, Shell will own 100% of the ordinary share capital of BG;

·	there will be no significant impact on the underlying operations of either company or their ability to continue to conduct their businesses;

·	there will be no material change to macroeconomic, political or legal conditions in the markets or regions in which Shell and BG operate that materially impact on the implementation or costs to achieve the proposed cost savings;

·	there will be no material change in current foreign exchange rates; and

·	there will be no change in tax legislation or tax rates in the countries in which Shell and BG operate that could materially impact the ability to achieve any benefits.

The Shell Directors consider that the expected benefits will accrue as a direct result of the Combination and could not be achieved independently of the Combination.

As required by Rule 28.1(a) of the City Code, Deloitte LLP, as reporting accountants to Shell, and Bank of America Merrill Lynch, financial adviser to Shell, have provided the opinions required under that Rule. Each of Deloitte LLP and Bank of America Merrill Lynch has given and has not withdrawn its consent to the publication of its report in the form and context in which it is included.

Notes:

1.	The statements of estimated synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the synergies referred to may not be achieved, or may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated.
2.	Due to the scale of the Combined Group, there may be additional changes to the Combined Group’s operations. As a result, and given the fact that the changes relate to the future, the resulting synergies may be materially greater or less than those estimated.
3.	No statement should be construed as a profit forecast or interpreted to mean that the combined group’s earnings in the first full year following implementation of the Combination, or in any subsequent period, would necessarily match or be greater than or be less than those of Shell and/or BG for the relevant preceding financial period or any other period.

 

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Part B

Report from Deloitte LLP

8 April 2015

Dear Sirs

FIRM INTENTION TO MAKE AN OFFER FOR BG GROUP PLC (THE “TARGET”) BY ROYAL DUTCH SHELL PLC (“SHELL”)

We report on the statement made by the directors of Shell (the “Directors”) of synergy benefits set out in Part A of Appendix 5 to the announcement (the “Announcement”) issued by Shell (the “Quantified Financial Benefits Statement” or “the Statement”). The Statement has been made in the context of the disclosures within Part A of Appendix 5 setting out, inter alia, the basis of the Directors’ belief (identifying the principal assumptions and sources of information) supporting the Statement and their analysis, explanation and quantification of the constituent elements.

Responsibilities

It is the responsibility of the Directors to prepare the Statement in accordance with Rule 28 of the City Code on Takeovers and Mergers (the “City Code”).

It is our responsibility to form our opinion, as required by Rule 28.1(a) of the City Code, as to whether the Statement has been properly compiled on the basis stated.

This report is given solely for the purposes of complying with Rule 28.1(a)(i) of the City Code and for no other purpose. Therefore to the fullest extent permitted by law we do not assume any other responsibility to any person for any loss suffered by any such person as a result of, arising out of, or in connection with this report or our statement consenting to its inclusion in the Announcement, which are required by Rule 28.1(a)(i) and Rule 23.3 of the City Code respectively.

Basis of opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom.

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Our work included considering whether the Statement has been accurately computed based upon the disclosed bases of belief (including the principal assumptions).  Whilst the bases of belief (and the principal assumptions) upon which the Statement is based are solely the responsibility of the Directors, we considered whether anything came to our attention to indicate that any of the bases of belief (or principal assumptions) adopted by the Directors which, in our opinion, are necessary for a proper understanding of the Statement have not been disclosed or if any basis of belief (or principal assumption) made by the Directors appears to us to be unrealistic.  Our work did not involve any independent examination of any of the financial or other information underlying the Statement.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Quantified Financial Benefits Statement has been properly compiled on the basis stated.

Since the Statement (and the principal assumptions on which it is based) relates to the future, the actual synergy benefits achieved are likely to be different from those anticipated in the Statement and the differences may be material.  Accordingly, we can express no opinion as to the achievability of the synergy benefits identified by the Directors in the Statement.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in jurisdictions outside the United Kingdom, including the United States of America, and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices. We therefore accept no responsibility and deny any liability to any person using this report in connection with an offering of securities who makes a claim on the basis they had acted in reliance on the protections afforded by United States of America law and regulation.

Opinion

In our opinion, based on the foregoing, the Quantified Financial Benefits Statement has been properly compiled on the basis stated.

Yours faithfully

Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom. Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities.  Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

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Part C

Report from Merrill Lynch International

8 April 2015

Dear Sirs,

Firm intention to make an offer for BG Group plc by Royal Dutch Shell plc (“Shell”)

We refer to the Quantified Financial Benefits Statement, the bases of belief thereof and the notes thereto (together, the “Statement”) as set out in Part A of Appendix 5 of this Announcement, for which the Board of Directors of Shell (the “Directors”) are solely responsible under Rule 28 of the City Code on Takeovers and Mergers (the “Code”).

We have discussed the Statement (including the assumptions and sources of information referred to therein), with the Directors and those officers and employees of Shell who developed the underlying plans. The Statement is subject to uncertainty as described in this Announcement and our work did not involve an independent examination of any of the financial or other information underlying the Statement.

We have relied upon the accuracy and completeness of all the financial and other information provided to us by, or on behalf of, Shell, or otherwise discussed with or reviewed by us, and we have assumed such accuracy and completeness for the purposes of providing this letter.

We do not express any opinion as to the achievability of the quantified financial benefits identified by the Directors.

We have also reviewed the work carried out by Deloitte LLP and have discussed with them the opinion set out in Part B of Appendix 5 of this Announcement addressed to yourselves and ourselves on this matter.

This letter is provided to you solely in connection with Rule 28.1(a)(ii) of the Code and for no other purpose. We accept no responsibility to Shell or its shareholders or any person other than the Directors in respect of the contents of this letter; no person other than the Directors can rely on the contents of this letter, and to the fullest extent permitted by law, we exclude all liability (whether in contract, tort or otherwise) to any other person, in respect of this letter, its results, or the work undertaken in connection with this letter, or any of the results that can be derived from this letter or any written or oral information provided in connection with this letter, and any such liability is expressly disclaimed except to the extent that such liability cannot be excluded by law.

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On the basis of the foregoing, we consider that the Statement, for which you as the Directors are solely responsible, has been prepared with due care and consideration.

Yours faithfully,

Merrill Lynch International

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APPENDIX 6

DEFINITIONS

“ACCC”	Australian Competition and Consumer Commission
“Announcement”	this Announcement made pursuant to Rule 2.7 of the City Code
“Anti-Monopoly Law”	the Anti-Monopoly Law of the People’s Republic of China
“Authorisations”	for the purposes of the Conditions, means authorisations, orders, grants, recognitions, determinations, confirmations, consents, licences, clearances, permissions, exemptions and approvals
“Bank of America Merrill Lynch”	Merrill Lynch International, a subsidiary of Bank of America Corporation
“BG”	BG Group plc, incorporated in England and Wales with registered number 03690065
“BG ADRs”	American Depositary Receipts, each evidencing a BG American Depositary Share, which represents one BG Share
“BG Board”	the BG Directors collectively
“BG Depositary”	the depositary from time to time for the BG ADRs pursuant to a deposit agreement between it, BG and the holders and beneficial owners of BG ADRs
“BG Directors”	the directors of BG as at the date of this Announcement or, where the context so requires, the directors of BG from time to time
“BG General Meeting”	the general meeting of BG Shareholders to be convened to consider and if thought fit pass, inter alia, a special resolution in relation to the Combination
“BG Group”	BG and its Subsidiaries and subsidiary undertakings
“BG Meetings”	the Court Meeting and the BG General Meeting
“BG Shareholders”	the holders of BG Shares
“BG Share Plans”	the BG Long-Term Incentive Plan 2008 (including the BG Deferred Bonus Plan 2008 and the BG Voluntary Bonus Deferral Plan), the BG Sharesave Plan 2008, the BG Company Share Option Scheme, the BG Share Award Plan, the BG Share Incentive Plan 2008 and the BG Global Partnership Plan

“BG Shares”	BG ordinary shares of 10 pence each
“boe(pd)”	barrels of oil equivalent (per day)
“Break Payment Event”	as defined in paragraph 17 of this Announcement
“Business Day”	a day (other than a Saturday, Sunday, public or bank holiday) on which banks are generally open for business in London, other than solely for trading and settlement in Euro
“CADE”	Brazil’s Council for Economic Defence
“CCS”	current cost of supply
“Circular”	the circular to be sent by Shell to Shell Shareholders summarising the background to and reasons for the Combination which will include a notice convening the Shell General Meeting
“City Code”	the City Code on Takeovers and Mergers
“Closing Price”	the closing middle market quotations of a share derived from the Daily Official List of the London Stock Exchange
“CMA”	UK Competition and Markets Authority
“Combination”	the proposed acquisition of the entire issued and to be issued share capital of BG by Shell, to be effected by the Scheme as described in this document (or by the Offer under certain circumstances described in this document)
“Combined Group”	the enlarged group following the Combination, comprising the Shell Group and the BG Group
“Conditions”	the conditions to the implementation of the Combination set out in Part A of Appendix 2 to this Announcement and to be set out in the Scheme Document
“Consideration”	the consideration payable to BG Shareholders in connection with the Combination comprising a cash component of 383 pence per BG Share and a share component of 0.4454 New Shell Shares per BG Share
“Co-operation Agreement”	the agreement dated 8 April 2015 between Shell and BG and relating, among other things, to the implementation of the Combination

“Court”	the High Court of Justice in England and Wales
“Court Meeting”	the meeting of the BG Shareholders to be convened by order of the Court pursuant to section 896 of the Companies Act 2006 for the purpose of considering and, if thought fit, approving the Scheme (with or without amendment) and any adjournment, postponement or reconvention thereof
“CREST”	the relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755)) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in the Regulations)
“Deloitte LLP”	Deloitte LLP, the United Kingdom member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, whose member firms are legally separate and independent entities
“Disclosed”	the information fairly disclosed by, or on behalf of BG: (i) in the Annual Report and Accounts of the BG Group for the financial year ended 31 December 2014; (ii) in this Announcement; (iii) in any other public announcement made by BG in accordance with the Listing Rules, Disclosure Rules or Transparency Rules after 31 December 2014; or (iv) as disclosed in writing prior to the date of this Announcement by or on behalf of BG to Shell (or its respective officers, employees, agents or advisers in their capacity as such)
“Dutch Revenue Service”	the Dutch Revenue Service (Belastingdienst), a unit governed by the Dutch Ministry of Finance (Ministerie van Financiën) competent to impose and collect Dutch income tax (inkomstenbelasting), Dutch corporate income tax (vennootschapsbelasting) and miscellaneous other Dutch taxes
“Effective Date”	the date on which:   (a)            the Scheme becomes effective in accordance with its terms; or   (b)            if Shell elects to implement the Combination by way of an Offer, the date the Offer becomes or is declared unconditional in all respects
“EFTA”	the European Free Trade Association

“EU” or “European Union”	an economic and political union of 28 member states which are located primarily in Europe
“Euronext Amsterdam”	Euronext in Amsterdam, a regulated market of Euronext Amsterdam N.V.
“FATA”	the Australian Foreign Acquisitions and Takeovers Act 1975 (Cth)
“FCA”	the Financial Conduct Authority
“kboe(pd)”	thousand barrels of oil equivalent (per day)
“Listing Rules”	the rules and regulations made by the FCA pursuant to Part 6 of the Financial Services and Markets Act 2000 and contained in the FCA’s publication of the same name
“LNG”	liquefied natural gas
“London Stock Exchange”	London Stock Exchange plc
“Long Stop Date”	31 July 2016 or such later date as may be agreed in writing by BG and Shell (with the Panel’s consent and as the Court may approve (if such approval is required))
“mboe”	million barrels of oil equivalent
“Mix and Match Facility”	the mix and match facility under which BG Shareholders may, subject to countervailing elections made by other BG Shareholders, elect to vary the proportion of New Shell Shares and cash received under the terms of the Combination
“MOFCOM”	the Ministry of Commerce of the People’s Republic of China
“mtpa”	million tonnes per annum
“New Shell Shares”	the Shell B Shares to be issued and, subject to a valid election to that effect by a BG Shareholder (or if it is no longer possible to issue Shell B Shares and subject to paragraphs 13, 17 and 27 of this Announcement and the provisions of the Co-operation Agreement) the Shell A Shares to be issued pursuant to the Combination
“Offer”	should the Combination be implemented by way of a takeover offer as defined in Chapter 3 of Part 28 of the Companies Act 2006 in the circumstances described in this Announcement, the offer to be made by or on behalf of Shell to acquire the entire issued and to be issued share capital of BG and, where the context admits, any subsequent revision, variation, extension or renewal of such offer

“Offer Document”	should the Combination be implemented by means of the Offer, the document to be sent to BG Shareholders which will contain, inter alia, the terms and conditions of the Offer
“Offer Period”	the period commencing on 7 April 2015 and ending on: (i) the earlier of the date on which the Scheme becomes effective and/or the date on which the Scheme lapses or is withdrawn (or such other date as the Panel may decide); or (ii) the earlier of the date on which the Offer has become or has been declared unconditional as to acceptances and/or the date on which the Offer lapses or is withdrawn (or such other date as the Panel may decide), in each case other than where such lapsing or withdrawal is a result of Shell exercising its right to implement the Combination by way of an Offer or a Scheme (as appropriate)
“Official List”	the official list maintained by the UK Listing Authority
“Opening Position Disclosure”	an announcement containing details of interests or short positions in, or rights to subscribe for, any relevant securities of a party to the offer if the person concerned has such a position
“Overseas Shareholders”	Scheme Shareholders who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom
“Panel”	the Panel on Takeovers and Mergers
“Pre-Conditions”	the pre-conditions to the Combination, as set out in Appendix 1 to this Announcement
“PRMS”	Petroleum Resources Management System
“Prospectus”	the prospectus document to be published by Shell at the same time as the Scheme Document in respect of the New Shell Shares to be issued to BG Shareholders in connection with the Combination and for the purpose of admission of the New Shell Shares to the Official List and to Euronext Amsterdam
“Quantified Financial Benefits Statement”	as defined in Part A of Appendix 5 to this Announcement

“Regulation”	Council Regulation (EC) 139/2004 (as amended)
“Regulatory Conditions”	the Conditions set out in paragraphs (b) to (k) (inclusive) of Part A of Appendix 2 (so far as, in the case of the Conditions set out in paragraphs (i), (j) and (k) of Part A of Appendix 2, the relevant Third Party under those Conditions is a Relevant Authority, as defined in the Co-operation Agreement)
“Restricted Jurisdiction”	any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Combination is sent or made available to BG Shareholders in that jurisdiction
“Scheme”	the proposed scheme of arrangement under Part 26 of the Companies Act 2006 between BG and BG Shareholders to implement the Combination with or subject to any modification, addition or condition approved or imposed by the Court
“Scheme Court Hearing”	the hearing of the Court to sanction the Scheme under section 899 of the Companies Act 2006
“Scheme Court Order”	the order of the Court sanctioning the Scheme under section 899 of the Companies Act 2006
“Scheme Document”	the document to be dispatched to BG Shareholders including the particulars required by section 897 of the Companies Act 2006
“Scheme Record Time”	the time and date specified as such in the Scheme Document or such later time as BG and Shell may agree
“Scheme Shareholder”	holders of Scheme Shares
“Scheme Shares”	1.    the BG Shares in issue at the date of the Scheme Document;   2.    any BG Shares issued after the date of the Scheme Document and prior to the Voting Record Time; and   3.    any BG Shares issued at or after the Voting Record Time and prior to the Scheme Record Time in respect      of which the original or any subsequent holder thereof is bound by the Scheme, or shall by such time have      agreed in writing to be bound by the Scheme,   in each case excluding any BG Shares held in treasury

“SEC”	the US Securities and Exchange Commission
“Shell”	Royal Dutch Shell plc, incorporated in England and Wales with registered number 04366849
“Shell A Shares”	Shell A ordinary shares of €0.07 each
“Shell B Shares”	Shell B ordinary shares of €0.07 each
“Shell Board”	the Shell Directors collectively
“Shell Directors”	the directors of Shell as at the date of this Announcement or, where the context so requires, the directors of Shell from time to time
“Shell General Meeting”	the general meeting of Shell to be convened in connection with the Combination, notice of which will be sent to the Shell Shareholders, including any adjournment thereof
“Shell Group”	Shell and its Subsidiaries and subsidiary undertakings
“Shell Resolutions”	the ordinary shareholder resolutions of Shell to approve, effect and implement the Combination and to grant authority to the Shell Directors to allot the New Shell Shares
“Shell Shareholders”	holders of Shell A Shares or Shell B Shares
“Shell Transport”	The Shell Transport and Trading Company Limited
“Subsidiary”	has the meaning given in section 1159 of the Companies Act 2006
“subsidiary undertaking”	has the meaning given in section 1162 of the Companies Act 2006
“UK” or “United Kingdom”	the United Kingdom of Great Britain and Northern Ireland
“UK Listing Authority”	the FCA acting in its capacity as the authority for listing in the UK
“US” or “United States”	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia
“US Exchange Act”	the US Securities Exchange Act of 1934, as amended

“US Securities Act”	the US Securities Act of 1933, as amended
“Voting Record Time”	6.00 p.m. on the day which is two days prior to the date of the Court Meeting or any adjournment thereof (as the case may be)
“Wider BG Group”	has the meaning given in Appendix 2
“Wider Shell Group”	has the meaning given in Appendix 2

All times referred to are London time unless otherwise stated.

All references to “GBP”, “pence”, “sterling” or “£” are to the lawful currency of the United Kingdom.

All references to “Euro” or “€” are to the lawful currency of the European Union.

All references to “US dollar”, “USD”, “US$” or “cents”, are to the lawful currency of the United States.

All references to statutory provision or law or to any order or regulation shall be construed as a reference to that provision, law, order or regulation as extended, modified, replaced or re-enacted from time to time and all statutory instruments, regulations and orders from time to time made thereunder or deriving validity therefrom.