Nomination & Remuneration Committee Charter
Purpose
The primary objective of the Nomination & Remuneration Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company is to assist with recommending candidates for nomination or re-nomination to the Board;
recommending remuneration policy and individual remuneration packages for Board members, Committee members and Executive Management; and various matters related to performance evaluation of the Board, Company’s Committees and Executive Management.
The purpose of the Nomination and Remuneration Committee Charter (the "Charter") is to set out the composition, responsibilities and duties of the Committee and identify the Committee's interaction with the Shareholders, Board of Directors and management, in line with the Company’s Bylaw and related laws and regulations.
The Committee is formed by the Board of Directors with the following key objectives:
Nomination
• To suggest policy and criteria for membership of the Board and management Executives.
• To recommend to the Board on candidates for nomination or re-nomination to the Board and Company’s Committees.
• To assess various matters related to nomination and performance of the Board, its Committees and Executive Management, and provide recommendations to the Board.
• Review Board of Directors succession plans.
• Recruitment, retention, and termination policies for Executive Management.
Remuneration
• To recommend to the Board the remuneration policy for the Board members and its committees and the Executive Management.
• To recommend individual remuneration packages for Board members and its committees and the Executive Management in accordance with the established policy.
• To highlight any material deviations from the established policy, and periodically review the policy.
NRC reports directly to the Board of Directors through its Chairman. NRC is considered a Board’s Committee and is responsible towards the Board of Directors for its activities; this shall not relieve the Board of its responsibility for such activities, duties and powers that it has delegated to such committee.
Appointment, Composition and Qualification
The Committee shall be comprised of not less than three members and not exceed five members all of them are non- executive and at least include one Independent Board member. The committee chairman shall be an Independent Director. Executive Directors are not eligible for Committee membership.
• Members shall have an appropriate level of understanding of:
➢ Principles of corporate governance;
➢ The Company’s businesses and the organizational structure; and
➢ The functions of the Board of Directors and the various roles and responsibilities of directors and other key executive positions.
The membership of a Committee member, if he is a Board Director, shall come to an end at the expiry of his membership of the Board of Directors or by his voluntary resignation from Committee membership. Membership will expire for members from outside the Board by way of his/her resignation or at the end of the Committee’s term.
Committee members may be removed or replaced by the Board of Directors in the event that any of them violates the provisions of this charter or for any reasons that the Board deems appropriate, provided that the decision is taken by the majority of its attended members. The member also has the right to resign from the committee, provided that this is at a suitable time accepted by the Board of Directors, after the resignation is approved by the Committee Chairman.
If the position of a member of the Nomination and Remuneration Committee becomes vacant during the term of membership, the Board shall appoint another member to the vacant position and the new member shall complete the term of his predecessor.
Appointment procedures:
When appointing members of the Nomination and Remuneration Committee, the following procedures shall be followed:
1. The Board of Directors shall nominate, evaluate and select members of the Nomination and Remuneration Committee who possess the necessary skills, individually or collectively, to be appointed as members of the Committee.
2. In the event that the committee members do not have the required skills, coordination with the human resources department in the company is required, in order to identify suitable candidates (from inside or outside the board) who have the necessary skills.
Membership Duration:
Members of the Committee shall be appointed by the Board of Directors for a term coinciding with the term of the Board of Directors.
If any member is appointed during the term of office of the committee, the term of his membership shall coincide with the term of office of the committee unless he is appointed for a shorter term. The members of the committee may be reappointed again after the expiry of the committee’s term of office, by following the appointment procedures in this charter.
Membership Termination:
1. NRC membership may be terminated by a BOD decision in the following cases:
• The committee member's failure to fulfill any of the requirements / responsibilities due to him, or his failure to meet the terms of appointment.
• Loss of legal capacity.
2. According to the powers granted to the Board, the Board may accept the resignation of any member of the Committee.
Appointment of the committee chairman
Members shall elect a chairman amongst themselves, unless he is designated by the Board. The chairman shall be an Independent Director. The Board Chairman is not eligible to be a Chairman of NRC.
Duties of the Chairman of the Committee
1. Supervising the work of the committee and holding its meetings efficiently.
2. Cooperating with members to set and approve the meeting agenda and to invite all members to meetings on a date and place designated for committee meetings.
3. Ensuring that all items that require approval by the committee are submitted or that the committee's recommendations are submitted to the council.
4. Ensuring that all issues before the committee are accompanied by sufficient i nformation to enable the committee to take decisions on them.
5. Verifying that the advisory bodies enjoy complete independence in addition to their appropriate qualification.
6. Ensuring that the Committee has direct access to senior management as may be required by the Board.
7. Representing the Committee before the Council, the General Assembly or any other party to discuss the relevant issues therein.
8. Representing the Committee on important issues to ensure the ability of the Internal Audit Department to carry out its tas ks and responsibilities.
9. Informing the members of the Committee of the procedures and decisions taken to address relevant urgent matters .
10. Approving and signing employment agreements and / or executive service agreements and incentive plans for senior executives, as approved by the Board.
11. The Chairmen or whom they delegate of each committee members, shall attend the General Assembly Meetings and answer questions raised by the shareholders.
Appointment of the Secretary of the Nomination and Remuneration Committee:
Members may elect a secretary of the Committee amongst themselves or others
from the company’s team or through a third party, to be responsible for preparing for the committee’s meetings, preparing records and documents, and following up and facilitating/implementing its recommendations, decisions and action plans. His term of office shall be the same as that of th e committee, unless he was appointed for a shorter period of time, and he may be reappointed again after the expiry of his original term of appointment.
Duties of the Secretary of the Nomination and Remuneration Committee :
1. Ensuring the smooth running of the committee's activities.
2. Acting as the main point of contact and a source of information, and to provide advice and guidance to members of the Committee regarding the activities of the company, in order to support the decision -making process.
3. Maintaining and managing the committee’s bylaw and ensuring its adequacy to meet changes in the company’s business and regulatory requirements, and identifying any required bylaw changes for consideration.
4. Preparing correspondence letters when arranging with the committee chairman as needed, and directing them to committee members, the board of directors and related parties. This includes making the required contacts to schedule/call for committee meetings.
5. Preparing the information needed by the committee members during their meetings.
6. Assisting the committee chairman in preparing the committee's meeting agendas and circulating them to committee members, at least one week before the meeting date.
7. Inviting the relevant parties, including advisory bodies, legal advisors, or any other party, to the committee's meetings.
8. Preparing the minutes of the meeting and circulating it to all members of the committee for approval within five (5) workin g days. The Secretary shall send the minutes of the meeting within two/three working days in cases that require rapid completion as determined by the Chairman of the Committee, and the minutes of the meeting shall include the following:
• Date and number of the meeting
• Meeting place
• Names of attendees and agents (authorized to attend on behalf of members)
• A statement of the reasons for the absence of persons not present at the meeting
• Topics raised and discussions
• All decisions taken and recommendations made
• The reservations made by the members present on any of the decisions or recommendations issued by the committee
9. The Nomination and Remunerations Committee shall express its views on the minutes of the meetings which are sent by the Secretary of the Committee within seven to ten working days from the date of the meeting. In the event that the Secretary of the Committee does not receive any observations or visions within ten working days of receiving the draft minutes, it shall be considered as an acknowledgment of approval. All the topics discussed and the committee’s decisions are recorded in the minutes of the meetings.
10. The final minutes are approved and signed by the chairman and members of the committee and the secretary.
11. Keeping the final, signed copy of the minutes attached to the relevant documents and correspondence in a special file.
12. Documenting and updating the work plans proposed by the committee, with defining the responsibilities, the responsible person and the target date for implementation, in order to facilitate the tracking of issues that are not closed and related to the decisions of the committee.
13. Circulating the decisions/minutes of the committee to the concerned authorities.
14. Following up on the issues that are not closed and the topics that will be presented to the committee.
15. Informing the committee chairman of any obstacles that prevent the committee's work, including any delay in implementing its decisions and recommendations.
16. Sending all minutes of the committee's meetings to the Board of Directors through the Secretary of the Board of Directors.
17. Commitment to maintain the confidentiality of information and not to share what is going on in meetings with the administration or any other party.
Meetings and Quorum
The Committee shall meet at least two times per annum, provided that the committee convened periodically every six months, or more frequently as required. Each meeting of the committee should be followed by submitting a detailed report on the results of the meeting to the Board. Meetings may be either in person or remotely using modern technology such as video calls and others.
The Committee shall also meet if requested by Committee Chairman, two Committee members or the Board Chairman.
Committee meetings shall be documented and minutes including the discussions and deliberations carried during such meetings shall be prepared. Recommendations of the committees and voting results shall be documented and retained in a special and organised register, including the names of the attendees and any reservations they expressed (if any).
Such minutes shall be signed by all of the attending members.
The Committee Secretary shall prepare an agenda for each meeting in consultation with the Committee Chairman and Committee members. The agenda shall be distributed to all members at least five days in advance of the meeting.
A quorum at any Committee meeting shall consist of a majority of the Nomination and Remuneration Committee members. If the Chairman is absent, the members in attendance will elect a temporary Chairman amongst themselves during the meeting.
All Committee resolutions shall be passed by majority of votes of the attendees, whether the decisions were in attendance and included in the minutes of the meetings or by passing. Each member of the Committee shall have one vote. The Chairman’s vote shall be the tie breaker (i.e. if votes on a particular decision are equal in number, the Chairman shall have one extra vote which will be the deciding vote). Dissenting members will not be liable if they have expressly recorded their objection to the resolution in the minutes of meeting that adopted it. Absence or leaving in the middle of meeting does not constitute cause for relief from liability unless it is established that the member was not aware of the resolution.
No member of the Board or the Executive Management except the secretary or a member of the committee may attend the meetings of a committee unless such committee requests his/her opinion or advice.
Responsibilities and Duties
With respect to nomination
1. Suggesting clear policies and standards for membership of the Board and the Executive Management;
2. Assisting the Board of Directors in identifying individuals qualified to become Board of Directors’ members and recommending to the Board of Directors the nominees to stand for election as Directors at the annual Shareholders’
General Assembly Meeting in accordance with approved policies and standards, however the Committee shall ensure that no person who has been previously convicted of any offense affecting honor or honesty is nominated for Board membership;
3. Assisting the Board of Directors in selecting, developing and evaluating potential candidates for Executive Management positions, and overseeing the development of Executive Management succession plans;
4. Providing job descriptions for the Executive, Non-Executive and Independent Directors and the Executive Management; and the capabilities and qualifications required;
5. Setting procedures to be followed if the position of a member of the Board or Executive Management becomes vacant;
6. Reviewing the structure of the Board and Executive Management and providing recommendations regarding changes that may be made to such structure;
7. Reviewing the composition of each committee and recommending to the Board the individuals to serve as members of each committee;
8. Developing and recommending to the Board of Directors for its approval, an annual performance assessment process for the Board of Directors, its members, Company’s Committees and Executive Management. The performance assessment shall be led by NRC, and the Committee may consider the need for any external consultants; and
9. Ensuring on an annual basis the independence of the independent members and the absence of any conflict of interest.
With respect to remuneration
1. Preparing clear policies regarding the indemnities and remunerations of the Board members, Company’s Committees and the top Executives, and presenting such policies to the Board in preparation for approval by the General Assembly, provided that such policy follows standards that linked to performance, and disclosing and ensuring the implementation of such policy;
2. Directly being responsible to recommend the form and amount of remunerations for Board members, members of the Committees and Executive Management, in accordance with the approved policy. In discharging this
responsibility, the Committee shall seek to attract, motivate, reward and retain individuals of high integrity and superior ability who are focused on enhancing long-term shareholder value;
3. Providing recommendations to the Board in respect of the remunerations of its members, members of the committees and Executive Management, in accordance with the approved policy. The Committee shall present a compensation report to the Board of Directors annually for its approval;
4. Clarifying the relation between the paid remunerations and the adopted remuneration policy, and highlighting any material deviation from that policy; and
5. Periodically reviewing the remuneration policy and assessing its effectiveness in achieving its objectives.
Nomination of Board members
1. When nominating a Board member, the NRC shall take into consideration the requirements and provisions set by CMA, including CMA CGRs;
2. The Company shall publish the nomination announcement on its website, Exchange and through any other medium specified by CMA; to invite persons wishing to be nominated to the membership of the Board, provided that the nomination period shall remain open for at least a month from the date of the announcement;
3. The NRC shall nominate candidates who have a high level of required qualifications and experiences to enable them to make maximum contributions to support performance in shortest time, once elected; and
4. The number of nominees to the Board whose names are presented to the General Assembly shall be more than the number of available seats to give a chance to the General Assembly to select the Board members among those nominees.
Remuneration Policy
The guidelines for the remuneration of the Board of Directors, Board Committees and Executive Management are implemented in accordance with the remuneration policy approved by the Board of Directors and approved by the General Assembly. Without prejudice to the provisions of the Companies Law and the Capital Market Law, the remuneration policy shall:
1. be consistent with the Company's strategy and objectives;
2. provide remunerations with the aim of encouraging the Board members and Executive Management to achieve the success of the Company and its long-term development, by for example making the variable part of the remuneration linked to the long-term performance;
3. determine remuneration based on job level, duties and responsibilities, educational qualifications, practical experience, skills and level of performance;
4. be consistent with the magnitude, nature and level of risks faced by the Company;
5. take into consideration the practices of other companies in respect of the determination of remunerations, and avoid the disadvantages of such comparisons in leading to unjustifiable increases in remunerations and compensations;
6. attract talented professionals and retain and motivate them without exaggeration;
7. take into consideration situations where remunerations should be suspended or reclaimed if it is determined that such remunerations were set based on inaccurate information provided by a member of the Board or the Executive Management, in order to prevent abuse of power to obtain unmerited remunerations; and
8. organize the granting of company shares to members of the Board of Directors and Executive Management, whether newly issued or purchased by the company.
Resources and Authority
In order to fulfill its responsibilities set out in this Charter, the Committee is authorized by the Board to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company and the power to retain outside counsel, auditors or consultants.
The Committee may require any officer or employee of the Company or any of its subsidiaries, the Company’s outside legal counsel, and the Company’s external statutory auditors to meet with the Committee or any member of the Committee.
Reporting
At each meetingof Board of Directors meetings
The Committee, through its Chairman, must report to the Board of Directors, at the first meeting subsequent to each Committee meeting, regarding the actions of each Committee meeting, the results of the Committee’s reviews and approvals and any other applicable issues which need to be brought to the attention of the Board for its approval / and or action.
Annual Board Report
The Committee should provide the Board of Directors with advice and recommendations regarding the content and disclosures to be included in the corporate governance section of the Board’s annual report, including the Company’s remuneration policies and procedures, information on Directors and their remuneration, and performance of the Directors and Executive Management.
Remuneration
Having regard to the functions performed by the members of the Committee, in addition to their functions as members of the Board or committees formed by the Board, members of the Committee shall be paid additional remuneration in respect of their appointment as Nomination and Remunerations Committee members, it is determined in accordance with the policy of remunerations for members of the Board of Directors and its committees, which is approved by the General Assembly.
The Committee Chairman shall receive a further fee, in addition to his/her remuneration as a member based on Nomination and Remuneration Committee recommendation. The committee also proposes a remuneration to the secretary of the committee and it is approved by the Board of Directors.
Ownership and preservation of the document:
The Nomination and Remuneration Committee is responsible for the ownership and preservation of the charter; this is done in cooperation with the Secretary of the Committee, and through ensuring that the Committee’s charter is consistent with changes in the company’s business and regulatory requirements. The committee is also responsible for reviewing and reassessing the adequacy of the committee’s charter at least once every three years or earlier whenever needed, and the committee recommends any proposed changes to the Board of Directors for review and approval.
Adoption and Changes to the Charter
This charter must be approved by the General Assembly based on the recommendation of the Board of Directors.
Any changes to the Nomination and Remuneration Committee’s charter proposed by the Committee or the Board of Directors must be in line with the company’s internal regulations and rules. This charter shall be effective from the date of their approval by the Ordinary General Assembly.