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Proposed Amendments to the Company’s Bylaw
S Current Articles Articles after amendment
1 Article (7): The Company's Capital
The Company’s issued capital has been set with an amount of SAR (562,500,000) Five hundred sixty-two million and five hundred thousand, divided into (56,250,000) fifty-six million and two hundred fifty thousand shares of equal value, the nominal value of each is (10) ten riyals, all of which are ordinary shares.
Article (7): The Company's Capital
The Company’s issued capital has been set with an amount of SAR (562,500,000) Five hundred sixty-two million and five hundred thousand, divided into (1,125,000,000) one billion and one hundred twenty- five million shares of equal value, the nominal value of each is (50) Hallas, all of which are ordinary shares.
2 Article (8): Subscription to Shares
The shareholders have subscribed in all shares of the company’s issued capital amounted (56,250,000) share, fifty-six million and two hundred fifty thousand shares and they are fully paid.
Article (8): Subscription to Shares
The shareholders have subscribed to the entire shares of the company’s issued capital amounting to
(1,125,000,000) one billion and one hundred twenty- five million shares and they are fully paid.
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Proposed amendments to Audit Committee Charter
Current Article Article after amendment
1-Introduction 1-Introduction:
Audit Committee charter was prepared pursuant to GC regulations issued by the board of Directors of Capital Market Authority dated 13-2-2017, which states the Company’s General Assembly shall, upon a recommendation from the board , issue a regulation for Audit committee, which shall include the rules and procedures for the activities and the duties of the committee, the rules for selecting its members, the term of their membership , their remuneration and the method of appointing temporary member in the vacant position.
The Audit Committee Charter has been prepared to comply with the provisions of paragraph ( E) of Article (51) of GC regulations issued by the board of Directors of Capital Market Authority dated 13-2-2017 and amended by CMA board of Directors dated 18-01-2023 which sates the Company’s General Assembly shall, upon a recommendation from the board , issue a regulation for Audit committee, which shall include the rules and procedures for the activities and the duties of the committee, the rules for selecting its members, the term of their membership , their remuneration and the method of appointing temporary member in the vacant position.
2- Rules and Regulations for Membership of the Committee:
2- Rules and Regulations for Membership of the Committee:
1-The Audit Committee is formed by a resolution of the General Assembly based on a recommendation from the board in accordance with the provisions of the Companies Law.
2-The number of the Audit Committee shall not be less than three and not more than five members, provided that one of the members specializes in finance and accounting matters.
3-The Committee shall be formed from the independent and non - executive members, or from the shareholders or others, provided that it shall not include any of the Executive members or any of the Company’s Senior Executives.
4- Any person who has worked for the Company’s external Auditor during the preceding two years may not be a member of the Audit Committee. Also, the Chairman of the board may not be a member at the Committee.
5- The term of the committee is three years, starts with the board term and ends with it.
6-The Committee members shall select from among its members a chairman for the committee. The Audit Committee shall also select a Secretary from among its members or from others, he will be responsible for preparing the minutes of meetings and any administrative work related to the committee.
7- If the position of a Committee member becomes vacant during membership term، the board of directors shall appoint a new member in the vacant position. The
1-The Audit Committee shall be formed by a resolution of the board, and the members of the Audit Committee shall be from the shareholders or others, provided that no executive director is among its members.
2- The Audit Committee members shall be not less than three and not more than five members, provided that one of the members is specialized in finance and accounting and shall include at least one independent member.
3-Any person who works or has worked in the company’s Finance Dept, the Executive Management, or for the Company’s External Auditor during the preceding two years may not be a member of the Audit Committee. Also, the Chairman of the board may not be a member at the Committee.
4- A Member of the Audit Committee shall not be a member of audit committees of more than five listed companies at the same time.
5- The term of membership of the committee is four years, starts and expires with the term of the board of directors.
6-The board shall appoint one of its members as a chairman of the Committee, provided that he is an independent member.
7- The Committee shall select a secretary from among its members or from the company’s staff. He will be responsible for the preparation of the committee meetings, preparing the minutes of the meeting and
2 new member shall complete the term of the processor, provided that such appointment shall be presented to the nearest General Assembly meeting for endorsement.
any other administrative work related to Committee works.
3- Committee meeting, procedures and controls 3-Committee meetings, controls, and procedures 1-The committee shall meet periodically at least four
times per year, and as may be necessary.
2-The Committee shall meet upon invitation from the chairman, the meeting shall be valid only if attended by two members, and the resolutions shall be issued by the majority of the attendees. In case of tie up, the chairman shall have the casting vote.
3- The Secretary of the Committee prepares the minutes of meetings and the resolutions and shall follow up to get the signature of the members present at the meeting.
4- The Audit Committee will meet periodically with the External Auditor of the Company and the Internal Auditor.
5-The Committee may convene its meetings through means of modern technology
6-Only the Committee members are entitled to attend the meeting, however, the committee may invite any member from the executive management to listen to his opinion or obtain his advice.
1-The committee shall meet periodically at least four times during the Company’s financial year.
2-The Committee shall meet upon invitation from its chairman, the meeting shall be valid only if attended by two members.
3- The resolutions of the committee shall be issued by the majority of the attendees. In case of tie up, the chairman shall have a casting vote.
4-Secretary of the committee shall document the committee meetings, prepare the minutes which include the discussions and deliberations carried out during such meetings, recommendations of the Committee shall also be documented. Such minutes shall be signed by all of the attending members.
5-The Committee meeting may be held through means of modern technology.
6- Committee meetings shall be attended only by the members of the committee and the secretary; however, the committee may invite any member from the executive management to listen to his opinion or obtain his advice.
7-The Audit Committee will meet periodically with the external Auditor of the Company and the internal auditor.
8-The internal and external auditor may call for a meeting with the Audit committee at any time as may be necessary.
9-Chairman of the committee shall attend the General Assembly meetings to answer the shareholders questions, and he may delegate one of the committee members.
New Article 4- Expiry of Membership / Vacant position
1-Membership of the committee shall be terminated upon the expiry of its term, or by the resignation or death of the member, or failure to meet any of the requirements of membership in the committee, or if the member has been absent from attending three consecutive meetings during the term of his membership without a valid excuse.
2-The board may terminate or replace any of the committee members at any time which he deems appropriate. At the same time, the committee member may resign from his position at any time, provided that his resignation will be at a convenient time.
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3-If the position of the Committee member becomes vacant, the board shall appoint a new member in the vacant position, provided that he has experience and competence. The new member shall complete the term of his predecessor.
4-Competencies, powers, and Responsibilities of Audit Committee
5- Competencies, powers, and Responsibilities of the Committee
1-Analysing the company’s interim and annual financial statements before presenting them to the board and providing its opinion and recommendation thereon to ensure their integrity, fairness, and transparency.
2-Providing its technical opinion, at the request of the board, regarding whether the board’s report and the company’s financial statements are fair, balanced, and understandable.
3-Analysing any important or non-familiar issues contained in the financial reports.
4-Invistegaing any issues raised by the Company’s Chief Financial Officer or the external auditor.
5-Examining the accounting estimates in respect of significant matters that are contained in the financial reports.
6-Study the accounting policies followed by the Company and provide its opinion and recommendation to the board thereon.
7-Examining and reviewing the Company’s internal and financial control systems and risk management system.
8-Analazing the internal control reports and following up the implementation of the corrective measures.
9-Monitoring and overseeing the performance and activities of the internal auditor and internal audit department.
10- Recommend to the board on the appointment of the Internal audit manager.
11- Recommend to the board the nomination of the external auditors, dismiss them, determine their fees, and assess their performance after verifying their independence and reviewing the scope of their work and the terms of their contract.
12-Verifying the independence of the external auditor, its objectiveness, fairness, and effectiveness of the audit activities, taking into account the relevant rules and standards.
13- Reviewing the plan of the company’s external auditor and its activities, and ensuring that it does not provide any technical, administrative or consultancy work.
The audit committee shall be competent in monitoring the company’s activities and ensuring the integrity and effectiveness of the reports, financial statements, and internal control systems. The duties of the audit committee shall particularly include the following:
A) Financial Statements:
1-Analysing the company’s interim and annual financial statements before presenting the same to the board and providing its opinion and recommendation thereon to ensure their integrity, fairness, and transparency.
2-Providing its technical opinion, at the request of the board, regarding whether the board’s report and the company’s financial statements are fair, balanced, understandable, and contains the information that allows shareholders and investors to assess the company’s financial position, performance, business model and strategy.
3-Analyzing any important or non-familiar issues contained in the financial reports.
4-Investigate accurately any issues raised by the Company’s chief financial officer or any person assuming his duties or the Company’s compliance officer or the or the external auditor.
5-Examine the accounting estimates in respect of significant matters that are contained in the financial reports.
6-Study the accounting policies followed by the Company and provide its opinion and recommendation to the board thereon.
B) Internal Audit
1-Studying and reviewing the Company’s internal and financial control systems and risk management system.
2-Analazing the internal control reports and following up the implementation of the corrective measures in respect of the remarks made in such reports.
3-Monitoring and overseeing the performance and activities of the internal auditor and internal audit department to ensure the availability of the necessary resources and their effectiveness in performing the assigned activities and duties.
4- Recommend to the board the appointment of the Internal audit manager and suggest his remuneration.
4 14-Studying the external auditor’s reports and its comments on the financial statements and following up the procedures taken in connection therewith.
15- Ensuring the company’s compliance with the relevant laws, regulations, policies, and instructions.
16-Reviewing the findings reports of the supervisory authorities and ensuring that the company has taken the necessary action in connection therewith.
17-Reveiwng the contacts and the proposed related party transactions and providing its recommendation to the board in connection therewith.
18-Reporting to the board any issues in connection with it deems necessary to take action on and provide recommendations as to the steps that should be taken.
C) External Auditor
1-Recommend to the board the nomination of the external auditors, dismiss them, determine their fees, and assess their performance after verifying their independence and reviewing the scope of their work and the terms of their contract.
2-Verifying the independence of the external auditor, its objectiveness, fairness, and effectiveness of the audit activities, taking into account the relevant rules and standards.
3- Reviewing the plan of the external auditor and its activities, and ensuring that it does not provide any technical, administrative or advisory work that is beyond its scope of work and provides its opinion thereon.
4- Responding to the inquiries of the external auditor.
5-Studying the external auditor’s reports and his comments on the financial statements and following up the procedures taken in connection therewith.
D) Ensuring Compliance
1-Ensuring the company’s compliance with the relevant laws, regulations, policies, and instructions.
2-Reviewing the findings reports of the supervisory authorities and ensuring that the company has taken the necessary action in connection therewith.
3-Reveiwng the contacts and the proposed related party transactions and providing its recommendation to the board in connection therewith.
4-Reporting to the board any issues in connection with what it deems necessary to take action on and provide recommendations as to the steps that should be taken.
5-Conflict between the Audit Committee and the Board
Deleted Article
If a conflict arises between the recommendation of the audit committee and the board resolution, or the board refuses to accept the committee’s recommendation with regard to appointment or dismissal of the company’s external auditor or determining its fees, assessing its performance or appointing internal auditor, the board of directors’ report shall include the committee’s recommendations and justifications, and the reasons for not following such recommendations.
6- Providing remarks Deleted Article
The Audit Committee shall develop a mechanism that enables the employees of the Company to confidentially provide their remarks in respect of any inaccuracies in the financial or other reports. The audit committee shall ensure the implementation of such mechanism through conducting independent
5 investigation in respect of the error or inaccuracies and shall adopt appropriate follow up procedures.
7- Powers of the Audit Committee 6- Powers of the Committee In order to perform its duties, the audit committee may:
1-Review the company’s records and documents.
2-Request any clarification or statement from the board members or the executive management.
3- Request the board to call for a General Assembly meeting, if the board hinders its works or if the company has suffered significant losses or damages.
4- The committee may seek assistance from any expert or specialist, whether internal or external, within the scope of its powers. This shall be included in the minutes of the committee meeting, mentioning the name of the expert and his relationship with the company or the executive management.
In order to perform its duties, the audit committee may:
1-Review the company’s records and documents.
2-Request any clarification or statement from the board members or the executive management.
3-Request the board to call for General Assembly meeting, if the board hinders its works or if the company has incurred significant losses or damages.
4- The committee may seek assistance from any expert or specialist, whether internal or external, within the scope of its powers. This shall be included in the minutes of the committee meeting, mentioning the name of the expert and his relationship with the company or the executive management.
New Article 7- Audit Committee Report
The audit committee shall prepare annual report includes details of its performance of its competencies and duties, provided that the report contains its recommendations and opinion on the adequacy of the internal and financial control systems and risk management systems.
The board shall make available sufficient copies of the report at the head office of the Company and publish it on the company’s and Exchange’s websites when calling for General Assembly meeting to enable shareholders to get a copy thereof. Summary of the report shall be read at the General Assembly.
5- Committee Remuneration 8- Committee Remuneration Each member is entitled to receive an attendance
allowance SAR (3,000) for each session.
2- Each member is entitled to receive annual remuneration SAR (50,000).
Committee members Remuneration shall consist of annual remunerations, attendance allowance and other allowances in accordance with the remuneration policy approved by the General Assembly.
6- Final provisions (Publication and amendment) 9- Final provisions The provisions of this charter shall be implemented by
the Company from the date of its approval by the General Assembly of. This charter will be published on the company's website. No articles shall be amended or added to these Bylaws except upon a proposal from the Board of Directors and the approval of the Company's Ordinary General Assembly.
1-This charter shall enter into force from the date of its adoption by the General Assembly.
2-This charter may be amended as needed upon recommendation from the Board of Directors and the approval of the General Assembly.
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Proposed amendments to Remuneration& Nomination Committee Charter
Current Article Article after amendment
1-Introduction 1-Introduction:
The Remuneration and Nomination Committee Charter of been prepared pursuant to GC regulations issued by the board of Directors of Capital Market Authority dated 13-2-2017, which states the Company’s General Assembly, as per board recommendation, issues a regulation for Remuneration and Nomination committee, including its procedures, duties and rules for selecting its members, the term of their membership and their remuneration.
The Remuneration and Nomination Committee Charter has been prepared to comply with Articles (57-61) of GC regulations issued by the board of Directors of Capital Market Authority dated 13-2- 2017 and amended by CMA Board of Directors dated 18-01-2023 which states the Company’s General Assembly, as per Board recommendation, issues a regulation for Remuneration and Nomination committee, including its procedures , duties and rules for selecting its members , the term of their membership and their remuneration.
2- Rules for selecting the members of the Remuneration & Nomination committee and the term of their membership.
2-Rules for selecting the members of the Remuneration & Nomination committee and the term of their membership
1-The board of directors shall appoint a Remuneration and Nomination Committee for three years, starting and expiring with the term of the board.
2-The Committee shall consist of at least three to five members, the majority of members shall be no executives.
3- The board shall appoint one of its members to be the chairman of the committee and shall be independent.
4- The board may terminate or replace any of the committee members at any time which he deems appropriate. At the same time, the committee member may resign from his position at any time, provided that his resignation will be at a convenient time.
5- If the position of the Committee member becomes vacant, the board of directors shall appoint a new member in the vacant position. The new member shall complete the term of the processor and the Company shall notify CMA within the Statuary period from the date of appointment.
6-The Company shall notify CMA with the names of Committee members and their term of membership and any changes that comes within
1-The board of directors shall form Remuneration
& Nomination Committee for four years, starts and expires with the term of the board of directors.
2-The Committee shall consist of at least three to five members, the majority of members shall be non- executives, and the board may appoint persons other than the board, either from the shareholders or others.
3-The committee members shall have the appropriate experience and qualification relevant to the duties and responsibilities of the committee.
4- The board shall appoint one of its members as a chairman of the committee, provided that he is independent member.
5-The Committee shall select a secretary from among its members or from the company’s staff.
He will be responsible for the preparation of the committee meetings, preparing the minutes of the meeting and any other administrative work related to Committee business.
6-The membership of the committee shall be terminated upon the end of its term, resignation, or death of the member, or if the member has been absent from attending three consecutive meetings without a valid excuse.
2 the statuary period that defined in the CG regulations issued by CMA.
7- The Committee may select a secretary from among its members or from the company’s staff.
He will be responsible for the preparation of the meetings, preparing the minutes of meeting and any other admirative work related to Committee business.
7- The board may terminate or replace any of the committee members at any time which it deems appropriate, whenever there are reasons for that.
At the same time, the committee member may resign from his position at any time, provided that his resignation will be at a convenient time.
8-If the position of the Committee member becomes vacant, the board of directors shall appoint a new member in the vacant position, provided that he has the appropriate experience and competence. The new member shall complete the term of his predecessor and the Company shall notify CMA within the Statuary period from the date of appointment.
9-The Company shall notify CMA with the names of Committee members and their term of membership and any changes that come up within the statuary period that defined in the CG regulations issued by CMA.
3- The Committee meetings, controls, and procedures
3-The Committee meetings, controls, and procedures
1-The committee shall meet at least twice a year.
However, the committee may conduct exceptional or emergency meetings whenever required, upon invitation from the chairman.
2-The meeting shall be valid only if attended by two members, and the resolutions shall be issued by the majority of the attendees. In case of tie up, the chairman shall have the casting vote.
3- Committee members may take part in the meeting through means of modern technology.
4- No other than the Committee members are entitled to attend the meeting, however, the committee may invite any member from the executive management to listen to his opinion or obtain his advice.
5- The Secretary of the Committee shall prepare the draft minutes of the meeting, or any resolution issued by the Committee and follow up to get the signature of the members present at the meeting.
1-The committee shall meet at least twice a year.
However, the committee may conduct exceptional or emergency meetings whenever required, upon invitation from the chairman of the committee.
2-The meeting shall be valid only if attended by two members.
3- The committee shall issue its resolutions with the majority of the attendees. In case of tie up, the chairman shall have casting vote.
4- Committee members may participate in the meeting through means of modern technology.
5-Committee Secretary shall document the committee meetings, prepare the minutes which include the discussions and deliberations carried out during such meetings, recommendations of the Committee shall be documented. Such minutes shall be signed by all of the attending members.
6- Committee meetings shall be attended only by the members and the secretary. However, the committee may invite any member from the executive management to listen to his opinion or obtain his advice.
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7- The Chairman of the Committee shall attend General Assembly meetings to answer the shareholders questions, and he may delegate any of the committee members.
4- Competencies of Remuneration & Nomination Committee
4- Competencies of Remuneration & Nomination Committee
The committee shall undertake the tasks and competencies related to remuneration and nomination as follow:
1-Suggesting clear polices for membership of the board and executive management.
2-Provide recommendation to the board for nomination or renomination of its members in accordance with the approved policies and standards.
3-prearping a description of the capabilities and qualifications required for membership of the board.
4- Annual review of the skills and expertise required for the board members and executive management.
5-Reviewing the structure of the board and the executive management and providing recommendation regarding changes that may be made to such structure.
6- Annually ensuring the independence of the independent members and providing recommendation regarding changes that may be made.
7-Providing job description for executive, non- executive directors and top executives.
8-Setting the procedures to be followed if the positions of the board member or a senior executive becomes vacant.
9- Determining the strengths and weakness of the board and recommending remedy solution.
10- Preparing a clear policy for remuneration of the board members, its committees and executive management, and presenting such policy to the board, clarifying the relation between the paid remuneration and the adopted remuneration policy.
The committee shall undertake the tasks and competencies related to remuneration and nomination as follow:
A-with regard to Remuneration:
1-Preparing a clear policy for remuneration of the board members, its committees and executive management, and presenting such policy to the board, in preparation for approval by General Assembly, provided that such policy follows standards that linked to performance and disclosing and ensuring the implementation of such policy.
2-Clarify the relation between the paid remunerations and the adopted remuneration policy and highlight any material deviation from that policy.
3- Periodical review of the remuneration policy and assessing its effectiveness in achieving its objectives.
4-Provide recommendation to the Board in respect of the remuneration of its members, the committee members, and Senior Executives in accordance with the approved remuneration policy.
B- With regard to Nomination:
1-Suggesting clear policies and standards for membership of the Board and Executive Management.
2-Provide recommendation to the Board for the nomination or re-nomination of its members in accordance with the approved policies and standards, taking into account that nomination shall not include any person convicted of a crime against honesty.
3-Prepare a description of the capabilities and qualifications required for membership of the Board and Executive Management positions.
4 11- Periodical review of the remuneration policy and assessing its effectiveness in achieving its objectives.
12- Provide recommendations to the board in respect of the remuneration of its members, the committee members and senior executives.
4- Annual review of the skills and expertise required for the Board members and Executive Management.
5-Reviewing the structure of the Board and the Executive management and providing recommendation regarding the changes that may be made to such structure.
6- Determine the amount of time that the member should allocate for activities of the Board.
7- Annually ensuring the independence of the independent members and the absence of any conflict of interest if a board member also acts as a member of board of directors at another company.
8-Providing job description for executive, non- executive and independent directors and top executives.
9-Setting the procedures to be followed if the position of the Board member or a Senior executive becomes vacant.
10- Determine the strengths and weakness of the Board and recommending remedy solutions that serves the Company’s interest.
New Article 5- Powers of the Committee
1-Request any clarifications from the executive management or information, documents or policies which related to its competencies.
2-The committee may seek assistance from any expert or specialist, whether internal or external, within the scope of its powers. This shall be included in the minutes of the committee meeting, mentioning the name of the expert and his relationship with the company or the executive management.
5- Committee Remuneration 6- Remuneration of the Committee Each member is entitled to receive an attendance
allowance SAR (3,000) for each session.
2- Each member is entitled to receive annual remuneration SAR (50,000).
The Remunerations of the Committee consist of annual remuneration, attendance allowance and other allowances in accordance with the approved remuneration policy.
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6- Final provisions (Publication and amendment) 7- Final provisions The provisions of this charter shall be
implemented by the Company from the date of its approval by the General Assembly of. This charter will be published on the company's website. No articles shall be amended or added to these Bylaws except upon a proposal from the Board of Directors and the approval of the Company's Ordinary General Assembly.
1-This charter shall enter into force from the date of its adoption by the General Assembly.
2- This charter may be amended as needed upon recommendation from the Board of Directors and the approval of the General Assembly.
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Proposed amendments to the Policies, Standards, and procedures for Board Membership Article before amendment Article after amendment
Introduction
The Policies ,standards and procedures for membership in the board of directors has been prepared to comply with the provisions of paragraph (3) of Article (21) of the Corporate Governance Regulations issued by the Board of the Capital Market Authority on 13/2/2017 and amended by the CMA Board Resolution on 18/1/2023, which stipulates that the Board of Directors shall "prepare a clear and specific policies, standards and procedures for membership in the Board of Directors – in a manner that does not conflict with the mandatory provisions of the Corporate Governance Regulations and put them into effect after the approval of the General Assembly."
Objectives
This policy aims to define the criteria and procedures governing the membership of the Board of Directors in accordance with the relevant regulations.
Article to be deleted
1-Conditions for Membership of the Board 1- Conditions for Membership of the Board The candidate for Board Membership should
meet the following standards:
1-Have academic qualifications, good knowledge and skills which enable him to perform his duties efficiently.
2-Have sufficient experience, integrity, honesty, and independence.
3-Having the ability to manage, supervise, farsightedness, strategic perception, aware of legal and financial matters and fully aware of the company’s business and activities.
4-The Candidate should not be a member of the board of more than five listed companies at the same time.
5-The candidate shall not be a government employee.
6-To allocate enough time and effort to fulfil his duties.
7- The candidate may not have been convicted of a breach of honor and honesty.
1-The Company shall be managed by a board of directors consisting of eight members appointed by the General Assembly for four years.
2-The candidate should have professional competence and the necessary experience, knowledge, skills and independence and the appropriate academic qualifications which enable him to perform his duties efficiently.
3-The candidate should be in good health and free from any medical problems which hinder him from performing his duties.
4-The Candidate shall not be a member of the board of more than five listed companies at the same time.
5-The candidate may not be a government employee.
6-The candidate may not have been previously convicted of cases involving a breach of honor or integrity.
2 8- Not to be previously convicted by Stock Market Committees for any manipulation or disclosing any information relating to any company with the aim of raising its shares.
7- The candidate may not have been previously dismissed or removed from the board of directors of a joint stock company or any board of Directors of any company.
2-Nomination Procedures for Membership of the Board of Directors
2-Nomination Procedures for Membership of the Board of Directors
1-Prior to the end of the Board of Directors term, the company shall announce in Tadawul and in its website for opening the nomination of the board of Director’s membership for a new term, provided the nomination period shall remain open for a period of at least (30) days.
2- Whoever wishes to nominate himself for board of directors’ membership and fulfils the standards stated above, shall follow the following procedures:
- Fill out and submit form (1) Cv.
-Sumit the application of Nomination and attach the required documents within the period specified in the company’s announcement.
3- The Remuneration and Nomination Committee shall review and evaluate the CVs of the applicants and the Committee shall prepare recommendations for the board of directors with the names of the nominees who fulfilled nomination conditions. The information of the nominees shall be announced in Tadawul when calling the General Assembly to convene.
4-Voting at the General Assembly meeting shall be limited to the nominees for board membership that the company has announced their data.
5- Accumulating voting method shall be followed in electing the members of the board.
6- The company will notify CMA with the names of the board members and the type of their membership within five business days from the start date of the board term or any changes that comes to their membership within five business days from the occurrence of such changes.
1-Prior to the end of the Board of Directors term, the company shall announce in Tadawul and in its website and through any other mean specified by CMA to invite the persons wishing to nominate themselves for the membership of the board, provided the nomination period shall remain open for at least a month from the date of the announcement.
2-The nominee for membership of the board must fill out the required forms specified by CMA, which can be found at CMA website.
3-The nominee shall Submit the application of the nomination within the period specified in the company’s announcement and attach the required documents.
4- Submit a statement containing the details of the number and dates of membership in the board of directors of other joint stock companies and the committees he has assumed or is still a member of.
5-Any person wishes to nominate himself for membership of the board shall disclose to the board or the general assembly any cases of conflict of interest in accordance with the procedures prescribed in the Companies Law and CMA regulations.
6- The Remuneration and Nomination Committee shall study the applications of the Nominees and issue a recommendation to the board with a list of the nominees who have met the conditions and criteria of nomination.
7-Voting at the General Assembly meeting shall be limited to the nominees for board membership who have fulfilled the conditions and criteria of nomination.
8- Accumulating voting method shall be followed in electing the members of the board.
9- The company will notify CMA with the names of the board members and the type of their membership within five business days from the start date of the board term or any changes to their
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membership within five business days from the occurrence of such changes.
3-End of Board membership 3-Expiry of Board membership/ or Resignation of the members
Membership of the board shall be ended/terminated in accordance with article (19) of the Bylaws of the Company by one of the following reasons:
1-Upon the expiry of membership term, or if the member becomes unsuitable for membership under any law or regulations prevailing in in the Kingdom.
2- Upon resignation or death of the member.
1-Membership of the board shall be terminated upon the expiry of the board of directors’ term or the validity of the member in accordance with any laws or regulations in the Kingdom, or by resignation or death of the member.
2-The General Assembly may upon recommendation from the board terminate the membership of any member who has been absent from attending three consecutive meetings or five non - consecutive meetings during the term of his membership without a valid excuse accepted by the board.
3- The board of directors shall call for an Ordinary General Assembly to convene prior to the expiration of its term to elect board members for a new term. If the election cannot be conducted and the term of the current board has expired, the board members shall continue to perform their duties until a new board of directors is elected for a new term, provided that the continuation period of the members of the board whose term has expired shall not exceed (90) days from the end date of the board’s term.
4-If the chairman and the members of the board resign, they shall call for Ordinary General Assembly meeting to elect a new board. The resignation shall not take effect until a new board is elected. The duration of the resigned board shall not exceed (120) days from the date of such resignation.
5-A member of the board may resign from the board pursuant to a written notice addressed to the chairman of the board. However, if the Chairman of the board resigns, the notification shall be addressed to board members and secretary of the board. In both cases, the resignation shall be effective from the date specified in the notice.
6- If the necessary conditions for the validity of the board meetings are not satisfied due to the number of board members is less than the minimum quorum stipulated in the company’s Bylaws, the remaining members shall call for General Assembly
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meeting within (60) days to elect the required number of board members.
4- Vacant Position in the Board of Directors 4-Vacant Position in the Board of Directors If the position of a member of the Board becomes
vacant, the Board may temporarily appoint a member in the vacant position, and the Capital Market Authority shall be notified of the appointment within five business days.
This appointment shall be presented to the Ordinary General Assembly at its first meeting, and the new member completes his predecessor term. If the number of members of the board of directors are decreased below the quorum required for the validity of its meetings, the remaining members shall call the Ordinary General Assembly to convene to elect the required number of members.
If the position of a member of the Board becomes vacant due to death or retirement of any of its members, the Board may appoint temporarily in the vacant position, a director who has the necessary experience and competence. Such appointment shall be presented to the Ordinary General Assembly in its earliest meeting, and the appointed member shall complete the term of his predecessor.
5- Amending the policy 5- General Provisions This policy can be amended upon
recommendation from the board and approval from the General Assembly.
This policy shall enter into force from the date of its adoption by the General Assembly.
2- This policy may be amended as needed upon recommendation from the Board of Directors and General Assembly approval.
1
Proposed amendments to the Remuneration policy for Board of Directors, its Committees, and Executive Management
Current Article Article after amendment
1-Introduction
The Remuneration Policy for the Board, its Committees and the Executive management is prepared in accordance with Article (61) of the Corporate Governance Regulations issued by CMA Board, which states “The Remuneration and Nomination Committee (RNC) shall prepare a clear policy for the remuneration of the board members, its committees and the Executive management and presenting such policy to the board in preparation for General Assembly approval.
1-Introduction:
The Remuneration Policy for the Board, its Committees and the Executive management is prepared in accordance with paragraph 1 of Article (58) of the Corporate Governance Regulations issued by CMA Board, which states “The Remuneration and Nomination Committee (RNC) shall prepare a clear policy for the remuneration of the board members, its committees and the Executive management and presenting such policy to the board in preparation for General Assembly approval.
2- The Aim
This policy aims at setting clear standards for the remuneration of the Board, its Committees and Executive management in view of the Companies Law, Capital Market Law and its Executive Regulations.
Deleted Article
3- General Standards for Remunerations
The Remuneration& Nomination Committee is competent to recommend to the board in respect of the remunerations of its members, the committees’ members, and Senior Executives in accordance with the following criteria.
1-Remuneration shall be consistent with the Company’s strategy and objectives.
2-Provide remuneration with the aim of encouraging Board Members and Executives Management to achieve success of the company and its long-term development.
3- Remuneration shall be determined based on job level, duties and responsibilities, educational qualifications, practical experience, skills and level of performance.
4-Taking into consideration the practices of other companies in respect of determination of remuneration and avoiding the disadvantages of such comparison in leading to unjustifiable increases in remuneration and compensations.
2- General Standards for Remunerations
The Remuneration & Nomination Committee is competent to recommend to the board in respect of the remunerations of its members, committee members, and Senior Executives in accordance with the following criteria:
1-Remuneration shall be consistent with the company’s strategy, objectives and with the size, nature, and level of risk faced by the company.
2-Providing the remuneration with the aim of encouraging Board Members and Executives Management to achieve the success of the company and its long-term development.
3- Remuneration shall be determined based on job level, duties and responsibilities, educational qualifications, practical experience, skills, and level of performance.
4-The remuneration must be appropriate to the company’s activities and the required skills for its management.
5-Taking into consideration the practices of other companies in respect of determination of remuneration and avoiding the disadvantages of
2 5- Take into consideration the sector in which the company operates, its size and the experience of its board members.
6- To attract talented professionals, retain and motivate them without exaggeration.
7- The remuneration of the board may vary depending on the board member’s experience, competencies and the duties he undertakes.
such comparison in leading to unjustifiable increases in remuneration and compensations.
6- Take into consideration the sector in which the company operates, its size and the experience of its board members.
7-The remuneration shall be fair and proportionate to the member's competencies, duties and responsibilities carried out and borne by the members of the Board of Directors, committees, or top Executives, in addition to the objectives set by the Board of Directors to be achieved during the fiscal year.
8- Be reasonably sufficient to attract, motivate and retain highly qualified and experienced board members.
9-The Remuneration should be based on recommendations from the Remuneration&
Nomination Committee.
10- The remuneration of different Board Members may vary depending on board member’s experience, competencies, and the duties he undertakes, independence and the number of the board meetings he attends in addition to other considerations.
11-The remuneration shall be suspended or reclaimed if it is determined that such remunerations were set based on inaccurate information provided by a member in the board or the executive management, to prevent abuse of power to obtain unmerited remunerations.
4-Board Members Remuneration
1-The remuneration of the Board Members may consist of fixed amount, attendance fees, expensed fees, other in-kind benefits, a certain percentage of net profits, or a combination of two or more of those benefits provided that the remuneration shall not exceed the limit stated in the company’s law.
2-The Board of Directors to the General Assembly shall include a comprehensive statement of all the remuneration, allowances, expenses and other in- kind benefits received by the members of the Board of Directors during the fiscal year. The report includes a statement of what the members of the board of directors received in their capacity
4-Board Members Remuneration
1-The remuneration of the board members may consist of a certain sum of money, attendance allowances, in-kind benefits, a net profit quota, or it may be combination of two or more of such benefits.
2-The remunerations of different Board members may vary depending on the board member’s experience, duties he undertakes, independence and number of board meetings he attended in addition to other considerations.
3- The remuneration of the independent board members shall not be a percentage of the net profit realized by the company, nor shall it be
3 as employees, administrators, or what they received in return for administrative, advisory, or technical work.
3-In all cases, the sum of the remuneration or in- kind benefits received by a member of the Board of Directors shall not exceed the amount of (five hundred thousand riyals) annually.
based directly or indirectly on the Company’s profitability.
4-The Board member is entitled to remuneration from the date of joining the board, provided that the remuneration must be proportionate to the actual term of his membership.
5- If the General Assembly decides to terminate the membership of any board member who has been absent from attending three consecutive meetings or five non – consecutive meetings during the term of his membership without a valid excuse accepted by the board, then such member shall not be entitled to any remuneration for the period starting from the last board meeting he attended , and he shall pay back any remuneration he received for that period.
6-The Board of Directors report to the General Assembly during its annual meeting shall include a comprehensive statement of all the amounts received or deserved to be received by each board member during the fiscal year, including remunerations, attendance allowance, expense fees and other benefits. The statement should also include the amounts received by the board members with their capacity as employees or administrators, or in consideration for technical, executive or advisory services. The report should also include the number of board meetings held and the number of meetings attended by each member.
7- Board members shall not vote on the agenda item relating to the remuneration of the Board members at the General Assembly’s meeting.
5- Committee members Remunerations
1-The board shall determine and approve its committee’s remuneration excluding Audit Committee remuneration based on recommendation from the Remuneration&
Nomination Committee.
2- Committee Member remuneration shall compromise annual remuneration (fixed amount) and attendance fees.
3- Audit Committee Remuneration shall be determined by the General Assembly based on the board of Directors Recommendation.
5- Committee members Remunerations
1-The board shall determine and approve the remuneration of its committee and the attendance fees based on recommendation from the Remuneration & Nomination Committee .
2-Committee Members’ remunerations shall compromise annual remuneration (fixed amount) , attendance fees and other allowances.
4 6- Executive Management Remuneration
The Remuneration &Nomination Committee reviews the annual remuneration of the Executive Management according to the performance measurement indicators approved by the Board of Directors. Executive management remuneration includes the following:
- A basic salary to be paid at the end of each month -Allowance such as Housing allowances.
Transportation, and Education allowances.
- Medical insurance for him and his family according to the human resources policy.
- Insurance for work injuries, total or partial disability and death at work
- An annual Remuneration based on performance indicators
- Other benefits include annual leave, annual travel tickets and end-of-service gratuity according to the work system and the human resources policy approved by the company
-The MD/ CEO implements the remuneration policy for employees and senior executives as per recommendations from Remuneration and Nomination Committee and Board approval.
6- Executive Management Remuneration
1-The Board of Directors shall determine the remuneration of the Executive Management based on the recommendation of Remuneration
&Nomination Committee.
2-Remuneratoin of the Executive Management shall compromise the following:
-Basic Salary
-Allowances such as, Housing allowance, Transportation, and Education allowances as per the company’s policy.
- Medical Insurance for him and his family.
- Annual remuneration based on performance indicators.
- Other benefits include annual leave, annual tickets, and an end-of-service award as per the company’s approved policy.
- The MD/ CEO shall implement the remuneration policy for employees and Senior executives as per recommendation from Remuneration and Nomination Committee and Board approval.
7- Details of the remuneration of Board members and its committees:
1- Board Members remuneration
-Attendance allowance SR (3,000) per session -Accommodation allowance SR (2,000), and travel expense SR (1,000) for board members who are outside Dammam.
- Annual remuneration SR (200,000) for each member and not exceeding SR (500,000).
2- Committee members Remuneration:
-Attendance allowance SR (3,000) Per session.
-Annual remuneration SR (50,000) for each member.
7-Details of the remuneration of Board members and its committees:
1- Board Members remuneration
-Attendance allowance SR (3,000) per session -Overnight allowance SR (2,000) per night, and travel expenses SR (2,500) for board members who come from outside Dammam City.
-Annual remuneration SR (200,000) for each board member.
2- Committee members Remuneration:
-Attendance allowance SR (3,000) per session.
-Overnight allowance and travel allowance shall be applied if the meeting of the committees does not coincide with the board meetings.
- Annual remuneration of SR (100,000) for each member if he is from the board.
- Annual remuneration of SR (150,000) for each member if he is from outside the board.
8-General Provisions: 8- Mechanism of disbursing the remuneration
5 1-Board members may not vote on the agenda item relating to the remuneration of the Board members at the General Assembly’s meeting.
2- The company shall disclose the remuneration of the members of the Board, committees, and senior executives in the annual report of the Board of Directors in accordance with the regulations issued under the Companies Law and the regulations of the Capital Market Authority.
3- The annual remuneration of the members of the Board and the committees shall be processed by the Secretary of the Board and the payment shall be approved by the CEO.
4- Attendance allowance of the Board and the committees may be paid on quarterly basis, while the annual remuneration of the Board shall be paid after General Assembly approval in its annual meeting.
1-Attendance allowances for Board and Committees meeting may be paid on a quarterly basis.
2-The annual remuneration of the board and the committees shall be paid after the end of the fiscal year of the company as per recommendation from the Remuneration and Nomination Committee and Board of Directors approval.
3-The remuneration of the Board members and the committees shall be processed by the Secretary of the Board.
9-Final Provisions
The provisions of this policy shall be implemented from the date of its approval by the General Assembly and shall be published on the company's website. This policy may be reviewed when needed by the Remuneration and Nomination Committee, and any proposed amendments shall be presented to the Board of Directors, which in turn reviews those amendments and recommends them to the General Assembly for approval.
9-Implementation and amendment of the Policy 1- This policy shall enter into force from 2023 after its adoption by the General Assembly.
2-This policy may be amended upon recommendation of the Remuneration and Nomination Committee, approval of the Board of Directors and the adoption of the General Assembly.
