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Current Provision
Proposed Amendments
Explanation
Part 4
Board of Directors
Chapter 3: End of a Board Membership
Article 6: End of a Board Membership
a) The Company's bylaws shall specify the manner by which membership of the Board may end or in which it may be terminated upon a request from the Board. The Ordinary General Assembly may, however, remove some or all Board members, even if the Company's bylaws provides otherwise, with consideration to any rules set out by the Authority; and in such case, the Ordinary General Assembly shall elect a new Board or a replacement for the removed member, as the case may be, in accordance with the provisions of the Companies Law and its implementing regulations. The General Assembly may also, upon a recommendation of the Board, terminate the membership of the Board member who did not attend three consecutive or five non-consecutive Board meetings during the course of his/her membership without a legitimate excuse accepted by the Board.
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a) The Company's bylaws shall specify the manner by which membership of the Board may end or in which it may be terminated upon a request from the Board. The Ordinary General Assembly may, however, remove some or all Board members, even if the Company's bylaws provides otherwise, with consideration to the rules set out in this Article; and in such case, the Ordinary General Assembly shall elect a new Board or a replacement for the removed member, as the case may be, in accordance with the provisions of the Companies Law and its implementing regulations. The General Assembly may also, upon a recommendation of the Board, terminate the membership of the Board member who did not attend three consecutive or five non-consecutive Board meetings during the course of his/her membership without a legitimate excuse accepted by the Board.
It is proposed to amend paragraph (a) of Article (6) of Part Four of the Implementing Regulation of the Companies Law for Listed Joint Stock Companies, for the purpose of regulating the provisions governing the controls of removal within the provisions of Article (6) of the said Regulation.
c) Upon receiving a request from one or more shareholders representing (10%) of the Company's voting shares for removal of some or all Board members in accordance with Article (90) of the Companies Law, the Board shall include, in the invitation to convene the Ordinary General Assembly, the name of the shareholder who submitted the request and the justifications of such request. The concerned Board member shall have the right to make a statement regarding the request in the relevant Ordinary General Assembly meeting.
c) The request submitted by one or more shareholders to remove members of the Board by the Ordinary General Assembly shall be subject to the following controls:
1- The request must be submitted by one or more shareholders representing (10%) of the Company's voting shares for removal of some or all Board members in accordance with Article (90) of the Companies Law.
2- A request for the removal of all members of the Board shall not be submitted unless a period of no less than six (6) months has elapsed since the commencement of the Board's term.
3- For the removal of one or more members of the Board, the applicant must demonstrate that the member is unable to perform the duties as prescribed by law, including -but not limited to- cases where the member has been absent from three consecutive or five non-consecutive Board meetings during the term of membership, or has been convicted of a crime involving breach of trust.
4- The request must not be submitted by a shareholder(s) who have previously submitted the same request for removal during the same Board term, where such request was not approved by the General Assembly.
d)..Upon receiving the request referred to in paragraph (c) of this Article, the Board shall comply with the following:
1- notify the concerned member of the removal request immediately upon receiving the request.
2- Announce the removal request after verifying that it meets the requirements stipulated in this Article, provided that such announcement is included within the notice calling for the convening of the General Assembly. the invitation of the General Assembly shall include the name of the shareholder who submitted the request and the justifications of such request. The concerned Board member shall have the right to prepare a written statement to be made available to the shareholders upon publication of such notice, and to make a statement regarding the request in the relevant General Assembly meeting.
It is proposed to amend paragraph (c) of Article (6) of Part Four of the Implementing Regulation of the Companies Law for Listed Joint Stock Companies, and to add paragraph (d) to the same Article, for the purpose of clarifying the controls applicable to a request submitted by one or more shareholders for the removal of members of the Board of Directors by the Ordinary General Assembly, in addition to clarifying the obligations of the Board of Directors upon receiving such a removal request.
e) If the resolution of the General Assembly approving the removal request results in affecting the validity of the Board's formation due to the number of its members falling below the minimum stipulated in the Companies Law or the Company's bylaws, the resolution of the Assembly must provide that the removal shall not become effective until after the General Assembly approves the election of a new Board or the replacement of the removed member. The Board shall take the necessary measures to convene the General Assembly to elect a new Board or a member to replace the removed member within a period not exceeding sixty (60) days from the date of the General Assembly's approval of the removal request.
It is proposed to add paragraph (e) to Article (6) of Part Four of the Implementing Regulation of the Companies Law for Listed Joint Stock Companies for the following purposes: 1. To clarify the effective date of the removal of all or some members of the Board of Directors in cases where the resolution of the Ordinary General Assembly approving the removal request results in a breach of the conditions required for the proper constitution of the Board, due to the number of its members falling below the minimum stipulated in the Companies Law or the Company's bylaws. 2. To clarify the obligation of the Board of Directors, upon the issuance of a resolution by the Ordinary General Assembly to remove all or some members of the Board, to take the necessary measures to convene the Ordinary General Assembly for the election of a new Board or a member to replace the removed member.
f) No person who has been previously removed from the Board of a Company, or who has resigned from the Board after receiving a removal request and prior to the convening of the General Assembly to vote thereon, may be re-nominated for membership of the Board of the same Company until the end of the term of the Board from which he/she was removed or resigned, and the term immediately following it.
It is proposed to add paragraph (f) to Article (6) of Part Four of the Implementing Regulation of the Companies Law for Listed Joint Stock Companies, to require compliance with the restriction on re-nominating any person for membership of the Board of Directors of a Company who has been previously removed from its Board, or who has resigned from its Board after receiving a removal request and prior to the convening of the General Assembly to vote thereon, within a specified period.
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g) A member of the Board must immediately, and without delay, notify the Board upon the issuance of any judicial ruling convicting him/her of a crime involving breach of trust. Upon becoming aware of such ruling, the Board must recommend to the Ordinary General Assembly the removal of the concerned member.
It is proposed to add paragraph (g) to Article (6) of Part Four of the Implementing Regulation of the Companies Law for Listed Joint Stock Companies, for the purpose of clarifying the obligations of a Board member upon the issuance of a judicial ruling convicting him/her of a crime involving breach of trust, and clarifying the obligations of the Board of Directors upon becoming aware of such ruling. In addition, it is proposed to amend the references to paragraphs (d), (e), and (f) in the aforementioned Article in light of the amendments introduced thereto.
Current Provision
Proposed Amendments
Explanation
Part 9
Dividend Distribution to Shareholders of the Company
Chapter1: Distributable Profits and Timing of Payment of Dividends
Article 45: Distributable Profits and Share Premium Account
a) The distributable profits consist of the net income of the financial year minus all amounts that are set aside for the reserve allocated for specific purposes in the Company's bylaws, if any, or the amounts that must be set aside for the reserves created by the General Assembly plus the retained earnings and the distributable reserves formed out of profits.
a) The distributable profits consist of the net income minus all amounts that are set aside for the reserve allocated for specific purposes in the Company's bylaws, if any, or the amounts that must be set aside for the reserves created by the General Assembly plus the retained earnings and the distributable reserves formed out of profits.
The proposed amendment aims to enhance the provisions governing distributable profits.
Article 47: Requirements for the Distribution of Interim Dividends
A Company may, if so provided and permitted in its bylaws, distribute interim dividends to its shareholders on a biannual or quarterly basis after fulfilling the following requirements:
4) The Company shall have distributable profits from one or more previous years – according to the latest audited financial statements - sufficient to cover the proposed dividend distribution, after deducting the amounts distributed and capitalised of the profits after the date of those financial statements.
4) The Company shall have distributable profits from one or more previous years – according to the latest reviewed or audited financial statements - sufficient to cover the proposed dividend distribution, after deducting the amounts distributed and capitalised of the profits after the date of those financial statements.
The proposed amendment aims to enhance the requirements governing the distribution of interim dividends.
Last update: 27 October 2025
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