State of Kuwait Ministry of Justice Real State Registration and Authentication Department. Kuwait Telecom Company A Kuwaiti Shareholding Company

Transcription

1 State of Kuwait Ministry of Justice Real State Registration and Authentication Department Kuwait Telecom Company A Kuwaiti Shareholding Company The Articles of Incorporation Chapter One Establishing the Company a) Elements of incorporation Article (1) In accordance with provisions of Law of Commercial Companies and LAW No. 26 from 1996 and Law No. 2 from 2007 referred to and these Articles of Incorporation, a Kuwaiti Shareholding Company has been formed between shareholders operating under the name of "Kuwait Telecom Company:, a Kuwaiti Shareholding Company (the Company ). Article (2) The head office and legal domicile of the Company shall be situated in the City of Kuwait. However, the Board of Directors may establish branches, agencies, offices or operation centers or may appoint representatives for the Company either within the State of Kuwait or abroad. Article (3) The term of this Company is unlimited commencing on the date of issue of the Decree authorizing establishing. Article (4) The purposes for which the Company has been established shall be to provide all mobile telecommunication services and public paging system in such a way as not to constitute any breach to provisions of the Islamic Law (Shari ah) and in accordance with constraints laid down by the Ministry of Communications. In order to realize such objectives, the Company may conduct following businesses: 1. Procurement, installation and operation of telecommunication equipment for Mobile Telephone Services, Paging Systems and other telecommunication services. 2. Import and export of equipment and objects required for realizing the corporate objects. Final 1

2 3. Purchase or rent of telecommunication lines and facilities necessary for provision of corporate services, in co-ordination with state provided facilities and without any interference, contradiction or overlap between both. 4. Purchase of manufacturing franchise concessions that are directly interconnected with the corporate services, from manufacturing companies or manufacturing them in Kuwait. 5. Introduce or operate other services of similar or complementary nature to the wireless communication services for purpose of upgrading of such services or in order to upgrade such services or for such services to be integrated. 6. In co-ordination with competent parties, both inside Kuwait and abroad, conduct technical research relating to the corporate business for purpose of improving and upgrading of corporate services. 7. Purchase and acquire land and construct buildings and structures thereon for purpose of realizing the corporate objectives with the limits permitted by law. 8. Purchase of all material and equipment necessary for realizing corporate objectives and maintain them using all possible up-to-date techniques. 9. Take advantage of financial surplus available with the Company by investing such surplus in financial portfolios to be managed by specialized companies and authorize the Board of Directors to act accordingly. Article (5) The Company can exercise the above objects in Kuwait or abroad directly or as an agents. The company may have interest in or may participate in any way whatsoever with entities that conduct similar businesses or that may assist it in realizing its objects, both inside Kuwait and abroad. The Company may have its or such entities, annex them thereto, or merge therewith. Article (6) The Company s capital has been fixed at Kuwaiti Dinars 50,000,000 (KD fifty million) divided into 500,000,000 shares (five hundred million), each shall have a value of Kuwaiti Fils 100 (one hundred). All shares shall be cash shares. Article (7) Corporate shares shall be nominal. Non Kuwaiti citizens shall not be entitled to hold shares except in accordance with provisions of law and ministerial resolutions which regulate that aspect. Article (8) Final 2

3 Constituent signatories hereto have subscribed to the corporate capital by (250,000,000) shares two hundred fifty million shares, its nominal value is (25,000,000) twenty five million Kuwiti Dinars distributed among them upon the percentage of his share mentioned in the Articles of Association. An amount of KD(25,000,000) from the nominal value is paid at the Bank (Boubyan Bank) as evident from the attached certificate issued by the above-mentioned Bank on Article (9) A percentage of 50% (fifty percent) of the shares, comprising (250,000,000) shares shall be offered in public subscription to Kuwaiti citizen subscribers for a period not less than 10 (ten) days and it should not exceed three months. The subscription will be made in the Kuwaiti Banks which will be announced. If, upon the closing of subscription, it is found that the number of shares subscribed to is more than the number of shares offered for subscription, the shares shall be distributed among the subscribers in the ratio of their respective subscription. However, if subscriptions do not cover the full number of offered shares, remaining unsubscribed shares shall be offered in a public auction in which the joint stock companies listed under Kuwait Stock Exchange and foreign companies that specialize in the communication field including Saudi Telecom Company shall participate in according to Law No. (2) for 2007 referred to. Number of shares distributed shall be rounded down to nearest number of full shares. Article (10) Without prejudice to article No.81 of Commercial Companies Law, no person shall be allowed to subscribe in more than one hundred thousand shares, neither can be hold at any one time more than 2% of the corporate capital, other than through heritage or testament and the founders are exempted from this article. Article (11) Within a period of three months from date final corporate incorporation, the Board of Director shall deliver to each shareholder a certificate detailing shares that he holds in the corporate capital. Article (12) Holding a share in the corporate capital shall automatically entail acceptance by the holder of the corporate Articles of Incorporation and resolutions passed by its General Assembly of Shareholders. Article (13) Every share shall entitle its holder to have a pari passu share equivalent to that of others in respect of the corporate assets and shared profits as outlined hereinafter. Final 3

4 Article (14) The Company shall maintain a registry containing the names of the shareholders and the number of the shares and every change thereon. No change shall be valid unless it is made according to the law. Article (15) Whereas the corporate shares are nominal, the last holder thereof whose name appears in the Share Register shall be the only one entitled to receive the sums payable for such share, whether such sums were profit shares or shares in corporate assets. Article (16) No new shares shall be issued at lower than par value. Should, however, a new issue be floated at a premium value above nominal value, the increase shall be allocated first to cover the issuing expenses and thereafter to the statutory reserve after deduction of issuing expenses. Each shareholder shall have a preference right to subscribe to a number of new shares proportional to his shareholdings. The period allowed for the exercise of such right shall be fifteen days effective from the date of publishing of a public notice inviting shareholders to subscribe. However, shareholders may assign their right of priority. Shareholders may, in advance, waive their right to first priority. Article (17) In accordance with provisions of Law # 15/1960, and executive resolutions, the Company may purchase no more than 10% of its total shareholding. Chapter Two Management of the Company a) The Board of Directors Article (18) Management of the Company shall be entrusted to a Board of Directors consisting of seven (7) members. Out of this number, the Government, Saudi Telecom Company and other Kuwait shareholding companies may nominate some proportional to the respective shareholding held by them. The General Assembly of Shareholders shall elect by secret ballot the remaining members. Article (19) Board members term shall be three years renewable. Final 4

5 Article (20) As requirement to be fulfilled by each Board member each Board member should not have been convicted in a crime for honesty and he shall either in his personal capacity or in the capacity of the corporate member that he represents, be holder of a number of shares not less than one percent(1%) shares. However, its adequate that the member holds a number of shares equivalent to K.D7,500 ( Kuwaiti Dinars Seven Thousand Five Hundred). This minimum requirement of shareholding is intended as security for ensuring proper management by the Board member. Payment shall have to be deposited with the bank within one month from date of such appointment. Such shares shall continue to be non-negotiable until the relevant membership term expires and financial statements pertaining to the last financial year during which the said Board member was a member. In case the Board member fails to present security as required, his membership shall be nullified. Article (21) Neither the Chairman of the Board nor any of the Board members, shall have a direct or indirect personal interest or benefit in the contracts or deals concluded by or for the account of the Company, nor shall any Board member have interest that contradicts with that of the Company unless he obtaines a special consent from the General Assembly at the same time, be a Board member in a similar or a competitor company, nor shall be a merchant in a business that is either similar or that constitutes a competition against the Company. The above restrictions shall not apply to Saudi Telecom Company since its participation in the company as strategic partner is to benefit from its experience in this field through its technical and operational management to the company. Therefore, it has the right to be represented in the Board of Directors. Neither the Chairman of the Board nor any of the Board members, even if representing a corporate party, shall take advantage of information available to him by virtue of his position, in making a personal benefit either for himself or for others, neither shall he be allowed to sell or buy the Company shares throughout his term in office. Article (22) Should the seat of any Director become vacant, it shall be occupied by the unsuccessful candidate shareholder who obtained the highest number of votes polled at the last election. However, should one fourth of the original seats become vacant and no qualified candidates were available to fill such seats, then the Board of Directors shall call for a meeting of the General Assembly, to be held within two months from the date on which the last seat became vacant, in order to elect Directors to occupy the vacancies. In all cases, the new Director shall fill the vacancy only for the remaining part of his predecessor s term of office. Article (23) The Board of Directors shall by secret ballot elect the Chairman and his Deputy for a three-year term, but shall not exceed their term of the Board of Directors. The Chairman shall represent the Company before courts. He shall be responsible for implementation Final 5

6 of the Board decisions. The Deputy Chairman shall deputize for the Chairman in his absence or whenever there is a reason which preventing him from attending his duties. Article (24) The Board of Directors may appoint out of its members Managing Director or more, and the Board of Directors shall determine their authorities and remunerations. Article (25) The Chairman or his Deputy and the Managing Directors or any other member assigned by the Board of Directors fro this purpose shall have the right to sign solely on behalf of the Company. Article (26) The Board of Directors shall convene at least four times throughout the fiscal year, by invitation from the Chairman. The Board of Directors shall also convene, if at least two of its members shall so requested. The Board meeting shall be valid if a quorum consisting of majority of members were present. No representation by proxy shall be allowed in meetings of the Board. Article (27) The Board of Directors shall determine terms of business dealings with consultants, experts, advisers and individuals, whether their relationship with the Company was on an ongoing or ad hoc basis. As part of the in-house bylaws, the Board of Directors may lay down a regulatory bylaws in order to regulate such business aspect. Article (28) The resolutions of the Board of Directors shall be passed by a majority vote of the members present. In the event of equality votes, the Chairman shall have the casting vote. A special register shall be kept for minutes of such meetings. The Register shall be signed by the Chairman and the objecting party may request that his view be entered in the said record. Article (29) If a member of the Board of Directors fails to attend three successive Board meetings without any valid justification, he may be deemed,as having resigned, upon a resolution by the Board of Directors. Final 6

7 Article (30) Without prejudice to provisions of the Commercial Companies Law, the Ordinary General Assembly shall, at an ordinary meeting determine remuneration payment to the members of the Board of Directors. Article (31) The Board of Directors shall have the widest powers necessary for operating the Company towards realizing its objectives. Such powers shall not be restricted except to the extent provided by law or under these Articles of Incorporation or by resolutions passed by the General Assembly. The Board of Directors shall particularly issue bylaws and regulations required for regulating business. It shall appoint Directors, staff and head of departments at all management and administrative levels and shall lay down their functional classifications and determine scope of involvement of each, responsibility level, salaries and remunerations. The Board of Directors shall have the right to buy and sell portable and real estates of the company and mortgage it, and to give guarantees on loans agreements and shall take everything necessary to conduct the objects of the Company provided such conduct of business do not contradict with Shari ah principles. Article (32) The members of the Board of Directors shall not take up any personal liability with regard to the Company's undertakings in relation to carrying out their duties within the limits of the powers delegated to them. Article (33) The Chairman and members of the Board of Directors shall be responsible to the Company, its shareholders and third parties for all fraudulent acts, misuse of authority, or mismanagement, or for each violation of the Law or of these Articles of Association. Initiation of a liability suit shall not be barred by a vote of the General Assembly ratifying any member of the Board of Directors from liability. Article (34) The General Assembly of Shareholders shall convene at least once a year in the venue, date and timing as determined by the Articles of the Company, and the Board of Directors may invite for this Assembly's meeting if necessary. The Board of Directors may invite them upon a request by a number of shareholders who are holding at least one tenth of the capital shares. The invitation to the meeting contains a clear explanatory of the Agenda will be notified by the following ways: - Shall be posted in at least two local newspapers publish in Arabic Language for two times. The second time takes place after a week from the first publication Final 7

8 date and before one week at least from the General Assembly convene. The second invitation should be published in the official Gazette including the said daily newspapers. - The constituents shall lay down the agenda for the Constituent General Assembly. The Board of Directors shall lay down the agenda for both the Ordinary and Extra-Ordinary General Assembly. Article (35) In cases in which a meeting of the General Assembly may be held upon the request of the shareholders, auditors or the Ministry of Commerce and Industry, the Agenda shall be prepared by the party requesting to hold such a meeting. Matters not listed on the Agenda shall not be discussed. Article (36) Every shareholder shall have a number of votes equal to the number of shares he holds. Meetings of the General Assembly may be attended by proxy. Minors and interdicted persons may be represented by their legal representatives. A shareholder may not participate in voting on his own behalf or on behalf of the party, he legally represents, on issues dealing with a private benefit for himself or on matters relating to a dispute arising between him and the Company. Article (37) Shareholders shall register their names in a special Shareholders Register kept for this purpose at the Company s Head Office at least twenty-four hours before any meeting of the General Assembly. The Register shall show the name of the shareholder, the number of shares he holds, the number of shares he represents, and the names of original owners together with a power of attorney. Each shareholder shall be given a card permitting his attendance at the meeting, in which card the number of votes he holds in his own capacity and/or by proxy shall be specified. Every shareholder has the right to attend the Assembly. Article (38) In respect of whatever meetings held by the General Assembly and also of the majority required for passing resolutions, the quorum shall be subject to provisions of the Commercial Companies Law. Article (39) Voting in a meeting of the General Assembly shall be in the manner determined by the Chairman presiding over the meeting, unless a particular method is decided by the General Assembly. However, the election or dismissal member of a Board of Directors shall be by secret ballot. Final 8

9 Article (40) The founders shall meet within thirty (30) days after the registration of the Company in the commercial Register and the publication of its incorporation in the Official Gazette in the capacity of a founding assembly. The founders shall present to the General Assembly a report covering the entire incorporation procedures and operation together with the supporting documents. This initial meeting of the General Assembly shall verify the accuracy of the incorporation procedures and its conformity with the Law and the Memorandum of Association and Articles of Association of the Company, and shall review any reports presented by the Ministry of Commerce and Industry in this respect. In the initial meeting, the General Assembly shall also elect and appoint, as the case may be, the members of Board of Directors, appoint the company s auditors, and declare the final incorporation of the Company. Article (41) A meeting of the General Assembly shall be held at least once every year upon an invitation from the Board of Directors, within three (3) months from the end of every fiscal year. The Board of Directors shall also call for a meeting of the General Assembly whenever it resolves to do so. The Board of Directors shall also call for a meeting whenever shareholders holding at least one tenth of the capital shares and also be held upon the request of the Ministry of Commerce and Industry. Article (42) The General Assembly is qualified to discuss all Company matters in its ordinary meetings, except for those matters which have been reserved by Law or these Articles of Association for discussion in the Extraordinary Meeting of the General Assembly or in its capacity as the founding Assembly. Article (43) The Board of Directors shall present to the General Assembly a report covering a detailed statement on the progress of the Company s business, its financial and economic status, the Company s balance sheet, the profit and loss statement, a statement of the Board of Directors remunerations and Auditors fees, and a recommendation for the distribution of dividends and as the Commercial Companies law. Article (44) The General Assembly shall review the Board of Directors report and take whatever decision it deems appropriate in connection therewith, consider the auditors report and the report of the Ministry of Commerce and Industry, if any, elect any members of the Board of Directors required to be elected, and appoint the Company s Auditors for the following fiscal year and determine their fees as the Commercial Companies law. Final 9

10 Article (45) The Extraordinary meeting of the General Assembly shall be convened upon an invitation from the Board of Directors or upon a written request from holders of not less than one quarter of capital shares in which case the Board of Directors shall convene the Extraordinary meeting within one month from the date of receiving such a written request. Article (46) The following matters shall only be addressed in the Extraordinary Meeting of the General Assembly: 1. Amendment of the Memorandum of Association or Articles of Association of the Company. 2. Selling or otherwise disposing of all the company assets. 3. Dissolution of the Company or its merger with another company or entity. 4. Reducing or increasing the Company s share capital. Any amendment of the Company's Articles of Association will not become enforced before the Ministry of Commerce and Industry's approval. C) Corporate Accounts Article (47) The Company shall have one or more certified public accountants as auditors to be appointed by the General Assembly. The General Assembly shall also determine the Auditor s fee. The Auditor shall audit the accounts of the fiscal year for which he was appointed. Article (48) The Company s fiscal year shall start on January 1st and shall end on December 31st of each year. The Company s first fiscal year is an exception, as it starts from the date on which the Company is declared to be officially incorporated and shall end on December 31st of the following year. Article (49) The Auditor shall have the powers and obligations stipulated under the Commercial Companies Law and law streamlining practicing of the auditing profession, i.e. Law No. 5 for He shall in particular have the right, at any time, to inspect the Company s books, records and documents and to ask for whatever information he deems necessary Final 10

11 for verification of assets and liabilities of the Company. Should he, however, be obstructed from exercising the said powers, he shall submit a report on this matter to the Board of Directors for presentation to the General Assembly. He shall also have the right to call for a meeting of the General Assembly for the said purpose. Article (50) The Auditor shall present a report to the General Assembly indicating whether the balance sheet and the profit and loss statement reflect fairly and clearly the financial position of the Company and the result of its operation in accordance with International Accounting standards, whether the Company keeps regular accounts, whether the inventory has been taken if applicable, whether statements set forth in the Board of Directors report agree with the Company s books, whether there have been any violations of the Company s Memorandum of Association or Articles of Association and/or the law during the fiscal year in a way that may affect the Company s activities or its financial status. The Auditor must show, within the available information, whether such violation still exist. The Auditor shall be deemed responsible, in his capacity as a representative of all shareholders, for the accuracy of the statements stated in his report. Every shareholder is entitled to question the Auditor during the meeting of the General Assembly and ask him to clarify matters contained in his report. Article (51) A certain percentage to be determined by the Board of Directors shall be deducted from the gross profits for depreciation of the Company s assets or to cover decline in its value. This money shall be used in purchasing required material, plant and installations or in carrying out repairs thereto. Such amounts shall not be distributed to shareholders. Article (52) Net profits shall be distributed in the following manner: 1. Ten percent (10%) shall be retained from net profits and allocated to the Statutory Reserve Account, unless the Articles of Association did not limit higher percentage. The General Assembly may suspend such retention if this statutory reserve exceeds half of the company s share capital. 2. An amount equal to five percent (1%) of the net profits shall be allocated for payment to the Kuwait Foundation for the Advancement of Science. 3. An allocated percentage may be retained to a Voluntary Reserve Account. Such retention shall only be made by a resolution issued by the General Assembly on the basis of a proposal put forward by the Board of Directors. This deduction will be suspended upon the recommendation of the Board of Directors. 4. A certain portion of profit as proposed by the Board of Directors and determined by the ordinary general assembly shall be allocated to cover the company s obligations under the labour law. These fund may not be distributed to shareholders. Final 11

12 5. An amount shall be deducted as necessary to distribute to the shareholders the first portion of dividends equal to (5%) five percent as decided by the board of directors and approved by the General Assembly. 6. Thereafter, a sum determined by the ordinary General Assembly, shall be allocated as a provision for the remuneration of the board members. However, this sum shall not exceed ten percent (10%) from the balance profit. 7. The remainder will be distributed to shareholders as an additional dividend or will be shifted to the next year as proposed by the Board of Directors or will be allocated as un-ordinary public Statutory Reserve or consumption account. Article (53) Dividends shall be paid to shareholders in the place and at the time determined by the board of Directors. Article (54) The reserve funds shall be used by resolution of the Board of Directors in the manner most beneficial to the interests of the company. The Statutory Reserve shall not be distributed to the shareholders, but it may be used to maintain the distribution of up to five percent (5%) of the Company s capital as dividends to shareholders in years when the Company s profits do not allow such a distribution. If the Statutory Reserve exceeds half of the Company s capital, the General Assembly may decide to use such excess in the manner beneficial to the interests of the company and its shareholders. Article (55) The Company s cash funds shall be deposited in a bank or in a number of banks to be decided by the Board of Directors. The Board of Directors shall determine the maximum amount of cash to be kept in the company's safe, in addition to what law provides as requirement for depositing cash with Central Bank. Three Termination and Liquidation Article (56) The Company shall expire due to any of the causes stated in the Commercial Companies Law. Article (57) The liquidation of Company s assets as may occur upon its expiry shall be conducted in accordance with the provisions of the Commercial Companies Law. Final 12

13 Article (58) For any matter for which there is no specific provision in these Articles of Association, the provisions of Law No. 15 of 1960 (the Commercial Companies Law) and the respective amendments thereto shall apply. The founders declare that: Article (59) DECLERATION 1. The Memorandum and Articles of Association are according to the form specified in article (69) of the Commercial Companies Law. 2. They have subscribed with all the shares allocated to them and deposited it at Boubyan Bank and the percentage is (50%) out of the total capital. 3. They will appoint the first management teams and select the first administrative bodies of the company in the first shareholders meeting in their capacity as the constituent assembly. First Party in his capacity Second Party in his capacity Third Party in his capacity Fourth Party in his capacity Fifth Party in his capacity Sixth Party in his capacity As aforesaid, these articles of association is drawn up and after it is read to the attendees, they signed it. It consists of one original and three copies. It consists of (15) pages and it has no deletions or additions. Final 13