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Wednesday 21 August, 2013

Abu Dhabi Comm Bnk

ADCB - Amended & Restated Articles of Association

RNS Number : 1599M
Abu Dhabi Commercial Bank PJSC
21 August 2013
 





AMENDED AND RESTATED

articles of

association

abu Dhabi commercial

bank -"public joint

stock company"




Chapter One




In these Articles the following expressions shall where the context allows have the meanings set opposite each of them respectively.




'Articles' or 'these Articles', means these Articles of Association as amended from time to time.




'Audit and Compliance Committee', means the Audit and Compliance Committee established by the Board in accordance with Article (30) to consider, amongst other matters, the qualification, independence and performance of the Bank's auditors.




'Board', means the board of directors of the Bank.




'Competent Authority', means the party entrusted in the Emirate of Abu Dhabi with the implementation of the provisions of the Law and/or , as the case may require, the Central Bank of the State and/or , as the case may require, the Securities and Commodities Authority (SCA) of the State.




'Cumulative Voting', means Cumulative Voting as defined in the Ministerial Decree No. 518 for the Year 2009 by the Minister of Economy and Chairman of the Securities & Commodities Authority regarding the Corporate Governance Code and institutional discipline criteria, as the same may be amended from time to time.




'Executive Directors', means Directors who are employed by the Bank on a 'full-time' basis.




'Independent Director', means a Director whose character and judgment are viewed by the Board of Directors as being independent and free of factors which affect or may affect the Director's judgment, and who meets any other criteria for independence as may be set from time to time by the Competent Authority or the Board.




'Law', means Federal Law No. 8 of 1984 concerning Commercial Companies, as amended from time to time.




'Nomination, Compensation & HR Committee', means the Committee established by the Board to consider, amongst other matters, the composition of the Board and the nomination of appropriate directors to the Board and its committees.




'Non Executive Directors', means Directors who are not employed by the Bank on a 'full-time' basis.




'State', means the United Arab Emirates.




Incorporation




ARTICLE (1)            




Abu Dhabi Commercial Bank was incorporated by virtue of the Emiri Decree No. 2 of 1985 issued on 2nd May 1985 between the Government of Abu Dhabi on the first part and a consortium of companies comprising Khaleej Commercial Bank Limited, Emirates Commercial Bank Limited and Federal Commercial Bank Limited on the other part and whose amalgamation was resolved as of 1st July 1985 pursuant to the Executive Council's Resolution No. 90 passed in the Emirate of Abu Dhabi in the Council's session No. 9/85 dated 29th April 1985.




ARTICLE (2)            




The company shall operate under the name Abu Dhabi Commercial Bank Public Joint Stock Company (hereinafter referred to as the "Bank").




ARTICLE (3)            




The Bank's head office and legal domicile shall be situated in the city of Abu Dhabi, United Arab Emirates. However, the Board shall have the right to establish branches, agencies and representative offices thereto within and outside the State.




ARTICLE (4)            




The Bank shall operate for an indefinite term from the date of its incorporation on 1st July 1985. However, the Extraordinary General Meeting shall have the right to define this term or otherwise reduce it having regard to the best interest of the Bank.




ARTICLE (5)            




The objects for which the Bank is incorporated are generally to carry on in the State and in all other parts of the world the business of commercial banking in all its aspects, and to transact and do all matters and things incidental or conducive thereto or which are usually carried on in connection with the business of commercial banking and in particular (but without prejudice to the generality of the foregoing):




(1)       To receive money on current or deposit account or otherwise on any terms as the Bank may approve, and to borrow, with or without security, and to employ and use the same and to guarantee the obligations and contracts of customers and others.




(2)       To deposit, lend or advance money or property, with or without security and generally to make or negotiate loans and advances of every kind.




(3)       To provide import and export finance and finance for other commercial operations and economic activities against personal guarantee, cash securities or liens of movable and immovable properties or otherwise.




(4)       To issue and transact business in respect of all types of bankers' cards and debit and credit cards.




(5)       To grant, issue, negotiate and in any manner deal with letters of credit, travellers' cheques and money orders and drafts and other forms of credits and instruments of every kind.




(6)       To draw, make, accept, endorse, grant, discount, acquire, subscribe or tender for, buy, sell, issue, execute, guarantee, negotiate, transfer, hold, invest or deal in, honour, retire, pay, secure or otherwise dispose of obligations and financial instruments of every kind (whether transferable, convertible, negotiable or not).




(7)       To issue letters of guarantee and bank guarantees and secure direct and collateral guarantees thereof.




(8)       After the approval of a resolution of a General Meeting, to issue bonds (notes) in accordance with the Law.




(9)       To buy, sell and deal-in bullion, specie, precious and other metals, foreign exchange and commodities (including futures) of every kind.




(10)     To open accounts with local and foreign banks and deal with them, and to act as correspondent and agent for local and foreign banks and financial institutions.




(11)     To collect, hold and transmit money and securities and act as agents for the receipt or payment of money or for the receipt or delivery of securities and documents and to establish, maintain or participate in any kind of system for the transmission of funds.




(12)     To receive on deposit or for safe custody or otherwise documents, cash, securities and valuables of every description.




(13)     To organise and manage loans whether extended to the Bank's account or jointly with other banks or for third parties' account and issue loan documents.




(14)     To finance or assist in the financing of the acquisition, hire, lease or sale of real and personal property of every kind, and the provision of services in connection therewith, whether by way of personal loan, hire purchase, instalment finance, deferred payment or otherwise.




(15)     To acquire by assignment or otherwise debts owing to any person or company and to collect such debts.




(16)     To promote, effect, negotiate, offer for sale by tender or otherwise, guarantee, underwrite, secure the subscription or placing of, subscribe or tender for or procure the subscription of (whether absolutely or conditionally), participate in, manage or carry out, on commission or otherwise, any issue, public or private, of the securities of any company, and to lend money for the purposes of any such issue.




(17)     In general, to invest the Bank's funds not immediately required for the purposes of its business in a manner consistent with commercial banking operations and as may be permitted by the laws and regulations in force, whether such investment is made solely by the Bank or jointly with third parties.




(18)     To pay for any property or rights acquired by the Bank, either in cash or fully or partly paid‑up shares (and subject to the Law and to obtaining approvals from the relevant Competent Authority) with or without preferred or deferred or special rights or restrictions in respect of dividend, repayment of capital voting or otherwise, or by any securities which the Bank has power to issue, or partly in one mode and partly in another, and generally on such terms as the Bank may determine.




(19)     To accept any form of payment for any property or rights sold or otherwise disposed of or dealt with by the Bank.




(20)     To sell, mortgage, charge, improve, manage, develop, turn to account, exchange, let on rent, royalty, share of profits or otherwise, grant licences, easements, options, servitudes and other rights in or over, and in any other manner deal with or dispose of, all or any part of the undertaking, property and assets (present and future) of the Bank for no consideration or any such consideration as the Bank may think fit.




(21)     To advertise, market and sell the products of the Bank and of any joint venture, company, firm or person with whom the Bank carries on business.




(22)     To acquire and carry on any business carried on by a subsidiary or a holding company of the Bank or another subsidiary of a holding company of the Bank.




(23)     To enter into any arrangements with any government or authority or person and to obtain from any such government or authority or person any legislation, orders, rights, privileges, franchises and concessions and to carry out exercise and comply with the same.




(24)     To borrow and raise money and to secure or discharge any debt or obligation in any manner and in particular (without prejudice to the generality of the foregoing and so far as permitted by Law) by mortgages of or charges upon all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Bank or by the creation and issue of securities.




(25)     To enter into any guarantee, contract of indemnity or suretyship and in particular (without prejudice to the generality of the foregoing) to guarantee, support or secure, with or without consideration, whether by personal obligation or by mortgaging or charging all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Bank or by both such methods or in any other manner, the performance of any obligations or commitments of, and the repayment or payment of the principal amounts of and any premiums, interest, dividends and other monies payable on or in respect of any securities or liabilities of, any person, including (without prejudice to the generality of the foregoing) any company which is for the time being a subsidiary or a holding company of the Bank or another subsidiary of a holding company of the Bank or otherwise associated with the Bank.




(26)     To enter into any partnership or joint-purse arrangement or arrangement for sharing profits, union of interests or co-operation with any company, firm or person carrying on or proposing to carry on any business within the objects of the Bank, and to guarantee the contracts or liabilities of, or the payment of the dividends, interest or capital of any shares, stock or securities of and to subsidise or otherwise assist any such company.




(27)     To establish or promote or concur in establishing or promoting any other company whose objects shall include the acquisition and taking over of all or any of the assets and liabilities of the Bank or the promotion of which shall be in any manner calculated to advance directly or indirectly the objects or interests of the Bank.




(28)     To purchase or otherwise acquire all or any part of the business, property and liabilities of (i) any company carrying on any business within the objects of the Bank, or (ii) any person or firm carrying on any, business within the said objects, and to conduct and carry on, or liquidate and wind up, any such business.




(29)     To amalgamate with any other company whose objects are or include objects similar to those of the Bank, whether by sale or purchase (for fully or partly paid-up shares or otherwise) of the undertaking, subject to the liabilities of this or any such other company as aforesaid, with or without winding-up, or by sale or purchase (for fully or partly paid-up shares or otherwise) of all or a controlling interest in the shares or stock of this or any such other company as aforesaid, or by partnership, or any arrangement of the nature of partnership, or in any other manner.




(30)     As part of its banking business, to undertake the office of trustee, custodian, treasurer or registrar and to undertake and execute trusts of all kinds.




(31)     To carry on any other business or activity, or to enter into any contracts and take all other legal, commercial, financial and administrative acts which may seem to the Board capable of being advantageously carried on in connection or conjunction with or as ancillary to any of the foregoing businesses or which the Board may consider expedient with a view to rendering profitable or more profitable or enhancing directly or indirectly the value of the Bank's undertaking or any of its property or assets, and to do all such other things as the Board may consider incidental or conducive to the attainment of the Bank's objects.




(32)     To do all or any of the things or matters aforesaid in any part of the world and either as principals, agents, contractors, trustees or otherwise and by or through trustees, agents or otherwise and either alone or in conjunction with others.




(33)     The objects specified in the different paragraphs of this Article shall not, except where the context expressly so requires, be in any way limited or restricted by reference to or inference from the terms of any other paragraph or the name of the Bank or the nature of any business carried on by the Bank.




Chapter Two




The Capital




ARTICLE (6)            




(1)       The subscribed share capital of the Bank at the date of adoption of these Articles is AED 5,595,597,381 (Dirhams five billion five hundred ninety five million five hundred ninety seven thousand three hundred eighty one) divided into 5,595,597,381 (five billion five hundred ninety five million five hundred ninety seven thousand three hundred eighty one) equal shares having a nominal value of AED 1 (one Dirham) each.




(2)       Subject to any other restrictions contained in these Articles, shares may be owned, transferred to or otherwise held by any person, firm or company, whether public, private or state-owned, provided that not more than the maximum percentage of shares permitted by the laws of the State to be held by persons or other entities who are not nationals of the State, shall be held by persons or other entities who are not nationals of the State.




 




(3)       The share capital of the Bank may be increased, sub-divided, consolidated, and reduced subject to the provisions of the Law and of these Articles. Where the share capital has increased as a result of conversion of bonds (whose issuance was previously approved by the Central Bank), the Bank shall issue a notification to Central Bank.




Chapter Three




Capital Amendment




Capital Increase




ARTICLE (7)            




(1)       It shall be permissible by a resolution of an Extraordinary General Meeting and upon recommendation of the Board to increase the share capital of the Bank provided that its subscribed capital has been paid up in full. Any decision to increase the Bank's share capital shall only be effective and valid with the approval of the relevant Competent Authority.




             The Extraordinary General Meeting may authorise the Board to determine the date of implementing this resolution provided that such date shall not be more than five years from the date of passing the resolution, failing which the resolution shall be null and void.




(2)      The resolution shall determine the amount of the increase in share capital and the price at which the new shares shall be issued. The nominal value of each new share shall be equal to the nominal value of each original share. An Extraordinary General Meeting may resolve to add an issue premium to the nominal value of the shares conditionally on the approval of the relevant Competent Authority. The said premium shall be added to the legal reserve even though the latter would thereby exceed half of the capital.




(3)       Subscription for the new shares shall be governed by the regulations concerning subscription for the original shares.




(4)      The existing shareholders shall be entitled to priority in the subscription for the new shares.




(5)       The Chairman of the Board shall publish an announcement in two daily newspapers published in the Arabic language advising the shareholders of their right of priority in the subscription, the dates of its opening and closing and the price of new shares.




Shareholders wishing to exercise their right of pre-emption referred to above shall subscribe for new shares within the period specified for their subscription.




(6)       The distribution of shares to the shareholders seeking subscription shall be proportional to their shareholding provided that this does not exceed the quantity for which each applies. Any remaining shares shall first be distributed proportionally to the shareholders who have applied in excess of the proportion that they already hold, and any remaining shares shall be offered for public subscription.




(7)       The integration of reserves into capital shall be effected by means of free shares to be distributed to the shareholders in proportion to the shareholding of each of them or by increasing the nominal value of the share in proportion to the increase in the capital, and no financial obligation shall be incurred by the shareholders as a result thereof.




(8)       The conversion of stocks into shares shall be made by allocating the reserve capital or any part thereof for this purpose.




Capital Reduction




ARTICLE (8)            




(1)       On the recommendation of the Board and after consideration of the auditor's report and subject to the approval of the relevant Competent Authority, the Bank's capital may be reduced by resolution of an Extraordinary General Meeting in either of the following two circumstances:




(a)       If the capital exceeds the Bank's requirements.




(b)      If the Bank has sustained a loss which cannot be made up from future profits.




(2)       The capital shall be reduced by any of the following methods, as may be approved by resolution of the Extraordinary General Meeting:




(a)       Reducing the nominal value of the share either by refunding the same to the shareholders or by releasing them from their liability in respect of all or part of any amount unpaid thereon;




(b)      Reducing the value of the shares by cancelling part thereof equivalent to the losses;




(c)      Cancellation of a number of shares equivalent to the size of the reduction; or




(d)      Purchase by the Bank of a number of shares equivalent to the portion to be reduced and their destruction.




             The resolution of the Extraordinary General Meeting shall specify which method is to be applied in the reduction.




(3)       The Board shall publish the resolution regarding capital reduction in two daily local newspapers published in the Arabic language.




Chapter Four




Subscription for Shares




ARTICLE (9)            




Invitation for public subscription shall be made by means of a prospectus the wording of which has been approved by the relevant Competent Authority, and announced in two (2) daily local newspapers published in the Arabic language at least five (5) days prior to the commencement of subscription period. Apart from the summary of the Memorandum of Association and Articles, the subscription prospectus should provide the following details:




(1)        The maximum number of shares which may be subscribed by one person.




(2)        Date, place and conditions of subscription.




(3)        The percentage of ownership of shares by nationals of the State and conditions concerning the transfer of shares.




(4)        Summary of the Bank's most recent audited profit and loss account and balance sheet.




(5)        Any other matters which may affect the shareholders' rights or liabilities.




The prospectus shall in addition comply with all applicable laws of the Emirate of Abu Dhabi and the State and all rules and regulations of the relevant Competent Authority.




ARTICLE (10)          




Subscription shall be made through one or more banks designated by the Board from the banks operating in the State. Instalments due at the time of subscription shall be paid to the said bank(s).




ARTICLE (11)          




Subscription for shares shall be made pursuant to an application form which shall include, in particular, details concerning the name of the Bank, its objects, capital, conditions of subscription, name of subscriber and his address, his occupation and nationality, and the number of shares he wishes to subscribe, together with an undertaking on his part to comply with the Bank's Memorandum of Association and Articles. Subscription shall be unconditional, and any contrary stipulation made by the subscriber shall be void. The subscriber may obtain a copy of the Bank's Memorandum of Association and Articles on payment of any fee specified in the prospectus.




ARTICLE (12)          




The amount of each share to be paid at the time of subscription shall be determined by the Board but shall be not less than one quarter of its nominal value. The Board shall determine the methods and dates on which the balance (if any) of amounts payable on the shares shall be paid.




ARTICLE (13)          




No financial facilities or loans may be provided by the Bank to assist with the acquisition of its shares. This restriction shall apply in particular, but without limitation to any employee incentive plans implemented pursuant to Article 23(2)




ARTICLE (14)          




Subscription shall remain open for not less than ten (10) days and not more than thirty days during which period all the shares shall be available for public subscription. If the shares are not fully subscribed during this period, the Board may with the approval of the relevant Competent Authority extend the subscription period for a further period not exceeding thirty (30) days.




ARTICLE (15)          




If the period referred to in Article (14) lapses and, at such time, the shares are not fully subscribed, the Board shall reduce the Bank's capital by the amount of the unsubscribed shares.




ARTICLE (16)          




If the subscription exceeds the number of shares offered, the shares shall be allocated to the subscribers in proportion to the number of shares for which they have subscribed, and allocation shall be made on the basis of the nearest whole share.




Chapter Five




Board




ARTICLE (17)          




(1)        The management of the Bank shall be vested in the Board which shall comprise of eleven (11) members.




(2)        During such time that Abu Dhabi Investment Council or entities wholly-owned by Abu Dhabi Investment Council hold in excess of fifty percent (50%) of the share capital in the Bank, Abu Dhabi Investment Council may appoint such number of members of the Board as corresponds to its proportion of shares in the issued share capital of the Bank. To the extent that Abu Dhabi Investment Council applies all of its votes in securing the appointment of its entitled number of members of the Board, Abu Dhabi Investment Council shall not have votes to cast in relation to the appointment of any other members of the Board. Likewise if Abu Dhabi Investment Council does not apply all of its votes in relation to the appointment of those members of the Board to which it is entitled to appoint, the principles of Cumulative Voting shall apply and it may cast its votes in relation to the election of such other proposed members of the Board as it deems fit.  . Subject as aforesaid, Abu Dhabi Investment Council will have absolute discretion as to the identity of any individual that it nominates for appointment to the Board. For the avoidance of doubt, any such individuals nominated for appointment shall (in common with other candidates) require the approval of the Central Bank before their appointment to the Board.




(3)        The Chief Executive Officer shall be appointed as a member of the Board.




(4)        A majority of the Board shall consist of Non-Executive Directors. At least one-third of the members of the Board shall be Independent Directors.




(5)        Members of the Board not appointed by Abu Dhabi Investment Council shall be elected by resolution of the Annual General Meeting from amongst those persons approved for election by the Nomination, Compensation & HR Committee. In particular, the Committee shall consider each candidate's profile and experience and the specific requirements of the Board at that time. Votes shall be cast for such candidates by shareholders by means of Cumulative Voting. Shareholders who wish to nominate candidates for election to the Board may do so at any time by sending written notice to the Chairman or Board Secretary, except that no nomination may be accepted less than 10 days before the relevant AnnualGeneral Assembly..




(6)        There shall be no requirement for members of the Board to hold shares in the Bank.




(7)        At a General Meeting where it is proposed that new members be elected to the Board, the Nomination, Compensation & HR Committee shall provide to the shareholders an overview of the professional experience and qualifications of the proposed new member of the Board before voting takes place with respect to their election.




ARTICLE (18)          




(1)        Subject to paragraph (2) of this Article, members of the Board shall hold office for a term of three years, at the end of which they shall resign, but shall be eligible for re-election or re-appointment, as the case may be, on each occasion.




(2)        At each Annual General Meeting one-third (1/3) of the members of the Board, excluding the Chief Executive Officer, must submit themselves for re-election or (in the case of the members of the Board appointed by Abu Dhabi Investment Council) re-appointment and the Board (receiving recommendations from the Nomination, Compensation & HR Committee) shall submit its members for re-election or re-appointment (as appropriate). The Board shall decide on suitable transitional arrangements to determine which directors must submit themselves for re-election or re-appointment (as appropriate) at the two (2) Annual General Meetings following adoption of these Articles in order to facilitate retirement by rotation such that over a three (3) year period all members of the Board (other than the Chief Executive Officer) must either have retired or submitted themselves for re-election or re-appointment.




(3)           Subject as aforesaid, the Board may appoint a director to fill a vacancy arising in the Board. Such appointment shall be presented to the following General Meeting after such appointment, in order to confirm the appointment.




(4)        If the number of positions becoming vacant during the year reaches one quarter or more of the members of the Board, the Board must call a General Meeting, to be held no later than three months from the date of the last position becoming vacant, for the purpose of electing persons to fill the vacant position. Abu Dhabi Investment Council shall have the right to appoint a substitute director to replace any of its appointees in accordance with paragraph (2) of Article (17).




The Board shall elect a Chairman from one of its members who shall be a national of the State and who shall not be the Chief Executive Officer. The members of the Board shall also elect from among their number a Vice-Chairman who shall act as the Chairman in the latter's absence.




ARTICLE (19)                                           

With the assistance of the Board Secretary, the Chairman shall prepare and approve the agenda for Board meetings, be responsible for leadership and effectiveness of the Board, encourage Board members to participate in meetings, take all necessary steps to ensure collaboration between the shareholders and the Board and establish and maintain good relations between executive and non-executive Board members.




ARTICLE (20)  




The Board shall appoint a Chief Executive Officer from candidates recommended by the Nomination, Compensation & HR Committee. The Board shall specify the powers of the Chief Executive Officer and (on the recommendation of the Nomination, Compensation & HR Committee) decide on his remuneration. The Chief Executive Officer shall implement the decisions issued by the Board, abide by the recommendations thereof and manage the Bank's activities on a day-to-day basis. The Chief Executive Officer may delegate powers vested in him to the Bank's officers or employees.




ARTICLE (21)          




The majority of members of the Board shall be nationals of the State.




ARTICLE (22)          




The Bank shall immediately prior to 1st January of each year provide the relevant Competent Authority with a list, certified by the Chairman of the Board, showing the names, capacities and nationalities of the Chairman and members of the Board. The Bank shall immediately advise the relevant Competent Authority of any changes that may occur to the said list.




ARTICLE (23)          




(1)        The Board shall have full power and authority to do everything which may be required or desirable for the Bank's management and operation and conducive to attaining its objects. Such powers and authorities vested in the Board shall not be limited except as provided by laws of the State, these Articles or the resolutions of the General Meeting. The Board is specifically authorised to lay down the necessary rules relating to the organization of works and management of the Bank's operations, appoint a Chief Executive Officer, heads of departments and senior staff, approve their remuneration and specify the scope of duties of each of them. The Board shall specify regulations for acquisition and disposal of the Bank's property and assets of all kind. The Board may contract loans for any term, dispose of or mortgage any of the Bank's real estate or other property and assets, release the Bank's debtors and make agreements and arrangements for arbitration without the approval of a General Meeting.




         The Board shall also make decisions concerning loans, debentures, determine the term loans ceiling, appoint lawyers to act on the Bank's behalf, authorise the institution of lawsuits, defend the Bank's interests before the courts of law whether acting as plaintiff or defendant, enter into conciliation or arbitration, settle lawsuits, abandon and relinquish any right of privilege, with or without consideration, and make decisions on the application of the Bank's funds. In making such decisions, the Board shall always have regard to the Central Bank's circulars and regulations.




(2)     For the purpose of encouraging excellent and diligent performance by the Bank's employees and attracting able and efficient employees to work in the Bank, the Board shall have the right if permitted by Law to implement employee share option plans and/or any other form of long term incentive plans. In respect of any such plan, the Board shall, in good faith and from time to time, be entitled to determine the participants in the plan, the number of shares to be offered to each participant, the option exercise price (if any) and the option period (if any) and/or any other rules regarding the operation of any such plans.




         In the event that any employee share option plan requires an increase in the subscribed share capital of the Bank and if permitted by laws applicable in the State, then future issues of shares to establish or implement any such share option plan may not be made unless duly approved by the shareholders as required by the Law. Further, the subscribed share capital of the Bank may not be increased by more than 20% of the subscribed share capital in any five (5) year period for the purpose of establishing and implementing any such plans requiring an increase in the subscribed share capital of the Bank.

         For the avoidance of doubt, any plans established pursuant to this article shall be restricted by Article 13.




(3)     The Board shall appoint a secretary (the "Board Secretary") to perform the Board's secretarial works in addition to any other duties that may be entrusted to him, and the Board shall fix his salary and other benefits.




(4) The Board may delegate any of its powers to the Chief Executive Officer appointed by the Board or to any committee of management. Any such delegation shall be made in accordance with, amongst other things, any  guidelines provided by the Central Bank with regards to the powers of a chief executive officer. The Chief Executive Officer or respective management committee may further delegate those powers as permitted by the Board's delegation and any guidlines issued by Central Bank.  




ARTICLE (24)          




The Chairman, Vice Chairman, the Chief Executive Officer, members of the Board, members of the senior management and officers of the Bank shall individually have the right to exercise powers, authorities, discretions and functions and do any acts and sign any documents and to delegate such powers, with power to sub-delegate, any of the same, on behalf of the Bank, as is prescribed in any power of attorney which may be granted to them from time to time by the Board. A written list of all such authorisations shall be maintained by the Board Secretary.


 


The Bank shall be bound by the actions of duly authorised persons within the limits of their authority and shall be liable to compensate for loss or damage arising from breach of the Law, the Articles or any other illegal acts committed by such authorised persons in the course of fulfilling their authorised duties. Such authorised persons shall not be held personally liable in connection with the Bank's undertakings by reason of them having carried out their duties to the extent that they do not exceed the scope of their authorities.




ARTICLE (25)          




(1)   The Board shall hold its meetings at the head office of the Bank or at any other place deemed appropriate by the Board as often as the need may arise and in any event not less than once in every two (2) months.

(2)   Board meetings shall be convened upon a written notice by the Chairman, the Vice Chairman, or the Board Secretary on their behalf. Board Meetings may also be convened by the Chairman or the Board Secretary on the request of two (2) members of the Board or the Chief Executive Officer.

(3)    Where practicable, notice of Board meetings together with an agenda and sufficient relevant supporting information to enable the Board to reach well considered decisions, shall be provided to the members of the Board at least one (1) week before the meeting is due to be held. Meeting materials may be provided to the members of the Board by way of a secured Board portal. Each member of the Board shall have the right to add any matter that he deems appropriate to the agenda, after consultation with the Chairman.




(4)    No meeting of the Board shall be valid unless a majority of its members are in attendance or represented. It shall be permissible for a member of the Board to depute another member of the Board to vote on his behalf in which case, such a member shall have two (2) votes. It shall not be permissible for a member of the Board to act as proxy for more than one (1) other member.




(5)   Resolutions of the Board shall be adopted by majority of the members present or represented, and if there are an equal number of votes the Chairman or acting Chairman shall have a casting vote. It shall not be permissible to vote by correspondence.




(6)   A resolution in writing signed by the  majority of the members of the Board shall be as valid and effective as if it had been passed at a meeting of the Board duly convened and held and may consist of several documents in like form signed by one (1) or more members of the Board.




(7)  The minutes of the meetings of the Board shall be retained by the Board Secretary and filed in a special register. All the minutes recorded in the register shall be signed by the members who attended the meeting and by the Board Secretary and copies of such minutes shall be provided to each member of the Board. Qualifications, controversial opinions and objections arising during the course of a Board meeting shall all be recorded in the minutes of the meeting in which the qualification, controversial opinion or objection was raised.




(8)   Members of the Board, the Chief Executive Officer, the Board Secretary, the Bank's General Counsel and delegated officers of the Board Secretariat, are each authorised by the Bank individually to provide certified copies of extracts taken from the minutes of any Board meeting, by signing such extracts, identifying that it is a certified or true copy of the original and including the date that the certification is provided. Any party dealing with the Bank may rely absolutely on such certified copy as being a true and accurate copy of the original document.




ARTICLE (26)          




A member of the Board shall cease to be a director if he resigns from his office as a director and, if he has not in fact resigned, shall be deemed to have resigned his membership in the following cases:




(1)       If he fails to attend three consecutive Board meetings without an excuse acceptable to the Board;




(2)       If he holds in his personal capacity or as a representative of any corporate person the position of a member of Board with any other commercial bank operating in the State;




(3)       If he is convicted of any crime or other offence involving dishonesty or immorality unless he is reinstated or receives an amnesty from the competent authorities, if amnesty is applicable for such offences;




(4)       If he is declared bankrupt;




(5)       If he discloses any information detrimental to the Bank's interests and which he became aware of in the course of his being a member of the Board; or




(6)       If he is dismissed pursuant to the provisions of Article (29).




ARTICLE (27)          




The Bank shall be bound by the actions of the Board within the limits of the Board's authority and shall be liable to compensate for loss or damage arising from breach of the Law, the Articles or any other illegal acts committed by the members of the Board in the course of their management of the Bank. The members of the Board shall not be held personally liable in connection with the Bank's undertakings by reason of them having carried out their duties to the extent that they do not exceed the scope of their authorities.




ARTICLE (28)          




The Chairman and members of the Board shall be liable towards the Bank and the shareholders and to others in respect of all acts of deceit, misuse of the authority granted to them, mismanagement and any breach of the Law or these Articles.




ARTICLE (29)          




The General Meeting shall have the right to dismiss any or all members of the Board, and, subject to Article (17), elect new members in replacement of them after notifying the relevant Competent Authority accordingly. A director who is dismissed under Article 29 of these Articles shall not be eligible to become a director of the Bank for a period of three (3) years after his dismissal.




ARTICLE (30)                                           




(1)       A member of the Board shall notify the Board (such notification to be confirmed in writing) of any direct or indirect interest or duty which conflicts or may conflict with the interests of the Bank. This notification shall be recorded in the Board's minutes of meetings.




(2)       If such conflict of interest relates to a matter upon which the Board will conduct a vote the member having such interest shall be counted in the quorum present but shall not be permitted to take part in any approval, discussion or voting relevant to such conflict, and, if he does vote, his vote shall not be counted.




(3)       If any member of the Board fails to comply with the provision of the preceding paragraph (1) of this Article, the Bank shall have the right to require the said member to account for and pay to the Bank the benefits gained by him from any  transaction or contract executed in circumstances of conflict and from which he derived any personal interest. Further, the Bank may claim from the said member compensation amounting to any increased cost or loss which the Bank might have sustained or incurred as a result of that contract or transaction and the said member shall pay that amount to the Bank.




(4)       Loans granted to members of the Board will be on commercial terms and not in excess of the sureties offered pursuant to the regulations and rules of the relevant Competent Authority to this effect.




(5)        The Nomination, Compensation & HR Committee shall devise remuneration policies for the Chairman, members of the Board, members of the committees, senior management and other employees of the Bank and provide recommendations as to these individuals' remuneration. Shareholders shall at each Annual General Meeting, and following receipt of the recommendations of the Nomination, Compensation & HR Committee, vote on the remuneration payable to the Chairman, members of the Board and members of the committees, and any subsequent changes to such remuneration. This Article shall not apply to any remuneration payable to a member of the Board in his executive function, such matters being decided by the Board following receipt of the recommendations of the Nomination, Compensation & HR Committee. The remuneration of the Board shall be paid only if the Bank makes a net profit, which shall be calculated by deducting depreciation, reserves and any distribution of profits to shareholders, in compliance with Article (80). Under no circumstances shall the remuneration of the Board exceed ten percent (10%) of the net profit of the Bank in a given year.




Committees




ARTICLE (31)                                           




(1)       The Board may delegate all or any of its powers, authorities, discretions and functions to any committees (including Board or management committees) on such terms and conditions as it may think fit. The composition, powers, authorities, discretions and functions of a committee shall be set out by the Board in terms of reference provided by the Board to that committee. Any Board committee shall consist only of directors.




(2)       Any such committee shall in the exercise of the powers, authorities, discretions and functions so delegated conform to any regulations which may from time to time be imposed by the Board.




(3)       The Board may authorise any such committee to sub-delegate all or any of the powers, authorities, discretions and functions delegated to it, to any director, sub-committee or any member of the Bank's management or management committee and the Board may at any time dissolve any such committee or sub-committee or cancel, vary or suspend any delegation made to any director, sub-committee, management committee or member of the Bank's management. Insofar as any power, authority, discretion or function is delegated to a committee or a sub-committee, any reference in these Articles to the exercise by the Board or management of the power, authority, discretion or function so delegated shall be read and construed as if it were a reference to the exercise thereof by such committee or sub-committee.




(4)       The meetings and proceedings (including without limitation the conduct of business by written resolution) of any such committee or sub-committee shall be governed by the provisions of these Articles regulating the meeting and proceedings of the Board, so far as the same are applicable and are not superseded by any regulations made by the Board under this Article .




(5)       The Bank shall be bound by the actions of any committee (including Board or management committees) or sub-committee or persons duly authorised by any such committee or sub-committee, within the limits of their authority and shall be liable to compensate for loss or damage arising from breach of the Law, the Articles or any other illegal acts committed by any members of a committee or sub-committee or persons duly authorised by any such committee or sub-committee in the course of them fulfilling their authorised duties. The members of committees, sub-committees and those persons authorised by such committees and sub-committees, shall not be held personally liable in connection with the Bank's undertakings by reason of them having carried out their duties to the extent that they do not exceed the scope of their authorities.




(6)       Directors of the Bank shall ensure compliance with the laws, rules and regulations, and all disclosure requirements of the laws of the State and of any financial market on which the Bank's shares and securities are listed.




(7)        In particular, the Board shall establish the following permanent committees:




(a)       An Audit & Compliance Committee; and




(b)       A Nomination, Compensation & HR Committee.




Each of these permanent committees shall have not less than three Non Executive Directors, two of whom shall be Independent Directors.




The Chairman of each of these committees shall be an Independent Director.

 


These committees shall have the responsibilities specified by the Board from time to time.

 


Chapter Six




1- General Meetings




ARTICLE (32)          




A General Meeting of the shareholders shall be convened by the Board at least once a year within the four (4) months following the end of the financial year at such time and place in the city of Abu Dhabi as the Board shall decide, which shall be referred to in these Articles as the Annual General Meeting.




The Board may also call a General Meeting to be held as and when deemed necessary.




A reference in these Articles to a General Meeting shall refer to an Annual General Meeting, an Extraordinary General Meeting and any other convened meeting of the shareholders, unless otherwise specified.




ARTICLE (33)                                           




 When requested to do so by the auditors, the Board shall convene an Annual General Meeting. If the Board fails to convene the meeting within 15 days of the auditor's request, the auditor may directly convene the Annual General Meeting.


 


Any shareholder or group of shareholders who together hold at least thirty percent 30% of the Bank's capital, may request the Board to convene a General Meeting,. Upon the Board's failure to do so within fifteen 15 days, the said shareholders may require the relevant Competent Authority to send the notice of meeting in the following cases:




1.   If thirty 30 days have lapsed from the date specified in Article (32) above (i.e. 4 months after year end) without the General Meeting having been called;




2.   If the number of members of the Board falls below the minimum number required for quorum at its meetings; or




3.   If at any time there appears to have been a violation of the law or the Bank's articles of association or mismanagement of the Bank.




In the event that the Ministry and relevant Competent Authority calls the General Meeting [as per above], one or more representatives may be delegated on their behalf to attend the General Meeting as an observer, with no right to vote, and their attendance shall be recorded in the minutes of the meeting.






ARTICLE (34)                                           




Notices of General Meetings shall be given to shareholders, after obtaining SCA's approval, by publishing a  notice of the meeting and the agenda in two (2) daily local newspapers, published in the Arabic language, and by registered mail to each shareholder (and, in the case of the Annual General Meeting, together with the Board's report and auditor's report), of which notice shall be given at least twenty one (21) days before the date specified for holding the meeting. A copy of the notice and agenda of the same shall also be sent to the SCA within the time frame set in Article (34) of these Articles.




ARTICLE (35)          




The General Meeting shall be authorized to review all matters relating to the Bank except those matters which are reserved by Law or these Articles for the Extraordinary General Meeting, and where the General Meeting is the Annual General Meeting, matters stipulated in Article (36) shall be included for review. The General Assembly shall not consider matters if not mentioned in the agenda. However, the Assembly may deliberate on significant matters discovered during the meeting




(1)       If the Abu Dhabi Investment Council's representatives or shareholders holding at least ten percent 10% of the Bank's capital express a request for the inclusion of specific matters on the agenda, the Board shall be obliged to comply with the aforementioned request, failing which the General Meeting shall have the right to discuss the matters in question.




 




ARTICLE 36

The following matters shall be included in the agenda of the Annual General Meeting:




(1)           The report of the Board on the Bank's activities and its financial position during the preceding year, and the report of the auditors and the approval thereof.




(2)A discussion of the Bank's balance sheet and profit and loss account and the approval thereof.




(3) The election of members of the Board where necessary, the appointment of the auditors and the determination of their fees.




(4) The Board's proposals with respect to the distribution of profits.




 (5)  Discharging the members of the Board and the auditors from liability or resolving to initiate legal proceedings against them, as the case may be, in accordance with applicable laws and regulations in this regard.

 




ARTICLE (37)          




Each shareholder shall have the right to attend the General Meeting, and shall be provided with full and accurate information in relation to any resolution proposed to be voted on at the aforementioned meeting. Furtheremore, each  shall have a number of votes equal to the number of his shares.

 




A shareholder may authorise another person (who is not a member of the Board) to attend the General Meeting on his behalf by a special written authorization duly authenticated or by means of written delegation on a form of proxy approved by the Board for this purpose.




The proxy shall:




(1)  not be a member of the Board;




(2)  have full legal capacity; and,




(3)  not represent more than 5% of the Bank's capital (in a personal and/or representative capacity).




ARTICLE (38)          




Shareholders who do not have legal capacity shall be represented by their legal representatives.




ARTICLE (39)          




The Chairman or Vice Chairman or a person appointed by the Board for that purpose shall chair the General Meeting and, if those persons are not present at the meeting, the General Meeting shall appoint from among the shareholders a chairman for that meeting. The General Meeting shall also appoint




 




two or more persons to check and regulate the voting process at the meeting.




If the General Meeting is to discuss a matter relating to the Chairman, the General Meeting shall elect one of the shareholders to chair the meeting.




ARTICLE (40)  




The necessary quorum for a General Meeting, other than an Extraordinary General Meeting, shall be the attendance by shareholders representing (either personally or by proxy) at least fifty percent (50%) of the Bank's capital. If the said quorum is not achieved at the first meeting, the General Meeting shall be called to a second meeting to be held not less than seven (7) days and not more than thirty (30) days after the date of the first meeting. The second meeting shall be considered valid irrespective of the number of shareholders present.




Resolutions of a General Meeting shall be adopted by the absolute majority of the shares represented at the meeting, subject to the provisions of Articles (43) and (52).




ARTICLE (41)  




Shareholders shall enter their names in an electronic register for that purpose at the place specified by the notice convening the General Meeting. The register shall close fifteen (15) minutes before the specified time of the General Meeting. The register shall contain the names of shareholders, the numbers of shares held or represented by them and, in the case of representatives, the names of their holders must be stated together with whether the representatives are authorised by means of a special written authorization duly authenticated or by means of written delegation on a form of proxy approved by the Board for this purpose.




ARTICLE (42)          




Every shareholder shall have the right to discuss the issues included in the agenda of the General Meeting and to address questions to the members of the Board and to the auditors, who shall be obliged to answer the questions so long as this is not detrimental to the Bank's interests.




Furthermore, a shareholder may appeal to the General Meeting if he considers that the reply to his question is insufficient, and the General Meeting's decision shall be implemented.




ARTICLE (43)          




Voting on resolutions of a General Meeting shall be made by show of hands or ballot or, if permitted by the Law at any time, electronically, but, if it relates to the election, dismissal or impeachment of the members of the Board, shall be by means of confidential Cumulative Voting.




ARTICLE (44)          




Members of the Board must not vote on resolutions of the General Meeting relating to the release of their liabilities of management or other matters or on resolutions relating to their private interests or to disputes arising between them and the Bank.




ARTICLE (45)          




Minutes shall be prepared for the General Meeting which shall include the names of the shareholders present or represented, the number of shares which they hold in their own right or by proxy, the number of votes they hold in their own right or by proxy, the passed resolutions, the number of votes for and against and an adequate summary of the discussions which took place in the course of the meeting.




ARTICLE (46)          




Minutes of the General Meeting shall be recorded regularly following each meeting in a special register, which shall be maintained in accordance with the Law. All recorded minutes in the register shall be signed by the Chairman of the General Meeting, the reporter, the teller and the auditor.




The signatories to the minutes of meetings shall be responsible for the accuracy of the information stated in the minutes.




Members of the Board, the Chief Executive Officer, the Board Secretary, the Assistant Board Secretary and the Bank's General Counsel are each authorised by the Bank individually to provide certified copies of extracts taken from the minutes of General Meetings, by signing such extracts, identifying that it is a certified or true copy of the original and including the date that the certification is provided. Any party dealing with the Bank may rely absolutely on such certified copy as being a true and accurate copy of the original document.




ARTICLE (47)          




Resolutions of a General Meeting adopted in accordance with the provisions of the Law and these Articles shall be binding on all the shareholders whether they were present or absent, and whether they voted in favour or against such resolutions.




The Chairman shall be obliged to implement resolutions of a General Meeting and shall submit a copy thereof to the relevant Competent Authority within fifteen (15) days of the said resolutions being passed.




ARTICLE (48)          




Without prejudice to the rights of bona fide third parties, all decisions made in contravention of the provisions of Law or of these Articles shall be null and void.




2 - Extraordinary General Meeting




ARTICLE (49)          




Subject to the powers contained herein, the Extraordinary General Meeting shall be vested with the power to amend the Bank's Memorandum of Association and Articles. However, the Extraordinary General Meeting shall not make any amendment to the Articles, which would result in increasing the shareholder's burdens or otherwise amend the Bank's main objects or transfer its head office to a foreign country.




The Extraordinary General Meeting shall also be vested with the following powers:




(1)        To increase or reduce the Bank's capital;




(2)        To dissolve the Bank or merge it with another company; and




(3)        To sell or otherwise dispose of any enterprise undertaken by the Bank.




Unless otherwise specified, the provisions relating to General Meetings (as per Chapter six of these Articles) shall be applicable to Extraordinary General Meetings.




ARTICLE (50)  




An Extraordinary General Meeting shall only be convened at the request of the Board. The Board shall be obliged to do so if so requested by any shareholder representing at least thirty percent (30%) of the Bank's capital or shareholders together representing at least thirty percent (30%) of the Bank's capital. If the Board fails to issue the notice of meeting within fifteen (15) days from the date of such request, the requesting shareholders may ask the relevant Competent Authority to issue the invitation. The relevant Competent Authority shall send the invitations following any necessary deliberations with any other Competent Authority.




The relevant Competent Authority may send one or more representatives to attend the meeting without voting rights. The said representatives' presence shall be recorded in the minutes of meeting.




ARTICLE (51)  




The necessary quorum for an Extraordinary General Meeting shall be the attendance by shareholders representing at least (75%) seventy-five percent of the Bank's capital. If the said quorum is not achieved at the first meeting, this assembly shall be called to a second meeting to be convened to be held not less than seven (7) days and not more than thirty (30) days after the date of the first meeting. The second meeting shall not be quorate unless it is attended by shareholders representing at least (50%) fifty percent of the Bank's capital.




If the said quorum is not achieved at the second meeting, this assembly shall be called to a third meeting to be convened to be held not more than thirty (30) days after the date of the second meeting. The third meeting shall be quorate irrespective of the number of shareholders present or represented, provided that the resolutions of the Extraordinary General Meeting in this case shall not be valid and effective without the approval of the relevant Competent Authority.




ARTICLE (52)  




Resolutions of an Extraordinary General Meeting shall be passed by the majority of the shares represented at the meeting unless the same relate to an increase or decrease of capital, fixing the Bank's term, to the extension of the duration of the Bank or its dissolution before the date specified (if any) in the Articles, merger of the Bank with another company or its conversion or amendments to these Articles. In such cases, the resolutions shall not be valid unless passed by (75%) seventy five percent or more of the shares represented at the meeting.








ARTICLE (53)          




The Chairman shall be obliged to implement resolutions of an Extraordinary General Meeting and shall submit a copy thereof to the relevant Competent Authority within (15) fifteen days of the said resolutions being passed.




ARTICLE (54)          




Resolutions of an Extraordinary General Meeting relating to the amendment of these Articles shall not be binding unless approved by the relevant Competent Authority. Procedures prescribed for registration of the Articles shall also apply to resolutions amending the Articles.




Chapter Seven




Auditors




ARTICLE (55)          




The Bank shall have one or more auditors who, subject to their prior approval by the Audit & Compliance Committee, shall be appointed by the Annual General Meeting for a renewable period of one year. The Annual General Meeting shall determine the auditors' fees.




ARTICLE (56)          




The auditors shall be responsible to the Bank for the audit and for the accuracy of information contained in their report and for compensation for damage incurred by the Bank resulting from their actions in the course of discharging their duties.




ARTICLE (57)          




The auditors shall audit the Bank's accounts and examine the balance sheet and profit and loss account and ensure compliance with the application of Law and the provisions of the Articles. Further, the auditors shall present a report on their examination to the General Meeting and send a copy thereof to the relevant Competent Authority at least (21) twenty-one days before the General Meeting.




ARTICLE (58)          




The auditors shall have the right at all times to examine all books, records, ledgers and papers and any other documentation of the Bank. The auditors may request any clarifications that they consider necessary in order to discharge their functions, and may also verify the assets and liabilities of the Bank, and the Chairman must facilitate this for them.




If the auditors are not given the facilities to perform their duties they must state this fact in a written report to be submitted to the Board. If the Board does not enable the auditors to carry out their functions, the auditors must send a copy of the report to the relevant Competent Authority, and must present the report to the General Meeting.




ARTICLE (59)          




If the Board fails to send a notice convening an Annual General Meeting in cases where the Law requires a meeting to be held the auditors shall send such notice and may also do so whenever the need is urgent, and in such cases, the auditors shall prepare and publish the agenda.




ARTICLE (60)          




The auditors must be independent from the Bank and should not have any direct or indirect relationship of any kind with the Bank which could interfere with their independence. In particular, the auditors shall not carry out any extra work or consultancy work that might influence their independence. The auditors shall report any compliance infringements or obstacles they face to the Audit & Compliance Committee and internal audit, or to appropriate Competent Authorities if the Board does not take necessary steps to resolve the issues. The auditors must maintain the confidentiality of the Bank's secrets, and shall not divulge to the shareholders except in the General Meeting or to any third parties, any secrets of which they become aware as a result of their employment with the Bank. Otherwise the auditors may be dismissed and compensation may be claimed from them.




ARTICLE (61)          




The auditors must attend the Annual General Meeting and shall give their opinion in the meeting on all the aspects of their work, and particularly on the Bank's balance sheet and shall read out their report to the General Meeting, which should include the following information:




(1)        Whether the auditors have obtained the information which they deem necessary to discharge their functions satisfactorily.




(2)        Whether the balance sheet and the profit and loss account are consistent with the true state of affairs and include everything which the Law and these Articles require to be stated therein, and whether they clearly and honestly reflect the actual financial position of the Bank.




(3)        Whether the Bank has kept regular accounts.




(4)        Whether the stocktaking has been carried out according to the regulations in force.




(5)        Whether the information set out in the Board's report is consistent with the Bank's books.




(6)        Whether within the limits of the information available to them, there have been any breaches of the provisions of Law or the Articles which occurred during the financial year and which affect the Bank's activities or its financial position and whether such violations are still existing.




If the Bank has more than one auditor, they shall share the duties between them, and each of them shall submit an independent report on the assignment entrusted to him, and the auditors collectively shall submit a report for which they shall be jointly liable.




The auditor's report shall be read out at the Annual General Meeting, and each shareholder shall have the right to discuss the same and to request clarification of the matters contained therein.




Chapter 8




Instruments




Instruments Issued by the Bank:




Shares and Loan Debentures




1 - Shares




ARTICLE (62)          




The Bank's capital consists of equal shares and the nominal value of each of which shall not be less than one dirham (AED1) and not more than one hundred dirhams (AED100). The shares shall have equal rights and be subject to equal obligations.




ARTICLE (63)          




The Bank shall not issue bearer shares. Shares shall be negotiable.




ARTICLE (64)          




Shares shall be indivisible. If a share ownership passes by inheritance to more than one heir or is held by more than one person, then they shall elect from amongst themselves a person to represent them towards the Bank, and those persons shall be held jointly liable for the liabilities arising from ownership of the share.




ARTICLE (65)          




The Bank shall not release a shareholder from his obligation to pay up the value of a share and this obligation may not be set off against any right which a shareholder may have against the Bank. The Bank's creditors shall have the right to institute a lawsuit in their own names against a shareholder requiring the payment of the shares value.




ARTICLE (66)          




A shareholder may not claim the repayment of what he has paid to the Bank for his share in the capital.




ARTICLE (67)          




Any share certificate representing the issued capital shall be issued as a serial certificate bearing the name of the shareholder and the number of shares held by him and shall be signed by at least two members of the Board and shall include in particular the date of the decree establishing the Bank and the date of its publication in the Official Gazette, the amount of the Bank's capital and the number of shares into which it is divided and the location of the head office and duration of the Bank.




ARTICLE (68)          




(1)        The Board shall maintain a register of shareholders in whatever form permitted or required by the Law including electronic format. The Board shall also record in the register the names and addresses of the shareholders, the number of shares held by them, the amounts paid up thereon, the date of entering each person in the register of shareholders in that capacity and the date on which any such person ceased to be a shareholder. The shareholders register shall be maintained in the custody of the Bank's registrar in accordance with the Law. The said register shall accurately show the entries of clearing and depositing system records with Abu Dhabi Securities Exchange in addition to any other clearing and depositing system records with any other financial market on which the Bank's shares are listed. Unless the shareholders register has been prepared in a manner such that it is of itself an index, the Board shall maintain an index of the shareholders names which shall be updated constantly with a sufficient cross-reference by each shareholder so as to ensure easy access to the latter's account in the shareholder's register.




The said index shall be maintained with the Bank's registrar.




(2)        The Bank's shares shall be traded on the financial markets on which the Bank's shares are listed including Abu Dhabi Securities Exchange pursuant to the rules and regulations of the said markets.




(3)        The Board shall prepare written rules in relation to dealings by members of the Board and employees in securities issued by the Bank.




(4)        Dividend vouchers shall be in the form of banking cheques or by any other banking means and shall be dispatched to shareholders within thirty (30) days from the date of the relevant resolution of the General Meeting on the distribution of profits.




ARTICLE (69)          




Holding a share shall carry with it the obligation to abide by the Articles and resolutions of the General Meetings.




ARTICLE (70)          




(1)     Subject to the restrictions contained herein and as may be applicable, a shareholder may transfer all or any of his shares by means of an instrument prepared for this purpose and duly permitted or required by Law.




(2)     A shareholder transferring shares shall remain the proprietor thereof until the transferee's name is recorded in the register of the shareholders as holder of the transferred shares.




(3)     Notwithstanding any other provisions herein, the Board may refuse to register the transfer of any shares which are not fully paid up to any person not approved by the Board.




(4)     Notwithstanding any other provision herein and subject to applicable laws and regulations, where a shareholder acquires (either in one transaction or a group of transactions other than as a result of a rights issue by the Bank) shares or interests in shares in excess of ninety-five percent (95%) of the Bank's capital, the Board shall refuse to register any further shares in the name of the buyer, or to recognize any other interests in shares held by the buyer, unless:




(a)        The buyer first sends a written notice to the Board requesting that the Board seek guidance from the Securities & Commodities Authority as to whether the shareholder should extend an offer to the remaining shareholders ("Residual Minority Shareholders"); and




(b)       The buyer abides by any requirements stipulated by the Authority regarding the Residual Minority Shareholders, including any requirement to make an offer to the Residual Minority Shareholders.




(5)        The Board may also refuse to recognise any share transfer unless it is accompanied by such evidence as the Board may require substantiating the right of the transferor to transfer the shares.




(6)           In case of refusal to register a transfer, the Board shall send a notice of refusal to the transferor and the transferee.




(7)           In the event of the death of a shareholder, the surviving shareholder(s) in the case of joint ownership, and the legal representatives of the deceased in the case of exclusive ownership shall be the only persons recognised by the Bank as entitled to receive the deceased's rights in the respective shares. Without prejudice to any of the provisions contained herein, the inheritance of a share shall not relieve the owner of the liabilities of the deceased relating to that share.




(8)           Persons acquiring the right to ownership of shares as a result of their owner's death or bankruptcy, shall have the right, subject to such evidence or proof of such right to ownership as may be deemed appropriate by the Board from time to time, and subject to the provisions of paragraph (3) of this Article, to elect either to register themselves as the owners of the shares in question or transfer them to any other person.




(9)       A person acquiring the right as mentioned in paragraph (8) of this  Article who wishes himself to be registered as the owner of the share, shall send a written notice to the Bank bearing his signature and indicating that he has so elected, along with such evidence as the Board may reasonably require to show the person's title to the share. The Board may at any time give notice requiring any person becoming entitled by way of the owner's death or bankruptcy to a share, to elect either to be registered himself or to transfer the share. If the notice is not complied within 60 days, and the shares are fully paid up, such person shall be deemed to have elected to be registered himself whereupon he shall be entered in the register of shareholders accordingly.




(10)     A person acquiring the ownership of shares as a result of their owner's death or bankruptcy shall be entitled to receive the dividends thereof in addition to the other benefits, which he would have received if he was the registered owner of the shares.




(11)     The Bank shall be entitled to request the authentication of signatures affixed on any shares transfer document and any other document concerning shares in respect of which the Bank is required to take action or of which the Bank is required to take notice and the legal capacity of the relevant signatories shall be verified.




(12)     A shareholder shall be entitled to obtain a true copy of any lost or damaged certificate of any shares not listed or other securities which have been issued by the Bank pursuant to these Articles, provided that the shareholder shall publish an announcement to this effect at his own cost in two daily local newspapers published in Arabic in the State. The Bank shall issue the substitute certificate for the relevant shares provided that no objection is made to the Bank within thirty (30) days from the date of the last announcement in the newspapers and the certificate shall clearly mentioned that the same has been issued in lieu of the lost or damaged original certificate, and the issuance thereof shall be subject to such conditions and fees as the Board shall determine. The owner of the certificate shall further have all the rights and be subject to the obligations applicable to the lost or damaged certificates.




ARTICLE (71)          




It shall not be permissible for shareholder's heirs or creditors for any reason to seek an attachment of the Bank's books or properties, nor request the division or the sale thereof nor to intervene in whatever manner in the management of the Bank, and in the exercise of their rights they shall rely on the Bank's inventories, accounts and the resolutions of the General Meeting.




ARTICLE (72)          




If a shareholder fails to pay an instalment of the share value on its due date, the Board shall be entitled to forfeit the shares by cautioning the shareholder by means of a registered letter requesting him to pay the due instalment. If the shareholder fails to make the payment within thirty (30) days, the Bank shall be entitled to sell the shares by public auction, and to recover from the proceeds of sale the arrears of instalments together with expenses and due compensation for the delay. The balance of share sale proceeds shall be paid to the shareholder. The Bank shall have the right of recourse to the shareholder's own funds if the proceeds from the sale of the forfeited shares does not satisfy the Bank's rights.




The Bank shall cancel the share under forfeiture, and grant the purchaser a new share bearing the number of the cancelled share, and the same shall be recorded in the register of shares together with the name of the new shareholder.




ARTICLE (73)          




The Bank may not pledge its shares or purchase such shares unless the purchase aims at reducing the capital or redeeming the shares, in which case such shares shall have no votes at the deliberations of the General Meeting or dividends.




However, the Bank may purchase a percentage of its shares not exceeding 10% of such shares with intent of sale according to the following conditions:

 




1.  The Bank must obtain the approval of the Securities and Commodities Authority before the purchase transaction under the conditions laid by the Authority in this regard.  

 




2.  The Bank's board of directors must carry out the purchase transaction within a period not exceeding one year from the date of obtaining the Authority's approval.

 




3.  The Bank must have a monetary surplus to undertake the purchase transaction and must not use the capital or the statutory reserve for the purchase transaction.

 




4.  Subject to the provisions of 74(9), the purchase transaction must be announced to the public in two widely circulated dailies including at least one in Arabic, and a period of at least two weeks must elapse between the date of announcing the Bank's intention of purchasing and the date of the actual execution of purchase.

 




5.  The Bank must not carry out any sale transaction while it is pursuing the announced purchase transactions, and the shares purchased must be sold within a period not exceeding two years from the date of the last purchase. Unless the sale is made within the period granted, the purchase transaction shall be considered effected for reducing the capital and the shares purchased shall be depreciated accordingly.

 




            6.  The sale and purchase must be made through one of the licensed financial markets of the State.

 




7.  The Bank must not issue any new shares before completing the sale transaction of the purchased shares.

 




8.  The Bank must not purchase its shares within 15 days before and 3 days after announcing the financial details of the Bank and any essential information liable to affect the share price upwards or downwards.

 




9.  The Bank must not apply for an approval for itself to purchase its shares for selling them except after the lapse of a period no less than one year from the date of the last sale of its purchased shares.

 




10.  The Bank must obtain the approval of the Central Bank before transacting the purchase and finance the purchase transaction from financing resources according to the rules to be determined by the Central Bank in this regard.

 


11.   No member of the Bank's board of directors or its executive management must be a party to the sale or purchase transaction effected by the Bank.

12.  The purchase and sale transaction in respect of the Bank's shares must be disclosed in the quarterly report issued by the Bank.

 






The shares purchased for sale shall forfeit their right to dividends and voting at the General Meetings until they are resold.

 




ARTICLE (74)          




Shareholder's rights relating to the shares and particularly to obtain his share in the profits and in the assets of the Bank on winding up and to attend and vote at General Meetings shall be as provided by Law, by these Articles and by regulations issued by any Competent Authority.




ARTICLE (75)          




A shareholder shall be entitled in the Bank's official working hours to examine the Bank's ledgers and documents with the consent of the Board or of the General Meeting and in a manner which is not inconsistent with the Bank's interests.




The Court may require the Bank to provide specific information to a shareholder in such a way as not to be inconsistent with the Bank's interests.




ARTICLE (76)          




Any resolution passed by a General Meeting, which may adversely affect the shareholders' rights derived by Law or by these Articles or which may increase the shareholders' liabilities, shall be void.




2 - Loan Debentures




ARTICLE (77)          




The Bank may at any time issue loan debentures on and subject to such terms and conditions and with such rights, in each case as may be specified by Law and by the relevant Competent Authority and, in accordance with the Law and any decisions of the relevant Competent Authority and otherwise as determined by the Board.




Chapter Nine




The Bank's Finance




ARTICLE (78)          




The financial year of the Bank shall commence on the 1st January and end on the 31st of December in each year. The Board must, at least one month before the Annual General Meeting prepare, in respect of each financial year, the balance sheet of the Bank and the profit and loss accounts. The Board must also prepare a report concerning the activities of the Bank during the financial year, its financial standing as at the end of that year and the manner in which it proposes that the net profits shall be distributed. A copy of the balance sheet and profit and loss accounts and the report of the Board shall be sent to the SCA for approval, together with the agenda of the Annual General Meeting. Following approval by SCA, the aforementioned documents shall be sent to the shareholders with the agenda of the Annual General Meeting.

In addition, the Bank shall notify the central Bank about its proposal for dividend distributions.




ARTICLE (79)          




A percentage of the gross annual profits at the rate determined by the Board may, subject to paragraph (1) of Article (80) and in accordance with and subject to paragraph (2) of Article (80), be deducted for the depreciation of the Bank's assets or as a compensation for the depreciation in their value. Such funds shall be utilized as determined by the Board and shall not be distributed to the shareholders.




ARTICLE (80)          




The net annual profits of the Bank shall, after the deductions of all general expenses and other costs, be distributed as follows:




(1)     (10%) ten percent shall be deducted from the profits and allocated to the statutory reserve account. The General Meeting may cease the deductions when the total reserve reaches an amount equivalent to at least (50%) fifty percent of the paid up capital of the Bank. If there are any shortfalls in the reserve, the deductions must resume.




(2)     A further percentage shall be deducted from the profits and allocated to any voluntary reserve account which may be established in accordance with Article (82). Such deduction may cease by a General Meeting resolution upon the recommendation of the Board, and shall cease if this reserve reaches (25%) twenty five percent of the Bank's paid up capital.




(3)     Not less than(5%) five percent shall be deducted from the profits to be distributed to the shareholders as a first dividend provided that if the net profits at any year had not been distributed, it shall not be permissible to claim the same out of the profits of the following years.




(4)     After deducting all of the above and in accordance with paragraph (5) of Article (29) a maximum of (10%) ten percent of net profit shall be allocated as remuneration for the Board after the approval of the General Meeting.




(5)    




ARTICLE (81)          




The reserve shall be utilized as may be resolved by the Board having regard to the Bank's interests save that it shall not be permissible to distribute the statutory reserve among the shareholders and it shall not be permissible to use the reserves for purposes other than those for which they were established without resolution of a General Meeting.




ARTICLE (82)          




The Board may with the authority of a General Meeting resolve (a) to distribute any profits available for distribution and any amounts standing to the credit of the Bank's reserves and available for distribution; or (b) to allocate the sum, resolved to be distributed to the shareholders who would have been entitled to it if it were distributed by way of dividend, in paying up in full unissued shares of the Bank of a nominal amount equal to that sum and allot and issue the shares credited as fully paid to those shareholders in those proportions; and (c) to make such provision by the payment of cash or otherwise as they may determine in the case of shares thereby becoming distributable in fractions.




ARTICLE (83)          




Without prejudice to the provisions of the preceding Articles concerning the reserves to be deducted from the annual profits, net profits shall be paid to the shareholders at the time and place specified by the Board being not later than (30) thirty days following resolution of the General Meeting in this regard.




Chapter Ten




Notices




ARTICLE (84)          




(A)      All notices sent by or to any person shall, except for the notices to attend the General Meeting set forth in Article (32), be in writing and within the limits permitted by the Law.




(B)      Without prejudice to Article (32) hereof, the Bank may send any notice or other documentation under these Articles to any shareholder by any of the following means of communication as the same may be determined by the Bank in its sole discretion:




(1)   By registered mail to the shareholder's registered address; or




(2)   By hand delivery to the shareholder's registered address.




(C)      All shareholders present personally or by proxy at any General Meeting of the Bank shall be deemed to have received notice of attendance thereat and at any adjourned thereof and of the business of that General Meeting.




(D)      The Board may from time to time issue, supplement or adopt further provisions and terms concerning the use of electronic telecommunications for sending notices or documents to the shareholders.




Chapter Eleven




Dissolution




ARTICLE (85)          




The Bank may be dissolved for any of the following reasons:




(1)        The expiration of its duration or the completion of the objectives for which it was established.




(2)        The passing of a resolution to this effect by an Extraordinary General Meeting on the termination of the duration of the Bank.




(3)        The loss of all or most of the Bank's assets such as to preclude the profitable investment of the remainder.




(4)        In the event of sustaining a loss exceeding half of its capital unless otherwise resolved by an Extraordinary General Meeting.


 


(5)        The amalgamation of the Bank with another bank or company.




ARTICLE (86)          




In case of the Bank's premature dissolution, the Extraordinary General Meeting shall, upon the request of the Board, determine the manner of liquidation, and shall appoint one or more liquidators and determine their powers. The authority of the Board shall end upon the appointment of the liquidators. However, the authority of the Chief Executive Officer shall remain effective throughout the liquidation period, until the liquidators are released of their responsibility.




Chapter Twelve




Miscellaneous




ARTICLE (87)          




The Board shall determine the method in which the Bank's common seal shall be safely maintained. The Bank's common seal shall not be used except pursuant to a resolution of the Board or of any committee formed from its members. Each document bearing the common seal of the Bank shall be signed by the Board Secretary and/or any one or more members of the Board as specified in the said resolution.




ARTICLE (88)          




No resolution of the Board shall result in the lapse of any claim of civil liability against members of the Board as a result of the mistakes committed in the course of exercising their powers and functions. However, if the act giving rise to liability has been placed before the General Meeting by a report from the Board or the auditor, and has been approved, the claim of liability shall lapse upon the expiration of one year from the date of convening the General Meeting.




Nevertheless, if the act attributed to the members of the Board amounts to a criminal offence, the claim of liability shall not lapse unless the criminal liability lawsuit ceases to be effective.




ARTICLE (89)          




Subject to the Bank's Extraordinary General Meeting's approval, the Bank may amend or make any additions to the provisions of these Articles pursuant to the provisions of these Articles, Federal Law No. (10) of 1980 concerning the Central Bank, Federal Law No. (8) of 1984 concerning Commercial Companies (as amended) and Federal Law No. (4) of 2000 concerning the UAE Financial Securities & Commodities Market and Authority in addition to any other laws the provisions of which relate to the banking business in the State. All the amendments and additions should be effective as if they were inherently incorporated in these Articles. Further, the provisions of the laws mentioned above shall be applicable to any matter to which no provision has been made in the Memorandum of Association in these Articles.




ARTICLE (90)          




These Articles shall be lodged and published in accordance with the Law.




These amended Articles shall revoke and substitute all the previous Articles of the Bank.


 


 

 

 

 

 

BWG/LNOT/789895/2


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