a) This Regulation shall not prejudice the provisions of the Companies Law, the Capital Market Law, any of their implementing regulations, and other relevant Laws.

b) The Authority may waive a provision of this Regulation, in whole or in part as they apply to any person, upon his/her request or on its own initiative.

c) Unless the context indicates otherwise, the following words and phrases, whenever they appear in this Regulation, shall have the meanings herein specified:

− Shares: shares of listed joint stock companies.

− Treasury Shares: Purchased Shares which are retained by the Company, including Employees' Shares which are retained by the Company.

− Employees’ Shares: Treasury Shares which are allocated by the Company to its employees.

− Purchased Shares: shares bought back by the Company pursuant to Article (114) of the Companies Law.

− Preferred Shares: shares issued by the Company which entitle their holders the right to receive a larger percentage of the Company’s net profits than the percentage received by holders of ordinary shares, after deduction of reserves (if any), without entitling them to vote in the General Assembly.

− Redeemable Shares: shares issued by the company that can be redeemed at the company's option in accordance with the terms and conditions of its redemption.

− General Assembly: the general assembly held with the attendance of the shareholders of the Company pursuant to the provisions of the Companies Law and the Company’s bylaws.

− Special Assembly: the special assembly held with the attendance of holders of the same class of ordinary shares or Preferred Shares or Redeemable Shares in accordance with the Companies Law, Company’s bylaws and this Regulation.

− The Public: any person other than the persons mentioned in the definition of “public” set out in the Glossary of Defined Terms Used in the Regulations and Rules of the Authority. For purposes of this Regulation, the shares retained by the Company do not count as part of the ownership of the public.

− Shareholders Register: a register of shareholders prepared and maintained by the Depository Centre which includes names of shareholders, their nationality, place of residence, Shares numbers in which all relevant dealings related to the Shares issued by the Company are recorded. 

− Exchange: the Saudi Stock Exchange.

− Capital Market Institution: a person authorised by the Authority to carry out securities business.

− Company: a listed joint stock company.

− Cumulative Voting: a method of voting for electing Board members that gives the holder of voting shares a voting capacity equivalent to the number of shares he/she owns, and by which the shareholder is entitled to either exercise all of his/her votes towards one nominee or to divide his/her votes towards several nominees without any duplication of such votes.

− Rules on the Offer of Securities and Continuing Obligations: the Rules on the Offer of Securities and Continuing Obligations issued by the Board of the Authority.

− Depository Centre Rules: the Securities Depository Centre Rules approved by the Board of the Authority.

− Rules for Qualified Foreign Financial Institutions Investment in Listed Securities: the Rules for Qualified Foreign Financial Institutions Investment in Listed Securities issued by the Board of the Authority.

− Corporate Governance Regulations: the Corporate Governance Regulations for listed joint stock companies issued by the Board of the Authority.

− Remuneration Committee: a committee formed pursuant to the provisions of the Corporate Governance Regulations.

− Board: the Company’s board of directors.

− Registered Shareholders: the shareholders registered in the Shareholders Register at the end of the day on which the Extraordinary General Assembly’s meeting is held to approve the increase of the Company’s share capital and issuance of related new shares or at the end of the day specified by the Ordinary General Assembly or by the Board on which shareholders become entitled to dividends as to dividends distribution.

− Remunerations: amounts, allowances, profits and their equivalent, periodic and annual performance-related bonuses, short and long term incentive plans, in addition to any other in-kind benefits, except for reasonable costs and expenses actually incurred by the Company on behalf of a Board member in performing his work.

− Prospectus: the document required to offer securities in accordance with the Capital Market Law, and the Rules on the Offer of Securities and Continuing Obligations.

− Capital Market Law: the Capital Market Law issued by Royal Decree No. (M/30) dated 2/6/1424H.

− Companies Law: the Companies Law issued by Royal Decree No. (M/132) dated 1/12/1443H.

− Depository Centre: the Securities Depository Centre.

− Authority: the Capital Market Authority.

− Business Day: a business day in the Kingdom according to official working days of the Authority.

− Day: a calendar day, whether a business or non- business day.

− Affiliate: a person who controls another person or is controlled by that other person, or who is under common control with that person by a third person. In any of the preceding, control could be direct or indirect

− Control: the ability to influence actions or decisions of another person directly, indirectly, individually or collectively with a relative or an affiliate through: (A) owning %30 or more of the voting rights in a company, (B) having the right to appoint %30 or more of the administrative team members.

− Capitalisation Issue: an offer of further shares to existing shareholders, fully paid up out of the Company’s reserves, in proportion to existing shareholders holdings.

Filing of the Company’s financial statements, Board’s report and external auditor’s report shall be in accordance with the provisions related to the disclosure of financial statements and Board’s report in the Rules on the Offer of Securities and Continuing Obligations.

a) The Ordinary General Assembly shall appoint an external auditor and shall determine his fees, term of office, and scope of work.

b) The total term of office for the external auditor shall not exceed seven consecutive or non-consecutive financial years, and the Authority may, at its discretion, amend this term for any company or sector; such period shall be recalculated after the lapse of not less than three consecutive financial years from the end of the last financial year in which he worked on auditing of the Company’s accounts.

c) The total term of office for the partner supervising the audit work at the external auditor shall not exceed seven consecutive or non-consecutive financial years, and the Authority may, at its discretion, amend this term for any company or sector; such period shall be recalculated after the lapse of not less than five consecutive financial years from the end of the last financial year in which he worked as a partner supervising the audit work of the Company’s accounts.

Each member of the Board shall comply with the duties of care and loyalty, and this shall include, in particular, the following:

1) Duty to act within conferred powers: A member of the Board shall perform and exercise his/her duties and powers in managing the Company and guiding its activities within his/her conferred powers in accordance with the Companies Law and its implementing regulations and the Company’s bylaws and other relevant laws, and only exercise powers for the purposes for which they were conferred.

2) Duty to act for the best interest of the Company and to promote its success: A member of the Board shall comply with the following:

• a) working in good faith for the best interest of the Company and all its shareholders and shall not prioritise his/her personal interests over the interest of the Company and its shareholders, and in doing so shall have regard to the rights of the other stakeholders;

• b) ensure exerting all efforts to promote the success and growth of the Company and maximise its value on the long term for the benefit of its shareholders.

3) Duty to exercise independent judgment: A member of the Board shall perform his/her duties objectively and independently in relation to managing the Company and making decisions, and shall avoid cases that affect his/her independence in making decisions or voting on them.

4) Duty to exercise reasonable and expected care, skill and diligence: A member of the Board shall perform his/her duties and responsibilities in accordance with the Companies Law, the Capital Market Law and their implementing regulations and the Company’s bylaws and other relevant laws, and in accordance with the diligence and care that should be exercised by a diligent person with the general knowledge, skill and experience that the member of the Board has and that are expected of a person carrying out the functions carried out by the member of the Board.

5) Duty to avoid conflict of interest: A member of the Board shall avoid transactions and situations in which he/she has actual or potential direct or indirect interest that conflicts or may conflict with the Company’s interest, and the member of the Board shall comply with the provisions relating to conflicts of interest in the Companies Law and its implementing regulations.

6) Duty to disclose any direct or indirect interest in businesses and contracts executed for the Company’s account: A member of the Board shall disclose any direct or indirect interest he/she has in the business and contracts executed for the Company’s account immediately upon becoming aware thereof, and shall comply with the provisions relating to disclosure of interest in business and contracts in the Companies Law and its implementing regulations.

7) Duty not to accept benefits from third parties in relation to his/her role in the company: A member of the Board shall not exploit his position, duties and powers vested in him/her in his/her capacity as a board member in any way to obtain or accept benefits from third parties for a specific act or to refrain from doing a specific act.