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ARTICLE 1: PREAMBLE

  1. These regulations aim at achieving the following:
    1. Direct, manage and control Corporation activities to ensure commitment to the best practices of governance that guarantee shareholders’ rights, stakeholders’ rights and activation of disclosure and transparency principle to all investors equally.
    2. Explain the responsibilities and powers of the Board of Directors and its role in promoting shareholders’ rights, preserving their interests and the transparent explanation of the policies and procedures adopted in selecting the members of the Board of Directors and Board committees and their duties. This is in addition to the issuance of their remunerations and compensations and achievement of justice when performing the administrative duties.
    3. Explain shareholders’ rights, how they obtain the information needed for taking their investment resolutions and explain the policies and procedures used in the declaration and distribution of dividends.
  2. The Board of Directors has developed and approved these regulations. They are based upon Saudi Corporation Law and its Executive Regulations, Capital Market Authority (CMA) Bylaws (specifically Article 10/c of Corporate Governance Regulations), the principles of SABIC Bylaws, SABIC Internal Policies and the best practices and controls used for managing the Corporation.
  3. The information denoted in the preamble are an integral part of these regulations. Board of Directors is entitled to revise and amend/add to the regulations whenever deemed appropriate within the framework of related rules and regulations.

ARTICLE 2: DEFINITIONS

  1. The expressions and terms mentioned in these regulations shall have the meanings set forth opposite each of them, unless it is otherwise required by the context.
    1. Corporation: Saudi Basic Industries Corporation (SABIC).
    2. SABIC Articles of Association: The Articles of Association issued by virtue of the Royal Decree no. (m/66) in 13/09/1396h (06/09/1976g) and the amendments thereof;
    3. Affiliate: Any other corporation controlled by the Corporation/SABIC.
    4. Regulations for Companies/Corporate Regulations/ Law of Companies: Issued by virtue of the Royal Decree no. (m/6) in 22/03/1385h (11/07/1965g) and its amendments and executive regulations
    5. Corporate Governance Regulations: Issued by Capital Market Authority by the resolution no. 1-212-2006 in 21/10/1427h (12/11/2006g), amended by Capital Market Authority resolution no. 1-10-2010 in 30/03/1431h (16/03/2010g)
    6. Capital Market Law: issued by virtue of the Royal Decree no (m/30) in 02/06/1424h (22/08/2003g)
    7. Authority (CMA): Capital Market Authority established according to the Capital Market Law issued by virtue of the Royal Decree no. (m/30) in 02/06/1424h (22/08/2003g)
    8. Capital Market Website: Exchange/TADAWUL electronic website on the INTERNET
    9. Securities Depository Center: The Securities Depository Center of TADAWUL
    10. Board: Board of Directors who manages Corporation’s business to the interest of the shareholders.
    11. Chairman: Chairman of Board of Directors of Saudi Basic Industries Corporation (SABIC)
    12. Member of The Board: Covers all the members of SABIC Board of Directors assigned by The Council of Ministers (Cabinet) and Corporation’s General Meeting
    13. Committees: Assigned by, emanating from, appointed by the Board of Directors (Board Committees)
    14. Management: Executive management represented by the Corporation’s Chief Executive Officer, Executive Vice Presidents, Vice Presidents and other similar executive officers
    15. Independent Member: A member of the Board of Directors who enjoys complete independence, as stated in Corporate Governance Regulations issued by Capital Market Authority
    16. Non-executive director: A member of the Board of Directors who does not have a full-time management position at the Corporation, or who does not receive monthly or yearly salary
    17. Senior Executive: Any natural person who manages the Corporation and undertakes responsibility for setting and executing strategic decisions, to include Corporation CEO, , his Vice Presidents and the Chief Financial Officer (CFO)
    18. Financial Manager: Any natural person who manages the financial affairs of any person; whether his title was financial manager, financial comptroller or any other title
    19. Related Party: Means the party included in the list of terms used in CMA regulations regarding the terms of registration and enlisting
    20. Related Person: Means the party included in the Glossary of Defined Terms used in the CMA Regulations and Rules with respect to senior executives, members of the Boards of Directors or a single shareholder owning a large percentage of shares and also with respect to a Corporation owning a large percentage of shares.
    21. Person: Any natural or artificial person acknowledged as such in the laws of Kingdom of Saudi Arabia
    22. Concerned Person: The CEO, Board of Directors member, senior executive, any shareholder who is a single shareholder owning a large percentage of shares or any person related to one of the above.
    23. Minority Shareholders: Those shareholders who represent a class of shareholders that does not control the Corporation and hence they are unable to influence the Corporation
    24. First-degree relatives: Father, mother, spouse and children.
    25. Control: The power to influence the actions or decisions of another person, directly or indirectly, jointly or severally, by holding a percentage of 30% or more of the voting rights of a Corporation, or the right to nominate 30% or more of the members of the management body/team.
    26. Major Shareholder: any person who holding 5% or more of Corporation shares
    27. Date of Entitlement / Eligibility for Profits (Date of Maturity for Distribution of Dividends): The date of the end of exchange of the day on which the shareholders are entitled to the dividends that should be distributed
    28. Accumulative Voting: Every shareholder shall have a number of votes equal to the number of the shares he holds. The shareholder should use all such votes for voting to one or more candidates of his choice, provided that he shall not exceed the number of the votes he holds, and not to repeat such votes (The Accumulative Voting Approach is applicable after the amendment of the Articles of Association of the Corporation,)
    29. Stakeholders: Any person who has an interest in the Corporation, such as shareholders, employees, creditors, customers, suppliers and community.
    30. Voting rights: all the voting rights attributable to the shares of a Corporation which are exercisable at a general meeting.
    31. Subscription right documents: certificates of rights or other instruments entitling their bearers to subscribe to any shares or debt instruments
    32. Day: A workday in Kingdom of Saudi Arabia according to the official workdays in CMA
    33. Calendar day: Any day; workday or else
  2. Unless it is otherwise required by the context, the expressions and terms not included in these Regulations shall have the same meanings they bear in the Corporate Governance Regulations issued by CMA or in Glossary of Defined Terms used in the CMA Regulations and Rules.

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