20 Mar 2015 07:30
INFORMATION STATEMENT
March 20, 2015
Dear Global Depositary Receipt Holder:
Reference is hereby made to the Amended and Restated Deposit Agreement dated May 10, 2010 (as may be amended from time to time, the "Deposit Agreement") between Bank Audi s.a.l. (the "Bank")) and Deutsche Bank Trust Company Americas, in its capacity as depositary (the "Depositary"), relating to Global Depositary Receipts issued in respect of common shares of the Bank (the "GDRs"), each GDR representing one common share, nominal value L.L. 1,650 per common share (the "Common Shares"). Capitalized terms used herein without otherwise being defined shall have the respective meanings assigned thereto in the Deposit Agreement.
The Depositary, as the shareholder of record of Common Shares evidenced by GDRs, has received notice of the Ordinary General Meeting of the Shareholders of the Bank to be held on April 7, 2015 (the "General Meeting"), at the Bank's head office in Beirut, which (among other things) sets forth the agenda for such General Meeting. References in this Information Statement (this "Information Statement") to the "Holder" of any GDR shall mean the person registered as the holder of such GDR on the books of the Depositary. In accordance with Clause 13 of the Deposit Agreement and Condition 23 of the GDRs, a copy of such notice and agenda is being sent hereby to each person who is a Holder on March 20, 2015, which is the record date (the "Record Date") established by the Depositary for this purpose (which is as near as practicable to April 2, 2015, being the corresponding record date set by the Bank in respect of the General Meeting).
As set forth in such notice, at the General Meeting, shareholders of the Bank, including the Depositary, will be asked to consider and vote upon the following agenda:
1. To approve the Bank's accounts, in particular, the balance sheet and the profit and loss statement, as of and for the year ended December 31, 2014, and to discharge the Chairman and members of the Board of Directors of the Bank (the "Board of Directors" or the "Board") in respect of activities performed during the year ended December 31, 2014;
2. To appropriate the 2014 profits;
3. To declare distributions to the holders of the Bank's preferred shares and dividends to the holders of Common Shares and determine the related record and payment dates;
4. To ratify loans granted during the year 2014 to related parties as per Article 152 of the Code of Money and Credit;
5. To authorise the granting of loans to related parties during the year 2015, in accordance with Article 152 of the Code of Money and Credit;
6. To ratify transactions entered into between the Bank and members of the Board of Directors or affiliated companies during the year ended December 31, 2014 pursuant to Article 158 of the Code of Commerce and to authorise the Bank to enter into similar transactions during the year 2015;
7. To confirm the managerial responsibilities of certain Board members and to determine their fixed and performance-related remuneration in respect of such responsibilities;
8. To authorise the participation of certain Board members in the boards of other companies and to grant the necessary related authorisations pursuant to Article 159 of the Code of Commerce; and
9. To determine the External Auditors' fees for the year 2015.
Each Holder is hereby requested to return to the Depositary voting instructions, as provided in this Information Statement, by which such Holder may give instructions to the Depositary to vote for or against each and any resolution specified in such agenda.
After careful consideration, the Board of Directors recommends a vote in favour of each such resolution.
Yours very truly,
Raymond Audi
Chairman - General Manager
INFORMATION STATEMENT
Table of Contents
Page
Available Information.......................................................................................................................................................... 3
Voting Rights of Holders..................................................................................................................................................... 3
Summary Background Information.................................................................................................................................... 3
Voting Instructions.............................................................................................................................................................. 5
Information regarding Bank Audi s.a.l.............................................................................................................................. 6
AVAILABLE INFORMATION
No person has been authorized to give any information or to make any representation other than those contained in this Information Statement, and, if given or made, such information or representation must not be relied upon as having been authorised by the Bank. No delivery of this Information Statement nor any offer or distribution of any securities to which this Information Statement relates shall, under any circumstances, create any implication that there has been no change in the affairs of the Bank since the date of this Information Statement or that any information contained or referred to herein is correct as of any time subsequent to the date as of which it is given. This Information Statement does not constitute the solicitation of a proxy to or from any person in any jurisdiction to or from whom it is unlawful to make such offer or solicitation within such jurisdiction.
VOTING RIGHTS OF HOLDERS
In accordance with Condition 12 of the GDRs, the Depositary is seeking voting instructions from the Holders in order to exercise or cause to be exercised the voting rights in respect of the Deposited Shares as directed by such voting instructions to the extent permitted by Lebanese Law.
Common Shares which have been withdrawn from the deposit facility under the Deposit Agreement and transferred on the Bank's register of members to a person other than the Depositary or its nominee may be voted by the registered owner thereof; however, Holders may not receive sufficient advance notice of the General Meeting to enable them to withdraw Deposited Shares and vote at the General Meeting.
SUMMARY BACKGROUND INFORMATION
On January 27, 2015, the Bank released its annual unaudited consolidated financial statements as of and for the year ended December 31, 2014, showing total consolidated (unaudited) net profits of LL 528.1 billion (USD 350 million), total consolidated (unaudited) deposits of LL 53,423 billion (USD 35.8 billion), total consolidated (unaudited) assets of LL 63,251 billion (USD 41.9 billion) and total consolidated (unaudited) equity of LL 5,040 billion (USD 3.3 billion).
On March 19, 2015, the Board of Directors,
(i) Having examined the draft External Auditors report to the General Meeting in connection with the financial statements as of and for the year ended December 31, 2014, encompassing the External Auditors unqualified opinion, and having approved such financial statements;
(ii) Having adopted the "General Report of the Board of Directors" to the General Meeting, which summarises the Bank's activity during the year ended December 31, 2014 (and its major financial indicators), as well as the major developments in the local and regional economies and the Bank's market positioning and strategic choices;
(iii) Having adopted a proposal for the appropriation of the profits realised by the Bank for the year ended December 31, 2014 to be submitted to the General Meeting, such proposal encompassing amongst other things (v) the distribution to holders of Series "E" Preferred Shares (in accordance with their terms) of USD 6 per Series "E" Preferred Share (aggregating LL 11,306 million (USD 7.5 million)), (w) the distribution to holders of Series "F" Preferred Shares (in accordance with their terms) of USD 6 per Series "F" Preferred Share (aggregating LL 13,568 million (USD 9 million)), (x) the distribution to holders of Series "G" Preferred Shares (in accordance with their terms) of USD 6 per Series "G" Preferred Share (aggregating LL 13,568 million (USD 9 million)), (y) the distribution to holders of Series "H" Preferred Shares (in accordance with their terms) of USD 6.5 per Series "H" Preferred Share (aggregating LL 7,349 million (USD 4.9 million)), and (z) the distribution of dividends to holders of Common Shares (including the Depositary) of LL 603 (USD 0.4) per Common Share (aggregating LL 240,749 million (USD 159.7 million)) (before deduction of dividends payable on GDRs held in treasury, if any), in each case, on April 15, 2015 to holders of record as at April 14, 2015;
(iv) Having examined the draft External Auditors special reports in connection with Article 152 of the Code of Money and Credit in connection with outstanding loans to related parties subject to Article 152 of the Code of Money and Credit ("Article 152 Loans")
(v) Having, in consideration of the fact that the outstanding loans to related parties exceed the applicable ceilings, (x) approved the management plan to resolve the excess situation before 31 March 2015, and (y) adopted a proposal to ratify the Article 152 Loans outstanding as at 31 December 2014;
(vi) Having, in consideration of the fact that, as at the date of Annual Ordinary General Meeting, the regulatory ceiling of the aggregate amount of Article 152 Loans allowed to be granted during 2015 is LL 20 billion, adopted a proposal to approve aggregate Article 152 Loans within said ceiling;
(vii) Having examined the External Auditors special reports in connection with Article 158 of the Code of Commerce, pursuant to which the External Auditors did not express any remarks in connection with transactions entered into between the Bank and members of the Board of Directors or affiliated companies;
(viii) Having adopted a proposal to ratify transactions entered into between the Bank and members of the Board of Directors or affiliated companies by virtue of the authorisation granted by the general meeting of shareholders on 14 April 2014 and pursuant to Article 158 of the Code of Commerce during 2014 and to authorise the Bank to enter into similar transactions during 2015 (until the next annual ordinary general meeting expected to be held in April 2016);
(ix) Having, pursuant to Article 158 of the Code of Commerce, approved (by virtue of the authorisation granted by the general meeting of shareholders on 14 April 2014) (i) the payment of fixed remuneration in 2014 aggregating LL 15.2 billion (USD 10 million) to 7 persons (including the current Chairman of the Board, the Executive Directors and the members of the Executive Committee who are not members of the Board of Directors); (ii) the payment of an exceptional one-time remuneration to the Chairman of the Board and the payment of a performance-related remuneration to the other Executive Directors (4 persons) representing 1.9% of the Bank's consolidated net profits before taxes, all aggregating LL 22.1 billion (USD 14.7 million);
(x) Having, pursuant to Article 158 of the Code of Commerce, adopted a proposal to grant a number of executives and employees, including the Group CEO, an exceptional reward to be paid for the successful completion of the Bank's recent capital increase of USD 300 million, and representing 2% of said increase;
(xi) Having confirmed the managerial responsibilities of the Executive Directors and having adopted a proposal to:
a. Maintain the fixed remuneration arrangements of the Chairman of the Board and that of the Executive Directors of the Board unchanged from the previous year; and
b. Confirm the resolution of the Annual Ordinary General Assembly dated 14 April 2014 granting the Executive Directors an annual performance-related cash remuneration not exceeding 2.4% of the Bank's consolidated net profits before taxes for the financial years 2014 to 2017 inclusive (after having reduced the aforementioned ceiling from 3.15%, as previously approved, to 2.4% in consideration of the substitution, for the Chairman, of such remuneration with a fixed one-time bonus payment in 2014 (as authorized by the 2014 Annual Ordinary General Assembly));
(xii) Having, pursuant to Article 158 of the Code of Commerce, adopted a proposal to maintain unchanged the additional annual remuneration to the Chairman and members of the Board who are non-executive and/or independent directors, including the Vice-Chairman (a total of 5 persons), aggregating USD 2,300,000 per annum (i) for their chairmanship or membership of certain Board committees (the Audit Committee, the Governance and Remuneration Committee and the Risk Committee), and/or (ii) for their assistance to the Board and its committees (and to the boards of banking subsidiaries and their committees) including in control and governance oversight matters and in risk oversight matters;
(xiii) Having adopted a proposal to grant the members of the Board annual attendance fees of LL 25 million each, the Chairman of the Board being allocated two parts and each other Director being allocated one part (unchanged as compared to 2014);
(xiv) Having adopted a proposal to authorise the participation of certain Board members in the boards of controlled subsidiaries of the Bank;
(xv) Having, pursuant to the matters mentioned under points (iv) to (xiv) above, adopted the "Special Report of the Board of Directors" produced in accordance with Article 152 of the Code of Money and Credit and Article 158 of the Code of Commerce and summarising (x) the transactions entered into by the Bank with related parties (including affiliated companies and members of the Board of Directors) during the year ended December 31, 2014 and (y) the remuneration of the members of the Board and of the General Managers; and
(xvi) Having adopted a recommendation of the Audit Committee to set audit fees for "BDO, Semaan, Gholam & Co." and "Ernst & Young", being the joint External Auditors of the Bank, for the year ending December 31, 2015 at USD 1,350,000 (USD 675,000 to each auditing firm, representing a similar amount as compared to the year ended December 31, 2014).
Resolved to recommend to the General Assembly to adopt the following resolutions:
1. To approve the Bank's accounts, in particular the balance sheet and the profit and loss statement, as of and for the year ended December 31, 2014, and to discharge the Chairman and members of the Board of Directors of the Bank in respect of activities performed during the year ended December 31, 2014;
2. To appropriate the 2014 profits;
3. To declare distributions to the holders of the Bank's preferred shares and dividends to the holders of Common Shares and determine the related record and payment dates;
4. To ratify loans granted during the year ended December 31, 2014 to related parties as per Article 152 of the Code of Money and Credit;
5. To authorise the granting of loans to related parties during 2015, in accordance with Article 152 of the Code of Money and Credit;
6. To ratify transactions entered into between the Bank and members of the Board of Directors or affiliated companies during the year ended December 31, 2014 pursuant to Article 158 of the Code of Commerce and to authorise the Bank to enter into similar transactions during 2015 (until the next annual ordinary general meeting expected to be held in April 2016);
7. To confirm the managerial responsibilities of certain Board members and to determine their fixed and performance-related remuneration in respect of such responsibilities;
8. To authorise the participation of certain Board members in the boards of other companies and to grant the necessary related authorisations pursuant to Article 159 of the Code of Commerce; and
9. To determine the External Auditors' fees for 2015.
All as per the aforementioned Board reports, proposals and recommendations.
VOTING INSTRUCTIONS
Each Holder is hereby requested to return to the Depositary voting instructions, in the form provided separately by the Depositary for this purpose, by which such Holder may give instructions to the Depositary to vote for or against each and any resolution specified in the agenda for the General Meeting.
In order for a voting instruction to be valid, the above-mentioned form of voting instructions must be completed and duly signed by the respective Holder (or in the case of instructions received from the clearing systems should be received by authenticated SWIFT message or market standard authenticated message format) and returned to the Depositary by the date that the Depositary shall specify in such form of voting instructions.
INFORMATION REGARDING BANK AUDI S.A.L.
For information regarding the Bank, Holders are advised to review the following documents:
- The Audited financial statements of the Bankas of and for the year ended December 31, 2014 and the accompanying notes and auditors' report;
- The report of the Board of Directors about the Bank's activity during the year ended December 31, 2014; and
- The Bank's Annual Report for 2013.
The above documents (in Arabic or English, or both, as the case may be) may be obtained free of charge from the Bank and the Depositary at the addresses set forth below:
The Depositary:
Deutsche Bank Trust Company Americas
Winchester House
1 Great Winchester Street
London EC2N 2DB
Attn: Mr. Stanley Jones
The Bank:
Bank Audi s.a.l.
Bab IdrissOmar Daouk StreetBanque Audi Plaza, P.O. Box 11-2560BeirutLebanon
Attn: The Corporate Secretary