Telecom Egypt S Regulatory News (TEEG)

Text Before Amendment

Text after Amendment

Article (3)

Article (3)

The purpose of the Company is:

Setting up and operating wire and wireless telecommunications networks inside and outside the Arab Republic of Egypt and linking same to the international domain. For achieving such purposes, the Company shall have the right to perform the following acts:

(a) Setting up and operating wire and wireless telecommunications networks;

(b) Providing wire and wireless telephone services;

(c) Managing and maintaining the facilities, devices and equipment required for providing such services;

(d) Implementing the projects necessary for achieving its purposes or relating thereto, as well as developing its services in a manner that guarantees that they are in keep pace with the global level in such fields;

(e) Cooperating with companies and international organizations to link the Arab Republic of Egypt with the outside world; and

(f) Real estate investment to serve its purposes and execute its projects.

For achieving its purposes, the Company may establish - or participate in the establishment of new or existing companies, which operate in the field of its activity, or in fields related or supplementary to its activity.

The purpose of the Company is:

Setting up, owning, operating and developing telecommunications networks for transmitting and providing telecommunications and information technology services inside and outside the Arab Republic of Egypt, and all other services which can be provided by using wire and wireless networks, techniques and technology. In addition, it shall have the right to perform all acts and specialties which will lead to achieving its purpose. For achieving such purposes, the Company shall have the right to perform the following:

(1) owning, setting up, operating, maintaining and developing telecommunications networks and infrastructure required for telecommunications services for using and/or managing and/or leasing to others and/or dealing in same;

(2) providing audio and visual telecommunications and data transmission services to subscribers and/or managing and/or leasing to others and dealing in same;

(3) participating or sharing in global telecommunications systems, such as maritime cables and satellites, and obtaining capacities or circuits therein, for using and/or managing and/or leasing to others and/or dealing in same;

(4) dealing, contracting or participating with agencies, authorities, companies, organizations or any entities that practice the same or similar activity to the activities of the Company, are related thereto, or assist the Company to achieve its purposes, whether inside the Arab Republic of Egypt or overseas;

(5) managing, selling, leasing, purchasing, possessing, renting and dealing in any properties and rights, or benefit or right therein, including movable and immovable properties, that the Company may possess or own;

(6) selling, purchasing and distributing landline telephone sets, mobile phones, computers, peripherals, accessories, auxiliaries and supplementary devices thereof, their required spare parts as well as the maintenance works associated therewith;

(7) setting up audio, video and written data transmission networks; and providing value-added services, content services, marketing, electronic signature and money transfers through internet; and

(8) real estate investment to serve its purposes and carry out its projects.

For achieving its purposes, the Company may establish - or participate in the establishment of new or existing companies, which operate in the field of its activity, or in fields related or supplementary to its activity, whilst observing the provisions of applicable laws, regulations and decrees, and provided that the Company shall obtain the licenses required for practicing its activity.

The Company may have an interest or participate in any manner with other companies and entities practicing similar activities or which may assist it to achieve its purposes in the Arab Republic of Egypt or overseas. The Company may also amalgamate with, purchase or merge into the said entities, in accordance with the provisions of the Act and its Executive Regulations.

Article (7)

Article (7)

The capital of the Company consists of 1,707,071,600 fully-paid and State-owned nominal shares, each with a value of 10 Egyptian Pounds.

The capital of the Company consists of 1,707,071,600 fully-paid nominal shares, each with a value of 10 Egyptian Pounds, with the subscription in the capital shares was done as follows:

1- 80% State-owned; and

2- 20% public offering.

Article (21)

Article (21)

The Company shall be managed by a Board of Directors consisting of a minimum of seven members and a maximum of eleven members to be appointed by the General Assembly. As an exception to the foregoing method of appointment, the Board of Directors shall be formed of eleven members as follows:

(a) Three members who meet the requirements of independence as detailed hereinafter in this Article.

(b) A member representing the employees of the Company, to be nominated by the General Syndicate for Telecommunications Employees from amongst the employees of the Company.

(c) Seven members who shall be selected by virtue of a Prime Ministerial Decree upon a recommendation by the Minister of Communications and Information Technology.

The three independent members shall be nominated by non-State shareholders owning 1% or more of the Company shares, and the independent members shall meet the following requirements:

(i) He/she is not an employee in the Company, or any of its affiliates or sister companies during the last five years;

(ii) He/she may not have any substantial dealings with the Company, its affiliates or sister companies during the three years preceding his/her appointment, whether directly or as a partner, shareholder, manager or key employee at any entity which had any substantial dealings with the Company, its affiliates or sister companies;

(iii) He/she may not have received or have the right to receive any fees or additional amounts except for the allowances and remunerations of the Board members, or have the right to participate in incentive schemes by shares, if any, or motivated remuneration programs, or have the right to participate in pension programs in the Company;

(iv) He/she may not be a relative up to the fourth degree of any Board member of the Company, or its chief executive officer and his/her deputies;

(v) He/she may not be a co-member in the board of directors of a company operating with the Company or have a close relation with any Board member by way of participation/sharing in any other company or entity;

(vi) He/she may not represent a substantial shareholding in the Company; and

(vii) He/she may not have served in the Board of Directors of the Company for nine years or more as of the date of his/her first appointment.

Should the non-State shareholders fail to nominate three independent members or nominate less than three members, or if the aforementioned requirements are not met in the independent members nominated by the non-State shareholders, then the Board of Directors may nominate independent members to complete the number of nominated independent members, provided that they also meet the aforementioned requirements of the independent members.

The Company shall be managed by a Board of Directors consisting of a minimum of seven members and a maximum of eleven members to be appointed by the General Assembly. As an exception to the foregoing method of appointment, the Board of Directors shall be formed of eleven members as follows:

(a) Three members who meet the requirements of independence as detailed hereinafter in this Article.

(b) A member representing the employees of the Company, to be nominated by the General Syndicate for Telecommunications Employees, who is required to be from amongst the employees of the Company.

(c) Seven members who shall be selected by virtue of a Prime Ministerial Decree upon a recommendation by the Minister of Communications and Information Technology.

The three independent members shall be nominated by non-State shareholders owning 1% or more of the Company shares, and the independent members are required to meet the following:

(i) He/she is not an employee in the Company, or any of its affiliates or sister companies of which Telecom Egypt has a shareholding in its capital during the five years preceding his/her nomination;

(ii) He/she may not have had - during the three years preceding his/her appointment - any substantial dealings, whether in person, or as a partner, shareholder, manager, key employee or board member, at any entity which has substantial dealings with the Company, its affiliates or sister companies in which the Company has a shareholding in its capital;

(iii) He/she may not have been eligible to any fees or additional amounts from the Company except for the allowances and remunerations of the Board members, or have the right to participate in incentive schemes by shares, if any, or motivated remuneration programs, or have the right to participate in pension schemes in the Company;

(iv) He/she may not be a relative up to the fourth degree of any Board member of the Company, or its chief executive officer and his/her deputies;

(v) He/she may not be a co-member in the board of directors of a company operating with the Company or have a close relation with any Board member by way of participating/sharing in any other company or entity;

(vi) He/she may not represent a substantial shareholding in the Company; and

(vii) He/she may not have been a member in the Board of Directors of the Company for a period exceeding nine consecutive years.

Should the non-State shareholders fail to nominate three independent members or nominate less than three members, or if the aforementioned requirements are not met in the independent members nominated by the non-State shareholders, then the Board of Directors may nominate independent members to complete the number of nominated independent members, provided that they also meet the aforementioned requirements of the independent members.

The juristic person may be represented by more than one board member. The representatives of the juristic person in the Board of Directors shall be as multiple as the number of his/her representatives present in the Board, in such case, the votes shall be as multiple as the number of representatives.

Article (22)

Article (22)

Board members shall be appointed for three years. However, the Board of Directors appointed according to the provision of the last paragraph of the previous Article shall continue performing its duties until a portion of the Company's shares is subject to offering and the Board of Directors is reconstituted subject to the provision of the previous Article. This shall not prejudice the right of the juristic person to substitute his/her representative in the Board in the manner stipulated under Articles Nos. (237) and (238) of the Executive Regulations of Act 159 of 1981.

Board members shall be appointed for three years. This shall not prejudice the right of the juristic person to substitute his/her representative in the Board in the manner stipulated under Articles Nos. (237) and (238) of the Executive Regulations of Act 159 of 1981.

Article (23)

Article (23)

If there are no members to replace the original Board member for the shareholders, the Board of Directors shall be entitled to appoint members to fill any vacancies of the shareholders' positions which may arise during the year. The Board of Directors shall effect such appointment if the number of its members becomes less than seven members.

The members appointed in the manner set forth in the previous paragraph shall proceed with performing the work immediately until the convention of the general assembly, which shall decide to appoint them or others in lieu of them.

If there are no members to replace the original Board member, the Board of Directors shall be entitled to appoint members to fill any vacancies which may arise during the year. The members appointed in the manner set forth in the previous paragraph shall proceed with performing the work immediately until the convention of the general assembly, which shall decide to appoint them or others in lieu of him/her. The Board shall effect such appointment whenever the number of its members falls below seven members, in which case the term of the new member shall complete that of his/her ancestor. Anyone who replaces the Board member representing the juristic person shall be appointed pursuant to a nomination of whom he/she represents.

In all events, the General Authority for Investment & Free Zones must be informed if the number of non-independent Board members falls below three, in order that the Authority calls the general assembly of the Company to at least complete the minimum legally required quorum of the Board.

Article (24)

Article (24)

The Board shall appoint a Chairman of the Board of Directors from amongst its members and one or more deputy(ies) of the Chairman may be appointed, and the Board shall determine which one of them shall replace the Chairman in his absence. In the event both the Chairman and his/her deputy are absent, the Board shall appoint the member who shall temporarily perform the duties of chairmanship.

The Board shall appoint a Chairman of the Board of Directors from amongst its members and one or more deputy(ies) may be appointed, and the Board shall determine which one of them shall replace the Chairman in his absence. In the event both the Chairman and his/her deputy are absent, the Board shall appoint the member who shall temporarily perform the duties of chairmanship. The Chairman of the Board may not be appointed for more than two consecutive terms, and such clause will be put into force starting from the new term of the Board of Directors following the ratification of the Extraordinary General Assembly that approved such clause.

The Chairman of the Board shall preside over the meetings of the Board of Directors and general assemblies of the shareholders, and the Board may entrust its Chairman with any other powers or duties.

Article (25)

Article (25)

The Board of Directors may appoint a managing director from amongst its members, under the title of a chief executive officer of the Company, and may appoint deputies to the chief executive officer who are not Board members. The Board of Directors may determine the competencies, remunerations, allowances and incentives of the chief executive officer and his/her deputies according to a proposal from the Remuneration and Incentive Committee referred to in Part Two herein below. The appointment of the chief executive officer and his/her deputies who must be less than sixty years old shall be renewed each two years by virtue of a Board resolution, whilst the appointment and renewal of the appointment of those who are over sixty years old shall be effected on an annual basis and by virtue of a resolution from the general assembly.

The Board may also form one or more committees from amongst its members, together with the committees referred to in Part Two herein below, and grant thereto some of its competencies or entrust them to control the course of business in the Company and execution of the Board resolutions.

The Board of Directors shall appoint a managing director from amongst its members under the title of a chief executive officer of the Company and determine his/her competencies. The Managing Director may not be appointed for more than two consecutive terms, and such clause will be put into force starting from the new term of the Board of Directors following the ratification of the Extraordinary General Assembly that approved such clause.

The managing director and chief executive officer shall be responsible for the actual management acts of the Company and chairmanship of the employees therein under the supervision and control of the Board. He/she shall be particularly responsible for the following:

(a) Enforcing the resolutions of the Board of Directors;

(b) Advising the Board with the current activities of the Company;

(c) Representing the Company before third parties;

(d) Preparing draft budget of the Company for considering its approval by the Board of Directors;

(e) Approving expenditure in the various aspects of the activities of the Company, in accordance with the items specified in the approved budget as well as the Regulations adopted by the Company;

(f) Signing on behalf of the Company on any agreement or obligation (and any modification, amendment, revocation or termination thereof) within the limits of the budget approved by the Board of Directors, or if he/she has been authorized therewith by the Board of Directors away from the limits of the budget, all in accordance with the Regulations of the Company;

(g) Settling any claim for/against the Company, where the value of such settlement or consensual settlement does not exceed an amount of one million Egyptian Pounds, and in cases of excess of this amount, it shall be submitted to the Board of Directors for approval;

(h) Appointing the employees of the Company, determining their salaries, remunerations and competencies; authorizing them to perform any competencies as he/she may decide; presiding them and undertaking all issues relating to them; all with due regard to the regulations, systems and procedures approved by the Board of Directors. As an exception for the foregoing, the Board of Directors shall appoint deputies to the chief executive officer who are not Board members according to a proposal from the managing director (chief executive officer) in which a resolution shall be issued by the managing director;

(i) Preparing proposals of the bylaws and submitting same to the Board to consider their approval;

(j) Executing other assignments and any other powers or duties as he/she may be assigned with by the Board; and

(k) Delegating or authorizing any of the Company employees or third parties in whatever is required for accomplishing any acts of the Company, in accordance with the applicable regulations and systems of the Company, or within the limits of the competencies that he/she is vested in by the Board of Directors.

The Board of Directors may determine the salaries, remunerations, allowances and incentives of the managing director (chief executive officer) and his/her deputies according to a proposal from the Remuneration and Incentive Committee referred to in Part Two herein below.

Article (26)

Article (26)

The Board of Directors shall hold its meeting in the Head Office of the Company or any of its branches in the Republic whenever its interest so requires to hold same upon an invitation by the Chairman of the Board or at the request of one-third of its members. The Board of Directors shall meet at least four times during each fiscal year. Furthermore, the Board may convene outside the Head Office of the Company, or any of its branches or outside Egypt, provided that all Board members are present in person or represented by a proxy and may also convene via conference call, with the resolutions being issued by passing in writing if all members so agree.

The Board of Directors shall hold its meeting in the Head Office of the Company or any of its branches in the Republic whenever its interest so requires to hold same upon an invitation by the Chairman of the Board or at the request of one-third of its members. The Board of Directors shall meet at least four times during each fiscal year. Furthermore, the Board may convene outside the Head Office of the Company or any of its branches or outside Egypt, provided that all Board members are present in person or represented by a proxy, and may also convene via conference or video call, provided that all Board members are present in person or represented by a proxy, with the resolutions being issued by passing in writing, provided that the resolution is issued unanimously.

The Board may convene outside the Head Office of the Company or any of its branches, and in the case of convening of the Board outside Egypt, all Board members must be present in person or represented by a proxy, provided that the Board minutes are recorded in the record prepared for that purpose, and signed by all attendants.

Article (27)

Article (27)

A Board member shall be entitled, whenever necessary, to delegate a colleague to represent him in the Board.

A Board member may delegate another Board member to attend the meetings of the Board, according to the following controls:

1- This delegation shall be recorded in writing; and

2- A Board member may not represent more than one member in attending the same meeting.

Article (30)

Article (30)

With due regard to the provisions of Articles Nos. from (96) through (101) of the said Act concerning joint stock companies, companies limited by shares and limited liability companies and the provisions of its Executive Regulations, the Board of Directors shall have the broadest power to manage the Company, except for what is explicitly reserved for the general assembly under the Articles of Association of the Company. Without limitation to this power, the Board may put the regulations relating to administrative, financial, personnel affairs and their financial transaction. The Board shall also put regulations pertaining to the organization of its acts, meetings and distribution of competencies and responsibilities.

With due regard to the provisions of Articles Nos. from (96) through (101) of the said Act concerning joint stock companies, companies limited by shares and limited liability companies and the provisions of its Executive Regulations, the Board of Directors shall have the broadest power to manage the Company, except for what is explicitly reserved for the general assembly under the Articles of Association of the Company. Without limitation to this power, the Board may put the regulations relating to administrative, financial, personnel affairs and their financial transaction. The Board shall also put regulations pertaining to the organization of its acts and meetings and distribution of the competencies and responsibilities.

The Board may also form one or more committee(s) from amongst its members and grant thereto some of its competencies; and may constitute these committees and determine their powers, work methods thereof and remuneration of their members.

Article (31)

Article (31)

The Chairman of the Board of Directors shall represent the Company before courts of law and third parties.

The Chairman of the Board of Directors and/or managing director, shall jointly and/or severally represent the Company before courts of law.

Article (32)

Article (32)

The right to sign severally on behalf of Company shall be vested in the Chairman of the Board of Directors, chief executive officer of the Company and each other member authorized by the Board for this purpose. The Board of Directors has the right to authorize the deputies of the chief executive officer, managers in the Company or authorized agents in the right to sign severally or jointly on behalf of the Company.

The right to severally sign on behalf of the Company shall be vested in the Chairman of the Board of Directors and chief executive officer and each other member authorized by the Board for this purpose. The Board of Directors or managing director may authorise or delegate any employee of the Company or third parties to sign severally or jointly on behalf of the Company.

Article (40)

Article (40)

The Board of Directors shall have the full authorities to determine the formation, powers and method of work of the committees referred to hereinabove, taking into consideration the aforementioned powers.

The Board of Directors shall have the full authorities to determine the formation, powers and method of work of the committees referred to hereinabove, taking into consideration the aforementioned powers. It may further form other committees and determine any authorities or powers thereto.

Article (42)

Article (42)

The following provisions shall apply with respect to the general assembly of the Company in the event of placing a portion of its capital for offering and forming the general assembly, in accordance with the provisions of the Act concerning joint stock companies, companies limited by shares and limited liability companies, provided that the election of the Government representatives in the general assembly shall be pursuant to a prime ministerial decree issued upon a proposal from the Minister of Communications and Information Technology and in application of the provision of Article 10 of Act 19 of 1998.

Until the transfer of the ownership of those shares of the Company which the Cabinet decides to offer them for subscription, the supreme council formed under the chairmanship of the Minister of Communications and Information Technology, the membership of the Chairman and Board members, three experts to be elected by the Minister of Communications and Information Technology, shall continue to practise the competencies of the general assembly, along with the Minister having the competencies of the chairman of the assembly.

Deleted.

Article (57)

Article (57)

With due regard to the provisions of Articles Nos. from (103) through (109) of the said Act concerning joint stock companies, companies limited by shares and limited liability companies and its Executive Regulations, the Central Auditing Organization shall audit the accounts of the Company, and upon placing a portion of the Company's shares for public offering, the Company may appoint one or more auditor(s) who must meet the conditions provided for by the law/Act for practicing the accountancy and auditing professions, and shall be appointed by the general assembly, which shall also determine his fees.

The auditor shall be held accountable for the authenticity of the data set forth in his report in his capacity as the representative of all shareholders. Each shareholder may discuss the auditor's report and request clarification of its contents during the convocation of the general assembly.

The Legal Sector of the Company shall act as a legal advisor and the Chairman of the Board of Directors may delegate one or more legal advisor(s) from outside the Company.

With due regard to the provisions of Articles Nos. from (103) through (109) of the said Act concerning joint stock companies, companies limited by shares and limited liability companies and its Executive Regulations, the Company may appoint one or more auditor(s) who must meet the conditions provided for by the law/Act for practicing the accountancy and auditing professions, and shall be appointed by the general assembly, which shall also determine his fees.

The auditor shall be held accountable for the authenticity of the data set forth in his report in his capacity as the representative of all the shareholders. Each shareholder may discuss the auditor's report and request clarification of its contents during the convocation of the general assembly. The Central Auditing Organization shall also audit the accounts of the Company in the event that the State shareholding is by a percentage not less than 25% of the Company's capital.

The Board of Directors or managing director may be assisted by one or more legal advisor(s) from any entity.