General Decision of the Financial Market Council No. 23 of March 10, 2020 on the Criteria and Procedures for Designating Independent Members of the Board of Directors and Supervisory Board and the Minority Shareholders' Representative

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General Decision of the Financial Market Council No. 23 dated March 10, 2020 on the criteria and procedures for designating independent members of the board of directors and supervisory board, and the minority shareholders' representative

The College of the Financial Market Council, meeting on March 10, 2020, Having regard to Law No. 94-117 of November 14, 1994 on the reorganization of the financial market, as amended and supplemented by subsequent texts, notably Law No. 2019-47 of May 29, 2019 on improving the investment climate, and in particular Articles 28 and 31 thereof; Having regard to the General Regulations of the Tunis Stock Exchange, as promulgated by the Minister of Finance Decree of February 13, 1997 and amended and supplemented by subsequent texts, notably the Minister of Finance Decree of August 15, 2019, and in particular Article 38 thereof; Decides:

Preamble
Without prejudice to special regulatory provisions, this general decision aims to establish the criteria and procedures for designating independent members within the board of directors and supervisory board, as well as the minority shareholders' representative, in accordance with Article 38 of the General Regulations of the Tunis Stock Exchange.

Chapter I
Criteria and procedures for designating independent members of the board of directors and supervisory board

Section I
Application for candidacy and eligibility criteria

Article 1: Prior to the designation of independent members, the company's board of directors or management board must publish a call for applications at least ten (10) days before the scheduled closing date of applications. The call for applications must include at least the following:

• The purpose of the call for applications,
• Eligibility criteria, including scientific qualifications, competence, and experience,
• Composition of the application file,
• Procedures for submitting the application file,
• Deadline for receipt of applications,
• Process for examining applications.
  Models of the application form and sworn declaration must be attached to the call for applications.
  The call for applications is published at the company's expense in the official bulletin of the Financial Market Council and on the website of the Tunis Stock Exchange.

Article 2: Any candidate for the position of independent member of the board of directors or supervisory board must meet conditions of honor, integrity, impartiality, honesty, confidentiality, as well as competence and experience appropriate to their functions. They must be a natural person and enjoy civil rights.

Article 3: The following persons cannot be candidates for the position of independent member of the board of directors or supervisory board:

• Persons falling under one of the situations set out in Articles 193 and 256 of the Commercial Companies Code,
• Any person who has been subject to a final judgment for an offense against exchange control regulations or legislation on combating terrorism and money laundering,
• Persons who have been subject to a sanction of removal and/or withdrawal of approval or authorization for the exercise of a regulated professional activity.

Article 4: A candidate for the position of independent member of the board of directors or supervisory board must not have, on the date of application submission, any direct or indirect interest with the concerned company, its shareholders, directors, members of the supervisory board, members of the management board, or a third party, of such nature as to affect the independence of their decision and information confidentiality, or to place them in a situation of actual or potential conflict of interest.

Article 5: Any candidate must in particular meet the following criteria:

• Not be or not have been during the five (5) years preceding the application submission:
  • CEO, General Manager, Deputy General Manager, Chairman of the Management Board, Unique General Manager, or employee of the concerned company,
  • CEO, General Manager, Deputy General Manager, Chairman of the Management Board, Unique General Manager, or employee of a company belonging to the same group as the concerned company.
• Not be CEO, General Manager, Deputy General Manager, Chairman of the Management Board, or Unique General Manager of a company in which the concerned company is directly or indirectly an administrator or member of the supervisory board, or in which the Chairman of the Board of Directors, General Manager, Deputy General Manager, Chairman of the Management Board, or Unique General Manager of the concerned company (current or former within five years) or its employee, is an administrator or member of the supervisory board.
• Not be a parent or descendant or spouse of:
  • the CEO, General Manager, Deputy General Manager, Chairman of the Management Board, or employee of the concerned company,
  • the CEO, General Manager, Deputy General Manager, Chairman of the Management Board, or employee of a company belonging to the same group as the concerned company.
• Not be a service provider, notably advisor or banker, supplier or client of the concerned company.
• Not hold direct equity participation in the capital of the concerned company or indirect participation as spouse, parent, or descendant of the CEO, General Manager, Deputy General Manager, Chairman of the Management Board, Unique General Manager, or an employee of the company.
• Not simultaneously be a member of the board of directors, supervisory board, or management board of another listed company operating in the same sector or belonging to the same group.
• Not be CEO, General Manager, Deputy General Manager, Chairman of the Management Board, Unique General Manager, shareholder, partner, or employee of a company having financial, professional, commercial, or contractual links with the concerned company or a competing company.
• Not exercise a professional activity directly or indirectly linked to the financial market and/or dissemination of financial information.
• Not be a member of an association whose object has a direct or indirect link with the financial market.

Article 6: A candidate for the position of independent member of the board of directors or supervisory board must meet the qualification, competence, and experience criteria set out in the call for applications. They must hold at least a Master's degree (or equivalent) and have at least 10 years of professional experience in the specialty or sector specified in the call for applications.

Section II
Constitution and submission of the application file

Article 7: The application file must include at least the following documents:

• An application request addressed to the Chairman of the Board of Directors or Management Board, presenting the candidate, reasons for candidacy, and profile,
• An application form according to the model provided in the call for applications,
• The candidate's curriculum vitae,
• A copy of an identity document,
• A sworn declaration, duly completed and signed by the candidate, attesting that they meet the eligibility criteria set out in this general decision and the call for applications,
• A criminal record extract (Bulletin No. 3) dated less than 3 months from the date of submission,
• Documents justifying the competencies and qualifications stated in the curriculum vitae.

Article 8: The application file must be transmitted or submitted to the company by any means leaving a written record within the deadlines and according to the procedures set out in the call for applications. Any incomplete application file or one submitted late must not be taken into account.

Section III
Selection of candidates

Article 9: In the absence of a nomination committee within the company, it must establish an application examination process including an evaluation methodology. This process is disclosed to shareholders in the annual management report. Candidates are selected after review and evaluation of files submitted within the deadlines set in the call for applications, taking into account compliance with the conditions required under the company's established examination process. A preliminary list of admitted candidates is approved by the board of directors or management board upon proposal, where applicable, from the nomination committee or any other committee or commission created for this purpose. This list is transmitted, for opinion, to the Financial Market Council before final approval of candidates by the ordinary general meeting. The Financial Market Council may refuse any candidate on the list if the choice does not comply with this general decision. The prior opinion of the Financial Market Council is not required for companies whose directors or supervisory board members are subject to approval by a supervisory or control authority.

Article 10: Selected candidates are informed of their selection at least twenty-one (21) days before the holding of the ordinary general meeting.

Article 11: The company makes available to shareholders, at least twenty-one (21) days before the holding of the ordinary general meeting, as an annex to the draft resolutions, the following information regarding selected candidates:

• Name, first name, and date of birth of candidates,
• Diplomas and qualifications,
• Professional activities over the last ten (10) years, particularly functions held or previously held in other companies.

Chapter II
Criteria and procedures for designating the minority shareholders' representative, member of the board of directors or supervisory board.

Section I
Application for candidacy and eligibility criteria

Article 12: Prior to the designation of a minority shareholders' representative, the company's board of directors or management board must publish a call for applications at least ten (10) days before the scheduled closing date of applications. The call for applications must include at least the following:

• The purpose of the call for applications,
• Eligibility criteria, including scientific qualifications, competence, and experience,
• Composition of the application file,
• Procedures for submitting the application file,
• Deadline for receipt of applications,
• Process for examining applications.
  Models of the application form and sworn declaration must be attached to the call for applications.
  The call for applications is published at the company's expense in the official bulletin of the Financial Market Council and on the website of the Tunis Stock Exchange.

Article 13: Any candidate for the position of minority shareholders' representative must meet conditions of honor, integrity, impartiality, honesty, confidentiality, as well as competence and experience appropriate to their functions. They must be a natural person and enjoy civil rights.

Article 14: The following persons cannot be candidates for the position of minority shareholders' representative:

• Persons falling under one of the situations set out in Articles 193 and 256 of the Commercial Companies Code,
• Persons who have been subject to a final judgment for an offense against exchange control regulations or legislation on combating terrorism and money laundering,
• Persons who have been subject to a sanction of removal and/or withdrawal of approval or authorization for the exercise of a regulated professional activity.

Article 15: Any candidate for the position of minority shareholders' representative must demonstrate an individual shareholding in the capital of the concerned company not exceeding 0.5%.

Article 16: The candidate must not have, on the date of application submission, any direct or indirect interest with the concerned company, its non-minority shareholders, directors, supervisory board members, or management board members of such nature as to place them in a situation of actual or potential conflict of interest.

Article 17: Any candidate must in particular meet the following criteria:

• Not be or not have been during the five (5) years preceding application submission:
  • CEO, General Manager, Deputy General Manager, Chairman of the Management Board, Unique General Manager, or employee of the concerned company,
  • CEO, General Manager, Deputy General Manager, Chairman of the Management Board, Unique General Manager, or employee of a company belonging to the same group as the concerned company.
• Not be CEO, General Manager, Deputy General Manager, Chairman of the Management Board, or Unique General Manager of a company in which the concerned company is directly or indirectly an administrator or member of the supervisory board, or in which the Chairman of the Board of Directors, General Manager, Deputy General Manager, Chairman of the Management Board, or Unique General Manager of the concerned company (current or former within five years) or its employee, is an administrator or member of the supervisory board.
• Not be a parent or descendant or spouse of:
  • the CEO, General Manager, Deputy General Manager, Chairman of the Management Board, or employee of the concerned company,
  • the CEO, General Manager, Deputy General Manager, Chairman of the Management Board, or employee of a company belonging to the same group as the concerned company.
• Not be a service provider, notably advisor or banker, supplier or client of the concerned company.
• Not simultaneously be a member of the board of directors, supervisory board, or management board of another listed company operating in the same sector or belonging to the same group.
• Not be CEO, General Manager, Deputy General Manager, Chairman of the Management Board, Unique General Manager, proxy, shareholder, partner, or employee of a company having financial, professional, commercial, or contractual links with the concerned company or a competing company.
• Not exercise a professional activity directly or indirectly linked to the financial market and/or dissemination of financial information.
• Not be a member of an association whose object has a direct or indirect link with the financial market.

Article 18: Any candidate for the position of minority shareholders' representative must meet the qualification, competence, and experience criteria set out in the call for applications. They must hold at least a Master's degree (or equivalent) and have at least 10 years of professional experience in the specialty or sector specified in the call for applications.

Section II
Constitution of the application file

Article 19: The application file must include at least the following documents:

• An application request addressed to the Chairman of the Board of Directors or Management Board, presenting the candidate, reasons for candidacy, and profile,
• An application form according to the model provided in the call for applications,
• The candidate's curriculum vitae,
• A copy of an identity document,
• A sworn declaration, duly completed and signed by the candidate, attesting that they meet the eligibility criteria set out in this general decision and the call for applications,
• A criminal record extract (Bulletin No. 3) dated less than three (3) months from the date of submission,
• Documents justifying the competencies and qualifications stated in the curriculum vitae,
• A certificate of share ownership justifying the participation rate in the company's capital.

Article 20: The application file must be transmitted or submitted to the company by any means leaving a written record within the deadlines and according to the procedures set out in the call for applications. Any incomplete application file or one submitted late must not be taken into account.

Section III
Selection of the candidate

Article 21: Upon closing of the call for applications, the company transmits, for opinion, to the Financial Market Council the preliminary list of admitted candidates.
The Financial Market Council may refuse any candidate on the list who does not comply with this general decision.
The prior opinion of the Financial Market Council is not required for companies whose directors or supervisory board members are subject to approval by a supervisory or control authority.

Article 22: Within a maximum period of ten (10) days following the closing of the call for applications, the concerned company must convene minority shareholders in an elective assembly. The notice of convocation is published at the company's expense in the Official Bulletin of the Financial Market Council and on the website of the Tunis Stock Exchange at least twenty-one (21) days before the holding of the elective assembly. The concerned company makes available to minority shareholders information on selected candidates, accompanied by the following:

• Name, first name, and date of birth,
• Diplomas and qualifications,
• Professional activities over the last ten (10) years, particularly functions held or previously held in other companies,
• Percentage of participation in the capital.

Article 23: The elective assembly is presided over by the minority shareholder holding the largest number of shares. The president is assisted by two scrutators and a secretary designated by the attending shareholders, forming the assembly's bureau. An attendance sheet is drawn up containing the names of minority shareholders or their representatives, their domicile, and the number of shares they hold or represent. Attending minority shareholders or their proxies must sign the attendance sheet; it is certified by the assembly's bureau and deposited at the registered office of the concerned company for public inspection. The number of attending or represented minority shareholders and their share of social capital will be determined based on the said attendance sheet.

Article 24: The elective assembly must have a single agenda item: the designation of the minority shareholders' representative.
It validly deliberates on first convocation only if attending or represented minority shareholders hold at least one-third of the shares held by all minority shareholders.
In the absence of a quorum, a second assembly is convened without any quorum requirement. A minimum period of fifteen (15) days must be observed between the first and second convocations.

Article 25: During the elective assembly, minority shareholders must elect a single candidate from the proposed list.
No one may participate in the election of the minority shareholders' representative if they hold a management or administrative function within the concerned company.
To be elected, the candidate must obtain a majority of votes from attending or represented minority shareholders participating in the election.
If no candidate obtains a majority after this election, a second round is organized during the same session. Only the three candidates who obtained the highest number of votes are retained. The choice will fall on the candidate who obtains the highest number of votes in the second round.

Article 26: Any minority shareholder may vote by correspondence or be represented by any person holding a special proxy.
In case of voting by correspondence, the company must make available a special form for this purpose. The vote cast in this manner is valid only if the signature on the form is legalized. Voting by correspondence must be sent to the company by any means leaving a written record. Only votes received by the company before the expiration of the day preceding the meeting of the elective assembly are taken into account.

Article 27: A minutes of the deliberations of the elective assembly is signed by the bureau members. It must contain at least the following statements:

• Date and place of its holding,
• Agenda,
• Composition of the bureau,
• Number of shares held by attending or represented persons and the reached quorum,
• List of candidates proposed to the elective assembly,
• Summary of debates,
• Result of the vote.
  The minutes must be deposited at the registered office of the concerned company. Without delay, the company must inform the Financial Market Council of the results of the minority shareholders' elective assembly deliberations.

Article 28: The company must submit the designation of the minority shareholders' representative for ratification by the ordinary general meeting.

Chapter III
Final and transitional provisions

Article 29: No one may sit on more than three boards of directors or supervisory boards as an independent member or minority shareholders' representative.

Article 30: Companies must without delay inform the Financial Market Council of any situation preventing the designation of independent members to the board of directors or supervisory board and/or the minority shareholders' representative.

Article 31: Companies must without delay refer to the Financial Market Council when an independent member of the board of directors or supervisory board and/or the minority shareholders' representative no longer meets the eligibility criteria set out in this general decision, and examine with them the necessary measures to be taken.

Article 32: The provisions of Articles 195 and 243 of the Commercial Companies Code apply in case of a vacancy on the board of directors or supervisory board as an independent member and/or minority shareholders' representative. ---