CHAPTER FOUR

FEDERATION OF SHAREHOLDING EMPLOYEES

Article (184)
	Employees of any joint stock company or partnership limited by shares company may establish a Federation to be called: "Federation of Shareholding Employees" for the purpose of owning part of the shares of the company where such a Federation is established, and distributing the profits as realized by these shares among the members in accordance with its statutes.

	The company where the employees have the right to establish a Federation, should be one of the companies governed by the provisions of the Law of Public Sector Authorities and Companies as promulgated by Law 97 of 1983, or one of the affiliated companies governed by the provisions of the Law of Public Business Sector Companies as promulgated by Law 203 of 1991, or the companies governed by other laws and fulfill the following conditions:

1.	Its capital should be not less than One Million Pounds; 

2.	The number of the company's permanent employees should not be less than fifty.

Article (185)

	The Federation of Shareholding Employees shall fulfill the following requirements:

1.	It should be registered with the Authority and have written statute;

2.	Only the employees of the company should participate in its institution and join its membership;

3.	The number of the Federation's membership at its registration should not be less than 20 members.

Article (186)

	Subject to the provisions of Federation Model Statute, the statute of the Federation should contain the following information:

1.	Name of the company in which the Federation is established, the scope of its business and its headquarters;

2.	The head office of the Federation;

3.	The organs of the Federation, their functions and the methods of members selection, their removal from office, or annulment of their membership and the justifications required for the validity of their decisions;

4.	The system and conditions set for the Federation's membership, the rights and duties of its members and particularly the right of attending the general assembly meetings and the quorum required for the validity of such meetings and voting;

5.	The Federation's self-financing resources and the method of utilizing and disposing thereof;

6.	System of financial control and auditing;

7.	The name of custodian Bank of the Federation funds;

8.	The percentage to be deducted from the profits to cover the Federation management expenses; and

9.	Method of amending the Federation's Statute.

Article (187)
	
	The Founders shall elect among themselves a committee of three persons to be empowered with completing the procedures of incorporating the Federation. The committee should submit to the Authority the following documents:

1.	The application of incorporation of the Federation;

2.	Five copies of the foundation contract duly signed by all founders of which three copies shall be countersigned by the company;

3.	Five copies of the Federation's statute duly signed by all founders, of which three copies shall be countersigned by the company;

4.	Five copies of the list of the Founders' names showing the full name of each founder, his surname, his age, religion, nationality, profession and domicile and signed by the committee members; and

5.	Five copies of the minutes of the Founders' meeting during which the committee entrusted with completing the foundation procedures was elected duly signed by all founders.

	The founders of the Federation shall be responsible for the expenses to be incurred in incorporating the Federation and the general assembly of the Federation shall refund to them such expenses. 

Article (188)

	The Authority shall examine the applications for incorporation and take a final decision in respect thereof within thirty days from the date of submitting complete set of documents.

	Upon approving the application the Authority shall mark two copies of the Federation's statute with an annotation indicating its registration, date and number of such registration and a copy of which shall be forwarded to the Federation together with the registration certificate. The Authority shall keep the second copy.

Article (189)

	In case the Authority refuses the application for incorporating the Federation it shall notify the founders with such decision and the reasons for such refusal by registered mail to which shall be attached the documents actually submitted to it, while keeping a copy of each of them.  Parties concerned shall have the right to contest the decision to the Contesting Committee stipulated by Article (50) of the Law within thirty days from the date of notifying them with the refusal decision.

Article (190)

	The Federation shall be established by a decree from the Authority.

	The Authority shall proceed to register the Federation statute in the register prepared for this purpose.

	The corporate personality of the Federation shall be established and become effective as of the following day to the date of issuing the decree of the Federation's incorporation.

Article (191)

	The Federation may own part of the company's nominal shares in favor of its members in the following manner:

1.	With the approval of the company's founders in the value and conditions to be agreed upon;

2.	With the approval of the company's extraordinary general assembly meeting through increasing its capital and appropriating the whole or part of this increase for the Federation in the value and conditions to be agreed upon; and 

3.	Buying the company shares whether or not are listed on the stock exchange.

	The Federation should not hold less than five percent (5%) of the value of the company's nominal shares.

	This percentage may be reduced by a decision of the Authority's Board of Directors in the cases it deems possible.
	
Article (192)

	The shares owned by the Federation shall be evaluated according to the following rules:

1.	Shares of the public sector companies which are held by individuals or private corporate entities shall be evaluated according to their market value;

2.	Shares of public business sector companies shall be evaluated according to the governing provisions of the Law of Public Sector Business Companies as promulgated by Law 203 of 1991; and

3.	Shares to be owned with the approval of the founders or the company's extraordinary general assembly shall be evaluated according to the value and conditions to be agreed upon.

Article (193)

	Pursuant to the conditions at which the shares are bought from the company founders or its extraordinary general assembly, the Federation shall have the right to sell its shares with the approval of its extraordinary general assembly provided it notifies the company sixty days before the date of transaction, specifying the number of shares to be disposed of, their type 
and the price offered for them.

Article (194)

	The right of the members of the Federation shall be confined to the profits realized by the shares.

           The employee's membership of the Federation shall lapse through his withdrawal or with the termination of his service with the company.

	The employee whose membership has lapsed or his inheritors shall have the right of redeeming the value of his contribution to the Federation computed according to the Federation's last approved balance sheet.  The Federation may not delay the redemption of the value of this contribution for more than three months from the lapse of the employee's membership.

Article (195)

	A Board of Directors formed of not less than three and not more than five members shall manage the Federation.

	The Chairman of the Federation's Board of Directors shall represent it vis-à-vis third parties and before courts.

	The Federation's statute shall specify the Board's functions and powers and the manner of electing its members and terminating their membership.

Article (196)

	The Federation's general assembly is the highest authority and is formed of all members.

	The general assembly shall convene its meetings at the Federation's head office. The Board of Directors may call the general assembly to convene its meeting at another venue to be specified in the invitation to the meeting.

Article (197)

	The general assembly of the Federation shall convene on the basis of:

1.	An invitation by the Board of Directors;

2.	A written request to be submitted to the Board of Directors by 25% of the members who have the right to attend the general assembly with an indication as to the purpose of such meeting; and

3.	An invitation by the Authority if it deems it necessary. It may invite the general assembly to convene if the Federation Board does not respond to the request referred to in the previous paragraph.

Article (198)

	The Federation's self-financing resources shall be composed of the following:

1.	Contributions by the members as determined by the Federation's statute;

2.	The proceeds of selling the shares;

3.	Loans;

4.	Grants and donations as accepted by the Board of Directors and within the Federation's purposes; and

5.	Any other resources resulting from Federation's activities.

Article (199)

	The conditions and procedures of incorporating the Federation shall be observed while amending its statute.

Article (200)

	The Federation shall be written off and deleted by a decree of the Authority in the following cases:

1.	Termination of the company in which the Federation is established;

2.	If the number of shares owned by the Federation is reduced below the minimum limit of shareholding for the company's capital and continues to be so for a full continuous year;	

3.	Desolating the Federation by the extraordinary general assembly decision; and

4.	If the Federation fails to realizing the purpose for which it is established or if it conducts an activity different from such purpose. The Authority shall notify the Federation with such violation and specify a date to remove and remedy the violation before taking a decision to delete the Federation.

Article (201)

	The Federation shall be notified with the deletion decision and the reasons of such deletion by registered mail with acknowledgement of receipt.

	The deletion of the Federation shall be annotated in the Authority's register.

	The concerned parties may contest the deletion decision of the Authority in accordance with paragraph (4) of the preceding article by lodging the contest to the Committee stipulated for by article (50) of the Law.

Article (202)

	Every Federation shall be considered after its deletion in a state of liquidation.

	During the period of liquidation the Federation shall retain its juridical status to the extent required for liquidation works.  

	The Federation management and staff shall be prohibited to continue its activities or dispose of its properties and funds.

Article (203)

	Except in the case of dissolving the Federation by its extraordinary general assembly and the appointment of a liquidator, the Authority shall appoint a liquidator and determine his remuneration at the expense of the Federation and the period during which he shall effect the liquidation.

	The management of the Federation shall deliver to the liquidator all documents, books, and registers of the Federation. The Bank where the Federation's funds are deposited shall not dispose any of the funds thereof except by a written authorization from the Liquidator as of the date it is notified with the deletion decision.

	The Liquidator shall carry out all necessary steps for preserving the Federation's funds and rights.

Article (204)

	Following complete liquidation, the liquidator shall distribute the funds among the Federation's members according to the provisions of its statute and shall notify the Authority with all the procedures followed thereby.