kgf main contract
DESCRIPTION
Credit Guarantee Fund Main ContractTRANSCRIPT
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CREDIT GUARANTEE FUND J.S.C
ARTICLES OF ASSOCIATION
HEAD OFFICE: ANKARA CAPITAL: 240,000,000.-‐TL.
CONTENTS ARTICLE NO
PART ONE INCORPORATION, TRADENAME, FIELD OF OPERATION, HEAD OFFICE, DURATION
Incorporation and Founders 1
Tradename of the Corporation 2
Field of Operation of the Corporation 3
Corporate Head Office and Branch Offices 4
Duration of Corporation 5
PART TWO
PRINCIPAL CAPITAL, PAYMENT OF CAPITAL AND TERMS THEREOF,
CAPITAL INCREASE AND DECREASE, SHARE CERTIFICATES
Corporate Capital 6
Common Stocks and Stock Certificates 7
Transfer of Shares and Share Certificates 8
Capital Increase 9
Capital Decrease 10
PART THREE
EXECUTIVE BOARD AND COMMITTEES
Executive Board and Membership Duration 11
Executive Board Meetings and Resolutions 12
Minutes of the Executive Board Meetings 13
Substitution of Vacancies 14
Committees and Commissions 15
Credit Approval Committee 16
Executive Board Resolutions Made without a Meeting 17
Roles and Powers of the Executive Board 18
Representing and Binding the Corporation 19
Remunerations to the Chair and the Members 20
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PART FOUR
AUDIT OF THE CORPORATION
Selection of the Independent Auditing Body 21
Responsibilities of the Independent Auditing Body and the Auditors 22
PART FIVE
GENERAL ASSEMBLY
Ordinary and Extraordinary General Assembly 23
Roles and Powers of the General Assembly 24
Those Who Can Call For the General Assembly 25
Call and Announcement 26
Venue of Assembly 27
Voting Right 28
Ordinary Assembly and Resolution Quorums 29 Assembly and Resolution Quorums in case of Amendments to the Articles of Association 30
Representation by Proxy 31
List of Attendees 32
Chairperson of the General Assembly 33
Minutes of the General Assembly 34
PART SIX
ACCOUNTING PERIOD, DISTRIBUTION OF PROFIT, LEGAL RESERVES
Accounting Period 35
Distribution of Profit and Legal Reserves 36
PART SEVEN
WINDING UP AND DISSOLUTION OF THE CORPORATION
Call for Dissolution 37
Liquidators 38
PART EIGHT
MISCELLANEOUS AND FINAL PROVISIONS
Corporate Announcements 39
Referral of Disputes for Settlement 40
Website 41
Legal Provisions 42
Provisional Articles 1,2,3,4,5
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PART ONE INCORPORATION, TRADENAME, FIELD OF OPERATION, HEAD OFFICE, DURATION Incorporation and Founders Article 1: A joint stock company is incorporated by and between the founders, whose full names, legal
domiciles and nationalities are written below, as per the provisions of the Turkish Code of Commerce regarding instantaneous incorporation of joint stock companies.
1. Turkish Foundation for Small and Medium Business, Self Employed and Managers (TOSYÖV); 2. Foundation for the Promotion of Vocational Training and Small Industry (MEKSA); 3. Union of Chambers and Commodity Exchanges of Turkey (TOBB); 4. Turkish Confederation of Tradesmen and Craftsmen (TESK); 5. Small and Medium Enterprises Development Organization (KOSGEB)
6. T.Halk Bankası A.Ş. (HALKBANK)
Trade name of the Corporation Article 2: Trade name of the corporation is "Kredi Garanti Fonu Anonim Şirketi" (Credit Guarantee Fund
J.S.C.)
Field of Operation of the Corporation Article 3: With the intention of searching for and developing new and contemporary solutions to
compensate the gap resulting from total absence of the credit guarantee funds, which have developed and common examples in the industrialized communities, in the developing Turkish economic life; and gaining know-‐how and experience by establishment and management of a credit guarantee fund as a model project to provide the ground for scientific research and development activities on Credit Guarantee Fund;
Excluding the restrictions imposed with the resolutions of the Corporate Executive Board, offering surety for any credit in favor of any real person or legal entity enterprises who operate in the scope of subsidies set forth in the Laws, Resolutions, Decrees, Regulations, Communiqués already issued or to be issued with Public nature and who are in shortage of guarantee, financial data, moral values or capital with respect to creditworthiness as well as any Small and Medium Scale Enterprises, farmers, tradesmen, craftsmen and the self-‐employed having any economic operation regardless of whatever sector or economic operation it is and being in shortage of guarantee, financial data, moral values or capital with respect to creditworthiness; the corporation,
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a. may provide any donation and credit at home and abroad; establish any pledge and guarantee against credits; acquire movable and immovable properties, intellectual and industrial rights; and dispose the same both in kind and in person including sales thereof.
b. shall secure and manage a Fund for the purpose of overcoming the challenges encountered by any real person or legal entity enterprises who operate in the scope of subsidies set forth in the Laws, Resolutions, Decrees, Regulations, Communiqués as well as the Small and Medium Scale Enterprises in finding credit guarantees. It shall accept and manage the contributions that Public and Private persons and entities might grant to the corporation for the same purpose. To the same aim, it shall found any financial, industrial and commercial company and shall participate in the already founded ones.
c. Is entitled to give and accept encumbrances, pledges over commercial enterprises, sureties, letters of guarantee and any other pledges as well as guarantees in kind and in person in order guarantee the payables and receivables of the corporation or third parties. It is entitled to demand representation, annotation, registration and cancellation in the title deed registrations and other registrations in relation to these transactions.
d. May render all and any scientific and educational organization and publication, survey, project, engineering, feasibility and consultancy services both at home and abroad and may have the same done.
e. May cooperate with any local or foreign organization that is even partially similar in terms of purpose and subject, participate in the same, take over and merge with the same, or establish new enterprises or companies or other legal entities, acquire shares thereof.
f. The Corporations shall conduct and publish industrial market analyses in its fields of operation; in order to raise funds for the corporation, it shall offer such information to the use of Small and Medium Scale Enterprises and any real person or legal entity enterprises who operate in the scope of subsidies set forth in the Laws, Resolutions, Decrees, Regulations, Communiqués when it is necessary for expanding the market and structuring the customer portfolio in a sound and quality fashion for any real person or legal entity enterprises who operate in the scope of subsidies set forth in the Laws, Resolutions, Decrees, Regulations, Communiqués and for Small and Medium Scale Enterprises.
g. May offer surety against any credit that is extended by Public Institutions and Organizations and Banks for agricultural subsidies including Fattening and Animal Husbandry activities in favor of agricultural holdings and producers who are identified as Small and Medium Scale Enterprises before such agencies.
h. May found companies at home and abroad with its partners in order to engage in any insurance, movable and immovable valuation, risk and venture capital, risk management, assets management activities for creating alternatives that facilitate access of Small and Medium Scale Enterprises to financing, for strengthening credit guarantees thereof and protecting assets thereof against all and any risks; or may take over or participate in the already founded companies in order to carry out such activities.
ı. The Corporation shall support the companies which are characterized as Small and Medium Scale Enterprises as defined in the applicable legislation with regard to surety and guarantee
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supports to be granted against the capital shares of the shareholders which stand as guarantee. In surety and guarantee transactions to be executed on the basis of cash and/or non-‐cash resources and/or supports obtained/to be obtained from Public or private, local or foreign institutions, organizations or persons –the corporate capital being excluded-‐, the Executive Board shall have the power to define the scales and criteria of enterprises being subject to the surety and guarantee transactions unless otherwise provided for in the agreement signed/to be signed with the institutions, organizations and persons providing the resource/support.
In case of any future intention to get engaged with other works than the foregoing transactions which may be deemed advantageous for the corporation, the conditions shall be submitted to the General Assembly for approval upon such proposal of the Executive Board and performance of such works shall be permissible once a resolution is made thereon. Such resolution, which constitutes an amendment to the articles of associations, shall duly be registered in the Trade Registry and announced in the Turkish Trade Registry Gazette.
Corporate Head Office and Brach Offices Article 4: Corporate Head Office is located in Ankara. In case of change of address, the new address shall
be announced in the Turkish Trade Registry Gazette. Upon a decision to be made by the executive board, the corporation may open agencies, fixed
and mobile branch offices, representation offices and liaison offices in and out of Turkey.
Duration of Corporation Article 5: Legal existence of the corporation is not limited with any time period.
PART TWO PRINCIPAL CAPITAL, PAYMENT OF CAPITAL AND TERMS THEREOF,
CAPITAL INCREASE AND DECREASE,
SHARE CERTIFICATES
Corporate Capital Article 6:
Corporate principal capital is 240,000,000 Turkish Lira. This capital is divided into 240,000 registered shares of 1,000 (one thousand) Turkish Lira nominal value each. The underwriting capital is fully paid up in cash.
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Distribution of the capital by shareholders is shown below:
Name of the Shareholder Group Share Percentage Amount ( % )
TOBB-‐ Union of Chambers and Commodity Exchanges of Turkey A 33.2603 79,824,743.29
KOSGEB-‐ Small and Medium Enterprises Development Organization B 33.2507 79,801,743.30
TESK -‐ Turkish Confederation of Tradesmen and Craftsmen D 0.1418 340,503.89
TOSYÖV-‐ Turkish Foundation for Small and Medium Business, Self Employed D 0.0091 22,000.00
and Managers
MEKSA-‐ Foundation for the Promotion of D 0.0045 11,009.52
Vocational Training and Small Industry
Akbank T.A.Ş. C 1.7544 4,210,526.32
Albaraka Türk Katılım Bankası A.Ş. C 1.7544 4,210,526.32
Asya Katılım Bankası A.Ş. C 1.7544 4,210,526.32
Denizbank A.Ş. C 1.7544 4,210,526.32
Burgan Bank A.Ş. C 1.7544 4,210,526.32
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Finans Bank A.Ş. C 1.7544 4,210,526.32
Türkiye Halk Bankası A.Ş. C 1.7544 4,210,526.32
HSBC Bank A.Ş. C 1.7544 4,210,526.32
ING Bank A.Ş. C 1.7544 4,210,526.32 Kuveyt Türk Katılım Bankası A.Ş. C 1.7544 4,210,526.32
Şekerbank T.A.Ş. C 1.7544 4,210,526.32
Türk Ekonomi Bankası A.Ş. C 1.7544 4,210,526.24
Türkiye Cumhuriyeti Ziraat Bankası A.Ş. C 1.7544 4,210,526.32
Türkiye Finans Katılım Bankası A.Ş. C 1.7544 4,210,526.32
Türkiye Garanti Bankası A.Ş. C 1.7544 4,210,526.32
Türkiye İhracat Kredi Bankası A.Ş. C 1.7544 4,210,526.32
Türkiye İş Bankası A.Ş. C 1.7544 4,210,526.32
Türkiye Vakıflar Bankası T.A.O. C 1.7544 4,210,526.32
Yapı ve Kredi Bankası A.Ş. C 1.7544 4,210,526.32
TOTAL 100 240,000,000.00
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Common Stocks and Stock Certificates
Article 7:
All the shares representing the corporate capital are registered. The share certificates can only be issued as registered shares. Should the holders of the shares which make up one tenth of the corporate capital make a claim, the executive board shall issue registered share certificates and distribute the same to all share owners. It is required that the share certificates are signed by the chair of executive board along with the vice chair or another member of the executive board who is authorized to affix its signature.
The executive board may also issue other certificates until the share certificates are issued.
The stocks that are issued prior to registration of the corporation and the capital increase shall be invalid; however, the liabilities originating from subscription shall remain valid.
Unless consent of all shareholders is obtained, type of shares and share certificates may not be changed.
Transfer of Shares and Share Certificates
Article 8:
The procedure to be followed during transfer of the corporate shares and share certificates
among the existing shareholders or to third parties shall be as follows: Each shareholder owning shares of Group A, Group B, Group C, and Group D is entitled to
transfer its shares/share certificates to shareholders from the same group either in part or in full. Nevertheless, if no shareholder from the same group demands taking over the transfer of
shares when any shareholder owning shares of Group A, Group B, Group C, and Group D wishes to transfer its shares; the shareholder who wishes to transfer its shares shall make its offer to shareholders from other groups on the shares it would like to transfer; if shareholders from other groups show no demand for buying the subject shares, either, the shareholder concerned shall be entitled to sell and transfer the shares it owns to third parties.
In case of transfer of shares or share certificates, the procedures which are detailed below shall be followed in addition to the above requirements:
• The shareholder to fully or partially transfer its shares shall initially notify the executive board in writing of its related offer as well as names of the persons to whom it would like to transfer its shares and the price it sets.
• Within 3 (three) workdays as of receipt of such notification, the executive board shall notify the circumstances to the shareholders concerned in writing and request that the shareholders concerned notify the executive board of their related demands in writing no later than 30 (thirty) workdays. Should there be more than one bidder; out of those shareholders who make a bid for the shares, the one who offers a higher bid shall be entitled to take over the shares on condition that the
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bid is not lower than the price notified by the executive board.
• Once it is decided which shareholder will be taking over the shares, the executive board shall immediately let the buyer and seller shareholders complete the transactions in 15 (fifteen) workdays.
• However, if such sales are not realized within 30 (thirty) workdays as of the date when the shares get tradable, due to the failure to transfer the shares within the timeframe given above, or if they are sold at a price less than the price already notified to the executive board, the sales shall not be valid before the Corporation, the executive board shall not certify the transfer and the transfer of shares shall not be possible unless the foregoing processes are repeated.
Transfer of shares and share certificates shall be applied within the framework of the provisions in the articles of association and shall enure upon such resolution of the executive board. In case the executive board considers the subject transfer to be in breach of the principles laid out in the articles of association, it will be entitled not to register the same in the Corporate shares book.
With consideration to composition of the circles of shareholders and the field of operation of the corporation, any transfer transaction that is conducted in violation of the provision on transfer of shares as included in the articles of association shall be deemed bull and void before the corporation and the executive board shall not register in the shares book such transfers that are based on said transactions.
No shareholder shall establish any restrictions (establishment of any rights in-‐kind or personal rights such as establishment of usufruct, pledge, security interest etc. which fully or partially limits or abolishes the proprietary right or any disposition which enables such outcome either directly or consequentially) on its shares without prior written permission of other shareholders, have the same established or permit the same to be established. Promises to transfer the shares or share certificates shall be considered hereunder, as well.
Transfer shall take place under a transfer agreement if no share certificates have been issued, and via handing over to the transferee the endorsed certificate if share certificates have been issued. Transfer shall enure to the corporation and third parties only if it is registered in the shares book.
Capital Increase Article 9: Upon a proposal to be made by the Executive Board, capital may be increased with such
resolution of the General Assembly in compliance with the provisions the Turkish Code of Commerce and these articles of association. Except the increases made through internal recourses, capital shall not be increased unless pecuniary value of shares are fully paid.
Corporation shall not subscribe to its own shares in case of capital increase. If it does, those shares shall be deemed subscribed by the executive board members and the executive board members shall be liable for the share costs. It is obligatory in case of capital increase that the nominal values of the subscribed shares with pecuniary consideration are paid at 25% before registration, and the remaining 75% shall be paid in 24 months following registration of the corporation. Payment of cost of shares shall be demanded by the executive board of the corporation.
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Capital subscriptions remaining for post-‐registration shall be collected at times and under conditions to be defined by the Executive Board either in installments or in full. Call for fulfillment of the capital subscription shall be made through an announcement on the corporate website if any website obligation emerges; further, it shall be delivered by hand or notified by letter to the shareholders who are written in the shares book and the shareholders who have furnished documents evidencing their share certificates or share ownership in advance to the corporation and notified their address. The announcement shall clearly state the ratio or amount of subscription liability of which payment is required as well as the date and place of payment.
Each shareholder is entitled to acquire the newly issued shares in accordance with the proportion of their existing shares to the capital. However, the subscription privilege may be limited or revoked on justified grounds and upon affirmative votes of minimum sixty percent of the principal capital. The justified grounds determined pursuant to the provisions of Turkish Code of Commerce shall be clearly specified in the resolution of the general assembly.
The shareholders who fail to fulfill their capital increase liabilities and to pay the installments demanded by the executive board in due time shall be obliged to pay the Corporation 5% default interest and 5% contractual penalty as of the due date for payment of the installment without need for any warning. In addition to the liability to pay a default interest, the executive board is entitled to deprive the shareholder, who is in default, of its subscription and its rights in respect of the partial payment it has made and to sell the subject share and substitute the shareholder and to cancel the share certificates given to the concerned, if any. If the cancelled share certificates cannot be obtained, the decision for cancellation shall be announced in the Turkish Trade Registry Gazette and also in the way as stipulated in the articles of association. In case of default, damage claims of the corporations shall remain reserved in addition to the default interest and penalty. Annulment provisions of the Turkish Code of Commerce shall also apply to the shareholders in default who fail to fulfill their capital increase liabilities.
Capital Decrease
Article 10:
Capital may be decreased upon such resolution of the General Assembly. The General Assembly shall decide to decrease the capital either by reducing the nominal value of the shares or by reducing the number of shares or by any other means.
In the announcements, letters and website notifications, if obligatory, of calls for general assembly; the reasons for resorting to capital decrease, the purpose of decrease and the method of decrease shall be explained in detail and in line with the accountability principles. Furthermore, the executive board shall submit the general assembly a report covering those issues; the report that is approved by the general assembly shall be registered and announced.
Once the general assembly concludes on the capital decrease issue, the executive board shall post such resolution on the corporate website if website obligation emerges and shall announce the same in the Turkish Trade Registry Gazette three times in seven-‐day intervals. The creditors which are known to the corporation shall be sent letters of call separately.
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Should the capital be decreased for the purpose of covering a deficit resulting in the balance sheet from the losses and decreased in the same ratio as such deficit, the executive board may refrain from calling for the creditors and paying for or securing claims of the same.
PART THREE EXECUTIVE BOARD AND COMMITTEES
Executive Board and Membership Duration Article 11: The corporate affairs and management shall be executed by an executive board of nine (9)
members in total, which is constituted through selection by the general assembly of three candidates each nominated by the shareholders from each of Group A, Group B and Group C. Members of the executive board shall not have to be a shareholder. Shareholders may nominate to be a members of the executive board if they so wishes.
However, in case of funding provided by the RoT Prime Ministry Undersecretariat for Treasury to the corporation, out of the three candidates to be nominated by the shareholders from Group B and Group C, one each shall be appointed by the RoT Prime Ministry Undersecretariat for Treasury until the accounts for Treasury support are settled and liquidated.
Upon funding provided by the RoT Prime Ministry Undersecretariat for Treasury to the corporation and after settlement and liquidation of the accounts for Treasury support; 1 person shall be nominated by shareholders owning Group B shares and 1 person shall be nominated by shareholders owning Group C shares, in order to substitute the members representing the Treasury.
Term of office for members of the Executive Board shall be three years for those who are elected among the candidates nominated by the corporate shareholders owning Group A and B shares, and two years for those who are elected among the candidates nominated by the shareholders owning Group C shares. Members whose term of office expires may be reelected.
In case of vacancies in executive board membership positions, provisions of the Turkish Code of Commerce shall apply.
In case a legal entity is elected as an executive board member, a real person to be decided by the subject legal entity shall be registered and announced along with the legal entity; it shall be promptly disclosed on the corporate website that such registration and announcement have been made if the website obligation emerges. In the executive board meetings, only that person so registered and announced shall attend and vote and no-‐one else. If the legal entity replaced the real person, it shall notify the corporate executive board of such situation in writing without delay. The replacement real person representative shall be allowed in the executive board meetings only after it is registered and announced. It is required that the executive board members and the real persons to attend the executive board on behalf of the legal entity have full competency.
Legal entity shareholders shall not be represented by the same person in the corporate executive board and the general assembly.
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The executive board shall elect one of the executive board members who have been nominated by owners of group A shares as the chair of the executive board. The executive board shall also elect a vice chair from among its members. The chair of executive board may be elected by the general assembly provided that it is included in the agenda of the general assembly and the chair of executive board is one of the candidates nominated by Group A shareholders. If included in the agenda, the general assembly also may, as it wishes, elect one of the executive board members as the vice chair.
If employment or other legal relation of an executive board member in/with the legal entity shareholder which nominated them for a membership position in the executive board, their membership in the corporate executive board shall also terminate automatically. For vacancies in the executive board membership in this case or in other cases, the executive board shall temporarily appoint a person to be identified by the same shareholder group as the one to which the vacancy belongs and shall put this person to approval in the first general assembly.
Executive Board Meetings and Resolutions Article 12: The corporate executive board shall meet via electronic media or physically, no less than once a
month and at any time as required by the corporate affairs, upon such call of the chair of executive board, and call of the vice chair in the absence of the former. Date of the meeting may be set in advance upon an Executive Board resolution. Meetings may be held in the corporate head office or elsewhere. For opening the executive board meeting, minimum one member from each group representing the management shall attend the meeting so that the meeting will be held with minimum six (6) members. This rule shall also apply in cases when the Executive Board meeting is held through electronic media.If any member from the groups fails to attend three (3) consecutive executive board meetings in a manner to hinder the executive board meeting without any valid reason that is acceptable by majority of the remaining members of the executive board, the absent members shall be deemed dismissed from membership in the executive board.
Executive board members shall not vote to represent one another and shall not attend the meetings by proxy. In case of equal number of votes, the case shall be left to the next meeting. If the tie is not broken then, either, the subject proposal shall be deemed rejected.
For the executive board resolutions to be valid, minimum five (5) members out of the six (6) members attending the meeting shall have voted in favor of such resolution. However, for the following qualified resolutions to be concluded by the executive board, at least one member each from groups A, B and C included in the executive board shall have voted in favor of the resolution.
• Approval of or substantial modification to the Operational Plan and Annual Budget,
• Identification of general credit policies, • Decision on the new investments to be made out of the main field of operation;
• Registration of the transactions regarding sales of the corporate shares, and acceptance of the same;
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• All and any amendments to the articles of association including increases and decreases in the corporate capital;
• Establishment of any rights in-‐kind or personal rights on the corporate shares such as establishment of usufruct, pledge, security interest etc. which fully or partially limits or abolishes the proprietary right or any disposition which enables such outcome either directly or consequentially;
• Election of General Manager of the Corporation, constitution of committees or commissions to be participated by the authorized people it will deem appropriate for conducting the Corporate business, definition of the scope of powers to be delegated to such committees, commissions and the General Manager;
• Definition of the limits of signature powers to be vested in the Corporate authorities, which will be prepared in relation to representation and binding of the Corporation or will be changed at times;
• Possibility of engaging in activities which fall into the field of operation in line with the corporate interests and in the fields which are deemed necessary, other than the activities listed in Articles 3/a-‐ı hereof;
• Recommendation of the Independent Auditor to be elected in the General Assembly;
• Creation of the Credit Approval Committee, arrangement of the working principles and procedures.
Resolutions of the executive boards shall be valid upon signing of the same by the members who attended the resolution. Corporate executive board shall be invited for a meeting through setting of an agenda by the chair of executive board or by the vice chair of executive board with permission of the former and through informing the executive board members at least one day in advance of the meeting within the restrictions imposed by the legislation and by use of the communication techniques adopted by the executive board or via such communication means as fax or electronic mail or SMS or telephone and by getting confirmation.
Minutes of the Executive Board Meetings
Article 13:
Including the executive board meetings held on electronic media, minutes of meetings shall be
recorded in the resolutions book of the executive board and signed by the chair and the attending members and the reasons for dissension by the dissenter shall be written in the minutes. Content of the minutes is required to evidence the Executive Board Members and the absentees and the then nature and positions of the members.
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Substitution of Vacancies Article 14:
In case of vacancy/vacancies due to death, resignation, dismissal from membership as per article 12 herein of one or several Executive Board members or due to any other reason, the executive board shall elect another person who is qualified to represent the same shareholders group and who is proposed by the same shareholders group to substitute the position temporarily and shall submit the same for approval during the first general assembly to come. The member to be elected by this way shall act until the general assembly where it will be put to approval and, if approved, it shall complete the term of office remaining from the previous member. In case of appointments to the vacancies, it shall be deemed sufficient that the executive board meets with 5 people and decides with votes of three members in agreement.
Committees and Commissions
Article 15:
The Executive Board may found committees and commissions to act in affiliation with the board in cases it deems necessary and on topics it requires.
Credit Approval Committee Article 16: The Credit Approval Committee shall work in observance of the working procedures and
principles defined in the regulations approved by the Executive Board. The Credit Approval Committee shall consist of 5 members. These members shall include the General Manager or its deputy to be authorized by the General Manager, one member to represent Group A shares, one member to represent Group B shares, one member to represent Group C shares, and the one remaining member to represent group C or D shares upon such resolution of the Executive Board and advice from the General Manager. The Credit Approval Committee shall meet with absolute majority of the total number of members and the decisions shall be made with absolute majority of the total number of members. Members of the Executive Board shall not take part in the Credit Approval Committee.
The Corporate General Manager or its deputy that the former will assign to substitute itself shall be a natural member of the Credit Approval Committee. Depending on the corporate needs and structure, more than one Credit Approval Committee may be founded in line with the above principles. Except the General Manager or its authorized deputy, no one single person may be included in more than one Credit Approval Committee.
Executive Board Members shall be authorized to request and supervise any information and documentation regarding acts and deeds of the Credit Approval Committee.
The principles of remunerations to be paid to the members of the Credit Approval Committee shall be defined by the Executive Board.
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Executive Board Resolutions Made without a Meeting Article 17:
If no member of the executive board demands a meeting, the executive board resolutions may also be issued by obtaining written consent from minimum five members on the proposal of one of the board members which is written in the form of a resolution concerning a certain issue. Such resolutions to be made without having a meeting shall only be valid if the same proposal has been made to all members of the executive board.
In case of executive board resolutions made without a meeting, approvals of the members shall not necessarily appear on the same paper; however, it shall be deemed a resolution if all the papers bearing the affirmative signatures bear the signature of no less than one member representing each shareholders group making up the Executive Board. They shall be affixed to the resolutions book of the executive board as is. In breach of this rule, the resolution shall not have validity.
Roles and Powers of the Executive Board
Article 18:
The executive board shall be authorized to make resolutions on any kind of acts and deeds that are necessary for realization of the subject matter of the corporate operations, excluding the ones which are left to the mandate of the general assembly as per the Turkish Code of Commerce and these articles of association.
The following are the roles and powers of the executive board and they shall not be transferred to any other body or third party and shall not be relinquished:
a) High level management of the Corporation and giving the related instructions. b) Defining management organization of the corporation. c) Setting up the necessary order for financial planning to the extent that is necessary for
accounting, financial audit and corporate management. d) Appointment and dismissal of directors as well as the persons having the same functions and
the authorized signatories. e) High level scrutiny of the management-‐related persons to particularly check whether they act
in compliance with the laws, articles of association, internal directives and written instructions of the executive board.
f) Keeping the shares book, resolutions book of the executive board and the general assembly meeting and negotiation book; arranging the annual activity report and corporate management statement and submitting the same to the general assembly; preparing the general assemblies; and implementing the general assembly resolutions.
g) Giving notification to the court in case of bad debts. h) Appointing and dismissing the commercial representatives and commercial agencies. The executive board may delegate, either fully or partially, its roles and powers other than the
non-‐transferrable ones listed above.
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Representing and Binding the Corporation: Article 19: The corporation shall be managed, represented and bound by the executive board. The
management, executive and decision powers on the issues falling under the field of operation of the corporation shall completely belong to the executive board except for the roles and powers left exclusively to the general assembly. According to the corporate structure, needs and requirements of corporate actions, the corporate executive board may delegate powers to people among the members of corporate executive board or other people than the executive board members, including the general manager, and also to other committees it will found like an executive committee, mainly the credit approval committee, on the topics it will deem appropriate; for such duration and under such conditions and limitations that are compliant with the legislation provided the limits are clearly stated. Those committees shall work in affiliation with the executive board. The corporate executive board may at any time withdraw, correct or alter such powers it so delegates either in full or in part.
The corporate executive board shall be liable to supervise the acts and deeds committed by the committees or persons, to whom it has delegated powers, on the basis of such delegation.
The corporate executive board and also any member of the corporate executive board shall be authorized to request and control any information and documentation from the persons or committees delegated by the corporate executive board about the acts and deeds involving practice of the said powers.
The corporate general manager shall be elected and appointed by the executive board among one or more candidates who will be proposed by group A, group B and group C shareholders either jointly or individually by each group and will fulfill the requirements sought in bank general managers as per the Banking Law no. 5411. Powers, term of office and working conditions of the corporate general manager shall be designated by the corporate executive board. Thus, term of reference of the general manager shall be adopted by the corporate executive board and shall be indicated in a contract to be signed with the general manager.
In order for the documents to be issued on behalf of the Corporation and to bind the Corporation, they shall be signed by the persons who are authorized by the Executive Board to affix their signatures and to represent the Corporation, by inserting the trade name of the Corporation; the Executive Board Resolution on the representation mandate shall be notarized and shall be matching its counterpart that is given to the Trade Registry organization; and the titles and signatures shall be registered at the Trade Registry in the location of the Corporate head office and announced in the Turkish Trade Registry Gazette. The documents to be issued by the corporation shall obligatorily indicate the corporate head office, the location where it is registered and the trade registry number.
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Remunerations to the Chair and the Members
Article 20:
Remuneration(s) shall be paid to the members of the corporate executive board on monthly basis in the amounts to be set with a general assembly resolution.
PART FOUR
AUDIT OF THE CORPORATION
Selection of the Independent Auditing Body
Article 21:
Financial statements and annual activity reports of the corporation shall be audited by an independent auditing body. The independent auditing body shall be chosen by the general assembly. It is required that the independent auditing body is chosen for each operational period and in any case before the end of the operational period during which it will perform its role.
Furthermore, each shareholders group shall be entitled to have the corporate operations and records audited by virtue of an independent auditing body. Any shareholder making such a demand shall be liable to cover the expenses of the independent auditing body concerned.
The above provisions are related to independent audits ordered upon the corporate's own will; if the Corporation legally becomes liable for an independent audit, provisions of the Turkish Code of Commerce and other related legislation on independent audit shall apply, mainly to ensure that the independent auditing body contracted for such auditing job be registered in the trade registry and be announced in the Turkish Trade Registry Gazette.
Responsibilities of the Independent Auditing Body and the Auditors
Article 22: If the independent auditing body and the independent auditor and private auditors engage in
misconduct while performing their functions, they shall be liable against the Corporation, the shareholders and the corporation’s creditors for the damages they cause. The corporate executive board or any shareholder may claim the damages of the corporation.
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PART FIVE
GENERAL ASSEMBLY
Ordinary and Extraordinary General Assembly
Article 23:
The general assembly shall convene ordinarily and extraordinarily. Ordinary general assembly shall compulsorily be held within three months from the end of every accounting period and at least once a year. Extraordinary general assembly may, on the other hand, be held at any time when required.
Roles and Powers of the General Assembly
Article 24: The general assembly shall make resolutions in cases that are clearly stipulated in the Turkish
Code of Commerce and herein. The following are the roles and powers of the general assembly and they shall not be
transferred to any other body: a) Amendments to the articles of association. b) Election of the members of Executive Board and identifying the terms of office,
remunerations, honorarium, bonus and premium entitlements of the same, deciding on discharge and dismissing of the same.
c) Selection of independent auditors. d) Making decisions in relation to financial statements, annual report of the executive board,
disposition of the annual profit, setting the dividends and profit sharing, use of legal reserves, i.e. including the same in the capital or in the profit to be distributed.
e) Liquidating the corporation. f) Wholesales of substantial amount of corporate assets. Non-‐transferrable roles and Powers which are stipulated in various provisions of the Turkish
Code of Commerce shall remain reserved.
Those Who Can Call For the General Assembly
Article 25:
The General Assembly shall be called ordinarily and extraordinarily by the executive board. The executive board may call for the general assembly even if the related time period has expired.
Apart from that, the shareholders owning at least one tenth of the corporate capital may demand the executive board to call for the general assembly provided they put in writing the justifications and agenda thereof or, if the general assembly will convene in any way, to include in the agenda the issues they would like to be decided. The request for call and insertion of items in the
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agenda shall be done through notary public. If the request for a call made by the minority is accepted by the corporate executive board, the general assembly shall be called for in thirty days at the latest.
If the request for a call or for insertion of items in the agenda made by the minority shareholders is rejected or if their such request is not replied affirmatively in seven workdays, the same shareholders shall be entitled to resort to the commercial court of first instance at the location of the corporate head office and request the general assembly to be called for.
In case of winding up of the corporation, the liquidators may call for the general assembly on the issues related to their duties.
Call and Announcement
Article 26:
The call for general assembly shall be made via announcement on the corporate website if website obligation has emerged and in the Turkish Trade Registry Gazette. Date of the assembly and agenda shall be notified via registered mail to the shareholders who are written in the shares book and the shareholders who have furnished documents evidencing their share certificates or share ownership in advance to the corporation and notified their address.
The call for general assembly shall be made at least two weeks in advance of the date of assembly, exclusive of the days for announcement and assembly. The announcements and letters of call for the General Assembly shall indicate the agenda. Agenda of the general assembly shall be set by the one who calls for the general assembly. The items which are not on the agenda shall not be discussed and decided in the general assembly.
Venue of Assembly
Article 27:
General assemblies shall be held in the Corporate head office or elsewhere in the province of the head office as to be decided by the Executive Board on condition of prior announcement.
Voting Right
Article 28:
Shareholders shall use their voting rights in the general assembly in proportion to the total nominal value of their shares. Voting right originates from payment of the minimum share amount.
Ordinary Assembly and Resolution Quorums
Article 29: The general assembly shall convene with the attendance of shareholders owning minimum sixty
percent of the corporate principal capital or representatives thereof and such ratio shall also be sought for decision-‐making quorum.
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Assembly and Resolution Quorums in case of Amendments to the Articles of Association
Article 30: In order to introduce amendments to the articles of association of the corporation for imposing
liabilities and secondary liabilities with the aim of covering balance sheet losses or for moving the corporate head office abroad, all the shareholders or representatives thereof shall attend the assembly and make such decisions with consensus. If the quorum for assembly and decision making is not reached in the first meeting, the same quorum shall be sought in the following meetings, as well.
In order to introduce amendments to the articles of association of the corporation for completely changing the field of operation of the corporation, creating privileged shares or limiting transfer of registered shares; the shareholders owning minimum seventy-‐five percent of the corporate capital or representatives thereof must cast an affirmative vote. If the quorum for assembly and decision making is not reached in the first meeting, the same quorum shall be sought in the following meetings, as well.
In the general assemblies for capital decrease, it is obligatory that the shareholders owning minimum seventy-‐five percent of the corporate capital or representatives thereof attend the assembly and the decisions are made with two third majority of the attendee votes. If the quorum for assembly and decision making is not reached in the first meeting, the same quorum shall be sought in the following meetings, as well.
As for the decisions amending the articles of association except for the foregoing, the general assembly shall convene with the attendance of shareholders owning minimum sixty percent of the corporate principal capital or representatives thereof and such ratio shall also be sought for decision-‐making quorum.
Representation by Proxy
Article 31:
Shareholder may appoint another person, regardless of whether it is a shareholder or not, as its representative to the general assemblies which it will not be able to attend.
List of Attendees
Article 32:
The list of attendees shall be drawn up by the executive board. While drawing up the list of attendees, the executive board shall take as basis the shares book records for the owners of uncertified or registered shares and the owners of certificates. Once drawn up, the list of attendees shall be signed by the chair of executive board and shall be made available at the venue of the general assembly prior to the meeting.
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Chairperson of the General Assembly
Article 33:
The General Assemblies shall be chaired by a person to elected by the general assembly or, if such person has not been elected, by the Chair of Executive Board. The role of the chair shall be to ensure that the discussion proceed in an organized manner and the minutes are kept in accordance with the provisions of law and provisions hereof.
The general assembly or the person who is elected as the chair shall create the chairmanship office by designating a minutes secretary and, if deems necessary, a ballot collection officer. If requires, the General Assembly may also elect a vice chair.
Chair of the General Assembly, minutes secretary and ballot collection officers may be appointed and assigned both from among the shareholders and representatives thereof and externally.
Minutes of the General Assembly
Article 34: In order for the resolutions made during the General Assembly to be valid, minutes shall be kept
stating the content and outcomes of the resolutions as well as the reasons for dissention of the dissenters. The minutes of the general assembly shall obligatorily indicate names of the shareholders or representatives thereof and the number, group and nominal value of the shares held by the same; the questions raised and the answers given in the general assembly; the resolutions made; the number of affirmative and dissenting votes cast for each resolution.
Following the general assembly, the minutes shall promptly be posted on the corporate website if the website obligation emerges. Further, the Executive Board shall immediately submit to the trade registry directorate one copy of the notarized minutes and shall have the particulars which are included in the minutes and require registration and announcement registered and announced.
PART SIX ACCOUNTING PERIOD, DISTRIBUTION OF PROFIT, LEGAL RESERVES
Accounting Period Article 35: Accounting year of the corporation shall commence on the first day of January and end on the
last day of December.
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Distribution of Profit and Legal Reserves
Article 36: As regards the distribution of profit, the corporation shall act according to the administrative
and financial legislation provisions of the Corporate Tax Law in order to be included in the scope of exemption from corporate tax.
As to the legal obligations, provisions of the Turkish Code of Commerce and other administrative and financial legislation shall apply.
PART SEVEN WINDING UP AND DISSOLUTION OF THE CORPORATION
Call for Dissolution
Article 37: The Executive Board may call for the General Assembly in order to discuss winding up of the
Corporation for any reason whatsoever. For the general assembly to conclude on winding up of the corporation, affirmative votes of the shareholders owning minimum seventy-‐five percent of the corporate capital or representatives thereof shall be sought. If the quorum for assembly and decision making is not reached in the first meeting, the same quorum shall be sought in the following meetings, as well.
In case of dissolution, the remaining assets of the corporation after clearing the corporate debts and returning the share amounts shall be distributed among the shareholders on pro rata basis in proportion to the capitals they paid up and the privilege rights of the same. Unless otherwise stipulated in the general assembly resolution, distribution shall be made with money.
Liquidators
Article 38:
Liquidators may be appointed with a general assembly resolution. Those to be appointed as a liquidator may be among the shareholders or third parties. If no liquidator is appointed with a general assembly resolution, liquidation may be executed by the executive board.
At least one of the liquidators with representative power shall be Turkish citizen and its place of residence shall be in Turkey.
The general assembly may at any time discharge and replace the liquidators, who have been appointed with a general assembly resolution, and the executive board members who fail to fulfill such task.
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PART EIGHT
MISCELLANEOUS AND FINAL PROVISIONS
Corporate Announcements
Article 39:
Announcements of the corporation shall be advertised in the Turkish Trade Registry Gazette; in case of legal obligation, they shall also be posted on the website. The duration for posting the announcement on the website shall be agreed by the executive board in accordance with the relevant legal regulations. If it deems necessary or if it is required in the legislation, the executive board shall advertise the corporate announcements to the concerned by other means, as well.
Referral of Disputes for Settlement
Article 40:
During both operation and dissolution of the corporation, the disputes which may arise between the Corporation and the shareholders in relation to the corporate affairs shall be referred to the courts at the location of the corporate head office for settlement according to the legal provisions.
Likewise, the courts at the same location as that of the corporate head office shall have jurisdiction on the settlement of disputes which arise among the shareholders in relation to the corporate affairs and which will impact the corporate law.
In case of such dispute, the shareholder who files a court case shall notify a legal domicile in the same place as the corporate head office for service of all and any legal notifications.
Website
Article 41:
Address of the corporate website is www.kgf.com.tr. In case creation of a website becomes a legal obligation, the Corporation shall create its website in accordance with the Turkish Code of Commerce and shall post on the website the particulars cited in the Law. The particulars required in the Turkish Code of Commerce and these articles of association shall be published on the website.
If an obligation emerges for the Corporation to have a website, the content published on the website shall be preceded with date and the words (Forwarded Message). The obligatory content put on the website shall be kept on the website throughout the time period required by the Turkish Code of Commerce.
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Legal Provisions
Article 42:
Provisions of the Turkish Code of Commerce shall apply on the issues which are not stipulated herein.
Provisional Article 1: Approval of the RoT Prime Ministry Undersecretariat for Treasury shall be obtained for
amendments to the provisions governed by these articles of association of the corporation regarding the supports provided by the RoT Prime Ministry Undersecretariat for Treasury until the support fund provided by the RoT Prime Ministry Undersecretariat for Treasury to the corporation is completely liquidated and the related accounts are settled.
Provisional Article 2: The persons who are elected to the membership of the corporate executive board by the RoT
Prime Ministry Undersecretariat for Treasury through approval of their expertise and pursuant to the above provisions shall have the power to veto enforcement being limited to the corporate transactions that concern surety of the Treasury .
Provisional Article 3: In case of funding support provided by the RoT Prime Ministry Undersecretariat for Treasury to the corporation in any form whatsoever, sufficient number of credit approval committees shall be created individually as stipulated in article 16 hereof for the transactions being subject to surety of the Treasury and group D shares shall be represented by the member who is appointed from among the candidates proposed by the Undersecretariat for Treasury. Representative of the Undersecretariat shall be entitled to veto the decisions regarding transactions under surety of the Treasury. Duty of the Undersecretariat’s representative in the credit approval committee shall terminate with the deadline for application which is necessary for benefiting from the Treasury support.
Provisional Article 4: As per article 19 hereof, in case of constitution of committees such as an executive committee,
the Undersecretariat’s representative shall take part in such committees in the scope of the surety transactions that are provided with Treasury support and shall have veto power.
Provisional Article 5:
In the general assemblies to be held for the purpose of aligning the articles of association of the corporation with the Turkish Code of Commerce no. 6102; no meeting quorum shall be sought, the resolutions shall be made with the majority of attendees, and provisions of the Turkish Codes of Commerce no. 6102 and 6762 regarding the general assembly of privileged shareholders shall not be sought even if the conditions are satisfied.