Subscription Rights

التاريخ
Ref. : 8/11/7283
Date: 25/04/2006

Memo No.
(11/2006)

Members of the Securities Depository Center

Subject: Subscription Rights

In reference to the Instructions of Dealing with Subscription Rights issued by the Jordan Securities Commission (JSC) pursuant to the Securities Law No (76) of 2002 which became effective as of April 1, 2006. Following are some of the provisions related to the registration, trading, transfer and ownership transfer of subscription rights and the exercise of such rights.
 
First stage: Registration of Capital-Increase Shares
Upon the issuance of the decision of the JSC Board of Commissioners in approval of the capital-increase shares designated for the shareholders, the issuing company makes an announcement in the daily newspapers to inform shareholders of the registration of the capital-increase shares and the rights. This announcement should contain a sufficient summary of the prospectus and especially the following:
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The amount and percentage of increase of capital.
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The price of the issue of the shares increase.
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The date of the issue of the subscription rights.
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The commencement and end of the trading period for the subscription rights.
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The commencement and end period specified for the subscription in the share increase by the holders of the subscription rights.
   
Second stage: Subscription Rights and Registration
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The subscription rights shall be for the company shareholders as of the fifteenth day from the date of the approval of the JSC Board of Commissioners of the capital- increase shares.
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The subscription rights shall be de jure registered at the SDC in the name of their owners as of the fifteenth day of the approval of the JSC Board of Commissioners of the registration of the capital-increase shares.
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The SDC prepares a separate register containing the names of the holders of the subscription rights and the number of rights owned by each shareholder as of the fifteenth day of the JSC Board of Commissioners’ approval. The fractions of the subscription rights will be registered in a special account in the name of the issuing company.
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The subscription rights will be registered in the accounts of its owners maintained by the SDC members if the shares that the rights originated from are registered in the clients’ accounts maintained by the SDC members. If the shares are maintained in the central registry, the rights will registered in the central registry.
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The register of the holders of subscription rights will be subject to the transfers and ownership transfers conducted directly through the SDC during the period designated for the trading of such rights.
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The number of rights shall be equal to the capital-increase shares to be issued to the shareholders.
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The rights may not be pledged and cannot be bought through margin financing.
   
Third stage: Trading Subscription Rights
The trading period for subscription rights commences the first working day as of the fifteenth day from the JSC Board of Commissioners’ approval of the registration of the capital-increase. In this stage the following occurs:
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The listing of the subscription rights in the special market assigned for such rights at the ASE.
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The trading of subscription rights for five working days from the beginning of this period.
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The opening prices of the subscription rights shall be determined in accordance with the method adopted by the ASE.
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The trading session for subscription rights shall be the same as the trading session for listed shares.
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The trading in rights shall be separate from trading in shares.
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The SDC conducts clearing and settlement for trading contracts of subscription rights in accordance with the applied measures that apply to traded shares.
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The subscription rights should be deposited at the SDC and registered in the client account maintained by the broker before they can be sold and if these rights are not deposited, the client should deposit his shares that the rights have ensued therefrom and then transfer the subscription rights from the central registry to the client account maintained by the broker according to the current measures in order to sell the rights.
   
Fourth Stage: Closing the Register of the Subscription Rights’ Holders:
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The SDC closes the register of the subscription rights’ holders after conducting clearing and settlement and ownership transfers for all executed trading contracts and settling the suspended contracts according to the current measures.
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The register of the subscription rights’ holders referred to above shall be the official register which enables the holders of the rights to subscribe to the capital- increase shares according to the number of rights registered in their name.
   
Fifth Stage:  Subscription in the Share Increase:
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The right to exercise the subscription right in the capital- increase shares of the company shall be to the subscription rights’ holders as of the date of the closure of the register.
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The period for exercising the subscription shall commence on the fourth working day after the end of trading and shall continue during the period specified in the prospectus.
 
Sixth Stage:  Completion of Issuance Procedures
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The subscription will be authenticated and registered by the company directly at the SDC through the Issuers System.
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The company must complete the registration procedures of the capital-increase shares at the SDC within ten working days at the most from the date of the closure of the subscription.
 
Seventh Stage:   Listing Capital- Increase Shares
The listing of the capital-increase shares at the Amman Stock Exchange shall be in accordance with the instructions issued by the ASE. The company should apply to list the share increase within five working days from the end of the issuance procedures.
 
Eight Stage:   Selling Shares of Holders who did not Exercise their Rights
The issuing company will sell all the unsubscribed shares registered in the special account through the ASE within two months from listing the share increase.

Finally, we would like to emphasize what is stated in Article (5) of the Instructions of Dealing with Subscription Rights which states that subscription rights are considered securities that can be traded in the market within the period specified above. The SDC accordingly places lien restrictions as a result of lien decisions issued by the judicial authorities to those rights on the date of receiving the lien decision, unless the ownership of those rights has been transferred prior to that date in accordance with Chapter Seven of the Instructions of Registration, Deposit and Settlement of Securities.
Thank you for your cooperation for the benefit of the Jordan capital market.

Samir Jaradat

Chief Executive Officer
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