Rules of Procedure for the Board of Directors of HS Orka Holding hf., HSO 1 ehf, HSO 2 ehf, and HS Orka hf. (in each case the "Company")
These Rules are established on the basis of Article 17 of the Articles of Association of HS Orka Holding hf. (the "Articles"), Article 70, paragraph 5, of the Act on public limited companies no. 2/1995, the Shareholders' Agreement dated 19 February 2020 relating to HS Orka Holding hf between Jarðvarmi slhf. and Magma Energy Sweden A.B. (the "Shareholders' Agreement") and the 6th edition of the Corporate Governance Guidelines from the Iceland Chamber of Commerce, Nasdaq Iceland and SA – Business Iceland.
In the event of any conflict between these Rules of Procedure and the Shareholders´ Agreement, the Shareholders´ Agreement shall prevail. The Shareholders shall consent to the adoption of these Rules of Procedure in accordance with Clause 4.7. m.
In the event of any conflict between these Rules of Procedure and the Company´s Articles of Association, the Articles of Association shall prevail.
Capitalised terms used and not otherwise defined herein shall have the meanings specified in the Shareholders' Agreement.
These rules and procedures are intended to summarise the provisions agreed in the Shareholders' Agreement and Articles as well as the position under Icelandic law and are not intended to create additional legally binding obligations on the shareholders or the Companies.
1. Appointment and allocation of responsibilities
1.1. A Board of Directors (BOD) consisting of up to four members and up to four alternate members,
shall be elected at the Annual General Meeting (AGM) for a one-year term in accordance with
the Shareholders' Agreement, such members of the Board may also be removed and replaced in accordance with the Shareholders' Agreement.
1.2. The newly elected BOD shall meet as soon as possible and in any event no later than two weeks from the election following an AGM to decide on the division of responsibilities; electing a Chairman and a Vice-Chairman. The Chairman´s role shall annually move between the Directors of each shareholder. The Vice-Chairman shall be a Director appointed by the other shareholder. The Legal Counsel of the Company shall serve as secretary to the Board.
1.3. Together the Chairman, the Vice-Chairman and CEO form a “Troika”. The Troika is an informal forum to discuss company matters, for preparation for Board Meetings, incl. the agenda, if there are urgent projects that need extra attention and for the Board to put forth special inquiries, which cannot await the next Board Meeting. No formal decisions of Board nature are taken in these meetings. After each Troika meeting the Chairman shall send information to the Board regarding matters discussed. Troika meetings shall be held as required. Any member of the Troika can call a Troika meeting.
1.4. Subject to receiving Qualifying Shareholder Consent in accordance with Section 7 of the Shareholders' Agreement, the Board may at the first meeting also elect sub-committees, according to clause 11, that operate on behalf of the Board. The existence of sub-committees does not release the Board of Directors of their responsibility for Company matters. Sub-Committees make reports and recommendations to the BOD, which has the deciding power in all matters, unless a special mandate has been given to the relevant Sub-Committee.
1.5. If re-elected, the former Chairman of the Board shall direct the first meeting. Otherwise the Board Member who hassat on the Board the longest. If one or more Board Members have equal seniority in Board Membership the most senior member shall preside over the first meeting.
1.6. Each Director shall provide the following personal information when nominated to the Board. This information shall also be included in the Company’s corporate governance statement for each Board Member, to ensure that shareholders and other Board Members are informed of main points relating to her/him.
• Name, education, chief occupation and professional experience.
• Date of appointment.
• Other commissions of trust, e.g. membership on boards of other companies.
• Sharesin the Company, whether direct ownership or through associated parties.
• Share-option agreements with the Company.
• Connections with principal clients and competitors of the Company and major shareholders
in the Company.
2. New Board Members
2.1. New Board Members shall be introduced to the Company affairs, including its policies, goals, risks and operations as well as the Board’s work and procedures. New Board Members shall receive relevant introduction of the Company for them to be able to perform their duties as Board Members. See appendix I.
2.2. New Board Members shall either (a) by notice in writing or (b) at the first Board Meeting which she/he attends, confirm that he or she has received a copy of Section 7 of the Shareholders´ Agreement, regarding management of the Company, and shall acknowledge the obligation to exercise his or her powers as a Director in accordance with the provisions of such Section 7.
3. Board Meetings, Material and Communication
3.1. Board Meetings are the main venue for discussions among the Board and the CEO and if applicable the management, for decision-making and for updates on the Company´s projects.
3.2. The Board shall meet as often as deemed necessary, but at least once in each quarter of every calendar year.
3.3. The CEO shall after the AGM propose a meeting schedule for the new BOD, containing dates and main matters on each meeting´s agenda. The meeting schedule, incl. the agenda, is the foundation for the Board´s and Management´s work and shall portray the most important tasks for the coming year. The schedule may be revised during the year, as needed, but shall remain focused on the Company´s most important tasks. Any Board Director, the CEO and CFO have the ability to have points added to a meeting's agenda. Requests to have matters added to the meeting agenda shall be sent to the CEO and /or Board on seven days' notice of the relevant meeting or can be brought up under other matters at a board meeting. Board Members shall not individually, and outside of Board Meetings, request from the CEO or management to take on any tasks.
3.4. Notwithstanding clause 3.2., Board Meetings can be called on seven days’ notice, unless such notice requirement is unanimously waived by the Directors. If an extra meeting is requested by a Director orthe CEO itshall be also called on seven days’ notice, unlesssuch notice requirement is unanimously waived by the Directors.
3.5. The Chairman, or the CEO acting on the Chairman's behalf or any Director may request a meeting of the Board. To the extent that any matter also requires the approval of the Board of any parent undertaking, to the extent practicable, the Company's Board meeting shall be held consecutively to the meeting of the Board of the parent undertaking. Electric Board Meeting invitations shall be sent out after the AGM, in accordance with the meeting schedule. The invitations shall contain the meeting agenda. In the absence of the Chairman or if he does not comply with his duty to call Board Meetings, the Vice-Chairman shall take his role, or the CEO acting on her/his behalf. In his absence or non-compliance, the requesting party.
3.6. The agenda and meeting documents shall be provided seven days prior to the relevant Board meeting. Decisions to be made shall be especially highlighted in the agenda. Save where unanimously approved by all Directors present at a quorate meeting, no business shall be transacted at any meeting of the Board unless such matter is included in the agenda included with the notice of the meeting and accompanied by relevant documents to be considered. Should new information or documentation that is material to a decision, scheduled to be taken at a meeting, be handed over at that meeting a Director can request a one week’s postponement of such a decision. The CEO shall prepare Board Meetings in accordance with the Board´s meeting schedule and agenda.
3.7. The Board´s inquiries, suggestions, resolutions and approval of any matter shall be
communicated directly to the CEO, as he is in charge of the Company´s daily operations and
manages the Managing Directors' work. The relevant Managing Director may be CC´d in the
communication if the matter involves questions regarding Board Material. All Board Members
shall be CC´d in such communication. This clause shall not undermine the Board's right to
directly contact Managing Directors, if needed as a part of the Board´s surveillance obligation.
3.8. Board Meetings shall be held in the Company's head office) or such other place as the majority of Directors may agree. Meetings may however be held by the means of teleconference equipment or electronic media.
4. Legitimacy of resolution and attendance
4.1. A quorum is present if majority of the Directors are in attendance, including at least one representative from each shareholder who is entitled to appoint a director. The quorum may consist also of alternate Board Members.
4.2. If a Director is unable to attend a meeting, she/he shall inform the Chairman and CEO with due notice. A Shareholder Nominated Director appointed by a particular Shareholder shall only be replaced by an alternate Director nominated by the same Shareholder at any meetings of the Directors.
4.3. Should a quorum not be obtained, the meeting shall be postponed, and a new meeting shall be
held three Business Days later. The quorum for that meeting shall be comprised by any two
Directors of the Company.
4.4. Notwithstanding clauses 3.1. and 3.2. and 4.2. the Board can also take decisions between
meetings via email, if the matter has been sufficiently discussed and all members of the Board are party to such email and any matter is approved by a majority of the Directors. Such decisions shall be noted in the minutes at the next Board Meeting. Same applies if a quorum is not obtained at a meeting, i.e. an absent Board Member may email her/his vote, if she/he is sufficiently informed regarding the subject.
4.5. The Chairman of the Board shall direct meetings. In the event the Chairman becomes
incapacitated, the Vice-Chairman, or in her/his absence the Board Member who has served on
the Board the longest shall direct the meeting.
4.6. The signatures of the majority of the Board shall bind the Company. All decisions to be made by the Board, except decisions according to clause 4.7, shall be made by a simple majority vote of the Directors. In the case of a tie, the Board Member who submitted the proposal shall withdraw the proposal. Never shall such proposal be determined by lot pursuant to sentence 2 of paragraph 1 of Article 70 of Act no. 2/1995 on Public Limited Companies. For the avoidance of doubt, neither the Chairman of the Board nor any other Director shall be entitled to second or casting vote in the event of a tie vote by the Directors.
4.7. The Board shall not and shall procure that the other members of the Group do not, unless either (a) a unanimous vote by all Qualifying Shareholders or (b) a Qualifying Shareholder Consent from each Qualifying Shareholder, in respect of such matter, has first been obtained in respect of the matters set out in section 7.8 of the Shareholders' Agreement, being at the date of this document the following matters:
(a) increase or decrease the authorized capital of any member of the Group or sub-divide,
consolidate or otherwise change the share capital of any member of the Group;
(b) allot, issue, purchase, redeem or acquire any shares or other securities(or instruments
convertible into shares or other securities) in any member of the Group (save to the
extent that such transaction is solely with another wholly owned member of the
Group);
(c) save for in accordance with Section 8 of the Shareholders´ Agreement, Transfer any
shares in the capital of the Group other than to another member of the Group or as
security over shares in any member of the Group (other than the HS Orka Holding hf)
for any bank indebtedness;
(d) change the nature of the Group’s business in any material respect or undertake or
proceed with any transaction outside the ordinary course of the business;
(e) amalgamate, consolidate or merge or enter into an agreement to amalgamate,
consolidate or merge any member of the Group with any person;
(f) institute proceedings for the winding up, reorganization, liquidation or dissolution of
any member of the Group;
(g) incorporate, purchase, acquire, fund, sell, or dispose of any subsidiary undertaking,
whether wholly or partially owned by the Group in the aggregate value in excess of
USD 5,000,000;
(h) enterinto any material joint venture, partnership orstrategic alliance with any person;
(i) appoint or remove the auditorsfor any member of the Group;
(j) in the case of HS Orka Holding hf only, pay any dividends or make other forms of
distribution, outside the Dividend Policy set out in appendix II;
(k) dispose of any assets or any portion thereof in the aggregate value in excess of USD 5,000,000;
(l) hire or dismiss the CEO of HS Orka (or any other Holdco);
(m) approve or amend the Group’s corporate governance policy and/or rules of procedure;
(n) change or amend the material terms of the Group’s energy resource lease agreements
or reduce the length/term of leases;
(o) change or amend any member of the Group’s articles of associations or other
constituting documents, unless specifically required by law;
(p) appoint any members of any committee of the Board;
(q) borrow any money (including, without limitation, shareholder loans) or grant any
security over the assets of the Group outside the ordinary course of business of the
Group;
(r) make any expenditure by or on behalf of any member of the Group to develop or
operate its assets if resulting in 10% variation outside the scope of the budget in force
at the time;
(s) approve or amend the Group’s annual budget (provided that if an annual budget is
not approved, the Group shall operate under the most recently approved annual
budget until the annual budget for the relevant year is so approved); and/or
(t) change or amend the Group’s policy regarding any member of the Group entering into
forward sales, future contracts or hedging transactions or trading puts, calls, or
options or any similar price protection or marketing mechanism other than interest
rate hedging agreements that are required under approved financing.
The Board shall not and shall procure that the other members of the Group do not,unless either (a) a unanimous vote by all Qualifying Shareholders, excluding any Qualifying Shareholders that
are Conflicted Shareholders (as defined below) or (b) a Qualifying Shareholder Consent from
each Qualifying Shareholder, excluding any Qualifying Shareholders that are Conflicted
Shareholders (as defined below), in respect of such matter, has first been obtained:
(a) loan any money to, provide a guarantee of, or assume liability for the debts or
obligations of any, person, third party or repay any shareholder loans;
(b) enter into or terminate, amend or waive any provision of any transaction not being on
an arms-length basis with any Shareholder or any Affiliate of any Shareholder;
(c) enter into or terminate, amend or waive any provision of any material price tariff
agreement or any material power purchase agreement; and
(d) commence orsettle any litigation where the amount involved exceeds USD 5,000,000.
For these purposes a “conflicted shareholder” shall mean a Shareholder to whom the specified matter directly relates or who owns (or whose Affiliates, which shall explicitly not include Jarðvarmi’s shareholders, own) directly or indirectly, equity interests of more than 30% in a Third Party to whom the specified matter directly relates, provided that:
(i) the interests of the Conflicted Shareholder in the matter being considered is, or may reasonably be considered to be, contrary to the best interests of any member of the Group; and
(ii) the financial interests of the Group in the matter isin excess of USD 5,000,000.
A Qualifying Shareholder is any shareholder holding 21% or more of HS Orka Holding hf.'s share. Such consent may be given in writing by the Qualifying Shareholder. A director appointed by a Qualifying Shareholder, may where give such consent on behalf of the Qualifying Shareholder where it is clear that such consent is being given on behalf of the Qualifying Shareholder (rather than by such director in his capacity as a director). In such circumstances the Qualifying Consent may be given in writing by the relevant director or at a meeting of the directors, provided that it is clearly minuted that such consent has been given by the director on behalf of the Qualifying Shareholder for the purposes of the Shareholders' Agreement.
4.8. Any material matter requiring the approval of the board of any of the Company´s subsidiary undertakingsshall first be approved in principle by the Board of the Company.
4.9. Other attendance:
(a) Alternate Board Members have the right to attend all Board Meetings and shall have
the right to speak and submit questions and proposals, but do not have voting rights
unless formally called to the meeting, in accordance with clause 4.2.
(b) The CEO shall have the right to attend all Board Meetings, unless otherwise decided
by the Board of Directors, and shall have the right to speak and submit proposals.
(c) The BOD and/or the CEO can call on any senior officers of the company to participate
in any specific items on the agenda and the Minutes shall reflect their attendance and
participation.
(d) The Auditors shall be invited to attend Board Meetings at which the review of annual
accounts is on the agenda.
5. Disqualification
5.1. Board Members shall not participate in dealing with items connected to themselves, their own business or business with companies in which they own a qualifying holding, where they are Board Members, hold positions of responsibility or in other respects have substantial interests at stake. This includes business competitors. The same shall apply to participation by Board Members in dealing with items concerning parties personally or financially connected to them.
5.2. Each Board Member shall after having read the agenda for the coming Board Meeting evaluate whether she/he needs to be disqualified from a certain topic. If a Board Member concludes that is the case, she/he shall inform the Chairman and the CEO immediately and not access the documentation concerning the topic. Furthermore, the member shall inform the Board at the beginning of the meeting and withdraw from the meeting while the discussion and a decision on the matter takes place. The Board Members disqualification and absence shall be noted in the minutes of the meeting.
5.3. Board Members may also propose that a Board Member is disqualified from a topic. The Board, besides the potentially disqualified Board Member, shall then vote on the matter, provided that there is a quorum.
5.4. Board Members and the CEO shall not take part in any process of negotiation between the
Company and themselves, negotiations between the Company and any third party or
preparation of lawsuits against themselves or any third party, in which they have a substantial interest which may be contrary to the Company's interests, unless a mutual decision is reached between the respective parties to do so. Board Members and the CEO are under an obligation
to report such incidents.
5.5. Any agreements which a Board Member or the CEO may enter into with the Company, and any agreements between the Company and a third party, must be submitted to the Board for
approval (or rejection) if the Board Member or the CEO have a substantial interest in such
agreements.
6. Meeting Minutes
6.1. The Chairman shall be responsible for the keeping of Minutes of all Board Meetings. The
Chairman may, however, assign the keeping of the Minutes to the secretary to the BOD.
6.2. The following shall be recorded in the Minutes:
a) Name and ID number of the Company.
b) Meeting place, date and time.
c) Number of the Board Meeting.
d) Name of the Chair and Secretary of the meeting.
e) Attendance at the meeting
f) If and when people attend, e.g. the Company's auditor, and when they exit the meeting.
g) Whether and why a Board Member, the CEO or another person leaves the meeting during a
discussion or decision-making of an agenda item and whether the relevant party had access
to documentation related to the discussion or decision-making. A special note shall be made
in the Minutes of cases where a Board Member has withdrawn from the meeting as a result
of disqualification to address a particular matter.
h) The Agenda of the meeting.
i) Documentsmade availableto BoardMembers before the meetingor handedout or presented
at the meeting. A copy shall be kept with the minutes.
j) Conclusion of each agenda item of the meeting, e.g. decisions made, items postponed,
inquiries made during the meeting and requested tasks.
k) Tasks which are assigned by the BOD at the meeting
6.3. If a Board Member or the CEO opposes to a decision made at the meeting, she / he may have her/his opinion noted in the minutes.
6.4. If the Minutes have not been completed at the end of a Board Meeting, they shall be sent to Board Members as soon as possible for their approval and signing prior to the next Board
Meeting.
6.5. The Minutes shall be confirmed by written or electronic signature by all Board Members present at the Board Meeting, and the CEO (if present at the Board Meeting). Board Members who were not present at a Board Meeting shall attest by their signature that they have acquainted
themselves with the Minutes of that Board Meeting.
6.6. Minutes entered in the Company’s Book of Minutes shall be regarded as full proof of what has transpired at Board Meetings.
7. The Board’s role and duties
7.1. The Board is the supreme authority in the affairs of the Company within the limits established by law, the Articles and the Shareholders' Agreement.
7.2. The Company’s signature is written by the majority of the Board (three signatures). Only the Board may grant powers of procuration.
7.3. The Board shall conclude a contract of employment with the CEO and supervise his/her work, as further outlined in Clause 9 of these Rules. The Chairman shall handle such contracts in
accordance with a detailed mandate from the Board, having received a recommendation from the Remuneration Committee on the subject. Similarly, the Board terminates the employment of a CEO. Such decisions must be taken in accordance with clause 4.7.
7.4. The Board is responsible for the long-term strategy and may prepare an annual business plan for the Company for approval by the Shareholders in accordance with Section 7 of the Shareholders' Agreement. The Board shall set specific goals and measurements in order to implement and execute the Company´s strategy.
7.5. The Board shall supervise all aspects of the Company’s operations and ensure that the
Company’s organization and activities are always in good and proper order. The Board shall ensure adequate supervision of accounting and disposal of the Company's financial assets and
shall, at least once a year, confirm the Company's operating plan and budget.
7.6. Board Members shall familiarize themselves with all relevant information needed to have full understanding of the Company’s operations and be able to take informed decisions. See
appendix I.
7.7. The Board shall define, at least once a year, the risk factors that the Company has to address, including their nature and extent. It shall also define remedial action to the risks in question.
Furthermore, the Board shall regularly verify the effectiveness of internal control and risk
management. It shall be ensured that employees can report failure to prevent risk and incidents in the operations without any kind of detrimental effects to their employment.
7.8. The Board shall set a policy for corporate social responsibility for the Company and a written code of ethics, incl. a policy for human rights and anti-corruption, for the Company’s Board
Members, its managers and employees.
7.9. The Board is responsible for publishing annually a statement on the Company’s corporate governance for the preceding year in a separate chapter in its annual accounts.
7.10. The responsibility, authority and tasks of the Board shall, in all respects other than provided in these Rules, be governed by the Act on Public Limited Companies no. 2/1995, the Act on Annual Accounts no. 3/2006, other applicable legislation, the Shareholders´ Agreement and the Company’s Articles of Association.
8. The Chairman’s role and duties
8.1. The Chairman is responsible for the Board performing its duties in an orderly and efficient manner and in conformity with legislation, regulations and good corporate governance and that the Board is provided with the best possible working conditions.
8.2. The Chairman shall keep all Board Members informed of issues concerning the Company and encourage the activity of the Board in all decision-making.
8.3. The Chairman shall ensure that the Board generally receives exact and clear information to be able to perform its duties.
8.4. The Chairman shall ensure that new Directors receive necessary information and guidance in the procedures of the Board and the Company’s affairs, including the Company’s policies, its objectives, risk parameters and operations. See appendix I.
8.5. The Chairman shall ensure that the Board regularly updates its knowledge of the Company and its operations, in addition to ensuring that the Board generally receives, in the course of its work, detailed and explicit information and data in order to be able to perform its work.
8.6. The Chairman shall ensure that Directors get proper guidance regarding the main issues
involving corporate governance, e.g. regarding their statutory duties and responsibilities, or ensure that Directors attend courses of that type.
8.7. The Chairman shall take the initiative in the annual preparation and revision of the Board’s rules of procedure.
8.8. The Chairman shall supervise the meetings´ convening and chairing. The Chairman of the Board shall ensure that Board Meetings allow ample time for discussions and decision-making, in particular for larger and more complicated issues.
8.9. The Chairman shall follow progress in the execution of Board decisions within the Company and confirm their implementation to the Board.
8.10. The Chairman shall ensure that the Board makes an annual assessment of their work and that of the sub-committees.
8.11. The Chairman shall not take on any work or projects for the Company other than those considered a natural part of his/her duties as chairman of the Board, with the exception of specific projects that the Board has entrusted to him/her.
9. The CEO’srole and duties
9.1. In the event of any discrepancy between these Rules of Procedures and the CEO's employment agreement with the Company, the employment agreement shall prevail.
9.2. The CEO is responsible for daily operations and is obliged to follow the Board’s policy and instructions in that regard. The daily operations do not include measures which are unusual or extraordinary or any matter requiring Shareholder Consent under the Shareholders' Agreement. The CEO may only take such measures if specifically authorized by the Board. The CEO´s mandate is further described in the Delegated Authorities Matrix, see appendix III.
9.3. The CEO shall ensure that the accounts of the Company conform to the law and accepted practices and that the treatment of the Company’ property is secure. The CEO shall provide any information that may be requested by the Company’s Auditors.
9.4. The CEO shall ensure that the Board regularly receives precise information related to finance, structure and operations of the Company for the Board to be able to perform its duties.
9.5. The Board may require the CEO to provide Board Members with additional documents andinformation related to specific tasks of the Board. The form and quality of the information shall be decided by the Board each time.
9.6. The CEO shall inform the Board on his/her business activities which are not related to the Company.
9.7. The CEO shall provide the following personal information, to be included in the Company’s corporate governance statement, to ensure that shareholders are informed of main points relating to him/her:
• Name, education, chief occupation and professional experience.
• Date of appointment.
• Other commissions of trust, e.g. membership on boards of other companies.
• Sharesin the Company, whether direct ownership or through associated parties.
• Share-option agreements with the Company.
• Connections with principal clients and competitors of the Company and major shareholders in the Company.
9.8. The CEO‘s roles and duties as described herein are not exhaustive, as other specific tasks and duties the CEO has may further be outlined in other Clauses of these Rules, his/her employment contract and applicable law and rules.
9.9. The CEO reports to the Board only and not directly to the Shareholders of the Company.
10. Performance assessment
10.1. The Board shall annually review and evaluate the development of the Company and whether it is consistent with its goals.
10.2. The Board shall conduct an annual assessment of its work, size, composition and procedures. The Board shall seek ways to improve its workings in accordance with the findings of these assessments.
10.3. The Board shall annually evaluate the work of the Company’s CEO and the Company’s operations in general. The Chairman of the Board shall present the results of the assessment to the CEO and discuss with him/her how to address weaknesses and/or further improve strengths.
11. Committees appointed by the BOD and duties.
The Audit Committee
a) The Audit Committee shall operate independently on behalf of the BOD.
b) Subject to Qualifying Shareholder Consent from each Qualifying Shareholder being obtained in accordance with Section 7 of the Shareholders' Agreement, the BOD shall elect the members of the Audit Committee each year, no later than one month after the Annual
General Meeting. The Committee members shall have qualifications and experience in
accordance with the activities of the Committee, and at least one member shall have detailed expertise in the field of accounting or auditing.
c) The Audit Committee´s contact within the Company is the CFO. All Committee Members shall be CC´d in the inquiries and in the replies.
d) The Audit Committee shall operate in accordance with its Rules of Procedure approved by the BOD. The Board shall have access to the Committee´s Meeting Minutes.
The Remuneration Committee
e) The Remuneration Committee shall operate independently on behalf of the BOD.
f) Subject to Qualifying Shareholder Consent from each Qualifying Shareholder being obtained in accordance with Section 7 of the Shareholders' Agreement, the BOD shall elect the members of the Remuneration Committee each year, no later than one month after the
Annual General Meeting.
g) The Remuneration Committee´s contact within the Company is the CEO. All Committee
Members shall be CC´d in the inquiries and in the replies.
h) The Remuneration Committee shall operate in accordance with its Rules of Procedure
approved by the BOD. The Board shall have access to the Committee´s Meeting Minutes.
Other Committees
i) Subject to a Qualifying Shareholder Consent from each Qualifying Shareholder being obtained in accordance with Section 7 of the Shareholders' Agreement, the Board may establish other committees in relation to specific tasks. Board Members, Shareholders and third parties may be members of such committees, but they shall be led by the management.
j) Such committees shall have a clearly defined task, budget and a due date, if fitting, approved by the Board.
k) The Board shall have accessto the Committee´s Meeting Minutes.
l) The chair of the committee is the Board´s contact person. All committee members shall be CC´d in the inquiries and in the replies.
12. Shareholders’ Relations
12.1. If requested by the Shareholders, the Chairman, the CEO, the majority of Board Members and a member of each sub-committee of the board shall attend Shareholders’ Meetings. If the Chairman or the CEO is unable to attend in person, they shall participate with the assistance of electronic media if possible.
12.2. All Shareholders’ Meetings shall be called in accordance with applicable laws, regulations and the Articles.
12.3. All Shareholders’ Meetings notices, including the agenda, shall give the shareholders satisfactory information on the items to be discussed at the Shareholders’ Meeting.
12.4. The Board shall protect the interests of the Company. Shareholders shall be entitled to receive the following information;
a) annual consolidated financial statements for the Group including, without limitation, a
balance sheet, income and expenditure statements and a statement of cash flows audited within three months following the end of the relevant Financial Year;
b) monthly management accounts (in a form approved by the Board) within 20 Business Days following the end of the relevant month;
c) the operating and capital budget and cash flow forecast for the Group for each financial year adopted by the Board within 30 Business Days of adoption; and
d) such other information as a Shareholder may reasonably require for the purposes of
preparing its accounts, filing any tax return, monitoring its investment in the Group and/or
compliance with applicable law and regulation.
12.5. Notwithstanding Clause 12.4, no information shall be provided to a Shareholder to the extent that such information relates to any matter that the Company or any member of the Group has, or likely (in the opinion of the other Shareholder(s)) to have a conflict of interest with such Shareholder or its Affiliates(including in the case of Jarðvarmi, its shareholders) or any directors or officers of such persons.
12.6. All communication with the Company’s shareholders shall be clear, honest and unitary. The Chairman and the Vice-Chairman report on behalf of the Company to the shareholder who
nominated them to the Board.
12.7. The Board shall be informed of shareholders´ proposals and questions and the Board shall supervise the Company’s reactions there to.
12.8. If shareholders are in direct contact with the CEO or other employees, the CEO shall direct them to the Chairman or the Vice-Chairman, who are responsible for relations with each shareholder.
13. Confidentiality
13.1. Board Members are bound by strict confidentiality regarding the affairs of the Company, the Company's customers, and other matters which may come to their knowledge during their work as Board Members.
13.2. Board Members shall not disclose confidential information unless required to do so by law or by any competent court or authority or permitted in accordance with section 11 of the Shareholders' Agreement. Board Members undertake that they will not take undue advantage, whether for their own benefit or for that of other parties outside the Company, of any information or ideas to which they may have gained access resulting from their work for the Company.
13.3. Board Members shall store all documents and information they receive in relation to their duties in a secure manner.
13.4. Board Members, shall not express their opinions to the media or address the public in any other manner regarding the Company’s affairs, except with the consent of the Board.
13.5. The Board Members' duty of confidentiality shall remain in force after a Board Member leaves or resigns from the Board. Other participants in a Board Meeting shall be subject to the same duty of confidentiality.
14. Miscellaneous
14.1. These Rules shall enter into force on the date of the adoption by the Board.
14.2. These Rules shall be reviewed annually, at the first or second meeting after the AGM. In addition, the Rules shall be amended immediately to reflect changes in the ownership of the Company, e.g. in relation to a quorum and voting.
14.3. Only the Board may amend these Rules. A majority vote of the Board is required to amend these Rules.
14.4. The original of these Rules, as amended (if applicable), shall at all times be accessible to the Board of Directors and maintained in the Company's Book of Minutes.
14.5. At the time of the adoption of these Rules, all Board Members shall sign the original thereof. If the Board approves any amendments to the Rules all Board Members shall sign an original copy of the Rules as amended. The Rules shall be presented to new Board Members, who shall sign the original thereof to confirm their receipt of the Rules.
Adopted by the Board of Directors of the Company on 23 May 2022.