Legal Materials - Regulation on OAO RAO “UES of Russia” Board of Directors Nomination and Remuneration Committee

General terms, definitions and abbreviations

used in this Regulation

OAO RAO “UES of Russia”	-	Company
Regulation on OAO RAO “UES of Russia” Board of directors nomination and remuneration committee.	-	this Regulation
OAO RAO “UES of Russia” Board of directors nomination and remuneration  committee	-	Committee
Chairman of OAO RAO “UES of Russia” Board of directors nomination and remunerations committee.	-	Committee Chairman
Chairman of OAO RAO “UES of Russia” Board of directors nomination and remuneration committee.	-	Deputy Committee Chairman
Secretary of OAO RAO “UES of Russia” Board of directors nomination and remuneration committee	-	Committee Secretary
Member of OAO RAO “UES of Russia” Board of directors nomination and remuneration committee.	-	Member of Committee
Minutes of OAO RAO “UES of Russia” Board of directors nomination and remuneration committee meeting	-	Minutes of Committee meeting

1. General terms

1.1. Committee is an advisory-consultative body of Company Board of directors, established according to Company Board of director’s resolution.

Committee is not a Company body and cannot act on Company’s behalf.

Company Board of directors as advisory takes committee’s resolutions.

1.2. Committee is guided by federal legislation, normative and legal acts of RF, Company Charter, Regulation on calling and holding of Company Board of directors meetings, resolutions of Company Board of directors, and this Regulation.

2. Committee reference

2.1. Committee’s reference includes the following issues:

2.1.1. Development of principles and criteria regarding compensation and material incentives for:

- Company Board of directors’ members, Chairman of Company Board of directors;

- Company Board’s members, Chairman of Company Board;

- Company Auditing Committee members, Chairman of Company Auditing Committee.

2.1.2. Development of proposals that define essential terms of agreements with members of collegiate executive body and person performing the functions of Company sole executive body.

2.1.3. Regular assessment of Company sole executive body and members of Company collegiate executive body performance, and development of corresponding proposals and recommendations for Board of directors.

3. Committee’s Rights

3.1. In order to implement its liabilities Committee has the right to:

3.1.1. Carry out research regarding implementation of liabilities mentioned in section 2 of this Regulation.

3.1.2.  Request Company and obtain information and documents necessary for implementation of liabilities in accordance with section 10 of this Regulation.

3.1.3.  Request information and documents regarding its own activities from exterior organizations in accordance with this Regulation.               

3.1.4.  Use professional services of outside organizations or attract third parties as experts (consultants) having special knowledge in issues that are in Committee’s reference and within Committee Budget frames.

3.1.5. Consider issues of compensation, motivation, remuneration, personnel policy in case they are considered by Company Board of directors, including initiating of their consideration and preparation.

3.1.6. Committee members have the right to meet members of Company administration and other people to discuss issues that are in Committee’s reference.

3.2. Committee also has other rights, stated in this Regulation. 

4. Provision of Committee’s activity

4.1. Committee is financed in accordance with Committee Budget, approved by Company Board of directors on Committee Chairman presentation. Committee Budget is accompanied by report of Company sole executive body on possibility of financing the Budget in planned volume within the frames of Company economic activities during corresponding plan period. Budget approval is possible only if there is a positive decision of Company sole executive body.

4.2. while forming Budget disbursement section, separate article of expenditure is allocated to Committee’s work provision. Committee expenditure in particular includes compensation to Committee Chairman, Deputy Committee Chairman, Committee members, Committee Secretary.

4.3. Committee Chairman is given necessary authorities to spend funds in accordance with approved Budget.

4.4. Committee Secretary is appointed to carry out organizational, information and documentary provision of Committee activities necessary for preparation and holding meetings and activities in between meetings. Committee Secretary is not a Committee member and he acts in accordance with this Regulation.

Committee Secretary is appointed by resolution of Company Board of directors.

5. Committee structure and formation order

5.1. Committee consists of 3 (three) members. If necessary, Committee may be enlarged by a separate resolution of Company Board of directors.

5.2. Only Company Board of directors’ members who are independent directors¹ may be appointed Committee members, and in case it is not possible because of objective reasons – only independent and non-executive² members of Board of directors.

5.3. Company Board of directors elects Committee Chairman. Committee members are elected by Company Board of directors on presentation of Committee Chairman.

5.4. Authorities of any Committee members may be terminated at any moment by Company Board of directors’ resolution.

Committee Chairman and Committee members may divest themselves of authority upon sending a note to Chairman of Company Board of directors not later than in 14 (fourteen) calendar days before they stop executing them in Committee.

5.5. In case the number of Committee members is less than required by paragraph 5.1 of this Regulation, Company Board of directors elects necessary members in required number.

6. Committee Chairman

6.1. Committee Chairman:

6.1.1. Carries out Committee’s general organizational activity.

6.1.2. Calls planned and extraordinary Committee meetings, in particular, provides announcing Committee members about the nearest meeting in the order stated in this Regulation, determines the agenda and form of the meeting (live or absent voting), if the meeting form is not fixed by Committee decision or working plan, monitors the process of Committee meeting in the form of absent voting.

6.1.3. Performs functions of Chairman at Committee meetings:

1) in accordance with Committee Secretary’s information sets quorum for the meeting or absence of quorum in case a resolution should be passed;

2) points out possibility to change the agenda order, if necessary, initiates discussion of changing the agenda order for the meeting;

3) takes measures regarding the meeting adjourning in case there is no quorum and organizes informing absent Committee members on the resolution;

4) introduces invited people to Committee members and provides participation of people invited to meeting regarding several agenda issues within the framework of Committee’s work over these issues, or delegates this to Committee Secretary;

5) provides order during the meeting, gives floor to speakers, presenters and those who wish to reply, and, if necessary, opens free discussion of corresponding issue;

6) takes into consideration proposals of Committee members regarding corresponding project (projects) of resolution (resolutions);

7) puts to vote projects or resolutions proposed by Committee members at the meeting and/or in the process of its preparation; organizes voting the proposed resolution project;

8) announces the resolution at live Committee meeting (according to voting results) or informs all Committee members in writing about the resolution passed by absent voting;

9) organizes taking minutes of Committee meeting;

10) monitors Committee Secretary activities;

11) signs Minutes of Committee meeting as the Chairman.

6.1.4. Monitors implementation of Committee planned activities.

6.1.5. Meets with Company administration and other people for discussion of issues in Committee’s reference.

6.1.6. Represents Committee while dealing with Company Board of directors, Company sole executive body, other bodies, organizations and people.

6.1.7. On behalf of Committee monitors implementation of Committee resolutions, in particular controls the resolutions to be implemented and cancels monitoring of Committee resolutions that were implemented.

6.1.8. Monitors official Committee correspondence, signs letters, information enquires and other documents on behalf of Committee.

6.1.9. Considering Committee’s opinion officially comments passed Committee’s resolutions and presents Committee’s point of view regarding issues that were discussed at Committee’s meetings but were not resolved.

6.1.10. Controls strict observation of this Regulation’s requirements.

6.1.11. Attempts to consider each Committee member's opinion regarding the Minutes of corresponding Committee meeting.

6.1.12. Decides on inviting outside organizations to obtain professional service, or third parties as experts (consultants) with special knowledge regarding issues that are in Committee’s reference and within Committee Budget frames.

6.1.13. Exercise other authorities in accordance with this Regulation.

6.2. During the absence of Committee Chairman at meetings or in between the meetings, or in case he is incapable of exercising his authorities, they are transferred to Deputy Committee Chairman. Deputy Committee Chairman is elected by simple majority of Committee members’ voices.

7. Committee Secretary

7.1. Committee Secretary:

7.1.1. Carries out organizational, information and documentary provision of Committee activities necessary for preparation and holding meetings and activities in between meetings, as follows:

1) informs all Committee members about coming extraordinary and planned meetings by order of Committee Chairman;

2) provides all Committee members with corresponding documents and materials necessary for Committee meeting;

3) records all correspondence addressing Committee and/or Committee members (including enquiries, orders and motions) and organizes preparation of corresponding replies and explanations, including Committee reaction to incoming correspondence; forwards correspondence to Committee members and, if necessary, helps Committee members with replying to letters, enquiries, motions, etc.;

4) organizes recording of presentations at Committee meetings (Minutes or short-hand notes);

5) provides all possible technical and organizational help to Committee members in charge of preparation of corresponding issues at planned and extraordinary Committee meeting;

6) provides printing, copying, translation and transfer of documents and materials to corresponding people, as well as editing Committee documents and materials projects;

7) controls participation of invited people at Committee meeting, as well as correspondence of actual participation of invited person to discussed agenda item;

8) provides preparation to planned live Committee meetings (premises, materials, provision of Committee members and invited people with access to premises, provision with materials, secretarial services, etc.)

7.1.2. Makes and sends voting papers to Committee members in case the meeting is in form of absent voting, as well as their processing.

7.1.3. Provides organizational support while voting at Committee meeting.

7.1.4. Provides organizational and technical support to taking Committee meeting minutes within 3 (three) working days from the meeting date.

7.1.5. Organizes cooperation with sole executive body and Company management with the purpose of saving and storing of all documents and materials related to Committee activities.

7.1.6. Executes orders of Committee Chairman that are in Committee Chairman reference.

7.1.7. Carries out other activities in accordance with this Regulation.

8. Committee meetings

8.1. Committee meetings are carried out in accordance with the plan approved by Committee and in case of necessity if required by people mentioned in paragraph 8.3.1. of this Regulation. Committee Chairman decides on calling a meeting, date, time and place of the meeting, agenda items, and people who will participate at the meeting.

Committee activities plan is approved at the first, from the election moment, Committee meeting. 

8.1.2. Notification of Committee meeting together with agenda should be prepared by Committee Secretary and sent to people who will participate at the meeting not later than in 5 (five) working days before the meeting. Explanatory note and corresponding agenda materials are sent to meeting participants not later than in 3 (three) working days before the meeting.

8.1.3. Committee meeting is prepared by Committee Secretary under direction of Committee Chairman.

8.1.4. Special features of calling extraordinary Committee meeting are set in paragraph 8.3. of this Regulation.

8.2. Preparation for Committee meetings:

8.2.1. Agenda project for Committee meeting is made by Committee Secretary and approved by Committee Chairman.

8.2.2. Items can be included into the agenda project on initiative of people listed in paragraph 8.3.1. of this Regulation. Not later than in 14 (fourteen) calendar days before the meeting, initiator should send Committee Secretary a proposal addressed to Committee Chairman to include an agenda item, explanatory note stating necessity of discussing this item at the meeting, proposed resolution project and other covering materials if there are any.

8.2.3. Committee Secretary controls timing of presenting proposals to include items into Committee meeting agenda (including explanatory note and covering materials).

Committee Secretary informs Committee Chairman about failure to meet a date of presenting proposals on inclusion issues into Committee meeting agenda (including explanatory note and covering materials) so that Committee Chairman can approve of the project of Committee meeting agenda.

8.2.4. Items prepared with failure to meet the date of sending project of Committee meeting agenda, explanatory note and covering materials to Committee members, or non-standard explanatory note and resolution project, may not be discussed by Committee Chairman’s decision.

8.2.5. Inclusion of additional items into Committee meeting agenda may be performed during the meeting and by Committee’s resolution passed by simple majority of voices of Committee members participating at the meeting.

8.3. Committee extraordinary meeting:

8.3.1. Committee extraordinary meeting is called by Committee resolution, Company Board of directors’ resolution, by request of any Committee member, by request of Chairman of Company Board of directors.

8.3.2. Committee member, as well as other people who in accordance with paragraph 8.3.1. of this Regulation have the right to call Committee extraordinary meeting, sends Committee Secretary a request to call Committee meeting not later than in 14 (fourteen) calendar days before the proposed date of Committee extraordinary meeting. Initiator should send Committee Secretary a proposal addressed to Committee Chairman to include an agenda item, explanatory note stating necessity of discussing this item at the meeting, proposed resolution project and other covering materials if there are any.

  In 5 (five) working days from the date of receipt of request to call Committee extraordinary meeting Committee Chairman decides on calling Committee extraordinary meeting, setting meeting date or date of absent voting, or refuses calling Committee extraordinary meeting. Reasoned refusal in calling Committee extraordinary meeting is sent to a person or Company body requesting calling of such meeting within 2 (two) working days from the date of Committee Chairman resolution to refuse calling the meeting.

  In case issues to be discussed at Committee extraordinary meeting are of urgent character, time necessary for calling extraordinary meeting can be reduced.

8.3.3. Committee Chairman’s resolution to refuse calling Committee extraordinary meeting may be approved in the following cases:

1) issue (issues)  proposed to be included into Committee meeting agenda is (are) not in Committee’s reference according to this Regulation;

2) request to call Committee extraordinary meeting does not contain full information about the reason of such request;

3) agenda issue containing request to call Committee extraordinary meeting is already in the agenda of the nearest meeting called in accordance with Committee Chairman resolution approved before the mentioned request was received;

4) order of making request to call a meeting set by paragraphs 8.3.1. and 8.3.2. of this Regulation is not observed.

8.3.4. In case Chairman of Company Board of directors requests to call an extraordinary meeting, Committee Chairman should call Committee extraordinary meeting not later than in 10 (ten) calendar days from date of receiving the request.

8.4. Procedure of Committee meetings:

8.4.1. Committee meeting is competent (with quorum), if not less than half of total number of Committee members participated in it. Committee Chairman determines quorum at the beginning of the meeting. If there is no quorum this meeting should be adjourned and another Committee meeting with the same agenda should be held during the period of 7 (seven) working days.

8.4.2. Committee meetings can be held in the form of joint participation of Committee members and in the form of absent voting.

8.4.3. Committee member, who cannot participate at the meeting, may send his opinion to the Committee regarding agenda of this meeting in writing. At this vote of such Committee member will be counted while considering presence of quorum and voting results only if he expressed his opinion in writing in accordance with requirements stated in paragraph 8.5. of this Regulation.

8.4.4. Committee Chairman may invite to Committee meeting the following people:

1) Chairman and/or members of Board of directors who are not Committee members;

2) Company sole executive body, members of Company collegiate executive body;

3) specialists (consultants) in issued to be discussed;

4) other people.

People invited do not have the right to vote Committee meeting agenda.

8.5. Committee meeting in the form of absent voting.

8.5.1. Committee Chairman makes a decision to hold Committee meeting in the form of absent voting.

8.5.2. After Committee Chairman decides on carrying out absent voting, Committee Secretary provides all Committee members with notification of absent voting listing all issues for absent voting and all necessary materials, resolution project and voting papers of the form set by Committee for these purposes.

8.5.3. After Committee members receive notification they fill in voting papers in time set by resolution on absent voting, sign and submit them to Committee Secretary in original or via fax with further sending of the original to the address stated in papers.

8.5.4. Committee members who sent their voting papers in time and order set in paragraph 8.5.3. of this Regulation are considered participated in voting.

8.5.5. Voting paper can be considered void if:

1) if more than one box out of possible voting variants is marked with any kind of symbols;

2) if there is no signature of voting Committee member;

3) in other cases, when declaration of Committee member will is not clearly expressed judging by voting paper.

In this case vote of Committee member is considered in relation to quorum but not considered during summarizing of voting results.

8.6. Procedure of Committee resolutions.

8.6.1. Each Committee member has one vote. Transfer of vote from Committee member to other people, including other Committee members is not allowed.

8.6.1. Committee resolves issues via open voting.

8.6.2. In case there is equal number of voted for and against the agenda item Chairman of the meeting has a casting vote.

8.7. Committee meetings minutes:

8.7.1. Committee Secretary not later than in 3 (three) working days after the Committee meeting in the form of joint participation or absent voting has to prepare Committee meeting minutes.

8.7.2. Meeting minutes are signed by Committee Chairman, who is responsible for the correct procedure of taking Minutes. Committee members obtain copies of the minutes and prepared materials and recommendations. Recommendations to Board of directors are worked out by Committee before Board of directors receives materials for corresponding Board of directors meeting.

In other cases Committee Chairman has to inform Board of directors Secretary that Committee is going to work out recommendations regarding a certain item of agenda for Company Board of directors meeting.

8.7.3. Committee meeting minutes should indicate:

1) date, place and time of the meeting (or date of absent voting);

2) list of Committee members participated in discussing of agenda items (in which form) and the list of other people participated at the meeting;

3) agenda;

4) Committee members motions regarding agenda items;

5) items for voting and results of voting considering each Committee member opinion;

6) resolutions;

7) other information.

8.8. Committee meetings minutes are open for public except when it includes confidential information.

9. Monitoring of Committee resolutions fulfillment

9.1. Committee Secretary provides that all resolutions and corresponding assignments have reached the party in charge and organizes gathering of information about the course of Committee resolutions fulfillment.

9.2. With the purpose of monitoring Committee resolutions fulfillment Committee Secretary organizes analysis and preparation of reports on fulfillment of Committee resolutions. Secretary submits information about fulfillment of resolutions for consideration of Committee Chairman and other Committee members.

9.3. At meetings Committee considers reports on Committee resolutions fulfillment on Committee Chairman’s presentation.

10. Committee interaction with Company sole executive body.

10.1. Committee has the right to obtain from Company all the necessary information about the Company in written and in oral form that the Committee might need to fulfill its obligations set in paragraph 2 of this Regulation.

10.2. Information mentioned in paragraph 10.1. of this Regulation and necessary documents are provided on authority of request signed by Committee Chairman on provision with information and documents.

11. Confidentiality

11.1. During the period of executing authorities of Committee Chairman, Committee Secretary, Committee member, invited experts (consultants), and after this authority is terminated (work is finished), above mentioned people are obliged to observe confidentiality regarding information that is not open and that they can get as Committee members. Confidentiality of information and its content is set by Company Board of directors.

12. Storage and use of Committee documents

12.1. Committee meetings minutes are available to any Committee member and Company Board of directors' member.

12.2. In the result of Committee activities, Committee activities folder is formed.

12.3. Committee folder includes:

1) Committee meetings minutes;

2) Appendixes to Committee meetings minutes;

3) other information materials to Committee meetings;

4) census papers;

5) notifications on holding meetings;

6) other materials and documents.

12.4. Documents included in Committee folder are stored in Company premises (at location of Company sole executive body) together with Company Board of directors’ documents. Storage is at Company’s expense.

12.5. Systematization and archiving of Committee documents and materials is done by Committee Secretary under supervision of Committee Chairman. Committee Secretary makes the inventory of all documents and materials in Committee folder on paper and electronic media.

12.6. Committee members have unlimited access to Committee materials and documents as well as to folder inventory with the right to make copies.

12.7. Company executive body members with access to Committee documents are responsible for disclosure of information that is confidential. Confidentiality of information and its content is set by Company Board of directors.

12.8. In cases not set by this Regulation access to information on issues discussed by Committee may be granted only by permission of Committee, Committee Chairman or his deputy.

[1] Member of Company Board of directors who meets the requirements in p.2 Appendix 1 to Regulation on organization of security market trade approved by FCFR RF Act N 04-1245/ïç-í dated 15.12.2004.

[2] Members of Board of directors who are not Company sole executive body and (or) members of Company collegiate executive body.