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I. Management Bodies of a Joint Stock Company
II. Inspection Commission, External Auditor
III. Increase in the Charter Capital
IV. Consolidation and Splitting of Company Shares
V. Redemption of Shares by Company at Shareholders’ Request
VI. Company’s Dividends
VII. Information on the Company
I. Management Bodies of Joint Stock Company
A joint stock company is managed by the following bodies:
· the General Shareholders’ Meeting;
· the Board of Directors (the Supervisory Board); and
· Executive bodies:
- the General Director (the single-member executive body)
- the Management (collective executive body).
General Shareholders’ Meeting
The supreme management body of a joint stock company is the General Shareholders’ Meeting.
The company is obliged to annually, within the period established by the company’s Charter, no earlier than in two months and no later than in six months after the end of the fiscal year, hold the Annual General Shareholders’ Meeting.
General Shareholders’ Meetings held in addition to the Annual General Shareholders’ Meetings are deemed extraordinary.
The following issues shall be considered at the Annual Shareholder Meeting:
- election of the Board of Directors;
- election of the Inspection Commission (Inspector) of the company;
- approval of the company’s External Auditor;
- approval of the annual report, annual bookkeeping accounting including profits and losses reports (profits and losses accounts) of the company, as well as distribution of profits, including payment (announcement) of the company’s dividends, and losses resulting from the financial year;
- issues which fall within the competence of the General Shareholders’ Meeting may also be considered.
- Jurisdiction of General Shareholders’ Meetings
The following issues fall within the jurisdiction of the General Shareholders’ Meeting:
1) incorporation of amendments and additions to the company’s Charter or approval of a new version of the company’s Charter;
2) reorganization of the company;
3) liquidation of the company, appointment of the liquidation commission and approval of the intermediary and final liquidation balance sheets;
4) determination of the number of members of the company’s Board of Directors, election of the members thereof and early termination of their powers before time;
5) determination of the quantity, nominal price, category (type) of the declared shares and rights granted by these shares;
6) increase in the Charter Capital of the company through increase in the nominal value of shares or through distribution of additional shares unless the company’s Charter in accordance with the Federal Law ‘On Joint Stock Companies’ refers the increase on the company’s Charter Capital through distributing additional shares to the competence of the company’s Board of Directors;
7) decrease in the Charter Capital through reducing the nominal price of shares, through taking up a part of the shares by the company to decrease their number as well as through cancellation of the shares acquired or redeemed out by the company;
8) formation of the company’s executive body, termination of the powers thereof before time (unless these issues are relegated to the jurisdiction of the company’s Board of Directors);
9) election of the members of the Inspection Commission (inspector) of the company and premature termination of their authorities;
10) approval of the company’s External Auditor;
11) approval of annual reports, annual bookkeeping accounting including profits and losses reports (profits and losses accounts) of the company, as well as distribution of profits including payment (announcement) of the company’s dividends and losses resulting from the financial year;
12) establishment of the procedure for conducting General Shareholders’ Meetings;
13) election of the members of the Counting Commission and premature termination of their authorities;
14) splitting and consolidation of shares;
15) deciding upon the approval of interested-party transactions in instances provided for by the Federal Law ‘On Joint Stock Companies’;
16) approval of major transactions in instances provided for by the Federal Law ‘On Joint Stock Companies’;
17) deciding upon participation in holding companies, financial and industrial groups, associations other unions of commercial entities;
18) acquisition by the company of distributed shares in those instances provided for by the Federal Law ‘On Joint Stock Companies’;
19) approval of internal documents governing the activities of the company’s bodies
20) other issues contemplated by the Federal Law ‘On Joint Stock Companies’.
The General Shareholders’ Meeting shall have legal power if shareholders possessing in aggregate over half of the votes of the company’s distributed voting shares have participated in the meeting.
If the agenda of the company’s General Shareholders’ Meeting includes items the decisions on which shall be taken by voters, the quorum on such items is defined separately. If the quorum on the items to be voted by one composition of voters is not present, this does not prevent from deciding upon the items to be voted by other composition with the necessary quorum present.
If there is no quorum for holding the Annual General Shareholders’ Meeting, another Shareholders’ Meeting shall be held with the same agenda. If the quorum is not obtained for holding the Extraordinary General Shareholders’ Meeting a rescheduled General Shareholders’ Meeting with the same agenda may be held.
The rescheduled Shareholders’ Meeting shall have legal power, if shareholders holding in aggregate at least 30 percent of the votes of the distributed voting shares have participated in the meeting. The Charter of the company having more than 500 thousand of shareholders may envisage a smaller quorum to hold a rescheduled General Shareholders’ Meeting.
The decision of the General Shareholders’ Meeting on the issue set to vote shall be taken by a majority of votes of the shareholders – owners of the company’s voting shares participating in the meeting.
The decisions on issues related to introduction of amendments and additions to the company’s Charter or approval of the new edition of the Charter, the company’s reorganization, liquidation, approval of liquidation commission, as well as approval of interim and final liquidating balance sheet, determination of the quantity, nominal price, category (type) of declared shares and rights granted by these shares, acquisition by the company of the shares in instances provided for by the Federal Law ‘On Joint Stock Companies’ shall be taken by the General Shareholders’ Meeting by the three quarters majority of votes of the shareholders – owners of the company’s voting shares participating in the General Shareholders’ Meeting.
Decisions taken by the General Shareholders’ Meeting, as well as the results of voting are announced at the General Shareholders’ Meeting in the course of which the items were set to vote or must be notified to those in the list, having the right to participate in the general shareholders’ meeting in the form of the report on voting results in accordance with the procedure provided for notifying of holding the General Shareholders’ Meeting, not later than 10 days after compilation of the report on voting results (see below).
A shareholder has the right to challenge in court a decision taken by the General Shareholders’ Meeting in violation of the requirements established by the Federal Law ‘On Joint Stock Companies’, other legislative acts of the Russian Federation, or the company’s Charter if he did not attend such General Shareholders’ Meeting or if he voted against such decision and such decision violated his rights and lawful interests.
Such claim may be filed to court within six months from the day when the shareholder knew or should have known about the decision taken.
Shareholders have the right to participate in the General Shareholders’ Meeting in conformity with the list of shareholders having the right to participate in the meeting.
The date established for recording the lists of shareholders entitled to participate in the General Shareholders’ Meeting shall be determined by the company’s Board of Directors and cannot be fixed earlier than the date of adoption of the decision on holding the General Shareholders’ Meeting or earlier than 50 days prior to the date of the General Shareholders’ Meeting.
In the instance where the estimated agenda of an Extraordinary shareholders’ meeting includes the item on electing the members of the company’s Board of Directors (to be elected by cumulative vote), the date established for recording the list of those possessing the right to participate in the General Shareholders’ Meeting shall be defined by the company’s Board of Directors and shall not be fixed earlier than 65 days prior to the date of the General Shareholders’ Meeting.
A notice on the holding of the General Shareholders’ Meeting shall be forwarded to each of those included in the list of persons entitled to participate in the general shareholders’ meeting by registered letter, unless the company’s Charter envisages another way of sending this notice in the written form or actual service as well as by, if it is envisaged by the company’s Charter, by publishing the information published in widely available media defined by the company’s Charter.
The company shall notify its shareholders of the General Shareholders’ Meeting no later than 20 days prior to the date of holding the meeting, if the agenda of the meeting includes the item on the reorganization of the company - not less than 30 days prior to the date of holding the meeting.
If the agenda of the Extraordinary General Shareholders’ Meeting includes the item on electing the members of the company’s Board of Directors (are to be elected by cumulative vote), the shareholders shall be notified of the Meeting not less than 50 days prior to the date of holding the meeting.
A shareholder (shareholders) owning at least 2% of the voting shares have the right to make proposals with respect to the agenda of an Annual General Shareholders’ Meeting, and to nominate candidates to the Board of Directors of the company, collective executive body, Inspection Commission (Inspector) and Counting Commission of the company (the number of such candidates should not exceed the number of members of the respective body). The shareholders (shareholders) may also nominate a candidate to the single-member executive body.
Such proposals shall be submitted no later than 30 days after the end of the company’s fiscal year, unless a longer period is established by the company’s Charter.
If the estimated agenda of an Extraordinary Shareholders’ Meeting includes the item on electing the members of the company’s Board of Directors (to be elected by cumulative vote), proposals on nomination of candidates shall be submitted to the company no less than 30 days prior to the date of holding the meeting, unless a longer period is established by the company’s Charter.
An Extraordinary General Shareholders’ Meeting may be held:
· at the request of a shareholder (shareholders) owning no less than 10 per cent of the company’s voting shares as of the date of filing the request;
· by the decision of the company’s Board of Directors at its initiative;
· upon the request of the company’s Inspection Commission (Inspector);
· upon the request of the company’s External Auditor.
The right to participate in the General Shareholders’ Meeting may be exercised by a shareholder both personally and through its representative acting on the grounds of the power of attorney.
In instances where a share is transferred after the date on which the shareholders’ list is recorded and before the date of the General Shareholders’ Meeting, the person included in such list of shareholders, entitled to attend a General Shareholders’ Meeting is required to issue a voting power of attorney to the transferee or to vote at the General Shareholders’ Meeting in accordance with the transferee’s instructions. This rule is also applicable to each subsequent share transfer.
Voting on agenda items of the General Shareholders’ Meeting may be conducted by voting ballots.
Voting on agenda items at the General Shareholders’ Meeting of the company with over 100 shareholders, as well as voting on agenda items at a General Shareholders’ Meeting by absentee vote by poll shall be by voting ballots only.
When holding a General Shareholders’ Meeting by absentee vote by poll or holding a General Shareholders’ Meeting of the company with the number of shareholders (owners of voting shares) totaling or exceeding 1000, as well as of the company, the Charter of which envisages that the ballots shall be obligatorily sent (handed) before holding the General Shareholders’ Meeting, a voting ballot shall be forwarded and handed over by actual service to every person in the list of those possessing the right to participate in the General Shareholders’ Meeting, not later than 20 days prior to holding the meeting.
Voting ballots should be sent by registered mail, unless another way of sending voting ballots is established by the company’s Charter. The Charter of a company with more than 500 thousands of shareholders may envisage ballot form’s publishing within the established term in widely available media, defined by the company’s Charter.
Company’s Board of Directors
The company’s Board of Directors shall carry out overall management of the activity of the company within its jurisdiction.
Only a natural person may become a member of the company’s Board of Directors. A member of the Board of Directors (Supervisory Board) shall not necessarily be the company’s shareholder.
The company with less than fifty shareholders owning voting shares may provide in its Charter that the functions of the company’s Board of Directors shall be executed by the General Shareholders’ Meeting. In this instance, the Charter of the company should specify either a particular person or a body of the company whose jurisdiction includes taking the decision on holding the General Shareholders’ Meeting and approval of the agenda thereof.
The exclusive jurisdiction of the company’s Board of Directors includes the following issues:
1) determination of priority areas for the company’s activity;
2) calling the Annual and Extraordinary General Shareholders’ Meetings, excluding the cases envisaged by the Federal Law ‘On Joint Stock Companies’;
3) approval of the agenda of the General Shareholders’ Meeting;
4) determination of the date for recording the list of shareholders having the right to participate in the General Shareholders’ Meetings, and other matters falling within the jurisdiction of the company’s Board of Directors in accordance with the Federal Law ‘On Joint Stock Companies’ or pertaining to preparation for and holding of the General Shareholders’ Meeting;
5)increase of the company’s Charter capital by distribution of the shares within the limits of the quantities and categories (types) of declared shares, provided that the Charter in accordance with the Federal Law “On Joint Stock Companies’ grants this right to the Board;
6) distribution by the company of bonds and other emissive securities in cases provided by the Federal Law ‘On Joint Stock Companies’;
7) determination of the price (monetary value) of property, as well as the price of distribution and redemption of emissive securities in cases provided by the Federal Law ‘On Joint Stock Companies’;
8) acquisition by the company of distributed shares, bonds and other securities of the company in the instances contemplated by the Federal Law ‘On Joint Stock Companies’;
9) formation of the company’s executive body and early termination of the powers thereof, provided that the company’s Charter relegates the above issues to the jurisdiction of the Board of Directors;
10) recommendations on amounts to be paid as remuneration and compensation to the members of the company’s Inspection Commission (inspector), and determination of the amount of payment for the external auditor’s services;
11) recommendations on the amount of the dividends on shares and the procedure for payment thereof;
12)use of the reserve fund and other funds of the company;
13) approval of the company’s internal documents, excluding those to be approved by the company’s General Shareholders’ Meeting in accordance with the Federal Law ‘On Joint Stock Companies’, and other internal documents the approval of which falls within the jurisdiction of the company’s executive bodies;
14) establishing branches and opening representative offices of the company;
15) approval of major transactions in instances provided by the Chapter X of the Federal Law ‘On Joint Stock Companies’;
16) approval of the company’s registrar and the terms of the agreement with the registrar, as well as termination of such agreement;
17) approval of interested-party transactions in cases provided by the Chapter XI of the Federal Law ‘On Joint Stock Companies’;
18) other issues provided by the Federal Law ‘On Joint Stock Companies’ and the company’s Charter.
Issues relegated to the jurisdiction of the company’s Board of Directors may not be transferred to the company’s executive body.
Members of the company’s Board of Directors shall be elected by the Annual General Shareholders’ Meeting for a period untill the next Annual General Shareholders’ Meeting.
If the Annual General Shareholders’ Meeting was not held within the terms established by the Federal Law ‘On Joint Stock Companies’, the authorities of the company’s Board shall be terminated, excluding the authorities concerning the preparation, calling and holding the company’s Annual General Shareholders’ Meeting.
Persons elected to the company’s Board of Directors may be reelected for an unlimited number of times.
Members of the company’s Board of Directors with over a thousand shareholders owning common shares shall be elected by cumulative vote.
In cumulative vote, the number of votes in possession of every shareholder is multiplied by the number of persons to be elected to the Board, and a shareholder has the right to cast all the votes on shares held by him for one candidate or divide such votes among two or more candidates nominated to the Board of Directors.
Candidates received the majority of votes shall be deemed elected to the Board of Directors.
By the decision of the General Shareholders’ Meeting the powers of any member of the Board of Directors may be early terminated, insofar, if members of the Board of Directors were elected by cumulative vote, the decision on the termination of powers may be taken only with respect to all members of the Board of Directors.
The number of persons on a company’s Board of Directors is determined by the company’s Charter or by a decision of the General Shareholders’ Meeting in accordance with the requirements of the Federal Law ‘On Joint Stock Companies’.
For an open joint stock company with over a thousand shareholders owning common stock and other voting shares of the company, the Board of Directors should be composed of at least seven members, while for the company with over ten thousand shareholders - at least nine.
The law prohibits to combine the positions of the Chairman of the Board of Directors and General Director (a single-member executive body).
In the event that a company has both the Board of Directors and the Management Board (a collective executive body of the company), the Law provides that the members of the company’s collective executive body may not account more than one quarter of the company’s Board of Directors.
An independent director is a member of the company’s Board of Directors who is not and was not during a year preceding the adoption of resolution (on the approval of an interested-party transaction):
- a person carrying out the functions of the single-member executive body, including the functions of its manager, a member of the collective executive body, a person holding a position in the bodies of the managing company;
- a person whose spouse, parents, children, brothers and sisters, adoptive parents and adopted children are holding positions in above-mentioned company’s management bodies, of the managing company, or being the Manager of the company;
- the company’s affiliate, excluding the member of the Board of Directors.
The meeting of the company’s Board of Directors shall be called by the Chairman of the Board of Directors:
· by his/her own initiative;
· at the request of a member of the Board of Directors;
· at the request of the company’s Inspection Commission (Inspector);
· at the request of the company’s External Auditor;
· at the request of the company’s Executive Body, as well as other persons determined by the company’s Charter.
Board of Directors Quorum
The quorum of a meeting of the Board of Directors shall be determined by the company’s Charter and shall not be less than one half of the elected members of the company’s Board of Directors.
If the number of the members of the company’s Board of Directors’ members becomes less than the stated quorum, the Board of Directors shall adopt a decision on holding an Extraordinary General Shareholders’ Meeting to elect a new Board of Directors. The remaining members of the company’s Board of Directors are entitled to adopt a decision only to call such Extraordinary General Shareholders’ Meeting.
Decision-making by the Board of Directors
Decisions at the company’s Board of Directors shall be adopted by a majority of votes of the members of the company’s Board of Directors participating in the meeting, unless provided otherwise by the Federal Law ‘On Joint Stock Companies’ or by the company’s Charter.
A member of the company’s Board of Directors shall not delegate his/her right to vote to any person , including another member of the Board.
The company’s Charter may provide for the right of a decisive vote of the Chairman of the company’s Board of Directors in cases of equal votes in favor and against when the Board adopts a decision.
Remuneration of Members of the Board of Directors
Remuneration and compensation of expenses related to the execution of duties by the members of the Board of Directors shall be paid by the decision of the General Shareholders’ Meeting.
The amounts of such payments are established by the decision of the General Shareholders’ Meeting.
Company’s Executive Bodies
The jurisdiction of the company’s executive body includes all issues relating to the management of the company’s current activity, and implementation of decisions adopted by the company’s General Shareholders’ Meeting and the Board of Directors, except for the issues relegated to the exclusive jurisdiction of the company’s General Shareholders’ Meeting or the Board of Directors.
The General Director (Director) shall be elected, and shall also early terminate his/her duties, by the decision of the General Shareholders’ Meeting or the Board of Directors, depending to whose jurisdiction the resolution of the specific issue is relegated.
In cases when the formation of a company’s executive bodies is carried out by the General Shareholders’ Meeting, the company’s Charter may provide for the right of the company’s Board of Directors to adopt a decision on suspension of powers of the company’s single-member executive body (Director, General Director).
Simultaneously with the stated decisions the company’s Board of Directors shall decide to create a provisional single-member executive body and to hold an Extraordinary General Shareholders’ Meeting to decide on early termination of the powers of the single-member executive body and on the creation of a new single-member executive body of the company as well as to delegate the authorities of a single-member executive body to a managing company or a manager.
In cases when the creation of executive bodies falls within the jurisdiction of the company’s General Shareholders’ Meeting and the company’s single-member executive body (Director, General Director) can not execute their duties, the Board of Directors (Supervisory Board) of the company has the right to adopt a decision on creating a provisional single-member executive body and holding an Extraordinary General Shareholders’ Meeting to decide on the early termination of the powers of the single-member executive body and on the creation of a new single-member executive body of the company as well as to delegate the authorities of a single-member executive body to a managing company or a manager.
The above-mentioned decisions shall be approved by a three quarters majority of votes of the Board of Directors’ members, without taking into account the votes of former members of the company’s Board of Directors.
A contract with the General Director is signed on behalf of the company by the Chairman of the Board of Directors or a person authorized by the Board of Directors.
The powers of the General Director, by the decision of the General Shareholders’ Meeting, may be transferred under a contract to a commercial organization or an individual entrepreneur.
The company’s collective executive body shall be formed and shall early terminate its powers by the decision of the General Shareholders’ Meeting, unless the company’s Charter delegates the right to resolve such issues to the company’s Board of Directors.
Division of Powers between Single-Member and Collective Executive Bodies
The Charter of the company which provides for both a single-member and collective executive bodies should specify the powers of the company’s collective executive body.
In this instance, the person executing the functions of the company’s single-member executive body (Director, General Director) shall also execute the functions of the Chairman of the company’s collective executive body (Management Board, Directorship).
The person fulfilling the functions of the company’s single-member executive body (Director, General Director) and members of the company’s collective executive bodies (Management Board, Directorship) are allowed to combine their duties with positions in the management bodies of other organizations only with the approval of the company’s Board of Directors.
Members of the management bodies are liable to the company for losses inflicted to the company by their culpable actions (omissions), unless federal laws establish other grounds and scope of liability.
Insofar, members of the collective executive body and the Board of Directors who voted against the decision which caused losses to the company or who did not participate in the voting procedure shall not be held liable.
In determining the grounds and scope of liability one should take into account normal course of business and other circumstances material for business.
The company or a shareholder (shareholders) owning in aggregate at least 1 percent of the company’s distributed common shares may file a suit to court against the member of the management bodies and claim compensation of losses inflicted to the company.
The representatives of the State or a municipal organization in the Board of Directors of an open joint stock company incur the same liability as other members of the Board of Directors of an open joint stock company.
II. Inspection Commission, External Auditor
To supervise financial and business activity of the company, the General Shareholders’ Meeting elects the Inspection Commission (Inspector) of the company.
The inspection of the company’s financial and business activity is conducted upon the results of the company’s activity for the past year, and at any time at the initiative of the Inspection Commission, by the decision of the General Shareholders’ Meeting, of the Board of Directors, or at the request of a shareholder (shareholders) of the company, holding in aggregate not less than 10% of the company’s voting shares.
The members of the company’s Inspection Commission (Inspector) may not be at the same time the members of the company’s Board of Directors, or occupy other positions in the company’s management bodies.
The shares in possession by the members of the company’s Board of Directors or persons occupying positions in the company’s management bodies may not participate in election of the members of the company’s Inspection Commission.
The External Auditor audits the financial and business activity of the Company on the grounds of the contract concluded therewith.
The company’s External Auditor shall be approved by the General Shareholders’ Meeting. The amount of compensation for its services shall be determined by the company’s Board of Directors.
III. Increase in the Charter Capital
The Charter Capital of the company may be increased through increasing the nominal value of shares or by distributing additional shares.
The decision on the increase in the company’s Charter capital through an increase in the nominal value of shares is taken by the company’s General Shareholders’ Meeting.
The decision on increasing the Charter capital of the company by distribution of additional shares shall be adopted by the company’s General Shareholders’ Meeting or, if the company’s Charter grants such right, by the company’s Board of Directors (Supervisory Board).
The decision on increasing the Charter capital of the company by distribution of additional shares shall be adopted by unanimous vote of all members of the company’s Board of Directors, without taking into account the votes of the Board’s former members.
Additional shares may be distributed by a company only within the limits of the quantity of declared shares established by the company’s Charter.
If a block of shares in the company representing over 25% of votes at the General Shareholders’ Meeting is retained, in accordance with the legislative acts of the Russian Federation on privatization, by the State or a municipality, the Charter Capital of the company may be increased through distribution of additional shares during the time when such block is so retained, provided that such increase will not affect the share owned by the State or the municipality.
- distributing shares (the company’s emissive securities convertible into shares) by a closed subscription;
- distributing by a public subscription of common shares – more than 25% of earlier distributed common shares of the company and emissive securities convertible into the common shares of the issued securities which may be converted into common shares - more than 25% of earlier distributed common shares.
At that, it should be noted, that the Federal Law ‘On Joint Stock Companies’ envisages the necessity of the approval of the stated decisions by a three quarters majority of shareholders – owners of voting shares, participating in the General Shareholders’ Meeting, unless the company’s Charter envisages a greater number of votes to approve such decision.
In cases, when the company distributes its shares and emissive securities convertible into shares by a public subscription, the company’s shareholders shall have the preemptive right to acquire the above shares in the amount proportionate to the number of shares of this category (type) belonging thereto.
The company’s shareholders who voted against or did not participate in voting on distribution by a close subscription of shares and emissive securities convertible into shares shall also have a preemptive right to acquire additional shares and emissive securities convertible into shares in the amount proportionate to the number of shares of this category (type) in their possession.
The stated right shall not extend to the instances of distributing the shares and other emissive securities convertible into shares by a closed subscription only among the company’s shareholders, if such shareholders have a possibility to acquire a whole number of the shares or other emissive securities convertible into shares in proportion to the amount of shares of the same category in their possession.
IV. Consolidation and Splitting of Company Shares
By decision of the General Shareholders’ Meeting, the company has the right to consolidate its issued shares, resulting in two or more company shares being converted into one new share of the same category and type, as well as to split its distributed shares, resulting in one company share being converted into two or more company shares of the same category and class. Corresponding changes are to be made in the company’s Charter regarding the nominal value and quantity of the company’s distributed and declared shares of the respective category (type).
V. Redemption of Shares by Company at Shareholders’ Request
Shareholders of voting shares shall have the right to demand that all or part of their shares be redeemed by the company in the following circumstances:
- in the event of the company’s reorganization or conclusion of a major transaction by decision of the General Shareholders’ Meeting, provided they voted against such decisions or did not participate in the vote on such issues;
- in the event of introduction of amendments and additions to the company’s Charter or approval of a new edition of the Charter which restrict their rights, provided they voted against the adoption of the corresponding decision or did not participate in the vote.
The company shall redeem the shares at the price determined by the company’s Board of Directors, not less than their market value, which must be estimated by an independent appraiser without regard for those changes in such value occurring as a result of the company’s actions which led to the emergence of the right to require the valuation and redemption of the shares.
VI. Dividends of a Company
Once a year a company has the right to announce the payment of dividends on the distributed shares.
Decisions on the payment of annual dividends, annual dividend size and the form of its payment for shares of each category (type) shall be adopted by the company’s General Shareholders’ Meeting. The size of annual dividends may not be larger than that recommended by the company’s Board of Directors (Supervisory Board).
The company is required pay announced dividends for each category (type) of shares. The dividends shall be paid in cash or, in those cases provided by the company’s Charter, in-kind.
Dividends on prefereence shares of particular types may be paid out from a fund specially designated for such purpose.
The payment date of annual dividends shall be determined by the company’s Charter or by a decision of the General Shareholders’ Meeting on the payment of annual dividends.
In those cases when the payment date of annual dividends is not determined by the company’s Charter or by its General Shareholders’ Meeting such dividends shall be paid within 60 days from the day on which a decision on the payment of dividends was adopted.
Shareholders-owners of preference shares shall participate in the General Shareholders’ Meeting and have the right to vote on issues concerning the company’s reorganization or liquidation.
Shareholders-owners of preference shares of particular types shall acquire the right to vote at the General Shareholders’ Meeting in the event of adopting a decision to introduce amendments and additions to the company’s Charter which limit the rights of preference shareholders of such type, including instances of the determination of or increase in the size of a dividend and/or the determination of or increase in the liquidation value payable on preference shares of the higher priority, as well as the granting to preference shareholders of this type of a higher priority during the payment of dividends and/or the liquidation value of shares.
Decisions on the introduction of such amendments and additions is adopted by not less than three quarters of shareholders’ votes – voting shares’ owners participating in the General Shareholders’ Meeting, excluding the votes of the owners of preference shares which rights are limited. Such decision is taken also by three quarters of all shareholders – owners of preference shares of each type (shares with limited rights), if the company’s Charter does not envisage a greater number of votes necessary to adopt such decisions.
If there was no decision taken at the General Shareholders’ Meeting with respect to the payment of dividends on preference shares on which the amount of dividend is determined by the Charter, or a decision was taken on partial payment of dividends on the above shares, shareholders owning such shares may participate in the General Shareholders’ Meeting and vote on all issues within the jurisdiction thereof, starting with the meeting following the Annual General Shareholders’ Meeting when the decision on the payment of dividends was not taken or a decision on the partial payment of dividends on privileged shares of the above type was taken. The right of shareholders owning privileged shares of such type to participate in the General Shareholders’ Meeting terminates upon the first payment of dividends on the above shares in full.
VII. Information on the Company
The company is obliged to provide its shareholders with the documents listed below:
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the agreement on the establishment of the company;
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the company’s Charter, amendments and additions to the Charter and registered in accordance with the established procedure, decision on the creation of the company, certificate of state registration of the company;
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documents certifying the rights of the company for the assets shown on its balance sheet;
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internal documents of the company;
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provisions on a branch or a representative office of the company;
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annual reports of the company;
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accounting documents;
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voting ballots, as well as power of attorneys (copies of power of attorneys) to participate in the company’s General Shareholders’ Meeting;
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independent appraiser’ reports;
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lists of the company’s shareholders entitled to participate in General Shareholders’ Meeting, having the right to collect dividends as well as by other lists drawn up by the company for the exercise by its shareholders of their rights;
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issue prospects, issuer’s quarterly reports and other documents containing information to be published or disclosed by other means in accordance with the Federal Law ‘On Joint Stock Companies’ or in accordance with other federal laws;
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lists of the company’s affiliated persons;
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other documents stipulated by the Federal Law ‘On Joint Stock Companies’ in force, the company’s Charter, the company’s internal documents and decisions of the General Shareholders’ Meeting, the company’s Board of Directors, its management bodies, as well as other documents provided by legislative acts of the Russian Federation.
Only those shareholders (shareholder) holding in aggregate no less than 25% of the company’s voting shares have the access to the company’s accounting documents and the minutes the meeting of the company’s collective executive body.
The stated documents must be provided for examination in the premises of the company’s executive body within 7 days from the date of request. If requested by persons having access to the foregoing documents the company is obliged to provide them with the copies of such documents. The amount of the fee for the provision of the documents may not exceed the expenses incurred in producing copies of said documents.
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