Common use of Unaffiliated Directors Clause in Contracts

Unaffiliated Directors. 41.1 At least six months prior to the proposed date of an annual general meeting, the Nominating Committee shall notify each Nominating Shareholder of the Nominating Committee's intention to select candidates for the three Unaffiliated Directors. Each Nominating Shareholder may nominate up to three candidates. If, at that time, at least two of the Nominated Directors previously nominated by each Nominating Shareholder propose to the Nominating Committee that the three then-current Unaffiliated Directors each serve another term as a Director, and each Unaffiliated Director agrees to serve another term as a Director, then the Nominating Committee shall accept such recommendation. If such a proposal is not received from at least two of the Nominated Directors previously nominated by each Nominating Shareholder or if any then-current Unaffiliated Director does not so agree, the Nominating Committee shall engage a Search Consultant selected by the committee members to propose ten candidates who meet the candidate considerations set out in Bye-law 41.2 to become the three Unaffiliated Directors (which proposal shall include all then-current Unaffiliated Directors unless any Unaffiliated Director explicitly requests not to be considered for another term). Each Nominating Shareholder may propose up to three candidates to the Search Consultant but the Search Consultant shall not be required to include any such candidate in its proposal. As soon as possible after the Nominating Committee receives the Search Consultant’s proposal, it shall provide a copy of the proposal to the Supervisory Board and convene a meeting of the Nominating Committee at which one of the Nominated Directors previously nominated by each Nominating Shareholder shall also attend. The Nominating Committee shall remove three proposed candidates at the request of each Nominated Director (six candidates in the aggregate) in a process where each Nominated Director alternates in removing one candidate at a time, and continuing sequentially until up to six candidates have been eliminated (and the Nominating Shareholders shall alternate, in even and odd numbered calendar years, in having their Nominated Director select the first candidate to be removed). The Nominating Committee shall then select three candidates from the remaining list of four candidates as its recommendation to the Supervisory Board and who shall be proposed by the Supervisory Board for election as the three Unaffiliated Directors at the annual general meeting. For the avoidance of doubt, the Supervisory Board shall have no discretion to refuse to put forward for election any candidate so nominated by the Nominating Committee. 41.2 Unless otherwise specified, each item listed below shall be a requirement for an Unaffiliated Director candidate selected by the Search Consultant: (i) Unaffiliated; (ii) Fluency in English; (iii) Ability and willingness to travel to attend Supervisory Board meetings on a regular basis; (iv) Ability and willingness to serve on the Nominating Committee, the Audit Committee, the Compensation Committee and any other committee of the Supervisory Board; (v) Ability and willingness to serve as chairman of the Supervisory Board; and (vi) Experience in telecommunications is a plus, but not a requirement. 41.3 Up to and until the end of the first fiscal year in which the Group derives more than 33 per cent of its consolidated revenue from sources outside Russia and Ukraine, (a) at least 6 of the Unaffiliated Director candidates selected by the Search Consultant shall be required to meet the criteria specified in item (i) below and of those candidates, at least 4 must also be conversant in Russian, and (b) at least 6 of the Unaffiliated Director candidates selected by the Search Consultant shall be required to meet the criteria specified in item (ii) below: (i) Meaningful experience in Russia, Ukraine or countries in the CIS where the Company is operational and preferably other emerging markets (as a senior executive or as a director); and (ii) Experience as a senior executive or director in a large, publicly traded international company (with annual revenues exceeding US$3 billion) that is listed in Western Europe, North America, Japan, Singapore, Hong Kong or Australia. 41.4 No Member, nor any Director nominated by it, shall commence any Action in respect of, or otherwise challenge, any proposal from the Search Consultant identifying candidates for election as Unaffiliated Directors on the basis of a claim that one or more of the candidates identified in such proposal do not meet the applicable criteria specified in Bye-law 41.2. 41.5 Subject to Bye-law 41.2, in addition to the candidates submitted to the Nominating Committee pursuant to Bye-law 41.1, during the period commencing six months after the immediately preceding annual general meeting (the “Advance Notice Date”) and ending nine months after such meeting date, an Eligible Shareholder may suggest one, and not more than one, candidate for consideration as an Unaffiliated Director to the Nominating Committee in accordance with this Bye-law 41.5. The Nominating Committee shall not be required to consider any candidate proposed pursuant to this Bye-law 41.1 unless such candidate satisfies the candidate considerations set out in Bye-law 41.2 and would, if elected to the Supervisory Board, constitute an Unaffiliated Director. Notwithstanding any such candidate’s compliance with the candidate considerations set out in Bye-law 41.2, the Nominating Committee shall not be obliged to include any such candidate among those it puts forward to the Supervisory Board for proposal to the Members. Any such recommendations that, in the opinion of the Nominating Committee, satisfy the candidate considerations set out in Bye-law 41.2, shall be provided to the Search Consultant for inclusion in the Search Consultant's list of proposed candidates to become an Unaffiliated Director. 41.6 A maximum of two candidates suggested by Eligible Shareholders shall be considered by the Nominating Committee. If the Nominating Committee receives more than two suggested candidates from Eligible Shareholders in compliance with these Bye-laws, then the two candidates to be considered shall be determined by the size (from largest to smallest) of the Beneficial Ownership of the suggesting Eligible Shareholders of voting shares in the Company as at the Advance Notice Date. 41.7 Bye-law 41.5 provide the exclusive method for Members (other than Nominating Shareholders and their Affiliates) to suggest candidates for Unaffiliated Directors to the Nominating Committee. 41.8 Persons recommended by the Nominating Committee to become the three Unaffiliated Directors in accordance with this Bye-law 41 shall be proposed by the Supervisory Board for election as Unaffiliated Directors by the Members at the annual general meeting.