Translation from Russian
COPY APPROVED
by the Resolution of the General Meeting of Shareholders
(Minutes No.15 dated January 31, 2006)
Articles of Association
of
Oboronprom United Industrial Corporation
Open Joint-Stock Company
(Revised)
Moscow, 2006
1. General provisions.
1.1. OBORONPROM UNITED INDUSTRIAL CORPORATION Open Joint-Stock Company hereinafter referred to as the "Company" has been established on July 3, 2002 (Minutes No.1 dated July 3, 2002) in accordance with the Civil Code of the Russian Federation, Federal Law of the Russian Federation dated December 26, 1995 No. 208-FZ "On Joint Stock Companies" (hereinafter: Federal Law) and other legislative and legal acts of the Russian Federation. By Resolution of the General meeting of shareholders of the Company dated September 15, 2003 (Minutes No. 8 dated September 15, 2003) the Company has been reorganized from a closed joint stock company to an open joint stock company.
1.2. The Company shall be a legal entity and organize its business activity pursuant to the current laws of the Russian Federation and these Articles of Association. The Company shall be joint stock company and shall be entitled to conduct open subscription for the shares belonging to it and to effect free sales thereof subject to the requirements of the current laws of the Russian Federation.
1.3. Both Russian and foreign legal and natural persons can be the shareholders of the Company in accordance with the current Russian laws.
1.4. The Company can on a voluntary basis participate in unions, associations on conditions not contradicting with the antimonopoly legislation and to participate in the activity and otherwise cooperate with international public, cooperative, commercial and other organizations in the procedure provided for by the legislative acts of the Russian Federation.
1.5. The Company shall be entitled to open bank accounts in the territory of the Russian Federation and abroad within the established procedure. The Company shall have a round seal bearing its full company name in Russian and indication to its domicile. The Company shall be entitled to have stamps and letterheads with its name, its own emblem as well as a duly registered trade mark and other means of visual identification.
1.6. The Company shall effect the document turnover in accordance with the requirements of the current laws.
The Company, for the purposes of implementation of state, social, economical and tax policy, shall have the following rights and obligations:
1.7. The Company shall keep the following documents at the location of the General Director in the procedure and within the terms established by the federal executive body for the securities markets:
1.8. The Company must provide to the shareholders the access to the documents provided for by paragraph 1.7. hereof. The access to the accounting documents and minutes of the sessions of the Board of Directors shall be provided to the shareholder(s) owning in aggregate no less 25 % of the voting shares of the Company.
The documents provided for by paragraph 1.7. hereof shall be presented by the Company within 7 days upon a corresponding demand for familiarization in the premises of the executive body of the Company. The Company represented by the General Director must , upon request of the persons having the right of access to the documents present to them the copies of the above documents. The fees charged by the Company for presenting such copies shall not exceed the expenses for making thereof.
1.9. The term of the Company shall not be limited.
2. Name and location of the Company
2.1. The firm name of the Company in Russian:
2.2. The firm name of the Company in English:
2.3. The location of the Company and the location of the General Director of the Company: 27/3 ul. Stromynka, 107076 Moscow, Russian Federation.
In case the Company changes its location it shall notify the bodies of state registration of legal entities.
3. Purposes and subject of the Company’s activity
3.1. The principal purpose of the Company’s activity shall be making profit.
3.2. The principal types of the Company’s activity shall be:
- foreign trade activity related to the defense products (including supplies of major components, spare parts, assemblies, aggregates, accessories, special, training and auxiliary property for aviation and other defense technology) in the procedure determined by the decrees and orders of the President of the Russian Federation and other normative acts;
- foreign trade activity related to the civil and dual purpose products (including supplies of major components, spare parts, assemblies, aggregates, accessories, special, training and auxiliary property for aviation and other technology);
For achieving the principal purpose of its activity the Company shall be entitles to conduct any other types of economic activity with the exclusion of those prohibited by the laws of the Russian Federation.
3.3. The types of activity requiring special permissions (licenses) or special registration shall be conducted upon obtaining the correspondent special permissions (licenses) or due registration.
3.4. The Company shall have civil rights and bear obligations necessary for conducting any types of activity not prohibited by the laws of the Russian Federation.
4. LEGAL STATUS OF THE COMPANY
4.1. The Company shall acquire the rights of a legal person from the moment of its state registration.
The Company shall be a legal entity and have segregated assets recorded in its books of accounts. The Company may on its own behalf acquire and exercise property and personal nonproperty rights, bear obligations, be the complainant and the defendant at court.
4.2. The Company shall be liable for its obligations with all assets belonging to it. The Company shall not be liable for the obligations of its shareholders.
The shareholders shall not be liable for the Company's obligations and shall bear the risk of losses connected with its activity within the limits of the value of shares belonging to them. The shareholders who did not fully pay the shares shall bear joint responsibility for the obligations of the Company within the limits of the unpaid part of the value of the shares owned by them.
The state and its bodies shall not be liable for the obligations of the Company, likewise the Company shall not be liable for the obligations of the state and its bodies.
4.3. If inconsistency (bankruptcy) of the Company is caused by actions (inaction) of its shareholders or other persons entitled to give mandatory instructions to the Company or otherwise are able to determine its actions, the subsidiary responsibility shall be imposed on the above shareholders or other persons for its obligations in case of insufficiency of the Company’s assets.
The inconsistency (bankruptcy) of the Company shall be considered to be caused by actions (inaction) of its shareholders or other persons entitled to give mandatory instructions to the Company or otherwise are able to determine its actions only if they have used the above right and/or possibility for the purposes of the Company’s performing and action knowingly that it will result in inconsistency (bankruptcy) of the Company.
4.4. The Company can act as a founder, individually and jointly with other legal and natural bodies, of business partnerships and companies with the exclusion of the cases provided for by the laws of the Russian Federation.
4.5. The Company may establish branches and open representative offices in the territory of the Russian Federation subject to the requirements of these Articles, Federal Law and other federal laws.
The branches of the Company shall be its separate subdivisions, located outside the location of the Company and perform all the functions of the Company or part thereof including representation functions. The representative offices of the Company shall be its separate subdivisions, located outside the location of the Company, represent and protect the interests of the Company.
The branches and representative offices of the Company shall not be legal entities and conduct their activities pursuant to Regulations approved by the Board of Directors of the Company. The Company shall vest the established branches and representative offices with the property necessary for them to conduct their activity which shall be recorded in their separate balance sheets as well as on the Company’s balance sheet. The branches and representative offices shall carry on their activity on behalf of the Company. The Company shall be liable for the activity of the branch and the representative office.
4.6. Establishment of branches and opening representative offices by the Company outside the territory of the Russian Federation shall also be effected in accordance with the laws of the foreign state at the location of the branches and representative offices unless otherwise prescribed by an international agreement.
The decisions on establishment of branches and opening representative offices as well as on liquidation of them shall be taken by the Board of Directors of the Company. Based on these decisions amendments to the Articles of the Company shall be introduced.
The heads of the branches and representative offices shall be appointed by decision of the Board of Directors and shall act on the basis of power of attorney issued by the Company. The power of attorney to the head of a branch and the head of a representative office shall be issued on behalf of the Company by the General Director of the Company or the person substituting him/her.
4.7. The Company may have affiliated and dependent companies with the rights of a legal entity in the territory of the Russian Federation established in accordance with the current laws of the Russian Federation and outside the territory of the Russian Federation – in accordance with the laws of the foreign state where the dependent or affiliated companies are located unless otherwise prescribed by an international agreement of the Russian Federation.
The affiliated and dependent business companies shall not be liable for the obligations of the Company.
The Company shall be liable for the obligations of an affiliate business Company only in cases and in the procedure established by Article 105 of Part one of the Civil Code of the Russian Federation and article 6 of the Federal Law.
4.8. The Company shall independently plan its production and economic activity. The bases for the plans shall be the contracts concluded with products and services consumers and with the suppliers of material, technical and other resources.
4.9. The Company shall be entitled to enter into labor contracts with employees employed for permanent and temporary work in the Company. The relations arising between the Company and the employees shall be regulated by the labor contracts and by the labor laws of the Russian Federation.
Involving foreign labor force for work in the Company shall be performed in accordance with the laws regulating involvement and use of foreign labor force in the territory of the Russian Federation. The Company shall be entitled to involve specialists for carrying out special types of work under civil law contract. The Company shall independently establish the system, forms and the amount of payment for labor. The Company shall ensure abidance by the norms and the rules for labor safety established by law.
5. Authorized capital, securities and net assets of the Company
5.1. The authorized capital of the Company is made up of the nominal value of the Company’s shares and amounts to 4,299,644,000 (four billion two hundred and ninety-nine million six hundred and forty-four thousand) rubles and consists of 4,299,644 (four million two hundred and ninety-nine thousand six hundred and forty-four) shares with a par value of 1000 (one thousand) rubles.
The authorized capital determines the minimal amount of the Company’s assets guaranteeing the interests of its creditors.
5.2. The Company shall be entitled to place additionally to the placed shares ordinary registered shares in the amount of 997,142,356 (nine hundred and ninety-seven million forty-two thousand three hundred and fifty-six) with a par value of 1000 (one thousand) rubles each.
5.3. The decision on increase the Authorized capital of the Company by increase of the nominal value of the share shall be taken by the General meeting of shareholders of the Company (hereinafter: "Meeting").
5.4. The decision on increase of the Authorized capital of the Company by placing additional shares shall be taken by the General meeting of shareholders.
5.5. Placement of shares (equity securities of the Company convertible into shares) by closed subscription shall be effected only by decision of the Meeting on increase of the Authorized capital of the Company by placing additional shares (on placement of equity securities of the Company convertible into shares) passed by a majority of three-fourth of the votes of the shareholders – owners of voting shares, taking part in the Meeting.
5.6. Placement by open subscription of ordinary shares constituting more than 25 % of earlier placed ordinary shares shall be effected only by decision of the Meeting passed by majority of three-fourth of the votes of the shareholders – owners of voting shares, taking part in the Meeting.
5.7. Placement by open subscription of equity securities convertible into ordinary shares which may be converted into ordinary shares constituting more than 25 % of earlier placed ordinary shares shall be effected only by decision of the Meeting passed by majority of three-fourth of the votes of the shareholders – owners of voting shares, taking part in the Meeting.
5.8. The payment for the shares can be effected by money, securities and other things and property rights or any other rights having money value.
5.9. In case the shares of the Company are paid with nonmonetary assets the money value of the property contributed as payment shall be performed by the Board of Directors of the Company in accordance with the Federal Law, other laws and normative legal acts of the Russian Federation.
5.10. The reduction of the Authorized capital by way of acquirement and repurchase of part of the shares shall be allowed. The Company shall be entitled to acquire the shares places by it by decision of the Meeting on reduction of the authorized capital of the Company by way of acquirement of part of placed shares for the purpose of reduction of their total number. The Company shall be entitled to acquire the shares placed by it by decision of the Board of Directors of the Company.
5.11. The decision of the Company on reduction of the Authorized capital by way of reduction of the nominal value of shares or by way of acquirement of a part of the shares for the purpose of reduction of their total number shall be taken by the Meeting.
5.12. In case of acquirement by the Company of placed shares pursuant to decision of the Meeting on reduction of the Authorized capital of the Company by acquirement of part of the shares for the purposes of reduction of their total number the payment for the acquired shares may be effected by decision of the Meeting by money, securities and other things or property rights or other rights having money value.
5.13. The Company shall be entitled to place bonds and other equity securities provided for by the legal acts of the Russian Federation on securities. The placement by the Company of bonds and other equity securities shall be performed by decision of the Board of Directors of the Company.
5.14. In the decision to issue bonds, the form, terms and other conditions of repurchase of the bonds shall be determined. The bond shall have a nominal value. The nominal value of all the bonds issued by the Company shall not exceed the amount of the Authorized capital of the Company or the amount of the security provided to the Company by third parties for the purpose of issuance of bonds. Placement of bonds by the Company shall be allowed upon full payment of the Authorized capital of the Company.
5.15. The Company may place bonds with a lumpsum redemption term or bonds with the term of redemption by series within definite terms. The redemption of the bonds can be effected in monetary form or other property in accordance with the decision on issuance of the bonds.
The Company shall be entitled to place bonds secured by pledge of a certain assets of the Company, or bonds against security provided to the Company for the purpose of issuance of bonds by third parties, as well as bonds without security. Placement of bonds without security shall be allowed not earlier than the third year of the Company’s existence and on condition of due approval by this time of two annual balance sheets of the Company.
5.16. The bonds can be registered and bearer ones. While issuing registered bonds the Company is obliged to keep a register of their owners. A lost registered bond shall be resumed by the Company for a reasonable charge fixed by the General Director of the Company. The rights of the owner of the lost bearer bond shall be restored by court on the procedure established by the Code of procedures of the Russian Federation.
If the possibility of early redemption of bonds if so desired by their owners is stipulated by the decision of the Board of Directors of the Company on issuance of bonds, in this decision the redemption cost and the term upon which the bondholders can exercise the early redemption option shall be stipulated.
5.17. A reserve fund shall be created in the Company in the amount of 5 (five) per cent of its Authorized capital. The reserve fund of the Company shall be meant for covering losses as well as for redemption of bonds and repurchase of shares of the Company in case of absence of other resources. The reserve fund cannot be used for other purposes.
5.18. A shareholder – owner of ordinary shares shall be entitled to:
Implementation by the shareholders – owners of ordinary shares of their rights shall be effected in the procedure established by these Articles and current legislation.
5.19. The shareholders of the Company shall be obliged:
5.20. The net asset value of the Company shall be estimated on the basis of the accounting data in the procedure established by the Ministry of Finance of the Russian Federation and the Federal service for the securities market.
If at the end of the second and every consequent fiscal year in accordance with the annual accounting balance submitted for approval to the shareholders of the Company or the results of the audit the net assets value of the Company turns out to be smaller than its Authorized capital, the Company shall be obliged to declare the reduction of its Authorized capital to the amount not exceeding its net assets value.
If at the end of the second and every consequent fiscal year in accordance with the annual accounting balance submitted for approval to the shareholders of the Company or the results of the audit the net asset value of the Company turns out to be smaller than the minimal Authorized capital established by article 26 of the Federal Law, the Company shall be obliged to take decision on its liquidation, and if such decision is not taken within a reasonable period of time the creditors shall be entitled to demand from the Company early termination or early performance of its obligations and indemnification of damages to them. In these cases the body performing state registration of legal entities or other state or municipal bodies shall be entitled to submit to a court the application on liquidation of the Company if such right is granted to them by the federal law.
5.21. The Company shall not be entitled to issue shares and other securities for covering the losses related to the activity of the Company.
6. Placement of shares and other securities by the Company
6.1. The payment for the equity securities placed by subscription shall be effected at the price fixed by the Board of Directors of the Company in accordance with article 77 of the Federal Law. At that the payment for the equity securities convertible into shares placed by subscription shall be effected at the price no less than the nominal value of the shares into which such securities are converted.
The amount of consideration to the broker participating in placement of additional shares or equity securities of the Company by subscription shall not exceed 10 per cent of the placement price of these shares or securities.
6.2. The Company shall be entitled to place additional shares and other equity securities by subscription and conversion.
7. Dividends of the Company
7.1. The Company shall be entitled on the basis of the results of the first quarter, half a year, nine months of a fiscal year or on the basis of the results of a fiscal year to take decisions on (declare) payment of dividends upon placed shares unless otherwise is established by the Federal Law. The decision on the payment (declaration) of dividends on the basis of the results of the first quarter, half a year, nine months of a fiscal year can be taken within three months after the end of the correspondent period.
The dividends shall be paid in money from the net profit of the Company.
The decisions on payment (declaration) of dividends including the decisions on the amount of the dividend and the form of its payment shall be taken by the General meeting of shareholders. The amount of the dividends cannot exceed the one recommended by the Board of Directors of the Company. The term of payment shall not exceed 60 days from the date of taking decision on payment of dividends.
The list of persons entitled to draw dividends shall be compiled as of the date of compiling the list of persons entitled to participate in the General meeting of shareholders at which the decision on payment of the correspondent dividends is taken. For compiling the list of persons entitled to receive dividends the nominee shareholder shall present the data on the persons on behalf of which he holds shares.
7.2. The Company shall not be entitled to take decision on (declare) payment of dividends upon shares:
7.3. The Company shall not be entitled to pay the declared dividends upon shares:
Upon cessation of the circumstances specified in this paragraph the Company shall be obliged to pay the declared dividends to the shareholders.
8. Register of shareholders of the Company
8.1. The Company shall ensure keeping and custody of the register of shareholder in accordance with the legal acts of the Russian Federation form the moment of state registration of the Company.
In the register of shareholders of the Company the data on each registered person, number and categories (types) of shares recorded in the name of each registered person and other information provided for by the legal acts of the Russian Federation shall be specified.
8.2. The registrar shall be the holder of the register.
9. Management and control structure of the Company
9.1. The following shall be the managing bodies of the Company:
The Internal Audit Commission shall be the controlling body of the Company.
9.2. The Board of Directors, the Internal Audit Commission and the General Director shall be elected by the General meeting of shareholders in the procedure provided for by these Articles.
10. The General meeting of shareholders
10.1. The Meeting shall be the superior managing body of the Company. The Company shall hold an Annual Meeting yearly.
The Annual Meeting shall be held not earlier than two months and not later than six months after the end of the fiscal year. At the General meeting of shareholders the issues on election of the Board of Directors, Internal Audit Commission of the Company and approval of the Company’s auditor and the issues provided for by the subitem 11 of paragraph 10.6 hereof shall be settled as well as other issues within the competence of the Meeting.
All meetings other than the Annual Meeting shall be deemed extraordinary.
10.2. The shareholder(s) holding at least 2 % of voting shares of the Company shall be entitled to propose items to the agenda of the Annual and extraordinary Meetings, as well as to nominate the candidates for election to the Board of Directors and the Internal Audit Commission of the Company within the limits established by the Federal Law. The proposals to the agenda of the annual Meeting and the list of the nominated candidate(s) to the Board of Directors and the Internal Audit Commission of the Company shall be submitted to the Company not later 45 days after the end of the fiscal year. The proposal of the shareholder(s) to nominate the candidates to the Board of Directors and the Internal Audit Commission of the Company (hereinafter: "Internal Audit Commission") shall, alongside with the information specified in paragraph 4 of article 53 of the Federal Law contain the following information on the candidates:
10.3. In course of preparation of the Meeting, the Board of Directors of the Company (and in cases provided by the Federal Law – other persons) determines:
10.3.1. the form of the Meeting (meeting or absentee vote);
10.3.2. the date, place and time of the Meeting or in case of holding the meeting in the form of absentee voting, the last date of acceptance of voting ballots and the mailing address to which the filled in ballots shall be forwarded;
10.3.3. the date of compiling the list of persons entitled to participate in the Meeting;
10.3.4. the agenda of the Meeting;
10.3.5. the procedure of notification the shareholders on holding the Meeting;
10.3.6. the list of information (materials), presented to the shareholders in course of preparation of the General meeting and the procedure of presentation thereof;
10.3.7. the form and the text of the voting ballot;
10.3.8. time limits of the Meeting (total duration, breaks, time for reports and presentation on each item and for discussion of each item and other).
10.4. The following shall be included in the notification of the Meeting:
10.4.1. full name and location of the Company;
10.4.2. form of the Meeting (meeting or an absentee vote);
10.4.3. date, place, and time of holding and in case the Meeting is held in the form of absentee vote, the last date of acceptance of voting ballots and the mailing address to which the filled in ballots shall be forwarded;
10.4.4. the date of compiling the list of persons entitled to participate in the Meeting;
10.4.5. The agenda of the Meeting specifying the persons who proposed the correspondent item to the agenda of the Meeting;
10.4.6. The procedure of familiarization with the information (materials) to be presented in course of preparation of the Meeting and the address(es) at which one can familiarize with it.
10.5. The information (materials) to be presented to the persons entitled to participate in the Meeting in course of preparation of the Meeting shall include the annual accounting reports, including the auditor’s opinion, opinion of the Internal Audit Commission on the results of the audit of the annual accounting reports, data on candidates to the Board of Directors of the Company, Internal Audit Commission, draft modifications and amendments to the Articles of the Company, or draft Articles of the Company as amended, draft internal documents of the Company, draft resolutions of the Meeting, annual report of the Company.
The data on the candidates to the Board of Directors of the Company and Internal Audit Commission shall include the information specified in paragraph 10.2.
10.6. The following shall be within the competence of the Meeting:
The issues within the competence of the Meeting of shareholders cannot be referred for settlement to the Board of Directors with the exclusion of the issues provided for by the Federal Law.
10.7. The decision of the Meeting on an issue put to vote shall be taken by the majority of votes of the shareholders participating in the Meeting unless otherwise established by the Federal Law.
The decision on the issues specified in subitems 2,6,7 and 14-19 of paragraph 10.6. hereof shall be taken by the Meeting at the proposal of the Board of Directors. The decisions on the issues specified in subitems 1-3,5 and 17 of paragraph 10.6. hereof shall be taken by the general Meeting by the majority of three fourth of the votes of the shareholders – holders of voting shares taking part in the Meeting.
The procedure of taking the decision by the Meeting in accordance with the procedure of holding the Meeting shall be established by the internal documents of the Company approved by the decision of the Meeting. The Meeting shall not be entitled to take decisions on the issues not included in the agenda and to alter the agenda.
A shareholder shall be entitled to appeal to a court against the decision passed by the Meeting in breach of the requirements of the Federal Law, other legal acts of the Russian Federation, Company’s Articles of Association if he did not participate in the General meeting of shareholders or voted against taking such decision and his rights and legal interests had been violated by such decision. Such application can be filed within 6 months from the date the shareholder knew or had to know about the passed decision.
10.8. The list of persons entitled to participate in the Meeting shall be compiled on the basis of the data of the register of shareholders of the Company.
The date of compiling the list of persons entitled to participate in the Meeting cannot be fixed earlier than the date of taking the decision on holding the Meeting and more than 50 days before and in cases provided for by paragraph 2 of article 53 of the Federal Law – more than 65 days before holding the Meeting. In case of holding the meeting where the quorum is determined by the voting ballots received by the Company in accordance with paragraph 2 of article 58 of the Federal Law the date of compiling the list of persons entitled to participate in the Meeting cannot be fixed earlier than 45 days before holding the Meeting.
The list of persons entitled to participate in the Meeting shall be presented by the Company for familiarization upon demand of the persons included in that list and holding no less 1 per cent of votes (provided the data of the documents and the mailing address of natural persons included in that list shall be presented only upon their consent). Upon request of any interested person the Company shall within three days present to him the abstract of the list of persons entitled to participate in the Meeting containing the data on such person or the certificate stating that the person is not included on the above list.
10.9. The notice on holding the Meeting shall be made not earlier 20 days in advance and where the agenda contains the issue on reorganization of the Company – no later 30 days before the date of holding the Meeting. In case provided by paragraph 2 of article 53 of the Federal Law "On joint stock companies" the notice on holding an extraordinary Meeting shall be made not later 50 days before the date of holding the meeting.
Within the above terms the notice on holding the Meeting shall be forwarded to each person specified in the list of persons entitled to participate in the Meeting by registered mail or served to each of the above persons against signature or published in a periodical.
The following shall be included in the notice of the Meeting:
10.10. The information (materials) to be presented to the persons entitled to participate in the Meeting in course of preparation to the Meeting shall include the annual accounting reports, including the auditor’s opinion, opinion of the Internal Audit Commission on the results of the audit of the annual accounting reports, data on the candidate(s) to the executive bodies, Board of Directors, Internal Audit Commission, draft modifications and amendments to the Articles of the Company or draft Articles of the Company as amended, draft internal documents of the Company and draft resolutions of the Meeting.
The list of additional information (materials) to be obligatory presented to the persons entitled to participate in the Meeting in course of preparation of the Meeting may be established by the federal executive body for the securities market.
The information (materials) provided for by this article shall be presented within 20 days and where the agenda contains the issue on reorganization of the Company within 30 days before holding the Meeting as well as it shall be easily accessible for familiarization to the persons entitled to participate in the Meeting, in the premises of the executive body of the Company and other places which addresses shall be included in the notices on the Meeting. The Company shall upon demand of a person entitled to participate in the Meeting present him the copies of the above documents.
10.11. The shareholder(s) holding in aggregate at least 2 % of voting shares of the Company shall be entitled to include items to the agenda of the annual Meeting, and to nominate candidates to the position of the General Director as well as candidates to the Board of Directors, Internal Audit Commission and the Counting commission of the Company in the number not exceeding the numerical structure of the correspondent body (such proposals shall be submitted to the Company no later 45 days after the end of a fiscal year).
10.12. The Board of Directors shall consider the submitted proposals and take decision to include them or to refuse to include them into the agenda of the Meeting no later than five days upon expiration of the terms fixed by paragraph 10.11. The item proposed by a shareholder(s) shall be included in the agenda of the Meeting likewise the nominated candidates shall be included in the list of the candidates for voting for election to the correspondent body of the Company with the exclusion if:
A motivated decision of the Board of Directors to refuse to include the proposed item in the agenda or the candidate to the list of candidates for voting for election to the correspondent body of the Company shall be forwarded to the shareholder(s) who proposed the item or nominated the candidate no later than three days upon taking such decision. The above decision as well as avoidance by the Board of Directors of taking the decision may be appealed to a court. The Board of Directors shall not be entitled to alter the formulations of the issues proposed for inclusion into the agenda of the Meeting and the formulations of the decisions on such issues.
Alongside with the issues proposed for inclusion into the agenda of the Meeting by the shareholders as well as in case of absence of such proposals, absence or insufficient number of candidates proposed by the shareholders for formation of a correspondent body, the Board of Directors shall be entitled to include in the agenda the issues or candidates to the list candidates at its own discretion.
10.13. In the course of preparation of the meeting the Board of Directors shall determine:
The issues on election of Board of Directors, Internal Audit Commission of the Company, approval of the auditor as well as the issues provided for by subitem 11 of paragraph 10.6. hereof must be included in the agenda of the annual Meeting.
10.14. An extraordinary Meeting shall be held by decision of the Board of Directors at its own initiative upon request of the Internal Audit Commission of the Company or the auditor as well as of shareholder(s) holding in aggregate no less 10 per cent of the voting shares of the Company as of the date of filing the request (hereinafter: "persons requesting convening the Meeting").
An extraordinary Meeting convened by the Board of Directors upon request of the persons requiring to convene the Meeting shall be held within 40 days upon submitting the request to hold the Meeting.
In cases where in accordance with articles 68-70 the Board of Directors must take decision on holding an extraordinary Meeting, it shall be held within 40 days upon taking such decision by the Board of Directors.
The Board of Directors shall not be entitled to alter the formulations of the issues of the agenda, the formulations of the decisions on such issues and to alter the proposed form of holding an extraordinary Meeting convened at the request of the persons requesting convening the Meeting.
Alongside with the issues proposed for inclusion into the agenda of the Meeting by the shareholders as well as in case of absence of such proposals, absence or insufficient number of candidates proposed by the shareholders for formation of a correspondent body, the Board of Directors shall be entitled to include in the agenda of the Meeting the issues or the candidates to the list candidates at its own discretion.
10.15. Within five days from the date of request of the persons requesting convening the Meeting the Board of Directors shall take decision to convene the Meeting or to refuse it.
The decision to refuse to convene an extraordinary Meeting upon request of a persons requesting convening the Meeting can be taken if:
The decision of the Board of Directors to convene an extraordinary Meeting or a motivated decision to refuse to convene it, shall be forwarded to the persons requesting to convene it within three days upon taking such decision. The decision of the Board of Directors to refuse to convene an extraordinary Meeting can be appealed to a court.
If within the fixed period the Board of Directors does not take decision to convene the meeting or to refuse it, the extraordinary Meeting can be convened by the persons requesting to convene it. At that the persons convening the extraordinary Meeting shall have the powers necessary for convening and holding the meeting as provided for by the Federal Law. In this case the expenses for preparation and holding the Meeting can be reimbursed by decision of the Meeting at the expense of the Company.
10.16. The right to participate in the Meeting shall be exercised by a shareholder personally or by proxy. A shareholder shall be entitled at any time to replace its proxy at the Meeting or personally participate in the Meeting.
The shareholder’s proxy at the Meeting shall act in accordance with the powers based on the requirements of the federal laws and acts of the authorized state or municipal bodies or power of attorney executed in writing. The power of attorney for the right to vote shall include the data on the represented person and the (name, place of residence or location, passport data). The power of attorney for the right to vote shall be executed in accordance with paragraphs 4 and 5 of Article 185 of the Civil code of the Russian Federation or certified by a notary.
In case a share is transferred upon compiling the list of persons entitled to participate in the Meeting and before the date of holding the Meeting, the person included in the list shall be obliged to issue to the transferee the power of attorney for the right to vote or vote at the Meeting in accordance with the requirements of the transferee. The above rule shall be applied to each consequent case of transfer of shares.
If a share of the Company is jointly owned by several persons the voting powers at the Meeting shall be exercised at their discretion by one of the members of joint interest or by their common proxy. The powers of each of the above persons shall be duly formalized.
10.17. The Meeting shall be competent (have the quorum) if the shareholders holding in aggregate more than half of the votes of the placed voting shares took part in the Meeting. The shareholders registered for participation in the meeting shall be deemed as those who took part in the Meeting as well as the shareholders whose voting ballots were received no later than two days before the date of the Meeting. The shareholders whose voting ballots were received on or before the last date of acceptance of the voting ballots shall be deemed as those who took part in the Meeting.
If the quorum is present as of the moment of the declared time of the beginning of the Meeting the registration of shareholders and admission of them to the Meeting shall be finished. In case of absence of the quorum as of the moment of the declared time of finishing the registration it can be extended by one hour.
In case of absence of the quorum for holding an Annual general meeting of shareholders an adjourned general meeting of shareholders shall be held with the same agenda. In case of absence of the quorum for holding an extraordinary general meeting an adjourned general meeting of shareholders may be held with the same agenda.
The decision on holding an adjourned Annual general meeting of shareholders shall be taken by the Board of Directors. The decision on holding an adjourned extraordinary general meeting of shareholders shall be taken as the Board of Directors may think it fits.
The notice on holding an adjourned general meeting of shareholders shall be made in accordance with the requirements of article 52 of the Federal Law. Whereby the provisions of subitem 2 of paragraph 1 of article 52 shall not apply. Service and forwarding of the voting ballots for holding an adjourned general meeting of shareholders shall be performed in accordance with the requirements of article 60 of the Federal Law.
10.18. The voting at the General meeting shall be effected in accordance with the principle "one voting share of the Company – one vote"
The following shall not grant the right to vote:
10.19. If the meeting is held in the form of absentee vote the voting on the issues of the agenda shall be effected only by voting ballots. In other cases it may also be effected by voting ballots.
The voting ballot shall be served against signature to each person specified in the list of persons entitled to participate in the Meeting (its proxy) registered for participation in the Meeting. If the Meeting is held in the absentee form the voting ballot shall be forwarded by registered mail or served against signature to the above persons no later 20 days before holding the General meeting of shareholders.
If the Meeting is held in the absentee form the persons entitled to participate in the Meeting (their proxies), who received the voting ballots shall be entitled to take part in the Meeting or to forward the filled in voting ballots to the Company. At that in determining the quorum and in the tally of votes the votes represented by the voting ballots received no later than two days before the date of holding the meeting shall be considered.
10.20. On the basis of the results of voting the Counting commission or the person performing its functions shall within 15 days upon the date of finishing to receive the voting ballots when the meeting is held in the form of absentee voting, make up a protocol on the results of voting signed by the members of the Counting commission or the person performing its functions. The protocol on the results of voting shall be attached to the minutes of the Meeting.
The decisions taken by the meeting as well as the results of voting shall be announced at the Meeting where the voting took place or shall be notified within 10 days upon make up the protocol on the results of voting in the form of the report on the result of voting to the persons included in the list of persons entitled to participate in the Meeting in the procedure provided for notification on holding the Meeting.
The minutes of the General meeting of shareholders shall be made up in two copies within 15 days upon closing the meeting. Both copies shall be signed by a person chairing the Meeting and the secretary of the Meeting. Upon making up the protocol on the results of voting and signature of the minutes of the Meeting, the voting papers shall be sealed by the Counting commission or the person performing its functions and handed over to the archive of the Company where they shall be kept until cessation of Company’s activity.
10.21. The meeting shall be chaired by the Chairman of the Board of Directors or his deputy. If necessary the Meeting shall be entitled to appoint one of the persons present at the Meeting of shareholders of the Company Chairman of the Meeting.
11. Board of Directors
11.1. The Board of Directors shall perform the general management of the Company’s activity. The competence of the Board of Directors shall include settlement of the issues of the general management of the Company’s activities excluding the issues referred by the Federal Law to the competence of the Meeting.
The following issues shall be within the competence of the Board of Directors:
11.2. The resolutions at the session of the Board of Directors shall be taken by the majority of votes of the members of the Board of Directors participating in the session unless otherwise provided for by the Federal Law, these Articles or its internal document determining the procedure of convening and holding the sessions of the Board of Directors. While determining the quorum for the meeting and the results of voting a written opinion of a member of the Board of Directors absent at the session of the Board of Directors may be considered.
While resolving issues at the session of the Board of Directors each member of the Board of Directors shall have one vote.
The transfer of the right to vote by a member of the Board of Directors to another person, including another member of the Board of Directors shall not be allowed.
Minutes shall be held at the session of the Board of Directors of the Company. The minutes of the session of the Board of Directors of the Company shall be made up within three days upon holding the session. The minutes of the session of the Board of Directors of the Company shall be signed by the person chairing the session who is responsible for the accuracy of the minutes.
11.3. The presence of 5 (five) elected members of the Board of Directors of the Company shall make the quorum for holding the session of the Board of Directors of the Company.
In case the number of members of the Board of Directors of the Company becomes less than a half of the number provided for by the Company’s Articles, the Company must convene an extraordinary General Meeting of shareholders for election the new structure of the Board of Directors of the Company. The remaining members of the Board of Directors shall be entitled to take decisions only on convening of such extraordinary General Meeting of shareholders.
11.4. Only a natural person can be a member of the Board of Directors. The persons elected to the Board of Directors can be reelected unlimited number of times. The General Director of the Company cannot be the chairman of the Board of Directors at the same time.
11.5. The members of the Board of Directors shall be elected by the annual General Meeting of shareholders in the number of 9 (nine) persons for the term until the next annual General meeting of shareholders.
11.6. The persons younger than 25 and older than 65 cannot be elected to the Board of Directors. The candidates to the Board of Directors shall have higher education and general labor experience of no less 3 (three) years.
11.7. The members of the Board of Directors of the Company shall be elected by the cumulate voting.
12. General Director of the Company
12.1. The management of the current activity of the Company shall be performed by the General Director who shall report to the Board of Directors and the Meeting.
The General Director shall be elected by the General meeting of shareholders for the term until the General meeting of shareholders to be held in 5 (five) years.
In case of early termination of the powers of the General Director the powers of the newly elected General Director shall be effective until formation of the sole executive body of the Company by the annual General meeting of shareholders following five years after the General meeting of shareholders where the General Director whose powers have been terminated, had been elected.
By decision of the General meeting the powers of the General Director can be delegated under agreement to a commercial organization (managing organization) or to an individual entrepreneur (manager). The decision on delegation of the powers to the managing organization or to the manager shall be taken by the General meeting only at the proposal of the Board of Directors.
12.2. The issues related to the management of the current Company’s activity shall be within the competence of the General Director excluding the issues referred to the competence of the General meeting or the Board of Directors. The General Director shall organize implementation of the decisions of the General meeting and the Board of Directors.
The General Director shall act without power of attorney on behalf of the Company including the following:
12.3. The election of the General Director and early termination of his powers shall be effected by decision of the General Meeting of shareholders. The General Meeting of shareholders shall be entitled at any time to take decision on early termination of the powers of the General Director and appointment of a new General Director.
The rights and obligations of the General Director, of the managing organization or the manager performing management of the current activity of the Company shall be determined by the Federal Law, other legal acts of the Russian Federation and the contract entered into by each of them with the Company.
The General Director shall bear personal liability for organization of works and creation of conditions for protection of state secret, for cases of non-abidance by the limits established by law in relation to the data constituting state secret in the Company.
13. Responsibility of the members of the Board of Directors and the General Director of the Company.
13.1. The members of the Board of Directors, the General Director likewise the managing organization or the manager while executing their rights and performance of obligations shall act in behalf of the Company, exercise their rights and perform obligations in relation to the Company in good faith and reasonably and be liable to the Company for the losses caused to the Company by their wrongful actions (inactions) unless other grounds and extent of the responsibility are specified by the current laws of the Russian Federation.
At that the members of the Board of Directors who voted against the decision which resulted in the Company’s losses or did not take part in the voting shall not bear responsibility. When determining the grounds and the extent of the responsibility of the above persons the normal conditions of business intercourse and other essential circumstances shall be taken into account. Where several persons bear responsibility in accordance with the provisions of these article their responsibility shall be joint.
13.2. The Company or the shareholder(s) holding in aggregate no less than 1 per cent of placed ordinary shares of the Company shall be entitled to appeal to a court against the above persons with a claim for compensation of losses caused to the Company in case provided for by this Article.
The representatives of the state or a municipal formation in the Board of Directors shall bear the responsibility provided for by this Article together with other members of the Board of Directors.
14. Control over the financial and economic activity of the Company
14.1. An Internal Audit Commission consisting of 3 (three) individuals shall be elected by the General meeting of shareholders in accordance with the Articles of Association for the control over the financial and economic activity of the Company.
By decision of the Meeting, the Internal Audit Commission of the Company can be remunerated or the expenses related to performance of their duties may be compensated within the period of performance of their duties. The amount of remunerations and compensations shall be fixed by the decision of the Meeting.
The following shall be within the competence of the Internal Audit Commission:
14.2. The audit (revision) of the financial and economic activity of the Company shall be effected on the basis of the results of the Company’s activity for the year as well as at any time at the initiative if the Internal Audit Commission of the Company, by decision of the General meeting of shareholders, the Board of Directors of the Company or upon request of the shareholder(s) holding in aggregate no less 10 (ten) per cent of the voting shares of the Company.
14.3. Upon request of the Internal Audit Commission the persons occupying positions in the management bodies of the shall present the documents on financial-economic activity of the Company. The Internal Audit Commission of the Company shall be entitled to require convening an extraordinary General meeting of shareholders in accordance with these Articles.
14.4. The members of the Internal Audit Commission cannot be members of the Board of Directors of the Company at the same time and occupy other positions in the management bodies of the Company.
The shares held by the members of the Board of Directors or by the persons occupying positions in the management bodies of the Company cannot participate in voting when electing the Internal Audit Commission of the Company.
14.5. The Company must create all necessary conditions for the normal work of the Internal Audit Commission (provide premises, documents, transport, the necessary office equipment etc.)
14.6. The auditor (an individual or an auditing organization) of the Company shall perform the audit of the financial and economic activity of the Company in accordance with the laws of the Russian Federation on the basis of the contract concluded with him/it.
The auditor of the Company shall be approved by the General meeting of shareholders and the amount of payment for its services shall be fixed by the Board of Directors of the Company.
14.7. On the basis of the results of the audit of the financial and economic activity of the Company the Internal Audit Commission or the auditor shall make up an opinion where the following shall be included:
15. Acquirement and repurchase of the placed shares.
15.1. The Company shall be entitled to acquire the shares placed by it with the decision of the Meeting on reduction of the Authorized capital of the Company by acquirement of part of placed shares for the purpose of reduction of their total number. The Company shall not be entitled to take decision on reduction of the Authorized capital of the Company by acquirement of part of placed shares for the purpose of reduction of their total number if the nominal value of the shares remaining in circulation will be less than the minimal amount of the Authorized capital provided for by the Federal Law.
The shares acquired by the Company pursuant to the decision passed by the Meeting on reduction of the Authorized capital of the Company by acquirement of shares for the purpose of reduction of their total number, shall be redeemed upon acquirement.
The Company shall be entitled to acquire the shares placed by it by decision of the Board of Directors. The shares acquired in this way shall not grant the right to vote, they are not considered in counting of votes and no dividends shall be accrued upon them. Such shares must be disposed of at their market value no later than one year upon the date of acquisition. Otherwise the General meeting of shareholders shall take the decision on reduction of the Authorized capital of the Company by redemption of the above shares. The Company shall not be entitled to take decision on acquisition by the Company of shares if the nominal value of the Company’s shares in circulation will be less than 90 per cent of the Authorized capital of the Company.
15.2. The decision on acquisition of shares shall determine the number of the shares acquired by the Company, acquisition price, form and term of payment and the term within which the acquirement of shares shall be effected.
Unless otherwise determined by the decision on acquisition, the payment for the acquisition of shares shall be effected with money. The term within which the acquirement of shares shall be performed shall not be less 30 days. The acquisition price shall be determined in accordance with article 77 of the Federal Law.
Each shareholder holding the shares, the decision on acquirement of which had been taken, shall be entitled to sold the above shares, and the Company must acquire them. If the total number of shares in respect of which the applications on their acquirement by the Company had been submitted exceeds the number of shares which may be acquired by the Company taking into account the limitations established by this Article the shares shall be acquired from the shareholders proportionally to the submitted requests.
No later than 30 days before the beginning of the term within which the acquisition of shares shall be effected, the Company shall notify the shareholders holding the shares the decision on acquisition of which had been taken. The notice shall contain the information stated in the first paragraph of this article.
The Company shall not be entitled to acquire the ordinary shares placed by it in cases specified in the Federal Law.
15.3. By decision of the Meeting, the Company shall be entitled to consolidate the placed shares as the result of which two of more shares of the Company are converted into one new share of the same category (type). At that the corresponding amendments related to the nominal value and the number of the placed and declared shares of the Company of the correspondent category (type) shall be introduced to the Articles of the Company.
By decision of the Meeting, the Company shall be entitled to split the placed shares as the result of which one share of the Company is converted into two or more shares of the Company of the same category (type). At that the corresponding amendments related to the nominal value and the number of the placed and declared shares of the Company of the correspondent category (type) shall be introduced to the Articles of the Company.
15.4. The shareholders holding voting shares shall be entitled to require repurchase by the Company of all or part of the shares owned by them in case of:
The list of shareholders entitled to require repurchase by the Company of the shares held by them shall be compiled on the basis of the register of shareholders of the Company as of the date of compiling the list of persons entitled to participate in the meeting which agenda includes the issues the voting on which in accordance with the Federal Law can result in the right to require the repurchase of shares.
The repurchase of shares shall be effected at the price determined by the Board of Directors but not lower than the market value which shall be determined by an independent appraiser without taking into account its change as the result of actions of the Company which resulted in arising of right to require appraisal and repurchase of shares.
The repurchase of the shares by the Company shall be effected in accordance with article 76 of the Federal Law.
16. Major transactions of the Company. Interest in the Company’s transaction execution.
16.1. A major transaction shall be considered the transaction (including loan, credit, pawn, pledge) of several interrelated transactions connected with acquirement, disposal, or the possibility of disposal by the Company directly or indirectly of assets with the value amounting to 25 or more per cent of the balance cost of the Company’s assets determined by the accounting reporting data as of the last reporting date with the exclusion of transactions made in the process of normal business activity of the Company, the transactions related to placement by subscription (sales) of ordinary shares of the Company and the transactions related to placement of equity securities convertible into ordinary shares of the Company.
In case disposal or the creation of possibility of disposal of the property, the value of such property determined by the accounting data shall be compared with the balance cost of the Company’s assets and in case of acquirement of property – the acquisition price.
For passing the resolution on approval of a major transaction by the Board of Directors and the Meeting, the price of the disposed or acquired property (services) shall be determined by the Board of Directors in accordance with Article 77 of the Federal Law.
16.2. A major transaction shall be approved by the Board of Directors or the Meeting in accordance with this article.
The decision on approval of a major transaction the subject of which is the property with the value from 25 to 50 per cent of the balance cost of the Company’s assets, shall be approved unanimously by all members of the Board of Directors where the votes of the withdrawn members of the Board of Directors shall not be considered. If the unanimity of the Board of Directors on the issue of approval of a major transaction is not reached, the issue of approval of a major transaction can be referred to the Meeting. In this case the decision on approval of a major transaction shall be taken by the Meeting by the majority of votes of the shareholders holding voting shares taking part in the Meeting.
The decision on approval of a major transaction the subject of which is the property with the value more then 50 per cent of the balance cost of the Company’s assets shall be taken by the Meeting by the majority of three-fourth of votes of the shareholders holding voting shares taking part in the Meeting.
In case a major transaction is at the same time the transaction where interest takes place, only the provisions of Chapter XI of the Federal Law shall apply to the procedure of making this transaction.
A major transaction made in breach of the requirements of this article can be declared invalid at the suit of the Company or a shareholder.
17. Reorganization of the Company
17.1. The Company may be voluntarily reorganized in the procedure provided for by the Law and these Articles. Other grounds to and the procedure of the Company’s reorganization shall be determined by the civil legislation of the Russian Federation.
The reorganization of the Company may be effected in the form of a merger, affiliation, detachment and reorganization.
17.2. The Company shall be considered reorganized form the moment of state registration of newly formed legal entities with the exclusion of the cases of reorganization in the form of affiliation. The above registration and making an entry on termination of the Company’s activities shall be effected in the procedure established by the laws of the Russian Federation.
17.3. The company shall notify its creditors on reorganization no later 30 days after taking such decision.
A creditor shall be entitled to require from the Company by notification in writing to early terminate performance of obligations within 30 days from the date of forwarding by the Company to the creditor of the notification on reorganization in the form of a merger, affiliation, or reorganization and within 60 days from the date of forwarding by the Company of the notification to the creditor on reorganization in other forms.
If the separation balance sheet does not give possibility to determine the assignee of the reorganized Company the legal entities created in the result of reorganization shall bear joint responsibility for their liabilities to the creditors.
18. Liquidation of the Company
18.1. The liquidation of the Company shall result in its termination without assignment of rights and obligations by way of succession to other persons. The Company may be liquidated by judgement of court on the bases provided for by the civil legislation of the Russian Federation as well as voluntarily on proposal of the Board of Directors of the Company in the procedure established by the laws subject to requirements of these Articles.
18.2. The decision on liquidation of the Company and appointment of the liquidation commission shall be taken by the General meeting of shareholders. From the moment of appointment of the liquidation commission all powers for management of the Company’s activities including representation of the Company at court shall pass to the liquidation commission.
18.3. The liquidation commission shall publish the notice of liquidation of the Company, the procedure and terms of placing demands by its creditors in the print media where the data on registration of legal entities are published, and take measures to identify the creditors and collect the accounts receivable, as well as notify the creditors of the Company in writing of liquidation thereof. The term for placing demands by the creditors shall be two months from the date of publication of the notice on liquidation of the Company.
18.4. Upon expiration of the term for placing demands by the creditors the liquidation commission shall draw up an interim liquidation balance sheet containing the data on the structure of the Company’s property, demands placed by the creditors and the results of consideration thereof. The above balance shall be approved by the General meeting of shareholders as agreed with the body performing state registration of the Company.
18.5. The payment of moneys to the creditors of the Company shall be carried out by the liquidation commission in the order of precedence established by the civil legislation of the Russian Federation in accordance with the interim balance sheet starting from the date of approval thereof, exclusive of the creditors of the fifth priority the payment whereto shall be carried out upon expiration of one month from the above date.
If the Company’s monetary assets are not sufficient to satisfy the claims of the creditors the liquidation commission shall carry out the sales of the other property of the Company on a public auction in the procedure established for court enforcement actions.
Upon completion of settlements with the creditors the liquidation commission shall draw up the final liquidation balance sheet which shall be approved by the General meeting of shareholders as agreed with the body which performed state registration of the Company.
18.6. The property remaining after completion of settlements with the creditors, if any, shall be distributed among the shareholders in the following order of precedence:
Distribution of property of each priority shall be effected upon distribution of the property of the precedent priority.
In case of absence of a legal successor, the documents to be kept permanently having scientific historical meaning shall be handed over for the state custody to the archives of Moscow, the staff documents (orders, personal files and personal accounts and other) shall be handed over to the archive of the administrative district on the territory of which the Company is located. The handing over and the adjustment of the documents shall be carried out at the expense of the Company in accordance with the requirements of the archive bodies.
18.7. In course of liquidation or reorganization the Company shall ensure safety of the data constituting state secret as well as their media by developing and implementation of the secrecy order system, technical intelligence countermeasures, protection and fire security.
19. Accounting and reporting in the Company, documents of the Company.
Information on the Company.
19.1. The Company shall keep accounting and present financial reports in the procedure established by the legislative and legal acts of he Russian Federation. The responsibility for organization, condition and reliability of the accounting in the Company, timely presentation of annual reports and other financial reports to the correspondent bodies as well as the data on the Company’s activity presented to shareholders, creditors and mass media shall be born by the General Director. The reliability of the data contained in the annual report of the Company to the General meeting of shareholders, accounting balance and profit and loss account shall be approved by the Internal Audit Commission of the Company.
The annual report of the Company is subject to preliminary approval by the Board of Directors before the date of holding the annual General meeting of shareholders.
19.2. The information on the Company shall be presented in accordance with the requirements of the Federal Law and other legal acts of the Russian Federation.
19.3. The Company shall ensure security of the documents including staff documents in course of reorganization and liquidation of the Company.
19.4. The Company’s Articles of Association shall be a statutory document of the Company and its provisions shall be binding for all the bodies of the Company and its shareholders.