**Exhibit 1.4**

 

APPROVEDby the General Shareholders’ Meetingof OJSC Rostelecom on June 24, 2006

 

 

 

 

 

REGULATIONS

on the ManagementBoard ofthe Open Joint Stock CompanyLong-Distance and International Telecommunications Rostelecom

(restated version No. 3)

 

 

 

 

 

 

 

 

Moscow2006

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**1.****                                      GENERALPROVISIONS**

1.1                                 TheseRegulations on the Management Board (hereinafter, “Regulations”) shall, inaccordance with the Civil Code of the Russian Federation, the Federal Law “OnJoint Stock Companies” and the Charter of the Company, determine the legalstatus of the Management Board of the Company and of its members, including theterm and procedure for the convocation and holding of meetings of theManagement Board, as well as the decision-making procedure.

1.2                                 TheManagement Board is a collegial executive body of the Company, which carriesout the management of day-to-day activities of the Company.

1.3                                 Membersof the Management Board shall be appointed by decision of the Board ofDirectors of the Company for a term not exceeding one (1) year. The samemember of the Management Board may be reappointed for an unlimited number ofterms. The appointment shall be deemed effective from the moment when therelevant decision is adopted by the Board of Directors.

The composition of candidatesfor the Management Board shall be selected by the General Director of theCompany from among the Deputies of the General Director, executive directors,heads of the Company’s structural subdivisions and the Company’s shareholdersand their representatives.

The powers of amember of the Management Board may be subject to early termination:

-                    by decision ofthe Board of Directors;

-                    in the eventwhen a member of the Management Board voluntary resigns, of which a member ofthe Management Board shall notify in writing other members of the ManagementBoard and the Company;

-                    in the event amember of the Management Board dies, or is duly declared missing or dead;

-                    in accordancewith a court judgment or decision of an authorized governmental body ontermination of the powers of a member of the Management Board.

**2.****                                      PURPOSEAND PRINCIPLES OF OPERATION OF THE MANAGEMENT BOARD**

2.1                                 Thepurpose of the Management Board’s activities shall be the procurement of theCompany’s effective operation.

2.2                                 Inorder to accomplish its purpose, the Management Board shall follow thefollowing principles:

-                    prompt makingof the most objective decisions for the benefit of the Company and itsshareholders;

-                    fair, timelyand efficient fulfillment of resolutions of the general meeting of shareholdersand the Board of Directors of the Company.

**3.****                                      CHAIRMANOF THE MANAGEMENT BOARD**

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3.1                                 Thefunctions of the Chairman of the Management Board of the Company shall beperformed by the person carrying out the functions of the Company’s one-personexecutive body.

3.2                                 TheChairman of the Management Board shall organize and chair meetings of theManagement Board, sign all documents on behalf of the Company and minutes ofmeetings of the Management Board and act on behalf of the Management Board of theCompany without a power of attorney.

3.3                                 Ifprompt decision-making on any matter is required, in the absence of theChairman of the Management Board, the person acting as the General Director ofthe Company shall organize and chair the meeting of the Management Board andsign the minutes of the meeting.

**4.****                                      SECRETARYOF THE MANAGEMENT BOARD**

4.1                                 TheSecretary of the Management Board of the Company shall provide for the recordkeeping related to the operation of the Management Board of the Company.

The Secretary of theManagement Board shall be appointed or dismissed by the person carrying out thefunctions of the Company’s sole executive body.

In the case ofcreation of the Corporate Secretary Service by the decision of the Board ofDirectors the person carrying out the functions of the Company’s sole executivebody appoints the Secretary of the Management Board out of personnel of theCorporate Secretary Service in an order set by this article.

4.2                                 TheSecretary of the Management Board may be dismissed at any time and a newSecretary of the Management Board have to be appointed in accordance with theprocedure set forth in Section 4.1 hereof for the appointment of theSecretary of the Management Board.

In the absence of theSecretary of the Management Board, his or her functions shall be imposed onanother person in the manner specified in Section 4.1 hereof for theappointment of the Secretary of the Management Board.

4.3                    The Secretary of the Management Board shallhave the right:

-                    to requestfrom Company officers the information and documents required for thepreparation of materials on the issues of agenda of meetings of the ManagementBoard;

-                    to receiveremuneration for the performance of his or her duties and compensation ofexpenses related to the performance of the functions of the Secretary of theManagement Board.

4.4                    The Secretary of the Management Boardshall:

-                    keep and drawup minutes of meetings of the Management Board;

-                    record andkeep incoming documentation and copies of the Management Board’s outgoingdocumentation;

-                    notify membersof the Management Board about the meetings of the Management Board in themanner and within the term specified in these Regulations;

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-                    provide themembers of the Management Board with materials necessary for consideration ofthe issues of agenda of meetings of the Management Board in the manner andwithin the term specified in these Regulations;

-                    make and signextracts from minutes of meetings of the Management Board; and

-                    perform otherfunctions specified in these Regulations.

4.5                              TheSecretary of the Management Board shall be paid remuneration for performance ofhis or her functions and compensation of expenses related to the performance ofthe functions of the Secretary of the Management Board.

The amount ofremuneration and compensation payable to the Secretary of the Management Boardshall be determined by decision adopted by a majority vote of the members ofthe Management Board participating in the meeting.

**5.****                                      MEETINGOF THE MANAGEMENT BOARD**

5.1                                 Meetingsof the Management Board may be held only in the form of a joint presence of itsmembers (including video- or audio- conference call).

As an extraordinary eventif agreed by the Chairman of the Management Board the member of the ManagementBoard may submit the completed absentee voting opinion which should be providedto the Secretary of the Management Board before the meeting by fax, courierservice or e-mail. The original absentee voting opinion should be provided tothe Secretary of the Management Board within 3 business days.

5.2                                 Meetingsof the Management Board shall be held regularly, in accordance with the workingschedule approved by the meeting of the Management Board, but no less than 1(one) time a month. If required, the Management Board shall consider issuesthat are not included in the working schedule.

5.3                                 Ameeting of the Management Board shall be convened by the Chairman of theManagement Board on its own initiative, at the request of a member of theManagement Board of the Company, at the request of a member of the Board ofDirectors and its committees and a member of the Audit Commission.

Determination of theterm, convocation of the meeting, the agenda of the meeting and supervision ofmaking and keeping of minutes is in the terms of reference of the Chairman ofthe Management Board.

At the request of membersof the Management Board additional issues may be included in agenda of ameeting of the Management Board.

The necessarymaterials related to the issues of agenda shall be promptly provided to themembers of the Management Board in order to enable them to prepare for adiscussion. Proposals on the issues of agenda of a meeting of the ManagementBoard that should be decided at the meeting must be received by the Chairman ofthe Management Board at least five (5) days prior to the date of themeeting.

5.4                                 Secretaryof the Management Board shall notify the members of the Management Board infree form about the convocation of a meeting of the Management Board, itsplace, time and agenda at least 3 (three) days prior to the date of themeeting.

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The above term may bereduced if any issues are required to be settled urgently provided that none ofthe members of the Management Board objects.

Together with the notice,members of the Management Board shall receive full and accurate information andall necessary materials related to the issues of agenda, which shall besubmitted to the members of the Management Board.

In case, when necessaryinformation was provided to the members of the Management Board untimely andthe members of the Management Board did not have sufficient time to review thisinformation, the meeting of the Management Board shall be postponed at therequest of a member(s) of the Management Board.

5.5                                 Thequorum for meetings of the Management Board shall be at least one-half of theappointed members of the Management Board.

In case, when the numberof members of the Management Board is less than the number of members thatconstitute the quorum, the Board of Directors of the Company shall decide ondetermination of numerical composition of the Management Board and shallappoint the members of the Management Board of the Company.

5.6                                 Atthe adoption of decisions of the Management Board, members of the ManagementBoard that participate in the meeting shall express their opinion on agendaissues by voting.

5.7                                 Atthe meetings of the Management Board decisions shall be adopted by a majorityof votes of the Management Board members participating in the meeting andmembers submitted absentee voting opinions in accordance with item 5.1. ofthese Regulations.

5.8                                 Atthe adoption of the decisions at the meeting of the Management Board, eachmember of the Management Board shall have one vote.

A member of theManagement Board may not delegate its right to vote to another person.

In the event of a tievote the Chairman of the Management Board shall have the deciding vote.

During the meeting of theManagement Board the Secretary of the Management Board shall keep the minutesof this meeting.

The minutes of aManagement Board meeting shall be drawn up no later than three (3) businessdays of the date of the meeting.

The minutes of a meetingshall specify:

-                    location andtime of the meeting;

-                    persons whowere present at the meeting;

-                    agenda of themeeting;

-                    issues put toa vote and the voting results; and

-                    takendecisions.

The minutes of theManagement Board meeting shall be signed by the person presiding over themeeting and by the Secretary of the Management Board.

The Company shall keepminutes of the Management Board meetings at the location of its executive bodyor at another location known and accessible to the Company’s shareholders,creditors of the Company and other interested parties, in accordance with theprocedure and during the period determined by the federal executive body forthe securities market. If such 

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period is not determined,the Company shall keep the minutes of meetings of the Management Boardpermanently.

The Company shall providethe members of the Board of Directors, the Auditing Commission, the externalauditor of the Company and the shareholders holding in aggregate not less than25 percent of the Company’s voting shares with access to minutes of themeetings of the Management Board.

**6.****                                      REPORTSTO THE BOARD OF DIRECTORS**

6.1                                 TheBoard of Directors shall exercise control over the operation of the ManagementBoard. The Management Board is obliged to submit reports to the Board ofDirectors on:

(a)                  prospectivepolicy of the Company and other substantial issues of prospective management(not less than one time a year unless a change in the Company’s standingrequires immediate submission of such report);

(b)                 discussion andapproval of the Company’s annual budget (not less than once a year prior tobudget period would commence), including reports on budget corrections (as sucheconomically justifiable need arises);

(c)                  execution of theannual budget as a whole and with regard to separate financial indicators (suchas revenues, expenses and capital expenditure program) on quarterly basis;

(d)                 actions which mayparticularly affect the Company’s key performance indicators (as soon aspracticably possible to enable the Board of Directors to form an opinion aboutsuch actions before their commencement).

**7.****                                      REMUNERATIONOF MEMBERS OF THE MANAGEMENT BOARD**

7.1                                 Amember of the Management Board shall receive remuneration for the performanceof his/her functions on a quarterly and annual basis.

7.2                                 Theremuneration to the members of the Management Board is paid out of the Company’snet income.

The aggregate quarterlyremuneration to the Management Board shall not exceed 9.03 million rubles. TheChairman of the Management Board shall receive quarterly remuneration with acoefficient 1.2 as compared to the average personal remuneration of the membersof the Management Board.

7.3                                 Thedetermination of the aggregate quarterly remuneration to the Management Boardshould be brought by the Chairman of the Management Board to the attention ofthe Board of Directors after the consideration by the Board of Directors of theresults of the quarterly budget execution.

7.4                                 Forthe quarter when the composition of the Management Board has changed thequarterly remuneration to the every member of the Management Board shall bepaid on the pro rata basis.

7.5                                 Theamount of personal remuneration of each Management Board member shall beproposed by the Chairman of the Management Board depending on the volume andintensity 

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of the functionsperformed by a member of the Management Board or/and shall be determined in anorder set by the internal document approved by the Board of Directors.

A decision on the amountof personal quarterly remuneration of each Management Board member shall bemade at the meeting of the Management Board by a simple majority of votes ofthe members of the Management Board taking part in such meeting The member ofthe Management Board on the amount of whose remuneration the decision is madeshall not participate in the vote.

7.6                                 Theaggregate annual remuneration of the Management Board shall be determined bythe Board of Directors after the Annual General Shareholders Meeting and shallnot exceed 0.2% of OIBDA calculated in accordance with Russian accounting standardsfor the last financial year.

A decision on the amountof personal annual remuneration of each Management Board member shall be madeat the meeting of the Board of Directors depending on the volume and intensityof the functions performed by a member of the Management Board or/and shall bedetermined in an order set by the internal document approved by the Board ofDirectors, as proposed by the General Director.

For the year when thecomposition of the Management Board has changed the annual remuneration to theevery member of the Management Board shall be paid on the pro rata basis.

**8.****                                      LIABILITYOF THE MEMBERS OF THE MANAGEMENT BOARD**

8.1                                 Inexercising their rights and performing their duties the members of theManagement Board shall act for the benefit of the Company and exercise theirrights and perform their duties with respect to the Company reasonably and ingood faith.

8.2                                 Themembers of the Management Board shall be liable to the Company for lossescaused to the Company by actions (inaction) through their fault in accordancewith federal laws, other legal acts of the Russian Federation and terms of theagreement concluded between each member of the Management Board and theCompany.

Members of the ManagementBoard who voted against the decision that caused losses to the Company or whodid not participate in the voting shall not be liable.

8.3                                 Atthe determination of the grounds and the amount of Management Board members’liability, the usual business conditions and other relevant circumstances shallbe taken into account.

8.4                                 Incase several persons are liable under this Section, they will be jointly liableto the Company.

8.5                                 TheCompany or the shareholder/s holding in aggregate at least one (1) percentof the Company’s voting shares shall have the right to file a suit against amember of the Management Board claiming for damages caused to the Company, incases specified in Section 7.2 of these Regulations.

8.6                                 Themembers of the Management Board shall be responsible for the maintenance ofsecrecy and for the prompt development and implementation of measures toprotect state secrets in accordance with the requirements of the legal acts ofthe Russian Federation governing the protection of state secrets.

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8.7                                 TheManagement Board members shall not disclose non-public and confidentialinformation (as stipulated by the applicable legislation and internaldocuments) on the activities of the Company became known to him or her asfulfilling his or her duties as a member of the Management Board.

8.8                                 TheManagement Board members shall notify in writing the Corporate Secretary about (i) possessionof securities of the Company, (ii) intentions to conduct deals withsecurities of the Company and its affiliates, and (iii) executedtransactions with such securities — in an order set by applicable internaldocument, approved by the Board of Directors.

**9.****                                      APPROVALOF AMENDMENTS AND ADDITIONS TO THE REGULATIONS**

9.1                                 TheRegulations shall be approved at the general meeting of shareholders by amajority of votes of the shareholders holding the Company’s voting shares andparticipating in the meeting.

9.2                                 Amendmentsand additions to the Regulations may be adopted at the general meeting ofshareholders by a majority of votes of the shareholders holding the Company’svoting shares and participating in the meeting.

9.3                                 Inthe event of changes in the legislation of the Russian Federation or theCompany Charter, as a result of which certain provisions of the Regulationswill not comply with such legislation or the Charter, the above provisionsshall cease to be in effect, and until the Regulations are amended accordinglythe members of the Management Board shall act in accordance with effectivelegal acts of the Russian Federation and the Company Charter.

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