CORPORATE GOVERNANCE COMMITTEE CHARTER1. Formation
According to the Communiqué Serial: IV, No: 56 of the Capital Markets Board on the Definition and the Enforcement of the Corporate Governance Principles amended by the Communiqué Serial: IV No: 57 and Serial IV No: 60, it has been decided to establish a corporate governance committee within the body of Board of Directors and perform the functions of Nomination Committee, Remuneration Committee and Committee for Early Inspection of Risks.
In this Charter; the following definitions apply;
“Communiqué”:Communiqué Serial: IV, No: 56 of the Capital Markets Board on the Definition and the Enforcement of the Corporate Governance Principles amended by the Communiqué Serial: IV No: 57 and Serial IV No: 60
“Committee”: a Corporate Governance Committee “CMB”: Capital Markets Board
“Company”: Türk Telekomünikasyon A.Ş.
“Corporate Governance Principles”: The principleswhich is attached to the Communiqué Serial: IV, No: 56 of the Capital Markets Board on the Definition and the Enforcement of the Corporate Governance Principles published on official gazette No:28158dated 31 December 2011 shall be taken as a basis for determination of corporate governance structure and processes by listed companies.
“Executives”: Employees who have titles of “CEO” and “Vice President” in Türk Telekomünikasyon A.Ş. “Board”: Board of Directors
3. Objective, AuthorityandResponsibilities
The Committee shall provide implementation, improvement and adoption of corporate governance principles within the Company.
The Committee shall make corporate governance review of Board and submit to the Board’s approval.
The Committee shall supervise the works of Shareholders Relations Division (Capital Markets and Investor Relations Department).
The Commitee shall make suggestions about Board’s and Committees’ operations, structure and efficiency.
The Committee shall periodically review and reassess the adequacy of the Corporate Governance Charter and recommend any proposed changes to the Board for approval. The Committee shall also have authority to convene a meeting and obtain advice and assistance from employees and representatives of related parties including subsidiaries; internal or external legal, accounting or other advisors. Final decision always belongs to the Board.
The Committee may form subcommittees externally or from its own members who have enough experience in order to gear up Corporate Governance Committee and delegate authority to subcommittees when appropriate.
The Committee shall determine whether or not Corporate Governance Principles are being fully implemented by the company, if not, the reason thereof, and state any conflict of interests arising as a result of imperfect implementation of these Principles, and present remedial recommendations to the board of directors,
The Committee shall fulfill the activities which are requested to be done by Board and can be considered under the scope of corporate governance.
4. Structure of Committee
The Committee shall be formed and authorized by Board in parallel with the articles of association and CMB rules.
TheCommitteeshallconsist of threemembers.
The Chairman of the Committee shall be elected amongst the independent members of the board of directors.
Other two members of the committee shall be elected by the Board from among the Directors nominated by the Group A Shareholder.
The majority of the members shall consist of members of the board of directors who do not have direct executive duties such as the general manager or a member of the executive committee, Chairman of Executive Committee/General Manager and Chief Financial Officer.
The Committee may invite and ask executives’ opinions, when deemed necessary.It shall take an independent expert’s opinion if required.
The Board Secretary, under the supervision of Group Corporate Secretary, shall do the studies of secretary for the Committee.
All kinds of resources and support necessary for the Committee to fulfill its duties will be provided by the Board. Company shall cover the cost of consultancy services requested by Committee. 5. Meeting andReporting
The Committee shall convene at least quarterly.
The Committee shall convene as often as deemed necessary for the effectiveness of its studies.
The meeting can be held at the headquarters of the Company or a location where is easily accessible for committee members.
The decisions taken at the Committee Meetingsshall be recorded and kept by the Board Secretary, under the supervision of Group Corporate Secretary.
The Committee submit its deductions and recommendations on issues within its responsibility and authority to the Board.
The Committee shall convene with the participation of the majority if it is formed more than two members. If it is formed by two members, both members are required for the quorum and should participate to the meeting.
6. Public Disclosures
The Committee shall review the annual activity report which shall be made public.
The Committee shall make recommendations to make public disclosures and analyst presentations comply with “Disclosure Policy” and related law and regulations in particular.
The Committee shall prepare “Corporate Governance and Compliance Report” 7. Investor Relations
Shareholders Relations Division (Capital Markets and Investor Relations Department) is formed in order to monitor all relations between shareholders and investors and fulfill the requirements of their right to obtain information.
Shareholders Relations Division (Capital Markets and Investor Relations Department); The Division shall;
Consist of sufficiently qualified personnel.
Meet the information requests of shareholders and investors within the scope of disclosure policy, corporate governance principles, articles of association and legislation.
Organise periodical informative meeting for investors in Turkey and abroad and participates the organized meetings within the scope of legislation, articles of association, corporate governance principles and disclosure policy.
Carry out necessary studies to create effectivecommunication with local and foreign investors via web site.
Supervise the public disclosure procedures in compliance with the legislation and watch the process.
Provide to keep records of shareholders safe and up to date.
Provide activity reports to be prepared in compliance with the legislation and corporate governance principles of CMB.
Follow up if General Assembly Meeting is duly convened.
Prepare a set documents to be presented to the shareholders at the General Assembly Meeting in cooperation with Legal Department.
Carry out necessary studies to keep the minutes of the meeting duly in cooperation with Legal Department.
8. Reporting Responsibility
The Committee shall ensure the Board is informed about issues within its sphere of authority and responsiblity.
The Committee shall put its studies in writing and keep a record of them.
The Committee shall prepare a report on its findings and proposals to the board of directors
9. ResponsibilitiesforNomination, RemunerationandEarlyDetection of Risks
TheCommitteeshallalso have the objectives, authorities andresponsibilities of NominationCommittee, RemunerationCommitteeandCommitteeforEarlyDetectionof Risks.
The Committee shall determine and supervise the approach, principles and practices regarding the evaluation of performances of the board members and executives, career planning and rewarding of the same and recorded in a written hard copy.
The Committee shall periodically supervise and approve the remuneration policy, its principles and practices. It shall ensure the compliance of remuneration policy of board members and executives with Company’s risk management principles and practices.
The Committee shall determine its proposals with respect to principles governing the remuneration of Board Members and executives taking into consideration long term objectives of the Company. It shall ensurethe remuneration policy in conformity with the shareholders’ interests. It shall approve the principles and practices of fees, salaries, bonus, compensation and long term incentives of the Board members and executives.
The Committee shall definea criteria associated with the performance of the member and companywhich may be used in determination of remuneration. It submits a remuneration proposal for
Board members and executives to the Board according to their level of meeting the criteria.It take precautionsto avoid board members and executives to determine their own remuneration.
The Committee shall create a transparent system in order to investigate suggestions for candidates for membership on the Board and for their evaluation, training and rewarding. It shall perform studies to identify policies and strategies on this matter. The Committee shall evaluate regularlyabout board structure and its efficiency. It shall develop proposal for size of Board members and executives. It shall create a candidate pool for board membership including evaluating persons suggested by shareowners or others.
The Committee shall review periodically the principles and practices ofdesignation and promotion of executives and then approve. The Committee shall determine nomination criteria and review periodically. It shall recommend the determinated nominees to the Board.It shall carry out the evaluation process of independent board members whether or not independence criteria is meet which are determined according to CMB legislation.
The Committee shall establish a Corporate Risk Management System for early detection of the risks that may that may endanger the presence, development and sustainability of the Company and take precautions to eliminate these issues. The system shall be maintained and developedeffectively by Committee. The Committee shall review the effectiveness of Corporate Risk Management System at least once a year. TheCommitteeshallalsodeterminetheareasthatmayconstitutefinancial risk
orweaknessandobtaintheviews of TT
GroupmanagementandauditorsregardingtherelevantmitigationandrecoveryplansItshalldeterminethe risk appetite and approve the policy, procedures and standards regarding Corporate Risk Management. The Committee shall approve the governance models of Corporate Risk Management. It shall determine the duties and responsibilities of the Steering Committee and provide the most advanced analysis tools in risk management process.It shall make the results of Corporate Risk Management System an essential part of the strategic decision making process. The Committee shall build coordination in order to manage risk effectively. (Subsidiaries, Corporate Risk and Opportunity Management, Executive Units, Internal Control)It shall ensure the Board is informed about following risk levels and risk management
actions. Itshallalsoinvestigateandconcludecomplaintsto be
raisedbytheshareholdersandotherbeneficiariesregardingtheinternalcontrolsystem of theCompanytoensure risk management. Itshallmakethesystembeingaudited as a wholeandevaluatewhethertheCompany Management shareswiththeemployeestheimportance of the risk management.
10. Compliance to Internal Regulations The Committee shall;
Provide internal regulations to be recorded in a written hard copy and circulated to all employees. Assess whether corporate management convey internal regulations and code of ethics to the employees
by an appropriate communication method.
Evaluate the studies regarding compliance to the internal regulations performed by corporate management.
Monitor the compliance with the internal regulations which are preventing the conflicts of interest that may arise among the board members, executives, and other employees and abuse of the confidential business information.
The decisions shall be kept in a minute book.
o Meeting minutes shall include at least the following items: Meeting place and time
Information about the topics that are mentioned in meeting Decisions taken.
Decisions deemed as necessary by the Committee shall be submitted to the Board.
Secretariat is responsible for preparing and keeping meeting minutes within the coordination of Group Companies Secretary.
12. Entry into Force
ThisCharter entersintoforcebyresolution of the Board. If necessary, revision of this charter is under the Board of Directors.