MIDCONTINENT INDEPENDENT SYSTEM OPERATOR, INC. BOARD OF DIRECTORS CORPORATE GOVERNANCE & STRATEGIC PLANNING COMMITTEE CHARTER

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1 MIDCONTINENT INDEPENDENT SYSTEM OPERATOR, INC. BOARD OF DIRECTORS CORPORATE GOVERNANCE & STRATEGIC PLANNING COMMITTEE CHARTER I. ORGANIZATION There shall be a committee of the Board of Directors ( Board ) of the Midcontinent Independent System Operator, Inc. ( Company ) known as the Corporate Governance & Strategic Planning Committee ( Committee ). This Charter 1 shall govern the Committee with regard to its duties and responsibilities. The goal of the Committee shall be to promote policies that foster principles of sound corporate governance, and to assist the Board in its oversight of the Company s strategic planning. Additional information about the composition of the committees to the Board of Directors and Director independence may be found in the Company s Principles of Corporate Governance. II. PURPOSE The primary function of the Committee is to assist the Board in fulfilling its oversight responsibilities by: (1) reviewing and evaluating the corporate governance policies and procedures of the Company; (2) developing and recommending to the Board a set of corporate governance principles for the Company; and (3) overseeing the development, implementation and assessment of the Company s Strategic Plan. The Committee s primary duties and responsibilities are as follows: To serve as an independent and objective party to monitor corporate governance policies of the Company. To evaluate, monitor and present recommendations to the Board with respect to the corporate governance policies and procedures of the Company. To provide advice to Management in the development and implementation of the Company s Strategic Plan. To monitor and evaluate the Company s strategic planning process and the results generated by the approved Strategic Plan. To make recommendations to the Board regarding management s proposals concerning the development, implementation and modification of the Company s Strategic Plan. 1 Adopted April 19, 2006; amended June 20, 2007; amended April 14, 2009; amended June 16, 2010; amended February 15, 2012; amended April 23, August 20, and October 24, 2013; amended December 9, 2014; amended October 15, 2015.

2 To periodically monitor Management s Enterprise Risk Management process and report results to Board on an annual basis. The Committee will primarily fulfill these responsibilities by carrying out the activities enumerated in Section IV of this Charter. III. MEETINGS The Committee shall meet at least four times annually, or more frequently as circumstances dictate. The Chairman of the Board, the Chair of the Committee, or a majority of the Committee members may call meetings of the Committee. The Chair of the Committee shall prepare or approve an agenda in advance of each meeting. The Chief Executive Officer and the Vice President(s) with the responsibilities for corporate governance shall be invited to all meetings. Other management officials and counsel to the Board may be invited as necessary. With the exception of independent Directors, the Chair may excuse any non-committee members from attendance at any meeting or portion of any meeting. IV. RESPONSIBILITIES The Committee shall have the following duties and responsibilities: A. Corporate Governance and Ethical Compliance 1. Review the adequacy of the Company s core governing documents, and recommend to the Board, as conditions require, that it propose amendments to the Certificate of Incorporation, the Bylaws or the Transmission Owners Agreement for consideration by the Members and other stakeholders. 2. Develop and recommend to the Board a set of corporate governance principles for the Company. 3. Review the adequacy of the Company s corporate governance principles on at least an annual basis, and recommend to the Board any appropriate changes. 4. Be knowledgeable and informed of developments with regard to corporate governance issues in order for the Committee to make recommendations to the Board in light of any such developments as may be appropriate. 5. Review and recommend changes as appropriate to the Company s Standards of Conduct

3 6. Review Management s monitoring of compliance with the Company s Standards of Conduct approved by the Federal Energy Regulatory Commission, and the Company s Code of Business Ethics. The Committee should also consider any requests for waivers of the Code of Business Ethics by Directors or Executive Officers, and review any proposed transactions between the Company and its Directors or Executive Officers. 7. As appropriate, in coordination with the Audit & Finance Committee, advise the Board of Directors regarding the Company s policies and procedures relating to compliance with the Standards of Conduct. 8. Review semi-annually the status and effectiveness of the Company s corporate compliance program and assure that the Chief Executive Officer and other appropriate officers present an annual review to the Board on such corporate compliance program. 9. Be knowledgeable and exercise reasonable oversight of the Company s corporate compliance program. The Committee will periodically receive training on the corporate compliance program and its responsibilities with respect to such program. 10. Meet with the Company s chief compliance officer or that officer s deputy or designee with regard to the corporate compliance program, its effectiveness and any related issues, either in open session or in closed executive session without other representatives of management being present, as necessary. 11. Review and recommend action to the Board of Directors on methods of eligibility and voting proposed by sectors of the Advisory Committee. B. Board Administration and Evaluation 1. Review and evaluate issues related to Director retirement, term limits, diversity, experience and related issues, in addition to the qualifications set forth in Section 4.2 of the Bylaws. 2. Review and evaluate policies and practices related to the size, compensation, composition and functioning of the Board. 3. Ensure that new Directors receive an appropriate orientation and develop a continuing education program for all Directors

4 4. Recommend to the Board for its approval an annual self-evaluation process for the Board and its Committees, and oversee that process. The collection and assessment of comments produced by the self-evaluation process will be coordinated by the counsel to the Board and provided to the Chair of this Committee. 5. Periodically review the charter and the composition of each committee of the Board. The Committee may recommend revisions to the charters of other Board committees, which recommendations will be acted upon by those committees. This Committee may also recommend to the Board of Directors the creation of additional Board committees or the elimination of existing Board committees. 6. Review matters relating to meetings of the Board, including frequency, schedules, logistics, retreats and communication, as well as similar issues relating to the Advisory Committee, the Organization of MISO States, Inc. and other stakeholder groups. C. Strategic Planning and Enterprise Risk Management 1. Review and advise Management on the strategic planning process of the Company, including its priorities in the development of its strategic plans, and changes to those plans. 2. Present recommendations to the Board of Directors regarding the consideration and approval of Management proposals for the development, implementation and modification of the Company s strategic plans, including the expansion into new lines of business or markets, or the exit from existing lines of business or markets. 3. Monitor the Company s progress toward achieving its strategic plans. 4. Receive reports from Management designed to keep the Committee informed of competitive conditions, enterprise risks and significant regulatory, financial, technological and other factors materially influencing the Company s strategic plans, and bring such issues to the attention of the Board as appropriate. 5. On at least an annual basis, monitor the adequacy of the Enterprise Risk Management process at the Company. D. Other Duties Related to Review, Reports and Improvement Procedures 1. Review and reassess annually the adequacy of this Charter, and conduct an annual self-assessment of this Committee s performance. 2. Review and propose to the Human Resources Committee any goals and metrics for inclusion in the process to determine the Company s annual incentive compensation plan

5 3. Prepare minutes of all meetings of the Committee, and report to the Board on the matters discussed at each Committee meeting, as appropriate. 4. Perform any other activities consistent with this Charter, the Company s Bylaws and governing law, as the Committee or the Board deems necessary or appropriate. 5. Engage the services of outside firms and consultants as the Committee believes appropriate to enable it to carry out its responsibilities, including the sole authority to approve the fees and terms of engagement of those rendering advice to the Committee. The foregoing list of responsibilities and duties is not exhaustive. The Committee may additionally perform such other functions as may be necessary or appropriate for the performance of its oversight function consistent with this Charter. The Committee has the power to delegate its authority and duties to subcommittees or individual members of the Committee as it deems appropriate