REPUBLIC OF BULGARIA COUNCIL OF MINISTERS. DECREE No. 163 of 16 August Promulgated State Gazette No. 69/ Amended SG No.

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1 REPUBLIC OF BULGARIA COUNCIL OF MINISTERS DECREE No. 163 of 16 August 1994 on the Adoption of a Regulation on the Terms and Procedures for Acquisition Under Preferential Terms of Interests and Shares Owned by the State and Municipalities, and for the Gratuitous Obtaining of Shares Owned by the State Promulgated State Gazette No. 69/ Amended SG No. 33/1996 T H E C O U N C I L O F M I N I S T E R S H A S D E C R E E D: Sole Article Hereby adopts a Regulation on the Terms and Procedures for Acquisition Under Preferential Terms Of Interests and Shares Owned by the State and Municipalities, and for the Gratuitous Obtaining of Shares and Interests Owned by the State. TRANSITIONAL PROVISIONS ß1. Hereby repeals the Regulation on the Acquisition Under Preferential Terms Of Interests and Shares Owned by the State and Municipalities (promulgated State Gazette No. 81 of 1992; amended No. 31 of 1994). ß2. This Decree shall enter into force on the date of publication in the State Gazette. Chairman of the Council of Ministers: Lyuben Berov Chief Secretary of the Council of Ministers: Vesselin Blagoev REGULATION on the Terms and Procedures for Acquisition Under Preferential Terms Of Shares Owned by the State and Municipalities, and for the Gratuitous Obtaining of Shares Owned by the State Section I GENERAL PROVISIONS Article 1

2 (Amended SG No. 33/1996) This Regulation shall set forth the terms and procedure for acquiring under preferential terms of interests and shares owned by the state and municipalities, and for the gratuitous obtaining of shares owned by the state by the persons specified in Article 5, paragraph 2 of the Transformation and Privatization of State-Owned and Municipal Enterprises Act (TPSOMEA). Article 2 (Amended SG No. 33/1996) The persons specified in Article 5, paragraph 2 of TPSOMEA may acquire interests and shares under preferential terms and/or obtain shares gratuitously in one enterprise alone. Article 3 (1) The right to acquisition under preferential terms of shares or a joint interest by the persons specified in Article 5 paragraph 2 of TPSOMEA shall be exercised within a three-month period from the date of commencement of the sale of shares or interests through filing with the enterprise of an application stating the wish for acquisition under preferential terms of shares or interests owned by the state, as well as the sum with which the person wishes to participate. (2) The authority under Article 3 of TPSOMEA shall advertise in the State Gazette and in central daily newspapers the initial date of the sale of interests or shares in the respective enterprise and the place for filing applications for acquiring shares or a joint interest. Article 4 (1) (Amended SG No. 33/1996) The Centre for Mass Privatization shall advertise in the State Gazette and in two central daily newspapers the initial date and the deadline for filing applications for the gratuitous acquisition of shares by the persons specified in Article 5, paragraph 2 of TPSOMEA. (2) The applications specified in paragraph 1 shall be filed with the respective enterprise which shall record them in a ledger under a number and date in the order of filing, and shall issue a document proving the filing. Article 4bis (New article, supplemented SG No. 33/1996) The applications under Article 3, paragraph 1 and under Article 4, paragraph 1 shall be submitted either in person or through a proxy specifically authorized in writing with a notarially certified signature. Article 5 (1) Within two weeks after the expiration of the deadline under Article 3, paragraph 1 or, respectively, Article 4, paragraph 1 of this Regulation the enterprise shall prepare a report which shall state:

3 1. the list of the persons who have applied to exercise their right pursuant to Article 5, paragraph 2 of TPSOMEA and the grounds on which they have done so; 2. the length of service of each person under paragraph 1 in the respective enterprise; 3. (as amended SG No. 33/1996) the gross remuneration of the person for the last 24 months adjusted in accordance with Article 22, paragraph 4, of TPSOMEA and the total sum of the discount which the person is entitled to; 4. (as amended SG No. 33/1996) the average gross remuneration for the enterprise for the last 24 months, as corrected under the procedures prescribed in Article 22, paragraph 4 of TPSOMEA, when applications shall have been filed by persons pursuant to Article 5, paragraph 2, subparagraphs 2 or 3; 5. (new subparagraph, SG No. 33/1996) the remuneration received in the enterprise by the persons under Article 5, paragraph 2, subparagraph 4 for the last 24 months, as corrected under the procedures of Article 22, paragraph 4 of TPSOMEA; 6. (new subparagraph, SG No. 33/1996) the sum of the abatement which the persons under Article 5, paragraph 2 of TPSOMEA shall be entitled to upon purchase of shares or joint stock under alleviated terms, and for the gratuitous obtaining of shares respectively in the cases described in Article 23ter of TPSOMEA; 7. (new subparagraph, SG No. 33/1996) the number of shares, which the person is entitled to acquire under alleviated terms or to obtain gratuitously. (2) (Amended SG No. 33/1996) The gross wages on the basis of which the amount of the discount is calculated shall include the employment contractual relations specified in Regulation No. 14 of the Ministry of Labour and Social Welfare of 1993 on the Elements of the Gross Wages Based on which Social Security Contributions are Paid (SG No. 107 of 1993), and for persons who have worked abroad and have received remuneration under an employment contract with the enterprise subject to privatization the gross wages shall include the social security income on the basis of which social security contributions were paid. (3) Certified copies of the report shall be posted in visible and accessible places in the area of the enterprise. (4) (Amended SG No. 33/1996) The persons specified in Article 5, paragraph 2 of TPSOMEA may lodge an objection to the enterprise for disputing the data included in the report under paragraph 1 within seven days of its announcement.

4 (5) (Amended SG No. 33/1996) Within two weeks after the expiry of the term specified in paragraph 1, the final report shall be prepared and certified by the enterprise's bodies and shall be submitted to the organ specified in Article 3 of TPSOMEA, and in case of privatization through investment bonds, the report shall be submitted to the Centre for Mass Privatization. A certified copy shall be kept in the enterprise's records. (6) Upon request by the persons specified in Article 5, paragraph 2 of TPSOMEA the enterprise shall issue a document to any person certifying the facts under paragraph 1, subparagraphs 2, 3 and 4. (Amended SG No. 33/1996) Article 6 (1) The price at which the persons specified in Article 5, paragraph 2 of TPSOMEA shall acquire interests or shares at preferential terms, shall be determined by the authority specified in Article 3 of said Act on the basis of the appraisal given in accordance with the Regulation on the Appraisal of Property Subject to Privatization (promulgated SG No. 50 of 1992, amended SG Nos. 9 and 30 of 1993, 53, 63 and 96 of 1994). (2) The number of shares which the persons specified in Article 5, paragraph 2 of TPSOMEA may obtain gratuitously shall be determined with consideration for the par value of such shares. (3) Where shares of a certain enterprise shall be offered for privatization and under the procedures set forth in Chapter Eight of TPSOMEA, the sum of the abatement which the persons under Article 5, paragraph 2 of said Act may be entitled to upon purchase of shares under alleviated terms and for the purpose of gratuitous obtaining of shares, shall be determined proportionally to the number of shares offered for privatization under the respective procedures. Section II PURCHASE OF SHARES UNDER PREFERENTIAL TERMS Article 7 The right to subscribe shares by the persons specified in Article 5, paragraph 2 of TPSOMEA shall be certified by the report provided for in Article 3 of this Regulation. Article 8 (1) The procedure and deadlines for subscribing shares under preferential terms by the persons specified in Article 5, paragraph 2 of TPSOMEA shall be determined by the documentation for the sale of the enterprises shares. The documentation shall be prepared by the authority under Article 3 of TPSOMEA or by other authorised persons.

5 (2) The subscribing of shares shall be done through an agent (bank or broker or other authorised persons) determined by the authority under Article 3 of TPSOMEA. (3) The persons specified in Article 5, paragraph 2 of TPSOMEA shall subscribe shares at preferential terms or gratuitously after filing a declaration according to a form for a one-time utilisation of the preference and for the number of shares which they wish to purchase. (4) When in case of acquisition of shares under preferential terms the total number of subscribed shares exceeds 20 per cent of the total number of the enterprise's shares, the number of subscribed shares by the persons specified in Article 5, paragraph 2 of TPSOMEA shall be reduced proportionately. The reduction shall be announced in visible and accessible places in the area of the enterprise. (Amended SG No. 33/1996) Article 9 (1) The subscribing of shares by the persons specified in Article 5, paragraph 2 of TPSOMEA in the cases of gratuitous obtaining of shares shall be performed in the respective enterprise within one month after the announcement of the final information report. (2) Within one week after the expiry of the time period specified in paragraph 1 the enterprise shall send to the Centre for Mass Privatization a list of all persons who have subscribed shares under paragraph 1, stating three names and the personal ID Numbers of such persons plus the number of shares each of them has subscribed. Such list shall be authenticated by the executive director of the company. Section III PURCHASE OF INTERESTS UNDER PREFERENTIAL TERMS Article 10 Following the expiration of the three-month period from the date of beginning of the sale of interests the enterprise shall convene a meeting of the persons specified in Article 5, paragraph 2 of TPSOMEA. The announcement shall be published in two central and one local daily newspapers and shall contain information on the agenda, the time and place of the meeting. Article 11 (1) The persons specified in Article 5, paragraph 2 of TPSOMEA who wish to participate in the acquisition of a joint interest under preferential terms shall submit an affidavit which shall state:

6 1. consent to acquire a joint interest pursuant to Article 23, paragraph 1 of TPSOMEA and at the determined by the authority under Article 3 of the same act price of the joint share; 2. the individual monetary contribution with which the person wishes to participate up to the amount specified in the report under Article 5 of this Regulation. (2) The meeting of the persons wishing to acquire a joint interest under preferential terms shall determine: 1. the size of the joint interest in accordance with Article 23, paragraph 1 of TPSOMEA; 2. the individual contributions of the co-owners of the joint interest; 3. the manner of disposal of the joint interest and a person who shall represent the owners. (3) When the total number of stated sums for participation exceeds the price of the joint interest as determined by the authority under Article 3 of TPSOMEA the meeting shall redistribute the individual contributions proportionately under the terms of Article 23, paragraph 4 of TPSOMEA. (4) Minutes signed by all the participants shall be kept at the meeting and sent to the authority designated under Article 3 of TPSOMEA. (5) The co-owners of the joint interest shall pay the determined pursuant to Article 11, paragraph 2, item 2 or paragraph 3 individual contribution within a time period specified by the authority under Article 3 of TPSOMEA. (6) Following the payment of all contributions a contract pursuant to Article 129, paragraph 2 of the Commerce Act for the transfer of the interest shall be concluded between the authority under Article 3 of TPSOMEA and the persons who have acquired a joint interest. (7) The relationship between the co-owners shall be regulated pursuant to Article 132 of the Commerce Act. (Repealed SG No. 33/1996) Article 12 CONCLUDING PROVISIONS 1. (1) In case of close down, merging or splitting of an enterprise the persons mentioned in article 5, paragraph 2, points 2 and 3 who have worked in reorganized enterprises shall claim their rights before the successor enterprises.

7 (2) Persons who have worked in closed down structural units of reorganized enterprises are entitled to choose between the successor companies. (3) In the cases of paragraphs 1 and 2 the activity under article 4 shall be carried out by the enterprises in which the records of the transformed enterprises and structural units are kept. 2. (Amended SG No. 33/1996) Interpretation and instructions on the application of this Regulation shall be given by the Privatization Agency as regards the acquisition of shares under alleviated terms and by the Centre for Mass Privatization as regards the gratuitous obtaining of shares. 3. This Regulation is issued pursuant to 16, paragraph 3 of the Transitional and Concluding Provisions, in connection with article 22, paragraph 2, article 23, paragraph 3 and article 24 of the Transformation and Privatization of State-Owned and Municipal Enterprises Act.