ARTICLES OF ASSOCIATION of GRUPA AZOTY S.A. (CONSOLIDATED TEXT REFLECTING THE AMENDMENTS INTRODUCED BY THE ANNUAL GENERAL MEETING OF JUNE 30TH 2017) I. GENERAL PROVISIONS Article 1 1. The Company operates under the name of Grupa Azoty Spółka Akcyjna. 2. The Company may use the abbreviated name of Grupa Azoty S.A.. 3. For commercial and marketing purposes, the Company may use a word and figurative mark of Grupa Azoty. 4. When used in these Articles of Association, the terms defined in the Accounting Act of September 29th 1994 or any other act replacing the same (the Accounting Act ), such as non-current assets, assets or contingent liabilities, shall have the meanings given to them in the Accounting Act. 5. When these Articles of Association refer to total assets, it shall be deemed a reference to total assets as disclosed in the most recent approved financial statements of the Company. 6. Whenever these Articles of Association refer to the value of the subject matter of a legal transaction based on which the right to use a Company s asset is granted to another entity, such value shall be understood as the value of benefits to which the Company is or would be entitled for the period of one year if the right is granted under an agreement concluded for an indefinite term, or over the entire term of the agreement if the right is granted under an agreement concluded for a definite term. 7. The terms used in singular shall have the same meaning when used in plural. Article 2 1. The Company s registered office shall be in Tarnów, Poland. 2. The Company shall operate in the Republic of Poland and abroad. 3. The Company may open and manage branches, production plants, offices, representative offices and other units, and may hold equity interests in other companies and undertakings in the Republic of Poland and abroad. Article 3 The Company was established following the transformation of the state-owned enterprise under the name of Zakłady Azotowe w Tarnowie.
Article 4 The Company was established for an indefinite period. II. COMPANY S BUSINESS Article 5 The Company s business shall comprise: 1) Manufacture of basic chemicals, fertilisers and nitrogen compounds, plastics and synthetic rubber in primary forms (PKD 20.1), 2) Manufacture of plastic products (PKD 22.2), 3) Manufacture of other chemical products (PKD 20.5), 4) Electric power generation, transmission and distribution (PKD 35.1), 5) Steam and air conditioning supply (PKD 35.3), 6) Manufacture of other special-purpose machinery n.e.c. (PKD 28.99.Z), 7) Engineering activities and related technical consultancy (PKD 71.12.Z), 8) Construction of buildings (PKD 41), 9) Civil engineering (PKD 42), 10) Specialised construction activities (PKD 43), 11) Educational support activities (PKD 85.60.Z), 12) Other education (85.5), 13) Other personal service activities n.e.c. (PKD 96.09.Z), 14) Research and experimental development on natural sciences and engineering (PKD 72.1), 15) Wholesale on a fee or contract basis (PKD 46.1), 16) Other specialised wholesale (PKD 46.7), 17) Water collection, treatment and supply (PKD 36), 18) Advertising (PKD 73.1), 19) Market research and public opinion polling (PKD 73.2), 20) Land transport and transport via pipelines (PKD 49), 21) Warehousing and support activities for transportation (PKD 52), 22) Telecommunications (PKD 61), 23) Real estate activities (PKD 68), 24) Architectural and engineering activities and related technical consultancy (PKD 71.1), 25) Technical testing and analysis (PKD 71.2), 26) Management consultancy activities (PKD 70.2), 27) Accounting, bookkeeping and auditing activities; tax consultancy (PKD 69.2), 28) Employment activities (PKD 78), 29) Repair of fabricated metal products, machinery and equipment (PKD 33.1), 30) Installation of industrial machinery and equipment (PKD 33.2), 31) Specialised design activities (PKD 74.1),
32) Other professional, scientific and technical activities n.e.c. (PKD 74.9), 33) Computer programming, consultancy and related activities (PKD 62), 34) Information service activities (PKD 63), 35) Repair of computers and communication equipment (PKD 95.1). III. CAPITAL Article 6 Upon the transformation of a state-owned enterprise into a joint-stock company, the Company s equity was covered with the initial capital, the capital of a state-owned enterprise and the retained earnings/deficit for the period of operations prior to the transformation of the enterprise referred to in Article 3. Article 7 1. The share capital of the Company amounts to PLN 495,977,420.00 (four hundred and ninety-five million, nine hundred and seventy-seven thousand, four hundred and twenty złoty) and is divided into 99,195,484 (ninety-nine million, one hundred and ninety-five thousand, four hundred and eighty-four) shares with a par value of PLN 5.00 (five złoty) per share, including: a) 24,000,000 (twenty-four million) Series AA bearer shares numbered from AA 000000001 to AA 024000000; b) 15,116,421 (fifteen million, one hundred and sixteen thousand, four hundred and twenty-one) Series B bearer shares; c) 24,999,023 (twenty-four million, nine hundred and ninety-nine thousand and twenty-three) Series C ordinary bearer shares; d) 35,080,040 (thirty-five million, eighty thousand and forty) Series D ordinary bearer shares. 2. Series AA shares were issued to the holders of Series A registered shares in such a way that for one Series A registered share its shareholder acquired 10 Series AA bearer shares. 3. Until the invalidation of certificates for Series A registered shares, the Management Board shall keep a share register for series A registered shares. The Management Board may engage a brokerage house to keep the share register. 4. Until Series AA shares are introduced to trading on the regulated market, certificates for Series AA shares will be kept in the depository of the brokerage house with which the Company has entered into an agreement referred to in Article 7.3 above. Article 8 Series AA shares are bearer shares issued in exchange for Series A registered shares. Certificates for Series A registered shares may be converted into bearer shares only by exchanging the certificates for Series AA shares.
Article 9 1. The Company s shares may be cancelled. Cancellation of shares shall require the share capital to be reduced accordingly. 2. Cancellation of shares shall require the shareholder s consent. 3. The procedure to be followed in the event of share cancellation shall be determined by resolution of the General Meeting. Article 10 1. Subject to Article 10.3 5, the share capital may be increased by resolution of the General Meeting through the issue of new (registered or bearer shares) or increase of the par value of existing shares. 2. The share capital may be increased by increasing the par value of shares exclusively with the Company s own funds. 3. The Management Board is authorised to increase the Company s share capital by issuing new shares with a total par value of up to PLN 240,432,915, by way of an increase of the share capital within the limits defined above ( Authorised Share Capital ). The share capital may be increased within the limits of Authorised Share Capital only for the purpose and on the terms stipulated in Article 10.4 below. The Management Board s authorisation to increase the share capital and issue new shares within the limits of Authorised Share Capital shall expire within six months from the date of registration of the amendments that introduce the Authorised Share Capital. 4. Within the limits the Authorised Share Capital, the Management Board shall be authorised to offer Company shares, with the existing shareholders pre-emptive rights waived, only to the shareholders of Zakłady Azotowe Puławy S.A. of Puławy, entered in the Business Register of the National Court Register under entry No. KRS 0000011737 ( ZA Puławy ), in exchange for a non-cash contribution in the form of shares in ZA Puławy, so that one share in ZA Puławy shall be deemed a non-cash contribution to cover 2.5 Company shares issued within the limits of Authorised Share Capital. A Management Board s resolution to issue shares in exchange for a non-cash contribution in the form of shares in ZA Puławy shall not require approval by the Supervisory Board. 5. In the Company s interest the Management Board is authorised to waive, in whole or in part, the existing shareholders pre-emptive rights to acquire shares issued within the limits of Authorised Share Capital only to offer such shares to the shareholders of ZA Puławy in accordance with the rules described in Article 10.4 above. 6. Unless stipulated otherwise in Article 10.7 or in the Commercial Companies Code, the Management Board shall decide on all matters connected with a share capital increase within the limits of Authorised Share Capital; in particular the Management Board is authorised to: 1) enter into agreements providing for the organisation and execution of a share issue, 2) adopt resolutions and take other steps relating to the conversion of shares and allotment certificates into book-entry form as well as to enter into agreements with the Central Securities Depository of Poland on the registration of shares and allotment certificates,
3) adopt resolutions and take other steps relating to issue of shares by way of a public offering or seeking admission of shares and allotment certificates to trading on the regulated market, as the case may be. 7. A Management Board resolution on: 1) share capital increase within the limits of Authorised Share Capital, 2) definition of the issue price for shares issued within the limits of Authorised Share Capital, and 3) waiver of pre-emptive rights shall require approval by the Supervisory Board. Article 11 The Company may acquire its own shares in cases provided for in Article 362.1 of the Commercial Companies Code. Article 12 The share capital may be reduced in accordance with the rules set forth in Article 455 458 of the Commercial Companies Code. Article 13 The share premium from new shares issued by the Company shall be recognised under statutory reserve funds. IV. RIGHTS AND OBLIGATIONS OF THE SHAREHOLDERS The Company shares shall be transferable. Article 14 Article 15 1. Eligible employees shall have the right to acquire free of charge up to 15% of the shares subscribed for by the State Treasury on the date of registration of the Company, on the terms and conditions stipulated in the Act on Commercialisation and Privatisation and in the Regulation of the Minister of State Treasury on detailed rules governing the division of eligible employees into groups, determination of the number of shares to be allocated to each group, and on the procedure for acquisition of shares by eligible employees, dated January 29th 2003 (Dz.U. No. 35, item 303). 2. Shares acquired by eligible employees in accordance with Article 15.1 above may not be traded prior to the lapse of two years from the date of sale of the first shares by the State Treasury on general terms, with the proviso that any shares acquired by employees holding the position of the Company s Management Board members may not be traded prior to the lapse of three years from the date of sale of the first shares
by the State Treasury on general terms. Such shares may not be converted into bearer shares in the periods indicated above. 3. During the time limits referred to in Article 15.2 above, shares acquired by eligible employees may not be subject to a squeeze-out as referred to in Article 418 of the Commercial Companies Code. 4. The Company shall provide the State Treasury with assistance in connection with the exercise by the employees of the right referred to in Article 15.1 above. Article 16 1. The Shareholders shall have the rights laid down in these Articles of Association and in the law. 2. The State Treasury of Poland, as a Shareholder, has an individual right to appoint and remove one member of the Supervisory Board. The Shareholder s declaration of will shall be made in the form of a written statement addressed to the Company or in the form of a statement made for inclusion in the minutes of the General Meeting by the entity authorised to exercise rights attached to the shares held by the State Treasury. V. COMPANY S GOVERNING BODIES The Company s governing bodies shall be: 1) the Management Board 2) the Supervisory Board 3) the General Meeting. Article 17 Article 18 1. Subject to the mandatory provisions of the Commercial Companies Code and these Articles of Association, resolutions of the Company s governing bodies shall be passed by an absolute majority of votes cast. An absolute majority of votes shall mean more affirmative votes cast than the aggregate of negative and abstaining votes. 2. If the number of votes cast in favour of a resolution by the Management Board members equals the sum of votes cast against the resolution and abstaining votes, the President of the Management Board shall have the casting vote, and if the number of votes cast in favour of a resolution by the Supervisory Board members equals the sum of votes cast against it and abstaining votes, the Chairperson of the Supervisory Board shall have the casting vote.
A. THE COMPANY S MANAGEMENT BOARD Article 19 1. The Management Board shall manage the Company s affairs and represent the Company in all court and non-judicial activities. 2. Any matters related to the Company s business, not reserved for the General Meeting or the Supervisory Board pursuant to the law or these Articles of Association, shall fall within the powers of the Management Board. Article 20 1. Submission of declarations on the Company s behalf shall require joint action by two Management Board members or one Management Board member and a commercial proxy. In the case of a one-member Management Board, the Company shall be represented by the sole member of the Management Board. 2. A commercial proxy shall be appointed by unanimous resolution of all members of the Management Board. Power of proxy may be revoked by any member of the Management Board. 3. The Management Board shall operate in accordance with the detailed Rules of Procedure adopted by the Management Board and approved by the Supervisory Board. Article 21 1. Any matters outside the ordinary course of the Company s business shall require a resolution of the Management Board. Any Management Board member may request passing a resolution on matters concerning the Company. The President of the Management Board may not refuse to put such a matter to vote. 2. The following matters shall require a resolution of the Management Board: 1) adoption of the rules of procedure for the Management Board, 2) approval of the Organisational Rules which regulate the internal organisation of the Company s Business, 3) opening and closing of branches, plants, offices, representative offices and other units referred to in Article 2.3, 4) appointment of commercial proxy, 5) borrowing and lending, subject to Article 32.2.2 of these Articles of Association, 6) issue of bonds, except for issue of bonds convertible into shares or bonds with pre-emption rights to shares, and subject to the powers of the Supervisory Board specified in Article 32.2.2, 7) adoption of annual business and financial plans, as well as long-term strategic plans, 8) approval of periodic risk management policies, 9) approval of the financial statements and the Directors report on the Company s operations, 10) assumption of contingent liabilities, including grant of guarantees and sureties, or assumption of liability by the Company for a third party debt, as well as issue, acceptance, grant and endorsement of promissory notes, subject to Article 32.2.2,
11) disposal, acquisition and encumbrance with limited property rights of non-current assets with a market value equal to or higher than PLN 50,000 (fifty thousand złoty), subject to Articles 32.2.1 2 and 50.1.8 9 of these Articles of Association, 12) matters referred by the Management Board for consideration to the Supervisory Board or the General Meeting. Article 22 1. The Management Board shall prepare the plans referred to in Article 21.2.7 and submit them for approval by the Supervisory Board. 2. In the case of investment or modernisation projects which are not included in the Company s annual budget and following which the value of a given intangible asset or item of property, plant and equipment would change by more than PLN 2,000,000 (two million złoty), the Management Board shall submit the project along with its rationale to the Supervisory Board for approval. Article 23 1. The Company s Management Board shall consist of no more than seven persons, including the President, Vice Presidents and other Members. The number of Management Board members shall be defined by the governing body that appoints the Management Board. 2. Members of the Management Board are appointed for a joint three-year term of office. 3. A Member of the Management Board: 1) shall meet all of the following criteria: a) he/she has a university degree obtained in Poland or a university degree obtained abroad and recognised in Poland under separate provisions, b) he/she has at least five years of employment under a contract of employment, election or appointment, an employment contract for cooperative members, other agreement for the provision of services, or as a business owner, c) he/she has at least three years of experience serving in managerial or senior positions or as a business owner, d) he/she meets other requirements stipulated in generally applicable laws and not listed in items a d above; in particular, he/she is not in breach of any limitations or restrictions on serving on the management bodies of commercial-law companies; 2) may not be a person who meets at least one of the following criteria: a) he/she works at the office of a member of the Polish Parliament (Sejm or Senate) or of a member of the European Parliament as a volunteer or under an employment, temporary employment or similar contract, b) he/she is a member of a political party s body representing the party before third parties and authorised to assume obligations, c) works for a political party under an employment, temporary employment or similar contract,
d) holds an elected position in a trade union operating at the Company or any Group company, e) his/her social or professional activities give rise to a conflict with the interests of the Company.. Article 24 1. Subject to Article 25 et seq. of these Articles of Association, members of the Management Board are appointed by the Supervisory Board following a recruitment process held to verify and evaluate qualifications of candidates and to select the best candidate. The General Meeting shall determine the rules and procedures for the recruitment process in a resolution. 2. Any member of the Management Board may be removed or suspended from duties by the Supervisory Board or the General Meeting. 3. Members of the Management Board shall tender their resignations in writing to the Supervisory Board. Article 25 1. As long as the Company employs an annual average of above 500 employees, the Supervisory Board appoints one person elected by Company employees to the Management Board, for the Management Board s term of office. 2. A person is considered to be a Management Board candidate elected by the employees if 50% plus one valid votes are cast in favour of such a person during the election. The election results are binding on the Supervisory Board if at least 50% of all eligible employees participate in the election. 3. A candidate for an employee-elected member of the Management Board may be a person meeting the requirements specified in Article 23.3. 4. The election is a direct election held by secret ballot and open to all employees, and is conducted by the Election Committees appointed by the Supervisory Board from among the Company s employees. A Management Board candidate cannot serve on the Election Committee. 5. Failure by the Company s employees to elect a member of the Management Board does not prevent the Management Board from adopting valid resolutions. 6. The Company s Management Board shall offer any assistance required to hold the election. 7. The Supervisory Board shall adopt detailed rules of procedure for the appointment and removal from office of Management Board members elected by employees and for holding by-elections, in accordance with the rules set forth below. In contentious matters, the Supervisory Board shall interpret the Articles of Association and the rules of procedure for such election. 8. Election of employee representatives to the Management Board shall be called by the Supervisory Board, subject to the provisions of Article 26. 9. The following rules and procedures shall apply to the appointment and removal from office of Management Board members elected by employees and to by-elections: 1) The elections shall be organised and conducted by the Election Committee; If the Company has a multi-plant structure, the election shall be organised and
conducted by the Central Election Committee with support from Divisional Election Committees; 2) The Election Committees shall be responsible for efficient handling of the election process, in accordance with applicable laws, these Articles of Association, and the Committees rules of procedure; 3) The scope of responsibilities of the Central Election Committee shall include in particular: a) preparation and publication of the Committees rules of procedure, b) preparation of the list of electoral districts and the election schedule, c) verification and registration of voter lists and determination of the number of employees holding active voting rights on the day of the vote, d) regular supervision of the election process in individual electoral districts and the activities of District Election Committees, as well as handling of complaints concerning the election, e) registration of candidates and publication of the list of candidates, f) preparation of voting cards and ballot boxes, g) supervision of the voting process, vote counting, drawing up the final minutes and determining the election results, h) supervision of strict compliance with the provisions of these Articles of Association concerning elections, i) selection of the official template of the election seal; 4) The scope of responsibilities of District Election Committees shall include in particular: a) verification of voter lists in a given election district and determination of the number of employees holding active voting rights on the day of the vote in the election district, b) holding the vote and delivering the ballot boxes to the Central Election Committee, c) cooperation with the Central Election Committee, in particular in counting the votes. 5) The passive voting right is held by any person nominated in accordance with Article 25.9.6 7 below; 6) Candidates may be nominated by each trade union organisation active at the Company and each group of 50 or more employees. An employee may endorse only one candidate; 7) Nominations shall be submitted to the Central Election Committee in writing, no later than seven days before the scheduled election date; 8) If no candidate is elected in accordance with Article 25.2, the second round of the election shall be held to vote on the two candidates who received the largest number of votes during the first round; 9) The second round of the election shall be held in accordance with the procedure prescribed for the first round, subject to the modifications following from Article 25.9.8; 10) Having determined the final election results, the Central Election Committee shall provide the voting documentation to the Supervisory Board. Having reviewed the voting documentation, the Supervisory Board shall confirm the validity of elections and make a relevant announcement. If a gross breach of
applicable regulations or other irregularities which might affect the election results are identified, the Supervisory Board shall invalidate the election and call another election; 11) A request to remove the Management Board member elected by the Company s employees shall be submitted to the Management Board, which shall transfer it promptly to the Supervisory Board; 12) Subject to Article 27, the vote on removal from office of a Management Board member elected by employees shall be held in accordance with the procedures that applied to the member s appointment. Article 26 1. The Supervisory Board shall call the election of a candidate for the position of the Management Board member elected by the Company s employees for the next term of office within two months from the end of the last full financial year during such member s mandate. Such election should be held within one month from the date on which it is called by the Supervisory Board. 2. In the event of removal from office, resignation or death of the member of the Management Board elected by the employees, a by-election shall be held. 3. A by-election or vote on removal from office of an employee-elected member of the Management Board shall be called by the Supervisory Board within one month from the date on which the Supervisory Board becomes aware of an event justifying the byelection or vote. The by-election or vote shall be held within one month from the date it is called by the Supervisory Board. 4. The provisions of Article 25 shall apply to the by-elections. Article 27 Upon a written request of 15% or more of Company employees the Supervisory Board shall call a vote on removal from office of the Management Board member elected by the employees. The election results are binding on the Supervisory Board if at least 50% of all eligible employees participate in the election and the same majority of votes as required in the election is obtained. Article 28 If a Management Board member elected by employees continues to be employed in a nonmanagerial position, the Company shall enter into an agreement for the provision of management services with that Management Board member after his/her appointment to the Management Board. At his/her request, the member shall be granted unpaid leave under the existing employment contract for the time of serving on the Management Board.
Article 29 Remuneration for the Management Board members shall be determined by the Supervisory Board pursuant to the rules stipulated in the General Meeting s resolution on the rules for determining remuneration for members of the Company s Management Board. Article 30 1. The Company shall be the employer within the meaning of the Labour Code. 2. Any acts falling within the scope of labour law shall be performed by a person designated by the Management Board. B. SUPERVISORY BOARD Article 31 The Supervisory Board exercises ongoing supervision of the Company s operations in each area of its activity. Article 32 1. The powers and responsibilities of the Supervisory Board shall include: 1) appointment and removal from office of Management Board members, 2) determination of the rules and amounts of remuneration of Management Board members, 3) suspension from duties, for a good reason, of individual or all Management Board members, 4) delegation of Supervisory Board members to temporarily replace Management Board members who are unable to perform their duties, 4a) determining the remuneration for a Supervisory Board member delegated to temporarily perform the duties of a Management Board member not exceeding the fixed component of the monthly remuneration of the Management Board member whose duties are delegated to the Supervisory Board member, in accordance with the rules for determining remuneration for members of the Company s Management Board approved by the General Meeting. 5) grant of consent for Management Board members to serve on governing bodies of other companies, 6) assessment of the Directors Report on the Company s operations and the financial statements for the preceding financial year in terms of their consistency with the accounting books, supporting documentation, and the actual state of affairs, 7) assessment of the Management Board s recommendations on distribution of profit or coverage of loss, 8) submission of written reports on the results of the assessments referred to in item 6 and 7 above to the General Meeting, 9) assessment of the Directors Report on the Group s operations and the consolidated financial statements of the Group for the preceding financial year in
terms of their consistency with the accounting books, supporting documentation, and the actual state of affairs, and submission to the General Meeting of written reports on the results of such assessments, if the obligation to prepare consolidated financial statements follows from the Accounting Act of September 29th 1994 (Dz.U. of 2002, No. 76, item 694, as amended) ( Accounting Act ), 10) appointment of the auditor to perform the review and audit of the financial statements of the Company and the consolidated financial statements of the Group, 11) determination of the scope and submission dates of annual budgets as well as long-term strategic plans, 12) approval of the Company s long-term strategic plans, 13) approval of annual budgets including capital expenditure budgets, 14) adoption of detailed rules governing the Supervisory Board s operation, 15) adoption of the consolidated text of the Company s Articles of Association prepared by the Management Board, 16) approval of the rules of procedure for the Company s Management Board, 17) approval of the rules on donations, 18) giving opinions on all matters submitted by the Management Board for consideration to the General Meeting, 19) preparation of a report on the assessment of the Company s compliance with the adopted corporate governance standards in the reporting period, to be submitted to the Annual General Meeting, 20) preparation of a report on the activities of the Supervisory Board, including the activities of the Supervisory Board committees, and assessment of the work of the Management Board, to be submitted to the Annual General Meeting, 21) preparation of a report on the assessment of the Company s condition, including evaluation of its internal control and risk management systems, to be submitted to the Annual General Meeting. 2. The powers and responsibilities of the Supervisory Board include granting consent to the Management Board for: 1) acquisition or disposal of real property or perpetual usufruct right, or of an interest in real property or perpetual usufruct right, 2) a legal transaction if the value of the subject matter of the transaction exceeds PLN 6,000,000 (six million złoty), excluding: a) transactions included in the approved annual budgets, b) contracts concluded in the ordinary course of the Company s business, i.e. contracts for the sale of products manufactured by the Company, sale of merchandise and for the purchase of merchandise, raw materials and feedstocks, 3) the Company s entering into a donation agreement or an arrangement having a similar effect, as well as a debt cancellation agreement or another legal arrangement having a similar effect, in both cases if the value of the subject matter of such transaction exceeds PLN 20,000 (twenty thousand złoty) or 0.1% of the Company s total assets, 4) execution of a material related-party agreement, excluding contracts concluded in the ordinary course of the Company s business, i.e. contracts for the sale of
products manufactured by the Company, sale of merchandise and for the purchase of merchandise, raw materials and feedstocks concluded on an arm s length basis, 5) execution or amendment of an agreement for the provision of legal services, marketing services, public relations and social communication services, or management consultancy services, if the total fees for the services to be provided under such agreement exceed PLN 500,000 (five hundred thousand złoty), VAT exclusive, per year, or if the lump-sum or maximum amount of the fees is not provided for in the agreement, 6) establishment of another company or joining of another company by the Company, 7) formation or co-financing by the Company of foundations or other organisations other than commercial-law companies, 8) formation of the Company s establishments, offices, branches or representative offices abroad, 9) approval of periodic risk management policies, 10) exercising voting rights at the general meetings of companies in which the Company holds at least a 50% interest where the voting concerns any of the following issues: a) amendments to the company s articles of association, b) increase in or reduction of the company s share capital, c) merger, transformation or demerger of the company, d) disposal of the company shares, e) disposal or lease of the company s business or its organised part, or establishment of limited property rights in the company s business or its organised part, or acquisition or disposal of ownership rights to real property or perpetual usufruct right to real property or of an interest in ownership rights to real property or perpetual usufruct right to real property, f) dissolution and liquidation of the company. 3. A refusal by the Supervisory Board to grant approval regarding the matters referred to in Article 32.2 above shall require a justification. 4. The Supervisory Board s approval regarding the matters referred to in Articlde 32.2 shall not be required with respect to any activities whose performance requires approval by the General Meeting in accordance with the applicable statutory provisions or these Articles of Association. Article 33 1. The Supervisory Board may delegate individual members to perform certain supervisory functions independently for a specified term. 2. A Supervisory Board member so delegated must submit written reports to the Supervisory Board on all actions taken. 3. The Supervisory Board shall appoint the Audit Committee from among its members. The tasks of the Audit Committee should be defined in compliance with applicable laws. A majority of the Audit Committee members, including its chairperson, should meet the independence criteria defined in applicable laws, and at least one member of the Audit Committee should have expertise and competence in accounting or auditing of financial statements. The Audit Committee members should also have the knowledge of and the skills required in the industry in which the Company operates.
Article 34 1. The Supervisory Board shall be composed of 5 (five) to 9 (nine) members appointed by the General Meeting, subject to the provisions of Article 16.2 and Article 35 of these Articles of Association. 2. Members of the Supervisory Board shall be appointed for a joint three-year term of office. 3. A member of the Supervisory Board appointed by the General Meeting may be removed by the General Meeting at any time. 4. At least two members of the Supervisory Board should be independent members that meet all of the independence criteria set out in Annex II to the Commission Recommendation of 15 February 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board (EU OJ L 52/52 of 2005). Article 35 1. In the composition of the Supervisory Board there are members appointed by the Company employees, pursuant to Article 14 of the Act on Commercialisation and Certain Employee Rights. 2. The procedure for appointment and removal of Supervisory Board members elected from among candidates nominated by the employees is defined in detail in the Electoral Rules of Procedure adopted by the Supervisory Board by way of a resolution. Article 36 1. The Chairperson of the Supervisory Board is appointed by the General Meeting. The Deputy Chairperson and the Secretary are elected by the Supervisory Board, at its first meeting, from among its members. 2. The Supervisory Board s meetings shall be presided over by the Chairperson or, in the absence of the Chairperson, by the Deputy Chairperson. 3. Any statements or notices addressed to the Supervisory Board between its meetings shall be made or given to the Chairperson or, if impossible, to the Deputy Chairperson of the Supervisory Board. Article 37 1. The Supervisory Board meetings shall be held at least once every two months. 2. The Chairperson or the Deputy Chairperson of the Supervisory Board shall convene the Supervisory Board meetings and shall prepare detailed drafts of the meeting agenda. 3. A Supervisory Board meeting shall be convened at the request of a Supervisory Board member or at the request of the Management Board. 4. Meetings of the Supervisory Board shall be recorded in the minutes, in accordance with Article 391.2 of the Commercial Companies Code.
Article 38 1. To convene a Supervisory Board meeting, all members of the Supervisory Board must be notified of the meeting in writing at least seven days in advance. The notices may be also delivered by courier, fax or otherwise, against confirmation of receipt, subject to the time limit specified above. For important reasons, the Chairperson of the Supervisory Board may shorten the time limit to two days, specifying the manner of notice delivery. 2. In the invitation to the meeting, the Chairperson shall specify the date, place and detailed agenda of the meeting. 3. The proposed agenda may be changed if all Supervisory Board members attend the meeting and none of them objects to such change. 4. The Supervisory Board may meet and adopt resolutions without a formally convened meeting, provided that all members of the Supervisory Board are present and none of them objects to holding the meeting or bringing individual items to the agenda of the meeting. Article 39 1. The Supervisory Board may adopt resolutions if at least half of its members are in attendance and all of its members have been invited. 2. The Supervisory Board adopts its resolutions in an open vote. 3. A secret ballot shall be called at the request of a Supervisory Board member and when the voting concerns personnel matters. In the event of voting by secret ballot, the provisions of Article 39.4 below shall not apply. 4. The Supervisory Board may adopt resolutions by written ballot or with the use of means of remote communication, subject to Article 388.4 of the Commercial Companies Code. To apply this procedure, a justification and a draft resolution must first be presented to all members of the Board. 5. Resolutions adopted by written ballot in accordance with Article 39.4 shall be presented at the next meeting of the Supervisory Board, together with the results of the vote. Article 40 1. The Supervisory Board shall represent the Company in all agreements and disputes with the Management Board members. When concluding an agreement with a Management Board member, the entire content of the Company s legal act should be included in the resolution of the Supervisory Board. The Chairman of the Supervisory Board or another member of the Supervisory Board appointed in the Supervisory Board s resolution may sign documents for the Supervisory Board. 2. The Supervisory Board shall be represented before the court or conciliation court, by a process agent appointed by the Supervisory Board by way of a resolution. 3. The Supervisory Board may authorise its Chairperson or Deputy Chairperson to perform certain activities falling within the scope of the legal relationship between the Company and a Management Board member. The Chairperson and Deputy Chairperson of the Supervisory Board, as appropriate, shall inform the Supervisory
Board, at its next meeting, about all activities performed by them in the exercise of the authority granted to them by the Supervisory Board. Article 41 1. Members of the Supervisory Board shall exercise their rights and perform their duties personally. 2. Participation in Supervisory Board meetings is a duty of Supervisory Board members. Any absence of a Supervisory Board member from a meeting shall be explained by such member in writing. 3. Members of the Supervisory Board shall receive remuneration and reimbursement of the costs incurred in connection with their services. C. GENERAL MEETING Article 42 1. The General Meeting shall be convened by the Company s Management Board: 1) on its own initiative, 2) at the request of the Supervisory Board, expressed in the Supervisory Board s resolution, 3) at the request of a shareholder or shareholders representing at least onetwentieth of the share capital, submitted in written or electronic form at least one month before the proposed date of the General Meeting, 4) at the request of the State Treasury as a shareholder, irrespective of its interest in the Company s share capital, submitted in writing at least one month before the proposed date of the General Meeting. 2. The General Meeting should be convened within 2 (two) weeks of the date of the request referred to in Article 42.1.2 4. 3. If the General Meeting is not convened within the time limit specified in Article 42.2: 1) If a request to convene the meeting has been made by the Supervisory Board - it becomes entitled to convene the General Meeting, 2) if a request to convene the meeting has been made by the shareholders specified in Articles 42.1.3 or 42.1.4, the Registry Court may authorise the requesting shareholders to convene an Extraordinary General Meeting, in which case the chairperson of such meeting shall be appointed by the court. The notice convening the Extraordinary General Meeting should refer to the decision of the Registry Court. 4. Notwithstanding the provisions of Article 42.1 3, an Extraordinary General Meeting may also be convened by: 1) the Supervisory Board, whenever it deems it advisable, by way of a resolution; 2) a shareholder or shareholders representing at least half of the share capital. Such shareholders shall designate the Chairperson of the Meeting. 5. The date of an Extraordinary General Meeting shall fall no later than on the 35th (thirty-fifth) day after the date of convening the Meeting.
Article 43 General Meetings shall be held in the Company s registered office or in Warsaw. Article 44 1. A General Meeting shall be convened by posting a notice on the Company s website and in the manner prescribed for publication of current reports, in accordance with the provisions of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading and Public Companies. The notice should be published at least twenty-six (26) days before the date of the General Meeting. 2. A General Meeting may only adopt resolutions concerning matters included in its agenda, subject to Article 404 of the Commercial Companies Code. 3. The agenda of a General Meeting shall be prepared by the Management Board or another entity convening the Meeting. By way of a resolution, the General Meeting may change the order of items on the agenda. 4. A shareholder or shareholders representing at least one twentieth of the Company s share capital may request that certain issues be placed on the agenda of the next General Meeting. The same right is held by the State Treasury as the Company s shareholder, irrespective of its interest in the share capital. 5. The request referred to in Article 44.4 should be submitted to the Management Board no later than twenty-one days prior to the scheduled date of the Meeting. The request should include the grounds for, or a draft resolution pertaining to, the proposed agenda item. The request may be submitted in electronic form. 6. If the request referred to in Article 44.4 is submitted after the time limit prescribed in Article 44.5, it shall be regarded as a request to convene an Extraordinary General Meeting. 7. Changes to the agenda made upon a shareholder s request must be announced by the Management Board promptly, and in any case no later than eighteen (18) days prior to the scheduled date of the General Meeting. Such changes shall be announced in the manner provided for the notice convening the General Meeting. 8. Prior to the date of the General Meeting, a shareholder or shareholders representing at least one-twentieth of the Company s share capital may submit to the Company draft resolutions on the matters included or to be included in the agenda of the General Meeting, in writing or with the use of electronic means of communication. The Company promptly publishes such draft resolutions on its website. Article 45 The General Meeting shall be opened by the Chairperson or Deputy Chairperson of the Supervisory Board and if these persons are absent by the President of the Management Board or a person appointed by the Management Board. Subsequently, subject to Article 42.3.2 and Article 42.4.2 of these Articles of Association, the Chairperson of the General Meeting shall be elected from among those entitled to participate in the Meeting.
Article 46 1. The General Meeting has the capacity to adopt resolutions irrespective of the number of shares represented at the Meeting, unless the Commercial Companies Code or these Articles of Association provide otherwise. 2. Subject to Article 46.3 7 below, one share carries one vote at the General Meeting. 3. As long as the State Treasury of Poland or its subsidiaries hold shares in the Company representing at least one fifth of total voting rights, the other shareholders voting rights will be limited in such a manner that no shareholder may exercise more than one fifth of total voting rights at the General Meeting existing on the day of the General Meeting. The limitation on voting rights referred to in the preceding sentence shall not apply to the State Treasury or any of its subsidiaries. For the purposes of this Article 46.3, the exercise of voting rights by a subsidiary shall be deemed the exercise of voting rights by its parent as defined in the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies of July 29th 2005 (the Public Offering Act ), and the terms parent and subsidiary shall include any entity whose voting rights attached to shares held, directly or indirectly, in the Company are aggregated with the voting rights of another entity or entities, in accordance with the Public Offering Act, in connection with the holding, disposal or acquisition of major holdings in the Company. A shareholder whose voting rights are subject to the limitation shall in any case retain the right to cast at least one vote. 4. Subject to Article 46.3 above, for the purpose of this article, a parent or a subsidiary shall also be any person that: 1) is a parent, a subsidiary, or both a parent and subsidiary, within the meaning of the Act on Competition and Consumer Protection of February 16th 2007; or 2) is a parent, a higher-tier parent, a subsidiary, a lower-tier subsidiary, a jointlycontrolled entity or both a parent (including a higher-tier parent) and a subsidiary (including a lower-tier subsidiary and a jointly-controlled entity) within the meaning of the Accounting Act of September 29th 1994; or 3) exerts (in the case of a parent) or is subject to (in the case of a subsidiary) decisive influence within the meaning of the Act on the Transparency of Financial Relations between State Authorities and State-Controlled Enterprises, and on Financial Transparency of certain Enterprises, dated September 22nd 2006. 5. A shareholder within the meaning of this article is any person, including a parent and a subsidiary of such person, who is directly or indirectly entitled to exercise voting rights at the General Meeting under any legal title; this includes persons who do not hold shares in the Company, in particular usufructuaries, pledgees, as well as persons entitled to participate in the General Meeting despite having disposed of their shareholdings after the record date. 6. Shareholders whose voting rights are aggregated or reduced pursuant to the rules described above, are jointly referred to as a Grouping. The aggregation of voting rights shall consist in summing up all voting rights held by individual shareholders comprising a Grouping. The reduction of voting rights shall consist in decreasing the total number of voting rights at the General Meeting held by shareholders comprising a Grouping. The reduction of voting rights shall be made as follows: 1) the number of voting rights of the shareholder holding the highest number of
voting rights at the Company from among all shareholders comprising a Grouping shall be reduced by the number of voting rights in excess of one fifth of the total number of voting rights at the Company held by all shareholders in the Grouping; 2) if despite the reduction referred to in item 1 above the total number of voting rights at the General Meeting held by the shareholders comprising the Grouping exceeds the limit referred to in Article 46.3, the number of voting rights held by the other shareholders in the Grouping shall be further reduced. Such further reduction shall be made in an order established based on the number of voting rights held by the individual shareholders comprising the Grouping (from the highest to the lowest). The number of voting rights of the Grouping shall be further reduced until the number of voting rights held by the shareholders comprising the Grouping does not exceed one-fifth of the total vote at the Company; 3) the limitation of voting rights also applies to shareholders absent from the General Meeting. 7. In case of doubt, the provisions of this Article 46 should be interpreted in accordance with Article 65.2 of the Civil Code of April 23rd 1964. Article 47 A General Meeting may order an adjournment with a majority of two-thirds of total voting rights. The adjournments may not exceed 30 days in aggregate. If the shares are sold before the closing of the General Meeting, the seller loses the right to participate in the General Meeting. During the adjournment of a General Meeting, no right to participate in the General Meeting may be acquired. Article 48 Resolutions shall be passed at the General Meeting by open vote. A secret ballot shall be called to elect the Company s governing bodies or appoint a liquidator of the Company, vote on a proposal to remove or call to account members of the Company s governing bodies or its liquidators, and on personnel matters. A secret ballot shall also be called if at least one of the shareholders present or represented at the General Meeting so requests. Where the Commercial Companies Code or other applicable laws require a rollcall vote, a motion for secret ballot shall be ineffective. Article 49 An Annual General Meeting shall be held within six months from the end of each financial year. Article 50 In particular, the powers of the General Meeting shall include: 1) examination and approval of the financial statements for the previous financial year and the directors report on the company s operations,