Articles of Association Consolidated with the modifications effective from 27 March 2015

Transcription

1 Articles of Association Consolidated with the modifications effective from 27 March 2015 Pursuant to Act V of 2013 on the Civil Code (hereinafter: Civil Code), I, the undersigned shareholder of the private company limited by shares specified below (hereinafter: Company) hereby define the Articles of Association (hereinafter: Articles of Association) of the Company as follows. 1. Company name, registered seat, place(s) of business and branch(es) 1.1 Company name: OTP Jelzálogbank Zártkörűen Működő Részvénytársaság Name in English: OTP Mortgage Bank Close Company Limited by Shares Hungary Name in German: OTP Hypothekbank Geschlossene AG. Ungarn Abbreviated name: OTP Jelzálogbank Zrt. 1.2 Registered seat: 1051 Budapest, Nádor u The company has no premises. 1.4 The company does not have a branch. 2. Shareholder 2.1 The Company is a single-member company limited by shares. The sole shareholder of the company (hereinafter: Shareholder) is: Company name: OTP Bank Plc. Company registration number (registration number): Registered seat: 1051 Budapest, Nádor utca 16. Number of shares: 270,000, that is, two hundred and seventy thousand shares with a nominal value of HUF 100,000, that is, one hundred thousand forints each. Total ownership rights: 100 % 2.2 Upon signing these Articles of Association, the (founder) Shareholder makes a commitment for the subscription of all shares. Core activity: 3. Scope of activity TEÁOR Other credit granting activities (within that:) granting loans against collateral secured by a mortgage on a real estate located in Hungary (mortgage loan) granting loans secured by a government guarantee without mortgage 1

2 3.1 Other activities: - TEÁOR Other monetary intermediation (within that:) acceptance of repayable funds from the general public (excluding the collection of deposits) - TEÁOR Other activities auxiliary to financial services (within that:) establishing the fair market value and collateral value of real estates - TEÁOR Real estate agency activity (within that:) real estate appraisal 4. Term of operation 4.1 The Company s term of operation is indefinite. 5. Share capital and shares 5.1 The share capital of the Company (hereinafter: Share Capital) amounts to HUF 27,000,000,000, (a) that is, twenty-seven billion forints made up solely of cash contributions, (b) that is, HUF 0, zero forint asset contribution. 5.2 The Shareholder made the Share Capital available to the Company in its entirety. 5.3 The Share Capital of the Company consists of 270,000, that is, two hundred and seventy thousand registered, fully subscribed and paid up, dematerialised shares as per Section 5.4 with a nominal value of HUF 100,000, that is one hundred thousand forints each, amounting to a total value of HUF 27,000,000,000, that is, twenty-seven billion forints. 5.4 Types and classes of the shares issued by the Company: (a) The Company (aa) issued 270,000, that is, two hundred and seventy thousand pieces of ordinary shares with a nominal value of HUF 100,000, that is, one hundred thousand forints each, amounting to a total nominal value of HUF 27,000,000,000, that is, twentyseven billion forints, the accounting par value of which is identical with the nominal value of the shares. 5.5 Rights attached to the shares issued by the Company: (a) the rights attached to the ordinary shares issued by the Company are those defined in the Civil Code and these Articles of Association. 6. Register of shareholders 2

3 6.1 The management of the Company as specified in Section 11 shall keep a register of shareholders (hereinafter: Register of Shareholders), in which it shall record a) the name of the shareholder (if the shareholder is a natural person: place of residence, mother s name, citizenship; if the shareholder is a business: the registered seat of the shareholder); b) the number of shares for each series of shares; c) percentage of control of shareholders; d) in case of jointly owned shares, the details of the shareholders and the joint representative as defined in Paragraphs a c); e) the code, series and nominal value of the shares; f) the share category; g) the date when recorded in the share register; h) the date of overstamping; i) the date when the share is retired and destroyed; and j) the registration number and date of the supervisory resolution related to the acquisition of holding. 6.2 The general public shall have unlimited access to the Register of Shareholders. Upon explicit written request and at a pre-agreed date the Company shall provide continuous access to the Register of Shareholders at its registered seat during business hours. 7. Supplementary payments 7.1 In exercising its powers as a shareholder, the (sole) Shareholder may require at its sole discretion the provision of supplementary capital contributions in order to cover losses. 7.2 The method, as well as the timetable and deadlines for the provision of supplementary capital contributions shall be specified in the relevant resolution of the Shareholder (hereinafter: Shareholder s Resolution). 8. Transfer of shares 8.1 The transfer of shares is not rendered conditional upon the Company s approval. 9. Distribution of profits, dividends, interim dividends 9.1 The distribution of profits and the payment of dividends and interim dividends are governed by the relevant provisions of the Civil Code. 10. Shareholder s Resolution 10.1 The (sole) Shareholder shall function as the supreme body of the Company. In matters falling within the supreme body s competence the Shareholder shall take decisions in writing, and such decisions shall take effect when communicated to management. The Shareholder s Resolution shall also be deemed communicated in the event the Shareholder sends a signed and scanned electronic version of the Shareholder s Resolution to the address specified 3

4 by the managing director(s). In such cases, the Shareholder s Resolution shall become effective upon transmission to the specified address(es); however, the Shareholder shall deliver forthwith, but not later than within eight (8) days of the transmission of the , the original, signed copy of the Shareholder s Resolution to the managing director(s) via postal mail or courier service The following shall fall within the exclusive competence of the Shareholder: (a) to draw up and amend the Articles of Association; (b) to increase the share capital; (c) to decide on the transformation of the company limited by shares into another legal form of operation; (d) to change the rights associated with the various share series, and to change the share categories or classes; (e) to decide on the listing or withdrawal of the shares on/from the stock exchange; (f) to decide unless regulated otherwise by the Civil Code on the reduction of the share capital; (g) to decide on the transformation of the Company and its termination without a legal successor; (h) to decide on changing share categories; (i) to elect and dismiss the members of the Board of Directors, the Supervisory Board and the auditor, and to determine their remuneration; (j) to approve the balance sheet prepared in compliance with the Accounting Act, including the decision pertaining to the use of profit after taxation and the payment of interim dividends; (k) to approve the rules of procedure of the Supervisory Board; (l) to resolve on the issue of convertible bonds or bonds granting subscription right, unless stipulated otherwise in these Articles of Association; (m) to resolve on the transformation of printed shares issued formerly by the Company to dematerialised shares; (n) to decide on the prohibition of pre-emption right in respect of subscription; (o) to decide on reducing the share capital and on mergers; (p) to approve the medium-term business policy concept; (q) to approve the annual business policy and financial plan; (r) to approve and amend the Organisational and Operational Rules of the Company; (s) to approve membership in international organisations; (t) to effect capital investments, sell and buy shares, increase/decrease capital investments, with the exception of listed securities bought for resale, if such investment results in the credit institution s obtaining a less than 5% share in the registered capital or less than 5% of the voting rights of the company listed on the stock exchange; (u) to decide on supplementary payment. 11. Management 11.1 The Board of Directors consists of at least 3 but maximum 11 natural persons, with a mandate for a definite term of 5 years. The mandate of new members elected during this period shall remain valid until the expiry of the mandate of the Board of Directors. The Board of Directors shall have at least two members who are employed by the Company under a labour contract (insider members). 4

5 The managing directors of the Company may be elected as insider members of the Board of Directors. (According to the definition set forth in the Act on Credit Institutions, managing director shall mean the president of a financial institution elected by the management body in its managerial function and employed by the financial institution, or the chief officer appointed to manage the financial institution, employed by the credit institution or the financial enterprise as well as all deputies of such officer ) The Board of Directors of the Company shall have at least two members who are Hungarian citizens, classify as residents under the foreign exchange regulations and have had a permanent residence in Hungary for a period of at least one year Responsibilities of Management: - approve the internal regulations associated with the prudent operation of the Company; - approve the business rules of the Company; - designate the authorised signatories; - approve investment projects exceeding 20% of the investment budget or HUF 10 million; - decide on off-plan projects that fall within the budget; - approve the nomination of executives for capital investments; - approve consent judgements and out-of-court settlements resulting in a loss exceeding HUF 10 million. The Management shall: - prepare the annual balance sheet, the profit and loss account, the proposal for the distribution of profits; - submit a report to the Shareholder on an annual basis on the management, the asset status and the business policy of the Company; - ensure that the books of the Company are properly kept; - adopt resolutions in compliance with the scope of powers specified in the Articles of Association and the Organisational and Operational Rules; - prepare a report for the Supervisory Board, on a quarterly basis, on the management, the asset status and the business policy of the Company, as well as on the implementation of the operating and financial conditions specified by the Shareholders, the liquidity of the Company, the complaints received, risk management issues and the status of the capital investments of the Company; - have the management to report, on a quarterly basis, on the implementation of the business plan and the status of the capital investments of the Company; - provide extraordinary information to the Supervisory Board, in the following cases: if the Company is unable to execute any of the Shareholder s resolutions; if the semi-annual back-testing shows that the actual performance is 20% below the planned semi-annual figures; - it shall convene the Shareholders and concurrently notify the Supervisory Board thereof within eight days for the adoption of the necessary measures upon gaining cognisance of the following: owing to losses sustained, the equity of the Company fell to two-thirds of the Share Capital; or the equity of the Company fell below the level stipulated by law; the Company is threatened by insolvency, terminated its payments or its assets do not provide coverage for its debts. 5

6 The following shall fall within the exclusive competence of management: (a) take the measures required to adhere to the directions of the MNB (the National Bank of Hungary); (b) prepare and analyse the business policies, business plans and the annual budgets and assess adherence; (c) resolve on the conclusion or amendment of contracts that may exert a material impact on the operation of the Company; (d) resolve on the performance of the licensed banking activities; (e) resolve on the issue of mortgage bonds and the conditions thereof; (f) resolve on the establishment of branches and business premises (Section 3.2); (g) resolve on the authorisation of loans classified as internal loans under the Act on Credit Institutions; (h) resolve on permitting the performance of financial services through another legal entity; (i) keep the Register of Shareholders of the Company; (j) prepare or procure to prepare and approve the internal regulations of the Company; (k) in justified cases establish expert boards to operate within the Board of Directors, and approve their rules of operation; (l) resolve on all issues referred to the scope of competence of the Board of Directors by the Shareholder. Employer s rights over the employees of the Company with the exception of the managing directors shall be exercised by the Chief Executive Officer or the manager specified in the Organisational and Operational Rules. In respect of persons classifying as managing directors under the Act on Credit Institutions, the employer s rights shall be exercised by the Board of Directors. 11/A Chief Executive Officer 11/A. 1 The Shareholder shall elect a Chief Executive Officer (hereinafter: CEO) for the Company for an indefinite period. 11/A. 2 The Chief Executive Officer - may decide on financial issues within the limits of the annual budget, in its scope of powers specified herein and the Organisational and Operational Rules; - may decide in issues not falling within the scope of competence of the Board of Directors and regarding amounts below the limit specified herein and the Organisational and Operational Rules; - shall report to the Board of Directors on the implementation of the business plan and the status of the capital investments of the Company on a quarterly basis; - shall nominate the executives for capital investments; - shall exercise employer s rights over the employees of the Company, unless stipulated otherwise in Section 8.15 herein; - shall decide, from among capital investments for the purpose of resale, on investments in stock exchange equities, if such investment results in the credit institution s obtaining a less than 5% share in the registered capital or less than 5% of the voting rights of the company listed on the stock exchange. 6

7 12. Power of representation 12.1 Execution of documents on behalf of the Company shall be performed by the persons authorised to represent the Company by signing their own names under the written or preprinted (printed) Company name The following persons are entitled to represent the Company: - two members of the Board of Directors jointly; - two managing directors jointly, as specified in the Act on Credit Institutions; - a member of the Board of Directors jointly with a managing director; - regarding the scope of issues specified by the Board of Directors, two authorised signatory employees jointly; - a signatory employee authorised by the Board of Directors jointly with a member of the Board of Directors; - a signatory employee authorised by the Board of Directors jointly with a managing director The authorised signatories shall exercise their right of representation as shown in their authenticated signatory statements (specimen signatures authenticated by a notary public) or in their specimen signatures countersigned by an attorney. 13. Supervisory Board 13.1 The Company is supervised by a Supervisory Board consisting of at least 3, but maximum 9 elected members. The Supervisory Board is the supreme controlling body of the business association, tasked to supervise the management of the Company Members of the Supervisory Board shall be elected for a definite term of 5 years. The mandate of a new Supervisory Board member elected during this period shall remain valid until the expiry of the mandate of the Supervisory Board The Supervisory Board shall proceed as a body. With the exception of a single-member Supervisory Board, the Supervisory Board shall elect a chairperson from among its members. The Supervisory Board shall adopt its resolutions by simple majority voting The Supervisory Board shall establish its own rules of procedure If the Supervisory Board wishes to involve experts in its supervisory activities, the Management shall honour the Supervisory Board s request to that effect The Supervisory Board may elect any member of the Supervisory Board to perform individual tasks related to its supervisory activity, or it may also assign this duty to its members on a permanent basis. Such division of labour shall not prejudice the liability of Supervisory Board members, nor their right to extend their supervision to other activities within the scope of the supervisory duty of the Supervisory Board. 13.6/A Decisions within the scope of competence of the Supervisory Board: - requests a report from the Board of Directors, on a quarterly basis, on the management, the asset status and the business policy of the Company, as well as on the implementation of the operating and financial conditions specified by the Shareholder, the liquidity of the 7

8 Company, the complaints received, risk management issues and the status of the capital investments of the Company; - discusses the reports prepared by the internal audit organisation on a semi-annual basis, and checks the implementation of the required measures; - approves the contracts specified by law; - may initiate the convening of an extraordinary Shareholder s Meeting if: the Company is unable to execute any of the Shareholder s resolutions; the semi-annual back-testing shows that the actual performance is 20% below the planned semi-annual figures; the conditions specified in Section 7.5 herein prevail. As an audit committee, the Supervisory Board shall be responsible for the following duties: (a) monitor the process of financial reporting, put forward proposals for the required actions; (b) monitor the efficiency of the internal audit and risk management system; (c) monitor the audit of the annual report and the consolidated annual report; (d) comment on the report of the Company prepared in accordance with the Accounting Act; (e) monitor the auditor s and the auditing company s independence and compliance with professional requirements and conflict of interest regulations, including any services provided by the auditor or by the auditing company to the issuer in addition to the auditing of the annual report or the consolidated annual report; (f) put forward recommendations for the auditor and the auditing company and on the remuneration thereof; (g) perform preparatory work for the conclusion of the contract with the auditor. 14. Permanent Auditor 14.1 The Company shall select an auditor or an audit firm (hereinafter: Permanent Auditor) from among the auditors registered in Hungary as specified by the provisions of Act CCXXXVII of 2013 on Credit Institutions and Financial Enterprises (Credit Institutions Act), for a definite period of 1 year The Permanent Auditor shall verify: (a) the authenticity and legal compliance of the Company s report with the Accounting Act; (b) the professional accuracy of the assessment; (c) the performance of statutory and required value adjustments and write-offs; (d) that the statutory and required provisions and reserves have been set aside; (e) compliance with the regulations pertaining to the solvency margin, capital adequacy, continuous solvency and the specific financial services; (f) adherence to the legal regulations pertaining to profitable, reliable and independent ownership and prudent operation, and further, the Act on MNB, the legal regulations on payments and foreign exchange, the decrees of MNB, as well as supervisory and central bank decisions; and (g) the existence of adequate controlling systems and their operation. 14/A Divergent provisions due to the special circumstances of the Company 8

9 14/A. 1 The management body may only make valid decisions by telephone, fax, telex or other similar means (hereinafter: resolution in the absence of a meeting), if the voting is closed within 5 business days from the ordering of the voting and if the votes of at least half of the members entitled to vote or, if the decision requires a qualified majority voting, the votes of the corresponding number of members are fixed in a private document representing conclusive evidence and sent to the registered office of the financial institution. 15. Closing provision 15.1 Any issues not covered by these Articles of Association shall be governed by the relevant legislation pertaining to the operations of the Company; thus, in particular, the provisions of the Civil Code and the Act on Credit Institutions. Budapest, 27 March 2015 Dr. Antal Pongrácz Deputy Chairman, Deputy CEO Dr. Attila Egri Head of Department OTP Bank Plc. Shareholder 9