ARTICLES OF ASSOCIATION OF GRUPA AZOTY SPÓŁKA AKCYJNA (CONSOLIDATED TEXT INCLUDING AMENDMENTS ADOPTED BY THE ORDINARY GENERAL MEETING OF SHAREHOLDERS ON 17 APRIL 2013) I. GENERAL PROVISIONS 1 11. The Company shall operate under the business name of Grupa Azoty Spółka Akcyjna. 2. The Company may use the abbreviated name of Grupa Azoty S.A. 3. The Company may use the word and device trademark Grupa Azoty for commercial and marketing purposes. 2 1. The registered business office of the Company shall be the city of Tarnów. 2. The Company shall operate in the Republic of Poland and abroad. 3. The Company may open and run branches, establishments, offices, representative offices as well as other units, and participate in other companies and undertakings in the Republic of Poland and abroad.
3 The Company was established as a result of the transformation of a state-owned enterprise under the business name of Zakłady Azotowe w Tarnowie. The Company has been established for an indefinite period of time. 4 II. THE COMPANY S OBJECTS 5 The Company s objects shall be: 1) manufacturing basic chemicals, fertilisers and nitrogen compounds, plastics and synthetic rubber in basic forms (PKD [Polish Classification for Business Activity] 20.1), 2) manufacturing plastic products (PKD 22.2), 3) manufacturing other chemical products (PKD 20.5), 4) manufacturing, transferring, distributing and trading in electrical energy (PKD 35.1), 5) manufacturing as well as providing steam, hot water and air for air conditioning systems (PKD 35.3), 6) manufacturing other special purpose machines, elsewhere unclassified (PKD 28.99.Z), 7) activities within the scope of engineering and related technical support (PKD 71.12.Z), 8) construction works connected with the erection of buildings (PKD 41), 9) works related to the construction of civil engineering facilities (PKD 42), 10) specialist construction works (PKD 43), 11) activities supporting education (PKD 85.60.Z), 12) non-school forms of education (85.5),
13) other services, elsewhere unclassified (PKD 96.09.Z), 14) scientific research and experimental development in the field of natural and technical sciences (PKD 72.1), 15) wholesale on a fee or contract basis (PKD 46.1), 16) other specialised wholesale (PKD 46.7), 17) water intake, treatment and supply (PKD 36), 18) advertising (PKD 73.1), 19) market and public opinion research (PKD 73.2), 20) overland and pipeline transport (PKD 49), 21) storage and services supporting transport (PKD 52), 22) telecommunication (PKD 61), 23) real estate market services (PKD 68), 24) activity within the scope of architecture and engineering as well as related technical support (PKD 71.1), 25) technical research and analyses (PKD 71.2), 26) management counselling (PKD 70.2), 27) accounting services; tax advisory services (PKD 69.2), 28) employment services (PKD 78), 29) repair and maintenance of machinery (PKD 33.1), 30) installation of industrial machinery, devices and equipment (PKD 33.2), 31) specialist designing services (PKD 74.1), 32) other professional, scientific and technical activity, elsewhere unclassified (PKD 74.9), 33) activities relating to software and IT consultancy as well as related activities (PKD 62), 34) services in the field of information (PKD 63), 35) repairs and maintenance of computers and communication equipment (PKD 95.1). III. CAPITAL
6 The Company s equity was covered with founders capital, enterprise capital and undivided financial result for the period of business activity conducted before the transformation of the enterprise specified above in 3, when the state-owned enterprise was transformed into a joint stock company. 7 1. The Company s share capital amounts to PLN 495,977,420.00 (say: four hundred and ninety-five million nine hundred and seventy-seven thousand four hundred and twenty) and is divided into 99,195,484 (say: ninety-nine million one hundred and ninety-five thousand four hundred and eighty-four) shares with a nominal value of PLN 5.00 (say: five) each, inclusive of: a) 24,000,000 (say: twenty-four million) bearer shares of AA series with numbers from AA 000000001 to AA 024000000; b) 15,116,421 (say: fifteen million one hundred and sixteen thousand four hundred and twenty-one) bearer shares of B series; c) 24,999,023 (say: twenty-four million nine hundred and ninety-nine thousand and twenty-three) ordinary bearer shares of C series, d) 35,080,040 (say: thirty-five million and eighty thousand and forty) ordinary bearer shares of D series. 2. AA shares were issued to the shareholders being holders of the registered A series shares, in such a manner that for one registered share of A series the shareholders were issued 10 bearer shares of AA series. 3. By the time the documents of the registered shares of A series are cancelled, the Management Board shall conduct a share register for the registered shares of A series. The Management Board may authorise a brokerage house to conduct the share register. 4. By the time the AA series shares are admitted to trading in the regulated market, the documents of the shares of AA series shall remain deposited with a brokerage house with which the Company entered into agreement set forth above in section 3.
8 1. AA series shares are bearer shares issued in exchange for the registered shares of A series. Documents of the registered A series shares shall not be converted into bearer shares in the manner other than their conversion into AA series shares. 9 1. The Company s shares may be redeemed. Redemption of shares requires a decrease in the share capital. 2. Redemption of shares requires the consent of the shareholder. 3. The manner of redemption shall be specified in a resolution of the General Meeting of Shareholders. 10 1. Unless stipulated otherwise in the provisions of paragraphs 3 5, the share capital may be increased with a resolution of the General Meeting of Shareholders by issuing new shares (registered or bearer) or by increasing the nominal value of the existing shares. 2. An increase in capital by raising the nominal value of shares may only take place using 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 nominal value of not more than PLN 146,686,575 (one hundred and forty-six million six hundred and eighty-six thousand five hundred and seventy-five), by means of one or more increases in the share capital within the limits defined above (target capital). The Management Board's authorisation to increase the share capital and to issue new shares within the target capital expires on 31 December 2012. Issue of shares within the target capital may only take place with pre-emptive rights of current shareholders. 4. Unless stipulated otherwise in paragraph 5 or in the Code of Commercial Companies and Partnerships, the Management Board decides on all matters
connected with the increase in the share capital within the target capital, in particular the Management Board is authorised to: 1) conclude agreements on investment sub-issues, service sub-issues or other agreements safeguarding the success of the share issue, 2) adopt resolutions and take other actions regarding dematerialisation of shares, pre-emptive rights and rights to shares as well as to conclude agreements with Depozyt Papierów Wartościowych S.A. (The National Depository for Securities) on the registration of shares, pre-emptive rights and rights to shares, 3) adopt resolutions and take other actions regarding, respectively, the share issue by public offering or application to distribute shares, pre-emptive rights and rights to shares in the regulated market. 5. The Management Board s resolutions regarding: 1) increasing the share capital within the target capital, or 2) establishing the issue price of shares within the target capital, require the consent of the Supervisory Board. 11 The Company may acquire its own shares in the cases set forth in the provisions of Article 362 1 of the Code of Commercial Companies and Partnerships. 12 The share capital may be decreased on the principles specified in the provisions of Articles 455-458 of the Code of Commercial Companies and Partnerships. 13 The surplus over the nominal value of the new shares issued by the Company shall be allocated for the supplementary capital. IV. RIGHTS AND DUTIES OF SHAREHOLDERS
The Company s shares may be transferred. 14 15 1. Eligible employees are entitled to acquire, free of charge, up to 15% of the Company s shares taken up by the State Treasury on the day of the Company s incorporation, pursuant to the Commercialisation and Privatisation Act and Ordinance of the Minister of the State Treasury on detailed principles of dividing eligible employees into groups, determining the number of shares per each group and the manner of acquiring shares by eligible employees dated 29 January 2003 (Journal of Laws [Dziennik Ustaw] No. 35, item 303). 2. The shares acquired by eligible employees on the principles set forth in section 1 above shall not be traded before the lapse of two years from the day of disposal of the first shares by the State Treasury on general principles; and prior to the expiration of three years in the case of eligible employees being the Members of the Company s Management Board. Such shares shall not be converted into bearer shares before the end of these periods. 3. During the periods specified in section 2 above, the shares acquired by eligible employees shall not be subject to the compulsory repurchase set forth in Article 418 of the Code of Commercial Companies and Partnerships. 4. The Company shall provide the State Treasury with support in connection with the employees execution of the right specified in section 1 above. 16 1. Shareholders shall have the entitlements arising from these Articles of Association and provided for by law. 2. The State Treasury, as a shareholder, shall hold an individual entitlement to appoint and dismiss one Member of the Supervisory Board. Shareholder s declaration of will is made by way of a written declaration addressed to the
Company or through entering such a declaration in the minutes of the General Meeting of Shareholders by a representative appointed by the Minister of the State Treasury whose power of attorney contains an explicit authorisation to execute this entitlement. V. COMPANY S GOVERNING BODIES 17 The Company s governing bodies shall be: 1) The Management Board, 2) The Supervisory Board, 3) The General Meeting of Shareholders. 18 1. Subject to mandatory provisions of the Code of Commercial Companies and Partnerships and provisions of the Articles of Association, resolutions of the Company s governing bodies shall be passed with an absolute majority of the votes cast, where an absolute majority of votes means more affirmative votes than negative and abstaining in total. 2. In case the number of for votes cast by the Members of the Management Board is equal to against and abstain votes, the Chairman of the Management Board has a casting vote, while in case the number of for votes cast by the Members of the Supervisory Board is equal to against and abstain votes, the Chairman of the Supervisory Board has a casting vote. A. COMPANY S MANAGEMENT BOARD 19 1. The Management Board shall conduct the Company s operations and represent
the Company in all court and out of court acts. 2. All matters connected with the management of the Company s operations, not reserved by law or provisions of these Articles of Association for the General Meeting of Shareholders or Supervisory Board, shall be in the competence of the Management Board. 20 1. Two Members of the Management Board acting jointly or one Member of the Board acting with a proxy are required to submit declarations on behalf of the Company. 2. Appointment of the proxy requires a unanimous resolution of all Members of the Management Board. The proxy may be dismissed by each Member of the Board. 3. The manner of the Management Board activity shall be specified in detail in bylaws adopted by the Management Board and approved by the Supervisory Board. 21 1. All issues beyond the scope of ordinary activities of the Company require a resolution of the Management Board. Each Member of the Management Board may demand that a resolution be passed in matters concerning the Company. The Chairperson of the Management Board shall not refuse to put such a matter to the vote. 2. The following, in particular, require a resolution of the Management Board: 1) approving the by-laws of the Management Board, 2) approving the Organisational Rules and Regulations which govern the internal organisation of the Company s Enterprise, 3) opening and liquidating branches, establishments, offices, representative offices as well as other units specified in 2 section 3, 4) appointing a proxy, 5) taking and granting loans and borrowings subject to 33 section 2 point 7 hereof,
6) issuing bonds, subject to the issuance of convertible bonds or bonds with preemptive rights as well as the competence of the Supervisory Board provided for in 33 section 2 point 7, 7) approving the annual material and financial schedules as well as long-term strategic plans, 8) approving the financial statements, 9) incurring contingent liabilities, including granting sureties and guarantees by the Company and assuming any responsibility for foreign debt as well as issuing, accepting, furnishing guarantees for bills of exchange and endorsement of bills of exchange on a fee or contract basis, subject to the provisions of 33 section 2 points 5 and 6, 10) disposing, acquiring and encumbering with limited property rights tangible assets with a market value equal to or exceeding PLN 50,000 (fifty thousand), subject to the provisions of 33 section 2 points 1, 2, 3 and 4 and 51 section 1 points 8, 9, 10, 11 and 24 hereof, 11) matters which the Management Board submits to the Supervisory Board or General Meeting of Shareholders for consideration. 22 1. The Management Board shall be responsible for preparation of the schedules referred to in 21 section 2 point 7 and for their submission to the Supervisory Board. 2. In the case of an intention to commence an investment task or modernisation as a result of which there will be a change of over PLN 2,000,000 (two million) in a given component of intangible or tangible assets that have not been included in the Company s material and financial schedules for a given year, the Management Board shall submit to the Supervisory Board for its approval a plan of the investment task or modernisation with a justification. 23
1. The Company s Management Board shall be composed of not more than 9 persons, including the Chairperson, Vice-Chairpersons and other Members of the Management Board. The number of Members shall be established by the authority appointing the Management Board. 2. The Management Board Members shall be appointed for the period of 3 years of a common term of office. 3. A Member of the Management Board should complete higher education and have at least 5-year experience on an executive position. 24 1. The Management Board Members or the whole Management Board, considering the provisions of 25 and subsequent paragraphs of the Articles of Association, shall be appointed and dismissed by the Supervisory Board. 2. Each Member of the Management Board may be dismissed or suspended from the right to perform functions by the Supervisory Board or the General Meeting of Shareholders. 3. A Member of the Management Board shall submit his resignation to the Supervisory Board in writing. 25 1. By the time the Company employs an average of more than 500 workers per year, the Supervisory Board shall appoint one person elected by the Company s employees to be a Member of the Management Board for the term of office of the Management Board. 2. A candidate for the Member of the Management Board elected by the employees shall be the person who obtained not less than 50% plus 1 of valid votes. The result of voting shall be binding upon the Supervisory Board provided that at least 50% of all employees have participated in it. 3. A candidate for the Member of the Management Board elected by the employees does not need to fulfil the qualification requirements referred to in 23 section 3.
4. The elections are direct and general, conducted in the form of a secret ballot by Election Committees appointed by the Supervisory Board and comprising the Company s employees. Any candidate in the elections shall not be a Member of the Committee. 5. Failure to elect the Member of the Management Board by the Company s employees shall not be an obstacle to adopt binding resolutions by the Management Board. 6. The Company s Management Board shall provide support necessary to hold the elections. 7. The Supervisory Board shall adopt detailed regulations of appointment and dismissal of the Member of the Management Board elected by the employees as well as regulations of holding supplementary elections in accordance with the principles set forth below. In the case of disputes, the Supervisory Board shall be responsible for interpretation of the provisions of the Articles of Association and regulations pertaining to the elections. 8. The elections of a candidate for the Member of the Management Board elected by the employees shall be called by the Supervisory Board considering the provisions of 26. 9. The following principles and manner of election and dismissal of the Member of the Management Board elected by the employees as well as of holding supplementary elections shall be established: 1) the elections shall be called and held by an Election Committee. In the case of a multi-branch organisational structure of the Company, elections shall be called and held by the Main Election Committee assisted by District Election Committees, 2) Election Committees shall be responsible for uninterrupted holding of elections in compliance with the applicable law, Articles of Association and the Regulations of the Committees, 3) the responsibilities of the Main Election Committee shall include in particular: a) preparing and announcing the Regulations of the Committees, b) establishing a list of constituencies and schedule of elections,
c) checking and registering lists of voters as well as establishing the number of employees who have the active voting right on the day of elections, d) ongoing control of the course of elections in constituencies and of the activity of District Election Committees as well as consideration of complaints concerning the course of elections, e) registering the candidates and announcing the list of candidates, f) preparing the ballot papers and ballot boxes, g) supervising the course of voting, counting votes, preparing the final protocol as well as establishing the results of elections, h) controlling the compliance with the provisions of the Articles of Association concerning the elections, i) establishing a valid specimen of a special election seal, 4) the responsibilities of the District Election Committee shall include in particular: a) checking the lists of voters in a given constituency and establishing the number of employees who on the day of the elections have the active voting right in a constituency, b) holding the voting and transfer of ballot boxes containing the votes to the Main Election Committee, c) cooperating with the Main Election Committee, especially while counting the votes cast, 5) the person nominated in the manner specified below in points 6 and 7 shall have the passive voting right, 6) any trade union organisation acting within the Company as well as groups comprising at least 50 employees shall have the right to nominate their candidates. An individual employee may support only one candidate, 7) nomination of a candidate shall be made in writing and submitted to the Main Election Committee 7 days before the specified date of voting at the latest, 8) in the case of failure to perform the election in accordance with section 2 above, the second round of elections including two candidates with the highest number of votes obtained in the first round shall be called,
9) the second round of elections shall be held according to the manner established for the first round, taking into account the changes resulting from point 8 above, 10) following the establishment of the final results of elections, the Main Election Committee shall transfer documentation of elections to the Supervisory Board. The Supervisory Board, after reading the documentation, shall state the validity of elections and then make a suitable announcement. In the case of a gross breach of binding provisions as well as in the case of a discovery of other inconsistencies that may influence the results of elections, the Supervisory Board shall cancel the elections and then call them again, 11) a motion for dismissal of the Member of the Management Board elected by the employees shall be submitted to the Company s Management Board which shall immediately submit the motion to the Supervisory Board, 12) voting on dismissal of the Member of the Management Board elected by the employees shall be held in the manner concerning his appointment subject to 27. 26 1. The Supervisory Board shall call elections of the candidate to the Management Board elected by the Company s employees for the next term of office within two months following the last full financial year of holding the position by the Member of the Management Board. Such elections should be held within one month from the day of their calling by the Supervisory Board. 2. In the case of dismissal, resignation or death of a Member of the Management Board elected by the employees, supplementary elections shall be held. 3. Supplementary elections and voting concerning the dismissal shall be called by the Supervisory Board not later than within one month from the moment of obtaining by the Supervisory Board information on an incident justifying calling elections or voting. Such elections or voting should be held within one month from their calling by the Supervisory Board.
4. The provisions of 25 shall apply to supplementary elections. 27 Upon a written motion of at least 15% of the total number of the Company s employees, the Supervisory Board shall order voting on dismissal of the Member of the Management Board elected by the Company s employees. The result of the voting shall be binding upon the Supervisory Board on the condition that at least 50% of all the employees participate in the vote and the necessary majority of votes similarly to the election is obtained. 28 1. The candidate elected by the employees to the Management Board, employed with the Company on the basis of a contract of employment, following his election: 1) may conclude with the Company an additional contract for holding the function of the Member of the Management Board, while his contract of employment remains in force, 2) shall retain the acquired employee entitlements, 3) may perform his functions on the position specified in the concluded employment contract and shall participate in the activities of the Management Board on the principles set forth in the Code of Commercial Companies and Partnerships, Articles of Association and the contract specified above in point 1. 2. In the case of concluding an additional contract for holding the function of the Member of the Management Board, the total remuneration of the Member of the Management Board elected by the employees arising from the contract of employment and contract for holding the function in the Management Board shall not exceed the amounts specified by the authority entitled to establish remuneration of the Members of the Management Board and the amount set forth in legal standards applying to the Company.
29 The principles and the remuneration of Members of the Management Board are established by the Supervisory Board, unless a specific provision of law stipulates otherwise. 30 1. The Company shall be the employer as provided for in the Labour Code. 2. The activities within the scope of the labour law shall be performed by the person appointed by the Management Board subject to the provisions of 41 section 1. 31 Holiday shall be granted to the Chairperson of the Management Board by the Chairperson or Vice-Chairperson of the Supervisory Board, and to other Members of the Management Board - by the Chairperson of the Management Board. B. SUPERVISORY BOARD 32 The Supervisory Board shall perform regular supervision of the Company s business activity in all its fields. 33 1. The competence of the Supervisory Board shall include: 1) appointing and dismissing Members of the Management Board, 2) establishing the principles and the remuneration for Members of the Management Board, 3) suspending, for important reasons, individual or all Members of the Management Board from the right to perform their functions, 4) delegating Members of the Supervisory Board to perform, on temporary
basis, the functions of the Management Board Members who cannot carry out their duties, 5) granting the consent to hold positions in governing bodies of other companies to Members of the Management Board, 6) evaluating the report of the Management Board on the Company s operations and the financial statements for the previous financial year within the scope of their compliance with the books, documents as well as actual circumstances, 7) assessing motions of the Management Board concerning distribution of profits or coverage of losses, 8) submitting to the General Meeting of Shareholders a written report on the results of the operations specified above in points 6 and 7, 9) evaluating the report of the Management Board on the operations of the Group and consolidated financial statements of the Group for the previous financial year within the scope of their compliance with the books, documents and actual circumstances as well as submitting to the General Meeting of Shareholders a report on the results of those operations if an obligation to draw up the consolidated statement is provided for in the Accounting Act of 29 September 1994 (Journal of Laws [Dziennik Ustaw] of 2002, No. 76, item 694, as amended) ( Accounting Act ), 10) choosing an auditor to review the financial statements and consolidated financial statements of the Group, 11) establishing the scope of the annual material and financial schedules as well as long-term strategic plans and dates of their submission by the Management Board, 12) approving the Company s long-term strategic plans, 13) approving the annual material and financial schedules containing plans of investment expenditures, 14) adopting by-laws specifying in detail the manner in which the Supervisory Board acts, 15) approving the consolidated text of the Company s Articles of Association
prepared by the Company s Management Board, 16) approving by-laws of the Company s Management Board, 17) (deleted) 18) approving by-laws for granting donations, 19) pronouncing opinions on all issues submitted by the Management Board for consideration of the General Meeting of Shareholders, 20) preparing for an Annual General Meeting of Shareholders a statement containing assessment of the Company s compliance with the adopted standards of the corporate governance during the reporting period, 21) preparing for the Annual General Meeting a report on the Supervisory Board s activity including the work of its committees and the evaluation of the Management Board s work, 22) preparing for an Annual General Meeting of Shareholders assessment of the situation in the Company including assessment of the internal control and risk management systems. 2. The competence of the Supervisory Board shall also include granting to the Management Board the consent to: 1) acquiring real estate, perpetual usufruct or shares in real estate with a market value exceeding PLN 10,000,000 (ten million), 2) disposing or encumbering with limited rights of property, perpetual usufruct or shares in property, 3) purchasing fixed assets other than property, perpetual usufruct or shares in property with a market value exceeding PLN 2,000,000 (two million), 4) disposing or encumbering with limited rights of fixed assets other than property, perpetual usufruct or shares in property with a market value exceeding PLN 2,000,000 (two million), 5) contracting conditional liabilities, including the Company s furnishing guarantees and sureties, and assuming liability for a foreign debt with value exceeding PLN 2,000,000 (two million), 6) issuing, accepting, furnishing guarantees for bills of exchange and endorsing bills of exchange with value not exceeding PLN 2,000,000 (two million) on
commission, 7) entering a credit or/and loan agreement as well as issuing bonds if the value of the Company s debt for loans and credit together with the planned credit and/or loan exceeds PLN 40,000,000 (forty million), 8) incurring any other liability or making a regulation which, on the basis of one or several legal transactions excluding current commercial activity, repairs or investments included in the binding annual material and financial schedules, exceeds the amount of PLN 6,000,000 (six million), 9) the Company s entering into an agreement for donation or exemption from debt with a value exceeding PLN 30,000 (thirty thousand). If the total of donations and exemptions from debt made by the Company during one year exceeds PLN 500,000 (five hundred thousand), any next donation or exemption from debt exceeding PLN 20,000 (twenty thousand) shall require a consent, 10) establishing or co-financing a foundation or other organisations which are not commercial companies, 11) opening the Company s branch, establishment, office or representative office abroad, 12) executing the voting right at a General Meeting or at a Meeting of Shareholders of the companies whose stocks or shares in the amount of at least 50% are held by the Company, in the following matters: a) amendment to the Articles of Association or Articles of Incorporation, b) increase or decrease in the share capital, c) merger, transformation or division of the company, d) disposal of stocks or shares in the company, e) disposal or lease of the company s enterprise or its organised part, establishment on them of the limited property right as well as acquisition and disposal of a real estate, perpetual usufruct or share in a real estate if their market value exceeds PLN 200,000 (two hundred thousand), f) dissolution and liquidation of the company,
13) the Company s establishing another company or accession to another company, 14) concluding a significant agreement with a related entity, excluding typical agreements, concluded under market terms and conditions, as part of the pursued operating activity. 3. Refusal of the Supervisory Board to grant a consent in the matters set forth in section 2 points 1-11 above requires a justification. 4. The Management Board is obliged to provide the Supervisory Board with copies of information provided to a competent minister of public finance concerning the sureties and guarantees granted pursuant to Article 34 of the Act on sureties and guarantees granted by the State Treasury and certain legal entities dated 8 May 1997 (consolidated text, Journal of Laws [Dziennik Ustaw] of 2003, No. 174, item 1689 as amended). 5. (deleted) 34 1. The Supervisory Board may delegate individual Members of the Supervisory Board to perform independently certain supervision activities for a specified period of time. 2. A delegated Member of the Supervisory Board shall submit to the Supervisory Board a written report on the performed activities. 3. Audit Committee (of the Supervisory Board) may be appointed from among Members of the Supervisory Board, by way of delegating such Members to perform independently certain supervision activities. A resolution appointing Members of the Supervisory Board to perform independently certain supervision activities within the Audit Committee should specify the manner and scope of those activities. The competence performed jointly within the Audit Committee by the delegated Members of the Supervisory Board should be established according to the provisions of Appendix I, section 4 (Audit Board) to the European Commission Recommendation of 15 February 2005 on the role of nonexecutive or supervisory directors of listed companies and on the committees of
the (supervisory) board (Journal of Laws EU L 52/52 of 2005). Members of the Supervisory Board delegated to perform independently certain supervision activities within the Audit Committee shall meet the criteria of independence set forth in Appendix II to the aforementioned European Commission Recommendation, while the criterion specified in section 1 letter d) of this Appendix shall not be applicable during the time in which the State Treasury and Nafta Polska S.A. together hold over 50% of the Company s shares. 4. (deleted) 35 1. The Supervisory Board shall be composed of 5 to 9 Members appointed by the General Meeting of Shareholders, subject to the provisions of 16 section 2 and 36 of the Articles of Association. 2. Members of the Supervisory Board shall be appointed for three years of common term of office. 3. A Member of the Supervisory Board elected by the General Meeting of Shareholders may be dismissed by the General Meeting at any time subject to 16 section 2. 4. At least two Members of the Supervisory Board shall be independent Members who meet all criteria of independence specified in Appendix II to the European Commission Recommendation referred to in 34 section 3. 36 1. A part of the composition of the Supervisory Board shall be the Members elected by the Company s employees pursuant to Article 14 of the Commercialisation and Privatisation Act. 2. The detailed manner of holding elections of new Members of the Supervisory Board by the employees for the next term of office and the manner of their dismissal are specified in the Election Regulations adopted by the Supervisory Board.
37 1. The Chairperson of the Supervisory Board shall be appointed by the General Meeting of Shareholders. The Vice-Chairperson and Secretary of the Supervisory Board shall be elected by the Supervisory Board from among its other Members at the first meeting. 2. Meetings of the Supervisory Board shall be conducted by its Chairperson and by Vice- Chairperson in the case of the Chairperson s absence. 3. Between the meetings, declarations addressed to the Supervisory Board shall be made to its Chairperson and if it is not possible - to the Vice-Chairperson. 38 1. The Supervisory Board shall hold its meetings at least once every two months. 2. Meetings of the Supervisory Board shall be called by its Chairperson or Vice- Chairperson who presents a detailed plan of the agenda. 3. A meeting of the Supervisory Board should be called upon request of each of the Members of the Supervisory Board or of the Management Board. 4. Meetings of the Supervisory Board shall be minuted in compliance with the provisions of Article 391 2 of the Code of Commercial Companies and Partnerships. 39 1. In order to call a meeting of the Supervisory Board, a written invitation of all its Members at least 7 days before the meeting is necessary. Invitations may be delivered by means of courier mail, telefacsimile or in any other way provided that the receipt is confirmed personally within the above mentioned deadline. For important reasons, the Chairperson of the Supervisory Board may shorten the deadline to 2 days specifying the manner of delivery of the invitation. 2. The Chairperson of the Supervisory Board shall specify in the invitation the date of the meeting, its place and detailed plan of the agenda. 3. The agenda may be changed if all the Members of the Supervisory Board are
present at the meeting and no one objects to such a change. 3. The Supervisory Board may hold a meeting and adopt resolutions without having the meeting formally convened in the case when all its Members are present and no one objects to holding the meeting or putting individual issues on the agenda. 40 1. The Supervisory Board shall pass resolutions if at least half of its Members participate in the meeting and all Members have been invited. 2. The Supervisory Board shall pass resolutions in open voting. 3. A secret ballot shall be ordered upon request of a Member of the Supervisory Board and in personal issues. If a secret ballot is ordered, the provisions of section 4 below shall not be applicable. 4. The Supervisory Board may adopt resolutions in writing or by means of direct distance communication subject to Article 388 4 of the Code of Commercial Companies and Partnerships. Adoption of a resolution in this manner requires a justification or prior presentation of its draft to all Members of the Supervisory Board. 5. Resolutions passed in writing, in compliance with the provision of section 4 above, shall be presented at the next meeting of the Supervisory Board and the result of voting shall be announced. 41 1. The Supervisory Board shall represent the Company in agreements and disputes with Members of the Management Board. In the case of entering into an agreement with a Member of the Management Board, the whole contents of the Company s legal transaction shall be covered by a resolution of the Supervisory Board. The Chairperson of the Supervisory Board or its other Member specified in a Supervisory Board resolution may affix signatures on behalf of the Supervisory Board.
2. The Supervisory Board shall, by resolution, grant a power of attorney ad litem when the need to act on behalf of the Supervisory Board in court or arbitration court arises. 3. The Supervisory Board may authorise its Chairperson or Vice-Chairperson to perform activities relating to employment of the Management Board Members. The Chairperson or Vice-Chairperson of the Supervisory Board shall inform the Supervisory Board at its next meeting of all performed activities connected with the execution of the power of attorney granted to them by the Supervisory Board. 42 1. Members of the Supervisory Board shall execute their rights and perform their duties in person. 2. A Member of the Supervisory Board shall participate in the Supervisory Board s meetings and specify the reasons for his absence in writing. 3. Members of the Supervisory Board are entitled to remuneration and reimbursement of costs connected with their participation in the work of the Supervisory Board. C. GENERAL MEETING OF SHAREHOLDERS 43 1. The General Meeting of Shareholders shall be convened by the Company s Management Board: 1) on its own initiative, 2) upon a request of the Supervisory Board expressed in a resolution of the Supervisory Board, 3) upon a written or electronic request of a shareholder or shareholders representing at least one twentieth of the share capital, submitted at least one month before the proposed date of the General Meeting, 4) upon a written request of the shareholder - the State Treasury - irrespective
of its participation in the share capital, submitted at least one month before the proposed date of the General Meeting. 2. Convening the General Meeting of Shareholders should take place within two weeks from the day of the submission of the request referred to in section 1 points 2-4 above. 3. In the case when the General Meeting of Shareholders is not convened within the deadline specified above in section 2, then: 1) if the request to convene the General Meeting was submitted by the Supervisory Board, the Supervisory Board shall obtain the right to convene the General Meeting, 2) if the request to convene the General Meeting was submitted by the shareholders mentioned in section 1 points 3 or 4 above, the Registry Court may entitle the shareholders to convene an Extraordinary General Meeting of Shareholders. The Registry Court shall appoint the Chairperson of such a Meeting. The decision of the Registry Court shall be referred to in the notification of convening the Extraordinary General Meeting of Shareholders. 4. Irrespective of the provisions of sections 1-3, the right to convene an Extraordinary General Meeting of Shareholders shall be vested with: 1) the Supervisory Board if convening the General Meeting is deemed appropriate in a resolution of the Supervisory Board, 2) a shareholder or shareholders representing at least half of the share capital. Such shareholders shall appoint the Chairperson of the Meeting. 5. The day of holding an Extraordinary General Meeting of Shareholders shall not be established later than on the 35th day from the day of its convening. 44 General Meetings of Shareholders shall be held at the Company s registered business office or in Warsaw. 45 1. The General Meeting of Shareholders shall be convened through an
announcement placed at least twenty-six days before the day of the General Meeting on the Company s website and in the manner established for submitting current information pursuant the regulations on public offering and terms of introduction of financial instruments to an organised trading system and on public companies. 2. The General Meeting of Shareholders may adopt resolutions only in the matters covered by the agenda, subject to Article 404 of the Code of Commercial Companies and Partnerships. 3. The agenda shall be established by the Management Board of the Company or by another entity convening the General Meeting. The General Meeting of Shareholders may, by resolution, change the order of considering the issues. 4. A shareholder or shareholders representing at least one twentieth of the share capital may request that certain issues be put on the agenda of the next General Meeting of Shareholders. Also the State Treasury, as a shareholder, shall have the above right irrespective of its participation in the share capital. 5. The request mentioned in section 4 should be submitted to the Management Board not later than twenty-one days before the day of the General Meeting. The request should contain a justification or draft of a resolution concerning the proposed item of the agenda. The request may be submitted in an electronic form. 6. If the request specified above in section 4 is submitted after the deadline set forth in section 5, then it shall be treated as a motion for convening an Extraordinary General Meeting of Shareholders. 7. The Management Board shall immediately announce changes in the agenda made upon request of the shareholders, however not later than eighteen days before the day of the General Meeting. The announcement shall be made in the manner proper for convening the General Meeting of Shareholders. 8. A shareholder or shareholders representing at least one twentieth of the share capital may, before the day of the General Meeting, submit in writing or by means of electronic communication drafts of resolutions on the issues that have been or are to be put on the agenda of the General Meeting. The Company shall
immediately place announcements of drafts of resolutions on its website. 46 The General Meeting of Shareholders shall be opened by the Chairperson or Vice- Chairperson of the Supervisory Board, and in the case of their absence by the Chairperson of the Management Board or by a person appointed by the Management Board. Subsequently, subject to 43 section 3 point 2 and 43 section 4 point 2 hereof, the Chairperson of the Meeting shall be elected from among the persons entitled to participate in the General Meeting of Shareholders. 47 1. The General Meeting of Shareholders shall adopt resolutions irrespective of the number of represented shares, unless the provisions of the Code of Commercial Companies and Partnerships and these Articles of Association specify otherwise. 2. Subject to sections 3-7 below, one share carries the right to one vote at the General Meeting. 3. As long as the State Treasury or subsidiaries of the State Treasury are owners of the Company s shares which entitle to at least one fifth of the total number of votes existing in the Company, the voting right of the Company s shareholders shall be limited in that none of the shareholders may cast, at the General Meeting, more than one fifth of the total number of votes existing in the Company on the day of holding the General Meeting. The limitation of the voting right referred to in the preceding sentence shall not apply to the State Treasury or to subsidiaries of the State Treasury. For the purposes of this paragraph, the performance of the voting right by the parent company within the meaning of the Act of 29 July 2005 on Public Offering And Terms of Introduction of Financial Instruments to an Organised Trading System and on Public Companies ( Act on Offer ) shall be deemed as the performance of the voting right by a subsidiary, with the parent company and the subsidiary understood also as each entity whose votes resulting from the Company s shares
owned directly or indirectly, respectively, are subject to accumulation with the votes of another entity or entities under principles specified in the Act on Offer in connection with owning, disposing of or acquiring major packages of Company s shares. A shareholder whose voting right has been limited shall retain the right to cast at least one vote in any case. 4. Subject to sec. 3 above, for the purposes of this paragraph, parent and subsidiary are also understood to include the following: 1) an entity having the status of a parent company, a subsidiary or simultaneously a parent and a subsidiary within the meaning of the Competition and Consumer Protection Act of 16 February 2007, or 2) an entity having the status of a parent company, an indirect parent company, a subsidiary, an indirect subsidiary, a jointly controlled entity or simultaneously having the status of a parent company (including indirect parent company) and a subsidiary (including an indirect subsidiary and a jointly controlled entity) within the meaning of the Accounting Act of 29 September 1994, or 3) an entity which has (parent company) or is subject to (subsidiary) significant influence within the meaning of the Act of 22 September 2006 on Transparency of Financial Relations between Public Authorities and Public Enterprises and on the Financial Transparency of Certain Enterprises. 5. Within the meaning of this paragraph, a shareholder is understood as any person, including its parent company and subsidiary, which directly or indirectly carries the right to vote at the General Meeting on the basis of any legal title; this also relates to persons not holding any shares in the Company, and particularly usufructaries, lienors and persons authorised to participate in the General Meeting despite having disposed of their shareholding after the record date for the General Meeting. 6. Shareholders whose voting rights are subject to aggregation and reduction in accordance with this paragraph are collectively referred to as a Shareholding Group. Aggregation of voting rights means the addition of all voting rights held
by the shareholders belonging to the Shareholding Group. Reduction of voting rights means reduction of the total number of voting rights at the Company s General Meeting held by shareholders belonging to the Shareholding Group. The reduction of voting rights is performed in accordance with the following principles: 1) the number of voting rights held by a shareholder with the highest number of voting rights at the Company s General Meeting from amongst the shareholders belonging to the Shareholding Group is subject to reduction by a number of voting rights equalling the excess of voting rights collectively held by the shareholders belonging to the Shareholding Group over one fifth of the total number of voting rights at the Company s General Meeting, 3) if, despite the reduction described in point 1) above, the total number of voting rights at the Company s General Meeting collectively held by the shareholders belonging to the Shareholding Group exceeds the threshold described in sec. 3 of this paragraph, further reduction of voting rights of other shareholders belonging to the Shareholding Group shall take place in the order determined by the number of voting rights at the Company s General Meeting held by the shareholders belonging to the Shareholding Group (from the largest number of voting rights to the smallest). Further reduction of voting rights shall take place until the total number of voting rights at the Company s General Meeting held by the shareholders belonging to the Shareholding Group does not exceed one fifth of the total number of voting rights at the Company s General Meeting, 3) such a limitation on exercise of the right to vote shall also apply to shareholders absent from the General Meeting. 7. In the event of doubts arising in connection with this paragraph, its content should be interpreted in accordance with art. 65 2 of the Act of 23 April 1964, the Polish Civil Code. 48
The General Meeting of Shareholders may order a break in the session by two third majority of votes. In total, the breaks shall not last for more than thirty days. In the case of disposal of shares before the end of the General Meeting of Shareholders, the disposer shall be barred from his entitlement to participate in the General Meeting. An entitlement to participate in the General Meeting may not be acquired during a break. 49 Voting at the General Meeting of Shareholders shall be open. A secret ballot shall be ordered for the elections of the Company s governing bodies or a receiver as well as over a motion for their dismissal, holding them liable as well as in other personal matters. Moreover, a secret ballot shall be ordered upon request of even one of the shareholders present or represented at the General Meeting. In the case when the Code of Commercial Companies and Partnerships or other act orders voting by roll- call, a request for ordering a secret ballot shall be ineffective. 50 The Annual General Meeting of Shareholders should be held within six months following the end of each financial year. 51 The competence of the General Meeting of Shareholders shall include in particular: 1) reviewing and approving financial statements for the previous financial year and the report of the Management Board on the Company s operations, 2) acknowledging fulfilment of duties by Members of the Company s governing bodies, 3) distributing profits and covering losses, 4) specifying the day of establishing the rights to a dividend and the day of its payment as well as payment of the dividend in instalments, 5) reviewing and approving consolidated financial statements of the Group for the