Controlling Rights and Restrictions of Rights from Shares

Controlling rights

As at the date of preparation of this report, the State Treasury of the Republic of Poland holds 14,688,470 series A registered shares preferred as to vote (one share gives two votes at the General Meeting); consequently, the State Treasury may exercise 51.76% of the total vote at the General Meeting. Thus, the State Treasury as a shareholder controls the Company and may exercise strategic control of the Company by exercising voting rights at the General Meeting.

Only acquisition of more than 10,493,000 preferred shares (i.e., more than 25% of all preferred shares of the Company) from the State Treasury would enable another shareholder to use the aforementioned exemption. The State Treasury may exercise most of the votes at the General Meeting and may elect most of the members of the Exchange Supervisory Board. Furthermore, according to the Articles of Association, the President of the Management Board is elected by the General Meeting and the other Members of the Management Board including the Vice-Presidents of the Management Board are elected by the Exchange Supervisory Board. As the State Treasury may exercise most of the votes at the General Meeting and may elect most of the members of the Exchange Supervisory Board, it may control the composition of the Management Board directly or indirectly. The Exchange Supervisory Board appoints Members of the Management Board following a competition procedure which verifies and evaluates the qualifications of candidates and selects the best candidate. The terms and conditions of the competition procedure are defined by the Exchange Supervisory Board.

Restrictions on exercise of voting rights

According to the Articles of Association, the voting right of shareholders is limited to the extent that none of them may exercise at the General Meeting more than 10% of the overall number of votes in GPW on the day when the General Meeting is held, provided that, for the purpose of determining obligations of acquirers of significant blocks of shares stipulated in the Act on Public Offering, such limitation of the voting right will be considered as not existing. The above limitation of voting right does not apply to:

  • shareholders who on the day when the General Meeting passed a resolution on introducing the restriction referred to above (i.e., 30 July 2010) were authorised due to holding shares representing more than 10% of the overall number of votes existing in the Company (the State Treasury of the Republic of Poland is the only such shareholder);
  • shareholders who are authorised due to holding more than 25% of the total number of shares preferred as to voting right referred to in § 4(1)(1) of the Articles of Association, i.e., shareholders authorised due to holding more than 10,493,000 series A registered shares preferred as to voting right (the State Treasury of the Republic of Poland was the only such shareholder as at the date of preparation of this report).

In order to limit the voting right, the votes of shareholders between which a domination or dependency relationship exists are summed up in accordance with the rules laid down in the Company’s Articles of Association. The Articles of Association define detailed limitations of the voting right of shareholders between which a domination or dependency relationship exists. Should any doubts arise, the provisions regulating the voting right restrictions should be construed in accordance with Article 65 § 2 of the Civil Code.

No limitations or restrictions have been imposed on the transfer of proprietary rights to the Company’s securities.