7th Feb 2006 07:00
Bank Pekao SA06 February 2006 UNOFFICIAL TRANSLATION (3 February 2006) Current report 17/2006 Convention of the Extraordinary General Meeting of Bank Polska Kasa Opieki S.A. The Management Board, acting in accordance with Art. 398 and Art. 399 (S) 1 ofCode of Commercial Companies as well as (S) 8 sect. 3 of the Bank's Statute,convened the Extraordinary General Meeting of Bank Polska Kasa Opieki S.A. on10th March 2006 at 10:00 a.m. The Extraordinary General Meeting of the Bank will be held in the premises ofHead Office of the Bank in Warsaw, Grzybowska Str. 53/57 with the followingagenda: 1. Opening of the Extraordinary General Meeting. 2. Election of the Chairman of the Extraordinary General Meeting. 3. Ascertainment of a correctness of convening the Extraordinary General Meeting and its capacity to adopt binding resolution. 4. Election of the Ballot Counting Commission. 5. Adoption of the agenda. 6. Consideration of the motion and adoption of resolution on the amendments to the Statute of the Bank. 7. Adoption of resolution on the establishment of uniform text of the Statute of the Bank. 8. Other matters. 9. Closing of the meeting. Bearer's shares entitle bearers to participate in the Extraordinary GeneralMeeting if inscribed deposit certificates, issued by the entity with which ashareholder maintains his brokerage account are deposited at the Bank's HeadOffice at Grzybowska 53/57 in Warsaw (ground floor, room no. 0070) till 3rdMarch 2006 by 3:00 p.m. and are not picked up before the end of the GeneralMeeting. The Management Board of the Bank announces the contents of the proposedamendments to the Statute of the Bank together with the existing provisions: 1) (S) 1 section 2 now reads: "2. Bank Polska Kasa Opieki S.A. is a part of the UniCredito ItalianoS.p.A. capital group. UniCredito Italiano S.p.A. has the right, in accordancewith the Polish law, through the Bank's statutory bodies, to affectBank's activities aimed at ensuring the stability of the group.", (S) 1 section 2 shall read as follows: "2. Bank Polska Kasa Opieki S.A. is a part of the UniCredito Italiano BankingGroup. UniCredito Italiano S.p.A. has the right, in accordance with the Polishlaw, through the statutory authorities of the Bank, to affect activities of theBank aimed at ensuring the stability of the Group.", 2) The hitherto deleted (S) 5 shall read as follows: "(S) 5 1. The Bank's organisational structure shall comprise: 1) Head Office, 2) Head Office operational units, 3) Regions, 4) Domestic Branches (inclusive of their respective sub-branches and bankingservices outlets) and abroad 5) Other organisational units, including Corporate Customers Centres. 2. The changes of the organisational structure of the Head Office of the Bankwithin the framework concerning only the first level of reporting shall beadopted by the Management Board and approved by the Supervisory Board. 3. The Organisational By-laws of the Bank specify the detailed internalorganisation of the Bank.", 3) In (S) 10 section 6 shall be added with the following wording: "6. The removal from the agenda or abandoning the reconsideration of an issueplaced in the Agenda upon a motion from shareholders requires the GeneralMeeting to adopt a resolution by 3/4 majority of votes, upon prior consent ofall shareholders who submitted such motion.", 4) In (S) 14 sections 3 and 4 shall read as follows: "(S) 3. The Supervisory Board shall include at least two independent members.The independent members of the Supervisory Board shall be free of anyassociations with the Bank and its shareholders or employees that might bear amaterial impact upon the capacity of an independent member to take impartialdecisions. 4. An independent member of Supervisory Board is considered to be a person, whoon the day of election to the Supervisory Board meets jointly the followingconditions: 1) is not and has not been in the period of the last 3 years employed at theBank, its subsidiaries or parent company as a Board member or on any othermanagerial position, 2) is not and has not been in the period of the last 3 years a charteredpublic accountant or an employee of an entity providing auditing services whoexamined the financial reports of the Bank, its subsidiaries or parent company, 3) is not a shareholder holding indirectly or directly 5 % or more shares ofthe Bank and is not a member of the Management Board, Supervisory Board or anemployee holding a managerial position with any such shareholder, 4) is not receiving any additional remuneration, apart from the remunerationfor membership in the Supervisory Board or any proprietary benefits from theBank, its subsidiaries or parent company, 5) is not a person close to any member of the authorities of the Bank or toany employee of the Bank employed in a managerial position nor a person close toa shareholder, being a natural person, holding directly or indirectly 5 % ormore shares of the Bank, 6) does not have significant business relationships with the Bank, itssubsidiaries or the parent company which could affect his/her independence.", 5) In (S) 14 the hitherto contents of sections 3-5 shall be respectivelymarked as sections 5-7, 6) In (S) 17 Section 3 now reads: "3. Resolutions of the Supervisory Board shall be adopted by absolutemajority of votes.", In (S) 17 Section 3 shall read as follows: "3. Resolutions of the Supervisory Board shall be adopted by an absolutemajority of votes unless the provisions of law stipulate otherwise.", 7) In (S) 18 full stop shall be replaced by a comma and point 17 shall beadded with the following wording: "17) Approval of motions of the Management Board concerning incurringobligations or disposal of assets which overall value in relation to one entityexceeds 5 % of equity funds of the Bank", 8) In (S) 20 Section 2 now reads: "2. The Management Board of the Bank shall operate on the basis of theRules of procedure adopted by it. Rules of procedure shall in particular definethe matters which require joint consideration by the Management Board, as wellas the procedure for adopting resolution during the meeting and in writing.", In (S) 20 Section 2 shall read as follows: "2. The Management Board of the Bank shall operate on the basis of the Rules ofprocedure adopted by it. Rules of procedure shall in particular define thematters which require joint consideration by the Management Board, as well asthe procedure for adopting a resolution in writing.", 9) In (S) 20 sections 3 and 4 shall be added in the following wording: "3. Resolutions of the Bank Management Board may be adopted after all membershave been duly notified of the Management Board meeting. Resolutions are deemedvalid when adopted in the presence of at least half of the Management Boardmembers. 4. Resolutions shall be adopted by an absolute majority of votes unless theprovisions of law stipulate otherwise.", 10) In (S)22 Section1 point 4 now reads: "1.The President of the Management Board shall: ... 4) Issue internal orders, rules of procedure and other regulationsgoverning the Bank's operations. The President of the Management Board mayauthorise other persons to issue internal regulations of the Bank.", In (S)22 Section1 point 4 shall read as follows: "1.The President of the Management Board shall: ... 4) Issue internal orders, rules of procedure and other regulations governing theoperations of the Bank, save as otherwise provided for in Section 4. ThePresident of the Management Board may authorise the Vice-President of theManagement Board referred to in Section 4 to issue internal regulationswithin the framework of the basic organisational cells of the Head Officeof the Bank supervised by him,", 11) In (S) 22 full stop shall be replaced by a comma and section 1 point 5shall be added in the following wording: "1.The President of the Management Board shall: ... "5) Supervise the activity of basic organisational cells of the Head Office ofthe Bank performing tasks in the terms of: internal audit, legal service,macroeconomic analysis, corporate communication and the President's Office.", 12) In (S) 22 section 3 now reads: "3. The Management Board conducts the matters of the Bank and representsthe Bank. The members of the Management Board co-ordinate and supervise theactivity of the Bank pursuant to the division of competence established by thePresident of the Management Board.", In (S) 22 section 3 shall read as follows: "3. The Management Board of the Bank shall conduct the matters of the Bankand represent the Bank. All issues not reserved by virtue of the provisions ofthe law or of the Statute to fall within the scope of competence of otherauthorities, shall fall within the scope of competence of the Bank ManagementBoard. The members of the Management Board shall co-ordinate and supervise theactivity of the Bank pursuant to the division of competence, adopted by theManagement Board and approved by the Supervisory Board.", 13) In (S) 22 section 4 shall read as follows: "4. The Vice-president of the Management Board co-ordinating andsupervising specific divisions and basic organisational cells of the Head Officeof the Bank shall issue orders, rules of procedure and other regulationsgoverning the activity of the Bank within the framework thereof. TheVice-President may authorise other members of the Management Board and executivedirectors to issue regulations of the executive nature; executive ordinances,official instructions, handbooks of operational and technical procedures andother for which the form of an order is not reserved.", 14) In (S)22 Section 5 shall read as follows: "5. The Supervisory Board shall appoint upon the consent of the Commissionfor Banking Supervision a member of the Management Board supervising the humanresources or the corporate and international banking division.", 15) In (S) 22 the hitherto sections 4 and 5 shall be respectively marked assections 6 and 7, 16) (S) 23 now reads: "The Management Board of the Bank may issue commercial powers of attorneyonly to the employees belonging to the UniCredito Italiano S.p.A. capital group.The commercial power of attorney may be revoked by any member of the ManagementBoard.", (S) 23 shall read as follows: "The Management Board of the Bank may issue commercial powers of attorneyonly to the employees belonging to the UniCredito Italiano Banking Group. Thecommercial power of attorney may be revoked by any member of the ManagementBoard.", 17) In (S) 25 Section 2 point 4 now reads: "2. The Bank's basic funds are: ... 4) General risk fund, In (S) 25 Section 2 point 4 shall read as follows: "2. The Bank's basic funds are: ... 4) general risk fund for unidentified banking risk," 18) In (S) 25 Section 2 shall be added with the following wording: "2. The Bank's basic funds are: ... 6) profit under approval and net profit of the current reporting period,calculated in accordance with the applicable accounting principles, minus anyanticipated charges and dividends whose amounts should not exceed the amount ofthe net profit, as verified by expert auditors.", 19) (S) 38 now reads: "38 1. Internal control shall be conducted with application of the followingcriteria: lawfulness, correctness, reliability, organizational efficiency ofoperations conducted by the Bank and correctness of information and reportsbeing submitted. 2. Internal control shall be effected by way of: 1) Institutional control - carried out by an appointed organizational unit ofthe Bank's Head office, 2) Functional control - carried out by persons performing managerial duties inorganizational units and offices of the Bank. (S) 38 shall read as follows: "38 1. The Internal Control System of the Bank shall include all regulations,procedures and organizational structures which - acting together - aim toensure: 1) compliance with the strategy of the Bank, 2) effectiveness and efficiency of procedures, 3) protection of assets, 4) prevention of losses and errors, 5) security, stability and effectiveness of operations, 6) reliability and completeness of accounting and management information, 7) compliance of transactions with generally binding provisions of law,supervisory rules and internal policies, plans, regulations and procedures, and 8) support of the decision-making process. 2. The Internal Control System shall involve - in different roles - authoritiesof the Bank, individual units and organizational cells of the Bank, inparticular being part of the Organization Division, as well as all employees ofthe Bank, and consists of the following types of control: 1) Line (including Functional) Control, 2) Risk Management (including Functional) Control, and 3) Internal Audit (Institutional Control). 3. The purpose of Functional Control shall be assurance of conformity ofactivities of the Bank with procedures, limits and provisions, reaction toshortcomings and failures and monitoring of the implementation of the givenrecommendation. This control is carried out by each employee within the scope,quality and correctness of his/her activities; and, additionally, by his/hersupervisors and people co-operating therewith. 4. The purpose of the Line Control shall be assurance of correctness ofoperations. This control is carried out by the units of the Bank themselves(i.e. self and hierarchical control) and incorporated in procedures. 5. The purpose of the Risk Management Control shall be defining risk measurementmethods, verifying observance of assigned limits, and controlling consistency ofoperations of Units with assigned risk return rate. This control shall becarried out by units other than units directly involved in the management of thegiven process and independent from any business activity. 6. The purpose of the Internal Audit (the Institutional Control) shall be theexamination, assessment and recommendation of improvements to actual proceduresand mechanisms of the Internal Control System and assessment of violations torules and procedures. It is performed in an objective and independent manner bythe Internal Audit unit, which is subordinated directly to the President of theManagement Board. This unit also submits reports to the Supervisory Board. 7. The following authorities of the Bank shall be involved in the System: 1) the Management Board - responsible for designing, implementing and operating the Internal Control System, adjusted to size and profile of the riskrelated to the operations of the Bank, 2) the Supervisory Board - exercising supervision over the Internal ControlSystem and assessing its adequacy and effectiveness through the Audit Committeeand the Internal Audit." In connection with the changes in the content of Bank's Statute the ManagementBoard decided to present to the General Meeting for its acceptance the draft ofthe uniform text of Bank's Statute in the following wording: THE STATUTE OF BANK POLSKA KASA OPIEKI SPOLKA AKCYJNA I. GENERAL PROVISIONS (S) 1 1. Bank Polska Kasa Opieki Spolka Akcyjna, established in 1929, is a bankorganised in the form of a joint stock company, operating pursuant to thebinding legal regulations, and in particular according to the Banking Law,regulations of the Code of Commercial Companies and provisions of this Statute. 2. Bank Polska Kasa Opieki S.A. is a part of the UniCredito Italiano BankingGroup. UniCredito Italiano S.p.A. has the right, in accordance with the Polishlaw, through the statutory authorities of the Bank, to affect activities of theBank aimed at ensuring the stability of the Group. (S) 2 1. The name of the company shall be: "Bank Polska Kasa Opieki Spolka Akcyjna". 2. The Bank shall use the abbreviated name: "Bank Pekao S.A." (S) 3 The Bank shall have its registered seat in the capital city of Warsaw. (S) 4 1. The Bank shall operate within the territory of the Republic of Poland andabroad. 2. The Bank may operate through branches and other organisational units in thecountry and abroad. (S) 5 1. The Bank's organisational structure shall comprise: 1) Head Office, 2) Head Office operational units, 3) Regions, 4) Domestic Branches (inclusive of their respective sub-branches and banking services outlets) and abroad, 5) other organisational units, including Corporate Customers Centres. 2. The changes of the organisational structure of the Head Office of the Bankwithin the framework concerning only the first level of reporting shall beadopted by the Management Board and approved by the Supervisory Board. 3. The Organisation By-laws of the Bank, specify the detailed internal organisation of the Bank. II. ACTIVITIES OF THE BANK (S) 6 The scope of the activities shall comprise the conducting of the following activities in Poland and abroad: 1) Accepting cash as demand deposits or term deposits and keeping Depositaccounts, 2) Keeping other bank accounts, 3) Granting credits and loans, 4) Performing financial settlements in all forms accepted in domestic andinternational bank relations, 5) Performing banking operations regarding bills of exchange and cheques, 6) Accepting and making deposits in domestic and foreign banks, 7) Giving and confirming sureties and bank guarantees and opening andconfirming letters of credit, 8) Conducting purchase and sale of foreign exchange values, 9) Servicing state loans and managing funds on order, 10) Issuing banking securities, trading in such securities and keepingsecurities accounts, 11) Performing ordered activities related with the issue of securities, 12) Safe-keeping of objects, documents and securities, and making availablesafe deposit boxes, 13) Organising and participating in bank syndicates, 14) Trading and agency in financial debts, 15) Performing term financial operations, 16) Providing trustee services, 17) Issuing payment cards and performing operations with the use of such cards, 18) Keeping housing savings, 19) Providing consulting and advisory services in financial matters, 20) Acquiring or purchasing shares and rights arising from shares of stock ofanother legal entity other than a bank, or investment in investment funds, 21) Taking up obligations relating to issuance of securities, 22) Trading and agency in securities, 23) Carrying out conversion of debt into the debtor's property components, onterms and conditions agreed with the debtor, 24) Purchasing and selling real estate, 25) Dealing in derivative instruments on own account and on order, 26) Conducting acquisition activities pursuant to regulations of the act onorganisation and operation of pension funds, 27) Organising and rendering financial services in leasing and factoring, 28) Agency sale of participation units or certificates of investments in theunderstanding of the law on investment funds, 29) Performing activities in insurance brokerage, 30) Rendering services in transportation of valuables, 31) Running the securities accounts, 32) Performance of the function of a depository pursuant to provisions of theact on organisation and operation of pension funds and the act on investmentfunds, 33) Acting as an intermediary in carrying out money transfers and settlementsin foreign exchange payments, 34) Issuing the instrument of electronic money, 35) Conducting vindication activity by order of banks. III. BODIES OF THE BANK (S) 7 The Bodies of the Bank are: 1) General Meeting of Shareholders,2) Supervisory Board,3) Management Board of the Bank. The General Meeting of Shareholders (S) 81. The Ordinary General Meeting of Shareholders shall be convened by theManagement Board of the Bank. 2. The Ordinary General Meeting should be held in June at least. Should theGeneral Meeting of Shareholders be not convened by the Management Boardwithin the time limit set out in this Statute, the Supervisory Board shall havethe right to convene the Meeting. 3. The Extraordinary General Meeting of Shareholders shall be convened, ifrequired, by the Management Board of the Bank on its own initiative or on themotion of the Supervisory Board or the shareholders representing at least 1/10of the statutory capital. These shareholders may also require introducingspecific matters in the agenda of the next General Meeting. The requests forconvening the General Meeting of Shareholders and for including specific matterson the agenda of the General Meeting of Shareholders should be justified. 4. Should the Management Board not satisfy the requirements of the SupervisoryBoard or shareholders within two weeks from the date the requirement wassubmitted, respectively the Supervisory Board or the shareholders shall have theright to convene the Extraordinary General Meeting of Shareholders pursuant tothe authorisation of the court. (S) 9 All matters to be submitted to the General Meeting of Shareholders shall befirst submitted to the Supervisory Board for consideration. (S) 10 1. Shareholders may participate in the General Meeting of Shareholders inperson or through their attorneys. A power of attorney to attend and vote at theGeneral Meeting of Shareholders shall be made in writing and attached to theMinutes of the General Meeting of Shareholders, under the pain of invalidity. 2. The General Meeting of Shareholders shall be entitled to adopt resolutionsif at least 50% of the shares plus one share are represented, subject to themandatory provisions of law. 3. In the case the resolution has not been adopted for the lack of the quorumrequired by the Statute of the Bank, during the next General Meeting ofShareholders, with the same agenda as the General Meeting of Shareholders, whichdid not adopt a resolution for the lack of the quorum, the presence of theshareholders representing at least 20% of the shares is required for an adoptionof the resolution. 4. The General Meeting of Shareholders referred to in Section 3 should be heldon the date falling - not later than within eight weeks after the GeneralMeeting of Shareholders which has not adopted the resolutions for the lack ofquorum. 5. Resolutions of the General Meeting of Shareholders shall be adopted by anabsolute majority of votes, subject to the provisions of the Code of CommercialCompanies and the Statute of the Bank. 6. The removal from the agenda or abandoning the reconsideration of an issueplaced in the Agenda upon a motion from shareholders requires the GeneralMeeting to adopt a resolution by 3/4 majority of votes, upon prior consent ofall shareholders who submitted such motion. (S) 11 Each share of the Bank shall give right to one vote. (S) 12 1. The General Meeting of Shareholders shall be opened by the Chairman, or oneof the Deputy Chairmen, or in their absence - by one of the members of theSupervisory Board. If these persons are absent, the General Meeting ofShareholders shall be opened by the President of the Management Board or aperson designated by the Management Board. 2. Detailed procedure of conducting the sittings of the General Meeting ofShareholders shall be determined by the regulation adopted by the GeneralMeeting. (S) 13 The General Meeting of Shareholders, apart from other matters specified in theCode of Commercial Companies and the Statute of the Bank, shall have theauthority to: 1) Review and approve the report on the activities and the financial reportsof the Bank for the previous reporting year, 2) Adopt resolutions regarding distribution of profits or covering losses, 3) Review and approve the report on activities of the Supervisory Board, 4) Acknowledge the approval of duties by members of the Supervisory Board andthe Management Board, 5) Review and approve the report on activities and the financial report ofthe Bank's capital group, 6) Set the date of determining the right to dividend and the date of payingout the dividend, 7) Sell and lease of the enterprise, or its organised part, and establish alimited property right of usufruct thereof, 8) Amend the Statute of the Bank and establish its uniform text, 9) Increase or decrease the statutory capital of the Bank, 10) Issue bonds, including bonds convertible into shares or the bonds withpre-emptive right to acquire shares, and subscription warrants, 11) Redeem shares and determine conditions of such redemption, 12) Carry out a merger, division or liquidation of the Bank, 13) Create and liquidate special funds, 14) Appoint and recall members of the Supervisory Board, 15) Determine the rules of remunerating members of the Supervisory Board, 16) Conclude the agreement with a controlled company which provides for amanagement over the controlled company or a transfer of profit by suchcompany, 17) Appoint the auditor, 18) Deal with other matters falling within the scope of the activities of theBank which are submitted to the General Meeting of Shareholders. The Supervisory Board (S) 14 1. The Supervisory Board consists of seven to nine members appointed by theGeneral Meeting of Shareholders for the period of their common term of office,which shall last three years. 2. The number of members of the Supervisory Board shall be determined by theGeneral Meeting of Shareholders. 3. The Supervisory Board shall include at least two independent members. Theindependent members of the Supervisory Board shall be free of any associationswith the Bank and its shareholders or employees that might bear a materialimpact upon the capacity of an independent member to take impartial decisions. 4. An independent member of Supervisory Board is considered to be a person, whoon the day of election to the Supervisory Board meets jointly the followingconditions: 1) is not and has not been in the period of the last 3 years employed at theBank, its subsidiaries or parent company as a Board member or on any othermanagerial position, 2) is not and has not been in the period of the last 3 years a charteredpublic accountant or an employee of an entity providing auditing services whoexamined the financial reports of the Bank, its subsidiaries or parent company, 3) is not a shareholder holding indirectly or directly 5 % or more shares ofthe Bank and is not a member of the Management Board, Supervisory Board or anemployee holding a managerial position with any such shareholder, 4) is not receiving any additional remuneration, apart from the remuneration formembership in the Supervisory Board or any proprietary benefits from the Bank,its subsidiaries or parent company, 5) is not a person close to any member of the authorities of the Bank or toany employee of the Bank employed in a managerial position nor a person close toa shareholder, being a natural person, holding directly or indirectly 5 % ormore shares of the Bank, 6) does not have significant business relationships with the Bank, itssubsidiaries or the parent company which could affect his/her independence. 5. Members of the Supervisory Board shall perform their duties only in person. 6. The Supervisory Board shall elect its Chairman, two Deputy Chairmen andSecretary from among its members. The Deputy Chairman may simultaneouslyperform the function of the Secretary. 7. The Supervisory Board shall act in accordance with the Rules of Procedureadopted by it. (S) 15 1. Any member of the Supervisory Board may be recalled at any time by theGeneral Meeting of Shareholders. 2. Mandates of the members of the Supervisory Board shall expire: 1) On the date of holding the General Meeting accepting the financialreport for the last full reporting year of performing duties of a memberof the Supervisory Board, save as otherwise provided for in Section 3, 2) In the event of resignation of a member of the Supervisory Board fromhis position, 3) In the event of recalling a member of the Supervisory Board by theGeneral Meeting, 4) In case of death of a member of the Supervisory Board. 3. Mandate of the member of the Supervisory Board, which has been appointedbefore the end of the term of the Supervisory Board, shall expire simultaneouslywith the expiry of the mandates of the remaining members of the SupervisoryBoard. (S) 16 1. Meetings of the Supervisory Board shall be held as necessary, however, notless frequently than every two months. Meetings of the Supervisory Board shallbe convened by the Chairman of the Supervisory Board on his own initiative or ona motion of the Management Board or a member of the Supervisory Board. 2. If the Chairman of the Supervisory Board does not convene the meeting withintwo weeks after receiving the motion mentioned in Section 2, the proposer of themotion can convene it on his own giving the date, place and the proposed agenda. 3. (S) 17 1. The Supervisory Board shall adopt resolutions if at least half of itsmembers, including its Chairman, or one of the Deputy Chairmen, are presentduring the meeting and all the members have been invited. 2. Members of the Supervisory Board may also take part in adoption of theBoard's resolutions by casting their vote in writing through other member of theSupervisory Board, excluding the resolutions on matters introduced into agendaat the meeting. 3. Resolutions of the Supervisory Board shall be adopted by an absolutemajority of votes unless the provisions of law stipulate otherwise. 4 In special situations, a resolution may be adopted in writing (bycorrespondence) or with the use of means of distance communication. Theprocedure of adopting resolutions in writing and with the use of means ofdistance communication is set out in the Rules of procedure of the SupervisoryBoard. 5. The mode determined in Section 2 and 4 does not refer to resolutions adoptedin secret ballot. (S) 18 Besides the rights and obligations provided for in the Code of CommercialCompanies and the Statute of the Bank, the following matters shall fall inparticular into the authority of the Supervisory Board: 1) Review of the report of the Management Board on activities of the Bank andreview of the financial report of the Bank for the previous reporting year, 2) Review of the motions of the Management Board regarding distribution ofprofits or covering losses, 3) Review of the report on activities and financial report of the Bank'scapital group, 4) Submitting to the General Meeting of Shareholders a written report on theresults of reviews referred to in item (1) to (3), 5) Preparation of the report on activities of the Supervisory Board for theprevious reporting year, 6) Applying to the Banking Supervisory Commission for approval to appoint twomembers of the Management Board, including the President of the ManagementBoard, 7) Appointing, upon approval of the Banking Supervisory Commission, andrecalling the President of the Management Board of the Bank in a secret ballot, 8) Appointing and recalling in a secret ballot at the request of thePresident of the Management Board, the Deputy Presidents and members of theManagement Board of the Bank, including the appointment of one member of theManagement Board upon obtaining the approval of the Banking SupervisoryCommission, 9) Suspending in their duties for significant reasons individual or allmembers of the Management Board, 10) Delegating the members of the Supervisory Board for a period not exceedingthree months, to perform the duties of the members of the Management Board,which were dismissed, resigned, or for other reasons are incapable of performingtheir duties, 11) Determining the terms of contracts regulating employment or other legalrelationships between members of the Management Board and the Bank, 12) Issue opinions on motions of the Management Board of the Bank regardingthe establishing and access by the Bank as a shareholder (stockholder) intoother companies, and selling shares (stocks) should such investments be of long-term and strategic nature, 13) Issue of opinions on motions of the Bank's long-term development plans andannual financial plans of the Bank, 14) Issue of approval for creation and liquidation of foreign branches andrepresentative offices of the Bank, 15) Adoption of regulations concerning the creation and use of funds providedfor in the Statute of the Bank on request of the Management Board, 16) Approving motions of the Management Board of the Bank regardingacquisition, encumbering or sale of real estate or a share in real estate, orperpetual usufruct, in the event that its value exceeds 2,000,000 PLN. In othercases decisions are adopted by the Management Board of the Bank withoutnecessity of acceptance of the Supervisory Board, 17) Approval of motions of the Management Board concerning incurringobligations or disposal of assets which overall value in relation to one entityexceeds 5 % of equity funds of the Bank. (S) 19 The Chairman of the Supervisory Board and, in his absence, the Deputy Chairmanindicated by the Chairman of the Supervisory Board, shall be entitled to signagreements concluded by the Bank with members of the Management Board of theBank, acting on behalf of the Supervisory Board. The Management Board of the Bank (S) 20 1. The Management Board consists of 5 to 9 members. The Management Board of the Bank shall consist of the: 1) President of the Management Board of the Bank, 2) Deputy Presidents of the Management board of the Bank, 3) Members of the Management Board of the Bank. 2. The Management Board of the Bank shall operate on the basis of the Rules ofprocedure adopted by it. Rules of procedure shall in particular define thematters which require joint consideration by the Management Board, as well asthe procedure for adopting a resolution in writing. 3. Resolutions of the Bank Management Board may be adopted after all membershave been duly notified of the Management Board meeting. Resolutions aredeemed valid when adopted in the presence of at least half of the ManagementBoard members. 4. Resolutions shall be adopted by an absolute majority of votes unless theprovisions of law stipulate otherwise. (S) 21 1. The members of the Management Board shall be appointed for the common term,which shall last three years. 2. Mandates of Members of the Management Board of the Bank shall expire: 1) On the day of holding the General Meeting accepting the financial reportfor the last full reporting year of performing the duties of the memberof the Management Board save as otherwise provided for in Section 3, 2) In the event of resignation of a member of the Management Board from hisposition, 3) In the event of recalling a member of the Management Board by theSupervisory Board, 4) In case of death of a member of the Management Board. 3. Mandate of the member of the Supervisory Board appointed before the endof the term of the Management Board shall expire simultaneously with the expiryof the mandates of the remaining members of the Management Board.--------------- (S) 22 1. The President of the Management Board shall: 1) Manage operations of the Management Board of the Bank, 2) Convene and preside over meetings of the Management Board, 3) Present the standpoint of the Management Board towards the organs of theBank and in external relations, in particular towards the State organs, 4) issue internal orders, rules of procedure and other regulationsgoverning the operations of the Bank, save as otherwise provided for inSection 4. The President of the Management Board may authorise the Vice-President of the Management Board referred to in Section 4 to issue internalregulations within the framework of the basic organisational cells of theHead Office of the Bank supervised by him, 5) Supervise the activity of basic organisational cells of the Head Officeof the Bank performing tasks in the terms of: internal audit, legal service,macroeconomic analysis, corporate communication and the President's Office. 2. During the absence of the President of the Management Board of the Bank, hisduties shall be taken over by a member of the Management Board of the Bankappointed by the President of the Management Board. 3. The Management Board shall conduct the matters of the Bank and represent theBank. All issues not reserved by virtue of the provisions of the law or of theStatute to fall within the scope of competence of other authorities, shall fallwithin the scope of competence of the Bank Management Board. The members of theManagement Board shall co-ordinate and supervise the activity of the Bankpursuant to the division of competence, adopted by the Management Board andapproved by the Supervisory Board. 4. The Vice-president of the Management Board co-ordinating and supervisingspecific divisions and basic organisational cells of the Head Office of the Bankshall issue orders, rules of procedure and other regulations governing theactivity of the Bank within the framework thereof. The Vice-President mayauthorise other members of the Management Board and executive directors to issueregulations of the executive nature; executive ordinances, officialinstructions, handbooks of operational and technical procedures and other forwhich the form of an order is not reserved. 5. The Supervisory Board shall appoint upon the consent of the Commission forBanking Supervision a member of the Management Board supervising the humanresources or the corporate and international banking division. 6. The Management Board of the Bank, in the framework limited by the rules ofthe binding Polish law, submits to UniCredito Italiano S.p.A. as the parentcompany all required information and data. 7. The Management Board of the Bank, operating through the statutory bodies ofthe subsidiaries of the Bank, co-ordinates and affects their activities aimedat ensuring the stability of the group. (S) 23 The Management Board of the Bank may issue commercial powers of attorney onlyto the employees belonging to the UniCredito Italiano Banking Group. Thecommercial power of attorney may be revoked by any member of the Management Board. IV. PROCEDURE FOR SUBMITTING STATEMENTS REGARDING PROPERTY RIGHTS AND OBLIGATIONS OF THE BANK (S) 241. The following persons are authorised to make statements regarding propertyrights and obligations of the Bank and to sign on behalf of the Bank: 1) Two members of the Management Board or a member of the Management Boardwith a commercial attorney, 2) Two commercial attorneys, 3) Member of the Management Board or a commercial attorney acting jointlywith an attorney, 4) Attorneys acting individually or jointly within the limits of theirpowers of attorney. 2. Persons empowered to submit statements regarding property rights andobligations shall place their signatures under the name of the Bank. V. CAPITAL AND FUNDS OF THE BANK (S) 25 1. Equity funds of the Bank, including positions decreasing them, in accordancewith the regulations of Banking Law, shall consist of: 1) Basic funds, 2) Supplementary capital in the amount not higher than the basic funds of the Bank. 2. The basic funds of the Bank are: 1) Statutory capital, 2) Obligatory reserve equity, 3) Reserve equities, 4) General risk fund for unidentified banking risk, 5) Retained profit from previous years. 6) Profit under approval and net profit of the current reporting period,calculated in accordance with the applicable accounting principles, minus anyanticipated charges and dividends whose amounts should not exceed the amount ofthe net profit, as verified by expert auditors. (S) 26 1. Bank may create and liquidate special funds during and at the end of thefinancial year, on the basis of resolutions of the General Meeting ofShareholders. 2. Bank shall create funds provided for in binding legal acts. (S) 27 1. The statutory capital of the Bank amounts to 166,481,687,- (one hundredsixty six million four hundred eighty one thousand six hundred and eighty seven)PLN and is divided into 137,650,000 (one hundred thirty seven million sixhundred fifty thousand) Series A common bearer shares with the nominal value of1,- (one) PLN each, 7,690,000 (seven million six hundred ninety thousand) SeriesB common bearer shares with the nominal value of 1,- (one) PLN each, 10,630,632(ten million six hundred thirty thousand six hundred and thirty two) sharesSeries C common bearer shares with the nominal value of 1,- (one) PLN each,9,777,571 (nine million seven hundred seventy seven thousand five hundred andseventy one) Series D common bearer shares with the nominal value of 1,- (one)PLN each, 373,644 (three hundred seventy three thousand six hundred forty four)Series E common bearer shares with the nominal value of 1,-(one) PLN each and359,840 (three hundred fifty nine eight hundred and forty) Series H commonbearer shares of the nominal value of 1,-(one) PLN each. 2. Statutory capital of the Bank may be increased through the issue of newbearer shares, or through the increase of the nominal value of the existingshares. The General Meeting may increase the statutory capital earmarking forthis purpose the funds from reserve capital or other funds set up from profit,provided they can be used for this purpose in compliance with the Code ofCommercial Companies and the Statute of the Bank. 3. Shares may be issued as collective shares certificates. 4. Shares may be redeemed on conditions determined by the General Meeting ofShareholders. (S) 27 a The share capital of the Bank was conditionally increased by Resolution No 7 ofthe Extraordinary General Meeting of Shareholders dated 25 July 2003 by theamount of 1.660.000,- (one million six hundred sixty thousand) PLN, by a way ofissue 830,000 (eight hundred thirty thousand) Series F common bearer shares ofthe Bank with a nominal value of 1 (one) PLN each and 830,000 (eight hundredthirty thousand) Series G common bearer shares of the Bank with a nominal valueof 1 (one) PLN, in order to grant rights of priority to take up shares to theholders of Series A, B, C and D registered bonds of the Bank with right topriority, issued pursuant to Resolution No 6 of the Extraordinary GeneralMeeting of Shareholders dated 25 July 2003, with the exclusion of pre-emptiveright on shares in relation to the existing shareholders of the Bank. (S) 28 1. Obligatory reserve equity shall be created out of annual write-offs fromthe net profit to cover possible balance sheet losses, as may result fromoperations of the Bank. Annual write-offs into obligatory reserve equity shallamount to at least 8 % of net profit and shall be continued until the obligatoryreserve equity reaches at least 1/3 part of statutory capital of the Bank. Thesurplus achieved by the issue of shares over their nominal value shall betransferred to the obligatory reserve equity and other surplus - after the coverof cost of issue. 2. The amount of any such write-off shall be determined by the GeneralMeeting of Shareholders. 3. The General Meeting of Shareholders shall decide about using of obligatoryreserve equity. However, a part of this equity in the amount of one-third partof statutory capital may be only used to cover the loss showed in the financialreport. (S) 29 1. The general risk fund shall be established out of write-offs from netprofit for unidentified risks associated with banking activities. 2. The amount of any such write-offs shall be determined by the GeneralMeeting of Shareholders. (S) 30 1. The reserve equities shall be established out of write-offs from netprofit for the equities. 2. Amount of any such write-offs shall be determined by the General Meetingof Shareholders. 3. The reserve equities may be designated for covering the particular lossesor expenses as well as for increasing the statutory capital and paying out ofthe dividend. 4. The General Meeting of shall decide about using the reserve equities. (S) 31 1. Special funds shall be established out of write-offs from net profit madepursuant to a resolution of the General Meeting of Shareholders, which, ineach case, shall determine the amount of the write-off to be allocated to each particular fund, unless the obligation to create such funds results from alegal act. 2. Rules of procedure of establishing and using of special funds shall beadopted by the Supervisory Board. VI. FINANCIAL MANAGEMENT OF THE BANK, DISTRIBUTION OF PROFIT, COVERING OF LOSSES, ACCOUNTING (S) 32 The financial management of the Bank shall be conducted on the basis of annual financial plans. (S) 33 1. Annual net profit may be allocated for the following purposes, in amounts tobe resolved upon by the General Meeting of Shareholders: 1) Obligatory reserve fund, 2) General risk fund, 3) Reserve equities, 4) Dividend, 5) Special funds, 6) Other purposes. 2. Any claim for dividend shall expire after three years. The Bank shall pay no interest on the uncollected dividend. (S) 34 The Bank shall create a general risk reserve to debit the costs in order tocover rights connected with conducting banking operations. (S) 35 Balance sheet losses shall be covered from obligatory reserve equity and reserveequities in the manner specified by a resolution of the General Meeting ofShareholders. (S) 36 The Bank shall conduct accounting on the basis of the plan of accounts and inaccordance with the binding legal regulations. The organization and method ofaccounting shall be determined by the Management Board of the Bank. (S) 37 Financial year shall be equivalent to the calendar year. VII. INTERNAL CONTROL (S) 38 1. The Internal Control System of the Bank shall include all regulations,procedures and organizational structures which - acting together - aim toensure: 1) compliance with the strategy of the Bank, 2) effectiveness and efficiency of procedures, 3) protection of assets, 4) prevention of losses and errors, 5) security, stability and effectiveness of operations, 6) reliability and completeness of accounting and management information, 7) compliance of transactions with generally binding provisions of law, supervisory rules and internal policies, plans, regulations and procedures, and 8) support of the decision-making process. 2. The Internal Control System shall involve - in different roles - authorities ofthe Bank, individual units and organizational cells of the Bank, in particularbeing part of the Organization Division, as well as all employees of the Bank,and consists of the following types of control: 1) Line (including Functional) Control, 2) Risk Management (including Functional) Control, and 3) Internal Audit (Institutional Control). 3. The purpose of Functional Control shall be assurance of conformity ofactivities of the Bank with procedures, limits and provisions, reaction toshortcomings and failures and monitoring of the implementation of the givenrecommendation. This control is carried out by each employee within the scope,quality and correctness of his/her activities; and, additionally, by his/hersupervisors and people co-operating therewith. 4. The purpose of the Line Control shall be assurance of correctness ofoperations. This control is carried out by the units of the Bank themselves(i.e. self and hierarchical control) and incorporated in procedures. 5. The purpose of the Risk Management Control shall be defining riskmeasurement methods, verifying observance of assigned limits, and controllingconsistency of operations of Units with assigned risk return rate. This controlshall be carried out by units other than units directly involved in themanagement of the given process and independent from any business activity. 6. The purpose of the Internal Audit (the Institutional Control) shall be theexamination, assessment and recommendation of improvements to actual proceduresand mechanisms of the Internal Control System and assessment of violations torules and procedures. It is performed in an objective and independent manner bythe Internal Audit unit, which is subordinated directly to the President of theManagement Board. This unit also submits reports to the Supervisory Board. 7. The following authorities of the Bank shall be involved in the System: 1) the Management Board - responsible for designing, implementing and operating the Internal Control System, adjusted to size and profile of the riskrelated to the operations of the Bank, 2) the Supervisory Board - exercising supervision over the Internal ControlSystem and assessing its adequacy and effectiveness through the AuditCommittee and the Internal Audit. VIII. FINAL PROVISIONS para 39 In case of liquidation of the Bank, the General Meeting of Shareholders at therequest of the Supervisory Board shall appoint one or more liquidators anddetermine the method of carrying out the liquidation. para 40 Obligatory notices, including notices on convening the General Meeting ofShareholders shall be published by the Management Board of the Bank in the"Court and Business Monitor". The financial report shall be published in the official journal: DziennikUrzedowy Rzeczypospolitej Polskiej "Monitor Polski B". Legal base: (S) 39 sect. 1 p. 1 and 2 Ordinance of Council of Ministers This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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