Information on changes in the agenda introduced upon a shareholder’s request and intended amendments to the Company’s Articles of Association

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Information on changes in the agenda introduced upon a shareholder’s request and intended amendments to the Company’s Articles of Association

New note

Legal grounds (selected in ESPI): Article 56 Section 1 Item 2 of the Act on Offering – current and periodic information

The Management Board of the Company under the business name of “PKP CARGO S.A.” with registered office in Warsaw (“Company”) hereby reports that it has received a demand from the Company’s shareholder (“Shareholder”), pursuant to Article 401 § 1 of the Commercial Companies Code (“CCC”), to place the following items in the agenda of the Extraordinary Shareholder Meeting of the Company convened for 29 September 2015 (“ESM”, current report no. 44/2015):

“1. Adopt resolutions on changes in the Company’s Supervisory Board;

2. Adopt a resolution on amending § 14 of the Company’s Articles of Association;

3. Adopt a resolution on amending § 19 of the Company’s Articles of Association;

4. Adopt a resolution to authorize the Company’s Supervisory Board to adopt the consolidated text of the Company’s Articles of Association”.

along with draft resolutions to these items of the agenda.

Accordingly, acting pursuant to Article 401 § 2 of CCC, the Company’s Management Board hereby announces a change to the agenda of the Extraordinary Shareholder Meeting. The wording of the amended agenda of the Extraordinary Shareholder Meeting and draft resolutions of the Extraordinary Shareholder Meeting, which incorporate the Shareholder’s request, constitute attachments hereto.

According to the Shareholders’ demand, the previous § 14 of the Company’s Articles of Association, which reads as follows:

“1. The Management Board shall be composed of one to five members, including the President of the Management Board, appointed for a joint term of office of three years.

2. As long as PKP S.A. holds all the votes at the Shareholder Meeting and as long as it is required by the mandatory provisions of law, the President of the Management Board and other Management Board member shall be appointed and dismissed by the Shareholder Meeting.

3. Subject to section 2 above, as long as the State Treasury, PKP S.A. or other state legal persons hold less than 100% of the Company’s shares, the President of the Management Board and other Management Board members are appointed and dismissed by the Supervisory Board, on the terms and conditions set forth in sections 4-6 below.

4. In the event that PKP S.A.’s share in the Company’s share capital is 50% or less, PKP S.A. will have the personal powers to select the candidates for the President of the Management Board on its own. The personal powers referred to in the preceding sentence shall be performed by way of delivering a written statement to the Supervisory Board Chairperson.

…5. The Supervisory Board will elect one Management Board member from among the candidates submitted by the Company’s employees. A candidate should have higher education, at least 5-year tenure of work in the PKP capital group and have no criminal record. The bylaws for electing candidates for a representative of employees in the Management Board shall be adopted by the Supervisory Board. Failure to appoint a representative of employees to the Management Board shall not preclude the appointment of the Management Board or its effective adoption of resolutions.

6. Appointment of Management Board members (including the President of the Management Board and the Management Board member mentioned in section 5 above) will be governed by the following rules:

1) Management Board members (including the President of the Management Board and the Management Board member mentioned in section 5 above) will be appointed following a recruitment procedure, whose rules and course is set forth in these Articles of Association and the bylaws adopted by the Supervisory Board (“Bylaws for Appointing Management Board Members”) subject to provisions of the Regulation issued by the Council of Ministers on 18 March 2008 on the Conduct of the Recruitment Procedure for the Position of Management Board Member in Certain Commercial Companies (Journal of Laws of 2003 No. 55 Item 476, as amended); The Bylaws for Appointing Management Board Members shall define in particular the qualifications that will be evaluated when selecting candidates for respective positions in the Management Board; amendments to the Bylaws for Appointing Management Board Members require consent of all Supervisory Board members who meet the independence criteria and are appointed following the rules set forth in § 20 and 21 below;

2) the Management Board members appointment procedure shall be carried out with participation of the nominations committee whose composition and functions are defined in § 26 Sec. 3 and 4;

3) the recruitment procedure for the position of a Management Board member is prepared and organized by a professional personnel consultancy company selected by a resolution adopted by the Supervisory Board on the terms and conditions set forth in the Bylaws for Appointing Management Board Members (“recruitment consultant”); responsibilities of a recruitment consultant include organization and handling of the recruitment procedure for the position of a Management Board member under an ongoing supervision of the nominations committee, including in particular preparations, organization and active participation in interviews with candidates for the position of a Management Board member; the recruitment consultant will prepare written opinions containing assessments of each candidate for the position of a Management Board member; subject to the provisions of the Articles of Association, detailed powers and tasks of the recruitment consultant in the recruitment procedure are defined in the Bylaws for Appointing Management Board Members;

4) the written opinion containing an assessment of respective candidates for the position of a Management Board member should contain an indication of at least one candidate with a positive opinion for each of the vacancies on the Management Board, which are being filled, while if the recruitment consultant issues a positive opinion on two or more candidates, all such candidates should be presented in the opinion; in the event that a recruitment consultant’s opinion contains no indication of at least one candidate with the recruitment consultant’s positive opinion, according to the terms and conditions set forth in the Bylaws for Appointing Management Board Members, the recruitment procedure will be closed without resolution and the Supervisory Board should launch a new recruitment procedure; other cases of closing the recruitment procedure without a decision and launching a new recruitment procedure are described in the Bylaws for Appointing Management Board Members;

…5) appointment to the position of a Management Board member is made only from among the candidates taking part in the recruitment procedure who received a positive opinion from the recruitment consultant;

6) the nominations committee will accept a report on the conducted recruitment procedure, which should contain in particular a representation on compliance of the procedure to appoint a Management Board member with provisions of these Articles of Association and the Bylaws for Appointing Management Board Members; detailed content of the report is defined in the Bylaws for Appointing Management Board Members; within 7 days of the date of signing the report, the Company will make the report public, in the form and in accordance with the rules set forth in the Bylaws for Appointing Management Board Members, including in the form of a current report and by publication on the Company’s website;

7) after each amendment of the Bylaws for Appointing Management Board Members, the nominations committee will prepare a written report with detailed information on the amendments, their nature and scope and also the rationale for the amendments; the report will also contain a representation on compliance of the procedure of amending the Bylaws for Appointing Management Board Members with the Articles of Association and the Bylaws for Appointing Management Board Members; subject to provisions of the Bylaws for Appointing Management Board Members, detailed content of the report is defined by the nominations committee; the Supervisory Board will deliver the written report of the nominations committee to the Company’s shareholders along with the materials for the Company’s shareholders for the next Shareholder Meeting;

8) costs of the recruitment procedure, including remuneration of the recruitment consultant, will be covered by the Company.

7. If any of the shareholders or any Grouping within the meaning of § 13 section 6 reaches or exceeds a 33% stake in the Company’s share capital then the Supervisory Board will need a 75% majority of votes to adopt a resolution to dismiss or suspend the Management Board or a Management Board member. The 75% majority is also required for the Shareholder Meeting to adopt a resolution to dismiss or suspend the Management Board or a Management Board member.

8. The provisions in section 7 above do not apply to a situation in which the shareholder who reached or exceeded the 33% stake in the Company’s share capital is PKP S.A. or the Grouping where PKP S.A. is a member.

9. The Supervisory Board sets the number of Management Board members.

10. The power referred to in section 5 above was granted to the Company’s employees in connection with Article 4 section 4 of the Act on Commercialization, Restructuring and Privatization of PKP and the provisions of the Employee Guarantee Package.”

…shall read as follows:

“1. The Management Board shall be composed of one to five members, including the President of the Management Board, appointed for a joint term of office of three years.

5. The Supervisory Board will elect one Management Board member from among the candidates submitted by the Company’s employees. A candidate should have higher education, at least 5-year tenure of work in the PKP capital group and have no criminal record. The bylaws for electing candidates for a representative of employees in the Management Board shall be adopted by the Supervisory Board. Failure to appoint a representative of employees to the Management Board shall not preclude the appointment of the Management Board or its effective adoption of resolutions. The power referred to in the first sentence above was granted to the Company’s employees in connection with Article 4 section 4 of the Act on Commercialization, Restructuring and Privatization of PKP and the provisions of the Employee Guarantee Package.

6. Appointment of Management Board members (including the President of the Management Board and the Management Board member mentioned in section 5 above) will be governed by the following rules:

2) the Management Board members appointment procedure shall be carried out with participation of the nominations committee whose composition and functions are defined in § 26 Sec. 3 and 4;

5) appointment to the position of a Management Board member is made only from among the candidates taking part in the recruitment procedure who received a positive opinion from the recruitment consultant;

8) costs of the recruitment procedure, including remuneration of the recruitment consultant, will be covered by the Company.

9. The Supervisory Board sets the number of Management Board members.

10. A Management Board member may not discharge an elected function or sit in the bodies of a company, inter-company or national trade union organization, a federation of trade unions or a confederation of trade unions.

11. Whereas the obligation ties connecting each Management Board member with the Company constitute a unique organizational and corporate relationship aimed at handling the Company’s matters and managing the Company with due diligence, from which the Management Board member’s obligation ensues to act with care and an increased measure of diligence, given the professional nature of duties performed in a management body, each Management Board member:

1) is obligated to exercise his/her rights and perform his/her obligations in person, with utmost professional care, subject to the Articles of Association and applicable provisions of law;

2) cannot take any action or perform any activities that would be in contradiction to his/her duties or could raise suspicion of bias of that Management Board member or of promotion of his/her private interest;

3) is obligated to keep confidential all information and documents conveyed to the Management Board member in connection with the exercise of rights and performance of duties in the Management Board and not to disclose them to other persons, unless required by the mandatory provisions of law”.

According to the Shareholders’ demand, the previous § 19 of the Company’s Articles of Association, which reads as follows:

“1. Subject to sections 8 and 10 below and § 22, the Supervisory Board consists of between eleven and thirteen members, including the Chairperson and the Deputy Chairperson of the Supervisory Board, appointed for a joint term of office. Subject to the provisions of sections 2 and 3 below, Supervisory Board members shall be appointed and dismissed by the Shareholder Meeting.

2. PKP S.A. shall be entitled to appoint and dismiss Supervisory Board members in a number equal to half the composition of the Supervisory Board determined in accordance with section 8 (if such number is not an integer, it shall be rounded down to the nearest integer) plus one. At least one of the Supervisory Board members appointed by PKP S.A. in accordance with this section should comply with the conditions of independence within the meaning of Article 86 Section 5 of the Act on Auditors and be qualified in accounting or auditing.

3. The Company’s employees shall be entitled to appoint and dismiss their three representatives to the Supervisory Board. The bylaws for electing employee representatives to the Supervisory Board shall be adopted by the Supervisory Board. Failure to elect the Supervisory Board members representing the employees shall not preclude the appointment of the Supervisory Board or its effective adoption of resolutions.

4. Subject to section 5 below, the Supervisory Board shall elect the Chairperson and the Deputy Chairperson of the Supervisory Board from among its members.

5. PKP S.A. shall have a personal power to appoint the Chairperson of the Supervisory Board from among the Supervisory Board members elected by voting in separate groups in accordance with the procedure prescribed in Article 385 § 3-7 of the Commercial Companies Code. In the event of PKP S.A.’s failure to appoint the Chairperson of the Supervisory Board within thirty days of the election of the Supervisory Board in accordance with the procedure referred to in the preceding sentence, the Supervisory Board shall elect the Chairperson of the Supervisory Board from among its members .

…6. The personal powers mentioned above in section 2 and section 5 shall be performed by way of delivering a written statement to the Company about the appointment or dismissal of a given Supervisory Board member or about selecting the Supervisory Board Chairperson.

7. The term of office of Supervisory Board members is three years.

8. The number of Supervisory Board members shall be set by PKP S.A. and this provision is also applicable to the election of the Supervisory Board by voting in separate groups in accordance with the procedure prescribed in Article 385 of the Commercial Companies Code (in which case the Supervisory Board may be composed of between five and thirteen members). The personal powers referred to in the preceding sentence shall be performed by way of delivering a written statement to the Company.

9. In the event of expiration of the mandate of any Supervisory Board member elected by voting in separate groups in accordance with the procedure prescribed in Article 385 § 3-7 of the Commercial Companies Code, PKP S.A. shall be entitled to a personal power to appoint one new Supervisory Board member in his/her place. The other Supervisory Board members shall be appointed by the Shareholder Meeting.

10. In the event of the dismissal of a Supervisory Board member appointed from among persons elected by the employees during the term of office, until such vacancy in the position of a Supervisory Board member elected by the employees is filled, resolutions adopted by the Supervisory Board shall be valid provided that the Supervisory Board is composed of at least five members.

11. The granting of the power referred to in section 3 above to the Company’s employees was effected in conjunction with Article 4 Section 4 of the Act on Commercialization, Restructuring and Privatization of PKP and the provisions of the Employee Guarantee Package.

12. Representatives of the Company’s employees in the Supervisory Board may only be persons who have passed an examination for candidates for members of supervisory boards in companies in which the State Treasury is the sole shareholder, persons exempt from the obligation to pass such examination in accordance with applicable laws and the holders of other equivalent qualifications.

13. A Supervisory Board member appointed in accordance with the provisions of section 3 above may also be dismissed for important reasons by the Shareholder Meeting.”

shall read as follows:

4. Subject to section 5 below, the Supervisory Board shall elect the Chairperson and the Deputy Chairperson of the Supervisory Board from among its members.

14. Whereas the obligation ties connecting each Supervisory Board member with the Company constitute a unique organizational and corporate relationship aimed at exercising continuous supervision over the Company, from which relationship the Supervisory Board member’s obligation ensues to act with care and an increased measure of diligence, given the professional nature of duties performed in a supervisory body, each Supervisory Board member:

1) should have higher education;

2) is obligated to exercise his/her rights and perform his/her obligations in person, with utmost professional care, subject to the Articles of Association and applicable provisions of law;

3) cannot take any action or perform any activities that would be in contradiction to his/her duties or could raise suspicion of bias of that Supervisory Board member or of promotion of his/her private interest;

4) is obligated to keep confidential all information and documents conveyed to the Supervisory Board member in connection with the exercise of rights and performance of duties in the Supervisory Board and not to disclose them to other persons unless required by mandatory provisions of law.”

Furthermore, in accordance with the announcement on convening the Extraordinary Shareholder Meeting published in Current Report 44/2015 of 2 September 2015, the following amendments to the Company’s Articles of Association are hereby proposed:

In § 5 section 1 of the Articles of Association, item 2a) shall be added after item 2), which shall read as follows:

“2a) financial and insurance activities, including:

a) activities of holding companies PKD – 64.20.Z,

b) other financial service activities, except insurance and pension funding, not elsewhere classified PKD – 64.99.Z,

c) other activities auxiliary to financial services, except insurance and pension funding PKD – 66.19.Z.”

The previous § 5 section 1 item 3) of the Articles of Association shall read as follows: “3) professional, scientific and technological activity, including:

a) accounting and bookkeeping activities; tax consulting PKD – 69.20.Z,

a1) testing and analysis related to food quality PKD – 71.20.A,

b) other technical testing and analysis PKD – 71.20.B,

c) other research and experimental development on natural sciences and engineering PKD – 72.19.Z,

d) advertising agencies PKD – 73.11.Z,

e) intermediation in the sale of advertising time and space on the radio and on television PKD – 73.12.A,

f) intermediation in the sale of advertising space in printed media PKD – 73.12.B,

g) intermediation in the sale of advertising time and space in electronic media (Internet) PKD – 73.12.C,

h) intermediation in the sale of advertising time and space in other media PKD – 73.12.D,

i) other professional, scientific and technical activities not elsewhere classified PKD – 74.90.Z.”

shall read as follows: “3) professional, scientific and technological activity, including:

a) accounting and bookkeeping activities; tax consulting PKD – 69.20.Z,

a1) activities of head offices and holding companies, except financial holding companies PKD – 70.10.Z,

a2) other business and management consulting activities PKD – 70.22.Z,

a3) testing and analysis related to food quality PKD – 71.20.A,

b) other technical testing and analysis PKD – 71.20.B,

c) other research and experimental development on natural sciences and engineering PKD – 72.19.Z,

d) advertising agencies PKD – 73.11.Z,

e) intermediation in the sale of advertising time and space on the radio and on television PKD – 73.12.A,

f) intermediation in the sale of advertising space in printed media PKD – 73.12.B,

g) intermediation in the sale of advertising time and space in electronic media (Internet) PKD – 73.12.C,

h) intermediation in the sale of advertising time and space in other media PKD – 73.12.D,

i) other professional, scientific and technical activities not elsewhere classified PKD – 74.90.Z.”

The previous § 5 section 1 item 9) of the Articles of Association shall read as follows: “9) other activities, including:

a) repair and maintenance of other transport equipment PKD – 33.17.Z,

b) production and supply of steam, hot water and air for air conditioning systems PKD – 35.30.Z,

c) other monetary intermediation PKD – 64.19.Z,

d) non-scholastic forms of education not elsewhere classified PKD – 85.59.B,

e) publishing of journals and other periodicals PKD – 58.14.Z,

f) other publishing activities PKD – 58.19.Z,

g) data processing, hosting and related activities PKD – 63.11.Z,

h) public relations and communication activities PKD – 70.21.Z,

i) other business and management consulting activities PKD – 70.22.Z,

j) market research and public opinion polling PKD – 73.20.Z,

k) activities of employment placement agencies PKD – 78.10.Z,

l) other human resource provision PKD – 78.30.Z,

m) combined office administrative service activities PKD – 82.11.Z,

n) activities related to the organization of trade fairs, exhibitions and congresses PKD – 82.30.Z.”

shall read as follows: “9) other activities, including:

a) repair and maintenance of other transport equipment PKD – 33.17.Z,

b) production and supply of steam, hot water and air for air conditioning systems PKD – 35.30.Z,

c) other monetary intermediation PKD – 64.19.Z,

d) non-scholastic forms of education not elsewhere classified PKD – 85.59.B,

e) publishing of journals and other periodicals PKD – 58.14.Z,

f) other publishing activities PKD – 58.19.Z,

g) data processing, hosting and related activities PKD – 63.11.Z,

h) public relations and communication activities PKD – 70.21.Z,

i) other business and management consulting activities PKD – 70.22.Z,

j) market research and public opinion polling PKD – 73.20.Z,

k) activities of employment placement agencies PKD – 78.10.Z,

l) other human resource provision PKD – 78.30.Z,

m) combined office administrative service activities PKD – 82.11.Z,

n) activities related to the organization of trade fairs, exhibitions and congresses PKD – 82.30.Z,

o) services provided by collection agencies and credit bureaus PKD – 82.91.Z,

p) other business support service activities not elsewhere classified PKD – 82.99.Z.”

The previous § 14 section 6 items 2, 3, 6 and 7 of the Articles of Association reading as follows:

2) the Management Board members appointment procedure shall be carried out with participation of the nominations committee whose composition and functions are defined in § 26 sections 3 and 4;

3) the recruitment procedure for the position of a Management Board member is prepared and organized by a professional personnel consultancy company selected by a resolution adopted by the Supervisory Board on the terms and conditions set forth in the Bylaws for Appointing Management Board Members (“recruitment consultant”); responsibilities of a recruitment consultant include organization and handling of the recruitment procedure for the position of a Management Board member under an ongoing supervision of the nominations and compensation committee, including in particular preparations, organization and active participation in interviews with candidates for the position of a Management Board member; the recruitment consultant will prepare written opinions containing assessments of each candidate for the position of a Management Board member; subject to the provisions of the Articles of Association, detailed powers and tasks of the recruitment consultant in the recruitment procedure are defined in the Bylaws for Appointing Management Board Members;

shall read as follows:

“2) the Management Board members appointment procedure shall be carried out with participation of the nominations and compensation committee whose composition and functions are defined in § 26 sections 3 and 4;

3) the recruitment procedure for the position of a Management Board member is prepared and organized by a professional personnel consultancy company selected by a resolution adopted by the Supervisory Board on the terms and conditions set forth in the Bylaws for Appointing Management Board Members (“recruitment consultant”); responsibilities of a recruitment consultant include organization and handling of the recruitment procedure for the position of a Management Board member under an ongoing supervision of the nominations and compensation committee, including in particular preparations, organization and active participation in interviews with candidates for the position of a Management Board member; the recruitment consultant will prepare written opinions containing assessments of each candidate for the position of a Management Board member; subject to the provisions of the Articles of Association, detailed powers and tasks of the recruitment consultant in the recruitment procedure are defined in the Bylaws for Appointing Management Board Members;

6) the nominations and compensation committee will accept a report on the conducted recruitment procedure, which should contain in particular a representation on compliance of the procedure to appoint a Management Board member with provisions of these Articles of Association and the Bylaws for Appointing Management Board Members; detailed content of the report is defined in the Bylaws for Appointing Management Board Members; within 7 days of the date of signing the report, the Company will make the report public in the form and in accordance with the rules set forth in the Bylaws for Appointing Management Board Members, including in the form of a current report and by publication on the Company’s website;

7) after each amendment of the Bylaws for Appointing Management Board Members, the nominations and compensation committee will prepare a written report with detailed information on the amendments, their nature and scope and also the rationale for the amendments; the report will also contain a representation on compliance of the procedure of amending the Bylaws for Appointing Management Board Members with the Articles of Association and the Bylaws for Appointing Management Board Members; subject to provisions of the Bylaws for Appointing Management Board Members, detailed content of the report is defined by the nominations and compensation committee; the Supervisory Board will deliver the written report of the nominations and compensation committee to the Company’s shareholders along with the materials for the Company’s shareholders for the next Shareholder Meeting.”

The previous § 26 sections 3 and 4 of the Articles of Association reading as follows:

“3. The Supervisory Board appoints the nominations committee, which consists of three Supervisory Board members, of which at least one Supervisory Board Member meeting the independence criteria and appointed in the manner specified in § 20 and 21 above, who serves as the chairperson.

4. The nominations committee organizes and exercises ongoing oversight over the recruitment procedure for the positions of Management Board members and over the Management Board member evaluation and appointment process.”

shall read as follows:

“3. The Supervisory Board appoints the nominations and compensation committee, which consists of at least three Supervisory Board members, of which at least one Supervisory Board Member meeting the independence criteria and appointed in the manner specified in § 20 and 21 above, who serves as the chairperson.

4. The nominations and compensation committee organizes and exercises ongoing oversight over the recruitment procedure for the positions of Management Board members and over the Management Board member evaluation and appointment process.”

Legal basis:
§ 38 Section 1 Items 4) and 2) of the Regulation issued by the Minister of Finance on 19 February 2009 on the Current and Periodic Information Transmitted by Securities Issuers and the Conditions for Recognizing the Information Required by the Regulations of a Non-Member State as Equivalent.

Information on changes in the agenda introduced upon a shareholder’s request and intended amendments to the Company’s Articles of Association

Attachment