Rules of the Incentive Program
By Resolution of the Extraordinary General Assembly of 30 November 2007 we approved an Incentive Program in order to provide incentive and to reward the contribution of the management and our key employees and partners. The Resolution approving the Incentive Program was published in our Current Report No. 43/2007 on 01 December 2007. The provisions of the Incentive Program were modified and specified more precisely pursuant to the resolution of the Ordinary General Assembly dated 07 July 2008. We published the resolution changing the provisions of the Incentive Program in the Current Report No. 27/2008 dated 08 July 2008.
The approved Incentive Program provides that members of the Management Board, employees and partners may acquire up to 200,000 shares in our Company, starting from the first day of the third month following the month in which our financial statements for the financial year ending on 31 March 2010 are approved. The exercise price will equal the arithmetic mean of the closing share prices of the Company at the Stock Exchange in Warsaw in 60 sessions before 30 November 2007 (i.e. PLN 13.81) minus the equivalent of dividend per one share distributed during the validity of the program, increased by the interest for the period from the date of distribution of a given dividend to the date of the final completion of the Incentive Program calculated applying interest rate equal to the National Bank of Poland base lending rate.
The exercising of the rights to the employee share program is subject to several conditions, in particular:
1. Rights are awarded by the Management Board and Supervisory Board (the rights to the Management Board were awarded by the General Assembly),
2. The anticipated profit growth is generated,
3. The price of the Company shares grows faster over the relevant period than the sWIG80 index by minimum 10 % or drops by minimum 10 % less than the relevant drop of the sWIG80 index over the relevant period,
4. The entitled persons remain employed or continue collaboration with the Company (the reservation does not apply to the members of the Management Board of the present term of office).
Information on control system of the employee share program
The incentive share program in our Company is being implemented pursuant to the resolution of the Extraordinary General Assembly No. 5/2007 of 30 November 2007 and the resolution of the Ordinary General Assembly No. 22/2008 of 07 July 2008 that amends it. The progress of the program is monitored by the Supervisory Board.
Execution of the incentive program
Pursuant to a resolution of the Extraordinary General Assembly of 30 November 2007 along with the changes pursuant to the resolution of the Ordinary General Assembly dated 07 July 2008, we approved an Incentive Program to retain inter alia our management staff.
Pursuant to the provisions of the Incentive Program, the Management Board shall be entitled to acquire up to 65,000 series D ordinary shares (39,000 for the President and 26,000 for the Vice President) for the first year of the program in exchange for series A subscription warrants. The right is due to the fact that for the last financial year we generated profit of no less than PLN 4,202 thousand having allowed for the valuation effects of the incentive program. The benefit is contingent as the right may only be exercised when the requirements specified in the Incentive Program are satisfied over the period of 180 days from exercise date being the first day of the third month following the month in which the financial statements for the last financial year of the Incentive Program are approved (2010). The exercise price of series D shares acquired pursuant to the right under series A subscription warrants will equal arithmetic mean of the closing share prices of the Company at the Warsaw Stock Exchange in 60 sessions before the rights have been awarded (i.e. PLN 13.81) minus the equivalent of dividend per one share distributed during the validity of the program increased by the interest for the period from the date of a given dividend distribution to the date of the final completion of the Incentive Program calculated applying interest rate equal to the base lending rate of the National Bank of Poland.
In view of the structure of the Incentive Program and the requirements to be met as well as the exercise day of the rights [the first day of the third month following the month in which the financial statements for the last financial year of the program are approved (2009/2010)], members of the Management Board who as of 31 March 2008 are the eligible persons in Year I of Program Implementation did not acquire any actual benefits as of the end of the last financial year; furthermore, in view of the prices of the Company’s shares until the date hereof, no future and potential benefits can be estimated.