Remuneration policy for Members of the Management Board in Enea SA
The principles of remunerating Members of the Management Board of Enea SA in force in 2016 were introduced pursuant to the resolutions of Enea SA’s Supervisory Board dated 7 January 2016 and 18 February 2016. All the Members of the Management Board concluded Service Agreements - managerial contracts - with the Company, pursuant to the provisions the act of the 3 March 2000 on remuneration of people managing certain legal entities (J. L. No. 26, item 306, as amended). Service agreements concluded by the Company and non-competition agreements enclosed to them provided as follows:
a) during the term of the Service agreement Members of the Board were authorised to receive a fixed monthly remuneration and a performance-related annual bonus in the amount of 40% of the total annual remuneration, calculated based on the principles specified in detail in the Service agreement
b) in return for complying by Members of the Board with the obligations resulting from the non-competition clause during its validity, Members of the Board might receive a compensation in the total amount equal to the product of: 1/12 of the total remuneration and number of months of validity of non-competition clause
c) if the Service agreement expires as a result of the expiry of the Member of the Board's term, the Company reserved the right to, for a period of one month of the agreement expiry, demand that Members of the Board render services relating to the transfer of issues connected with the business operations to a person indicated by the Chairman of the Supervisory Board. By this title Members of the Board were authorised to receive remuneration in the amount equal to the fixed remuneration
d) Members of the Board were entitled to receive a severance payment in the amount equal to the triple 1/12s of the total remunerations except for the following situations:
- termination of the Service agreement by the Company or its expiry as a result of recalling from the position of a Member of the Board for a culpable material breach of the provisions of the Statute or the above mentioned Agreement to a detriment to the Company,
- termination of the Service agreement by the Company or its expiry as a result of loss of the right to be a Member of the Board in the case specified in Article 18 of the Commercial Companies Code,
- termination of the Service agreement by the Member of the Board or its expiry as a result of resignation from that position, if the termination of the said Agreement or resignation was not a result of reasons attributable to the Company.
The severance payment mentioned above was subject to an increase - if the Service agreement expires as a result of the Member of the Board's term expiry and was not prolonged as a result of a renomination of the same person to be a Member of the Board - by the value of the triple 1/12s of the total remunerations as an equivalent in lieu of notice.
In the event of default by Members of the Board of the prohibition to conduct competitive operations Members of the Board would loose their right to receive further instalments of the damages and were obliged to pay a contractual penalty for the account of the Company. The Company had the right to terminate the non-competition agreement if the non-competition clause grounds ceased to be valid.
Members of the Board at own expense got insured against third party liability that may occur as a result of a failure to perform or improper performance of the management agreement.
Pursuant to the resolution of the Extraordinary General Meeting of Shareholders of Enea SA of 15 December 2016 regarding the amount of remuneration of members of the Management Board, adopted in relation to the entry into force of the act of 9 June 2016 on the principles of determining the remuneration of people managing some companies, the Supervisory Board with the Resolution of 17 January 2017 specified the remuneration policy for the existing Members of the Management Board in Enea SA.
Since 1 January 2017 all the Members of the Management Board conclude Agreements on Provision of Management Services (Agreement) with the Company, which foresee that:
a) during the term of the Agreement Members of the Management Board are entitled to receive a fixed monthly remuneration and variable remuneration depending on the level of achievement of the management objectives which may not exceed the amount of the annual fixed remuneration
b) in return for complying by Members of the Board with the obligations resulting from the non-competition clause during its validity, Members of the Board may receive a compensation in the total amount equal to the product of 0.5x of the monthly fixed remuneration and number 6
c) if the Management service agreement expires as a result of the expiry of the Member of the Board's term, the Company reserves the right to, for a period of one month of the agreement expiry, demand that Members of the Board render services relating to the transfer of issues connected with the business operations to a person indicated by the Supervisory Board, subject to the terms specified in the Agreement. By this title Members of the Board are authorised to receive remuneration in the amount equal to the monthly fixed remuneration
d) Members of the Board are entitled to receive a severance payment in the amount equal to the 3x the fixed remuneration except for the following situations:
- termination, withdrawal from or amendment to the Contract as a result of a change to the position held by the Member of the Management Board in the composition of the Management Board
- termination, withdrawal from or amendment to the Contract as a result of appointing the Managing person for the next term of the Management Board,
- taking up the position of the Member of the Management Board within the capital group under Article 4 item 14 of the act of 16 February 2007 on protection of competition and consumers
- resignation from holding the position.
In the event of a breach by Members of the Management Board of the non-competition clause after expiry of their functions, Members of the Management Board lose their right to compensation which expires as of the date of delivery of a termination notice to the Member of the Management Board. Additionally, the Company has the right to claim payment of the contractual penalty by the Member of the Management Board. The agreement includes a commitment of a managing person to hold third party liability insurance, at their own expense, which may occur in relation to the provision of management services.
