Shareholder Meeting and shareholder rights

The Shareholder Meeting is PZU’s highest corporate body. The method of operation and the rights of the Shareholder Meeting are regulated by the Commercial Company Code and PZU’s Articles of Association.

The PZU Ordinary Shareholder Meeting adopted its Rules and Regulations under Resolution No. 31/2018 of 28 June 2018.

The Shareholder Meeting is the body authorized to make decisions concerning issues related to the organization and operations of the Issuer. Resolutions of the Shareholder Meeting are adopted by an absolute majority of votes, except in cases provided for in the Commercial Company Code or the Articles of Association.

The powers of the Shareholder Meeting, in addition to those specified in the Commercial Company Code or the Articles of Association, include the adoption of resolutions concerning the following:

• examination and approval of the Management Board’s report on the Company’s activity and the Management Board’s report on the activity of the PZU Group and the Company’s financial statements and consolidated financial statements of the PZU Group for the previous financial year and granting a discharge to individual members of the Company’s corporate bodies on the performance of their duties;
• review of the Management Board’s report on representation expenditures and expenditures for legal, marketing, public relations and public communication services and management consulting services;
• distribution of profits or coverage of losses;
• decisions on claims to remedy damages incurred during the incorporation of the Company or in its administration or oversight;
• transfer or lease of a business or an organized part thereof or establishing a limited right in rem thereon;
• redemption of shares or issue of bonds;
• establishing reserve capital accounts and making decisions on their allocation or manner of allocation;
• split of the Company, merger of the Company with another company, winding up or dissolving the Company;
• appointment and dismissal of members of the Supervisory Board, subject to the personal right granted to the State Treasury to appoint and dismiss one member of the Supervisory Board;
• establishing the rules for remunerating members of the Supervisory Board;
• purchase or transfer by the Issuer of real estate, perpetual usufruct or a share in real estate or perpetual usufruct whose gross value exceeds the equivalent of EUR 30.0 million (thirty million euros), subject to § 18a of the Articles of Association;
• setting the rules for shaping the compensation of Management Board members.

In accordance with the Articles of Association, the Shareholder Meeting’s approval is required for:

• disposal of non-current assets within the meaning of the Accounting Act of 29 September 1994 (Journal of Laws of 2016, items 1047 and 2255) classified as intangible assets, property, plant and equipment or long-term investments, including contribution to a company or a cooperative – if the market value of those assets exceeds 5% of total assets within the meaning of the Accounting Act of 29 September 1994, determined on the basis of the most recent approved financial statements; and also handing those assets over for use to another entity for a period longer than 180 days in a calendar year based on a legal act, if the market value of the subject matter of the legal act exceeds 5% of total assets, whereas the handing over of assets for use in the case of the following:
• lease, rental and other agreements to hand over an asset for use to other entities against payment, the market value of the subject matter of a legal act is defined as the value of benefits for:
• one year if the asset is handed over on the basis of contracts entered into for an unspecified term,
• the full duration of the term of validity in the case of contracts entered into for an unspecified term,
• lending for use agreements and other agreements to hand over an asset to other entities for gratuitous use, the market value of the subject matter of a legal act is defined as the value of benefits that would be due if a lease or rental agreement was executed instead, for:
• one year if the asset is to be handed over on the basis of a contract entered into for an unspecified term,
• the full duration of the term of validity in the case of contracts executed for an unspecified term,
• purchase of non-current assets within the meaning of the Accounting Act of 29 September 1994, with the value exceeding:
• PLN 100 million or
• 5% of total assets within the meaning of the Accounting Act of 29 September 1994, determined on the basis of the most recent approved financial statements,
• subscription or acquisition of shares in another company, with the value exceeding:
• PLN 100 million or
• 10% of total assets within the meaning of the Accounting Act of 29 September 1994, determined on the basis of the most recent approved financial statements,
• disposal of shares in another company, with the value exceeding:
• PLN 100 million or
• 10% of total assets within the meaning of the Accounting Act of 29 September 1994, determined on the basis of the most recent approved financial statements.

Shareholder Meeting resolutions concerning the following issues require a three-fourths majority of votes:

• amendments to the Articles of Association;
• decrease in the share capital;
• transfer or lease of a business or an organized part thereof or establishing a limited right in rem thereon.

A majority of 90% of votes at the Shareholder Meeting is required to pass resolutions relating to the following:

• preference shares;
• Issuer’s business combination by transferring all its assets to another company;
• merger by forming a new company;
• dissolving the Company (also as a result of moving its registered office or the head office abroad);
• liquidation, transformation or reduction in the share capital through the redemption of a portion of shares without a concurrent capital increase.

A Shareholder Meeting is held:

• as an Ordinary Shareholder Meeting which should be held within six months from the end of each financial year;
• as an Extraordinary Shareholder Meeting which is convened in cases specified in the generally applicable law and the Articles of Association.

The Management Board convenes an extraordinary shareholder meeting at its own initiative or in response to the written motion of the Supervisory Board, a shareholder or shareholders representing at least one-twentieth of the share capital. A motion can be filed electronically.

The Supervisory Board convenes:

• an Ordinary Shareholder Meeting if the Management Board fails to convene an Ordinary Shareholder Meeting by the prescribed deadline;
• an Extraordinary Shareholder Meeting if it deems that to be necessary;
• an Extraordinary Shareholder Meeting if the Management Board fails to convene an Extraordinary Shareholder Meeting in response to a motion submitted by an eligible shareholder, eligible shareholders or the Supervisory Board within fourteen days after the motion is filed.

Shareholders representing at least one-half of the share capital or at least one-half of the total number of votes in the Company may convene an Extraordinary Shareholder Meeting. These shareholders designate the Chair of this meeting.

Shareholder Meetings are held in Warsaw and convened by placing an announcement on PZU’s website in accordance with the method for providing current information specified in the Act on Public Offerings, Conditions Governing the Introduction of Financial Instruments to Organized Trading and Public Companies of 19 July 2005 in the form of current reports. Such announcement should be made not later than twenty-six days before the date of the Shareholder Meeting. The announcement and materials presented to shareholders are available on the date of convening the Shareholder Meeting on PZU’s corporate website in the “Investors relations” section under the “Shareholder Meeting” tab.

A duly convened Shareholder Meeting is deemed valid regardless of the number of attending shareholders.

All the matters submitted by the Management Board to the Shareholder Meeting should be first presented to the Supervisory Board to be examined and get an opinion. The Supervisory Board’s opinions are presented to the Shareholder Meeting no later than prior to the opening of the shareholder meeting along with other documents conveyed to the shareholders participating in the Shareholder Meeting and are available on the company’s website.

Resolutions are passed in an open ballot. A secret ballot is ordered in elections or on motions to dismiss members of the Issuer’s corporate bodies or liquidators, in matters concerning their personal liability to the Company as well as in other personal matters or, excluding cases when voting by open ballot ensues from a statute, at the request of at least one of the shareholders attending or represented at the Shareholder Meeting.

Shareholder rights and the method of exercising them at the Shareholder Meeting are specified in the Commercial Company Code and the Articles of Association. Only persons who were shareholders of the Issuer sixteen days prior to the date of the Shareholder Meeting have the right to participate in the Meeting (date of registration of attendance at the Meeting).

Shareholders may attend the Shareholder Meeting and exercise the right to vote in person or through a proxy. The proxy document to participate in the Shareholder Meeting and exercise the voting right must be granted in writing or electronically.

One PZU share gives the right to a single vote, subject to restrictions on exercising the voting rights described in the Articles of Association. A shareholder may vote differently from each of the shares held by it.

According to the Articles of Association, shareholders' voting rights are restricted in a way that no shareholder may exercise at a Shareholder Meeting more than 10% of the overall number of votes existing in the Company on the date of the Shareholder Meeting, with the reservation that, for the purposes of determining the obligations of the buyers of large blocks of shares contemplated by the Act of 29 July 2005 on Public Offerings and the Conditions for Offering Financial Instruments in an Organized Trading System and on Public Companies and the Insurance and the Reinsurance Activity Act of 11 September 2015, such restriction of voting rights will be deemed to be non-existent. The restriction on voting rights does not apply to the following:

• shareholders who on the date of adopting a Shareholder Meeting resolution implementing this limitation were entitled to shares representing more than 10% of the total number of votes in existence in the Company;
• shareholders acting with the shareholders specified in item 1 pursuant to executed agreements pertaining to jointly exercising the voting rights attached to shares.

During the Shareholder Meeting, each shareholder may provide draft resolutions concerning items on the agenda.

In accordance with the Commercial Company Code, detailed procedures concerning participation in the Shareholder Meeting and exercising voting rights are always presented in an announcement of the Shareholder Meeting published on the date of convening the Shareholder Meeting on PZU’s corporate website in the “Investors relations” section under the “Shareholder Meeting” tab.