Current Report No.: 7/2019

Incentive Programme for the management

Current Report No.: 7/2019

Date of preparation:

Abbreviated name of the Issuer: CIECH S.A.

Subject: Incentive Programme for the management

Legal basis: Art. 17.1 of the MAR – inside information

Text of the Report:

The Management Board of CIECH S.A. (the “Company”) informs that on 26 February 2019, the Supervisory Board of the Company passed a resolution approving the three-year Long-Term Incentive Plan of the CIECH Group for 2019-2021 for the key management of the CIECH Group (the “Plan”).

The intention of the Plan introduction is to harmonise activities of the key managers of the CIECH Group with the achievement of objectives contained in the CIECH Group Strategy for 2019 – 2021. Additionally, its goal is to motivate the management team to take action aimed at further development of the CIECH Group after 2021, as well as professionalisation of management and keeping the key members of the management of the CIECH Group. As a consequence, the Plan is to ensure a stable increase in shareholder value.

The main criterion for the Plan implementation will be the achievement of a value growth by the CIECH Group in 2019-21 ("Generated Value") at a level of at least 11% of the reference year, i.e. 2018. The Generated Value will be calculated as the difference in value of the CIECH Group (the "CIECH Group Value") generated at the end of 2021, compared with the same value at the end of 2018. The CIECH Group Value will be measured using the so-called TSR (Total Shareholder Return) indicator, taking into account among others: normalised CIECH Group's EBITDA, assumed multiplier for the CIECH Group's normalised EBITDA, consolidated net debt of the CIECH Group, the value of dividends paid, and cash inflows/outflows due to the issue/redemption of shares of the Company. The CIECH Group Value will be calculated on the basis of financial data disclosed in the audited consolidated financial statements of the CIECH Group. If the Generated Value is at a minimum level of 11% of the reference year (2018), a bonus pool will be created in the amount equal to 12% of the Generated Value. The bonus pool will be paid out in 2022-2024, in equal parts each year.

Legal basis: Article 17.1 of the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of 16 April 2014 on Market Abuse (the Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (Official Journal of the European Union L No. 173, p. 1) (the “MAR”).

Signatures of the Company’s representatives:

Dawid Jakubowicz – President of the Management Board 

Artur Osuchowski – Member of the Management Board

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