ARTICLES OF ASSOCIATION
of
SLOVAK TELEKOM, A. S., A JOINT STOCK COMPANY
Preamble
Slovak Telekom, a.s. is a public joint-stock company established under the Slovak legislation, conducting
business especially in the area of electronic communication network and electronic communication
service (the Company).
Article 1
BUSINESS NAME AND REGISTERED SEAT OF THE COMPANY
1.
The business name of the Company is Slovak Telekom, a.s.
2.
The registered seat of the Company is Bajkalská 28, 817 62 Bratislava.
Article 2
SCOPE OF BUSINESS
The scope of business of the Company is the following:
a)
providing electronic communication networks which are functionally interconnected set of
transmission systems and, where applicable, switching and routing facilities including
network elements that are not active, which enable transmission of signals by wire, by radio,
by optical or by other electromagnetic facilities including satellite networks, circuit- and
packet-switched fixed networks including internet and mobile terrestrial networks, power
distribution networks to the extent in which they are used for transmission of signals,
networks for radio and television broadcasting, and cable distribution systems, regardless
the type of information transmitted;
b)
providing electronic communication services which are services usually provided for a
payment and which consist wholly or mainly in the conveyance of signals in networks,
including telecommunication services and transmission services in the networks used for
radio and television broadcasting;
c)
setting up, operation, construction, maintenance, and servicing, within the contracted
scope of the telecommunication equipment, networks and information technologies owned
by other entities;
d)
planning and prognosis of network optimization;
e)
manufacturing, installation and repairs of electric machinery and devices;
f)
assembly and repairs of office and copying technology;
g)
construction of infrastructure facilities - construction of telecommunication lines and
facilities (interior and exterior telecommunication equipment, distribution systems in
buildings, exterior line constructions);
h)
purchase and sale of goods within the scope of a free trade license (retail, wholesale);
i)
assembly and repairs of telecommunication equipment;
j)
conduct of advertising, promotional and acquisition activities;
k)
services of public couriers and messengers;
l)
financial and operational leasing;
m) performance of construction supervision activities;
n)
book keeping;
o)
storage – excluding operation of public storage facilities;
p)
packing service and handling of goods;
q)
road freight service by vehicles (trucks) with overall weight of up to 3.5 tons including
trailers;
r)
business, organisation and economy consultancy
s)
market survey;
t)
organisation of educational and sporting events;
u)
administrative works;
v)
security and technical services;
w) development of IT systems;
x)
provision of the public electronic communication service by means of retransmission of
radio and TV programmes using the public electronic communication network;
y)
providing of credits and loans from own equity in a non-banking manner;
z)
factoring and forfeiting;
aa) assembly and repairs of computing technology within safe voltage limits;
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bb) television broadcasting;
cc) accommodation services without providing of catering;
dd) services related to film or video production;
ee) conditioned access to protected television and/or radio programmes and supplementary
services in DVB-S system;
ff)
advisory in the area of a public mobile cellular radiophone network;
gg) advisory in the area of a public packet data network;
hh) publishing activities;
ii)
establishment and operation of mobile electronic communication networks on frequencies
assigned under the license of the Telecommunication Office of the SR;
jj)
provision of a mobile telephone service via mobile electronic communication networks
stated in the foregoing Section;
kk) establishment and operation of a public packet switching data network;
ll)
provision of a public data service via electronic communication networks;
mm) organization and implementation of knowledge competitions;
nn) intermediary activity in the area of trade, services, and production;
oo) lease of movables – leasing;
pp) lease than basic lease-related services; of real property and non-residential premises with
the provision of services other;
qq) intermediation of purchase, sale, and lease of real property;
rr) establishment and operation of a public mobile telecommunication network on frequencies
assigned under the License of the Telecommunication Office of the Slovak Republic, which
is designated as the third generation network and complies with the UMTS standards;
ss) establishment and operation of a fixed telecommunication network for the purpose of an
interconnection or connection of equipments of the third generation mobile network;
tt)
provision of a public mobile telephone service and full scope of data and multimedia
services via the third generation mobile network;
uu) information company services;
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vv) retransmission;
ww) printing activity;
xx) performing of calibration activities except for certification of specified products;
yy) computer services;
zz) services related to computer data processing;
aaa) performing services of Data centre;
bbb) performing services of managed hosting ICT services;
ccc) providing of customer loans;
ddd) supply of electricity;
eee) supply of gas;
fff) advisory activity in the energy sector;
ggg) provision of payment services in a scope limited exclusively to payment transactions
pursuant to Article 2(1)(f) of the Act on payment services under the conditions referred to in
Article 79a of the Act on payment services;
hhh) activity of subordinate financial agent for the insurance or reinsurance sector;
iii) installation and repair of electronic equipment within safe voltage limits.
Article 3
DURATION
The Company is founded for an indefinite period of time.
Article 4
REGISTERED CAPITAL OF THE COMPANY
The registered capital of the Company is EUR 864,113,000.00 (in words: eight hundred sixty four million
one hundred thirteen thousand Euro).
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Article 5
SHARES
1.
The registered capital of the Company is divided into 86,411,300 registered book-entered stock
shares each having nominal value of EUR 10.00 (in words: ten euro zero cents).The
transferability of the shares shall not be restricted.
2.
A share shall represent the rights of a shareholder, as a partner, to participate, in line with
the legislation and the Articles of Association of the Company, in the Company's managing,
profit, and liquidation balance upon the winding-up of the Company with liquidation,
whereas the rights are related to the share as a security. The shares are issued as registered
book-entered shares. The shares are publicly tradable.
3.
In case of a failure to pay the nominal value of subscribed shares or any part thereof, the
subscriber shall pay default interest of 20% per annum on such outstanding nominal value. In
the event that the subscriber fails to settle the due part of the nominal value of subscribed shares
within 60 days after a request from the Board of Directors, the Board of Directors may request
that the interim certificate be returned, or may inform the subscriber that this interim certificate
has been declared null and void and issue a substitute interim certificate to a new subscriber
under the conditions applicable to the issue of the invalidated interim certificate. The amount
collected as the result of issuing a substitute interim certificate shall be used to return to the
original subscriber the amount he originally paid, reduced by claims of the Company arising from
violation of the obligations of the subscriber.
Article 6
CORPORATE BODIES
The Company shall have the following corporate bodies:
a) General Meeting;
b) Board of Directors;
c) Supervisory Board;
d) Audit Committee;
e) Remuneration Committee
f)
and
Nomination Committee.
Article 7
GENERAL MEETING
1. The General Meeting is the supreme body of the Company.
2. The powers of General Meeting shall include the following:
a) amendments to the Articles of Association unless otherwise provided for by the law;
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b) decisions to increase the registered capital, decisions on authorising the Board of
Directors for increasing the registered capital;
c) decisions to decrease the registered capital;
d) decisions regarding the issuance of:
I.
bonds to which the right to conversion into shares of the Company or
the pre-emptive right to the subscription of shares of the Company is
not attached; and
II.
bonds to which the right to conversion into shares of the Company
(convertible bonds) or the pre-emptive right to the subscription of
shares of the Company (preference bonds) is attached;
e) decisions regarding the transformation of physical shares to book-entered shares and vice
versa;
f)
election and recall of members of the Board of Directors and Supervisory Board, save for
those members of the Supervisory Board who are elected by the employees of the
Company;
g) approval of the annual report on the performance and business activities of the Company;
h) approval of the annual individual and consolidated financial statements and extraordinary
individual and consolidated financial statements;
i)
approval of profit distributions, dividends and royalties;
j)
approval of loss coverage;
k) approval of the use of the reserve fund;
l)
approval of the system for remuneration of the members of corporate bodies of the
Company or of the employees of the Company in the form of shares of the Company,
options for shares of the Company or other rights to shares of the Company or in form of
remuneration based on the development of prices of the shares of the Company,
including the changes to such systems of remuneration and approval of long-term
incentive schemes aimed at members of corporate bodies and senior management of
the Company; this provision shall not apply to shares, options for shares or other rights
related to shares of any other company than Slovak Telekom, a.s.
m) decisions regarding issues connected with the fulfillment of tasks relating to the defense,
protection and security of the state in compliance with relevant legal regulations;
n) decisions regarding disposal of the retransmission station buildings in Banská Bystrica II
and Prešov III;
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o) consents to the listing of shares on a stock exchange;
p) decisions on winding-up the Company with liquidation, on merger of the Company with
another company or on division of the Company, decisions on the change of legal form of
the company;
q) decisions on the appointment of a trustee;
r)
decisions regarding other matters entrusted to the competence of the General Meeting
by these Articles of Association and by legal regulations;
s) Decision on termination of shares trading at the stock exchange;
t)
Decisions on changing the form of the company to a form different than a public jointstock company;
u) decision-making on approval of agreement on transfer of the undertaking or agreement on
transfer of part of the undertaking;
v) approval or recall of the auditor of the Company;
w) election and recall of one member of the Audit Committee, one members of the
Nomination Committee and one member of the Remuneration Committee;
x) approval of the statute of the Nomination Committee and agreements on the
performance of function of members of the Nomination Committee;
y) approval of the statute of the Remuneration Committee and agreements on the
performance of function of members of the Remuneration Committee;
z) approval of the remuneration rules of the members of Company’s bodies (upon the
proposal of the Remuneration Committee); and
aa) approval of the remuneration of members of the Board of Directors, Supervisory Board,
Audit Committee, Nomination Committee and Remuneration Committee, whereby the
General Meeting may adopt a resolution delegating and entrusting this power into the
scope of competence of the Remuneration Committee.
3. A shareholder is entitled to participate in a General Meeting. At the General Meeting he may
vote, request information and explanations related to Company matters or matters concerning
persons controlled by the Company that relate to the subject of the discussion and submit
proposals.
4. If a shareholder exercises its rights by proxy, the original or a copy of the original power of
attorney verified by a notary shall be handed over to the reporter for registration purposes
before the General Meeting. Should more than one shareholder grant a power of attorney to the
same proxy, he or she may vote on behalf of each shareholder independently. If a member of
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the Supervisory Board acts as a proxy of one of the shareholders, Section 190a of the
Commercial Code apply to his power of attorney.
The details of the method of voting will be determined by the Board of Directors prior to each
General Meeting, whereby the Board of Directors is obliged to enable each shareholder to use a
part of the votes that he possesses to vote differently (“for”, “against” or “abstained from
voting”) than the rest of the votes that he possesses.
Voting of shareholders by correspondence under Section 190a and subsequent of the
Commercial Code and the participation and voting of shareholders at the General Meeting of
the Company via electronic means under Section 190d of the Commercial Code are not
allowed.
5. The General Meeting shall be held at least once a year and shall be convened by the Board of
Directors within a period of four months following the end of the previous fiscal period.
6. The Board of Directors shall convene an Extraordinary General Meeting particularly when:
a) a resolution to this extent was passed by the previous General Meeting,
b) the Company has lost 1/3 of its registered capital or if such a loss can be reasonably
expected;
c) the Company has been insolvent for more than three calendar months;
d) the shareholder holding shares with a nominal value representing at least 5% of the
registered capital of the Company has asked for convening of such a meeting in writing,
stating the reasons and proposed agenda of the Extraordinary General Meeting. The
shareholder shall be obliged to prove that it holds the shares with a nominal value
representing at least 5% of the registered capital of the Company no later than on the
day when its request for the convening of the Extraordinary General Meeting was
delivered.
7. An Extraordinary General Meeting shall be convened by the Supervisory Board when any of the
circumstances set forth in Article 9.1 have occurred.
8. The Board of Directors shall convene a regular General Meeting by distributing a written invitation to
the shareholders no later than 30 days prior to the General Meeting and by the publication of a
notice on the convening of the General Meeting in periodical press, which is published nationally
and publishes stock exchange reports. The invitation to the General Meeting and the notice on the
convening of the General Meeting shall contain at least the following information:
a) the business name and registered seat of the Company;
b) the place, date and time of the General Meeting;
c) the identification of whether the General Meeting is ordinary or extraordinary; and
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d) the agenda of the General Meeting;
e) the reference date for the exercise of the right to attend the General Meeting;
f)
guidance for the shareholder on the right to attend the General Meeting and the right to
vote at the General Meeting;
g) guidance for the shareholder on his right to request information and explanations at the
General Meeting, pursuant to Section 180(1) of the Commercial Code, on the right to
include a matter proposed by him into the agenda of the General Meeting pursuant to
Section 181(1) of the Commercial Code, including the time periods for the exercise of
such rights; if the webpage of the Company contains the relevant guidance on these
rights, it is sufficient if the invitation to the General Meeting contains the time periods for
the exercise of the shareholders’ rights together with the information that the guidance
has been published on the webpage of the Company;
h) guidance on the possibility of participating in General Meeting by proxy on the basis of a
written power of attorney pursuant to Section 184(1) and Section 190e of the
Commercial Code; attached to this notification shall be a template document which can
be used for voting via proxy and the information on the manner and electronic means by
which the Company accepts notices on the appointment, change or withdrawal of the
power of attorney;
i) the manner, place and time for obtaining the full versions of the documents and
proposed resolutions of the General Meeting (if any), which are to be discussed as a part
of the agenda of the General Meeting;
j)
the webpage, on which the information and documents under letters h) and i) above are
published.
9. If the invitation to the General Meeting includes a change of the Articles of Association or the
election of members of the corporate bodies, the invitation to the General Meeting or the
notification on its convening must include at least the nature of the proposed changes to the
Articles of Association or the names of persons, who are proposed to be members of the
individual corporate bodies.
10. The Company shall no later than 30 days prior to the General Meeting publish on its webpage
all information pursuant to Section 184(4) of the Commercial Code, as well as the following
minimum extent of information:
a) the invitation to the General Meeting and the notice on the convening of the General
Meeting pursuant to Section 184a(1) and Section 184(4) of the Commercial Code;
b) aggregate number of shares and the voting rights connected to the shares as of the
date of dispatch of the invitation to the General Meeting or the publication of the notice
on the convening of the General Meeting; if the registered capital of the company is
divided into different forms of shares, the Company shall for each form of shares list the
number of shares and the voting rights connected to such form of shares;
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c) full wording of all documents that are to be discussed as a part of the agenda of the
General Meeting;
d) proposed resolutions of the General Meeting according to the individual items of the
agenda of the General Meeting and the opinion of the Board of Directors on each item
of the agenda of the General Meeting on which there are no resolutions proposed;
e) the document template of the written power of attorney that can be used for voting via
proxy on the basis of the power of attorney under Section 184(1) and Section 190e of
the Commercial Code, issued under Section 190f(1) of the Commercial Code and a
template voting sheet for correspondence voting, if the Company issued one under
Section 190a(4) of the Commercial Code;
f)
manner and means, by which the Company accepts notices on the appointment of a
proxy, on a change of the granted power of attorney and on the withdrawal of the proxy
via electronic means, and all related technical specifications.
The information and documents specified above must be published on the webpage of the
Company continuously until the day of the General Meeting.
Matters, which were not included in the proposed agenda of the General Meeting, may be
decided upon only with the participation and the consent of all shareholders of the Company.
11. The General Meeting shall be opened by the chairman of the Board of Directors or by another
person nominated by the convening party, or if such a person is not present at the General Meeting,
the General Meeting shall be opened and chaired until the election of the chairman by any of the
shareholders or by another member of the Board of Directors authorised to do so. Such a person
shall then propose to the General Meeting to elect a chairman, a reporter, two report verifiers and
persons commissioned to count votes (scrutineer).
12. Decisions of the General Meeting shall take the form of a resolution of the General Meeting and the
full wording of such resolution shall be entered into the minutes from the General Meeting.
13. For the adoption of a resolution of the General Meeting the consent of the shareholders holding
shares in an aggregate nominal value representing a simple majority of the aggregate nominal value
of the shares of the Company held by the shareholders present at the General Meeting, save for the
cases stipulated in Article 7(14).
14. The affirmative vote of the shareholders holding shares in an aggregate nominal value of at least
two-thirds of the aggregate nominal value of the shares of the Company held by the shareholders
present at the General Meeting is needed in the event of decisions regarding the matters stipulated
in Article 7.2(a), (b), (c), (d) item II, (p), (s) and (t) of this Article. A decision of the General Meeting on
a change of the rights attached to certain types of shares or on the restriction of transferability of
registered shares also requires the consent of at least a two-thirds majority vote by those
shareholders that hold these shares.
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15. The number of votes of a shareholder shall be determined based on the ratio of the nominal value of
its shares to the amount of registered capital. In order to facilitate the counting of votes for the
purposes of voting, the number of votes of a shareholder shall be determined as the ratio of the
nominal value of his shares to the aggregate amount of the registered capital of the Company
multiplied by the whole number of 100.
16. The minutes of the General Meeting shall be produced from the General Meeting, recording the
event and process. The Board of Directors shall ensure that the minutes of the General Meeting are
prepared within 15 days of the end of the General Meeting. The minutes shall be signed by the
reporter, the chairman of the General Meeting and the two elected verifiers.
17. The minutes of the General Meeting shall contain:
a) the business name and registered seat of the Company;
b) the place and time of the General Meeting;
c) the names of the Chairman of the General Meeting, the reporter, the verifiers and the
scrutineers;
d) an overview of the discussion on individual points of the agenda of the General Meeting;
e) decisions of the General Meeting with results of voting; and
f)
protests lodged by a shareholder, a member of the Board of Directors or the Supervisory
Board relating to decisions of the General Meeting, if the person lodging the protest so
requests.
Proposals and statements presented for discussion at the General Meeting shall be attached to the
minutes of the General Meeting.
18. A decision of the General Meeting concerning a change to the Articles of Association, an increase
or decrease of the registered capital, granting the authorisation to increase the registered capital
to the Board of Directors, issuance of priority bonds or convertible bonds, the change of the
legal form of the Company, and on winding-up of the Company shall take the form of a notarial
deed.
19. The minutes of the General Meeting, together with the notice on the convening of the General
Meeting and the invitation to the General Meeting shall be kept in the archives of the Company for
the entire period of its existence.
20. The Company is obliged to provide each shareholder upon his request with a copy of the
minutes together with annexes without undue delay either by sending it to the address stated by
the shareholder or by other means if so agreed with the shareholder; in other cases the
Company shall provide the minutes together with annexes at its registered seat.
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Article 8
BOARD OF DIRECTORS
1. The Board of Directors is a statutory body of the Company. It may act on behalf of the Company in all
matters and represent the Company in dealings with third parties. The Board of Directors shall
manage the activities of the Company and shall decide on all affairs of the Company unless they fall
within the powers of other corporate bodies of the Company pursuant to legal regulations or these
Articles of Association or unless they are delegated to other bodies by the Board of Directors.
2. The Board of Directors shall, in particular:
a) manage the business of the Company and secure all operational and logistical matters;
b) exercise employer’s rights;
c) convene the General Meeting;
d) implement resolutions passed by the General Meeting;
e) ensure proper bookkeeping and maintenance of other records, ledgers and other documents
of the Company, preparation and publication of individual and consolidated financial
statements, publication of the annual report and consolidated annual report of the
Company, if the Company is obliged to do so;
f)
approve the corporate plan, operating plan and budget of the Company;
g) submit the financial statements, which the Company is required to prepare pursuant to a
special regulation, to the General meeting for approval;
h) submit a proposal to wind up the Company by liquidation, by consolidation or merger with
another business entity, or by split of the Company to the General Meeting for approval;
i)
submit to the General Meeting information on the results of business activities of the
Company and on the status of assets of the Company in the preceding fiscal period;
j)
submit to the session of the Supervisory Board documents referred to in Article 9.3;
k) decide on establishment, or a change to the composition of or the rules of bodies established
by the Board of Directors;
l)
approve substantial changes to the principles of corporate governance and organizational
structure of the Company;
m) submit to the General Meeting proposal for the distribution of profits or settlement of losses;
n) submit to the General Meeting proposals for listing the shares on the stock exchange;
o) submit to the General Meeting proposals for appointment or recall of the auditor of the
Company on the basis of recommendation from the Audit Committee;
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3. The Board of Directors shall have seven members.
4. Members of the Board of Directors shall be elected and recalled by the General Meeting. The term
of office of the members of the Board of Directors shall be five years.
5. Upon election of the members of the Board of Directors, the General Meeting shall determine which
member shall be the chairman and which member shall be the vice-chairman of the Board of
Directors.
6. A member of the Board of Directors may resign from his/her post by a written notification
delivered to the Board of Directors. His/her tenure shall end on the day of the following regular
session of the Board of Directors of the Company. A member of the Board of Directors may also
resign from his/her post directly during the session of the General Meeting. In such case the
resignation from the post comes to force immediately. The Board of Directors, whose number of
members elected by the General Meeting did not decrease to less than a half, may appoint
substitute members until the following General Meeting.
7. The Chairman of the Board of Directors shall convene a session of the Board of Directors at least six
times a year. The Board of Directors shall, at its meeting held on December 22 of a calendar year at
the latest, be obliged to stipulate the actual dates of Board of Directors sessions for the following
calendar year. Besides, any member may convene a session of the Board of Directors at any time.
A session of the Board of Directors shall be convened by written invitation, which shall be delivered
to the members of the Board of Directors at least seven working days prior to the session unless all
members of the Board of Directors waive this requirement in writing in each specific case. The
sessions will be held in Bratislava unless all members of the Board of Directors agree in writing to a
different location for a specific session. The invitation shall state the date, time, place and agenda of
the session.
Any electronic distribution by means of secured electronic communication shall be considered as
“written” or “in writing” as set out in this Clause.
8. Each session of the Board of Directors shall be chaired by the chairman, and in the absence of the
chairman, the vice-chairman, and in the absence of the chairman and the vice-chairman, the
member of the Board of Directors who convened the session or other member of the Board of
Directors elected by the members of the Board of Directors present at the meeting. A quorum of the
Board of Directors shall exist if a majority of members of the Board of Directors is present at the
meeting.
9. In the event that a quorum of the Board of Directors is not constituted, within 30 minutes after the
scheduled commencement of the meeting, the member of the Board of Directors that was to chair
the session, as the case may be, shall convene a substitute session of the Board of Directors, which
shall be held no sooner that three business days after the date of the scheduled
session of
the Board of Directors. A quorum for the substitute session of the Board of Directors shall exist if a
majority of the members of the Board of Directors is present at the meeting.
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10. A decision of the Board of Directors shall be adopted if a majority of members of the Board of
Directors present at the meeting votes for the decision. In the event of a tie vote, the vote of the
chairman of the Board of Directors shall be decisive.
11. The meeting of the Board of Directors may also be held by using suitable telecommunication
techniques enabling distance communication in real time, if all members of the Board of Directors
expressly agree. Decisions of the Board of Directors may also be approved in writing without a
session of the Board of Directors. All members of the Board of Directors must provide a written
statement on the issue in order to establish a quorum. A written statement for the purposes of this
Section 11 shall also include facsimile statements or a declaration made via secure electronic
communication. The decision of the Board of Directors is adopted, if the majority of all members
of the Board of Directors voted in favour.
12. Minutes shall be drawn up from each meeting of the Board of Directors containing all material facts
of the session, including the results of voting and the exact wording of all decisions. Minutes shall be
signed by the chairman of the Board of Directors or by the member of the Board of Directors that
chaired the meeting and the reporter and shall be delivered to each member of
the Board of
Directors and the chairman of the Supervisory Board. Minutes shall also contain all decisions
adopted by written consent pursuant to the paragraph 11 of this Article since the previous meeting
of the Board of Directors.
13. A member of the Board of Directors cannot be represented by a proxy at a Board of Directors
meeting. A member of the Board of Directors shall act in person and with due diligence and in
compliance with the interests of the Company and all its shareholders. The member of the Board of
Directors shall not disclose any confidential facts and information to third parties.
14. At least two members of the Board of Directors of which at least one shall be the chairman or vicechairman of the Board of Directors shall sign on behalf of the Company. When signing on
behalf of the Company, the signing members of the Board of Directors shall attach their
signatures to the printed or written business name of the company and indicate their names and
offices.
15. Members of the Board of Directors shall be bound by the legal regulations regarding noncompetition. A member of the Board of Directors shall not:
a) conclude transactions in their own name or on their own account if such transactions relate to
the scope of business of the Company;
b) act as an intermediary for other persons for business transactions involving the Company;
c) take part in the business activity of another entity as a partner with unlimited liability
d) act as a member of the Supervisory Board of the Company; and
e) be a statutory body or a member of a statutory body or other corporate body of another legal
entity with a similar scope of business, save for a legal entity in which the Company is
involved.
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16. A member of Board of Directors shall inform other members of the Board of Directors of its
business, family or other relations, which could affect his decisions on a particular transaction or
matter of the Company. Other members of the Board of Directors shall decide by means of a
resolution adopted by the majority of all members of the Board of Directors (except for the member
of the Board of Directors who notified his potential conflict of interests under the previous sentence),
whether the member of Board of Directors who notified his potential conflict of interests shall or
shall not take part in the decision-making on the relevant transaction or matter.
Article 9
SUPERVISORY BOARD
1. The Supervisory Board is the supervisory corporate body of the Company. It shall oversee the Board
of Directors in its exercise of its powers and the conduct of the business activities of the Company.
The Supervisory Board is entitled to convene an Extraordinary General Meeting in the event that it
has reason to believe that the Board of Directors has materially breached its obligations or in the
event that it has perceived material deficiencies in the performance of the Company.
2. Members of the Supervisory Board are authorized to review the management of the affairs of the
Company by the Board of Directors and to inspect, at any time, the accounting documents, files and
records relating to the activities of the Company and to examine whether book entries are duly and
accurately made and whether the business activities of the Company are in conformity with
applicable legal regulations, the Articles of Association and the resolutions of the General Meeting.
At the same time, they shall review and present to the General Meeting conclusions and
recommendations regarding primarily:
a) the performance of duties assigned to the Board of Directors by the General Meeting;
b) the compliance with the Articles of Association of the Company and with applicable legal
regulations in conducting the Company’s business; and
c) the business and financial activities of the Company, book keeping, documents, accounts,
assets of the Company and its commitments and claims.
3. The Supervisory Board shall review the annual report, the financial statements, which the Company
is required to prepare pursuant to a special regulation and the proposed distribution of profit or
proposals for the settlement of losses and present its opinion to the General Meeting.
4. The Supervisory Board shall have nine members. The term of office of the members of the
Supervisory Board shall be five years.
5. Members of the Supervisory Board, with the exception of members elected by employees, are
elected and dismissed by the General Meeting. At least one member of the Supervisory Board
elected by the General Meeting must be independent. If the Company at the time of the election has
more than 50 employees in full-time employment, three members of the Supervisory Board are
elected and recalled by the employees of the Company, if the relevant laws state so.
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6. The General Meeting votes on the particular candidates for members of the Supervisory Board
individually. The order of the voting is set by the chairman of the General Meeting. If after the
election of a candidate to the position of a member of the Supervisory Board there are no more
vacancies in the Supervisory Board, no further nominated candidates shall be voted on.
7. The chairman and the vice-chairman of the Supervisory Board are appointed and recalled by the
General Meeting.
8. The independence of the members of the Supervisory Board under the law and under the Corporate
Governance Code for Slovakia is assessed by the Nomination Committee.
9. The chairman of the Supervisory Board shall convene a session of the Supervisory Board at least
once in each quarter by means of a written invitation stating the date, time, place and agenda of the
session. Provisions of Article 8.11 through 8.13 shall apply, mutatis mutandis.
10. The Supervisory Board shall adopt decisions by a majority of all its members. The dissenting
members of the Supervisory Board have the right to request that their dissenting opinion is reflected
in the relevant document (minutes from the session of the Supervisory Board, opinion of the
Supervisory Board, etc.).
11. The Company may terminate the employment of a member of the Supervisory Board elected by the
employees or reduce his salary during his term of office and for one year following the end of his
membership in the Supervisory Board only with the prior approval of all other members of the
Supervisory Board.
12. A member of the Supervisory Board may resign from his/her office by virtue of a written notification
delivered to the Supervisory Board. The resignation shall be effective as of the day of the next
Supervisory Board session. A member of the Supervisory Board elected by the General Meeting
may resign from his/her office directly at a General Meeting session. In such case the
resignation becomes immediately effective. In case a Supervisory Board member elected by the
employees resigns from his/her post, the Board of Directors, in co-operation with the trade
unions, shall be obliged to organise elections within three months following the termination
date of the office of a Supervisory Board member.
13. In the event a resignation by a member of the Supervisory Board results in reduction in the number
of members of the Supervisory Board to less than one half, the Supervisory Board shall forthwith
convene an Extraordinary General Meeting that shall elect new members of the Supervisory Board.
14. Members of the Supervisory Board shall be bound by the non-competition provisions stipulated in
Article 8.15.
15. The Supervisory Board, whose number of members has not decreased to less than one half, may
appoint substitute members until the following General Meeting session is held or until the elections
to the Supervisory Board by employees take place, which events in both cases must take place
within 3 months since the expiry of the term of the former member that was replaced by a substitute
member. The term of office of a substitute member shall expire upon the election of the regular
member.
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16. A member of the Supervisory Board shall inform other members of the Supervisory Board of its
business, family or other relations, which could affect his decisions on a particular transaction or
matter of the Company. Other members of the Supervisory Board shall decide by means of a
resolution adopted by the majority of all members of the Supervisory Board (except for the member
of the Supervisory Board who notified his potential conflict of interests under the previous
sentence), whether the member of Supervisory Board who notified his potential conflict of interests
shall or shall not take part in the decision-making on the relevant transaction or matter.
Article 10
INCREASE AND DECREASE OF THE REGISTERED CAPITAL
1. Increase or decrease of the registered capital of the Company shall be decided by the General
Meeting. An increase of the registered capital may be achieved by the subscription of new shares or
by increasing the registered capital from the net assets of the Company, by conditioned increase of
the registered capital, combined increase of the registered capital or by increase of the registered
capital by the Board of Directors. A decrease in the registered capital shall be achieved by
decreases in the face value of the shares or by withdrawing part of the shares from the circulation.
2. Any decision regarding an increase or decrease of the registered capital shall take the form of
a notarial deed.
Article 11
SUPPLEMENTS AND AMENDMENTS TO THE ARTICLES OF ASSOCIATION
1. Any supplements of and amendments to the Articles of Association shall be approved by the
General Meeting.
2. A decision adopting supplements of or amendments to the Articles of Association shall take the
form of a notarial deed. In the event a supplement of or amendment to the Articles of Association
requires a change in the facts recorded in the Commercial Register, the Board of Directors shall be
obliged to file, without undue delay, a petition for registration of the changes with the Commercial
Register.
Article 12
ACCOUNTS OF THE COMPANY, SOCIAL AND ECONOMIC INFORMATION
1. The Company shall maintain the books in the prescribed manner in accordance with legal
regulations. Proper book keeping shall be the responsibility of the Board of Directors which shall
make arrangements for an audit of the financial statements which the Company is required to
prepare pursuant to a special regulation by the auditor.
2. The financial statements which the Company is required to prepare pursuant to a special regulation
shall provide a full picture of the economic and financial standing of the Company, on the amount of
profit or loss generated in the preceding fiscal period. After the financial statements are approved by
the General Meeting, the Company shall publish the annual report.
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3. The Board of Directors shall make arrangements for preparing quarterly financial statements and
reports and shall present them to the Supervisory Board for review.
4. The Company shall create information system as prescribed by applicable legal regulations and shall
provide data on the activities of the Company to the authorities stipulated in such legal regulations.
5. The Board of Directors shall approve corporate plans, the operating plans and the budget of the
Company annually containing at least:
a) an operating budget including capital expenditure and investment plans for the Company;
b) cash flows of the Company;
c) marketing plans of the Company;
d) system development plans of the Company;
e) employee staffing requirements and compensation plans of the Company; and
f)
recommended dividend payments to shareholders of the Company, if any.
Article 13
CREATION AND USE OF THE RESERVE FUND AND OTHER FUNDS
1. The reserve fund of the Company shall be solely used to cover losses of the Company, unless
otherwise provided for by the law.
2. Upon its foundation, the Company shall create a reserve fund of SKK 130,000,000 (in words: one
hundred and thirty million Slovak crowns). Every year, the Company shall add 10% of its net profit
calculated in the annual financial statements to the reserve fund until the balance of the reserve
fund reaches 20% of its registered capital.
3. The General Meeting of shareholders shall decide on the use of the reserve fund.
4. In accordance with applicable legal regulations and internal by-laws approved by the General
Meeting, the Company may create other funds and contribute to them from the net profit, as
specified by the General Meeting. The use of these funds is stipulated by by-laws approved by the
General Meeting.
Article 14
PROFIT DISTRIBUTION
1. In accordance with applicable legal regulations, the Company shall first use its profit to settle tax
and other fiscal liabilities to the state.
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2. Profits remaining after use pursuant to Article 14.1 shall be used to add to the reserve fund in
accordance with Article 13.
3. The General Meeting shall decide on the distribution of any remaining profits.
Article 15
PUBLISHING OF INFORMATION REQUIRED BY LEGAL REGULATIONS
The obligation to publish certain information prescribed by law is met by publishing the information in
the Commercial Bulletin (Obchodný vestník), by adding the documents to the Collection of
Documents, forming a part of the Commercial Register or by filing the documents with the Register
of Financial Statements.
Article 16
WINDING-UP AND LIQUIDATION OF THE COMPANY
1. The winding-up of the Company shall be decided by the General Meeting. The Company may be
wound-up with or without liquidation.
2. The Company shall be wound-up without liquidation if:
a) all assets are passed to a successor;
b) the General Meeting passes a decision on consolidation, merger or division of the Company,
or on transformation of the Company into another legal form of company or into a cooperative.
3. Liquidation shall be required in those cases where the Company is not wound-up by the means
specified in Section 2 of this Article.
4. If the Company is to be wound-up with liquidation, the General Meeting shall appoint a trustee
proposed by the Board of Directors.
5. The Company shall be dissolved as of the date of its deletion from the Commercial Register.
Article 17
INTERNAL RELATIONSHIPS
1. Internal relationships shall be regulated by a set of by-laws of the Company (organizational rules,
work code, signing code, etc.) issued by the Board of Directors.
2. The internal control system shall be approved by the Board of Directors. The Board of Directors
shall be responsible for adequacy and efficiency of the internal control system. The internal
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control system consists of operational inspection procedures and rules incorporated in the
internal processes of the Company.
Within the internal control mainly following areas shall be supervised and evaluated:
a) compliance with laws and with other generally binding legal regulations, internal
directives and procedures of the Company,
b) the functionality and efficiency of management and supervisory/control system of the
Company.
In accordance with the internal directives the Company establishes an organizational unit the
task of which is to perform internal control. Employees designated to perform internal control
(hereinafter referred to as the “unit of internal control”) have the position of autonomous and
independent internal control unit pursuant to applicable laws on payment services. The unit of
internal control performs its activity in all of the organization units of the Company.
3. The activity of the internal control unit is, in accordance with the organizational rules of the
Company, managed by an employee who shall be considered a senior officer responsible for
internal controls pursuant to applicable laws on payment services (hereinafter referred to as the
"manager of internal control"). The Board of Directors shall have the right to establish, modify
and terminate the employment relationship with the internal control senior officer. Such officer
shall manage the performance of internal control in accordance with applicable laws on
payment services, mainly:
a) shall immediately inform the Board of Directors, the Supervisory Board and the National
Bank of Slovakia in case discrepancies in payment services performance have occurred;
b) shall submit a plan of inspection activities to the National Bank of Slovakia;
c) shall submit, at least once a year, a written report to the Board of Directors and the
Supervisory Board about the implementation of the plan of inspection activities;
d) shall perform, at the request of the Supervisory Board, control of the obligations with
respect to the provision of payment services.
4. Pursuant to applicable laws the Company is responsible for protection against the laun dering of
proceeds of criminal activity and terrorist financing. Relevant organizational unit is according to
the internal rules of the Company responsible for creation of the own system, monitoring,
procedures and coordination of protection against the laundering of proceeds of criminal
activity and terrorist financing.
5. Pursuant to applicable laws the Company is responsible for an adequate information system to
ensure proper and secured performance of the permitted payment services. The Board of
Directors is responsible for such information system.
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Article 18
AUDIT COMMITTEE
1. The Audit Committee shall be composed of three members, out of which two members are
appointed and recalled by the Supervisory Board of the Company from the members of the
Supervisory Board and one member is appointed and recalled by the General Meeting acting upon
a proposal of the Board of Directors, Supervisory Board or a shareholder of the Company. The term
of office of the members of the Audit Committee is five years. Renewal of the term is allowed.
Members of the Audit Committee appointed by the Supervisory Board can only be recalled by the
Supervisory Board.
2. At least one of the members of the Audit Committee must fulfill the requirement of professional
experience under special laws.
3. The agreements on performance of the function of members of the Audit Committee are approved
by the General Meeting
4. Detailed conditions of the status, composition, creation, competences and the ways of working of
the Audit Committee are regulated by the statute of the Audit Committee, which is approved by the
Supervisory Board.
Article 19
NOMINATION COMMITTEE
1. The Nomination Committee has three members, out of which two members are appointed and
recalled by the Supervisory Board of the Company from the members of the Supervisory Board and
one member is appointed and recalled by the General Meeting, acting on a proposal by the Board
of Directors or a shareholder of the Company. The term of office of the members of the Nomination
Committee is five years. Renewal of the term is allowed.
2. The main role of the Nomination Committee is to give recommendations regarding the election and
recall of the members of corporate bodies of the Company and to evaluate the overall composition
of the bodies, as well as the individual members of these bodies.
3. The agreements on the performance of function of the member of the Nomination Committee are
approved by the General Meeting.
4. Detailed conditions of the status, composition, creation, competences and the ways of working of
the Nomination Committee are regulated in the statute of the Nomination Committee, which is
approved by the General Meeting.
Article 20
THE REMUNERATION COMMITTEE
1. The Remuneration Committee has three members, out of which two members are appointed and
recalled by the Supervisory Board of the Company from the members of the Supervisory Board and
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one member is appointed and recalled by the General Meeting, acting on a proposal by the Board
of Directors or a shareholder of the Company. The term of office of the members of the
Remuneration Committee is five years. Renewal of the term is allowed.
2. The main role of the Remuneration Committee is to submit proposals and recommendations
relating to the rules for all forms of remuneration of the members of the Board of Directors, the
Supervisory Board, the Audit Committee, the Nomination Committee and the Remuneration
Committee.
3. The agreements on the performance of function of the member of the Remuneration Committee are
approved by the General Meeting.
4. Detailed conditions of the status, composition, creation, competences and the ways of working of
the Remuneration Committee are regulated in the statute of the Remuneration Committee, which is
approved by the General Meeting.
Article 21
FINAL PROVISIONS
1. Matters not regulated by these Articles of Association shall be resolved pursuant to provisions of the
Commercial Code and other relevant legal regulations.
2. If, for any reason, any of the provisions of the Articles Association becomes invalid or ineffective, this
shall have no effect on the validity or effect of the remaining provisions of these Articles of
Association.
3.
These Articles of Association shall fully abolish and replace the Articles of Association of the
Company dated 9 February 2015.
4. These Articles of Association shall become valid and effective on the day of listing of the shares of
the Company at the Listed Main Market (Kótovaný hlavný trh) of Bratislava Stock Exchange (Burza
cenných papierov v Bratislave, a.s.).
Ing. Miroslav Majoroš
Chairman of the Board of Directors
Slovak Telekom, a.s.
Ing. Martin Mác
Member of the Board of Directors
Slovak Telekom, a.s.
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