Extension of the Long-Term Bonus program

On 15 June 2022, Echo Investment S.A. with its registered office in Kielce (the “Company”) entered into contracts with Mr. Rafał Mazurczak (Member of the Company’s Management Board), Ms. Małgorzata Turek (Member of the Company’s Management Board) and Mr. Waldemar Olbryk (President of the Management Board of Archicom S.A. with its registered office in Wrocław, which is subsidiary of the Company) (together as the “Participants” and each individually as the “Participant”) concerning the terms of additional incentive compensation in the form of a long-term bonus (hereinafter the “LTI Contracts”). The awarding of the additional compensation on the terms defined in the LTI Contracts conforms with the Remuneration Policy adopted in Resolution No. 27 of the Company’s Annual General Meeting of 13 August 2020.

Under the LTI Contracts, Mr. Rafał Mazurczak, Ms. Małgorzata Turek and Mr. Waldemar Olbryk obtained the right to additional incentive compensation in the form of a long-term bonus (hereinafter the “Long-Term Bonus”), the amount of which will depend on the growth in the Company’s goodwill measured by the aggregate amount of dividend disbursed by the Company and the growth in the price of the Company’s shares on the Warsaw Stock Exchange in annual evaluation periods defined in the LTI Contracts. Conclusion of the LTI Contracts constitutes an extension of the Long-Term Bonus program existing in the Company, launch of which was publicly disclosed by the Company in current report No. 22/2021 published on 21 July 2021.

The LTI Contracts define the rules of determining the amount of the Long-Term bonus based on the growth in the average six-month price of the Company’s shares calculated for one-year periods, increased by the dividend disbursed by the Company above the initial value of a Company share determined at PLN 4.07 per share. The right to the Long-Term Bonus will be acquired in annual periods over the term of the program, i.e., from 31 December 2022 to 31 December 2025, unless a material change in the shareholding structure of the Company occurs earlier. The amount of the Long-Term Bonus depends on the growth in the value of the Company’s shares, provided that the amount of the Long-Term Bonus (the “Base Value”) does not exceed EUR 1 million for each of the Participants if at the end of the four-year period the growth in the average six-month price of the Company’s shares increased by the dividend disbursed during the term of the program exceeds the amount of the initial quotation of the Company’s shares by PLN 5.60, i.e., if the aggregate amount of the disbursed dividend increased by the average six-month price of the Company’s shares reaches the amount of PLN 9.67 per share. In case of a material change in the shareholding structure of the Company, in lieu of the average six-month price of the Company’s shares, the basis for the calculation of the Long-Term Bonus will be the price received for the Company’s shares calculated on the basis of the price indicated in the transaction resulting in such material change in the shareholding structure.

In accordance with the LTI Contracts, the duration of the program may be extended by a further year (to a five-year total), i.e., until 31 December 2026; in such case the maximum amount of the Long-Term Bonus will be 112.5% of the Base Value if the average six-month price of the Company’s shares increased by the dividend disbursed during the five-year evaluation period exceeds the base value by PLN 6.30, i.e., the aggregate amount of the disbursed dividend increased by the average six-month price of the Company’s shares reaches the value of PLN 10.37 per share.

The Long-Term Bonus is to be disbursed in the form of the Company’s shares (whether existing or of a new issue) annually, at the end of the evaluation period, and should that be impracticable, it will be disbursed as a lump sump in cash at the end of the four-year term (or the five-year term, should the former be extended) of the program. In case of a material change in the shareholding structure of the Company, the Long-Term Bonus shall be disbursed as a lump sum upon occurrence of such event.

The LTI Contracts with the Participants also define the detailed terms of the disbursement of the Long-Term Bonus, as well as addressing a situation where a Participant forfeits the right to receive the Long-Term Bonus or a part thereof, in particular in the event of causing damage to the Company or of taking actions that breach the relevant provisions of the law or the Company’s in-house regulations.

Legal basis:

Article 17 Section 1 of the MAR – inside information