Current Report |

Drafted on:

31 March 2014

Current report No

28/2014

Abbreviated issuer&rsquo|s name

mBank

Legal basis

Article 56 section 1 item 2 of the Act on Public Offering - current and periodic information

Contents: |

The Management Board of mBank S.A. (the &ldquo|Bank&rdquo|) informs that the Bank&rsquo|s Supervisory Board acting pursuant to §| 2 of the Resolution No 26 at XXVII Annual General Meeting of mBank SA on 31 March 2014 (the &ldquo|Resolution&rdquo|), determined the consolidated text of the Bank&rsquo|s Articles of Association, taking into account amendments introduced under the Resolution. The aforementioned amendments of the Bank&rsquo|s Articles of Association shall be effective as of the date of registration by the registration court, notified by the Bank&rsquo|s Management Board with a separate communication upon learning the information about the occurrence of such circumstances. ARTICLES OF ASSOCIATION of mBank SPÓ|ŁKA AKCYJNA I. GENERAL PROVISIONS §| 1 mBank Spó|łka Akcyjna is a bank operating pursuant to these Articles of Association, the Banking Law and Code of Commercial Partnerships and Companies. §| 2 1. The Bank&rsquo|s business name is as follows: mBank Spó|łka Akcyjna. 2. The Bank may use the abbreviation mBank S.A. 3. The Bank operates within the territory of the Republic of Poland and abroad. The Bank&rsquo|s registered office is located in the Capital City of Warsaw. §| 3 (deleted) §| 4 The Bank may hold foreign exchange values and trade in foreign exchange values, and is authorized to purchase foreign currencies. II. BANK&rsquo|S OPERATIONS The scope of Bank's operations includes the provision of banking services, consulting and advisory services in financial matters, and undertaking economic activity within the meaning of §| 6 of these Articles of Association. 2. The Bank may open and keep accounts in Polish and foreign banks. §| 6 In order to implement its objectives specified in §| 5 the Bank shall perform: 1. Banking activities: 1) receiving cash deposits payable on demand or when due and keeping the accounts of such deposits, 2) operating other bank accounts, 3) making Bank&rsquo|s financial settlements, 4) extending cash loans and borrowings, 5) performing transactions with the use of cheques, bills of exchange and warrants, 6) extending and confirming sureties, 6a) extending and confirming bank guarantees, opening and confirming letters of credit, 7) intermediation in effecting money transfers and settlements made in foreign exchange dealings, 8) issuing bank securities, 9) performing operations ordered by third parties related to issuing of securities, 10) safe-keeping valuables and securities, and making safe deposit boxes available to clients, 11) carrying out financial forward contracts and financial futures contracts, 12) purchasing and transferring cash receivables, 13) performing the functions of a representative bank as stipulated in the Act on Bonds, 14) purchasing and selling foreign exchange values, 15) issuing payment instruments, including payment cards and performing operations using such cards, 16) issuing the electronic money. 2. Other operations: 1) providing consulting and advisory services in financial matters, 2) taking up or acquiring shares and rights, shares of another legal entity and purchasing participation units and investment certificates in investment funds, 3) acting as the depository within the provisions of the Act on the Organization and Operation of Pension Funds, 4) acting as depository within the meaning of provisions of the Act on Investment Funds, 5) performing activities consisting in accepting purchase and re-purchase orders and subscriptions for participation units or investment certificates in investment funds, 6) managing registers of members of pension funds and investment funds, 7) operating as an insurance agent, 8) acquisition and disposal of real estates, 9) exchanging debt into the debtor's assets, under terms and conditions arranged with the debtor, 10) trading in securities, providing custody services, including maintaining securities accounts, as well as executing activities related to providing custody services, 11) issuing securities other than bank securities. 12) providing lease and factoring services, including acting as an intermediary with respect to these services, 13) acting as the paying agent within the meaning of provisions of the Act on investment funds, 14) acting as a settlement agent, 15) providing the certification services within the meaning of provisions on electronic signatures, excluding the issue of qualified certificates used by the Bank in activities, to which it is the Party. 3. Brokerage activity comprising: 1) acceptance and transfer of orders to buy or transfer financial instruments, 2) purchasing or transferring financial instruments for its own account, 3) offering financial instruments, 4) providing services under agreements on investment and service sub-issues or concluding and performing and executing other agreements of similar nature, provided that financial instruments are subject matter thereof. 4. Activities pursued under Article 70 section 2 of the Act on Trading in Financial Instruments, comprising: 1) accepting and transferring orders to purchase or transfer financial instruments, 2) purchasing or transferring financial instruments for its own account, 3) investment advisory, 4) offering financial instruments, 5) providing services under agreements on investment and service sub-issues or concluding and performing and executing other agreements of similar nature, provided that financial instruments are the subject matter thereof. 5. The Bank may perform the activities mentioned in sections 1 and 2 at the request of other banks, credit institutions, financial institutions or related parties, as long as they are within the scope of operations of the ordering entities. III. BANK&rsquo|S ORGANIZATION §| 7 1. The Bank together with selected related parties may act within the Group and co-operate with them in order to provide financial services. 2. In order to pursue the objective set out in section 1 above, the Bank may undertake various activities, including the provision of specialized services to selected related parties. 3. The Management Board shall set our the terms and conditions of implementing such undertakings. §| 8 1. In order to perform its statutory activities, the Bank may open and close down branches and other offices in Poland and abroad. 2. The Bank&rsquo|s organisational structure shall be determined by the Management Board in the Organisational Regulations subject to §| 22 section 1 letter a) hereof. 3. The Bank may form advisory groups in order to obtain opinions and establish and maintain contacts with business communities. The Management Board may appoint members of such advisory groups, issue regulations for them and set the amount of fees for their members. §| 8a 1. The Bank&rsquo|s organizational structure consists of: a/Head Office, b/branches. 2. The core organizational units of the Head Office shall be Departments and Bureaus. 3. The Management Board may appoint standing committees or teams for the purpose of performing specific functions or coordinating the work of the Bank&rsquo|s organizational units, as well as teams for the purpose of implementing specific tasks. 4. The Management Board Members and Executive Directors may appoint teams and working groups in order to carry out the ad hoc tasks. §| 9 The bodies of the Bank shall be: 1. The Annual General Meeting, 2. The Supervisory Board, 3. Management Board. GENERAL MEETING §| 10 1. An Annual General Meeting shall be convened under ordinary or extraordinary procedures by the Management Board. An Annual General Meeting shall be convened once a year, in June at the latest. 2. The Supervisory Board may convene the Annual General Meeting, if the Management Board does not convene it by the date specified in the Articles of Association and the Extraordinary General Meeting, if it finds it necessary. 3. The Shareholders representing at least the half of share capital or at least half of the total votes in the company may convene the extraordinary general meeting. Shareholders shall appoint the Chairman of this meeting. 4. The shareholder or shareholders representing at least one twentieth of the share capital may request to convene the extraordinary general meeting and include particular items on the agenda of this meeting. The request to convene the extraordinary general meeting should be submitted to the Management Board in writing or in electronic form. The request to convene the Extraordinary General Meeting should include the proposal of: a) the agenda of the General Meeting, b) draft resolutions together with grounds for these resolutions. 5. In case of convening the General Meeting by other bodies than the Management Board, the Management Board is obliged to carry out actions necessary to hold the General Meeting. §| 11 The following matters require a resolution of the General Meeting except other matters set out in the Code of Commercial Partnerships and Companies: a) examination and approval of the Bank&rsquo|s Management Report and financial statements for the previous financial year| b) adoption of resolutions on the distribution of profits or covering losses| c) acknowledgement of the fulfillment of duties by the members of Bank&rsquo|s bodies, d) election and dismissal of members of the Supervisory Board| e) amendment of the Articles of Association, f) increase or reduction of the Bank's share capital| g) adoption of resolutions concerning the cancellation of shares and resolution to cancel shares, in particular setting out the policy on share cancellation not governed by the Articles of Association, h) creation and reversal of special purpose funds| i) issuance of convertible bonds or preference shares| j) determination of remuneration for members of the Supervisory Board| k) liquidation of the Bank or a merger with another Bank| l) appointment of liquidators| ł) matters submitted by the Supervisory Board| m) matters submitted by shareholders under the Articles of Association, n) election of an entity authorised to audit financial statements as a Bank&rsquo|s auditor. §| 12 All matters submitted to the General Meeting should have been previously presented to the Supervisory Board for consideration. §| 13 Shareholders can participate in the General Meeting and exercise their voting rights either in person or by proxies. In order to be valid, the proxy to participate in the General Meeting shall be made out in writing or in electronic form and attached to the minutes. §| 14 1. Shares of the Bank are registered or bearer shares. Each share represents one vote. Subject to cases determined in the Code of Commercial Partnerships and Companies, the General Meeting shall be valid regardless of the number of shares represented at the General Meeting. 2. Resolutions of the General Meeting shall be passed by simple majority, unless the provisions of the Code of Commercial Partnerships and Companies or the Articles of Association stipulate more stringent conditions required to pass resolutions concerning specific issues. 3. A resolution to refrain from considering an item listed on the agenda of the General Meeting may be passed only if there are important, material reasons. A motion in such matter shall include detailed grounds. Decisions to take items off the agenda of the General Meeting or not to consider an issue placed on the agenda of the General Meeting at the request of shareholders requires the adoption of a resolution following the consent of all present shareholders who tabled the motion supported by 75% of votes present at the General Meeting. §| 15 The voting shall be open. A secret ballot shall be ordered during elections, and motions for recalling members of the Bank's authorities or liquidators, making them accountable, and the vote on personnel matters. Moreover, a secret ballot shall be ordered on demand of at least one shareholder present or represented at the General Meeting. §| 16 1. The General Meeting is opened by the Chairman of the Supervisory Board or by the Deputy Chairman of the Supervisory Board. If due to obstacles neither of them can open the meeting, the meeting shall be opened by a member of the Supervisory Board. 2. The General Meeting shall elect the Chairperson of the meeting from among persons authorized to participate in the General Meeting. SUPERVISORY BOARD §| 17 1. The Supervisory Board consists of at least five members elected by the General Meeting for a joint term of office of three years. At least half of the members of the Supervisory Board, including the Chairman, shall hold Polish citizenship, reside permanently in Poland, speak Polish language and have experience on the Polish market which can be used when supervising the Bank&rsquo|s operations. 2. The mandate of the Supervisory Board member shall expire at the latest on the day of the General Meeting approving the financial statements of the Bank for the last full year of the term of office of the members of the Supervisory Board. 3. The term of the Supervisory Board member shall also expire in the case of death, resignation, or recalling of the member. 4. The number of members of the Supervisory Board shall be determined by the General Meeting subject to the provisions of sections 5 and 6. Members of the Supervisory Board may be re-elected. The Supervisory Board elects its Chairman and Deputy Chairmen from among the Supervisory Board members. 5. At least two of the Supervisory Board Members shall be Independent Supervisory Board Members, unless the General Meeting decides otherwise by way of a resolution appointing the Supervisory Board Members or in a resolution adopted pursuant to §| 19 section 3 of the Articles of Association. 6. Criteria for the Independent Supervisory Board Member are specified in a separate resolution of the General Meeting. §| 18 The Supervisory Board acts under the Regulation adopted by it. §| 19 1. The Supervisory Board Member whose term expired in the course of the joint term of office of the Supervisory Board can be replaced with another person, elected by the Supervisory Board. 2. The mandate the Supervisory Board Member appointed before the end of the term of office of the Supervisory Board shall expire simultaneously to the expiration of the mandates of the other members of the Supervisory Board. 3. Appointment of Supervisory Board Members in the course of joint term of office of the Supervisory Board shall be confirmed by the closest General Meeting. If the General Meeting refuses to approve any member of the Supervisory Board appointed during the joint term of office, the General Meeting shall appoint another member of the Supervisory Board in lieu of the person whose appointment was refused. 4. If the number of the Supervisory Board Members is smaller than five due to expiration of the mandates of the Supervisory Board Members within the joint term of office, the Supervisory Board shall elect new members to replace the members whose terms have expired. §| 20 1. The Supervisory Board can pass resolutions provided that at least half of its members are present at the meeting while all the members have been invited. 2. In exceptional cases, the Supervisory Board Members may pass resolutions by casting their votes in writing, with the intermediation of another member of the Supervisory Board. Votes shall not be cast in writing for items that were added to the agenda in the course of the meeting of the Supervisory Board. 3. The Supervisory Board may adopt resolutions in writing or through long-distance direct communication means. A resolution is valid if all the Supervisory Board Members were informed of the draft. 4. Resolutions of the Supervisory Board shall be passed by simple majority and in case of an equal number of votes, the vote of the Chairman of the Supervisory Board shall prevail. 5. No resolution should be passed without the consent of the majority of the Independent Members of the Supervisory Board on the following matters: a) performance rendered under any title by the Bank or any of the Bank&rsquo|s related parties to members of the Management Board| b) consent for the Bank to enter into a significant agreement with an related party with the Bank, a member of the Supervisory Board or the Management Board, or entities associated with them. 6. Adoption of resolution in contravention with the requirements under section 5 shall not, however, affect its validity, if adopted in accordance with the provisions of §| 20 sections 1 - 4. The provisions of section 5 shall not apply if the General Meeting appoints the Supervisory Board with fewer Independent Members than described in §| 17 section 5 of the Articles of Articles of Association. §| 21 Supervisory Board Members may only perform their duties in person. §| 22 1. In addition to the rights and obligations prescribed by law and the Articles of Association, the responsibilities of the Supervisory Board shall specifically include the following: a) approving the proposals of the Management Board concerning the Bank&rsquo|s essential organizational structure, which is the separate core areas of Bank&rsquo|s operations with regard to structure and organization, which individual members of the Management Board are in charge of. b) approving the Bank&rsquo|s annual financial plans and multi-annual development plans| c) examining all motions and matters subject to resolutions of the General Meeting| d) issuing or approving regulations provided for in the Articles of Association| e) defining management contracts and setting remuneration for Management Board members| f) receiving information on formation, acquisition, closing and disposal of branches, permanent establishments and parts of a business as well as of initiation and termination of lines of business and fields of activity in advance| g) approving the conclusion or amendment of each significant agreement or arrangement with the members of the Management Board or the Supervisory Board| h) approving the conclusion, amendment or termination of any significant affiliation agreements or cooperation treaties| i) receiving information on expected deviations from the annual budget. j) issuing general guidelines for the Management Board regarding the level and structure of remuneration for senior management, k) approving the policy of variable remuneration of the Bank&rsquo|s executive staff. 2. The Supervisory Board may appoint Standing Committees whose members shall perform their functions as Members of the Supervisory Board delegated to carry out specific supervision activities at the Bank. The area of responsibility of a Committees shall be specified in a relevant resolution of the Supervisory Board. 3. In particular, the Supervisory Board may appoint the following Standing Committees: 1) the Executive Committee, whose authority includes, among others, the following: a) exercising regular supervision of the operations of the Bank between meetings of the Supervisory Board| b) authorizing the Management Board to acquire, encumber and transfer real estates, a perpetual usufruct or part of real estate and stock and shares in companies as well as other fixed assets, if the value of the said transactions exceeds 1% of the Bank's own funds as defined in §| 33, as at 31 December of the previous year. Such authorization is not required if such acquisition results from enforcement proceedings, bankruptcy proceedings, including bankruptcy proceedings with composition proceedings or other arrangement with the Bank's debtors or in the case of transfer of assets so acquired. In the case of acquisition of real estate, perpetual usufruct or share in the real estate, shares or stocks resulting from the aforementioned proceedings or other arrangements with the Bank's debtors, or in the case of transfer of assets so acquired, the Management Board shall inform the Executive Committee of any such activity. 2) The Audit Committee, whose responsibilities are as following: a) to give opinions about the appointment of the auditor by the General Meeting| b) to recommend approval or rejection of financial statements by the Supervisory Board| c) to exercise regular supervision of the internal audit system at the Bank. d) to approve the changes of the position of the head of the Internal Audit Department proposed by the Management Board. 3) The Risk Committee, whose responsibilities are as follows: a) to exercise regular supervision of credit risk, market risk, operational risk and liquidity risk, as well as recommend the approval of individual counterparty risk according to parameters defined by the Supervisory Board in a given time| b) to recommend approval or disapproval to the Supervisory Board for transactions between the Bank and the Members of the Bank&rsquo|s bodies, as provided by the Banking Law. The Supervisory Board is entitled to define the aforementioned parameters, further rights and authorities of the Risk Committee. 4) The Remuneration Committee, whose responsibilities are as follows: a) to review principles and amounts of remuneration of Members of the Management Board, including the setting relevant amounts, b) to present opinions concerning approval for Members of the Management Board of the Bank to engage in competitive activity| c) to issue recommendations to the Supervisory Board regarding general guidelines for the Management Board on the level and structure of remuneration for the senior management and with regard to variable remunerations of executive staff at the Bank, d) to monitor the level and remuneration structure of the senior executive staff. 4. The Audit Committee shall include at least one Independent Supervisory Board Member with qualifications and experience in accounting and finance. 5. Standing Committees of the Supervisory Board shall present their annual reports to the Supervisory Board. The Bank shall make the report available to the shareholders before the General Meeting. §| 23 The Supervisory Board appoints and dismisses the President of the Board of Management, the Vice Presidents, and other members of the Management Board acting according with the provisions of the Banking Law. §| 24 Meetings of the Supervisory Board shall be held as required, at least three times in a financial year. MANAGEMENT BOARD §| 25 1. The Management Board shall be composed of at least three members appointed for a joint term of office of 5 years. At least half of the members of the Management Board, including the President of the Management Board, shall hold Polish citizenship, reside permanently in Poland, speak Polish language and have experience in the Polish market, which can be used when supervising the Bank&rsquo|s activity. 2. The Management Board shall consist of the President of the Management Board and other members of the Management Board. The Supervisory Board may entrust the Management Board members with the function of the First Vice President or a Vice President of the Management Board. 3. The mandate of the Management Board members shall expire at the latest at the General Meeting that approves the financial statements for the last full financial year of the term of office of the Management Board member. 4. The term of the Management Board member shall also expire in the case of death, resignation, or recalling of the member from the Management Board. 5. The mandate of a Management Board Member appointed prior to the end of a given term of office of the Management Board shall expire at the same time as the mandates of the other Members of the Management Board. §| 26 1. The Management Board pursues the Bank's operations and represents the Bank, including decisions regarding the acquisition, encumbering or disposal of real estate, a perpetual usufruct or part of real estate, subject to §| 22 section 3.1 letter b). The Management Board defines the guidelines concerning the Bank&rsquo|s operations, in particular risky operations, such as the credit policy, investment policy, assets and liabilities management and the guarantee policy. 2. Resolutions of the Management Board shall be passed by simple majority of the Management Board members present at the meeting of the Management Board| if there is an equal number of votes, the vote of the Management Board shall prevail. 3. In exceptional cases, members of the Management Board may pass resolutions by casting their votes in writing, with the mediation of another member of the Management Board. Votes shall not be cast in writing for items that were added to the agenda in the course of the meeting of the Management Board. 4. The Management Board may adopt its resolutions in writing or with the use of means of remote communication. A resolution is valid if all Members of the Management Board have been informed about the tenor of the draft resolution. 5. The Management Board acts in accordance with regulations approved by the Supervisory Board. These regulations shall determine, among others, matters which require collective examination and decision by the Management Board. §| 27 1. The President of the Management Board shall be in charge of the work of the Management Board. The responsibilities of the President include, among others: 1) chairing the Management Board, 2) representing the Bank, 3) issuing internal regulations and instructions, rules, and other provisions that govern the Bank's operations, however if required by the provisions of the law or internal regulations of the Bank, such internal regulations and instructions, rules, and other provisions should be based on a prior resolution of the Management Board in this respect, 4) division of competences among the Management Board Member and dependent Executive Directors, based on a resolution of the Management Board, whereas such resolution may not be passed without the consent of the President of the Management Board| information on the division of competences among the Management Board Members and any changes thereto have to be passed to the Executive Committee of the Supervisory Board. 2. The Management Board Member responsible for the development and implementation of the Bank&rsquo|s credit policy and for the management of the Bank&rsquo|s credit and financial risk shall be appointed upon the approval of the Financial Supervision Authority. §| 28 1. Members of the Management Board manage the Bank's activities in accordance with the regulations for the Management Board. 2. Members of the Management Board may be entrusted by the President of the Management Board with the supervision over specific areas of the Bank's activities. §| 29 1. Appointment of a proxy shall only be allowed upon the approval of all members of the Management Board. 2. A power of attorney shall be granted by two members of the Management Board acting jointly or by one Management Board member acting jointly with the proxy. 3. The proxy may be revoked by each Management Board member acting individually. A power of attorney may be revoked by two members of the Management Board acting jointly or by one Management Board member acting jointly with the proxy. §| 30 1. The following persons are entitled to make statements of will with respect to property rights and obligations of the Bank: 1) under the competence of the Management Board, two members of the Management Board acting jointly, whereas the signature of one Management Board may be replaced by the signature of proxy or attorney acting under the power of attorney granted to him or her| 2) proxies acting within the limits of their powers arising from the provisions on proxy, jointly with the member of the Management Board, proxy or agent acting within the limits of power of attorney granted to them| 3) attorneys acting under general power of attorney and specific power of attorney. Proxies act independently or jointly, within the limits of their powers. 2. Persons authorized to act on behalf of the Bank shall not be personally liable to third parties for obligations assumed on behalf of the Bank, provided that they act within their powers. §| 30a 1. Taking decision on assuming liabilities or disposal of assets, the total value of which with respect to a single entity exceeds 5% of the Bank&rsquo|s own funds requires a resolution of the Management Board, subject to section 2 below. 2. Acting under a resolution it has adopted, the Management Board may authorize standing committees appointed under §| 8a, section 3, or appropriate persons at the Bank to make decisions on assuming liabilities or disposal of assets falling within the scope of the Bank&rsquo|s day-to-day business, the total value of which with respect to a single entity exceeds 5% of the Bank&rsquo|s own funds. The relevant resolution of the Management Board shall determine the scope of powers and the manner of adopting decisions by the authorized committees or relevant persons. 3. Subject to fulfillment of other requirements stipulated in the Articles of Association, acquiring, encumbering, and transferring real estates, a perpetual usufruct or part of real estate and stock and shares in companies as well as other fixed assets, shall require a resolution of the Management Board, if the value of the said transactions exceeds 1% of the Bank's own funds as defined in §| 33, as at 31 December of the previous year, unless such acquisition results from enforcement proceedings, bankruptcy proceedings, including bankruptcy proceedings with the option of composition proceedings, or other arrangements with the Bank's debtors, or in the case of transfer of assets so acquired. §| 30b 1. The Bank&rsquo|s internal legislation shall be issued in the form of: a) policies by standing committees appointed based on §| 8a section 3, the Management Board or the Management Board and the Supervisory Board, b) regulations &ndash| by the President of the Management Board, c) circular letters &ndash| by the Bank&rsquo|s Management Board Members, Executive Directors or directors of organisational units of the Bank, d) organisational rules of organisational units of the Bank &ndash| by Management Board Members or Executive Directors, e) work procedures &ndash| by the Bank&rsquo|s Management Board Members, Executive Directors or directors of organizational units of the Bank, 2. Detailed rules of issuing internal regulations of the Bank are specified in a relevant regulation on internal legislation. §| 31 1. The audit of the annual balance sheet and profit and loss account shall be made by an entity authorized to audit the financial statements, appointed by the General Meeting. 2. The entity authorized to audit financial statements presents its report and recommendations to the Supervisory Board which presents them to the General Meeting. §| 31a 1. The Bank has its internal control system, which is aimed at ensuring security and stability of the functioning of the Bank, assisting the management of the Bank, and making performance of the Bank&rsquo|s task more efficient. 2. The internal control covers the activities of all the organizational units of the Bank. 3. The internal control system of the Bank includes Internal Audit Department, subordinate to the President of the Management Board. The tasks of the Internal Audit Department include in particular the following: a) independent assessme