Incentive scheme

The detailed rules of functioning of the Incentive Scheme ("Scheme") of K2 Internet S.A. ("Company") are laid out in the following documents:

1. Resolution No. 23 of the Ordinary General Meeting of Shareholders of K2 Internet S.A. of 28 June 2012 regarding adoption of the Incentive Scheme
2. Resolution No. 24 of the Ordinary General Meeting of Shareholders of K2 Internet S.A. of 28 June 2012 regarding issue of subscription warrants of B1, B2 and B3 series with the right of subscription of the J series shares of the Company, excluding the pre-emptive right of subscription warrants of B1, B2 and B3 series
3. Resolution No. 25 of the Ordinary General Meeting of Shareholders of K2 Internet S.A. of 28 June 2012 regarding  conditional raising of the share capital through the J series share issue excluding the pre-emptive right of J series shares
4. Resolution No. 26 of the Ordinary General Meeting of Shareholders of K2 Internet S.A. of 28 June 2012 regarding amendment of the Statute
5. Resolution No. 28 of the Ordinary General Meeting of Shareholders of K2 Internet S.A. of 28 June 2012 regarding authorisation for the Supervisory Board of K2 Internet S.A. to adopt a uniform text of the Company's Statute

Objective

The objective of the Scheme is the establishment in the Company of additional mechanisms motivating Members of the Board of the Company and its key employees and cooperators to work and act for the account of the Company, which in the long run will ensure a stable growth in the Company's goodwill, stabilise managerial staff and ensure stronger bonds with the Company, thanks to which it will be possible for the Company to gain, for the benefit of shareholders, financial results competitive on the market.

Incentive Scheme

The Incentive Scheme is designated for Members of the Board of the Company and Key Employees, understood as employees and cooperators of the Company and its Subsidiaries, employed based on the employment contract, or providing work, services or holding functions based on a civil law contract, who participate in making significant decisions or their activity contributes to the growth of the Company, including in particular to increasing of its value (Participants) and will be realised till 31 December 2017.

Participants of the Incentive Scheme will be authorised to subscribe for the Shares after fulfilment of the conditions indicated in the Resolution No. 23 of the Ordinary General Meeting of Shareholders of K2 Internet S.A. of 28 June 2012, thus becoming the Eligible Persons. 
An Initial List of Participants will be prepared and approved till 30 September 2012. The Management Board (in relation to Key Employees) and the Supervisory Board (in relation to the Members of the Board) are authorised to complete the List of Participants till 30 June 2014.
A Final List of Participants will be prepared till 30 June 2014.

The Incentive Scheme will be based on the granting to Eligible Persons of a right to subscribe for a total of max 524,000 Company's Shares, in relation to which the Company will issue free of charge not more than 524,000 (say: five hundred and twenty four thousand) registered subscription warrants with the right to subscribe for not more than 524,000 (say: five hundred and twenty four thousand) J series ordinary bearer shares of the Company, i.e.:
• not more than 157,200 (say: one hundred fifty seven thousand and two hundred) registered subscription warrants of B1 series, entitling to not more than 157,200 (say: one hundred fifty seven thousand and two hundred) J series ordinary shares of the Company;
• not more than 209,600 (say: two hundred and nine thousand and six hundred) registered subscription warrants of B2 series, entitling to not more than 209,600 (say: two hundred and nine thousand and six hundred) J series ordinary shares of the Company;
• not more than 157,200 (say: one hundred fifty seven thousand and two hundred) registered subscription warrants of B3 series, entitling to not more than 157,200 (say: one hundred fifty seven thousand and two hundred) J series ordinary shares of the Company.

The issue of subscription warrants will be performed within one issue process launched after the approval by the General Meeting of the Company of the Company's financial statement for 2014, subject to the terms specified in the Resolution regarding the Scheme.

The final number of issued warrants of particular series will be determined by the Board and approved by the Supervisory Board till 30 June 2014.

The issue of subscription warrants will be performed beyond the public offer mentioned in Art. 3 item 3 of the Act of 29 July 2005 on Public Offerings and conditions of introducing financial instruments into an organised trading system and on public companies [Dz.U.05.184.1539].

The number of people who will receive a proposal of purchasing subscription warrants will not exceed 99 (ninety nine) people per event.

Each subscription warrant of B1, B2 and B3 series will entitle to subscribe for: 1 (say: one) J series ordinary bearer share of the Company.

The issue price of J series shares subscribed for through the exercise of the entitlements from subscription warrants will be specified by the Board, however it will correspond to the issue price of I series shares issued based on the realisation of the Ordinary General Meeting of Shareholders No. 22 of 28 June 2012 regarding the issue of subscription warrants of A series excluding the pre-emptive right of the hitherto shareholders of the Company and a conditional raising of the share capital of the Company through the issue of new shares of I series excluding the pre-emptive right of the hitherto shareholders of the Company in order to grant the rights to subscribe for I series shares by the holders of subscription warrants of A series.

Eligible Persons may subscribe for Shares within the following periods:
• holders of subscription warrants of B1 series - within 1 month of the submission of the offer for taking up subscription warrants of B series till 31 December 2017;
• holders of subscription warrants of B2 series - from 1 January 2016 to 31 December 2017;
• holders of subscription warrants of B2 series - from 01 January 2017 to 31 December 2017;

The right to subscribe for Shares will be granted only if the EPS indicator (adjusted with one-off events) determined based on financial data resulting from the financial statement audited by a certified auditor and approved by the General Meeting of the Company for 2014 financial year will amount to at least PLN 4.00.