23.1.1. Basic information regarding share option plans

• Return on shares in reference to the options tranche granted in 2023 is understood as the quotient of the average price of the Company shares in the quotations on the Warsaw Stock Exchange market in 2025, increased for the value of dividend paid by the Company from 1 January 2023 to 31 December 2025 and the average price of the Company shares in 2022, divided by the average price of the Company shares in 2022.
• The EBITDA parameter is understood to be profit on operating activities and depreciation/amortisation reflected in the consolidated statement of profit or loss of Grupa Kęty S.A. As regards sub-part C, 29,100 options will be granted if the EBITDA of the Capital Group will amount to PLN 1,053.5 million or more in 2025, whereas the number of options will be reduced pro rata to 0 if the EBITDA amounts to PLN 1,029 million or less.
• The net profit attributable to owners of the parent referred to above is understood to be net profit attributable to owners of the parent reflected in the annual consolidated statement of profit or loss of Grupa Kęty S.A. As regards sub-part D, 29,100 options of the 2023 plan will be granted if the net profit of the Capital Group in 2025 will amount to PLN 672 million or more in 2025, whereas the number of options will be reduced pro rata to 0 if the net profit amounts to PLN 656 million or less.
• If the Warrants of the tranche for the respective reporting year are not offered on account of non-fulfilment of the criterion, the Management Board of the Parent is entitled to transfer the Warrants to subsequent tranches and offer them, subject that the accumulated value of the parameter is achieved jointly for the reporting year in which the value of the parameter was not achieved and for the reporting year in which the accumulated value of the parameter has been exceeded.
• The issue price of the shares offered under the Plan will be the amount equal to the arithmetic mean of the average daily price of the Company shares weighted with the turnover volume on the regulated market of the Warsaw Stock Exchange in the period of 12 (twelve) months preceding the day of the General Meeting session in which the Plan has been adopted, less the total of dividends per one share for which the dividend record day passed by the Company General Meeting falls in the period from 1 October 2023 to 30 September 2026.

• For the first tranche of the plan:

The ‘return on shares’ for a given tranche of the 2020 plan is understood as the quotient of the average price of Grupa Kęty S.A. shares in 2022, increased for the value of dividend paid by the Company in the period from 1 January 2020 to 31 December 2022, to the price of shares in 2019.

‘EBITDA increase’ (where EBITDA is understood to be profit on operating activities plus depreciation) means the quotient of consolidated EBITDA attained by the Capital Group of Grupa Kęty S.A. in 2022 and consolidated EBITDA attained by the Capital Group of Grupa Kęty S.A. in 2019.

‘Net earnings increase’ for a given tranche means the quotient of consolidated net earnings attained by the Capital Group of Grupa Kęty S.A. in 2022 and consolidated net earnings attained by the Capital Group of Grupa Kęty S.A. in 2019.

• For the second and third tranches, the aforesaid years forming basis for the plan conditions fulfilment verification are rolled one year forward.
• The purchase price of the 2020 plan shares equals the average price of the shares of Grupa Kęty S.A. for the period of 12 months preceding the General Meeting that adopts the given plan, less 5%, and may not be lower than 50% of the average price of Grupa Kęty S.A. shares in the period of 3 months preceding the date of granting the warrants. For the first tranche of 202 the purchase price amounted to PLN 361.50 per share. No warrants have been granted for the second and third tranche, yet.

Three-year employment period at the Capital Group calculated separately for each tranche from the launch date of a given part is the common condition for the aforementioned plans.

On 28 September 2023, the Act of 16 August 2023 on Amending Some Acts in Relation to Ensuring Financial Market Development and Protection of Investors on That Market entered into force, which modified the existing regulations and affected the performance of incentive plans.

The amendment reduced the ability of acquiring bonds by retail customers who are natural persons – starting from 29 September 2023 a retail customer who is a natural person may may acquire bonds if their nominal value is not lower than 40,000 EUR or equivalent of the amount expressed in the Polish currency or another.

As a result, as of 1 October 2023 the Grupa Kęty S.A. could not offer the eligible persons any bonds convertible to shares under the first tranche of the 2020 plan.

On 13 December 2023, an Extraordinary General Meeting decided to redeem bonds convertible to shares and issue warrants in their place.

Moreover, the Extraordinary General Meeting adopted an amendment to the Articles of Association, enabling the issue of shares under the first tranche of the 2020 plan. The change was not adopted for the second or third tranche of the plan – the Management Board is going to submit relevant draft resolutions at the coming Annual General Meeting of the Company.

Therefore, on 24 January 2024, the parent company offered the eligible persons warrants convertible to shares under the first tranche of the 2020 plan.

Stronger motivation of a larger group of employees to increase the shareholder value and the introduction of a factor making it possible to retain the Group key employees for a longer time are the main objectives of the share option plans.