REG - Fondul Proprietatea - 26 March 2024 OGSM full text resolutions
27/03/2024 08:45
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RNS Number : 4957I Fondul Proprietatea S.A. 27 March 2024
To: Bucharest Stock Exchange Report date:
Financial Supervisory Authority 27 March 2024
London Stock Exchange
Name of the issuing entity:
Current report according to Article 234 para. (1) letter d) and e) of the Fondul Proprietatea S.A.
Financial Supervisory Authority Regulation no. 5/2018 on issuers of financial
instruments and market operations, as well as the provisions of Article 99
letter a) of the Code of the Bucharest Stock Exchange, Title II, Issuers and
Financial Instruments Registered office:
76-80 Buzesti Street
Important events to be reported: 7(th) floor, 1(st) district,
Bucharest, 011017
Shareholders' resolutions (full text) approved by the Ordinary General
Shareholders' Meeting of Fondul Proprietatea SA held on 26 March 2024
Phone/fax number:
Tel.: + 40 21 200 96 00
Franklin Templeton International Services S.À R.L, as alternative investment
fund manager and sole director of Fondul Proprietatea SA ("Fondul Proprietatea Fax: +40 31 630 00 48
/ the Company / the Fund"), hereby publishes the Shareholders resolutions
(full text) approved by the Ordinary General Meeting of Shareholders of Fondul
Proprietatea on 26 March 2024.
Email:
office@fondulproprietatea.ro (mailto:office@fondulproprietatea.ro)
Internet:
Franklin Templeton International Services S.À R.L. in its capacity of
alternative investment fund manager and sole director of FONDUL PROPRIETATEA www.fondulproprietatea.ro (http://www.fondulproprietatea.ro)
S.A.
Sole Registration Code with the Trade Register Office:
18253260
Johan MEYER
Permanent Representative
Order number in the Trade Register:
J40/21901/2005
Subscribed and paid-up share capital:
RON 2,947,779,186.56
Number of shares in issue and paid-up:
5,668,806,128
Regulated market on which the issued securities are traded:
Shares on Bucharest Stock Exchange
GDRs on London Stock Exchange
Resolution no. 1 / 26 March 2024
of the Shareholders' Ordinary General Meeting of
FONDUL PROPRIETATEA S.A.
Headquarters: 76-80 Buzești Street, 7(th) floor, 1(st) district, Bucharest,
Romania,
Registered with the Trade Registry under number J40/21901/2005, fiscal
registration code 18253260
Today, 26 March 2024, 11:00 AM (Romanian time), the shareholders of Fondul
Proprietatea S.A. (the "Fund" or "Fondul Proprietatea") have met during the
Shareholders' Ordinary General Meeting ("OGM") of the Fund, at its first
summoning, at "INTERCONTINENTAL ATHÉNÉE PALACE BUCHAREST" Hotel, Le
Diplomate Salon, 1-3 Episcopiei Street, 1(st) District, Bucharest, zip code
010292, Romania, the OGM being opened by its Chairman, namely Mr. Johan MEYER,
in his capacity of permanent representative of Franklin Templeton
International Services S.À R.L., a société à responsabilité limitée
qualifying as an alternative investment fund manager under article 5 of the
Luxembourg law of 12 July 2013 on alternative investment fund managers,
authorized by the Commission de Surveillance du Secteur Financier under no.
A00000154/21 November 2013, whose registered office is located at 8a, rue
Albert Borschette, L-1246 Luxembourg, registered with the Luxembourg register
of commerce and companies under number B36.979, registered with the Romanian
Financial Supervisory Authority under number PJM07.1AFIASMDLUX0037/10 March
2016, in its capacity of alternative investment fund manager and sole director
of Fondul Proprietatea S.A. ("Sole Director").
Whereas:
§ The convening notice of the OGM was published on the Fund's website
(www.fondulproprietatea.ro) on 5 February 2024 and in the Official Gazette of
Romania, Part IV, number 632 of 7 February 2024 and in Jurnalul number 1581 of
7 February 2024 and republished with supplements on the Fund's website on 26
February 2024 and in the Official Gazette of Romania, Part IV, number 1007 of
28 February 2024 and in "Adevărul" newspaper number 9099 of 28 February 2024;
§ The provisions of Companies' Law no. 31/1990, republished, with its
subsequent amendments and supplementations ("Companies' Law no. 31/1990");
§ The provisions of Emergency Government Ordinance no. 32/2012 on
undertakings for collective investment in transferable securities and
investment management companies, as well as for the amendment and
supplementation of Law no. 297/2004;
§ The provisions of Regulation of the Financial Supervisory Authority no.
4/2013 regarding depositary receipts, with its subsequent amendments and
supplementations;
§ The provisions of Law no. 24/2017 on issuers of financial instruments and
market operations, republished ("Issuers' Law");
§ The provisions of Regulation of the Financial Supervisory Authority no.
5/2018 on issuers of financial instruments and market operations, with its
subsequent amendments and supplementations ("Regulation no. 5/2018");
§ The provisions of Law no. 243/2019 on alternative investment funds and for
the amendment and completion of other legislation, with its subsequent
amendments and supplementations ("Law no. 243/2019");
§ The provisions of Regulation of the Financial Supervisory Authority no.
7/2020 on the authorization and operation of alternative investment funds,
with its subsequent amendments and supplementations ("Regulation no. 7/2020");
§ The provisions of Commission Implementing Regulation (EU) 2018/1212 of 3
September 2018 laying down minimum requirements implementing the provisions of
Directive 2007/36/EC of the European Parliament and of the Council as regards
shareholder identification, the transmission of information and the
facilitation of the exercise of shareholders rights ("CE Regulation
1212/2018"),
§ The provisions of the Fund's constitutive act ("Constitutive Act"),
it is necessary to have a number of shareholders holding at least 25% of the
total voting shares in order to meet the quorum conditions, in the present
OGM, manifesting their vote 232 shareholders, which represents a number of
1,591,932,553 voting rights (i.e. 44.7621% of the total voting rights at the
reference date 29 February 2024, i.e. 3,556,427,239; i.e. 28.0823% of the
total number of issued shares at the reference date 29 February 2024, i.e.
5,668,806,128),
the conditions regarding the quorum for holding this meeting and the majority
for shareholders to decide legally are met, under the legally required
majority (according to art. 115 paragraphs (1)-(2) of the Companies' Law no.
31/1990 and art. 14 I paragraph (1) of the Constitutive Act).
Following debates, the Fund's shareholders decide as follows:
I. The appointment of Mr. Marius-Alin Andrieș as member of the Board of
Nominees following the expiration of the mandate of Mr. Omer Tetik on 6 April
2024; the mandate of the new member is valid for a period of three (3) years
and shall produce its effects starting with 7 April 2024 or the acceptance
date for the new mandate, whichever occurs later.
This item is approved with 1,167,382,666 votes, representing 73.2770% of the
total votes held by the present or represented shareholders, in accordance
with Article 14 (1), second paragraph of the Constitutive Act corroborated
with Article 112 (1), second paragraph of Companies' Law no. 31/1990.
The votes were recorded as follows:
- 1,167,382,666 votes "for";
- 82,867,994 votes "against";
- 16,505,449 abstentions;
- 55.235.370 votes "not given";
- 0 votes annulled from correspondence;
- 0 votes annulled in the OGM meeting.
II. The approval of:
(a) The date of 11 April 2024 as the Ex - Date, in accordance with Article
176 paragraph (1), computed with the provisions of Article 2 paragraph (2)
letter (l) of Regulation no. 5/2018;
The date of 12 April 2024 as the Registration Date, in accordance with Article
176 paragraph (1) of Regulation no. 5/2018, computed with the provisions of
Article 87 paragraph (1) of Issuers' Law.
As they are not applicable to this OGM, the shareholders do not decide on the
other aspects provided by Article 176 paragraph (1) of Regulation no. 5/2018
such as the payment date the date of the guaranteed participation.
(b) The empowerment, with authority to sub-delegate, of Johan Meyer to sign
the shareholders' resolutions, as well as any other documents in connection
therewith, and to carry out all procedures and formalities set out by law for
the purpose of implementing the shareholders' resolutions, including
formalities for publication and registration thereof with the Trade Registry
or with any other public institution.
This item is approved with 1,591,892,086 votes, representing 99.9236 % of the
total votes held by the present or represented shareholders, in accordance
with Article 14 (1), second paragraph of the Constitutive Act corroborated
with Article 112 (1), second paragraph of Companies' Law no. 31/1990.
The votes were recorded as follows:
- 1,591,892,086 votes "for";
- 786,987 votes "against";
- 151,203 abstentions;
- 18,997,155 votes "not given";
- 0 votes annulled from correspondence;
- 0 votes annulled in the OGM meeting.
This OGM Resolution no. 1 is drafted on behalf of the shareholders today, 26
March 2024, in 3 original counterparts by:
________________________
Johan MEYER
Chairman
_______________________
Ionuț IOANCĂ
Meeting secretary
_______________________
Livia DUMITRESCU
Technical secretary
Resolution no. 2 / 26 March 2024
of the Shareholders' Ordinary General Meeting of
FONDUL PROPRIETATEA S.A.
Headquarters: 76-80 Buzești Street, 7(th) floor, 1(st) district, Bucharest,
Romania,
Registered with the Trade Registry under number J40/21901/2005, fiscal
registration code 18253260
Today, 26 March 2024, 11:00 AM (Romanian time), the shareholders of Fondul
Proprietatea S.A. (the "Fund" or "Fondul Proprietatea") have met during the
Shareholders' Ordinary General Meeting ("OGM") of the Fund, at its first
summoning, at "INTERCONTINENTAL ATHÉNÉE PALACE BUCHAREST" Hotel, Le
Diplomate Salon, 1-3 Episcopiei Street, 1(st) District, Bucharest, zip code
010292, Romania, the OGM being opened by its Chairman, namely Mr. Johan MEYER,
in his capacity of permanent representative of Franklin Templeton
International Services S.À R.L., a société à responsabilité limitée
qualifying as an alternative investment fund manager under article 5 of the
Luxembourg law of 12 July 2013 on alternative investment fund managers,
authorized by the Commission de Surveillance du Secteur Financier under no.
A00000154/21 November 2013, whose registered office is located at 8a, rue
Albert Borschette, L-1246 Luxembourg, registered with the Luxembourg register
of commerce and companies under number B36.979, registered with the Romanian
Financial Supervisory Authority under number PJM07.1AFIASMDLUX0037/10 March
2016, in its capacity of alternative investment fund manager and sole director
of Fondul Proprietatea S.A. ("Sole Director").
Whereas:
§ The convening notice of the OGM was published on the Fund's website
(www.fondulproprietatea.ro) on 5 February 2024 and in the Official Gazette of
Romania, Part IV, number 632 of 7 February 2024 and in Jurnalul number 1581 of
7 February 2024 and republished with supplements on the Fund's website on 26
February 2024 and in the Official Gazette of Romania, Part IV, number 1007 of
28 February 2024 and in "Adevărul" newspaper number 9099 of 28 February 2024;
§ The provisions of Companies' Law no. 31/1990, republished, with its
subsequent amendments and supplementations ("Companies' Law no. 31/1990");
§ The provisions of Emergency Government Ordinance no. 32/2012 on
undertakings for collective investment in transferable securities and
investment management companies, as well as for the amendment and
supplementation of Law no. 297/2004;
§ The provisions of Regulation of the Financial Supervisory Authority no.
4/2013 regarding depositary receipts, with its subsequent amendments and
supplementations;
§ The provisions of Law no. 24/2017 on issuers of financial instruments and
market operations, republished ("Issuers' Law");
§ The provisions of Regulation of the Financial Supervisory Authority no.
5/2018 on issuers of financial instruments and market operations, with its
subsequent amendments and supplementations ("Regulation no. 5/2018");
§ The provisions of Law no. 243/2019 on alternative investment funds and for
the amendment and completion of other legislation, with its subsequent
amendments and supplementations ("Law no. 243/2019");
§ The provisions of Regulation of the Financial Supervisory Authority no.
7/2020 on the authorization and operation of alternative investment funds,
with its subsequent amendments and supplementations ("Regulation no. 7/2020");
§ The provisions of Commission Implementing Regulation (EU) 2018/1212 of 3
September 2018 laying down minimum requirements implementing the provisions of
Directive 2007/36/EC of the European Parliament and of the Council as regards
shareholder identification, the transmission of information and the
facilitation of the exercise of shareholders rights ("CE Regulation
1212/2018"),
§ The provisions of the Fund's constitutive act ("Constitutive Act"),
it is necessary to have a number of shareholders holding at least 25% of the
total voting shares in order to meet the quorum conditions, in the present
OGM, manifesting their vote 232 shareholders, which represents a number of
1,591,932,553 voting rights (i.e. 44.7621% of the total voting rights at the
reference date 29 February 2024, i.e. 3,556,427,239; i.e. 28.0823% of the
total number of issued shares at the reference date 29 February 2024, i.e.
5,668,806,128),
the conditions regarding the quorum for holding this meeting and the majority
for shareholders to decide legally are met, under the legally required
majority (according to art. 115 paragraphs (1)-(2) of the Companies' Law no.
31/1990 and art. 14 I paragraph (1) of the Constitutive Act).
Following debates, the Fund's shareholders decide as follows:
I. The approval of the terms of, along with the execution of, the
Management Agreement between Fondul Proprietatea and Franklin Templeton
International Services S.à r.l. for a period of one (1) year starting 1 April
2024 and until 31 March 2025 in the form set out in the supporting
documentation relating to OGMS agenda item 1, with a change in the base fee
rate such that the base fee is 1.35%, as reflected in the Annex of the herein
Resolution.
Mrs. Ilinca von Derenthall, the Chairperson of the Board of Nominees is
empowered (with authority to be substituted by another member of the Board of
Nominees) to execute the mentioned Management Agreement and to perform/sign
any related necessary, useful and/or opportune legal acts and deeds for and on
behalf of Fondul Proprietatea.
(Item added on the agenda at the request of the shareholder Ministry of
Finance)
This item is approved with 1,266,436,562 votes, representing 79.4947% of the
total votes held by the present or represented shareholders, in accordance
with Article 14 (1), second paragraph of the Constitutive Act corroborated
with Article 112 (1), second paragraph of Companies' Law no. 31/1990.
The votes were recorded as follows:
- 1,266,436,562 votes "for";
- 314,615,561 votes "against";
- 10,554,099 abstentions;
- 20,221,209 votes "not given";
- 0 votes annulled from correspondence;
- 0 votes annulled in the OGM meeting.
II. The approval of:
(a) The date of 11 April 2024 as the Ex - Date, in accordance
with Article 176 paragraph (1), computed with the provisions of Article 2
paragraph (2) letter (l) of Regulation no. 5/2018;
The date of 12 April 2024 as the Registration Date, in accordance with Article
176 paragraph (1) of Regulation no. 5/2018, computed with the provisions of
Article 87 paragraph (1) of Issuers' Law.
As they are not applicable to this OGM, the shareholders do not decide on the
other aspects provided by Article 176 paragraph (1) of Regulation no. 5/2018
such as the payment date and the date of the guaranteed participation.
(b) The empowerment, with authority to sub-delegate, of Johan
Meyer to sign the shareholders' resolutions, as well as any other documents in
connection therewith, and to carry out all procedures and formalities set out
by law for the purpose of implementing the shareholders' resolutions,
including formalities for publication and registration thereof with the Trade
Registry or with any other public institution.
This item is approved with 1,591,892,086 votes, representing 99.9236 % of the
total votes held by the present or represented shareholders, in accordance
with Article 14 (1), second paragraph of the Constitutive Act corroborated
with Article 112 (1), second paragraph of Companies' Law no. 31/1990.
The votes were recorded as follows:
- 1,591,892,086 votes "for";
- 786,987 votes "against";
- 151,203 abstentions;
- 18,997,155 votes "not given";
- 0 votes annulled from correspondence;
- 0 votes annulled in the OGM meeting.
This OGM Resolution no. 2 is drafted on behalf of the shareholders today, 26
March 2024, in 3 original counterparts by:
________________________
Johan MEYER
Chairman
_______________________
Ionuț IOANCĂ
Meeting secretary
_______________________
Livia DUMITRESCU
Technical secretary
Annex - The Management Agreement by and between Fondul Proprietatea S.A. and
Franklin Templeton International Services S.À R.L.
MANAGEMENT AGREEMENT
DATED _____________ 2024
FONDUL PROPRIETATEA S.A.
and
FRANKLIN TEMPLETON INTERNATIONAL SERVICES S.À R.L
THIS AGREEMENT is made on ______________________ 2024
BETWEEN:
FRANKLIN TEMPLETON INTERNATIONAL SERVICES S.À R.L., a société à
responsabilité limitée qualifying as an alternative investment fund manager
("AIFM") under Article 101-1 of the Luxembourg law of 17 December 2010 on
undertakings for collective investment, as amended ("UCI Act"), whose
registered office is located at 8A rue Albert Borschette, L-1246 Luxembourg
and which is registered with the Luxembourg Registre de Commerce et des
Sociétés under number B 36.979 and in the Register kept by the Romanian
Financial Supervisory Authority under no. PJM07.1AFIASMDLUX0037/10 March 2016
(the "Fund Manager");
and
FONDUL PROPRIETATEA S.A. headquartered at 76 - 80 Buzesti St., 7(th) floor,
1(st) District, Bucharest municipality, Romania which is registered with the
Bucharest Trade registry under no. J40/21901/2005, tax identification number
(CIF) 18253260 and registered with the public registry of the Financial
Supervisory Authority as a retail alternative investment fund under register
number PJR09FIAIR/400018 (the "Customer"/ the "Fund"/ "FP");
WHEREAS:
(A) The Customer wishes to appoint the Fund Manager as the alternative
investment fund manager of the Customer on the terms and subject to the
conditions of this Management Agreement.
(B) The Fund Manager wishes to accept such appointment on the terms and
subject to the conditions of this Management Agreement.
(C) The Customer is set up as an undertaking for collective investment
(A.O.P.C.) of the closed-end type, as defined under Article 114(1) letter b)
of the Law 297/2004 and qualifies as an alternative investment fund within the
meaning of the Directive 2011/61/EU of the EU Parliament and of the Council on
Alternative Investment Fund Managers, as amended (the "AIFMD"), Law 74/2015 on
managers of alternative investment funds in Romania ("AIFM Law" or "Law no.
74/2015") and Law 243/2019 on alternative investment funds ("AIF Law" or "Law
no. 243/2019"). The Customer wishes to appoint the Fund Manager as its AIFM
within the meaning of the AIFM Law and to entrust it with certain functions
accordingly, including, without limitation, all functions relating to risk
management and portfolio management.
(D) The Fund Manager opened a branch in Bucharest whose registered
office is in Buzești 76-80 Street, floor 8, district 1, sole registration
code 40198471, Trade Register number J40/16822/2018, registered with FSA under
registration number PJM08AFIASMS / 400001 dated 5 August 2019 (the "Bucharest
Branch") and the branch was notified by CSSF as a branch of an alternative
investment fund manager under Chapter II of the AIFM Act, and is entitled to
carry out services in Romania in accordance with the AIFM Law. The Fund
Manager is registered with FSA under registration number
PJM07.1AFIASMDLUX0037/10 March 2016 with respect to the cross-border
activities that it is entitled to carry out in Romania. As of 1 December 2020,
the Bucharest Branch carries out the portfolio management and administrative
activities for the Customer, while the risk management activity is carried out
by the Fund Manager on a cross border basis.
(E) The general meeting of shareholders of the Customer approved on 25
September 2023 the appointment of the Fund Manager as the external alternative
investment manager and sole director of the Customer and the general meeting
of shareholders of the Customer approved on 26 March 2024 this Management
Agreement.
In consideration of the mutual promises, covenants and agreements contained in
this Management Agreement, IT IS AGREED:
1. INTERPRETATION
1.1 In this Management Agreement, unless the context otherwise
requires, it is agreed that:
(a) words in the singular include the plural, words in the plural include
the singular, words importing the masculine gender include the feminine, and
words importing the feminine gender include the masculine;
(b) headings and paragraphs are for the purpose of organization only and
shall not be used to interpret this Management Agreement;
(c) references to "this Management Agreement" include its Recitals and
Annexes (which are incorporated herein by reference and are integrated within
the body of this Management Agreement), unless otherwise stated;
(d) references in this Management Agreement to Preamble, Recitals, Sections,
Articles, Clauses, Sub-Clauses and Annexes are to the preamble, recitals,
sections, articles, clauses and sub-clauses of, and annexes to, this
Management Agreement, unless otherwise stated;
(e) references to any provisions of legislation, delegated legislation,
regulations or rules shall be construed as references to such provisions as
replaced, re-enacted, extended or amended from time to time (whether before or
after the date hereof); and
(f) references to "law", "legislation", "legal provisions", "regulations",
or other similar wording shall be construed as including any legally binding
law, ordinance, decision, regulation, rule, of any governmental,
intergovernmental or supranational body, agency, department of any regulatory,
self-regulatory or other authority.
1.2 Notwithstanding anything to the contrary in this Management
Agreement, the Parties agree that none of the limitations of liability or
responsibility which the Parties may agree vis-à-vis each other pursuant to
this Management Agreement or otherwise may be construed as a limitation of the
obligations, liabilities or responsibilities imposed by the Compulsory Rules.
2. DEFINITIONS
In this Management Agreement, the following capitalised terms shall, unless
the context otherwise requires or it is otherwise provided, have the following
meanings:
Account means the account maintained by the depositary and sub-custodian(s),
as the Customer has notified in writing to the Fund Manager;
Affiliate means, with respect to any person, any other person directly or
indirectly controlling, directly or indirectly Controlled by, or under common
Control with such person;
AIFM means an alternative investment fund manager.
AIFM Act means the Luxembourg Act of 12 July 2013 on alternative investment
fund managers for implementing the AIFMD;
AIFMD has the meaning given to it in Recital (C);
AIFM Law or Law no. 74/2015 has the meaning given to it in Recital (C);;
AIFM Regulation means the FSA Regulation no.10/2015 regarding the management
of investment funds.
AIF Law or Law no. 243/2019 has the meaning given to it in Recital (C);
AIF Regulation means the FSA Regulation no. 7/2020 regarding the authorisation
and functioning of investment funds;
AIFM Rules means the set of rules formed by (a) the AIFMD, (b) the Commission
Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing the
AIFMD, (c) any binding guideline or other delegated act and regulation issued
from time to time by the EU relevant authorities pursuant to any national laws
and regulations (such as the AIFM Act, AIFM Law or AIF Law,), and (d) any
national laws and regulations enacted in connection with the implementation of
the rules listed in paragraphs (a) to (c) above (such as the AIFM Regulation
or AIF Regulation) which are applicable to this Management Agreement;
Associated Company (when used in relation to the Fund Manager) means any
company which is an Affiliate of the Fund Manager;
BoN means the Board of Nominees ("Comitetul Reprezentantilor" in Romanian
language) which monitors the activity of the Fund Manager, appointed by the
GSM and under direct supervision of the GSM;
Calculation Period means a calendar quarter, each consisting of a three-month
period; the four calendar quarters that make up the year shall be: January,
February and March (the first quarter, or Q1); April, May and June (the second
quarter, or Q2); July, August and September (the third quarter, or Q3); and
October, November and December (the fourth quarter, or Q4);
Central Depositary means a legal person established as a joint-stock company,
authorised and supervised by the FSA, performing deposit, registration,
clearing and settlement services for transactions with financial instruments
and related activities;
CNVM means the Romanian National Securities Commission, having the duties
established in the Government Emergency Ordinance no. 25/2002 on the approval
of the By-laws of the National Securities Commission; in April 2013, the CNVM
was reorganized as the FSA;
Companies Law means Law no. 31/1990 on companies;
Compulsory Rules means prescriptive rules of law (referred to in Luxembourg
law as "règles d'ordre public" and in Romania as "reguli de ordine publica")
from which the Parties may not be relieved by way of agreement, whether or not
these rules result from the AIFM Rules and irrespective of their national or
EU origin and nature;
Constitutive Act means the constitutive act of the Customer;
Control means, in relation to any person, the power of another person,
directly or indirectly, to secure that the affairs of such person are
conducted in accordance with the wishes of that other person, (a) by means of
the holding of shares or the possession of voting power in relation to that or
any other person, or (b) by virtue of any powers conferred by the
constitutional or corporate documents, or by contract or any other document or
other legal relationship, or by applicable law, regulating that or any other
person, and "Controlled" shall be interpreted accordingly;
CSSF means Commission de Surveillance du Secteur Financier, the Luxembourg
financial supervisory authority;
Customer has the meaning given to it in the Preamble;
Damages mean any and all losses, claims, liabilities, damages, taxes or
expenses;
Delegate means any entity to which the Fund Manager delegates or outsources
any of its obligations under this Management Agreement, including, without
limitation, the Investment Manager in accordance with clause 14.3;
Data Protection Laws mean the set of rules formed by (a) Regulation (EU)
2016/679 of the European Parliament and of the Council of 27 April 2016 on the
protection of natural persons with regard to the processing of personal data
and on the free movement of such data, and repealing Directive 95/46/EC (the
"General Data Protection Regulation"); (b) Law no. 190/2018 on measures to
implement the General Data Protection Regulation, (c) any binding guideline or
other delegated act and regulation issued from time to time by the EU relevant
authorities or competent national authorities pursuant to any national laws
and regulations and (d) any national laws and regulations enacted in
connection with the implementation of the rules listed under (a) to (c) above
or other legislation which replaces or amends the same, as far as applicable
to this Management Agreement;
DCM has the meaning ascribed to such term in clause 9.2;
Depositary is the entity or branch of an entity registered with the FSA,
authorised to hold and safeguard financial assets of collective investment
undertakings in accordance with the provisions of the AIFM Law, the AIF Law
and AIF Regulation, appointed by the Customer and in the deposit of which are
entrusted for safekeeping all assets of the Customer;
Discount means, in respect of a day, an amount calculated by subtracting the
closing price of the Fund's shares on the Bucharest Stock Exchange on REGS for
such day from the NAV per share then most recently published by the Fund
Manager and dividing the result by such most recently published NAV per share;
Discount Objective has the meaning ascribed to such term in the IPS;
Dispute has the meaning ascribed to such term in clause 19.2(a);
EGM means the Extraordinary General Meeting of the Customer's Shareholders;
EU Markets in Financial Instruments Rules means:
(i) Directive 2014/65/EU of the European Parliament and of the
Council of 15 May 2014 on markets in financial instruments and amending
Directive 2002/92/EC and Directive 2011/61/EU (MiFID II);
(ii) the Commission Delegated Directive 2017/593 of 7 April
2016, supplementing Directive 2014/65/EU of the European Parliament and of the
Council with regard to the safeguarding of financial instruments and funds
belonging to clients, product governance obligations and the rules applicable
to the provision or reception of fees, commissions or any monetary or
non-monetary benefits; and
(iii) Regulation (EU) No 600/2014 of the European Parliament and
of the Council of 15 May 2014 on markets in financial instruments and amending
Regulation (EU) No 648/2012 (MIFIR);
Force Majeure Event means, in relation to any Party, any act, event or
circumstance, the cause of which is not of such Party's making nor within that
Party's reasonable control, including without limitation (to the extent not of
that Party's making nor within that Party's reasonable control) act of God,
war, hostilities (whether or not war has been declared), terrorist acts, acts
of any civil or military authority, governmental or regulatory direction or
restriction, suspension or withdrawal of licences or consents from other
reasons than the negligence of the Fund Manager, currency restrictions, market
conditions affecting the execution or settlement of transactions or the value
of assets, failure or breakdown in communications, the failure of any relevant
exchange or clearing house, riot, insurrection, civil commotion, public
demonstration, sabotage, acts of vandalism, fire, flood, earthquake, extreme
weather conditions, epidemic or pandemic, explosion, aircraft crashes or
things falling from aircraft, release of ionising radiation or contamination
by radioactivity, chemical or biological contamination, the order of any court
or governmental or regulatory authority, delay in transportation or
communications, breakage of or accidental damage to equipment, any strike,
lock-out or other industrial trade dispute (not involving solely the employees
of that Party), structural shift or subsidence;
FP Data means all personal data in whatever form or medium which is (i)
supplied, or in respect of which access is granted to the Fund Manager (or any
approved third party) whether by FP or otherwise in connection with this
Management Agreement, or (ii) produced or generated by the Fund Manager or on
behalf of FP by the Fund Manager, while acting in capacity as data processor
(or any approved third party) in connection with this Management Agreement and
which shall in any event include the following types of personal data e.g.
name, address, email address, phone number, bank details, medical information,
browsing history etc.
FSA means the Romanian Financial Supervisory Authority, having the duties
established in the Government Emergency Ordinance no. 93/2012;
Fund Manager's Group means the Fund Manager and its Associated Companies.
GEO no. 81/2007 means the Emergency Government Ordinance no. 81/2007 for the
acceleration of the procedure on granting damages in relation to assets
abusively taken;
GSM means the General Meeting of the Customer's Shareholders;
Indemnified Party means the Customer, its officers (but not the Customer's
AIFM), employees, agents and representatives;
Intermediary means (i) according to the relevant legislation applicable to
investment services, investment firms authorised by FSA, (ii) credit
institutions authorised by the National Bank of Romania according to the
relevant banking legislation, as well as (iii) other investment firms or
credit institutions authorised in Member or Non-Member States to carry out
investment services;
IPS means the "Investment Policy Statement", i.e. the investment objectives
and parameters governing investment decisions over the Portfolio which the
Fund Manager has proposed and the GSM has approved;
Key Employees means the senior personnel of the Bucharest Branch entitled to
take investment decisions and to set the corporate strategy on behalf of the
Fund;
Law no. 297/2004 means the Capital Market Law no. 297/2004;
Law no. 24/2017 means Law no. 24/2017 on issuers of financial instruments and
market operations;
Law no. 247/2005 means the Law no. 247/2005 regarding the property and
judicial reform, as well as adjacent measures;
Management Agreement means this Management Agreement entered into between the
Customer and the Fund Manager;
Member State means the Member States of the European Union and the other
States which belong to the European Economic Area;
MiFID II means Directive 2014/65/EU of the European Parliament and of the
Council of 15 May 2014 on markets in financial instruments and amending
Directive 2002/92/EC and Directive 2011/61/EU;
NAV means the net asset value of the Customer, which is determined according
to the applicable regulations;
NAV Objective has the meaning ascribed to such term in the IPS;
New Appointment Date means, in relation to the appointment of a new fund
manager and sole director, or, in the event the Customer becomes an internally
managed alternative investment fund, the appointment of new directors of the
Customer following termination of this Management Agreement, the later of: (i)
the date when the new or, if decided by the Customer, interim, fund manager
and sole director, or, as the case may be, new directors, are registered with
the Trade Registry or any other competent authority as per the applicable
legal provisions; and (ii) the date when the FSA issues its approval in
relation to the appointment of the new, or, if decided by the Customer,
interim, sole director and fund manager as the case may be, new directors, if
such approval is legally required and, (iii) the date when all other mandatory
legal requirements for the replacement of the Fund Manager have been
satisfied, and, in each of the cases under paragraphs (i), (ii) and (iii),
being effective on the date that the Fund Manager received notice (or ought
reasonably to have received notice) of the event;
OGM means the Ordinary General Meeting of the Customer's Shareholders;
Party means any of the Customer or the Fund Manager;
Performance Objectives has the meaning ascribed to such term in clause 9.1;
Performance Report has the meaning ascribed to such term in clause 9.3;
Portfolio means the portfolio of assets of the Customer, including uninvested
cash designated from time to time by the Customer as subject to the management
of the Fund Manager pursuant to this Management Agreement;
Reporting Period means the period between 1 January 2024 and 31 December 2024;
RMS has the meaning ascribed to such term in Annex 2 (Specific duties and
obligations);
Sole Director means the legal person appointed by the GSM to manage the
Customer, within the limits provided by the applicable Romanian law, the
Constitutive Act and the decisions of the GSM. For the purposes of this
Management Agreement, any reference to the Sole Director is a reference to the
Fund Manager;
Soft Dollar Practices means arrangements under which assets or services, other
than execution of securities transactions, are obtained by a fund manager from
or through a broker in exchange for the fund manager directing to the
respective broker trades concluded on behalf of the undertaking for collective
investment managed by that fund manager;
Termination Notice means a termination notice given by the Customer or the
Fund Manager in accordance with clause 13;
Termination Notice Date means the date when a Termination Notice is given in
accordance with clause 13;
Trading Day means any day on which trading in shares may be carried out on
Bucharest Stock Exchange, in accordance with the rules of the Bucharest Stock
Exchange.
3. SCOPE OF THIS MANAGEMENT AGREEMENT
The scope of this Management Agreement is to appoint the Fund Manager as Sole
Director and agree on the terms of the management by the Fund Manager of the
Customer as an AIFM of the Customer and to establish the parties' rights and
obligations in relation to each such appointment.
4. APPOINTMENT OF THE FUND MANAGER
By this Management Agreement the Customer appoints the Fund Manager as Sole
Director of the Customer and alternative investment fund manager and agrees to
the terms of the mandate of the Fund Manager.
5. ACCEPTANCE OF APPOINTMENT
The Fund Manager accepts its appointment as Sole Director of the Customer and
as alternative investment fund manager on the terms of this Management
Agreement.
6. OBLIGATIONS OF THE FUND MANAGER, MANAGEMENT SCOPE AND
OBJECTIVES
6.1. The obligations and the competencies of the Fund Manager as Sole
Director and alternative investment fund manager of the Customer are set forth
in the Companies Law, Law no. 297/2004, Law no. 24/2017, AIF Law, and the
related regulations, as well as the Constitutive Act, the AIFM Rules (which
may be subject to further amendments according to the law), and the provisions
of this Management Agreement. The Fund Manager undertakes to comply at all
times with all AIFM Rules and any other applicable law.
6.2. The Fund Manager shall exercise its obligations and duties in accordance
with the decisions of, and under the control of, the GSM and the monitoring of
the BoN.
6.3. In addition to the duties provided by applicable law, the Fund Manager
shall propose for the prior approval of the BoN and further, of a GSM, the
general strategy in accordance with the investment policy of the Customer. The
Fund Manager shall be solely responsible for the implementation of the
investment policy in respect of the Portfolio and for achieving a proper
balance between the profits and the risks related to the Portfolio.
6.4. The Fund Manager shall inform, periodically in accordance with the
applicable legislation and clause 11 of this Management Agreement, the BoN of
any significant changes affecting the activities of the Customer and within
the structure of the Portfolio.
6.5. In addition to any duties or obligations imposed by any applicable law
and the Constitutive Act, the Fund Manager shall perform the following
activities:
6.5.1. identify, analyse, quantify, manage and mitigate all risks affecting
the Customer, the Portfolio and perform all other risk management functions
provided by the AIFM Rules and prepare an annual report for the Customer
indicating how risks affecting the Customer have been identified, analysed,
quantified, managed or mitigated. An annual report on execution quality (i.e.,
demonstration that efforts have been made and all sufficient steps have been
taken to meet the Best Execution Policy standards, as defined in Art. 10.5.1.)
along with relationships with execution brokers, breakdown of order types and
execution venue fee arrangement shall be presented by the Fund Manager;
6.5.2. carry out all portfolio management functions provided in the AIFM
Rules;
6.5.3. establish a reference date for shareholders entitled to vote within the
GSM, under the law, and draft the text of the announcement to convene the GSM,
after obtaining the prior approval of the BoN and after adding to the agenda
the matters requested by the BoN;
6.5.4. upon the written request of any shareholder submitted before the date
of the GSM, provide answers, in connection with the aspects concerning the
business of the Customer;
6.5.5. ensure that, if requested by any of the shareholders, a copy of the
minutes of the GSM shall be given to them and also, after the calling of the
annual OGM is published, make available to the shareholders the financial
statements of the Customer and the reports of the Fund Manager and of the
Customer's financial auditors;
6.5.6. prepare the annual financial statements, the annual activity report,
the semi-annual report, and the quarterly reports (preparing each of the
foregoing in accordance with the law and regulations in force at the
applicable time), the Performance Report, examine the financial auditors'
report, present all such reports to the BoN before submitting such documents
to the GSM for approval, and making proposals on the distribution of the
profit to the GSM, after obtaining the prior approval of the BoN, if required;
6.5.7. manage the relationship with the Central Depositary with regard to its
shareholders register functions;
6.5.8. prepare an annual report on the management and the business policy of
the Customer, to be presented to the BoN for approval prior to its submission
to the GSM;
6.5.9. propose for the prior approval of the BoN and further, of the GSM, the
annual income and expenditure budget and business plan;
6.5.10. approve the outsourcing of certain activities, within the limits of
the approved budget, respectively delegate the performance of certain
activities, subject to the corporate approvals required under the Constitutive
Act, to the observance of all conditions and limitations regarding delegation
included in the AIFM Rules and in this Management Agreement and to the prior
endorsement by the CSSF or other applicable competent authorities, where
required by applicable legislation;
6.5.11. based on the approval of the BoN, submit to the approval of the EGM
the execution of contracts for acquiring, selling, exchanging or for creating
pledges, having as subject non-current assets (in Ro. "active imobilizate") of
the Customer, as defined by the applicable accounting standards, whose value
exceeds, individually or cumulatively during a financial year, 20% of the
total value of the non-current assets, less any receivables;
6.5.12. execute contracts for acquiring, selling, exchanging or for creating
pledges, having as subject non-current assets of the Customer, as defined by
the applicable accounting standards, whose value does not exceed, individually
or cumulatively during a financial year, 20% of the total value of the
non-current assets of the Customer, less any receivables, without prior
approval of the OGM or the EGM;
6.5.13. subject to the provisions of the Constitutive Act, IPS and applicable
legislation, take all decisions at its sole discretion in relation to the
acquisition of, disposal of, and exercise of all rights and obligations in
relation to the assets of the Customer;
6.5.14. propose to the GSM the conclusion of the financial audit agreement
according to the legal provisions in force, upon obtaining the prior approval
of the BoN, as well as approving the procedure of internal audit and the audit
plan;
6.5.15. change the location of the registered office of the Customer, with the
prior notification of BoN, provided that the registered office shall at all
times be registered in Romania;
6.5.16. prepare and make available to the BoN the reports, information as well
as any other documents necessary for exercising the monitoring duties, as may
be required by the BoN in line with the Constitutive Act and any applicable
legislation including, for the avoidance of any doubt, the AIFM Rules;
6.5.17. inform at once the BoN on any litigation or infringement of
legislation regarding the Fund Manager, on any operation which might be an
infringement to the investment policy and about the plans/correction measures
for addressing these matters;
6.5.18. ask for the calling of the GSM in order for the latter to decide
whenever an issue appears on which the BoN has a disagreement with the Fund
Manager, which cannot be resolved amicably by the two bodies;
6.5.19. propose to BoN the recommendation for the EGM for the appointment of
the investment firm/investment bank who shall manage a public offer, as well
as on its remuneration, when it will become necessary that such a company be
appointed related to the admission to trading of the Customer on other markets
than the Bucharest Stock Exchange and the London Stock Exchange;
6.5.20. duly notify the FSA or other regulatory authorities in any relevant
Member State and inform the shareholders of the Customer according to the
provisions of the AIFM Rules, of any major holding and control of non-listed
companies acquired by the Customer;
6.5.21. approve any related parties transactions , and, to the extent that
related parties transactions have a value higher than 0.25% of the NAV, to
seek the approval of the BoN, and if they have a value higher than 5% of the
net asset value, to fulfil the GSM calling formalities; notwithstanding any
approval granted in accordance with this paragraph: (i) any related party
transactions shall be performed on an arm's length basis and subject to
adequate transfer pricing analysis (unless otherwise permitted under the
applicable regulations) and (ii) no related parties transaction may be
submitted to the approval of the BoN or the GSM by the Fund Manager (to the
extent it is under its control), if required in accordance with this
paragraph, unless that related parties transaction is permitted under
applicable regulations;
6.5.22. perform all the duties and obligations to which it is required by, and
otherwise comply with, the AIFM Rules applicable to it in connection with its
appointment as the AIFM of the Customer; and
6.5.23. any other responsibilities set according to the Constitutive Act and
any applicable legislation.
The following activities to be carried out by the Fund Manager based on the
aforementioned paragraphs qualify for the purpose of AIFM Rules as
administration activities, respectively (a) legal and fund management
accounting services in the case of sub-clauses 6.5.3, 6.5.6, 6.5.8, 6.5.9,
6.5.10, 6.5.11, 6.5.12, 6.5.14, 6.5.15, 6.5.18 and 6.5.19; (b) customer
inquiries in the case of sub-clauses 6.5.4, 6.5.5, 6.5.16 and 6.5.17, and (c)
maintenance of unit/ shareholder register in the case of sub-clause 6.5.7.
6.6. The Fund Manager shall perform its duties under this Management
Agreement in line with the Customer's or the shareholders of the Customer's
best interest in accordance with the AIFM Rules and the highest standards of
professional conduct and integrity, including without limitation with respect
to responding to public offerings or other corporate actions relating to the
securities in the Portfolio.
6.7. Without limiting the generality of the foregoing (and so that
none of the following provisions shall be deemed to limit the generality of
any other of the following provisions), the Fund Manager undertakes to do the
following:
(a) at all times make all reasonable efforts to avoid conflicts of interest,
provided that the Customer understands that the services the Fund Manager
provides to the Customer are not exclusive and that the Fund Manager may
provide similar services to other customers. Where a conflict arises, the Fund
Manager will promptly disclose this to the Customer and use all reasonable
efforts to resolve the conflict fairly;
(b) will not perform any transaction in relation to the Portfolio knowingly
and intentionally acting as agent for any of the Fund Manager's clients or
clients of its Associated Companies unless the Fund Manager shall have
obtained the prior written consent of the Customer to such transaction, having
given the Customer all material information relating thereto;
(c) shall comply with all applicable laws and regulations, including without
limitation the AIFM Rules insofar as they are relevant to this Management
Agreement, the Fund Manager's performance of its functions under it in any
countries in which it performs its duties and carries out its activities
pursuant to this Management Agreement and the Fund Manager shall procure that
all its employees and Delegates, and it shall use all reasonable steps to
procure that all its agents, shall comply with such laws, regulations and
rules as are applicable to them in relation to their involvement with the
affairs of the Customer;
(d) shall not enter into any transaction in relation to the Portfolio where
the officers or employees of the Fund Manager, or any Associated Company who
acts as a Delegate in accordance with clause 14.3 for the purposes of this
Management Agreement are aware or ought reasonably to be aware that the Fund
Manager or any Associated Company has a material interest in such transaction,
unless it obtains the prior written consent of the Customer to such
transaction, having first given the Customer all material information relating
thereto, and for the purposes of this paragraph a "material interest" means a
direct or indirect pecuniary interest, whether present or expected (other than
a pecuniary interest consisting of a normal commission, rate or price
differential or similar remuneration receivable in the ordinary course of
business for effecting securities, deposit or foreign exchange transactions)
which might reasonably be expected to influence a person, knowingly having
that interest, to enter into or refrain from entering into such transaction;
(e) shall account to the Customer for all advantages and benefits received by
the Fund Manager or any Associated Company who acts as a Delegate in
accordance with clause 14.3 from third parties resulting from bulk dealing
involving the assets in the Portfolio and other securities and investments as
are attributable (using a pro rata basis of calculation) to the assets in the
Portfolio; and
(f) shall account to the Customer for all allowances, rebates, discounts and
refunds received (if any) in respect of any transaction involving the assets
of the Portfolio from commission brokerage or other charges which are made to
the Fund Manager or any Associated Company who acts as a Delegate in
accordance with clause 14.3 in any transaction and will not authorise any
other person on behalf of the Customer to retain such.
6.8. The Fund Manager shall at all times use reasonable efforts to
be expected of a diligent professional investment manager acting in good faith
to stay informed of all facts concerning rights arising in respect of
securities held in the Portfolio and in this regard shall in particular
monitor on a continuing basis all sources of information reasonably available,
including without limitation press reports and screen-based information
services.
6.9. The Fund Manager agrees to communicate whenever necessary or
desirable with the Depositary to ensure a full flow of information in respect
of rights arising in relation to the securities and cash held in the
Portfolio.
6.10. All foreign exchange transactions relating to the Account shall be
carried out at competitive rates by the Fund Manager using a third party bank
(which may include the Depositary if a bank).
6.11. When entering into transactions on behalf of the Customer in
accordance with this Clause 6, the Fund Manager will (and shall procure that
any Associated Company who acts as a Delegate in accordance with clause 14.3
will) ensure that brokers' and dealers' terms of business and terms and
conditions with other third parties entered into with or by the Fund Manager
or any Associated Company who acts as a Delegate in accordance with clause
14.3 and applicable to transactions in listed securities for the Portfolio
(whether or not such terms and conditions are specifically intended to apply
to transactions for the Portfolio) do not:
(a) disapply or waive best execution or other regulatory
protections normally applicable to professional clients (as defined in the
applicable EU Markets in Financial Instruments Rules) for the Customer; or
(b) confer liens, rights of retention or security over the
Portfolio or any assets or monies of the Customer (except (i) in respect of
margin for on exchange margined transactions or (ii) in respect of
non-fulfilment of the obligations of the Customer under such agreement with
brokers and dealers, but only if the part of the Portfolio subject to such
liens, rights of retention or security is not disproportionate with the
Customer's obligations and it is market practice to confer them or (iii) as
otherwise permitted under this Management Agreement or as otherwise consented
to in writing by the Customer or as may be required by applicable laws); or
(c) allow the Customer's monies or assets to be mixed with, set
off against obligations or utilised for the benefit of any other person except
where that is in accordance with standard market practice; or
(d) give any representations or warranties on the Customer's
behalf without the Customer's prior written consent other than representations
or warranties given in the ordinary course of business and which the Fund
Manager has reason to believe are true and correct; or
(e) confer any onerous and unusual obligations on the Customer.
6.12. In relation to the Portfolio's management function, the Fund Manager
will perform the day-to-day management of the Customer's assets in order to
implement the Customer's investment objective, policy and strategy as such are
described in the IPS, as well as the portfolio management duties and
obligations constituting portfolio management under the AIFM Rules in each
case, in consideration of the Customer's specific features including without
limitation those described in Annex 2 (Specific duties and obligations).
6.13. Without prejudice to Clause 6.5.1, in relation to the Customer's and the
Portfolio's risk management function, the Fund Manager will establish,
implement, regularly (at least annually) review, and as the case may be, adapt
such risk management system (including the liquidity management system) which
is necessary in order to identify, measure, manage and monitor appropriately
all risks (including the liquidity risk) which are relevant to the Customer's
investment strategy and to which the Customer is or may be exposed, as well as
the risk management duties and obligations to which the Fund Manager is
compelled by the AIFM Rules in view of the Customer's specific features,
including without limitation those described in Annex 2 (Specific duties and
obligations).
6.14. In addition to the duties and obligations listed in this Clause 6, the
Fund Manager will perform the duties and obligations, which are described in
Annex 2 (Specific duties and obligations) in consideration of the Customer's
specific features.
6.15. In the performance of its duties and obligations under this Management
Agreement and the AIFM Rules, the Fund Manager will observe and comply with
the provisions of the Constitutive Act and the IPS, as well as with any
requests from the BoN or instructions contained in resolutions of the
Customer's shareholders which do not conflict with the Fund Manager's duties
or obligations under applicable law or any Compulsory Rules.
6.16. The Fund Manager may delegate part (but not all) of its duties under
this Management Agreement, including the investment management functions, in
each case in accordance with Clause 14.3 to an Associated Company duly
authorised under applicable law to carry out the relevant activities, as well
as terminate at any time such delegation without the prior approval of the
Customer in respect of such termination, provided that the Fund Manager
notifies to the Customer reasonably in advance of such termination.
6.17. The Fund Manager will maintain at all times the capital requirements and
insurance required under AIFM Rules.
6.18. The Fund Manager may, provided it is in full compliance with the
applicable law, carry out the rights, duties and obligations under this
Management Agreement either directly or through the Bucharest Branch in
accordance with the relevant passport notifications carried out by the Fund
Manager to the CSSF.
7. AUTHORIZED TRANSACTIONS
The transactions to be carried out in relation to the Portfolio are subject to
the legal regulations in force, including the Companies Law no. 31/1990, Law
no. 297/2004, Law no. 24/2017, Law no. 243/2019, the AIFM Rules and other
applicable regulations, as well as Law no. 247/2005, GEO no. 81/2007, the
Constitutive Act as well as any other applicable legislation or regulation
replacing, amending or completing the same.
8. ASSET CUSTODY AND THE DEPOSITARY
8.1. The Fund Manager will place the assets of the Customer in
custody according to all applicable legal provisions, including without
limitation the AIFM Law, AIF Law and the AIFM Rules. The Depositary will be
appointed by the Fund Manager after consultation with the BoN, with sufficient
time in advance, on the identity of the proposed Depositary and the terms and
conditions of its appointment.
8.2. The relationship between the Customer (acting through the Fund
Manager) and the Depositary shall be governed by a written depositary
agreement and the Fund Manager shall ensure that such agreement includes
clauses addressing those matters and imposing those obligations, which are
required by the applicable AIFM Rules, Romanian legislation applicable to the
Customer, the Constitutive Act and the IPS.
8.3. All payments due for receipt by the Customer, such as dividends,
interests, sale proceeds, or any with other title, shall be paid directly in
the Customer's account opened at the Depositary. The Fund Manager shall not be
entitled at any time and in any form to hold cash or other assets from the
Portfolio belonging to the Customer in any form.
8.4. The Fund Manager shall include in its periodical reports (annual report,
quarterly reports and semi-annual report) as well in the announcement
('current report') when completing a certain material transaction the use of
proceeds and the calendar for such transaction.
9. FUND MANAGER PERFORMANCE OBJECTIVES, ANNUAL REPORTING
9.1. For the duration of this Management Agreement, the Fund Manager
must manage the Portfolio in accordance with, and must comply with, all the
obligations undertaken under the IPS and seek to achieve the objectives
therein, including (without limitation) the Discount Objective and the NAV
Objective (together the "Performance Objectives"). The Customer and the Fund
Manager acknowledge and agree that there is no guarantee that the Performance
Objectives will be achieved and the Fund Manager does not warrant, undertake
or represent that it will achieve them.
9.2. The Fund Manager will call a BoN meeting to discuss the Discount Control
Mechanism ("DCM") strategy if the Discount stays above 15% for more than half
of the Trading Days in any financial quarter of the Customer. In addition, if
the Discount stays wider than 15% for more than half of the Trading Days in
any two successive financial quarters of the Customer, the Fund Manager will
call a GSM (which would be held no later than the end of the next quarter) at
which the Fund Manager would propose, for the Customer's shareholders'
approval, specific DCM measures pre-agreed with the BoN and which are in line
with the IPS, unless such actions are already pending and soon to be
implemented based on the resolution of the GSM dated in the current quarter or
in the previous year, (for as long as such measures are not limited by
subsequent resolutions of the GSM).
9.3. For the purpose of reviewing the performance of the Fund Manager
during the Relevant Period, (including but not limited to, whether the
Performance Objectives have been achieved) the Fund Manager will hold a GSM
(the "Annual GSM"). Not later than 30 days before the deadline for publication
of the Annual GSM documentation as required by the law, the Fund Manager must
submit to the BoN a report on activities and performance of the Fund Manager
(and each Delegate) in the Relevant Period (the "Performance Report").
9.4. The Performance Report must include, among others:
(a) the report on the fulfilment of the Discount Objective (as
such term is defined in the IPS);
(b) the report on the fulfilment of the NAV Objective (as such
term is defined in the IPS);
(c) the report on the fulfilment of the obligations regarding DCM
as mentioned above at Clause 9.2;
(d) a summary of the regulatory issues affecting the performance
during the Reporting Period;
(e) a summary of market conditions affecting the performance
during the Reporting Period; and
(f) such other matters as the Fund Manager wishes to bring to the
attention of the shareholders in relation to its activities and performance in
the relevant period.
9.6. Following the receipt of the Performance Report, the BoN must
prepare and submit for the information of the shareholders at the Annual GSM a
review of the Performance Report ( the "BoN Review Report") evaluating the
performance of the Fund Manager, as well as any other factors that it deems
relevant. The Performance Report and the BoN Review Report, will be presented
to and reviewed by the shareholders at the annual GSM and will inform their
debate and their vote on any matters pertaining to the GSM.
10. FUND MANAGER REMUNERATION AND EXPENSES
10.1. As remuneration for its services under this Management Agreement, the
Fund Manager shall receive the fees set forth in Annex 1 (Fees). The Fund
Manager shall provide the Customer with a valid certificate of tax residence
for the relevant year under applicable Romanian tax provisions, before issuing
any invoices to the Customer for such fees. Unless expressly stated otherwise,
the fees and any other amounts payable to the Fund Manager under this
Management Agreement are quoted exclusive of any tax which may be applicable
in any relevant jurisdiction, including any value-added tax chargeable under
or pursuant to Romanian value-added tax laws and regulations or relevant EU
Directives.
10.2. Save as expressly provided otherwise in this Management Agreement,
all costs and expenses incurred by the Fund Manager, including through the
Bucharest Branch, in the performance of their functions shall not be for the
account of the Customer but shall be borne by the Fund Manager. However, the
Fund Manager may issue invoices directly to the Customer to recharge expenses
incurred by it related to the activities performed pursuant to Clause 10.3 and
Clause 14.3 with the consent of the BoN.
10.3. The Customer shall bear, or shall reimburse the Fund Manager,
where the Fund Manager has incurred them in advance, the following expenses:
(a) expenses related to the payment of fees owed to the Depositary;
(b) expenses related to intermediaries including expenses related to the
financial advisory services in connection with the issue, purchase, sale or
transfer of listed and unlisted securities or financial instruments,
(c) expenses related to taxes and fees owed to the FSA or other public
authorities, according to applicable legislation, as well as expenses or
charges imposed to the Customer by any tax authority related to the expenses
in this clause or otherwise applicable to the running of the business of the
Customer;
(d) expenses related to the financial audit performed on the Customer and
any other audits or valuations required by the legislation in force applicable
to the Customer (for clarity, these expenses relate to the fair value
measurement of the Fund's portfolio for the purpose of IFRS accounting and
financial statements preparation and of NAV calculation);
(e) expenses related to the admission to trading of the financial
instruments issued by the Customer, and any subsequent issues or offerings;
expenses with intermediaries and professional advisors in relation to
arranging and maintaining the listing;
(f) expenses related to investor relations and public relations in the
interest of the Customer;
(g) expenses related to ongoing reporting and disclosure obligations
according to legislation in force;
(h) expenses related to the organising of any GSM and communications with
the shareholders and to the payment of fees for registrar services and
services related to distributions to shareholders;
(i) expenses related to the payment of taxes and fees owed to the
Bucharest Stock Exchange, London Stock Exchange and any other exchange on
which the financial instruments of the Customer or global depositary receipts
or depositary interests corresponding to shares of the Customer shall be
admitted to trading;
(j) expenses related to the registration with the Trade Registry or
documents issued by the Trade Registry;
(k) expenses related to the payment of fees owed to the banks for banking
services performed for the Customer;
(l) expenses related to appointing legal advisers and other advisors to
act on behalf of the Customer;
(m) expenses related to contracts with external service providers
existing as of execution of this Management Agreement until the expiry or
termination of the contract;
(n) expenses related to remuneration, transport and accommodation of the
members of the BoN (in relation to their services and attendance at meetings,
in accordance with the Constitutive Act, the mandate agreements and any
applicable internal regulations) and for independent persons (not employees of
the Fund Manager) acting as representatives of the Customer on the corporate
bodies of companies in the Portfolio, where appropriate; and
(o) expenses relating to printing costs for the Customer's documentation;
10.4. Save as provided in Clause 10.3 above, the Fund Manager (and any
Associated Company who acts as a Delegate in accordance with clause 14.3)
shall be liable for the following out of pocket expenses incurred when
performing its duties hereunder, including, but not limited to:
(i) expenses in connection with mailing and telephone, except
for letters to shareholders;
(ii) expenses in connection with business travel and
accommodation, except the expenses related to all investor relations
activities, GSM and BoN meetings;
(iii) expenses in connection with salaries, bonuses and all other
remunerations granted by the Fund Manager (or any Associated Company who acts
as a Delegate in accordance with clause 14.3) to its employees and
collaborators; and
(iv) all other expenses necessary to the functioning of the Fund
Manager (or any Associated Company who acts as a Delegate in accordance with
clause 14.3).
10.5. In performing its obligations under this Management Agreement, the Fund
Manager shall not use (and shall procure that no Associated Company who acts
as a Delegate in accordance with clause 14.3 uses) Soft Dollar Practices. All
transactions in connection to the Portfolio shall be consistent with the
principle of best execution.
10.5.1. An overview of Best Execution Policy at the level of the Fund
Manager's Group can be found at:
https://www.franklintempleton.lu/about-us/regulatory-information#order-execution
(https://www.franklintempleton.lu/about-us/regulatory-information#order-execution)
. The Customer confirms that it has read and understood the Best Execution
Policy Overview - as available on the address specific above as at the date of
this Management Agreement. Notwithstanding the foregoing, the Customer
considers and the Fund Manager agrees that the Best Execution Policy must be
read and understood together with all applicable requirements imposed under
MiFID II regulation in force. The Customer agrees that the Fund Manager may
trade outside of a regulated market or multilateral trading facility.
10.5.2. In effecting transactions for the Portfolio companies, the Fund
Manager will at all times comply with the Fund Manager's Group Best Execution
Policy, as specified in Clause 10.5.1 above, and in particular will act in the
best interests of the Customer and comply with any applicable obligations
regarding best execution under the applicable regulations in force.
10.6. Any director's fees and other fees received by the Fund Manager's
or any officers, employees, agents, representatives or delegates of any
Associated Company who acts as a Delegate in accordance with clause 14.3 from
any of the Portfolio companies will be either paid over to the Customer or
deducted from the management fee. For the avoidance of doubt, the reference to
"fees" in the previous sentence does not apply to payments by Portfolio
companies to arrange commercially reasonable insurance coverage on behalf of
such persons for any liabilities arising from acting as a director or officer
of the Portfolio company's board and, where Portfolio companies fail to
arrange such insurance, this shall be arranged by the Fund Manager or any
Associated Company who acts as a Delegate in accordance with clause 14.3,
acting on behalf of the Fund, at the Fund's expense. The Fund Manager
undertakes to observe at all times and otherwise follow the remuneration rules
and guidelines applicable in accordance with the AIFM Rules.
10.7. The Fund Manager shall not (and shall procure no Associated Company
who acts as a Delegate in accordance with clause 14.3 shall) claim any lien,
right of retention, security interest or set-off over the Portfolio or any
assets or moneys in it.
11. PROVISION OF INFORMATION TO THE CUSTOMER AND ITS
REPRESENTATIVES
11.1. In addition to the obligations under Clause 9, the Fund Manager
will provide the Customer with such analysis of performance and periodical
tabular presentations in connection to the Portfolio as reasonably requested
by the Customer. At least twice in a calendar year the Fund Manager will make
a presentation to the Customer in respect of the Portfolio for the previous
six months and the Customer may request any documents with a view to
discussing market factors, the Portfolio and the operation of this Management
Agreement.
11.2. The Fund Manager shall provide to the Customer, quarterly and/or
upon request, written documents/presentations evidencing the transactions
entered into between the Fund Manager, on behalf of the Customer, and third
parties in connection with the Portfolio.
11.3. The Fund Manager shall keep accurate and detailed records of all
investments, receipts, disbursements and other transactions relating to the
Portfolio, which it shall send to the Customer in a monthly report.
11.4. The Fund Manager shall supply on demand to the Customer copies of
all accounting entries and other records relating to Customer's Portfolio. The
Fund Manager will extend its normal working hours as and when reasonably
requested by the Customer and will provide, without unnecessary delay, all
necessary facilities and assistance to the Customer's auditors and other
authorised representatives, including representatives of its shareholders
and/or of the BoN, to audit and verify the records booked by the Fund Manager
relating to any of the financial instruments, securities and other assets and
liabilities held by the Customer, according to the applicable legislation. The
scope of the audit shall not be limited by the Fund Manager and may include
the examination of the Fund's accounting system, procedures, records, internal
controls, and any other documents or information in the Fund Manager's
possession to the extent relevant to the Customer (and subject to redaction to
the extent required to respect the confidentiality of other clients) that the
Customer or the auditor deems necessary acting reasonably to verify in order
to facilitate formulation by the Customer of any opinion on the costs, both
direct and indirect, or other amounts billed to the Customer, the performance
of the Customer's Portfolio and on the Fund Manager. The Fund Manager shall
co-operate as necessary and facilitate the performance of any such audits,
including securing for the aforementioned auditors and other authorised
representatives assistance from the Fund Manager's compliance officer and
internal auditors.
11.5. The Fund Manager shall report to the Customer within two business
days of its discovery of any non-compliance with or breach of the provisions
of this Management Agreement (including the Annexes) and shall take all steps
required to remedy such non-compliance as soon as possible.
11.6. The Fund Manager will liaise as necessary with the Depositary to
enable the Depositary, on the Customer's behalf, to fulfil any obligations to
disclose shareholdings in companies in which the Portfolio is invested in
accordance with relevant legislation and will provide timely information to
the Depositary for this purpose.
12. CONFIDENTIALITY AND ACTS WITH FISCAL CONSEQUENCES
12.1. The Fund Manager shall, except only in so far as:
(a) otherwise required by laws or regulations; or
(b) necessary for effecting settlement and the performance of
operations with the Depositary and any sub-custodian for the assets of the
Portfolio; or
(c) reasonably required for the proper performance of the
services and for the enforcement of its rights and obligations under this
Management Agreement; or
(d) otherwise permitted in writing by the Customer; or
(e) necessary for the purpose of setting up foreign exchange
facilities (disclosure in this case shall be limited to credit and compliance
departments of the banks),
ensure that all matters relating to the Portfolio and the Customer will be
kept strictly confidential. Before the Fund Manager discloses confidential
information under sub-clause (a) above, it shall inform the Customer to this
end.
The Fund Manager shall procure that the Delegate provides to the Customer a
confidentiality undertaking in the relevant delegation agreement in respect of
all matters relating to the Portfolio, its role as a Delegate, in form and
substance acceptable to the BoN.
12.2. The Fund Manager shall not disclose information relating to the
Portfolio and the Customer to other companies of the Fund Manager's Group
(except to and to the extent required for their role as Delegates) who carry
on to a material extent any activities other than investment management
outside those members of staff engaged in investment management functions,
except in circumstances permitted in Clause 12.1. (a)-(d). The Fund Manager
shall (and shall procure that any Associated Company who acts as a Delegate in
accordance with clause 14.3 shall) in any event operate confidentiality
procedures which oblige its staff only to disclose information relating to the
Portfolio and the Customer within the Fund Manager (or any Associated Company
who acts as a Delegate in accordance with clause 14.3) on a "need to know"
basis and to observe strictest confidentiality in relation to price sensitive
information.
12.3. The Fund Manager shall not (and shall procure that no Associated
Company who acts as a Delegate in accordance with clause 14.3 shall) knowingly
take or omit to take any action which might prejudice the interests of the
Customer with respect to the applicable tax legislation. Without prejudice to
the generality of the foregoing, the Fund Manager may (i) create any new
taxable presence of the Customer, (ii) subject the Customer to new tax filing
or reporting obligations, or (iii) expose the Customer to any significant tax
charge outside the ordinary course of business, in each case only if the Fund
Manager, after due diligence and careful investigation, considers it to be in
the best interests of the Customer.
13. TERMINATION
13.1 This Management Agreement may be terminated in accordance with
this Clause 13 and will automatically terminate with immediate effect upon (i)
the expiry of the period set out in Clause 15, always subject to Clause 13.5
and (ii) the expiry of any of the terms set out in Clause 13.9.
13.2. The Customer may unilaterally and at its sole discretion terminate this
Management Agreement, at any time, on three months' prior written notice to
the Fund Manager, based on an OGM resolution for approving the simultaneous
termination of the mandate and of this Management Agreement. For the avoidance
of any doubt, termination of the mandate and this Management Agreement in
accordance with this Clause 13.2 will not entitle the Fund Manager to any
Damages or the payment of any amounts other than the fees to be paid in
accordance with Clause 13.6 below. This is without prejudice to Clause 17.4(c)
but, for the avoidance of any doubt, such Clause 17.4(c) will never extend to
Damages for termination in accordance with this Clause 13.2.
13.3 The Fund Manager may terminate this Management Agreement before
its term and resign its mandate as Sole Director and alternative investment
fund manager with six months' prior written notice. Not later than five
business days following the Termination Notice Date, but subject to timely
approval of the GSM agenda by the BoN, the Fund Manager will call the OGM
having on the agenda the approval of the procedure for the selection of a new
Sole Director and Fund Manager. Such procedure will be prepared by the Fund
Manager and agreed with the BoN before its submission to an OGM for approval.
13.4 The Fund Manager may terminate this Management Agreement before
its term and resign its mandate as Sole Director and alternative investment
fund manager by as much prior written notice to the Customer as is reasonably
practicable, if:
(a) the termination has been required by, or as a result of, a
binding decision issued by any competent regulatory authority; or
(b) if material obligations under this Management Agreement can
no longer be fulfilled due to changes in the applicable law compared to the
date of signing of this Management Agreement, provided that the Fund Manager
has used reasonable endeavours to comply with or (if it is not possible for
the Fund Manager to do so) to propose a reasonable alternative arrangement
involving an Affiliate which would comply with the relevant law, in accordance
with Clause 14.4 below, but despite those efforts compliance would not be
possible; or
(c) if the Customer becomes the subject of any definitive winding
up order.
13.5 In the event a Termination Notice is sent (except under Clause
13.4) or in the event of the expiry of the period mentioned in Clause 15, the
Fund Manager shall (except to the extent otherwise required in writing by the
Customer) continue to carry out all such acts as it is empowered and required
to do by any part of this Management Agreement until the New Appointment Date
provided that this obligation is subject to the continuing satisfaction of the
following cumulative conditions:
(a) the terms of this Management Agreement (including, without
limitation, all authorisations from the Customer to the Fund Manager and all
terms of remuneration and indemnity in favour of the Fund Manager) continue to
apply, except that from the expiry of the period mentioned in Clause 15, the
Fund Manager shall receive the fees set forth as per Clause 5 of Annex 1
(Fees);
(b) the shareholders at a GSM approve resolutions proposed by the
Fund Manager to ratify and approve, to the extent legally possible:
(i) the Fund Manager's mandate as Sole Director and alternative
investment fund manager of the Customer, with effect until the New Appointment
Date; and
(ii) all legal acts (including decisions and contracts)
concluded, adopted and issued on behalf of the Customer by the Fund Manager
and any implementation acts, facts and operations based on such, including the
management of the Customer under a unitary system, but, in each case, without
prejudice to any grounds for termination given by the Customer in any prior
Termination Notice and to any rights of the Customer under Clause 17
hereunder; for the avoidance of any doubt, the condition under this paragraph
(b) will not apply in the event that the ratification from the GSM is
requested for acts performed by the Manager in breach of its legal and/or
contractual obligations as Sole Director and Fund Manager;
(c) the BoN shall use all reasonable endeavours to ensure that
the New Appointment Date occurs as soon as possible; and
(d) the mandate as Sole Director and alternative investment fund
manager does not end between the Termination Notice Date and the New
Appointment Date, unless (i) such ending is caused by deliberate actions of
the Fund Manager or (ii) the conditions provided under Clause 13.9. item (ii)
are met, in which cases the condition under this paragraph (d) will not apply.
13.6 Termination of this Management Agreement shall not terminate
rights and obligations which are capable of surviving termination, including
in particular, duties of the Fund Manager to report to the Customer, to
provide information to the Customer and to keep matters confidential and for
the Customer to indemnify the Fund Manager in accordance with Clause 17.4(c),
which, for the avoidance of any doubt, will never extend to Damages for
termination in accordance with this Clause 13. Transactions in progress shall
be dealt with in accordance with the Customer's instructions or, in the
absence of such instructions, having regard to the best interests of the
Portfolio.
13.7. In the event a Termination Notice is sent, the Fund Manager shall
be paid in respect of its services hereunder on a pro rata basis with the
duration of the provision of these services in accordance with Clause 13.5
above, in compliance with the Annex 1 (Fees), up to the New Appointment Date.
For the avoidance of doubt, in such a case, the Fund Manager's pro rata
remuneration will be for a period of at least 3 months (regardless of whether
the New Appointment Date is sooner).
13.8. In case of:
(i) fraud, wilful default or negligence by the Fund Manager in performing the
obligations assumed under this Management Agreement; or
(ii) material breach by the Fund Manager of obligations assumed under this
Management Agreement that may bring a serious loss to the Customer and that,
if capable of remedy, have not been remedied within 10 business days of a
notice of breach, this Management Agreement may be terminated by the Customer
with full right with immediate prior notice but without any court
intervention.
13.9. Notwithstanding Clause 13.5, in no circumstances shall the Fund
Manager be obliged to continue its mandate as a Fund Manager and compliance
with this Management Agreement beyond (i) the date twelve months from the
Termination Notice Date or (ii) the expiry of a period of six months as of the
date of the OGM which has selected and/or appointed a new fund manager and
sole director, regardless of whether the New Appointment Date has occurred,
unless otherwise expressly agreed in writing by the Parties.
14. AMENDMENT OF THIS MANAGEMENT AGREEMENT, ASSIGNMENT OF RIGHTS
AND DELEGATION
14.1. This Management Agreement may be amended at any time by an
addendum signed by the legal representatives of the Fund Manager and of the
Customer, with the prior approval of the GSM and the endorsement of the
competent authority, if required by applicable law.
14.2. This Management Agreement is concluded in consideration of the
person of the Fund Manager and is personal to the Fund Manager. The Fund
Manager shall not be entitled to assign or to transfer any of its rights or
obligations hereunder save as expressly provided in this Management Agreement.
14.3. (a) The Fund Manager may delegate to an Associated Company
performance on its behalf of the portfolio management functions as well as
administration and marketing activities which the Fund Manager has agreed to
render to the Customer, subject in each case to entering into a delegation
agreement, which has received the prior written approval of the BoN and which
the Fund Manager has ensured that it is in compliance with the AIFM Rules. The
performance of each Delegate of the delegated obligations and duties shall be
on the terms and be subject to the conditions contained in this Management
Agreement and shall be without prejudice to the obligations and
responsibilities of the Fund Manager to the Customer under this Management
Agreement.
(b) The Fund Manager shall be responsible for the acts or omissions of such
Delegate, if any, in performing such functions, activities and services, and
despite any such delegation, shall remain primarily liable for its obligations
under this Management Agreement. Any such delegation by the Fund Manager shall
not involve any additional cost to the Customer, unless expressly authorised
in writing by the Customer, and the appointment of each Delegate shall be
subject to the prior written approval of the BoN and the prior endorsement of
any regulatory authority required by applicable legislation.
(c) The Fund Manager shall not delegate functions so that it is no longer
the Customer's manager and to the extent that it becomes a letter-box entity
within the meaning of AIFM Rules.
(d) The Fund Manager shall procure that each Delegate does not delegate any
functions delegated to it according to this Management Agreement without the
BoN's prior written approval and the endorsement of any regulatory authority
required by applicable law. This Clause 14 shall apply, mutatis mutandis, to
any such delegation by a Delegate, and the Fund Manager shall continue to
remain liable towards the Customer with respect to any such further
delegation.
14.4 To the extent that changes in applicable law or regulation
following the signing of this Management Agreement impose requirements on the
Fund Manager in the performance of this Management Agreement with which the
Fund Manager cannot comply, the Fund Manager undertakes to use reasonable
endeavours to continue performance of the services to the extent legally
possible and, to the extent not legally possible, to procure that a reputable
Affiliate shall agree to provide the same services on substantially the same
terms to the Customer. For the avoidance of any doubt, the appointment of such
Affiliate, as well as the implementation of any amendments to this Management
Agreement or any other alternative arrangement proposed by the Fund Manager
are subject to consent by the Customer, at its full discretion and nothing in
this Management Agreement shall be construed as an expressed prior consent in
this respect.
15. DURATION OF THIS MANAGEMENT AGREEMENT
15.1. Subject to the provisions of Clause 13 regarding early termination
of this Management Agreement, the duration of this Management Agreement and of
the Fund Manager and the Sole Director mandates contained in this Management
Agreement is for a period of one (1) year, simultaneously starting on 1 April
2024.
16. COMMUNICATIONS, INSTRUCTIONS, NOTIFICATIONS
16.1. Subject to a GSM resolution to the contrary, as regards the
relationship between the Customer and the Fund Manager/Sole Director under or
in relation to this Management Agreement, any reference in this Management
Agreement to the Customer shall be deemed a reference to the BoN acting as the
representative of the Customer towards the Fund Manager/Sole Director. For the
avoidance of doubt, any right or benefit of the Customer under this Management
Agreement in relation to or against the Fund Manager/Sole Director shall be
exercised by the BoN acting in the name and on behalf of the Customer.
16.2. All notifications and other communications from the Customer shall
be made by BoN to the Fund Manager.
16.3. For the purpose of any communication between the Customer and the
Fund Manager in relation to this Management Agreement, the Customer shall be
represented by BoN.
16.4. The Fund Manager shall be entitled to rely on any notification or
communication given by the BoN above without further enquiry, provided the
instruction, notification or communication is given in one of the ways
permitted in this Management Agreement and provided that oral instructions may
not be relied upon by the Fund Manager.
16.5. All notices or any other communication to be given under this
Management Agreement must be in writing, in Romanian or English, and must be:
(i) personally delivered; (ii) delivered by fax; (iii) sent by courier with
return receipt; or (iv) by e-mail.
16.6. The Parties details for transmitting notifications or any other
communications related to the present Management Agreement are the following:
(a) If addressed to the Fund Manager:
Address:
Premium Point Building
76-80 Buzeşti Street, 7th -8th floor, Bucharest
District 1, Postal Code 011017
Fax: (021) 200 96 31/32
To the attention of: Mr. Johan Meyer
(b) If addressed to the Customer:
At the contact details provided by the representative of the Customer.
17. PARTIES' LIABILITIES
17.1. The Fund Manager is liable for any Damages suffered by the
Customer as a result of:
a) any actual or alleged act, error, omission, misleading statement or
breach of fiduciary duty or other duty committed in the performance of, or
failure to perform its administrative functions by the Fund Manager as sole
director of the Customer in accordance with the Constitutive Act, the
provisions of the Companies Law, the Law No. 297/2004, Law no. 24/2017 and the
Romanian Civil Code;
b) infringement by the Fund Manager of the applicable legislation;
c) infringement by the Fund Manager of the Customer's internal rules,
including the investment restrictions under the IPS;
d) Fund Manager's fraud or fraudulent misrepresentation;
e) wilful default by the Fund Manager in performing this Management
Agreement;
f) negligence by the Fund Manager in the performance of this Management
Agreement's obligations;
g) material breach by the Fund Manager of this Management Agreement; or
h) death or personal injury caused by the Fund Manager's negligence.
17.2. The Fund Manager's liability towards the Customer and its
investors shall not be affected by any delegation. The Fund Manager shall also
be liable for the negligence, wilful default, fraud or material breach of this
Management Agreement by its Delegates, or its or their employees. The Fund
Manager shall exercise all due care in its selection, use and monitoring of
Delegates and shall indemnify and hold harmless the Customer from and against
any Damages suffered or incurred by the Customer and caused by any failure to
exercise all due care. The Fund Manager shall make reasonable efforts to
resume normal performance of the services following, and to mitigate the
consequences of, an event beyond its and its Delegates' reasonable control.
17.3. The Fund Manager shall not be liable for the actions of brokers
(not being Associated Companies of the Fund Manager) save to the extent that
the Fund Manager has acted negligently in selecting, contracting or monitoring
or using such persons. Without prejudice to Clause 6.11 above, in selecting a
broker for a particular transaction, the Fund Manager shall attempt to obtain
best execution for the Customer. Notwithstanding this responsibility, the Fund
Manager will pursue counterparties on the Customer's behalf and account to the
Customer for all recoveries against such counterparties.
17.4. (a) The Fund Manager agrees to indemnify and hold harmless each
Indemnified Party from and against any and all Damages, to which the
Indemnified Party may become subject under law, including allegations of
negligence or breach of fiduciary duty, or otherwise, insofar as such Damages
are caused by or arise out of: (i) wilful misconduct of the Fund Manager or
any of its Delegates (or its or their employees); (ii) breach by the Fund
Manager or any of its Delegates (or its or their employees) of any
representation or warranty made to the Customer relating to the services
hereunder or in respect of any AIFM Rules; (iii) breach or non-fulfilment by
the Fund Manager or any of its Delegates (or its or their employees) of any
obligation pursuant to this Management Agreement or the investment
restrictions under the IPS; (iv) any untrue statement of a material fact
contained in information furnished to an Indemnified Party by the Fund Manager
or any of its Delegates (or its or their employees) or the omission to state a
material fact necessary in order to make the statements not misleading in
light of the circumstances under which they were made; (v) breach by the Fund
Manager or any of its Delegates (or its or their employees) of any fiduciary
duty or infringement of applicable law.
(b) The Fund Manager shall indemnify and hold harmless each
Indemnified Party for all Damages incurred by such Indemnified Party, in
connection with any investigation, claim, action, suit, proceeding, demand or
judgment, which is subject to any of the indemnities in this Clause 17.4.
(c) Save to the extent arising from Fund Manager's or its
employees' negligence, fraud, wilful default or breach of this Management
Agreement, the investment restrictions under the IPS or the applicable
legislation or that of any of its employees or Delegates, Associated Companies
or their respective employees, the Customer agrees to indemnify and hold
harmless the Fund Manager from and against Damages arising from following the
Customer's specific instructions (including, for the avoidance of doubt,
informed decisions of the GSM in addition to instructions from the BoN),
provided that:
(i) the Fund Manager notifies the Customer in writing by fax or
email (to such fax or email address as the BoN shall have notified the Fund
Manager), as soon as reasonably practicable, but no later than 3 business days
after becoming aware of the relevant Damage;
(ii) the Fund Manager does not make any admission of liability or
agree to any settlement or compromise of any claim for which indemnity is
sought without the prior written consent of the Customer;
(iii) on a prompt and timely basis the Fund Manager shall have
provided all such documents, information and assistance and have done all such
acts and things as the Customer may have reasonably required in order to
assist the Customer in relation to such claims; and
(iv) the Fund Manager will provide evidence that it has taken all
reasonable steps necessary to mitigate such Damages, including by advising the
Customer in writing against such instructions, prior to the notification
mentioned at point (i) above.
17.5. Subject to observance of clause 6.17, the Fund Manager shall
maintain the following insurance:
(a) Professional Liability to provide against any failure to
duly perform this Management Agreement if that failure is due to a wrongful
act, negligent act, error, omission for an insured amount of at least €50
million;
(b) Fidelity Bond to provide against any failure to account to
the Customer for any money or investments if that failure is due to: (i)
dishonest or fraudulent act of any employee; (ii) forgery of instructions,
cheques, security or currency and damage caused to office premises and
contents due to burglary or vandalism; and (iii) electronic and computer crime
for an insured amount of at least €50 million.
17.6. Upon request of the Customer, the Fund Manager shall provide to the
Customer evidence that the premium for each insurance described in Clause 17.5
above has been paid.
17.7. The Fund Manager's liability towards the Customer and the shareholders
shall not be affected by the fact that the Fund Manager has delegated
functions to a third party, or by any further sub-delegation.
18. FORCE MAJEURE
18.1 If a Party (the "Affected Party") is, or could reasonably be
expected to be, materially prevented, hindered or delayed from performing any
of its obligations under this Management Agreement by reason of a Force
Majeure Event, such obligations of the Affected Party and any corresponding or
related obligations of the other Party shall remain in effect but shall be
suspended without liability and without having occurred by virtue of the Force
Majeure Event a breach of this Management Agreement for a period equal to the
duration of the Force Majeure Event, provided that:
(i) as soon as reasonably practicable after the start of the Force Majeure
Event, to the extent permitted by the applicable law, the Affected Party
notifies the other Party in writing of the act, event or circumstance relied
on, the date on which such act, event or circumstance commenced and the effect
of the Force Majeure Event on the Affected Party's ability to perform its
obligations under this Management Agreement; and
(ii) the Affected Party makes all reasonable efforts to mitigate the effects
of the Force Majeure Event on the performance of its obligations under this
Management Agreement and to the extent permitted by the applicable law
furnishes written reports every 10 business days to the other Party on its
progress in doing so, and to the extent permitted by the applicable law
provides any information relating to the Force Majeure Event and its effects
that the other Party may reasonably request.
18.2 Immediately after the end of the Force Majeure Event, the
Affected Party, to the extent permitted by the applicable law, shall notify
the other Party in writing that the Force Majeure Event has ended and shall
resume performance of its obligations under this Management Agreement.
18.3 No Party shall be released from any of its obligations under this
Management Agreement as a result of a Force Majeure Event, including, without
limitation, the Customer's obligations to any counterparty or broker for any
transaction effected by the Fund Manager pursuant to this Management
Agreement, and this Management Agreement shall remain in effect for the
duration of the Force Majeure Event.
18.4 If any Force Majeure Event shall substantially impair the ability
of the Fund Manager to carry out its duties under this Management Agreement,
the Customer shall be entitled to appoint a replacement manager until such
event is rectified. If the Fund Manager remains unable to deliver (whether
through Delegates or outsources or otherwise) substantially all its services
under this Management Agreement after three months from the appointment of the
relevant replacement manager have elapsed, the Customer shall be entitled to
terminate the appointment of the Fund Manager on immediate notice.
18.5 For the avoidance of doubt, no Party may rescind, terminate or
treat as void, voidable or unenforceable this Management Agreement on the
basis of any non-performance by other Party arising from a Force Majeure
Event.
19. APPLICABLE LAW AND JURISDICTION
19.1. This Management Agreement is governed by and shall be construed in
accordance with the laws of England & Wales.
19.2. Dispute Resolution
(a) Any dispute or difference arising out of or in connection
with this Management Agreement, including without limitation any disputes
regarding its valid conclusion, existence, interpretation, nullity, breach,
amendment, termination in any way of this Management Agreement (each a
"Dispute"), that cannot be resolved by amicable negotiations within a
reasonable period of time from the notice served by any of the Parties
relating to the potential Dispute shall be finally resolved by the LCIA
(London Court of International Arbitration) under the LCIA Rules of
Arbitration. The Party requesting the initiation of the arbitration
proceedings shall serve the other Party with a written notice that such
proceedings will be initiated.
(b) The place of the arbitration shall be London, the language of
the arbitration shall be English, and the tribunal shall consist of three (3)
arbitrators appointed in accordance with the LCIA Rules.
(c) Any award of the arbitral tribunal rendered in accordance
with this clause shall be final and binding on the Parties.
(d) The award shall be voluntarily executed by the Parties in any
jurisdiction, or else award enforcement proceedings may by instituted in any
court in the country where the recognition of such arbitration award is
requested.
(e) In the event of a Dispute, the Party prevailing in such
Disputes shall be entitled to recover all expenses, including without
limitation reasonable legal fees and expenses and arbitral and court-related
costs, incurred in ascertaining such Party's rights under this Management
Agreement and preparation of application and enforcement of such Party's
rights, as determined by the arbitration tribunal, whether or not it was
necessary for such Party to institute any enforcement proceedings to achieving
the enforcement of its rights.
19.3. Notwithstanding the above, the Fund Manager acknowledges that any
decision of the Customer to terminate the Fund Manager's mandate as Sole
Director will take effect pursuant to the provisions of Clause 13 above.
20. REPRESENTATIONS AND WARRANTIES
20.1. The Fund Manager represents and warrants to the Customer that at
all times:
(i) the Fund Manager has full power and authority to execute,
deliver and to carry out the terms of this Management Agreement and that this
Management Agreement constitutes a legal, valid and binding obligation of the
Fund Manager;
(ii) the Fund Manager is duly incorporated in Luxembourg and has
received relevant authorisations to passport its investment management
services into Romania in accordance with the AIFMD and it has at the time of
entering into this Management Agreement at least the minimum level of capital
and own funds required under the AIFM Rules;
(iii) the Fund Manager has the legal capacity, as per the law
applicable in its home country and Romania, as the case may be, and has
received all relevant authorisations and approvals by each relevant authority
to provide investment management and other services of the type contemplated
under this Management Agreement to an entity such as the Customer;
(iv) the Fund Manager has special knowledge and skill relevant to
the services for which it is engaged under this Management Agreement;
(v) the Fund Manager, is not subject of any regulatory or
governmental actions, claims or investigations relevant to its investment
management activities which could impair its ability to carry out the terms of
this Management Agreement;
(vi) neither the Fund Manager nor any of its subsidiaries,
Associated Companies, divisions or other affiliates involved with the affairs
of the Customer has ever had its registration revoked, suspended or its
activities restricted;
(vii) The Fund Manager maintains adequate back up and disaster
recovery systems and procedures, conflicts of interest policies, risk
management policies and any other policies or procedures required by the
applicable legislation with respect to the activity carried out by the Fund
Manager as regards the Customer;
(viii) The Fund Manager takes investment decisions solely with
reference to the interests of the respective funds it manages;
(ix) its financial statements are subject to regular audit by
financial auditors; and
(x) to the best of the Fund Manager's knowledge, neither the
execution, delivery, nor performance of this Management Agreement by the Fund
Manager will violate any law, statute, order, rule, or regulation of, or
judgment, order or decree by, any federal, state, local, or foreign court or
governmental authority, domestic or foreign, to which the Fund Manager is
subject nor will the same constitute a breach of, or default under, provisions
of any agreement or contract to which it is a party or by which it is bound.
The Fund Manager shall notify the Customer forthwith of any event or matter,
which would, if these warranties were repeated, render them untrue, inaccurate
or misleading.
20.2. For the duration of this Management Agreement the Fund Manager
undertakes that if more than half of the Key Employees give notice to
terminate their employment at the same time, the Fund Manager shall promptly
notify the Board of Nominees of this event and will consult with the Board of
Nominees when formulating its plan for replacements. If after 6 months a
replacement plan has not been agreed between the Fund Manager and the Board of
Nominees, the Board of Nominees may recommend to the shareholders the
continuation or termination of this Agreement.
20.3. The Fund Manager has in place a competitive remuneration scheme
including a 'team-share' mechanism for various employees of the FTIS Bucharest
Branch all of which is subject to the remuneration rules as set out under the
AIFM Rules. Under the AIFM's remuneration policy it will ensure that the
appropriate employees in the FTIS Bucharest Branch are properly remunerated,
including but not limited to a significant proportion of the distribution fee.
Any applicable variable remuneration is linked to the risk and performance of
the Fund, and subject to any endorsement of any competent authority (as
required). The AIFM remuneration policy together with any relevant guidelines
will be made available from time to time to the Board of Nominees.
20.4. The Fund Manager will provide on annual basis, within 30 days from the
beginning of the calendar year, a list with portfolio managers, the main
persons with responsibilities in respect to the Portfolio, and senior staff
responsible for setting the business and investment policy within the Fund
Manager. In case of a need to change a portfolio manager or a main person with
responsibilities in respect of the Portfolio, the replacement shall have equal
or superior qualifications and professional experience and similar time
allocation for the Customer.
20.5. By this Management Agreement, the Customer represents and certifies
that it is the legal owner of the assets comprised in the Portfolio, as at the
signing date of this Management Agreement.
20.6. The Customer warrants that on the date this Management Agreement is
signed, the Portfolio is free from any charge, lien, pledge or encumbrance
other than those resulting from normal custody and settlement arrangements or
through action or omission of the Fund Manager under its previous mandate as
fund manager with the Customer. If the Customer shall create in the future or
be informed about the creation of any charge, lien, pledge or encumbrance
(other than through action of the Fund Manager) which may affect the Fund
Manager's freedom to trade in such securities, it undertakes that it will
inform the Fund Manager of such action as soon as reasonably practicable.
20.7. The Customer, in the form of its BoN and shareholders, represents that
it took all reasonable steps to approve and execute all such documents and to
give all authorizations and consents as are reasonably necessary to have the
necessary capacity and authority to enter into this Management Agreement. This
representation is subject to all information publicly available as regards the
corporate decisions taken by the Customer as of its incorporation.
21. DATA PROTECTION
21.1 The Parties hereby confirm that, by reference to different personal data
flows resulting from or related to the Management Agreement,
A. they act in their capacity of independent controllers of personal data
that they respectively process. In connection with such processing, the
Parties confirm that they do not hold the capacity of joint controllers and
preclude any form of mutual or joint liability toward third parties as regards
the personal data processing.
The Parties confirm that, in connection with the performance of the Management
Agreement, certain personal data (e.g., including data of the legal or
conventional representatives of each Party, contact persons/ collaborators/
subcontractors, as well as personal data in relation to processing activities
in the context of certain services by reference to which, on a case by case
basis, the Parties qualify as independent data controllers) may be processed
by each of them acting as independent data controllers, including by transfer
abroad, for the purpose of monitoring the interactions between the Fund
Manager and the Customer and in general for the performance of the Management
Agreement.
Each Party undertakes to comply with its obligations under the Data Protection
Laws in relation to such personal data it processes in relation to this
Management Agreement including amongst others, informing and obtaining the
relevant consent from the data subjects, where required and as incumbent upon
it under the Data Protection Laws, or otherwise substantiating a relevant
lawful basis for processing, without that creating or leading to a contractual
liability of one Party towards the other in relation to their respective
obligations as independent data controllers.
B. they act as data controller (the Customer) - data processor (Fund
Manager) in relation to those services which involve FP Data processing for
the purpose and means of processing set by the Customer, as controller.
The Fund Manager stores on its computer system and processes FP Data in
connection with the implementation of its mandate. The Customer authorises the
Fund Manager to perform such FP Data processing and recognises that the Fund
Manager is free to use the FP Data, but only for the purposes of performing
this Management Agreement and of the implementation of its mandate in
accordance with the law.
The Parties confirm that the Fund Manager, acting as data processor, when
processing FP Data on behalf of the Customer in connection with the Management
Agreement (including personal data relating to investors natural persons to
the extent the purpose and means of processing are set by the Customer) will
only act based on the Customer's documented instructions and will observe and
apply the security measures provided by the Data Protection Laws (including to
apply the adequate technical and organizational measures in order to protect
the FP Data against accidental or unlawful destruction, loss, alteration,
disclosure or unauthorized access, notably if the respective processing
involves the data's transmission within a network, as well as against any
other form of illegal processing).
Specifically in consideration of the General Data Protection Regulation, when
acting as data processor, the Fund Manager undertakes to:
a) process the FP Data only on documented instructions from the Customer,
including with regard to transfers of FP Data to a third country or an
international organisation, unless required to do so by European Union or
Member State law to which the Fund Manager is subject; in such a case, the
Fund Manager shall inform the Customer of that legal requirement before
processing, unless that law prohibits such information on important grounds of
public interest;
b) ensure that persons authorised to process the FP Data have committed
themselves to confidentiality or are under an appropriate statutory obligation
of confidentiality;
c) take all measures required pursuant to Article 32 of the General Data
Protection Regulation;
d) respect the conditions referred to in the General Data Protection
Regulation for engaging a sub-processor, as follows:
(i) The Fund Manager shall not engage another sub-processor without prior
specific or general written authorisation of the Customer. In the case of
general written authorisation, the Fund Manager shall inform the Customer of
any intended changes concerning the addition or replacement of other
processors, thereby giving the Customer the opportunity to object to such
changes;
(ii) Where there is a written approval for the Fund Manager to engage a
sub-processor, the Fund Manager shall, prior to such disclosure engagement,
enter into a written, valid and enforceable agreement with the sub-processor,
that includes the same data protection obligations as contained in this
Management Agreement. Where the sub-processor fails to fulfil its data
protection obligations, the Fund Manager shall remain fully liable to the
Customer for the performance of the sub-processor's obligations;
e) take into account the nature of the processing, assist the Customer by
appropriate technical and organisational measures, insofar as this is
possible, for the fulfilment of the Customer's obligation to respond to
requests for exercising the data subject's rights laid down in the General
Data Protection Regulation;
f) assist the Customer in ensuring compliance with the obligations
pursuant to Articles 32 to 36 of the General Data Protection Regulation,
taking into account the nature of processing and the information available to
the processor;
g) at the choice of the Customer, delete or return all the personal data
to the Customer after the end of the provision of services relating to
processing, and to delete existing copies unless the European Union or Member
State law requires storage of the FP Data;
h) make available to the Customer all information necessary to demonstrate
compliance with the obligations laid down in this article and allow for and
contribute to audits, including inspections, conducted by the Customer or
another auditor mandated by the Customer; with regard to this last point, the
Fund Manager shall immediately inform the Customer if, in its opinion, an
instruction infringes the General Data Protection Regulation or other European
Union or Member State data protection provisions; and
i) maintain a written record in accordance with Article 30 of the
General Data Protection Regulation, including in an electronic format, of the
types and categories of data processing activities that it undertakes on
behalf of the Customer in connection with this Management Agreement.
Subject to applicable provisions of the Data Protection Laws, the FP Data
shall not be shared by the Fund Manager with third-parties other than the
persons designated by the Customer and the companies or persons whose
involvement is necessary to carry out all or part of the Fund Manager's duties
and obligations contemplated under this Management Agreement (consisting in
the Fund Manager's "parent" company, the Investment Manager, and the Fund
Manager's Affiliates, any Delegates, subcontractors and/or outside service
providers) and in accordance with the Fund Manager's internal procedures.
In this context, the Customer acknowledges and agrees that FP Data may be
transmitted, stored and processed on systems located outside of Romania, in
the European Union, which systems are or may be operated by the Fund Manager
or third parties indicated in the above paragraph. In case FP Data will be
envisaged to be transmitted, stored and processed in other countries than
those mentioned in this clause, the Fund Manager shall not do so without the
prior written consent of the Customer and unless permitted by the applicable
provisions of the Data Protection Laws.
FP Data is kept for the duration of the contractual relationship and may be
kept for the maximum period legally possible, if any, following the
termination of this relationship.
22. TRANSITORY AND FINAL PROVISIONS
22.1. If any of the provisions of this Management Agreement is held to be
invalid or unenforceable, or impossible to perform, such invalidity,
unenforceability or impossibility shall not affect any other provisions of
this Management Agreement, and this Management Agreement shall be construed
and enforced as if such invalid, unenforceable or impossible to perform
provisions had not been included.
22.2. For the duration of this Management Agreement the Fund Manager
undertakes to inform the BoN in advance of any proposed change, replacement or
dismissal of the permanent representative designated for Fondul Proprietatea.
The Fund Manager will ensure and procure that the permanent representative
devote, at all times, the necessary time for the management of the Portfolio.
23 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
Except as expressly stated herein, this Management Agreement does not confer
any rights on any person or party (other than the Parties) under the Contracts
(Rights of Third Parties) Act 1999.
24. SIGNATORIES
This Management Agreement will be signed in the English and Romanian language,
and executed in 3 originals, one for the Fund Manager and two for the
Customer. The English version will prevail in case of discrepancies.
This Management Agreement is executed as of the date mentioned on its cover
page:
by FONDUL PROPRIETATEA SA as duly represented by:
______________________________
Name: Ilinca von DERENTHALL
Position: Chairperson of the Board of Nominees
Execution date: • 2024
on the one part;
and by FRANKLIN TEMPLETON INTERNATIONAL SERVICES S.À R.L. as represented by:
______________________________
Name:_________________________
Position: Conducting Officer
Execution date: __________________2024
and
______________________________
Name:_________________________
Position: Conducting Officer
Execution date: __________________2024
on the other part.
Annex 1 - Fees
The fees due to the Fund Manager in accordance with Clause 10 of this
Management Agreement shall be calculated in RON and invoiced and paid in Euro
by the Customer in compliance with the following: the amount calculated in RON
will be converted into Euro using the official exchange rate for RON to Euro
published by National Bank of Romania in the last banking day of the period
invoiced.
The fees shall be calculated as (i) a Base Fee, and (ii) a Distribution Fee,
in each case as set out below and in respect of each Calculation Period. For
the avoidance of any doubt, the first Calculation Period shall start on 1
April 2024.
1. Base Fee
A base fee (the "Base Fee") shall be calculated as follows:
Base Fee Rate multiplied by the notional amount, multiplied by the number of
calendar days during the applicable Calculation Period divided by 365,
where:
the "Base Fee Rate" = 135 basis points per year;
1 basis point = 0.0001; and
the "notional amount" is the market capitalization of the Customer, which is
defined as:
(a) the number of the Customer's paid shares considered on daily
basis, minus
(b) the weighted average over the applicable Calculation Period
of the number of the Customer's settled own shares together with the number of
the Customer's equivalent ordinary shares represented by Global Depositary
Receipts ("FP GDRs"), in each case where those shares or FP GDRs are held by
the Customer as treasury shares,
(c) then multiplying the resulting number by the weighted average
market price of the Customer's shares calculated for the applicable
Calculation Period.
The "weighted average market price" shall be computed based on the daily
average market prices of the Customer's shares and corresponding daily
volumes, as published by Bucharest Stock Exchange REGS section.
If the number of shares relevant for the computation of the Base Fee described
above in (a) and (b) changes over the Calculation Period, the Base Fee will be
an aggregation of the computation for each sub-period.
"Sub-period" is defined as the number of days between two buy-backs trading
dates. The calculation of the Sub-periods starts on the settlement date of the
first buy-back transaction within the mandate period (or at the beginning of
the mandate, in case of the first month of the mandate) and shall end on the
date prior to the settlement date of the next buy-back transaction (or the end
of the mandate, in case of the last month of the mandate). During the full
quarters within the mandate, the calculation of the quarterly fees starts at
beginning of the relevant quarter and shall be ended at the end of the
respective quarter.
As the Base Fee is computed using the number of days in a calendar year (365
days), the Base Fee Rate used for non-trading days will be the rate applied
for the prior trading day.
2. Distribution Fee
It is recognized that distributions beneficial to shareholders would reduce
the notional amount upon which the Base Fee is calculated. To reward the Fund
Manager for arranging such distributions, a fee shall be calculated as follows
(an amount so calculated in respect of a particular period a "Distribution
Fee"):
- 175 basis points of distributions.
"Distributions" means:
(i) buy-backs of Fund shares;
(ii) buy-backs of Fund GDRs and/or Depositary Interests ("DI");
(iii) dividends; and
(iv) returns of share capital.
The calculation of the Distribution Fee shall be made when such distributions
become available to shareholders (i.e. on the distribution Payment date as
defined in the GSM approving such distribution) and shall take into
consideration the gross distribution amount available to shareholders on the
distribution Payment date. In case of a buy-back of own shares or of FP GDRs,
the calculation of the Distribution Fee shall be made at the date when the own
shares buy-back transactions or FP GDRs transactions are settled (i.e.
settlement date).
For FP GDRs transactions, the Distribution fee will be computed taking into
account the official exchange rate published by the National Bank of Romania
for the date of settlement of FP GDRs transactions.
Any failure on the part of any shareholder to collect, or to take the
necessary steps to facilitate the receipt of the distributions made available
will not result in any adjustment of the calculation of the Distribution Fee
due to the Fund Manager.
3. Payments
(a) The Base Fee shall be paid by the Customer quarterly, based on the
invoices to be issued by the Fund Manager within twenty (20) business days
following the end of the quarter for which payment is to be made.
(b) The Distribution Fee shall be paid by the Customer quarterly, based on
the invoices to be issued by the Fund Manager within twenty (20) business days
following the end of the quarter for which the Distribution Fee was
calculated.
(c) The invoices for the Base Fee and the Distribution Fee shall be
submitted to the Depositary for their review and certification.
(d) The Fund Manager shall provide to the BoN quarterly and upon reasonable
request of the BoN a detailed report regarding the fees collected under this
Management Agreement, in the form reasonably required by the BoN.
(e) The payment of each fee shall be done within 30 business days of the
receipt of the applicable invoice.
4. Verification
The payment of the Base Fee and the Distribution Fee shall be arranged only
after the verification and certification by the Depositary of the correctness
of the following amounts used in the calculation of those fees: the notional
amount, the value of distributions, and all the other items used in
calculation of the fees, as well as the methods for determining the fees.
5. Base Fee applicable upon the expiry of the term of the Management Agreement
In the event that, in accordance with Clause 13.5, upon the expiry of the
period mentioned in Clause 15, the Fund Manager continues to carry out all
such acts as it is empowered and required to do by any part of this Management
Agreement until the New Appointment Date or the expiry of the period mentioned
in Clause 13.9 item (ii), the Fund Manager shall receive the fees provided by
and determined in accordance with Clause 1 of this Annex 1, except that the
Base Fee Rate shall be equal to 100 basis points per each Calculation Period.
Annex 2 - Specific duties and obligations
Without prejudice to the obligations of the Fund Manager specified in the
Management Agreement, the below is a non-exhaustive list of additional
specific duties and obligations the Fund Manager undertakes to provide.
- Portfolio Management services
The Fund Manager shall provide portfolio management services to the Customer
as mentioned in Clause 6 of the Management Agreement.
- Risk Management services
The Fund Manager shall provide risk management services to the Customer in
order to assess the exposure of the Customer to market, liquidity and
counterparty risks and the exposure of the Customer to all other relevant
risks, including operational risks which may be material for the Customer,
subject to and in accordance with the terms and provisions of this Management
Agreement, the applicable AIFM Rules and any applicable circular to be issued
by the CSSF (the "CSSF Circular"), and the risk management systems implemented
by the Fund Manager, as may be amended and supplemented from time to time (the
"RMS").
The Fund Manager shall have and perform the following powers and duties:
1. in addition to the obligations in Clause 6 of the Management Agreement,
to prepare, in the manner and with the level of detail prescribed by the AIFM
Rules, the CSSF Circular and the AIFM Law, for submission to the Customer
compliance reports at regular intervals in relation to the RMS in accordance
with procedures agreed from time to time between the Customer and the Fund
Manager;
2. to provide to the Customer in the frequency and the form stipulated in
the RMS from time to time by the Customer, such information as is required by
the Customer to comply with the risk management process requirements of the
applicable law.
In addition, the Fund Manager shall at least:
i. implement an appropriate, documented and regularly updated due diligence
process when investing on behalf of the Fund, according to the investment
strategy, the objectives and risk profile of the Fund;
ii. ensure that the risks associated with each investment position of the
Customer and their overall effect on the Customer's portfolio can be properly
identified, measured, managed and monitored on an on-going basis, including
through the use of appropriate stress testing procedures;
iii. ensure that the risk profile of the Customer shall correspond to
the size, portfolio structure and investment strategies and objectives of the
Customer as laid down in the applicable legislation, Constitutive Act and IPS.
The Fund Manager shall set a maximum level of leverage which it may employ on
behalf of the Customer as well as the extent of the right to reuse collateral
or guarantee that could be granted under the leveraging arrangement (if any),
taking into account all elements as required by the applicable legislation
including the AIFM Rules, Constitutive Act and IPS.
- Administration Functions
The Fund Manager shall have and perform the following duties:
1. Managing the relationship with the Central Depositary with regard to
its shareholders register functions - the only entity that has the right to
keep the register of shareholders under Romanian legislation.
2. Keeping all the books, records, agreements, forms, papers, files and
other corporate documents required by Romanian law.
3. Determining and issuing the net asset value of the Fund as well as the
net asset value per share of the Fund.
4. Monitoring the compliance with the regulations in force.
5. Receiving any and all notices, correspondence, telegrams, telex
messages, telephonic advice or other representations and communications
received for account of the Fund.
6. Keeping with due diligence and caring any and all such Fund documents
and information entrusted to it.
7. Providing and supervising facilities and services for the preparation
and dispatch of statements, reports, notices, announcements, proxies, minutes
and other documents to the shareholders and the BoN.
8. Co-operating at the drafting of the entire documentation for calling
the General Meeting of Shareholders of the Fund.
9. Drafting the annual budget.
10. Drafting the Investment Policy Statement.
11. Proposing the conclusion of the financial audit agreement.
12. Proposing the change of the location of the registered office of the Fund.
13. Providing appropriate conference rooms for meetings of the BoN and the
shareholders of the Fund.
14. Providing for any legal filing and publications and file any tax returns.
15. Maintaining contacts with all supervisory, regulatory, tax or other state
authorities or Fund-related professional organisations in Romania, complying
with any information request from these authorities and advising the Fund
thereof (including the current reports).
16. Co-operating at the establishment of the annual reports, accounts,
financial reports, financial statements and of any other documents, which have
to be sent to investors or to the relevant authorities in accordance with
applicable laws, regulations or the Constitutive Act.
17. Dealing with investor queries and sending correspondence and all other
documents to the investors.
18. Public Relations activities.
The Fund Manager, in its capacity as Sole Director, shall undertake in the
name of the Customer the necessary administrative work required by the
applicable legislation and the Constitutive Act and the IPS. The Fund Manager,
in its capacity as Sole Director, shall have and perform the following powers
and duties:
i. to establish the books and records of the Customer in compliance with
the legal provisions and the accounting practices in force at the relevant
time in Romania and to keep them in Romania where all accounting documents
shall be available at any time;
ii. to determine the net asset value of the Customer as well as the net
asset value per share of the Customer in accordance with Romanian legal
provisions in force and the relevant provisions of the Constitutive Act;
iii. to properly fulfil its legal obligations regarding the establishment
of the annual accounts, financial reports and of any other documents which
have to be sent to shareholders or to the relevant authorities in accordance
with applicable laws, regulations or the Constitutive Act;
iv. to take care, at the expenses of the Customer, of the dispatch of the
correspondence, the financial reports and all other documents to the
shareholders and to the relevant authorities;
v. to prepare the financial statements and reports in accordance with the
provisions of Romanian regulations and of the countries where the Customer is
registered;
vi. to co-operate, as necessary, with the Customer's auditors, the Romanian
authorities and the authorities in the countries where the Customer is
registered.
- Marketing
The Fund Manager is in charge of marketing the shares of the Customer
globally. For the avoidance of doubt, the Fund Manager must carry out any
notification or other formalities contemplated in Articles 29 and 30 of the
AIFM Act or the equivalent provisions in legislation in another relevant
Member State, where required in view of the marketing of the Customer's shares
in any Member State which has implemented the AIFMD, as defined in the AIFM
Act.
Resolution no. 3 / 26 March 2024
of the Shareholders' Ordinary General Meeting of
FONDUL PROPRIETATEA S.A.
Headquarters: 76-80 Buzești Street, 7(th) floor, 1(st) district, Bucharest,
Romania,
Registered with the Trade Registry under number J40/21901/2005, fiscal
registration code 18253260
Today, 26 March 2024, 11:00 AM (Romanian time), the shareholders of Fondul
Proprietatea S.A. (the "Fund" or "Fondul Proprietatea") have met during the
Shareholders' Ordinary General Meeting ("OGM") of the Fund, at its first
summoning, at "INTERCONTINENTAL ATHÉNÉE PALACE BUCHAREST" Hotel, Le
Diplomate Salon, 1-3 Episcopiei Street, 1(st) District, Bucharest, zip code
010292, Romania, the OGM being opened by its Chairman, namely Mr. Johan MEYER,
in his capacity of permanent representative of Franklin Templeton
International Services S.À R.L., a société à responsabilité limitée
qualifying as an alternative investment fund manager under article 5 of the
Luxembourg law of 12 July 2013 on alternative investment fund managers,
authorized by the Commission de Surveillance du Secteur Financier under no.
A00000154/21 November 2013, whose registered office is located at 8a, rue
Albert Borschette, L-1246 Luxembourg, registered with the Luxembourg register
of commerce and companies under number B36.979, registered with the Romanian
Financial Supervisory Authority under number PJM07.1AFIASMDLUX0037/10 March
2016, in its capacity of alternative investment fund manager and sole director
of Fondul Proprietatea S.A. ("Sole Director").
Whereas:
§ The convening notice of the OGM was published on the Fund's website
(www.fondulproprietatea.ro) on 5 February 2024 and in the Official Gazette of
Romania, Part IV, number 632 of 7 February 2024 and in Jurnalul number 1581 of
7 February 2024 and republished with supplements on the Fund's website on 26
February 2024 and in the Official Gazette of Romania, Part IV, number 1007 of
28 February 2024 and in "Adevărul" newspaper number 9099 of 28 February 2024;
§ The provisions of Companies' Law no. 31/1990, republished, with its
subsequent amendments and supplementations ("Companies' Law no. 31/1990");
§ The provisions of Emergency Government Ordinance no. 32/2012 on
undertakings for collective investment in transferable securities and
investment management companies, as well as for the amendment and
supplementation of Law no. 297/2004;
§ The provisions of Regulation of the Financial Supervisory Authority no.
4/2013 regarding depositary receipts, with its subsequent amendments and
supplementations;
§ The provisions of Law no. 24/2017 on issuers of financial instruments and
market operations, republished ("Issuers' Law");
§ The provisions of Regulation of the Financial Supervisory Authority no.
5/2018 on issuers of financial instruments and market operations, with its
subsequent amendments and supplementations ("Regulation no. 5/2018");
§ The provisions of Law no. 243/2019 on alternative investment funds and for
the amendment and completion of other legislation, with its subsequent
amendments and supplementations ("Law no. 243/2019");
§ The provisions of Regulation of the Financial Supervisory Authority no.
7/2020 on the authorization and operation of alternative investment funds,
with its subsequent amendments and supplementations ("Regulation no. 7/2020");
§ The provisions of Commission Implementing Regulation (EU) 2018/1212 of 3
September 2018 laying down minimum requirements implementing the provisions of
Directive 2007/36/EC of the European Parliament and of the Council as regards
shareholder identification, the transmission of information and the
facilitation of the exercise of shareholders rights ("CE Regulation
1212/2018"),
§ The provisions of the Fund's constitutive act ("Constitutive Act"),
it is necessary to have a number of shareholders holding at least 25% of the
total voting shares in order to meet the quorum conditions, in the present
OGM, manifesting their vote 232 of shareholders, which represents a number of
1,591,932,553 voting rights (i.e. 44.7621% of the total voting rights at the
reference date 29 February 2024, i.e. 3,556,427,239; i.e. 28.0823% of the
total number of issued shares at the reference date 29 February 2024, i.e.
5,668,806,128),
the conditions regarding the quorum for holding this meeting and the majority
for shareholders to decide legally are met, under the legally required
majority (according to art. 112 paragraphs (1) of the Companies' Law no.
31/1990 and art. 14 I paragraph (1) of the Constitutive Act).
Following debates, the Fund's shareholders decide as follows:
I. The approval of the Remuneration Policy of Fondul Proprietatea in
force starting 1 April 2024, to reflect the provisions of the Management
Agreement, in the form provided in the supporting documentation related to
item 2 on the OGMS agenda with a change in the base commission rate so that
the base commission is 1.35%, as reflected in the Annex of the herein
Resolution.
(Item added on the agenda at the request of the shareholder Ministry of
Finance)
This item is approved with 1,266,023,565 votes, representing 79.4687% of the
total votes held by the present or represented shareholders, in accordance
with Article 14 (1), second paragraph of the Constitutive Act corroborated
with Article 112 (1), second paragraph of Companies' Law no. 31/1990.
The votes were recorded as follows:
- 1,266,023,565 votes "for";
- 316,793,063 votes "against";
- 8,818,098 abstentions;
- 20,192,705 votes "not given";
- 0 votes annulled from correspondence;
- 0 votes annulled in the OGM meeting.
II. The approval of:
(a) The date of 11 April 2024 as the Ex - Date, in accordance with Article
176 paragraph (1), computed with the provisions of Article 2 paragraph (2)
letter (l) of Regulation no. 5/2018;
The date of 12 April 2024 as the Registration Date, in accordance with Article
176 paragraph (1) of Regulation no. 5/2018, computed with the provisions of
Article 87 paragraph (1) of Issuers' Law.
As they are not applicable to this OGM, the shareholders do not decide on the
other aspects provided by Article 176 paragraph (1) of Regulation no. 5/2018
such as the payment date and the date of the guaranteed participation.
(b) The empowerment, with authority to sub-delegate, of Johan Meyer to
sign the shareholders' resolutions, as well as any other documents in
connection therewith, and to carry out all procedures and formalities set out
by law for the purpose of implementing the shareholders' resolutions,
including formalities for publication and registration thereof with the Trade
Registry or with any other public institution.
This item is approved with 1,591,892,086 votes, representing 99.9236 % of the
total votes held by the present or represented shareholders, in accordance
with Article 14 (1), second paragraph of the Constitutive Act corroborated
with Article 112 (1), second paragraph of Companies' Law no. 31/1990.
The votes were recorded as follows:
- 1,591,892,086 votes "for";
- 786,987 votes "against";
- 151,203 abstentions;
- 18,997,155 votes "not given";
- 0 votes annulled from correspondence;
- 0 votes annulled in the OGM meeting.
This OGM Resolution no. 3 is drafted on behalf of the shareholders today, 26
March 2024, in 3 original counterparts by:
________________________
Johan MEYER
Chairman
_______________________
Ionuț IOANCĂ
Meeting secretary
_______________________
Livia DUMITRESCU
Technical secretary
Annex - The Remuneration Policy of Fondul Proprietatea SA
THE REMUNERATION POLICY OF FONDUL PROPRIETATEA SA
Effective starting with 1 April 2024
Chapter I. Preamble
The Remuneration Policy ("the Policy") of Fondul Proprietatea SA, a
joint-stock company incorporated under the laws of Romania, qualifying as an
alternative investment fund under Law no. 74/2015 on alternative investment
fund managers, Law no. 243/2019 on alternative investment funds, amending and
supplementing certain normative acts and as an issuer under Law no. 24/2017 on
issuers of financial instruments and market operations (the "Issuers Law"), an
entity supervised by the Financial Supervisory Authority ("FSA"), is adopted
by the Board of Nominees of Fondul Proprietatea SA ("Fondul Proprietatea / the
Fund") and is presented for approval to the general meeting of shareholders of
in accordance with the Issuers Law.
Given that (i) Fondul Proprietatea is managed by Franklin Templeton
International Services S.à r.l., as Sole Director and Alternative Investment
Fund Manager (the "Fund Manager"), (ii) the commercial terms related to the
management of Fondul Proprietatea by the Fund Manager are set out in the
relevant management agreement, which is subject to Fondul Proprietatea's
shareholders approval (the "Management Agreement"), (iii) Fondul Proprietatea
does not have its own staff, (iv) the Fund Manager has its own remuneration
policy ("Fund Manager Remuneration Policy") in accordance with Directive
2011/61/EU on Alternative Investment Fund Managers and amending Directives
2003/41/EC and 2009/65/EC and Regulations (EC) No. 1060/2009 and (EU) No.
1095/2010 ("AIFMD") 1 (#_ftn1) , this Policy mainly reflects the
understandings already in place with the Fund Manager, in accordance with the
Management Agreement.
The Policy contributes to the Fund's business strategy and long-term interests
and sustainability. This is consistent with and promotes sound and effective
risk management and does not encourage risk-taking which is inconsistent with
the risk profiles, rules or the constitutive act of the Fund.
The intention is that this Policy to be valid until the expiration of the
mandate of the current Fund Manager, unless significant events occur (i.e.,
change of remunerations' level), case in which an updated Policy will be
presented for approval to the General Meeting of Shareholders.
Chapter II. Purpose
The purpose of this Policy is to set forth the corporate governance principles
with regards the remuneration of the (i) Fund Manager and of the (ii) Board of
Nominees members, as stipulated under the Issuers Law and the Corporate
Governance Code issued by the Bucharest Stock Exchange.
Chapter III. General criteria
In order to promote the development of the corporate governance subject to the
application of the best practices and achievement of a prudent management,
while also considering that the representatives of the Fund Manager are
remunerated in accordance with the Fund Manager Remuneration Policy and AIFMD,
the Fund should follow certain requirements underlying the application of
corporate governance principles with respect to the remuneration of executive
management/senior management, as follows:
a) The remuneration policy shall be analyzed and set by the Board of
Nominees so that it corresponds to the business strategy, objectives and
long-term interests of the Fund and that it covers measures for the prevention
of conflicts of interest;
b) The Board of Nominees shall ensure that all commitments to remuneration
are properly and responsibly structured and that the remuneration policies
allow and promote an efficient risk management without leading to a
risk-taking which may exceed the level of the regulated entity's risk
tolerance;
c) The level of the remuneration shall be established in close connection
with the responsibilities and commitments of the duties;
d) The existence of the procedure for the recruitment and selection of the
Fund Manager and of its permanent representative, appointed in accordance with
article 153(13) of Companies' Law no. 31/1990, and of the members of the Board
of Nominees, as well as for the renewal of the existing mandates.
Taking into consideration that the Fund Manager has its own remuneration
policy, the Board of Nominees acknowledges that the Fund Manager Remuneration
Policy reflects sound remuneration principles, aligning the personal
objectives of its staff with the long-term interest of the Fund Manager and
Fondul Proprietatea SA.
Chapter IV. Governance and decision-making process
In order to comply with the legal provisions in force with respect to
corporate governance principles, Fondul Proprietatea shall pay the
remuneration to the Fund Manager and to the members of the Board of Nominees
in accordance with a remuneration policy that has been approved by the
ordinary general meeting of shareholders, but also complying with the
Management Agreement. The Policy is submitted to a vote by the general meeting
at every material change and, in any case, at least every four years.
In case the ordinary general meeting of the Fund's shareholders does not
approve the proposed new policy, the Fund shall continue to pay remuneration
in accordance with the existing approved policy and shall submit a revised
policy for approval at the following ordinary general meeting of shareholders.
The revised policy will also include (i) a description of all significant
policy's amendments and how shareholders' votes and views on remuneration
policy are taken into account, and (ii) a report since the last vote of the
general meeting of shareholders on the remuneration policy.
In terms of decision-making process, the following corporate bodies are
involved within the drafting, submission for approval, approval and
implementation of the Policy.
The Ordinary General Meeting of Shareholders
· Approves the Policy and any amendment thereto;
· Reviews the Performance Report, as defined below, prepared by the
Fund Manager, as well as the review report of the Board of Nominees, in
accordance with the Management Agreement;
· Approves the remuneration of the Fund Manager and of the Board of
Nominees' members.
The Fund Manager
· Submits to the Board of Nominees a report on activities and
performance of the Fund Manager in the relevant period, in accordance with the
Management Agreement (the "Performance Report").
The Board of Nominees
· Drafts the Policy and any related remuneration document (based on the
recommendations of the Nomination and Remuneration Committee);
· Prepares and submit for the information of shareholders at the Annual
GSM a review of the Performance Report, evaluating the performance of the Fund
Manager, in accordance with the Management Agreement;
· Oversees and assesses the performance of the duties by the Fund
Manager, in accordance with the Management Agreement and constitutive act of
the Fund.
The Nomination and Remuneration Committee
A Nomination and Remuneration Committee composed of members of the Board of
Nominees was established to help the governing bodies of the Fund in the area
of nomination and changes in remuneration, to take well-grounded decisions
based on adequate and thorough analysis.
The Nomination and Remuneration Committee:
· Prepares recommendations to the Board of Nominees, regarding the
remuneration of the Fund Manager and of the Board of Nominees' members;
· Provides its support and advice to the Board of Nominees on the
design of the Fund's overall remuneration policy;
· Reviews the appointment of external remuneration consultants that the
Board of Nominees may decide to engage for advice or support;
· Supports the Board of Nominees in overseeing the remuneration
system's design and operation;
· Devotes specific attention to the assessment of the mechanisms
adopted to ensure that the overall remuneration policy is consistent with the
business strategy, objectives, values and interests of the Fund and the
investors of Fondul Proprietatea.
Chapter V - Remuneration of the Fund Manager and of the Board of Nominees
A. The remuneration of the Fund Manager
1. Corporate Governance principles setting the remuneration of the
Fund Manager
The remuneration of the Fund Manager of Fondul Proprietatea is part of the
Management Agreement negotiated with the Fund Manager and approved by
shareholders.
2. The description of the Fund Manager's remuneration
The remuneration due to the Fund Manager is calculated in RON and invoiced and
paid in Euro by Fondul Proprietatea in compliance with the following: the
amount calculated in RON will be converted into Euro using the official
exchange rate for RON to Euro published by National Bank of Romania in the
last banking day of the period invoiced.
The remuneration is calculated as (i) a Base remuneration, and (ii) a
Distribution remuneration, in each case as set out below and in respect of
each Calculation Period.
2.1 Base Remuneration
A base remuneration (the "Base Remuneration") shall be calculated as follows:
Base Remuneration Rate multiplied by the notional amount, multiplied by the
number of calendar days during the applicable Calculation Period divided by
365,
where:
the "Base Remuneration Rate" = 135 basis points per year;
1 basis point = 0.0001; and
the "notional amount" is the market capitalization of Fondul Proprietatea,
which is defined as:
(a) the number of Fondul Proprietatea's paid shares considered on
daily basis, minus
(b) the weighted average over the applicable Calculation Period
of the number of Fondul Proprietatea's settled own shares together with the
number of Fondul Proprietatea's equivalent ordinary shares represented by
Global Depositary Receipts ("FP GDRs"), in each case where those shares or FP
GDRs are held by Fondul Proprietatea as treasury shares,
(c) then multiplying the resulting number by the weighted average
market price of Fondul Proprietatea's shares calculated for the applicable
Calculation Period.
The "weighted average market price" shall be computed based on the daily
average market prices of Fondul Proprietatea's shares and corresponding daily
volumes, as published by Bucharest Stock Exchange REGS section.
If the number of shares relevant for the computation of the Base Remuneration
described above in (a) and (b) changes over the Calculation Period, the Base
Remuneration will be an aggregation of the computations for each sub-period.
"Sub-period" is defined as the number of days between two trading dates. The
calculation in each subperiod starts on the settlement date of the first
transaction (or the beginning of the mandate) and shall end on the date prior
to the settlement date of the next transaction (or the end of the mandate).
As the Base Remuneration (including any additional remuneration determined
under the previous two paragraphs) is computed using the number of days in a
calendar year (365 days), the Base Remuneration Rate used for non-trading days
will be the rate applied for the prior trading day.
If, upon the expiry of the one (1) year period starting 1 April 2024, the Fund
Manager continues to carry out all such acts as it is empowered and required
to do by any part of the Management Agreement until the New Appointment Date
(as defined in the Management Agreement) or the expiry of a period of six
months as of the date of the OGM (as defined in the Management Agreement)
which has selected and/or appointed a new fund manager and sole director,
regardless of whether the New Appointment Date has occurred, the Base
Remuneration Rate shall be equal to 100 basis points per each Calculation
Period.
2.2 Variable remuneration - Distribution Remuneration
It is recognized that distributions beneficial to shareholders would reduce
the notional amount upon which the Base Fee is calculated. To reward the Fund
Manager for arranging such distributions, a variable remuneration shall be
calculated as follows (an amount so calculated in respect of a particular
period, a "Distribution Fee"): 175 basis points applied to the value of
distributions taking place between 1 April 2024 and 31 March 2025.
"Distributions" mean:
(i) Repurchases of Fund shares;
(ii) Repurchases of Fund GDRs and/or Depositary Interests ("DI");
(iii) Dividends; and
(iiv) Returns of share capital.
The calculation of the Distribution Fee shall be made when such distributions
become available to shareholders. In case of a repurchase of own shares or of
FP GDRs, the calculation of the Distribution Fee shall be made at the date
when the own shares repurchase transactions or FP GDRs transactions are
settled (i.e. settlement date).
For FP GDRs transactions, the Distribution Fee will be computed taken into
account the official exchange rate published by the National Bank of Romania
for the date of settlement of FP GDRs transactions.
Any failure on the part of any shareholder to collect, or to take the
necessary steps to facilitate the receipt of the distributions made available
will not result in any adjustment of the calculation of the Distribution Fee
due to the Fund Manager.
2.3 Remuneration of the staff
Fondul Proprietatea does not have own staff, all the necessary services being
provided by the Fund Manager, through its own staff and contractors.
The remuneration of the Fund Manager's staff is detailed under the Fund
Manager Remuneration Policy.
While a summary of the Fund Manager Remuneration Policy is available at
https://www.franklintempleton.lu/about-us/regulatory-information#remuneration
(https://www.franklintempleton.lu/about-us/regulatory-information#remuneration)
, the Board of Nominees acknowledges that the key principles of the Fund
Manager Remuneration Policy are adequate, as follows:
(i) alignment of the personal objectives of the staff with the
long-term interest of the Fund Manager and of Fondul Proprietatea;
(ii) aiming at mitigating incentives practices which could
encourage employees to take unnecessary risks;
(iii) remuneration shared between fixed and variable components,
with fixed salaries set as a sufficiently high proportion of the total
remuneration so that the Fund Manager is able to operate a fully flexible
bonus policy, including the possibility to pay no bonus.
2.4 Payments
2.4.1. Fund Manager
(a) The Base Remuneration shall be paid by Fondul Proprietatea quarterly,
based on the invoices to be issued by the Fund Manager within twenty (20)
business days following the end of the quarter for which payment is to be
made.
(b) The Distribution remuneration shall be paid by Fondul Proprietatea
quarterly, based on the invoices to be issued by the Fund Manager within
twenty (20) business days following the end of the quarter for which the
Distribution remuneration was calculated.
(c) The invoices for the Base remuneration and the Distribution remuneration
shall be submitted to the Depositary.
(d) The Fund Manager shall provide to the Board of Nominees quarterly and on
an annual basis and upon any reasonable request of the Board of Nominees a
detailed report regarding the remunerations collected under the Management
Agreement, in the form reasonably required by the Board of Nominees.
(e) The payment of the remuneration shall be done within thirty (30)
business days of the receipt of the applicable invoice.
2.4.2. Fund Manager's staff
The remuneration of the Fund Manager's staff is approved by the Compensation
Committee of Franklin Resources Inc., the ultimate parent company, in
accordance with the Fund Manager Remuneration Policy.
The FRI Compensation Committee is composed of five non-executive members of
the Board of Directors of Franklin Resources Inc. who are independent under
applicable corporate governance standards of the New York Stock Exchange.
The FRI Compensation Committee meets at least once a quarter and periodically
reviews the general principles of the FRI remuneration policy. Each year the
FRI Compensation Committee sets the annual incentive compensation plan (AIP)
pool by considering in particular factors such as FRI's pre-bonus operating
income, the overall company performance (actual and projected) as well as
investment performance, profitability growth and the overall market
environment.
The Fund Manager Remuneration Policy also provides for specific bonuses' claw
back and deferral provisions with respect to the Fund Manager's staff.
2.5 Verification
The payment of the Base remuneration and the Distribution remuneration shall
be arranged by the Fund Manager only after the verification and certification
by the Depositary of the correctness of the following amounts used in the
calculation of those fees: the notional amount, the value of distributions,
and all the other items used in calculation of the remuneration, as well as
the methods for determining the remuneration.
3. Duration of the mandate of the Fund Manager, notice period and
potential compensation for revocation without cause
In accordance with the Resolution no. 8 of 25 September 2023 of the ordinary
general meeting of the Fund's shareholders, the duration of the Fund Manager's
mandate is of one (1) year, starting on 1 April 2024 and ending on 31 March
2025.
Fondul Proprietatea may unilaterally and at its sole discretion terminate the
Management Agreement, at any time, on three months' prior written notice to
the Fund Manager, based on an OGM resolution for approving the simultaneous
termination of the mandate and of the Management Agreement.
For the avoidance of any doubt, termination of the mandate and of the
Management Agreement will not entitle the Fund Manager to any damages or the
payment of any amounts other than the remuneration to be paid in accordance
with the clauses above.
The Fund Manager may terminate the Management Agreement and resign its mandate
with six months' prior written notice.
Not later than five business days following the termination notice date
provided by the Fund Manager, but subject to timely approval of the GSM agenda
by the Board of Nominees, the Fund Manager will call the OGMS having on the
agenda the approval of the procedure for the selection of a new sole director
and alternative investment fund manager. Such procedure will be prepared by
the Fund Manager and agreed with the Board of Nominees before its submission
to an OGMS for approval.
In the event a termination notice is sent, the Fund Manager shall be paid on a
pro rata basis with the duration of the provision of the services. For the
avoidance of doubt, in such a case, the Fund Manager's pro rata remuneration
will be for a period of at least 3 months.
B. The remuneration of the Board of Nominees' members
1. Corporate Governance principles setting the remuneration of the Board
of Nominees' members
Each member of the Board of Nominees receives a fixed remuneration; no
malus/claw back arrangement is in place.
The remuneration of the members of the Board of Nominees is approved by the
shareholders, within the Ordinary General Meeting.
2. Description of the remuneration of the Board of Nominees' members
With effect from 16 November 2022, the gross monthly remuneration of each
member of the Board of Nominees is RON 26,535.30 (the "Base Monthly
Remuneration").
With effect from 16 November 2022, an additional fixed gross monthly
remuneration is paid to the Chairperson of the Board of Nominees, the
Chairpersons of the Audit and Valuation Committee and of the Nomination and
Remuneration Committee, as follows:
(i) an additional fixed gross monthly remuneration of fifteen
(15) per cent of the Base Monthly Remuneration, for the Chairperson of the
Board of Nominees; and
(ii) an additional fixed gross monthly remuneration of ten (10)
per cent of the Base Monthly Remuneration, for the Chairperson of the Audit
and Valuation Committee and for the Chairperson of the Nomination and
Remuneration Committee.
The additional fixed gross monthly remuneration for the Chairperson of the
Board of Nominees and the Chairpersons of the Audit and Valuation Committee
and of the Nomination and Remuneration Committee shall be payable pro-rata for
the period during which the member of the Board of Nominees holds the relevant
position(s).
The Base Monthly Remuneration and the additional fixed gross monthly
remuneration shall be paid in accordance with the provisions of the mandate
agreement signed between each member of the Board of Nominees and the Fund.
The format of the mandate agreement for the members of the Board of Nominees
is approved by the Fund's Ordinary General Shareholders' Meeting.
3. Duration of the mandates of the Board of Nominees' members, their
notice period and possible compensation for revocation without cause
The mandate of the members of the Board of Nominees is of three (3) years,
period to be extended by right, until the first meeting of the Ordinary
General Meeting of the Shareholders. The notice period for withdrawal from the
position of a member of the Board of Nominees is three (3) months -
notwithstanding the foregoing, a shorter notice period may be accepted on a
case-by-case basis where such is expressly required by the applicable law or
by any relevant authority.
There is no compensation for revocation without cause.
Chapter VI - The recruitment and selection procedure for the Fund Manager and
the Board of Nominees
Fondul Proprietatea, as an entity supervised by the FSA, shall have in place a
procedure for the recruitment and selection of the Fund Manager and of the
members of the Board of Nominees, as well as certain provisions for the
renewal of the existing mandates.
The recruitment and the selection procedure of both the Fund Manager and of
the Board of Nominees of Fondul Proprietatea are set out under the Fund's
Constitutive Act.
Thus, according to Article 12 paragraph (2) of the Fund's Constitutive Act,
the Ordinary General Shareholders' Meeting has, among its competencies, the
following:
Ø to appoint the members of the Board of Nominees and to cancel their
appointment;
Ø to appoint the Alternative Investment Fund Manager in accordance with the
law and to cancel its appointment;
Ø to rule over the management of the Alternative Investment Fund Manager and
to evaluate his/her performances and to discharge him/her from its management.
A. The procedure of the recruitment and the selection of the Fund Manager
As Fondul Proprietatea's management system is a unitary system, the ordinary
general shareholders meeting has appointed a sole director and alternative
investment fund manager, which is represented in Romania as sole director, by
the individual as permanent representative appointed in accordance with
Article 153(13) of Companies' Law no. 31/1990.
The mandate of the Alternative Investment Fund Manager shall not exceed two
(2) years. The Alternative Investment Fund Manager may be reelected.
In accordance with the Resolution no. 8 of 25 September 2023 of the ordinary
general meeting of the Fund's shareholders, the duration of the Fund Manager's
mandate is of one (1) year, starting on 1 April 2024 and ending on 31 March
2025.
The Alternative Investment Fund Manager will call an Ordinary General Meeting
of the Shareholders to be held at least six (6) months before the termination
of the duration of the mandate of the Alternative Investment Fund Manager with
the agenda of approving the renewal of the Alternative Investment Fund
Manager's mandate or starting the selection process of a new Alternative
Investment Fund Manager and the negotiation of the management agreement to be
concluded.
As per Resolution no. 9 of 25 September 2023, the ordinary general meeting of
the Fund's shareholders approved the launch of a transparent and competitive
selection procedure for the appointment of a new manager based on investment
expertise and experience for a mandate not exceeding four (4) years from 1
April 2024, in accordance with the legal provisions in force. The Board of
Nominees is empowered to initiate, organize the transparent selection
procedure for a new Fund Manager and to establish new objectives, performance
criteria and remuneration conditions realigned with these objectives and
present them for approval by the general shareholders meeting.
B. The procedure of the recruitment and the selection of the members of the
Board of Nominees
The procedure for the selection and the recruitment of the members of the
Board of Nominees is set out under the provisions of the Fund's Constitutive
Act.
Thus, Article 13 paragraph (8) mentions that: "In case the agenda includes the
appointment of the members of the Board of Nominees, the notice shall mention
that the list including information regarding the name, the residence and
professional training of the persons proposed for the position of member of
the Board of Nominees is available to the shareholders, to be further reviewed
and completed by shareholders."
Further, Article 15 provides that the ordinary general meeting of the
shareholders shall appoint the Board of Nominees, formed of 5 members, and
shall establish their remuneration.
Any shareholder will have the right to make proposals on the members of the
Board of Nominees.
The members of the Board of Nominees may be shareholders of Fondul
Proprietatea or other persons designated by the shareholders and they must
have the proper experience and knowledge in order to be able to receive the
Alternative Investment Fund Manager reports and of the consultants and, based
on the information received, judge the merits of the management of Fondul
Proprietatea within the limits of the objectives and principles set by the
investment policy as well as by the applicable laws and regulations.
Also, the members of the Board of Nominees have to be qualified properly in
order to decide (if there is need with the support of an independent
consultant) if the transactions proposed by the Alternative Investment Fund
Manager needing the approval of the Board of Nominees are made to the
advantage of the shareholders.
The mandate of the members of the Board of Nominees is of three (3) years,
period to be extended by right, until the first meeting of the Ordinary
General Meeting of the Shareholders.
The Board of Nominees elects amongst its members a chairman.
Chapter VII. Avoiding conflicts of interest
This Policy is drafted based on the principle of avoiding conflicts of
interest and includes measures that ensure professional and responsible
behavior at the level of Fondul Proprietatea.
The Fund Manager and the Board of Nominees' members are required to act with
due diligence and to conduct themselves in a manner and with such ethics and
integrity so as to avoid a conflict of interest, either real or apparent.
A "conflict of interest" represents that situation or circumstance that may
arise in the operational or decision-making process, where the private
interest, directly or indirectly, of a person holding a key position within
the Fund interposes with the interests of the Fund and affects or could affect
her/his independence and impartiality in decision-making, professional
reasoning or the timely and objective performance of duties or that could
affect, by its nature, the integrity or stability of Fondul Proprietatea and
the financial market. In this respect, the Fund Manager and the Board of
Nominees' members should avoid activities, interests and other relationships
that might be opposed to the interests of the Fund or might cause a conflict
with the performance of their duties.
Measures for avoiding conflicts of interest:
- the remuneration level of the Fund Manager and of the
Board of Nominees' members shall be established in close connection with the
responsibilities and commitments of their duties, in accordance with the
provisions of the Management Agreement or of the mandate agreement;
- the shareholder who is also a member of the Board of
Nominees will not participate in the decision on his / her remuneration
package and / or mandate contract;
- the removal of any direct link between the remuneration
of relevant persons who mainly carry out a particular activity and the
remuneration of other relevant persons, who carry out mainly other activity,
when the activities in question may give rise to a conflict of interests;
- the use of the position held within the Fund in the
interest of persons with whom there are blood relations or other
extra-professional relations in remuneration practices is prohibited; in order
to avoid conflicts of interest, the aim is to avoid appointing people to such
positions, which is why each candidate for the position of Board of Nominees
must provide a questionnaire on his independence which will be the basis of
the independence analysis carried out by the Board of Nominees.
Chapter VIII. Deviations from the Policy
The Board of Nominees, upon recommendations of the Nomination and Remuneration
Committee, in exceptional circumstances, may temporarily derogate from any
section of the Policy, based on its full discretion, within the limits of the
legal provisions and of the Constitutive Act, in the following exceptional
circumstances:
(a) upon change of the Fund Manager, in accordance with the new
management agreement;
(b) upon material changes in the Fund's structure, its overall
financial and/or operational performance which may require adjustment of the
remuneration components;
(c) in any other circumstance where the derogation may be
objectively required to serve the long-term interests and sustainability of
the Fund or to assure its viability,
but without increasing the remuneration of the Board of Nominees' members.
In addition, change of the relevant legislation may result in derogations from
the Policy, outside the discretion of the Fund.
Chapter IX. Disclosure
Once voted by the Ordinary General Meeting of shareholders, the Policy,
together with the date and the results of the vote, will be available on the
Fund's website, and remains publicly available, free of charge, at least as
long as it is applicable.
A paper version will be made available upon request to the Fund.
Chapter X. Revisions to the previous Remuneration Policy
This policy represents the revised version of the previous Remuneration Policy
(approved by the shareholders on 15 November 2022). The previous version
reflected the changes related to the increase of the base remuneration for the
members of the Board of Nominees, as well as additional remuneration for
certain positions in the Board of Nominees and the increase of the notice
period in case of withdrawal from the position of member of the Board of
Nominees.
The quorum of the ordinary general shareholders meeting on 15 November 2022was
59.4725% of the total voting rights at the reference date 17 October 2022),
and the approval was made as follows:
- 1,934,087,153 votes "for"; representing 56.7900% of the total
votes held by the present or represented shareholders;
- 1,439,273,510 votes "against"; representing 42.2610% of the
total votes held by the present or represented shareholders;
- 32,268,365 abstentions;
- 51,693 votes "not given";
- 568,306 votes annulled.
The revisions to the Remuneration Policy are aimed at aligning the provisions
therein with the commercial terms set out in the Management Agreement related
to the Fund Manager's remuneration related to the mandate starting on 1 April
2024 and ending on 31 March 2025, i.e.:
a) Base Remuneration Rate" = 135 basis points per year
b) Distribution Fee"): 175 basis points applied to the value
of distributions taking place between 1 April 2024 and 31 March 2025.
For details, please refer to section 2 above.
1 (#_ftnref1) A summary of the Fund Manager remuneration policy is available
at
https://www.franklintempleton.lu/about-us/regulatory-information#remuneration
(https://www.franklintempleton.lu/about-us/regulatory-information#remuneration)
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