ARTICLES OF INCORPORATION OF RAIFFEISEN VOLUNTARY PENSION FUND

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1 In accordance with the Mandatory Pension Funds Act (Official gazette no. 19/2014, hereinafter: Act), the Management of Raiffeisen društvo za upravljanje obveznim i dobrovoljnim mirovinskim fondovima d.d., Zagreb, Heinzelova 44, on this day 16 December 2014 adopted the following Articles of Incorporation of Raiffeisen voluntary pension fund: ARTICLES OF INCORPORATION OF RAIFFEISEN VOLUNTARY PENSION FUND I. Introductory provision Article 1 The Articles of Incorporation of Raiffeisen Voluntary Pension Fund (hereinafter: Articles of Incorporation) regulate the fiduciary relationship between Raiffeisen društvo za upravljanje obveznim i dobrovoljnim mirovinskim fondovima d.d. (hereinafter: Company) and members of Raiffeisen Voluntary Pension Fund, and Raiffeisen Voluntary Pension Fund (hereinafter: Fund) and Fund members. Article 2 The Fund is a separate property without legal personality, and is established with the intention to collect financial assets through deposits into personal accounts of Fund members and increase the value of the Fund s property to ensure the payment of old age pensions to Fund members, all in accordance with the law. The Fund is owned by its members whose individual ownership rights are determined depending on the amount of assets on their personal accounts II. The basic rights, obligations and liabilities of the Company towards a Fund member and the Fund and the manner and conditions of their realization and protection Article 3 In accordance with the approval of the Croatian Financial Services Supervisory Agency (hereinafter: Agency), the Company manages the Fund and is responsible to Fund members for the orderly and conscientious performance of tasks proscribed by the Act, regulations adopted on the basis of the Act and the Fund s Prospectus. In case the Company fails to perform any task or duty proscribed by the Act or the Fund s Prospectus in whole or in part or irregularly, the Company shall be liable to Fund members for damage to Fund s 1

2 property resulting from an oversight of the Company in the performance and fulfilment of its obligations. Article 4 The Company shall: 1. be capable of meeting its matured obligations (the liquidity principle) on time, i.e. permanently capable of meeting all its obligations (the solvency principle), 2. manage the Fund so as to ensure that the Fund is capable of meeting its matured obligations (the liquidity principle) on time, i.e. permanently capable of meeting all its obligations (the solvency principle), 3. manage the Fund in accordance with investment limitations and proscribed riskiness of each managed Fund, 4. be responsible for timely, fair and efficient fulfilment of all its rights and obligations stipulated by the Act and the Fund s Prospectus, 5. establish supervisory systems and mechanisms truthfully showing that the Company has been acting in accordance with the Act and the Fund s Prospectus in the long term, allowing the supervision of all decisions, instructions and transactions involving Fund s property, 6. ensure that promotional materials, statements and reports to Fund members, whether delivered, published in the press or on the electronic public information media, be clear, accurate, not misleading and compatible with the Agency requirements, 7. obtain property for the Fund exclusively in its name and for the account of the Fund, depositing it with the Fund's depositary, in accordance with the Act, regulations adopted on the basis thereof and other applicable regulations, 8. submit to the Fund's depositary the copies of all original documents relating to transactions involving Fund s property, immediately upon the compilation or receipt of such documents, as well as all other documentation relevant for the performance of jobs and execution of duties of the Fund's depositary proscribed by the Act, regulations adopted on the basis thereof and other applicable regulations, 9. keep records of transactions involving Fund s property separately from its own records, accounts, as well as records of transactions of other pension funds, and coordinate them with the records of the Fund's depositary in regular intervals, 10. publish information about the Company and the Fund in accordance with the Act, regulations adopted on the basis thereof and other applicable regulations, 2

3 11. regularly submit to the Agency reports in keeping with the procedure stipulated by Agency regulations, 12. in relations with the Agency observe the principles of conscientiousness and fairness, 13. introduce, keep and allow insight into all records required by the regulations of the Agency fully, timely, accurately and truthfully, in the duration required by the Agency, 14. allow Agency timely insight into all its records and allow conversations with Company employees, 15. not enter into contracts aiming to reduce or alter responsibilities established by the Act, providing that all provisions of a contract concluded to that purpose shall be considered null and void, 16. charge one Management member with the maintenance of contact with the Agency for purposes of implementation of reporting and other correspondence activities proscribed by the provisions of the Act, 17. issue orders for the realization of rights relating to the Fund s property to the Fund's depositary, 18. ensure the assessment of the fair value of the property and obligations of the Fund and the accurate establishment of share value, 19. meet other requirements proscribed by the Act and regulations adopted on the basis thereof. The Company shall invest Fund s property with the due care of a good expert in keeping with the provisions of the Act, in the manner guaranteeing the safety, quality, liquidity and profitability of the entire Fund portfolio. Property shall be invested in the best interest of Fund members. In case of potential conflict of interest, the Company shall ensure the investment of property exclusively in the interest of Fund members. Article 5 The Company shall do the following for the Fund: 1. adopt the Fund s Prospectus, 2. adopt the Fund's Articles of Incorporation, 3. adopt and publish semi annual and audited annual reports, 4. develop key data for Fund members, and 5. regularly inform Fund members on other announcements relating to the Fund's operation in accordance with the Act. The latest versions of the Fund's documents and notifications from paragraph 1 of this Article shall be published on the Company's website. 3

4 Article 6 Company, as holder of the register of Fund members, shall hold in confidence as a business secret data on Fund members, the number of shares in the personal accounts of Fund members, payments, disbursements and transfers of personal accounts of Fund members. The Company may disclose the above data: 1. at the request of a Fund member, and even then only data pertaining to that particular Fund member, regardless of the provisions of the act governing the capital market in the part relating to the availability of data from the central depository, 2. to the depositary, 3. to persons who prove their legal interest, 4. to judicial and administrative bodies and other persons based on request and within the framework of authority in keeping with the provisions of a special act. The Agency shall have right of insight into the register of Fund members at all times. Article 7 Fund member shall: 1. inform the Company of any change of his/her personal data, e.g. change of name or place of residence, 2. inform the Company which voluntary pension fund the member wishes the state incentives to be paid into, if he/she is a member of more than one voluntary pension fund in the Republic of Croatia and 3. meet the conditions and fulfil legal obligations stemming from positive legal regulations, e.g. from the domain of prevention of money laundering and financing of terrorism. Article 8 Fund member may not realize voluntary pension insurance rights (realization of right to old age pension) prior to his/her 50th birthday. The right to old age pension may be realized earlier in case of death, under the conditions from the Fund Membership Contract. The Agency shall stipulate detailed conditions for the realization of right to old age pension and conditions and options for the payment thereof by an ordinance. In case that after the realization of the right to old age pension a Fund member decides to have his/her pension paid by a pension insurance company, the amount on the personal account of that Fund member shall be transferred to the pension insurance company of his/her choice, to be paid out as pension for the duration of the Fund member's life or temporarily. 4

5 The payment of pension by a pension insurance company shall be executed in keeping with the act governing the establishment and operation of pension insurance companies. Article 9 If following the realization of the right to old age pension the value of the property on the personal account of a Fund member is under HRK ,00, the Fund member may opt for the payment of the pension by the Fund, providing that only temporary pension payment may be made from Fund s property, under the following conditions: 1. the possibility of pension payment by the Fund is stipulated in the Fund s Prospectus, 2. minimum contracted payment period is 5 years, 3. payments are periodical, 4. funds are paid out as a counter value of a certain pre agreed number of shares at share price on payment day. The conditions of payment of the pension by the Fund shall be regulated by a separate contract between a Fund member and the Company. Temporary payment of the pension by the Fund from paragraph 1 of this Article shall not be subject to the payment of the exit fee. Article 10 After the conditions from Article 8, paragraph 1 of the Articles of Incorporation are met, the Company may disburse a part of the pension as a one off payment not exceeding 30% of the amount on the personal account of the Fund member or in a greater amount, but not exceeding HRK ,00. The Company may disburse all realized funds to a Fund member meeting the condition from Article 8, paragraph 1, if the value of property on his/her personal account, after the expiry of the contracted period from the Fund Membership Contract, does not exceed HRK ,00. The Company shall make this payment on the basis of the written request of a Fund member, one off, in full amount, and shall not have the authority to charge an exit fee. III. Basic rights, obligations and liabilities of the Company towards the depositary, depositary towards the Company and Fund members and Fund members towards the depositary Article 11 The Fund's depositary is Hypo Alpe Adria Bank d.d., Zagreb, Slavonska avenija 6. The depositary shall perform the following activities for the Fund: 5

6 1. store and/or record Fund's property, 2. continuously monitor the Fund's money flows, 3. keep accounts for the Fund's property and separate the Fund's property from the property of other pension funds, depositary's property and the property of other clients of the depositary and the Company, 4. control whether the Fund's property is invested in accordance with the stated goals, provisions of the Act, other applicable regulations and the Articles of Incorporation, 5. report to the Agency and the Company on the conducted procedure of the establishment of the value of the Fund's property and price of shares, verify and ensure that the calculation of the Fund's net property and the value of the share in the Fund is published in keeping with the adopted accounting policies, i.e. assessment methodologies, the Act and applicable regulations, 6. execute orders of the Company relating to transactions involving the financial instruments and other property constituting the Fund's property, providing such orders are not contrary to the Act and applicable regulations, 7. report to the Company on corporate actions involving the Fund's property entrusted to the depositary for safekeeping and execute any resulting orders of the Company, 8. provide the services of voting at annual shareholder assemblies and services relating to the realization of other rights stemming from financial instruments into which the Fund's property is invested, 9. receive the payments of all revenues and other rights received to the benefit of the Fund, stemming from its property, 10. ensure that the revenues of the Fund are used in accordance with the Act, regulations adopted on the basis thereof, the Articles of Incorporation and the Fund s Prospectus and that the costs paid by the Fund are compatible with the provisions of the Act, regulations adopted on the basis thereof, other regulations,the Articles of Incorporation and the Fund s Prospectus, 11. perform other jobs provided for in the contract on the performance of jobs of a depositary, 12. report to the Agency every grave or serious violation of the Act and contract on the performance of jobs of a depositary by the Company and 13. allow access and exchange information on the data and accounts related to the Fund and its property with auditors and other persons authorized for the performance of insight, including the Agency. The depositary shall perform the activities proscribed by the Act on the basis of a written contract on the performance of jobs of a depositary concluded with the Company and must be willing and able to 6

7 fulfil all organizational requirements and conditions for the performance of activities of the depositary in accordance with the provisions of the Act. During the performance of his duties and obligations, the depositary shall act exclusively in the interest of the members of the Fund he is a depositary of. The depositary shall treat any and all data made available to him pursuant to the provisions of the Act as a business secret. The depositary shall keep and manage the Fund's property in a manner allowing the Fund's property to be determined and distinguished from the property of the depositary and other clients of the depositary at any moment. The safekeeping and administrative jobs, as well as other tasks performed by the depositary for the Company must be organizationally separate from all other jobs performed by the depositary in accordance with the act governing the establishment and operation of credit institutions. During the performance of activities of a depositary for several voluntary pension funds, the assets, activities and records of all pension funds shall be completely separated, mutually and from the depositary. When the depositary is entrusted with the safekeeping of the Fund's property, the depositary shall apply appropriate measures required to protect the ownership rights and other rights of the Fund, especially in the event of insolvency of the Company and the depositary. Article 12 During the performance of his activities and duties stipulated by the Act and contract on the performance of jobs of a depositary, the depositary shall act with the due care of a good expert, abiding by the principles of conscientiousness and fairness, independently from the Company, its founder or Company member, exclusively in the interest of Fund members. The depositary shall execute the orders and instructions of the Company exclusively if they are in conformity with the provisions of the Act, regulations adopted on the basis thereof, the Fund s Prospectus and the Articles of Incorporation. The depositary is liable to the Fund and Fund members for any loss of assets caused by the depositary or any third party the depositary entrusted with the safekeeping of the financial instruments of the Fund. Article 13 The depositary is authorized and obligated to realize the requests and rights of Fund members towards the Company in its own name and for the account of Fund members, due to a violation of the provisions of the Act, regulations adopted on the basis thereof, the Fund s Prospectus and the Articles of Incorporation. The aforementioned shall not prevent Fund members to individually and independently realize their property rights requests towards the Company for the stated reasons. 7

8 The depositary shall return into the Fund's property everything paid out from such property without a valid legal basis. Article 14 The Company is authorized and obligated to realize the rights of Fund members towards the depositary in its own name. In case the Company does not lodge a complaint for the realization of these rights within 60 days from the date of violation of the Act, regulations adopted on the basis thereof or the Fund s Prospectus and Articles of Incorporation, the Fund members shall have the right to take appropriate action, including to directly lodge complaints. IV. Basic information on the conditions and supervision of Company operation Article 15 To do business, the Company shall obtain the required approvals from the Agency, coordinate its operation and meet the requirements proscribed by the Act and other relevant legal regulations. To obtain the approval to do business from the Agency, the Company shall meet the following requirements: 1. requirements pertaining to the payment of share capital, 2. requirements pertaining to Company founders, Management and Supervisory Board members and any related persons the Company is cognizant of Company founders, Management and Supervisory Board members and any related persons the Company is cognizant of must be financially stable, appropriate and adequate for doing this type of business, 3. additional requirements relating to Company Management and Supervisory Board members Company Management and Supervisory Board members must meet the requirements for the issuance of Agency's approval for the performance of functions of Company Management and Supervisory Board member, 4. additional requirements relating to Company founders Company founders must meet organizational requirements proscribed by the Act and regulations adopted on the basis thereof, 5. additional requirements relating to Company operation the Company must transact business in accordance with the Act and regulations adopted on the basis thereof, 6. requirements relating to the Articles of Incorporation of the Company the Articles of Incorporation must be compatible with the provisions of the Act, 8

9 7. requirements relating to Company corporation Company corporation must not mislead present and potential Fund members, nor other persons wishing to do business with the Fund. The Company shall meet the above requirements for the entire duration of its business operation. Article 16 The Agency shall supervise the operation of the Company in accordance with the Croatian Financial Services Supervisory Agency Act (Official gazette no. 140/2005, 154/2011 and 12/2012), the Act, regulations adopted on the basis of the Act and other applicable regulations. During the performance of the supervision the Agency shall especially verify organizational conditions, strategies, policies and procedures established by the subject of supervision to harmonize its operation with the provisions of the Act and regulations adopted on the basis thereof and verify and assess the financial stability and standing of the subject of supervision and the risks the subject of supervision is or could be exposed to in the course of its operation. V. Membership in the Fund Article 17 Membership in the Fund commences with the conclusion of the Fund Membership Contract with the Company and entry into the Company's register of Fund members. A person may simultaneously be a member of one or more voluntary pension funds. Article 18 The relationship of the Company and Fund member is based on the Fund Membership Contract. Fund Membership Contract is considered concluded upon the acceptance of the Fund s Prospectus and Articles of Incorporation by a potential Fund member, providing the payment of the first deposit into the Fund was made. The contract of membership binds the Company to recalculate payments into the personal accounts of a Fund member into shares, make corresponding entries into the register of Fund members, manage the Fund for the joint account of members and undertake any and all other legal actions required for managing the Fund in accordance with the provisions of the Act, regulations adopted on the basis thereof, Fund s Prospectus and Articles of Incorporation. The Company may refuse conclusion of the Fund Membership Contract if: 1. the relations between the Company and a potential Fund member are gravely disrupted (e.g. pending court or other proceedings), 9

10 2. there is reasonable doubt in actual, attempted or possible future money laundering or financing of terrorism, in keeping with applicable regulations. If the Company refuses the conclusion of the Fund Membership Contract, it shall inform the relevant potential Fund member thereof. Article 19 Membership in the Fund shall be terminated: 1. when a Fund member opts for the disbursement of his/her pension by a pension insurance company; his/her membership shall cease with the transfer of funds to the member's selected pension insurance company, 2. when a Fund member opts for the disbursement of his/her pension by the Fund; his/her membership shall not terminate with the conclusion of the contract on the conditions of disbursement of pension by the Fund between the member and the Company, but only after the disbursement of the final pension instalment in accordance with the provisions of that contract, and 3. when a Fund member decides to abandon the Fund under the conditions and in the manner stipulated in the contract of membership. Still, if the conditions for the realization of right to old age pension are not fulfilled in accordance with Article 8 of the Articles of Incorporation, termination of membership shall be possible only in the event of simultaneous entry into membership of another voluntary pension fund. Likewise, if a Fund member may, within 15 days from the date of first payment into his/her personal account in the Fund, terminate the contract of membership by a written statement to the Company, without stating any reasons for his/her decision. In this case, the Company shall refund the paid in amount to the member, reduced by the entry fee and fees encumbering the Fund's property, all modified to account for the Fund's realized yield. VI. Procedure of compensation for damage to Fund members in the event of incorrect calculation of the price of shares and violation of investment limitations Article 20 The Company shall be liable to Fund members for any damage resulting from the incorrect calculation of the price of shares and violation of investment limitations proscribed by the Act. Incorrect calculation of share price 10

11 The procedure of compensation for damage in case of incorrect calculation of share price shall be conducted if: 1. the balance between the initially calculated and subsequently correctly established price of a share for the same day exceeds 1% (significant miscalculation) and 2. no more than 1 (one) year elapsed from the said incorrect calculation of share price, except if an auditor establishes an incorrect calculation of share price in the scope of audit of financial reports in the current year for the previous year. Calculation of increased share price occurred if the initially calculated price of a share is higher than the subsequently correctly established price of a share for the same day. In case of significant miscalculation resulting in the establishment of increased share price, the Company shall ensure the correction of the share price for members who acquired shares in the Fund during the period of incorrect calculation. In case of significant miscalculation resulting in the establishment of increased share price, the Company shall compensate the resulting damage suffered by the Fund, if any payments were made from the Fund during the period of incorrect share price calculation, in accordance with Articles 124, 125, 126, 127 and 128 of the Act or in the event of transfer of funds to another pension fund during that same period. Calculation of decreased share price occurred if the initially calculated price of a share is lower than the subsequently correctly established price of a share for the same day. In case of significant miscalculation resulting in the establishment of decreased share price, the Company shall compensate the resulting damage suffered by Fund members, to whom payments were made from the Fund in accordance with Articles 124, 125, 126, 127 and 128 of the Act or who transferred their financial means to another pension fund during the period of incorrect share price calculation, by disbursing the financial means to the account of the member in the new pension fund, pension insurance company or Fund member, in keeping with the procedures for the payment of financial means from the pension Fund. For each day of the miscalculation period, the Company shall make a new calculation of the share price in accordance with the Act and Ordinance adopted pursuant to Article 107, paragraph 4 of the Act. The procedure of compensation for damage in case of significant miscalculation of share price consists of the compilation of the compensation for damage plan, notifying members on the compensation for damage and payment of the compensation for damage by the disbursement of the established compensation to injured Fund members and/or the Fund. The Company shall, without undue delay, but no later than within 60 days after becoming aware of the incorrect calculation, make the compensation for damage plan and immediately deliver it to the Agency. 11

12 When the Company is obligated to pay compensation for damage to injured Fund members due to a significant miscalculation of the share price, the Company shall make the notification on the significant miscalculation of share price available to Fund members through its website, without delay, after the compilation of the compensation for damage plan. After the Company compiles the compensation for damage plan, it shall disburse the compensation to the injured Fund members and/or the Fund without delay. Violation of investment limitation Violation of investment limitation shall mean the violation of limitation of investments resulting from transactions concluded by the Company, which, at the moment of their conclusion, violated limitations from the provision of Article 164, paragraph 4 of the Act. The procedure of compensation for damage in case of violation of investment limitation shall be initiated: 1. when the violation of investment limitation exceeds 10% of the total allowed investment in the sense of Article 164, paragraph 4 of the Act, 2. if no more than 1 (one) year elapsed from the violation of investment limitation, except if an auditor establishes a violation of investment limitation in the scope of audit of financial reports in the current year for the previous year. The Company shall, immediately after becoming aware of the violation of investment limitation, adjust investments by undertaking transactions necessary for the complete elimination of violation of investment limitation or in another appropriate manner. The Company shall adjust investments so as to completely eliminate the violation of investment limitation. If the execution of transactions or adjustment of investments in another appropriate manner generates profit, such profit shall be allocated to the Fund. If the execution of transactions or other actions which violated investment limitation causes loss, the Company shall compensate the Fund for such loss by disbursing an amount corresponding to the balance between the purchase and selling price of assets which was cause for the violation of investment limitation. In case that violation and the elimination thereof were not caused by the sale or purchase of a property item, but otherwise, the Company shall compensate such loss by disbursing an amount corresponding to the balance of the value of property which was cause for the violation of investment limitation on the day of occurrence of investment limitation and the value of property realized by investment adjustment. In this event, the Company shall compensate the resulting damage suffered by Fund members, to whom payments were made from the Fund in accordance with Articles 124, 125, 126, 127 and 128 of the Act or who transferred their financial 12

13 means to another pension fund during the period between investment adjustment and the compensation of loss to the Fund by the Company, by disbursing the financial means to the account of a member in a new pension fund, pension insurance company or Fund member, in keeping with the procedures for the payment of financial means from the pension Fund. The procedure of compensation for damage in case of violation of investment limitation consists of the compilation of the compensation for damage plan, notifying members on the compensation for damage and payment of the compensation for damage by the disbursement of the established compensation to injured Fund members and/or the Fund. After the compilation of the compensation for damage plan, the Company shall immediately disburse the compensation for damage to injured pension fund members and/or pension fund. VII. Data on the conflict of interest and the manner of its resolution Article 21 Potential conflict of interest exists in every situation in which the Company and its related and relevant persons (person holding a managing function in the Company, stockholder of the Company, Supervisory Board member or procurator of the Company, Company employee) in the framework of the execution of their activities might have interests in conflict with the interests of the Fund members. The Company shall, taking into account the type, scope and complexity of operation, organize business so as to reduce the risk of the conflict of interest between the Company and Fund members or related persons of the Company or the Fund, i.e. holder of a qualified share in the Company, to the minimum. The Company, i.e. members of Company Management and Supervisory Board, procurators and employees shall take all reasonable measures to avoid conflict of interest and if such conflict is inevitable, identify, manage and make them publicly known, when applicable, to prevent any detrimental effect on the interests of the Fund and Fund members and ensure the fair treatment of Fund members. The Company established efficient and appropriate rules for the identification, management, monitoring and prevention of conflict of interest, and established an independent function of a legal support and conformity advisor, responsible for the application and monitoring of such rules. 13 Article 22 The conflict of interest management rules aim to ensure:

14 1. the adjustment of conflict of interest related operation of the Company with legal regulations and best industrial practice, 2. the establishment of ethical rules ensuring the conduct of the Company in accordance with the best interests of Fund members, 3. trust of Fund members. During the procedure of identification of conflict of interest, possibly detrimental to the interests of Fund members, the following situations shall always be considered possible conflicts of interest: 1. The Company and its related and relevant persons could realize financial profit or avoid financial loss at the expense of Fund members, 2. The Company and its related and relevant persons have an interest or benefit from the outcome of a service provided to the Fund or transaction executed to the account of the Fund, different from the interest of Fund members, 3. The Company and its related and relevant persons have a financial or other motif to discriminate in favour of a third person at the expense of Fund members, 4. The Company and its related and relevant persons are receiving or will receive from a third person additional stimulus relating to the management of the Fund's property, in the form of cash, goods or services, apart from the normal fee or compensation for the service provided, and 5. Trading between funds under Company management. By establishing independent organizational units, the Company strictly separated individual business domains and delineated responsibilities, thus reducing the possible conflict of interest between the Company and Fund members to the minimum. When making investment decisions, situations potentially leading to conflict of interest may include: 1. investment in financial instruments the agent of issuance of which is a Company stockholder or related persons, 2. stockholder of the Company or related persons have an interest in investment in certain financial instruments, 3. acquisition of shares in business entities with the intent of giving a Company stockholder or related persons a certain degree of control in that business entity, 4. investment in financial instruments in case of special arrangements between the instrument issuer and a Company stockholder or related person, 5. voting at the assembly of a business entity which is partially or in whole owned by a Company stockholder or related person. 14 Article 23

15 To prevent the negative consequences possibly arising from the conflict of interest, the Company shall: 1. decide on investment of Fund's property and realize voting rights stemming from the Fundowned securities independently from Company stockholder or related persons, 2. ensure that all potential or actual conflicts of interest with a Company stockholder or related persons are documented and reported to the legal support and conformity advisor, 3. organize business so as to reduce the risk of conflict of interest to the minimum, 4. take all reasonable steps to avoid the interests of the pension funds under its management and their members being jeopardized during the performance of services and activities, 5. take all reasonable steps to identify, discover and prevent or resolve conflicts of interest and establish the appropriate criteria for the establishment of types of conflicts of interests which could be detrimental to the interests of the pension funds under its management and members thereof, 6. implement and regularly update and monitor efficient conflict of interest management policies, 7. establish, implement and regularly update policies on the personal transactions of relevant persons and persons related or having family ties with such persons, involving financial instruments invested in by the pension funds under Company management. Article 24 The Company shall always put the interest of the Fund and its members before the interests of the Company and any related and relevant persons. Relevant persons of the Company shall not have the right to a reward or compensation stemming from their membership in the Supervisory Board of a company based on the Fund's ownership over stocks or shares of such company, with the exception of the right to compensation of travel and other justified expenses. The Company adopted and implemented clear reward policies for the Management and all Company employees to prevent the conflict of interest and assumption of inadequate risks not compatible with the risk profile or the Articles of Incorporation. Company employees must ensure that their personal interests do not come into conflict with their duties towards the Company or the duties of the Company towards the Fund and Fund members. This includes, without limitation, misuse of confidential information. Personal transactions are all transactions involving financial instruments, conducted by Company employees outside the scope of their official duties for their own account, for the account of third 15

16 persons, in the interest of third persons or performed by third persons for the account of an employee or in the interest of an employee. For personal transactions with securities, Company employees must obtain prior approval of the legal support and conformity advisor. Company employees are forbidden from performing personal transactions based on privileged information or transactions possibly having a detrimental effect on the reputation of the Fund or the Company. Article 25 Trading between two pension funds under Company management is allowed only if beneficial for the interests of both pension funds, without jeopardizing the basic determinants of their investment strategies. To avoid conflict of interest, the Company shall contract transactions between pension funds under its management exclusively through a mediator on a regulated market. The Company shall not perform any transaction, nor transfer any property between two pension funds under its management at the price deviating from the market price applicable at the moment of performance of such transaction or transfer of property. While performing the above mentioned transactions or transfers of property, the Company shall ensure that no circumstances occur which would bring one pension fund under Company management into a more favourable position in relation to the other fund. Every transaction or transfer of property between pension funds under Company management shall be entered into a transaction records and monitored by the legal support and conformity advisor. The goal of the above measures and procedures in the event of contracting transactions or transfers of property between pension funds under Company management is to ensure maximum protection of the interest of members of such pension funds. VIII. Settlement of disputes between the Company and Fund members Article 26 The Company shall attempt to settle any disputes between the Company and Fund members consensually. Should this attempt fail, the disputes shall be settled before the competent Zagreb court. The Company can also regulate the procedure and conditions for out of court settlement of disputes from paragraph 1 of this Article through a professional association of pension funds. 16

17 IX. Conditions for status changes of the Fund and rights of Fund members in the status change procedure Article 27 Possible status changes of the Fund, as an open voluntary pension fund, are amalgamation, merger and division. Status changes shall be allowed only with the prior approval of the Agency, if they do not weaken the economic position of Fund members participating in the status changes. Members of voluntary pension funds participating in the status changes shall realize the following rights in the status change procedure: 1. after fund amalgamation or merger, members of the transferring fund obtain shares in the acquiring fund depending on the exchange ratio agreed in the contract of merger, 2. the total value of all shares of the acquiring fund, i.e. new fund in the possession of an individual voluntary pension fund member after the status change of amalgamation or merger, shall not be lower than the total value of shares of the transferring fund of whose shares such member was a holder prior to the execution of the status change, and 3. transfer into another voluntary pension fund shall be allowed to members of the voluntary pension fund participating in the status change, without payment of the exit fee: within two months from the date of delivery of notification of reorganization, within two months after amalgamation or merger to members of the transferring and acquiring funds and within two months from the date of delivery of notification of division to members of the voluntary pension fund participating in the division. Fund amalgamation shall only be allowed in the form of transfer of the entire property of one or more amalgamating funds (transferring fund) to another fund (acquiring fund). Fund merger shall only be allowed in the form of transfer of the entire property of one or more amalgamating funds (transferring fund) to the fund established by the merger (acquiring fund). With the execution of fund amalgamation or merger, the transferring fund ceases to exist without liquidation and all the property, rights and obligations of such fund are transferred to the acquiring fund. After the performance of the status change of amalgamation or merger, the net value of the property of the acquiring fund, i.e. the new fund, shall be at least equivalent to the amount of the net value of the property of the transferring fund, i.e. to the sum of the net value of the property of transferring funds prior to the performance of the status change. The total value of all shares of the acquiring fund, i.e. new fund in the possession of an individual fund member after the status change 17

18 of amalgamation or merger, shall not be lower than the total value of shares of the transferring fund of whose shares such member was a holder prior to the execution of the status change. Prior to the execution of the amalgamation or merger procedure, pension fund management company of the transferring fund must obtain the approval of the Agency. Pension fund management company of the transferring fund shall inform all members of the transferring fund on all actions and circumstances of amalgamation, i.e. merger, to allow the members to assess the consequences thereof for their property in the transferring fund. Fund division may be performed by the transfer of the entire property into two or more funds, with the cessation of the divided fund or by the transfer of a part of its property into two or more funds, without the cessation of the divided fund (spin off). The division can be effected to two or more previously existing funds (division with takeover acquiring funds) or to two or more funds established to effect the division (division with establishment new funds). After the performance of the status change of division, the net value of the property of the acquiring fund, i.e. new funds, shall be at least equivalent to the amount of the net value of the property of the divided fund prior to the performance of the status change. The total value of all shares of funds to which the property of the divided fund is transferred, in the possession of an individual fund member, after the performance of the status change shall be at least equivalent to the total value of shares of the divided fund in the possession of such member prior to the performance of the status change. The request for the issuance of approval for division shall be submitted to the Agency by the pension fund management company of the fund being divided. Pension fund management company of a fund participating in the division shall inform all fund members on all actions and circumstances of division (notification of division) to allow the members to assess the consequences thereof for their property in the fund. X. Rights of Fund members and conditions of transfer into a voluntary pension fund managed by the Company or another pension company Article 28 In case of amalgamation, merger and division, Fund members shall have the right to transfer to another voluntary pension fund, managed by the Company or another pension company, without payment of the exit fee, pursuant to Article 23 of the Articles of Incorporation. XI. Fund management costs and compensations from Fund s property 18

19 Article 29 Exclusively the following may be paid from Fund s property: 1. for the Company, to cover the Fund's expenses, in accordance with the Fund s Prospectus and the Articles of Incorporation, the following fees: entry fee, management fee, exit fee, Fund audit cost fee, 2. depositary's fee, 3. costs, fees or charges relating to the acquisition or sale of the property of the Fund, including the necessary costs of safeguarding, i.e. preservation of Fund s property. XII. Closing provisions Article 30 The provisions of these Articles of Incorporation may only be amended in the manner proscribed by the Act and the provisions hereof. In case of change of regulations or drop of liquidity on financial markets, the Company shall, to protect the interest of Fund members, modify the investment plan to new circumstances on the market and amend the provisions hereof in accordance with the Act. Article 31 The original of the Articles of Incorporation is the version of the Articles which is validly adopted by Company Management and approved by the Agency. The original of the Articles and its amendments shall be stored in a special binder. Company Management shall be liable for the safekeeping of the Articles, which shall allow any Fund member, at request, an insight into the Articles or provide such member a copy of the Articles at the member's expense. Article 32 The Company shall obtain the approval of the Agency for these Articles of Incorporation, in accordance with the provisions of the Act. Article 33 19

20 The Articles of Incorporation shall enter into force and effect, provided the approval from Article 28 hereof is obtained, seven days after their publication. Company Management: Damir Grbavac, CEO PhD Srećko Žganec, member of Management Manda Zulić, member of Management 20