Management Board of Grupa LOTOS

The Management Board represents the Company and runs all the corporate businesses of Grupa LOTOS. This does not concern any issues that are reserved for the competences of the Shareholders’ Meeting or the Supervisory Board or that exceed the scope of the regular management, require the earlier resolution of the Management Board or any issues that are reserved in the Regulations of the Management Board for its individual Members.

In 2008, the Management Board held 46 meetings and passed 154 resolutions.

Composition of the Management Board of Grupa LOTOS in 2008:
Paweł Olechnowicz – President of the Management Board
Marek Sokołowski – Vice-President of the Management Board
Mariusz Machajewski – Vice-President of the Management Board

Mariusz Machajewski Vice-President of the Management Board Economic-Finance Director of Grupa LOTOS S.A.	Marek Paweł Sokołowski Vice-President of the Management Board, Production and Development Director of Grupa LOTOS S.A	Paweł Olechnowicz President of the Management Board, Chief Executive Officer of Grupa LOTOS S.A
Mr Machajewski is a graduate of the Faculty of Economics at the University of Gdańsk. Moreover, he attended a number of specialist training courses in management and economics in Poland and abroad. In 1994-1997, he worked at Stocznia Gdynia S.A. (Gdynia Shipyard). In 1997, he joined Rafineria Gdańska S.A. (currently Grupa LOTOS S.A.), and in 1999, he was placed in charge of managing the Company’s controlling functions. Since mid-2002, he has held the position of Economic-Finance Director. In the period from April 2005 to June 2006, he also served as the Company’s attorney. Mr Machajewski has been the Vice-President of the Management Board at Grupa LOTOS since 19 June 2006. He manages and bears the responsibility for all economic, financial and accounting issues of the Company.	Mr Sokołowski graduated from Gdańsk University of Technology (the Faculty of Electrical Engineering), completed a post-graduate course in Industrial Investments and attended a number of specialist management courses in Poland and abroad. Mr Sokołowski has worked at Rafineria Gdańska S.A. (currently Grupa LOTOS S.A.) since 1973. In 1990, Mr Sokołowski became the Technical Director and a Management Board member. For three consecutive terms in office, he was in charge of plant engineering at the refinery and execution of investment projects. Throughout 1996-2000, he managed the development and modernization plan of the Gdańsk refinery. Mr Sokołowski has served as the Vice-President of the Management Board of Grupa LOTOS since 19 April 2002. He manages, coordinates and supervises all issues of the Production Division, the Technical Division, the Technology Development Division and the Refinery Development Division, which is implementing the 10+ Programme and he bears all the related responsibilities.	Mr Olechnowicz graduated from Cracow University of Technology (the Faculty of Technology and Mechanisation of Foundry Engineering), completed a post-graduate course in Organization, Economics and Industrial Management at Gdańsk University of Technology and the MBA INSEAD and attended many specialist courses in management, both in Poland and abroad. He started his professional career in 1977 in Zakłady Mechaniczne ‘Zamech’ in Elbląg (since 1990 ABB Zamech Sp. z o.o.). In 1990-1996, he was President of the Management Board and Director General of ABB Zamech Ltd. Subsequently, for three years, Mr Olechnowicz worked at the headquarters of ABB Ltd Zurich in Switzerland as Vice-President for Central and Eastern Europe. In 1999-2000, Mr Olechnowicz was Vice-President and Deputy Director General of ZML Kęty S.A., and from 2001, managed his own consulting company: Paweł Olechnowicz-Consulting. Mr Olechnowicz has served as the President of the Management Board of the Grupa LOTOS since 12 March 2002. He manages and is responsible for all operations of the Grupa LOTOS. He is also serving as the Vice-President for Commerce and Vice-President for Exploration and Production until the designation of new members of the Management Board.

Rules of remunerating the Members of the Management Board

The rules of remunerating the Members of the Management Board at Grupa LOTOS are determined by the General Shareholders’ Meeting upon the motion by the Supervisory Board of the Company.

Pursuant to the declaration by the Management Board of Grupa LOTOS concerning compliance with corporate governance, the remuneration of the Members of the Management Board should be based on transparent procedures and rules in order to provide incentives and the effective and sound management of the Company. Remuneration should correspond to the size of the Company and be reasonably related to its economic results. Moreover, it should be related to the scope of responsibilities resulting from the function held and take account of the remuneration of management boards in similar companies on a comparable market.

Remuneration for the Members of the Management Board in Grupa LOTOS is subject to the limitations and rules specified in the Act of 3 March 2000 on remuneration of managers in certain legal entities (Journal of Laws No. 26 from 2000, Item 306 with subsequent amendments) and in administrative proceedings issued thereupon. The Act applies to the commercial law companies in which the Treasury has more than 50% of the authorised capital or 50% stocks.

Pursuant to the Act of 18 August 2000, the Extraordinary General Shareholders’ Meeting determined the following rules of remuneration and employment for the Members of the Management Board:

1. Members of the Management Board are entitled exclusively to a monthly remuneration amounting to:
• the President of the Management Board – not exceeding 4-times the average monthly remuneration in the sector of enterprises without a profit share in the fourth quarter of the preceding year as announced by the President of the Main Statistical Office. The value of the monthly remuneration of the President of the Management Board is determined in a separate resolution of the General Shareholders’ Meeting,
• the Vice-President of the Management Board – not exceeding 3.9-times the average monthly remuneration in the sector of enterprises without a profit share in the fourth quarter of the preceding year as announced by the President of the Main Statistical Office. The value of the monthly remuneration of the Vice-President of the Management Board is determined in a separate resolution of the General Shareholders’ Meeting,
• a Member of the Management Board – not exceeding 3.9-times the average monthly remuneration in the sector of enterprises without a profit share in the fourth quarter of the preceding year as announced by the President of the Main Statistical Office. The value of the monthly remuneration of a Member of the Management Board is determined in a separate resolution of the General Shareholders’ Meeting,
2. If the Company is classified as an entity of special importance for the state, the value of the remuneration specified in Item 1 is increased by 50% according to the procedure specified in Article 9 of the Act on remunerating persons managing certain legal entities.
3. The costs of remuneration, irrespective of the basis of the employment relation or the type of job contracts, encompasses all elements of remuneration resulting from the rules of labour law.
4. In the event of a dismissal from a position or the dissolving of a job agreement for reasons other than the violation of basic employee obligations, the President, the Vice-President and the Members of the Management Board may be granted severance pay amounting to at least three-times the monthly remuneration.

Moreover, in compliance with the Act of 3 March 2000 on remunerating persons managing certain legal entities (Journal of Laws from 2000, No. 26, Item 306 with subsequent amendments) and the Regulation by the Minister of the Treasury of 12 March 2001 on special rules and modes of granting annual bonuses to persons managing certain legal entities (Journal of Laws from 2001, No. 22. Item 259), Members of the Management Board may receive an annual bonus. The annual bonus may be granted if the Company:

• has improved its financial results,
• has strengthened its market or sectoral position,
• has effectively implemented a restructuring or development plan,
• has not exceeded the maximum annual index of increasing an average monthly remuneration, and
• pays all its public and legal liabilities in a timely manner.

A bonus may be granted if the financial statements are approved. A Member of the Management Board is entitled to a bonus if he/she worked in this position for the whole financial year and did not violate his/her obligations in this period, the job contract was not terminated by his/her fault and the management agreement was not terminated and he/she was not dismissed for reasons that are the basis for the termination of the job contract without notice.

According to the regulations, the maximum bonus equals 3-times the average monthly remuneration in the preceding year.

The decision to grant the annual bonus to the President of the Board is taken by the General Shareholders’ Meeting upon the motion of the Supervisory Board, while for other members of the Management Board by the Supervisory Board.

Only Mr Sokołowski, the Vice-President of the Management Board, holds stocks of Grupa LOTOS (8 636 stocks). Other members of the Management Board do not hold any stocks of the Company.