Statute

Pursuant to the decision of the Terme Čatež PLC General Meeting of Shareholders of 18 July 2006, the Supervisory Board, at the meeting held on 6 March 2007, adopted the fair copy of the Statute as follows:

STATUTE OF THE PUBLIC LIMITED COMPANY
(consolidated text)

ONE: COMPANY NAME AND HEADQUARTERS

One-one (1.1): The name of the Company is: Terme Čatež PLC, Čatež ob Savi (hereinafter referred to in the Statute as: the Company
One-two (1.2) The short name of the Company is: Terme Čatež PLC
One-three (1.3): Registered office of the compnay: Čatež ob Savi, Topliška 35, 8251 Čatež ob Savi  
One-four (1.4): Constituent part of the company is a brand-mark*****. Descrition of the: above the base blue-black line is the blue-colour inscription: TERME ČATEŽ (letter-type: optima blond), with a blue overhead arch in the centre of which a blue water-drop is centered). Colour definition: pantone 215-1, C=100 %, M=40%, Y=0 %, K=10. 

TWO: PERFORMANCE

Two-one(2.1): The company performs the following businesses:

• A/01.131 Wine-growing
• A/01.132 Fruit growing
• B/05.010 Fishing
• B/05.020 Fish-breeding
• DA/15.520 Ice-cream production
• DA/15.520 Bakery (all kinds of bread, sweets)
• DA/15.520 Production of toast, cookies, sweets
• DA/15.910 Production of brandies
• F/45.110 Demolition of buildings and landscaping/rural works
• F/45.210 General construction works (masonry)
• F/45.220 Carpentry
• F/45.250 Other construction works, also specialized
• F/45.310 Wiring
• F/45.330 Plumbing
• F/45.410 Building front-works and painting
• F/45.420 Installation of timber- constructions and other furniture
• F/45.230 Floor covering and tapestry
• F/45.441 Room decorating
• F/45.442 Room painting
• F/45.450 Other final works
• G/52.110 Retail trading in non-specialized shops, predominantly foodstuffs
• G/52.120 Retail trading in other non-specialized shops
• G/52.210 Retail trading with fresh grocery
• G/52.220 Retail trading with meat and meat products
• G/52.230 Retail trading with fish, cray- and shellfish
• G/52.240 Retail trading with bread, cookies, pastry, sugar products
• G/52.250 Retail trading with alcoholic drinks and non-alcoholic refresments
• G/52.260 Retail trading with tobacco products
• G/52.270 Retail trading in other specialized provisions shops
• G/52.330 Retail trading with cosmetic and hygienic produts
• G/52.410 Retail trading with drapery
• G/52.420 Retail trading with clothing
• G/52.430 Retail trading with shoes and leather products
• G/52.450 Retail trading with electric kitchen utensils, radios and TV-sets
• G/52.471 Bookshop business
• G/52.472 Retail trading with newspapers and magazines
• G/52.473 Stationery business
• G/52.481 Retail trading with sports equipment
• G/52.482 Florist shops
• G/52.485 Retail trading with watches, jewellry and trinkets
• G/52.486 Retail trading with works of arts
• G/52.487 Retail tradingwith toys and utensils for infats
• G/52.488 Retail trading in other specialized shops
• G/52.620 Retail trading on open markets and stands
• G/52.630 Other retail trading outside the shops
• G/51.310 Wholesale of fruit and grocery
• G/51.320 Wholesale of meat and meat products
• G/51.330 Wholesale of milk & milk products, eggs, kitchen oil and fats
• G/51.340 Wholesale of alcoholic drinks and refreshments
• G/51.390 Non-specialized wholesale of provisions, drinks and tobacco products
• H/55.100 Hotel- and similar businesses
• H/55.220 Camping business
• H/55.231 Infant holidays resort, vacations resort, family holiday-makers resort
• H/55.239 Other short-time lodging
• H/55.301 Restaurant & inn-business
• H/55.302 Pub & self-service reastaurants business
• H/55.303 Sweetshop, caffe-shop and brasserie business
• H/55.304 Chippies, dens
• H/55.400 Tavern, inn, public bar business
• H/55.510 Public kitchen business
• H/55.520 Catering
• I/63.300 Travel agency & tour-operator business and other tourism related activities
• J/65.220 Other creditor businesses
• J/65.230 Other financial procurement businesses
• J/67.120 Brokerage
• J/67.130 Supporting businesses related to financial procurement
• K/70.110 Arrangement of real-estate projects to be put on market
• K/70.120 Trading with own real-estates
• K/70.200 Leasing of own real-estates
• K/70.320 Managing of  real-estates for money or under contract
• K/71.100 Rent-a-car busniness
• K/71.100 Renting of other vehicles
• K/71.330 Renting of office equipment and hardware
• K/71.401 Renting of sports equipment
• K/71.403 Renting of other commodities
• K/74.110 Legal advisory
• K/74.130 Market research and  public-opinion poll
• K/74.140 Management- and business consultancy
• K/74.150 Holdings
• K/74.201 Geologic metrology, geology-, geophysical- geochemical and other monitoring, recording, chart-surveys
• K/74.204 Other projects and technical advising
• K/74.400 Sales-promotion
• K/74.851 Translating
• K/74.852 Photocopying and other means of multiplication
• K/74.853 Other general secretary business
• K/74.871 Organization of exhibitions, vernisages, fairs and congresses
• K/74.873 Other business activities
• M/80.422 Providing other types of education, further training, professional training, on-the-job training, continuing training etc…
• N/85.110 Hospital care and treatment at a health resort
• N/85.121 General ex-hospital care & health treatment
• N/85.122 Specialized ex-hospital care & health treatment
• N/85.130 Dental care
• N/85.141 Private health-care not performed by the physicians
• N/85.142 Alternative medicine
• N/85.143 Other medical treatments
• O/90.010 Waste-water treatment
• O/90.032 Other public-sanitary activities
• O/92.310 Artistic creation and reproduction
• O/92.320 Venues attended for organization of cultural events
• O/92.330 Organization of fairs and leasure parks
• O/92.340 Other recreation and relaxation activities
• O/92.61   Sports halls & gymnasiums
• O/92.621 Marines
• O/92.711 Gambling
• O/92.712 Casinos
• O/92.720 Other entertainment activities
• O/93.010 Laundry and dry-cleaning
• O/93.021 Hair-styling and hair-dressing
• O/93.022 Cosmetic studios
• O/93.023 Pedicure
• O/93.040 Wellness
• O/93.050 Other personal services

Two-two (2.2.) In addition to operations within the activities stated in the previous point, the Company may perform all other operations required for its subsistence and performance of activities, but not including direct performance of activities, in particular, acquisition of real estate property, establishment of subsidiaries or affiliates at home or abroad, or equity stake in other companies.

THREE: SHARE CAPITAL

Three-one (3.1): The share capital of the Company amounts to 14,970,355.53 EUR (fourteen million nine hundred seventy thousand three hundred fifty-five point fifty-three euros) and is divided into 597,916 (five hundred ninety-seven thousand nine hundred sixteen tolars) ordinary registered no-par value shares.
Ordinary shares are shares that provide their holders with:
- the right to participate in the management of the Company
- the right to a share in the profit (dividend)
- the right to a corresponding part of the assets remaining after the liquidation or bankruptcy of the Company
Each share counts as 1 / one vote.

Three-two (3.2): All shares are fully paid up. They shall be subscribed in dematerialised form.
INCREASE AND REDUCTION OF SHARE CAPITAL

Three-three (3.3): Decisions on increasing the share capital by issuing new shares, in terms of the type and category of shares, are made by the General Meeting of Shareholders by a simple majority in the approval of the represented share capital.
Incumbent shareholders have a preference option right to subscribe new shares in proportion to their stakes in the Company’s share capital. The preference option right may be ruled out only on the basis of a decision by the General Meeting of Shareholders adopted by a ¾ (three-quarter) majority of shareholders present.

Three-four (3.4): No later than in 14 days of the decision of the General Meeting of Shareholders to increase the share capital by issuing new shares, published in the Finance magazine or on the website of the Ljubljana Stock Enchange, the Management of the Company must, in compliance with its rules and instructions, invite incumbent shareholders to pay for new shares in proportion to their stakes up to that point.
At written request, the Company shall provide interested persons with a printout of the web page where the information had been published. Incumbent shareholders must subscribe newly issued shares no later than in 14 days of the day of publication in the Finance magazine, unless otherwise specified by each respective decision to issue shares.

Three-five (3.5): The preference option right shall be exercised through a written statement, which the claimant must send to the Management of the Company within the deadline specified in the decision to issue shares.
In case the incumbent shareholders fail to exercise their preference option rights by subscribing the shares issued, the Management may freely invite third parties to subscribe and pay shares.

Three-six (3.6): The procedure for issuing, and conditions for subscribing and paying, shares are defined by the law or the respective decision of the General Meeting of Shareholders to issue new shares.

Three-seven (3.7): The increase of the share capital shall become effective on the date of entry into the court register.

Three-eight (3.8): By a simple majority, the General Meeting of Shareholders may adopt the decision to increase the Company’s share capital from reserves or, respectively, the Company’s income.
The decision on the increase of share capital from reserves is based on the latest audited annual balance sheet.
The increase of share capital according to this point may be accompanied by an increase in the nominal value of individual shares, or issuance of new shares. In case new shares are issued, the incumbent shareholders are entitled to these shares in proportion to their stake in the share capital of the Company.

The increase of share capital from reserves must not reduce the reserves below the minimal level prescribed by the law.

Three-nine (3.9): The Company may reduce the share capital in case this is required by the law or the General Meeting of Shareholders adopts a decision to that effect by a ¾ (three-quarter) majority. The decision shall state the reason or purpose of the reduction, and the manner of reducing the share capital.

COMPANY BODIES

The bodies of the Company are:
- the Management
- the Supervisory Board
- the General Meeting of Shareholders

The bodies of the Company act in compliance with the law, this Statute and the Rules of Procedure.

FOUR: THE MANAGEMENT

Four-one (4.1): The Management is single-handedly appointed and dismissed by the Supervisory Board.

Four-two (4.2): The Management is comprised by a single member, the Director General. The term of the Director General lasts for 5/five years, with optional reappointment.
The Director General may give a sole or collective procuration to a person employed at the Company, but also to a person outside the Company. The procuration may be revoked at any time.

Four-three (4.3): The Director General manages the Company’s business operation single-handedly and at his own responsibility. In addition to other competencies in accordance with the law, he primarily:
1. organises and manages the business process and operations of the public limited company
2. represents the Company in its relations with third companies and is responsible for the lawfulness of its operations
3. adopts the fundaments of the business policy, work plan and programme
4. adopts measures for implementing the business policy, executes the decisions of the General Meeting of Shareholders and Supervisory Board
5. determines the Company’s internal organisation and appoints and dismisses employees with special authorisations and responsibilities, as well as his assistants
6. adopts the Company’s general acts in accordance with the regulations and provisions of this Statute and decisions of the competent bodies of the public limited company
7. performs other operations envisaged by this Statute or the law

Four-four (4.4): The Director General is entitled to a share in the balance sheet profit pursuant to each respective decision of the General Meeting of Shareholders; it may be paid out in the form of shares or option rights to purchase shares. Part of the profit allocated by the General Meeting of Shareholders may also be earmarked by the Management for other members of the Company’s management.

FIVE: Supervisory Board

Five-one (5.1): The competence of the Supervisory Board is to:
- oversee the management of the Company’s operations,
- appoint and dismiss the Management of the Company,
- review and verify the Company’s books, deposited securities and other documentation providing insight into information and facts related to business operations,
- convene the General Meeting of Shareholders in case it is not convened by bodies defined by law
- deal with other matters in accordance with the law.
- verify the compiled annual report and the proposal for the use of the balance sheet profit set forth by the Management and compile a written report for the General Meeting of Shareholders, by means of which it can also indicate its position on the auditor’s report. In case it approves the annual report, it shall be deemed adopted.

Five-two (5.2): The Supervisory Board is comprised by 9 members. Unless otherwise specified by this Statute, all members of the Supervisory Board have equal rights and obligations.

Five-three (5.3): One-third of the Supervisory Board members are representatives of the Company’s employees, elected by the Board of Employees.
This provision shall remain in force for as long as the provisions of the law on employee participation in management, which stipulate such a composition, remain in force.

Five-four (5.4): The Supervisory Board is appointed by the General Meeting of Shareholders by a simple majority of shareholder votes present, with the exception of Supervisory Board members referred to in Point 5.2 (Five-two) of this Statute.

Five-five (5.5): Supervisory Board members are elected for a period of 4/four years and may be re-elected after its expiry.
At its first meeting, the Supervisory Board elects the President and Vice President from its members.
The President convenes and chairs the Supervisory Board meetings. The President of the Supervisory Board represents the Company in its relations with the Management, and is authorised to declare the will, and announce the decisions of, the Supervisory Board.
The President is always a representative of the shareholders.

Five-six (5.6): Supervisory Board meetings are called by the President at his own initiative, at the initiative of any Board member, or at the initiative of the Management.

Five-seven (5.7): The Supervisory Board takes decisions at the meetings. Provided none of its members object, the Supervisory Board may adopt its decisions in written, telephonic or telegraphic form, or by using similar technical devices. As a rule, the Supervisory Board takes decisions by open vote. An absent member may authorise another Supervisory Board member to present his written statement of vote.

Five-eight (5.8): The Supervisory Board has a quorum in case the decision-making process is attended by at least half of its members, at least one of which must be the employees’ representative.
The Supervisory Board may lawfully take decisions in the absence of members representing the employees until they are not appointed to the Supervisory Board, or, respectively, in case the president of the Supervisory Board establishes by a decision that all members had been invited to the meeting in the correct and timely manner.
If an equal number of votes are cast for and against a proposed decision (undecided vote), the vote of the President of the Supervisory Board is decisive.

Five-nine (5.9): A decision to prematurely recall the shareholders’ representatives must be adopted by a ¾ (three-quarter) majority of the votes present, while the conditions of the recall shall be determined by the Board of Employees through its Rules of Procedure.

Five-ten (5.10): At the proposal of the Management, Supervisory Board members shall be entitled to remuneration for their work and attendance fees determined by the General Meeting of Shareholders. Additionally, the members are entitled to reimbursement of travel expenses and other reasonable expenditures arising from coming to, and attending, the meeting.

Five-eleven (5.11): In the Rules of Procedure, the Supervisory Board shall regulate the manner and conditions of its work in more detail.

SIX: General Meeting of Shareholders

Six-one (6.1): At the General Meeting of Shareholders, the shareholders exercise their rights related to the Company.

Six-two (6.2): The General Meeting of Shareholders has the following competencies:
- it adopts the annual report, unless it has been previously approved by the Supervisory Board - at the proposal of the Management and Supervisory Boards, it takes a decision on the use of the balance sheet profit
- takes decisions on appointing and dismissing Supervisory Board members in accordance with this Statute,
- adopts amendments to the Statute,
- takes decisions on measures for increasing and reducing the share capital,
- takes decisions on the termination of the Company,
- takes decisions on other matters defined by the law and this Statute.

Six-three (6.3): The General Meeting of Shareholders shall be convened at a time beneficial to the Company, or when this is necessary according to the law and this Statute.

Six-four (6.4): The General Meeting of Shareholders shall be convened at least a month before the session, through an announcement in the Official Gazette of the Republic of Slovenia, or a written invitation to shareholders 1/one month before the Meeting is convened, indicating the agenda, place and time of the session, and information as to where and how the shareholders may familiarise themselves with the material for the General Meeting of Shareholders, since the material is sent out only to shareholders owning more than a thousand shares.

Six-five (6.5): As a rule, the General Meeting of Shareholders is held at the location of the Company’s headquarters.

Six-six (6.6): The decisions of the General Meeting of Shareholders are legitimate if more than 10 % (ten percent) of the votes are cast by the attendees of the session.
In case there is no quorum after the first time the Meeting is convened, the General Meeting of Shareholders can legitimately take decisions after a one-hour delay, regardless of the amount of the share capital represented, which must be specifically indicated.

Six-seven (6.7): The General Meeting of Shareholders takes decisions by the majority of the votes cast, unless otherwise specified by the law or this Statute. By a ¾ majority of the votes present, the General Meeting of Shareholders shall take decisions primarily on the following matters:
- amendments to the Statute,
- reduction of share capital,
- conditional increase of share capital,
- approved increase of share capital,
- status changes and termination of the Company,
- ruling out shareholder priority option rights when new shares are issued,
- premature dismissal of Supervisory Board members,
- other cases, if specified by the law or this Statute.
The method of voting: by raising a hand, by ballots, by computer or otherwise, shall be decided upon by the President of the General Meeting of Shareholders.

Six-eight (6.8): Shareholder rights issuing from shares are exercised directly at the General Meeting of Shareholders, or through plenipotentiaries.

SEVEN: ANNUAL REPORT, PROFIT AND DIVIDENDS

Seven-one (7.1): The business year is the calendar year.

Seven-two (7.2): The Management is obliged to present to the Supervisory Board a proposal of the annual report, in accordance with the law.

Seven-three (7.3): Use of profit and reserve

Seven-three-one (7.3.1): In compiling the proposal of the annual report, the Management may transfer no more than half of the profits into the reserve.

Seven-three-two (7.3.2): The distribution of the profit is decided upon by the General Meeting of Shareholders by a decision whereby it may also determine whether the balance sheet profit in a specific year is exempt, or partially exempt, from distribution to shareholders.

EIGHT: prohibition of competition and LOYALTY

Eight-one (8.1): All information defined by the Company’s regulations and general acts shall be treated as business secrets.
Information treated as a business secret at the Company is decided upon by the Management.

Eight-two (8.2.) All employees of the Company are obliged to safeguard business secrets and must not, either during employment or after its termination, disclose potentially detrimental information about the Company. In case of departure from the Company, an employee of the Company must sign a statement binding him to safeguard business secrets for a minimum of two years following termination of employment relationship with the Company.
Business secrets principally include all unpublished plans, programmes and information.

Eight-three (8.3): During the employment relationship, employees of the Company are prohibited from performing work or concluding deals falling under the Company’s field of operation or activity for their own or a third party’s behalf without special consent of the Management or, respectively, the Supervisory Board, in case this would affect the interests of the Company.

Eight-four (8.4): The Management shall define the conditions under which the employees are prohibited from establishing companies during their employment relationship with the Company, but also following its termination.
The competition clause shall be regulated by an individual agreement or an employment agreement.

Eight-five (8.5): In case of major violations of the competition clause, the Management may terminate the employment relationship of the employee in violation of the provisions of the clause.

Eight-six (8.6): The Company is entitled to demand that the employee, in case of termination of the employment relationship – wilful or resulting from his own fault – must not, for a minimum of two years after the termination, transfer any knowledge or business connections to another company.

Eight-seven (8.7): In case an employee, by his own will, joins a rival company prior to the expiry of the two-year period without consent of the Management, or establishes a rival company, he shall be obliged to pay flat rate compensation amounting to his two-year earnings at his position in the Company.
For the purpose of securing the flat-rate compensation, a lien shall be imposed on the employee’s shares in the book of shareholders.

Eight-eight (8.8): The competition clause shall apply to all employees with special authorisation, or employees whose employment agreements stipulate this.

Eight-nine (8.9): The provisions on the competition clause shall not apply to investments and employment at companies or enterprises co-owned by the Company.

Eight-ten (8.10): All employees, the Director General, directors of units and Company directors are obliged to loyally collaborate in the realisation of the objectives of the PLC and protection of business secrets.
Loyal collaboration includes the obligation to refrain from providing information about the PLC that represents a business secret, or may be detrimental to the PLC’s interests if disclosed, to any present or former employee.
Loyal collaboration includes the obligation to actively protect the interests of the Company and timely inform the Management and the management staff in case the interests of the PLC are under threat. It includes the obligation to refrain from making statements or providing information about the Company that may be detrimental to the Company’s operations or interests.

Eight-eleven (8.11): Should a Supervisory Board member, the Director General, an employee with special authorisations and responsibilities or any of the Company’s employees violate the provisions on business secrets, prohibition of competition and loyalty, the Supervisory Board or the Management may dismiss him. The Company may demand compensation for the damage incurred.

NINE: INFORMING THE EMPLOYEES

The Company shall publish notices and information for shareholders on the website of the Ljubljana Stock Exchange in accordance with its rules and guidelines, in the Finance magazine or the Official Gazette of the Republic of Slovenia.
Shareholders whose stake in the total share capital amounts to a minimum of 5 / five percent must also be notified by the Company in writing (by registered mail with reply).

TEN: Duration and Termination of the Company

Ten-one (10.1): The Company has been established for an indefinite period of time.

Ten-two (10.2.) The Company is terminated for reasons and according to the procedure stipulated by the law.

ELEVEN: VALIDITY OF THE Statute AND AMENDMENTS TO THE Statute

Eleven-one (11.1): On the date of entry into force of amendments to this Statute, adopted by the General Meeting of Shareholders on 23 June 2004, this fair copy of the Statute of Terme Čatež PLC shall enter into force. Other general acts shall be used as acts of the Company, unless they are contrary to the Statute.
The Statute may be amended by a decision of the General Meeting of Shareholders, which requires the majority of at least three quarters in the approval of the represented capital.

Eleven-two (11.2.) The General Meeting of Shareholders may authorise the Supervisory Board to make amendments to the Statute that solely require harmonisation of its text with legitimately adopted decisions.
Harmonisation of general acts with this act is an obligation of the Management, which must be fulfilled no later than within 1 / one year, unless otherwise specified by law. Amendments to general acts are adopted by the Management.

President of the Supervisory Board