UNIFORM TEXT COLLECTIVE LABOUR AGREEMENT FOR EMPLOYEES OF WYTWÓRNIA SPRZĘTU KOMUNIKACYJNEGO „ PZL-ŚWI DNIK” SPÓŁKA AKCYJNA IN ŚWIDNIK

(uniform text of 01.03.2012)

between:

and

Chapter I

GENERAL PROVISIONS

Article 1

2.If a new business entity is separated off from the Company, which employs the employees of the Company, the newly- created business entity will be bound by the provisions of this Agreement in relation to the employees it takes over.

3.Employees covered by this Collective Labour Agreement whose rights and obligations are specially regulated by separate provisions of law will only be subject to the provisions of this Agreement with regard to matters that are not covered by those provisions of law, unless this Agreement is more advantageous for them.

4.This Collective Labour Agreement lays down, in particular:

1/ Terms of employment;

2/ Working hours;

3/ Rules for paying remuneration and awarding other benefits associated with work and work conditions;

4/ Rules relating to measures to promote

5/ Social benefits;

6/ Trade union entitlements;

7/ The mutual obligations of the parties to this Collective Labour Agreement relating to the principles and forms of co-operation in its application.

5.This Agreement cannot breach third-party rights.

Article 2

When used in this Collective Labour Agreement, the terms listed below will have the following meanings:

1."Agreement” means this Collective Labour Agreement for employees of Wytwórnia Sprzętu Komunikacyjnego PZL-Świdnik S.A.;

2."Employee” means any person employed under an employment contract in Wytwórnia Sprzętu Komunikacyjnego PZL-Świdnik S.A.;

3."President of the management board/General Director” means the person appointed to that position in accordance with the applicable provisions of law;

4."Trade unions or trade union organisations operating in the company” means:

1/ The organisation of the Independent Self-Governing Trade Union Solidarność operating in PZL-Świdnik S.A.;

Świdnik S.A.,

2/ Związek Zawodowy „Metalowcy” PZL-Świdnik S.A.,

1."Base amount” means an amount negotiated by the parties to this Agreement. If a base amount is not negotiated, the existing base amount will continue to apply;

2."Lowest wage” means the lowest wage specified in this Agreement;

3."Employer” means Wytwórnia Sprzętu Komunikacyjnego PZL-Świdnik S.A.;

4."Company” means Wytwórnia Sprzętu Komunikacyjnego PZL-Świdnik S.A.;

5."Persons drawing a pension or disability benefit” means former employees of the Company who now draw a pension or disability benefit.

Article 3

1.Employment contracts are concluded in accordance with the Labour Code and the provisions of this Agreement.

2.Employment contracts should be made in writing and should clearly state the type and terms of employment. In particular, they should specify:

1/ the type of work and the place where it will be performed;

2/ the remuneration payable for the type of work in question;

3/ the date of commencing work.

1.The employer will be responsible for concluding contracts in writing.

2.If a contract has not been made in writing, the employer should promptly, i.e. within seven days from the date of commencing work, confirm to the employee in writing the type of contract and its terms and conditions.

3.Employment contracts will be concluded for:

1/ An indefinite term;

2/ A fixed term;

3/ For the period for which particular work will be performed;

4/ If it becomes necessary to provide a substitute for an employee during a justified absence from work, the employer will be able to employ a different employee for that purpose under a fixed term contract covering the duration of the absence.

5.The basic form of employment contract used for employees covered by this Agreement is a contract for an indefinite term. The employer can conclude a fixed-

term contract with an employee subject to separate provisions of law.

Article 3

1

1.Employer undertakes to employ all employees employed in the Company on the basis of employment contracts for an indefinite period irrespective of working time, on 29 January, 2010, including employees which do not render work for justified reasons, such as military service, maternity leave, unpaid extended post- maternity leave etc., for Employment Guarantee Period, that is for the period of 72 months (6 years).

2.Rights of employees connected with Employment Guarantee Period are defined in Annex no. 22 to ZUZP, which constitutes Annex no. 1 to this Additional Protocol.

Article 5

1.Team composed of representatives of Trade Unions and Employer will review and assess recruitment of employees to the Company once per quarter.

2.Conclusions of review will be presented to the Employer by the team in order to include them in personnel policy.

Article 6

The employer is obliged to inform the employees of vacancies in the Company in the form of announcements broadcast over the radio system and posted on the notice board in the division responsible for employee affairs. Announcements should specify the qualifications required for the position.

Article 7

In special cases (restructuring or liquidation of jobs or reduction of employment), the parties will negotiate special employment terms, taking into account any retraining which is required.

Article 8

1.If it becomes necessary to permanently change the nature of the tasks currently performed by an employee and, as a result, it is necessary to retrain him in a new occupation, the retraining period can last up to three months. However, if it is necessary for the employee to obtain special qualifications, it can be extended up to six months. In that period, the employee will receive the same remuneration as before the training.

2.Where it is justified in terms of the Company’s needs, an employee should perform other work than that specified in his employment contract, for a period of not more than three months in a calendar year, if this does not cause a decrease in his remuneration and the work is within the scope of his qualifications.

Article 9

1.An employment contract can be terminated:

1/ by mutual consent of the parties;

2/ with notice - by one of the parties making a declaration of termination giving the required notice;

3/ without a notice - by one of the parties making a declaration of termination without giving notice;

4/ due to the period for which the contract was concluded ending;

5/ on the date when the work for which it was concluded is completed.

1.A declaration of either of the parties giving notice of termination of an employment contract or terminating it without notice should be made in writing. A declaration of the employer giving notice of termination of an employment contract or terminating it without notice and a declaration of the employee terminating his employment contract without notice should state the reason for terminating the contract.

2.Employment contracts for a trial period will be terminated at the end of that period and can be terminated before the end of that period giving advance notice.

3.Thenoticeperiodforterminatingan

employment contract concluded for a trial period will be:

1/ three business days, if the trial period does not exceed two weeks;

2/ one week, if the trial period is longer than two weeks;

3/ two weeks, if the trial period is three months.

4.Thenoticeperiodforterminatingan

employment contract concluded for an indefinite term will depend on how long the employee has been employed by the employer and will amount to:

1/ two weeks, if the employee has been employed for less than six months;

2/ one month, if the employee has been employed for at least six months;

3/ three months, if the employee has been employed for at least three years.

2.The period for which an employee was employed by a previous employer will be counted towards the period of employment referred to in Sect. 5 if he changed employer due to a transfer of a workplace or a part thereof to a different employer and the new employer became, by virtue of law, a party in the existing employment relationships, as well as in other cases where, under separate provisions of law, the new employer is the legal successor in employment relationships entered into by the employer which previously employed that employee.

3.Notice periodsforterminatingan

employment contract consisting of a week or a month or multiples thereof will end on a Saturday or on the last day of the month, as appropriate.

4.Theemployercan terminatean

employment contract giving notice for the reasons specified in the Act on Special Rules for Terminating Employment Relationships with Employees for Reasons Unrelated to Employees (Journal of Laws 03.90.844).

5.If an employee’s employment contract concluded for an indefinite term is terminated due to the employer being declared bankrupt or being liquidated or due to employment being reduced for other reasons that do not concern the employee, specified in separate provisions of law, in order to terminate the employment contract earlier, the employer can shorten the three-month notice period by up to one month, in which case the employee will be entitled to compensation in the amount of his remuneration for the remainder of the notice period.

5.For an employee who remains unemployed in the period for which compensation is payable, that period will be counted towards his period of employment.

6.In a notice period for the termination of an employment contract by the employer of two weeks or more, employees will be entitled to be exempted from work so that they can seek employment, while retaining their right to receive remuneration, for:

1/ two business days - in a two-week and one-month notice period;

2/ three business days - in a three-month notice period, including if it is shortened under Sect. 9.

Article 10

The employer or the employee can terminate

an employment contract without giving notice

on the terms set out in the Labour Code.

Article 11

1.Employment contracts will expire in the circumstances specified in the Labour Code and in special provisions of law.

2.An employment relationship will expire on the date when the employee dies.

1.An employment contract will expire after the employee has been absent for three months due to being held on remand, unless the employer terminated the employment contract earlier without notice due to the employee’s fault.

2.If an employment contract expires due to the employee being held on remand, the employer will be obliged to re-employ the employee if the proceedings are dismissed or the employee is acquitted and reports his return to work within seven days from the date when the judgement becomes legally binding.

3.The provisions of Sect. 4 will not be applicable where criminal proceedings were dismissed due to their being time-barred or due to an amnesty, or if the proceedings were conditionally dismissed.

Article 12

1.An employee’s working hours are the time when he is at the employer’s disposal in a place designated in accordance with the Work Rules.

2.For all employees subject to this Agreement, all Saturdays are days off work, except for employees who work according to a working hours system and a schedule that requires that a timetable be drawn up, in which case days off work will be established on a case-by-case basis in the timetable.

1/ The parties agree that it will be possible to exchange a free Saturday for a different free day;

2/ By the end of a particular year, the Company’s management board, in consultation with the trade unions, will establish a schedule of days off work for the following year;

5.Work on a Sunday, public holiday or day off work established by this Agreement will be deemed to be work performed between 7.00 am on that day and 7.00 am on the next day.

8.The working hours of employees employed in the LOT-Medical Health Centre, as:

1/ a doctor, nurse or medical technician cannot exceed 7 hours and 35 minutes per 24-hour period and an average of 40 hours per week in a settlement period not exceeding three months;

2/ a financial/admin employee cannot exceed 8 hours per 24-hour period and 40 hours per week in a settlement period not exceeding three months;

3/ a radiology technician cannot exceed 5 hours per 24-hour period and an average of 26 hours and 15 minutes per week in a settlement period not exceeding three months. Employees subjectto theabove-mentioned

reduction of their working hours are not entitled to a bonus for work in harmful conditions.

(The provisions of this sect. will apply until such time as amendments (if any) are made to the Act on Health Care Centres)

Article 13

1.In justified cases, leave can be granted where there is a shortfall in the work requirement.

2.The duration and conditions of such leave and the positions to which it relates will be determined on a case-by- case basis by the President of the management board/General Director in consultation with the trade unions.

3.Remuneration for the above-mentioned leave will be not less than 70 per cent of the employee’s average wage calculated as if for recreational leave and cannot be lower than the lowest wage defined in this Agreement. Furthermore, that remuneration cannot be lower than the remuneration resulting from the employee’s personnel classification category, determined by means of an hourly or monthly rate.

Article 15

1.Working hours should be fully utilised for occupational work.

2.Occupational working hours will include time spent on:

1/ Technical maintenance of a workstation;

2/ Instruction provided by a superior;

3/ Explanations of technical requirements that arose through no fault of the employee;

4/ Toilet breaks

Article 16

1.Any work performed over and above the standard working hours applicable to the employee and any work performed over and above an increased number of working hours per 24-hour period resulting from the working hours system and schedule applicable to the employee will be deemed to be overtime.

3.Overtime work is prohibited in positions (specified in a list prepared by the employer and agreed with the trade unions) where permissible concentrations and intensities of harmful factors are exceeded. The list will be updated at least once a year.

4.Subject to Sect. 2, overtime work must be agreed with the trade unions with regard to the planned annual limit of the number of overtime hours and the rules governing that work.

5.The employer will present a quarterly report to the trade unions detailing the number of overtime hours that have been utilised and the justification for utilising them.

6.Employees should be notified of the need for overtime at least 16 hours in advance, except for special requirements of the Company and situations requiring that an operation be organised and carried out to save human life or health or the Company’s property or eliminate malfunctions threatening to halt production.

7.Employees will be engaged to perform overtime work on a voluntary basis, except for the situations specified in Sect. 6.

8.Employing employees to perform overtime work cannot be considered a permanent form of employment.

Article 17

1.The following working time shall apply to the Production and support services:

1/ I shift: from 07.00 to 15.00,

2/ II shift: from 15.00 to 23.00,

3/ III shift: from 23.00 to 07.00.

2.The following working time shall apply to other employees occupying non-manual labour positions:

4/ I shift: from 08.00 to 16.00,

5/ II shift: from 16.00 to 24.00.

3.With respect to the production and support services, the normal working time shall be work on I, II or III shift, for other employees occupying non-manual labour positions , the normal working time shall be work on I or II shift.

Article 18

Detailed principles concerning the scheduling and utilisation of working hours are set out in the Work Rules of Wytwórnia Sprzętu Komunikacyjnego PZL-Świdnik S.A. in Świdnik, agreed with the trade unions.

Article 19

2.In the calendar year in which he undertook employment, an employee accepting employment for the first time will become eligible at the end of each month of work to 1/12 of the leave entitlement to which he will be entitled after working for one year.

3.Employees will acquire the right to further leave in each subsequent calendar year.

4.The leave entitlement of employees employed on a part-time basis will be established proportionally to the number of working hours of such employees, on the basis of the leave entitlements specified in Sect. 1. Incomplete days of leave will be rounded up to a full day.

5.Leave will be granted on days which are working days for the employee, in accordance with the working hours schedule applicable to him, in a number of hours corresponding to the number of working hours per 24-hour period of the employee on the day in question, subject to Sect. 7.

6.When paid leave is granted in accordance with Sect. 5, one day of leave will correspond to eight hours of work.

7.On a working day, an employee can only be granted leave consisting of a number of hours corresponding to a part of his number of working hours per 24-hour period if the amount of leave which remains to be utilised is lower than the full number of working hours per 24-hour period of the employee on the day on which leave is to be granted.

8.The employer is obliged to grant an employee, at his request and within a time limit specified by him, not more than four days of leave in each calendar year. The employee must submit his demand to be granted leave not later than the date when the leave commences.

Article 20

1.The period of work on which the leave entitlement depends will include the following periods of education completed by the employee:

1/ basic (or equivalent) vocational school - the period of study envisaged by the teaching syllabus, not exceeding three years;

2/ secondary vocational school - the period of study envisaged by the teaching syllabus, not exceeding five years;

3/ secondary vocational school for graduates of basic (or equivalent) vocational school - five years;

4/ secondary comprehensive school - four years;

5/ postsecondary school - six years;

6/ institution of higher education – eight years.

The periods of study referred to in Items 1-6 cannot be added up.

1.If an employee studied while being employed, the period of work determining his leave entitlement will include either the period of employment for which he studied or the period of study, depending which is more advantageous for the employee.

2.The period of work on which obtaining a right to leave and the leave entitlement depends will include periods of previous employment, irrespective of breaks in employment and the way in which the employment relationship was terminated.

3.Employees who have utilised their leave in a given calendar year and subsequently obtained a right during that year to a greater leave entitlement will be entitled to supplementary leave.

4.The employer must grant an employee leave in the calendar year in which the employee obtained the right to it.

5.Leave can be divided up into parts at an employee’s request. At least one part of the leave should consist of not less than 14 consecutive calendar days.

6.Leave should be granted in accordance with a leave schedule established by the employer in consultation with the trade unions.

7.In the calendar year in which an employment relationship with an employee entitled to leave is terminated, the employee will be entitled to leave in the Company in proportion to the period for which he worked in the year when his employment relationship was terminated, unless he utilised an amount of leave greater than or equal to his entitlement before the employment relationship was terminated.

8.Deleted.

Article 21

1.The employer can order employees to take holiday leave during periods of planned refurbishment stoppages in the Company, in accordance with the leave schedule described in Article 20.7.

2.In the period referred to in Sect. 1, an employee will utilise his holiday leave entitlement or, if he has already utilised all of that entitlement in the year in question, unpaid leave will be granted to the employee at his request.

3.Employees should be notified of a break such as referred to in Sect. 1 by the end of January of the year in question, by the notification procedure applied in the Company.

Article 22

1.Leave can be postponed at an employee’s request, justified by valid reasons.

2.If an employee cannot commence his leave at the established time for reasons that justify his absence from work and, in particular, due to:

1/ a temporary inability to work due to illness;

2/ being quarantined after contracting a contagious illness;

3/ being summoned to participate in military exercises or military training for up to three months;

4/ maternity leave,

3.The employer must grant, at a later time, a portion of leave which is not utilised due to:

1/ temporary inability to work due to illness;

2/ the employee being quarantined after contracting a contagious illness;

3/ the employee participating in military exercises or military training lasting up to three months;

4/ maternity leave.

4.Leave that is not utilised in accordance with the leave schedule should be granted to the employee not later than the end of the first quarter of the next calendar year.

5.During the notice period for the termination of an employment contract, the employer must utilise his leave entitlement if the employer grants him leave.

Article 23

1.The employer can only order an employee to return from leave when his presence in the Company is required due to circumstances that were not anticipated at the moment when the leave began.

2.The employer must cover any costs incurred by the employee in direct connection with his being ordered to return from leave and grant him the interrupted leave in its entirety at a later time.

Article 24

1.If an employee does not utilise part or all of his leave due to his employment relationship being terminated or expiring,

2.Deleted.

4.The employer must pay remuneration for do leave within the time limit specified in Article 44.

Chapter V UNPAID LEAVE

Article 25

1.The employer can grant unpaid leave at the written request of an employee.

2.A period of unpaid leave will not be included in the period of work on which employee entitlements depend.

3.When granting unpaid leave of more than three months, the parties can agree that the employee may be ordered to return from leave for valid reasons.

4.An employee can return from unpaid leave early, provided that:

1/ he obtains the employer’s consent, or

2/ he personally notifies the employer three months in advance.

5.Upon the completion of unpaid leave, the employer must accept the employee for work on terms agreed by the interested parties before the leave was granted.

Chapter VI

EXEMPTIONS FROM WORK

Article 26

1. Employees are entitled to an exemption from work whilst retaining their right to receive remuneration, in the event of:

1/ an employee getting married - two days;

2/ an employee’s child being born - two days;

3/ an employee’s child getting married - one day;

2.The exemptions referred to above should be utilised at the time when the circumstances that entitle the employee to the exemption occur.

3.After utilising an exemption, the employee must document the circumstances that entitled him to the exemption.

Article 27

An employee can be exempted from work for a period required to deal with important personal or family matters which must be dealt with during working hours. Remuneration can be paid for the duration of such exemptions depending on the decision of the department manager or the duration of such an exemption can be made up. Time spent making up for an exemption will not be counted as overtime.

Article 28

1.The employer must exempt an employee from work, without losing the right to receive remuneration from the employer, in the following circumstances:

1/ to enable the employee to participate as a party or a member in a meeting of committees or groups whose activities result from the employer’s obligations under the statute or this Agreement, or which are appointed on an ad hoc basis by the parties hereto;

2/ for the purpose of undergoing examinations required under the provisions of law on compulsory medical examinations and vaccinations or health examinations for persons who perform certain paid work in the Company, if it is not possible to carry out the examinations or vaccinations during time off work;

3/ to enable the employee to work as a lecturer on courses organised by external training institutions or in a vocational school or institution of higher education which trains pupils and students with a profile required by the Company, for a period of not more than six hours per week or 24 hours per month;

4/ to enable the employee to work as a lecturer, examination committee member or course director on courses and training organised by the Training Centre for the Company’s employees and contracting parties, for the period necessary for planned training sessions, courses and exams to be carried out;

5/ to enable the employee to participate in combating natural disasters or directly participate in fire-fighting and flood protection operations. Such exemptions from work should be certified by the district office (urząd gminy) in the area where the operation is taking place;

6/ to enable the employee to undergo training in connection with performing the function of social labour inspector and participate in consultations and examinations, for a period of not more than 10 days during his term of office;

7/ to enable the employee to participate in training and examinations relating to safety and hygiene in the workplace;

8/ to enable social labour inspectors to perform their statutory obligations;

9/ to enable the employee to participate in training and examinations to improvehisprofessional

qualifications, thus enabling him to obtain authorisations to perform work in the Company in his current position (except for foreign language courses and examinations), for 50 per cent of the time envisaged by the training programme, except for training and examinations organised by external institutions whose organisational structure requires a different type delegation;

10/ to enable the employee to donate blood or undergo periodic medical examinations, for the time specified by the blood donor centre.

1.The employer can exempt an employee from work, without the employee losing the right to receive remuneration from the employer, to enable the employee to participate in training and examinations aimed at improving his professional qualifications, thus enabling him to obtain licences to perform work in the Company.

2.Employees are entitled to a break of not more than eight hours after completing a night-time business journey, with the right to receive remuneration for that time, if they did not have a sleeper compartment.

Article 29

1.The employer can exempt an employee from work, without him being entitled to receive remuneration from the employer, to enable him to participate in training and examinations aimed at improving his professional qualifications.

2.The employer must exempt an employee from work, without him being entitled to receive remuneration from the employer, in the following circumstances:

1/ To enable him to respond to a summons issued by:

-a national administrative authority;

-a local government authority;

-a court;

-a prosecutor’s office;

-the police;

-a magistrate’s court;

-to perform national military service;

2/ When an employee is summoned as a witness in inspection proceedings being conducted by the Supreme Audit Board or if he is appointed to participate in such proceedings as a specialist;

3/ To enable an employee to act as a member of a social committee or other social consultation body appointed by supreme state authorities, the Council of Ministers or the President of the Council of Ministers, or as a research member of a commission of the State Committee for Scientific Research;

4/ To enable an employee to participate in fire-fighting training and to carry out inspections of fire safety measures outside the Company, for a period not exceeding six days per calendar year. Such an exemption from work should be certified by the institutions organising the training or inspection.

5/ To enable an employee to conduct lessons in a vocational school, institution of higher education or scientific facility or research and development unit or to conduct training on professional courses organised by:

-ministries, central offices or regional government administration authorities and bodies which are subordinate to them;

-organisational units of the Minister of National Education;

-social associations and organisations which, on the basis of applicable provisions of law, have obtained a permit from the Minister of National Education or the competent national administrative authority to conduct courses commissioned by state- owned organisational units, for a number of working hours not exceeding six hours per week or 24 hours per month;

6/ To enable the employee to undergo specialist medical examinations that cannot be carried out in the LOT- Medical Health Centre. The duration of that exemption can be made up, but time spent making up such an exemption will not constitute overtime work.

Article 30

1.An employee being absent from work or arriving late, without losing his right to receive remuneration, can be justified by factors that prevent him from coming to work, in particular:

1/ If the employee is unfit for work due to sickness or because he has been quarantined after being infected with a contagious illness;

2/ if the employer is unable to work due to an occupational illness;

3/ If the employee has been ordered not to work on the basis of a certificate (decision) issued by a doctor, a medical committee, the Company Rehabilitation and Transfer Committee or a sanitary inspector, unless the Company employs the employee in a different job which is appropriate in view of the state of his health;

4/ If the employee is undergoing treatment in a health resort and the period of that treatment has been authorised by a doctor’s certificate, for the period of the employee’s inability to work due to sickness;

7/ An exemption to which a female or male employee bringing up a child of up to 14 years of age is entitled, of up to two days in a calendar year. If both parents are employed, only one of them can take advantage of this entitlement.

2.The justification for an absence in the circumstances described in Sect. 1 should be confirmed by appropriate documents.

Article 31

Deleted

Article 32

1.The basic criterion for assessing and measuring the value of work is remuneration for hours of work and the effectiveness of the work.

3.The principles of remuneration will apply to all employees employed in the Company, except for the President of the management board/General Director and the Members of the management board.

Article 33

Article 34

A table of basic rate coefficients for individual classification categories with regard to the minimum wage specified in this Collective Labour Agreement for blue and white-collar positions is attached as Appendix 2 hereto.

Article 35

1/ Monthly:

a)in a part concerning individual presence at work dependent on working in a calendar month not less than 150 hours of the total number of labour hours in that month (without overtime). However, the holiday leave of 14 subsequent calendar days once a year, which is required by the Law, shall be treated as a period of work.

b)in a part concerning performance of deliveries, dependent on performance of 100% of monthly deliveries specified on a basis of a budget for a given year, on the condition that the employee worked at least 80 labour hours of the total number of labour hours in that month. In the event of non- performance of the deliveries plan in a given month/months, it is provided that the monthly bonus will be awarded after performance of 100% of deliveries planned for a given calendar quarter.

2/ Annual - related to the following criteria: EBIT, quality, collective absence.

1.In 2012 the annual bonus will be as follows:

1/ In the monthly part the amount of the bonus will be 200 PLN gross out of which 120 PLN gross will be linked to individual presence of an employee at work, and 80 PLN gross will be linked to performance of deliveries planned in the budget for a given month;

2/ In the annual part the amount of the bonus in case of maximum performance by the Company of all goals in 2012 will be 1785 PLN gross.

2.In 2013 the annual bonus will be as follows:

1/ In the monthly part the amount of the bonus will be 250 PLN gross out of which 125 PLN gross will be linked to individual presence of an employee at work, and 125 PLN gross will be linked to performance of deliveries planned in the budget for a given month;

2/ In the annual part the amount of the bonus in case of maximum performance by the Company of all goals in 2013 will be 1925 PLN gross.

2.In 2014 the annual bonus will be as follows:

1/ In the monthly part the amount of the bonus will be 300 PLN gross out of which 125 PLN gross will be linked to individual presence of an employee at work, and 175 PLN gross will be linked to performance of deliveries planned in the budget for a given month;

4.The amount of the annual part of the bonus will depend on the level of performance by the Company of, inter alia, financial goals, efficiency goals, productivity goals and quality goals in the preceding fiscal year.

5.Detailed rules of awarding the bonus referred to in sect. 1-4 shall be defined by the Parties to ZUZP in a separate agreement.

6.In 2014 the parties shall hold talks with the aim of implementation of a new bonus system, which would come into force starting from 2015.

Article 37

The rules for classifying and promoting employees employed in blue and white-collar positions are set out in Appendix 5.

Article 38

1.Employees are entitled to remuneration resulting from their personal classification rate and the bonuses provided for in this Agreement in proportion to their hours of effective work.

2.Employees will be entitled to remuneration for time when they do not work when it is provided for in this Agreement or in generally applicable provisions of law.

Article 39

1.For the duration of stoppages that are not

the fault of the employee, the employee will be entitled to remuneration of 80 per cent of the remuneration calculated as if forholiday leave. However,that

remuneration cannot be lower than that resulting from his personal classification category, determined by an hourly or monthly rate. Furthermore, that remuneration cannot in any event be lower than thelowestremuneration for

employees subject to this Agreement.

2.If a stoppage occurs through the fault of an employee and he does not undertake substitute work, he will not be entitled to remuneration.

3.For the duration of a stoppage, the employer can assign an employee appropriate other work, for which he will be entitled to remuneration as if for normal hours of work.

4.If a stoppage occurs through the fault of the employee and he undertakes substitute work, he will be entitled to the remuneration resulting from his personal classification.

Article 40

1.Employees will not be entitled to remuneration where products are manufactured with defects through the fault of the employee.

2.If the quality of a product is compromised due to defective work being the fault of the employee, remuneration will be reduced accordingly.

3.If the defectiveness of a product is eliminated by the employee, he will be entitled to appropriate remuneration in view of the quality of the product. However, he will not be entitled to remuneration for the time spent eliminating the defect.

Article 41

1.If the work provided for in an employee’s contract does not completely occupy his working hours, his superior should assign him temporary supplementary work in accordance with his qualifications, as specified in his employment contract.

2.Employees will not receive any additional remuneration for performing temporary or supplementary work.

The following information will be kept confidential and will not be published:

-the personal classification rate;

-effective hours worked;

-any sanctions imposed on an employee.

2.Employees will be notified of the following data concerning wages:

-the average hourly rate in the department;

-the difference between the minimum and maximum rates in the department.

3.At the request of an interested employee, the manager will be obliged to inform him of a change made to an employee’s personal classification rate.:

4.At the request of the trade unions, the Company’s management board must provide the employees with information on the level of average wages in the Company and in individual divisions and departments.

Article 44

Remuneration will be paid by the 10th day of the next calendar month in the form of a money transfer to the employee’s bank account.

Article 45

The average wage increase in the Company for a particular calendar year will be established on the basis of the Rules for the Negotiation System for Determining the Average Wage Increase in the Company, attached as Appendix 6 hereto.

Chapter VIII RULES FOR PAYING ADDITIONAL REMUNERATION

Article 47

Employees will be entitled to a bonus for working on the second shift, in the amount of seven per cent of the hourly rate resulting from the base amount, for each hour worked on the second shift in a fixed shift cycle and in continuous operation.

Article 49

Deleted.

Article 50

1.Employees who direct the work of a gang are entitled to a bonus for running the gang, which will depend on the number of hours worked and the number of persons in the gang.

2.The monthly index rate for the bonus for leading a gang is specified in Appendix 8 and amounts to:

1/ for a gang of 5-10 people - 1/2 of level 1;

2/ for a gang of 11-15 people - 1/2 of level 2;

3/ for a gang of more than 15 people - 1/2 of level 3.

The bonus will be paid for the period for which the function of gang leader is performed.

Chapter IX PAYMENTS AND ADDITIONAL PERFORMANCES OTHER THAN REMUNERATION FOR WORK

Article 52

Deleted.

Article 53

1.Employees who have worked 20 years or more will be entitled to a long service award.

2.The percentage amount of the long service award will be established separately for the period of employment in PZL-Świdnik S.A. and for a period of employment in other companies.

3.The period of employment in PZL Świdnik S.A. will include:

1/Periods ofemployment in the

Company, except for periods of employmentthat endedwiththe

contract expiring due to the employee abandoninghis positionorthe

employment contract being terminated without notice through the fault of the employee. The expiry of a contract due to the employee abandoning his position applies to periods before 2 June 1996 (the date when the Act Amending the Labour Code and Certain Acts of 2 February 1996, Journal of Laws No. 24/96 item 110, came into force);

2/ A period of employment in limited liability companies separated off from PZL-Świdnik S.A. and the Employees’ Social Foundation;

3/ The period of employment in the Company of employees dismissed for the reasons set out in Article 1 of the Act of 24 May 1989 (Journal of Laws No. 32/89, item 172, as amended), who accepted employment in PZL- Świdnik S.A. again;

4/ A period for which an employee was exempted from occupational work as a result of being elected or appointed to perform a national or social function;

5/ A period for which an employee performs basic or periodic military service according to the principles set out in the Polish Military Service Act of 21 November 1967 (Journal of Laws No. 4/92 item 16);

6/ A period that a woman spends on parental leave in accordance with the Regulation of the Council of Ministers of 28 May 1996 on parental leave and benefits (Journal of Laws No. 60/96 item 277);

7/ The last period of uninterrupted work in an organisational unit, where that unit was taken over;

8/ The last period of uninterrupted work in the previous company, where the employee was transferred to the Company on the basis of a decision of a dominant undertaking;

9/ Periods of employment in defence and aviation industry companies covered by the Multi-Establishment Collective Labour Agreement for Employees of Defence and Aviation Industry Companies.

3.Periods of employment in other companies will include all other documented periods of employment in companies, not specified in Sect. 3.

4.The award should be paid immediately after the employee becomes eligible for it.

5.The employee will be obliged to prove his eligibility for the award if there is no appropriate documentation in the personnel files held by the employer.

6.If an employee became eligible for an award after changing his amount of working hours, the basis for calculating the award will be the remuneration to which the employee was entitled in the period for which he worked after that change.

If an employee became eligible for an award while he was employed to work for a different number of hours than on the date when the award is paid, the basis for calculating thebonus will be the

remuneration to which the employee was entitled immediately before changing the number of his working hours.

7.If an employment relationship was terminated due to the employee retiring on a pension or disability benefit in connection with an accident in the workplace or occupational sickness or on group 1 or 2 disability benefit for reasons other than an accident in the workplace or occupational sickness, an employee who is less than twelve months away from becoming eligible for an award, counting from the date when the employment relationship is terminated,

8.An employee who has documented his right to an award on a particular date and within 12 months from that date becomes eligible for a higher grade award will be paid the lower award within the time limit specified in Sect. 5 and the difference between the amounts of the higher and lower award on the date when he becomes eligible for the higher award.

9.The payment of the long service award provided for in this Agreement for 20 years of work only applies to employees who become eligible for 20 years of work after the effective date of this Agreement.

10.Employees who were paid a long service award before this Agreement came into force will not be entitled to any claims stemming from the change in the rules for awarding long service awards.

11.The basis for calculating an award will be the remuneration to which the employee is entitled on the date when the award is paid or, if it is more advantageous for the employee, the remuneration to which he was entitled on the date when he became eligible for the award.

12a. At the request of an employee who becomes eligible for a long service award while working abroad, the long service award will be paid on the day before he leaves Poland to work abroad or on the date when his employment contract is amended to extend his period of working abroad. In both cases, the exclusive basis for calculating the amount of the long service award will be the remuneration to which the employee is entitled on the day before he leaves Poland to work abroad, and Sect. 12 will not apply.

13.The basis for calculating the amount of the long service award will be:

1/ for the period of employment in PZL Świdnik S.A. - 100 per cent of individual monthly remuneration, calculated according to the principles applicable when determining the monetary equivalent for holiday leave;

2/ for a period of employment in other companies - the lowest monthly remuneration provided for in this Agreement.

14.The amount of the long service award will be:

1/ after 20 years of work - 100 % of the basic salary rate;

2/ after 25 years of work - 150 % of the basic salary rate;

3/ after 30 years of work - 200 % of the basic salary rate;

4/ after 35 years of work - 250 % of the basic salary rate;

5/ after 40 years of work - 300 % of the basic salary rate;

6/ after 45 years of work and more, in 5-year intervals - 350 % of the basic salary rate.

Article 54

Deleted.

Article 55

1.An employee who is performing the function of company social labour inspector will be entitled to monthly flat remuneration calculated in accordance with the applicable provisions of law in that respect.

2.An employee who is delegated to perform the function of company social labour inspector will be entitled to remuneration equal to 1.6 times the average wage in the Company for the last quarter.

Article 56

Deleted.

Article 57

1.Compensation benefit will be payable, according to principles set out in generally applicable provisions of law, to employees:

1/ with reduced fitness for work, whose remuneration has been reduced due to their undergoing occupational rehabilitation or training for a particular job;

2/ whose remuneration has been reduced due to their undertaking work in a different department or at a different employer in connection with their being found to be carrying microbes of a contagious illness.

2.If wages are increased in the period when an employee is collecting compensation benefit, the benefit will be supplemented:

1/ In an amount compensating for the average pay rise in his previous job (department), if he had to undergo rehabilitation due to an occupational illness, an accident in the workplace or an accident on the way to or from work, irrespective of the number of years he has worked;

2/ In cases not specified in Item 1:

a/ in an amount compensating for 50 per cent of the average pay rise in his previous job (department), if the employer has worked for at least 15 years at the employer and in companies separated off from PZL- Świdnik S.A. or the Employees’ Social Foundation;

b/ in an amount compensating for 75 per cent of the average pay rise in his previous job (department), if the employer has worked for at least 20 years at the employer and in companies separated off from PZL- Świdnik S.A. or the Employees’ Social Foundation;

c/ in an amount compensating for 100 per cent of the average pay rise in his previous job (department), if the employer has worked for at least 25 years at the employer and in companies separated off from PZL- Świdnik S.A. or the Employees’ Social Foundation;

Article 58-59

Deleted.

Article 60

1.Employees who are authorised to self- monitor production quality are entitled to a self-monitoring bonus.

2.The bonus for employees who are authorised to self-monitor production quality will be awarded by the President of the management board/General Director at the request of the Quality Director.

3.The rules for awarding the bonus and its amount will be determined by the President of the management board/General Director.

Article 61 - 65

Deleted.

Article 66

1.Employees will be entitled to receive a one- off severance payment if their employment relationship is terminated due to their becoming eligible for a pension or disability benefit.

2.The principles for awarding and paying the severance payment are set out in Appendix 10.

Article 67

Deleted.

Article 68

1.If an employee dies during his employment relationship or while he is collecting benefits after its termination on account of being unable to work due to sickness, his family will be entitled to receive a posthumous severance payment from the employer.

2.The principles for paying posthumous severance payments are set out in Appendix 12.

Article 69 - 71

Deleted.

Article 72

1.Employees who are delegated to work outside their place of permanent residence for a period of more than 10 days and at a distance of more than 100 km will be entitled to a separation bonus.

2.For each day of separation, the employee will be entitled to a bonus in the amount of a single business trip allowance.

3.A separation bonus will not be paid:

1/ for days of unjustified absence from work;

2/ for a period of hospital-based treatment;

3/ for a period of holiday leave;

4/ for a period when an employee is unable to work due to sickness, if he was not in the location he was delegated to;

5/ to an employee who has been referred for training;

6/ to an employee who has been referred for work abroad.

Chapter X EMPLOYER’S OBLIGATIONS

Article 73

Deleted.

Article 74

1.When an employment relationship is terminated or expires, the employer must promptly issue a work certificate to the employee. In the event of the termination or expiry of an employment contract with an employee with whom the employer enters into another employment contract immediately after the termination or expiry of the previous one, the employer will only be obliged to issue a work certificate to the employee at his request.

2.At an employee’s request, the employer will issue a reference in connection with the termination or expiry of an employment relationship. The employee concerned can request that the employer give the reference a greater degree of detail, either directly or through a trade union.

3.Within seven days of receiving a work certificate, the employee can apply to the employer for it to be corrected. If the application is refused, the employee will be entitled to submit a request for the work certificate to be corrected to a labour court within seven days from the date when he receives notification of the refusal to correct the work certificate.

4.The employer will be obliged to pay the employee compensation for a period of unemployment, not exceeding six weeks’ remuneration,if the period of unemployment was caused by a work certificate being issued late or an incorrect work certificate being issued.

Article 76

1.The employer should accept for employment:

1/ A member or guardian of the family of an employee who has died due to an occupational illness or accident in the workplace or who is permanently or completely unable to work. The first person to be considered for employment will be the person who accepts the obligation of maintaining the employee’s family;

2/ A member or guardian of the family of an employee who has died during his employment relationship, excluding one-off unpaid leave exceeding 31 calendar days. The first person who will be considered for employment will be the person who accepts the obligations related to maintaining the family, provided that that person has appropriate skills for the Company.

2.The entitled persons specified in Sect. 1 should submit their offers within three months from the date of the event.

Article 77

1.Where employees become eligible for disability benefit or a pension, the employer will be obliged to carry out the formalities associated with obtaining the benefits due to them.

2.With regard to the employees referred to in Sect. 1, the employer must begin carrying out the formalities early enough to ensure that the pension or disability benefit is granted to the employee not later than the date when the employment relationship is terminated.

This provision will not apply if the employee impedes those formalities or prevents them from being carried out or if other circumstances have occurred that are independent of the employee and the employer.

3.The employer will be obliged to re-employ an employee who began applying for disability benefit or early retirement and did not acquire the right to receive them and has also terminated his employment relationship, at the employee’s request submitted within three months from a negative decision being issued by the Social Security Office.

Chapter XI EMPLOYEE’S OBLIGATIONS

Article 78

The employees understand that they share common interests with the employer, which properly fulfils its obligations towards the employees, and will endeavour to promote the common goal of preserving jobs.

Article 79

Deleted.

Article 80

1.Employees will be responsible for using the tools, protective and work clothes and personal protection measures assigned to them correctly and for their intended purpose. If they are damaged, lost or misplaced through the exclusive fault of the employee, he will be obliged to return their value according to the retail price as at the date when the tools, protective or work clothes or personal protection equipment were lost or were found to be missing.

2.The existence of culpability and the amount of the damage caused will be established by an ad hoc committee appointed by the employer, taking into account the retail price, the period of use and the degree of wear and tear of the lost items.

3.If an employee does not agree with the committee’s decision, he can appeal to the Company (Inter-Company) Conciliation Committee.

Article 81

1.Employees of the Company can conduct individual business activity provided that

2.Deleted.

Article 82

Employees of the Company cannot conduct activities which are competitive in relation to PZL-Świdnik S.A. The prohibition on competitive work is set out in Appendix 16.

Article 84

1.People holding managerial positions in the Company must familiarise themselves with work safety and hygiene rules and regulations and normative acts on work protection to the extent necessary to enable them to perform their obligations.

2.All persons appointed to managerial positions must undergo required health and safety training sufficient to enable them to perform their new function, before they begin performing it.

Article 85

1.The employer must maintain a register of occupational hazards and assess workstations with regard to occupational risk.

2.Once a year, the employer must present to the trade union organisations operating in the Company and the social labour inspector a list of jobs or workstations where occupational sicknesses, health hazards or accidents in the workplace occur, with precise specification of causes and countermeasures.

3.The employer must present to the trade union organisations operating in the Company and the social labour inspector the results of measurements of factors which are detrimental to health occurring at workstations.

4.The employer must establish tasks relating to improving health and safety conditions in its annual and long-term plans, take them into account in its investment, modernisation and refurbishment plans, and provide funds for their implementation.

5.The employer must disclose information on the implementation of its plan to improve health and safety conditions and present a written report to the trade union organisations operating in the Company on its implementation immediately after the end of the calendar year.

Article 87

2.The employer must co-operate with the doctors at the LOT-Medical Health Centre with regard to preventive measures and employee health care.

4.Periodic and follow-up medical examinations should, if possible, be carried out during working hours. Employees will retain their right to receive remuneration for the time when they are not working, and if periodic and follow-up medical examinations are carried out in a different town/city, the related trip should be deemed to be a business trip.

5.Only employees who hold a medical certificate confirming that there is no reason why they should not perform their job will be allowed to work.

6.After being unable to work for an uninterrupted period of 30 days, employees will undergo a follow-up medical examination at the employer’s expense.

Article 88

1.An employee cannot undertake work for which he has insufficient knowledge of the rules and regulations relating to safety and hygiene of work or the required qualifications or skills.

2.Before allowing an employee to work, the employer must inform him of the occupational risk involved with performing the work and of the principles of protecting employees from hazards.

3.If work conditions do not comply with health and safety regulations and create a direct threat to the health or life of an employee or if the work which he is performing threatens other people with such dangers, the employee will have the right to refrain from working, promptly notifying his superior to that effect.

4.If refraining from working fails to eliminate the threat referred to in Sect. 3, the employee will have the right to leave the place where the threat exists, promptly notifying his superior to that effect.

5.The employee will retain his right to receive remuneration for time when he refrains from working or leaves the place where a threat exists in the circumstances referred to in Sect. 3 and 4.

6.Employees will have the right, after notifying their superior, to refrain from performing work that requires special mental and physical fitness, if their mental and physical condition does not guarantee that they will perform the work safely and creates a threat for other people. An employee will not retain his right to receive remuneration for time when he refrains from working for that reason.

7.Work specified in separate provisions of law, where there is a possibility of a special threat to human health or life occurring, must be performed by two people to ensure safety.

Article 89

The employer is obliged to apply measures preventing accidents, occupational illnesses and other health conditions associated with the conditions of the work environment, in particular:

1/ To keep equipment that restricts or eliminates harmful factors from the work environment and equipment used to measure those factors in working order at all times;

2/ To carry out, at its own expense, tests and measurements of factors that are detrimental to health, register and file the results of those tests and measurements, and make them available to employees;

3/ Provide employees employed in conditions which are particularly onerous with free meals and drinks if it is necessary for the purposes of preventive health care. Detailed rules for providing meals and drinks are set out in Appendix 17;

4/ Provide employees with personal hygiene materials free of charge. Detailed rules for providing personal hygiene materials are set out in Appendix 18;

5/ Provide, free of charge, work clothes and footwear and individual protection measures protecting against the effects of factors occurring in the work environment that are dangerous or detrimental to health, and ensure they are cleaned and repaired. Detailed rules for providing work clothes and footwear and individual protection measures are set out in Appendix 18;

6/ Establish the degree to which new materials or technological processes that are introduced in the production process represent a health hazard for employees and take appropriate preventive measures;

7/ Mark in visible places workstations or places where a health hazard exists or where there is a high frequency of accidents.

Article 90

1.If an accident occurs in the workplace, the employer must:

1/ take the necessary action to eliminate or restrict the threat;

2/ ensure that first aid is provided to any injured persons;

3/ appoint an accident investigation team to establish the circumstances and causes of the accident;

4/ inform any injured persons and their families of their entitlements to benefits etc.;

5/ apply appropriate measures to prevent similar accidents.

2.Deleted.

Article 91

1.If an employee is diagnosed with an occupational illness, the employer must:

1/ establish the causes of the occupational illness and the nature and scale of the threat represented by that illness;

2/ immediately eliminate the factors that caused the occupational illness and apply other necessary preventive measures;

3/ ensure that doctor’s recommendations are implemented.

2.Deleted.

3.If an employee contracts an occupational illness, the employer will pay him, after he has received the one-off compensation payment provided for in generally applicable laws, an additional payment amounting to 90 per cent of that compensation.

Article 92

1.The employer is obliged to grant an employee who has had an accident or contracted an occupational illness a paid work exemption for the duration of health resort treatment or rehabilitation, on the basis of a doctor’s opinion.

2.The employer will pay the justified costs of the treatment specified in Sect. 1.

Article 93

The employer will supply organisational units with first aid kits and train the necessary number of employees to use them.

Article 94

1.If an employee submits a medical opinion confirming that he requires occupational rehabilitation, the employer must transfer the employee to a protected work position established for that purpose.

Article 95

1.The employer will create a health and safety service which will perform advisory and inspection functions relating to health and safety.

2.The detailed scope of the health and safety service’s activities and its powers, organisation, numbers and subordination and the qualifications required to perform its tasks are set out in the relevant regulation of the Council of Ministers.

Article 97

The employer will organise a "Work Conditions Review” at least once a year and take appropriate action aimed at eliminating any irregularities identified during the review.

Article 98

Rooms in the Company’s grounds (including production halls) will be subject to a ban on smoking tobacco products.

Article 99

1.On the basis of a medical opinion, the employer must transfer to an appropriate different job any employee who has been diagnosed with symptoms of an occupational illness or who has become unable to work in his current position as a result of an accident in the workplace or occupational illness and has not become eligible for disability benefit.

2.The employer cannot terminate an employment contract with an employee such as referred to in Sect. 1 if the state of his health evidenced by a medical opinion enables him to work in an appropriate different position.

3.If transferring an employee to a different job for the reasons specified in Sect. 1 causes a reduction in his remuneration, the employee will retain his existing personal classification rate and will be entitled to a compensation bonus amounting to the difference between the remuneration he previously received and the remuneration he receives in his new job, for a period of not more than six months.

4.The provisions of Sect. 2 will not apply where the exclusive reason for the accident in the workplace was a breach of health and safety regulations by the employee through his own fault or resulting from his being drunk, which the employer must prove.

Article 100

Deleted.

Article 101

Deleted.

Article 102

To the extent of its capacity to do so, the employer will provide employees, persons collecting pensions and disability benefit and persons collecting pre-retirement benefit or a pre-retirement allowance with the opportunity to take advantage of rehabilitation treatments, according to the principles set out in the Rules of the Social Benefits Fund.

Article 103

1.If an employee is transferred to a worsepaid position during a period of two years before becoming eligible for a pension for health reasons, he will retain his right to receive his current remuneration.

2.Sect. 1 will not apply if the employee retires early.

Article 104

1.Work performed by young people will be subject to special protection.

2.The scope of protection for young people is specified in the Labour Code.

Article 106

1.The employer cannot terminate an employment contract, with or without notice, with an employee performing the function of social labour inspector during the period of his mandate and for two years after it expires, unless there are valid reasons for terminating his employment contract without notice.

In which case the employment contract can be terminated after prior consent has been obtained from the trade union of which the person is a member, or which he has asked to defend him.

2.The employer cannot alter the work and payment conditions of an employee performing the function of social labour inspector to his disadvantage in the period specified in Sect. 1, unless it becomes necessary for the reasons referred to in Article 43 of the Labour Code.

Chapter XIII AWARDS AND COMMENDATIONS

Article 107

1.Employees who perform their duties in an exemplary manner, showing initiative in their work, increase its efficiency and quality and contribute to the completion of the Company’s tasks may receive the following awards and commendations:

1/ A pecuniary award;

2./ A written commendation;

3/ A public commendation;

4/ A certificate of recognition;

5/ A transfer to a position with a higher classification (to work).

2. A copy of the notice informing the employee he has been granted an award or commendation will be included in his personal files.

Article 108

For outstanding achievements in occupational and social work on behalf of the Company and its employees, for regular and dedicated work on achieving its business, production, quality and social objectives, on the basis of a justified and positively assessed application submitted by the manager of the relevant organisational unit, the President of the management board/General Director can, in consultation with the trade union organisations operating in the company:

1/ award the “Outstanding Employee of Wytwórnia Sprzętu Komunikacyjnego PZL-Świdnik” badge and a pecuniary award of 100 per cent of the base amount to employees who have worked in PZL-Świdnik S.A. for at least 15 years;

2/ submit an application to the relevant state authorities for an employee to be granted a national award.

Article 109

Employees who have worked in PZL-Świdnik

S.A. for 25 years or more can be granted an honorary diploma and receive awards according to principles set out in a separate understanding concluded by the parties to this Agreement.

Article 110 - 111

Deleted.

Chapter XIV OTHER EMPLOYMENT CONDITIONS

Article 112

1.For the purpose of amicably settling disputes over employees’ claims stemming from their employment relationship, the employer and the trade unions will jointly appoint a Conciliation Committee.

2.The following will be established according to the procedure provided for in Sect. 1:

1/ The rules and procedure for appointing the committee;

2/ The committee’s term of office;

3/ The number of members of the committee.

3.The Conciliation Committee will establish the rules for conciliation proceedings, which will be approved by the employer and the trade unions.

4.On the initiative of the trade union organisations operating in the Company, the Company’s management board and the management boards of companies separated off from PZL-Świdnik S.A., an Inter-Company Conciliation Committee can be appointed, which will cover all the companies which express their wish to accede to it.

Chapter XV SOCIAL BENEFITS

Article 113

1.The parties to this Agreement declare that they intend to continually improve the employees’ social conditions.

2.The employer is obliged to organise, conduct and finance social activities within the company for employees, people drawing pensions and disability benefit, and people drawing pre-retirement benefit or a pre-retirement allowance.

3.The employer is obliged to satisfy the employees’ cultural needs to the extent that funds are available for that purpose.

3.The amount of the basic write-off per employee employed in particularly onerous work conditions will amount to 50 per cent of the average monthly salary referred to in Sect. 2.

4.The amount of the fund will be increased by additional write-offs related to the employment of group 1 and 2 disabled persons and to the Company’s care of persons drawing pensions and disability benefit, in the amount of 6.25 per cent of the monthly salary referred to in Sect. 2.

5.The resources of the social benefits fund can be increased by titles specified in the official rules relating to social benefits.

Article 115

1.Employees and persons drawing pensions or disability benefit have the right to receive social benefits.

2.Social benefits will include, in particular:

1/ Financial and material assistance;

2/ The opportunity to take advantage of the Company’s rehabilitation centre;

3/ Funding collectively organised weekend holidays;

4/ Funding holidays and summer camps for children and young people;

5/ Housing loans.

3.The detailed principles for using the social benefits fund are set out in the rules of the social benefits fund attached as Appendix 21 hereto.

4.Deleted.

Article 116

1.The parties to this Agreement will appoint a Social Benefits Committee.

2.The Social Benefits Committee will operate on the basis of rules that it has drawn up and agreed with the employer and the trade unions.

3.The scope of the Social Benefits Committee’s activities and competence will include:

1/ The scope of activities and authorisations provided for in the rules of the Social Benefits Fund;

2/

3/ Assessing the implementation of other social tasks of the employer.

4.In order to function more efficiently, the Social Benefits Committee can select two sub-committees from among its number:

1/ a sub-committee for social benefits;

2/ a sub-committee for housing assistance.

Article 117

2.The trade union organisations operating in the company will supervise the activities of the Inter-Company Employees’ Grant and Loan Fund.

3.The employer will provide support, free of charge, associated with the activities of the Inter-Company Employees’ Grant and Loan Fund.

4.Meetings of members of the management board of the Inter-Company Employees’ Grant and Loan Fund can be held during working hours. The persons participating in the meetings will retain their right to receive remuneration for time spent at them.

5.The employer will provide organisational assistance for the purpose of organising elections, once per term of office, to the corporate bodies of the Inter-Company Employees’ Grant and Loan Fund.

Article 118

1.The employer will provide facilities for the functioning of the Inter-Company Co- operative Credit and Savings Fund.

2.The conditions of cooperation between the Inter-Company Co-operative Credit and Savings Fund and the employer and the scope of the performances that the employer renders to the Fund will be defined in an agreement.

3.The employer will deduct contributions and amounts due to the Fund from employees from remuneration, free of charge.

4.Meetings of members of the Fund’s corporate bodies can be held during working hours. People participating in meetings will not retain their right to receive remuneration for the time spent at them (this applies to the Company’s employees).

5.The employer will provide organisational assistance for the purpose of organising elections to the Fund’s corporate bodies once per term or office.

Article 119

Deleted.

Chapter XVI TRADE UNIONS

Article 120

The employer recognises the trade unions as exclusive representatives in negotiations on behalf of the employees.

Article 121

The employer will provide, free of charge, the facilities necessary for the functioning of the trade unions, in particular:

1/ office spaces together with basic equipment;

2/ telephone connections and the possibility of using a telex, fax machine and printing equipment;

3/ It will deduct membership contributions from remuneration and transfer them to the trade unions, according to principles and at times specified by the individual trade union organisations;

4/ transport for trade union leaders in the company’s vehicles;

5/ access to the company’s radio broadcasting system, according to principles agreed with the trade unions;

6/ notice boards in individual organisational units;

7/ administrative support.

Article 122

1.At the request of the management boards of the trade union organisations operating in the Company, the employer will grant a work exemption to employees performing elected functions in those management boards, in accordance with the Trade Unions Act.

2.The exemption referred to Sect. 1 can also be granted for a period exceeding the statutory exemption.

3.Employees who are exempted from work so that they can work in a trade union organisation operating in the company will receive remuneration consisting of the following components:

1/ The chairman of a trade union organisation operating in the company:

-the basic salary amounting to 2.2 average salaries within the establishment as calculated quarterly (non-negotiable).

-a long service award;

-a severance payment if he leaves his position on disability benefit or a pension;

2/ The deputy chairman of a trade union organisation operating in the company:

-the basic salary amounting to 2.0 average salaries within the establishment as calculated quarterly (non-negotiable).

-a long service award;

-a severance payment if he leaves his position on disability benefit or a pension.

1.When the exemption period ends, the employer will ensure that the employee resumes work in his previous position or, if that is not possible, in an equivalent position or in a different position that corresponds to his qualifications, for remuneration not lower than that which he received prior to the exemption, taking into account any changes in the principles of paying remuneration made in the Company during the exemption.

2.If the interested person and the employer give their consent, it will also be possible for an employee delegated to perform trade union work to return to occupational work in a different position. However, that position cannot be lower than the position which he held before being delegated.

Article 123

1.The employer guarantees that no disciplinary measures or discriminatory action will be taken against any person for his trade union activity.

2.Without the consent of the management board of a trade union organisation operating in the company, the employer cannot terminate an employment relationship, with or without notice, or unilaterally amend an employment contract, to the employee’s disadvantage, with employees whose employment relationship is subject to special protection under the Trade Unions Act, for a period specified in a resolution of the management board of the trade union organisation and after that period has ended for an additional period corresponding to half of the period specified in the resolution, but not longer than one year after the end of that period.

Article 124

1.The employer guarantees that it will grant an exemption from work to employees being trade union members who are undergoing training, while continuing to pay them as if for normal working hours.

2.An exemption for a period of training will be granted at the request of the management board of a trade union organisation operating in the company and agreed with the employer.

Article 125

The employer is obliged to provide information at the request of the trade union organisations operating in the company which is necessary for conducting trade union activities, in compliance with the applicable provisions of law on official and state secrets.

Article 126

Representatives of multi-establishment trade union structures can participate in all negotiations in which trade unions are participating.

Article 127

The employer must allow persons indicated by the management boards of the trade union organisation operating in the company to enter the Company’s grounds, according to the principles which are generally applicable in the Company.

Article 128

The employer must seek the trade unions’ approval for all normative acts and regulations concerning all employee matters, in particular:

1/ Rules for determining wages and salaries;

2/ Rules for distributing the portion of profits designated for the employees; 3/ Rules for distributing the incentive fund;

4/ Rules for granting awards;

5/ Rules for electing employees’ representatives in the supervisory board

Article 129

1.The employer (the manager of the organisational unit) will provide the competent (according to the statute) trade union representatives with a list of persons entitled to bonuses under Articles 60 and 70 and with information on the distribution of the incentive fund, any changes in rates and on awards in a section or department.

2.The trade union representatives will acknowledge the information referred to in Sect. 1 by signing those documents. Any comments should be made in writing and submitted to the relevant division director for consideration with the participation of the trade unions.

3.The employer will make the information referred to in Sect. 1 available to the trade union organisations operating in the Company and notify them of promotions to higher managerial positions.

Article 131

The employer will make it possible, once per term of office, for elections to be held during working hours for company-wide and department trade union leaders, without employees losing their right to remuneration.

Article 132

1.The trade unions will carry out elections for social labour inspectors according to rules adopted by them.

2.The employer will ensure appropriate conditions for carrying out elections of social labour inspectors during normal working hours without employees losing their right to remuneration.

Chapter XVII FINAL PROVISIONS

Article 133

As of its effective date, this Agreement will supersede the existing collective bargaining agreement that came into being through the registration of the Understanding on the Introduction of a System of Paying Remuneration to Employees of WSK PZL- Świdnik S.A., the relevant provisions of the Labour Code, the provisions of the collective bargaining agreement for the machine industry, and other provisions of relevant legislative acts.

Article 134

2.This Collective Labour Agreement is subject to registration in the Regional Labour Inspectorate in Lublin.

3.Any amendments to this Collective Labour Agreement must be made by way of additional reports according to the procedure provided for the conclusion of this Agreement.

4.This Agreement can be terminated by mutual consent of the parties or upon the lapse of the notice period, where one of the parties has issued a notice of termination.

5.A notice of termination of this Collective Labour Agreement must be issued in writing. The notice period cannot be shorter than six months.

6.If this Collective Labour Agreement is terminated, with or without notice, the parties will promptly commence negotiating a new collective bargaining agreement.

The existing Agreement will be applicable until the parties conclude a new Agreement.

Article 135

The employer must make the content of this Agreement available to the employees.

Article 136

The employer will provide the necessary funds to finance the activities of the committees and teams appointed under this Agreement.

Article 137

At least once a year, the parties to this Agreement will assess the content of this Agreement and, if they find that it is necessary to update or amend it they will do so according to the procedure provided for concluding it.

Article 138

Any disputes that arise in connection with the.interpretation of the provisions of this Agreement will be resolved according to the procedure provided in the Act on Resolving Collective Disputes.

Article 139

Any matters which are not provided for in this Collective Labour Agreement will be subject to the provisions of the Labour Code, executive regulations related to the Labour Code, other generally applicable provisions of labour law and the Multi-Establishment Collective Labour Agreement for Employees of Defence and Aviation Industry Companies.

Article 140

1.The parties hereto will jointly interpret the provisions of this Agreement and of any additional reports.

2.The parties concluding this Agreement will appoint a permanent team to interpret its provisions.

Article 141

The following appendices form an integral part of this Agreement:

Appendix 1 Deleted

Appendix 2 Table coefficient of basic remuneration rates for particular categories of classification eith reference to minimum remuneration defined in corporate collective labour agreement for worker positions and non-manual positions

Appendix 3 Deleted

Appendix 4 Deleted

Appendix 5 Rules for classifying and promoting employees in blue and white- collar positions

Appendix 6 Rules for the negotiation system determining the average wage increase in the Company

Appendix 7 Deleted

Appendix 8 List of positions that carry an entitlement to a functional bonus and functional bonus levels and multipliers.

Appendix 9 Deleted

Appendix 10 Rules for awarding and paying severance payments when an employment relationship is terminated due to an employee becoming eligible for a pension or disability benefit.

Appendix 11 Deleted

Appendix 12 Rules for paying death benefit.

Appendix 13-15 Deleted

Appendix 16 Prohibition on competitive work.

Appendix 17 Rules for providing meals, drinks and vitamin C

Appendix 18 Rules for providing personal protection measures, work clothes and footwear and personal hygiene materials.

Appendix 19 Deleted

Appendix 20 List of work that women are prohibited from performing.

Appendix 21 Rules of the social benefits fund.

Appendix 22 Employment guarantee.

Article 142

1.This Collective Labour Agreement will come into force on the date when it is registered.

2.Article 34 will apply until 30 September 1998.

1998 r.

3.Art. 12 ust. 3 pkt 4 i art. 12 ust. 8 wchodzą w życie od 1 sierpnia 1997r.

4.Art. 35 wejdzie w życie po wynegocjowaniu przez strony Układu wielkości zmian płacowych zgodnie z załącznikiem nr 6 §7

5.Art.36 wchodzi w życie od 1 stycznia 1998r.

6. Art. 120 ust. 3 wchodzi w życie od 1 stycznia 1998 r.

7. Art. 33 ust. 3 wchodzi w życie od 1 października 1998 r.

1.Articles 12.3.4 and 12.8 will come into force on 1 August 1997.

2.Article 35 will come into force after the parties to this Agreement have negotiated the amount of wage/salary changes in accordance with Appendix 6 par. 7.

3.Article 36 will come into force on 1 August 1998.

4.Article 120.3 will come into force on 1 August 1998.

5.Article 33.3 will come into force on 1 October 1998.

The page containing the signatures of the parties to this Agreement has been omitted.

Appendix 1

deleted

Classification category	Coefficient to payment
	Minimum
I	1,00
II	1,00
III	1,00
IV	1,05
V	1,10
VI	1,10
VII	1,15
VIII	1,20
IX	1,25
X	1,35
XI	1,45
XII	1,55
XIII	1,65
XIV	1,75
XV	1,85
XVI	2,00
XVII	2,10
XVIII	2,25
XIX	2,40
XX	2,60
XXI	2,80
XXII	3,00

 

Appendix 3

deleted

Appendix 4

deleted

§ 1

Employees who are newly-employed in the

Company will be assigned a personal

classification category depending on:

-their education;

-their practical training in their occupation, taking into account the provisions of the applicable qualifications scale.

§ 2

1.Graduates of vocational school, secondary school or an institution of higher education employed in blue or white-collar positions will receive minimum rates in individual classification categories:

1/ after completing basic vocational school - 2-4;

2/ after completing secondary school- 3-6; 3/ after completing higher education - 5-7;

2.The personal classification category assigned will depend on:

-the grade on the certificate of graduation from basic vocational school, secondary school or vocational college or on the graduation diploma for studies at an institution of higher education;

-additional qualifications required to work in a particular position;

-the results of tests of fitness for work in a particular position;

-the results of interviews with the candidate.

3.After completing an induction training period and after being positively assessed in an interview and having obtained a positive assessment from his direct superior, the employee will receive a higher classification group by a minimum of one category and a maximum of three categories, and an increase in his personal classification rate of not less than 5 per cent of the rate resulting from the lowest remuneration defined by this Agreement.

§ 3

Deleted.

II. RULES FOR ASSIGNING HIGHER CATEGORIES AND RATES TO EMPLOYEES

§ 4

Employees will be reclassified in accordance with an annual wages and salaries understanding concluded between the Company’s management board and the trade unions.

§ 5

The trade unions will be informed of the distribution of funds for reclassification in individual divisions of the Company.

§ 6

Direct superiors will reclassify employees on the basis of a work assessment, with particular consideration for the productivity, quality and discipline of their work.

§ 7

Individual reclassifications of employees in connection with promotion to higher positions can be carried out independently of general reclassifications in the Company.

§ 8

Deleted.

§ 1

Pursuant to the Act on the Negotiation System for Determining the Average Wage Increase in Business Entities and Amending Certain Acts (Journal of Laws No. 1/95, item 2), when establishing the average wage increase for the next year, the Company must apply the provisions set out in the act.

§ 2

A Trilateral Committee appointed under the above act, composed of supreme state administrative authorities, trade unions and employer organisations will establish, by 31 August of each year, the maximum annual index for the average monthly wage increase and provisional indices for the average monthly wage increase in subsequent quarters in relation to the average monthly wage in the previous year.

§ 3

If the Trilateral Committee does not establish the indices referred to in § 2, the Council of Ministers will establish them by way of a regulation by 1 December of each year.

§ 6

The provisions of § 4 and § 5 do not breach separate provisions of law on rules for establishing pay conditions for work and awarding other work-related benefits.

§ 7

The schedule and amount of wage increase instalments for employees of the Company for a particular year will be established by the Company’s management board and the trade unions in the first quarter of the year in question, by way of negotiations, taking § 4 and § 5 into account.

Appendix 7

deleted

Appendix 8 LIST OF POSITIONS THAT CARRY AN ENTITLEMENT TO A FUNCTIONAL BONUS AND THE LEVELS AND MULTIPLIERS OF THE FUNCTIONAL BONUS

§ 1

The following functional bonus levels are established:

No.	Position	Additional levels
1	Division director (who is not a management board member), chief accountant, plant director	7 - 10
2	Deputy director of plant, plant manager, chief specialist, head of a group of departments.	6 - 8
3	Deputy plant manager, department manager, office director, programme head, deputy department manager, unit manager, chief dispatcher, deputy chief accountant	4 - 7
4	Branch manager	4 - 6
5	Office/ workshop/ section manager, quality control department manager	3 - 5
6	Foreman, laboratory manager.	3 - 4
7	Sorting office, lending facility or warehouse manager, dispatcher	2 - 3
8	Hostel manager, admin office manager	1 - 2

§ 2

Appendix 9

deleted

Appendix 11

deleted

Appendix 12 RULES FOR PAYING DEATH BENEFIT

§ 1

If an employee dies during his employment relationship or in a period when he is drawing benefits after its termination on account of being unfit for work due to illness, his family will be entitled to a death benefit payment in the amount of:

1/ two months’ remuneration, if the period of employment was shorter than 10 years;

2/ six months’ remuneration, if the period of employment was 10 years or more;

3/ nine months’ remuneration, if the period of employment was 15 years or more.

§ 2

The periods of employment referred to in § 1 will include the period of employment in PZL- Świdnik S.A., calculated according to the arrangements set out in Article 53.3 of this Agreement, and all other periods of employment, regardless of breaks in employment and the procedure by which the employment relationship was terminated.

§ 3

The following members of the employee’s family will be entitled to a death benefit payment:

1/ the spouse;

2/ other family members who fulfil the requirements for obtaining a family allowance from the Social Security Fund, under the provisions of law on pensions and disability benefit.

§ 4

The death benefit payment will be divided equally among all the entitled family members.

§ 5

If only one family member is entitled to receive death benefit remains after an employee dies, he will be entitled to a payment in the amount specified in § 1.

Appendix 13-15

deleted

Appendix 16 PROHIBITION ON PERFORMING COMPETITIVE WORK

§ 1

1.Within the scope defined in a separate agreement, an employee cannot conduct activities which are competitive with respect to the employer or perform work under an employment relationship or on a different basis for an entity which conducts such activities (non-compete obligation).

2.The provisions of Sect. 1 do not apply to work performed with the employee’s consent given, for example, to enable an employee to gain work experience.

3.The non-compete obligation also applies to employees on unpaid leave.

§ 2

If the employer has incurred damage due to an employee breaching the non-compete obligation provided for in the agreement, it will be able to demand that the employee compensate it for that damage according to the principles set out in the Labour Code.

§ 3

1.The employer can conclude non-compete agreements with employees employed in the Company.

2.If an employee refuses to conclude the agreement specified in Sect. 1, the employer can terminate his employment relationship with notice.

§ 4

1. The employer and an employee employed in a position in which he has access to particularly important information whose disclosure could cause damage to the employer will conclude a non-compete agreement after the employment relationship has ended.

2.The agreement will also specify the period for which the non-compete obligation will apply and the amount of compensation due to the employee from the employer.

3.The conclusion of an agreement will be a pre-condition for an employee being employed in the position specified in Sect. 1.

§ 5

1.The non-compete obligation referred to in § 4 will cease to apply before the end of the term for which the agreement provided for in these provisions was concluded if the reasons justifying such an obligation cease to exist or if the employer fails to perform its obligation to pay compensation.

2.The compensation referred to in § 4 cannot be lower than 25 per cent of the remuneration received by the employee before his employment relationship was terminated, and will be paid as long as the non-compete obligation is applicable. The compensation can be paid in monthly instalments.

§ 1

The employer will provide employees of the Company employed in conditions which are particularly onerous or harmful, free of charge, with:

-meals, in order to prevent health problems;

-drinks;

-vitamin C.

§ 2

1.Preventive meals will be provided to

employees who perform work during a shift:

1/ which involves physical exertion resulting in effective energy output, in a single shift, of more than 2,000 kcal (8,374 kJ) for men or more than 1,100 kcal (4,606 kJ) for women;

2/ deleted;

3/ which involves physical exertion resulting in effective energy output, in a single shift, of more than 1,500 kcal (6,280 kJ) for men or more than 1,000 kcal (4,187 kJ) for women, performed in closed spaces in which a constant temperature below 10°C is maintained for technological reasons or the heat stress indicator (WBGT) exceeds 25°C;

4/ which involves physical exertion resulting in effective energy output, in a single shift, of more than 1,500 kcal (6,280 kJ) for men or more than 1,000 kcal (4,187 kJ) for women, performed in the open air from 1 November to 31 March;

5/ Deleted.

6/ Deleted.

7/ Deleted.

8/ which involves eliminating the effects of natural disasters or other events of force majeure.

9/ underground.

2.Preventive meals will consist of one hot

dish with an energy value of approximately

1,000 kcal.

§ 3

1. The employer will be obliged to provide:

1/ All employees with a sufficient amount of bottled mineral water to fully satisfy the body’s requirements from 1 June to 31 August. For the remaining nine months of the year, it will provide them with at least one bottle per person for each working day.

2/ A sufficient quantity of drinks to fully satisfy the bodily needs of employees employed:

a/ in hot microclimatic conditions with a heat stress indicator (WBGT) exceeding 25°C;

b/ in cold microclimatic conditions with a wind chill index exceeding 1,000;

c/ to perform work involving physical exertion resulting in effective energy output, in a single shift, of more than 1,500 kcal (6,280 kJ) for men or more than 1,000 kcal (4,187 kJ) for women;

d/ to perform work in the open air where the ambient temperature is lower than 10°C or higher than 25°C;

e/ at workstations at which the temperature due to atmospheric conditions exceeds 28°C.

2.Drinks provided by the employer in accordance with Sect. 1.2/ should be hot or cold depending on the work conditions and, in the cases specified in Sect. 1.2/a/, they should be additionally enriched with mineral salts and vitamins.

3.The employer should provide employees exposed to the effects of dust containing lead and lead compounds with a daily dose of 300 mg of vitamin C in the Company’s grounds.

§ 4

Where it is not possible to determine the heat stress indicator (WBGT), one of the below conditions of work in closed spaces in which the following conditions are maintained for reasons related to technology, should be deemed to be heat stress exceeding 25°C:

1/ Temperature exceeding 30°C, where relative air humidity exceeds 65 per cent

2/ Temperature exceeding 35°C, where relative air humidity exceeds 50 per cent;

3/ Temperature exceeding 40°C, irrespective of air humidity.

§ 5

On the basis of an analysis of the work environment based on these principles, the employer, in consultation with the trade unions, will draw up a list of positions which carry an entitlement to meals, drinks and vitamin C.

§ 6

1.Meals, drinks and vitamin C will be issued to employees on days when they are performing work which justifies their being issued.

2.Drinks should be available for employees throughout their working shift.

§ 7

Employees will not be entitled to a pecuniary equivalent for meals, drinks and vitamin C.

§ 8

The employer will determine the detailed rules for issuing meals, drinks and vitamin C in consultation with the trade unions.

Chapter 1 RULES FOR PROVIDING INDIVIDUAL PROTECTION MEASURES AND WORK CLOTHES AND FOOTWEAR

§ 1

1.The employer must provide employees, free of charge, with individual protection measures and work clothes and footwear, which will be the employer’s property.

2.Individual protection measures should protect the employee against the effects of dangerous and harmful factors occurring in the work environment and meet compliance assessment requirements set out in separate provisions of law.

3.Work clothes and footwear will be provided to employees:

1/ Where there is a possibility that that their own clothes will be destroyed or significantly soiled while they are performing their duties;

2/ In order to meet technological, sanitary or occupational health and safety requirements;

4.The employer will ensure that the clothes which it provides are cleaned and repaired and will pay the related costs.

§ 2

In consultation with the trade unions and the company social labour inspector, the employer will prepare a table detailing the allocation of work clothes and footwear, which will be updated at least once a year.

§ 3

1.Deleted.

2.Clothes provided to an employee should only be used when he is performing his duties.

3.Work and protective clothes and work shoes can only be used outside the workplace on the way to work and when returning when work is being performed outside the Company’s grounds.

4.The employee will be responsible for using clothes correctly and according to their intended purpose, keeping them clean and in good technical condition, and for correctly using personal protection equipment.

§ 4

1.Employees will be provided with protective clothes, personal protection measures and work footwear for performing work with a short duration and inspection procedures, according to the tasks they are required to perform.

2.Personal protection measures, work clothes and footwear will also be provided to employees delegated by their superior to perform periodic work on site of the Company, in case they had not been entitled to receive such clothes before.

§ 5

If an employee is transferred to a workstation which does not carry an entitlement to work or protective clothes or personal protection measures or which carries an entitlement to a different type, he must return the clothes he used previously or the equivalent monetary value of any wear and tear that occurred during the period for which he used them. The above rules also apply to protective clothes, personal protection measures and work shoes provided according to the principles set out in § 4.

§ 6

1.Employees of the Industrial Security Service are entitled to use special uniforms. An employee becomes eligible for a uniform upon concluding an employment contract for an indefinite term.

2. Ifanemployment relationshipis

terminated before the end of a uniform’s usability period, the employee must return the uniform or its equivalent monetary value less the amount of wear and tear that occurred during the period for which he used it.

§ 7

Students and pupils undergoing practical instruction and occupational work experience in the Company will be provided with work clothes and footwear for the period of their work experience according to the standards and rules provided for the workstations at which they are undergoing such training or work experience. Clean used clothes will be issued first for such work.

§ 8

1.If an employee’s employment relationship is terminated, he must return any clothes and personal protection measures, except for underwear, or take over its ownership in return for repaying an amount equal to its undepreciated value.

2.Clothes and uniforms need not be returned where:

1/ An employee retires or leaves work on disability benefit;

2/ An employee dies;

3/ Those objects were used before the employment relationship was terminated for a period exceeding 75 per cent of the usability period specified in the table of standards.

1.Work footwear and underwear need not be returned.

§ 9

1.Protective and work clothes which were issued individually and have exceeded their usability period need not be returned.

2.Leather clothing need not be returned after a period of use if the employee agrees to the usability period being extended by 20 per cent or pays the equivalent of 20 per cent of the price of the clothes when new.

3.Protective equipment which has exceeded its usability period will be returned for destruction.

§ 10

Detailed rules for managing personal protection measures, protective clothes and work footwear are set out in a manual prepared by the employer and agreed with the trade unions.

Chapter II RULES FOR PROVIDING PERSONAL HYGIENE MATERIALS

§ 11

1.In order to maintain employees’ personal hygiene, the employer will provide them, free of charge, with toilet soap, hand cleaner, towels and protective cream.

2.Hand cleaner and protective cream should be provided to employees individually according to the standards set out in § 13 or provided in dispensers in departments/cells, ensuring that the needs of the employees in the department/cell are met in terms of quantity, quality and protection.

The following groups of workstations are established with regard to the possibility of employees getting dirty:

1/GroupI -includespositionswhich

require:

a/ washing dirt which is stuck fast to the skin of the hands, face and legs;

b/ frequent washing of hands due to constantcontactwith poisonous

substances;

2/GroupII -includespositionswhich

require:

a/ washing of the upper body due to a high degree of dirtiness;

b cleaning dirt consisting of washable substances from the entire body;

3/GroupIII -includespositionswhich

require:

a/ careful washing of hands several times during working hours due to production requirements:

b/ careful washing of hands several times during working hours due to sanitary requirements.

4/GroupIV -includespositionswhich

require washing washable dirt from the hands and face.

5/GroupV -includespositionswhich

require washing moderately dirty hands.

§ 13

The following quarterly norms for allocating personal hygiene materials are established:

1/ Group I - 300 grams of toilet soap and 1,600 grams of hand cleaner; 800 grams of hand cleaner;

3/ Group III - 200 grams of toilet soap and 1,200 grams of hand cleaner;

4/ Group IV - 200 grams of toilet soap and 400 grams of hand cleaner;

5/ Group V - 200 grams of toilet soap.

§ 14

In positions where it is necessary to protect the hands using protective creams, employees will be provided with creams at the request of the department manager approved by the health and safety service and the LOT-Medical Health Centre.

§ 15

1.Employees in Groups I-IV referred to in § 12 will be entitled to two towels per year;

2.Employees in Group V referred to in § 12 will be entitled to one towel per year.

Appendix 19

deleted

Part A - Women are prohibited from doing the following work:

I.Work involving physical exertion, heavy lifting and adopting an awkward body position.

1.Physical work where the workload exceeds a net energy output of 5,000 kJ (1,200 kcal) per working shift or 20 kJ/minute for incidental work.

2.Manually lifting weights exceeding:

1/ 12 kg for permanent work;

2/ 20 kg for incidental work (up to four times per hour during a work shift).

3.Manually operating equipment such as cranes, cranks, steering wheels etc., if it requires exertion exceeding:

1/ 50 N (~5 kG) for permanent work;

2/ 100 N (~10 kG) for incidental work (up to four times per hour during a work shift).

4.Foot-powered operation of equipment (pedals, buttons etc.), if it requires exertion exceeding:

1/ 120 N (~12 kG) for permanent work;

2/ 200 N (~20 kG) for incidental work (up to four times per hour during a work shift).

5.Manual uphill shifting - up ramps, stairs etc., where the maximum gradient exceeds 30° and the height exceeds 5 metres - of weights with weight exceeding:

1/ 8 kg for permanent work;

2/ 15 kg for incidental work (up to four times per hour during a work shift).

1.Transporting weights whose weight exceeds:

1/ 50 kg, using a one-wheel

wheelbarrow, up a gradient of up to

2°;

2/ 80 kg, using 2, 3, and 4-wheel trolleys, up a gradient of up to 2°;

3/ 300 kg, using a trolley mounted on rails, up a gradient of up to 1°.

Where weights are transported over an uneven surface in the manner specified in items 1 and 2, the weight of the loads cannot exceed 60 per cent of the quantity specified in those items.

I.Work involving exposure to vibrations

1.Workinanenvironmentinvolving

exposure to vibrations transferred through the upper limbs - the permissible values of accelerations are specified in the Regulation of the Council of Ministers of 10 September 1996 on a list of work which women are prohibited from doing (Journal of Laws No. 114 of 1996, item 545).

2.Workinanenvironmentinvolving

exposure to general vibrations - the permissible values of accelerations are specified in the Regulation of the Council of Ministers of 10 September 1996 on a list of work which women are prohibited from doing (Journal of Laws No. 114 of 1996, item 545).

Part B - Pregnant and breast-feeding women are prohibited from performing the following work:

I.Work involving physical exertion and transporting heavy weights and work in an awkward body position.

.

1.All work where the maximum values of the physical workload, measured in terms of the net energy output on performing the work, exceeds 2,900 kJ (700 kcal) per work shift.

2.All the work specified in Part A Chapter I Items 2-6, if one quarter of the values specified in them is exceeded.

1.Work in an awkward body position.

2.Work in a standing position for a total of more than three hours during a shift.

I.Work in a cold, hot or variable microclimate.

1.Work under conditions in which the PMV index (the predicted mean value), determined in accordance with the Polish Standard, is greater than 1.5 or less than -1.5.

2.Work in an environment in which there are sudden changes in air temperature with a range exceeding 15°C.

II.Work involving exposure to the effects of electromagnetic fields and ionising and ultraviolet radiation.

1.Work within range of electromagnetic fields with an intensity exceeding the value for a safe zone.

2.Work in an environment in which one quarter of the value of the maximum permissible intensities of ultra-violet radiation is exceeded, as specified in the regulations on maximum permissible intensities and concentrations of factors which are detrimental to the health in work environments.

3.Work involving exposure to the effects of ionising radiation.

III.Work under increased or reduced pressure.

All work under increased or reduced pressure.

IV.Work in contact with harmful biological factors.

V.Work involving exposure to the effects of harmful chemical substances.

1.Work involving exposure to the effects of factors which are carcinogenic or likely to be carcinogenic, specified in separate provisions of law.

2.Work involving exposure to the chemical substances specified below, irrespective of their concentration in the work environment:

-chloroprene,

-2-ethoxyethanol,

-ethylene dibromide,

-chemotherapeutic medicines,

-manganese,

-2-methoxyethanol,

-lead and its organic and inorganic compounds,

-mercury and its organic and inorganic compounds,

-styrene,

-synthetic oestrogen and progesteron,

-carbon disulphide,

-pesticides.

3.Work involving exposure to the effects of organic solvents if their concentration in the work environment exceeds one third of the maximum permissible concentrations.

VI.Work involving a risk of serious physical or mental injury

1.Work with a forced rhythm (e.g. on a conveyor belt);

2.Work inside tanks and channels;

3.Work which involves a risk of serious physical or mental injury, e.g. extinguishing fires, participating in chemical rescue operations, removing the effects of malfunctions, and work with explosive materials.

Part C - Pregnant women are prohibited from performing the following work:

I.Work involving exposure to noise and

vibrations.

1.Work in an environment in which the level of exposure to the effects of noise in relation to an eight-hour working day, measured in accordance with Polish Standards, exceeds 65 dB.

2.Work in an environment which involves exposure to the acoustic pressure of infrasonic and ultrasonic noise. The permissible level of acoustic pressure is specified in the regulation of the Council of Ministers of 10 September 1996 on a list of work that women are prohibited from doing (Journal of Laws No. 114 of 1996, item 545).

3.Work in an environment which involves exposure to vibrations transferred through the upper limbs. The permissible values of accelerations are specified in the regulation of the Council of Ministers of 10 September 1996 on a list of work which women are prohibited from doing (Journal of Laws No. 114 of 1996, item 545).

4.Any work in conditions involving exposure to vibrations which have a general effect on the human body.

II.Work operating monitors.

Work involving operating monitors for more than four hours per 24-hour period.

III.Work below ground level and at height.

1.Work at height outside permanent galleries, platforms and other permanent raised areas which are fully secured against falls (i.e. where there is no need to use individual protection measures against falls) and ascending and descending ladders and step irons.

2.Work in trenches and open tanks.

Appendix 21 RULES OF THE SOCIAL BENEFITS FUND

Chapter I CREATING THE FUND

§ 1

The Company social benefits fund (the "Fund”) is created and utilised on the basis of the Act on Company Social Benefits Funds of 4 March 1994 (Journal of Laws No. 43/94 item 163, as amended) and the provisions of law associated with it.

§ 2

1.The Fund is created from a basic annual write-off calculated in relation to the average number of employees, including an increased write-off for employees employed in particularly onerous work conditions.

2.The amount of the Fund is increased by additional write-offs on account of the employment of Group 1 and 2 disabled persons and on account of the Company’s care of persons drawing pensions and disability benefit.

§ 3

The Fund’s resources are increased by:

1/ Revenues from fees collected from individuals and organisational units which take advantage of social activities;

2/ Donations and bequests from individuals and business entities;

3/ Interest on resources of the Fund kept in a bank account;

4/ Revenues from interest on granted housing loans;

5/ Any income from selling, leasing and liquidating fixed assets used for the Company’s social activities which is not designated for maintaining or refurbishing the Company’s social facilities;

6/ Income from the sale and liquidation of Company houses and flats;

7/ Other funds specified in separate provisions of law.

§ 4

1.The Fund’s resources will be kept in a separate bank account.

2.Any resources of the Fund which are not utilised in a particular calendar year will be carried forward to the next year.

Chapter II DISTRIBUTING THE FUND

§ 5

1.Deleted.

2.Proposals for distributing the Fund will be prepared by the division responsible for employee affairs. The employer will present those proposals to the trade unions not later than 14 days before the expiry of the time limits specified in Sect. 3 and 4.

3.By 31 January, the employer and the trade unions will adopt a temporary plan for the distribution of the Fund’s resources for the current year.

4.By 31 March, the annual plan for distributing the Fund’s resources will be adopted at a meeting of representatives of the employer and the trade unions.

5.If the trade unions do not present a common position on the matters and time limits specified in Sect. 3 and 4, the employer will adopt the plan or plans for the distribution of the Fund’s resources unilaterally, taking into account those proposals with regard to which the trade unions presented a common position on time.

The amounts of individual payments provided for in the approved spending plan for a particular year will be released at the request of the appropriate organisational unit of the employer, agreed with the Social Benefits Committee and approved by the employer.

Chapter III PERSONS ENTITLED TO USE THE FUND

§ 7

1.The following persons will be entitled to assistance from the Social Benefits Fund: 1/ Employees employed on a full-time or

part-time basis under an employment contract;

2/ Employees on parental leave;

3/ Young employees;

4/ People drawing company pensions and disability benefits and former employees of the Company who left the Company on a pre-retirement benefit or allowance;

5/ Spouses of employees who died during their employment who receive a family allowance;

6/ Spouses of deceased former employees who drew company pensions or disability benefit.

2.With regard to social activities, assistance will also be provided to dependent family members of employees or persons who are drawing a company pension or disability benefit, including children who go to school or study.

3.In exceptional cases, financial assistance from the Social Benefits Fund can also be granted to:

1/ orphans of former employees of the Company;

2/ orphans covered by Company welfare; 3/ children staying in children’s homes;

4/ children taken into foster care by employees or persons who draw a pension or disability benefit;

5/ Deleted.

6/ Other individuals who find themselves in difficult circumstances, via charity organisations andsocieties, schools

and similar entities.

1.FinancialassistancefromtheSocial

Benefits Fund can also be granted to clubs of people drawing pensions and disability benefitscreated bythetradeunion

organisations operating in the Company and to the Honoured Blood Donors Club of the Polish Red Cross operating in Wytwórnia Sprzętu Komunikacyjnego PZL- Świdnik S.A.

2.FinancialassistancefromtheSocial

Benefits Fund can also be granted to societies, organisations and similar entities involved in the provision of cultural or sports and recreational activities for employees of the Company and persons drawing company pensions and disability benefit.

Chapter IV RULES FOR PROVIDING SOCIAL ASSISTANCE

§ 8

1. The social part of the Social Benefits Fund can also be used for:

1/ Funding summer camps for children and young people;

2/ Funding holidays;

3/ Goods vouchers;

4/ Grants;

5/ Organising recreational events for children and young people, including:

-Christmas parties;

-cultural events;

-other occasional events;

6/ Organising recreational events for employees and people drawing pensions and disability benefit, including weekend events, in particular:

-company sports matches;

-tourist and recreational trips, with regard to the costs of transport for each entitled person;

7/ Organising department meetings with former employees drawing pensions from a particular organisational unit;

8/ Funding gifts for employees leaving the Company on a pension, disability benefit or pre-retirement benefit;

9/ Organising farewell parties for employees leaving the Company on a pension, disability benefit or pre- retirement benefit;

10/ Organising Christmas Eve parties for single people drawing pensions or disability benefit;

11/ Funding gifts associated with visiting sick employees or persons drawing pensions or disability benefits in the event of long-term medical exemptions;

12/ Funding recreational/sporting activities;

13/ Funding cultural activities;

14/ Other forms of assistance specified in annual plans for distributing the fund.

2.Granting resources from the Fund is conditional on life, family and material situation of the entitled person. In order to assess that situation, natural persons applying for assistance from the Fund must submit:

1/ A declaration of their income per member of their family for the past year by the period specified by the employer;

2/ Other documents justifying their need to be granted assistance.

3.The detailed rules for granting social assistance will be determined by the employer in consultation with the trade unions.

Chapter V RULES FOR PROVIDING HOUSING ASSISTANCE

§ 9

1.Financial assistance for housing purposes can be granted in the form of a loan designated for:

1/ Supplementing a contribution to a housing cooperative;

2/ Buying a flat;

3/ Building a single-family house;

4/ Converting spaces for residential purposes;

5/ Refurbishing and modernising flats and single-family houses;

6/ Adapting flats and single-family houses for the needs of physically impaired people;

7/ A security deposit required to obtain a flat;

8/ Other forms of assistance specified in annual plans for distributing the Fund.

2.The detailed rules for granting housing assistance will be determined by the employer in consultation with the trade unions.

Chapter VI FINAL PROVISIONS

§ 10

At the request of the Social Benefits Committee, agreed with the trade union organisations and approved by the President of the management board/General Director, other forms of social benefits that are not provided for in these rules can be arranged.

2.The commitment referred to in art 31 CCLA means that the Employer guarantees that, during the Employment Guarantee Period, the Employer will not terminate employment contracts and it will not terminate work and pay terms and conditions arising from such contracts (Article 42 of the Labour Code) with respect to the Employees referred to in clause 1, for reasons set out in the Act on Special Terms and Conditions of Terminating an Employment Relationship with Employees for Reasons not Applicable to Employees dated 13 March 2003 (Journal of Laws No. 90, item 844, as amended). This commitment means that the Employer guarantees that, during the Employment Guarantee Period, it will not engage in any group or individual dismissals due to reasons referred to by the act, and it will not terminate work and pay terms and conditions arising from employment contracts due to such reasons (Article 42 of the Labour Code).

3.The following Employees will not be covered by the Employment Guarantee Period referred to in clauses 1, 2 and 31 CCLA:

a/ whose employment contract was terminated based on the employee’s termination notice submitted to the Employer;

b/ with whom the employment contract was terminated pursuant to Article 52 of the Labour Code;

c/ with whom the employment contract was terminated pursuant to Article 53 of the Labour Code, except for Employees whose inability to work was caused by an accident in the work place that occurred at the Employer’s premises, or on the way to or from work at the Employer’s premises, or by an occupational disease acquired at the Employer’s premises;

d/ whose employment contract was terminated based on a mutual agreement between the parties;

e/ whose employment contract was terminated in the situation when one of the reasons of termination was becoming eligible for retirement upon reaching statutory age, or because the person became eligible for disability pension due to an inability to perform work, except for the Employees who acquired this right as a result of an accident in the work place that occurred at the Employer’s premises or on the way to or from work at the Employer’s premises, or as a result of an occupational disease acquired at the Employer’s premises;

f/ whose employment contract was terminated after the term for which it was concluded;

g/ whose employment contract has expired.

§2

If the Employer serves termination notice with respect to the employment contract during the Employment Guarantee Period on an Employee covered by the provisions of this Package, both in case of individual as well as group dismissals, for reasons not applicable to the Employee, or if the employment contract is terminated due to other reasons, or if, as a result of the Employee’s appeal before the Labour Court, a final and valid decision was issued awarding compensation for the unlawful termination of the employment contract due to such other reasons, the Employer undertakes to pay compensation on the date of the termination of the employment contract to each Employee with whom it terminates the employment contract. This will also apply to the termination notice modifying work and/or pay terms and conditions, referred to in Article 42 of the Labour Code, due to reasons not applicable to the Employee, unless the new work and/or pay terms and conditions offered to the Employee are equivalent to the existing ones and take into account the Employee’s education, qualifications, statutory licences to perform the job and skills necessary to perform work in the new position. In such a case, no compensation shall be due to the Employee. This does not conflict with the provisions of Article 771 of the CCLA.

2. Subject to clause 5 below, the compensation referred to in section 1 will amount to the following:

a/ if the employment contract is terminated during the second year of the Employment Guarantee Period the employee compensation will amount to:

-18timestheamountofthe

employee’s monthly remuneration, if the Work Service of that employee is less than 15 years in total;

-30timestheamountofthe

employee’s monthly remuneration, if the Work Service of that employee is 15 or more years but less than 30 years in total;

-36timestheamountofthe employee’s monthly remuneration, if the Work Service of that employee is 30 or more years in total;

b/ if the employment contract is terminated during the third year of the Employment Guarantee Period the employee compensation will amount to:

-12timestheamountofthe

employee’s monthly remuneration, if the Work Service of that employee is less than 15 years in total;

-20timestheamountofthe

employee’s monthly remuneration, if the Work Service of that employee is 15 or more years but less than 30 years in total;

-30timestheamountofthe

employee’s monthly remuneration, if the Work Service of that employee is 30 or more years in total;

c/ if the employment contract is terminated during the fourth year of the Employment Guarantee Period the employee compensation will amount to:

-12timestheamountofthe

employee’s monthly remuneration, if the Work Service of that employee is less than 15 years in total;

-18timestheamountofthe

employee’s monthly remuneration, if the Work Service of that employee is 15 or more years but less than 30 years in total;

-24timestheamountofthe

employee’s monthly remuneration, if the Work Service of that employee is 30 or more years in total;

d/ if the employment contract is terminated during the fifth year of the Employment Guarantee Period the employee compensation will amount to:

-6-times the amount of the employee’s monthly remuneration, if the Work Service of that employee is less than 15 years in total;

-12-timestheamountofthe

employee’s monthly remuneration, if the Work Service of that employee is 15 or more years but less than 30 years in total;

-18-timestheamountofthe

employee’s monthly remuneration, if the Work Service of that employee is 30 or more years in total;

e/ if the employment contract is terminated during the sixth year of the Employment Guarantee Period the employee compensation will amount to:

-3 times the amount of the employee’s monthly remuneration, if the Work Service of that employee is less than 15 years in total;

-6 times the amount of the employee’s monthly remuneration, if the Work Service of that employee is 15 or more years but less than 30 years in total;

- 12 times the amount of the employee’s monthly remuneration, if the Work Service of that employee is 30 or more years in total.

3.The employee’s remuneration for the purposes of clause 1 above shall be calculated a monetary equivalent for unused recreational holiday and shall not include in particular:

-remuneration under civil law contracts;

-Holiday Bonus, Long Service Award and

Privatisation Bonus (according to Article 36,53 and article 25 Employee

Guarantee Package for severance pay and compensation in connection with the termination of an employment contract.

3.During the Employment Guarantee Period, if the Employer terminates the employment contract due to reasons other than referred to in clause 1 in violation of labour law, confirmed by a final and valid decision issued by the relevant court, unless the Employee is reinstated, the Employer will immediately pay the compensation referred to in clause 2, (or as the case may be, clause 5 below) to the Employee.

4.Unless the calculation of compensation in accordance with section 2 above does not prove more beneficial for the Employee, in case of an Employee who has six or less years left before reaching the statutory retirement age, if the employment period enables such Employee to become eligible for retirement upon reaching such age, the amount for compensation due under circumstances set out in clause 2 will constitute the product of:

-the number of full calendar months calculated from the end of the date when the employment contract was terminated and the date on which such Employee would reach the statutory retirement age; and

-the monthly remuneration of the Employee determined as at the termination date of the employment relationship and calculated according to the provisions of clause 3 above.

5.The compensation, referred to in clause 2 (or as the case may be, clause 5 above) is independent of the Employee’s rights to benefits arising from other regulations in connection with a breach of regulations concerning the termination of the employment contract during the Employment Guarantee Period.

4.Employees covered by the Employment Guarantee Period, in cases referred to in clause 1 will be entitled to severance pay in compliance with Article 8 of the Act on Special Terms and Conditions of Terminating an Employment Relationship with Employees for Reasons not Applicable to Employees dated 13 March 2003 (Journal of Laws No. 90, item 844, as amended) in case dismissals are carried out on the basis of the aforementioned Act.

5. The compensation referred to in this paragraph is not due in the case of a termination notice changing work and pay terms and conditions, related with the termination notice served on the Employee with respect to a management position also resulting in the termination of a functional bonus and the amount of basic pay.

6. In the case of termination of an employment contract, Work Service referred to in clause 2 shall be calculated to the date when the employment contract is terminated.

§3

The provisions of §1 and §2 shall not apply to members of the Employer’s Management Board

§ 4

Work Service - means: the employment period calculated separately for each Company employee, taking into account: (1) the period of employment at employment at Zakład Produkcji Cywilnej Sp.z o.o., (5) the period of employment at Zakład Utrzymania Ruchu Sp.z o.o. (6) the period of employment at Zakład Obróbki Plastycznej Sp. z o.o., 7) the period of employment at Lotnicze Przedsiębiorstwo Usługowe “Heliseco” Sp. z o.o., 8) the period of employment at Przedsię¬biorstwo Usług Transportowych “Świd-Trans” Sp.z o.o., 9) the period of employment at Zakład Remontowy Sp. z o.o., 10) the period of employment at PZL Inwest Sp.z o.o., 10) the period of employment at WSK Tomaszow Lubelski Sp.zo.o., 11) the period of employment at “Swid-Bud”” Sp. z o.o. and 13) the period of employment at Pracownicza Fundacja Socjalna [Employee Social Foundation] at Świdnik.

§5

In the event of a justified termination of an employment contract by an Employee during the Employment Guarantee Period pursuant to Article 55 of the Labour Code, the Employee will be entitled to compensation upon terms and conditions and in the amount set out in §2 of this annex.