Commencement of the Management Option Programme

Starting from 23rd July 2001 PKN ORLEN’s Board members can purchase series A convertible bonds. It is a part of an incentive management option programme for years 2001-2003 approved by PKN ORLEN’s General Shareholders’ Meeting, dated 15th May 2000

PKN ORLEN S.A. (PKN ORLEN), Central Europe’s largest downstream oil company, announces today that on 23rd July 2001 ORLEN Powiernik Sp. z o. o. (ORLEN Powiernik)- within an incentive management option programme - addressed the Board members of PKN ORLEN with a purchase invitation of series A convertible bonds to be then converted into series D shares of PKN ORLEN.

According to the resolution of PKN ORLEN’s General Shareholders’ Meeting, dated 15th May 2000, PKN ORLEN Board members are entitled to receive 2,200,000 (two million two hundred thousand) series A convertible bonds at the purchase price of PLN 20.30 per bond.

In 2002-2003 PKN ORLEN’s Board members will receive a bond-purchase invitation for further two tranches of 1,650,000 (one million six hundred and fifty thousand) each.
Following the same principle, up to 150 other management personnel of PKN ORLEN (selected by the Management Board and approved by the Supervisory Board) will be entitled to purchase convertible bonds in 2001-2003. Two tranches of 2,337,914 and 1,753,435 and 1,753,435 bonds will be made available.

According to the resolution of PKN ORLEN’s General Shareholders’ Meeting, dated 15th May 2000, ORLEN Powiernik has obtained the whole issue of 11,344,784 (eleven million three hundred forty-four thousand seven hundred and eighty-four) series A convertible bonds.

ORLEN Powiernik is a legal entity exclusively owned by PKN ORLEN, and established solely to fulfil the requirements of the incentive programme. ORLEN Powiernik is a subsidiary of PKN ORLEN S.A., and members of its Management Board and ballot-counting committee are PKN ORLEN’s employees. Neither PKN ORLEN nor ORLEN Powiernik participate in providing loaning of the purchase by the programme participants