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Labor Unions

At year end 2011, there were a total of 29 separate basic labor organizations at ČEZ, and approximately 2,000 employees, or 34% of the company’s total work force, were unionized. At the integrated subsidiaries of CEZ Group in the Czech Republic, a total of 44 basic labor organizations operated, and approximately 3,200 employees, or 50% of these companies’ total work force, were unionized. 35 basic labor organizations were members of four regional Associations of Basic Organizations, while another nine basic organizations operated independently in the subsidiaries.

The labor organizations are organized into two labor unions: the ECHO Labor Union and the Czech Union of Power Industry Employees.

During 2010 and 2011, regular meetings were held between the employer and labor representatives, at which the labor organizations received information and topics set forth by the Labor Code and the Collective Agreement were discussed.

At ČEZ and the integrated subsidiaries, the current Collective Agreements expire on December 31, 2014. In the autumn of 2011, collective bargaining took place on amendments to the collective agreements at ČEZ and the integrated subsidiaries, relating primarily to wage growth for 2012. Collective bargaining culminated in December with the signing of Amendment No. 9 to the ČEZ Collective Agreement and Amendment No. 6 to the collective agreements of the integrated subsidiaries.

Fifteen basic labor organizations operate within the Severočeské doly Group. The collective agreements there are entered into for three-year periods and are currently set to expire at the end of 2012.

Labor organizations also operate in CEZ Group companies abroad. At all three Romanian companies, CEZ Distributie, CEZ Romania, and CEZ Vanzare, the current collective agreements are set to expire at the end of 2012. Negotiations with labor organizations in 2011 centered primarily on the gradual unification of all the collective agreements. In the Polish CEZ Group companies, there were a total of four labor organizations in 2011. On January 13, 2011, a new collective agreement was entered into for employees of ELCHO Power Station, effective until December 31, 2013. The collective agreement for employees of Skawina Power Station has no pre-set expiration date. Three labor organizations operate at Varna Power Station in Bulgaria. On December 9, 2011, a new collective agreement was signed, effective from January 1, 2012 for two years. At CEZ Razpredelenie Bulgaria AD there were four labor organizations, while CEZ Bulgaria EAD and CEZ Elektro Bulgaria AD had four and two labor organizations, respectively. From December 12, 2011 a newly signed collective agreement took effect in these companies; it expires on December 31, 2013. At the Albanian distribution company CEZ Shpërndarje there were two labor organizations. On November 26, 2009, a four-year collective agreement was signed at the company.

Through their memberships in the Czech Federation of Power Industry Employers, ČEZ and certain CEZ Group subsidiaries also take part in higher-level collective bargaining concerning the power industry as a whole. The current higher-level collective agreement entered into between the Czech Federation of Power Industry Employers and the various labor unions is binding for a period until December 31, 2012.

The CEZ Group European Works Council is a platform for keeping employee representatives informed, and holding discussions with them, concerning key strategic issues of CEZ Group.

Two meetings of the CEZ Group European Works Council were held in 2010: the first, in May, in Poland and the second, in December, in the Czech Republic. Multinational reports and discussions related primarily to CEZ Group policy and strategy, including strategic mergers and acquisitions, CEZ Group organization and assets, the economic and financial situation, and how CEZ Group companies are affected by the financial crisis. The meetings also touched on the topics of social responsibility and occupational safety and health.

In 2011, 23 members of the CEZ Group European Works Council were elected for its second, four-year term. Of these, fourteen are from the Czech Republic, four from Bulgaria, three from Romania, and two from Poland. Two meetings of the CEZ Group European Works Council were held in 2011. Multinational reports and discussions related primarily to CEZ Group’s policy and strategy, its organization and asset structure, its economic and financial situation, and occupational safety and health.

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