Document:

Exhibit 4.5

                         Collective Bargaining Agreement
                                 of CEZ, a. s.,
                            for the years 2004 - 2006

                            Prague, January 29, 2004

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     Collective Bargaining Agreement of CEZ, a. s. for the Years 2004 - 2006

               concluded among the following contracting parties:

CEZ, a. s., (hereinafter the "Employer") represented by:

     Ing. Petr Voboril, Chairman of the Board
     and Ing. Josef Sedlak, Deputy Chairman of the Board

and

the following base union organizations (hereinafter the "Labor Unions"),
represented by the following individuals:

         for ZO OSZJE OOSP EDU                        Jiri Jedlicka
         for ZO OSZJE EDU                             Vladimir Pavlik
         for ZO COSSE ELE                             Petr Stencl
         for ZO COSSE EME                             Jan Sevr
         for ZO COSSE EPC                             Jiri Zelenka
         for ZO COSSE EPR I                           Josef Plisek
         for ZO COSSE EPR II                          Zdenek Zidlicky
         for ZO COSSE ETU I                           Jiri Novotny
         for ZO COSSE ETU II                          Stepan Rodina
         for ZO COSSE ETI                             Josef Mraz
         for ZO OSE EDE                               Lubomir Klosik
         for ZO OSE EHO                               Jiri Sedlak
         for ZO OSE ECH                               Petr Gross
         for ZO OSE EPO                               Ludek Prokop
         for ZO OSE EPO - TDK                         Antonin Behr
         for ZO OSE ETE                               Frantisek Haman
         for ZO OSE EVD                               Martin Kopecky
         for ZO OSE EVD el. Dalesice                  Miroslav Jilek
         for ZO OSE EVD el. Lipno                     Jiri Lavicka
         for ZO OSE EVD el. Orlik                     Ladislav Vrtal
         for ZO OSE EVD el. Dl. Strane                Radek Mucha
         for ZO OSE HS                                Ivan Janda

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 Collective Agreement of CEZ, a. s., for the years 2004 - 2006

                             INTRODUCTORY PROVISIONS

                                    Section 1
                     Subject of Company Collective Agreement

1.1.   This collective agreement regulates, in accordance with Act No. 2/1991
       Coll., On Collective Bargaining, individual and collective relationships
       between the Employer and employees and the rights and obligations of the
       contracting parties.

                                    Section 2
                Binding Nature of Collective Bargaining Agreement

2.1.      This collective bargaining agreement is binding for both contracting
          parties and their legal representatives and for all employees of the
          Employer. In provisions where it is explicitly stated, this agreement
          also applies to retirees - former employees of the Employer who left
          to enter into disability retirement, old-age retirement or early
          retirement pursuant to Act No.155/1995 Coll., On Pension Insurance
          (hereinafter "Retirees") and the family members of employees.

                                    Section 3
                                Joint Obligations

The contracting parties undertake to:

3.1.      Develop correct relations and mutually respect the position and powers
          of the other contracting party with the aim of ensuring social peace
          at the Employer's.

3.2.      Mutually inform each other regarding the preparation of fundamental
          measures and plans that affect the interests of the other party to
          this contractual relationship.

3.3.      Address contentious matters arising from mutual relationships through
          negotiations between the contracting parties.

3.4.      Evaluate the obligations ensuing from this collective bargaining
          agreement following the end of the mid-year period of the applicable
          calendar year at a joint meeting of the members of the negotiation
          teams.

                                    Section 4
          Regulation of Relationships Between Employer and Labor Unions

A.        The Employer undertakes to

4.1.      Respect the right of employees to freely associate in unions and not
          place impediments in the way of Labor Union activities conducted in
          accordance with legal regulations and this collective bargaining
          agreement.

4.2.      Provide Labor Unions with rooms, containing the necessary equipment,
          for their necessary operating activities, including maintenance of the
          provided equipment and ensuring operation. The foregoing is being
          provided on the basis of an agreement on the use of premises and
          equipment, for a contractual price of CZK 10 per month.

4.3.      Ensure the installation, maintenance and functioning of any required
          telephone lines (including the payment of local and inter-city calling
          charges), operation of a VF telephone and e-mail, if it is technically
          possible to provide them, at the Employer's expense.

4.4.      Create for Labor Unions the technical conditions necessary for
          informing employees of their activities.

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4.5.      Ensure the deduction of membership dues for union members in
          accordance with the agreement on deductions from wages concluded
          between the Employer and employees, and to transfer such deductions to
          the account of the applicable Labor Union to which the employee
          belongs.

4.6.      Enable members of the applicable Labor Union bodies to perform at the
          Employer's premises under the authority of such Labor Union bodies
          inspections of compliance with labor law regulations, internal wage
          regulations, safety regulations, regulations on health protection
          during work activities and employment regulations, as well as
          inspections in the area of plant catering and obligations ensuing from
          this collective bargaining agreement and higher-level collective
          bargaining agreements.

          4.6.1     Enable members and authorized employees of applicable
                    higher-level Labor Union bodies to have entry to the
                    Employer's premises for the reasons set forth in Clause 4.6.
                    and create for volunteer Labor Union work safety inspectors
                    the conditions necessary for the performance of their
                    activities.

          4.6.2     For the performance of the inspections pursuant to Clause
                    4.6., to provide personal information that is subject to the
                    protection of personhood pursuant to Act No. 101/2000 Coll.
                    On the Protection of Personal Data and Amendments to Certain
                    Laws only with the prior consent of the employee.

4.7.      Create for Labor Union bodies for the performance of the activities of
          employees' representatives, at its expense, the conditions necessary
          for the proper performance of their activities and to pay them their
          costs for the required materials. To that end, the Employer undertakes
          to set aside in its budget in each year of the validity of this
          agreement the amount of CZK 2 million, which amount will be divided
          among individual localities in the form of limits (see Annex No. 2 to
          this collective bargaining agreement). The assigned funds will be used
          primarily for covering the following expenditures:

          a)        demonstrated travel costs pursuant to Act No. 119/1992
                    Coll., On Travel Cost Reimbursements, as amended,

          b)        training and seminars for members of the applicable Labor
                    Union body, including purchases of professional literature
                    and other printed matter,

          c)        coverage of the cost of expert opinions and consulting
                    activities.

4.8.      Reimburse the applicable Labor Union body for costs following the
          presentation of individual payment documents to the applicable
          personnel department, within 15 days after the end of the calendar
          quarter.

4.9.      Enable the authorized representative of the applicable Labor Union to
          discuss at a meeting of the management of the organizational unit such
          matters as the Labor Union is interested in.

4.10.     Enable the authorized representatives of the applicable Labor Unions
          (or Labor Union) active at the Employer's premises to discuss at the
          management level of the Conventional Power Division or Nuclear Power
          Division, at a meeting of the management of CEZ, a. s., or, as the
          case may be, at the company's board of directors, such matters as the
          Labor Unions are interested in, in accordance with the rules of
          procedure, which the Employer shall enable the applicable Labor Union
          bodies to familiarize themselves with.

4.11.     Enable Labor Union representatives to participate in committees
          preparing organizational changes and selection committees established
          in connection with such changes.

B.        Labor Union bodies undertake to

4.12.     Protect the Employer's interests and reputation at the workplace and
          in public, to respect the Employer's operating requirements during
          their activities, to refrain from any conduct that would be in
          conflict with the Employer's commercial and entrepreneurial interests,
          while respecting the justified interests of the Labor Unions.

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4.13.     Expend in an economical manner the funds set aside for their
          activities pursuant to Clause 4.7. herein.

4.14.     Enable the Employer's representatives to discuss during meetings of
          the committee of a base Labor Union such matters as the Employer is
          interested in.

4.15.     To inform employees at all workplaces in a suitable manner of the
          activities of employees' representatives, and on the content and
          conclusions in respect of information and discussions with the
          Employer.

4.16.     Members of the applicable union body have an obligation to maintain in
          secrecy any facts of which they learn during the performance of the
          duties associated with their post if a breach of the obligation to
          maintain secrecy could cause secret facts to be revealed or a breach
          of the justified interests of the Employer or its employees. Such
          obligation shall remain in effect for a period of one year after the
          termination of their post, unless a law stipulates otherwise.

                                    Section 5
              Releasing Employees to Perform Duties in Labor Unions

5.1.      Upon the request of the applicable Labor Union body, the Employer
          shall provide to employees for the performance of Labor Union duties
          and for the activities of an employees' representative or for
          participation at Labor Union meetings, conferences, congresses,
          training or for participation in certain necessary administrative and
          technical work:

          a)   a short-term work leave, in accordance with the specific case
               involved, for an essential, necessary period of time, with
               compensation of wages in the amount of the employee's average
               wage as determined in accordance with labor laws, without
               requiring the refundation of such compensation of wages,

          b)   a long-term work leave for the entire work period or part
               thereof, for the period of the entire term in office or part
               thereof, on the basis of a resolution of the membership meeting
               or conference of the base Labor Union, under the conditions
               stipulated in Sections 3 and 4 of Decree No. 172/1973 Coll. A
               list of employees who have been released long-term for the
               performance of the duties associated with their post, and any
               exemptions pursuant to Section 3 (2) (c) of the cited decree
               permitted by the applicable Labor Union association shall be
               submitted by the Labor Union to the director of the personnel
               department of the Prague Head Office within one month after this
               agreement enters into effect, and additionally whenever a union
               functionary who has been released on a long-term basis is
               changed.

5.2.      The Employer shall provide to members of a Labor Union body for the
          performance of their activities as employees' representatives a work
          leave of an essential necessary extent, with compensation of wages in
          the amount of the average wage. In the case of employees who have been
          released long-term for activities in a Labor Union, the determination
          of the average wage is based on their work classification prior to
          their release for the performance of duties in the Labor Union. An
          essential necessary extent for the period for the performance of the
          activities of an employees' representative shall be:

          -    in the case of released chairpersons of Labor Unions, 75 % of the
               total release period,

          -    in the case of other released functionaries, at least 40 % of the
               total release period, unless otherwise decided at the locality.

5.3.      For employees released for full-time or part-time activities at a
          Labor Union active on the Employer's premises the Employer shall
          ensure the payment of the remuneration stipulated by the Labor Union
          and remittances of social security and health insurance payments
          within the payment deadlines stipulated in the collective bargaining
          agreement, including an accounting with regard to income tax if the
          employees request such accounting. For the period when they are not
          performing the activities of employees' representatives, such released
          employees shall be provided with a pro-rated portion of the
          remuneration approved by the Labor Union. The remuneration shall be
          refunded to the employee

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          monthly from the account of the applicable Labor Union. The Employer
          shall not demand from Labor Unions the refundation of insurance
          payments in respect of social security and health insurance.

5.4.      Employees released for full-time activities at a Labor Union remain in
          an employment relationship with the Employer. Upon the termination of
          the performance of Labor Union duties, the Employer shall assign the
          released employee (within the meaning of Section 147 of the Labor
          Code) back to the original work and the original workplace. If this is
          not possible because the work no longer exists or the workplace has
          been closed down, the Employer must assign the employee to other work
          corresponding to the employee's employment contract.

                                    Section 6
                               Right to Co-Decide

The right to co-decide is understood to mean the relationship between the
Employer and the applicable Labor Union body pursuant to which the performance
of certain legal actions or the adoption of other measures by the Employer
requires the prior consent of the Labor Union body or an agreement with such
body.

6.1.      The applicable Labor Union body co-decides with the Employer in the
          following cases:

          a)   issuance of and changes to work rules (Section 82 (3) of the
               Labor Code),

          b)   determination of a holidays schedule in an organizational unit
               (Section 108 (1) of the Labor Code),

          c)   determination of the drawing of holidays by employees in cases
               where the notice period for taking a holiday is less than 14 days
               prior to the first day of the holiday (Section 108 (1) of the
               Labor Code),

          d)   giving of notice or during an immediate termination of an
               employment relationship with a member of a Labor Union body who
               is authorized to co-decide with the Employer (Section 59 (2) of
               the Labor Code); an applicable Labor Union body that is deemed to
               have the right to co-decide is the body specified in Section 272
               (4) of the Labor Code,

          e)   excusing a curtailment of a holiday due to an unexcused absence
               (Section 11 (2), Government Directive No. 108/1994 Coll.),

          f)   stipulation of a mass drawing of holidays in cases where it is
               necessary due operating reasons, up to a maximum length of two
               weeks (Section 12 of Government Directive No. 108/1994 Coll.),

          g)   decision on whether a particular case constitutes missing work
               without an excuse (Section 40 (5) of Government Directive No.
               108/1994 Coll.),

          h)   organizing reviews of work safety and human safety on all
               workplaces and facilities of the Employer pursuant to Section
               136a (4) of the Labor Code,

          i)   conclusion of agreements pursuant to Section 130 (2) of the Labor
               Code in which are specified serious operating reasons, amounts of
               compensation for wages and time periods for which the Employer
               cannot assign work to employees,

          j)   organizing elections of the supervisory board members that are to
               be elected by employees.

                                    Section 7
                              Right of Negotiation

Negotiation is understood to mean negotiations between the Employer and
employees, or negotiations between the Employer and the applicable Labor Union
bodies, conducted for the purpose of reaching an agreement.

7.1.      In addition to the cases set forth in labor law regulations, the
          Employer shall negotiate with the applicable Labor Union body, in
          particular, the following:

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          a)   the economic situation of the Employer, including a prediction of
               full-year results, by the end of August and November of the
               applicable calendar year,

          b)   setting standards for work pursuant to a special law,

          c)   changes in the organization of work,

          d)   system for the evaluation of remuneration for employees,

          e)   system for the training and education of employees,

          f)   measures for the creation of conditions for the employment of
               individuals, particularly youth, persons caring for a child
               younger than 15 years and persons whose ability to perform work
               has changed, including material matters relating to care for
               employees, measures for improving work hygiene and hygiene in the
               work environment, organizing social, cultural and physical
               fitness services,

          g)   reasons and consequences ensuing from Section 250 of the Labor
               Code, 3 months prior to a decision of the general meeting,

          h)   election rules for the election of employee representatives to
               the supervisory board,

          i)   other measures relating to a larger number of employees,

          j)   measures set forth in Section 18 (3) of the Labor Code,

          k)   issuance of rules for safety and health protection during work,

          l)   a claim for compensation for damages in excess of CZK 1000 that
               the Employer requires to be paid by an employee (in accordance
               with Section 185 (4) of the Labor Code).

7.2.      Measures relating to a larger number of employees that the Employer is
          supposed to negotiate in advance with the applicable Labor Union body
          are deemed to be those measures that relate to at least 9 employees of
          the Conventional Power Division, the Nuclear Power Division or the
          Prague Head Office, or 9 employees with the same location for the
          performance of work or all employees of the lowest organizational
          unit.

7.3.      For the purposes of modifications to the List of Characteristic
          Activities (additions or changes), a special permanent committee shall
          be established from employees' representatives with which the Employer
          shall negotiate all proposed changes in order to reach an agreement.
          Proposals for changes or modifications to the List of Characteristic
          Activities may be submitted by both contracting parties.

                                    Section 8
                              Right to Information

Informing constitutes cooperation whereunder the Employer and the applicable
Labor Union body mutually exchange information in person or in writing. In the
event that one of the parties requests that information be supplemented or
explained, the other party has an obligation to accommodate such request.

8.1.      The Employer shall inform the applicable Labor Union body regarding,
          in particular, the measures described in Section 18 (2) of the Labor
          Code and shall concurrently give such body information, in accordance
          with the organizational structure, as follows:

          a)   once a month on any stipulated work relations at the Conventional
               Power Division, Nuclear Power Division and Prague Head Office,

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          b)   once a month on all terminations of employment at the
               Conventional Power Division, Nuclear Power Division and Prague
               Head Office

          c)   at mid-year, a report on the operating results of CEZ, a. s. in
               the elapsed period,

          d)   once quarterly on the volume of funds paid out for the individual
               components of wages and on the development of wages at CEZ, a. s.
               as a whole, broken down by Conventional Power Division, Nuclear
               Power Division and Prague Head Office and by groups of employees
               receiving a contractual wage and groups of employees receiving a
               tariff wage. The foregoing material shall be handed over to the
               employees' representatives authorized to negotiate this
               collective bargaining agreement, as a rule by the end of the
               second month after the end of the applicable period,

          e)   on staffing the posts of management employees at the Conventional
               Power Division, Nuclear Power Division and Prague Head Office,
               from department heads up,

          f)   on any organizational changes or rationalization measures being
               prepared due to which employees will be laid off at the
               Conventional Power Division, Nuclear Power Division and Prague
               Head Office, as a rule one month prior to the issuance of the
               guiding document regarding such organizational change. In the
               case of other organizational changes, as a rule one month prior
               to the date on which they enter into force,

          g)   on the transfer of tasks, activities or parts thereof within the
               meaning of Section 249 of the Labor Code, as a rule two months
               prior to their implementation,

          h)   information required for collective bargaining and evaluations of
               compliance with the collective bargaining agreement,

          i)   on the distribution of wages among the Conventional Power
               Division, Nuclear Power Division and Prague Head Office in
               relation to the planned recalculated number of employees, by the
               end of February of the applicable calendar year,

          j)   on employees, broken down by place of work, and the Employer
               shall present to the Labor Union body a list of names of the
               employees, broken down by the Conventional Power Division,
               Nuclear Power Division and Prague Head Office, which are in an
               employment relationship with the Employer as at January 1 and
               July 1 of the applicable calendar year,

          k)   on any sale of the company's housing stock.

8.2.      Labor Union bodies:

          a)   shall inform the Director of the Personnel Section bi-annually
               regarding the number of the membership base, broken down into
               employees, Retirees and other members of the Labor Union,

          b)   shall present to the Director of the Personnel Section once
               annually a list of the names of the members of the Labor Union
               bodies who are entitled to co-decide together with the Employer
               and shall provide information regarding any changes thereto in
               the course of the year.

8.3.      Work Meetings

          Management employees of all levels of management shall inform
          employees regarding matters taking place at the Employer's, primarily
          by means of work meetings.

8.4.      Employer's Meetings

          In cases where this is justified, the Employer shall invite the
          authorized representatives of Labor Union bodies to attend meetings of
          the Employer's management bodies.

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                                 LABOR LAW AREA

                                    Section 9
         Origination, Change and Termination of Employment Relationship

9.1.      The origination, change and termination of an employment relationship
          is governed by the provisions of Section 27 through Section 71 of the
          Labor Code and by this Collective Bargaining Agreement.

9.2.      Measures for mitigating the impact on employees laid off by the
          Employer for organizational reasons are set forth in Annex No. 7
          hereto.

                                   Section 10
                                   Work Period

10.1.     The Employer's work period is 37.5 hours weekly (after deduction of
          work breaks) with the exception of the cases described in Clauses
          10.2. and 10.3.

10.2.     In the case of employees working in continuous-operation facilities
          and employees performing work in two-shift facilities operating on all
          calendar days of the year, a weekly work period of 36.5 hours applies
          (after deduction of work breaks). This provision does not apply to the
          employees of nuclear power plants performing work that cannot be
          interrupted.

10.3.     In the case of employees working at nuclear power plants and
          performing work that cannot be interrupted, a work period of 36 hours
          applies.

10.4.     In the case of employees working at continuous-operation facilities
          and employees performing work in two-shift facilities operating on all
          calendar days of the year, an unevenly distributed work period
          applies. The specific distribution of the work period shall be
          stipulated for employees by a shift schedule so that the average
          weekly work period does not exceed the limit stipulated for the weekly
          work period in the course of the entire calendar year. Employees shall
          be informed regarding the written shift schedule negotiated with the
          applicable Labor Union body at least two weeks prior to the start of
          the period in respect of which the work period has been distributed in
          an uneven manner, unless the Employer and employee agree otherwise.
          Throughout the term of the Collective Bargaining Agreement, shift
          schedules shall be identical to the schedules in effect during 2003.
          If any changes are required to be made, new schedules shall be issued
          upon agreement with the applicable Labor Union body active in the
          locality involved.

10.5.     In the interest of a better use of the work period and the
          satisfaction of the personal requirements of employees, flexible work
          periods are used at certain workplaces or for certain employees.
          Specific conditions for the application of flexible work periods shall
          be stipulated in the Work Rules.

10.6.     After no more than 4.5 hours of continuous work, the Employer shall
          provide an employee with a work break of 30 minutes for a meal and
          rest. Such provided breaks for a meal and a rest are not counted as
          part of the work period.

10.7.     In cases involving work that cannot be interrupted, employees must be
          provided with a reasonable period for rest and a meal even if
          operation is not interrupted. Such period is not deemed a work break,
          it is deemed to constitute the performance of work.

10.8.     A period of up to 15 minutes for washing up is counted as part of the
          work period of employees working in facilities or administration and
          employees for which the nature of the assigned work requires it.

10.9.     In the Employer's internal regulations (the Conventional Power
          Division, the Nuclear Power Division and the Prague Head Office)
          negotiated with the applicable Labor Union bodies is stipulated the
          distribution of the work period and other measures.

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                                   Section 11
                         Overtime Work and Standby Duty

11.1.     The Employer may order overtime work only in exceptional cases, if
          serious operating reasons are involved. Overtime work than an employee
          is ordered to perform shall not exceed eight hours in an individual
          week and shall not exceed 150 hours in a calendar year.

11.2.     A single employee caring for a child up to 12 years of age on a
          long-term basis can be assigned overtime work only with such
          employee's consent.

11.3.     Work over and above the framework described in Clause 11.1. may be
          performed only in exceptional cases, if the employee grants consent to
          such work.

11.4.     Overtime work which immediately follows a night shift may be ordered
          by the Employer only in entirely exceptional cases, in a maximum scope
          of four hours.

11.5.     The total scope of ordered and agreed overtime work cannot exceed an
          average of 8 hours a week in the course of a calendar year. Employees
          that perform work at high-risk workplaces cannot exceed a total of 150
          hours of overtime work in a calendar year.

                                   Section 12
                                    Holidays

12.1.     The holiday for each calendar year for all employees shall be extended
          by one week over the base length stipulated in Section 102 (1) of the
          Labor Code and shall amount to 5 weeks.

12.2.     Employees whose work period is unevenly distributed into individual
          weeks or for the period of the entire calendar year (Section 85 of the
          Labor Code) are entitled to the number of days of holidays accruing to
          them on the basis of the annual average.

12.3.     The employees described in Section 105 (2) (b) and (c) are entitled to
          a supplementary holiday of one week. If an employee works only part of
          the calendar year under the foregoing conditions, then for each 22
          days so worked such employee is entitled to one-twelfth of the
          supplementary holiday.

12.4.     In the event that a holiday is curtailed pursuant to Section 11 of
          Government Decree No. 108/1994 Coll., an employee whose employment
          relationship lasted the entire calendar year shall be provided with a
          holiday of at least two weeks.

                                   Section 13
                      Impediments to Work on the Side of an
                  Employee During which Work Leave is Provided

13.1.     An employee's entitlement to a work leave with compensation of wages
          in the amount of the employee's average wage, provided the conditions
          stipulated in labor law regulations are met, are determined in the
          below-described cases as follows:

          13.1.1.   In the event of the death of a member of an employee's
                    family:

                    -    four business days in the event of the death of a
                    spouse, companion, own child or child living in a common
                    household, and an additional day for attending the funeral
                    of such persons,

                    -    two business days in the event of the death of an
                    employee's parents or siblings, or the parents or siblings
                    of the employee's spouse, daughter-in-law or son-in-law, and
                    an additional day for attending the funeral of such persons,
                    plus another additional day if the employee is arranging the
                    funeral of such persons,

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                    -    one day in the event of the death of an employee's
                    grandparent or grandson or a grandparent or grandson of the
                    employee's spouse or another person that did not belong
                    among the foregoing relatives but lived at the time of death
                    in a common household with the employee, and an additional
                    day for attending the funeral of such persons.

          13.1.2.   Three business days in a calendar year for all single
                    employees (pursuant to Section 274 (1) of the Labor Code)
                    looking after one or more children up to the age of 15
                    years, as a rule after having drawn the due holiday and upon
                    agreement with the Employer, provided that such employee's
                    employment relationship with the Employer lasted or is
                    supposed to last at least three months in a calendar year.
                    Such work leave is not provided to employees in a part-time
                    employment relationship.

          13.1.3.   For a period that is essential and necessary for the
                    examination or treatment of an employee in a medical
                    facility under the conditions stipulated in Clause 1 (a) and
                    (b) of the annex to Government Decree No. 108/1994 Coll.

          13.1.4.   For a period that is essential and necessary, but no more
                    than one day, for accompanying an employee's family member
                    to a medical facility for examination or treatment under the
                    conditions stipulated in Clause 3 (a) of the annex to
                    Government Decree No. 108/1994 Coll.

          13.1.5.   For a period that is essential and necessary, but no more
                    than twelve business days in a calendar year, when
                    accompanying a handicapped child to a social care facility
                    or to a live-in remedial school (also applies to the night
                    shift on the date prior to the day on which the child will
                    be accompanied).

          13.1.6.   For a period that is essential and necessary, but no more
                    than three business days in the course of four calendar
                    weeks of a notice period, to seek new employment in the
                    event of the dissolution of the employment relationship due
                    to organizational changes.

          13.1.7.   Two days, if an employee is moving to a different
                    municipality, and one day if the employee is moving within
                    the municipality, in the Employer's interest, and if the
                    employee has their own furnishings (within the meaning of
                    Clause 6 of the Annex to Government Decree No. 108/1994
                    Coll.).

          13.1.8.   A work leave of an essential and necessary scope for
                    employees ensuring recreation for children and youth under
                    the conditions stipulated in Federal Ministry of Labor and
                    Social Affairs Decree No. 18/1991 Coll., On Other Tasks in
                    the Public Interest.

          13.1.9.   Two days for an employee's own wedding, of which one day for
                    attending the wedding ceremony.

          13.1.10.  Two days in the event of the birth of child to an employee's
                    wife or companion.

          13.1.11.  One day for participation at the wedding ceremony of an
                    employee's child.

          13.1.12.  For an essential and necessary period in the event of
                    attendance of the funeral of a co-worker.

          13.1.13.  For activities set forth in Federal Ministry of Labor and
                    Social Affairs Decree No. 18/1991 Coll., On Other Tasks in
                    the Public Interest, and under the conditions specified
                    therein.

          13.1.14.  For an essential and necessary period in the event of a
                    natural disaster caused by extraordinary weather impacts due
                    to which an employee had to personally bear restrictions
                    (for example, evacuation, restrictions on staying in an area
                    and situations where movement is restricted to specified
                    places or territories etc..) ensuing from crisis

                                       11
<PAGE>

                    measures stipulated during a crisis situation announced
                    pursuant to Act No. 240/2000 Coll., On Crisis Management and
                    on Amendments to Certain Laws.

          13.1.15.  For an essential and necessary period when an employee
                    provided personal assistance, under the conditions
                    stipulated in Act No. 239/2000 Coll. and Act No. 240/2000
                    Coll., during preparation for an extraordinary event, during
                    rescue and clean-up work and during protection of the
                    population at a time when a crisis situation was announced.

          13.1.16.  For an essential and necessary period, but no more than five
                    business days, a work leave with compensation for wages in
                    the amount of 80 % of an employee's average wage, in the
                    event that the employee was cleaning up damage caused by a
                    natural disaster in the apartment or house where the
                    employee was permanently residing, unless the contracting
                    parties agree otherwise. In the event that the apartment or
                    house was completely destroyed, the employee shall be
                    provided with compensation for wages in the amount of his or
                    her average wage.

          13.1.17.  For a period that is essential and necessary for an employee
                    to attend re-qualification training ensured by the Employer
                    pursuant to Clause 19.4. herein prior to the termination of
                    the employment relationship for organizational reasons.

13.2.     The Employer shall provide a work leave without compensation for wages
          in the following cases:

          13.2.1.   One day for attending the wedding of an employer's parent.

          13.2.2.   For an essential and necessary period, up to one day, during
                    a move within the same municipality, and up to two days if
                    moving to a different municipality, if the employee has his
                    or her own furnishings.

          13.2.3.   For an essential and necessary period in the event of an
                    unforeseen interruption in traffic or tardiness in the case
                    of public transit.

          13.2.4.   For an essential and necessary period, up to one half-day in
                    a week, for searching for new employment prior to the
                    termination of the employment relationship, for a period
                    corresponding to the notice period, with the exception of
                    cases where employment was terminated for organizational
                    reasons. With the Employer's consent, work leave can be
                    merged.

          13.2.5.   For activities set forth in Federal Ministry of Labor and
                    Social Affairs Decree No. 18/1991 Coll., On Other Tasks in
                    the Public Interest, and under the conditions specified
                    therein.

13.3.     In cases where it is justified, the Employer may provide an employee
          with additional work leave, without compensation for wages, over and
          above the scope stipulated in Clauses 13.2.1. through 13.2.5., in the
          event that there are no operational impediments thereto on the
          Employer's side and provided that at the time the request for such
          work leave is submitted the employee has drawn his or her holiday for
          the calendar year.

13.4.     In the event of public transit interruptions due to extensive and
          extraordinary weather impacts, the Employer shall provide an employee
          with work leave for an essential and necessary period, with
          compensation for wages in the amount of such employee's lost wages, up
          to the amount of the employee's average wages.

13.5.     During military training the Employer shall provide an employee with
          compensation for wages in the amount of such employee's average wage
          determined in accordance with labor law regulations. In the event an
          employee performs civilian services in lieu of military training, such
          employee shall be entitled to compensation for wages in the amount
          stipulated by the applicable legal regulation (Section 20 of
          Government Decree No. 108/1994 Coll.).

                                       12
<PAGE>

                                   Section 14
     Compensation for Damages during Work Injuries and Work-Caused Illnesses

14.1.     To an employee who sustained a work injury or who was determined to
          have a work-related illness due to which such employee will be unable
          to perform work for an extended period of time (at least two months)
          the Employer shall pay a billable deposit for compensation for damages
          which the Employer is obligated to provide, up to the amount of the
          average wage. A preconditions for the provision of such compensation
          is the conclusion of an agreement on payroll deductions between the
          employee and the Employer to cover cases where the deposit paid out
          exceeds the compensation for damages determined after the
          investigation of the work-related injury is completed.

14.2.     A one time indemnification for the survivors of an employee who died
          as a result of a work-related injury or work-related illness (Section
          200 of the Labor Code) is payable to:

          o    a spouse, in the amount of CZK 100 000,

          o    a child entitled to an orphan's pension, in the amount of CZK 155
               000,

          o    parents of the deceased, in justified cases, in the amount of CZK
               80 000.

                                   Section 15
            Work Conditions; Safety and Health Protection During Work

15.1.     The rights of the Employer, the rights and obligations of employees
          and the involvement of Labor Union bodies in the area of safety and
          health protection during work are regulated by, in particular, Section
          132 through Section 136a of the Labor Code and by other legal
          regulations and internal regulations relating to this issue.

15.2.     The Employer undertakes to create the necessary conditions so that
          employees are able to perform their work in a safe manner that does
          not endanger their health and in an appropriate work environment. The
          Employer concurrently undertakes to search for risks, determine the
          causes thereof and adopt measures for their removal.

15.3.     The Employer undertakes to, in particular, :

          a)   perform all measures to ensure safety and health protection
               during work in cooperation with the Labor Union,

          b)   investigate the causes and circumstances of the occurrence of a
               work injury with the participation of the employee, if the
               employee's health so allows, and with the participation of the
               applicable Labor Union body,

          c)   inform the applicable Labor Union body without delay of any
               operating accidents (breakdowns) and work injuries, as well as of
               any deficiencies in work safety discovered by the Employer or
               notified to the Employer by the applicable state authorities,

          d)   organize at least once annually, upon agreement with the
               applicable Labor Union body, reviews of safety and health
               protection during work and cure any discovered deficiencies,

          e)   measure the hygienic specifications of the work environment when
               requested to do so by employees or in the event that significant
               changes occurred in such environment, and, in accordance with the
               results, adopt technical or, as the case may be, organizational
               measures, depending on the degree of work risk determined,

          f)   evaluate high-risk workplaces once annually, notify the results
               of the evaluation to the applicable Labor Union body and inform
               employees of the results of the inspection,

                                       13
<PAGE>

          g)   at least once annually, present to employees who are exposed to
               harmful effects (e.g. vibrations, noise, carcinogenic substances,
               chemical substances, ionizing irradiation etc.) well-rounded
               instructions regarding the dangers ensuing therefrom and
               instructions on measures that need to be taken for the protection
               of such employees.

15.4.     The Employer shall provide personal protective aids to employees whose
          work requires them and shall ensure the free-of-charge cleaning and
          repair of such protective aids. The Employer shall also provide
          employees with washing, cleaning and disinfecting products and, on
          workplaces with an unsuitable micro-climate, protective beverages. All
          of the foregoing shall be provided by the Employer free-of-charge in
          accordance with a list prepared by the Employer on the basis of an
          evaluation of the risks and specific work conditions in the scope and
          under the conditions stipulated in a government decree.

15.5.     On those of the Employer's workplaces where it is stipulated by
          special laws, and on workplaces where at least one non-smoker is
          employed, a prohibition of smoking shall apply. A prohibition of
          smoking also applies to all meetings, advisory sessions and
          negotiations held in enclosed premises. The Employer may stipulate a
          prohibition of smoking on all premises in a particular locality.

                                   Section 16
                             Complaints and Comments

16.1.     Complaints and comments may be submitted by work groups and employees
          via Labor Union bodies and management employees. Management employees
          have an obligation to respond to complaints and comments without undue
          delay. An employee shall receive a written response to a written
          complaint within a time limit of thirty days.

16.2.     The Employer has an obligation to discuss with an employee, or with
          the applicable Labor Union body at the employee's request, a complaint
          from the employee regarding the exercise of rights and obligations
          ensuing from labor law relations.

                                       14
<PAGE>

                                   SOCIAL AREA

                                   Section 17
                                   Social Fund

17.1.     Provision of financial resources from the Social Fund

          17.1.1.   For each calendar year of the term of this Collective
                    Bargaining Agreement, the Employer shall set aside for use
                    from the Social Fund the amount of CZK 75 000 000.

          17.1.2.   Financial resources from the Social Fund may be used for the
                    following purposes:

                    a)   meals for employees and former employees - Retirees,

                    b)   contribution for recreation and recuperation (through
                         the use of personal accounts),

                    c)   social assistance for overcoming an employee's
                         difficult situation and for social assistance to an
                         employee's survivors,

                    d)   activities of clubs of Retirees' - former employees,

                    e)   contributions to blood donors,

                    f)   housing for employees.

17.2.     Designation of Fund

          17.2.1.   The financial resources in the fund may be used for
                    employees who are in a full-time employment relationship
                    with the Employer, including employees not listed as
                    employees. In cases where this Collective Bargaining
                    Agreement so stipulates, such financial resources may also
                    be used for their family members and Retirees - former
                    employees.

          17.2.2.   For the purposes of such fund, a family member is understood
                    to mean a spouse or companion. Also the employee's own
                    children and any children living with the employee on a
                    long-term basis in a common household, until the end of the
                    calendar year following the end of mandatory school
                    attendance and thereafter after the attainment of 26 years
                    if such person is consistently preparing for a future
                    vocation through studies. For the purposes of such fund,
                    children are also understood to include those persons who
                    are unable to prepare for a future vocation or who cannot be
                    employed due to illness, physical, sensory or mental
                    handicaps and are not older than 26 years.

          17.2.3.   A Retiree for the purposes of this fund is understood to
                    mean a former employee who ended an employment relationship
                    with the employer and entered an invalidity retirement,
                    old-age retirement or early old-age retirement in accordance
                    with Act No. 155/1995 Coll., On Pension Insurance. A Retiree
                    is additionally understood to also mean an employee who was
                    already a pensioner when he or she joined the Employer,
                    worked for the Employer for a minimum of 5 years and
                    thereafter ended his or her employment relationship with the
                    Employer.

          17.2.4.   Employees working for the Employer under a full-time
                    employment relationship are not able to draw financial
                    resources from the Social Fund (with the exception of

                                       15
<PAGE>

                    the Employer's contributions towards meals and
                    accommodation) until their trial period has ended.

                                       16
<PAGE>

17.3.     Employees' personal accounts

          17.3.1    Within the framework of the Social Fund, the Employer shall
                    create personal accounts for employees. By means of the
                    personal accounts, the Employer contributes to employees,
                    and in the described case also to their family members, for
                    the following purposes:

                    o    recreational and recuperation stays, including
                         children's' recreation, curative and recuperative stays
                         for employees and their family members,

                    o    life insurance and supplementary pension insurance for
                         employees (only for drawing the balance of the
                         financial resources in the personal account upon the
                         termination of an employment relationship and for the
                         purpose of drawing the balance in the personal account
                         from the preceding year).

          17.3.2.   Contributions into the personal account are uniform for all
                    employees and the amount thereof is based on the budget of
                    the Social Fund. In each year of the term hereof, a
                    contribution into the personal accounts of employees shall
                    be agreed in an amount of at least CZK 7 300.

          17.3.3.   Rules for the creation and use of personal accounts:

                    a)   A personal account is created for employees and
                         financial resources are contributed into the account in
                         the applicable calendar year to those employees who are
                         in a full-time employment relationship with the
                         Employer (including employees not listed as employees).

                    b)   Employees are enabled to draw from the personal account
                         only after the end of their trial period. Financial
                         resources shall be contributed into the account in a
                         prorated amount based on the length of the employment
                         relationship in the applicable calendar year. In the
                         event that an employee draws all of the funds in the
                         personal account and subsequently terminates the
                         employment relationship in the course of the calendar
                         year, the employee is not obligated to return the drawn
                         funds.

                    c)   In the event that an employee works for the Employer on
                         the basis of a work commitment that is shorter than
                         full-time employment, the amount of financial resources
                         in the personal account shall be reduced proportionally
                         in accordance with the length of the work commitment.

                    d)   The lowest one-time amount that may be paid through the
                         use of the personal account is CZK 1 000. An employee
                         may draw from the personal account no more than three
                         times in the course of the applicable calendar year.

                    e)   Drawing from the personal account is accomplished
                         exclusively by bank transfer from the Employer's
                         account.

                    f)   Financial resources in the personal account are not the
                         property of the applicable employee. In the event that
                         the supplier of a service that was paid for from the
                         personal account fails to provide the applicable
                         performance (for example, due to being in liquidation)
                         and fails to return the paid financial resources to the
                         Employer, the employee is not entitled to again draw
                         the funds from the personal account.

                    g)   If it is determined that an employee by his or her
                         conduct caused the financial resources to be used in
                         contravention of the rules for the use of personal
                         accounts stipulated by this Collective Bargaining
                         Agreement, such employee has an obligation to return
                         such funds within a time limit of 30 days from the

                                       17
<PAGE>

                         time when the employee was demonstrably informed of
                         such fact by the employer. In the following year, no
                         financial resources shall be contributed to the
                         personal account for such employee and such employee
                         will not be able to draw any balance in such account.

                    h)   Financial resources contributed into an employee's
                         personal account in a particular calendar year may be
                         drawn no later than December 31 of the following
                         calendar year, it being understood that the balance in
                         the employee's personal account as at December 31 of
                         the current year can be no more than the amount of the
                         financial resources contributed into the employee's
                         personal account during such year.

                    i)   In the event that an employee wishes to draw from the
                         personal account financial resources from the preceding
                         year, in addition to the possibility of transferring
                         such financial resources into life insurance or
                         supplementary pension insurance such employee may also
                         request that such financial resources be paid out
                         together with his or her wages on the same date when
                         wages are to be paid for the month of December of the
                         applicable calendar year.

                    j)   The right to draw from the personal account terminates
                         on the date of the termination of an employee's
                         employment relationship, with the exception of the
                         employee's death, in which case such undrawn financial
                         resources may be used to increase the social assistance
                         or one-time indemnification provided to the employee's
                         survivors under the Collective Bargaining Agreement.

                    k)   Any undrawn funds in the personal account become part
                         of the Employer's Social Fund.

                    l)   Rules for the creation of and drawing from personal
                         accounts are set forth in the guideline document titled
                         "Personal Accounts of Employees".

17.4.     Social Fund Budget

          17.4.1.   The Social Fund Budget is set forth in Annex No. 3A and 3B
                    hereto.

          17.4.2.   Any undrawn financial resources in the Social Funds of
                    individual organizational units from the year 2003 shall be
                    transferred into the Employer's Social Fund Budget for 2004,
                    with the exception of undrawn financial resources in the
                    personal accounts of employees.

                                   Section 18
                          Social Benefits of Employees

18.1.     Meals

          18.1.1.   The Employer's contribution from the Social Fund for one
                    meal actually claimed by an employee during a worked shift
                    is CZK 13, the contribution for an additional meal actually
                    claimed during a shift longer than 10.5 hours is an
                    additional CZK 13. If an employee was unable to work due to
                    impediments on the side of the Employer (Section 130 (1) of
                    the Labor Code), the Employer shall provide the employee
                    with a meal contribution in the same amount for an actually
                    claimed meal.

          18.1.2.   The Employer pays:

                    a)   if the Employer has its own meal facility, all
                         substantive and personnel-related costs for the
                         acquisition of a meal. The provision of meals in the
                         employer's own cafeteria through the use of other
                         entities is also deemed to constitute a company meal
                         facility,

                                       18
<PAGE>

                    b)   in the event that the Employer provides company meals
                         through the use of other entities (for example, in the
                         form of meal vouchers), 55 % of the cost of a meal, but
                         no more than 70 % of the daily allowance during a
                         business trip of 5 - 12 hours (pursuant to Act No.
                         119/1992 Coll., On Reimbursement of Travel Expenses, as
                         amended).

          18.1.3.   If an employee consumes meals in the course of a work shift,
                    the employee pays:

                    a)   in the Employer's own meal facility:

                         the value of the food, less the Employer's contribution
                         from the Social Fund in the amount of CZK13,

                    b)   via other entities in their facilities:

                         the actual price for the meal (meal vouchers), less the
                         payment from the Employer pursuant to Clause 18.1.2 (b)
                         and less the Employer's contribution from the Social
                         Fund in the amount of CZK 13.

          18.1.4.   The Employer shall provide access to meals to Retirees -
                    former employees:

                    a)   in the Employer's own meal facilities, where the
                         Retirees shall pay the value of the food, less the
                         Employer's contribution from the Social Fund in the
                         amount of CZK13 for one claimed meal,

                    b)   via other entities in their facilities, where the
                         Retirees shall pay the actual price of the meal, less
                         the Employer's contribution from the Social Fund in the
                         amount of CZK13 for one claimed meal.

18.2.     Payment of temporary accommodation costs for employees

          The employer shall pay the costs for temporary accommodation for an
          employee in the event that the employee is to be provided with
          temporary accommodation in a facility that has the status of an
          accommodation facility and where the accommodation is in the
          Employer's interest. The payment for accommodation costs provided by
          the Employer in individual cases amounts to 70 % of the actual price
          of the accommodation.

18.3.     Social assistance

          18.3.1.   In extraordinarily serious social cases an employee may be
                    provided with one-time social assistance up to the amount of
                    CZK 50 000.

          18.3.2.   In the event that an employee dies otherwise than as a
                    result of a work injury, the following social assistance
                    shall be provided to the survivors:

                    -    up to CZK 50 000 to the spouse,

                    -    up to CZK 55 000 to a child that is entitled to an
                         orphan's pension,

                    -    in cases where this is justified, up to 25 000 to the
                         parents of the deceased.

          18.3.3.   In the event that due to extraordinary weather impacts an
                    employee sustained large-scale damage in the apartment or
                    house where such employee resided permanently at the time of
                    the natural disaster, the employee may be provided with
                    one-time social assistance up to the amount of CZK 75 000.

                                       19
<PAGE>
18.4.     Donations of blood

The employer shall provide the following financial compensation to employees
donating blood free-of-charge:

     --------------------------------------------------------------------
          Number of blood off-takes       Amount of compensation in CZK
     --------------------------------------------------------------------
                     10                               1 000
                     20                               2 000
                     30                               3 000
                     40                               4 000
                     50                               5 000
                     60                               6 000
                     70                               7 000
                     80                               8 000
                     90                               9 000
                     100                             10 000
     --------------------------------------------------------------------
        each additional 10 off-takes          compensation increases by
                                                    CZK 1 000
     --------------------------------------------------------------------

          For the determination of the amount of compensation, all actually
          effected off-takes are counted. An employee shall exercise its claim
          for compensation following the presentation of a document evidencing
          the off-takes no later than 6 months after receiving such confirmation
          document from the applicable personnel department at the Conventional
          Power Division, Nuclear Power Division or Prague Head Office.

18.5.     Contribution for electricity off-take

          18.5.1.   The Employer shall provide to employees in a full-time
                    employment relationship and to Retirees-former employees a
                    contribution for electricity off-take under the conditions
                    and in the amount set forth in Annex No. 5 hereto.

          18.5.2.   At the written request of the employee, the contribution for
                    electricity off-take may be transferred to the employee's
                    supplementary pension insurance (Annex No. 4) or life
                    insurance (Annex No. 6) if the employee has a valid
                    supplementary pension agreement or life insurance policy.
                    Such change may be made once in a year.

18.6.     Health care

          18.6.1.   The Employer pays for job-commencement health examinations
                    for employees. Health examinations when an employee leaves
                    are paid for by the Employer only if such examination was
                    requested by the Employer.

          18.6.2.   The Employer shall ensure free-of-charge periodical medical
                    examinations for all employees.

          18.6.3.   The Employer shall pay the difference in costs that a health
                    insurer or other insurer will not pay for under the
                    applicable legal regulations with regard to an employee sent
                    on a business trip abroad who becomes ill through no fault
                    of the employee and submits to the necessary health care
                    treatment abroad.

                                       20
<PAGE>

          18.6.4.   Health care shall be ensured under the conditions stipulated
                    in an internal guideline document of the Employer.

18.7.     Loans

          The Employer may provide an employee with an interest-free loan. Rules
          for the provision of loans to employees from the financial resources
          of CEZ, a. s. are stipulated in the guideline document titled
          "Provision of Interest-Free Loans to Employees".

18.8.     Supplementary pension insurance

          18.8.1.   The Employer shall provide to employees in a full-time
                    employment relationship (with the exception of employees not
                    listed as employees - does not apply to employees who have
                    been released long-term for the performance of the duties
                    associated with a Labor Union post), following three
                    continuous months of employment, a contribution for
                    supplementary pension insurance in an amount based on the
                    length of time the employee worked for the Employer, as
                    follows:

                    period of continuous               amount of contribution
                    employment at CEZ, a. s.

                    over 3 months and up to 3 years         CZK 500
                    more than 3 years                       CZK 600

                    Such supplementary pension contribution may be increased
                    pursuant to Clause 18.5.2. by an additional CZK 666,
                    provided that an employee so requests in writing.

          18.8.2.   Rules for the provision of contributions for supplementary
                    pension insurance to employees are stipulated in Annex No. 4
                    hereto and in the guideline document titled "Supplementary
                    Pension Insurance for Employees".

                                   Section 19
                               Ensuring Employment

19.1.     The Employer shall discuss with the applicable Labor Union body once
          every quarter the probable development of employment at the
          Employer's.

19.2.     As far as it is able to do so, the Employer shall implement measures
          leading to:

          a)   the creation of new jobs,

          b)   the retraining of employees so that they can perform jobs vacated
               by employees leaving for old-age retirement or early old-age
               retirement (including the retraining of employees released from
               employment due to organizational changes),

          c)   the ensuring of jobs for citizens whose ability to perform work
               has changed,

          d)   the ensuring of jobs for the graduates of educational
               institutions, including apprentices (including their adaptation
               process - acquiring practice).

19.3.     When making decisions as to which employees are to be laid off due to
          organizational changes, the Employer shall take into account their
          work performance, the possibilities for further professional growth
          and the length of employment at the Employer's. Unless it is
          necessary, the Employer shall not lay off single employees looking
          after children up to 15 years of age, or employees over the age of 50,
          unless they are entitled to an old age pension. If the Labor Union
          body expresses a negative opinion on the lay-off of an employee that
          enjoys greater protection pursuant to the preceding sentence, the
          Employer shall re-evaluate the matter with the participation of a
          representative of the Labor Union body.

                                       21
<PAGE>

19.4.     Retraining

          19.4.1.   In the event that the Employer does not offer new suitable
                    employment to an employee who is being laid off due to
                    organizational reasons, it shall offer to arrange retraining
                    for such employee and shall pay the cost of such retraining.
                    A condition for paying for retraining is that such
                    retraining is ordered in the course of the duration of the
                    employment relationship with the Employer, that such
                    training commences no later than 6 months following the
                    termination of the employment relationship, lasts no more
                    than one year and the amount does not exceed CZK 20
                    thousand. More detailed conditions shall be agreed in the
                    agreement on retraining, which must be concluded with the
                    employee while the employee is still in an employment
                    relationship.

          19.4.2.   In the event that retraining pursuant to Clause 19.4.1 takes
                    place during a period when the employment relationship is
                    still in effect, the Employer shall provide the employee
                    with a work leave for the purpose of participation in such
                    retraining and with compensation for wages in the amount of
                    the employee's average wage. The Employer does not reimburse
                    the employee for travel expenses incurred in connection with
                    participation in retraining.

          19.4.3.   Retraining shall not be provided to Employees who are
                    leaving the Employer to go into old-age retirement or early
                    old-age retirement.

                                       22
<PAGE>

                                      WAGES

                                   Section 20
                                  Minimum Wage

For work performed, employees are entitled to a wage which shall not be lower
than the minimum wage. The minimum wage has been set as the base tariff of the
first tariff grade of this Collective Bargaining Agreement. During the provision
of the minimum wage, the Employer proceeds in accordance with the applicable
legal regulations.

                                   Section 21
                        Volume and Distribution of Wages

21.1.     The Employer undertakes to pay out in each year of the years 2004 -
          2006 a volume of wages that guarantees coverage of inflation and an
          increase in real tariff and contractual wages of at least 3 %. In 2004
          the Employer undertakes to ensure that the average wage of the group
          of employees receiving a tariff wage and the group of employees
          receiving a contractual wage rises by at least 5 % in comparison with
          the average wage at CEZ, a. s. during 2003.

21.2.     If inflation exceeds 3 % for two consecutive months in a calendar
          year, negotiations shall be initiated on an adjustment of wages and on
          maintaining the growth of real wages at 3%.

21.3.     Inflation is expressed by the increase in the annual index of consumer
          prices (the change in percent of the average price level during the
          past 12 months in comparison with the average for the previous 12
          months) computed as at October for the following calendar year.

21.4.     For the purposes of an evaluation of the increase in the average wage
          pursuant to Clause 21.1. the average wage for the previous calendar
          year shall not include such part of wages as constitutes holiday wages
          (holiday pay) or Christmas wages (Christmas pay), or (in the case of
          contractual wages) such part of the annual bonus as is paid on the
          basis of the fulfillment of the indicator (target) for "Corrected
          Gross Profit" by more than 100%.

                                   Section 22
                                Contractual Wage

22.1.     A contractual wage is, as a rule, stipulated for employees whose
          decisions fundamentally affect the operating results of the company,
          managed organizational unit, managed section or other unit. The
          contractual wage incorporates a link to the operating results of the
          Employer, the operating results of the applicable unit and the
          fulfillment of the tasks assigned to the employee.

22.2.     The following sections do not apply to employees that receive a
          contractual wage:

          o    Sections 23, 24 and 25

          o    Clauses 26.5 through 26.8 of Section 26, ,

          o    Clause 27.1 of Section 27, with the exception of employees
               specified in Clause 27.1.8 (b).

22.3.     Principles for the provision of a contractual wage are set forth in a
          corporate guideline document.

22.4.     Specific terms and conditions for the provision of a contractual wage
          are agreed with an employee in a specific agreement.

                                   Section 23
                          Remuneration by a Tariff Wage

23.1.     The Employer applies a system of monthly tariff wages to all
          employees, with the exception of employees remunerated by a
          contractual wage.

                                       23
<PAGE>

23.2.     Employees remunerated by a tariff wage receive the following
          components of wages:

          o    wage tariff

          o    wage tariff range

          o    extra payments

          o    other components of wages

                                   Section 24
                 Classification of Employees into Tariff Grades

24.1.     The Employer uses a unified system of 12 tariff grades with
          intermediate grades. The wage tariffs for 2004 are set forth in Annex
          No. 1 hereto. The wage tariff amounts and extra payments in crowns for
          the year 2005 and 2006 shall be agreed between the contracting parties
          hereto. During the determination of tariffs for 2005 there shall be
          maintained the same ratio of the sum total of the base wage tariffs
          and extra payments to the sum total of the wage tariff ranges and
          extraordinary bonuses and target bonuses as in the fourth quarter of
          2004. During the determination of tariffs for 2006 there shall be
          maintained the same ratio of the sum total of the base wage tariffs
          and extra payments to the sum total of the wage tariff ranges and
          extraordinary bonuses and target bonuses as in 2005.

24.2.     A document that is binding with regard to the classification of
          employees into tariff grades on the basis of the difficulty,
          responsible-nature and demanding-nature of the work performed is the
          List of Characteristic Activities (the "List"), which is issued as a
          separate guideline document of the Employer.

24.3.     Each job is assigned work activities from the List in connection with
          the organizational rules of CEZ, a. s. and the systemization of jobs
          at the Conventional Power Division, Nuclear Power Division and Prague
          Head Office.

24.4.     For each job there is a tariff grade which corresponds to the tariff
          classification of the highest paid characteristic activity assigned to
          the applicable job. Such tariff grade shall be awarded to an employee
          if the employee performs the full scope of such activity. In this,
          consideration activities which are performed on a one-time basis or
          randomly (i.e. infrequently) are not taken into account.

24.5.     In the event that two entirely different characteristic activities
          that have the same tariff grade are cumulatively assigned to a single
          job, the List shall be supplemented by a new activity which shall
          include the foregoing combined activity. The supplementing of the List
          shall be performed in accordance with the Employer's guideline
          document for the use of the List.

24.6.     If during the period of training an employee does not perform the work
          activities assigned to the job, the employee shall be assigned a
          tariff grade at least one grade lower than that which applies to the
          foregoing job.

24.7.     The qualifications-related requirements stipulated in the List are
          binding. In the event that an employee does not fulfill the stipulated
          qualifications-related requirements, the procedure set forth in the
          Employer's guideline document shall be followed.

24.8.     In the event of a change in an employee's job description or the
          reassignment of the employee to a different workplace, if the tariff
          grade concurrently changes, the employee is entitled to the new wage
          tariff starting from the first day of reassignment.

24.9.     Graduates of educational and vocational institutions (within the
          meaning of Section 30 (2) (a)of the Labor Code) are assigned into the
          following grades or higher during the period of initial practice:

          o    in the case of a university education, the 6th tariff grade,

                                       24
<PAGE>

          o    in the case of a bachelor degree or higher professional
               education, the 6th tariff grade,

          o    in the case of a completed high school education, the 5th tariff
               grade,

          o    in the case of graduates of vocational institutions, the 4th
               tariff grade,

          o    in the case of a basic grammar school education, and youth up to
               the age of 16, the 1st tariff grade.

24.10.    The Employer shall determine the length of initial practice and the
          training procedure while taking into consideration the difficulty and
          demanding nature of the work activities performed at the job for which
          the graduate was hired, but no longer than 2 years.

                                   Section 25
                                Wage Tariff Range

25.1.     The wage tariff range constitutes the financial valuation of the
          long-term work performance of an employee, the fulfillment of assigned
          tasks and the work results achieved. A wage tariff range is stipulated
          for individual tariff steps in the amount of 0 - 50 % of the
          applicable wage tariff. Wage tariff ranges are set forth in Annexes
          No. 1A and 1B hereto.

25.2.     In 2004, the Employer shall set aside the following amounts for wage
          tariff ranges (including bonuses from undistributed wage tariff
          ranges):

          o    at the Conventional Power Division, wage funds in the amount of
               32.5 % of the volume of wage tariffs awarded to the employees of
               the Conventional Power Division as at the adjustment date of wage
               tariffs,

          o    at the Conventional Power Division and Prague Head Office:

          -    as of January 1, 2004, wage funds in the amount of 28 % of the
               volume of wage tariffs awarded to the employees of the
               Conventional Power Division and the Prague Head Office as at
               January 1, 2004,

          -    as of October 1, 2004, wage funds in the amount of 32.5 % of the
               volume of wage tariffs awarded to the employees of the
               Conventional Power Division and the Prague Head Office as at
               October1, 2004.

25.3.     During the years 2005 - 2006, the Employer shall set aside for wage
          tariff ranges (including bonuses from undistributed wage tariff
          ranges) at the Conventional Power Division, the Nuclear Power Division
          and the Prague Head Office 32.5 % of the volume of wage tariffs
          awarded to the employees as at the adjustment date of wage tariffs.

25.4.     The specific amount of a wage tariff range shall be stipulated for
          individual employees by the management employee that is their direct
          superior, on the basis of an evaluation of the employee's work
          performance, the fulfillment of assigned tasks and the work results
          achieved, in accordance with the evaluation system used by the
          Employer.

25.5.     As a rule, a wage tariff range is awarded to an employee for a period
          of one year (a different period may be used for a newly-hired employee
          or when an employee changes jobs etc.) and the amount of such range
          shall be stipulated in writing. When awarding a wage tariff range to
          an employee that has changed jobs the supervisor shall take into
          consideration the conclusions reached during the most recent
          evaluation of the employee.

25.6.     In exceptional cases, an employee's wage tariff range may be reduced
          or revoked in the course of an evaluated period, in the event of the
          non-fulfillment of significant tasks or a serious breach of legal
          regulations or the Employer's guideline documents relating to the work
          performed by such employee, under the following conditions:

                                       25
<PAGE>

          a)   The amount of the reduction of the wage tariff range is derived
               from the seriousness of the breach of legal regulations or the
               Employer's guideline documents or the significance of the
               unfulfilled task.

          b)   The scope of the stipulated reduction may range from 10 % to a
               complete revocation of the wage tariff range.

          c)   The period for which the wage tariff range is reduced or revoked
               shall be no longer than 3 months.

          d)   The reduction of the wage tariff range shall be notified to the
               employee in writing, including the reasons for and the period of
               reduction; the wage assessment shall not be changed during this
               procedure.

          e)   In the event of disagreement, the employee may appeal to a higher
               level of management and following a review such higher level of
               management shall decide the matter with final effect. The
               employee shall be demonstrably invited to such review and shall
               have the right to be represented by the applicable Labor Union.

          f)   Wage funds ensuing from the curtailment of a wage tariff range
               shall remain in circulation as part of the volume of the wage
               funds of the applicable unit. A reduction of a wage tariff range
               shall not be reflected in the volume of wage funds stipulated for
               the full-year evaluation.

25.7.     During the determination of a wage tariff range for an employee, the
          employee's direct superior shall ensure that the newly-awarded range
          is determined in accordance with the conclusions reached during the
          employee's evaluation. This means, for example, that an increase in
          the wage tariff cannot constitute a reason for a reduction of the wage
          tariff range. The wage tariff range may be adjusted solely in the
          cases specified in Clauses 25.4., 25.5 and 25.6.

25.8.     For wage tariff ranges, the Employer shall assign to each management
          employee for the tariff-wage employees in the unit managed by such
          management employee a volume of wage funds corresponding to at least
          the volume in December of the previous year.

25.9.     During a reduction of the number of employees in the course of an
          evaluation period, the volume of wage funds for wage tariff ranges is
          reduced by the applicable specific amount that had been awarded to
          employees that left the department. During an increase in the number
          of employees in accordance with the applicable systemization such
          volume is increased by the amount awarded to employees, or, as the
          case may be, by the part corresponding to the average in percent of
          the wage tariff range of the organizational unit, section or
          department directly managed by an executive director.

25.10.    In the event that due to justified reasons (for example, due to a
          long-term illness or the hiring of new employees), a management
          employee does not distribute the entire volume of wage funds assigned
          to wage tariff ranges between the employees of the managed unit, the
          management employee may use such funds for bonuses to be awarded in
          the managed unit in the course of the applicable calendar year.

25.11.    The wage tariff range is paid in respect of a period actually worked
          by the employee.

                                   Section 26
                                 Extra Payments

26.1.     Wages and overtime payments

          26.1.1.   For overtime work ordered by the Employer or performed with
                    the employee's consent the employee is entitled to the wages
                    accruing to the employee for such period plus an extra
                    payment on top of the wages earned in the amount of 30 % of
                    the employee's average hourly wage for each hour of overtime
                    work.

                                       26
<PAGE>

          26.1.2.   Upon agreement with the employee, the Employer may provide
                    an employee with substitute time-off for overtime work, one
                    hour of substitute time off for each hour of overtime work.
                    In such a case the employee is not entitled to the overtime
                    payment pursuant to Clause 26.1.1.

          26.1.3.   If the Employer does not provide an employee with substitute
                    time-off within three calendar months following the
                    performance of overtime work, or within another agreed time
                    limit, the employee shall be entitled to an extra payment in
                    the amount of 30 % of the average wage whose computation
                    relates to the period when the overtime work was performed.

26.2.     Wages and extra payments for work on holidays

          26.2.1.   For work performed on a holiday an employee shall be
                    entitled to the wages earned and substitute time-off in the
                    scope of the work performed on the holiday, which substitute
                    time off shall be provided to the employee no later than the
                    end of the third calendar month following the performance of
                    the holiday work or within another agreed time limit. For
                    the period when the substitute time off is drawn the
                    employee is entitled to substitute wages in the amount of
                    the average wage. The Employer may reach an agreement with
                    the employee that an extra payment in the amount of 110% of
                    the average wage will be provided on top of the wages earned
                    in lieu of substitute time off.

          26.2.2.   For work performed from 2:00 p.m. on December 24 to 6:00
                    a.m. on December 25 an employee is entitled to an additional
                    extra payment in the amount of 100% of the average hourly
                    wage for each hour worked.

26.3.     Extra payment for work performed in a work environment that is
          difficult and harmful to health For work performed in a work
          environment that is difficult and harmful to health an employee is
          entitled to an extra payment on top of the wages earned in accordance
          with the "List of Work Remunerated with Extra Payments for Work
          Environments that are Difficult and Harmful to Health", which is set
          forth in Annex No. 9 hereto. In such list are described the conditions
          for the provision of such extra payment and individual rates in CZK
          for each hour of work, depending on what kind of difficult and harmful
          to health environment is involved.

26.4.     Extra payment for night work
          For each hour of work at night - i.e. between 10:00 p.m. and 6:00 a.m.
          - an employee is entitled to the following extra payment on top of
          wages achieved:

          o        from January 1, 2004         CZK 15. 70,
          o        from July 1, 2004            CZK 15.90.

26.5.     Extra payment for work at higher elevations
          For work performed at workplaces situated at higher elevations with
          limited workspace or necessitating forced body positions, at a height
          of at least 7 m from the surface, an employee is entitled to the
          following extra payment on top of the wages achieved:

          o        from January 1, 2004         CZK 7.30 for each hour worked,
          o        from July 1, 2004            CZK 7.40 Kc for each hour worked

          and for heights over 10 m, an extra payment of:

          o        from January 1, 2004         CZK 12.40 for each hour worked,
          o        from July 1, 2004            CZK 12.50 for each hour worked.

          This extra payment is not provided for work on stable work platforms.

                                       27
<PAGE>

26.6.     Extra pay for work on Saturdays and Sundays
          For each hour of work performed on Saturdays or Sundays an employee is
          entitled to receive on top of the wages achieved extra pay in the
          amount of 30 % of the employees average hourly wage.

26.7.     Extra pay for work on afternoon shifts
          For each hour of work on an afternoon shift - i.e. between 2:00 p.m.
          and 10:00 p.m. - an employee is entitled to the following extra
          payment on top of the wages achieved:

          o        from January 1, 2004         CZK 8 for each hour worked,
          o        from July 1, 2004            CZK 8.10 for each hour worked.

          An afternoon shift is understood to mean a shift within a work regime
          made up of at least two shifts.

26.8.     Extra payment for shift work
          For work performed in continuous shift regimes, in accordance with a
          predetermined shift schedule, on top of the wages achieved an employee
          is entitled to an extra payment that ensures preferential wages for
          such work regime, in the following amount:

          o        from January 1, 2004         CZK 10.40 for each hour worked
                                                in a continuous shift regime,
          o        from July 1, 2004            CZK 10.50 for each hour worked
                                                in a continuous shift regime

26.9.     Extra payment for work in special working conditions
          For work performed with the use of an insulated breathing apparatus
          (e.g. with liquid oxygen, with an oxygen exhaust, oxygen regeneration,
          air breathing apparatus without air regeneration, hose breathing
          system) supplemented if required by a protective suit (protective suit
          against radiating heat, anti-chemical suit, diving suit etc.) an
          employee is entitled to the following extra payment for each started
          hour of work:

          o        from January 1, 2004         CZK 110,
          o        from July 1, 2004            CZK 111.

          During training for work with the above-described special personal
          protective devices and employee is not entitled to receive the extra
          payment.

26.10.    Extra payment for work under difficult work conditions
          For work performed under difficult work conditions an employee is
          entitled to receive on top of the wages achieved an extra payment in
          accordance with the "List of Work Remunerated with Extra Payments for
          Difficult Work Conditions ", which is set forth in Annex No. 10
          hereto. In such list are described the conditions for the provision of
          such extra payment in CZK for each hour of work, in accordance with
          individual activities performed under difficult work conditions.

26.11.    Principles for provision of extra payments

          26.11.1.  All extra payments are provided cumulatively. If an employee
                    performs work in several work regimes, the employee shall be
                    entitled to all of the extra payments, with the exception of
                    the following:

                    o    an extra payment for work on an afternoon shift is not
                         applicable to overtime work,

                    o    employees working in continuous shift regimes are not
                         entitled to an extra payment for work on afternoon
                         shifts.

          26.11.2.  Extra payments are paid in respect of the period of time
                    actually worked, rounded to the nearest half hour (with the
                    exception of extra payments for work under special

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<PAGE>

                    conditions paid out in accordance with Clause 26.9.) and are
                    not tied to the requirement of working a continuous block of
                    hours.

          26.11.3.  Extra payments may be accumulated into amounts specified for
                    a month, shift, hour etc, i.e. a lump sum amount pursuant to
                    an agreement with the applicable Labor Union body. If the
                    conditions under which the lump sum was set change
                    significantly, the Employer has an obligation to modify the
                    lump sum.

                                   Section 27
                         Additional Components of Wages

27.1.     Wages for Christmas Holidays

          27.1.1.   The division of wage funds for the payment of wages for
                    holidays and wages for Christmas between the Conventional
                    Power Division, Nuclear Power Division and Prague Head
                    Office shall be implemented by the General Director. In this
                    process the General Director shall take into consideration,
                    in particular, the Employer's operating results and the
                    operating results of the Conventional Power Division and the
                    Nuclear Power Division. The amount of wage funds for such
                    component of wages shall be expressed as a percentage of the
                    computation base. In the case of the Prague Head Office,
                    funds shall be determined for this component of wages in an
                    amount corresponding to the average percentage of funds
                    allocated for such component of wages by the Employer.

          27.1.2    The volume of wage funds designated for wages for holidays
                    and wages for Christmas shall amount to at least 30% of the
                    computation base for each such wage. The final total amount
                    of each such wage shall be derived from the last known
                    anticipated fulfillment of the indicator "Corrected Gross
                    Profit" in the applicable calendar year in accordance with
                    the following conditions:

      -------------------------------------------------------------------------
         Minimum % of Christmas wages, or      Fulfillment of the indicator
               wages for holidays, from the    "Corrected Gross Profit" (% )
                     computation base
      -------------------------------------------------------------------------
                                                at least        less than
      -------------------------------------------------------------------------
                       60%                        106%              x
      -------------------------------------------------------------------------
                       59%                        105%             106%
      -------------------------------------------------------------------------
                       56%                        104%             105%
      -------------------------------------------------------------------------
                       53%                        103%             104%
      -------------------------------------------------------------------------
                       50%                        102%             103%
      -------------------------------------------------------------------------
                       45%                        101%             102%
      -------------------------------------------------------------------------
                       40%                        100%             101%
      -------------------------------------------------------------------------
                      39.5%                       99%              100%
      -------------------------------------------------------------------------
                       39%                        98%              99%
      -------------------------------------------------------------------------
                 0.5 % reduction              for each 1%        for each
                                                  less           1 % less
      -------------------------------------------------------------------------
                      30.5%                       81%              82%
      -------------------------------------------------------------------------
                       30%                         x               81%
      -------------------------------------------------------------------------

                                       29
<PAGE>

          27.1.3    The settlement of the amount of wages for holidays and wages
                    for Christmas for the current calendar year in accordance
                    with the value actually achieved for the indicator Corrected
                    Gross Profit shall be performed in the holiday wages in the
                    following calendar year, i.e. by increasing or reducing such
                    wages in accordance with the foregoing condition.

          27.1.4.   Employees which are in an employment relationship with the
                    Employer as at May 31 of the current year shall be paid,
                    from the assigned volume of wage funds, a holiday wage in
                    their wages for the month of May. The base for the
                    computation of holiday wages shall be an employees total
                    gross wage pursuant to Clause 27.1.6. for the period from
                    October of the previous calendar year to March of the
                    current calendar year or, if applicable, a pro-rata portion
                    of such period within the meaning of Clauses 27.1.8.,
                    27.1.9. and 27.1.10., divided by six.

          27.1.5.   Employees which are in an employment relationship with the
                    Employer as at November 30 of the current year shall be
                    paid, from the assigned volume of wages for such wage
                    component, a Christmas wage in their wages for the month of
                    November. The base for the computation of Christmas wages
                    shall be an employees total gross wage pursuant to Clause
                    27.1.6. for the period from April to September of the
                    current calendar year or, if applicable, a pro-rata portion
                    of such period within the meaning of Clauses 27.1.8.,
                    27.1.9. and 27.1.10., divided by six

          27.1.6.   The following items shall not be included in gross wages for
                    the purpose of the computation of holiday wages and
                    Christmas wages:

                    a)   compensation for wages,

                    b)   bonuses for lifetime anniversaries,

                    c)   holiday wages and Christmas wages,

                    d)   annual bonuses,

                    e)   remuneration pursuant to contracts on the performance
                         of work or contracts on work activities,

                    f)   bonuses paid out from the bonus fund.

          27.1.7.   The total amount of wage funds designated for the payment of
                    holiday wages or Christmas wages shall be allocated to
                    individual employees in accordance with the ratio of the
                    above-described gross wages of such employees.

          27.1.8.   Holiday wages and Christmas wages are also provided to:

                    a)   employees whose employment relationship ended because
                         they left for old-age retirement, early old-age
                         retirement pursuant to Act No. 155/1995 Coll. or full
                         invalidity retirement (with the exception of employees
                         whose employment relationship ended by a termination
                         notice or on the basis of an agreement due to
                         organizational reasons and they received severance
                         pay),

                    b)   in a pro-rated amount, to employees for whom in the
                         course of the period that counts as part of the base
                         for the computation of holiday wages or Christmas wages
                         the remuneration scheme changed from a contractual wage
                         to a tariff wage or vice versa with regard to the
                         period when they were remunerated by a tariff wage,

                    c)   employees who ended their employment relationship due
                         to the organizational reasons set forth in Section 46
                         (1)(a) - (c) of the Labor Code before their

                                       30
<PAGE>

                         notice period began to run or who ended the employment
                         relationship by agreement in the course of a notice
                         period that contains the date May 31 or November 30;
                         wages for holidays or Christmas shall be paid to such
                         employees following the termination of the employment
                         relationship on the usual date for the payment of such
                         component of wages.

          27.1.9.   In the event that the number of employees set forth in the
                    records changes in the course of the period for which
                    holiday wages or Christmas wages are being provided, the
                    actually achieved adjusted gross wages for such period shall
                    be used.

          27.1.10.  In the event that the remuneration scheme changes from a
                    tariff wage to a contractual wage, or vice versa, in the
                    course of the period for which holiday wages or Christmas
                    wages are being provided, the Employer shall use the gross
                    wages actually achieved during remuneration by the tariff
                    wage in the period which counts as part of the computation
                    base.

          27.1.11.  Holiday wages or Christmas wages are not paid to:

                    a)   employees remunerated by a contractual wage, with the
                         exception of the employees set forth in Clause 27.1.8.
                         (b),

                    b)   part-time employees,

                    c)   employees who had an unexcused absence during the
                         applicable period (October - March, April - September),

                    d)   employees which were enforceably sentenced by a court
                         for a crime they committed during the performance of
                         their work tasks or in direct connection therewith,

                    e)   employees who filed a termination notice in respect of
                         their employment relationship and where the notice
                         period is running or employees who filed a termination
                         notice in the course of May or November or whose
                         employment relationship will end in connection with
                         such notice in May or November,

                    f)   employees whose employment relationship ends on the
                         basis of an agreement on the termination of an
                         employment relationship in May or November, with the
                         exception of an agreement on the termination of an
                         employment relationship due to organizational changes,

                    g)   employees who received a termination notice pursuant to
                         Section 46 (1)(f) of the Labor Code and whose notice
                         period is running, or they received a termination
                         notice in the course of May or November or in
                         connection with such termination notice their
                         employment relationship is ending by agreement in May
                         or November,

                    h)   employees whose employment relationship was cancelled
                         pursuant to Section 53 of the Labor Code.

27.2.     Special bonuses and goal bonuses

          27.2.1.   Special bonuses are provided for the fulfillment of special
                    one-time tasks or in recognition of an employee's overall
                    contribution towards the achievement of good operating
                    results by the Employer. A special bonus is awarded to an
                    employee within the framework of the assigned volume of wage
                    funds by the employees direct superior, or another
                    management employee following a discussion with the
                    applicable direct superior, and within the

                                       31
<PAGE>
                    framework of the volume of wage funds that were set aside
                    for such management employee for the purpose of special
                    bonuses.

          27.2.2.   Goal bonuses are provided for the fulfillment of
                    predetermined goals and are paid after such goals are
                    fulfilled. For goal bonuses a returnable deposit may be
                    provided in an amount of up to one half of the promised goal
                    bonus in cases involving the fulfillment of a goal
                    stipulated for a longer period of time. A goal bonus is
                    awarded to individual employees who participated in the
                    fulfillment of the goal by the employee who announced the
                    goal and who performs the evaluation of the goal. The
                    employee's direct superior shall be informed in advance when
                    a goal bonus is to be awarded to the employee.

                                   Section 28
                       Bonuses for Lifetime Anniversaries

28.1.     In recognition of and as a reward for a long period of work for the
          Employer and its legal predecessors an employee may be awarded a
          one-time bonus on the following occasions:

          a)   the first termination of an employment relationship following
               eligibility for old-age retirement, full invalidity retirement or
               early old-age retirement pursuant to Act No. 155/1995 Coll., On
               Pension Insurance,

          b)   the attainment of the age of 50 years.

28.2.     The bonuses are of an optional nature and there is not legal
          entitlement to them. At the Prague Head Office and CEZTrade, such
          bonuses are awarded by the Director of the Personnel Department, at
          the Conventional Power Division by the head of the Personnel
          Department and at the Nuclear Power Division by the Director of the
          Personnel Department, on the basis of a proposal from the applicable
          management employee and upon an evaluation of the long-term work
          achievements of the employee.

28.3.     The maximum amount of the bonus is determined in a series of steps
          based on the length of continuous employment for the Employer and its
          legal predecessors (i.e., in the electric power industry). The
          procedure for the computation of an employee's length of practice in
          the electric power industry is specified in Annex No. 8 hereto.

28.4.     The computed duration of the employment relationship also includes any
          period when an employee collected a full invalidity pension and was
          not concurrently in an employment relationship with another employer.

28.5.     Such bonuses are not deemed to be wages and are paid from the Bonus
          Fund.

28.6.     A bonus applies during the first termination of an employment
          relationship upon eligibility for old-age retirement, full invalidity
          retirement or early old-age retirement.

          28.6.1.   The bonus may be provided if the condition is met that the
                    employment relationship with the Employer and its legal
                    predecessors that the employee is dissolving lasted for a
                    continuous period of at least 5 years immediately preceding
                    the employee's departure for retirement.

          28.6.2.   The following employees are not entitled to the bonus:

                    a)   employees who terminated the employment relationship
                         for the reasons set forth in Section 46 (1)(f) of the
                         Labor Code or employees whose employment relationship
                         was terminated pursuant to Section 53 of the Labor
                         Code,

                    b)   employees who received severance pay pursuant to
                         Section 29 herein.

                                       32
<PAGE>

          28.6.3.   In the case of the bonus applicable during the first
                    termination of an employment relationship upon eligibility
                    for old-age retirement, early old-age retirement or full
                    invalidity retirement, the maximum amount of such bonus is
                    determined as follows:

     ------------------------------------------------------------------------
     Period of continuous employment        Maximum amount of bonus
     in electric power industry
     ------------------------------------------------------------------------
     at least 5 years                 1 average monthly wage of the employee
     ------------------------------------------------------------------------
     at least 10 years                2 average monthly wages of the employee
     ------------------------------------------------------------------------
     at least 15 years                3 average monthly wages of the employee
     ------------------------------------------------------------------------
     at least 20 years                4 average monthly wages of the employee
     ------------------------------------------------------------------------
     at least 25 years                5 average monthly wages of the employee
     ------------------------------------------------------------------------

          28.6.4.   In the event that an employee ends the employment
                    relationship due to departure for early old-age retirement,
                    the years remaining until the employee becomes entitled to
                    an old-age pension are treated as a period spent working for
                    the Employer.

28.7.     Bonus for the attainment of 50 years

          28.7.1.   This bonus can be provided if the condition is met that the
                    existing employment relationship with the Employer lasted
                    continuously for at least 5 years. During the determination
                    of the amount of the bonus it is assumed that the number of
                    years necessary for awarding the bonus will be attained by
                    the end of the calendar year in which the employee attains
                    the lifetime jubilee. The bonus will be paid to an employee
                    following the fulfillment of the stipulated condition.

          28.7.2.   The maximum amount of the bonus for the attainment of the
                    age of 50 years is determined as follows:

     ---------------------------------------------------------------------------
     Period of continuous employment     Maximum amount of bonus
     in electric power industry
     ---------------------------------------------------------------------------
     at least 5 years                0.5 times the average wage at the Employer
     ---------------------------------------------------------------------------
     at least 10 years               1 times the average wage at the Employer
     ---------------------------------------------------------------------------
     at least 15 years               1.5 times the average wage at the Employer
     ---------------------------------------------------------------------------
     at least 20 years               2 times the average wage at the Employer
     ---------------------------------------------------------------------------

The average wage at the Employer is understood to mean the ratio between the
wage costs actually paid out by the Employer and the average recorded
recalculated number of employees during the preceding calendar year, divided by
12.

                                   Section 29
                                  Severance Pay

29.1.     Severance pay during organizational changes

          29.1.1.   An employee whose employment relationship is being dissolved
                    by notice due to organizational reasons pursuant to Section
                    46 (1) (a) through (c) of the Labor Code, or for the same
                    reasons but on the basis of an agreement, shall be paid
                    severance pay upon the termination of the employment
                    relationship in accordance with the number of years of
                    worked in the electric power industry (all periods worked
                    are credited, i.e. even periods which were not continuous),
                    as follows:

      --------------------------------------------------------------------------
        Length of practice in                     Amount of severance pay
       electric power industry                     (as multiple of the
            (in years)                       employee's average monthly wages)
          ----------------------------------------------------------------------
            0 - 2                                             2
          ----------------------------------------------------------------------
            2 - 5                                             4
          ----------------------------------------------------------------------
            5 - 10                                            5
          ----------------------------------------------------------------------
           10 - 15                                            6
          ----------------------------------------------------------------------

                                       33
<PAGE>

           15 - 20                                            7
          ----------------------------------------------------------------------
           20 - 25                                            9
          ----------------------------------------------------------------------
               >25                                            10
          ----------------------------------------------------------------------

The lower boundary of the length of practice in the electric power industry is
the foregoing number of years plus one day, the upper boundary is the date when
the applicable time period was achieved.

          29.1.2.   In the case of employees whose employment relationship ends
                    due to organizational reasons on the basis of an agreement
                    pursuant to Section 46 (1) (a) through (c) of the Labor Code
                    before the three month notice period stipulated by the Labor
                    Code for termination on the grounds of organizational
                    changes begins to run, the severance pay set forth in Clause
                    29.1.1. herein shall be increased by three times their
                    average monthly wage.

          29.1.3.   In the event that an employee's employment relationship ends
                    due to organizational reasons on the basis of an agreement
                    pursuant to Section 46 (1) (a) through (c) of the Labor Code
                    in the course of the notice period, the severance pay set
                    forth in Clause 29.1.2. herein shall be reduced by an amount
                    equal to one average monthly wage for each started month of
                    the notice period.

          29.1.4.   For the purposes of the payment of increased severance pay,
                    the term notice period is also understood to mean the three
                    month period that commences on the first day of the month
                    after the Employer discussed with the employee the
                    employee's lay-off for organizational reasons and both
                    parties accepted that the employment relationship would be
                    terminated by agreement. For increasing severance pay
                    pursuant to this clause hereof it is not necessary for the
                    employee to be given a termination notice.

          29.1.5.   The following employees are not entitled to severance pay:

                    a)   an employee whose labor-law rights and obligations are
                         being transferred to another employer during
                         organizational changes,

                    b)   an employee in a part-time employment relationship with
                         the Employer.

29.2.     Severance pay when an employee departs for retirement due to health
          reasons

          A employee who worked for the Employer for at least 5 years and whose
          employment relationship is being dissolved by a notice given by the
          Employer for the reasons set forth in Section 46 (1) (d) of the Labor
          Code, or by agreement for the same reasons, is entitled to severance
          pay in the amount of five average monthly wages upon the end of the
          employment relationship. An employee in a part-time employment
          relationship with the Employer is not entitled to such severance pay.

29.3.     Severance pay is paid to an employee at the earliest payroll deadline
          stipulated by the Employer for the payment of wages, unless the
          Employer and the employee agree on another deadline for the payment of
          severance pay.

29.4.     In the event that after the employment relationship ends the employee
          rejoins CEZ, a.s. prior to the expiration of the period determined in
          accordance with the applicable multiple of average wages from which
          the amount of severance pay had been derived, such employee shall have
          an obligation to return the severance pay or a pro-rata portion
          thereof.

                                   Section 30
                                Other Provisions

30.1.     Substitution and temporary work

          30.1.1.   An employee whom the Employer has authorized in writing to
                    substitute, to a full extent, for an employee who is entered
                    in a higher tariff grade is entitled to an extra pay in the
                    amount of the difference between the substituted employee
                    and the substituting employee, or to
                    contractually-stipulated substitution pay if the substituted

                                       34
<PAGE>

                    employee is remunerated by a contractual wage. Such extra
                    pay is provided effective the first day of substitution,
                    provided the substitution lasts at least 4 weeks, and is
                    provided for no longer than twelve months after the first
                    day of substitution. The foregoing extra pay does not apply
                    to employees who have substitution in their job description
                    or whose wages demonstrably take substitution into
                    consideration.

          30.1.2.   An employee who is entrusted, on the basis of qualifications
                    attained, with the performance in full of another work
                    activity entered in a higher tariff grade is entitled to
                    extra pay (wages for temporary work) in the amount of the
                    difference between the applicable base wage tariffs. Such
                    extra pay is provided for the period actually worked, but
                    not less than for one hour.

30.2.     Professional training

          30.2.1.   If an employee participates, on the basis of the Employer's
                    decision, in professional training, testing, courses or
                    studies in the course of the employee's employment for the
                    purpose of enhancing, maintaining or renewing
                    qualifications, the period of participation is deemed to be
                    the performance of work.

          30.2.2.   If an employee with an uneven work period is sent for
                    professional training, testing, courses or studies for the
                    purpose of enhancing, maintaining or renewing
                    qualifications, such employee's work regime shall be
                    modified for such period. This means that for such period
                    such employee shall work solely morning shifts and the
                    weekly work period stipulated for such employee's workplace
                    shall be credited to the employee. For such period the
                    employee shall be entitled to extra pay for work in a
                    continuous shift regime, with the exception of employees who
                    are not entitled to such extra payment. In the case of
                    training that is shorter than one week, the proportional
                    part of the weekly work period shall be credited.

30.3.     Wages during performance of other work

          30.3.1.   If an employee is transferred to work other than that
                    stipulated in the employment contract, work for which a
                    lower wage applies, due to:

                    a)   the risk of a work-related illness,

                    b)   a quarantine ordered in accordance with regulations on
                         measures against communicable diseases,

                    c)   the need to avert a natural disaster or other impending
                         accident or the need to mitigate the immediate
                         consequences thereof,

                    d)   idle time which was not caused by the employee or
                         interruptions in work caused by unfavorable weather
                         conditions,

                    e)   the attainment of the highest allowable dosage of
                         ionizing irradiation, the employee is entitled to an
                         extra payment to bring the employee's wages up the
                         amount of average wages.

          30.3.2.   In the event that an employee is re-assigned pursuant to
                    Section 37 (2) (b) of the Labor Code to work other than the
                    work stipulated for the employee, such employee is entitled
                    to wages based on the work performed; provided the employee
                    was not enforceably convicted of a criminal act committed
                    during the performance of work tasks and provided damage was
                    not caused to the Employer's property in direct connection
                    therewith, then for the period of re-assignment such
                    employee shall be entitled to an extra payment to bring such
                    employee's average wage to the level the employee attained
                    prior to such re-assignment.

                                       35
<PAGE>

          30.3.3.   In the case of work activities whose nature consists of
                    servicing electric power production equipment, and the
                    activities connected therewith during continuous shift
                    regimes where such equipment is repaired at the place of
                    operation (normal repairs, special repairs, overhauls,
                    reviews etc.), participation in such work is deemed to be
                    the performance of work within the framework of the
                    employment contract. The employee is entitled to the awarded
                    wage tariff, the awarded wage tariff range, an extra payment
                    for shift work and the other components of wages, depending
                    on the work performed.

30.4.     Remuneration for standby work

          30.4.1.   For each hour of standby work, an employee is entitled to
                    remuneration in the amount of :

                    o    CZK 6.70 for standby work performed outside of the
                         workplace on a weekday, but no less than CZK 51.50 per
                         day,

                    o    CZK 12.30 for standby work performed outside of the
                         workplace on Saturday, Sunday or a statutory holiday
                         (on days of continuous rest), but no less than CZK 77
                         per day,

                    o    CZK 23.40 Kc for standby work performed at the
                         workplace on a weekday,

                    o    CZK 34 for standby work performed at the workplace on
                         Saturday, Sunday or a statutory holiday (on days of
                         continuous rest).

          30.4.2.   If work is performed in the course of standby work, the
                    employee is entitled to wages for the work performed. The
                    employee is not entitled to remuneration for standby work
                    during the performance of work.

30.5.     Average wage

          30.5.1.   During the determination and application of the average
                    wage, the procedure pursuant to the Act on Wages is
                    followed, with the following clarification:

                    a)   holiday wages and Christmas wages shall be incorporated
                         into gross wages proportionally for a period of two
                         quarters,

                    b)   goal bonuses and special bonuses shall be incorporated
                         into gross wages proportionally for the number of
                         quarters in respect of which they were provided,

                    c)   annual bonuses and deposits for annual bonuses shall be
                         included in gross wages proportionally for a period of
                         four quarters.

          30.5.2.   If in the course of the decisive period an employee is to be
                    paid wages (or a part of wages) that are being provided in
                    respect of a time period longer than a calendar quarter,
                    then for the purposes of the determination of the average
                    wage the pro-rata portion of such wages accruing to a
                    calendar quarter shall be determined; the remaining portion
                    of such wages shall be included into gross wages during the
                    determination of the average wage for the subsequent period.
                    The number of periods is specified in Clause 30.5.1. In
                    gross wages shall be included for the purpose of the
                    determination of the average wage in the course of the
                    decisive period the pro-rata portion pursuant to the first
                    sentence corresponding to the work period.

          30.5.3.   Bonuses for lifetime anniversaries are not included in gross
                    wages for the computation of the average wage.

          30.5.4.   During the determination of the average wage for the
                    purposes of determining compensation for damages during work
                    injuries and work-caused illnesses the decisive

                                       36
<PAGE>

                    period is the preceding calendar year, provided that the
                    decisive period so determined is more advantageous for the
                    employee.

          30.5.5.   In the case of an employee who was transferred to other work
                    due to the risk of a work-related illness or due to the
                    attainment of the highest permissible exposure, and in whose
                    case the work-related illness was not discovered until after
                    such transfer, the determination of substitute wages for
                    lost wages shall be based, if it is more advantageous for
                    the employee, on the average wage last determined prior to
                    the date of the transfer to other work.

30.6      Payment deadline for wages; payment of wages

          30.6.1.   Wages are payable after the performance of work, no later
                    than in the following calendar month. Wages shall be paid
                    out to an employee, or transferred to the employee, on the
                    basis of his or her request, from the Employer's account to
                    the employee's account with a bank in the Czech Republic no
                    later than the 6th business day of the month following the
                    month for which such wages are to be paid.

          30.6.2.   Prior to an employee's departure for a holiday, the Employer
                    shall pay to the employee the wages due in respect of the
                    period of the holiday, unless the Employer and the employee
                    agree otherwise. If the procedure for the computation of
                    wages does not allow this, the Employer shall provide the
                    employee with a reasonable deposit and shall pay the
                    remaining portion of the wages no later then the earliest
                    regular deadline for the payment of wages following the
                    holiday.

                                       37
<PAGE>

                          GENERAL AND FINAL PROVISIONS

                                   Section 32

The contracting parties undertake that in the event of disagreement regarding
the interpretation of the content hereof they shall enter into negotiations, via
the representatives authorized to negotiate this Collective Bargaining
Agreement, in an effort to prevent a collective bargaining dispute regarding the
fulfillment hereof. They shall have the right to adopt a joint interpretation in
respect of the contested point, which interpretation shall be binding on all
entities to which this Collective Bargaining Agreement applies.

                                   Section 33

33.1.     Changes or supplements to this Collective Bargaining Agreement, in the
          scope of the identified applicable obligations and under the terms and
          conditions stipulated herein, may be proposed in writing by either of
          the contracting parties. Both contracting parties have an obligation
          to negotiate regarding a proposal for a change or supplement no later
          than 14 days following the delivery of such proposal.

33.2.     The contracting parties undertake to enter into negotiations on
          amendments hereto in the following cases:

          a)   when it is stipulated in the individual provisions hereof,

          b)   in the event of the issuance of such new legal regulations or
               amendments to such existing legal regulations as affect the
               obligations regulated herein, in the full scope of the affected
               obligations; in such cases the contracting parties undertake to
               initiate negotiations on amendments to the applicable provisions
               hereof within 30 days of the proclamation of such new legal
               regulations or amendments in the Collection of Laws of the Czech
               Republic.

          c)   cases pertaining to modifications of the social and wages-related
               areas hereof, if either of the contracting parties so requests,

          d)   in the event of a proposal from either of the contracting parties
               for an extension of the term hereof

33.3.     The contracting parties undertake to enter into negotiations if either
          of the contracting parties so requests or if legal regulations of
          general applicability regulate the work-related, wage-related or
          social conditions of employees and relations between the contracting
          parties in another manner, and in the event that new situations arise
          that are not addressed herein and either contracting party is
          interested in having such situations regulated.

                                   Section 34

The language for legal acts in labor-law relations between the Employer and
employees shall be Czech. The Employer has the right to make an exemption from
this principle with the consent of the employee.

                                   Section 35

This Collecting Bargaining Agreement must be accessible to all employees.

                                   Section 36

This Collecting Bargaining Agreement, including its annexes, has been concluded
for a definite period of time, from January 1, 2004 to December 31, 2006, with
the following exceptions:

                                       38
<PAGE>

          -    Annexes No. 2, 3A and 3B have been concluded for a definite
               period of time, from January 1, 2004 to December 31, 2004,

          -    Section 29 (29.2.) shall enter into effect upon entry into force
               of an amended Labor Code that makes the provision of severance
               pay possible.

                                   Section 37

This Collective Bargaining Agreement has been drafted in five originals. The
Employer shall receive two originals and the representatives of the labor union
associations under which the applicable base Labor Unions are associated shall
each receive one original.

                                       39
<PAGE>

Collective Bargaining Agreement of CEZ, a. s., for the years 2004 - 2006

For the Employer:
Chairman of the Board              Ing. Petr Voboril    ....signature....
Deputy Chairman of the Board       Ing. Josef Sedlak    ....signature....

For the following base Labor Unions:
ZO OSZJE OOSP EDU                  Jiri Jedlicka        ....signature....
ZO OSZJE OOZ EDU                   Vladimir Pavlik      ....signature....
ZO COSSE ELE                       Petr Stencl          ....signature....
ZO COSSE EME                       Jan Sevr             ....signature....
ZO COSSE EPC                       Jiri Zelenka         ....signature....
ZO COSSE EPR I                     Josef Plisek         ....signature....
ZO COSSE EPR II                    Zdenek Zidlicky      ....signature....
ZO COSSE ETU I                     Jiri Novotny         ....signature....
ZO COSSE ETU II                    Stepan Rodina        ....signature....
ZO COSSE ETI                       Josef Mraz           ....signature....
ZO OSE EDE                         Lubomir Klosik       ....signature....
ZO OSE EHO                         Jiri Sedlak          ....signature....
ZO OSE ECH                         Petr Gross           ....signature....
ZO OSE EPO                         Ludek Prokop         ....signature....
ZO OSE EPO - TDK                   Antonin Behro        ....signature....
ZO OSE ETE                         Frantisek Haman      ....signature....
ZO OSE EVD                         Martin Kopecky       ....signature....
ZO OSE EVD el. Dalesice            Miroslav Jilek       ....signature....
ZO OSE EVD el. Lipno               Jiri Lavicka         ....signature....
ZO OSE EVD el. Orlik               Ladislav Vrtal       ....signature....
ZO OSE EVD el. Dl.strane           Radek Mucha          ....signature....
ZO OSE HS                          Ivan Janda           ....signature....

Prague, January 29, 2004

                                       40
<PAGE>

                  List of Annexes to the Collective Bargaining
                Agreement of CEZ, a. s., for the years 2004-2006

Annex No. 1A        Scale of Wage Tariffs and Wage Tariff Ranges in Effect at
                    CEZ, a. s. as of January 1, 2004

Annex No. 1B        Scale of Wage Tariffs and Wage Tariff Ranges in Effect at
                    CEZ, a. s. as of July 1, 2004

Annex No. 2         Division of Financial Resources of CEZ, a. s. for Activities
                    of Employees' Representatives into Individual Localities

Annex No. 3A        Social Fund Budget for 2004

Annex No.3B         Budget of Financial Resources for Activities of Clubs of
                    Retirees - Former Employees

Annex No. 4         Principles for Provision of Contributions to Employees for
                    Supplementary Pension Insurance

Annex No. 5         Principles for Provision of Contributions to Employees for
                    Electricity Off-Take

Annex No. 6         Principles for Provision of Contributions to Employees for
                    Life Insurance

Annex No. 7         Measures for Mitigation of Impact of Organizational Changes
                    on Employees Laid-Off by Employer due to Organizational
                    Changes

Annex No. 8         Procedure for Crediting Period of Work in Electric Power
                    Industry

Annex No. 9         List of Work Remunerated by Extra Payments for Work
                    Environments that are Difficult and Harmful to Health

Annex No.10         List of Work Remunerated by Extra Payments for Work Under
                    Difficult Conditions

                                       41
<PAGE>

                                                                   Annex No. 1A

            Scale of Wage Tariffs and Wage Tariff Ranges in Effect at
                        CEZ, a. s. as of January 1, 2004

---------------------------------------------------------------
   Tariff      Wage tariff in        Wage tariff range in
   grade         CZK/month                CZK/month
---------------------------------------------------------------
     1             6 850                  0 - 3 425
---------------------------------------------------------------
     2             7 530                  0 - 3 765
---------------------------------------------------------------
     3             8 440                  0 - 4 220
---------------------------------------------------------------
     4             9 290                  0 - 4 645
---------------------------------------------------------------
     4a            10 250                 0 - 5 125
---------------------------------------------------------------
     5             11 100                 0 - 5 550
---------------------------------------------------------------
     5a            11 850                 0 - 5 925
---------------------------------------------------------------
     6             12 700                 0 - 6 350
---------------------------------------------------------------
     6a            13 560                 0 - 6 780
---------------------------------------------------------------
     7             14 410                 0 - 7 205
---------------------------------------------------------------
     7a            15 270                 0 - 7 635
---------------------------------------------------------------
     8             16 120                 0 - 8 060
---------------------------------------------------------------
     8a            16 970                 0 - 8 485
---------------------------------------------------------------
     9             17 830                 0 - 8 915
---------------------------------------------------------------
     9a            18 680                 0 - 9 340
---------------------------------------------------------------
     10            19 530                 0 - 9 765
---------------------------------------------------------------
    10a            20 280                 0 - 10 140
---------------------------------------------------------------
     11            21 140                 0 - 10 570
---------------------------------------------------------------
    11a            21 990                 0 - 10 995
---------------------------------------------------------------
     12            22 840                 0 - 11 420
---------------------------------------------------------------
    12a            23 690                 0 - 11 845
---------------------------------------------------------------

                                       42
<PAGE>

                                                                    Annex No. 1B

            Scale of Wage Tariffs and Wage Tariff Ranges in Effect at
                          CEZ a. s., as of July 1, 2004

--------------------------------------------------------------
   Tariff     Wage tariff in        Wage tariff range in
   grade         CZK/month               CZK/month
--------------------------------------------------------------
     1             6 920                 0 - 3 460
--------------------------------------------------------------
     2             7 610                 0 - 3 805
--------------------------------------------------------------
     3             8 520                 0 - 4 260
--------------------------------------------------------------
     4             9 380                 0 - 4 690
--------------------------------------------------------------
     4a           10 350                 0 - 5 175
--------------------------------------------------------------
     5            11 210                 0 - 5 605
--------------------------------------------------------------
     5a           11 970                 0 - 5 985
--------------------------------------------------------------
     6            12 830                 0 - 6 415
--------------------------------------------------------------
     6a           13 700                 0 - 6 850
--------------------------------------------------------------
     7            14 550                 0 - 7 275
--------------------------------------------------------------
     7a           15 420                 0 - 7 710
--------------------------------------------------------------
     8            16 280                 0 - 8 140
--------------------------------------------------------------
     8a           17 140                 0 - 8 570
--------------------------------------------------------------
     9            18 010                 0 - 9 005
--------------------------------------------------------------
     9a           18 870                 0 - 9 435
--------------------------------------------------------------
     10           19 730                 0 - 9 865
--------------------------------------------------------------
    10a           20 490                 0 - 10 245
--------------------------------------------------------------
     11           21 350                 0 - 10 675
--------------------------------------------------------------
    11a           22 210                 0 - 11 105
--------------------------------------------------------------
     12           23 070                 0 - 11 535
--------------------------------------------------------------
    12a           23 930                 0 - 11 965
--------------------------------------------------------------

                                       43
<PAGE>

                                                                    Annex No. 2

                  Division of Financial Resources of CEZ, a. s.
                  for Activities of Employees' Representatives
                           into Individual Localities

      -------------------------------------------------------------------------
                      Locality                      Financial resources in CZK
      -------------------------------------------------------------------------
              1         EME                                95 000-
      -------------------------------------------------------------------------
              2         ETI                                110 000-
      -------------------------------------------------------------------------
              3         EPO                                180 000-
      -------------------------------------------------------------------------
              4         EDE                                320 000
      -------------------------------------------------------------------------
              5         ECH                                175 000
      -------------------------------------------------------------------------
              6         ELE                                110 000
      -------------------------------------------------------------------------
              7         EPR                                160 000
      -------------------------------------------------------------------------
              8         ETU                                160 000
      -------------------------------------------------------------------------
              9         EPC                                 90 000
      -------------------------------------------------------------------------
             10         EHO                                100 000
      -------------------------------------------------------------------------
             11         EDU OOSP                           110 000
      -------------------------------------------------------------------------
             12         EDU OOZ                            100 000
      -------------------------------------------------------------------------
             13         ETE                                160 000
      -------------------------------------------------------------------------
             14         EVD                                 50 000
      -------------------------------------------------------------------------
             15         Prague Head Office                  80 000
      -------------------------------------------------------------------------
            Total                                        CZK 2 000 000
      -------------------------------------------------------------------------

                                       44
<PAGE>

                                                                   Annex No. 3A

                           Social Fund Budget for 2004
                 For 2004, the Employer shall set aside for use
                        from the Social Fund the amount
                               of CZK 75 000 000.

--------------------------------------------------------------------------------
   Purpose of use                                        Budgeted amount in CZK
--------------------------------------------------------------------------------
1. Meals for employees and former employees
   - Retirees                                                18 600 000
--------------------------------------------------------------------------------
2. Recreation and a recuperation (personal accounts)
   of employees                                              50 200 000
--------------------------------------------------------------------------------
3. Social  assistance  for  overcoming a difficult
   situation of an employee and social assistance
   for an employee's survivors                                2 000 000
--------------------------------------------------------------------------------
4. Activities of Retirees' Clubs                              1 000 000
--------------------------------------------------------------------------------
5. Compensation for blood donors                                200 000
--------------------------------------------------------------------------------
6. Accommodation for employees                                3 000 000
--------------------------------------------------------------------------------
   Total                                                     75 000 000
--------------------------------------------------------------------------------

                                       45
<PAGE>

                                                                   Annex No. 3B

                  Budget of Financial Resources for Activities
                     of Clubs of Retirees - Former Employees

------------------------------------------------------------------------------

     Locality        Number of retirees as at       Financial resources for
                         January  1, 2004            activities of retirees'
                                                         clubs (in CZK)
------------------------------------------------------------------------------
 1.     EVD                    168                          45 455
------------------------------------------------------------------------------
 2.     EME                    379                         102 543
------------------------------------------------------------------------------
 3.     ETI                    282                          76 299
------------------------------------------------------------------------------
 4.     EPO                    367                          99 297
------------------------------------------------------------------------------
 5.     EDE                    243                          65 747
------------------------------------------------------------------------------
 6.     ECH                    255                          68 993
------------------------------------------------------------------------------
 7.     ELE                    155                          41 937
------------------------------------------------------------------------------
 8.     ETU                    336                          90 909
------------------------------------------------------------------------------
 9.     EPC                    276                          74 675
------------------------------------------------------------------------------
 10.    EDU                    220                          59 524
------------------------------------------------------------------------------
 11.    ETE                    130                          35 173
------------------------------------------------------------------------------
 12.    EHO                    244                          66 017
------------------------------------------------------------------------------
 13.    EPR                    286                          77 381
------------------------------------------------------------------------------
 14.    Prague Head Office     355                          96 050
------------------------------------------------------------------------------
 Total                                                   1 000 000
------------------------------------------------------------------------------

                                       46
<PAGE>

                                                                    Annex No. 4

                  Principles for Provision of Contributions to
                 Employees for Supplementary Pension Insurance

1.   The contribution is provided to employees who have concluded a valid
     agreement on supplementary pension insurance with state contributions
     pursuant to Act No. 42/1994 Coll. as amended (the "Act"), with regular
     monthly payments from the employee's own funds of at least the minimum
     amount of CZK 100.

2.   The contribution is provided to employees who are in a full-time employment
     relationship (with the exception of employees not listed as employees -
     does not apply to employees who have been released long-term for the
     performance of the duties associated with a Labor Union post), following
     three continuous months of employment with the Employer.

3.   A precondition for the provision of the contribution is presentation to the
     Employer of a valid supplementary pension insurance agreement concluded
     between the employee and the applicable pension fund.

     The amount of the Employer's contribution in the applicable month is
     derived from the period of continuous employment at CEZ, a. s. as follows:

     period of continuous employment at CEZ, a. s.        amount of contribution

       3 months and up to 3 years                               CZK 500
       more than 3 years                                        CZK 600

     Such contribution may be increased by an additional CZK 666, provided that
     the employee requests that the contribution for electricity off-take be
     applied towards supplementary pension insurance. In such case, the amount
     of the contribution would be as follows:

     period of continuous employment at CEZ, a. s.        amount of contribution

       over 3 months and up to 3 years                          CZK 1 166
       more than 3 years                                        CZK 1 266

4.   The Employer may also provide an employee with a contribution for
     supplementary pension insurance from the Social Fund - the employee's
     personal account - in the event that the balance of the financial resources
     in the personal account is being drawn upon the termination of an
     employment relationship or if the balance in the personal account from the
     preceding year is being drawn, on the basis of a written request from the
     employee.

5.   Employees who in the course of their employment relationship with CEZ, a.
     s. terminated their agreement on supplementary pension insurance by notice
     or by agreement, and were paid the cancellation balance and subsequently
     concluded a new agreement on supplementary pension insurance, are not
     entitled to a contribution from the Employer.

6.   Employees who have become eligible for an old-age pension under the
     applicable pension scheme and who requested the payment of a lump-sum
     settlement from the fund, or the payment of lifetime pension or an old-age
     annuity, and subsequently concluded an agreement on supplementary pension
     insurance are not entitled to a contribution from the Employer for the
     newly-concluded supplementary pension insurance.

7.   If an employee interrupts a supplementary pension insurance scheme pursuant
     to Section 19 (2) of the Act and concludes another agreement on
     supplementary pension insurance pursuant to Section 19 (3) (b) of the Act,
     the Employer's contribution shall be provided in connection with the
     newly-concluded agreement on supplementary pension insurance.

                                       47
<PAGE>

8.   In the event that an employee whose contribution for electricity off-take
     is being applied towards supplementary pension insurance enters basic (or
     substitute) military or civilian service or a maternal or parental leave,
     then as of the date when such employee was taken off the list of employees
     the employee shall be provided with a contribution for electricity off-take
     in accordance with Heading 5 (III.) (2) and (3).

9.   The last contribution from the Employer is remitted to the pension fund
     together with the payment of wages for the month when an employee's
     employment relationship ended.

10.  An employee is obligated to notify the Employer of all facts that could
     have an impact on the provision of a contribution by the Employer, in
     particular: a termination or interruption of supplementary pension
     insurance, change of pension fund, payment of a cancellation balance or
     lump-sum settlement etc., within 8 days following the occurrence of such
     event.

11.  The Employer has the right to demand from the Employee the return of a
     contribution that was paid out without the employee being entitled to it if
     the employee failed to inform the Employer in time of the facts described
     in Clause 10. that have an impact on the provision of such contribution.

12.  The provision of a contribution for supplementary pension insurance is
     specified in the guideline document titled "Supplementary Pension Insurance
     for Employees".

                                       48
<PAGE>

                                                                   Annex No.  5

                  Principles for Provision of Contributions to
                       Employees for Electricity Off-Take
                            I. Amount of Contribution

1.   Employees and former employees who left the Employer for old-age retirement
     or early old-age retirement pursuant to Act No. 155/1995 Coll. ("Early
     Old-Age Retirement"), or full invalidity retirement, are provided with a
     contribution for electricity off-take under the conditions set forth below.

2.   The contribution for employees is set at CZK 553/month, i.e. as the
     financial equivalent of the consumption of 175 kWh of electricity valued at
     the price rate of D02 which is in effect as at July 1, 2001.

3.   For a former employee, the contribution amounts to CZK 4 000 (before taxes
     and insurance) annually.

4.   Pursuant to Clause 18.5.2., the contribution may be transferred, upon a
     written request from the employee, to the employee's supplementary pension
     insurance or life insurance. In such a case the amount of the contribution
     is CZK 666 / month.

                              II. Entitled Persons

1.   The contribution is provided to all employees in a full time employment
     relationship with the Employer. Newly-hired employees begin receiving the
     contribution after three months of employment. In the event that an
     employee's employment relationship arises in the course of a calendar
     month, the three month period begins on the first day of the calendar month
     following the month in which the employment relationship arose.

2.   The contribution is provided to all former employees who departed for
     old-age retirement or Early-Old-Age Retirement or full invalidity
     retirement from the Employer's organizational units, specifically: EVD,
     EME, EPO, ETI, EPR, ETU, EPC, ELE, ECH, EDE, EHO, EDU, ETE and the Prague
     Head Office.

3.   The contribution is also provided to former employees who departed for
     old-age retirement or Early-Old-Age Retirement or full invalidity
     retirement:

     a)   from the former head offices of the branches of the former state
          enterprise Ceske energeticke zavody [Czech Electric Power Works],
          specifically: EUV and EPK,

     b)   from the former head offices of the companies within the holding
          company of Ceske energeticke zavody, specifically: EUV, ESSM, EVC and
          EJM,

     c)   from the organizational units of the legal predecessors of the
          Employer that were wound up and transferred into certain of the
          Employer's current organizational units, specifically: EGI, EGT, from
          Ervenice Electric and from the former organizational unit called CEZ -
          DPS.

4.   The contribution is provided to former employees pursuant to Section II.
     (2) and (3) on condition that the employment relationship at the
     above-described entities lasted continuously for a period of at least 5
     years prior to the employee's departure for old-age retirement or
     Early-Old-Age Retirement or full invalidity retirement. In the event that
     an employee departed for full invalidity retirement, the condition
     stipulated in the foregoing sentence is not applied and the contribution is
     provided solely during the period when the employee is collecting the full
     invalidity pension.

5.   The contribution to former employees pursuant to Section II. (3) (a)
     through (c) is provided as follows:

     in the case of the units EUV, EPK, ESSM, EVC and EJM, via the Conventional
     Power Division
     in the case of the units EGI, EGT, DPS and Ervenice Electric, via the
     Prague Head Office

                                       49
<PAGE>

6.   The contribution is not provided to:

     a)   employees to whom the Employer provided a continuous unpaid leave of
          more than one month, in which case the contribution is not provided
          for the duration of such leave,

     b)   employees who were released to perform the duties associated with a
          public office.

                           III. Contribution Procedure

1.   The contribution is provided to employees in the form of financial
     performance, concurrently with the accounting of wages for individual
     calendar months of the year. The contribution is provided in the same
     manner to employees released for the performance of a Labor Union post on a
     full-time or part-time basis. An employee may request that the contribution
     be applied towards supplementary pension insurance or life insurance. An
     employee may request a change in the procedure for the payment of the
     contribution no more than once in a calendar year.

2.   To employees who left the Employer for old-age retirement, Early Old-Age
     Retirement or full invalidity retirement and employees performing basic
     (substitute) military or civilian service the contribution is provided
     twice annually, in March and October of the applicable calendar year, in
     the form of financial performance - a cashable certificate, delivered to
     the recipient by personal delivery. The contribution is accounted for
     together with the accounting of employees' wages for February and
     September.

3.   To women on maternal leave and employees drawing parental leave the
     contribution is provided three times a year, in March, August and October.
     The contribution is accounted for together with the accounting in respect
     of employees' wages for February, July and September.

4.   To an employee who sustained a work disability and is collecting benefits
     under health insurance for a period of an entire calendar month or longer
     and who does not have any income from the Employer that is included in the
     computation base for remittances of social security premiums the
     contribution for the applicable month shall be paid within the deadline for
     the payment of wages in the month when the work disability ends. In the
     event that the work disability ends on the last day of the calendar month,
     the contribution shall be paid to the employee within the deadline for the
     payment of wages for the following calendar month.

5.   Any disputes arising in connection with the awarding of the contribution
     shall be resolved with final effect by the Director of the Personnel
     Department at the Prague Head Office.

                              IV. Final Provisions

1.   In the event that an employee ceases to work for the Employer in the course
     of a calendar year due to departure for old-age retirement, Early Old-Age
     Retirement or full invalidity retirement, entry into basic (substitute)
     military or civilian service, departure for maternal leave or parental
     leave, then in the accounting of wages for the last month worked the
     employee shall be paid the contribution in respect of the months remaining
     until the end of the calendar year. Such categories of employees are
     transferred into the contribution regime pursuant to Section III. (2) and
     (3) as at January 1 of the following calendar year.

2.   When an employee returns after maternal leave or parental leave or basic
     (substitute) military or civilian service, the contribution is provided
     starting from the calendar month following the date the employee returned
     to work, in a monthly amount and in the manner described in Section III.
     (1).

3.   In the event that due to a termination of the employment relationship an
     employee does not work the entire calendar month, the employee is not
     entitled to a contribution for such month (with the exception of employees
     who departed for old-age retirement or Early Old-Age Retirement , under the
     conditions described above, and in cases where the employment relationship
     was terminated for organizational reasons).

                                       50
<PAGE>

4.   The provision of the contribution for electricity off-take is specified in
     the guideline document titled "Employer's Contribution for Electricity
     Off-Take".

                                       51
<PAGE>

                                                                    Annex No. 6

             Principles for Provision of Contributions to Employees
                               for Life Insurance

1.   In the event that an employee in a full-time employment relationship
     requests in writing pursuant to Clause 18.5.2. and Annex No. 5 (I)(4) that
     the contribution for electricity off-take be applied towards life
     insurance, such employee shall be provided with a contribution in the
     amount of CZK 666 monthly, after such employee has been in an employment
     relationship with the Employer for three months. If an employee's
     employment relationship arises in the course of a calendar month, the three
     month period shall begin to run on the first day of the calendar month
     following the month in which the employment relationship arose.

2.   The Employer may also provide an employee with a contribution for life
     insurance from the Social Fund - the employee's personal account - in the
     event that the balance of the financial resources in the personal account
     is being drawn upon the termination of an employment relationship or if the
     balance in the personal account from the preceding year is being drawn, on
     the basis of a written request from the employee

3.   The Employer's contribution is provided to employees who have concluded a
     valid agreement for private life insurance under the conditions stipulated
     in Sections 6 (9) (y) and 24 (2) (zo) of Act No. 586/1992 Coll., On Income
     Taxes, as amended, meaning that in such agreement it shall be stipulated
     that the employee will not become eligible for insurance proceeds until
     after 60 calendar months and concurrently not before attaining the age of
     60.

4.   A precondition for the provision of the Employer's contribution is the
     presentation of a valid agreement on private life insurance concluded
     between the employee (as the insured) and the applicable insurance company
     (bank) to the Employer.

5.   Employees who in the course of their employment relationship with CEZ, a.
     s. terminated the agreement on private life insurance towards which the
     Employer was contributing by notice or by agreement, and were paid the
     cancellation balance and subsequently concluded a new life insurance
     agreement are not entitled to a contribution from the Employer.

6.   The Employer shall provide the contribution to employees who met the
     condition for the payment of the capital value upon the maturity of the
     insurance policy, were paid a lump-sum settlement in accordance with the
     terms and conditions of insurance and subsequently concluded a new
     agreement on private life insurance.

7.   The last contribution from the Employer is remitted to the insurance
     company (bank) together with the payment of wages for the month when the
     employee's employment relationship terminated.

8.   An employee is obligated to notify the Employer of all facts that could
     have an impact on the provision of the contribution by the Employer, in
     particular: a termination or interruption of private life insurance, the
     payment of a cancellation balance or capital value upon the maturity of the
     insurance policy etc., within 8 days following the occurrence of such
     event.

9.   The Employer has the right to demand from the Employee the return of a
     contribution that was paid out without the employee being entitled to it if
     the employee failed to inform the Employer in time of the facts described
     in Clause 10. that have an impact on the provision of such contribution.

10.  The provision of a contribution for life insurance pursuant to Clause
     18.5.2.is specified in the guideline document titled "Employer's
     Contribution Towards Electricity Off-Take".

                                       52
<PAGE>

                                                                    Annex No. 7

                      Measures for Mitigation of Impact of
            Organizational Changes on Employees Laid-Off by Employer
                          due to Organizational Changes

The Employer shall negotiate with the applicable Labor Union body measures for
the mitigation of the impact of contemplated organizational changes that result
in lay-offs of employees, as a rule three months before such decision enters
into effect. The Employer shall inform employees of such plan and shall
implement the following measures:

                I. Measures for finding new work for an employee

1.   Offer of an available job at CEZ, a. s.

     a)   Prior the delivery of a termination notice, an employee who is being
          released from an employment relationship shall be demonstrably offered
          available jobs at CEZ, a. s., specifically

     o    at the place stipulated as the place for the performance of the
          employee's work or at the place where the employee lives,

     o    at other localities of the Employer if the employee so requests.

     b)   An employee who is being laid off for organizational reasons and whose
          termination notice period is running shall be demonstrably offered
          available jobs for which the employee meets the preconditions
          stipulated in Section 46 (2) of the Labor Code, provided the Employee
          so requests.

2.   Information on an available job, in a basic scope:

     o    title (profession or vocation),

     o    required qualifications,

     o    tariff grade,

     o    required commencement date

     shall be publicized in an organizational unit prior to being offered to an
     outside job-seeker or the Employment Office, in compliance with the
     conditions set forth in Section 19 (2) of Act No. 1/1991 Coll., On
     Employment, as amended.

3.   Information expanded to include:

     o    accommodation opportunities (apartment, housing facility),

     o    name and telephone number of an employee of the personnel department
          where the job-seeker should report

     is provided by organizational units in a region to each other or, as the
     case may be, organizational units with the same professional composition
     within the framework of the joint stock company.

4.   Information on available jobs is freely accessible on the Employer's
     intranet. During the staffing of available jobs the Employer shall respect
     the principle of making maximum use and efficient use of the company's
     internal human resources.

                                       53
<PAGE>

5.   If an employee is interested in an available job, the further steps to be
     implemented are implemented by personnel departments, including contact
     between organizational units and ensuring the retraining of employees, if
     necessary.

6.   The staffing of a job by an employee of CEZ, a. s. from another
     organizational unit, where the employee commenced work the day after he or
     she ended work at the previous organizational unit, is deemed to be a
     continuous employment relationship at CEZ, a. s., it is the transfer of an
     employee. From this point of view the employee meets the conditions for
     being awarded holiday wages, Christmas wages, a contribution for
     supplementary pension insurance and a contribution for electricity
     off-take.

7.   Personnel departments shall cooperate with Employment Offices, and any
     other institutions that mediate work and other companies active in the
     applicable region with the objective of finding suitable work for the
     affected employee, including the employee's retraining if necessary. If the
     Employee is interested, the Employer shall arrange retraining for the
     employee and shall conclude an agreement on re-training with the employee.

           II. Measures for mitigating impacts on a laid-off employee

     In the event that it is not possible to find a suitable job in accordance
     with Clause I. and the employee is laid-off, the following measures shall
     be implemented:

1.   the employee shall be paid severance pay in an amount and under the
     conditions stipulated in the Labor Code and this Collective Bargaining
     Agreement, provided the employee shall have an opportunity to conclude an
     agreement on an earlier termination of the employment relationship, unless
     serious operating reasons preclude this,

2.   the employee shall be afforded the opportunity to use a company apartment
     for an additional 3 years following the termination of the employment
     relationship,

3.   no changes shall be made to the employee's agreed contractual terms and
     conditions for the repayment of an interest-free loan; on the basis of an
     agreement on the recognition of a debt, the laid-off employee shall be
     afforded the opportunity to repay the loan in accordance with the
     originally-stipulated terms and conditions (amount of installments and
     repayment term),

4.   the Employer shall enable the employee to take advantage of company meals
     until the employment relationship terminates,

5.   the employee shall be offered an opportunity to have re-training arranged
     and paid-for, up to the amount of CZK 20 000.

                                       54
<PAGE>

                                                                    Annex No. 8

                     Procedure for Crediting Period of Work
                           in Electric Power Industry

1.   For the determination of the amounts of bonuses for lifetime anniversaries
     pursuant to Section 28 and severance pay pursuant to Section 29 herein, the
     following periods are credited towards the period of practice in the
     electric power industry:

     1.1. the duration of an employment relationship with the Employer,
          including periods of basic (substitute) military or civilian service
          and further periods of maternal or parental leave and additional
          maternal and parental leave provided up to the end of the year 2000
          pursuant to Section 157 (2) of the Labor Code. i.e. until the child
          attains the age of 3 years - if the employment relationship lasted
          throughout such period,

     1.2. the duration of employment at the Employer's legal predecessors (set
          the list below),

     1.3. the period of performance of a public office or a post at a Labor
          Union body in the electric power industry for which the employee was
          released.

2.   The following periods are not credited towards the period of practice in
     the electric power industry:

     2.1. unpaid leave provided at the employee's request for a period in excess
          of one month, with the exception of an unpaid leave provided to an
          employee by the Employer for looking after a child in connection with
          Act No. 117 / 1995 Coll., On State Social Support, as amended,

     2.2. period of daytime studies, unless the employee was in an employment
          relationship with the Employer or its legal predecessors during such
          period,

     2.3. period of apprenticeship, unless the apprentice was in an employment
          relationship with the Employer or its legal predecessors during such
          period,

     2.4. period of jail-time and period of serving a jail sentence, with the
          exception of cases where criminal prosecution proceedings against the
          employee are subsequently stopped or if the employee is subsequently
          found not guilty.

3.   The list set forth below is in effect as of January 1, 2004, provided that
     the crediting procedure for crediting length of practice in effect up to
     such date shall remain unchanged.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Employer                                             Credit               Note
-----------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                  <C>
GR CEZ [General Directorate of CEZ]                  until 31/12/89
-----------------------------------------------------------------------------------------------------------------
RSP CEZ [Directorate of CEZ state enterprise]        1/1/89 - 30/6/90     successor of GR CEZ
-----------------------------------------------------------------------------------------------------------------
CEZ-HS [CEZ - Admin. Headquarters]                   1/7/90 - today       successor  of RSP CEZ
-----------------------------------------------------------------------------------------------------------------
 Victorious February Electric (CEZ-EUV)              until 30/11/90
-----------------------------------------------------------------------------------------------------------------
Pocerady Electric (CEZ-EPC)                          still                until 30/11/1990 a plant of CEZ-EUV,
                                                                          thereafter a separate org. unit
-----------------------------------------------------------------------------------------------------------------
Ledvice Electric (CEZ-ELE)                           still                          "
-----------------------------------------------------------------------------------------------------------------
SSM Electric (CEZ-ESSM)                              until 30/4/90
-----------------------------------------------------------------------------------------------------------------
Podkrusnohorske Electric (CEZ-EPK)                   1/5/90 -31/12/92     successor of CEZ-ESSM
-----------------------------------------------------------------------------------------------------------------
Tusimice Electric 1 (ETU 1)                                               until 30/4/90, plants of CEZ-ESSM,
Tusimice Electric 2 (ETU 2)                          until present        thereafter until 31/12/92 branch
Prunerov Electric 1 (EPRU 1)                                              plants of CEZ-EPK, thereafter until
Prunerov Electric 2 (EPRU 2)                                              now ETU 1 and ETU 2 are parts of
                                                                          CEZ-ETU and EPRU and EPRU 2 are parts
                                                                          of CEZ-EPRU
-----------------------------------------------------------------------------------------------------------------
</TABLE>

                                       55
<PAGE>

<TABLE>
<S>                                                  <C>                   <C>
CEZ- Tusimice Electric (CEZ-ETU)                     1/1/93 - until       division between CEZ-EPK
                                                     present
-----------------------------------------------------------------------------------------------------------------
CEZ-Elektrarny Prunerov (CEZ-EPRU)                   1/1/93 - until                 "
                                                     present
-----------------------------------------------------------------------------------------------------------------
Melnik Electric (CEZ-EME)                            until present
-----------------------------------------------------------------------------------------------------------------
Tisova Electric (CEZ-ETI)                            until present
-----------------------------------------------------------------------------------------------------------------
East Bohemia Electric (CEZ-EVC)                      until 30/9/90
-----------------------------------------------------------------------------------------------------------------
Chvaletice Electric (CEZ-ECH)                        until present        until 30/9/90 was plant of CEZ-EVC,
                                                                          thereafter separate branch
-----------------------------------------------------------------------------------------------------------------
Opatovice Electric (CEZ-EOP)                         until 30/4/92        until 30/9/90 was plant of CEZ-EVC,
                                                                          thereafter separate branch
-----------------------------------------------------------------------------------------------------------------
Porici Electric (CEZ-EPO)                            still                until 30/9/90 was plant of CEZ-EVC,
                                                                          thereafter separate branch
-----------------------------------------------------------------------------------------------------------------
Nachod Heat Plant (TNA)                              until 31/3/2003      until 30/9/90 was plant of CEZ-EVC,
                                                                          thereafter part of the branch CEZ-EPO
-----------------------------------------------------------------------------------------------------------------
Dvur Kralove Heat Plant (TDK)                        still                          "
-----------------------------------------------------------------------------------------------------------------
Pardubice Heat Plant (TPA)                           until 30/4/92
-----------------------------------------------------------------------------------------------------------------
Ostravsko-karvinske Electric (CEZ-OKE)               until 30/4/92
-----------------------------------------------------------------------------------------------------------------
Detmarovice Electric (CEZ-EDE)                       still                until 30/6/90 was plant of CEZ-OKE,
                                                                          thereafter was separate branch
-----------------------------------------------------------------------------------------------------------------
Ervenice Electric                                    until 31/3/79
-----------------------------------------------------------------------------------------------------------------
Trebovice Electric (ETB)                             until 30/4/92        plant of CEZ-OKE
-----------------------------------------------------------------------------------------------------------------
Victorious February Electric (EVU)                   until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
IX. Communist Congress Electric (EKV)                until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
Olomouc Heat Plant (TOL)                             until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
Prerov Heat Plant (TPR)                              until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
Heat Distribution Plant (RT)                         until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
Regional Centralized Maintenance Facility (OCZU)     until 30/4/92        plant of CEZ-OKE
Agloporit Plant                                      until 30/6/95        until 30/4/92 was plant of CEZ-OKE,
                                                                          thereafter part of CEZ-EDE
-----------------------------------------------------------------------------------------------------------------
Sucha Electric                                       until 30/4/92
-----------------------------------------------------------------------------------------------------------------
Southern Moravia Electric (CEZ-JME)                  until 30/4/92
-----------------------------------------------------------------------------------------------------------------
Hodonin Electric (CEZ-EHO)                           still                until 30/ 11/ 90 was plant of
                                                                          CEZ-JME, thereafter separate branch
-----------------------------------------------------------------------------------------------------------------
December Strike Electric Oslavany (EPSO)             until 30/4/92        plant of CEZ-OKE
-----------------------------------------------------------------------------------------------------------------
Brno Heat Plant (TBR)                                until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
Otrokovice Electric (TOT)                            until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
North Bohemia Heat Plant (CEZ-SCT)                   until 31/12/90
-----------------------------------------------------------------------------------------------------------------
Komorany Electric (EKY)                              until 31/12/90       plant of CEZ-SCT
-----------------------------------------------------------------------------------------------------------------
Trmice Electric (TTR)                                until 31/12/90                 "
-----------------------------------------------------------------------------------------------------------------
Liberec Heat Plant (TLI)                             until 31/12.90                 "
-----------------------------------------------------------------------------------------------------------------
Teplice Heat Plant (TTP)                             until 31/12/90                 "
-----------------------------------------------------------------------------------------------------------------
Heat Distribution Plant                              until 31/12/90                 "
-----------------------------------------------------------------------------------------------------------------
Prague Heat Plant (CEZ-EPR)                          until 30/4/92
-----------------------------------------------------------------------------------------------------------------
Holesovice Electric (EHOL)                           until 30/4/92        plant of CEZ-EPR
-----------------------------------------------------------------------------------------------------------------
Malesice Heat Plant (TMA)                            until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
Kolin Electric (EKO)                                 until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
Veleslavin Heat Plant (TVE)                          until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
CEZ DPS                                              until 1/1/2000
-----------------------------------------------------------------------------------------------------------------
SED                                                  until 31/3/94
-----------------------------------------------------------------------------------------------------------------
CDO                                                  until 1/1/1996
-----------------------------------------------------------------------------------------------------------------
Incinerator Plant (ZVS)                              until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
Juliska Heat Plant (ZVT)                             until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
City-South Plant (ZJM)                               until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
Production and Assembly Plant (VMZ)                  until 30/4/92                  "
</TABLE>

                                       56
<PAGE>
<TABLE>
<S>                                                 <C>                             <C>
-----------------------------------------------------------------------------------------------------------------
Heat Distribution Plant (ZRT)                        until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
Services Plant (ZSL)                                 until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
Dukovany Nuclear Electric (CEZ-EDU)                  still
-----------------------------------------------------------------------------------------------------------------
Trebenice Hydro-electric (CEZ-EVD)                   still               presently Stechovice Hydro-electric
-----------------------------------------------------------------------------------------------------------------
Dalesice Electric (CEZ-EDA)                          still               from 30/4/92 was part of CEZ-EVD,
                                                                         thereafter part of CEZ-EVD branch
-----------------------------------------------------------------------------------------------------------------
Lipno Electric (ELI)                                 still                          "
-----------------------------------------------------------------------------------------------------------------
Stechovice Electric (EST)                            still                          "
-----------------------------------------------------------------------------------------------------------------
Orlik Electric (EOR)                                 still                          "
-----------------------------------------------------------------------------------------------------------------
Strane Electric                                      still               from 1/5/93 was part of CEZ-EVD branch
-----------------------------------------------------------------------------------------------------------------
Slapy Electric                                       still               from 1/5/1992 was part of CEZ-EVD branch
-----------------------------------------------------------------------------------------------------------------
Kamyk Electric                                       still                               "
-----------------------------------------------------------------------------------------------------------------
Vrane Electric                                       still                               "
-----------------------------------------------------------------------------------------------------------------
Stvanice Electric                                    still                               "
-----------------------------------------------------------------------------------------------------------------
Hnevkovice Electric                                  still                               "
-----------------------------------------------------------------------------------------------------------------
Korensko Electric                                    still                               "
-----------------------------------------------------------------------------------------------------------------
Southern Bohemia  Electric (CEZ-JCE)                 until 30/6/90
-----------------------------------------------------------------------------------------------------------------
Ceske Budejovice Heat Plant (TCB)                    until 30/6/90       plant of  CEZ-JCE
-----------------------------------------------------------------------------------------------------------------
Strakonice Heat Plant (TST)                          until 30/6/90                  "
-----------------------------------------------------------------------------------------------------------------
Mydlovary Heat Plant (TMY)                           until 30/6/90                  "
-----------------------------------------------------------------------------------------------------------------
Tabor Heat Plant (TTA)                               until 30/6/90                  "
-----------------------------------------------------------------------------------------------------------------
Pisek Heat Plant (TPI)                               until 30/6/90                  "
-----------------------------------------------------------------------------------------------------------------
Western Bohemia Electric (CEZ-ZCE)                   until 30/6/90
-----------------------------------------------------------------------------------------------------------------
Plzen Heat Plant (TPL)                               until 30/6/90       plant of CEZ-ZCE
-----------------------------------------------------------------------------------------------------------------
Karlovy Vary Heat Plant (TKV)                        until 30/6/90                  "
-----------------------------------------------------------------------------------------------------------------
Ostrov n. Ohri Heat Plant (TOO)                      until 30/6/90                  "
-----------------------------------------------------------------------------------------------------------------
Prague Electric (CEZ-PRE)                            until 30/6/90
-----------------------------------------------------------------------------------------------------------------
Central Bohemia Electric                             until 30/6/90
-----------------------------------------------------------------------------------------------------------------
Northern Bohemia Electric                            until 31/12/90
-----------------------------------------------------------------------------------------------------------------
Northern Bohemia Electric Works (CEZ-SCE)            until 30/6/90
-----------------------------------------------------------------------------------------------------------------
Eastern Bohemia Electric (CEZ-VCE)                   until 30/6/90
-----------------------------------------------------------------------------------------------------------------
Southern Bohemia Electric (CEZ-EJM)                  until 30/6/90
-----------------------------------------------------------------------------------------------------------------
Southern Bohemia Electric Works (CEZ-SME)            until 30/6/90
-----------------------------------------------------------------------------------------------------------------
Repair Facility Teplice (CEZ-OZE)                    until 31/3/90
-----------------------------------------------------------------------------------------------------------------
Power Equipment Assembly Plant Liberec (EGM)         until 30/4/92       until 31/3/90 was plant of CEZ-OZE,
                                                                         thereafter separate branch
-----------------------------------------------------------------------------------------------------------------
Engineering Plant Teplice (OZE)                      until 30/4/92                  "
-----------------------------------------------------------------------------------------------------------------
Engineering Works Brno                               until 30/4/92
-----------------------------------------------------------------------------------------------------------------
Engineering Works Pardubice (CEZ-ESPA)               until 30/4/92       until 30/6/91 was plant of ES Brno,
                                                                         thereafter separate branch
-----------------------------------------------------------------------------------------------------------------
Engineering Works Velke Mezirici                     until 30/4/92       until 30/11/90 was plant of ES Brno,
                                                                         thereafter separate branch
-----------------------------------------------------------------------------------------------------------------
Machinery Plant (CEZ-EGO)                            until 31/12/90
-----------------------------------------------------------------------------------------------------------------
Power Transmission Facility (CEZ-EGV)                until 30/4/92
-----------------------------------------------------------------------------------------------------------------
EGV - Prague Headquarters                            until 30/4/92
-----------------------------------------------------------------------------------------------------------------
EGV - Ceske Budejovice Plant                         until 30/6/90
-----------------------------------------------------------------------------------------------------------------
EGV - Horni Pocernice Plant                          until 30/4/92
-----------------------------------------------------------------------------------------------------------------
EGV - Prague Construction Facility                   until 30/4/92
-----------------------------------------------------------------------------------------------------------------
CEZ-ORGREZ                                           until 30/4/92
-----------------------------------------------------------------------------------------------------------------
Power Technology Plant (CEZ-EGT)                     until 31/12/92
-----------------------------------------------------------------------------------------------------------------
Asset Administration Prague (CEZ-SMP)                from 1/1/93         successor of CEZ-EGT
-----------------------------------------------------------------------------------------------------------------
Pardubice Educational Institute                      until 30/6/93
-----------------------------------------------------------------------------------------------------------------
Otrokovice Heat Plant                                until 31/12/90      part of CEZ-JME
</TABLE>

                                       57
<PAGE>

<TABLE>
<S>                                                  <C>                 <C>
-----------------------------------------------------------------------------------------------------------------
Karvina Heat Plant                                   until 31/12/90      part of CEZ - OKE
-----------------------------------------------------------------------------------------------------------------
Energoprojekt [Energy Engineering]                   until 31/12/2003
-----------------------------------------------------------------------------------------------------------------
Head Office for Power Plants Under Construction                          predecessor of Energoinvest
-----------------------------------------------------------------------------------------------------------------
Construction of Electric Power Plants                                    predecessor of Energoinvest
-----------------------------------------------------------------------------------------------------------------
Energoinvest [Energy Plant Development]              until 31/12/1983    part of CEZ
-----------------------------------------------------------------------------------------------------------------
Central Electric Power Administration                until 30/6/ 1965    predecessor of CEZ
-----------------------------------------------------------------------------------------------------------------
Ministry of Energy and Water Management              until 31/12/1962    predecessor of CEZ
-----------------------------------------------------------------------------------------------------------------
Temelin Nuclear Power Plant                          still
-----------------------------------------------------------------------------------------------------------------
</TABLE>

                                       58
<PAGE>

                                                                    Annex No. 9

                 List of Work Remunerated by Extra Payments for
                    Work Environments that are Difficult and
                                Harmful to Health

The list of examples of Work Remunerated by Extra Payments for Work Environments
that are Difficult and Harmful to Health (the "List") is binding for all of the
employer's branches with regard to the provision of extra payments for work in
environments that are difficult and harmful to health. Principles for evaluation
for the purposes of remuneration of work conditions that are difficult and
harmful to health

1.   Specification of a work environment that is difficult and harmful to
     health. Extra pay applies to work in a work environment where:

     a)   Harmful chemical substances that cause chronic poisoning, where their
          concentration in the air exceeds the highest permissible concentration
          for a work environment (hereinafter "HPC-E") or where the simultaneous
          effects of several harmful substances cause chronic poisoning,
          assuming their effects are additive, if the sum total of the average
          concentrations of individual substances and their average HPC-E is
          higher than that indicated by the formula: sum total = (average
          concentration of harmful substances / average HPC-E) > 1 and the
          harmful substances cause acute poisoning with a risk of death within a
          short period of time (for example, carbon monoxide, hydrogen cyanide,
          hydrogen sulfide), if there is a significant risk that such substances
          could escape in concentrations exceeding HPC-E limits. (Directive No.
          46/1978 Coll. of the Ministry of Health of the Czechoslovak Republic -
          Office of the Chief Sanitarian of the Czechoslovak Republic, Hygienic
          Regulations, On Hygienic Requirements for Work Environments, as
          amended.).

     b)   Concentration of dust (aerosols without toxic effects) with a
          fibrinogenic effect in the air that exceeds average HPC-E. (Directive
          No. 46/1978 Coll. of the Ministry of Health of the Czechoslovak
          Republic - Office of the Chief Sanitarian of the Czechoslovak
          Republic, Hygienic Regulations, On Hygienic Requirements for Work
          Environments, as amended.).

     c)   Values of vibration acceleration in dB or effective values of
          vibration acceleration in m/s2 exceed the values permissible for a
          full-shift. (Directive No. 13/1977 Coll. of the Ministry of Health of
          the Czechoslovak Republic, On Protection of Health Against Unfavorable
          Effects of Noise and Vibration - Annex - Highest Permissible Values
          for Noise and Vibration, Directive No. 53/1980 Coll. of the Ministry
          of Health of the Czechoslovak Republic - Office of the Chief
          Sanitarian of the Czechoslovak Republic, Hygienic Regulations, which
          stipulated procedures for the measurement and evaluation of noise and
          vibration - registered in part 32/1980 Coll.).

     d)   Ionizing radiation exceeds 3/10 of the highest permissible dosage for
          employees. (Decree No. 184/1997 Coll. of SUJB, On Requirements for
          Ensuring Protection Against Radiation.).

     e)   Infrared radiation (heat) causes heat cataracts or micro-climactic
          conditions so unfavorable that the resulting temperature measured by a
          ball thermometer exceeds the maximum TgA value and the working regime
          must be adjusted so that such exposure is partially compensated for.
          (Decree No. 408/1990 Coll. of the Ministry of Health of the Czech
          Republic, On Protection of Health Against Unfavorable Effects of
          Electromagnetic Radiation.).

     f)   Manner in which are technically secured lasers of Class IIIb and
          higher does not rule the possibility of being hit by a direct or
          reflected beam. (Directive No. 61/1982 Coll. of the Ministry of Health
          of the Czechoslovak Republic - Office of the Chief

                                       59
<PAGE>

          Sanitarian of the Czechoslovak Republic, Hygienic Regulations, On
          Hygienic Principles for Work with Lasers.).

     g)   Work with known chemical carcinogens or in facilities where there is a
          risk of chemical carcinogens. (Directive No. 64/1984 Coll. of the
          Ministry of Health of the Czechoslovak Republic - Office of the Chief
          Sanitarian of the Czechoslovak Republic, Hygienic Regulations, On
          Hygienic Principles for Work with Chemical Carcinogens, as amended.).

     h)   Work in pressurized air (hyperbaric chambers, caissons).

     1.   During evaluations of specific cases of work environments that are
          difficult and harmful to health, consideration is given to the nature
          of the work performed and the work procedures used, particularly when
          the intensity of the harmful effects fluctuates or when equipment or
          remote controls etc. are used, and to the seriousness of the potential
          illnesses or health damage, particularly in the case of harmful
          substances of a chemical nature, infections, allergens and so forth
          with which there is not a sufficient amount of experience in practice
          (new risks or newly-discovered effects).

2.   Work environments that are difficult and harmful to health are evaluated on
     the assumption that all technical and organizational measures that are
     technically feasible under the current state of affairs were implemented;
     evaluation is performed of such degree of harmful impacts as is usual
     during the performance of the work being evaluated, infrequent deviations
     and emergency situations are not taken into account.

3.   A work environment that is difficult and harmful to health is also deemed
     to be a work environment delineated by selected typical examples of
     production facilities and activities that are organized in accordance with
     the ranking of individual effects set forth in Exhibit No. 2 to Government
     Decree No. 333/1993 Coll., On the Determination of Minimum Wage Tariffs and
     Extra Wages for Work in a Work Environment that is Difficult and Harmful to
     Health, as amended.

4.   Extra payments for work in a work environment that is difficult and harmful
     to health in CZK per hour and a delineation of a work environment that is
     difficult and harmful to health on the basis of work activities performed
     at the Employer's:

<TABLE>
<CAPTION>
                                                                                                Extra pay       Extra pay
 No.   Activity                                                          Harmful effect         in CZK/hr.      in CZK/hr.
                                                                                                  as of            as of
                                                                                                 1/1/2004         1/7/2004
--------------------------------------------------------------------------------------------------------------------------
       Harmful chemical substances
---------------------------------------------------------------------------------------------------------------------------
<S>    <C>                                                               <C>                        <C>           <C>
  1.   4.1.18.*) Distillation and operational cleaning of mercury.      mercury and its             9.20          9.30
                                                                        compounds
---------------------------------------------------------------------------------------------------------------------------
  2.   4.1.21. Filling tonometers, thermometers and other measuring     mercury and its             9.20          9.30
       devices with mercury, with the concurrent re-melting of glass    compounds
       or closure of a metal capillary.
---------------------------------------------------------------------------------------------------------------------------
  3.   4.1.36. Handling liquid chloride, drawing from cisterns into     chloride and hydrogen       8.20          8.30
       receptacles; servicing chlorine management equipment.            chloride
---------------------------------------------------------------------------------------------------------------------------
  4.   4.1.42. Servicing discharger and collecting cinder and  ash in   carbon monoxide, smoke      9.20          9.30
       enclosed spaces under boilers.                                   gases
---------------------------------------------------------------------------------------------------------------------------
  5.   4.1.48. Industrial chimney sweeping work (cleaning canals,       carbon monoxide, smoke      9.20          9.30
       chimneys etc.).                                                  gases
---------------------------------------------------------------------------------------------------------------------------
  6.   4.1.86. Cleaning production equipment, tanks, vessels,           work in enclosed            9.20          9.30
       dispensers, railway cisterns and vehicle cisterns, if the        spaces (vessels):
       employee works inside.
---------------------------------------------------------------------------------------------------------------------------
  7.   4.1.109. Welding large preheated products in enclosed preheated  special welding work        8.20          8.30
       vessels with an argon arc welder.
---------------------------------------------------------------------------------------------------------------------------
  8.   4.1.110. Electric arc welding in enclosed spaces.                special welding work        8.20          8.30
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       60
<PAGE>

<TABLE>
<S>     <C>                                                              <C>                       <C>            <C>
       Dust
---------------------------------------------------------------------------------------------------------------------------
  9.   4.2.5. Sandblasting in sandblasting machines or by hand with     dust containing             8.20          8.30
       controls outside the sandblasting area.                          silicon oxide
---------------------------------------------------------------------------------------------------------------------------
 10.   4.2.13.Masonry work on ganister linings, chrome-magnesite        dust containing             10.0         10.10
       linings inside furnaces, including accessories, when cold.       silicon oxide
---------------------------------------------------------------------------------------------------------------------------
 11.   4.2.14. Masonry work on fireclay linings inside all              dust containing             10.0         10.10
       metallurgical furnaces, including accessories such as various    silicon oxide
       heaters, piping, closures, covers and channels in the area of
       furnaces and their accessories, when cold.
---------------------------------------------------------------------------------------------------------------------------
 12.   4.2.15. Processing free glass wool, slag wool and basalt wool    dust containing             8.20          8.30
       in enclosed spaces.                                              silicon oxide
---------------------------------------------------------------------------------------------------------------------------
       Vibrations
---------------------------------------------------------------------------------------------------------------------------
 13.   4.3.1. Removing furnace stone deposits with pneumatic hammers    vibrations                  10.0         10.10
       and grinders inside furnaces.
---------------------------------------------------------------------------------------------------------------------------
 14.   4.3.3. Tearing down the lining of industrial furnaces and other  vibrations                  10.0         10.10
       heat sources made of refractory materials (fireclay,
       chrome-magnesite and so forth) with the use of pneumatic tools.
---------------------------------------------------------------------------------------------------------------------------
       Ionizing radiation
---------------------------------------------------------------------------------------------------------------------------
 15.   4.4.1. Flaw detection measurement with the use of mobile flaw    work with enclosed          8.20          8.30
       detection instruments.                                           radioactive emitters
                                                                        and under risk of
                                                                        x-ray radiation:
---------------------------------------------------------------------------------------------------------------------------
 16.   4.4.2. Work with enclosed sources of radiation with an activity  work with enclosed          8.20          8.30
       level of 1 mCi or more.                                          radioactive emitters
                                                                        and under risk of
                                                                        x-ray radiation:
---------------------------------------------------------------------------------------------------------------------------
 17.   4.4.3. Inspection of castings and welds on pressure vessels and  work with enclosed          8.20          8.30
       piping on mobile workplaces with x-ray and gamma radiation.      radioactive emitters
                                                                        and under risk of
                                                                        x-ray radiation:
---------------------------------------------------------------------------------------------------------------------------
 18.   4.4.8. Testing for defects in equipment and structures without   work with enclosed          10.0         10.10
       disrupting their integrity (flaw detection, non-destructive      radioactive emitters
       testing) at mobile (temporary) workplaces with enclosed          and under risk of
       radioactive emitters (gamma ray flaw detection) or portable      x-ray radiation:
       mobile x-ray devices, for example in geological exploration
       during gamma ray logging and so forth.
---------------------------------------------------------------------------------------------------------------------------
 19.   4.4.10. Research and development work, including dosage          work with enclosed          10.0         10.10
       measurement on equipment and at workplaces in active or          radioactive emitters
       non-active sections of a monitored area of a nuclear reactor     and under risk of
       with an output in excess of zero.                                x-ray radiation:
---------------------------------------------------------------------------------------------------------------------------
 20.   4.4.11. Research and development work with radioactive nuclide   work with open              12.50        12.60
       preparations that exceed Category I. activities, i.e.            radioactive emitters
       activities requiring a permit for work on a Category II.         (radioactive nuclides)
       workplace. This also applies to janitorial work and maintenance
       at such workplaces, treatment of waste and handling such waste.
---------------------------------------------------------------------------------------------------------------------------
 21.   4.4.12. Work with open radioactive emitters at workplaces of     work with open              12.50        12.60
       Category II. or III..                                            radioactive emitters
                                                                        (radio nuclides)
---------------------------------------------------------------------------------------------------------------------------
 22.   4.4.13. Research and operational work with radioactive isotopes  work with open              12.50        12.60
       (radioactive nuclides) that exceed Category II. activities,      radioactive emitters
       i.e. activities requiring a permit for work on a Category III.   (radioactive nuclides)
       workplace. This also applies to janitorial work and maintenance
       at such workplaces, treatment of waste and handling such waste.
---------------------------------------------------------------------------------------------------------------------------
 23.   4.4.16. Handling and distribution of radioactive substances,     work with open              12.50        12.60
       inspection of closure-quality of emitters, disassembly of        radioactive emitters
       larger emitters, collection of radioactive waste and             (radioactive nuclides)
       decontamination of
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       61
<PAGE>

<TABLE>
<S>    <C>                                                              <C>                         <C>          <C>
       radiation and work (production) premises of
       workplaces of Category II. or III..
---------------------------------------------------------------------------------------------------------------------------
 24.   4.4.17. Transportation of radioactive waste and spent nuclear    work with open              12.50        12.60
       fuel in transport cases, including handling during loading and   radioactive emitters
       stacking.                                                        (radio nuclides)
---------------------------------------------------------------------------------------------------------------------------
 25.   4.4.19. Control, servicing and maintenance, including            work with open              12.50        12.60
       decontamination work on equipment and workplaces in the active   radioactive emitters
       or non-active sections of a monitored area of a reactor with a   (radioactive nuclides)
       power output of more than zero.
---------------------------------------------------------------------------------------------------------------------------
 26.   4.4.21. Servicing equipment for the central processing of        work with open              12.50        12.60
       solid, liquid and gaseous radioactive waste - open emitters by   radioactive emitters
       incineration, compacting, separation, densification,             (radioactive nuclides)
       concentration and so forth, with treatment for their final
       deposition or further processing.
---------------------------------------------------------------------------------------------------------------------------
 27.   4.4.22. Handling radioactive waste on premises of central        work with open              12.50        12.60
       dumps.                                                           radioactive emitters
                                                                        (radioactive nuclides)
---------------------------------------------------------------------------------------------------------------------------
       Infrared radiation - heat
---------------------------------------------------------------------------------------------------------------------------
 28.   4.6.6. Operation of  dischargers and collection of cinder and    Infrared radiation -        8.20          8.30
       ash in enclosed areas under the boilers of electric power        heat.
       plants and boiler facilities (ash discharge).
---------------------------------------------------------------------------------------------------------------------------
 29.   4.6.9. Masonry work on fireclay linings inside all               Infrared radiation -        8.20          8.30
       metallurgical furnaces, including accessories such as various    heat.
       heaters, piping, closures, covers and channels in the area of
       furnaces and their accessories, when hot. (after shut-off).
---------------------------------------------------------------------------------------------------------------------------
       Lasers
---------------------------------------------------------------------------------------------------------------------------
 30.   4.7.2. Tuning pulsed lasers in industrial production.            Lasers.                       9.20        9.30
---------------------------------------------------------------------------------------------------------------------------
       Infections with risk of job-related illness in the group of
       identified contagions
---------------------------------------------------------------------------------------------------------------------------
 31.   4.8.40. Cleaning cesspools, waste sumps  and other equipment     Infections from an            9.20        9.30
       for solid and liquid waste with an entry into the canal area,    unidentified infectious
       including taking samples of such materials for laboratory        environment, with the
       analysis.                                                        presence of, as a rule,
                                                                        only contingent
                                                                        pathogens, work in an
                                                                        environment that is
                                                                        repulsive
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

*)  The sequential ordering (set forth in the 2nd column) of individual harmful
    influences in a work environment that is difficult and harmful to health
    which is set forth in Exhibit No. 2 to Government Decree No. 333/1993 Coll.,
    On the Determination of Minimum Wage Tariffs and Extra Wages for Work in a
    Work Environment that is Difficult and Harmful to Health, as amended.

                                       62
<PAGE>

                                                                   Annex No. 10

               List of Work Remunerated by Extra Payments for Work
                    Under Difficult Conditions (in CZK/hr.)
<TABLE>
<CAPTION>
                                                                                                   As of      As of 1/7/
No.   Activity                                                           Harmful effect           1/1/2004       2004
------------------------------------------------------------------------------------------------------------------------
<S>   <C>                                                                <C>                         <C>          <C>
      a) Harmful chemical substances and dust
------------------------------------------------------------------------------------------------------------------------
1.    Cleaning boilers during operation via cleaning orifices            radiating heat              8.20       8.30
------------------------------------------------------------------------------------------------------------------------
2.  Cleaning ash separators and de-ashing equipment                      carbon monoxide, carbon     8.20       8.30
                                                                         dioxide, carbon sulfide
------------------------------------------------------------------------------------------------------------------------
3.  Repairs of hot water and steam piping in enclosed spaces, canals,    harmful fumes               9.20       9.30
    shafts and underground sumps
----------------------------------------------------------------------------------------------------------------------
4.  Manual de-greasing of machinery components (with organic solvents)   chemical fumes from         8.20       8.30
                                                                         organ. solvents
----------------------------------------------------------------------------------------------------------------------
5.  Welding and soldering                                                                            8.20       8.30
    a)    electric arc welding of all kinds and methods                  compounds of nitrogen
    b)    flame welding of all kinds and methods                         and non-ferrous metals,
    c)    flame cutting metals - all kinds and methods                   harmful dust, zinc
    d)    welding plastics                                               fumes, aggressive
    e)    soldering, welding and installing cables, metal sheet          reducing atmosphere
          ends and direct contact with lead
----------------------------------------------------------------------------------------------------------------------
6.  Work connected with administering doses of hydrazine in premises     hydrazine                   8.20       8.30
    especially designated for it
----------------------------------------------------------------------------------------------------------------------
7.  Extinguishing lime in semi-enclosed spaces                           corrosive dust              8.20       8.30
----------------------------------------------------------------------------------------------------------------------
8.  Servicing stationary mixers, mixing cores and machinery for          corrosive dust              8.20       8.30
    batching and mixing dry compounds of sand and lime, slag wool and
    lime, xylocoque and artificial plaster in semi-enclosed spaces
----------------------------------------------------------------------------------------------------------------------
9.  Handling products from glass wool or basalt wool, fibers or felts    fragments of glass wool     8.20       8.30
                                                                         or basalt wool
----------------------------------------------------------------------------------------------------------------------
10. Cleaning and repair of work machinery, discharge ploughs and         high dust levels,           8.20       8.30
    belts for harmful vapors in deep storage tanks during operation      harmful vapors
----------------------------------------------------------------------------------------------------------------------
11. Cleaning and repair of work machinery - equipment for feeding        high dust levels,           8.20       8.30
    coal into a magazine during operation                                harmful vapors
----------------------------------------------------------------------------------------------------------------------
12. Sand-blasting components                                             silicon oxide, noise        8.20       8.30
----------------------------------------------------------------------------------------------------------------------
13. Repair, assembly, forming and disassembly of mercury measuring       mercury vapors, direct      9.20       9.30
    devices. Working with devices during handling of lead                contact with mercury
----------------------------------------------------------------------------------------------------------------------
14. Cleaning insides of cisterns and tanks for gasoline, diesel fuel,    brown-coal tar, benzyl,    10.0       10.10
    petroleum, mazut, asphalt and  chlorotex                             other vapors
----------------------------------------------------------------------------------------------------------------------
15. Dry-grinding asbestos-cement panels                                  dust, asbestos, cement      9.20       9.30
----------------------------------------------------------------------------------------------------------------------
16. Metal-coating metals in enclosed spaces (vessels)                    microscopic metallic        9.20       9.30
                                                                         dust, metal oxides, CO
----------------------------------------------------------------------------------------------------------------------
17. Painting work with red lead or lead-based paints in enclosed         fumes from lead-based       9.20       9.30
    spaces                                                               colors
----------------------------------------------------------------------------------------------------------------------
18. Collecting cinders and ash in enclosed spaces                        high dust levels,           9.20       9.30
                                                                         radiating heat, CO
----------------------------------------------------------------------------------------------------------------------
19. Cleaning production equipment of tanks, vessels or silos (when       chemical vapors             9.20       9.30
    the employee works inside - in an enclosed space) for anthracite
    oil, cyclohexanone, chlorine, caprolactane, nitric acid, phosphoric
    acid, chlorosulphuric acid, naphthalene, methyl acetate, ethylene
    perchloride, benzyl
----------------------------------------------------------------------------------------------------------------------
20. Cleaning and repairs inside boilers, when warm                       radiating heat, dust        10.0      10.10
----------------------------------------------------------------------------------------------------------------------
21. Tear-down work, masonry work and repair of fireclay linings of       radiating heat, fireclay    10.0      10.10
    boilers and smoke channels immediately after shut-off                dust
----------------------------------------------------------------------------------------------------------------------
22. Cold -gluing conveyor belts with Desmadur  "R"                       fumes of                    8.20       8.30
                                                                         triphenylmethane,
                                                                         methylchloride
----------------------------------------------------------------------------------------------------------------------
23. Vulcanization of conveyor belts from one kind of textile material    fumes of rubber or          8.20       8.30
</TABLE>

                                       63
<PAGE>

<TABLE>
<S> <C>                                                                  <C>                         <C>        <C>
    or combination of materials with bezypherene, including              bezypherene
    stabilization for vulcanization
----------------------------------------------------------------------------------------------------------------------
24. Work in dusty environment of conveyor belts, hoppers  and loading    dust                        8.20       8.30
    trays for coal under conditions where natural ventilation is
    restricted by inability to open windows
----------------------------------------------------------------------------------------------------------------------
25. Cleaning canals, grates and traps for dust in air-conditioning       high concentration of       8.20       8.30
    equipment                                                            dust
----------------------------------------------------------------------------------------------------------------------
26. Mixing glues (epoxies), laminating and gluing components             chemical vapors             8.20       8.30
----------------------------------------------------------------------------------------------------------------------
27. Painting tanks and components with acid-resistant coatings           chemical vapors             8.20       8.30
    (Furol, NEF, Eprosin)
----------------------------------------------------------------------------------------------------------------------
28. Repairing rubber-coated supply tanks, gluing with the use of         chemical vapors             8.20       8.30
    benzene glues, grinding rubber coatings
----------------------------------------------------------------------------------------------------------------------
29. Work with inhibited transformer oils                                 chemical vapors             8.20       8.30
----------------------------------------------------------------------------------------------------------------------
30. Working with asphalt materials that are processable when hot or      fumes, radiating heat       8.20       8.30
    cold in enclosed spaces, melting asphalt mixtures in boilers,
    including preparation of asphalt
----------------------------------------------------------------------------------------------------------------------
31. Work with fireclay and silica flour and preparation of refractory    dust                        9.20       9.30
    mortars
----------------------------------------------------------------------------------------------------------------------
32. Work in an accumulator station (charging and discharging lead        lead, H2SO4, fumes          8.20       8.30
    accumulators and repairing them)
----------------------------------------------------------------------------------------------------------------------
33. Spraying with two-component epoxy varnishes, nitro-varnishes,        fumes from coating          9.20       9.30
    synthetic varnishes, enamels or adhesives in enclosed spaces         substances
    (outside of a box)or large areas in semi-enclosed spaces
----------------------------------------------------------------------------------------------------------------------
34. Cleaning up coal mash                                                coal dust, smoke gases,     8.20       8.30
                                                                         ash
----------------------------------------------------------------------------------------------------------------------
b) Unfavorable micro-climatic conditions
----------------------------------------------------------------------------------------------------------------------
1.  Repair of slag-wool-removal circuits and grinding circuits on        high dust levels, high      8.20       8.30
    operating boilers                                                    temperature
----------------------------------------------------------------------------------------------------------------------
2.  Repairs in chambers of electrostatic filters                         coal and ash dust,          8,20       8,30
                                                                         carbon monoxide and
                                                                         carbon sulfide
----------------------------------------------------------------------------------------------------------------------
3.  Repairs inside smoke ventilators                                     ash dust, sulfur oxide      9.20       9.30
----------------------------------------------------------------------------------------------------------------------
4.  Maintenance work on steam conduit piping,  and sumps and             radiating heat              9.20       9.30
    channels, repairs on reducing stations during operation
----------------------------------------------------------------------------------------------------------------------
5.  Construction of various (even suspended) scaffolding and lining      radiating heat              10.0      10.10
    inside boilers immediately after shut-off
----------------------------------------------------------------------------------------------------------------------
6.  Repairs in incineration chambers and ancillary surfaces of           radiating heat,             10.0      10.10
    boilers when warm, after shut-off                                    corrosive dust, SiO2
----------------------------------------------------------------------------------------------------------------------
7.  Repairs of boilers with heat-emitting areas and accessories,         high dust levels, noise,    9.20       9.30
    heaters, smoke channels, electrostatic dust separators, when         carbon monoxide, ash and
    still warm after shut-off                                            coal dust
----------------------------------------------------------------------------------------------------------------------
8.  Repairs of equipment in proximity of heat-emitting parts of          radiating heat              9.20       9.30
    boilers
----------------------------------------------------------------------------------------------------------------------
9.  Unloading limestone from rail wagons                                 corrosive dust              8.20       8.30
----------------------------------------------------------------------------------------------------------------------
10. Maintenance and servicing work on conveyor transportation systems    corrosive dust              8.20       8.30
    and limestone dumps
----------------------------------------------------------------------------------------------------------------------
11. Maintenance work on limestone mills and crushers                     corrosive dust              8.20       8.30
----------------------------------------------------------------------------------------------------------------------
12. Cleaning work on equipment for sulfur removal and fluid boilers      corrosive dust              8.20       8.30
----------------------------------------------------------------------------------------------------------------------
13. Other activities, including operator duty, in sulfur-removal         corrosive dust              8.20       8.30
    areas and fluid boiler areas where the presence of harmful
    substances has been demonstrated by measurement
----------------------------------------------------------------------------------------------------------------------
c)  Ionizing radiation and high-frequency radiation
----------------------------------------------------------------------------------------------------------------------
1.  All work in a controlled area, unless listed below                   radioactive radiation       8.60       8.70
----------------------------------------------------------------------------------------------------------------------
2.  Operation of:                                                        radioactive radiation      10.0       10.10
    - charge delivery machine during transportation of
      fuel elements
    - decontamination equipment (vats, ultrasound cleaners,
      decontamination boxes)
    - equipment of cleaning station for radioactive water, sumps,

----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       64
<PAGE>

<TABLE>
<S> <C>                                                                 <C>                         <C>       <C>
-----------------------------------------------------------------------------------------------------------------------
    inspection shafts, sample-collection boxes
-----------------------------------------------------------------------------------------------------------------------
3.  Reviews, repairs and maintenance, decontamination, dosimetric        radioactive radiation       10.0      10.10
    checking, non-destructive checking of :
    - charge delivery machines - outer part of (fittings, gears,
      synchro devices, metal switches, electromagnets etc.)
    - equipment where at a distance of 1 m from its surface there is
      a dosage equivalent of more than 20 microSv/h.
    - repairs and certification of ionizing chambers
----------------------------------------------------------------------------------------------------------------------
4.  Repairs, maintenance, decontamination, dosimetric testing and        radioactive radiation       10.30     10.40
    non-destructive testing of detectors for basic parameters of
    radioactive media (dosimetric detectors)
----------------------------------------------------------------------------------------------------------------------
5.  Sample-taking: - decolorizing ion exchanger SVO 1, SVO 2, SVO 3,     radioactive radiation       10.0      10.10
    SVO 6
    - processing of samples from controlled areas during
    replacement of fuel
----------------------------------------------------------------------------------------------------------------------
6.  Decontamination:                                                     radioactive radiation       10.0      10.10
    - floors and tools in active parts of controlled areas
    - equipment and transport equipment not classified in other groups
    - protective work clothing from rubber and PVC (manually)
----------------------------------------------------------------------------------------------------------------------
7.  Delivery of charges into neutron machines                            radioactive radiation       10.00     10.10
----------------------------------------------------------------------------------------------------------------------
8.  Removal of fixtures of emitters of gamma-rays and neutrons on a      radioactive radiation       10.00     10.10
    certification stand
----------------------------------------------------------------------------------------------------------------------
9.  Collection, sorting and liquidation of medium-activity solid and     radioactive radiation       10.30     10.40
    liquid waste
----------------------------------------------------------------------------------------------------------------------
10. Removal of active  decolorizing ion exchanger cartridges and         radioactive radiation       10.0      10.10
    filters for SVO
----------------------------------------------------------------------------------------------------------------------
11. Preparation of material and equipment for disassembly and            radioactive radiation       10.0      10.10
    assembly of a reactor in the reactor room and active workshops
    (material does not come into contact with interior section of
    reactor)
----------------------------------------------------------------------------------------------------------------------
12. Replacement of filters in suction systems for special ventilation    radioactive radiation       10.90     11.00
    and work connected with their immediate liquidation
----------------------------------------------------------------------------------------------------------------------
13. Cleaning suction baskets and collector vats for radioactive water    radioactive radiation       10.90     11.00
----------------------------------------------------------------------------------------------------------------------
14. Cleaning and drying drainage systems for capturing active            radiation                   10.90     11.00
    substances
----------------------------------------------------------------------------------------------------------------------
15. Collection, sorting and liquidation of solid and liquid substances   radioactive radiation       10.90     11.00
----------------------------------------------------------------------------------------------------------------------
16. Reviews, repairs and maintenance, decontamination, dosimetric        radioactive radiation       10.90     11.00
    checking, non-destructive checking of  equipment where at a
    distance of  1 m from its surface there is a dosage equivalent of
    more than 50 microSv/h.
----------------------------------------------------------------------------------------------------------------------
17. Clean-up of the results of an extraordinary Condition I event        radioactive radiation       10.90     11.00
----------------------------------------------------------------------------------------------------------------------
18. Work with lasers of Class III b) and higher where the technical      laser equipment             11.30     11.40
    securing method does not eliminate the risk of a hit by a direct
    or reflected beam
----------------------------------------------------------------------------------------------------------------------
19. Work on equipment of nuclear power plant where:                      radioactive radiation       13.00     13.10
    - worker comes into contact with highly active media: (volume,
      activity of media A exceeds 1.10 Bq/1)
    - at a distance of 1 m from their surface the equivalent dosage
      DE
    > 100 microSv/h
----------------------------------------------------------------------------------------------------------------------
20. Work on reactors with loosened seals, work on fire protection        radioactive radiation       12.50     12.60
    circulation loops and their components
----------------------------------------------------------------------------------------------------------------------
21. Work on basis of an "R" order in the area of a hermetic zone         radioactive radiation       12.50     12.60
    under normal operation
----------------------------------------------------------------------------------------------------------------------
22. Work on equipment of cleaning stations and filtration equipment      radioactive radiation       12.50     12.60
----------------------------------------------------------------------------------------------------------------------
23. Work on an exchanger pool, storage pool for spent  fuel and          radioactive radiation       12.50     12.60
    inspection sections
----------------------------------------------------------------------------------------------------------------------
24. Work on decontamination hubs                                         radioactive radiation       12.50     12.60
----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       65
<PAGE>

<TABLE>
<S> <C>                                                                  <C>                         <C>       <C>
25. Work on containers for transportation of used parts of a reactor     radioactive radiation       12.50     12.60
    (or fuel) and  equipment that comes into contact with insider
    parts of a reactor
----------------------------------------------------------------------------------------------------------------------
26. Work on charge-delivery equipment whose parts come into contact      radioactive radiation       12.50     12.60
    with spent fuel
----------------------------------------------------------------------------------------------------------------------
27. Handling spent fuel and inside parts of a reactor                    radioactive radiation       12.50     12.60
----------------------------------------------------------------------------------------------------------------------
28. Clean-up of the results of an extraordinary Condition II. or         radioactive radiation       12.50     12.60
    III. event.
----------------------------------------------------------------------------------------------------------------------
29. Working with media where AV>105 Bq/1                                 radioactive radiation       12.50     12.60
----------------------------------------------------------------------------------------------------------------------
d) Risk of infection and repulsive environment
----------------------------------------------------------------------------------------------------------------------
1.  Removal of mud with harmful substances from inlet sections of        high concentration of       8.20       8.30
    hydro-electric turbines                                              harmful substances
----------------------------------------------------------------------------------------------------------------------
2.  Cleaning condensers during entry via installation orifices           high concentration of       9.20       9.30
                                                                         harmful substances
----------------------------------------------------------------------------------------------------------------------
3.  Cleaning sumps, waste or cesspools                                   repulsive environment,      9.20       9.30
                                                                         risk of infection
---------------------------------------------------------------------------------------------------------------------
4.  Handling filtration sand sullied with sludge and decomposing         repulsive environment,      9.20       9.30
    material in canals                                                   benzene, toluene, xylene
----------------------------------------------------------------------------------------------------------------------
5.  Servicing and maintenance of equipment for rough-cleaning and        repulsive environment,      9.20       9.30
    sludge decomposition in underground areas (semi-enclosed and         risk of infection
    enclosed spaces)
----------------------------------------------------------------------------------------------------------------------
6.  Cleaning of canalization sumps, cesspools and inlets with entry      risk of infection,          9.20       9.30
    into an enclosed                                                     repulsive environment
----------------------------------------------------------------------------------------------------------------------
7.  Operation of equipment for transport and processing of solid         risk of infection,          8.20       8.30
    household waste at an incinerator                                    repulsive environment
----------------------------------------------------------------------------------------------------------------------
8.  Refurbishing WC equipment, clean-up of waste                         repulsive environment       8.20       8.30
----------------------------------------------------------------------------------------------------------------------
9.  Laboratory evaluation of  COV samples in a chemical lab              risk of other infections    8.20       8.30
----------------------------------------------------------------------------------------------------------------------
e)  Noise, mechanical tremors (vibration)
----------------------------------------------------------------------------------------------------------------------
1.  Work with pneumatic drills, jackhammers, electric vibrators with     vibration, noise            8.20       8.30
    internal combustion engines, chainsaws etc.
----------------------------------------------------------------------------------------------------------------------
2.  Noise levels in excess of Laeg 85 dB at any workplace                noise                       8.20       8.30
----------------------------------------------------------------------------------------------------------------------
3.  Blasting machinery components with the use of high-pressure pumps    vibration, repulsive        8.20       8.30
                                                                         environment
----------------------------------------------------------------------------------------------------------------------
</TABLE>
                                       66exv4w3

 

Exhibit 4.3

GERBER SCIENTIFIC, INC.

2005-2006 EXECUTIVE ANNUAL INCENTIVE BONUS PLAN

1. Purpose

     The purpose of the Plan is to reward certain Designated Executives of the
Company and its subsidiaries by providing annual cash bonuses based upon the
achievement of Performance Goals which are to be predefined by the Committee.

2. Definitions

     For purposes of this Plan, the following terms shall have the definitions
set forth below:

     a. “Board.” The Board of Directors of the Company.

     b. “Bonus Stock.” Shares of the Company’s Common Stock acquired in lieu of
a portion of the cash bonus earned under this Plan.

     c. “CEO.” The Chief Executive Officer of the Company.

     d. “Change of Control.” A change of control as defined in the Employee
Stock Plan.

     e. “Code.” The Internal Revenue Code of 1986, as amended, and as it may be
amended from time to time, or any corresponding federal tax statute enacted
after the date this Plan is adopted by the Committee. A reference to a specific
section of the Code refers not only to such specific section but also to any
corresponding provision of any federal tax statute enacted after the date this
Plan is adopted by the Committee, as such specific section or corresponding
provision is in effect on the date of application of the provisions of this
Plan containing such reference.

     f. “Committee.” The Management Development and Compensation Committee, as
appointed from time to time by the Board and consisting solely of three or more
outside directors who are not otherwise Employees of the Company or any
subsidiary.

     g. “Company.” Gerber Scientific, Inc.

     h. “Corporate Employees.” Employees of the Company (as distinguished from
Employees of any subsidiary) who are not Corporate Officers.

     i. “Corporate Designated Executives.” Corporate Officers and other key
Corporate Employees designated by the Committee as eligible to receive cash
bonuses pursuant to section 6, hereof.

     j. “Corporate Officers.” Officers of the Company at the level of Vice
President or above.

     k. “Designated Executives.” Corporate Designated Executives and Subsidiary
Designated Executives.

     l. “Employees.” Individuals employed by either the Company or one of its
Subsidiaries.

     m. “Employee Stock Plan.” The Company’s 2003 Employee Stock Option Plan
and as it may be further amended from time to time.

 

 

     n. “Performance Goals.” Goals based on business criteria established by
the Committee in accordance with section 5, hereof, computed in accordance with
the directions of the Committee.

     o. “Permanent Disability.” Permanent and Total Disability as provided in
Section 22(e)(3) of the Code.

     p. “Plan.” This 2005-2006 Executive Annual Incentive Bonus Plan, as it may
be amended from time to time.

     q. “Regular Wages Paid.” The annual salary payable by the Company (or its
Subsidiary) to the plan participant on the last day of each fiscal year covered
by this Plan.

     r. “Retirement.” Retirement as defined in the Employee Stock Plan.

     s. “Restricted Stock.” Shares of Company Common Stock granted or to be
granted subject to certain restrictions as provided in Sections 8.2 and 8.2.1.

     t. “Subsidiary” or “Subsidiaries.” The Company’s existing U.S. operating
subsidiary, Gerber Scientific International, Inc., and such other corporations
which are or may become direct or indirect wholly-owned subsidiaries of the
Company and which are designated by the Committee as a subsidiary to be
included within the terms of this Plan.

     u. “Subsidiary Designated Executives.” The President of each Subsidiary
and other key employees of the Subsidiary designated by the Committee as
eligible to receive cash bonuses pursuant to section 6 hereof.

     v. “Target Bonus Potential.” The bonus percentages as set forth in, or
authorized by, section 6.1 hereof.

3. Summary

     Bonuses under the Plan are payable to the Designated Executives upon the
achievement of one or more Performance Goals. The Committee will establish
Performance Goals each year for the Company and for each Subsidiary. Designated
Executives shall be entitled to bonuses based upon the achievement of the
Performance Goals by the Company for Corporate Designated Executives or by the
Subsidiary for a Subsidiary Designated Executive; provided, however, that no
bonuses shall be paid until the Committee has certified in writing the
achievement of the applicable Performance Goal(s).

4. Plan Years

     Subject to shareholder approval of the Plan, the Plan will be effective
for the fiscal years ending April 30, 2005 and April 30, 2006.

5. Performance Goal(s)

     Performance Goal(s) for each fiscal year for the Company and each
Subsidiary shall be determined by the Committee, but must be based on one or
more of the following business criteria, each business criteria to be subject
to such adjustments for changes in accounting principles and/or other items
that are required by generally accepted accounting principles (“GAAP”) to be
separately disclosed in the Company’s or each Subsidiary’s financial
statements: return on equity, return on assets, net income, cash flow, book
value, earnings before interest and taxes (“EBIT”), revenues, financial return
ratios, market performance of the Company, total shareholder return and/or
earnings per share. Performance Goals established by the Committee may
specifically provide for graduated

2

 

levels of achievement by the Company, or the Subsidiary, both above and
below one or more stated Performance Goal(s) and consequent preestablished
bonus payment amounts as a result of the achievement of each graduated level of
the Performance Goal(s). Cash bonuses to Corporate Designated Executives are
determined in accordance with achievement of the Performance Goal(s) of the
Company. Cash bonuses to Subsidiary Designated Executives are determined in
accordance with achievement of the Performance Goal(s) of the applicable
Subsidiary by which each such Subsidiary Designated Executive is employed,
subject to the provisions of Section 7.1.3. The Performance Goal(s) for each
fiscal year shall be established by the Committee within the first three months
of that fiscal year or within such other time as may be required pursuant to
Section 162(m) of the Code.

6. Determination of Individual Bonus Amounts

     6.1. The Target Bonus Potential. The Target Bonus Potential for cash bonus
awards for each fiscal year will be fixed by the Committee as a percentage of
each participant’s Regular Wages Paid. Except for grants of Restricted Stock in
accordance with section 8.2, awards shall be made under the Plan according to
these targets only to the extent that the applicable Performance Goal(s) has
been achieved in accordance with the term(s) of such goal. All bonus amounts
payable hereunder are subject to the maximum bonus percentage and maximum bonus
amount stated in section 6.2.

     6.2. Maximum Bonus Percentages and Amounts. The maximum cash bonus payable
any Designated Executive is two times the Target Bonus Potential. This maximum
bonus amount may be increased by up to one-sixth of the amount of such bonus by
an additional award of Restricted Stock, subject to the Designated Executive’s
stock election pursuant to section 8.2. In no event shall any cash bonus
payable to any Designated Executive under this plan exceed $1,500,000 for any
fiscal year (as computed prior to any election to receive Company Stock and
Restricted Stock under section 8.2).

     6.3. Committee Authority. The Committee shall have the sole authority to
designate which Employees are classified as Corporate Officers, and the Chief
Executive Officer of the Company shall have authority to designate other
Corporate Designated Executives and Subsidiary Designated Executives subject to
ratification by the Committee.

7. Eligibility

     7.1 Eligible Participants. Eligibility under this Plan is limited to
Designated Executives who are on the active permanent payroll on the last day
of the fiscal year and who have been employed continuously by the Company or a
Subsidiary for more than two (2) months.

          7.1.1 An approved leave of absence shall not be considered a break in
service for purposes of eligibility to receive bonuses under the Plan.

          7.1.2 Designated Executives who as of the last day of the fiscal year have
been employed by the Company or a Subsidiary for less than two (2) months are
not eligible to receive any bonus under the Plan. Designated Executives who as
of April 30 have been employed continuously by the Company or a Subsidiary for more than two (2)
months but less than one (1) year shall participate pro rata in the Plan.

3

 

          7.1.3 Designated Executives who transfer between participating companies
but who otherwise qualify under the terms hereof, shall participate pro-rata in
the Plan of each company where they were employed during the fiscal year. Bonus
amounts payable under this Plan are to be based on the respective Regular Wages
Paid and applicable Target Bonus Potential at each company where the
transferred Designated Executive was employed.

     7.2 Excluded Employees. Specifically excluded from participating in the
Plan are: Employees who participate in other forms of cash incentive
compensation plans (e.g., commission plans).

8. Distribution of Incentive Bonus

     8.1 Cash Distribution. Except as provided in this section 8 and subject to
any voluntary deferral under the Company’s 401(k) plan, Deferred Compensation
plan or other voluntary deferral plans as the Committee may adopt, the
incentive bonus shall be paid in cash to eligible Designated Executives in
accordance with section 6 (“Determination of Individual Bonus Amounts”). It is
expected that any distribution for each fiscal year will be made on or before
July 15th following the close of each fiscal year, subject to certification by
the Committee that the applicable Performance Goal(s) have been achieved.

     8.2 Stock Election. Designated Executives whose Target Bonus Potential is
thirty per cent (30%) or higher and who are authorized by the Committee may
elect to receive up to 50 percent of their bonus in the form of Company Common
Stock in lieu of cash less applicable withholding taxes. To encourage the
election of Bonus Stock, the Company shall award additional shares of the
Company’s Common Stock which shall equal in value (valued as of the date of
purchase of the Bonus Stock without regard to any restrictions that may attach
to such shares) one-third of the bonus amount elected to be received in stock
before tax withholding and shall be subject to certain restrictions
(“Restricted Stock”). The restrictions and other terms of such Restricted Stock
award shall be determined by the Committee and set forth in separate grant
agreements. The agreement shall provide, among other things, that such
Restricted Stock shall vest (and the restrictions shall lapse) in equal
installments at each of the three anniversary dates following the date of
payment, provided that the Restricted Stock has not been forfeited prior to any
such vesting date. In the event that all or any portion of the Bonus Stock
(after deduction for taxes withheld) is sold, transferred, or otherwise
disposed of by the recipient thereof during the three year period following the
grant of the Restricted Stock, a proportional number of the shares of
Restricted Stock not yet vested shall be forfeited. [Example: If a participant
received 150 shares of Common Stock in lieu of a portion of his or her cash
bonus, after withholding 60 shares for taxes, the participant will receive 90
shares of Bonus Stock. The participant would then be granted 50 shares of
Restricted Stock (one third of 150 shares). If the participant then sells all
90 shares of the Bonus Stock after the first anniversary of the Restricted
Stock Grant date but before the second anniversary thereof, two-thirds of the
shares of Restricted Stock (33.33 shares) would be forfeited to the Company.
The restrictions as to one-third of the Shares of Restricted Stock (16.67
shares) would have

4

 

lapsed after one year and those shares would no longer be Restricted
Stock.] The foregoing provisions with respect to forfeiture shall not be
applicable with respect to Bonus Shares which are transferred or otherwise
disposed of to the Company in satisfaction of amounts due the Company incident
to the exercise of stock options or other Company plans with respect to the
purchase of Company stock provided, however, that shares resulting from such
transaction equivalent in number to the Bonus Shares transferred or otherwise
disposed of to the Company incident to such transactions are retained by the
Designated Executive consistent with the terms of this Plan regarding the
vesting of Restricted Shares. Upon termination of employment for any reason
other than death, Permanent Disability or Retirement, all Restricted Stock not
yet vested shall be forfeited. If termination of a Designated Executive’s
employment is due to death, Permanent Disability or Retirement, all
restrictions on the Restricted Stock issued to such Designated Executive
pursuant to the Plan shall terminate upon such termination. All restrictions on
Restricted Stock issued to a Designated Executive pursuant to this Plan shall
also terminate in the event of a Change of Control.

          8.2.1. Restrictions. Restricted Stock shall be subject to such additional
restrictions on transferability, risk of forfeiture and other restrictions, if
any, as the Committee may impose, which restrictions may lapse separately or in
combination at such times or under circumstances as the Committee may determine
on the date of election or thereafter. Except as stated in section 8.2, a
Designated Executive granted Restricted Stock shall have all of the rights of a
shareholder, including the right to vote the restricted shares and the right to
receive dividends thereon (subject to any mandatory reinvestment or other
requirement imposed by the Committee). Prior to vesting, Restricted Stock may
not be sold, transferred, pledged, hypothecated, margined or otherwise
encumbered by the Designated Executive. Certificates representing shares of
Restricted Stock may be legended to restrict transfer.

          8.2.2. Income Tax Withholding. It shall be a condition of an Employee’s
right to receive a bonus under this Plan whether in the form of Bonus Stock
(including Restricted Stock) or cash, that the Designated Executive consents to
the withholding by the Company of any federal, state or other taxes which the
Company is obligated to withhold or collect. The Company is authorized to
withhold any such federal, state or other taxes resulting from such bonus by
withholding such number of shares of Company Common Stock otherwise issuable to
such Employee that, based on the fair market value of the shares on the date
the bonus payment is made, will satisfy such federal, state or other tax
withholding. It shall be a condition of a Designated Executive’s right to
receive Restricted Stock pursuant to this Plan that the Designated Executive
agrees and authorizes the Company to either withhold from such Designated
Executive’s Regular Wages Paid or, at the Company’s election, to reduce the
number of shares of Restricted Stock which would otherwise be due to the
Designated Executive under this Plan by an amount which, in the sole discretion
of the Company, is sufficient to pay all income taxes that the Company is
required to withhold or collect in connection with the Restricted Stock award.

          8.2.3. Investment Representation. Unless the Committee otherwise
determines, Participants who elect to receive Common Stock in lieu of cash must
agree to take such Common Stock for investment and not for distribution.
Delivery of such representations as may be requested by the Committee shall be
a condition precedent to the

5

 

right of the Participant to receive any shares of Common Stock under this Plan.
Certificates representing such shares of Common Stock may be legended to
restrict transfer absent compliance with the federal securities laws.

          8.2.4. Issuance of Bonus Stock and Restricted Stock. Company Common Stock
received by Designated Executives in lieu of cash may, in the sole discretion
of the Committee, be issued by the Company, purchased in the open market using
the applicable portion of the Designated Executive’s cash bonus amount, or
issued under the Employee Stock Plan. In the Committee’s discretion, Restricted
Stock may be issued as Restricted Shares under this Plan or under the Employee
Stock Plan.

     8.3 Number of Shares Under the Plan. The maximum number of Company
shares that may be issued under this Plan shall not exceed 250,000 shares, of
which not more than 83,334 shares shall be restricted shares, subject to
section 9.5 below.

9. Miscellaneous

     9.1 Transferability. A Designated Executive’s rights and interests under
the Plan may not be assigned or transferred. In the event of a Designated
Executive’s death after the end of a fiscal year but prior to the bonus payment
date, the Company shall pay any bonus amounts due under the Plan to the
Designated Executive’s designated beneficiary, or in the absence of such
designation, by will or the laws of descent and distribution.

     9.2 Administration of Plan. The Plan shall be administered by the
Committee. The Committee shall have the authority to interpret the Plan, to
adopt plans whereby the bonus payments otherwise payable under the Plan may be
voluntarily deferred, at the participant’s election, to establish and revise
rules, amounts and regulations relating to the Plan, and to make any other
determinations that it believes necessary or advisable for the administration
of the Plan. Decisions of the Committee shall be final, conclusive, and binding
upon all parties, including the Company, Subsidiaries, shareholders, and
Designated Executives. The Committee shall, in the exercise of its sole
discretion, determine any and all issues relating to the manner by which
Performance Goals are to be calculated and certified and upon whom it shall
rely in the determination of achievement and certification of Performance Goals
or computation of any and all compensation due hereunder including bonus
amounts payable under the Plan.

     9.3 Amendment and Termination. The Committee reserves the right to modify,
suspend or terminate the Plan in whole or in part at any time; provided,
however, that no modification of the Plan by the Committee without approval of
the shareholders will materially increase the maximum amount allocated to the
CEO and the four most highly compensated Employees or render any member of the
Committee eligible for a bonus award. Any modification to material terms of the
Plan (i.e., employees eligible, business criteria on which the performance goal
is based, or maximum amount of compensation payable) shall require shareholder
approval prior to the payment of any benefit.

     9.4 No Agreement to Employ. Nothing in the Plan shall be construed to
constitute or evidence an agreement or understanding, express or implied, by
the Company to employ or retain any Designated Executive for any specific
period of time.

6

 

     9.5 In the event that the number of the outstanding shares of Common Stock
is changed by reason of stock dividend or stock split or other combination or
circumstance which results in the issuance of additional shares of Common Stock
to existing shareholders, the number of shares which may thereafter be
purchased under this Plan and the number of shares that may be issued as
Restricted Stock under this Plan shall be adjusted proportionately so as to
reflect such change. If any shares of Restricted Stock are forfeited, such
shares shall thereafter be available for reissuance under this Plan.

     9.6 Certification of Financial Statements; Certification That Terms Have
Been Satisfied. Prior to payment of any bonus amount under the Plan, the
Company’s independent auditors shall have certified the financial statements of
the Company for the fiscal year immediately preceding the fiscal year in which
the bonus is to be paid. In addition, bonuses will not be paid until the
Committee has certified in writing that the Performance Goal(s) and all other
material terms stated herein have been attained. For this purpose, the
approved minutes of a Committee meeting in which a certification is made shall
be treated as a written certification.

     9.7 Indemnification. Current and past members of the Board or Committee
shall be indemnified and held harmless by the Company against and from any and
all loss, cost, liability or expense that may be imposed upon or reasonably
incurred by such member in connection with or resulting from any claim, action,
suit or proceeding to which such member may be or become a party or in which
such member may be or become involved by reason of any action taken or failure
to act under this Plan and against and from any and all amounts paid by such
member in settlement thereof (with the Company’s written approval) or paid by
such member in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment in favor of the Company based upon a finding of
such member’s lack of good faith. Indemnification pursuant to this provision is
subject to the condition that, upon the institution of any claim, action, suit,
or proceeding against such member, such member shall in writing give the
Company an opportunity, at its own expense, to handle and defend the same
before such member undertakes to handle and defend it on such member’s behalf.
The foregoing right of indemnification shall not be exclusive of any other
right to which such member may be entitled as a matter of law or otherwise, or
any power that the Company may have to indemnify or hold such member harmless.

     9.8 Governing Law. This Plan shall be governed by the laws of the State of
Connecticut.

7

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