LAW LAW ON PUBLIC COMPANY “LIETUVOS NAFTA” Article 1. Objective of the Law 1. Public company “Lietuvos Nafta” shall be e

LAW LAW ON PUBLIC COMPANY “LIETUVOS NAFTA” Article

1. Objective of the Law
2. Public company “Lietuvos Nafta” shall be established with a view of implementing a comprehensive industrial, economic, financial and investment policy in the enterprises of the oil sector of Lithuania.
3. Public company “Lietuvos nafta” shall be established by forming its authorised capital from the shares of the enterprises in the oil sector - public company “Maþeikiø nafta”, public company “Bûtingës nafta”, public company “Lietuvos kuras” and a special purpose public company “Naftotiekis”, belonging to the state of Lithuania by the right of ownership, after the valuation of the property of these companies in a manner prescribed by the Government of Lithuania. Article
4. Exclusion of the Public Companies from the List of Enterprises Open for Privatisation The State shall exclude public company “Lietuvos kuras” (code 2005933) and public company “Maþeikiø nafta” (code 6645172) from the list of objects open for privatisation in 1996 (Þin., 1996, No. 28-683). Article
5. Principles of Activities and Management of Public Company “Lietuvos nafta”
6. The formation, activities and management of public company “Lietuvos nafta” shall be regulated by Company Law of the Republic of Lithuania unless this Law provides otherwise.
7. Decisions on the liquidation of public company “Lietuvos nafta” shall be taken only by the Seimas of the Republic of Lithuania, and on the restructuring - only by the Government of the Republic of Lithuania. Under the provisions of paragraph 3 of Article 4 the block of shares belonging to the State by the right of ownership shall not be less than 34 percent of votes. Each from the other shareholders, together with the companies under his control, shall not own a block of shares giving him more than 33 percent of votes. The blocks of shares of each of the public companies - “Maþeikiø nafta”, “Bûtingës nafta”, “Lietuvos kuras” and “Naftotiekis” - belonging to public company “Lietuvos nafta” by the right of ownership, shall not be less than 34 percent of votes.
8. The functions of the founder of public company “Lietuvos nafta” shall be undertaken by the Government. In a manner established by laws, the Government shall manage, make use and dispose of the shares of public company “Lietuvos nafta” belonging to the State by the right of ownership. When appointing chairpersons of the board and the supervisory board of public company “Lietuvos nafta”, the Government shall have the veto right.
9. The general meeting of the shareholders of public company “Lietuvos nafta” may adopt decisions other than those referred to in paragraph 2 of this Article provided the meeting is attended by shareholders with over 2/3 of the votes. In the event of no quorum, a repeat meeting shall be convened within 15 days and it shall have a right to adopt decisions in accordance with the agenda, irrespective of how many shareholders should attend it.
10. A resolution of the general shareholders’ meeting shall be required for the adoption of decisions of the board of public company “Lietuvos nafta” on the sale, conveyance, lease, or mortgage of long-term assets valued at over 1/20th of the company's authorised capital, also on using the assets as a pledge or a guarantee to secure the performance of obligations by other subjects. The total value of contracts made without a resolution of the general shareholders’ meeting during a business year shall not exceed 1/20 of the value of the authorised capital of public company “Lietuvos nafta”.
11. Without a resolution of the general shareholders’ meeting the board shall have no right to pledge to sell or convey in any other manner all or a part of the shares of any public company belonging to the public company “Lietuvos nafta” by the right of ownership, nor to take decisions to increase the authorised capital of those public companies if such a contract or a decision resulted or might result in the loss of a qualified (two-thirds) or a simple (half ) majority of votes of the subsidiaries, also a right of veto (one-third ) of the total number of votes.
12. Decisions of the general shareholders’ meeting of public company “Lietuvos nafta” in the cases specified in paragraphs 5 and 6 of this Article shall be taken by a two-thirds majority vote of those present at the meeting.
13. Public company “Lietuvos nafta” shall be prohibited from taking credits and obtaining guaranties from its subsidiaries.
14. Public company “Lietuvos nafta” as the owner of the shares of its subsidiaries belonging to it by the right of ownership shall be represented at the general shareholders’ meetings of those companies by its authorised persons. The authorised representatives shall be appointed by the board from among the nominees approved by a general shareholders’ meeting. The procedure of representation, the rights and duties of the authorised representatives shall be established by regulations approved by a general shareholders’ meeting of public company “Lietuvos nafta. Mandates for participation at a specific general shareholders’ meeting shall be signed by chairperson of the board of public company “Lietuvos nafta”. Article
15. Privatisation and Increase of the Authorised Capital of Public Company “Lietuvos nafta”
16. Public company “Lietuvos nafta” may be privatized in accordance with the procedure prescribed by Law on the Privatization of State-Owned and Municipal Property of the Republic of Lithuania.
17. The authorised capital of public company “Lietuvos nafta” shall be increased in accordance with the procedure prescribed by Company Law of the Republic of Lithuania.
18. For three years after the establishment of the public company, the part of shares belonging to the state by the right of ownership may not represent less than 51 percent of voting rights.
19. During the period referred to in paragraph 3 of this Article, the shares of public company “Lietuvos nafta” to Lithuanian and foreign investors shall be sold by a public tender, a public auction or a public sale of shares. Terms of reference of the tender must have a provision to the effect that priority to acquire the shares of public company “Lietuvos nafta” shall be given to the highest bidder, also taking regard of the obligations to comply with the following terms: 1) to guarantee transit of oil imports and exports through the Bûtingë Oil Terminal; 2) to guarantee oil supply to public company “Maþeikiø nafta”; 3) to secure credits for the development and reconstruction of the enterprises of the Lithuanian oil sector.
20. The regulations of the tender shall be approved and the procedure of compliance, the scope, terms and criteria of the requirements referred to in paragraph 4 of this Article shall be established by the Government.
21. The investors who comply with the requirements of paragraph 4 of this Article shall be given priority to acquires shares of later emissions of public company “Lietuvos nafta” in two years time.
22. Control of and responsibility for the obligations specified in paragraph 4 of this Article shall be executed in the subscription for shares ( sale-purchase) contract. I promulgate this Law passed by the Seimas of the Republic of Lithuania. Algirdas Brazauskas President of the Republic Vilnius September 24, 1996 No I-1536