REPUBLIC OF LITHUANIA

REPUBLIC OF LITHUANIA Official translation REPUBLIC OF LITHUANIA LAW ON COMPANIES 13 July 2000 No. VIII-1835 Vilnius (New version of the Law of 1 January 2004 No. IX-1889 As amended by 22 June 2006 No. X-715) CHAPTER ONE GENERAL PROVISIONS Article 1. Purpose of the Law 1. The Law shall regulate the incorporation, management, activities, reorganisation, transformation, division and liquidation of companies having the legal form of public and private limited liability company, the rights and duties of the shareholders, as well as establishment of branches of foreign companies and termination of their activities.  When the provisions of this Law apply both to a public and  a private limited liability company, the term "company" shall be used. 2. The specifics of regulation of companies treated under the Law of Securities Market as accountable issuers shall be established by the Law of Securities Market. 3. The provisions of the Law have been harmonised with the EU legal acts presented in the Annex to this Law. Article 2. Public Limited Liability Company and Private Limited Liability Company 1. The company shall be an enterprise whose authorised capital is divided into parts called shares.  2. The company shall be a private legal person with limited civil liability. 3. The amount of the  authorised capital of the public limited liability company shall not be less than LTL 150,000. Its shares may be offered for sale and traded in publicly in compliance with the legal acts regulating securities market. 4. The amount of the authorised capital of a private limited liability company shall be not less than LTL 10,000. It must limit the number of its shareholders to 250. Shares of the private limited liability company may not be offered for sale and traded in publicly, unless other laws provide otherwise. 5. The name of the public limited liability company must include the words “akcinė bendrovė” (public limited liability company) defining its legal form or the acronym “AB”. The name of the private limited liability company must have the words defining its legal form “uždaroji akcinė bendrovė” (private limited liability company) or the acronym “UAB”. Version of paragraph 6 until 1 January 2007: 6. The company’s documents used by it in its relations with other persons shall present the information specified in Article 2.44 of the Civil Code. This information shall also be given in the company’s Internet website if the company has one. Version of paragraph 6 after 1 January 2007: 6.  The company’s written documents used in its relations with other persons  as well as  documents, signed according to the procedure established by the Law on Electronic Signature and transmitted by electronic communications facilities, and  the  company’s Internet website, if the company has one, must contain the information specified in Article  2.44 of the Civil Code. 7. The registered office of the company must be situated in the Republic of Lithuania. 8. In its activities the company shall be guided by the articles of association, the Civil Code, this and other laws and legal acts. Article 3. Shareholders 1. Shareholders are natural and legal persons who have acquired shares in the company. 2. Every shareholder shall have such rights in the company as are accorded to him by the shares manner prescribed by law. For the purposes of this Law the State of Lithuania or municipalities shall also be deemed to be legal persons.   Article 4. 2. Each shareholder shall have such rights in the company which are incidental to the shares in the company owned by him. All shareholders who are in the same position  shall have equal rights and duties. 3. If the holder of all shares in the company is one person, the person's written decisions shall be equivalent to the resolutions of the General Meeting. Article 5. The Company's Articles of Association 1  The Articles of Association of the company constitute the legal document governing the conduct of the company's business. 2.  The Articles of Association must state: 1)  the name of the company; 2) the company's registered office; 3) the objects of the company and type of business activities; 4) the amount of the authorised capital; 5) the number of shares according to type and class, their nominal value and the rights they carry; 6) the powers of the General Meeting, the procedure for convening the Meetings and their voting rules; 7) the procedure for electing or removing from office members of the Supervisory Board, the Board, the head of the Administration and the powers of the above bodies; 8) the procedure for communicating the notices of the company; 9) the procedure for presenting  the company documents and other information to the shareholders; 10) the procedure for making decisions on the establishment of branches and representative offices of the company. 3. The Articles of Association of the company may also contain other provisions which are in conformity with the laws of the Republic of Lithuania. 4. If business activities provided for in the company's Articles of Association are regulated by other laws of the Republic of Lithuania, said laws must be complied with when drafting and amending the company's Articles of Association. 5. The Articles of Association of the company being incorporated must be signed by all the incorporators or their representatives before the statutory meeting. The signature of a natural person must be notarised, whereas the signature of a legal person or his representative shall be attested by a seal. The procedure established for attesting the signature of natural persons shall apply to a foreign legal person who does not posses a seal. 6. The company’s Articles of Association and the amendments thereto shall be valid only upon the registration thereof in the Register of Enterprises of the Republic of Lithuania in the  manner prescribed by law. Article 6. Branch and Representation of a Company 1. The company shall have the right to set up its branches and representations in the Republic of Lithuania  and abroad. 2. The company shall be liable for the obligations of the branch or representative office by way of all its assets. Article 7. Parent Company and Subsidiary 1. A company shall be a parent company if it directly or indirectly holds a majority of the votes in another company which is its subsidiary or if it may directly or indirectly exercise  a dominant influence on another company. 2. A company shall directly hold a majority of the votes in another company if it owns shares in another company which grant over 50% of votes at the General Meeting. 3. A company shall indirectly hold a majority of the votes in a third company when it directly holds the majority of votes in another company which directly or indirectly holds a majority of votes in a third company. 4. For the purposes of this Law, the company shall be able to directly exercise a dominant influence on another company only provided it satisfies at least one of the following conditions: 1) the company has the right to elect or remove the head of the Administration, the majority of members of the Board or Supervisory Board of another company and at the same time is a shareholder of this other company; 2) is a shareholder of another company and may decide, under agreements concluded with other shareholders of this other company, on the use of over 50% of the votes granted by the shares in this other company. The proxy giving power to the company to represent another shareholder and to vote for him and make decisions shall be a sufficient proof of such an agreement. 5. The company can exercise indirect dominant influence on a third company only if it satisfies at least one of the following conditions: 1) it is in the position to directly exercise dominant influence on another company which directly or indirectly holds the majority of the votes in a third company or which may directly or indirectly exercise dominant influence on a third company; 2) it holds directly or indirectly the majority of votes in another company which may directly or indirectly exercise  dominant influence on a third company; 3) together with the other companies in which it directly or indirectly holds the majority of votes in them or upon which it may directly or indirectly exercise dominant influence, or those other companies jointly hold shares in a third company which carry over 50% of votes at the General Meeting or provided it satisfies the conditions listed in paragraph 4 of this Article. Article 8. Financial Year of the Company The company’s financial year shall be the calendar year. Other 12-month periods specifying the beginning and the end of the financial year may also be set in the company’s Articles of Association. If the company was registered after the commencement of the financial year, the day on which the company’s financial year ends, as provided for in its Articles of Association, shall be considered as the close of the company’s financial year.  If the company is cancelled from the Register prior to the close of the financial year, the last financial year shall end: 1) in case of liquidation - on the day of drawing up of the document of liquidation; 2) in case of reorganisation - on the day of drawing up of the document of transfer of property. CHAPTER TWO INCORPORATION OF THE COMPANY Article 9.  Memorandum of Association 1. The incorporators of the company shall sign the Memorandum of Association. If the company is formed by one person only, he shall sign not the Memorandum of Association, but a document of incorporation to which the requirements of the Memorandum of Association shall apply, except for the requirements laid down in subparagraphs 10 and 12 of paragraph 3 of this Article. 2. The company’s Memorandum of Association shall be a public document. 3. The Memorandum of Association must indicate: 1) the incorporators (names, surnames, personal codes and addresses of natural persons; names of legal persons, their codes, addresses of their registered offices, names and surnames of the representatives of the said persons); 2) the name of the company; 3) the powers and obligations of the incorporators in the incorporation of the company as  well as liability for defaulting on their obligations; 4) persons (incorporators and other persons) who may represent the company being incorporated and their powers; 5) the amount of the company’s authorised capital, nominal value of shares, the price of issue of the shares; 6) the number of shares acquired by each incorporator, specifying their number according to types and classes; 7) the rights granted by the shares acquired by the incorporators; 8) the procedure and time limits for the payment for shares, including the procedure and time limits for the payment of initial contributions, default interest for shares not paid up by the due date. The default interest may not be less than 0.05%  of the unpaid amount for each missed day; 9) the procedure for convening the statutory meeting; 10) the procedure for submitting to the incorporators the documents of the company which is being incorporated, also of information relating to the statutory meeting; 11) compensation of incorporation costs and remuneration for incorporation; 12) procedure of settlement of disputes between the incorporators; 13) the date of signing the Memorandum of Association. 4. The Memorandum of Association may also contain other provisions which do not conflict with other laws of the Republic of Lithuania. 5. The Memorandum of Association shall be signed by all incporporators or their representatives. Where at least one of the inocporators is a natural person, the Memorandum must be notarised. Where all incorporators are legal persons, the signatures of their managers or  authorised persons  shall be attested by seals. The procedure established for attesting the signatures of natural persons shall be applied with respect to a foreign legal person who does not possess a seal. 6. The company’s Memorandum of Association, drawn up and signed in the manner laid down in this Law, shall grant the right to open an accumulative deposit account of the company which is being incorporated with a bank registered in the Republic of Lithuania and, in case of incorporation of a public limited liability company, to register the shares with the Securities Commission.   Article 10. Subscription  and Payment for Shares of a Company which is being Incorporated 1. The shares of the company which is being incorporated shall be signed by its incorporators. The terms and conditions of the share subscription agreement shall be set out in the Memorandum of Association. 2. Where a public limited liability company is being incorporated, the terms and conditions of the Memorandum of Association, laid down according to the requirements of subparagraphs 6, 7 and 8  of paragraph 3 of Article 9 of this Law shall become effective only after the registration of the shares with the Securities Commission. 3. The shares of a company which is being incorporated must be fully paid within the time limit set in the Memorandum of Association, which may not be longer than 12 months from the date of drawing up and signing of the Memorandum of Association. 4. Paragraphs 1, 2, 7, 8 and 9 of Article 48 of this Law shall apply to the payment for shares of a company which is being incorporated. 5. At the time the company is incorporated, the initial contributions for the shares subscribed for shall be paid only in cash into the accumulative account of the company which is being incorporated within the time limit set in the Memorandum of Association. The company shall be entitled to use the funds in the account only after its registration. The initial contribution of each incorporator shall be not less than one quarter of the nominal value of the shares subscribed for by him plus the whole of any premium, whereas the total amount of initial contributions received prior to the statutory meeting must be not less than the minimum authorised capital of the company prescribed by Article 2 of this Law.  6. If the incorporator partly pays up the shares in money’s worth, the assets used for payment for company shares and the value thereof must be indicated in the Memorandum of Association. Valuation of the contribution made otherwise than in cash prior to the signing of the Memorandum of Association must be made by assets valuers according to the procedure specified in the laws and other legal acts of the Republic of Lithuania  which regulate property valuation. 7. The assets valuers who make valuation of contributions made otherwise than in cash must draw up a valuation report indicating, besides other information: 1) the person valuation of whose assets has been made; 2) description of every element of the assets the valuation whereof has been made; 3) description of the valuation methods used; 4) the nominal value of shares acquired for consideration other than in cash; 5) conclusion whether the established value of the assets comprising the contribution made otherwise than in cash corresponds to the number and issue price of shares to be issued for the contribution. 8. The report of the valuers of assets who made the valuation of assets comprising the consideration other than in cash for shares of a public limited liability company which is being incorporated shall be disclosed in the manner prescribed by law. Article 11. Right to Act on Behalf of the Company which is being Incorporated 1. Before the registration of the company the persons indicated in the Memorandum of Association shall be entitled to enter into contracts on behalf of the company. Such a contract shall impose obligations on the company upon its approval by the General Meeting. If the General Meeting refuses to approve the contract, the persons who entered into it shall be jointly liable for the obligations under the contract. 2. The incorporators of the company or other persons indicated in the Memorandum of Association may receive remuneration from the company for the incorporation of the company or compensation of company incorporation expenses substantiated by documents. Disputes between the incorporators and other persons indicated in the Memorandum of Association regarding the compensation of company incorporation expenses and remuneration for company incorporation shall be settled in court. 3. The shareholders or the company may demand that the incorporators or other persons indicated in the Memorandum of Association compensate for the losses incurred by the company prior to its registration due to their misfeasance, dealing with company incorporation matters in bad faith. The shareholders or the company shall not be entitled to compensation for damage incurred due to contracts approved of by the General Meeting. Disputes concerning compensation for damage shall be settled in court.   Article 12. Statutory Report 1. After all initial contributions for the shares have been paid, the incorporators of the company shall, no later than 15 days before the statutory meeting, draw up the statutory report, which shall specify: 1) incorporation expenses; 2) paid-up authorised capital (paid-up nominal value of shares); 3) proceeds from the sale of shares; 4) expected assets comprising the contribution to be made otherwise than in cash for the subscribed for shares, the value of the contributions and reference to the reports of the valuers of assets who made the valuation of assets comprising the contribution other than in cash; 5) the number of shares subscribed for by each incorporator, for which he has paid the initial contribution, also the number of the shares by types and classes; 6) incorporation expenses subject to reimbursement, remuneration for company incorporation. 2. Each incorporator shall be granted access to the statutory report and shall be entitled to receive its copy. Article 13. Statutory Meeting 1. After all initial contributions have been paid, the incorporators must convene the statutory meeting before the registration of the company. 2. Provisions prescribed by this Law for the General Meeting, except for the requirements set forth in Articles 24(1), 26, 27(1) and 28 of this Law,  shall apply to the statutory meeting. The incorporators shall have right to vote at the statutory meeting. If the statutory meeting does not have a quorum, a repeat statutory meeting shall be called. The agenda of the statutory meeting shall be drawn up by the person authorised by the incorporators in the Memorandum of Association. 3. The statutory meeting shall approve the statutory report of the company, approve the firm of auditors, elect members of the company management bodies, address other issues within the competence of the General Meeting. 4. In case of failure to approve the company’s statutory report or to elect at the statutory meeting members of the company management body who, pursuant to the Articles of Association, are elected by the General Meeting, a repeat statutory meeting shall be convened. Article 14. Registration of the Company 1. The company shall be subject to registration in the Register of Enterprises of the Republic of Lithuania. The company shall be deemed incorporated and shall acquire the rights of legal person as from the day of its registration. 2. The company shall be registered upon the payment of all initial contributions for shares subscribed for and after the holding of  the statutory meeting which approved the company’s statutory report and elected members of company management bodies who, under the company’s Articles of Association, are due to be elected by the General Meeting. 3. If the company is not registered within 4 months from the signing of the Memorandum of Association, it shall be deemed not to have been incorporated and, upon the expiry of the said time limit, the contributions paid in for the shares subscribed for shall be returned. 4. The incorporators shall within 7 days from the day of company registration transfer the documents to the company (to the company Board or, in case such has not been formed, to the head of the Administration), signing the document of transfer. Article 15. Acquisition of Assets from the Incorporator of Public limited Liability Company 1. For two years after the registration of the public limited liability company every contract of the company  for the acquisition of assets from the company incorporator, where the sum of the contract or the aggregate sum of such contracts is not less than 1/10 of the company’s authorised capital, shall become effective only after the valuation thereof by the assets valuers appointed by the Board in the manner prescribed by the laws and other legal acts of the Republic of Lithuania regulating assets valuation and after the approval of the contract/contracts at the General Meeting by an at least two-thirds majority vote and after the disclosure of the assets valuation report in the manner laid down by law. 2. In addition to other information, the assets valuation report shall contain information specified in subparagraphs 1, 2 and 3 of paragraph 7 of Article 10 of this Law and the conclusion as to whether the value of the acquired assets corresponds to the amount paid for them. 3. Paragraphs 1 and 2 of this Article shall not apply where the assets are acquired in the course of regular business activities of the company, also in respect of contracts entered into in the Central Market of the Securities Exchange. CHAPTER THREE RIGHTS AND DUTIES OF THE COMPANY AND SHAREHOLDERS Article 16.  Rights and Duties of the Company 1. The company may enter into contracts, assume obligations and have other rights and duties, provided  they do not contradict the laws of the Republic of Lithuania. 2. The company shall be entitled to lend and borrow money. The company may not engage in the activities credit institutions. The amount of funds lent by the company to natural and legal persons may not exceed its equity capital. 3. The company shall be entitled to borrow from its shareholders, both natural and legal persons, in the ways prescribed by laws. When borrowing from its shareholders, the company may not offer its assets to the shareholders as a colateral. When the company borrows from the shareholders under a loan agreement, the annual rate of interest may not be higher than the last quarter’s weighted average rate of annual interest on the Republic of Lithuania Treasury bills published in “Valstybės žinios” (Official gazette) by the Government or the institution authorised by it. 4. The company may not make advance payments, either directly or indirectly, grant loans or guarantee discharge of obligations where the purpose of the above actions is to provide conditions for other persons to acquire shares in the company. 5. If the company has not settled accounts with the creditors within the fixed time limits and the total debt to the creditors amounts to over 1/20 of the company’s authorised capital, it must obtain the creditors’ written consent  before investing assets into another enterprise. Article 17. Information Contained in the Company’s Letters and Documents 1. The company’s documents whereby orders are placed, also its letters shall indicate: 1) the register in which the company is registered, the administrator of the register and his address; 2) the code of the company; 3) the name of the company as indicated in the company registration certificate; 4) the address of the registered office of the company recorded in the company registration certificate; 5) if the company is in liquidation, the word “in liquidation” must precede the name of the company. 2. Where reference to the capital of the company is made in the letters and documents of the company, the amount of the authorised capital and the amount of the paid-up authorised capital must be indicated. 3. The company’s documents whereby orders are placed and its letters must contain all information about the company referred to in paragraphs 1 and 2 of this Article and about the register in which the company is registered, the register administrator and his address, the name, code number and address of the branch. Article 18. Rights and Duties of Shareholders 1. Property and non-property rights and duties of shareholders shall be established by this Law and other laws of the Republic of Lithuania  and the company’s Articles of Association. The property and non-property rights of shareholders specified in Articles 19 and 20 of this Law may not be subjected to any restrictions, except in cases specified by laws or by court order. 2. The shareholders shall have no financial obligations to the company save for the obligation to pay up, in the prescribed manner, all the shares subscribed for at their issue price. The resolution of the General Meeting obligating all or part of the shareholders to make additional contributions shall be invalid if at least one of them objects to the resolution. 3. A share shall not be divisible into parts. If a share is held by several shareholders, all its holders shall be considered to be a single shareholder. The rights carried by the share shall be exercised by one shareholder as per common notarised agreement. The holders of the share shall be jointly liable for the shareholders’ obligations.   4. In order to implement their property and non-property rights, two or more shareholders may conclude the shareholders’ agreement. The agreement must specify the following: 1) the shareholders - name and surname, personal code number and address of natural persons; name, code number and address of the registered office of legal persons; 2) the company’s name; 3) commitments of the shareholders - parties to the agreement as regards voting on all or on individual items on the agenda of the General Meeting, regarding the implementation of resolutions adopted by the meeting or non-property rights; 4) responsibility for failure to honour the commitments entered into; 5) the procedure for settling disputes between the shareholders - parties to the agreement; 6) the period of validity of the agreement.  5. The person who acquired all shares of the company or the holder of all shares in the company who transferred a part of his shares to another person must within 15 days notify the head of the company Administration of the acquisition or transfer of shares. Notifying of the acquisition of all shares, a natural person must give his name, surname, personal code number and address, whereas a legal person shall indicate its name, code number, address of the registered office. If all shares of the company are acquired by one person or the holder of all shares of the company transfers all or  a part of the company shares to other persons, the company shall notify the administrator of the register of enterprises thereof within 15 days from the day the company learnt or should have learnt thereof. Article 19. Property Rights of Shareholders 1. The shareholder shall have the following property rights: 1) to receive a part of the company's profit (dividend); 2) to receive a part of assets of the company in liquidation; 3) to receive shares without payment if the authorised capital is increased out of  the company funds, except in cases specified in paragraph 2 of  Article 44 of this Law; 4)  to have the pre-emption right, except in cases when the General Meeting decides to withdraw the pre-emption right in acquiring the company’s newly issued shares for all the shareholders; 5)  to bequeath all or part of shares to one or several persons; 6) to transfer all or part of the shares into the ownership of other persons. In the private limited liability company this right is limited according to the procedure established in Article 49 of this Law; 7) other property rights provided for by laws or the Articles of Association of the company. Article 20. Non-property Rights of Shareholders 1. Shareholders shall have the following non-property rights: 1) to participate in the General Meetings; 2) to receive information on the business activities of the company; 3) to appeal to the court against the resolutions or actions of the General Meeting, the supervisory Board and head of the Administration. One or several shareholders may claim, without a specific authorisation, compensation for damage caused to the shareholders; 4) to conclude a contract with the firm of auditors for auditing the company’s activities and documents as prescribed by paragraph 3 of Article 60 of this Law; 5) other non-property rights provided for by laws or the company’s Articles of Association. 2. If all the voting shares of the company are of the same nominal value, all shares, except for special shares the status whereof is regulated by Article 46 of this Law, shall each carry one vote at the General Meeting 3. The company’s Articles of Association may establish that shares of certain classes do not carry voting rights. 4. Except in cases where the shareholder has acquired all the shares of the company, he shall not be entitled to vote: 1) on the approval of the contracts concluded by him with the company where such approval is required under the laws or the company’s Articles of Association; 2) on the adoption of the resolution to withdraw the right of pre-emption in respect of the shares or convertible debentures issued by the company if  the right to acquire the above securities is thereby granted to him, his spouse, parents (adoptive parents) and children (adopted children); 3) where the company is operating at a loss due to the violation of provisions of paragraph 8 of  Article 22 of this Law, on the suitability for the office held by the members of the Supervisory Board, the Board or the head of the Administration, when this issue is considered by the General Meeting, if he himself is the person under consideration. 5. If voting shares are of different nominal value, one share of the lowest nominal value shall give its holder one vote. The number of votes granted by other shares shall be equal to their nominal value divided by the smallest nominal value of a share. A number of votes shall also be given where in the cases set forth by this Law the right to vote is granted to the owners of non-voting shares. A different procedure for determining the number of votes may also be provided for by the Articles of Association, however, the number of votes given by a share shall be proportionate to its nominal value. 6. The right to vote at the General Meeting convened prior to the expiry the time limit for the payment for the first issue of shares, specified in the Memorandum of Association, shall be given by the shares for which initial contributions have been paid, thereafter voting rights shall be carried only by fully paid shares. 7. At the shareholder’s written request the company must within 5 working days from the receipt of the request present to him for inspection and/or copying annual and interim financial statements, reports on the activities of the company, minutes of the General Meetings and the register of shareholders; the company shall also present minutes of the Supervisory Board and Board meetings to the shareholders who have given a written pledge prescribed by the company not to disclose a commercial secret provided that the minutes contain no restricted information relating to the company’s stock events. A commercial secret shall be information (except for the public information specified by the laws of the Republic of Lithuania) which  is attributed to commercial secrets by the resolution of the company Board. Having given a written pledge not to disclose the commercial secret, the shareholder who owns shares the total nominal value whereof accounts for at least 1/20 of the company’s authorised capital or the proxy of the shareholders who own shares the total nominal value whereof accounts for at least 1/20 of the company’s authorised capital shall have the right of access to all minutes of the Supervisory Board or the Board, the contracts entered into by the company, also the offered guarantees, surety, contracts of mortgage and exchange of fixed assets. The shareholders who own shares which carry over 1/2 of all votes shall have the right of access to all company documents. The shareholder or the proxy shall be liable under law for the disclosure of a commercial secret. At the shareholder's request, refusal to present the requested documents must be executed in writing. Disputes relating to the shareholder’s right to information shall be settled in court. 8. Documents or other information relating to the company must be furnished to the shareholders free of charge, unless the company’s Articles of Association provide otherwise. The charge fixed in the Articles of Association may not exceed the cots of furnishing of the documents and other information. 9. The register of shareholders presented to the shareholders shall state the names, surnames (names of legal persons) of the shareholders, the number of registered shares owned by the shareholders, the shareholders’ addresses for correspondence according to the most recent data available to the company. Article 21. Proxies 1. The shareholder shall have the right to authorise another person to vote for him as his proxy at the General Meeting or perform other legal acts.  The proxy of the shareholder who is a natural person must be notarised, whereas the proxy of the shareholder who is a legal person must be attested by it's manager's signature and the seal. The procedure for attesting the signature established for natural persons shall be applied  with respect to a foreign legal person who does not possess a seal. The shareholder may by a general written proxy authorise the intermediary of public trading in securities who manages his personal account of the company securities. 2. Upon arrival at the General Meeting and signing in the shareholders registration list, the shareholder’s proxy must present to the person in charge of the registration of the participants in the Meeting the original of the proxy or a notarised copy thereof. The name of the person who gave the proxy and the time when the proxy was given as well as the number and period of validity  of the proxy shall be recorded in the registration list. 3. The shareholder may withdraw his proxy. He must notify the company in writing of the withdrawal of the proxy.  4. If the proxy fills in the general ballot on behalf of the shareholder and submits it to the company before it receives the shareholder’s notice of the withdrawal of the proxy, the general ballot shall be deemed valid and the shareholder shall not be entitled to vote at the shareholders’ meeting, except in the case where the shareholder proves that the proxy knew or should have known about the withdrawal of the proxy before the submission of the general ballot to the company. 5. If shares are sold or otherwise transferred to the depository (an institution which keeps records of securities,  organises and controls operations with securities) and the bank further converts them issuing depositary receipts or using other financial instruments, the authorised agent of the depository shall vote at the General Meeting following the written directions of the shareholders or according to the shareholders’ agreement. CHAPTER FOUR MANAGEMENT OF THE COMPANY Article 22. Management Bodies 1. The management bodies of the company shall include the General Meeting, the Supervisory Board, the Board,  and the head of the Administration. 2. The compulsory management bodies of a public limited liability company shall be the General Meeting, the head of the Administration and at least one collegial management body - the Supervisory Board or the Board. 3. The compulsory management bodies of a private limited liability company shall be the General Meeting and the head of the Administration. Formation of the Supervisory Board and the Board in a private limited liability company shall not be compulsory. 4. If the Supervisory Board is not formed in the company, its functions shall not be assigned to other management bodies. 5. Where the Board is not formed in the company, its functions, rights, duties and responsibility established by this Law shall be taken over by the head of the Administration, save for the rights and duties taken over pursuant to this Law by the Supervisory Board or the General Meeting. 6. In case the General Meeting adopts amendments to the Articles of Association regarding the number of the Supervisory Board or Board members or a new management body, the newly-elected members of the management body shall commence their activities no earlier than from the day of registration of the amendments to the Articles of Association in the Register of Enterprises of the Republic of Lithuania. 7. The General Meeting shall not be entitled to charge other management bodies to address the issues assigned to its competence. The General Meeting shall have the right to obligate to address the issues assigned to the competence of the Supervisory Board, the Board or the Administration 8. The management bodies of the company shall act only for the benefit of the company and its shareholders. The management bodies of the company shall not be entitled to make decisions or perform other actions which violate the company’s Articles of Association or are against the objects of the company specified in the Articles of Association, manifestly go beyond normal production-business risks, are undoubtedly unprofitable (purchase of goods, services or works at prices exceeding market prices or their underselling, waste of the company’s assets) or are unmistakably ineffective from the economic point of view.    Article 23. Restriction of Rights of the Members of Management Bodies 1. Unless he is given consent of the management body which elected him, a member of the Supervisory Board, the Board, the head of the Administration may not be on the Supervisory Board or Board (or bodies equivalent to them) of the enterprise engaged in similar business activities or enterprise which continues the company’s production or service process  and sale of products. Without having been given authorisation by the management body which elected him, the head of the Administration may not be the head of Administration of any other enterprise. 2. If a member of the company’s Supervisory Board, the Board or the head of the Administration violated the requirements set in paragraph 1 of this Article, he shall resign from the management bodies of the enterprise or company and be held responsible under law. 3. Every candidate to the members of the company’s management bodies must inform the management body which is electing him where and what office he holds, how his other activities are connected with the company and its parent or subsidiary companies. 4. Every candidate to the members of the company’s management bodies or member of the company’s management body shall notify the management body which is electing or has elected him if he owns shares accounting for 1/4 or more of the authorised capital of an enterprise engaged in similar activities or an enterprise which continues the company’s production or services process and sale of products. 5. If a member of the company’s management body violates the requirements of this Law, every shareholder of the company shall be entitled to appeal to the court for the compensation of damage caused to the company within 90 days from the day when he found out or should have found out of the violations committed by the management body member. Article 24. General Meeting 1. The General Meeting is the supreme management body of the company. All persons who are the shareholders of the company on the day of the meeting, irrespective of the number and class of shares they hold, shall have the right to attend the company's General Meeting, unless the company’s Articles of Association provide that the General Meeting (including a repeat meeting) may be attended by persons who were shareholders of the public limited liability company at the close of the shareholders’ registration day of the General Meeting. The shareholders’ registration day of the General Meeting shall be not earlier than 30 days and not later than 10 days prior to the General Meeting in respect of which the day is designated and not earlier than the tenth day after the Board meeting which designated the day. Members of the Supervisory Board and the Board as well as the head of the Administration, even though they are not shareholders,  shall be entitled to participate in the Meeting and be given the floor. Every General Meeting shall elect the chairman and secretary of the meeting, except in the case specified in paragraph 7 of this Article. 2. Only the General Meeting may: 1) amend and supplement the Articles of Association of the company (except for the cases provided for in paragraph 6 of Article 39, paragraph5 of   Article 51, paragraph 3 of Article 52 and  paragraph 6 of Article 55 of this Law); 2) approve the firm of auditors, elect the members of the Supervisory Board, if the Supervisory Board is not formed - members of the Board, if the Board is not formed -  the head of the Administration; 3) dismiss the firm of auditors, members of the Supervisory Board, members of the Board elected by the General Meeting, the head of the Administration. If the company is operating at a loss, the General Meeting must consider the suitability for office of the members of the Supervisory Board, the Board, or the head of the Administration; 4) fix the conditions of payment for auditing services, the annual payments (bonuses) from the net profit to the members of the Board and the Supervisory Board pursuant to the provisions of Article 61 of this Law; 5) approve the annual financial statements, the business report of the Board (if the Board is not formed - the head of the Administration); 6) adopt a resolution to increase the authorised capital: 7) determine the type, class, number and set the minimum issue price of the shares issued by the company; 8) adopt a resolution to withdraw for all the shareholders the pre-emptive right to acquire the shares or convertible debentures of the specific issue of shares or convertible debentures issued by the company; 9) adopt a resolution to reduce the authorised capital  (with the exception of cases provided for in paragraphs 5 and 6 of  Article 39 and  paragraph 6 of  Article 55 of this Law; 10) adopt a resolution to issue convertible debentures; 11) adopt a resolution to exchange the company’s shares of one type or class for those of another type or class, approve the procedure of exchange of shares; 12) adopt a resolution for the company to purchase its own shares; 13) adopt a resolution to liquidate the company or to cancel the liquidation of the company (with the exception of the cases provided for in subparagraphs 2, 3 and 4 of paragraph 1 of  Article 75 of this Law); 14) elect and dismiss the liquidator of the company (with the exception of the cases provided for in subparagraphs 2, 3 and 4 of paragraph 1 of Article 75 and paragraph 1 of Article 76 of this Law); 15) adopt a resolution to reorganise the company and approve the draft plan of reorganisation (except in the case provided for in Article 73 of this Law); 16) for a period of two years from the registration of a public limited liability company approve the contracts for the acquisition of assets from the incorporator of the company  if the sum of a separate contract or the total sum of contracts amounts to at least 1/10 of the company’s authorised capital; 17) adopt a resolution on the appropriation of the profit (except in the case provided in paragraph 8 of Article 61  of this Law); 18) adopt a resolution to build up reserves, with the exception of the revaluation reserve; 19) adopt a resolution on the transfer, lease or mortgage of fixed assets the value whereof amounts to over 1/20 of the company’s authorised capital as well as on offering guarantee, surety for the discharge of obligations of other entities, when the amount of the obligations exceeds 1/20 of the company’s authorised capital. 3. The General Meeting may also adopt other resolutions which are not provided for under this Law for the other management bodies of the company. 4. The person who is on the list of registered share holders, compiled on the day of the General Meeting or on the day of record of shareholders  of the General Meeting of the public limited liability company, may attend the General Meeting upon producing a document which is a proof of personal identity. The holder of bearer shares may also attend the General Meeting upon presenting an excerpt from the account issued by the securities account manager about the bearer shares owned by him or which he owned at the close of the day of record of the General Meeting.  5. The shareholders (their proxies) taking part in the General Meeting shall be registered by signing in the shareholder registration list.  The shareholder registration list must indicate the number of votes held by each shareholder. The list shall be signed by the chairman and secretary of the Meeting. The shareholders who have already voted by the general ballot must be named in the registration list. 6. The minutes of the General Meeting shall be within 3 working days signed by the chairman, the secretary of the Meeting and at least one shareholder authorised by the Meeting. The shareholders who have at least 1/20 of votes at the General Meeting shall be entitled to additionally appoint their representative for the signing of the minutes of the General Meeting. To that end they shall present to the chairman of the Meeting an application signed by the shareholders. The person authorised (appointed) to sign the minutes shall be entitled to present his commentaries or opinion in writing about the facts set out in the minutes. 7. The Government shall not elect the chairman and secretary of the Meeting if it is attended by less than three shareholders. In such event the shareholder registration list and the minutes of the General Meeting shall be signed by each shareholder attending the General Meeting. 8. Settlement of disputes relating to the invalidity of the minutes of the General Meeting or parts thereof shall be within the jurisdiction of the court. The list of registration of the attending shareholders, the proxies and the general ballots of shareholders who voted in advance as well as documents which are proof of the shareholders having been notified of the convening of the General Meeting shall be attached to the minutes of the General Meeting. The minutes of the General Meeting at which the resolutions changing the information on the company kept with the Register of Enterprises of the Republic of Lithuania were adopted, the minutes (copies thereof) with annexes (copies thereof) must be presented to the administrator of the Register of Enterprises within 10 days after the meeting. Minutes of the General Meetings are official documents. They shall be preserved and kept in accordance with the procedure established by the Law of the Republic of Lithuania  on Archives. Falsification of the above minutes shall be punishable in the manner prescribed by law. Article 25. Inspector of the General Meeting 1. The General Meeting of the company may elect the inspector of the General Meeting for the next General Meeting. The inspector of the General Meeting shall be a shareholder of the company. 2. If the General Meeting fails to elect the inspector for the next General Meeting or where the elected inspector is not in the position to perform his duties, he shall be appointed by the Board prior to the Meeting, in case the election of the inspector is provided for in the Articles of Association of the company. 3. The inspector of the General Meeting shall establish: 1) the total number of shares carrying the right to vote at the Meeting; 2) the number of submitted valid and invalid general ballots filled in advance; 3) the number of valid and invalid proxies submitted; 4) the number of vote-carrying shares represented at the Meeting (both personally and through a proxy and having filled in the general ballot-papers); 5) whether the Meeting has a quorum; 6) the results of voting at the Meeting. Article 26. Convening the General Meeting 1. The right of initiative to convene the General Meeting shall be vested in the Supervisory Board, the Board and the shareholders who have at least 1/10 of all votes, unless the Articles of Association provide for a smaller amount of votes, as well as the institution which holds special shares. 2.  The General Meeting shall be convened on the resolution of the Board. If the Board has not been formed in the company, or if the number of the company’s Board members is not more than one half of their number specified in the Articles of Association, the General Meeting shall be convened on the decision of the head of the Administration. The General Meeting must be convened on the decision of the head of the Administration if the Board of the company fails to convene the Meeting in the instances and within the time limits provided for in this Law. The General Meeting may be convened on the decision of the shareholders with more than 1/2 of all votes or holding special shares if the persons who attempted to initiate the convening of the meeting did not receive a favourable decision of the company’s Board or head of the Administration as regards the convening of the General Meeting. 3. The General Meeting may be called upon the court order if: 1)  the meeting has not been called within 4 months of the end of the financial year and at least one  shareholder has brought the matter to court; 2) the initiators of the General Meeting applied to the court with a complaint about the failure by the Board or the head of the Administration to convene the General Meeting as prescribed by paragraph 6 of this Article; 3)  the creditors of the company applied to the court complaining about the failure to call an Extraordinary General Meeting in the case specified in subparagraph 1 of paragraph 5 of this Article. 4. The Board must convene the Annual General Meeting each year within 4 months of the end of the financial year. 5. The  Extraordinary General Meeting must be convened if: 1) the company’s equity capital falls below  3/4 of the authorised capital specified in the Articles of Association; 2) the number of the Supervisory Board or Board members has declined to 2/3 of their number specified in the company’s Articles  or less than their minimum number prescribed by this Law (because of the retirement or inability to continue in office); 3) the head of the Administration of a private limited liability company, elected by the General Meeting, resigns or is not in the position to continue performing his duties; 4) the firm of auditors terminates the contract with the company or is for any other reasons unable to audit the company’s annual statements; 5) it is requested by the shareholders with the right of initiative, the Supervisory Board or the Board; 6) the duration of the company specified in the Articles of Association is drawing to a close; 7) it is required under other laws or the company’s Articles. 6. The persons who initiated the convening of the General Meeting shall file an application with the Board (if the Board is not formed or the number of Board members is not more than half of their number indicated in the Articles - to the head of the Administration), indicating the reasons and objectives of convening the Meeting,  the drafts of the proposed resolutions, proposals regarding the date and place of the Meeting. If the Board (or the head of the Administration) fails to come to an agreement with the persons initiating the Meeting on settling in any other way the issues proposed for the Meeting, it must convene the General Meeting  within 40 days of the receipt of the application. 7. In the case provided for in subparagraph 6 of paragraph 5 of this Article the Extraordinary General Meeting must be convened at least 30 days before the expiry of the company duration period specified in the Articles of Association. The period of duration of the company may be extended at the Meeting  by amending the Articles of Association of the company or the liquidator shall be elected. 8. The venue of the General Meeting must be in territory of the municipality in which the registered office of the company is located. If the shares of the public limited liability company are listed on the Official List of the Stock Exchange registered in the Republic of Lithuania, the venue of the General Meeting may be in the territory of the municipality where the headquarters of the Stock Exchange are located. Article 27. Agenda of the General Meeting 1. The agenda of the General Meeting shall be drawn up by the company management body or institution upon adopting a decision to convene the General Meeting. Issues proposed by the persons initiating the Meeting must be included in the agenda of the Meeting. 2. The agenda of the General Meeting may be supplemented upon the proposal to include new issues, put forward by the Supervisory Board, the Board (if the Board is not formed -  the head of the Administration), the institution holding special shares or shareholders with not less than 1/20 of all votes. The proposal to supplement the agenda may be submitted not later than 15 days before the General Meeting. The company management bodies and persons specified in this paragraph may also submit new drafts of resolutions, propose additional candidates to the company management bodies, the firm of auditors. The Articles may also provide for less votes entitling the shareholders to supplement the agenda of the General Meeting, propose new draft resolutions, additional candidates to the members of company management bodies elected by the General Meeting, the firm of auditors. 3. If the agenda of the Meeting referred to in the notice on the calling of the Meeting has been changed, the shareholders must be notified of the changes in the agenda in the same manner in which the notice of the General Meeting is given no later than 10 days before the Meeting. 4. If removal from office of the members of the company management bodies or dismissal of the firm of auditors is on the agenda of the General Meeting, the issues regarding the election of new members of the management bodies or approving a new firm of auditors must accordingly be included in the agenda. 5. The General Meeting shall not be entitled to adopt resolutions on issues not on the agenda if it is not attended by all the voting shareholders. 6. Only the agenda of the Meeting which failed to take place shall be valid at repeat meeting. Article 28. Notice of the General Meeting 1. The management body of the company or the institution which passed a decision to convene the General Meeting shall present to the head of the Administration information and documents required for giving a notice of the General Meeting. The head of the Administration must publish the notice of the General Meeting in the periodical publications specified in the Articles of Association or hand in the notice to every shareholder against by his signature or send the notice by registered mail no later than 30 days before the day of the Meeting. The General Meeting may be convened without observing the above time limits if all voting shareholders or their proxies give their written consent thereto. The shareholders of private limited liability companies shall in all cases be delivered the notices upon their signed acknowledgement of the delivery or by a registered letter. The head of the Administration shall inform the shareholders at the opening of the Meeting of the documents proving that the shareholders have been given notice of the General Meeting. The documents must be attached to the minutes of the General Meeting. 2. If a repeat meeting is convened, the shareholders must be informed in the manner laid down in  paragraph 1 of this Article. In this case an at least 10 days’ notice is required. 3. Notices of the General Meeting must specify: 1) the name of the company and the address of the registered office; 2) the date, time and place of the Meeting; 3) the agenda of the Meeting; 4) the company’s management body or the institution which adopted the decision to convene the General Meeting and the persons who initiated the calling of the Extraordinary General Meeting; 5) where the passing of the resolution on the reduction of the authorised capital is on the agenda of the Meeting - the purpose and intended method of the reduction of capital. 4. At least 30 days before the General Meeting the shareholders must be granted access to the documents available to the company, relating to the agenda of the Meeting, including drafts of the resolutions, as well as the application filed with the Board (or the head of the Administration) by the persons who initiated the convening of the General Meeting. If the shareholder so desires in writing, the head of the Administration shall within 3 days from the receipt of the written request deliver to him upon his signed acknowledgement all draft resolutions of the Meeting or shall send him the above drafts by a registered letter. A notice must be given with the drafts of the resolutions indicating on whose initiative they have been included. Where the person who initiated the draft resolution has submitted explanations of the draft resolution, these must be attached to the draft resolutions. Article 29. Quorum of the General Meeting and Passing of Resolutions 1. A General Meeting may pass resolutions provided that it is attended by the holders of shares which carry over 1/2 of all votes. After the presence of a quorum has been established, the quorum shall remain continuously throughout the Meeting. If a quorum is not present, a repeat Meeting must be convened within 15 days, which shall be authorised to adopt resolutions on the issues on the agenda irrespective of the number of shareholders attending the Meeting. If the consent of the holders of a certain type or class of shares is necessary in order to adopt a resolution, a resolution regarding the consent may be adopted by a meeting of the holders of a certain type or class of shares, attended by the shareholders who own over 1/2 of all the shares of the type or class. The procedure for convening the General Meeting shall be applicable for calling the meeting. 2. For the purpose of establishing the total amount of the votes carried by the shares of the company and the quorum of the General Meeting, the shares the exercise of the voting right granted by which is prohibited under paragraph 7 of Article 55  of this Law, under other laws and on the basis of the court order, shall be considered as non-voting shares.  3. A possibility for voting in advance may be provided for in the Articles of Association of the company. In this case the shareholder entitled to vote at the meeting, having been presented for scrutiny the agenda and draft resolutions, may notify the General Meeting in advance in writing (by filling in the general ballot) whether he is “for” or “against” each resolution. The advance voting by ballot shall be included in the quorum of the meeting and the results of voting. The general ballots of the meetings which have not taken …