LAW AMENDING THE LAW ON COMPANIES

LAW AMENDING THE LAW ON COMPANIES Official translation REPUBLIC OF LITHUANIA LAW AMENDING THE LAW ON COMPANIES 13 July 2000 No. VIII-1835 Vilnius (as amended by 11 December 2003 No. IX-1889) Article 1. New Version of the Law of the Republic of Lithuania on Companies The Law of the Republic of Lithuania on Companies shall be amended and set forth to read as follows: "LAW OF THE REPUBLIC OF LITHUANIA ON COMPANIES CHAPTER ONE GENERAL PROVISIONS Article 1. Purpose of the Law The Law shall regulate the incorporation, management, activities, reorganisation, restructuring, division and liquidation of enterprises having the legal form of public or private limited liability companies, the rights and duties of the shareholders as well as the establishment of foreign state branches 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 provisions of the Law have been harmonised with the legal acts of the European Union listed in the Annex to this Law. Article 2. Public Limited Liability Company and Private Limited Liability Company 1. The company is an enterprise whose statutory capital is divided into shares. 2. The company is a legal person with limited liability. 3. The amount of the statutory capital of a public limited liability company may 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 statutory capital of a private limited liability company may not be less than LTL 10,000. A private limited liability company must limit the number of its shareholders to 250. The shares of a private limited liability company may not be offered for sale or traded in publicly, unless other laws provide otherwise. 5. The public limited liability company shall have its name defining the legal form it has taken including the words “akcinė bendrovė” (public limited liability company) or the acronym "AB". The private limited liability company shall have its name defining the legal form it has taken including the words “uždaroji akcinė bendrovė” (private limited liability company) or the acronym "UAB". 6. The documents the company uses in its relations with other persons must contain the information specified in Article 2.44 of the Civil Code. The above-mentioned information must also be given in the company website, where available. 7. The registered office of the company must be situated in the Republic of Lithuania. 8. The company shall act in compliance with the Statutes, the Civil Code, this Law and other laws and legal acts. Article 3. Shareholders 1. Shareholders are natural and legal persons who have each acquired shares in the company. 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. Article 4. Statutes of the Company 1 The Statutes of the company constitute the legal document governing the conduct of the company's business. 2. The Statutes must state: 1) the name of the company; 2) legal form of the company (public limited liability company or private limited liability company); 3) the registered office of the company; 4) the purposes of the company, specifying its object of activity; 5) the amount of the statutory capital of the company; 6) the number of shares and their number according to type and class, their nominal value and the rights they carry; 7) the powers of the General Meeting, the procedure for convening the Meetings; 8) other organs of the company, their powers, the procedure for electing or removing from office their members; 9) the procedure for publishing the notices of the company; 10) the daily of the Republic of Lithuania in which public notices shall be published; 11) the procedure for presenting the company documents and other information to the shareholders; 12) the decision-making procedure as regards the establishment of branches and representative offices of the company, and for appointing and removing from office the heads of the company branches and representative offices; 13) the procedure for amending the Statutes of the company; 14) the company duration period if the company is established as a company of limited duration; 15) the date of signing of the Statutes. 3. The objects of the activity of the company shall be specified in the Statutes with a brief description of the character of the economic-commercial activities of the company. 4. The Statutes of the company may also contain other provisions which are in conformity with this and other laws. 5. The powers of the General Meeting, the procedure for convening a Meeting, the powers of other organs of the company and the procedure for electing and removing from office their members need not be stated in the Statutes, unless the procedure and powers differ from those laid down in this Law and the Statutes expressly say so. 6. The Statutes of the company being incorporated must be signed by all the incorporators or their representatives before the statutory meeting. 7. The Statutes of the company being incorporated shall become invalid if they are not submitted to the Administrator of Legal Persons' Register within 6 months from the day of the signing thereof by all the incorporators. 8. Following the decision by the General Meeting to amend the Statutes of the company, the full text of the amended Statutes shall be drawn up and signed by the person authorised by the General Meeting. 9. The signature of the persons who signed the Statutes need not be notarised. Article 5. Parent Company and Subsidiary 1. A company shall be considered a parent company if it directly and/or indirectly holds a majority of the voting rights 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 be deemed to directly hold a majority of the voting rights in another company if it has acquired shares in the other company granting it over 50% of voting rights at the General Meeting. 3. A company shall be deemed to indirectly hold a majority of the voting rights in a third company when it directly holds a majority of the voting rights in the company which directly or indirectly holds a majority of voting rights in the third company. 4. For the purposes of this Law, a company shall be in the position to directly exercise a dominant influence on another company if it holds shares in that other company and: 1) has the right to elect or remove the manager, the majority of members of the Board or Supervisory Board of that other company , or 2) holds a majority of voting rights in that other company under the agreements concluded with other shareholders. 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. It shall be deemed that a company is in the position to indirectly exercise a dominant influence on a third company only provided that the company satisfies at least one of the following conditions: 1) the company is in the position to directly exercise a dominant influence on another company which directly or indirectly holds a majority of the voting rights in a third company or which may directly or indirectly exercise a dominant influence on a third company; 2) the company directly or indirectly holds a majority of the voting rights in another company which is in the position to directly or indirectly exercise a dominant influence on a third company; 3) together with the other companies in which the company concerned directly or indirectly holds a majority of voting rights or upon which it may directly or indirectly exercise a dominant influence, the company holds a majority of voting rights in a third company or those other companies referred to in this subparagraph jointly hold a majority of the voting rights in a third company. CHAPTER TWO INCORPORATION OF THE COMPANY Article 6. Incorporators 1. A company may be incorporated both by natural and by legal persons. 2. Every incorporator of a company must acquire shares in the company and become its shareholder. 3. The documents drawn up in the name of the company being incorporated and the documents connected with the incorporation of the company must be delivered by a transfer deed to the company manager within 7 days from the registration of the company. Article 7. Instrument of Incorporation and Act of Establishment 1. The Instrument of Incorporation shall be drawn up when the company is established by two or more incorporators. If the company is formed by one person only, the act of establishment shall be drawn up. 2. The Instrument of Incorporation of the company shall indicate: 1) the incorporators (full name, personal number and address of the natural person; name of the legal person, legal form taken, its registration number, registered office, register in which data relating to the person is accumulated and kept and full name, personal number and place of residence of the representative of the legal person); 2) the name of the company being incorporated; 3) the persons who have the right to represent the company being incorporated and their rights and duties; 4) the amount of the statutory capital of the company; 5) nominal value of shares, the share issue price; 6) the number of shares according to classes, the rights attached to the shares; 7) the number of shares acquired by each incorporator and the number of shares according to classes; 8) the procedure and time limits for the payment for the shares acquired by each incorporator, including the procedure and time limits for the payment of initial contributions; 9) the contribution in kind and its value if payment for shares is made partly in kind; 10) the time limits for convening the statutory meeting; 11) the procedure for submitting the documents of the company being incorporated and of information relating to the statutory meeting to the incorporators; 12) compensation of incorporation costs and remuneration for incorporation; 13) the procedure for concluding contracts in the name of the company and for the approval thereof; 14) the initial contribution repayment procedure should the company be refused registration; 15) the date of signing of the Instrument of Incorporation. 3. The Instrument of Incorporation may contain other provisions which are not contrary to other laws of the Republic of Lithuania. 4. The Instrument of Incorporation shall be signed by all incporporators or persons authorised by them. 5. The Instrument of Incorporation of the company, 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 being incorporated with a bank. 6. The Instrument of Incorporation of the company shall be submitted to the administrator of the Register of Legal Persons together with the other documents prescribed by laws for the registration of the company. If the Instrument of Incorporation is amended prior to the registration of the company, the Instrument of Incorporation shall be submitted to the administrator of the Register of Legal Persons together with the amendments. 7. The requirements laid down in paragraph 2 of this Article (subparagraphs 10 and 11 excluded) shall be applied to the contents of the Instrument of Incorporation of the company. Paragraphs 3 to 6 shall also be applied to the act of establishment . Article 8. Subscription and Payment for Shares of the Company being Incorporated 1. The incorporators shall not conclude a separate share subscription agreement, the terms of the share subscription agreement shall be set out in the Instrument of Incorporation or act of establishment. The Instrument of incorporation of the company or act of establishment shall also be treated as share subscription agreement. 2. The shares of a company being incorporated must be fully paid up within the time period set in the Instrument of Incorporation or act of establishment, which may not exceed 12 months from the date of signing of any of the above documents.                     3. Paragraphs 1, 2, 7, 10, 11 and 12 of Article 45 of this Law shall apply to the payment for shares of a company being incorporated. 4. The initial contributions for the shares subscribed for shall be paid within the time period set in the Instrument of incorporation or act of establishment to the accumulative account of the company being incorporated. The funds in the account may be used only after the registration of the company. 5. The initial contribution of each incorporator shall be paid in money's worth only. It shall be not less than one quarter of the nominal value of the shares subscribed for by the incorporator plus the whole of any premium. 6. The total amount of initial contributions paid must be not less than the minimum statutory capital of the company prescribed by Article 2 of this Law. 7. After the incorporation of the company the remaining part of the shares subscribed for by the incorporator may be paid for both in money's worth or by contributions made otherwise than in cash. 8. The contributions made otherwise than in cash which are intended for paying up for a part of shares must be valued by an independent asset valuer prior to the signing of the Instrument of Incorporation or act of establishment according to the procedure specified in the legal acts which regulate asset valuation. The valuation report shall indicate, inter alia, the following: 1) the person valuation of whose assets has been made (full name, personal number and place of residence of the natural person; the name, legal form taken, code and registered office of the legal person); 2) description of every element of the assets the valuation whereof has been made; 3) description of the valuation methods used; 4) the number and nominal value of shares to be acquired for consideration made otherwise than in cash; 5) the conclusion whether the established value of the assets comprising the contribution made otherwise than in cash corresponds to the number of shares to be issued for the contribution at their nominal value. 9. The asset valuation report referred to in paragraph 8 of this Article must be submitted to the incorporators prior to the signing of the Instrument of Incorporation or the act of establishment . 10. The asset valuation report indicated in paragraph 8 of this Article must be submitted to the administrators of the Register of Legal Persons together with other documents required under law for the registration of the company. Article 9. Statutory Report 1. After all initial contributions for the shares have been paid, the incorporators of the company shall, no later than 10 days before the statutory meeting, draw up the statutory report, which shall indicate: 1) incorporation expenses; 2) the amount of paid-up statutory capital; 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 made otherwise 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 classes; 6) incorporation expenses subject to reimbursement, remuneration for company incorporation. 2. The statutory report shall be submitted to the administrator of the Register of Legal Persons together with all other documents prescribed by law for the registration of a public limited liability company. Article 10. Statutory Meeting 1. The statutory meeting must be convened before the registration of the company. 2. At the statutory meeting each incorporator shall have the number of voting rights that are granted to him by the shares subscribed for by him. 3. The provisions on representation, establishment of the quorum, decision making and drawing up of the minutes shall be applied to the statutory meeting (repeat statutory meeting included). 4. The statutory meeting shall approve the statutory report of the company, elect members of the company management organ who are elected by the General Meeting, and may also settle other issues within the powers of the General Meeting as provided for in this Law. CHAPTER THREE Article 11. Company Registration 1. The company shall be deemed incorporated from the date of its registration in the Register of Legal Persons. 2. The company shall be registered upon the valuation of the contributions made otherwise than in cash as partial payment for shares, after the signing of the Instrument of Incorporation or the act of establishment and of the Statutes of the limited liability company being incorporated, after the holding of the statutory meeting which approved the statutory report of the company and elected members of company management organs which, under the Statutes of the company, are elected by the General Meeting, also following the election of the Board (where its election is provided for in the Statutes) and the company manager and following the fulfilment of other obligations established by other laws and the Instrument of incorporation or following the filing of the documents prescribed by law with the administrator of the Register of Legal Persons. Article 12. The Particulars Given in the Register of Legal Persons 1. In addition to the data listed in Article 2.66 of the Code of Civil Procedure, the following particulars shall be given in the Register of Legal Persons: 1) particulars of the Supervisory Board members, indicating the Supervisory Board chairman, dates of their election and expiration of the term of office; 2) the particulars about the Board chairman and the date of election and expiration of the term of office of the Board members and company manager; 3) the rule of quantitative representation, if quantitative representation is prescribed by the Statutes of the company, and particulars of the persons entitled under the above rule of quantitative representation to act together in the name of the company, the scope of their rights, duration of their term of office where such is set, as well as signature specimens of the representative and other member of the organ who are acting according to the rule of quantitative representation; 4) particulars of the shareholder of the company where the shareholder of the company is one person; 5) the date of beginning and end of the financial year of the company; 6) the period of duration of the company where the company is of limited duration; 7) the particulars of the liquidator, the date of his appointment and expiry of the term of office, the powers of the liquidator, except for those provided for by laws and the Statutes of the company. 2. The particulars of the natural persons, referred to in paragraph 1 of this Article, shall comprise the natural person's full name, personal number and place of residence, while the particulars relating to legal persons shall include the name of and legal form taken by the legal person, its code and registered office. 3. If any changes are made to the data of the Register of Legal Persons or the Statutes of the company or if other documents provided for by law must be submitted, the manager of the company shall present to the administrator of the Register of Legal Persons within the time limit set by laws the document confirming the decision taken by the organ of the company, where such a decision is necessary under law, as well as other documents prescribed by legal acts. 4. In its relations with the third persons the company may invoke the data, information and documents of the Register of Legal Persons only after the publication thereof according to the procedure laid down in the Regulations of the Register of Legal Persons, unless the company proves that the third persons had knowledge thereof. However, when conducting the transactions concluded before the sixteenth day after the publication, the company may not invoke the data, information and documents given in the Register of Legal Persons, unless the third persons prove that they could not have any knowledge thereof. 5. Third parties may invoke the company's data, information and documents, in respect whereof decisions have been made, even though the formalities relating to the presentation thereof to the administrator of the Register of Legal Persons or to the registration thereof in the Register of Legal Persons have not yet been completed. However, the amended Statutes may be invoked by the third parties only after the registration thereof in the Register of Legal Persons. 6. After the administrator of the Register of Legal Persons has published the particulars of the persons entitled to act together in the name of the company, the company, in its relations with the third persons, may not invoke the violation of the procedures of election of the persons entitled to act on behalf of the company, unless the company proves that the third parties had knowledge thereof. 7. If the company's particulars and information disclosed by the administrator of the Register of Legal Persons as well as the company's documents or references to documents are not in conformity with the documents submitted to the Register of Legal Persons, the company, in its relations with the third parties, may not invoke the published text, except where the company proves that the third parties have been granted access to the documents submitted to the Register of Legal Persons. Article 13. Acquisition of Assets from the Incorporator of a Public Limited Liability Company 1. For two years after the registration of a public limited liability company every transaction of the company for the acquisition of assets from the company incorporator, where the sum of the transaction or the aggregate sum of such transaction during the financial year is not less than 1/10 of the statutory capital of the company, shall be subject to approval at the General Meeting by the qualified majority vote which shall be not less than 2/3 of the voting rights carried by the shares of the shareholders present at the Meeting. 2. The assets indicated in paragraph 1 of this Article shall be subject to valuation, prior to the General Meeting, by an independent asset valuer in the manner prescribed by legal acts regulating asset valuation. The requirements set in subparagraphs 1, 2 and 3 of paragraph 8 of Article 8 of this Law shall be applicable to the asset valuation report. In addition to other information, the assets valuation report shall contain the conclusion as to whether the value of the assets acquired by the limited liability company corresponds to the amount paid for them. 3. The asset valuation report must be submitted to the public limited liability company and the administrator of the Register of Legal Persons at least 10 days before the General Meeting. 4. The requirements of this Article shall not be applied where the assets are acquired in the course of regular business activities of the public limited liability company, also in respect of transactions concluded in the Central Market of the Stock Exchange. CHAPTER THREE RIGHTS AND DUTIES OF THE COMPANY AND SHAREHOLDERS Article 14. Rights and Duties of Shareholders 1. The rights and duties of shareholders shall be established by this Law and other laws of the Republic of Lithuania as well as the Statutes of the company. The property and non-property rights of shareholders established by this Law may not be subjected to any restrictions, except in cases specified by laws. 2. The shareholders shall have no property obligations to the company save for the obligation to pay up, in the established manner, all the shares subscribed for at their issue price. 3. If the General Meeting takes a decision to cover the losses of the company from additional contributions made by the shareholders, the shareholders who voted "for" shall be obligated to pay the contributions. The shareholders who did not attend the General Meeting or voted against such a resolution shall have the right to refrain from paying additional contributions. 4. The person who acquired all shares in the company or the holder of all shares in the company who transferred a part of his shares to another person must notify the company of the acquisition or transfer of shares within 5 days from the conclusion of the transaction. The notice shall indicate the number of acquired or transferred shares, the nominal share price and the particulars of the person who acquired or transferred the shares (the natural person's full name, personal number and address; the name, legal form it has taken, registration number, address of the registered office of the legal person.) 5. Contracts between the company and holder of all its share shall be executed in a simple written form, unless the Civil Code prescribes the mandatory notarised form. 6. A shareholder shall repay the company any dividend paid out in violation of the mandatory norms of this Law if the company proves that the shareholder knew or should have known thereof. 7. Shareholders of the public limited liability company shall have the right to submit an offer demanding a mandatory sale of shares held by other shareholders or to announce a mandatory offer to buy up the shares held by them in the cases and following the procedure laid down in the Law on Securities Market. Article 15. Property Rights of the 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 statutory capital is increased out of the company funds, except in cases specified in paragraph 3 of Article 42 of this Law; 4) to have the pre-emption right in acquiring shares or convertible debentures issued by the company, except in cases when the General Meeting decides to withdraw the pre-emption right in acquiring the company’s newly issued shares or convertible debentures for all the shareholders; 5) to lend to the company in the manner prescribed by law; however, when borrowing from its shareholders, the company may not pledge its assets to the shareholders. When the company borrows from a shareholder, the interest may not be higher than the average interest rate offered by commercial banks of the locality where the lender has his place of residence or business, which was in effect on the day of conclusion of the loan agreement. In such a case the company and shareholders shall be prohibited from negotiating a higher interest rate; 6) other property rights established by this and other laws. Article 16. Non-property Rights of Shareholders 1. Shareholders shall have the following non-property rights: 1) to attend the General Meetings; 2) to vote at General Meetings according to voting rights carried by their shares; 3) to receive information on the company specified in paragraph 1 of Article 18 of this Law; 4) to file a claim with the court for reparation of damage resulting from nonfeasance or malfeasance by the company manager and Board members of their obligations prescribed by this Law and other laws and the Statutes of the company as well as in other cases laid down by laws. 2. The Statutes of the company may also establish other non-property rights. 3. The right to vote at the General Meeting may be withdrawn or restricted in the cases established by this and other laws, also in case share ownership is contested. Article 17. Shareholder's Right to Vote 1. The right to vote at the General Meeting convened prior to the expiry of the time limit for the payment for the first share issue indicated in the Instrument of Incorporation shall be granted by the shares for which initial contributions have been paid. The right to vote at other General Meetings shall be granted only by fully paid shares. 2. If all voting shares of the company are of equal nominal value, each share shall give its holder one vote at the General Meeting. If voting shares are of different nominal value, one share of the lowest nominal value shall give its holder one vote and the number of votes carried by other shares shall be equal to their nominal value divided by the smallest nominal value of a share. 3. The Statutes of the company may lay down that preference shares of certain classes shall not carry voting rights. The holders of preference non-voting shares shall be given the right to vote in the cases specified in this Law. 4. A shareholder shall not be entitled to vote on the decision to withdraw the right of pre-emption in acquiring the shares or convertible debentures issued by a company if according to the agenda of the General Meeting it is intended to grant the right to acquire the above securities to the shareholder, the shareholder's close relatives, the shareholder's spouse or cohabitee, where the shareholder's and the cohabitee's partnership has been registered in accordance with the procedure established by law, and a close relative of the spouse, if the shareholder is a natural person, also to the shareholder's parent company or subsidiary, if the shareholder is a legal person, unless the shareholder has acquired all the shares in the company. Article 18. The Shareholder's Right to Information 1. At the shareholder’s written request the company shall within 7 days from the receipt of the request grant him access to information and/or submit to him copies of the following documents: the Statutes of the company, annual accounts, reports on the activities of the company, auditor's opinion and audit reports, minutes of the General Meetings and other documents whereby the decisions of the General Meeting, the Supervisory Board's recommendations and responses to the General Meeting have been executed, the register of shareholders, the lists of Supervisory Board and Board members, also other company's documents that must be publicly accessible under law as well as minutes of the Supervisory Board and Board meetings or other documents whereby the decisions of the above-mentioned company organs have been executed, unless the said documents contain a commercial/industrial secret. A shareholder or a group of shareholders who hold or control more than 1/2 of shares shall have the right of access to all company documents upon giving the company a written pledge in the form prescribed by the company not to disclose the commercial/industrial secret. At the shareholders' request the company must execute in writing its refusal to submit the documents. Disputes relating to the shareholder’s right to information shall be settled in court. 2. Company documents, their copies or other information shall be furnished to the shareholders free of charge, unless the Statutes of the company provide otherwise. The charge fixed in the Statutes shall not exceed the costs of furnishing of the documents and other information. 3. The list of shareholders presented to the shareholders shall give the full names of the shareholders, the names of legal persons, the number of registered shares owned by the shareholders, the shareholders’ addresses for correspondence according to the most recent data available to the company. CHAPTER FIVE MANAGEMENT OF THE COMPANY Article 19. Company Organs 1. A company shall have the General Meeting and a single-person management organ - the manager. 2. A collegial supervisory organ - the Supervisory Board and a collegial management organ - the Board may be formed in the company. 3. If the Supervisory Board is not formed in the company, its functions shall not be assigned within the scope of powers of other management organs. 4. Where the Board is not formed in the company, the functions assigned to the competence of the Board shall be fulfilled by the company manager, except where this Law provides otherwise. 5. The General Meeting may not charge other management organs to address the issues assigned within the scope of its powers. 6. In the company's relations with other persons the manager shall act at his own discretion on behalf of the company. 7. Where quantitative representation is provided for in the Statutes of the company, the Statutes must set a specific rule of such representation whereunder the manager of the company must in all cases acts on behalf of the company together with the members of the management organs. 8. The management organs of the company shall act only for the benefit of the company and its shareholders, comply with laws and other legal acts and be governed by the Statutes of the company. 9. Every candidate for the office of company manager, to the position of the Board or Supervisory Board member shall inform the electing organ where and what position he holds, how his other activities are connected to the company and to other legal persons related to the company. 10. In the cases specified in paragraph 4 of Article 2.82 of the Civil Code, an action for declaring the decisions of the company organs invalid may be brought by the shareholders, creditors, the manager, members of the Board and Supervisory Board or other persons provided for by law within 30 days from the day when the plaintiff found out or should have found out about the contested decision. Article 20. Powers of the General Meeting 1. The General Meeting shall have an exclusive right to: 1) amend and supplement the Statutes of the company, except in the cases provided for in this Law; 2) elect the members of the Supervisory Board; if the Supervisory Board is not formed, elect members of the Board, if neither the Supervisory Board nor the Board is formed, elect the manager of the company; 3) remove the Supervisory Board or its members, also the Board or its members elected by the General Meeting and the manager of the company; 4) select and remove the firm of auditors, set the conditions for auditor remuneration; 5) determine the class, number and set the nominal value and the minimum issue price of the shares issued by the company; 6) take a decision regarding conversion of shares of one class into shares of another class, approve share conversion procedure; 7) take a decision to replace private limited liability company share certificates by shares; 8) approve the annual accounts and the report on company operations; 9) take a decision on profit/loss appropriation; 10) take a decision on the formation, use, reduction and liquidation of reserves; 11) take a decision to issue convertible debentures; 12) take a decision to withdraw for all the shareholders the right of pre-emption in acquiring the shares or convertible debentures of a specific issue of the company;           13) take a decision to increase the statutory capital; 14) take a decision to reduce the statutory capital, except where otherwise provided for by this Law; 15) take a decision for the company to purchase own shares; 16) take a decision on the reorganisation or division of the company and approve the terms of reorganisation or division; 17) take a decision to transform the company; 18) take a decision to restructure the company; 19) take a decision to liquidate the company, cancel the liquidation of the company, except where otherwise provided by this Law; 20) elect and remove the liquidator of the company, except where otherwise provided by this Law. 2. The General Meeting may also decide on other matters assigned within the scope of its powers by the Statutes of the company, unless these have been assigned under this Law within the scope of powers of other organs of the company and provided by their essence these are not the functions of the management organs. Article 21. The Right to Attend the General Meeting 1. Persons who are shareholders of the company on the day of the General Meeting or, in case of a public limited-liability company, who were shareholders at the end of the record date shall have the right to attend and vote at the General Meeting or repeat General Meeting themselves, unless otherwise provided for by laws, or may authorise other persons to vote for them as proxies or may transfer their right to vote to other persons with whom an agreement on the transfer of the voting right has been concluded. The record date of the public limited-liability company shall be the fifth working day before the General Meeting or the fifth working day before the repeat General Meeting . 2. Shareholders may vote in writing by filling in the ballot papers. Voting by telecommunication terminal equipment shall be equivalent to voting in writing provided that confidentiality of communications is guaranteed and there are means for verifying the signature. 3. Members of the Supervisory Board, members of the Board, the manager of the company, the inspector of the General Meeting, the auditor who prepared the auditor's opinion and audit report may also attend and speak at the General Meeting. 4. The shareholders present at the General Meeting shall be registered in the shareholder registration list. The shareholder registration list shall indicate the number of votes granted to each shareholder by the shares held by him. 5. The shareholder registration list shall be signed by the chairman and secretary of the General Meeting. Where no secretary of the Meeting is elected, the list shall be signed by the chairman of the Meeting. Where all shareholders present at the Meeting voted in writing, the list shall be signed by the manager of the company. 6. A person attending the General Meeting and entitled to vote shall produce a document which is a proof of his personal identity. A person who is not a shareholder shall in addition produce a document certifying his right to vote at the General Meeting. The current provision shall apply if the voting is held in writing. Article 22. Inspector of the General Meeting 1. The General Meeting any shall elect the inspector of the General Meeting for the next Meeting, where the election of the inspector is provided for in the Statutes of the company. 2. The inspector of the General Meeting shall determine: 1) the total number of votes carried by the shares issued by the company on the day of the General Meeting; 2) the number of valid and invalid general ballots filled in and submitted in advance; 3) the number of valid and invalid proxies submitted; 4) the number of presented agreements on the transfer of voting rights;          5) the number of voting shares represented at the Meeting (by a person himself, through proxies, through persons according to the agreements on the transfer of the right to vote, through the general ballot-papers filled in advance, through other documents entitling to vote); 6) whether the Meeting has a quorum; 7) the results of voting at the General Meeting. 3. Where election of the inspector is not provided for in the Statutes of the company or the elected inspector is not able to fulfil his duties, the General Meeting shall elect the person responsible for the actions provided for in paragraph 2 of this Article. Article 23. Convening the General Meeting 1. The right of initiative to convene the General Meeting shall be vested in the Supervisory Board, the Board (the manager of the company, where the Board is not formed) and the shareholders who have at least 1/10 of all votes, unless the Statutes provide for a smaller number of votes. 2. The General Meeting shall be convened on the decision of the Board or, in the cases specified in paragraph 3 of this Article, of the manager of the company, unless this Law establishes otherwise. 3. The General Meeting shall be convened on the decision of the manager of the company if: 1) no Board has been formed in the company; 2) the number of the company’s Board members is not more than half of their number specified in the Statutes; 3) the Board fails to convene the General Meeting in the cases and within the time limits laid down in this Law. 4. If the Board of the company or, in the cases referred to in paragraph 3 of this Article, the manager of the company fails to take the decision to convene the General Meeting within 10 days from the receipt of the request indicated in paragraph 5 of this Article, the General Meeting may be convened on the decision of the shareholders whose shares carry more than 1/2 of the votes. 5. The initiators of the General Meeting shall submit a request to the Board (or, in the cases specified in paragraph 3 of this Article, the manager) where they must state the reasons for convening the General Meeting and its purposes, submit proposals regarding the agenda, date and venue of the Meeting, drafts of the proposed decisions. The General Meeting shall be held within 40 days after the date of receipt of the request . It shall not be mandatory to convene the General Meeting if the request does not comply with all the requirements set forth in this paragraph and the required documents have not been submitted or the issues proposed for the agenda are not within the scope of powers the General Meeting. 6. If the General Meeting is not held, a repeat General Meeting must be convened. Article 24. The Convening of Annual General Meetings and Extraordinary General Meetings 1. An Annual General Meeting must be held every calendar year at least within four months from the end of the financial year. 2. The Extraordinary General Meeting must be convened if: 1) the company’s equity capital falls below 1/2 of the statutory capital specified in the Statutes and the issue has not been discussed at the Annual General Meeting; 2) the number of the Supervisory Board or Board members has declined to 2/3 of their number indicated in the company Statutes or less than their minimum number prescribed by this Law; 3) the manager of the company elected by the General Meeting resigns or is unable to continue performing his duties; 4) the audit firm terminates the contract with the company or is for any other reasons unable to audit the company’s annual statements where audit is mandatory under this Law or Statutes; 5) the convening of the EGM is requested by the shareholders having the right of initiative to convene a General Meeting, the Supervisory Board, the Board or, where the Board is not formed, by the manager of the company; 6) the duration of the company specified in the Statutes is drawing to a close; 7) it is required under this Law and other laws or the company’s Statutes. 3. The General Meeting may be convened by order of the court if: 1) the Annual General Meeting has not been convened within 4 months of the end of the financial year and at least one shareholder has brought the matter to the court; 2) the persons or company organs having the right of initiative to convene the General Meeting applied to the court with a complaint about the failure by the Board or the manager of the company to convene the General Meeting as required under Article 23 of this Law; 3) the persons who initiated of the convening of the General Meeting applied to the court complaining that the Board or the manager have not convened the General Meeting upon the submission of the request as required under Article 23 of this Law; 4) at least one of the company creditors applied to the court with a complaint about the failure to convene the General Meeting when it was discovered that the company’s equity fell below 1/2 of the statutory capital specified in the Statutes. Article 25. Agenda of the General Meeting 1. The agenda of the General Meeting shall be drawn up by the company Board or, in the cases specified in paragraph 3 of Article 23 of this Law, by the manager if the company. Where the General Meeting is convened by order of the court, the agenda shall be drawn up and submitted to the court together with other prescribed documents by the person or persons who applied to the court requesting to convene the General Meeting. 2. The items proposed by the initiators of the General Meeting must be put on the agenda of the Meeting provided that these issues are within the powers of the General Meeting. 3. The agenda of the General Meeting may be supplemented by the Supervisory Board, the Board (if the Board is not formed - by the manager) or shareholders who hold shares with not less than 1/10 of all votes attaching to them, unless the Statutes provide for a smaller proportion. The proposal to supplement the agenda may be submitted not later than 15 days before the General Meeting. Draft decisions on the proposed issues shall also be submitted together with the proposal. 4. The organs of the company and persons referred to in paragraph 3 of this Article may at any time before the General Meeting or during the Meeting propose new draft decisions on the items put on the agenda, nominate additional candidates to members of the company organs, the audit firm. 5. The shareholders must be notified of the changes in the agenda of the General Meeting in the same manner in which they were given notice of the General Meeting not later than 10 days before the General Meeting. 6. If removal of members of the company organs or the audit company is on the agenda of the General Meeting, the issues relating to election accordingly of new members of the company organs or new audit firm must be put on the agenda of the Meeting. 7. Only the agenda of the General Meeting which was not held shall be valid at the repeat General Meeting. Article 26. Notice of the General Meeting 1. The Board of the company, the manager, the persons or authority which adopted the decision to convene the General Meeting shall present to the company information and documents required for drawing up a notice of the General Meeting. 2. Notices of the General Meeting shall include the following: 1) the name, the address of the registered office and the code of the company; 2) the date, time and venue (address) of the Meeting; 3) the record date of the General Meeting (for a public limited-liability company); 4) the agenda of the Meeting; 5) the persons on whose initiative the General Meeting is convened; 6) the organ of the company, persons or the authority who adopted the decision to convene the General Meeting; 7) the purpose and intended method of the reduction of capital where the issue of reduction of the statutory capital is on the agenda of the General Meeting. 3. A notice of the General Meeting must be published in the daily indicated in the Statutes or delivered against acknowledgement of receipt sent by registered post to each shareholder not later than 30 days before the General Meeting. 4. If the General Meeting is not held, the shareholders must be notified of the repeat General Meeting in the manner specified in paragraph 3 of this Article at least 5 days before the day of this General Meeting. The repeat General Meeting shall be convened at least 5 days and within 30 days after the day of the General Meeting which was not held. 5. The General Meeting may be convened in derogation of the time limits set in paragraphs 3 and 4 of this Article upon written consent of all the shareholders who hold shares conferring voting rights. 6. The documents confirming that the shareholders have been given notice of the General Meeting shall be announced when opening the Meeting. 7. At least 10 days before the General Meeting the shareholders shall be granted access to the documents available to the company relating to the agenda of the Meeting, including draft decisions and the request filed with the Board or, in the cases specified in paragraph 3 of Article 23 of this Law, to the manager of the company by the persons who initiated the convening of the General Meeting. If the shareholder requests so in writing, the manager of the company shall within 3 days from the receipt of the written request deliver to him against his signed acknowledgement of receipt all draft decisions of the Meeting or shall send him the above drafts by a registered letter. A notice must be given with the draft decisions indicating on whose initiative they have been submitted. Where the person who initiated the draft decision submitted its explanations, these must be attached to the draft decisions. Article 27. Quorum of the General Meeting and Decision-making 1. A General Meeting may take decisions and shall be held valid if attended by shareholders who hold shares carrying not less than 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, the General Meeting shall be considered invalid and a repeat General Meeting must be convened, which shall be authorised to take decisions only on the issues on the agenda of the meeting that has not been held and to which the quorum requirements shall not apply. 2. If consent of the holders of a certain class of shares is necessary for taking a decision, the decision regarding the consent shall be taken by a meeting of the holders of the relevant class of shares. The meeting may take decisions and shall be held valid if attended by shareholders who own over 1/2 of all shares of that class. The provisions laid down by this Law for convening the Meeting, representation by proxy, establishment of the quorum, decision taking and drawing up of the minutes shall be applicable to convening the meeting (repeat meeting including). 3. Every General Meeting shall elect the chairman and the secretary of the Meeting. The election of the secretary may be dispensed with if the General Meeting is attended by less than 3 shareholders. The chairman and the secretary shall not be elected if all the shareholders attending the Meeting took a written vote. 4. For the purpose of establishing the total number of votes carried by the shares of the company and the quorum of the General Meeting, the following shares shall be considered to be non-voting shares: 1) own shares purchased by the company; 2) non-voting preference shares of the class specified in the Statutes. 5. If the shareholder exercises his right to take a written vote, upon being presented for scrutiny the agenda of the General Meeting and draft decisions, he shall fill in and submit to the company a general ballot paper notifying the General Meeting whether he is "for" or "against" each decision. The shareholders who took a written vote in advance shall be considered as being present at the General Meeting and their votes shall be included in the quorum of the meeting and the results of voting. The general ballots papers of the meetings which have not taken place shall be valid at repeat meetings. A shareholder shall not be entitled to vote at the General Meeting for the decision in respect of which he has expressed his will in advance in writing. 6. If in the cases specified by this Law a shareholder is not entitled to vote when taking decisions on separate issues, the results of the voting on these separate issues shall be determined according to the number of votes of shareholders present at the Meeting who are entitled to vote on deciding the issue. 7. Voting at the General Meeting shall be decided on a show of hands. Secret voting shall be mandatory to all shareholders on the issues on which at least one shareholder requests a secret vote be taken, provided that he is supported by shareholders whose shares carry at least 1/10 of the votes at the General Meeting,. 8. A decision of the General Meeting shall be considered taken if more votes of the shareholders have been cast for it than against it, unless this Law or the Statutes of the company prescribe a larger majority. 9. The General Meeting shall not be entitled to take decisions on the issues that are not on the agenda except when the meeting is attended by all shareholders who own shares conferring voting rights and no shareholder voted in writing. Article 28. Decisions Taken by a Qualified Majority Vote 1. The General Meeting shall take the following decisions by a qualified majority vote that shall be not less than 2/3 of all the votes carried by the shares held by the shareholders attending the Meeting: 1) to amend the Statutes of the company, unless otherwise provided for by this Law; 2) to determine the class, number, nominal value and the minimum issue price of the shares issued by the company; 3) to convert the company's shares of one class into shares of another class, approve the share conversion procedure; 4) to replace private limited-liability company share certificates by shares; 5) on the appropriation of profit/loss; 6) on building up, drawing on, reduction or liquidation of the reserves; 7) to issue convertible debentures; 8) to increase the statutory capital; 9) to reduce the statutory capital except where this Law provides otherwise; 10) on approving the conditions of reorganisation or division and reorganisation, or division of the company; 11) on the transformation of the company; 12) on the restructuring of the company; 13) on the liquidation of the company and cancellation of company liquidation except where otherwise provided by this Law. 2. The decision to withdraw for all shareholders the pre-emption right in acquiring the company’s newly issued shares or convertible debentures of a specific issue shall require a qualified majority vote that shall be not less than 3/4 of all votes conferred by the shares of the shareholders present at the General Meeting and entitled to decide on the issue. 3. The Statutes of the company may provide for a larger qualified majority than 2/3 of the votes required to take the decisions specified in paragraph 1 of this Article and a larger qualified majority than 3/4 of the votes required for taking the decision referred to in paragraph 2 of this Article. Article 29. Minutes of the General Meeting 1. Minutes shall be taken of all General Meetings. The minutes need not be taken where the decisions taken are signed by all shareholders of the company as well as in cases when the company has only one shareholder. 2. The minutes shall be signed by the chairman and secretary of the General Meeting and may also be signed by the persons authorised by the General Meeting. Where the secretary of the Meeting is not elected, the minutes shall be signed by the chairman of the General Meeting. In case all shareholders attending the Meeting voted in writing, the manager of the company shall draw up and sign the minutes recording the votes cast. 3. The minutes shall be drawn up and signed not later than within 7 days after the date of the General Meeting. 4. Persons who attended the General Meeting shall be entitled to have access to the minutes and submit their comments or opinion in writing on the facts presented in the minutes and the drawing up thereof within 3 days from the moment of access but not later than within 10 days thereafter. 5. The following documents shall be attached to the minutes: the list of registration of the shareholders who attended the meeting; the proxies and other documents certifying the persons' voting right; the general ballot papers of the shareholders who voted in advance in writing; documentary proof that the shareholders having been notified of the General Meeting; comments on the minutes and conclusion on the comments given by the persons who signed the minutes. 6. Where all shares in the company are held by one person, his written decisions shall be equivalent to the decisions of the General Meeting. 7. The minutes or other documents whereby the decisions of the General Meeting are executed shall be official documents. They shall be stored and processed according to the procedure laid down in the Law on Archives. Forgery of these documents shall be punishable under law. Article 30. General Ballot Paper 1. Upon the written request of the shareholders having the right to vote the company shall prepare and at least 10 days before the General Meeting send the general ballot papers by registered post or deliver them against acknowledgement of receipt to the shareholders who so requested. 2. The following shall be indicated in the ballot paper: 1) drafts of the decisions proposed before the day of dispatch of the general ballot papers. The wording of the draft decisions must allow the shareholder to vote either for or against the decision; 2) candidates to the members of the company’s organs elected at the General Meeting, the firm which is a candidate to the firm of auditors. The candidates must be presented in the manner which would allow the shareholder to mark the candidate he votes for or the number of votes he gives to each candidate. 3. The general ballot paper shall contain the full name and personal code of the shareholder who is a natural person and the name and code of the shareholder who is a legal person. 4. The filled-in general ballot papers shall be signed by the shareholder or any other person entitled to vote by the shares owned by that shareholder. 5. The general ballot paper shall be deemed valid and may not be recalled if it meets the requirements laid down in paragraphs 3 and 4 of this Article and was received by the company before the General Meeting. 6. If the general ballot paper does not meet the requirements laid down in paragraphs 3 and 4 of this Article, the shareholder shall be considered not to have voted in advance. 7. If due to the manner in which the general ballot paper has been filled in it is impossible to determine the will of the shareholder on a separate issue, the shareholder shall be considered not to have voted in advance. Article 31. Formation of the Supervisory Board 1. The Supervisory Board is a collegial body supervising the activities of the company. The Supervisory Board is managed by its chairman. 2. The number of members of the Supervisory Board shall be set by the Statutes. The Supervisory Board shall have at least 3 and not more than 15 members. 3. The Supervisory Board shall be elected by the General Meeting. During the election of the Supervisory Board members, each shareholder shall have the number of votes equal to the number of votes carried by the shares he owns multiplied by the number of members of the Supervisory Board being elected. The shareholder shall distribute the votes at his  discretion, giving them for one or several candidates. The candidates who receive the greatest number of votes shall be elected. If the number of candidates who received an equal number of votes is greater than the number of vacancies on the Supervisory Board, a repeat voting shall be held in which each shareholder may vote only for one of the candidates who received an equal number of votes. 4. The Supervisory Board shall be elected for the period laid down in the Statutes which, however, shall not be longer than 4 years. The Supervisory Board shall continue in office for the period laid down in the Statutes or until a new Supervisory Board is elected but not for longer than the date of the Annual General Meeting to be held during the final year of its term of office. The number of the terms of office a member may serve on the Supervisory Board shall not be limited. 5. The Supervisory Board shall elect the chairman of the Supervisory Board from among its members. 6. Prohibited from serving on …