Official translation

Official translation Official translation COMPANY LAW 5 July 1994 No. I-528 (As amended by  23 December 1996) Vilnius Chapter 1 GENERAL PROVISIONS Article 1.  Objectives of the Law The Law shall regulate the establishment, reorganisation and liquidation of public and private companies, their management and activities, as well as the rights and obligations of their shareholders.  When the text of the Law applies both to public and  private companies, they shall be referred to by the term "Companies." Article 2.  Public Companies and Private Companies 1. A Company is  an enterprise whose authorised capital is divided into shares.  It may be formed for any business not prohibited by the laws of the Republic of Lithuania.  A Company is a legal person. 2.   A Company is a limited liability formation.  It shall be liable for its obligations only to the extent of its assets.  The shareholders shall be liable only for the amounts which they must pay for their shares. 3.  The amount of the authorised capital of a public Company may not be less than 100 000 litas.  Its shares may be circulated and traded in publicly. 4.  The amount of the authorised capital of a private Company may not be less than 10 000 litas. A private Company  must limit the number of its shareholders to 50.  The shares of a private Company may not be circulated or traded in  publicly, unless the laws regulating the sale of state-owned property (shares) provide otherwise. 5.  The registered office of a Company must be situated in the Republic of Lithuania. 6.  A Company may be established for a period of limited or unlimited duration. If the Articles of Association of a Company do not specify the period for which it is established, it shall be deemed to have perpetual existence. The duration of a Company may be extended, accordingly amending its Articles of Association. (Amended 20 December 1995) Article 3.  Incorporators 1.  The incorporators of a Company shall be natural or legal persons who have executed the Company incorporation agreement (act) in accordance with the procedure established by this Law. Natural and legal persons of the Republic of Lithuania and other states may be incorporators. The number of incorporators shall not be limited. Each incorporator of a Company must be its shareholder. If at least one of the incorporators (investors) of a Company is a foreign person, the laws of the Republic of Lithuania which regulate foreign investment shall also apply to the Company. 2.  If a Company is formed by one person, an incorporation act shall be drawn up instead of the Company incorporation agreement and the requirements of the incorporation agreement shall apply to it.  3.The incorporators shall conclude an agreement on the incorporation of the Company. The following must be specified in the  incorporation agreement : 1) the incorporators (full names, names of legal persons) and their addresses; 2) the name of the Company; 3) the manner in which the Company is formed; 4) the rights and obligations of the incorporators in the formation of the Company and liability for failure to fulfil their obligations; 5) the number of shares acquired by each incorporator; 6)  the par value, price of issue, and the procedure and terms of offering of shares; 7) compensation of incorporation costs and remuneration for the incorporation; 8) the procedure for settling disputes between the incorporators; and 9) the incorporators who may represent the Company. (Amended 20 December 1995) The agreement shall be signed by all incorporators or persons authorised by them. If at least one of the incorporators is a natural person, the agreement must be certified by a notary. If all the incorporators are legal persons or enterprises, the signature of their manager or authorised person shall be certified by a seal. The procedure established for natural persons shall apply to a foreign legal person who does not possess a seal. The agreement on the incorporation of a Company shall be a public document. 4. A Company incorporation agreement or an act on the incorporation of a Company concluded in accordance with the procedure established by this Law shall grant the right to open a settlement account with a bank registered in the Republic of Lithuania. 5. Upon executing a Company incorporation  agreement, the incorporators shall draw up the Company's Articles of Association and offer for sale shares. The incorporators of a public Company shall be entitled to offer shares for sale  only upon registering the Company's Articles of Association in accordance with the procedure established by the Law on the Register of Enterprises of the Republic of Lithuania as well as upon registering the issue of shares with the Securities Commission. 6. Prior to the statutory general meeting, any incorporator as well as the persons specified in the incorporation agreement shall be entitled to conclude contracts in the name of the Company which is being incorporated. Upon their approval by the statutory general meeting, said contracts shall create obligations for the Company. In the event that the meeting refuses to approve said contracts, the incorporators shall be jointly liable for the obligations thereunder, whereas other persons stated in the incorporation agreement shall be severally liable therefor. Upon the proposal of the incorporator the general meeting may transfer to the Company the obligations under the contracts concluded by the incorporator in his own name. 7. The shareholders shall have the right to request that the incorporators compensate for the losses incurred by the Company prior to the day of its registration  by reason of failure to fulfil the obligations, dishonest management of the affairs related to the incorporation, with the exception of cases where the losses have been incurred through normal industrial or business risks. Disputes concerning the compensation of losses shall be settled in court. 8.  By drawing up the record of transfer and receipt the incorporators must within 7 days of the day of the statutory general meeting transfer the Company's assets and documents to the Board (if it has not been elected - to the head of the Administration). Article 4. Shareholders 1.  A shareholder shall be a natural or a legal person, the state or municipality who has at least one share in the Company acquired under law. The state or the municipality shall be represented in the Company by a state or municipal institution. (Amended 20 December 1995) 2. Each shareholder shall have such rights in the Company which are incidental to the shares in the Company held by him. 3. If the holder of all shares in a Company is one natural or legal person, the person's written decisions shall be equivalent to the resolutions of the general meeting. Article 5. Special Purpose Companies 1. The status of special purpose Companies may be assigned to Companies which fulfil functions that are of vital significance for the state or Companies whose activities require a special regime. The sphere of activity in which special purpose Companies may operate shall be approved by the Seimas on the recommendation of the Government of the Republic of Lithuania. 2. The shares held  by an institution of state power and government in a special purpose Company must account to at least 70% of votes. 3. The institutions of state power and government possessing  controlling interest in a special purpose Company shall be entitled to establish the following: 1) obligatory works (assignments); 2) quality requirements for goods (services); and 3) prices of goods (services) or price calculation regulations. 4. Taking into account the specific character of a Company, the terms and conditions set forth in Par. 3 hereof must be provided for in the Company's Articles of Association. Chapter 2 INCORPORATION, REORGANISATION AND LIQUIDATION OF A COMPANY Article 6.  Incorporation of a Company 1.  A private Company may be founded only  in a closed manner, whereas a public Company may be founded either in a closed or in an open manner. 2. A Company shall be founded in a closed manner by forming its authorised capital from contributions received for issued shares acquired only by the incorporators. 3. A Company shall be founded in an open manner by forming its authorised capital from contributions received for issued shares a portion whereof is acquired by the incorporators while the remaining shares are offered for sale to other persons. 4. The business year of a Company shall be a calendar year. Other 12-month periods   may also be established in the Articles of Association for the beginning and the end of the Company's business year. If a Company is registered after the commencement of the business year, the day of the end of the Company's business year provided for in the Company's Articles of Association shall be considered the end of the first business year of the Company. If a Company is crossed off the Register prior to the end of the business year, the last business year shall end by the day the Company is crossed off the Register.  5. The incorporators must prepare a statutory report specifying: 1) incorporation expenses; 2) money received for the shares; 3) non-pecuniary (property) contributions, the value of said contributions and valuation methods submitted to the meeting for approval; 4) the number of shares acquired by each incorporator; 5) repayable incorporation expenses, remuneration for the incorporation; and 6) contracts obligations whereunder are transferred to the Company by the incorporators or other persons. 6. The statutory report must be audited and conclusions thereon must be submitted to the statutory  meeting by an independent auditor who shall have the right to invite property valuation experts. If the incorporators deny the auditor, inspector the required information and explanations, the auditor, inspector shall inform the statutory meeting thereof in writing. Each shareholder shall have the right to familiarise himself with the statutory report and the auditor's findings and to make copies thereof. (Amended 20 December 1995) 7.  If, during incorporation,  not all shares in a public Company are subscribed for during the time prescribed for the subscription for shares, the amount of the authorised capital may be reduced on the decision of the statutory meeting,  but by not more than 50%.  The reduced amount of the authorised capital may not be less than the minimum amount under Par. 3 of Article 2 of this Law.  If during the time prescribed for the subscription for  shares not all shares are subscribed for and the amount of the authorised capital is not reduced, the public Company may not be registered.  In this case the contributions of the subscribers must be returned to them without any deductions within 15 days.  All the incorporators shall be jointly liable for the return of the contributions. 8.  Within 60 days of the end of the subscription period or the last day of the subscription for shares (in the event that all shares are subscribed for prior to the fixed date) the incorporators must call the statutory general meeting.  If the general meeting is not called within the above period, all the subscribers shall be relieved of their obligations to the Company and shall have the right to request full return of their contributions for the shares within 15 days. 9.  The provisions established by this Law for the general meeting shall apply to the statutory general meeting. The statutory general meeting  shall be attended by the incorporators of the Company. If there is no quorum, another meeting shall be called. (Amended 20 December 1995) 10.  The statutory general meeting shall approve the statutory report of the Company and the contracts concluded by the incorporators, elect the managing bodies, the inspector or auditor, may amend or supplement the Articles of Association, settle other issues within the competence of the general meeting. (Amended 20 December 1995) 11. The first Supervisory Board or the Board shall be elected for no longer than 2 business years. 12. Remuneration for the incorporation of a Company or compensation of the incorporation expenses may be paid to the incorporators or to third persons provided that civil contracts have been concluded with them and the incorporation costs are substantiated by documents. Disputes between the incorporators, shareholders and third persons concerning the compensation of incorporation costs and remuneration for the incorporation shall be settled in court. Article 7. The Company's Articles of Association          1  The Articles of Association of a Company constitute a 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) business activities (types of manufactured products, performed work, rendered services); 4)  the procedure for transferring registered shares to the ownership of other persons in the cases specified in Par. 7 of Article 34 of this Law; 5)  the amount of the authorised capital and its composition according to the classes of shares; 6)  the number of shares according to class, their par value and the rights they give to the holder; 7) procedure of payment for shares; 8) procedure for exchanging shares of one class for shares of another class; 9)  procedure for electing the Supervisory Board, the Board and the auditor, and their respective powers; 10)  the powers of the general meeting, the procedure for calling  the meetings and their voting rules; 11) the rules for the distribution of profit; 12) the procedure for communicating the announcements of the Company; and 13) the procedure for reorganising and liquidating the Company. The Articles of Associations of a Company may also include other provisions, provided that they are in compliance with the laws of the Republic of Lithuania. 3. If the conduct of business activities provided for in the Company's Articles of Association is regulated by other laws of the Republic of Lithuania, said laws must be complied with when drafting the Company's Articles of Association. 4. The Articles of Association of a Company must be signed by all incorporators and the signatures must be certified: in the case of natural persons - by a notary,  in the case of legal persons, when the signature belongs to the head of the enterprise or to the authorised person - by a seal. The procedure established for natural persons shall apply to a legal person who does not posses a seal. Article 8. Registration of the Articles of Association and the Company 1.  Prior to offering their shares to the public for subscription or purchase, companies must register their Articles of Association according to the procedure established in the Law on the Register of Enterprises. 2. In the event that the general meeting amends or supplements the Company's Articles of Association, said amendments must be registered. Amendments to the Articles of Association shall be valid only upon their registration. 3. A Company must be registered in the Register of Enterprises of the Republic of Lithuania within 6 months of the day of conclusion of the incorporation agreement. If the Company is not registered within the prescribed time period, it shall be deemed not to have been incorporated and the contributions of persons to the Company's authorised capital must be returned within 15 days of the day of expiry of the period prescribed for the registration. In the event of failure to register the Company through reasons not related to the activities of the Company's incorporators or shareholders, the  incorporators may appeal the actions of the Registrar in court. 4. The Company shall be registered according to the procedure established by the Law on the Register of Enterprises after the shares have been subscribed for, initial installments have been collected and the statutory  general meeting has been held. The sum of the collected initial installments must be no less than the amount of the minimum  authorised capital as established in Article 2 of this Law, of which sum pecuniary contributions must constitute no less than 1/4.  5.  The Company shall acquire the rights of legal person as of the day of its registration. Article 9. Affiliate of a Company 1.  A Company shall have the right to establish affiliates. Affiliates shall be established on the decision of the Company's Board. The number of affiliates of a Company shall not be limited. 2. An affiliate shall be a division of a Company possessing a separate registered office. An affiliate shall not be a legal person and shall use the name of the Company as a legal person. It shall operate in compliance with the Articles of Association of the Company and within the powers  which are granted by the Board and  which must be specified in the Company's Articles of Association. 3.  The assets of the Company's affiliate shall be  accounted in the Company's balance sheet and in a separate balance sheet of the affiliate. 4. Affiliates of a Company shall be registered in accordance with the procedure established in the Law on the Register of Enterprises.           Article 10. Reorganisation of a Company 1. Reorganisation is transformation of a Company as a legal person without the liquidation procedure. The successors to all the rights and liabilities of reorganised Companies shall be the Companies newly incorporated in the process of reorganisation and Companies continuing to operate after reorganisation as going concerns. 2. Companies may be reorganised in the following ways: 1) by merger or consolidation of companies; 2) by division of companies; 3) by changing the type or status of a Company. 3. Reorganisation by merger or consolidation of companies shall be carried out by: 1) joining the companies (one or several) which cease their existence as separate legal entities to the Company which continues its business; or 2) combining companies which terminate their existence as legal entities to form a newly created Company. 4. Reorganisation of companies by way of Company division shall be carried out by: 1) parcelling out the Company which terminates its activities to other companies which continue their business; 2) organising new companies from the Company which terminates its activities; or 3) separating a part from the Company which is a going concern and merging the part with another Company or organising a new Company from the separated part. 5. When the type of a Company is being changed, it may be reorganised: 1) from a private Company into a public Company by registering its shares with the Securities Commission; or 2) from a public Company into a private Company  by cancelling the registration of its share issue with the Securities Commission. 6. Reorganisation by changing the status of the Company means cancelling the special purpose status of a Company by amending its Articles of Association. 7. The Companies under reorganisation must prepare a plan of reorganisation,  which must state: 1) the name, type and registered office of each Company under reorganisation; 2) valuation of assets of each Company under reorganisation; 3) assumption of liabilities and the period of assumption thereof; 4) the criteria and rules for dividing the shareholders and shares of the Companies which are connected with the reorganisation among the Companies which will continue as going concerns after the reorganisation. If the shares are distributed for the Companies which will continue as going concerns after the reorganisation not in proportion to their authorised capital, the procedure providing each shareholder with the possibility to choose Companies in which they desire to hold shares must be established in the plan ; (Amended 20 December 1995) 5) the rate at which the shares held by shareholders shall be exchanged for new shares taking into account the difference in price;  the number of new shares according to class and their par value; 6) the difference between the price of shares held by the shareholders and shares received by them after the reorganisation which shall be paid out to them in cash. The payment in cash may not exceed 10% of the par value of shares; 7) the procedure and terms for issuing shares; 8) property and non-property rights of holders of shares and other securities after Company reorganisation and the terms of acquisition thereof; 9) the projected business indices of the Companies which will be going concerns after the reorganisation; and 10) the rights accorded to the managing bodies, auditors and experts of Companies during their reorganisation period. The Articles of Association of each Company which will be a going concern after the reorganisation must be drafted together with the plan of reorganisation. 8. The Board of each Company under reorganisation shall make a comprehensive written evaluation of the plan of reorganisation and shall also assign one or more experts to conduct an examination of the plan. The experts shall be entitled to obtain any related information from the Companies under reorganisation. Prior to the announcement of the general meeting, the experts shall submit to the Board the Examination Act which must contain findings concerning the valuation of property, the terms and conditions of loan extension and changes in the price of shares. During the reorganisation of the Company in the way specified in item 3 of Par. 2 hereof  valuation of property  in the reorganisaton plan and examination of the plan by experts shall not be required unless demanded by the shareholders by a simple majority  vote. (Amended 20 December 1995) 9. Every Company must make a public announcement  and notify each creditor in writing of its projected reorganisation no later than 30 days prior to the general meeting which has the consideration of issue of the Company reorganisation on its agenda. During the stated period every shareholder shall have the right to familiarise himself with the Company's plan of reorganisation, its evaluation, business indices of the Companies under reorganisation and the Examination Acts as well as to make copies thereof. (Amended 20 December 1995) 10. The resolution to reorganise a Company may be passed and the plan of reorganisation and the draft Articles of Association may be at the same time approved by shareholders with no less than 2/3 of votes of every class of shares. The approved reoganisation plan and the minutes of the general meeting which approved the plan must be delivered to the registrar of the register of enterprises no later than within 15 days from the day of the meeting which approved the plan.   (Amended 20 December 1995) 11. A Company against which bankruptcy proceedings have been instituted or with respect to which out-of-court bankruptcy procedure is applied may be reorganised in accordance with the procedure established by the Law on Enterprise Bankruptcy of the Republic of Lithuania. 12. Public announcement shall be made of the Company's reorganisation no less than three times with an at least a 2-month interval between the announcements, or each shareholder and creditor shall be given a written notice thereof. The Company must provide additional guarantees to every creditor who requests them. (Amended 20 December 1995) 13. The Articles of Association of  Companies which are going concerns   after the reorganisation  shall be registered after the first general meeting. The registration of the reorganised Companies shall be regulated by the Law on the Register of Enterprises of the Republic of Lithuania.  For the registration of the Company or its articles of association after reorganisation the minutes of the general meeting which approved the reorganisation plan shall be presented instead of the incorporation agreement (Amended 20 December 1995) Article 11.  Liquidation of a Company 1. A Company may be liquidated on the following grounds: 1)  the time of the Company's duration as specified in the Articles of Association has expired; 2)  the court or the creditors' meeting has passed a decision to liquidate a bankrupt Company. In this case the Company shall be liquidated in accordance with the procedure established by the Law on Enterprise Bankruptcy; 3)  the court has passed a decision to liquidate the Company on the grounds of violations of law established by the laws of the Republic of Lithuania; and 4)  the general meeting has passed a corresponding resolution (provided that no bankruptcy proceedings have been instituted against the Company). 2.  The institution which decides to liquidate the Company must appoint its liquidator (administrator of a Company in liquidation). The managing bodies of the Company shall be divested, as of the day of the liquidator's appointment, of the powers to manage the Company. (Amended 20 December 1995) 3. The liquidator shall, in accordance with the procedure established by the Law on the Register of Enterprises, inform the Registrar who registered the Company of the alteration of the Company's status and shall furnish the Registrar with the information concerning the liquidator. After the Company acquires the status of a Company in liquidation, the words "in liquidation" shall precede its name. 4. A Company in liquidation may conclude only  contracts which are related to its liquidation as well as those contracts which are provided for in the liquidation resolution. 5. The liquidation of a Company shall be announced publicly no less than three times at no shorter than 2-month intervals or each shareholder or creditor shall be personally notified thereof. 6. The distribution of the Company's assets to the shareholders may be carried out  only upon the expiration of two months after the day of the third public announcement of the liquidation of the Company or of the personal notification of each shareholder and creditor. 7. In the event of disputes concerning the payment of the Company's debts, the assets of the Company may be  distributed to the shareholders only after the dispute has been settled in court and settlements with  the creditors have been effected. Disputes concerning the mortgaged assets of the Company shall be considered in accordance with the procedure established in the Law on Mortgage of the Republic of Lithuania. 8. After the payment of the required taxes into the budget and after the discharge of liabilities to the creditors and the employees, the remaining assets shall be distributed to the shareholders in proportion to the par value of the shares held by them by ownership right. Any contingent assets shall later be distributed in an analogous manner. If the shares of the Company carry different rights, said rights shall be taken into account during the distribution of assets.  Article 12. Powers of the Liquidator 1.  The liquidator shall have the rights and obligations of the Company's Board. The liquidator shall represent the Company in liquidation in court, in its relations with the State power and government bodies, and with other natural and legal persons. 2.  The liquidator of the Company shall: 1)  make a stock-taking of material and financial valuables and draw up the act of receiving same, make up the accounts as of the beginning of the liquidation period (the liquidation balance sheet); 2)  complete the discharge of the obligations under  contracts concluded previously and draw up new  contracts within their powers; 3) terminate contracts with the creditors and debtors of the Company; 4) distribute the remaining assets of the Company to and among the shareholders; 5) draw up the Company liquidation act; and 6) have the liquidated Company struck off the Register in accordance with the procedure established by the Law on the Register of Enterprises. 3.  If the liquidation of the Company lasts for several years, within 3 months of the end of each business year the liquidator shall make up the annual accounts and the liquidation report.  These documents shall be open for review to all the shareholders and the third persons with vested interests. 4.  The liquidator shall be liable to the Company and the third persons for the losses incurred through his fault.  5.  Shareholders who hold shares the total par value whereof amounts to at least 1/10 of the authorised capital shall have the right to appeal to court to change the liquidator. Chapter 3 RIGHTS AND OBLIGATIONS OF COMPANIES AND SHAREHOLDERS Article 13. Company's Rights and Obligations 1.  Every Company must have a name  which must include the words "Public Company" (in Lithuanian - akcine bendrove or the acronym - AB) or "Private Company" (in Lithuanian - uzdara akcine bendrove or the acronym UAB).  The name of an investment Company must include the words "Investment  Company" (in Lithuanian - investicine akcine bendrove or the acronym IAB). The name of a Company must be in compliance with the regulations of names of enterprises, institutions and organisations approved by the Government.  Disputes over the name of a Company shall be settled in court. 2.  A Company may: 1)  have accounts in banking institutions registered in the Republic of Lithuania and other states, its own seal which may be altered and used at the Company's discretion; 2)  buy or acquire in other ways assets, or sell, lease, or mortgage its assets or dispose thereof in any other  way; 3)  buy or acquire in any other way and hold by ownership right, as well as issue, transfer, exchange, mortgage, or use in any way investment and credit securities.  If the acquisition of shares and the exercise of the rights incidental to them reduces competition among Companies (enterprises) or competition in the appropriate field of business activities, the number of shares of the other Company which is acquired and held may be restricted in accordance with the procedure established by the  Law on Competition of the Republic of Lithuania; 4)  engage in business activities in the Republic of Lithuania and beyond its boundaries; 5)  allocate funds for the purposes of charity,  health care, culture, science, education, physical education and sport, as well as for relief in cases of natural calamities or other emergencies; 6) conclude contracts, assume obligations, lend and borrow money only in accordance with the procedure and under the terms and conditions established by Par. 3 of Article 12 of the Law on Enterprises of the Republic of Lithuania and the Law of the Republic of Lithuania on the Lending of Monetary Resources to Natural and Legal Persons; (Amended 20 December 1995) 7)  charge prices, rates and tariffs for its products, services or other resources, with the exception of cases provided for in the laws of the Republic of Lithuania; 8) prepare and implement the systems of  payment of pension supplements and benefits, as well as systems of incentives and privileges; 9) reorganise itself, be an incorporator and shareholder of another Company; and 10) form associations, concerns or consortiums provided that this is in compliance with the Law on Competition. Companies may also have other civil rights and obligations which are not established in this Law, provided that said rights and obligations are in compliance with the laws of the Republic of Lithuania. 3.  If the Company acquires controlling interest in another Company, the latter shall become a controlled Company.  Controlling interest shall consist of shares which give their holder more than 50% of votes at the general meeting.  The controlled Company shall be a subsidiary, and the controlling Company shall be the holding Company. A subsidiary may not acquire shares in the holding Company. 4. A Company which fails to settle accounts with creditors within the prescribed time period and if its debt exceeds 5% of the Company’s authorised capital shall be prohibited from investing its property into another enterprise without a written consent of said creditors. (Amended 20 December 1995) Article 14. Rights and Obligations of Shareholders 1.  The property and non-property rights as well as the obligations of the shareholders shall be established by this Law and other laws of the Republic of Lithuania and by the Company's Articles of Association. 2.  The shareholders shall have no other  liabilities to the Company but the obligation  to pay, in the established manner, the issue price of all the shares subscribed for.  The resolution of the general meeting obliging all or some of the shareholders to make additional contributions shall be invalid if at least one of them does not agree with the resolution. 3.  If a Company is being liquidated and lacks funds to discharge its liabilities, shareholders whose shares have not been fully paid up  may be requested to pay up for their shares in  the manner established by the Articles of Association or by the subscription agreement. 4.  A share shall not be divisible into smaller parts.  If a shares is held by several persons, all its holders shall be considered to be a single shareholder.  The rights carried by the share shall be exercised by one of the holders by a general agreement certified by a notary.  All the holders of a share shall be jointly liable for the shareholders' obligations. Article 15. Property Rights of Shareholders 1.  A shareholder shall have the following property rights: 1)  to receive a certain portion of the Company's profit (dividend); 2)  to receive a portion of assets of the Company in liquidation; 3)  to receive shares without payment if the authorised capital is increased with the funds of the Company; 4)  to have a priority in acquiring newly issued shares unless the Company's Articles of Association provide otherwise; 5)  to bequeath all or part of shares to one or several persons; 6)  to sell or transfer in any other way all or part of shares to the ownership of other persons; and 7)  to have other property rights provided for in the Company's Articles of Association. 2.  Shareholders shall have the right to request of the Company  the repayment of their contributions in the cases provided for in Pars. 7 and 8 of Article 6, Par. 3 of Article 8, Par. 3 of Article 40 and Par. 4 of Article 42 of this Law. Article 16. Non-property Rights of the Shareholders 1.   Shareholders shall have the following non-property rights: 1)  to attend the meetings of shareholders as voting members, unless this Law or the Articles of Association provide otherwise; 2)  to receive information on the business activities of the Company; 3)  to appeal in court the resolutions of a general meeting or the Board; and 4)  other non-property rights provided for in the Articles of Association. 2.  If all the voting shares of the Company are of the same par value, each share  shall carry one vote at the meetings of shareholders. 3.   The Articles of Association of the Company may provide for a rule according to which some types of shares do not carry the right to vote. The institutions of state power and government shall be prohibited from acquiring non-voting Company shares. (Amended 22 February 1995) 4.  A shareholder shall have no right to take part in the voting at the general meeting on issues specified in Par. 7 of Article 3 or in item 9 of Par. 3 of Article 18, in the settlement whereof the shareholder is directly interested. 5.  If the voting shares are of different par value, one share of the smallest par value shall give its holder one vote.  The number of votes given by other shares shall be equal to their par value divided by the smallest par value.  The Articles of Association of the Company may prescribe for other rules on the establishment of the number of votes, but the number of votes given by a share  must be proportionate to its par value.(Amended 20 December 1995) 6.  Shares shall give their holders, according to the procedure set in Par. 3 of Article 41 of this Law, voting rights at the general meeting held prior to the expiry of the term set for the payment of the first issue of shares as specified in the subscription agreement; thereafter voting rights shall be carried only by fully paid up shares. (Amended 20 December 1995) 7.  At the request of a shareholder the Company must present to him for inspection or copying the annual and intermediate accounts, the reports of the Board on the activities of the Company, the minutes of the meetings, and the share register.  Other documents of the Company must be presented for the shareholder's inspection if they do not contain official secrets, the divulgence whereof would cause the Company material losses.  Denial of information for any other reason shall be prohibited.  At the shareholder's request, the refusal to present the requested papers for inspection must be presented in writing.  Disputes over the shareholder's right to information shall be settled in court. 8.  Shareholders the total par value of whose holdings amounts no less than 1/10 of the authorised capital shall have the right to appoint an expert (a group of experts) to inspect the Company's activities and accounting papers. The inspection expenses shall be covered by the shareholders who appointed the experts. If the expert (the group of experts) proves that the facts stated in the shareholders' application are true, the Company must refund the inspection expenses. Article 17. Proxies 1.  A 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 authorisation of the shareholder-natural person must be certified by a notary, whereas the authorisation of the shareholder-legal person or of an enterprise must be certified by the manager's signature and a seal. The auditor of the Company the shares whereof are held by the person who is appointing a proxy may   not act as proxy. 2.  The proxy to represent a shareholder at the meeting must be presented to the person who is responsible for the registration of the participants in the meeting; the person shall record in the list of registration the name of the person who certified the proxy and the date when it was certified as well as its number and term of validity. 3. State and municipal officials may represent state or municipal shares in a Company and be members of Company management bodies in accordance with the procedure established by the Government of the Republic of Lithuania. (Amended 20 December 1995) Chapter 4 MANAGEMENT OF THE COMPANY Article 18. Managing Bodies 1.  The managing bodies of a Company shall include the general meeting, the Supervisory Board, the Board,  and the Administration. 2.  On the resolution of the general meeting a public Company shall not form either the Supervisory Board or the Board. In the event that only the Board is formed, it shall be formed pursuant to the procedure established for the formation of the Supervisory Board in Par.s 2, 3, and 5 of Article 24 of this Law. (Amended 20 December 1995) 3.  On the resolution of the general meeting, a private Company may refrain from forming either the Supervisory Board or the Board.  In the event that either one or both of these managing bodies are not formed, its (their)  functions, rights and responsibility shall be delegated to other managing bodies. If the Supervisory Board and the Board are not formed, the head of the Administration of a private Company shall be elected by the general meeting. If only the Board is formed, it shall be formed in accordance with the Supervisory Board formation procedure set forth in Par.s 2, 3, and 5 of Article 24. (Amended 20 December 1995)  4. If any of the Company's  managing bodies is not formed, the division of functions, rights and responsibility among the other managing bodies must be specified in the Company's Articles of Association.(Amended 20 December 1995) Article 19. General Meeting 1.  The supreme managing body of a Company shall be the general meeting.  All the shareholders of the Company irrespective of the number and class of shares they hold shall have the right to attend the Company's general meeting.  Members of the Board and the Supervisory Board as well as the head of the Administration, even if they are not shareholders, may also attend the general meeting without the right to vote. 2. The shareholders of a public Company whose securities accounts are operated by stockbroking firms may attend the general meetings presenting abstracts of their securities accounts concerning shares held by them. 3.  Only the general meeting shall have the right to: 1)  amend and supplement the Articles of Association of the Company; 2)  elect the auditor, inspector,  members of the Supervisory Board, in the event that the Supervisory Board is not formed - members of the Board, and if neither the Supervisory Board nor the Board is formed - elect the head of the Administration; (Amended 20 December 1995) 3)  remove from office members of the Supervisory Board and the Board, the inspector (auditor), and the head of the Administration who have been elected by the general meeting; (Amended 20 December 1995) 4)  fix the salary of the inspector and the conditions of payment of auditor’s fees, the annual payments from the net profit to the members of the Board and the Supervisory Board taking into account the provisions of Par. 4 of Article 47 and Article 48 of this Law; (Amended 20 December 1995) 5)  approve the annual accounts, adopt a resolution on the distribution of profit; 6)  increase  or reduce the authorised capital, exchange shares of one class for shares of another; 7)  liquidate or reorganise the Company; 8)  appoint an expert (a group of experts) for the inspection of the incorporation of the Company and  management of its affairs; 9)  approve the valuation of non-pecuniary (property) contributions; and 10) at the request of the Board, consider issues assigned to the Board, which pertain to the activity of the Company. 4.  The shareholders (or their proxies) attending the general meeting shall be registered by signing in the registration list.  The registration list must indicate the number of votes possessed by each shareholder.  The list shall be signed by the chairman and secretary of the meeting. 5.  The minutes of the general meeting shall be signed by the chairman, secretary and at least one shareholder authorised to do so by the meeting.  The list of the participants in the general meeting and ballot-papers of shareholders who voted in advance in writing shall be appended to the minutes. Article 20. Quorum of the General Meeting and Adoption of Resolutions 1.  The general meeting may adopt resolutions if the attending shareholders have more than 1/2 of the total number of votes.  If the meeting does not have a quorum, a repeat meeting must be called within 15 days which meeting shall have the right to adopt resolutions on all the items of the agenda irrespective of the number of shareholders present.  If the consent of shareholders holding shares of a certain class is necessary for the adoption of a resolution, the decision on the consent may be adopted by the meeting of the shareholders of the respective class, provided that the meeting is attended by shareholders who hold more than a half of the shares of said class. The procedure for calling a general meeting shall be valid for convening the repeat  meeting. 2.  Upon familiarising themselves with the agenda and the draft resolution, shareholders who are entitled to vote at the general meeting may inform the meeting in writing of their vote "for" or "against" in respect of each individual resolution.  Such communications shall be included in the quorum of the meeting and added to the voting results only provided that the issue has been put to the written vote. (Amended 20 December 1995) 3.  Voting at the general meeting shall be open. Secret voting shall be mandatory on the issues on which at least one shareholder requests a secret vote to be taken, provided that he is supported by at least 2 shareholders.  4.  The resolutions of the meeting shall be adopted by a simple majority vote of the shareholders present, with the exception of cases where resolutions require an at least 2/3 vote of those present: resolutions on issues specified in Par. 10 of Article 10, items 1, 5, 6, 7, 9 of Par. 3 of Article 19, Par. 7 of Article 27, Par. 3 of Article 31, and item 6 of Par. 1 of Article 48 of this Law. (Amended 24 September 1996) Article 21. Calling a General Meeting 1.  A general meeting shall be organised by the Board.  The right of initiative to call a meeting shall be vested in the Supervisory Board, the Board, and the shareholders  the par value of whose shares is no less than 1/10 of the authorised capital, unless the Articles of Association provide for a smaller portion of the authorised capital. 2. The Board must call a regular annual general meeting within 3 months of the end of the business year. 3. An extraordinary meeting must be called if: 1)  the amounts payable by the Company and its liabilities are in excess of 1/2 of  its ownership capital; (Amended 20 December 1995) 2) provisions are made for the reorganisation of the Company; 3) the Company is announced or announces itself to be not in the position to satisfy its financial liabilities; or 4) it is requested by the shareholders with the right of initiative or the Supervisory Board. The Articles of Association may also provide for other reasons for convening the extraordinary meeting. 4.  The persons who are demanding that a general meeting be called shall submit an application to the Board indicating the reasons and objectives for calling a meeting, a draft agenda, and proposals as to the time and place of the meeting.  If the Board fails to come to an agreement with the persons initiating the meeting on settling otherwise the issues proposed on the agenda, it must announce about the calling of the general meeting within 10 days of the submission of the application 5.  A general meeting may be called on a court decision if: 1)  a meeting has not been called within 3 months of the end of the business year and a shareholder has brought the matter to court; 2)  the persons who initiated the meeting  refer the matter to court after failing to get a favourable decision from the Board in accordance with the procedure established by Par. 4 hereof; and 3)  the creditors of the Company have appealed to court on the grounds of failure to call an extraordinary general meeting in the cases specified in Pars. 1 and 3 hereof. 6.  The Board must notify about the general meeting according to the procedure established by the Articles of Association no later than 30 prior to the day of the meeting. If a repeat meeting is called, the shareholders must be informed thereof no later than 10 days before the meeting.  A general meeting may be called without observing the above requirements provided that all the shareholders entitled to vote or their proxies give their consent thereto. 7.  The notice about the general meeting must state: 1)  the name  of the Company and the address of its registered office; 2)  the place and the date of the meeting; and 3)  the draft agenda. 8.  The shareholders must have a possibility for reviewing the documents related to the agenda of the meeting no later than 7 days before the meeting . Article 22. Agenda of the General Meeting 1.  The draft agenda of the general meeting may be revised. In the event that the agenda of the meeting referred to in the notice on the calling of the meeting is revised, the shareholders must be informed of the changes in the agenda in the same manner in which notice of the general meeting is given and no later than 10 days prior to the meeting. 2.  The meeting shall have no right to adopt resolutions on issues which are not on the agenda if not all shareholders who have the voting right attend the meeting. 3  Shareholders the par value of whose shares is no less than 1/20 of the authorised capital, shall be entitled to request the inclusion of additional items of business in the agenda.  This group of shareholders shall also have the right to nominate candidates for the Supervisory Board or the Board, and a candidate for the auditor's post. The Articles of Association may provide for a smaller par value of the shares which gives the shareholders this right. 4.  Only the agenda of a meeting which failed to take place shall be valid at the repeat meeting. Article 23. Invalidity of the Resolutions of a General Meeting 1.  On the declaration of the shareholders, the members of the Board, the Supervisory Board, and the head of the Administration, the resolutions of a general meeting may be declared invalid by court if: 1)  the issue on which the resolution is adopted has not been included in the agenda of the meeting in accordance with the procedure established by law; 2)  the registration documents and data changed by the resolution adopted by the meeting have not been registered in the Register of Enterprises of the Republic of Lithuania in the cases and within the period prescribed by laws; (Amended 20 December 1995) 3)  the procedure of calling a meeting or adopting the agenda, prescribed by Articles 21 and 22 of this Law, has been violated; and 4)  the resolution is not in compliance with  the Articles of Association of the Company, this Law, or other laws of the Republic of Lithuania. 2.  A resolution of the general meeting may be appealed in court no later than within 30 days of the day when the person learned or should have learned about its adoption.  Article 24. Formation of the Supervisory Board 1.  The number of members of the Supervisory Board shall be prescribed by the Articles of Association of a Company; the number must be no less than 3 and no more than 15. 2.  The Supervisory Board shall be elected by the general meeting. During the election of the Supervisory Board each shareholder shall have the number of votes which is equal to the number of votes carried by the shares held by him as established pursuant to Article 16 of this Law multiplied by the number of members of the Supervisory Board. The shareholder shall distribute the votes at his discretion, giving them for one or several candidates. Candidates who receive the greatest number of votes shall be elected. 3.  The Supervisory Board shall be elected for the term not exceeding 4 years.  A member of the Supervisory Board may be released from his duties or re-elected for another term of office.  The term of office of the Supervisory Board shall commence with the closing of the meeting at which it was elected. The Chairman of the Supervisory Board shall be elected by the members of the Supervisory Board. (Amended 20 December 1995) 4.  Only legally capable natural persons  may serve as members of the Supervisory Board. Each candidate for  the Supervisory Board  must inform the shareholders where he is employed and what post he holds. A person who is a member of the Board, head of the Administration of the Company, or a person who, pursuant to the laws of the Republic of Lithuania, has no right to perform these duties may not be a member of the Supervisory Board. 5.  The general meeting shall have the right to remove from office the entire Supervisory Board in corpore or its individual members. If, during the removal from office, at least one shareholder votes against the removal of individual members, the entire Supervisory Board must be re-elected upon the removal of a member. (Amended 20 December 1995) 6.  The Supervisory Board shall have the right to appoint its own member to serve on the Board for a term not exceeding 6 months. If the same member of the Supervisory Board is appointed to temporarily serve on the Board, the overall duration of his service on the Board may not exceed 12 months in 4 successive years. While serving on the Board, a member of the Supervisory Board may not perform the duties of a member of the Supervisory Board. 7.  The Supervisory Board shall have no right to delegate or transfer its functions to other persons or the managing bodies of the Company. 8.  A member of the Supervisory Board may resign from his office prior to the expiry of his term upon giving a written notice thereof to the Supervisory Board at least 14 calendar days in advance.  9. The general meeting may remunerate (make quarterly payments to) members of the Supervisory Board for their work only out of the net  profit,  taking into account the provisions of Par. 4 of Article 47 and Article 48 of this Law. (Amended 20 December 1995) Article 25. Powers of the Supervisory Board 1.  The Supervisory Board shall: 1)  appoint  or remove form office members of the Board; 2)  at the request of the Board decide on the issue concerning the termination of the employment contract with a member of the Supervisory Board employed in the  Company; 3)  analyse the work of the Board, the utilisation of financial resources, the organisation of production and management, the profitability of capital, remuneration for work, the correctness of depreciation deductions, the prospects of financial position; 4)_check the  accounting and other papers of the Company; 5)  make proposals  and comments to the general meeting on the annual accounts of the Company, the draft of the profit distribution, and the report of the Board to the general meeting; 6)  represent the Company in court proceedings when disputes between the Company and its Board, or a member of the Board, or the head of the Administration or the Company agent are examined; 7)  submit proposals to the Board to revoke the resolutions adopted by it if they are not in compliance with the laws of the Republic of Lithuania or the Articles of Association of the Company; and 8)  consider other issues provided for in the Articles of Association of the Company or in the resolutions adopted by the general meeting. 2.  The Supervisory Board shall have the right to appoint an expert (or group of experts) or ask a government financial institution to check and assess the Company's accounting.  The Articles of Association of the Company may specify a sum of money which may be paid to experts in remuneration for their work. 3.  At the request of the Supervisory Board the Administration of the Company and the Board must present documents concerning the activities of the Company and create conditions for inspecting the Company's assets. Members of the Supervisory Board must preserve the confidentiality of the  Company's secrets divulged to them in the course of their duties. 4.  Members of the Supervisory Board shall have equal rights.  During voting each member shall have one vote.  In the event of a tie vote the chairman's vote shall be decisive. 5.  If a member of the Supervisory Board is unable to attend a meeting, he may take a written vote  "for" or "against" the resolution which is being voted on provided that he has familiarised himself with the draft resolution. 6.  If the meeting of the Supervisory Board is attended by more than half of its members, the meeting may adopt resolutions by a simple majority vote of those present, with the exception of resolutions on removing from office members of the Board. In this case resolutions shall be adopted by a 2/3 vote of those present. 7.  The Supervisory Board must meet at least once quarterly.  Its regular meetings shall be called following the schedule by the chairman of the Supervisory Board or, in his absence, by the vice chairman. They shall call extraordinary meetings at the request of no less than 1/3 of the members of the Supervisory Board. The procedure for calling meetings shall be established in the work regulations of the Supervisory Board. 8.  Members of the Supervisory Board shall be liable in the manner established by law for concealing violations of the Company's business activities, inadequate control of business activities, if that provided conditions for the Board or the Administration to evade laws of the Republic of Lithuania or the Articles of Association of the Company.  Article 26. Formation of the Board 1.  The number of the Board members, which may not be less than 3, shall be established by the Articles of Association of the Company. The Board shall be  a collegiate body whose activities are directed by its chairman. 2.  Only legally capable natural persons may be appointed or elected as members of the Board. Each candidate for the Board members must notify the Supervisory Board of his place of employment and duties. The following persons may not be appointed or elected as members of the Board: 1)  members of the Supervisory Board of the same Company or its holding Company registered in the Republic of Lithuania, with the exception of the case provided for in Par. 6 of Article 24 of this Law; (Amended 20 December 1995) and 2)  a person who, under the laws of the Republic of lithuania,  may not  serve in the office. The Articles of Association of a Company may prescribe additional requirements to a member of the Board. 3.  The Board and its chairman shall be appointed by the Supervisory Board for a term not exceeding 4 years; in its absence, the Board members shall be elected by the general meeting. There is no limitation on the number of terms of office a member of the Board may serve. (Amended 20 December 1995) 4.  By notifying the Board in writing at least 14 calendar days in advance, a member of the Board may resign from his post before the expiry of his term of office. 5.  The general meeting may remunerate (pay quarterly payments to) members of the Board for their work on the Board only out of the net profit, taking into account the provisions of Par. 4 of Article 47 and Article 48 of this Law.  The members of the Board shall receive a salary if they have entered into an employment contract with the Company. (Amended 20 December 1995) Article 27. Powers and Liabilities of the Board 1.  The procedure of work of the Board shall be established in the work regulations adopted by the Board. The Board may represent the Company in court, arbitration  bodies and other institutions. The powers of the Board and its members shall be established by the Articles of Association of the Company. 2.  The Board shall consider and approve: 1)  the structure of the Company and the titles and duties of the Company's officers; 2) posts in which persons are employed only by holding  competitions as well as candidates for said posts; 3) the candidates for the post of the head of Administration, his deputies (directors) and their respective salaries; and 4) the office regulations for the head of the Administration, deputy heads (directors), regulations for the subdivisions of the enterprise, work regulations for the Administration. 3. The Board shall analyse and approve the material submitted by the Administration and the inspector (auditor) on: 1) the strategy of production, technical, research, design and experimental work as well as other business activities; 2) the organisation of management and production; 3) the sources of accumulation of financial resources and ways of their use; 4) contracts to which the Company is a party; and 5) quarterly and annual results of business activities, the Company's draft accounts, income and expenditure estimates, draft of the  distribution of profit, stock-taking data and other records of valuables; and 6) results of inspections and audits. (Amended 20 December 1995) 4. The Board must timely hold general meetings, draw up their agenda, presen …