1. Official translation
LAW ON COMPANIES
13 July 2000 No. VIII-1835
Vilnius
CHAPTER ONE
GENERAL PROVISIONS
Article 1. Purpose of the Law
The Law shall regulate the incorporation, reorganisation and liquidation of public
and private limited liability companies, their management and activities, the rights and
duties of their shareholders. When the provisions of this Law apply both to a public
and a private limited liability company, the term "company" shall be used.
Article 2. Public Limited Liability Company and Private Limited Liability
Company
1. The 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.
2. The company is a legal person with limited liability.
3. The company’s assets shall be separated from the shareholders’ assets. It shall
be liable for its obligations only to the extent of its assets. The shareholders shall be
liable for the obligations of the company only by the amounts which they must pay for
their shares.
4. The amount of the authorised 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 public trading in securities.
5. The amount of the authorised 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 100. The shares of a private limited liability company may not be
offered for sale or traded in publicly, unless other laws provide otherwise.
6. The company must have its name which must include the words “akcinė
bendrovė” (public limited liability company) or “uždaroji akcinė bendrovė” (private
limited liability company) or their respective acronyms (“AB” or “UAB”).
7. The company must have at least one account with the bank registered in the
Republic of Lithuania and its own seal.
8. The registered office of the company must be situated in the Republic of
Lithuania.
9. The company may be set up for a period of limited or unlimited duration. If the
Articles of Association of the company do not specify the period for which it is founded,
it shall be deemed to have perpetual existence. The duration of the company may be
extended, accordingly amending its Articles of Association.
Article 3. The Incorporators
The incorporators of the company shall be natural and legal persons of the
Republic of Lithuania or other states, the State or municipality, who have drawn up and
signed a Memorandum of Association in accordance with the procedure established by

2. this Law. Natural and legal persons of the Republic of Lithuania and other states may be
incorporators. The number of incorporator of the public limited liability company shall
not be limited. The private limited liability company may have not more than 100
incorporators. Each incorporator must acquire shares in the company and become its
shareholder.
Article 4. Shareholders
1. Shareholders are natural and legal persons of the Republic of Lithuania or other
states, also enterprises without legal personality, the State or municipality who have
each acquired at least one share in the company in the manner prescribed by law. For the
purposes of this Law the State of Lithuania or municipalities shall also be deemed to be
legal persons.
2. Each shareholder shall have such rights in the company which are incidental to
the shares in the company owned by him. All shareholders who are in the same position
shall have equal rights and duties.
3. If the holder of all shares in the company is one person, the person's written
decisions shall be equivalent to the resolutions of the General Meeting.
Article 5. The Company's Articles of Association
1 The Articles of Association of the company constitute the legal document
governing the conduct of the company's business.
2. The Articles of Association must state:
1) the name of the company;
2) the company's registered office;
3) the objects of the company and type of business activities;
4) the amount of the authorised capital;
5) the number of shares according to type and class, their nominal value and the
rights they carry;
6) the powers of the General Meeting, the procedure for convening the Meetings
and their voting rules;
7) the procedure for electing or removing from office members of the Supervisory
Board, the Board, the head of the Administration and the powers of the above bodies;
8) the procedure for communicating the notices of the company;
9) the procedure for presenting the company documents and other information to
the shareholders;
10) the procedure for making decisions on the establishment of branches and
representative offices of the company.
3. The Articles of Association of the company may also contain other provisions
which are in conformity with the laws of the Republic of Lithuania.
4. If business activities provided for in the company's Articles of Association are
regulated by other laws of the Republic of Lithuania, said laws must be complied with
when drafting and amending the company's Articles of Association.
5. The Articles of Association of the company being incorporated must be signed
by all the incorporators or their representatives before the statutory meeting. The
signature of a natural person must be notarised, whereas the signature of a legal person
or his representative shall be attested by a seal. The procedure established for attesting
the signature of natural persons shall apply to a foreign legal person who does not
posses a seal.

3. 6. The company’s Articles of Association and the amendments thereto shall be
valid only upon the registration thereof in the Register of Enterprises of the Republic of
Lithuania in the manner prescribed by law.
Article 6. Branch and Representation of a Company
1. The company shall have the right to set up its branches and representations in
the Republic of Lithuania and abroad.
2. The company shall be liable for the obligations of the branch or representative
office by way of all its assets.
Article 7. Parent Company and Subsidiary
1. A company shall be a parent company if it directly or indirectly holds a majority
of the votes in another company which is its subsidiary or if it may directly or indirectly
exercise a dominant influence on another company.
2. A company shall directly hold a majority of the votes in another company if it
owns shares in another company which grant over 50% of votes at the General Meeting.
3. A company shall indirectly hold a majority of the votes in a third company
when it directly holds the majority of votes in another company which directly or
indirectly holds a majority of votes in a third company.
4. For the purposes of this Law, the company shall be able to directly exercise a
dominant influence on another company only provided it satisfies at least one of the
following conditions:
1) the company has the right to elect or remove the head of the Administration, the
majority of members of the Board or Supervisory Board of another company and at the
same time is a shareholder of this other company;
2) is a shareholder of another company and may decide, under agreements
concluded with other shareholders of this other company, on the use of over 50% of the
votes granted by the shares in this other company. The proxy giving power to the
company to represent another shareholder and to vote for him and make decisions shall
be a sufficient proof of such an agreement.
5. The company can exercise indirect dominant influence on a third company only
if it satisfies at least one of the following conditions:
1) it is in the position to directly exercise dominant influence on another company
which directly or indirectly holds the majority of the votes in a third company or which
may directly or indirectly exercise dominant influence on a third company;
2) it holds directly or indirectly the majority of votes in another company which
may directly or indirectly exercise dominant influence on a third company;
3) together with the other companies in which it directly or indirectly holds the
majority of votes in them or upon which it may directly or indirectly exercise dominant
influence, or those other companies jointly hold shares in a third company which carry
over 50% of votes at the General Meeting or provided it satisfies the conditions listed in
paragraph 4 of this Article.
Article 8. Financial Year of the Company
The company’s financial year shall be the calendar year. Other 12-month periods
specifying the beginning and the end of the financial year may also be set in the
company’s Articles of Association. If the company was registered after the
commencement of the financial year, the day on which the company’s financial year
ends, as provided for in its Articles of Association, shall be considered as the close of

4. the company’s financial year. If the company is cancelled from the Register prior to the
close of the financial year, the last financial year shall end:
1) in case of liquidation - on the day of drawing up of the document of liquidation;
2) in case of reorganisation - on the day of drawing up of the document of transfer
of property.
CHAPTER TWO
INCORPORATION OF THE COMPANY
Article 9. Memorandum of Association
1. The incorporators of the company shall sign the Memorandum of Association. If
the company is formed by one person only, he shall sign not the Memorandum of
Association, but a document of incorporation to which the requirements of the
Memorandum of Association shall apply, except for the requirements laid down in
subparagraphs 10 and 12 of paragraph 3 of this Article.
2. The company’s Memorandum of Association shall be a public document.
3. The Memorandum of Association must indicate:
1) the incorporators (names, surnames, personal codes and addresses of natural
persons; names of legal persons, their codes, addresses of their registered offices, names
and surnames of the representatives of the said persons);
2) the name of the company;
3) the powers and obligations of the incorporators in the incorporation of the
company as well as liability for defaulting on their obligations;
4) persons (incorporators and other persons) who may represent the company
being incorporated and their powers;
5) the amount of the company’s authorised capital, nominal value of shares, the
price of issue of the shares;
6) the number of shares acquired by each incorporator, specifying their number
according to types and classes;
7) the rights granted by the shares acquired by the incorporators;
8) the procedure and time limits for the payment for shares, including the
procedure and time limits for the payment of initial contributions, default interest for
shares not paid up by the due date. The default interest may not be less than 0.05% of
the unpaid amount for each missed day;
9) the procedure for convening the statutory meeting;
10) the procedure for submitting to the incorporators the documents of the
company which is being incorporated, also of information relating to the statutory
meeting;
11) compensation of incorporation costs and remuneration for incorporation;
12) procedure of settlement of disputes between the incorporators;
13) the date of signing the Memorandum of Association.
4. The Memorandum of Association may also contain other provisions which do
not conflict with other laws of the Republic of Lithuania.
5. The Memorandum of Association shall be signed by all incporporators or their
representatives. Where at least one of the inocporators is a natural person, the
Memorandum must be notarised. Where all incorporators are legal persons, the
signatures of their managers or authorised persons shall be attested by seals. The
procedure established for attesting the signatures of natural persons shall be applied with
respect to a foreign legal person who does not possess a seal.

5. 6. The company’s Memorandum of Association, drawn up and signed in the
manner laid down in this Law, shall grant the right to open an accumulative deposit
account of the company which is being incorporated with a bank registered in the
Republic of Lithuania and, in case of incorporation of a public limited liability
company, to register the shares with the Securities Commission.
Article 10. Subscription and Payment for Shares of a Company which is
being Incorporated
1. The shares of the company which is being incorporated shall be signed by its
incorporators. The terms and conditions of the share subscription agreement shall be set
out in the Memorandum of Association.
2. Where a public limited liability company is being incorporated, the terms and
conditions of the Memorandum of Association, laid down according to the requirements
of subparagraphs 6, 7 and 8 of paragraph 3 of Article 9 of this Law shall become
effective only after the registration of the shares with the Securities Commission.
3. The shares of a company which is being incorporated must be fully paid within
the time limit set in the Memorandum of Association, which may not be longer than 12
months from the date of drawing up and signing of the Memorandum of Association.
4. Paragraphs 1, 2, 7, 8 and 9 of Article 48 of this Law shall apply to the payment
for shares of a company which is being incorporated.
5. At the time the company is incorporated, the initial contributions for the shares
subscribed for shall be paid only in cash into the accumulative account of the company
which is being incorporated within the time limit set in the Memorandum of
Association. The company shall be entitled to use the funds in the account only after its
registration. The initial contribution of each incorporator shall be not less than one
quarter of the nominal value of the shares subscribed for by him plus the whole of any
premium, whereas the total amount of initial contributions received prior to the statutory
meeting must be not less than the minimum authorised capital of the company
prescribed by Article 2 of this Law.
6. If the incorporator partly pays up the shares in money’s worth, the assets used
for payment for company shares and the value thereof must be indicated in the
Memorandum of Association. Valuation of the contribution made otherwise than in cash
prior to the signing of the Memorandum of Association must be made by assets valuers
according to the procedure specified in the laws and other legal acts of the Republic of
Lithuania which regulate property valuation.
7. The assets valuers who make valuation of contributions made otherwise than in
cash must draw up a valuation report indicating, besides other information:
1) the person valuation of whose assets has been made;
2) description of every element of the assets the valuation whereof has been made;
3) description of the valuation methods used;
4) the nominal value of shares acquired for consideration other than in cash;
5) conclusion whether the established value of the assets comprising the
contribution made otherwise than in cash corresponds to the number and issue price of
shares to be issued for the contribution.
8. The report of the valuers of assets who made the valuation of assets comprising
the consideration other than in cash for shares of a public limited liability company
which is being incorporated shall be disclosed in the manner prescribed by law.
Article 11. Right to Act on Behalf of the Company which is being
Incorporated

6. 1. Before the registration of the company the persons indicated in the
Memorandum of Association shall be entitled to enter into contracts on behalf of the
company. Such a contract shall impose obligations on the company upon its approval by
the General Meeting. If the General Meeting refuses to approve the contract, the persons
who entered into it shall be jointly liable for the obligations under the contract.
2. The incorporators of the company or other persons indicated in the
Memorandum of Association may receive remuneration from the company for the
incorporation of the company or compensation of company incorporation expenses
substantiated by documents. Disputes between the incorporators and other persons
indicated in the Memorandum of Association regarding the compensation of company
incorporation expenses and remuneration for company incorporation shall be settled in
court.
3. The shareholders or the company may demand that the incorporators or other
persons indicated in the Memorandum of Association compensate for the losses incurred
by the company prior to its registration due to their misfeasance, dealing with company
incorporation matters in bad faith. The shareholders or the company shall not be entitled
to compensation for damage incurred due to contracts approved of by the General
Meeting. Disputes concerning compensation for damage shall be settled in court.
Article 12. Statutory Report
1. After all initial contributions for the shares have been paid, the incorporators of
the company shall, no later than 15 days before the statutory meeting, draw up the
statutory report, which shall specify:
1) incorporation expenses;
2) paid-up authorised capital (paid-up nominal value of shares);
3) proceeds from the sale of shares;
4) expected assets comprising the contribution to be made otherwise than in cash
for the subscribed for shares, the value of the contributions and reference to the reports
of the valuers of assets who made the valuation of assets comprising the contribution
other than in cash;
5) the number of shares subscribed for by each incorporator, for which he has paid
the initial contribution, also the number of the shares by types and classes;
6) incorporation expenses subject to reimbursement, remuneration for company
incorporation.
2. Each incorporator shall be granted access to the statutory report and shall be
entitled to receive its copy.
Article 13. Statutory Meeting
1. After all initial contributions have been paid, the incorporators must convene the
statutory meeting before the registration of the company.
2. Provisions prescribed by this Law for the General Meeting, except for the
requirements set forth in Articles 24(1), 26, 27(1) and 28 of this Law, shall apply to the
statutory meeting. The incorporators shall have right to vote at the statutory meeting. If
the statutory meeting does not have a quorum, a repeat statutory meeting shall be called.
The agenda of the statutory meeting shall be drawn up by the person authorised by the
incorporators in the Memorandum of Association.
3. The statutory meeting shall approve the statutory report of the company,
approve the firm of auditors, elect members of the company management bodies,
address other issues within the competence of the General Meeting.

7. 4. In case of failure to approve the company’s statutory report or to elect at the
statutory meeting members of the company management body who, pursuant to the
Articles of Association, are elected by the General Meeting, a repeat statutory meeting
shall be convened.
Article 14. Registration of the Company
1. The company shall be subject to registration in the Register of Enterprises of the
Republic of Lithuania. The company shall be deemed incorporated and shall acquire the
rights of legal person as from the day of its registration.
2. The company shall be registered upon the payment of all initial contributions for
shares subscribed for and after the holding of the statutory meeting which approved the
company’s statutory report and elected members of company management bodies who,
under the company’s Articles of Association, are due to be elected by the General
Meeting.
3. If the company is not registered within 4 months from the signing of the
Memorandum of Association, it shall be deemed not to have been incorporated and,
upon the expiry of the said time limit, the contributions paid in for the shares subscribed
for shall be returned.
4. The incorporators shall within 7 days from the day of company registration
transfer the documents to the company (to the company Board or, in case such has not
been formed, to the head of the Administration), signing the document of transfer.
Article 15. Acquisition of Assets from the Incorporator of Public limited
Liability Company
1. For two years after the registration of the public limited liability company every
contract of the company for the acquisition of assets from the company incorporator,
where the sum of the contract or the aggregate sum of such contracts is not less than
1/10 of the company’s authorised capital, shall become effective only after the valuation
thereof by the assets valuers appointed by the Board in the manner prescribed by the
laws and other legal acts of the Republic of Lithuania regulating assets valuation and
after the approval of the contract/contracts at the General Meeting by an at least two-
thirds majority vote and after the disclosure of the assets valuation report in the manner
laid down by law.
2. In addition to other information, the assets valuation report shall contain
information specified in subparagraphs 1, 2 and 3 of paragraph 7 of Article 10 of this
Law and the conclusion as to whether the value of the acquired assets corresponds to the
amount paid for them.
3. Paragraphs 1 and 2 of this Article shall not apply where the assets are acquired
in the course of regular business activities of the company, also in respect of contracts
entered into in the Central Market of the Securities Exchange.
CHAPTER THREE
RIGHTS AND DUTIES OF THE COMPANY AND SHAREHOLDERS
Article 16. Rights and Duties of the Company
1. The company may enter into contracts, assume obligations and have other rights
and duties, provided they do not contradict the laws of the Republic of Lithuania.

8. 2. The company shall be entitled to lend and borrow money. The company may
not engage in the activities credit institutions. The amount of funds lent by the company
to natural and legal persons may not exceed its equity capital.
3. The company shall be entitled to borrow from its shareholders, both natural and
legal persons, in the ways prescribed by laws. When borrowing from its shareholders,
the company may not offer its assets to the shareholders as a colateral. When the
company borrows from the shareholders under a loan agreement, the annual rate of
interest may not be higher than the last quarter’s weighted average rate of annual
interest on the Republic of Lithuania Treasury bills published in “Valstybės žinios”
(Official gazette) by the Government or the institution authorised by it.
4. The company may not make advance payments, either directly or indirectly,
grant loans or guarantee discharge of obligations where the purpose of the above actions
is to provide conditions for other persons to acquire shares in the company.
5. If the company has not settled accounts with the creditors within the fixed time
limits and the total debt to the creditors amounts to over 1/20 of the company’s
authorised capital, it must obtain the creditors’ written consent before investing assets
into another enterprise.
Article 17. Information Contained in the Company’s Letters and Documents
1. The company’s documents whereby orders are placed, also its letters shall
indicate:
1) the register in which the company is registered, the administrator of the register
and his address;
2) the code of the company;
3) the name of the company as indicated in the company registration certificate;
4) the address of the registered office of the company recorded in the company
registration certificate;
5) if the company is in liquidation, the word “in liquidation” must precede the
name of the company.
2. Where reference to the capital of the company is made in the letters and
documents of the company, the amount of the authorised capital and the amount of the
paid-up authorised capital must be indicated.
3. The company’s documents whereby orders are placed and its letters must
contain all information about the company referred to in paragraphs 1 and 2 of this
Article and about the register in which the company is registered, the register
administrator and his address, the name, code number and address of the branch.
Article 18. Rights and Duties of Shareholders
1. Property and non-property rights and duties of shareholders shall be established
by this Law and other laws of the Republic of Lithuania and the company’s Articles of
Association. The property and non-property rights of shareholders specified in Articles
19 and 20 of this Law may not be subjected to any restrictions, except in cases specified
by laws or by court order.
2. The shareholders shall have no financial obligations to the company save for the
obligation to pay up, in the prescribed manner, all the shares subscribed for at their issue
price. The resolution of the General Meeting obligating all or part of the shareholders to
make additional contributions shall be invalid if at least one of them objects to the
resolution.
3. A share shall not be divisible into parts. If a share is held by several
shareholders, all its holders shall be considered to be a single shareholder. The rights

9. carried by the share shall be exercised by one shareholder as per common notarised
agreement. The holders of the share shall be jointly liable for the shareholders’
obligations.
4. In order to implement their property and non-property rights, two or more
shareholders may conclude the shareholders’ agreement. The agreement must specify
the following:
1) the shareholders - name and surname, personal code number and address of
natural persons; name, code number and address of the registered office of legal
persons;
2) the company’s name;
3) commitments of the shareholders - parties to the agreement as regards voting on
all or on individual items on the agenda of the General Meeting, regarding the
implementation of resolutions adopted by the meeting or non-property rights;
4) responsibility for failure to honour the commitments entered into;
5) the procedure for settling disputes between the shareholders - parties to the
agreement;
6) the period of validity of the agreement.
5. The person who acquired all shares of the company or the holder of all shares in
the company who transferred a part of his shares to another person must within 15 days
notify the head of the company Administration of the acquisition or transfer of shares.
Notifying of the acquisition of all shares, a natural person must give his name, surname,
personal code number and address, whereas a legal person shall indicate its name, code
number, address of the registered office. If all shares of the company are acquired by
one person or the holder of all shares of the company transfers all or a part of the
company shares to other persons, the company shall notify the administrator of the
register of enterprises thereof within 15 days from the day the company learnt or should
have learnt thereof.
Article 19. Property Rights of Shareholders
1. The shareholder shall have the following property rights:
1) to receive a part of the company's profit (dividend);
2) to receive a part of assets of the company in liquidation;
3) to receive shares without payment if the authorised capital is increased out of
the company funds, except in cases specified in paragraph 2 of Article 44 of this Law;
4) to have the pre-emption right, except in cases when the General Meeting
decides to withdraw the pre-emption right in acquiring the company’s newly issued
shares for all the shareholders;
5) to bequeath all or part of shares to one or several persons;
6) to transfer all or part of the shares into the ownership of other persons. In the
private limited liability company this right is limited according to the procedure
established in Article 49 of this Law;
7) other property rights provided for by laws or the Articles of Association of the
company.
Article 20. Non-property Rights of Shareholders
1. Shareholders shall have the following non-property rights:
1) to participate in the General Meetings;
2) to receive information on the business activities of the company;
3) to appeal to the court against the resolutions or actions of the General Meeting,
the supervisory Board and head of the Administration. One or several shareholders may

10. claim, without a specific authorisation, compensation for damage caused to the
shareholders;
4) to conclude a contract with the firm of auditors for auditing the company’s
activities and documents as prescribed by paragraph 3 of Article 60 of this Law;
5) other non-property rights provided for by laws or the company’s Articles of
Association.
2. If all the voting shares of the company are of the same nominal value, all shares,
except for special shares the status whereof is regulated by Article 46 of this Law, shall
each carry one vote at the General Meeting
3. The company’s Articles of Association may establish that shares of certain
classes do not carry voting rights.
4. Except in cases where the shareholder has acquired all the shares of the
company, he shall not be entitled to vote:
1) on the approval of the contracts concluded by him with the company where
such approval is required under the laws or the company’s Articles of Association;
2) on the adoption of the resolution to withdraw the right of pre-emption in respect
of the shares or convertible debentures issued by the company if the right to acquire the
above securities is thereby granted to him, his spouse, parents (adoptive parents) and
children (adopted children);
3) where the company is operating at a loss due to the violation of provisions of
paragraph 8 of Article 22 of this Law, on the suitability for the office held by the
members of the Supervisory Board, the Board or the head of the Administration, when
this issue is considered by the General Meeting, if he himself is the person under
consideration.
5. If voting shares are of different nominal value, one share of the lowest nominal
value shall give its holder one vote. The number of votes granted by other shares shall
be equal to their nominal value divided by the smallest nominal value of a share. A
number of votes shall also be given where in the cases set forth by this Law the right to
vote is granted to the owners of non-voting shares. A different procedure for
determining the number of votes may also be provided for by the Articles of
Association, however, the number of votes given by a share shall be proportionate to its
nominal value.
6. The right to vote at the General Meeting convened prior to the expiry the time
limit for the payment for the first issue of shares, specified in the Memorandum of
Association, shall be given by the shares for which initial contributions have been paid,
thereafter voting rights shall be carried only by fully paid shares.
7. At the shareholder’s written request the company must within 5 working days
from the receipt of the request present to him for inspection and/or copying annual and
interim financial statements, reports on the activities of the company, minutes of the
General Meetings and the register of shareholders; the company shall also present
minutes of the Supervisory Board and Board meetings to the shareholders who have
given a written pledge prescribed by the company not to disclose a commercial secret
provided that the minutes contain no restricted information relating to the company’s
stock events. A commercial secret shall be information (except for the public
information specified by the laws of the Republic of Lithuania) which is attributed to
commercial secrets by the resolution of the company Board. Having given a written
pledge not to disclose the commercial secret, the shareholder who owns shares the total
nominal value whereof accounts for at least 1/20 of the company’s authorised capital or
the proxy of the shareholders who own shares the total nominal value whereof accounts
for at least 1/20 of the company’s authorised capital shall have the right of access to all

11. minutes of the Supervisory Board or the Board, the contracts entered into by the
company, also the offered guarantees, surety, contracts of mortgage and exchange of
fixed assets. The shareholders who own shares which carry over 1/2 of all votes shall
have the right of access to all company documents. The shareholder or the proxy shall
be liable under law for the disclosure of a commercial secret. At the shareholder's
request, refusal to present the requested documents must be executed in writing.
Disputes relating to the shareholder’s right to information shall be settled in court.
8. Documents or other information relating to the company must be furnished to
the shareholders free of charge, unless the company’s Articles of Association provide
otherwise. The charge fixed in the Articles of Association may not exceed the cots of
furnishing of the documents and other information.
9. The register of shareholders presented to the shareholders shall state the names,
surnames (names of legal persons) of the shareholders, the number of registered shares
owned by the shareholders, the shareholders’ addresses for correspondence according to
the most recent data available to the company.
Article 21. Proxies
1. The shareholder shall have the right to authorise another person to vote for him
as his proxy at the General Meeting or perform other legal acts. The proxy of the
shareholder who is a natural person must be notarised, whereas the proxy of the
shareholder who is a legal person must be attested by it's manager's signature and the
seal. The procedure for attesting the signature established for natural persons shall be
applied with respect to a foreign legal person who does not possess a seal. The
shareholder may by a general written proxy authorise the intermediary of public trading
in securities who manages his personal account of the company securities.
2. Upon arrival at the General Meeting and signing in the shareholders registration
list, the shareholder’s proxy must present to the person in charge of the registration of
the participants in the Meeting the original of the proxy or a notarised copy thereof. The
name of the person who gave the proxy and the time when the proxy was given as well
as the number and period of validity of the proxy shall be recorded in the registration
list.
3. The shareholder may withdraw his proxy. He must notify the company in
writing of the withdrawal of the proxy.
4. If the proxy fills in the general ballot on behalf of the shareholder and submits it
to the company before it receives the shareholder’s notice of the withdrawal of the
proxy, the general ballot shall be deemed valid and the shareholder shall not be entitled
to vote at the shareholders’ meeting, except in the case where the shareholder proves
that the proxy knew or should have known about the withdrawal of the proxy before the
submission of the general ballot to the company.
5. If shares are sold or otherwise transferred to the depository (an institution which
keeps records of securities, organises and controls operations with securities) and the
bank further converts them issuing depositary receipts or using other financial
instruments, the authorised agent of the depository shall vote at the General Meeting
following the written directions of the shareholders or according to the shareholders’
agreement.
CHAPTER FOUR
MANAGEMENT OF THE COMPANY
Article 22. Management Bodies

12. 1. The management bodies of the company shall include the General Meeting, the
Supervisory Board, the Board, and the head of the Administration.
2. The compulsory management bodies of a public limited liability company shall
be the General Meeting, the head of the Administration and at least one collegial
management body - the Supervisory Board or the Board.
3. The compulsory management bodies of a private limited liability company shall
be the General Meeting and the head of the Administration. Formation of the
Supervisory Board and the Board in a private limited liability company shall not be
compulsory.
4. If the Supervisory Board is not formed in the company, its functions shall not be
assigned to other management bodies.
5. Where the Board is not formed in the company, its functions, rights, duties and
responsibility established by this Law shall be taken over by the head of the
Administration, save for the rights and duties taken over pursuant to this Law by the
Supervisory Board or the General Meeting.
6. In case the General Meeting adopts amendments to the Articles of Association
regarding the number of the Supervisory Board or Board members or a new
management body, the newly-elected members of the management body shall
commence their activities no earlier than from the day of registration of the amendments
to the Articles of Association in the Register of Enterprises of the Republic of Lithuania.
7. The General Meeting shall not be entitled to charge other management bodies to
address the issues assigned to its competence. The General Meeting shall have the right
to obligate to address the issues assigned to the competence of the Supervisory Board,
the Board or the Administration
8. The management bodies of the company shall act only for the benefit of the
company and its shareholders. The management bodies of the company shall not be
entitled to make decisions or perform other actions which violate the company’s
Articles of Association or are against the objects of the company specified in the
Articles of Association, manifestly go beyond normal production-business risks, are
undoubtedly unprofitable (purchase of goods, services or works at prices exceeding
market prices or their underselling, waste of the company’s assets) or are unmistakably
ineffective from the economic point of view.
Article 23. Restriction of Rights of the Members of Management Bodies
1. Unless he is given consent of the management body which elected him, a
member of the Supervisory Board, the Board, the head of the Administration may not be
on the Supervisory Board or Board (or bodies equivalent to them) of the enterprise
engaged in similar business activities or enterprise which continues the company’s
production or service process and sale of products. Without having been given
authorisation by the management body which elected him, the head of the
Administration may not be the head of Administration of any other enterprise.
2. If a member of the company’s Supervisory Board, the Board or the head of the
Administration violated the requirements set in paragraph 1 of this Article, he shall
resign from the management bodies of the enterprise or company and be held
responsible under law.
3. Every candidate to the members of the company’s management bodies must
inform the management body which is electing him where and what office he holds,
how his other activities are connected with the company and its parent or subsidiary
companies.

13. 4. Every candidate to the members of the company’s management bodies or
member of the company’s management body shall notify the management body which
is electing or has elected him if he owns shares accounting for 1/4 or more of the
authorised capital of an enterprise engaged in similar activities or an enterprise which
continues the company’s production or services process and sale of products.
5. If a member of the company’s management body violates the requirements of
this Law, every shareholder of the company shall be entitled to appeal to the court for
the compensation of damage caused to the company within 90 days from the day when
he found out or should have found out of the violations committed by the management
body member.
Article 24. General Meeting
1. The General Meeting is the supreme management body of the company. All
persons who are the shareholders of the company on the day of the meeting, irrespective
of the number and class of shares they hold, shall have the right to attend the company's
General Meeting, unless the company’s Articles of Association provide that the General
Meeting (including a repeat meeting) may be attended by persons who were
shareholders of the public limited liability company at the close of the shareholders’
registration day of the General Meeting. The shareholders’ registration day of the
General Meeting shall be not earlier than 30 days and not later than 10 days prior to the
General Meeting in respect of which the day is designated and not earlier than the tenth
day after the Board meeting which designated the day. Members of the Supervisory
Board and the Board as well as the head of the Administration, even though they are not
shareholders, shall be entitled to participate in the Meeting and be given the floor.
Every General Meeting shall elect the chairman and secretary of the meeting, except in
the case specified in paragraph 7 of this Article.
2. Only the General Meeting may:
1) amend and supplement the Articles of Association of the company (except for
the cases provided for in paragraph 6 of Article 39, paragraph5 of Article 51,
paragraph 3 of Article 52 and paragraph 6 of Article 55 of this Law);
2) approve the firm of auditors, elect the members of the Supervisory Board, if the
Supervisory Board is not formed - members of the Board, if the Board is not formed -
the head of the Administration;
3) dismiss the firm of auditors, members of the Supervisory Board, members of
the Board elected by the General Meeting, the head of the Administration. If the
company is operating at a loss, the General Meeting must consider the suitability for
office of the members of the Supervisory Board, the Board, or the head of the
Administration;
4) fix the conditions of payment for auditing services, the annual payments
(bonuses) from the net profit to the members of the Board and the Supervisory Board
pursuant to the provisions of Article 61 of this Law;
5) approve the annual financial statements, the business report of the Board (if the
Board is not formed - the head of the Administration);
6) adopt a resolution to increase the authorised capital:
7) determine the type, class, number and set the minimum issue price of the shares
issued by the company;
8) adopt a resolution to withdraw for all the shareholders the pre-emptive right to
acquire the shares or convertible debentures of the specific issue of shares or convertible
debentures issued by the company;

14. 9) adopt a resolution to reduce the authorised capital (with the exception of cases
provided for in paragraphs 5 and 6 of Article 39 and paragraph 6 of Article 55 of this
Law;
10) adopt a resolution to issue convertible debentures;
11) adopt a resolution to exchange the company’s shares of one type or class for
those of another type or class, approve the procedure of exchange of shares;
12) adopt a resolution for the company to purchase its own shares;
13) adopt a resolution to liquidate the company or to cancel the liquidation of the
company (with the exception of the cases provided for in subparagraphs 2, 3 and 4 of
paragraph 1 of Article 75 of this Law);
14) elect and dismiss the liquidator of the company (with the exception of the
cases provided for in subparagraphs 2, 3 and 4 of paragraph 1 of Article 75 and
paragraph 1 of Article 76 of this Law);
15) adopt a resolution to reorganise the company and approve the draft plan of
reorganisation (except in the case provided for in Article 73 of this Law);
16) for a period of two years from the registration of a public limited liability
company approve the contracts for the acquisition of assets from the incorporator of the
company if the sum of a separate contract or the total sum of contracts amounts to at
least 1/10 of the company’s authorised capital;
17) adopt a resolution on the appropriation of the profit (except in the case
provided in paragraph 8 of Article 61 of this Law);
18) adopt a resolution to build up reserves, with the exception of the revaluation
reserve;
19) adopt a resolution on the transfer, lease or mortgage of fixed assets the value
whereof amounts to over 1/20 of the company’s authorised capital as well as on offering
guarantee, surety for the discharge of obligations of other entities, when the amount of
the obligations exceeds 1/20 of the company’s authorised capital.
3. The General Meeting may also adopt other resolutions which are not provided
for under this Law for the other management bodies of the company.
4. The person who is on the list of registered share holders, compiled on the day of
the General Meeting or on the day of record of shareholders of the General Meeting of
the public limited liability company, may attend the General Meeting upon producing a
document which is a proof of personal identity. The holder of bearer shares may also
attend the General Meeting upon presenting an excerpt from the account issued by the
securities account manager about the bearer shares owned by him or which he owned at
the close of the day of record of the General Meeting.
5. The shareholders (their proxies) taking part in the General Meeting shall be
registered by signing in the shareholder registration list. The shareholder registration
list must indicate the number of votes held by each shareholder. The list shall be signed
by the chairman and secretary of the Meeting. The shareholders who have already voted
by the general ballot must be named in the registration list.
6. The minutes of the General Meeting shall be within 3 working days signed by
the chairman, the secretary of the Meeting and at least one shareholder authorised by the
Meeting. The shareholders who have at least 1/20 of votes at the General Meeting shall
be entitled to additionally appoint their representative for the signing of the minutes of
the General Meeting. To that end they shall present to the chairman of the Meeting an
application signed by the shareholders. The person authorised (appointed) to sign the
minutes shall be entitled to present his commentaries or opinion in writing about the
facts set out in the minutes.

15. 7. The Government shall not elect the chairman and secretary of the Meeting if it
is attended by less than three shareholders. In such event the shareholder registration list
and the minutes of the General Meeting shall be signed by each shareholder attending
the General Meeting.
8. Settlement of disputes relating to the invalidity of the minutes of the General
Meeting or parts thereof shall be within the jurisdiction of the court. The list of
registration of the attending shareholders, the proxies and the general ballots of
shareholders who voted in advance as well as documents which are proof of the
shareholders having been notified of the convening of the General Meeting shall be
attached to the minutes of the General Meeting. The minutes of the General Meeting at
which the resolutions changing the information on the company kept with the Register
of Enterprises of the Republic of Lithuania were adopted, the minutes (copies thereof)
with annexes (copies thereof) must be presented to the administrator of the Register of
Enterprises within 10 days after the meeting. Minutes of the General Meetings are
official documents. They shall be preserved and kept in accordance with the procedure
established by the Law of the Republic of Lithuania on Archives. Falsification of the
above minutes shall be punishable in the manner prescribed by law.
Article 25. Inspector of the General Meeting
1. The General Meeting of the company may elect the inspector of the General
Meeting for the next General Meeting. The inspector of the General Meeting shall be a
shareholder of the company.
2. If the General Meeting fails to elect the inspector for the next General Meeting
or where the elected inspector is not in the position to perform his duties, he shall be
appointed by the Board prior to the Meeting, in case the election of the inspector is
provided for in the Articles of Association of the company.
3. The inspector of the General Meeting shall establish:
1) the total number of shares carrying the right to vote at the Meeting;
2) the number of submitted valid and invalid general ballots filled in advance;
3) the number of valid and invalid proxies submitted;
4) the number of vote-carrying shares represented at the Meeting (both personally
and through a proxy and having filled in the general ballot-papers);
5) whether the Meeting has a quorum;
6) the results of voting at the Meeting.
Article 26. Convening the General Meeting
1. The right of initiative to convene the General Meeting shall be vested in the
Supervisory Board, the Board and the shareholders who have at least 1/10 of all votes,
unless the Articles of Association provide for a smaller amount of votes, as well as the
institution which holds special shares.
2. The General Meeting shall be convened on the resolution of the Board. If the
Board has not been formed in the company, or if the number of the company’s Board
members is not more than one half of their number specified in the Articles of
Association, the General Meeting shall be convened on the decision of the head of the
Administration. The General Meeting must be convened on the decision of the head of
the Administration if the Board of the company fails to convene the Meeting in the
instances and within the time limits provided for in this Law. The General Meeting may
be convened on the decision of the shareholders with more than 1/2 of all votes or
holding special shares if the persons who attempted to initiate the convening of the

16. meeting did not receive a favourable decision of the company’s Board or head of the
Administration as regards the convening of the General Meeting.
3. The General Meeting may be called upon the court order if:
1) the meeting has not been called within 4 months of the end of the financial year
and at least one shareholder has brought the matter to court;
2) the initiators of the General Meeting applied to the court with a complaint about
the failure by the Board or the head of the Administration to convene the General
Meeting as prescribed by paragraph 6 of this Article;
3) the creditors of the company applied to the court complaining about the failure
to call an Extraordinary General Meeting in the case specified in subparagraph 1 of
paragraph 5 of this Article.
4. The Board must convene the Annual General Meeting each year within 4
months of the end of the financial year.
5. The Extraordinary General Meeting must be convened if:
1) the company’s equity capital falls below 3/4 of the authorised capital specified
in the Articles of Association;
2) the number of the Supervisory Board or Board members has declined to 2/3 of
their number specified in the company’s Articles or less than their minimum number
prescribed by this Law (because of the retirement or inability to continue in office);
3) the head of the Administration of a private limited liability company, elected by
the General Meeting, resigns or is not in the position to continue performing his duties;
4) the firm of auditors terminates the contract with the company or is for any other
reasons unable to audit the company’s annual statements;
5) it is requested by the shareholders with the right of initiative, the Supervisory
Board or the Board;
6) the duration of the company specified in the Articles of Association is drawing
to a close;
7) it is required under other laws or the company’s Articles.
6. The persons who initiated the convening of the General Meeting shall file an
application with the Board (if the Board is not formed or the number of Board members
is not more than half of their number indicated in the Articles - to the head of the
Administration), indicating the reasons and objectives of convening the Meeting, the
drafts of the proposed resolutions, proposals regarding the date and place of the
Meeting. If the Board (or the head of the Administration) fails to come to an agreement
with the persons initiating the Meeting on settling in any other way the issues proposed
for the Meeting, it must convene the General Meeting within 40 days of the receipt of
the application.
7. In the case provided for in subparagraph 6 of paragraph 5 of this Article the
Extraordinary General Meeting must be convened at least 30 days before the expiry of
the company duration period specified in the Articles of Association. The period of
duration of the company may be extended at the Meeting by amending the Articles of
Association of the company or the liquidator shall be elected.
8. The venue of the General Meeting must be in territory of the municipality in
which the registered office of the company is located. If the shares of the public limited
liability company are listed on the Official List of the Stock Exchange registered in the
Republic of Lithuania, the venue of the General Meeting may be in the territory of the
municipality where the headquarters of the Stock Exchange are located.
Article 27. Agenda of the General Meeting

17. 1. The agenda of the General Meeting shall be drawn up by the company
management body or institution upon adopting a decision to convene the General
Meeting. Issues proposed by the persons initiating the Meeting must be included in the
agenda of the Meeting.
2. The agenda of the General Meeting may be supplemented upon the proposal to
include new issues, put forward by the Supervisory Board, the Board (if the Board is not
formed - the head of the Administration), the institution holding special shares or
shareholders with not less than 1/20 of all votes. The proposal to supplement the agenda
may be submitted not later than 15 days before the General Meeting. The company
management bodies and persons specified in this paragraph may also submit new drafts
of resolutions, propose additional candidates to the company management bodies, the
firm of auditors. The Articles may also provide for less votes entitling the shareholders
to supplement the agenda of the General Meeting, propose new draft resolutions,
additional candidates to the members of company management bodies elected by the
General Meeting, the firm of auditors.
3. If the agenda of the Meeting referred to in the notice on the calling of the
Meeting has been changed, the shareholders must be notified of the changes in the
agenda in the same manner in which the notice of the General Meeting is given no later
than 10 days before the Meeting.
4. If removal from office of the members of the company management bodies or
dismissal of the firm of auditors is on the agenda of the General Meeting, the issues
regarding the election of new members of the management bodies or approving a new
firm of auditors must accordingly be included in the agenda.
5. The General Meeting shall not be entitled to adopt resolutions on issues not on
the agenda if it is not attended by all the voting shareholders.
6. Only the agenda of the Meeting which failed to take place shall be valid at
repeat meeting.
Article 28. Notice of the General Meeting
1. The management body of the company or the institution which passed a
decision to convene the General Meeting shall present to the head of the Administration
information and documents required for giving a notice of the General Meeting. The
head of the Administration must publish the notice of the General Meeting in the
periodical publications specified in the Articles of Association or hand in the notice to
every shareholder against by his signature or send the notice by registered mail no later
than 30 days before the day of the Meeting. The General Meeting may be convened
without observing the above time limits if all voting shareholders or their proxies give
their written consent thereto. The shareholders of private limited liability companies
shall in all cases be delivered the notices upon their signed acknowledgement of the
delivery or by a registered letter. The head of the Administration shall inform the
shareholders at the opening of the Meeting of the documents proving that the
shareholders have been given notice of the General Meeting. The documents must be
attached to the minutes of the General Meeting.
2. If a repeat meeting is convened, the shareholders must be informed in the
manner laid down in paragraph 1 of this Article. In this case an at least 10 days’ notice
is required.
3. Notices of the General Meeting must specify:
1) the name of the company and the address of the registered office;
2) the date, time and place of the Meeting;
3) the agenda of the Meeting;

18. 4) the company’s management body or the institution which adopted the decision
to convene the General Meeting and the persons who initiated the calling of the
Extraordinary General Meeting;
5) where the passing of the resolution on the reduction of the authorised capital is
on the agenda of the Meeting - the purpose and intended method of the reduction of
capital.
4. At least 30 days before the General Meeting the shareholders must be granted
access to the documents available to the company, relating to the agenda of the Meeting,
including drafts of the resolutions, as well as the application filed with the Board (or the
head of the Administration) by the persons who initiated the convening of the General
Meeting. If the shareholder so desires in writing, the head of the Administration shall
within 3 days from the receipt of the written request deliver to him upon his signed
acknowledgement all draft resolutions of the Meeting or shall send him the above drafts
by a registered letter. A notice must be given with the drafts of the resolutions indicating
on whose initiative they have been included. Where the person who initiated the draft
resolution has submitted explanations of the draft resolution, these must be attached to
the draft resolutions.
Article 29. Quorum of the General Meeting and Passing of Resolutions
1. A General Meeting may pass resolutions provided that it is attended by the
holders of shares which carry over 1/2 of all votes. After the presence of a quorum has
been established, the quorum shall remain continuously throughout the Meeting. If a
quorum is not present, a repeat Meeting must be convened within 15 days, which shall
be authorised to adopt resolutions on the issues on the agenda irrespective of the number
of shareholders attending the Meeting. If the consent of the holders of a certain type or
class of shares is necessary in order to adopt a resolution, a resolution regarding the
consent may be adopted by a meeting of the holders of a certain type or class of shares,
attended by the shareholders who own over 1/2 of all the shares of the type or class. The
procedure for convening the General Meeting shall be applicable for calling the
meeting.
2. For the purpose of establishing the total amount of the votes carried by the
shares of the company and the quorum of the General Meeting, the shares the exercise
of the voting right granted by which is prohibited under paragraph 7 of Article 55 of
this Law, under other laws and on the basis of the court order, shall be considered as
non-voting shares.
3. A possibility for voting in advance may be provided for in the Articles of
Association of the company. In this case the shareholder entitled to vote at the meeting,
having been presented for scrutiny the agenda and draft resolutions, may notify the
General Meeting in advance in writing (by filling in the general ballot) whether he is
“for” or “against” each resolution. The advance voting by ballot shall be included in the
quorum of the meeting and the results of voting. The general ballots of the meetings
which have not taken place shall be valid at repeat meetings. The shareholder shall have
no right to vote at the General Meeting for the resolution in respect of which he has
expressed his will in advance in writing.
4. Voting at the General Meeting shall be decided on a show of hands. On the
issues on which at least one shareholder requests a secret vote be taken and provided
that he is supported by shareholders possessing at least 1/10 of votes at the General
Meeting, secret voting shall be mandatory to all shareholders.
5. The resolutions of the General Meeting shall be adopted by a simple majority
vote of the shareholders present, with the exception of the following cases:

19. 1) election of the Supervisory Board or the Board in accordance with the
regulations laid down in paragraph 3 of Article 32 of this Law;
2) adoption of resolutions on the issues specified in subparagraphs 1, 6, 7, 9, 10,
11, 13, 15, 16, 17, 18, 19 of paragraph 2 of Article 24 this Law, requiring a 2/3 majority
vote of those present at the Meeting;
3) adoption of the resolution specified in subparagraph 8 of paragraph 2 of Article
24 of this Law, which requires a 3/4 majority vote of those present at the Meeting;
4) adoption of resolutions which requires approval of the holders of certain types
or classes of shares.
6. The company’s Articles of Association may provide for a larger than 2/3
majority required in order to adopt resolutions specified in subparagraph 2 of paragraph
5 of this Article and a larger than 3/4 majority for the adoption of the resolution referred
to in subparagraph 3 of paragraph 5 of this Article.
7. If in the cases specified paragraph 4 of Article 20 of this Law the shareholder is
not entitled to vote, the results of the voting shall be established according to the number
of votes of shareholders present at the Meeting who are entitled to vote on deciding the
issue.
Article 30. General Ballot
1. If the company’s Articles of Association provide for the possibility to vote in
advance, the company shall prepare the general ballots. The following shall be indicated
in the ballot:
1) drafts of the resolutions which shall be put to a vote at the General Meeting.
The wording of the draft resolutions must be such as to allow the shareholder to vote
either for or against the resolution;
2) candidates to the members of the company’s management bodies elected at the
General Meeting, the firm which is a candidate to the firm of auditors which has to be
approved. The above candidates must be presented in the manner which would enable
the shareholder to mark the candidate he is voting for or to indicate the number of votes
he gives to each candidate to the Supervisory Board (if the Supervisory Board is not
formed - the Board) members.
2. All draft resolutions and candidates to the members of the company’s
management bodies elected by the General Meeting, the candidate firms from which the
firm of auditors has to be approved, which have been put forward by the persons on
whose initiative the Meeting has been convened and the company’s management bodies
or persons specified in paragraph 2 of Article 27of this Law must be entered in the
general ballot not later than 15 days before the General Meeting.
3. The company must not earlier than 15 days and not later than 10 days before the
General Meeting send the general ballots by registered mail or hand them in personally
against signature to the shareholders entitled to vote should the shareholders so request
in writing.
4. After the general ballot has been sent or handed in to the shareholder, the ballot
may not be changed. The company’s Articles of Association may provide that new
drafts of resolutions and candidates to the management bodies elected by the General
Meeting or to the firm of auditors to be approved may not be put forward after the
general ballot has been sent or handed in.
5. The name, surname and personal code (name and code of the legal person) of
the shareholder must be indicated on the general ballot.
6. The general ballot signed by the shareholder (his proxy) shall be deemed valid if
it contains the requisites prescribed by paragraph 5 of this Article and is delivered to the

20. company not later than one day before the General Meeting. The general ballot signed
by the shareholder (his proxy) and delivered to the company shall be irrevocable, save
for the exception laid down in paragraph 4 of Article 21 of this Law.
Article 31. Invalidity of the Resolutions of the General Meeting
1. On the application of the interested persons, the resolution of the General
Meeting shall be declared invalid in accordance with the judicial procedure if:
1) the issue on which the resolution is adopted has not been entered in the agenda
of the Meeting in accordance with the procedure established by law;
2) the registration documents and information 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 time limit prescribed by laws;
3) the procedure for convening the meetings or drawing up the agenda, prescribed
by Articles 26, 27 and 28 of this Law, has been violated;
4) the company has not prepared and/or sent/or delivered the general ballots drawn
up in the manner prescribed by this Law to the shareholders who requested the ballots, if
the possibility of advance voting is provided for in the company’s Articles of
Association, except where this did not have a decisive effect upon the quorum of the
Meeting or the adoption or rejection of the resolution;
5) the shareholder was represented at the General Meeting by a person who did not
have the shareholder’s proxy, the shareholder’s proxy voted at the Meeting exceeding
his powers, vote was taken by holders of non-voting shares, except where the
shareholder’s vote did not affect the quorum of the Meeting or the passing or rejection
of the resolution;
6) the resolution is not in compliance with the Articles of Association of the
company, this Law, or other laws of the Republic of Lithuania;
7) the resolution is detrimental to the company.
2. A resolution of the General Meeting may be appealed against to the court not
later than within 30 days from the day when the person learned or should have learnt
about its adoption.
Article 24. Formation of the Supervisory Board
1. The Supervisory Board is a collegial body supervising the activities of the
company and directed by its chairman.
2. The number of members of the Supervisory Board shall be set by the Articles of
Association of the company; the number of members must be not less than 3 and not
more than 15.
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 which is equal to the number of votes carried by the shares held by him as
established pursuant to Article 20 of this Law 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. Candidates who receive the
greatest number of votes shall be elected. If the number of candidates who received an
equal number of votes is larger 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 a term not exceeding 4 years. The
number of terms a member may serve on the Supervisory Board shall not be limited.

21. 5. The Supervisory Board shall elect the chairman of the Supervisory Board from
among its members.
6. Only legally capable natural persons may serve as members of the Supervisory
Board. Prohibited from serving on the Supervisory Board shall be:
1) members of the company’s Board;
2) head of the Administration of the company;
3) a person indicated in paragraph 1 of Article 23 of this Law;
4) a person who, pursuant to the laws of the Republic of Lithuania, has no right to
perform these duties.
7. The General Meeting may remove from office the entire Supervisory Board in
corpore or its individual members before the expiry of their term.
8. A member of the Supervisory Board may resign from 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. If a member of the Supervisory Board is removed from office, resigns or for any
other reason stops performing his duties and the shareholders who hold at least 1/20 of
all votes in the company object to the election of individual members of the Supervisory
Board, the operating Supervisory Board must be dismissed and a new Supervisory
Board in corpore must be elected. Should individual members of the Supervisory Board
be elected, they shall be elected only until the expiry of the term of office of the
operating Supervisory Board.
10. The general meeting may remunerate (pay bonuses to) members of the
Supervisory Board for their work only out of the net profit, taking into account the
provisions of Article 61 of this Law.
Article 33. Powers and Responsibility of the Supervisory Board
1. The Supervisory Board shall:
1) elect members of the Board (if the Board is not formed - the head of the
Administration) and remove them from office. If the company is operating at a loss, the
Supervisory Board must consider the suitability of the Board members (if the Board is
not formed - the head of the Administration) for their office;
2) analyse the work of the Board and the head of the Administration, the use of
financial resources, the organisation of production and management, the profitability of
capital, remuneration for work, the correctness of depreciation deductions, the
company’s financial prospects;
3) make proposals and comments to the General Meeting on the company’s
annual financial statements, the draft of the profit distribution and the report on the
company’s activities drawn up by the Board (the head of the Administration);
4) represent the company when disputes between the company and its Board
member or the head of the Administration or his deputy are brought before the court;
5) submit proposals to the Board and the head of the Administration to revoke
their resolutions which are not in conformity with the laws of the Republic of Lithuania
or the Articles of Association of the company or the resolutions of the General Meeting;
6) consider other issues provided for in the Articles of Association or in the
resolutions adopted by the General Meeting.
2. The Supervisory Board shall have no right to assign or delegate its functions to
the Board or the head of the Administration.
3. The Supervisory Board shall be entitled to appoint a firm of auditors to audit
the accounting documents and financial statements of the company. The General
Meeting may fix the maximum amount of funds that may be allotted to pay the charges

22. of the firm or auditors. 4. At the request of the Supervisory Board the company’s
head of the Administration and the Board must present documents relating to the
activities of the company and provide conditions for inspecting the company's assets.
Members of the Supervisory Board must keep the company's commercial secrets
divulged to them in the course of their duties confidential.
5. The Supervisory Board shall commence its activities upon the closure of the
General Meeting which elected it, save for the exception provided for in paragraph 6 of
Article 22.
6. The procedure of work of the Supervisory Board shall be laid down in the work
regulations of the Supervisory Board adopted by it.
7. The Supervisory Board must meet at least once quarterly. Its regular meetings
shall be called according to the schedule by the chairman of the Supervisory Board or,
in his absence, by the vice chairman. Extraordinary meetings shall be called at the
request of no less than 1/3 of the members of the Supervisory Board. The procedure for
announcing meetings shall be laid down in the work regulations of the Supervisory
Board.
8. Members of the Supervisory Board shall have equal rights. During voting each
member shall have one vote. In the event of a tie the chairman’s vote shall be casting.
9. If a member of the Supervisory Board is unable to attend the 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.
10. The Supervisory Board may adopt resolutions if its meeting is attended by
more than half of its members. The members of the Supervisory Board who voted in
advance shall also be included in the quorum. Resolutions of the Supervisory Board
shall be adopted by a simple majority vote of those present (including members who
cast their vote in advance in writing), with the exception of resolutions on removing
members of the Board from office. Such resolutions shall be adopted by a 2/3 vote of
the Supervisory Board members present at the meeting (including members who voted
in advance in writing).
11. 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 head of the
Administration to ignore the laws of the Republic of Lithuania or the Articles of
Association of the company.
Article 34. Formation of the Board
1. The Board is a collegial body, whose activities shall be directed by the chairman
of the Board.
2. The number of the Board members, which may not be less than 3, shall be
established by the company’s Articles of Association.
3. The Board and its chairman shall be elected by the Supervisory Board for a term
not exceeding 4 years; in its absence, the Board members shall be elected by the General
Meeting in accordance with the procedure established by Article 32 of this Law for the
election of the Supervisory Board. The Board shall elect its chairman from among its
members. The institution holding special shares shall be entitled to appoint one Board
member. There is no limitation on the number of terms of office a member of the Board
may serve.
4. Only competent natural persons may be appointed/elected as members of the
Board. The following persons may not be appointed or elected as members of the Board:

23. 1) members of the Supervisory Board of the same company or its parent company
registered in the Republic of Lithuania;
2) a person specified in paragraph 1 of Article 23 of this Law;
3) a person who, under the laws of the Republic of Lithuania, may not serve on
the Board.
5. The Supervisory Board (if the Supervisory Board is not formed - the General
Meeting) may remove the Board in corpore or its individual members from office
before the expiry of their term.
6.A member of the Board may resign from his post before the expiry of his term of
office, notifying the Board in writing at least 14 calendar days in advance.
7. The General Meeting may remunerate (pay bonuses to) members of the Board
for their work on the Board only out of the net profit, taking into account the provisions
of Article 61 of this Law.
Article 35. Powers and Responsibility of the Board
1. The Board shall consider and approve:
1) the structure of the company management and positions;
2) posts in which persons are employed only by holding competitions;
3) salaries of the head of the Administration and his deputies;
4) the office rules of the head of the Administration and his deputies, the rules of
the branches of the company.
2. The Board shall elect and remove from office the head of the Administration.
The Board shall approve of the candidates nominated by the head of the Administration
to his deputies as well as well as of the candidates to the posts to which employees are
chosen on the basis of competition.
3. The Board shall analyse and evaluate the material submitted by the head of the
Administration 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 entered into by the company;
5) financial situation of the company;
6) results of business activities, income and expenditure estimates, stock-taking
data and other records of valuables.
4. The Board shall analyse, assess the company’s draft annual financial statements
and draft of the appropriation of profit and, having approved of the above drafts, submit
them to the General Meeting. The Board shall determine the method of estimating asset
depreciation and depreciation rates.
5. The Board must hold General Meetings in due time, ensure the compiling of the
list of holders of registered shares, draw up the agendas of the General Meetings,
present to the shareholders the company's annual financial statements, the draft of the
appropriation of profit, the report on the company’s activities and other required
information for considering the items on the agenda.
6. The Board shall adopt:
1) decisions on the company becoming the incorporator, member of other
enterprises;
2) decisions on the transfer, lease or mortgage of fixed assets the value whereof
amounts to over 1/20 of the company’s authorised capital as well as on offering

24. guarantee or surety for the discharge of obligations of other entities, when the amount of
the obligations exceed 1/20 of the company’s authorised capital;
3) decisions on the acquisition of fixed assets the price whereof exceeds 1/20 of
the company’s authorised capital;
4) other decisions which are assigned to the competence of the Board by the
company’s Articles of Association or resolutions of the General Meeting.
7. A resolution of the General Meeting adopted by an at least 2/3 majority vote
shall be required for every decisions of the Board specified in subparagraph 2 of
paragraph 6 of this Article. During a financial year the sum of the total balance-sheet
value of the fixed assets transferred, leased, or mortgaged under the contracts entered
into without the approval of the General Meeting and the amount of other entities’
liabilities for the fulfilment whereof guarantee or surety is offered may not exceed 1/20
of the company's authorised capital value. The company’s Articles of Association may
provide for other cases where the approval of the General Meeting is required for the
decisions of the Board.
8. The Board shall discharge its functions for the term fixed in the Articles of
Association or until a new Board is elected and commences its work.
9. The procedure of work of the Board shall be set forth in the Rules of Work the
Board adopted by it.
10. Every member of the Board shall have the right of initiative to convene the
Board meeting. The decisions adopted by the Board shall be valid if voted in favour of
by at least a half of the Board members. The Articles of Association of the company
may prescribe a larger majority of votes required for the adoption of decisions. When
this is provided for by the laws of the Republic of Lithuania, the member of the Board
appointed by the institution representing special shares shall have the right of veto
when voting on separate issues. When other issues are put to the vote, the Board
member appointed by the institution representing special shares shall not be entitled to
vote. A member of the Board shall not be entitled to vote when the Board meeting is
taking a decision on his pecuniary liability issues or personal matters relating to his
work in the company.
11. The Board must invite the head of the Administration to every meeting of the
Board, provided he is not a member of the Board, and provide him with an opportunity
to have access to the information relating to the issues on the agenda.
12. The Board shall be prohibited from restricting the auditor’s powers or
interfering with his work in any other way.
13. The members of the Board must keep the company's commercial secrets
confidential.
14. The chairman and members of the Board must jointly compensate for the
losses incurred by the company by reason of the decisions of the Board adopted in
violation of the company's Articles of Association, this Law and other laws of the
Republic of Lithuania. Released from the obligation to compensate for the losses shall
be persons who voted against the decision or did not attend the meeting at which the
decision was adopted, provided that they file with the presiding officer a written protest
within 7 days after they learnt or should have learnt about the decision. The resignation
of a member of the Board or his removal from office shall not release him from the
obligation to compensate for the losses incurred through his fault. A member of the
Board may be released from the obligation to compensate for the losses inflicted by him
through the performance of his duties provided that he acted in accordance with the
company’s documents and other information the accuracy whereof was beyond

25. reasonable doubt, or if he acted within the limits of normal production-business risks.
Disputes concerning the compensation for losses shall be settled in court.
Article 36. Report on the Company’s activities
1. 10 days before the Annual General Meeting the Board must draw up a report on
the company’s activities. The report shall contain:
1) an overview of the company’s activities in the financial year;
2) names of the company’s subsidiary companies, the number of shares of the
companies acquired by the company, the total nominal value of the said shares and the
share in the authorised capital of the these companies represented by them, assessment
of benefit derived by the company form holding a majority of votes or exercising a
dominant influence in the said companies;
3) the number of own shares and shares of other companies acquired and
transferred in the course of the financial year as well as substantiation of the said
acquisitions and transfers;
4) information on the company’s branches;
5) material events in the company at the close of the financial year;
6) plans and forecasts of the company’s activities.
2. The company’s Articles of Association may also set other requirements for the
report on the company’s activities.
3. If the Board is not formed in the company, the report on the company’s
activities, meeting the requirements of this Article, must be drawn up by the head of the
Administration.
4. The reports on the activities of public limited liability companies and private
limited liability companies specified paragraph 2 of Article 60 of this Law must be
audited by the auditor prior to the Annual General Meeting. The reports on the activities
of the above companies shall be public: upon the request of every interested person the
company must provide conditions for access at the company’s registered office to the
report on the company’s activities and the auditor’s opinion on the report or present a
copy of the above documents or a part thereof.
5. If the General Meeting fails to approve the report on the company’s activities or
gives the report a negative evaluation, the Board (if the Board is not formed - the head
of the Administration) shall lose its powers. The Board (the head of the Administration)
shall discharge its functions until the election of a new Board (the head of the
Administration). If the report on the company’s activities is not approved, the head of
the Administration or the Board, if it is elected by the General Meeting, must forthwith
convene the General Meeting for the election of a new head of the Administration or the
Board.
Article 37. Internal Auditor of the Company
1. The company’s Articles of Association may stipulate that the financial activities
of the company shall be controlled by the internal auditor.
2. The internal auditor shall be elected by the General Meeting for the term set in
the Articles of Association.
3. The procedure of work of the internal auditor shall be established by the work
regulations of the internal auditor.
4. The Administration and Board of the company must submit to the internal
auditor the accounting and financial documents requested by him.

26. 5. The company shall pay the internal auditor a salary for his work. The amount of
the salary or the terms and conditions of payment for work shall be determined by the
General Meeting.
6. The internal auditor must keep the company’s commercial secrets divulged to
him in the exercise of control over the company’s financial activities confidential.
7. The internal auditor’s qualification requirements shall be set by the Government
of the Republic of Lithuania or the institution authorised by it.
Article 38. Head of the Administration and the Administration
1. The company shall have the head of the Administration (the president, director
general, director).
2. The head of the Administration shall direct the Administration which shall
organise and carry out the company’s business activities. The head of the
Administration shall approve the work regulations of the Administration, employ and
dismiss the Administration staff members, conclude employment contracts with them.
3. The head of the company’s Administration shall represent the company in the
relations with the third parties both in the court and in the arbitration institution. The
head of the Administration shall acquire the right to represent the company from the
date fixed in the employment contract.
4. The head of the Administration may enter into contracts specified in
paragraph 6 of Article 35 of this Law only on the basis of the decisions of the Board.
The company’s Articles of Association may specify other cases when the head of the
Administration may enter into contracts with third parties only having been given the
consent of the General Meeting or the Board. The limits on the powers of the head of
the Administration of the company, arising under the Articles of Association, may
never be relied on as against third parties, even if the Articles of Association have been
disclosed in the manner prescribed by law.
5. The head of the Administration must communicate to the Board material
specified in paragraphs 3 and 4 of Article 35 of this Law.
6. In his activities the head of the Administration of the company shall be
guided by the company’s Articles of Association, resolutions of the General Meeting,
decisions of the Board and work regulations of the Administration.
7. The head of the Administration may have deputies. The Articles of
Association of the company may specify spheres of activity where the deputies of the
head of the Administration shall be entitled to act independently and to enter into
contracts of the company. The limits on the powers of the deputy head of the
Administration may be relied on by the company as against third parties only from the
day of disclosure of the Articles of Association in the manner prescribed by law.
8. The head of the Administration shall be elected and removed from office
by the Board of the company (if the Board is not formed - by the Supervisory Board,
and where the Supervisory Board is not formed either - by the General Meeting). A
competition may be held to choose the head of the Administration. The Board of the
company (if the Board is not formed - the Supervisory Board, and where the
Supervisory Board is not formed either - the person authorised by the General Meeting)
must within 2 working days notify the administrator of the Register of Enterprises in
writing of the election or removal from office of the head of the Administration.
9. The head of the Administration may be a competent natural person with
whom a contract of employment shall be concluded. A person not entitled under the
laws of the Republic of Lithuania to occupy the post may not be appointed head of the
Administration.

27. 10. The contract of employment shall be signed with the head of the
Administration by the chairman of the Board (if the Board is not formed - by the
Supervisory Board, and where the Supervisory Board is not formed either - by the
person authorised by the General Meeting). If the head of the Administration is a
member of the company Board, the contract of employment with him shall be signed by
the chairman of the Supervisory Board (if the Supervisory Board is not formed - by the
person authorised by the General Meeting).
11. If the head of the Administration is not a member of the Board, he shall
participate in the meetings of the company in a deliberative capacity.
12. If the head of the Administration or his deputy enters into a contract which
is beyond his competence, exceeding exposure to normal business risk, or performed
other unlawful actions thereby inflicting damage on the company (including loss of
profit) or if by reason thereof the persons derive direct or indirect benefit at the cost of
the company or shareholders, the company and the shareholder or shareholders of the
company shall be entitled to claim through the court compensation for the damage
(including the loss of profit) incurred because of the contract or the above actions.
13. Having entered into a contract beyond his competence, the head of the
Administration shall bear subsidiary liability if the claims of the third person are not
satisfied in full from the company.
CHAPTER FIVE
CAPITAL OF THE COMPANY
Article 39. The Capital Structure
1. The company's capital shall be divided into equity capital and borrowed
capital. The equity capital shall be formed out of the share issue price and the profit of
the company. The borrowed capital shall be formed by issuing debentures, taking loans
and by borrowing funds in any other way.
2. The company's equity capital shall consist of:
1) the authorised capital;
2) the share premium (the amount above nominal value);
3) revaluation reserve;
4) legal reserve;
5) reserves for purchasing own shares (in public limited liability companies);
6) reserves specified in the Articles of Association;
7) other reserves;
8) profit (losses) brought forward;
7) grants and subsidies;
10) deferred charges (expenditure formed by increasing the current period costs
or reducing the income, which are anticipated in the subsequent periods in order to
correctly reflect the performance of the periods).
3. The authorised capital shall amount to the sum total of the nominal values of all
subscribed for shares of the company.
4. If the company's equity capital becomes less than 3/4 of the authorised capital
specified in the Articles of Association, the Board shall convene the Extraordinary
General Meeting. The Meeting may adopt a resolution to reduce the company’s
authorised capital by the amount which is not less than the difference between the equity
capital and the authorised capital or to liquidate the company. The shareholders may
also decide to cover the difference by additional contributions.

28. 5. If the General Meeting failed to adopt the resolutions provided for in paragraph
4 of this Article and the difference between the equity capital and the authorised capital
was not covered by additional contributions, the Board shall within 15 days from the
General Meeting, but not later than within 2 months from the moment when it learnt or
should have learnt of the equity capital having fallen below 3/4 of the authorised capital,
must apply to the court for the reduction of the authorised capital of the company by the
sum whereby the equity capital has fallen below the authorised capital.
6. After the court order to reduce the company’s authorised capital becomes
effective, the Board of the company must change the amount of the authorised capital of
the company accordingly, first of all by cancelling its own shares acquired by the
company and, should this prove insufficient, by reducing the nominal value of the
remaining shares or cancelling the shares, reducing the number of shares for all
shareholders in proportion to the number of shares of the company owned by them and
by making appropriate amendments in the Articles of Association of the company. The
amended Articles of Association of the company must be presented for registration in
the Register of Enterprises of the Republic of Lithuania within 15 days from the
coming into effect of the court order.
7. Paragraphs 4, 5 and 6 of this Article shall not apply until the expiry of the time
limit for payment for the company shares of the last issue.
Article 40. Reserves and their Composition
1. The revaluation reserve - the amount whereby the value of long-term tangible
and financial assets increased upon the asset revaluation. The revaluation reserve shall
be reduced when the revalued assets are written off, subjected to wear, depreciated or
transferred into the ownership of the State, municipality or other persons. The
revaluation reserve may not be used to reduce losses. The revaluation reserve may be
applied to increase the authorised capital in accordance with the procedure established
in Article 53 of this Law.
2. The legal reserve shall be formed from the deductions from the net profit in
accordance with the procedure established in paragraph 4 or Article 61 of this Law and
shall be used to cut the losses. In case of reduction of the authorised capital the legal
reserve may be reduced retaining the ratio specified in paragraph 4 of Article 61 of this
Law. When decreasing the authorised capital, the difference in the amount of the legal
reserve shall be attributed to the profit or loss of the accounting period to be
appropriated.
3. The reserve for purchasing own shares shall be formed in order to cover the
acquisition value of the own shares of a public limited liability company. The amount of
the reserve may not be less than the sum total of the values of own shares acquired by
the public limited liability company.
4. The reserves specified in the Articles of Association and other reserves shall
consist of the reserves available for distribution and reserves not available for
distribution.
5. Reserves not available for distribution shall be formed in accordance with the
procedure established by law and the company’s Articles of Association for specific
purposes by transferring part of the net profit of the accounting period. Reserves not
available for distribution shall be formed, reduced and liquidated upon the resolution of
the General Meeting by an at least 2/3 majority vote. When reserves not available for
distribution are being reduced or liquidated, the authorised capital shall be increased by
an appropriate amount and the nominal value of shares shall be increased pro rata to the

29. nominal value of shares of the company owned by the shareholders, or new shares shall
be issued.
6. Reserves available for distribution shall be formed and used only in accordance
with the procedure established in the Articles of Association of the company.
7. The reserves provided for in paragraphs 3 and 4 of this Article shall be formed
only after the legal reserve prescribed by paragraph 2 of this Article has been formed.
Article 41. Shares
1.Shares are securities signifying an ownership position in a company, evidencing
the participation of their holders in the company's capital and entitling them to property
and non-property rights. Shares in private limited liability companies may be
represented by certificates (documents printed in accordance with the requirements
established by the Government of the Republic of Lithuania ) or uncertificated
(represented by entries in the securities accounts). The shares of public limited liability
companies must be uncertificated. The shares of public limited liability companies must
be registered with the Securities Commission.
2. The nominal value of a share must be quoted in litas without indicating the
centas. 3. Shares are divided into the following types:
1) according to the manner of disposal - into registered and bearer shares;
2) according to the rights attached - into ordinary and preference shares.
4. The shares of one type are divided into classes according to the rights carried
by them. The rights carried by the shares of different classes must be specified in the
Articles of Association of the company. All shares of one class must be of equal
nominal value.
5. Uncertificated shares shall be represented by entries in securities accounts.
The securities accounts of private limited liability companies shall be administered by
the issuing private limited liability company, whereas the securities accounts of public
limited liability companies shall be administered by the entities specified in the Law on
Public Trading in Securities (hereafter – account administrators).
6. The accounts administrator which has opened the shareholder’s securities
account shall issue, upon the shareholder’s request, the statement of account indicating
the number of shares and other information relative to the shares entered in the account,
which is prescribed by law.
7. The information that must be provided in the securities accounts in relation to
uncertified shares shall be specified by the regulatory enactments regulating the
accounting of securities and trading in securities.
8. A share represented by a certificate must state:
1) the word "Share " and the type of the share;
2) the code and name of the private limited liability company;
3) nominal value of the share;
4) number;
5) the rate of dividend on preference shares and the voting right carried by them;
6) the date of issue;
7) the name, surname and personal code (the name and code of a legal person);
8) the signature of the chairman of the Board (if the Board is not formed – the head of
the Administration) attested by the seal of the private limited liability company.
9. Shares may be offered for secondary trading after the company has been
registered or its authorised capital has been increased and after the shares have been
fully paid up at their issue price.