REWARDING EMPLOYEES IN A LIMITED LIABILITY COMPANY – RESERVED OWN SHARE

We kindly inform you that by the last amendments of Serbian Companies Law (“Law”), a new institute called Reserved Own Share has been introduced enabling Serbian LLC’s as employers to procure its employees the right to acquire shares in it. With this opportunity in mind, employees are motivated to work even better, considering that a reward for the good work is becoming a part of the ownership structure of the company they are working for.

RESERVED OWN SHARE

As defined by Law, a Reserved Own Share of a company is a share that the company acquires from a member of the company without consideration, for the purpose of granting a financial instrument – right to acquire a share to its employees (“RAS”). RAS is a non-transferable financial instrument issued by a company that gives the consenting holder the right to acquire a share on a particular day (maturity day) at a certain price.

ACQUIRING THE RESERVED OWN SHARE

In order to procure this right to employees, in accordance with this Law, the Company’s Shareholders Meeting must render a Decision on Acquiring the Reserved Own Share (“Decision”). A company may have more reserved own shares, however the share percentage of all reserved own shares in the share capital of the company may not exceed 40%.

Also, a single-member LLC may also have a reserved own share.

Important information is that a company may acquire the reserved own share only from the shares that have been fully paid in. Also, a reserved own share may only be acquired from the shares of members who have voted in favor of the decision to acquire a reserved own share.

The reserved own share needs to be registered before Serbian Business Registers Agency (hereinafter: “BRA”).

After adopting the Decision and registering the reserved own share before BRA, the Company’s Shareholders Meeting must issue a decision on issuance of the RAS, whereby the provisions of the law governing the capital market relating to the Central Securities Depositary and Clearing House shall apply to the RAS.

If you are interested in this matter, please feel free to contact BOPA for more information and assistance in this regard.