Section V Increase of the Capital Stock

(1)

The capital stock may be increased by issuing new shares, by increasing the nominal value of shares already issued, or by converting debentures into shares pursuant to Article 215.

(2)

The general meeting of shareholders resolution to increase the capital stock shall be adopted by a two thirds majority of the votes of the shares represented at the meeting. The by-laws may provide for a larger majority, as well as for additional conditions.

(3)

Where shares of various classes exist, the resolution shall be adopted by each class at a separate meeting.

(4)

Where the new shares are to be sold at a price exceeding their nominal value, the minimum sale price shall be specified in the general meeting resolution.

(5)

An increase of the capital stock is admissible only after the specified by the by-laws amount has been fully paid up.

(6)

(New - SG 84/2000) In the case of increase of capital in violation of Art. 161, par. 4 the members of the managing board or board of directors, shall be jointly liable for the contributions for the registered own shares.

(7)

(New - SG 56/1995, prev. par. 6 - amended, SG 84/2000) In the case of increase of capital Chapter Fourteen, Sub-section II shall apply respectively and  increase of the capital stock trough subscription shall be carried out under the terms and conditions established by the Law.

(8)

(New - SG 114/1999, prev. par. 7 - amended, SG 84/2000) For entering in the register the increase of the capital stock through subscription, shall be presented a prospectus except the cases when such is not required by the Law.

(1)

In order the capital increase to be entered in the commercial register, it shall be necessary:

1.

the new shares to be registered;

2.

at least 25% of nominal value of the new shares to have been paid;

3.

the difference between the nominal and the issued value of the new shares to have been paid;

(2)

If the new shares have not been registered in full, the capital shall be increased only with the value of the registered shares in case the decision of then general meeting for the increase permits such possibility.

(3)

The list with the persons registered the new shares shall be presented to the commercial register certified by the managing board, respectively the board of directors.

Where the capital stock is increased by non-monetary contributions, the general meeting resolution shall specify the subject of each contribution, the contributor, and the nominal value of shares given for such contribution.

(1)

(Amended - SG 84/2000) Each shareholder is entitled to acquire a part of the new shares in proportion to its share in the capital stock prior to the increase.

(2)

(Amended - SG 84/2000) In case of shares of different class the right under Par. 1 shall valid for the shareholders of the respective class. The rest of the shareholders shall exercise their privilege after the shareholders of the class from which are registered the new shares.

(3)

(New - SG 84/2000) The right under Par. 1 and 2 shall be lapsed within a term determined by the general meeting, but not lee than a month after the publishment in the State Gazette of the invitation for registration of the shares.  The invitation for registration of new shares shall be entered into the commercial register after presenting the  decision for the increase of the capital

(4)

(New - SG 84/2000) The shareholders' right under the  par. 1 and 2  may be restricted or forfeited pursuant to a general meeting resolution passed with three quarters of the votes of the shares represented. The managing board, respectively the board of directors shall present a report concerning the reasons for the restriction or forfeiting of the privilege and shall motivate the issued value of the new shares. The decision of the general meeting shall be presented at the commercial register and published.

The increase of the capital stock may be conditional upon the buying of the shares by certain persons at a certain price, or against debentures issued by the company.

(1)

(Previous Art. 196-Amended - SG 84/2000) The by-laws may empower the managing board, or the board of directors as the case may be, to increase the capital stock up to a certain nominal amount in the course of five years from the date of incorporation, by issuing new shares. A resolution to the same effect may also be passed by amending the by-laws in compliance with the requirements of Art. 192, Par. 3, for a period not exceeding five years from the date of registration of the amendment.

(2)

(New - SG 84/2000) Art. 194, Par. 1 and 2 shall apply in case of capital increase under the previous paragraph.

(3)

(New - SG 84/2000) The managing board, respectively the board of directors may dismiss shareholder or restrict shareholder's right under Art. 194, Par. 1only if the by-laws or the general meeting resolution passed by majority of 2/3 of the shares represented, empowers the mentioned bodies for the said action.

(1)

The general meeting may resolve to increase the capital stock by partial capitalisation of profits. The resolution shall be adopted within three months from the date that the annual statement for the previous year is approved, with a majority of the votes of three quarters of the shares represented at the meeting.

(2)

The company's balance sheet shall be presented and the fact that the increase is from the company's own funds shall be explicitly stated upon filing the resolution to increase the capital stock for registration with the court.

(3)

(Amended - SG 84/2000) The new shares shall be allocated among shareholders, including the company when it possesses own stocks, on a pro rata basis. Any general meeting resolution in contravention of the latter provision shall be null and void.

(1)

Upon registering the increase of the capital stock pursuant to the preceding article, the supervisory board, or the board of directors as the case may be, shall, without delay, invite the shareholders to receive their shares.

(2)

New bearer shares which have not been claimed within one year of the date that the resolution to increase the capital stock was published in the State Gazette shall be sold on the stock exchange. The shareholders' rights shall lapse, and moneys from the sale shall be appropriated to the company's reserve fund.

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