Section VIII Conversion of Debentures into Shares

(1)

The general meeting may resolve on the issuing of convertible debentures. This type of debentures may not be issued by companies in which the State owns more than 50 per cent of the capital stock. The shareholders may subscribe preferentially such debentures under the terms which apply to a subscription for a new issue of shares.

(2)

The procedure for the conversion of debentures into shares shall be specified in the general meeting resolution on the issuing.

(3)

The general meeting of shareholders may lay down the terms under which holders of debentures which are not redeemable by conversion into shares may so convert them.

(4)

The issue price of the converted debentures may not be lower than the nominal value of the shares which the debenture-holders would acquire by conversion.

(5)

In case of reduction of the capital stock because of losses through a reduction of the number of shares or of the nominal value thereof, the rights of debenture-holders shall be reduced proportionally.

A resolution to issue new debentures convertible into shares shall be valid subject to approval by the general meeting of debenture-holders which have acquired the right to convert debentures into shares.

Upon adoption of a resolution to increase the capital stock, the managing board, or the board of directors as the case may be, shall determine the period within which debentures may be converted into shares. This period may not exceed three months.

The managing board, or the board of directors as the case may be, shall register any changes in the capital stock occurring as a result of conversion of debentures into shares.

---

Next: Section IX Joint Stock Company Organs
Up: JOINT STOCK COMPANY
Previous: Section VII Debentures