Page 121 - Albanian law on entrepreuners and companies - text with with commentary

incentives including a share in the company’s profit and share options) must be approved by
decision of the General Meeting (see also for JSCs The Albanian Corporate Governance
Code Principle 5). As LLCs do usually not have any board structures, the General Meeting
sets both the remuneration standards and the individual benefits. Articles 81 (1) b), c) and 97
(1) to (4) provide that the General Meeting establishes the remuneration of Managing
Directors. The individual benefits must properly reflect the duties of the Managing Directors
with respect to this scheme and to the financial situation of the company, Article 97 (2). In
case the company’s financial standing is seriously deteriorating, the benefits granted may be
adequately reduced if so determined by the General Meeting, Article 97 (3). The scheme for
benefits, the individual benefits attributed to each Managing Director as well as the annual
impact of the incentive scheme on the company’s cost structure shall be disclosed together
with the annual financial statement, Article 97 (4).

Article 98
Fiduciary Duties and Liability
(1) In addition to the general and fiduciary duties expressed by Articles 14 to 18,
Managing Directors must
a) perform their duties established by law or Statute in good faith in the best
interests of the company as a whole which includes the environmental sustainability of
its operations;
b) exercise powers granted to them by law or Statute only for the purposes
established therein;
c) give adequate consideration to matters to be decided;
ç) avoid actual and potential conflicts between personal interests and those of the
company;
d) ensure that approval is given where contracts described in paragraph 3 of
Article 13 are concluded.
dh) exercise reasonable care and skill in the performance of his functions.
(2) A Managing Director may be held liable for any action or failure to act unless
the action or omission was made in good faith, based upon reasonable inquiry and
information, and rationally related to the purposes of the company.
(3) In case of violation of duties and the standard of diligence referred to in
paragraphs 1 and 2, a Managing Director has to compensate the company for any
damage which occurred due to the violation. He shall also disgorge any personal profits
made in violation of his duties to the company. He has the burden of proving compliance
with the duties and standards. In case the violation has been committed by more than
one Managing Director, all directors in question are jointly and severally liable.
(4) In particular, Managing Directors are obliged to compensate the company in
damages, if they are carrying out the following transactions contrary to this Law:
a) returning contributions to members;

120