Articles of Association

Articles of Association of Estonian Broadband Development Foundation

 The articles of association of the foundation Estonian Broadband Development Foundation have been approved on 11 August 2009 with the foundation resolution
 
 

1. General provisions
2. Objective of the Foundation
3. Management
4. Assets
5. Economic activities and reporting
6. Auditor
7. Amendment of the articles of association
8. Liquidation, merger and division


1. General provisions
1.1. The name of the foundation is Eesti Lairiba Arenduse Sihtasutus. The name of the Foundation in English is the Estonian Broadband Development Foundation.
1.2. The seat of the Foundation is Tallinn, Republic of Estonia.
1.3. The Foundation has been founded for an unspecified term.
1.4. In its activities the Foundation shall follow the acts and other legislation of the Republic of Estonia, principles of the European Union and the articles of association. 

2. Objective of the Foundation
2.1. The objectives of the Foundation are:
2.1.1. establishment and development of broadband network, including organisation of projecting, planning, design and building of broadband network;
2.1.2. organisation of operation of the broadband network and its sustainable management and administration;
2.1.3. obtaining the funds required for meeting the above-mentioned objectives, including, but not limited to, from the Founders, profits of the Foundation’s economic activities, different support funds and aid schemes.
2.2. In meeting the above-mentioned objectives the Foundation shall rely, inter alia, on the following principles:
2.2.1. the structure of the broadband network must ensure a uniform and integrated operation of electronic communications infrastructure;
2.2.2. all telecommunications operators must have equal opportunities to access the network and to connect and link to the existing networks;
2.2.3. protection of the investments made by the telecommunications operators must be ensured and the parties shall respect competition rules.

3. Management
3.1. The bodies of the Foundation shall be the Supervisory Board and Management Board.
3.2. The Supervisory Board shall be responsible for planning and organising the Foundation’s activities and monitoring activities of the Management Board as set out in legislation. In its activities the Supervisory Board shall follow the general principles approved by the Founders with the foundation resolution, written contract for members of the Supervisory Board concluded with them, articles of association, rules of procedure established with the resolution of the Supervisory Board and applicable legislation.
3.2.1. The competences of the Supervisory Board shall include the following issues:
1) establishment of principles of action, including investment principles;
2) establishment of rules of procedures;
3) approval of the Foundation’s annual budget;
4) approval of the annual report;
5) election of the chairperson of the Supervisory Board;
6) appointment and removal from office of a member of the Management Board;
7) giving orders to members of the Management Board;
8) appointment and removal from office of auditor(s) and establishment of the number and terms of remuneration of auditor(s);
9) ensuring provision of internal audit;
10) deciding on giving consent to the Management Board for making transactions which are beyond the scope of everyday activities set out in the articles of association;
11) deciding on the conclusion, terms and conditions of the transactions with members of the Management Board, deciding on the conduct of legal disputes, and appointing the representative in such transactions or disputes.
3.2.2. The Supervisory Board has up to seventeen (17) members, who shall be appointed and removed from office under the following principles: from the Founders’ part, AS Levira, Televõrgu AS, AS Eltel Networks and AS Ericsson Eesti are entitled to appoint one (1) member of the Supervisory Board and AS Tele2 Eesti, AS Elisa Eesti, Elion Ettevõtted AS and AS EMT are entitled to appoint three (3) members of the Supervisory Board. In addition to this, the Minister of Economic Affairs and Communications as Ministry’s representative is entitled to appoint one (1) member of the Supervisory Board.
3.2.3. The powers of the member of the Supervisory Board remain valid for two (2) years. A person who has given their consent for doing so can be elected as a member of the Supervisory Board.
3.2.4. Member of the Supervisory Board can be remunerated for performing their duties as set out in legislation. Members of the Supervisory Board shall enter into written contracts for members of the Supervisory Board / confidentiality contracts, terms and conditions of which must be approved by the Founders. The confidentiality contracts shall establish for members of the Supervisory Board, inter alia, an obligation to safeguard confidential information concerning the Foundation as well as conditions for ensuring the confidentiality of procurements.
3.2.5. Each Founder shall have the powers to change the membership of the Supervisory Board, including extending the powers of a member of the Supervisory Board, removing them from office and electing a new member. A member of the Supervisory Board can be removed from office any time regardless of the grounds. Person appointing a member of the Supervisory Board shall be obliged to inform immediately the Foundation’s Management Board and the chairperson of the Supervisory Board about adoption of the relevant decision by submitting a copy of it and the consent of a new member of the Supervisory Board about their election.
3.2.6. Each Founder is entitled to waive the right of appointing a member of the Supervisory Board provided by the articles of association; each Founder may waive such right permanently or temporarily for the period stipulated by them. The Founders, who have the right of appointing several members of the Supervisory Board, may waive this right concerning all members of the Supervisory Board to be appointed by them or only part thereof. The other Founders must be informed about such waiver of rights with a written statement, which must, inter alia, include the date starting from which the Founders shall not exercise this right and to whom this right shall be delegated. The Founder also has to suggest whether such waiver is of a permanent or temporary nature. In the latter event, the Founder has to indicate a certain period of time as of which they deem to have waived this right. Additionally, the Founder, who has the right to appoint several member of the Supervisory Board, has to indicate the number of members of the Supervisory Board subject to waiver. The Founder is obliged to abide by the conditions included in the statement.
3.2.7. Members of the Supervisory Board shall elect a chairperson amongst them, who shall organise the activities of the Supervisory Board and chair meetings thereof, and a vice chairperson, who shall substitute the chairperson while they are absent. The chairperson and vice chairperson of the Supervisory Board shall be deemed elected, if all member of the Supervisory Board are present at the meeting and at least 2/3 of the votes are in favour of a candidate. The chairperson and vice chairperson of the Supervisory Board shall be elected for one (1) year.
3.2.8. Meetings of the Supervisory Board shall be held when necessary, but at least once every four months. Meetings of the Supervisory Board shall be convened by the chairperson, if they are absent, by the vice chairperson and if they are absent, by the member of the Supervisory Board substituting them. Meetings of the Supervisory Board shall be convened at the request of a member, the Management Board or auditor. If a meeting is not convened within two (2) weeks after the receipt of request, member of the Supervisory Board, the Management Board or auditor is entitled to convene the meeting themselves. Notice about the meeting shall be sent to the members of the Supervisory Board, who are on the members’ list, in a format which can be reproduced in writing at least ten days (10) prior the meeting. The notice shall indicate the time and place and the agenda of the meeting. These conditions shall be established by the person convening the meeting of the Supervisory Board.
3.2.9. The meeting of the Supervisory Board has a quorum if more than one-half of the members of the Supervisory Board are present, including the chairperson or vice chairperson.
3.2.10. Each member of the Supervisory Board shall be entitled to request to include additional items to the agenda of the meeting. An item not present in the notice of the relevant meeting can be included in the agenda at the consent of at least 2/3 of the members of the Supervisory Board present. Each member of the Supervisory Board shall have one (1) vote. A member of the Supervisory Board shall not have the right to refuse from voting or to be abstained, except in cases set out in legislation. A resolution of the Supervisory Board shall be passed if more than one-half of the members who participated in the meeting voted for it. In the election of a person, the candidate who receives the most votes shall be deemed elected. Upon an equal division of votes, the chairperson of the Supervisory Board shall have the deciding vote. Minutes shall be taken of the meetings of the Supervisory Body and the chairperson and the recording secretary of the meeting shall sign the minutes. If the chairperson is absent, the vice chairperson has the deciding vote and right to sign the minutes and if they are absent, then the member of the Supervisory Board substituting them. Members of the Supervisory Board represented at the meeting but not in person have the right to vote, if they submit their vote in a format which can be reproduced in writing.
3.2.11. The Supervisory Board can have a meeting and pass resolutions without convening physically. The procedure for such meetings and for passing resolutions shall be established by the Supervisory Board.
3.2.12. The Supervisory Board shall be entitled to examine the Foundation’s documents and audit the accuracy of accounting and existence of assets as well as to monitor compliance of the Foundation’s activities with legislation and the articles of association. The Supervisory Board shall be entitled to obtain information from the Management Board about the Foundation's activities and request from it the management report and balance sheet.
3.2.13. The Supervisory Board shall approve the Management Board’s transactions beyond the scope of everyday economic activities, in particular transactions, which involve acquisition and extinguishment of holding in an enterprise, or transfer of immovable and registered movables or their encumbrance with rights in rem. Limitations to the right of representation shall not apply to third parties. Transactions that are made with the Foundation’s assets for meeting its objectives, following thereby the provisions of the articles of association and principles established by the Supervisory Board, are not deemed as being beyond the scope of everyday economic activities.
3.2.14. Members of the Supervisory Board shall be responsible for violations of requirements set out in the contract for members of the Supervisory Board, principles of action established by the Founders, internal rules established by the Supervisory Board and articles of association as well as other legal instruments and documents, and also for the damage wrongfully caused to the Foundation resulting from non-performance or unsatisfactory performance of obligations provided in the above-mentioned documents. Members of the Supervisory Board causing the damage shall bear equal liability for compensating such damage.
3.2.15. The creditor of the Foundation shall also be entitled to request compensation for the Foundation for the damage mentioned in the previous clause, if they cannot satisfy their claims out of the Foundation’s assets.
3.2.16. A member of the Supervisory Board shall be released from liability, if upon passing an illegal resolution or a resolution damaging the Foundation they have maintained a dissenting opinion and such opinion has been recorded in the minutes.
3.2.17. Member of the Supervisory Board shall not vote on the decision on the approval of a transaction between them and the Foundation or between the Founder appointing them and the Foundation, also on the approval of a transaction between a third party and the Foundation, if the interests of the member or the Founder appointing them resulting from this transaction contradict or may contradict the interests of the Foundation. This rule shall also apply to the approval of transactions related to carrying out procurements for purchasing goods and services by the Foundation.
3.3. The Foundation shall be managed and represented by the Management Board.
3.3.1. The Management Board shall consist of one (1) member appointed with the founding resolution by the Founders upon founding the Foundation for three (3) years. After founding the Foundation, appointment or removal of the member of the Management Board from office shall be decided by the Supervisory Board. Electing a member of the Management Board requires their consent.
3.3.2. Rules of procedure and other terms of the Management Board (incl. remuneration) shall be stipulated in the contract concluded with the member of the Management Board. In addition to this, the Management Board shall follow legal orders of the Supervisory Board, the articles of association, internal rules (incl. rules established by the Management and Supervisory Board) and applicable legislation. Transactions beyond the scope of everyday economic activities may be concluded by the Management Board only with the consent of the Supervisory Board.
3.3.3. The Supervisory Board shall remove a member of the Management Board from office upon occurrence of a good reason, which is mainly a non-performance of obligations to a significant extent or inability to manage the Foundation. Rights and obligations arising from the contract concluded with the member of the Management Board shall be terminated as set out in the contract.
3.3.4. In order to perform its duties, the Management Board shall:
1) manage the Foundation’s everyday activities, including organising procurements necessary for purchasing goods and services in order to meet the objectives of the articles of association;
2) ensure implementation of the resolutions of the Supervisory Board and bear responsibility for performing them;
3) organise the Foundation’s accounting, including being responsible for the preparation of the annual report and auditing by the auditors thereof, and submitting the approved annual report to the register on time;
4) submit the annual report and action plan to the Supervisory Board for approval and make proposals to the Supervisory Board for amending the budget;
5) act on behalf of the Foundation and represent it, considering thereby also the principles established by the Supervisory Board and following resolutions adopted by it;
6) within its powers dispose of the Foundation’s assets, conclude contracts on behalf of the Foundation and open accounts in credit institutions;
7) conclude and terminate contracts with employees;
8) grant authorisations for representing the Foundation;
9) give the Supervisory Board at least once in four months an overview of the Foundation’s economic activities and financial status, also inform the Supervisory Board immediately, if the financial status of the Foundation deteriorates significantly, and inform about other relevant issues related to Foundation’s economic activities;
10) perform other duties arising from legislation, the articles of association and other documents applicable to the Management Board.
3.3.5. A transaction between the Foundation and the member of the Management Board requires approval of the Supervisory Board. Transactions between the Foundation and the member of the Management Board without such approval are void.

4. Assets
4.1. The owner of the assets is the Foundation.
4.2. The assets of the Foundation shall be used for meeting objectives set out in the articles of association.
4.3. The assets of the Foundation shall be possessed, used and disposed of by the Management Board in accordance with legislation and the articles of association considering thereby resolutions of the Supervisory Board and principles established by the Supervisory and Management Board.
4.4. Financial resources given to the Foundation shall be transferred to the Foundation’s bank account. Other assets transferred to the Foundation shall be transferred to the Foundation’s Management Board under the relevant contracts and instruments of delivery and receipt, and if necessary, entries about transfer of ownership shall be made in the register.

5. Economic activities and reporting
5.1. The financial year of the Foundation shall commence on 1 January and terminate on 31 December.
5.2. After the end of the financial year the Management Board shall be responsible for preparing the annual report and submitting it to the auditors for auditing. Within four months after the end of the financial year at the latest the Management Board shall submit the annual report with the auditor’s report to the Supervisory Board for approval.
5.3. The Management Board shall submit the approved annual report to the non-profit associations and foundations register within six months after the end of the financial year.
5.4. The Management Board shall organise the Foundation’s accounting according to the Accounting Act.

6. Auditor
6.1. The Foundation has its own auditor(s), who shall be appointed and removed from office by the Supervisory Board. The term of the powers of the auditor(s) shall be three (3) years. The Supervisory Board shall submit the resolution on appointing auditor(s) and the consents of the appointed auditors to the Management Board immediately.
6.2. The number and terms of remuneration of the auditors shall be established by the Supervisory Board.
6.3. Appointing an auditor requires their consent for it.

7. Amendment of the articles of association
7.1. The articles of association can be amended only by the Founders jointly. The Supervisory Board shall be entitled to amend the articles of association only in the cases provided by legislation.
7.2. If the articles of association have to be amended due to changed circumstances but the Supervisory Board or the Founders shall not undertake it, amendment of the articles of association can be ruled by court.
7.3. The articles of association can be amended only for the purpose of taking new circumstances into consideration, following thereby the objective of the Foundation.
7.4. The amended articles of association shall take effect upon making the relevant entry in register.

8. Liquidation, merger and division
8.1. The merger and division of the Foundation shall be decided by the Supervisory Board as set out in applicable legislation.
8.2. Voluntary liquidation of the Foundation shall be decided by the Founders; in any other cases, the liquidation shall be carried out as set out in applicable legislation. The Foundation shall be liquidated upon dissolution unless otherwise provided for by legislation. The liquidator is a member of the Management Board of the Foundation.
8.3. The liquidator has rights and obligations as provided by law and liquidation shall be carried out as set out in legislation.
8.4. Assets remaining upon settlement of all claims of creditors shall be distributed amongst the Founders in proportion to the value of assets transferred by the Founders to the Foundation with the foundation resolution at the time of transfer.
8.5. The Foundation shall be entitled to merge with another foundation with the Founder’s resolution as an acquiring foundation or as a foundation being acquired provided that such possibility is foreseen in the articles of association of the foundation acquiring the Foundation or of the foundation that is being acquired.