CROATIA Law and Practice Contributed by: Iva Basarić, Marija Gregorić and Matija Skender, Babic & Partners
cally allowed under the definitive agreement. Non-solicitation provisions are also somewhat frequently used, as are provisions on material adverse changes. Deal security measures are far less scarce in transactions where the Croatian Takeover Act applies, as conditions in these deals are regu - lated under the law. In terms of managing pandemic risks, there have been some changes/updates to the frequently used material adverse change clauses and relat - ed provisions, but the length of interim periods has largely not been affected by the pandemic. 6.8 Additional Governance Rights If the bidder is not acquiring 100% ownership of the target, the bidder will usually aim to have a shareholders’ agreement in place, regulat - ing specific corporate governance issues that are not expressly dealt with under the Croatian Companies Act (or that may be regulated differ - ently from the default statutory rule). Such provi - sions typically include: • the right of the bidder to appoint a particular number of management board members (ie, directors) or supervisory board members (if the target company has a supervisory board in place); • tag-along and drag-along provisions; • pre-emptive rights provisions; • provisions on reserved matters; and • the allocation of profit in ratios other than the share ratio, etc. Certain types of shareholders’ agreements made between shareholders of publicly traded joint stock companies which hold a 20% or larger share of the company must be reported to the respective company, and the publicly traded
joint stock company is required to notify the court registry of the fact that such shareholders’ agreement has been made, but the sharehold - ers’ agreement is not required to be deposited
with the court registry. 6.9 Voting by Proxy
Shareholders are allowed to vote by proxy in Croatia. In joint stock companies (ie, corpora - tions), the powers of attorney granted to the proxies must be made in writing, but additional formalities (such as notarisation requirements) may be imposed under the company’s Articles of Association. On the other hand, certain decisions in Croa - tian limited liability companies may be voted on/ made only on the basis of the notarised written power of attorney (although again, even where the law does not specifically require the power of attorney to be notarised, such a requirement may be imposed under the Articles of Associa - tion). 6.10 Squeeze-Out Mechanisms In Croatia, squeeze-outs are possible only in joint stock companies (which may be private or public). In private joint stock companies, a shareholder holding at least a 95% share in the company may request the shareholders’ meeting to squeeze out the remaining minority shareholders, subject to the payment of adequate compensation. Rel - evant shareholders’ resolutions cannot be chal - lenged on the grounds that the compensation is not adequate, but the minority shareholder may request judicial review and request the compe - tent court to determine the adequate amount. In addition, under the Croatian Takeover Act, an offeror and persons acting in concert with the
532 CHAMBERS.COM
Powered by FlippingBook