ARMENIA Law and Practice Contributed by: Hayk Hovhannisyan and Tachat Voskanyan, HAP
• board members; • executive body members;
• are a party to the transaction or act in their relations with the company from the interests of third parties; • own 20% or more of the shares (stake, stock) of a legal entity that is a party to the transac - tion or acts from the interests of third parties in relations with the company; • hold positions in the management bodies of a legal entity that is a party to the transac - tion or acts from the interests of third parties involved with the company; and • in other cases, provided for by the company’s charter. Hostile tender offers are rare in Armenia because the stock market is still developing, and most large corporate transactions happen through mutual negotiations. However, such offers are still possible. Armenian legislation does not differentiate between friendly and hostile offers, and there As mentioned earlier, the company director must act in the company’s best interests, in good faith, and reasonably, avoiding conflicts between per - sonal and company interests. Armenian legislation provides some protection for directors. According to the Law “On Banks and Banking Activity,” if a bank’s executive direc - tor is dismissed early and their remaining term is more than one year, the bank must compensate their one-year salary. 9. Defensive Measures 9.1 Hostile Tender Offers are no special rules for either type. 9.2 Directors’ Use of Defensive Measures
• legal entities acting as the executive body or their directors, board members, or other man - agers specified by the charter or contract; • audit committee members (auditors); • other persons authorised to represent the company; and • persons recognised as affiliated under the Law on Securities Market of RA. Affiliated persons of the company must provide the information required by law to the company’s executive body or another body defined by the charter. Any transaction involving an interest with an affil - iated person must be included in the company’s annual report, with detailed information about: • the parties to the transaction; • the terms and conditions; • nature and extent of the interest; and • an independent evaluator’s opinion confirm - ing that the transaction meets market value. According to the Law on Limited Liability Com - panies, transactions cannot be concluded with - out the consent of the general meeting if: • a board member, executive body member, or company participant has an interest in the transaction; or • that participant holds 20% or more of the total voting rights in the company. The company recognises the mentioned per - sons as interested in concluding a transaction in cases where they or their spouses, parents, children, brothers, or sisters (hereinafter referred to as affiliated persons):
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