Law Firm Gyeongsung, Counsel for the defendant-appellant

[Defendant-Appellee]

Law Firm Jeong-jin et al., Counsel for defendant

Attorney Song-chul, Justice Lee Jae-chul, Counsel for the plaintiff-appellant

2. The costs of lawsuit shall be borne by the Plaintiff.

In addition, the defendant's resolution of the shareholders' general meeting of this case is revoked the "case of amendment of the articles of incorporation" and "case of appointment of C director candidate for recommending shareholders who exercise the shareholders' right to proposal".

A. The Defendant is a juristic person established for the purpose of foreign exchange brokerage under the Foreign Exchange Transactions Act. The Plaintiff is a shareholder who holds 306,000 shares out of the total shares issued by the Defendant at the time of the instant general meeting of shareholders, and D is a representative director of the Defendant and a shareholder who holds 164,00 shares out of the total shares issued by the Defendant at the time of the instant general meeting of shareholders.

B. On February 2, 2016, the Plaintiff and D acquired the Defendant’s shares, and entered into an agreement with the new shareholder (hereinafter “major shareholder”). The main contents thereof are ① the Plaintiff and D’s major shareholder. ② In the event that an investment shareholder or a specially related person of the investment shareholder retire from the Defendant Company, the major shareholder may exercise the right to demand sale of all of the Defendant’s shares held by the investment shareholder at the ratio of 2:3 to D and the Plaintiff (hereinafter “stock purchase option”), and ③ the investment shareholder should sell shares subject to the stock purchase option at the ratio of 2:3 within two months from the date of receipt of the notice of exercising the stock purchase option.

C. On March 11, 2019, the Defendant’s board of directors made a resolution to include the same agenda as the following table of agenda items (hereinafter referred to as “list of agenda items”) in the subject matters of the instant general meeting of shareholders (hereinafter referred to as “the instant board of directors”) (the Defendant’s board of directors held on March 11, 2019, referred to as “the instant board of directors,” and “the resolution of the board of directors adopted on the same day” as “the resolution of the instant board of directors”).

D. On March 26, 2019, the Defendant held a general meeting of shareholders of the instant case and resolved to approve all the items on each agenda indicated in the instant bill’s list.

the title of this section.

제1호 정관 개정의 건가. 우리사주조합에 대한 신주 제3자 배정 근거 규정 신설의 건나. 이사선임과 관련한 집중투표제 채택을 위한 정관 개정의 건다. 이사 정원 변경의 건제2호 이사 선임의 건가. E 주주 추천 이사후보 이사 선임의 건나. 주주제안권 행사 주주 추천후보 C |사 선임의 건제3호 감사 해임 및 선임의 건가. 감사 G 해임의 건나. 감사 1 선임의 건제4호 2018년도 결산 보고의 건제5호 2018년도 재무제표 승인의 건제6호 이익 또는 이자의 배당에 관한 결의건제7호 임원보수한도의 건

[Reasons for Recognition] Unsatisfy, Gap evidence 1 through 6 (including branch numbers in case of additional number), Eul evidence 1, the purport of the whole pleadings

2. Determination on this safety defense

Of the instant lawsuit, with respect to the part on which the Plaintiff seeks confirmation of invalidity as to subparagraph 1-A of the Bill of this case among the resolution of the general meeting of shareholders of this case, the Defendant’s defense to the effect that the said resolution cannot be an unstable and dangerous for the Plaintiff’s rights or status, and that the claim for confirmation of invalidity cannot be the most effective and appropriate means to eliminate the risks of the Plaintiff’s rights, etc., is unlawful.

On the other hand, if new shares are allocated to a third party, the existing shareholders may suffer a decline in the value of the shares held by them, or the risk of loss of control over the company. Thus, whether a resolution related to the establishment of a new provision on the ground of allocation of new shares to an employee stock ownership association for which the plaintiff seeks confirmation is sought can be seen as having a direct impact on the rights and legal relations of the defendant and the plaintiff who maintains the status as a shareholder until now at the time of the resolution of the general meeting of shareholders in this case. Thus, the plaintiff should be deemed to have a benefit to seek confirmation of invalidity. On the other premise, the above safety defense cannot be accepted.

3. Determination as to the cause of action

A. The plaintiff's assertion

(i) Chapter 1;

With respect to subparagraph 1-A of the Bill of this case (establishment of the provision on the ground of allocation to a third party to an employee stock ownership association), the contents of the resolution are invalid in violation of Article 418(1) and (2) of the Commercial Act. In other words, the articles of incorporation for the allocation to a third party to new shares must be specific, and it does not meet such requirements despite the reasonable recognition of the case necessary for the achievement of business objectives of the company. In addition, the above resolution was made for the purpose of avoiding the Plaintiff’s right of management by re-concluding the contents of the agreement entered into between the Plaintiff and the investment shareholders.

(ii) Chapter 2;

With respect to subparagraph 1-A (establishment of a provision on the basis of allocation of new shares to an employee stock ownership association) and subparagraph 1-b (Article 363-2 of the Commercial Act (Article 363-2 of the Commercial Act for adoption of a concentrated voting system related to the appointment of directors), the shareholders' proposal should be proposed to directors at least six weeks prior to the date of the general meeting of shareholders under Article 363-2 of the Commercial Act, but without such procedures, the board of directors of the instant case voluntarily included each of the above items in the resolution by the board of directors of the instant case, and is unlawful. As such, there exists grounds for revocation of the resolution of the general meeting of shareholders of the instant case based on the defective resolution of the board of directors of the instant case.

(iii) Chapter 3;

As to subparagraph 1-c (Change in the number of directors) and subparagraph 2-b (b) of the table of the bill of this case, it is unlawful for the board of directors of this case, even though it did not meet the requirements of Article 363-2 of the Commercial Act, to have passed a resolution including each of the above items on the resolution, even though it did not meet the requirements of Article 363-2 of the Commercial Act, since it was not entirely included in the proposal document (Evidence 6) of the original shareholder proposal right as to the proposal document (election of C director to recommend shareholders who exercise the shareholder proposal right). The resolution of this case based on the resolution of

(iv) Chapter Four.

At the time of the resolution of the board of directors, the representative director D and I proposed a non-Confidence resolution of the chairman in order to exclude the directors E who were the chairman of the board of directors from the agenda resolution, and to proceed with the board of directors on a biased basis, and decided by a majority, thereby allowing the representative director D to act as the chairman of the board of directors. The resolution of the board of directors in this case concerning subparagraphs 1 and 2-B of the table of the bill of this case is defective due to the foregoing replacement of the chairman of the board of directors, and there is a reason for revocation of the resolution of the general meeting of shareholders of this case, which was made based on this.

B. Determination

1) As to Chapter 1

Article 418(1) and (2) of the Commercial Act provides that where a company issues new shares, it, in principle, allows a third party to allocate new shares to the existing shareholders only in cases where the articles of incorporation provide for the allocation of new shares, and protect the preemptive rights of the existing shareholders by limiting the grounds therefor to necessary cases to achieve managerial objectives, such as the introduction of new technologies and the improvement of financial structure (see Supreme Court Decision 2015Da202919, Dec. 10, 2015).

According to the statements stated in the evidence Nos. 8 and 9, the general meeting of shareholders of this case adopted a resolution as to subparagraph 1-A (establishment of a provision on the basis of allocation of new shares to an employee stock ownership association) of the bill of this case. The specific contents are acknowledged as adding "3. Where new shares are issued to an employee stock ownership association," where new shares can be allocated by a resolution of the board of directors to a person other than shareholders under Article 9(2) of the Defendant’s articles of association. The amendment of the above articles of association is in violation of Article 418(1) and (2) of the Commercial Act.

The purpose of the employee stock ownership program is to promote the improvement of workers’ economic and social status and the promotion of labor-management cooperation by having workers acquire and hold the shares of a stock company established by the pertinent employee stock ownership association through the employee stock ownership association (Article 32 of the Framework Act on Labor Welfare). As such, the amendment of the articles of association, which newly established the basic provisions for allowing the issuance of new shares to our private association, is to contribute to the smooth corporate management through the improvement of workers’ desire to work and productivity and the relaxation of labor-management dialogue. Therefore, it is reasonable to view that “where new shares are issued to the employee stock ownership association,” the case where the employee stock ownership association issues new shares to a third party in order to achieve the business purpose falls under the case where the allocation of new shares is necessary. As so argued by the Plaintiff, it is difficult to view the contents of the amendment of the above articles of association as unlawful. Therefore, the Plaintiff’s aforementioned assertion is without merit.

2) As to the second proposal

According to the statement Nos. 5 and 6 evidence, witness testimony and the whole purport of oral argument, five shareholders including J et al., based on Article 363-2 of the Commercial Act, by exercising shareholder proposal rights on February 1, 2019, six weeks prior to the general meeting of shareholders, based on Article 363-2 of the Commercial Act, requested that the agenda items of the shareholders' meeting of this case be included in the agenda items of the shareholders' meeting of this case (establishment of the third party provision on allocation of new shares to the employee stock ownership association), and (b) (amended of the articles of incorporation for adoption of intensive voting system). The defendant's three (representative D, E, and I), at the time of the resolution of the board of directors of this case, were convened by the board of directors of this case, and since the contents of the shareholders' proposal do not meet the requirements for exercising shareholder proposal of this case, it is difficult to legally include the above agenda items in the shareholders' meeting of this case as the board of directors' resolution of this case with the consent of each of the above shareholders' general meeting of this case.

3) As to the third proposal

According to the statement No. 5, witness I's testimony, and the whole purport of the argument of the defendant's directors at the time of the resolution of the board of directors of this case, all three directors (representative director D, director E, director I) present at the meeting of this case, and the board of directors of this case held with the consent of the representative director D, director 1, and 2-B of this case. The board of directors of this case held that the board of directors of this case decided to include each of the above items in the subject matter of the general meeting of this case (the appointment of director C) in the subject matter of the general meeting of this case with the consent of the representative director D and director 1. According to the above facts of recognition, it is reasonable to view that the resolution of the board of directors of this case which included each of the above items in the subject matter of the general meeting of this case was legitimate with the consent of the directors exceeding the majority of the members of the board of directors of this case. Even if each of the above items was not included in the subject matter of the general meeting of this case, since the above items are legally included in the subject matter of the general meeting of this case.

4) As to Chapter 4

According to the statement No. 5, witness testimony and the purport of the whole pleadings of the board of directors, three directors of the defendant (representative director D, director E, director I) present at the time of the resolution of the board of directors of this case, and the board of directors of this case expressed the opinion that "whether the contents of the shareholder proposal of this case can be included in the agenda of the board of directors" as the agenda of the board of directors. Accordingly, one of the shareholders proposal holders shall attend the board of directors of this case and verify the time of receipt of documents for exercising the shareholder proposal right, time of preparation, and summary of the proposal. The J decided that all of the shareholders proposal and the date of preparation and receipt of documents for the shareholder proposal of this case shall be the same as that of the board of directors' meeting, and that the chairperson of the board of directors of this case shall not be deemed to have been the same as that of the chairperson's proposal of this case, and that the chairperson of the board of directors of this case who was the chairperson of the board of directors shall not be deemed to have been entitled to the resolution of the board of directors's resolution of this case.

4. Conclusion

Therefore, each of the claims of the plaintiff in this case is dismissed as it is without merit, and it is so decided as per Disposition.

Judge semi-American

Judges 000