Plaintiff

Sicacom Co., Ltd. (Law Firm Sejong, Attorneys Kim-soo et al., Counsel for the plaintiff-appellant)

April 15, 2010

1. The defendant shall receive KRW 9,000,000 from the plaintiff at the same time, and at the same time deliver to the plaintiff share certificates representing 15,00 won of the ordinary share shares issued by the defendant at a common share of KRW 500.

2. The costs of the lawsuit are assessed against the defendant.

3. Paragraph 1 can be provisionally executed.

The same shall apply to the order.

1. Basic facts

A. On February 28, 2002, the Plaintiff entered into a stock option agreement (hereinafter “the Stockholm option agreement”) with the Defendant with the following terms, subject to the Defendant’s resolution at the Defendant’s general meeting of shareholders.

1) The contents of the Stockholm options that the Defendant (hereinafter referred to as “A” in this sentence) grants to the Plaintiff (hereinafter referred to as “B”) are as follows:

-stocks to be delivered: registered ordinary shares (amounted to 500 Won) 15,000 shares

-The price and duration of events: 600 won per share, March 1, 2005 to February 28, 2012

2) Article 7 (Revocation of Assignment of Stockholm) A may cancel the granting of Stockholm options by a resolution of the board of directors, as stipulated in the relevant laws and the articles of incorporation, in the following cases:

(1) A person B retires or retires at his/her own will within three years from the date of grant of Stockholm options: Provided, That where B retires or retires at the retirement age or the expiration of the term of office, or retires due to promotion of an executive, or transfers or retires to an affiliate as required by A, etc., it shall not be deemed that he/she retires or retires at his/her own will.

B. On March 25, 2003, the Plaintiff retired from the Defendant Company and retired from office to the Net System Co., Ltd. (hereinafter “net System”). On the other hand, the Plaintiff submitted a written pledge stating the reason for retirement as “sparing the company’s business restructuring.” Meanwhile, the Plaintiff submitted a written pledge stating that “I would retire from office according to their own free will and would not raise any objection against the retirement at a time after retirement.”

C. After September 2008, the Plaintiff submitted to the Defendant a written request that the instant Stockholm options be exercised.

[Reasons for Recognition] Unsatisfy, each entry of Gap1 through 5 (including virtual numbers), and the purport of the whole pleadings

2. The allegations and judgment of the parties

A. The parties' assertion

1) The Plaintiff: The Plaintiff retired from office as an affiliate in accordance with the restructuring policy of the Defendant Company; and the term of office requirement under the Commercial Act is a voluntary provision, and the Defendant must pay the Plaintiff stocks in accordance with the Stockholm options contract.

2) The Defendant: (a) the Plaintiff voluntarily retired from employment at his own option; and (b) the period of service under the Commercial Act is a mandatory provision, and thus, the Plaintiff is not entitled to exercise the stock option. In addition, the Plaintiff constitutes grounds for revocation under the Stockholm option agreement, and the Defendant revoked the granting of Stockholm options to the Plaintiff

B. Whether it violates the terms of service under the Commercial Act

1) The stock option system is intended to give officers and employees reasonable compensation when it gives them a motive to contribute to improving business performance and technological innovation, etc. by giving them the right to purchase shares of the company on favorable terms to its executives and employees. In the Commercial Act or the Securities and Exchange Act (amended by Act No. 8635, Aug. 3, 2007; hereinafter the same shall apply), the requirement for exercising the stock option provides that they shall hold office or hold office for not less than two years from the date of granting the stock option. This is basically considered that the stock option is granted in return for the outcome to those who have worked for a certain period of time. In this regard, the above provision serves as an important means to harmonize the interests of the company with those of the officers and employees granted the stock option and to prevent their abuse.

However, the provision on the minimum holding requirement as above is a disadvantageous provision to the officers and employees who have been granted the stock option, and thus, it is necessary to allow the officers and employees who have been granted the stock option to exercise the stock option regardless of the minimum holding requirement if they voluntarily retire or retire due to the reasons not attributable to them. In other words, regardless of the form of retirement or retirement, a stock option holder may exercise the stock option in cases where he/she retires or retires due to the necessity or coercion of the company (hereinafter referred to as “non-voluntary retirement or retirement”) even though he/she does not voluntarily retire or retire due to his/her own judgment or necessity, regardless of the form of retirement or retirement.

2) Therefore, comprehensively considering whether the Plaintiff voluntarily retired or voluntarily retired in this case, the aforementioned evidence and the statements in Gap6 through 8, Eul evidence 4, Eul 8 through 23 (including paper numbers), the Defendant Company was unable to establish a separate company to transfer part of its business contents and set up a plan to transfer its employees to a new company. The Plaintiff was in the position to exercise overall control over the relevant business affairs, and the Plaintiff was in the position to establish a floatingnet system in accordance with these policies, set up a floatingnet system in order to change its employment while acquiring the shares in the floatingnet system, and the Defendant was also holding 19% shares in the floatingnet system. As seen earlier, the Plaintiff submitted the reason for retirement to the retirement center as “sub-surging company”. In full view of these various circumstances, it is reasonable to view that the Plaintiff was not voluntarily retired due to personal circumstances, but was divided into a company in accordance with the Defendant’s business restructuring policy.

In light of the above facts, the defendant presented a written oath to retire free will, and actually led the division plan, and there was no objection to the cancellation of the Stockholm at the time of retirement. However, according to the evidence, it is insufficient to recognize the facts prior to the plaintiff's voluntary retirement according to the company's needs, in full view of the following circumstances: (a) the plaintiff stated the reason for retirement as a "division" at the time of retirement; (b) on the other hand, the above written pledge was signed only in the documents printed in the same letter; (c) even though the plaintiff actually led the division plan, it was merely a practical work in accordance with the company's management's policy, and (d) there was no evidence to support that the defendant explicitly notified the plaintiff of the cancellation of the Stockholm option; and (b) there was no evidence to support the fact that the plaintiff voluntarily retired from the office.

3) Ultimately, the requirements for the period of office under the above Commercial Act are not applicable to this case where the Plaintiff is deemed to voluntarily retire. Around September 2008, the Plaintiff expressed its intent to exercise stock options to the Defendant, which is within the period of exercise stipulated in the Stockholm option contract of this case, and thus, a pre-determined share purchase contract was concluded between the Plaintiff and the Defendant under the above Stockholm option contract. Therefore, barring any special circumstance, the Defendant is obliged to deliver share certificates representing 15,00 won shares of the common par value of the Defendant issued to the Plaintiff at the same time as the Plaintiff received payment of KRW 9,00,000 (15,000 shares x 600 won) from the Plaintiff pursuant to the above Stockholm option contract.

C. Whether the defendant revoked by a resolution of the board of directors

1) The Plaintiff and the Defendant agreed in the Stockholm option agreement of this case that “the Plaintiff’s retirement from office within three years from the date of granting Stockholm options at his own will,” and that “the Plaintiff’s retirement from office as an affiliate due to the necessity of the Defendant, etc. shall not be deemed to have retired from office as his own will.” However, as seen earlier, the Plaintiff’s business restructuring is the Defendant’s policy, namely, the Defendant’s business restructuring, and the relevant net system was transferred as it was carried out by the Defendant, and the Defendant owned its shares. In full view of these circumstances, the Plaintiff’s departure from office is deemed to fall under the exception provision of the grounds for revocation of the above agreement.

2) If so, the Defendant’s ground for revocation of the Stockholm option under the premise that there was a ground for revocation stipulated in the Stockholm option agreement of this case is without merit.

3. Conclusion

The plaintiff's claim of this case is accepted.

Judges Park Jong-chul

(1) Article 340-4 (Exercise of Stock Options) (1) of the ○ Commercial Act may exercise the stock option under Article 340-2 (1) to be held or held for not less than two years from the date of resolution of the general meeting of shareholders as to the matters falling under each subparagraph of Article 340-3 (2).

(2) Article 36-9 (Contract, etc. for Granting Stock Options) (2) Where any officer or employee who has been granted stock options dies, retires from office due to retirement age, retires from office due to retirement, or other reasons not attributable to the principal, or retires or retires from office, the stock options shall be granted during the period of such exercise.