207Gahap11563 Profit from the exercise of stock options

1. A;

2. The person taking charge of the actions in the deceased B (three persons);

3

4

5

6

7

[Judgment of the court below]

Attorney Park Sung-sung

F Bank Co., Ltd.

Attorney Lee Dong-ho, Counsel for the defendant-appellant

June 25, 2008

July 16, 2008

1. All of the plaintiffs' claims are dismissed.

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

Defendant KRW 151, 214, 292, Plaintiff B, C, D, E, F, and G respectively, 75, 607, 146 won

and 5% per annum for each of the above amounts from January 1, 2008 to the service date of a copy of the complaint in this case, c.

It shall pay 20% interest per annum from the date of full payment to the date of full payment.

1. Basic facts

A. Plaintiffs A, C, D, E, F, G, and net B (Death on May 16, 2008, and their wife – Plaintiff --- who is their children, Plaintiff - - - the Plaintiff’s children, - the Plaintiff’s children, and the Plaintiffs, who were appointed as the Defendant’s outside directors, have been reappointed for a term of one year at the Defendant’s ordinary general meeting of shareholders on March 2003.

B. On August 27, 2003, the Defendant entered into a new shares acquisition contract with G companies to perform both obligations until October 30 of the same year. At the time of entering into a new shares acquisition contract, the Defendant agreed to submit a certified copy of the Defendant’s resignation of each director to G companies on October 30, 2003, which is the date of performance of obligations.

C. On August 29, 2003, the board of directors of the defendant granted a total of 120,000 stock options to the plaintiffs, and passed a resolution to present them as a subject of a special general meeting of shareholders.

D. At the same time, the Plaintiffs submitted a resignation letter on September 8, 2003 and entered into an agreement with the Defendant with the following contents, and accordingly, the Plaintiffs were treated as having resigned on October 30 of the same year.

Article 1. The defendant and the plaintiffs (a written agreement is written by each plaintiff but is common to all the plaintiffs, so the plaintiffs are the same as the same. Hereinafter the same) confirm that the plaintiffs inevitably resign from their position as the defendant's director in a non-voluntary manner for the smooth conclusion of new shares acquisition contracts and the interests of the defendant.

Article 3 Matters concerning stock options

Based on the mutual understanding as stipulated in Article 1, the defendant and the plaintiffs confirm that the resignation of the plaintiffs is not due to their own causes, and therefore, they are entitled to exercise stock options and stock options to be held and resolved at the defendant's temporary general meeting scheduled to be held on September 16, 2003 (limited to limits, exercising prices, the amount of time of retirement during their terms of office, the amount of exerciseable quantity calculated in proportion to their business performance, etc.) granted notwithstanding their resignations.

E. On September 16, 2003, the Defendant made a resolution regarding granting the Plaintiff A a stock option of 30,000 shares, each of 15,00 shares to the rest of the Plaintiffs (hereinafter “stock option”) and appointment of new outside directors, etc. In accordance with the above stock option decision, the Plaintiffs and the Defendant entered into a stock option contract with the following contents (hereinafter “instant granting contract”).

Article 3 (Calculation of Amount to be Granted upon Retirement) Where a person retires or retires within two years from the date of granting stock options due to reasons prescribed in the proviso to Article 9-2 from the date of granting stock options, the amount of granted quantity under Article 2 shall be calculated on a monthly basis as of the period of service in 2003 (the period of less than a month shall be one month): Provided, That where the person holds office or is in office by the end of 2003, the amount of granted quantity shall not be adjusted.

Article 4 (Date of Grant) The date of grant shall be September 16, 2003.

Article 5 (Exercise Price) The exercise price of stock options (hereinafter referred to as "exercise price") shall be 5,000 won (5,000 won).

Article 7 (Period for Exercise) The period for exercise shall be within three years from the date on which three years elapsed from the date on which the resolution of the general meeting of shareholders for granting stock options was passed (from September 17, 2006 to September 16, 2009), and the stock options shall expire after the said period expires.

Article 8 (Method and Procedure for Exercise)

(1) The plaintiffs shall apply to the defendant in writing for the purchase of the quantity of exercise prescribed in Article 10 at the price at the event price prescribed in Article 5 within the period for exercise prescribed in Article 7.

(2) With respect to a request under paragraph (1), the defendant may select and implement the following methods, depending on the defendant's circumstances. In such cases, the request shall be performed within 20 days from the date of application

1. Issuance of new shares and delivery thereof; and

2. Delivery of treasury stocks; and

3. Difference between the price of an event and the market price (referring to the difference where the exercise price is lower than the market price);

(hereinafter referred to as "delivery") in cash or with its own shares;

Article 9 (Requirements for Exercise) The plaintiffs' exercise of stock options shall meet the minimum terms of office or service under Article 9-2 and shall be subject to the improvement of business performance indices, etc. under Article 9-3.

Article 9-2 (Minimum Office or Term of Office) The Plaintiffs shall hold office or hold office for at least two years from the date of granting the stock option: Provided, That this shall not apply where they die within two years from the date of granting the stock option, retire or retire due to retirement age, or retire or retire due to reasons not attributable to themselves, such as reasons falling under any subparagraph of Article 13 (2).

Article 13 (Grounds for Disqualification)

(1) When the plaintiffs who have been granted stock options fall under any of the following subparagraphs before exercising them, the defendant may cancel the granting of stock options by a resolution of the board of directors:

1. Where he/she arbitrarily retires or retires within two years after obtaining a stock option;

2. Where the stock options are transferred to other persons;

3. Where the stock options have been offered as security for a principal or others.

4. Where the stock options have been seized.

5. Where he/she uses undisclosed information or makes any unfair trade such as market manipulation by the defendant for the exercise of stock option;

6. Where he/she causes serious damage to the defendant intentionally or by negligence;

7. Where the defendant cannot participate in the exercise of stock options due to his bankruptcy, dissolution, etc.

8. Where he/she infringes on a shareholder's interest by unlawful or unfair conduct; 9. Where he/she receives recommendation for dismissal from the Financial Supervisory Commission or is dismissed at the request of reprimand by the Governor.

(2) Notwithstanding paragraph (1) 1, where a person retires or retires on any of the following grounds, he/she shall not be deemed voluntarily retired or resigned:

1. Change in positions and re-elections within a bank;

2. Resignation prior to the term of office due to the conditions of banks;

F. On March 31, 2004, after the retirement of the plaintiffs, the defendant notified the plaintiff A that he may exercise 8,200 shares each of 16,40 shares and 8,200 shares for the remaining plaintiffs, by determining the number of exerciseable shares according to the retirement and the business performance in 2003.

G. The Board of Audit and Inspection determined that the instant stock option granted to outside directors who are expected to retire was granted under the circumstances where it is evident that the working requirements cannot be met for more than two years from the date of resolution under Article 189-4(4) of the former Securities and Exchange Act (wholly amended by Act No. 6987, Oct. 4, 2003) and thus, it should be invalidated or revoked due to the violation of compulsory law.

12. On April 5, 2007, the Ministry of Finance and Economy requested a disposition of audit results with respect to the Ministry of Finance and Economy, and the Ministry of Finance and Economy ordered the defendant to take appropriate measures according to the request for disposition of audit results. Accordingly, on May 4, 2007, the defendant board of directors passed a resolution to revoke the granting of stock options to the plaintiffs and notified the plaintiffs. On the 9th of the same month, the Board of Audit and Inspection reported the results of measures taken above.

H. On December 10, 2007, the Plaintiffs sent to the Defendant a written application for exercising each stock option.

【Unsatched Facts, Gap evidence Nos. 1, 2, 3, 6, Gap evidence Nos. 4 and 5-1, 2, Eul evidence Nos. 1, 2, Eul evidence Nos. 3 and 6-1 through 7, Eul evidence Nos. 4, 7, 11, 12, and 13, respectively, and the purport of the whole pleadings

2. The parties' assertion

A. The plaintiffs' assertion 1) primarily asserted that the defendant's board of directors has a duty to revoke the stock option of this case, which had gone through a special resolution of the shareholders' meeting without any justifiable reason, even though there is no reason to revoke the resolution of the board of directors according to the request for disposition by the Board of Audit and Inspection which has no external binding force. Thus, since the defendant did not comply with the plaintiffs' request for exercise of stock option, the defendant is obligated to pay the difference between the exercise price and the market price to the plaintiff A, 151, 214, 292, 292, 75, 607, 146 won, 146 won, and delay damages in payment due to the difference between the exercise price and the market price, according to the plaintiffs' request, and the defendant is not obligated to pay the difference to the plaintiffs' respective exercise price and the market price.

B. Defendant’s assertion

The defendant asserts that the stock option contract of this case, which the board of directors of the defendant, grants the stock option to the plaintiffs claiming the invalidity of the resolution to cancel the stock option of this case, and this is null and void in violation of the mandatory provisions such as the Securities and Exchange Act, and thus, it does not require a separate declaration of intention to eliminate the validity. However, in order to eliminate the appearance of a juristic act which exists externally, there is no agreement or agreement to grant the stock option between the plaintiffs and the defendant to pay the profit from the exercise.

C. As to this, the plaintiffs' retirement is not determined since the defendant and G company entered into a new stock acquisition contract at the time when the general meeting of shareholders of the defendant decided to grant the stock option of this case on September 16, 2003. The actual date of granting the stock option of this case is not the date of granting the stock option of this case, but the actual date of granting the stock option of this case on September 16, 2003, which was discussed about the issue of granting the stock option immediately after the regular general meeting of shareholders or the issue of granting the stock option of this case on May 2, 2003 or at least on August 8, 2003.

29. It can be seen as at the time of the resolution of the board of directors. Since the above time is based on the above time, the plaintiffs' retirement was not scheduled, it is difficult to view that the stock option was granted to the plaintiffs who were scheduled to retire, and ② even if the stock option contract of this case was null and void, the plaintiffs expressed their intent of resignation on the condition that they can continue to exercise the stock option at the time of submitting a resignation certificate on September 8, 2003, so long as the stock option contract of this case is null and void, the plaintiffs' declaration of intent to resign cannot take effect, and ③ even if the stock option of this case violates the mandatory laws and regulations, the difference method of cash payment with pure nature of remuneration does not violate the purpose of the Securities and Exchange Act, etc., as long as there is no possibility of infringing the preemptive right of shareholders, it is still valid within the scope of the difference payment method, and ④ the defendant's notification of the number of exercise of the stock option granted to the plaintiffs on March 31, 2004.

3. Judgment as to the main claim

The key issues of the instant case are whether the instant stock option contract is null and void in violation of the mandatory law, and whether there is a defect in the resolution of the Defendant’s board of directors revoking the granting of stock options.

A. Nature of the Commercial Act and the Securities and Exchange Act

First of all, in order to determine whether the instant stock option contract is invalid as violating the mandatory provisions, this article examines whether the relevant provisions are mandatory provisions or not. 1) Article 340-2 (Stock Option) of the Commercial Act.

(1) A company may, under the conditions as prescribed by the articles of incorporation, grant by the resolution of a general meeting of shareholders pursuant to Article 434 the right to subscribe new shares or to purchase its own shares (hereinafter referred to as "stock option") at a predetermined price set in advance (hereinafter referred to as "price for exercising stock option") to its directors, auditors, or other employees who contribute or may contribute to the incorporation, management, technological innovation, etc.: Provided, That where the exercising price for stock option is lower than substantial amount of the stock concerned, the company may compensate for the relevant difference by cash or transfer its own shares equivalent to the relevant difference. In such cases, the substantial amount of stock shall be appraised as of the date of exercising

(2) No stock option referred to in paragraph (1) shall be granted to any of the following persons:

1. Shareholders who hold not less than 10/100 of the total number of issued and outstanding shares, excluding nonvoting shares;

3. Spouses, lineal ascendants and descendants of the persons prescribed in subparagraphs 1 and 2. Article 340-4 (Exercise of Stock Option)

(1) Stock options referred to in Article 340-2 (1) may be exercised, holding office or holding office for not less than two years from the date on which a resolution of the general meeting of shareholders prescribed in the subparagraphs of Article 340-3 (2) is adopted.

B) Article 189-4 (Stock Option) of the former Securities and Exchange Act (amended by Act No. 6987 of Oct. 4, 2003; hereinafter the same) (Stock Option)

(1) Notwithstanding the provisions of Articles 340-2 through 340-5 of the Commercial Act, a stock-listed corporation or an Association-registered corporation shall grant pursuant to the provisions of this Article the right to purchase stocks of the corporation (hereinafter referred to as “stock option”) at a predetermined price or under the conditions as prescribed by the Presidential Decree, to its executive officers and employees (excluding those prescribed by the Presidential Decree) who contribute, or may contribute, to the establishment, management, ocean-going business, technological innovation, etc. of the corporation concerned by a resolution pursuant to Article 434 of the Commercial Act (hereafter in this Article referred to as “special resolution”) under the conditions as prescribed by the articles of incorporation.

(4) The stock option shall have effect on the company from the date of resolution under paragraph (1) or the proviso of paragraph (3) to the date when the exercise of the stock option is completed as determined by the articles of incorporation of the corporation. In this case, the person granted the stock option may hold office or hold office for not less than 2 years from the date when the resolution under paragraph (1) or the proviso of paragraph

C) Article 84-6 (Stock Option) of the Enforcement Decree of the Securities and Exchange Act

(8) A corporation granting stock options may cancel the granting of stock options by the resolution of the board of directors, as prescribed by the articles of incorporation, in any of the following cases:

1. Where an officer or employee who has been granted a stock option retires or retires at his/her own will;

2. Where the officer or employee who has been granted the stock option causes a serious loss to the corporation intentionally or by negligence;

3. Where it is impossible to comply with the exercise of stock options due to its bankruptcy or dissolution; and

4. Where any cause for revocation prescribed in the stock option contract concluded with the person who has been granted the stock option occurs.

D) Article 36-9 of the Enforcement Rule of the Securities and Exchange Act (stock options contracts, etc.)

(2) A corporation granting stock options shall, where any officer or employee who has been granted stock options dies or retires from his/her office due to retirement or retirement due to retirement or other causes not attributable to the principal, allow him/her to exercise the stock options during the period for such exercise.

2) At the time of the amendment of the Commercial Act on 1999, the amendment was made, with respect to Paragraph 1 of Article 340-2 at the time of the amendment of the Commercial Act, the draft of the initial pre-announcement of legislation was “which was either contributed or stipulated as “the first pre-announcement of legislation,” but finally, was

B) Article 189-4 (1) of the Securities and Exchange Act prior to the amendment by Act No. 6176 of Jan. 21, 200 (amended by Act No. 6176) stated that "the contribution was made or was made "the contribution was made", but thereafter "the amendment was made" or "the amendment was made".

Stock options are designed to raise awareness of the principal to the executives and employees of the company so that they can be interested in the overall management of the company, to improve their will to work by linking remunerations and the performance of the company, and to make the understanding of the shareholders coincide with that of the company, to induce and induce the future achievements rather than past achievements, and to induce the management in the process of the revision of the Commercial Act. In full view of the fact that the Securities and Exchange Act has contributed or revised "in the past," or "in the past," "in the process of the revision of the Commercial Act," the stock options should be given to the executives and employees who have contributed or may contribute in the future in the same manner as the Commercial Act, and the stock options should be given to the executives and employees who have contributed or may contribute in the future. However, it can be considered that the possibility of contribution in the past can be determined based on the past contribution, and it can not be granted exclusively for compensation for the past.

In addition, Article 340-4 of the Commercial Act and Article 189-4 (4) of the Securities and Exchange Act, which stipulate the requirements for holding office, allow early exercise of stock option, are to be recognized as a person who has contributed to the company and has contributed to the company because the original purpose of the system can be eliminated by making profits only by the stock options in case of allowing the exercise of stock option early. In light of the above, the above requirements for holding office can not be mitigated by the articles of incorporation or special resolution of the

Therefore, each of the above provisions on stock options and requirements for holding office shall be deemed to have the nature of compulsory provisions which cannot be excluded by agreement between the parties.

(b) judgment;

1) First, we examine whether the instant stock option contract was null and void as violating the mandatory provisions, and examine whether the Plaintiffs’ retirement was scheduled at the time of the instant stock option contract.

According to Gap evidence No. 8, the plaintiffs' resignation letter was submitted on September 8, 2003, prior to September 8, 2003.

From the first half of the year, discussions were conducted to grant the stock option to the plaintiffs re-appointed at the general meeting of shareholders in the same year, but not discussed at that time. However, the fact that the board of directors decided to grant the stock option to the plaintiffs only at the meeting of August 29, 2003 is as seen above, and in full view of the overall purport of pleadings in the statement No. 12, the plaintiffs A, C, F, G, and network B were present at the meeting of the board of directors on August 29, 2003, and there was a discussion about the resignation of outside directors and management at the time of the resolution of the board of directors. The minutes of the board of directors did not refer to the general meeting of shareholders as to granting the stock option at the time of the resolution of the above board of directors. According to the above acknowledged facts, it is difficult to view that the plaintiffs had already been granted the stock option at the general meeting of shareholders after the retirement of the plaintiffs, and there was no possibility that the plaintiffs had already retired the stock option at that time.

Therefore, even if it is recognized that the plaintiffs contributed to the management of the defendant as outside directors, etc. by withdrawing even before the expiration of their terms of office in order to comply with conditional contracts for acquiring new stocks subject to the transfer of management rights between the defendant and G companies and to implement the above contract agreement, and as well as the possibility of contributing to the management of the defendant by participating in the decision-making process in the position of outside directors until the time when resignation takes effect after the submission of the above resignation letter at the time of the submission of the resignation, it is apparent that the plaintiffs at the time of granting stock option against the plaintiffs, as outside directors, cannot meet the minimum holding requirements under Article 340-4 of the Commercial Act and Article 189-4 (4) of the Securities and Exchange Act, so the contract for granting stock option in this case is null and void (Article 36-9 (2) of the Enforcement Rule of the Securities and Exchange Act). However, in light of the purport and nature of each of the above provisions, it cannot be applied to the plaintiffs who already contributed to retirement from the company.

As long as the instant stock option contract is deemed null and void in violation of the mandatory law, the instant stock option contract shall be deemed null and void, regardless of the existence of the resolution of the general meeting of shareholders granting the stock option and the binding force of the audit result by the Board of Audit and Inspection. Therefore, the Plaintiffs’ assertion based on the premise that the instant stock option was revoked cannot be accepted without further review.

2) Next, in light of the language and text of the stock option-related provisions as to whether the plaintiffs' resignation declaration is conditional declaration of intent, it appears to be clearly stated that the above agreement is made to be the plaintiffs who resign from office without a problem. It is difficult to see that the plaintiffs and the defendant agreed to the purport that the exercise of the stock option would not take effect if it is impossible to exercise the stock option. Thus, this part of the plaintiffs' assertion is not accepted. 3) Next, as long as the stock option was adopted by the method of payment of remuneration, it can be deemed that the parties intended to pay remuneration according to their contribution ratio. The exercise of the stock option by the difference payment method is one of the exercise methods based on the premise that there exists a existence, and it is related to management intention, so it is difficult to accept this part of the plaintiffs' assertion that the difference between the exercise price and the market price of the exercise price and the market price of the stock option would become effective even if retirement from office is expected to contribute to the future.

4) Examining whether the resolution to cancel the stock option of this case by the Defendant board of directors is against the good faith, and if the person who violated the mandatory law voluntarily asserts the invalidity of the agreement on the ground that it is an exercise of the right in violation of the good faith principle, it would result in realizing the outcome of exclusion under the compulsory law and completely excluding the legislative intent, and barring any special circumstance, such assertion cannot be deemed to be contrary to the good faith principle (Supreme Court Decision 2004Da5556 Decided October 28, 2004), and the Plaintiffs’ assertion on this part is rejected.

4. Judgment on the conjunctive claim

A. First, we examine whether the plaintiffs can seek the amount of money equivalent to the exercise marginal profit based on the agreement, and the fact that one of several methods of exercising stock options can be selected according to the defendant's circumstances under the contract of granting stock options of this case is as above. The fact that the difference payment method is prescribed as one of the methods of exercising stock options under the above agreement alone is difficult to view that the plaintiffs and the defendant agreed to pay the amount equivalent to the exercise marginal profit to the plaintiffs. Thus, we cannot accept this part of the plaintiffs' assertion.

B. Next, examining whether the Defendant is liable to compensate the Plaintiffs for damages equivalent to the exercise marginal profit on the ground of nonperformance, it is nothing more than a clear statement that the Plaintiffs’ resignation does not constitute a reason attributable to themselves, and that the Plaintiffs’ resignation does not constitute a “use of stock options” that are already granted or scheduled to be granted despite their resignation, and that the Plaintiffs’ resignation does not constitute a retirement due to their voluntary resignation or a cause attributable to it does not constitute a problem in exercising their stock options. The above provision alone has the obligation to grant their stock options to the Plaintiffs.

Although it is difficult to see that there is an agreement between the parties to grant stock options despite their retirement, the agreement to grant stock options in violation of the Securities and Exchange Act, which is a mandatory provision, also becomes null and void. Therefore, this part of the plaintiffs' assertion is rejected without need to examine the remainder of the issue.

5. Conclusion

Therefore, all of the plaintiffs' claims are dismissed as it is without merit, and it is so decided as per Disposition.

The presiding judge shall change the judge

Judges Song Jinop

Judges Park Jong-hee-