Plaintiff 1 and one other (Attorney Park Sang-ok, Counsel for the plaintiff-appellant)

Han Lp Co., Ltd. (Attorney Ba-woo, Counsel for the plaintiff-appellant)

November 24, 2015

1. The plaintiffs' primary and conjunctive claims are all dismissed.

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

The defendant shall pay to the plaintiff 1 6,760,00 won with 50,070,000 won and 20% interest per annum from the day after the delivery date of the copy of the complaint of this case to the day of complete payment.

Preliminary:

Defendant:

A. At the same time, Plaintiff 1 received KRW 27,640,000 from Plaintiff 1, and at the same time, deliver to Plaintiff 1 share certificates representing KRW 8,000 of the common share shares of KRW 500 issued by Defendant 1, and at the same time receive KRW 20,730,000 from Plaintiff 2, deliver share certificates representing Plaintiff 2 the common share shares of KRW 500 issued by Defendant 2;

B. The Plaintiff 1 shall pay 34,80,000 won, 26,100,000 won to Plaintiff 2, and 15% interest per annum from the day following the day on which the copy of the application for modification of the claim is served to Plaintiff 1, to the day of complete payment.

1. Basic facts

A. On March 17, 2003, Plaintiff 1 was employed by the Defendant Company and retired on December 6, 201, and the department that was employed at the time of retirement is the public relations law team. Plaintiff 2 was employed by the Defendant Company on March 2, 199, and was employed until July 31, 201, and retired and was employed at the time of retirement are the general affairs team.

B. On March 13, 2009, Plaintiff 1 entered into a contract under which the stock option of 8,000 shares was granted by the Defendant Company (hereinafter “instant stock option contract”). The main contents are as follows.

(1) The period of exercise of stock options under Article 2 of the table included in the main sentence shall be as follows:

C. On March 13, 2009, Plaintiff 2 entered into a contract under which the stock option of 6,000 shares was granted by the Defendant Company (hereinafter “instant stock option granting contract”) and its content is as set out in the instant stock option granting contract under the preceding paragraph, with the exception of the difference in granting quantity.

[Reasons for Recognition] Facts without dispute, Gap evidence 1, Gap evidence 2-1 and Eul evidence 2-2, the purport of the whole pleadings

2. Determination on the cause of the claim

A. The plaintiffs' assertion

1) Article 2(6)1 of the instant stock option agreement, which limits the period of exercising the stock option to a period of three months from the date of retirement, is unilaterally unfavorable to the Plaintiffs, and is thus unlawful in violation of the Commercial Act and the articles of incorporation.

2) According to Article 10-2(8) and (1) of the Articles of incorporation of the Defendant Company, a person granted a stock option may exercise his/her right within five years from the date when he/she held office or held office for at least two years from the special resolution date of the general meeting of shareholders. According to such provision, the time when the Plaintiffs’ stock option was exercised is until March 12, 2016. As such, the expression of intent to exercise the stock option made by the Plaintiffs on or around January 22, 2015 is legitimate, and it is also justifiable for the Plaintiffs to express their intent to exercise the stock option again by serving a duplicate of the complaint of this case without the Defendant’s refusal.

3) Therefore, based on the method of compensating for the difference around, on April 20, 2015, the Defendant should pay KRW 66,760,00 ( KRW 8,000 X (11,80- - 3,455) to Plaintiff 1 based on the difference between KRW 11,800 (the market price of shares as of April 20, 201 and KRW 3,455), and KRW 50,070,00 (6,000 X (11,80- - 3,455)) to Plaintiff 2.

4) Preliminaryly, if such difference compensation method cannot be applied, ① is paid for KRW 27,640,00 (X 3,455) according to the “Issuance of New Shares” method as determined by the Defendant Company, and at the same time, deliver to the Plaintiff 1 share certificates representing the Defendant’s ordinary share value of KRW 500,000 (X 6,000 X 3,455). At the same time, upon receipt of payment from the Plaintiff 2 of KRW 20,730,00 (X 3,455), the Defendant did not unfairly compensate for the difference of KRW 30,00,00,00 per common share value of KRW 50,00,000 issued by the Defendant to the Plaintiff 2. It is against the first 1,80,000,000 per share price of KRW 30,000,000 per share, KRW 40,500,000 per share for the Plaintiff’s first time when the Plaintiffs exercised the stock option.

B. Defendant’s assertion

1) Article 2(1) proviso of the instant contract provides that “If a stock option retires after the expiration of the expiry period, it shall be within three months from the date of retirement, the exercise of the stock option shall be within three months from the date of retirement.” In the event a stock option purchaser retires from the Defendant Company, it is clear that the said conditions have been fulfilled by retiring from the Defendant Company after the expiration of the expiry period. The Plaintiffs’ exercise of the stock option through the instant complaint, or the Plaintiffs’ first notification to the Defendant Company as of January 22, 2015, it is apparent that the exercise period of the stock option was terminated by three months from the date of retirement of the Plaintiffs’ first notification to the Defendant Company as of January 22, 2015, and thus, the Plaintiffs’ exercise of the stock option was completed within the effective exercise period. Thus, the Plaintiffs’ claim against the Plaintiff, which was within the period of the exercise of the stock option, is without merit.

2) Home affairs, even if the plaintiffs can exercise their stock options at present as alleged by the plaintiffs, Article 2 (3) of the contract of this case provides that "the method of granting: the method of granting shall be determined by the decision of "A (Defendant Company of this case)" at the time of exercising the stock options among the issuance of new shares, the issuance of treasury shares, or the compensation for difference. According to the above provision, the effect of exercising the stock options of this case is the right to choose the claims acquired by the plaintiffs as the effect of exercising the stock options of this case, and the right of choice is reserved against the defendant company, therefore, the claim for compensation

C. Major issues - Determination as to whether the exercise period for stock options expired

Among the above arguments by the plaintiff and the defendants, the first issue to be examined is whether the exercise period of the stock option in this case is limited to the intention of the exercise period, which leads to the validity of the provision on the exercise period in the contract granting the stock option in this case. The first issue is to be examined.

1) Relevant laws and regulations

In this regard, the main contents of the Commercial Act on stock options, grant and exercise are as follows:

(1) A company as referred to in Article 340-2 (1) of the Table contained in the main sentence may, under the conditions as prescribed by the articles of incorporation, grant by a resolution of the general meeting of stockholders as referred to in Article 434 the right to subscribe new shares or to purchase its own shares (hereinafter referred to as “stock option”) at a predetermined price (hereinafter referred to as “stock option”) to its directors, executive directors, auditors or employees who will, or will be able to contribute to the establishment, management, technological innovation, etc.: Provided, That where the exercising price of the stock option is lower than substantial price of the stock concerned, the company may appraise the difference by cash or transfer its own shares equivalent to the difference. In this case, the actual price of the stock option as referred to in Article 340-3 (1) shall be appraised as of the date of exercising the stock option.

2) The instant articles of incorporation, resolution of the general meeting of shareholders, and individual contracts with the Plaintiffs

Comprehensively taking account of the overall purport of the arguments in the evidence Nos. 1, 2, 3, and 1 of the evidence Nos. 1, 10-2 (8) of the company’s articles of incorporation, the defendant company is entitled to exercise its rights within 5 years from the date of holding or holding office for at least 2 years from the date of resolution under paragraph (1). ② The defendant company decided to hold a general meeting of shareholders on March 13, 2009 to grant stock options to those who were granted stock options including the plaintiffs, and decided to March 12, 2016 from the date of resolution until March 13, 2016, which is 201 and the date of holding or holding office for at least 2 years from March 13, 2009. ③ The defendant company concluded the stock options agreement with the plaintiffs on March 13, 2009, which is the date of the above general meeting of shareholders, and the period of exercising the stock options should be deemed to have lapsed within 3 months from the expiration of the period.

Progress Period: From March 13, 2009 to March 12, 2011

Period: From March 13, 2011 to March 12, 2016

the agreement may be recognized as having been agreed.

3) Whether the agreement on the duration of exercise, including the instant proviso, is lawful and effective

A) Requirements under the Commercial Act of granting stock options and the purpose of legislation

Stock options, which are called Stockholm options, are stipulated in Article 340-2(1) of the Commercial Act, a system that grants stock options to directors, executive officers, auditors, or employees of the company that contribute, or may contribute, to the establishment, management, technological innovation, etc. of the company at a predetermined price, or a right to purchase new shares, at a predetermined price. A company’s directors, etc. or employees have improved the company’s performance by their efforts so that they can obtain gains from stock options by exercising stock options at a predetermined price and by appropriately disposing of the shares, etc. so that they can acquire gains from stock options at a predetermined price. A company is a type of performance compensation system that promotes an increase in the value of the company from a large point of view as security.

B) “The balance of profit relative to being considered in interpreting the requirements and procedures for granting stock options”

As such, stock option is a kind of performance compensation system, which has the nature of performance-based remuneration, so it is necessary to faithfully protect the stock option holder, who is the beneficiary. On the other hand, from the standpoint of granting stock option, there is a high possibility of issuing or transferring shares at a price lower than the market price, and as a result, it may affect the interests of the existing shareholders, thereby affecting the change in corporate governance, and thus, it can also be a cause of change. As such, it is necessary to respect the interpretation of the meaning including mandatory provisions of the relevant provisions of the Commercial Act, etc. concerning the stock option, and to respect the balance of conflicting interests in determining the validity of an individual contract that is viewed in relation thereto, and it should be one of the important criteria for judgment. Provisions concerning a person who is not eligible for granting stock option specified in the Commercial Act itself, or provisions such as restrictions on the ratio of shares that can be granted under the stock option can be understood in

C) Evaluation of the agreement on the duration of exercise, including the proviso clause of this case

In this case, the instant proviso, where the dispute between the Plaintiffs and the Defendant arises as to the validity of the options, namely, “However, if a person retires after the expiration of the transitional period, he/she shall exercise it within three months from the date of retirement” refers to the case where he/she continues to serve after the expiration of the two-year service period indicated as the transitional period, and where he/she retires at an early stage without such distinction, the provision shortens the duration for exercising the options, which reduces the duration for exercising the options, to the disadvantage of reducing the time limit for realizing the highest value out of the realization of the difference or the possible difference.

However, unlike the case where the employee has no longer continued and where the employee continues to work for a retired person whose relationship with the company is interrupted, reasonably shortening the duration of the option in light of the nature of this right, such as the employee’s efforts and compensation for an increase in corporate value, is faithfully guaranteed at the time near the time when the employee’s efforts were made, but blocking the link between the employee’s efforts and the corporate value at the time when a certain period of time has elapsed after the retirement, from the perspective of compensation, it cannot be deemed as unlawful or unjust from the perspective of the balance of conflicting interests, such as the right of the option and the interest of the existing stockholders, as seen in the preceding paragraph.

In particular, since the above proviso exists at the time of the conclusion of the instant stock option contract, the Plaintiffs are already aware of its contents, it cannot be deemed that the period of three months is short, making it impossible or considerably difficult to exercise the Plaintiffs’ right of choice.

Therefore, the plaintiffs' assertion that the exercise period of options under the stock option contract of this case is unilaterally disadvantageous to the plaintiffs is invalid is without merit.

D) Difference from articles of incorporation and resolution of a general meeting of shareholders

In addition, we examine whether the exercise period under the stock option contract of this case is invalid because it is different from the resolution of the articles of incorporation or the general meeting of shareholders of the defendant company.

It is clear that the provisions of the proviso of this case concerning the period of exercise under the stock option contract of this case were added to the provisions of the proviso of this case, and the contents of the company's articles of incorporation or the resolution of the general meeting of shareholders required under the provisions of Articles 340-2 and 3 of the Commercial Act were partly different. However, the articles of incorporation is the fundamental rules under the organization law concerning the organization and activities of the company, and its contents should be respected unless they are provided as a fundamental rule, and it may affect the validity of juristic acts of the company in violation of the articles of incorporation. Meanwhile, since the contents of the articles of incorporation are fundamental rules, it is possible to specify or modify them within the scope that does not harm the basic purport or core contents. The addition of the proviso of this case's individual contract of this case does not completely invalidate the period of exercise under the articles of incorporation, but only if the right holder continues to work during the period of exercise. This proviso of this case's provision does not affect the reduction of the period of exercise under the provisions of this case's articles of incorporation.

4) Sub-committee

Therefore, the instant stock option agreement between the Plaintiffs and the Defendant regarding the period for exercising the stock option, including the instant proviso clause and the said clause, comes to an effective agreement. The Plaintiff 1, supra, until February 6, 2012, which was three months from December 6, 201, which was the date of retirement as seen earlier, and Plaintiff 2, before September 31, 201, which was three months from July 31, 201, which was the date of retirement as seen earlier, shall exercise its option until September 31, 201. However, on January 22, 2015, which was the time when the Plaintiffs first expressed their intent to exercise the stock option, is apparent after the expiration of the period for exercising the stock option, and thus, the Plaintiffs’ primary and preliminary claims seeking under the premise that the period for exercising the stock option was not expired based on the instant stock option agreement, return to all other issues without any justifiable reasons.

3. Conclusion

Therefore, the plaintiffs' primary and conjunctive claims are all without merit, and they are dismissed. It is so decided as per Disposition.

Judges Yu Young-il