For stock options in Korea to be exercisable, thus valid options, the option must be approved, in most cases, at a general shareholders meeting of the Korean company and the articles of incorporation of the Korean company must be in compliance with Korean Law. If approval of the shareholders is obtained the articles of incorporation of the Korean company should, inter alia, note:
- An intention that a stock option or grant may be granted in specified cases;
- The number of shares to be issued or transferred in the case of exercising the stock option;
- Qualifications of a person to whom a stock option is to be granted;
- Exercising period of the stock option; and
- An intention that the granting of the stock option may be revoked by a resolution of the board of directors in specified cases. Korea Commercial Act art. 340-3(3)1.
Additionally, the company in Korean granting the options should execute an agreement with the individual granting the options and the stock option should, only, be given to authorized recipients under the articles and the agreement.
If your company in Korea intends to grant stock options or have received stock options in Korea please consult with an attorney that deals with these type of matters. This is not an issue that can be handled by all lawyers in Korea have seen a recent incident that could have been avoided if the company and the employee, simply, had a counsel who did not make blind assumptions.
For a more detailed article on the exercising of stock options in Korea, please see: Exercising Stock Options in Korea.
For a bio of IPG Legal’s Corporate Law Team please see: IPG Legal’s Corporate Law Team.
- Stock Options in Closed Corporations in Korea
- Exercising Korean Stock Options in Companies in Korea under the Korean Commercial Code
- Steps to Set up a Business in South Korea
- Rights of “Non-Registered” Shareholders in Korea
- Short Selling at the Korea Stock Exchange Permitted – Don’t Forget the Disclosure Requirements
- Korean Dividend Distribution Procedures Amended by MOJ and FSC
- Fiduciary Duties of Korean Directors/Representative & Controlling Shareholders of Korean Companies
- Korean Derivative Suit Law
- Acquiring Shares in Closed Korean Corporations in Exchange for Products at Discount: Don’t Forget the Due Diligence in Korea
- Involuntary Dissolution of a Company in Korea: Shareholder Disputes in Korean Companies