Forms of Business Combination - DOC

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					                       M&A Notification Guidelines
                                             Enacted by Economic Planning Board Notification No. 44
                                                                                     May 13, 1981

                                            Amended by Economic Planning Board Notification No. 61
                                                                                 January 6, 1983

                                          Amended by Economic Planning Board Notification No. 87-9
                                                                                    May 22, 1987

                                            Amended by Fair Trade Commission Notification No. 90-5
                                                                                    May 26, 1990

                                          Amended by Fair Trade Commission Notification No. 1993-9
                                                                                     April 10, 1993

                                         Amended by Fair Trade Commission Notification No. 1997-20
                                                                                       April 7, 1997

                                          Amended by Fair Trade Commission Notification No. 1998-6
                                                                                     June 15, 1998

                                          Amended by Fair Trade Commission Notification No. 1999-3
                                                                                     April 15, 1999

                                         Amended by Fair Trade Commission Notification No. 2001-11
                                                                                      July 24, 2001

                                          Amended by Fair Trade Commission Notification No. 2003-1
                                                                                       May 2, 2003

                                          Amended by Fair Trade Commission Notification No. 2005-5
                                                                                   March 23, 2005


We hereby designate this amended M&A Notification Guidelines in accordance with Article 12
of the Monopoly Regulation and Fair Trade Act (hereinafter, the “Act”) and Article 18 of its
Enforcement Decree (hereinafter, the “Decree”).

                                                                                    April 1, 2005
                                                                    Korea Fair Trade Commission



                           M&A Notification Guidelines

I. Purpose
The purpose of this Guidelines is to specify the principles regarding notification of business
combination, such as notification procedures, notification forms, documents to be submitted
together with the notification forms, etc. pursuant to Article 12 of the Act and Article 18 of the
Decree.

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II. Categorization of Business Combinations Subject to Notification
1. Business combinations subject to Notification shall be categorized into business combinations
   subject to ordinary notification (hereinafter, "Subject of Ordinary Notification") and business
   combinations subject to simplified notification (hereinafter, "Subject of Simplified
   Notification").

2. Business combinations falling into one of the following categories shall be subjects of
   Simplified Notification:

      A.          When the company subject to notifying a business combination and its
           counterpart in the business combination are Specially Related Persons of each other
           (excluding parties to the business combination who participate with the common goal
           of gaining managerial control);

      B.          When a company that is not a large-scale enterprise engages in business
           combination with an enterprise whose total amount of assets and turnover are 10 billion
           Won or less. (Provided that participation in the establishment of a new enterprise is
           excluded);

      C.           Engaging in interlocking directorate with less than 1/3 of the total number of
           officers in the counterpart company of the business combination; provided that
           interlocking directorate with the representative director shall be excluded.

 3.    In the case of Simplified Notification, the Notification form by type of business
      combination as set forth in III of this Guidelines shall be submitted together with Attached
      form 6; provided that notification may be filed online at the website of the Fair Trade
      Commission.


III. Business Combination Notification Guideline
1. Notification of the acquisition or ownership of shares

      A.           When a company or its Specially Related Person other than company (meaning
           an individual, non-profit corporation, or organization. Hereinafter, the same.) “owns
           more than 20% [more than 15% for the companies listed on the stock exchange or
           registered in the KOSDAQ (Korea Securities Dealer Automated Quotation)] of the total
           number of stocks issued by another company" under Subparagraph 1 Paragraph 1
           Article 12 of the Act and “becomes the largest shareholder by additionally acquiring
           shares of the company after notifying the combination of enterprises following the
           provision of Subparagraph 1” under Subparagraph 2, it shall submit a notification form
           as set forth in Exhibit 1 to the Fair Trade Commission together with the relevant
           documents; provided that if the Fair Trade Commission decides that a business
           combination notified pursuant to Subparagraph 1 creates a controlling relationship, it
           shall not be notified pursuant to Subparagraph 2.

      B.          "Becoming to own not less than 20%[15% for the corporations listed on the
           stock market exchange or registered in the KOSDAQ]of the total number of stocks”

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         under Subparagraph 1 Paragraph 1 Article 12 of the Act means an increase in the
         shareholding ratio due to forfeited shares generated by paid-in capital increase, due to a
         donation of shares without compensation, or for any other reasons.

    C.          In the case of notification under Subparagraph 1 Paragraph 1 Article 12 of the
         Act, the Initial Date for Notification Obligation shall be the date on which the total
         shareholding ratio exceeds 20% [15% for the corporations listed on the stock market
         exchange or registered in the KOSDAQ]

    D.          In the case of notification under Subparagraph 2 Paragraph 1 Article 12 of the
         Act, the Initial Date for Notification Obligation shall be the date on which a company
         becomes the largest shareholder by acquiring shares.

    E.           "Delivery" as set forth in Item (a) Subparagraph 1 Paragraph 7 Article 18 of the
            Decree shall include easy delivery under Article 188 (Effect of Assignment of Real
            Rights over Movables, Easy Delivery) and change in possession under Article 189
            (Change in Possession) of the Civil Act, and a transfer of the right for a claim to
            return the premises under Article 190 (Transfer of the Right for a Claim to Return the
            Premises) of the Civil Act as well as delivery.

    F.              When the contents of interlocking directorate after the acquisition or
            ownership of shares are the same as the content of the notification filed pursuant to
            Subparagraph 1 and 2 Paragraph 1 Article 12 of the Act, a notification of interlocking
            directorate under Subparagraph 3 Paragraph 1 Article 12 of the Act shall not be filed.

    G.           “Stock ownership” in Paragraph 7 Article 12 of the Act shall be deemed to be
            effective when the share certificate is delivered or share purchase payment is made.

2. Notification of interlocking directorate of a large-scale company.

    A.          When "an officer of a company concurrently holds the position of officer of
         another company" as set forth in Subparagraph 3 Paragraph 1 Article 12 of the Act, the
         company which caused the relevant officer or employee to hold the position in another
         company shall submit a notification, as set forth in the Attached form 2 to the Fair Trade
         Commission, together with relevant documents.

    B.            When only a natural person is to be changed without the change in the number of
         or in the position of directorate, the fact of such change is not subject to notification.

3. Notification of the merger of companies

    When a company merges with another company as set forth in Subparagraph 3 Paragraph 1
    Article 7 of the Act, the companies concerned shall jointly submit a notification form, as set
    forth in the Attached form 3 to the Fair Trade Commission together with relevant documents.

4. Notification of the transfer of business of a company

    A.           When a company intends to "take over or lease the whole or a substantial part of
          the business or undertake the management of another company, or take over the whole
          or a substantial part of the fixed operating assets of another company" as set forth in


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           Subparagraph 4 Paragraph 1 Article 7 of the Act, the company shall submit a
           notification as set forth in the Attached form 4 to the Fair Trade Commission, together
           with relevant documents.

     B.           "Business" in Subparagraph 4 Paragraph 1 Article 7 of the Act means combined
          property rights of the company which are organized for the business purpose and which
          function as an organic entity. This includes intangible property rights such as sales rights
          (including sales-related organizations, manpower, contractual relations involving
          agencies), patent rights and trademarks, as well as others which are associated with
          licenses and authorizations and have property values.

     C.           "Substantial part" in Subparagraph 4 Paragraph 1 Article 7 of the Act means that
          the transferred or leased parts may be engaged as an independent business unit or a
          transfer or lease may result in a significant reduction in the turnover of the transferred
          company, and that the amount of transfer is more than 10% of the total amount of assets in
          the balance sheet of the transferred company as of the last day of the immediately preceding
          business year, or more than 5 billion Won.

     D.          "Undertaking of the management of another company" in Subparagraph 4
          Paragraph 1 Article 7 of the Act means the acting of undertaker as the person executing
          managerial rights through the signing of contracts which entrust management between the
          acquired company and transferred company, etc.

     E.            "Performing the business transfer agreement" as referred to in Paragraph (7)
          Article 12 of the Act means a delivery or transfer in the case of movable property,
          registration in the case of real estate, and registration, when registration is required for
          trademark, etc.

5. Notification of the acquisition of the shares of newly established company

     A.           When a company or its specially related person other than company "acquires
          20% or more of the shares of a new company to be established", as mentioned in
          subparagraph 5 Paragraph 1 Article 12 of the Act, the company shall submit a notification,
          as set forth in the Attached form 5, to the Fair Trade Commission together with related
          documents.

     B.           When the contents of the shareholding ratio or of interlocking directorate after
          the incorporation of a company are the same as the contents of the notification of the
          participation in the establishment of company filed pursuant to Subparagraph 5
          Paragraph 1 Article 12 of the Act, a notification on the acquisition of shares or on
          interlocking directorate after the incorporation under Subparagraph 1 and 3 Paragraph 1
          Article 12 of the Act shall not be filed.

     C.        "Acquiring shares" as mentioned in Paragraph (7) Article 12 of the Act means the
          payment of the price of the shares allotted.


IV. Business Combination including Foreign Company
1.   When the acquiring company defined on the "M&A Review Guidelines" (hereinafter

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      "acquiring company") and the acquired company defined on the "M&A Review Guidelines"
      (hereinafter "acquired company"), both of which have main offices overseas or were
      established under the foreign law (hereinafter "foreign company"), they are exempted from
      the notification obligation of Paragraph 1 Article 12 of the Act if domestic turnover of at
      least one of the acquiring and acquired company (in case of newly established merger such
      as A+B →C, one of the acquired companies) is less than 3 billion won.

      The same also applies when the acquiring company is domestic company and the acquired
      company is foreign company.

 2.    The size of each domestic turnover of the acquiring and acquired company respectively
       under the Provision IV-1 includes those of companies remaining as affiliates before and
       after the completion of the business combination. However, in case of taking over business
       under Subparagraph 4 Paragraph 1 Article 7 of Act, domestic turnover of affiliates are not
       included in the domestic turnover of acquired.

 3.     In case of applying Subparagraph 1 Paragraph 1 Article 12 of the Act, if the acquired
        company, which is a foreign company, becomes to own less than 20% of total number of
        stocks excluding non-voting shares under the provision of its related law of its own
        country, it is exempted from the notification obligation.

 4.      "Affiliate" in Paragraph 2 Article 12 of the Act shall be deemed as, in the case there is no
          other document, any company required to draw consolidated financial statements.

 5.      When converting unit in financial statements of a foreign company into the Korean Won,
         the exchange rate as of the closing date of the immediately preceding business year
         when the concerned business combination took place is applied to total assets, and the
         average exchange rate of the immediately preceding business year is applied to turnover.


V. Filing Request for Voluntary Pre-Merger Review
      Request for a pre-merger review pursuant to Paragraph (8) Article 12 of the Act shall be
      filed submitting the related notification form by the types of business combination set forth
      III of this guidelines, together with relevant documents.


VI. Filing Request for Designation and Change of the Representative for Notifying
    Business Combinations
      A person who has been designated as the Representative for Notifying Combination of
      Enterprises pursuant to Paragraph (10) Article 12 of the Act or Paragraph 1 Article 19 of the
      Decree, or who wishes to change the designated Representative for Notifying Business
      Combinations shall submit the application set forth in the Attached form 7 to Fair Trade
      Commission; provided that in the case of changing the already designated Representative for
      Notifying Business Combinations, the application shall be submitted together with a
      document stating the reason therefore.




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                             ADDENDUM <March 23, 2005>
<Effective Date> This Guidelines shall take effect on April 1, 2005.
The proviso under 3 of II shall enter into force on April 1, 2006.




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