REGULATION

ON

SECURITIES ISSUANCE AND DISCLOSURE

Regulation on Securities Issuance and Disclosure

CONTENTS

I.	General Provisions

§1.	Purpose

§2.	Application Standards

II.	Registration and Administration of Securities Issuer

§3.	Scope of Application

§4.	Registration Procedures

§5.	Matters to be Reported

§6.	Filing of Account Settlement Documents

§7.	Revocation of Registration

§8.	Copies of Registration Application, etc. and Disclosure

§9.	Delegation of Authority

III.	Registration of Securities Issuance

§10.	Applicability

§11.	Persons Excluded from Those Subject to Solicitation for Offer

§12.	Criteria of Transferability Based on Public Offering

§13.	Evaluation of Directly Offered Stocks

§14.	Restriction on Valuation by Analysis Institutions

§15.	Sanction for False Valuation, etc.

§16.	Institutions for Deposit Subscription Margin in Direct Offerings

§17.	Contents of Registration Statement

§18.	Information Required in Shelf Registration Statement and in Supplementary Documents

§19.	Exceptions to Information Required in Registration Statement

§20.	Documents Attached to Registration Statement, etc.

§21.	Omission of Information, etc. Required in Registration Statement

§22.	Amended Registration Statements, etc.

§23.	Exceptions to Effective Date

§24.	Acceptance Notice, etc.

§25.	Complement of Prospectus

§26.	Information Required in Simplified Prospectus

§27.	Public Offering or Secondary Distribution Without Filing Registration Statement

§28.	Exceptions to Small-size Secondary Distribution Using OTCBB

§29.	Securities Issuance Report

§30.	Restriction on Underwriting Business by Institutions Concurrently Engaging in Securities Business

§31.	Market Making

§32.	Stabilization

§33.	Number of Copies of Registration Statement to be Filed, etc. and Disclosure

§34.	Administrative Actions by the FSC

§35.	Delegation of Authority

IV.	Notification of Securities Issuance by Foreign Corporations, etc.

Section 1. General Provisions

§36.	Applicability

§37.	Definitions

§38.	Filing of Application for Registration

§39.	Information Required in Registration Statement

§40.	Documents Attached to Registration Statement

§41.	Special Application of Effective Date

Section 2. Issuance of Won-denominated Bonds

§42.	Requirements for Issuer

Section 3. Methods of Producing Disclosure Document

§43.	Preparing of Korean-Translated Version

§44.	Preparing of Filing Documents

§45.	Designation of the Agent of the Issuer

§46.	Securities Issuance Report

§47.	Information etc. Required in Annual Report

§48.	Audit Report Filing Procedures

§49.	Matters to be Notified by the Issuer

§50.	Preparation of Required Information, etc.

§51.	Delegation of Authority

V.	Financial Management of Listed Corporations

Section 1. General Provisions

§52.	Scope of Application

§53.	Definitions

Section 2. Distribution of Dividend of Listed Corporations, etc. and Accounting Documents

§54.	Dividend Base and Advance Notice

§55.	Indication of Auditor's Opinion

§56.	Reserve for Capital Structure Improvement

Section 3. Rights Offering

§57.	Issuing Price for Capital Increase for Value

§58.	Issuance of Warrants

§59.	Public Notice and Individual Notice of Issuing Price, etc.

§59-2.	Stock Listing Overseas

Section 4. Issuance of Convertible Bonds and Bonds with Warrant

§60.	Restrictions on Issuance of Convertible Bonds

§61.	Determination of Conversion Price

§61-2. Conversion Price Following Depreciation

§62.	Restricted Conversion Period

§63.	Issuance of Bonds with Warrant

Section 5. Request for Information

§64.	Requests for Information

§65.	Administrative Actions

§66.	Delegation of Authority

VI.	Disclosure by Listed Corporations, etc.

Section 1. General Provisions

§67.	Scope of Application

§68.	Definitions

Section 2. Reporting of Significant Corporate Information

§69.	Scope of Significant Corporate Information and Reporting Procedures

§70.	Reporting of Business Plan

§71.	Reporting of Transactions with the Largest Shareholder, etc.

Section 3. Annual Report, etc.

§72.	Information Required in Annual Report, etc. and Documents Attached Thereto

§73.	Notice or Public notification of General Shareholders' Meeting

Section 4. Disclosures of Reporting Documents

§74.	Copies of Reporting Documents and Reports to be Filed, and their Disclosure

§75.	Administrative Actions to be Taken by the FSC

§76.	Delegation of Authority

VII.	Declaration of Merger (or Consolidation) and Assignment or Assumption of Business

Section 1. General Provisions

§77.	Scope of Application

Section 2. Merger

§78.	Filing of Merger Statement

§79.	Information Required in Merger Statement

§80.	Documents Attached to Merger Statement

§81.	Special Application to Small Scale Merger

§82.	Calculation Standards of Merging Value

§83.	Designations of Independent Ratings Agency

§84.	Restriction on Evaluation by Independent Credit Ratings Agency

§85.	Individual or Public Notice of Calling Shareholder Meeting for Resolution on Merger

§86.	Report on Completion of Merger

Section 3. Assignment or Assumption of Business

§87.	Filing of Statements on Assignment or Assumption of Business

§88.	Information Required in Assignment or Assumption Statement

§89.	Document Attached to Assignment or Assumption Statement

§90.	Notification to Convene or Public Notice of Shareholder Meeting for Approval of Purchases or Sales of Business

§91.	Report on Completion of Assignment or Assumption of Business

Section 4. Division

§92.	Definitions

§93.	Filing of Division Statement

§94.	Information Required in Division Statement and Documents Attached Thereto

Section 5. Adjustment of Purchasing Price

§95.	Adjustment of Purchasing Price

§96.	Number of Copies of Statements, etc, to be Filed and Disclosure

§97.	Complement of Statements

§98.	Administrative Actions by the FSC

§99.	Delegation of Power

VIII.	Declaration of Acquisition and Disposal of Treasury Stock

Section 1. General Provisions

§100.	Scope of Application

Section 2. Acquisition and Disposal of the Treasury Stock

§101.	Matters to be Resolved by the Board of Directors on Acquisition or Disposal of the Treasury Stock

§102.	Submission of Acquisition Statement of the Treasury Stock

§103.	Information Required on Acquisition Statement and the Document Attached Thereto

§104.	Reporting Results on the Acquisition of the Treasury Stock

§105.	Acquisition Period of the Treasury Stock

§106.	Method of Buy Order for Acquisition of the Treasury Stock

§106-2.	Special Cases for Buy Order for the Treasury Stock Acquisition

§107.	Refusal of Orders

§108.	Restriction Period of Disposition of the Treasury Stock for Issuance of DR

§109.	Submission of the Treasury Stock Disposition Statement

§110.	Information Required in Disposition Statement and the Document Attached Thereto

§111.	Reports on Disposition Result of Treasury Stock

Section 3. Acquisition and Disposition of the Treasury Stock under Trust Contracts

§112.	Matters to be Resolved by the Board of Directors on Acquisition or Disposition of the Treasury Stock under Trust Contracts

§113.	Submission of Statements on Conclusion or Termination of Trust Contracts, etc.

§114,	Information Required in the Conclusion or Termination Statements of Trust Contracts, etc. and the Documents Attached Thereto

§115.	Acquisition Status Report and Termination Report of the Treasury Stocks under Trust Contract, etc.

Section 4. Determination of Limit on the Treasury Stock

§116.	Determination of Limit on the Treasury Stock

§117.	Administrative Proceedings on False or Insolvent Declarations, etc.

§118.	Number of Copies of the Statements, etc. to be Submitted and Disclosure

§119.	Delegation, etc. of Power

IX.	Disclosure of Changes in Corporate Governance

Section 1. General Provisions

§120.	Scope of Application

§121.	Definitions

Section 2. Tender Offer Statement

§122.	Exemption from Tender Offer

§123.	Information Required in Tender Offer Statement

§124.	Documents Attached to Tender Offer Statement

§125.	[Deleted]

§126.	Information to be Released in Tender Offer Announcement

§126-2.	Dates Excluded in Period Counting

§127.	Prohibition of Modifying the Purchasing Terms

§127-2.	Exceptions to the Withdrawal of Tender

§128.	Proportional Distribution

§129.	Delivery of Tender Offer Notice

§130.	Report

§131.	Number of Copies to be Filed and Disclosure

Section 3. Report on Holding and Change of Block Shares, etc.

§132.	Method of Joint Report

§132-2.	Base Date for the Reporting of Holding Status

§133.	Days not to be Included in Reporting Period

§134.	Information Required in Report on Holding and Change of Block Shares by Institutional Investors

§135.	Documents to be Attached to Report

§136.	Copies of Reports, etc. to be Filed and Disclosure

Section 4. Solicitation for Proxy Exercise of Voting Rights

§137.	Soliciting Documents

§138.	Omission of Description

§139.	Prior Filing and Order to Correct

§140.	Disclosure of Reference Documents, etc.

Section 5. Approval for Acquisition of Stocks Issued by Public Corporations

§141.	Application for Approval for Acquisition of Block Shares

§142.	Acquisition of Block Shares Deemed Approved

§143.	Report on Acquisition of Block Shares

§144.	Copies of Reports, etc. to be Submitted and Disclosure

Section 6. Administrative Actions by the FSC

§145.	Administrative Actions by the FSC

§146.	Delegation of Power

X.	Declarations in Electronic Filing

§147.	Scope of Application

§148.	Definitions

§149.	Relations with Other Regulations

§150.	Electronic Filings Subject to Application

§151.	Operation of the Data Analysis, Retrieval and Transfer System (DART)

§152.	Registration of Electronic Filer

§153.	Submission, etc. of Electronic Filings

§154.	Effectiveness, etc. of Digital Signature

§155.	Registration of Digital Signature

§156.	Authentication of Digital Signature

§157.	Change of Digital Signature

§158.	Abolition of Digital Signature

§159.	Omission of Graphics, Images, etc.

§160.	Receipt of Electronic Filings and Notice of Receipt

§161.	Documents to be Prepared by Persons Other Than Electronic Filers

§162.	Transmission, etc. of Electronic Filings to Relevant Institutions

§163.	Number of Electronic Filings for Submission

§164.	Submission under System Failures in the DART

XI.	Supplementary Provisions

§165.	Determination of Formats

Addenda

Enacted on December 29, 2000 FSC 200-126

Amended on August 1, 2001 FSC 2001-53

Amended on September 24, 2001 FSC 2001-68

Amended on October 31, 2001 FSC 2001-86

Amended on December 19, 2001 FSC 2001-98

Amended on April 4, 2002 FSC 2002-17

Amended on May 28, 2002 FSC 2002-32

Amended on August 1, 2002 FSC 2002-48

Amended on December 18, 2002 FSC 2002-81

Amended on January 3, 2003 FSC 2002-82

Amended on January 29, 2003 FSC 2003-5

Amended on March 19, 2003 FSC 2003-17

CHAPTER I.

GENERAL PROVISIONS

§1. Purpose

The purpose of this Regulation is to prescribe the matters necessary for the issuance of securities and disclosure, etc. and those necessary for the enforcement thereof, from among the pertinent affairs falling under the jurisdiction of the Financial Supervisory Commission (hereinafter, "the FSC") pursuant to the Securities and Exchange Act (hereinafter, "the Act"), its enforcement decree (hereinafter, "the Decree") and its enforcement regulation (hereinafter, "the Enforcement Regulation").

§2. Application Standards

(1) The financial information to be applied in this Regulation shall be based on the financial statements (excluding any corporation which is not audited) adjusted by an auditor (hereinafter, "Auditor") pursuant to Article 3 of the Act on External Audit of Corporations (hereinafter, "the External Audit Act"). However, the financial information to be applied in Article 69 paragraph (1) subparagraph 6 items a to c shall be based on a different basis.

(2) Any matters on finance and accounting terms used in this Regulation shall conform to the Financial Accounting Standards as prescribed pursuant to Article 13 of the External Audit Act (hereinafter, "the Accounting Standards")

(3) The term "equity capital" in this Regulation refers to the amount calculated by the following formula. However, in calculating the equity capital in Chapter Ⅵ, if such equity capital is smaller than the capital stock, the capital stock shall be applied in place of equity capital:

[equity capital] = [total assets as of the end of the latest fiscal year] - [total liabilities as of the end of the latest fiscal year] +/- [changes in capital stock, capital surplus, retained earnings or accumulated deficit from after the end of the latest fiscal year to the date on which the cause for reporting or disclosure occurs]

(4) The Regulation on Investigation of Securities and Futures shall apply mutatis mutandis to cases where any measure is taken pursuant to this Regulation.

(5) The terms used in this Regulation, except those otherwise specifically defined in this regulation, shall follow their usage in the Act, the Decree, the Enforcement Regulation, other relevant statutes, and other regulations formulated by the FSC.

CHAPTER II.

REGISTRATION AND ADMINISTRATION OF SECURITIES ISSUER

§3. Scope of Application

In case of any registration of securities issuer with the FSC pursuant to the provisions of ChapterⅡ of the Act, the matters necessary to the registration procedures and the administration of such registered corporations shall be governed by the provisions under this Chapter.

§4. Registration Procedures

(1) Any corporation which must register with the FSC pursuant to Article 3 of the Act shall submit to the FSC an application form stating matters prescribed under each of the following subparagraph hereinafter, "registration application"):

1. Where a corporation is applicable under Article 3 subparagraphs 2, 3 and 6 of the Act:

a. Outline of the corporation;

b. Type and nature of its business;

c. Financial information;

d. Status of affiliated companies;

e. Matters concerning stocks;

f. Matters concerning corporate officers and employees;

g. Types and nature of its transactions with parties of interest; and

h. Any other matters necessary.

2. In the event of a corporation applicable under Article 3 subparagraph 5 of the Act:

a. Purpose of business;

b. Business plan;

c. Post-incorporation projected status of affiliated companies;

d. Post-incorporation matters concerning stocks;

e. Matters related to its promoters;

f. Appointment of corporate officers and employees recruit plan; and

g. Any other matters necessary.

(2) The documents provided under each of the following subparagraph shall be attached to the registration application;

1. In the case of paragraph (1) subparagraph 1 :

a. Articles of incorporation;

b. A certified copy of the company's registration;

c. Shareholders' list; and

d. Documents concerning account settlements.

2. In the case of paragraph (1) subparagraph 2 :

a. The articles of incorporation drafted by promoters;

b. Promoters' list and matters related to the promoters' subscription of stocks;

c. Business plan or business manual; and

d. Post-incorporation balance sheets and income statements projected for the first two years.

(3) Where a listed company provided under Article 2 paragraph (13) subparagraph 3 of the Act (hereinafter, "stock-listed corporation") or a company registered with an association provided under Article 2 paragraph (15) of the Act (hereinafter, "registered corporation") is applicable under Article 3 subparagraph 6 of the Act, such a company shall be deemed registered when the contents of resolution of its board of directors on the granting of stock options pursuant to Article 69 paragraph (1) subparagraph 11 are reported to the FSC.

(4) The documents related to account settlements as under paragraph (2) subparagraph 1 item d shall be those applicable under each of the following subparagraph, based on the latest fiscal year (in case the fiscal year is shorter than one year, those for the last one year). However, in the case of a corporation subject to external audit, they may be substituted by the audit report (including financial statements; hereinafter as such); in the case of a corporation whose first fiscal year has not yet lapsed since the incorporation, they may be replaced by the balance sheet as of the end of the latest month and the income statement for the period from the date of incorporation to the end of the latest month.

1. Balance sheet and its supplementary schedules;

2. Income statement and its supplementary schedules; and

3. Statements of appropriations of retained earnings or statements of disposition of accumulated deficit.

(5) Any corporation applicable under paragraph (1) subparagraph 2 shall prepare the documents provided under paragraph (2) subparagraph l items a through c after its incorporation and file them with the FSC without delay.

§5. Matters to be Reported

(1) A registered corporation shall, if applicable under any one of the following subparagraph, report the corresponding information to the FSC in writing (including fax) within seven days from the date on which any cause for the reporting occurs.

1. When the business title, location of its head office, or business purposes are changed;

2. When notes or checks issued are dishonored, or transactions with banks are suspended or prohibited, or transactions therewith are reopened;

3. When an application for commencement, completion or cancellation of company reorganization procedures is filed under the Company Reorganization Act (including composition by the Composition Act; the same hereinafter), or when a decision of thereof is notified by the court;

4. When all or part of its major business activities are suspended;

5. When its board of directors has resolved on merger, or assignment, assumption, or division of all or important part of the business operation;

6. When its board of directors has resolved the increase or decrease of its capital;

7. When a cause for dissolution under Article 517 of the Commercial Act or under any other enactments occurs; and

8. When other incidents that may significantly affect the corporate management occur.

(2) A registered corporation shall, when there is a change in its registration purposes, report thereon to the FSC in writing (including fax), without delay.

§6. Filing of Account Settlement Documents

(1) A registered corporation shall file with the FSC the documents concerning its account settlements under Article 4 paragraph (4) within 90 days from the closing date of each fiscal year. However, this shall not apply to the corporations which file annual reports pursuant to Article 186-2 of the Act (hereinafter, "annual report").

(2) Any registered corporations, the number of shareholders in whose shareholders' list and beneficial owners' list exceeds 300, when filing the settlement documents under paragraph (1), shall attach thereto the shareholders' status table as prescribed by the Governor of the Financial Supervisory Service (hereinafter, "the Governor").

§7. Revocation of Registration

When any registered corporation falls under any of the following subparagraph, the FSC may revoke the registration:

1. When the registration purposes are achieved (or extinguished) due to listing or registration of stocks with the Korea Securities Dealers' Association (KSDA) (corresponding to the registration pursuant to Article 172 paragraph (2) of the Act; hereinafter as such), or merger with a listed or registered corporation;

2. When a registered corporation requests revocation of its registration. However, this provision shall not apply to cases where the FSC deems that such revocation is improper because the corporation is obliged yet to file its annual report, etc.; or

3. When the FSC deems that the existence of such corporation as a registered one is improper because of such reasons as insolvency, commencement of corporate reorganization procedures, or failure to file with the FSC the documents concerning its account settlements pursuant to Article 6 without any justifiable reason.

§8. Copies of Registration Application, etc. and Disclosure

(1) Registration application and documents attached thereto, reporting documents under Article 5, and documents related to account settlements as under Article 6 shall be filed with the FSC in two copies each.

(2) The documents stated under paragraph (1) shall be disclosed for a period specified as follows:

1. Registration application and documents attached thereto: from the registration date to one year after the revocation date;

2. Reporting documents under Article 5: one year from the receipt date;

3. Documents concerning account settlements as under Article 6: two years from the receipt date.

§9. Delegation of Authority

The receipt and disposal of the documents filed with the FSC, such as registration applications, reporting documents, and documents concerning account settlements as under Article 4 paragraphs (1), (3) and (5), Article 5, and Article 6 paragraph (1), as well as the revocation of registration under Article 7 shall be delegated to the Governor.

CHAPTER III.

REGISTRATION OF SECURITIES ISSUANCE

§10. Applicability

The purpose of the provisions of this Chapter is to prescribe the matters to be determined by the FSC in relation to the securities registration statement under Chapter III of the Act (hereinafter, "registration statement" in this Chapter) and acceptance thereof, and the matters necessary for conducting securities underwriting business, etc. by securities companies and parties engaging in the business provided under Article 2 paragraph (8) subparagraphs 5 through 7 of the Act (hereinafter, "securities company, etc.") pursuant to Article 54 of the Act and Article 37 paragraph (5) of the Decree.

§11. Parties Excluded from Those Subject to Solicitation for Offer

The parties to be determined by the FSC pursuant to Article 2-4 paragraph (3) subparagraph 7 of the Decree shall be those falling under one of the following subparagraphs:

1. Any company which directly uses the finished goods of an issuer (excluding companies in the process of incorporation) as raw materials, or which directly supplies its finished goods to an issuer (excluding companies in the process of incorporation) for raw materials, and officers of the company;

2. Any person who specializes in sale of the products of an issuer (excluding companies in the process of incorporation) under an agent agreement, etc. with the issuer, and officers of the person;

3. In the event an issuer is a company (including companies in the process of incorporation) to which members of an organization, such as an association, jointly make equity investments for the purposes of engaging in public business, such as journalism, academic affairs, research, etc.

4. In the event an issuer is a company (including companies in the process of incorporation) to which members of a specific regional organization, such as a local chamber of commerce and industry, merchant organizations, farmers' and fishermen's organizations, etc. jointly make equity investments, for the purposes of engaging in cooperative projects such as treatment of local industrial waste, provision of financial and insurance service, and production, processing, sale, etc. of agricultural-fishery-livestock products.

5. In the event an issuer is a company (including companies in the process of incorporation) to which members of a group or an organization such as alumni, clans, etc. jointly make equity investments by collective will of all members for the purposes of engaging in joint business.

6. New technology finance companies under the Credit-Specialized Financial Business Act, small business venture capital companies under the Act on Establishment Support for Small and Medium Enterprises, accounting corporations under the Certified Public Accountant Act, and credit ratings agencies;

7. Any person who holds a certified qualification, with which he may be well informed of the financial condition or business prospect of an issuer; and

8. Any other persons equivalent to those under subparagraphs 1 through 7, who are adjudged by the Governor to be well informed of the financial condition or business prospect of an issuer.

§12. Criteria of Transferability Based on Public Offering

(1) Securities which fall under any one of the following subparagraphs shall be deemed transferable, in accordance with Article 2-4 paragraph (4) of the Decree, to at least 50 persons within one year from the issuance date. However, this provision shall not apply to cases where an issuer makes deposition of such securities at the Korea Securities Depository(KSD) (including the registration under the Public and Corporate Bond Registration Act; hereinafter as such in this Chapter) immediately after the issuance, and enters into an agreement with the KSD to the effect that such securities will not be withdrawn or sold within one year therefrom, which the issuer consequently executes in full, or (ii) measures have been taken lest the stocks, which are acquired by the Government or the Korea Depositor Protection Corporation(KDIC) through equity investment into insolvent financial institutions pursuant to Article 12 paragraph (1) of the Act on Structural Improvement of Financial Industry (hereinafter, "the Restructuring Act"), will not be transferred to more than 50 persons within one year from the acquisition date. <Amended August 1, 2001> :

1. In the event of stock certificates or subscription warrants, cases where the same types of stock certificates or subscription warrants are listed, registered (with the KSDA), publicly offered, or distributed in the secondary market. Stock certificates or subscription warrants, in this case, issued by a company established due to division or merger after division (excluding the case of spin-off division pursuant to Article 530-l2 of the Commercial Act) shall be deemed of the same type(s) with those issued by the company divided;

2. In the event of convertible bonds, bonds with warrants, or exchangeable bonds, cases applicable under any one of the following items:

a. When stock certificates subject to conversion-, preemptive-, or exchange -right fall under subparagraph 1. However, this provision shall not apply to convertible bonds, bonds with warrants, and exchangeable bonds which are issued by a listed corporation or a registered corporation (hereinafter, "Stock-listed corporation, etc."), or by a corporation which has previously offered publicly or distributed stock certificates, and on the faces of which bonds are stated such conditions as prohibiting the exercise of the conversion right (preemptive right or exchange right, in cases of bonds with warrant or exchangeable bonds, respectively) for more than a year from the issuance date;

b. In the case of non-bearer corporate bonds or subscription warrants, cases where no statement to the effect that the transfer should be collectively made only to one person for one year from the issuance is inscribed on the faces of the certificates. However, this provision shall not apply to cases where the number of such certificates is less than 50 and special provisions prohibiting face value split within one year from the issuance are stated on the certificates; or

c. In the case of bearer corporate bonds or subscription warrants, cases where the number of such certificates is more than 50, or, if the number is less than 50, where no special provisions prohibiting face value split within one year from the issuance is stated on the certificate.

3. In the event of corporate bonds other than those prescribed under subparagraph 2 , cases where such bond certificates fall under subparagraph 2 item b or c; or

4. In the event of commercial papers designated by the Ministry of Finance and Economy from among those issued for fund-raising by an enterprise pursuant to Article 2-3 subparagraph 4 of the Decree, cases where the number of such certificates is more than 50.

5. Where securities under Article 2-3 subparagraph 6 of the Decree (hereinafter, "equity covered warrants") or securities under Article 2-3 subparagraph 7 of the Decree (hereinafter, "equity linked securities") are applicable under subparagraph 2 item b or c. <Added March 19, 2003>

(2) When any event applicable under the following subparagraphs occurs with respect to the securities deposited pursuant to paragraph (1), the Korea Securities Depository (KSD) may allow the withdrawal of such securities upon application of the issuer. The KSD, in this case, shall have the issuer redeposit the securities withdrawn or the securities exchanged or converted, immediately after the completion of the event:

1. When exchanging into the uniform securities certificates;

2. When exercising of conversion-, preemptive-, or exchange right of convertible bonds, bonds with warrant or exchangeable bonds (excluding those issued by listed corporations, etc.) by bondholders;

3. When exchanging with new stock certificates, etc. received from the merged corporation following any merger (including a merger after division) or division of a company;

4. When exchanging with new stocks following any stock split or reverse split; and

5. Other events equivalent to the above mentioned as recognized by the Governor.

§13. Evaluation of Directly Offered Stocks

(1) In case any corporation which is not a listed corporation, etc. (including corporations in the process of incorporation; hereinafter, "unlisted corporation" in this Chapter) publicly offers or distributes its stocks without underwriters involved (excluding public offerings in small amount pursuant to Article 27; hereinafter, "direct offering"), the appropriateness of the offering price or selling price shall be evaluated by a securities analysis institution (hereinafter, "analysis institution").

(2) In case of incorporation by subscription as applicable under any one of the following subparagraphs, the evaluation by an analysis institution may be waived:

1. When the corporation has obtained preliminary authorization for incorporation of a banking institution from the FSC under the Banking Act;

2. When the corporation has obtained preliminary authorization for incorporation of a financial holding company from the FSC under the Financial Holding Company Act;

3. When a considerable portion of the stocks to be issued at the time of incorporation (corresponding to the acquisition of more than 25/100 of the total equity at the time of incorporation as the largest shareholder under Article 2-4 paragraph (3) subparagraph 1 of the Decree) is scheduled to be subscribed by the Government or local governments;

4. When authorization or permission of business has been obtained from the Government pursuant to the provisions of special enactments; or

5. When the Governor deems that the incorporation is necessary for the development of national economy in light of its business contents.

(3) In the event any securities company under Article 84-27 paragraph (5) of the Decree sells its stocks by the method of intermediation of trading of the stocks other than those issued by listed corporations, etc., outside the securities market under Article 2 paragraph (12) of the Act (hereinafter, "the securities market") or the KOSDAQ market under Article 2 paragraph (14) of the Act (hereinafter, "the KOSDAQ market") (hereinafter, "the OTC Bulletin Board Service" or "OTCBB"), an analysis institution may replace the valuation of appropriateness of the selling price under paragraph (1) with the valuation of such stocks (hereinafter, "stock valuation"). <Amended August 1, 2001>

(4) Analysis institutions shall be designated by the Governor,

(5) [Deleted August 1, 2002]

§14. Restriction on Valuation by Analysis Institutions

(1) An analysis institution may not conduct the valuation under Article 13, when it has a relationship applicable under any of the following subparagraphs with the corporation which intends to make direct offering of stocks (hereinafter, "direct offering corporation" in this article):

1. When the investment made by the analysis institution in the direct offering corporation amounts to at least 3/100 of the capital stock, or visa versa;

2. When a shareholder investing in at least 5/100 of the analysis institution and a shareholder investing in at least 5/100 of the direct offering corporation is a single person or are persons in special relationship as under Article 10-3 paragraph (2) of the Decree (hereinafter, "persons in a special relationship"). This shall not, however, apply to cases where the single person is an institutional investor under Article 17 paragraph (1) of the Enforcement Decree of the Corporate Income Tax Act, and if the relationship between the analysis institution and the direct offering corporation is not applicable under subparagraph 5;

3. When an executive officer of the analysis institution invests in at least 1/100 of the capital stock of the direct offering corporation, or when an executive officer of the direct offering corporation invests in at least 1/100 of the capital stock of analysis institution;

4. When an executive officer of the analysis institution or the direct offering corporation is a person in a special relationship with the principal shareholders (corresponding to the principal shareholders as under Article 188 paragraph (1) of the Act; hereinafter as such) of the direct offering corporation or the analysis institution; or

5. When the single person exercises actual influence on key managerial matters of the analysis institution and the direct offering corporation, such as appointment or dismissal of their executive officers.

(2) Executive officers and employees of an analysis institution shall neither divulge information obtained in relation to valuation nor utilize it for other purposes.

§15. Sanctions for False Valuation, Etc.

Where an analyzing institution does not exercise proper duty of care necessary to ensure fair valuation, or makes false or misleading expression of any kind regarding facts of importance in valuation, or where any officer or employee of the institution discloses confidential information obtained in connection with valuation or used such information for any other purposes than the business concerned, the Governor may restrict the stock valuation business carried out by the institution for a specified period.

§16. Institutions for Deposit of Subscription Margin in Direct Offerings

(1) An unlisted corporation shall, when directly offering its stocks, designate securities companies or banks as the institutions for deposit of subscription margin.

(2) An unlisted corporation shall, when it makes a public notice of subscription to direct offering stocks, clearly state the following matters:

1. Evaluation opinion of an analysis institution (excluding the exemptions under Article 13 paragraph (2));

2. That the stocks may be either unregistered or unlisted, and that, in which case, the cash convertibility may be restricted;

3. That registration statement is not effective if direct offering becomes ineffective;

4. That part of the information in the public notice on subscription may be changed before the subscription date; and

5. Other matters deemed necessary for the protection of investors.

§17. Contents of Registration Statement

(1) Evaluation opinions of an analyzing institution, if any, shall be stated in addition to the outline of public offering or secondary distribution under Article 5-4 paragraph (2) subparagraph 1 of the Decree.

(2) The information concerning an issuer under Article 5-4 paragraph (2) subparagraph 2 of the Decree shall be as follows:

1. In case of public offering or secondary distribution of stocks by an existing corporation:

a. Outline of the company;

b. Business contents;

c. Financial information;

d. Auditors' opinions, etc;

e. Corporate governance and status of affiliate companies;

f. Matters concerning stocks;

g. Matters concerning officers and employees;

h. Transactions with parties of interest;

i. Supplementary schedules; and

j. Other matters necessary for the protection of investors.

2. In case of public offering by a corporation in the process of incorporation:

a. Business purpose;

b. Business plan;

c. Post-incorporation corporate governance and status of affiliate companies expected;

d. Post-incorporation issues or matters on stocks expected;

e. Promoters;

f. Plans of appointment of officers and recruitment of employees; and

g. Other matters necessary for the protection of investors.

3. In case of public offering or secondary distribution of guaranteed bonds (corresponding to the guaranteed bonds under Article 3 paragraph (1) of the Decree; hereinafter as such): subparagraph 1 items a through c, and j

4. In case of public offering or secondary distribution of secured bonds (corresponding to the corporate bonds under the Secured Bond Trust Act) : subparagraph 1 items a through d, and j.

5. In case of public offering or secondary distribution of non- guaranteed bonds (corresponding to the corporate bonds other than guaranteed bonds and secured bonds) : subparagraph 1 items a through j.

6. Where equity covered warrants or equity linked securities are offered or sold. <Added March 19, 2003>

Subparagraph 1 items a through d, and item j

(3) Information required in the registration statement to be filed by a special purpose company (corresponding to the special purpose company, etc. prescribed under Article 3 of the Act on Asset Securitization; hereinafter as such) for the public offering or secondary distribution of asset-backed securities (corresponding to the asset-backed securities prescribed under Article 2 subparagraph 4 of the Act on Asset Securitization; hereinafter as such) shall be as follows:

1. Outline of the public offering or secondary distribution :

a. Guidelines for the public offering or secondary distribution;

b. Purported usage of the funds;

c. Underwriter's opinion on the securities concerned, if any; and

d. Other matters necessary for the protection of investors.

2. Information on the issuer:

a. Outline of the company;

b. Company executive officers; and

c. Matters on business entrustment.

3. Information on asset holders:

a. Outline of asset holders;

b. Business contents;

c. Financial information; and

d. Officers and employees.

4. Information on securitized assets:

a. Details of securitized assets by type;

b. Details of evaluation on securitized assets; and

c. Method of assignment of securitized assets and detailed schedule thereof.

5. Information on asset securitization plan :

a. Details of asset securitization plan;

b. Schedules of issuance and redemption of asset-backed securities;

c. Asset administrator and method of asset administration; and

d. Borrowing of funds and operation schedules.

6. Other information necessary for the protection of investors.

(4) Article 21 of the Regulation on Asset Securitization Business shall apply mutatis mutandis to the preparation of the registration statement of special purpose companies pursuant to paragraph (3).

§18. Information Required in Shelf Registration Statement and in Supplementary Documents

(1) The information prescribed under Article 17 paragraph (2) subparagraph 1 items d to i shall be stated additionally in the shelf registration statement under Article 5-5 paragraph (1) of the Decree.

(2) The information required in documents supplementary to shelf registration statement pursuant to Article 5-8 paragraph (2) of the Decree (hereinafter "supplementary documents" in this chapter) shall be as follows:

1. In case of public offering or secondary distribution of guaranteed bonds or secured bonds:

a. Outline of the public offering or secondary distribution;

b. The projected period and amount of issuance as stated in the shelf registration statement;

c. Record of public offering or distribution during the projected period;

d. Other necessary matters for the protection of investors.

2. In case of public offering or secondary distribution of non- guaranteed bonds:

a. Subparagraph l items a to d; and

b. Article 17 paragraph (1) subparagraph 1 and 2.

§19. Exceptions to Information Required in Registration Statement

(1) In the event of filing a registration statement for rights offering before the issuing price is determined, the following information may be omitted in the registration statement, in which case it shall be provided within the registration statement that the information unmentioned will be reported afterwards when the calculation method or underwriters are determined:

1. Issuing price;

2. Subscription margin;

3. Number of underwriting stocks;

4. Terms of underwriting; and

5. Underwriters (excluding the lead manager).

6. Number of stocks to be issued (limited to new shares issued in exchange for tender offers pursuant to the proviso of Article 11-4 paragraph (3) subparagraph 5 of the Decree)

(2) When issuing convertible bonds, bonds with warrant, or exchangeable bonds, the registration statement may be filed before determining the conversion price, warrant exercise price, or exchange price (hereinafter, "conversion price, etc. ") without any specification thereof. However, the registration statement may be filed by specifying that the conversion price. shall be the price whichever is higher between conversion price. specified in the registration statement and those calculated based on the price as of the date three trading days prior to the subscription date.

(3) In issuing corporate bonds, if necessary, the registration statement may be filed which contains only the method of calculation or determination of issuing price with respect to the issuing price and the interest rate.

(4) In the case of paragraphs (1) through (3), when an issuing price or underwriters are determined, an amended registration statement pursuant to Article 22 shall be filed. In this case, such filing shall not influence the effective date of the registration statement already filed.

§20. Documents Attached to Registration Statement, etc.

(1) The documents to be attached to any registration statement under Article 5-4 paragraph (3) of the Decree shall be as follows: <Amended August 1, 2001; October 31, 2001; March 19, 2003>

1. In the case of public offering or secondary distribution of stocks by an existing corporation :

a. The articles of incorporation;

b. A certified copy of the company register;

c. Documents certifying that all promoters have agreed upon the issuance of such stocks, or a copy of the minutes on the resolution of the board of directors' or the shareholders' meeting authorizing the issuance;

d. In case it is necessary to obtain the permission, authorization, or approval for the issuance of such securities from administrative authorities, a copy of documents certifying such permission, authorization, or approval;

e. In case an underwriting agreement of such securities is entered, a copy of such agreement;

f. Auditor's audit report;

g. Auditor's audit report on consolidated financial statements (including consolidated financial statements, except when there is no obligation to prepare consolidated financial statements; hereinafter as such);

h. Semi-annual audit report or semi-annual review report, in cases where a corporation filing semi-annual report pursuant to Article 186-3 of the Act (hereinafter "corporation filing semi-annual report") submits a registration statement after the semi-annual financial statements of the corporation are settled, or where six months have elapsed from the commencement date of the fiscal year, in which lies the date to file the registration statement of public offering for listing stocks in the securities market or for registration with the KSDA;

i. Quarterly audit report or quarterly review report, in cases where the financial institutions, listed corporations or registered corporations stipulated under Article 83-3 paragraph (6) subparagraph 2 of the Decree (hereinafter, "corporation filing quarterly review report, etc.") file registration statements after their quarterly financial statements are settled;

j. When an unlisted corporation makes direct offering of its stocks, the evaluation opinion of the analysis institution and the shareholders' list; and

k. In the case of an unlisted corporation, the shareholders' list.

l. Where a real estate investment trust company (such as to include corporate restructuring real estate investment trust company; hereinafter, "real estate investment trust company") under the Real Estate Investment Trust Act makes a contract under which asset investment and management are consigned (hereinafter, "business consignment agreement"), business consignment agreement

2. In the case of public offering or secondary distribution of stocks by a corporation in the process of incorporation :

a. Subparagraph 1 items a and c through e;

b. Business plan;

c. Curriculum vitae of all promoters;

d. In case a corporation is a promoter, the documents describing its business outlines, history, etc. and its financial statements of the latest fiscal year; and

e. Evaluation opinion of an analysis institution (excluding the exemptions pursuant to Article 13 paragraph (2).

f. Where a real estate investment trust company has made a business consignment agreement, business consignment agreement

3. In the case of public offering or secondary distribution of guaranteed bonds :

a. Subparagraph 1 items a through e;

b. Subparagraph 5 items b and e; and

c. A copy of the agreement on payment guarantee.

4. In the case of public offering or secondary distribution of secured bonds:

a. Subparagraph 1 items a through f;

b. Subparagraph 5 items b and e; and

c. A copy of the trust certificate.

5. In the case of public offering or secondary distribution of non-guaranteed bonds :

a. Subparagraph 1 items a through I;

b. In case an agent agreement for the payment of principal and interest is entered, a copy of such an agreement;

c. In case an entrustment agreement for public offering is entered, a copy of such an agreement;

d. In case credit rating has been conducted of non-guaranteed bonds by an institution permitted to conduct credit rating of non guaranteed bonds pursuant to the provisions of the Act on the Utilization and Protection of Credit Information (hereinafter "credit rating agency"), a copy of the credit rating report; and

e. In case a securities trust agreement is entered, a copy of such an agreement.

6. Where equity covered warrants or equity linked securities are offered or sold. <Added March 19, 2003>

a. Subparagraph 1 items a through I

b. Preliminary review results documents under Article 5-4 paragraph (3) subparagraph 5 of the Decree, for listing equity covered warrants in the securities market

(2) The provisions of paragraph (1) subparagraph 3, 4 and 5 shall apply mutatis mutandis to documents attached to supplementary documents. However, if the documents stipulated under paragraph (1) subparagraph 1 items a, b, f, or g through i are identical to the documents attached to shelf registration statement or the supplementary documents, they may be exempted from attachment.

(3) The documents to be attached to the registration statement for the public offering or secondary distribution of asset-backed securities by a special purpose company, etc. shall be as follows:

1. Paragraph (1) subparagraph 1 items a through g;

2. Paragraph (1) subparagraph 5 items b through e;

3. Documents of an entrustment agreement for asset management; and

4. Business entrustment agreement documents.

(4) Article 21 of the Regulation on Asset Securitization Business shall apply mutatis mutandis to the documents to be attached to the registration statement to be filed by an special purpose company.

§21. Omission of Information, etc. Required in Registration Statement

An issuer may omit information required in the registration statement or its attached documents in accordance with the methods applicable under any of the following subparagraphs:

1. Methods prescribed under Article 8 paragraph (3) of the Act;

2. Filing a document making references to specific parts corresponding in the annual reports, semi-annual reports under Article 186-3 of the Act (hereinafter, "semiannual report") or quarterly reports under Article 186-3 of the Act (hereinafter, "quarterly report"), or documents attached thereto, which have been already filed; or

3. Filing a document making references to specific parts corresponding in the registration documents under Article 4 of the Act, or documents attached thereto.

§22. Amended Registration Statements, etc.

(1) In an amended registration statement as prescribed under Article 11 of the Act, the following information shall be included:

1. Causes for filing such amended registration statement; and

2. Contents of amendments.

(2) In the case of filing the amended registration statement under paragraph (1), a document certifying the causes for such amendments, if any, shall be attached thereto.

§23. Exceptions to Effective Date

An effective date separately stipulated by the FSC pursuant to Article 3 paragraph (3) of the Enforcement Regulation shall be as follows:

1. Amended shelf registration statement shall be effective after three days lapse from the date of receipt. However, if such amendments are filed within two days from the date of receipt of shelf registration, it shall become effective when the shelf registration becomes effective;

2. In case any corporation which has filed its annual reports, semiannual reports, quarterly reports or registration statements files a registration statement containing information on the issuer as under Article 17 paragraph (2) which is identical to the information in the annual reports, semiannual reports, quarterly reports or registration statements submitted, (i) the registration statement for issuance of non-guaranteed bonds shall become effective after the lapse of five days from the date of its receipt, and (ii) the registration statement for issuance of either guaranteed bonds or secured bonds shall become effective after the lapse of three days its receipt. However, holidays under Article 2 of the Regulation on Government and Public Office Holidays shall not be added to such periods;

3. In case any person who has filed a registration statement for issuance of corporate bonds files an amended registration statement to modify the issuing price or interest rate following changes in the bond yields, such amendments shall become effective on the following day of the acceptance date of such amendments. If, however, such amendments are accepted prior to the lapse of the period under subparagraph 2 or Article 3 paragraph (1) subparagraph 3 of the Enforcement Regulation and become effective, they shall become effective when the original registration statement becomes effective;

4. In case any person who has filed a registration statement files an amended registration statement for correction of insignificant matters which may not materially influence the investment decisions of investors, such as a simple correction of expression, it shall not alter the effective date of the registration statement.

5. 7 days for the equity linked securities offered or sold, whose minimum payment schedule at the maturity is set at or above the issuing price <Added March 19, 2003>

6. In the event a person submits a correction statement to change determinative formula for the payment of the equity linked securities due to developments in the market, after having submitted a registration statement to offer or sell the equity linked securities, the correction statement submitted shall be effective after 3 days from the submission. Holidays referred to in the proviso of subparagraph 2, however, shall not be accounted for in the effective term calculation. In the event a correction statement is submitted and becomes effective prior to the term under subparagraph 5 or Article 3 paragraph (1) subparagraph 4 of the Rules is elapsed, its effectiveness shall be dated as of when the initial registration statement enters into force. <Added March 19, 2003>

§24. Acceptance Notice, etc.

(1) The FSC shall, when it accepts a registration statement, notify the registrant issuer of such fact in writing. However this provision shall not apply to cases where the FSC accepts amended registration statements pursuant to Article 19 paragraph (4).

(2) A registration statement shall be deemed to have been accepted on the day of receipt, if the FSC accepts it.

§25. Complement of Prospectus

Any issuer filing a registration statement pursuant to Article 19 paragraph (4) shall, when any undecided matters are specifically settled, immediately add such matters to its prospectus (including simplified prospectus).

§26. Information Required in Simplified Prospectus

(1) The information to be stated or indicated in a simplified prospectus for the protection of investors pursuant to Article 7-3 paragraph (1) subparagraph 1 item d and subparagraph 2 item b of the Decree shall be as follows:

1. Purported usage of fund;

2. Total amount of offering value or distribution value;

3. Matters on underwriting;

4. Business purpose of the company;

5. Summary financial information; and

6. Matters demanding attention for investors.

(2) The detailed provisions, such as scope of description, preparation method, etc, with respect to the matters mentioned in paragraph (1) shall be determined by the Governor.

§27. Public Offering or Secondary Distribution without Filing Registration Statement

(1) The documents to be filed in advance with the FSC pursuant to Article 9-2 paragraph (1) subparagraph 1 of the Decree by any person issuing securities through public offering or secondary distribution without filing a registration statement pursuant to Article 18-2 of the Act (hereinafter, 'small-size public offering') shall be as follows:

1. In the case of a corporation whose first business year has elapsed since its incorporation, Auditor's audit report for the latest business year (including semiannual review report, in case where the semiannual account settlement date is past due after the lapse of the latest business year) or Auditor's audit report as of the end of the latest month; and

2. In the case of a corporation whose first business year has not elapsed since its incorporation, Auditor's audit report as of the end of the latest month.

(2) The document mentioned in paragraph (1) shall be filed at latest three days prior to the date of commencing small-size public offering.

(3) The following information shall be stated in documents to be filed with the FSC by any issuer when in completion of public offering or secondary distribution pursuant to Article 9-2 paragraph (1) subparagraph 4 of the Decree:

1. Name and address of the issuer;

2. Name of manager(s), if any;

3. Matters on subscription and allotment;

4. Dates of delivery and listing of securities, and of registration of capital increase;

5. Changes in the share holdings of principal shareholders before and after rights offering; and

6. Details on the usage of the funds raised.

(4) The Governor shall determine specific details of information to be stated or indicated with respect to the matters stipulated under Article 9-2 paragraph (1) subparagraph 2 of the Decree, detailed description of the documents to be filed pursuant to Article 9-2 paragraph (1) subparagraph 3 of the Decree, and specific scope of description, methods, etc. for the matters under paragraph (3).

§28. Exceptions to Small-size Secondary Distribution Using OTCBB

(1) The method to be stipulated by the FSC as referred to under Article 9-2 paragraph (3) subparagraph 3 of the Decree corresponds to the disclosure by an issuer through filing the following documents with the FSC and the KSDA at latest three days prior to the date of distribution:

1. Documents which state only information on the issuer, from among the information stated or indicated in printed matters which are filed with the FSC pursuant to Article 9-2 paragraph (1) subparagraph 3 of the Decree; and

2. Documents prescribed under Article 27 paragraph (1).

(2) In case a corporation filing annual business report has already disclosed its annual business report upon filing with the FSC as of three days prior to the date of distribution, the obligation of disclosure under paragraph (1) shall be exempted.

(3) An issuer shall submit the documents prescribed under paragraph (1) subparagraph 1 every business year and every half year with due correction made of any changes thereto. Filing deadlines in this case shall be within 90 days after the lapse of a business year, and within 45 days after the lapse of a half year period, respectively, with CPA audit report or semiannual review report attached thereto respectively.

(4) The detailed contents and methods of description for the documents under paragraph (1) subparagraph 1 shall be determined by the Governor.

§29. Securities Issuance Report

(1) An issuer shall submit a securities issuance report to the FSC without any delay when public offering or secondary distribution is completed [for an over-allotment option contract (referring to the right to acquire excess shares at a pre determined price from the issuing company, provided that shares exceeding those initially intended for public offering will be allocated to subscribers) concluded with an acquiring company, when stock issuance following the exercise of the option is completed, or when new shares are not issued because the term for exercising option has expired], pursuant to the provisions of Article 17 of the Act. An issuer whose shelf registration statement has become effective, however, shall submit to the FSC its securities issuance report by filing supplementary documents as soon as public offering or secondary distribution is completed.

(2) The following information shall be stated in securities issuance report:

1. Name and address of the issuer;

2. Name of the company manager;

3. Matters on subscription and allotment;

4. Matters on compliance with disclosure requirements;

5. Date of delivery and listing of securities, and date of registration of capital Increase;

6. Changes in share holdings of principal shareholders before and after rights offering;

7. Details on issuance of bonds with warrant;

8. Details on disposition of stocks not subscribed by shareholders; and

9. Details on the usage of raised funds.

§30. Restriction on Underwriting Business by Institutions Concurrently Engaging in Securities Business

An institution concurrently engaging in securities business, which has obtained permission for the business(es) under Article 28 paragraph (2) subparagraph 3 of the Act, may conduct only securities (except stocks) underwriting business in relation to the permission. If such an institution is a banking institution incorporated under the Banking Act, however, it may conduct only the underwriting of government and municipality bonds (corresponding to the bonds prescribed under Article 2 paragraph (1) subparagraph 1 through 3 of the Act).

§31. Market Making

(1) The following information shall be stated in a notice of market making under Article 83-11 paragraph (2) of the Decree:

1. Business title of a securities company in charge of market making;

2. If in joint market making with other securities company, its business title;

3. Types of securities subject to market making;

4. Date and time to initiate market making;

5. Market making period; and

6. Name of the securities market or the KOSDAQ market in which the market making will take place.

(2) The following information shall be stated in any market making report under Article 83-13 of the Decree:

1. Types of securities subjected to market making;

2. Transaction details; and

3. Business title of the market making company.

(3) Any securities company which conducts market making pursuant to Article 83-8 of the Decree shall file with the FSC and Korea Stock Exchange (KSDA, in the case of public offering for the registration with KSDA) notice of market making and market making report in two copies each, in such formats as determined by the Governor.

(4) The FSC, Korea Stock Exchange (hereinafter, KSE) or KSDA shall make available for public knowledge notices of market making for one month from the receipt date, and market making reports for one month from one day after the date of market making expiration.

§32. Stabilization

(1) If a securities company concludes a contract with an issuer on stabilization pursuant to Article 83-8 of the Decree, it may initiate the stabilization from the next day after issuing price is determined.

(2) The following information shall be stated in a notice of stabilization pursuant to Article 83-11 paragraph (1) of the Decree:

1. Business title of any securities company in charge of stabilization;

2. If in joint stabilization with another securities company, its business title;

3. Types of securities subject to stabilization, and contracted prices;

4. Date and time to initiate stabilization;

5. Stabilization period;

6. Types of securities whose public offering or secondary distribution is purported to be facilitated through stabilization, the offering or distribution price, and total value offered or distributed; and

7. Name of the securities market or of the KOSDAQ market in which the stabilization has taken place.

(3) Article 31 paragraphs (2) through (4) shall apply mutatis mutandis to stabilization. Notice of market making and market making report, in this case, shall be construed as notice of stabilization and stabilization report, respectively,

§33. Number of Copies of Registration Statement to be Filed, etc. and Disclosure

(1) An issuers, etc. shall file with the FSC two copies each of registration statement, shelf registration statement, supplementary document, amended registration statement, withdrawal statement, securities issuance report, and notice document under Articles 27 and 28, and one copy each of prospectus, preliminary prospectus and simplified prospectus; likewise for documents to be attached thereto.

(2) The FSC shall disclose documents filed pursuant to paragraph (1) for two years from the receipt date. Prospectus (including simplified prospectus), however, shall be disclosed from its receipt date to the date of receiving securities issuance report; registration statement (including amended registration statement, shelf registration statement, supplementary document, and withdrawal statement) shall be disclosed from the date of decision to accept the statements to the date on which two years lapse since acceptance of securities issuance report.

§34. Administrative Actions by the FSC

(1) In the event of any failure to submit registration statement or securities issuance report, or false statement or omission of material matters in the information required in registration statement or securities Issuance report, or violation of Article 12 or 13 of the Act with respect to prospectus (including preliminary prospectus and simplified prospectus), or violation of Article 18-2, or any violation of the Act, the Decree, the Enforcement Regulation, provisions of this chapter, or orders issued by the FSC by a person filing securities registration statement, an issuer or an underwriter of securities, or other persons related thereto, the FSC may take the following administrative actions against such persons:

1. Public notice of such fact, and correction order;

2. Suspension or prohibition of the public offering or secondary distribution in question;

3. Restriction on issuance of securities;

4. Recommendation on dismissal of officers;

5. Public announcement on the actions taken as a result of violation of the Act <Amended March 19, 2003>

6. Request for submission of a memorandum;

7. Filing of complaint or notice to investigation authorities for any violation of the Act;

8. Warning or attention;

9. Imposition of penalties; or

10. Imposition of negligence fine.

(2) When the predictive information prescribed under Article 8 paragraph (2) of the Act is stated or indicated in such a manner as applicable under each subparagraph of Article 14 paragraph (2) of the Act, the FSC shall not take any of the administrative actions under paragraph (1).

§35. Delegation of Authority

The FSC shall delegate its authority to the Governor on the following matters:

1. Receipt, acceptance, rejection, notice of acceptance, and disclosure of registration statements, shelf registration statements, supplementary documents, amended registration statements, securities issuance reports, withdrawal statements, prospectus, preliminary prospectus, simplified prospectus, and the documents under Article 27 and 28;

2. Issuance of order to submit additional reports or materials for reference against persons filing registration statements, issuers and underwriters of securities, and other related persons, and investigation of the books, documents and other things thus submitted;

3. Taking actions under Article 34 paragraph (1) subparagraph 1, 6 and 8; or

4. Receipt and disposition of notices of market making, market making reports, notices of stabilization, and stabilization reports under Articles 31 and 32.

CHAPTER IV.

NOTIFICATION OF SECURITIES ISSUANCE BY

FOREIGN CORPORATIONS, ETC.

Section 1.

General Provisions

§36. Applicability

The purpose of the provisions of this chapter is to prescribe the matters necessary for the issuance, etc., of securities by foreign corporations, etc. in accordance with Articles 4, 8, 12, 17, 54 and 203 of the Act, Article 83-4 of the Decree, and Article 3 of the Enforcement Regulation.

§37. Definitions

(1) "Foreign corporation," in this chapter corresponds to a foreign corporation, etc. under Article 2 paragraph (16) of the Act.

(2) "Securities" in this chapter corresponds to the instruments as follows:

1. Bonds denominated in won (hereinafter "domestic currency bonds"), the legal tender of the Republic of Korea, issued by foreign corporations,;

2. Depository receipts issued in Korea by the Korea Securities Depository (KSD), based on underlying stocks issued by foreign corporations, etc. (hereinafter "DR"); and

3. Stocks issued by foreign corporations.

(3) An "issuer" in this chapter corresponds to a foreign corporation, etc., which has issued or will issue securities (underlying stocks in case of DR).

(4) A "listed foreign corporation" in this chapter corresponds to an issuer of stocks listed in the securities market or underlying stocks for DR.

(5) A "registered foreign corporation" in this chapter corresponds to an issuer of stocks listed in the KOSDAQ market or underlying stocks for DR.

(6) A "credit ratings agency" in this chapter corresponds to a company specializing in credit rating as designated by the FSC.

(7) "Depository institution" in this chapter refers to the Korea Securities Depository.

(8) An "underlying stock" in this chapter corresponds to a stock of a foreign corporation, etc. which is represented by a DR.

(9) "Overseas sale bonds" in this chapter corresponds to domestic currency bonds sold to foreigners (the foreigners pursuant to Article 7-5 paragraph (2) subparagraph 1 of the Regulation on Supervision of Securities Business) in foreign countries.

(10) A "foreign enterprise" in this chapter corresponds to a business enterprise established under the statutes of a foreign country.

§38. Filing of Application for Registration

Any issuer intending to register pursuant to Article 3 subparagraph 2 of the Act shall file with the FSC an application for registration pursuant to Article 4 paragraph (1), along with two copies each of the following documents:

1. Articles of incorporation, or documents similar thereto (except for foreign governments and foreign municipalities);

2. Auditor's audit reports on the financial statements for the last three business years (documents corresponding to the audit report for an issuer applicable under Article 84-31 paragraph (1) subparagraph 1 or 2 of the Decree; as such hereinafter in this Chapter); and

3. Other documents necessary as adjudged by the Governor.

§39. Information Required Registration Statement

(1) The following details shall be included in a securities registration statement (hereinafter, "registration statement" in this Chapter) filed by an issuer with the FSC pursuant to Article 8 paragraph (1) of the Act:

1. When an issuer is a foreign enterprise:

a. Outline of the public offering or secondary distribution

(i) Summary of the public offering or secondary distribution;

(ii) Purported usage of fund;

(iii) Manager's opinion on the securities;

(iv) Legal review opinion of attorney; and

(v) Other information deemed necessary for investor protection.

b. Details on the issuer

(i) Outline of the company;

(ii) Company business details;

(iii) Financial condition;

(iv) Auditor's audit opinion and others;

(v) Status of affiliated companies and others;

(vi) Status of stocks;

(vii) Executive officers and employees;

(xiii) Details of transactions with parties of interest;

(ix) Supplementary schedules; and

(x) Other information deemed necessary.

2. When an issuer is a foreign corporation, but not a foreign enterprise:

a. Outline of issuance;

b. Information on the issuer;

c. Subscription or investment status by the Republic of Korea;

d. Use of issuance fund;

e. Underwriting and sales; and

f. General information,

(2) In case the KSD intends to issue DRs, an issuer shall also file with the FSC two copies of DR issuance statement as prescribed by the Governor, when filing the registration statement pursuant to paragraph (1) subparagraph 1.

§40. Documents Attached to Registration Statement

(1) The following documents shall be attached to a registration statement under Article 39 paragraph (1):

1. When an issuer is a foreign enterprise:

a. Articles of incorporation, or documents similar thereto;

b.	Auditor's audit reports for the latest three business years (Auditor's audit reports on consolidated financial statements, in cases where only consolidated financial statements are disclosed in its country; hereinafter in this Article as such);

c. Semi-annual audit report or semi-annual review report, in case a corporation filing semi-annual report submits its registration statement after having confirmed its semi-annual financial statements; (in the event its country requires disclosure of only consolidated financial statements, it refers to the audit report or review report on the consolidated financial statements for the corresponding term; as such under item d and Article 47);

d. Quarterly audit report or quarterly review report, in case a corporation filing a quarterly review report, etc. submits a registration statement after having confirmed its quarterly financial statements;

e. Credit rating report on the issuer by a credit rating agency (limited to cases of bond issuance; hereinafter as such);

f. A copy of the resolution of the board of directors which has approved the securities issuance schedules;

g. When the issuance requires permission, approval or notification pursuant to the provisions of the Foreign Exchange Transaction Act or other statutes, a copy of such permission, approval or notification;

h. A copy of underwriting agreement, depository contract, agent appointment contract and any other contracts entered into with the institution(s) related to the issuance of the securities concerned;

i. If the issuer is a listed corporation on a stock exchange in a foreign country, documents certifying such fact (required only of issuers of stocks or underlying stocks for DR); and

j. Other documents deemed necessary by the Governor.

2. When an issuer is a foreign corporation, but not a foreign enterprise:

a. Articles of incorporation, or documents similar thereto (except for foreign governments and foreign municipalities);

b. Auditor's audit reports for the latest three business years;

c. Credit ratings report on the issuer by a credit rating agency;

d. A copy of the resolution of the board of directors which has approved the issuance schedules for won-denominated bonds, or documents corresponding thereto;

e. When the issuance requires permission, approval or notification pursuant to the provisions of the Foreign Exchange Transaction Act or other relevant statutes, a copy of such permission, approval or notification;

f. A copy of underwriting contract, trust deed and other contracts entered into with institutions related to issuance of won-denominated bonds; and

g. Other documents deemed necessary by the Governor.

(2) When an issuer files registration statements more than twice in a single business year, and if the documents to be attached thereto under paragraph (1) subparagraph 1 and 2 items a through d contain the same information as those previously attached, submission of a document attesting the identity of information and making reference to the corresponding parts of previously attached documents shall suffice. <Amended August 1, 2001>

§41. Special Application of Effective Date

In case an international financial organization under Article 34-5 paragraph (1) subparagraph 2 of the Enforcement Regulation files a registration statement to issue won-denominated bonds, the registration statement shall become effective after the lapse of five days from the date of acceptance.

Section 2.

Issuance of Won-denominated Bonds

§42. Requirements for Issuer

(1) The requirements for an issuer of won-denominated bonds eligible for underwriting, etc. by securities companies, shall be as follows:

1. That the issuer shall be a foreign corporation.;

2. That the issuer shall have received credit ratings by a credit rating agency; and

3. That the issuer shall be a registered corporation pursuant to Article 3 of the Act.

(2) Won-denominated bonds shall be registered and issued pursuant to Article 174 paragraph (5) of the Act. This, however, may not apply to overseas sale bonds.

Section 3.

Methods of Producing Disclosure Document

§43. Preparing of Korean-Translated Version

In case a foreign corporation, files its annual report, semiannual report or quarterly report pursuant to Article 83-4 of the Decree (hereinafter, "annual report, etc.") along with Korean translations thereof, matters to be stated in the translations shall be the matters prescribed under Article 47 paragraphs (1) and (2).

§44. Preparing of Filing Documents

(1) Any application or notification document, etc., to be filed with or notified to the FSC or the Securities and Futures Commission (hereinafter, the SFC) by an issuer, its agent, or a securities company, etc. pursuant to the provisions of this chapter or other securities-related statutes, shall be prepared in Korean. However, such documents may be filed in English when the Governor deems it necessary.

(2) The issuer shall file with the FSC one copy of disclosure documents filed with regulatory authorities of its country and another for summary in Korean, as well as of the disclosure documents to be filed pursuant to securities-related statutes.

(3) Disclosure documents shall be, in principle, submitted in document; however, they may be filed through facsimile.

(4) The FSC shall disclose the documents filed by an issuer for a period of two years from the date of filing.

§45. Designation of the Agent of the Issuer

An issuer of securities may designate a person who is domiciled in the ROK and authorize the person to act as an agent in relation to public offering, secondary distribution, disclosure, of securities.

§46. Securities Issuance Report

(1) The following details shall be included in the securities issuance report to be filed with the FSC by an issuer pursuant to Article 17 of the Act:

1. When an issuer is a foreign enterprise:

a. Business title and address of the issuer;

b. Business title of the main underwriter;

c. Details on subscription;

d. Details on disclosure;

e. Date of listing;

f. Details on usage of raised funds; and

g. Other information deemed necessary by the Governor

2. When an issuer is a foreign corporation, but not a foreign enterprise:

a. Business title and address of the issuer;

b. Business title of the main underwriter;

c. Details on subscription;

d. Issuance schedules;

e. Details on investment road show;

f. Details on disclosure; and

g. Other information deemed necessary by the Governor.

(2) Article 29 paragraph (1) shall be applied to the time of submitting the securities issuance report.

§47. Information etc. Required in Annual Report

(1) The following details shall be stated in the annual report to be filed with the FSC by an issuer:

1. When an issuer is a foreign enterprise (excluding item i below in the case of semiannual report and quarterly report):

a. Outline of the company;

b. Business details;

c. Financial condition;

d. Auditor's opinion, etc;

e. Status of affiliated companies;

f. Details on stocks;

g. Executive officers and employees;

h. Details of transaction with parties of interest;

i. Supplementary schedules; and

j. Other information deemed necessary.

2. When an issuer is a foreign corporation, etc., but not a foreign enterprise:

a. Outline of the issuer;

b. Capital structure;

c. Business details;

d. Organizational structure;

e. Financial condition; and

f. Other information deemed necessary by the Governor.

(2) The following documents shall be attached to the annual report, etc., under paragraph (1):

1. Documents to be attached to an annual report:

a. Auditor's audit report, Auditor's audit report on consolidated financial statements, or documents similar thereto (Auditor's audit reports on consolidated financial statements, in case the disclosure of only consolidated financial statements is required by its country);

b. Letter of attorney, when an agent files an annual report;

c. Articles of incorporation, or documents similar thereto;

d. Other documents deemed necessary by the Governor.

2. Documents to be attached to a semi-annual report:

a. Auditor's semiannual audit report, or Auditor's semiannual review report;

b. Letter of attorney, when an agent files a semiannual report; and

c. Other documents deemed necessary by the Governor.

(3) Documents to be attached to a quarterly report;

a. Auditor's quarterly audit report, or Auditor's quarterly review report, for corporations filing quarterly review report,;

b. Letter of attorney, when an agent files a quarterly report; and

c. Other documents deemed necessary by the Governor.

§48. Audit Report Filing Procedures

(1) Matters to be stated in the documents accompanying an audit report filed by a foreign enterprise pursuant to Article 84-31 paragraph (2) of the Decree, shall be as follows;

1. Specific details on the difference between the accounting standards adopted by the foreign enterprise and the accounting standards used in the Republic of Korea;

2. Effect of the difference indicated under subparagraph 1 on the financial statements of the enterprise; and

3. Summary financial statements of the foreign enterprise for the last two business years prepared in comparative format in compliance with the Financial Accounting Standards under the External Audit Act.

(2) Notwithstanding the provisions of paragraph (1), if a foreign enterprise prepares financial statements in compliance with the international accounting standards developed by the International Accounting Standards Board or those recognized by the U.S. Securities and Exchange Commission as an issuer of the Won currency denominated bonds (with the exclusion of those pertinent to stocks and certificate of contribution), and has the financial statements audited pursuant to the securities statutes of the country of its origination, the requirements under paragraph (1) may be waived. <Added January 29, 2003>

§49. Matters to be Notified by the Issuer

(1) For matters not prescribed under this chapter concerning issuance of securities by a foreign corporation, etc., relevant provisions of other chapter(s) shall be applied.

(2) Any listed or registered foreign corporation shall notify without delay to the FSC if any of the following subparagraphs, subparagraphs of Article 69 paragraph (1), or Article 70 paragraph (1) applies:

1. When the statutes of the country of incorporation are amended so that they may significantly influence the shareholders or the company such as concerning restriction on stock transfer, nationalization of foreign enterprises,;

2. When a tender offer is made or when stabilization is conducted with respect to the stock of the corporation in the country wherein the corporation is incorporated (including a third country if the stocks are listed on stock exchange(s) of the third country);

3. When a disciplinary action is rendered due to violations of relevant statutes of the securities regulatory authority of a foreign country or the stock exchange where such stocks are listed, or cases where any cause has arisen for suspension of trading, release therefrom, or delisting,;

4. Substantial amendment to the articles of incorporation, any appointment involving the chief executive officer, or any change in those shareholders who hold 1% or more of the outstanding voting shares;

5. When any decision is made on the acquisition or disposition of DRs whose underlying stocks are those of the corporation; or

6. Other cases where any fact arises which may significantly influence domestic securities market and investors.

§50. Preparation of Required Information, etc.

In case an issuer is a foreign corporation, any information to be indicated in statements, corresponding formats, documents appended thereto, etc. as required under this chapter may be modified to fit special needs of the issuer.

§51. Delegation of Authority

The FSC may delegate to the Governor its authority on the matters concerning receipt, review, acceptance and disclosure of application documents for registration, registration statements, securities issuance reports, annual reports, etc., and other disclosure documents to be filed with the FSC pursuant to Articles 38 through 40, Article 43, Article 44 paragraphs (1), (2), and (4), Articles 46 through 48, and Article 49 paragraph (2).

CHAPTER V.

FINANCIAL MANAGEMENT OF LISTED CORPORATIONS

Section 1.

General Provisions

§52. Scope of Application

The purpose of this chapter is to prescribe the matters on financial management standards for listed corporations pursuant to Articles 192 and 193 of the Act and Articles 84-25 and 84-26 of the Decree.

§53. Definitions

(1) To "issue at market price" in this chapter refers to issuing new shares at a price approximate to the price of the same class of stocks traded in the KSE or the KOSDAQ market.

(2) "Shareholder-priority offering" in this Chapter refers to cases where a listed corporation. offers new shares first to its shareholders for priority subscription and then the unsubscripted shares are offered for subscription; "third-party allotment offering" refers to offering of new shares to a specified person (including shareholders of the corporation) without recognizing any preemptive right of shareholders.

(3) "Trading day" in this Chapter refers to the day on which securities are traded on the KSE or the KOSDAQ market.

Section 2.

Distribution of Dividend of Listed Corporations, etc. and

Accounting Documents

§54. Dividend Base and Advance Notice

(1) A stock-listed corporation, etc. shall distribute dividends on the basis of its financial statements adjusted after auditing by Auditors.

(2) A stock-listed corporation, etc. shall, in the case of distribution of stock dividend, notify the Governor in writing (including fax) of the projected details, via resolution of the board of directors, by fifteen days prior to the closing date of the business year.

§55. Indication of Auditor's Opinion

(1) The main stipulation of the Auditor's audit report, such as the Auditor's audit opinion, the adjusted net income (net loss) for the current period, and major adjustments resulting from the Auditor's audit, shall be indicated in the business report which a listed corporation, etc., submits to its annual general shareholders' meeting.

(2) When making a public notice of its balance sheet pursuant to Article 449 paragraph (3) of the Commercial Act, a listed corporation, shall append adjusted net income (net loss) for the current period and adjusted retained earnings (deficit) carried over from prior periods, after auditing by Auditors, along with the name of the Auditor and the auditor's opinion pursuant to Article 14 paragraph (2) of the External Audit Act.

§56. Reserve for Capital Structure Improvement

(1) A stock-listed corporation, etc. shall accumulate in every business year more than the amount in the following as reserve for capital structure improvement, until its ratio of net worth against assets reaches 30%. However, the following shall not apply when the amount to be reserved is less than 5 million won:

1. If gain (limited to extraordinary gains) on disposition of tangible assets exceeds the sum of loss (limited to extraordinary loss) on disposition of tangible assets, corporation tax (including capital gains surcharge) and resident tax: 50/100 of the amount in excess (or of the amount produced by deducting carried forward deficit from net income, if such amount is less than the amount in excess); and

2. 10/100 of the amount produced by deducting the deficit carried forward from the net income. If maintaining the dividend level of preceding business year is deemed difficult, however, then 5/100 of the amount.

(2) The reserve under paragraph (1) shall be used only in the following cases:

1. Absorption of the deficit carried over; or

2. Transfer into capital stock.

(3) Paragraphs (1) and (2) shall not apply to a listed corporation, etc. which falls under any of the subparagraphs below:

1. Banking institutions, as under the Banking Act;

2. Securities companies, as under the Securities and Exchange Act;

3. Insurance companies, as under the Insurance Business Act;

4. Long-term credit banks, as under the Long-Term Credit Bank Act;

5. Merchant banks, as under the Merchant Banking Corporation Act;

6. Mutual savings bank, as under the Mutual Savings and Banking Act;

7. Credit-specialized financial companies, as under the Credit-Specialized Financial Business Act;

8. Public corporations, as pursuant to Article 199 paragraph (2) of the Act;

9. Corporations undergoing commencement of company reorganization procedures under the Company Reorganization Act; and

10. Financial holding companies under the Financial Holding Company Act.

11. Real estate investment trust company

Section 3.

Rights Offering

§57. Issuing Price for Capital Increase for Value

(1) A stock-listed corporation, etc. may increase the capital for value at or above the market value, unless the issuing price calculated pursuant to the provisions of paragraph (2) is equivalent to, or less than, the par value. <Amended January 29, 2003>

(2) When a stock-listed corporation, etc. makes a rights offering by issuing at market price, the issuing price shall be determined by applying the theoretical ex-right stock price (or "adjusted stock price" in the case of shareholder-priority offering) as stipulated in the following subparagraphs, or by applying the discount rate specified by the listed corporation, etc., against the base stock price. When a rights offering is made through a public offering method, however, discount rate shall be restricted to below 30/100; in the case of a rights offering by a third-party allotment offering, the discount rate shall be limited to below 10/100.

1. In the case of a rights offering by the shareholder allotment method or the shareholder-priority offering method, the theoretical ex-right stock price (or adjusted stock price) shall be determined using the following formula, with the third trading day prior to the new stock allotment (or the closing date of shareholders' list, in the case of shareholder-priority offering) as the base date. In the event, however, the price calculated by applying the same discount rate to the base stock price, using the third trading day prior to the subscription date as the base date, is lower than the theoretical ex-right stock price, the former shall be used:

[Theoretical ex-right stock price (or adjusted stock price)] = [(base stock price + issuing price × rights offering ratio / (1 + ratio of capital increase)]

2. In the case of a rights offering via public offering, the base stock price shall be calculated using the fifth trading day prior to the subscription date as the base date;

3. In the case of rights offering by third-party allotment offering method, the base stock price shall be calculated using the day prior to the resolution date (if the board of directors has already determined the issuing price, the date of such a resolution) of the board of directors as the base calculation date.

(3) When a stock-listed corporation, etc. falls under one of the cases in the following subparagraphs, the discount rate under the proviso of paragraph (2) may not be applied.

1. Where stocks or DRs are issued overseas with the approval of the Chairman of the FSC (hereinafter, "the Chairman"), or where stocks are issued domestically for the purposes of corporate restructuring (including restructuring of companies standing in investment relations) by inducing foreign capital;

2. Where stocks are issued by a company undergoing workout programs pursuant to the Agreement among Financial Institutions for the Promotion of Corporate Restructuring, for the purposes of converting credits and loans into investment by financial institution provided under Article 2 paragraph (1) of the Act on Structural Improvement of the Financial Industry (hereinafter, "financial institution" in this Chapter) pursuant to Article 11 paragraph (6) subparagraph 1 of the Act; or where stocks are issued by a company undergoing joint management procedures of creditor financial institutions pursuant to the Corporate Restructuring Promotion Act, for the purposes of converting credits and loans into investment by creditor financial institutions as part of debt rescheduling.

3. In the case of issuing shares pursuant to Article 12 of the Act on Structural Improvement of the Financial Industry and Articles 37 through 38-2 of the Depositors Protection Act, for investment by the Government or the KDIC established under the Depositors Protection Act; or

4. In the case of issuing shares by a corporation, whose management rehabilitation is jointly undertaken by financial institutions (including at least one banking institution permitted to perform banking business pursuant to Article 8 of the Banking Act), applying third-party allotment offering method to corporation(s) designated under the management rehabilitation schedule.

(4) The base stock price provided under paragraph (2) shall be determined as follows. Where a stock-listed corporation, etc. intends to issue stocks of the categories for which market values are not yet determined in markets for securities and others, however, those of other stock-listed corporation, etc. retaining similar rights, together with market conditions, shall be considered to determine the base stock price (unless those of other stock-listed corporation, etc. are not available). <Amended May 28, 2002; January 29, 2003>

1. As per paragraph (2) subparagraph 1, the base stock price shall be determined by calculating the arithmetic average of the average closing price for the past one month, and the average closing price for the past one week, each of which is calculated from the base date, and the closing price of the base date; if the calculated price exceeds the closing price of the base date, the latter shall be the base stock price. The base stock price under the proviso of paragraph (2) subparagraph 1, however, shall be determined by calculating the arithmetic average of the average closing price for the past one week from the base date and the closing price of the base date; if the calculated price exceeds the closing price of the base date, the latter shall be the base stock price;

2. In the case of paragraph (2) subparagraph 2, the base stock price shall be the highest among the average closing price for the past one month, the average closing price and for the past one week, each of which is calculated from the base date, and the closing price of the base date;

3. In the case of paragraph (2) subparagraph 3, the base stock price shall be determined by calculating the arithmetic average of the average closing price for the past one month, the average closing price for the past one week, each of which is calculated from the base date, and the closing price of the most recent day; if the calculated price exceeds the closing price of the most recent day, the latter shall be the base stock price.

(5) Average closing price under paragraph (4) shall correspond to the average closing price (excluding special quotations) of issued stocks of the same class traded on the KSE or the KOSDAQ market (the stocks listed on the KSE or the KOSDAQ market, whose base date for dividend payment is the first day of the business year) weighted by the trading volume, in which case if there is no trading of issued stocks, the closing price of the new stock with the largest trading volume shall be the closing price of issued stock (as such in Article 61).

§58. Issuance of Warrants

(1) A stock-listed corporation, etc. shall determine matters pertinent to the issuance of warrants pursuant to Article 416 subparagraph 6 of the Commercial Code, when adopting a resolution on rights offering for shareholders. <Amended January 29, 2003>

(2) The stock-listed corporation, etc. under paragraph (1) shall determine the securities companies to trade the warrants, unless it intends to list the warrants in the securities market. <Added January 29, 2003>

§59. Public Notice and Individual Notice of Issuing Price, etc.

(1) When a stock-listed corporation, etc. intending to issue new shares by shareholder-priority offering method adopts a resolution on rights offering, it shall fix the closing date of shareholders' list for determining the shareholders entitled to prior subscription, and shall make a public notice of the fixed date two weeks prior thereto.

(2) A stock-listed corporation, etc. making a rights offering by issuing at market price through shareholders allotment or shareholder-priority offering, shall notify its shareholders of the issuing price determined pursuant to Article 57 paragraph (2) subparagraph 1 m and of the provision of its proviso two weeks prior to the commencement date of subscription; once the issuing price is fixed, it shall be disclosed without delay through individual notice or public notice in the newspapers prescribed under its articles of incorporation.

(3) A stock-listed corporation, etc. intending to issue new shares via public offering shall disclose without delay the issuing price once it is fixed.

§59-2. Stock Listing Overseas

Where a stock-listed corporation and etc. intends to issue stocks (excluding DRs) overseas in order to list and register in the overseas markets, it may do so as limited to the following list of exchanges;

1. New York Stock Exchange

2. National Association of Securities Dealers Automatic Quotation, Inc.

3. American Stock Exchange

4. Tokyo Stock Exchange

5. London Stock Exchange

6. Deutche B rse AG

7. Euronext Paris

8. The Stock Exchange of Hongkong, Ltd.

9. Singapore Exchange Securities Trading, Ltd.

10. Other overseas markets recognized by the Governor for stability, liquidity, and transparency.

Section 4.

Issuance of Convertible Bonds and Bonds with Warrant

§60. Restrictions on Issuance of Convertible Bonds

A stock-listed corporation, etc. shall not issue convertible bonds by any other methods than conferring subscription right to shareholders pursuant to the provisions of Article 513-2 paragraph (1) of the Commercial Code or offering by channels and methods (hereinafter, "public offering method") provided under Article 84-5 paragraph (1) of the Decree during each period specified under the following subparagraphs;

1. When a minority shareholder under Article 191-13 of the Act (hereinafter, "minority shareholder") requests convening of general shareholders' meeting, or requests a court for its permission of such convening, for dismissal of executive officers of the corporation: the period from the date of request to the date of decision on dismissal;

2. The period during which a litigation is pending over managerial disputes of a listed corporation, as in cases where a minority shareholder requests a court to suspend from office certain executive officers of the corporation, or files an action of nullity or abrogation of resolution of general shareholders meeting; and

3. The period during which procedures concerning disputes over the management right of the listed corporation, of equivalent nature and significance to cases under paragraph (1) or (2), are being undertaken after notification or disclosure thereof.

§61. Determination of Conversion Price

(1) When a stock-listed corporation, etc. issues convertible bonds, the conversion price shall be the highest price among the following: (i) the arithmetic average of the closing price for the past one month and for the past one week, each of which is counted from the date one day prior to the resolution of board of directors for issuance of convertible bonds, and of the closing price of the most recent day; (ii) the closing price of the most recent day; and (iii) the closing price of the date three trading days prior to the subscription date (if there is no subscription date, the payment date). However, in the event an issuer of convertible bonds, who has not issued any non-voting preferred stocks, intends to issue non-voting preferred stocks after conversion, Article 57 paragraph (4) mp shall apply mutatis mutandis thereto. <Added August 1, 2001>

(2) Notwithstanding paragraph (1), if convertible bonds issued by a listed corporation, are applicable under any of the following subparagraphs, the conversion price may be higher than 90/100 of the price determined pursuant to paragraph (1)m. <Added August 1, 2001>

1. When the credit rating of the bonds (which may be substituted by a credit rating of bonds evaluated within three months prior to the issuance of the convertible bonds, if there is any) is graded 'speculative (below BB++)' by two or more credit rating agencies; or

2. When the convertible bonds are used as underlying assets for asset-backed securities issued pursuant to the Act on Asset Securitization.

(3) When a stock-listed corporation, etc., which is applicable under any one of the following subparagraphs, issues convertible bonds to redeem its loans from a financial institution or other corporate bonds, the provisions under paragraph (1) and (2) may be not applied. <Added August 21, 2001>

1. A corporation undergoing workout programs pursuant to the Agreement among Financial Institutions for Promotion of Corporate Restructuring; and

2. A corporation, whose management rehabilitation is jointly undertaken by financial institutions (which shall include one or more person(s) authorized for banking business pursuant to Article 8 of the Banking Act), issuing convertible bonds to person(s) designated under its management rehabilitation schedules.

§61-2. Conversion Price Following Depreciation

Where a stock-listed corporation, etc. issues convertible bonds subject to conversion price adjustment, methods provided under the following subparagraphs shall be employed;

1. Decisions shall be made with respect to conversion price adjustment before issuance by board of directors, cause of adjustment, basis date for adjustment (hereinafter, "adjustment date"), and adjustment method.

2. At the time of making conversion price adjustment in light of declining market price situation, the conversion price shall be at least those provided under the following subparagraphs;

a. Price equivalent to 70/100 of conversion price at the time of issuance (or whichever price applicable where conversion price has been adjusted by reason of issuance of new stocks on discount before adjustment date); minimum adjustment price determined by articles of incorporation or general shareholders' meeting (where cause and amount of convertible bonds issued are specific, where conversion price adjustment is delivered to general shareholders' meeting as a matter of special resolution, or where minimum adjustment price and price of the bonds concerned are specified at general shareholders' meeting at the time convertible bonds are issued).

b. Price calculated pursuant to Article 61 from the date preceding the adjustment date (excluding the third trading day before subscription).

§62. Restricted Conversion Period

A stock-listed corporation, etc. shall issue convertible bonds under the condition that the bonds may be converted after one year from when they are issued; provided, however, where they are issued domestically by public offering or overseas by public offering and then applicable under each of the following subparagraphs, they may be issued under the condition that they may be converted after one month from when they are issued.

1. Where securities registration statement or disclosure document of equal effect is submitted to supervisory authority pursuant to governing statutes in the place of issuance

2. Where proper actions are taken such as inscribing in the surface of bond certificate and promotional literature for subscription that residents applicable under the Foreign Exchange Transactions Act (excluding securities companies acquiring bonds pursuant to purchase agreement relating to bond issuance) shall not acquire convertible bonds concerned or exercise rights thereunder for one year from the date of bond issuance.

§63. Issuance of Bonds with Warrant

(1) Article 60, Article 61 paragraph (1), Article 61-2 and Article 62 shall apply mutatis mutandis to issuance of bonds with warrant.

(2) In the case of issuing bonds with warrant by a stock-listed corporation etc., the total issuing value of the shares to be issued through exercise of preemptive rights endowed thereupon shall not exceed the total issuing value of convertible bonds issued.

(3) Where a stock-listed corporation, etc. issues divisible bonds with warrant under approach other than public offering, it shall do so to the extent that bonds, whose certificates of preemptive right to bonds with warrant are separated, are not solely purchased until the term commensurate with 1/3 of maturity of the bonds expires (one year if such term is less than one year) from the date of bond issuance.

Section 5.

Request for Information

§64. Requests for Information

When a stock-listed corporation, etc., or its related persons have violated the Act, the Decree, the Enforcement Regulation, provisions under this chapter, or orders issued thereunder by the FSC or the SFC, or when it is necessary for confirmation of any false statements, omissions, or misleading descriptions in disclosed documents such as securities registration statements, the FSC may order such a stock-listed corporation, etc., or related persons to submit reports or other relevant materials for reference, or may have the Governor examine the account books, documents and other items thus submitted.

§65. Administrative Actions

When a stock-listed corporation, etc. and its related persons violate the Act, the Decree, the Enforcement Regulation, provisions of this chapter, or orders issued thereunder by the FSC or the SFC, the FSC may take the following actions against such a listed corporation, or related persons:

1. Order of a public notice of such facts and corrections;

2. Restriction on issuance of securities;

3. Recommendation of dismissal of executives;

4. Public announcement on the actions taken as a result of violation of the Act;

5. Request of memoranda;

6. Filing complaint or notice to the investigation authorities in the case of violation of the Act; or

7. Warning or a notice of attention.

§66. Delegation of Authority

The FSC shall delegate to the Governor its authorities or duties over the matters stipulated hereunder:

1. Issuing orders to file reports or materials, or conducting investigation, pursuant to Article 64; and

2. Rendering disciplinary actions pursuant to Article 65 subparagraphs 1, 4, 5 and 7.

CHAPTER VI.

DISCLOSURE BY LISTED CORPORATIONS, ETC.

Section 1.

General Provisions

§67. Scope of Application

When a listed corporation under Article 2 paragraph (13) subparagraph 1 of the Act (hereinafter, "listed corporation") makes reporting, pursuant to Article 186 paragraph (1) of the Act, on matters of significant influence over the management and properties of the corporation (hereinafter, "significant corporate information"), or when a listed corporation, or any corporation falling under Article 83-2 of the Decree files its annual report, etc., the information to be submitted and the methods and procedures of such reporting or filing shall be governed by this chapter.

§68. Definitions

(1) "Largest shareholders" in this Chapter means largest shareholder as defined under Article 2-4 paragraph (3) subparagraph 1 of the Decree (hereinafter, "the largest shareholder"), persons standing in special relations to the largest shareholders (provided under Article 10-3 paragraph (2) of the Decree), principal shareholders (excluding institutional investors without substantial control) and affiliate companies (hereinafter, "affiliate companies") pursuant to the provisions of Article 2 subparagraph 3 of the Monopoly Regulation and Fair Trade Act.

(2) "Suspense payment" in this chapter corresponds to such temporary payment performed prior to fixing an account heading.

(3) A "holding company" in this chapter refers to any holding company under Article 2 of the Act on Monopoly Regulation and Fair Trade and any financial holding company under Article 2 of the Financial Holding Company Act.

(4) A "subsidiary" in this chapter refers to any subsidiary under Article 2 of the Act on Monopoly Regulation and Fair Trade and Article 2 of the Financial Holding Company Act. Subsidiaries as stipulated under Article 69 paragraph (1) subparagraph 5 item i, however, shall be excluded.

(5) A "grand child company" in this chapter refers to any grandchild company pursuant to Article 2 of the Financial Holding Company Act.

(6) A "large corporation" in this chapter refers to any listed or registered corporation whose total assets amount to at least 2,000 billion won as of the latest business year.

(7) "Creditor financial institution" in this Chapter means creditor financial institutions stipulated pursuant to the provisions of Article 2 subparagraph 1 of the Corporate Restructuring Promotion Act.

(8) "Lead creditor bank" in this Chapter means lead creditor bank stipulated pursuant to the provisions of Article 2 subparagraph 3 of the Corporate Restructuring Promotion Act.

(9) "Creditor financial institution council" means creditor financial institution council stipulated pursuant to the provisions of Article 24 of the Corporate Restructuring Promotion Act.

Section 2.

Reporting of Significant Corporate Information

§69. Scope of Significant Corporate Information and Reporting Procedures

(1) Any listed corporation or registered corporation shall, if applicable under any of the following subparagraphs, report in writing (including facsimile transmission) to the FSC and either the KSE or the KSDA on the details of such facts or decisions (corresponding to resolutions of the board of directors, or decisions of representative director(s), executive officers who de facto control the management, or principal shareholders; in this case, resolutions shall include the resolutions of committees under the board of directors pursuant to Article 393-2 of the Commercial Act; hereinafter as such in this chapter) by the next day after occurrence of such events for reporting. Such information, however, as the KSE or the KSDA requests to report on the very day of occurrence pursuant to Article 83 paragraph (1)p of the Decree shall be so reported. <Amended August 1, 2001; December 19, 2001; April 4, 2002; March 19, 2003>

1. When there is any of the following facts or decisions, which may bring about significant changes in the capital structure of a corporation:

a. When there is a decision on capital increase or stock retirement (referring to capital decrease and stock cancellation by profits), when purchase of stocks for retirement is completed or the predetermined purchasing period has expired, or when stock retirement is completed;

b. Where there is a decision on the issuance of convertible bonds, bonds with warrants, exchangeable bonds or DRs (including issuance of securities or certificates similar thereto in a foreign country), for which a contract has been entered into and the issuance has been completed (limited to issuance overseas); or where there is a request for conversion, exercise of preemptive right, request for exchange, or request for underlying stocks; where there is an adjustment for conversion price, exercise price of preemptive rights, or exchange price. Reporting on request for conversion, exercise of preemptive right, request for exchange, or request for underlying stocks, however, shall be limited to cases where the cumulative number of stocks requested or exercised (excluding the number of stocks previously reported) amounts to at least 1/100 of the total stocks issued;

c. Where the bonds concerned (including certificates of preemptive right separated from bonds with warrant) are acquired before maturity after convertible bonds, bonds with warrant, or exchangeable bonds are issued;

d. When there is a decision on issuance of corporate bonds (other than those under item b) in a foreign country, and entering into an issuance contract related thereto;

e. [Deleted]

f. When there is a decision on stock split or reverse stock split;

g. When there is a decision on borrowing of fund to the extent of 50/100 (25/100, in case of a large corporation) or more of its equity capital; and

h. Where there is a decision to issue corporate bonds (corresponding to the cumulative amount for the fiscal year concerned) up to 10/100 (or 5/100 for large businesses) or greater in equity capital by methods other than public offering. Where the cumulative amount is 10/100 (or 5/100 for large businesses) or greater in corporate bonds, and where there is a decision for any changes of 5/100 (or 2.5/100 for large businesses) or greater in equity capital (corresponding to the cumulative amount for the fiscal year concerned),

2. When there is any of the following facts or decisions, which may bring about significant changes in the management environment of the corporation:

a. When there is a cause for dissolution pursuant to Article 517 of the Commercial Act and other relevant enactments;

b. When notes or checks issued are dishonored, or their transaction with banks is suspended or prohibited, or when such transaction is reopened;

c. When an application for commencement, completion, or cancellation of company reorganization procedures under the Company Reorganization Act (including composition under the Composition Act; hereinafter as such) is filed, or when an affirmative decision thereon is notified by a court;

d. When a bank, with which a corporation has dealings, commences management control over the corporation, or dispatches its staff on a full-time basis for overall management control or collateral administration, or terminates the management control or withdraws its staffs;

e. Where commencement, suspension or termination of joint management by creditor financial institutions is confirmed.

f. Where there is a request for corporate reorganization procedures, dissolution, liquidation, bankruptcy made by lead credit bank or creditor financial institution council

g. Where there is an agreement reached together with financial institution council for the implementation of rehabilitation plan.

h. When there is a decision over an application for delisting or revocation of registration;

i. When fines, negligence fines or surcharges are imposed exceeding 10/100 (5/100 in case of large corporation) of capital stock;

j. When a corporation is notified of a decision to investigate an illegal incident under the Tax Dodgers Punishment Procedure Act, or a decision to investigate matters related to violation of relevant statutes from administrative authorities, or of the results of such investigations;

k. When a suit concerning any of the following subitems is filed or when a final and conclusive judgment thereof is rendered;

(i) Validity of issuance of listed or registered securities, alteration of the rights thereunder, or forgery or falsification of the securities;

(ii) Claim for damages, the amount of which suit is 10/100 (5/100 in case of a large corporation) or more of its capital stock;

(iii) Nullity or abrogation of merger, assignment or assumption of business operation, division, or resolutions of general shareholders' meeting on approval thereof;

(iv) Disputes related to management of a corporation, such as a motion for the provisional suspension from office of executive officers, and a request of a minority shareholder for calling a general shareholders' meeting for appointment or dismissal of executive;

i. When there is any change to the largest shareholders, principal shareholders, or any affiliate companies under Article 2 subparagraph 3 of the Act on Monopoly Regulation and Fair Trade;

j. When there is a decision on modifying the business purposes; and

k. When there is any change beyond the amount whichever is larger between 5/1,000 (2.5/1,000, in case of a large corporation) of total assets and 20/100 (10/100, in case of a large corporation) of open interest (corresponding to the aggregate of unsettled contract amounts, as of the base date of reporting; hereinafter as such in this chapter), provided that the open interest for derivatives (corresponding to futures, options, swaps, forwards, or other financial products similar thereto, that are based on raw materials, currencies, securities, interest rates, etc.; hereinafter as such in this chapter) is 2/100 (1/100 in case of a large corporation) or more of the total assets as of the end of the latest business year, or that the open interest reported most recently is 2/100 (1/100 in case of a large corporation) or more of the total assets as of the end of the latest business year;

3. When there is any of the following facts or decisions, which may cause significant loss to the properties, of the corporation:

a. Suspension of production, or closure of business, at a factory which produced 10/100 (5/100, in case of a large corporation) or more of the total production in the latest business year, or at the principal factory, or normalization of production due to settlement of events that led to the suspension or closure;

b. Full or partial suspension, or administrative measures thereon, (including revocation or withdrawal of authorization, permission, or license for the business, or suspension of sales of products as a corresponding measure) of a business operation which accounted for 10/100 (5/100, in case of a large corporation) or more of the sales of the latest business year or of the principal business;

c. Incurment of loss in the amount of 5/100 (2.5/100, in case of a large corporation) or more of the total assets as of the latest business year, due to natural disaster, warfare, exigency, fire and other calamities;

d. Decision to recall or destroy products which account for 10/100 (5/100, in case of a large corporation) or more of the sales in preceding business year;

e. Suspension of transactions with a customer who accounts for 10/100 (5/100, in case of a large corporation) or more of the total sales in preceding business year, or with principal customers; or

f. Decision on donation of 10/100 (5/100, in case of a large corporation) or more of the capital stock (referring to the amount accumulated during the business year in question). In the case where the amount accumulated is 10/100 (5/100, in case of a large corporation) or more of the capital stock, reporting is required when there is a change of 5/100 (2.5/100, in case of a large corporation) or more of the capital stock (referring to the changes accumulated during the business year in question).

4. When there is any of the following facts or decisions, which may bring about significant changes in the claims and obligations of the corporation:

a. A decision to provide collateral (limited to collateral for a third party, and referring to the amount accumulated during the business year in question; hereinafter as such in this item) or undertake guarantee (excluding guarantee of performance, such as for bid bonds, performance bonds, warranty, dumping protection, and tax payment guarantee, and referring to the amount accumulated during the business year in question; as such hereinafter in this item) to the extent of 10/100 (5/100, in case of a large corporation) or more of its capital stock; or when the obliger falls under any of subparagraph 2 a through c. If, however, the accumulated amount is 10/100 (5/100, in case of a large corporation) or more of the capital stock, reporting is required when there is a change of 5/100 (2.5/100, in case of a large corporation) or more of the capital stock (referring to the amount accumulated during the business year in question), in which case it shall also be reported on provision of collateral and guarantees outstanding for each obligor as of the date of decision or the date on which such event occurred;

b. A decision on suspense payment for a third party or loan (referring to the cumulative amount for the business year in question) of money or securities (referring to the securities prescribed under Article 2 paragraph (1) of the Act, commercial papers or CCS; as such in Article 71) to the extent of 10/100 (5/100, in case of a large corporation) or more of its capital stock. If, however, the accumulated amount is 10/100 (5/100, in case of a large corporation) or more of the capital stock, reporting shall be made when there is a change (referring to the cumulative amount for the business year in question) of 5/100 (2.5/100, in case of a large corporation) or more of the capital stock. These provisions shall not apply to the case of loans to employees and the ESOA;

c. When an unlisted corporation (excluding registered corporations), to which corporation has invested 10/100 (5/100, in case of a large corporation) or more of its capital stock, falls under any one of subparagraph 2 items a through c; or

d. When there is an assumption of obligation or an exemption thereof in the amount of 10/100 (5/100, in case of a large corporation) or more of its capital stock.

5. When there is any of the following facts or decisions on the investment or equity investment of the corporation:

a. A decision on investment in new facilities, facility expansion, or establishment of a new plant, in the amount of 20/100 (10/100, in case of a large corporation) or more of its capital stock;

b. Entering into a contract on financing, technology introduction, technology transfer, or technical cooperation, which may have significant impact on the management and properties of the corporation, or an expiration of the term for such a contract;

c. A decision to invest in resources development, which may have significant impact on management and properties of the corporation, or a case where economical efficiency in respect of such reserves and their production has been proven;

d. Entering into a single sales or a supply contract in the amount of 10/100 (5/100, in case of a large corporation) or more of the sales in the preceding business year, or rescission of such a contract;

e. A decision to acquire, assume, or assign patent right(s) on new materials or technology, which may have significant impact on its management or property;

f. A decision to acquire or dispose of its fixed assets in the amount of 10/100 (5/100, in case of a large corporation) or more of the total asset as of the end of the preceding business year;

g. A decision on equity investment in another corporation or disposition of equity shares in the amount (referring to the cumulative amount for the business year in question) of 10/100 (5/100, in case of a large corporation) of its capital stock. If, however, the cumulative amount is 10/100 (5/100, in case of a large corporation) or more of the capital stock, reporting shall be made when there is a change (referring to the cumulative amount for the business year in question) of 5/100 (2.5/100, in case of a large corporation) or more of the capital stock;

h. When the corporation becomes a oligopoly shareholder (referring to the oligopoly shareholder pursuant to Article 39 paragraph (2) of the Frame Act on National Tax) of any mutual savings and finance company under the Mutual Savings and Finance Company Act; or

i. When the amount of direct overseas investment (including payment guarantee for overseas financing in facility investment of its overseas corporation and establishment of a subsidiary; as such hereinafter) is 10/100 (5/100, in case of a large corporation) or more of its capital stock, or when the outstanding amount of direct overseas investment in the same overseas corporation and its subsidiary for the business year in question is 10/100 (5/100, in case of a large corporation) or more of its capital stock. If, however, the cumulative amount is 10/100 (5/100, in case of a large corporation) or more of the capital stock, reporting shall be made when there is any change of 5/100 (2.5/100, in case of a large corporation) or more of the capital stock (referring to the cumulative amount for the business year in question), in which case it shall also be reported by the name of the company invested overseas, total business scale (with the payment guarantee amount separately indicated) and the method of financing.

6. When there is any of the following facts or decisions, which change the income structure of the corporation (in the case of subparagraph 6 items a through c, it refers to the date of resolution of the board of directors):

a. When sales in the latest business year increased or decreased by 10/100 (5/100, in case of a large corporation) or more in comparison to that of its preceding business year;

b. When ordinary income or net profit of the latest business year increased or decreased by 30/100 (15/100, in case of a large corporation) or more in comparison to that of its preceding business year;

c. When the amount of dividends (dividends for minority shareholders, in the case of discriminated dividends) of the latest business year increased or decreased by 20/100 (10/100, in case of a large corporation) or more in comparison to those of its preceding business year;

d. When it earns profit (including unrealized portion, and referring to the cumulative amount for the business year in question; hereinafter as such in this chapter) or incurs loss, from trading derivatives, in the amount of 3/100 (1.5/100, in case of a large corporation) or more of its capital, or when the profit or loss most recently reported is 3/100 (1.5/100, in case of a large corporation) or more of its capital, or when there is a change of 1/100 (0.5/100, in case of a large corporation) or more of its capital; or

e. Cases of extraordinary loss or gain in the amount of 10/100 (5/100, in case of a large corporation) or more of its capital stock;

7. Where there is a decision on cash dividend (including interim dividend); <Amended March 19, 2003>

8. Where a decision is made to modify the accounting standards and estimates that will significantly affect the business management and assets or the investors' decisions;

9. Where a financial institution has disclosed or announced information on its management performance, or where it has received actions for management improvement in accordance with relevant statutes;

10. Where an outside director, audit committee member, or auditor has been appointed or dismissed (including resignations by reasons other than expiration of the term or contract);

11. Where a decision is made to confer stock option or cancel the option, and where the number of the stocks exercised under the stock option is 1% or greater of the total number of the stocks issued (with the exclusion of the number of the stocks exercised and registered);

12. Where the business in question is a holding company and intends to induct its subsidiary or sub subsidiary (hereinafter, "subsidiaries and others") under its umbrella, or where the subsidiaries and others have departed from the holding company;

13. Where the business in question is a financial holding company and has been taken actions against by the FSC for management improvement purposes pursuant to Article 50 paragraph (2) of the Financial Holding Company Act;

14. Where a decision for equity swap or transfer is made pursuant to Chapter 5 of the Financial Holding Company Act and Part 3 Chapter 4 Section 2 of the Commercial Code;

15. Where the business in question is a real estate investment company, and where there is any fact or decision applicable under any of the following (items f and h shall be excluded for a corporate restructuring real estate investment company); provided filing under this subparagraph and applicable under paragraph (1) shall be made in accordance with the provisions of this subparagraph;

a. Where there is a decision on the operation, such as real estate acquisition and disposition;

b. Where there is a decision on the acquisition or disposition of the securities for 10% or greater of the total assets;

c. Where there is a decision on borrowings;

d. Where an agreement is reached with an asset retaining institution, asset management company, or a real estate investment consulting company, among others, or where such an agreement is modified or terminated;

e. Where a party to an agreement reached pursuant to item d is applicable under subparagraph 2 item a or c;

f. Where there is a decision on cash dividend;

g. Where a decision is made to invest in, or operate, a real estate development project pursuant to Article 2 paragraph (4) of the Real Estate Investment Company Act, or where an authorization is obtained from the Minister of Construction and Transportation theretofore;

h. Where there is a change in the professional asset management personnel;

i. Where there is a decision on the restriction on stock acquisition or the postponement of continuity in existence; and

j. Where an action needed for management improvement is taken by the supervisory authority.

16. Where there is a decision on the acquisition or disposition of treasury stocks (including conclusion or termination of trust contracts, etc.) in accordance with Article 189-2 of the Act;

17. Where there is a decision on the facts stipulated under Article 374, Article 522, Article 527-2, Article 527-3, and Article 530-2 of the Commercial Code;

18. Where there is a decision to list stocks on, register stocks with, or cancel those listed or registered with, securities exchanges abroad; where stocks listed or registered are cancelled; or where stocks are suspended from being traded, cancelled of listing or registration, or otherwise by the securities supervisory authority or securities exchange in the country in question; <Added April 4, 2002>

19. Where the corporations in question has received audit report from the auditor; and <Added March 19, 2003>

20. Where matters pertinent to under subparagraphs 1 through 19 may arise with the potential of significantly affecting investors' decisions, or where there is a decision or resolution by the Board of Directors or general shareholders' meeting on matters that may significantly affect investors' decisions, such as matters subject to the resolution of general shareholders' meeting stipulated under the Act and subordinate statutes or the articles of incorporation.

(2) Provisions under paragraph (1) subparagraph 2 item k and subparagraph 4 item a, b, d shall not apply to any of the following listed corporations or registered corporations:

1. Banking institutions under the Banking Act;

2. Securities companies under the Securities and Exchange Act,

3. Insurers under the Insurance Business Act;

4. Long-term credit banks under the Long-Term Credit Bank Act;

5. Merchant banking corporations under the Merchant Banking Corporation Act,

6. Mutual savings and finance companies under the Mutual Savings and Finance Company Act;

7. Leasing companies established under the Credit-Specialized Financial Business Act;

8. Venture capital companies under the Act on Financial Assistance to New Technology Business;

9. Public corporations prescribed under Article 199 paragraph (2) of the Act; and

10. Corporations undergoing company reorganization procedures under the Company Reorganization Act.

(3) Any listed or registered holding company shall, when its subsidiary fall under any subparagraph of paragraph (1), report the details of such facts or decisions to the FSC and either the KSE or the KSDA.

(4) Provisions under paragraph (1) shall apply mutatis mutandis to the reporting of significant corporate information on subsidiaries by a holding company pursuant to paragraph (3).

(5) The scope of subsidiaries, whose significant corporate information shall be reported by a holding company pursuant to paragraph (3), shall be those whose stock value on the balance sheet of the holding company as of the end of preceding business year (the acquisition value, if a subsidiary is admitted during the business year) is 5/100 or more of the total assets as of the same date; in case any subsidiary falls under paragraph (1) subparagraph 2 items a through c, however, every subsidiary of a holding company shall be subject to the reporting.

(6) A stock-listed corporation or a registered corporation, having listed or registered with exchanges abroad, and having reported to the exchanges abroad pursuant to the statutes of the country in question on the significant corporate information not specified under Article 69 through 71, shall report a copy of the statement in the Korean language in accordance with paragraph (1). <Added April 4, 2002>

§70. Reporting of Business Plan

(1) Any listed corporation or registered corporation, if intending to voluntarily disclose matters concerning its business plan, such as undertaking of new projects, shall report the following details in writing (including fax) to the FSC and either the KSE or the KSDA; the same reporting requirement applies to cases where there is any change in matters thus reported already.

1. Detailed schedule for implementation of the business plan; and

2. Any matters or events, if any, either factual or legal, which may delay or sophisticate implementation of the business plan, such as requirements for relevant authorizations or permissions, any need for modifications in relevant statutes, or for external financing.

(2) If any matters or events to be reported pursuant to Article 69 paragraph (1) should arise in connection with implementation of the matters concerning business plan as reported in compliance with paragraph (1), a listed or registered corporation shall submit the reports required under Article 69 paragraph (1).

(3) A listed or registered corporation shall precisely describe in its annual report, etc. any progress in its business plan reported pursuant to paragraph (1).

§71. Reporting of Transactions with the Largest Shareholder, etc.

(1) If a listed or registered corporation engages in any of the following transactions, either with its largest shareholder, etc. (including transactions conducted in the name of other person(s), provided that they are from the account of the largest shareholder, ; hereinafter as such in this Chapter) or for its largest shareholder, etc., the corporation shall report such facts in writing (including fax) to the FSC and either the KSE or the KSDA by the next day after such transactions:

1. Suspense payment of money, or lending of money or securities;

2. Provision of real estate, movables, securities and other property as collateral;

3. Payment guarantee of monetary liabilities;

4. Equity investment;

5. Trading of securities;

6. Purchase, sale, or rent of real estate; and

7. Other transactions as determined by the Governor.

(2) When a listed or registered corporation has traded goods or services in the amount of 5/100 or more of its sales in the latest business year with its largest shareholders, or when it enters into a long-term (more than one year) supply contract (exports, etc. through a general trading company pursuant to Article 9-2 of the External Trading Act shall be deemed as long-term supply contracts) beyond such amount, or when there is any modification in such a contract, the corporation in question shall report the facts in writing (including fax) to the FSC and either the KSE or the KSDA by the next day after such events occur.

(3) In the case of paragraph (1) and (2), when such transactions are regular ones pursuant to the service agreement of financial institutions, a corporation shall be exempted from its reporting duty.

(4) In case the information to be reported under paragraph (1) or (2) falls under the matters requiring reporting pursuant to Article 69 paragraph (1), such information shall be reported in compliance with the provisions of paragraph (1) or (2).

Section 3.

Annual Report, etc.

§72. Information Required in Annual Report, etc. and Documents Attached Thereto

(1) The following information shall be stated in an annual report, pursuant to Article 83-3 of the Decree:

1. Outlines of the company

a. Purpose;

b. Company history;

c. Changes in capital stock;

d. Total numbers of shares;

e. Present state of voting rights; and

f. Matters on dividends, etc.

2. Business details

a. Manufacturing

(i) Outlines of business;

(ii) Main products and raw materials, etc,;

(iii) Production and facilities;

(iv) Sales;

(v) Present state of orders received;

(vi) Principal contracts in management;

(vii) R & D activities; and

(xiii) Other information necessary for investment decision.

b. Banking business

(i) Outlines of business;

(ii) Business operation performance;

(iii) Performance of each business type;

(iv) Present state of operation facilities,; and

(v) Other information necessary for investment decision.

c. Securities business

(i) Outlines of business;

(ii) Business operation performance;

(iii) Performance of each business type;

(iv) Present state of operation facilities,; and

(v) Other information necessary for investment decision.

d. Insurance business

(i) Outlines of business;

(ii) Business operation performance;

(iii) Present condition of asset management;

(iv) Present state of operation facilities; and

(v) Other information necessary for investment decision.

e. Construction business

(i) Outlines of business;

(ii) Present state of main works of construction;

(iii) Facilities;

(iv) Sales;

(v) Present state of orders received;

(vi) Principal contracts in management;

(vii) R & D activities; and

(vii) Other information necessary for investment decision.

f. Wholesale and retail business

(i) Outlines of business;

(ii) Sales;

(iii) Present state of sales for each type of product;

(iv) Operation facilities;

(v) Principal contracts in management;

(vi) R & D activities; an

(vii) Other information necessary for investment decision.

3. Financial information

a. Summary financial information;

b. Matters for attention in using financial statements;

c. Financial statements;

d. Consolidated financial statements;

e. Financial condition for each department; and

f. Financial statements before and after merger.

4. Auditor opinion, etc.

a. Auditor's opinion;

b. Internal auditor's opinion for the business year in question;

c. Auditor' opinion on consolidated financial statements; and

d. Auditor's fee

e. Others.

5. Corporate governance and present state of affiliated companies

a. Outline of corporate governance structure;

b. Present state of affiliated companies; and

c. Present state of equity investment in other corporations.

6. Stocks

a. Distribution of stocks;

b. Clerical service for stocks; and

c. Stock prices and trading volume for the last six months.

7. Officers and employees

a. Officers;

b. Employees; and

c. Labor union.

8. Transactions with parties of interest

a. Transactions with the largest shareholder,; and

b. Transactions with shareholders (excluding the largest shareholder), officers, employees, and other parties of interest.

9. Supplementary schedules

a. Manufacturing statement;

b. Schedule of deposits, etc.;

c. Schedule of securities;

d. Schedule of inventory;

e. Schedule of major receivables;

f. Schedule of short-term borrowings;

g. Schedule of major liabilities;

h. Schedule of long-term borrowings;

i. Schedule of bonds payable;

j. Schedule of depreciation; and

k. Schedule of corporate income tax.

10. Other necessary information

a. Reporting of significant corporate information and its present condition;

b. Summary of the minutes of general shareholders' meeting;

c. Contingent liabilities,;

d. Sanctions;

e. Important matters occurring after the balance sheet date;

f. Examination table of standards for small business, and

g. Progress on matters concerning business plan; and

h. Specification of usage of money raised by public offerings.

(2) Information provided under paragraph (1) subparagraph 4 items b, c, subparagraph 9 items a, d, j and k may be excluded in a semiannual report, and information under paragraph (1) subparagraph 4 items b, c and subparagraph 9 may be excluded in a quarterly report.

(3) The following documents shall be attached to annual report, etc. However, consolidated audit report under subparagraph 1 a may be filed within the period prescribed under Article 83-3 paragraph (5) of the Decree, and documents under subparagraph 1 item g may be filed within the period prescribed under Article 186-2 paragraph (5) of the Act:

1. Documents attached to annual report:

a. Auditor's audit report and consolidated audit report;

b. Auditors' report (referring to the auditors' report prescribed under Article 447-4 of the Commercial Act);

c. Business report (referring to the report under Article 447-2 of the Commercial Act);

d. Articles of incorporation;

e. Opinion of directors on management (referring to the opinion on evaluation of management results, such as business performance);

f. Evaluation opinion of auditor(internal) and Auditor on the present state of internal observation system of a corporation (referring to the right of the board of directors to supervise execution of duties of directors pursuant to Article 393 of the Commercial Act, and the duties of auditors pursuant to Article 412 of the Commercial Act, and other internal observation system) and

g. Combined financial statements of the business group

2. Document attached to semiannual report: semiannual audit report or semiannual review report,

3. In case of corporation filing quarterly review report: quarterly audit report or quarterly review report.

(4) The following information shall be stated in the annual report, etc, to be filed by a special purpose company, pursuant to Article 3 of the Act on Asset Securitization:

1. Information on the special purpose company,:

a. Outlines of the company;

b. Financial information;

c. Officers; and

d. Information on business consignments.

2. Asset administrator and the methods of asset administration

a. Matters of the asset administrator; and

b. Methods of asset administration.

3. Progress in asset securitization plan :

a. Outlines of asset securitization plan;

b. Present state of securitized assets;

c. Issuance and redemption of asset-backed securities; and

d. Plan for borrowing and operation of funds, and its results; and

4. Other necessary information for the protection of investors.

(5) The following documents shall be attached to the annual report, etc. under paragraph (4):

1. Documents attached to annual report

a. Auditor's audit report; and

b. Articles of incorporation.

2. Documents attached to semiannual report

CPA semiannual audit report or semiannual review report,

§73. Notice or Public notification of General Shareholders' Meeting

(1) In the event a stock-listed corporation, etc. intends to make a notice or a public notification of general shareholders' meeting pursuant to the provisions of Article 191-10 paragraph (3) of the Act via an information network and place it in each location stipulated under Article 36-16 of the Enforcement Regulation, it shall submit the relevant information to the Financial Supervisory Commission.

(2) Reference documents for the matters presented before the general shareholders' meeting pursuant to Article 84-17 paragraph (4) of the Decree shall be those stipulated under Article 137 paragraph (3). <Amended April 4, 2002>

Section 4.

Disclosures of Reporting Documents

§74. Copies of Reporting Documents and Reports to be Filed, and their Disclosure

(1) Any listed corporation or registered corporation shall file with the FSC and either the KSE or the KSDA two copies each of reporting documents under Articles 69 through 71; any corporation filing annual report, etc. shall submit to the FSC and either the KSE or the KSDA eight copies each thereof.

(2) The FSC, the KSE and the KSDA shall make available for public inspection and disclose the filed annual reports, for two years from the date of receipt, and reporting documents filed pursuant to Articles 69 through 71 for one year from the receipt date.

§75. Administrative Actions to be Taken by the FSC

(1) In case of failure to file reporting documents, annual reports, pursuant to Articles 69 through 71, or when there is any false statement or omission of material facts in reporting documents, annual report, pursuant to Articles 69 through 71, or when the FSC adjudges that there is violation(s) of Articles 186 through 186-4 of the Act, Articles 83 through 83-4 of the Decree, or provisions of this chapter by any corporation filing annual report, or any person reporting under this Chapter, or any other related person, the FSC may take any of the following administrative actions against such persons or corporations:

1. Public notice of such fact and order to correct;

2. Restriction on issuance of securities;

3. Recommendation on dismissal of officers;

4. Public announcement on the actions taken as a result of violation of the Act; <Amended March 19, 2003>

5. Request for submission of a memorandum.

(2) Article 34 paragraph (2) Shall apply mutatis mutandis to cases applicable under paragraph (1).

§76. Delegation of Authority

The FSC shall delegate its authority to the Governor over matters prescribed under the following subparagraphs:

1. Receipt and disclosure of reporting documents under Articles 69 through 71, and annual report, under Article 78;

2. Issuance of order to file reports or reference materials against any person reporting under Articles 69 through 71, any corporation filing annual report, or any other related person; and investigation of the books, documents and other items thus submitted; and

3. Administrative actions provided under Article 75 paragraphs (1), (4), (5), and (7).

CHAPTER VII.

DECLARATION OF MERGER (OR CONSOLIDATION) AND ASSIGNMENT OR ASSUMPTION OF BUSINESS

Section 1.

General Provisions

§77. Scope of Application

The purpose of the provisions of this Chapter is to prescribe the matters to be stipulated by the FSS with respect to the declaration of merger and division (including the merger after division; the same hereinafter in this Chapter) of stock-listed corporation, etc. and the declaration of assignment and assumption of important business (hereinafter referred to as "business assignment and assumption"), and the matters necessary for the handling thereof, in accordance with Articles 190-2 and 191 of the Act, Articles 84-7 through 84-9 of the Decree, and Article 36-12 and 36-13 of the Enforcement Regulation.

Section 2.

Merger

§78. Filing of Merger Statement

(1) Any stock-listed corporation, etc. shall, when entering into a merger contract with another corporation or its board of directors has resolved the merger, file with the FSC the document stating the information concerning such merger (hereinafter referred to as "merger statement"), without delay.

(2) The parties to the merger may jointly produce and file the merger statement.

(3) The Merger Statement promulgated in paragraph (1) of this Article shall be filed by one day prior to the scheduled date on which the closing date, or base date of closing, of shareholders' list for fixing shareholders for the shareholders meeting to approve such merger is publicly announced.

§79. Information Required in Merger Statement

(1) An outline of the merger and the information on the parties to the merger shall be described in the merger statement,

(2) An outline of the merger specified in the Merger Statement shall be as follows,

1. Purpose;

2. Method;

3. Major points of merger;

4. Merging ratio and calculation base;

5. The summary of credit ratings opinion of the credit ratings agency pursuant to Article 83 where any "stock-listed corporation, etc." intends to merge with any "non-listed corporation" or in cases where the calculation of merging value is not assessed by the market price established either in KSE stock market or KOSDAQ market thereof or in the case of situation under the proviso of Article 84-7 paragraph (5)p of the Decree;

6. Investments, guarantees, and other transactions of the parties to the merger;

7. Contents of dissenter's appraisal rights and information on the exercise thereof; and

8. Other information necessary for the protection of investors,

(3) The information to be stated in the Merger Statement on the parties to the merger shall be as follows:

1. An outline of the company;

2. Outlines of Business;

3. Financial information;

4. Auditor's audit opinion,

5. Structure of corporate governance and information regarding affiliates;

6. Matters as to stocks;

7. Executive and employees; and

8. Other necessary information,

§80. Documents Attached to Merger Statement

(1) The information regarding the merger and the parties to the merger shall be attached to the Merger Statement

(2) The information on the merger to be attached to the Merger Statement shall be as follows:

1. A copy of the minutes of the board of directors' meeting for the purpose of approval of plan of merger;

2. A copy of the merger contract (in case such merger contract has not been entered at the time of filing the merrier statement, it shall be filed afterwards);

3. In case any stock-listed corporation, etc. intends to merge in accordance with Article 79 paragraph (2) subparagraph (5), the credit ratings opinion of the credit ratings agency pursuant to Article 83 paragraph (3).

4. In case the merger requires permission, authorization, or approval of administrative authorities, a copy of the documents certifying such fact.

(3) The information on the parties to the merger to the attached to the merger statement shall be as follows.

1. The Al,

2. The transcript of the company register;

3. Auditor's audit reports (the financial statements presented by such corporation in the case where such corporation is not subject to the external audit pursuant to Article 2 of the External Audit Act for any of the last three fiscal years) on the financial statements for the last three fiscal years (limited to those for the fiscal years elapsed if three fiscal years have not elapsed);

4. In case the semiannual financial statements are fixed after the lapse of six months from the commencement date of the fiscal year to which the filing date of the merger statement belongs, Auditor review report on semiannual financial statements (the semiannual financial statements presented by such corporation in the case where such corporation is not subject to the external audit pursuant to Article 2 of the External Audit Act); and

5. Other reference documents,

§81. Special Application to Small Scale Merger

Notwithstanding Articles 79 and 80, in the case of a small scale merger prescribed in Article 527-3 of the Commercial Act, any person who is obliged to file a merger statement may file such merger statement omitting a part of the information to be required therein in such manner as to be stipulated by the Governor when a merged company is neither a stock-listed corporation, etc.

§82. Calculation Standards of Merging Value

The specific calculation method of Assets Value, Earnings Value, and Weighted Arithmetic Average and Relative Value under Article 36-12 paragraph (5) of the Enforcement Regulation shall be determined by the Governor of Financial Supervisory Service.

§83. Designations of Independent Ratings Agency

(1) "Any person to be designated by the FSC as a credit ratings agency for unsecured bonds" prescribed in Article 36-13 paragraph (1) subparagraph 2 of the Enforcement Regulation refers to any credit ratings agency.

(2) Any "stock-listed corporation, etc." shall declare such fact to the FSC, KSE and KSDA in a timely manner in case any party to merger makes contracts of credit ratings with an independent credit ratings agency prescribed in Article 36-13 of the Enforcement Regulation (hereinafter referred to as "independent credit ratings agency") or assigns such agency to evaluate its credit risk,

(3) Any independent credit ratings agency shall produce its credit ratings opinion with respect to the appropriateness of merging ratio.

§84. Restriction on Evaluation by Independent Credit Ratings Agency

"The case where it has a special relationship to be stipulated by the FSC" prescribed in Article 36-13 paragraph (3) of the Enforcement Regulation refers to the following cases:

1. Cases where any independent ratings agency invests in 3/100 or more of the capital stock of the party to mergers or vice versa;

2. Cases where any shareholder whose equity investment in an independent credit ratings agency is 5/100 or more of the capital stock of such ratings agency and any shareholder whose equity investment in any party to merger is 5/100 or more of the capital stock of such party is a single person or a person having a special relationship. However, these provisions shall not apply to the case where such single person is an institutional investor prescribed in Article 17 paragraph (1) of the Enforcement Decree of the Corporate Income Tax Act, and it has no relationship as Mentioned in subparagraph 5 with such independent credit ratings agency and such party to merger;

3. Cases where any officer of any independent credit ratings agency has invested in equity of 1/100 or more of capital stock of any party to merger, or vice versa;

4. Cases where any of officer of any independent credit ratings agency or any party to merger is the person having a special relationship with any principal shareholder of such party to merger or such ratings agency; or

5. Cases where any single person has a relationship to exert de facto influence on the key managerial matters of any independent credit ratings agency and any party to merger, such as the appointment or dismissal of officer thereof,

§85. Individual or Public Notice of Calling Shareholder Meeting for Resolution on Merger

Any stock-listed corporation, etc. shall, when making individual or public notice of calling its shareholders meeting for the resolution on merger in accordance with Article 363 of the Commercial Act or Article 191-10 paragraph (1) of the Act, do it by summarizing the following information :

1. Article 79 paragraph (2) subparagraphs 1 through 8 (excluding subparagraph 6); and

2. The fact and time of filing the merger statement with the FSC.

§86. Report on Completion of Merger

Any stock-listed corporation, etc. filing the merger statement or any corporation succeeding the business thereof shall, when completing the registration of mergers file with the FSC the document describing the matters related thereto (hereinafter referred to as "report on completion of merger"), without delay.

Section 3.

Assignment or Assumption of Business

§87. Filing of Statements on Assignment or Assumption of Business

(1) Any stock-listed corporation, etc. shall, when it has entered into any contract on the important assignment or assumption of business prescribed in Article 84-8 paragraph (1) of the Decree or its board of directors has adopted the resolution thereon, file with the FSC the document describing the matters related thereto (hereinafter referred to as "assignment or assumption statement"), without delay,

(2) In the case of paragraph (1), when both corporations to the assignment and assumption have the obligation to file such assignment or assumption statement, they may jointly produce and file such statement.

(3) Article 78 paragraph (3) shall apply mutatis mutandis to the filing of assignment or assumption statement.

§88. Information Required in Assignment or Assumption Statement

(1) An outline of assignment or assumption and the information on the corporations to the assignment or assumption shall be contained in the assignment or assumption statement.

(2) An outline of the assignment or assumption specified in the assignment or assumption statement shall be as follows

1. Purpose;

2. Contents and range of business to be assigned or assumed;

3. Assets, sales of the business division to be assigned or assumed; or liabilities to be assumed;

4. Assignment or assumption value and the calculation base;

5. Schedule and method;

6. Investments, guarantees, and other transactions of the corporations to do the assignment and assumption ;

7. Contents of dissenter's right and matters related to the exercise thereof; and

8. Other information necessary for the protection of investors.

(3) Article 79 paragraph (3) subparagraphs 1 through 8 shall apply mutatis mutandis to the information on the corporations to the assignment or assumption which are contained in the assignment or assumption statement.

§89. Document Attached to Assignment or Assumption Statement

(1) The information on the assignment or assumption of business and that on the corporations thereto shall be attached to the assignment or assumption statement.

(2) The information on the assignment or assumption of business to be attached to the assignment or assumption statement shall be as follows:

1. A copy of the minutes of the board of directors meeting for the resolution on assignment or assumption ;

2. A copy of the assignment or assumption contract (in case such assignment or assumption contract has not been entered at the time of filing the assignment or assumption statement, it shall be filed afterwards); and

3. In the case where the assignment or assumption of business requires permission, authorization, or approval of administrative authorities, a copy of the documents certifying such fact.

(3) The information on the corporations to the assignment or assumption of business attached to the assignment or assumption statement shall be as follows:

1. The Al;

2. The transcript of the company register;

3. Auditor's audit reports (the financial statements presented by such corporation in case where such corporation is not subject to the external audit pursuant to of the External Audit Act for any fiscal year from among the last three fiscal years) on the financial statements for the last three fiscal years (limited to those for the fiscal years elapsed if three fiscal years have not elapsed) ;

4. Documents under Article 80 paragraph (3) subparagraphs 4 and 5.

§90. Notification to Convene or Public Notice of Shareholder Meeting for Approval of Purchases or Sales of Business

Any Stock-listed corporation, etc. shall, when making individual or public notice of calling its shareholder meeting for the approval of purchases or sales of its business pursuant to Article 363 of the Commercial Act or Article 191-10 paragraph (1) of the Act, include the following summarized informations:

1. Article 88 paragraph (2) subparagraphs 1 through 8 (excluding subparagraph 6); and

2. The information about its satisfaction of duty to file the "Assignment or Assumption of Business Statement" with the FSC and its date of filing.

§91. Report on Completion of Assignment or Assumption of Business

Any stock-listed corporation, etc. which has filed the assignment or assumption statement shall, when completing de facto assignment or assumption of business, such as completion of registration, file with the FSC the document describing the matters related thereto (hereinafter referred to as "report on completion of assignment or assumption"), without delay.

Section 4.

Division

§92. Definitions

The terms to be used in this section shall have the same meanings given to them in the following :

1. The term "division" refers to any act which divides the business of a company into two or more parts, and then establish a corporation with such divided business properly as its capital or to merge such property with another company;

2. The term "simple division" refers to the case of establishing one or several companies through division;

3. The term "merger after division" refers to any merger with one or several surviving companies through division (hereinafter referred to as "statutory merger after division" in this section), or the establishment of one or several companies through consolidation of such divided parts of the property (hereinafter referred to as "consolidation after division" in this section) ;

4. The term "spin-off division" means that the divided company acquires the total number of stock of the company to be established through simple division or merger after division;

5. The term "company to division" refers to any of the following companies depending on the patterns of division :

a. In the case of simple division, the company to be divided, and the company to be established through division;

b. In the case of statutory merger after division, the company to be divided, and the surviving company subject to merger after division;

c. In the case of consolidation after division, the company to be divided, the surviving company subject to consolidation after division, and the company to be established through division;

d. In the case where two or more methods are proceeded simultaneously or in the case of spin-off division, all the companies for each division pattern,

6. Terms which are not defined in this article, from among those which are used in this section shall have the same meanings given to them in Articles 530-2 through 530-12 of the Commercial Act.

§93. Filing of Division Statement

(1) Any stock-listed corporation, etc. shall, when its board of directors has adopted a resolution on division or has entered into the contract on the merger after division, file with the FSC the document describing the matters related thereto (hereinafter referred to as "division statement'), without delay.

(2) Article 78 paragraphs (2) and (3) shall apply mutatis mutandis to the case of filing division statements.

§94. Information Required in Division Statement and Documents Attached Thereto

(1) Articles 79 and 80 shall apply mutatis mutandis to the division statement. In this case, the mergers, the parties to the merger shall be deemed the division and the companies subject to division, respectively.

(2) The documents prescribed in each subparagraph of Article 530-7 paragraph (1) of the Commercial Act shall be attached to the division statement

(3) Articles 85 and 86 shall apply mutatis mutandis to the division of stock-listed corporations, etc.

Section 5.

Adjustment of Purchasing Price

§95. Adjustment of Purchasing Price

(1) In case the FSC adjusts the purchasing price in accordance with Article 191 paragraph (3)p of the Act, the price shall be the amount to be determined in any of the following Items:

1. In the case where the stock index as of the expiration date of the period of request for the purchase is higher than the stock price as of the resolution date of the board of directors meeting :

a. In the case where the standard adjusted price which is calculated by the following formula on the basis of the price (hereinafter referred to as "base purchasing price" in this section) calculated pursuant to Article 84-9 paragraph (2) subparagraph 1 of the Decree is higher than the stock price (hereinafter referred to as "market price" in this section) of the corporation concerned as of the expiration date of the period of request for the purchase, the price, whichever is higher, between the base purchasing price and the market price:

Standard adjusted price = base purchasing price x (stock index as of the expiration date of the period of request for the purchase /stock index as of the resolution date of the board of directors meeting);

b. In the case where the standard adjusted price is lower than the market price, the standard adjusted price.

2. In the case where the stock index as of the expiration date of the period of request for the purchase is lower than the stock index as of the date of resolution of the board of directors meeting :

a. In the case where the standard adjusted price is higher than the market price, the standard adjusted price;

b. In the case where the standard adjusted price is lower than the market price, the lower of the two prices.

(2) In applying the provisions of paragraph (1), the stock price index as of the resolution date of the board of directors meeting or the expiration date of the period of request for the purchase refers to the arithmetic average stock price index (referring to the market value-weighted stork price index of 22 industries published by the KSE or KSDA) of the industry to which the corporation concerned belongs, for seven trading days from the resolution date of the board of directors meeting on the merger, or assignment or assumption of business, or from the expiration date of the period of request for the purchase mentioned in Article 191 paragraph (1)ml of the Act; and, the market price refers to the volume-weighted average of contracted prices of the stocks of such corporation on the securities market or KOSDAQ market (based on closing Price) for the same period. However, in application of the stock price index by industry, in case the number of corporations belonging to the relevant industry is less than ten as of the expiration date of the period of request for the purchase, the total market value of the corporation concerned is not less than 10/100 of the total market value of the industry to which such corporation belongs, or it is difficult to calculate the stock price index of the industry, the composite stock price index shall be the base.

(3) The application of the adjustment on purchasing price pursuant to the provisions of paragraph (1) shall be made within ten days prior to the expiration date of the purchasing period pursuant to Article 191 paragraph (2) of the Act.

§96. Number of Copies of Statements, etc. to be Filed and Disclosure

(1) The number of copies of the merger statement, the report on completion of merger, the division statement, the assignment or assumption statement, the report on completion of assignment and assumption (hereinafter referred to as "statements, etc," in this Chapter) which the companies to the merger, division, or assignment or assumption of business file with the FSC shall be two for each of the documents and one for each of the attached documents.

(2) The statements, which have been filed with the FSC shall be disclosed for two years from the filing date. However, these provisions shall not apply to the matters failing under the military secret pursuant to Article 2 of the Military Secret Protection Act; and, to the affairs or business of the persons who file the merger, or assignment or assumption of business, which are excluded from the disclosure upon approval of the FSC.

§97. Complement of Statements

In case any statement, which is filed with the FSC, is judged insufficient as information for investment decision making because it has been inadequately produced or its format requirements have been incompletely met, the Governor may request the stock-listed corporation, etc. which has filed such statement, to complement it; and, unless such corporation immediately complements it, he may reject the acceptance thereof or have it returned.

§98. Administrative Actions by the FSC

(1) In cases where there is a failure of filing Statement, or where the FSC determines that there is a false statement or omission of a material fact to be contained in the information required in statements, or the registrant hereof has violated Article 190-2 the Act, Article 84-7 or 84-8 of the Decree, or the provisions of this Chapter, it may take the following administrative actions against such persons :

1. Order to publicly notify such fact and to correct it;

2. Suspension or prohibition of the merger, or assignment or assumption of business concerned ;

3. Restriction on the issuance of securities;

4. Recommendation on the dismissal of officers;

5. Public announcement on the actions taken as a result of violation of the Act; <Amended March 19, 2003>

6. Collection of a memorandum;

7. Indictment or notice to investigation authorities in the case of violation of the Act;

8. Warning or attention; or

9. Imposition of surcharge.

(2) Article 34 paragraph (2) shall apply mutatis mutandis to the case of paragraph (1).

§99. Delegation of Power

The FSC shall delegate to the Governor the following duties:

1. Receipt and disclosure of statements,;

2. Issuance of order to file the reports or data for reference to any declaring person, any independent credit ratings agency, or any other related person of the statement, concerned, and investigation of the books, documents and other things related thereto;

3. Administrative actions mentioned in Article 98 subparagraphs 1, 2, 5, 6 and 8

4. Adjustment of purchasing price pursuant to Article 95.

CHAPTER VIII.

DECLARATION OF ACQUISITION AND DISPOSAL OF TREASURY STOCK

Section 1.

General Provisions

§100. Scope of Application

Purpose of the provisions in this Chapter is to prescribe matters to be stipulated by the FSC in regards to the reporting of the acquisition or disposal of the treasury stock, or the contract or cancellation of the trust contract under Articles 189 and 189-2 supplementary provision 16 of Addenda (No 6423; 3. 28. 2001) of the Act and from Article 84 to Article 84-4 of the Decree as well as other necessary matters for the administration thereof.

Section 2.

Acquisition and Disposal of the Treasury Stock

§101. Matters to be Resolved by the Board of Directors on Acquisition or Disposal of the Treasury Stock

Matters to be resolved by the board of directors of the listed corporations, etc, pursuant to Article 84-3 paragraph (1) subparagraph 1 of the Decree shall be the following subparagraphs:

1. Matters on acquisition.

a. Purpose;

b. Amount;

c. Fundraising method for acquisition;

d. Class and number of stocks;

e. Price of the stocks to be acquired;

f. Acquisition method;

g. Acquisition period;

h. Estimated period of time to hold the acquired stocks;

i. Name of the securities company to be entrusted with the acquisition;

j. Other necessary information for protection of investors.

2. Matters on disposal

a. Purpose;

b. Amount;

c. Class and number of stocks;

d. Price of the stocks to be disposed;

e. Disposal method;

f. Disposal period;

g. Name of the securities company to be entrusted with the disposal;

h. Other necessary information for protection of the investors.

§102. Submission of Acquisition Statement of the Treasury Stock

When the board of directors of stock-listed corporations, etc. has resolved to acquire the treasury stock as prescribed in Article 84-3 paragraph (1) of the Decree, the stock-listed corporations, etc. shall immediately submit a document (hereinafter referred to as "acquisition statement") to the FSC, stating relevant matters to such acquisition.

§103. Information Required on Acquisition Statement and the Document Attached Thereto

(1) An acquisition statement shall include an outline of the acquisition details and information on the issuer.

(2) An outline of the acquisition in the acquisition statement shall include the following subparagraphs:

1. Purpose;

2. Estimated amount of acquisition;

3. Fundraising method for acquisition;

4. Class and number of stocks;

5. Price of the stocks to be acquired;

6. Acquisition method;

7. Acquisition period;

8. Estimated period of time to hold the acquired stocks;

9. Name of the securities company to be entrusted with the acquisition;

10. Current status of the outstanding treasury stock one day before the submission of the acquisition statement (including the acquisition of the treasury stock under "trust contract, etc." as prescribed in Section 3);

11. Other necessary information for protection of the investors.

(3) Information on the issuer in the acquisition statement shall include the following subparagraphs:

1. Name and address of the issuer;

2. Class and number of the stocks issued ;

3. Changes made to the capital stock for the last five years;

4. Record on dividends for the last five years;

5. Stock prices and the trading records for the last six months;

6. Record on the acquisition of the treasury stock for the last three years;

7. Stock distribution;

8. Summarized financial statements of the preceding fiscal year. However, if the semiannual report and the most recent Quarterly Report have been reported, summary on the semiannual financial statements or the most recent version of the Summary Quarterly Financial Statement shall also be included.

(4) Documents stipulated under each of the following subparagraphs shall be attached to the acquisition statement; provided that the documents stipulated under Item 2 may not be attached if the largest shareholder is the Government, the KDIC, the Korea Development Bank, the Industrial Bank of Korea, the Export-Import Bank of Korea, or corporations more than 50/100 of whose paid-in capital is owned by the government. <Amended December 18, 2002>

1. A copy of the minutes of the board of directors on such acquisition;

2. A written oath to declare that the outstanding shares held by the largest shareholder will not be disposed when the treasury stocks are being acquired.

§104. Reporting Results on the Acquisition of the Treasury Stock

(1) If stock-listed corporations, etc. which have submitted the acquisition statement, complete the acquisition of the treasury stock or when the deadline for such acquisition is over, then, they shall submit a report on the acquisition result of the treasury stock (hereinafter referred to as "acquisition report") to the FSC within five days from such incident.

(2) The following documents shall be attached to the acquisition report;

1. Documents showing details of transactions;

2. Statement of reasons thereof and supplementary documents if the actual acquisition was not conducted according to the reported version of the acquisition statement.

§105. Acquisition Period of the Treasury Stock

If stock-listed corporations, etc. which have submitted an acquisition statement intend to acquire the treasury stock once again after failing to complete the acquisition of the treasury stock within the period prescribed in Article 84-3 paragraph (3) of the Decree, they may submit another acquisition statement after a month from the end of the acquisition period stated in the acquisition statement. However, these provisions shall not apply when they intend to acquire non-voting stocks prescribed in Article 370 of the Commercial Act.

§106. Method of Buy Order for Acquisition of the Treasury Stock

(1) In the event a stock-listed corporation, etc. having submitted an acquisition statement or a report in accordance with Article 69 paragraph (1) subparagraph 1 item a prescribed under Article 189 of the Act (hereinafter, "Filing for Redemption of Shares Out of Profit"), intends to place a purchase order to acquire treasury stocks in the securities market or the KOSDAQ market, it shall comply with the following methods. <Amended December 18, 2002>

1. Pursuant to the provisions of the KSE or the KSDA, the buy order shall be placed on the quotations for determination of the opening price on the day in question, whereas the price of the purchase order shall be higher than the closing price from the preceding day, but less than that which is 5% higher than the closing price. To correct the buy order during the trading hours (including the order to amend; the same hereinafter), the price shall be in between the higher of the price immediately prior to the placement of the order and the best bidding price, and the price lower than the higher one above by 10 ticks;

2. The buy order volume per day shall be less than the larger of 10% of the number of shares referred to in the acquisition statement or the redemption of shares out of profits statement and 25% of the daily average trading volume for the preceding month from the base date, which is one day prior to the date of submission of the Acquisition Statement or the Redemption of Shares Out of Profits Statement. In the event the larger exceeds 1% of the total shares issued, the buy order shall be placed for a volume equivalent to 1% of the total shares issued;

3. The buy order details pursuant to subpragraph 2 shall be disclosed immediately after the closing on the day prior to the placement of such an order; and

4. Only a single securities company shall be assigned to place purchase orders per day (No more than five securities companies may place purchase orders on a consignment basis during the acquisition period stated in the Acquisition Statement or the Redemption of Shares Out of Profits Statement).

(2) Notwithstanding the provisions of paragraph (1) subparagraphs 1 and 2, a stock-listed corporation, etc. may acquire treasury stocks in accordance with the provisions of the KSE or the KSDA for after-hours block trading, where applicable under any of the following subparagraphs; <Amended December 18, 2002>

1. Where treasury stocks are acquired from the Government, the Bank of Korea, the KDIC, the Korea Development Bank, the Industrial Bank of Korea, the Export-Import Bank of Korea, or a corporation, more than 50% of whose paid-in capital is owned by the Government; and

2. Where the Government permits, approves, authorizes, or instructs or recommends in writing for the purposes of accomplishing policy objectives such as promoting fair competition and privatization of public enterprises in connection with the acquisition of treasury stocks by stock-listed corporation, etc., and where the Government so requests with the Financial Supervisory Commission and the Commission approves to acknowledge that there exists no harm in the protection of investors.

§106-2. Special Cases for Buy Order for the Treasury Stock Acquisition

(1) In the event an immediate action is needed to protect investors and stabilize the market in the light of rapid changes within the market, the KSE or the KSDA may allow a stock-listed corporation, etc. to acquire treasury stocks(including the acquirement of treasury stocks for redemption of shares out of profits) by each of the methods stipulated under the following subparagraphs, notwithstanding the provisions of Article 106 paragraph (1) subparagraphs 1 and 2. <Amended December 18, 2002>

(2) When the KSE and the KSDA take actions provided under paragraph (1) or make any change in such actions, they shall obtain the approval from the Commissioner.

§107. Refusal of Orders

Securities company entrusted to place buy orders of the treasury stock shall refuse such orders if they find out that such orders have been placed in violation of Article 84 paragraph (1) subparagraph 1 and Article 84-3 paragraph (2) of the Decree.

§108. Restriction Period of Disposition of the Treasury Stock for Issuance of DR

"A time period stipulated by the FSC" prescribed in Article 36-7 subparagraph 4 of the Enforcement Regulation refers to a period from the date of the acquisition of the treasury stock until the date of submitting the acquisition report.

§109. Submission of the Treasury Stock Disposition Statement

(1) In the event a stock-listed corporation, etc. has its Board resolution to dispose of the treasury stocks acquired in accordance with the provisions of this Chapter (including the issuance of exchangeable bonds in exchange for treasury stocks and the retirement of treasury stocks pursuant to the provisions of Article 16 of the Supplementary Provisions; the same hereinafter), it shall submit to the Financial Supervisory Commission documents specifying the information pertinent to the disposition of the treasury stocks (hereinafter, "disposition statement"). <Amended August 1, 2001>

(2) In the event the company intends to grant treasury stocks pursuant to the proviso of Article 84-3 paragraph (1) of the Decree, it shall submit the disposition statement on the treasury stocks exercisable during the term availing the exercise of stock options at least 3 days prior to the first date for exercise of stock purchase option conferred by the resolution of the general shareholders' meeting or the Board. <Added April 4, 2002>

(3) In the event the disposition report is submitted pursuant to the provisions of paragraph (2), and in the application of the provisions of Article 84-3 of the Decree, the treasury stocks shall be deemed to have been disposed of. <Added April 4, 2002>

§110. Information Required in Disposition Statement and the Document Attached Thereto

(1) A disposition statement shall contain the following information:

1. Purpose;

2. Estimated budget for disposal,

3. Class and number of stocks;

4. Price of the stocks to be disposed;

5. Fundraising method for disposal;

6. Disposal period;

7. Name of the securities company to be entrusted with the disposition;

8. Current status of the outstanding treasury stock before and after the disposition (including the acquisition of the treasury stock under trust contract, etc, as prescribed in Section 3);

9. Other necessary information for protection of the investors.

(2) A copy of the minutes of the board of directors meeting on the disposition shall be attached to the disposition statement

§111. Reports on Disposition Result of Treasury Stock

(1) The provisions of Articles 104 and 105 shall apply mutatis mutandis to the disposition of the treasury stocks; "acquisition" in this context shall be regarded as "disposition." The provisions, however, shall not apply in the event treasury stocks are granted by the exercise of stock option; whereas, the provisions of Article 104 shall not apply mutatis mutandis to the disposition of the treasury stocks by issuing exchangeable bonds. <Amended September 19, 2001; April 4, 2002; December 18, 2002; March 19, 2003>

(2) The stock-listed company shall submit a Completion Report (hereinafter referred to as "Completion Report") within five days from the completion of the issuing of Exchange Bonds to be exchanged with the treasury stock and they shall also attach documents showing detailed information on disposition.

(3) In the event treasury stocks are granted in accordance with the proviso of Article 84-3 paragraph (1) of the Decree, a Completion Report shall be submitted within 5 days from the date the exercise term of the stock options has expired, as they were granted by the resolution of the same general shareholders' meeting or the Board of Directors. <Added April 4, 2002>

(4) A stock-listed corporation, etc. having submitted a Disposition Statement and intending to place sale order to dispose of treasury stocks in the securities market or the KOSDAQ market, shall observe each of the methods stipulated under the following subparagraphs. <Added March 19, 2003>

1. Pursuant to the provisions of the KSE or the KSDA, the sale order shall be placed on the quotations for determination of the opening price on the day in question, whereas the price of the sale order shall be higher than the closing price of the preceding day by 2 ticks. To correct the sale order during the trading hours (including the order to amend; the same hereinafter), the price shall be greater than the lesser of the price immediately prior to the placement of the order and the best bidding price;

2. The sale order volume per day shall be less than the larger of 10% of the number of shares referred to in the disposition statement and 25% of the daily average trading volume for the preceding month from the base date, which is one day prior to the date of submission of the disposition statement. In the event the larger exceeds 1% of the total shares issued, the sale order shall be placed for a volume equivalent to 1% of the total shares issued;

3. The daily sale order volume, etc. shall be disclosed immediately after the closing of the market on the day prior to the placement of such an order; and

4. Only a single securities company shall be assigned to place sale orders per day (No more than five securities companies may place sale orders on a consignment basis during the disposition period stated in the disposition statement).

(5) A securities company consigned with the disposition of the treasury stocks of a stock-listed corporation, etc. and having knowledge of the company's intention to sell the treasury stocks against the provisions of Article 84-3 paragraph (2) of the Decree, shall refuse to undertake the sale. <Added March 19, 2003>

Section 3.

Acquisition and Disposition of the Treasury Stock under Trust Contracts

§112. Matters to be Resolved by the Board of Directors on Acquisition or Disposition of the Treasury Stock under Trust Contracts

Matters to be resolved by the board of directors of stock-listed corporations, etc. pursuant to Article 84-3 paragraph (1) subparagraph 2 of the Decree are listed below:

1. When trust contracts, are signed

a. Purpose;

b. Amount;

c. Fund-raising method to reach such trust contract;

d. Contract date and period;

e. Name of the Trust Company, Management Company or the Investment Company with whom the contract is to be signed;

f. Other necessary information for protection of the investors,

2. When trust contract, etc. are terminated (including partial termination; the same hereinafter)

a. Purpose,

b. Amount;

c. Date of termination;

d. Name of the Trust Company, Management Company or the Investment Company with whom the contract is to be terminated;

e. Other necessary information for protection of the investors.

§113. Submission of Statements on Conclusion or Termination of Trust Contracts, etc.

In the event a stock-listed corporation, etc. has acquired resolution of its Board of Directors to conclude or terminate trust contract, etc. pursuant to Article 84-2 paragraph (3) of the Decree, it shall submit to the Financial Supervisory Commission documents stating specifics of the conclusion or termination of the contract, etc.(hereinafter, "Conclusion Statement of Trust Contract, etc" and "Termination Statement of Trust Contract, etc.") without any delay. Termination of trust contract, etc. without a Board resolution in accordance with the proviso of Article 84-3 paragraph (1) of the Decree, however, shall submit the Termination Statement of Trust Contract, etc. to the Financial Supervisory Commission prior to the expiration date of the contract, etc. in question. <Amended March 19, 2003>

§114. Information Required in the Conclusion or Termination Statements of Trust Contracts, etc. and the Documents Attached Thereto

(1) An outline on the agreement on trust contracts, and information on the issuer shall be stated in the conclusion statement thereof and an outline on the termination of trust contract, shall be stated in the termination statement thereof.

(2) An outline on the agreement on trust contracts, in the conclusion statement thereof shall contain the following information:

1. Purpose;

2. Amount;

3. Fund-raising method to reach such trust contract;

4. Contract date and period;

5. Name of the Trust Company, Management Company or the Investment Company with whom the contract is to be signed;

6. Current status of the outstanding treasury stock one day prior to the date of submitting the conclusion statement of trust contract, etc. (including the acquisition of treasury stock prescribed in Section 2);

7. Other necessary information for protection of the investors.

(3) Article 103 paragraph (3) shall apply mutatis mutandis to the matters, regarding information on the issuer in the conclusion statement of trust contracts.

(4) An outline of the termination of trust contract, etc in the termination statement thereof shall contain the following information:

1. Purpose;

2. Amount;

3. Date of termination,

4. Name of the Trust Company, Management Company or the Investment Company with whom the contract is to be terminated;

5. Current status of the outstanding treasury stock one day prior to the date of submitting the termination statement of trust contracts, etc, (including the acquisition of treasury stock prescribed in Section 2);

6. Other necessary information for protection of the investors.

(5) Documents stipulated under each of the following subparagraphs shall be attached to the Conclusion Statement of Trust Contract, etc.; provided that this provision shall not apply if the largest shareholder is the Government, the KDIC, the Korea Development Bank, the Industrial Bank of Korea, the Export-Import Bank of Korea, or a business invested in by the Government by 50% or more of the paid in capital.

1. A copy of the minutes of the board of directors meeting on the conclusion of trust contracts, etc, ;

2. A written oath to declare that the largest shareholder of a corporation will not dispose of his outstanding stocks issued by the corporation, within three months from the date of submitting such statement.

(6) Copies of the minutes of the Board of Directors meetings pertinent to the termination shall be attached to the Termination Statement of Trust Contract, etc.; provided that this provision shall not apply if the termination of trust contract, etc. is made without a Broad resolution in accordance with the proviso of Article 84-3 paragraph (1) of the Decree. <Amended March 19, 2003>

§115. Acquisition Status Report and Termination Report of the Treasury Stocks under Trust Contract, etc.

(1) Stock-listed corporations, etc., after three months from the submission of the Conclusion statement of trust contract, etc, shall submit a report on the "treasury stock status acquired and held by a Trust Company, Management Company or the Investment Company under a trust contract, " (hereinafter referred to as "acquisition status report under trust contract") to the FSC within five days.

(2) Stock-listed corporations, etc which have submitted the termination statement of trust contract, shall submit a report on the termination of trust contract, (hereinafter referred to as "termination report under trust contract") to the FSC within five days from such termination date.

(3) Documents confirming the acquisition result of the treasury stock acquired under the trust contract, during the reporting period shall be attached to the acquisition status report under the trust contract mentioned in Paragraph (1); and the documents to confirm the termination of trust contracts, shall be attached to the termination report on the trust contract mentioned in paragraph.(2).

(4) Stock-listed corporations, etc., whose outstanding treasury stocks are acquired under trust contracts, shall state the current status of their outstanding treasury stock in its annual report, from the end of each quarter

Section 4.

Determination of Limit on the Treasury Stock

§116. Determination of Limit on the Treasury Stock

(1) The maximum amount of the treasury stocks acquirable by a stock-listed corporation, pursuant to Article 189-2 paragraphs (1) and (2) of the Act, shall be calculated by adding the amount prescribed under paragraph (3) and then, subtracting the amounts prescribed under the following subparagraphs 1 and 2 from the maximum amount for a distribution of dividend under Article 462 paragraph (1) of the Commercial Act, on the basis of financial statements of the preceding business year.

1. If any treasury stock has been obtained after the end of the preceding business year pursuant to Article 189 and 189-2 of the Act, the amount of such treasury stock acquired;

2. In the case of any trust contract, etc., the amount covered by such a trust contract (in case of a partial termination of the contract, it refers to the principal under the contract subtracted by the amount proportional to termination; in case of any treasury stock created by the trust contract in question as of the end of the preceding business year, it refers to the principal under the contract subtracted by the amount corresponding to the treasury stock created); and

3. If any treasury stock has been disposed of pursuant to the provisions under section 2 after the end of the preceding business year (excluding treasury stock retired out of profit under Article 189 of the Act and Article 16 of the Addenda), the acquisition cost of the stock (corresponding to the amount calculated by applying moving average method).

(2) The maximum amount of treasury stock acquirable for a stock-listed corporation, pursuant to Article 189 paragraph (3) subparagraph 2 of the Act, shall be the amount produced by subtracting the amounts prescribed under the following subparagraphs 1 through 4 from the maximum amount for distribution of dividend under Article 462 paragraph (1) of the Commercial Act, on the basis of financial statements of the preceding business year.

1. The amount under Article 84 paragraph (2) subparagraphs 1 and 2 of the Decree;

2. The amount of Reserve for Capital Structure Improvement under Article 56;

3. Reserve for Enterprise Development under Article 56 paragraph (2) under the Corporate Income Tax Act;

§117. Administrative Proceedings on False or Insolvent Declarations, etc.

(1) If the Acquisition Statement, Disposition Statement, Acquisition Report, Disposition Report, Conclusion Statement of the Trust Contract, Termination Statement of Trust Contract, Acquisition Status Report or Termination Report (hereinafter referred to as "Statements, Etc." in this Chapter) have not been submitted, or if the FSC deems that there is a false statement, an omission of an important material fact in such Statements, Etc or that any listed corporation, etc. or any other relevant person has violated Articles 189 and 189-2 of the Act, Article 16 of Addendum, Articles from 84 to Articles 84-4 of the Decree or the provisions of this Chapter, the FSC may take the following administrative actions against such listed corporations, etc, the entrusted securities company concerned, the Trust Company, Management Company or the Investment Company which have signed such trust contracts, with the listed corporations,:

1. An order to publicly announce the fact concerned and to correct it;

2. Suspension or prohibition of the acquisition and disposition of the treasury stock concerned;

3. Restriction on the issuance of Securities;

4. Recommendation on the dismissal of officers;

5. Public announcement on the actions taken as a result of violation of the Act; <Amended March 19, 2003>

6. Request for the submission of a memorandum;

7. Indictment or notice to investigation authorities in the case of the violation of the Act;

8. Warning or attention.

(2) If a securities company entrusted with the acquisition or disposition of the treasury stock conduct such acquisition or disposition in violation of the provisions of this Chapter, the FSC may take administrative actions against such securities company by imposing a restriction on their entrustment business during a specified period.

(3) If a stock-listed corporation, etc. which have submitted the acquisition statement or disposition statement pursuant to the provisions of Section 2 neglect their duties thereof despite the opportunity to acquire or dispose the treasury stock as stated in the acquisition statement or disposition statement, the Governor may, in addition to the restriction mentioned in Article 105 (including the application of mutatis mutandis pursuant to Article 111), take administrative actions against such corporations by imposing a restriction on the submission of the acquisition statements or disposition statements during a specified period .

§118. Number of Copies of the Statements, etc. to be Submitted and Disclosure

(1) A Stock-listed corporation, etc. shall submit two copies of each statement to the FSC.

(2) The FSC shall disclose the statements, submitted pursuant to the provisions of paragraph (1) for two years from the receiving date.

§119. Delegation, etc. of Power

The FSC shall delegate the following duties to the Governor;

1. Reception and disclosure of the statements,;

2. Issuance of an order to submit the relevant reports or data for a reference to stock-listed corporation, etc., securities companies entrusted with the acquisition or disposition of the treasury stock, and other related persons; and investigation of the books, documents and other items related thereto;

3. Issuance of an order to suspend the entrusted transactions for the acquisition or disposition;

4. Administrative sanctions stipulated in Article 117 paragraph (1) subparagraphs 1, 2, 5, 6 and 8.

CHAPTER IX.

DISCLOSURE OF CHANGES IN CORPORATE GOVERNANCE

Section 1.

General Provisions

§120. Scope of Application

The purpose of this Chapter is to proscribe the matters to be determined by the FSC in regards to tender offer under Chapter Ⅳ of the Act, reporting on holding of block shares and any change thereto under Article 200-2 of the Act and Articles 86-3 through 86-7 of the Decree, solicitation for proxy exercise of voting rights under Article 85 of the Decree, and approval for acquisition of stocks issued by public corporations pursuant to Article 200 of the Act, and other necessary matters.

§121. Definitions

"Shareholding ratio" in this Chapter refers to the percentage produced from the total number of shares, held by a person and persons specially concerned therewith divided by the total number of voting shares issued by the listed corporation in question and its issued shares (excluding stock certificates and stock certificates subject to exchange) held by the person and the persons specially concerned therewith.

Section 2.

Tender Offer Statement

§122. Exemption from Tender Offer

"Purchase, of stocks, prescribed by the FSC" as under Article 11 subparagraph 5 of the Decree corresponds to the following cases:

1. Purchase of shares, etc., for management rationalization purposes, in compliance with the provisions of the Act, or permissions, approvals, or authorizations granted by the Government, or any guidances or recommendations provided in writing;

2. [Deleted January 3, 2003]

3. Purchase of shares, etc., disposed of by the Government (including the Bank of Korea, Korea Development Bank and government-invested institutions), in accordance with public corporation privatization plans;

4. Purchase of shares, etc. issued by a company which has applied to a court for composition, commencement of company reorganization procedures, or bankruptcy, in accordance with the provisions of the Composition Act, Company Reorganization Act, or the Bankruptcy Act, or purchase etc. of shares etc. previously held by the company and disposed of in compliance with permissions, authorizations, decisions, orders, or documentary advice, etc. of the court;

5. Purchase of stocks, etc. where a creditor financial institution or a creditor bank intends to sell stocks of the corporation applicable under any of the following items;

a. Businesses selected to jointly undergo workout in accordance with the provisions of the Agreement by Financial Institutions for the Corporate Restructuring Promotion and its subsequent agreements; and

b. Ailing businesses whose joint management procedures have been initiated by the creditor financial institution or creditor bank in accordance with Article 13 or 22 of the Corporate Restructuring Promotion Act;

6. [Deleted January 3, 2003]

7. Purchase of stocks, etc. applicable under each of the following items relevant to the compliance by financial institutions pursuant to the prompt corrective actions taken in accordance with Article 10 of the Act on Structural Improvement of the Financial Industry;

a. Acquisition of stocks, etc. issued by the financial institution in question;

b. Purchase of stocks, etc. held by the financial institution in question; and

c. Purchase of stocks, etc. of the financial institution in question.

8. [Deleted January 3, 2003]

9. Purchase of shares etc. issued by an insolvent financial institution by the Korea Deposit Insurance Corporation under Chapter 2 of the Depositor Protection Act for business rationalization purposes in accordance with provisions of relevant statutes, or purchase etc. of shares disposed of by the KDIC;

10. Acquisition by the Government of shares, etc. issued by a government - invested enterprise in exchange for state property provided as an investment in kind to such an enterprise under the Act on Investment-in-Kind of State Property;

11. Purchase of shares, etc. in case a foreign investor disposes its holding shares, etc. acquired in accordance with Articles 5 through 7 of the Act on Promotion of Foreigners' Investment, or purchase, etc. of shares, etc. by a joint-venture partner of a foreign-invested enterprise that has a purchase priority under the joint venture contract when the other joint-venture partner disposes of its holding shares, etc.;

12. Acquisition of shares issued by a financial institution for the purpose of meeting capital requirements under the relevant statutes, or acquisition of shares issued by a financial institution which has filed a management improvement plan, etc. to the Governor, etc. for the purpose of meeting financial requirements such as capital adequacy ratio, etc.;

13. Purchase executed by the largest shareholder and persons having a special relationship therewith, of shares etc. issued by a financial institution, when without such purchase etc. a massive forfeiture of rights owned by common shareholders is inevitable following the capital increase under subparagraph 7, as a consequence of which the purchase etc. has been undertaken to facilitate the capital increase;

14. Purchase of shares whose class has reached the ceiling of acquisition by foreigners (including the case where the ceiling is just an odd lot away) or exceeded such ceiling prescribed under Article 7-8 of the Regulation on Supervision of Securities, as a consequence of which such class of shares are traded among foreigners through mediation of a securities company.

§123. Information Required in Tender Offer Statement

(1) The followings shall be stated in the Tender Offer Statement, pursuant to Article 11-4 paragraph (6) of the Decree:

1. Information on the tender offerer and affiliated persons:

a. The current performance of the tender offerer and his affiliated persons;

b. When the offerer is a corporation, the business group which such offerer belongs to; and

c. When the offerer is a corporation, the financial information on such corporation

2. Issuer of securities subject to tender offer:

a. The current performance of the Subject Company and its affiliates; and

b. The Business Group which the Subject Company belongs to;

3. Purpose of the tender offer;

4. Classes and number of shares, etc. subject to the tender offer:

a. Classes and number of shares, etc. which are anticipated the tender offer;

b. Number of stocks, etc, to be owned by the offerer after the successful tender offer;

c. Total number of issued shares of the subject company subject to tender offer.

5. Terms and conditions of tender offer such as period, price, and settlement date:

a. General terms and conditions such as period, price and settlement date of tender offer

b. Method of settlement.

6. Information on the contracts when there are cases of purchasing securities not through tender offer after the filing date of Tender Offer Statement

7. Sources of the purchase fund:

a. Deposit balance in financial institutions or other fund balance details proving sufficient amount for the tender offer;

b. Details of securities held by the bidder to be delivered when the tender offer is made by exchange of securities as consideration;

c. Details of the issue of new shares when the tender offer is made for the investment in kind in order to satisfy the standards under Article 8-2 paragraph (1) subparagraph 2 of Monopoly Regulation and Fair Trade Act

8. Information on the tender offer agent (hereinafter referred to as "agent") :

a. Name of the agent;

b. Scope of services to be provided by the agent related to the tender offer; and

c. Locations and telephone numbers of principal executive office and branches of the agent

9. Current performance of the subject company

a. Financial and profit performance for the latest quarterly and last three business years; and

b. Transaction records of the shares, etc. of the subject company for six months prior to the filing date of Tender Offer Statement

10. Method of tender offer:

a. Method of subscription;

b. Method of revocation;

c. Method of purchase of subscribed stocks, etc;

d. Amendment or Withdrawal Method, etc. of the Tender Offer Statement.

11. Details of fund raising necessary for the tender offer or preparation of the securities subject to exchange (including summary of loan agreement if such fund was borrowed):

a. Details of fund raising sources for the tender offer;

b. Details of preparation for the securities subject to exchange;

c. Information on the company issuing the securities subject to exchange.

12. Holding and trading information of shares, etc. of the subject company for one latest year by the tender offerer and its affiliates;

13. Whether there were any prior negotiations with the executive officers or the largest shareholder of the subject company, and if there were, the contents of the negotiations;

14. Future business plans or proposals for the subject company after the successful completion of the tender offer;

15. Information on brokers or agents of the tender offer, if any:

a. Company name or personal name;

b. The purposes and business outlines of incorporation ;

16. The place for inspection of Tender Offer Statement and Tender Offer Manual

(2) The documents (those prescribed in the first part of each paragraphs) prescribed in Article 11-4 paragraph (3) subparagraph 4 and 5 of the Decree shall be prepared within three days prior to the filling date of tender offer statement on the basis of the same date.

§124. Documents Attached to Tender Offer Statement

Documents to be attached for confirmation of the information required in tender offer statement, as pursuant to Article 11-4 paragraph (3) subparagraph 9 of the Decree, shall be as follows:

1. When tender offer money or securities subject to exchange, which are indicated in the documents under Article 11-4 paragraph (3) subparagraph 4 or 5 of the Decree, is not withdrawn or disposed of by the settlement date: documents stating such facts;

2. When a person, after submitting a tender offer statement, intends to operate the tender offer money or securities subject to exchange, which are indicated in the documents under Article 11-4 paragraph (3) subparagraph 4 or 5 of the Decree, until the settlement date through withdrawal or disposal: a plan for operation of such funds or securities from the withdrawal or disposal date to the settlement date, and documents verifying such facts;

3. When any tender offerer is a foreigner or a foreign corporation, etc.: documents certifying that the tender offerer has given power of attorney in respect of tender offer to a person who has a domicile or an office in Korea; and

4. When documents attached to tender offer statement are not written in Korean: a copy of their translated version.

§125. [Deleted August 1, 2001]

§126. Information to be Released in Tender Offer Announcement

Information to be released in a tender offer announcement under Article 11-4 paragraph (6) of the Decree shall be that which is provided under Article 123 paragraph (1) subparagraph 1 item a, subparagraphs 2 through 5, subparagraphs 7, 8, 10, 13, 14 and 16.

§126-2. Dates Excluded in Period Counting

The "dates to be determined by the FSC" as under the proviso of Article 21-2 paragraph (2)p of the Act and Article 23 paragraph (1) of the Act corresponds to the dates prescribed under each subparagraph of Article 133.

§127. Prohibition of Modifying the Purchasing Terms

The "cases to be determined by the FSC" as under Article 12-6 subparagraph 3 of the Decree corresponds to modifying of the terms and conditions of tender offer to extend the period for payment of tender offer price, except such modifications as prescribed under the following subparagraphs:

1. Increase in tender offer price, when (i) the arithmetic average of contract prices (based on the closing price) of the stocks, etc. in question, as determined in the securities market or the KOSDAQ market during a period of three days prior to the date of submitting an amended tender offer statement, is 90/100 or more of the tender offer price, or (ii) there is a counter tender offer;

2. Increase in the number of stocks, etc. subject to the tender offer, when there is any change in the total number of stocks, etc. after submission of tender offer statement, or when there is a counter tender offer; and

3. Extension of tender offer period, when there is a counter tender offer.

§127-2. Exceptions to the Withdrawal of Tender

"Matters determined by the Financial Supervisory Commission, such as those of significance and unforseeable at the time of the public announcement made on a tender offer" under Article 12-7 subparagraph 3 item g of the Decree means the damages or losses incurred for at least 10% of the total assets during the recent business year as a result of a disaster or an event, such as natural calamity, war, emergency, and conflagration. <Added December 19, 2001>

§128. Proportional Distribution

(1) Proportional distribution under Article 13-2 subparagraph 2 of the Decree corresponds to distribution in proportion to the number of subscribed stocks, etc. when the total number of subscribed stocks, etc. exceeds the total number of the stocks, etc. subject to tender offer.

(2) In case there is a difference between the number counted pursuant to paragraph (1) and the total number of stocks, etc. subject to tender offer, the difference shall be disposed of in accordance with the method described in the tender offer statement.

§129. Delivery of Tender Offer Notice

When the tender offer period expires, a tender offerer shall immediately send a notice to the subscribers, which shows the present state of tender offer, stocks, etc. subject to tender offer, or stocks, etc. to be returned, and the information required for settlement, etc.

§130. Report

Any tender offerer shall, in the case of completion of tender offer, report the results thereof to the FSC without delay.

§131. Number of Copies to be Filed and Disclosure

Any tender offerer or target company shall file with the FSC and either the KSE or the KSDA two copies each of tender offer statement, amended tender offer statement, statement of revocation of tender offer, and documents expressing opinion on the tender offer, etc., and the pertinent authority shall disclose such documents for three years from the date of receipt.

Section 3.

Report on Holding and Change of Block Shares, etc.

§132. Method of Joint Report

(1) When a person, who is the largest shareholder and selected as the representative under Article 86-6 of the Decree, and the specially-concerned person make reports together (hereinafter referred to as "joint report"), the specially-concerned person shall deliver a report on the power of attorney to the representative and the representative shall, when submitting the first joint report to the FSC, attach a copy of the power of attorney to the report on holding and change of block shares.

(2) When there is a large change in block shares after filing the report mentioned in paragraph (1), the representative who has made such joint report shall report on such change. However, if the representative is re-selected, the new representative shall make the report in application of paragraph (1).

(3) When the representative violates his duty in making the joint report under Paragraphs (1) and (2), the consequences shall be reverted to the filing person and the specially-concerned person related to such violation.

§132-2. Base Date for the Reporting of Holding Status <Added March 19, 2003>

"Date designated by the Financial Supervisory Commission" under Article 86-4 paragraph (2) subparagraph 6 of the Decree means each of the date under the following subparagraphs;

1. The day following purchase payment is made for the acquisition of the new stocks issued;

2. The day in which borrower's agreement is made for borrowing stocks, or the day in which stocks, etc. are returned;

3. The day in which stocks granted as a gift become effective, or the day in which stocks, etc. are transferred for the gift purposes;

4. The day in which inheritance of stocks, etc. are determined as a matter of simple approval or restricted approval in the event of a single heir or heiress, or the day in which inheritance allocation is completed as per stocks, etc. in the event of 2 or more heirs or heiresses; and

5. The day in which legal effect of the matters reported for reasons other than those stipulated under subparagraphs 1 through 4 take place in accordance with relevant statutes, such as the Civil and Commercial Code.

§133. Days not to be Included in Reporting Period

In the case of filing the report on holding and change of block shares the following days shall not be included in the reporting period;

1. Public holidays prescribed in Article 2 of the Regulation on Holidays of Government Offices

2. Labor Day

§134. Information Required in Report on Holding and Change of Block Shares by Institutional Investors

"The facts to be determined by the FSC" prescribed in Required in Report on Holding and Change of Block Shares Article 86-7 paragraph (2) of the Decree refers to the followings;

1. Information on the issuing company;

2. Personal Information of the filing and the specially-concerned person;

3. Holding ratio of stocks, etc.;

4. Details of holding status of the filing person and the specially- concerned person;

5. Details of holding status by the own account and customer's account;

6. Contents of trust contract, mortgage contract and other main contracts with respect to the shares, etc.

7. The quantity and method of daily acquisition or disposition for the last one month.

§135. Documents to be Attached to Report

(1) Information evidencing acquisition or disposition, such as a purchase report, and copies of major agreements pertinent to the holding shares (limited to the agreements prepared) shall be attached to the Large Shareholding Report and the Change in Large Shareholding Report. Where a corporation applicable under any of the following subparagraphs has acquired or disposed of stocks, in the securities market or the KOSDAQ markets, submission of the evidentiary information may be waived, however. In this case, the corporation under the subparagraph 4 through 6 shall not be waived unless it submit documents evidencing the proof of its identity as a business such as license, authorization or registration by the foreign supervisory authority at its first report. <Amended April 4, 2002>

1. Institutional investor referred to under Article 86-7 paragraph (1);

2. Securities investment company or asset management company referred to under the Securities Investment Company Act;

3. Investment consulting company providing investment services, referred to under the Securities and Exchange Act;

4. Business engaged in the banking business, securities business, insurance business, asset management, and investment services abroad under foreign statutes;

5. Securities investment company governed by foreign statutes; and

6. Business applicable under subparagraphs 1 through 5, and designated by the Governor.

(2) In the event the attachments under paragraph (1) are photocopies, they shall be denoted as in accord with their originals and sealed by the reporter.

§136. Copies of Reports, etc. to be Filed and Disclosure

Any person who reports the status of the holding and change of block shares shall submit two copies of the reports on holding of block shares, change of block shares, amended report on holding and change of block shares, and other attached documents to FSC and either KSE or KSDA and such institutions shall publish such reports for five years from the date of receipt.

Section 4.

Solicitation for Proxy Exercise of Voting Rights

§137. Soliciting Documents

(1) The informations of any soliciting persons and agents and the object of general shareholders' meeting shall be mentioned under Article 85 paragraph (1) of the Decree and provisions shall be titled appropriately.

(2) The followings about the soliciting persons and his agents shall be mentioned under paragraph (1) of this Rule :

1. Identity and name of the soliciting person, the classes and number of securities which are held by the account of the soliciting person under whoever's names they are, and the classes and number of securities held by affiliates of soliciting person;

2. Identity and name of the agent of the soliciting person and the class and number of securities held by the agent;

3. Identity and name of the person solicited and the class and number of securities held by the person solicited;

4. Relationship between the company and the soliciting person or the agent;

(3) When the object of general shareholders' meeting under paragraph (1) of this Article fall under one of the followings, such information shall be mentioned.

1. Approval of financial statements:

a. Outline of the operating performance of the business year concerned;

b. Balance Sheet and Income Statement of the business year concerned;

c. Statement of appropriation of retained earnings (a proposal) or statement of disposition of accumulated deficit (a proposal). However, if the dividend plan is not yet confirmed until the solicitation, the provisions on dividend for last two business years,

2. Amendment to the Article of Incorporation

a. The purpose and details if the amendment to the Article of Incorporation is made for the exclusion of cumulative voting system or amendments of the Article of Incorporation which cumulative voting system was excluded;

b. In the event of amendments to the Article of Incorporation other than item a, the purpose and its outlines thereof.

3. Election of directors

a. Name, date of birth, main occupation, and job experiences.

b. Whether candidates are directors or outside directors.

c. Relationships of candidates and the recommenders of candidates with the largest shareholder

d. Transaction history of candidates for directors and their corporation for last three years. The transaction history shall corresponds to one of subparagraphs prescribed in Article 71 paragraph (1), transactions or contracts under Article 71 paragraph (2), legal counseling contracts, accounting audit contracts, or other similar contracts (when candidates made such contracts or candidates were members as partners or associates of accounting firms or offices that the contracts were concluded). However, transactions made by means of standardized agreement shall not be applicable to Article 71 paragraph (3).

4. Election of members of Audit Committee

a. In the case of the election of Audit Committee members as outside directors are concerned, items a, c and d under subparagraph 3.

b. In the case where the election of Audit Committee members as non - outside directors are concerned, items a, c and d under subparagraph 3.

5. Election of General Auditors

a. When the candidates for general auditors are nominated at the time of solicitation, items a, c and d under subparagraph 3.

b. When the candidate for general auditors are not nominated at the time of solicitation, the number of candidates being elected.

6. Dismissal of directors

a. Name, Date of Birth and recent summary of career history.

b. Reasons for the dismissal.

7. Dismissal of members of Audit Committee

a. In the case of dismissing members of Audit Committee who are outside directors, items a and b under subparagraph 6.

b. In the case of dismissing members of Audit Committee who are non-outside directors, items a and b under subparagraph 6.

8. In the case of dismissal of General Auditor, items a and b under subparagraph 6.

9. In the case of approving the limit for directors' compensation and salaries, the number of directors and the total amount or limit of their compensation and salaries during the current and the last business years.

10. In the case of approving the limit for General Auditors' compensation and salaries, the number of general auditors and the total amount or limit of their compensation and salaries during the current and the last business years.

11. Grant of incentive stock options:

a. The gist of necessity for granting stock options;

b. Names of the persons who are granted the stock options;

c. Method of granting stock options, classes, number of shares, price, duration, and other terms and conditions of exercise of such stock options

d. An itemized Statement of the exercisable outstanding stock options on the latest date and a summary of grant, exercise, and invalidation of stock options for last two and the current business years.

12. Merger:

a. Purposes and circumstances of the merger;

b. Gist of main contents in the merger agreement;

c. Balance sheets and income statements of the parties of the merger (acquiring companies and acquired companies) for the last business year.

13. Spin-off of corporation or merger through division;

a. Purposes and circumstances Spin-off or merger through division;

b. Gist of main contents in the schemes and the Spin-off or Merger through division agreement;

c. For Spin-off, the Balance Sheet and Income Statement of the latest business year in the original company or the part spun-off. For merger through division, the Balance Statement and Income Statement of the latest business year of the acquiring company (acquiring company and parts of merger through division) and the company spun-off

14. Assignment of business operations in full or main parts, or assumption of business operations in full or main parts of the other company (hereinafter referred to as "assumption or assignment of business" in this subparagraph);

a. Address, name (corporate name) and principal executive officer of the other party to the assumption or assignment of business;

b. Circumstances of such assumption or assignment, and the main contents of the contract; and

c. Summary of ongoing or pre-existed interest of conflicts with the other party of the assumption and assignment.

15. Share Exchange or Stock Transfer under Chapter 5 of Financial Holding Company Act or Part 3 Chapter 4 Section 2 of Corporation Act.

a. Purposes and circumstances of Share Exchange or Stock Transfer.

b. Summary of contracts for Share Exchange or Stock Transfer.

c. Contents and exercise methods of dissenter's appraisal right.

d. If Article of Incorporation of one party includes the provision for Board of Directors' approval in stock transfer while the other does not, a statement to such effect.

16. Transfer of the reserves into stated capital or issue of new shares which goes with such transfer;

a. Amount to be transferred into stated capital;

b. Classes and number of newly issued shares;

c. Allotment ratio, basis date of allotment, and outset date of dividends of newly issued shares.

17. Granting preemptive right to persons other than existing shareholders;

a. Summary of necessity to grant the preemptive right to such persons;

b. Class, number, issuing price, and payment duration of the subscribed share subject to the preemptive right.

18. Issue of shares with below par under Article 191-15 of the Act.

a. Summary of necessity and circumstances of the issue of shares with below par

b. Classes, number, issuing price and payment duration of shares issued below par

c. If there is completely amortized capital issued below par, the details of latest shares issued below par.

19. Reduction of Capital

a. Reasons of the reduction of capital

b. Methods of the reduction of capital

c. Classes, number, reduction ratio and basis date of shares with main purpose of reduction of capital

20. When subparagraphs to be discussed in the general shareholders' meeting are not mentioned in subparagraphs 1 through 19, the summary of those items.

§138. Omission of Description

If the information required in the reference documents mentioned in Article 137 has been already published in The Official Gazette or newspapers, etc. it may be omitted. In this case, the date of publication of The Official Gazette or the title of such newspapers in which such information is in shall be accurately stated in the reference documents.

§139. Prior Filing and Order to Correct

(1) The solicitant shall, when sending the copies of reference documents and proxy forms to the solicited pursuant under Article 85 paragraph (3) of the Decree (including fax submission, together with the address ,phone number and fax number), deliver such copies to the FSC two days prior to the keeping date at the place prescribed in Article 36-21 of the Enforcement Regulation .

(2) The FSC may order a correction on the reference documents and proxy forms received under paragraph (1), if they are considered to have any of the reasons prescribed in Article 85 paragraph (4) .

§140. Disclosure of Reference Documents etc.

Any person soliciting proxy exercise of voting rights under Article 85 paragraph (1) of the Decree shall disclose the copies of the reference documents and proxy forms from the keeping date at the place prescribed in Article 36-21 of the Enforcement Regulation until the completion of the general shareholders' meeting,

Section 5.

Approval for Acquisition of Stocks Issued by Public Corporations

§141. Application for Approval for Acquisition of Block Shares

Any person intending to acquire shares issued by public corporations exceeding the limits prescribed in Article 200 paragraph (1) of the Act shall apply to the FSC for the approval to acquire block shares by submitting an application form attached with the following subparagraphs :

1. A copy of family register or transcript of company register;

2. A document certifying that a seal is registered;

3. Statement of reasons for the acquisition of stocks;

4. If the person intends to acquire stocks from the issuer exceeding the shareholding ratio of the largest shareholders, the opinion statement of the largest shareholder.

§142. Acquisition of Block Shares Deemed Approved

(1) The shares acquired exceeding the limits prescribed in Article 200 paragraph (1) of the Act due to one of the followings shall be deemed to have been acquired upon obtaining the approval from the FSC:

1. Merger, inheritance, or testamentary gift;

2. Transfer of reserves into stated capital or share dividends;

3. Stated capital increase with consideration (limited to acquisitions through the exercise of shareholder rights)

4. Take-over of the shares forfeited by shareholders other than the largest shareholder (the shareholder who owns more than 10/100 of the shares including the shares of specially-concerned person; if there is no person falling thereunder the largest shareholder).

(2) The shares which are owned, exceeding the ratio prescribed in Article 200 paragraph (1) subparagraph 2 of the Act, by a shareholder other than the shareholder, who owns 10/100 or more shares of the total issued shares, at the time a public corporation registers under Article 3 of the Act, shall be considered as acquired by obtaining the approval of the FSC.

§143. Report on Acquisition of Block Shares

(1) Any person who has acquired shares by obtaining the approval of the FSC, shall submit the report on acquisition of block shares to the FSC within ten days after the expiration of the acquisition period

(2) The document certifying the fact of acquisition of shares shall be attached when reporting the acquisition of shares under the provisions of paragraph (1). In this case, the statement of reasons shall be attached if the shares are not acquired as approved by the FSC.

§144. Copies of Reports, etc. to be Submitted and Disclosure

Applicants for the acquisition of shares issued by public corporations shall submit two copies of the application for approval of the acquisition of block shares and the report on the acquisition of block shares to the FSC; and the FSC shall publish such documents for a year from the date of receipt.

Section 6.

Administrative Actions by the FSC

§145. Administrative Actions by the FSC

(1) When there are false statements or omissions of important facts in tender offer statement, amended tender offer statement, statement on change of block shares, power of attorney and soliciting documents concerning the solicitation of proxy for exercise of voting rights, application for approval of acquisition of block shares, report on acquisition of block shares; or there were not submitted or if a tender offerer, filing person, person soliciting, or the related person has violated the Act, the Decree, or order of the FSC under the provisions of this Chapter, the FSC may take the following administrative actions against such persons:

1. Order to publish and correct the fact;,

2. Suspension or prohibition of the tender offer;

3. Recommendation for the dismissal of officers;

4. Public announcement on the actions taken as a result of violation of the Act; <Amended March 19, 2003>

5. Collection of a memorandum;

6. Indictment or notice to investigation authorities about violation of the Act;

7. Warning or attention;

8. Imposition of surcharge.

(2) Article 34 paragraph (2) shall be applied to the case of paragraph (1)

§146. Delegation of Power

The FSC shall delegate to the Governor the following duties;

1. Receipt and disclosure of tender offer statement, amended tender offer statement, statement on revocation of tender offer, report on result of tender offer, report on holding of block shares, report of change of block shares, amended report on holding and change of block shares, power of attorney and reference documents concerning the solicitation for proxy exercise of voting rights, application for approval of acquisition of block shares and report on acquisition of block shares;

2. An order to submit the reference reports or materials to tender offerers, reporting person, solicitant, and any other related person; and investigation of the books, documents and other related things; or

3. Administrative actions referred to Article 145 paragraph (1) subparagraphs 1, 2, 4, 5 and 7.

CHAPTER X.

DECLARATIONS IN ELECTRONIC FILINGS

§147. Scope of Application

The purpose of this Chapter is to prescribe the necessary provisions for filing statements, reports, and other documents or data, etc. (hereinafter referred to as "statements, etc.") by the method of electronic submission under Article 194-2 of the Act and Article 84-28 paragraph (3) of the Decree.

§148. Definitions

The definitions of terms used in this Chapter shall be the followings:

1. The term "electronic filer" indicates the person who is obliged to file statements, etc. under Article 150.

2. The term "digital signature" indicates the information generated by digital signature generation key through the use of asymmetric encryption method to confirm the identity of an electronic filer who has previously submitted electronic filings and to check whether it is possible to change electronic filings, which are unique.

3. The term "asymmetric encryption method" indicates the encryption method which the key to be used for encrypting information is different from the one to be used for restoring the encrypted information.

4. The term "digital signature generation key" indicates the electronic information to be used for digital signature.

§149. Relations with Other Regulations

Provisions not determined in this Chapter related to filing the statements, etc. by the method of electronic submission shall follow those determined by the FSC or SFC.

§150. Electronic Filings Subject to Application

The statements, etc. to be filed electronically in this Chapter shall be one of the followings:

1. Disclosure documents to be submitted to the FSC or SFC under the Act, the Decree and other statutes; and

2. Audit completion reports to be submitted to the FSC under Article 36-19 of the Enforcement Regulation, and reports on the completion of audit contracts under Article 16 paragraph (2) of the Regulation on External Audit of Corporations.

§151. Operation of the Data Analysis, Retrieval and Transfer System(DART)

(1) The Governor shall operate the DART to enable it to receive the statements, etc. electronically under Article 150.

(2) The Governor may allow the general public to use the electronically received statements, etc. through the computer network.

(3) The Governor may operate the DART by entrusting the operation of such system to an outside institution despite of provisions in paragraph (1).

§152. Registration of Electronic Filer

(1) An electronic filer shall register his personal information in advance with the FSS as stipulated by the Governor. These shall also apply in spite of any changes.

(2) The Governor shall provide the electronic filer with his ID number and any other necessary information, when an electronic filer has registered under the provisions of paragraph (1)

§153. Submission, etc. of Electronic Filings

(1) The electronic filer shall prepare and submit electronic filings according to the DART Filer Manual which is determined by the Governor,

(2) The electronic filer shall include matters identifying the electronic filer and other necessary information for receiving, classifying, and handling in statements, etc. filed electronically.

(3) The electronic filer may file the documents which are admitted by the Governor to be unable to include in electronic filing from the attachments of the statements, etc. in paper or through any other appropriate electronic media.

§154. Effectiveness, etc. of Digital Signature

(1) The electronic filer shall enter his digital signature if statements, etc are to be submitted electronically under Article 155.

(2) It shall be deemed that the electronic filer has signed and sealed when the digital signature is entered under paragraph (1),

(3) When the filer submits any statements, etc. electronically which are signed or sealed by any other person, the filer shall retain the paper documents for the disclosure period as prescribed in the relevant statutes and the regulations of the FSC, and if the Governor requests, he shall immediately furnish them. However, provisions under Article 161 are not applicable to this.

§155. Registration of Digital Signature

The electronic filer shall register the digital signature as determined by the Governor when intending to use digital signature under Article 154

§156. Authentication of Digital Signature

(1) The Governor shall issue an authentication certificate of digital signature when an electronic filer applies for registration under Article 155.

(2) The electronic filer shall not use his digital signature which is authenticated under paragraph (1), for any other purposes than submission of electronic filings mentioned in Article 150. However, these provisions shall not apply to the cases where any filings stipulated in this Chapter are submitted to the relevant institutions, such as the KSE, KSDA, or KICPA (hereinafter referred to as "the relevant institutions" in this Chapter).

§157. Change of Digital Signature

The electronic filer, when intending to change his digital signature, shall apply for the abolition of the authentication certificate already issued by connecting to public announcement system and obtain a new authentication certificate under Article 155.

§158. Abolition of Digital Signature

The Governor shall abolish the digital signatures in any followings occur:

1. Where the electronic filer applies for the abolition of his digital signature with proper reasons;

2. Where the death, dissolution adjudication of disappearance and dissolution of the electronic filer is declared;

3. Where the digital signature generation key of an electronic filer is lost, damaged, stolen, or taken outside; and

4. Where there is no use to submit any electronic filings

§159. Omission of Graphics, Images, etc.

(1) An electronic filer may omit graphics or photographs, etc. not suitable to included in an electronic filing. In this case, the electronic filer shall include an accurate description of the omitted materials for future reference to the omitted graphics or photographs.

(2) An electronic filer shall retain the omitted graphics or photographs, etc. during the period for disclosure required under relevant statutes or FSC regulations, and shall, when requested by the Governor, promptly furnish them.

§160. Receipt of Electronic Filings and Notice of Receipt

(1) If the statements, etc., which are submitted in electronic filing, have not been prepared and submitted in accordance with the DART Filer Manual under Article 153 paragraph (1), the Governor may refuse to receive such statements, etc.

(2) In case an electronic filing is given a receipt number through DART within the business hours of the FSS, the electronic filing shall be deemed received on the day.

(3) The Governor shall notify electronic filers of the receipts or denials of receipt through computer network.

§161. Documents to be Prepared by Persons Other Than Electronic Filers

(1) In the event of documents to be attached to statements, etc. as under Article 150, the documents to be prepared by persons other than an electronic filer, such as Auditors, etc., shall be furnished to an electronic filer by such persons after preparing them pursuant to the provisions under Articles 152 through 159.

(2) The scope of the documents to be prepared by persons other than electronic filers under paragraph (1) shall be determined by the Governor.

§162. Transmission, etc. of Electronic Filings to Relevant Institutions

(1) The Governor may transmit statements, etc. filed electronically to other relevant institutions.

(2) In case the statements, etc. submitted under paragraph (1) are transmitted and delivered to relevant institutions, such statements shall be deemed submitted to such relevant institutions by an electronic filer.

(3) The Governor may determine the method of transmission of statements, etc. submitted pursuant to this Regulation, the operation of DART, etc., or any other matters necessary, after consulting with the relevant institutions.

§163. Number of Electronic Filings for Submission

In case an electronic filer has submitted statements, etc. electronically, it shall be deemed that the requirements in the relevant statutes and FSC regulations of the number of copies for disclosure documents have been satisfied.

§164. Submission under System Failures in the DART

(1) In case a filer cannot submit electronic filings under this chapter due to any unanticipated technical difficulties in the DART, he or she shall submit the statements, etc. under Article 150 in paper format or by facsimile, etc. to the FSS and other relevant institutions.

(2) When submitting to the FSS any statements, etc. in paper format or by fax, etc. pursuant to paragraph (1), a corresponding electronic document file shall be attached thereto.

(3) When the DART is restored, the Governor shall make an immediate entry and transmission of the electronic document file submitted under paragraph (2) in the DART.

CHAPTER XI.

SUPPLEMENTARY PROVISIONS

§165. Determination of Formats

The Governor may determine the formats for disclosure documents and other matters necessary in relation to the implementation of this Regulation.

Addenda

(December 29, 2000)

§1. Effective Date

This Regulation shall be effective on the date of promulgation.

§2. Repeal of Previous Regulations and Interim Measures

(1) As of the effective date of this Regulation, the following regulations shall be repealed: the Regulation on Registered Corporations, Regulation on Registration Statement of Securities Issuance, Regulation on Securities Issuance by Foreign Corporations, Regulation on Securities Underwriting Business, Regulation on Financial Management of Listed Corporations, Regulation on Reporting of Material Matters on Management and Submission of Annual Report by Listed Corporations, Regulation on Reporting of Merger and Acquisition of Lifted Corporations, Regulation on Acquisition and Disposal of Treasury Stocks by Listed Corporations, Regulation on Disclosure of Changes in Corporate Governance, and Regulation on Reporting, etc. in Electronic Filings.

(2) Any receipt, acceptance, registration, revocation of registration, determination of formats, designation, approval, order, disposition, administrative action, recognition, calculation, request for submission, disclosure, etc, executed pursuant to previous Regulations before the enforcement of this Regulation by the FSC, the SFC, or the Governor shall be deemed executed by the FSC, the SFC, or the Governor pursuant to this Regulation.

(3) With respect to any acts subject to administrative actions or disciplinary actions by the FSC, the SFC, or the Governor as stipulated in previous Regulations before the enforcement of this Regulation, the FSC, the SFC, or the Governor may take administrative actions or disciplinary actions pursuant to this Regulation.

§3. Information Required in Relation to Solution of Y2K

Article 9 paragraph (2) subparagraph 1 item j and subparagraph 2 item g of the Regulation on Registration Statement of Securities Issuance and Article 7 paragraph (1) subparagraph 10 item h of the Regulation on Material Matters on Management and Submission of Annual Reports by Listed Corporations shall apply to securities registration statement, annual report, and semiannual report containing financial statements of the business year in which December 31, 1999 is included.

§4. Application Submission of Paper Documents

(1) When submitting electronic filings pursuant to Article 150 before December 31, 2000, the filer shall also submit the documents in paper format at the same time. However, these provisions shall not apply to submission of annual report, semiannual report, and audit completion report by a stock-listed corporation and the matters to be reported pursuant to Article 186 paragraph (1) of the Act.

(2) When an electronic filer has already submitted documents to be attached under Article 153 paragraph (3), he or she is not obliged to submit the documents under paragraph (1) in paper format.

§5. Relations with Other Regulations

In case any other regulations make references to previous Regulations while this Regulation is in effect, the references shall be viewed as to this Regulation or corresponding provisions, if any, of this Regulation.

Addenda

(August 1, 2001)

§1. Effective Date

This Regulation shall be effective from the date of promulgation.

§2. Applicability

The revised or amended provisions under Articles 20, 40, 57, 61, 79, 80, 89, 103, 123, 126, and 137 shall apply to statements (including amended statements), reports, etc. submitted after the effective date of this Regulation.

Addenda

(September 24, 2001)

§1. Effective Date

This Regulation shall be effective on September 19, 2001.

§2. Interim Measures

The amended provisions of Article 106-2 paragraph (1) shall apply to registration statement on acquisition of treasury stocks submitted even before the Chairman's approval under Article 106-2 paragraph (2).

Addendum

(October 31, 2001)

This Regulation shall be effective from the date of promulgation.

Addenda

(December 19, 2001)

§1. Effective Date

This Regulation shall be effective from the date of promulgation.

§2. Applicability

The amended provisions of Article 127-2 shall apply to registration statements on tender offer from the date of promulgation.

Addenda

(April 4, 2002)

§1. Effective Date

This Regulation shall be effective from the date of promulgation.

§2. Interim Measures

(1) Where a stock-listed corporation, etc. has submitted securities registration statement before the date of promulgation to issue convertible bonds or bonds with warrant, or has reported on issuance contract pursuant to the provisions of Article 69 to issue convertible bonds or bonds with warrant overseas, the amended provisions of Article 61, Article 61-2, Article 62 and Article 63 shall not apply.

(2) Where the first date for exercise of stock purchase option has arrived before the date of promulgation of this Regulation, the amended provisions of Article 109 paragraphs (2) and (3) shall be so applied as where the first date for exercise of stock purchase option shall be the date of issuance following the first exercise of stock purchase option after the date of promulgation of this Regulation.

Addendum

(May 24, 2002)

This Regulation shall be effective from the date of promulgation.

Addenda

(August 1, 2002)

§1. Effective Date

This Regulation shall be effective from the date of promulgation.

§2. Applicability

The amended provisions of Article 13, Article 15, Article 17 and Article 29 shall apply to securities registration statement (including the amended) and merger application submitted to the FSC after the date of promulgation.

Addenda

(December 18, 2002)

§1. Enforcement Date

This Regulation shall be effective on the date of promulgation.

§2. Applicable Cases

The amended provisions of Article 106 shall be applied to the Redemption of Shares Out of Profit Report submitted to the FSC pursuant to Article 69 paragraph (1) subparagraph 1 item a and the Treasury Stock Acquisition statement submitted to the FSC pursuant to Article 102 after the enforcement of this Regulation.

Addendum

(January 3, 2003)

This Regulation shall be effective on the date of promulgation.

Addendum

(January 29, 2003)

This Regulation shall be effective on the date of promulgation.

Addenda

(March 19, 2003)

§1. Enforcement Date

This Regulation shall be effective on the date of promulgation.

§2. Applicable Cases

The amended provisions of Article 69 paragraph (1) subparagraph 7 and Article 19 shall apply to the listed corporations or the registered corporations that have reached resolution on cash dividend or received an audit report from the auditor after the enforcement date of this Regulation.