Entering into Merger Agreements

A merger agreement shall be entered into by the representative directors of merged companies. Certain provisions set forth in the Commercial Act must be incorporated in the agreement. A merger agreement is interpreted as a conditional agreement requiring the approval of a shareholders' special resolution to become effective.

Shareholders' Approval

Mergers, other than short-form mergers or small-scale mergers which require only Board of Directors' approvals, shall be approved by shareholders' special resolutions. Where all the shareholders of the united companies approve the merger or the remaining companies are holding not less than 90% of the outstanding shares of the united companies, the Board of Directors' resolutions of the united companies replace the shareholders' special resolutions(Short-Form Mergers).
When remaining companies will issue not more than five percent(5%) of their outstanding shares because of the mergers, the Board of Directors' resolutions of the remaining companies replace the shareholders' special resolutions(Small-Scale Mergers).
Even if shareholders or Board of Directors disapprove of the mergers, the other parties to the mergers are not entitled to seek damages against the other parties unless there is a provision in the agreements granting such a right.

Shareholders' Right of Request to Purchase Their Shares

When Board of Directors resolve mergers, any shareholders, who submit written notices to the companies of their disapproval of the mergers prior to the shareholders' meeting, may request the companies to purchase their shares within twenty days of shareholders' resolutions.

Measures to Protect Creditors

Merged companies shall give notices to their creditors within two weeks of shareholders' resolutions that they are entitled to submit disagreements to the mergers within certain periods. The companies shall pay off debts or provide securities to the creditors who submitted such disagreements.