[Stock Options] Stock Option Contract Legal Review

Law firm Veat conducted a legal review of stock option contracts based on a request from A, a leading artificial intelligence big data company.

Law firm Veat meticulously examined the stock option grant agreements of A and B, which are in a joint venture relationship, and reflected the contents of the joint venture agreement in accordance with the guidelines published by the Ministry of SMEs and Startups. 

In particular, Law firm Veat added provisions to grant the right of first purchase to the controlling shareholder when granting stock options within the joint venture agreement, and to allow the stock option grantees to exercise the right of hot-selling upon a change of controlling shareholder, and provided guidance on amendments to the articles of association to enable them to receive tax special treatment under the “Special Act on Promotion of Venture Companies.” 

Furthermore, Law firm Veat provided separate contracts for stock option agreements for grantees with over 5% and under 5% grants, considering that the vesting period would change depending on the amount of stock options granted.

Regarding whether a non-executive director and registered director of a subsidiary, who is also a non-executive director of the parent company, could be granted stock options under the “Special Act on Promotion of Venture Companies,” Law firm Veat thoroughly reviewed related laws, including the “Special Act on Promotion of Venture Companies” and the “Act on Commercial Transactions,” and provided guidance.

Since stock option plans require the review of not only stock option contracts between a company and its employees but also various issues such as articles of association, it is recommended to proceed with the advice of a legal expert with extensive experience and knowledge in corporate law. Especially in the case of a joint venture, it can be effectively resolved with the help of a legal expert in complex matters such as various stakeholders and international contracts.

Law firm Veat is providing legal consultation based on the experience and know-how of numerous companies that have dealt with many cases.

If you need legal advice on stock option contracts, please feel free to contact Law firm Veat at any time.

Thank you.

Law firm Veat.