Daum

IR-Shareholders

Amended Mar. 30, 2011

CHAPTER I. GENERAL PROVISIONS
Article 1. (Name)
The name of the Company is Chusik Hoesa Daum Communications, which shall be expressed in English, “Daum Communications Corp.” (the “Company”).
Article 2. (Objectives)
The objectives of the Company shall be as follows
  1. Development, manufacture and sales of computer programs;
  2. Search, development and sales of databases;
  3. Rental and sales business of computers and accessories;
  4. Development, manufacture and sales of multimedia programs;
  5. Information processing and value-added network service businesses and special category telecommunications operator;
  6. Planning and exhibition related to culture and art fields and ancillary businesses thereto;
  7. Education and Consulting business;
  8. Electronic commerce related distribution business;
  9. Sales of pharmaceutical goods and health supplementary products;
  10. Provision of recruitment related information business, fee-based placement consulting business and manpower supply business; and
  11. Broadcast business including business using broadcast channel
  12. Advertising business
  13. Cartoon-publishing business
  14. Real estate rental business
  15. Game software development and supply
  16. Outdoor advertising business; and
  17. Any and all business activities and investments directly or indirectly related to each items
Article 3. (Location of the Head Office and Establishment of Branch and Other Offices)
  1. The head office of the Company shall be located in Seoul, the Republic of Korea
  2. The Company may establish branches, offices and subsidiaries within or outside of Korea by the resolution of the Board of Directors, when it is deemed necessary.
Article 4. (Method of Public Notice)
Public notice by the Company shall be given for publication in Seoul Economic Daily (or the successor newspaper thereto in case of a merger or a change in the Company name), a daily newspaper with general circulation published in Seoul or by electronic disclosure through Data Analysis, Retrieval and Transfer System operated by the Financial Supervisory Service or Korea Exchange.
Article 5. (Notices and Reports to Foreigners)
All notices and reports, required by law or these Articles of Incorporation, to be given or sent directly to foreign nationals or foreign corporations established outside Korea shall be made in English.
CHAPTER II. SHARES OF STOCK
Article 6. (Total Number of Shares of Stock)
  1. The total number of shares of stock which the Company is authorized to issue (hereinafter called “Authorized Shares”) is one hundred million (100,000,000) shares. The par value per share issued by the Company shall be five hundred (500) Won per share.
  2. Any increase in Authorized Shares shall be subject to the resolution of general meetings of shareholders.
  3. The type of shares to be issued by the Company shall be common shares in registered form and preferred shares in registered form.
Article 6-2. (Number and Description of Preferred Shares)
  1. The number of preferred shares to be issued shall not exceed one half (1/2) of the total number of issued and outstanding shares. Preferred shares shall be non-voting
  2. The dividends on preferred shares shall be no less than one percent (1%) per annum of the par value as determined by the Board of Directors at the time of issuance.
  3. Preferred shares to be issued may be participating or non-participating, and accumulating or non-accumulating as determined by the resolution of the Board of Directors.
  4. If a resolution not to distribute dividends on preferred shares is adopted, then the preferred shares shall be deemed to have voting rights from the next general meeting of shareholders immediately following the general meeting at which such resolution not to distribute dividends on preferred shares is adopted to the end of the general meeting of the shareholders at which a resolution to distribute dividends on such preferred shares is adopted.
  5. In case the Company issues new shares by rights offering, bonus issue or declares stock dividend, then the class and number of new shares to be allocated with respect to the preferred shares shall be determined by the resolution of the Board of Directors.
  6. Whether or not to have the duration of preferred shares shall be determined by the resolution of the Board of Directors. If there is any duration of preferred shares, such duration shall be no less than one (1) year and no more than ten (10) years from the date of issuance, and such duration period shall be determined by the Board of Directors at the time of issuance. Preferred shares shall be converted into common shares upon the expiration of the duration period. However, if the holders of the preferred shares do not receive dividends they are entitled to during the duration period, then the duration period shall be extended until such dividends are paid in full. In such a case, Article 11 shall apply mutatis mutandis with respect to the distribution of dividends for new shares issued upon conversion.
  7. The Company may issue preferred shares which can be converted into common shares (“Convertible Preferred Shares”) or preferred shares which can be redeemed out of the profits available for distribution during certain period (“Redeemable Preferred Shares”), as determined by the resolution of the Board of Directors at the time of issuance.
  8. When the Company issues Convertible Preferred Shares, the shares to be issued upon conversion will be common shares, conversion price shall be more than the par value of common shares as determined by the Board of Directors, and conversion period shall be from the date that one month has elapsed after the date of issuance of such Convertible Preferred Shares as determined by the Board of Directors. In such a case, Article 11 shall apply mutatis mutandis with respect to the distribution of dividends for new shares issued upon conversion.
  9. When the Company issues Redeemable Preferred Shares, redemption price shall be more than the par value of such preferred shares as determined by the Board of Directors, redemption period shall be from the date that three (3) years have elapsed after the date of issuance of such Redeemable Preferred Shares until ten (10) years have elapsed as determined by the Board of Directors, and such Redeemable Preferred Shares shall be redeemed out of the profits available for distribution as determined by the Board of Directors.
  10. When the Company issues preferred shares, the preferred shares may have mixed features as described in Paragraphs (2) through (9) above as determined by the resolution of the Board of Directors.
  11. With respect to preferred shares, the Board of Directors may determine at the time of issuance specific terms for the allotment of shares upon issuance of new shares, upon consolidation, split or cancellation of shares or upon merger or spin-off of the Company.
Article 7. (Types of Share Certificates)
Share certificates shall be in registered form, and may be issued by the Company in 8 denominations of one (1), five (5), ten (10), fifty (50), one hundred (100), five hundred (500), one thousand (1,000) and ten thousand (10,000) shares.
Article 8. (Issuance of Additional Shares)
  1. Additional shares shall be issued pursuant to the resolution of the Board of Directors within the limit of the Authorized Shares of the Company
  2. Shareholders of the Company shall have the preemptive rights to subscribe for new shares in proportion to the number of shares held by each of them with respect to any new issuance of shares of the Company. Provided, that if any shareholder waives or loses his/her preemptive rights or if fractional shares result from the allocation of the new shares, the shares shall be disposed of in accordance with the resolution of the Board of Directors.
  3. Notwithstanding the provision of Paragraph (2), in the following instances, the Company may allot new shares to someone other than shareholders with the resolution of the Board of Directors without being subject to the above preemptive rights:
    1. In case the Company issues and allots new shares of not more than five million (5,000,000) shares to foreign investors or domestic or foreign financial institutions;
    2. In case the Company issues new shares by general public offering by the resolution of the Board of Directors in accordance with Article 165-6 of the Financial Investment Services and Capital Market Acts (“FSCMA”);
    3. In case the Company allots new shares preferentially to Employee Stock Ownership Association or the members thereof within the limit of twenty percent (20%) of the total number of new shares in accordance with the relevant laws and regulations;
    4. In case new shares are issued pursuant to an exercise of the stock option in accordance with Article 340-2 and Article 542-3 of the Commercial Law;
    5. In case the Company issues new shares for the issuance of depositary receipts (DR) in accordance with Article 165-11 of FSCMA;
    6. In case the Company issues new shares abroad to be listed on any foreign stock exchange or automated quotation system; provided, however, that such issuance is permitted by the relevant laws and regulations or regulations of KOSDAQ;
    7. In case the Company issues new shares for in-kind contribution to acquire properties necessary for business (including shares), within the limit of forty percent (40%) of the total number of issued and outstanding shares prior to such issuance;
    8. In case the Company issues new shares to domestic or foreign corporations that have strategic alliance relationship with the Company or may enter into strategic alliance relationship with the Company in connection with the management of the Company and technology within the limit of forty percent (40%) of the total number of issued and outstanding shares prior to such issuance.
Article 9. (Capital Increase by Public Offering)
  1. The Company may issue new shares of not more than thirty percent (30 %) of the total number of issued and outstanding shares by general public offering by the resolution of the Board of Directors, in accordance with the procedural requirements set forth in Article 165-6 of FSCMA.
  2. If the Company issues new shares by general public offering, the type, number and issue price of shares to be newly issued shall be determined by the resolution of the Board of Directors; provided, that the issue price of such new shares shall not be less than the price as prescribed in Article 176-8 of the Enforcement Decree of FSCMA.
Article 10. (Stock Option)
  1. The Company may grant the stock option set forth in Article 542-3, Paragraph (3) of Commercial Law to its directors, auditors and employees by a special resolution of the general meeting of shareholders or the resolution of the Board of Directors pursuant to Article 542-3, Paragraph (1) of Commercial Law, to the extent of not more than fifteen percent (15%) of the total number of issued and outstanding shares. However, the Company may grant stock option by the resolution of the Board of Directors to the extent of not more than three percent (3 %) of the total number of shares issued and outstanding
  2. In case that the stock option is granted by the resolution of the Board of Directors pursuant to Article 542-3, Paragraph (1) of Commercial Law, the stock option grant should be approved by the first General Meeting of Shareholders convened after the grant.
  3. The directors, auditors and employees who are eligible for the stock option are the persons who have contributed or have the capacity to contribute to the establishment, management, or technological innovation of the Company and the related companies’ directors, auditors and employees set forth in Article 9-1 of the Enforcement Decree of Commercial Law; provided, however, that those who fall under any of the followings shall be disqualified
    1. The largest shareholder of the Company set forth in Article 542-8, Paragraph (2), Item (5) of Commercial Law, major shareholders and any Special Related Persons (hereinafter the “Special Related Persons”); provided, however, that it shall not apply to a person who becomes a Special Related Person by being elected as an officer of the Company (including the case where such officer becomes the non-standing officer or auditor of the affiliated company);
    2. Any person who becomes a Major Shareholder of the Company by exercising his/her stock option.
  4. The shares that are to be issued or transferred at the exercise of the stock option shall be common shares in registered form. In case that the Company pays the difference between the exercise price of stock option and the market price either in cash or by shares, the calculation of such difference shall also be based on common shares in registered form.
  5. The number of directors, officers and employees of the Company who may be granted with the stock option shall not exceed ninety percent (90 %) of the total number of directors, officers and employees in office. The stock option granted to one single director, officer or employee shall not exceed ten percent (10 %) of the total number of issued and outstanding shares.
  6. The exercise period of the stock option shall be determined by the resolution of the general meeting of shareholders or the meeting of the Board of Directors in which such stock option is granted.
  7. Any person who is granted with the stock option shall be allowed to exercise such stock option only after holding office or serving for no less than two (2) years from the date of the resolution mentioned in Paragraph (1). However, in case any person who is granted with the stock option, within two (2) years from the date of resolution mentioned in Paragraph (1), deceases or retires from his/her office due to age limit, or retires or resigns from his/her office without any cause attributable to such person, such person shall be allowed to exercise the stock option within the exercise period.
  8. With respect to the distribution of dividends on newly issued shares hereunder, Article 11 shall apply mutates mutandis
  9. The Company may cancel the stock option by the resolution of the Board of Directors in any of the following cases:
    1. In case that a person to whom the stock option is granted voluntarily resigns from his/her office;
    2. In case that a person to whom the stock option is granted incurs substantial and material damages to the Company by his/her willful misconduct or negligence;
    3. In case that the relevant company is unable to comply with the exercise of the Stock Option due to its bankruptcy, etc.; or
    4. In case where any cause for cancellation set forth in the stock option agreement occurs.
Article 11. (Commencement Date of Dividends on New Shares)
If the Company issues new shares by right issue, bonus issue or stock dividend, with respect to the dividends on the new shares, the new shares shall be deemed to have been issued at the end of the fiscal year immediately preceding the fiscal year during which such new shares were issued.
Article 11-2. (Cancellation of Shares)
  1. The Company may retire and cancel its shares by the resolution of the Board of Directors out of profits available for distribution to the shareholders.
  2. The cancellation of shares pursuant to Paragraph (1) above shall be accomplished by the Company’s acquisition of treasury shares and cancellation of the same.
Article 12. (Shareholders Registry and Transfer Agent)
  1. The Company shall keep the shareholders registry in compliance with the relevant Korean laws and regulations.
  2. The Company shall retain a transfer agent for shares by the resolution of the Board of Directors. The transfer agent, location of its services, and the scope of its duties shall be determined by the resolution of the Board of Directors of the Company.
  3. The Company shall keep the shareholders registry, or a duplicate thereof, at the location where the transfer agent renders its services. The transfer agent shall handle the activities of making entries in the shareholders registry, registering the creation and cancellation of pledges over shares, and other related businesses.
  4. Those activities by the transfer agent described in Paragraph (3) shall be performed in accordance with the Regulations for Securities Agency Business of the Transfer Agent.
Articles 13. (Report of Address and Seal)
  1. Shareholders and registered pledgees shall report their names, addresses and seals or signatures to the transfer agent referred to in Article 12.
  2. Shareholders and registered pledgees who reside in a foreign country shall report to their transfer agents referred to in Article 12, the name of their appointed agents and their addresses in Korea where notices are to be delivered.
  3. The above provisions shall also apply to changes in any item mentioned in Paragraphs (1) and (2).
Article 14. (Closure of Registry of Shareholders and Record Date)
  1. The Company shall not change any record in the shareholders registry with respect to shareholders rights from January 1 to January 31 of each year. The Company shall allow the shareholders, who are of record and registered in the shareholders registry as of December 31 of each year, to exercise their rights at the ordinary general meeting of shareholders for the relevant fiscal year.
  2. The Company may, in the case of convention of an extraordinary general meeting of shareholders or in other necessary cases, shall not change any record in the shareholders registry with respect to shareholders’ rights for a period not exceeding three (3) months as determined by the resolution of the Board of Directors, or set a record date by the resolution of the Board of Directors in order to determine the shareholder who shall be entitled to exercise such rights. If the Board of Directors deems it necessary, the Company may not change any record in the shareholders registry and set the record date at the same time.
  3. The Company shall give notice for the period and date of Paragraph (2) at least two (2) weeks prior to the commencing date of the period or the record date.
CHAPTER III. BONDS
Article 15. (Issuance of Convertible Bonds)
  1. The Company may issue convertible bonds to persons other than shareholders up to an aggregate par value of two hundred billion (200,000,000,000) Won by the resolution of the Board of Directors in the each of following cases.
    1. In case the Company issues convertible bonds through a general public offering;
    2. In case the Company issues convertible bonds out of business needs, for the purpose of establishing a strategic alliance with domestic or foreign investors, or to the Employee Stock Ownership Association, etc.;
    3. In case the Company issues convertible bonds to domestic or foreign financial institutions to improve financial status or to obtain immediate funds; or
    4. In case the Company issues convertible bonds for the purpose of merger and acquisition of domestic or foreign corporation.
  2. Convertible bonds referred to in Paragraph (1) above may be issued with partial conversion rights, under which the bondholders may be allowed to convert a limited percentage of the total amount of the convertible bonds.
  3. The type of shares to be issued upon conversion and the conversion price shall be determined by the Board of Directors at the time of issuance of the relevant convertible bonds.
  4. The conversion price under Paragraph (3) shall not be lower than the par value of the shares of the Company.
  5. The conversion period shall be from the date that one (1) month has elapsed after the date of issuance of the bonds, to the date immediately prior to the redemption date of the bonds; provided, however, that in case the Company issues the convertible bonds by other means than public offering, such period shall be from the date that one (1) year has elapsed since the date of issuance of the bonds, to the date immediately prior to the redemption date of the bonds. However, the Board of Directors may adjust the conversion period within the above period by its resolution.
  6. With respect to the calculation of the interest on convertible bonds and the dividends on shares to be issued upon conversion, it shall be deemed that the relevant conversion was made at the end of the fiscal year immediately preceding the fiscal year during which the conversion is requested. Provided, that the shares converted during the issuance year of the relevant convertible bonds shall be deemed as issued on the date of issuance of the convertible bonds.
Article 16. (Issuance of Bonds with Warrants)
  1. The Company may issue bonds with warrants to persons other than shareholders up to an aggregate par value amount of two hundred billion (200,000,000,000) Won in accordance with Article 15, Paragraph (1) of these Articles of Incorporation.
  2. The Company may issue bonds with warrants to persons other than shareholders up to an aggregate par value amount of two hundred billion (200,000,000,000) Won in accordance with Article 15, Paragraph (1) of these Articles of Incorporation.
  3. The class of shares to be issued upon exercise of warrants shall be common shares in registered form. The issue price shall be determined by the Board of Directors at the time of issuance of the relevant bonds with warrants.
  4. The issue price under Paragraph (3) above shall not be lower than the par value of the shares.
  5. The period during which warrants may be exercised shall be from the date one (1) month has elapsed from the date of issuance of the bonds to the date immediately prior to the redemption date of the bonds; provided, however, that in case the Company issues the bonds by other means than public offering, such period shall be from the date that one (1) year has elapsed since the date of issuance of the bonds, to the date immediately prior to the redemption date of the bonds. However, the Board of Directors may adjust the period within the above period by its resolution.
  6. With respect to the distribution of dividends or interests on new shares to be issued upon exercise of warrants, it shall be deemed that the new shares were issued at the end of the fiscal year immediately preceding to the fiscal year during which the exercise of warrants occurred. Provided, that the new shares issued during the issuance year of the relevant bonds with warrants shall be deemed as issued on the date of issuance of the bonds.
Article 16-2. (Applicable Provisions for Issuance of Bonds)
The provisions of Article 12 (Shareholders Registry and Transfer Agent) and Article 13 (Report of Address and Seal) shall apply mutates mutandis with respect to the issuance of bonds.
CHAPTER IV. GENERAL MEETING OF SHAREHOLDERS
Article 17. (Types of General Meeting)
  1. General meetings of the shareholders of the Company shall be of two types of ordinary and extraordinary general meetings.
  2. Ordinary general meetings of shareholders shall be convened within three (3) months after the close of each fiscal year.
  3. Extraordinary general meetings of shareholders shall be convened at any time when it is deemed to be necessary by the resolution of the Board of Directors in accordance with Korean laws and regulations.
  4. All general meetings of shareholders shall be conducted in Korean or, if necessary, in both Korean and English.
Article 18. (Convening of General Meeting)
  1. The convening of all general meetings of shareholders shall be determine by the resolution of the Board of Directors and the place for a general meeting of shareholders shall be the place of head office or its adjacent place unless the Board of Directors makes the resolution otherwise. However, the place for a general meeting of shareholders could be any other place within or outside of Korea as determined by the resolution of the Board of Directors.
  2. In convening a general meeting of shareholders, written or electronic notice thereof shall be dispatched by the Representative Director to the shareholders and other persons entitled to receive such notice at least fourteen (14) days prior to the date set for such meeting; provided, however, that the above period may be shortened with a written consent of all shareholders of the Company, received (by mail, hand delivery, air courier, facsimile, telex, or telegraph) before the meeting. The notice shall state with specificity the agenda of the meeting and the time and the place of the meeting. The general meeting of shareholders may not resolve matters other than those stated in the notice of the meeting, unless all shareholders whether present or not, unanimously agree to be otherwise.
  3. Notwithstanding the provision in Paragraph (2) above, written notice to shareholders, who hold not more than one percent (1%) of the total number of issued and outstanding shares with voting rights, may be substituted for by at least two (2) public notices on the Seoul Economic Daily and the Herald Business circulated in Seoul at least two (2) weeks prior to the meeting or by electronic disclosure through Data Analysis, Retrieval and Transfer System operated by the Financial Supervisory Service or Korea Exchange.
  4. The above notice or public notice shall include items in accordance with Article 542-4, Paragraph (3) of Commercial Law. However, notice or public notice thereof may be substituted for by posting the items on its internet homepage and keeping them at the head office and branches of the Company, the transfer agent company, the Financial Supervisory Commission and the Korea Securities Dealers Association.
Article 19. (Chairman of Meeting)
The Representative Director shall serve as Chairman of General Meetings of Shareholders. In the event that the Representative Director is absent or fails to serve as Chairman of any General Meetings of Shareholders, the Director designated by the Board of Directors shall act as the Chairman.
Article 20. (Resolution of General Meeting)
  1. Except as otherwise provided by law or these Articles of Incorporation, all resolutions of general meetings of shareholders shall be adopted by the affirmative vote of the majority of shareholders present at the meeting; provided, however, that such votes shall represent at least one fourth (1/4) of the total number of issued and outstanding shares of the Company.
  2. Notwithstanding the provision of Paragraph (1), the resolution shall be adopted by the affirmative more than two thirds (2/3) of the votes represented at the meeting and more than one third (1/3) of the total number of issued and outstanding shares on the following events:
    1. Any material change in the business objectives of the Company;
    2. Reduction in the paid-in capital and the method thereof;
    3. Effecting any dissolution, merger or consolidation into or with other company;
    4. Transfer of the whole or any significant part of the assets or business of the Company or the establishment of security thereon, or acquisition of the whole asset or business of any other person or company;
    5. Amendment of these Articles of Incorporation;
    6. Execution, amendment or termination of agreements for lease or management delegation of the whole or any significant part of the business of the Company, agreements to share the profits and losses from operations and any other agreement similar thereto;
    7. Issuance of the shares at a price lower than the par value;
    8. Continuance of business after dissolution of the Company; and
    9. Any other matters required to be resolved by a special resolution of general meeting of shareholders in accordance with the Korean Commercial Code and relevant laws and regulations.
  3. Notwithstanding the provisions of Article 8, Paragraphs (1) through (3) and Articles 15 and 16, the following shall require approval of the shareholders meeting:
    1. If the issuance of new shares will result in a change of control of the Company. Here the “control” shall mean the power to exercise directly or indirectly effective influence on the management and policy of the Company by holding voting shares of the Company, by contract or otherwise.
    2. In connection with the acquisition of the stock or assets of another company, if
      1. any director, officer or substantial shareholder of the Company has a five percent (5%) or greater interest (or such persons collectively have a ten percent (10%) or greater interest), directly or indirectly, in the company or assets to be acquired or in the consideration to be paid in the transaction or series of related transaction and the present or potential issuance of common shares, or securities convertible into or exercisable for common shares, could result in an increase in outstanding common shares or voting power of five percent (5%) or more, or
      2. where, due to the present or potential issuance of common shares, or securities convertible into or exercisable for commons shares, other than a public offering for cash:
        1. the common shares have or will have upon issuance voting power equal to or in excess of forty percent (40%) of the voting power outstanding before the issuance of shares or securities convertible into or exercisable for common shares; or
        2. the number of common shares to be issued is or will be equal to or in excess of forty percent (40%) of the number of shares or common shares outstanding before the issuance of the shares or securities.
    3. In connection with a transaction other than a public offering involving:
      1. the sale or issuance by the Company of common shares (or securities convertible into or exercisable for common shares) at a price less than the greater of book or market value which together with sales by directors, officers or substantial shareholders of the Company equals forty percent (40%) or more of common shares or forty percent (40%) or more of the voting power outstanding before the issuance; or
      2. the sale or issuance by the Company of common shares (or securities convertible into or exercisable for common shares) equal to forty percent (40%) or more of the common shares or forty percent (40%) or more of the voting power outstanding before the issuance for less than the greater of book or market value of the shares.
Article 21. (Voting Right)
  1. Every shareholder shall have one vote for each share he/she owns.
  2. A shareholder may exercise his/her vote by proxy. In such case, the proxy shall present evidentiary documents for his/her power of representation prior to the opening of the general meeting of shareholders.
  3. A shareholder of the Company may vote its shares separately rather than as a block but only in case that such shareholder holds in trust shares belonging in trust or on some other basis. Any shareholder who wishes to split his votes shall give at least three (3) days' prior written notice to the Company of such intention, the reason thereof, and the number of shares it holds for others in trust or on another basis.
Article 22. (Postponement or Adjournment of General Meeting of Shareholders)
A resolution for postponement or adjournment may be adopted at a general meeting of shareholders. In such cases, the provisions of Article 21, Paragraph (2) shall not apply; provided that such postponement or adjournment shall not exceed fourteen (14) days.
Article 23. (Minutes of General Meeting of Shareholders)
The substance of the course and proceedings of a general meeting of shareholders and the results thereof shall be recorded in minutes in Korean and English, on which the names and seals of the chairman and the directors present at the meeting shall be affixed or be signed by such persons, and shall be kept at the head office and branches of the Company.
CHAPTER V. DIRECTORS AND OFFICERS
Article 24. (Number of Director)
The Company shall have no more than six (6) directors.
Article 25. (Election of Directors)
  1. Directors shall be elected at the general meetings of shareholders and vacancies may be filled by the resolution at any general meeting of shareholders.
  2. The cumulative voting system as set forth in Article 382-2 of the Korean Commercial Code shall not apply to the case of electing two (2) or more directors.
Article 26. (Term of Directors)
  1. The term of office of the directors shall not be more than three (3) years as determined by the resolution of the Board of Directors; provided, however, that the term of office shall be extended until the close of the ordinary general meeting of shareholders convened in respect of the last fiscal year of such term of office.
  2. The term of office of a director elected to fill a vacancy shall be the remainder of the term of office of his predecessor.
Article 27. (Representative Director and Other Officers)
  1. The Board of Directors shall elect from its members a Representative Director.
  2. The Company shall have one or more Representative Directors.
  3. The Board of Directors may appoint such other officers as deemed necessary and appropriate to operate the Company. Such appointed officers shall not have the right to execute his/her duties and shall ordinarily report the operation of business to the Representative Director. The Board of Directors may decide on the hiring criteria of the management required for the daily operation of the Company.
Article 28. (Audit Committee)
The Company shall have an audit committee within the Board of Directors.
  1. The audit committee shall consist of at least three (3) directors.
  2. All of such directors shall be outside directors.
  3. Any matters not specified in these Articles of Incorporation in relation to the constitution, operation and authority of the audit committee shall be decided by the audit committee charter, resolutions of Board of Directors and in accordance with the relevant laws and regulations.
Article 29. (Compensation of Directors, etc.)
The amount of compensation and bonus for the directors shall be determined by the resolution of the general meeting of shareholders. Severance payments for directors shall be made in accordance with the Regulations on Severance Payment for Directors as adopted by the resolution of the general meeting of shareholders.
CHAPTER VI. BOARD OF DIRECTORS
Article 30. (Constitution of the Board of Directors)
  1. The Board of Directors shall consist of directors.
  2. The Board of Directors shall have the power and authority to make all decisions and contract with respect to all important matters of the Company. Any annual business plan or any important change in such plan shall be resolved by the Board of Directors.
  3. The Board of Directors may establish the following committees within the Board of Directors, and delegate relevant power and authority to such committees to execute certain matters proscribed under the regulations of the Board of Directors.
    1. Audit Committee pursuant to Article 8
    2. Compensation Committee
    3. Nomination Committee
    4. Such other committees as the Board of Directors deems necessary
  4. Any detailed matters on the establishment, constitution, and operation of the committees set forth above may be decided by the regulations of the Board of Directors, the charters of the relevant committees and/or the resolution of the Board of Directors.
Article 31. (Convening of the Board of Directors)
  1. Meetings of the Board of Directors shall be called by the Chairman of the Board of Directors. Each director may request the Chairman of the Board of Directors to call a meeting of Board of Directors by specifying the agenda and the reasons therefore. The procedures of convening meetings of the Board of Directors may be omitted if provided otherwise in the regulations of the Board of Directors. If the Chairman of the Board of Directors fails to convene a meeting without any justifiable reason or due to extreme hardship to convene such meeting, the director who made the request to convene a meeting may call directly the meeting of the Board of Directors.
  2. The meeting of the Board of Directors may be held within or outside of Korea.
  3. (3) Notice for the meetings of the Board of Directors shall be dispatched by the Chairman of the Board of Directors, or, by if any, a director separately appointed by the Board of Directors for that purpose, to individual directors at least seven (7) days prior to the date set for any such meeting. The notice shall specify the agenda to be discussed; provided, however, that the above period may be shortened or may not be required with the written consent (by mail, hand delivery, air courier, facsimile, telex, or telegraph) of all directors before any such meeting. At such meetings, the directors may act only with respect to matters set forth in said agenda, unless all directors, whether present or not, unanimously agree to do otherwise.
  4. If any director is required to travel from another city or country in order to attend a Board of Directors meeting, the Company shall pay all reasonable travel and accommodation expenses incurred by him/her in connection with the meeting.
  5. All meetings of the Board of Directors shall be conducted in both English and Korean.
Article 32. (Chairman of Meeting)
  1. The Chairman of the Board of Directors shall be appointed by the Board of Directors. In the event that such Chairman is unable to perform his/her duties due to inevitable circumstances, such duties shall be performed by the Representative Director. If the Representative Director is also unable to perform his/her duties due to inevitable circumstances, the Board of Directors may appoint a temporary Chairman.
  2. In the case of a tie vote at the time of the resolution of the Board of Directors, the Chairman shall not have the right to vote to decide.
Article 33. (Quorum and Adoption of Resolutions)
  1. A quorum for the holding of a meeting of the Board of Directors shall be at least a majority of all the directors. Resolutions of the Board of Directors shall be adopted by an affirmative vote of a majority of the directors present.
  2. No director who has a special interest in a matter on the agenda for resolution can exercise his/her vote upon such matter. Provided, that any director shall not be considered to have a special interest in the relevant matter nor lose the capacity to exercise the voting right due to the reason that such director is the nominee of the shareholders who have an interest in the matter.
  3. The board of directors may allow all or part of the directors in office to exercise his/her and/or their voting rights by means of telecommunication through which they may transmit and receive visual images and voices at the same time without being physically present at a meeting of the board of directors. In such case, the concerned director(s) shall be deemed to have attended the meeting of the board of directors in person.
  4. Other matters related to the composition, meeting and authority of the Board of Directors shall be determined by the regulations of the Board of Directors.
Article 34. (Minutes of Meeting of the Board of Directors)
Minutes shall be prepared with regard to the proceedings of a meeting of the board of directors. The agenda, the progress of the meeting, the results thereof, the name of any dissenting directors and the reasons for their dissent shall be recorded in the minutes, and the directors present at the meeting shall write their names and affix seals or sign thereon.
CHAPTER VII. ACCOUNTING
Article 35. (Fiscal Year)
The Company’s fiscal year shall commence on January 1 and end on December 31 of each year.
Article 36. (Preparation of Financial Statements and Business Report)
  1. The Representative Director of the Company shall prepare the following documents, supplementary documents thereto and the business report, and submit such documents to the audit committee for audit six (6) weeks prior to the day set for the ordinary general meeting of shareholders;
    1. Balance sheet;
    2. Profit and loss statement; and
    3. Statement of appropriation of retained earnings or statement of disposition of deficit.
  2. The auditor committee shall submit the auditors’ report to the Representative Director within four (4) weeks from the date when the auditor committee received the documents set forth in Paragraph (1).
  3. The Company shall keep on file the documents described in Paragraph (1) above and supplementary documents along with the auditors’ report at the head office of the Company for five (5) years and the certified copies of all of such documents at the branches of the Company for three (3) years from one (1) week before the day set for the ordinary general meeting of shareholders.
  4. The Company shall give public notice of the balance sheet and the independent auditors’ opinion immediately after the documents referred to in Paragraph (1) above have been approved at the general meeting of shareholders.
Article 37. (Appropriation of Earnings)
The Company shall dispose of the retained earnings (including the retained earnings carried over from the previous fiscal year) as of the end of each fiscal year as follows:
  1. Legal reserve;
  2. Other statutory reserves;
  3. Discretionary reserve;
  4. Dividends;
  5. Other appropriation of retained earnings; and
  6. Retained earnings to be carried over.
Article 38. (Dividends)
  1. Dividends may be paid in either cash or shares.
  2. In case the dividends are distributed in shares, and if the Company has issued several types or classes of shares, such distribution may be made in shares of different types or classes only by the resolution of a general meeting of shareholders.
  3. Dividends in Paragraph (1) above shall be paid to the shareholders or pledgees registered in the shareholders registry of the Company as of the end of each fiscal year.
  4. The right to dividends shall be extinguished by prescription if the right is not exercised for five (5) years. After the expiration of the prescription period, unclaimed dividends shall revert to the Company.
Article 38-2. (Interim Dividends)
  1. The Company may declare by the resolution of the Board of Directors interim dividends in accordance with Article 165-12 of FSCMA to its shareholders as of 24:00 on June 30. The interim dividends shall be made in cash.
  2. The resolution as set forth in Paragraph (1) above should be made within forty-five (45) days from the date specified in Paragraph (1) above.
  3. The maximum amount to be paid as interim dividends shall be calculated by deducting the following amounts from the net asset amounts recorded in the balance sheet of the fiscal year immediately preceding to the fiscal year concerned:
    1. The amount of capital for the fiscal year immediately preceding to the fiscal year concerned;
    2. The aggregate amount of capital reserves and legal reserves accumulated up to the fiscal year immediately preceding to the fiscal year concerned;
    3. The amount resolved to be distributed as dividends at the annual General Meeting of Shareholders of the fiscal year immediately preceding to the fiscal year concerned;
    4. Voluntary reserves accumulated for specific purposes in accordance with the relevant provisions of the Articles of Incorporation or by resolution of a General Meeting of Shareholders until the fiscal year immediately preceding to the fiscal year concerned;
    5. Legal reserves to be accumulated for the fiscal year concerned as a result of the interim dividends.
  4. In the event the Company has issued new shares (including those shares issued by way of conversion of reserves into capital, stock dividends, conversion of convertible bonds or exercise of warrants) prior to the date set forth in Paragraph (1) above, but after the commencement date of the fiscal year concerned, the new shares shall be deemed to have been issued at the end of the fiscal year immediately preceding to the fiscal year for the purpose of interim dividends; provided that, if such new shares have been issued after the interim dividends, such shares shall be deemed to have been issued immediately after the record date for interim dividends.
  5. The interim dividends on preferred shares pursuant to Article 6-2 shall be made at the same rate as on the common shares.
CHAPTER VIII. SUPPLEMENTARY PROVISIONS
Article 39. (Regulations)
The Company may adopt, with the approval of the Board of Directors, regulations that may be required for the administration of the affairs of the Company.
Article 40. (Application of the Commercial Code)
Matters not specifically provided for herein shall be determined in conformity with resolutions adopted at the Board of Directors Meeting or the general meeting of shareholders of this Company, or with the relevant provisions of the Korean Commercial Code, as the case may be.
Article 41. (Severability)
If any provision or portion thereof contained in these Articles of Incorporation is in contravention of the law and consequently is invalid, the other provisions or other parts of the provisions containing valid portions shall survive such invalid provisions or portions, and shall not be affected in any manner whatsoever by the invalid provision or portion.
ADDENDA
  • These Articles of Incorporation shall be effective on Jun 28, 1999.
  • These Articles of Incorporation shall be effective on August 13, 1999.
  • These Articles of Incorporation shall be effective on December 20, 1999.
  • These Articles of Incorporation shall be effective on March 24, 2000.
  • These Articles of Incorporation shall be effective on May 3, 2000.
  • These Articles of Incorporation shall be effective on March 28, 2002.
  • However, the amended provision of Article 23, Paragraph (2) shall be effective on January 1, 2003.
  • These Articles of Incorporation shall be effective on March 15, 2003.
  • These Articles of Incorporation shall be effective on March 26, 2004.
  • These Articles of Incorporation shall be effective on March 25, 2005.
  • These Articles of Incorporation shall be effective on March 30, 2007.
  • These Articles of Incorporation shall be effective on March 28, 2008.
  • These Articles of Incorporation shall be effective on March 30, 2009.
  • These Articles of Incorporation shall be effective on March 30, 2010.
  • However, the amended provision of Article 4 shall be effective on May 29, 2010.
  • These Articles of Incorporation shall be effective on March 30, 2011.