스킵네비게이션

Kor Eng

Corporate Governance

Chapter 2 Stocks and Stock Certificates

Article 5 Total Number of Stocks to be Issued
  1. The total number of stocks to be issued by the Company shall be two hundred million (200,000,000) stocks.


Article 6 Par Value of Each Stock
  1. The par value of each stock issued by the Company shall be five hundred (500) won.


Article 7 Number of Stocks Issued at Incorporation
  1. The total number of stocks to be issued at the time of the Company's incorporation shall be forty million (40,000,000) stocks (20,697,570 stocks for in-kind contributions and 19,302,430 stocks for cash contributions).


Article 7-2 Types of Stocks
  1. 7-2.1 The stocks issued by the Company shall consist of common stocks and preferred stocks.
    7-2.2 The preferred stocks issued by the Company shall include priority stocks concerning profit distribution, priority stocks concerning distribution of residual assets, stocks with excluded or limited voting rights, redeemable stocks, convertible stocks, and stocks that are a combination of all or some of these types.


Article 7-3 Non-Voting Preferred Stocks
  1. 7-3.1 The Company may issue stocks that carry no voting rights (hereinafter referred to as “Non-Voting Stocks”).
    7-3.2 Non-Voting Stocks shall not be issued in excess of the limits set forth in Article 344-3 of the Commercial Act and Article 165-15 of the Capital Markets and Financial Investment Business Act, among other relevant laws and regulations.


Article 7-4 Preferred Stocks
  1. 7-4.1 The Company may issue preferred stocks that have preferential rights regarding profit distribution over common stocks (hereinafter referred to as “Profit Distribution Preferred Stocks”) or preferred stocks that have preferential rights concerning the distribution of residual assets (hereinafter referred to as “Residual Asset Distribution Preferred Stocks”, and collectively referred to as “Preferred Stocks”). Such Preferred Stocks shall not be issued in excess of half of the total number of issued stocks.
    7-4.2 In the case where Profit Distribution Preferred Stocks are issued as Non-Voting Stocks, if a resolution has been made not to distribute the stipulated dividends for the Profit Distribution Preferred Stocks, those stocks shall hold voting rights from the conclusion of the general meeting that made such a resolution until the conclusion of the following general meeting that passes a resolution for the preferential dividends.
    7-4.3 In the case of issuing Profit Distribution Preferred Stocks, the Board of Directors shall determine the preferential dividend rate at the time of issuance, which shall be set at a rate between [1]% and [10]% based on the issuance price. Furthermore, within the limits permitted by these Articles of Association, the types of distributable assets, the method of determining the value of distributable assets, and the conditions for profit distribution shall be specified.
    7-4.4 In relation to Profit Distribution Preferred Stocks, if the dividend rate for common stocks exceeds that of the Profit Distribution Preferred Stocks as determined by the Board of Directors, the excess portion may be distributed to the Profit Distribution Preferred Stocks at the same ratio as that of the common stocks.
    7-4.5 In the event that a specified dividend is not distributed for the Profit Distribution Preferred Stocks in any fiscal year, the accumulated unpaid amounts may be prioritized for distribution in the following fiscal year's dividends in accordance with the provisions determined by the Board of Directors.
    7-4.6 In the event of the Company’s liquidation, the Residual Asset Distribution Preferred Stocks shall receive distribution of residual assets prior to common stocks, up to the total amount of the issuance price and any unpaid dividends.
    7-4.7 In the event that the distribution rate of residual assets for common stocks exceeds that of the Residual Asset Distribution Preferred Stocks, the excess portion shall be distributed to the Residual Asset Distribution Preferred Stocks at the same ratio as that of the common stocks.
    7-4.8 In the event that the Company conducts a paid-in capital increase or a stock dividend, the allocation of new stocks for the Preferred Stocks shall be the same as that allocated for common stocks in the case of a paid-in capital increase, and of the same type of stocks in the case of a stock dividend.


Article 7-5 Redeemable Stocks
  1. 7-5.1 The Company may issue redeemable stocks that can be canceled using the Company's profits (hereinafter referred to as “Company Redeemable Stocks”) or redeemable stocks that stockholders may request redemption from the Company (hereinafter referred to as “Stockholder Redeemable Stocks,” collectively referred to as “Redeemable Stocks”). Such Redeemable Stocks shall not be issued in excess of half of the total number of issued stocks.
    7-5.2 The redemption price of redeemable stocks shall be determined based on the issue price and an amount calculated at a rate set by the Board of Directors at the time of issuance, ranging between 1% and less than 10% per annum from the date of issuance to the date of redemption. However, any dividends already paid on the Redeemable Stocks shall be deducted from the redemption price at the time of redemption.
    7-5.3 The redemption period (or the period for redemption requests in the case of Stockholder Redeemable Stocks) shall be determined by the Board of Directors within the range starting from the day following the conclusion of the annual general meeting of stockholders for the fiscal year in which the stocks are issued, up to one month after the conclusion of the annual general meeting of stockholders for the fiscal year that falls 10 years after the issuance. However, if the redemption period expires and the redemption has not been completed within that period, the redemption period shall be extended until the reason for the delay is resolved. In this case, if preferential dividend conditions were granted at the time of issuing the Redeemable Stocks, the extension of the redemption period shall also apply in circumstances where the preferential dividends have not been fully distributed.
    7-5.4 In the case that the Company redeems Company Redeemable Stocks, the Company may redeem all of the Redeemable Stocks at once or in installments. In this case, the Company shall notify or announce the fact to the stockholders of the stocks to be redeemed and to the rightful owners recorded in the stockholders’ register at least two weeks prior to the acquisition date of the stocks, and shall compel the redemption after the expiration of that period. However, in the case of installment redemption, the Company may determine the stocks to be redeemed using a proportional allocation method, and any resulting fractional stocks shall not be redeemed.
    7-5.5 When a stockholder of Stockholder Redeemable Stocks exercises the right to request redemption, the stockholder may, at their discretion, request the Company to redeem all of the Redeemable Stocks at once or in installments. In this case, the stockholder must notify the Company of their intention to redeem the stocks and specify the stocks to be redeemed at least two weeks in advance. However, if the Company does not have sufficient distributable profits to redeem all of the stocks subject to redemption at the time of the redemption request, it may redeem the stocks in installments using a proportional allocation method, and any resulting fractional stocks shall not be redeemed.
    7-5.6 Any conditions and other matters regarding redemption not specified in this section shall be determined by the Board of Directors at the time of issuance.


Article 7-6 Convertible Stocks
  1. 7-6.1 The Company may issue preferred stocks as convertible stocks (hereinafter referred to as “Convertible Stocks”) that may be converted into common stocks, subject to the conditions determined by a resolution of the Board of Directors at the time of issuance.
    7-6.2 Convertible Stocks may be converted based on the following provisions, either at the Company’s discretion or at the request of the stockholder:
    7-6.2.1 The issuance price of the stocks to be issued upon conversion shall be the same as the issuance price of the stocks prior to conversion.
    7-6.2.2?The conversion ratio for convertible stocks shall, in principle,

    be one (1) convertible stock to one (1) common stock. However, this ratio may be modified as determined by the Board of Directors at the time of issuance of the Convertible Stocks.


    7-6.2.3 The conversion period, or the period during which a conversion request may be made, shall be determined by the Board of Directors at the time of issuance, within a range of up to ten (10) years from the issuance date.
    7-6.2.4 The reasons for conversion initiated by the Company shall be determined by a resolution of the Board of Directors at the time of issuance.
    7-6.3 Dividends on the common stocks issued upon conversion shall be governed by the provisions of Article 8.5.
    7-6.4 Any conditions and other matters regarding conversion not specified in this section shall be determined by the Board of Directors at the time of issuance.


Article 8 Issuance of New Stocks
  1. 8.1. The Company may issue new stocks within the limits of authorized stocks upon resolution of the Board of Directors.
    8.2. In the event that the Company issues new stocks by resolution of the Board of Directors, it shall do so in accordance with the following methods:
    8.2.1. The method of granting stockholders the opportunity to subscribe for new stocks in proportion to the number of stocks they currently hold;
    8.2.2. The method of providing unspecified individuals (including the Company's stockholders) with the opportunity to subscribe for new stocks in a manner other than as described in Article 8.2.1, within a range not exceeding 50% of the total number of issued stocks, and allocating new stocks to those who have made the subx-x-x-x-x-x-x-scription;
    8.2.3. The method of providing specific individuals (including the Company’s stockholders) with the opportunity to subscribe for new stocks, in a manner other than as described in Article 8.2.1, as necessary to achieve the Company’s operational objectives, such as the introduction of new technologies or improvement of the financial structure, within a range not exceeding 30% of the total number of issued stocks;
    8.2.4. In the case of issuing new stocks to foreign investors in accordance with the Foreign Investment Promotion Act, within a range not exceeding 30% of the total number of issued stocks;
    8.2.5. In the case of preferential allocation of stocks to an employee stock ownership association, within a range not exceeding 20% of the total number of stocks being issued;
    8.2.6. In the case of issuing new stocks in accordance with the issuance of securities depositary receipts under relevant laws and regulations, including the Capital Markets and Financial Investment Business Act.
    8.3. In the case of allocating new stocks in accordance with the method described in Article 8.2.2, the allocation of new stocks shall be made by resolution of the Board of Directors in one of the following methods:
    8.3.1. The method of allocating new stocks to an unspecified number of subscribers without classifying the types of individuals granted the opportunity to subscribe for new stocks.
    8.3.2. The method of allocating new stocks to members of the employee stock ownership association in accordance with relevant laws and regulations, and providing the opportunity to subscribe for new stocks to an unspecified number of individuals, including any stocks that remain unsubscribed. The method of granting stockholders the priority to subscribe for new stocks, and in the event that there are unsubscribed stocks, providing an opportunity for an unspecified number of individuals to receive allocation of such new stocks.
    8.3.3. The method of providing specific types of individuals with the opportunity to subscribe for new stocks based on reasonable criteria set forth in relevant regulations, such as demand forecasting, prepared by an underwriter or broker.
    8.4. In the event that a party waives their subx-x-x-x-x-x-x-scription rights, a situation arises whereby fractional stocks occur due to the allocation of new stocks, or if the payment for the new stocks is not made by the specified payment deadline, the forfeited stocks resulting from such circumstances shall be addressed by resolution of the Board of Directors.
    8.5. In the case where the Company issues new stocks through paid-in capital increases, gratuitous capital increases, or stock dividends, the distribution of profits attributable to the new stocks shall be made equally for all stocks issued as of the dividend record date, regardless of the date of issuance.
    8.6. In cases where new stocks are allocated to individuals who are not stockholders pursuant to Article 8.2, the matters stipulated in Article 416, Paragraphs 1, 2, 2-2, 3, and 4 of the Commercial Act must be notified or publicly announced to stockholders at least two weeks prior to the payment deadline. However, in accordance with Article 165-9 of the Capital Markets and Financial Investment Business Act, the notification and announcement may be substituted by publicly disclosing a significant matters report to the Financial Services Commission and the exchange.
    8.7. In the event of issuing new stocks through any of the methods specified in Article 8.2, the type and number of stocks to be issued, as well as the issuance price, shall be determined by resolution of the Board of Directors.


Article 9 Stock Options
  1. 9.1 The Company may grant stock options to employees and staff (including employees of affiliated companies as defined in Article 30 of the Enforcement Decree of the Commercial Act) within the limit of 15% of the total number of issued stocks, pursuant to the provisions of Article 340-2 and Article 542-3 of the Commercial Act, by a special resolution of the General Meeting of Stockholders. However, within the limits prescribed by relevant laws and regulations, stock options may also be granted by resolution of the Board of Directors. In cases where stock options are granted by resolution of the Board of Directors, the Company must obtain approval from the General Meeting of Stockholders convened for the first time thereafter. Stock options granted by resolution of the General Meeting of Stockholders or the Board of Directors may be performance-based, linked to management performance targets or market indices, among other criteria.
    9.2 Individuals who are to be granted stock options must contribute to the establishment and management of the Company, engage in overseas sales, or support technological innovation.
    They must be employees of the Company who have contributed or possess the ability to contribute in these areas; however, individuals who are prohibited from being granted stock options under the Commercial Act and relevant laws and regulations shall be excluded.
    9.3 The stocks to be delivered upon the exercise of stock options (referring to those stocks used as the basis for calculating the difference when the difference between the exercise price of the stock options and the market price is paid in cash or through treasury stocks) shall be registered common stocks.
    9.4 Stock options cannot be granted simultaneously to all executives or employees, and the stock options granted to any individual executive or employee shall not exceed 10% of the total number of issued stocks.
    9.5 The exercise price per stock for the stock options must be set at or above the following specified prices. The same shall apply in cases where the exercise price is adjusted after the grant of stock options.
    9.5.1 In the case of issuing new stocks, the higher amount between the fair value of the stocks based on the granting date of stock purchase options and the par value of the stocks;
    9.5.2 In the case of transferring one’s own stocks, the fair value of the stocks based on the granting date of the stock purchase options.
    9.6 The exercise period for stock options shall be as stipulated, commencing from the date that is two years following the resolution date of the general meeting of stockholders that grants such options, and extending until the date that marks six years from the resolution date of said general meeting of stockholders.
    9.7 In any of the following cases, the Board of Directors may, by resolution, cancel the granting of stock options:
    9.7.1 In the event that an employee or officer who has been granted stock options resigns or retires of their own accord;
    9.7.2 In the event that an employee or officer who has been granted stock options causes significant harm to the Company due to intentional misconduct or negligence;
    9.7.3 In the event that the exercise of stock options is not possible due to the Company's bankruptcy or dissolution;
    9.7.4 In the event that a reason for cancellation as stipulated in the stock option grant agreement arises.
    9.8 A person who has been granted stock options must remain in office or service for a period of at least two years from the resolution date as specified in Article 9.1 in order to be eligible to exercise such options. However, if a person who has been granted stock options dies or resigns or retires for reasons not attributable to their own fault within two years from the resolution date specified in Article 9.1, they may exercise the stock options during the exercise period, regardless of whether they meet the requirement of being in office or service for the stipulated duration.
    9.9 The provisions of Article 8.5 shall apply mutatis mutandis to the distribution of profits related to the stocks issued as a result of the exercise of stock options.


Article 9-2 Employee Stock Option Plan
  1. 9-2.1 The Company may grant employee stock options to members of the employee stock ownership association within the limit of 20% of the total number of issued stocks, subject to a special resolution of the general meeting of stockholders, in accordance with Article 39 of the Basic Employment Welfare Act. However, within the limit of 10% of the total number of issued stocks, employee stock options may be granted by a resolution of the Board of Directors.
    9-2.2 The stocks to be delivered upon the exercise of employee stock options shall be registered common stocks.
    9-2.3 In accordance with Article 41 of the Basic Employment Welfare Act, the total number of stocks acquired through the exercise of employee stock options, when combined with the stocks already held by the employee stock ownership association or its members, shall not exceed 20% of the total number of issued stocks.
    9-2.4 The exercise price per stock for employee stock options shall be no less than 70% of the assessed price as stipulated in Article 14 of the Enforcement Rules of the Basic Employment Welfare Act. However, in the case of newly issued stocks being delivered, if the exercise price is lower than the par value of the respective stocks, the par value shall be designated as the exercise price.
    9-2.5 A person who has been granted employee stock options may exercise their rights within a period of at least 6 months and no more than 2 years from the resolution date specified in Article 9-2.1. However, the resolution specified in Article 9-2.1 may establish a certain exercise period within or after the specified duration during which rights may be exercised.
    9-2.6 A person who has been granted employee stock options may not transfer them to others and must maintain their status as a member of the employee stock ownership association until the employee stock options are exercised. However, in the event of the death of a person who has been granted employee stock options, the heirs may exercise the employee stock options during the exercise period.
    9-2.7 With respect to the distribution of profits on new stocks issued as a result of the exercise of employee stock options, the provisions of Article 8.5 shall apply mutatis mutandis.
    9-2.8 The Company may, by resolution of the Board of Directors, cancel the granting of employee stock options in any of the following circumstances:
    9-2.8.1 In the event that the Company is unable to accommodate the exercise of employee stock options due to bankruptcy, dissolution, or similar circumstances;
    9-2.8.2 In the event that a member of the employee stock ownership association who has been granted employee stock options causes significant harm to the Company due to intentional misconduct or negligence;
    9-2.8.3 In the event that a reason for cancellation, as stipulated in the contract granting employee stock options, arises.


Article 10 Electronic Registration of Rights to be Indicated on Stocks and Stock Subx-x-scription Certificates
  1. The Company shall electronically register the rights to be indicated on stocks and stock subx-scription certificates in the electronic registration account maintained by an electronic registration institution, instead of issuing physical stock certificates and stock subx-scription certificates.


Article 11 Agent for Registration of Stockholders
  1. 11.1 The Company shall appoint an agent for the registration of stockholders.
    11.2 The agent for registration and the location of their office, as well as the scope of their responsibilities, shall be determined by a resolution of the Board of Directors.
    11.3 The Company’s register of stockholders, or a duplicate thereof, shall be kept at the office of the agent for registration, and the electronic registration of stocks, management of the stockholder register, and other matters related to the stocks shall be handled by the agent for registration.
    11.4 The procedures for handling matters specified in Article 11.3 shall be governed by the regulations pertaining to the registration of securities by the agent for registration.


Article 12 Electronic Stockholder Register
  1. 12.1 Upon receiving a notification of ownership details from the electronic registration institution, the Company shall prepare and maintain a stockholder register that records the notified details and the date of notification.
    12.2 The Company may prepare the stockholder register in electronic document format.


Article 13 Record Date
  1. The Company may designate the stockholders recorded in the stockholder register as eligible to exercise their rights on the date determined by a resolution of the Board of Directors for convening the general meeting of stockholders or for other necessary purposes. The Company must announce this at least two weeks in advance