ARTICLES OF INCORPORATION
Chapter 1: General Provisions
Article 1: Name
The name of the Company is Chips&Media, inc in English (hereinafter referred to as the "Company").
Article 2: Objectives
The objectives of the Company are to engage in the following business activities:
Design, manufacture, sales, and advisory services of semiconductor integrated circuits
Manufacturing, design services, and development of digital-related semiconductors.
Semiconductor design service
Manufacturing and sales of semiconductor design software
Developing, manufacturing, selling, and consulting business for semiconductor design and internal/external multimedia systems
Any and all business incidental to each of the aforementioned objectives
Article 3: Location of the Head Office and the Establishment of Branches, etc.
① The head office of the Company shall be located in Seoul.
② The Company may establish branches, sub-branches, offices, or overseas subsidiaries within or outside Korea, by resolution of the Board of Directors, whenever necessary.
Article 4: Method of Giving Public Notice
Public notices by the Company shall be made through the Company’s internet homepage (https://www.chipsnmedia.com/). However, in cases of unavoidable circumstances including system outage, public notice shall be made through publication in the Korea Economic Daily issued by Seoul City.
Chapter 2: Shares
Article 5: Total Number of Shares to be Issued
The total number of shares to be issued by the Company shall be 50,000,000 shares.
Article 6: Par Value per Share
The par value per share issued by the Company shall be 500 Won per share.
Article 7: Total Number of Shares to be Issued at the Time of Incorporation
The total number of shares to be issued by the Company at the time of incorporation shall be 10,000 shares (at a per-share price of 5,000 Won).
Article 8: Classes of Shares
① The class of shares to be issued by the Company shall be common shares and preferred shares, both in registered form.
② The Company may issue convertible shares and redeemable shares (hereinafter referred to as ‘Convertible Redeemable Preferred Shares’) that have priority over ordinary shares in profit dividends to a limit of 1,000,000 shares and have voting rights with regard to conversion and repayment.
③ The period of existence of convertible rights shall be ten years from the date of issue.
④ Convertible redeemable preferred stock shall be entitled to a cumulative preferential dividend of 1% of the value issued each year during the holding of convertible preferred stock, and to participate and receive dividends at the same dividend rate as ordinary shares if the dividend rate of ordinary shares exceeds the dividend rate of preferred stock.
⑤ Shareholders of convertible redeemable preferred stocks may convert to common stocks at any time from the date of initial issuance to the expiration date of their duration.
⑥ The conversion ratio to common shares of convertible redeemable preferred stocks shall be one common stock per one redeemable preferred stock. However, if there is a special agreement regarding the adjustment of the conversion ratio and conversion price, it may be decided differently by the resolution of the Board of Directors.
⑦ The voting rights of convertible redeemable preferred stocks will have one vote per share of convertible redeemable preferred stocks. However, if the convertible redeemable preferred stock is converted to common stock in accordance with the conversion conditions set forth in Paragraph 6, the common stock after conversion shall have one vote per share.
⑧ Convertible redeemable preferred stock issued by the Company has the right to buy new shares, and in the case of a free capital increase, the same type of convertible redeemable preferred stock shall be allocated to the shares to be issued by the Company.
⑨ When the preferred stock is converted into a common stock, Article 10-3 (the date on which the new stock is allocated) shall apply to the dividend of profits to the shares issued on the conversion.
⑩ Repayment of convertible preferred shares is only possible when there is a dividend-able profit to the Company, and the Company may repay convertible preferred shares with the resolution of the Board of Directors, and shareholders of convertible preferred shares may request the Company to repay convertible preferred shares. If there is no reimbursement or a preferential dividend despite a claim for reimbursement, the repayment period shall be extended until reimbursement and dividends are completed. However, once a convertible redeemable preferred stock is converted to common stock, it cannot be claimed. The reimbursement value is the sum of the issuance value and the amount of interest from the issue date to the repayment date, and if there is a dividend paid from the issuance date of the convertible redemption preferred stock to the repayment date, the reimbursement amount is used as the repayment value.
Article 9: Classes of Shares
The total number of shares to be issued by the Company at the time of incorporation shall be 10,000 shares (at a per-share price of 5,000 Won).
Article 9-2: The Electronic Registration
The Company should electronically register stocks on the electronic register of the electronic registry pursuant to Article 2, Subparagraph 1 of the Act on Electronic Registration of Stocks, Bonds, etc. However, this may not apply to stocks, etc. where the company does not bear the obligation to register pursuant to Acts and subordinate statutes.
Article 10: Preemptive Rights
① The shareholders of the Company shall have the right to receive the allocation of new shares in proportion to the number of shares owned by them when issuing new shares.
② The Company may assign new shares to non-shareholders at the resolution of the Board of Directors in any of the following cases, notwithstanding the provisions of Paragraph 1.
Where the company allocates shares to members of the Employee Stockholders’ Association.
Where the new stocks are issued due to the exercise of the stock purchase option under Article 542-3 of the Commercial Act.
Where the Company recruits new shares to list on the KOSDAQ market.
③ Notwithstanding the provisions of Paragraph 1, new shares may be allocated to persons other than shareholders by resolution of the shareholders’ meeting in any of the following cases.
Where the Company offers new share subscription rights to unspecified individuals and allocates new shares to the subscribers in a manner described under Article 165 – 6 of the Act on Capital Markets and Financial Investment Services within a range not exceeding 50/100 of the total number of issued shares.
Where the Company offers new share subscription rights to a domestic and foreign financial institution, venture financing, or institutional investors to improve Company’s financial structure and urgently financing within the scope not exceeding 20/100 of the total number of shares issued.
Where the Company offers new share subscription rights to foreign investors, domestic and foreign joint ventures, or affiliated companies, for the purpose of introducing, research and development, production, sales, and capital partnership important to the business within the scope not exceeding 20/100 of the total number of issued shares.
Where the Company offers new share subscriptions to a specific individual in order to achieve the Company’s management purposes such as introducing new technology, improving financial structure, stable trading lines, and other related purposes.
④ The type, number, and issuance price of new shares to be issued under any of the provisions of Paragraph 2 shall be determined by the resolution of the Board of Directors, and by the resolution of the general meeting of shareholders when new shares are issued under any of the provisions of Paragraph 3.
⑤ The Company shall determine the method of dealing with fractional shares resulting from the allocation of the new shares by a resolution of the Board of Directors.
Article 10-2: Stock Options
① The Company may grant stock options by the scope of the total number of shares issued by a special resolution of the Shareholders’ meeting. However, under the provisions of Article 542-3 (3) of the Commercial Act, the right to purchase shares may be granted by resolution of the Board of Directors within three-hundredths of the total number of issued shares. In such cases, the stock purchase option may be granted in a performance-linked manner linked to management performance or the stock index.
② Those eligible for a stock option under Paragraph 1 shall be the Company’s officers or employees who contribute or have the capacity to contribute to the Company’s incorporation, management, or technological innovation, etc. and the directors, auditors, or employees of the relevant company prescribed by Article 30-1 of the Commercial Act. However, the Company’s directors shall not be granted the right to purchase shares with the resolution of the Board of Directors.
③ The Company grants stock purchase options in the following methods:
A method of issuing a newly-named common stock (or a preferred stock) at the exercise price of the stock option.
A method of issuing self-owned common stock (or preferred stock) at the exercise price of the stock option.
Issuing the difference between the exercise price of the stock option and the market price in cash or treasury stock.
④ The number of shares covered by a stock option that may be granted to executives or employees of the Company shall not exceed ten out of one hundred (10/100) of the total number of issued shares.
⑤ Notwithstanding the provisions of paragraph ②, the largest shareholder (hereinafter referred to as "maximum shareholder") and major shareholders and their related parties under Article 542-8 (2) 5 of the Commercial Act shall not be granted the right to purchase shares. However, a person who falls under a related person by becoming an executive of a company or a related company referred to in paragraph (2) (including cases where the executive is a director or auditor who does not engage in the managing director of an affiliated company) may be granted a share purchase option.
⑥ The stock options may be exercised within five (5) years and after the date set by the Board of Directors or by the resolution of the general shareholders’ meeting set forth in Paragraph ①, above.
In the event of a retirement after three (3) years (the mandatory service period) from the date on which the share purchase option is granted, it shall be exercised within six (6) months from the date on which it is retired (or retired) and within a short period of time during the available exercise period.
In the event that the rightful heirs exercise the stock option due to the death of the person who has the option to buy the stock inherited within 3 years (duty of service) from the grant date, it must be exercised within one year from the date of the exercise. If the rights are inherited during the exercise period, they must be exercised within one year after the succession and the remaining period during the exercise period.
⑦ The provisions of Article 10-3 shall apply mutatis mutandis to the distribution of profits of new stocks arising from the exercise of the option to buy stocks.
⑧ The grant of the stock option may be canceled by a resolution of the Board of Directors in any of the following cases:
Where the relevant officer or employee of the Company voluntarily retires from his/her office after being granted stock options;
Where the relevant officer or employee of the Company causes substantial damage to the Company due to his/her willful misconduct or negligence;
Where any clause for cancellation set forth in the stock option agreement occurs.
Where the stock options may not be exercised due to the Company’s bankruptcy or dissolution
⑨ If the stock purchase option is granted to the provision to Paragraph 1, approval of the shareholders’ meeting, which is convened for the first time after grant, shall be obtained.
Article 10-3: Commencement Date for Dividends on New Shares
Equivalent dividends shall be applied to shares issued through a capital increase, a free increase of new shares, and stock dividend prior to the dividend base date determined by the company.
Article 10-4: Retirement of Shares
The Company may retire its treasury shares by resolution of the Board of Directors.
Article 11: Transfer Agent
① The Company shall retain a transfer agent for shares.
② The transfer agent, the location where its services are to be rendered and the scope of its duties, shall be determined by a resolution of the Board of Directors of the Company and shall be publicly notified.
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 deal with the transfer of shares, registration, or cancellation of pledges created on shares, registration, or cancellation of the property in trust, issuance of share certificates, acceptance of reports, and other share-related matters.
④ The procedure of dealing with such matters mentioned in paragraph 3 shall be subject to the regulation concerning the securities transfer agency by Transfer Agent, etc.
Article 12: Deleted [2019.03.15]
Article 13: Closing of the Shareholders Registry and Record Date
① The Company shall suspend entry of alterations in the register of shareholders in respect of the shareholders’ rights during the period from January 1 to January 3 of each year.
② The Company shall deem those shareholders whose names appear in the list of shareholders on December 31 of each year to be the shareholders entitled to exercise their rights as shareholders at the annual general shareholders meeting.
③ In the case of convening an extraordinary general shareholders meeting or in any other necessary cases, the Company may suspend entry of alterations in the register of shareholders with respect to a shareholders’ rights for a period no longer than three months, by a resolution of the Board of Directors, or may authorize those who are registered in the shareholders' registry as of a record date which shall be a date within three months prior to the date of exercise of their rights, set by a resolution of the Board of Directors, to exercise their rights as the Company’s shareholders. If the Board of Directors deems it necessary, the Company may suspend the entry of alterations in the registry of shareholders and designate the record date at the same time. In such a case, the Company shall provide public notice in relation thereof at least two weeks prior to the closing of the shareholders' registry or the record date.
Chapter 3: Bonds
Article 14: Issuance of Convertible Bonds
① In any of the following cases, the Company may issue convertible bonds to persons other than shareholders by resolution of the shareholders’ meeting:
In the case of issuing convertible bonds through the method of public offering within the scope of the total value of the bonds does not exceed 5 billion won.
When convertible bonds are issued to domestic and foreign financial institutions or institutional investors for urgent financing within the scope of the total value of the bonds not exceeding 2 billion won.
In the case where the total value of the bond does not exceed 2 billion won, in the case of issuing convertible bonds to foreign investors, partner companies, etc.
Through granting convertible bond subscription rights to allocate bonds to specified individuals for the purpose of achieving management objectives including the introduction of new technology and improvement of financial structure in case of not exceeding 2 billion won.
② The shares to be issued as a result of the conversion of such bonds shall be common shares and the applicable conversion price shall be equal to or higher than the par value per share of such new shares, as determined by the Board of Directors at the time of issuance of such bonds.
③ Shares issued due to conversion shall be designated common stocks, and the conversion value shall be determined by the general shareholders’ meeting when issuing bonds at the par value of shares or higher.
④ The period in which holders of bonds with warrants are entitled to make a request for exercise hereunder shall begin on the day after one (1) months have elapsed from the date of issuance thereof and end on the day immediately preceding the redemption date thereof provided, however, that in the event that the bonds with warrants are issued by a method other than a public offering, exercise may be requested during the period from the date when one (1) year has elapsed after the relevant warrants are issued to the date immediately prior to the redemption date of the bonds. However, the period for requesting exercise may be adjusted by a resolution of the Board of Directors within the aforementioned period.
⑤ The payment of dividends on the new shares to be issued as a result of conversion hereunder and the payment of interest on such convertible bonds, the provisions of Article 13 hereof shall apply, mutatis mutandis.
Article 15: Issuance of Bonds with Warrants
① In any of the following cases, the Company may issue bonds with warrants to persons other than shareholders by resolution of the shareholders’ meeting:
In the case of issuing a bond with a warrant by means of a general public offering, the total par value of the bond does not exceed 5 billion won;
Where a bond with a warrant is issued to domestic and foreign financial institutions or institutional investors for urgent financing within the scope of not exceeding 2 billion won in par value of the bond;
Where a foreign investor, an affiliate company, and others issue a bond with a new ownership right to the other party for the purpose of introducing new technology, research and development, production, sales, and capital partnership that is important to the business within the scope of not exceeding 2 billion won in par value of the bond;
Where a bond with a warrant is issued to a person related to technology introduction, stable trading line, or other company management and business of the company for important management purposes within the scope of the total par value of the bond not exceeding 2 billion won;
② The amount to which a person may claim a new share shall be determined by the shareholders’ meeting within the scope not exceeding the total par value of the debenture.
③ Shares issued as new ownership rights shall be designated as registered common shares, and the issuance value shall be determined by the shareholders’ meeting when issuing private bonds at par value or higher.
④ The period in which holders of bonds with warrants are entitled to make a request for exercise hereunder shall begin on the day after one month have elapsed from the date of issuance thereof and end on the day immediately preceding the redemption date thereof provided, however, that in the event that the bonds with warrants are issued by a method other than a public offering, exercise may be requested during the period from the date when one year has elapsed after the relevant warrants are issued to the date immediately prior to the redemption date of the bonds. However, the period for requesting exercise may be adjusted by the shareholders’ meeting within the aforementioned period.
⑤ The provisions of Article 10-3 shall apply mutatis mutandis to the allocation of profits to new shares issued due to conversion.
Article 16: Applicable Provisions Concerning Issuance of Bonds
The provisions of Article 10-3 shall apply mutatis mutandis to the allocation of profits to new shares issued due to conversion.
Chapter 4: General Shareholders Meeting
Article 17: Convening of Meeting of Shareholders
The company shall convene a regular general meeting of shareholders every settlement period, and convene an extraordinary general meeting of shareholders as necessary.
Article 18: Person Authorized to Convene Meeting of Shareholders
① Unless otherwise provided in relevant laws and regulations, the general shareholders' meeting shall be convened by the Representative Officer of the Company in accordance with a resolution of the Board of Directors.
② If Representative Officer is absent or unable to execute his/her duties, the provisions of Article 33 hereof shall apply mutatis mutandis.
Article 19: Personal and Public Notice of Convening Shareholders Meeting
① In convening a general shareholders meeting, notice thereof either in written or electronic form, which sets forth the time, date, place, and agenda of the meeting, shall be sent to each shareholder at least two weeks prior to the date of the meeting.
② The written notice to shareholders holding not more than 1/100 of the total number of issued and outstanding shares with voting rights stated in provisions of paragraph 1 above may be replaced by public notices made at least twice in the Korea Economic Daily and the Maeil Business Newspaper, circulated in Seoul two weeks prior to the meeting or through a disclosure at Data Analysis, Retrieval, and Transfer System operated by Financial Supervisory Commission or the Korea Stock Exchange. The public notice of a meeting shall announce that the general meeting will be held and shall include the agenda of the meeting.
③ In case of personal notification according to paragraph 1 or public notice according to paragraph 2, if the purpose is to appoint directors, then the information such as the names and brief personal records of the candidates for such directors and others shall be included in such notices.
④ When the Company gives personal or public notice of the convening of general shareholders meeting in accordance with paragraphs 1 and 2 above, information such as performance and remuneration of outside directors and operations of the Company in accordance with Article 542-4 Paragraph 3 of KCC. However, if the Company posts such matters on the online corporate website and keeps them at the head office and branches of the Company, the transfer agent company, the Financial Supervisory Commission, and the Korea Stock Exchange, it shall replace notice or public notice thereof.
Article 20: Place of the Meeting
The shareholders' meeting shall be held at the place where the Company's head office is located or other places adjacent thereto as deemed necessary.
Article 21: Chairman
① The Representative Officer shall preside over the general meetings of shareholders as chairman.
② In the absence of the Representative Officer, the provision of Article 33, shall apply mutatis mutandis.
Article 22: Chairman’s Authority to Maintain Order
① The chairman of a general shareholders meeting may order the suspension, cancellation of statements, or removal of person(s) who deliberately speak or behave in a manner that disrupts the proceedings of the meeting or otherwise interferes with the proceedings.
② The chairman of a general shareholders' meeting may limit the length and frequency of statements made by a shareholder whenever deemed necessary to facilitate the smooth proceedings of the meeting.
Article 23: Voting Right
Each shareholder shall have one vote for each share he/she owns.
Article 24: Limitation on Voting Rights of Cross-Held Shares
If the Company, its parent company, and subsidiary, or its subsidiary hold shares exceeding 1/10 of the total number of issued shares of a third company, then the shares of the Company held by that third company shall have no voting rights.
Article 25: Split Exercise of Voting Rights
① If a shareholder holding more than two (2) votes wishes to split his/her votes, he/she shall give written notice to the Company of such intention and the reason therefore at least three (3) days prior to the meeting.
② The Company may refuse to allow a shareholder to split his/her votes unless such shareholder holds shares in trust or on behalf of a third party.
Article 26: Exercising Votes by Proxy
① A shareholder may exercise his/her vote by proxy.
② In the case of paragraph 1 above, the proxy shall present appropriate documents evidencing his/her power of representation (power of attorney) prior to the opening of the general shareholders' meeting.
Article 27: Method of Adopting Resolution at Shareholders Meeting
Unless otherwise provided in relevant law or these Articles of Incorporation, all resolutions of general shareholders meetings shall be adopted by the affirmative votes of the majority of shareholders present at the meeting; provided, that, such votes shall represent at least one fourth (1/4) of the total number of issued and outstanding shares of the Company.
Article 28: Minutes of General Shareholders Meeting
The substance of the course and proceedings of a general shareholders meeting and the results thereof shall be recorded in the minutes, which shall bear the names and seals or signatures of the chairman and the directors present at the meeting, and shall be kept at the head office and branches of the Company.
Chapter 5: Directors, Meeting of the Board of Directors, Chief Executive Officer
Article 29: Number of Directors
The Company shall have at least three (3) but no more than seven (7) directors and shall not have external directors.
Article 30: Election of Directors
① Directors shall be elected at a general shareholders' meeting.
② A resolution for the election of directors shall be passed by the affirmative votes of the majority of the shareholders present; provided, that, such votes shall represent at least one-fourth (1/4) of the total number of issued and outstanding shares.
③ In case two (2) directors or more are elected at the shareholder's meeting, the cumulative vote stipulated in Article 382-2 of the KCC shall not apply.
Article 31: Term of Directors
① The term of office for directors shall be within three (3) years; provided, however, that such term of office shall be extended until the close of the annual shareholders meeting convened in respect of the last period for the settlement of accounts comprised in their term of office if their term of office expires after the end of the said last period for the settlement of accounts but before the close of such general shareholders meeting.
② The term of office for a director who was appointed to fill a vacancy shall be the remainder of the term of office of his/her predecessor.
Article 32: Appointment of Chief Executive Officer
Chief Executive Officer shall be elected at a general shareholders meeting
Article 32-2: Duties of CEO
The CEO shall represent the Company and shall direct the overall operation of the Company.
Article 33: Duties of Directors
The vice presidents, senior managing directors, managing directors, and directors shall assist the representative director and shall perform their respective responsibilities as determined by the Board of Directors. In the absence of the representative director, the vice president, senior managing director, and managing director shall take his/her place in the foregoing order of priority.
Article 33-2: Directors' Obligations
① If a director becomes aware of any fact that is likely to cause substantial losses to the Company, he/she must immediately notify the audit committee or a member of an audit committee.
② Each director shall faithfully perform his/her duties in the interest of the Company in compliance with the law, regulations, and the Articles of Incorporation.
③ Each director shall exercise due care in the performance of his/her duties in the interest of the Company.
④ Each director shall not disclose any business secrets of the Company that he/she obtained while serving as director during his/her term and after retirement.
Article 34: Composition and Convening of the Board of Directors Meeting
① The Board of Directors shall comprise directors and resolve all important matters relating to the execution of the Company’s businesses.
② The Chairman or any other director designated by the Board of Directors shall convene a meeting of the Board of Directors by notifying all of the directors thereof at least one week prior to the date of the meeting. Provided, however, that if all member of the Board of Directors unanimously consents to hold a Board of Directors meeting, the procedures of convening a meeting may be omitted.
⑤ Directors other than the director designated to convene a meeting of the Board of Directors under paragraph 2 above may request the designated director to convene a meeting. If the designated director refuses to convene such a meeting without justifiable reason, the other directors may convene a meeting.
⑥ Each director shall report to the Board of Directors of his/her execution of duties at least once every three months.
⑦ The chairman of the Board of Directors shall be the convening authority of the Board of Directors under Paragraphs 2 and 3
Article 35: Method of Adopting Resolutions of the Board of Directors
① Except for cases where the related laws set strengthened resolution requirements, a quorum for a Board of Directors’ meeting shall be the attendance of the total number of directors of the Company. Resolutions of the Board of Directors shall be adopted by the affirmative vote of a majority of the directors present at the meeting.
② No director has a special interest in any resolution of the Board of Directors shall be allowed to exercise his/her vote upon such resolution.
③ The Board of Directors may allow all or part of the directors to participate in resolutions by means of remote communication in which all directors simultaneously transmit and receive voice without attending meetings in person. In such cases, the relevant director shall be deemed to have attended the board of directors directly.
Article 36: Minutes of Meeting of the Board of Directors
① The minutes shall be prepared with regard to the intention of the Board of Directors
② The Board of Directors shall keep minutes of its meetings at the head office of the Company, which shall be executed or sealed by the Chairman and the directors in attendance at such meetings.
Article 37: Remuneration and Severance Pay for Directors
① Remuneration for directors shall be determined by a resolution of a general shareholders meeting.
② Severance pay for directors shall be paid in accordance with the Rules on Severance Pay for executives and others adopted by resolution at the general shareholders’ meeting.
Article 38: Consultants and Advisors
The Company may have a number of consultants or advisors by a resolution of the Board of Directors.
Chapter 6: Auditors
Article 39: Composition of the Audit Committee
The Company may have more than 1 director.
Article 40: Appointment of the Audit Committee
① The Auditor shall be appointed/dismissed at the shareholders’ meeting.
② The bill for the appointment/dismissal of an auditor shall be presented and voted separately from the bill for the appointment/dismissal of directors.
③ The appointment of the auditor shall consist of a majority of the voting rights of the shareholders present, but not less than at least one-quarter of the total number of issued shares. However, in cases where voting rights can be exercised electronically pursuant to Article 368-4 (1) of the Commercial Act, the auditor may decide to appoint an auditor as a majority of the voting rights of the shareholders present.
④ The dismissal of auditors shall be at least two-thirds of the voting rights of the shareholders present, but at least one-third of the total number of issued stocks.
⑤ In the appointment or dismissal of an auditor under paragraphs (3) and (4), shareholders (In the case of the largest shareholder, the number of stocks with voting rights owned by the person who holds the stocks by calculation of his or her especially related party, the largest shareholder or the related person, the largest shareholder, or a person who has delegated voting rights to the related person shall be summed up) who have stocks in excess of 3/100 of the total number of issued stocks with voting rights shall not exercise voting rights on the excess stocks.
Article 41: Terms of Auditors
① The terms of auditors shall be until the end of the regular shareholders’ general meeting on the final settlement period within three years after the inauguration.
② If there is a vacancy in the number of auditors, an auditor shall be elected at a shareholders meeting to fill such a vacancy; provided, however, that the foregoing provision shall not apply if the number of the existing auditor in the office is not less than the number of auditors provided in Article 39 hereof and no hindrance is caused to carrying on the Company’s business thereby.
Article 42: Duties and Responsibilities of the Audit Committee
① The audit committee shall examine the accounts and businesses of the Company.
② The audit committee may require the Board of Directors to convene an extraordinary general shareholders meeting by submitting a document which states the agenda and reasons for convening such meetings.
③ The audit committee may request the Company’s subsidiary to report the details of its operations if deemed necessary for the performance of its duties. In such a case, if the subsidiary fails to immediately report the details, or if deemed necessary to check for the performance, the auditors may investigate the subsidiary’s business operation and financial status.
④ The provisions of Article 33-2, section 4 shall apply to auditors.
⑤ The auditors shall request external experts’ assistant at the expense of the Company.
⑥ The audit committee may submit a written statement stating the purpose of the meeting and the reason for convening the meeting to the directors (if any, the person authorized to convene the meeting) to request the convocation of the Board of Directors.
⑦ If a director fails to convene a meeting of the Board of Directors without delay even after making a claim under Paragraph 6, the requested auditor may convene a meeting of the Board of Directors.
Article 42-2: Minutes of Audit
The audit committee shall maintain a record of its audit activities in an audit report, and the audit report shall contain the audit procedures performed, results of the audit, and the name and seal or signature of the audit committee member who has performed such audit shall be affixed to the audit report.
Article 43: Remuneration and Severance Pay for Auditor
① The provisions of Article 37 shall apply to the remuneration and severance pay of the auditor.
② Severance pay for auditors shall be paid in accordance with the Rules on Severance Pay for executives and others adopted by resolution at the general shareholders’ meeting.
Chapter 7: Accounting
Article 44: Fiscal Year
The fiscal year of the Company shall commence on January 1 and end on December 31 of each year.
Article 45: Preparation of Financial Statement and Related
① The Chief Executive Officer shall prepare each document stipulated in Article 477 and 447-2 of the Commercial Act and obtain approval from the Board of Directors.
② The Chief Executive Officer must submit the documents referred to in Paragraph 1 to the auditor 6 weeks before the regular shareholders' meeting or 6 weeks before the deadline for submitting business reports.
③ The auditor must submit the audit report to Chief Executive Officer at least one week before the regular shareholders' meeting or the deadline for submitting the business report.
(Note 1) When a regular general shareholders' meeting is held after the business report submission deadline, the company must submit its financial statements to an external auditor 6 weeks (4 weeks ahead for Consolidated financial statements) before the business report submission deadline in accordance with the provisions of the ｢Act on External Audit of Stock Companies, etc.
(Note 2) When a regular general shareholders' meeting is held after the business report submission deadline, the external auditor must submit the external audit report to the company one week before the business report submission deadline in accordance with the provisions of the ｢External Audit Act of Stock Companies, etc.｣. The “audit report” and “audit report” (by the external auditor) must be attached.
④ The Chief Executive Officer shall keep the documents and audit report under paragraph (1) at the HQ for 5 years from one week before the regular shareholders' meeting, and a certified copy thereof at the branch for 3 years.
⑤ The Chief Executive Officer must submit the documents under Article 447 of the Commercial Act to the regular shareholders' meeting for approval, and submit the documents under Article 447-2 to the regular shareholders' meeting to report the contents.
⑥ Notwithstanding paragraph 5, the company has an opinion of an external auditor that each document under Article 447 of the Commercial Act properly displays the company's financial position and business performance in accordance with the laws and articles of incorporation, and if all auditors agree, each document in the article may be approved by a resolution of the board of directors.
⑦ The contents of documents approved pursuant to Paragraph 6 shall be reported to the general shareholders' meeting.
(Note 1) Paragraphs 6 and 7 should be deleted if the financial statements are not approved by the resolution of the board of directors.
(Note 2) Since the approval of the financial statements by the board of directors is closely related to the rights of shareholders, it is desirable to decide whether or not to introduce new stock certificates after listing for a company that intends to list stock certificates on the KOSDAQ market.
⑧ Upon obtaining approval pursuant to paragraphs 5 or 6, the Chief Executive Officer shall immediately publicize the balance sheet and the audit opinions of external auditors.
Article 46: Disposal of Earnings
The Company shall dispose of unappropriated retained earnings of each fiscal year as follows:
Other statutory reserves
Other appropriation of retained earnings
Article 47: Dividends
① Dividends of profits can be made property other than cash or shares
② If the Company issues several types of stocks as dividends of profits, it may be used as a different type of stock following the resolution of the shareholders’ general meeting.
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 Profit dividends shall be determined by the resolution of the shareholders’ meeting.
Article 48: Appointment of External Auditors
With respect to the appointment of external auditors, the Company shall appoint an external auditor appointed by the Audit Committee pursuant to the provisions of the Act on External Auditors of Stock Companies and shall report the appointment of external auditors at the first general shareholders’ meeting held thereafter or notify/publicly announce it to the shareholders.
Article 1: Effective Date
These articles of incorporation shall be effective as of March 15, 2021.
Article 2: Applicability to Appointment of Auditors
The amended provisions of Article 50 (3) and (5) (limited to the part relating to appointment) shall apply from auditors appointed after these articles of incorporation enter into force.
Article 3: Applicability to Auditor Dismissal
The amended provisions of Article 50 (4) and (5) (limited to dismissal) shall also apply to the dismissal of auditors appointed pursuant to the previous provisions at the time these articles of incorporation enter into force.
Enacted 2003-03-06 ㅣ Modified 2003-08-14
Modified 2004-03-26 ㅣ Modified 2004-10-04
Modified 2006-02-17 ㅣ Modified 2008-09-23
Modified 2009-07-28 ㅣ Modified 2011-02-28
Modified 2014-03-27 ㅣ Modified 2015-03-26
Modified 2016-03-18 ㅣ Modified 2019-03-15