Articles of Inc.

Provisions

Chapter 1. General Provisions

Article 1 【Company Name】

The name of the Company shall be OSCOTEC Co., Ltd. In English, the Company shall be referred to as Oscotec Inc., abbreviated as OCT Inc.

Article 2 【Purpose】

The purpose of the Company is to engage in the following businesses:

1. Development, production, and sale of osteoporosis treatments and other new drugs related to bone diseases

2. Development, production, and sale of tissue replacement materials

3. Development, production, and sale of drug delivery systems

4. Research and development, manufacture, and sale of gene-related products and technologies, including DNA chips

5. Development, manufacture, and sale of physiologically active substances through animal and plant cell culture

6. Development, manufacture, and sale of blood products

7. Research and development of health functional foods

8. Development, production, and sale of active pharmaceutical ingredients, pharmaceuticals, and diagnostic reagents

9. Development, production, and sale of medical devices and laboratory research equipment

10. Contract research services

11. Investment in and support of related biotechnology venture companies

12. Support for research relating to bone tissue, osteoporosis, and other bone diseases

13. Support for nonprofit organizations, including universities and research institutions

14. Development and sale of bioinformation and provision of related services

15. Development and sale of pharmaceuticals and medical equipment

16. General trading business

17. Import and export business

18. Trade agency business

19. Services relating to industrial and organizational engineering

20. Pharmaceutical wholesale and manufacturing business

21. Real estate leasing business

22. Mail-order sales business

23. Subdivision and repackaging of raw materials, including pharmaceuticals, health functional foods, ginseng products, and cosmetics

24. Subdivision and repackaging of pharmaceuticals, veterinary pharmaceuticals, and related products

25. Manufacture of active pharmaceutical ingredients

26. Manufacture of raw materials for veterinary pharmaceuticals

27. Manufacture and sale of pharmaceuticals, industrial chemicals, veterinary pharmaceuticals, quasi-drugs, cosmetics, agricultural chemicals, other chemical products, medical devices, and related products

28. Manufacture and sale of food products, food additives, ginseng products, soft drinks, health functional foods, and related products

29. Manufacture and sale of medical instruments, sanitary products, and related products

30. Distribution and logistics-related businesses

31. Internet e-commerce business

32. Manufacture, sale, wholesale, import, and export of pharmaceuticals, veterinary pharmaceuticals, medical instruments, and medical devices

33. Manufacture, processing, and sale of other food and beverage products

34. Storage and warehousing business

35. Manufacture, sale, import, and export of quasi-drugs, toothpaste, sanitary products, and packaging containers

36. Manufacture, processing, and sale of beverages, non-alcoholic beverages, and tea products

37. Market research and public opinion survey business

38. Financial business

39. Information processing and information and communications services using computers and telecommunications equipment

40. Sale of system integration and implementation services

41. Development, sale, and leasing of software

42. Professional services relating to information processing technology

43. Advanced information and communications services

44. Advertising agency business

45. Value-added telecommunications business

46. Domestic and international resource development, sale, distribution, and investment business

47. Retail business

48. Any and all businesses incidental or related to the foregoing

Article 3 【Location of Head Office and Establishment of Branches】

1. The head office of the Company shall be located in Seongnam-si, Gyeonggi-do.

2. The Company may, as necessary and by resolution of the Board of Directors, establish branches, liaison offices, offices, and local subsidiaries in Korea or abroad.

Article 4 【Method of Public Notice】

Public notices of the Company shall be posted on the Company’s website (http://www.oscotec.com). However, if the Company is unable to make such public notice through its website due to a system failure or any other unavoidable reason, the notice shall be published in The Hankyoreh, a daily newspaper published in Seoul (or its successor newspaper in the event of a merger or change of name). If publication in The Hankyoreh is not possible due to fire or other unavoidable circumstances, the notice may be published in The Korea Economic Daily, a daily newspaper published in Seoul.

 

 

Chapter 2. Shares

Article 5 【Total Number of Authorized Shares】

The total number of shares authorized to be issued by the Company shall be 40,000,000 shares.

Article 6 【Par Value per Share】

The par value of each share shall be KRW 500.

Article 7 【Total Number of Shares Issued at Incorporation】

The total number of shares to be issued by the Company at the time of incorporation shall be 10,330 shares, based on a par value of KRW 5,000 per share.

Article 8 【Issuance and Form of Shares】

1. Shares issued by the Company shall be registered shares.

2. When the Company issues shares or other securities pursuant to Article 2, Item 1 of the Act on Electronic Registration of Stocks, Bonds, Etc., such shares or securities shall be electronically registered in the electronic registration account books of an electronic registration institution.

Article 9 【Types, Number, and Terms of Shares】

1. The Company may issue common shares and preferred shares. Preferred shares shall have preferential rights over common shares with respect to dividends and distribution of residual assets.

2. Of the total number of authorized shares specified in Article 5, the maximum number of preferred shares that may be issued shall be 10,000,000 shares.

3. The minimum dividend rate for preferred shares shall be determined by the Board of Directors at the time of issuance within the range of 1% to 10% per annum based on the issue price of the shares.

4. At the time of issuance, the Board of Directors may determine that, after paying the dividend prescribed in Paragraph 3 on preferred shares and paying a dividend on common shares at the same rate as that applicable to preferred shares, any remaining distributable profits shall be distributed equally between common shares and preferred shares.

5. At the time of issuance, the Board of Directors may determine that, if the dividend prescribed in Paragraph 3 is not paid in any fiscal year, the unpaid dividend shall accumulate and be paid in priority at the time of dividend distribution in the following fiscal year.

6. Holders of preferred shares shall have voting rights.

7. The duration of preferred shares may be determined by the Board of Directors at the time of issuance within a period of not less than one year and not more than ten years from the date of issuance. Upon expiration of such period, the preferred shares shall be converted into common shares. However, if the prescribed dividend has not been paid during such period, the duration shall be extended until the prescribed dividend has been fully paid.

8. Article 10-4 shall apply mutatis mutandis to dividends on new shares issued as a result of conversion pursuant to Paragraph 7.

9. If the Company conducts a rights offering or bonus issue, new shares allocated in respect of preferred shares shall be common shares in the case of a rights offering and preferred shares of the same class in the case of a bonus issue.

Article 9-2 【Redeemable Shares】

1. When issuing preferred shares, the Company may, by resolution of the Board of Directors, issue such preferred shares as redeemable shares that may be retired out of profits at the request of the Company or the relevant shareholder.

2. The redemption period for redeemable shares issued by the Company shall be determined by the Board of Directors at the time of issuance within a period of not less than one year and not more than ten years from the date of issuance.

3. The redemption price of redeemable shares shall be determined by the Board of Directors at the time of issuance, taking into account the issue price of the preferred shares, market interest rates, and dividends previously paid on the preferred shares.

4. At the time of issuance, the Board of Directors shall determine whether redeemable shares shall be redeemed by the Company upon request of a shareholder during the redemption period or upon a decision by the Company to redeem them during the redemption period. However, the Company shall be obligated to redeem such shares on the final day of the redemption period.

5. If the Company intends to redeem redeemable shares, it shall establish a period of at least one month and notify shareholders and pledgees recorded in the shareholder register of its intention to redeem the shares and of the requirement to submit share certificates to the Company.

Article 9-3 【Convertible Shares】

1. When issuing preferred shares, the Company may, by resolution of the Board of Directors, issue such preferred shares as convertible shares that may be converted into common shares at the request of the shareholder.

2. The period for requesting conversion shall extend until the day immediately preceding the expiration of the preferred shares; provided, however, that at the time of issuance the Board of Directors may determine a different period within a range of not less than one year and not more than ten years from the date of issuance.

3. The conversion price shall be the issue price of the preferred shares; provided, however, that at the time of issuance the Board of Directors may provide for adjustment of the conversion price in consideration of the issue price, market price, and other relevant factors.

4. Article 10-4 shall apply mutatis mutandis to dividends on new shares issued through conversion pursuant to Paragraph 1.

Article 10 【Preemptive Rights】

1. Shareholders of the Company shall have the right to receive an allocation of newly issued shares in proportion to the number of shares they hold.

2. Notwithstanding Paragraph 1, new shares may be allocated to persons other than existing shareholders in any of the following cases:

1) Where new shares are issued through a general public offering

2) Where new shares are preferentially allocated to members of an employee stock ownership association

3) Where new shares are issued as a result of the exercise of stock options

4) Where new shares are issued in connection with the issuance of Depositary Receipts (DRs)

5) Where the Company issues new shares for foreign investment pursuant to the Foreign Investment Promotion Act as necessary for management purposes

6) Where the Company raises funds by issuing new shares to specified domestic or foreign investors, financial institutions, creditors, joint venture partners, technology or marketing alliance partners, customers, or other parties for the introduction of new technologies, improvement of its financial structure, or other management purposes

7) Where the Company issues new shares in consideration of contributions in kind

3. If a shareholder waives or loses preemptive rights or if fractional shares arise in the allocation of new shares, the method of disposition thereof shall be determined by resolution of the Board of Directors.

Article 10-2 【General Public Offering, Etc.】

1. The Company may issue new shares through a general public offering within a limit not exceeding 30% of the total number of issued shares.

2. The Company may issue Depositary Receipts (DRs) by resolution of the Board of Directors within a limit not exceeding 30% of the total number of issued shares.

3. The Company may, by resolution of the Board of Directors and for management purposes, issue new shares for foreign investment pursuant to the Foreign Investment Promotion Act within a limit not exceeding 30% of the total number of issued shares.

4. The Company may, by resolution of the Board of Directors and within a limit not exceeding 30% of the total number of issued shares, issue new shares to specified domestic or foreign investors, financial institutions and creditors, joint venture partners, technology and marketing alliance partners, customers, and other parties in order to introduce new technologies, improve its financial structure, or achieve other management objectives.

5. The Company may, by resolution of the Board of Directors and within a limit not exceeding 30% of the total number of issued shares, issue new shares in consideration of contributions in kind.

6. When new shares are issued pursuant to the methods described in Paragraphs 1 through 6, the class and number of shares to be issued and their issue price shall be determined by resolution of the Board of Directors. In such case, the issue price of the new shares shall not be lower than the price prescribed in Article 176-8 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act.

Article 10-3 【Stock Options】

1. The Company may, by special resolution of the General Meeting of Shareholders, grant stock options to executives and employees, outside experts such as professors and researchers, universities, research institutions, and other eligible persons within a limit of 15% of the total number of issued shares. However, stock options may be granted by resolution of the Board of Directors within a limit of 3% of the total number of issued shares.

2. Persons eligible to receive stock options shall be executives and employees of the Company who have contributed, or have the ability to contribute, to the incorporation, management, technological innovation, or other development of the Company, as well as executives and employees of related companies prescribed in Article 9 of the Enforcement Decree of the Commercial Act.

3. Notwithstanding Paragraph 2, stock options may not be granted to persons specified in Article 340-2, Paragraph 2 of the Commercial Act, or to the largest shareholder, major shareholders, or their specially related persons under the Commercial Act. However, stock options may be granted to a person who becomes a specially related person by becoming an executive of the Company or of a related company prescribed in Article 9, Paragraph 1 of the Enforcement Decree of the Commercial Act, including a director or auditor who is not engaged in the ordinary business of an affiliated company.

4. Shares to be delivered upon exercise of stock options, including shares used as the basis for calculating the difference between the exercise price and market price where such difference is paid in cash or treasury shares, shall be registered common shares.

5. Stock options granted to any one executive or employee shall not exceed 10% of the total number of issued shares.

6. The purchase price per share for shares acquired through exercise of stock options shall be no less than the amounts set forth below. The same shall apply where the issue price is adjusted after the stock options have been granted.

1) Where new shares are issued and delivered, the higher of the following:

가. The fair value of the shares as of the date the stock options are granted

나. The par value of the relevant shares

2) In cases other than Item 1, the fair value of the relevant shares prescribed in Item 1(a)

7. Stock options may be exercised within five years from the date on which three years have elapsed from the date of the General Meeting of Shareholders resolution granting such stock options.

8. Executives and employees granted stock options must have continuously served as executives or employees for at least two years from the date of the resolution under Paragraph 1 in order to exercise such rights. However, if an executive or employee granted stock options dies, retires upon reaching retirement age, or otherwise leaves office or employment within two years from the date of such resolution for reasons not attributable to such person, the stock options may be exercised during the applicable exercise period.

9. Article 10-4 shall apply mutatis mutandis to dividends on new shares issued as a result of the exercise of stock options.

10. The grant of stock options may be canceled by resolution of the Board of Directors in any of the following cases:

1) Where the relevant executive or employee voluntarily resigns or retires within three years after being granted the stock options

2) Where the relevant executive or employee causes material damage to the Company intentionally or negligently

3) Where the Company is unable to honor the exercise of stock options due to bankruptcy, dissolution, or similar circumstances

4) Where any other ground for cancellation specified in the stock option agreement occurs

Article 10-4 【Commencement Date for Dividends on New Shares】

Shares issued through a rights offering, bonus issue, or stock dividend prior to the dividend record date determined by the Company shall be entitled to equal dividends.

Article 11 【Transfer Agent】

1. The Company shall appoint a transfer agent for its shares.

2. The transfer agent, the location where its services are provided, and the scope of delegated services shall be determined by resolution of the Board of Directors and publicly announced.

3. The Company shall keep the shareholder register or a duplicate thereof at the office of the transfer agent, and matters relating to electronic registration of shares, management of the shareholder register, and other share-related administrative matters shall be handled by the transfer agent.

4. Procedures relating to the matters described in Paragraph 3 shall be governed by the transfer agent’s regulations concerning securities transfer agency services.

Article 12 Deleted

Article 13 【Closing of Shareholder Register and Record Date】

1. Changes to entries in the shareholder register relating to rights shall be suspended each year from January 1 through January 31.

2. Shareholders recorded in the final shareholder register as of December 31 of each year shall be entitled to exercise shareholder rights at the Ordinary General Meeting of Shareholders relating to that fiscal year.

3. When an Extraordinary General Meeting of Shareholders is to be convened or when otherwise necessary, the Company may, by resolution of the Board of Directors, suspend changes to entries in the shareholder register relating to rights for a specified period not exceeding three months, or designate shareholders recorded in the shareholder register on a specified date within three months as the shareholders entitled to exercise such rights. If deemed necessary by the Board of Directors, both suspension of changes to the shareholder register and designation of a record date may be implemented simultaneously. The Company shall publicly announce such measures at least two weeks in advance.

 

 

Chapter 3. Bonds

Article 14 【Issuance of Convertible Bonds】

1. The Company may, by resolution of the Board of Directors, issue convertible bonds to persons other than shareholders in any of the following cases:

1) Where convertible bonds are issued through a general public offering or shareholder-priority offering within an aggregate face value not exceeding KRW 50 billion

2) Where convertible bonds are issued to domestic or foreign financial institutions or institutional investors for urgent financing needs within an aggregate face value not exceeding KRW 50 billion

3) Where convertible bonds are issued to specified domestic or foreign investors, financial institutions and creditors, joint venture partners, technology and marketing alliance partners, customers, or other parties for the introduction of new technologies, improvement of the financial structure, or other management purposes within an aggregate face value not exceeding KRW 50 billion

2. With respect to convertible bonds under Paragraph 1, the Board of Directors may issue such bonds on the condition that conversion rights are granted only in respect of a portion thereof.

3. Shares issued upon conversion shall be common shares, and the conversion price shall be equal to or greater than the par value of the shares as determined by the Board of Directors at the time the bonds are issued.

4. The period during which conversion may be requested shall commence one month after the date of issuance of the relevant bonds and continue until the day immediately preceding the maturity date. However, where the bonds are issued by a method other than a public offering, the conversion period shall commence one year after the date of issuance and continue until the day immediately preceding the maturity date.

5. Article 10-4 shall apply mutatis mutandis to dividends on shares issued through conversion and to payment of interest on convertible bonds.

Article 15 【Issuance of Bonds with Warrants】

1. The Company may, by resolution of the Board of Directors, issue bonds with warrants to persons other than shareholders in any of the following cases:

1) Where bonds with warrants are issued through a general public offering or shareholder-priority offering within an aggregate face value not exceeding KRW 50 billion

2) Where bonds with warrants are issued to domestic or foreign financial institutions or institutional investors for urgent financing needs within an aggregate face value not exceeding KRW 50 billion

3) Where bonds with warrants are issued to specified domestic or foreign investors, financial institutions and creditors, joint venture partners, technology and marketing alliance partners, customers, or other parties for the introduction of new technologies, improvement of the financial structure, or other management purposes within an aggregate face value not exceeding KRW 50 billion

2. The amount for which subscription for new shares may be requested shall be determined by the Board of Directors within a limit not exceeding the aggregate face value of the bonds.

3. Shares issued upon exercise of warrants shall be common shares, and the issue price shall be equal to or greater than the par value of the shares as determined by the Board of Directors at the time the bonds are issued.

4. The period during which warrants may be exercised shall commence one month after issuance of the relevant bonds and continue until the day immediately preceding the maturity date. However, where the bonds are issued by a method other than a public offering, the exercise period shall commence one year after the date of issuance and continue until the day immediately preceding the maturity date. The Board of Directors may adjust the exercise period within the foregoing period.

5. Article 10-4 shall apply mutatis mutandis to dividends on shares issued as a result of the exercise of warrants.

Article 15-2 【Delegation of Bond Issuance】

The Board of Directors may delegate to the Representative Director the authority to determine the amount and type of bonds and to issue such bonds within a period not exceeding one year.

Article 16 【Provisions Applicable to Bond Issuance】

Articles 11 and 12 shall apply mutatis mutandis to the issuance of bonds.

 

 

Chapter 4. General Meeting of Shareholders

Article 17 【Timing of Meetings】

1. General Meetings of Shareholders of the Company shall consist of Ordinary General Meetings of Shareholders and Extraordinary General Meetings of Shareholders.

2. An Ordinary General Meeting of Shareholders shall be convened within three months after the end of each fiscal year, and an Extraordinary General Meeting of Shareholders shall be convened as necessary.

Article 18 【Authority to Convene Meetings】

1. Except as otherwise provided by applicable laws and regulations, a General Meeting of Shareholders shall be convened by the Representative Director pursuant to a resolution of the Board of Directors.

2. If the Representative Director is unable to perform his or her duties, Article 34, Paragraph 2 shall apply mutatis mutandis.

Article 19 【Notice and Public Announcement of Meetings】

1. When convening a General Meeting of Shareholders, written or electronic notice stating the date, time, place, and agenda of the meeting shall be sent to each shareholder at least two weeks prior to the meeting date.

2. Notice to shareholders holding 1% or less of the total number of issued shares with voting rights may be substituted by publishing, at least twice, a notice stating that a General Meeting of Shareholders will be convened and describing the agenda of the meeting in The Hankyoreh and The Korea Economic Daily, both daily newspapers published in Seoul, at least two weeks prior to the meeting, or by making an electronic public announcement.

Article 20 【Place of Meeting】

General Meetings of Shareholders shall be held at the location of the head office; provided, however, that meetings may be held in nearby areas if necessary.

Article 21 【Chairperson】

1. The Representative Director shall serve as chairperson of the General Meeting of Shareholders.

2. If the Representative Director is unable to perform his or her duties, Article 34, Paragraph 2 shall apply mutatis mutandis.

Article 22 【Authority of the Chairperson to Maintain Order】

1. The chairperson of the General Meeting of Shareholders may order any person who materially disrupts order, including by making statements or engaging in conduct intended to obstruct the proceedings, to cease speaking or leave the meeting.

2. If deemed necessary for the orderly conduct of the meeting, the chairperson may limit the duration and number of times a shareholder may speak.

Article 23 【Voting Rights of Shareholders】

Each shareholder shall have one vote for each share held.

Article 24 【Restriction of Voting Rights on Cross-Held Shares】

If the Company, its parent company, or its subsidiary, or a subsidiary of the Company, holds more than one-tenth of the total issued shares of another company, shares of the Company held by such other company shall have no voting rights.

Article 25 【Split Exercise of Voting Rights】

1. A shareholder holding two or more voting rights who intends to exercise such voting rights non-uniformly shall notify the Company in writing or by electronic document of such intention and the reasons therefor at least three days prior to the meeting date.

2. The Company may refuse a shareholder’s split exercise of voting rights. However, this shall not apply where the shareholder holds shares under a trust or otherwise holds shares on behalf of another person.

Article 26 【Exercise of Voting Rights by Proxy】

1. A shareholder may appoint a proxy to exercise voting rights on the shareholder’s behalf.

2. The proxy referred to in Paragraph 1 shall submit a written document evidencing the authority of representation, including a power of attorney, before commencement of the General Meeting of Shareholders.

Article 27 【Method of Resolution at General Meetings of Shareholders】

1. Except as otherwise provided by applicable laws and regulations, resolutions of a General Meeting of Shareholders shall be adopted by a majority of the voting rights of shareholders present and by votes representing at least one-fourth of the total number of issued shares.

2. Removal of two or more directors simultaneously shall require the affirmative vote of shareholders representing at least four-fifths of the total number of issued shares.

3. Where directors are removed or elected pursuant to a shareholder proposal at a General Meeting of Shareholders, such resolution shall require the affirmative vote of shareholders representing at least four-fifths of the total number of issued shares.

4. Election of new directors or removal of existing directors in connection with a hostile takeover or merger shall require the affirmative vote of shareholders representing at least four-fifths of the total number of issued shares.

5. Any amendment to the Articles of Incorporation relating to Paragraphs 2, 3, or 4 shall also require the affirmative vote of shareholders representing at least four-fifths of the total number of issued shares.

Article 28 【Minutes of General Meetings of Shareholders】

The proceedings of a General Meeting of Shareholders shall be recorded in minutes describing the course and results of the meeting, and the chairperson and directors present shall affix their names and seals or signatures thereto. The minutes shall be kept at the head office and branches of the Company.

 

 

Chapter 5. Directors and Board of Directors

Article 29 【Number of Directors】

1. The Company shall have not fewer than three and not more than ten directors.

Article 30 【Election of Directors】

1. Directors shall be elected at a General Meeting of Shareholders.

2. Directors shall be elected by a majority of the voting rights of shareholders present, provided that such majority represents at least one-fourth of the total number of issued shares.

3. Where two or more directors are elected, the cumulative voting system prescribed in Article 382-2 of the Commercial Act shall apply. Matters relating to cumulative voting not otherwise provided for in these Articles of Incorporation shall be governed by Article 382-2 of the Commercial Act.

Article 31 【Term of Office of Directors】

The term of office of a director shall be three years. However, if such term expires after the end of the final fiscal year but before the Ordinary General Meeting of Shareholders relating to such fiscal year, the term shall be extended until the conclusion of that General Meeting of Shareholders.

Article 32 【Filling Vacancies among Directors】

If a vacancy occurs among the directors, a replacement director shall be elected at a General Meeting of Shareholders. However, this shall not apply if the number of directors does not fall below the minimum prescribed in Article 29 and there is no impediment to the performance of the Company’s business.

Article 33 【Appointment of Representative Director and Other Officers】

The Company may, by resolution of the Board of Directors, appoint one or more Representative Directors, a President, Vice Presidents, Executive Directors, and Managing Directors.

Article 34 【Duties of Directors】

1. The Representative Director shall represent the Company, execute resolutions of the Board of Directors, oversee the overall business affairs of the Company, and ensure that all directors are provided with up-to-date information regarding the Company’s current management status and other relevant matters.

2. Vice Presidents, Executive Directors, Managing Directors, and other directors shall assist the President and perform the duties allocated to them in accordance with resolutions of the Board of Directors. If the Representative Director is unable to perform his or her duties, such duties shall be performed in the foregoing order.

Article 34-2 【Duty of Directors to Report】

If a director discovers any fact that may cause substantial damage to the Company, the director shall immediately report such fact to the Auditor.

Article 35 【Composition and Convocation of the Board of Directors】

1. The Board of Directors shall consist of the directors and shall resolve important matters relating to the business of the Company.

2. Meetings of the Board of Directors shall be convened by the Chairperson of the Board by giving notice to each director and Auditor at least three days prior to the meeting date. However, the convocation procedure may be omitted with the consent of all directors and Auditors.

3. Deleted

Article 35-2 【Chairperson of the Board of Directors】

1. The Chairperson of the Board of Directors shall be appointed from among the inside directors by resolution of the Board of Directors.

2. If the Chairperson of the Board of Directors is unable to attend a Board meeting, the duties of the Chairperson shall be performed by the inside directors in order of seniority of appointment.

Article 35-3 【Term of Office of the Chairperson of the Board】

The term of office of the Chairperson of the Board shall be the same as the term of office of the director appointed as Chairperson.

Article 36 【Method of Resolution of the Board of Directors】

1. Except as otherwise provided by applicable laws and regulations or these Articles of Incorporation, resolutions of the Board of Directors shall require the attendance of a majority of all directors and the affirmative vote of a majority of directors present.

2. The Board of Directors may permit all or some directors to participate in resolutions by means of remote communication that enables all directors to transmit and receive audio simultaneously without being physically present at the meeting. In such case, the relevant directors shall be deemed to have attended the meeting in person.

3. A person having a special interest in a resolution of the Board of Directors shall not exercise voting rights with respect to such resolution.

Article 36-2 【Committees within the Board of Directors】

1. The Board of Directors shall establish an Internal Transaction Committee and an Investment Review Committee and may establish various other committees, including an Outside Director Candidate Recommendation Committee, to deliberate and resolve matters prescribed by applicable laws and regulations or these Articles of Incorporation or delegated by the Board of Directors.

2. Details regarding the composition, authority, and operation of each committee shall be determined by resolution of the Board of Directors.

3. Articles 35 through 37 shall apply mutatis mutandis to such committees.

Article 37 【Minutes of Board Meetings】

1. Minutes shall be prepared for proceedings of the Board of Directors.

2. The minutes shall state the agenda, course of proceedings, results, names of persons opposing a resolution, and reasons for such opposition, and shall be signed or sealed by the directors and Auditor present.

Article 38 【Remuneration and Retirement Benefits of Directors】

1. Remuneration of directors shall be determined by resolution of the General Meeting of Shareholders.

2. Retirement benefits of directors shall be paid in accordance with the Regulations on Retirement Benefits for Executives approved by resolution of the General Meeting of Shareholders.

Article 38-2 【Limitation of Directors’ Liability】

The Company shall exempt a director from liability under Article 399 of the Commercial Act to the extent that such liability exceeds six times the amount of remuneration received by the director during the one-year period immediately preceding the date of the relevant act, including bonuses and gains derived from the exercise of stock options, or three times such amount in the case of an independent director. However, this limitation shall not apply where the director caused damage intentionally or through gross negligence or in cases falling under Articles 397, 397-2, or 398 of the Commercial Act.

Article 39 【Advisors and Consultants】

The Company may, by resolution of the Board of Directors, appoint one or more advisors or consultants in the fields of research and development and management.

 

 

Chapter 6. Auditors

Article 40 【Auditors】

1. The Company shall have not fewer than one and not more than two Auditors.

2. A proposal for the election of an Auditor shall be resolved separately from a proposal for the election of directors.

3. An Auditor shall be elected by a majority of the voting rights of shareholders present, provided that such majority represents at least one-fourth of the total number of issued shares. A shareholder holding more than 3% of the total number of issued shares with voting rights may not exercise voting rights with respect to shares exceeding such 3% threshold in connection with the election of an Auditor under Paragraph 1. However, in calculating the number of shares held, voting shares owned by the largest shareholder and its specially related persons, persons holding shares for the account of the largest shareholder or such specially related persons, and persons to whom the largest shareholder or such specially related persons have delegated voting rights shall be aggregated.

Article 41 【Term of Office of Auditors】

The term of office of an Auditor shall continue until the conclusion of the Ordinary General Meeting of Shareholders relating to the final fiscal year ending within three years after the Auditor assumes office.

Article 42 【Filling Vacancies among Auditors】

If a vacancy occurs among the Auditors, a replacement Auditor shall be elected at a General Meeting of Shareholders. However, this shall not apply if the number of Auditors does not fall below the minimum prescribed in Article 40 and there is no impediment to the performance of the Company’s business.

Article 43 【Duties of Auditors, Etc.】

1. Auditors shall audit the accounting and business affairs of the Company.

2. An Auditor may request the convocation of an Extraordinary General Meeting of Shareholders by submitting to the Board of Directors a written document stating the agenda and reasons for convening the meeting.

3. If necessary for the performance of the Auditor’s duties, the Auditor may request a subsidiary to report on its business. If the subsidiary fails to make such report without delay or if it is necessary to verify the contents of the report, the Auditor may investigate the business and financial condition of the subsidiary.

4. Article 38-2 shall apply mutatis mutandis to Auditors.

5. Auditors may obtain assistance from experts at the expense of the Company.

6. If necessary, an Auditor may request the convocation of a meeting of the Board of Directors by submitting to a director, or to the person authorized to convene the Board where such person has been designated, a written document stating the agenda and reasons for convening the meeting.

7. If a director fails to convene a Board meeting without delay after receiving a request under Paragraph 6, the Auditor making such request may convene the Board meeting.

Article 44 【Audit Records】

An Auditor shall prepare audit records concerning each audit. The audit records shall describe the procedures and results of the audit and shall be signed or sealed by the Auditor who conducted the audit.

Article 45 【Remuneration and Retirement Benefits of Auditors】

1. Remuneration of Auditors shall be determined by resolution of the General Meeting of Shareholders. A proposal for determining remuneration of Auditors shall be resolved separately from a proposal for determining remuneration of directors.

2. Retirement benefits of Auditors shall be paid in accordance with the Regulations on Retirement Benefits for Executives approved by resolution of the General Meeting of Shareholders.

 

 

Chapter 7. Accounting

Article 46 【Fiscal Year】

The fiscal year of the Company shall commence on January 1 and end on December 31 of each year.

Article 47 【Preparation of Financial Statements, Etc.】

1. The Representative Director (President) of the Company shall prepare the documents prescribed in Articles 447 and 447-2 of the Commercial Act at least six weeks prior to the date of the Ordinary General Meeting of Shareholders, obtain approval of the Board of Directors, and submit such documents to the Auditor for audit. The documents prescribed in Article 447 of the Commercial Act shall be submitted to the Ordinary General Meeting of Shareholders for approval, and the documents prescribed in Article 447-2 shall be submitted to the Ordinary General Meeting of Shareholders for reporting.

2. The Auditor shall submit an audit report to the Representative Director (President) no later than one week prior to the Ordinary General Meeting of Shareholders.

3. The Representative Director (President) shall make the documents referred to in Paragraph 1 and the audit report available at the head office for five years and copies thereof at branches for three years beginning one week prior to the date of the Ordinary General Meeting of Shareholders.

4. Notwithstanding Paragraph 1, where an external auditor has expressed the opinion that the documents prescribed in Article 447 of the Commercial Act fairly present the financial position and operating results of the Company in accordance with applicable laws and these Articles of Incorporation, and all Auditors consent, the Company may approve such documents by resolution of the Board of Directors.

5. The contents of documents approved pursuant to Paragraph 4 shall be reported to the General Meeting of Shareholders.

6. Upon obtaining approval pursuant to Paragraph 1 or Paragraph 4, the Representative Director (President) shall, without delay, publicly announce the balance sheet and the external auditor’s audit opinion, if the Company has appointed an external auditor.

Article 47-2 【Appointment of External Auditor】

When appointing an external auditor, the Auditor shall select the external auditor with the approval of the Auditor Appointment Committee in accordance with the Act on External Audit of Stock Companies, Etc., and the Company shall report such appointment at the first Ordinary General Meeting of Shareholders convened after the appointment or notify or publicly announce the appointment to shareholders.

Article 48 【Appropriation of Profits】

The Company shall appropriate unappropriated retained earnings for each fiscal year in the following order:

1) Legal reserve

2) Other statutory reserves

3) Dividends

4) Voluntary reserves

5) Other appropriations of retained earnings

Article 49 【Dividends】

1. Dividends may be paid in cash or in property other than cash.

2. Where dividends are paid in shares and the Company has issued different classes of shares, dividends may be paid in shares of the corresponding class.

3. For purposes of paying dividends under Paragraph 1, the Company shall determine, by resolution of the Board of Directors, a record date for identifying shareholders entitled to receive the dividend, and shall publicly announce such record date at least two weeks in advance.

4. Dividends shall be determined by resolution of the General Meeting of Shareholders. However, where the financial statements are approved by the Board of Directors pursuant to Article 47, Paragraph 4, dividends may be determined by resolution of the Board of Directors.

 

Article 50 【Statute of Limitations on Claims for Payment of Dividends】

1. The right to claim payment of dividends shall expire by prescription if not exercised for five years.

2. Dividends for which the statute of limitations has expired pursuant to Paragraph 1 shall revert to the Company.

 

Article 51 【Applicable Provisions】

Matters not provided for in these Articles of Incorporation shall be governed by laws and regulations applicable to General Meetings of Shareholders and commercial matters and by other applicable laws and regulations.

 

Article 52 【Establishment of Internal Regulations】

The Company may, as necessary and by resolution of the Board of Directors, establish detailed rules and other internal regulations necessary for the conduct of business and management.

 

Article 53 【Incorporation Expenses】

Incorporation expenses to be borne by the Company shall not exceed KRW 7,000,000.

 

Article 54 【Incorporators】

The names, resident registration numbers, and addresses of the incorporators of the Company shall be as set forth at the end of these Articles of Incorporation.

Supplementary Provisions

1. These Articles of Incorporation shall take effect on November 25, 1998.

2. These Articles of Incorporation shall take effect on March 13, 1999.

3. These Articles of Incorporation shall take effect on June 23, 1999.

4. These Articles of Incorporation shall take effect on December 9, 1999.

5. These Articles of Incorporation shall take effect on March 4, 2000.

6. These Articles of Incorporation shall take effect on June 9, 2000.

7. These Articles of Incorporation shall take effect on March 20, 2003.

8. These Articles of Incorporation shall take effect on March 25, 2004.

9. These Articles of Incorporation shall take effect on March 24, 2005.

10. These Articles of Incorporation shall take effect on July 15, 2005.

11. These Articles of Incorporation shall take effect on March 27, 2007.

12. These Articles of Incorporation shall take effect on March 25, 2008.

13. These Articles of Incorporation shall take effect on March 25, 2011.

14. These Articles of Incorporation shall take effect on March 20, 2012. However, the amended provisions of Article 15-2, Article 36, Article 38-2, Article 43, Article 47, and Article 49 shall take effect on April 15, 2012.

15. These Articles of Incorporation shall take effect on March 28, 2019. However, the amended provisions of Article 8-2, Article 15, Article 16, and Article 22 shall take effect on the date the Enforcement Decree of the Act on Electronic Registration of Stocks, Bonds, Etc. comes into force.

16. These Articles of Incorporation shall take effect on March 26, 2020.

17. These Articles of Incorporation shall take effect on March 27, 2025. The cumulative voting provision under Article 30, Paragraph 3 shall apply beginning with the 2026 Ordinary General Meeting of Shareholders.

18. These Articles of Incorporation shall take effect on March 30, 2026. However, the amended provision of Article 38-2 shall take effect on July 23, 2026.