EXHIBIT 1.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
WIDERTHAN CO., LTD.
CHAPTER I. GENERAL PROVISIONS
ARTICLE 1. COMPANY NAME
The name of the Company shall be "WiderThan Chusik Hoesa" in Korean, which will
be expressed in the English language as "WiderThan Co., Ltd." (hereinafter
referred to as the "Company").
ARTICLE 2. OBJECTIVES
The objectives of the Company shall be to engage in the following businesses:
(1) Business of providing internet services utilizing wire and wireless
networks;
(2) Business of developing, distributing and selling data and information using
telecommunications network;
(3) Business of electronic commerce;
(4) Business of distributing, selling and renting electronic and
telecommunication equipment;
(5) Business of advertisement;
(6) Business of providing multimedia contents;
(7) Business of operating web hosting and data centers;
(8) Business of distributing and developing software;
(9) Business of publishing;
(10) Business related to import and export of the foregoing businesses;
(11) Business related to research and development and consulting of the
foregoing businesses;
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(12) Businesses utilizing broadcasting channel and business incidental to the
foregoing businesses;
(13) Business of producing broadcast program, leasing of facilities;
(14) Business of producing advertisement and agency
(15) Other businesses incidental to the foregoing businesses.
ARTICLE 3. LOCATION OF OFFICES
The principal office of the Company shall be in Seoul and branch and other
offices may be established at any other suitable places by resolution of the
Board of Directors ("Board").
ARTICLE 4. PUBLIC NOTICES
Public notices by the Company shall be published in the Maeil Business
Newspaper, a daily Korean language newspaper of general circulation published in
Seoul.
CHAPTER II. SHARES OF STOCK
ARTICLE 5. NUMBER OF AUTHORIZED SHARES
The total number of shares of the Company authorized for issuance shall be
30,000,000 common shares
ARTICLE 6. PAR VALUE OF SHARES
Par value of all shares issued by the Company shall be 500 Won per share.
ARTICLE 7. NUMBER OF SHARES ISSUED AT THE TIME OF INCORPORATION
The total number of shares to be issued at the time of incorporation of the
Company shall be 120,000.
ARTICLE 8. SHARE CERTIFICATES
All shares to be issued by the Company shall be registered common shares. Share
certificates shall be issued by the Company in eight denominations: one (1),
five (5), ten (10), fifty (50), one hundred (100), five hundred (500), one
thousand (1,000) and ten thousand (10,000).
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ARTICLE 9. NON-ISSUANCE OF SHARE CERTIFICATES
At the request of a shareholder, the Company shall not issue share certificates
for all or part of the shares owned by such shareholder.
ARTICLE 10. PRE-EMPTIVE RIGHTS
(1) Each holder of common shares (each, a "Participation Rights Holder") shall
have the right of participation to purchase its Pro Rata Share (as defined
in sub-paragraph (A) below), of all (or any part) of any New Securities (as
defined in sub-paragraph (B) below) that the Company may from time to time
issue (the "Right of Participation").
A. Pro Rata Share. A Participation Rights Holder's "Pro Rata Share" for
purposes of the Right of Participation is the following ratio:
the number of equity shares of the Company held by such Participation
Rights Holder divided by all equity shares of the Company issued and
outstanding (excluding shares issuable upon the exercise of
outstanding options).
B. New Securities. "New Securities" shall mean any Preferred Shares or
any other equity and equity-related securities of the Company, whether
now authorized or not, and rights, options or warrants to purchase
such Preferred Shares or securities of any type whatsoever that are,
or may become, convertible or exchangeable into such Preferred Shares
or other securities of the Company, provided, however, that the term
"New Securities" shall not include:
(i) any securities issued in connection with any stock split, stock
dividend or other similar event in which the Participation
Rights Holders are entitled to participate according to their
Pro Rata Share;
(ii) any securities issued upon the exercise, conversion or exchange
of any outstanding convertible securities, warrants or stock
options in connection with bona fide employment-related share
purchase or option plans;
(iii) any securities issued pursuant to the acquisition of another
corporation or entity by the Company or any of its subsidiaries
by consolidation, merger, purchase of assets or businesses;
(2) Without being subject to the Right of Participation under Paragraph 1 of
this Article 10, in each case described in Article 10 (1)B(i) to (iii), the
Company may issue and allot new shares to third parties other than the
existing shareholders by the resolution adopted at the meeting of the
Board.
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(3) Notwithstanding any contrary provisions, in the case that an approval by
the shareholders is required under the Nasdaq regulations for the issuance
of new shares, the Company shall issue new shares by a resolution adopted
at the General Meeting of Shareholders.
ARTICLE 10-2. STOCK OPTIONS
(1) The Company may grant stock options to its officers and employees within
the scope of 10/100 of the total number of issued and outstanding shares by
special resolution adopted at the General Meeting of Shareholders.
(2) The officers and employees of the Company who have contributed the
establishment of the Company or the innovations in management or technology
of the Company, or who have the capability to make such contribution, can
be granted stock options, except for the following persons:
(i) a shareholder who holds 10/100 or more of the total outstanding
shares of the Company excluding the shares without voting rights;
(ii) a person who practically exercises his influence over important
matters relating to the management of the company such as the
appointment or dismissal of directors and the like; or
(iii) the spouse, lineal ascendants or descendents of the person provided
in above (i) and (ii).
(3) The shares to be delivered by exercising the stock option (in the case that
any difference between the exercise price of stock option and the market
price of stock is compensated by cash or treasury stock, such shares mean
the shares which are the basis for calculation of such difference) shall be
registered common stocks.
(4) The number of stock options granted to any one officer or employee shall
not exceed 10/100 of the total number of issued and outstanding shares of
the Company.
(5) The exercise price per share of stock options and any adjusted exercise
price per share after stock options are granted shall not be less than
either of the following:
(A) In the event that new shares are issued, the larger amount of: (i) the
fair value of such shares as of the date the stock options are granted
and (ii) the par value of such shares; or
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(B) In the event that the Company is transferring treasury shares, the
fair value as of the date the stock options are granted.
(6) The stock option may be exercised within the period determined by the
special resolution of the General Meeting of Shareholders granting such
stock option within ten (10) years from the second anniversary of the
special resolution granting such stock option adopted at the General
Meeting of Shareholders.
(7) The stock option may be exercised by a person who has served more than two
(2) years from the date of the General Meeting of Shareholders granting
such stock option
(8) With respect to the payment of dividends on the shares issued upon exercise
of stock option, Article 10-3 shall apply mutatis mutandis.
(9) The granted stock option may be cancelled and revoked by the resolution of
the Board in any of the following cases:
(i) In case the concerned officer or employee retires, at will, from the
Company, after being granted stock options;
(ii) In case the concerned officer or employee intentionally or
inadvertently causes a material damages to the Company after being
granted stock options;
(iii) In case the Company is not able to issue or transfer shares upon
exercise of stock option due to its bankruptcy, dissolution, etc.; or
(iv) In case there occurs any cancellation event set forth in stock option
agreements.
ARTICLE 10-3. BASIS FOR CALCULATION OF DIVIDENDS ON NEW SHARES
In the event that Company issues new shares by a rights issue, bonus issue or
stock dividend, for the purpose of distributing dividends on such newly-issued
shares, such newly-issued shares shall be deemed to have been issued at the end
of the fiscal year immediately preceding the fiscal year during which such
newly-issued shares are issued.
ARTICLE 11. SHARE ISSUANCE AT MARKET VALUE
The Company may issue all or part of its new shares at the market value, and the
issuance price shall be determined by the resolution adopted at the meeting of
the Board.
ARTICLE 12. ALTERATION OF ENTRY
(1) The Company shall designate a transfer agent for stock.
(2) The appointment, office, and the scope of the activities of the transfer
agent shall be
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determined by the resolution of the Board and shall be publicly notified.
(3) The Register of Shareholders or its copies shall be kept at the business
place of the transfer agent. Transfer agent shall handle the matters
pertaining to stock such as change of shareholder's name, registration or
cancellation of pledge, creation or cancellation of marks for property in
trust, issuance of stock certificates, and receipts of reports.
(4) The procedures for the duties prescribed in Paragraph 3 above shall be
subject to the provisions of the Regulation on Transfer Agency Service for
Securities.
ARTICLE 13. REGISTRATION OF PLEDGE AND INDICATION OF PROPERTY IN TRUST
A person, who intends to register pledge on or indicate property in trust
attached to the shares of the Company, shall submit the relevant stock
certificates to the transfer agent, together with the application in such form
as may be prescribed by the Company sealed and signed by such person. The same
shall apply in case of cancellation of such registration or indication.
ARTICLE 14. REISSUANCE OF SHARE CERTIFICATES
(1) Any person desiring to receive new share certificate(s) due to defacement
or damage or as a result of the partition or consolidation of the person's
share(s) shall submit an application in such form as may be prescribed by
the Company to the transfer agent together with the share certificate(s).
(2) In case the share certificate(s) is lost, the application in such form as
may be prescribed by the Company for the new certificate(s) must be
submitted to the transfer agent together with an original or copy of the
judgment of nullification thereof.
ARTICLE 15. CLOSING OF SHAREHOLDERS' REGISTER AND RECORD DATE
(1) Each year for a period of 60 days from the day immediately following the
last day of a fiscal year, the Company shall suspend any entry in the
Shareholders' Register of any alteration in the shareholder's name,
registration or de-registration of pledges, or recordation or
de-recordation of trust shares.
(2) The Company shall allow the shareholders who are recorded as shareholders
in the Shareholders' Register as of the last day of each fiscal year to
exercise their rights pertaining to the shares at the Ordinary General
Meeting of Shareholders for such fiscal year.
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(3) In the event that an Extraordinary General Meeting of Shareholders is
convened, or if otherwise necessary, the Company may suspend, with two (2)
weeks' prior notice, entries of alterations in the Shareholders' Register
for a certain period not exceeding one (1) month by a Board resolution or
deem the shareholders whose names appear in the Shareholders' Register as
of the date set by a Board resolution (the "record date") to be the
shareholders entitled to exercise the rights pertaining to the shares;
provided, however, that, if the Board deems it necessary, the Company may
suspend any entry in the Shareholders' Register including entries involving
a change in a shareholder's name, and adopt the record date at the same
time.
ARTICLE 16. REPORTING OF ADDRESSES, NAMES AND SEALS OR SIGNATURES OF
SHAREHOLDERS
(1) Shareholders and registered pledgees shall submit to the transfer agent
(Article 12) of their names, addresses, and seals or signature.
(2) Shareholders and registered pledgees who reside in foreign countries shall
appoint their agents and notify the Company and transfer agent of their
agents and the places in Korea to which notices should be sent.
(3) The same requirement shall apply in the event of any changes in matters
referred to in Paragraphs 1 and 2 above.
(4) The Company shall not be held responsible for any loss or damage to the
shareholders and pledgees when such loss or damage is caused by their fault
or negligence in complying with the provisions of this Article 16.
CHAPTER III. BONDS
ARTICLE 17. ISSUANCE OF CONVERTIBLE BONDS
(1) The Company may issue convertible bonds in the aggregate face amount not
exceeding ten billion (25,000,000,000) Won to persons other than the
shareholders by a resolution of the Board, in any case of the following:
(i) Where the Company issues convertible bonds by way of a public
offering;
(ii) Where the Company issues convertible bonds to foreigners for business
necessity of the Company in accordance with the Foreign Investment
Promotion Act;
(iii) Where the Company issues convertible bonds to its allied companies
for the purpose of introducing technology;
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(iv) Where the Company issues convertible bonds to the domestic and/or
foreign financial institutions in order to finance the Company in the
emergent cases;
(v) Where the Company issues convertible bonds pursuant to the acquisition
of another corporation or entity by the Company by consolidation,
merger, purchase of assets or businesses, or other reorganization
approved in accordance with Section 6.4(b) of the First Amended and
Restated Preferred Stock Investors Rights Agreement; or
(vi) Where the Company issues convertible bonds in the aggregate face
amount not exceeding 25,000,000,000 Won to (i) employees, officers,
directors, contractors, advisors or consultants of the Company or a
legal entity of which the Company has at least 50% of shares or equity
holdings, or (ii) a legal entity, a partnership or an entity for the
benefit of such employees, officers, directors, contractors, advisors
or consultants of the Company or a legal entity of which the Company
has at least 50% of shares or equity holdings pursuant to incentive
agreements or incentive plans approved by the Board or the
shareholders, as the case may be.
(2) Notwithstanding Paragraph 1 of this Article 17, Participation Rights
Holders shall have the right of participation to purchase its Pro Rata
Share of all (or any part) of the convertible bonds the Company issues,
except the convertible bonds issued pursuant to Subparagraphs (v) and (vi)
of Paragraph (1) of this Article 17.
(3) Convertible bonds mentioned in Paragraph (1) of this Article 17 may, by
resolution of the Board, be issued with their conversion rights limited to
a certain portion of the issue price.
(4) The shares to be issued upon conversion shall be common shares. The
conversion price, which shall not be less than the par value of the shares,
shall be determined by resolution of the Board at the time of issuance of
the convertible bonds.
(5) The provisions of Article 10-3 shall apply mutatis mutandis to the payment
of dividends on the shares issued upon conversion and the payment of
interest on the convertible bonds.
(6) Notwithstanding any contrary provisions, in the case that an approval by
the shareholders is required under the Nasdaq regulations for the issuance
of convertible bonds, the Company shall issue convertible bonds by a
resolution adopted at the General Meeting of Shareholders.
ARTICLE 18. ISSUANCE OF BONDS WITH WARRANTS
(1) The Company may issue bonds with warrants in the aggregate face amount not
exceeding ten billion (10,000,000,000) Won to persons other than the
shareholders by a resolution of the Board, in any of the following events:
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(i) Where the Company issues bonds with warrants by way of a public
offering;
(ii) Where the Company issues bonds with warrants to foreigners for
business necessity of the Company in accordance with the Foreign
Investment Promotion Act;
(iii) Where the Company issues bonds with warrants to its allied companies
for the purpose of introducing technology;
(iv) Where the Company issues bonds with warrants to the domestic and/or
foreign financial institutions in order to finance the Company in the
emergent cases; or
(v) Where the Company issues bonds with warrants pursuant to the
acquisition of another corporation or entity by the Company by
consolidation, merger, purchase of assets or businesses, or other
reorganization approved in accordance with Section 6.4(b) of the
First Amended and Restated Preferred Stock Investors Rights
Agreement.
(2) Notwithstanding Paragraph 1 of this Article 18, Participation Rights
Holders shall have the right of participation to purchase its Pro Rata
Share of all (or any part) of the bonds with warrants the Company issues,
except the bonds with warrants issued pursuant to Subparagraph (v) of
Paragraph (1) of this Article 18.
(3) The amount of new shares which can be subscribed for by the holders of the
bonds with warrants shall be determined by the Board; provided, however,
that the aggregate par value of such new shares shall not exceed the
aggregate face value of the bonds with warrants.
(4) The shares to be issued upon exercise of warrants shall be common shares.
The exercise price, which shall not be less than the par value of the
shares, shall be determined by resolution of the Board at the time of
issuance of the bonds with warrants.
(5) The provisions of Article 10-3 shall apply mutatis mutandis to the payment
of dividends on the shares issued upon exercise of warrants and the payment
of interest on the bonds with warrants.
(6) Notwithstanding any contrary provisions, in the case that an approval by
the shareholders is required under the Nasdaq regulations for the issuance
of bonds with warrants, the Company shall issue bonds with warrants by a
resolution adopted at the General Meeting of Shareholders.
CHAPTER IV. GENERAL MEETING OF SHAREHOLDERS
ARTICLE 19. TYPES OF GENERAL MEETINGS OF SHAREHOLDERS
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(1) The shareholders meetings of the Company shall be in two types: (i)
Ordinary General Meeting of Shareholders; and (ii) Extraordinary General
Meeting of Shareholders.
(2) The Ordinary General Meeting of Shareholders shall be held within three (3)
months after the end of each fiscal year and the Extraordinary General
Meeting of Shareholders may be convened whenever deemed necessary.
ARTICLE 20. CONVENING OF GENERAL MEETINGS OF SHAREHOLDERS
(1) The General Meeting of Shareholders shall be convened by the Representative
Director in accordance with the resolution of the Board unless otherwise
provided by laws.
(2) In the event that the Representative Director is unable to perform his/her
duty, the provisions of Paragraph (3)C of Article 35 shall be applied
mutatis mutandis.
ARTICLE 21. NOTICE OF CONVENING OF MEETING AND PUBLIC NOTICE
When convening a shareholders meeting, each shareholder having voting right
shall be notified of the date, place, and agenda of the meeting in writing or
electronic mail two weeks prior to the date of the meeting.
ARTICLE 22. PLACE OF MEETING
The General Meetings of Shareholders shall be convened at the head office or at
a nearby location, if necessary.
ARTICLE 23. CHAIRMAN
The Representative Director shall act as Chairman at a General Meeting of
Shareholders of the Company. If the Representative Director can not act as
Chairman, the provisions of Paragraph (3)C of Article 35 shall be applied
mutatis mutandis.
ARTICLE 24. MAINTENANCE OF ORDER BY CHAIRMAN
(1) The Chairman at a General Meeting of Shareholders may order a person, who
intentionally speaks or acts to prevent deliberations of the meeting or who
disturbs public order of the meeting, to stop or retract his/her speech or
to leave the place of the meeting, and such person shall comply with the
Chairman's order.
(2) The Chairman at a General Meeting of Shareholders may limit the time and
number of shareholders' speeches when it is necessary for the smooth
deliberations of the meeting.
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ARTICLE 25. VOTING
Each holder of a share that has a voting right shall have one (1) vote per each
share.
ARTICLE 26. VOTING BY PROXY
(1) A shareholder may exercise his/her voting rights by proxy.
(2) The holder of a proxy referred to in the above Paragraph 1 shall submit a
certificate evidencing his/her power of representation (a power of
attorney) before the convening of the General Meeting of Shareholders.
ARTICLE 27. METHOD OF RESOLUTION
(1) A General Meeting of Shareholders shall be duly convened with a quorum of
not less than one-third (1/3) of total number of issued and outstanding
shares with voting rights.
(2) All resolutions of the General Meeting of Shareholders, except as otherwise
provided by the relevant laws, shall be adopted if the approval of a
majority vote of the shareholders present at such meeting is obtained and
such majority also represents at least one-third (1/3) of the total issued
and outstanding voting shares.
ARTICLE 28. MINUTES OF MEETING
(1) The substance of proceedings at a General Meeting of Shareholders and the
results thereof shall be recorded in the minutes of the meeting, which
shall bear the names and the seals or signatures of the Chairman and
Directors present at the meeting.
(2) The Company shall translate the minutes of the shareholders meetings from
Korean into English. The Korean version of the minutes shall prevail in the
event of any inconsistencies between the Korean and English versions.
CHAPTER V. BOARD OF DIRECTORS
ARTICLE 29. NUMBER OF DIRECTORS
The number of Directors of the Company constituting the entire Board shall not
be less than five (5) or greater than nine (9).
ARTICLE 30. ELECTION OF DIRECTORS
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(1) The Directors shall be elected at the General Meeting of Shareholders.
(2) The Directors shall be elected at a General Meeting of Shareholders by the
affirmative vote of shareholders representing at least a majority of the
voting shares present at the meeting and at least one-fourth (1/4) of the
total number of voting shares issued and outstanding.
(3) The Directors may be standing Directors or non-standing Directors.
ARTICLE 31. [INTENTIONALLY LEFT BLANK]
ARTICLE 32. TERM OF OFFICE OF DIRECTORS
The term of office of a Director including the Representative Director shall be
three (3) years; provided, however, that, if the term of office expires after
the end of a fiscal year but before the Ordinary General Meeting of Shareholders
convened with respect to such fiscal year, the term of office shall be extended
into the close of such General Meeting of Shareholders.
ARTICLE 33. [INTENTIONALLY LEFT BLANK]
ARTICLE 34. VACANCIES IN OFFICES OF DIRECTORS AND BY-ELECTION
(1) In the event that any Director falls into any of the following, the offices
of such Director shall be deemed vacant:
(i) Where a Director deceases;
(ii) Where a Director is declared bankrupt;
(iii) Where a Director is adjudged incompetent or quasi-incompetent; or
(iv) Where a Director is punished by imprisonment.
(2) In the event of any vacancy in the office of Director during a term of
office, a substitute Director shall be elected at the Extraordinary General
Meeting of Shareholders.
ARTICLE 35. DUTIES OF DIRECTORS
(1) The Company shall elect one Representative Director among the Directors by
a resolution of the Board. Such Representative Director shall represent the
Company and shall execute general matters of the Company.
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(2) The directors shall assist the Representative Director, and shall perform
their respective duties as determined by the Board.
(3) In the absence of Representative Director, the next person in the order of
priority, as determined in advance by the Board, shall perform the duties
of the Representative Director in lieu of the absent Representative
Director.
ARTICLE 36. [INTENTIONALLY LEFT BLANK]
ARTICLE 37. REMUNERATION AND RETIREMENT ALLOWANCE FOR DIRECTORS
(1) The remuneration to be paid to Directors shall be determined by a
resolution adopted at the General Meeting of Shareholders.
(2) Retirement Allowance to be paid to the Directors shall be determined in
accordance with the Regulations on Officer and Director Remuneration which
have been approved at the General Meeting of Shareholders.
ARTICLE 38. COMPOSITION OF THE BOARD OF DIRECTORS
(1) The Board shall consist of Directors and shall resolve all important
matters relating to the affairs of the Company. Regarding the Chairman of
the Board, Article 23 shall be applied mutatis mutandis.
(2) The Company may appoint observers (the "Observers"). The Observers shall be
entitled to attend the meetings of the Board and the committees thereof in
a non-voting, observer capacity.
(3) The committee for recommendation of candidates for directors and the
compensation committee shall be established as committees within the Board
for the purpose of handling matters delegated by the Board, and matters
related to the organization and operation thereof shall be determined by
the Board.
ARTICLE 39. CONVENING OF MEETING OF THE BOARD OF DIRECTORS
(1) Meetings of the Board shall be convened at least once in any quarter.
(2) A meeting of the Board may be called either by (i) the Representative
Director designated by the Board of Directors, (ii) any Director if such
Director is authorized to call such meeting by the Board of Directors or
(iii) a group of any three Directors concludes that a meeting is required.
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(3) Notice of a meeting of the Board shall be dispatched to each Director with
a written agenda at least seven (7) days prior to the date set for the
meeting.
(4) Such procedure in the above Paragraph 3 may be omitted or shortened with
the consent of all Directors.
ARTICLE 40. METHOD OF RESOLUTION OF THE BOARD OF THE DIRECTORS
(1) A resolution of the Board shall be adopted by the presence of a majority of
the directors in offices and by the affirmative votes of a majority of the
directors present at the meeting.
(2) A Director having a special interest with respect to the resolution of the
Board shall not exercise his/her voting right.
(3) The Board may allow all or part of the directors to participate in
resolutions by the videoconferencing method where every one is able to
transmit and receive images and voices at the same time, without having to
present at meetings. A director who participates in the meeting by
videoconferencing shall be deemed as to be present at the meeting.
(4) Meetings of the Board shall be held in English.
ARTICLE 41. MINUTES OF MEETINGS OF BOARD OF DIRECTORS
(1) The agenda, results of the meeting of the Board, the names of any
dissenters and reasons for their dissention shall be recorded in the
minutes of the meeting, and the Directors present at the meeting shall
write their names and affix their seals or execute such minutes.
(2) The Company shall translate the minutes of the meeting of the Board from
Korean into English. The Korean version of the minutes shall prevail in the
event of any inconsistencies between the Korean and English versions.
CHAPTER VI. AUDIT COMMITTEE
ARTICLE 41-2. CONSTITUTION OF THE AUDIT COMMITTEE
(1) The Company shall have an Audit Committee in lieu of a Statutory Auditor
pursuant to Article 415-2 of the Commercial Code.
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(2) The Audit Committee shall consist of three (3) or more Directors.
(3) Persons who fall under each of the items in Paragraph (2) of Article 415-2
of the Commercial Code shall not constitute more than one-third (1/3) of
the members of the Audit Committee.
(4) The Board may appoint or dismiss a member of the Audit Committee; provided,
that a resolution of dismissal shall be adopted by the affirmative votes of
at least two-thirds (2/3) of the directors in office.
(5) The representative of the Audit Committee shall be elected by the Audit
Committee.
ARTICLE 41-3. DUTIES OF THE AUDIT COMMITTEE
(1) The Audit Committee shall examine accounting and operation of the Company.
(2) The Audit Committee may request to convene an Extraordinary General Meeting
of Shareholders by submitting a written request to the Board specifying the
agenda of the meeting and the reason for the meeting.
(3) The Audit Committee may request subsidiaries of the Company to report their
business operations as is deemed necessary. In such case, if the subsidiary
fails to make an immediate report, or it is required to confirm the
contents of such report, the Audit Committee may investigate the business
and conditions of assets of the subsidiary.
(4) The Audit Committee shall treat matters delegated by the Board in addition
to those described in Paragraphs (1) through (3) above.
ARTICLE 41-4. REGULATIONS OF THE AUDIT COMMITTEE
In addition to matters specified herein, matters concerning the Audit Committee,
including the constitution and scope of the specific duties of the Audit
Committee, may be defined in the form of regulations of the Audit Committee by
the Board.
ARTICLE 41-5. RECORDS OF THE AUDIT COMMITTEE
The Audit Committee shall record the substance and results of its audit in the
records of the Audit Committee, on which the name and seal of the member(s) of
the Audit Committee who has performed such audit shall be affixed or shall be
signed by such member(s) of the Audit Committee.
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CHAPTER VII. ACCOUNTING
ARTICLE 42. FISCAL YEAR
The fiscal year of the Company shall commence on January 1 and end on December
31 of each year.
ARTICLE 43. PREPARATION AND KEEPING OF FINANCIAL STATEMENTS AND BUSINESS REPORTS
(1) The Representative Director of the Company shall prepare the following
documents, the supplementary documents thereof and the business report at
least six (6) weeks before the date of the Ordinary General Meeting of
Shareholders, shall receive an approval of the Board and an audit thereof
by the Audit Committee, and shall submit the following documents and the
business report to the Ordinary General Meeting of Shareholders:
(i) Balance Sheets;
(ii) Statements of Profit and Loss; and
(iii) Statements of Appropriation of Retained Earnings or Deficit.
(2) The Representative Director shall keep the documents described in Paragraph
(1) above and the supplementary documents thereof together with the
business report and the audit report, at the head office of the Company for
five (5) years and copies of all of such documents at the branches of the
Company for three (3) years, beginning from one (1) week before the day of
the Ordinary General Meeting of Shareholders.
(3) Immediately after the document referred to in Paragraph (1) above have been
approved at the General Meeting of Shareholders, the Representative
Director shall give public notice of the balance sheets.
ARTICLE 44. APPOINTMENT OF EXTERNAL AUDITORS
With respect to appointing external auditors, the Company shall obtain approval
of the Audit Committee pursuant to the provisions of the Act on External Audit
of Stock Companies and shall report appointment of external auditors at the
first ordinary shareholders' meeting after appointment.
ARTICLE 45. DISPOSITION OF PROFITS
The Company shall dispose of the unappropriated retained earnings as of the end
of each fiscal year as follows:
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(i) earned surplus reserves (required to be one-tenth or more of cash
dividends paid for the pertinent fiscal year);
(ii) other statutory reserves;
(iii) dividends;
(iv) discretionary reserves;
(v) other appropriations of earned surplus; and
(vi) retained earnings carried forward to next fiscal year.
ARTICLE 46. DIVIDEND
(1) Dividends of profits may be paid to the shareholders in either cash or
shares.
(2) Dividends mentioned in Paragraph (1) above shall be paid to the
shareholders or registered pledgees in the Shareholders' Register of the
Company as of the last day of each fiscal year.
(3) The right to claim for dividends shall expire if such right is not
exercised for five (5) consecutive years. Any dividends that have not been
claimed for five (5) consecutive years shall belong to and be retained by
the Company.
CHAPTER VIII. SUPPLEMENTARY PROVISIONS
ARTICLE 47. FIRST FISCAL YEAR
The first fiscal year of the Company shall be from the date of incorporation to
December 31 of the same year.
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