EXHIBIT 3.1
ARTICLES OF INCORPORATION
GRAVITY CO., LTD.
CHAPTER 1 - GENERAL PROVISIONS
ARTICLE 1. COMPANY NAME
The name of this Company is GRAVITY Co., Ltd. (hereinafter referred to as the
"Company").
ARTICLE 2. PURPOSE
The objectives of the Company are to engage in the following businesses:
1. Software consulting, development, and supply
2. Development and sales of Software and CD
3. Information-technology-related software development
4. Production, development, distribution, sales, and consulting
of digital content, including game software, as well as
corresponding licensing
5. Online network game services
6. Applied package-related software development
7. Production and sales of computer programs
8. Import and export of software
9. E-commerce
10. Character development business
11. Animation business
12. Real estate leasing
13. Service-area restaurant business
14. Media-related business
15. Printing and publication
16. Record and video production and distribution
17. Any other businesses incidental to the above businesses
ARTICLE 3. LOCATION OF HEAD OFFICE AND ESTABLISHMENT OF BRANCHES
1. The Company's head office shall be located in Seoul, Korea.
2. When deemed necessary and through a resolution of its Board of
Directors, the Company may establish domestic and overseas
branches, liaison offices, operational offices and
subsidiaries.
ARTICLE 4. METHOD OF PUBLIC ANNOUNCEMENTS
Company-related public announcements shall be made through the Seoul Economic
Daily, which is published and distributed in Seoul.
CHAPTER 2 - STOCKS
ARTICLE 5. TOTAL NUMBER OF SHARES TO BE ISSUED
The total number of shares to be issued by the Company shall be 40,000,000
shares.
ARTICLE 6. PAR VALUE PER SHARE
The par value of a share shall be KRW 500.
ARTICLE 7. TYPES OF SHARES
All shares to be issued by the Company shall be common stock and preferred
stock, both of which shall be in registered form.
ARTICLE 8. TOTAL NUMBER OF SHARES AT THE TIME OF INCORPORATION
The total number of shares to be issued at the incorporation of the Company
shall be 100,000 shares.
ARTICLE 8-2. NUMBER AND DETAILS OF PREFERRED STOCK
1. The preferred stocks to be issued by the Company shall have no
voting rights, and the total number of preferred stocks shall
be 2,000,000 shares.
2. The dividend rate on each preferred stock, which the Board of
Directors decides upon issuing, shall be based on its
preferred dividend rate ranging from 1% to 15% per annum of
the par value.
3. In case the dividend rate of the common stock exceeds that of
the preferred stock, the difference shall be divided among the
common shares and preferred shares on a pro rata basis.
4. In case the prescribed dividends are not paid in favor of the
preferred stock for a certain fiscal year, such accumulated
non-paid dividends shall be paid on a priority basis during
the next fiscal year.
5. The preferred stocks shall be deemed to have voting rights
from the General Meeting of Shareholders immediately following
the General Meeting of Shareholders after the meeting where a
resolution not to pay the prescribed dividends on the
preferred stock was adopted and until the closing of the
General Meeting of Shareholders where a resolution to pay the
preferred dividends is adopted.
6. In case the Company increases its capital by right issue or
bonus issue, new shares for the preferred stocks shall be
allotted with the common stock in the case of right issue, and
the stocks of the same kind in case of bonus issue.
7. The preferred stocks shall survive three years since issuance.
Upon expiration, such preferred stocks shall be converted into
common stocks. However, in case prescribed dividends are not
paid for such period, the preferred stocks shall be extended
until the payment of prescribed dividends is completed. In
such term, the provision of Article 12 herein shall apply
mutatis mutandis to the payment of dividends on shares to be
issued due to a conversion.
ARTICLE 9. TYPES OF SHARE CERTIFICATES
1. Share certificates for shares to be issued by the Company
shall be in a registered form.
2. The share certificates of the Company shall be issued in the
following eight (8) denominations: one (1), five (5), ten
(10), fifty (50), one hundred (100), five hundred (500), one
thousand (1,000) and ten thousand (10,000) shares.
ARTICLE 10. PREEMPTIVE RIGHTS
1. The shareholders of the Company, upon issuance of new shares,
shall be entitled to receive new shares in proportion to the
number of shares held by each shareholder.
2. Notwithstanding Article 10.1 above, the Company may allocate
new shares to persons other than shareholders pursuant to a
resolution of the Board of Directors in each of the following
cases:
1. Where new shares are issued by a public offering to
the extent of not more than fifty-hundredth (50/100)
of the total number of issued and outstanding shares;
2. Where new shares are preferentially allocated to a
member of Employee Stock Ownership Association;
3. Where new shares are issued by the exercise of stock
options;
4. Where new shares represented by depositary receipts
("DR"s) are issued to the extent of not more than
fifty-hundredth (50/100) of the total number of
issued and outstanding shares;
5. Where new shares are issued for the purpose of
soliciting foreign investment under the Foreign
Investment Promotion Law, as deemed necessary for the
management of the Company to the extent of not more
than fifty-hundredth (50/100) of the total number of
issued and outstanding shares;
6. Where new shares are issued to domestic and overseas
financial institutions, corporations, and individuals
in order to urgently raise funds;
7. Where new shares are issued to certain companies
under an alliance arrangement to introduce
technologies; and
8. Where new shares are offered or underwritten by any
underwriter for offering for the purpose of listing
on the exchange or registration with the association,
of shares to the extent of not more than
fifty-hundredth (50/100) of the total number of
issued and outstanding shares following a capital
increase.
3. In case new shares are issued pursuant to Paragraphs 2-1, 2-2,
2-4 through 2-8 above, the types, quantity and issue price of
shares to be issued shall be determined by a resolution of the
Board of Directors.
4. In case shareholders waive or lose their preemptive rights, or
fractional shares occur in connection with allocation of new
shares, any matter thereof shall be determined by a resolution
of the Board of Directors.
ARTICLE 11. STOCK OPTIONS
1. The Company may grant its directors and employees stock
options of not more than fifty-hundredth (50/100) of the total
issued and outstanding shares pursuant to Article 16-3
Paragraph (1) of the Act on Special Measures for the Promotion
of Venture Businesses and Article 11-3 of Presidential Decree
of the Act, upon a special resolution in the General Meeting
of Shareholders. In such case, stock options to be granted by
a resolution of the General Meeting of Shareholders may be
linked to business performance objectives or related market
indices.
2. The officers and employees who may be granted stock options
are such persons who have contributed, or have the ability to
contribute to the incorporation, management, overseas sales or
technological innovation of the Company pursuant to Article
16-3, Paragraph (1), each Item of the Act on Special Measures
for the Promotion of Venture Businesses and Article 11-3,
Paragraph (4) and (5) of Presidential Decree of the Act;
provided, that those who fall under any of the following may
not be granted stock options:
1. The largest shareholder (as defined in Article 54-5,
Paragraph (4), Item 2 of the Securities and Exchange
Act ("SEA"), hereinafter the same shall apply) and
its specially related persons (as defined in Article
10-3, Paragraph (2) of the Presidential Decree of
SEA, hereinafter the same shall apply), except for
such persons who have been regarded as specially
related persons by becoming an officer of the Company
(including an officer of the affiliate as defined in
Article 84-6, Paragraph (1) of the Presidential
Decree of SEA) (for this purpose, an officer who is a
non-standing officer of an affiliate shall not be
deemed as a specially related person of the Largest
Shareholder);
2. Major shareholders (as defined in Article 188 of the
SEA, hereinafter the same shall apply) and their
specially related persons; except for such persons
who have been regarded as specially related persons
by becoming an officer of the Company (including an
officer who is a non-standing officer of an
affiliate); and
3. Any person who becomes a major shareholder by
exercising a stock option.
3. The new shares to be issued upon the exercise of a stock
option (or in the case where the Company pays, in either cash
or its own shares, the difference between the exercise price
of stock options and the market price of the shares, it shall
mean the shares which are the basis for such calculation)
shall be common stocks in registered form.
4. The number of officers and employees of the Company who are
granted stock options shall not exceed ninety-hundredth
(90/100) of the total number of officers and employees in
office. Stock options granted to one officer or employee shall
not exceed one-hundredth (1/100) of the total number of issued
and outstanding shares.
5. The exercise price per share which is subject to the exercise
of the stock option shall be more than each of the following
values (which shall apply to the case where the exercise price
is adjusted after the granting of stock options.):
1. The higher of the following when shares are newly
issued and delivered:
A. The market price of the shares concerned
assessed by applying Article 63 of the
Inheritance Tax and Gift Tax Act, on a basis
of the date of granting stock options; and
B. The par value of the shares concerned;
2. For cases other than 1 above, the market price of
related shares that is assessed pursuant to 1. A.
above.
6. The stock options may be exercised within five (5) years from
the date on which two (2) years have passed from the date of
resolution set forth Paragraph (1) above.
7. Stock Options may be exercisable by a person who is granted a
stock option and has been employed with the Company for two
(2) years or more from the date of the resolution set forth in
Paragraph (1) above; provided, that if the person is deceased
or retires or resigns from office due to any cause not
attributable to him/her within two (2) years from the date of
the resolution set forth in Paragraph (1) above, stock options
may be exercised during the above period.
8. With respect to the distribution of dividends for shares
issued upon the exercise of stock options, the provision of
Article 12 shall apply mutatis mutandis.
9. The Company may cancel the grant of stock options by a
resolution of the Board of Directors in any of the following
cases:
1. where the relevant officer or employee of the Company
voluntarily retires from his/her office after being
granted stock options;
2. where the relevant officer or employee of the Company
incurs substantial damage to the Company due to
his/her willful misconduct or negligence;
3. where the stock options may not be exercised due to
the Company's bankruptcy or dissolution; or
4. where any cause for cancellation set forth in the
stock option agreement occurs.
ARTICLE 12. BASE DATE OF CALCULATING DIVIDEND PAYMENT FOR NEW SHARES
If the Company issues new shares by right issue, bonus issue or stock dividend,
with respect to the dividends on the new shares, the new shares shall be deemed
to have been issued at the end of the fiscal year immediately preceding the
fiscal year during which such new shares are issued.
ARTICLE 13. RETIREMENT OF SHARES
1. The Company may purchase and then retire its own shares by a
special resolution of the annual General Meeting of
Shareholders pursuant to Article 434 of the Commercial Code.
2. In the General Meeting of Shareholders set forth in Paragraph
(1) above, each of the following shall be resolved:
1. The types and total number of shares to be purchased.
2. Total value of shares to be purchased; provided, that
the total value shall not exceed the net assets shown
in the balance sheet minus each amount set forth in
Article 462, Paragraph 1, each Item of the Commercial
Code.
3. The period of purchasing shares (which shall not be
determined after closing of the General Meeting of
Shareholders in respect of the initial fiscal year
following the resolution under Paragraph (1) above)
3. Deleted
4. The Company shall not purchase shares under Paragraph (1)
above if the net assets of the balance sheet for the relevant
fiscal year threaten not to reach the sum of each amount of
Article 462, Paragraph 1, each Item of the Commercial Code.
ARTICLE 14. TRANSFER AGENT
1. The Company shall retain a transfer agent for shares by a
resolution of the Board of Directors.
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 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, and cause the transfer agent handle the
activities of making entries in the shareholders registry,
registering the creation and cancellation of pledges over
shares, indication of trust assets and cancellation thereof
with respect to shares, issuing share certificates, receiving
reports filed and other related businesses.
4. Those activities by the transfer agent described in Paragraph
(3) shall be performed in accordance with the Regulations for
Securities Agency Business of the Transfer Agent.
ARTICLE 15. REPORT OF NAME, ADDRESS AND SEAL OR SIGNATURES OF SHAREHOLDERS AND
OTHERS
1. Shareholders and registered pledgees shall report their names,
addresses, seals or
signatures and other information to the transfer agent
referred to in Article 14 herein.
2. Shareholders and registered pledgees who reside in a foreign
country shall report their appointed agents and the addresses
in Korea to whom notices are to be sent.
3. The above provisions shall also apply to changes in any item
mentioned in Paragraphs (1) and (2).
ARTICLE 16. SUSPENSION OF ALTERING ENTRY IN THE REGISTER OF SHAREHOLDERS AND
RECORD DATE
1. The Company may suspend entry of alterations in the register
of shareholders in respect of the shareholders' rights during
the period from January 1 to January 31 of each year.
2. The Company shall allow the shareholders who are registered in
the shareholders registry as of December 31 of each year to
exercise their rights at the ordinary General Meeting of
Shareholders for the relevant fiscal year.
3. In the case where an extraordinary General Meeting of
Shareholders is convened or in any other necessary cases, the
Company may suspend entry of alterations in the register of
shareholders in respect of the shareholders' rights during a
certain period not longer than three (3) 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, 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 and designate the record date at the
same time. Provided, the Company shall give a public notice in
relation thereto at least two (2) weeks in advance.
CHAPTER 3 - CORPORATE BONDS
ARTICLE 17. ISSUANCE OF CONVERTIBLE BONDS
1. In any of the following cases, the Company may issue
convertible bonds to persons other than shareholders by a
resolution of the Board of Directors to the extent that the
aggregate par value amount of the convertible bonds shall not
exceed KRW100 billion:
1. Where the Company issues convertible bonds by a
general public offering;
2. Where the Company issues convertible bonds for the
purpose of soliciting foreign investment if it is
necessary for management of the Company in accordance
with the Foreign Investment Promotion Law;
3. In case the Company issues convertible bonds to
certain companies under an alliance arrangement to
introduce technologies; and
4. In case the Company issues convertible bonds to
financial institutions in order to urgently raise
funds;
2. The convertible bonds referred to in Paragraph (1) above may
be issued by the Board of Directors with partial conversion
rights.
3. The type of stocks to be issued upon conversion shall be
common shares. The conversion price shall not be lower than
the par value of the shares as determined by the Board of
Directors at the time of issuance of the relevant convertible
bonds.
4. The period during which conversion may be requested shall be
from the date when three (3) months have elapsed after the
relevant convertible bonds are issued to the date immediately
prior to the redemption date of the bonds; provided, that the
period may be adjusted by a resolution of the Board of
Directors.
5. With respect to the interest on convertible bonds and the
dividends on shares to be issued upon conversion, the
provision of Article 12 shall apply mutatis mutandis.
6. The Company may determine the minimum conversion price at less
than seventy-hundredth (70/100) of the conversion price upon
granting of convertible bonds, by a special resolution of
shareholders in the general shareholders' meeting, following
the adjustment due to the decrease in the market price.
ARTICLE 18. ISSUANCE OF BONDS WITH WARRANT
1. In any of the following cases, the Company may issue bonds
with warrants to persons other than shareholders by a
resolution of the Board of Directors to the extent that the
aggregate par value amount of the bonds shall not exceed KRW
100 billion:
1. where the Company issues bonds with warrants by a
general public offering;
2. where the Company issues bonds with warrant for the
purpose of soliciting foreign investment if it is
necessary for management of the Company in accordance
with the Foreign Investment Promotion Law;
3. where the Company issues bonds with warrant to
certain companies under an alliance arrangement to
introduce technologies; and
4. where the Company issues bonds with warrant to
financial in order to urgently raise funds.
2. The aggregate price of new shares that may be subscribed for
by the holders of warrants shall be determined by the Board of
Directors, but shall not exceed the aggregate par value of the
bonds with warrants.
3. The type of stock to be issued for the exercising of rights on
bonds with warrant shall be common stock. The issue price
shall not be lower than the par value of the shares as
determined by the Board of Directors at the time of issuance
of the relevant bonds with warrants.
4. The period during which warrants may be exercised shall be
from the date when three (3) months have elapsed after the
relevant bonds with warrants are issued to the date
immediately prior to the redemption date of the bonds.
However, the Board of Directors may, by its resolution, adjust
the exercise period for warrants within the above periods.
5. With respect to the distribution of dividends on shares to be
issued upon exercise of warrants, the provision of Article 12
shall apply mutatis mutandis.
6. The Company may determine the minimum exercise price of
warrants at less than seventy-hundredth (70/100) of the
exercise price upon granting of bonds with warrant, by a
special resolution of shareholders in the general
shareholders' meeting, following the adjustment due to the
decrease in the market price.
ARTICLE 19. APPLICABLE REGULATIONS RELATED TO THE ISSUANCE OF BONDS
The provisions of Articles 14 and 15 shall apply mutatis mutandis to the
issuance of bonds.
CHAPTER 4 - GENERAL MEETING OF SHAREHOLDERS
ARTICLE 20. CONVENING OF MEETING
1. The General Meetings of Shareholders shall be of two types --
ordinary and extraordinary general meetings.
2. The ordinary General Meetings of Shareholders shall be
convened within three (3) months after the close of each
fiscal year and the extraordinary General Meetings of
Shareholders shall be convened at any time when necessary.
ARTICLE 21. PERSON AUTHORIZED TO CONVENE MEETING
1. Except as otherwise provided by laws and regulations, the
General Meeting of Shareholders shall be convened by the
representative director (president) of the Company in
accordance with a resolution of the Board of Directors.
2. In the event that the representative director (president) is
absent or fails to serve, the provision of Article 37,
Paragraph (2) shall apply mutatis mutandis.
ARTICLE 22. NOTICE AND PUBLIC NOTICE OF CONVENING OF GENERAL MEETING
1. In convening a General Meeting of Shareholders, a 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 (2) weeks prior to the date
of the meeting.
2. Other than the notice set forth in Paragraph (1) above, the
Company may publish such matters as specified in the notice
more than once respectively in the Seoul Economic Daily and
Korea Economic Daily published in Seoul, two weeks prior to
the meeting.
ARTICLE 23. PLACE OF MEETING
The General Meetings of Shareholders shall be held at the place where the head
office of the Company is located but also may be held at a nearby place if
necessary.
ARTICLE 24. CHAIRMAN
1. The chairman of the General Meeting of Shareholders shall be
the representative director (president).
2. In the event that the representative director (president) is
absent or fails to serve, Article 37, Paragraph (2) herein
shall apply mutantis mutandis.
ARTICLE 25. CHAIRMAN'S RIGHTS TO MAINTAIN ORDER
1. The chairman of a General Meeting of Shareholders may order
persons who intentionally speak or behave obstructively or
disturb the proceedings of the meeting to stop a speech or to
leave the place of the meeting.
2. The chairman of a General Meeting of Shareholders may restrict
the duration and number of speeches of a shareholder as deemed
necessary to facilitate the proceeding.
ARTICLE 26. VOTING RIGHTS OF SHAREHOLDERS
Every Shareholder shall have one voting right per share.
ARTICLE 27. LIMITATION ON VOTING RIGHTS OF CROSS-HELD SHARES
If the Company, its parent company and subsidiary, or its subsidiary holds
shares exceeding ten percent (10%) of the total number of issued and outstanding
shares of any other company, shares of the Company held by such other company
shall not have voting rights.
ARTICLE 28. SPLIT EXERCISE OF VOTING RIGHTS
1. If a shareholder who holds two or more votes wishes to split
his/her votes, he/she shall give at least three (3) days'
prior written notice to the Company of such intention and the
reason therefor.
2. The Company may refuse to permit a shareholder to split
his/her votes except in the cases where such shareholder holds
shares in trust or shares belonging to other on their behalf.
ARTICLE 29. VOTING BY PROXY
1. A shareholder may exercise his/her vote by proxy.
2. In case of Paragraph (1) above, the proxy shall present
documents evidencing his/her power of representation (a power
of attorney) prior to the opening of the General Meeting of
Shareholders.
ARTICLE 30. QUORUMS AND ADOPTION OF RESOLUTIONS
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 present;
provided, that votes of shareholders who have a special
interest in the agenda of the meeting and therefore cannot
exercise their voting rights shall not be counted in the total
number of issued and outstanding shares with voting rights.
2. Except as otherwise provided by laws and regulations, all
resolutions of General Meetings of Shareholders shall be
adopted by the majority votes of shareholders present at the
meeting; provided, that, such votes shall represent at least
one third (1/3) of total number of issued and outstanding
shares of the Company.
ARTICLE 31. MINUTES OF THE GENERAL MEETING OF SHAREHOLDERS
The substance of the course and proceedings of a General Meeting of Shareholders
and the results thereof shall be recorded in minutes on which the names and
seals of the chairman and the directors present at the meeting shall be affixed
and shall be kept at the head office and branches of the Company.
CHAPTER 5 DIRECTORS, BOARD OF DIRECTORS, AND REPRESENTATIVE DIRECTOR
ARTICLE 32. NUMBER OF DIRECTORS
The Company shall have three (3) or more directors.
ARTICLE 33. APPOINTMENT OF DIRECTORS
1. Directors shall be elected at the General Meeting of
Shareholders.
2. A resolution for the election of directors shall be adopted by
the majority votes 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. The cumulated voting system as set forth in Article 382-2 of
the Commercial Code shall not apply to the case of election of
two (2) or more directors.
ARTICLE 34. TERM OF DIRECTORS
The term of office of the directors shall be three (3) years; provided, that if
the term of office expires after the close of the last fiscal year of such term
of office but before the ordinary General Meeting of Shareholders convened in
respect of such fiscal year, the term of office shall be extended up to the
close of such ordinary General Meeting of Shareholders.
ARTICLE 35. FILLING OF VACANCY IN THE OFFICE OF DIRECTOR
Any vacancy in the office of directors shall be filled by resolution of a
General Meeting of Shareholders; provided, however, that if the number of
directors required by Article 32 herein is fulfilled and there is no difficulty
in the administration of business, the vacancy may be left unfilled.
ARTICLE 36. APPOINTMENT OF REPRESENTATIVE DIRECTOR
The Company may elect, by resolution of the Board of Directors, representative
director (president), vice president, executive managing director, managing
director and directors.
ARTICLE 37. DUTIES OF THE REPRESENTATIVE DIRECTOR AND DIRECTORS
1. The representative director (president) shall represent the
Company and manage all affairs of the Company.
2. Vice president, executive managing director, managing director
and directors shall assist the president and shall perform
their respective responsibilities as determined by the Board
of Directors. In the event that the representative director
(president) is absent or fails to serve, they shall perform
his/her duty in the foregoing order of priority.
ARTICLE 38. DUTIES OF DIRECTORS
1. Directors shall perform their duties in good faith and in
accordance with applicable laws and regulations and provisions
hereunder.
2. Directors shall perform their duties as good managers in favor
of the Company.
3. Directors shall not reveal the trade secrets of the Company
obtained in the course of business to any third party during
and after their terms of offices.
4. Directors shall report to the audit committee information that
may cause material damage to the Company upon discovery of the
fact.
ARTICLE 39. CONSTITUTION AND CONVENING OF BOARD OF DIRECTORS
1. The Board of Directors shall consist of directors, and shall
resolve important matters relating to the execution of
businesses.
2. Meetings of the Board of Directors shall be convened by the
representative director (president) or another director
designated by the Board of Directors, if any. In convening a
meeting of the Board of Directors, a notice thereof shall be
given to each director one (1) week prior to the date of the
meeting; provided, however, that such notice may be omitted
with the consent of all directors.
3. The chairman of the Board of Directors shall be the person who
has the right to convene a meeting of the Board of Directors
in accordance with Paragraph (2) above.
4. The committee for recommendation of candidates for directors
and the compensation committee shall be established within the
Board of Directors for purpose of treatment of matters
delegated by the Board of Directors, and organization and
operation thereof shall be determined by the Board of
Directors.
ARTICLE 40. RESOLUTION OF THE BOARD OF DIRECTORS
1. Resolutions of the Board of Directors shall be adopted in the
presence of a majority of the directors and by the affirmative
vote of a majority of the directors present.
2. The Board of Directors may allow all or some of the directors
to exercise his/her and/or their voting rights by means of
telecommunication through which they may simultaneously
transmit and receive visual images and voices without
attending a meeting of the Board of Directors in person. In
such case, the concerned director(s) shall be deemed to have
attended the meeting of the Board of Directors in person.
3. No director who has a special interest in a matter for
resolution can exercise his/her vote upon such matter.
ARTICLE 41. MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS
1. The proceedings of meetings of the Board of Directors shall be
recorded in the minutes.
2. The minutes shall set forth the agenda, the course of the
proceedings and the results thereof, the opposing person(s)
and the reasons for such opposition, and all directors present
shall affix their names and seals or signatures to the
minutes.
ARTICLE 42. REMUNERATION AND SEVERANCE PAY OF DIRECTORS
1. The amount of compensation for the directors shall be
determined by a resolution of the General Meeting of
Shareholders.
2. Severance payments for directors shall be made in accordance
with the Regulations on Severance Payment for Officers as
adopted by a resolution of the General Meeting of
Shareholders.
ARTICLE 43. CONSULTANTS AND ADVISORS
The Company may have a number of consultants or advisors by a resolution of the
Board of Directors.
CHAPTER 6 - AUDIT COMMITTEE
ARTICLE 44. CONSTITUTION OF THE AUDIT COMMITTEE
1. The Company shall have an Audit Committee in lieu of an
Auditor pursuant to Article 415-2 of the Commercial Code.
2. The Audit Committee shall consist of three (3) or more
directors.
3. Persons who fall under each of items in Article 415-2,
Paragraph (2) of the Commercial Code shall not constitute over
one-third (1/3) of the Audit Committee members.
4. The Board of Directors may appoint or dismiss a member of the
Audit Committee; provided, that a resolution of dismissal
shall be adopted by the affirmative votes of more than
two-thirds (2/3) of the Board of Directors.
5. The Representative shall be elected by the Audit Committee.
ARTICLE 45. 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 a special meeting
of general shareholders by submitting a written request
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 elect, dismiss and supervise
external auditors, and have the rights to determine and pay
remunerations as well as the rights specified in applicable
laws and regulations and the regulations of the Audit
Committee.
5. The Audit Committee shall treat matters delegated by the Board
of Directors in addition to Paragraphs (1) through (4) above.
ARTICLE 46. 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, shall be defined in the form of regulations of the Audit Committee by
the Board of Directors.
ARTICLE 47. AUDIT COMMITTEE'S RECORDS
The Audit Committee shall record the substance and results of its audit in the
Audit Committee's record, on which the name and seal of the Audit Committee(s)
who has performed such audit shall be affixed or shall be signed by such Audit
Committee.
ARTICLE 48. DELETED
CHAPTER 7 - ACCOUNTING
ARTICLE 49. FISCAL YEAR
The fiscal year of the Company shall commence on January 1 and end on December
31 of each year.
ARTICLE 50. PREPARATION AND MAINTENANCE OF FINANCIAL STATEMENTS AND BUSINESS
REPORT
1. The representative director (president) of the Company shall
prepare the following documents, supplementary documents
thereto and the business report, and submit such documents to
the audit committee for audit six (6) weeks prior to the day
set for the ordinary General Meeting of Shareholders. The
representative director (president) shall submit the following
documents and the business report to the ordinary General
Meeting of Shareholders:
1. Balance sheets;
2. Profit and loss statements; and
3. Statement of appropriation of retained earnings or
statement of disposition of deficit.
2. The Audit Committee shall submit the auditors' report to the
representative director (president) within four (4) weeks from
the date of receipt of documents set forth in Paragraph (1)
above.
3. The representative director (president) shall keep on file the
documents described in Paragraph (1) above and supplementary
documents together with the business report and the auditors'
report at the head office of the Company for five (5) years
and certified copies of all of such documents at the branches
of the Company for three (3) years from one (1) week before
the day set for the ordinary General Meeting of Shareholders.
4. The representative director (president) shall submit for
approval the documents described in Paragraph (1) above to the
General Meeting of Shareholders and submit and report the
business reports to the General Meeting of Shareholders.
5. The representative director (president) shall publicly
announce the balance sheets and the external auditor's
opinion, upon approval of the documents described in Paragraph
(1) above by the shareholders in the General Meeting of
Shareholders.
ARTICLE 51. APPOINTMENT OF EXTERNAL AUDITORS
The company shall appoint the external auditors with an approval by the Auditor
Appointment Committee in accordance with the Act on External Audit of Stock
Companies and report to the General Meeting of Shareholders convened immediately
following such appointment.
ARTICLE 52. APPROPRIATION OF EARNINGS
The Company shall dispose of the unappropriated retained earnings as of the end
of each fiscal year as follows:
1. Earned surplus reserve;
2. Legal reserve;
3. Dividends;
4. Bonuses;
5. Discretionary reserve; and
6. Other appropriation of retained earnings.
ARTICLE 53. DIVIDENDS PAYMENT
1. Dividends payment may be made in cash and with stock.
2. In case the dividends are distributed in shares, if the
Company has issued several types of shares, such distribution
may be made through shares of different types by a resolution
of a General Meeting of Shareholders.
3. Dividends in Paragraph (1) above shall be paid to the
shareholders or pledgees registered in the shareholders
registry of the Company as of the end of each fiscal year.
ARTICLE 54. INTERIM DIVIDENDS
1. The Company may pay interim dividends to shareholders who are
registered in the shareholders registry as of June 30, 24:00,
pursuant to Article 462-3, Paragraph (1) of the Commercial
Code. The Interim dividends shall be paid in cash.
2. The payment of interim dividends under Paragraph (1) shall be
decided by a resolution of the Board of Directors, which
resolution shall be made within forty-five (45) days from the
date mentioned in Paragraph (1) above. The Board of Directors
may resolve to distribute interim dividends only when, as a
result of the half-yearly account, there are any retained
earnings exceeding unappropriated earnings not disposed at the
General Meeting of Shareholders for the fiscal year
immediately prior to the fiscal year concerned.
3. The maximum amount to be paid as interim dividends shall be
calculated by deducting the following amounts from the net
asset amounts recorded in the balance sheet of the fiscal year
immediately prior to the fiscal year concerned:
1. Capital of the company for the fiscal year
immediately prior to the fiscal year concerned;
2. The aggregate amount of capital reserves and legal
reserves which had been accumulated up until the
fiscal year immediately prior to the fiscal year
concerned;
3. The amount which was resolved to be distributed as
dividends at an ordinary General Meeting of
Shareholders of the fiscal year immediately prior to
the fiscal year concerned;
4. Voluntary reserves which had been accumulated for
specific purposes in accordance with the relevant
provisions of the Articles of Incorporation or by
resolution of a General Meeting of Shareholders until
the fiscal year immediately prior to the fiscal year
concerned;
5. Eared surplus reserves to be accumulated for the
fiscal year concerned as a result of the interim
dividends.
4. In case the Company has issued new shares (including those
shares issued by way of conversion of reserves into capital
stock, stock dividends, request of conversion of convertible
bonds or exercise of warrants) prior to the date set forth in
Paragraph (1) above, but after the commencement date of the
fiscal year concerned, the new shares shall be deemed to have
been issued at the end of the fiscal year immediately prior to
the fiscal year for the purpose of interim dividends.
5. In case interim dividends are distributed, the same dividend
rate as that of the common shares of the Company shall be
applied to the preferred shares under Article 8.2.
ARTICLE 55. EXPIRATION OF RIGHT TO PAYMENT OF DIVIDENDS
1. The right to demand payment of dividends shall be extinguished
by prescription if not exercised within five (5) years.
2. The dividends, of which the right has been extinguished under
Paragraph (1) above, shall be kept by the Company.
ADDENDUM
Article 1. These articles of incorporation shall take effect as of April 4,
2000.
ADDENDUM
Article 1. These articles of incorporation shall take effect as of January 17,
2002.
ADDENDUM
Article 1. These articles of incorporation shall take effect as of July 24,
2003.
ADDENDUM
Article 1. These articles of incorporation shall take effect as of December 29,
2003.
ADDENDUM
Article 1. These articles of incorporation shall take effect as of June 30,
2004.
ADDENDUM
Article 1. These articles of incorporation shall take effect as of [ ], 2004.
Representative Director: Kim Jung Ryool
Representative Director: Richard Hyonkook Kim
GRAVITY Co., Ltd.
Shingu Building, 620-2, Shinsa-dong, Gangnam-gu, Seoul