(주) 한화

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

Article 6 Par Value of Share
The par value of each share issued by the Company shall be five thousand (5,000) Korean Won.

Article 7 Classes of Shares
1. Shares to be issued by the Company shall be common shares and classes of shares different from a common class of shares, both in registered form.
2. Classes of shares different from a common class of shares to be issued by the Company shall be preferred shares, shares without voting rights, redeemable shares, convertible shares, and shares combining all or some of the foregoing.

Article 7-2 Preferred Shares with Dividend Priority
1. The Company may issue participating or non-participating preferred shares with dividend priority, cumulative or non-cumulative preferred shares with dividend priority, independently or in combination of various forms within the limit of one half (1/2) of the total number of shares issued and outstanding, by resolution of the Board of Directors.
2. The preferred shares with dividend priority shall be preferentially paid dividend in cash or in kind at the preferred dividend rate, as determined by the Board of Directors at the time of issuing the preferred shares with dividend priority, in consideration of the dividend rate, interest rate, market conditions and all other circumstances related to the issuance of the preferred shares, based on the face value.
3. When the Company increases capital with or without consideration, (i) in the case of capital increase with consideration, allotment of new shares may be made to the preferred shares with dividend priority by the same class of shares or by another class of shares by resolution of the Board of Directors, and (ii) in the case of capital increase without consideration, by the same class of shares.
4. Duration of the preferred shares with dividend priority may be determined under the resolution of the Board of Directors at the time of issuance of the relevant shares, and the preferred shares with dividend priority shall be converted into common shares upon the expiration of duration. However, if the Company does not pay the prescribed dividend to the preferred shares with dividend priority during the above period, the duration may be extended until the prescribed dividend is fully paid by resolution of the Board of Directors.

Article 7-3 Shares Without Voting Rights
1. The Company may issue shares without voting rights under the resolution of the Board of Directors to the extent permitted by relevant laws and regulations within the limit of one half (1/2) of the total number of shares issued and outstanding.
2. If the Company issues the preferred shares with dividend priority as shares without voting rights specified in paragraph 1 above, and the General Meeting of Shareholders adopts a resolution not to pay a prescribed dividend on the preferred shares with dividend priority, the Board of Directors may grant voting rights to the preferred shares with dividend priority for the period from the General Meeting of Shareholders immediately following the General Meeting of Shareholders at which such resolution was adopted until the last day of the General Meeting of Shareholders at which a resolution to pay preferential dividend is adopted.

Article 7-4 Convertible Shares
1. The Company may, by the resolution of the Board of Directors, issue convertible shares; provided, however, that the number of convertible shares that can be issued is limited to one half (1/2) of the total number of shares issued and outstanding.
2. Total issuing price of shares to be issued by conversion shall be the total issuing price of shares before conversion.
3. The Company may, by the resolution of the Board of Directors, issue convertible shares (i) which will be converted upon the expiration of duration, (ii) those which will be converted at the option of the Company, (iii) those which will be converted upon the request of shareholders, and (iv) those combining these shares, in part or in whole.
4. In the following cases, the Company may issue convertible shares which may be converted at the option of the Company:
(1) In case the financial position of the Company needs improvement;
(2) In case of managerial requisites of the Company, by a resolution of the Board of Directors, in consideration of all circumstances related to the issuance of the convertible shares.
5. Convertible shares that may be converted upon the request of shareholders may be issued based on reasons determined by the Board of Directors at the time of issuance, in consideration of all circumstances related to the issuance of convertible shares.
6. The shares to be issued by conversion shall be common shares or other classes of shares, as determined by the resolution of the Board of Directors at the time of issuance of the convertible shares.
7. The number of shares to be issued by conversion shall be determined by the resolution of the Board of Directors at the time of issuance of the convertible shares.
8. The period that a conversion may be exercised, or a conversion request be made, shall be determined by the resolution of the Board of Directors at the time of issuance of the convertible shares, within the scope of thirty (30) years from the date of issuance.

Article 7-5 Redeemable Shares
1. The Company may, by the resolution of the Board of Directors, issue redeemable shares which may be redeemed upon the request of shareholders or the option of the Company; provided, however, that the number of redeemable shares that can be issued is limited to one half (1/2) of the total number of shares issued and outstanding.
2. The redemption price of the redeemable shares shall be calculated by the sum of the issue price and premium (if any), and the premium amount shall be determined by the Board of Directors at the time of issuing the redeemable shares in consideration of the dividend rate, interest rate, market conditions, and all other circumstances related to the issuance of the redeemable shares; provided, however, if the Company issues redeemable shares whose redemption price may be adjusted, the Board of Directors shall determine, at the time of issuance of such redeemable shares, that the redemption price may be subject to adjustments along with the causes for adjustment, reference date, and method of adjustment, etc.
3. The redemption period shall be determined by the Board of Directors at the time of issuance as a period within thirty (30) years from the issuance date, considering dividend rates, interest rates, market conditions, and all other circumstances relating to the issuance of the redeemable shares.
4. In the event of redemption at the option of the Company, the redeemable shares may be redeemed on a lump sum basis or in installments; provided, however, that in the case of a redemption in installments, the Company may set the stocks to be redeemed by drawings or on a prorated basis, and any fractional shares arising from such proration shall not be redeemed.
5. In the event of redemption at the option of the Company, the Company shall notify or give a public notice of this redemption to the shareholders holding the shares and the right holders listed on the register of shareholders two (2) weeks prior to the acquisition date of the shares to be redeemed.
6. In the event of redemption upon the request of shareholders, shareholders may request the Company to redeem all of the redeemable shares on a lump sum basis or in installments, in which case the said shareholders shall give notice to the Company, at least two (2) weeks prior to the redemption, their intention and the shares subject to be redeemed; provided, however, that if the Company does not have sufficient profit available for dividend to redeem all of the redeemable shares in a lump sum, the Company may determine shares to be redeemed by drawing or on a prorated basis, and any fractional shares arising from such proration shall not be redeemed.
7. If the Company issues redeemable shares under Article 7-4 herein as the redeemable shares which may be redeemed at the option of the Company, the priority between the shareholders’ exercise of redemption right and redemption at the option of the Company may be determined by the resolution of the Board of Directors at the time of issuance of the shares.
8. The Company may distribute marketable securities (excluding shares of a different class) or other assets in lieu of cash as consideration for the Company’s acquisition of shares.
9. In the event of capital increase with consideration, share dividend, or capital increase without consideration, new shares may not be allocated, or the dividend may not be paid to the redeemable shares, which shall be determined by the resolution of the Board of Directors at the time of issuance of the redeemable shares.

Article 9 Electronic Registration of Rights to be Indicated on Shares and Warrant Certificates
The Company shall electronically register the rights to be indicated on its share and warrant certificates on the electronic registrar of the electronic registration agency, in lieu of issuing share certificates and warrant certificates.

Article 10 Issuance and Allotment of Shares
1. When the Company issues new shares by the resolution of the Board of Directors, it shall be in accordance with the following manner.
(1) A method of granting shareholders opportunity to subscribe new shares in order to allot new shares according to the number of shares they hold;
(2) A method of granting opportunity to subscribe new shares to a specific individual (including a shareholder of the Company) in order to achieve the Company's management purposes such as introducing new technology and improving financial structure, in a manner not prescribed in subparagraph (1) above, provided that the number of such new shares does not exceed twenty hundredth (20/100) of the total number of shares issued and outstanding; or
(3) A method of granting opportunity to subscribe new shares to unspecified individuals (including shareholders of the Company) in a manner not prescribed in subparagraph (1) above and allocating new shares to the subscribers accordingly, provided that the number of such new shares does not exceed fifty hundredth (50/100) of the total number of shares issued and outstanding.
2. In cases where new shares are allocated by the manner described in paragraph 1 subparagraph (3) above, the new shares may be allocated by the resolution of the Board of Directors and corresponding to any one of the following provisions:
(1) A method of allocating new shares to unspecified individual subscribers without classifying individuals with new share subscription rights;
(2) A method of granting opportunity to subscribe new shares, including those not subscribed, to unspecified individuals, after allocating new shares to members of the Employees Share Ownership Association, pursuant to relevant law and regulations;
(3) A method of granting opportunity to subscribe new shares to unspecified individuals in cases where there are unsubscribed shares after priority opportunity for new share subscription was granted to existing shareholders; or
(4) A method of granting new share subscription opportunity to individuals corresponding to reasonable standards set forth in related laws and regulations such as demand forecast prepared by an investment trader or investment broker as an underwriter or intermediary.
3. In allocating new shares under paragraph 1 subparagraphs (2) and (3) above, the Company shall give individual notice to the shareholders or make public notice of the matters prescribed under Article 416, subparagraphs (1), (2), (2)-2, (3) and (4) of the Commercial Act, at least two (2) weeks prior to the due date for payment of the new shares; provided, however, such individual notice or public notice may be replaced by a report of material matters publicly disclosed to the Financial Services Commission and the Korea Exchange pursuant to Article 165-9 of the Financial Investment Services and Capital Markets Act.
4. In the event of issuance of new shares by any of the methods set forth in the subparagraphs of paragraph 1 above, the class and number of shares to be issued and the issue price, etc. shall be determined by the resolution of the Board of Directors.
5. When the Company allocates new shares and new shares are not subscribed or the value of new shares are not paid by the due date, such unsubscribed or unpaid shares shall be disposed of by the resolution of the Board of Directors, in accordance with the relevant laws and regulations regarding the appropriateness of the issue price and other related matters.
6. The Company shall determine the method of dealing with fractional shares resulting from the allocation of the new shares by a resolution of the Board of Directors.
7. In the event that the Company allocates new shares in accordance with subparagraph (1) of paragraph 1 above, a warrant certificate shall be issued to the shareholder.

Article 10-2 Stock Options
1. The Company may grant its officers and employees (including officers and employees of relevant companies pursuant to Article 30 of the Enforcement Decree of the Commercial Act; the same applies hereinafter) stock options by a special resolution of the General Meeting of Shareholders, to the extent of not exceeding fifteen hundredth (15/100) of the total number of shares issued and outstanding; provided, however the Company may grant stock options to a person other than a director of the Company, within the scope of one hundredth (1/00) of the number of shares issued and outstanding, by resolution of the Board of Directors. Granting a stock option under the resolution of the Board of Directors shall be approved by the first General Meeting of Shareholders convened after granting the stock option. The stock options granted by a resolution of the General Meeting of Shareholders or the Board of Directors may be linked to the performance of the Company measured by targeted managerial results or market indices.
2. Those eligible for a stock option shall be the Company’s officers or employees who contribute or have the capacity to contribute to the Company’s incorporation, management, or technological innovation, etc., but excluding any person fitting any of the following descriptions:
(1) The Company’s largest shareholder (as defined in Article 542-8 paragraph 2 subparagraph (5) of the Commercial Act; hereinafter the same) and any specially related persons (hereinafter having the meaning defined in Article 13 paragraph 4 of the Enforcement Decree of the Commercial Act) thereof; provided, however, a person who falls under a specially related person by becoming an officer of the Company or its relevant company (including an officer who is a part-time executive of an affiliated company) is excluded.
(2) The Company’s principal shareholders (as defined in Article 542-8 paragraph 2 subparagraph (6) of the Commercial Act; hereinafter the same) and any specially related persons thereof; provided, however, a person who falls under a specially related person by becoming an officer of the Company or its relevant company (including an officer who is a part-time executive of an affiliated company) is excluded; or
(3) A person who becomes a principal shareholder of the Company as a result of exercising his/her stock options.
3. The shares to be delivered as a result of the exercise of stock options (referring to the shares that are used as a basis for calculating the price difference between the exercise price of the stock purchase options and the market value of relevant shares, when such difference is settled in cash or treasury stock) shall be common shares in registered form (or classes of shares other than the common class of shares, in registered form).
4. The number of officers and employees who are eligible for stock options shall not exceed ninety hundredth (90/100) of the total number of officers and employees in office at the time of the grant. The number of shares covered by a stock option that may be granted to a single officer or employee of the Company shall not exceed one hundredth (1/100) of the total number of shares issued and outstanding.
5. The per-share price at which stock options are exercised shall not be lower than either of the following prices. Such provision shall also apply to where the relevant stock option exercising price is adjusted subsequently after the grant of stock options.
(1) If new shares are to be issued and delivered, the higher value between (i) actual market value of relevant shares as of the date such stock options are granted; or (ii) face value of relevant shares.
(2) In the case of transferring the Company’s own shares, the actual market value of relevant shares as of the date such stock options are granted.
6. The stock options may be exercised within five (5) years from the second (2nd) anniversary of the resolution date specified in paragraph 1 above.
7. The person to be granted stock option may exercise his/her right after working for the company or holding post for more than two (2) years from the date of resolution specified in paragraph (1) above; provided, however, that if he/she is deceased within two (2) years from the date of the resolution set forth in paragraph 1 above or retires or resigns from office due to causes not attributable to him/her, he/she may exercise stock options during the above period.
8. In any of the following instances, the Company may, by a resolution of the Board of Directors, cancel stock options granted:
(1) Where the officer or employee that has been granted a stock option voluntarily retires from his/her office after being granted a stock option;
(2) Where the officer or employee that has been granted a stock option causes substantial damage to the Company due to his/her willful misconduct or negligence;
(3) Where the stock option 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 10-4 Record Date of Dividend Payout
The Company shall allocate dividends equally to all shares issued (including those converted) as of the dividend record date, regardless of the date of issuance.

Article 11 Title Transfer Agent
1. The Company shall appoint a transfer agent for its shares.
2. The transfer agent, its office, and the scope of its duties shall be determined by a resolution of the Board of Directors, and a public notice shall be made in respect thereof.
3. The Company’s registry of shareholders or a copy shall be kept at the office of the transfer agent. The Company shall have the transfer agent to handle the electronic registration of shares, the management of the registry of shareholders, and other matters related to shares.
4. The procedure of dealing with such matters mentioned in paragraph 3 above shall be subject to the regulation concerning the securities transfer agency by transfer agent, etc.

Article 12 Preparation and Keeping of Registry of Shareholders
1. In the case the Company receives notification of register of holders from an electronic registration authority, the Company shall prepare and keep the registry of shareholders in which the matters notified and the date of notification are recorded.
2. The Company may, in case there is a change in the status of any shareholder (including specially related persons, etc.) holding five (5) percent or more of the Company’s equity interest or in other necessary cases, request an electronic registration authority to prepare the register of holders.
3. The Company may prepare the registry of shareholders in electronic form.

Article 13 Closing of the Registry of Shareholders and Record Date
1. The Company shall deem those shareholders whose names appear in the register of shareholders on December 31 of each year to be the shareholders entitled to exercise their rights as shareholders at the annual General Meeting of Shareholders.
2. In the case of convening an extraordinary General Meeting of Shareholders or in any other necessary cases, the Company may authorize those who are registered in the shareholders registry, as of a record date which shall be a date set by a resolution of the Board of Directors, to exercise their rights as the Company’s shareholders, and the Company shall provide public notice in relation thereof at least two (2) weeks prior to the record date.

Article 14 Issuance of Bonds
1. The Company may issue bonds by a resolution of the Board of Directors.
2. The Board of Directors may delegate to the Representative Director the issuance of bonds within a period not exceeding one (1) year, by designating the amount and types of the bonds to be issued.

Article 14-2 Issuance of Convertible Bonds
1. The Company may, by a resolution of the Board of Directors, issue convertible bonds to persons other than the Company’s shareholders, up to a total face value of four hundred billion (400,000,000,000) Korean Won, for the purpose of achieving management objectives including introduction of new technology and improvement of financial structure.
2. For convertible bonds specified in paragraph 1 above, the Board of Directors may issue the convertible bonds on the terms and conditions to grant a convertible right partially.
3. The shares to be issued by the conversion shall be determined by a resolution of the Board of Directors at the time of issuance of such bonds as common shares or the class of shares prescribed herein in the Articles of Incorporation, and applicable conversion price shall be equal to or higher than the par value per share of such shares, as determined by the Board of Directors at the time of issuance of the bonds.
4. The period in which holders of convertible bonds are entitled to make a request for conversion shall begin on the day of issuing the relevant bonds and end on the day immediately preceding the maturity date thereof; provided, however, that the conversion period may be determined by a resolution of the Board of Directors in the case bond issuance takes place within the period mentioned above.

Article 15 Issuance of Bonds with Warrants
1. The Company may issue bonds with warrants to any persons other than the Company’s shareholders by a resolution of the Board of Directors, up to a total face value of three hundred billion (300,000,000,000) Korean Won, for the purpose of achieving management objectives including introduction of new technology and improvement of financial structure.
2. Of the total aggregate par value of the bonds with warrants, the Board of Directors shall determine the amount that may be used to purchase newly issued shares at the time of issuance of the relevant bonds with warrant; provided, however, that such amount shall not exceed the aggregate par value of the bonds with warrants.
3. The shares to be issued upon exercise of the warrant shall be determined by a resolution of the Board of Directors at the time of the issuance of the relevant bonds as common shares or the class of shares prescribed herein in the Articles of Incorporation, and the applicable issue price of the shares shall not be lower than the par value of each share, as determined by a resolution of the Board of Directors at the time of issuance of the bonds.
4. The period to exercise the warrant shall be from the day of issuing the relevant bond to the day before the due date for redemption; provided, however, the period to exercise the warrant may be adjusted within the above period by a resolution of the Board of Directors at the time of the relevant bond issuance.

Article 15-2 Electronic Registration of Rights to be Indicated on Bonds and Warrant Certificates
The Company shall register the rights to be recorded on bond certificates and warrant certificates with the electronic registration ledger of the electronic registration authority, in lieu of issuing bond certificates and warrant certificates; provided, however, that except for bonds listed on the securities market that are required to be electronically registered by law, the Company may decide not to electronically register bonds.

Article 16 Applicable Provisions for Issuance of Bonds
The provisions of Article 11 shall apply mutatis mutandis with respect to the issuance of bonds.

Article 17 Time of Convening
1. The Company’s General Meetings of Shareholders shall consist of annual General Meeting of Shareholders and extraordinary General Meeting of Shareholders.
2. Annual General Meeting of Shareholders shall be convened within three (3) months after the close of each fiscal year and extraordinary General Meeting of Shareholders shall be convened at any time whenever deemed necessary.

Article 18 Authority to Convene
1. Unless otherwise provided for in the relevant laws and regulations, the General Meeting of Shareholders shall be convened by the Representative Director of the Company by a resolution of the Board of Directors
2. If the Representative Director is absent or unable to serve his/her duties, provisions of Article 34 paragraph 2 hereof shall apply mutatis mutandis.

Article 19 Notification of Convening of General Meeting
1. In convening a General Meeting of Shareholders, a notice thereof in written or electronic form, which sets forth the time, date, place, agenda of the meeting, and details of director candidates in the case election of directors is to take place, shall be sent to each shareholder at least two (2) weeks prior to the date of the meeting.
2. With respect to the shareholders holding shares of one hundredth (1/100) or less of the total number of issued and outstanding voting shares of the Company, the written or electronic notice under paragraph 1 above may be replaced by (i) publishing two (2) or more public notices in the Kyunghyang Shinmun and Maeil Business Newspaper, which are published in the Republic of Korea, or (ii) making a public notice on the Data Analysis, Retrieval, and Transfer System operated by the Financial Supervisory Service or the Korea Exchange, announcing the convening of the General Meeting of Shareholders and the purpose of the meeting two (2) weeks in advance.

Article 20 Place of Meeting and Method of Convocation
1. The General Meeting of Shareholders shall be held at the place where the Company's headquarters is located or other places adjacent thereto as deemed necessary.
2. The Company shall hold the General Meeting of Shareholders in a manner that permits certain shareholders to participate in resolutions by electronic means from remote locations without being present at the place of the meeting in person, pursuant to Article 542-14, paragraph 1 of the Commercial Act.

Article 21 Chairman
1. The Representative Director shall preside over the General Meetings of Shareholders as Chairman.
2. In the absence of the Representative Director, provisions of Article 34 paragraph 2 hereof shall apply mutatis mutandis.

Article 22 Chairman’s Authority to Maintain Order
1. The Chairman of a General Meeting of Shareholders may order the suspension of statements or removal of persons who deliberately speak or behave in a manner that disrupts the proceedings of the meeting or otherwise interferes with the proceedings.
2. The Chairman of a General Meeting of Shareholders may limit the length and frequency of statements made by shareholders whenever deemed necessary to facilitate the smooth proceeding of the meeting.

Article 23 Voting Right
Every shareholder shall have one (1) vote for each share he/she owns.

Article 24 Limitation on Voting Rights of Cross-Held Shares
Where the Company, its parent company, and its subsidiary company together, or its subsidiary company alone, holds more than one tenth (1/10) of the total number of shares issued and outstanding of a third company, then the shares of the Company held by that third company shall have no voting rights.

Article 25 Split Voting
1. If a shareholder holding two (2) or more votes wishes to split his/her votes, he/she shall notify the Company in written form of such intent and the reasons therefor, no later than three (3) days prior to the date of the General Meeting of Shareholders.
2. The Company may refuse to allow a shareholder to split his/her votes unless such shareholder holds shares in trust or on behalf of a third party.

Article 26 Voting by Proxy
1. A shareholder may exercise his/her voting right through a proxy; provided, however, that the proxy shall be limited to a shareholder.
2. The proxy under paragraph 1 above shall submit to the Company a written document or an electronic document evidencing his/her power of representation prior to the opening of the General Meeting of Shareholders.

Article 27 Method of Resolution at a General Meeting of Shareholders
Unless otherwise provided in relevant laws and regulations, all resolutions of the General Meeting of Shareholders shall be adopted by the affirmative vote of the majority of shareholders present at the meeting; provided, that, such votes shall represent no less than one fourth (1/4) of total number of issued and outstanding shares of the Company.

Article 28 Minutes of General Meeting
The summary of the proceedings of the General Meeting of Shareholders and the results thereof shall be recorded in the minutes, which shall be affixed with the name and seal impressions or signatures of the Chairman and the directors present at the meeting, and shall be kept at the head office and branches of the Company.

Article 29 Number of Directors
1. The Company shall have at least three (3) but no more than thirteen (13) directors, and the number of independent directors shall be at least three (3), forming a majority of the total number of directors.
2. If, due to reasons such as resignation or death of an independent Director, the required number under paragraph 1 is not satisfied, such requirement shall be satisfied at the first General Meeting of Shareholders convened after the occurrence of such cause.
3. The Board of Directors of the Company shall not be made up of just one gender.

Article 30 Election of Directors
1. Directors shall be elected at a General Meeting of Shareholders.
2. A resolution for the election of directors shall be passed by the affirmative vote of the majority of shareholders present; provided, that, such votes shall represent at least one fourth (1/4) of the total number of issued and outstanding shares.

Article 30-2 Recommendation of Independent Director
1. The Independent Director Candidate Recommendation Committee shall recommend candidates for independent directors from among those who meet the qualifications set forth in the Commercial Act and other relevant laws and regulations.
2. Detailed matters concerning the recommendation and qualification screening of candidates for independent directors shall be decided by the Independent Director Candidate Recommendation Committee.

Article 31 Term of Directors
The term of a director shall be three (3) years; provided, however, that the term of a director shall be extended to the closing of the annual General Meeting of Shareholders convened for the last period for the settlement of accounts, if the term expires after the end of such last period for settlement and before the closing of the General Meeting of Shareholders.

Article 32 By-Election
Any vacancy in the office of a director shall be filled by an election at the General Meeting of Shareholders, except where the required number under Article 29 hereof is satisfied, and there is no difficulty in executing business affairs.

Article 33 Appointment of Representative Director and Others
The Company may elect a number of chairmen, vice chairmen, presidents, vice presidents, senior managing directors, and managing directors by resolution of the Board of Directors, and elect one or more Representative Director among them.

Article 34 Duties of Director
1. The Representative Director shall represent the Company and shall direct the overall operation of the Company.
2. The vice presidents, senior managing directors, and managing directors shall assist the Representative Director and shall perform their respective responsibilities as determined by the Board of Directors, and in the absence of the Representative Director, shall perform the duties of the Representative Director in the order determined by the Board of Directors.

Article 34-2 Director’s Obligation to Report
1. A director shall report his/her business execution to the Board of Directors at least once every three (3) months.
2. When a director finds a matter which may cause serious damage to the Company, he/she shall report the matter to the Audit Committee without delay.

Article 35 Reduction of Directors’ Liability to the Company
1. The Company may, by a resolution of the General Meeting of Shareholders, exempt the liabilities of a director of the Company under Article 399 of the Commercial Act for the amount exceeding six (6) times (or three (3) times in the case of an independent director) the amount of remuneration (including his/her bonus or profits from the exercise of stock options) received by such director for the past one (1) year period prior to the date the director has engaged in the relevant act.
2. Paragraph 1 above shall not apply with respect to a director who causes losses through willful misconduct or gross negligence, or falls under Article 397 (Prohibition of Competition), 397-2 (Prohibition of Appropriation of Company's Opportunities) or 398 (Prohibition of Self-Dealing Transactions) of the Commercial Act.

Article 37 Composition and Convening of the Board of Directors Meeting
1. The Board of Directors shall be composed of directors and resolve all important matters relating to the execution of the Company’s businesses.
2. The Chairman or any other director designated by the Board of Directors shall convene a meeting of the Board of Directors by notifying all directors thereof at least three (3) days prior to the date of the meeting; provided, however, that the procedures of convening a meeting may be omitted if all members of the Board of Directors unanimously consent to holding a Board of Directors meeting.
3. The Chairman of the Board of Directors shall be the person with the authority to convene a meeting of the Board of Directors under paragraph 2 above.

Article 38 Method of Resolution of the Board of Directors Meeting
1. All resolutions of the Board of Directors meetings shall be adopted by the affirmative vote of a majority of the directors present at such meeting where a majority of the total number of directors are present; provided, however, that resolutions on matters that fall under 397-2 (Prohibition of Appropriation of Company's Opportunities) or 398 (Prohibition of Self-Dealing Transactions) of the Commercial Act shall require the presence of no less than two-thirds (2/3) of the total number of directors and an affirmative vote of no less than two-thirds (2/3) of the directors present.
2. The Board of Directors may allow all or part of the directors to participate, without being physically present at a Board of Directors meeting, in the resolution of such Board of Directors meeting, by means of a communication system whereby they may receive and transmit live audio communication. Any director participating in a Board of Directors meeting in the above manner shall be deemed to be present in person at such meeting.
3. A director having special interests in relation to the resolution of the Board of Directors shall not exercise his/her voting right.

Article 39 Minutes of the Board of Directors
1. The proceedings of a Board of Directors shall be recorded in minutes.
2. The minutes shall contain the agenda, summary of proceedings, result, objectors, and grounds for their objection, and shall be affixed with the name and seal impressions or signatures of the directors present thereat.

Article 39-2 Committees
1. The Company shall have committees within the Board of Directors as described below:
(1) Independent Director Candidate Recommendation Committee;
(2) Audit Committee; and
(3) Any other committee required by the relevant laws and regulations.
2. Details concerning the composition, authority, and operation of each committee shall be determined by the resolution of the Board of Directors.
3. For matters relating to the committees not prescribed in paragraph 2 above, the provisions of Articles 37, 38 and 39 hereof shall apply mutatis mutandis.

Article 40 Remuneration and Severance Pay for Directors
1. Remuneration for directors shall be determined by a resolution of a General Meeting of Shareholders.
2. Severance pay for directors shall be paid in accordance with the Regulations on Severance Pay for Officers adopted by a resolution of the General Meeting of Shareholders.

Article 41-2 Composition of Audit Committee
1. The Company shall in lieu of a statutory auditor have an Audit Committee as set forth in Article 39-2 above.
2. The Audit Committee shall be comprised of at least three (3) directors, with at least one (1) director having the qualifications specified in Article 37 paragraph 2 of the Enforcement Decree of the Commercial Act.
3. Two-thirds (2/3) of the number of Audit Committee members shall be assigned to independent directors. An Audit Committee member who is not an independent director shall not fall under any of the provisions under Article 542-10 paragraph 2 of the Commercial Act.
4. The members of the Audit Committee shall be appointed among the directors elected as director at the General Meeting of Shareholders. However, in this case, two (2) of the members of the Audit Committee shall be separately appointed by the resolution of the General Meeting of Shareholders as a director appointed as a member of the Audit Committee.
5. The resolution to appoint the members of the Audit Committee shall be adopted by the affirmative vote of the majority of shareholders present at the General Meeting of Shareholders; provided, however, that such votes shall represent at least one-fourth (1/4) of the total number of issued and outstanding shares of the Company. However, if the Company has determined to exercise voting rights by electronic means as stipulated in Article 368-4, paragraph 1 of the Commercial Act, the resolution to appoint the members of the Audit Committee may be adopted by the affirmative vote of the majority of shareholders present at the meeting.
6. A member of the Audit Committee may be removed from office by the resolution of the General Meeting of Shareholders pursuant to Article 434 of the Commercial Act. In this case, the member of the Audit Committee under paragraph 4 above shall be removed from office as a director as well as a member of the Audit Committee.
7. Any shareholder who has shares in excess of three hundredth (3/100) of the total number of issued and outstanding shares of the Company, excluding non-voting shares, (in case of the largest shareholder, the shares held by his/her specially related persons and persons determined by the Enforcement Decree of the Commercial Act shall be aggregated) may not exercise his/her voting rights on the shares in excess when electing or removing members of the Audit Committee.
8. The Audit Committee shall select a person to represent the Committee by its resolution. In such cases, the Committee Chair shall be an independent director.
9. If the number of independent directors fails to meet the requirements for composing the Audit Committee prescribed in this Article due to the resignation, death, etc. of independent directors, the requirements shall be met at the first General Meeting of Shareholders convened after the occurrence of such cause.

Article 41-3 Duties of the Audit Committee
1. The Audit Committee shall examine the accounts and businesses of the Company.
2. The Audit Committee may, if deemed necessary, request to convene a meeting of the Board of Directors by filing with directors (in cases where there is a person eligible to convene the Board of Directors meeting, referring to such person; hereinafter the same) a written request stating the agenda and reason for convocation of such meeting.
3. If, despite the request under paragraph 2 above, the directors fail to convene a meeting of the Board of Directors without delay, the Audit Committee that requested the convocation may convene such meeting.
4. The Audit Committee may request to convene an extraordinary General Meeting of Shareholders by filing with the Board of Directors a written request stating the agenda and reason for convocation of such meeting.
5. The Audit Committee may request the Company’s subsidiary to report the details of its operations, if deemed necessary for the performance of its duties. In such a case, if the subsidiary fails to report the details without delay, or if deemed necessary to verify the contents of such reports, the Audit Committee may investigate the subsidiary’s business operation and financial status.
6. When appointing an external auditor, the Audit Committee shall select an external auditor after determining the auditor's remuneration, audit hours, and personnel required for the audit.
7. The Audit Committee shall handle matters delegated by the Board of Directors in addition to paragraphs 1 thru 6 above.
8. The Board of Directors shall not overthrow resolutions approved by the Audit Committee.
9. The Audit Committee may seek assistance from experts with the costs assumed by the Company.

Article 41-4 Audit Records
The Audit Committee shall prepare audit records for the audit it has conducted. Proceedings and results of the audit shall be recorded in the audit records which shall be affixed with the name, seal impressions or signatures of the members of the Audit Committee who have conducted such audit.