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Articles of Incorporation

Overview

Samsung Biologics has established the articles of incorporation in accordance with the Commercial Act, which will serve as the legal basis for the company’s operations that include general meetings of shareholders, the board of directors, and committees

Chapter 1 General Provisions

Article 1 (Corporate Name)

  • The name of the Company shall be “Samsung BioLogics chusik hoesa,” which shall be written in English as “SAMSUNG BIOLOGICS CO., LTD.”

Article 2 (Purpose)

  • The objective of the Company shall be to engage in the following businesses:

    • 1.Develop, manufacture, commercialize, distribute and sell all pharmaceutical products including bio-pharmaceutical products;
    • 2.Wholesale of finished pharmaceutical products and raw materials for pharmaceutical products;
    • 3.Export and import and its agency business, and distribution of imported products;
    • 4.Sale of raw materials and/or products and its agency business;
    • 5.Research and development relating to pharmaceutical products, subcontracting, advisory service;
    • 6.Education service and business service;
    • 7.Research service and investment business;
    • 8.Bioengineering and bio-pharmaceutical product research;
    • 9.Health and medical research;
    • 10.Joint research with domestic or international institutions;
    • 11.Technical research service for other domestic or international institutions;
    • 12.Plant design, purchasing agency, manufacture, construction, validation and supervision service;
    • 13.Real estate sale and purchase and leasing business;
    • 14.Transportation business;
    • 15.Parking lot business;
    • 16.Warehousing business;
    • 17.Businesses related to, necessary for, or incidental to any of the foregoing.

Article 3 (Location of Head Office and Establishment of Branch, etc.)

  • The Company shall have its head office in Incheon City and, if necessary, may establish branches, representative offices, business offices, sales offices, or local subsidiaries by a resolution of the Board of Directors (BOD) or of such a committee as authorized by the BOD.

Article 4 (Method of Public Notices)

  • The Company’s public notices shall be published in the Company’s website (http://www.samsungbiologics.com); provided, however, that in the event the public notices cannot be posted electronically due to computer system error or other unavoidable circumstances, the public notices shall be published in the JoongAng Ilbo, a daily newspaper of general circulation published in Seoul.
Chapter 2 Shares

Article 5 (Total Number of Shares Authorized to be Issued)

  • The total number of shares that the Company is authorized to issue shall be Five Hundred Million(500,000,000) shares.

Article 6 (Par Value per Share)

  • The par value of each share to be issued by the Company shall be Two Thousand Five Hundred(2,500) won.

Article 7 (Total Number of Shares to be Issued upon Incorporation)

  • The total number of shares to be issued at the time of incorporation of the Company shall be One Million Five Hundred Thousand (1,500,000) shares.

Article 8 (Classes of Shares and Share Certificates)

  • The classes of shares to be issued by the Company shall be common shares and preferred shares, each of which shall be in registered form.
  • Preferred shares to be issued by the Company shall be preferred shares concerning dividends with non-voting rights, and the number of the preferred shares shall not be more than Fifty Million (50,000,000) shares.
  • Dividends on the preferred shares shall be first paid in cash at such dividend rate as determined by the BOD or such a committee as authorized by the BOD at the time of issuance based on the par value of the preferred shares.
  • In the event that the dividend rate of the common shares exceeds that of the preferred shares under Paragraph 3, any excess amount available for distribution after payment of dividends on the preferred shares and the common shares at the same dividend rate as that for the preferred shares shall be equally distributed to both common and preferred shareholders in proportion to their shareholding.
  • In the event that preferred dividends are not fully distributed on the preferred shares for any given fiscal year, any accumulated undistributed dividends shall be preferentially distributed first at the time of distribution of dividends in the immediately following fiscal year.
  • In case of rights issues, bonus issues or stock dividends, common shareholders shall be entitled to common shares, and preferred shareholders shall be entitled to preferred shares, in proportion to their respective shareholding; provided, however, that in case of rights issues, bonus issues or stock dividends, the Company may, if necessary, issue only one class of shares, where all the shareholders shall be entitled to such class of shares to be issued.
  • Share certificates shall be issued by the Company in eight (8) denominations of 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 9 (Transfer Agent)

  • The Company may appoint a transfer agent to make entries in the Register of Shareholders.
  • The transfer agent, the location of its services and the scope of its operation shall be determined by the BOD or such a committee as authorized by the BOD.
  • The Company shall keep the Register of Shareholders and a duplicate thereof at the office of the transfer agent and entrust the transfer agent to make any entry into the Register of Shareholders, registration or deregistration of pledges, registration or cancellation of trusts, issuance of share certificates, receipt of notices and other related matters.
  • The procedures for the acts referred to in Paragraph 3 shall be compliant with the Regulation on the Securities Transfer Agency Business of the transfer agent.

Article 10 (Report of Name, Address, Seal or Signature of Shareholders, etc.)

  • Shareholders and registered pledgees shall report their names, addresses, and seals or signatures to the transfer agent pursuant to Article 9.
  • Shareholders and registered pledgees who reside in foreign countries shall appoint and report the place where, and an agent to whom, notices will be given in Korea.
  • The same shall apply when there are any changes in matters referred to in Paragraphs 1 and 2 above.

Article 11 (Issuance and Allocation of Shares)

  • The Company may issue new shares with a resolution of the BOD by:
    • 1.Granting the shareholders opportunities to subscribe for new shares in proportion to their respective shareholding;
    • 2.Granting specific persons (including the shareholders of the Company) opportunities to subscribe for new shares to the extent of not exceeding 30/100 of the total number of issued and outstanding shares (the total number of issued and outstanding shares herein shall include new shares to be issued under this Sub-Paragraph) by a method other than that under Sub-Paragraph 1 (i.e. private placement) for managerial purpose of the Company such as improvement of financial structure, introduction of new technology, strategic partnership, etc.;
    • 3.Granting general public (including the shareholders of the Company) opportunities to subscribe for new shares and allocating new shares to those who subscribe for such shares to the extent of not exceeding 50/100 of the total number of issued and outstanding shares (the total number of issued and outstanding shares herein shall include new shares to be issued under this Sub-Paragraph) by a method other than that under Sub-Paragraph 1.
  • When allocating new shares under Sub-Paragraph 3 of Paragraph 1 above, the Company shall allocate new shares with a resolution of the BOD by:
    • 1.Allocating new shares to unspecified subscribers without differentiating the types of persons who are granted opportunities to subscribe for new shares;
    • 2.Allocating new shares to the members of the Employee Stock Ownership Association pursuant to applicable laws and granting general public opportunities to subscribe for new shares, including unsubscribed shares;
    • 3.Granting the shareholders opportunities to subscribe for new shares first and, if there are any unsubscribed shares, then to general public opportunities to be allocated;
    • 4.Granting specific types of persons opportunities to subscribe for new shares in accordance with reasonable standards stipulated in applicable statutory provisions, such as demands forecast to be made by investment trader or investment broker as underwriter or arranger.
  • When new shares are allocated under Sub-Paragraph 2 or 3 of Paragraph 1 above, the items set forth in Section 416 (1), (2), (2-2), (3) and (4) of the Commercial Code shall be notified to shareholders by way of individual or public notices no later than two (2) weeks prior to the date of payment of the subscription price; provided, however, that such an individual notice and public notice may be substituted by publishing a Report of Major Items to the Financial Services Commission and the stock exchange under Article 165-9 of the Financial Investment Services and Capital Markets Act.
  • The class, number, and issuance price of the new shares that are to be issued under any of the provisions in Paragraph 1 shall be determined by a resolution of the BOD.
  • Any of the new shares that are not subscribed for or paid therefor by applicable payment date shall be handled by a resolution of the BOD in accordance with applicable laws and regulations.
  • Disposal of fractional shares created in the course of allocation of new shares shall be determined by a resolution of the BOD.
  • In case of allocation of new shares under Sub-Paragraph 1 of Paragraph 1 above, the Company shall issue the certificates of preemptive rights to the shareholders.

Article 12 (Record Date for New Shares)

  • If the Company issues new shares as a result of rights issues, bonus issues, or stock dividends, such new shares shall be deemed to have been issued at the end of the fiscal year immediately preceding the fiscal year when such new shares are actually issued with respect to dividends payable on the new shares; provided, however, that with respect to interim dividend on new shares issued as a result of rights issues, bonus issues, or stock dividends after the record date for interim dividend under Paragraph 1 of Article 49, such new shares shall be deemed to have been issued immediately following the record date for interim dividend.

Article 13 (Stock Options)

  • The Company may grant stock options to its directors, officers and employees by a special resolution of the general meeting of shareholders to the extent permitted by the Commercial Code; provided, however, that stock options may be granted to the officers and employees of the Company excluding its directors by a resolution of the BOD to the extent of 1/100 of total issued and outstanding shares, which shall be ratified by the first general meeting of shareholders convened after granting of such stock options.
  • The persons eligible for stock options are the Company’s directors, officers and employees who have contributed or are capable of contributing to the establishment, management, overseas sales, technical innovation, etc.; provided, however, that those directors, officers and employees who are not entitled to stock options under the relevant laws and regulations shall be excluded.
  • The shares to be issued to the directors, officers or employees upon the exercise of their stock options (in case that the Company pays, either in cash or treasury shares, the balance between the exercise price of stock options and the market price, they refer to the shares which are the basis for such calculation) shall be common shares in registered form or preferred shares in registered form and the number thereof shall be to the extent of being permitted under the Commercial Code.
  • The stock options may be exercised until an expiry date determined by a resolution under Paragraph 1,which expiry date shall be a date from the second anniversary of the resolution under Paragraph 1 until the eighth anniversary.
  • Any grantee of the stock option shall serve the Company for at least two (2) years from the date of such resolution to be entitled to exercise such stock option; provided, however, that the stock option may be exercised during the exercise period in Paragraph 4 if the grantee dies or resigns or retires for a cause not attributable to such grantee within two (2) years from the date of such resolution.
  • The terms and conditions of stock options, such as the contents and exercise price thereof shall be determined by a special resolution of the general meeting of shareholders or by a resolution of the BOD in accordance with the Commercial Code and these Articles of Incorporation; provided, however, that such matters which are not provided for as matters reserved for resolutions of the general meeting of shareholders or the BOD may be determined by the BOD or such a committee as authorized by the BOD.
  • If any of the following events occurs, the stock options may be cancelled by a resolution of the BOD:
    • 1.An officer or employee to whom a stock option has been granted resigns or retires from office at his or her will;
    • 2.An officer or employee to whom a stock option has been granted inflicts substantial damages to the Company due to his or her willful misconduct or gross negligence;
    • 3.The Company cannot honor the exercise of such stock option due to its bankruptcy or dissolution;
    • 4.Any other cause for cancellation set forth in the stock option agreement occurs.
  • Provisions in Article 12 shall apply mutatis mutandis to dividends on new shares to be issued as a result of the exercise of stock option.
  • The directors, officers and employees set forth herein shall include the directors, officers and employees of affiliates under Paragraph 1 of Article 30 of the Enforcement Decree to the Commercial Code.

Article 14 (Close of Shareholders’ Register and Record Date)

  • The Company shall suspend any entry into the Register of Shareholders of any alternation of shareholders’ rights from January 1 to 31 of each year.
  • The Company shall allow the shareholders who are registered in the Register of Shareholders as of December 31 of each year to exercise their rights thereof at the ordinary general meeting of shareholders.
  • In case where the Company convenes an extraordinary general meeting of shareholders or where otherwise deems it necessary, the Company may, by a resolution of the BOD or such a committee as authorized by the BOD, close the Register of Shareholders or set the record date for determination of shareholders who will exercise their rights for a certain period not exceeding three (3) months; provided, however, that if the BOD or such a committee as authorized by the BOD deems it necessary, the Company may both close the Register of Shareholders and set the record date. In case of closing the Register of Shareholders or setting record date under this Paragraph, the Company shall give a public notice two (2) weeks prior to such suspension period or record date.
Chapter 3 Bonds

Article 15 (Issuance of Bonds)

  • The Company may issue corporate bonds by a resolution of the BOD.
  • The BOD may delegate the authority to the representative director to issue corporate bonds for a period not exceeding one (1) year within limits of such amount and type as determined by it.

Article 16 (Issuance and Allocation of Convertible Bonds)

  • The Company may issue convertible bonds by a resolution of the BOD by way of a method other than allocation to its shareholders in any of the following cases:
    • 1.If convertible bonds are issued by granting specific persons (including shareholders of the Company) opportunities to subscribe for corporate bonds and allocating such bonds to them by a method other than that under Sub-paragraph 1 of Paragraph 1 of Article 11, to the extent that the aggregate face value of the bonds does not exceed One Trillion (1,000,000,000,000) won for managerial purpose of the Company such as improvement of financial structure, introduction of new technology, strategic partnership, etc.;
    • 2.If convertible bonds are issued by granting general public (including shareholders of the Company) opportunities to subscribe for corporate bonds and allocating such bonds to those who subscribe for them by a method other than that under Sub-paragraph 1 of Paragraph 1 of Article 11 to the extent that the aggregate face value of the bonds does not exceed One Trillion (1,000,000,000,000) won.
  • In case of allocating corporate bonds under Sub-paragraph 1 of Paragraph 1, the Company shall allocate such corporate bonds with a resolution of the BOD by:
    • 1.Allocating corporate bonds to unspecified multiple subscribers without differentiating the types of persons who are granted opportunities to subscribe for corporate bonds;
    • 2.Granting the shareholders opportunities to subscribe for corporate bonds first and, if there are any unsubscribed bonds, then to general public opportunities to be allocated;
    • 3.Granting specific types of persons opportunities to subscribe for corporate bonds in accordance with reasonable standards stipulated in applicable statutory provisions, such as demands forecast to be made by investment trader or investment broker as underwriter or arranger.
  • The BOD may issue the convertible bonds under Paragraph 1 on the condition that only a portion of the convertible bonds have conversion rights.
  • The class of shares to be issued upon conversion shall be either common shares or preferred shares, and the conversion price shall not be lower than the par value of the shares as determined by the BOD at the time of the issuance of the relevant convertible bonds.
  • The period during which conversion may be requested shall commence on the date following the date of issuance of relevant convertible bonds and end on the date one day prior to the redemption thereof; provided, however, that the BOD may, by its resolution, adjust the conversion period within the above period.
  • With respect to dividends payable on the new shares as a result of conversion, the convertible bonds shall be deemed to have been converted into shares at the end of the fiscal year immediately preceding the fiscal year during which the relevant conversion rights are exercised; provided, however, that, with respect to the interim dividend on new shares issued upon conversion after the record date for interim dividend under Paragraph 1 of Article 49, the new shares shall be deemed to have been issued immediately following the record date for interim dividend.

Article 17 (Issuance and Allocation of Bonds with Warrants)

  • The Company may issue bonds with warrants by a resolution of the BOD by way of a method other than allocation to its shareholders in any of the following cases:
    • 1.If bonds with warrants are issued by granting specific persons (including shareholders of the Company) opportunities to subscribe for corporate bonds and allocating such bonds to them by a method other than that under Sub-Paragraph 1 of Paragraph 1 of Article 11 to the extent that the aggregate face value of the bonds does not exceed One Trillion (1,000,000,000,000) won for managerial purpose of the Company such as improvement of financial structure, introduction of new technology, strategic partnership, etc.;
    • 2.If bonds with warrants are issued by granting general public (including shareholders of the Company) opportunities to subscribe for corporate bonds and allocating such bonds to those who subscribe for them by a method other than that under Sub-Paragraph 1 of Paragraph 1 of Article 11 to the extent that the aggregate face value of the bonds does not exceed One Trillion (1,000,000,000,000) won.
  • In case of allocating corporate bonds under Sub-Paragraph 2 of Paragraph 1, the Company shall allocate such corporate bonds with a resolution of the BOD by:
    • 1.Allocating corporate bonds to unspecified multiple subscribers without differentiating the types of persons who are granted opportunities to subscribe for corporate bonds;
    • 2.Granting the shareholders opportunities to subscribe for corporate bonds first and, if there are any unsubscribed bonds, then to general public opportunities to be allocated;
    • 3.Granting specific types of persons opportunities to subscribe for corporate bonds in accordance with reasonable standards stipulated in applicable statutory provisions, such as demands forecast to be made by investment trader or investment broker as underwriter or arranger.
  • The aggregate price of new shares which may be subscribed for by the holders of warrants shall be determined by the BOD to the extent of not exceeding the aggregate face value of the relevant bonds.
  • The class of shares to be issued upon exercise of warrants shall be either common shares or preferred shares, and the issuance price shall not be lower than the par value of the shares as determined by the BOD at the time of the issuance of the relevant convertible bonds.
  • The period during which warrants may be exercised shall commence on the date following the date of issuance of relevant convertible bonds and end on the date one day prior to the redemption thereof; provided, however, that the BOD may, by its resolution, adjust the warrant exercise period within the above period.
  • With respect to dividends payable on the new shares as a result of exercise of warrants, the new shares shall be deemed to have been issued at the end of the fiscal year immediately preceding the fiscal year during which the relevant warrants are exercised; provided, however, that, with respect to the interim dividend on new shares issued upon the exercise of warrants after the record date for interim dividend under Paragraph 1 of Article 49,the new shares shall be deemed to have been issued immediately following the record date for interim dividend.

Article 18 (Applicable Provisions regarding Issuance of Bonds)

  • Provisions in Articles 9 and 10 shall apply mutatis mutandis to the issuance of bonds.
Chapter 4 General Meeting of Shareholders

Article 19 (Convening of Meeting)

  • General meetings of the shareholders of the Company shall be either ordinary or extraordinary meetings.
  • Ordinary general meetings 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 when necessary.

Article 20 (Person authorized for Convening of Meeting)

  • 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 in accordance with a resolution of the BOD.
  • In the event of absence or incapacity of the representative director, provisions of Paragraph 3 of Article 33 shall apply mutatis mutandis.

Article 21 (Notice and Public Notice of Convening of General Meeting)

  • In convening a general meeting of shareholders, the Company shall send a written or electronic notice thereof which sets forth the time, date, place and agenda of the meeting to the shareholders no later than two (2) weeks prior to the date of the meeting; provided, however, that if such a notice has not been received at the address of a shareholder recorded in the Register of Shareholders for three (3) consecutive years, the Company may not notify such shareholder of the convening of the general meeting.
  • With respect to the shareholders with 1/100 or less shares of the total issued and outstanding shares with voting rights, the written notice of convening of a general meeting of shareholders which sets forth the convening of a general meeting and the agenda of the meeting may be replaced by public notices given at least twice in the Joongang Ilbo and the Chosun Ilbo , both of which are daily newspapers of general circulation published in Seoul, or the electronic public disclosure system (i.e. the Data Analysis , Retrieval and Transfer System) operated by the Financial Supervisory Service or the Korea Stock Exchange two (2) weeks prior to the date of the meeting.

Article 22 (Place of Meeting)

  • The general meeting of shareholders shall be, in principle, convened at the head office of the Company, but it may be convened in other places by a resolution of the BOD or a committee authorized by the BOD.

Article 23 (Chairperson)

  • The representative director of the Company shall preside over the general meeting of shareholders as the chairperson.
  • In the event of absence or incapacity of the representative director, provisions in Paragraph 3 of Article 33 shall apply mutatis mutandis.

Article 24 (Chairperson’s Authority on Maintenance of Order)

  • The chairperson of the general meeting of shareholders may order persons who significantly disrupts the order of the meeting by speaking or behaving to intentionally disrupt the proceedings of the meeting to stop a speech or leave the place of the meeting.
  • The chairperson of the general meeting of shareholders may restrict the time and number of speeches of a shareholder as deemed necessary for the purpose of harmonious progress in the proceeding of the meeting.

Article 25 (Voting Right)

  • Unless otherwise provided for in the relevant laws and regulations, each shareholder shall have one vote for each share.

Article 26 (Method of Resolution)

  • Except as otherwise provided in the relevant laws and regulations, all resolutions of general meeting of shareholders shall be adopted by the affirmative votes of a majority of the voting shares present at the general meeting of shareholders, which shall also be 1/4 or more of the total issued and outstanding shares.

Article 27 (Voting by Proxy)

  • A shareholder may exercise his or her vote by proxy. The proxy shall present a power of attorney to the Company before the opening of the general meeting of shareholders.
  • In case the legal representative of a shareholder grants a power of attorney to another shareholder, a document evidencing the power of legal representation shall also be attached.

Article 28 (Minutes)

  • The substance of proceedings and the results of general meeting of shareholders shall be recorded in the minutes on which the names and seals of the chairperson and directors present at the meetings shall be affixed or which shall be signed by such persons.
Chapter 5 Directors & BOARD OF DIRECTORS

Article 29 (Appointment of Directors, etc.)

  • The Company shall have at least three (3) but no more than ten (10) directors and such directors shall be appointed at the general meeting of shareholders; provided, however, that at least three (3) independent directors shall be appointed and the number of the independent directors shall account for at last a majority of the total number of directors.
  • The cumulative voting system stipulated in Article 388-2 of the Commercial Code shall not apply if two (2) or more directors are appointed at a general meeting of shareholders.
  • A resolution for the election of directors shall be adopted by the affirmative votes of a majority of the shareholders present at the meeting, which shall also be at least 1/4 of the total number of issued and outstanding shares.
  • The representative director shall be appointed by the BOD.
  • The Company may appoint a president, vice presidents, senior managing directors, and managing directors among the directors or persons who are not directors.

Article 30 (Nomination of Candidates for Independent Directors)

  • The Independent Director Candidate Nomination Committee shall nominate the candidates for the independent directors among persons who meet qualification requirements stipulated in the relevant laws and regulations, including the Commercial Code, etc.
  • The Independent Director Candidate Nomination Committee shall provide for details pertaining to nomination and qualification review of the candidates for the independent directors.

Article 31 (Term of Office of Director)

  • The term of office of directors shall end at the close of the ordinary general meeting of shareholders convened in respect of the last fiscal year within three (3) years from their appointment.

Article 32 (Election of Directors in case of Vacancy)

  • Any vacancy in the office of directors shall be filled at a general meeting of shareholders; provided, however, that if the number of directors does not fall below the number prescribed in Paragraph 1 of Article 29 and there is no difficulty in the administration of business, the foregoing shall not be applicable.
  • If the number of the independent directors falls below the statutory number prescribed in Paragraph 1 of Article 29 1 due to resignation or death, etc. of an independent director, new independent directors shall be appointed at the first general meeting of shareholders convened after the occurrence of the relevant event in order to fill the vacancy.

Article 33 (Duties of Directors)

  • The representative director shall represent the Company.
  • The representative director shall execute matters determined by the BOD and manage all affairs of the Company.
  • President, vice president, senior managing director, managing director and directors shall assist the representative director and perform their respective duties as determined by the BOD or such committee as authorized by the BOD. In the event of absence or incapacity of the representative director, the officers listed above shall perform the duties of the representative director in the foregoing order of priority.

Article 34 (Directors’ Confidentiality Obligation)

  • Directors shall not divulge any trade secret of the Company that they become aware of in the course of performing their duties, not only while in the office but also after the resignation.

Article 35 (Directors’ Reporting Obligation)

  • Directors shall report their performance of business administration to the BOD at least once every three (3) months.
  • Directors shall immediately report to the Audit Committee when they become aware of any facts which may cause significant damages to the Company.

Article 36 (Composition of BOD and Convening of BOD Meeting)

  • The BOD shall consist of all directors, including independent directors. The chairperson of the BOD shall be appointed among the directors by a resolution of the BOD.
  • The chairperson shall set a date and time of the meeting of the BOD and give a notice to each director no later than twenty-four (24) hours prior to the meeting in writing, electronic document, or orally; provided, however, that such notice may be waived with the unanimous consent of all directors.
  • If it is deemed necessary for administration of business, any director may convene the BOD with the consent of the chairperson. In such a case, provision in Paragraph 2 shall apply mutatis mutandis.

Article 37 (Committees)

  • The Company may establish the following committees under the BOD by a resolution of the BOD:
    • 1.Independent Director Candidate Nomination Committee
    • 2.Audit Committee
    • 3.Management Committee
    • 4.Related Party Transaction Committee
    • 5.Remuneration Committee
    • 6.Other committee deemed necessary by the BOD
  • In convening a meeting of any of the above committees, the Company shall set a date and time of the meeting and give a notice to each member of the committee no later than twenty-four (24) hours in advance; provided, however, that such notice may be waived with the unanimous consent of all members of the committee. Details pertaining to organization, authority, operation, etc. of each committee shall be determined by a resolution of the BOD.

Article 38 (Resolution and Minutes of the BOD)

  • The resolution of the BOD shall be adopted in the attendance of a majority of the directors in office and by the affirmative votes of a majority of the directors present at the meeting; provided, however, that a resolution of the BOD on matters stipulated under Article 397-2 (Prohibition of Use of Corporate Opportunities and Assets) and Article 398 (Self-Dealing between Directors, etc. and the Company) of the Commercial Code shall be adopted by the affirmative votes of at least 2/3 of the directors in office.
  • The BOD may allow all or a part of the directors who do not attend a meeting in person to participate in a resolution through communication that concurrently transmits and receives voices of all directors. In this case, such director shall be deemed to have attended the BOD meeting in person.
  • A director with his or her own interests in a resolution of the BOD shall not be allowed to participate in a voting.
  • The substance of the proceedings of the BOD meetings shall be recorded in the minutes which shall include agenda, proceedings, results, opponents and his or her reasons for opposition and on which the names and seals of all directors present at the meetings shall be affixed or which shall be signed by such persons.

Article 39 (Directors’ Non-Competition Obligation)

  • No directors are allowed to conduct any transaction which falls within the same type of business as that of the Company on his or her, or third party’s account or become a general partner or a director of another company engaged in the same type of business, without consent of the BOD.

Article 40 (Remuneration of Directors)

  • The ceiling amount on remuneration for directors shall be determined by a resolution of a general meeting of shareholders.

Article 41 (Severance Payment for Directors)

  • Severance payment for directors shall be governed by Regulation on the Severance Payment for Directors and Officers to be adopted by a resolution of a general meeting of shareholders.
Chapter 6 Audit Committee

Article 42 (Composition of Audit Committee)

  • The Company shall establish an audit committee pursuant to Article 37 in place of a statutory auditor.
  • The Audit Committee shall consist of at least three (3) directors, of whom 2/3 shall be independent directors.
  • The members of the Audit Committee shall be appointed at a general meeting of shareholders.
  • In appointing an independent director as a member of the Audit Committee, a shareholder who holds shares of the Company exceeding 3/100 of the issued and outstanding shares with voting rights may not exercise his or her voting rights with respect to the shares in excess of such 3/100.
  • If a member of the Audit Committee who is not an independent director is to be appointed or dismissed and the aggregate number of shares held by (i) the largest shareholder and his or her related parties, (ii) the persons who hold shares on the account of the largest shareholder or his or her related parties, or (iii) other persons whose voting rights for shares are delegated to the largest shareholder or his or her related parties exceed 3/100 of the total number of issued and outstanding shares with voting rights, such shareholder may not exercise voting rights on such excess shares.
  • The Audit Committee shall, by its resolution, select a person to represent it. Its chairperson shall be an independent director.

Article 43 (Duties, etc. of Audit Committee)

  • The Audit Committee shall audit accounting and operation of the Company.
  • If necessary, the Audit Committee may request the representative director to convene the BOD, by giving a written notice setting forth the agenda of the meeting and reasons for convocation.
  • If the representative director does not without delay convene a meeting of the BOD upon a request under Paragraph 2, the Audit Committee may convene a meeting of the BOD.
  • The Audit Committee may request an extraordinary general meeting of shareholders to be convened by submitting a document setting forth the agenda of the meeting and reasons for convocation to the BOD.
  • Where it is necessary to perform its duties, the Audit Committee may request subsidiaries to report their business. If a subsidiary does not report without delay or it is necessary to verify the content of the report, the Audit Committee may investigate the businesses and assets of the subsidiary.
  • The Company shall engage an external auditor with approval of the Audit Committee.
  • The Audit Committee shall handle matters delegated by the BOD in addition to those set forth in Paragraphs 1 through 6 above.
  • The BOD may not revisit a resolution of the Audit Committee.
  • The Audit Committee may engage an expert for assistance at the cost of the Company.

Article 44 (Audit Record)

  • The Audit Committee shall maintain audit records which shall set forth substances and results of an audit and be affixed with seal impression or signed by the member of the Audit Committee who has performed the audit.
Chapter 7 Accounting

Article 45 (Fiscal Period and Account Closing)

  • The fiscal year of the Company shall commence on January 1 and end on December 31 each year, and the financial accounts of the Company shall be closed once as of December 31 each fiscal year.

Article 46 (Preparation and Maintenance of Financial Statements and Annual Report)

  • The representative director of the Company shall prepare the following documents and appendices thereto, and annual report no later than six (6) weeks prior to the date of the ordinary general meeting of shareholders, have them audited by the Audit Committee, and submit the following documents and annual report to the ordinary general meeting of shareholders for approval:
    • 1.Balance sheet
    • 2.Profit and loss statement
    • 3.Other documents stipulated in the Enforcement Decree of the Commercial Code, which indicate the financial conditions and business performance of the Company
  • If the Company is subject to the requirement for preparation of consolidated financial statements as stipulated in the Enforcement Decree of the Commercial Code, such consolidated financial statements shall be included in each document listed in Paragraph 1.
  • The Audit Committee shall submit an audit report to the representative director no later than one (1) week prior to the ordinary general meeting of shareholders for approval.
  • Notwithstanding Paragraph 1, the Company may approve each document in Paragraph 1 by a resolution of the BOD if all of the following requirements are met :
    • 1.If the external auditor is of such opinion that each document in Paragraph 1 fairly presents the financial conditions and business performance of the Company pursuant to the relevant laws and regulations and these Articles of Incorporation
    • 2.Where all members of the Audit Committee concur
  • After obtaining approval of the BOD under Paragraph 4, the representative director shall report the content of each document in Paragraph 1 to the general meeting of shareholders.
  • The representative director shall keep on file the documents described in Paragraph 1 and audit report at the head office of the Company for five (5) years, and certified copies of all such documents at each branch for three (3) years, from one (1) week prior to the date for the ordinary general meeting of shareholders.
  • The representative director shall give public notice of the balance sheet and the external auditor’s audit opinion immediately after obtaining approval of the general meeting of shareholders on each document under Paragraph 1 or approval of the BOD under Paragraph 4.

Article 47 (Appropriation of Earnings)

  • The unappropriated retained earnings for each fiscal year of the Company shall be disposed of as follows:

    • 1.Legal reserves (stipulated in the Commercial Code);
    • 2.Other statutory reserves;
    • 3.Dividends;
    • 4.Discretionary reserves;
    • 5.Other appropriation of retained earnings.

Article 48 (Dividends)

  • Dividends may be paid in either cash or stock.
  • Dividends under Paragraph 1 shall be paid to shareholders or pledgees registered in the current Register of Shareholders as of the end of each fiscal year.

Article 49 (Interim Dividends)

  • The Company may distribute interim dividends to current shareholders as of the date determined by a resolution of the BOD under Article 462-3 of the Commercial Code.
  • Interim dividends under Paragraph 1 shall be distributed by a resolution of the BOD.
  • Interim dividends shall be limited to the amount calculated by deducting each of the following sums from the net asset value in the balance sheet for the immediately preceding fiscal year:
    • 1.Amount of the capital of the immediately preceding fiscal year;
    • 2.Sum of capital reserves and legal reserves accumulated up to the immediately preceding fiscal year;
    • 3.Unrealized gains stipulated in the Enforcement Decree of the Commercial Code;
    • 4.Amount determined by the ordinary general meeting of shareholders of the immediately preceding fiscal year for distribution of dividends;
    • 5.Discretionary reserves accumulated for specific purpose under applicable provisions of these Articles of Incorporation or by a resolution of the general meeting of shareholders until the immediately preceding fiscal period
    • 6.Legal reserves to be accumulated in the applicable fiscal year as a result of interim dividend
  • In connection with interim dividends on shares issued by rights issues, bonus issues, stock dividends, conversion of convertible bonds or exercise of bonds with warrants after the commencement of applicable fiscal year and prior to the record date in Paragraph 1, new shares shall be deemed to have been issued at the end of the fiscal year immediately preceding the fiscal year when such shares were actually issued.

Article 50 (Statute of Limitation for Claim for Payment of Dividends)

  • Any claim to dividends shall expire unless it is exercised within five (5) years from the resolution of the general meeting of shareholders declaring such dividends.
  • After the expiration of the period set forth in Paragraph 1, unclaimed dividends shall revert to the Company.
Addenda (August 10, 2016)

Article 1 (Effective Date)

  • These Articles of Incorporation that have been fully amended shall become effective on August 10, 2016; provided, however, that the provisory clauses of Paragraph 3 of Article 11, Paragraph 1 of Article 13, Paragraph 5 of Article 13 and the provisions of Paragraph 9 of Article 13, Paragraph 2 of Article 21, and Paragraph 3 of Article 46 shall become effective on the date when the shares of the Company are listed and their trade commenced on the Korean Stock Exchange.

Article 2 (Transitional Provisions Concerning Nomination of Candidates for Independent Directors)

  • The provisions of Article 30 shall apply to the independent directors to be appointed following the establishment of the Independent Director Candidate Nomination Committee and appointment of its inaugural members pursuant to these Articles of Incorporation.

Article 3 (Enactment of Bylaws)

  • If necessary, the Company may enact and implement bylaws required for business administration and management by a resolution of the BOD or such a committee as authorized by the BOD.

Article 4 (Scope of Application)

  • Matters not provided for herein shall be governed by the Commercial Code or other relevant laws and regulations.

Article 5 (Ancillary Business)

  • The Company may engage in educational and cultural programs by a resolution of the BOD or such a committee as authorized by the BOD if deemed necessary.

Article 6 (Names and Addresses of Promoters)

  • Names and addresses of the promoters of the Company are as follows:
  • Samsung Electronics Co., Ltd.

    416 Maetan-dong, Yeongtong-gu, Suwon City, Gyeonggi Province

    Representative Director Choi, Gee Seong

  • Samsung Everland Co., Ltd.

    Samsung Headquarter Bldg. 250, Taepyeongro 2-ga, Jung-gu, Seoul

    Representative Director Choi, Joo Hyun

  • Samsung C&T Co., Ltd.

    Samsung C&T Bldg., 1321-20, Seocho 2-dong, Seocho-gu, Seoul

    Representative Director Jung, Yeon-Joo

  • Quintiles Asia, Inc.

    4820 Emperor Boulevard, Durham, North Carolina 27709-3970, USA

  • Attorney-in-fact Kim & Chang

    Seyang Bldg., 223 Naeja-dong, Jongro-gu, Seoul

    Responsible attorney Lee, Jae Gul

The English translation of our Articles of Incorporation (AOI) is provided for the understanding of non-Korean literate investors.
If there is any conflict or inconsistency between the Korean version and the English version, the Korean version shall be the governing and prevailing version. Please refer to the Korean AOI for details.