Chapter 2: Shares and Stock Certificates
Article 5 (Total Number of Shares to be Issued)
The total number of shares the Company may issue shall be 200,000,000 shares.
Article 6 (Par Value per Share)
The par value of each share issued by the Company shall be KRW 500.
Article 7 (Number of Shares Issued at Establishment)
The total number of shares issued at the Company's establishment shall be 40,000,000 shares (20,697,570 shares as contribution in kind and 19,302,430 shares as cash contribution).
Article 7-2 (Types of Shares)
01 The shares to be issued by the Company shall be common shares and class shares.
02 Class shares issued by the Company shall be preferred shares regarding dividend distribution, preferred shares regarding residual property distribution, shares with voting rights excluded or restricted, redeemable shares, convertible shares, and shares combining all or part of these.
Article 7-3 (Non-voting Class Shares)
01 The Company may issue shares without voting rights (hereinafter “non-voting shares”).
02 Non-voting shares may not be issued in excess of the limits stipulated by laws, including Article 344-3 of the Commercial Act and Article 165-15 of the Financial Investment Services and Capital Markets Act.
Article 7-4 (Preferred Shares)
01 The Company may issue preferred shares with preferential rights to dividend distribution over common shares (hereinafter “dividend preferred shares”) or preferred shares with preferential rights to residual property distribution (hereinafter “residual property distribution preferred shares,” and dividend preferred shares and residual property distribution preferred shares are collectively referred to as “preferred shares”), and such preferred shares may not be issued exceeding one-half of the total issued shares.
02 Even when dividend preferred shares are issued as non-voting shares, if there is a resolution not to pay prescribed dividends to dividend preferred shares, voting rights shall exist from the general meeting following the meeting at which such resolution was made until the closing of the general meeting at which a resolution is made to pay such preferential dividends.
03 When issuing dividend preferred shares, the Board shall determine the preferential dividend rate at the time of issuance within the range of at least [1]% to [10]% based on the issuance price. It shall determine the type of dividend assets, the method of determining dividend asset value, and conditions for distributing profits within the scope permitted by these Articles of Incorporation.
04 Regarding dividend preferred shares, if the dividend rate of common shares exceeds the dividend rate of dividend preferred shares as determined by the Board, dividend preferred shares may participate in distribution at the same rate as common shares for such excess.
05 Regarding dividend preferred shares, if prescribed dividends are not paid in any business year as determined by the Board, accumulated unpaid dividends may be distributed with priority when distributing dividends in the following business year.
06 When the Company is liquidated, residual property distribution preferred shares shall have priority over common shares in residual property distribution up to the limit of the sum of total issuance price and unpaid dividends.
07 If the residual property distribution rate of common shares exceeds the residual property distribution rate of residual property distribution preferred shares, residual property distribution preferred shares shall participate in distribution at the same rate as common shares for such excess.
08 When the Company conducts paid-in or bonus capital increases, allocation of new shares for preferred shares shall be the same shares as allocated to common shares in the case of a paid-in capital increase, and the same class of shares in the case of a bonus capital increase.
Article 7-5 (Redeemable Shares)
01 The Company may issue redeemable shares that can be retired with the Company's profits (hereinafter “company redeemable shares”) or redeemable shares for which shareholders can request redemption from the Company (hereinafter “shareholder redeemable shares,” and company redeemable shares and shareholder redeemable shares are collectively referred to as “redeemable shares”), and such redeemable shares may not be issued exceeding one-half of the total issued shares.
02 The redemption price of redeemable shares shall be the issuance price plus the amount calculated according to the rate determined by the Board at the time of issuance within the range of 1% to less than 10% per annum from the issuance date to the redemption date. However, dividends already paid for redeemable shares at the time of redemption shall be deducted from the redemption price.
03 The redemption period (redemption request period for shareholder redeemable shares) shall be determined by the Board within the range from the day following the closing of the regular general shareholders' meeting for the fiscal year including the issuance date to the day that is one month after the closing of the regular general shareholders' meeting for the fiscal year including the day that is 10 years after issuance. However, if redemption cannot be made within the redemption period despite its expiration, the redemption period shall be extended until the reason is resolved. This includes cases where preferential dividends have not been completed when preferential dividend conditions were granted at the time of redeemable share issuance.
04 When the Company redeems company redeemable shares, the Company may redeem all redeemable shares at once or in installments. In this case, the Company must notify or announce this fact to shareholders of such shares and right holders recorded in the shareholder registry at least 2 weeks before the acquisition date of the shares subject to redemption. It shall forcibly redeem upon that period's expiration. However, in the case of installment redemption, the Company may determine which shares are to be redeemed by the pro rata method, and fractional shares arising in this case shall not be redeemed.
05 When a shareholder of redeemable shares exercises redemption rights, the shareholder may request the Company to redeem all redeemable shares at once or in installments at the shareholder's option. In this case, the shareholder must notify the Company of the intention to redeem and the shares subject to redemption by setting a period of at least two weeks. However, if distributable profits at the time of redemption request are insufficient to redeem all shares subject to redemption at once, the Company may redeem them in installments by the pro-rata method, and fractional shares arising in this case shall not be redeemed.
06 Redemption conditions and other matters not stipulated in this Article shall be determined by the Board at the time of issuance.
Article 7-6 (Convertible Shares)
01 The Company may issue class shares that can be converted to common shares under conditions determined by Board resolution at the time of class share issuance (hereinafter “convertible shares”).
(1) The issuance price of shares issued through conversion shall be the issuance price of shares before conversion.
(2) The conversion ratio of convertible shares shall, in principle, be one (1) common share per one (1) convertible share. However, this may be changed as determined by the Board at the time of convertible share issuance.
(3) The conversion period or period during which conversion may be requested shall be determined by the Board at the time of issuance within the range of 10 years from the issuance date.
(4) Reasons for conversion when the Company converts shall be determined by Board resolution at the time of issuance.
03 Regarding dividend distribution for common shares converted by conversion request, the provisions of Article 8.5 shall apply mutatis mutandis.
04 Conversion conditions and other matters not stipulated in this Article shall be determined by the Board at the time of occurrence.
Article 8 (New Share Issuance)
01 The Company may issue new shares within the scope of authorized shares according to Board resolution.
(1) A method of allowing shareholders to subscribe for new shares in proportion to their shareholdings
(2) A method of allowing an unspecified number of persons (including the Company's shareholders) to subscribe for new shares by methods other than Article 8.2.1 within the range not exceeding 50% of the total issued shares, and allocating new shares to those who subscribe accordingly
(3) A method of giving specific persons (including the Company's shareholders) the opportunity to subscribe for new shares by methods other than Article 8.2.1 within the range not exceeding 30% of the total issued shares, when necessary to achieve management objectives such as introducing new technology or improving financial structure
(4) When issuing new shares to foreigners under the Foreign Investment Promotion Act within the range not exceeding 30% of the total issued shares
(5) When preferentially allocating shares to employee stock ownership associations within the range of 20% of the total shares issued
(6) When issuing new shares in connection with depositary receipt issuance under the Financial Investment Services and Capital Markets Act and related laws
(1) A method of allocating new shares to an unspecified number of subscribers without classifying the types of persons given the opportunity to subscribe for new shares
(2) A method of allocating new shares to employee stock ownership association members under relevant laws and giving an unspecified number of persons the opportunity to subscribe for new shares, including unsubscribed shares
(3) A method of giving shareholders priority opportunity to subscribe for new shares and, if there are unsubscribed shares, giving an unspecified number of persons the opportunity to be allocated new shares
(4) A method of allowing specific types of persons to subscribe for new shares according to reasonable standards prescribed by relevant laws, such as demand forecasting prepared by investment traders or investment brokers as underwriters or arrangers
04 If any party waives new share subscription rights, if fractional shares arise in new share allocation, or if share payment for new shares is not paid by the designated payment date, forfeited shares arising therefrom shall be handled by Board resolution.
05 When the Company issues new shares through paid-in capital increase, bonus capital increase, or stock dividend, regarding dividend distribution for new shares, all shares issued as of the dividend record date shall be distributed equally, regardless of issuance date.
06 When allocating new shares to non-shareholders under Article 8.2, matters prescribed in Article 416, Items 1, 2, 2-2, 3, and 4 of the Commercial Act must be notified or announced to shareholders at least two weeks before the payment date. However, such notification and announcement may be substituted by disclosing a significant matters report to the Financial Services Commission and exchange under Article 165-9 of the Financial Investment Services and Capital Markets Act.
07 When issuing new shares by any of the methods in each item of Article 8.2, the type and number of shares to be issued and the issuance price shall be determined by Board resolution.
Article 9 (Stock Options)
01 The Company may grant stock options to employees and officers (including employees and officers of related companies as prescribed in Article 30 of the Enforcement Decree of the Commercial Act, and the same shall apply hereinafter) within the limit of 15% of the total issued shares by special resolution of the general shareholders' meeting under Articles 340-2 and 542-3 of the Commercial Act. However, stock options may be granted by Board resolution within the scope prescribed by relevant laws. When stock options are granted by Board resolution, the Company must obtain approval at the first general shareholders' meeting held after the grant. Stock options granted by resolution of the general shareholders' meeting or the Board may be performance-linked to management performance targets or to market indices.
02 Those eligible to receive stock options shall be the Company's employees and officers who have contributed or have the ability to contribute to the Company's establishment and management, overseas business, or technological innovation, excluding those prohibited from receiving grants under the Commercial Act and related laws.
03 Shares to be delivered through exercise of stock options (or shares that serve as the basis for calculating the difference between the exercise price and market price when providing the difference in cash or treasury stock) shall be registered common shares.
04 Stock options may not be granted to all officers or employees serving at one time, and stock options granted to one officer or employee may not exceed 10% of the total issued shares.
(1) When issuing new shares, the higher of the actual value of shares based on the stock option grant date and the par value of such shares
(2) When transferring treasury stock, the actual value of shares based on the stock option grant date
06 The exercise period for stock options shall be from the date two years have elapsed from the general shareholders' meeting resolution date granting them to the date six years from such general shareholders' meeting resolution date, as determined at the time of granting.
(1) When an employee or officer who received stock options resigns or retires of their own volition
Article 9-2 (Employee Stock Ownership Plan (ESOP) Stock Options)
01 The Company may grant ESOP stock options prescribed under Article 39 of the Framework Act on Labor Welfare to members of the Employee Stock Ownership Association, by a special resolution of the general shareholders’ meeting, within a limit of twenty percent (20%) of the total issued shares. However, within a limit of ten percent (10%) of the total issued shares, ESOP stock options may be granted by resolution of the Board of Directors.
02 Shares to be delivered upon exercise of ESOP stock options shall be registered common shares.
03 Pursuant to Article 41 of the Framework Act on Labor Welfare, the aggregate number of shares already held by the Employee Stock Ownership Association or its members, together with the shares to be acquired through the exercise of ESOP stock options, shall not exceed twenty percent (20%) of the total issued shares.
04 The exercise price per share of ESOP stock options shall be not less than seventy percent (70%) of the appraised value determined in accordance with Article 14 of the Enforcement Rule of the Framework Act on Labor Welfare. Provided, however, that where newly issued shares are delivered and the exercise price is lower than the par value of such shares, the par value shall be the exercise price.
05 A person granted ESOP stock options may exercise such rights from six (6) months after the resolution date under Article 9-2.1 up to two (2) years thereafter. Provided, however, that the resolution under Article 9-2.1 may specify a certain exercise period either within such period or after the expiration thereof.
06 A person granted ESOP stock options may not transfer such options to any third party and shall maintain membership in the Employee Stock Ownership Association until the exercise of the relevant ESOP stock options. Provided, however, that if a person granted ESOP stock options dies, his or her heir(s) may exercise such ESOP stock options during the applicable exercise period.
07 With respect to dividends on new shares issued as a result of the exercise of ESOP stock options, the provisions of Article 8.5 shall apply mutatis mutandis.
(1) Where the Company is unable to respond to the exercise of ESOP stock options due to bankruptcy, dissolution, or similar events;
(2) Where a member of the Employee Stock Ownership Association who has been granted ESOP stock options causes material damage to the Company due to intent or negligence; or
(3) Where any cause for cancellation stipulated in the agreement for granting ESOP stock options occurs.
Article 10 (Electronic Registration of Rights to be Indicated on Shares and Share Subscription Warrants)
The Company shall electronically register rights to be indicated on shares and share subscription warrants in the electronic registration account book of the electronic registration institution instead of issuing stock certificates and share subscription warrants.
Article 11 (Transfer Agent)
01The Company shall have a transfer agent for shares.
02 The transfer agent, its office location, and scope of agency business shall be determined by Board resolution.
03 The Company's shareholder registry or its duplicate shall be kept at the transfer agent's office, and electronic registration of shares, shareholder registry management, and other share-related affairs shall be handled by the transfer agent.
04 Procedures for handling affairs under Article 11.3 shall follow the transfer agent's regulations on agency for securities registration transfer.
Article 12 (Electronic Shareholder Registry)
01 When the Company receives notification of owner details from the electronic registration institution, it must prepare and maintain a shareholder registry recording the notified matters and the notification date.
02 The Company may prepare the shareholder registry in electronic document form.
Article 13 (Record Date)
The Company may, by Board resolution, establish shareholders recorded in the shareholder registry on a date determined by the Board as shareholders entitled to exercise their rights when convening general shareholders' meetings or in other necessary cases. The Company must announce this at least 2 weeks in advance.
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