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IR

Corporate Governance

Chapter 7 Addenda

Article 1 (Amendment)

All amendments of the Article of Incorporation of the Company shall be executed by aresolution of a general meeting of shareholders.

Article 2 (Detailed Regulations and Bylaws)

Detailed regulations and bylaws necessary for the operation and management of the Companyshall be determined and implemented by the Board of Directors.

Article 3 (Enforcement Date)

These Articles of Incorporation shall become effective from the date when the spin-off takeseffect under the spin-off plan prepared on March 8, 2019 and the amendments to Articles 11,12, 13, 16-3, and 16-4 shall come into effect from date when the Enforcement Decree of theAct on Electronic Registration of Stocks, Bonds, Etc. is in effect, while the existing provisionsof the Articles 11, 12, 13, and 16-3 shall be valid until the Enforcement Decree of the Act onElectronic Registration of Stocks, Bonds, Etc. becomes effective.

Article 4 (Schedule)

Schedules 1 and 2 form an integral part of these Articles of Incorporation.

  • · December 28 1973 Established
  • · January 3 1974 Amended
  • · January 4 1974 Amended
  • · January 5 1974 Amended
  • · January 9 1974 Amended
  • · January 10 1974 Amended
  • · January 15 1974 Amended
  • · February 22 1974 Amended
  • · September 27 1978 Amended
  • · December 14 1978 Amended
  • · March 11 1980 Amended
  • · March 18 1980 Amended
  • · August 31 1981 Amended
  • · October 12 1981 Amended
  • · July 3 1982 Amended
  • · December 4 1982 Amended
  • · June 29 1983 Amended
  • · September 1 1984 Amended
  • · October 4 1984 Amended
  • · August 1 1987 Amended
  • · March 26 1988 Amended
  • · December 22 1989 Amended
  • · November 26 1991 Amended
  • · November 30 1991 Amended
  • · June 1 1992 Amended
  • · June 3 1992 Amended
  • · June 20 1992 Amended
  • · March 11 1993 Amended
  • · September 24 1993 Amended
  • · October 28 1993 Amended
  • · December 29 1993 Amended
  • · March 16 1995 Amended
  • · March 15 1996 Amended
  • · March 24 1997 Amended
  • · March 27 1998 Amended
  • · March 20 1998 Amended
  • · March 24 2000 Amended
  • · March 16 2001 Amended
  • · March 15 2002 Amended
  • · March 14 2003 Amended
  • · March 19 2004 Amended
  • · March 18 2005 Amended
  • · March 17 2006 Amended
  • · March 16 2007 Amended
  • · March 14 2008 Amended
  • · March 13 2009 Amended
  • · March 12 2010 Amended
  • · March 11 2011 Amended
  • · March 16 2012 Amended
  • · March 25 2016 Amended
  • · March 29 2018 Amended
  • · March 26 2019 Amended
  • · May 31 2019 Amended
<Schedule 1> Terms of Preferred Shares Dividends

For five (5) years from the issuance date (if the redemption period is extended, excluding suchextended period), the Company is required to pay dividends on Class IV Shares preferentiallyevery fiscal year if there are distributable profits, and in the event it fails to pay dividendsaccording to the preferred dividend rate of Class IV Shares, the Company may not paydividends on common shares in the pertinent fiscal year. In the event the Company fails to paya fixed dividend on Class IV Shares in a given fiscal year, the accumulated amount notdistributed shall be paid preferentially when paying dividends in the next fiscal year.

Within the limit of distributable profits calculated as set forth in the Commercial Act and/orrelevant laws and regulations, the dividends on Class IV Shares shall be calculated inaccordance with the following formula and paid (provided that if the dividend rate of commonshare exceeds that of preferred share, as to the exceeding portion, shareholders shall participateat the same dividend rate with common shares and receive dividends, and the dividend per shareshall increase accordingly).
- Dividend per share = Issue price per share x preferred dividend rate

The record date of dividend payout for each fiscal year shall be as prescribed by Article 10 ofthese Articles of Incorporation.

In case the preferred dividend rate reaches zero (0) as preferred dividends have reducedpursuant to an agreement with shareholders of Class IV Shares, the dividend restrictions oncommon shares caused by preferred dividend shall be released.

<Schedule 2> Formula to Adjust Conversion Prices

The first conversion price shall be issue price of the Class IV Shares, specifically the conversionrate shall be 1:1, but shall be adjusted as follows. If there are a number of reasons for conversion,the price shall be adjusted on a cumulative basis. When conversion price increase as a result ofthe adjustment of the conversion prices, the Company shall implement capital reductionprocedures required by the Commercial Act if deemed necessary.

(A) Dilution adjustment

(1) When spin-off, merger, spin-off merger, comprehensive share swap,comprehensive share transfer, or capital reduction (hereinafter referred to as“Merger, etc.”) is made and Class IV Shares are converted to common sharesimmediately before the Merger, etc., conversion prices shall be adjusted so asto receive shares and other properties of the Company (or successive company,parent company, etc. related to Merger, etc.) that may be distributed tocommon shares which are deemed convertible, and the Company shall takenecessary measures for the adjustment as part of procedures for Merger, etc.and shall not conduct activities for Merger, etc. without taking such measures.
(2) In case of stock split or reverse stock split of Class IV Shares, conversionprices of Class IV Shares shall be adjusted based on the stock split or reversestock split rate and the amount falling under fractional shares less than one (1)share shall not be converted but will be paid in cash when issuing theexercising stock certificate.
(3) When the Company increases its capital by issuing new shares or withoutconsideration, or allocates shares at per-share issue prices, conversion prices,or exercising prices less than the existing conversion prices, or the Companyissues stock-related bonds that can be converted or exchanged to shares of theCompany, conversion prices shall be adjusted as follows:
Conversion price after adjustment = Conversion price before adjustment x{number of shares issued and outstanding + (number of newly issued sharesx issue price per share / conversion price before adjustment)} ÷ (number ofshares issued and outstanding + number of newly issued shares),
where (i) “number of shares issued and outstanding” shall be the totalnumber of shares issued as of the date immediately preceding the day whenthe pertinent cause of adjustment occurs, (ii) “number of newly issuedshares” means the number of shares to be actually issued, or the number ofshares to be issued to a bondholder or a preemptive right holder in case ofissuing convertible bonds or bond with warrants, and (iii) “issue price pershare” shall be zero (0) in the case of capital increase without considerationor share allocation while it means a conversion price or exercising price inthe case of issuing bond with warrants. After the adjustment according to theabove formula, the amount less than one (1) Korean Won of the conversionprice shall be rounded down.

(B) Value adjustment: In case the below adjustment amount occurs, conversion price shallbe adjusted based on the following formula:

Adjusted conversion price = A * B / (A – X)

X = (Adjustment amount caused by Daewoo Shipbuilding & Marine Engineering –reduced preferred dividend amount (up to 62.5 billion Korean Won) – number of yearselapsed from the redemption date to the point of exercising the convertible right x 25billion Korean Won) – adjustment amount caused by the Company
A = Total issue price for Class IV Shares: 1,250,000,051,328 Korean Won
B = Issue price per share of Class IV Shares: 137,088 Korean Won; however, it refersto conversion price after adjustment in case of dilution adjustment specified in Section(A) above.

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