CHAPTER V. DIRECTORS & BOARD OF DIRECTORS
Article 21 Election
(1) The members of the Board of Directors shall be elected at and by the General Meeting of Shareholders. However, an Outside Director shall be elected at the General Meeting of Shareholders after being recommended by the Outside Director Nominee Recommendation Committee in accordance with Article 542-8 of the Commercial Code.
(2) The members of the Board of Directors shall be elected by the affirmative vote of a majority of voting rights of shareholders present at the meeting and representing at least one-fourth (1/4) of the total issued and outstanding shares.
(3) If two (2) or more Directors are being elected, a shareholder may exercise one (1) vote for each of his share. The cumulative voting system under Article 382 of the Commercial Code shall not apply in case of electing two (2) or more Directors.
Article 21-2 Qualifications of the Outside Director
An Outside Director shall be qualified in accordance with Article 542-8 Clause 2 of the Commercial Code and have professional knowledge or experience in business, economics, law, or any related technology, and good reputation.
Article 22 Number of Directors
(1) The Company shall have more than three but below nine members of the Board of Directors, of which more than a half shall be Outside Directors.
(2) The board of directors of this company shall not comprise all directors of a specific gender.
Article 23 Term of Office
(1) The term of office of the Directors shall not exceed three (3) years, provided, however, that if the term of office expires before the ordinary General Meeting of Shareholders convened in respect of such fiscal year, the term of office shall be extended up to the close of such ordinary General Meeting of Shareholders.
Article 24 Dismissal of Directors and Vacancy
(1) The Dismissal of Directors shall be made in accordance with Articles 385 of the Commercial Code.
(2) On the occurrence of any one of the following events to a Director, the office of the Director, as the case may be, shall become vacant.
(2-1) Submission of resignation to the Company;
(2-2) Declaration of bankruptcy;
(2-3) Declared to be an incompetent or quasi-incompetent; or
(2-4) Death.
Article 25 Filling Vacancy in the Office of Director
(1) A vacancy in the office of Director shall be filled by resolution of a General Meeting of Shareholder. However, the Company shall defer or extend the supplementary election until the next Annual General Meeting if there is no conflict against the regulation regarding number of directors and disruption to conduct business.
(2) The term of office of a member of the Board of Directors elected to fill a member of the Board of Directors vacancy shall be the remainder of the term of office of his predecessor.
Article 26 Duties of Directors
(1) A Director is a member of the Board of Director and has the authority to participate in the management decisions concerning the Company’s business and to supervise the performance of mangers through the Board of Directors.
(2) In the event that a Director becomes aware of any facts which may cause substantial losses to the Company, he must immediately report it to the Audit Committee.
(3) A Director shall faithfully carry out his duties for the Company in accordance with laws, regulations and the Articles of Incorporation.
Article 27 Compensation of Directors
(1) The amount of compensation and work-related expenses for Directors shall be determined by the Board of Directors within the ceiling of the payments determined at a General Meeting of Shareholders.
(2) The payment amount, method and timing for incentive payments such as bonuses and performance rewards shall be determined by the Board of Directors after taking into consideration various factors such as business results, profit increase, etc.
(3) Severance payments for Directors shall be made in accordance with the Regulation on Severance Payment for Officers to be separately adopted.
Article 28 Liabilities of Directors
(1) For dereliction of duty, etc., the Directors shall be liable to third parties as specified under laws and regulations such as the Commercial Code.
(2) A Director may be exempt from liability by the resolution of the General Meeting of Shareholders pursuant to Article 399 of the Commercial Code with respect to any amount exceeding 6 times (3 times for an Outside Director) the compensation the Director has received within 1 year from the date of his action causing such liability.
(3) All litigation fees, other losses, damages and liabilities of the Directors of the Board of Directors of the Company arising from their performance of duties shall be indemnified by the Company, unless such losses, damages or liabilities were attributable to the relevant Director’s malice or violation of their duties due to gross negligence or unless the indemnification by the Company is not permitted by laws and regulations.
Article 29 Committees within the Board of Directors
(1) The Outside Director Nominee Recommendation Committee and the Audit Committee shall be established as committees within the Board of Directors, and other committees which deliberate and decide the company’s business strategy, plus matters designated by the Board of Directors can be established in addition.
(2) Committees within the Board of Directors shall be composed of 2 or more Directors, and its composition and operation shall be decided by the resolution of the Board of Directors.
(3) None of the following actions may be delegated to a committee:
1. Proposal of an agenda which requires approval of the General Shareholders Meeting
2. Appointment and Dismissal of the Representative Director
3. Establishment of a committee and appointment and dismissal of its members
4. Other matters decided by the Board of Directors
(4) A Committee shall notify its resolution to each Director. The Board of Directors may resolve the matter again. However, the Board of Directors may not go through the resolution passed by the Audit Committee again.
Article 30 Outside Director Nominee Recommendation Committee
More than a half of the members of the Outside Director Nominee Recommendation Committee shall be Outside Directors. The Outside Director Nominee Recommendation Committee recommends Outside Director nominees to be elected at the General Meeting of Shareholders.
Article 31 Constitution and Authority of the Board of Directors
(1) The Board of Directors shall be composed of Directors. The Board of Directors shall have the authority to adopt resolutions in respect of important matters of the Company related to its business including the maters specified in laws, regulations and the Articles of the Incorporation and each of the following matters. The Board of Directors also has the authority to supervise the job performance of the management.
1. Approval of the annual budget, capital investment plan and business plan or agreeing to any material variation to or departure from the original budget, capital investment plan and/or business plan;
2. Any borrowing of funds in excess of US$5 million or any lending of funds or providing guarantee in excess of US$1 million;
3. Entering into, amending or terminating any agreement or transaction with any shareholder or its affiliates (excluding (i) entering into any agreement which needs to be conducted on an urgent basis, subject to ratification by the Board, and (ii) entering into, amending or terminating any agreement or transaction within the Company’s ordinary course of business);
4. Commencing, settling or withdrawing litigation where the amount involved exceeds US$ 1 million;
5. Entering into, amending or terminating any employment agreement or consulting agreement with any person with the value of agreement in excess of US$500,000;
6. Selection or dismissal of external auditor;
7. Any change of accounting policies;
8. Adoption or modification to the Company regulation concerning the Board of Directors or any other material corporate governance and operation related regulations;
9. Investment into Hyundai Motor Company or its affiliates;
10. Preparation of annual profit distribution plan;
11. Appointment and removal of the Representative Director;
12. Any merger;
13. Any joint venture or material cooperation arrangements with a value in excess of US$10 million;
14. Amendment to the Articles of Incorporation; and
15. Any other matters the adoption of which requires a special resolution at a General Meeting of Shareholders under the applicable laws.
Any monetary threshold as stated in this Article 30, Paragraph
(1) shall be deemed adjusted automatically on September 30 of each year in proportion to the growth rate of the shareholder equity (i.e., net asset amount) from the immediately preceding fiscal year of the Company; provided, however, that any growth to the shareholder equity attributable to the initial public offering of the Company shall not be taken into consideration for such adjustment.
(2) The Company may adopt a separate regulation concerning the Board of Directors in order to specify the matters that are necessary for the operation of the Board of Directors such as the delegation of authority.
Article 32 Convening of Meetings; Proceedings; and Method of Resolution
(1) Meeting of the Board of Directors may be called at the request of each Director; except in the case when a Director is previously designated for the convening by the Board of Directors. In convening a meeting of the Board of Directors, a written notice thereof in Korean and English shall be given to each Director one (1) week prior to the date of the meeting; provided, however, that if there is a written consent of all Directors, a meeting of the Board of Directors may be convened at any time without following the foregoing convening procedure.
(2) A meeting of the Board of Directors where all Directors participate in adopting resolutions by way of communication means which can transmit and receive pictures and voices simultaneously is permitted, even though all or some Directors may not necessarily attend the meeting in person. In such case, the relevant Directors shall be deemed to have directly attended the meeting in person.
(3) The proceedings for the meetings of the Board of Directors shall be held in Korean and English. An English translation of the documents related to the meeting shall be provided to foreign shareholders.
(4) Except as otherwise provided by laws, regulations or the Articles of Incorporation, resolutions of the Board of Directors shall be adopted by the affirmative vote of a majority of the Directors present at a meeting where a majority of all Directors in office are present; provided, that a Director who has a special interest in a particular resolution shall not be able to exercise his voting rights.
Article 32-2 Special Resolution
Each of the following actions shall be adopted by the affirmative vote of at least eight (8) members of the Board of Directors
1. Acquisition or transfer of shares, business or assets (including vessels and operating leases therefor) exceeding US$15 million, except for investment in securities of non-logistics companies belonging to the Hyundai Motor Company or its affiliates;
2. Issuance of new shares or any securities convertible into or exchangeable for shares, or issuance of bonds with warrants, or granting of rights or options to subscribe for or purchase shares or bonds convertible into or exchangeable for shares;
3. Any borrowing of funds in excess of US$15 million or any provision of guarantee or indemnity in excess of US$1 million;
4. Any lending of funds in excess of US$1 million;
5. Entering into, amending or terminating any agreement in excess of US$15 million, (excluding (i) any agreements with Hyundai Motor Company or it affiliates within the Company’s ordinary course of business and (ii) any logistics contracts (including transportation service contracts) within the Company’s ordinary course of business);
6. Commencing or consenting to bankruptcy, liquidation, dissolution, composition or corporate reorganization proceedings or other similar proceedings
7. Establishment, acquisition or disposition of subsidiaries or joint venture companies, excluding affiliates and subsidiaries established or to be established outside Korea in connection with the provision of logistics service to Hyundai Motor Company or its affiliates;
8. Matters related to employee stock options;
9. A capital expenditure or other expenditure in excess of US$15 million, excluding the types of transaction specified in 1. through 8. above;
10. Distribution of profits or earned surplus or establishment of reserves, excluding those that are required under relevant laws and regulations;
11. Any merger;
12. Any joint venture or material cooperation arrangements with a value in excess of US$10 million;
13. Amendment to the Articles of Incorporation; and
14. Any other matters the adoption of which requires a special resolution at a General Meeting of Shareholders under the applicable laws.
Any monetary threshold as stated in this Article 32-2 shall be deemed adjusted automatically on September 30 of each year in proportion to the growth rate of the shareholder equity (i.e., net asset amount) from the immediately preceding fiscal year of the Company; provided, however, that any growth to the shareholder equity attributable to the initial public offering of the Company shall not be taken into consideration for such adjustment.
Article 33 Representative Director
The Representative Director shall be elected by the Board of Directors. The Representative Director shall represent the Company.
Article 34 Chairman
(1) Each year, the Board of Directors shall elect the Chairman of the Board of Directors (whose term of office shall be a one (1) year) at the first meeting of the Board of Directors held after the annual ordinary General Meeting of Shareholders.
(2) If the Chairman cannot attend the meeting of the Board of Directors because of an unavoidable reason, the Chairman may designate a temporary Chairman among the Directors who shall carry out the duties of the Chairman.
(3) In order to prepare for a situation where the Chairman is absent from a meeting of the Board of Directors without designating a temporary Chairman, the Board of Directors may establish the order of priority among the Directors who shall perform the duties of the Chairman in his absence.
Article 35 Agenda
The Chairman shall present the agenda for the meeting of the Board of Directors; provided, however, that if the other Directors desire to propose an agendum, the relevant Director shall submit the gist of the agendum to the Chairman.
Article 36 Minutes
The meetings of the Board of Directors shall be recorded in minutes in the Korean and English language, and in these minutes, the agendum and the substance of the course of the proceedings and the results thereof, and the name of Director in opposition of the decision and the reason therefor shall be recorded. Further, these minutes shall bear the names and signatures or seals thereon of the Chairman of the Board of Directors and all other members of the Board of Directors present at the meeting.
Article 37 Management
(1) The Company may have mangers in order to carry out the resolutions adopted by the Board of Directors.
(2) The matters related to the managers shall be separately specified in a regulation of the Board of Directors.
Article 38 Advisors
(1) The Representative Director may commission advisors and consultants, if necessary for the business.
(2) The Representative Director may determine and pay the compensation or work-related expenses to the advisors and consultants at the level equivalent to the managers.
