Overview
HL Mando discloses the corporate governance standards and status on its activities.
Corporate Governance
As of Sept. 2023
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HL WECO JJ Halla HL REITs Manangement
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Korea
- HL Klemove
- Mando Brose
India
- HL Mando India
- HL Mando Softtech
America
- HL Mando America
- HL Mando Brazil
- HL Mando Mexico
China
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- HL Mando Suzhou
- HL Mando Beijing
- HL Mando Tianjin
- HL Mando Ningbo
- HL Mando Beijing R&D
- HL Mando Beijing Trading
- HL Mando Chongquing
Europe & Others
- HL Mando Poland
- HL Mando Europe
- Maysan Mando
- Autoventure Mando
Rules
Articles of Incorporation
Amended on March 20, 2020
- Chapter 1 General Provisions
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Article 1 (Name) The name of the Company shall be Jushikhoisa Mando (주식회사 만도) in Korean and Mando Corporation in English (hereinafter referred to as the “Company”).
Article 2 (Purpose) The Purpose of the Company is to engage in the following business activities:
- 1.Design, assembly, manufacture and supply of brake system, suspension system, steering system and other automotive parts, and marketing and sales of automotive parts;
- 2.Manufacture and sale of general machinery;
- 3.Trade, export and import, and trade agency business;
- 4.Real estate leasing;
- 5.IT system and software rental;
- 6.Education and training related services;
- 7.Service area restaurant business;
- 8.Manufacture and sales of electric bicycles;
- 9.Solar and renewable energy generation business; and
- 10.Other businesses and/or investments related to each of the aforementioned categories.
Article 3 (Location of Head Office and Establishment of Branches, Etc.)
① The head office of the Company shall be located in Pyeongtaek-si, Gyeonggi-do, Korea. ② ② Branches, regional offices, local offices and local subsidiaries may be established in Korea or overseas by the Company by resolution of the Board of Directors, whenever necessary.Article 4 (Method of Giving Public Notice)
① Public notice by the Company shall be made on the Company’s internet homepage (www.mando.). However, when the public notice cannot be made on such homepage due to network failure or other inevitable reasons, it shall be made through Maeil Business Newspaper, a newspaper of general circulation published in Seoul. However, when the public notice cannot be made through Maeil Business Newspaper due to discontinuance, suspension of publication or other inevitable reasons, it shall be made through the Korean Economic Daily, a newspaper of general circulation published in Seoul. - Chapter 2 Stock
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Article 5 (Total Number of Shares) The total number of authorized shares of the Company shall be 150,000,000 shares.
Article 6 (Par Value) The par value of each share to be issued by the Company shall be 1,000 Won.
Article 7 (Shares to be Issued at the Time of Incorporation) The total number of shares to be issued by the Company at the time of incorporation shall be 9,391,424 shares.
Article 8 (Classes of Shares)
① The shares to be issued by the Company shall be common shares and class shares in registered form.
② The class shares to be issued by the Company shall be preferred shares, non-voting shares and a combination thereof.Article 8-2 (Number and Contents of the Preferred Shares)
① Preferred shares (“Class 1”) to be issued by the Company are preferential rights to dividends and the total number of Class 1 shall be limited to the extent permitted by relevant laws and regulations, and be determined by resolution of the Board of Directors at the time of the issuance.
② The rate of preferential dividends per annum payable on Class 1 shall be based on its par value, as determined by the Board of Directors at the time of the issuance.
③ If the Company increases its capital by issuance of common shares or bonus shares, the new shares to be assigned to Class 1 shareholders shall be common shares in the case of issuance of common shares and shall be the preferred shares of the same class in the case of a bonus issuance.Article 8-3 (Number and Contents of Non-Voting Shares)
① Non-voting shares (“Class 2”) to be issued by the Company are non-voting right and the total number of the Class 2 shall be limited to the extent permitted by the relevant laws and regulations, and be determined by a resolution of the Board of Directors at the time of the issuance.
② In the event that a resolution of not paying the preferred dividends prescribed herein has been passed at a meeting of shareholders of the Company against Class 2, the shareholders shall be granted voting rights from the opening date of the meeting of shareholders immediately following such meeting of shareholders until the closing date of the meeting of shareholders at which a resolution is passed in favor of the payment of the preferred dividends (in case of a mix with Class 1 shares, then such preferred dividends).
③ The provisions of Article 8-2(3) shall apply to Class 2.Article 9 (Electronic Registration of the Rights to be Included in the Shares and the Certificate for Preemptive Rights) The Company shall electronically register the rights to be included on the shares and the certificate for preemptive rights with the electronic registration ledger of an electronic registration agency, in lieu of issuing the share certificate and the certificate for preemptive rights.
Article 10 (Issuance and Allotment of Shares) ① The Company may issue new shares by a resolution of the Board of Directors in accordance with the following:
- 1. Granting of preemptive rights for the shareholders to subscribe for the new shares that may be issued by the Company in proportion to their respective shareholdings;
- 2. Granting of preemptive rights to subscribe for the new shares that may be issued by the Company, by other means than as stipulated in the above Subparagraph (1), to certain person(s) (including the shareholders of the Company), to the extent that the number of such new shares does not exceed 20/100 of the total number of issued and outstanding shares, if it is necessary for the introduction of important business technology, research and development, production, sales, capital partnership, business partnership, financial structure improvement and accomplishment of other management purposes; and
- 3. Granting of preemptive rights to subscribe for the new shares that may be issued by the Company, by other means that as stipulated in the above Subparagraph (1), to any persons (including shareholders of the Company), to the extent that the total number of such new shares does not exceed 20/100 of the total number of issued and outstanding shares, and provides allotment of new shares to the person(s) who have subscribed accordingly.
② In the case of issuing new shares in the manner described in Subparagraph ①(3) above, new shares will be granted by a resolution of the Board of Directors in accordance with one of the following:
- 1. Allotment of new shares to any unspecified subscribers without classifying the type of a person to be granted with the preemptive rights to subscribe for the new shares;
- 2. Grant of preemptive shares to any unspecified person(s) for the new shares including the new shares that are allotted, but unsubscribed, to the members of the Company’s employee stock ownership association in accordance with the relevant laws;
- 3. Grant of preemptive rights to any unspecified person(s) if there remain unsubscribed shares after the shareholders are granted the preemptive rights to subscribe for the new shares; and
- 4. Grant of preemptive rights to certain person(s) in accordance with reasonable standards as set out in relevant laws and regulations, such as demand forecasting prepared by investment dealers or agencies as guarantors or intermediaries.
③ If the Company allots new shares in accordance with Paragraph ①(2) and (3) above, matters stipulated in Article 416 (1), (2), (2-2), (3) and (4) of the Korean Commercial Code shall be informed or notified publicly to the shareholders at least 2 weeks prior to the payment due date; provided, however, that, such a notice may be replaced and/or waived by making public notice of report pertaining important matters to the Financial Services Commission and the Stock Exchange pursuant to Article 165(9) of the Capital Market and Financial Investment Services Act.
④ In the case of issuing new shares in the manner described in one of the Subparagraphs of Paragraph (1), the class, number, price, etc., thereof shall be determined by a resolution of the Board of Directors.
⑤ When the Company allots new shares, in the case where preemptive rights to subscribe for the new shares are not exercised or in the case where the subscription price is not paid, such matters shall be managed by a resolution of the Board of Directors as set out in the relevant laws and regulations, such as propriety of equivalent value, etc.
⑥ Fractional shares resulting from allotment of new shares shall be managed by a resolution of the Board of Directors.
⑦ In the case of allotment of new shares in the manner described in Paragraph ①(1), the Company shall issue the certificate of preemptive rights to new shares to the shareholders.Article 11 (Stock Option)
① The Company may grant its officers and employees (including officers and employees of an affiliated company as defined in Article 30 of the Enforcement Decree of the Commercial Act, hereinafter the same) stock options by a special resolution of a General Meeting of Shareholders, to the extent not exceeding 15/100 of the total number of issued and outstanding shares. Notwithstanding the above provision, the Company may grant stock options to a person who is not a director of the Company, by a resolution of the Board of Directors, to the extent not exceeding 1/100 of the total number of issued and outstanding shares. In the event that the Company grants stock options by a resolution of the Board of Directors, such grant shall be approved at the first General Meeting of Shareholders held after the grant. Stock options granted at the General Meeting of Shareholders or a resolution of the Board of Directors may be linked to the performance of the Company measured by targeted managerial results or capital market indices.
②Those eligible for a stock option shall be the Company’s officers or employees who contributed or are capable of contributing to the Company’s incorporation or management, overseas operations or technological innovations, etc.
③The shares to be delivered as a result of the exercise of stock options (referred to the shares which become the basis for calculation in case the difference between the share price at which such stock options are exercised and the market value of the relevant shares is paid in cash or treasury share) shall be determined among the shares stipulated in the above Article 8 at a General Meeting of Shareholders or by a resolution of the Board of Directors.
④The number of officers and employees who are eligible for stock options shall not exceed 30/100 of the total number of officers and employees then in office in the Company or being employed by the Company, and the number of shares covered by a stock option that may be granted to an officer or employee of the Company shall not exceed 1/100 of the total number of issued and outstanding shares.
⑤he per-share price at which stock options are exercised shall not be lower than either of the following prices and this provision shall also apply to where the relevant stock option exercising price is adjusted subsequently after the grant of the stock options:- 1. If new shares are to be issued and delivered, the higher of the following prices:
- A. the market value of relevant shares evaluated, as of the date of such stock options granted; or
- B. the face value of the relevant shares; or
- 2. In the case of transferring one’s own shares, the actual value of the relevant shares as of the date of such stock options are granted.
⑥ A stock option granted hereunder may be exercised within 6 years from the date after 2 years have elapsed from the date when the resolution mentioned in Paragraph (1) above is adopted.
⑦ A person who is granted a stock option is entitled to exercise the stock option only if he/she has been in office in the Company or employed by the Company at least for two years from the date of the resolution mentioned in Paragraph (1) above; provided, however, that is the said grantee dies or resigns from the Company within two years from the date of the resolution mentioned in Paragraph (1) above due to the age limit or any other reason not attributable to him/her, such stock option may be exercised within the period originally set for exercising the same.
⑧ The provision of Article 12 hereof shall apply, mutatis mutandis, with respect to payment of dividends on the shares issued as a result of the exercise of stock options hereunder.
⑨ The grant of a stock option may be cancelled by a resolution of the Board of Directors, if:- 1. After the grant of such a stock option, the grantee thereof has resigned voluntarily from the Company;
- 2. The grantee has caused material loss to the Company by willful acts or negligence;
- 3. The Company is unable to respond to the exercise of such a stock option, due to the Company’s bankruptcy, dissolution, etc.; or
- 4. There has occurred any event constituting a cause of cancellation thereof as provided in the relevant stock option agreement.
Article 12 (Commencement Date for Dividends on the New Shares) With regard to payment of dividends on the new shares issued by the Company as a result of paid-in capital increase, bonus issue 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 in which the time of issuance thereof belongs.
Article 13 (Transfer Agent) ① The Company shall appoint a transfer agent in relation to the transfer of its shares.
②The transfer agent, its office and the scope of services to be provided by the transfer agent on behalf of the Company shall be determined by a resolution of the Board of Directors.
③The Company shall have the list of shareholders or a copy thereof kept and maintained at the office of the transfer agent and shall cause the transfer agent to deal with the transfer of shares, registration or cancellation of pledges created on the shares, registration or cancellation of the property in trust, issuance of share certificates, acceptance or reports and other share-related matters.
④The procedures on dealing with such matters as provided in Paragraph (3) above shall be subjected to the regulations concerning the securities transfer agency by the transfer agent, etc.Article 14 (Electronic List of Shareholders) The Company shall register the shareholders electronically.
Article 15 (Suspension of Altering the Entry in the List of Shareholders and the Record Date)
① The Company shall suspend entry of alteration in the list of shareholders with respect to shareholders’ rights from January 1 to January 31 of each year.
②The Company shall deem those shareholders whose names appear in the list of shareholders on December 31 of each year to be the shareholders who are entitled to exercise their rights as shareholders at the annual general meeting of shareholders to be convened in respect of the said period for the settlement of accounts.
③The Company may suspend entry of alterations in the list of shareholders with respect to shareholders’ rights for a given period not exceeding three months, if necessary for convening a extraordinary general meeting of shareholders, etc. or the Company may deem those shareholders whose names appear in the list of shareholders on the day specified by a resolution of the Board of Directors to be the shareholders who are entitled to exercise the rights as shareholders in relation to the aforementioned purpose. In such a case, the Board of Directors may designate such a record date, together with suspension of altering entries in the list of shareholders, if the Board of Directors deems it necessary; provided, however, that the Company shall provide two weeks prior notice before making such changes. - Chapter 3 Bonds
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Article 16 (Issuance of Bonds)
① The Company may issue bonds by a resolution of the Board of Directors.
② The Board of Directors may delegate the Representative Director, after prescribing the amount and type, the matters related to the issuance of bonds within a period not exceeding one year.Article 17 (Issuance of Convertible Bonds) ① The Company may issue convertible bonds to any person(s) other than the Company’s shareholders by a resolution of the Board of Directors when any one of the following are applicable:
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1. Issuance of convertible bonds pursuant to a method of providing an opportunity to subscribe for bond acquisition in order to allot bonds to certain person (including the Company’s shareholders) by other means than as stipulated in Article 10(1)(1), in order to introduce important business technology, research and development, production, sales, capital partnership, business partnership, financial structure improvement and accomplishment of other management purposes to the extent that their par value does not exceed five hundred billion Korean won; or
2. Issuance of convertible bonds by providing an opportunity to subscribe for bond acquisition to unspecified person (including the Company’s shareholders) by other means than as stipulated in Article 10(1)(1) and then allotting the bonds to the subscribers to the extent that the bond’s par value does not exceed five hundred billion Korean won.
② In the case of allotting bonds pursuant to Paragraph (1)(1) above, the bonds shall be allotted pursuant to one or more of the following methods through a resolution of the Board of Directors:
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1. Allotting bonds to unspecified subscribers without classifying the type of subscribers of bond acquisitions;
2. Providing the shareholders with priority to subscribe for bond acquisition and then offering the unsubscribed bonds, if any, to unspecified person(s) for allotment; or
3. Providing the rights to subscribe for bond acquisition to certain person(s) in accordance with reasonable standards as set out in relevant laws and regulations, such as demand forecasting prepared by investment dealers or agencies as guarantors or intermediaries.③ As for the convertible bonds under Paragraph (1) above, the Board of Directors may also issue such bonds on a condition that only parts be converted.
④ The shares to be issued as a result of conversion of such bonds shall be common shares and the applicable conversion price shall be equal to or higher than the par value per share of such new shares, as determined by the Board of Directors at the time of issuance of such bonds.
⑤ The period in which holders of convertible bonds are entitled to make a request for the conversion hereunder shall begin on the day after one month have elapsed from the date of issuance thereof and end on the day immediately preceding the maturity date thereof; provided, however, that the period for requesting conversion may be adjusted by a resolution of the Board of Directors within the aforementioned period.
⑥ The provision of Article 12 hereof shall apply mutatis mutandis, to the payment of dividends on the shares to be issued as a result of conversion hereunder and the payment of interest on such convertible bonds.Article 18 (Issuance of Bonds with Warrant) ① The Company may issue bonds with warrant to any person(s) other than the Company’s shareholders by a resolution of the Board of Directors in case any one of the following is applicable:
- 1. If the Company issues bonds with warrants to one of its business partners to acquire a certain technology, research and development production, sales, capital partnership, business partnership, financial structure improvement and accomplishment of other managerial purposes to the extent that their aggregate par value does not exceed five hundred billion Korean won, if may issue bonds with warrant to give certain person(s) (including the Company’s shareholders) the opportunity to subscribe bond acquisitions to allot bonds by other means than as stipulated in Article 10(1)(1); or
- 2. If the Company issues bonds with warrant by providing an opportunity to subscribe for bond acquisition to unspecified person (including the Company’s shareholders) by other means than as stipulated in Article 10(1)(1) and then allotting the bonds to the subscribers to the extent that the bond’s par value does not exceed five hundred billion Korean won.
② If bonds are allotted in accordance with Paragraph (1)(2), then the bonds shall be allotted pursuant to any one of the following with a resolution of the Board of Directors:
- 1. Allotting bonds to unspecified subscribers without classifying the type of subscribers of bond acquisition;
- 2. Providing the shareholders with priority to subscribe for bond acquisition and then offering the unsubscribed bonds, if any, to unspecified person for allotment; or
- 3. Providing the rights to subscribe for bond acquisition to certain person(s) in accordance with reasonable standards as set out in relevant laws and regulations, such as demand forecasting prepared by investment dealers or agencies as guarantors or intermediaries.
③ The amount entitled to request issuance of new shares shall be determined by the Board of Directors to the extent not exceeding the aggregate face value of such bonds.
④ The shares to be issued as a result of the exercise of such warrant hereunder shall be common shares and the applicable price thereof 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 thereof.
⑤ The period in which holders of bonds with warrant are entitled to exercise such warrant hereunder shall begin on the day after one month have elapsed from the date of issuance thereof and end of the day immediately preceding the maturity date thereof provided, however, that the period for exercising such warrant my be adjusted by a resolution of the Board of Directors within the aforementioned period.
⑥ The provisions of article 12 hereof shall apply mutatis mutandis to the payment of dividends on the new shares to be issued as a result of the exercise of such warrant hereunder.Article 19 (Electronic Registration of the Rights to be Included in the Bonds and the Certificate for Preemptive Rights) The Company shall electronically register the rights to be included on the bonds and the certificate for preemptive rights with the electronic registration ledger of an electronic registration agency, in lieu of issuing the bond certificates and the certificate for preemptive rights
Article 20 (Application of Provisions Concerning Issuance of Bonds) The provisions of Article 13 shall apply mutatis mutandis to the issuance of bonds.
- Chapter 4 Meeting of Shareholders
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Article 21 (Time to Convene the Meeting of Shareholders)
① The Company’s meeting of shareholders (“General Meeting of Shareholders”) shall consist of annual meetings and extraordinary meetings.
② The annual General Meeting of Shareholders shall be held within three months after the end of each fiscal year and the extraordinary meetings may be held at any time, as necessary.Article 22 (Person Authorized to Convene the General Meeting of Shareholders)
① Unless otherwise provided in relevant laws and regulations, the General Meeting of Shareholders shall be convened by the Representative Director of the Company with a resolution of the Board of Directors.
② If the Representative Director is absent or unable to execute his/her duties, the provisions of Article 39(2) shall apply mutatis mutandis.Article 23 (Personal and Public Notice of Convening a General Meeting of Shareholder)
① In convening a General Meeting of Shareholders, the Company shall give notice in writing or electronically to each shareholder of the date, time and place of the meeting and the list of agenda to be dealt with at the meeting, at least two weeks prior to the date set for such meeting.
② For shareholders holding 1/100 or less of the total number of issued and outstanding shares with voting rights, the Company may insert tice or more in Maeil Business Newspaper and Joongang Ilbo Newspaper currently being issued in Seoul, or a public notice of its intention to convene such a meeting and the list of agenda to be dealt with at the meeting, in lieu of giving such notice mentioned in Paragraph (1) above.Article 24 (Place of Convening the General Meeting of Shareholders) The General Meeting of Shareholders shall be held in the place where the head office of the Company is located and may be held in any other place adjacent to it, as necessary.
Article 25 (Chairman) ① The Company’s Representative Director shall preside at all the General Meeting of Shareholders as a chairman.
② The provision of Article 39(2) shall apply mutatis mutandis, if the Representative Director is absent or unable to serve as presiding officer.Article 26 (Chairman’s Authority to Maintain Order) ① The chairman of a General Meeting of Shareholders may stop a person who significantly disturbs order in such a meeting from speaking or may order such a person out of the meeting. ② The chairman of a General Meeting of Shareholders may limit the duration and/or the number of times of speech by each shareholder, whenever the chairman deems it necessary for smooth proceedings of the meeting.
Article 27 (Shareholders’ Voting Rights) Each shareholder shall have one vote for each share he/she owns.
Article 28 (Limitation on the Voting Rights of Cross-Held Shares) If the Company, its parent company and subsidiaries or a subsidiary of the Company owns more than 1/10 share of a third company, then the shares of the Company held by that third company shall have no voting rights.
Article 29 (Split Exercise of Voting Rights) ① If a shareholder having more than two votes wishes to split his/her votes at a General Meeting of Shareholders, the said shareholder shall give the Company notice in writing of his/her intention to do so and the reason therefor at least three days prior to the date set for such a meeting. ② The Company may refuse to allow a shareholder to split his/her votes, unless the said shareholder has shares in trust or hold shares on behalf of a third party.
Article 30 (Exercise of Votes by Proxy) ① Each shareholder may exercise his/her vote by proxy.
② In such a case, the proxy shall present to the Company an appropriate document (a power of attorney) evidencing his/her power of representation prior to opening of that meeting.Article 31 (Method of Adopting Resolutions at General Meeting of Shareholders) Unless otherwise provided in the relevant laws and regulations, all resolutions of a General Meeting of Shareholders shall be passed by the affirmative votes of a majority of the shares represented by the shareholders present at the General Meeting of Shareholders, which shall not be less than a quarter of the total number of issued and outstanding shares of the Company.
Article 32 (Minutes of the General Meeting of Shareholders) The proceedings and results of a General Meeting of Shareholders shall be recorded in minutes, which shall be kept in the head office and branches of the Company after the chairman and all directors present at the meeting have signed and sealed the same or affixed their signatures thereto.
- Chapter 5 Directors, Board of Directors and Meetings
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Article 33 (Number of Directors)
①The Company shall have not less than three directors, and the number of outside directors shall not be less than a quarter of the total number of directors; provided, however, that if the total assets of the Company is two trillion Korean won or more as at the end of its most recent fist year, the Company shall have three or more outside directors and shall be the majority of the total number of directors in office.
② In case where the number of outside directors does not meet the quorum required for the establishment of the Board of Directors under Paragraph (1) due to any cause such as resignation or death of any outside director, the Company shall appoint outside directors at the first General Meeting of Shareholders convened after such cause has occurred.Article 34 (Election of Directors)
① Directors shall be elected at a General Meeting of Shareholders.
② A resolution for electing directors shall be passed by the affirmative votes of a majority of the shares represented by the shareholders present at the General Meeting of Shareholders, which shall not be less than a quarter of the total number of issued and outstanding shares.
③ In case two directors or more are elected at a General Meeting of Shareholders, the cumulative voting stipulated in Article 382-2 of the Commercial Act.Article 35 (Recommendation of Candidates for the Outside Directors)
① The committee for recommending candidates for outside directors shall recommend candidates for outside director among those persons having such qualifications as set forth in the relevant laws and regulations, such as the Commercial Act.
② The details concerning recommendations of candidates for outside directors and screening of their qualifications shall be determined by the committee for recommending candidates for outside directors.Article 36 (Term of Office) The term of office of directors shall be three years; provided, however, that such term of office shall be extended until the close of the annual General Meeting of Shareholders convened in respect of the last period for the settlement of accounts comprised in their term of office if their term of office expires after the end of the said last period for the settlement of accounts but before the close of the said meeting.
Article 37 (Election to Fill Vacancies)
① If there is a vacancy in the number of directors, a director shall be elected at a General Meeting of Shareholders to fill such a vacancy; provided however, that the foregoing provision shall not apply if the number of the existing directors in office is not less than the number of directors provided in Article 33 hereof and no hindrance is caused in carrying on the Company’s businesses. ② If, as a result of resignation or death of an outside director, there is a vacancy in the number of directors as provided in Article 33 hereof, the requirements concerning such a vacancy shall be met at the first General Meeting of Shareholders convened after such a cause of vacancy has occurred.Article 38 (Appointment of Representative Director) The Company may appoint one or more representative director by a resolution of the Board of Directors.
Article 39 (Duties of Directors)
① The Representative Director shall represent the Company and direct the Company’s overall businesses.
② Executive vice presidents, senior executive directors and executive directors, etc. shall assist the Representative Director and take charge of the Company’s businesses as determined by the Board of Directors, and when the Representative Directors is absent or unable to perform his/her duties, shall act as the Representative Director in accordance with the order set forth by the Board of Directors.Article 40 (Directors’ Obligation to Report)
① The directors shall report the status of executing his/her duties to the Board of Directors at least once in every three months.
② If a director discovers any fact that may cause material loss to the Company, he/she shall immediately report such to the audit committee.Article 41 (Mitigating the Directors’ Liabilities Against the Company)
① By the resolution at a General Meeting of Shareholders, the Company may exempt a director from liability, as stipulated in Article 399 of the Commercial Act, for amounts in excess of six times (three times for outside directors) the remuneration (including bonuses and gains from the exercise of stock options, etc.) for the year immediately preceding the date of the acts leading to such liability.
② The above Paragraph (1) shall not apply in case the director caused losses intentionally or by gross negligence or violated Articles 397 (Prohibition of Competition), 397-2 (Prohibition of Appropriation of Company’s Opportunities and Assets) and 398 (Transactions between Directors and Company) of the Commercial Act.Article 42 (Composition of Board of Directors and Convening of the Meetings)
① The Board of Directors shall be composed of the directors and make important decisions on the Company’s businesses.
② Each director shall convene the meeting of the Board of Directors, unless the Board of Directors has determined a specific director for such.
③ The director convening a meeting of the Board of Directors shall give notice to each director and auditor five days prior to the date set for such meeting; provided, however, that if all directors and auditor(s) unanimously consented to holding a meeting of the Board of Directors, the procedure of convening a meeting may be omitted.
④ The chairman of the Board of Directors shall be determined by the Board of Directors. Provided, in case the Board of Directors has determined a director to convene the meeting of the Board of Directors pursuant to the proviso of Paragraph (2), such a director shall be the chairman.Article 43 (Method of Adopting Resolutions)
① A quorum for holding a meeting of the Board of Directors shall be a majority of all directors in office and all resolutions of the Board of Directors shall be adopted by the affirmative votes of a majority of directors present at the meeting; provided, however, that the resolutions of the Board of Directors related to Article 397-2 (Prohibition of Appropriation of Company’s Opportunities and Assets) and Article 398 (Transactions between Directors and Company) of the Commercial Act shall be adopted by the affirmative votes of more than 2/3 of the directors.
② The Board of Directors may allow all or part of the directors to participate in resolutions of the Board of Directors through the means of communication transmitting and receiving voices simultaneously, in lieu of attending such a meeting in person. In such a case, such director(s) shall be deemed to have attended such a meeting in person.
③ No directors having a specific interest in any resolution of the Board of Directors shall be allowed to exercise their vote upon such a resolution.Article 44 (Minutes of Meeting of the Board of Directors)
① The Board of Directors shall record the meeting of the Board of Directors.
② The minutes shall include the agenda, procedure and results of the proceedings of the meeting, names of the directors against each resolution and the reason for their objection thereto and all directors and auditor(s) present at the meeting shall sign and seal the same or affix their signatures thereto.Article 45 (Committees) ① The Company shall establish the following committees in the Board of Directors:
- 1. Committee for Recommending Candidates for Outside Directors
- 2. Audit Committee
- 3. Transparent Management Committee
② The details concerning the composition, power and operation of each of such committees shall be determined by resolutions of the Board of Directors.
③ The provisions of Articles 42, 43 and 44 hereto shall apply mutatis mutandis to the committees.Article 46 (Directors’ Remunerations and Retirement Allowances) ① Directors’ remuneration shall be determined by a resolution at a General Meeting of Shareholders.
② The retirement allowances of the directors shall be paid pursuant to the Company’s regulation on retirement allowances for officers, which shall have been duly approved by a resolution at a General Meeting of Shareholders.Article 47 (Consultants and Advisors) The Company may appoint consultants and advisors.
- Chapter 6 Audit Committee
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Article 48 (Composition of Audit Committee)
① The Company shall establish an audit committee pursuant to Article 45 hereof, in lieu of auditor(s).
② The audit committee shall be composed of three or more directors.
③ 2/3 or more of the total number of audit committee members shall be outside directors. An audit committee member who is not an outside director shall meet the qualifications set forth in Article 542-10(2) of the Commercial Act.
④ Any shareholder having more than 3/100 of the total number of issued and outstanding shares with voting rights cannot exercise his/her voting rights in excess of such 3/100 in electing any audit committee member who is not an outside director.
⑤ In electing the audit committee members, none of whom is an outside director, if the aggregate total number of shares held by the largest shareholder who will exercise his/her voting rights and his/her related persons, those who possess shares for account of the largest shareholder or his/her related persons and those to whom the largest shareholder or his/her related person have delegated their votes exceeds 3/100 of the total number of issued and outstanding shares with voting rights, such shareholders may not exercise their voting rights with respect to the shares in excess of such 3/100.
⑥ The audit committee shall appoint a person who will represent the audit committee by a resolution, and in such a case, the chairman shall be an outside director.
⑦ Where the number of outside directors fails to meet the quorum required for the establishment of an audit committee set forth in this Article due to any cause such as resignation or death of any outside director as member of the audit committee, the Company shall ensure that the requirements are met at the first General Meeting of Shareholders convened after such cause has occurred.
Article 49 (Duties of Audit Committee) ① The audit committee shall audit the Company’s accountings and general operations.
② The audit committee may request the Board of Directors to convene a meeting of the Board of Directors by submitting a written request to a director (or a person who has the authority to convene the meeting as applicable), stating the agenda to be deal with at the meeting of the Board of Directors and the reason for convening such a meeting.
③ If the director fails to immediately convene a meeting in lieu of the provision of Paragraph (2) above, the audit committee who requested the meeting may convene the meeting of the Board of Directors.
④ The audit committee may request to convene a extraordinary General Meeting of Shareholders by submitting a written request to the Board of Directors, stating the business to be dealt with at the proposed meeting and the reason for convening such a meeting.
⑤ The audit committee may request the Company’s subsidiary(s) to make a report on its operations, if the audit committee deem it necessary to perform its duties. In such a case, if the subsidiary(s) fails to immediately make such a report made by the subsidiary(s), the audit committee shall have the right to inspect that subsidiary’s operations and status of assets.
⑥ The audit committee shall elect an independent auditor of the Company.
⑧ The audit committee shall deal with the matters delegated to it by the Board of Directors, in addition to the matters in Paragraph (1) through (6).
⑨ The audit committee may request expert’s assistance at the cost of the Company.Article 50 (Minutes of the Audit Committee Meetings) The audit committee shall prepare minutes of audit with respect to the audit conducted by him/her. The minutes of audit shall be signed and sealed by, or shall bear the signatures of, the auditor(s) who has conducted such audit.
- Chapter 7 Accounting
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Article 51 (Fiscal Year) The fiscal year of the Company shall commence on January 1 and end on December 31 of each year.
Article 52 (Preparation and Maintenance of Financial Statements and Business Reports)
① The Representative Director of the Company shall prepare and submit to auditor(s) for audit the following documents and their supplementary schedules together with a business report, six weeks prior to the date set for the annual General Meeting of Shareholders convened for the fiscal year to which such documents are related to, and upon auditors’ audit, shall submit the aforementioned documents and the business report to the annual General Meeting of Shareholders:- 1. Balance Sheet
- 2. Income Statement
- 3. Other documents stipulated in the Enforcement Decree of the Commercial Act indicating the Company’s financial status and performance.
② In case the Company falls under the category subjected to completing the consolidated financial statement under the Enforcement Decree of the Commercial Act, the consolidated financial sheets shall be included in each documents referred to in Paragraph (1).
③ The audit committee shall submit an auditor’s report to the Representative Director at least by on week prior to the date set for such annual General Meeting of Shareholders.
④ The Representative Director shall maintain the documents referred to in Paragraph (1) above and the auditor’s report in the head office of the Company for five years and their copies in the branch offices of the Company for three years, respectively, starting from one week prior to the date set for the annual General Meeting of Shareholders.
⑤ Upon approval at the annual General Meeting of Shareholders with respect to the documents referred to in Paragraph (1) above, the Representative Director shall promptly give public notice of the Company’s balance sheet and independent auditor’s report..Article 53 (Appointment of Independent Auditor) The Company shall appoint an independent auditor with approval of the independent auditor appointment committee under the Act on External Audit of Stock Companies and shall report the appointment to the annual General Meeting of Shareholders to be convened following such appointment, notify the shareholders or make a public notification pursuant to the Enforcement Decree of the Act on External Audit of Stock Companies.
Article 54 (Disposition of Profits) The Company shall dispose of the unappropriated retained earnings of each fiscal year as following:
- 1. Legal reserves
- 2. Other statutory reserves
- 3. Dividends
- 4. Voluntary reserves
- 5. Other appropriations of retained earnings
Article 55 (Dividends)
① Dividends may be paid in cash, shares or other types of assets.
② Dividends referred to in Paragraph (1) above shall be paid to the shareholders or pledgees whose names appear or are duly registered in the list of shareholders as of the end of each fiscal year.Article 56 (Interim Dividends)
① The Company may determine a specific date by a resolution of the Board of Directors, but no more than once each business year, to pay interim dividends in cash (hereinafter referred to as “Interim Dividends”) to the shareholders.
② The Interim Dividends shall be paid within the limit of not exceeding the amount of the net worth shown on the balance sheet as of the end of the immediately preceding period for the settlement of accounts less the following items:- 1. The amount of capital, as of the end of the immediately preceding period for the settlement of accounts;
- 2. The aggregate sum of the capital reserves and legal reserves appropriated up to the immediately preceding period for the settlement of accounts;
- 3. The unrealized gross profit amount as specified in the Enforcement Decree of the Commercial Act;
- 4. The amount appropriated for dividends by a resolution adopted at the annual General Meeting of Shareholders convened for the immediately preceding period for the settlement of accounts;
- 5. The amount of voluntary reserve appropriated for specific purposes in accordance with the provisions of Articles of Incorporation or by a resolution at the General Meeting of Shareholders up to the immediately preceding period for the settlement of accounts; and
- 6. The amount of legal reserves to be appropriated for the current period for the settlement of accounts, as a result of such Interim Dividends.
③ If any new shares have been issued prior to the respective dates specified by the resolution of the Board of Directors and pursuant to Paragraph (1) above following the commencement date of the current fiscal year (including as a result of capitalization of reserves, stock dividends, requests for conversion of convertible bonds to the capital stock and the exercise of warrant with respect to bonds wit warrant), such new shares shall be deemed to have been issued at the end of the immediately preceding fiscal year with respect to the Interim Dividends hereunder.
Article 57 (Statutes of Limitations to the Claim for Dividends) ① If a claim for dividends has not been exercised for five years, the statute of limitation applicable thereto shall have expire.
② The dividends with respect to which the statute of limitation has expired pursuant to Paragraph (1) shall become vested in the Company. - Chapter 8 Addendum
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Article 1 (Effective Date) These Articles of Incorporation shall come into effect on the date of the Company’s establishment.
Article 2 (Special Regulation Regarding the Fiscal Year) Notwithstanding Article 51, the first fiscal year of the Company shall be calculated from the date of the Company’s establishment to December 31, 2014.
Article 3 (Special Regulations Regarding the Directors’ Remunerations) Notwithstanding Article 46, the directors’ remuneration on the first fiscal year shall be pursuant to the terms of the Spinoff Plan approved at the General Meeting of Shareholders of Mando Corporation prior to the Company’s spinoff on July 28, 2014. 3
Article 4 (Revised Effective Date) These Articles of Incorporation shall take effect on March 20, 2015.
Article 5 (Revised Effective Date) These Articles of Incorporation shall take effect on March 18, 2016.
Article 6 (Revised Effective Date) These Articles of Incorporation shall take effect on March 30, 2018.
Article 7 (Revised Effective date) These Articles of Incorporation shall take effect on March 22, 2019. Provided, the amendments of Articles 9, 13~20 shall take effect from the effective date of Enforcement Decree of the Act on Electronic Registration of Stocks and Bonds.
Article 8 (Revised Effective Date) These Articles of Incorporation shall take effect on March 20, 2015.
Corporate Governance Charter
Preamble
The goal of Mando Corporation is to become a global leader by proactively responding to the rapidly changing automotive industry and create a new customer value through continuous efforts and innovation. Additionally, we will contribute to improving the sustainability of the company and society by diverse and active ESG improvement activities.
This corporate governance charter is enacted under the belief that establishing a healthy corporate governance is the foundation in securing the trust of all stakeholders and to conduct sincere management activities as a global leader.
Mando Corporation will become a company that creates a sustainable future by implementing transparent and responsible management and by exerting efforts for the promotion of balanced rights and interest of the stakeholders, including shareholders, customers, employees and partner companies under the supervision of professional and independent board of directors pursuant to this corporate governance charter.
letterpress
- Ⅰ. Shareholders
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1.1 Rights of Shareholders
- ① Shareholders shall have the following basic rights guaranteed by the relevant laws, including the Commercial Act, etc., as the owner of Mando Corporation (hereinafter referred to as the “Company”):
- - Right to participate in distribution of profits
- - Right to attend the general meeting of shareholders and the right to vote
- - Right to receive information on a regular and timely manner
- ② The following matters that cause fundamental changes in the Company’s existence and shareholder rights shall be decided at the general meeting of shareholders under the principle of protecting the utmost rights of the shareholders:
- - Modification of the Articles of Incorporation;
- - Merger, business transfer and spin-off;
- - Dissolution;
- - Reduction of capital; and
- - Comprehensive exchange and transfer of shares, etc.
- ③ The shareholders’ rights shall be exercised conveniently according to the free will of the shareholders. The Company shall provide the information related to the date, location and agenda, etc. of the general meeting of shareholders with sufficient time for the shareholders to exercise their rights conveniently.
1.2 Equitable Treatment of Shareholders
- ① Each shareholder shall have 1 vote for 1 share; provided, however, restrictions on voting rights of certain shareholders may be imposed strictly according to the relevant laws.
- ② The Company shall provide information necessary for the shareholders in a timely and easily accessible manner. Moreover, the information for which the Company has no obligation to disclose shall be made available to all shareholders equally.
- ③ The Company shall protect the shareholders from unfair internal transactions and self-dealings of other shareholders.
1.3 Responsibilities of Shareholders
- ① Shareholders shall exercise their voting rights proactively for the development and interest of the Company.
- ② The controlling shareholder shall act in the best interest of the Company and all shareholders, and shall not inflict losses to the Company and other shareholders by acting in ways that violate this principle.
- ① Shareholders shall have the following basic rights guaranteed by the relevant laws, including the Commercial Act, etc., as the owner of Mando Corporation (hereinafter referred to as the “Company”):
- Ⅱ. Board of Directors
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2.1 Roles of the Board of Directors.
- ① The board of directors, as an organization having a comprehensive responsibility and authority on the management of the Company permitted by the relevant laws, shall perform the function of approving the management strategies, management goals and business plan for the benefit of the Company and the shareholders and to supervise the implementation thereof.
- ② The board of directors perform the following roles:
- - Resolution on important matters related to the Company’s management strategies and work progress;
- - Supervising the execution of duties of the directors and executives; and
- - Resolution of other matters stipulated in laws, Articles of Incorporation and the board of directors rules.
- ③ The board of directors may delegate the authority to the representative director or a committee, except for the important matters stipulated by laws, Articles of Incorporation or the board of directors rules.
2.2 Composition and Management of the Board of Directors
- ① The Company shall have three of more directors to allow diversity of opinions and efficient decision making, and the directors shall be elected at the general meeting of shareholders. Provided, majority of the directors shall be outside directors recommended by the outside director nominating committee in order for the board of directors to perform independent and practical management supervision function.
- ② The board of directors shall elect a chairman of the board of directors at the first board of directors meeting after the ordinary general meeting of shareholders. The chairman of the board of directors shall convene and preside over the board of directors meetings and ensure that the roles of the board of directors to be efficiently performed in all aspects.
- ③ The board of directors meetings shall be held on a regular basis, and extraordinary meetings may be held for urgent agendas. The board of directors rules that specifically stipulate the authority, responsibilities and management procedures of the board of directors shall be established and managed for a smooth operation of the board of directors.
2.3 Qualification and Independence of the Directors
- ① Directors shall qualify the stipulations of relevant laws, have the best ethics, professionalism and honesty and shall be able to represent the rights and interests of all shareholders and stakeholders.
- ② Directors shall dedicate sufficient time to perform his/her duties and shall have strategic mindset, realistic knowledge, mature judgment and strong sense of responsibility.
- ③ Directors shall not be discriminated based on gender, age, nationality, race, religion, educational level, and disability, etc., and shall contribute to improving the corporate value and the rights and interests of shareholders.
- ④ Outside directors shall have rich expertise and professional experience on finance, economy, management, law, accounting, etc., and be able to make independent decision, without material interest with the Company.
2.4 Election of Directors and Recommendation of Candidates
- ① Directors of the Company shall be elected at the general meeting of shareholders through recommendation of the board of directors.
- ② Outside directors shall be elected at the general meeting of shareholders through a recommendation by the outside director nominating committee. The outside director nominating committee shall compose majority outside directors in order to elect people with professional expertise and responsibility who can contribute to the management of the Company.
- ③ The Company shall exert efforts to improve the diversity of the board of directors in order to respond flexibly to the changing management environment based on diverse perspective and experience.
2.5 Roles of the Outside Directors
- ① Outside directors shall participate independently on the important decision-making of the Company through participating in the board of directors and supervise and support the management as a member of the board of directors.
- ② Outside directors may request to be provided with information necessary to perform his/her duties. Moreover, he/she may obtain advise from external professional through a proper procedure, when necessary, and the Company shall support the expenses.
- ③ The Company shall regularly report or provide the management information, including the status of work execution of the Company, in order for the outside directors to timely and accurately understand the management status of the Company and shall prepare and operate continuous education and training program for the outside directors.
2.6 Responsibilities of the Directors
- ① Directors shall perform his/her duties for the interest of the Company and shareholders with fiduciary duty and good faith, and shall not disclose the information obtained from his/her duty as a director for his/her own interest or for the benefit of a third party.
- ② Directors shall be liable to the Company for violating laws or Articles of Incorporation or for negligence of his/her duties, and when a director neglects his/her duties intentionally or through gross negligence, such a director shall be jointly liable to a third party for the loss. However, the directors’ management decision must be fully respected if the director performed his/her duties under the belief that the decision was for the best interest of the Company through reasonable determination.
- ③ The Company shall subscribe to a directors and officers insurance, at the cost of the Company, in order to reduce the burden of the directors on his/her responsibilities and to obtain talented directors.
2.7 Committees Under the Board of Directors
- ① The board of directors may establish and operate committees under the board of directors for professional work implementation and to increase efficiency in its management.
- ② The board of directors shall operate audit committee, outside director nominating committee and transparent management committee under the board of directors, and may establish temporary committees, when necessary. Composition and operations, etc. of the committees shall be stipulated in the rules of each committee separately established.
- ③ The committee shall report to the board of directors on the resolved matters, and the board of directors may re-resolve on matters already resolved by the committee.
2.8 Transparent Management Committee
- ① The purpose of the transparent management committee is to review the protection of the shareholders’ rights and interests, transparency in internal transactions and implementation of ethical management, etc., and resolves or reviews the following matters:
- - Matters for Resolution
- ∙ Large-scale internal trading stipulated in the Monopoly Regulation and Fair Trade Act
- ∙ Transaction with the controlling shareholder stipulated in Article 542-9(3) of the Commercial Act
- ∙ Important policies related to ethical management and social contribution
- ∙ Establishment and amendment of ethics regulations, including code ethics, etc.
- - Matters for Review
- ∙ Transaction between directors and the Company
- ∙ Important matters related to protecting the shareholders’ rights and interests, etc.
- - Matters for Resolution
- ② Transparent management committee shall review the important management matters related to the protection of the shareholders’ rights and interests, including acquisition and disposition of important assets and shares, etc., shareholder return policy and other matters deemed important by the committee.
- ③ Transparent management committee shall be composed only of outside directors to improve the independence and transparency, and the Company shall provide all information and expenses necessary for the activities of the committee, as well as operating continuous education and training programs to improve the expertise.
- ④ Transparent management committee shall meet on a semi-annual basis, and as necessary, and shall report the result of the meeting to the board of directors. Also, the details of the annual activities shall be accessible by all shareholders through various channels, including the general meeting of shareholders and sustainability report, etc.
- Ⅲ. Audit Institution
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3.1 Audit Committee
- ① The audit committee shall be composed of 3 or more directors, be elected at the general meeting of shareholders and shall include one or more expert in accounting or finance. Also, 2/3 or more of the members shall be outside directors in order to perform independent and transparent audit duties.
- ② The audit committee shall perform the following roles:
- - Legality of the business activities of the directors and the management
- - Review the soundness and reasonableness of the corporate financial activities and the accuracy of the financial reports
- - Selection, change or dismissal of the external auditor and reporting to the general meeting of shareholders and
- - Other matters stipulated in relevant laws, Articles of Incorporation, rules on the operation of the audit committee.
- ③ The audit board of directors may access or copy the ledger records and documents related to accounting at any time, and may request a report on the business for the director or investigate the Company’s business and asset status.
3.2 External Auditor
- ① External auditor shall fairly perform the audit duties independently from the Company, management and specific shareholders, etc.
- ② External auditor shall be selected by the audit committee, and shall report to the audit committee on important matters confirmed during the external audit activities.
- ③ External auditor shall attend the general meeting of shareholders and answer any questions of the shareholders related to the audit report.
- Ⅳ. Stakeholders
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- ① The Company shall fully implement the corporate social responsibility under the belief that diligently resolving the matters of interest by all interested parties, including the customers, employees, partner companies, community, etc., contributes to improving the shareholder value in the long-term.
- ② The Company shall exert best efforts to fully protect the rights and interests of the stakeholders under the laws or contracts.
- ③ The Company shall provide the information necessary to protect the rights and interests of the stakeholders permitted by the laws, and support the stakeholders’ access to the relevant information.
- Ⅴ. Disclosure
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- ① The Company shall regularly prepare and disclose the business report, quarterly report and semi-annual reports, etc., and shall disclose the corporate information to the shareholders and the stakeholders diligently, quickly and honestly.
- ② Other legal obligations and important matters, in addition to the regular disclosures, shall be disclosed accurately and in detail, without delay.
- ③ The Company shall not preferentially treat specific person(s) or discriminate in the scope or the time of disclosing important corporate information, and shall disclose so that all stakeholders can access at the same time.
Distinction with the Best Practices
Recommendations from the Best Practices | Whether adopted |
Notes |
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Introduction of the Corporate Governance Charter | Post on the website | |
Introduction of the Employee Code of Ethics | ||
Introduction of Cumulative Voting | Remove from the Articles of Incorporation | |
Composition of the Board of Directors (Majority Outside Directors) | 3 Inside Directors, 4 Outside Directors | |
Disclosure of the Board of Directors Activities, Attendance Rate and Major Agendas | ||
Composition of Outside Director Nominating Committee | 1 Inside Director, 2 Outside Directors | |
Composition of Audit Committee (All Outside Directors) | Composed of 3 Outside Directors | |
Composition of Remuneration Committee | Maximum director’s remuneration is a matter to be resolved at the general meeting of shareholders | |
Disclosure of Status and Roles of the Composition of the Committees Under the Board of Directors and the Details of the Activities | ||
Introduction of Rules on the Operations and Roles of the Board of Directors and the Committee | ||
Subscription to Liability Insurance for the Directors | Subscription at the cost of the Company | |
Maintain Independence of External Auditor | ||
Disclosure of Corporate Governance Evaluation Grade | Post on the website | |
Explain the Difference with the Best Practices | Post on the website | |
Certification on Accuracy and Completeness of the Financial Reports by the Representative Director and CFO |