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Articles of Association

THE KOREAN RESEARCH-BASED
PHARMACEUTICAL INDUSTRY ASSOCIATION
ARTICLES OF ASSOCIATION

[Amended on November 23, 2005, Approved by MOHW on May 11, 2006]

[Amended on January 22, 2010, Approved by MIHWF on February 8, 2010]

[Amended on June 1, 2010, Approved by MIHWF on June 25, 2010]

CHAPTER 1. GENERAL PROVISIONS
  • Article 1. (Purposes)
    The purposes of the Association shall be as follows:
    1. (1)Promote the development of new pharmaceuticals;
    2. (2)Enhance the ethical standards of the pharmaceutical industry;
    3. (3)Strengthen the pharmaceutical industry's contribution to the advancement of public health; and
    4. (4)Effectively disseminate pharmaceutical-related information.
  • Article 2. (Name of the Association)
    The name of the Association shall be the Korean Research Based Pharmaceutical Industry Association
  • Article 3. (Nature of the Association)
    The Association shall be a social non profit organization organized under the laws of the Republic of Korea.
  • Article 4. (Location)
    The Association shall maintain its office at 6th Floor, Hwanghwa Building, 823-7, Yeoksam-dong, Gangnam-gu, Seoul, Korea and may establish branch office(s) at the special city, metropolitan cities and each province upon approval from the Board of Directors. [Amended on January 22, 2010]
  • Article 5. (Business Activities)
    The activities of the Association shall be to:
    1. (1) Investigate and compile statistical and other information on multinational pharmaceutical industries within and outside of Korea;
    2. (2) Consult with industry members on the development and application of new pharmaceuticals;
    3. (3) Coordinate and promote technological cooperation with respect to new pharmaceuticals;
    4. (4) Assist the government in establishing and implementing government’s policies and deregulation measures regarding the pharmaceutical industry;
    5. (5) Work with other international organizations with goals similar to those of the Association;
    6. (6) Affiliate or co operate with medical organizations with goals similar to those of the Association or with other organizations involved in pharmaceutical scientific research;
    7. (7) Establish and promote ethical business practices for the pharmaceutical industry;
    8. (8) Perform any other activities incidental and conducive to the goals of the Association; and
  • Article 6. (Provision of Benefits)
    The benefits to be provided through the business activities of the Association shall be provided free of charge, provided, however, that the beneficiaries may bear the actual costs and expenses.
  • Article 7. (Benefits To Be Provided through Non-Profit Business Activities and Non-Discrimination)
    With respect to the benefits to be provided through the non-profit business activities of the Association, it shall not discriminate against a beneficiary by reason of his birth place, alma mater, occupation or other social position except for cases where such benefits are restricted to specific proposes.
CHAPTER 2. MEMBERSHIP
  • Article 8. (Classification and Qualifications of Members)
    Members of the Association shall be classified as follows:
    1. (1) Individual Members: Any person over the age of twenty (20) who endorses the purposes of the Association and is engaged in the business of pharmaceutical research, manufacture or distribution may apply for membership in the Association and shall become an individual member of the Association upon the acceptance of his or her application by the Association's Board of Directors and the payment of his/her entrance fees and annual dues.
    2. (2) Corporate Members: Any company or organization which endorses the purposes of the Association and is engaged in the business of pharmaceutical research, manufacture or distribution may apply for membership in the Association and shall become a corporate member of the Association upon the acceptance of the application by the Association's Board of Directors and the payment of its entrance fees and annual dues and Corporate Members shall be represented by Representatives. Corporate Members shall be further classified as follows and Corporate Members shall refer to both Regular Corporate Members and Associate Corporate Members herein, unless expressly stated otherwise:
    3. A. Regular Corporate Members: Corporate Members who directly or indirectly via their parent company engage in the business of pharmaceutical manufacture;
    4. B. Associate Corporate Members: Corporate Members other than Regular Corporate Member [Amended on January 22, 2010]
    5. (3) Honorary Members: The Board of Directors may recognize any person who has made a special contribution to the industry or who has retired after at least ten (10) years of active service in the industry, with an honorary membership in the Association; provided however, that the duration of such honorary membership shall not exceed the term of the Board of Directors responsible for approval of such Honorary Member.
  • Article 9. (Capacity of Members)
    1. 1. Individual Members shall have one vote and may be elected to any office.
    2. 2. Regular Corporate Members out of Corporate Members shall have one vote; if a Regular Corporate Member has more than one Representative, one Representative shall be designated to vote on behalf of such Regular Corporate Member (the "Voting Representative"). Representative of Regular Corporate Members may be elected to any office. [Amended on January 22, 2010]
    3. 3. Honorary Members shall not be entitled to vote and shall not be elected to any office
  • Article 10. (Obligations of Members)
    Members shall abide by these Articles of Association, comply with the resolutions of the Association, and, as applicable, promptly pay membership dues.
  • Article 11. (Method To Become A Member)
    All applicants for membership shall complete an application form for consideration by the Association. The Board of Directors shall have sole discretion to accept or reject any application.
  • Article 12. (Register of Members)
    The Association shall keep a Register of Members and shall enter therein the following particulars:
    1. (1) The name and address of each Member;
    2. (2) The name of each Representative and Voting Representative; and
    3. (3) The name of any person appointed as proxy by a Member pursuant to Article 28. [Amended on November 23, 2005]
  • Article 13. (Withdrawal from Membership)
    1. 1. A Member may resign from the Association upon submission of written notice to the Association stating the reason for the resignation and the effective date thereof.
    2. 2. No fees or dues shall be refunded to resigning Members.
  • Article 14. (Disciplinary Measures Regarding Members, etc.)
    1. 1. The Board of Directors may issue warnings to, or suspend the privileges of, any Member or Representative who violates any applicable laws or regulations, or who fails to act in compliance with Resolutions of the General Assembly.
    2. 2. Suspended Members may appeal to the Board of Directors for a vote of reinstatement at the annual General Assembly. The Board of Directors will grant all requests for votes of reinstatement.
    3. 3. The Association may, upon the approval by two thirds (2/3) or more of the membership at a General Assembly Meeting where at least one half (1/2) of the membership is present, dismiss a Member from the Association if the Member's violation or non compliance is considered gravely detrimental to the rights and interests of the Association.
    4. 4. No fees and dues shall be refunded to suspended or dismissed Members.
CHAPTER 3. OFFICERS
  • Article 15. (Numbers of Directors and Auditors and Term of Offices)
    1. 1. The Association shall have the following officers:
      1. (1) One (1) Chairman
      2. (2) Three (3) Vice Chairmen [Amended on June 1, 2010]
      3. (3) Eight (8) or more but fifteen (15) or less Directors (including 1 Chairman and 3 Vice Chairmen) [Amended on November 23, 2005] [Amended on June 1, 2010]
      4. (4) Two (2) Auditors
    2. 2. The term of offices of Directors shall be three (3) years and the term of offices of Auditors shall be two (2) years.
    3. 3. In case terms of Directors or Auditors of the Association expire without new Directors or Auditors being elected due to delay in convening a General Assembly of the Association, the Directors and Auditors whose terms have been terminated shall continue to bear rights and responsibilities as Directors and Auditors until new Directors and Auditors are elected.
    4. 4. The Directors shall constitute the Board of Directors and Directors may be re elected.
  • Article 16. (Election of Officers)
    Directors and Auditors shall be elected by a simple majority vote of membership at a General Assembly Meeting where at least one half (1/2) of the membership is present. However, if the office of a Director is vacant, the Board of Directors may elect a Director to fill such vacancy and the term of office of such Director shall be the remaining term of the vacant office of Director.
  • Article 17. (Non-Qualification as Officers)
    Anyone falling under one of the following categories may not be elected as a Director nor an Auditor of the Association:
    1. (1) A minor;
    2. (2) An incompetent or quasi-incompetent person;
    3. (3) A person who has not been reinstated after declaration of bankruptcy;
    4. (4) A person who had been sentenced to imprisonment or heavier punishment and such sentence had been fully served (including the case when such sentence is deemed to have been fully served) or three years have not passed since the date of exemption; or
    5. (5) A person whose sentence of imprisonment or heavier punishment had been declared suspended and is in the suspension period.
  • Article 18. (Election and Duties of Chairman and Term of Office of Chairman)
    1. 1. The Board of Directors shall elect one Chairman amongst from the Directors to represent the Association.
    2. 2. The Chairman may be re elected to such office for only one (1) additional term.
    3. 3. The Chairman shall represent the Association, preside over the General Assembly and Directors' meetings and supervise the affairs of the Association.
    4. 4. If the Chairman cannot carry out his or her duties for any reason, a Vice Chairman shall be designated by the Chairman to act on his or her behalf. In the absence of a designee by the Chairman, the Board of Directors shall elect the Vice Chairman to act on behalf of the Chairman.
    5. 5. The term of office of the Chairman shall be one (1) year.
  • Article 19. (Election of Vice Chairman)
    1. 1. The Board of Directors may elect three (3) Vice Chairmen from amongst the Directors. [Amended on June 1, 2010]
    2. 2. The Vice Chairman shall assist the Chairman, stand in for the Chairman during his or her absence and take over duties of the Chairman in case of his or her resignation until the end of his term.
    3. 3. The term of the Vice Chairman shall be one (1) year.
  • Article 20. (Duties of Directors)
    Directors shall attend meetings of the Board of Directors, make resolutions regarding activities of the Association, and perform such duties as are assigned to them by the Board of Directors or the Chairman.
  • Article 21. (Duties of Auditors)
    The Auditor shall carry out the following:
    1. (1) Audit the Association's financial status;
    2. (2) Audit the operation of the Board of Directors and the Directors' execution of their duties;
    3. (3) Report any and all irregularities found as a result of the inspections to the Board of Directors and the General Assembly and competent government authorities;
    4. (4) Convene a meeting of the Board of Directors and the General Assembly, if necessary, to report any irregularities found as a result of the inspections; and
    5. (5) Present, to the Chairman or at meetings of the Board of Directors and of the General Assembly, opinions on the financial status of the Association, operation and transactions of the Board of Directors and the General Assembly
  • Article 22. (Dismissal of Officers)
    A Director and an Auditor shall be promptly removed from office upon the occurrence of any of the following:
    1. (1) Dismissal from Membership under Article 14;
    2. (2) Acceptance by the Board of Directors of a resignation from Office or Membership;
    3. (3) Removal by the General Assembly; or
    4. (4) Suspension of Membership for more than one half (1/2) of his or her tenure.
  • Article 23. (Remuneration for Officers)
    Directors and Auditors shall hold their positions on a gratuitous basis. [Amended on November 23, 2005]
  • Article 24. (Full-time Vice Chairman and Employees)
    1. 1. The Chairman shall appoint one (1) full-time vice chairman, who is not a Director of the Association, upon an approval of the Board of Directors.
    2. 2. The Full-Time Vice Chairman, as CEO of the Association, shall oversee general operation of the Association under the direction of the Chairman. [Amended on June 1, 2010]
    3. 3. The Full-Time Vice Chairman shall appoint and dismiss a necessary number of employees, who shall handle the business of the Association in assistance of the Full-Time Vice Chairman. [Amended on June 1, 2010]
    4. 4. The Full-Time Vice Chairman may be removed by the Board of Directors. [Amended on June 1, 2010]
    5. 5. The Full-Time Vice Chairman shall be paid remunerations as determined by the Board of Directors. [Amended this Article on November 23, 2005] [Amended on June 1, 2010]
    6. 6. The Full-Time Vice Chairman shall prepare a monthly business plan, a monthly operation report and a quarterly budget forecast and report them to the Board of Directors. [Amended on June 1, 2010]
CHAPTER 4. GENERAL ASSEMBLY
  • Article 25. (Supreme Body of the Association)
    The General Assembly shall be the supreme voting body of the Association.
  • Article 26. (Matters To Be Resolved by the General Assembly)
    The General Assembly shall decide on the following:
    1. (1) Establish and amend the Articles of Association;
    2. (2) Elect and remove Directors and Auditors; [Amended on November 23, 2005]
    3. (3) Establish membership fees, annual dues and the terms of payment thereof;
    4. (4) Approve annual business plans and reports of operations and budget;
    5. (5) Approve year end financial statements and reports;
    6. (6) Determine reinstatement of suspended Members;
    7. (7) Determine dismissal of a Member;
    8. (8) Approve disposal of property;
    9. (9) Approve dissolution of the Association; and
    10. (10) Determine other important matters relevant to the rights and obligations of the Members.
  • Article 27. (Category and Convention of General Assembly Meeting)
    1. 1. General Assembly meetings shall be divided into general meetings and extraordinary meetings.
    2. 2. The General Assembly meetings shall be convened by the Chairman by resolution of the Board of Directors.
    3. 3. The Chairman shall give written notice of the date and place and agenda for the meeting to each Member at least fifteen (15) days in advance, provided, however, that, in the event of any emergency, notice of an extraordinary meeting may be given to each Member one (1) day in advance.
    4. 4. General meetings shall be held once per annum. Extraordinary meetings shall be held when deemed necessary by the Board of Directors or upon an application in writing made by more than one fifth (1/5) of the Members to the Board of Directors.
  • Article 28. (Proxies)
    In the event that a Member cannot attend a General Assembly meeting, he or she may appoint another Member to attend the meeting as a proxy. The proxy must present original written documentation of the proxy appointment to the full-time vice chairman prior to exercise of any delegated rights. Each Member may act as proxy for only one (1) other Member. [Amended on November 23, 2005]
  • Article 29. (Requirement for Resolution of General Assembly)
    1. 1. The General Assembly shall generally resolve matters by a simple majority vote subject to the presence of Members or proxies in excess of one half (1/2) of the Membership. Resolutions concerning any matters listed below shall require the approval by at least two thirds (2/3) of the General Assembly subject to the presence of Members or proxies in excess of one half (1/2) of the Membership:
      1. (1) Adoption and amendment of the Articles of Association;
      2. (2) Dismissal of Members;
      3. (3) Removal of Directors;
      4. (4) Disposal of property; and
      5. (5) Other important matters relevant to the rights and obligations of the Members.
    2. 2. A Resolution of Dissolution must be approved by three quarters (3/4) of the Members.
  • Article 30. (Written Resolution)
    Resolutions of the General Assembly may be made in writing, provided, however, that resolutions may not be so made with respect to matters which require the approval of the Ministry of Health and Welfare. [Amended on November 23, 2005]
  • Article 31. (Disqualification)
    Chairman or members may not exercise their voting rights, with respect to matters in which they have any interests, regarding inauguration and removal of the offices of Directors or Auditors and matters in which their interests are in conflict with those of the Association, when such matters accompany the giving and receiving of money or property.
CHAPTER 5. BOARD OF DIRECTORS
  • Article 32. (Duties of Board of Directors)
    The Board of Directors shall:
    1. (1) Determine matters relating to the calling of the General Assembly;
    2. (2) Establish and adopt the Association's By laws;
    3. (3) Represent the Association in dealing with third parties in accordance with these Articles of Association, resolutions of the General Assembly and resolutions of the Board of Directors;
    4. (4) Review membership qualifications;
    5. (5) Propose to the General Assembly the election and removal of a Director;
    6. (6) Election of the Chairman and Vice Chairmen;
    7. (7) Hire and dismiss employees;
    8. (8) Prepare annual business plans, reports of operation and budgets and year end financial statements and reports for submission to the General Assembly for approval; and
    9. (9) Handle any other matters which may arise in the day to day operation of the Association or which it may be assigned by the General Assembly.
  • Article 33. (Convention of Board of Directors Meeting)
    1. 1. The Board of Directors shall convene at least once every quarter. Special meetings shall be convened when deemed necessary by the Board of Directors. [Amended on November 23, 2005]
    2. 2. The Chairman shall give written notice to each Director at least seven (7) days in advance of any Board of Directors meeting, provided, however, that in the case of a special meeting, the notice may be given at least one (1) day in advance.
    3. 3. Except as specified in these Articles of Association, resolutions shall be adopted by simple majority subject to the presence of in excess of one half (1/2) of the Directors, provided, however, that matters regarding the amendment of the Articles of Association shall be adopted by the affirmative vote of at least two thirds of the Directors present.
    4. 4. The Board of Directors shall prepare a report which includes the type, time, place, agenda, minutes and decisions of the meeting. The report shall be kept by the Association.
  • Article 34. (Committee)
    The Association may establish offices, committees, and ad hoc committees and the organizational rules of which shall be formulated by the Board of Directors and approved by the General Assembly. Amendments to the organizational rules shall follow the same process.
CHAPTER 6. ASSET AND ACCOUNTING
  • Article 35. (Membership Fee)
    1. 1. Each member shall pay the entry fee and annual dues determined by the General Assembly.
    2. 2. The General Assembly shall determine the annual dues as to Corporate Members based on the annual sales of the previous year or global ranking.
  • Article 36. (Basic Assets)
    The basic assets of the Association shall be as indicated in the appendix.
  • Article 37. (Fiscal Year)
    The fiscal year of the Association shall coincide with the calendar year, beginning January 1st and ending December 31st each year.
  • Article 38. (Preparation and Approval of Business Plan, etc.)
    1. 1. One (1) month prior to the beginning of each fiscal year, the Board of Directors shall prepare an Operation Plan and a Budget of Receipts and Payments and obtain approval by the General Assembly subject to the resolution of the Board of Directors. [Amended on November 23, 2005]
    2. 2. Within two (2) months of the close of each fiscal year, the Full-Time Vice Chairman shall prepare a Report of Operations, Closing Report of Receipts and Payment, Cash Flow Statement, Balance Sheet, Property Inventory List and Statement of Receipts and Payments of the Fund. The said Report of Operations, Closing Report of Receipts and Payment, Cash Flow Statement, Balance Sheet, Property Inventory List and Statement of Receipts and Payments of the Fund shall be approved by the General Assembly subject to the resolution of the Board of Directors. [This Article amended on June 1, 2010]
  • Article 39. (Report on Business Performance and Business Plans, etc.)
    The Association shall submit to the competent authorities within two (2) months after the end of each fiscal year the following papers:
    1. (1) One copy of Business Plan and Budget on Earnings and Expenses for the next fiscal year;
    2. (2) One copy of Business Performance and Settlement of Accounts for the fiscal year; and
    3. (3) One copy of the current Property List as of the end of the fiscal year.
  • Article 40. (Liabilities)
    Where the Association intends to assume financial obligations not stated in the Budget, such assumption of financial obligations shall be subject to the resolution of the General Assembly.
  • Article 41. (Disposition of Residual Assets)
    Upon dissolution of the Association, any residual assets shall, by resolution of the General Assembly and with the permission of the competent government authorities, be contributed to the national or local government or other organizations which have similar purposes to those of the Association.
CHAPTER 7. MISCELLANEOUS
  • Article 42. (Mutatis Mutandis)
    Matters not specified in these Articles of Association shall be subject to the provisions regarding juridical persons (Sadanpopin) in the Civil Code and the Regulations on the Establishment and Supervision of Non-Profit Organizations under Authority of the Ministry of Health and Welfare.
ADDENDUM [Newly established on November 23, 2005]
  • The amended provisions within the Articles of Association shall take effect from the date of approval by the Ministry of Health and Welfare.
  • ADDENDUM [Newly established on January 22, 2010]
  • The amended provisions within the Articles of Association shall take effect from the date of approval by the Ministry for Health, Welfare and Family Affairs.
  • ADDENDUM [Newly established on June 1, 2010]
  • The amended provisions within the Articles of Association shall take effect from the date of approval by the Ministry for Health, Welfare and Family Affairs.
<Attachment>
[Amended on January 22, 2010]

List of Basic Asset of the Korean Research Based Pharmaceutical Industry Association

Basic Asset
Description of Assets Amount (Unit: Won) Remarks
Basic Asset Key money for lease 200,000,000
Total 200,000,000
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