RESOLUTION TO CALL THE ANNUAL GENERAL MEETING OF SHAREHOLDERS | ||||||||
NOTICE OF AND DISCLOSURES RELATING TO THE ANNUAL GENERAL MEETING OF SHAREHOLDERS | ||||||||
SIGNATURES |
1. Date/Time | March 9, 2007, 09:00 AM (Local time) | |||||
2. Place | SK Telecom Boramae Building, 729-1, Bongchon 1-dong, Gwanak-gu, Seoul, Korea | |||||
3. Agenda | 1. | Approval of the Financial Statements for the Fiscal Year ended December 31, 2006 | ||||
2. | Approval of the Maximum Authorized Compensation of Directors | |||||
3. | Approval of the Appointment of Directors | |||||
3.1 Appointment of Executive Directors | ||||||
3.2 Appointment of Independent Non-Executive Directors who shall serve as members of the Audit Committee | ||||||
4. Date of the resolution by the Board of Directors | February 13, 2007 | |||||
Attendance of external | Present | 7 | ||||
directors | Absent | | ||||
Attendance of auditors |
| |||||
5. Other Noteworthy Matters | The Audit Committee is comprised entirely of independent non-executive directors, all three of whom were present for this meeting of the Board of directors. |
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Name | Term | Profile | Remarks | |||||
Current | ||||||||
CHO, Jung Nam | 3 years | | CEO/Vice Chairman, SK Telecom (Current) | Current | ||||
| Chairman, KAIST Board of Trustees (Current) | Director | ||||||
| Chairman, Korea Radio Promotion Association (Current) | |||||||
| Chairman, Korea Fencing Federation (Current) | |||||||
| CEO/President, SK Telecom | |||||||
| Executive Vice President, SK Telecom | |||||||
| Senior Managing Director, SK Telecom | |||||||
| Director of Engineering, SK Corporation | |||||||
| Advanced Mgmt. Program, Seoul National University | |||||||
| Executive Program, University of California at Berkeley | |||||||
| B.S. in Chemical Engineering, Seoul National University | |||||||
HA, Sung Min |
3 years | | Head of Corporate Center, SK Telecom (Current) | Current | ||||
| Head of Management Supporting Group, SK Telecom | Director | ||||||
| Head of Strategic Planning Group, SK Telecom | |||||||
| Head of Strategic Planning Office, SK Telecom | |||||||
| Head of Finance Office, SK-Shinseigi Telecom | |||||||
| B.A in Business Administration, Sungkyunkwan University |
Name | Term | Profile | Remarks | |||||
SHIM, Dal Sup |
3 years | | Research Member, Institute for Global Economics (Current) | New | ||||
| Auditor, Korea Credit Guarantee Fund | Appointment | ||||||
| Financial Attaché, Korean Embassy in United States | |||||||
| Audit Officer, Korea Customs Service | |||||||
| Tax & Customs Office, Ministry of Finance & Economy | |||||||
| M.A in Financial Economics, Webster University, Geneva | |||||||
| B.A. in Business Administration, Seoul National University |
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I. | Matters relating to activities and compensation of independent non-executive directors | |
1. | Details of activities of independent non-executive directors |
A. | Attendance of meetings of the Board of Directors and voting on board resolutions. |
Names | ||||||||||||||||||||
Yong | Sang | Dae | Seung | Jae | Sang | |||||||||||||||
Dae | Woon | Ku | Kyu | Taik | Seung | Jin | Hyun | |||||||||||||
Sik Kim | Kim | Nam | Byun | Yang | Yoon | Lee | Jin Lim | |||||||||||||
Meeting | Date | Agenda | Votes | |||||||||||||||||
264th (the first meeting of 2006) |
January 23, 2006 | Financial statements for the year ended December 31, 2005; Annual business report for the year ended December 31, 2005; Organization of Independent non-executive Director Nomination Committee |
Approve | Approve | Approve | Approve | Approve | Approve | Approve | N/A | ||||||||||
265th (the second meeting of 2006) |
February 14, 2006 | Convocation of the 22nd General Meeting of Shareholders | Approve | Approve | Approve | Approve | Approve | (Absent) | Approve | N/A | ||||||||||
266th (the third meeting
of 2006) |
March 31, 2006 | Election of committee members | Approve | Approve | Approve | Approve | Approve | Approve | Approve | Approve | ||||||||||
267th (the fourth meeting of 2006) |
April 26, 2006 | Amendment of regulation for the Compensation Review Committee; Election of committee member for the Compensation Review Committee; Establishment of the Service &Technology Center (STC); Exercise of the iHQ call option |
Approve | Approve | Approve |
Approve | Approve | Approve | Approve | Approve | ||||||||||
268th (the fifth meeting of 2006) |
May 26, 2006 | Issuance of overseas convertible bonds and approval of related treasury stock disposition plan, as amended | Approve | Approve | (Retired) | Approve | Approve | Approve | Approve | Approve |
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Names | ||||||||||||||||||||
Yong | Sang | Dae | Seung | Jae | Sang | |||||||||||||||
Dae | Woon | Ku | Kyu | Taik | Seung | Jin | Hyun | |||||||||||||
Sik Kim | Kim | Nam | Byun | Yang | Yoon | Lee | Jin Lim | |||||||||||||
Meeting | Date | Agenda | Votes | |||||||||||||||||
269th (the sixth meeting of 2006) |
June 20, 2006 | Acquisition of China Unicom convertible bonds; Long-term borrowings |
Approve | Approve | (Retired) | (Absent) | Approve | Approve | Approve | (Absent) | ||||||||||
270th (the seventh meeting of 2006) |
July 28, 2006 | Interim dividends; Acquisition of the Companys common stock for cancellation |
Approve | Approve | (Retired) | Approve | Approve | Approve | Approve | Approve | ||||||||||
271st (the eighth meeting of 2006) |
August 31, 2006 | Establishment of Globalization Committee and election of members; Issuance of corporate bonds and long-term borrowings; Acquisition of the Companys common stock for cancellation; Expansion of WCDMA investment; Construction of TD-SCDMA Test-bed and investment for development of related services |
Approve | Approve | (Retired) | Approve | Approve | Approve | Approve | Approve | ||||||||||
272nd (the ninth meeting of 2006) |
September 29, 2006 | Report on activities in July and August 2006 | | | (Retired) | | | | | (Absent) | ||||||||||
273rd (the tenth meeting
of 2006) |
October 27, 2006 | Issuance of corporate bonds | Approve | Approve | (Retired) | Approve | Approve | Approve | Approve | Approve | ||||||||||
274th (the eleventh meeting of 2006) |
November 24, 2006 | 2006 Operation Results and 2007 Plan for the Fair Trade Voluntary Compliance Program; Report on activities in September and October 2006 |
(Absent) | | (Retired) | | | (Absent) | | | ||||||||||
275th (the twelfth meeting of 2006) |
December 22, 2006 | Establishment of SKT China Holding Company; Participation in capital increase of TU Media; 2007 Business Management Plan |
Approve | Approve | (Retired) | Approve | Approve | Approve | Approve | Approve |
* | Hyun Jin Lim is a director newly appointed at the 22nd annual meeting of shareholders (March 10, 2006). |
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B. | Details of activities of independent non-executive directors in Board of Directors committees. |
Activities | ||||||||
Name of the Committee | Members | Date | Agenda | Approval | ||||
Independent non-executive Director Nomination Committee |
Jung Nam Cho, Jae Seung Yoon, Sang Jin Lee, Sung Min Ha | Feb. 14, 2006 | Election of the committee chairman: Jung Nam Cho; Nomination of independent non-executive director candidate for the 22nd General Meeting of Shareholders: Yong Woon Kim, Hyun Jin Lim |
|||||
Compensation Review Committee |
Dae Sik Kim, Yong Woon Kim, Dae Kyu Byun, Seung Taik Yang, Jae Seung Yoon, Sang Jin Lee, Hyun Jin Lim | May 25, 2006 June 20, 2006 July 27, 2006 August 30, 2006 Oct. 26, 2006 |
Election of the committee chairman Discussion on committees operation plan Discussion on committees operation plan Discussion on committees operation plan Discussion on committees operation plan |
Approved | ||||
Investment Review Committee |
Dae Kyu Byun, Seung Taik Yang, Jae Seung Yoon, Sang Jin Lee, Bang Hyung Lee | Feb. 13, 2006 Apr. 25, 2006 Apr. 26, 2006 August 30, 2006 Dec. 21, 2006 |
Report on investment plan for 2006 Establishment of the Service &Technology Center (STC); Exercise of the iHQ call option Election of the committee chairman; Contents Biz investment and approval of its investment limit Construction of TD-SCDMA Test-bed and investment for development of related services; Expansion of WCDMA investment Investment plan for 2007 |
Approved Approved Approved |
||||
Globalization Committee |
Dae Sik Kim, Dae Kyu Byun, Sang Jin Lee, Sung Min Ha | July 27, 2006 Sep. 28, 2006 |
Report on current business condition of S-Fone (Vietnam) and HELIO (USA); Globalization Committee operation Election of the chairman of committee |
Approved |
||||
Audit Committee |
Dae Sik Kim, Yong Woon Kim, Sang Ku Nam Dae Sik Kim, Yong Woon Kim, Sang Ku Nam, Hyun Jin Lim | Jan. 20, 2006 Feb. 13, 2006 Feb. 27, 2006 Mar. 8, 2006 Apr. 25, 2006 |
Report on operation condition of the internal accounting management system Audit report of the 22nd General Meeting of Shareholders; Evaluation on operation condition of the internal accounting management system Audit committees opinion on internal monitor; Management audit plan for 2006; Proposal on election of outside auditor (06 --08) Election of outside auditor (06 --08) Election of the committee chairman; Remuneration of the outside auditor; Re-approval on service of the outside auditor for 2006; Report on current business of the company |
Approved Approved Approved Approved Approved Approved |
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2. | Current compensation of the independent non-executive directors |
Total amount | ||||||||||
approved by the | ||||||||||
Number of | Meeting of | Average payment | ||||||||
Period | persons | Shareholders | Total payment | per person | Remarks | |||||
January 1 to
December 31, 2006 |
7 persons | 12,000 | 587 | 81 | |
* | The total amount approved by the Meeting of Shareholders includes compensation of the executive directors. |
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II. | Details regarding business management matters | |
1. | Summary of Business |
A. | Industry Overview. | ||
(1) | Characteristics of the Industry |
(2) | Industry Growth |
Classification | End of 2006 | End of 2005 | End of 2004 | End of 2003 | End of 2002 | |||||||||||||||||
Penetration rate (%) |
83.2 | 79.4 | 75.9 | 70.1 | 67.9 | |||||||||||||||||
Number of
subscribers |
SK Telecom | 20,271 | 19,530 | 18,783 | 18,313 | 17,220 | ||||||||||||||||
Shinsegi Communication | | | | | | |||||||||||||||||
PCS | 19,926 | 18,812 | 17,803 | 15,279 | 15,123 | |||||||||||||||||
Total | 40,197 | 38,342 | 36,586 | 33,592 | 32,342 |
(3) | Competition |
(a) | Nature of Competition |
(b) | Competitive Factors |
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B. | Company Overview. | ||
(1) | Operational Overview |
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(2) | Market Share | ||
* Historical market share of the Company |
Classification | 2006 | 2005 | 2004 | 2003 | ||||||||||||
Mobile phone |
50.4 | 50.9 | 51.3 | 54.5 |
* Comparative market share |
Classification | SK Telecom | KTF | LG Telecom | |||||||||
Market share |
50.4 | 32.1 | 17.4 |
(3) | Market Characteristics |
(4) | New Business Contents and Prospects | ||
a) | Expansion of U.S. market operations through commencement of Helio service |
| Resolution for capital investment regarding Mobile Virtual Network Operator (MVNO) service in the U.S. (January 26, 2005) | ||
| Investment amount: US$220 million (From 2005 to 2007) | ||
| Investment method: Establishment of a joint venture with EarthLink, which is one of the three major Internet service providers in the U.S. | ||
| Service provided: MVNO (Mobile Virtual Network Operator) |
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| Subscriber recruitment and service provision based on the Companys own service facilities and rate structure | ||
| Combination of the Companys mobile telecommunications business capabilities and data service technology with the local customer base, marketing infrastructure and brand power of EarthLink | ||
| Planning to provide differentiated value-added services relating to with music, games and messaging to target customers |
b) | Commencement of Commercial High Speed Downlink Packet Access (HSDPA) Service (May 16, 2006) |
| Building on an advanced WCDMA network for data transmission, improve the Companys long-term growth base through the development of new products with strong visual components (such as video phones and other video content) and the expansion of global roaming services; | ||
| Planning to increase customer preference for HSDPA by capturing the early adopter and heavy user segments and to raise awareness of HSDPA as a premium service; | ||
| Nationwide HSDPA network expected to be completed in the first half of 2007. |
c) | Commencement of Commercial Wireless Broadband (WiBro) Service (June 30, 2006) |
| On January 20, 2005, the Company, along with Korea Telecom, obtained rights to the WiBro business following the review of the Information and Communications Policy Review Committee | ||
| Currently servicing six HotZone areas in the Korea University, Shinchon, Hanyang University, Myungdong and Euljiro areas in Seoul; | ||
| Plan to expand HotZone service and to introduce partial flat rate plans in light of various customers different usage patterns. |
2. | Documents relating to the Annual Meeting of Shareholders |
A. | Approval of Financial Statements. | ||
(1) | Balance Sheet |
Item | 2006 | 2005 | ||||||
Current Assets |
4,189,325,307 | 4,172,485,403 | ||||||
Quick Assets |
4,172,886,658 | 4,166,499,725 | ||||||
Inventories |
16,438,649 | 5,985,678 | ||||||
Fixed Assets |
11,624,728,019 | 10,349,191,056 | ||||||
Investment Assets |
3,801,457,627 | 2,366,760,393 | ||||||
Tangible Assets |
4,418,111,761 | 4,595,883,432 | ||||||
Intangible Assets |
3,405,158,631 | 3,386,547,231 |
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Item | 2006 | 2005 | ||||||
Total Assets |
15,814,053,326 | 14,521,676,459 | ||||||
Current Liability |
2,985,619,649 | 2,706,489,196 | ||||||
Fixed Liability |
3,522,006,033 | 3,557,306,555 | ||||||
Total Liability |
6,507,625,682 | 6,263,795,751 | ||||||
Capital Stock |
44,639,473 | 44,639,473 | ||||||
Capital Surplus |
2,962,698,779 | 2,966,197,636 | ||||||
Retained Earnings |
7,844,753,051 | 7,269,860,571 | ||||||
Capital Adjustments |
(1,545,663,659 | ) | (2,022,816,972 | ) | ||||
Total Capital |
9,306,427,644 | 8,257,880,708 | ||||||
Total Capital and Liabilities |
15,814,053,326 | 14,521,676,459 |
(2) | Statement of Profit and Loss |
Item | 2006 | 2005 | ||||||
Operating Revenue |
10,650,952,431 | 10,161,128,637 | ||||||
Operating Expenses |
8,066,582,847 | 7,507,559,130 | ||||||
1. Wages |
358,225,595 | 342,761,120 | ||||||
2. Severance Allowances |
37,921,155 | 37,622,226 | ||||||
3. Employee Benefits |
55,734,927 | 56,514,211 | ||||||
4. Communication Expenses |
49,330,018 | 63,403,617 | ||||||
5. Utility Expenses |
92,450,447 | 83,617,118 | ||||||
6. Taxes & Dues |
91,902,424 | 55,687,220 | ||||||
7. Rent |
193,877,234 | 179,726,259 | ||||||
8. Commissions Paid |
3,316,551,041 | 2,895,213,849 | ||||||
9. Depreciation |
1,513,092,382 | 1,512,918,958 | ||||||
10. Maintenance & Repairs |
146,312,103 | 128,310,682 | ||||||
11. Advertising |
300,829,450 | 260,699,358 | ||||||
12. Training |
36,273,953 | 29,430,652 | ||||||
13. Ordinary Development Expenses |
211,751,884 | 204,698,223 | ||||||
14. Bad Debts |
52,660,830 | 104,089,154 | ||||||
15. Leased Lines |
395,113,026 | 392,833,602 | ||||||
16. Frequency Usage Fees |
158,958,132 | 156,097,850 | ||||||
17. Network Interconnection |
955,953,882 | 935,216,677 | ||||||
18. Cost of Goods Sold |
39,686,263 | 12,371,704 | ||||||
19. Others |
59,958,101 | 56,346,650 |
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Item | 2006 | 2005 | ||||||
Operating Income |
2,584,369,584 | 2,653,569,507 | ||||||
Non-operating Income |
311,100,477 | 409,793,044 | ||||||
Non-operating Expenses |
873,827,071 | 508,749,205 | ||||||
Income Before Income Taxes |
2,021,642,990 | 2,554,613,346 | ||||||
Income Taxes |
575,045,052 | 683,233,256 | ||||||
Net Income |
1,446,597,938 | 1,871,380,090 |
(2) | Statement of Profit Surplus Appropriation / Statement of Deficiency Disposition (Draft) |
Item | 2006 | 2005 | ||||||
Retained Earnings Before Appropriations |
1,165,518,639 | 1,799,159,492 | ||||||
1. Retained Earnings Carried Over from
Previous Year |
1,711,791 | 1,393,698 | ||||||
2. Profits on Disposition of Treasury
Stocks |
(209,077,433 | ) | | |||||
3. Changes to the Retained Earnings of the
Companies Accounted in Equity Method |
| | ||||||
4. Interim Dividends |
(73,713,657 | ) | (73,614,296 | ) | ||||
Common Stock Dividends (ratio) |
||||||||
Current Fiscal Year: |
||||||||
Previous Fiscal Year: |
||||||||
5. Current Net Income |
1,446,597,938 | 1,871,380,090 | ||||||
Transfer from Voluntary Reserves |
409,197,435 | 131,466,667 | ||||||
1. Reserve for Research and Manpower
Development |
188,000,000 | 131,466,667 | ||||||
2. Reserve for Business Expansion |
221,197,435 | |||||||
Appropriations of Retained Earnings |
1,573,672,213 | 1,928,914,368 | ||||||
1. Legal Reserves |
||||||||
2. Appropriated Retained Earnings for Loss
on Disposition of Treasury Stock |
||||||||
3. Reserve for Research and Manpower
Development |
180,000,000 | 190,000,000 | ||||||
4. Dividend |
508,672,213 | 588,914,368 | ||||||
(1) Cash Dividend |
508,672,213 | 588,914,368 |
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Item | 2006 | 2005 | ||||||
Common Stock Dividend (ratio) |
||||||||
Current Fiscal Year: |
||||||||
Previous Fiscal Year: |
||||||||
5. Reserve for Business Expansion |
885,000,000 | 1,150,000,000 | ||||||
Retained Earnings to be Carried Forward to
Next Year |
1,043,861 | 1,711,791 |
B. | Approval of Maximum Authorized Amount of Compensation for Directors. | ||
(1) | Number of directors; total amount and maximum authorized amount of compensation of directors |
Classification | Fiscal year ended of 2005 | Fiscal year ended 2006 | ||
Number of directors (Number of independent non-executive directors) |
11 persons (7 persons) | 12 persons (8 persons) | ||
Total amount and
maximum authorized
amount of
compensation of
directors
|
Won 12 billion | Won 12 billion |
(2) | Appointment of directors | ||
a. | Details of director candidates |
Transactions with | ||||||||
the Company in | ||||||||
Name | Term | Profile | Nominated by | the last 3 years | ||||
Current | ||||||||
CHO, Jung Nam | 3 years |
CEO/Vice Chairman, SK Telecom (Current) Chairman, KAIST Board of Trustees (Current) Chairman, Korea Radio Promotion Association (Current) Chairman, Korea Fencing Federation (Current) CEO/President, SK Telecom Executive Vice President, SK Telecom Senior Managing Director, SK Telecom Director of Engineering, SK Corporation Advanced Mgmt. Program, Seoul National University Executive Program, University of California at Berkeley B.S. in Chemical Engineering, Seoul National University |
Board of Directors | None |
14
Transactions with | ||||||||
the Company in | ||||||||
Name | Term | Profile | Nominated by | the last 3 years | ||||
HA, Sung Min | 3 years |
Head of Corporate Center, SK Telecom (Current) Head of Management Supporting Group, SK Telecom Head of Strategic Planning Group, SK Telecom Head of Strategic Planning Office, SK Telecom Head of Finance Office, SK-Shinseigi Telecom B.A in Business Administration, Sungkyunkwan University |
Board of Directors | None |
(3) | Appointment of member of Audit Committee | ||
a. | Details of Audit Committee member candidate |
Transactions with | ||||||||
the Company in | ||||||||
Name | Term | Profile | Nominated by | the last 3 years | ||||
SHIM, Dal Sup | 3 years |
Research Member, Institute for Global Economics (Current) Auditor, Korea Credit Guarantee Fund Finance Councilor, Korean Embassy in United States Audit Officer, Korea Customs Service Tax & Customs Office, Ministry of Finance & Economy M.A in Financial Economics, Webster University, Geneva B.A. in Business Administration, Seoul National University |
Board of Directors | None |
15
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SK Telecom Co., Ltd. (Registrant) |
||||
By: /s/ Tae Jin Park | ||||
(Signature) | ||||
Name: | Tae Jin Park | |||
Title: | Vice President | |||
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