The articles of association of Uster Technologies Ltd provide that the Board of Directors may consist of a minimum of three Members and a maximum of nine Members. Members of the Board of Directors are appointed and removed exclusively by shareholders’ resolution. The elections are held individually. Their maximum term of office is three years, re-election is allowed.

The Board of Directors is entrusted with the ultimate direction of Uster Technologies Ltd and the supervision of the Executive Committee. The Board of Directors’ non-transferable and irrevocable duties include the following:

• The ultimate direction of the Company and the Group and the issuance of the necessary directives;
• The determination of the organization of the Company, including the adoption and revision of the organizational rules;
• The organization of the accounting system, the financial control as well as the financial planning;
• The appointment and dismissal of the persons entrusted with the management of the Company as well as the determination of the signatory power;
• The ultimate supervision of the persons entrusted with the management of the Company, specifically, in view of their compliance with the law, the articles of association, organizational rules and directives;
• The preparation of the annual report and the Shareholders’ meeting as well as the implementation of the resolutions adopted by the meeting of Shareholders;
• The passing of resolutions regarding the supplementary contribution for shares not fully paid up and of the corresponding amendments to the articles of incorporation;
• The passing of resolutions concerning an increase in share capital to the extent that such power is vested in the Board of Directors and of resolutions concerning the confirmation of capital increases and corresponding amendments to the articles of incorporation as well as making the required report on the capital increase;
• The non-delegable and inalienable duties and powers of the Board of Directors pursuant to the Merger Act and any other law;
• The notification of the judge in case of over-indebtedness of the Company;
• The adoption of, and any amendments or modifications to, any equity incentive plan, stock option agreement, restricted stock purchase agreement, etc.;
• The decision regarding entering into any financing arrangement in excess of CHF 10.0 million including loan agreements, credit lines, letters of credit or capitalized leases;
• The issuance of convertible debentures with option rights or other financial market instruments;
• The approval of the business strategy and the approval and adoption of the budget of the Company;
• The approval of any transaction exceeding the amount of CHF 10.0 million which is not in accordance with the budget.

According to the current organizational rules enacted by the Board of Directors, the Board of Directors meets at the invitation of the Chairman, or in the Chairman’s absence, the Vice-Chairman or the Secretary on their behalf. In addition, any other Member of the Board of Directors can by stating the reasons and the items to be placed on the agenda, request the Chairman in writing, to convene a meeting. The Board of Directors meets regularly and as often as the Company’s business requires a meeting but in any event at least six times per calendar year. Resolutions of the Board of Directors are passed by way of simple majority of the vote cast. In the case of a tie the Chairman has a casting vote. To pass a resolution validly, the majority of the Members of the Board of Directors have to attend the meeting.

The Chairman, after consultation with the Chief Executive Officer, determines the agenda for the Board meetings. Any Member of the Board of Directors may request the inclusion of further items of business in the agenda. All Members of the Board receive written information on the agenda items before the meeting in order to be well prepared. The Board of Directors consults external experts where necessary when discussing specific topics.

The Board of Directors has established two committees to further strengthen the corporate governance structure. The Members of these committees are appointed, as a rule, for the entire duration of their mandate as Director and are re-eligible. The committees constitute themselves each year at the first meeting after the annual meeting of shareholders. In discharging their responsibilities the committees have unrestricted access to the Company’s and the Management’s books and records.

Audit Committee

According to the Board regulations, the Audit Committee must be composed of two non-executive and Independent Directors. It currently consists of Max-Ulrich Zellweger and Barry James Mulady and meets as often as necessary. Usually there will be at least two meetings a year, one for the review of the budget and one for the review of the year-end closing. Furthermore, the audit scope, the audit plan and the audit focus points for the year-end closing are presented in such meetings. The audit committee asks the auditors to present their findings of the year-end closing. Other audit findings either by an external consultant or by the internal audit team are presented on a case by case basis.

The Audit Committee assists the Board of Directors in fulfilling its duties of supervision of the Executive Committee. It has the following powers and duties:

• To review and assess the effectiveness of the statutory auditors, in particular their independence from the Company;
• To review and assess the scope and plan of the audit, the examination process and the results of the audit and to examine whether the recommendations issued by the auditors have been implemented;
• To review the auditors’ reports and to discuss their contents with the auditors and with the Executive Committee;
• To assess the risk assessment established by the Executive Committee and the proposed measures to reduce risks;
• To assess the state of compliance with norms within the Company;
• To review in cooperation with the auditors, the CEO and the CFO whether the accounting principles and the financial control mechanism of the Company and its subsidiaries are appropriate in view of the size and complexity of the Group;
• To review the annual and interim statutory and consolidated financial statements intended for publication. It should discuss these with the CEO, the CFO and with the head of the external audit;
• The Audit Committee regularly reports to the Board of Directors on its findings and proposes appropriate actions.

Nomination and Compensation Committee

According to the Board Regulations, the Nomination and Compensation Committee must be composed of non-executive and independent Directors. It currently consists of Max-Ulrich Zellweger and Barry James Mulady and meets as often as necessary.

The Nomination and Compensation Committee assists the Board of Directors in fulfilling its duties of supervision of the Executive Committee. It has the following powers and duties:

• To assure the long-term planning of appropriate appointments to the position of the CEO and to the Board of Directors;
• To nominate candidates to fill the vacancies on the Board of Directors or the position of the CEO;
• To make recommendations on the composition and balance of the Board of Directors;
• To review and assess on a regular basis the remuneration system of the Company and the Group (including the management incentive plans) and to make a proposal to the Board of Directors;
• To recommend the terms of employment, in particular the remuneration package of the CEO, and to make proposals in relation to the remuneration of the Members of the Board of Directors;
• To recommend upon proposal of the CEO the terms of employment, in particular the remuneration package, of employees reporting directly to the CEO as well as review matters related to the compensation of other top managers as well as the general employee compensation and human resource practices of the Company;
• To make recommendations on the grant of options or other securities under any management incentive plan of the Company.

The Nomination and Compensation Committee regularly reports to the Board of Directors on its findings and proposes appropriate actions.