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• Restriction or suspension of rights
of option to subscribe
• Change in location of the registered office of Novartis AG
• Dissolution of Novartis AG without liquidation
The Company has not adopted any decisions
that differ from the rules applicable to it under the Swiss Stock
Exchange Act (no opting-up or opting-out).
Members of the Board of Directors1
The average tenure of our Directors is
six years and their average age is 61 years. Dr. Daniel Vasella
is the only Executive Director. Alexandre F. Jetzer was a member
of the Executive Committee until 1999 and supports Novartis’ Government
Relations under a consultancy agreement. On the basis of the independence
criteria listed in the appendix to the Regulations of the Board
and Committee Charters effective as of April 15, 2003 the Board
has decided that with the exception of Dr. Daniel Vasella and Alexandre
F. Jetzer, all Directors are independent and have no material dealings
with Novartis AG or other companies of the Novartis Group outside
their role as a Director2. No Director sits on the board of directors
of other listed companies with which any Novartis Group company
conducts a material amount of business.
For the last seven years, Novartis has
engaged the Harvard Business School (HBS), the employer of Prof. Srikant
Datar, PhD, to train Novartis executives in financial and business
matters. The compensation paid by Novar-
1 See also the biographical information
on pages 91–93
2 In his capacity as a Director, Prof. Rolf M. Zinkernagel,
MD, represents the Board of Directors’ interests on the Scientific
Advisory Board of the the Novartis Institute for Tropical Diseases
(NITD). He is also a member of the Board of Directors of the Genomics
Institute of the Novartis Research Foundation (GNF). |
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tis for these
programs is not material in comparison with the total revenues of
Harvard Business School and, therefore, does not constitute a “material
dealing” as defined under US Securities law or the Listing Standards
of the New York Stock Exchange (NYSE). Prof. S. Datar was the person
at HBS responsible for managing these Novartis programs. Prior to
his nomination as Director, Prof. S. Datar relinquished his management
responsibilities for these programs and since his nomination as Director
has not been separately compensated. Therefore, under the definitions
of Director independence in place at the time of his election as a
Director, Prof. S. Datar was deemed by the Board to be an Independent
Director. New NYSE rules published in 2003 and which will become effective
in November 2004 provide for a three-year look-back period on compensation
other than Board fees paid by an issuer to its directors. Under this
new rule and its extended lookback period, as of November 2004 Prof.
S. Datar, due to his professional engagement for Novartis AG prior
to his nomination as Director, would not be considered “independent.”
As a consequence, and to avoid any doubt, in December 2003 Prof. S.
Datar stepped down from the Audit and Compliance Committee which requires
that all members are independent.
The specific term of office for a Director
is determined by the General Meeting on the occasion of his or her
election. Each year approximately one-third of all Directors are elected
or re-elected. In principle, a Director is to retire after 12 years
of service or the reaching of 70 years of age. Nonetheless, the shareholders
may re-elect such Directors for additional terms of office. Dr. Daniel
Vasella has been elected by the Board as its Chairman and also to
serve as Chief Executive Officer. It is the view of the Board that
this dual role ensures effective leadership and excellent communication
between the shareholders, the Board and Management. The Board has
appointed Prof. Helmut Sihler, JD, PhD, as Lead Director, whose responsibility
it is to ensure an orderly process in evaluating the performance of
the Chairman and CEO and to chair the Board’s private sessions (i.e.
the meetings of the non-executive Directors). In case of a crisis,
he would assume leadership of the Independent Directors.
The Board appointed Prof. Helmut Sihler
and Hans- Joerg Rudloff as its Vice Chairmen. |
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