| | attached
to the registered shares underlying the ADSs. JPMorgan Chase Bank as depositary
may exercise the voting rights for deposited shares represented by ADS at its
discretion to the extent the holders of the ADS have not given instructions as
to how such underlying shares should be voted. RESOLUTIONS
AND ELECTIONS AT ANNUAL GENERAL MEETING Shareholders
registered at least 10 days prior to the Annual General Meeting may vote their
shares at the Annual General Meeting. Resolutions of the shareholders at an Annual
General Meeting are approved with a simple majority of the shares represented
at the meeting, except in the following matters which by law (Swiss Code of Obligations,
Art. 704) and our Articles of Incorporation require the approval of two-thirds
of the shares represented: | •
| Alteration of the purpose of Novartis AG; | | •
| Creation of shares with increased voting powers;
| | • | Implementation
or removal of restrictions regarding the transferability of shares; | | •
| Authorized or conditional increase of the share
capital; | | • | Increase
of the share capital from equity or a contribution in kind, for the purpose of
an acquisition of property and the grant of special rights; | | •
| Restriction or suspension of rights of option
to subscribe; | | • | Change
in location of the registered office of Novartis AG; and | | •
| Dissolution of Novartis AG without liquidation. |
| | THE
BOARD OF DIRECTORS MEMBERS OF
THE BOARD OF DIRECTORS  Further
biographical information can be found on pages 99 to 102.
DIRECTOR INDEPENDENCE The Board of Directors
has promulgated independence criteria for its members. These criteria are appended
to the Regulations of the Board and can be found on the Internet at: www.novartis.com/investors/en/corporate_governance.
Pursuant to these criteria, the Board has determined that all of its members,
save for Dr. Vasella and Mr. Jetzer, are independent and have no material dealings
with Novartis AG or other companies of the Novartis Group outside their role as
a Director. Dr. Vasella is the only Executive Director.
Mr. Jetzer was a member of the Executive Committee until 1999 and continues to
support the Government Relations activities of the Group under a consultancy agreement.
With effect from March 1, 2006 Professor Datar will be considered to be an independent
director given the expiration of the three-year look-back period on compensation
other than Board fees paid by an issuer to its directors, as per the NYSE Rules.
In 2002, Novartis made a gift to Harvard Business School of USD 5 million. This
amount established and endowed a professorship in the name of Novartis at Harvard
Business School. The Board of Directors concluded that this endowment, which under | |
