sika organisatigfhfonal

ORGANISATIONAL RULES SIKA AG AND SIKA GROUP MAY 2013

ORGANISATIONAL RULES SIKA AG AND SIKA GROUP

MAY 2013

2/19

CONTENTS

1. FUNDAMENTALS 3

2. BOARD OF DIRECTORS 4

3. CHAIRMAN OF THE BOARD 6

4. VICE-CHAIRMAN OF THE BOARD 6

5. AUDIT COMMITTEE (AC) 7

6. NOMINATION- AND COMPENSATION COMMITTEE (NCC) 8

7. CHIEF EXECUTIVE OFFICER (CEO) 9

8. GROUP MANAGEMENT (KL) 9

9. VICE EXECUTIVE OFFICER 10

10. MEMBERS OF GROUP MANAGEMENT 11

11. AREA MANAGERS 11

12. BOARDS OF DIRECTORS OF SUBSIDIARIES 12

13. SOUNDING BOARD 12

14. GENERAL PROVISIONS 12

15. CLOSING PROVISION 13

Annex I: Corporate Structure of Sika AG and Sika Group

Annex II: Authorities in business matters


MAY 2013

3/19

1. FUNDAMENTALS

Pursuant to section 716b OR (Swiss Code of Obligations) and section 17 Para. 3 and 4 of the Articles of

Association, the Board of Directors of Sika AG hereby issues the following organisational rules for Sika AG

and the Sika Group. Sika AG and the Sika Group are hereinafter collectively referred to as “Sika”.

The organisational rules establish the duties, authorities and responsibilities (hereafter DAR) of the

following corporate bodies and offices:

Board of Directors (BOD)

Chairman of the Board (Chairman)

Vice-Chairman of the Board

Audit Committee (AC)

Nomination and Compensation Committee (NCC)

Chief Executive Officer (CEO)

Group Management (KL)

Vice Executive Officer

Regional Managers, Functional Managers and Area Managers

Boards of Directors of Subsidiaries

Sounding Board

The organisational structure is attached in Annex I.

The Competences for Business Matters are attached in Annex II.


MAY 2013

4/19

2. BOARD OF DIRECTORS

2.1. DAR

2.1.1 The BOD is the chief executive body of Sika. Subject to the legal and statutory obligations of the

Shareholders' Meeting or the Auditors it holds all DAR. They include the following DAR:

2.1.1.1 Defines the framework of the operational Group management:

- Philosophy and Policies of Sika

- Strategy

- Three year plan and annual budget including financial planning

2.1.1.2 Establishes the Group organisation.

2.1.1.3 Insures the executive management of the Group. The BOD constitutes itself in the first meeting

following the Shareholders' meeting. It appoints and discharges:

- the Chief Executive Officer (CEO) - the Members of the KL

2.1.1.4 Issues the Annual Report and prepares for and conducts Shareholders' Meeting. Implements

decisions of the Shareholders' Meeting.

2.1.1.5 Supervises and controls:

- the implementation of Philosophy and Policies and strategies the Group's ongoing business

(year-end and quarterly statements, monthly reports)

- financial and management accounting

- compliance with laws, statutes, rules and regulations

2.1.1.6 Approval of business matters as per Annex II.

2.1.2 The BOD may delegate the preparation, implementation and supervision of its DAR to committees or

individual members of the BOD. The following committees exist:

Audit Committee (Section 5)

Nomination- and Compensation Committee (Section 6).

Except for the Chairmen of the Committees, which are appointed by the BOD, the Committees constitute

themselves.

2.1.3 The BOD delegates the operational Group Management functions to the KL unless it has expressly

reserved such management functions to itself or to one of its bodies or unless such delegation is

prohibited by law, the articles of association or these organisational rules.

2.1.4 It supervises DAR delegated to third parties.


MAY 2013

5/19

2.2. ORGANISATION

2.2.1 The BOD meets at the invitation of the Chairman as necessary, but at least 4 times a year. Any member of

the BOD may call an immediate meeting by so stating the purpose of said meeting.

2.2.2 Except in urgent cases, the invitation for the meeting and relevant documents must be sent out at least

five working days before the meeting.

2.2.3 The BOD may only adopt resolutions if the majority of its members are present. Resolutions of the Board

can only be adopted by the majority vote of the directors present. Resolutions can also be adopted in

writing in the absence of a BOD meeting if consented to in writing by the absolute majority of all members

unless a member requests oral deliberation within five days of receipt of written proposal. Reservations

and comments of a member must be communicated to the entire Board. The Chairman has the casting

vote.

2.2.4 Minutes must be taken of all deliberations and resolutions by the BOD and be signed by the Chairman and

the Secretary.

2.2.5 As a general rule, the CEO attends the meetings and may advise the BOD. The participation of others lies

with the discretion of the Chairman.

2.2.6 The BOD assesses its performance on an annual basis.

2.3. RIGHT TO INFORMATION AND REPORTING

2.3.1 Each member of the BOD is entitled to timely and comprehensive reports on all aspects of Sika's business

in accordance with members DAR.

2.3.2 In every meeting, the Chairman, or, at the Chairman’s instruction, the CEO informs the BOD about the

ongoing business. The BOD shall be advised immediately by the Chairman about extraordinary events.

2.3.3 If a member of the BOD desires to obtain information or to review business documents outside of a

meeting, a request to obtain such information or document must be submitted to the Chairman.

2.3.4 To the extent it is required for the fulfillment of a member’s duties; any member of the BOD may submit a

request to the Chairman to make records and files available to that member of the BOD. If the Chairman

declines a request for information, for a hearing or a review of records, the final decision is to be taken by

the BOD.


MAY 2013

6/19

3. CHAIRMAN OF THE BOARD

3.1. DAR

The Chairman has the following DAR:

3.1.1 Supervises all personnel responsible for the operational management of the Group.

3.1.2 Organises meetings, collects and disseminates information to the BOD concerning pending decisions of

the BOD. Calls and chairs the meetings of the BOD.

3.1.3 Represents Sika to persons and entities outside of Sika, particularly to shareholders. Also represents the

BOD within Sika.

3.1.4 Acts as liaison with shareholders, particularly with the majority shareholder and shareholders whose

holdings exceed 5% of all voting shares in Sika AG.

3.1.5 Oversees the implementation of the resolutions of the BOD.

3.1.6 Chairs the Shareholders’ Meeting of Sika AG.

3.1.7 Approves business matters as per Annex II.

3.2. REPORTING

3.2.1 As part of his DAR, the Chairman is regularly and comprehensively informed on all matters pertaining to

Sika. Information is primarily provided by the CEO and the Chief Financial Officer (CFO).

3.2.2 Extraordinary events must be reported to the Chairman without delay.

3.2.3 Any reports to the BOD are previewed by the Chairman.

4. VICE-CHAIRMAN OF THE BOARD

If the Chairman is temporarily excused from his duties the BOD elects a Vice-Chairman for this period who

is fully authorised to act with the Chairman’s DAR.


MAY 2013

7/19

5. AUDIT COMMITTEE (AC)

5.1. DAR'S

The Audit Committee has the following DAR's:

5.1.1 Reviews the results of the External Audit, particularly the Auditor's report for the annual financial

statements of Sika AG and the Group, as well as for the interim financial statements and the management

letters.

5.1.2 Reviews internal control systems, particularly the results of the Internal Audit, risk management and

compliance.

5.1.3 Defines the scope of the Internal Audit in consultation with the Chairman and supervises the interaction

between external and internal auditors.

5.1.4 The Internal Audit reports to the AC. For this purpose the AC designs a detailed job description for the

Internal Audit ("Audit Charta").

5.1.5 Approves the External Auditor's budgeted fee as proposed by the CFO. Reviews any potential conflicts of

the Auditor's auditing activities with its other consulting functions.

5.1.6 Reviews its DAR on an annual basis.

5.2. ORGANISATION

5.2.1 The majority of the AC, including its chairman, shall be independent and experienced in financial and

management accounting.

5.2.2 The AC meets at the invitation of its chairman as necessary but at least twice a year.

5.2.3 As a general rule, the CFO and, if needed, the CEO attend the meetings and advise the AC. The

participation of others, particularly representatives of the External Auditor or the Internal Audit, lies with

the discretion of the AC chairman.

5.2.4 The AC's minutes are sent to the members of the BOD. Sections 2.2.2 to 2.2.4 apply accordingly.

5.3. INFORMATION, REPORTING AND REQUESTS FOR APPROVAL

5.3.1 Extraordinary events pertaining to its DAR must be reported to the AC without delay.

5.3.2 The AC informs the BOD in a timely manner on the results of its activities and submits requests for

approval by the BOD to the Chairman.


MAY 2013

8/19

6. NOMINATION- AND COMPENSATION COMMITTEE (NCC)

6.1. DAR

The NCC has the following DAR:

6.1.1 Prepares personnel planning on the level of BOD and KL by

setting criteria for the search and selection of candidates

succession planning and management development

proposal to engage or dismiss a member of the KL.

6.1.2 Provides BOD with a performance assessment of KL members.

6.1.3 Proposes the basic salary and bonus for the KL, the latter based on defined criteria.

6.1.4 Proposes remuneration for members of the BOD.

6.1.5 Reviews its DAR on an annual basis.

6.2. ORGANISATION

6.2.1 The NCC meets at the invitation of its chairman as necessary, but at least once a year.

6.2.2 As a general rule, the CEO attends the meetings and advises the NCC. The participation of others lies with

the discretion of the chairman.

6.2.3 The NCC's minutes are sent to the members of the BOD. Sections 2.2.2 to 2.2.4 apply accordingly.

6.3. REPORTING AND REQUESTS FOR APPROVAL

The NCC informs the BOD in a timely manner on the results of its activities and submits to the Chairman

requests for approval by the BOD.


MAY 2013

9/19

7. CHIEF EXECUTIVE OFFICER (CEO)

Members of the KL report to the CEO. The CEO reports to the Chairman and has the following DAR:

7.1. Implements Sika’s Philosophy and Policies.

7.2. Leads the KL in accordance with the resolutions and directions of the governing bodies and offices and

with a view to reaching the budget, the three year plan and the strategic targets.

7.3. Organises and chairs the meetings of the KL.

7.4. Submits requests for approval to the Chairman and the BOD.

7.5. Ensures the timely and comprehensive reporting to the Chairman and the BOD in accordance with their

DAR.

7.6. Represents Sika with regard to operational aspects to the public (particularly customers, suppliers and the

financial community).

8. GROUP MANAGEMENT (KL)

8.1. DAR

The KL is led by the CEO. Regional Managers and Functional Managers are members. The KL is responsible

for the operational management of Sika based on the resolutions of the governing bodies and with a view

to reaching the budget and the three year plan as well as strategic goals.

The operational management includes, but is not limited to, the following:

8.1.1 Preparation of all information necessary for resolutions to be adopted by the Chairman and the BOD

pursuant to their DAR.

8.1.2 Implementation of resolutions of the Chairman and the BOD also on the operational and functional levels.

8.1.3 Planning and development of junior management.

8.1.4 Approval of business matters as per Annex II.

8.1.5 Securing of timely and comprehensive reporting to the Chairman and the BOD in line with their DAR.


MAY 2013

10/19

8.2. ORGANISATION

8.2.1 The KL meets at the invitation of the CEO as often as necessary.

8.2.2 The invitation for the meeting and relevant documents must be sent out at least one weekend before the

meeting.

8.2.3 The KL may only adopt resolutions if the majority of its members are present. Resolutions of the KL can

only be adopted by the majority vote of the KL members present. Resolutions can also be adopted in

writing in the absence of a KL meeting if consented to in writing by the absolute majority of all members

unless a member requests oral deliberation within five days of receipt of the written proposal.

Reservations and comments of a member must be communicated to all other members of the KL. The CEO

has the casting vote.

8.3. DELEGATION OF DAR

8.3.1 The KL may delegate the preparation, execution and monitoring of certain DAR as per section 8.1 to

individual members of the KL or to permanent project teams or work groups.

8.3.2 The KL determines the relevant lists of duties and responsibilities for its members and permanent project

teams or work groups and submits them to the Chairman for approval.

9. VICE EXECUTIVE OFFICER

If the CEO is temporary excused from a BOD meeting, the Vice Executive Officer is fully authorised to act

with the CEO's DAR.


MAY 2013

11/19

10. MEMBERS OF GROUP MANAGEMENT

10.1. REGIONAL MANAGER

The Functional Manager has the following DAR:

10.1.1 Exercises his duties as a member of the KL as per section 8.1.

10.1.2 Assumes full responsibility for the region with a view to achieving the budget and the three year plan as

well as strategic goals.

10.1.3 Represents the region in the KL and the latter to the companies and areas of his region.

10.1.4 Implements the resolutions of the BOD, Chairman and the KL and exercises the necessary supervisory

functions.

10.1.5 In addition, Regional Manager’s duties are detailed in the list of personal duties and responsibilities.

10.2. FUNCTIONAL MANAGER

The Functional Manager has the following DAR:

10.2.1 Exercises his duties as a member of the KL as per section 8.1.

10.2.2 Leads the functional area with a view to reaching the budget and three year plan as well as strategic goals.

10.2.3 Represents the functional area in the KL and the latter to his subordinates.

10.2.4 Implements the resolutions of the BOD, Chairman and the KL and exercises the necessary supervisory

functions.

10.2.5 In addition, his duties are detailed in the list of personal duties and responsibilities.

11. AREA MANAGERS

If authorised by the KL, Regional Managers may delegate part of their DAR to Area Managers. "Area"

designates a group of subsidiaries in a culturally or linguistically similar or an economically uniform area.

Area Managers may act as General Manager of a subsidiary company in their area.


MAY 2013

12/19

12. BOARDS OF DIRECTORS OF SUBSIDIARIES

12.1. COMPOSITION

Board of Directors of subsidiaries will only be maintained where legally required with the minimum

amount of members, being the Regional and/or Area Manager as well as the Regional Finance Controller.

Other members are appointed by the KL. The General Manager is not a member, except where approved

by the KL.

12.2. DAR

The Board of Directors' duties are in accordance with the local legal requirements and the personal DAR of

its members.

13. SOUNDING BOARD

13.1. DAR

The KL may appoint a Sounding Board for specific growth countries or areas. The Sounding Board advises

the KL on issues which namely regard the Group strategy and its implementation in that country or area.

The Sounding Board has no decision power.

13.2. COMPOSITION

The Sounding Board consists of external persons with knowledge of that country or area and

representatives of the KL. It is chaired by the Regional Manager.

13.3. ORGANISATION

The Sounding Board meets on invitation of its chairman as often as required.

14. GENERAL PROVISIONS

14.1. CONFIDENTIALITY AND RETURN OF RECORDS

The members of the BOD must keep confidential all information they receive, or become aware of, as a

result of their position. Subject to prevailing personal interests, business records must be returned at the

latest at the end of their term of office or their destruction must be confirmed in writing.

14.2. CONFLICT OF INTEREST

To the extent possible, members of the BOD shall conduct their private and business activities in such a

way to avoid conflict of interests.

In case of a conflict of interest, the respective member of the BOD shall inform the Chairman and abstain

from voting on the issue.

Business activities between Sika and members of the BOD are subject to the arms-length-principle.


MAY 2013

13/19

14.3. PHILOSOPHY AND POLICIES

Members of the BOD act in compliance with Sika's Philosophy and Policies, namely its chapter 10, as well

as in line with other Board regulations (in particular Insider Trading).

14.4. AGE LIMIT

The age limit for members of the Board of Directors of Sika AG is the completed 70th year of age.

15. CLOSING PROVISION

These rules are effective as of May 2013 and replace the Organisational Rules of February 25th

, 2011.

Baar, May 2013

____________________

Paul Hälg

Chairman of the Board


MAY 2013

14/19

Annex I

Group Management of Sika

CEO J. Jenisch

Procurement HR

CFO R. Trächsel

Asia/Pacific H. Gisel

North America C. Ganz

EMEA * P. Schuler

Latin America J. L. Vázquez

Concrete & Waterproofing E. Schümperli

Building Systems & Industry

S. Ponti

Technology U. Mäder

* Europe, Middle East, Africa

Quality & Sustainability Legal


MAY 2013

15/19

Annex II

AUTHORITIES IN BUSINESS MATTERS

Matter AC VR VRP KL

1 Investments and contractual obligations1

1.1 Part of budget (incl. KL-Reserve)2

up to CHF 10 mill. D

from CHF 10 mill. up to CHF 20 mill. D A

in excess of CHF 20 mill. D A

1.2 Not part of budget

up to CHF 5 mill. aggregated I D

from CHF 5 mill. to CHF 10 mill. aggregated I D RPA

in excess of CHF 10 mill. D RPA

1.3 Purchase or sale of real estate according to section 1.1 or 1.2

with no possibility of delegation below level of KL

1.4 Rental of real estate according to section 1.1 with no possibility

of delegation below level of KL for commitment > CHF 500'000

1.5 Divestments: according section 1.1

1.6 Investment accounting in excess of CHF 25 mill. I

RPA = Submit RPA

D = Decision

I = Information

1 Investments include any purchase of fixed assets as well as contractual obligations (lease, rent, purchase obligation with regard to fixed assets) if the total of the obligations reaches the thresholds

2 i.e. specifically named in the budget or part of the KL-Reserve


MAY 2013

16/19

Matter VR VRP KL

2 Financial Investments

2.1 Sika AG

2.1.1 Change in equity RPA

2.1.2 Debt financing

Principal transaction D RPA

Management within limits of principal transaction D

2.2 M&A3

2.2.1 Non-binding offer

up to CHF 50 mill.

from CHF 50 mill. to CHF 100 mill.

in excess of CHF 100 mill.

2.2.2 Binding undertaking

up to CHF 10 mill.

from CHF 10 mill. to CHF 20 mill.

in excess of CHF 20 mill.

I

I

D

I

I

D

D

D

D

RPA

D

RPA

2.2.3 Incorporation, variation of equity or debt (if pro-vided by a third party) of subsidiaries and joint ventures

up to CHF 10 mill. D

from CHF 10 mill. to CHF 20 mill. D RPA

in excess of CHF 20 mill. D

3 Share or asset deal


MAY 2013

17/19

Matter AC

VR VRP KL

2.3 Guarantees, letter of comfort, letter of

awareness

up to CHF 5 mill. aggregated D

from CHF 5 mill. to CHF 10 mill. aggregated D RPA

in excess of CHF 10 mill. I4 D RPA

2.4 Asset Management

2.4.1 Holding: according to Asset Management rules5 D

2.4.2 Subsidiaries in line with Asset Management rules D

3 Financial reporting

Principles of accounting D RPA

4 Yearly overview of all guarantees 5 Principal BOD decision on Asset Management remains reserved


MAY 2013

18/19

Matter AC NCC VR VRP KL

4 Personal

Remuneration Chairman RPA D

Remuneration other members of BOD RPA D

4.1 CEO

4.1.1 engagement, dismissal RPA D

4.1.2 Terms RPA D

4.2 Member of KL

4.2.1 engagement, dismissal RPA D

4.2.2 Terms RPA D

4.2.3 Duties D RPA

4.3 Teams and Board subsidiaries

4.3.1 Composition D

4.3.2 Duties D

4.4 Area Manager, General Manager

4.4.1 Engagement and dismissal of the top 10

subsidiaries I D RPA

4.4.2 Others D

4.4.3 Terms D

4.5 Auditors Group and Sika AG

4.5.1 Engagement and dismissal RPA D6

4.5.2 Terms D RPA

4.6 Secretary to the Board D

4.7 Signatories Sika AG D RPA

6 Subject to the decision of the General Assembly


MAY 2013

19/19

Sika AG

Zugerstrasse 50

6341 Baar

Switzerland

www.sika.com

Author

Stefan Mösli

Phone: +41 58 436 68 00

Fax: +41 58 436 68 50

Mail: [email protected]

sika organisatigfhfonal

Documents

sika group annex

policies of sika

members of group management

corporate structure

chief executive body

group organisation

operational group management

executive management