Annual Report - Sonova Holding AG

Authorized share capital
As of March 31, 2006, the company had authorized share
capital of 3,301,120 registered shares with a par value of CHF
0.05 per share.
The Annual General Shareholders’ Meeting held on July 7,
2005, approved the creation of authorized share capital of
3,301,120 registered shares with a par value of CHF 0.05 per
share. The Board of Directors is authorized to exclude subscription
rights of shareholders and to allocate them to third parties
if the new shares are to be used for the acquisition of companies,
parts of companies, equity stakes or the financing of such
transactions. The authorized share capital of 3,301,120 registered
shares created on July 7, 2005, has not yet been used.
The authorization granted to the Board of Directors to augment
the company’s share capital with the authorized share capital
created expires on July 6, 2007.
Changes in shareholders’ equity
Regarding changes in shareholders’ equity see Note 3.6
to the Financial Statements of Phonak Holding AG (for the
third financial year prior to the reporting period, refer to the
same Note in the Annual Report 2004/05).
Restrictions on transferability
For restrictions on transferability, see the chapter entitled
“Voting rights restriction and representation” on page 31 of this
report.
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Corporate Governance
Board of Directors
The primary duty of the Board of Directors of Phonak
Holding AG is the overall direction of the company and the
supervision and control of the management. To this end, the
Board of Directors works in close collaboration with the Management
Board. The Articles of Association of Phonak Holding AG
state that the Board of Directors must consist of a minimum of
three and a maximum of nine members.
During the reporting period, the Board of Directors held six
meetings, one of which was a two-day strategy workshop.
Telephone conferences were organized to discuss time-sensitive
business issues. The Board of Directors receives consolidated
financial statements (balance sheet, income statement as well
as statement of cash flows) on a monthly, semi-annual, and
annual basis. In addition, the Board of Directors receives monthly
consolidated sales reports, providing data on turnover, average
selling prices, and units for each major product, subsidiary, and
market.
The Board of Directors approves resolutions and holds
elections with the majority of its members present at the meeting.
In the event of an equal number of votes, the Chairman has
the casting vote.
Elections and term of office
At the Annual General Shareholders’ Meeting, the shareholders
elect the Board of Directors of Phonak Holding AG.
In general, each member is elected for a period of three business
years. The term ends on the day of the ordinary Annual General
Shareholders’ Meeting for the last business year of the term. If,
during a term, a substitute is elected to the Board of Directors,
the newly elected member finishes the term of his predecessor.
Re-elections for successive terms are possible. A member of
the Board of Directors who reaches the age of 70 during his or
her term must resign at the next ordinary Annual General
Shareholders’ Meeting.