The remuneration system used by Bucher Industries has been designed to ensure that management focuses on the inter ests of the Group, the shareholders and other stakeholders. The individual remuneration components take account of the sustained short- and long-term development of the Group and support a healthy, performance-focused approach. As the objective is also to attract and retain highly qualified managers and specialists, the focus falls on competitive salaries with a moderate fixed component and performance-related components paid in cash as well as in the form of shares and options in the company. The remuneration components include a base salary, the bonus plan, the long-term bonus plan and the share option plan. The performancerelated components are paid out in spring of the current year after the board of directors has approved the annual accounts for the year under review.

The base salary is determined in consideration of the countryspecific market data for the position in question as well as the employee's level of individual responsibility and experience. The base salary is also compared to an international grading system every three to five years and adjust ed by the compensation committee if necessary.

The bonus is a performance-related component of the remuneration of the members of group management and senior management which is paid out in cash. The bonus depends on the achievement of the annual financial objectives of the Group and the divisions as well as the attainment of the manager's personal objectives. The bonus bandwidth for the chief executive officer is 0 to 100 % and for all other members of group management 0-80 % of the base salary, depending on the degree of objective attainment. The bonuses for the chief executive officer and the chief financial officer are determined by the financial criteria "Group net profit" and the Group's "return on net operating assets RONOA." The bonuses of the other group management members are determined by the financial criteria "operating profit EBIT" and "net operating
assets as a percentage of sales" for their division.

The long-term bonus is a long-term, share-based and performance-related component of the remuneration of the chairman of the board of directors and the members of group management. The financial objectives are determined by the three-year medium term planning of the Group and the financial criteria are "profit per share" and "return on net operating assets RONOA." The number of shares to be awarded and the financial targets are determined annually by the compensation committee on request of the chief executive officer before the beginning of the next three-year assessment period. The long-term bonus plan bandwidth is 0 to 150 % of shares awarded, depending on the degree of objective attainment, whereby the value of shares awared cannot exceed the limit of CHF 400 000 for the chairman of the board, CHF 900 000 for the chief executive officer and CHF 120 000 for all other group management members. The acquired shares are blocked for three years. The board of directors revised the allocation criteria during the year under review without changing the above mentioned limits. The previous system of allocating a fixed number of shares was replaced by a system where the number of shares to be awarded is calculated on the basis of an annually determined percentage of the base salary and the average share price during the financial year preceding the assessment period. If the objectives are reached, the applicable percentage is 50 % of the base salary for the chairman of the board of directors, 80 % for the chief executive officer, and 10-20 % for the other group management members. This system will apply for the first time to the 2008 to 2010 assessment period. The old system of allocating a fixed number of shares still applies to the assessment periods 2006 to 2008 and 2007 to 2009.

Options are issued under the share option plan. In addition to the members of group management, the Group's and division's senior management also benefit from the share option plan. The compensation committee appoints the participants on request of the chief executive officer. The issue price of the options is determined on the basis of the average day-end price of the share on the last 20 trading days before the annual date of allocation. The issue price determined in this manner cannot be changed. The option term is ten years. The options are released for exercise in equal tranches over a period of four years. The award of a fixed number of options depends on the position and level of responsibility of the participant. Each option entitles the holder to purchase one share.

There are no systems regarding severance pay, and no severance payments were made in the reporting year. When the employment relationship is terminated for reasons other than notice of termination, the bonus and long-term bonus are paid out on a pro rata basis in the year in which the board of directors approved the attainment of objectives. If notice of termination of employment is given, all rights under the long-term bonus plan and all options that have not yet fallen due lapse. Options must be exercised within six months of the termination of employment.

The compensation committee periodically reviews the remuneration system and individual components and proposes any adjustments that may be needed to the board of directors. The compensation committee also submits an annual proposal regarding the remuneration for the chairman and board members to the board of directors every year. In compliance with the rules of the remuneration system, the compensation committee on request of the chief executive officer determines the individual salary components and salaries for the members 23 of group management every year. On request of the chief executive officer the compensation committee also selects the members of senior management who will participate in the share option plan. The remuneration for the board of directors and group management is presented on an accrual basis.

Members of the board receive a remuneration that is not performance-related and is proposed by the compensation committee and determined by the full board every year. The remuneration comprises a base amount in the form of share awards plus cash allowances for their work on committees and for expenses. In addition to the base amount the chairman also receives a base salary plus share awards under the performance- related long-term bonus plan. The base amount is revised annually. In the reporting year the chairman received CHF 120 000, the vice-chairman CHF 105 000, and the members of the board CHF 90 000 each. The share awards were made on the basis of the average share price in the report ing year of CHF 198.10 and were valued at the year-end price of CHF 261.00. These shares are blocked for three years. The compensation paid to the board members and the participation rights held by them at the end of the year under review are set out on pages 20 and 21 of this annual report.

Members of group management receive a fixed base salary commensurate with their responsibilities and experience, an annual performance-related cash bonus, shares in accordance with the long-term bonus plan and options in accordance with the share option plan. Other payments include representation expenses allowances and a middle class company car as well as contributions to the extra-mandatory pension fund. Shares allocated under the long-term bonus plan were valued at the year-end price of CHF 261.00. The options were valued according to the Black-Scholes method, and the price was CHF 100.24 per option in 2007. In the year under review, objective attainment for the performance-related components was between 95 % and 180 %. The chief executive officer received a performance-related bonus equalling 228 % of his base salary, while the other group management members received a bonus of 118 %. The total amounts paid in the reporting year as well as the participation rights held at the end of 2007 by the chief executive officer and the members of group management are set out on pages 22 and 23 of this annual report.

No member of the board of directors, group management or including connected persons received any additional remuneration, fees or loans during the year.