RULES FOR OBTAINING THE "FQF" QUALITY SEAL

The Fleurier Quality Foundation, founded on 5 June 2001, has the following objectives:

1) to establish criteria for technical and aesthetic quality in watchmaking, in accordance with the highest principles of fine watchmaking;

2) to supply, with full independence, a quality label in the form of a written certificate and a logo on the timepiece examined, stating that it corresponds to the criteria defined, and without identifying the origin of the piece in question;

3) to contribute, within the limits of its resources, towards providing training in fine watchmaking.

The purpose of these rules is to provide details concerning the conditions for obtaining the "FQ" quality label for a watchmaking mechanism in accordance with the technical criteria defined by the Fleurier Quality Foundation in the annexed document entitled "Technical criteria of the Fleurier Quality Foundation". This can be consulted at the Federal Institute of Intellectual Property (hereinafter IGE / IFPI) and at the Foundation's headquarters in Fleurier.

These rules were adopted by the Foundation Council on 5 June 2001.


IMPLEMENTING REGULATIONS

I. PROCEDURE

Article 1 - General aspects

The "FQ" quality label applies to mechanical watches and finished watches, whether or not these form part of an item of jewellery, that are produced in series in Switzerland or in Europe.

To be awarded the "FQ" quality label, a watch must have passed the following stages of control:

1) Its reliability must be tested by means of a Chronofiable ageing test carried out at the Dubois SA laboratory in La Chaux-de-Fonds, and confirmed by a certificate issued by the aforementioned company. The costs of this process are borne by the applicant;

2) The movement must have passed the Swiss Official Chronometer Control test (hereinafter COSC), be issued with a certificate to confirm this, and must be numbered;

3) The finished watch must then comply with the quality standards drawn up by the Foundation and defined in the annexed document "Technical criteria of the Fleurier Quality Foundation", which can be consulted at the IGI / IFPI and at the Foundation's headquarters. The case must bear an individual number.


Article 2 - Verification of the criteria

The Technical Committee of the Fleurier Quality Foundation receives the request for a certification of conformity from the third party applying for the right to use the quality label (hereinafter the applicant). It verifies the documents from Chronofiable SA and COSC, and proceeds to an examination of the watch in accordance with the criteria defined in the annexed document "Technical criteria of the Fleurier Quality Foundation".

This control is carried out at Fleurier, on the premises of the Foundation and under the responsibility of the Chairman of the Technical Committee or possibly by its Vice Chairman, an assessor chosen from the list of certified assessors, and a watchmaker responsible for controls who is employed by the Foundation.


Article 3 - Test procedure

The applicant deposits all pieces for which the quality label is required at the offices of the Foundation, under the responsibility of the latter. The pieces must be in working order and the movement permanently installed in the case. Provisional or temporary watch cases are not permitted.

During this stage, the following processes are carried out:

1) examination of whether the watches comply with the criteria stated in the annexed document;

2) a test of whether the watches are in working order by a simulation of conditions to which it is subject when in use by the wearer. This test can be carried out on a statistical sampling basis.


Article 4 - Result

If the results are positive, the Technical Committee issues a decision that is communicated to the Foundation Council and registers the numbers of the movements and cases corresponding to the series tested.


Article 4 - Résultat

En cas de résultat positif, la Commission technique rend une décision communiquée au Conseil de Fondation et enregistre la numérotation des mouvements et des boîtes correspondant à la série contrôlée.


Article 5 Certification

The document confirming certified compliance with the criteria defined by the Fleurier Quality Foundation ("FQ" quality label) is signed by the President of the Foundation and the Chairman of the Technical Committee. This signature may take electronic form. It permits the use of the "FQ" logo on the certified watch and the public use of this fact, under the conditions stated in Article 10 of the present document.


Article 6 - Appeals

In the case of contesting a decision to refuse the quality label, the applicant may appeal to the Foundation Council. The Council hears both parties (Technical Committee and applicant) prior to taking a decision.

The Council's decision may be appealed against by means of an arbitration process before a single judge, i.e. the arbitration body foreseen at the end of Article 10 of the Foundation's statutes.

The decision of the arbitration judge is not open to appeal.

The applicant may at all times present a new request for certification once the defaults that caused the refusal of certification have been corrected.

The fees and expenses incurred for the first procedure cannot be transferred to the new application.


Article 7 - Archiving

The tests that are carried out prior to the certification process, i.e. the COSC test and the Chronofiable tests, as well as the results of the test regarding compliance with the criteria contained in the annexed document "Technical criteria of the Fleurier Quality Foundation" are consigned to a file containing the test results and the number of pieces that have been awarded the quality label and logo.

These archives may be consulted by the company whose watches have been certified.

Any person who acquires a piece that is numbered and has been controlled may request, against payment, an extract certifying that the watch that he owns has obtained certification.


Article 8 - Logo

The "FQ" logo is marked in an indelible manner and one that is at least visible on the exterior of the watch. It is mandatory for the logo to be marked on the movement, and it may also be marked on another element that constitutes part of the watch, with the exclusion of the bracelet or strap.
La décision du juge arbitre est sans appel.

The logo is placed under the responsibility of the applicant, and at the applicant's expense, but under the control of the Technical Committee.


Article 9 - Follow-up and control

The Technical Committee may at all times proceed to an additional analysis, at random, in the form of an unannounced sample selected during the control. The applicant must however be notified of the process and must delegate a representative to be present during the analysis.


Article 10 - Use of the quality label

The applicant who has obtained the quality label for one or several models may only use the label in communications concerning the models that have been certified as complying with the "FQ" logo. He may under no circumstances make use of it for a brand in general, to promote all his products or those products that have not successfully undergone the control procedure entitling them to the "FQ" logo. Any failure to comply will be subject to sanctions foreseen in Article 12 of this document.


II. COSTS AND PROCEDURE


Article 11 Fees and costs

The applicant must pay the following:

1) a basic annual fee of CH 10,000.- (ten thousand francs), independently of the quantity of pieces or models controlled, for a twelve-month period during which he presents watches for certification;

2) a fee of CHF 45.- (forty-five francs) per certified watch, even if the certification is based on random sampling;

3) the costs of additional analysis (Art. 11).


Article 12 - Sanctions

In the case of abuse of the quality label in the sense of Article 10 of this document, the applicant is subject to sanctions. Depending on the gravity of the infringements, these range from a simple warning to a maximum fine of CHF 100,000.-, with rights expressly observed to claim for additional damages and interest.

For serious cases, notably for repeated infringements of Article 10 and failure to take action following warnings, a decision may be taken to withdraw the right to use the quality label. Withdrawal of the right to use the quality label may also be cumulated with the fine that is levied.

When the abuse of the quality label concerns takes the form of publicity that is not in compliance with the rules, the person who infringes the rules may also be required to publish rectification notices in the same media, using the same dimensions as the publicity in question.

The Foundation Council is free to decide on the gravity of the infringement.


Article 13 Procedure for revising the rules

These rules may be revised upon proposals by the Technical Committee or the Foundation Council. They can only be modified if both bodies ratify proposals by a majority vote.


Article 14 - Adoption and validity

These rules were adopted during the constitution of the Foundations. They were revised this day and become valid immediately.



Fleurier, 26 June 2003