3. Information concerning Board members and independence of Board members

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1 1(7) RULES OF PROCEDURE OF THE BOARD OF DIRECTORS OF BASWARE CORPORATION General The tasks and responsibilities of the Board of Directors are governed by the Companies Act, Basware Corporation s Articles of Association, resolutions passed by the Annual General Meeting, accounting rules and legislation and rules and recommendations of NASDAQ OMX Helsinki as well as Corporate Governance guidelines of the Securities Market Association. The rules of procedure are approved for each term of office. 2. Composition and selection of the Board of Directors In accordance with the Articles of Association, the Annual General Meeting will elect at minimum four (4) and at maximum eight (8) regular members to the Board of Directors. All members of the Board of Directors shall be qualified for the task and be able to dedicate sufficient amount of time for working as a member of the Board of Directors. The term of the members is approximately one year starting after the Annual General Meeting in which the members are elected and the term ends once the following Annual General Meeting has been finished. The number of consecutive terms in office is not limited. The members of the Board of Directors will elect among themselves a Chairman and a Vice-Chairman for the term of office. The Board of Directors appoints a person not being member of the Board of Directors as Secretary for Board of Directors for the term of office. The company s General Counsel or a person with sufficient knowledge can be appointed as secretary. The rules of procedure and meeting schedule of the Board of Directors will be presented and confirmed at the beginning of a new term of Board of Directors. 3. Information concerning Board members and independence of Board members Each member of the Board shall provide the company with information required to be reported to the insider register or any other register by virtue of the Securities Markets Act and the Companies Act, as well as the information specified in the Finnish Corporate Governance Code for Listed Companies. The members of the Board are bound by the insider guidelines of Basware and the NASDAQ OMX Helsinki Ltd.

2 2(7) Each member of the Board shall provide the Board of Directors with sufficient information for assessing his or her independence and notify of any changes to the information. The Board of Directors will annually assess the independence of its members in relation to the company and its major shareholders. 4. Remuneration of members of Board of Directors 5. Board committees 6. Duties of the Board of Directors The Annual General Meeting decides on the remuneration of the members of the Board of Directors. The Secretary of the Board of Directors is responsible to ensure that remunerations are paid to members of the Board of Directors. If necessary, the Board will decide on the establishment of an Audit Committee, Remuneration Committee and/or Nomination Committee and elect the committee members from among the Board members annually after the Annual General Meeting. In case such committee is established, the committee will decide on its own rules of procedures to be approved by the Board of Directors. The Board of Directors represents all shareholders and acts always in the best interest of the company and its shareholders. The task and aim of Board of Directors is, taking into account the relevant stakeholders, to direct company s business to achieve best possible shareholder value in the long term. The Board of Directors has responsibility of the organization and proper management of the company. All matters that have long-term effects on the company s business operations will be reviewed by the Board of Directors. 7. Providing information to the members of Board of Directors The members of the Board of Directors are notified without delay of all significant matters within the company. The members are notified about a stock exchange release related to such significant matters in advance where possible or at the latest when publishing takes place. 8. Tasks of the Chairman, Vice-Chairman and Secretary of the Board of Directors The responsibility of the Chairman of the Board of Directors is to lead the work of Board of Directors in such manner that its tasks and responsibilities are carried out efficiently and appropriately. The Chairman s task is to create a positive atmosphere for the work of the

3 3(7) Board of Directors, prepare and lead the meetings of the Board of Directors and to communicate with the CEO, members of the Board of Directors, owners and other relevant parties. The Chairman of the Board of Directors: 1. Prepares the agenda together with the CEO and the Secretary of the Board of Directors. 2. Monitors the company s business operations and communicates with the CEO. 3. Communicates with members of Board of Directors between meetings. 4. is responsible for planning and evaluation of the activities of the Board of Directors. 5. Ensures that the members of the Board of Directors are not conflicted in the decision-making. 6. Ensures that the minutes of the meetings represent the content of the meetings and signs the minutes. In case the Chairman of The Board of Directors is unable to attend, the Vice-Chairman acts as a deputy and takes care of tasks of the Chairman. Secretary of the Board of Directors: 1. Prepares the agenda together with the CEO and the Chairman of the Board of Directors. 2. Ensures that issues left unaddressed from the previous meetings and issues mentioned in the meeting schedule are included on the meeting agenda. 3. Is responsible for convening meetings according as per instructions of the Chairman and according to the meetings schedule and if necessary, convening additional meetings. 4. Delivers the agenda and other meeting documents to the members of the Board of Directors. 5. Advises in legal issues during the meeting. 6. Prepares and distributes the minutes of the meetings of the Board of Directors. 7. Keeps himself/herself updated with company matters regarding relations to the authorities and keeps the Board of Directors informed of the same. 9. Preparing and convening the meetings of the Board of Directors The Board of Directors meets according to the predetermined meeting schedule and agenda. The meeting schedule is prepared at the beginning of the term. The Secretary convenes the meetings of the Board of Directors according to the agreed meeting schedule. In addition the Secretary will convene an additional meeting when the Chairman, member of the Board of Directors or the CEO requests it.

4 4(7) In case the meeting of Board of Directors, due to pressing reason, needs to be convened immediately or with a short notice, exceptions from normal preparatory procedures can be made. Matters addressed in additional meetings of the Board of Directors are addressed in accordance with normal meeting procedures. The additional meeting of Board of Directors can also be arranged via conference call or as an meeting. 10. The agenda of meetings of Board of Directors The CEO and the Chairman are responsible for compiling the agenda, which the Secretary of the Board of Directors then delivers to the members. Issues to be included on the agenda including time reservation shall be submitted to the Chairman no later than three business days prior to the meeting. The agenda shall be sent to the participants by electronic means no later than 72 hours prior to the meeting. Other meeting materials shall be sent to the participants by electronic means no later than 48 hours prior to the meeting with the exception of material regarding the financial reporting which will be sent no later than 24 hours prior to the meeting. The agenda is reviewed and agreed when the meeting begins. Principally decisions are made by the Board of Directors only on those issues on the agenda that have been prepared in advance with properly grounded proposals and of which necessary meeting materials have been submitted in advance according to agreed schedule to the members of the Board of Directors. 11. Conduct of meetings and decisions of the Board of Directors The Board of Directors has quorum if more than half of its members are present at the meeting. Nevertheless, a decision cannot be made unless all members are provided the opportunity to participate in addressing a matter. The basic aim of the Board of Directors is to make unanimous decisions. If a unanimous decision cannot be made, and provided that the company s Articles of Association do not require a qualified majority decision on the issue, the decision is made in favor of the opinion that is supported by more than half of those present or, in the event of a tie, the Chairman s ruling. If one or more members of the Board of Directors are conflicted to participate in the decision-making, they shall refrain from the decision-making.

5 5(7) The CEO is entitled to be present and be heard at the meetings of the Board of Directors unless the Board of Directors in a specific issue decides otherwise. If an issue is not ready to be addressed or inadequately prepared, a member of Board of Directors is entitled to require further investigation and that the decision on that issue be postponed to the next meeting. Particularly important decisions require that every member of the Board of Directors states his/her position. 12. Meeting minutes of Board of Directors, the electronic archiving of the minutes and other material The meeting minutes of Board of Directors shall be provided to the Chairman by electronic means within a week after the meeting by the Secretary. When receiving the minutes the Chairman shall immediately comment to the Secretary any additions and changes required. After possible corrections the minutes are sent to all members of the Board of Directors by electronic means and are signed at the next physical meeting. If necessary and to avoid uncertainty the Secretary during the meeting when each issue on the agenda is decided, reads the decisions in the form as they are to be recorded in the minutes. The meeting minutes are signed by the Chairman, the Secretary and two inspectors of the minutes. The minutes of an meeting is signed by all of the members of Board of Directors. The meeting agendas of the Board of Directors, meeting minutes and other meeting materials shall be electronically archived by the company. The members of the Board of Directors are provided access to this information. 13. Performance evaluation of the Board of Directors The Board of Directors conducts annual self-evaluation of its operations and working methods. If necessary, and/or if the Board so decides, an external evaluator can also be used. The purpose of evaluation is to find out how the Board s actions have been realized and how its work could be developed further.

6 6(7) APPENDIX 1 TO THE RULES OF PROCEDURE OF BASWARE CORPORATION The following is a list of decisions that require decision or approval by the Board of Directors. This appendix complements that what is defined in the Articles of Association of Basware Corporation and the Finnish Companies Act. 1. The appointment and dismissal of the Chairman of the Board of Directors and the CEO. 2. Nomination of Board Committees and changing the composition of Committees. 3. Approval of the company s strategy and goals and monitoring the implementation thereof. 4. Confirming the company s management system as per proposal by the CEO, including the corporate structure, organization and appointment of the executive team. 5. Approval of company s operation plan, including target setting for revenue and cost planning, and monitoring their implementations. 6. Approval of interim reports, the annual accounts and annual reports and their publishing. 7. Decisions regarding profit guidance and possible changes therein, and publishing of such information. 8. Defining the financing and dividend policy, and submitting a proposal to the Annual General meeting about distribution of dividend. 9. Confirming the company s internal control and risk management practices, and monitoring their implementation. 10. Deciding on mergers and acquisition transactions, including selling, buying or transferring company s material assets, other decisions on acquisitions or disposing of company s material assets and other significant changes in the Company s business. 11. Approving all material investments or series of investments. Approving all new leasing agreements of commercial property. 12. Deciding on all agreements and business (including selling, leasing, transferring or pledging of fixed and financial assets or intellectual property rights) with the company s related parties. 13. Appointing and releasing the company s top management from their duties.

7 7(7) a) The top management includes the CEO and direct subordinates of the CEO. b) Approval of terms of employment of the CEO and the management team, including goal setting and confirming results thereof 14. Evaluating the CEO s work and providing feedback. 15. CEO s succession planning 16. Confirming the company s incentive system and policy, including the general principles of the annual bonus program and the remuneration frame. 17. Deciding on share options or other long-term incentive systems within the authorization given by the Annual General Meeting. 18. Redemption of company shares, granting of warrants, convertible bonds or warrant bonds as per the authorization given by the Annual General Meeting. 19. Deciding on establishing and closing affiliates, branch offices and representative offices. 20. Confirming the company s values and ethical principles and monitoring their implementation. 21. Developing the company s Corporate Governance procedures. 22. Developing and self-evaluating the activities of the Board of Directors. 23. Convening the Annual General Meeting The Board of Directors of Basware Corporation has confirmed these rules of procedure in its meeting on 27 th April 2016.