1. © COPYRIGHT 2006 AGILE SOFTWARE CORPORATION. Staying on Top of New Environmental Regulations in Electronics Dries D’hooghe

2. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 2 Agenda  Introduction  What’s Coming - Emerging Legislations  China  Japan  EuP  Reach  Preparing Today  Integrating Compliance in Your Business Processes

3. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 3 About Agile Software NASDAQ: AGIL #1 in Customer Satisfaction #1 in Time to Business Results Global leader in high tech, med device & SME Emerging leader in CPG & life sciences Collaborative Visualization, Outsourcing Enablement, Compliance, and Product Cost Mgmt 1,200+ PLM & 10,000 Visualization Customers across Multiple Industries Customer Success Leadership Leader in Business-ready Enterprise PLM Solutions World-class Global PLM Delivery Capability PLM Growth Leader HQ: San Jose, CA North America EMEA Asia Pacific Global R&D San Jose, CA & Canada Suzhou, China Karlsruhe, Germany Bangalore, India 725+ Employees Fastest Growing PLM Company

4. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 4 Blue Chip Customer Success Across Product-Driven Markets Medical Device Medical Device Industrial Equipment Industrial Equipment Electronics & High Tech Electronics & High Tech Consumer Packaged Goods Consumer Packaged Goods Aerospace & Defense Aerospace & Defense Automotive Pharmaceuticals

5. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 5 What’s Coming?

6. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 6 Companies are facing a fundamental shift in business that demands a sustainable, global environmental system California: Prop 65 restrictions on materials (e.g., lead cables) SB20 and SB50 set recycling limits in 2005 SB423 harmonizes with RoHS January 1, 2007 EU: RoHS and WEEE legislation requires action in 2005 China MII: WEEE in 2006, RoHS being finalized for 2006/2007 Korea: Industry agreements to limit certain materials and for products to be recyclable Japan: Recycle target active for household electronics and chemical label plans in draft; “Mitsubishi Green 150 initiative active” USA—Federal- Restricted Substances Overview Brazil: Existing recycling targets for electronic products and batteries EU: EuP Program Aug 2007—action required 2006 EU: REACH Program 2008+ votes in Nov 2005 Joint Industry Guide A,B, C: International Material Reporting Requirement COP-1 of the Stockholm POP’s Convention Colombia—Draft National Hazardous Waste Policy Basel Convention: Emerging Nations USA—Federal- Restricted Substances for Hg Mexico’s Final List of Substances for Toxic Release Inventory and Final Rules on Wood Packaging Chile’s proposal for a National Pollutant Tracking System USA—Federal- Energy Efficiency (external power supplies) Source: PRTM

7. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 7 Global Environmental Requirements Countries are rapidly implementing RoHS requirements:  China  Japan  Various U.S.A. states (California)  Korea - Combines RoHS, WEEE, and energy using products  Australia New chemicals directives  EU-REACH chemicals directive But energy efficiency, recycling, packaging, and battery requirements are also being updated.

8. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 8 China RoHS  China RoHS effective date March 1, 2007 for six standard substances  Labeling and information disclosure requirements on components  Product scope, certification process, and maximum concentration values still to be determined  Testing/Certification by Chinese labs only Hazardous/ toxic substance PbHgCdCr6+PBBPBDE Name of the Component

9. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 9 Japan RoHS / J-Moss Label  Changes to Law for Promotion of Effective Utilization of Resources  Not a ban for the 6 RoHS substances but labeling and declaration for certain products required  personal computers (including CRT and LCD displays), air conditioners, televisions, microwave ovens, clothes dryers, electric refrigerators, electric washing machines, and copying machines  Requires the orange “content mark” be applied if substances are used (unless exempt)  The green mark is voluntary and is more of an eco-label  If substances are used (even if covered by exemption), then material declaration is required

10. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 10 Australia  Covenant System for packaging. Each company is required to develop an “Action Plan” for reducing and recycling packaging

11. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 11 Energy-using Product (EuP) Directive  Member states must bring into force laws, regulations, and administrative provisions by August 11, 2007  Provides EU-wide rules for “eco- design”  Framework Directive does not introduce directly binding requirements for specific products, but defines conditions and criteria for setting such requirements (consumption of resources; emissions; waste generation; environmental impact of noise, vibrations, radiation and EMF;..)  Through subsequent implementing measures, requirements regarding environmentally relevant product characteristics (such as energy consumption) can be set and, once adopted, they can be adapted quickly The generic product lifecycle

12. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 12 REACH – Registration, Evaluation and Authorization of Chemicals  REACH aims to gather environmental data on 30,000 chemicals that have been on the world market, most without any significant toxicity testing.  REACH would apply not only to bulk chemicals, but also to chemical substances in "articles," which term is broadly defined to include electrical and electronic products. Articles must have a registration dossier that lists ingredient, how the chemicals are used and includes an assessment of toxicity  Registration dossiers are evaluated by authorities who can restrict or make the usage of a chemical dependent on an authorization.  Substances in products manufactured or imported in the EU. Responsibility for generating data and assessing the risks of uses of chemicals is placed on the producer or importer.  Requirements depend on properties, uses, and volumes of chemicals produced or imported (starting at 1 tonne/year/manufacturer)

13. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 13 What Does It All Mean?

14. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 14 It Means …  Making compliance a core part of your product development process  design for environment, design for disassembly, design for reuse, …  Not a one-time high effort data collection exercise in Excel, Access or stand-alone compliance tools focused on a particular regulation  Product compliance road-map  Staying up to date on regulations  Trade associations, in-house legal team, consultants, legislation tracking services  Developing a corporate environmental strategy in line with your business objectives  Lobbying? Alone or through trade group?  Review agreements with partners and suppliers?  Communication plan to mediate negative PR? Don’t-Ask- Don’t-Tell Yes/No Environmentally- Compliant Follower Sustainable Development Corporate Social Responsibility Source: PRTM

15. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 15 Integrating Compliance in Your Business Processes

16. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 16 PLM and the Risk of Non-Compliance Product Lifecycle Cash Flow ApprovalVolumePhase-Out Cash Flow Time Develop Next Generation Product Ramp to volume 3 Reduce cost & supply risk 4 Reduce service & warranty costs 5 Get to market faster 2 Develop Products “Right to Market” 1 ProtoNPI Reduce cost and risk of non-compliance 6

17. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 17 Overview of Environmental Compliance Processes Gather Store Act Analyze Supplier Declaration Manual Data Collection Import from Content Providers Compliance Data Management Product Compliance Validation Design for Environment, Disassembly, Reuse Compliance Corrective Action Change Collaboration

18. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 18 PLM Repository Product ? Closed Loop Compliance Process Design Corrective Actions Suppliers Product Changes Component Quality Mgmt. Comp. Eng. SCM Content Providers Legislation Updates IPC-1752 Product Product Rev B Procurement Shipping Marketing Sales Due Diligence DfX

19. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 19 Other Processes Touched by Compliance  New part request process  Part selection process  Compliance evaluation of proposed product changes  New product introduction process  Design for X reviews  Sourcing processes  Costing  Supplier qualification and score carding

20. Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 20 Summary  Sustainable environmental compliance requires a business framework across multiple systems and business processes.  Environmental compliance is not an afterthought. It touches the core of your company.  Be prepared and flexible as new regulations emerge.

21. © COPYRIGHT 2006 AGILE SOFTWARE CORPORATION. Thank you for attending this event Dries D’hooghe Director of Product Management and Strategy dries.dhooghe@agile.com Agile Software Corporation 6373 San Ignacio Avenue San Jose, CA 95119 Phone 408.284.4000 Fax 408.284.4002