- 1 - DSW’s Fifth International Investors Conference 2006 How can We Increase Shareholders’ Responsibility to Vote? Christian Schwarz SGL Carbon AG December.

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Presentation transcript:

- 1 - DSW’s Fifth International Investors Conference 2006 How can We Increase Shareholders’ Responsibility to Vote? Christian Schwarz SGL Carbon AG December 6, 2006 Wiesbaden

- 2 - Overview of Contents:  Situation  Threat  Solution  Arguments  Opportunities

- 3 - Possibilities: Legal Data Warehouse Possibilities: Legal Data Warehouse  Presence of shareholders‘ equity declines at annual general meetings of German corporations, particularly at those corporations with a strong broadly based share ownership structure (only about 25% – 45% presence of shareholders’ equity) Risk that a small group of short-term oriented shareholders will represent the majority of votes in the shareholder meeting using this majority to - in the end - negatively influence the long-term capital appreciation of the remaining shareholders and the company. Situation:

- 4 - Threat:  Minority decides in a way which is not oriented to sustain corporate success and value and not supported by the majority of all shareholders.  Divestiture/Break-up of companies or assets resulting in a loss of jobs. Consequence: overall economic disadvantages/burdens  Weakening of Germany as a financial marketplace and as a place to do business

- 5 - Possibilities: Legal Data Warehouse Possibilities: Legal Data Warehouse  Amendments of corporate laws in order to involve all shareholders eligible to vote (100% of registered capital) 100% of the registered capital is present for voting on the day of the AGM If shareholders agree with the proposal of the management, no action necessary. Their votes will be automatically evaluated as approval (expansion of the already existing „subtraction principle“) If shareholders are against the proposal of the management, they have the following options: (1.) to attend the AGM in person or (2.) to appoint a proxy of their own choice in order to vote against the proposals of the management, or to abstain. Solution:

- 6 - Possibilities: Legal Data Warehouse Possibilities: Legal Data Warehouse 1.Legal implementation possible  Voting during the AGM is a manifestation of will  Rejection regarding this method of resolution:  if law demanded a clear reaction to the outside  if not reacting or silence were not sufficient as a manifestation of will under the legal definition But the opposite is the case: The law has even regulated these kinds of cases under the statutes for personal legal transactions.  No misgivings under constitutional law 2.Respect of Decision-making authority of all shareholders 3.Reduction of bureaucracy and administrative processes Arguments:

- 7 - Opportunities: 1.Involvement of all shareholders (100% of registered capital) in voting 2.Reduction of administrative processes (reduction of bureaucracy) 3.Avoidance of destructive influence of short-term oriented shareholders on German corporations 4.Protection of jobs and thus strengthening of Germany as a place to do business and as a financial market place