Supervisory Board Meetings
In 2007, there were four ordinary, one constituent, and four extraordinary Supervisory Board meetings. All resolutions of the Supervisory Board were made by the full committee in these meetings. The Supervisory Board discussed the following topics and, where necessary, adopted resolutions:
At our February 15, 2007, meeting, we discussed the 2006 fourth
quarter and full-year results, business over the year, and
implementation of the Company’s strategy in 2006. We also
received and discussed a report on the strategy for 2007 from
the Executive Board and agreed to the planning for 2007
presented by the Executive Board, particularly the capital
expenditure budget and cash plan. After an in-depth discussion,
the Supervisory Board consented to the maximum total budget for
awarding virtual stock options under the new SAP Stock Option
Plan (SOP) 2007 and for awarding stock appreciation rights
(STARs). It also consented to the appointment of a corporate
officer of the SAP Group and approved a legal transaction
between SAP AG and a Supervisory Board member. The meeting
received annual reports from the corporate governance officer
and the compliance officer. The reports did not identify any
breaches of the applicable rules or any special occurrences. We
also received a summary from the Executive Board of the equity
investments made in 2006. The Compensation Committee, Finance
and Investment Committee, Technology Committee, and Audit
Committee reported on topics discussed at their recent meetings.
The Technology Committee’s report dealt with medium-term
product planning and the latest technological developments.
Following the Compensation Committee’s report and at its
recommendation, the Supervisory Board decided to extend Henning
Kagermann’s term as CEO of SAP AG from January 1, 2008,
through May 31, 2009. This extension is in line with the usual
practice of the Supervisory Board when extending the term of
office of Executive Board members over the age of 60, which is
to only grant an extension of approximately one year.
At its March 21, 2007, meeting, the Supervisory Board focused on the documents concerning the 2006 financial statements, the audit conducted by KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft (KPMG), and the Executive Board’s proposed resolution on the appropriation of retained earnings for 2006. The Audit Committee reported, among other things, on the form and scope of its examination of the documents concerning the financial statements and recommended that the Supervisory Board approve them. The auditor attended the meeting and reported in detail on the results of its audit. The auditor then discussed the results with the Supervisory Board and answered its questions. The Supervisory Board approved the audit. After the final result of its own audit, the Supervisory Board did not raise any objections to the financial statements for 2006 and it approved them. We checked and endorsed the Executive Board’s proposal to appropriate retained earnings. In addition, we passed our proposed resolutions for the agenda of the May 2007 Annual General Meeting of Shareholders, which included approving the proposal to the Meeting concerning the election of an auditor. Also in relation to the agenda for the May 2007 Annual General Meeting of Shareholders, the shareholder representatives on the Supervisory Board voted on the proposed candidates for election as shareholder representatives on the Supervisory Board. A further item on the agenda at this meeting was a report on business in the first quarter of 2007. The Supervisory Board approved various legal trans actions between SAP and individual Executive and Supervisory Board members. The General Committee, Compensation Committee, Technology Committee, and Finance and Investment Committee gave reports on their recent committee meetings.
In our extraordinary meeting on March 28, 2007, we dealt with personnel changes on the Executive Board. The chairperson of the Supervisory Board explained the wish of Executive Board member Shai Agassi to leave the company by mutual agreement. The Supervisory Board consented to this and asked the Compensation Committee to negotiate and conclude a termination agreement with Shai Agassi. The Supervisory Board then decided to appoint Léo Apotheker as deputy CEO. The Supervisory Board also approved the appointment of a corporate officer of the SAP Group.
Our extraordinary meeting on May 4, 2007, focused on the acquisition of OutlookSoft Corporation of Stamford, Connecticut, United States. The Executive Board presented the planned transaction to the Supervisory Board for approval. As preparation for the resolution, the Finance and Investment Committee reported on its meeting of May 3, 2007, at which it had concentrated on the possible acquisition of OutlookSoft and come to a positive conclusion. We discussed the technological and financial aspects of the acquisition in detail with the Executive Board. The Supervisory Board then approved the acquisition of the company.
At the close of the Annual General Meeting of Shareholders on May 10, 2007, the term of office of all Supervisory Board members then in office ended. Therefore, the Annual General Meeting of Shareholders elected eight shareholder representatives. The regular election of the eight employee representatives on the Supervisory Board had taken place previously in April 2007. Immediately after the Annual General Meeting of Shareholders, the newly elected Supervisory Board held its constituent session and elected Hasso Plattner as its chairperson and Lars Lamadé as his deputy. The Supervisory Board also appointed the members of its individual committees.
At the meeting on July 27, 2007, we mainly discussed business in the second quarter of 2007, an assessment of the first half of the year and the forecast for the second half, and further planning. The Executive Board informed us about progress in the development of SAP Business ByDesign and about SAP’s competitive situation in general.
Furthermore, the Supervisory Board approved the foundation of two new companies in Saudi Arabia and one in Dubai to take over the software licensing and maintenance business of previous partner SAP Arabia, including the conditions of the acquisition, which the Executive Board explained. The Executive Board also reported to us on the status of the lawsuit filed by Oracle against SAP AG and its subsidiary TomorrowNow. The Finance and Investment Committee, Audit Committee, Technology Committee, and Compensation Committee reported on the work at their last committee meetings.
At two extraordinary meetings on September 27, 2007, and October
7, 2007, the Supervisory Board thoroughly discussed the
preparation and structure of SAP’s tender offer to the
shareholders of Business Objects S.A. In the September 27, 2007,
meeting, the Executive Board provided extensive information
about the main reasons behind the planned acquisition and about
its financing. It also talked in detail about Business Object
S.A.’s rating in relation to the planned transaction, the
integration strategy, possible synergy effects, and the risks of
the acquisition. Afterwards, the Supervisory Board authorized
the Executive Board to enter into negotiations on the conclusion
of a tender offer agreement with Business Objects S.A. It also
authorized the Finance and Investment Committee to approve a
purchase price range for the Business Objects shares to enable
the Executive Board to negotiate with the management of Business
Objects S.A. on the basis of a specific purchase price
indication. In the October 7, 2007, meeting, the Executive Board
provided us with detailed information about the progress and
outcome of the negotiations that had been held in the meantime
and about the structure of the tender offer’s financing.
Moreover, it explained the individual legal steps and the
conditions of the tender offer. After an in-depth discussion,
the Supervisory Board consented to the conclusion of the tender
offer agreement with Business Objects S.A. and the conclusion of
financing contracts at the conditions presented by the Executive
Board.
The topics covered at the Supervisory Board meeting on October 26, 2007, were business in the third quarter 2007, the forecast for the fourth quarter 2007, and the forecast for fiscal year 2008. The Executive Board reported to us on SAP’s competitive situation, the activities of the main competitors, and the status of the legal proceedings with Oracle in the United States. We approved an amendment to the Articles of Incorporation, which was required due to the cancellation of 23 million shares and the resulting decrease in capital stock from €1,269,040,112 to €1,246,040,112. To implement the new and extended requirements of the German Corporate Governance Code (“Code”), the Supervisory Board decided to amend the rules of procedure of the Audit Committee, adding to them responsibility for monitoring compliance and ensuring the compliance of the control structures implemented by the Executive Board. To reflect new recommendations in the Code, we decided to form a Supervisory Board Nomination Committee. In addition, the Supervisory Board determined the independence of Supervisory Board members and approved the declaration of implementation of the Code. In relation to this, we agreed to stop updating SAP’s Principles of Corporate Governance because the continuously evolving Code, together with the increase in pertinent legislation, has made the maintenance of our own Principles redundant. The Finance and Investment Committee, Audit Committee, Compensation Committee, and Technology Committee reported on the work at their last committee meetings.
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