Corporate Governance
SAP’s corporate governance officer monitored, and reported in detail to the Supervisory Board on, adherence to the recommendations in the Code with which SAP complies and to SAP’s Principles of Corporate Governance, which have been discontinued. There were no conflicts of interests with regard to Supervisory Board members pursuant to the Code, section 5.5.2. The Supervisory Board granted its consent to the conclusion of contracts with Supervisory Board members where its consent was required. Prior to the constituent session of the newly elected Supervisory Board, the Supervisory Board then in office had held four meetings, although one Supervisory Board member attended less than half of these meetings. Moreover, one of the newly elected Supervisory Board members, who has been in office since May 10, 2007, attended less than half of the five meetings of the new Supervisory Board.
Corporate governance is a process of continuous development at SAP. Thus, we examined the new and extended recommendations and suggestions of the Code that were announced in June 2007. In the past, SAP has continually reviewed its Principles of Corporate Governance and, where necessary, adapted them to changes and additions to the Code as they were introduced. When we reviewed our Principles in October 2007, we concluded that the gap between them and the Code had greatly reduced over time and that changes to the legislation and current practice had made provisions in the Principles obsolete. The continuously evolving Code, together with the increase in pertinent legislation, has made the maintenance of our own Principles redundant. SAP has therefore discontinued its Principles of Corporate Governance. In the future, when discussing corporate governance standards, we will refer to the Code only. Detailed information about compliance with the Code is available in the Executive and Supervisory Boards’ corporate governance report, as required by section 3.10 of the Code.
Shareholders’ Legal Proceedings Against AGM Resolutions
Shareholders brought legal proceedings against individual resolutions of the Annual General Meeting of Shareholders on May 9, 2006. As well as the increase in subscribed capital from corporate resources, they challenged the resolutions formally approving the acts of the Executive and Supervisory Boards, the change to Supervisory Board compensation, the powers to acquire and use treasury shares, and the powers to use equity derivatives to repurchase shares. The increase in subscribed capital from corporate resources and further changes to the Articles of Incorporation approved by the Annual General Meeting of Shareholders on May 9, 2006, were entered in the commercial register on December 15, 2006, after the court granted an interim release, and thus became effective. The Heidelberg district court had already ruled against the main actions at the first instance. The plaintiffs then filed an appeal against the ruling with the regional appellate court in Karlsruhe, which means the main actions have not yet ended. Both the Supervisory and Executive Boards see no reason for nullifying or challenging the resolutions of the Annual General Meeting of Shareholders and are therefore jointly defending them.
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