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DSW’s Fifth International Investors Conference 2006How can We Increase Shareholders’

Responsibility to Vote?

Christian Schwarz

SGL Carbon AG

December 6, 2006

Wiesbaden

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Overview of Contents:Overview of Contents:

Situation

Threat

Solution

Arguments

Opportunities

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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:Situation:

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Threat: 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

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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: Solution:

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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:Arguments:

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Opportunities: 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