Countermotions and election proposals for Deutsche Telekom AG's Annual General Meeting on May 15, 2008, in Cologne.
On April 4, 2008, the notice convening the Company's ordinary Annual General Meeting on May 15, 2008, along with the agenda and management's proposed resolutions, was published in the electronic Federal Gazette. To the extent that shareholders have submitted countermotions or election proposals to the Company in this connection and these must be made available pursuant to sections §§ 126 and 127 of the German Stock Corporation Act, we reproduce them below, including the name of each shareholder and the respective rationale:
(Last updated: 05/05/2008)
The shareholder, Christel Broszeit, Ratingen, has submitted the following countermotion regarding agenda item 2:
"Countermotion
To increase shareholder participation in the shareholders' meeting and compensate active shareholders for the effort involved in preparing, the amount of the dividend should depend on whether voting rights are exercised. Shareholders who actively exercise their voting rights should receive a supplement. I propose:
The proposed dividend payment pursuant to the agenda item should be rejected."
The shareholder, Paul Schmitz, Bad Münstereifel, has submitted the following nomination proposal for agenda items 7 and 8:
- Motion A -
"I hereby apply, as a shareholder, for the Supervisory Board, pursuant to § Section 96 (1); Section 101 AktG, in conjunction with § Section 7 (1) no. 1 of the Codetermination Act, to make my professional qualifications available for my candidacy for a seat on the Supervisory Board at the upcoming Annual General Meeting; with respect to a specific agenda item, I would like to disclose my expert competence, skills, and experience to the Supervisory Board without restriction. My application is to be regarded as a request to announce an item for resolution at the upcoming Annual General Meeting and to publish it pursuant to the legal basis.
Information about myself:
I am 70 years old, a member of the Association of German Engineers, a mechanical engineer by profession, and completed an apprenticeship as a machine fitter.
My professional focus has been on mechanical engineering design, the chemical industry, production supervision, and the construction of facilities for the mass production of consumer goods, as well as pipeline construction, value analysis and contribution margin accounting, and the technical and pricing design of industrial refrigeration systems.
I have no conflict of interest in contributing to the Supervisory Board for the benefit of Telekom; my expertise takes priority and is transparent, and I cannot offer purely political qualifications. I also expressly reject serving Telekom on the Supervisory Board while at the same time supporting a strike against that same company; this would meet with my strong opposition.
I do not hold a seat on the Supervisory Board of any other companies.”
Shareholder Gerhard Moser, Stuttgart, has submitted the following countermotion regarding agenda item 3:
“Shareholder Gerhard Moser, Stuttgart, submits the following countermotion:
Agenda item 3: Discharge of the Board of Management
The Board of Management should not be discharged
Reasoning:
In rejecting a countermotion for the 2006 AGM, the Board of Management states:
(Quote) As part of its strategy, Deutsche Telekom has also launched a whole range of measures for its business in Germany to significantly improve the Company's service and thus its image in the eyes of customers. These include, for example, expanding its own T-Punkt sales network and significantly improving the accessibility of its call centers. (End of quote)
The measures allegedly taken cannot stop the loss of customers. The trust placed in the former monopolist is undermined by a lack of competence (In front of T-Shops stood suitably inflated pink PVC figures and entertainers who, however, have no idea about the actual line of business. Many losses of reputation and the associated driving away of long-standing customers occurred in connection with 0190 numbers accidentally dialed by children and Telekom's uncompromising billing practices. The in-house lawyers were apparently unable to recognize the illegality and waited until the legislature intervened (and yet capital owners are supposed to recognize that the T share is a risky NeueMarkt share)
Based on my own bad experience, one of the measures must presumably also have been outsourcing marketing calls to Call Center, which, against the wishes of the person called, change contracts for the sake of their own bonus. The comparison with high-pressure magazine-sales squads and the competitor […] suggests itself.“
The shareholder, Michael Russow, Leonberg, has submitted the following countermotion regarding agenda item 7:
"Subject: Countermotion regarding the 2008 DTAG AGM – agenda item 7
Reference: Shareholder number […]
The Annual General Meeting is requested to resolve as follows:
· The election of Prof. Dr. Ulrich Lehrer to the DTAG Supervisory Board shall not be approved.
· The DTAG Supervisory Board is requested to propose, as a member to be elected to the DTAG Supervisory Board in the future, a person with sufficient business and legal expertise who is not a member of the Board of Management and/or a member of another company's Supervisory Board that is required by law to be established."
The shareholder, Michael Russow, Leonberg, has submitted the following countermotion regarding agenda item 8:
"Subject: Countermotion for the 2008 DTAG Annual General Meeting - Agenda Item 8
Reference: Shareholder number […]
The Annual General Meeting is requested to resolve:
· The election of Mr. Hans Martin Bury to DTAG's Supervisory Board is not approved.
· That DTAG's Supervisory Board propose an individual with sufficient business and legal expertise,
who is not a member of the Board of Management and/or a member of the Supervisory Board of another company that is required by law to be established."
The shareholder Dietrich-E. Kutz, Biberach, has submitted the following countermotions regarding agenda items 3, 4, 6, 7, and 8:
“Countermotions for the ordinary Annual General Meeting on May 15, 2008, in Cologne
- Motions to vote separately on the resolutions concerning approval of the actions of the Board of Management (agenda item 3) and the Supervisory Board (agenda item 4), and not to approve their actions
- Motion not to grant approval for the resolution on the acquisition of treasury shares (agenda item 6), here for the use of stock options
- Motion not to approve elections to the Supervisory Board (agenda items 7 and 8) due to the accumulation of mandates.
Reasoning:
+ DTAG is still involved in legal disputes concerning the prospectus for the 2000 capital increase and the absorption of T-Online at one-third of the issue price after three years as an independent company. In the latter case, the EUR 4 billion cash reserve was also taken over as a welcome extra, to the detriment of T-Online's independent shareholders. What kind of attitude is that?
This harms the Company and has a lasting impact on its share price. The then-unprecedented DM 300 million advertising campaign and the stock options for the Management Board remain a glaring negative example for Germany's equity culture.
And now the disreputable comparison of T-Mobile with Jan Ullrich, [...]!
Customer losses due to insufficient customer focus and service also remain an unresolved task!
+ No person may be elected as a representative to the Supervisory Board if they hold more than three
+ + Supervisory Board mandates. Monitoring the Company's Board of Management requires a level of commitment that cannot be provided if the demands of other mandates become excessive.
+ Good Corporate Governance prohibits such practices and has
+ proven extraordinarily harmful in the past.
Please keep former T-Online shareholders informed about the progress of the legal dispute and the claims accruing to them.
Please make my counterproposals available in accordance with the AktG. I ask the shareholders to vote in favor of my proposals.”
The shareholders Wolfgang and Georgine Range, of Höchberg, have submitted the following counterproposal regarding agenda item 3:
During these calls, the sales representatives implied that the calls had resulted in orders for additional or other products from your company, although this was not the case. This led customers to receive unwanted “order confirmations” from you, deliveries of additional Tcom products with invoices, etc. Correcting these matters required further calls from you and correspondence, as one of your processing (service) offices passed the matter to the next and then on to another, until finally—as we learned—7 (in words: seven!) months ago, we were informed that “final processing would, however, take some time” (your letter of 09/10/2007 from Deutsche Telekom AG, T-Com, P.O. Box 14 40, 35504 Butzbach). The “matter” then came to a stop, and we received no further unwanted contact.
In response to an inquiry during such marketing calls, one of your unfortunate sales representatives told an acquaintance of ours that this type of telephone marketing was carried out under pressure from above.
We consider this type of advertising extremely damaging to business and believe that appropriate consequences should be drawn.”
Shareholder Gerhard Bauer, Offenbach, submitted the following countermotion regarding agenda item 3:
I support the request made by shareholder Gerhard Moser, Stuttgart:
Agenda item 3: Discharge of the Board of Management
The Board of Management should not be discharged
Reasons:
While competitors (e.g., Arcor or Alice) offer a monthly Flat rate (Internet + telephone) for 34.90 euros, Telekom charges 48.95 euros for the same service. In other words, for the same service, which costs 1,174.80 euros at Telekom over 24 months, the aforementioned competitors charge only 837.60 euros. The additional cost therefore amounts to a considerable 337.20 euros for me over 24 months.
At Telekom, however, free nationwide calls apply only to people who are also still customers of Deutsche Telekom's landline network. In other words, if I, as a Telekom customer, call someone who has a contract with Arcor or Alice, my call is no longer free but is charged at a hefty rate.
And since, naturally, almost all my acquaintances have now turned their backs on Telekom, it is time for me, too, to seriously consider switching providers, especially considering the experiences I have recently had to endure again.
In fall 2007, Hessischer Rundfunk reported in its business magazine MEX on a retiree who was talked into a Flat rate Internet plan by aggressive Telekom telemarketers, even though he does not own a computer. Granted, he could have asked what a Flat rate was in the first place; but Telekom telemarketers often proceed in an extremely repetitive and dismissive manner, catching people off guard with their calls. Those called are unprepared, so they often cannot respond appropriately to the situation. In summer 2007, I received 10 calls in fewer than 10 days!
It is outrageous to have private individuals called at home without their personal consent, which is prohibited by law anyway and cannot be excused by calling it "customer service."
Telekom's approach is to send offers to households. That is still okay, because people then have adequate time to consider whether to accept them. However, shortly afterward Telekom sets its telemarketers on people, which can be quite irritating.
This more or less conveys the following: If you do not accept our offer, we will keep calling you until you give in. In my view, that is telephone harassment. Moreover, these appear to be different Call Centers, with no one knowing what the others are doing; otherwise, I myself would hardly have received 10 calls in fewer than 10 days.
Particularly outrageous is the fact that you are “caught” in situations where you have no time or opportunity to consider the decision. In my case, I even asked whether there would be any changes when switching from Call & Surf Com-fort/T-ISDN
to Call & Surf Comfort (2)/T-ISDN, and the caller denied that there would be.
In my view, this is fraudulent misrepresentation!
When you make inquiries by phone, you are referred back to a hotline, where no one is responsible for anything and no one knows anything; after you have told your story countless times, you are transferred from one place to the next until you either lose your patience and hang up or, at the fifth stop, are recommended a premium-rate number (which then does not provide any clear help either).
If Telekom had competent, service-oriented employees (still?), it would not be much of a problem to pay somewhat higher fees than its competitors charge; but if staff are continually being cut and important points of contact are lost as a result, you can switch to competitors that are also not very service-oriented, because then you are frustrated by poor or nonexistent service for more than EUR 10 less per month.
[...]“
Shareholder Hans-Jürgen Gaiser, Kirchheim, has submitted the following countermotion regarding agenda item 2:
- Motion B -
“Regarding agenda item 2 - Resolution on the appropriation of unappropriated net income - I hereby submit the following countermotion:
To support the Company’s sustainable competitiveness, I advocate investing in the training and development of Group employees and introducing a Group-wide knowledge management system.
Half of the amount of EUR 3,385,545,190.56 provided for dividend distribution from unappropriated net income should be used for this purpose. Based on 241,426 Group employees (as of 12/31/2007), this would represent an average amount of EUR 7,011.56 per employee.
The other half, EUR 1,692,772,595.28, is to be distributed as a dividend of EUR 0.39
per share.“
The shareholder Manfred Schädler, Ronnenberg, has submitted the following counterproposal regarding agenda item 3:
“Counterproposal for the ordinary shareholders’ meeting of Telekom AG on 05/15/2008 in Cologne
Agenda item 3
I hereby propose that the discharge of the members of the Board of Management be conducted by „separate vote“.
I propose:
that Dr. Karl-Gerhard Eick (Chief Financial Officer) not be granted discharge.
Reason:
Dr. Karl-Gerhard Eick, a member of the Board of Management of Deutsche Telekom AG since 2000 and Deputy Chairman of the Board of Management since 2004, should not be granted discharge due to his failure to comply with the Securities Prospectus Act, which has been in force since July 2005, pursuant to Section § 10 Wp PG, because shareholders still have outstanding recourse claims against Deutsche Telekom AG, Bonn, and its audit firms.“
The shareholder Peter Hinz, Lübeck, has submitted the following counterproposals regarding agenda items 3 and 4:
"Counterproposals regarding agenda items 3 and 4
1.. Resolution on both agenda items concerning the motion that the discharge of the Board of Management and the Supervisory Board be voted on separately and that no discharge be granted.
Reasons for this proposal:
1.1 Failure to take measures to prevent customer attrition
1.2 No measures to improve the company's image.
1.3 Poor business practices. The customer is not a serf and has not been stripped of their autonomy."
The shareholders Marco and Mary Zahner, Weinheim, have submitted the following counterproposal regarding Agenda Item 2:
- Proposal C -
“Agenda Item 2:
A dividend distribution of 50.69% is irresponsible and constitutes fraud against the shareholders. The following proposal is hereby submitted: The unappropriated net income of EUR 6,678,623,284.42 shall be allocated as follows: distribution of a dividend of EUR 1.53 per no-par value share entitled to dividends = EUR [6,640,877,104.56] and carryforward of the remaining amount = EUR [37,746,179.86]. The dividend allocation for shares held by Deutsche Telekom AG at the time of the shareholders’ meeting shall likewise be carried forward.”
The shareholders Marco and Mary Zahner, Weinheim, have submitted the following countermotions regarding agenda items 3, 7, and 8:
“Agenda Item [3]:
Countermotion: Discharge should be denied to the Board of Management. The reason for this is the approach taken in reintegrating T-Online and the related "payoff" of T-Online shareholders.
Agenda Items 7 and 8:
Countermotion: Prof. Dr. Ulrich Lehner and Dr. Klaus G. Schlede should not be elected to the Supervisory Board because they already hold too many offices and, consequently, the proper performance of Supervisory Board duties is not ensured or cannot be carried out.”
Shareholder Detlef Wratschko, Kamen, has submitted the following nomination proposal for agenda items 7 and 8:
- Motion D -
"Motion / nomination proposal for agenda items 7 and 8
Dear Sir or Madam,
I hereby put myself forward, as a shareholder, for election to the Supervisory Board (as a member of the Supervisory Board) pursuant to §Section 96(1); Section 101 AktG in conjunction with §Section 7(1), sentence 1, no. 3 of the 1976 Codetermination Act.
Under the Rules of Procedure of the Supervisory Board, the Supervisory Board is to support the Management Board through advice and promote the Company’s objectives. The Chair of the Supervisory Board maintains regular contact with the Management Board, particularly its Chair, and discusses the Company’s strategy, business development, and risk management with them.
I would therefore like to contribute to the Supervisory Board for the benefit of Telekom.
Personal information:
I am 46 years old, married, and have two children. I hold a degree in electrical power engineering and have worked in various areas at Deutsche Telekom AG since 06/01/1988.
I do not hold memberships on any other Supervisory Boards required by law or on any other comparable domestic or foreign supervisory bodies of business enterprises.”
The shareholder Björn Thienenkamp, Fürstenau, has submitted the following counterproposal regarding agenda item 3:
“[Regarding agenda item 3 of the Annual General Meeting on 05/15/2008 in Cologne, discharge of the Management Board, I submit the counterproposal that the Management Board not be discharged, [...]
[The grounds, which total more than 5,000 characters, have not been reproduced pursuant to § Section 126 (1) sentence 2 of the German Stock Corporation Act.]
I therefore propose that the following resolution be adopted:
The Management Board shall not be discharged."
