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SAP Aktiengesellschaft
Neurottstrasse 16
69190 Walldorf
Germany
Phone: +49 6227 7-47474
SAP AG
ARTICLES OF ASSOCIATION
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I. GENERAL PROVISIONS
SECTION 1
CORPORATE NAME, REGISTERED OFFICE AND TERM OF THE COMPANY
1. The name of the Company is:
SAP Aktiengesellschaft Systeme, Anwendungen, Produkte in der
Datenverarbeitung.
2. The Company's registered office is in Walldorf, Germany.
3. The Company is incorporated for an indefinite period of time.
SECTION 2
OBJECTIVES OF THE COMPANY
1. The corporate purpose of the Company is direct or indirect activity in the
area of development, production, and marketing of products and the
provision of services in the field of information technology, and
particularly in the following fields:
- Developing and marketing integrated product and service solutions for
e-commerce
- Developing software for information technology and the licensing of its
use to others
- Organization and deployment consulting, as well as user training, for
e-commerce and other software solutions
- Selling, leasing, renting, and arranging the procurement and provision of
all other forms of use of information technology systems and relevant
accessories
- Making capital investments in enterprises active in the field of
information technology to promote the opening and advancement of
international markets in the field of information technology
2. The Company is authorized to act in all the business areas listed in (1)
and to delegate such activities to affiliated enterprises within the
meaning of the German Stock Corporation Act ("the Act"), sections 15ff; in
particular the Company is authorized to delegate its business in whole or
in parts to such enterprises. The Company is authorized to establish branch
offices in Germany and other countries, to found, acquire, and invest in
other companies of the same or related kind and to enter into collaboration
and joint venture agreements. The Company is further authorized to invest
in enterprises of all kinds principally for the purpose of placing
financial resources. The Company is authorized to dispose of investments,
to consolidate the management of enterprises in which it participates, to
enter into affiliation agreements with such enterprises, or to do no more
than manage its shareholding.
3. The Company is authorized to take all actions and measures that are
consistent with the corporate purpose or that directly or indirectly
further the corporate purpose.
SECTION 3
OFFICIAL NOTICES
The Company's official notices shall be published in the "Bundesanzeiger" (the
official gazette of the Federal Republic of Germany) only.
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II. CAPITAL STOCK AND SHARES
SECTION 4
CAPITAL STOCK
1. The capital stock of the Company amounts to Euro 314,268,342.00 and is
divided into 183,000,000 no-par ordinary shares and 131,268,342 no-par
non-voting preference shares. The preference shares shall carry preference
rights in respect of the distribution of retained earnings in accordance
with section 23 (6) of the Articles of Association.
2. The shares are individual shares. They are made out to the bearer.
Certificates issued for shares with a par value of DM 5.00 certify
ownership of three individual shares until such certificates are declared
invalid; certificates issued for shares with a par value of DM 50.00
certify ownership of thirty individual shares until such certificates are
declared invalid.
3. The form of the share certificates, dividend coupons, and renewal coupons
as well as bonds and interest coupons shall be determined by the Executive
Board with the consent of the Supervisory Board. The Company may combine
single shares of the same par values into share certificates certifying a
majority of shares with the corresponding par value (multiple share
certificates). The right of shareholders to share certificates in respect
of their shares is excluded.
4. When new shares are issued, the commencement of dividend entitlement in
respect of these new shares may be determined in derogation of ss. 60
paragraph 2, German Stock Corporation Act.
5. Taking into account the conversion rights already exercised by December 31,
1999, the capital stock of the Company is further conditionally increased
by a maximum of Euro 1,481,658 divided into a maximum of 1,481,658 no-par,
nonvoting bearer preference shares ranking equally with the preference
shares already issued (Contingent Capital II). The conditional increase in
capital will be carried out only to the extent to which the holders of the
convertible bonds exercise their right to convert their bonds into shares
of the Company. The Annual General Meeting authorized the Executive Board
to issue these convertible bonds on June 22, 1994. The new shares shall
carry dividend entitlement as of the beginning of the financial year in
which they are issued. The Executive Board shall be entitled to determine
the procedures relating to the conditional increase in capital.
6. The Executive Board is authorized, with the consent of the Supervisory
Board, to increase the Company's capital stock on one or more occasions to
a maximum of EUR 5,112,918.81, by May 15, 2003, by issuing new non-voting
bearer preferred shares in return for cash deposits (Approved Capital).
Only non-voting preferred shares may be issued. They shall carry the same
rights under these Articles of Association as previously issued preferred
shares. The new shares shall be offered for purchase by existing
shareholders. With the consent of the Supervisory Board, the Executive
Board is, however, authorized to exclude fractions of shares from the
subscription rights granted to shareholders.
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7. The capital stock is further conditionally increased by Euro 18,750,000.00
by the issuance of a maximum of 18,750,000 no-par, nonvoting bearer
preference shares ranking equally with the preference shares already issued
(Contingent Capital III). The contingent capital increase will be effected
only to the extent that holders of convertible bonds and stock options,
issued before December 31, 2004 pursuant to the authorization granted by
the General Meeting of January 18, 2000 in connection with the SAP AG 2000
Long Term Incentive Plan, exercise their conversion and subscription rights
and the Company does not satisfy the conversion and subscription rights, as
the case may be, from shares owned by the Company. The new shares issued in
connection with the exercise of these rights are eligible for dividends
from the beginning of the first fiscal year for which no General Meeting
resolution for the appropriation of retained earnings had been adopted
before the time at which the conversion or subscription right was
exercised.
8. Subject to the consent of the Supervisory Board, the Executive Board is
authorized to increase the capital stock on one or more occasions no later
than May 1, 2005 by no more than Euro 25 million in total by issuing new
nonvoting bearer preference shares that carry the same rights under the
Articles of Association as previously issued preference shares (Authorized
Capital II). Subject to the consent of the Supervisory Board, the Executive
Board is authorized to exclude the shareholders' statutory preemptive
rights:
- In respect of fractional shares,
- Where the capital is increased against contributions in cash and the
portion of the capital stock represented by the new shares in respect
of which preemptive rights are excluded is no greater than 10% of that
capital stock at the time the new shares are issued and the issue
price of the new shares is not materially below the stock exchange
price of listed shares of the same class carrying the same rights
under the Articles of Association on the day when the Executive Board
finally determines the issue price, as provided in the German Stock
Corporation Act, section 203 (1) and (2) and section 186 (3)(4),
- Where the capital is increased against contributions in kind to obtain
shares for the acquisition of enterprises or interests in enterprises.
Subject to the consent of the Supervisory Board, the Executive Board is
authorized to determine the further details of the implementation of
capital stock increases pursuant to Authorized Capital II. The Supervisory
Board is authorized to amend section 4 (8) of the Articles of Association
accordingly after full or partial implementation of the capital stock
increase pursuant to authorized capital or after expiration of the
authorization period.
9. The capital stock is subject to a further contingent increase of Euro 25
million divided into no more than 25 million nonvoting bearer preference
shares ranking equally with the preference shares already issued
(Contingent Capital IV). The capital stock increase will be effected only
to the extent that holders of warrants or conversion rights attaching to
bonds with detachable warrants or to convertible bonds issued or guaranteed
on or before May 4, 2005 by SAP AG or by its fully-owned direct or indirect
German or foreign affiliates exercise their warrant rights or conversion
rights or to the extent that holders under a duty to convert convertible
bonds issued or guaranteed on or before May 4, 2005 by SAP AG or by its
fully-owned direct or indirect affiliates perform their duty to convert.
The new shares are eligible for dividend from the beginning of the fiscal
year in which they arise through exercise of warrant rights or conversion
of convertible bonds.
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III. CONSTITUTION AND MANAGEMENT OF THE COMPANY
SECTION 5
CORPORATE BODIES
The Company's executive bodies are:
a) the Executive Board, b) the Supervisory Board, c) the Annual General Meeting.
THE EXECUTIVE BOARD
SECTION 6
COMPOSITION OF THE EXECUTIVE BOARD
1. The Executive Board shall consist of at least two persons. The appointment
of deputy members of the Executive Board is admissible. The latter have the
same rights as the full members of the Executive Board regarding the
external representation of the Company.
2. The determination of the number and the appointment of the full members and
the deputy members of the Executive Board, the conclusion of their
employment contracts, and the revocation of their appointments are the
responsibility of the Supervisory Board, as are the appointment of a member
of the Executive Board as chairman of the Executive Board and the
appointment of one or more member/s of the Executive Board as deputy
chairman/chairmen of the Executive Board.
SECTION 7
RULES OF PROCEDURE AND RESOLUTIONS OF THE EXECUTIVE BOARD
The Executive Board shall unanimously adopt its own rules of procedure.
Resolutions of the Executive Board shall be adopted by a majority vote. Should a
vote end in a tie, the chairman of the Executive Board, or - if the chairman is
unable to vote - the deputy chairman of the Executive Board shall have the
casting vote.
SECTION 8
LEGAL REPRESENTATION OF THE COMPANY
The Company shall be legally represented
a) by two members of the Executive Board;
b) by one member of the Executive Board acting jointly with one Company
officer with full power of attorney.
SECTION 9
LIMITATION OF THE EXECUTIVE BOARD'S AUTHORITY
The Executive Board shall be obliged to adhere to the limitations imposed by the
Articles of Association or the Supervisory Board regarding the scope of its
management authority or which result from a resolution adopted by the Annual
General Meeting pursuant to ss. 119 of the German Stock Corporation Act.
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IV. THE SUPERVISORY BOARD
SECTION 10
COMPOSITION, TERM OF OFFICE
1. The Supervisory Board shall consist of twelve members, six of whom shall be
elected by the shareholders and six by the employees pursuant to the
provisions of the 1976 German Co-Determination Act.
2. Unless the Annual General Meeting specifies a shorter term of office when
electing individual members of the Supervisory Board or the entire
Supervisory Board, the members of the Supervisory Board shall be appointed
for a period ending with the Annual General Meeting at which the actions of
the Supervisory Board were formally approved for the fourth financial year
following commencement of the term of office, not counting the financial
year in which their term of office commences.
3. Substitutes for shareholders' representatives on the Supervisory Board may
be elected to replace members who resign prior to the expiry of their term;
the order of their succession shall be stipulated at the time of their
election.
4. In the event that a shareholders' representative is elected to replace a
member of the Supervisory Board who resigns, the successor shall be
appointed for the remaining term of office of the resigning member. In the
event that a substitute member succeeds the resigning member, his term of
office shall expire either as of the conclusion of the next Annual General
Meeting at which new members of the Supervisory Board are elected or at the
latest upon expiry of the term of office of the resigning member of the
Supervisory Board. In the event that the Annual General Meeting elects a
new representative to replace a member who has already been succeeded by a
substitute member, the successor reverts to his position as substitute
member.
5. The members and substitute members of the Supervisory Board may resign from
office by submitting a written statement addressed to the chairman of the
Supervisory Board or to the Executive Board observing a period of notice of
four weeks.
SECTION 11
DUTIES AND RESPONSIBILITIES OF THE SUPERVISORY BOARD
1. The Supervisory Board shall have all duties and rights that are conferred
upon it by law, the Articles of Association or otherwise. Both the
Executive and Supervisory Boards shall be entitled to call an Annual
General Meeting.
2. The Supervisory Board shall be authorized to amend the Articles of
Association where such amendments only concern the wording.
3. The Supervisory Board shall be entitled at any time to supervise all
management activities of the Executive Board and to this end to inspect and
examine all books and records as well as the assets of the Company.
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4. To the extent stipulated by law, the Executive Board shall be obliged to
report to the Supervisory Board on the current affairs of the Company.
5. The Supervisory Board may set up committees made up of its own members.
Where permitted by law, decision-making powers may be delegated to such
committees.
SECTION 12
DECLARATIONS OF INTENT OF THE SUPERVISORY BOARD
1. Declarations of intent of the Supervisory Board and its committees shall be
given on behalf of the Supervisory Board by the chairman or - should he be
unable to do so - by the deputy chairman.
2. The chairman of the Supervisory Board or his deputy shall be the permanent
representative of the Supervisory Board vis-a-vis third parties, especially
vis-a-vis courts and authorities as well as the Executive Board.
SECTION 13
CHAIRMAN AND DEPUTY CHAIRMAN
1. Following an Annual General Meeting at which all members of the Supervisory
Board to be elected by the Annual General Meeting have been newly
appointed, a meeting of the Supervisory Board shall take place, which shall
be held without special invitation. At this meeting the Supervisory Board
shall elect one of its members as chairman and another as deputy chairman
for the term of its office.
2. In the event that the required majority of votes is not reached to elect a
chairman or deputy chairman of the Supervisory Board, a second ballot shall
be held. In this ballot the members of the Supervisory Board representing
the shareholders shall elect the chairman of the Supervisory Board, and the
members representing the employees shall elect the deputy chairman by a
majority vote.
3. Following the election of the chairman and the deputy chairman of the
Supervisory Board, the Supervisory Board shall form a committee in order to
exercise its duties as stipulated in ss. 31, paragraph 3, clause 1 of the
German Co-Determination Act. This committee shall consist of the chairman
and the deputy chairman of the Supervisory Board as well as two other
members of the Supervisory Board, one to be elected by the employees'
representatives and the other by the shareholders' representatives on the
Supervisory Board. Both members shall be elected by a majority vote.
4. In the event that the chairman of the Supervisory Board is prevented from
executing his office, the deputy chairman shall take his place. This
provision shall not affect ss. 20, paragraph 1.
5. In the event that the chairman or deputy chairman resigns from office prior
to expiry of the term of that office, the Supervisory Board shall elect a
new chairman or deputy chairman without delay. The same shall apply in the
event that one of the other members of the
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committee referred to in paragraph 3 resigns from office prior to expiry of
the term of that office.
SECTION 14
INVITATIONS TO MEETINGS AND RESOLUTIONS
1. The Supervisory Board shall adopt its own rules of procedure by a majority
vote. The following provisions apply to invitations to meetings, quorums
and resolutions. Supplementary provisions may be stipulated in the rules of
procedure.
2. Invitations to attend meetings of the Supervisory Board shall be issued in
writing by the chairman no later than fourteen days prior to any meeting,
not counting the day of dispatch of the invitation and the day of the
meeting. In urgent cases, the chairman may shorten the term and call a
meeting by issuing invitations orally or by telephone, telex, telegram, or
facsimile.
3. Resolutions may be adopted by written, telegraphic, telephone, facsimile or
telex vote, provided that no member objects to this voting form within an
appropriate period stipulated by the chairman. Resolutions passed by
telephone vote shall subsequently be confirmed in writing.
4. The Executive Board may attend the meetings of the Supervisory Board in an
advisory capacity.
5. A quorum shall be present if at least six members of the Supervisory Board
attend a meeting. Unless otherwise stipulated by law or by the Articles of
Association, resolutions of the Supervisory Board shall be adopted by a
majority vote. Should a vote end in a tie, and should a repeated vote on
the same item likewise end in a tie, the chairman shall have the casting
vote. The casting vote may be given in one of the ways set forth in
paragraph 3. The deputy chairman shall not be entitled to give a casting
vote.
SECTION 15
DUTY OF SECRECY
1. The members of the Supervisory Board shall be obliged to maintain secrecy
in respect of any confidential information and secrets of the Company,
notably business and trade secrets, which have been imparted to them in
their capacity as members of the Supervisory Board. Persons taking part in
meetings of the Supervisory Board who are not members of the Supervisory
Board shall be expressly enjoined to secrecy.
2. In the event that a member of the Supervisory Board intends to pass
information on to a third party, he shall be obliged to notify the
Supervisory Board and the Executive Board of his intention beforehand,
naming the persons he wishes to inform. The Supervisory Board and the
Executive Board must be given the opportunity to decide prior to the
disclosure of information whether they consider such disclosure to violate
paragraph 1 or not. The decision shall be made by the chairman of the
Supervisory Board and the chairman of the Executive Board.
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3. The members of the Supervisory Board shall be obliged to maintain secrecy
as set forth in the foregoing paragraphs after their resignation from the
Supervisory Board.
SECTION 16
REMUNERATION
In addition to the reimbursement of his or her expenses, each member of the
Supervisory Board shall receive a fixed remuneration of Euro 5,112.92 payable
after the end of the fiscal year, and additional remuneration of Euro 2,100.13
multiplied by the distributed profit and divided by the capital stock. The
additional remuneration is payable on the first business day following the
Annual General Meeting. The chairman shall receive twice the amount, and the
deputy chairman one and a half times the amount determined for the other members
of the Supervisory Board. However, the total remuneration (not including sales
tax) shall not exceed the following amounts per fiscal year:
- For the chairman: 14 times the fixed remuneration
- For the deputy chairman: 10.5 times the fixed remuneration
- For the other members of the Supervisory Board: 7 times the fixed
remuneration.
In addition, any sales tax charged by a member of the Supervisory Board or shown
in a credit advice for an invoice shall be refunded by the Company to the extent
prescribed by law.
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V. THE ANNUAL GENERAL MEETING
SECTION 17
INVITATION TO THE ANNUAL GENERAL MEETING
1. The Annual General Meeting shall be held at the registered office of the
Company, at a location within a radius of 50 km from the registered office
of the company, or in a city in the Federal Republic of Germany where a
stock exchange is located. In the event that it is difficult to hold the
Annual General Meeting at these venues, the Executive Board or the
Supervisory Board may call the meeting at a different location. The
invitation shall state the location of the Annual General Meeting.
2. The Executive Board or the Supervisory Board shall call the Annual General
Meeting.
3. The Annual General Meeting shall be called by publication of an
announcement in the official gazette of the Federal Republic of Germany,
giving the information required by law, in such a way that pursuant to ss.
18, paragraph 2 of the Articles of Association, there shall be a period of
one month between the date of the publication and the last date of deposit,
not counting these two days.
SECTION 18
RIGHT TO ATTEND THE ANNUAL GENERAL MEETING
1. Shareholders are entitled to participate in the Annual General Meeting
provided they have deposited their shares at the Company or at other places
stipulated in the invitation or at a collective security deposit bank or
with a notary public during normal business hours, and leave them there
until the conclusion of the Annual General Meeting.
2. The shares shall be deposited at least four business days before the date
of the Annual General Meeting.
3. Shares shall also be deemed properly deposited if, with the approval of and
on behalf of a depository, they are lodged with and kept blocked at another
bank until the conclusion of the Annual General Meeting.
4. In the event that shares are deposited with a notary public, the original
depository receipt issued by him or a certified copy thereof has to be
filed with the Company at the latest on the day following expiry of the
deposit deadline.
5. Details regarding the depositing of shares and the issuance of voting cards
shall be published in the invitation.
6. For the purposes of this provision Saturdays are not regarded as business
days.
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SECTION 19
VOTING RIGHTS
1. Each ordinary share shall entitle its holder to a vote. Holders of
preferred shares are not entitled to vote, unless mandatory statutory
provisions stipulate otherwise. If legal provisions permit voting rights
for preferred shares, each preferred share entitles the holder to a vote.
2. Voting rights may be exercised by proxy. A written statement is required
and sufficient for the appointment of a proxy.
3. If no share certificates have been issued, the invitation to the Annual
General Meeting shall stipulate the provisions that have to be fulfilled by
the shareholders in order to prove their entitlement to voting rights.
SECTION 20
CHAIRMANSHIP OF THE ANNUAL GENERAL MEETING
1. The chairman of the Supervisory Board shall chair the Annual General
Meeting. Should the chairman be prevented from chairing the meeting, he
shall determine another member of the Supervisory Board to take his place.
In the event that the chairman is prevented from chairing the meeting and
has not determined another member to act as his substitute, the Annual
General Meeting shall be chaired by a member of the Supervisory Board
elected by the shareholders' representatives on the Supervisory Board.
2. The chairman shall conduct the proceedings and shall determine both the
order of the agenda and the form of voting. The outcome of the ballots may
be determined by subtracting the affirmative votes or the negative votes
and the abstentions from the total number of voting rights to which the
voters are entitled.
SECTION 21
RESOLUTIONS OF THE ANNUAL GENERAL MEETING
1. Unless stipulated otherwise by mandatory provisions of law, resolutions of
the Annual General Meeting require a simple majority of the votes cast to
be adopted; where the law prescribes a larger majority of the capital stock
represented for the adoption of resolutions, two-thirds of the capital
stock represented shall be sufficient, unless mandatory legal provisions
require a larger majority.
2. Should a vote end in a tie, the motion shall be deemed rejected, except in
the case of elections.
3. Should no candidate receive a simple majority of votes during the first
ballot, a second ballot shall be conducted among those candidates who
received the largest number of votes. Should the second ballot end in a
tie, the election shall be determined by drawing lots.
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SECTION 22
MINUTES OF THE ANNUAL GENERAL MEETING
1. A notary shall take minutes of the proceedings of the Annual General
Meeting; the notary and the chairman shall sign the minutes.
2. A list of those shareholders attending in person or represented at the
meeting and their representatives shall be attached to the minutes. The
chairman of the Annual General Meeting shall sign this list. The minutes
shall have full probative value for the shareholders both among themselves
and in relation to their representatives.
3. The proxy documents need not be attached to the minutes.
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VI. ANNUAL FINANCIAL STATEMENTS AND APPROPRIATION OF RETAINED EARNINGS
SECTION 23
FINANCIAL YEAR, ANNUAL REPORT AND FINANCIAL STATEMENTS, FORMAL APPROVAL OF THE
ACTIONS OF THE EXECUTIVE AND SUPERVISORY BOARDS, DISTRIBUTION OF
RETAINED EARNINGS
1. The financial year shall be the calendar year.
2. The Executive Board shall prepare the Financial Statements and the Review
of Operations for the previous fiscal year and submit them to the
Supervisory Board and to the Auditor in the first three months of each
fiscal year. At that time the Executive Board shall submit to the
Supervisory Board the proposal it wishes to make to the Annual General
Meeting concerning the appropriation of retained earnings.
3. As soon as an invitation to the Annual General Meeting has been issued, the
annual financial statements, the management report, the report of the
Supervisory Board and the Executive Board's proposal for the appropriation
of the retained earnings shall be available for the shareholders'
inspection on the business premises of the Company.
4. After receipt of the report to be rendered by the Supervisory Board
pursuant to ss. 171 paragraph 2 of the German Stock Corporation Act, the
Annual General Meeting shall resolve within the first eight months of the
financial year on the formal approval of the actions of the Executive and
Supervisory Boards, the appropriation of the retained earnings, the
appointment of the auditors, and in cases provided for by law, the approval
of the annual financial statements.
5. In approving the annual financial statements, the Executive and Supervisory
Boards shall be authorized to appropriate to the retained earnings either
all or part of the annual net income remaining after deduction of amounts
to be allocated to the legal reserves and of any accumulated losses carried
forward. The Executive and Supervisory Boards may not appropriate more then
one half of the annual net income if, after such allocation, the other
retained earnings would exceed one half of the capital stock.
6. Holders of preference shares receive a share of the retained earnings that
exceeds the dividend paid on ordinary shares by 1 euro cent and is equal to
no less than 1 euro cent per preference share. In the event that the
retained earnings of a financial year are not sufficient to pay the
preferred amount pursuant to sentence 1, the retained earnings of the
subsequent financial year shall first be used to pay the arrears without
interest before the entire preferred amount for that financial year is
distributed to the holders of preferred shares. In the event of there being
outstanding preferred amounts for several financial years, the retained
earnings shall first be used to pay the arrears without interest in the
order of their accrual, and when all arrears have been paid, the remainder
shall be used to pay the preferred amount for the financial year preceding
the dividend distribution. The right to back payment constitutes part of
the share in the profits of that financial year whose retained earnings are
used to make the back payment on the preferred shares.
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SECTION 24
COSTS OF INCORPORATION AND CONVERSION
The Company shall bear all costs connected with its incorporation and
conversion. These costs are estimated at DM 250,000.
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