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Exhibit 3.1
SAP AG
ARTICLES OF ASSOCIATION
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 objectives of the Company are: to develop software, to license such
software to third parties, to provide business analysis and
implementation consulting services as well as customer training; in
addition, to sell, lease, rent or arrange the procurement and provision
of IT systems and related equipment for other purposes.
2. As far as permitted by law, the Company may conduct all business and
take all measures, which seem appropriate to support its objectives.
The Company may in particular acquire or sell land, establish branch
offices within Germany and abroad, acquire participations in businesses
of the same or a similar kind -- in special cases also of a different
kind -- and conclude corporate, cooperation and joint venture
agreements.
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 EUR 267,314,897.00 and is
divided into 61,000,000 no-par ordinary shares and 43,564,499 no-par,
non-voting preferred shares. Pursuant to Section 23, paragraph 6 of the
Articles of Association, the preferred shares are preferred in terms of
profit distribution.
2. The shares are individual shares. They are made out to the bearer.
Certificates issued for shares with a par value of DM 5 certify
ownership of one individual share; certificates issued for shares with
a par value of DM 50 certify ownership of ten individual shares.
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). Shareholders are not entitled to
certificates for single shares.
4. When new shares are issued, the commencement of dividend entitlement in
respect of these new shares may be determined in derogation of Section
60 paragraph 2, German Stock Corporation Act.
5. Taking into account the conversion rights already exercised for
convertible bonds by December 31, 1998, the capital stock of the
Company is further increased by a maximum of EUR 1,752,455.48 divided
into a maximum of 685,501 no-par, non-voting preferred shares made out
to the bearer, whose status is equal to that of the preferred 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 preferred shares made out to the bearer in return for cash
deposits (Approved Capital). Only non-voting preferred shares may be
issued. They shall have the same rights as the preferred shares already
issued, in accordance with these Articles of Association. 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 purchasing rights
granted to shareholders.
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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/s 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.
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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 Section 119 of the German Stock Corporation Act.
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 specified 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 the 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.
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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.
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.
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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 Section 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 Section 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 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.
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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.
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
Besides the reimbursement of his expenses, each member of the Supervisory Board
shall receive a fixed remuneration amounting to EUR 5,112.92, payable upon the
expiry of the financial year, as well as an additional remuneration amounting to
EUR 1,789.52 for each percent of distributed profits, based on the capital
stock, and a pro rata amount in the case of fractions of a percentage. 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 Section 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 the 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.
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 BOARD,
DISTRIBUTION OF RETAINED EARNINGS
1. The financial year shall be the calendar year.
2. In the first three months of every financial year, the Executive Board
shall prepare a management report and the financial statements for the
past financial year, and shall present these to the auditors. Upon
receipt of the auditors' report, these documents, together with the
auditors' report and the proposal for the appropriation of the retained
earnings to be resolved by the Annual General Meeting, shall be
submitted to the Supervisory Board without delay.
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 Section 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 a part of the annual net income remaining after
deduction of amounts to be allocated to the legal reserves and of
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any accumulated losses carried forward. The Executive and Supervisory
Boards may not appropriate more than 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 preferred shares receive a share of the retained earnings
which exceeds the dividend paid on ordinary shares by 3 cents and is
equal to no less than 3 cents per preferred 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.
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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