2. Resolution concerning the use of balance sheet profits

Transcription

1 Translation from German into English AGENDA AND VOTING RESULTS OF SOFTWARE AKTIENGESELLSCHAFT S SHAREHOLDERS' GENERAL MEETING, DARMSTADT HELD ON APRIL 27, 2001 IN DARMSTADT - Securities Identification No The shareholders were represented at the shareholders general meeting with a total of 13,036,597 shares, equaling 49,28% of the share capital which is divided into 26,397,228 registered shares 1. Presentation of the approved Annual Financial Statements of Software AG per 31 December 2000, the Management Report and the Supervisory Board's Report, as well as the Consolidated Financial Statements per 31 December 2000 and the Group Management Report. Shareholders may inspect the above documents at the offices of Software AG, Uhlandstr. 12, Darmstadt-Eberstadt. Shareholders interested in receiving a copy of our Annual Report, which contains the Consolidated Financial Statements and the Group Management Report, may request a copy at the above address free of charge. 2. Resolution concerning the use of balance sheet profits The Executive Board and the Supervisory Board propose that the balance sheet profit amounting to 25,136, be used as follows: a) that 10,122, be distributed to the shareholders by paying a dividend of (or DEM 0.75 ) per no par value share; b) that 15,000,000 be allocated to retained earnings; c) that the remaining balance sheet profit of 13, be carried forward. d). The proposal was adopted with 59,064 votes dissenting und 121 votes abstaining. (Notice of AGM :47) Page 1 of 17

2 3. Resolution to approve the acts of members of the Executive Board for fiscal year 2000 The Executive Board and the Supervisory Board propose that the actions of the members of the Executive Board for fiscal year 2000 be and is hereby approved. The actions of the Executive Board s members for the 2000 fiscal year were approved with 58,403 votes dissenting und 61,697 votes abstaining. 4. Resolution to approve the acts of members of the Supervisory Board for fiscal year 2000 The Executive Board and the Supervisory Board propose that the actions of the members of the Supervisory Board for fiscal year 2000 be and is hereby approved. The actions of the Supervisory Board s members for the 2000 fiscal year were approved with 169 votes dissenting und 61,787 votes abstaining. 5. Re-election to the Supervisory Board The Supervisory Board shall be appointed, elected and constituted in accordance with 96 and 101 of the Stock Corporation Act and 76 of the Employees Representation Act of 1952 (Betriebsverfassungsgesetz). Pursuant to the Articles of Association, the Supervisory Board shall have 6 members. Notwithstanding the nominations made, four of these members shall be appointed by the shareholders. Upon the expiration of a term of office, the reelection for one of these membership positions must be held. The Executive Board and Supervisory Board propose that Supervisory Board Member Dipl.-Ing. Dieter Schacher be re-elected to the Supervisory Board. Mr. Schacher is head of management organization and systems at Volkswagen AG, and resides in Berlin. Mr. Schacher holds the following positions on the Supervisory Boards of other organizations: Chairman of the Supervisory Board of gedas GmbH, Berlin, Germany; Member of the Supervisory Board of gedas NA, Puebla, Mexico; Member of the Supervisory Board of gedas Inc., Auburn Hills, USA; Member of the Supervisory Board of Volkswagen Sachsen GmbH, Germany. Mr. Dipl.-Ing Dieter Schacher was re-elected to the Supervisory Board with 723 votes dissenting und votes abstaining. 6. Resolution concerning the Control and Profit Transfer Agreement with SQL Datenbanksysteme GmbH, Berlin The Executive Board and the Supervisory Board propose that the Control and Profit Transfer Agreement with SQL Datenbanksysteme GmbH, Berlin, be and is hereby approved. The principal terms of the agreement are as follows: (Notice of AGM :47) Page 2 of 17

3 The Agreement provides that SQL Datenbanksysteme GmbH will subject its management to the control of Software AG. SQL Datenbanksysteme GmbH agrees to transfer its entire profit to Software AG. The amount to be transferred shall be the net annual profit not taking into consideration the transfer of profit, less any loss carried forward from the previous year and less any amount allocated to other retained earnings with the consent of Software AG ( 2 (2)). Conversely, Software AG may require the release of other retained earnings created during the term of the Control and Profit Transfer Agreement and request that the funds released be used to offset any net annual loss, or be transferred as profit. Under the agreement, Software AG is required to set off any losses incurred by SQL Datenbanksysteme GmbH. In this respect, 302 of the German Stock Corporation Act (Aktiengesetz) applies mutatis mutandis. Following the approval by the General Shareholders' Meeting of Software AG and the shareholders of SQL Datenbanksysteme GmbH, the agreement shall take effect upon registration in the Commercial Register of SQL Datenbanksysteme GmbH. The obligation to transfer profit shall commence on 1 January The agreement has been entered into for an indefinite term. Nevertheless, commencing with effectiveness as of 31 December 2005, the agreement may be terminated upon six months' prior notice. The parties reserve the right to terminate for good cause. In particular, good cause shall be deemed to exist if Software AG no longer holds a controlling interest in SQL Datenbanksysteme GmbH. Pursuant to 293a (1) of the German Stock Corporation Act, the Executive Board prepared a written report regarding the approval to the Control and Profit Transfer Agreement with SQL Datenbanksysteme GmbH, Berlin, which is proposed in this item 6 on the agenda. Shareholders may, from the date of this notice of meeting, inspect the agreement, the annual financial statements and the management Report of the contracting parties of the last three fiscal years and the report of the Executive Board (referred to above) at the offices of the Company, Uhlandstr. 12, Darmstadt-Eberstadt. Upon request, a free copy of these documents will be sent promptly to shareholders. The proposal was adopted with 495 votes dissenting und votes abstaining. 7. Amendment to 5 (1) of the Articles of Association and amendment to 5 (2) sentence 1 of the Articles of Association / Increase of the registered share capital from company funds in order to round off the proportion of the registered share capital represented by each no par value share. (Notice of AGM :47) Page 3 of 17

4 a) A resolution to convert the Company's registered share capital into Euro was adopted at the General Shareholders' Meeting held on 21 September On the basis of this resolution, the registered share capital, which is divided into no par value shares, was converted such that a proportion of the registered share capital amounting to (rounded) was allotted to each share. These proportional amounts of the registered share capital would have made it difficult to fix an even subscription ratio when implementing capital increases, and thus would have complicated the handling and exercise of subscription rights. In addition, if the proportions of the registered share capital were not rounded off when capital increases were implemented, it would mean that the rounded amount of the capital increase to be posted to the registered share capital would not correspond exactly to the total proportional amounts to be allotted to the new no par value shares, i.e. the registered share capital and the number of no par value shares would not increase by exactly the same ratio. For this reason, the proportion of the registered share capital allotted to each no par value share is to be rounded off pursuant to a capital increase from company funds. This will not change the number of no par value shares. The increase of (rounded) per no par value share means that each no par value share will represent exactly 3.00 of the registered share capital. The existing conditional capital will be increased by the same ratio as the registered share capital pursuant to 218 of the German Stock Corporation Act. b) The Executive Board and the Supervisory Board propose the following resolution: The registered share capital of the Company shall be increased from 67,633, to 79,367,658 pursuant to a 11,734, capital increase from company funds in accordance with 4 of the Introductory Act to the German Stock Corporation Act (Einführungsgesetz zum Aktiengesetz) by converting 11,734, of capital reserves. This resolution is based on the company s approved Annual Financial Statements per 31 December BDO Deutsche Warentreuhand Aktiengesellschaft, Frankfurt am Main, audited the Annual Financial Statements and issued an unqualified auditor's opinion. The capital increase will be implemented pursuant to 207 (2) sentence 2 of the German Stock Corporation Act without the issue of new shares. The values in 5 (2) sentence 1 of the Articles of Association will be adjusted, taking into account the conditional capital that has already been used. c) The Executive Board and the Supervisory Board propose that 5 (1) of the Articles of Association be worded as follows: "The registered share capital is 79,367,658. It is divided into 26,455,886 registered shares of no par value." d) Taking into account the pre-emptive shares already issued and the capital increase from company funds which was resolved pursuant to item 7 b) on the agenda, in accordance with 218 sentence 1 of the German Stock Corporation Act, 5 (2) sentence 1 of the Articles of Association shall read as follows: (Notice of AGM :47) Page 4 of 17

5 The registered share capital shall be conditionally increased by up to a nominal amount of 4,097,592 and divided into up to 1,365,864 no par value shares. The proposal was adopted with 322 votes dissenting und votes abstaining. 8. Amendment and addendum to 5 of the Articles of Association / Creation of additional conditional capital a) in order to grant conversion or subscription rights to creditors of bonds with warrants and/or convertible bonds b) in order to grant subscription rights to members of the Executive Board and executive employees a) The Executive Board and the Supervisory Board propose to the General Shareholders' Meeting to create conditional capital for purposes of issuing bonds with warrants and/or convertible bonds, and that the following resolutions be and hereby are adopted in this regard: (i) Subject to the Supervisory Board's approval, the Executive Board is hereby authorised to issue, on one or several occasions through 27 April 2006, bearer bonds with warrants and/or convertible bonds having a total nominal value of up to 500,000,000 and a term of no more than ten years. To the extent permitted by law but limited to corresponding Euro equivalents, the bonds may also be issued in other legal currencies. Subject to the specific terms of the option or bond, the company may grant to holders of bonds with warrants options, and to holders of convertible bonds rights to convert their bonds into registered shares of the Company up to a maximum total nominal amount of 13,515,000. The convertible bonds or bonds with warrants may also be issued by (directly or indirectly) wholly-owned subsidiaries of Software AG. In this case, the Executive Board will be authorised, subject to the Supervisory Board's approval, to issue guarantees on the convertible bonds and/or bonds with warrants, and to grant holders of such bonds conversion rights or options to convert their bonds into new shares of Software AG. In the event that bonds with warrants are issued, one or more warrants will be attached to each bond, which will entitle the holder to subscribe to new shares of Software AG, subject to the specific terms of the option as stipulated by the Executive Board. The term of the option may not exceed 5 years. In the event of an issue of convertible bonds, holders will have the right to exchange their bonds for new shares in Software AG pursuant to the bond terms stipulated by the Executive Board. The exchange ratio shall be calculated by dividing the face value of the bond (or the issue price of the bond if the issue price is less than the face value) by the fixed (Notice of AGM :47) Page 5 of 17

6 conversion price for one share of Software AG. The term of convertible bonds may not exceed 10 years. In the event of subscription rights to fractions of new registered shares, the Executive Board may stipulate that, subject to the terms of the option or bond, such fractions can be aggregated to enable subscription to whole shares. Furthermore, an additional cash payment and a payment for non-convertible fractional amounts may be prescribed. The terms of the option or bond may also provide that the claims of option holders and/or bond creditors may be satisfied by making equivalent cash payments in lieu of delivering shares. The bond or option price to be fixed in each case for one share must equal at least 80% of the average stock exchange price for Software AG shares - i.e., the average closing auction price of Xetra trading platform listed by Deutsche Börse AG or its successor (if applicable) - over the five trading days immediately preceding the day upon which the Executive Board resolves to issue the bonds with warrants or convertible bonds. At the very least, the bond or option price must equal the average stock exchange price for the Company's shares rounded up to a whole amount in Euro i.e., the average closing auction price of Xetra trading platform listed by Deutsche Börse AG or its successor (if applicable) during the period in which a bookbuilding procedure is carried out. The conversion or option price may upon issue also be defined as a formula if the specified minimum of 80%, respectively the rounded average price, is observed. If bonds with warrants and/or convertible bonds are issued in a currency other than Euro, then the conversion or option price may also be fixed in a currency other than Euro. Notwithstanding 9 (1) of the German Stock Corporation Act, the conversion and/or option price shall, subject to the specific terms of the option or bond, be reduced pursuant to an anti-dilution clause if Software AG increases its registered share capital during the option or conversion period by granting exclusive subscription rights to its shareholders, or if Software AG issues further bonds with warrants or convertible bonds, or grants or guarantees options whereby the holders of existing options or conversion rights are not granted any subscription rights as they would ordinarily be entitled to after exercising their options or conversion rights. The terms of the options or bonds may also prescribe an adjustment to the option or conversion price in the case of other acts to raise share capital, restructurings, special dividends or similar actions that could lead to a dilution of the share value. The option or conversion price may also be reduced through a cash payment upon exercise of the option or conversion right. In general, the above issues must be offered to shareholders for subscription. The issue may involve a financial institution or a syndicate of financial institutions underwriting the above issues and undertaking to offer them to the shareholders for subscription. However, the Executive Board is authorised to exclude the shareholders' subscription rights in respect of fractional amounts. The Executive Board is further (Notice of AGM :47) Page 6 of 17

7 authorised to exclude subscription rights to the extent necessary to ensure that the holders of bonds with conversion rights or options attached, as issued by (directly or indirectly) wholly-owned subsidiaries of Software AG, can be granted subscription rights corresponding to the rights they would be entitled to after exercising the conversion right or option. In addition, subject to the Supervisory Board's approval, the Executive Board is hereby authorised to completely exclude shareholders' preemptive rights if the options granted to the holders of bonds with warrants and the rights to convert bonds into registered shares of the Company granted to holders of convertible bonds relate to the subscription of no more than 10% of the registered share capital of Software AG as it exists on 27 April 2001, and if the Executive Board, subject to performance of due diligence is of the opinion that the issue price of the convertible bonds or bonds with warrants is not substantially lower than the hypothetical stock market price of the offering. This shall be the case if the Executive Board, subject to performance of due diligence, concludes that the issue price would not fall short of the hypothetical stock market price by more than 5%. Subject to the Supervisory Board's approval, the Executive Board is hereby authorised, either alone or by mutual agreement with the relevant boards of any subsidiary issuing convertible bonds or bonds with warrants, to stipulate further details relating to the issue and nature of the bonds with warrants and convertible bonds, particularly details regarding the interest rate, term, issue price and denomination, option or conversion price and the option or conversion period. (ii) The registered share capital shall be conditionally increased by up to 13,515,000 by issuing up to 4,505,000 registered shares of no par value, with each share nominally representing 3 of the registered share capital. The conditional capital increase is intended to enable the granting of options to warrant-holders pursuant to bonds with warrants, subject to the terms of the option, and/or the granting of conversion rights to holders of convertible bonds, subject to the terms of the bond, where such options or conversion rights are issued by Software AG or a (directly or indirectly) wholly-owned subsidiary of Software AG pursuant to the authorisation as provided under (i) above until 27 April The new shares shall be issued at the option or conversion price as fixed in accordance with the resolution as provided under (i) above. The conditional capital increase shall be implemented only to the extent that the holders of options or convertible bonds exercise their options or conversion rights. The new shares shall entitle the holder to dividend rights from the beginning of the fiscal year in which such shares are created as a result of the exercise of conversion rights or options. Subject to the Supervisory Board's approval, the Executive Board is hereby authorised to stipulate further details regarding the implementation of the conditional capital increase. (Notice of AGM :47) Page 7 of 17

8 (iii) The following paragraph shall be inserted in 5 of the Articles of Association after paragraph 2 and will become paragraph 4 (subject to item 8 b) on the agenda below): "The registered share capital shall be conditionally increased by a further 13,515,000, which will be divided into 4,505,000 no par registered shares, with each share representing 3 of the registered share capital. The conditional capital increase shall be implemented only to the extent that warrant-holders pursuant to bonds with warrants or holders of conversion rights under convertible bonds issued by Software AG or a (directly or indirectly) wholly-owned subsidiary of Software AG pursuant to the resolution authorising the issue adopted on 27 April 2001 by the General Shareholders' Meeting, exercise their options and/or conversion rights. The new shares shall entitle the holder to dividend rights from the beginning of the fiscal year in which such shares are created as a result of the exercise of conversion rights or options." In accordance with 221 (4) sentence 2 in conjunction with 186 (4) sentence 2 of the German Stock Corporation Act, the Executive Board prepared a written report regarding the authorisation to exclude preemptive rights proposed under item 8 a) on the agenda. The report is attached to the agenda and is also available for inspection by shareholders at the offices of the Company, Uhlandstr. 12, Darmstadt-Eberstadt, from the date of this notice of meeting. Upon request, a free copy of the report will be promptly sent to shareholders. b) The Executive Board and the Supervisory Board propose to increase the conditional capital for purposes of issuing subscription rights to members of the Executive Board and executive employees of the Company and its affiliates s, and the following resolutions be and hereby are adopted in this regard: (i) The registered share capital of the Company shall be conditionally increased by up to a further 3,000,000, which will be divided into a maximum additional 1,000,000 registered shares of no par value. The new shares shall entitle the holder to dividend rights from the beginning of the fiscal year in which such shares are created as a result of the issue of pre-emptive shares. The sole purpose of the conditional capital increase shall be to enable the granting of options to subscribe to shares in Software AG. Subject to the Supervisory Board's approval, the Executive Board is hereby authorised to issue, on one or several occasions through 27 April 2006, options to subscribe to shares in Software AG to members of the Executive Board and executive employees of Software AG and its affiliates. The persons entitled to subscribe ("Eligible Persons") are members of the Executive Board and executive employees of Software AG and its affiliates ("Executive Employees"). Twenty-five percent (25%) of the maximum number shares available for subscription pursuant to the options to be issued (1,000,000 no par value shares) shall be allocated to the Executive Board and seventy-five percent (Notice of AGM :47) Page 8 of 17

9 (75%) to Executive Employees. The rights granted in each case may not be legally assigned. The shareholders of Software AG shall have no subscription rights in respect of the options. Subject to the following provisions, the holders of options shall have the right to exercise their subscription rights and to subscribe to new no par value shares in the Company during the term of the option against payment of a certain strike price per share. Option term: 7 years from the date of granting. Waiting period: 24 months. Exercise: options may be exercised every quarter, subject to the specific terms of exercise. Exercise period: the third trading day of the stock exchange up to and including the 15th trading day of the stock exchange following publication of the annual results, the semi-annual results or the quarterly results. The exercise period in the fourth quarter of each year shall end no later than close of 1 December. Strike price per share: The average closing auction price of the Xetra trading platform as listed on the Frankfurt stock exchange over the five trading days immediately preceding the date of the offer to grant subscription rights (the day the offer is submitted or released for dispatch). Success objectives: (a) To achieve an income before taxes in the fiscal year immediately preceding the exercise (of options) of at least 10% of revenue and (b) to increase revenue in the fiscal year immediately preceding the exercise by at least 10% compared with the previous year. Income before taxes shall be taken from the certified annual financial statements, adjusted if necessary by taking into account the one-off effects of the sale or purchase of companies or controlling interests in companies and the one-off consequences of tax audits. Subject to the Supervisory Board's approval, the Executive Board is hereby authorised to stipulate further details relating to the issue of options (including defining the group of Eligible Persons), the exercise thereof and the sale of shares acquired as a result of the exercise of options, unless the options are to be issued to members of the Executive Board, in which case the Supervisory Board will stipulate any further conditions. The strike price fixed as provided above shall, subject to the specific terms of the option, be reduced pursuant to a anti-dilution clause when the option is exercised if, during the term of the option, Software AG, upon having granted its shareholders subscription rights, either increases its capital or creates conversion rights or options and does not grant the option holders the subscription right they would ordinarily be entitled to after exercising their subscription right. The terms and conditions may also provide that the options should be adjusted in the event of a capital reduction. (ii) The following paragraph 3 shall be inserted after 5 (2) of the Articles of Association: (Notice of AGM :47) Page 9 of 17

10 "Furthermore, the registered share capital shall be conditionally increased by up to a nominal amount of 3,000,000, which will be divided into up to 1,000,000 registered shares of no par value. In accordance with the resolution adopted by the General Shareholders' Meeting on 27 April 2001, the conditional capital increase is intended to enable the granting of subscription rights to members of the Executive Board and executive employees of Software AG and its affiliates. The conditional capital increase shall be implemented only to the extent that members of the group of eligible persons to whom options were granted exercise their subscription rights. The new shares shall entitle the holder to dividend rights from the beginning of the fiscal year in which they are created as a result of the issue of pre-emptive shares." c) The Executive Board is hereby instructed to have the conditional capital referred to in item 8 on the agenda entered in the Commercial Register only at a point of time when the capital increase from company funds pursuant to agenda item 7 is already registered. d) The Supervisory Board is hereby authorised, even after expiry of the authorisation period, to modify or amend the wording of proposed paragraphs 3 and 4 of 5 of the Articles of Association to correspond with the extent to which pre-emptive shares are issued and/or exchange rights are exercised. The proposal was adopted with 74,702 votes dissenting und votes abstaining. 9. Insertion of a new paragraph 5 in 5 of the Articles of Association / Authorisation of the Executive Board to increase the registered share capital (authorised capital) a) The Executive Board and the Supervisory Board propose the following resolution: The authorisation to increase the registered share capital granted at the General Shareholders' Meeting held on 21 September 1998 and so far not utilised by the amount of 12,782, be hereby revoked. At the same time, the Executive Board is hereby authorised, subject to the Supervisory Board's approval, to increase the Company's registered share capital by up to 39,681,000 in one or more increments in the period up to and including 27 April 2006, by issuing up to 13,227,000 new no par registered shares against cash contributions and/or contributions in kind (Authorised Capital). The Executive Board may exclude the shareholders' pre-emptive rights in the following situations only: The Executive Board is hereby authorised to exclude shareholders' preemptive rights in respect of fractional amounts. Subject to the Supervisory Board's approval, the Executive Board is hereby authorised to exclude shareholders' pre-emptive rights up to a maximum nominal amount of 8,195,250 for the purposes of offering (Notice of AGM :47) Page 10 of 17

11 new shares to employees of the Company and affiliates within the meaning of 15 et seq. of the German Stock Corporation Act in connection with an employee stock option plan. A financial institution may underwrite the new shares, subject to the restriction that only eligible employees will be entitled to purchase such shares as directed by the Company. Subject to the Supervisory Board's approval, the Executive Board is hereby authorised to exclude shareholders' pre-emptive rights in the event of a capital increase against contributions in kind, provided that the contribution in kind is made for purposes of acquiring enterprises or any divisions or equity interests therein. Subject to the Supervisory Board's approval, the Executive Board is hereby authorised to exclude shareholders' pre-emptive rights in the event of a capital increase against cash contributions, provided that the capital increase resolved pursuant to this authorisation does not exceed a total of 10% of the registered share capital as it exists at the time this authorisation is utilised for the first time, and provided that the issue price is not significantly lower than the stock market price. b) The Executive Board and the Supervisory Board propose the following amendment to the Articles of Association: That existing paragraph 3 of 5 of the Articles of Association be revoked. A new paragraph 5 shall be inserted in 5 of the Company's Articles of Association after the new paragraphs 3 and 4 inserted pursuant to agenda items 8 a) and 8 b). The new paragraph 5 shall be worded as follows: "Subject to the Supervisory Board's approval, the Executive Board is authorised to increase the Company's registered share capital by up to 39,681,000 in total in one or more increments in the period through 27 April 2006, by issuing up to 13,227,000 new registered shares of no par value against cash contributions and/or contributions in kind (Authorised Capital). The Executive Board may exclude the shareholders' preemptive rights in the following situations only: (1) The Executive Board is authorised to exclude shareholders' subscription rights in respect of fractional amounts. (2) Subject to the Supervisory Board's approval, the Executive Board is authorised to exclude shareholders' subscription rights up to a maximum nominal amount of 8,195,250for purposes of offering the new shares to employees of the Company and affiliates within the meaning of 15 et seq. of the German Stock Corporation Act in connection with an employee stock option plan. A financial institution may underwrite the new shares, subject to the restriction that only eligible employees will be entitled to purchase such shares as directed by the Company. (3) Subject to the Supervisory Board's approval, the Executive Board is authorised to exclude shareholders' pre-emptive rights in the event of a capital increase against contributions in kind, provided that the contribution in kind is made for purposes of acquiring companies or any divisions or equity interests therein. (Notice of AGM :47) Page 11 of 17

12 (4) Subject to the Supervisory Board's approval, the Executive Board is authorised to exclude shareholders' subscription rights in the event of a capital increase against cash contributions, provided that the capital increase resolved pursuant to this authorisation does not exceed a total of 10% of the registered share capital as it exists at the time this authorisation is utilised for the first time, and provided that the issue price is not significantly lower than the stock market price." c) The Executive Board is hereby instructed not to apply to have the authorised capital referred to in agenda item 9 entered in the Commercial Register until the capital increase from company funds pursuant to agenda item 7 is registered. d) The Supervisory Board is hereby authorised, even after expiry of the authorisation period, to amend the wording of 5 of the Company's Articles of Association to correspond with the extent to which the capital is increased from Authorised Capital from time to time. The proposal was adopted with votes dissenting und votes abstaining. In accordance with 203 (2) in conjunction with 186 (4) sentence 2 of the German Stock Corporation Act, the Executive Board prepared a written report regarding the authorisation to exclude pre-emptive rights proposed under item 9 on the agenda. The report is attached to the agenda and is otherwise available for inspection by shareholders at the offices of the Company from the date of this notice of General Shareholders Meeting. Upon request, a free copy of the report shall be promptly sent to shareholders. 10. Amendments to the Articles of Association: 11 (3) (Voting by the Supervisory Board outside meetings) and 17 (Participation at the General Shareholders' Meeting) The Supervisory Board and the Executive Board propose the following amendments to the Articles of Association: (a) That 11 (3) be worded as follows: "Supervisory Board meetings may be conducted and resolutions may be adopted in writing, by telephone or with the help of other means of telecommunication if stipulated by the Chairman of the Supervisory Board in the individual case and provided that no member of the Supervisory Board objects to such procedure." (b) That 17 be worded as follows: "Shareholders who are record in the share register (shareholders' ledger) and who have submitted a timely application to the Company are (Notice of AGM :47) Page 12 of 17

13 entitled to participate at General Shareholders' Meetings and to exercise voting rights at such meetings. Applications to participate and exercise voting rights at General Shareholders' Meetings must be in writing or in some comparable form and must be lodged with the Company no later than the seventh day prior to the General Shareholders' Meeting, unless the Company stipulates a later closing date for applications. The closing date for applications shall be published together with the notice of meeting in the relevant newspapers authorised to publish company notices. If persons nominated by the Company are authorised to exercise voting rights by proxy, the relevant power of attorney may be executed in writing or in an electronic format to be specified by the Company in more detail. Details concerning the execution of such powers of attorney shall be published together with the notice of meeting in the relevant newspapers authorised to publish company notices." (c) The note in parentheses in 16 of the Articles of Association referencing 17 (3) shall be modified accordingly. From now on, the note shall read as follows: "( 17 (2))". The proposal was adopted with 1,305 votes dissenting und 61,865 votes abstaining. 11. Election of the auditor for fiscal year 2001 The Supervisory Board proposes that the auditing firm BDO Deutsche Warentreuhand Aktiengesellschaft, Frankfurt am Main, be appointed as the auditor for fiscal year The proposal was adopted with 511 votes dissenting und 1,419 votes abstaining. The next shareholders general meeting has been scheduled for April 30, 2002 in Darmstadt, Germany Executive Board's Report to the General Shareholders' Meeting I. pursuant to 186 (4) sentence 2, 221 (4) sentence 2 of the German Stock Corporation Act, concerning item 8a on the agenda We provide the following report to the General Shareholders' Meeting regarding agenda item 8 a) pursuant to 186 (4) sentence 2, 221 (4) sentence 2 of the German Stock Corporation Act: With the authorisation proposed under agenda item 8 a), the Executive Board hopes to secure further opportunities to increase the Company's equity capital. (Notice of AGM :47) Page 13 of 17

14 Sufficient equity funding is fundamental to ensure the further development of the Company. Through the issue of bonds with warrants and/or convertible bonds, the Company would also receive debt financing at an initially favourable interest rate. The convertible bonds or bonds with warrants are generally intended to be offered to shareholders for subscription. However, subject to the Supervisory Board's approval, the Executive Board is to be authorised to exclude shareholders' subscription (pre-emptive) rights in respect of fractional amounts resulting from the subscription ratio which cannot be distributed evenly amongst all shareholders. Shareholders' subscription rights may also be excluded for the benefit of holders of conversion rights or options in order that the conversion or option price need not, in accordance with existing conversion or option terms, be reduced for holders of existing conversion rights or options in the event that the Executive Board makes use of this authorisation. Furthermore, subject to the Supervisory Board's approval, the Executive Board shall be authorised to fully exclude the subscription rights of the Company's shareholders under certain conditions when convertible bonds or bonds with warrants are issued. This enables the Company within a short time to take advantage of favourable stock market conditions and, by being able to fix prices in close accord with the market situation, to secure the most favourable set of conditions with respect to the interest rate, the option and/or conversion price and the issue price for bonds with warrants and/or convertible bonds. It would not be possible to fix conditions in close accord with the market situation if subscription rights were not excluded. This is because, as a general rule, the conditions will necessarily already be fixed when the subscription period commences, thus market fluctuations during this time cannot be taken into account. In addition, the exclusion of subscription rights opens up the opportunity to broaden the Company's shareholder base by including international investors. Pursuant to 221 (4) sentence 2 of the German Stock Corporation Act, 186 (3) sentence 4 of that Act applies analogously to cases in which shareholders' subscription rights are completely excluded in connection with the issue of convertible bonds and/or bonds with warrants. The maximum legal level provided therein to which the exclusion of subscription rights may apply, namely 10% of the registered share capital, has to be observed by the resolution. Section 186 (3) sentence 4 of the German Stock Corporation Act further provides that the issue price may not be significantly lower than the stock market price. This is intended to ensure that the value of the shares is not diluted to an economically substantial extent. Whether or not such dilution will occur can be determined by calculating the hypothetical market price for the convertible bonds and/or bonds with warrants pursuant to recognised mathematical models and then comparing such price with the issue price. If the hypothetical market price does not exceed the issue price by more than 5% at the time the convertible bonds or bonds with warrants are issued, then, in accordance with the meaning and spirit of 186 (3) sentence 4 of the German Stock Corporation Act, subscription rights may be excluded on the basis that the reduction in price is immaterial. (Notice of AGM :47) Page 14 of 17

15 For this reason, the resolution provides that the Executive Board, subject to performance of due diligence, must be of the opinion prior to the issue of the convertible bonds and/or bonds with warrants that the intended issue price will not lead to any substantial dilution of the share value. The theoretical market value of a subscription right would thus be reduced to almost zero, so shareholders would not be at an substantial economic disadvantage as a result of the exclusion of their subscription rights. The Executive Board may seek expert advice to the extent it considers it appropriate to do so on a case-bycase basis. Thus, investment banks underwriting the issue might provide the Executive Board with suitable assurances that no substantial dilution of the share value will occur. This might also be confirmed by an independent investment bank or an independent expert. Independent of the Executive Board's opinion, it can be guaranteed that conditions will be fixed in accordance with market factors, thereby avoiding an substantial dilution in the event of a bookbuilding procedure. Under this procedure, bonds with warrants and/or convertible bonds will not be offered at a fixed issue price. Rather, the issue price and/or the individual terms and conditions of the bonds with warrants and/or convertible bonds (e.g., the interest rate and the conversion or option price) shall be fixed on the basis of purchase orders submitted by investors. All this ensures that no substantial dilution of the share value will occur as a result of the exclusion of subscription rights. In addition, shareholders have the opportunity to maintain their interest in the Company's registered share capital even after conversion rights or options have been exercised by buying additional shares on the stock market at any time. II. pursuant to 203 (2) and 186 (4) sentence 2, concerning agenda item 9 Under the resolution concerning agenda item 9, the existing and still not practiced authorisation to increase the registered share capital, which authority would have expired in 2003, is hereby revoked and replaced by a new and more flexible authorisation that will apply for a period of five years beginning on the date of the General Shareholders' Meeting. Under the proposed authorisation, the Executive Board will be in a position in the future to more comprehensively adjust the Company's equity capitalisation to meet any business and legal needs. When such authorisation is exercised, it is expected that the shareholders will be offered subscription rights, subject to the following exclusive exceptions: The Executive Board shall be authorised to exclude any fractional amounts from the shareholders' subscription rights. This authority serves to create a feasible subscription ratio in view of the amount of the respective capital increase. This will facilitate the handling and exercise of the subscription rights and will save additional expenses. The sale of the free fractional amounts will be made based on the stock market prices. The Executive Board shall also be authorised, subject to the approval of the Supervisory Board, to exclude the shareholders' subscription rights with respect (Notice of AGM :47) Page 15 of 17

16 to a nominal amount of up to 8,195,250 in order to offer, either directly or indirectly through a German financial institution, new shares to employees of the Company or any of its affiliated enterprises within the meaning of 15 et seq. of the German Stock Corporation Act in connection with the existing Employee Stock Ownership Plan. The Employee Stock Ownership Plan launched at the time on the basis of the resolution adopted at the 21 September 1998 General Shareholders' Meeting has proved to be successful. The scope of the authority shall be expanded in order to provide new employees with an opportunity to participate in the programme. The Executive Board shall also be authorised, with the consent of the Supervisory Board, to exclude pre-emptive or subscription rights on capital increases in return for contributions in kind where such increases serve the purpose of acquiring other enterprises or any divisions or equity interests therein. This includes mergers with other enterprises, provided that the merger is consummated through the issue of new shares paid for by contributions in kind and the purpose of the transaction is effectively to purchase such enterprises or divisions or equity interests therein. This new authority should serve to place the Executive Board in a position to use Company shares as consideration in such cases. This authority with its more extensive quantitative scope - corresponds to its purpose with the authority already existing in the Articles of Association. The Company should be in a position to react swiftly and successfully to advantageous offers or to opportunities for purchasing enterprises or divisions or equity interests therein. The Company does business on the market of system software development which is influenced primarily by US competition. In the US market, the purchase of enterprises or holdings is not done by using cash, but rather by exchanging stock. This form of transaction is becoming increasingly prevalent in the German market. The prospects of raising capital in return for contributions in kind as envisioned through this authority are aimed at exploiting such opportunities. In order to compete with other enterprises in this industry that likewise have the ability to use their stock as "acquisition currency", this authorisation structure should serve to maintain and strengthen the Company's competitiveness and to expand its own portfolio. The issue and transfer of shares as a form of consideration for the purchase of companies or equity investments could also prove to be a more cost-effective form of financing for the Company (since it also safeguards the Company s liquidity) than the straight payment of cash, and is therefore consistent with the shareholders' interests. The proposed scope of authority equalling 50% of the current registered share capital would allow the Company in certain appropriate circumstances to acquire larger enterprises, provided that such action is in the shareholders' and Company's best interests. The Executive Board and Supervisory Board will carefully review, in each individual case, whether the exclusion of pre-emptive rights will be required for these purposes and whether the value of the enterprise or the equity investment to be acquired stands in a reasonable relationship to the value of the Company s newly issued shares. In addition, the Executive Board shall be authorised, with the consent of the Supervisory Board, to exclude the shareholder pre-emptive rights in the event of a cash capital increase, provided that the cash capital increase does not (Notice of AGM :47) Page 16 of 17

17 exceed 10% of the registered share capital existing on the date of the initial exercise of this authority and the issue price is not significantly lower than the stock market price. Such a cash capital increase and the exclusion of the preemptive rights in accordance 186 (3) sentence 4 of the German Stock Corporation Act will permit the Company to undertake stock placements on short notice. The proceeds generated herefrom generally lead to significantly higher inflow of funds than that which would be created through the issue of shares subject to pre-emptive rights. The reason for the aforementioned is that a stock placement which is not subject to a statutory pre-emptive rights period may be completed immediately after the placement price is fixed. Accordingly, no price modification risk for the subscription period needs to be factored into the placement price. With this form of capital increase, the Executive Board should be in a position to flexibly exploit favourable market conditions and to strengthen the Company's capitalisation structure for future business development at optimal terms and conditions. In exercising the authority, the Executive Board will calculate the discount on the issue price such that it would not be significantly below the stock market price. The pre-emptive right exclusion can be made on a maximum of 10% of the registered share capital existing on the date that this authority is exercised. In accordance with 186 (3) sentence 4 of the German Stock Corporation Act, the shareholder s interests in anti-dilution protection must be taken into account. In addition, each shareholder, by virtue of the initial placement price of the new shares, will be given an opportunity to purchase shares required to maintain his or her shareholding quota at essentially the same terms and conditions as the market. (Notice of AGM :47) Page 17 of 17