SAP's most important assets are its employees, whose innovation and entrepreneurial thinking will drive our continued success. The Stock Appreciation Rights Plan (STAR Plan), Incentive Plan 2010, Virtual Stock Option Plan 2007 (SAP SOP 2007), Stock Option Plan 2002 (SAP SOP 2002), SAP 2000 Long Term Incentive Plan (LTI Plan 2000) and the replaced Business Objects awards, which complement the existing compensation system, are examples of how SAP offers additional incentives for employees, managers, and top performers. Our incentive plans are well-balanced, transparent, and focused on the long term. These aspects help ensure that SAP remains an attractive employer now and in the future for qualified, ambitious new recruits as well as for experienced industry professionals.

1. Stock Appreciation Rights (STAR) Plans 2. Incentive Plan 2010 3. Virtual Stock Option Plan 2007 (SAP SOP 2007) 4. SOP Performance Plan 2009 (SAP SOP 2009) 5. Stock Option Plan 2002 (SAP SOP 2002) 6. Long Term Incentive Plan (SAP 2000 LTI Plan) 7. Replaced Business Objects awards 8. SAP Employee Discounted Stock Purchase Plan (EDSP)

1. Stock Appreciation Rights (STAR) Plans

The STAR Plan refers to SAP's Stock Appreciation Rights Plan, which allows employees to benefit from increases in the value of SAP's share price. The program is a cash-settled plan for SAP employees with unlimited contracts.

STAR 2008

STAR 2008 involves quarterly calculation of STAR earnings, measurement period of two years, and eligibility period for employees with unlimited work contracts. Employees are eligible for the STAR Plan after one full year of employment (approximately 25,700 employees in 2008), provided that they do not participate in the SAP SOP Plans (see below). Participants are selected based on job performance. Individual managers remain responsible for the actual allocation of STARs to their employees based on performance. Approximately 18.5 million STARs have been granted under STAR 2008. The grant-base value is €32.69 for STAR 2008, determined from the average price of the SAP ordinary share over 20 trading days following the announcement of the preliminary results for the 2007 fiscal year. The ending valuation is calculated quarterly, with each quarterly valuation over a period of two years (eight quarters) weighted as follows:

First Year Weighting of 40%	Second Year Weighting of 60%
Quarter 1: 5% Quarter 2: 5% Quarter 3: 10% Quarter 4 (year-end): 20% Total: 40%	Quarter 5: 10% Quarter 6: 10% Quarter 7: 10% Quarter 8 (year-end): 30% Total: 60%

The quarterly valuations for the periods ending December 31 are based on the difference between the grant price and the average closing price of one share, as quoted on the XETRA trading system over the 20 consecutive business days immediately starting the day after the announcement SAP’s preliminary annual results. The other quarterly valuations are based on the grant price versus the average closing price of share quoted on the XETRA trading system over the five consecutive business days after the announcement of SAP’s quarterly results. Each quarterly valuation period is measured independently.

The cash payout value of each STAR will be calculated quarterly as follows: 100% of the first €12.50 increase in the share price, 50% of the next €12.50 value increase, and 25% of any additional appreciation. Employees will receive payments in two installments: March 31, 2010, and January 31, 2011. Participants will receive STAR payments provided that they are still under an unterminated employment contract at the time of payment.

STAR 2009 Performance plan

STAR 2009 also involves quarterly calculation of STAR earnings. However, the earnings are based on the outperformance of the SAP stock price compared to the Tech Peer Group Index which includes 10 public competitors in the technology industry. For that purposes, the STAR agreement sets the initial value of the index (97.54 points) as well as the SAP grant value (€28.00 per share). Approximately 16.0 million STARs have been granted under STAR 2009.

The STAR Performance Plan 2009 applies to the period starting January 1, 2009 and ending December 31, 2010. The performance of the SAP share and the reference index will be measured over this two-year period, with calculations every quarter. Development of the value will be measured over eight quarters (including two year-end valuations) according to a graduated scale, determined as follows:

Calculation of Ending Valuation

First Year Weighting of 40%	Second Year Weighting of 60%
Quarter 1: 5% Quarter 2: 5% Quarter 3: 10% Quarter 4: 20% Total: 40%	Quarter 5: 10% Quarter 6: 10% Quarter 7: 10% Quarter 8: 30% Total: 60%

The maximum total payout per STAR is capped at 110% of the grant value, which is €30.80 per STAR for 2009 grant.

Employees will receive payments in two installments: 50% each on both March 31, 2011, and January 31, 2012. Participants will receive STAR payments provided that they are still under continuous employment at the time of payout.

Basic Accounting Principles in Connection with the STAR Plan

According to U.S. GAAP accounting rules (U.S. GAAP) as well as International Financial Reporting Standards (IFRS), compensation expenses related to STARs are recorded over the vesting period, which is from the day of grant through the last payment date. SAP purchased various call options to hedge certain anticipated cash flow exposure relating to the STAR Plans. The call options have been structured to replicate the payouts required, if any, under the terms of the STARs. Through the hedging program the change in fair value of the STARs offsets the compensation expense on the STAR recognized.

2. Incentive Plan 2010

Incentive Plan 2010, a share price-oriented remuneration program, will reward participants for significantly expanding SAP's business and substantially increasing value to shareholders and customers. Incentive Plan 2010 was instituted in 2006 as share price oriented remuneration for the Executive Board, senior managers, and key contributors. Approximately 1.4 million rights have been granted under Incentive Plan 2010. Tying a long-term incentive program to the performance of our own corporate stock not only benefits SAP employees individually but also signals to the business community and market analysts that SAP appreciates its employees and the value they create for our customers. Incentive Plan 2010 gives participants the opportunity to benefit from the contribution they bring to the performance of the SAP Group during the period January 1, 2006, to December 31, 2010. Participants will collectively receive stock appreciation rights that will expire on December 31, 2010.

The plan provides for a maximum payout of €144.60 per right if the market capitalization of SAP doubles by December 31, 2010. The rights issued to the beneficiaries of this plan will automatically be exercised in case the conditions for exercise are met. The base value of the rights is the base market capitalization figure of €44,794,067,259, calculated as €144.60 (average XETRA closing price of the SAP stock in the period July 1 through December 31, 2005, prior to the capital increase as implemented on December 21, 2006) times 309,779,165 shares (number of issued shares minus the treasury shares on December 31, 2005, prior to the capital increase implemented on December 21, 2006). For the Incentive Plan 2010, the relevant actual market capitalization is calculated by multiplying the average closing price of one SAP share in the XETRA trading system in the measurement period (July 1 through December 31 of each year) by the average number of outstanding SAP shares outstanding minus the average number of treasury shares in the measurement period of that year. The relevant actual market capitalization is calculated annually in the first month after the end of each measurement period, beginning in 2006 and ending in 2010.

The rights will only be exercisable if SAP's common share outperforms the S&P North Software-Software Index (former Goldman Sachs Software Index, GSTI Software Index) during the period between the issue of the rights and December 31, 2010, or December 31 of the year with the last measurement period if the rights are exercised before that date. Further, to be exercisable from 2006 through 2009, the actual market capitalization must not be less than 200% of the base value.

The rights are not exercisable if exercise would result in a windfall profit. The decision whether exercise results in a windfall profit will be made by the Supervisory Board's compensation committee at its sole discretion. If the relevant actual market capitalization is 200% (or more) of the base market capitalization and the other conditions are met, the payout value per right will be €144.60. If the increase between the base value and the relevant actual market capitalization is less, the payout per award will be based on the following scale:

Increase in market capitalization	Calculation of payout as percentage per point increase	Incremental maximum payout as percentage of base value	Incremental maximum payout per right
0% to 50%	0,00	0%	€0,00
> 50% to 80%	0,67	20%	€28,92
> 80% to 90%	3,00	30%	€43,38
> 90% to 99.99%	5,00	50%	€72,30
Total		100%	€144,60

If the plan pays out, beneficiaries will receive the payments 12 months after the compensation committee has determined the exercise value.

Basic Accounting Principles in Connection with the Incentive Plan 2010

According to U.S. GAAP respective IFRS accounting rules, compensation expenses related to Incentive Plan 2010 are recorded over the vesting period, which is from the day of grant through the last payment date. The Incentive Plan 2010 is settled in cash rather than by issuing equity instruments, so a liability is recorded for the rights granted reflecting the fair value of the rights at the reporting date. Compensation expense - including the effects of any changes in fair value of the rights - is accrued over the period the beneficiaries are expected to perform the related service (vesting period).

3. Virtual Stock Option Plan 2007 (SAP SOP 2007)

Grants 2007 and 2008

The SAP SOP 2007 Plan provides for cash settlement only and is available to members of the Executive Board, members of subsidiaries' executive boards, as well as to eligible executives and other top performers of SAP AG and its subsidiaries. The program replaced the SAP SOP 2002 Plan, described below. The awards under the SAP SOP 2007 Plan have a grant-base value of €35.71 in 2007, and € 32.69 in 2008, which is based on the average fair market value of one common share over the 20 business days following the announcement date of SAP's preliminary results for the preceding fiscal year. In 2007, SAP granted 7.0 million stock appreciation rights (Virtual Stock Options or rights) and in 2008 8.7 million Virtual Stock Options.

Under the SAP SOP 2007 Plan, beneficiaries are granted Virtual Stock Options based on the SAP share price, which gives them the right to receive a certain amount of money by exercise under the terms and conditions of this plan. Rights granted under this plan may be exercised after a vesting period of two years starting on the grant date. The term of the Virtual Stock Options is five years. The rights will expire five years after the grant date if not exercised by the holder before that date. The exercise price is 110% of the base value. Thus, the right can only be exercised if the share price at exercise exceeds the grant price by at least 10%. Monetary benefits will be capped at a share price of 200% of the exercise price.

Basic Accounting Principles in Connection with the SAP SOP 2007 Plan

According to U.S. GAAP respective IFRS accounting rules, compensation expenses related to rights are recorded over the vesting period. SAP purchased various call options to hedge certain anticipated cash flow exposure relating to the SAP SOP 2007 Plan. The call options have been structured to replicate the payouts required, if any, under the terms of the rights. Through the hedging program the change in fair value of the stock appreciation rights offsets the compensation expense on the options recognized.

4. SOP Performance Plan 2009 (SAP SOP 2009)

The SAP SOP 2009 Plan provides for cash settlement only and is available to members of the Executive Board, members of subsidiaries' executive boards, as well as to eligible executives and other top performers of SAP AG and its subsidiaries. The program replaced the SAP SOP 2007 Plan, described above. The awards under the SAP SOP 2009 Plan have a grant-base value of €28.00 in 2009, which is based on the average fair market value of one common share over the 20 business days following the announcement date of SAP's preliminary results for the preceding fiscal year. In 2009, SAP granted 10.3 million Virtual Stock Options or rights. Unlike the STAR 2007 plan, the future earnings at exercise date will be based on the outperformance of SAP stock price compared with the Tech Peer Group Index, which includes 10 public competitors in the technology industry. For that purposes, the option agreement sets the initial value of the index (97.54 points).

Under the SAP SOP 2009 Plan, beneficiaries are granted Virtual Stock Options based on the SAP share price, which gives them the right to receive a certain amount of money by exercise under the terms and conditions of this plan. Rights granted under this plan may be exercised after a vesting period of two years starting on the grant date. The rights will expire five years after the grant date if not exercised by the holder before that date.

Basic Accounting Principles in Connection with the SAP SOP 2009 plan

According to U.S. GAAP respective IFRS accounting rules, compensation expenses related to rights are recorded over the vesting period.

5. Stock Option Plan 2002 (SAP SOP 2002)

At the 2002 Annual General Meeting of Shareholders in May 2002, our shareholders approved the SAP SOP 2002 Plan. Under the SAP SOP 2002, the Executive Board was authorized to issue on or before April 30, 2007, up to approximately 19 million stock options. In 2007, the SAP SOP 2002 Plan was replaced by the SAP SOP 2007 Plan. The last stock options under the SAP SOP 2002 Plan were granted in 2006. The last rights granted under SAP SOP 2002 can be exercised until 2011, but SAP will not grant new rights under that program.

The SAP SOP 2002, which provides for the issuance of stock options to the members of SAP's Executive Board as well as to eligible executives and other top performers of SAP and its Group Companies, is designed to attract, retain, and motivate senior managers and top performers to grow the value of the enterprise and to secure their commitment to SAP.

The SAP SOP 2002 replaced the LTI Plan 2000 (see below) in 2003. The former LTI Plan 2000 was one of the most complex plans both in the DAX 30 and as compared to plans commonly set up in the United States. Therefore, the new SAP SOP 2002 has a significantly simplified structure based on international standards and the standards applied by other global domestic companies engaged in the technology sector. Unlike the LTI Plan 2000, the SAP SOP 2002 does not offer convertible bonds as part of the remuneration. The plan only offers stock options. Additionally, the SAP SOP 2002 does not use index-based, performance-linked success targets and the setting of exercise thresholds linked to fixed share price targets, which has been used by the LTI Plan 2000 in the past. We eliminated the index-based, performance-linked success targets to be more competitive with its U.S. competitors and other German companies that prepare their balance sheets in accordance with U.S. GAAP.

Each stock option entitles its holder to subscribe to four shares in SAP, against the payment of an exercise price, which is composed of a base price and a premium of 10% thereon. The base price is the average market price of the SAP share on the Frankfurt Stock Exchange during the five trading days preceding the issue or the respective stock option, calculated on the basis of the arithmetic mean of the closing auction prices of the SAP share in the XETRA trading system. The premium of 10%, which is payable in addition to the base price, serves the purpose of rendering the exercise of the option economically reasonable only after the stock exchange price of the SAP share has risen by at least 10% as compared with the price used to determine the base price. Until 2006, a total of approximately 10.6 million stock options have been granted to participants under SAP SOP 2002. By March 2009, Stock options in respect of 3.5 million shares are still outstanding.

Basic Accounting Principles in Connection with SAP SOP 2002

Until December 31, 2005, SAP applied APB 25, under which SAP SOP 2002 was considered a fixed plan. Since the exercise price, which is fixed one day before grant, cannot be less than the share price on that date, no expenses were recorded for awards granted under the SAP SOP 2002.

Beginning on January 1, 2006, SAP accounts for stock based compensation in accordance with SFAS 123 (revised), "Share-Based Payment (SFAS 123R)". The stock option plan is considered an "Equity-Based" program and is therefore measured at grant date fair value and is not subsequently remeasured. Compensation expense is recorded over the vesting period equal to the fair value at grant date. The accounting does not differ from the requirements of IFRS 2 "Share Based Payment".

6. SAP 2000 Long Term Incentive Plan (LTI Plan 2000)

LTI Plan 2000 was introduced to augment SAP's existing stock-based compensation package to attract, retain, and motivate senior managers and top performers to grow the value of the enterprise and to secure their commitment to SAP. The LTI Plan 2000 is a stock-based compensation program that allowed eligible employees a choice between two different kinds of awards, stock options and convertible bonds. The last awards under the LTI Plan were granted in 2002. The last rights granted under LTI plan can be exercised until 2012, but SAP will not grant new rights under that program. At the 2002 Annual General Meeting of Shareholders, our shareholders approved the SAP SOP 2002 (see explanation above). The SAP SOP 2002 replaced LTI Plan 2000.

If stock options were chosen, the participant receives 25% more stock options than convertible bonds. Under the LTI Plan 2000, each convertible bond having a €1 nominal value may be converted into four ordinary shares over a maximum of 10 years, subject to vesting requirements. The conversion price is equal to the market price of an ordinary share as quoted on the XETRA trading system the day immediately preceding the granting. Each stock option may be exercised in exchange for four ordinary shares over a maximum of 10 years, subject to the same vesting requirements. The exercise price varies according to the outperformance of the ordinary share price appreciation versus the appreciation of the S&P North Software-Software Index (former Goldman Sachs Software Index, GSTI Software Index) from the day immediately preceding granting to the day in which the exercise price is being determined. Both the convertibles bonds and stock options vest as follows: from the date of grant, 33% after two years, 33% after three years, and 34% after four years. Forfeited convertible bonds or stock options are disqualified and may not be reissued.

The maximum number of subscription rights issued under the LTI Plan 2000 was 18,750,000. Said number, however, would have been attained only if the beneficiaries had exclusively opted for stock options. In accordance with the scope in which the beneficiaries opted for convertible bonds having a higher value, the multiplication thereof by 1.25 resulted in a corresponding reduction of the maximum number of subscription rights to be issued under the LTI Plan 2000. By March 14, 2002, a total of 12.3 million convertible bonds and stock options have been issued under the LTI Plan 2000. By March 2009, a total of 6.6 million conversion and subscription rights are still outstanding.

Basic Accounting Principles in Connection with LTI Plan 2000

Until December 31, 2005, SAP accounted for stock based compensation in accordance with the "Accounting Principle Board Opinion 25" (APB 25). The convertible bond program was considered a fixed plan under APB 25 and resulted in no compensation expense under the current terms of the LTI Plan 2000. Under APB 25, the stock option program was a variable plan because the exercise price varies depending upon the criteria described above. As such, compensation expense was recorded over the vesting period equal to the difference between the exercise price of the stock options and the market value of the ordinary share. APB 25 was based on the intrinsic value method.

Beginning on January 1, 2006, SAP accounts for stock based compensation in accordance with SFAS 123 (revised), "Share-Based Payment (SFAS 123R)”. The convertible bond program and the stock option plan are considered an Equity-Based" program and are therefore measured at grant date fair value and are not subsequently remeasured. Compensation expense is recorded over the vesting period equal to the fair value at grant date. The accounting does not differ from the requirements of IFRS 2.

7. Business Objects cash-settled awards based on former Business Objects option and Restricted Stock Unit plans

Prior to being acquired by SAP, the employees of Business Objects companies were granted equity awards giving rights to Business Objects shares. Following the Business Objects acquisition and the squeeze out on February 18, 2008, the Business Objects shares were no longer publicly traded. Therefore, SAP implemented mechanisms to allow the employees to cash out their equity awards, either by receiving cash instead of Business Objects shares (cash payment mechanism or CPM) or by receiving Business Objects shares that they subsequently sell to SAP (liquidity agreement mechanism or LAM). The implementation of CPM and LAM resulted in substance in a conversion of the 5.1 million equity awards outstanding at February 18, 2008 to an equal number of cash-settled share-based payment awards (replacing awards) to replace the stock options and Restricted Stock Units (RSUs) granted to them by Business Objects prior to SAP's acquisition of Business Objects (replaced awards).

The replaced awards comprised the following categories of awards:

• Stock options with a 4-year monthly graded vesting schedule from grant date, subject to a minimum of one year of continued service with the Company. The contractual terms range from 7 to 10 years. The exercise price for one subcategory of the awards was equal to 100% of the closing price of the Business Objects stock as reported on the Eurolist by Euronext on the last trading day prior to the option grant date; for the other subcategory of awards the exercise price was 100% of the average of the opening share price as reported on such market over the 20 trading days immediately preceding the historical grant date.
• International RSUs were subject to a 3-year graded vesting schedule. These rights were provided free of charge to the employees (no exercise price).
• French RSUs had a 2-year vesting period followed by a two-year holding period. These rights were also provided to the employees free of charge (no exercise price).

The replacing awards closely mirror the terms of the replaced awards (including conditions such as exercise price and vesting) except that:

• The replaced awards were planned to be settled by issuing equity instruments whereas the replacing awards are settled in cash either via the CPM or via the LAM mechanism.
• The replaced awards were indexed to Business Objects' share price whereas the replacing awards are indexed to SAP's stock price as follows: SAP's offering price for Business Objects shares during the tender offer (€42.00) is divided by SAP AG's share price at the tender offer closing date (€32.28) and the result is multiplied by the weighted average SAP share closing price during the 20 trading days preceding the exercise or disposition date.

In countries where the CPM applies, the benefit resulting from the stock option exercise or the RSU vesting is usually paid directly to the employees by SAP.

In countries where the LAM applies an equity settlement was retained but supplemented by the LAM. In these cases, the employees continue to receive shares of Business Objects upon stock options exercise and RSU vesting and have a put option on these shares to resell the shares to SAP France within three months from the exercise or vesting date, except for some stock options exercise subject to French tax law, for which the put option period is two years and three months. SAP has a call option on these shares during 30 days after the end of the put option period.

Basic Accounting Principles in Connection with Business Objects replacing awards

Both under the CPM and the LAM mechanism, these awards are accounted for as a cash-settled award under SFAS 123R because the obligation to the employee will ultimately be settled in cash only. Any change in fair value is booked through stock-based compensation expense in operating income. The accounting does not differ from the requirements of IFRS 2.

8. SAP Employee Discounted Stock Purchase Plan (EDSP)

The SAP Employee Discounted Stock Purchase plan is a compensation plan, which allows SAP employees to become shareholders of the company. SAP offers eligible employees in certain countries the opportunity to purchase SAP shares at a 15% discount. This benefit is limited to 10% of their monthly base salary.

Employees are eligible to participate in the EDSP plan after six months of continuous service at SAP if they are under an unlimited employment contract.

Basic Accounting Principles in Connection with SAP EDSP

According to the provision of SFAS 123R as well as IFRS 2, the discount is realized as stock based compensation expense in the period when the employee exercises this right.