DOMESTICPARTNER INFORMATION

Overview and FAQs

Welcome to the Domestic Partner Information OverviewThis overview provides:· Information on SAP’s domestic partner benefits policy· Frequently asked questions (FAQ’s)· Important forms

¾ Declaration of Domestic Partnership¾ Domestic Partnership Declaration of Tax Status¾ Declaration of Termination of Domestic Partnership

SAP’s Domestic Partner Benefits PolicyAll benefits-eligible SAP employees working at least 30 hours a week are eligible to also enroll theirsame-sex or opposite sex domestic partner and their partner’s eligible dependents for healthcarecoverage (including medical, prescription drug, vision, dental and flexible spending account coverage),and supplemental life insurance under the SAP America Health and Welfare Program (the “Program”)

For the purpose of benefits eligibility, SAP defines domestic partners as two people in a spouse-likerelationship who have met all of the following requirements:· Intend to remain each other’s domestic partner indefinitely;· Have resided together in the same permanent residence for at least the last 12 months;· Are not related by blood or marriage to a degree of closeness that would prohibit legal marriage in

the state in which they reside;· Are engaged in a committed relationship of mutual caring and support and are jointly responsible for

the common welfare and financial obligations of the household, or the domestic partner is chieflydependent upon the employee for care and financial assistance;

· Are not legally married to anyone else and are not the domestic partner of anyone else; and· Are both at least 18 years of age and mentally competent to enter into a legal contract.

Eligible dependents include your natural, adopted and stepchildren and the children of your domesticpartner, as long as they meet all of the following criteria:· Are unmarried;· Receive more than 50% of their support from you;· Live in your household as their principal place of residence;· Are age 25 or younger; or· Are over age 25 and incapable of self-sustaining employment by reasons of mental or physical

handicap, which occurred prior to age 25.

Before an employee can enroll a domestic partner and his or her dependents for benefits, the employeeand domestic partner must complete a Declaration of Domestic Partnership and return it to HRdirect.

SAP Benefit Plans that Domestic Partners May Be Eligible for…The following are the SAP benefit plans in which you may be able to enroll your domestic partner andtheir eligible dependents:· Medical (includes vision and prescription drug)· Dental (if also enrolled in a SAP medical plan option)

· FSAs (if your domestic partner and his or her children are considered your legal tax dependents asdefined by the IRS)

· Supplemental life insurance

Frequently Asked Questions (FAQ’s)

2. What about Common-Law marriages?SAP also covers common-law spouses who reside in states that recognize common-law marriages.To be eligible for coverage you must meet the requirements set forth by the state in which you resideand submit a completed notarized Affidavit of Common-Law Marriage to HRdirect.

3. If I enroll my domestic partner and his/her children under my SAP healthcare plan, will it costthe same as if he/she was my spouse?The amount of your contribution to provide health benefits for your domestic partner will be thesame as for a qualified spouse and child(ren). However, the IRS Tax Code treats spouses anddependents through marriage differently regarding employer-sponsored healthcare plans. The cost ofcoverage for a spouse and dependents (as defined in Code section 152) is automatically exempt fromtaxes, but for a person who is not a spouse or dependent, a payment for healthcare coverage istaxable to the employee.

If the employee’s domestic partner is their legal tax dependent under the Code, they must providethe HRdirect with a Declaration of Tax Status to that effect in addition to the Declaration ofDomestic Partnership to gain the benefit of the tax exemption. A copy of the Declaration of TaxStatus form is attached to this Overview and FAQ.

If the employee’s domestic partner is not their legal tax dependent, the payment for coverage will betreated as follows:· The value of any coverage for the domestic partner is considered “imputed income.” This

additional “imputed income” is reported on the employee’s pay statement and W-2 form. Theemployee will pay taxes on the amount of imputed income. This “imputed income” value iscalculated by determining the fair market value (FMV) of the coverage provided to the domesticpartner. To determine the FMV, SAP will use the Employee + One rate minus the EmployeeOnly rate to determine the value of the domestic partner coverage.

· SAP will consider dependents of a domestic partner to be tax dependents of the employee underthe Code, and therefore, no imputed income will apply for purposes of a domestic partner’schildren.

4. What is the amount that will be added to my taxable income?The amount that will be added to your taxable income on a per pay basis for 2011 will

ImputedIncome Kaiser PPO 85 CC90 CC80 Dental

Employee + DP $246.51 $345.86 $194.00 $150.00 $22.49

Employee + DP+ 1 child $298.55 $418.88 $229.05 $175.31 $27.24

Employee + DP+ 2 dependents $520.41 $730.15 $374.66 $283.21 $47.48

If you live in a state that offers tax relief for registration of a domestic partnership. See theDeclaration of Tax Status form attached to this Overview and FAQ for more information.

5. How do I know if my domestic partner is my legal tax dependent under the Internal RevenueCode?Section 152 of the Code states that your domestic partner and/or his or her children can be claimedas your legal tax dependents when you file your tax return for any year in which they meet all of thefollowing criteria for the entire calendar year:· Are citizens, U.S. nationals or residents of the U.S.;· Live with you and are a member of your household during the entire taxable year;· Receive over half of their support from you; and· Have a tax-relationship with you that does not violate local laws.

Since determining whether or not your domestic partner is a legal tax dependent is complicated, it isadvised that you seek professional counsel before submitting a Declaration of Tax Status.

6. What SAP benefits will apply to my domestic partner and his or her children?You can enroll your domestic partner and his or her children for medical and/or, dental coverage,flexible spending account and/or supplemental life insurance coverage and they will also have accessto our Employee Assistance Program.

7. Can I submit eligible healthcare or dependent care expenses to my flexible spending accounts(FSAs) for my domestic partner and his/her children?If your domestic partner is considered your legal tax dependent, eligible expenses for your domesticpartner’s child(ren) may be reimbursed from your Dependent Care or Health Care FSA. If yourdomestic partner is not considered your legal tax dependent, day care and/or healthcare expenses foryour domestic partner’s child(ren) may only be reimbursed from your FSAs if you are alsoconsidered the child’s legal parent (i.e., pursuant to adoption).

8. How does a change in life status affect my plan elections involving domestic partners?You may change your elections involving a domestic partner under some of the benefit plans duringthe year if you have a change in life status and the benefit change you are requesting is consistentwith the change. Examples of life status changes include:· Signing and filing a Declaration of Domestic Partnership;· Ending your domestic partnership by filing a Declaration of Termination of Domestic

Partnership;· Birth or adoption of a child (yours and/or your partner’s);· A child losing dependent status;· Your domestic partner gaining or losing his or her job or healthcare coverage.

Be sure to call the HRdirect within 31 days following any change in status. Otherwise, you willnot be able to make any changes due to the life status event until the next annual Open Enrollmentperiod.

9. If I filed a Declaration of Domestic Partnership previously, do I need to do so again?No. Your Declaration of Domestic Partnership is good until you file a Declaration of Terminationof Domestic Partnership.

10. What happens to my domestic partner and his or her covered children if we end our domesticpartnership or if I am no longer eligible for coverage under the Program?If you die, terminate employment, become ineligible for coverage under the Program, or you andyour domestic partner end your domestic partnership (by filing a Declaration of Termination ofDomestic Partnership with HRdirect), your domestic partner and his or her covered children areeligible for continued medical, prescription drug, vision, dental and flexible spending accountcoverage under COBRA at their expense.

For more detailed information concerning COBRA continuation coverage, refer to the SAP AmericaHealth & Welfare Program summary plan description or contact the HRdirect.

This Overview and Frequently Asked Questions (FAQs) are provided to facilitate understanding ofSAP’s benefit plans, but do not constitute the official plan documents. In the event of any conflictamong the information provided in this Overview and FAQ and the official plan documents for theapplicable plan or program the plan documents will govern.

Declaration of Domestic PartnershipI. Declaration of Domestic Partner StatusWe, ________________________, (SAP employee), and _________________________, (domesticpartner), each certify and declare that we are each other’s sole domestic partners as set out below. Wesubmit this declaration of domestic partnership for the purpose of obtaining benefits that SAP America,Inc. may extend to the domestic partners of employees.

We declare that my domestic partner is eligible for benefits because [check one]:

[ ] He or she is registered with me as a domestic partner with a state or municipality that has suchregistration, and I have attached the registration to this form; or

[ ] We meet all of the following criteria:

· We intend to remain each other’s domestic partner indefinitely;· We have resided together in the same permanent residence for at least the last 12 months;· We are not related by blood or marriage to a degree of closeness that would prohibit legal

marriage in the state in which we reside;· We are engaged in a committed relationship of mutual caring and support and are jointly

responsible for the common welfare and financial obligations of the household, or the domesticpartner is chiefly dependent upon the employee for care and financial assistance;

· We are not legally married to anyone else nor the domestic partner of anyone else; and· We are both at least 18 years of age and mentally competent to enter into a legal contract.

II. Termination of Marriage or Domestic PartnershipA. The employee understands that he/she has an obligation to ensure that the Human Resources

Interaction Center (HRdirect) receives a signed Declaration of Termination of DomesticPartnership if there is any change in the marital or domestic partnership status that makes thisDeclaration of Domestic Partnership invalid or erroneous. Notice shall be provided to theHRdirect within 31 days of such change.

B. The employee understands that the benefit coverage obtained as a result of this Declaration ofDomestic Partnership will terminate effective as of the last day of the month during which thedomestic partnership ends or at such time as coverage terminates in accordance with the termsand conditions of applicable policies.

III. Tax Information on Health Benefits for Domestic PartnersThe amount of the employee’s contribution to provide health benefits for their same-sex domesticpartner will be the same as for a qualified spouse and child(ren). However, the Internal Revenue Code

(Code) treats spouses and dependents through marriage differently regarding health benefits. The cost ofcoverage for a spouse and children or stepchildren is automatically exempt from taxes, but for a personwho is not a spouse or stepchild through marriage, a payment for health benefits coverage is not entitledto tax exemption unless the person is a “dependent” as defined in the Code. If the employee’s same-sexdomestic partner is their dependent under the Code, they must provide the HRdirect with a Declarationof Tax Status to that effect to gain the benefit of the tax exemption.

If the employee’s domestic partner is not their legal tax dependent, the payment for coverage will betreated as follows:

· The value of any coverage for the domestic partner is considered “imputed income.” This additionalimputed income is reported on the employee’s pay statement and W-2 form. The employee will paytaxes on the amount of imputed income. This imputed income value is calculated by determining thefair market value (FMV) of the coverage provided to the domestic partner. To determine the FMV,SAP will use the full Employee + One equivalent rate minus the full Employee Only equivalent rateto determine the value of the domestic partner coverage.

· SAP will consider dependents of a domestic partner to be tax dependents of the employee under theCode, and therefore, no imputed income will apply for purposes of a domestic partner’s children.

III. Acknowledgments

A. We understand that a civil action may be brought against one or both of us for any losses(including attorney’s fees and costs) due to any false statement contained in this Declaration orfor failure to notify SAP of changed circumstances as required in Section II, above. Theundersigned employee further understands that falsification of information in this Declaration orfailure to notify SAP of changed circumstances pursuant to Section II above may lead todisciplinary action, including discharge from employment.

B. We have provided information in this Declaration for use by SAP for the sole purpose ofdetermining our eligibility for certain health insurance benefits. We understand and agree thatSAP is not legally required to extend such benefits to spouses or domestic partners and that SAPmay change or terminate these benefits in its discretion at any time and for any reason withoutconsent of any employee or group of employees.

C. We understand that the information provided in this Declaration will be treated as confidential bySAP but will be subject to disclosure:

1. Upon the express written authorization of the undersigned employees; or

2. If otherwise required by law.

D. We understand that this Declaration may have legal implications relating, for example, to ourownership of property or to taxability of benefits provided. We understand that before signingthis Declaration we should seek competent legal and tax advice concerning such matters. Weacknowledge that SAP has provided us with no advice in this regard.

We affirm, under penalty of perjury, that the statements in this Declaration are true and correct.

Employee: ______________________________ Date: ______________

Printed name: ______________________________ Birth date: ______________

Domestic Partner: ___________________________ Date: ______________Printed name: ______________________________ Birth date: ______________

Domestic Partnership Declaration of Tax Status

I, ____________________, (SAP employee) have completed a Declaration of Domestic Partnershipand have sworn that ________________________ is my domestic partner. I understand that SAPAmerica, Inc. has a legitimate need to know the federal income tax status of my relationship. Iunderstand that a domestic partner is considered an Internal Revenue Code Section 152 dependent onlyif each and every one of the following requirements is met:· The domestic partner and I live together (share our principal abode) for the full taxable year, except

for temporary absences for reasons such as vacation, military service or education. In other words,the domestic partner and I must live together from January 1 through December 31.

· The domestic partner is a citizen or resident of the U.S.· The domestic partner receives over half of his or her support from me. The rules for determining

support are complicated and are more involved than just determining who is the “primarybreadwinner.” Attached is a worksheet that the IRS includes in its Publication 17 which I can use todetermine whether I provide more than half of my domestic partner’s support.

Please Note: Even if the above requirements are met, an individual cannot be considered aSection 152 tax dependent if the tax relationship is inconsistent with local law.

Important: It can be complex to determine whether an individual satisfies the definition of a taxdependent under the Internal Revenue Code. You may wish to consult a tax professional foradvice on your personal situation before you declare that your domestic partner (and/or his orher children) is your dependent as defined in Section 152 of the Internal Revenue Code.

Tax Status (Federal)List your domestic partner and each of his or her children that you wish to enroll for benefits and indicate whetheryou declare them to be your tax dependents as defined above.

Name(s) Tax Dependent?Partner: o yes o noChild: o yes o noChild: o yes o noChild: o yes o no

Tax Status (State)Please check if any of the following applies to you:

� California: My partner and I live in and have registered as domestic partners with the State of California� Massachusetts: My spouse and I are of the same sex and we live in and are married under the laws of

Massachusetts� New Jersey: My partner and I live in and have registered as domestic partners with the State of New

Jersey� Oregon: My partner and I are of the same sex and we live in Oregon� Vermont: My partner and I live in and have entered into a Vermont Civil Union

I agree to notify SAP America, Inc. immediately of any change in tax dependency status. I understandthat if I had previously certified my domestic partner and/or his or her children as tax dependents, I may

be liable for taxes due to changing their tax status. I understand that this declaration of responsibilitymay have legal implications under federal and/or state law which are my sole and exclusiveresponsibility.

I understand that this information will be held confidential unless disclosure is required due tosignificant and reasonable business need or as otherwise required by law. I understand that a civil actionmay be brought against me for any losses, including reasonable attorney’s fees, because of a falsestatement contained in this Declaration of Tax Status. I also certify under penalty of perjury that theforegoing is true and correct.

I hereby declare that my domestic partner is my Section 152 dependent.

_________________________________________ SAP Employee Signature_________________________________________ Date

_________________________________________ Domestic Partner Signature_________________________________________ Date

_________________________________________ Employee and Domestic Partner Address

_________________________________________

Excerpt from IRS Publication 17: Your Federal Income Tax for Individuals (Rev. 2001)Table 3-1. Worksheet for Determining Support

Funds Belonging to the Person You Supported1) Total funds belonging to the person you supported, including income received

(taxable and nontaxable) and amounts borrowed during the year, plus the amountin savings and other accounts at the beginning of the year $

2) Amount used for support $3) Amount used for other purposes $4) Amount in savings and other accounts at the end of the year $(The total of lines 2, 3, and 4 should equal line 1) $Expenses for Entire Household (where the person you supported lived)5) Lodging (Complete item a or b) $

a) Rent paid $b) If not rented, show fair rental value of home. If the person you supported

owned the home, include the amount in line 19. $6) Food $7) Utilities (heat, light, water, etc., not included in line 5a or 5b) $8) Repairs (not included in line 5a or 5b) $9) Other. Do not include expenses of maintaining home, such as mortgage interest,

real estate taxes, and insurance. $10) Total household expenses (Add lines 5 through 9) $11) Total number of persons who lived in household $Expenses for the Person You Supported12) Each person’s part of household expenses (line 10 divided by line 11) $13) Clothing $14) Education $15) Medical, dental $16) Travel, recreation $17) Other (specify) $18) Total cost of support for the year (Add lines 12 through 17) $Did You Provide More Than Half?19) Amount the person provided for own support (line 2, plus line 5b if the person you

supported owned the home) $20) Amount others provided for the person’s support. Include amounts provided by

state, local, and other welfare societies or agencies. Do not include any amountsincluded on line 1. $

21) Amount you provided for the person’s support (line 18 minus lines 19 and 20) $22) 50% of line 18 $Is line 21 more than line 22?Yes. You meet the support test for the person. If the other exemption tests are met, you may claim anexemption for the person.No. You do not meet the support test for the person. You cannot claim an exemption for the personunless you can do so under a multiple support agreement. See Multiple Support Agreement in thischapter.

Declaration of Termination of Domestic Partnership

I, __________________ (SAP employee), certify and declare that__________________ (Formerdomestic partner) and I are no longer domestic partners as of __________ (Date) as previously filed onthe Declaration of Domestic Partnership form.

I declare and acknowledge that I wish to cancel the declaration for the following reason:

� The relationship between ________________________ and me ended on ___________. (Name of domestic partner) (Date)

� My domestic partner ______________________ died on ____________________. (Name of domestic partner) (Date)

As a result of this Declaration of Termination of Domestic Partnership I understand that:· Coverage for my former domestic partner and any covered children who do not continue to be

my tax-qualified dependents will end on the last day of the month during which the domesticpartnership is terminated.

· In the event that termination of this relationship is not due to the death of my domestic partnerand we resume our domestic partnership, coverage under the benefit programs will not beavailable again until I complete and satisfy the requirements of the Declaration of DomesticPartnership.

· Another Declaration of Domestic Partnership cannot be filed until another domestic partnermeets all of the requirements of such, as set forth in the Declaration of Domestic Partnership.

· I have been advised to consult an attorney regarding the possibility that filing this Affidavit ofTermination of Domestic Partnership may have certain legal consequences.

I make and file this Declaration of Termination of Domestic Partnership in order to cancel theDeclaration of Domestic Partnership previously filed by me because we no longer meet all of therequirements of a domestic partnership under the SAP health insurance coverage arrangements as setforth in the Declaration of Domestic Partnership. I affirm, under penalty of perjury, that the abovestatements are true and correct.Employee: ___________________________________________ Date: _______________

Printed name: ___________________________________

To also be signed by the former domestic partner in the event that termination of this relationship is notdue to the death of my domestic partner:

Former domestic partner: _______________________________ Date: _______________

Printed name: ___________________________________