Presentation of Management’s Analysis for BASF Aktiengesellschaft and the BASF Group for 2005; presentation of the Report of the Supervisory Board
The Board of Executive Directors and the Supervisory Board propose to pay a dividend of EUR 2.00 per qualifying share from the profit retained by BASF Aktiengesellschaft in 2005 in the amount of EUR 1,288,410,497.55. If the shareholders approve this proposal, a total dividend of EUR 1,018,020,000.00 will be payable on the 509,010,000 qualifying shares as of the date of approval of the Financial Statements for 2005 (February 20, 2006).
The Board of Executive Directors and the Supervisory Board propose that the remaining profit retained of EUR 270,390,497.55 be carried forward and the profit carried forward be increased accordingly if the number of shares qualifying for dividend and the total dividend paid out are further reduced in the event that further shares are bought back up to the date of the Annual Meeting.
The Board of Executive Directors and the Supervisory Board propose that formal approval be given to the actions of the Supervisory Board in 2005.
The Board of Executive Directors and the Supervisory Board propose that formal approval be given to the actions of the Board of Executive Directors in 2005.
The Supervisory Board proposes that KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Frankfurt be appointed auditors of BASF Aktiengesellschaft and the BASF Group for the financial year 2006.
The Board of Executive Directors and the Supervisory Board propose that the following resolution be adopted: The company is authorized to purchase shares of the company in an amount of up to 10 percent of the company ’s share capital. The shares will be purchased at the discretion of the Board of Executive Directors, via the stock exchange or a public purchase offer addressed to all shareholders. The purchase price per share to be paid by the company may not, subject to sentence 5, exceed the highest market price (plus costs and charges) quoted on the floor or electronically on the Frankfurt Stock Exchange on the date of purchase. It must not be less than 75 percent of this highest price. In the event of a public offer to buy back shares, the purchase price offered and paid for each share may exceed the highest market price by up to 10 percent on the third trading day prior to the publication of the share buyback offer.
Subject to sentences 8 and 9, the Board of Executive Directors may only sell shares purchased on the basis of this authorization after a corresponding additional resolution has been adopted at the Annual Meeting by a majority comprising at least three-quarters of the share capital represented at the meeting. Irrespective of this, the Board of Executive Directors is authorized to redeem the shares purchased on the basis of this authorization without the adoption of a further resolution by the Annual Meeting and to reduce the share capital by the part of the share capital accounted for by the redeemed shares.
The Board of Executive Directors is authorized to use, with the approval of the Supervisory Board, shares acquired by virtue of this authorization for the acquisition of companies, parts of companies or holdings in companies in return for the transfer of shares. The subscription right of shareholders is excluded in respect of these company shares if the shares are sold or transferred under the authorizations specified in the preceding sentence 8.
The authorizations to buy back shares and/or to redeem or resell them may be exercised wholly or partially one or more times. The authorizations to buy back company shares and to resell them may also be carried out, at the discretion of the Board of Executive Directors, by companies of the BASF Group or by third parties for the account of the company or Group companies. The authorization to buy back shares will expire on November 3, 2007.
The authorization to buy back company shares granted by the Annual Meeting on April 28, 2005, terminates with the coming into effect of this new authorization as far as the Board of Executive Directors is authorized to purchase shares. The authorizations, granted at the same time, to redeem shares purchased thereunder and to use the shares for acquiring companies, parts of companies or holdings in companies remain valid.
The Board of Executive Directors and the Supervisory Board propose the adoption of the following resolution on the use of derivative financial instruments for the buyback of shares in addition to the authorization to buy back shares proposed under Item 6 of the Agenda above:
The buyback of shares on the basis of the authorization decided by the Annual Meeting on May 4, 2006, under Item 6 of the Agenda may also be effected by using put and call options apart from the acquisition on the stock exchange or by a public acquisition offer. The acquisition price paid by the company for options must not be more than, and the selling price for options received by the company must not be less than, the theoretical market value of the options in question determined by recognized time-adjusted methods, in the determination of which, for example, the agreed strike price must be taken into account. When shares are acquired using put and call options, the acquisition price to be paid by the company corresponds to the strike price agreed in the financial instrument. If, for the buyback of shares, options were used taking into account the preceding sentences 1 to 3, shareholders have no claim, in analogy to Section 186 (3), sentence 4, of the German Stock Corporation Act, to concluding such option transactions with the company.
The Board of Executive Directors and the Supervisory Board propose that the following resolution be adopted:
a) Article 8, paragraph 5, sentence 2, shall be reworded as follows:
"Any member elected by the Annual Meeting can, by a resolution passed by a majority of three-quarters of the votes cast, be removed from office prior to the end of the term for which such member has been elected."
In the notice convening our Annual Meeting on May 4, 2006, which we published in the Electronic German Federal Gazette on March 17, 2006, it is proposed under Sub-item (a) of Item 8 of the Agenda that the wording of Article 8, paragraph 5, sentence 2, be revised.
The Board of Executive Directors and the Supervisory Board have decided that no resolution should be passed on this Sub-item (a) of Item 8 of the Agenda. Therefore, the resolutions under Item 8 of the Agenda are restricted to the amendment of Articles 12 and 16 of the Articles of Association (Sub-items (b) and (c) of Item 8 of the Agenda).
Ludwigshafen am Rhein, April 19, 2006
The Board of Executive Directors
b) Article 12 shall be amended with effect for the first time for the 2006 financial year that began on January 1, 2006, and reworded as follows:
"Remuneration of the Supervisory Board
- Each member of the Supervisory Board shall receive annually
(a) a fixed remuneration of EUR 60, 000 and
(b) a success-oriented variable remuneration for each full EUR 0.01 by which the earnings per share (EPS) of the BASF Group declared in the BASF Group Consolidated Financial Statements for the year for which the remuneration is being paid exceeds the minimum EPS. The minimum EPS for the 2006 financial year shall be EUR 2.50. The success-oriented variable remuneration shall be EUR 400 for each full EUR 0.01 of EPS up to an EPS of EUR 4.00, EUR 300 for each further EUR 0.01 of EPS up to an EPS of EUR 5.00 and EUR 200 for each EUR 0.01 beyond this. The success-oriented variable remuneration shall be limited to a maximum amount of EUR 120,000. The minimum EPS shall increase by EUR 0.10 for each subsequent financial year. This shall apply mutatis mutandis to the threshold values specified in sentence 3. The chairman of the Supervisory Board shall receive twice and a deputy chairman one and a half times the remuneration of an ordinary
- Members of the Supervisory Board who are members of a committee, with the exception of the Mediation Committee formed in accordance with Section 27 (3) of the German Codetermination Act, shall receive a further fixed remuneration for this purpose in the amount of EUR 12, 500. For the Audit Committee, the further fixed remuneration shall be EUR 25,000. The chairman of a committee shall receive twice and a deputy chairman one and half times the further fixed remuneration.
- The Company shall reimburse members of the Supervisory Board for out-of-pocket expenses and value added tax to be paid with regard to their activities as members of the Supervisory Board or of a committee. The Company shall further grant the members of the Supervisory Board a fee of EUR 500 for attending a meeting of the Supervisory Board or one of its committees to which they belong and shall include the performance of the duties of the members of the Supervisory Board in the cover of a consequential loss liability insurance concluded by it.
- Members of the Supervisory Board or of a committee who have been members of the Supervisory Board or the committee for only part of a financial year shall receive one twelfth of the remuneration for each month of their membership that they have begun.
- he remuneration pursuant to paragraphs 1 and 2 shall become due after the end of the Annual Meeting that is presented with the BASF Group Consolidated Financial Statements specified in paragraph 1 or decides on the approval thereof."
c) Article 16, paragraph 2, shall be reworded as follows:
"The chairman of the Meeting may determine a sequence of the items of the agenda different from the sequence announced in the agenda. The chairman shall determine the course of the proceedings at the Annual Meeting, especially the sequence of the speakers as well as the mode, form and sequence of the voting. At the beginning or in the course of the Annual Meeting, the chairman may reasonably restrict, in terms of time, the right of shareholders to put questions and speak for the whole course of the Annual Meeting, for the discussion on individual items of the agenda as well as for individual questions and speeches."