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Agenda

Presentation of Management’s Analysis of BASF Aktiengesellschaft and of the BASF Group for 2006; Presentation of the Report of the Supervisory Board

The Board of Executive Directors and the Supervisory Board propose to pay a dividend of € 3.00 per qualifying share from the profit retained in 2006 by BASF Aktiengesellschaft in the amount of € 2,225,141,391.67. If the shareholders approve this proposal, a total dividend of € 1,495,005,000.00 will be payable on the 498,335,000 qualifying shares as of the date of approval of the Financial Statements for 2006 (February 20, 2007).

The Board of Executive Directors and the Supervisory Board propose that the remaining profit retained of € 730,136,391.67 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 2006.

The Supervisory Board and the Board of Executive Directors propose that formal approval be given to the actions of the Board of Executive Directors in 2006.

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 2007.

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 October 25, 2008.

The authorization to buy back company shares granted by the Annual Meeting on May 4, 2006, 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 that the following resolution be adopted, although according to Section 124 (3), Sentence 1, of the German Stock Corporation Act, only the Supervisory Board submits the proposal for the appointment of the auditor for the first financial year of the future BASF SE (Section 8 of the Conversion Plan) and the proposal for the appointment of members of the first Supervisory Board of the future BASF SE (Paragraph 10, Section 2, of the Articles of Association of the future BASF SE, which are attached to the Conversion Plan proposed for adoption as Annex I):

The Conversion Plan of February 27, 2007 (Document of Notary Public Ludwig Draxel-Fischer, Doc. Reg. No. 494/2007) concerning the conversion of BASF Aktiengesellschaft into a European Company (Societas Europaea, SE) be adopted and the Articles of Association of BASF SE that are attached to the Conversion Plan as Annex I be approved.

The Conversion Plan and the Articles of Association of BASF SE are worded as follows:

CONVERSION PLAN

for the conversion with a change of the legal form of

BASF Aktiengesellschaft, Ludwigshafen am Rhein, Germany
- hereinafter also referred to as "BASF AG" -

into the

legal form of a Societas Europaea (SE)
- hereinafter also referred to as "BASF SE" -

Preamble

BASF AG is a stock corporation (Aktiengesellschaft) under German law with its registered office and head office in Ludwigshafen am Rhein, Germany. It is registered in the commercial register of the local court in Ludwigshafen am Rhein under the entry number HRB 3000. Its business address is Carl-Bosch-Straße 38, 67056 Ludwigshafen, Germany. BASF AG is the largest operating company with in BASF Group ("BASF Group") and holds, directly or indirectly, the shares in the companies belonging to BASF Group.

As of today, the subscribed capital of BASF AG amounts to Euro 1,282,790,400.00 and is divided into 501,090,000 no-par value shares. The proportionate amount per share of the subscribed capital of BASF AG is Euro 2.56 per share. Pursuant to Section 3 No. 3 of the articles of association of BASF AG, the shares are made out to the bearer.

It is intended to convert BASF AG into a European Company (Societas Europaea, SE) pursuant to Art. 2 para. 4 in connection with Art. 37 of Council Regulation (EC) No. 2157/2001 of October 8, 2001, on the Statute for a European company (SE) ("SE Regulation"). The legal form of an SE is the only supranational legal form based on European law currently available to a listed company with its registered office in Germany.

The change of the legal form from a stock corporation into a European Company demonstrates also externally the self-conception of BASF as a company with a European and global orientation. Furthermore, the legal form of a European Company presents an opportunity to further develop the corporate governance structure of BASF AG and to continue to optimize the work of the corporate bodies of the company. The opportunity to reduce the size of the supervisory board makes an important contribution in this regard. The supervisory board will continue to be composed on a parity basis so that half of its members will be employee representatives. However, subject to an agreement to this effect in the course of the involvement of employees, these representatives will not be exclusively appointed by the employee representatives of BASF Group in Germany and the German labour unions, but with the involvement of the employee representatives and labour unions from other member states of the European Union ("EU") or, respectively, a signatory state to the European Economic Area ("EEA").

The registered office and the head office of the company will continue to be situated in Germany. The board of executive directors of BASF AG therefore prepares the following conversion plan:

Section 1
Conversion of BASF AG into BASF SE

BASF AG is being converted into a European Company (Societas Europaea, SE) pursuant to Art. 2 para. 4 in connection with Art. 37 SE Regulation.

For more than two years BASF AG has had a large number of subsidiaries which are governed by the laws of other member states of the EU, amongst others BASF Nederland B.V. with its registered office in Arnhem, the Netherlands, which was established by BASF AG on November 2, 1954, and which is registered in the commercial register (Handelsregister van de Kamers van Koophandel voor Centraal Gelderland). The requirements for the conversion of BASF AG into BASF SE pursuant to Art. 2 para. 4 SE Regulation are thereby fulfilled.

The conversion of BASF AG into an SE does neither lead to a liquidation of the company nor to the formation of a new legal entity. The interests of the shareholders in the Company continue to exist unchanged because of the preservation of the identity of the legal entity.

Section 2
Effectiveness of the conversion

The conversion becomes effective upon the registration in the commercial register.

Section 3

Company name, registered office, subscribed capital and statutes of BASF SE

3.1

The company name of the SE is "BASF SE".

3.2

The registered office of BASF SE is located at Ludwigshafen am Rhein, Germany; this is also the place of its head office.

3.3

The entire subscribed capital of BASF AG in the amount existing at the point in time of the registration of the conversion in the commercial register (current amount: Euro 1,282,790,400.00) and as divided into no-par value shares made out to the bearer (current number of shares: 501,090,000) becomes the subscribed capital of BASF SE. The persons and companies who are shareholders of BASF AG at the point in time of the registration of the conversion in the commercial register become shareholders of BASF SE to the same extent and with the same number of shares in the subscribed capital of BASF SE corresponding to their participation in the subscribed capital of BASF AG immediately prior to the conversion becoming effective. The arithmetic portion of each no-par value share in the subscribed capital (currently Euro 2.56) is maintained in exactly the way it existed immediately prior to the conversion becoming effective.

3.4

BASF SE shall have the statutes enclosed as an Annex. It constitutes an integral part of this conversion plan. In this regard, at the point in time of the effectiveness of the conversion of BASF AG into an SE the following applies:

(i) the amount of the subscribed capital of BASF SE with its division into no-par value shares as stipulated in Section 5 Nos. 1 and 2 of the statutes of BASF SE corresponds to the amount of the subscribed capital of BASF AG with its division into no-par value shares (Section 3 Nos. 1 and 2 of the articles of association of BASF AG) and

(ii) the amount of the authorized capital pursuant to Section 5 No. 8 of the statutes of BASF SE corresponds to the amount of the authorized capital still available pursuant to Section 3 No. 7 of the articles of association of BASF AG.

The conditional capitals provided for in the articles of association of BASF AG in Section 3 Nos. 8 to 11 have become irrelevant or the underlying claims have become subject to the statute of limitations, respectively. Therefore, they are not included in the statutes of BASF SE.

In view of this, the supervisory board of BASF SE is authorized and instructed to make any amendments to the wording of the enclosed statutes of BASF SE which relate to the amounts or the division of the capitals and which result from the aforementioned before the registration of the conversion in the commercial register of BASF AG.

3.5

Shareholders who object to the conversion are not being offered a cash compensation, since this is not provided for by statutory law.

Section 4
Board of executive directors

Notwithstanding the statutory competences of the supervisory board of BASF SE, it is to be assumed that the current acting members of the board of executive directors of BASF AG will be appointed as members of the board of executive directors of BASF SE. The current members of the board of executive directors of BASF AG are Dr. Jürgen Hambrecht (Chairman), Eggert Voscherau (Vice Chairman), Dr. Kurt Bock, Dr. Martin Brudermüller, Dr. John Feldmann, Dr. Andreas Kreimeyer, Klaus Peter Löbbe, Dr. Stefan Marcinowski and Peter Oakley.

Section 5
Supervisory board

5.1

Pursuant to Section 10 No. 1 of the statutes of BASF SE (cf. the Annex), BASF SE is to have a super visory board which, in deviation from the current situation at BASF AG, comprises twelve instead of twenty members. Of the twelve members, six members are appointed upon proposals of the employees. The proposals of the employees are binding on the general meeting. If an agreement regarding the participation of the employees concluded in accordance with the Act on the Participation of Employees in a European Company (SE-Beteiligungsgesetz - "SEBG") stipulates a different appointment procedure for the employee representatives on the supervisory board, the employee representatives will not be appointed by the general meeting, but in accordance with the agreed appointment procedure.

5.2

The terms of office of the shareholder representatives as well as the terms of office of the employee representatives on the supervisory board of BASF AG terminate upon the effectiveness of the conversion.

Of the shareholder representatives on the supervisory board of BASF AG, the following members are to be appointed as members of the supervisory board of BASF SE (see Section 10 No. 2 of the statutes of BASF SE which are enclosed to this conversion plan as an Annex):

  • Prof. Dr. François N. Diederich, Zurich/Switzerland
    Professor at the Swiss Federal Institute of Technology Zurich (Eidgenössische Technische Hochschule Zürich)

  • Michael Diekmann, Munich
    Chairman of the management board of Allianz SE

  • Dr. Tessen von Heydebreck, Frankfurt am Main
    Member of the board of management of Deutsche Bank AG

  • Max Dietrich Kley, Heidelberg
    Attorney at law

  • Prof. Dr. Jürgen Strube, Mannheim
    Chairman of the supervisory board of BASF Aktiengesellschaft

Furthermore, as shareholder representative on the supervisory board of BASF SE shall be appointed:

  • Franz Fehrenbach, Stuttgart
    Chairman of the board of management of Robert Bosch GmbH

Section 6
Information on the procedure for arrangements for employee involvement

6.1

In order to safeguard the rights to participate in entrepreneurial decisions acquired by the employees of BASF AG, in the course of the conversion into an SE a procedure for the involvement of the employees at BASF SE is to be conducted. The objective is the conclusion of an agreement regarding the involvement of employees in the SE, i. e., in particular, regarding the participation of the employees in the supervisory board of BASF SE and the procedure for the information and consultation of employees either by establishment of an SE works council or in another way to be agreed upon with the board of executive directors of BASF AG.

The procedure for the involvement of employees is characterised by the principle of protecting the acquired rights of the employees of BASF AG. The extent of the involvement of the employees in the SE is determined by Section 2 para. 8 SEBG which, essentially, follows Art. 2 lit. h) of Council Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European company with regard to the involvement of employees. Involvement of employees is the collective term for any mechanism, including, in particular, information, consultation and participation, through which employees’ representatives may exercise an influence on decisions to be taken within the company. Information in this context means the informing of the SE works council or other employees’ representatives by the management of the SE on questions which concern the SE itself and any of its subsidiaries or establishments situated in another member state or which exceed the powers of the decision-making organs in a single member state. Consultation means, in addition to employees’ representatives expressing an opinion on matters relevant for the decision-making process, the exchange of views between employees’ representatives and management and a dialogue with the objective of reaching agreement, however, with the company management remaining free in its decision. The most far-reaching influence is being conferred by participation; pursuant to Section 2 para. 12 SEBG the term either refers to the right to appoint or elect members of the supervisory organ or, alternatively, to recommend such members for appointment or to reject such recommendations made by a third party.

6.2

As parent company of BASF Group, BASF AG currently has a supervisory board with twenty members which is composed on a parity basis in accordance with the German Co-Determination Act 1976 (Mitbestimmungsgesetz - "MitBestG 1976"). With regard to the ten employee representatives on the supervisory board of BASF AG, presently only the employees of the group companies employed in Germany have the active and passive voting right in accordance with the MitbestG 1976. The provisions of the MitBestG 1976 regarding the representation of employees on the supervisory board of BASF AG are being replaced by the stipulations of the SEBG. (With regard to the other consequences of the change of the legal form for the employees and their representative bodies see Section 7 below.) Upon the effectiveness of the conversion of BASF AG into an SE, the terms of office of the employee representatives as well as the terms of office of the shareholder representatives on the supervisory board of BASF AG terminate (see Section 5 above). The shareholder representatives on the new supervisory board of BASF SE are already appointed in the statutes of BASF SE. The employee representatives on the first supervisory board of BASF SE will be appointed after the completion of the procedure for the involvement of employees. It is to be expected that the appointment of the first employee representatives will be made by the local court of Ludwigshafen am Rhein (court of registration) as the competent court for BASF SE, unless the agreement regarding the participation of the employees stipulates a different appointment procedure.

In addition to the supervisory board of BASF AG, there are additional bodies at the level of its group companies in which the employees have participation rights.

In the companies of BASF Group in the EU and the EEA there are bodies representing employees in accordance with legal requirements under applicable national laws. The works council structure of BASF AG follows a two-tier system with the works council in the Ludwigshafen plant and the joint works council. Currently, the joint works council comprises 42 representatives of the German companies within BASF Group. 13 companies delegate two representatives each and 16 companies delegate one representative each to this body.

At the European level, the employee representative bodies are organized within the BASF Euro Dialog, a voluntary agreement on cross-national information and consultation pursuant to Section 41 para. 1 of the European Works Councils Act (Europäische Betriebsrätegesetz - "EBRG").

6.3

The initiation of the procedure for the involvement of the employees is conducted in accordance with the provisions of the SEBG. The latter requires that the management body of the participating company, i. e. the board of executive directors of BASF AG, notifies the employees or their representative bodies involved, respectively, about the conversion project and requests them to establish a Special Negotiating Body. The procedure is to be initiated unrequested and without undue delay after the board of executive directors of BASF AG has published the conversion plan prepared by it. The publication is made by virtue of the filing of the conversion plan recorded by a notary public with the competent commercial register in Ludwigshafen am Rhein. The notification of the employees or their representative bodies, respectively, includes, in particular, (i) the names and structure of BASF AG, concerned subsidiaries and concerned establishments, and their distribution among the member states; (ii) the bodies representing employees existing within these companies and establishments; (iii) the number of persons employed in these companies and establishments, and the total number of persons employed in a given member state determined on the basis thereof, and (iv) the number of employees enjoying participation rights in the corporate bodies of these companies.

6.4

It is provided by statutory law that within a period of ten weeks after the notification of the employees or, respectively, their representative bodies described in Section 6.3 the employees or their representative bodies, respectively, elect or appoint the members of the Special Negotiating Body, which is composed of employee representatives from all member states of the EU and from all signatory states of the EEA involved.

It is the task of this Special Negotiating Body to negotiate with the management of the company the procedural details of the involvement procedure and the determination of the participation right of the employees within the SE.

The establishment and composition of the Special Negotiating Body are, in principle, subject to German law (Sections 4 to 7 SEBG). The allocation of the seats in the Special Negotiating Body to the individual member states of the EU and the signatory states to the EEA in which BASF Group has employees is governed, in respect of the formation of an SE with its registered office in Germany, by Section 5 para. 1 SEBG: The allocation of the seats follows the following basic principles:

Each member state of the EU and signatory state to the EEA in which BASF Group has employees is allocated at least one seat. The number of seats allocated to a member state of the EU or a signatory state to the EEA is increased by 1 in each case where the number of employees employed in this member state of the EU or signatory state to the EEA exceeds the thresholds of 10 %, 20 %, 30 % etc. of all employees of BASF Group within the EU or of the EEA, respectively. The relevant point in time for the determination of the allocation of seats is, in principle, the time of the notification of the employees or the respective employee representative bodies (cf. Section 4 para. 4 SEBG).

On the basis of the employee figures of BASF Group in the individual member states of the EU and the signatory states to the EEA as of December 31, 2006, the following allocation of seats applies:

With regard to the election or appointment, respectively, of the members of the Special Negotiating Body from the individual EU member states and EEA signatory states the relevant national provisions of law apply. Thus, a variety of procedures are being applied, such as the election by direct vote, appointment by labour unions or, as is the case under German law, the election by an election body (cf. Section 8 SEBG); in the case of BASF AG, this body is the joint works council. The election or, respectively, appointment of the members as well as the establishment of the Special Negotiating Body is, in principle, the responsibility of the employ ees and their representative bodies involved and of the relevant unions, respectively.

6.5

At the earliest after the determination of all members of the Special Negotiating Body, but no later than 10 weeks after the notification pursuant to Section 4 para. 2 and para. 3 SEBG (cf. Sections 12 para. 1, 11 para. 1 SEBG), the board of executive directors of BASF AG has to issue, without undue delay, the invitations for the constituent meeting of the Special Negotiating Body. On the day of the constituent meeting, the procedure for the establishing of the Special Negotiating Body ends and the negotiations begin for which a duration of up to six months is provided for under statutory law. This period may be extended to a period of up to one year by mutual consent of the parties to the negotiation. The negotiation procedure takes place also if the period for the election or appointment of individual or all members of the Special Negotiating Body is exceeded for reasons within the responsibility of the employees (Section 11 para. 2 sentence 1 SEBG).

Members who are being elected or appointed during the course of the negotiations are not finally excluded; they may, at any time, participate in the negotiation procedure (Section 11 para. 2 sentence 2 SEBG). However, a member joining the ongoing negotiations has to accept the current status of the negotiations at that time. There is no claim for an extension of the six-months negotiation period (Section 20 SEBG).

The objective of the negotiations is the conclusion of an agreement regarding the involvement of employees in BASF SE. The subject matter of the negotiations is the participation of the employees in the supervisory board of BASF SE and the determination of the procedure for the information and consultation of employees either by establishment of an SE works council or in another way.

6.6

As required by Art. 40 para. 3 SE Regulation, Section 17 para. 1 SE Implementation Act (SE-Ausführungsgesetz - "SEAG"), the statutes have to stipulate the number of members of the supervisory board or the rules for the determination of such number. Section 10 No. 1 of the statutes of BASF SE stipulates that the future supervisory board shall comprise twelve members. In this regard, it is mandatory that the principle of composition on a parity basis be maintained (cf. Sections 15 para. 5, 16 para. 3 SEBG). Accordingly, the statutes of BASF SE provide that six of the members of the supervisory board are to be appointed upon the proposal of the employees.

Art. 12 para. 4 SE Regulation stipulates that the statutes of the SE may not, at any time, contradict a negotiated agreement. Therefore, if necessary, the statutes have to be amended by resolution of the general meeting of BASF AG in case that a deviating stipulation regarding the participation of the employees is laid down in an agreement on the involvement of employees in the future BASF SE. The conversion of BASF AG into an SE would only become effective after the registration of the alteration of the statutes in the commercial register of the company.

No resolution may be adopted which results in a reduction of employee participation rights (cf. Section 15 para. 5 SEBG). Equally, no resolution may be adopted to the effect that no negotiations should be entered into or that negotiations already entered into should be broken off (cf. Section 16 para. 3 SEBG). In the event that such agreement regarding employee involvement is not concluded, employee participation is governed by the subsidiary regulation by operation of law which is explained in Section 6.9 below.

6.7

Furthermore, in the agreement between the executive board of directors and the Special Negotiating Body a procedure is to be stipulated for the purpose of the information and consultation of the employees in the SE. This may be achieved by establishing an SE works council or by another procedure stipulated by the parties to the negotiations which facilitates the information and consultation of the employ ees of BASF SE. In the case of the establishment of an SE works council, the following has to be stipulated: the scope of application, the number of its members and the allocation of seats, the functions and the procedure for its information and consultation, the frequency of meetings, the financial and material resources to be made available, the date of entry into force and the duration of the agreement as well as the circumstances in which the agreement is to be renegotiated and the procedure to be used in this regard. Instead of establishing an SE works council, another procedure may also be stipulated which facilitates the information and consultation of the employees.

Further, it is to be stipulated in the agreement that negotiations concerning the involvement of employees in the SE shall also be opened prior to structural changes to the SE.

6.8

The conclusion of an agreement between the management of the company and the Special Negotiating Body regarding the involvement of employees requires a resolution adopted by the Special Negotiating Body. The resolution is to be adopted by a majority of the appointed members, provided that this majority also represents a majority of the represented employees. No resolution may be adopted which results in a reduction of employee participation rights (cf. Section 15 para. 5 SEBG). It is also not permissible to refrain from entering into or to abandon negotiations (cf. Section 16 para. 3 SEBG).

6.9

If no agreement regarding the involvement of employees is being reached within the negotiation period, a subsidiary regulation by operation of law applies; the latter may also be agreed upon from the outset as the content of the agreement.

In the event that the subsidiary regulation by operation of law applies, it is mandatory that with regard to employee participation the principle of participation on a parity basis, which is already applied at BASF AG, is continued also in respect of the supervisory board of BASF SE, with the consequence that half of the members of the supervisory board of BASF SE would be employee representatives. However, in contrast to the current situation regarding the employee representatives on the supervisory board of BASF AG, these representatives would no longer be exclusively appointed by the employees in Germany, but by all employees in the member states of the EU and the signatory states to the EEA to which seats on the supervisory board have been allocated pursuant to Section 36 para. 1 SEBG. The employees would have to appoint, in accordance with the respective provisions applicable in these countries their employee representatives who are to be elected by the general meeting of BASF SE. If no appointment were made, the SE works council would have to make it.

On the basis of the current number of employees and their distribution by countries, in accordance with Section 36 para. 1 SEBG on the supervisory board composed of twelve members on a parity basis there would be five seats for the employees from Germany and one seat for employees of BASF SE from Belgium, with that latter seat to be allocated at the expense of the employees from Germany. This follows from Section 36 para. 1 sentence 3 SEBG, according to which in the event that in the course of the proportionate allocation the employees of one or more member states are not allocated a seat the last seat to be allocated is to be allocated to one of the so far non-represented member states. It follows from the rationale of Section 5 para. 3 SEBG that the seat to be allocated is to be allocated to that member state which has the largest number of employees among the non-represented member states.

With regard to the protection of the right to information and consultation of the employees of BASF SE, the subsidiary regulation by operation of law would have the consequence that an SE works council would have to be established, the function of which would be to safeguard the right to information and consultation of the employees in the SE. The council would be responsible for matters which affect the SE itself, one of its subsidiaries or one of its establishments in another member state or which go beyond the powers of the competent bodies at the level of the individual member states. The SE works council would have to be notified and consulted annually with regard to the development of the business situation and the future prospects of the SE. It would have to be notified and consulted with regard to extraordinary circumstances. The composition of the SE works council as well as the election of its members would be determined, in principle, in accordance with the provisions applicable to the composition and appointment of the members of the Special Negotiating Body.

6.10

In case the subsidiary regulation by operation of law applies, it is to be reviewed every two years during the existence of the SE by the management of the SE whether changes within the SE, its subsidiaries or its establishments require an alteration of the composition of the SE works council. Besides, in case the subsidiary regulation by operation of law applies, four years after its establishment the SE works council has to resolve with the majority of its members whether negotiations shall be reopened with regard to an agreement for the involvement of employees within the SE or whether the existing regulations are to remain in place. If a resolution is adopted to enter into negotiations for an agreement regarding the involvement of employees, for the purpose of these negotiations the SE works council replaces the Special Negotiating Body.

6.11

The necessary costs arising from the establishment and operation of the Special Negotiating Body will be borne by BASF AG and, after the conversion, by BASF SE. The obligation to bear the costs includes the material and personal expenses incurred in connection with the activities of the Special Negotiating Body, including the negotiations. In particular, premises, material resources (e. g. telephone, telefax, required literature), interpreters and clerical staff required for meetings are to be provided and the travel and subsistence expenses of the members of the Special Negotiating Body are to be met.

Section 7
Other consequences of the conversion for the employees and their representative bodies

7.1

The employment contracts of the employees of BASF AG as well as the employment contracts of the employees of BASF Group with the respective Group companies are not affected by the conversion. Equally, with the exception of the procedure for the involvement of employees described in Section 6, the conversion of BASF AG into an SE does not have any consequences for the employees of BASF Group with regard to the participation rights of the employees of BASF AG and of the companies of BASF Group.

7.2

Further, there are no other measures intended or planned as a consequence of the conversion which would affect the situation of the employees.

Section 8
Auditor

KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, is appointed as auditor for the first financial year of BASF SE.

Section 9
No Additional Rights or Special Rights

9.1

To persons in terms of Section 194 para. 1 No. 5 of the German Transformation Act (Umwandlungsgesetz) and/or Art. 20 para. 1 lit. f) SE Regulation no rights will be granted in addition to the shares referred to in Section 3.3 and special arrangements are not provided for with regard to these persons.

9.2

To persons in terms of Art. 20 para. 1 lit. g) SE Regulation no special rights will be granted within the scope of the conversion.

Last Update March 17, 2006