Global
Investors

Agenda

The Supervisory Board approved the Financial Statements prepared by the Board of Executive Directors and the Consolidated Financial Statements of the BASF Group on February 22, 2017. Thus the Annual Financial Statements have been adopted according to Section 172 of the German Stock Corporation Act. Therefore, according to the statutory provisions, no resolution by the Annual Shareholders’ Meeting is planned for Item 1 of the Agenda. The documents specified above have been published on our website and can be accessed at www.basf.com/generalmeeting.

The Board of Executive Directors and the Supervisory Board propose to pay a dividend of €3.00 per qualifying share from the profit retained by BASF SE in the financial year 2016 in the amount of €2,808,567,295.65. If the shareholders approve this proposal, a total dividend of €2,755,436,082.00 will be payable on the 918,478,694 qualifying shares as of the date of adoption of the Financial Statements for the financial year 2016 (February 22, 2017).

The Board of Executive Directors and the Supervisory Board propose that the remaining profit retained of €53,131,213.65 be allocated to the retained earnings reserve.

In accordance with Section 58(4) of the German Stock Corporation Act in the version applicable as of January 1, 2017, claims to dividends are payable on the third day following the Annual Shareholders’ Meeting, in this case May 17, 2017.

The Board of Executive Directors and the Supervisory Board propose that formal approval be given to the actions of the members of the Supervisory Board of BASF SE for the financial year 2016.

The Supervisory Board and the Board of Executive Directors propose that formal approval be given to the actions of the members of the Board of Executive Directors of BASF SE for the financial year 2016.

The Supervisory Board proposes – based on the recommendation of its Audit Committee – that KPMG AG Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, be appointed auditor of the Financial Statements and the Group Consolidated Financial Statements of BASF SE for the financial year 2017.

The Annual Shareholders’ Meeting last authorized the Board of Executive Directors to buy back shares in 2012. This authorization expires on April 26, 2017. The possibility of buying back shares should once again be given in order to be able to further optimize the Company’s capital structure, return capital to the shareholders, and further increase earnings per share in the interests of shareholders.

The Board of Executive Directors and Supervisory Board propose that the following resolution be adopted:

1. The Board of Executive Directors is authorized to buy back Company shares up to May 11, 2022 in an amount of up to 10 percent of the Company’s share capital at the time that the resolution was passed, or – in the event this amount is lower – of the share capital at the time that the authorization is exercised.

The shares will be bought back at the discretion of the Board of Executive Directors (i) via the stock exchange, (ii) via a public purchase offer addressed to all shareholders, or (iii) via a public request to the shareholders to submit sales offers ((ii) and (iii) hereinafter referred to as “public purchase offer”).

If the purchase is effected on the stock exchange, the purchase price per share paid by the Company (excluding incidental purchase costs) may not be more than 10 percent higher or lower than the price of a BASF share determined on the trading day by the opening auction in Xetra trading (or a comparable successor system at the Frankfurt Stock Exchange).

In the event of a public purchase offer, the Company can stipulate a fixed purchase price or a purchase price spread per share (excluding incidental purchase costs) within which it is willing to buy back shares. In the public purchase offer, the Company can specify a period for accepting or submitting the offer and the possibility of, and the conditions for, adjusting the purchase price spread during the period in the event of significant price changes. In the case of a purchase price spread, the purchase price will be determined using the sales prices specified in the shareholders’ acceptance or submission declarations and the buy-back volume fixed by the Board of Executive Directors after the end of the offer period.

In the event of a public offer by the Company to buy back shares, the purchase price offered or a purchase price spread per BASF share may not be more than 10 percent higher or lower than the average closing price of a BASF share in Xetra trading (or a comparable successor system at the Frankfurt Stock Exchange) on the last three trading days prior to the day of the official announcement. In the event of an adjustment of the purchase price spread by the Company, the last three trading days before the public announcement of the adjustment will be decisive.

If shareholders are called on to submit offers for sale, the purchase price per BASF share determined on the basis of the submitted offers (excluding incidental purchase costs) may not be more than 10 percent higher or lower than the average closing price of a BASF share in Xetra trading (or a comparable successor system at the Frankfurt Stock Exchange) on the last three trading days prior to the day of the official announcement. In the event of an adjustment of the purchase price spread by the Company, the last three trading days before the public announcement of the adjustment will be decisive.

If the number of shares tendered by the shareholders in the case of a public purchase offer exceeds the purchase volume planned by the Company or fixed after the end of the offer period, the Company can exclude the shareholders’ right to tender (a) for a preferential consideration of tenders with a low number of up to 100 shares per shareholder and (b) for an acquisition of shares in the ratio of the tendered shares.

2. The Board of Executive Directors is authorized to sell or transfer Company shares purchased on the basis of the above authorization

a) via the stock exchange,
b) through an offer addressed to all shareholders,
c) with the approval of the Supervisory Board, to third parties in return for cash payment at a price that is not significantly lower than the stock exchange price of a BASF share at the time of the sale, or
d) with the approval of the Supervisory Board, to third parties in return for non-cash benefits, particularly in connection with the acquisition of companies, parts of companies or participations in companies or in connection with corporate mergers.

In the cases specified under c) and d), the shareholders’ subscription right is excluded. The Board of Executive Directors may only make use of the authorization under c) in such a way that the sum of the Company’s own shares sold under exclusion of the subscription right according to Section 186(3) Sentence 4 of the German Stock Corporation Act and the shares issued during the term of this authorization from authorized capital with the exclusion of the subscription right according to Section 186(3) Sentence 4 of the German Stock Corporation Act in return for cash does not as a whole exceed 10 percent of the share capital at the time this authorization comes into force or – in the event this amount is lower – of the share capital at the time that the authorization is exercised.

3. The Board of Executive Directors is authorized to redeem the shares bought back by virtue of the authorization without a further resolution of the Annual Shareholders’ Meeting and to reduce the share capital by the proportion of the share capital accounted for by the redeemed shares. The Board of Executive Directors can also redeem the shares by a simplified process without reducing the share capital so that the proportion of the other shares in relation to the share capital is increased through the redemption. In the event that the shares are redeemed by the simplified process without any reduction of the share capital, the Board of Executive Directors is authorized to adjust the number of shares in the Statutes.

4. The authorizations to buy back shares and to resell and redeem them according to Nos. 1 to 3 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 Board of Executive Directors shall be authorized to issue convertible bonds and bonds with warrants. Simultaneously, conditional capital shall be created to grant shares to service the rights arising from the future issuance of these convertible bonds and bonds with warrants.

The Board of Executive Directors and Supervisory Board propose that the following resolutions be adopted:

a) Authorization to issue convertible bonds and bonds with warrants and to exclude shareholders’ subscription rights

aa) Bonds with warrants and convertible bonds

The Board of Executive Directors is authorized, with the approval of the Supervisory Board, up until May 11, 2022, on a one-off basis or in portions on more than one occasion to issue bearer or registered convertible bonds and/or bonds with warrants or combinations of these instruments (collectively “Debt Instruments”) with or without maturity limitations with a total nominal value of up to €10,000,000,000 and to grant holders and/or creditors (“Holders”) of these Debt Instruments conversion or option rights (also with conversion obligations) for up to 91,847,800 registered shares in the Company (“BASF shares”) with a pro rata amount of share capital of up to €117,565,184 subject to the respective terms and conditions of the Debt Instruments. The Debt Instruments can be issued in exchange for contributions in cash, but also for contributions in kind, particularly shareholdings in other companies.

As well as being issued in euros, the Debt Instruments may also be issued in the legal currency of an OECD country, subject to the euro-equivalent limit. They can also be issued by a dependent Group company in accordance with Section 18 German Stock Corporation Act (“Subsidiary”). In this case, the Board of Executive Directors is authorized, with the approval of the Supervisory Board, on behalf of the Company to take over the unconditional guarantee for the Debt Instruments of the Subsidiary, to grant option or conversion rights or obligations with respect to BASF shares to the Holders of these Debt Instruments, and to make any necessary declarations and take any necessary actions for a successful issuance.

bb) Warrant and conversion rights

When bonds with warrants are issued, one or more warrants will be attached to each bond entitling or obliging the holder to subscribe to BASF shares subject to the terms and conditions of the warrants as determined by the Board of Executive Directors. The relevant warrants may be detachable from the respective bonds. The terms and conditions of the warrants may provide that the option price can also be settled by transferring bonds (trade-in) and potentially with an additional cash payment. The subscription ratio is obtained by dividing the nominal amount or the lower issue price of a convertible bond by the respective conversion price stipulated for one BASF share; a provision may be made for an additional cash payment. If fractions of BASF shares arise, provisions may be made that these fractional shares can be added together resulting in the subscription of whole BASF shares in accordance with the warrant terms and conditions (possibly against an additional payment).

In the case of issuance of convertible bonds, the Holders of the convertible bonds have the right and/or the obligation to convert these into BASF shares in accordance with the terms and conditions of the convertible bonds as stipulated by the Board of Executive Directors. The conversion ratio is obtained by dividing the nominal amount or the lower issue price of a convertible bond by the respective conversion price stipulated for one BASF share; a provision may be made for an additional cash payment. Furthermore, it may also be specified that fractional shares are to be combined and/or compensated in cash.

The pro rata amount of the share capital represented by the BASF shares to be subscribed for each Debt Instrument must not exceed the nominal amount or the lower issue price of the Debt Instrument.

cc) Conversion obligation

The terms and conditions of the convertible bonds may stipulate a conversion obligation upon maturity of the bond (or at an earlier date or upon a specific event). The pro rata amount of the share capital of the BASF shares to be issued at conversion may not exceed the nominal value of the convertible bonds. Under the terms and conditions of the convertible bonds, the Company may be entitled to fully or partially compensate in cash any difference between the nominal value of the convertible bond and the product of the conversion price and the conversion ratio. Section 9(1) of the German Stock Corporation Act and Section 199(2) of the German Stock Corporation Act shall remain unaffected.

dd) Right to substitute

The bond terms of the convertible bonds and/or bonds with warrants may contain a provision entitling the Company to grant BASF shares to Holders of the bond in lieu of the cash payment due (or parts thereof).

The bond terms and conditions of convertible bonds and/or bonds with warrants may also provide that in the event of a conversion or the exercise of an option, the Company has the right, instead of granting BASF shares, to pay the cash equivalent of the BASF shares that would otherwise be delivered, calculated as the volume-weighted average price of BASF shares on the Xetra trading system (or a comparable successor system at the Frankfurt Stock Exchange) on ten trading days during a period stipulated in the bond terms and conditions.

The terms and conditions of the Debt Instruments may also provide that Debt Instruments with option rights or conversion rights or obligations may, at the Company’s discretion, be converted into existing BASF shares rather than new BASF shares from conditional capital, or that the option rights can be settled by the delivery of such BASF shares. The terms and conditions of each Debt Instrument may also provide for a combination of these forms of settlement.

ee) Option and conversion price

The conversion or option price to be determined may not be below 80 percent of the price of BASF shares in Xetra trading (or a comparable successor system at the Frankfurt Stock Exchange). The calculation shall be based on the volume-weighted average price of the BASF share over the ten trading days prior to the final decision by the Board of Executive Directors on the submission of an offer for the subscription of Debt Instruments or on the Company’s notice of acceptance following a public solicitation to submit subscription offers. In the event that subscription rights are traded, the relevant dates are the dates on which the subscription rights are traded with the exception of the last two days of subscription rights trading. In the event of the substitution right and the conversion obligation, the conversion or option price can in accordance with the more detailed bond terms and conditions be either at least the abovementioned minimum price or the volume-weighted average price of the BASF shares on the Xetra trading system (or a comparable successor system at the Frankfurt Stock Exchange) during the ten trading days before or after the date the Debt Instruments mature, even if this average share price is below the abovementioned minimum price (80 percent). Section 9(1) of the German Stock Corporation Act and Section 199(2) of the German Stock Corporation Act shall remain unaffected.

ff) Dilution protection

The authorization shall also include the option, subject to the terms and conditions of the respective bonds and/or warrants, to provide dilution protection or other adjustments in certain circumstances. Dilution protection or other adjustments may be provided for in particular if the Company changes its capital structure during the term of the bonds and/or warrants (e.g., through a capital increase, a capital decrease or a stock split), but also in connection with dividend payments, the issuance of additional convertible bonds or bonds with warrants, transformation measures, and in the case of other events affecting the value of the options or conversion rights that may occur during the term of the bonds and/or warrants (e.g., acquisition of control by a third party). Dilution protection and/or other adjustments may be provided in particular by granting subscription rights, by changing the conversion or option price, or by amending or introducing cash components. Section 9(1) of the German Stock Corporation Act and Section 199(2) of the German Stock Corporation Act shall remain unaffected.

gg) Terms and conditions of the Debt Instruments

The Board of Executive Directors is authorized to stipulate the further terms and conditions of the bonds and/or warrants with the approval of the Supervisory Board, or to establish such terms and conditions by mutual agreement with the corporate bodies of the respective issuing Subsidiary, in particular: issue currency, interest rate, issue price, maturity and denomination, dilution protection terms, conversion and/or option price, and conversion and/or option period.

hh) Subscription right

If shareholders are not offered a direct subscription of the Debt Instruments, they are granted the statutory subscription right in such a way that the Debt Instruments are taken over by a credit institute, a consortium of credit institutes or companies in accordance with Section 186(5) Sentence 1 of the German Stock Corporation Act, with the obligation that the Debt Instruments are offered to shareholders for subscription (indirect subscription right). If the Debt Instruments are issued by a Subsidiary, the Company must ensure that the statutory subscription right of its shareholders is upheld under the terms of the previous sentence.

However, the Board of Executive Directors is authorized, with the approval of the Supervisory Board, to exclude the statutory subscription right of the shareholders

  • provided that the Debt Instruments are issued in exchange for cash payment and, in the dutiful estimation of the Board of Executive Directors, the issue price of a Debt Instrument is not significantly lower than its theoretical fair value calculated using recognized mathematical valuation methods. The calculated portion of the share capital represented by the BASF shares to be issued in connection with the Debt Instruments issued under this authorization must not exceed 10 percent of the share capital, either at the time when such authorization takes effect or – in the event this amount is lower – at the time this authorization is exercised. BASF shares that are sold during the term of this authorization until the date it is utilized with the exclusion of the subscription right according to Section 71(1) No. 8 Sentence 5 in combination with Section 186(3) Sentence 4 of the German Stock Corporation Act must be credited against the restriction of a maximum of 10 percent of the share capital. Those BASF shares that are issued during the term of this authorization until the date it is utilized from authorized capital with the exclusion of the subscription right according to Section 203(2) Sentence 1 in combination with Section 186(3) Sentence 4 of the German Stock Corporation Act must also be credited against the restriction of 10 percent of the share capital,
  • insofar as it is necessary for fractional amounts resulting from the subscription ratio,
  • insofar as it is necessary to grant the Holders of previously issued Debt Instruments with conversion or option rights and/or obligations subscription rights with respect to BASF shares in the scope to which they would have been entitled as shareholders following the exercise of these rights and/or fulfillment of these obligations, and
  • if the Debt Instruments are issued in exchange for contributions or benefits in kind, especially in the context of mergers or for the (also indirect) acquisition of companies, operations, parts of companies, participations or other assets, or entitlements to purchase assets including receivables against the Company or its Subsidiaries.

Under this authorization, Debt Instruments may only be issued in exchange for cash or in-kind considerations with the exclusion of subscription rights if the total of the new BASF shares to be issued on the basis of such Debt Instruments does not exceed a calculated portion of 20 percent of the share capital, either at the time when this authorization takes effect or – in the event this amount is lower – at the time this authorization is utilized. The Company’s shares that were issued during the term of this authorization based on other capital measures with the exclusion of shareholders’ subscription rights shall be credited against this maximum amount of 20 percent. This includes in particular shares issued or granted from authorized capital or in connection with a Debt Instrument issued during the term of this authorization on the basis of the utilization of another authorization with the exclusion of the subscription right.

b) Creation of conditional capital

The share capital shall be increased conditionally by up to €117,565,184 by issuing a maximum of 91,847,800 new registered BASF shares (“Conditional Capital 2017”). The purpose of the conditional capital increase is to grant shares to Holders of convertible bonds or warrants attached to bonds with warrants issued by the Company or a Subsidiary based on the authorization granted to the Board of Executive Directors by the Annual Shareholders’ Meeting of May 12, 2017 in effect until May 11, 2022, in accordance with the applicable terms and conditions of the Debt Instruments.

The conditional capital increase shall only be carried out to the extent to which Holders of convertible bonds or warrants attached to bonds with warrants issued until May 11, 2022 under the authorization of the Board of Executive Directors pursuant to a) above by the Company or one of its Subsidiaries exercise their conversion or option rights and/or fulfill their conversion or option obligations, and provided that no other forms of fulfillment of delivery are used. The new BASF shares shall be issued at the conversion or option prices determined in each case in the terms and conditions of the bonds and/or the warrants in accordance with the abovementioned authorization. The new BASF shares issued under this provision shall participate in profits from the beginning of the financial year in which they are issued.

The Board of Executive Directors is authorized, with the approval of the Supervisory Board, to determine the further details of the implementation of the conditional capital increase.

c) Changes to the Statutes

Article 5 of the Statutes is to be supplemented by the following new No. 9:

„9. The share capital is increased conditionally by up to €117,565,184 by issuing a maximum of 91,847,800 new shares. The conditional capital increase shall only be carried out to the extent to which holders of convertible bonds or warrants attached to bonds with warrants issued by the Company or one of its subsidiaries up to May 11, 2022 under the authorization granted to the Board of Executive Directors by the Annual Shareholders’ Meeting of May 12, 2017 exercise their conversion or option rights, or – if they have conversion or exercise obligations – to the extent they fulfill their obligations to convert or exercise options, and provided that no other forms of fulfillment of delivery are used. The new shares shall be issued at the conversion or option prices determined in each case in the terms and conditions of the debt instruments and/or the warrants in accordance with the abovementioned authorization (“Conditional Capital 2017”). The shares issued under this authorization shall participate in profits from the beginning of the financial year in which they are issued. The Board of Executive Directors is authorized, with the approval of the Supervisory Board, to determine the further details of the implementation of the conditional capital increase.”

d) Authorization to amend the Statutes

The Supervisory Board is authorized to amend Article 5 No. 9 of the Statutes to reflect any use of Conditional Capital 2017 as well as to make all other related amendments to the Statutes which only affect the wording. The same shall apply in the event that the authorization to issue convertible bonds and/or bonds with warrants has not been used upon expiration of the effective term of the authorization and in the event that the Conditional Capital 2017 has not been used or used fully after the expiration of all conversion or exercise periods.

The provisions adopted by resolution of the Annual Shareholders’ Meeting of May 4, 2006 in Article 14 of the Company’s Statutes on the compensation of the Supervisory Board currently stipulate that an ordinary member receives annual fixed compensation of €60,000 and performance-related variable compensation dependent on the earnings per share (EPS) of the financial year. The performance-related variable compensation is limited to a maximum of €120,000. In line with the recent development of the Supervisory Board compensation structures at large publicly traded companies in Germany, the compensation of the Supervisory Board shall be restructured to a purely fixed compensation and after more than ten years adjusted appropriately. The fixed compensation shall also be supplemented with a share purchase and shareholding component and the attendance fee shall be eliminated.

The Board of Executive Directors and Supervisory Board propose that the following resolutions be adopted:

Article 14 of the Statutes (Remuneration of the Supervisory Board) shall be amended, taking effect for the first time for the financial year starting January 1, 2017, and revised as follows:

“Article 14 Compensation of the Supervisory Board

1. Each member of the Supervisory Board shall receive annually a fixed compensation of €200,000.

The Chairman of the Supervisory Board receives two-and-a-half times and a deputy chairman one-and-a-half times the compensation of an ordinary member.

2. Members of the Supervisory Board who are members of a committee – with the exception of the Nomination Committee – shall receive a further compensation for this purpose in the amount of €12,500. For members of the Audit Committee, the further compensation shall be €50,000. The chairman of a committee shall receive twice and a deputy chairman one-and-half times the further compensation.

3. Each member of the Supervisory Board is obligated to use 25 percent of the compensation paid in accordance with No. 1 for the acquisition of Company shares and to hold these shares for the duration of his/her membership on the Supervisory Board. This obligation does not apply to the portion of the compensation that the Supervisory Board member pays to a third party pro rata for the fixed compensation received in accordance with No. 1 due to an obligation entered into before his/her appointment to the Supervisory Board. The obligation to purchase and hold shares in this case applies to 25 percent of the portion of the compensation remaining after the payment has been made. The Company shall withhold the abovementioned portion of the compensation and arrange for the acquisition of the shares on behalf of the members of the Supervisory Board on the first day of stock market trading after the compensation is payable. The acquired shares shall be deposited into a custody account in the name of the Supervisory Board member at a commercial bank in Germany which is used exclusively to deposit and manage these shares. The portion of the compensation which is mathematically insufficient to acquire whole shares shall be paid out to the Supervisory Board member. Evidence of compliance with the holding obligation must be provided to the Company. The purchase obligation specified in Sentence 1 does not apply to the compensation that has not yet been paid at the time of departure from the Supervisory Board.

4. The entitlement to the component of the compensation specified in No. 3 Sentence 1 shall retroactively cease to apply if the Supervisory Board member partially or fully divests or pledges the acquired shares prior to leaving the Supervisory Board.

5. The Company shall reimburse the 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 include the performance of the duties of the members of the Supervisory Board in the coverage of a directors’ and officers’ loss liability insurance concluded by it.

6. Supervisory Board members or members of a committee, who served on the Supervisory Board or the committee for only part of a financial year, shall receive one twelfth of the compensation for each month or part of a month of service.

7. The compensation pursuant to Nos. 1 and 2 shall become due after the conclusion of the Annual Shareholders’ Meeting to which the consolidated financial statements for the financial year for which the compensation is paid are submitted or which decides on the approval thereof.”

Last Update March 31, 2016