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 23, 2022. The Financial Statements have thus 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/shareholdersmeeting.

The Board of Executive Directors and the Supervisory Board propose to pay a dividend of €3.40 per qualifying share from the profit retained by BASF SE in the 2021 business year in the amount of €3,928,321,339.23. If the shareholders approve this proposal, a total dividend of €3,105,716,345.60 will be payable on the 913,445,984 qualifying shares as of the date the Financial Statements for the financial year 2021 were prepared by the Board of Executive Directors (February 21, 2022).

The Board of Executive Directors and the Supervisory Board propose that the remaining profit retained of €822,604,993.63 be allocated to the retained earnings reserve.

The aforementioned number of qualifying shares takes into account that at the time of the preparation of the Financial Statements the company owned 5,032,710 of its own shares which are not entitled to dividends according to Section 71b of the German Stock Corporation Act. The number of qualifying shares will further decline by the time of the Annual Shareholders’ Meeting as a result of the share buy-back announced on January 4, 2022, and commenced by the company on January 11, 2022. The Board of Executive Directors and Supervisory Board will present to the Annual Shareholders’ Meeting an accordingly adapted proposal for a resolution on appropriation of profit, with an unchanged payout of €3.40 per qualifying share as well as accordingly adjusted figures for the total dividend payout and the allocation to retained earnings.

In accordance with Section 58(4) sentence 2 of the German Stock Corporation Act, claims to dividends are payable on the third business day following the Annual Shareholders’ Meeting, in this case on Wednesday, May 4, 2022.

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 2021 business year.

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 2021 business year.

The Supervisory Board proposes – based on the recommendation of its Audit Committee – that KPMG AG Wirtschaftsprüfungsgesellschaft, Frankfurt/Main, be appointed auditor of the Financial Statements and the Group Consolidated Financial Statements of BASF SE for the 2022 business year.

Following the amendment of the German Stock Corporation Act by the Second Shareholder Rights Directive (ARUG II), the Board of Executive Directors and Supervisory Board are obligated by Section 162 of the German Stock Corporation Act to prepare a Compensation Report which is to be presented to the Annual Shareholders’ Meeting for approval in accordance with Section 120a (4) of the German Stock Corporation Act. The Compensation Report for the 2021 business year and the auditor’s report on the audit of this Compensation Report can be found under III. in this invitation as well as on the company’s website at www.basf.com/compensationreport.

The Board of Executive Directors and the Supervisory Board propose that the Compensation Report for the 2021 business year be approved.

The Supervisory Board members Anke Schäferkordt and Franz Fehrenbach, elected by the Annual Shareholders’ Meeting on May 3, 2019, have announced they will be resigning their Supervisory Board mandates upon the conclusion of the Annual Shareholders’ Meeting 2022. 

Article 10 No. 4 sentence 2 of the Statutes stipulates that if a member of the Supervisory Board departs the Board, an election to appoint a substitute should be held at the next Annual Shareholders’ Meeting following the departure. In accordance with Article 10 No. 4 sentence 1 of the Statutes, the election is being held for the remainder of the term of the departing members, meaning until the conclusion of the Annual Shareholders’ Meeting in 2024.

In accordance with Article 40(2) and (3) of Regulation (EC) No. 2157/2001 of the Council of October 8, 2001, on the Statute for a European Company, Section 17 of the SE Implementation Act, Section 21(3) of the SE Participation Act and Article 10 No. 1 sentence 1 of the Statutes, the Supervisory Board is composed of twelve members. Six of the twelve members are elected by the Annual Shareholders’ Meeting. The other six members are elected by the employees in accordance with Article 10 No. 1 sentence 5 of the Statutes in combination with the provisions of the Agreement Concerning the Involvement of Employees in BASF SE of November 15, 2007 (SE Agreement), as amended by the Supplementary Agreement dated November 25, 2015.

Pursuant to Section 17(2) sentence 1 of the SE Implementation Act, the Supervisory Board must consist of at least 30 percent women and at least 30 percent men. The minimum quota is to be fulfilled by the Supervisory Board as a whole unless the shareholder or the employee side objects to joint compliance. The shareholder representative side objected to joint compliance. Consequently, the minimum quota must be fulfilled separately by the shareholder side and the employee side, which must each have at least two women and at least two men. The current composition of the Supervisory Board fulfills this minimum quota as the shareholder side and the employee side each comprise two women and four men.

Based on the recommendation of the Nomination Committee, the Supervisory Board nominates

a) Alessandra Genco, Rome, Italy
Chief Financial Officer, Leonardo SpA

b) Prof. Dr. Stefan Asenkerschbaumer, Stuttgart, Germany
Chairman of the Supervisory Board of Robert Bosch GmbH and Managing Partner of Robert Bosch Industrietreuhand KG

for election to the Supervisory Board as shareholder representatives, effective upon conclusion of the Annual Shareholders’ Meeting on April 29, 2022. If the proposed candidates are elected, the legal minimum quota for women and men would continue to be fulfilled on the shareholder side. The Annual Shareholders’ Meeting is not bound to these proposals for election. Taking into account the proposed candidates, the Nomination Committee is of the view that the Supervisory Board as a whole fulfills the principles for the composition of the Supervisory Board as adopted by the Supervisory Board, including the competence profile, and diversity concept. The principles for the composition of the Supervisory Board as well as its competence profile and diversity concept are published in the Corporate Governance Report 2021, which is accessible online as part of the BASF Report 2021 at www.basf.com/report.

According to the assessment of the Supervisory Board, both candidates are considered to be independent. Neither of the proposed candidates has business or personal relationships with BASF SE or one of its Group companies, the governing bodies of BASF SE or any significant shareholder in BASF SE, which would constitute a conflict of interest.

It is intended to have the Annual Shareholders’ Meeting vote separately on the nominations (individual election).

The profiles of the proposed candidates for the election, information about their mandates in supervisory boards and comparable supervisory bodies as well as other information are available here.

The Annual Shareholders’ Meeting last authorized the Board of Executive Directors to buy back shares in 2017. This authorization expires on May 11, 2022. Therefore, the possibility of buying back shares should be renewed 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 the Supervisory Board propose that the following resolution be adopted:

a) The Board of Executive Directors is authorized to buy back shares up to April 28, 2027, 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 acquired shares in combination with other shares the company previously acquired and still holds or shares attributable to the company in accordance with Sections 71a et seq. of the German Stock Corporation Act may at no point exceed 10 percent of the share capital.

The shares are to 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, (iii) via a public request to the shareholders to submit sales offers or (iv) by other means in accordance with Section 53a of the German Stock Corporation Act ((ii) and (iii) hereinafter referred to as “public acquisition 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 acquisition offer, the company can stipulate a fixed purchase price or a purchase price range per share (excluding incidental purchase costs) within which it is willing to buy back shares. In the public acquisition 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 range during the period in the event of significant price changes. In the case of a purchase price range, 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 purchase offer, the purchase price offered per BASF share (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 public announcement.

In the event that shareholders are publicly requested to submit sales offers, 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 publication of the public request to submit sales offers.

The particular details of the individual purchase, especially a public acquisition offer, shall be determined by the Board of Executive Directors. If the number of shares tendered by the shareholders in the case of a public acquisition 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. 

If, following the publication of a public purchase offer, the trading price deviates significantly from the offered purchase and/or sale price or from the upper and lower limits of any purchase price range, the offer can be adjusted. In this case, the closing price in Xetra trading (or a comparable successor system at the Frankfurt Stock Exchange) on the third trading day prior to the public announcement of the adjustment shall be relevant. In this case, the purchase price limitation of 10 percent higher or lower will apply to this closing price.

b) The Board of Executive Directors is authorized to sell or transfer company shares purchased on the basis of the above authorization

i. via the stock exchange,

ii. through an offer addressed to all shareholders,

iii. with the approval of the Supervisory Board, to third parties by means other than via the stock exchange or through an offer addressed to all shareholders 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

iv. 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 (including the increase of existing holdings) or in connection with corporate mergers.

In the cases specified under iii. and iv., the shareholders’ subscription right is excluded. The Board of Executive Directors may only make use of the authorization under iii. 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 at the time the authorization is exercised.

c) 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.

d) The authorizations to buy back shares and to resell and redeem them according to Sections 1 to 3 may each 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 issue convertible bonds and bonds with warrants granted under Item 7 by the Annual Shareholders’ Meeting of May 12, 2017, expires on May 11, 2022.

The Board of Executive Directors shall once again be authorized with a sufficient scope to issue convertible bonds and bonds with warrants, Conditional Capital 2022 should be created and the existing authorization, which was not utilized, shall be cancelled.

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

i. Bonds with warrants and convertible bonds

The Board of Executive Directors is authorized, with the approval of the Supervisory Board, up until April 28, 2027, 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 a combination 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 or impose 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.

ii. Warrant and conversion rights

When bonds with warrants are issued, one or more warrants will be attached to each individual 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. The conversion ratio can be rounded up or down to a whole number; moreover, a provision may be made for an additional cash payment. Furthermore, it can be stipulated that fractional shares are to be combined and/or compensated in cash. The terms and conditions of the Debt Instruments can stipulate a fixed or variable conversion ratio.

The pro rata amount of the share capital of the BASF shares to be subscribed per Debt Instrument may not exceed the nominal value of the Debt Instruments.

iii. 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.

iv. 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.

v. 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 request to submit subscription offers. If the subscription right of the shareholders is not excluded, the calculation can instead be based on the trading price on the stock exchange trading days during the subscription period (with the exception of the days during the subscription period which are necessary to announce the conversion/option price in a timely manner in accordance with Section 186(2) of the German Stock Corporation Act). In the event of the substitution right and the conversion obligation, the conversion or option price can be at least either 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) on at least three trading days before the determination of the conversion/option price in accordance with the bond terms and conditions, 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. 

vi. 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 share 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. 

vii. 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.

viii. 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 consent of the Supervisory Board, to exclude the statutory subscription right of the shareholders in the following cases:

a. 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 or granted on the basis of the Debt Instruments issued under this authorization with the exclusion of the subscription right 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,

b. insofar as it is necessary for fractional amounts resulting from the subscription ratio,

c. insofar as it is necessary to grant the Holders of previously issued Debt Instruments with conversion or option rights and/or obligations a subscription right with respect to BASF shares in the scope to which they would have been entitled to it as shareholders following the exercise of these rights and/or fulfillment of these obligations,

d. 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 in aggregate a calculated portion of 20 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 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) Cancellation of Conditional Capital 2017

The Conditional Capital 2017 approved under Agenda Item 7 by the Annual Shareholders’ Meeting of May 12, 2017 and regulated by Article 5 No. 9 of the Statutes in the amount of €117,565,184 shall be cancelled.

c) Creation of Conditional Capital 2022

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 2022”). 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 April 29, 2022, in effect until April 28, 2027, 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 April 28, 2027 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 Debt Instruments 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.

d) Amendment to the Statutes

Article 5 No. 9 of the Statutes shall be amended as follows:

“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 April 28, 2027, under the authorization granted to the Board of Executive Directors by the Annual Shareholders’ Meeting of April 29, 2022, 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 2022”). The 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.”

e) 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 2022 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 2022 has not been used or used fully after the expiration of all conversion or exercise periods.