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BASF Aktiengesellschaft
67056 Ludwigshafen
Germany
BASF
BASF Stock
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Option
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Program 2001
Program 2001
BASF
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Dear Executives,
Our stock option program has been very well received, both internally and
externally over the past two years, as shown by participation rates well in
excess of 75% and by the large number of favorable opinions expressed by
shareholders' representatives, analysts and trade journalists.
The continuously changing competitive environment, both at national and
international levels, and feedback from capital markets have led us to further
develop the program while retaining its proven basic structures.
I would like to draw your attention in particular to the change to the Dow Xxxxx
Global Chemicals Total Return Index as the reference index. This changeover to a
worldwide index for the chemicals sector is a clear indication that we see
ourselves as one of the "world's leading companies in the chemical industry"
also within the context of our stock option program.
I am convinced that you will also find the program attractive because of the
other changes, such as the extension to eight years and the more flexible
arrangement with regard to the personal investment, and that, consequently, the
participation rate will be high again.
By participating, you will give expression to your identification with BASF and
your confidence in its long-term success.
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
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Program and Option Conditions
Overview of the BASF Stock Option Program (BOP) 2001..........................5
Right to participate..........................................................6
Program structure.............................................................6
Personal investment...........................................................7
Basic price...................................................................7
BOP custody account/BOP current account.......................................7
Undertaking/holding period/BOP 2001 shares....................................7
Use of shares already held....................................................8
Acquisition of additional shares..............................................8
Issue of option rights/start of the program...................................8
Details of option rights......................................................8
Subscription Right A/absolute threshold/closing price.........................9
Subscription Right B/relative threshold/outperformance........................9
Duration of option rights....................................................10
Vesting (waiting) period.....................................................10
Exercising/exercise order....................................................11
Closed periods...............................................................11
Extended exercise periods (exercise windows).................................12
Determination of the purchase price..........................................13
Purchase with payment........................................................14
Purchase without payment (Cashless Operation)................................14
Upper limits on exercise gain................................................15
Dividend entitlement.........................................................16
Tax - Germany................................................................16
Tax - outside Germany........................................................16
Transferability..............................................................16
Information on the internet and from the depository bank.....................17
Settlement...................................................................17
Change of Control............................................................17
Termination of the employment relationship...................................18
Retirement...................................................................18
Death........................................................................18
Risks........................................................................18
Limiting conditions..........................................................18
Annual Shareholders' Meeting 2001............................................19
Steps leading to participation in 2001.......................................19
Translation..................................................................20
Terms of depository bank.....................................................20
Authority to operate a current/custody account...............................21
Applications for capital gains exemption from 2002 - Germany only............21
Contacts.....................................................................21
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Overview of the BASF Stock Option Program (BOP) 2001
BASF is offering qualifying executives of the BASF Group worldwide the right to
acquire option rights which, if defined thresholds are met, will permit the
holder to purchase BASF shares at a preferential price. The number of option
rights granted to each participant will depend on their personal investment in
BASF shares. The required number of shares will be calculated on the basis of a
percentage, as specified by the participant (between 10% and 30%), of the
participant's gross variable compensation and the basic BASF share price at the
start of the program. Unlike BOP 1999 and 2000, the personal investment
requirement may be fulfilled not only by the purchase of additional BASF shares
but also by the designation of shares already held by the participant. The
shares comprising the personal investment must be held by the participant for at
least two years from the start of the program. The participant will receive four
option rights for each share of the investment.
Each option right consists of two subscription rights, which may be exercised if
defined thresholds are met. Subscription Right A permits the purchase of a share
at the basic price if the price of the BASF share has increased by more than 30%
in comparison to the basic price. Subscription Right B permits the purchase of a
share if the BASF share outperforms the Dow Xxxxx Global Chemicals Total Return
Index. The BOP, therefore, takes into account both the absolute and the relative
performance of the BASF share.
Option rights may not be exercised until at least two years have elapsed since
the start of the program and may not be exercised after eight years have
elapsed. Option rights may not be exercised during certain closed periods within
this overall exercise period.
The exercise gain to the participant resulting from the purchase of shares at
preferential rates is limited to a maximum of ten times their personal
investment.
This brochure contains full details of the program and option conditions and
also explains the technical details of participation and information on banking
arrangements.
Page 5
This document is an English-language translation
of the principal provisions of the BASF Stock
Option Program (BOP) 2001. In the event of any
discrepancy, the German-language document setting
forth the actual terms and conditions of the BOP
2001 will be binding. The BOP coordinator named in
the participation authorization letter will be
pleased to answer any questions. This brochure
contains the program and option conditions of the
BOP 2001 and comprehensively explains its
operation.
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Right to The right to participate is being granted to
participate approximately 1,200 executives of the BASF Group,
who will be identified by means of predetermined
criteria and individually informed of their
entitlement by letter. In addition to meeting the
general entitlement requirements, each participant
must be actively employed by BASF on the day after
the Annual Shareholders' Meeting of BASF
Aktiengesellschaft held in 2001 (start of the
program), without any notice of termination of
employment having been issued by that date.
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Program structure BASF will offer participants option rights that
will entitle them to purchase BASF shares at a
preferential price if certain performance targets
are met. For option rights to be granted, it is
necessary for the participant to hold the number
of BASF shares that corresponds to their personal
investment and to confirm that they will be
retained for a period of at least two years
following the start of the program (see "Personal
investment" below in this regard).
Program structure
1. Number of personally invested shares
[Graphic omitted]
2. Processing
[Graphic omitted]
Page 6
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Personal The number of option rights granted to each
investment participant will depend on the level of their
personal investment, in the form of BASF shares.
The maximum investment will be determined on the
basis of their gross variable compensation. Each
participant may designate between 10% and 30% of
this remuneration as the amount of the personal
investment. The number of BOP shares will be
determined from the amount selected by the
participant and the basic price. The participant
must give a written "Undertaking" on the number of
shares held (see "Undertaking" below). BASF will
grant four option rights for each such share.
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Basic price The number of BOP shares required to be held as
personal investment will depend on the amount of
gross variable compensation designated by the
participant and the price of a BASF share defined
as the volume-weighted average, commercially
rounded to two decimal places, quoted in the
electronic trading system of Deutsche Borse AG
(Xetra) or a successor system on the day after the
Annual Shareholders' Meeting of BASF
Aktiengesellschaft held in 2001 (basic price).
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BOP custody A personal securities account (BOP custody
account/ account) and a linked current account (BOP current
BOP current account) must be opened with the depository bank
account before participating in the BOP for the first
time. Deutsche Bank AG, Private Banking,
Ludwigshafen, Germany, is the depository bank for
all BOP participants throughout the Group.
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Undertaking/ Each eligible will be informed in May 2001 of the
holding period/ number of shares (min./max.) they are entitled to
BOP 2001 shares introduce into the program. Those eligibles
wishing to participate must use the "Undertaking"
form to confirm to their program coordinator, by
June 30, 2001, at the latest, that they personally
own the designated number of shares at that
cut-off date and that they will hold those shares
for at least two years following the start of the
program, i.e. up to April 27, 2003 (holding
period). This Undertaking will qualify the
corresponding shares for underlying options (BOP
2001 shares). The BOP shares may be held at any
financial institution chosen by the participant.
Proof that the specified number of shares are
actually held must be supplied to the BOP
coordinator on request in an appropriate form
(e.g. a custody account statement or bank
confirmation).
Page 7
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Use of shares Any BASF shares already held by a participant at
already held the start of the program may be declared as BOP
2001 shares, except shares acquired for
participation in BOP 2000, because the two-year
holding period for these shares will not end until
after the Annual Shareholders' Meeting in 2002.
Please note:
The shares acquired for participation in BOP 1999
can be used for BOP 2001, because their two-year
holding period expires with the start of the 2001
program. The 1999 BOP program conditions have been
amended accordingly.
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Acquisition of If a participant commits, in the Undertaking, to
additional shares maintain ownership of a number of shares in excess
of their current holding, the participant must
personally arrange to acquire the required number
of additional shares by June 30, 2001, at the
latest. It is not necessary to inform the
coordinator to this effect; solely the commitment
in the Undertaking is decisive for the grant of
option rights.
Please note:
Deviating from previous years, no proportion of
variable compensation will be deducted from the
salary and transferred for the acquisition of BOP
shares to the depository bank, since participants
will make their own arrangements to acquire
shares.
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Issue of option rights/ BASF will issue four option rights to the
start of the program participant for each BOP 2001 share confirmed in
the Undertaking. The option rights will be issued
with effect from the start of the program and then
entered in the BOP custody account with the
depository bank. They cannot be transferred to a
different custody account.
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Details of option Each option right, in turn, consists of two parts,
rights Subscription Right A and Subscription Right B,
and, if defined thresholds are met, each
subscription right allows the purchase of one BASF
share on preferential terms. Thus, for each BOP
share, up to eight BASF shares can be purchased on
preferential terms when the options are exercised.
Page 8
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Subscription Right A/ After waiting period and exercise period
absolute threshold/ requirements have been satisfied, the share from
closing price Subscription Right A may be purchased when the
closing price of the BASF shares quoted in the
electronic trading system of Deutsche Borse AG
(Xetra) or in a successor system (closing price)
is more than 30% higher than the basic price.
The purchase price for this share corresponds to
the closing price on the date when the option
right is exercised, minus a discount. The discount
corresponds to the increase in price between the
date of issue and the date of exercise of the
option right.
Subscription Right A (absolute threshold)
Sample calculation (Euro)
BASF basic price on option right grant date 50.--
Closing price on exercise date 70.--
---------
Absolute increase in price 20.--(+40%)
-->Absolute threshold of 30% reached
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Closing price on exercise date 70.--
Discount (increase in price) 20.--
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Purchase price per BASF share for participant 50.--
Exercise gain per Subscription Right A for participant 20.--
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Subscription Right B/ After waiting period and exercise period
relative threshold/ requirements have been satisfied, the share from
outperformance Subscription Right B may be purchased when the
cumulative performance of the BASF share exceeds
the percentage increase in the Dow Xxxxx Global
Chemicals Total Return Index (DJ Chemicals). The
cumulative performance includes both the change in
price and the value of cash dividends and capital
changes between the date on which the option
rights are issued and the date on which they are
exercised. DJ Chemicals, which includes BASF,
measures the performance of about 140 enterprises
within the chemicals sector worldwide.
The purchase price for this share corresponds to
the closing price on the date when the option
right is exercised, minus a discount. The discount
Page 9
is equal to double the percentage by which the
BASF share outperforms DJ Chemicals on the
exercise date, based on the basic price.
The outperformance is defined as the difference
between the cumulative performance of the BASF
share between the grant date and the exercise date
of the option right and the performance of DJ
Chemicals between the grant date and the trading
day preceding the exercise date.
Subscription Right B (relative threshold)
Sample calculation (Euro)
Closing price on option right grant date 50.--
Closing price on exercise date 70.--
----------------
Increase in price 20.--
Cumulative cash dividend (reinvested) 10.--
----------------
Performance of BASF share 30.-- -->> 60%
Performance of DJ Chemicals 30%
------
Outperformance of DJ Chemicals by BASF share 30%
------------------------------------------------------------------------
Closing price on exercise date 70.--
Discount (2 x 30% x 50.--) 30.--
------------------------------------------------------------------------
Purchase price per BASF share for participant 40.--
Exercise gain per Subscription Right B for participant 30.--
------------------------------------------------------------------------
Outperforming DJ Chemicals is a demanding target,
which entails surpassing our worldwide
competitors. This is why each percentage point is
doubled in the discount. Using relative
performance to measure the success of a company
has the particular advantage of making it possible
for the options to be exercised even if there is a
decrease in price in absolute terms, as long as
the drop in value of the BASF share is not as
great as that of the index.
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Duration of The term of option rights begins at the start of
option rights the program and terminates at the end of the
fifteenth calendar day following the eighth Annual
Shareholders' Meeting after the start of the
program.
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Vesting (waiting) The option rights may only be exercised for the
period first time after completion of a vesting (waiting)
period. This waiting period commences when option
rights are issued and ends at the end of the day
of the second Annual Shareholders' Meeting after
the start of the program.
Page 10
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Exercising/ Each individual option right may only be exercised
exercise order in its entirety (Subscription Rights A and B), on
condition that at least one of the two thresholds
has been met. If only one threshold has been met
on the exercise date, the subscription right
linked to meeting the other threshold will lapse.
Exercising is only possible with a minimum of 50
option rights, or the entire amount remaining. The
participant must notify the depository bank if
they wish to exercise, and the bank will, in turn,
inform BASF.
Exercise scenarios for Subscription Right A (absolute threshold)
Personal investment 5,000.-- and basic price 50.--
--> 100 shares --> 400 options
[GRAPHIC OMITTED]
The exercise order becomes effective upon receipt
by the depository bank. The exercise order obliges
the participant to pay the purchase price for the
stocks to be issued. Participants will receive
detailed information about the formalities to be
complied with when the options are exercised, in
good time before the end of the two-year waiting
period.
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Closed Periods It is not possible to exercise the option rights
within certain periods (closed periods) after the
end of the waiting period. Closed periods are
periods of at least four weeks preceding the date
of publication of the annual statement and the
quarterly and half-yearly reports and of six weeks
preceding the Annual Shareholders' Meeting. The
two weeks preceding the end of each financial year
also constitute a closed period. The periods for
each calendar year are published well in advance
and can also be obtained via the Internet at
xxx.xxxxxxxx-xxxx.xx/xxxx. The purpose of the
closed periods is primarily to reduce potential
conflicts with insider
Page 11
trading legislation. They cannot, of course,
provide impregnable protection. Participants must
use their own discretion before exercising option
rights to decide whether they hold insider
information that precludes the acquisition of
shares at the time in question.
Example:
Exercise periods and closed periods
[GRAPHIC omitted]
Please note:
Other closed periods may be specified at short
notice in individual cases in advance of other
important publication dates.
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Extended exercise Each time the absolute threshold is crossed, an
periods exercise window of one month is opened, during
(exercise windows) which it is possible to exercise the option right
even if the absolute threshold is no longer
exceeded by the time the option is exercised. The
extended exercise window provides compensation for
the fact that the options cannot be exercised
during closed periods even if the absolute
threshold has been met.
As at other times, the purchase price is
determined on the basis of the closing price and
possibly the outperformance at the time when the
option is exercised (see "Determination of the
purchase price", page 13 with regard to this).
Page 12
No exercise window is opened if only the relative
threshold is crossed, since the purchase price,
when the option is exercised, will be greater than
the closing price if the relative threshold is
then crossed in the other direction.
Extended exercise periods
[GRAPHIC OMITTED]
Please note:
The closed periods always have priority over
exercise windows, i.e., they may shorten them.
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Determination of The BASF share closing price and the
the purchase price outperformance at the time of the exercise
determine the purchase price.
If the depository bank is notified of an exercise
order before noon (Central European Time/Summer
Time) of a German Stock Exchange trading day, the
exercise operation will be treated in the same way
as one occurring at the end of the previous
trading day, i.e. the closing price and
outperformance (see pages 9, 10 with regard to
this) will be used as a basis for determining the
purchase price. This arrangement has the advantage
for participants of permitting them to learn the
purchase price (e.g. via the Internet) and then
decide whether to exercise their option rights or
not. Exercise orders received after noon by the
depository bank will be carried out at the closing
price and the outperformance of the current
trading day.
Page 13
Determination of the purchase price
[GRAPHIC OMITTED]
Please note:
Shares purchased in connection with option rights
are sold, as usual, at the closing price on the
actual date of sale.
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Purchase with The shares can be purchased in return for payment
payment of the relevant purchase price. Participants
wishing to purchase shares must ensure that there
are sufficient funds in their BOP current
accounts. The BASF shares to be allocated to the
participants after the exercise of option rights
are issued to them after payment of the applicable
purchase price and then transferred to the custody
accounts designated by participants in their
exercise orders. If a participant fails to
designate a custody account, the shares will be
entered in the BOP custody account with the
depository bank.
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Purchase without Instead of purchasing shares by paying the
payment purchase price, participants may also opt for the
(Cashless Operation) allocation of shares without an additional
payment. In such a case, they must only pay the
nominal amount for accounting purposes applicable
to each share purchased.
The number of shares credited to the participant's
account is determined in this case by dividing the
exercise gain from the subscription rights by the
closing price (minus the nominal amount for
accounting purposes) at the time the option is
exercised (Cashless Operation). The depository
bank will debit the nominal amount for accounting
purposes from the
Page 14
participant's BOP current account. The participant
must ensure that sufficient funds are available.
After payment of the nominal amount for accounting
purposes, the shares will be transferred to the
custody accounts designated by participants in
their exercise orders. If a participant fails to
designate a custody account, the shares will be
entered in the BOP custody account with the
depository bank.
Purchase without payment (Cashless Operation)
Sample calculation (Euro)
Subscription Right A discount (see page 9) 20.--
Subscription Right B discount (see page 10) 30.--
------------------------------------------------------------------------
Exercise gain per option right 50.--
x 50 share options
------------------------------------------------------------------------
Total exercise gain 2,500.-- (50 x 50)
divided by (closing price less nominal amount) 67.44 (70 - 2,56)
------------------------------------------------------------------------
Number of shares to be purchased 37 (2,500 divided
by 67.44)
The excess amount of 4.72 (2,500 - (37 x 67.44)) is credited to the
participant's BOP current account. The total nominal amount for
accounting purposes of 94.72 (37 x 2.56) is debited from the account.
Please note:
Depending on the country concerned, taxes may also
be payable on the exercise gain, regardless of the
purchasing option chosen.
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Upper limits on The maximum possible exercise gain (gross) is
exercise gain equal to ten times the original personal
investment, converted into BOP shares, determined
at the start of the program. For this purpose, the
total discounts (exercise gain) granted for one
option right may not exceed 250% of the basic
price.
In the case of the share from Subscription Right
A, the exercise gain may not exceed 100% of the
basic price.
In the case of the share from Subscription Right
B, the exercise gain may not be greater than the
closing price on the date of exercise of the
option right less the nominal amount applicable to
the share. The purchase price may not be less than
the proportion of the capital stock accounted for
by each share purchased (nominal amount for
accounting purposes). The nominal amount for
accounting purposes applicable to BASF shares is
Euro 2.56 (as of February 2001).
Page 15
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Dividend Shares purchased on the basis of option rights
entitlement under this program will be entitled to the
dividend payouts decided at the Annual
Shareholders' Meetings following the purchase.
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Tax - Germany Just granting option rights creating an
opportunity to purchase BASF shares at a
preferential price does not constitute a pecuniary
benefit for income tax purposes in Germany. A
taxable pecuniary benefit does not arise until the
option is exercised, and it is then equal to the
exercise gain minus income-related expenses. This
benefit is subject to income tax, which must be
retained and passed on by the employer to the tax
authorities.
The Tax Reduction Law of 2000 introduced the
"half-income method" (Halbeinkunfteverfahren).
Only half the capital resulting from the sale of
shares will be subject to tax from 2002. If shares
acquired through the exercise of options are
resold within one year, a speculative capital gain
equal to half the difference between the market
value at the time when the option is exercised and
the selling price is subject to income tax. After
expiry of the one-year speculation period,
purchased shares may be resold tax exempt (as of
February 2001).
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Tax - outside In the case of program participants who are
Germany subject to taxation in countries other than
Germany, the fiscal treatment of options granted
and of exercise gains depends on the tax laws of
these countries. If you have any questions, please
consult the relevant program coordinator.
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Transferability The option rights are personal rights. They may
not be sold, used as security for loans, or
otherwise transferred. The participant may, on the
other hand, freely dispose of the BOP 2001 shares.
Their sale within the two-year holding period is
in breach of the Undertaking, however, and will
result in loss of the option rights granted in
respect of them and must therefore be immediately
reported to the relevant coordinator.
Page 16
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Information on the The decision to exercise option rights is a
Internet and from personal one. On the Internet at
the depository bank xxx.xxxxxxxx-xxxx.xx/xxxx, we provide information
on the value of options and exercise periods and
closed periods.
Participants will be informed of exercise
opportunities and processing details in good time
before expiry of the two-year waiting period.
Participants will be sent securities contract
notes direct by the depository bank in respect of
all operations associated with BOP (in particular
the purchase of shares when options are exercised
and the sale of shares) and current account
statements in respect of movements on BOP current
accounts. At the same time, the depository bank
will also inform the relevant BOP coordinators of
any transactions involving the options.
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Settlement BASF is permitted to settle option rights if, as a
result of divestiture, the division or the entire
company employing the participant is dissociated
from the BASF Group or if the division or the
company is brought into a joint venture. The
settlement will be determined on the basis of the
fair market value of the option rights at the time
of the effective occurrence of the change.
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Change of Control In the event of Change of Control (CoC), a
participant will be entitled to return the option
rights to BASF. A CoC shall be deemed to have
occurred if a BASF shareholder announces a holding
of at least 25%. A participant may declare within
three months of a CoC that they wish to return the
option rights. The participant will receive the
fair market value of the option rights, determined
by the usual methods, in settlement. For the
purposes of determining the value, in the event of
a public bid, the market price of the share will
be deemed to be the average of the five highest
closing prices during the bid period, otherwise
the average of the five highest closing prices
over the 100 trading days immediately preceding
the day of the CoC. The value will be determined
by an independent expert, to be appointed by BASF,
with experience in the valuation of options.
Page 17
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Termination of If a participant's employment relationship is
the employment terminated, the option rights will remain valid
relationship until the participant's departure. If it is not
possible to exercise them within this period
(existence of a waiting period, closed period,
failure to reach applicable thresholds), they will
be forfeited on his/her departure.
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Retirement The option rights that have already been granted
will remain valid after retirement.
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Death The option rights may be bequeathed and may be
exercised by heirs in accordance with the program
rules. If they are bequeathed, BASF is permitted
to settle the bequeathed option rights. The
settlement will be determined in each case on the
basis of the fair market value of the option
rights at the time of death.
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Risks Participants cannot suffer a loss from the option
rights. At worst, the option rights will have no
value. However, participants will be subject to
normal share price risk and possibly currency risk
in respect of the BOP shares.
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Limiting conditions BASF reserves the right
o to decide on an annual basis whether to offer
the BOP and to redefine the group of qualified
persons.
o to pay the exercise gain by cash transfer
instead of in shares, if it decides to do so
for legal, financial or other reasons.
o to dispense with the share ownership
requirement as a basis for the granting of
options in special cases, if share ownership
becomes impossible or impractical for legal
reasons, in particular as a result of currency
or stock market legislation. Special
arrangements shall apply in such cases.
o to adjust the terms and conditions of the BOP
in the event of capital increases or
reductions or restructuring measures in such a
way that appropriate account is taken of the
resulting changes in the value of the option
rights.
Page 18
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Annual Shareholders' BOP 2001 will be implemented subject to the
Meeting 2001 condition that the Annual Shareholders' Meeting of
BASF Aktiengesellschaft held in 2001 approves the
program by resolving to create conditional capital
for the issue of the shares to be granted to the
participants if the performance targets are met.
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Steps leading to o Participants will be informed of the amount of
participation in 2001 their variable compensation by mid-April 2001.
o In May 2001, each participant will be informed
of the number of shares they may designate as
personal investment under the program on the
basis of between 10% and 30% of their gross
variable compensation and of the basic price
applicable to BOP 2001.
o Those wishing to participate must use the
Undertaking form to confirm to their
coordinators by June 30, 2001, at the latest,
of the number of shares held by them at that
date as personal investment under BOP 2001 and
that they intend to hold such shares for at
least two years following the start of the
program, i.e. up to April 27, 2003. By signing
the Undertaking, prospective participants
accept the program and option conditions as
binding and declare themselves willing to
provide their BOP coordinator, on request,
with appropriate proof of ownership of the
number of shares specified in the Undertaking
and to promptly report any premature sales to
their coordinator.
o Participants are themselves responsible for
fulfilling the personal investment obligation
that has been accepted and for purchasing the
necessary number of shares.
o First-time participants in BOP must open a
separate BOP custody account and an associated
BOP current account with the depository bank.
Such participants must therefore complete the
"Current and Custody Account Opening" form and
return it to their coordinator together with
the Undertaking.
o In the second half of 2001, the depository
bank will inform each new participant of the
opening of a custody and current account and
all participants of the entry of their option
rights.
Please note:
Each coordinator is obliged to request proof, on a
random basis, of ownership of the shares specified
by the participant in the Undertaking.
Page 19
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Translation This document is an English-language translation
of the principal provisions of the BOP 2001. In
the event of any discrepancy, the German-language
document setting forth the actual terms and
conditions of the BOP 2001 will be binding. The
German version is available from the BOP
coordinator on request.
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Terms of the The BOP custody account and BOP current account
depository bank will be set up and administered at no cost to
participants during the program period. Balances
on accounts will earn credit interest at a rate
which currently (as of February 2001) stands at
1.50% p.a. Accounts will be maintained in euros.
The following charges will be incurred for the
sale (via Xetra) of BASF shares held with the
depository bank:
o commission rate of 0.3% of the market price
o brokerage of 0.04% of the market price
o outside charges (Deutsche Borse AG/Deutsche
Borse Clearing AG) that will be charged to the
depository bank (currently Euro 2.20 per order;
as of February 2001).
Where dividend credits are reinvested in BASF
shares, a commission of 0.2% and brokerage of
0.04% of the purchase price as well as the outside
charges specified above will be charged. If a
participant acquires BOP 2001 shares via the
depository bank, a charge of 0.5% of the
acquisition price will be incurred.
If participants do not immediately have sufficient
funds available in their current accounts when
they exercise their option rights, the depository
bank will allow them to briefly overdraw the
account. The overdraft interest rate is tied to
the EONIA (EURO Overnight Index Average) plus 3%,
currently totaling 8% p.a. (as of February 2001).
The depository bank reserves the right to
renegotiate the reference interest rate and the
extra charge if the market interest rates change.
The current conditions can be obtained from the
depository bank. Foreign currency credits will be
converted to euros at the close quotation.
Foreign currency credits will be converted to
euros at the close quotation. All the special
terms specified here apply solely to the BOP.
Other securities cannot be entered in BOP custody
accounts with the same customer numbers. Transfers
of shares to different custody accounts and money
transfers will be subject to current rates for
customers, which can be requested from the
depository bank at any time.
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Authority to operate Participants' respective BOP coordinators will be
a current/custody able to provide them with forms for granting
account authority to operate their current and custody
accounts, which they can use to authorize other
people to represent them in their dealings with
the depository bank, either generally or
specifically in the event of their death.
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Applications for Resident taxpayers in Germany can use an
capital gains "Exemption application" to apply for the
exemption from 2002 non-retention of withholding tax on domestic
- Germany only - dividends equal to 20% of the gross dividend (as
of February 2001) up to the limit determined by
them. It will cease to be possible to pay out a
corporate tax credit from 2002. The tax credit
system will be replaced by the "half income
method" (Halbeinkunfteverfahren). Shareholders
will then have to pay income tax on half the
dividend payments made by a corporation. On the
other hand, there will be no offsetting of
corporate tax already paid by the company. When
the amount of an exemption application is
determined, account must be taken, in particular,
of the number of any BASF shares in the
participant's custody account with the depository
bank and the expected gross dividend. If exemption
applications are submitted to more than one bank
or branch of Deutsche Bank AG, the total amount
exempted must not exceed the participant's
personal allowance (as of February 2001, no more
than DM 3,100, or DM 6,200, in the case of jointly
assessed spouses).
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Contacts If you have any questions concerning program
details, the BOP coordinator at BASF will be able
to provide assistance.
With regard to questions specifically concerning
banking details, competent assistance will be
available to you at Deutsche Bank AG, Private
Banking, 67059 Ludwigshafen, Germany at
Tel. : +621/0000-000
Fax : +621/0000-000
e-mail: xxx-xxxx.xxxxxxxxxxxx@xx.xxx
These contacts will also advise the participants
about the possibility of acquiring more BOP shares
through the depository bank and terms and
conditions applicable to such an acquisition.
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