Settlement Agreement. between. MAN SE, Ungererstr. 69, Munich, and. Prof. Dr. h.c. Karlheinz Hornung, Preamble

Transcription

1 Settlement Agreement between MAN SE, Ungererstr. 69, Munich, and Prof. Dr. h.c. Karlheinz Hornung, Preamble P.1 Professor Hornung was a member of the Executive Board of the former MAN AG and MAN SE ( MAN ) from 1 October 2004 until 11 December 2009 with responsibility for Controlling, and also its Chief Financial Officer from 1 January P.2 In 2009, the Public Prosecutors Office Munich I initiated investigations against employees and executives of subsidiary and affiliate companies of MAN on grounds of suspected bribery payments within the MAN group. Fines of EUR 75,300, each were imposed on MAN Nutzfahrzeuge Aktiengesellschaft and MAN Turbo AG on 10 December MAN Turbo AG was merged with MAN Diesel SE in 2010 and has been renamed MAN Diesel & Turbo SE. In the view of MAN, the payment of these fines led to financial losses at MAN, and MAN suffered further detriment due to subsequent payment of taxes, the costs of internal investigation and the payment of bribes itself. Damages claims were quantified and asserted against Professor Hornung with letter of 6 December 2010 together with a memorandum of 6 December In accordance with the definition of No. 1.2 of the D&O Settlement ISAR (P.6), the above-mentioned facts and circumstances shall with the exception of the Ferrostaal/IPIC Complex as described in No. 2.7 of the D&O Settlement ISAR be referred to in the following as Compliance-Case ISAR. P.3 The parties disagree as to whether Professor Hornung has breached his duties as executive board member of MAN with regard to the Compliance-Case ISAR and whether, and to what amount, damages claims arise as a result thereof. P.4 With regard to the severance payment claims of Professor Hornung under the termination agreement with MAN of 27 November 2009 ( Termination Agreement ), MAN exercised a right of lien in the amount of EUR 668, and additionally received, under the agreement between Professor Hornung and MAN of 26 August 2011, a bank guarantee in the amount of EUR 331, from Professor Hornung, which expires on 28 February 2014 (Amendment No. 07 of the bank guarantee No. 220BGI of Deutsche Bank; Bank Guarantee ), to secure any possible damages claims resulting from the Compliance-Case ISAR

2 P.5 Alongside other former executive board members of MAN and its subsidiary companies, Professor Hornung belongs to the insured group of persons covered by a D&O Insurance that MAN concluded as policy holder and that consists of a Basic Contract for EUR 25,000, and two excess policies for EUR 35,000, and EUR 90,000,000.00: (i) pecuniary loss liability insurance policy taken out for directors and officers between Allianz Global Corporate & Specialty AG ( AGCS ) and MAN with the insurance policy number IHV 70/0493/ /509 of 15 May 2009 ( Basic Contract ), (ii) directors' and officers' liability insurance excess policy between AGCS as the lead insurer and MAN with the policy-no. IHV 70/0493/ /509 of 18 May 2009 ( First Excess Policy ) and (iii) directors' and officers' liability insurance excess policy between Zurich Insurance plc, Niederlassung Deutschland (branch in Germany) as the lead insurer and MAN with the policy-no of 5 June P.6 On 26 September / 4 October 2013, MAN reached a mutual agreement with AGCS as the insurerer of the Basic Contract (P.5(i)) and as the lead insurer of the First Excess Policy (P.5(ii)) on the liability and coverage claims with regard to the Compliance- Case ISAR for the insurance period of 31 December 2008 until 31 December 2009 ( D&O Settlement ISAR ). According to the D&O Settlement ISAR, the D&O Insurers will pay MAN EUR 42,500, for the regulation of possible losses arising from or in connection with the Compliance-Case ISAR less the costs for making claims (fees of the attorneys of the insured persons) and less any deductibles to be borne by the insured persons. The D&O Settlement ISAR is subject to the condition precedent that the shareholders meeting of MAN as well as the shareholders meetings of MAN Truck & Bus AG, MAN Diesel & Turbo SE and Renk AG approve this D&O Settlement ISAR and no minority of shareholders whose shares in total represent at least 10% of the capital stock of the respective company files a written objection ( 93 Para. 4 Sent. 3 German Stock Corporation Act). According to the current planning, the respective shareholders meetings are to take place by the end of June In light of the above, and in order to avoid court proceedings, the parties agree on the following: 1 Personal Contribution Professor Hornung agrees to pay MAN a personal contribution for the adjustment of losses ( Personal Contribution ) in the amount of EUR 800, (in words: eight hundred thou

3 sand Euro). This independent obligation to pay the Personal Contribution does not represent an acknowledgment by Professor Hornung with regard to possible violations of his duties with regard to his function as executive board member of MAN. 2 Settlement and Satisfaction of Claims arising from or in connection with the Compliance-Case ISAR 2.1 Upon (i) payment of the Personal Contribution according to 1 and (ii) entry into force of the D&O Settlement ISAR according to P.6, all current and future claims of MAN against Professor Hornung arising from or in connection with the Compliance- Case ISAR, whether known or unknown, conditional or unconditional, from its own rights or from assigned rights, regardless of the legal grounds for such claims, especially due to the breach of organizational and supervisory duties with regard to the compliance-organization, shall be settled and satisfied. Any wage tax or income tax related duties or obligations vis-à-vis the tax authorities in connection with such settlement and satisfaction of claims shall in relation to MAN be borne solely by Professor Hornung. MAN agrees to request a wage tax information [ Lohnsteueranrufungsauskunft ] from the competent local tax office pursuant to 42e German Income Tax Act no later than two weeks after the signing of this settlement agreement; Professor Hornung is to be involved in the process and is responsible for the content of the request. 2.2 The settlement and satisfaction of damages claims pursuant to 2.1 also covers any claims of MAN Truck & Bus AG, MAN Diesel & Turbo SE and/or Renk AG, each including their legal predecessors and subsidiary companies, against Professor Hornung arising from or in connection with the Compliance-Case ISAR. With regard to the aforementioned companies MAN will exert its influence so as to prevent any such damages claims against Professor Hornung from being asserted. 3 Settlement of Claims between Co-Debtors [ Innenschuldnerausgleich ] 3.1 With regard to the Compliance-Case ISAR, Professor Hornung hereby assigns to MAN any possible co-debtor recourse claims he may have against former and current executive and supervisory board members as well as against employees of MAN, MAN Truck & Bus AG, MAN Diesel & Turbo SE and/or Renk AG, each including their legal predecessors and subsidiary companies. MAN hereby accepts the assignment. 3.2 Payments by the aforementioned third parties do not lead to the fulfillment of existing claims against Professor Hornung

4 4 Indemnity 4.1 MAN shall indemnify Professor Hornung from (a) possible claims of MAN Truck & Bus AG, MAN Diesel & Turbo SE and/or Renk AG, each including their legal predecessors and subsidiary companies, (b) possible co-debtor recourse claims of other former or current executive and supervisory board members and/or employees of MAN, MAN Truck & Bus AG, MAN Diesel & Turbo SE and/or Renk AG, each including their legal predecessors and subsidiary companies, (c) possible claims asserted against Professor Hornung by shareholders of MAN in or outside Germany, (d) possible claims of the D&O-Insurers against Professor Hornung due to possible alleged breaches of other obligations [ Obliegenheiten ] resulting from the negotiations and the conclusion of this agreement, as well as (e) possible claims of customers or competitors of the MAN group against Professor Hornung arising from or in connection with Professor Hornung s position as executive board member of MAN, and (f) possible claims of the D&O-Insurers against Professor Hornung for reimbursement of defense costs arising from or in connection with the Compliance-Case ISAR. The indemnification takes legal effect only if and to the extent that Professor Hornung paid his Personal Contribution pursuant to 1. The indemnification does not apply if Professor Hornung admits any claims as described in (a), (b), (c), (d), (e) and (f) without the prior consent of MAN, if he agrees to a settlement of such claims without the prior consent of MAN or if he does not defend himself against such claims until MAN has decided upon a defense. 4.2 For the avoidance of doubt, the indemnification pursuant to 4.1 does not apply to claims described in 4.1 (a), (b), (c), (d), (e) and (f) that Professor Hornung has admitted, for which he has agreed to a settlement or against which he has failed to defend himself, before this settlement agreement has taken legal effect pursuant to 6, unless Professor Hornung disclosed such claims to MAN and MAN has decided upon a defense against such claims. Professor Hornung undertakes that he has not admitted such claims, has not agreed to a settlement of such claims, and has not failed to defend himself against such claims

5 5 Right of Lien, Due Date and Methods of Payment 5.1 Up until this settlement agreement takes legal effect pursuant to 6, MAN is entitled to exercise a right of lien in the amount of EUR 668, with respect to the remaining severance payment claims of Professor Hornung under the Termination Agreement. Interest claims of Professor Hornung against MAN due to the withholding of severance payments have not arisen and will not arise. 5.2 The Personal Contribution is due on the first workday of the month that follows the approval by the shareholders meeting of MAN pursuant to 6.2. If a complaint is filed against resolutions of the shareholders meeting regarding the approval of this settlement agreement prior to the expiry of the statutory deadline, the payment only becomes due once the necessary approval of the settlement agreement by the shareholders meeting of MAN finally take legal effect. 5.3 The Personal Contribution shall be paid (a) in a partial amount of EUR 668, (less possibly applicable wage tax in accordance with 5.4), by waving of unpaid severance payment claims under the Termination Agreement (P.4) and (b) in the amount of at least EUR 131, by remittance by Professor Hornung in Euro free of cost for MAN to a bank account of MAN yet to be designated. 5.4 Professor Hornung alone shall, in his relationship with MAN, bear any and all wage tax and income tax related duties or obligations vis-à-vis the tax authorities in connection with his waiver of claims pursuant to 5.3(a). MAN agrees to request a wage tax information [ Lohnsteueranrufungsauskunft ] from the competent local tax office pursuant to 42e German Income Tax Act no later than two weeks after the signing of this settlement agreement; Professor Hornung is to be involved in the process and is responsible for the content of the request. In the event that the competent local tax office does not provide an advance ruling [ verbindliche Auskunft ] with regard to the tax exemption, MAN will withhold and remit any applicable wage tax and other duties in connection with any and all severance payment claims to the competent tax office, unless Professor Hornung has beforehand provided evidence of a corresponding exemption in the form of an electronic wage tax deduction note pursuant to 39a German Income Tax Act. Professor Hornung hereby agrees with immediate effect to the withholding and remittance of wage tax and other duties as determined by MAN. The parties assume that Professor Hornung is entitled to such tax exemption pursuant to 39a German Income Tax Act and therefore wage tax is not to be remitted. If, contrary to expectation, this is not the case, the amount payable pursuant to 5.3(b) is increased by the amount of the wage tax and other duties that are to be remitted

6 5.5 MAN is entitled to invoke the bank guarantee in the event that Professor Hornung does not pay the Personal Contribution in full within 14 days after the due date pursuant to 5.2. In the event that the Supervisory Board of MAN gives its approval pursuant to 6.1, Professor Hornung is entitled and obligated to replace the bank guarantee described in P.4 from 8 February 2014 on, but no later than 21 February 2014, by an identical bank guarantee in a reduced amount of EUR 131, and that is limited to 31 July If a complaint is filed against resolutions of the shareholders meeting regarding the approval of the D&O Settlement ISAR or this settlement agreement prior to the expiry of the statutory deadline, Professor Hornung will see to it that the bank guarantee will be prolonged until two weeks after this settlement agreement finally takes legal effect or does not take legal effect at all. 5.6 With regard to the rights of lien and offsetting the general rules apply mutually and across the group. 6 Legal Effect 6.1 The legal effect of this settlement agreement is subject to the condition precedent that the Supervisory Board of MAN give its approval. The condition is deemed to be met as soon as the Chairman of the Supervisory Board of MAN confirms to Professor Hornung in writing that the Supervisory Board of MAN has given its approval to this settlement agreement. 6.2 The legal effect of this settlement agreement is subject to the additional condition precedent that the shareholders meeting of MAN approve this settlement agreement and no minority of shareholders whose shares in total represent at least 10% of the capital stock of MAN file a written objection ( 93 Para. 4 Sent. 3 German Stock Corporation Act). The condition is deemed to be met as soon as the Chairman of the Supervisory Board of MAN confirms to Professor Hornung in writing that the aforementioned requirements have been met. 6.3 MAN hereby irrevocably authorizes the attorneys-at-law Dr. Roland Steinmeyer and Mr. Patrick Späth, both with business address at c/o Wilmer Cutler Pickering Hale and Dorr LLP, Friedrichstr. 95, Berlin, to issue the statements pursuant to 6.1 and 6.2 on behalf of MAN , 5, 6.3, 7 and 8 of this settlement agreement shall, by way of derogation from 6.1 und 6.2, have immediate effect. 6.5 The legal effect of this settlement agreement does not depend on the legal effect of settlement agreements with other former executive board members

7 7 Waiver of the Defense of the Statute of Limitations 7.1 Professor Hornung hereby confirms his waiver, up until and including the end of the Annual General Meeting of MAN in 2014, of the defense of the statute of limitations vis-à-vis MAN in accordance with his statement of 13 November 2009 in connection with the statements of 10 February 2010, 6 April 2010, 19 May 2010, 26 June 2010, 8 December 2010, 11 March 2011, 11 August 2011, 9 December 2011, 28 March 2012, 1 October 2012, 28 March 2013 and 9 September In the event that a complaint is filed against resolutions of the shareholders meetings regarding the approval of this settlement agreement prior to the expiry of the statutory deadline, Professor Hornung shall prolong as of now his waiver of the defense of the statute of limitations pursuant to 7.1 until 30 June In the event that a complaint is filed against resolutions of the shareholders meetings regarding the approval of the D&O Settlement ISAR prior to the expiry of the statutory deadline, Professor Hornung shall prolong as of now his waiver of the defense of the statute of limitations pursuant to 7.1 until 30 June The statements in 7.2 and 7.3 do not constitute any extension in the material scope of the declared waiver of the defense of the statute of limitations as referred to in 7.1; only the deadline is prolonged respectively. 8 Miscellaneous 8.1 There are no ancillary agreements to this settlement agreement. Any changes to this settlement agreement, including this written form requirement, must be made in writing. 8.2 If any provision of this settlement agreement is or becomes wholly or partially invalid or unenforceable, or should an omission be identified while executing this settlement agreement, the validity of the remaining provisions shall remain unaffected thereby. An appropriate and legally valid provision that comes closest in an economic sense to what the parties intended or would have intended had they thought of the invalidity, unenforceability or omission, shall apply in place of the invalid, unenforceable or absent provision. Similarly, the parties will re-enter into this settlement agreement and subsequently carry out all actions necessary in the event that this settlement agreement is or becomes wholly or partially invalid or unenforceable and such deficiency is capable of being remedied subsequently Para. 2 German Civil Code shall not apply

8 8.4 The place of performance of all obligations of both parties is Munich. All disputes arising from or in connection with this settlement agreement shall be governed by German law. With regard to all disputes arising from or in connection with this settlement agreement the parties agree that the local court [ Landgericht ] Munich I shall have exclusive jurisdiction pursuant to Art. 23 of the Lugano Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters of 30 October The parties hereby agree to treat this settlement agreement as confidential, unless they are obligated to make disclosure by law or the disclosure serves to execute this settlement agreement. Any press statements may only be released with the consent of the other party. (Munich, 22 January 2014) (Gland, 21 January 2014) Signed by Steinmeyer, Rechtsanwalt (MAN SE) Signed by Hornung (Prof. Dr. h.c. Karlheinz Hornung) - 8 -