Report on MAN AG's Change of Legal Form to by tsw71223

VIEWS: 12 PAGES: 68

									                                       2009
Report on MAN AG’s Change of Legal
Form to a Societas Europaea (SE)

Engineering the Future – since 1758.
MAN AG
This is a translation of the German original for information purposes only. In the event
 of discrepancies between the German language version and any translation thereof,
                        the German language version will prevail.




                     Report on MAN AG’s Change of Legal Form


                                by the Executive Board
                                      of MAN AG


                            Regarding Item 8 of the Agenda
                      for the Annual General Meeting of MAN AG
                                   on April 3, 2009


                  concerning the change of legal form from MAN AG
             to a Societas Europaea (SE – European Stock Corporation)
                                                       Table of Contents




I.      Introduction ..................................................................................................................... 6 

II.     MAN AG .......................................................................................................................... 6 
        1.    Domicile, headquarters, fiscal year and purpose of the Company ........................ 6 
        2.    Structure of the MAN Group .................................................................................. 7 
        3.    Business developments and results of operations in fiscal year 2008................... 7 
        4.    Capital and stockholders, purchase of own shares ............................................... 8 
        4.1.  Share capital .......................................................................................................... 8 
        4.2.  Authorized Capital 2005 ........................................................................................ 8 
        4.3.  Contingent Capital 2005 ........................................................................................ 9 
        4.4.  Authorization to purchase own shares ................................................................. 10 
        4.5.  Stockholders ........................................................................................................ 10 
        5.    Executive Board and Supervisory Board ............................................................. 10 
        6.    Corporate Governance ........................................................................................ 15 
        7.    Codetermination .................................................................................................. 15 

III.    Principal aspects of the change of legal form ............................................................... 16 

IV.     Costs incurred in the change of legal form.................................................................... 16 

V.      Comparison of the legal position of the stockholders of MAN AG and of
        MAN SE......................................................................................................................... 16 
        1.    Introduction .......................................................................................................... 17 
        2.    General provisions ............................................................................................... 17 
        2.1.  Legal entity .......................................................................................................... 17 
        2.2.  Share capital, Authorized Capital 2005, Contingent Capital 2005 ....................... 17 
        2.3.  Headquarters of the Company, option of cross-border relocation ....................... 18 
        2.4.  Notification obligations ......................................................................................... 19 
        3.    Formation of the SE ............................................................................................. 19 
        4.    Capital maintenance, equal treatment of stockholders ........................................ 19 
        5.    Governing principles of the SE, bodies and corporate governance ..................... 20 
        5.1.  Executive Board ................................................................................................... 20 
              a)  Management of the Company .................................................................... 20 
              b)  Composition................................................................................................ 20 
              c)     Management of the business ..................................................................... 21 
              d)  Representation of the Company ................................................................. 21 
              e)  Appointment and dismissal of the Executive Board ................................... 21 
              f)     Principles for the remuneration of Executive Board members,
                     prohibition of competition and the granting of loans to Executive
                     Board members ......................................................................................... 22 
              g)  Obligations of the Executive Board in the event of loss,
                     overindebtedness and insolvency .............................................................. 22 
              h)  Duty of care and liability ............................................................................. 22 
              i)     Reports to the Supervisory Board .............................................................. 22 
              j)     Utilization of influence on the Company ..................................................... 23 
        5.2.  Supervisory Board ............................................................................................... 24 
              a)  Size and composition of the Supervisory Board ......................................... 24 
              b)  Status proceedings regarding the composition of the Supervisory
                     Board ......................................................................................................... 25 
              c)     Personal requirements for Supervisory Board members ............................ 25 
              d)  Appointment of the Supervisory Board ....................................................... 25 
                                                                                                                                          2
                e)     Term of office.............................................................................................. 26 
                f)     Dismissal of Supervisory Board members.................................................. 26 
                g)     Appointment of Supervisory Board members by a court ............................ 27 
                h)     Incompatibility of simultaneous membership on the Executive Board
                        and the Supervisory Board ........................................................................ 28 
                i)     Internal organization of the Supervisory Board .......................................... 28 
                j)     Convening Supervisory Board meetings .................................................... 29 
                k)     Responsibilities and rights of the Supervisory Board ................................. 29 
                l)     Duty of care and duty to observe secrecy of Supervisory Board
                        members .................................................................................................... 30 
                m)  Representation of the Company vis-à-vis members of the Executive
                        Board ......................................................................................................... 31 
                n)  Remuneration of Supervisory Board members, contracts with
                        Supervisory Board members, granting of loans to Supervisory Board
                        members .................................................................................................... 31 
        5.3.    Annual General Meeting ...................................................................................... 31 
                a)  Responsibilities of the Annual General Meeting ......................................... 32 
                b)  Approval of the Executive Board and Supervisory Board’s actions ............ 32 
                c)     Convening the Annual General Meeting, Organization and Procedure...... 33 
                d)  Convening of the Annual General Meeting upon request of a minority;
                        supplementing the agenda upon request of a minority .............................. 33 
                e)  Stockholders’ right to information, to speak and to raise questions
                        during the Annual General Meeting ........................................................... 34 
                f)     Rules of Procedure ..................................................................................... 34 
                g)  Resolutions of the Annual General Meeting ............................................... 34 
                h)  Resolutions of the Annual General Meeting involving amendments to
                        the Articles of Incorporation ....................................................................... 35 
                j)     Non-voting preferred stock, special resolution ........................................... 35 
                k)     Special audits ............................................................................................. 36 
                l)     Liability claims against corporate bodies, stockholder lawsuits .................. 36 
        6.      Annual financial statements and consolidated financial statements .................... 36 
        7.      Capitalization measures ...................................................................................... 36 
        8.      Alteration of the relationship between several classes of shares to one
                another................................................................................................................. 36 
        9.      Invalidity of resolutions of the Annual General Meeting and of the approved
                annual financial statements, special audit because of an impermissible
                undervaluation ..................................................................................................... 37 
        10.     Dissolution of the company .................................................................................. 37 
        11.     Affiliated companies ............................................................................................. 38 
        12.     Criminal law and civil penalty provisions ............................................................. 38 

V.      Fulfillment of the change in legal form of MAN AG to an SE ........................................ 38 
        1.     Preparation of the Draft Terms of the Conversion ............................................... 38 
        2.     Company formation report, company formation audit and change of legal
               form audit ............................................................................................................. 39 
        3.     Disclosure ............................................................................................................ 40 
        4.     Annual General Meeting of MAN AG on April 3, 2009 ......................................... 40 
        5.     Procedure for the involvement of employees in MAN SE .................................... 40 
        6.     Completion of MAN AG’s change of legal form to an SE .................................... 41 
        7.     Establishment of the first Supervisory Board for MAN SE and appointment
               of the first Executive Board .................................................................................. 42 

VI.   Explanation of the Draft Terms of Conversion and the Articles of Incorporation
      of MAN SE.................................................................................................................... 43 
      1.   Explanation of the Draft Terms of Conversion ..................................................... 43 

                                                                                                                                         3
1.1.  Change of legal form of MAN AG to MAN SE (§ 1 of the Draft Terms of
       Conversion) ......................................................................................................... 43 
1.2.  Company name, headquarters, Articles of Incorporation (§ 2 of the Draft
       Terms of Conversion) .......................................................................................... 43 
1.3.  Share capital, authorized and contingent capital, appropriation of net retained
       profits, authorization to purchase own shares, no cash settlements (§ 3 of the
       Draft Terms of Conversion) ................................................................................. 43 
1.4.  Special rights, Special privileges (§ 4 of the Draft Terms of Conversion) ............ 45 
1.5.  Bodies of MAN SE (§ 5 of the Draft Terms of Conversion).................................. 46 
1.6.  Information on the procedure for arrangements for employee involvement in
       MAN SE (§ 6 of the Draft Terms of Conversion) ................................................. 47 
       a)  Principles and terms (§ 6.1 and 6.2 of the Draft Terms of Conversion) ..... 47 
       b)  Initiation of the procedure for the involvement of employees (§ 6.3
              and § 6.4 of the Draft Terms of Conversion) .............................................. 47 
       c)     Establishment of the Special Negotiating Body and conclusion of the
              Agreement regarding employee involvement (§ 6.5, 6.6 and 6.7 of
              the Draft Terms of Conversion) .................................................................. 48 
1.7.  Agreement between the Executive Board of MAN AG and the Special
       Negotiating Body – consequences of the change of legal form for employees
       and their representative bodies ........................................................................... 49 
       a)  Scope of the Agreement with the Special Negotiating Body, terms
              and definitions (§ 7.1 of the Draft Terms of Conversion) ........................... 49 
       b)  Size and composition of the SE Works Council (§ 7.2 to 7.4 of the
              Draft Terms of Conversion) ........................................................................ 49 
       c)     Responsibilities, powers and rights of the SE Works Council to
              information and consultation by the MAN SE Executive Board (§ 7.6
              to § 7.9 of the Draft Terms of Conversion) ................................................. 51 
       d)  Size of the SE Supervisory Board, nomination and election of the
              employee representatives on the SE Supervisory Board, rights and
              responsibilities of the employee representatives (§ 7.10 to § 7.12 of
              the Draft Terms of Conversion) .................................................................. 52 
       e)  Entry into force, renegotiation and termination of the Agreement (§
              7.13 to § 7.18 of the Draft Terms of Conversion) ....................................... 53 
       f)     Other consequences of the change of legal form for the employees
              and their representative bodies (§ 7.19 to § 7.22 of the Draft Terms of
              Conversion) ................................................................................................ 55 
       g)  Costs (§ 7.23 of the Draft Terms of Conversion) ........................................ 55 
1.8.  Auditor (§ 8 of the Draft Terms of Conversion) .................................................... 55 
1.9.   Control and profit-and-loss transfer agreements (§ 9 of the Draft Terms of
       Conversion) ......................................................................................................... 55 
2.     Explanation of the Articles of Incorporation of MAN SE ...................................... 55 
2.1.  Company name, headquarters (article 1 of the Articles of Incorporation)............ 56 
2.2.  Purposes of the Company (article 2 of the Articles of Incorporation)................... 56 
2.3.  Notices and information (article 3 of the Articles of Incorporation) ...................... 56 
2.4.  Share capital and shares (article 4 of the Articles of Incorporation) .................... 56 
2.5.  Composition of the Executive Board (article 5 of the Articles of Incorporation) ... 57 
2.6.  Representation of the Company (article 6 of the Articles of Incorporation) ......... 57 
2.7.  Number and election of Supervisory Board members (article 7 of the Articles
       of Incorporation .................................................................................................... 58 
2.8.  Chairman of the Supervisory Board (article 8 of the Articles of Incorporation) .... 59 
2.9.  Rules of procedure and committees (article 9 of the Articles of Incorporation) ... 59 
2.10.  Meetings and decisions of the Supervisory Board (article 10 of the Articles of
       Incorporation) ....................................................................................................... 59 
2.11.  Required Consent (article 11 of the Articles of Incorporation) ............................. 60 
2.12.  Remuneration (article 12 of the Articles of Incorporation) ................................... 60 

                                                                                                                              4
        2.13.  Location of the Annual General Meeting
               (article 13 of the Articles of Incorporation) ........................................................... 60 
        2.14.  Convening of the Annual General Meeting (article 14 of the Articles of
               Incorporation) ....................................................................................................... 61 
        2.15.  Conditions for participating in the Annual General Meeting
               (article 15 of the Articles of Incorporation) ........................................................... 61 
        2.16.  Chair of the Annual General Meeting and Audio and Video Transmission
               (article 16 of the Articles of Incorporation) ........................................................... 61 
        2.17.  Voting rights (article 17 of the Articles of Incorporation) ...................................... 61 
        2.18.  Elections (article 18 of the Articles of Incorporation) ........................................... 62 
        2.19.  Fiscal year (article 19 of the Articles of Incorporation) ......................................... 62 
        2.20.  Preparation of the Annual Financial Statements and the Management Report
               (article 20 of the Articles of Incorporation) ........................................................... 62 
        2.21.  Appropriation of profit for the period (article 21 of the Articles of Incorporation).. 62 
        2.22.  Adoption of the Annual Financial Statements (article 22 of the Articles of
               Incorporation) ....................................................................................................... 62 
        2.23.  Resolutions of the Annual General Meeting regarding accounting matters
               (article 23 of the Articles of Incorporation) ........................................................... 63 
        2.24.  Appropriation of net retained profits (article 24 of the Articles of Incorporation) .. 63 
        2.25.  Profit distribution for new shares (article 25 of the Articles of Incorporation) ....... 63 
        2.26.  Official language (article 26 of the Articles of Incorporation) ............................... 63 
        2.27.  Expenses for formation (article 27 of the Articles of Incorporation) ..................... 63 

VII.  Effects of the change of legal form................................................................................ 64 
      1.    Corporate law effects ........................................................................................... 64 
      1.1.  Legal effects of the change of legal form ............................................................. 64 
      1.2.  Dividend entitlements .......................................................................................... 64 
      1.3.  Stockholder structure of MAN SE after the change of legal form ........................ 64 
      1.4.  German Corporate Governance Code ................................................................. 64 
      2.    Effects of the change of legal form in accounting ................................................ 65 
      3.    Tax effects of the change of legal form ................................................................ 65 
      4.    Effects of the change of legal form on the Company shares and the stock
            market listing ........................................................................................................ 65 
      5.    Other effects ........................................................................................................ 66 




                                                                                                                                      5
I.     Introduction

The Executive Board of MAN AG, headquartered in Munich, Germany (hereinafter referred to
as MAN AG or the Company) proposes to the Annual General Meeting the change in legal
form of MAN AG to a European Stock Corporation (SE – Societas Europea). This change
would be in accordance with article 2 (4) in conjunction with article 37 of Council Regulation
(EC) No. 2157/2001 of October 8, 2001 on the Statute for a European company (SE)
(hereinafter referred to as the SE Council Regulation) in conjunction with the Gesetz zur
Ausführung der Verordnung (EG) Nr. 2157/2001 des Rates vom 8.10.2001 über das Statut
der Europäischen Gesellschaft (hereinafter referred to as the SEAG – German act
implementing Council Regulation (EC) No. 2157/2001 of October 8, 2001 on the Statute for a
European company (SE)) of December 22, 2004 and in conjunction with the provisions of the
Gesetz über die Beteiligung der Arbeitnehmer in einer Europäischen Gesellschaft
(hereinafter referred to as the SEBG – German act transposing the Directive regulations
regarding the involvement of employees in SEs) of December 22, 2004.

In a meeting on February 18, 2009, the Supervisory Board approved this plan and passed
the corresponding proposal for agenda item 8 as detailed in the Invitation to the Annual
General Meeting of MAN AG on April 3, 2009.

The change of legal form shall be conducted pursuant to article 37 in conjunction with article
2 (4) of the SE Council Regulation. The Draft Terms of Conversion resolved and published
by the Executive Board of MAN AG (hereinafter referred to as the Draft Terms of
Conversion) form the basis for MAN AG’s change of legal form to an SE. The Articles of
Incorporation of MAN SE have been included as Annex 1 to the Draft Terms of Conversion
and the Agreement on the involvement of employees in the SE concluded between the
Executive Board of MAN AG and the Special Negotiating Body on February 18, 2009 has
been included as Annex 2. Pursuant to article 37 (7) of the SE Council Regulation, both the
Draft Terms of Conversion and the Articles of Incorporation require the authorization of the
Annual General Meeting. The Executive Board of MAN AG is thus presenting the Draft
Terms of Conversion and the Articles of Incorporation for the future MAN SE to the Annual
General Meeting of MAN AG on April 3, 2009 for resolution and approval.

MAN AG’s change of legal form to an SE will neither lead to a dissolution of the company nor
to the formation of a new legal entity (article 37 (2) of the SE Council Regulation). Because
of the Company’s identity as a legal entity, the interests of stockholders in the Company will
continue without change.

To support the stockholders, the Executive Board of MAN AG provides the following report
pursuant to article 37 (4) of the SE Council Regulation. This report explains and justifies the
legal and economic aspects of the change in legal form as well as the effects that the change
from an Aktiengesellschaft (AG – German Stock Corporation) to the supranational legal form
of an SE will have for stockholders and employees. This report only provides a summary of
MAN AG’s business activities because MAN AG’s change of legal form to an SE will not
affect its identity as a legal entity. For further information on MAN AG’s business activities
please refer to the 2008 Management Report of MAN AG (available on the MAN website at
www.man.eu/agm).


II.    MAN AG

1.     Domicile, headquarters, fiscal year and purpose of the Company

MAN AG is domiciled in Munich, Germany, which is also home to its headquarters. It is
entered in the commercial register of the Amtsgericht (Local Court) in Munich under HRB 78

                                                                                             6
706. Its business address is: Landsberger Str. 110, 80339 Munich, Germany. The fiscal year
of MAN AG is the calendar year.

According to its Articles of Incorporation/Bylaws, MAN AG's purpose is to hold equity
interests in enterprises of any type, including mechanical and plant engineering, motor
vehicle and engine manufacturing as well as trading companies and to manufacture such
products and process materials of any kind. The Company may transact any business
deemed necessary or expedient to achieve these purposes (cf. article 2 of the Articles of
Incorporation/Bylaws of MAN AG).

2.     Structure of the MAN Group

As a Group holding company, MAN AG heads the MAN Group. It holds the majority of
shares in the companies within and outside Germany that are part of the MAN Group, both
directly and indirectly (MAN AG and its Group companies are hereinafter referred to as the
MAN Group). The MAN Group's main German subsidiaries are also directly or indirectly
governed by MAN AG through control and profit and loss transfer agreements. The Company
also has major subsidiaries that can be seen in the complete list of shareholdings in the
Group Management Report of MAN AG for the year ended December 31, 2008 (available at
www.man.eu/agm). The sale of 70% of MAN Ferrostaal AG as well as the acquisition of VW
Truck & Bus Brazil is currently being finalized. Both transactions are expected to be closed in
March 2009.

MAN’s focus on transport-related engineering makes it one of Europe’s leading engineering
groups. The decision to sell 70% of MAN Ferrostaal AG completed the MAN Group’s
focusing process on its defined core areas. The companies of the MAN Group rank in the top
three in their respective markets. The Commercial Vehicles, Diesel Engines and Turbo
Machinery core areas account for the operating business. Furthermore, the acquisition of
Brazil-based VW Truck & Bus which was announced in December 2008 will give the MAN
Group a leading position in the commercial vehicle market in a long-term growth region.

3.     Business developments and results of operations in fiscal year 2008

The revenue and earnings of MAN AG increased once again in 2008, compared with fiscal
year 2007. MAN AG boosted its net income by €170 million from €497 million to €667 million.
MAN AG's net income for the fiscal year was predominantly impacted by net investment
income of €923 million (previous year €1,033 million). Other earnings included general and
administrative expenses, other operating income and expenses and net interest
income/expense.

Results of operations
€ million                                                  2008        2007        Change

Net investment income                                          923       1 033          - 110

Net interest expense                                              -7       -60              53

Other operating income                                            53          47              6

General and administrative expenses                            -70         -62               -8

Other operating expenses                                       -38         -82              44

Result from ordinary activities                                861        876               - 15

Income taxes                                                  -194        -379              185


                                                                                                   7
Net income for the fiscal year                                 667         497          170


Net investment income in fiscal year 2008 declined. This is mainly because of the absence
of the disposals of investments recorded in the previous year. The €53 million improvement
in net interest income/expense was primarily the result of the lower amount drawn on the
variable interest-bearing credit facility used to finance the purchase of Scania stock and due
to the decline in expenses recognized for interest on taxes not paid by their due date. Other
operating expenses decreased by €44 million to €38 million (previous year: €82 million). This
is primarily due to the previous year's reported expenses from the transfer of pension
provisions that were recognized as liabilities based on the German entry age normal method
pursuant to section 6a of the Einkommensteuergesetz (EStG – German Income Tax Act) and
transferred to MAN Pensionsfonds AG at their IFRS amounts, as well as to the
reimbursement of non-recurring expenses. Net retained profits amounted to €334 million
(previous year: €463 million) following the transfer of €333 million to retained earnings. The
Executive Board and the Supervisory Board of MAN AG hereby propose to the Annual
General Meeting on April 3, 2009 that the net retained profits of €334 million (previous year:
€463 million) be appropriated for distribution of a dividend of €2.00 for each share carrying
dividend rights (previous year €3.15) and that any amount remaining be carried forward to
new account.

Further information on the business developments as well as the net assets, financial
position and results of operations of MAN AG and the MAN Group can be found in MAN
AG’s Management Report and the Group Management Report for fiscal year 2008 (available
on the MAN website at www.man.eu/agm).

4.     Capital and stockholders, purchase of own shares

4.1.   Share capital

MAN AG’s share capital amounts to €376,422,400. It is divided into 147,040,000 no-par
value shares, of which 140,974,350 are common shares and 6,065,650 nonvoting preferred
shares. Each share represents a proportionate amount of €2.56 of the share capital. The
shares are made out to the bearer. The right of stockholders to certification of their shares is
excluded (article 4 (1) of the Articles of Incorporation/Bylaws of MAN AG).

4.2.   Authorized Capital 2005

In accordance with article 4 (3) of the Articles of Incorporation of MAN AG, the Executive
Board is authorized to increase the share capital, with the consent of the Supervisory Board,
by up to €188,211,200 by issuing bearer shares of common stock on one or more occasions
against cash contributions and/or noncash contributions in the period up to June 2, 2010
(Authorized Capital 2005).

When raising the share capital in return for cash, stockholders must generally be granted a
subscription right. However the Executive Board is authorized to disapply such subscription
rights, with the consent of the Supervisory Board,

-      to the extent necessary to grant holders of convertible bonds or bonds with warrants
       that are or will be issued by the Company or its Group companies a right to subscribe
       for new shares in the amount to which they would be entitled after exercising their
       conversion rights or options (antidilution provision); and/or

-      if the issue price of the new shares is not more than 5% lower than the quoted market
       price and the shares issued in accordance with section 186 (3) sentence 4 of the
       Aktiengesetz (AktG – German Stock Corporation Act) do not in the aggregate exceed
                                                                                              8
       10% of the share capital. Shares issued or sold by direct or indirect application of this
       provision on the basis of other authorizations during the term of this authorization
       count towards this limit until the time of utilization. Shares issued or issuable by virtue
       of convertible bonds or bonds with warrants issued at the time of utilization in
       accordance with this provision also count towards this limit; and/or

-      to realize any fractions needed to round the share capital.

The Executive Board is additionally authorized, with the consent of the Supervisory Board, to
disapply stockholders’ subscription rights when issuing shares against noncash contributions
for the purpose of acquiring companies, investments in companies, or significant assets of
companies. Moreover, the Executive Board is authorized, with prior approval of the
Supervisory Board, to determine further details of the execution of increases in capital.

The Executive Board of MAN AG issued a statement on May 24, 2005 regarding the use of
Authorized Capital 2005 in connection with item 5 of the agenda for MAN AG’s Annual
General Meeting on June 3, 2005. In this declaration, the Executive Board of MAN AG stated
that it had decided that it would make use of the authorization to increase the share capital
(Authorized Capital 2005) only with the following restriction:

“In the event of a capital increase based on contribution in kind for the purpose of acquiring
companies, equity interests in companies or significant assets from companies, the
Executive Board will make use of the authorization to exclude stockholders’ subscription
rights only up to an amount of 20% of the share capital on the date the authorization
becomes effective – and if the value is lower – the share capital which exists on the date the
authorization is exercised respectively. The capital increase based on contribution in kind is
hereby limited to a maximum amount of €75,284,480, corresponding to 29,408,000 ordinary
shares.

In item 6 of the agenda for MAN AG’s Annual General Meeting on April 3, 2009, the
Executive and Supervisory Boards of MAN AG propose to the Annual General Meeting that
the authorization for Authorized Capital 2005 granted by the resolution of the Annual General
Meeting on June 3, 2005 be extended. This extension would authorize the Executive Board,
with the consent of the Supervisory Board, to disapply stockholders' subscription rights for up
to €4,000,000 of Authorized Capital 2005 and to issue new shares against cash contributions
to executives with managerial responsibility (managers) of the Company and/or affiliated
Group companies in accordance with the provisions of section 204 (3) of the AktG (for the
complete text of the proposal to extend the Authorized Capital 2005, see item 6 of the
Invitation to the Annual General Meeting on April 3, 2009 as well as the Report of the
Executive Board).

4.3.   Contingent Capital 2005

In addition, according to article 4 (4) of the Articles of Incorporation/Bylaws of MAN AG, the
share capital has been contingently increased by up to €76,800,000, composed of up to
30,000,000 bearer shares of common stock. The contingent capital increase will only be
implemented to the extent that the holders of conversion rights or options under bonds
issued for cash consideration by MAN AG or its Group companies by virtue of the authorizing
resolution of the Annual General Meeting on June 3, 2005, supplemented by the resolution of
the Annual General Meeting on May 10, 2007, exercise their conversion rights or options,
and provided that other forms of settlement are not used. For the first time, the new stock will
be entitled for dividend for the year of issuance (Contingent Capital 2005).




                                                                                                9
4.4.   Authorization to purchase own shares

The Annual General Meeting of MAN AG resolved on April 25, 2008 to authorize the
Executive Board, with the consent of the Supervisory Board, to purchase common and/or
nonvoting preferred stock of the Company on one or more occasions until October 24, 2009
up to a maximum total amount of 10% of the share capital (cf. item 5 of the agenda for the
invitation to the Annual General Meeting of April 25, 2008). Information on further conditions
concerning the authorization to purchase own shares as well as the Executive Board’s report
are available at www.man.eu/agm. The authorization of April 25, 2008 to purchase own
shares has not been used to date.

4.5.   Stockholders

MAN AG's share capital is in the form of no-par value bearer shares (article 4 (2) of the
Articles of Incorporation/Bylaws of MAN AG). Since shares of MAN AG are made out to the
bearer, MAN AG does not generally know who its stockholders are and how many shares a
particular stockholder holds if legal reporting obligations have not been complied with.

Under the Wertpapierhandelsgesetz (WpHG – German Securities Trading Act), any investor
who reaches, exceeds or falls below certain shares of the voting rights of the Company by
virtue of acquisitions, disposals, or by other means, is required to notify the Company and
the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin – German Federal Financial
Supervisory Authority) of this. In accordance with section 21 (1) of the WpHG, the relevant
thresholds in this respect are 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75% of the
voting rights of the Company. Under section 28 of the WpHG, any violation of this reporting
obligation results in holders being barred from exercising the corresponding voting rights for
the period for which the notification obligations under section 21 (1) of the WpHG were not
satisfied.

Under section 289 (4) no. 3 of the Handelsgesetzbuch (HGB – German Commercial Code),
all direct and indirect interests that exceed 10% of the voting rights must be disclosed.

Wolfsburg-based Volkswagen AG notified MAN AG in February 2007 in accordance with
section 21 (1) of the WpHG that the share of voting rights held by Volkswagen AG had
exceeded the limit of 25% and amounted to 29.9% at that time. In addition, Porsche
Automobil Holding SE and its controlling stockholders notified MAN AG in September 2008 in
accordance with section 21 (1) of the WpHG that – because Porsche Automobil Holding SE
had assumed control of Volkswagen AG – Volkswagen AG's 29.9% interest is also
attributable to Porsche Automobil Holding SE and its controlling stockholders (for details of
the notification see the "Equity" section in the notes to MAN's consolidated financial
statements). MAN AG has not been notified of, nor is it aware of, further direct or indirect
interests in the capital of the Company that reach or exceed 10% of the voting rights or any
changes to the above-mentioned interests.

5.     Executive Board and Supervisory Board

The Executive Board of MAN AG consists of:

     Name      Year     Year of First    Responsibility/       Supervisory Board/Memberships in
                of      Appointment        Function                Other Supervisory Bodies
               Birth
                                                           1
Dipl.-Ing.     1951         2000            Chairman        manroland AG
Håkan                                      (since 2005)     Siemens AG
                                                           2
Samuelsson                                                  MAN Nutzfahrzeuge AG (Chairman)
                                                                                           10
    Name         Year    Year of First   Responsibility/       Supervisory Board/Memberships in
                  of     Appointment       Function                Other Supervisory Bodies
                 Birth
                                                           MAN Diesel SE (Chairman)
                                                           MAN Turbo AG (Chairman)
                                                           MAN Ferrostaal AG (Chairman)
                                                           RENK Aktiengesellschaft (Chairman)
                                                           1
Prof. Dr. h.c.   1950        2004         Member of the     Arcandor AG
Karlheinz                                Executive Board    Demag Cranes AG
Hornung                                                     manroland AG
                                                           2
                                                            MAN Nutzfahrzeuge AG
                                                            MAN Diesel SE
                                                            MAN Turbo AG
                                                            MAN Ferrostaal AG
                                                            RENK Aktiengesellschaft
                                                            (Deputy Chairman)
                                                           3
                                                            MAN Capital Corporation, USA
                                                           (Chairman)
                                                           1
Dr. jur.         1949        2003         Member of the     National Bank AG
Matthias                                 Executive Board    RWE Dea AG
                                                           2
Mitscherlich                                                MAN Turbo AG (Deputy Chairman)
                                                           2
Dr.-Ing.         1955        2006         Member of the    MAN Nutzfahrzeuge AG
Georg                                    Executive Board
Pachta-
Reyhofen
                                                           2
Dipl.-           1956        2005         Member of the     MAN Truck & Bus Deutschland GmbH
Ökonom                                   Executive Board    (Chairman)
Anton                                                       RENK Aktiengesellschaft
Weinmann                                                    NEOPLAN Bus GmbH
                                                           3
                                                            MAN Nutzfahrzeuge Österreich AG
                                                            (Deputy Chairman)
                                                            MAN Region West B.V.


The members of the Executive Board of MAN AG can be reached at the business address of
MAN AG, Landsberger Str. 110, 80339 Munich, Germany.
1
  Membership of supervisory boards of German companies
2
  MAN Group appointments, Germany
3
  MAN Group appointments, outside Germany

The Supervisory Board of MAN AG consists of 20 members. It is composed of an equal
number of stockholder and employee representatives (parity) in accordance with the
Mitbestimmungsgesetz 1976 (MitbestG 1976 – 1976 German Codetermination Act). The
stockholder representatives are elected by the Annual General Meeting. Employee
representatives are elected to the Supervisory Board of MAN AG in accordance with the
provisions of the MitbestG 1976 (sections 10 et seq. of the MitbestG 1976).

The Supervisory Board of MAN AG consists of the following members:




                                                                                           11
        Name/               Position     Year        Supervisory Board/Memberships in Other
      Profession                          of                   Supervisory Bodies
                                         First
                                         Appoi
                                          nt-
                                         ment:
Hon.-Prof. Dr. techn.      Chairman of   2007    Committees:
h.c. Dipl.-Ing. ETH            the               Executive Personnel Committee (Chairman)
Ferdinand K. Piëch         Supervisory           Standing Committee (Chairman)
Chairman of the              Board               Mediation Committee (Chairman)
Supervisory Board of
Volkswagen AG                                    Supervisory Board:
                                                 1
                                                  Volkswagen AG (Chairman)
                                                  AUDI AG
                                                  Dr. Ing. h.c. F. Porsche AG
                                                  Porsche Automobil Holding SE
                                                 3
                                                  Porsche Ges.m.b.H.
                                                  Porsche Holding GmbH

Michael Behrendt            Member       2002    Committees:
CEO of Hapag-Lloyd                               Executive Personnel Committee
AG                                               Audit Committee
                                                 Standing Committee

                                                 Supervisory Board:
                                                 1
                                                  Barmenia Allgemeine Versicherungs-AG
                                                  Barmenia Krankenversicherung a.G. (Deputy
                                                 Chairman)
                                                  Barmenia Lebensversicherung a.G. (Deputy
                                                 Chairman)
                                                  Esso Deutschland GmbH
                                                  ExxonMobil C.E. Holding GmbH
                                                  Hamburgische Staatsoper GmbH

Dr. jur. Heiner Hasford     Member       2007    Supervisory Board:
                                                 1
Former Executive Board                            D.A.S. Deutscher Automobil Schutz Allge-
member of Münchener                               meine Rechtsschutz-Versicherungs-AG
Rückversicherungs-                                ERGO Versicherungsgruppe AG
Gesellschaft AG                                   Europäische Reiseversicherung AG (Chairman)
                                                  Hamburg-Mannheimer Sachversicherungs-AG
                                                  Nürnberger Beteiligungs-AG
                                                  VICTORIA Versicherung AG

Prof. Dr.rer.pol. Renate    Member       2002    Supervisory Board:
                                                 1
Köcher                                            Allianz SE
General Manager of the                            BMW AG
Institut für Demoskopie                           Infineon Technologies AG
Allensbach

Dr. jur. Thomas Kremer      Member       2007    Supervisory Board:
                                                 1
Chief Legal Counsel of                            Howaltswerke-Deutsche Werft GmbH
                                                 4
ThyssenKrupp AG                                   ThyssenKrupp Italia S.p.A.




                                                                                              12
        Name/             Position   Year        Supervisory Board/Memberships in Other
      Profession                      of                   Supervisory Bodies
                                     First
                                     Appoi
                                      nt-
                                     ment:
Dipl.-Kfm. Stefan W.      Member     2007    Committees:
Ropers                                       Audit Committee
Board of Management
member of Bayerische                         Supervisory Board:
                                             1
Landesbank                                    KG Allgemeine Leasing GmbH & Co. KG
                                              (Deputy Chairman)
                                             2
                                              BayernInvest Kapitalanlagegesellschaft mbH
                                              ((Chairman)
                                              BayernLB Corporate Advisors (Deputy Chairman)
                                              BayernLB Equity Management GmbH (Deputy
                                             Chairman)
Dr.-Ing. E.h. Rudolf      Member     2005    Supervisory Board:
                                             1
Rupprecht                                     Bayerische Staatsforsten AöR
Former CEO of MAN                             Bilfinger & Berger AG
AG                                            Demag Cranes AG
                                              Salzgitter AG

Stephan Schaller          Member     2007    Supervisory Board:
                                             1
Chief Executive Officer                       SCHOTT AG
of Volkswagen AG                              TÜV NORD AG
                                             4
Commercial Vehicles                           Volkswagen Poznan Sp.z.o.o. (Chairman)

Dr.-Ing. Ekkehard D.       Deputy    1997    Committees:
Schulz                    Chairman           Executive Personnel Committee
CEO of ThyssenKrupp                          Mediation Committee
AG                                           Standing Committee

                                             Supervisory Board:
                                             1
                                              AXA Konzern AG
                                              Bayer AG
                                              RWE AG
                                             2
                                              ThyssenKrupp Services AG (Chairman)
                                              ThyssenKrupp Steel AG (Chairman)
                                              ThyssenKrupp Steel AG (Chairman)

Rupert Stadler            Member     2007    Committees:
CEO of AUDI AG                               Audit Committee (Chairman)

                                             Supervisory Board:
                                             4
                                              Automobili Lamborghini Holding S.p.A. (Chairman)
                                              VOLKSWAGEN GROUP ITALIA S.P.A,
                                             (Chairman)

Detlef Dirks              Member     2002    None
Chairman of the Works
Council of MAN Diesel
SE




                                                                                        13
        Name/             Position   Year       Supervisory Board/Memberships in Other
      Profession                      of                  Supervisory Bodies
                                     First
                                     Appoi
                                      nt-
                                     ment:
Jürgen Dorn               Member     2002    Committees:
Chairman of the Group                        Executive Personnel Committee
Works Council of MAN                         Mediation Committee
AG, General Works                            Standing Committee
Council Chairman of                          Audit Committee
MAN Nutzfahrzeuge AG
and Chairman of the                          Supervisory Board:
                                             1
European Works                                MAN Nutzfahrzeuge AG
Council

Jürgen Hahn               Member     2001    Supervisory Board:
                                             1
Chairman of the Works                         MAN Ferrostaal AG
Council of MAN
Ferrostaal AG

Gerhard Kreutzer          Member     2009    None
General Works Council
Chairman of MAN
Turbo AG




Wilfrid Loos              Member     2006    Supervisory Board:
                                             1
General Works Council                         MAN Truck & Bus Deutschland GmbH (Deputy
Chairman of MAN Truck                        Chairman)
& Bus Deutschland
GmbH

Nicola Lopopolo           Member     1998    None
Chairman of the Works
Council of RENK AG

Dr.-Ing. Uwe Hansult      Member     2007    None
Senior Vice President
BU Production of MAN
Diesel SE

Dr. phil. Klaus Heimann   Member     1997    Supervisory Board:
                                             1
Trade Union Secretary                         Krones AG
of IG Metall




                                                                                    14
        Name/              Position      Year       Supervisory Board/Memberships in Other
      Profession                          of                  Supervisory Bodies
                                         First
                                         Appoi
                                          nt-
                                         ment:
Jürgen Kerner               Member       2006    Supervisory Board:
                                                 1
First Delegate of IG                              EADS Deutschland GmbH
Metall Augsburg                                   Eurocopter Deutschland GmbH
                                                  KUKA AG
                                                  MAN Diesel SE
                                                  manroland AG

Thomas Otto                 (Deputy      2004    Committees:
Trade Union Secretary      Chairman)             Audit Committee
of IG Metall                 (since              Mediation Committee
                          February 18,           Standing Committee
                             2009)               Executive Personnel Committee

                                                 Supervisory Board:
                                                 1
                                                  MAN Nutzfahrzeuge AG
                                                  MAN Truck & Bus Deutschland GmbH
                                                  MAN Turbo AG


1
  Membership of supervisory boards of German companies
2
  Membership of supervisory boards of German companies, Group appointments
3
  Membership of comparable German or foreign governing bodies
4
  Membership of comparable German or foreign governing bodies, Group appointments

The members of the Supervisory Board can be reached at the business address of MAN AG,
Landsberger Str. 110, 80339 Munich, Germany.

6.      Corporate Governance

As a listed German Stock Corporation, MAN AG is subject to the provisions of the German
Corporate Governance Code and complies with the recommendations of this Code (see the
December 2008 Declaration of Conformity in accordance with section 161 of the AktG which
is available on the MAN website at www.man.eu/agm).



7.      Codetermination

The Supervisory Board of MAN AG comprises an equal number of stockholder and
employee representatives in accordance with the MitbestG 1976. Of the ten employee
representatives elected, only the employees of the MAN Group employed in Germany
presently have active and passive voting rights in accordance with the 1976 MitbestG.
Furthermore, other German companies in the MAN Group have additional bodies in which
employees have codetermination rights.

Companies of the MAN Group in other member states of the European Union (EU) and the
treaty states of the European Economic Area (EEA) have additional employee representative
bodies in accordance with national provisions. The Works Council structure of MAN AG
follows a two-tier system with a Works Council and a Group Works Council. At European
level, the employee representative bodies of the MAN Group companies are organized in the
European Works Council.

                                                                                       15
III.   Principal aspects of the change of legal form

MAN AG’s change of legal form to an SE will reflect its image as a European company with
international business activities since the name of the Group will emphasize its European
focus. The change of legal form to an SE underscores the business activities of MAN AG,
which reach beyond the borders of Germany, as well as the significance of the European
market for MAN AG.

The change of legal form to an SE will allow the European workforce to be part of employee
involvement in the Company. Under the 1976 MitbestG, only employees in Germany have
active and passive voting rights. However, in accordance with the provisions of the
Agreement regarding the involvement of employees in the SE (hereinafter referred to as the
Agreement with the Special Negotiating Body) which was concluded on February 18,
2009 between the Executive Board and the Special Negotiating Body, the employee side of
the Supervisory Board will also comprise representatives of employees from other member
states of the EU or the treaty states of the EEA. The regulations of the Agreement with the
Special Negotiating Body will also guarantee the appropriate representation of the MAN
Group’s European employees in the Supervisory Board of MAN SE, which will promote the
integration of the subgroups and the employees in the various member states of the EU or
EEA in the MAN Group.

Furthermore, the proposed change of legal form to an SE contributes to the future-oriented
development and strengthening of the corporate governance practiced at MAN AG.
Restricting the number of Supervisory Board members to 16 while maintaining an equal
number of stockholder and employee representatives plays a major role in this respect.
Decision-making and communication processes within the Supervisory Board will be
simplified, accelerated and thus optimized.

Finally, the SE affords the fundamental possibility of relocating the Company’s headquarters
to another EU member state (article 8 of the SE Council Regulation). However there are no
plans to do so.


IV.    Costs incurred in the change of legal form

Based on the current estimates of MAN AG’s Executive Board, the overall cost of changing
MAN AG’s legal form will amount to €3,000,000. This estimated figure primarily includes the
costs for preparatory measures, the costs of the audit for the change of form carried out by
the court-appointed auditor for this purpose, the cost of registration, the costs of any external
consultants, the costs for the required publications, the costs incurred in implementing the
procedure for the involvement of employees as well as the costs of changing the stock
exchange listing of MAN AG shares to MAN SE shares. Separate costs incurred in holding
the Annual General Meeting of MAN AG are not included in this estimate because the
change of legal form is to be resolved in an Annual General Meeting that would have been
held in any event.


V.     Comparison of the legal position of the stockholders of MAN AG and of
       MAN SE

Before presenting the Draft Terms of Conversion (see below, section VI.1. of this report), the
Articles of Incorporation (see below, section VI.2. of this report) and the effects of the change
of legal form (see below, section VII. of this report), this report first aims to compare the
principal statutory provisions and stipulations in the Articles of Incorporation/Bylaws currently
applicable to MAN AG with the provisions applicable to the future MAN SE below. The
                                                                                              16
comparison focuses on the rights of the stockholders and the corporate governance
structure.

1.     Introduction

An SE is a supranational legal form founded on European law. An SE is a company in the
form of a European stock corporation (article 1 (1) of the SE Council Regulation). The legal
relations of MAN SE, the rights of its stockholders and its corporate governance are based
on (i) the regulations of the SE Council Regulation, which has direct legal force in all member
states of the EU and EEA, (ii) the SEAG, (iii) the Articles of Incorporation of the future MAN
SE as well as (iv) the Agreement with the Special Negotiating Body stipulating that the
provisions of the 1976 MitbestG are applicable unless otherwise specified and (v) the
German regulations for stock corporations. Because the SE will be treated as a stock
corporation, all commercial and tax laws as well as capital market regulations that currently
apply to MAN AG will continue to apply to MAN SE.

2.     General provisions

2.1.   Legal entity

The SE is a legal entity and is thus subject to rights and duties (article 1 (3) of the SE Council
Regulation). Like MAN AG, it is a legal entity.

2.2.   Share capital, Authorized Capital 2005, Contingent Capital 2005

The capital of an SE is denominated in euros and may not be less than €120,000 (article 4
(1) and (2) of the SE Council Regulation). The minimum capital of an SE thus exceeds the
statutory minimum capital of €50,000 required for a German stock corporation (section 7 of
the AktG). In accordance with the reference to member state stock corporation law regarding
specific matters in article 5 of the SE Council Regulation, the national provisions of stock
corporation law apply in this regard to the stock of an SE. The shares of an SE can thus be
either par-value shares with minimum nominal amounts or no-par value shares with a
proportionate amount of the share capital as the minimum amount. The shares of an SE may
also be made out to the bearer or may be registered shares. As is the case with a German
stock corporation, the transferability of registered shares may be limited. Shares of different
classes may be issued, particularly nonvoting preferred stock.

Neither the share capital of MAN AG nor the form of its shares will change in any way as a
result of the change in legal form. As is currently the case at MAN AG, the share capital of
MAN SE will amount to €376,422,400 and be divided into 147,040,000 no-par value bearer
shares. Of these, 140,974,250 will be common stock and 6,065,650 will be nonvoting
preferred stock (article 4 (1) and (2) of the Articles of Incorporation of MAN SE).

In accordance with article 4 (3) of the Articles of Incorporation of MAN AG, the Executive
Board is authorized to increase the share capital, with the consent of the Supervisory Board,
by up to €188,211,200 by issuing bearer shares of common stock on one or more occasions
against cash contributions or noncash contributions in the period up to June 2, 2010
(Authorized Capital 2005).

Insofar as the Annual General Meeting of MAN AG, to be held on April 3, 2009, resolves to
authorize the Executive Board of MAN AG, with the consent of the Supervisory Board, to
disapply the stockholders’ subscription rights for up to €4,000,000 of Authorized Capital 2005
and to issue new shares against cash contributions to executives with managerial
responsibility (managers) of the Company and/or affiliated Group companies in accordance
with the provisions of section 204 (3) of the AktG (for the complete text of the proposal to
extend authorization for Authorized Capital 2005, see item 6 of the Invitation to the Annual
                                                                                               17
General Meeting on April 3, 2009), this extension of authorization for Authorized Capital 2005
shall continue without interruption for the Executive Board of the future MAN SE. Please refer
to the report of the Executive Board of MAN AG concerning item 6 of the agenda of the
Invitation to the Annual General Meeting on April 3, 2009.

If the Annual General Meeting rejects the proposal found under item 6 of the Invitation to the
Annual General Meeting on April 3, 2009, the authorization for Authorized Capital 2005 will
not be extended for the SE and the Executive Board will register the Articles of Incorporation
of MAN SE in the commercial register without sentences 3 and 4 of article 4 (4) of MAN SE’s
Articles of Incorporation. In addition, the Executive Board shall be instructed to apply for
registration of sentences 3 and 4 of article 4 (4) of the Articles of Incorporation of MAN SE in
the commercial register only after the resolution found under item 6 of the Invitation to the
Annual General Meeting on April 3, 2009 has been registered in the relevant commercial
register for MAN AG, or after the validity of this resolution has been determined.

In addition, in accordance with article 4 (4) of the Articles of Incorporation/Bylaws of MAN
AG, the share capital has been contingently increased by up to €76,800,000, composed of
up to 30,000,000 bearer shares of common stock (Contingent Capital 2005).

Authorized Capital 2005 and Contingent Capital 2005 of MAN AG will be continued in the
Articles of Incorporation of MAN SE (cf. article 4 (4) and (5) of the Articles of Incorporation of
MAN SE and the explanations to these in § 3.1 and § 3.6 of the Draft Terms of Conversion
as well as section VI. 2.4 of this report which includes explanations concerning the Articles of
Incorporation).

Notwithstanding the above, the following provisions will apply:

Should MAN AG make use of Authorized Capital 2005 and/or Contingent Capital 2005
before its change of legal form to an SE, the respective authorization for increasing the share
capital in accordance with article 4 (4) and (5) of the Articles of Incorporation of MAN SE will
be reduced and the share capital figure as well as the figures concerning the number of
shares found in article 4 (1) and (3) of the Articles of Incorporation of MAN SE will be
increased accordingly. Any capitalization measures resolved by the Annual General Meeting
before the point in time of conversion shall apply equally to MAN SE. The same shall also
apply in the case that the Company buys back its own stock.

Finally, the statement issued on May 24, 2005 by the Executive Board of MAN in connection
with item 5 of the agenda found in the Invitation to the Annual General Meeting of MAN AG
on June 3, 2005 concerning the resolution of the Executive Board on the utilization of
Authorized Capital 2005 (see above, section II. 4.2 of this report) will apply unchanged to the
Executive Board of MAN SE.

2.3.   Headquarters of the Company, option of cross-border relocation

The headquarters of a German stock corporation is stipulated in its articles of incorporation
(section 5 (1) of the AktG). This also applies to an SE (article 7 of the SE Council Regulation
in conjunction with section 2 of the SEAG). The registered office of an SE must be located
within the EU, and in the same member state as its headquarters (article 7 sentence 1 of the
SE Council Regulation and section 2 of the SEAG). The headquarters of MAN SE will be in
Munich, Germany.

As is the case for German stock corporations, the headquarters of an SE can only be
changed by amending its articles of incorporation (cf. sections 179 et seq. and section 45 of
the AktG for German stock corporations, and article 8 of the SE Council Regulation in
conjunction with article 9 (1) c) (ii) of the SE Council Regulation in conjunction with
sections 179 et seq. of the AktG for SEs). For a German stock corporation, however, the
                                                                                               18
prevailing opinion in legal text is that a resolution passed by the Annual General Meeting to
transfer the headquarters to another country constitutes a dissolution resolution as defined in
section 262 (1) no. 2 of the AktG. In contrast, an SE may transfer its headquarters across
borders within the EU without dissolution (article 8 of the SE Council Regulation). In this
case, adequate cash compensation must be offered to stockholders who oppose the
relocation resolution and this opposition is made orally on the record of the meeting (section
12 (1) of the SEAG).

2.4.   Notification obligations

Pursuant to article 9 (1) c) (ii) of the SE Council Regulation, the provisions of the WpHG will
also apply to the future MAN SE. This applies in particular to the regulations concerning
insider trading (sections 12 et seq. of the WpHG) as well as notification obligations in respect
to voting rights (sections 21 et seq. of the WpHG). As was the case for MAN AG,
stockholders’ rights may also be suspended in the future SE if notification obligations
pursuant to section 28 of the WpHG are not complied with. The change of legal form thus
leads to no changes for the stockholders of MAN AG.

3.     Formation of the SE

The formation of an SE is governed by the law applicable to stock corporations of the state in
which the SE establishes its headquarters, subject to the provisions of the SE Council
Regulation (article 15 (1) of the SE Council Regulation). The formation provisions applicable
to German stock corporations thus apply to the formation of an SE. In the case of a change
of legal form, the founding party is the Company that changes its form, i.e. in this case, MAN
AG. However, in the case of a change of legal form from a German stock corporation to an
SE, the formation regulations under stock corporation law (determination of the Articles of
Incorporation, expenses for formation, formation report, internal and external formation
audits, registration of the Company, legal verification by the court, entry in the commercial
register etc) are modified or replaced by the provisions of article 37 of the SE Council
Regulation as well as through application of the legal premise of section 75 (2) of the
Umwandlungsgesetz (UmwG – German Reorganization and Transformation Act). The
details of the formation procedure in conjunction with the change of legal form are discussed
below in section V. 2. of this report.

4.     Capital maintenance, equal treatment of stockholders

According to the reference to member state stock corporation law regarding specific matters
under article 5 of the SE Council Regulation, the provisions of the AktG concerning capital
maintenance (sections 56 et seq. of the AktG) also apply to an SE. Accordingly, an SE is
prohibited from subscribing for its own shares (section 46 of the AktG) or repaying
contributions to stockholders (section 57 of the AktG). In addition, the provisions under
German stock corporation law governing the appropriation of profit for the year and the
recognition of (section 58 (1) to (3) of the AktG) as well as the distribution of profit (section 58
(4) of the AktG) also apply to an SE. As is the case with a German stock corporation, partial
payments of the net retained profits may only be paid in advance subject to strict
requirements (article 5 of the SE Council Regulation in conjunction with section 59 of the
AktG). In accordance with section 60 (1) of the AktG, the interests held by stockholders in the
share capital determine the percentage of the SE’s profits to which they are entitled.
However, a company’s articles of incorporation may provide for another method of
distribution (section 60 (3) of the AktG). As in the case of German stock corporations, an SE
can only acquire its own shares under the terms of sections 71 to 71d of the AktG. Therefore
MAN AG’s change of legal form to an SE will not result in any changes regarding capital
maintenance.


                                                                                                 19
In addition, the change of legal form does not result in any differences between German
stock corporations and SEs with regard to the principle of equal treatment of stockholders
under German stock corporation law. In accordance with the reference to member state
stock corporation law in its entirety found in article 9 (1) c) (ii) of the SE Council Regulation in
conjunction with section 53 of the AktG, the principle of equal treatment also applies to an SE
headquartered in Germany.

5.     Governing principles of the SE, bodies and corporate governance

A major difference between the SE and German stock corporation forms is that the SE
allows for more flexible corporate governance structures for the management and control of
the Company. With regard to the constitution of a stock corporation, the law only provides for
a two-tier system consisting of an Executive Board as the managing body (sections 76 et
seq. of the AktG) and a Supervisory Board as a supervisory body (sections 95 et seq. of the
AktG). In contrast, pursuant to the SE Council Regulation and the SEAG, the one-tier system
with only a single administrative body is also permissible in addition to the two-tier system
(article 39 et seq. of the SE Council Regulation in conjunction with sections 15 et seq. of the
SEAG). In the one-tier system, the administrative body that manages the Company also
determines the principles of its business as well as the implementation of these principles
(article 43 et seq. of the SE Council Regulation in conjunction with section 20 et seq. of the
SEAG).

However, as is already the case with MAN AG, the Articles of Incorporation of MAN SE
provide for a two-tier system with an Executive Board and Supervisory Board (articles 5 and
7 of the Articles of Incorporation of MAN SE). Therefore, the change of legal form will not
lead to any fundamental change in the corporate governance of the Company. Due to the
statutory provisions that apply to an SE and taking into consideration the Agreement with the
Special Negotiating Body regarding the number of employee representatives and their
composition in the SE Supervisory Board, the change of legal form will lead to changes for
the Executive Board and the Supervisory Board. These changes are discussed in more detail
below.

5.1.   Executive Board

a)     Management of the Company

In regard to the management of the future MAN SE, the change of legal form to an SE will
not result in any changes. Pursuant to article 39 (1) sentence 1 of the SE Council Regulation,
the management body (i.e. the Executive Board of MAN SE) conducts the business of the
SE on its own responsibility. This regulation corresponds to the content of section 76 (1) of
the AktG, according to which the Executive Board must manage the Company on its own
responsibility.

b)     Composition

According to article 5 (1) of the Articles of Incorporation of MAN SE, the Executive Board of
MAN SE must consist of at least two persons. In other respects, the Supervisory Board
determines the number of Executive Board members of the SE (article 5 (1) sentence 2 of
the Articles of Incorporation of MAN SE). The Agreement with the Special Negotiating Body
also provides for the application of the 1976 MitbestG, unless otherwise regulated in the
Agreement. Accordingly, an Arbeitsdirektor (Executive Board member responsible for
employee relations) must also be appointed in the MAN SE Executive Board. However if the
standard statutory rules concerning involvement of employees in the SE should come into
effect in the case of termination of the Agreement with the Special Negotiating Body (cf. §
7.17 and § 7.18 of the Draft Terms of Conversion), one member of the Executive Board

                                                                                                 20
would have to be designated with responsibility for labor and social affairs (section 16
sentence 2 of the SEAG in conjunction with section 38 (2) sentence 2 of the SEBG).


c)     Management of the business

Unless otherwise stipulated in articles of Incorporation or rules of procedure, the principle of
joint management applies to both SEs and German stock corporations. In addition, the
principle applicable under German stock corporation law according to which differences of
opinion in the Executive Board cannot be decided by one or more members of the Executive
Board against the majority of the members of the Executive Board also applies to both types
of companies (article 9 (1) c) (ii) of the SE Council Regulation in conjunction with section 77
(1) sentence 2 of the AktG). However, in the SE it is permissible to grant a veto right to a
member of the Executive Board who has been appointed as the Chairman of the Executive
Board. The Articles of Incorporation of MAN SE do not provide for such a veto right by the
Chairman of the Executive Board. Instead, the Chairman of the MAN SE Executive Board will
have the casting vote in the event of a tie (article 50 (2) sentence 1 of the SE Council
Regulation). The mechanisms used by the Executive Board of MAN AG to reach decisions
and adopt resolutions will continue unchanged in MAN SE.

d)     Representation of the Company

Neither the SE Council Regulation nor the SEAG contain specific provisions regarding
representation of the company. Instead, the provisions of the AktG and the rules outlined in
MAN SE’s Articles of Incorporation that are permissible under the Act will apply by virtue of
the reference to member state stock corporation law in its entirety under article 9 (1) c) (ii)
and (iii) of the SE Council Regulation. As already stipulated in the Articles of
Incorporation/Bylaws of MAN AG, article 6 (1) of MAN SE’s Articles of Incorporation also
stipulates that the Company is represented by two Executive Board members or by one
Executive Board member together with a Prokurist (authorized signatory). Pursuant to article
6 (2) of the Articles of Incorporation of MAN SE, the Supervisory Board – as is the case with
MAN AG – may confer power of representation upon any Executive Board member, enabling
him to also represent the Company alone. In regard to representation of the Company, the
change of legal form thus results in no changes.

e)     Appointment and dismissal of the Executive Board

Pursuant to section 84 (1) sentence 1 of the AktG, members of the Executive Board of a
German stock corporation are appointed by the Supervisory Board for a maximum term of
five years; reappointments or extensions to the term of office are permissible, in each case
for a maximum of five years. The appointment of an Executive Board member and the
appointment as Chairman of the Executive Board may be revoked by the Supervisory Board
for good cause (section 84 (3) of the AktG).

In contrast, article 46 (1) of the SE Council Regulation provides that the members of the
Executive Board of an SE be appointed for a term of office that is to be stipulated in the
Articles of Incorporation, but which may not exceed six years. Subject to any restrictions to
the contrary in the Articles of Incorporation, reappointments are permissible (article 46 (2) of
the SE Council Directive). The Articles of Incorporation of MAN SE stipulate in article 5 (1)
sentence 3 that members of the Executive Board will be appointed for terms of office
exceeding no more than five years. Members may be reappointed, in each case for up to five
years (article 5 (1) sentence 4 of the Articles of Incorporation of MAN SE). Thus the change
of legal form will not affect the terms of office of the members on the MAN SE Executive
Board.


                                                                                             21
f)     Principles for the remuneration of Executive Board members, prohibition of
       competition and the granting of loans to Executive Board members

By virtue of the reference to member state stock corporation law in its entirety under article 9
(1) c) (ii) of the SE Council Regulation, the principles for the remuneration of Executive Board
members, the prohibition of competition for Executive Board members and the granting of
loans to Executive Board members (sections 87 to 89 of the AktG) also apply to the SE, so
that no changes will take place in this respect either.



g)     Obligations of the Executive Board in the event of loss, overindebtedness and
       insolvency

By virtue of the reference to member state stock corporation law in its entirety under article 9
(1) c) (ii) of the SE Council Regulation, the Executive Board of MAN SE must also comply
with the obligations of the Executive Board stipulated in section 92 of the AktG concerning
loss, overindebtedness and insolvency.

h)     Duty of care and liability

Pursuant to article 51 of the SE Council Directive, the liability of an SE’s management body
members is governed by the legal provisions applicable to a German stock corporation in the
member state where the SE's headquarters are located. According to these provisions,
members are responsible for the loss sustained by the SE following any breach on their part
of legal obligations, obligations in accordance with articles of incorporation or any other
obligations inherent in their duties. Through this reference to German stock corporation law,
the requirements of section 93 of the AktG concerning the duty of care that a prudent and
diligent business person would exercise in handling such affairs also apply to the Executive
Board of MAN SE. Here, in particular, the "business judgment rule" (section 93 (1) sentence
2 of the AktG) and the regulations concerning the exclusion of liability for damages pursuant
to section 93 (4) of the AktG apply. According to article 49 of the SE Council Regulation,
members of the Executive Board of the SE may not divulge any information which they have
and which might be prejudicial to the company's interests – even after they have ceased to
hold office. This does not apply in cases where such disclosure is required or permitted
under national law provisions applicable to stock corporations or which is in the public
interest. Although the continuation of the duty to withhold information after cessation of the
term of office is not expressly stipulated in German stock corporation law, a regulation to this
effect under article 49 of the SE Council Regulation is generally recognized in stock
corporation law. Thus, the change of legal form does not lead to any changes in this regard.

i)     Reports to the Supervisory Board

In a German stock corporation, pursuant to section 90 (1) of the AktG, the Executive Board
must report to the Supervisory Board on (i) the intended business policy and other
fundamental issues of business planning (in particular, financial, investment and HR
planning). Any deviations in actual development from objectives previously reported must be
explained and the reasons specified, (ii) the profitability of the Company, in particular the
return on equity, (iii) the course of business, particularly the Company’s revenue and position
and (iv) transactions which may be of significant importance for the profitability or liquidity of
the Company. If the company is a parent company as defined by section 92 (1) and (2) of the
HGB, the report must include subsidiaries and joint ventures as defined by section 310 (1) of
the HGB (section 90 (1) sentence 2 of the AktG). In addition, pursuant to section 90 (1)
sentence 3 of the AktG, reports must be made to the Chairman of the Supervisory Board in
the case of other significant events. A business matter relating to an affiliated company that
becomes known to the Executive Board and could have a substantial effect on the
                                                                                               22
Company’s position must also be considered a significant event. The above-mentioned
reports to the Supervisory Board must be made at the stipulated time-intervals (section 90
(2) sentence 2 of the AktG).

In addition to the reporting obligations described above, the Supervisory Board may, at any
time, request a report about matters relating to the Company, about its legal and business
relationships with affiliated companies as well as business matters relating to such
companies which could have a substantial effect on the Company’s position. An individual
member may also request a report, but only to be addressed to the Supervisory Board
(section 90 (3) of the AktG).

The reports must present a true and fair view of the situation concerned pursuant to section
90 (4) of the AktG. They are to be made as soon as possible and with the exception of the
report made pursuant to section 90 (1) sentence 3 of the AktG, must generally be made in
text form, pursuant to section 90 (4) of the AktG). Every Supervisory Board member is
entitled to take note of the content of the reports (section 90 (5) sentence 1 of the AktG).

In an SE, the obligation of the management body to report to the supervisory body is
governed by article 41 of the SE Council Regulation. Accordingly, the SE Executive Board
must report to the SE Supervisory Board at least every three months on the course of the
SE's business and its foreseeable development (article 41 (1) of the SE Council Regulation).
In addition to the regular reports, the SE Executive Board must inform the SE Supervisory
Board in good time of any events that are likely to have a noticeable effect on the SE (article
41 (2) of the SE Council Regulation). Irrespective of this, the SE Supervisory Board may
require from the SE Executive Board information of any kind that is necessary in accordance
with article 40 (1) of the SE Council Regulation to exercise its supervisory tasks pursuant to
article 41 (3) sentence 1 of the SE Council Regulation. As is the case with German stock
corporations, any member of the Supervisory Board may only require such information to be
addressed to the Supervisory Board (article 41 (3) of the SE Council Regulation in
conjunction with article 18 of the SEAG). The Supervisory Board of the SE may undertake or
arrange for any checks necessary for the performance of its duties (article 41 (4) of the SE
Council Regulation). Each member of the Supervisory Board is entitled to examine all
information submitted to the Board (article 41 (5) of the SE Council Regulation).

Even if section 90 of the AktG appears to contain more specific and detailed reporting
obligations for the Executive Board than article 41 of the SE Council Regulation, there are, in
effect, no substantial changes in terms of content resulting from the conversion of MAN AG
to an SE with regard to the reporting obligations of the Executive Board vis-á-vis the
Supervisory Board. By virtue of the SE Council Regulation provisions in conjunction with the
AktG provisions, which additionally take effect pursuant to the reference to member state
stock corporation law in its entirety found in article 9 (1) c) (ii) of the SE Council Regulation,
the future Executive Board of MAN SE will have to report to the Supervisory Board of MAN
SE at the least to the same extent as the Executive Board of MAN AG has to report to the
Supervisory Board of MAN AG.

j)     Utilization of influence on the Company

Pursuant to section 117 (1) of the AktG, anyone who intentionally and illegally uses his/her
influence to cause a member of the Executive Board or the Supervisory Board, a Prokurist
(authorized signatory) or holders of Handlungsvollmacht (commercial power of attorney) to
act to the detriment of the Company or its stockholders, is liable for damages caused. An SE
is also subject to the same liability due to the reference to member state stock corporation
law in its entirety found in article 9 (1) c) (ii) of the SE Council Regulation. The liability of
Executive Board members who engage in detrimental conduct thus exists in both legal forms
(section 117 (2) of the AktG and article 51 of the SE Council Regulation.

                                                                                               23
5.2.   Supervisory Board

MAN SE will have – as is the case with MAN AG – a two-tier management system. As with
MAN AG, the Supervisory Board of MAN SE will monitor the conduct of business by the
Executive Board. The tasks and responsibilities of the Supervisory Board of MAN SE
essentially correspond to those of the Supervisory Board of MAN AG. There are, however,
some differences in detail, especially in regard to the inner composition of the board as well
as to the corresponding stipulations of the Agreement.

a)     Size and composition of the Supervisory Board

The size of the Supervisory Board of a company subject to the 1976 MitbestG depends on
the number of employees in Germany (section 95 sentence 5 of the AktG in conjunction with
section 7 of the 1976 MitbestG). Accordingly, the Supervisory Board of a company which
usually employs more than 20,000 employees within Germany – as is the case with MAN AG
– comprises a total of twenty members, of whom ten represent the stockholders and ten
represent the employees.

In an SE, the number of Supervisory Board members or the stipulations according to which
such number is determined, are laid down by the Articles of Incorporation of the Company
(article 40 (3) of the SE Council Regulation). However, for SEs that are registered in their
sovereign territory, the member states can determine the number of members of supervisory
bodies or their maximum and/or minimum number (article 40 (3) sentence 2 of the SE
Council Regulation). Pursuant to section 17 (1) sentence 1 and 2 of the SEAG, the
Supervisory Board of an SE whose headquarters are in Germany must consist of at least
three members. The Articles of Incorporation can, however, set a higher number that may
not exceed 21 members.

Concerning the number of Supervisory Board members, the prevailing opinion in legal text is
that the corresponding regulations in the Agreement with the Special Negotiating Body take
precedence over the member state ruling affected by section 17 (1) sentence 3 of the SEAG,
according to which the number of members of the Supervisory Board must be divisible by
three (due to the hierarchy of standards found in article 9 (1) of the SE Council Regulation
and section 17 (1) sentence 3 of the SEAG). In this case, the body responsible for the
Articles of Incorporation (i.e. the Annual General Meeting of MAN AG) is prevented from
defining another number of Supervisory Board members in the Articles of Incorporation of
MAN SE. According to article 12 (4) sentence 1 of the SE Council Regulation, the Articles of
Incorporation of the SE may at no time contradict the Agreement negotiated with the Special
Negotiating Body.

In the case of the change of legal form of a company to an SE, it must also be considered
that in respect of all components of employee involvement, at least the same degree of
involvement must be granted that existed at the company which is to be converted into an
SE (section 21 (6) of the SEBG). However, this only refers to the quality of codetermination,
i.e. for composition on a parity basis, but not to the absolute number of members on the
Supervisory Board, because the stipulation of this number is made by the corporate body
stipulating the Articles of Incorporation, in this case the Annual General Meeting, taking into
account the corresponding requirements concluded in the Agreement with the Special
Negotiating Body. Accordingly, the Supervisory Board of MAN SE must have an equal
number of stockholder and employee representatives, as is currently the case with the
Supervisory Board of MAN AG.

Under consideration of these provisions, especially the corresponding provisions of the
Agreement with the Special Negotiating Body, the Articles of Incorporation of MAN SE
stipulate a Supervisory Board consisting of 16 members, of which half of these
representatives are employees (article 7 (1) of the Articles of Incorporation of MAN SE). The
                                                                                            24
details of this codetermination are laid down in the Agreement with the Special Negotiating
Body (cf. sections 15-16 of the Agreement with the Special Negotiating Body and § 7.10 to §
7.12 of the Draft Terms of Conversion).

b)     Status proceedings regarding the composition of the Supervisory Board

By virtue of the reference to member state stock corporation law in its entirety under article 9
(1) c) (ii) of the SE Council Regulation, the provisions of the AktG regarding the “status
proceedings” (sections 97, 98, 99 of the AktG) which apply in cases where it is in dispute or
uncertain whether the Supervisory Board is composed in accordance with applicable
statutory provisions also apply to a German SE. Indirectly, this also ensues from section 17
(3) of the SEAG, which refers to sections 98, 99 and 104 of the AktG and which modifies this
regulation insofar as also the SE Works Council is authorized to initiate status proceedings.

c)     Personal requirements for Supervisory Board members

Pursuant to section 100 (1) of the AktG, members of the Supervisory Board of a German
stock corporation can only be natural persons of full legal capacity. This applies equally to an
SE (article 47 (1) of the SE Council Regulation in conjunction with section 100 (1) sentence 1
of the AktG). Although article 47 (1) of the SE Council Regulation fundamentally foresees
membership of a company or other legal entity in a Supervisory Board, this only applies in
cases in which the stock corporation regulations of the state in which the SE has its
headquarters do not stipulate otherwise. Accordingly, an SE with headquarters in Germany is
not permitted to have legal entities as members on its Supervisory Board. Besides, no
person can be either a member of a Supervisory Board or a representative thereof, who,
pursuant to the law of the member state where the SE's headquarters are situated, (i) is
disqualified from serving on a management, supervisory or administrative body of a stock
corporation governed by the law of a member state or (ii) is disqualified due to a court or
administrative ruling from serving on a management, supervisory or administrative body of a
stock corporation governed by the law of a member state (article 47 (2) sentence 2 of the SE
Council Regulation). By making reference to section 100 (2) of the AktG, congruity is
achieved with the personal requirements with regard to obstacles under the terms of section
100 (2) of the AktG. This means that in MAN SE, the same personal obstacles that apply to
membership on the Supervisory Board apply as to MAN AG. No person may be appointed to
the Supervisory Board, who (i) is a member on the supervisory boards of over ten
commercial companies that must establish supervisory boards (ii) who is a legal
representative of a controlled enterprise or (iii) who is a legal representative of another
corporation with an Executive Board member of the Company on their Supervisory Board.

d)     Appointment of the Supervisory Board

In a German stock corporation subject to the provisions of the 1976 MitbestG, the
stockholder representatives on the Supervisory Board are elected by the Annual General
Meeting (section 101 (1) of the AktG) and the employee representatives on the Supervisory
Board are elected by the employees in Germany (sections 10 et seq. of the 1976 MitbestG).

In contrast, the members of the Supervisory Board of an SE are appointed by the Annual
General Meeting (article 40 (2) sentence 1 of the SE Council Regulation). This applies to
both the stockholder representatives and the employee representatives on the Supervisory
Board unless a concluded agreement concerning involvement of employees in the SE
contains a provision that stipulates otherwise (article 40 (2) sentence 3 of the SE Council
Regulation) or if the standard statutory rules concerning involvement of employees in the SE
can be applied (section 36 (4) of the SEBG).

In MAN SE, the eight stockholder representatives on the Supervisory Board of MAN SE will
be elected by the Annual General Meeting (article 7 (2) sentence 1 of the Articles of
                                                                                             25
Incorporation of MAN SE). In regard to the appointment of employee representatives to the
Supervisory Board of MAN SE, the change of legal form will lead to changes in the election
procedures for employee representatives to the Supervisory Board that have applied until
now in accordance with the provisions of the 1976 MitbestG. Pursuant to article 7 (2)
sentence 2 of the Articles of Incorporation of MAN SE in conjunction with section 16 of the
Agreement with the Special Negotiating Body, employee representatives to the Supervisory
Board will in the future be elected by the SE Works Council and appointed to the Supervisory
Board of MAN SE. Of the eight employee representatives on the Supervisory Board of MAN
SE, six seats are filled with internal employee representatives and two are filled by union
employee representatives (section 15.2 of the Agreement). Concerning the right to propose
and nominate the six internal employee representatives and the two union employee
representatives to the Supervisory Board of MAN SE, please see the corresponding
regulations in sections 16.2 and 16.3 of the Agreement (see also § 7.10 to § 7.12 of the Draft
Terms of Conversion).

e)     Term of office

Pursuant to section 102 (1) of the AktG, members of the Supervisory Board of a stock
corporation can be appointed for a maximum term ending with the conclusion of the Annual
General Meeting resolving on the approval of the Supervisory Board’s actions for the fourth
fiscal year after the term of office commenced. The fiscal year in which the term of office
begins is not counted. In contrast, article 46 (1) of the SE Council Regulation foresees that
the members of the Supervisory Board of an SE be appointed for a term of office stipulated
in the Articles of Incorporation which may not exceed six years. Thus, compared to a
German stock corporation, longer terms of office are fundamentally possible for members of
an SE Supervisory Board.

Pursuant to article 7 (2) sentence 1 of the Articles of Incorporation of MAN SE, the term of
office for members of the MAN SE Supervisory Board will be 5 years. The period between
the close of one Annual General Meeting and the close of the next will be considered as one
year in office. This regulation corresponds to the content of the regulation based on section
102 (1) of the AktG that has applied to MAN AG. One special provision, however, applies to
the first MAN SE Supervisory Board. In accordance with article 7 (2) sentence 2 of MAN SE’s
Articles of Incorporation, the first Supervisory Board’s term of office will expire upon the end
of the Company’s second Annual General Meeting to take place after the entry of MAN SE in
the relevant commercial register at the Amtsgericht (Local Court) in Munich. For the eight
employee representatives on the Supervisory Board of MAN SE, section 16.6 of the
Agreement with the Special Negotiating Body foresees a corresponding stipulation. In
addition, the first eight employee representatives to the Supervisory Board of MAN SE will
not be elected by the SE Works Council and appointed to the Supervisory Board of MAN SE.
Pursuant to section 16.6 of the Agreement with the Special Negotiating Body, the persons
listed in Annex 16.6 of the Agreement with the Special Negotiating Body, as well as the
alternate members listed therein, will be appointed as employee representatives for the first
term of office of the Supervisory Board of MAN SE.

f)     Dismissal of Supervisory Board members

Pursuant to section 103 (1) of the AktG, the Annual General Meeting can dismiss supervisory
board members of a German stock corporation who it elected without having any obligations
to a particular nomination before the end of their term in office. Such a resolution must be
passed by the Annual General Meeting with a majority of at least three quarters of the votes
cast. The Articles of Incorporation may specify another majority and further requirements. In
addition, a court can also dismiss a Supervisory Board member for good cause (section 103
(3) of the AktG) at the Supervisory Board’s request. The Supervisory Board decides on
making such request with a simple majority. Employee representatives on the Supervisory
Board of a stock corporation may also be dismissed for good cause. They may also be
                                                                                             26
dismissed without good cause at the request of the respective appointers (employees,
leitende Angestellte (executives), unions or delegates) in accordance with section 23 of the
1976 MitbestG.

Neither the SE Council Regulation nor the SEAG contain specific provisions regarding the
dismissal of members of the Supervisory Board of an SE. Rather, by virtue of the reference
to member state stock corporation law in its entirety under article 9 (1) c) (ii) of the SE
Council Regulation, the provisions of the AktG apply. The change of legal form will not affect
the stockholder representatives on the Supervisory Board of MAN SE. They can also be
dismissed in MAN SE with a three-quarters majority of votes cast at the Annual General
Meeting (section 103 (1) of the AktG). For the employee representatives in the Supervisory
Board of an SE, in contrast, the provisions of section 23 of the 1976 MitbestG are no longer
applicable, but rather, the regulations on dismissal concluded in the Agreement concerning
the involvement of employees in the SE, or, if no Agreement is reached, the provisions of the
standard statutory rules of the SEBG.

In the Agreement with the Special Negotiating Body, no provision for the dismissal of
employee representatives on the SE Supervisory Board was made. Accordingly, the
provisions of section 37 (1) of the SEBG regarding the reference provision in section 1.2 of
the Agreement with the Special Negotiating Body apply in regard to dismissal of a German
employee representative. This means that the SE Works Council or its members are
authorized to apply for dismissal of a German employee representative on the SE
Supervisory Board. For such resolutions to be passed by the SE Works Council, they require
a majority of three quarters of the votes cast (section 37 (1) sentence 3 of the SEBG).
Following this, the Annual General Meeting must decide on the dismissal. It is bound to the
decision of the SE Works Council and required to comply with the dismissal (section 37 (1)
sentence 4 of the SEBG). In regard to the union representatives on the SE Supervisory
Board, only the union that proposed the member in question may apply for his/her dismissal
(section 37 (1) sentence 2 no. 3 of the SEBG). Concerning the authorization to request
dismissal of foreign employee representatives on the SE Supervisory Board, the national
provisions in the member states of the EU or EEA concerning implementation of the SE
Council Directive shall apply.

The previously explained special determinations on dismissal of employee representatives
on the SE Supervisory Board refer only to dismissal without good cause. The general
regulations founded in stock corporation law concerning dismissal of a Supervisory Board
member for good cause under the terms of section 103 (3) of the AktG, which are applicable
by virtue of the reference to member state stock corporation law in its entirety under article 9
(1) c) (ii) of the SE Council Regulation, will continue to apply to the SE.

Thus, there are no essential differences between MAN AG and MAN SE in regard to the
dismissal of employee representatives on the Supervisory Board.

g)     Appointment of Supervisory Board members by a court

In regard to the court appointment of Supervisory Board members, the change in legal form
will not give rise to any fundamental differences. In the case of a stock corporation, section
104 of the AktG foresees that upon application by the Executive Board, a member of the
Supervisory Board or a stockholder, the court must supplement the Supervisory Board if it
does not constitute a quorum or if it otherwise does not contain the requisite number of
members. If a German stock corporation is subject to the 1976 MitbestG, the group of those
authorized to apply to the court is supplemented by the persons or groups of persons listed
in section 104 (1) no. 3 of the AktG, which includes the Works Council or unions. In an SE,
the SE Works Council is also authorized to apply to the court (section 17 (3) sentence 1 of
the SEAG). In other respects, the provisions of German stock corporation law apply to a
German SE by virtue of the reference to member state stock corporation law in its entirety
                                                                                             27
under article 9 (1) c) (ii) of the SE Council Regulation. Because half of the MAN SE
Supervisory Board, pursuant to section 15.1 of the Agreement with the Special Negotiating
Body in conjunction with article 7 (1) of the Articles of Incorporation consists of employee
representatives, the 1976 MitbestG is not applicable. Accordingly, the regulations concerning
codetermination in regard to the authorization to request that the court appoint a member to
the Supervisory Board under the terms of section 104 (1) sentence 4 of the AktG in
conjunction with article 9 (1) c) (ii) of the SE Council Regulation are not applicable.

h)     Incompatibility of simultaneous membership on the Executive Board and the
       Supervisory Board

As is the case with a German stock corporation (section 105 (1) of the AktG), no person may
simultaneously be a member of the Executive Board and the Supervisory Board of an SE
(article 39 (3) sentence 1 of the SE Council Regulation). However, the SE Supervisory Board
may delegate one of its members to assume the responsibilities of a member of the
Executive Board if that particular post is not occupied (article 39 (3) sentence 2 of the SE
Council Regulation). During this time, the office of the respective person as a member of the
Supervisory Board is suspended (article 39 (3) sentence 3 of the SE Council Regulation).
This appointment is, however, restricted to a limited period of time, which may not exceed
one year (section 15 sentence 1 of the SEAG). Repeated appointment or the prolongation of
the term of office as a member of the Executive Board is permissible provided that the total
term of office does not exceed one year (section 15 sentence 2 of the SEAG). These
regulations correspond to the German stock corporation regulations that have applied to
MAN AG to date under the terms of section 105 (1) and (2) of the AktG, so that no changes
apply in this regard as a result of MAN AG’s change of legal form to an SE.

i)     Internal organization of the Supervisory Board

The Supervisory Board of a stock corporation subject to the 1976 MitbestG elects its
chairman and deputy chairman with a majority vote of two thirds of its members (section 107
(1) sentence 1 of the AktG in conjunction with section 27 (1) of the 1976 MitbestG). If a two-
thirds majority is not reached in the first ballot of the election of the Supervisory Board
chairman or his deputy chairman, the stockholder members on the Supervisory Board elect
the chairman in a second ballot with a simple majority of votes cast. Likewise, the employee
representative members on the Supervisory Board elect the deputy chairman in a second
ballot with a simple majority of votes cast (section 27 (2) of the 1976 MitbestG).

Article 42 sentence 1 of the SE Council Regulation foresees only that an SE Supervisory
Board is required to elect a chairman. By virtue of the reference to member state stock
corporation law in its entirety under article 9 (1) c) (ii) of the SE Council Regulation, an SE
Supervisory Board must also elect at least one deputy chairman, pursuant to section 107 (1)
sentence 1 of the AktG. Article 8 (1) of the Articles of Incorporation of MAN SE – as was
previously the case for MAN AG – requires the Supervisory Board to elect a chairman and
deputy chairman from among its members in the first meeting of its term of office. Pursuant
to article 42 sentence 2 of the SE Council Regulation, however, only a stockholder
representative may be elected as chairman of the Supervisory Board. In addition to the
regulations of section 27 of the 1976 MitbestG, which govern the election of the chairman of
the Supervisory Board and his deputies, the provisions of section 1.2 of the Agreement with
the Special Negotiating Body also apply to the MAN SE Supervisory Board. In line with this,
if a two-thirds majority is not reached in the first ballot of the election of the Supervisory
Board chairman or his deputy chairman, the stockholder members on the Supervisory Board
elect the chairman in a second ballot with a simple majority of votes cast. Likewise, the
employee representative members on the Supervisory Board elect the deputy chairman in a
second ballot with a simple majority of votes cast (section 27 (2) of the 1976 MitbestG).
Thus, the change in legal form does not result in any changes in this regard.

                                                                                            28
The Supervisory Board of a stock corporation subject to the 1976 MitbestG – as is MAN AG
– constitutes a quorum when at least half of its members participate in the resolution process
(section 28 of the 1976 MitbestG; article 10 (1) of the Articles of Incorporation/Bylaws of MAN
AG). Insofar as the Articles of Incorporation do not include another ruling, the SE Supervisory
Board, pursuant to article 50 (1) a) of the SE Council Regulation constitutes a quorum if at
least half of its members are present or represented. Article 10 (3) of the Articles of
Incorporation of MAN SE foresee that the Supervisory Board constitutes a quorum if at least
eight members participate in the resolution process. In regard to the resolution process of the
Supervisory Board, there are thus no changes compared to MAN AG.

Resolutions of the MAN AG Supervisory Board generally require a majority of votes cast in
order to be passed (section 29 (1) of the 1976 MitbestG; article 10 (2) sentence 1 of the
Articles of Incorporation/Bylaws of MAN AG). In the event of a tie, the chairman will have two
votes in a second ballot (section 29 (2) sentence 3 of the 1976 MitbestG; article 10 (2)
sentence 2 of the Articles of Incorporation/Bylaws of MAN AG). Pursuant to article 50 (2) of
the SE Council Regulation, the chairman of an SE Supervisory Board composed of an equal
number of stockholder and employee representatives will have a casting vote in the event of
a tie, thus dispensing with the need for a second ballot.
If the Supervisory Board is composed of an equal number of stockholder and employee
representatives, the Articles of Incorporation may not stipulate otherwise (article 50 (2)
sentence 2 of the SE Council Regulation).
 This gives the right of final decision to the Supervisory Board chairman, who must be a
stockholder representative in a body that is composed of an equal number of stockholder
and employee representatives pursuant to article 42 (2) of the SE Council Regulation. Article
10 (4) sentence 2 of the Articles of Incorporation of MAN SE thus stipulates that in the event
of a tie, the chairman – or if he does not participate in the resolution process, the deputy
chairman, insofar as he is a stockholder representative – shall have the casting vote. An
employee representative thus has no right to cast the decisive vote in the case of a tie
(article 10 (4) sentence 3 of the Articles of Incorporation of MAN SE). This guarantees
compliance with the requirements of article 50 (2) sentence 2 of the SE Council Regulation;
otherwise, the change of legal form leads to no other changes in comparison to MAN AG.

j)     Convening Supervisory Board meetings

Neither the SE Council Regulation nor the SEAG contain provisions regulating the convening
of Supervisory Board meetings. By virtue of the reference to member state stock corporation
law in its entirety under article 9 (1) c) (ii) of the SE Council Regulation, the provisions of the
AktG (section 110 of the AktG) shall apply. Accordingly, each Supervisory Board member or
the Executive Board may request that the chairman of the Supervisory Board promptly call a
meeting of the Supervisory Board, provided that this member states the purpose and
reasons for the request. If the meeting does not take place within two weeks, the member of
the Supervisory Board or the Executive Board may call a meeting of the Supervisory Board
(section 110 (2) of the AktG). Article 10 (1) of the Articles of Incorporation of MAN SE
stipulate that meetings of the Supervisory Board must be convened by the chairman with at
least fourteen days’ notice. Thus, the change in legal form does not result in any changes in
this regard.

In the case of listed German stock corporations, the Supervisory Board must convene two
meetings during every half of a calendar year (section 110 (3) sentence 1 of the AktG). By
virtue of the reference to member state stock corporation law in its entirety under article 9 (1)
c) (ii) of the SE Council Regulation, this also applies to MAN SE.

k)     Responsibilities and rights of the Supervisory Board

In a German stock corporation, pursuant to section 111 (1) of the AktG, the Supervisory
Board supervises the management by the Executive Board. It is also required to convene a
                                                                                                29
general meeting of stockholders if the interests of the company so require (section 111 (3)
sentence 1 of the AktG).

The same applies with regard to the SE; the Supervisory Board supervises the management
of the company by the Executive Board (article 40 (1) sentence 1 of the SE Council
Regulation). In addition, the SE Supervisory Board is also entitled to call an Annual General
Meeting of stockholders if the interests of the company so require (article 54 (2) of the SE
Council Regulation in conjunction with section 111 (3) sentence 1 of the AktG). This results
in no changes due to MAN’s change of legal form to an SE.

Neither in a stock corporation nor in an SE are the members of the Supervisory Board
entitled to delegate their responsibilities to other persons – including other Supervisory Board
members. In addition, neither in a German stock corporation nor in an SE may the
management of the company be delegated to the Supervisory Board (section 104 (4) of the
AktG and article 40 (1) sentence 2 of the SE Council Regulation). Thus, the change of legal
form of MAN AG to an SE does not lead to any changes in this regard.

In a German stock corporation, section 111 (4) sentence 2 of the AktG foresees that the
Articles of Incorporation or the Supervisory Board must stipulate that certain types of
transactions may only be conducted with the consent of the Supervisory Board. Article 48 (1)
sentence 1 of the SE Council Regulation is stricter in regard to an SE. According to this
provision, the Articles of Incorporation of an SE must list the types of transactions that
require the consent of the Supervisory Board.

For this reason, the Articles of Incorporation of MAN SE – in contrast to the Articles of
Incorporation/Bylaws of MAN AG – list the types of transactions that require the consent of
the Supervisory Board. The transactions requiring consent that are listed in article 11.1 of the
Articles of Incorporation of MAN SE are already contained in the rules of procedure for the
MAN AG Supervisory Board. However, this does not prevent the Supervisory Board – as with
a stock corporation – from adding further types of transactions requiring consent to the
Articles of Incorporation of MAN SE based on the authorization in section 19 of the SEAG,
e.g. to the rules of procedure for the Executive Board.       Article 11.2 of the Articles of
Incorporation of MAN SE takes this into account.

By virtue of the reference to member state stock corporation law in its entirety under article 9
(1) c) (ii) of the SE Council Regulation in conjunction with section 111 (4) sentences 3 to 5 of
the AktG, the Executive Board of MAN SE may require the Annual General Meeting to vote
on a resolution if the Supervisory Board refuses to authorize one of its measures.

With the exception that a list of transactions that require consent is mandatory in the Articles
of Incorporation of MAN SE, no other changes in regard to the responsibilities and rights of
the Supervisory Board result from MAN AG’s change of legal form to an SE.

l)     Duty of care and duty to observe secrecy of Supervisory Board members

In a German stock corporation, the Supervisory Board must exercise its function with the
duty and care of a prudent and diligent Supervisory Board member (section 116 sentence 1
in conjunction with section 93 (1) sentence 1 of the AktG). The Supervisory Board members
are required to maintain secrecy concerning confidential reports and advice.

By virtue of the reference to member state stock corporation law regarding specific matters in
article 51 of the SE Council Regulation, the same provisions as found in German stock
corporation law also govern the responsibilities of members of an SE Supervisory Board. In
addition, the duty to observe secrecy of the Supervisory Board members of an SE is
expressly governed in article 49 of the SE Council Regulation. Accordingly, members of SE
bodies may not transmit any information about the SE that could harm the interests of the
                                                                                             30
Company in the case of its dissemination. This also applies after such members have left
their offices. This does not apply in cases in which such transmission is required according to
stock corporation laws of an individual state, in cases in which such transmission is
permissible or in cases in which such transmission is in the public interest. However, article
49 of the SE Council Regulation expressly mentions – in contrast to the AktG – the
continuation of a Supervisory Board member's duty to maintain confidentiality after leaving
his office. This does not result in further changes, however, because in German stock
corporation law, recognition of the continuation of the responsibility to maintain confidentiality
after leaving the Supervisory Board is generally recognized. In regard to the duty of care and
duty of secrecy of Supervisory Board members, MAN AG’s change of legal form to an SE
results in no changes.

m)     Representation of the Company vis-à-vis members of the Executive Board

As is the case with a German stock corporation, the Supervisory Board of an SE also
represents the company, in and out of court, vis-à-vis the members of the Executive Board
(section 112 of the AktG in conjunction with article 9 (1) c) (ii) of the SE Council Regulation).

n)     Remuneration of Supervisory Board members, contracts with Supervisory
       Board members, granting of loans to Supervisory Board members

By virtue of the reference to member state stock corporation law in its entirety under article 9
(1) c) (ii) of the SE Council Regulation, the provisions concerning the remuneration of the
Supervisory Board members, contracts with the Supervisory Board members and the
granting of loans to Supervisory Board members (sections 113 to 115 of the AktG) also apply
to the SE. Article 12 of the Articles of Incorporation of MAN SE contains a regulation on the
remuneration of SE Supervisory Board members that corresponds to that of MAN AG (article
12 of the Articles of Incorporation/Bylaws of MAN AG).

The fact that the change of legal form is treated as a foundation process, however, does lead
to one difference. In a German stock corporation, only the first Annual General Meeting,
which resolves on the approval of the first Supervisory Board’s actions at the end of their
term of office, can appropriate the remuneration for their activities (section 113 (2) of the
AktG). As a precautionary measure, the Executive Board of MAN AG assumes that this
regulation, by virtue of the reference to member state stock corporation law in its entirety
under article 9 (1) c) (ii) of the SE Council Regulation, also applies when a stock corporation
changes its legal form to an SE. Thus, it will make use of this provision in regard to the
remuneration for the first MAN SE Supervisory Board. The provisions in article 12 of the
Articles of Incorporation of MAN SE concerning the remuneration of the members of the
MAN SE Supervisory Board will thus not be applied yet. Instead, the remuneration of the first
MAN SE Supervisory Board is to be determined by the Annual General Meeting that resolves
on the approval of the actions carried out by the members of the first MAN SE Supervisory
Board. This will be the second Annual General Meeting of MAN SE that occurs after
registration of MAN SE in the relevant commercial register at the Amtsgericht (Local Court) in
Munich (article 10 (2) sentence 2 of the Articles of Incorporation of MAN SE).

5.3.   Annual General Meeting

Section 118 (1) of the AktG stipulates that the stockholders of a German stock corporation
exercise their rights relating to matters of the company in the Annual General Meeting,
unless otherwise provided for by law. The members of the Executive Board and the
Supervisory Board should thus take part in the Annual General Meeting (section 118 (2) of
the AktG). By virtue of the reference to member state stock corporation law in its entirety
under article 9 (1) c) (ii) of the SE Council Regulation, these determinations also apply to the
SE. This results in no changes due to MAN AG’s change of legal form to an SE.

                                                                                               31
a)     Responsibilities of the Annual General Meeting

In a German stock corporation, the Annual General Meeting decides on matters for which it
is given responsibility by virtue of either national legal provisions or stipulations in the Articles
of Incorporation/Bylaws, namely (i) the appointment of the members of the Supervisory
Board insofar as they are not to be appointed or to be elected by the employees due to
codetermination rulings, (ii) the appropriation of MAN AG’s net retained profits (iii) the
approval of the Executive Board and Supervisory Board members’ actions, (iv) the
appointment of the auditor, (v) amendments to the Articles of Incorporation/Bylaws, (vi)
capital increase and capital reduction measures, (vii) the appointment of special auditors for
the examination of events in conjunction with the formation or of the management of the
company as well as (viii) the dissolution of the company (section 119 (1) of the AktG) and
authorizations for stock buybacks. According to the AktG, the Annual General Meeting
continues to have the responsibility for renunciation and settlement of liability claims against
members of Company bodies (sections 55, 93 (4) and 116 of the AktG) or the dismissal of
stockholder members of the Supervisory Board (section 103 (1) of the AktG). The Annual
General Meeting also continues to be responsible for consenting to the conclusion of
Company contracts (sections 291 et seq. of the AktG) and to measures based on the UmwG
(cf. sections 65, 733, 125, 226 et seq. of the UmwG concerning mergers, spin-offs or
changes of legal form). By virtue of the reference under article 52 of the SE Council
Regulation, the preceding regulations based on German stock corporation law also apply to
an SE so that MAN AG’s change of legal form to an SE does not lead to any changes in this
regard either.

The SE Council Regulation gives the Annual General Meeting the responsibility for
consenting to the cross-border transfer of an SE's headquarters (article 8 (4) of the SE
Council Regulation) as well as the reconversion to a national stock corporation (article 66 (6)
of the SE Council Regulation). A reconversion decision may only be taken after two years
have elapsed since the registration of the SE or after the first two annual financial statements
have been approved (article 66 (1) sentence 2 of the SE Council Regulation). In the stock
corporation as well, the Annual General Meeting is responsible for resolving on transfers of a
company's headquarters abroad. But the prevailing opinion in legal texts is that such a
resolution leads to the dissolution of the stock corporation.

In a German stock corporation, the Annual General Meeting can only decide on issue
regarding the management when the Executive Board requests this (section 119 (2) of the
AktG). By virtue of the reference under article 52 of the SE Council Regulation, this
stipulation continues to apply to the SE unchanged. However, the German Federal Supreme
Court has approved of exceptions. The requirements requiring the consent of the Annual
General Meeting of a stock corporation are founded in special fundamental decisions, which,
although they fundamentally fall under the management competence of the Executive Board,
represent structural measures that make de facto changes to the Articles of Incorporation
and due to their importance, significantly affect the rights of stockholders (cf. the decision of
the German Federal Supreme Court in the cases "Holzmüller" and "Gelatine"). These
principles, which were developed for a German stock corporation, apply in the view of the
Executive Board and by virtue of the reference to member state stock corporation law in its
entirety under article 9 (1) c) (ii) of the SE Council Regulation to an SE whose headquarters
are in Germany, with the result that MAN AG’s change of legal form to an SE does not result
in any changes in this respect.


b)     Approval of the Executive Board and Supervisory Board’s actions

The Annual General Meeting of a German stock corporation resolves within the first eight
months of each fiscal year on the approval of the Executive Board’s actions and the
Supervisory Board’s actions. With this resolution, the Annual General Meeting approves the
                                                                                                  32
management of the company by the members of the Executive Board and the Supervisory
Board (section 119 (1) no. 3 and section 120 of the AktG). By virtue of the reference to
member state stock corporation law regarding specific matters in articles 52 and 53 of the SE
Council Regulation, these provisions of the AktG apply to the SE. The only restriction is that
the time period within which the Annual General Meeting of the SE is to be held after the end
of a fiscal year is shorter. This period is not eight months as with a German stock
corporation, but six months (article 54 (1) of the SE Council Regulation).

c)     Convening the Annual General Meeting, Organization and Procedure

According to article 54 (2) of the SE Council Regulation, the Annual General Meeting of the
SE may be convened at any time by the Executive Board or the Supervisory Board in
accordance with the national law applicable to stock corporation companies. Thus, the
change of legal form of MAN AG to an SE does not result in any changes for the convening
of the Annual General Meeting. The organization and conduct of the Annual General Meeting
as well as the voting procedure are also governed in principle by the provisions of the AktG
(article 53 of the SE Council Regulation). However, the Annual General Meeting of an SE is
held at least once each calendar year within six months of the completion of the fiscal year
(article 54 (1) of the SE Council Regulation), whereas the Annual General Meeting of a stock
corporation must be held within the first six months of the end of a fiscal year (section 175 (1)
sentence 2 of the AktG). Since the Annual General Meeting of MAN has always been held in
April or May in recent years, MAN AG’s change of legal form to an SE will not lead to any
changes in this regard.

d)     Convening of the Annual General Meeting upon request of a minority;
       supplementing the agenda upon request of a minority

The Annual General Meeting of a German stock corporation is to be convened if
stockholders whose shares, in the aggregate, represent 5% of the share capital request this
in writing, stating the purpose and reasons for the request (section 122 (1) of the AktG). The
stockholders must prove that they have owned the shares for at least three months before
the date of the Annual General Meeting and that they continue to hold the shares until the
decision of the motion (i.e. until the authorization by a court or until the convening of the
meeting by the Executive Board (section 122 (1) sentence 3 in conjunction with section 142
(2) sentence 2 of the AktG). In the same way, stockholders whose shares, in the aggregate,
represent 5% of the share capital or a proportionate amount of the share capital of €500,000
may request that certain items for the adoption of a resolution of an Annual General Meeting
of stockholders be published (section 122 (2) of the AktG). If the request is not granted, a
court can authorize the stockholders who have submitted the request to convene the general
meeting or to publish the item for resolution (section 122 (3) sentence 1 of the AktG).

The convening of the Annual General Meeting and the drawing-up of the agenda may
therefore be requested by one or more stockholders who together hold at least 5% of the
share capital (article 55 (1) of the SE Council Regulation, section 50 (1) of the SEAG). The
request that an Annual General Meeting be convened must state the items to be put on the
agenda (article 55 (2) of the SE Council Regulation). Upon request, a court may authorize
the stockholders to convene the Annual General Meeting, if the Annual General Meeting has
not been held within two months, at the latest, after the request for convening an Annual
General Meeting has been made (article 55 (3) of the SE Council Regulation). In contrast to
the German stock corporation law provisions in section 122 (1) sentence 3 and section 142
(2) sentence 2 of the AktG, a minimum holding period of three months before making the
request is not a condition precedent for the request in the case of an SE.

The inclusion of one or more additional items in the agenda of the Annual General Meeting of
an SE may be requested by one or more stockholders who together hold at least 5% of the
share capital or a proportionate amount of €500,000 (article 56 of the SE Council Regulation,
                                                                                              33
section 50 (2) of the SEAG). The applicable procedures and time limits are based on the
individual laws of the respective countries, in the case of an SE by the SEAG and the
provisions of section 122 et seq. of the AktG (article 56 sentence 2 of the SE Council
Regulation in conjunction with section 50 of the SEAG). In effect, the SE Council Regulation
and the SEAG essentially adopt the provisions of German stock corporation law with the
consequence that generally speaking, MAN AG’s change of legal form to an SE does not
lead to any changes.

e)     Stockholders’ right to information, to speak and to raise questions during the
       Annual General Meeting

There is no difference between a German stock corporation and an SE in regard to the
stockholders' right to information, to speak and to raise questions. In the stock corporation
every stockholder is entitled to request information from the Executive Board regarding
company business, to the extent that this is necessary for the appropriate assessment of the
item on the agenda (section 131 (1) sentence 1 of the AktG). This information must present a
true and fair view of the situation concerned (section 131 (2) sentence 1 of the AktG). The
Executive Board may only refuse to give information under specific circumstances, which are
listed in section 131 (3) of the AktG. For example, the Executive Board would be permitted to
withhold information in cases where divulging the information could lead, in the view of a
prudent businessperson, to a significant disadvantage for the company or an affiliated
company (section 131 (3) no. 1 of the AktG). By virtue of the reference to member state
stock corporation law in its entirety under article 9 (1) c) (ii) of the SE Council Regulation, the
above-mentioned rights to information, to speak and to raise questions also apply to the SE.
Thus, the information rights of the stockholders of MAN AG are in no way affected by MAN
AG’s change of legal form to an SE.


f)     Rules of Procedure

The Annual General Meeting of a stock corporation may lay down rules of procedure for itself
concerning the preparation and conduct of the Annual General Meeting with a majority of at
least three quarters of the share capital represented at the time of adopting the resolution
(section 129 (1) sentence 1 of the AktG). According to article 53 of the SE Council
Regulation, the right of the Annual General Meeting to lay down such rules also applies to an
SE. However, the majority requirements for resolutions in an SE require a majority of three
quarters of the votes cast – not of the share capital represented at the time of adopting the
resolution. This is due to the fact that the SE Council Regulation bases voting at the Annual
General Meeting of an SE on the majority of votes and not on the majority of share capital
(articles 57 and 59 of the SE Council Regulation). To that effect, the provisions of the AktG
that require a majority of the share capital (e.g. sections 129, 179 (2) sentence 1, 182 (1)
sentence 1, 293 (1) sentence 2 of the AktG), must be applied to an SE so that the majority of
votes cast is sufficient. This has no practical significance for an SE with headquarters in
Germany because there are no shares with multiple voting rights. Thus, the large majority of
the share capital always corresponds to the majority of votes. This results in no changes due
to the change of legal form of MAN into an SE.

g)     Resolutions of the Annual General Meeting

The adoption of resolutions of the Annual General Meeting of a German stock corporation
requires the majority of the votes cast (simple majority of votes), unless a larger majority or
additional requirements are stipulated by statutory law or the Articles of Incorporation
(section 133 (1) of the AktG). The resolutions of the Annual General Meeting of an SE are
adopted by a majority of the votes validly cast, save where a larger majority is stipulated by
the SE Council Regulation, by the AktG or other provisions of law applicable to a stock
corporation whose headquarters are in Germany (article 57 of the SE Council Regulation).
                                                                                                34
Thus, the principle of a simple majority of votes for resolutions at the Annual General
Meeting is not affected by the change of legal form of MAN AG into an SE.

h)     Resolutions of the Annual General Meeting involving amendments to the
       Articles of Incorporation

Amendments to the Articles of Incorporation of a stock corporation require a majority of at
least three quarters of the share capital represented at the Annual General Meeting (sections
179 (2) of the AktG). The Articles of Incorporation may stipulate other majority requirements,
however, with the proviso that in respect of a change of the corporate purpose only a larger
majority of the share capital may be stipulated (section 179 (2) sentence 2 of the AktG).

The SE Council Regulation and the SEAG stipulate majorities and requirements for
amendments to the Articles of Incorporation that deviate from the AktG. Pursuant to article
59 (1) of the SE Council Regulation, amendments to the Articles of Incorporation require a
resolution by the Annual General Meeting with a majority of at least two thirds of the votes
cast. In accordance with article 59 (2) of the SE Council Regulation in conjunction with
section 51 sentence 1 of the SEAG, the Articles of Incorporation of an SE can rule that for a
resolution of the Annual General Meeting regarding amendments to the Articles of
Incorporation, a simple majority of the votes cast is sufficient, given that at least half of the
share capital is represented. This does not apply with regard to an alteration of the corporate
purpose, a resolution on the transfer of the registered office as well as in cases where a
larger majority of the share capital is required by mandatory statutory law (section 51
sentence 2 of the SEAG). The Articles of Incorporation of MAN SE do not make use of the
option granted by section 51 sentence 1 of the SEAG. By virtue of the reference under article
9 (1) c) (ii) of the SE Council Regulation, the provisions of the AktG (section 179 of the AktG)
shall apply. According to this provision, the Annual General Meeting is entitled to transfer to
the Supervisory Board amendments which only affect the wording of the Articles of
Incorporation. The Articles of Incorporation/Bylaws of MAN AG provide the corresponding
authorization in article 10 (5), which has been adopted in article 10 (6) of the SE Articles of
Incorporation.

j)     Non-voting preferred stock, special resolution

Neither the SE Council Regulation nor the SEAG contain express provisions regarding
nonvoting preferred stock. By virtue of the reference to member state stock corporation law
in its entirety under article 9 (1) c) (ii) of the SE Council Regulation and the reference to
member state stock corporation law regarding specific matters in article 5 of the SE Council
Regulation, the provisions under stock corporation law regarding nonvoting preferred stock
shares continue to apply in the case of an SE. The preferred shares in MAN SE – as in the
case of MAN AG – carry no voting rights. This does not apply when the preferred amount
has not been paid, or only partially paid and the arrears are not paid later in addition to the
preference amount of the year in progress (section 140 (2) of the AktG in conjunction with
article 9 (1) c) (ii) of the SE Council Regulation). In such cases, the preferred stockholders
are allowed to vote until the arrears have been paid, and the nonvoting preferred stock are to
be included in the calculation of a share capital majority when such a voting majority is
required by law or the Articles of Incorporation. The holders of nonvoting preferred stock are
eligible to a vote in accordance with section 141 (1), (2) sentence 1 in conjunction with (3) of
the AktG. This involves acquiring the agreement of the holders of nonvoting preferred stock
to a special resolution when a resolution of the Annual General Meeting is to be passed
which will terminate or limit their profit advantage, or which plans to issue nonvoting preferred
shares which will have priority over existing nonvoting preferred stock during the allocation of
the profit or the company assets. Holders of nonvoting preferred stock must pass a special
resolution at a separate meeting. The majority vote must comprise at least three quarters of
the votes cast (section 141 (3) sentence 1 and sentence 2 of the AktG).

                                                                                              35
In the event that an SE has various classes of shares, the resolution of the Annual General
Meeting requires a separate vote by each group of stockholders whose specific rights are
affected by the resolution (article 60 (1) of the SE Council Regulation). Should the resolution
of the Annual General Meeting require the majority of the votes, in accordance with article 59
(1) or (2) of the SE Council Regulation (qualified majority), then this majority is also
necessary for the separate vote of that group of stockholders whose specific rights are
affected by the resolution (article 60 (2) of the SE Council Regulation). Accordingly, to
terminate or limit the preference, three quarters of the holders of nonvoting preferred stock of
an SE must vote in favor of such action.

Since article 60 of the SE Council Regulation only demands a separate vote for that
particular group of stockholders and not a separate meeting, as in the case of the AktG, MAN
SE will only hold one Annual General Meeting in future, at which holders of various classes
of stock can, when necessary, vote separately.

k)     Special audits

By virtue of the reference to member state stock corporation law in its entirety under article 9
(1) c) (ii) of the SE Council Regulation and the reference to member state stock corporation
law regarding specific matters in article 5 of the SE Council Regulation, the provisions
concerning special audits also apply in the case of an SE (sections 142 and 258 of the
AktG). Thus, the change of legal form of MAN AG to an SE does not result in any changes.

l)     Liability claims against corporate bodies, stockholder lawsuits

Neither the SE Council Regulation nor the SEAG contains any provisions regarding the
assertion of claims for damages or stockholder lawsuits. By virtue of the reference under
article 9 (1) c) (ii) of the SE Council Regulation, the provisions of the AktG (section 147 et
seq. of the AktG) shall apply. Thus, MAN AG’s change of legal form to an SE does not lead
to any changes in this regard.

6.     Annual financial statements and consolidated financial statements

With regard to the preparation of the annual financial statements and the consolidated
financial statements, including related management reports, as well as the auditing and
publication of the financial statements, the change of form of MAN AG to an SE does not
lead to any changes. Article 61 of the SE Council Regulation refers insofar to the legal
provisions applicable to the country where the company is based. In addition, the provisions
of stock corporation law and of the Handelsgesetzbuch (HGB – German Commercial Code)
apply by virtue of article 9 (1) c) (ii) of the SE Council Regulation.

7.     Capitalization measures

By virtue of the reference under article 9 (1) c) (ii) of the SE Council Regulation, the
provisions of the AktG regarding the raising or reduction of capital apply. Thus, the change of
legal form of MAN AG to an SE does not lead to any changes in this regard.

8.     Alteration of the relationship between several classes of shares to one another

Should a German stock corporation alter the relationship between several classes of shares
to the detriment of one class, the resolution of the Annual General Meeting requires that the
consent of the affected stockholders become effective (section 179 (3) sentence 1 of the
AktG). The affected stockholders must pass a special resolution with a majority of three
quarters of the share capital represented (section 179 (3) sentence 2 and sentence 3 of the
AktG). The same is true for an SE. Pursuant to article 60 (1) of the SE Council Regulation,
every resolution of the Annual General Meeting requires a separate vote by each group of
                                                                                             36
stockholders whose specific rights are affected by the resolution, if the SE has various
classes of shares. With the exception that at the SE there is no right to vote, regardless
whether the special resolution is passed in a separate meeting or separate vote, as is the
case for a stock corporation (section 138 sentence 1 of the AktG), there is no difference
between a stock corporation and the SE. Thus, there will be no changes due to the change
of legal form of MAN into an SE.

9.     Invalidity of resolutions of the Annual General Meeting and of the approved
       annual financial statements, special audit because of an impermissible
       undervaluation

The AktG does not contain any special regulations regarding the invalidity of resolutions of
the Annual General Meeting (sections 248 to 255 of the AktG), the invalidity of the approved
annual financial statements (sections 256 f. of the AktG) and the special audit because of
impermissible undervaluation (sections 258 to 261a of the AktG). The SE Council Regulation
and the SEAG do not contain any corresponding provisions. By virtue of the reference to
member state stock corporation law in its entirety under article 9 (1) c) (ii) of the SE Council
Regulation, the provisions of the AktG apply. Thus, the change of legal form of MAN AG to
an SE does not lead to any changes in this regard.

With regard to the invalidity or contestation of the election of Supervisory Board members, by
virtue of the reference to member state stock corporation law in its entirety under article 9 (1)
c) (ii) of the SE Council Regulation and of article 5 of the SE Council Regulation, the
provisions of the AktG (sections 250 et seq. of the AktG) apply. Insofar as the election of
employee representatives on the Supervisory Board of MAN SE is concerned, the provisions
of the Agreement with the Special Negotiating Body apply. However, this does not provide an
explicit ruling in the case of an objection to the election procedure of employee
representatives to the SE Supervisory Board, so that the provisions of section 37 of the
SEBG regarding the reference provision in section 1.2 of the Agreement with the Special
Negotiating Body apply. Therefore, with regard to German employee representatives, the
election of a German employee representative to the Supervisory Board may be challenged
if substantive provisions concerning the right to vote, eligibility for election or the election
procedure have been infringed and such infringement has not been remedied, unless the
result of the vote could not be altered or influenced by the infringement (section 37 (2)
sentence 1 of the SEBG). The authority to challenge the election of an employee
representative to the Supervisory Board of an SE is granted to persons who, pursuant to
section 37 (1) sentence 2 of the SEBG, have the right to propose resolutions, to the SE
Works Council and to the management of the SE (section 37 (2) sentence 2 of the SEBG,
section 17 (4) sentence 2 of the SEAG). In the case of the election of a foreign employee
representative to the SE Supervisory Board, the authority to challenge this election must
comply with the regulations of the member states of the EU or EEA concerning
implementation of the SE Council Directive (section 17 (4) sentence 1 of the SEAG).

10.    Dissolution of the company

With regard to the dissolution, liquidation, insolvency, cessation of payments and similar
procedures, an SE is governed by the legal provisions applicable to a German stock
corporation company which has been founded according to the SE regulations in the country
of residence (article 63 of the SE Council Regulation). This includes the provisions relating to
the adoption of resolutions by the Annual General Meeting (with the consequence that the
change of legal form of MAN AG to an SE does not lead to any change). There is, however,
a distinction in the case of a resolution to transfer the headquarters of an SE to another
member state. Transferring the registered office of an SE into another member state is
permitted by article 8 of the SE Council Regulation. Unlike the case for a stock corporation, a
corresponding resolution by the Annual General Meeting does not lead to the dissolution of
the company. The transfer of the headquarters is subject to a resolution of the Annual
                                                                                              37
General Meeting requiring the same majority applicable to amendments of the Articles of
Association. Any stockholder whose objection to the transfer resolution is made orally on the
record in the minutes of the Annual General Meeting must be offered acquisition of his
shares against payment of adequate cash compensation (section 12 (1) sentence 1 of the
SEAG).

There are no differences between a German stock corporation and an SE as regards the
provisions governing the dissolution of stock corporations by a court (sections 396 to 398 of
the AktG). The procedure is applied pursuant to article 63 of the SE Council Regulation.

11.    Affiliated companies

Neither the SE Council Regulation nor the SEAG provides for any stipulations in this regard.
Therefore, pursuant to the prevailing legal opinion, German law concerning groups of
companies is applicable to the SE. Therefore, in the event of the conclusion of a control/and
or profit-and-loss transfer agreement, the outside stockholders are entitled to the right of
adequate compensation payments which are provided for in the case of a stock corporation.
This also applies if minority stockholders are excluded from receiving payment of adequate
cash compensation (sections 327a et seq. of the AktG). Therefore, pursuant to the prevailing
legal opinion, the change of legal form to an SE does not lead to any changes.

12.    Criminal law and civil penalty provisions

By virtue of the reference to member state stock corporation law in its entirety under article 9
(1) c) (ii) of the SE Council Regulation in conjunction with section 53 of the SEAG, the
criminal law and civil penalty provisions and stock corporation law (sections 99 et seq. of the
AktG) also apply to an SE so that the change of legal form of MAN AG to an SE does not
lead to any changes in this regard either.


V.     Fulfillment of the change in legal form of MAN AG to an SE

This section describes the change of form of the MAN AG to MAN SE. The prerequisite for
the change of form is that this measure is approved at the Annual General Meeting, based
on the Draft Terms of Conversion of February 18, 2009 and that the attached Articles of
Incorporation of MAN SE are also approved. The passing of the resolution requires a
majority of at least three quarters of the represented share capital. The change of form of
MAN AG to MAN SE will come into effect after its registration in the MAN AG commercial
register.

1.     Preparation of the Draft Terms of the Conversion

Pursuant to article 37 (4) of the SE Council Regulation, the MAN AG Executive Board must
prepare the Draft Terms of Conversion of the company to an SE. The SE Council Regulation
does not stipulate any requirements as to the content of the Draft Terms of Conversion, and
neither does the SEAG stipulate any minimum content. As a guideline for the content of the
Draft Terms of Conversion, the MAN AG Executive Board has presently taken recourse to
the requirements stipulated by article 20 of the SE Council Regulation in respect to the
merger plan, except where these are specifically designed to meet the particular
requirements of a merger. In accordance with these provisions, the Draft Terms of
Conversion must contain stipulations regarding the name and registered office of the
company, the Articles of Incorporation, special rights and special advantage is as well as the
procedure for the involvement of the employees. Furthermore, the Executive Board has also
taken into account the requirements of a resolution for a change of legal form, pursuant to
section 197 of the UmwG, insofar as this seemed appropriate (e.g. regarding details about
the consequences of the change of form for the employees and their representative bodies).
                                                                                             38
On February 18, 2009, the Executive Board of MAN AG resolved on the final version of the
Draft Terms of Conversion (including the Articles of Incorporation of MAN SE). The
Supervisory Board of MAN AG examined the subject of the change of legal form in detail at
its meeting of February 18, 2009 and approved the Draft Terms of Conversion, including the
Articles of Incorporation of MAN SE, as well as the proposed resolution for the Annual
General Meeting on April 3, 2009.

The Draft Terms of Conversion resolved by the Executive Board and approved by the
Supervisory Board, including the Articles of Incorporation which appear as Annex 1 of this
document, the Agreement with the Special Negotiating Body regarding the involvement of
the employees in the SE, which appears as Annex 2, the report issued by the conversion
auditor, PKF-Industrie- und Verkehrstreuhand GmbH Wirtschaftsprüfungsgesellschaft,
Munich, pursuant to article 36 (6) of the SE Council Regulation, and finally, this Report on
MAN AG’s Change of Legal Form to a Societas Europaea will be available for inspection in
the offices of MAN AG, Landsberger Str. 110, 80339 Munich, Germany as of February 20,
2009, when the MAN AG Annual General Meeting is officially convened. These documents
will also be available on the MAN website at www.man.eu/agm.

2.     Company formation report, company formation audit and change of legal form
       audit

Pursuant to articles 3, 15 (1) of the SE Council Regulation in conjunction with sections 32 et
seq. of the AktG, the incorporators must prepare a report on the conduction of the formation
of the SE. Furthermore, in general, it is necessary to carry out an internal and external
examination of the company formation (article 15 (1) of the SE Council Regulation in
conjunction with section 33 (1) and (2) of the AktG). The prevailing opinion in legal texts is
that when a corporation is converted into another form of corporation, the rationale of section
75 (2) of the UmwG is applied. Section 75 (2) of the UmwG provides that in the case of a
merger a formation report and a formation audit are not required if the transferring entity is a
corporation. It follows from the rationale of section 75 (2) of the UmwG that no formation
report is required in the case of a conversion, if the change of legal form is conducted
between corporations. Since MAN AG, as a stock corporation, is to change its legal form to
an SE, which is also a stock corporation, it follows, pursuant to section 75 (2) of the UmwG,
that it is neither necessary to prepare a company formation report nor to carry out an internal
or external examination of the company formation.

Pursuant to article 37 (6) of the SE Council Regulation, it is required that one or more
independent experts (hereinafter referred to as the Change of Form Auditors) issue a
report prior to the adoption of the resolution for the change of form to an SE by the Annual
General Meeting of MAN AG certifying that the net assets of the company are at least
equivalent to its share capital plus those reserves which pursuant to statutory provisions or
the statutes may not be distributed (so-called value assessment). Pursuant to article 37 (6)
of the SE Council Regulation, a resolution dated January 19, 2009 from the competent
Landgericht (District Court) in Munich (File name: 5 HK U 863/09) appointed as independent
expert PKF Industrie- und Verkehrstreuhand GmbH Wirtschaftsprüfungsgesellschaft, Munich
to act as Change of Form Auditors. The Change of Form Auditors began the audit on
January 20, 2009 and issued the report on February 19, 2009 pursuant to article 37 (6) of the
SE Council Regulation. The report appears in the annex to this report. It concludes that:

      "Based on the findings of our dutiful audit in accordance with article 37 (6) of the
      SE Council Regulation and the documents, account books and papers presented
      to us as well as the explanations and evidence with which we were provided, we
      certify that MAN AG has net assets at least in the amount of its share capital plus
      those reserves which, pursuant to the law and statutes, may not be distributed."

                                                                                             39
3.     Disclosure

Pursuant to article 37 (5) of the SE Council Regulation in conjunction with the legal
requirements of article 3 of the Publicity Directive (Directive 68/151/EEC), it is necessary in
Germany for the Draft Terms of Conversion to be made available at least a month before the
resolution is put forward at the Annual General Meeting. The Executive Board of MAN AG
will file the Draft Terms of Conversion in the commercial register at the Amtsgericht (Local
Court) in Munich in good time. Furthermore, the Draft Terms of Conversion, including all the
annexes, as well as the Report on the Change of Legal Form will be submitted in good time
to the Works Councils, in accordance with section 194 (2) of the UmwG.

4.     Annual General Meeting of MAN AG on April 3, 2009

In accordance with article 37 (7) of the SE Council Regulation, the Draft Terms of Conversion
must be passed at the Annual General Meeting as do the Articles of Incorporation of
MAN SE. The corresponding resolution of the Annual General Meeting requires a majority
that constitutes at least three quarters of the share capital represented at the time of
adopting the resolution.

In the course of resolution of the Draft Terms of the Conversion, the first auditor of MAN SE
must be appointed. KPMG AG Wirtschaftsprüfungsgesellschaft, Munich will be proposed.

In addition, subject to the approval of the resolution to change the legal form of MAN AG into
an SE, in accordance with item 8 of the Invitation to the Annual General Meeting on April 3,
2009, it is necessary to vote for the eight stockholders of the MAN SE Supervisory Board (cf.
item 9 of the agenda for the Annual General Meeting of MAN AG on April 3, 2009).

The holders of nonvoting preferred stock of MAN AG have no right to vote on the above-
mentioned resolutions.

5.     Procedure for the involvement of employees in MAN SE

In connection with the change of legal form of MAN AG to an SE, a procedure concerning the
involvement of employees in the future MAN SE must be carried out according to the
provisions of the SEBG. In the case of the change of form of a company to an SE, this
procedure is started by informing the employee representative bodies and German executive
representative committees in the company concerned, its affected subsidiaries and
establishments about the company formation, and by requesting in writing the election of a
Special Negotiating Body (section 4 (1) sentence 1 in conjunction with (2) sentence 1 of the
SEBG). Pursuant to section 4 (2) sentence 3 of the SEBG, after disclosure of the Draft
Terms of Conversion, this information must be provided promptly and without being asked.
The prevailing legal opinion is that this disclosure determines the latest point in time for
initiating the procedure for involvement of the employees, and the procedure for involvement
of the employees can be initiated and concluded before the Draft Terms of the Conversion
are disclosed in the commercial register. Accordingly, the Executive Board initiated the
procedure for involving the employees on July 28, 2008.

The objective of such a procedure is conclusion of an Agreement on employee involvement
in the SE in accordance with section 13 (1) sentence 1 of the SEBG, especially concerning
codetermination of employees in the MAN SE Supervisory Board and the procedure for
information and consultation of employees, either through the formation of an SE Works
Council or in another manner to be agreed on with the Executive Board of MAN AG.
Furthermore – because the legal form is changing – it is necessary to ensure that employee
are involved at least to the same extent as MAN AG (section 21 (6) of the SEBG).


                                                                                            40
The negotiations regarding the involvement of employees in the SE were successfully
concluded on February 18, 2009 with the conclusion of an Agreement concerning
involvement of employees in the SE between the Executive Board of MAN AG and the
Special Negotiating Body. The individual points of this procedure and the content of the
agreement regarding the involvement of the employees in the SE are described in § 6 and §
7 of the Draft Terms of Conversion, and are explained in detail below, in section VI.XX of this
report.

6.     Completion of MAN AG’s change of legal form to an SE

Various requirements must be fulfilled before MAN AG’s change of legal form to an SE can
be filed in the commercial register the Amtsgericht (Local Court) in Munich. These include
the MAN AG Annual General Meeting’s approval of the proposed resolution under item 8 of
the agenda for the Invitation to the Annual General Meeting on April 3, 2009 regarding MAN
AG’s change of legal form to an SE and its authorization of MAN SE’s Articles of
Incorporation which are included as Annex 1 to the Draft Terms of Conversion. Furthermore,
the Annual General Meeting must elect the stockholder representatives nominated for the
first period of office to the MAN SE Supervisory Board (item 9 of the agenda for the Invitation
to the Annual General Meeting on April 3, 2009). MAN AG’s change of legal form to an SE
will take effect once it is entered in the commercial register.

The filing of the change of legal form for registration in the commercial register must be made
by the representative body of MAN AG, as it is the company changing its legal form, i.e. by
the Executive Board (article 15 (1) of the SE Council Regulation in conjunction with section
246 (1) of the UmwG). In connection with the filing, the Executive Board must declare that
no action contesting the validity of the resolution to change the legal form has been filed or
has been filed within the applicable period, or that such action has been finally dismissed or
withdrawn (referred to as a Negativerklärung (negative declaration), cf. article 15 (1) of the
SE Council Regulation in conjunction with sections 198 (3) and 16 (2) of the UmwG).
Without such a declaration, the change of legal form may not be entered in a register
(referred to as a Registersperre (register ban)).

In the case of an action contesting the validity of the resolution to change the legal form at
the MAN AG Annual General Meeting, MAN AG may obtain a court order by means of
proceedings referred to as Freigabeverfahren (clearance proceedings) pursuant to article 15
(1) of the SE Council Regulation in conjunction with sections 198 (3) and 16 (3) of the UmwG
ascertaining that the bringing of this action to set aside the resolution does not stand in the
way of the change of legal form. A corresponding court order will show if the action filed to
set aside the resolution is inadmissible or evidently unfounded or if, in the unbiased opinion
of the court in consideration of the gravity of the violations of law alleged in the action, an
early effectiveness of the change of legal form is deemed to have priority in order to avert the
material disadvantages for the company and its stockholders as presented by the applicant
(section 16 (3) sentence 2 of the UmwG). In this case the entry would follow despite the
action brought to set aside the resolution.

Finally, the Articles of Incorporation of the future MAN SE may not, at any time, contradict the
Agreement concluded between the Executive Board and the Special Negotiating Body on
February 18, 2009 concerning employee involvement in the SE (article 12 (4) of the SE
Council Regulation). In the case of such contradiction, the Articles of Incorporation are to be
amended by a resolution of the Annual General Meeting of MAN AG.

If all entry requirements have been met, the change of legal form may be entered in the
commercial register of MAN AG. The SE acquires legal personality upon entry in the register
(article 16 (1) of the SE Council Regulation). However, the principle of identity of the legal
entity applies, i.e. MAN AG does not cease to exist as a company, but merely changes its
legal form. MAN SE comes into existence upon entry of the company name in the
                                                                                             41
commercial register. Owing to the company’s identity as MAN AG (article 37 (2) of the SE
Council Regulation), there is no preliminary SE. The stockholders of MAN SE are thus not
subject to liability. However, those persons who perform legal acts on behalf of the SE prior
to its entry in the commercial register as MAN SE are fully liable, both jointly and severally.
Article 16 (2) of the SE Council Regulation also applies in this respect for a company
foundation based on a legal change of form. This liability is not triggered if an act is
performed on behalf of MAN AG because this does not constitute action on behalf of MAN
SE. In this respect, MAN AG can continue normal operations before the SE is entered in the
register up until the time when MAN SE is entered in the commercial register.

7.     Establishment of the first Supervisory Board for MAN SE and appointment of
       the first Executive Board

The terms of office of the present members of the Executive Board and the Supervisory
Board of MAN AG end when MAN AG’s change of legal form to an SE becomes effective.
The members of the first Executive Board of MAN SE are to be appointed by the first
Supervisory Board of MAN SE (article 39 (2) sentence 1 of the SE Council Regulation) prior
to the change of legal form.

The first Supervisory Board of MAN SE will have 16 members, composed of eight
stockholder representatives and eight employee representatives (article 7 (1) of the Articles
of Incorporation of MAN SE). The eight employee representatives on the Supervisory Board
of MAN SE shall be appointed to the Supervisory Board of MAN SE by the employees in line
with the provisions of the most current version of the Agreement concluded pursuant to the
SEBG regarding the involvement of employees in the SE (article 7 (3) sentence 2 of the
Articles of Incorporation of MAN SE). In this respect, section 16.6 of the Agreement with the
Special Negotiating Body stipulates that the eight people listed in Annex 16.6 to this
Agreement are to act as the employee representatives on the MAN SE Supervisory Board
during the first term of office. The eight stockholder representatives on the MAN SE
Supervisory Board shall be elected by the Annual General Meeting (article 7 (3) sentence 1
of the Articles of Incorporation of MAN SE). For this, the Supervisory Board of MAN AG
proposes the persons listed under item 9 of the agenda outlined in the Invitation to the
Annual General Meeting on April 3, 2009 for election as stockholder representatives for the
SE Supervisory Board’s first term of office. The Annual General Meeting is not bound to any
of these nominations.

The term of office for members of the MAN SE Supervisory Board shall be five years. The
period between the close of one Annual General Meeting and the close of the next will be
considered as one year in office. Notwithstanding this, the first term of office of the
Supervisory Board will expire upon the end of the Company’s second Annual General
Meeting to take place after the entry of MAN SE in the relevant commercial register at the
Amtsgericht (Local Court) in Munich (article 7 (2) of MAN SE’s Articles of Incorporation).

Insofar as the Annual General Meeting approves the change of legal form and the Articles of
Incorporation of MAN SE on April 3, 2009 as well as elects the candidates proposed by the
Management under item 9 of the agenda for MAN AG’s Annual General Meeting on April 3,
2009 as stockholder representatives to the MAN SE Supervisory Board for the first term on
this body, the first Supervisory Board of MAN SE be formed before the filing of the change of
legal form in the commercial register and will elect its chairman and deputy chairman. It will
also appoint the members of the Executive Board of the future MAN SE. The names of the
members of the Executive Board must be included in the filing of the legal change of form
with the commercial register (article 15 (1) of the SE Council Regulation in conjunction with
section 246 (2) of the UmwG).



                                                                                            42
VI.    Explanation of the Draft Terms of Conversion and the Articles of Incorporation
       of MAN SE

1.     Explanation of the Draft Terms of Conversion

1.1.   Change of legal form of MAN AG to MAN SE (§ 1 of the Draft Terms of
       Conversion)

According to § 1 of the Draft Terms of Conversion pursuant to article 2 (4) in conjunction with
article 37 of the SE Council Regulation, MAN AG will undergo a change of legal form,
becoming a Societas Europaea (SE – European Stock Corporation). For more than two
years, MAN AG has had a number of subsidiaries which are subject to the laws of other EU
member states. One of these subsidiaries is MAN STAR Trucks & Buses Sp.z.o.o., whose
headquarters are in Sady, Poland. This company is listed in the company register of the
national register at the local court in Poznan under number KRS 0000003195. MAN STAR
Trucks & Buses Sp.z.o.o. is a wholly-owned subsidiary of MAN Nutzfahrzeuge AG, whose
headquarters are in Munich, Germany (HRB 86963). MAN founded MAN STAR Trucks &
Busses Sp.z.o.o. in 1999. MAN AG has had a 100% controlling interest in MAN
Nutzfahrzeuge since 1986. Additionally, MAN Nutzfahrzeuge AG is governed by MAN AG
through control and profit-and-loss transfer agreements. The requirement for a legal change
of form from MAN AG to MAN SE in accordance with article 2 (4) of the SE Council
Regulation is thus fulfilled.

MAN AG’s change of legal form to an SE leads neither to a dissolution of the company nor to
the formation of a new legal entity. Because of the Company’s identity as a legal entity, the
interests of stockholders (common and preferred stockholders) in the Company will continue
without change. The change of legal form will take effect once it has been recorded in the
relevant commercial register at the Amtsgericht (Local Court) in Munich. A necessary
requirement for the registration is the conclusion of the procedure governing employee
involvement in the future SE. This was successfully finalized with the signature of the
Agreement between the Executive Board and the Special Negotiating Body regarding
employee involvement in the SE (cf. § 6 of the Draft Terms of Conversion).

1.2.   Company name, headquarters, Articles of Incorporation (§ 2 of the Draft Terms
       of Conversion)

§ 2 of the Draft Terms of Conversion specifies the company name, headquarters and Articles
of Incorporation of the future SE. After the change of legal form, the company will be called
"MAN SE". The use of the suffix "SE" in the company name is mandatory (article 11 (1) of the
SE Council Regulation). The company will continue to be domiciled in Munich, Germany,
which is also home to its headquarters. § 2.3 of the Draft Terms of Conversion refers to the
Articles of Incorporation of the future SE, which is included in the Draft Terms of Conversion,
and elucidated in detail under section VI.2. of this Report on the Change of Legal Form.

1.3.   Share capital, authorized and contingent capital, appropriation of net retained
       profits, authorization to purchase own shares, no cash settlements (§ 3 of the
       Draft Terms of Conversion)

§ 3.1 to § 3.6 of the Draft Terms of Conversion present the company’s capital situation. Due
to the preservation of the legal identity of the Company, MAN AG’s share capital will become
the share capital of MAN SE in the amount existing at the time of change of legal form and in
the division into common and preferred stock existing at the time of conversion. The same
applies to the authorized and contingent capital of MAN AG, which will become the
authorized and contingent capital of MAN SE. The existing capital situation at MAN AG is
thus continued at MAN SE.

                                                                                            43
The share capital figure listed in article 4 (1) of the Articles of Incorporation of MAN SE,
including the described division into common stock and nonvoting preferred stock, will
correspond to the share capital figure listed in article 4 (1) of the Articles of
Incorporation/Bylaws of MAN AG with its division into no-par value shares, including the
described subdivision of these into common stock and nonvoting preferred stock. The same
applies to the amount of Authorized Capital 2005, in accordance with article 4 (4) of the
Articles of Incorporation of MAN SE, which corresponds to the Authorized Capital 2005
amount in accordance with article 4 (3) of the Articles of Incorporation/Bylaws of MAN AG.
The amount of Contingent Capital 2005 at the time of change of legal form in accordance
with article 4 (5) of the Articles of Incorporation of MAN SE will correspond to the amount of
Contingent Capital 2005 in accordance with article 4 (4) of the Articles of
Incorporation/Bylaws of MAN AG. At the time of change of legal form, the provisions in
accordance with article 24 (3) of the Articles of Incorporation of MAN SE concerning the
order of priority in which the net retained profits for the year shall be appropriated will
correspond to the provisions in accordance with article 24 (3) of the Articles of
Incorporation/Bylaws of MAN AG.

The natural persons and legal entities who are stockholders of MAN AG at the time of
change of legal form shall become stockholders of MAN SE. They will become stockholders
of MAN SE to the same extent and with the same number of no-par value bearer shares of
MAN SE’s share capital as they were at the time of change of legal form of MAN AG.
Common stockholders receive the same number of common shares that they held at the
time of MAN AG’s change of legal form to an SE; holders of preferred stock receive the same
number of nonvoting preferred shares that they held at the time of MAN AG’s change of legal
form. The notional amount of the share capital accounted for by each no-par value share
shall be maintained in exactly the way it exists at the time of conversion.

Thus, as in the case of MAN AG, the share capital of MAN SE will also be €376,422,400 and
will be divided into 147,040,000 no-par value shares of which 140,974,350 are common
shares and 6,065,650 nonvoting preferred shares. As with MAN AG, shares of MAN SE are
also made out to the bearer. Each share represents a proportionate amount of €2.56 of MAN
SE’s share capital, as with MAN AG. This applies on the following conditions:

Insofar as the Annual General Meeting of MAN AG, to be held on April 3, 2009, resolves to
authorize the Executive Board of MAN AG, with the consent of the Supervisory Board, to
disapply the stockholders’ subscription rights for up to €4 million of Authorized Capital 2005
and to issue new shares against cash contributions or in accordance with the provisions of
section 204 (3) of the AktG to executives with managerial responsibility (managers) of the
Company and/or affiliated Group companies (for the complete text of the proposal to extend
authorization for Authorized Capital 2005, see item 6 of the agenda outlined in the Invitation
to the Annual General Meeting on April 3, 2009), this extension of authorization for
Authorized Capital 2005 shall continue without interruption for the future MAN SE. Please
refer to the report of the Executive Board of MAN AG concerning item 6 of the agenda
outlined in the Invitation to the Annual General Meeting on April 3, 2009.

If the Annual General Meeting rejects the proposal found under item 6 of the agenda outlined
in the Invitation to the Annual General Meeting on April 3, 2009, the authorization for
Authorized Capital 2005 for the SE will not apply. The proposed resolution for item 6
accordingly provides for the MAN AG Executive Board to be instructed in such a case to
register the Articles of Incorporation of MAN SE in the commercial register without sentences
3 and 4 of article 4 (4). In addition, the Executive Board shall be instructed to apply for
registration of sentences 3 and 4 of article 4 (4) of the Articles of Incorporation of MAN SE in
the commercial register only after the resolution found under item 6 of the agenda outlined in
the Invitation to the Annual General Meeting on April 3, 2009 has been registered in the
relevant commercial register for MAN AG, or after the validity of this resolution has been
determined. By issuing the corresponding instructions, the Executive Board of MAN AG will
                                                                                             44
ensure that the Company’s change of legal form can be filed in the commercial register
independently of the resolution regarding item 6 outlined in the Invitation to the Annual
General Meeting on April 3, 2009, which deals with an extension to the authorization for
Authorized Capital 2005.

Finally, the last paragraph of § 3.6 of the Draft Terms of Conversion presents the
consequences for MAN SE, should the Executive Board of MAN AG, with the consent of the
Supervisory Board make use of Authorized Capital 2005 and/or Contingent Capital 2005
before the change of legal form to an SE, i.e. even before the SE is filed in the commercial
register. In such a case, the respective authorization for increasing the share capital in
accordance with article 4 (4) and (5) of the Articles of Incorporation of MAN SE will be
reduced and the share capital figure as well as the figures concerning the number of shares
found in article 4 (1) and (3) of the Articles of Incorporation of MAN SE will be increased
accordingly. In addition, any capitalization measures resolved by the Annual General
Meeting before the change of legal form shall apply equally to MAN SE. The same shall also
apply in the event that MAN AG buys back its own stock.

§ 3.7 of the Draft Terms of Conversion determines that insofar as the Annual General
Meeting of MAN AG, to be held on April 3, 2009, resolves to authorize the Executive Board
of MAN AG to purchase and to utilize common and/or nonvoting preferred stock of the
Company, with the consent of the Supervisory Board, on one or more occasions until
October 2, 2010 up to a maximum total amount of 10% of the share capital under certain
further conditions that shall be likewise specified in the authorization, this utilization
authorization will continue to apply for the Executive Board of the future MAN SE, especially
in regard to the disapplication of the stockholders’ subscription rights permitted according the
authorization resolution. In view of the details of this renewed authorization to purchase and
utilize own stock, please refer to the report of the Executive Board in accordance with section
71 (1) no. 8 in conjunction with section 186 (3) sentence 4 and section 186 (4) sentence 2 of
the AktG to the Annual General Meeting on April 3, 2009 concerning authorization and the
respective disapplication of stockholders’ subscription rights. Should the resolution proposed
under item 5 of the agenda outlined in the Invitation to the Annual General Meeting of MAN
AG on April 3, 2009 not be passed, however, the old authorization which allows the
Executive Board to purchase own stock from April 25, 2008 to October 24, 2009 will remain
in place. Please refer to the report of the Executive Board of MAN AG concerning item 5 of
the agenda outlined in the Invitation to the Annual General Meeting on April 24, 2008
(available on the MAN website at www.man.eu/hauptversammlung).

§ 3.8 of the Draft Terms of the Conversion clarifies the fact that stockholders who object to
the change of legal form shall not be offered cash compensation, since this is not provided
for by statutory law.

1.4.   Special rights, Special privileges (§ 4 of the Draft Terms of Conversion)

Similar to a merger plan (article 20 (1) f) of the SE Council Regulation), the Draft Terms of
Conversion also include a description of the rights granted to stockholders with special rights
in the company that is changing its legal form, or the holders of other forms of stocks, and
the measures proposed for these people. In the case of MAN AG, this refers to the preferred
dividend of the preferred stockholders, as well as the order in which the annual net retained
profits are to be distributed.

In the case of MAN SE, holders of nonvoting preferred stock of MAN AG shall continue to
retain the special right in accordance with article 24 (3) of the Articles of Incorporation of
MAN SE to the effect that the annual net retained profits will first be used for payment of a
preferred dividend of €0.11 per nonvoting preferred share. If the net retained profits in one
year are insufficient for payment of the dividend, the unpaid balance (excluding any interest)
shall be paid from the net retained profits of succeeding fiscal years before distributing any
                                                                                             45
dividend to common stockholders. If the net retained profits available are not sufficient to pay
the dividends in arrears plus the preferred dividend of €0.11 for the new fiscal year, the
dividends in arrears are paid out first in the order in which they arose followed by the
preferred dividend for the new year.

In accordance with article 24 (3) of the Articles of Incorporation of MAN SE – as is the case
with MAN AG – holders of common stock continue to have the right to payment from the
annual net retained profits of a dividend of up to €0.11 per share after payment of a preferred
dividend of €0.11 per share of nonvoting preferred stock (§ 4.2 of the Draft Terms of
Conversion) and if applicable, after fulfillment of the responsibility to make repayments due in
previous years (see above).

§ 4.3 of the Draft Terms of Conversion makes it clear that, apart from the special rights,
mentioned above, the people named in article 20 (1) f) of the SE Council Regulation will not
be granted any special rights and no special measures will be proposed for them.
Furthermore, no special privileges shall be granted to persons in the sense of article 20 (1)
sentence 2 g) of the SE Council Regulation during the change of legal form.

1.5.   Bodies of MAN SE (§ 5 of the Draft Terms of Conversion)

§ 5.1 of the Draft Terms of Conversion identifies the bodies of MAN SE as the Executive
Board, the Supervisory Board and the Annual General Meeting. This confirms the decision to
continue the two-tier management structure consisting of the Supervisory Board and the
Executive Board. Therefore, the change of legal form does not result in a change to the so-
called one-tier management system, in which, besides the Annual General Meeting, there is
only one management body.

§ 5.2 of the Draft Terms of Conversion determines that the Supervisory Board of MAN SE
shall no longer consist of 20 members, as with MAN AG, but rather of 16 members. Eight of
these shall be stockholders and eight shall be employee representatives. The Supervisory
Board of MAN SE – as was previously the case with MAN AG – is composed of an equal
number of stockholder and employee representatives. The term of office for members of the
MAN SE Supervisory Board shall be five years. The period between the close of one Annual
General Meeting and the close of the next will be considered as one year in office.
Notwithstanding this, however, the term of office for the first Supervisory Board of MAN SE
shall last until the end of the second Annual General Meeting of MAN SE that occurs after
registration of the SE in the relevant commercial register at the Amtsgericht (Local Court) in
Munich (§ 5.3 of the Draft Terms of Conversion).

The eight stockholder representatives on the Supervisory Board of MAN SE will be elected
by the Annual General Meeting. The eight employee representatives on the Supervisory
Board of MAN SE will be appointed by the employees in accordance with the provisions of
the Agreement regarding the involvement of the employees in the SE, as amended, which
was concluded under the SEBG (§ 5.4 of the Draft Terms of Conversion). The eight
employee representatives who are elected to a first term of office on the Supervisory Board
of MAN SE are named in Annex 16.6 of the Agreement, which is included as Annex 2 of the
Draft Terms of Conversion.

§ 5.5 of the Draft Terms of Conversion stipulates that the terms of office of MAN AG’s
Executive Board members and Supervisory Board members will terminate when MAN AG’s
change of legal form to an SE enters into force. Section 203 of the UmwG does not apply.




                                                                                             46
1.6.   Information on the procedure for arrangements for employee involvement in
       MAN SE (§ 6 of the Draft Terms of Conversion)

§ 6 of the Draft Terms of Conversion includes information regarding the procedure to be
followed after finalization of the Agreement regarding employee involvement. This procedure
is in accordance with SEBG provisions and the respective national legislation implementing
the SE Council Directive and the SE Council Regulation in the other member states of the
EU and treaty states of the EEA where employees of the MAN Group are based.

a)     Principles and terms (§ 6.1 and 6.2 of the Draft Terms of Conversion)

§ 6.1 of the Draft Terms of Conversion sets forth the main principles involved in the
procedure determining employee involvement. According to these provisions and in
conjunction with the legal conversion of MAN AG to an SE, a procedure concerning the
involvement of employees in the future MAN SE must be carried out according to the
provisions of the SEBG. The procedure for the involvement of employees in the SE is
characterized by the principle of protecting the acquired rights of employees (section 1 (1) of
the SEBG). In accordance with article 12 (2) of the SE Council Regulation, conclusion of the
negotiation procedure is required for registration of the SE in the commercial register and
thus, for the effectiveness of MAN AG’s change of legal form to an SE. The objective of such
a procedure is conclusion of an Agreement on employee involvement in the SE in
accordance with section 13 (1) sentence 1 of the SEBG, especially concerning
codetermination of employees in the MAN SE Supervisory Board and the procedure for
information and consultation of employees, either through the formation of an SE Works
Council or in another manner to be agreed on with the Executive Board of MAN AG. In the
event that the negotiation procedure is not concluded with the reaching of an Agreement
between management and employee representatives on codetermination of employees
including the right to information and consultation, the SEBG foresees standard statutory
rules in regard to codetermination of employees and procedures for information and
consultation.

§ 6.2 of the Draft Terms of Conversion designates the legal procedures for involvement of
employees in the SE – including information, consultation and codetermination – through
which employees' representatives may exercise an influence on decisions to be taken within
the Company. Please refer to the points under § 6.2 of the Draft Terms of Conversion.

b)     Initiation of the procedure for the involvement of employees (§ 6.3 and § 6.4 of the
       Draft Terms of Conversion)

§ 6.3 and § 6.4 of the Draft Terms of Conversion describe the initiation of the procedure for
the involvement of employees by the Executive Board of MAN AG, which involves – in
accordance with the SEBG provisions – informing the employees and affected employee
representative bodies. The Executive Board of MAN AG started the procedure for the
involvement of employees by notifying the employees in writing on July 28, 2008. The
Executive Board of MAN AG simultaneously informed the respective employee
representative bodies (including the German executive representative committees) of MAN
AG, its affected subsidiaries and companies in the EU member countries and the treaty
states of the EEA according to section 4 (1) sentence 1 of the SEBG concerning the intended
change of legal form from MAN AG to a European Stock Corporation (SE). In cases where
no employee representative bodies were present in the affected subsidiaries or companies,
the employees were informed. At the same time, the Executive Board of MAN AG called
upon the respective employee representative bodies (including the German executive
representative committees) – and where no employee representative bodies existed, the
employees – of MAN AG, its affected subsidiaries and companies to form a Special
                                                                                              47
Negotiating Body of employee representatives, with the objective of negotiating the
involvement of employees in the future SE with the Executive Board and defining this
involvement in a joint agreement. It was possible to complete the procedure determining the
involvement of employees before disclosure of the Draft Terms of Conversion (cf. Section V.
5. of this Report (above)).

c)     Establishment of the Special Negotiating Body and conclusion of the
       Agreement regarding employee involvement (§ 6.5, 6.6 and 6.7 of the Draft
       Terms of Conversion)

§ 6.5 to § 6.7 of the Draft Terms of Conversion describe the allocation of seats and the
establishment of the Special Negotiating Body. Based on the employee figures in the
individual member states at the point in time of dissemination of information on the change of
legal form as well as the call by the Executive Board of MAN AG to form the Special
Negotiating Body, 26 seats in total were attributable to the member states for the Special
Negotiating Body as follows:

Germany               7                     Latvia                1
Poland                2                     The Netherlands       1
Belgium               1                     Norway                1
Denmark               1                     Austria               1
France                1                     Portugal              1
Greece                1                     Sweden                1
United Kingdom        1                     Slovakia              1
Italy                 1                     Slovenia              1
Spain                 1                     Czech Republic        1
Hungary               1

In accordance with section 11 (1) sentence 1 of the SEBG, employees or their employee
representative bodies in the respective member states had 10 weeks after receipt of the
information from the Executive Board of MAN AG to elect members to the Special
Negotiating Body according to the respectively applicable national laws implementing the SE
Council Directive and the SE Council Regulation. For the German representatives, this
meant that among the 7 German members of the Special Negotiating Body, there had to be
2 union representatives and 1 executive (leitender Angestellter). By October 9, 2008, i.e.
within the 10-week period specified in section 11 (1) sentence 1 of the SEBG, the Executive
Board of MAN AG had been presented with all results of the elections in all affected member
states concerning the appointment of members to the Special Negotiating Body, including
their alternate members, as well as for Germany, including the 2 union representatives and
one executive. In a letter dated October 10, 2008, MAN’s Executive Board immediately
invited the members of the SNB to a constituent meeting of the Special Negotiating Body on
October 16, 2008 in Munich. Following this, negotiations between the Executive Board of
MAN AG and the Special Negotiating Body were begun with the goal of reaching an
agreement on the features of the involvement procedure and the definition of participation of
employees in the future SE in accordance with article 3 (3) and article 4 (1) of the SE Council
Directive in conjunction with section 13 (1) and (21) of the SEBG. The negotiations were
successfully completed on February 18, 2009 with the conclusion of an Agreement
concerning involvement of employees in the SE between the Executive Board of MAN AG
and the Special Negotiating Body. The Agreement with the Special Negotiating Body is
subject to the condition precedent that MAN’s Annual General Meeting approves the change
of legal form to an SE with a majority that constitutes at least three quarters of the share
capital represented at the time of adopting the resolution.




                                                                                            48
1.7.   Agreement between the Executive Board of MAN AG and the Special
       Negotiating Body – consequences of the change of legal form for employees
       and their representative bodies

§ 7 of the Draft Terms of Conversion outlines the provisions regarding the involvement of
employees in the SE included in the Agreement reached between the MAN AG Executive
Board and the Special Negotiating Body on February 18, 2009. Furthermore, it explains the
consequences of the change of legal form for the employees and their representatives.

a)     Scope of the Agreement with the Special Negotiating Body, terms and
       definitions (§ 7.1 of the Draft Terms of Conversion)

§ 7.1 of the Draft Terms of Conversion provides details of the scope of the Agreement with
the Special Negotiating Body, which includes the member states of the EU and the treaty
states to the EEA (excluding Switzerland) where MAN Group staff are employed (§ 1.1 of the
Agreement with the Special Negotiating Body). Unless otherwise defined in the Agreement
with the Special Negotiating Body, the provisions of the SE Council Regulation, SE Council
Directive and of the SEBG apply as do the other national provisions normally applicable in
Germany;      the     latter  point,    however,     excludes    the   provisions    of    the
Betriebsverfassungsgesetz (BetrVG – German Works Council Constitution Act), which are
only applied when specifically referred to in the Agreement. The European Works Council
Act is also not applicable as an addition to the Agreement for the SE (section 47 (1) no. 2 of
the SEBG). Likewise, the provisions of the German MitbestG will only apply after the
Agreement, unless regulated otherwise. The provisions of the MitBestG in the German
subsidiaries of the SE remain valid (article 13 (3) b) of the SE Council Directive and section
47 (1) no. 1 of the SEBG). The relevant national provisions in the individual member states
also remain in place (§ 1.2 of the Agreement with the Special Negotiating Body).

b)     Size and composition of the SE Works Council (§ 7.2 to 7.4 of the Draft Terms
       of Conversion)

In § 7.2 to 7.4 of the Draft Terms of Conversion, details are given of the terms agreed with
the Special Negotiating Body regarding the formation of the SE Works Council (section 2.1 of
the Agreement with the Special Negotiating Body). This will replace the MAN Group's
existing European Works Council. The maximum number of members of the SE Works
Council, insofar as this is not altered by any term of the Agreement with the Special
Negotiating Body, is 24 when the total number of employees for all companies of the MAN
Group within the geographical scope of the Agreement with the Special Negotiating Body is
between 25,000 and 40,000, increasing to 26 in the case of 40,000 to 55,000 employees,
and 31 when the total number exceeds 55,000 (§ 2.2 of the Agreement with the Special
Negotiating Body). The seats of the SE Works Council are allocated to the EU states, in
accordance with section 3.1 of the Agreement, as follows: Each EU member state or EEA
treaty state, in which staff of the MAN Group are employed receives one seat on the SE
Works Council per 2,500 employees. The remaining seats are – with one exception –
allocated to the member states with the largest (remaining) number of employees. Those
member states which have not received a seat are grouped together in an Appointment
Group and receive one seat. The employees from the respective member states chosen to
become members of the SE Works Council are elected or appointed, according to the
relevant national provisions with regard to the SE Council Directive and SE Council
Regulation. If there is no election, appointment or initiation of the respective procedures
according to the national regulations for the appointment of a representative to the SE Works
Council in a member state by the time the SE Works Council is constituted, the respective
member state as well as the seats on the SE Works Council attributable to it and votes up to
the end of the term of office of the SE Works Council shall be attributable to the Appointment
Group (section 3.4 of the Agreement with the Special Negotiating Body). In addition, for the
period until MAN Ferrostaal AG and its affiliated Group companies (the MAN Ferrostaal
                                                                                           49
subgroup) leaves the MAN Group, an individual Appointment Group will be set up for those
member states, in which employees of the MAN Ferrostaal AG subgroup are employed. The
Appointment Group will be allocated two seats in the SE Works Council (section 3.2 of the
Agreement with the Special Negotiating Body). Appointments to the SE Works Council are
to be European, i.e. the Works Council will proportionately represent the member states of
the MAN Group based on the respective employee numbers. This will ensure that the
interests of the employees in the individual member states are given adequate consideration.
The following provisions apply for the remaining term of office of the SE Works Council:

Based on the estimated number of employees employed by the MAN Group in the relevant
member states of the EU and in the treaty states of the EEA at the time of the change of
legal form, the first SE Works Council will comprise a total of 26 members – not taking into
account the MAN Ferrostaal AG subgroup. The 26 seats of the first SE Works Council will be
allocated to the member states as follows: Germany 13, Poland 2, Austria 2 and Denmark 2
seats, while the UK, France, Spain, Slovakia, Italy, Czech Republic and the rest of the
member states included in the Appointment Group will each receive one seat (section 5.1 of
the Agreement with the Special Negotiating Body). Two additional seats will be reserved for
the MAN Ferrostaal subgroup if and for as long as it is still part of the MAN Group.

The election of the SE Works Council members will take place in the respective member
states for the relevant number of seats according to the national regulations applicable for
electing or appointing members to the Special Negotiating Body (section 5.2 (1) of the
Agreement with the Special Negotiating Body). This is based on the information provided at
the relevant time by the SE Executive Board, in accordance with section 4.1 of the
Agreement with the Special Negotiating Body, regarding the number of employees in the
individual member states and in the subgroups of the MAN Group covered by the
Agreement. For the Appointment Group, i.e. for the member states which do not appoint their
own candidates, the SE Works Council member shall be elected by country representatives
who in turn are elected in accordance with the procedures for the appointment of members to
the Special Negotiating Body in the respective member states (section 5.2 (2) of the
Agreement with the Special Negotiating Body). Candidates can be proposed by those works
councils and workers without an employee representative based in the respective member
state, according to the national provisions for the respective electoral body. During the
election of the members for the SE Works Council, care should be taken to ensure that
adequate consideration is given in each member state to the respective subgroups of the
MAN Group as well as the main production locations and sales and service organizations
(section 5.3 b) of the Agreement with the Special Negotiating Body). In member states to
which several SE Works Council seats are to be allocated, one of the members elected for
each MAN subgroup in the member state in which the respective controlling company is
headquartered should – insofar as possible – either represent the headquarters of the
subgroup or another company of the relevant subgroup (section 5.3 a) of the Agreement with
the Special Negotiating Body). This stipulation is aimed in particular at ensuring that the
employees of MAN AG and its associated companies, which are not part of another
subgroup, are adequately represented in the SE Works Council.

The members of the SE works are each elected for a period of office of four years (section
5.6 of the Agreement with the Special Negotiating Body). Should the total number of workers
in the MAN Group fall below or exceed the quantitative threshold values stipulated in section
2.2 of the Agreement with the Special Negotiating Body during the regular four-year period of
office, the number of seats in the SE Works Council shall remain unchanged until the end of
the period of office in progress (section 5.7 of the Agreement with the Special Negotiating
Body). This will safeguard the continuity and operation of the SE Works Council. In the case
of acquisition of a major subsidiary (i.e. following acquisition) together with its affiliated
companies, or if a new site is set up, so that more than 3,000 employees are added to scope
of the Agreement, the SE Works Council shall be increased by one seat and one further seat
per 10,000 additional employees – that is, a maximum of two additional seats – until the end
                                                                                           50
of the period of office in progress (section 5.8 of the Agreement with the Special Negotiating
Body). This takes into consideration fundamental fluctuations in the number of employees
and ensures that the workers who have just joined the MAN Group are represented
adequately and equally in the SE Works Council.

c)     Responsibilities, powers and rights of the SE Works Council to information and
       consultation by the MAN SE Executive Board (§ 7.6 to § 7.9 of the Draft Terms
       of Conversion)

§ 7.6 to 7.9 of the Draft Terms of Conversion outline the responsibilities, powers and rights of
the SE Works Council to information and consultation by the MAN SE Executive Board, in
accordance with the provisions of the Agreement with the Special Negotiating Body. The
responsibilities and powers of the SE Works Council are listed in section 10 of the
Agreement with the Special Negotiating Body. The SE Works Council will be responsible for
matters that affect the SE itself, one of its subsidiaries or one of its establishments in another
member state or for matters that extend beyond the powers of the competent bodies at the
level of each individual member state and which respectively have significant cross-border
impact affecting at least two (2) companies or establishments of the MAN Group in two
member states.

The rights of the SE Works Council to information and consultation by the Executive Board of
MAN SE are listed in section 11 of the Agreement with the Special Negotiating Body. In
accordance with these provisions, the Executive Board of the SE must inform and consult
with the SE Works Council in writing at least once during the calendar year in a joint meeting.
The SE Works Council’s information and consultation session will involve reports on the
business performance and prospects of the SE. This includes in particular, the issues listed
in section 11.1 a) to m) of the Agreement – insofar as they are within the scope of the
Agreement with the Special Negotiating Body and of essential significance for the MAN
Group. In addition, the SE Executive Board must – promptly and in written form – inform and
consult the SE Works Council regarding any extraordinary matters which have or will
significantly affect the interests of the employees of the MAN Group and which are in the
scope of validity of the Agreement (section 11.2 of the Agreement with the Special
Negotiating Body). The information and consultation of the SE Works Council is foreseen in
particular in the following cases: a) the closure or relocation of companies, establishments or
important parts thereof b) mass dismissals, c) first decreases in orders and/or revenue or in
conjunction with first decreases in orders and/or revenue in the previous quarter of more than
20% in comparison with the previous year (section 11.2 a) to c) of the Agreement with the
Special Negotiating Body). Insofar as the interests of the executive employees in Germany
are substantially affected, the chairpersons of the highest German executive employee
representation bodies and the SE Works Council are to be informed. Otherwise, the 1st
chairpersons of the German executive representative committees have the right to take part
generally once in the calendar year in a meeting of the SE Works Council and/or of the
Executive Committee and, in addition to this, in meetings of the SE Works Council, and to file
motions on the agenda if and to the extent that the interests of the executive employees are
substantially affected (section 11.8 of the Agreement with the Special Negotiating Body).
This rule ensures that the information and consultation requirements of the German
committee of executive employees are sufficiently taken into account.

The employee representative bodies and, insofar as there are no employee representative
bodies, the employees of the companies and establishments of the MAN Group not directly
represented on the SE Works Council will be informed by the SE Works Council of the
content of the respective meetings regarding the points in sections 11.1 a) to c) of the
Agreement with the Special Negotiating Body and, otherwise only when the employee
representative bodies or – to the extent that there are no employee representative bodies –
the employees of the companies and the establishments of the MAN Group are affected in
the individual case, by the sending of the meeting documents, thereby being informed and
                                                                                               51
also consulted about the subject matter of the respective meetings in writing. The employee
representative bodies of these MAN Group companies may also contact the chairman of the
SE Works Council with their ideas or submit written questions to the SE Works Council for a
response by the SE’s Executive Board at meetings of the SE Works Council (section 12 of
the Agreement with the Special Negotiating Body). Details regarding confidentiality clauses,
the financial and material means of the SE Works Council as well as the protection of the
Works Council members are set down in sections 13 und 14 of the Agreement with the
Special Negotiating Body and adhere to current legal requirements.

d)     Size of the SE Supervisory Board, nomination and election of the employee
       representatives on the SE Supervisory Board, rights and responsibilities of the
       employee representatives (§ 7.10 to § 7.12 of the Draft Terms of Conversion)

The terms of office of all members of the Supervisory Board of MAN AG (employee
representatives as well as the stockholder representatives) end when MAN AG’s change of
legal form to an SE takes effect. The Supervisory Board of MAN SE, in accordance with
article 40 (3) sentence 1 of the SE Council Regulation and section 17 (2) of the SEAG in
conjunction with section 15.1 of the Agreement with the Special Negotiating Body in
conjunction with article 7 (1) of the Articles of Incorporation of MAN SE, shall no longer
comprise 20, but 16 members and shall continue to be composed of an equal number of
stockholder and employee representatives.

The eight stockholder representatives on the new (first) MAN SE Supervisory Board shall be
elected by the Annual General Meeting (article 7.3 sentence 1 of the Articles of Incorporation
of MAN SE). § 7.10 to § 7.12 of the Draft Terms of Conversion set forth the provisions of the
Agreement with the Special Negotiating Body regarding the nomination and election of
employee representatives to the MAN SE Supervisory Board. The eight employee
representatives will be appointed to the SE Supervisory Board by the employees in
accordance with the provisions of the Agreement regarding the involvement of the
employees in the SE, as amended, which was concluded under the SEBG (article 7.3
sentence 2 of the MAN SE Articles of Incorporation). Of the eight employee representatives
in the Supervisory Board of the SE, six are employee representatives and two are union
representatives in accordance with section 15.2 of the Agreement with the Special
Negotiating Body. The SE Works Council shall divide the six seats on the SE Supervisory
Board filled by German employee representatives among the member states taking into
account the ratio of the employee numbers in the member states to the total number of
employees in the MAN Group (section 16.1 of the Agreement with the Special Negotiating
Body). The respective company employee representative in the individual companies of the
MAN Group – including the German executive representative committee – can submit
proposals to the respective highest employee representative body, in which they nominate
candidates for appointment to the SE Supervisory Board (section 16.2 a) of the Agreement
with the Special Negotiating Body). The respective highest employee representative bodies –
including the executive representative committees in Germany – can nominate candidates
for election to the SE Supervisory Board (section 16.2 b) of the Agreement with the Special
Negotiating Body). The two union employee representatives on the SE Supervisory Board
are nominated by the European Metalworkers' Federation (EMB) in agreement with the other
MAN Group unions represented at the MAN Group (section 16.3 of the Agreement with the
Special Negotiating Body). The SE Works Council subsequently elects and appoints the
respective employee representative to the SE Supervisory Board (section 16.1 of the
Agreement with the Special Negotiating Body). In accordance with section 16.6 of the
Agreement, the eight people, including their alternate members, listed in Annex 16.6 of the
Agreement will act as the employee representatives until after the second Annual General
Meeting of the SE, which will take place after the registration of the SE in the relevant
commercial register at the Amtsgericht (Local Court) in Munich.


                                                                                           52
The essential feature of this is that in the future, the employee representatives on the
Supervisory Board will thus no longer be exclusively elected by the MAN Group companies
or unions in Germany. Employees and unions in other member states of the EU and the
treaty states of the EEA will also participate in the elections. This sets a clear example for
MAN AG’s image as a European company. Unless otherwise stipulated in the Agreement,
the responsibilities and powers of the employee representatives in the Supervisory Board of
the SE, including their rights and duties, are based as they were in the past at MAN AG, on
the provisions of the Articles of Incorporation of the SE and German laws. In this respect, the
Agreement with the Special Negotiating Body regarding the involvement of employees in the
SE solely details the rights and duties of MAN AG employee representatives that already
existed at MAN AG more specifically (section 17 of the Agreement with the Special
Negotiating Body). In the event that there is no executive on the SE Supervisory Board – as
is the case for the 16 people serving on the Supervisory Board of MAN SE – MAN AG will
ensure through a separate agreement that matters concerning executives are discussed with
them in a suitable manner at Group level.

The remuneration of the employee representatives of the SE Supervisory Board is regulated
in section 18 of the Agreement with the Special Negotiating Body. In addition, employee
representatives are also subject to legal confidentiality requirements as well as the
stipulations in section 13 of the Agreement with the Special Negotiating Body regarding the
maintenance of confidentiality concerning issues dealt with by the SE Supervisory Board
(section 19 of the Agreement with the Special Negotiating Body).

e)     Entry into force, renegotiation and termination of the Agreement (§ 7.13 to §
       7.18 of the Draft Terms of Conversion)

§ 7.13 to § 7.18 of the Draft Terms of Conversion set forth the provisions of the Agreement
with the Special Negotiating Body regarding the entry into force, renegotiation and
termination of the Agreement.

The Agreement shall come into force – insofar as legally permissible and applicable – on the
day the (approved) resolution regarding the change of legal form of MAN AG is passed at the
Annual General Meeting and in addition, at the time when MAN AG changes its legal form. It
has a fixed duration and ends on December 31, 2016 (section 21.1 of the Agreement with
the Special Negotiating Body). As of this time, both the Executive Board of the SE and the
SE Works Council (as representatives of the Special Negotiating Body) have the right to
terminate the Agreement by submitting due notice of eight months (section 21.2 of the
Agreement with the Special Negotiating Body). This clause does not affect the right to
terminate the Agreement in exceptional cases.

The terms of the Agreement can be adjusted at any time with the mutual agreement of both
parties (section 20.2 of the Agreement with the Special Negotiating Body). In the case of
changes in the structure of the SE under the terms of section 18 (3) of the SEBG that are
likely to diminish employee involvement in the SE, the SE Works Council as well as the
Executive Board of the SE will be entitled to negotiate an appropriate adaptation of this
Agreement (section 20.3 sentence 1 of the Agreement with the Special Negotiating Body).
Insofar as this is not covered by the provisions of this Agreement, "structural changes" apply
in cases in which a) measures result in significant changes to the structure of the MAN
Group which affect at least 20% of the respective number of employees of the MAN Group,
b) the Management system is changed (from a two-tier to a one-tier structure) and c) a
subgroup is acquired within the scope of the Agreement, i.e. the purchase by the SE of
significant shares in other companies, insofar as this makes a significant impact on the
overall structure of the SE.

In the event of renegotiations, the SE Works Council shall act on account of the Special
Negotiating Body (section 20.1 of the Agreement with the Special Negotiating Body). In the
                                                                                            53
event of renegotiations, the entire Agreement will not be renegotiated in each case. Instead,
depending on the reason for the renegotiations, only those provisions of this Agreement that
are specifically affected by the reason for the renegotiations will be renegotiated (section
20.4 of the Agreement with the Special Negotiating Body).

In the event that, owing to structural changes in the sense of section 20.3 of the Agreement
with the Special Negotiating Body, it is not possible to reach a settlement with the other party
within one year of the request for an adjustment following the relevant resolution for
renegotiation passed either by the SE Works Council or by the SE Executive Board, each
party must pass a resolution defining those points of the renegotiation on which it was not
possible to reach a mutually acceptable solution (section 20.5 sentence 1 a) of the
Agreement with the Special Negotiating Body). For the points listed in the respective
resolution, from the time the resolution is passed until the end of the current term of office of
the SE Works Council at the time the resolution is passed, the SE Works Council shall
continue to be subject without changes to the provisions under sections 1 to 14 and sections
20 to 22 of the Agreement with the Special Negotiating Body and, up to the end of the
current term of office of the SE Supervisory Board, the SE Supervisory Board to the
provisions from section 1 and sections 15 to 22 of the Agreement with the Special
Negotiating Body. After expiry of the respective term of office of the SE Works Council or the
SE Supervisory Board, the individual provisions of the SEBG shall apply respectively
(standard statutory rules). This ensures the continued operational capability of the SE Works
Council and SE Supervisory Board for the respective periods in progress. It is only after the
termination of the respective periods of office that the standard statutory rules come into
force, under the terms of the SEBG, for those provisions for which at that time there is no
agreement.

In the event of a termination of the Agreement with the Special Negotiating Body, the
provisions of the Agreement remain valid in their entirety until the finalization of a new
Agreement, initially for six months. This period can be prolonged for an additional six months
with the mutual consent of both parties. This ensures that both the SE Works Council and SE
Supervisory Board are able to carry out their duties during this period (section 21.4 of the
Agreement with the Special Negotiating Body). If by that time the parties have not reached
an agreement, the provisions of sections 1 to 14 and sections 20 to 22 of the Agreement with
the Special Negotiating Body remain in force in their entirety until the end of the ongoing
period of office of the SE Works Council, just as the provisions of section 1 and sections 15
to 22 of the Agreement with the Special Negotiating Body remain in force until the end of the
SE Executive Board’s period of office. After termination of the respective periods of office,
the provisions of the SEBG come into effect, according to which the participation of
employees in an SE in Germany is regulated (standard statutory rules) (section 21.4 of the
Agreement with the Special Negotiating Body).

Regardless of a termination of the Agreement, a separate arbitration process is foreseen in
the event that there are differences of opinion between the Executive Board and the SE
Works Council regarding the contents, interpretation and implementation of the Agreement
(section 22.2 of the Agreement with the Special Negotiating Body).

Finally, in the event that the parties should not be able to reach an agreement within the
periods specified above, and the standard statutory rules are used, § 7.17 and § 7.18 of the
Draft Terms of Conversion set forth the provisions of the solution as regards operational and
managerial codetermination. For details of the standard statutory rules, see § 7.17 and §
7.18 of the Draft Terms of Conversion.




                                                                                              54
f)     Other consequences of the change of legal form for the employees and their
       representative bodies (§ 7.19 to § 7.22 of the Draft Terms of Conversion)

§ 7.19 to § 7.22 of the Draft Terms of Conversion make it clear that apart from the above-
listed changes, the conversion of MAN AG to an SE does not affect the employees of the
MAN Group in any way. The existing employment contracts of MAN AG employees as well
as those of the employees working for the subsidiaries in the MAN Group remain unaffected
by the change of legal form and continue unchanged with the respective company of the
MAN Group.

Equally, for the members of each of the existing employee representative bodies of MAN AG
and the companies of the MAN Group, – with the exception of the members of the European
Works Council – no change results from the company's change of legal form to an SE. The
existing employee representative bodies each remain in place – with the exception of the
European Works Council. The existing employment agreements and wage agreements in
Germany as well as in the other member states of the EU, and the collective agreements
made with the treaty states of the EEA continue to apply according to the terms of the
respective agreement. No other measures are foreseen or planned in connection with the
change of legal form which would have an effect on the situation of the employees of MAN
AG and the companies of the MAN Group.

g)     Costs (§ 7.23 of the Draft Terms of Conversion)

§ 7.23 of the Draft Terms of Conversion clarifies that the costs arising from the establishment
and operation of the Special Negotiating Body, including the material and personal expenses
incurred in connection with the activities of the Special Negotiating Body, including the
negotiations, will be borne by MAN AG (after its change of legal form: MAN SE), as far as
their incurrence is regarded to be or have been necessary. The total permissible costs are
set down in article 27 of the Articles of Incorporation as being any amount of up to
€3,000,000.

1.8.   Auditor (§ 8 of the Draft Terms of Conversion)

According    to   §    8    of   the   Draft    Terms    of    Conversion,      KPMG        AG
Wirtschaftsprüfungsgesellschaft, Munich will be appointed as auditors for the first fiscal year
of MAN SE. The first fiscal year of MAN SE is the fiscal year in which the change of legal
form of MAN AG to a European stock corporation is listed in the commercial register of MAN
AG.

1.9.   Control and profit-and-loss transfer agreements (§ 9 of the Draft Terms of
       Conversion)

§ 9 of the Draft Terms of Conversion makes it clear that the control and profit-and-loss
transfer agreements between MAN AG and the companies of the MAN Group named in § 9
of the Draft Terms of the Conversion continue in their current form with MAN SE. Thus, the
change of legal form of MAN AG to an SE does not lead to any changes in this regard.

2.     Explanation of the Articles of Incorporation of MAN SE

MAN AG’s form changes to that of an SE when the change of legal form enters into force.
The Articles of Incorporation/Bylaws of MAN AG will be superseded by the new Articles of
Incorporation of MAN SE. These Articles of Incorporation, which are part of the Draft Terms
of Conversion, are included as Annex 1 and must be approved by a majority at the MAN AG
Annual General Meeting, with this majority representing at least three quarters of the share
capital represented.

                                                                                            55
The present draft of the Articles of Incorporation for MAN SE is based on the existing Articles
of Incorporation/Bylaws of MAN AG. It was possible in this respect to adopt most of the
current version of the Articles of Incorporation of the MAN AG for the future MAN SE, since
the relevant rules of the SE Council Regulation and SEAG largely correspond to the rules
used for the Articles of Incorporation of a German stock corporation company. Individual
points were also updated or modernized. The draft of the Articles of Incorporation of MAN SE
is explained below:

2.1.   Company name, headquarters (article 1 of the Articles of Incorporation)

The name of MAN AG will be changed to "MAN SE". This change reflects its new legal form
and is required pursuant to article 11 (1) of the SE Council Regulation. In addition the SE will
be domiciled in Munich which will also be home to its headquarters.

2.2.   Purposes of the Company (article 2 of the Articles of Incorporation)

The purposes of MAN SE will be identical to the purposes of MAN AG as found in article 2 of
the Articles of Incorporation/Bylaws of MAN AG.

2.3.   Notices and information (article 3 of the Articles of Incorporation)

The provisions regarding company notices and information to holders of listed securities is
worded in exactly the same way as in the Articles of Incorporation/Bylaws of MAN AG.

2.4.   Share capital and shares (article 4 of the Articles of Incorporation)

Article 4 (1) and (2) of the Articles of Incorporation stipulate that the apportionment of MAN
AG’s share capital into no-par values shares, common shares and nonvoting preferred
shares will be continued for MAN SE. Shares will be made out to the bearer in MAN SE as
well and the right of stockholders to certification of their shares will be excluded.

Article 4 (3) of the Articles of Incorporation explains that the share capital has been provided
by MAN AG’s change of legal form to an SE. The inclusion of such a provision is necessary
to adhere to the requirements under German stock corporation law stipulated when founding
a new company.

Article 4 (4) of the Articles of Incorporation contains Authorized Capital 2005 of MAN AG,
which is based on the resolution passed at MAN AG's Annual General Meeting of June 3,
2005. The Executive Board is accordingly authorized to increase the share capital, with the
consent of the Supervisory Board, by up to €188,211,200 by issuing bearer shares of
common stock on one or more occasions in return for cash and/or contributions in kind in the
period up to June 2, 2010 (Authorized Capital 2005). The provisions regarding the exclusion
of stockholder subscription rights in connection with the utilization of Authorized Capital 2005
were also included, unchanged, in the new Articles of Incorporation.

In regard to the proposal under item 6 of the agenda outlined in the Invitation to the Annual
General Meeting of MAN AG on April 3, 2009, however, two new sentences (sentences 3
and 4) were added to article 4 of the Articles of Incorporation. Accordingly, the Executive
Board is also authorized, with the consent of the Supervisory Board, to disapply
stockholders’ subscription rights for up to €4 million of Authorized Capital 2005 and to issue
new shares in return for cash to executives with managerial responsibility (managers) of the
Company and/or affiliated Group companies. Provision can also be made to ensure that the
required contributions are covered according to the conditions of section 204 (3) of the AktG.
Please refer to section V. 2.2. of this report for more information on the extension of the
approval for Authorized Capital 2005. The extension will be cancelled if the Annual General
Meeting rejects the proposal under item 6 of the agenda outlined in the Invitation to the
                                                                                             56
Annual General Meeting on April 3, 2009. In this case, the Executive Board will register the
Articles of Incorporation of MAN SE in the commercial register without sentences 3 and 4 of
article 4 (4) (see above, section V.2.2 of this report).

Article 4 (5) of the Articles of Incorporation adopts the exact wording of the provisions
regarding Contingent Capital 2005 that are included in article 4 (4) of MAN AG’s Articles of
Incorporation/Bylaws. Accordingly, the share capital has been contingently increased by up
to €76,800,000, composed of up to 30,000,000 bearer shares of common stock. The
contingent capital increase will only be implemented to the extent that the holders of
conversion rights or options under bonds issued for cash consideration by MAN SE or its
Group companies by virtue of the authorizing resolution of the Annual General Meeting on
June 3, 2005, supplemented by the resolution of the Annual General Meeting on May 10,
2007, exercise their conversion rights or options, and provided that other forms of settlement
are not used. For the first time, the new stock will be entitled for dividend for the year of
issuance (Contingent Capital 2005).

In connection with the change of legal form, a new paragraph was added to article 4 (6) of
the Articles of Incorporation. It provides for the regulations that must be followed should MAN
AG make use of Authorized Capital 2005 and/or Contingent Capital 2005 before MAN AG's
change of legal form to an SE, i.e. before its entry in the commercial register. In such a case,
the relevant authorization limits for increasing share capital will reduce in accordance with
article 4 (4) or (5) of the Articles of Incorporation, and the share capital figure and the
numbers of shares specified under article 4 (1) and (3) will increase accordingly. This rule is
necessary in order to ensure the consistency of the share capital, the contingent capital and
the authorized capital at the time of the change of legal form.

Please refer to section V. 2.2 for more information on the continued applicability of the
declaration of the Executive Board of MAN AG, dated May 24, 2005, concerning the use of
Authorized Capital 2005.

2.5.   Composition of the Executive Board (article 5 of the Articles of Incorporation)

With the exception of the first paragraph, article 5 of the Articles of Incorporation follows the
exact wording of the Articles of Incorporation of MAN AG. In accordance with article 5 (1), the
Executive Board will consist of at least two people as in the past at MAN AG. The
Supervisory Board will determine the number of members on the Executive Board. In
accordance with article 5 (1) sentence 3 of the Articles of Incorporation, the members of the
Executive Board will be appointed by the Supervisory Board for a period of up to five years.
In this manner, the Articles of Incorporation follow the stipulations of article 46 (1) of the SE
Council Regulation concerning the terms of office for Executive Board members, which
according to the SE Council Regulation, may not exceed six years. The rule proposed for
the future MAN SE adheres to the provisions applicable for MAN AG under section 84 (1) of
the AktG.

2.6.   Representation of the Company (article 6 of the Articles of Incorporation)

The provisions regarding the representation of the company follow the exact wording of
article 6 of MAN AG’s Articles of Incorporation/Bylaws. The Company will be represented by
two Executive Board members or by one Executive Board member together with a Prokurist
(authorized signatory). However, the Supervisory Board may confer power of representation
upon any Executive Board member enabling him to also represent the Company alone.




                                                                                              57
2.7.   Number and election of Supervisory Board members (article 7 of the Articles of
       Incorporation

Article 7 (1) of the Articles of Incorporation determines that the Supervisory Board of MAN
SE shall no longer consist of 20 members, as with MAN AG, but rather of 16 members. Eight
of these shall be stockholder representatives and eight shall be employee representatives.
With regard to the size of the Supervisory Board, the Articles of Incorporation thus follow the
provisions of section 17 (2) of the SEAG in conjunction with section 15.1 of the Agreement
with the Special Negotiating Body (cf. the explanations contained above in section V.5.2 of
this report).

Pursuant to article 7 (2) sentence 1 of the Articles of Incorporation of MAN SE, the term of
office for members of the MAN SE Supervisory Board shall be 5 years. The period between
the close of one Annual General Meeting and the close of the next will be considered as one
year in office. This rule follows exactly the same wording as the former rules of MAN AG.
Due to the change of legal form to an SE and with regard to section 16.6 of the Agreement
with the Special Negotiating Body, a diverging rule was established for the first term of office.
Article 7 (2) sentence 2 of the Articles of Incorporation therefore states that, unlike the
regular five-year terms, the first term of office of the Supervisory Board will run until the end
of the second Annual General Meeting of the company, which will take place after the entry
of MAN SE in the relevant commercial register of the local court in Munich. Article 7 (3)
sentence 1 of the Articles of Incorporation states that the eight stockholder representatives in
the Supervisory Board are to be elected by the Annual General Meeting. This corresponds to
the existing regulations at MAN AG. MAN AG’s employee representatives were elected
according to the provisions of the 1976 MitbestG. As regards the election of the employee
representatives to the MAN SE Supervisory Board, the regulations agreed with the Special
Negotiating Body will replace the provisions of the 1976 MitbestG applied by MAN AG.
Accordingly, article 7 (3) sentence 2 of the Articles of Incorporation states that the eight
employee representatives on the Supervisory Board will be appointed to the SE Supervisory
Board by the employees, in accordance with the provisions of the Agreement regarding the
involvement of the employees in the SE, which complies with the requirements of the SEBG.
The Agreement with the Special Negotiating Body provides for the SE Works Council to elect
and appoint the eight employee representatives to the MAN SE Supervisory Board (sections
16.2 and 16.3 of the Agreement with the Special Negotiating Body).

Article 7 (4) of the SE Articles of Incorporation essentially corresponds with the existing rule
in article 7 (3) of MAN AG's Articles of Incorporation/Bylaws regarding the election of
alternate members for the Supervisory Board, to be elected at the Annual General Meeting.

A new addition was article 7 (4) sentence 5 of the Articles of Incorporation. According to this
provision, an alternate member who moves up to the Supervisory Board and subsequently
leaves before the term expires will take his original place in the order determined for
alternate members for the Supervisory Board members. This new provision serves only for
purposes of clarification and simplification and corresponds to the determinations regularly
resolved by the Annual General Meeting. Article 7 (4) sentence 6 of the Articles of
Incorporation additionally clarifies that if a Supervisory Board member appointed by the
employees leaves prior to the end of his term of office, he is to be succeeded by the alternate
member appointed for such a case in accordance with the provisions of the Agreement with
the Special Negotiating Body concerning employee involvement in the SE.

Article 7 (5) of the Articles of Incorporation, according to which elections of alternate
members apply until an election and at most for the rest of the term of office of the
Supervisory Board member leaving, follows the exact wording of the existing Article 7 (4) of
MAN AG’s Articles of Incorporation/Bylaws.
                                                                                              58
2.8.    Chairman of the Supervisory Board (article 8 of the Articles of Incorporation)

Article 8 of the Articles of Incorporation has the same wording as article 8 of the Articles of
Incorporation/Bylaws of MAN AG. According to these provisions, in the first meeting to take
place during its term of office, the Supervisory Board will elect both a chairman and deputy
chairman from among its members for its period of office. If the chairman or his deputy
leaves during his term of office, the Supervisory Board shall hold a reelection without delay.
This election must take place before other decisions are made. Pursuant to article 42
sentence 2 of the SE Council Regulation, however, only a stockholder representative may be
elected as chairman of the Supervisory Board.

2.9.    Rules of procedure and committees (article 9 of the Articles of Incorporation)

Article 9 of the Articles of Incorporation has the same wording as article 9 of the Articles of
Incorporation/Bylaws of MAN AG. Accordingly, the Supervisory Board may draw up rules of
procedure for itself. The Supervisory Board may form Supervisory Board committees from
among its members and determine their responsibilities in rules of procedure. The decision-
making powers of the Supervisory Board may also be delegated to the Supervisory Board
committees to the extent legally permissible.

2.10.   Meetings and decisions of the Supervisory Board (article 10 of the Articles of
        Incorporation)

Compared with the corresponding article in MAN AG’s Articles of Incorporation/Bylaws,
article 10 of the SE Articles of Incorporation contains numerous new additions regarding
convening and passing resolutions during SE Supervisory Board meetings. Article 10 (1) of
the Articles of Incorporation states that meetings of the Supervisory Board will be convened
by the Chairman with at least 14 days’ notice. In urgent cases, the Chairman may
reasonably reduce the notice period. However, care should be taken to ensure the
Supervisory Board’s ability to function. Invitations may be issued in written form, by fax, by e-
mail or by any other conventional means of telecommunication.

Article 10 (2) of the Articles of Incorporation states that, as a rule, resolutions of the
Supervisory Board will be passed in meetings where all members are present. However, if
the Chairman of the Supervisory Board determines accordingly, meetings of the Supervisory
Board may be held in the form of a videoconference or teleconference. Alternatively,
individual Supervisory Board members may take part in meetings via a video or telephone
link. In such cases, votes may be cast and resolutions passed in a videoconference, via a
video link-up or by telephone. Outside meetings, votes may be cast and resolutions passed
in text form (in writing, by fax or via e-mail) or by any other conventional means of
telecommunication if ordered by the Chairman of the Supervisory Board and no member of
the Supervisory Board raises any immediate objections to this procedure in text form (as
defined by section 126b of the BGB). The objective of the new provisions is to enable the
work of the SE Supervisory Board to be performed more flexibly and, thus, more efficiently
(article 10 (2) sentence 3 of the Articles of Incorporation).

As in the past, the Supervisory Board constitutes a quorum if at least half of its members
take part in the resolution process (article 10 (3) of the Articles of Incorporation). Unless
otherwise provided for by law, in accordance with article 10 (2) of the Articles of
Incorporation, resolutions of the Supervisory Board will require a simple majority of the votes
cast. Article 10 (4) of the Articles of Incorporation clarifies that in the event of a tie, the
Chairman will have the casting vote. If he does not take part in the resolution process, the
deputy chairman will have the casting vote if he is a stockholder representative. This
guarantees compliance with the requirements of article 50 (2) sentence 2 of the SE Council
Regulation in conjunction with article 42 sentence 2 of the SE Council Regulation.
                                                                                              59
Accordingly, in a body composed of an equal number of stockholder and employee
representatives, the stockholders shall have the right of final decision.

As is the case with MAN AG, the negotiations and resolutions of the Supervisory Board are
to be recorded in minutes of the meeting, which must then be signed by the chair of the
meeting (article 10 (5) of the Articles of Incorporation/Bylaws). The Supervisory Board is
authorized to make amendments to the Articles of Incorporation that affect the wording only
and to adopt resolutions concerning such amendments (article 10 (6) of the Articles of
Incorporation). In this regard, too, no modifications have been made to the provisions of MAN
AG’s Articles of Incorporation.

2.11.   Required Consent (article 11 of the Articles of Incorporation)

The SE Articles of Incorporation stipulate that certain types of transactions may only be
conducted by the Executive Board with the consent of the Supervisory Board (article 11 (1)).
The consent of the Supervisory Board is required for

a)      the acquisition and sale of shareholdings in companies, establishments or parts
        thereof if the proceeds of such shareholdings exceed the limits set by the Supervisory
        Board;

b)      the conclusion of agreements between business enterprises.

Article 11 of the Articles of Incorporation makes certain kinds of business subject to the
consent of the Supervisory Board and deviates in this respect from the previous provision in
article 11 of MAN AG’s Articles of Incorporation/Bylaws. These previously only stipulated that
the Supervisory Board could decide that certain management measures required its
approval. This is based on article 48 (1) of the SE Council Regulation. Accordingly, the
Articles of Incorporation of an SE must list the categories of transactions which require the
consent of the supervisory body in a two-tier system. The catalog of business matters
requiring the consent of the Supervisory Board now listed under article 11 (1) of the Articles
of Incorporation was already included in the rules of procedure of MAN AG’s Supervisory
Board, so that this does result in a significant change. This list is not final however; the
Supervisory Board may resolve in accordance with article 11.2 of the Articles of Incorporation
that its consent is required for additional types of transactions or specific management
measures. This complies with the provision set forth in article 48 sentence 2 of the SE
Council Regulation in conjunction with section 19 of the SEAG.

2.12.   Remuneration (article 12 of the Articles of Incorporation)

The provisions concerning remuneration and expenses of the Supervisory Board members
are the same as those for MAN AG. One special provision, however, applies to the first MAN
SE Supervisory Board. Under German stock corporation law (pursuant to section 113 of the
AktG), the provisions concerning remuneration and expenses in the SE Articles of
Incorporation do not apply to the first SE Supervisory Board. In this case, the Annual General
Meeting of the SE shall decide on the remuneration of the Supervisory Board. Since this is a
direct consequence of the legal requirements, a corresponding provision in the Articles of
Incorporation is not necessary.

2.13.   Location of the Annual General Meeting (article 13 of the Articles of
        Incorporation)

As with MAN AG, the Annual General Meeting of MAN SE will be held in the city where the
Company’s headquarters are located or in a city that is home to a German stock exchange.


                                                                                            60
2.14.   Convening of the Annual General Meeting (article 14 of the Articles of
        Incorporation)

As at MAN AG, the Annual General Meeting of MAN SE is convened by the Executive Board
or MAN SE. One difference, compared with MAN AG however, is that the Annual General
Meeting, in accordance with article 54 (1) sentence 1 of the SE Council Regulation must take
place within the first six months of a fiscal year. For MAN AG, pursuant to section 175 (1)
sentence 2 of the AktG, the deadline was within a period of eight months. Since the Annual
General Meeting of MAN AG has always been held in April in recent years, the change of
legal form of MAN AG to an SE will not lead to any changes in this regard. Article 14 (2) of
the Articles of Incorporation adopts the provisions which appeared in article 14 (2) of MAN
AG’s Articles of Incorporation/Bylaws regarding the announcement of the invitation to the
Annual General Meeting. This stipulates that announcements must be made early enough to
observe the legally stipulated notice period for convening the Annual General Meeting.

2.15.   Conditions for participating in the Annual General Meeting (article 15 of the
        Articles of Incorporation)

MAN SE’s provision regarding the conditions for participation of the stockholders at the
Annual General Meeting, appearing under article 15 of the Articles of Incorporation, follows
the exact wording as the corresponding article in MAN AG's Articles of Incorporation/Bylaws.

2.16.   Chair of the Annual General Meeting and Audio and Video Transmission (article
        16 of the Articles of Incorporation)

Article 16 (1) and (2) of the Articles of Incorporation have the same wording as article 16 (1)
and (2) of the Articles of Incorporation/Bylaws of MAN AG. According to these provisions,
the Chairman of the Supervisory Board will chair the Annual General Meeting. If he is unable
to do so, the Supervisory Board will appoint a chairperson for the meeting. The chairperson
will determine the order in which items on the agenda are discussed as well as the type of
voting procedure.

At the end of 2009, a change will presumably be made to section 118 of the AktG by the
Gesetz zur Umsetzung der Aktionärsrichtlinie (ARUG – Act to implement stockholder
regulations). According to the ARUG, paragraphs 3 and 4 of section 118 of the AktG are to
be redefined. This will mean that, in accordance with section 129 (1) of the AktG, only the
Articles of Incorporation or the Rules of Procedure can authorize the Executive Board to
broadcast the Annual General meeting in audio and video format. It is for this reason that the
Articles of Incorporation now state that the Annual General Meeting may be broadcast in
audio and video format unless the chairperson orders otherwise (article 16 (3) sentence 1 of
the Articles of Incorporation).

Article 16 (4) is a new addition to the Articles of Incorporation. This provision authorizes the
chairperson to reasonably limit the stockholders' rights to pose questions and to speak. The
other provisions concerning the chair of the MAN AG Annual General Meeting have been
reincluded in the Articles of the Incorporation for purposes of clarification.

2.17.   Voting rights (article 17 of the Articles of Incorporation)

The provisions in article 17 of the Articles of Incorporation/Bylaws of MAN AG concerning
voting rights have the same wording in the Articles of Incorporation of MAN SE. According to
these provisions, each share will entitle the holder to one vote in the Annual General
Meeting, insofar as the voting right is not excluded by law or by these Articles of
Incorporation. Voting rights may also be exercised by an authorized representative. Unless
granting power of attorney is otherwise regulated by law, power of attorney must be granted
in written form or – if determined accordingly by the Company and if in accordance with the
                                                                                             61
more specific provisions to be announced when the Annual General Meeting is convened –
via fax or electronically.

2.18.   Elections (article 18 of the Articles of Incorporation)

Article 18 of the Articles of Incorporation has the same wording as article 18 of the Articles of
Incorporation/Bylaws of MAN AG. According to this provision, if the necessary majority is not
obtained on the first ballot in elections, the two candidates with the highest number of votes
will be shortlisted. If a vote for either of the shortlisted candidates results in a tie, lots will be
drawn to decide the election in favor of one candidate.

2.19.   Fiscal year (article 19 of the Articles of Incorporation)

As for MAN AG, the fiscal year of MAN SE is the calendar year. The second sentence of
article 19 included in MAN AG’s Articles of Incorporation/Bylaws, according to which the
period from July 1, 2000 to December 31, 2000 was regarded as a short fiscal year, did not
need to be included.

2.20.   Preparation of the Annual Financial Statements and the Management Report
        (article 20 of the Articles of Incorporation)

Article 20 of the Articles of Incorporation has the same wording as article 20 of the Articles of
Incorporation/Bylaws of MAN AG. According to this provision, the Executive Board shall
prepare the annual financial statements and management report for the past fiscal year
within the first three months of the current fiscal year. It must submit these documents to the
Supervisory Board together with the proposal on the appropriation of net retained profits that
it intends to make to the Annual General Meeting. No modification was made to this
provision, since article 60 of the SE Council Regulation applies to the SE in the same way as
the provisions of the AktG.

2.21.   Appropriation of profit for the period (article 21 of the Articles of Incorporation)

The provision regarding the appropriation of profit for the period appearing under article 21 of
the Articles of Incorporation follows the same wording as that used in the provision appearing
under article 21 of MAN AG’s Articles of Incorporation/Bylaws. It states that amounts that
ensue from the provisions of the AktG are thus mandatory and must be allocated to the legal
reserves. The Executive Board and Supervisory Board may allocate amounts from the profit
for the year to other reserves as follows:

-       up to half of the profit for the year without regard to the level of other revenue
        reserves and

-       more than half of the profit for the year if the other revenue reserves do not exceed
        half of the share capital and remaining net retained profits do not fall below 4% of the
        share capital.

If the Annual General Meeting adopts the annual financial statements, more than half of the
profit for the year must be allocated to other revenue reserves.

2.22.   Adoption of the Annual Financial Statements (article 22 of the Articles of
        Incorporation)

As is the case with MAN AG, if the SE Supervisory Board approves the annual financial
statements, they are thereby adopted.


                                                                                                   62
2.23.   Resolutions of the Annual General Meeting regarding accounting matters
        (article 23 of the Articles of Incorporation)

With one exception, article 23 of the Articles of Incorporation uses the same wording as
article 23 of the Articles of Incorporation/Bylaws of MAN AG: since in accordance with article
54 (1) sentence 1 of the SE Council Regulation, the Annual General Meeting of MAN SE
must take place within the first six months of the fiscal year, the Annual General Meeting of
MAN SE must resolve on the following matters within the first six months after the conclusion
of the fiscal year:

-       the appropriation of net retained profits,
-       the approval of the Executive and Supervisory Board members’ actions and
-       the election of the auditor.

In the special cases provided for by law, the Annual General Meeting of MAN SE will also
resolve on the adoption of the annual financial statements.


2.24.   Appropriation of net retained profits (article 24 of the Articles of Incorporation)

Article 24 of the Articles of Incorporation has exactly the same wording as article 24 of the
Articles of Incorporation/Bylaws of MAN AG. Of particular importance is that there is no
difference made between MAN AG and MAN SE regarding the dividend entitlement of the
common stockholders and preferred stockholders.

2.25.   Profit distribution for new shares (article 25 of the Articles of Incorporation)

Likewise, it shall apply to MAN SE that when increasing the share capital, a type of profit
distribution in derogation of the provisions under section 60 (2) of the AktG may be resolved
for the new shares.

2.26.   Official language (article 26 of the Articles of Incorporation)

Article 26 of the Articles of Incorporation has been re-included for the purpose of clarification.
This specifies that Annual General Meetings and Supervisory Board meetings will be held in
German. Invitations, publications, announcements, submissions and minutes of meetings in
particular must all be drawn up and submitted in German unless otherwise stipulated under
article 15 or elsewhere in these Articles of Incorporation. If interpretation or translation
services are provided by the Company, the German version of material translated/interpreted
will prevail in the event of any discrepancies regarding the content and/or formal
requirements of such material.

2.27.   Expenses for formation (article 27 of the Articles of Incorporation)

Article 27 of the Articles of Incorporation provides a specific provision regarding the
expenses for the formation stating that the Company will bear all costs up to a total amount
of €3 million.




                                                                                               63
VII.   Effects of the change of legal form

1.     Corporate law effects

1.1.   Legal effects of the change of legal form

Upon the registration of MAN SE in the commercial register of the city in which the Company
is domiciled, MAN AG’s change of legal form to MAN SE will enter into force. MAN AG’s
change of legal form to an SE will neither lead to a dissolution of the company nor to the
formation of a new legal entity. Rather, the legal and economic identity of the Company are
being maintained by the change of legal form (article 37 (2) of the SE Council Regulation).
There is no transfer of assets. Because of the preservation of the identity of the Company as
a legal entity, the interests of stockholders in the Company shall likewise continue without
change. However, the legal rules applicable to the Company will change as a result of the
change of legal form. When the change of legal form enters into force, the provisions of the
SE Council Regulation, the SEAG, the SEBG, the Agreement with the Special Negotiating
Body, the 1976 MitbestG – unless otherwise regulated in the Agreement with the Special
Negotiating Body – as well German stock corporation law shall apply, insofar as reference is
made to the above.

1.2.   Dividend entitlements

The dividend entitlements of the stockholders are not affected by the change of legal form of
MAN AG to MAN SE.

1.3.   Stockholder structure of MAN SE after the change of legal form

The interests held in the Company by the stockholders of MAN AG are not affected by the
change of legal form. The bearers of common shares receive the same number of shares
they held in MAN AG prior to the Company's change of legal form. The bearers of nonvoting
preferred shares receive the same number of preferred shares they held in MAN AG prior to
the Company's change of legal form. The notional amount of €2.56 of each no-par value
share in the share capital shall be maintained as it was immediately before the change of
legal form.

1.4.   German Corporate Governance Code

Each year, pursuant to section 161 of the AktG, the Executive Board and the Supervisory
Board of listed stock corporations have to declare that the recommendations of the
Government Commission on the German Corporate Governance Code, published by the
Federal Ministry of Justice in the official section of the elektronischer Bundesanzeiger
(Electronic Federal Gazette), have been and are being complied with, or which of the
recommendations have not been or are not being applied. These declarations must be
permanently accessible to the stockholders. The German Corporate Governance Code,
which is updated by the Government Commission each year, contains essential provisions
regarding management and supervision (company management), and includes both
provisions under German stock corporation law as well as recommendations and
suggestions. Neither the recommendations nor suggestions are legally binding. Only the
statutory provisions must be applied by companies. However, listed German stock
corporations must issue a declaration of conformity each year, which clearly states whether
and how they have deviated from any recommendations. The Executive Board of MAN AG
last issued a corresponding declaration in December 2008. It can be viewed on MAN AG's
                                                                                          64
website. In this document, the Executive Board and the Supervisory Board declare whether
and to what extent they have deviated from which recommendations.

The SE Council Regulation does not contain any express provisions on the applicability of
the German Corporate Governance Code. However, by virtue of the reference to member
state stock corporation law in its entirety under article 9 (1) c) (ii) of the SE Council
Regulation, section 161 of the AktG also applies to an SE. Consequently, MAN SE – like
MAN AG – must also declare on an annual basis whether it complies with the German
Corporate Governance Code.

2.     Effects of the change of legal form in accounting

According to article 37 (2) of the SE Council Regulation, MAN AG’s change of legal form to
an SE leads neither to a dissolution of the company nor to the formation of a new legal entity.
The legal and economic identity of the Company remains unchanged. The presentation and
other rules relating to the annual financial statements and the management report as well as
the consolidated financial statements and the Group management report continue to be
based on the provisions governing a German stock corporation. Thus the change of legal
form has no effects on accounting.

3.     Tax effects of the change of legal form

Due to the preservation of the legal identity of a company with its headquarters in Germany,
the change of legal form to an SE has no tax effects under German tax law. In principle, in
terms of German income tax, the future distribution of dividends of MAN SE and/or sale of
MAN shares will continue to have the same tax consequences for stockholders of MAN SE
as before the change of legal form, unless in the law or the actual situation changes. No
German capital transfer tax, VAT or stamp duty results from MAN AG’s change of legal form
to an SE.

Stockholders of MAN AG are advised to talk to their tax consultants regarding any possible
tax-related issues that may be of relevance to them.

4.     Effects of the change of legal form on the Company shares and the stock
       market listing

MAN AG’s change of legal form to an SE results in the stockholders of MAN AG becoming
stockholders of MAN SE as soon as the change of legal form enters into force. As in the
past, the shares of MAN SE will also be no-par value shares made out to the bearer After the
change of legal form the share certificates of the Company will be exchanged. Since the
shares of MAN AG are evidenced by means of global certificates, the global certificates will
simply be exchanged. Effective share certificates are no longer in circulation, since they were
taken off the market after their cancellation in 1999.

The change of legal form does not affect the stock exchange admissions and the stock
exchange trading of the shares of MAN AG. The stockholders of MAN AG will continue to be
able to trade their shares on all stock exchanges on which the shares are currently listed
after the change of legal form of MAN AG to MAN SE. The change of legal form has no effect
on the inclusion of the shares in the stock indices. It is equally unnecessary, due to the
preservation of the legal identity of the Company, to reissue MAN SE shares. However, the
listing must be corrected to include the new name. MAN AG will inform the relevant
registrars of the modifications resulting from the change of legal form, in particular the
modified Articles of Incorporation, in accordance with section 30 c of the WpHG issued by
the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin – German Federal Financial
Supervisory Authority).

                                                                                            65
5.     Other effects

According to article 37 (9) of the SE Council Regulation, the existing rights and
responsibilities of the Company undergoing a change of legal form, i.e. MAN AG, pass to
MAN SE upon its registration. These include the legal stipulations and customs at the time of
registration as well as in regard to employment circumstances, individual labor contracts or
labor relationships.




Munich, February 20, 2009

MAN AG

The Executive Board
                                                                                          66
MAN AG
Landsberger Str. 110
80339 Munich
Germany
Phone +49. 89. 36098-0
Fax +49. 89. 36098-68281
www.man.eu/agm

								
To top