Shareholder claim against Volkswagen AG Answers to Frequently Asked Questions

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Augustus Sutton
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Shareholder claim against Volkswagen AG Answers to Frequently Asked Questions 1. Who is Bentham Europe? Bentham Europe Limited ( Bentham Europe ) is a subsidiary of Bentham Ventures B.V. ( Bentham ), a Netherlands-based company, which is owned by subsidiary entities of funds managed by Elliott Management Corporation, a hedge fund founded in 1977.

1 Shareholder claim against Volkswagen AG Answers to Frequently Asked Questions 1. Who is Bentham Europe? Bentham Europe Limited ( Bentham Europe ) is a subsidiary of Bentham Ventures B.V. ( Bentham ), a Netherlands-based company, which is owned by subsidiary entities of funds managed by Elliott Management Corporation, a hedge fund founded in Bentham Europe identifies large scale commercial claims across Europe for Bentham to fund. Further information about Bentham Europe can be found on its website at 2. Who is Quinn Emanuel? Quinn Emanuel Urquhart & Sullivan (the Lawyers ) is the world s largest litigation-only law firm, has a strong German presence, and is well-versed in successfully conducting large and complex financial services including securities litigation. 3. Who is the claim against and who will be eligible to participate? Bentham is funding an action on behalf of all shareholders who acquired Ordinary and/or Preference shares in Volkswagen AG ( Volkswagen ) on a German stock exchange between 1 January 2009 and 18 September 2015 inclusive, and who had not sold all of those shares prior to the commencement of trading in Germany on Monday 21 September What is the claim against Volkswagen? The shareholders claim will seek compensation for losses suffered as caused by Volkswagen s alleged: a. breaches of the German Securities Trading Act 1998 (the Statutory Claims ), in particular section 37(b); and b. civil tort laws under the German Civil Code (the Civil Law Claims ). The Case Overview document provides further information about the legal basis of the Claims. 5. Why are two types of claims being pursued - and how do they differ? The Statutory and Tort Claims can only be pursued in respect of Losses on Volkswagen shares still held on 18 September Hence, for losses sustained on shares purchased before 18 September 2015, shareholders will need to pursue Civil Law Claims. The only real difference between the Statutory and Civil Claims is that shareholders may be required by the Court to provide evidence in relation to the Civil Claims. This evidence will not be required in person and would likely take the form of a written statement in relation to the shareholder s investment in Volkswagen. 6. Why is this shareholder action being pursued in Germany?

2 Page 2 of 5 BEL# v7 Germany is the appropriate forum for the shareholders claims, given that Volkswagen is domiciled in Germany and the vast majority of its shares are traded on German stock exchanges. Further, the German courts provide an avenue for shareholders to pursue their claims in a collective fashion via the Capital Markets Model Case Act 2012 (commonly referred to as KapMuG ). 7. How does KapMug work? Where an investor brings a claim against a defendant and then within 6 months 10 or more other investors seek to bring the same or similar claims, a German Court may elect that the proceedings are consolidated under KapMuG. Under KapMuG, all of the investors claims are effectively stayed whilst the common issues are heard and tried through a Model Case which is run by a Lead Model Plaintiff, who is selected by the Court (and effectively represents the investors in the Model Case group). 8. Will Bentham fund the Lead Model Plaintiff? Bentham intends to put forward a funded claimant as the Lead Model Plaintiff, however ultimately the selection of the Model Plaintiff is at the discretion of the Court. 9. What happens if Bentham does not end up funding the Lead Model Plaintiff? If Bentham does not end up funding the Model Plaintiff, Quinn Emanuel on behalf of the Bentham-funded claimants will nevertheless seek an active role in the litigation alongside the Lead Model Plaintiff. Of course, at the end of the common issues stage, if the case does not resolve, each investor will be require individual and separate representation from Quinn Emanuel and funding from Bentham. Further, there are costs involved in being included in the Model Group even if the Model Plaintiff does not come from the Bentham-funded group - see further information in this regard at questions 20 and 21 below. 10. When do I have to join the Bentham claim by? There are various strategic and other benefits to moving quickly in this matter - hence if you wish to join the claim Bentham proposes to fund against Volkswagen, you must complete and return the Volkswagen Funding Agreement and the Volkswagen Funding Agreement Guarantee to Bentham Europe as a matter of urgency. 11. Will I have to provide evidence? You will not have to provide evidence whilst the Lead Model Plaintiff s claim is being heard and you will not be required to act as the Lead Model Plaintiff unless you agree to do so). Note further that you will not have to provide evidence in relation to any Statutory Claim you may have, however may have to provide evidence in respect of any Civil Law Claim you might have. 12. Will my name be disclosed publicly as involved in the claim? No, court filings in Germany are not made public and published decisions are anonymised. However, your name will be on the record in the Court file which will be available for public inspection. 13. What is the relevant period in which I must have acquired Volkswagen securities to participate in the action? To be eligible to participate in the claim, you must have acquired a net amount of 20,000 Volkswagen shares between 1 January 2009 and 18 September 2015 inclusive (the

3 Page 3 of 5 Relevant Period ) 1, and not sold all of those shares prior to the commencement of trading on Monday 21 September Which Volkswagen share identifiers are eligible to join the action? Please see table below: ISIN WKN SEDOL CUSIP VOW (Ordinary Shares) DE VOW3 (Preference Shares) DE Are shares acquired in a Dividend Reinvestment Plan eligible to participate? Yes. 16. How much is my claim worth? The size of your claim, in the event that the shareholders case is successful, will depend on how the Court assesses your loss. The methodology the Court may ultimately adopt when assessing your loss is not certain. It may, for example, be the difference between the amount you paid for the Volkswagen securities and the amount you received when you sold them (or the value of those you still hold). Alternatively, loss may be assessed on the basis of the difference between the price you paid for the shares and their true or real value at the time of purchase (i.e. the price you paid for the shares was inflated). In due course, when you supply your trade data to Bentham Europe, you will receive a Trade History from Bentham Europe, which will provide you with an estimate of your loss. Note all claims will be the subject of further investigation and legal advice and your loss figure may change. In providing the Trading History or otherwise, Bentham Europe does not guarantee that you will be held to have suffered any loss or any particular level of loss. You have nevertheless encouraged to send your trading data to Bentham Europe now so that we can initiate your loss estimate. 17. Where will the legal proceedings be filed? The proceedings against Volkswagen have been filed in the Braunschweig District Court (Landgericht Braunschweig), Germany. 18. Aren t shareholders who join the case just suing themselves? Not necessarily, as many shareholders who join the case will now have sold out of Volkswagen. Further, for those that have not, evidence from the United States suggests that when corporations resolve class action lawsuits, their share price does not depreciate and in fact sometimes appreciates albeit that there can be an impact on dividend income at times. Any impact on the share price caused by the class action proceedings is not anything approaching the impact of the events that led to the class action in the first place. 19. How long will legal proceedings take? We expect proceedings to take two or more years from commencement to resolve. 20. How much will the case cost? Including Court filing fees and lawyer s fees, the shareholders case may cost as much as 10 million to run, or more. 1 It may be that the Relevant Period changes, depending on legal advice received. If following further investigations and the receipt of legal advice, the Relevant Period is to be changed, Bentham Europe or the Lawyers will let you know.

4 Page 4 of 5 Note, however, you will not be required to pay anything, as the case and any associated costs will be funded by Bentham on a no win, no pay basis. This means that you do not have to pay anything in the event that your claim is unsuccessful. If your claim is successful, Bentham will be entitled to a commission and the reimbursement of the legal fees and costs it has paid on your behalf, but only from what is recovered. The Litigation Funding Agreement Guarantee provides a guarantee to you that Bentham will pay all of the agreed legal and other costs associated with the case. 21. What will it cost if any legal proceedings are not successful? Nothing - subject to the terms of the Volkswagen Funding Agreement, Bentham will pay any costs order which may be made against you - note in Germany, the losing side in litigation is typically ordered to pay a proportion of the winning side s costs. Bentham will also provide any security for costs and statutory court fees ordered by a Court in relation to the case against Volkswagen. 22. What will Bentham receive? If any proceedings are brought and are successfully resolved, Bentham will receive a return of the costs it has paid and a commission based on your recovery, depending on the number of shares you purchased in the Relevant Period and the time taken to achieve a recovery. 23. Do I have to sign a Volkswagen Funding Agreement, Quinn Emanuel Retainer Agreement and Litigation Funding Agreement Guarantee (the Volkswagen Agreements ) to join? Yes, Bentham will only fund proceedings on behalf of investors that enter into the Volkswagen Agreements. You will not be a member of or included in the proceedings simply because you acquired Volkswagen shares in the Relevant Period. 24. Why can t I just wait until there is a settlement to join the Volkswagen proceedings? Unlike in the United States, for example, this case will be run only on behalf of those that choose to join it - it is not an opt out class action in the sense that any decision will bind all Volkswagen shareholders. 25. What is Bentham Europe s Conflicts Management Policy? Bentham Europe, via its Conflicts Management Policy, has in place adequate practices for managing any conflict of interest that may arise between it, the Lawyers, and funded claimants and others in relation to any litigation funded by Bentham. For further details see Bentham Europe s website: What if I decide to withdraw from the Action? There are limited circumstances in which you can withdraw from the action. Note however, in the absence of a material breach by Bentham, some terms of the Volkswagen Agreement you sign will continue to apply with the effect that if you receive a settlement or judgement from Volkswagen, you will remain liable to pay your share of Bentham s commission and costs that Bentham has paid from any recovery you receive. 27. Will my contact and investment details be kept private? We will only use and/or disclose your personal information strictly for the purpose of the legal proceedings, or as required by the Court or by law or as requested by the Lawyers. In all other cases, we will seek your consent before disclosing any of your personal information. We will not disclose any personal information to third parties, including other Volkswagen shareholders funded by Bentham.

5 Bentham Europe s privacy policy can be found on its website. Page 5 of How much time will I have to devote to the legal proceedings? Initially we will only require you to provide the information referred to in the first two pages of the Volkswagen Agreement which is limited to factual information concerning you and your investment. Ultimately you may need to provide further information about your claim, including possibly giving evidence in Court in relation to any Civil Claim you may have, although this is unlikely. 29. What should I now? Please urgently compile and send your Volkswagen trading data to Bentham Europe, via address vw@benthameurope.com, in order to participate in the claim. Please include details of all Ordinary and Preference shares purchased and sold in Volkswagen AG from 1 January Please include an opening balance of shares held as at 31 December Remember that only trades on German exchanges are included in the case. 30. Where do I obtain more information? The documents you will be required to complete to join Bentham Europe s claim are available, via our website: Alternatively, you can vw@benthameurope.com to request them. vw@benthameurope.com +44 (0)

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