Partial and proportional Demerger Plan of Fiat S.p.A. to ... · Partial and proportional Demerger...

Partial and proportional Demerger Plan of Fiat S.p.A. to Fiat Industrial S.p.A.

“progetto di scissione” pursuant to Article 2506-bis of the Italian Civil Code

Fiat S.p.A.

Registered Office: 250 Via Nizza, Turin (Italy) Share Capital: €6,377,262,975 - Turin Companies Register/Tax Code: 00469580013

Fiat Industrial S.p.A., with sole shareholder Registered Office: 250 Via Nizza, Turin (Italy)

Share Capital: €120,000 fully paid-in - Turin Companies Register/Tax Code: 10352520018

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Contents

Introduction 3

1. Type, company name and registered office of the Parties to the Transaction 5

1.1. Demerging Company 5

1.2. Beneficiary Company 5

2. By-laws of the Demerging Company and Beneficiary Company; amendments to the By-laws resulting from the Transaction and other amendments to the By-laws 5

2.1. By-laws of the Demerging Company 5

2.1.1 Amendments to the By-laws resulting from the Transaction 6

2.1.2 Other amendments 8

2.2. By-laws of the Beneficiary Company 10

3. Assets and liabilities to be transferred 11

3.1. Form of the Transaction and related financial statements 11

3.2. Assets and liabilities to be transferred to the Beneficiary Company 12

3.3. Impact on equity of the Parties to the Transaction 12

4. Ratio for allotment of shares in the Beneficiary Company 15

5. Procedure for allotment of shares in the Beneficiary Company 15

6. Conditions precedent for completion and effectiveness of the Transaction 15

7. Effects of the Transaction 15

8. Special conditions applicable to certain classes of shareholders or holders of other securities 16

9. Specific advantages in favor of Directors of the Companies Party to the Transaction 16

This document has been translated into English for the convenience of international readers. The original Italian document should be considered the authoritative version.

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Introduction The Boards of Directors, respectively, of Fiat S.p.A (hereinafter, “Fiat” or the “Demerging Company”), whose shares are listed and traded on the Mercato Telematico Azionario (MTA), organized and managed by Borsa Italiana S.p.A. (hereinafter, “Borsa Italiana”), and Fiat Industrial S.p.A. (hereinafter, “Fiat Industrial” or the “Beneficiary Company”), a company wholly owned by Fiat, met on the 21st of July 2010 to approve this partial and proportional demerger plan, namely this “progetto di scissione” prepared pursuant to Article 2506-bis of the Italian Civil Code (hereinafter, the “Demerger Plan”, and the transaction described herein, the “Transaction” or “Demerger”). (Note to international readers: the transaction qualifies as a scissione parziale proporzionale pursuant to Article 2506-bis of the Italian Civil Code under which there will be a partial demerger of the activities of the Demerging Company and each shareholder of Fiat will receive one share in the Beneficiary Company for each share of the same class held in Fiat.) The objective of the Transaction is primarily industrial and consists in separation of the agricultural and construction equipment, and truck and commercial vehicles activities, as well as the Industrial & Marine business line of the FPT Powertrain Technologies sector from the automobile and automobile-related components and production systems activities, which include Fiat Group Automobiles, Ferrari, Maserati, Magneti Marelli, Teksid, Comau and the Passenger & Commercial Vehicles business line of FPT Powertrain Technologies. The transaction is grounded on the fundamentally different characteristics that the capital goods businesses (to be demerged) have with respect to the automobiles activities in terms of competitive environment, product requirements, level of R&D expenditure required and the profile of potential investors. Two distinct groups will be created by the Transaction, each having the maximum flexibility to pursue the best strategic options, including potential alliances, thereby increasing opportunities for growth, independence and efficiency. The capital goods businesses currently consist of: CNH Global N.V. and subsidiaries, constituting the agricultural and construction equipment activities, Iveco S.p.A. and subsidiaries, constituting both the truck and commercial vehicles activities and the industrial & marine business line of the FPT Powertrain Technologies Sector. Prior to the Demerger, a reorganization of the corporate tree of the industrial activities of Iveco S.p.A. has been enacted. That reorganization is directly linked to the Transaction and has the ultimate objective of transferring to the Beneficiary Company, by means of the Demerger, all component parts of the truck and commercial vehicles business and the industrial & marine powertrain business line, while at the same time establishing distinctly separate legal entities for the two businesses and concentrating the related foreign shareholdings within a single legal entity. The separation of the industrial & marine powertrain business, which is already engaged in non-captive supply activities, out of the Fiat Group, will also strengthen the potential for development on the non-captive market while at the same time will provide Fiat Industrial with a corporate structure similar to those adopted by leading international groups operating in the capital goods sector. The reorganization of the corporate tree of the industrial activities of Iveco S.p.A. was undertaken through two separate transactions, with completion of both contingent upon Borsa Italiana admitting the shares in the Beneficiary Company to listing on the MTA. The first was the transfer of groups of activities and shareholdings representing the Italian operations and certain joint ventures of the businesses referred to previously (i.e., trucks and commercial vehicles and the industrial & marine business line of FPT Powertrain Technologies) to two inactive companies, Nuove Iniziative Finanziarie Cinque S.p.A. and Nuova Immobiliare Nove S.p.A., both wholly owned by Fiat. The

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second was the transfer of shareholdings in foreign entities to Fiat Netherlands Holding N.V., also wholly owned by Fiat. On 29 June 2010, Nuove Iniziative Finanziarie Cinque S.p.A. and Nuova Immobiliare Nove S.p.A. acquired from Iveco S.p.A., conditional upon Borsa Italiana admitting the shares in the Beneficiary Company to listing on the MTA by 31 December 2010, groups of activities relating, respectively, to the truck and commercial vehicles business and the industrial & marine powertrain business. Nuove Iniziative Finanziarie Cinque S.p.A. acquired, from Iveco S.p.A., the group of activities relating to the truck and commercial vehicles business in Italy and the shareholdings, including in several joint ventures, listed in Annex C. Nuova Immobiliare Nove S.p.A. acquired, from Iveco S.p.A., the group of activities in Italy and shareholdings relating to the industrial & marine powertrain business (also listed in Annex C) and it is intended that it will also acquire the interest in SAIC Fiat Powertrain Hongyan Co. Ltd. Chongqing held by Fiat Powertrain Technologies S.p.A. (which is to remain within the group headed by the Demerging Company). Once those acquisitions become effective, subject to satisfaction of the condition referred to above, Nuove Iniziative Finanziarie Cinque S.p.A. will acquire the denomination of Iveco S.p.A. and the former Iveco S.p.A. – which will continue to hold certain non-core assets (e.g., equity investments, used vehicle inventories, other non-current assets, trade receivables, misc. payables/receivables, etc.) not pertaining to the group of activities to be transferred and planned to remain within the scope of activities of the Demerging Company – will also be renamed. Nuova Immobiliare Nove S.p.A. will acquire the denomination of FPT Industrial S.p.A. At the same time, Fiat Netherlands Holding N.V., which already holds 90% of the share capital of CNH Global N.V. and interests in some of the foreign operating companies part of the truck and commercial vehicles business, has acquired from Iveco S.p.A. – also conditional upon Borsa Italiana admitting the shares in the Beneficiary Company to listing on the MTA – shareholdings in the remaining foreign entities operating in the areas of business referred to above (trucks and commercial vehicles and industrial & marine powertrain). The transaction described in this Demerger Plan, if approved, will consist in the transfer by Fiat of a portion of its assets and liabilities to the Beneficiary Company in the form of a scissione parziale proporzionale (Article 2506 and following of the Italian Civil Code). More specifically, the assets and liabilities to be transferred to the Beneficiary Company include shareholdings, listed below, as well as certain other assets and liabilities (financial receivables and payables), also listed below, representing a portion of the net debt of Fiat. The shareholdings consist of a 100% interest in Fiat Netherlands Holding N.V., Nuove Iniziative Finanziarie Cinque S.p.A. and Nuova Immobiliare Nove S.p.A. (which, as described above, will hold the truck and commercial vehicles and the industrial & marine powertrain activities). In addition, a 100% interest in Fiat Industrial Finance S.p.A., a company incorporated on 7 June 2010 whose scope is to provide centralized treasury services to the new Fiat Industrial Group, will be transferred to the Beneficiary Company. At the date of this Demerger Plan, Fiat Industrial is wholly owned by Fiat. As a consequence of the Demerger, Fiat shareholders will be granted, without consideration, one share in the Beneficiary Company for each share of the same class they hold in the Demerging Company. Fiat Industrial will apply to the regulatory authorities and other relevant bodies for admission of its ordinary, preference and savings shares to listing on the MTA. The Demerger is conditional upon Borsa Italiana admitting the shares in the Beneficiary Company to listing on the MTA.

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In addition to the applicable provisions of the Italian Civil Code, execution of the Deed of Demerger is, therefore, conditional upon:

(i) admission by Borsa Italiana of all classes of shares in the Beneficiary Company to listing on the MTA; and

(ii) a decision from Consob, pursuant to Article 57 (1.d) of Consob Regulation No. 11971/1999,

as to the equivalence to a listing prospectus of the information provided by the Information Document and subsequent amendments, pursuant to Article 57 (namely, a “giudizio di equivalenza”).

Further to the Deed of Demerger being filed with the relevant Companies Register, but prior to the effective date of the Transaction, Borsa Italiana will provide formal notification of the date for the start of trading of shares in the Beneficiary Company on the MTA. Subject to satisfaction of the conditions indicated above, the Transaction is expected to have effect from 1 January 2011.

1. TYPE, COMPANY NAME AND REGISTERED OFFICE OF THE PARTIES TO THE TRANSACTION 1.1. Demerging Company Fiat S.p.A., with its registered office at Via Nizza 250 - Turin (Italy), tax code and registration number with the Companies Register of Turin 00469580013, subscribed and paid-in share capital of €6,377,262,975, consisting of 1,092,247,485 ordinary shares, 103,292,310 preference shares and 79,912,800 savings shares, having a par value of €5.00 each. The ordinary, preference and savings shares of Fiat are listed on the MTA organized and managed by Borsa Italiana. 1.2. Beneficiary Company Fiat Industrial S.p.A., incorporated on 15 July 2010, with its registered office at Via Nizza 250, Turin (Italy), tax code and registration number with the Companies Register of Turin 10352520018, subscribed and paid-in share capital of €120,000, consisting of 80,000 ordinary shares having a par value of €1.50 each and wholly owned by Fiat.

2. BY-LAWS OF THE DEMERGING COMPANY AND BENEFICIARY COMPANY; AMENDMENTS TO THE BY-LAWS RESULTING FROM THE TRANSACTION AND OTHER AMENDMENTS TO THE BY-LAWS 2.1. By-laws of the Demerging Company As a result of the Transaction, the share capital and reserves of the Demerging Company will be reduced by an amount equivalent to the net value of the assets and liabilities transferred. Share capital will be reduced through a pro rata reduction in par value per share for all classes of shares and, to ensure not prejudicial treatment to any class of shareholders, either directly or indirectly, and full compliance with the provisions of Article 20 of the By-laws, the entitlements attached to each class of shares will be adjusted pro rata to the new par value per share such that the existing entitlements attached to each class of shares remain unchanged as a percentage of par value.

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In addition, to further ensure that the Transaction is not prejudicial to any shareholder class and in consideration of the fact that it will take effect after 31 December 2010, the allocation of the result for 2010 will be based on the entitlement for each share class under the current By-laws. Accordingly, the pro rata reduction in the entitlement for each share class of the Demerging Company with respect to the allocation of profit (Article 20 of the By-laws) shall have effect the day after the approval of the allocation of the 2010 result. As a result of the Transaction, the following amendments will be made to the By-laws of the Demerging Company and, with the exception of Articles 6 and 20, will have effect from the effective date of the Transaction.

2.1.1 Amendments to the By-laws resulting from the Transaction Article 5 Share Capital Article 5 currently states that the issued share capital of Fiat is €6,377,262,975 divided into 1,092,247,485 ordinary shares, 103,292,310 preference shares and 79,912,800 savings shares having a par value of €5.00 each. It also specifies that pursuant to the resolutions adopted by the Board of Directors on 3 November 2006, in execution of the powers delegated to it in the Extraordinary General Meeting of Shareholders held on 12 September 2002, Fiat's share capital may be increased by a maximum of €50,000,000 through the issue of up to 10,000,000 new ordinary shares, through paid capital contributions, exclusively to executives employed by Fiat and/or its subsidiaries in accordance with the relevant incentive plan. Pursuant to the Transaction, the share capital of the Demerging Company will be reduced in the amount of €1,913,178,892.50 to €4,464,084,082.50 through a reduction in par value of shares in all classes, such as to ensure no prejudicial treatment, either direct or indirect, for the shareholders of any class. The par value per share for all classes of shares in the Demerging Company, which was €5.00 at the date of this Demerger Plan, will be reduced in the amount of €1.50 to €3.50 per share. Accordingly, the maximum permitted increase in share capital in service of the incentive plan approved on 3 November 2006 will be reduced to €35,000,000, while the maximum number of shares that can be issued for that purpose will remain at 10,000,000.

Article 6 Classes of Shares and Common Representative Article 6 currently states that in the event the savings shares are delisted, any bearer shares shall be converted into registered shares and shall be entitled to a dividend that is €0.175, rather than €0.155, higher per share than the dividend paid on ordinary and preference shares. That article also requires that in the event the ordinary shares are delisted, the savings shares shall be entitled to a dividend that is €0.200 per share higher than the dividend paid on ordinary and preference shares. Therefore, in the event of a delisting of the savings shares, holders of those shares shall be entitled to a dividend higher than the dividend paid on ordinary and preference shares by an amount equivalent to 3.5% of their par value. In the event of a delisting of the ordinary shares, the dividend payable on savings shares shall be higher than the dividend paid on ordinary and preference shares by an amount equivalent to 4.0% of their par value.

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Pursuant to the Transaction, the above amounts will be adjusted, with effect from the day after the approval of the allocation of the 2010 result, pro rata to the reduction in par value per share for all classes of shares in the Demerging Company. Therefore, in the event of a delisting of the savings shares, holders of those shares shall be entitled to a dividend that is higher than the dividend paid on ordinary and preference shares in the amount of €0.1225, equal to 3.5% of the adjusted par value of €3.50. Similarly, in the event of a delisting of the ordinary shares, the dividend payable on savings shares shall be higher than the dividend paid on ordinary and preference shares in the amount of €0.140, or 4.0% of the adjusted par value of €3.50.

Article 20 Allocation of Profit Article 20 establishes the entitlements of the various classes of shares in relation to allocation of profit and paragraph 3 states that in the event of a change in par value of the shares, dividend entitlements will be adjusted on a pro rata basis. For the purposes of clarity, the current wording of Article 20 paragraphs 1, 2 and 3 of the By-laws is provided below:

Net profit reported in the annual statutory financial statements shall be allocated as follows:

(i) to the legal reserve, 5% of net profit until the amount of such reserve is equivalent to one-fifth of share capital;

(ii) to savings shares, a dividend of up to €0.31 per share;

(iii) further allocations to the legal reserve, allocations to the extraordinary reserve and/or retained profit reserve as may be resolved by Shareholders;

(iv) to preference shares, a dividend of up to €0.31 per share;

(v) to ordinary shares, a dividend of up to €0.155 per share;

(vi) to savings shares and ordinary shares, in equal amounts, an additional dividend of up to €0.155 per share; and,

(vii) to each ordinary, preference and savings share, in equal amounts, any remaining net profit which Shareholders may resolve to distribute.

When the dividend paid to savings shares in any year amounts to less than €0.31, the difference shall be added to the preferred dividend to which they are entitled in the following two years.

In the event of a change in the par value of shares, the amounts stated above will be adjusted on a pro rata basis. As a result of the reduction in par value per share, from €5.00 to €3.50, for all share classes as a consequence of the Demerger, the amounts stated in points (ii), (iv), (v) and (vi) will be adjusted on a pro rata basis so that the current dividend entitlement attached to each class of shares remains unchanged as a percentage of par value. This will ensure that there is no prejudicial treatment for shareholders of any class, either direct or indirect. The existing dividend entitlement for each share class will remain unchanged as a percentage of par value both for shareholders of the Demerging Company and, as described below, for shareholders of the Beneficiary Company. Pursuant to the By-laws of the Demerging Company, the amount of €0.31 attributable to savings shares, as stated in point (ii) above, which corresponds to 6.2% of the par value per share of €5.00, will become €0.217, equal to 6.2% of the new par value per share of €3.50.

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The amount of €0.31 attributable to preference shares, as stated in point (iv) above, which corresponds to 6.2% of the par value per share of €5.00, will become €0.217, equal to 6.2% of the new par value per share of €3.50. The amount of €0.155 attributable to ordinary shares, as stated in point (v) above, which corresponds to 3.1% of the par value per share of €5.00, will become €0.1085, equal to 3.1% of the new par value per share of €3.50. The amount of €0.155 attributable in equal amounts to ordinary and savings shares, as stated in point (vi) above, which corresponds to 3.1% of the par value per share of €5.00, will become €0.1085, equal to 3.1% of the new par value per share of €3.50. Finally, the amount of €0.31, which corresponds to 6.2% of the par value per share of €5.00, as stated in paragraph 2, will become €0.217, equal to 6.2% of the new par value per share of €3.50. The above information is summarized in the following table. (amounts in €)

Allocation of profit as reported in the annual

statutory financial statements

By-laws of Fiat S.p.A. (current)

par value €5/share

By-laws of Fiat S.p.A.

(post-demerger) par value €3.50/share

By-laws of Fiat Industrial S.p.A.

(post-demerger) par value €1.50/share

Total Fiat S.p.A. and Fiat Industrial S.p.A.

(post-demerger)

(ii) savings shares 0.31 (6.2%) 0.217 (6.2%) 0.093 (6.2%) 0.31 (iv) preference shares 0.31 (6.2%) 0.217 (6.2%) 0.093 (6.2%) 0.31 (v) ordinary shares 0.155 (3.1%) 0.1085 (3.1%) 0.0465 (3.1%) 0.155 (vi) savings and ordinary shares

0.155 (3.1%) 0.1085 (3.1%) 0.0465 (3.1%) 0.155

Paragraph 2 0.31 (6.2%) 0.217 (6.2%) 0.093 (6.2%) 0.31 As stated previously, the pro rata reductions in the dividend entitlement for each share class (Articles 6 and 20 of the By-laws) shall have effect from the date following the date of approval of the allocation of the result for 2010.

2.1.2 Other amendments At the Extraordinary General Meeting of Fiat S.p.A. called to approve the Transaction, Shareholders will also be called to approve changes to the By-laws resulting, in particular, from the introduction of Legislative Decree No. 27 of 27 January 2010, relating to the exercise of certain rights by shareholders of listed companies, and Legislative Decree No. 39 of 27 January 2010, relating to the audit of the accounts. The majority of those changes are mandatory in order to comply with new legal and regulatory requirements. Others enable Fiat to introduce new rules and mechanisms allowed by the new corporate legislation. Following is a summary of the amendments which relate to the recently enacted corporate legislation referred to above. To avoid the introduction of different versions of the By-laws at different times and to ensure consistency between the provisions adopted by the Demerging Company and those adopted by the Beneficiary Company, the following amendments and those resulting directly from the Demerger will be made at the same time. For the sake of clarity, the following description lists separately those amendments to be introduced for compliance with legislative changes from those being proposed to benefit from opportunities provided by recently introduced legislation.

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Amendments to the By-laws required to comply with changes in the law relate to:

- procedures for calling general meetings and publication of the notice of the meeting (Article 7 - General Meetings);

- introduction of the principle of record date, with consequent change to the documentation required to attend general meetings and establishment of procedures for electronic notification of proxy representation (Article 8 - Attendance and Representation at General Meetings);

- change in the time limits for deposit and disclosure of the list of candidates for the appointment of the Board of Directors and the appointment of the Board of Statutory Auditors; introduction of a time limit for certifying ownership of the minimum percentage of voting shares required to submit such lists; introduction, in relation to the independence of candidates appearing first on the list of nominees for director, of the requirements established in the corporate governance code adhered to by Fiat (Article 11 - Board of Directors and Article 17 - Election and Qualifications of the Statutory Auditors);

- adoption of the new wording “revisione legale dei conti” in place of “controllo contabile” and assignment to the Board of Statutory Auditors of responsibility for making recommendations to shareholders in relation to the granting or revocation of the engagement for the audit of the accounts (Article 18 - Independent Audits).

Other amendments to be proposed to Shareholders, that enable adoption of mechanisms introduced by the above legislation, are as follows:

- introduction of the option for the Board of Directors to call a general meeting for a single date only (“single call”), in place of the current first, second and third call. Given the large, diversified shareholder base and the significant presence of international shareholders, this option will help to improve clarity for communication of the corporate calendar to the market and streamline procedures for calling and holding general meetings (Article 7 - General Meetings). Introduction of the single call mechanism also requires amendment of the voting and meeting quorums for ordinary and extraordinary general meetings with a single call (Article 9 - Calling of General Meetings and Validity of Resolutions);

- extension of the period for the calling of the Shareholders’ Meeting (within which the annual general meeting must be held) to 180 days after the close of the financial year (Article 7 - General Meetings);

- introduction of the option to designate one or more individuals for each general meeting to whom shareholders can confer proxy and give instructions to vote on one or more items on the agenda (Article 8 - Attendance and Representation at General Meetings);

- introduction of the option for the Board of Directors to institute a procedure for electronic voting at general meetings, as well as the conferment of proxy by electronic means (Article 8 - Attendance and Representation at General Meetings);

- simplification of procedures for Board of Directors meetings held by teleconference (Article 13 - Meetings and Duties of the Board of Directors);

- introduction of the option for Fiat, and consequently also for shareholders, to request details of the identity of shareholders from intermediaries (Article 22 - Domicile and Identification of Shareholders).

Finally, an amendment to Article 15 (Powers of the Board of Directors) will also be proposed in order to restore powers, held directly by the Company until 30 June 2010, concerning defensive measures against hostile takeovers. In fact, following amendments to Article 104 of Legislative Decree No. 58/98 that came into effect on 1 July 2010, it is now required that such powers be granted expressly by a company’s by-laws, enabling the board of directors and any body they may delegate to adopt such defense measures without prior shareholders’ approval. The text of the By-laws of the Demerging Company, inclusive of the amendments provided above, is attached as Annex A to this Demerger Plan, of which it forms a substantial and integral part.

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2.2. By-laws of the Beneficiary Company As stated previously, an essential pre-condition to the Transaction is that all classes of shares in the Beneficiary Company (i.e., ordinary, preference and savings) are listed on the MTA at the time of their allotment to Fiat shareholders. Consequently, at the Extraordinary General Meeting of Fiat Industrial called to approve the Transaction, Shareholders will also be asked vote on the adoption, with effect from the effective date of the Transaction, of By-laws that conform to the requirements for listed companies established by Legislative Decree No. 58/98 and related implementing regulations. The text of the By-laws, which is included as Annex B to this Demerger Plan and forms a substantial and integral part thereof, replicates the By-laws of Fiat post-Demerger with the exception of Article 1 (Company Name) and the following provisions of Articles 5 (Share Capital), 6 (Classes of Shares and Common Representative) and 20 (Allocation of Profit), the latter being a direct result of the Transaction. Article 5 Share Capital Share capital is currently €120,000, consisting of 80,000 ordinary shares with a par value of €1.50 each. As a result of the Transaction, share capital will be increased in the amount of €1,913,178,892.50, through the issue of 1,092,247,485 ordinary shares, 103,292,310 preference shares and 79,912,800 savings shares having a par value of €1.50 each. Upon the Transaction taking effect, share capital will be equal to €1,913,298,892.50, consisting of 1,092,327,485 ordinary shares, 103,292,310 preference shares and 79,912,800 savings shares, having a par value of €1.50 each.

Article 6 Classes of Shares and Common Representative The additional entitlements attributable to the savings shares of the Demerging Company in the event the savings shares or the ordinary shares are delisted, as described above, will be attributable to the savings shares of the Beneficiary Company on the same pro rata basis in order to ensure that the entitlement remains unchanged as a percentage of par value. Accordingly, in the event of a delisting of the savings shares, the dividend payable on those shares shall be higher than the dividend paid on ordinary and preference shares in the amount of €0.0525, equal to 3.5% of their par value of €1.50. In the event of a delisting of the ordinary shares, the dividend payable on savings shares shall be higher than the dividend paid on ordinary and preference shares in the amount of €0.06, equal to 4.0% of their par value of €1.50. Article 20 Allocation of Profit The distribution entitlement of each class of shares in the Demerging Company will also be reallocated, on a pro rata basis, to the corresponding class of shares of the Beneficiary Company such as to ensure that the priority and level of entitlement, as a percentage of par value, remain unchanged. The distribution entitlements are shown in the table in Section 2.1.1.

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The sum of the entitlements attached to each class of shares in both the Demerging and Beneficiary Company will, therefore, be equivalent to the entitlements attributable under the current By-laws of the Demerging Company.

3. ASSETS AND LIABILITIES TO BE TRANSFERRED 3.1. Form of the Transaction and related financial statements The Transaction will consist in the transfer of assets and liabilities, detailed in Section 3.2 below, from Fiat to Fiat Industrial (a pre-existing company that, at the date of this Demerger Plan, was wholly owned by Fiat). As the Demerger entails a transfer of assets and liabilities to a company that, at the date of this Demerger Plan, is wholly owned by the Demerging Company and will continue to be at the effective date of the Transaction, the Demerger will not result in any change in the value of shareholdings for shareholders of the Demerging Company and, therefore, the conditions exist – in accordance also with the opinion expressed by the Milan Council of Notaries in Massima No. 23 of 18 March 2004, issued by the Commissione Società del Consiglio Notarile di Milano – for exemption pursuant to Article 2506-ter (3) of the Italian Civil Code from the requirement for a report from an independent expert under Article 2501-sexies of the Italian Civil Code. In accordance with the provisions of Articles 2506-ter and 2501-quater of the Italian Civil Code, the following have been prepared: (i) financial statements for Fiat as at 30 June 2010 and (ii) financial statements for the Beneficiary Company as at 20 July 2010, approved by the respective Boards of Directors on 21 July 2010. At 30 June 2010, the equity of the Demerging Company included a reserve for the purchase of own shares totaling €1,142,739,769. That reserve was established by virtue of the resolution passed by the shareholders of the Demerging Company on 26 March 2010 authorizing the purchase of a maximum of shares for all three classes not to exceed either 10% of share capital or an aggregate purchase value of €1.8 billion, including the existing reserve of €656.6 million. In consideration of the reduction in the par value of each share in the Demerging Company, management considers it appropriate to propose to shareholders at the Extraordinary General Meeting called to approve the Transaction, to limit the faculty of purchase of own shares to a maximum aggregate value of €1.2 billion. The condition that the total number of shares, in all three classes, may not exceed 10% of share capital and all other provisions approved by Shareholders on 26 March 2010 shall continue to apply. If approved, this proposal, that as described above is directly connected to the Transaction, would result in a reduction in the reserve for the purchase of own shares to €543,446,846 and a corresponding increase in the retained profit reserve from €2,284,840,679 to €2,884,133,602. A summary of changes in equity occurring prior to the Transaction is provided in the table in Section 3.3 Impact on Equity of the Parties to the Transaction.

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3.2. Assets and liabilities to be transferred to the Beneficiary Company Pursuant to the Transaction, the shareholdings and other assets and liabilities of the Demerging Company listed below will be transferred to the Beneficiary Company.

Company name Registered Office

Tax Code/ Companies

Register

Share Capital Subscribed/Paid in

(€)

% held No. of Shares Held

Carrying Value for Fiat

at 30 June 2010 (€)

Fiat Netherlands Holding N.V.

Amsterdam 003324436 33142210

2,610,397,295 100 94,923,538 4,577,346,053

Nuove Iniziative Finanziarie Cinque S.p.A. (to be renamed Iveco S.p.A)

Turin 09709770011 200,000,000 100 200,000,000 200,000,000

Nuova Immobiliare Nove S.p.A. (to be renamed FPT Industrial S.p.A.)

Turin 09397710014 100,000,000 100 100,000,000 100,000,000

Fiat Industrial Finance S.p.A. Turin 10331120013 100,000,000 100 100,000,000 100,000,000 Total shareholdings (A) 4,977,346,053

Carrying Value for Fiat at 30

June 2010 (€) Additional items: Net debt

Financial receivables from Fiat Finance S.p.A 213,000,000

Financial payables to Fiat Finance S.p.A. (1,440,000,000)

Net debt, total (B) (1,227,000,000) Net assets to be transferred, total (A)+(B) 3,750,346,053 The net assets to be transferred, amounting to €3,750,346,053 at 30 June 2010, represent the difference between (i) the value of the above shareholdings, as recognized in the books of Fiat for €4,977,346,053, and (ii) the value of the additional items, consisting of assets of €213,000,000 and liabilities of €1,440,000,000, representing a net debt position with Fiat Finance S.p.A. (the Fiat Group's central treasury), that will be repaid subsequent to the Demerger with funding acquired directly by Fiat Industrial Finance S.p.A. The net amount to be transferred will remain unchanged, as any net change in the book value of the assets and liabilities to be transferred will be compensated for in cash. For a description of the activities acquired by the companies whose shares are to be transferred as part of the Demerger, please refer to the introduction to this Demerger Plan. The Demerging Company will transfer the above assets and liabilities to the Beneficiary Company at book value.

3.3. Impact on equity of the Parties to the Transaction As a consequence of the Transaction, the equity of the Demerging Company will be proportionally reduced in the amount of €3,750,346,053, through a reduction in share capital in the amount of €1,913,178,892.50 and reserves in the amount of €1,837,167,160.50. More specifically, the legal reserve will be reduced in the amount of €214,937,498 to €501,520,828; the share premium reserve will be reduced in the amount of €462,265,468 to €1,078,619,424; the reserve for the purchase of own shares will, pursuant to the shareholder resolution referred to above, be reduced in the amount of €599,292,923 to €543,446,846; the retained profit reserve, that was increased from €2,284,840,679 to €2,884,133,602 in relation to the

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€599,292,923 decrease in the reserve for the purchase of own shares, will be reduced in the amount of €1,159,964,194.50 to €1,724,169,407.50. The reduction in share capital of the Demerging Company will take place through a reduction in par value per share for all share classes, rather than through the cancellation of shares. As explained previously and summarized in the table in Section 2.1.1, the par value of €5.00 per share for all classes of shares in the Demerging Company prior to the Transaction will be reduced to €3.50 per share. The reduction of €1.50 per share in the par value of shares in the Demerging Company (corresponding to the pro rata reduction in net assets resulting from the Transaction) will be fully offset by the issue of new shares in the Beneficiary Company, with a par value of €1.50 each, equivalent in number to the shares outstanding in each class in the Demerging Company at the date of the Transaction, having identical rights and privileges and in a one-to-one ratio between shares of the Demerging Company and the Beneficiary. Pursuant to the Transaction, the equity of the Beneficiary Company will be increased in the amount of €3,750,346,053, through: a) an increase in share capital of €1,913,178,892.50, from the current €120,000 to a total of €1,913,298,892.50 through the issue of 1,275,452,595 new shares, consisting of 1,092,247,485 ordinary shares, 103,292,310 preference shares and 79,912,800 savings shares, having a par value of €1.50 each; and, b) a further increase of €1,837,167,160.50 in reserves to be recognized commensurate with the reduction in equity of the Demerging Company. More specifically, the legal reserve will amount to €214,937,498, the share premium reserve to €462,265,468 and the retained profit reserve to €1,159,964,194.50. The reallocation of par value per share for shares in Fiat pre-Demerger between the shares in Demerging Company and the Beneficiary Company post-Demerger will result, pursuant to Article 20 (3) of the By-laws, in reallocation of the entitlements of the various share classes between the shares in the Demerging Company and the Beneficiary Company. As described in relation to amendments to the By-laws of both the Demerging Company and the Beneficiary Company, subsequent to the Transaction, and exclusively in relation to the Demerging Company but with effect from the date following the date of shareholder approval of the allocation of the 2010 result, the entitlement of each share class will be adjusted to take account of the pro rata reduction in the par value of shares in the Demerging Company and the par value of shares in the Beneficiary Company. Specifically, the following changes will be made:

- the amount payable on savings shares, under Article 20 sub-point (ii) of the By-laws, will be €0.217 per share for the Demerging Company and €0.093 per share for the Beneficiary Company, with the total remaining unchanged at €0.31;

- the amount payable on preference shares, under sub-point (iv), will be €0.217 per share for the Demerging Company and €0.093 per share for the Beneficiary Company, with the total remaining unchanged at €0.31;

- the amount payable on ordinary shares, under sub-point (v), will be €0.1085 per share for the Demerging Company and €0.0465 per share for the Beneficiary Company, with the total remaining unchanged at €0.155;

- the amount payable, equally, on ordinary and savings shares, under sub-point (vi), will be €0.1085 per share for the Demerging Company and €0.0465 per share for the Beneficiary Company, with the total remaining unchanged at €0.155;

- the amount payable under paragraph 2 will be €0.217 per share for the Demerging Company and €0.093 per share for the Beneficiary Company, with the total remaining unchanged at €0.31.

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Similarly, the additional dividend payable on the savings shares of both companies in the event of the delisting of the savings shares or ordinary shares of the same company (pursuant to Article 6 of the By-laws) will also be adjusted pro rata (see Section 2.1.1 above). With regard to the Demerging Company, that amendment will have effect from the date following the date of approval of the allocation of the result for 2010. As a consequence, in the event of a delisting of the savings shares of the Demerging Company, holders of those shares shall be entitled to a dividend that is higher than the dividend paid on ordinary and preference shares in the amount of €0.1225, equal to 3.5% of the adjusted par value of €3.50. In the event of a delisting of the savings shares of the Beneficiary Company, holders of those shares will be entitled to a dividend of €0.0525 higher than the dividend paid on ordinary and preference shares, representing 3.5% of the par value of €1.50, with the total remaining unchanged at €0.175. Similarly, in the event of a delisting of the ordinary shares of the Demerging Company, the additional dividend payable on savings shares shall be higher than the dividend paid on ordinary and preference shares in the amount of €0.140, equal to 4.0% of the adjusted par value of €3.50. In the event of a delisting of the ordinary shares of the Beneficiary Company, holders of the savings shares will be entitled to an additional dividend of €0.06 higher than the dividend paid on ordinary and preference shares, representing 4.0% of the par value of €1.50, with the total remaining unchanged at €0.200. Following is a summary of the impacts on equity of both the Demerging and Beneficiary Company. The first column reports values for the share capital and equity reserves of the Demerging Company at 30 June 2010. The second and third columns show the composition of those items for the Beneficiary Company and the Demerging Company, respectively, as a consequence of the completion of the Transaction.

(amounts in €) Fiat S.p.A.

(pre-demerger) Fiat Industrial S.p.A.

(post-demerger) Fiat S.p.A.

(post-demerger) Share capital 6,377,262,975 *1,913,178,892.5 4,464,084,082.5Legal reserve 716,458,326 214,937,498 501,520,828Share premium reserve 1,540,884,892 462,265,468 1,078,619,424Reserve for the purchase of own shares** 543,446,846 543,446,846Reserve for treasury shares held 656,553,154 656,553,154Treasury shares in portfolio (656,553,154) (656,553,154)Retained profit/(loss) **2,884,133,602 1,159,964,194.5 1,724,169,407.5Stock option reserve 103,789,900 103,789,900Other reserves 86,887,735 86,887,735Net profit/(loss) at 30 June 2010 47,319,921 47,319,921 12,300,184,197 3,750,346,053 8,549,838,144

* Additional to the €120,000 in capital existing pre-demerger. ** Adjusted to reflect reduced limit of share buyback authorization.

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4. RATIO FOR ALLOTMENT OF SHARES IN THE BENEFICIARY COMPANY Pursuant to the Transaction, holders of Fiat ordinary, preference and savings shares will be allotted, without consideration, an equivalent number of shares in the Beneficiary Company of the same class and with the same characteristics as those held in the Demerging Company. As such, there will be no cash adjustment.

5. PROCEDURE FOR ALLOTMENT OF SHARES IN THE BENEFICIARY COMPANY Shares in the Beneficiary Company will be allotted to those having entitlement, through authorized intermediaries and in dematerialized form, from the effective date of the Demerger, within the period and in the manner to be announced in the appropriate notice. At the time of allotment, the ordinary, preference and savings shares of the Beneficiary Company will already be listed on the MTA, organized and managed by Borsa Italiana. The date for the start of trading of the shares on the MTA will be set by Borsa Italiana in the relevant notice of authorization. In relation to the 38,568,458 own shares currently held, which will not be transferred, Fiat will also be allotted an equivalent number of shares in the Beneficiary Company (additional to the 80,000 shares already held by Fiat in the Beneficiary Company prior to the Transaction), representing 3.02% of the Beneficiary Company's share capital. The allotted shares will primarily be allocated to servicing incentive plans.

6. CONDITIONS PRECEDENT FOR COMPLETION AND EFFECTIVENESS OF THE TRANSACTION An essential pre-condition for the Demerger is that, at the time of their allotment to the shareholders of the Demerging Company, the ordinary, preference and savings shares of the Beneficiary Company have been admitted to listing on the MTA, organized and managed by Borsa Italiana. In addition to the requirements of the Italian Civil Code, execution of the Deed of Demerger is, therefore, conditional upon:

(i) admission by Borsa Italiana of the shares of the Beneficiary Company to listing on the MTA; and

(ii) a decision from Consob, pursuant to Article 57 (1.d) of Consob Regulation No.

11971/1999, as to the equivalence to a listing prospectus of the information provided by the Information Document and subsequent amendments, pursuant to Article 57.

Further to the Deed of Demerger being filed with the relevant Companies Register, but prior to the effective date of the Transaction itself, Borsa Italiana will set the initial date for trading of shares in the Beneficiary Company on the MTA through the relevant notice of authorization.

7. EFFECTS OF THE TRANSACTION Pursuant to Article 2506-quater of the Italian Civil Code, the Transaction will have effect from the date stated in the Deed of Demerger, which will follow to the date of the last registration of the

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Deed with the Companies Register of Turin. In consideration of the preceding paragraph, the effective date of the Transaction is expected to be 1 January 2011. In any event, the effects of the Transaction pursuant to Article 2501-ter (6) of the Italian Civil Code, also referred to in Article 2506-quater of the Italian Civil Code (recognition of the transactions in the financial statements of the Beneficiary Company), will apply from 1 January 2011. Similarly, the shares of the Beneficiary Company allotted to shareholders of the Demerging Company shall, in any event, have the right to share in the profits of the Beneficiary Company from 1 January 2011. However, the pro rata reduction in dividend entitlement for each share class of the Demerging Company (Article 20 of the By-laws) will have effect from the day after the approval of the allocation of the result for 2010. Consequently, allocation of the 2010 profit with respect to the Demerging Company, will be based on the current provisions of the By-laws.

8. SPECIAL CONDITIONS APPLICABLE TO CERTAIN CLASSES OF SHAREHOLDERS OR HOLDERS OF OTHER SECURITIES Except as described in Section 2.1 above, there will be no special conditions for any class of shareholders or holders of other securities in either the Demerging Company or Beneficiary Company. With reference to the stock option and stock grant plans established by Fiat prior to the Demerger, which give the participants the right to purchase Fiat ordinary shares at a pre-established price (stock option plans) or to the free allocation of shares (stock grant plan), the Board of Directors has adopted, subject to the Demerger taking effect and on the basis of the authorities delegated to them by Shareholders, the minimum amendments necessary to ensure that these incentive plans can fulfill the objectives for which they were adopted even subsequent to the Demerger. In application of the rules of the respective plans, the Board has, in particular, approved to realign the plans with respect to the shares underlying the stock options and stock grants in strict relation to the allotment ratio applicable for the Demerger and to allow employees leaving the Group headed by the Demerging Company and joining the Group headed by the Beneficiary Company to retain their existing rights. The participants in the stock option and stock grant plans will, therefore, receive one ordinary Fiat share and one ordinary Fiat Industrial share for each right they hold, with the option exercise price (for stock option plans) and the free grant of shares (for the stock grant plan) remaining unchanged.

9. SPECIFIC ADVANTAGES IN FAVOR OF DIRECTORS OF THE COMPANIES PARTY TO THE TRANSACTION No particular advantages will accrue to directors of the companies party to the Transaction.

* * *

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Annexes:

A. By-laws of Fiat S.p.A. post-demerger B. By-laws of Fiat Industrial S.p.A. post-demerger C. List of shareholdings transferred as part of the reorganization Nuove Iniziative Finanziarie

Cinque S.p.A. and Nuova Immobiliare Nove S.p.A.

21 July 2010 for the Demerging Company, Fiat S.p.A.

John Elkann

Chairman

for the Beneficiary Company, Fiat Industrial S.p.A.

Sergio Marchionne

Chairman

ANNEX A

BY-LAWS OF FIAT S.P.A. POST-DEMERGER

Article 1 – Name A Joint Stock Company is hereby incorporated under the name "Fiat S.p.A.".

The name may be written in either upper case or lower case letters, with or without punctuation marks.

Article 2 – Registered Office The Company has its registered office in Turin (Italy).

Article 3 – Objects The objects for which the Company is established are: to carry on, either directly or through wholly or partially-owned companies and entities, activities relating to passenger and commercial vehicles, transport, mechanical engineering, agricultural equipment, energy and propulsion, as well as any other manufacturing, commercial, financial or service activity.

Within the scope and for the achievement of the above purposes, the Company may:

■ operate in, among other areas, the mechanical, electrical, electromechanical, thermomechanical, electronic, nuclear, chemical, mining, steel and metallurgical industries, as well as in telecommunications, civil, industrial and agricultural engineering, publishing, information services, tourism and other service industries;

■ acquire shareholdings and interests in companies and enterprises of any kind or form and purchase, sell or place shares and debentures;

■ provide financing to companies and entities it wholly or partially owns and carry on the technical, commercial, financial and administrative coordination of their activities;

■ purchase or otherwise acquire, on its own behalf or on behalf of companies and entities it wholly or partially owns, the ownership or right of use of intangible assets providing them for use by those companies and entities;

■ promote and ensure the performance of research and development activities, as well as the use and exploitation of the results thereof;

■ undertake, on its own behalf or on behalf of companies and entities it wholly or partially owns, any investment, real estate, financial, commercial, or partnership transaction whatsoever, including the assumption of loans and financing in general and the granting to third parties of endorsements, suretyships and other guarantees, including real security.

Article 4 – Duration The Company is established for a period ending on 31 December 2100.

Article 5 – Share Capital The issued share capital of the Company is €4,464,084,082.50, divided into 1,092,247,485 ordinary shares, 103,292,310 preference shares and 79,912,800 savings shares having a par value of €3.50 each.

Pursuant to the resolutions adopted by the Board of Directors on 3 November 2006 and subsequent to the demerger to Fiat Industrial S.p.A., share capital may be increased by a maximum of €35,000,000 through the issue of up to 10,000,000 new ordinary shares, through paid capital contributions, exclusively to executives employed by the Company and/or its subsidiaries in accordance with the relevant incentive plan.

Article 6 – Classes of Shares and Common Representative Ordinary and preference shares are registered shares. Savings shares may be either registered or bearer shares, at the option of the holder or as required by law. All shares are issued in dematerialized form.

Each share confers the right to share pro rata in any earnings allocated for distribution and any surplus assets remaining upon a winding-up, subject to the right of priority of preference and savings shares, as set out in Articles 20 and 23 below.

Each ordinary share confers the right to vote without any restrictions whatsoever. Each preference share confers the right to vote only on matters which are reserved for an Extraordinary Meeting of Shareholders and on resolutions concerning Procedures for General Meetings. No voting rights are attached to savings shares.

In the event of an increase in share capital, the holders of each class of shares are entitled to receive newly issued shares in the same class pro rata to the number of shares already held, or of another class (or classes) if shares of the class already held are not offered or the number offered is insufficient.

The Company’s share capital may also be increased by issuing ordinary and/or preference and/or savings shares in exchange for contributions in kind or receivables.

Resolutions authorizing the issuance of new preference or savings shares having the same characteristics as those already in issue for the purposes of a capital increase or the conversion of shares of another class do not require the further approval in a Special Meeting of Shareholders of either of those classes.

In the event that the savings shares are delisted, any bearer shares shall be converted into registered shares and shall have the right to a higher dividend increased by €0.175, rather than €0.155, with respect to the dividend received by the ordinary and preference shares.

In the event that the ordinary shares are delisted, the higher dividend received by the savings shares with respect to the dividend received by ordinary and preference shares shall be increased by €0.200 per share.

From the date subsequent to the date of approval of the allocation of the result for 2010, the previous amounts of €0.175, €0.155 and €0.200 will be adjusted pro rata, to €0.1225, €0.1085 and €0.140, respectively.

Any expenditure required for the safeguarding of the common interests of the holders of preference and savings shares, in relation to which dedicated funds are approved in the respective Special Meetings of Shareholders, shall be borne by the Company up to a maximum annual amount of €30,000 for each class.

In order to ensure that the Common Representatives of the holders of preference and savings shares have adequate information on transactions which could influence the market price of those shares, the Company’s legal representatives must provide the Common Representatives with any such information in a timely manner.

Article 7 – General Meetings General Meetings of Shareholders may be called where the Company has its registered office, or elsewhere in Italy, by means of a notice published, on or before the statutory deadline, on the Company’s internet site, as well as in any other manner required by law. The notice may also provide for a single call only or a first, second and, for Extraordinary General Meetings only, a third call.

As the Company is required to prepare consolidated financial statements, an Ordinary General Meeting of Shareholders must be convened within 180 days after the close of the Company’s financial year.

A General Meeting may also be called whenever the Board of Directors deems it appropriate and must be convened when required by law.

Article 8 – Attendance and Representation at General Meetings Holders of voting rights who have obtained the appropriate documentary evidence from an authorized intermediary are entitled to attend a General Meeting or be represented by proxy. Communication thereof must be made to the Company in accordance with applicable law.

At each General Meeting, the Company may designate one or more representatives upon whom holders of voting rights may confer proxy, giving instructions to vote on one or more motions on the agenda. Details of the designated representative(s) and the procedure and deadline for conferment of the proxy are to be provided in the notice of the general meeting.

A General Meeting may be held with attendees being in multiple adjacent or remote locations that are linked by a telecommunications system, provided that the correct procedures and the principles of good faith and equal treatment of all shareholders are observed.

In such cases:

■ Notice of the General Meeting must state the audio/video link-up locations provided by the Company at which the Meeting may be attended and the Meeting will be deemed held at the location where the Chairman and the individual taking the Minutes of the Meeting are present;

■ The Chairman of the Meeting must, in his office as Chairman and/or through his delegated representatives present at the various link-up locations, be able to ensure that the Meeting is regularly convened, ascertain the identity of the attendees and their right to attend the Meeting, direct the proceedings and verify the result of any votes;

■ The individual taking the Minutes of the Meeting must be able to adequately follow any elements of the Meeting which are to be included in the Minutes;

■ All attendees must be able to participate in any discussion and vote simultaneously on the items on the Agenda.

The Board of Directors may institute a procedure for voting to be conducted electronically.

Proxies may be conferred electronically in conformity with applicable law.

Electronic notification of proxies may be given, in accordance with the procedures stated in the meeting notice, on the relevant section of the Company's internet site or by message sent to the certified electronic mail address provided in the meeting notice. Article 9 – Calling of General Meetings and Validity of Resolutions Resolutions adopted in a General Meeting in accordance with the requirements of law and the Company By-laws are binding on all shareholders, including those who are absent or dissenting.

An Ordinary General Meeting shall be considered regularly convened when: at first call, at least one-half of shares with voting rights are represented; at a single or second call, any portion of shares with voting rights are represented.

Resolutions are adopted by an absolute majority of votes cast, except for the election of Directors and Statutory Auditors for which the provisions of Articles 11 and 17 shall apply.

An Extraordinary Meeting of Shareholders shall be considered regularly convened when: at first call, at least one-half of shares with voting rights are represented; at second call, more than one-third of shares with voting rights are represented; or, at a single or third call, at least one-fifth of shares with voting rights are represented.

In an Extraordinary Meeting of Shareholders, resolutions are adopted with the favorable vote of at least two-thirds of shares represented at the Meeting.

The foregoing shall be without prejudice to any special majorities required by law or provisions governing Special Meetings for holders of shares of a particular class.

Article 10 – Chairmanship of General Meetings General Meetings shall be chaired by the Chairman of the Board of Directors or, in his absence, by the Vice Chairman, if appointed. Where both are absent, the chair for the Meeting shall be selected by those shareholders present.

The Secretary shall be appointed by the shareholders present, upon the proposal of the Chairman. Where the law so provides, or where deemed appropriate by the Chairman of the meeting, the minutes may be drawn up by a notary public appointed by the Chairman, in which case appointment of a Secretary shall not be required. Article 11 – Board of Directors The Company is managed by a Board of Directors consisting of a number varying from nine to fifteen members, as determined by Shareholders in a General Meeting.

No one aged 75 or over shall be appointed as a Director.

The Board of Directors is appointed by using lists of candidates filed at the company’s registered office at least 25 days prior to the date of the meeting. If several lists are submitted, one of the members of the Board of Directors shall be chosen from the list that obtained the second highest number of votes. Lists may be submitted only by those shareholders who, individually or together with others, own voting shares representing a percentage no lower than the percentage which is mandatory under

applicable law. Certification of that percentage must, if not presented at the time the lists are filed, be provided at least 21 days prior to the date of the meeting. All of the above shall be stated in the meeting notice.

No single shareholder, nor shareholders that are controlled by or associated with the company pursuant to the Italian Civil Code, can present or vote, even by means of third parties or a trustee company, more than one list of candidates. Each candidate can be present in one list only, otherwise he will be considered ineligible.

The candidates included on the lists must be indicated in numerical order and satisfy the requirements of integrity imposed by law. The candidate who is indicated at number one on the list must also satisfy the legal requirements of independence, in addition to the requirements of the corporate governance code adhered to by the Company.

Together with each list the following shall also be deposited: comprehensive information on the personal and professional characteristics of the candidates and declarations in which the single candidates accept the candidature and, on their own responsibility, state that they satisfy the envisaged requirements. The candidates who do not comply with these rules are ineligible.

Once Shareholders have, in a General Meeting, determined the number of directors to be elected, the following procedure shall be applied:

1. all the directors except one shall be elected from the list that has obtained the highest number of votes, on the basis of the numerical order under which they appear on the list;

2. in accordance with the law, one director shall be elected from the list that has obtained the second highest number of votes, on the basis of the numerical order under which the candidates appear on the list.

Lists that received a percentage of votes at the General Meeting that is less than half of the number required pursuant to the third paragraph of this article shall not be counted.

The foregoing rules for appointment of the Board of Directors do not apply if at least two lists are not submitted or voted on, or at General Meetings that must replace directors during their terms. In these cases, Shareholders shall decide in a General Meeting on the basis of a relative majority.

Without prejudice to what is set forth in this article, the appointment, revocation, expiration of the term of office, replacement or lapsing of Directors is governed by the applicable laws. However, if as a result of resignations or other reasons the majority of the Directors elected by Shareholders is no longer in office, the term of office of the entire Board of Directors will be deemed to have expired, and a General Meeting of Shareholders will be convened on an urgent basis by the Directors still in office for the purpose of electing a new Board of Directors. Article 12 – Corporate Offices, Committees and Directors’ Compensation The Board of Directors shall appoint, from among its members, a Chairman, a Vice Chairman, where deemed appropriate, and one or more chief executive officers. In the event of the absence or incapacity of the Chairman, the Vice Chairman, if appointed, shall assume his functions.

The Board of Directors may establish an executive committee and/or other committees having specific functions and tasks, determining both the composition and procedures of such committees. More specifically, the Board of Directors shall establish a

committee to supervise the Internal Control System and committees for the nomination and compensation of directors and senior executives with strategic responsibilities.

After receiving the opinion of the Board of Statutory Auditors, the Board of Directors shall appoint the manager responsible for the preparation of the Company’s financial reports. The Board of Directors may vest with the relevant functions more than one individual provided that these individuals perform such functions together and have joint responsibility. Only a person who has acquired several years of experience in the accounting and financial affairs at large companies may be appointed.

The Board of Directors may also appoint one or more Chief Operating Officers and may designate a Secretary, who need not be selected from among its members.

Compensation payable to the Directors and members of the executive committee shall be determined by Shareholders in a General Meeting and shall remain valid until or unless superseded by a further resolution. Compensation for Directors vested with particular offices shall be determined by the Board of Directors, after having received the opinion of the Board of Statutory Auditors. Shareholders may, however, set an aggregate amount for compensation of all Directors, including those vested with specific responsibilities.

Article 13 – Meetings and Duties of the Board of Directors Meetings of the Board of Directors, called by the Chairman, are convened at least once each quarter and at any other time the Chairman deems appropriate or when requested by three or more Directors or a Director to whom powers have been delegated.

A meeting of the Board of Directors can also be called, after first notifying the Chairman, by one or more of the Statutory Auditors.

Meetings are called through written notice, accompanied by all materials pertinent to the discussion, to be sent at least five days prior to the date of the meeting, except in cases of urgency.

Meetings are presided over by the Chairman or, in his absence, by the Vice Chairman, if appointed. In the absence of both, another Director designated by the Board shall assume the chair.

Directors to whom powers have been delegated must report to the Board of Directors and the Board of Statutory Auditors at least once each quarter on general operating performance and expected future developments, as well as on transactions carried out by the Company or its subsidiaries that are particularly significant in terms of their size or other characteristics, and each Director is required to disclose any interest that they may have, either directly or on behalf of third parties, in any transaction to which the Company is a party.

On the basis of the information received, the Board of Directors: evaluates the adequacy of the Company’s organizational and administrative structure and accounting systems; reviews the Company’s strategic, industrial and financial plans; and, based on reports from the bodies with delegated powers, assesses the Company’s overall operating performance.

Directors and Statutory Auditors may participate in meetings through the use of a telecommunications system. In such cases, it must be possible to identify the individual participants and they must be able to follow the proceedings, participate in real time in discussion of the items on the agenda and receive, send or view documents.

Article 14 – Resolutions of the Board of Directors For any resolutions taken by the Board to be valid, the majority of serving Directors must be present. Resolutions are passed by an absolute majority of votes of the Directors present. In the event of a tie, the chairman of the meeting shall have the deciding vote.

Resolutions are to be recorded in minutes signed by both the chair and secretary of the meeting.

Article 15 – Powers of the Board of Directors The Board is vested, without limitation, with the fullest powers for the ordinary and extraordinary management of the Company and has the authority to carry out any act, including acts of disposition, deemed appropriate to achievement of the Company’s purposes – including registration, subrogation, postponement or cancellation of mortgages, liens or priorities, in whole or in part, as well as effecting or cancelling registrations or notes of any kind, independently of the payment of debts to which such registrations or notes relate – without exclusion or exception other than those acts where the approval of Shareholders is required by law.

In addition to the power to issue non-convertible bonds, the Board of Directors is also authorized to adopt resolutions relating to:

■ merger and demerger of companies, where specifically allowed by law;

■ establishment or closure of branch offices;

■ designation of Directors empowered to represent the Company;

■ reduction of share capital in the event of shareholders exercising their right of withdrawal;

■ amendment of the By-laws to reflect changes in the law;

■ transfer of the Company’s registered office to another location in Italy.

The Board of Directors, and any individual or bodies it may delegate, shall also have the power to carry out, without the requirement for specific shareholder approval, all acts and transactions necessary to defend against a public tender or exchange offer, from the time of the public announcement of the decision or obligation to make the offer until expiry or withdrawal of the offer itself.

The Board of Directors, and any individual or bodies it may delegate, shall also have the power to implement those decisions, not yet fully implemented either in whole or in part and that do not constitute the normal activities of the company, taken prior to the communication referred to hereinabove, the implementation of which may counter the achievement of the objectives of the offer.

Article 16 – Representation The Chairman and Vice Chairman of the Board of Directors and the Chief Executive Officer, separately and individually, shall be the Company’s legal representatives in relation to the execution of resolutions adopted by the Board and in legal proceedings, as well as execution of other powers conferred on them by the Board.

The Board of Directors may also confer on other Directors the power to represent the Company to third parties and in legal proceedings, including the power to give formal depositions as provided by law.

Article 17 – Election and Qualifications of the Statutory Auditors The Board of Statutory Auditors is composed of 3 regular members and 3 alternate members. The minority has the right to appoint one regular and one alternate auditor.

All statutory auditors must be entered in the register of auditors and possess at least three years’ experience as a statutory account auditor.

The Board of Statutory Auditors is appointed on the basis of lists, filed at the Company’s registered office at least 25 days prior to the date of the meeting, in which candidates, whose number shall not exceed the number of statutory auditors to be appointed, are listed in numerical order. The list consists of two sections: one for candidates to the office of regular auditor, the other for candidates to the office of alternate auditor.

Only those shareholders who, alone or with others, hold in total voting shares representing a percentage no lower than that required by applicable laws for the submission of lists of candidates for the appointment of the company’s Board of Directors have the right to present lists of candidates.

Certification of that percentage must, if not presented at the time the lists are filed, be provided at least 21 days prior to the date of the meeting. All of the above shall be stated in the meeting notice.

No single shareholder, nor shareholders belonging to the same group, nor shareholders who are parties of shareholders’ agreements whose object is the company’s shares, can present or vote, even by means of third parties or a trustee company, more than one list. Each candidate can be present in one list only, otherwise he will be considered ineligible.

Candidates who are within the legally applicable limit for the number of concurrent offices held and meet the requirements of integrity, professionalism and independence set forth in the law and this article may be included in lists of candidates. Statutory auditors whose term of office has expired may be re-elected.

The lists must also be accompanied by the following:

■ information as to the identity of the shareholders submitting the lists, with an indication of the total percentage equity interest held;

■ a statement by shareholders other than those having a controlling interest or relative majority interest, including jointly, in which they declare that they have no relation to such latter shareholders as provided in applicable law;

■ exhaustive information on the personal and professional characteristics of the candidates and a declaration in which the single candidates accept the candidature and state, on their own responsibility, that they satisfy the requirements laid down by law and by the company’s By-laws for the position in question;

■ a list of the positions as director or statutory auditor held by candidates in other companies and their undertaking that they will update said list at the date of the General Meeting.

Any candidate for which the above rules are not observed will be considered as ineligible.

The statutory auditors are elected as follows:

1. two regular auditors and two alternate auditors are elected from the list that has obtained the highest number of votes from Shareholders, on the basis of the numerical order under which they appear in each section of the list;

2. in compliance with the provisions of applicable law, the remaining regular auditor and the other alternate auditor are elected from the list that has obtained the second highest number of votes from Shareholders, on the basis of the numerical order under which they appear in each section of the list. In the case of a tied vote between lists, the candidates are appointed from the list submitted by the shareholders having the greater equity interest or, subordinately, by the greatest number of shareholders.

The chairmanship of the Board of Statutory Auditors will go to the first candidate from the list that has obtained the second highest number of votes as determined pursuant to preceding point 2.

Should it be impossible to proceed with the appointment according to the above described system, Shareholders shall resolve by relative majority in a General Meeting.

Where the requirements of the law or company articles are not met, the statutory auditor forfeits his office.

In the event of a statutory auditor being replaced, the first alternate auditor belonging to the same list as the auditor being substituted and after having confirmed the existence of the prescribed requirements, will join the Board for the remainder of the auditors’ term of office. In the event of a replacement of the Chairman, the office will be taken over by the statutory auditor that replaces him.

Prior rules in matters of the appointment of statutory auditors do not apply to General Meetings that have to appoint regular and/or alternate auditors to return the number of members of the Board to its original level. In such cases, Shareholders resolve by relative majority in a General Meeting, basing the decision on the principle that minority shareholders shall be represented.

Meetings of the Statutory Auditors may be held by means of telecommunication systems. In such cases, the meeting is deemed to have been held at the location where it was convened and where at least one Statutory Auditor was present. In addition, it must be possible to identify the attendees, and they must be able to follow the proceedings, intervene in real time in the discussion of the topics on the Agenda and receive, send or view documents.

Article 18 – Independent Audits Accounting audits shall be performed by a firm of independent auditors which satisfies the statutory requirements.

Appointment and removal of the certified auditors and determination of their compensation is at the discretion of Shareholders upon recommendation from the Board of Statutory Auditors.

The duration of the appointment, as well as the rights, duties and prerogatives of the independent auditors are subject to the provisions of law.

Article 19 – Financial Year The Company's financial year ends on December 31 each year.

Article 20 – Allocation of Profit Net profit reported in the annual financial statements shall be allocated as follows:

■ to the legal reserve, 5% of net profit until the amount of such reserve is equivalent to one-fifth of share capital;

■ to savings shares, a dividend of up to €0.31 per share;

■ further allocations to the legal reserve, allocations to the extraordinary reserve and/or retained profit reserve as may be resolved by Shareholders;

■ to preference shares, a dividend of up to €0.31 per share;

■ to ordinary shares, a dividend of up to €0.155 per share;

■ to savings shares and ordinary shares, in equal amounts, an additional dividend of up to €0.155 per share;

■ to each ordinary, preference and savings share, in equal amounts, any remaining net profit which Shareholders may resolve to distribute.


From the date subsequent to the date of approval of the allocation of the result for 2010, reported net profit for each financial year shall be allocated as follows:

■ to the legal reserve, 5% of net profit until the amount of the reserve is equal to one-fifth of share capital;








In the event of a change to the par value of shares, the amounts stated above shall be adjusted on a pro rata basis.

Where the Board of Directors sees fit in relation to the Company’s operating results and within the conditions established by law, it may authorize the payment of interim dividends during the year.

Any dividends unclaimed within five years of the date they become payable shall be forfeited and shall revert to the Company. Article 21 – Shareholders’ Right of Withdrawal The right of shareholders to withdraw is governed by the applicable laws, it being understood that this right is not available to shareholders who, either because absent or dissenting, did not vote in support of resolutions extending duration or introducing or removing restrictions on the circulation of shares.

The terms and procedures for the exercise of this right, the criteria used to determine share values and the share redemption process are governed by the applicable laws.

Article 22 – Domicile and Identification of Shareholders For all matters regarding the relationship of Shareholders with the Company, their domicile shall be considered that recorded in the Shareholder Register.

The Company may, through the centralized share administration service, request that intermediaries provide details of the identity of shareholders and the number of shares registered to them on a particular date. Article 23 – Winding-up The Company shall be wound up in the cases provided for and in accordance with the term of the law.

It shall be for Shareholders, in a general meeting, to appoint one or more liquidators and determine their powers.

In the event of a winding up, the Company’s assets shall be distributed in the following order of priority:

■ repayment of savings shares up to their par value;

■ repayment of preference shares up to their par value;

■ repayment of ordinary shares up to their par value;

■ distribute any balance remaining, in an equal pro rata amount to shares of all three classes.

ANNEX B

BY-LAWS OF FIAT INDUSTRIAL S.P.A. POST-DEMERGER

Article 1 – Name A Joint Stock Company is hereby incorporated under the name "Fiat Industrial S.p.A.".

The name may be written in either upper case or lower case letters, with or without punctuation marks.

Article 2 – Registered Office The Company has its registered office in Turin (Italy).

Article 3 – Objects The objects for which the Company is established are: to carry on, either directly or through wholly or partially-owned companies and entities, activities relating to passenger and commercial vehicles, transport, mechanical engineering, agricultural equipment, energy and propulsion, as well as any other manufacturing, commercial, financial or service activity.

Within the scope and for the achievement of the above purposes, the Company may:

■ operate in, among other areas, the mechanical, electrical, electromechanical, thermomechanical, electronic, nuclear, chemical, mining, steel and metallurgical industries, as well as in telecommunications, civil, industrial and agricultural engineering, publishing, information services, tourism and other service industries;

■ acquire shareholdings and interests in companies and enterprises of any kind or form and purchase, sell or place shares and debentures;

■ provide financing to companies and entities it wholly or partially owns and carry on the technical, commercial, financial and administrative coordination of their activities;

■ purchase or otherwise acquire, on its own behalf or on behalf of companies and entities it wholly or partially owns, the ownership or right of use of intangible assets providing them for use by those companies and entities;

■ promote and ensure the performance of research and development activities, as well as the use and exploitation of the results thereof;

■ undertake, on its own behalf or on behalf of companies and entities it wholly or partially owns, any investment, real estate, financial, commercial, or partnership transaction whatsoever, including the assumption of loans and financing in general and the granting to third parties of endorsements, suretyships and other guarantees, including real security.

Article 4 – Duration The Company is established for a period ending on 31 December 2100.

Article 5 – Share Capital The issued share capital of the Company is €1,913,298,892.50, divided into 1,092,327,485 ordinary shares, 103,292,310 preference shares and 79,912,800 savings shares having a par value of €1.50 each.

Article 6 – Classes of Shares and Common Representative Ordinary and preference shares are registered shares. Savings shares may be either registered or bearer shares, at the option of the holder or as required by law. All shares are issued in dematerialized form.

Each share confers the right to share pro rata in any earnings allocated for distribution and any surplus assets remaining upon a winding-up, subject to the right of priority of preference and savings shares, as set out in Articles 20 and 23 below.

Each ordinary share confers the right to vote without any restrictions whatsoever. Each preference share confers the right to vote only on matters which are reserved for an Extraordinary Meeting of Shareholders and on resolutions concerning Procedures for General Meetings. No voting rights are attached to savings shares.

In the event of an increase in share capital, the holders of each class of shares are entitled to receive newly issued shares in the same class pro rata to the number of shares already held, or of another class (or classes) if shares of the class already held are not offered or the number offered is insufficient.

The Company’s share capital may also be increased by issuing ordinary and/or preference and/or savings shares in exchange for contributions in kind or receivables.

Resolutions authorizing the issuance of new preference or savings shares having the same characteristics as those already in issue for the purposes of a capital increase or the conversion of shares of another class do not require the further approval in a Special Meeting of Shareholders of either of those classes.

In the event that the savings shares are delisted, any bearer shares shall be converted into registered shares and shall have the right to a higher dividend increased by €0.0525, rather than €0.0465, with respect to the dividend received by the ordinary and preference shares.

In the event that the ordinary shares are delisted, the higher dividend received by the savings shares with respect to the dividend received by ordinary and preference shares shall be increased by €0.06 per share.

Any expenditure required for the safeguarding of the common interests of the holders of preference and savings shares, in relation to which dedicated funds are approved in the respective Special Meetings of Shareholders, shall be borne by the Company up to a maximum annual amount of €30,000 for each class.

In order to ensure that the Common Representatives of the holders of preference and savings shares have adequate information on transactions which could influence the market price of those shares, the Company’s legal representatives must provide the Common Representatives with any such information in a timely manner.

Article 7 – General Meetings General Meetings of Shareholders may be called where the Company has its registered office, or elsewhere in Italy, by means of a notice published, on or before the statutory deadline, on the Company’s internet site, as well as in any other manner

required by law. The notice may also provide for a single call only or a first, second and, for Extraordinary General Meetings only, a third call.

As the Company is required to prepare consolidated financial statements, an Ordinary General Meeting of Shareholders must be convened within 180 days after the close of the Company’s financial year.

A General Meeting may also be called whenever the Board of Directors deems it appropriate and must be convened when required by law.

Article 8 – Attendance and Representation at General Meetings Holders of voting rights who have obtained the appropriate documentary evidence from an authorized intermediary are entitled to attend a General Meeting or be represented by proxy. Communication thereof must be made to the Company in accordance with applicable law.

At each General Meeting, the Company may designate one or more representatives upon whom holders of voting rights may confer proxy, giving instructions to vote on one or more motions on the agenda. Details of the designated representative(s) and the procedure and deadline for conferment of the proxy are to be provided in the notice of the general meeting.

A General Meeting may be held with attendees being in multiple adjacent or remote locations that are linked by a telecommunications system, provided that the correct procedures and the principles of good faith and equal treatment of all shareholders are observed.

In such cases:

■ Notice of the General Meeting must state the audio/video link-up locations provided by the Company at which the Meeting may be attended and the Meeting will be deemed held at the location where the Chairman and the individual taking the Minutes of the Meeting are present;

■ The Chairman of the Meeting must, in his office as Chairman and/or through his delegated representatives present at the various link-up locations, be able to ensure that the Meeting is regularly convened, ascertain the identity of the attendees and their right to attend the Meeting, direct the proceedings and verify the result of any votes;

■ The individual taking the Minutes of the Meeting must be able to adequately follow any elements of the Meeting which are to be included in the Minutes;

■ All attendees must be able to participate in any discussion and vote simultaneously on the items on the Agenda.

The Board of Directors may institute a procedure for voting to be conducted electronically.

Proxies may be conferred electronically in conformity with applicable law.

Electronic notification of proxies may be given, in accordance with the procedures stated in the meeting notice, on the relevant section of the Company's internet site or by message sent to the certified electronic mail address provided in the meeting notice.

Article 9 – Calling of General Meetings and Validity of Resolutions Resolutions adopted in a General Meeting in accordance with the requirements of law and the Company By-laws are binding on all shareholders, including those who are absent or dissenting.

An Ordinary General Meeting shall be considered regularly convened when: at first call, at least one-half of shares with voting rights are represented; at a single or second call, any portion of shares with voting rights are represented.

Resolutions are adopted by an absolute majority of votes cast, except for the election of Directors and Statutory Auditors for which the provisions of Articles 11 and 17 shall apply.

An Extraordinary Meeting of Shareholders shall be considered regularly convened when: at first call, at least one-half of shares with voting rights are represented; at second call, more than one-third of shares with voting rights are represented; or, at a single or third call, at least one-fifth of shares with voting rights are represented.

In an Extraordinary Meeting of Shareholders, resolutions are adopted with the favorable vote of at least two-thirds of shares represented at the Meeting.

The foregoing shall be without prejudice to any special majorities required by law or provisions governing Special Meetings for holders of shares of a particular class.

Article 10 – Chairmanship of General Meetings General Meetings shall be chaired by the Chairman of the Board of Directors or, in his absence, by the Vice Chairman, if appointed. Where both are absent, the chair for the Meeting shall be selected by those shareholders present.

The Secretary shall be appointed by the shareholders present, upon the proposal of the Chairman. Where the law so provides, or where deemed appropriate by the Chairman of the meeting, the minutes may be drawn up by a notary public appointed by the Chairman, in which case appointment of a Secretary shall not be required. Article 11 – Board of Directors The Company is managed by a Board of Directors consisting of a number varying from nine to fifteen members, as determined by Shareholders in a General Meeting.

No one aged 75 or over shall be appointed as a Director.

The Board of Directors is appointed by using lists of candidates filed at the company’s registered office at least 25 days prior to the date of the meeting. If several lists are submitted, one of the members of the Board of Directors shall be chosen from the list that obtained the second highest number of votes. Lists may be submitted only by those shareholders who, individually or together with others, own voting shares representing a percentage no lower than the percentage which is mandatory under applicable law. Certification of that percentage must, if not presented at the time the lists are filed, be provided at least 21 days prior to the date of the meeting. All of the above shall be stated in the meeting notice.

No single shareholder, nor shareholders that are controlled by or associated with the company pursuant to the Italian Civil Code, can present or vote, even by means of third parties or a trustee company, more than one list of candidates. Each candidate can be present in one list only, otherwise he will be considered ineligible.

The candidates included on the lists must be indicated in numerical order and satisfy the requirements of integrity imposed by law. The candidate who is indicated at number one on the list must also satisfy the legal requirements of independence, in addition to the requirements of the corporate governance code adhered to by the Company.

Together with each list the following shall also be deposited: comprehensive information on the personal and professional characteristics of the candidates and declarations in which the single candidates accept the candidature and, on their own responsibility, state that they satisfy the envisaged requirements. The candidates who do not comply with these rules are ineligible.

Once Shareholders have, in a General Meeting, determined the number of directors to be elected, the following procedure shall be applied:

1. all the directors except one shall be elected from the list that has obtained the highest number of votes, on the basis of the numerical order under which they appear on the list;

2. in accordance with the law, one director shall be elected from the list that has obtained the second highest number of votes, on the basis of the numerical order under which the candidates appear on the list.

Lists that received a percentage of votes at the General Meeting that is less than half of the number required pursuant to the third paragraph of this article shall not be counted.

The foregoing rules for appointment of the Board of Directors do not apply if at least two lists are not submitted or voted on, or at General Meetings that must replace directors during their terms. In these cases, Shareholders shall decide in a General Meeting on the basis of a relative majority.

Without prejudice to what is set forth in this article, the appointment, revocation, expiration of the term of office, replacement or lapsing of Directors is governed by the applicable laws. However, if as a result of resignations or other reasons the majority of the Directors elected by Shareholders is no longer in office, the term of office of the entire Board of Directors will be deemed to have expired, and a General Meeting of Shareholders will be convened on an urgent basis by the Directors still in office for the purpose of electing a new Board of Directors. Article 12 – Corporate Offices, Committees and Directors’ Compensation The Board of Directors shall appoint, from among its members, a Chairman, a Vice Chairman, where deemed appropriate, and one or more chief executive officers. In the event of the absence or incapacity of the Chairman, the Vice Chairman, if appointed, shall assume his functions.

The Board of Directors may establish an executive committee and/or other committees having specific functions and tasks, determining both the composition and procedures of such committees. More specifically, the Board of Directors shall establish a committee to supervise the Internal Control System and committees for the nomination and compensation of directors and senior executives with strategic responsibilities.

After receiving the opinion of the Board of Statutory Auditors, the Board of Directors shall appoint the manager responsible for the preparation of the Company’s financial reports. The Board of Directors may vest with the relevant functions more than one individual provided that these individuals perform such functions together and have joint responsibility. Only a person who has acquired several years of experience in the accounting and financial affairs at large companies may be appointed.

The Board of Directors may also appoint one or more Chief Operating Officers and may designate a Secretary, who need not be selected from among its members.

Compensation payable to the Directors and members of the executive committee shall be determined by Shareholders in a General Meeting and shall remain valid until or unless superseded by a further resolution. Compensation for Directors vested with particular offices shall be determined by the Board of Directors, after having received the opinion of the Board of Statutory Auditors. Shareholders may, however, set an aggregate amount for compensation of all Directors, including those vested with specific responsibilities.

Article 13 – Meetings and Duties of the Board of Directors Meetings of the Board of Directors, called by the Chairman, are convened at least once each quarter and at any other time the Chairman deems appropriate or when requested by three or more Directors or a Director to whom powers have been delegated.

A meeting of the Board of Directors can also be called, after first notifying the Chairman, by one or more of the Statutory Auditors.

Meetings are called through written notice, accompanied by all materials pertinent to the discussion, to be sent at least five days prior to the date of the meeting, except in cases of urgency.

Meetings are presided over by the Chairman or, in his absence, by the Vice Chairman, if appointed. In the absence of both, another Director designated by the Board shall assume the chair.

Directors to whom powers have been delegated must report to the Board of Directors and the Board of Statutory Auditors at least once each quarter on general operating performance and expected future developments, as well as on transactions carried out by the Company or its subsidiaries that are particularly significant in terms of their size or other characteristics, and each Director is required to disclose any interest that they may have, either directly or on behalf of third parties, in any transaction to which the Company is a party.

On the basis of the information received, the Board of Directors: evaluates the adequacy of the Company’s organizational and administrative structure and accounting systems; reviews the Company’s strategic, industrial and financial plans; and, based on reports from the bodies with delegated powers, assesses the Company’s overall operating performance.

Directors and Statutory Auditors may participate in meetings through the use of a telecommunications system. In such cases, it must be possible to identify the individual participants and they must be able to follow the proceedings, participate in real time in discussion of the items on the agenda and receive, send or view documents.

Article 14 – Resolutions of the Board of Directors For any resolutions taken by the Board to be valid, the majority of serving Directors must be present. Resolutions are passed by an absolute majority of votes of the Directors present. In the event of a tie, the chairman of the meeting shall have the deciding vote.

Resolutions are to be recorded in minutes signed by both the chair and secretary of the meeting.

Article 15 – Powers of the Board of Directors The Board is vested, without limitation, with the fullest powers for the ordinary and extraordinary management of the Company and has the authority to carry out any act, including acts of disposition, deemed appropriate to achievement of the Company’s purposes – including registration, subrogation, postponement or cancellation of mortgages, liens or priorities, in whole or in part, as well as effecting or cancelling registrations or notes of any kind, independently of the payment of debts to which such registrations or notes relate – without exclusion or exception other than those acts where the approval of Shareholders is required by law.

In addition to the power to issue non-convertible bonds, the Board of Directors is also authorized to adopt resolutions relating to:

■ merger and demerger of companies, where specifically allowed by law;

■ establishment or closure of branch offices;

■ designation of Directors empowered to represent the Company;

■ reduction of share capital in the event of shareholders exercising their right of withdrawal;

■ amendment of the By-laws to reflect changes in the law;

■ transfer of the Company’s registered office to another location in Italy.

The Board of Directors, and any individual or bodies it may delegate, shall also have the power to carry out, without the requirement for specific shareholder approval, all acts and transactions necessary to defend against a public tender or exchange offer, from the time of the public announcement of the decision or obligation to make the offer until expiry or withdrawal of the offer itself.

The Board of Directors, and any individual or bodies it may delegate, shall also have the power to implement those decisions, not yet fully implemented either in whole or in part and that do not constitute the normal activities of the company, taken prior to the communication referred to hereinabove, the implementation of which may counter the achievement of the objectives of the offer.

Article 16 – Representation The Chairman and Vice Chairman of the Board of Directors and the Chief Executive Officer, separately and individually, shall be the Company’s legal representatives in relation to the execution of resolutions adopted by the Board and in legal proceedings, as well as execution of other powers conferred on them by the Board.

The Board of Directors may also confer on other Directors the power to represent the Company to third parties and in legal proceedings, including the power to give formal depositions as provided by law.

Article 17 – Election and Qualifications of the Statutory Auditors The Board of Statutory Auditors is composed of 3 regular members and 3 alternate members. The minority has the right to appoint one regular and one alternate auditor.

All statutory auditors must be entered in the register of auditors and possess at least three years’ experience as a statutory account auditor.

The Board of Statutory Auditors is appointed on the basis of lists, filed at the Company’s registered office at least 25 days prior to the date of the meeting, in which candidates, whose number shall not exceed the number of statutory auditors to be appointed, are listed in numerical order. The list consists of two sections: one for candidates to the office of regular auditor, the other for candidates to the office of alternate auditor.

Only those shareholders who, alone or with others, hold in total voting shares representing a percentage no lower than that required by applicable laws for the submission of lists of candidates for the appointment of the company’s Board of Directors have the right to present lists of candidates.

Certification of that percentage must, if not presented at the time the lists are filed, be provided at least 21 days prior to the date of the meeting. All of the above shall be stated in the meeting notice.

No single shareholder, nor shareholders belonging to the same group, nor shareholders who are parties of shareholders’ agreements whose object is the company’s shares, can present or vote, even by means of third parties or a trustee company, more than one list. Each candidate can be present in one list only, otherwise he will be considered ineligible.

Candidates who are within the legally applicable limit for the number of concurrent offices held and meet the requirements of integrity, professionalism and independence set forth in the law and this article may be included in lists of candidates. Statutory auditors whose term of office has expired may be re-elected.

The lists must also be accompanied by the following:

■ information as to the identity of the shareholders submitting the lists, with an indication of the total percentage equity interest held;

■ a statement by shareholders other than those having a controlling interest or relative majority interest, including jointly, in which they declare that they have no relation to such latter shareholders as provided in applicable law;

■ exhaustive information on the personal and professional characteristics of the candidates and a declaration in which the single candidates accept the candidature and state, on their own responsibility, that they satisfy the requirements laid down by law and by the company’s By-laws for the position in question;

■ a list of the positions as director or statutory auditor held by candidates in other companies and their undertaking that they will update said list at the date of the General Meeting.

Any candidate for which the above rules are not observed will be considered as ineligible.

The statutory auditors are elected as follows:

1. two regular auditors and two alternate auditors are elected from the list that has obtained the highest number of votes from Shareholders, on the basis of the numerical order under which they appear in each section of the list;

2. in compliance with the provisions of applicable law, the remaining regular auditor and the other alternate auditor are elected from the list that has obtained the second highest number of votes from Shareholders, on the basis of the numerical order

under which they appear in each section of the list. In the case of a tied vote between lists, the candidates are appointed from the list submitted by the shareholders having the greater equity interest or, subordinately, by the greatest number of shareholders.

The chairmanship of the Board of Statutory Auditors will go to the first candidate from the list that has obtained the second highest number of votes as determined pursuant to preceding point 2.

Should it be impossible to proceed with the appointment according to the above described system, Shareholders shall resolve by relative majority in a General Meeting.

Where the requirements of the law or company articles are not met, the statutory auditor forfeits his office.

In the event of a statutory auditor being replaced, the first alternate auditor belonging to the same list as the auditor being substituted and after having confirmed the existence of the prescribed requirements, will join the Board for the remainder of the auditors’ term of office. In the event of a replacement of the Chairman, the office will be taken over by the statutory auditor that replaces him.

Prior rules in matters of the appointment of statutory auditors do not apply to General Meetings that have to appoint regular and/or alternate auditors to return the number of members of the Board to its original level. In such cases, Shareholders resolve by relative majority in a General Meeting, basing the decision on the principle that minority shareholders shall be represented.

Meetings of the Statutory Auditors may be held by means of telecommunication systems. In such cases, the meeting is deemed to have been held at the location where it was convened and where at least one Statutory Auditor was present. In addition, it must be possible to identify the attendees, and they must be able to follow the proceedings, intervene in real time in the discussion of the topics on the Agenda and receive, send or view documents.

Article 18 – Independent Audits Accounting audits shall be performed by a firm of independent auditors which satisfies the statutory requirements.

Appointment and removal of the certified auditors and determination of their compensation is at the discretion of Shareholders upon recommendation from the Board of Statutory Auditors.

The duration of the appointment, as well as the rights, duties and prerogatives of the independent auditors are subject to the provisions of law.

Article 19 – Financial Year The Company's financial year ends on December 31 each year.

Article 20 – Allocation of Profit Net profit reported in the annual financial statements shall be allocated as follows:

■ to the legal reserve, 5% of net profit until the amount of such reserve is equivalent to one-fifth of share capital;








In the event of a change to the par value of shares, the amounts stated above shall be adjusted on a pro rata basis.

Where the Board of Directors sees fit in relation to the Company’s operating results and within the conditions established by law, it may authorize the payment of interim dividends during the year.

Any dividends unclaimed within five years of the date they become payable shall be forfeited and shall revert to the Company. Article 21 – Shareholders’ Right of Withdrawal The right of shareholders to withdraw is governed by the applicable laws, it being understood that this right is not available to shareholders who, either because absent or dissenting, did not vote in support of resolutions extending duration or introducing or removing restrictions on the circulation of shares.

The terms and procedures for the exercise of this right, the criteria used to determine share values and the share redemption process are governed by the applicable laws.

Article 22 – Domicile and Identification of Shareholders For all matters regarding the relationship of Shareholders with the Company, their domicile shall be considered that recorded in the Shareholder Register.

The Company may, through the centralized share administration service, request that intermediaries provide details of the identity of shareholders and the number of shares registered to them on a particular date. Article 23 – Winding-up The Company shall be wound up in the cases provided for and in accordance with the term of the law.

It shall be for Shareholders, in a general meeting, to appoint one or more liquidators and determine their powers.

In the event of a winding up, the Company’s assets shall be distributed in the following order of priority:

■ repayment of savings shares up to their par value;

■ repayment of preference shares up to their par value;

■ repayment of ordinary shares up to their par value;

■ distribute any balance remaining, in an equal pro rata amount to shares of all three classes.

ANNEX C

LIST OF SHAREHOLDINGS TRANSFERRED TO NUOVE INIZIATIVE CINQUE S.p.A.

• OFFICINE BRENNERO S.p.A. (100% owned) Via di Spini 13 (Frazione Gardolo), Trento; Companies Register: 00110810223; share capital €2,833,830

• IVECO ACENTRO S.p.A. (50% owned, equal to €1,500,000) Viale Monastir Km 6,000 snc – Cagliari; Cagliari Companies Register: registration pending following transfer of registered office; share capital €3,000,000

• ALTRA S.p.A. (100% owned) Via Adamoli No. 237 F-G - Genoa; Genoa Companies Register: 03293570101; share capital €516,400

• ASTRA VEICOLI INDUSTRIALI S.p.A. (100% owned) Via Caorsana 79 - Piacenza; Piacenza Companies Register: 00378460331; share capital €10,400,000

• NAVECO Ltd. (50% owned, equal to CNY 1,263,500,000) 264 ZhongYang Road, Xuanwu District, Nanjing (China); Companies Register: 320100400008083; share capital CNY 2,527,000,000

• SAIC IVECO Comm. Vehicles Investment. Co. Ltd. (50% owned, equal to USD 80,000,000) Third Building at No.615 NingQiao Road, Pudong New District, Shanghai (China); Companies Register: 310000400525307; share capital USD 160,000,000

• IVECO OTO MELARA S.c.r.l. (50% owned, equal to €20,000) Via Poma 2 – Rome; Rome Companies Register: 07032480589; share capital €40,000

• SAVECO PARTECIPAZIONI S.r.l. (100% owned, equal to €1,682,028) Via Puglia 35 – Turin; Turin Companies Register: 09201900017; share capital €1,682,028

• CRF S.c.p.a. (9.99% owned, equal to €4,495,500) Strada Torino 50 – Orbassano (TO); Turin Companies Register: 07084560015; share capital €45,000,000

• UNIONCAF S.r.l. (0.001% owned, equal to €0.60) Via Fanti 17 – Turin; Companies Register: 06441900013; share capital €60,000

• FIAT SE.P.IN S.c.p.a. (5.99% owned, equal to €98,994.87) Via Marochetti 11 – Turin; Turin Companies Register: 02255730018; share capital €1,652,669

• ELASIS S.c.p.a. (3.3% owned, equal to €660,000) Via Ex Aeroporto s.n. – Pomigliano d’Arco (NA); Naples Companies Register: 05696590636; share capital €20,000,000

• ORIONE S.c.p.a. (0.22% owned, equal to €264) Corso Ferrucci 112 A – Turin; Turin Companies Register: 02394230011; share capital €120,000

• SIRIO Sicurezza industriale S.c.p.a. (4.64% owned, equal to €5,573) Corso Ferrucci 112 A – Turin; Turin Companies Register: 05325740016; share capital €120,000

• FIAT REVI S.c.r.l. (6% owned, equal to €18,000) Corso Ferrucci 112 A – Turin; Turin Companies Register: 06802260015; share capital €300,000

• V.IVE.RE GEIE (50% owned) Via Puglia 35 – Turin; Turin Companies Register: 06907150012

• GEIE V.IV.RE (50% owned) 34, Quai du Point du Jour Boulogne (France) • IVECO MAGIRUS AG (5.66% owned, equal to €2,830,000) Nicolaus Otto Strasse 27 –

Ulm (Germany); Ulm Companies Register: HRB1432; share capital €50,000,000 • EOS S.c.r.l. (European Organization for Security) (3.04% owned, equal to €2,000) –270,

Av. De Tervuren, Woluwé-Saint Pierre (Brussels), Belgium; Companies Register: 0890768618; share capital €66,000

LIST OF SHAREHOLDINGS TRANSFERRED TO NUOVA IMMOBILIARE NOVE S.p.A.

• EUROPEAN ENGINE ALLIANCE S.c.r.l. (66.6% owned, equal to €21,363,198) Via Puglia 35; Turin Companies Register: 07613600019; share capital €32,044,797

• IVECO MOTORENFORSCHUNG (60% owned) Schlossgasse 9320, Arbon (Switzerland); Companies Register: CH-440.3.007.633-9 - Frauenfeld; share capital CHF 4,600,000

• FPT OF NORTH AMERICA (100% owned) 1209 Orange Street, Wilmington (USA); share capital USD 100

Partial and proportional Demerger Plan of Fiat S.p.A. to ... · Partial and proportional Demerger...

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