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“Fiat S.p.A.”
Registered Office: via Nizza 250, Turin
Share capital: €4,478,450,754.84
Turin Companies Register:
no. 00469580013
* * * * *
Minutes for the Ordinary Session of the General
Meeting of Shareholders held on 1 August 2014.
* * * * *
On the First of August, Two Thousand and Fourteen,
at Centro Congressi Lingotto, Via Nizza 280, Turin,
at approximately 11 a.m., ordinary and
extraordinary sessions of the General Meeting of
shareholders were convened at single call –
pursuant to the notice published on 2 July 2014 on
the Company’s website and on the website of 1Info
(the centralized document storage system) and, in
excerpt form, on 4 July 2014 in the newspaper La
Stampa – to discuss and vote on the following
Agenda
1. Appointment of a Director.
2. Approval of cross-border merger of Fiat S.p.A.
with and into Fiat Investments N.V., a wholly-
This document has been translated into English for the convenience of
international readers. The original Italian should be considered the
authoritative version.
2
owned subsidiary of Fiat S.p.A. incorporated in
the Netherlands to be renamed Fiat Chrysler
Automobiles N.V. (FCA); related resolutions.
In accordance with the By-laws, John Philip ELKANN,
Chairman of the Board of Directors, assumed the
chair and began proceedings, stating first of all
that:
- as noted above, notice of the meeting had been
published on 2 July 2014 on the Company’s website
and the website of 1Info (the centralized document
storage system) and, in excerpt form, on 4 July
2014 in the newspaper La Stampa in accordance with
Article 7 of the By-laws and applicable laws;
- information requirements vis-à-vis the public
and the stock exchange regulators in Italy and
abroad had been complied with;
- 1,233 shareholders were present or represented,
accounting for 655,045,626 shares out of a total
of 1,250,963,898, with a nominal value of €3.58
each;
- the meeting was regularly constituted and could
validly vote on the items on the agenda.
The Chairman, with the consent of shareholders,
asked Mr. Ettore MORONE to serve as secretary for
the ordinary session - consisting of the first item
3
on the agenda - and noted for the record that:
- in addition to himself, the following Directors
were present:
Sergio MARCHIONNE – Chief Executive Officer
Andrea AGNELLI
Joyce Victoria BIGIO
- the following Statutory Auditors were present:
Ignazio CARBONE – Chairman
Piero LOCATELLI
- with the following Directors:
Tiberto BRANDOLINI D'ADDA
René CARRON
Luca CORDERO di MONTEZEMOLO
Glenn EARLE
Patience WHEATCROFT
and Statutory Auditor being absent:
Lionello JONA CELESIA
- the secretary of the Board of Directors Roberto
RUSSO was also present;
- the identity of those present and their right to
attend had been verified by delegated personnel;
- the list of names of those participating in the
ordinary session of the meeting, either directly or
by proxy, and the respective number of shares held
would be attached to the minutes as Attachment “C”.
4
The Chairman also noted for the record that the
following shareholders holding more than 2% of
total voting shares were present or represented at
the Meeting:
* Giovanni Agnelli e C. S.a.p.a., with 375,803,870
shares, equivalent to 30.04% of total voting
shares, held through its subsidiary EXOR S.p.A.
* BAILLIE GIFFORD & CO, with 33,034,705 shares,
equivalent to 2.64%
* VANGUARD INTERNATIONAL GROWTH FUND, with
30,378,704 shares, equivalent to 2.43%
* NORGES BANK, with 26,942,643 shares, equivalent
to 2.15%
* PEOPLE'S BANK OF CHINA, with 25,028,249 shares,
equivalent to 2%
He also noted that Fiat S.p.A. holds 34,577,898 own
shares, with voting rights suspended, equivalent to
2.76% of total voting shares.
The Chairman then noted that, if shareholders had
no objection, investment analysts would observe
the meeting in person, in addition to members of
the press who were located in a separate press
room.
He noted that also present were representatives
from the independent auditors and specialist
5
personnel whose role was to assist with the
proceedings. He reminded shareholders that if they
intended to leave the meeting prior to its
conclusion, they should make themselves known to
the relevant officials when leaving to enable the
count of votes represented to be updated
accordingly (Article 4.10 of the Procedures for
General Meetings).
Before proceeding with the agenda, the Chairman
also stated that, pursuant to Article 5.2 of the
Procedures for General Meetings, there would be no
reading of documents that had already been filed
and made publicly available.
He then stated that anyone wishing to speak in
relation to the items on the agenda should, if
they had not already done so, book time to speak
at the secretary’s table and state the intended
topic.
In addition, pursuant to Article 3.6 of the
Procedures for General Meetings, the use of audio
or video recording devices by shareholders was
forbidden, and mobile telephones were to be turned
off.
He reminded those intending to speak that,
pursuant to Article 6.4 of the Procedures,
6
addresses should be concise and strictly pertinent
to the meeting agenda.
He added that, in accordance with Article 6.6 of
the Procedures, addresses which caused a
disturbance or obstructed the participation of
others or which were offensive or improper would
not be permitted.
Additionally, he stated that, in accordance with
Article 6.4 of the Procedures, a maximum of 5
minutes would be allotted to each speaker, during
which time any voting declarations should be made,
with 2 minutes for replies.
Shareholder Marco Geremia Carlo BAVA
asked for it to be recorded in the minutes that he
opposed this time limit.
The Chairman explained that once the allotted time
for speeches and responses had expired, the
microphone would be turned off and the podium
would automatically pass to the next speaker.
He then noted that several shareholders had
exercised their right to present questions prior to
the meeting, with numerous and, in some cases,
quite detailed questions having been received prior
to the 29 July 2014 deadline stated in the meeting
notice. Written responses had been provided
7
directly by the Company.
He informed shareholders that copies of those
questions and the replies were available to
attendees from staff located at the entrance to the
meeting hall.
The Chairman then declared the ordinary session of
the meeting open and proceeded with the discussion
of the first item on the agenda.
He informed shareholders that, as stated in Item 1
of the Directors Report (“General Meeting of
Shareholders – 1 August 2014, forming Attachment
“A” to these minutes), the term of office of the
independent director Glenn Earle – appointed by the
Board of Directors on 15 June 2014 to replace Gian
Maria Gros-Pietro with effect from 23 June 2014 –
expires at this Meeting pursuant to Article 2386 of
the Italian Civil Code.
He added that shareholders were being asked to
confirm the appointment of Glenn EARLE, whose CV
was attached to the Directors Report, and noted
that he met the criteria for board members approved
by shareholders at the time of election of the
current board of directors on 4 April 2012.
He noted that the motion being proposed also asked
shareholders to confirm that the Board of Directors
8
be composed of 9 members and that Glenn Earle be
appointed as a director of the Company, with the
provisions of Article 2390 of the Italian Civil
Code being waived.
He informed shareholders that Mr. Earle’s term of
office would, simultaneously with the remaining
Directors, expire on the date of the Shareholder
Meeting called for approval of the 2014 financial
statements.
Before opening for discussion, the Chairman
invited Ignazio CARBONE, Chairman of the Board of
Statutory Auditors, to address shareholders.
Mr. CARBONE proceeded with the reading of the
“Report of the Board of Statutory Auditors of Fiat
S.p.A. to Shareholders on 1 August 2014 relating to
Article 2408 of the Civil Code” (Attachment “B”).
The Chairman then passed to discussion of the
first item on the agenda and asked those who had
booked time to approach the microphone when called
and to ensure any questions asked were of general
interest and for the purposes of having adequate
information to vote on the motion. He asked that
the addresses, therefore, be concise and
pertinent, that speakers remain within the time
limit of five minutes – during which, as stated
9
previously, any voting declarations should be made
– and two minutes for replies.
He added that a buzzer would sound when only one
minute remained and that, as stated previously,
once a speaker’s allotted time had expired the
floor would automatically pass to the next
shareholder in the order booked.
He also noted that the minutes for the meeting
would not include or provide as attachments any
addresses or parts of addresses that were not
actually read for the benefit of those present and
pertinent to the items on the agenda.
The Chairman then opened the floor for discussion
of the first item on the agenda, a summary of which
follows.
Shareholder Marco Fabrizio ZABARINI
thanked the Group for having at least informed
employees on the performance of the business;
returned to the discussion of Club ALFA ROMEO that
he had begun at the last AGM asking if it were
possible to offer members some form of financial
participation;
he proposed that this could take the form of a
special convertible bond – limited to those who
could demonstrate that they had been a Club ALFA
10
ROMEO member for at least 5 years – without a
ceiling and higher than the €20 billion value
attributed to the brand in 2002;
he stated his belief that the €5 billion in
investment planned for ALFA ROMEO was too little
and that the proceeds of the convertible bond could
be used to finance the brand’s relaunch; he added
that as security, Club members should receive
shares in ALFA ROMEO S.p.A.;
he asserted that if the relaunch were not
significant in size, it would be necessary to sell
ALFA ROMEO to VOLKSWAGEN or other interested party;
he claimed it was obvious that VOLKSWAGEN wanted
not only ALFA ROMEO but also CHRYSLER to build up
its weak presence in North America;
he is convinced that Club members, out of
patriotism and enthusiasm for the brand, would
participate in such an issue if it were in support
of a major relaunch which included:
- engine development located in Arese, in the
Gardella building, with testing and production in
the province of Milan, since ALFA ROMEO “is Milan”;
- engine production should be located in Milan and
the surrounding area, to safeguard the brand, while
the remaining parts of the car (body work,
11
suspensions, transmissions, etc.) could even be
produced and assembled at Mirafiori;
- the design center should also be relocated to
Arese;
- the Museum should be located next to the
headquarters and redesigned based on the BMW model,
which has a sales showroom inside; at the showrooms
located inside their respective museums, in 2013
alone BMW sold 80,000 cars and AUDI sold 74,000
cars, while only 74,000 ALFA ROMEO’s were sold in
total.
- the related amenities should also be taken into
account, with hotel close to the main facility and
catering/food service given EXPO 2015 and Alfa
enthusiasts that will be visiting;
- and finally, FCA’s worldwide customer service
activities should be located at the technical
center in Arese;
He said he believed it was necessary to move
quickly in light of the agreement with the Italian
government dated 5 December 2012 which included
plans to locate design, testing, product
engineering and development, platforms and the ALFA
ROMEO style center, complete with a technical
department perhaps operated jointly with CNH
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INDUSTRIAL, where chassis, 6-cylinder gasoline
engines and low-impact or zero emissions diesel
engines could be designed, and perhaps even bring
back ALFA ROMEO’s old 6-cylinder gasoline engine.
he noted that, for volumes similar to the 159, the
cost of bringing that engine into line with current
regulations would have been too high, whereas for
the volumes that are expected for the SUVs and 6/7
ALFA ROMEO models it could be worth it.
Shareholder Giuseppe MARGARONE
wanted to know if the director whose appointment
was being confirmed was at the Meeting and, if so,
if he could present himself;
he added that he had been unable to find the date
of birth and country of residence of the director
and felt that information was necessary in any
document or presentation;
he stated that he would vote against the
appointment of the director, even though he had
nothing personal against him;
he asked why GROS-PIETRO, someone he admired
greatly, had resigned; he asked if Mr. GROS-
PIETRO’s resignation was due to incompatibility
with other positions held; he considers him a very
able person, director of CREVAL, and for that
13
reason he also bought shares in CREVAL;
he noted that he had also resigned from CREVAL to
go to another banking group and that now he has
also resigned from FIAT;
he reminded the Chairman that they had yet to
arrange their meeting and he hoped he wouldn’t have
to go to the Netherlands in order to speak with
him.
Shareholder Giovanni ANTOLINI
expressed his pleasure at seeing the auditorium
filled with shareholders, representatives of
investment funds and other institutions interested
in FIAT, which would change its name but not its
Italian creativity;
he is convinced that the Company will grow as
predicted by the CEO and that if in the future the
company wants to compete with the big global
automakers, it is going to have to make and sell at
least 7-8 million vehicles;
he said he was disappointed at the fact that, given
his age, he would be unable to attend the meetings
of FCA since they are no longer going to be held in
Italy;
he understands the venue for the Meetings will move
to the new headquarters and, to ensure that
14
shareholders can be present in Amsterdam, he
proposed that a charter flight be organized with
return to Italy the same day to avoid long trips or
other difficulties, particularly for older
shareholders;
he said it was his view that shareholders should
approve the appointment of the new director as
proposed;
he said he agreed with limiting the number of
directors to 9 because, as the proverb goes, “when
there are too many roosters crowing day never
comes”;
he is pleased that the board of the new
multinational auto group, FCA, is made up of
concrete and decisive individuals who know exactly
what needs to be done to compete with the major
automakers, even though he admits it will not be
easy;
he said he is in favor of the creation of FCA and
warned Chairman ELKANN that, if at the end of the
plan period the Company has not achieved its
primary targets, it would be forced to close shop
after all the efforts made and that would be
extremely disappointing for everyone;
he urged everyone to work hard to ensure that by
15
2018 FCA reaches the point where it will be
producing and selling 7-8 million cars.
Shareholder Marco Geremia Carlo BAVA
stated that he was speaking on behalf of himself
and the association “New Model for Development”
that would represent shareholders for civil
matters;
he noted that on his internet sites marcobava.it,
marcobava.eu and omicidioedoardoagnelli.net,
people would find the by-laws for that association
and the questions sent in advance of today’s
Meeting, the answers to which he was upset to see
had not been made available to all shareholders at
the entrance; he observed that for the INTESA
SANPAOLO meeting the written questions and
responses had been attached to the minutes as the
notary could testify;
he stated that his solicitation for proxies could
be found on the above websites, but that he had
not received any proxy appointment; in fact, the
shareholder who traditionally appointed him as
proxy – Pierluigi ZOLA – had died a month ago. At
a past shareholder meeting, AGNELLI had nicknamed
them “Fred and Ginger” and so he saluted “Fred”;
he said he would not approve the appointment of a
16
director who had not first been elected by
individual shareholders and had received
confirmation earlier in today’s Meeting that not
even the Statutory Auditors look after the
interests of minority shareholders;
he remarked that the Chairman had practically
justified the actions of the police toward a
shareholder who exceeded an arbitrary time limit;
on that point, he wished to provide an update on
status of his lawsuits: he had been charged with
disturbance of the peace, even though in his view
a meeting of shareholders is not a public event
but rather a private event that can only be
attended with the proper documentation; he accused
the police of private violence and the only
offense he had been charged with was disturbance
of the peace;
he maintained that the Chairman had not said “the
microphone will be taken away” or “you will be
removed by the police” and that the police had
acted on the basis of a law that does not apply to
shareholder meetings;
he noted that the Chairman of the Board of
Statutory Auditors had in fact admitted that
today’s Meeting had not be regularly convened
17
since on 2 July 2014, the SEC had not yet given
its approval; he claimed that FIAT had forced the
SEC’s hand and the SEC gave its approval 6 days to
a week later;
he objected to the fact that the Chairman of the
Board of Statutory Auditors had not been able to
quantify the total cost of the transaction in tax
terms or which entity would bear the cost and how;
he noted that they had limited themselves to
saying that no costs were expected since the tax
authorities (Agenzia delle Entrate) were expected
to treat the transaction as tax neutral as a
result of utilization of tax loss carryforwards;
he considers that position untrue and not prudent,
particularly coming from a qualified accountant.
When the allotted time had expired, Mr. BAVA
continued to speak with the microphone switched
off.
The Chairman
- responded to Giuseppe MARGARONE that:
Gian Maria GROS-PIETRO’s resignation was related to
EU Capital Requirement Directive IV that would soon
come into effect; that directive limits the number
of boards of other companies that a member of a
management board of a banking group can serve on,
18
as noted in the press release issued by the Company
on 15 June 2014;
it is not customary for a director to present
himself to shareholders at a general meeting; when
a director has been co-opted following a
resignation, the appointment requires confirmation
by shareholders;
Glenn EARLE’s curriculum vitae has been made
publicly available; he was born in 1958 and is
resident in London, England;
- responded to Giovanni ANTOLINI that:
he appreciated the encouragement shown by the
shareholder and everyone was determined to move the
plan forward; as attending the FCA AGM in Amsterdam
next year could prove difficult for some, those
interested will be given the opportunity of
following the AGM live via the corporate website;
that arrangement will certainly be more comfortable
and less costly than a charter flight to the
Netherlands.
The Chairman then proceeded with the replies.
Shareholder Marco Geremia Carlo BAVA
stated that he was of the view that the Company’s
boards of directors and statutory auditors were not
independent as a number of events that have
19
happened over the past ten years have today
culminated in the Company relocating abroad
primarily to avoid taxes;
he stated his hope that the Italian tax authorities
would confirm his belief;
he criticized the Company for not being able to
quantify how much the transaction would cost from a
tax perspective if the Italian tax authorities
disallow utilization of tax loss carryforwards;
he added that if you google the registered office
address in the UK, you will find a building with
signs saying “short, medium, long-term office
leases”.
he said he believed that 50 people don’t constitute
a permanent establishment for a group like FIAT;
in his view, the Company was continuing to act
improperly and with absolute impunity;
he asserted that with FIAT’s power and arrogance it
thinks it can make its own laws and what happened
with the SEC is clear proof of that.
When the allotted time had expired, Mr. BAVA
continued to speak with the microphone switched
off.
Shareholder Giuseppe MARGARONE
thanked the Chairman for the information provided;
20
credited the CEO with being a good strategist as
his actions have saved FIAT;
believes too much focus has been placed on high
finance and that more space should be given to
engineering, particularly in terms of designing and
producing new models;
he believes that the Group doesn’t currently have a
product portfolio and that, as far as car
enthusiasts are concerned, the Italian auto
industry is in decline.
The Chairman
responded that he doesn’t agree with the
shareholder’s view, in the sense that in recent
years FIAT, particularly since the collaboration
with CHRYSLER, has been one of the most innovative
automakers, producing great cars like the MASERATI
Quattroporte and Ghibli, when no significant new
products had been produced in Italy for more than
20 years;
he said that as Chairman and himself an engineer,
he was proud to be a part of this Company and
current and future production of the Group was
accompanied by enormous ambition.
Shareholder Giovanni ANTOLINI
remarked that great companies are only made by
21
great men but they all have to deal with
uncertainty; he is convinced that without it – that
is, if we could always count on certainty - then
anyone could run a company and there would be no
great men, just functionaries;
he repeated that only great men make great
companies and believes that FIAT’s managers are
great men and have the Italian people behind them;
he considers it correct that those who don’t intend
to be a part of new organization proposed by
management exercise their right to withdraw and, in
doing so, demonstrate that they are not courageous
men, or great men, but only men who aren’t willing
to take risks;
he believes in the capability of those who are at
the helm of FIAT whose performance shareholders
have had years to evaluate and who have achieved
great results, particularly considering that after
FRESCO and CANTARELLA and the convertible bond, in
2003 FIAT narrowly escaped bankruptcy.
With the addresses from shareholders completed, the
Chairman closed the discussion and proceeded with
voting on the motion to:
. confirm that the Board of Directors be composed
of 9 members
22
. appoint, for the remainder of the term of office
that will expire on the date of the Shareholder
Meeting called for approval of the 2014 financial
statements, Glenn EARLE (born in Douglas, Isle of
Man, UK, on 12 January 1958, domiciled, for the
purposes of the position, in via Nizza 250, Turin,
tax payer code RLEGNN58A12Z114A, UK citizen) as a
director of the Company, with the provisions of
Article 2390 of the Italian Civil Code being
waived.
He informed shareholders that the voting would take
place using the TELEVOTO system in accordance with
the instructions shown on the screen.
He then declared the voting open and informed
shareholders that they should press button:
. F to vote in favor
. C to vote against
. A to abstain
He then instructed shareholders that, after
checking the display to verify that the vote
entered was correct, they should press the OK
button to record their vote.
He added that proxies or trustees needing to
differentiate votes should vote at the assisted
voting booth.
23
He then declared the vote open.
The Chairman then declared that the motion had been
approved by a majority:
with 636,993,966 votes in favor
2,574,880 votes against
2,071,700 abstentions
and 14,407,464 shares not voted.
The list of shareholders participating in the
ordinary session of the general meeting who voted
in favor, against, abstained or did not vote, with
the respective number of shares, is reported in
Attachment “C”.
Having completed with the order of business for the
ordinary session, at around 12:00 pm the meeting
continued with the extraordinary session - item 2
on the agenda - with minutes taken by a notary.
The following attachments form an integral and
substantive part of the minutes:
. under letter “A”, the report of the Board of
Directors “General Meeting of Shareholders – 1
August 2014 (Item 1 on the agenda),
. under letter “B”, the “Report of the Board of
Statutory Auditors of Fiat S.p.A. to Shareholders
on 1 August 2014 relating to Article 2408 of the
Civil Code” read by the Chairman of the Board of
24
Statutory Auditors, Ignazio CARBONE,
- under letter “C”, a list of participants in the
ordinary session of the general meeting, attending
on their own behalf or as proxy, with details of
the number of shares voted and, in each case, an
indication of whether the shares were voted in
favor, against, abstained, or not voted.
The Chairman The Secretary
(John Philip ELKANN) (Ettore MORONE)
General Meeting of Shareholders – 1 August 2014(Item 1 on the Agenda)
Directors Report Attachment “A"
2
1. Appointment of a Director
Shareholders,
The term of office of the independent director Glenn Earle – co-opted by the Board of Directors on June 15, 2014 to replace Gian Maria Gros-Pietro with effect from June 23, 2014 – expires at this Shareholder Meeting pursuant to Article 2386 of the Italian Civil Code.
We propose that you confirm the appointment of Glenn Earle as a director of the Company. Mr. Earle’s curriculum vitae is attached. He has broad and extensive knowledge and experience, both generalist and specific, acquired in an international setting and relevant to an understanding of the macro-economy and global markets, more generally, as well as the industrial and financial sectors, more specifically.
His level of knowledge and experience is consistent with the criteria approved by Shareholders on April 4, 2012 for selection of board members.
We are therefore proposing that you vote to confirm that the Board of Directors be composed of 9 members and that Glenn Earle be appointed as a director of the Company, waiving the provisions of Article 2390 of the Italian Civil Code.
Mr. Earle’s term of office will expire at the same time as the term of office of the entire Board of Directors, which will be on the date of the Shareholder Meeting called for approval of the 2014 financial statements.
2 July 2014
On behalf of the Board of Directors
/s/ John Elkann
John Elkann
CHAIRMAN
3
Glenn Earle
Glenn Earle is a Senior Advisor at Affiliated Managers Group Limited (AMG) and a Board Member and Trustee of the Royal National Theatre and of Teach First, where he is a member of the Finance Committee. He is also Chairman of the Advisory Board of Cambridge University Judge Business School.
Mr. Earle retired in December 2011 from Goldman Sachs International, where he was most recently a Partner Managing Director and the Chief Operating Officer. He previously worked at Goldman Sachs in various roles in New York, Frankfurt and London from 1987, becoming a Partner in 1996. In 1979, he joined Grindlays Bank Group and from 1980 to 1985 worked in the Latin America Department in London and New York, leaving as a Vice President.
He is a graduate of Emmanuel College, Cambridge and of Harvard Business School, where he earned an MBA with High Distinction and was a Baker Scholar and Loeb, Rhoades Fellow.
His other activities include membership of the Development Advisory Forum of Emmanuel College, Cambridge, The Higher Education Commission and The William Pitt Group at Chatham House. His previous responsibilities include membership of the Board of Trustees of the Goldman Sachs Foundation and of the Ministerial Task Force for Gifted and Talented Youth.
Mr. Earle has been an independent member of the Board of Directors of Fiat S.p.A. since 23 June 2014.
Attachment “B”
Report of the Board of Statutory Auditors relating to Article
2408 of the Italian Civil Code
With reference to the communication received by the Statutory
Auditors from the shareholder Marco BAVA, nominally formulated
under Article 2408 of the Italian Civil Code:
1. On 31 March 2014, during Fiat S.p.A.’s Annual General Meeting of
Shareholders, Mr. BAVA asked if the intended merger was a form
of “estero-vestizione” and risked being considered tax avoidance.
2. On 1 April 2014, he made a formal complaint stating that he had
been denied the right to vote on his own behalf or via proxy at
that Meeting, as well as the opportunity to complete his address
and declare how he would vote.
Accordingly, he asked that the shareholder resolutions passed at
that Meeting be annulled and that the Meeting be reconvened
such that he has the opportunity to exercise his right to speak and
to vote, without prejudice to the sanctions and rulings against
those responsible.
3. On 16 May 2014, he sent a formal caution to the Chairman of Fiat
that the resolutions passed by Fiat S.p.A. shareholders at the
Meeting of 31.03.2014 should not be considered valid and filed a
formal complaint with the Chairman of the Board of Statutory
Auditors. It is his contention that the resolutions are not legally
valid because he was denied the right to vote, illegally according
to him, by being illegitimately removed from the Meeting by the
police, as noted in the minutes signed by the Chairman of Fiat
S.p.A.
He then requested that the Meeting be reconvened in order to
allow him the opportunity to duly exercise his right to vote and he
added that if the caution were ignored he would immediately ask
the competent authorities to intervene with sanctions and rulings
against behavior that was in blatant violation of the law.
4. On 21 July 2014, he notified us that the documentation published
for today’s Meeting did not quantify the expected tax impact of
the transaction as the Italian tax authorities had not yet
responded to the Company’s ruling request. As this is a critical
element in any assessment of the merits of the merger, he asked
that the Meeting be postponed until the tax-related costs could
be determined or, if utilization of the tax losses indicated in the
documentation is not accepted, to set aside adequate provisions
or include in the resolution a cap beyond which the transaction
cannot take place.
5. On 28 July 2014, he asked to know when and how the SEC
approved the FIAT-FCA transaction, including details of the date,
time and how the approval was communicated. He also requested
that the date of the Meeting be changed to 30 days after the date
of the SEC approval as the date currently set for the Meeting may
not be correct at least in terms of timing.
In relation to the above, the observations of the Statutory Auditors
are as follows:
1. In the opinion of the Statutory Auditors, the proposed merger
does not constitute an “estero-vestizione”, if that is intended to
mean the artificial establishment of the tax residency of a
company in another jurisdiction.
2. and 3. The minutes of the Meeting of 31 March 2014, cited below,
confirm that at the beginning the Chairman drew the attention of
shareholders to key provisions of the Procedures for General
Meetings which formed an attachment to the Corporate
Governance Report distributed to shareholders:
o 5 minutes will be allotted to each speaker, during which
time any voting declarations should be made, and 2 minutes
for replies;
o once the allotted time for speeches and responses has
expired, the microphone will be turned off and the podium
will automatically pass to the next speaker.
The Chairman also noted that, pursuant to Article 3.6 of the
Procedures for General Meetings, the use of audio or video
recording devices by shareholders is forbidden, and mobile
telephones are to be turned off.
On page 49 of the minutes from the same meeting, the record
states that:
"...During the speech by CEO Sergio MARCHIONNE, the
shareholder Marco Geremia Carlo BAVA, who continued talking
with the microphone turned off, using his own amplifier, was
removed from the room by the police and asked that the
minutes reflect his statement "they're taking me away".
In the objective view of the Statutory Auditors, who were
present at the Meeting, the behavior of the shareholder Marco
BAVA at the 31 March 2014 Meeting consisted of a series of
actions that were in violation of the procedures.
The minutes from the Meeting also confirm that BAVA was
removed by the police (page 68).
With regards to the communications from the shareholder
BAVA to the Board of Statutory Auditors dated 1 April 2014 and
16 May 2014, it is our opinion that the reason Mr. BAVA was
removed from the auditorium was to allow the proceedings to
continue in an orderly and proper manner.
4. With regard to the tax aspects of the transaction, our
observation is that they have been adequately addressed in
both the Directors Report (paragraph 7) and the Information
Document (Sections 1.2.1 and 2.1.2.8). The merger will not
generate “tax costs” for either Fiat S.p.A. or FCA in that:
o Gains arising from the transfer of assets to a foreign
jurisdiction will be fully offset by tax loss carryforwards.
o Fiat S.p.A.’s tax-deferred reserves will be reconstituted in
the equity of the permanent establishment in Italy
(maintaining the tax-deferred status).
o The inability to utilize the portion of Fiat S.p.A.’s tax loss
carryforwards not attributable to the permanent
establishment will not generate a loss as no deferred tax
assets were recognized in relation to those carryforwards.
o In terms of indirect taxes, stamp duty of €200 will be
payable in relation to the merger.
The remaining issue to be evaluated is the impact of the
merger in relation to Fiat’s domestic tax consolidation.
Under Article 124.5 of the Italian tax code (Presidential Decree
917/86), the Company filed a ruling request with the Agenzia
delle Entrate for continuation of the current domestic tax
consolidation scheme for Fiat S.p.A. and Italian subsidiaries by
the new permanent establishment in Italy. That request was
submitted on April 16 this year; as of today’s date, the tax
authorities have not issued a ruling (the deadline is August 14,
but can be extended for a further 120 days if additional
information is required).
On the basis of a thorough analysis as to the probability that
the ruling for continuation of the existing domestic tax
consolidation scheme by Fiat Chrysler Automobiles N.V. will be
accepted, the Company believes all necessary prerequisites and
conditions exist for a favorable outcome.
5. Finally, the Registration Statement of Fiat Investments N.V. on
Form F-4 was declared effective at 4pm Washington DC time
on 8 July 2014. The Company was duly notified on July 9th and
issued a public statement to that effect on July 10th prior to
the market open. The notice calling today’s Meeting was
published on 2 July 2014, in keeping with the 30-day notice
requirement.
Attachment “C"
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