SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
THE SECURITIES ACT OF 1933
CNH INDUSTRIAL N.V.
(Name of the Issuer)
(State or Other Jurisdiction of
Incorporation or Organization)
25 St. Jamess Street
London SW1A 1HA
Tel. No.: +44-207-7660-346
(Address of Principal Executive Offices and Zip Code)
CNH Industrial N.V. Equity Incentive Plan
(Full Title of the Plan)
Michael P. Going
CNH Industrial America LLC
6900 Veterans Blvd
Burr Ridge, IL 60527
Tel. No.: (630) 887-3766
(Name, Address and Telephone Number of Agent for Service)
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
CNH Industrial N.V.
25 St. Jamess Street
London SW1A 1HA
Tel. No.: +44-207-7660-346
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
|Large accelerated filer||☑||Accelerated filer||☐|
|Non-accelerated filer||☐||Smaller reporting company||☐|
|Emerging Growth Company||☐|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
|Title of Securities to be Registered(1)||
Common Shares par value 0.01 per share
CNH Industrial N.V. (CNH Industrial) is offering Common Shares pursuant to the CNH Industrial N.V. Equity Incentive Plan (the Plan).
Pursuant to Rule 416 under the Securities Act of 1933, as amended (the Securities Act), this Registration Statement shall also cover additional Common Shares which may become issuable by reason of any stock split, stock dividend, recapitalization, or other similar transaction effected without consideration which results in the increase in the number of the Registrants outstanding Commons Shares.
Represents 50,000,000 additional Common Shares reserved for issuance under the Plan.
Estimated solely for purposes of computing the amount of the registration fee. Pursuant to Rule 457(c) and Rule 457(h) under the Securities Act, the proposed maximum offering price per share and proposed maximum aggregate offering price are based on the reported average of the high and low prices for the Registrants Common Shares on the New York Stock Exchange on May 29, 2020.
This Registration Statement on Form S-8 (the Registration Statement) is being filed for the purpose of registering additional common shares of CNH Industrial N.V. (the Registrant), par value 0.01 per share (the Common Shares), in connection with the CNH Industrial N.V. Equity Incentive Plan, as amended (the EIP), for which a Registration Statement on Form S-8 relating to the EIP is effective. This Registration Statement on Form S-8 registers an additional 50,000,000 Common Shares issuable pursuant to the EIP. The contents of the previous Registration Statement on Form S-8 filed by the Registrant with the Securities and Exchange Commission (the Commission) for the EIP on June 6, 2014 (File No. 333-196574), to the extent not otherwise amended or superseded by the contents hereof, are incorporated by reference into this Registration Statement pursuant to General Instruction E of Form S-8.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
|Item 3.|| |
Incorporation of Documents by Reference.
The Registrant incorporates herein by reference the following documents filed (other than, in each case, documents or information deemed to have been furnished and not filed in accordance with SEC rules) by the Registrant with the SEC:
The description of the Common Shares included or incorporated by reference under Item 1 of the Companys Registration Statement on Form 8-A (No. 001-36085), as filed by the Company with the SEC on September 23, 2013.
The Companys Annual Report on Form 20-F for the year ended December 31, 2019, as filed with the SEC on March 3, 2020.
The Companys report on Form 6-K filed with the SEC on May 8, 2020.
All other reports filed by the Registrant pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), since December 31, 2019 (other than the portions of those documents not deemed to be filed).
All reports and other documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from their respective dates of filing (such documents, and the documents enumerated above, being hereinafter referred to as Incorporated Documents).
Any statement contained in an Incorporated Document shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed Incorporated Document modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
|Item 8.|| |
See Exhibit Index.
INDEX TO EXHIBITS
|4.1||Articles of Association (incorporated herein by reference to the Annual Report on Form 20-F of the registrant for the year ended December 31, 2013 (File No. 001-36085)|
|4.2||CNH Industrial N.V. Equity Incentive Plan (as amended and restated on March 3, 2020)|
|5.1||Opinion of Freshfields Bruckhaus Deringer LLP as to the legality of the securities being registered|
|23.1||Consent of Ernst & Young LLP|
|23.2||Consent of Freshfields Bruckhaus Deringer LLP (included in Exhibit 5.1)|
|24.1||Power of Attorney of Certain Directors and Officers of CNH Industrial N.V. (see page II-2 to this Registration Statement)|
|24.2||Power of Attorney of Authorized Representative in the United States (see page II-3 to this Registration Statement)|
Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in London, United Kingdom, on the 3rd day of June 2020.
|CNH Industrial N.V.|
|Name: Suzanne Heywood|
|Title: Chair and Acting Chief Executive Officer|
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Suzanne Heywood and Oddone Incisa (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Act of 1933 (the Securities Act), and any rules, regulations and requirements of the Securities and Exchange Commission (the Commission) in connection with the registration under the Securities Act of the Common Shares and any Blue Sky laws or other securities laws of any of the states of the United States of America in order to effect the registration or qualification (or exemption therefrom) of the said securities for issue, offer, sale or trade under the Blue Sky laws or other securities laws of any of such states and in connection therewith to execute, acknowledge, verify, deliver, file and cause to be published applications, reports, consents to service of process, appointments of attorneys to receive service of process and other papers and instruments which may be required under such laws, including specifically, but without limiting the generality of the foregoing, the power and authority to sign his or her name in his or her capacity as an attorney-in-fact or in any other capacity with respect to this Registration Statement and any registration statement in respect of the Common Shares that is to be effective upon filing pursuant to Rule 462(b) (collectively, the Registration Statement) and/or such other form or forms as may be appropriate to be filed with the Commission or under or in connection with any Blue Sky laws or other securities laws of any state of the United States of America or with such other regulatory bodies and agencies as any of them may deem appropriate in respect of the Common Shares, and with respect to any and all amendments, including post-effective amendments, to this Registration Statement and to any and all instruments and documents filed as part of or in connection with this Registration Statement.
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities on the 3rd day of June 2020:
|Chair and Acting Chief Executive Officer (Principal Executive Officer)|
|Chief Financial Officer (Principal Financial Officer)|
|Chief Accounting Officer (Principal Accounting Officer)|
|Howard W. Buffett|
|Nelda J. Connors|
|Jacqueline A. Tammenoms Bakker|
|Authorized Representative in the United States|
|Michael P. Going|
CNH INDUSTRIAL N.V.
EQUITY INCENTIVE PLAN
CNH INDUSTRIAL N.V. EQUITY INCENTIVE PLAN
1. Introduction and Purpose. This CNH Industrial N.V. Equity Incentive Plan was adopted by the CNH Industrial N.V. (the Company) Board of Directors by written resolution dated February 27, 2014 and was subsequently ratified and approved by the Company shareholders at the Annual General Meeting of the Companys stockholders held on April 16, 2014. The Plan was amended by the Board on March 3, 2020 (the Amendment Date), as a result of which the number of shares of Stock available for grant in Section 5 following the Amendment Date is 50,000,000 of which 7,000,000 are, as approved by the Companys shareholders at the Annual General Meeting of the Companys stockholders on April 16, 2020, available for grant to Executive Directors. Terms capitalized but not defined shall have the definitions set forth in Section 2.
The purpose of the Plan is to set forth principles and rules, which govern the grant of Stock-based awards to eligible top performers and key leaders of the Company (and its Subsidiaries), in order to foster a strong performance culture, to reward the best performers, and to align management and shareholders interests in achieving the Companys financial and other objectives. The Company believes that the Plan will also assist in attracting and retaining individuals of outstanding training, experience and ability, and will also ultimately promote the long-term success of the Company.
2. Definitions. Unless the context clearly indicates otherwise, the following terms shall have the following meanings:
(a) Award means the grant of a right or potential right, as applicable, to a Participant to receive incentive compensation under the Plan. An Award shall be earned and vested only to the extent its terms and conditions are satisfied.
(b) Award Agreement means the written or electronic agreement between the Company and the Participant that sets forth the applicable terms, conditions, and limitations with respect to a particular Award, together with any amendments thereto. Each Award Agreement shall be in such form and shall contain such terms and conditions as determined by the Committee in its sole discretion.
(c) Board means the board of directors of the Company.
(d) Change of Control means an event described in Section 12 hereof.
(e) Cause shall mean, unless otherwise defined in the applicable Award Agreement or an employment agreement between the Participant and the Company (or any Subsidiary or Joint Venture, as applicable): (i) a Participant engaging (or about to engage) in willful misconduct that is injurious to the Company or its Subsidiaries or Joint Ventures, (ii) a Participant embezzling or misappropriating funds or property of the Company or its Subsidiaries or Joint Ventures, or a Participants conviction of a felony or the Participants entry of a plea of guilty or nolo contendere to a felony, (iii) a Participants willful failure or refusal to substantially perform his or her duties or responsibilities that continues after being
brought to the attention of the Participant, or (iv) a Participants violation of any restrictive covenants entered into between the Participant and the Company (or any Subsidiary or Joint Venture, as applicable) or the Companys (or any Subsidiarys or Joint Ventures) code of conduct or written policies or any crime involving a material element of fraud or dishonesty. Any determination of Cause shall be made by the Committee in its sole discretion. Any such determination shall be final and binding on a Participant.
(f) Code means the U.S. Internal Revenue Code of 1986, as amended from time to time. Any reference in the Plan to a specific Section of the Code shall include such Section, any valid regulation and other applicable authorities promulgated thereunder, and any comparable provision of any future legislation amending, supplementing, or superseding such Section of the Code.
(g) Committee means the Compensation Committee of the Board.
(h) Company means CNH Industrial N.V., a public limited liability company, incorporated in and under the laws of The Netherlands, or any successor thereto.
(i) Exchange Act means the U.S. Securities Exchange Act of 1934, as amended from time to time. Any reference in the Plan to a specific Section of the Exchange Act shall include such Section, any valid regulation and other applicable authorities promulgated thereunder, and any comparable provision of any future legislation amending, supplementing, or superseding such Section of the Exchange Act.
(j) Executive Director means a member of the Board having responsibility for day-to-day management of the Company.
(k) Fair Market Value means a price that is based on the opening selling price, closing selling price, actual high, low, or average of the actual high and low selling price, or average selling prices (weighted or unweighted based on the volume of trading) of Stock reported on the New York Stock Exchange, or such other established securities market on the applicable date, the trading day immediately preceding the applicable date, the trading day next succeeding the applicable date, or during a specified period before or after the applicable date, all as determined by the Committee in its sole discretion, or such other price as required by applicable law or regulation.
(l) Incentive Stock Option means a Stock Option designed to meet the requirements of Code Section 422.
(m) Joint Venture means a joint venture, corporation or partnership, or comparable entity, in which the Company or a Subsidiary has a material equity interest.
(n) Nonqualified Stock Option means a Stock Option that is not an Incentive Stock Option.
(o) Participant means (i) an employee of the Company, its Subsidiaries or Joint Ventures or (ii) an individual providing services to the Company or its Subsidiaries, including Executive Directors, who, in each case (A) has been selected by the Committee to receive an Award under the Plan and (B) to the extent required by the Committee, has executed an Award Agreement.
(p) Performance Criteria means one or more pre-established objective performance goals established by the Committee in its sole discretion, which may be based on one or more of business criteria, including, but not limited to: trading profit (or operating profit after restructuring); trading cash flow; revenue; revenue growth; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per share; operating income; pre- or after-tax income; net operating profit after taxes; economic value added (or an equivalent metric); ratio of operating earnings to capital spending; cash flow (before or after dividends); cash-flow per share (before or after dividends); net earnings; net sales; sales growth; share price performance; return on assets or net assets; return on shareholder equity; return on capital (including return on total capital or return on invested capital); cash flow return on investment; total shareholder return; cumulative return on net assets employed; improvement in or attainment of expense levels; market share; and improvement in or attainment of working capital levels or other business criteria. Performance Criteria may (i) be based on one or more business criteria that apply to the Participant, the Company as a whole, or any Subsidiary, business unit, division, segment of the Company, or any combination thereof, (ii) include or exclude (or be adjusted to include or exclude) extraordinary items, the impact of charges for restructurings, discontinued operations and other unusual and non-recurring items, and the cumulative effects of tax or accounting changes, each determined based on International Financial Reporting Standards (IFRS), as in effective from time to time, generally accepted accounting principles in the United States of America, as in effect from time to time (GAAP), or on a non-GAAP basis and/or (iii) reflect absolute entity performance or a relative comparison of entity performance to the performance of a peer group, index, or other external measure, in each case as determined by the Committee in its sole discretion.
(q) Performance Period means the period during which the Performance Criteria must be attained, as designated by the Committee in its sole discretion.
(r) Performance Share means an Award providing the Participant with a designated number of shares of Stock subject to the attainment of Performance Criteria within the Performance Period and the satisfaction of such other terms and conditions, as specified by the Committee in the Award Agreement in accordance with Section 10 hereof.
(s) Performance Share Unit means an Award, designated as a unit, providing a Participant with the right to receive a designated number of shares of Stock or cash in an amount determined as a function of a designated number of shares of Stock at a date on or after, and subject to, the attainment of Performance Criteria within the Performance Period and the satisfaction of such other terms and conditions, as specified by the Committee in the Award Agreement in accordance with Section 10 hereof.
(t) Person means any individual, entity or group, including any person within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.
(u) Plan means the CNH Industrial N.V. Equity Incentive Plan, as may be amended from time to time, including any and all component plans and programs established hereunder pursuant to which Awards are granted.
(v) Restricted Stock means an Award providing a Participant with a designated number of shares of Stock subject to the satisfaction of vesting conditions and such other terms and conditions, as specified by the Committee in the Award Agreement in accordance with Section 9 hereof.
(w) Restricted Stock Unit means an Award, designated as a unit, providing a Participant with the right to receive a designated number of shares of Stock or cash in an amount determined as a function of a designated number of shares of Stock at a date on or after, and subject to, the satisfaction of vesting conditions and such other terms and conditions, as specified by the Committee in the Award Agreement in accordance with Section 9 hereof.
(x) SAR means an Award of a stock appreciation right granted to a Participant pursuant to Section 8 hereof.
(y) Stock means a common share of the Company, nominal value EUR 0.01.
(z) Stock Option means an Award providing a Participant with the right to acquire a designated number of shares of Stock at a certain price that is granted pursuant to Section 7 hereof. The term Stock Option includes both Incentive Stock Options and Nonqualified Stock Options.
(aa) Subsidiary or Subsidiaries means any corporation or entity of which the Company owns directly or indirectly, at least 50% of the total voting power or in which it has at least a 50% economic interest, and which is authorized by the Committee to participate in the Plan.
3. Administration. The Plan will be administered by the Committee consisting of two or more directors of the Company as the Board may designate from time to time, each of whom shall satisfy such requirements under applicable law.
The Committee shall have the discretionary authority to select those individuals who are eligible to participate in the Plan, to determine the number, type, and amount of Awards to be granted to Participants, to construe and interpret the Plan and any Awards granted thereunder, to establish and amend rules for Plan administration, to change the terms and conditions of Awards at or after grant (subject to the provisions of Section 18 hereof), to correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award granted under the Plan, and to make all other determinations which it deems necessary or advisable for the administration of the Plan.
The Committee or the Board may authorize one or more officers of the Company to select individuals to participate in the Plan and to determine the number, type, and amount of Awards to be granted to such Participants. Any reference in the Plan to the Committee shall include such authorized officer or officers.
The determinations of the Committee shall be made in accordance with their judgment as to the best interests of the Company and its shareholders and in accordance with the purposes of the Plan. Any determination of the Committee under the Plan may be made without notice or meeting of the Committee, if in a writing signed by all the Committee members, and shall be final and binding on all interested Persons to the maximum extent permitted under applicable law.
4. Participants. Participants may consist of any or all employees of, and individuals providing services to, the Company, its Subsidiaries and Joint Ventures. Designation of a Participant in any year shall not require the Committee to designate that individual to receive an Award in any other year or to receive the same type or amount of Award as granted to the Participant in any other year or as granted to any other Participant in any year. The Committee shall consider all factors that it deems relevant in selecting Participants and in determining the type and amount of their respective Awards.
5. Shares Available under the Plan. Effective as of Amendment Date, the maximum aggregate number of shares of Stock available for grant pursuant to Awards under the Plan is 50,000,000, of which no more than 7,000,000 of shares of Stock are available for Awards made to Executive Directors. The following shares of Stock related to Awards under the Plan may again be available for issuance under the Plan: (a) any shares of Stock covered by an Award which are settled in cash and (b) any shares of Stock related to Stock Option or other Awards that expire, lapse, are forfeited or cancelled or terminate for any other reason without issuance of shares of Stock. Further, any shares of Stock subject to a SAR shall be counted as used only to the extent shares of Stock are actually issued to the Participant upon exercise of the SAR. Any shares of Stock retained by the Company to comply with applicable income tax or social tax withholding requirements or withheld to facilitate payment of the exercise price of a Stock Option, shall be deemed delivered for purposes of the Plan and will not be deemed to be Stock available for Awards under the Plan.
All Stock issued under the Plan may be either authorized and unissued Stock or issued Stock reacquired by the Company (including treasury shares). Stock Options and unissued Stock may only be issued if authorized pursuant to a resolution of the general meeting of shareholders of the Company (or, if authorized to do so by the general meeting of shareholders, by the Board) authorizing such issuance and excluding preference rights for existing shareholders if applicable. The authorization shall not be applicable to the issuing of Stock to Participants who exercise a Stock Option.
The Stock reserved for issuance and the other limitations set forth above shall be subject to adjustment in accordance with Section 13(a) hereof.
6. Types of Awards, Payments, and Limitations. Awards shall consist of Stock Options, SARs, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Share Units, and other Stock-based Awards, all as described below. Payment of Awards may be in the form of cash, Stock, other Awards or combinations thereof as the Committee shall determine, and with the expectation that any Award of Stock shall be styled to preserve such restrictions as it may impose. The Committee need not require the execution of any such agreement by a Participant. Acceptance of the Award by the applicable Participant shall constitute agreement by the Participant to the terms and conditions of the Award.
The Committee may (but need not) provide that any Awards earn dividends or dividend equivalents and interest on such dividends or dividend equivalents. Such dividends or dividend equivalents may be paid currently or may be credited to a Participants Plan account and are subject to the same terms and conditions, including, without limitation, the attainment of Performance Criteria, as the underlying Award. Any crediting of dividends or dividend equivalents may be subject to such terms and conditions as the Committee may establish, including reinvestment in additional Stock or Stock equivalents.
Awards shall be evidenced by an Award Agreement that sets forth the terms, conditions and limitations of such Award. Such terms may include, but are not limited to, the term of the Award, the provisions applicable in the event the Participants employment terminates, and the Companys authority (subject to the provisions of Section 18 hereof) to unilaterally or bilaterally amend, modify, suspend, cancel or rescind any Award, including, without limitation, the ability to amend such Awards to comply with changes in applicable law. An Award may also be subject to other provisions (whether or not applicable to similar Awards granted to other Participants) as the Committee determines appropriate, including provisions intended to comply with applicable securities laws, stock exchange and other regulatory requirements, understandings or conditions as to the Participants employment, requirements or inducements for continued ownership of Stock after exercise or vesting of Awards, or forfeiture of Awards in the event of termination of employment shortly after exercise or vesting, or breach of noncompetition, non-solicitation, confidentiality or other covenants following termination of employment.
The Committee may make retroactive adjustments to and the Participant shall reimburse to the Company any cash or equity based incentive compensation paid to the Participant where such compensation was predicated upon achieving certain financial results that were substantially the subject of an accounting restatement, and as a result of such accounting restatement it is determined that the Participant otherwise would not have been paid such compensation, regardless of whether or not the accounting restatement resulted from the Participants fraud or misconduct. In each such instance, the Company will, to the extent practicable, seek to recover (a) the amount by which the Participants cash or equity based incentive compensation for the relevant period exceeded the lower payment, if any, that would have been made based on the restated financial results, or (b) if in the Committees view the Participant engaged in fraud or misconduct that caused or partially caused the need for the accounting restatement, the total amount of the Participants cash or equity based incentive compensation for the relevant period, plus a reasonable rate of interest. In addition to (and not in derogation of) the foregoing: (y) to the extent required under Section 304 of the Sarbanes-Oxley Act of 2002, as amended, if the Company is required to prepare an accounting restatement due to its material noncompliance, as a result of misconduct, with any financial reporting requirement under applicable securities laws, the
Companys chief executive officer and chief financial officer shall reimburse the Company for (i) any bonus or other incentive-based or equity-based compensation received by that individual from the Company during the 12-month period following the first public issuance or filing with the U.S. Securities and Exchange Commission (whichever first occurs) of the financial document embodying such financial reporting requirement, and (ii) any profits realized from the sale of securities of the Company during that 12-month period, and (z) to the extent required under Section 10D of the Exchange Act, effective on or after July 22, 2010, in the event that the Company is required to prepare an accounting restatement due to its material noncompliance with any financial reporting requirement under applicable securities laws, the Company will recover from any current or former executive officer of the Company who received incentive based compensation (including Stock Options awarded as compensation) during the 3-year period preceding the date on which the Company is required to prepare an accounting restatement, the excess of the amount of such incentive based compensation received based on the erroneous data over what would have been paid to the executive officer under the accounting restatement.
The Committee, in its sole discretion, either at the time of grant or by subsequent amendment, and subject to the provisions of Sections 18 and 23 hereof, may, except in the case of Stock Options and SARs, require or permit a Participant to elect to defer amounts or Stock that otherwise would be paid or delivered to the Participant as a result of the exercise or settlement of an Award under such rules and procedures as the Committee may establish under the Plan, and to have any such deferred amounts or Stock credited to one or more accounts established for the Participant by the Committee on the Companys books of account.
7. Stock Options. Stock Options may be awarded to Participants under such terms and conditions as may be established by the Committee, except that reload options may not be granted under the Plan. The Committee shall determine the number of shares of Stock subject to each Stock Option and whether the Stock Option is an Incentive Stock Option. All of the available Stock under the Plan may, but need not, be issued pursuant to the exercise of Incentive Stock Options; provided, however, notwithstanding a Stock Options designation, to the extent that Incentive Stock Options are exercisable for the first time by the Participant during any calendar year with respect to Stock whose aggregate Fair Market Value exceeds US$100,000, such Stock Options shall be treated as Nonqualified Stock Options. The exercise price for each Stock Option shall be determined by the Committee but shall not be less than the higher of (i) EUR 0.01 or (ii) 100% of the Fair Market Value of the Stock on the date the Stock Option is granted unless the Stock Option is a substitute or assumed Stock Option granted pursuant to Section 14 hereof. Each Stock Option shall expire at such time as the Committee shall determine at the time of grant. Stock Options shall be exercisable at such time and subject to such terms and conditions as the Committee shall determine; provided, however, that no Stock Option shall be exercisable later than the tenth anniversary of its grant. The exercise price, upon exercise of any Stock Option, shall be payable by or on behalf of the applicable Participant to the Company in full by: (a) cash payment or its equivalent; (b) tendering previously acquired Stock purchased on the open market having a Fair Market Value at the time of exercise equal to the exercise price or certification of
ownership of such previously-acquired Stock; (c) to the extent permitted by applicable law, delivery of a properly executed exercise notice, together with irrevocable instructions to a broker to promptly deliver to the Company the amount of sale proceeds from the Stock Option shares or loan proceeds to pay the exercise price and any withholding taxes due to the Company; and (d) such other methods of payment as the Committee, in its sole discretion, deems appropriate. Upon exercise of any Stock Option, the Stock will be issued in the manner as the Company may deem appropriate.
8. Stock Appreciation Rights. SARs may be awarded to Participants under such terms and conditions as may be established by the Committee. Notwithstanding any other provision of the Plan, the Committee may, in its sole discretion, substitute SARs which can be settled only in Stock for outstanding Stock Options. The grant price of a substitute SAR shall be equal to the exercise price of the related Stock Option and the substitute SAR shall have substantive terms (e.g., duration) that are equivalent to the related Stock Option. The grant price of any other SAR shall be equal to the Fair Market Value of the Stock on the date of its grant unless the SARs are substitute or assumed SARs granted pursuant to Section 14 hereof. A SAR may be exercised upon such terms and conditions and for the term the Committee in its sole discretion determines, as specified by the Committee in the Award Agreement; provided, however, that the term shall not exceed the Stock Option term in the case of a substitute SAR or ten years in the case of any other SAR, and the terms and conditions applicable to a substitute SAR shall be substantially the same as those applicable to the Stock Option which it replaces. Upon exercise of a SAR, the Participant shall be entitled to receive payment from the Company in an amount determined by multiplying (a) the excess (if any) of the Fair Market Value of a share of Stock on the date of exercise over the grant price of the SAR by (b) the number of shares of Stock with respect to which the SAR is exercised. The payment may be made in cash or Stock, or any combination thereof, at the discretion of the Committee, except in the case of a substitute SAR payment which may be made only in Stock.
9. Restricted Stock and Restricted Stock Units. Restricted Stock and Restricted Stock Units may be awarded to Participants under such terms and conditions as shall be established by the Committee. Restricted Stock and Restricted Stock Units shall be subject to vesting conditions and such other terms and conditions as the Committee determines, including, without limitation, any of the following:
(a) a prohibition against sale, assignment, transfer, pledge, hypothecation or other encumbrance for a specified period; and
(b) a requirement that the holder forfeit the Restricted Stock or Restricted Stock Units in the event of termination of employment during the period of restriction.
All restrictions shall expire and the Award shall vest at such times as the Committee shall specify.
10. Performance Shares and Performance Share Units. Performance Shares and Performance Share Units may be awarded to Participants under such terms and conditions as shall be established by the Committee. Performance Shares and Performance Share Units shall be subject to the attainment of Performance Criteria during the applicable Performance Period and the satisfaction of such vesting conditions and other terms and conditions established by the Committee.
Notwithstanding the satisfaction of any Performance Criteria, the Performance Criteria for the applicable Performance Period and the number of shares of Stock issued or the amount of cash paid in respect of a Performance Shares Award or Performance Share Units Award may be adjusted by the Committee on the basis of such further consideration as the Committee in its sole discretion shall determine.
11. Other Stock-Based Awards. In addition to the incentives described in Sections 6 through 10 hereof, the Committee may grant other Stock-based incentives payable in cash, Stock, or any combination thereof, under the Plan as it determines to be in the best interests of the Company and subject to such other terms and conditions as it deems appropriate, as specified by the Committee in the applicable Award Agreement.
12. Change of Control.
(a) Unless otherwise provided in the Award Agreement, or otherwise determined by the Committee, unless Awards are not assumed, converted or replaced in connection with a transaction that constitutes a Change of Control (in which case such Awards shall vest immediately prior to the Change of Control and all Performance Criteria, to the extent applicable, shall be deemed achieved at target levels and all other terms and conditions met on Performance Shares and Performance Share Units), notwithstanding any other provision of the Plan to the contrary, in the event that the employment of the Participant is involuntarily terminated by the Company, or the applicable Subsidiary or Joint Venture, (or the applicable successor to such entity) other than for Cause within a twenty-four (24) month period following the effective date of a Change of Control (a Termination Event):
(i) any Stock Options and SARs outstanding which are not then exercisable and vested shall become fully exercisable and vested;
(ii) subject to Section 12(a)(vi), all restrictions shall lapse and all other terms and conditions shall be deemed met on Restricted Stock and Performance Shares and such Awards shall be become fully vested and transferable;
(iii) subject to Section 12(a)(vi), all Restricted Stock Units and Performance Share Units shall be considered to be earned and vested and payable in full, and such Awards shall be settled in cash or shares, or in any combination thereof, as determined by the Committee in its discretion, as promptly as practicable (but in no event later than 60 days following the Termination Event);
(iv) all other Awards shall be paid out in cash or shares, or in any combination thereof, as determined by the Committee in its discretion, as promptly as practicable (but in no event later than 60 days following the Termination Event);
(v) subject to the terms of the Plan, the Committee may also make additional adjustments and/or settlements of outstanding Awards as it deems appropriate and consistent with the Plans purposes and applicable law; and
(vi) all Performance Criteria shall be deemed achieved at target levels and all other terms and conditions met on Performance Shares and Performance Share Units.
(b) In the event of a Change of Control, the Committee may in its discretion and upon at least ten (10) days advance notice to the affected Participants, cancel any outstanding Awards and pay to the holders thereof, in cash or shares, or any combination thereof, the value of such Awards based upon the price per share received or to be received by other shareholders of the Company in the event.
(c) Notwithstanding the foregoing, if any Award is subject to Section 409A of the Code, this Section 12 shall be applicable only to the extent specifically provided in the Award Agreement and in accordance with Section 409A of the Code.
(d) To the extent the effect of a Change of Control on any Award granted under the Plan is not otherwise addressed in this Section 12 or the applicable Award Agreement, the Committee may, in its sole discretion, as to any such Award, take any one or more of the following actions: (i) provide for the acceleration of any time periods relating to the vesting, exercise or realization of any such Award so that such Award may be exercised or realized in full on or before a date fixed by the Committee; (ii) provide for the purchase of any such Award; (iii) make such adjustment to any such Award then outstanding as the Committee deems appropriate to reflect such Change of Control; (iv) cause any such Award then outstanding to be assumed, or new rights substituted therefor, by the successor company (or a subsidiary or affiliate of such successor company, as applicable) after such Change of Control; or (v) take any other action with respect to such Award as the Committee may determine is appropriate, in its sole discretion.
For purposes of the Plan, the term Change of Control shall mean:
(I) the acquisition by any individual, entity or group, including any Person, of beneficial ownership (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of more than 50% of the combined voting power of the then outstanding capital stock of the Company that by its terms may be voted on all matters submitted to shareholders of the Company generally (Voting Stock); provided, however, that the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company (excluding any acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable securities unless such outstanding convertible or exchangeable securities were acquired
directly from the Company); (ii) any acquisition by the Company; (iii) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company; or (iv) any acquisition by any entity pursuant to a reorganization, merger or consolidation involving the Company, if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (i) and (ii) of subsection (II) below shall be satisfied; and provided further that, for purposes of clause (ii) above, if (A) any Person (other than the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company) shall become the beneficial owner of more than 50% of the Voting Stock by reason of an acquisition of Voting Stock by the Company, and (B) such Person shall, after such acquisition by the Company, become the beneficial owner of any additional shares of the Voting Stock and such beneficial ownership is publicly announced, then such additional beneficial ownership shall constitute a Change of Control; or
(II) the consummation of a reorganization, merger or consolidation of the Company, or the sale, lease, exchange or other transfer of all or at least 50% of the total gross fair market value of all of the assets of the Company (with the total gross fair market value of the total assets of the Company and the assets of the Company being sold, leased, exchanged, or transferred each determined without regard to any liabilities associated with such assets), excluding, however, any such reorganization, merger, consolidation, sale, lease, exchange or other transfer with respect to which, immediately after consummation of such transaction: (i) all or substantially all of the beneficial owners of the Voting Stock of the Company outstanding immediately prior to such transaction continue to beneficially own, directly or indirectly (either by remaining outstanding or by being converted into voting securities of the entity resulting from such transaction), more than 50% of the combined voting power of the voting securities of the entity resulting from such transaction (including, without limitation, the Company or an entity which as a result of such transaction owns the Company or all or at least 50% of the total gross fair market value of all of the assets of the Company (as described in herein), directly or indirectly) (the Resulting Entity) outstanding immediately after such transaction, in substantially the same proportions relative to each other as their ownership immediately prior to such transaction; and (ii) no Person (other than any Person that beneficially owned, immediately prior to such reorganization, merger, consolidation, sale or other disposition, directly or indirectly, Voting Stock representing more than 50% of the combined voting power of the Companys then outstanding Voting Stock) beneficially owns, directly or indirectly, more than 50% of the combined voting power of the then outstanding capital stock of the Resulting Entity; or
(III) upon the approval of a plan of complete liquidation or dissolution of the Company.
13. Adjustment Provisions.
(a) In the event of any change affecting the number, class, market price or terms of the Stock by reason of share dividend, share split, recapitalization, reorganization, merger, consolidation, spin-off, disaffiliation of a Subsidiary, combination of Stock, exchange of Stock, Stock rights offering, or other similar event, or any distribution to the holders of Stock other than a regular cash dividend, the Committee shall equitably substitute or adjust the number or class of Stock which may be issued under the Plan in the aggregate or to any one Participant in any calendar year and the number, class, price or terms of shares of Stock subject to outstanding Awards.
(b) In the event of any merger, consolidation or reorganization of the Company with or into another corporation which results in the outstanding Stock of the Company being converted into or exchanged for different securities, cash or other property, or any combination thereof, there shall be substituted, on an equitable basis, for each share of Stock then subject to an Award, the number and kind of shares of stock, other securities, cash or other property to which holders of Stock will be entitled pursuant to the transaction.
14. Substitution and Assumption of Awards. The Board or the Committee may authorize the issuance of Awards in connection with the assumption of, or substitution for, outstanding equity awards previously granted to individuals who become employees of the Company or any Subsidiary as a result of any merger, consolidation, acquisition of property or stock, or reorganization, upon such terms and conditions as the Committee may deem appropriate.
15. Nontransferability. Awards shall not be transferable other than by will or the laws of descent and distribution, and each Stock Option and SAR shall be exercisable during the Participants lifetime only by the Participant or, in the event of disability, by the Participants personal representative. In the event of the death of a Participant, exercise of any Award or payment with respect to any Award shall be made only to the executor or administrator of the estate of the deceased Participant or to the Person or Persons to whom the deceased Participants rights under the Award shall pass by will or the laws of descent and distribution. Subject to the approval of the Committee in its sole discretion, Stock Options may be transferable to charity or to members of the immediate family of the Participant and to one or more trusts for the benefit of such family members, partnerships in which such family members are the only partners, or corporations in which such family members are the only shareholders. Members of the immediate family means the Participants spouse, children, stepchildren, grandchildren, parents, grandparents, siblings (including half brothers and sisters), and individuals who are family members by adoption.
16. Taxes. The Company, Subsidiary and/or Joint Venture shall be entitled to deduct and withhold from the wages, salary, bonus and other income paid by the Company, or Joint Venture Subsidiary to the Participant or require a Participant to remit the amount of any federal, state and cantonal, local and social or payroll tax, including social security contributions, attributable to any amounts payable or Stock deliverable under the Plan., The Company may defer making payment or delivery as to any Award, if any such tax is payable, until indemnified to its satisfaction, and the Company shall have no liability to any Participant for exercising the foregoing right. The Committee may, in its sole discretion and subject to such rules as it may adopt, permit or require a Participant to pay all of or a portion of the federal, state and cantonal, local and social or payroll tax arising in connection with the grant, vesting, settlement, or exercise of any Award; by (i) having the Company withhold shares of Stock, (ii) tendering shares of Stock received in connection with such Award back to the Company or (iii) delivering other previously acquired shares of Stock having a Fair Market Value equal to the amount required to be withheld.
17. Duration of the Plan. No Award shall be made under the Plan more than ten years after April 16, 2020; provided, however, that the terms and conditions applicable to any Award granted on or before such date may thereafter be amended or modified by mutual agreement between the Company and the Participant, or such other Person as may then have an interest therein.
18. Amendment and Termination. The Board or the Committee may amend the Plan from time to time or terminate the Plan at any time. However, unless expressly provided in an Award Agreement or the Plan, no such action shall reduce the amount of any existing Award or change the terms and conditions thereof without the Participants consent; provided, however, that the Committee may, in its discretion, substitute SARs which can be settled only in Stock for outstanding Stock Options in accordance with Section 8 hereof, and may require an Award be deferred pursuant to Section 6 hereof, without a Participants consent; and further provided that the Committee may amend or terminate an Award to comply with changes in applicable law without a Participants consent.
The Company shall obtain shareholder approval of any Plan amendment to the extent necessary to comply with applicable laws, regulations, or stock exchange rules.
19. Other Provisions.
(a) The Committee may grant Awards to employees or other service providers of the Company, its Subsidiaries and Joint Ventures who reside or performs services outside the United States. Notwithstanding anything in the Plan to the contrary, the Committee may, in its sole discretion: (a) amend or vary the terms of the Awards in order to conform such terms with the requirements of each jurisdiction where a Subsidiary or Joint Venture is located; (b) amend or vary the terms of the Plan in each jurisdiction where a Subsidiary is located as it considers necessary or desirable to take into account or to mitigate or reduce the burden of taxation and social security contributions for Participants and/or the Subsidiary or Joint Venture; or (c) amend or vary the terms of the Plan in a jurisdiction where the Subsidiary or Joint Venture is located as it considers necessary or desirable to meet the goals and objectives of the Plan. The Committee may where it deems appropriate in its sole discretion, establish one or more sub-plans for these purposes, and establish administrative rules and procedures to facilitate the operation of the Plan in such jurisdictions.
(b) Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing the Participants employment or service with the Company or any of its Subsidiaries or Joint Ventures; nor interfere in any way with the Participants right or the Companys or a Subsidiarys right to terminate such relationship at any time, with or without cause, to the extent permitted by applicable laws and any enforceable agreement between the Participant and the Company or a Subsidiary, as applicable.
(c) No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award, and the Committee, in its discretion, shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares of Stock, or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.
(d) In the event any provision of the Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if such illegal or invalid provisions had never been contained in the Plan.
(e) Notwithstanding any provision to the contrary, the Company shall have no liability to deliver any Award or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the United States Securities Act of 1933, as amended, and the Exchange Act, the Italy Consolidated Financial Act (Testo Unico delle Disposizioni in materia di intermediazione finanziaria), and the Netherlands Financial Supervision Act (Wet op het financieel toezicht) and rules promulgated thereunder) and the shares of Stock in respect of such Award are authorized for listing on the New York Stock Exchange or Mercato Telematico Azionario (organized and managed by Borsa Italiana S.p.A.).
(f) Except as otherwise provided in any Award Agreement or as expressly set forth herein, a Participant shall have no rights as a shareholder of the Company until he or she becomes the holder of record of the shares of Stock.
(g) Payments and other benefits received by a Participant under an Award shall not be deemed a part of a Participants compensation for purposes of determining the Participants benefits under any other employee benefit plans or arrangements provided by the Company or a Subsidiary, unless the Committee expressly provides otherwise in writing or unless expressly provided under such other plan or arrangement.
20. Governing Law. Subject to Section 19(a) hereof, the Plan and any actions taken in connection herewith shall be governed by and construed in accordance with applicable federal law of the United States of America and, to the extent not pre-empted thereby or inconsistent therewith, the laws of the State of Delaware, United States of America, without regard to any jurisdictions conflict of laws principles. BY ACCEPTING ANY AWARD UNDER THE PLAN, THE PARTICIPANT EXPRESSLY AND IRREVOCABLY AGREES TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED IN WILMINGTON, DELAWARE, UNITED STATES OF AMERICA IN RESPECT OF ANY MATTER RELATING THE PLAN THAT IS NOT OTHERWISE ARBITRATED OR RESOLVED IN ACCORDANCE WITH SECTION 21 HEREOF, INCLUDING, WITHOUT LIMITATION, ANY ACTION OR PROCEEDING TO COMPEL ARBITRATION OR TO ENFORCE AN ARBITRATION AWARD.
21. Arbitration. Any and every dispute or difference arising under, or in relation to the Plan, including any dispute or difference as to the validity, meaning or effect hereof, shall be finally settled by arbitration in Wilmington, Delaware, United States of America under the Rules of the United States Federal Arbitration Act. The arbitration award shall be final and binding and shall deal with the question of the costs of arbitration and all matters relating thereto. The arbitrator is not empowered to award damages in excess of reasonable actual damages. The dispute shall be resolved by a single arbitrator appointed by the American Arbitration Association.
22. Unfunded Plan. Unless otherwise determined by the Committee, the Plan shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The Plan shall not establish a fiduciary relationship between the Company and any Participant or other Person. To the extent any Person holds any rights by virtue of an Award under the Plan, such right (unless otherwise determined by the Committee) shall be not greater than the right of an unsecured general creditor of the Company.
23. Code Section 409A. Awards generally are intended to be exempt from Code Section 409A; provided, however, notwithstanding any contrary provision of the Plan or any agreement or notice governing any Award, the following provisions shall apply if and to the extent any payment made pursuant to an Award is subject to (and not exempt from) Code Section 409A:
(a) Such payment shall comply with Code Section 409A and, accordingly, to the maximum extent permitted, the Plan shall be interpreted, and such payment shall be made under such other conditions determined by the Committee that cause such payment, to be in compliance with Code Section 409A.
(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of the Plan or an Award providing for the payment of any amounts upon or following a Participants termination date unless such termination is also a separation from service within the meaning of Code Section 409A, applying the default rules thereof.
(c) With respect to any payment that is otherwise payable upon a Participants separation from service, in the event the Participant is a specified employee (as defined in Code Section 409A), any such payment that would otherwise have been payable in the first six months following the Participants separation from service date will not be paid to the Participant until the date that is six months and one day following the Participants separation from service date (or, if earlier, the Participants date of death), with any such deferred payments being paid in a lump sum; provided that, thereafter, the remainder of any such payments shall be payable in accordance with the terms of the Plan or the Award Agreement, as the case may be.
(d) Whenever a payment under the Plan or an Award Agreement specifies a period within which such payment may be made, the actual date of payment within the specified period shall be within the sole discretion of the Committee.
(e) In no event shall any payment under the Plan that constitutes deferred compensation for purposes of Code Section 409A be offset by any other payment pursuant to the Plan or otherwise.
(f) To the extent required under Code Section 409A, (i) any reference herein to the term Plan shall mean this Plan and any other plan, agreement, method, program, or other arrangement, with which this Plan is required to be aggregated under Code Section 409A, and (ii) any reference herein to the term Company shall mean the Company and all Persons with whom the Company would be considered a single employer under Code Section 414(b) or 414(c).
In such case, if the Plan or the terms of an Award Agreement fail to meet the requirements of Code Section 409A with respect to such Award, then such Award shall remain in effect and be subject to taxation in accordance with Code Section 409A and the Committee may accelerate distribution or settlement of an Award in accordance with Code Section 409A. The Company and its Subsidiaries shall have no liability for any tax imposed on a Participant under Code Section 409A, and if any tax is imposed on a Participant, the Participant shall have no recourse against the Company, its Subsidiaries and Joint Ventures for payment of any such tax. Notwithstanding the foregoing, if any modification of an Award causes the Award to be deferred compensation under Code Section 409A, the Committee may rescind such modification in accordance with Code Section 409A.
Notwithstanding any provisions of this Plan, the Company, its Subsidiaries and Joint Ventures do not guarantee to any Participant or any other Person with an interest in an Award that any Award intended to be exempt from Code Section 409A shall be so exempt, nor that any Award intended to comply with Code Section 409A or Code Section 422 shall so comply.
24. Successors and Assigns. The Plan shall be binding on the Company and all Participants and their respective heirs, executors, agents, trustees, administrators, successors and assigns.
25. Gender, Singular, Plural, Captions. Where the context of the Plan permits, words in the masculine gender shall include the feminine gender, the plural form of a word shall include the singular form, and the singular form of a word shall include the plural form. In addition, the captions of the Sections of the Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.
26. Effective Date and Applicability. This Plan became effective as of February 27, 2014, as adopted by the Board by written resolution, and the provisions contained herein shall apply with respect to any and all Awards granted on or after such date.
CNH Industrial N.V.
25 St. Jamess Street
London, SW1A 1HA
1077 XZ Amsterdam
T+31 20 485 7000
F+31 20 485 7001
DOC ID AMSN423615/6+
3 JUNE 2020
1. We have acted as Netherlands law special counsel to CNH Industrial N.V. (DutchCo), with respect to certain matters of Netherlands law in connection with, inter alia, the registration statement (the Registration Statement) on Form S-8 to be filed with the United States Securities and Exchange Commission (SEC) under the United States of Americas Securities Act of 1933, as amended (the Securities Act) with respect to 50,000,000 common shares with a nominal value of EUR 0.01 each in the share capital of DutchCo to be issued pursuant to the CNH Industrial N.V. Equity Incentive Plan, as amended (the Equity Plan) and the common shares delivered pursuant to the Equity Plan, the Plan Shares).
Words and expressions defined in paragraph 2 below shall, unless the context otherwise requires, bear the same respective meaning when used in this opinion.
This opinion letter is delivered to you pursuant to your request.
2. In rendering the opinion set out below we have examined the following documents:
an electronic copy of the draft of the Registration Statement of 3 June 2020 excluding any documents incorporated by reference in it and any exhibits to it, other than specifically listed below;
Freshfields Bruckhaus Deringer LLP is a limited liability partnership registered in England and Wales with registered number OC334789. It is authorised and regulated by the Solicitors Regulation Authority. Dutch Chambers of Commerce registration number 34368197. For regulatory information please refer to www.freshfields.com/support/legalnotice.
A list of the members (and of the non-members who are designated as partners) of Freshfields Bruckhaus Deringer LLP is available for inspection at its registered office, 65 Fleet Street, London EC4Y 1HS or at the above address. Any reference to a partner means a member, or a consultant or employee with equivalent standing and qualifications, of Freshfields Bruckhaus Deringer LLP or any of its affiliated firms or entities. Freshfields Bruckhaus Deringer LLPs Amsterdam office includes attorneys, civil law notaries, tax advisers and solicitors.
Stg Beh Derdengld Freshfields Bruckhaus Deringer LLP, ABN AMRO Bank N.V., IBAN: NL14ABNA0256049947, BIC: ABNANL2A
an electronic copy of the CNH Industrial N.V. Equity Incentive Plan as originally approved by the board of directors of DutchCo (the Board) on 27 February 2014 and ratified and approved by the general meeting of shareholders of the Company on 16 April 2014 and amended and partially restated by the Board on 3 March 2020 (the Plan Documentation);
an electronic copy of the articles of association of DutchCo as they read as of 29 September 2013, which, according to the Extract (as defined below), are DutchCos articles of association currently in force and effect (the Articles of Association);
electronic copies of:
minutes of the meeting of the Board regarding the adoption of the CNH Industrial N.V. Equity Incentive Plan on 27 February 2014 and signed by Mr. S. Marchionne as chairman of that meeting and Mr. R. Russo as secretary of that meeting;
the notarial deed of record by Dirk-Jan Jeroen Smit, civil law notary officiating in Amsterdam, the Netherlands, and dated 16 October 2014 of the proceedings of the general meeting of DutchCo held on 16 April 2014;
the notarial deed of record by Dirk-Jan Jeroen Smit, civil law notary officiating in Amsterdam, the Netherlands, and dated 12 October 2018 of the proceedings of the general meeting of DutchCo held on 13 April 2018;
unanimous written resolutions of the Board regarding the approval of the agenda and explanatory notes for the annual general meeting of shareholders held on 16 April 2020, dated 3 March 2020;
a statement in relation to the approval by the general meeting of DutchCo, held on 16 April 2020, of the proposal to award (rights to subscribe for) common shares in the capital of the DutchCo to executive directors on the Board in accordance with the terms of the Plan Documentation, signed by Dirk-Jan Jeroen Smit, civil law notary aforementioned as chairman of that meeting on 3 June 2020; and
unanimous written resolutions of the Board regarding the adoption of the updates and amendments to the CNH Industrial N.V. Equity Incentive Plan, dated 1 June 2020;
a print-out of an electronic copy of an extract from the Commercial Register of the Amsterdam Chamber of Commerce (the Commercial Register) dated 3 June 2020 relating to DutchCo, and confirmed upon our request by the Commercial Register by telephone to be correct as at the date hereof (the Extract); and
a print-out of an electronic online confirmation from the insolvency register from the district court of Amsterdam through www.rechtspraak.nl, the online EU Insolvency register and the online EU Insolvency Register dated 3 June 2020 that DutchCo has not been declared bankrupt (failliet verklaard) nor been granted a suspension of payments (surseance van betaling) and confirmed upon our request by the court registries of the district courts of Amsterdam and The Hague by telephone to be correct as at the date hereof.
the documents referred to above in items (a) to (f) (inclusive) are herein referred to as the Documents; the documents referred to above in item (d) are hereinafter referred to as the Resolutions, the documents referred to above in items (c) and (d) (inclusive) are herein referred to as the Corporate Documents.
NATURE OF OPINION AND OBSERVATIONS
3. This letter is subject to the following nature of opinion and observations:
Dutch Law: this opinion is confined to the laws with general applicability (wettelijke regels met algemene gelding) of the Netherlands and, insofar as they are directly applicable in the Netherlands, the European Union, all as they stand as at the date hereof and as such laws are currently interpreted in published authoritative case law of the courts of the Netherlands (Dutch law); accordingly, we express no opinion with regard to any other system of law (including the law of jurisdictions other than the Netherlands in which our firm has an office), even in cases where, in accordance with Dutch law, any foreign law should be applied; furthermore, we do not express any opinion on public international law or on the rules of or promulgated under any treaty or by any treaty organisation (except as otherwise stated above).
Tax: we express no opinion on any taxation laws of any jurisdiction (including the Netherlands).
Anti-trust: we have not considered whether the transactions contemplated by the Plan Documentation comply with anti-trust, competition, public procurement or state aid laws, nor whether any filings or clearances are required under such laws.
Data Protection: we express no opinion on any data protection or insider trading laws of any jurisdiction (including the Netherlands).
Changes in Law: we express no opinion that the future or continued performance of a partys obligations or the consummation of the transactions contemplated by the Plan Documentation will not contravene Netherlands law, its application or interpretation if altered in the future;
Territory of the Netherlands: all references in this opinion letter and its schedules to the Netherlands and Dutch law are to the European part of the Netherlands and its law, respectively, only;
Factual Statements: we have not been responsible for investigating or verifying the accuracy of the facts (or statements of foreign law) or the reasonableness of any statements of opinion or intention contained in any documents, or for verifying that no material facts or provisions have been omitted therefrom; nor have we verified the accuracy of any assumption made in this opinion letter;
Representations: we express no opinion as to the correctness of any representation given by any of the parties (express or implied) under or by virtue of the Documents, save if and insofar as the matters represented are the subject matter of a specific opinion herein.
Nature of Investigations: in rendering this opinion we have exclusively examined the Documents and we have conducted such investigations of Netherlands law as we have deemed necessary or advisable for the purpose of giving this opinion letter; as to matters of fact we have relied on the Documents and any other document we have deemed relevant, and on statements or certificates of public officials.
Legal Concepts: Dutch legal concepts are expressed in English terms and not in their original Dutch terms; the concepts concerned may not be identical to the concepts described by the same English terms as they exist in the laws of other jurisdictions; and
Date of Opinion: this opinion speaks as of the date hereof; no obligation is assumed to update this opinion or to inform any person of any changes of law or other matters coming to our knowledge and occurring after the date hereof, which may affect this opinion in any respect.
4. On the basis of, and subject to, the foregoing, the assumptions in Schedule 1, the qualifications in Schedule 2 and any factual matters, documents or events not disclosed to us, we are of the opinion that: when issued pursuant to a validly executed deed of issue and fully paid in accordance with the terms of the Plan Documentation and the Articles of Association, each Plan Share will have been duly authorised, validly issued, fully paid and will be non-assessable.
BENEFIT OF OPINION
5. This opinion is addressed to you in relation to and as an exhibit to the Registration Statement and, except with our prior written consent, is not to be transmitted or disclosed to any other person, other than as an exhibit to the Registration Statement and is not to be used or relied upon by you or by any other person for any purpose other than in connection with the filing of the Registration Statement.
6. This opinion letter and any non-contractual obligations arising out of or in relation to this opinion are governed by the laws of the Netherlands.
7. We hereby consent to the filing of this legal opinion letter as an exhibit to the Registration Statement. In giving the consent set out in the previous sentence, we do not thereby admit or imply that we are in the category of persons whose consent is required under Section 7 of the Securities Act or any rules and regulations of the United States Securities and Exchange Commission (SEC) promulgated thereunder.
/s/ Freshfields Bruckhaus Deringer LLP
In rendering the opinion in this opinion letter we have assumed that:
Authenticity and Copies: all documents reviewed by us and submitted to us as originals are true, complete and authentic; all documents reviewed by us and submitted to us as electronic copy, facsimile or photocopy are in conformity with the originals and such originals are true, complete and authentic; and the signatures on all such documents are genuine;
Registration Statement: the Registration Statement has been or will have been filed with the SEC and declared effective pursuant to the Securities Act;
Corporate Documents: at the time when any Corporate Document was signed, each person who is a party to or signatory of that Corporate Document, as applicable (i) had been validly incorporated, was validly existing and, to the extent relevant in such partys jurisdiction, in good standing under the laws applicable to such party, (ii) had all requisite power, authority and legal capacity to sign that Corporate Document and to perform all juridical acts (rechtshandelingen) and other actions contemplated thereby and (iii) has validly signed that Corporate Document;
Extract: the information set forth in the Extract is accurate and complete;
Signing of Resolutions: the Resolutions have been adopted and executed as applicable by persons who had all required power, authority and legal capacity to adopt and execute such Resolutions;
Resolutions: the Resolutions have not been revoked (ingetrokken) or amended and have not been and will not be declared null and void by a competent court, have not been, and will not be, amended, revoked (ingetrokken), terminated or declared null and void by a competent court and the statements and confirmations set out in the Resolutions are true and correct;
Authorised Share Capital: at any time during the entire period during which the Plan Shares are to be issued pursuant to the Plan Documentation: (i) the authorised share capital of DutchCo will allow for the issuance of the relevant number of Plan Shares and (ii) the Board will remain to hold the exclusive power to issue the Plan Shares;
No Director Disqualification: none of the members of the board of directors of the Company or the supervisory board of the Company is subject to a civil law director disqualification (civielrechtelijk bestuursverbod) imposed by a court under articles 106a to 106e of the Dutch Bankruptcy Act (Faillissementswet) (as amended by the Directors disqualification act (Wet civielrechtelijk bestuursverbod));
Other Parties Corporate Capacity/Approval: each of the parties to any of the Plan Documentation and any agreement and document entered into pursuant to the Plan Documentation (other than DutchCo) (i) has been validly incorporated, will be validly existing and, to the extent relevant in such partys jurisdiction, in good standing under the laws applicable to such party, (ii) will have the power, capacity and authority to enter into, execute and deliver the Plan Documentation and any agreement and document entered into pursuant to the Plan Documentation to which it is a party and to exercise its rights and perform its obligations thereunder, and, to the extent relevant, deliver Plan Documentation and any agreement and document entered into pursuant to the Plan Documentation to which it is a party.
Validity under other Laws: under the laws to which the Plan Documentation are expressed to be subject and under any applicable law (other than Netherlands law), (i) DutchCo has validly executed and, to the extent relevant, delivered, the Plan Documentation, (ii) and each of the Plan Documentation constitutes the legal, valid and binding obligations of DutchCo, enforceable against DutchCo in accordance with its terms;
Our opinion is subject to the following qualifications:
Insolvency Register: a confirmation derived from an insolvency register does not provide conclusive evidence that an entity is not subject to any insolvency proceedings as defined in the Council Regulation (EC) no. 1346/2000 of 29 May 2000 on Insolvency Procedures or otherwise;
Creditor Action: the validity or enforceability of the Plan Documentation or any legal act (rechtshandeling) forming part thereof or contemplated thereby are subject to and limited by the protection afforded by Netherlands law to creditors whose interests have been adversely affected pursuant to the rules of Netherlands law relating to (x) unlawful acts (onrechtmatige daden) based on Section 6:162 et seq. of the Netherlands Civil Code (Burgerlijk Wetboek) and (y) fraudulent conveyance or preference (actio pauliana) within the meaning of Section 3:45 of the Netherlands Civil Code (Burgerlijk Wetboek) and/or Section 42 et seq. of the Netherlands Bankruptcy Act (Faillissementswet);
Enforceable: the term enforceability as used in this opinion letter indicates that the relevant obligations are of a type for which Netherlands law generally provides a remedy; it does not imply that the obligations and remedies provided in the Plan Documentation would always be enforceable in accordance with their specific terms; enforcement in the courts of the Netherlands will in any event be subject to the acceptance by such courts of jurisdiction, the availability of defences and the nature of the remedies available in the Netherlands courts;
Limitations under Netherlands law: the validity and enforceability of the obligations under the Plan Documentation are subject to applicable prescription or limitation periods, principles of set-off (unless such right is validly waived), force majeure (overmacht), reasonableness and fairness (redelijkheid en billijkheid), unforeseen circumstances (onvoorziene omstandigheden) and other defences afforded by Netherlands law to obligors generally; furthermore, under Netherlands law, a party to an agreement may under certain circumstances suspend performance of its obligations under such agreement pursuant to the exceptio non-adimpleti contractus or otherwise;
Ordre Public: with respect to the obligations under the Plan Documentation, the competent court in the Netherlands (i) may give effect to overriding mandatory provisions of the law of any other country with which the Plan Documentation have a close connection if and insofar as, under the law of the latter country, those rules must be applied whatever the law applicable to the Plan Documentation and (ii) shall have regard to the law of the country in which the performance takes place in relation to the manner of performance and the steps to be taken in the event of defective performance and (iii) may refuse the application of a provision of the law of any country otherwise applicable to the Plan Documentation, if such application is manifestly incompatible with public policy (ordre public) of the Netherlands;
Foreign Documents: the opinion and other statements expressed herein relating to the Plan Documentation are subject to the qualification that as Dutch lawyers we are not qualified or able to assess the true meaning and purport under applicable law (other than Netherlands law) of the terms of the Plan Documentation and the obligations thereunder of the parties thereto, and we have made no investigation of such meaning and purport; our review of the Plan Documentation and any other documents subject or expressed to be subject to any law other than Netherlands law has therefore been limited to the terms of such documents as they appear to us on the basis of such review and only in respect of any involvement of Netherlands law;
Non-assessable: in absence of an equivalent Dutch legal term for the term non-assessable as used in this opinion letter and for the purposes of this opinion letter non-assessable means that no holder of Plan Shares can be required to pay any amount in addition to the amount required for such share to be fully paid as provided for by Section 2:81 of the Netherlands Civil Code; and
Commercial Register: an extract from the Commercial Register does not provide conclusive evidence that the facts set out in it are correct; however, under the 2007 Trade Register Act (Handelsregisterwet 2007), subject to limited exceptions, a legal entity cannot invoke the incorrectness or incompleteness of its Commercial Register information against third parties who were unaware of the incorrectness or incompleteness; and
Sanctions Act 1977: the Sanctions Act 1977 (Sanctiewet 1977) and regulations promulgated thereunder, or international sanctions, may limit the enforceability of the Plan Documentation.
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the CNH Industrial N.V. Equity Incentive Plan of CNH Industrial N.V. of our reports dated March 3, 2020, with respect to the consolidated financial statements of CNH Industrial N.V., and the effectiveness of internal control over financial reporting of CNH Industrial N.V., included in its Annual Report (Form 20-F) for the year ended December 31, 2019, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
June 3, 2020