Notice convening the shareholders' meeting

03/10/2006 - 08:00 AM

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TELECOM ITALIA S.p.A.
Registered Office in Milan, at 2 Piazza degli Affari
Corporate Headquarters in Rome, at 41 Corso d’Italia
Fully paid-up share capital €10,668, 131,549.35
Tax/VAT and Milan Company Register number: 00488410010

NOTICE CONVENING THE SHAREHOLDERS’ MEETING

Holders of Telecom Italia ordinary shares are called to an ordinary shareholders’ meeting on 12 April 2006 at 15.00 p.m. at 2 Piazza degli Affari, Milan and, if necessary, on the second call on 13 April 2006 at 11.00 a.m. at 3 Viale Toscana, Rozzano (Milan) to discuss and vote on the following

Agenda

  • Financial statements for the year ended 31 December 2005 – related and consequent resolutions
  • Appointment of the Board of Auditors:
  • determination of the number of members of the Board
  • appointment of members and alternates
  • appointment of the Chairman
  • determination of the members’ compensation
  • Decisions consequent on the resignations of two directors
  • Authorization to purchase and dispose of treasury shares
  • Change to the audit engagement for the last fiscal year of the period 2004-06

In view of the composition of the Company’s shareholders, the quorum will presumably be reached and the meeting duly constituted only on the second call on 13 April 2006 at 11.00 a.m. at 3 Viale Toscana, Rozzano (Milan).
Pursuant to Article 126-bis of Legislative Decree 58/1998, share­holders who, separately or jointly, represent at least one fortieth of the voting share capital may request, within five days of the publication of this notice, additions to the agenda, specifying in the request the additional items they propose. Additions to the agenda may not be made, however, for matters on which the shareholders’ meeting is required by law to resolve on proposals put forward by the directors or on the basis of a plan or report the latter have prepared.
In the event of any such additions, the amended agenda will be published in the same way as this notice.

Entitlement to attend

Pursuant to Article 19 of the Company’s bylaws, shareholders for whom the Company has received the notification specified in the second paragraph of Article 2370 of the Italian Civil Code at least two days before the date set for each shareholders’ meeting are entitled to attend the meeting.
The Company does not require shareholders to block their shares to be eligible to attend a meeting, instead they must deposit them, i.e. give the intermediary that keeps the relevant accounts instructions to make the necessary notifications to the Company at least two days before the date of the meeting. This does not prevent the subsequent withdrawal of the shares; however, if they are withdrawn, the earlier deposit ceases to be effective for the purpose of entitlement to attend the meeting.
Any requests for advance notice to perform the relevant formalities in good time or unavailability of shares to be deposited as a consequence of intermediaries’ market practices may not be imputed in any way to the Company.
Shareholders are invited to arrive before the scheduled start of the Meeting in order to facilitate the registration formalities. It is also important that they bring a copy of the notification that the custodian is required to send in accordance with Article 34-bis of Consob Regulation 11768/1998, as amended.
The registration of participants will begin at 9.30 a.m.

Pursuant to Article 19 of the Company’s bylaws, the right to vote can also be exercised by mail in accordance with applicable law. The documentation for voting by mail will be available from 20 March 2006 at the Company’s registered office, where it can also be requested through authorized custodians. The envelope containing the ballot, a copy of the notification sent by the custodian and, where appropriate, documentation proving that the person signing the ballot is authorized to do so should be sent to the following address:

TELECOM ITALIA S.p.A.
Corporate Affairs
Piazza degli Affari n. 2
20123 MILAN - ITALY
not later than forty-eight hours before the Meeting.

Shareholders are reminded that voting by mail is incompatible with giving proxies and must be exercised directly by the holder of the right to vote.
The owners of ADRs listed on the New York Stock Exchange and representing ordinary shares of Telecom Italia, must contact JP Morgan Chase Bank, the issuer of the above-mentioned ADRs (address of customer service: PO Box 3408, South Hackensack, NJ 07606; telephone number: +1 201 680 6630 for calls from outside the United States; 1 800 990 1135 for calls from within the United States).

Matters on the agenda
Financial statements for the year ended 31 December 2005 – related and consequent resolutions
Telecom Italia’s draft financial statements show net income for the year of €3,884,820,803.95, which allows an improvement on last year’s dividend policy.
Shareholders are invited to approve the Company’s 2005 financial statements and the distribution of part of the net income for the year, through payment of the following dividends:

  • €0.1400 for each ordinary share;
  • €0.1510 for each savings share.

Subject to approval by the shareholders’ meeting, the Company will pay the above-mentioned dividends as of 27 April 2006, with 24 April 2006 as the coupon detachment date.

Appointment of the Board of Auditors

The term of office of the Board of Auditors ends with the forthcoming meeting, as this is called to approve the financial statements for the third year of its appointment, in accordance with the resolution adopted by the shareholders’ meeting of the then Olivetti S.p.A. on 26 May 2003.
Shareholders are therefore invited to vote separately to:

  1. determine the number of members of the Board (five or seven);
  2. appoint the members and alternates;
  3. appoint the Chairman;
  4. determine the members’ compensation.

The Board of Directors has not put forward proposals for any of the above items; the ordinary shareholders are accordingly invited to put forward their own. In this respect it should be remembered that the bylaws provide for a specific publication procedure only for the slates referred to below.
The members of the Board of Auditors and the alternates will be appointed using the slate system pursuant to Article 17 of the Company’s bylaws. Three or five members (depending on whether the total number is five or seven) and one alternate will be chosen from the slate that obtains the majority of the votes cast by shareholders; two members and one alternate will be chosen from the other, so-called minority, slates.

Shareholders may present slates who, individually or together with other shareholders, hold a total number of shares representing at least 1% of the voting share capital, subject to their proving ownership of the number of shares needed for the presentation of slates at least two days prior to the date set for the shareholders’ meeting on the first call.

Each shareholder may present or participate in the presentation of only one slate and each candidate may appear on only one slate on pain of ineligibility.
The slates must be filed at the Company’s registered office and published in at least one Italian daily newspaper with national circulation, at least ten days before the date set for the meeting on the first call. Together with each slate, declarations must be filed in which the individual candidates agree to their candidacy and attest, on their own responsibility, that there are no grounds for ineligibility or incompatibility, and that they meet the prescribed requirements. Together with the declarations (to be resubmitted to the Board of Directors subsequent to the meeting) a CV for each candidate must be filed setting out their main personal and professional data.
The last paragraph of Article 2400 of the Italian Civil Code requires the meeting to be informed, at the time the members of the Board of Auditors are elected and before they accept the appointment, of the executive and control positions they hold in other companies. Accordingly, candidates are invited to submit a declaration containing this information with their CVs and to ensure it is updated to the date of the meeting. Candidates are also invited to authorize the publication of their CVs on the Company’s website.
Article 148 of Legislative Decree 58/1998, as amended by Law 262/2005, provides for the Chairman of the Board of Auditors to be appointed by the shareholders’ meeting from among the members elected by the minority shareholders, i.e. from among those elected from the minority slates. Accordingly, the bylaw providing for the Chairman to be elected by the members of the Board of Auditors will be disapplied.
Lastly, it should be noted that the shareholders’ meeting of 6 May 2004 set the annual compensation of the members of the Board of Auditors at €128,000 and that of the Chairman at €171,000. It also provided for an annual supplement of €20,000 to be paid to the member appointed to the supervisory body referred to in Legislative Decree 231/2001.

Decisions consequent on the resignations of two directors

Following the resignations as directors of Telecom Italia of Marco De Benedetti and Giovanni Consorte, the Board of Directors invites shareholders to take the decisions they deem appropriate.
The Board of Directors has neither co-opted any directors to replace those who resigned nor made any proposals to the meeting, but has left the matter entirely to the shareholders’ initiative.
The slate system will not be used to elect the two directors because the bylaws provide for this system to be used only when the entire Board of Directors has to be replaced.

Authorization to purchase and dispose of treasury shares

The directors request the meeting to authorize the purchase and disposal of ordinary and/or savings treasury shares within the limits prescribed by law (the maximum quantity purchasable is equal to 10% of the share capital and the authorization is effective for 18 months from the date the resolution is adopted) and for a total value of not more than €1 billion.

The proposal is intended to provide the Board of Directors with a flexible additional tool of management, to be used only if and when favourable opportunities arise in the light of market conditions.

Change to the audit engagement for the last fiscal year of the period 2004-06 It is proposed that the meeting should alter the conditions for the last fiscal year of the audit engagement awarded by the shareholders’ meeting of 6 May 2004 to Reconta Ernst & Young S.p.A. for the three-year period 2004-06. In particular, the auditing firm, considering the outturns for the first two years of the engagement (marked by the change in the relevant legal framework as a result of the introduction of IFRS, which the Company will also apply to its own financial statements as of 2006) and the completion of the merger of Tim Italia S.p.A., has requested the changes to the contract set out below for the 2006 fiscal year, which the Board of Directors, after obtaining the favourable opinion of the Board of Auditors, deems to be fair.

 

Original conditions
of the engagement

New conditions
proposed

Document

No. of hours per year

Fee in
euros

No. of hours per year

Fee in
euros

Company financial statements

11,800

1,010,000

13,540

1,200,000

Consolidated financial statements

1,500

140,000

1,840

200,000

Half-yearly report

1,900

160,000

2,980

280,000

This does not preclude the possibility of the above fees (which do not include expenses or VAT) being adjusted ex post if exceptional or unforeseeable circumstances occur that increase or decrease the planned commitments in terms of resources and time.

Documentation

The reports and proposed resolutions for all the items on the agenda are available to the public at the Company’s registered office and at Borsa Italiana S.p.A.
The documentation regarding the financial statements will be made available as of 27 March 2006, inter alia to comply with Article 82.2 of Consob Regulation 11971/1999, as amended,
The Company’s registered office will be open to the public for consultation and/or consignment of the above documentation on weekdays, Monday through Friday, from 09.00 a.m. to 13.00 p.m. and from 15.00 p.m. to 17.00 p.m.
The documentation for the meeting will also be posted on the Company’s website (www.telecomitalia.it).

Shuttle bus service to and from Rozzano

Buses will be provided to take shareholders to the meeting place on 13  April 2006 (departure at 9.00 a.m. from Telecom Italia’s registered office, at 2 Piazza degli Affari, Milan) and back after the meeting.
Shareholders wishing to use the service are requested to book not later than 12 April 2005 by calling the toll-free number 800899389 or sending an e-mail to navette.assemblee@telecomitalia.it.

Additional information

Requests for further clarifications or information may be made by:

  • calling the toll-free number 800020220 (for calls from within Italy)
  • calling +39 011 4356503 (for calls from abroad)
  • sending an e-mail to corporate.affairs@telecomitalia.it

Reports and proposed resolutions (file .pdf, 148 Kb)