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Notice of Shareholders' Meeting

02/28/2011 - 07:00 AM

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TELECOM ITALIA S.p.A.
Registered Office Milan at Piazza degli Affari 2
Executive office and branch office in Rome at Corso d’Italia 41
Share capital 10,688,746,056.45 euro fully paid up
Tax Code, VAT Registration Number and Milan Business Register Number 00488410010:
Electronics Manufacturers Register no. IT08020000000799

Those entitled to vote in the Meeting of the ordinary shareholders of Telecom Italia S.p.A. are hereby called to meet

  • at 12 pm on 9 April 2011 in Milan at Piazza degli Affari 2  (ordinary and extraordinary meeting, first call); or
  • at the same time and place on 11 April 2011 (extraordinary meeting, second call); or
  • at 10 am on 12 April 2011 in Rozzano (Milan) at viale Toscana 3 (ordinary meeting, second call and extraordinary meeting, third call);

to discuss and vote on the following

Agenda

Ordinary session

  • Financial statements for the year ended 31 December 2010 -  related and consequent resolutions
  • Appointment of the Board of Directors - related and consequent resolutions
  • Adjustment of the fees due to external auditors for the period 2011-2018 - related and consequent resolutions
  • Authorization for share buy-back and subsequent acts of disposal
  • Long Term Incentive Plan 2011 - related and consequent resolutions
  • Amendment to the Regulations governing the shareholders’ meetings - related and consequent resolutions

Extraordinary session

  • Amendment of Articles 15, 18 and 19 of the Bylaws - related and consequent resolutions
  • Authorisation to increase share capital for payment and free of charge for a total sum of 15,500,000 euro at the service of the Long Term Incentive Plan 2011 - related and consequent resolutions

It is expected that the quorum will be reached and the meeting duly constituted to vote on 12 April 2011 at 10 am in Rozzano (Milan) at Viale Toscana 3.

Items of business on the agenda

Financial statements for the year ended 31 December 2010 -  related and consequent resolutions

The draft financial statements of Telecom Italia for the year ended 31 December 2010 report net profits of 3,512,580,577 euro.

In addition to allocations to the legal reserve and a provision of  9,960,292.15 for an increase in share capital to serve the share plans approved by shareholders on 29 April 2010, a proposal will be submitted to the meeting for approval of both the financial statements and the distribution of dividend as follows:

  • 0.058 euro for each ordinary share;
  • 0.069 euro for each savings share;

Subject to the approval of the shareholders’ meeting, the Company will pay dividend from 21 April 2011, with coupon detachment date 18 April 2011.

Appointment of the Board of Directors - related and consequent resolutions

The term of office of the serving Board of Directors expires with the approval of the financial statements for the 2010 financial year.

The shareholders are therefore invited:

  • to determine the number of  Directors (between seven and nineteen), to establish the term of office of the new Board (up to a maximum of three financial years), and to determine its remuneration;
  • to appoint the Directors (using a slate voting system, as provided for in the Company’s Bylaws)

As usual, the Board of Directors will not formulate its own proposals, inviting shareholders to do so.

The Directors will be appointed on the basis of slates as described in the  body of this notice.

Adjustment of the fees due to external auditors for the period 2011-2018 - related and consequent resolutions

The audit firm PricewaterhouseCoopers S.p.A. requested that its fees, as defined by the shareholders’ meeting of 29 April 2010, be adjusted, as a result of the acquisition of control of the Telecom Argentina Group.

On the basis of the reasoned proposal put forward by the Board of Auditors, the shareholders’ meeting is proposed to increase the total annual fee due to PricewaterhouseCoopers S.p.A. from 1,811,300 euro to 1,891,900 (plus VAT and expenses) for each year of the period 2011-2018.

Authorization for share buy-back and subsequent acts of disposal

The shareholders’ meeting will be asked to authorize the purchase of Telecom Italia savings shares, within the limits of the law, and for a total value of not more than 800 million euro.

If approved, the proposal would not entail any mandatory buyback.

Long Term Incentive Plan 2011 - related and consequent resolutions

It is proposed that the shareholders’ meeting approve an incentive and retention plan called the “Long Term Incentive Plan 2011” reserved for a selected portion of Telecom Italia’s executives, Top Management and, when appointed, the Executive Team of Telecom Italia.

The plan provides diversified bonuses for the different categories of recipients, according to parameters based on the fixed component of their annual retribution, and commensurate with the achievement of predetermined performance objectives in the period 2011-2013.

The plan will be served through ad hoc capital increases and treasury stock. 

For more detail, see the specific information document.

Amendment to the Regulations governing the shareholders’ meetings - related and consequent resolutions

It is proposed to change the regulations governing the shareholders’ meetings to take account of:

  • the right to ask questions prior to the shareholders' meeting (articles 10.2 and 13.2);
  • new legal provisions on additions to the agenda of the shareholders’ meeting upon shareholders’ request (article 12.1);
  • electronic voting (article 15.1);
  • the simplification of the arrangements for scrutiny of votes during the shareholders’ meeting (article 6.2 and 16.1);
  • the possibility that representatives of the audit firm might attend the shareholders’ meeting (article 4.1).

A change (extension) of the right of the Chairman of the meeting to establish the maximum length of time participants may speak during the debates (articles 10.2 and 11.2) and the simplification of the mechanism for organising debates (article 11.1) are also proposed.

Amendment of Articles 15, 18 and 19 of the Bylaws - related and consequent resolutions

In extraordinary session, it is proposed that some amendments be made to the Bylaws, essentially to make them consistent with legislative decree no. 27/2010.

In relation to article 18, proposals are as follows:

  • authorization being granted to the Board of Directors to, on a case by case basis, (i) convene shareholders’ meetings on single call, and (ii) call the annual shareholders’ meeting within 180 days of the end of the financial year;
  • amendments of the competencies of the ordinary shareholders’ meeting, to make them consistent with the provisions in the Procedure for undertaking transactions with related parties, as adopted by the Board of Directors in its meeting of 4 November 2010, pursuant to Consob Regulation no. 17221/2010 (authorisation of major transactions with related parties, against independent directors’ opinion).

In relation to article 19, proposals are as follows:

  • authorization being granted to the Board of Directors to, on a case by case basis, (i) permit electronic voting (in addition to postal voting) prior to the shareholders’ meeting, (ii) designate one or more representatives for each shareholders’ meeting, on whom shareholders may confer proxies, free of charge;
  • possibility of notifying proxies to the Company by uploading them onto the Company internet site;
  • update of reference to proxy collection by shareholders’ association, subsequent to changes in the relevant legal provisions.

For clarification only, an amendment is proposed to specify the possibility for legal representatives to grant powers of representation of the Company, including before the courts (art. 15).

Shareholders who do not agree with the aforementioned proposals are not entitled to withdrawal.

Authorisation to increase share capital for payment and free of charge for a total sum of 15,500,000 euro at the service of the Long Term Incentive Plan 2011 - related and consequent resolutions

The shareholders’ meeting is proposed to authorize the Board of Directors to increase the Company’s share capital at the service of the Long Term Incentive Plan 2011:

  • in relation to the so-called selected executives, (i) for payment, by the issue of ordinary shares for a maximum amount of 5,000,000 euro, without pre-emption rights, to be offered for subscription to plan beneficiaries, and subsequently, (ii) free of charge for the maximum amount of 5,000,000 euro by assignment to those employees subscribing the aforementioned shares of a corresponding maximum amount of profit pursuant to article 2349 of the Italian Civil Code, by the issue of ordinary shares;
  • in relation to the Top Management, for a maximum amount of 5,500,000 euro by assignment to the beneficiaries of the plan of a corresponding amount of profit pursuant to article 2349 of the Italian Civil Code, by the issue of ordinary shares.

Shareholders who do not agree with the aforementioned proposals are not entitled to withdrawal.

Supplementary agenda

Those shareholders who, alone or with other shareholders, represent at least 2.5% of the ordinary share capital may ask for  additional items to be placed on the agenda for the Shareholders’ Meeting, indicating the proposed topics in a specific written application. The application and a report on the topics that are proposed for consideration must be delivered to the Registered Office of the Company by 10 March 2011, together with suitable certification attesting the ownership of the aforementioned shareholding, issued by those intermediaries who maintain the accounts in which the shares of the requesting shareholders are registered.

The agenda may not be supplemented to include subject matter that the law requires to be put to the Shareholders’ Meeting by proposal of the Directors or according to a plan or report drafted by the directors (other than the reports provided for by article 125-ter, subsection 1, of  Legislative Decree no. 58/1998, herein the Consolidated Finance Law - “CFL”).

The Company is responsible for making the supplementary agenda public and the report illustrating the material to be dealt with available, accompanied by any comments of the Board of Directors, no later than 25 March 2011, in the same forms used to publicise this notice and the remaining documentation for the shareholders’ meeting.

Shareholders intending to propose a supplement to the agenda for the shareholders’ meeting are invited to contact the Company Corporate Affairs office in advance to define all the necessary details.

Proposals on the appointment of the Board of Directors

Those shareholders who jointly or separately hold shares representing at least 1% of the ordinary share capital are entitled to present slates of candidates for appointment to the Board of Directors.

The slates must be filed at the Registered Office of the Company by 15 March 2011. Certification of intermediaries attesting that they hold the aforementioned shareholding at the date on which the slate is presented must reach the Company by 19 March 2011. Records adding or subtracting shares from the holding of the presenting shareholder after the date of filing of the slate have no effect.

The following documents must be filed with each slate:

  • for each candidate, (i) acceptance of candidacy, (ii) a declaration attesting that no causes of ineligibility or incompatibility exist, and that the candidate holds the prescribed requisites, (iii) a declaration attesting that the candidate possesses the requisites of independence specified in article 148, subsection 3, of the CFL and the Self-Regulatory Code of Borsa Italiana, if pertinent, (iv) an exhaustive report on the personal and professional characteristics of the candidate, indicating any appointments as director or auditor of any other company. Any variations that might occur prior to the day the shareholders’ meeting actually takes place must be promptly communicated to the Company.
  • the shareholders submitting a slate must also present the information relating to their identity, indicating the total number of shares they hold.

Consob recommends shareholders presenting a “minority list” to also file a declaration attesting “the absence of any connecting relations, including indirect relations, pursuant to article 147-ter, subsection 3, of the CFL and article 144-quinquies of the Issuer regulations, with shareholders who jointly or severally hold a controlling shareholding or a shareholding of relative majority, when this can be identified on the basis of the notices of relevant shareholdings pursuant to article 120 of the CFL or the publication of any voting trusts pursuant to article 120 of that law”, specifying any relations that exist with said controlling or relative majority shareholders (see Consob Communication no. 9017893 of 26 February 2009).

The Company is responsible for making public the information on properly filed slates. This information will be published at the Registered Office of the Company and at Borsa Italiana S.p.A., as well as on the website  www.telecomitalia.com/assemblea, at least 21 days before the Shareholders’ meeting (that is no later than 19 March 2011). Any proposals by shareholders submitting slates concerning the number of directors, their term of office or the remuneration of the Board being appointed formulated at the same time will be made public by the Company in the same way.

Shareholders intending to present a slate are invited to contact the Company Corporate Affairs office in advance to define all the necessary details.

Documentation

The following information will be made available to the public at the registered office of the Company and at Borsa Italiana S.p.A., as well as on the company website www.telecomitalia.com/assemblea :

  • as of today, the report (invitation to propose) on the appointment of the Board of Directors;
  • by 10 March 2011, the reports and proposed resolutions on the other items on the agenda, as well as the information document on the Long Term Incentive Plan 2011;
  • by 19 March 2011, the documentation on the Telecom Italia 2010 financial statements.

The documentation on the financial statements of subsidiary and affiliated companies will be available at the Registered Office of the Company by 25 March 2011.

The Registered Office is open to the public for consultation and/or to provide copies of the documentation listed above to all those interested on working days from 10 am to 1 pm.

The documentation on the shareholders’ meeting may be requested using the contact details at the end of this notice; the company will not take into account any requests formulated on previous occasions.

Questions on the topics on the agenda

Shareholders may ask questions about the matters on the agenda before the shareholders’ meeting, submitting them to the Company by 4 April 2011.  Questions may be sent by post to the following address:
TELECOM ITALIA S.p.A.
Corporate Affairs
- Ref.  Domande
Piazza degli Affari, 2
20123 MILAN - ITALY,
by fax to +39 06 91864277, by e-mail to the following address  domande.assemblea2011@telecomitalia.it, or through the company website www.telecomitalia.com/assemblea.

The right to vote is legitimated by the transmission to the Company of the appropriate certification issued by the intermediaries who hold the accounts in which the ordinary shares held by the shareholder are registered to the address indicated above or, alternatively, by the communication of a request to attend the shareholders’ meeting referred to below.

The Company reserves the right to provide answers to the questions in receives in a specific “Questions & Answers” section that may be consulted on the company website www.telecomitalia.com/assemblea or to otherwise provide single answers to questions on the same subject.

Further details and the legal regulations on submitting questions before a shareholders’ meeting may be found on the company website www.telecomitalia.com/assemblea.

Entitlement to attend

Pursuant to the law, persons for whom the intermediary of reference has transmitted to the Company the specific communication attesting that they are entitled to do so on 31 March 2011 (the record date) are entitled to attend and vote at the shareholders’ meeting. Those who are found to hold shares only after this date shall not have the right to participate and vote in the Shareholders’ meeting.

It should be noted that the intermediary communicates to the issuer at the instigation of the entitled subject. Those persons entitled to attend are asked to give instructions to the intermediary that keeps the relevant accounts to transmit the aforementioned communication to Telecom Italia. Any requests for prior notice or expense for fulfilment of the duties of the intermediary may not be charged to the Company.

Shareholders with shares held by the Company must use the usual channels of communication by telephone or using the intranet and internet addresses available to them

Holders of ADRs listed on the New York Stock Exchane and representing ordinary Telecom Italia shares must contact JP Morgan Chase Bank, the issuer of said ADRs (customer service postal address PO Box 64504, St. Paul, MN 55164-0504, telephone +1 651 453 2128 for calls from outside the United States; 1 800 990 1135 for calls from inside the United States; email address jpmorgan.adr@wellsfargo.com).  

Voting by mail

Those entitled to vote in the ordinary Shareholders’ meeting may exercise their voting rights by mail. The form for doing so will be available from 11 March 2011:

  • from the Registered Office of the Company, where it may be requested on working days between 10 am and 1 pm.
  • from the company website at www.telecomitalia.com/assemblea, where a printable version is available.

A copy of the form to cast votes by mail may also be requested from the contact details given at the end of the notice.

The envelope containing the ballot card, duly completed and signed (to be placed in a further sealed envelope, to ensure the vote is confidential until scrutinised, as specified in the applicable law), with a copy of the ID document of the person signing the form, and suitable documentation to attest entitlement to sign, a copy of the communication issued by the intermediary, if possible, must be delivered to the following address:

TELECOM ITALIA S.p.A.
Corporate Affairs - Ref.  Voto
Piazza degli Affari, 2
20123 MILAN - ITALY,

by the end of the day before the meeting. A vote cast by mail may be revoked with a written declaration brought to the attention of the Company at the same address within the same deadline; a vote may also be cancelled by express declaration made by the person concerned during the Shareholders’ meeting.

It should be noted that voting by mail must be undertaken directly by the person entitled to vote.

Further details and the legal regulations on voting by mail may be found on the company website www.telecomitalia.com/assemblea

Voting by proxy

Those entitled to vote may issue a written proxy to represent them in the shareholders’ meeting within the statutory limits (normally a single representative for each account on which the shares that are the object of communication for participation in the meeting are registered). The delegating shareholder is entitled to impart instructions to the representative, to cancel the proxy she/he has conferred, to indicate one or more replacements, to attribute to the representative the faculty of appointing a third party replacement.

While awaiting the issue of the regulation envisaged in article 135-novies, subsection 6, of the CFL by the Ministry of Justice, a proxy may not be conferred electronically.

A model proxy in Italian and English is available from the Registered Office of the Company (where it may be requested on working days between 10 am and 1 pm, or from the contacts indicated at the end of this notice), as well as from the company website www.telecomitalia.com/assemblea, where a printable version is available.

Proxy votes may be communicated to the Company by mail to the following address:

TELECOM ITALIA S.p.A.
Corporate Affairs - Ref.  Delega
Piazza degli Affari, 2
20123 MILAN - ITALY,

by fax to +39 06 91864337, by e-mail to the following address assemblea.azionisti@telecomitalia.it, or through the company website www.telecomitalia.com/assemblea. Any prior notification does not absolve the proxy-holder of the obligation to attest the compliance of the notified copy with the original, and the identity of the delegating party, during accreditation for access to the shareholders’ meeting.

Further details and the legal regulations on voting by proxy may be found on the company website www.telecomitalia.com/assemblea.

                                                   * * *

For the Shareholders’ meeting to which this notice refers, Telecom Italia has appointed Mr. Dario Trevisan, attorney,  (hereafter “the Designated Representative”) as the subject on whom those entitled to vote, legitimised in the legal forms, may confer proxies free of charge. The proxy given to the Designated Representative shall only have effect for those proposals for which voting instructions have been imparted.

The proxy is conferred on the Designated Representative by completing and signing the appropriate form, which will be available from 4 March 2011

  • from the Registered Office of the Company, where it may be requested on weekdays between 10 am and 1 pm.
  • from the company website at www.telecomitalia.com/assemblea, where a printable version is available.

A copy of the proxy form for a Designated Representative may also be requested from the contact details given at the end of the notice.

The duly completed and signed proxy form must be delivered to the following address:

Avv. Dario Trevisan
Passaggio degli Osii n. 2
20123 MILAN - ITALY,

by 7 April 2011. The voting instructions and proxies may be revoked by the same date.

Further details and the legal regulations on the role of the designated representative by the issuer may be found on the company website www.telecomitalia.com/assemblea

From 7 March 2011 the Designated Representative will make available a toll-free number, 800134679 and email address info@rappresentante-designato.it for information and clarification.

                                                              * * *

It should be noted that notices relating to proxy solicitations by third parties will be published on the company website www.telecomitalia.com/assemblea. The Company will assess any requests from promoters for publication on the website indicated above, including prospectuses and proxy forms drawn up in accordance with the current regulations, henceforth declining any liability for the content of the aforementioned documentation.

Further details and the legal regulations on solicitation of proxies may be found on the company website www.telecomitalia.com/assemblea.

Shareholders intending to promote a solicitation of proxies are invited to contact the Company Corporate Affairs office in advance to define all the necessary details.

Total number of shares and voting rights

Pursuant to article 5 of the Bylaws, the subscribed and fully paid in share capital is equal to 10,688,746,056.45 euro, divided into 13,407,963,078 ordinary shares (with the right to vote in ordinary and extraordinary meetings of the shareholders of the Company) and 6,026,120,661 savings shares (with the right to vote in special savings shareholders’ meetings), all of par value of 0.55 euro each.

Organisation

To participate in the meeting, those with voting rights and their representatives are invited to present themselves before the time scheduled for the start of the meeting, with an identity document; accreditation activities will start at 8.30 am on 12 April 2011. Moreover, to facilitate the ascertainment of their entitlement to participate, the persons entitled are invited to exhibit their copy of the communication to the Company that the intermediary is required to make available to them in accordance with the current regulations on the day of the meeting.

A free shuttle service will be offered to those participating in the shareholders’ meeting, leaving the registered office of Telecom Italia (Piazza Affari 2, Milan) for the place in which the shareholders’ meeting will be held at 8.00, 8.30 and 9.000 am on 12 April 2011 and in the opposite direction at the end of the meeting.

To use the shuttle service, it must be booked by 8 April 2011, using the toll-free number 800899389 or by email to (navette.assemblee@telecomitalia.it).

Further information

For any further requests or information, contact: