-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IWIE2ZdpsV8zLYMr6lqHXAqfZ6UaEkg7+fsCCPm5aG2Q0mMkGR3uSAsx4EOSGiWU ZioXTldy2oNhfkFu/96eeA== 0000930413-07-008302.txt : 20071031 0000930413-07-008302.hdr.sgml : 20071030 20071031172521 ACCESSION NUMBER: 0000930413-07-008302 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20071031 DATE AS OF CHANGE: 20071031 GROUP MEMBERS: SINTONIA S.A. GROUP MEMBERS: SINTONIA S.P.A. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TELECOM ITALIA S P A CENTRAL INDEX KEY: 0000948642 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 000000000 STATE OF INCORPORATION: L6 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-61827 FILM NUMBER: 071203830 BUSINESS ADDRESS: STREET 1: PIAZZA DEGLI AFFARI 2 CITY: 20123 MILAN STATE: L6 ZIP: L6 BUSINESS PHONE: 011-39-02-8595-1 MAIL ADDRESS: STREET 1: PIAZZA DEGLI AFFARI 2 CITY: 20123 MILAN STATE: L6 ZIP: L6 FORMER COMPANY: FORMER CONFORMED NAME: STET SOCIETA FINANZIARIA TELEFONICA PA DATE OF NAME CHANGE: 19950727 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Ragione S.a.p.a di Gilberto Benetton e C. CENTRAL INDEX KEY: 0001394289 IRS NUMBER: 000000000 STATE OF INCORPORATION: L6 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: CALMAGGIORE 23 - 31100 CITY: TREVISO STATE: L6 ZIP: 31100 BUSINESS PHONE: 39 0422 599616 MAIL ADDRESS: STREET 1: CALMAGGIORE 23 - 31100 CITY: TREVISO STATE: L6 ZIP: 31100 SC 13D/A 1 c50978_sc13d-a.txt ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A (Rule 13d-101) (Amendment No. 37) ------------------------------ TELECOM ITALIA S.P.A. (Name of Issuer) ORDINARY SHARES OF EURO 0.55 PAR VALUE EACH 87927W10 (Title of class of securities) (CUSIP number) DOTT. GIANNI MION SINTONIA S.P.A. CORSO DI PORTA VITTORIA 16 20122 MILAN ITALY (+39) 02-549241 WITH A COPY TO: MICHAEL S. IMMORDINO, ESQ. LATHAM & WATKINS 99 BISHOPSGATE LONDON EC2M 3XF ENGLAND (+44) 207-710-1076 (Name, address and telephone number of person authorized to receive notices and communications) OCTOBER 23, 2007 AND OCTOBER 25, 2007 (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [_]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. SEE Rule 13d-7 for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 23)
- ---------------------------------------------------------- ---------------------------------------------------- CUSIP No. 87927W10 13D - ---------------------------------------------------------- ---------------------------------------------------- - ---------------------- ------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON SINTONIA S.p.A. I.R.S. IDENTIFICATION NO. Not Applicable OF ABOVE PERSON - ---------------------- ------------------------------------------------------------------------------ ------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X] (b) [_] - ---------------------- ------------------------------------------------------------------------------ ------------------ 3 SEC USE ONLY - ---------------------- --------------------------------------------------------------- -------------------------------- 4 SOURCE OF FUNDS: WC, BK - ---------------------- -------------------------------------------------------------------------------------- ---------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_] - ---------------------- ---------------------------------------------------------------- -------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION: Italy - ---------------------- ---------------------------------------------------------------- -------------------------------- NUMBER OF 7 SOLE VOTING POWER: 30,084,650 SHARES ------------------- ----------------------------------------- -------------------------------- BENEFICIALLY 8 SHARED VOTING POWER: 3,157,172,623 OWNED BY (See Item 5) ------------------- ----------------------------------------- -------------------------------- EACH 9 SOLE DISPOSITIVE POWER: 30,084,650 REPORTING ------------------- ----------------------------------------- -------------------------------- 10 SHARED DISPOSITIVE POWER: 3,157,172,623 PERSON WITH (See Item 5) - ---------------------- ---------------------------------------------------------------- -------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 3,187,277,273 ---------------------------------------------------------------- -------------------------------- - ---------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - ---------------------- ---------------------------------------------------------------- -------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 23.8% (See Item 5) - ---------------------- ---------------------------------------------------------------- -------------------------------- 14 TYPE OF REPORTING PERSON: CO
(Page 2 of 23)
- --------------------------------------------------------- ---------------------------------------------------- CUSIP No. 87927W10 13D - --------------------------------------------------------- ---------------------------------------------------- - ----------------------- ----------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON SINTONIA S.A. (FORMERLY KNOWN I.R.S. IDENTIFICATION NO. AS EDIZIONE FINANCE INTERNATIONAL S.A.) OF ABOVE PERSON Not Applicable - ----------------------- -------------------------------------------------------------------------- -------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X] (b) [_] - ----------------------- -------------------------------------------------------------------------- -------------------- 3 SEC USE ONLY - ----------------------- ------------------------------------------------------------ ---------------------------------- 4 SOURCE OF FUNDS: WC, BK - ----------------------- ------------------------------------------------------------------------------------ ---------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_] - ----------------------- ------------------------------------------------------------- --------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION: Luxembourg - ----------------------- ------------------------------------------------------------- --------------------------------- NUMBER OF 7 SOLE VOTING POWER: 0 SHARES ----------------- --------------------------------------- --------------------------------- BENEFICIALLY 8 SHARED VOTING POWER: 3,157,172,623 OWNED BY (See Item 5) ----------------- --------------------------------------- --------------------------------- EACH 9 SOLE DISPOSITIVE POWER: 0 REPORTING ----------------- --------------------------------------- --------------------------------- 10 SHARED DISPOSITIVE POWER: 3,157,172,623 PERSON WITH (See Item 5) - ----------------------- ------------------------------------------------------------- --------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY 3,157,172,623 REPORTING PERSON: - ----------------------- ------------------------------------------------------------- --------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: - ----------------------- ------------------------------------------------------------- --------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 23.6% (See Item 5) - ----------------------- ------------------------------------------------------------- --------------------------------- 14 TYPE OF REPORTING PERSON: CO
(Page 3 of 23)
- --------------------------------------------------------- ------------------------------------------------ CUSIP No. 87927W10 13D - --------------------------------------------------------- ------------------------------------------------ - ----------------------- ------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON RAGIONE S.a.p.a. DI GILBERTO I.R.S. IDENTIFICATION NO. BENETTON E C. OF ABOVE PERSON Not Applicable - ----------------------- -------------------------------------------------------------------------- ---------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X] (b) [_] - ----------------------- -------------------------------------------------------------------------- ---------------- 3 SEC USE ONLY - ----------------------- ------------------------------------------------------------ ------------------------------ 4 SOURCE OF FUNDS: WC, BK - ----------------------- ------------------------------------------------------------------------------------ ------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_] - ----------------------- ------------------------------------------------------------- ----------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION: Italy - ----------------------- ------------------------------------------------------------- ----------------------------- NUMBER OF 7 SOLE VOTING POWER: 30,084,650 SHARES ------------------ --------------------------------------- ----------------------------- BENEFICIALLY 8 SHARED VOTING POWER: 3,157,172,623 OWNED BY (See Item 5) ------------------ --------------------------------------- ----------------------------- EACH 9 SOLE DISPOSITIVE POWER: 30,084,650 REPORTING ------------------ --------------------------------------- ----------------------------- 10 SHARED DISPOSITIVE POWER: 3,157,172,623 PERSON WITH (See Item 5) - ----------------------- ------------------------------------------------------------- ----------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 3,187,277,273 - ----------------------- ------------------------------------------------------------- ----------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - ----------------------- ------------------------------------------------------------- ----------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 23.8% (See Item 5) - ----------------------- ------------------------------------------------------------- ----------------------------- 14 TYPE OF REPORTING PERSON: PN
(Page 4 of 23) This Amendment No. 37 (this "AMENDMENT") amends the Statement on Schedule 13D dated August 9, 2001, as amended (as previously amended, the "SCHEDULE 13D") filed by Edizione Holding S.p.A., a company incorporated under the laws of the Republic of Italy, Edizione Finance International S.A., a company incorporated in the Duchy of Luxembourg, and Ragione S.a.p.a. di Gilberto Benetton e C., a partnership organized under the laws of the Republic of Italy ("RAGIONE") with respect to the ordinary shares, euro 0.55 par value per share ("TELECOM SHARES"), of Telecom Italia S.p.A., a company incorporated under the laws of the Republic of Italy ("TELECOM ITALIA"). Capitalized terms used in this Amendment without definition have the meanings ascribed to them in the Schedule 13D. This Amendment is being filed by each of Sintonia S.p.A., Sintonia S.A. (formerly known as Edizione Finance International S.A.) and Ragione. By virtue of the demerger of Edizione Holding S.p.A., effective on March 2, 2007, Sintonia S.p.A. became member of a group, together with and Sintonia S.A. and Ragione, with Pirelli & C. S.p.A. ("PIRELLI") and Olimpia S.p.A. ("OLIMPIA") with respect to the Telecom Shares. INTRODUCTION. On October 25, 2007, Sintonia S.p.A. and Sintonia S.A. (together, the "SINTONIA SELLERS") and Pirelli sold the entire share capital of Olimpia, the entity which currently holds approximately 18% of the ordinary share capital of Telecom Italia, to a group of investors (the "SALE"). The group of investors that purchased the Olimpia share capital includes Sintonia S.A. (in such capacity, the "SINTONIA BUYER"). The following summarizes the sale and purchase of such share capital and certain agreements related thereto. On April 28, 2007, a group of investors made up of Assicurazioni Generali S.p.A. ("AG" and, together with the AG group companies (Alleanza Assicurazioni S.p.A., INA Assitalia S.p.A., Volksfursorge Deutsche Lebenversicherung A.G., Generali Vie S.A.) that became investors on October 25, 2007 pursuant to the Amendment (as defined below), "GENERALI"), the Sintonia Buyer, Intesa Sanpaolo S.p.A. ("INTESA SANPAOLO"), Mediobanca S.p.A. ("MEDIOBANCA" and, together with Generali, the Sintonia Buyer and Intesa Sanpaolo, the "ITALIAN INVESTORS") and Telefonica S.A., the Spanish-based telecommunications operator ("TELEFONICA" and, together with the Italian Investors, the "INVESTORS"), entered into a co-investment agreement (as subsequently amended by an amendment agreement on October 25, 2007 (the "AMENDMENT"), the "CO-INVESTMENT AGREEMENT") to establish the terms and conditions for their participation in Centotrenta 4/6 S.r.l., an Italian company with registered office at Galleria del Corso 2, Milan, Italy, fiscal code n. 05277610969 subsequently transformed into an Italian joint stock company and renamed Telco S.p.A. ("TELCO"), an Italian corporation through which they have purchased the entire share capital of Olimpia from Pirelli and the Sintonia Sellers as indicated above (the "TRANSACTION"). The Co-Investment Agreement also covers the capitalization and funding of Telco in connection with the Transaction and the general framework of the investment obligations of each of the Investors. Among other things, pursuant to the Amendment, the AG group companies became Investors for purposes of the Co-Investment Agreement and the Shareholders' Agreement (as hereinafter defined). In addition to Telco's participation in Telecom Italia's ordinary share capital through its interest in Olimpia, pursuant to the Co-Investment Agreement, on October 25, 2007 Generali and Mediobanca (Page 5 of 23) contributed to Telco ordinary shares of Telecom Italia they held on that date. These shares amount to 5.6% of Telecom Italia's ordinary share capital, with the individual contributions of Generali and Mediobanca amounting to 4.06% and 1.54%, respectively, of Telecom Italia's ordinary share capital, bringing Telco's direct and indirect participation in Telecom Italia's ordinary share capital to approximately 23.6%. A copy of the Co-Investment Agreement was previously filed on Schedule 13D as Exhibit 85 and a copy of the Amendment is filed as Exhibit 92 hereto. On April 28, 2007, the Investors also entered into a shareholders' agreement (as subsequently amended by the Amendment, the "SHAREHOLDERS' AGREEMENT"), pursuant to which the Investors set out, among other things, the principles of corporate governance of Telco and Olimpia, respectively, the transfer of Telco's shares and any Olimpia Shares or Telecom Shares (each as defined below) directly or indirectly owned by Telco and the principles of designation, among the Investors, of candidates to be included in a common list for the appointment of directors of Telecom Italia under the voting list mechanism provided for by Telecom Italia's by-laws. A copy of the Shareholders' Agreement was previously filed on Schedule 13D as Exhibit 87 and a copy of an unofficial English translation of the by-laws of Olimpia is filed as Exhibit 93 hereto (such translation incorporates all recent amendments and amendments described previously on Schedule 13D and therefore supercedes the prior version filed on Schedule 13D as Exhibit 19). On May 4, 2007, the Investors entered into a sale and purchase agreement with Pirelli and the Sintonia Sellers (the "SHARE PURCHASE AGREEMENT") to purchase the entire share capital of Olimpia of euro 4.6 billion divided into 4,630,233,510 ordinary shares (the "OLIMPIA SHARES"). Olimpia in turn owns 2,407,345,359 ordinary voting shares of Telecom Italia, or approximately 18% of the ordinary share capital of Telecom Italia. A copy of the Share Purchase Agreement was previously filed on Schedule 13D as Exhibit 90. In summary, the result of the Sale and the Co-Investment and Purchase and related transactions on the Sintonia Sellers' and Ragione's respective interests in the ordinary voting shares of Telecom Italia is as follows: o the Sintonia Sellers no longer hold interests in the ordinary voting shares of Telecom Italia through a common entity (Olimpia) with Pirelli; o the Shareholders' Agreement (as defined in Schedule 13D filed on August 9, 2001) and the 2006 Shareholders' Agreement (as defined in Amendment No. 33 to Schedule 13D on November 8, 2006) have been terminated; o the Sintonia Buyer holds approximately 8.4% of Telco and thus remains an indirect holder of the ordinary voting shares of Telecom Italia through Olimpia's approximately 23.6% interest therein; o Sintonia S.p.A., through its interest in the Sintonia Buyer, and Ragione, through its interest in Sintonia S.p.A., likewise remain indirect holders of ordinary voting shares of Telecom Italia; and (Page 6 of 23) o in addition, Sintonia S.p.A. directly holds 30,084,650 Telecom Shares and may be deemed to have sole power to vote or direct the vote and sole power to dispose or direct the dispositions of such Telecom Shares. The closing of the purchase of the Olimpia Shares pursuant to the Share Purchase Agreement occurred on October 25, 2007, following the receipt of the announcement of forthcoming governmental approvals from the Brazilian antitrust authority on October 23, 2007 (the "Announcement"), an unofficial English translation of which is attached here as Exhibit 94. Pursuant to the Amendment, the Investors acknowledged the content of the Announcement and each of the Investors undertook to implement the content thereof through appropriate actions. Items 2, 3, 4, 5, 6 and 7 of Schedule 13D are hereby amended and supplemented to add the following: ITEM 2. IDENTITY AND BACKGROUND This Amendment is being filed by each of Sintonia S.p.A., Sintonia S.A., and Ragione. Sintonia S.p.A., owns approximately 100% of the share capital of Sintonia S.A., which owns directly approximately 10.62% of the equity of Olimpia. Sintonia S.p.A. owns directly approximately 9.38% of the equity of Olimpia (and, together with its control of Sintonia S.A., 20% of Olimpia) and 0.23% of the share capital of Telecom Italia. On September 28, 2007, Sintonia S.p.A., GS Infrastructure Partners I (an infrastructure fund managed by Goldman Sachs, "GSIP") and Mediobanca signed a share purchase agreement pursuant to which GSIP and Mediobanca agreed to acquire, respectively, 3% and 1% of Sintonia S.A. Under the terms of the transaction, GSIP and Mediobanca also agreed to subscribe to a capital increase in Sintonia S.A. to reach fully diluted stakes of approximately 16.3% and 5.5%, respectively. The closing of this transaction is subject to customary regulatory approvals. Sintonia S.p.A., through its subsidiaries and affiliates (including Sintonia S.A.), is a holding company that manages both majority and minority investments in publicly traded and privately owned companies. Sintonia S.p.A. is principally engaged in the utilities and infrastructure sector. 100% of the share capital of Sintonia S.p.A. is beneficially owned by Ragione. Ragione is a holding company principally engaged in managing its participations in two sub-holdings, Edizione Holding S.p.A. and Sintonia S.p.A., through which it holds interests in companies operating in the following business areas: (i) textiles and clothing, (ii) food and beverages, (iii) services and infrastructures for transportation and communication, (iv) real estate and agriculture and (v) certain other investments. The registered office of Sintonia S.p.A. is located at Corso di Porta Vittoria 16, Milan, Italy. The registered office of Sintonia S.A. is located at 1, Place d'Armes, Luxembourg. The registered office of Ragione is located at Calmaggiore 23, Treviso, Italy. The name, business address, citizenship, present principal occupation or employment of each director and executive officer of Sintonia S.p.A., Sintonia S.A. and Ragione is set forth on Annexes A-1, A-2 and A-3. (Page 7 of 23) During the past five years, neither Sintonia S.p.A., Sintonia S.A., Ragione, nor any of their respective directors or executive officers has been (i) convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activity subject to, federal or state securities laws or fining any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The closing of the purchase of the Olimpia Shares pursuant to the Share Purchase Agreement occurred on October 25, 2007, following the issuance of the Announcement on October 23, 2007. At the closing of the Share Purchase Agreement Telco paid total consideration of euro 2.82 per Telecom Share held by Olimpia multiplied by 2,407,345,359 Telecom Shares, less Olimpia's total net debt (as defined under the Share Purchase Agreement) as of the closing date. The purchase price for 100% of Olimpia's share capital was approximately euro 4.161 billion. Telco paid 80% of the consideration to Pirelli and 20% of the consideration to the Sintonia Sellers. It is expected that the Investors will merge Olimpia into Telco. Pursuant to the Co-Investment Agreement, Telco has been initially capitalized with euro 5.145 billion, in the following manner: o Generali contributed to Telco 543.4 million Telecom Shares for total consideration of euro 1.375 billion, based on a share price of euro 2.53 per Telecom Share; o Mediobanca contributed to Telco 206.5 million Telecom Shares for total consideration of euro 522 million, based on a share price of euro 2.53 per Telecom Share; o Intesa Sanpaolo contributed to Telco euro 522 million in cash; o the Sintonia Buyer contributed to Telco euro 412 million in cash; and o Telefonica contributed to Telco euro 2.314 billion in cash. In addition, prior to the closing of the Share Purchase Agreement, Telco borrowed from Mediobanca and Intesa Sanpaolo approximately euro 925 million (the "FACILITY"). Such Facility was made available on an arm's length basis. Immediately after the closing of the Share Purchase Agreement, Telco resolved to increase its share capital by euro 900 million (the "FIFTH CAPITAL Increase") for purposes of financing the repayment of the Facility. Telco shareholders look favorably on the potential for further contributions of Telecom Shares in Telco (up to an amount not exceeding 30% of the ordinary share capital of Telecom Italia), provided that in such an event the right to subscribe further capital increases in cash shall be granted to the other existing shareholders in order to avoid possible dilution. See the joint press release announcing the closing of the Transaction, dated October 25, 2007, issued by Generali, Intesa Sanpaolo, Mediobanca, Sintonia S.A. and Telefonica filed as Exhibit 95. (Page 8 of 23) ITEM 4. PURPOSE OF THE TRANSACTION For the Investors, the principal objective of the transaction is the creation of value over time for all shareholders, by accompanying Telecom Italia's business growth strategies which will be defined in full autonomy by the board of directors and the management of Telecom Italia. A fundamental assumption of the Co-Investment Agreement and the Shareholders' Agreement is that the Telecom Italia and Telefonica groups will be managed autonomously and independently. See the joint press release, dated April 28, 2007, issued by Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and Telefonica, previously filed on Schedule 13D as Exhibit 88 and incorporated herein by reference, and the joint press release requested by Consob (the Italian financial market authority), dated May 2, 2007, issued by Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and Telefonica, previously filed on Schedule 13D as Exhibit 89 and incorporated herein by reference, and the joint press release announcing the closing of the Transaction, dated October 25, 2007, issued by Generali, Intesa Sanpaolo, Mediobanca, Sintonia S.A. and Telefonica filed as Exhibit 95. In addition, the information contained in Items 5 and 6 below is incorporated herein by reference. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER The Investors purchased Olimpia through Telco pursuant to the Share Purchase Agreement. Olimpia currently holds 2,407,345,359 ordinary Telecom Shares, or approximately 18% of the ordinary share capital of Telecom Italia. In addition to this purchase by Telco, pursuant to the Co-Investment Agreement, Generali and Mediobanca contributed Telecom Shares they previously owned directly to Telco totaling approximately 5.6% of Telecom Italia's ordinary share capital (4.06% of which was owned by Generali, and 1.54% of which was owned by Mediobanca), bringing Telco's total participation in Telecom Italia's ordinary share capital to 23.6%. As a result of the Transaction, the Italian Investors currently hold a total of 57.7% of Telco's share capital, divided in the following manner: o Generali, 28.0%; o Mediobanca, 10.6%; o Intesa Sanpaolo, 10.6%; and o Sintonia Buyer, 8.4%. Telefonica holds the remaining 42.3% of Telco's share capital. In connection with the Fifth Capital Increase, in accordance with the Co-Investment Agreement and the Shareholders' Agreement, Intesa Sanpaolo may select new Italian investors, other than telecom operators, to subscribe newly issued shares in Telco for cash consideration of up to 5% of Telco's share capital for each new investor, provided that such selection is made in agreement with the other Italian Investors and is accepted by Telefonica, such agreement and acceptance not to be unreasonably withheld. The preceding summary of certain material provisions of the Share Purchase Agreement, the Co-Investment Agreement and the Shareholders' Agreement does not purport to be a full and complete description of such documents and is entirely qualified by reference to the full text of (Page 9 of 23) such documents previously filed as Exhibits 90, 85 and 87 to Schedule 13D, respectively, and incorporated herein by reference. According to publicly available information reported by Consob (the Italian financial market authority), as of October 25, 2007, 13,380,751,344 Telecom Shares were outstanding (the "Outstanding Telecom Shares"). Sintonia S.p.A. may be deemed to beneficially own 3,187,277,273 Telecom Shares, representing approximately 23.8% of the Outstanding Telecom Shares. Sintonia S.p.A. directly holds 30,084,650 Telecom Shares and has sole power to vote or direct the vote and sole power to dispose or direct the dispositions of such Telecom Shares. Sintonia S.p.A. no longer holds its indirect interest in Telecom Shares through Olimpia but remains an indirect holder, through its ownership of 100% of the share capital of Sintonia S.A., of 3,157,172,623 Telecom Shares held by Telco and indirectly held by Sintonia S.A. Sintonia S.p.A. may be deemed to have shared power to vote or to direct the vote and shared power to dispose or direct the disposition of such shares. Sintonia S.A. may be deemed to beneficially own 3,157,172,623 Telecom Shares through its indirect interest in Telecom Shares held by Telco, representing approximately 23.6% of the Outstanding Telecom Shares. Sintonia S.A. may be deemed to have shared power to vote or direct the vote and shared power to dispose or direct the dispositions of such Telecom Shares. Ragione may be deemed to beneficially own, through its ownership of 100% of the share capital of Sintonia S.p.A., 3,187,277,273 Telecom Shares, representing approximately 23.8% of the Outstanding Telecom Shares. Ragione has sole power to vote or direct the vote and sole power to dispose or direct the dispositions of the 30,084,650 Telecom Shares held directly by Sintonia S.p.A. In addition, Ragione may be deemed to have shared power to vote or to direct the vote and shared power to dispose or direct the disposition of 3,157,172,623 Telecom Shares indirectly held by Sintonia S.p.A. through Telco. The beneficial ownership of Telecom Shares by the persons listed in Annexes A-1, A-2 and A-3 to this Amendment, if any, is indicated next to such person's name in such Annex . To the best of Sintonia S.p.A., Sintonia S.A. and Ragione's knowledge, as applicable, such persons have sole voting and dispositive power over the Telecom Shares that they beneficially own, if any. Over the last sixty days, the persons listed in Annexes A-1, A-2 and A-3 have not effected proprietary transactions in Telecom Shares. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER SHARE PURCHASE AGREEMENT The following summary of certain material provisions of the Share Purchase Agreement does not purport to be a full and complete description of such document and is entirely qualified by reference to the full text of such document, previously filed on Schedule 13D as Exhibit 90 and incorporated herein by reference. (Page 10 of 23) The Investors, Pirelli and the Sintonia Sellers entered into the Share Purchase Agreement to establish the terms and conditions for the transfer of the ordinary share capital of Olimpia from Pirelli and the Sintonia Sellers to the Investors. The Share Purchase Agreement required, among other things, that the Olimpia Shares be purchased and sold with the right of the Investors to receive any dividends distributed by Olimpia after the closing of the transaction, even if accrued prior to the closing. The Share Purchase Agreement also required Olimpia, Pirelli, the Sintonia Sellers and the relevant Investors to terminate all existing shareholders' agreements concerning Olimpia and Telecom Italia upon the closing of the Sale and such existing shareholder agreements among themselves have been terminated as of October 25, 2007. The description of the Share Purchase Agreement in the Introduction and Item 3 are incorporated herein by reference. CO-INVESTMENT AGREEMENT The following summary of certain material provisions of the Co-Investment Agreement does not purport to be a full and complete description of such document and is entirely qualified by reference to the full text of such document, previously filed on Schedule 13D as Exhibit 85 and incorporated herein by reference. The Investors entered into the Co-Investment Agreement to establish the terms and conditions for (i) their participation in Telco, (ii) the acquisition through Telco from Pirelli and the Sintonia Sellers of 100% of the share capital of Olimpia, which in turn holds a stake of approximately 18% of the ordinary share capital of Telecom Italia, (iii) the capitalization and funding of Telco in connection with the acquisition, (iv) the division of Telco's share capital into two classes of shares ("Class A" and "Class B" shares), (v) the corporate scope of Telco, and (vi) the general framework of the respective obligations of the Investors under the Co-Investment Agreement. The description of the Co-Investment Agreement in the Introduction and Item 3 are incorporated herein by reference. SHAREHOLDERS' AGREEMENT The following summary of certain material provisions of the by-laws of Telco and the Shareholders' Agreement does not purport to be a full and complete description of such documents and is entirely qualified by reference to the full text of such documents, respectively, filed as Exhibit 96 hereto (such Exhibit superceding the proposed by-laws of Telco previously filed on Schedule 13D as Exhibit 86) and previously filed on Schedule 13D as 87, and incorporated herein by reference. The 30,084,650 Telecom Shares for which the Sintonia S.p.A. maintains sole voting power are not currently expected to be contributed to Telco and are not generally subject to the Shareholders Agreement or the Co-Investment Agreement, although the Shareholders' Agreement does prevent the Sintonia Buyer from acquiring additional Telecom Shares if such acquisition would cause the holdings of the Investors taken as a whole to exceed 30% of the Telecom Shares. See "-PROVISIONS RELATING TO TELECOM ITALIA." (Page 11 of 23) CLASSES OF SHARES The share capital of Telco is divided into Class A and the Class B shares. Telefonica holds and will acquire (through share capital increases or exercise of the pre-emption right set forth in the Telco's by-laws and as described below) only Class B shares or Class A shares to be converted into Class B shares, while the Italian Investors hold Class A shares, and have the possibility to acquire Class B shares in case of exercise of the pre-emption right to be converted into Class A shares, which is described more fully below. Class B shares will have exactly the same economic and administrative rights as the Class A shares, save as provided for in the Shareholders' Agreement and in the Telco by-laws. In the event of an increase of capital of Telco, the shareholders who hold Class A shares shall have the right to receive and subscribe Class A shares and the shareholders of Telco who hold Class B shares shall have the right to receive and subscribe for Class B shares. In the event that any holders of Class A shares have not fully exercised their pre-emption right, the other holders of Class A shares shall have the preferred right to exercise the pre-emption of the Class A shares that have not been opted for by the other shareholders. Similarly, in the event that any holders of Class B shares have not fully exercised their pre-emption right, the other holders of Class B shares shall have the preferred right to exercise the pre-emption of Class B shares that have not been opted for by the other shareholders. In the event that after the offer of such Class A shares has been made to the holders of Class A shares (whether or not such pre-emption rights have been exercised), there remain Class A shares not purchased by the other Class A shareholders, such shares will be offered to the holders of Class B shares in proportion to their shareholding of the total number of Class B shares issued by Telco, subject to the automatic conversion of the aforesaid Class A shares at the rate of one newly issued Class B share (having the same characteristics as the Class B shares in circulation) for each Class A share purchased. In the event that after the offer of such Class B shares has been made to the holders Class B shares (whether or not such pre-emption rights have been exercised), there remain Class B shares not purchased by the other Class B shareholders, such shares will be offered to holders of Class A shares in proportion to their shareholding of the total number of Class A shares issued by Telco, subject to the automatic conversion of the aforesaid Class B shares at the rate of one newly issued Class A share (having the same characteristics as the Class A shares in circulation) for each Class B share purchased. SHAREHOLDERS MEETINGS The shareholders' meeting of Telco will resolve with the vote of (i) at least 75% of the entire share capital on (x) share capital increases with the exclusion of the option right pursuant to article 2441, 4th and 5th paragraph of the Italian Civil Code, (y) mergers and de-mergers (except for the merger between Olimpia and Telco) determining a dilution of the shareholders, and (z) amendments to the provisions of the Telco by-laws regarding the appointment of the board of directors and the quorum of board of directors and shareholders meetings; and (ii) at least 65% of the entire share capital on the following matters: o any other matter pertaining to the extraordinary shareholders meeting of Telco; and (Page 12 of 23) o the dividend policy of Telco. However, in cases where one or more shareholders holding more than 30% of the entire share capital abstain from voting or remain absent from the relevant meeting, the quorum will be reduced to the vote of at least 50% plus one share of the entire share capital. In accordance with Telco's by-laws, acceptance by Telco's board of directors of any tender offers having as their subject the shares of Telecom Italia will be subject to the approval of the shareholders meeting. In case of any such approval, any dissenting shareholders shall become entitled to purchase all of the shares of Telco held by the approving shareholders. BOARD OF DIRECTORS The board of directors of Telco is comprised of ten members. The Italian Investors, as holders of Class A shares have appointed, and for so long as they hold more than 50% of the share capital of Telco, shall be entitled to appoint, six directors, including the Chairman. Of the six Telco directors appointed by holders of Class A shares, two directors have been indicated by Generali, one director has been indicated by each of Intesa Sanpaolo, the Sintonia Buyer and Mediobanca and one director has been indicated unanimously. Telefonica, as holder of Class B shares has appointed, and so long as it holds a percentage of at least 30% of the share capital of Telco shall be entitled to appoint, four directors, including the Vice-Chairman. So long as Telefonica holds a percentage of at least 20% of the share capital of Telco, Telefonica shall be entitled to appoint two directors. Should (x) the holders of Class A shares hold less than 50% plus one share, and/or (y) Telefonica as holder of Class B shares holds more than 50% plus one share, the Investors shall appoint the directors of Telco in a manner that grants the majority of the directors to the class of shares representing at least 50% plus one share of the entire share capital of Telco and seven out of ten directors to the class of shares representing more than 70% of the entire share capital of Telco. The board of directors of Telco will pass resolutions by vote of a majority of its members, except that, subject to certain exceptions, it will decide by vote of at least seven directors on the following matters: o the acquisition, disposal and encumbrance (directly or indirectly in any form or manner) of Olimpia's or Telecom Italia's shares or any rights attached thereto; o the carrying out of investments other than in Olimpia and in Telecom Italia; o capital expenditure and financial structure decisions for amounts in excess of euro 75 million; o decisions on the vote to be exercised in (x) the extraordinary shareholders' meeting of Telecom Italia convened pursuant to Italian law to approve resolutions on transactions of extraordinary nature and (y) the shareholders' meeting of Olimpia; and o approval and amendments of the budget of Telco. (Page 13 of 23) DEADLOCK The Shareholders' Agreement contains provisions on the resolution of deadlocks at the level of the board of directors and shareholders' meetings of Telco with regard to the following matters: a) at the level of Telco board of directors: (i) acquisition, disposal and encumbrance of Olimpia or Telecom Italia's shares, (ii) decision on the vote to be exercised in the extraordinary shareholders' meeting of Telecom Italia to approve resolutions on transactions of extraordinary nature and (iii) decision on the vote to be exercised in the shareholders' meeting of Olimpia; and b) at the level of Telco shareholders' meeting, matters pertaining to the extraordinary shareholders' meeting of Telco; In case of deadlock with regard to the matters referred to above under letters a) and b) the Investors shall try to find an amicable compromise failing which a new meeting shall be convened and at such meeting the decision will be passed with a simple majority, provided however that dissenting shareholder(s) shall have the right to request the demerger of its stake in Telco and the pro quota assignment of Telco assets and liabilities. CALL OPTION In the event that a decision to dispose, directly or indirectly, in any form or manner (including through measures with equivalent effect, such as mergers and demergers of Telco or Olimpia) or encumber Telecom Shares or Olimpia Shares or any rights attached thereto, including but not limited to voting rights, is taken by the board of directors of Telco by simple majority and Telefonica is the dissenting party, then Telefonica shall have the right to buy from Telco or Olimpia, as the case may be, the Olimpia or Telecom Shares at the same price and conditions offered by the third party offering to acquire such Telecom Shares or Olimpia Shares or the right to proceed with the demerger. RESTRICTIONS ON TRANSFERS OF TELCO SHARES Transfer of Class A and Class B shares to potential third party acquirers, including shareholder of Telco are subject to pre-emptive rights of the other Investors, upon the terms and conditions and pursuant to the procedures set forth in the Shareholders' Agreement. The Shareholders' Agreement contains co-sale rights whereby if one or more Investors intend to transfer a number of shares representing more that 30% of the aggregate share capital of Telco, the other Investors, upon the terms and conditions included thereof, will have the right to transfer their Telco shares in the same proportion to the purchaser. PROVISIONS RELATING TO TELECOM ITALIA The board of directors of Telco or Olimpia, as the case may be, shall approve the list of candidates to be submitted to the shareholders' meeting of Telecom Italia for the appointment of the directors of Telecom Italia pursuant to the following criteria: (i) Telefonica, to the extent (Page 14 of 23) holding at least 30% of Telco's share capital, shall have the right vis-a-vis the other Investors to designate two directors of Telecom Italia (x) to be included as designees for appointment in the board of Telecom Italia in the list presented by Olimpia or Telco, as the case may be, and (y) to the extent feasible, the replacement of directors pursuant to Article 2386, first paragraph, of the Italian Civil Code; and (ii) the Italian Investors which are a party to the Shareholders' Agreement, to the extent holding at least 50% plus one share of Telco's share capital, shall designate the other members of the list as follows: (x) three members unanimously and (y) the remaining members on a proportional basis as set out in the Shareholders' Agreement. The directors designated by Telefonica in Telco, Olimpia and Telecom Italia shall be directed by Telefonica to neither participate, nor vote at the board of directors meetings (and Telefonica, to the extent applicable, shall neither attend nor vote, at any shareholders' meetings of Telco or the entity resulting from the merger of Olimpia with Telco, as the case may be) at which there will be discussed and proposed resolutions relating to the policies, management, and operations of companies directly or indirectly controlled by Telecom Italia providing their services in countries where regulatory and legal restrictions or limitations for the exercise of voting rights by Telefonica (as indirect and ultimate shareholder of such companies) are in force. In the event of (i) any transfer in whatever form of any of the foreign assets held directly or indirectly by Telecom Italia having a value of more than euro 4 billion per transaction, or series of transactions occurring within a period of 12 months for the same assets, or (ii) Telecom Italia entering into a significant strategic alliance with any "Telecom Operator" (to be construed as to include any person, company or entity operating in the telecom sector and any person, company or entity holding (a) a controlling stake in any non-listed company operating in the telecom sector or (b) a stake in a listed company operating in the telecom sector which exceeds 10% of the share capital or which, even though is below 10% of the share capital, enables the holder to appoint one or more members of the board of directors of the listed company), then Telefonica, within the following thirty calendar days, will have the right to deliver notice to the other Investors, which will cause the Investors to implement, adopt and vote, and cause their directors designated by them to implement adopt and vote, all and any actions, documents and resolutions necessary to complete a de-merger within a reasonably short time period, but in any case no later than 6 months following such notice or, if the transaction is subject to any authorizations by law or contract, within 6 months following the obtaining of such authorizations. The Investors agreed not to execute or take part, directly or indirectly, in any agreement whatsoever concerning Telecom Shares that may cause the holding by the Investors, Telco and their respective affiliates, taken as a whole, of a number of Telecom Italia voting shares exceeding 30% of the total voting share capital of Telecom Italia. TERM OF THE SHAREHOLDERS' AGREEMENT The Shareholders' Agreement will last three years, at the end of which, without prejudice to renewal, each shareholder, provided that it has submitted such request no later than 6 months prior to the expiry date, may obtain the de-merger of its stake in Telco and the pro quota assignment of Telco assets and liabilities. The exiting shareholder(s) shall be permitted, to the (Page 15 of 23) extent the remaining shareholders decide to execute a new shareholders' agreement, to take part to and execute such new shareholders' agreement, provided such existing shareholders contribute their existing shares. AMENDMENT Pursuant to the Amendment, the Investors acknowledged the content of the Announcement and each of the Investors undertook to implement the content thereof through appropriate actions. The preceding summary of certain material provisions of the Amendment does not purport to be a full and complete description of such document and is entirely qualified by reference to the full text of such document filed as Exhibit 92 hereto. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 92: Amendment to the Co-Investment Agreement and the Shareholders' Agreement, dated October 25, 2007, by and among Generali, Intesa Sanpaolo, Mediobanca, Sintonia S.A. and Telefonica. Exhibit 93: By-laws of Olimpia S.p.A. (unofficial English translation). Exhibit 94: The Announcement of the Board of Commissioners of the Brazilian National Telecommunications Agency (Anatel) related to the Transaction, dated October 23, 2007 (unofficial English translation). Exhibit 95: Joint Press Release announcing the closing of the Transaction, dated October 25, 2007, issued by Generali, Intesa Sanpaolo, Mediobanca, Sintonia S.A. and Telefonica. Exhibit 96: By-laws of Telco S.p.A. (unofficial English translation). (Page 16 of 23) SIGNATURE After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: October 31, 2007 SINTONIA S.p.A. By: /s/ Gianni Mion ------------------------- Name: Gianni Mion Title: Director (Page 17 of 23) SIGNATURE After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: October 31, 2007 SINTONIA S.A. By: /s/ Gustave Stoffel ------------------------- Name: Gustave Stoffel Title: Director (Page 18 of 23) SIGNATURE After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: October 31, 2007 RAGIONE S.a.p.a DI GILBERTO BENETTON E C. By: /s/ Gilberto Benetton ------------------------- Name: Gilberto Benetton Title: Chairman (Page 19 of 23) ANNEX A-1 DIRECTORS AND EXECUTIVE OFFICERS OF SINTONIA S.P.A. The name, title, present principal occupation or employment of each of the directors and executive officers of Sintonia S.p.A. are set forth below. The business address of each director and executive officer is Sintonia S.p.A.'s address. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to Sintonia S.p.A. Unless otherwise indicated below, all of the persons listed below are citizens of the Republic of Italy.
========================================================================================================== PRESENT PRINCIPAL OCCUPATION NAME AND POSITION WITH (IF DIFFERENT FROM POSITION WITH TELECOM SHARES SURNAME SINTONIA S.P.A. SINTONIA S.P.A.) BENEFICIALLY OWNED ========================================================================================================== Gilberto Benetton Chairman Executive 1,946,250 ========================================================================================================== Gianni Mion Managing Director Executive 27,000 ========================================================================================================== Sergio Simoi Director Consultant - ==========================================================================================================
(Page 20 of 23) ANNEX A-2 DIRECTORS AND EXECUTIVE OFFICERS OF SINTONIA S.A. The name, title, present principal occupation or employment of each of the directors and executive officers of Sintonia S.A. are set forth below. The business address of each director and executive officer is Sintonia S.A.'s address. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to Sintonia S.A. Unless otherwise indicated below, all of the persons listed below are citizens of the Republic of Italy.
=================================================================================================================== PRESENT PRINCIPAL OCCUPATION NAME AND SURNAME POSITION WITH (IF DIFFERENT FROM CITIZENSHIP IF TELECOM SHARES SINTONIA S.A. POSITION WITH OTHER THAN BENEFICIALLY OWNED SINTONIA S.A.) ITALIAN =================================================================================================================== Jean Hoss Chairman Lawyer Luxembourg - =================================================================================================================== Carlo Bertazzo Director Manager - =================================================================================================================== Sergio De Simoi Director Consultant - =================================================================================================================== Giancarlo Olgiati Director Lawyer Swiss - =================================================================================================================== Gianni Mion Director Executive 27,000 =================================================================================================================== Roberto Savini Director Consultant - =================================================================================================================== Gustave Stoffel Director Luxembourg - =================================================================================================================== Alex Sulkowski Director Consultant Luxembourg - ===================================================================================================================
(Page 21 of 23) ANNEX A-3 DIRECTORS AND EXECUTIVE OFFICERS OF RAGIONE The name, title, present principal occupation or employment of each of the directors and executive officers of Ragione are set forth below. The business address of each director and executive officer is Ragione's address. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to Ragione. Unless otherwise indicated below, all of the persons listed below are citizens of the Republic of Italy.
=================================================================================================================== NAME AND PRESENT PRINCIPAL OCCUPATION TELECOM SHARES SURNAME POSITION WITH RAGIONE (IF DIFFERENT FROM POSITION WITH RAGIONE) BENEFICIALLY OWNED =================================================================================================================== Gilberto Benetton Chairman Executive 1,946,250 =================================================================================================================== Carlo Benetton Deputy Chairman Executive - =================================================================================================================== Luciano Benetton General Partner Executive - =================================================================================================================== Giuliana Benetton General Partner Executive - ===================================================================================================================
(Page 22 of 23) EXHIBIT INDEX EXHIBIT NO. - ----------- 99.85 Co-Investment Agreement, dated as of April 28, 2007, by and among Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and Telefonica.* 99.86 Draft by-laws of Telco S.p.A. (Annex C to the Co-Investment Agreement).* 99.87 Shareholders' Agreement, dated as of April 28, 2007, by and among Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and Telefonica.* 99.88 Joint press release, dated April 28, 2007, issued by Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and Telefonica.* 99.89 Joint press release requested by Consob (the Italian financial market authority), dated May 2, 2007, issued by Generali, Intesa Sanpaolo, Mediobanca, the Sintonia Buyer and Telefonica.* 99.90 Share Purchase Agreement, dated May 4, 2007, by and among the Investors, Pirelli and the Sintonia Sellers.* 99.91 Joint press release, dated April 28, 2007, issued by Pirelli and the Sintonia Sellers.* 99.92 Amendment to the Co-Investment Agreement and the Shareholders' Agreement, dated October 25, 2007, by and among Generali, Intesa Sanpaolo, Mediobanca, Sintonia S.A. and Telefonica. 99.93 By-laws of Olimpia S.p.A. (unofficial English translation). 99.94 The Announcement of the Board of Commissioners of the Brazilian National Telecommunications Agency (Anatel) related to the Transaction, dated October 23, 2007 (unofficial English translation). 99.95 Joint Press Release announcing the closing of the Transaction, dated October 25, 2007, issued by Generali, Intesa Sanpaolo, Mediobanca, Sintonia S.A. and Telefonica. 99.96 By-laws of Telco S.p.A. (unofficial English translation). * Previously filed. (Page 23 of 23) EX-99.92 2 c50978_ex99-92.txt EXHIBIT 99.92 AMENDMENT TO THE CO-INVESTMENT AGREEMENT AND SHAREHOLDERS AGREEMENT This agreement is entered into on 25 October, 2007 BY AND BETWEEN TELEFONICA, S.A., a Spanish company with registered office at 28013, Madrid, Gran Via n. 28, Spain ("TE"); ASSICURAZIONI GENERALI S.p.A., an Italian company with registered office at Piazza Duca degli Abruzzi n. 2, Trieste, Italy, Alleanza Assicurazioni S.p.A., an Italian company with registered office at Milano, viale Luigi Sturzo n. 35; INA Assitalia S.p.A., an Italian company with registered office at Roma, Corso d'Italia n. 33; Volksfursorge Deutsche Lebenversicherung A.G., a German company with registered office at Hamburg (Germany), an der Alster n. 57-63; Generali Vie S.A., a French Company with registered office at Paris , Boulevard Hausmann n. 11; (collectively "AG", and all such companies, other than ASSICURAZIONI GENERALI S.p.A., hereinafter the "OTHER COMPANIES OF THE GENERALI GROUP"); SINTONIA S.A., a Luxembourg company with registered office at 1, Place d'Armes, L. 1136 Luxembourg ("SI"); INTESA SANPAOLO S.p.A, an Italian company with registered office at Piazza San Carlo n. 156, Torino, Italy ("IS"); MEDIOBANCA S.p.A., an Italian company with registered office at Piazzetta Cuccia n. 1, Milano, Italy ("MB"); (collectively the "PARTIES" and each, individually, a "PARTY") WHEREAS 1. With an agreement dated April 28, 2007 (the "CO-INVESTMENT AGREEMENT"), basically the Parties established the terms and conditions for (i) their participation into Centrotrenta 4/6 S.r.l, an Italian company with registered office at Galleria del Corso 2, Milan, Italy, fiscal code n. 05277610969, to be subsequently transformed and renamed as Telco S.p.A. ("TELCO" or "NEWCO"), and (ii) the presentation by the Parties also on behalf of Newco of an offer (the "OFFER") for the acquisition by Newco from Pirelli&Co. S.p.A and Sintonia S.p.A. and Sintonia S.A. of 100% of the share capital of an holding company named Olimpia S.p.A ("O"), which in turn holds a stake of 17,99% of the ordinary share capital of Telecom Italia S.p.A. ("TI") and the capitalization and funding of Newco including the contribution to Telco of 5,6% of the ordinary share capital of TI, MB and AG (the "ACQUISITION"). In accordance with such Offer, the Parties and Pirelli&Co. S.p.A and Sintonia S.p.A. and Sintonia S.A.entered into a Stock Sale Purchase Agreement on May 4th, , 2007 (the "SPA"). 2. The Parties entered into a Shareholders Agreement on April 28, 2007, by means of which basically they established the principles relating INTER ALIA to (i) the corporate governance of Newco, (ii) the governance of O, (iii) the appointment of directors in TI and (iv) the transfer of the Newco's shares and the O and TI's shares directly or indirectly owned by Newco (the "SHAREHOLDERS AGREEMENT"). 3. On 23 October 2007, the Brazilian telecommunications regulator ("ANATEL") published in its website a press release informing the approval of the Acquisition with the request of fulfillment of certain actions aimed at ensuring that the Brazilian activities of the Telefonica Group and the Telecom Italia Group remain separate (the "ANATEL APPROVAL"). 4. The Parties wish to enter into this amendment to the Co-investment Agreement and Shareholders Agreement, so as to amend certain provisions in order to clarify their application. Now, therefore, in consideration of the foregoing premises the Parties hereby AGREE AND CONVENANT as follows: 1. Unless differently stated herein, terms in capital letters used in this Second Amendment to the Co-Investment Agreement and the Shareholders' Agreement shall have the same meaning as defined in the Co-Investment Agreement, the Shareholders' Agreement on in the SPA, as the case may be. 2. The Parties hereby agree to amend the Co-investment Agreement by providing that the transformation of Telco into a SOCIETA PER AZIONI shall occur at Closing, provided that Telco will be liquidated and each Party (without prejudice of any other rights it may have under the Co-investment Agreement in the event of any = breach by any Party) shall receive back all its respective contributions, net of any expenses occurred and taxes paid, should, for any reasons (i) the Acquisition not be completed within 195 days following the execution of the SPA or (ii) transformation not be registered, within 5 days from payment of the Share Capital Increases. It is hereby agreed and understood that the Parties shall in any case act in full respect of the Shareholders Agreement pending the registration of the transformation. 3. The Parties hereby agree to amend the Co-investment Agreement and the Shareholders Agreement, by providing that: (i) the AG portion of the First Share Capital Increase shall be resolved for the benefit of and subscribed by AG and the Other Companies of the Generali Group as specified in ANNEX A, provided that, in case of subsequent change of control of any of said Other Companies of the Generali Group, the Telco shares held by it shall be transferred to AG before such change of control occurs. Each of the Other Companies of the Generali Group hereby adheres to Co-Investment Agreement and to the Shareholders Agreement, both as amended and restated, and to the SPA.; (ii) AG shall ensure that AG and the other companies of the Generali Group becoming shareholders of Telco in accordance with point 3(i) above shall act as a single Party vis-a-vis the other Parties and fulfill all their obligations in accordance with the Co-Investment Agreement and with the Shareholders Agreement, both as amended and restated, and with the SPA; PROVIDED THAT, AG will be jointly and severally responsible for any breach of such obligations - excluding the obligations already fulfilled at Closing - by any of the Other Companies of the Generali Group; (iii) any references to AG in the Co-investment Agreement and the Shareholders Agreement, shall be deemed as made to AG and the other companies of the Generali Group for the respective percentages and, where appropriate, as a single contractual Party ("UNICA PARTE COMPLESSA"). (iv) any notices to AG and the other companies of the Generali Group becoming shareholders of Telco in accordance with point 1(i) shall be made by each of the Parties directly to AG also on behalf of such other companies of the Generali Group. 4. The Parties hereby agree to amend the Shareholders Agreement, by adding the following provision at the bottom of the Clause 8.7: "Without prejudice to the Standstill provision contemplated in Clause 7, which, in any case, remains in full force and effect, it is agreed and understood that this Clause 8.7 shall not apply to any transactions on TI shares falling in the scope of investment services - as defined by article 1, paragraph 5, letters (b) to (e) of Legislative Decree no. 58/1998 - supplied by MB, AG, IS and, if any, by SI and/or any company of their respective groups to a Telecom Operator in the ordinary course of business, provided that the relevant transaction does not involve TI Voting Shares in excess of 2% of TI Voting Share Capital." 5. The Parties acknowledge the content of the ANATEL Approval (a copy of which is attached hereto) and each of the Parties undertakes, for so long as it lies within its respective powers, to implement the content thereof through appropriate legal instruments and actions. 6. Except as provided above, all the other provisions, terms and conditions set forth in the Shareholders Agreement and the Co-Investment Agreement shall remain unchanged and are hereby expressly ratified and confirmed by the Parties. * * * * * TELEFONICA, S.A. - ----------------- ASSICURAZIONI GENERALI S.p.A. - ----------------- Alleanza Assicurazioni S.p.A. - ----------------- INA Assitalia S.p.A. - ----------------- Volksfursorge Deutsche Lebenversicherung A.G. - ----------------- Generali Vie S.A. - ----------------- SINTONIA S.A. - ----------------- INTESA SANPAOLO S.p.A. - ----------------- MEDIOBANCA S.p.A. - ----------------- EX-99.93 3 c50978_ex99-93.txt EXHIBIT 99.93 CORPORATE BY-LAWS ARTICLE 1 NAME OF THE CORPORATION A Corporation has been formed, called Olimpia S.p.A. ARTICLE 2 OBJECT OF THE CORPORATION The object of the Corporation is the participation in, the financing of, the cooperation with, the management of, and the rendering of consulting services and other services to legal persons or other companies, among which in particular, those having as their object the development, implementation, and management of telecommunications systems in general of any type, including broad band, data and video transmission, domestic and international telephone services, e-business and media activities, telephone directory activities, advertising development, and television. In order to reach the aforementioned objective, the Corporation may perform all the financial, industrial, commercial and real estate transactions which are deemed by the Board of Directors to be necessary or useful in order to reach the objective of the Corporation. The Corporation may also grant promissory notes, pledges, and any other type of guarantees, including real estate guarantees, to third parties. However, the Corporation is excluded from conducting activities which are expressly reserved by law to special categories of companies. ARTICLE 3 REGISTERED OFFICE The Corporation's registered office is in Milan. The Board of Directors may relocate the Corporation's registered office within the national territory and may open or close secondary offices, branches and agencies, in the manner required by law, both in Italy and abroad. The domicile of the Shareholders is understood to be, in accordance with the law, the domicile that is registered in the register of Shareholders. ARTICLE 4 TERM The term of the Corporation has been established up to 12/31/2050 (December thirty-first, two thousand fifty) and may be extended in accordance with the law. The extension of the term of the Corporation does not grant a right of withdrawal to the Shareholders who did not participate in the approval of the relevant resolution. ARTICLE 5 CORPORATE CAPITAL The Corporate Capital is Euro 4,306,377,518 (four billion, three hundred and sixmillion, three hundred and seventy-seven thousand and five hundred and eighteen) Euros divided into n. 4,630,233,510 (four billion, six hundred and thirty million, two hundred and thirty-three thousand and five hundred and ten) Shares, with no nominal value. The Corporate Capital may be increased with the contribution of capital in kind or credit. The introduction or removal of constraints on the circulation of shares does not grant a right of withdrawal to the Shareholders who did not participate in the approval of the relevant resolution. The Corporation may satisfy its own financial needs by taking advantage of financing on the part of its stockholders, within the limits and under the conditions established by current law and the current regulations governing such transactions. ARTICLE 6 SHARES (THE RIGHT OF PREEMPTION) 6.1 Shareholders who wish to move their stock in any manner, this being understood as selling the stock for cash, transferring it, giving it as a gift, or donating it, or any other type of transaction that leads to the direct or indirect transfer, to third parties or to other stockholders, of the Corporation's stock, of bonds which may be converted into stock and/or rights to underwrite stock, or real rights for the use of the stock and/or guarantees relating to the aforementioned stock and convertible bonds, or any other rights relating to the aforementioned Shares of stock or convertible bonds (hereinafter referred to as the "Rights"), must first offer the right of preemption for the Rights to all other stockholders, under the same conditions, in proportion to the Shares held by each of them in the Corporation, notwithstanding the right to increase the Share base enjoyed by each Shareholder. 6.2 The right of preemption must be exercised in accordance with the following terms and conditions: (i) A Shareholder (hereinafter referred to as the "Party Making the Offer") who intends to proceed with the sale of the Rights that he holds will be obligated to offer them preemptively to other Shareholders, through registered letter with return receipt required, containing the identity of the proposed buyer, the price, and the other conditions of sale, in addition to the warning that in the event that one of the Shareholders does not wish or is not able to exercise the right of preemption, the Rights pertaining to this Shareholder will automatically increase proportionally in favor of those Shareholders who instead, intend to take advantage of this opportunity and who have not previously expressly waived the right of preemption that they hold. 2 (ii) The right of preemption may be exercised through a communication sent by registered mail with return receipt required, sent to the Party Making the Offer and to each of the Shareholders within the term, established for its expiration, of forty-five (45) calendar days from the receipt of the offer discussed in point (i) above, it being understood that, if express waiver is not made, this right of preemption shall be understood as automatically exercised also in respect to the Rights that have increased proportionally for each Shareholder as a result of the failure to exercise the right of preemption on the part of one or more Shareholders holding this right. (iii) In the event that the right of preemption is not exercised within the terms indicated above in respect to all the Rights offered, the Party Making the Offer, in the event that he does not wish to accept the exercising of the right of preemption limited to only a part of the Rights offered for sale, may transfer all the Rights to the buyer indicated in the offer discussed in point (i) above, in terms which are no more favorable for that buyer than the terms stipulated in the aforementioned offer, within ninety (90) days from the expiration of the aforementioned term established in point (ii) above, or, in the event that the Party Making the Offer decides to accept the exercising of the right of preemption limited to only a part of the Rights offered for sale, he may, within the same term of ninety (90) days, transfer the remaining Rights of preemption to the buyer indicated in the offer discussed in point (i) above, in accordance with the conditions that shall be agreed upon with this buyer. In the event that the sale is not concluded within the term indicated, the Party Making the Offer must again satisfy the conditions established in this section. (iv) In the event that the Party Making the Offer intends to sell his own Shares through a counter-offer in kind, the Shareholders who intend to exercise their right of preemption must indicate within the term established in section (ii) above, whether they intend to accept the counter-offer in kind or for the equivalent in cash, and, in the latter case, the purchase price shall be determined by common agreement or in accordance with Article 1473 of the Civil Code. 6.3 The regulations established above also apply to any other action or negotiation, of any nature, including gifts, which involves the transfer, in any manner whatsoever, of the Rights enjoyed by the Shareholders, it being understood that the stipulations established in section 6.1 above shall be applicable even when there is no notification, no offer, or no determination of a price in cash for the purposes of this offer, and in this case, the purchase price shall be determined by common agreement or in accordance with Article 1473 of the Civil Code. 6.4 Notwithstanding the stipulations established in sections 6.1 and 6.2, the transfer of any real rights of use of the Shares in an agreement established between living entities shall be admitted only on the condition that this transfer does not involve in any manner the loss of voting rights on the part of the parties involved. 6.5 The transfer of any real rights guaranteed on the Shares shall not be allowed and shall not be valid in respect to the Corporation if it has not been previously approved unanimously by the other Shareholder(s). 3 6.6 Notwithstanding the points established in the above sections, the Rights may be transferred, in whole or in part, by Shareholders to companies that hold the entire Corporate Capital of the stockholder making the transfer or to companies of which the Shareholder making the transfer holds the entire Corporate Capital, on the following conditions: (i) the Shareholder making the transfer provides at least 15 days notice prior to the transfer to the other Shareholders, in accordance with the provisions of section 6.1, (ii) the acquiring company succeeds to all of the obligations assumed by the selling Shareholder with respect to the other Shareholders, (iii) the transferring Shareholder and the acquiring company commit themselves to reacquire and retransfer, respectively, full title of the Rights transferred before proceeding with transactions that would affect the aforementioned legal ownership. ARTICLE 7 SHARES (CO-SALE) (a) In the event that a Shareholder who holds Shares that represent an absolute majority (50.01%) of the Corporate Capital (hereinafter referred to as the "Majority Shareholder") intends to conduct transactions that lead to the transfer to a third party or another Shareholder (hereinafter referred to as the "Buyer") of all his Shares or a part of these, the other Shareholder(s) (hereinafter referred to as the "Minority Shareholders"), in the event that they do not wish to exercise their right of preemption as established in Article 6 above, shall have the right to transfer to the same Buyer and under the same terms and conditions: (i) the part of their own Shares proportional to the number of Shares that the Majority Shareholder shall offer for sale, when the Majority Shareholder, as a result of the aforementioned transaction(s), remains the bearer of an absolute majority of the Corporate Capital (50.01%); and (ii) in the event of the sale of all the Shares held by the Majority Shareholder or the transfer of a sufficient number of Shares that the Majority Shareholder comes to hold, as a result of the transfer, less than an absolute majority of the Corporate Capital (50.01%), the Minority Shareholders shall have the right and the obligation to transfer all their Shares together with those of the Majority Shareholder. (b) To these effects, the Majority Shareholder who intends to proceed with the sale of Shares that he holds, shall be obligated to provide written communication by registered letter with return receipt required, to the Minority Shareholders, also informing them of the identity of the Buyer, the number of Shares offered for sale, the price and the other conditions of sale. (c) In the event that the Minority Shareholders wish to exercise the right established herein in their favor, they must inform the Majority Shareholder, by registered letter with return receipt required, in the term of fifteen (15) calendar days from the receipt of the communication discussed in point (b) above; and if they do not do so within that term this right shall expire. 4 (d) In the event that the object of the sale should be all the Shares held by the Majority Shareholder or a sufficient number of Shares that the Majority Shareholder comes to hold, as a result of the transfer, less than an absolute majority of the Corporate Capital, the Minority Shareholders shall have the obligation to transfer all their Shares under the same terms and conditions proposed by the Buyer to the Majority Shareholder. (e) In the event that the Buyer does not intend to purchase the Shares held by the Minority Shareholders, the Majority Shareholder may not proceed with the sale. ARTICLE 8 SHARES HELD BY THE CORPORATION - CATEGORIES OF BOND LOANS - FINANCIAL INSTRUMENTS The Corporation may proceed to purchase its own Shares in accordance with the stipulations established by civil regulations governing the matter. The Corporation may issue bearer or registered bonds, convertible bonds or bonds with warrants, and warrants in accordance with regulations governing the matter. The Corporation may also issue other categories of Shares, even Shares without voting rights, and financial instruments, in accordance with regulations governing the matter. ARTICLE 9 ASSEMBLY OF THE SHAREHOLDERS A regularly constituted Assembly represents all the Shareholders and the resolutions passed at such meetings made in accordance with the law, and the present Corporate By-Laws shall be binding on all Shareholders. The Assembly shall be convened at the Corporation's headquarters or elsewhere, as long as it takes place in Italy or in another country of the European Union. The Assembly is convened by means of an announcement indicating the date, time and location of the meeting, a list of the topics to be addressed and, if applicable, instructions for participation via audio or video conference. The meeting announcement must be published in the GAZZETTA UFFICIALE DELLA REPUBBLICA ITALIANA or in the daily newspaper IL SOLE 24 ORE at least 15 days prior to the date scheduled for the meeting. Alternatively, at the election of the Board of Directors, the meeting may be announced by means of a registered letter with return receipt required, email or fax, in accordance with the law. The meeting announcement may also establish meetings that subsequent to the first meeting. The Assembly for the approval of the balance sheet must be called within 120 days, or, in accordance with the law, within 180 days of the end of the fiscal period. In the event that 5 the meeting is called within 180 days, the Board of Directors must indicate the reasons for the delay in the report on management footnoted the balance sheet. The Assembly shall also be convened by the Chairman of the Board when a request has been made by a majority of the Board Members, or by enough Shareholders to represent at least 1/10 (one tenth) of the Corporate Capital. The Assembly may grant the Board of Directors the right to increase the Corporate Capital, in the manner and in accordance with the terms established by Article 2443 of the Civil Code. Ordinary and Extraordinary Assemblies are valid and duly convened if the participants are located in different locations connected by audio or video if the following conditions are met: o the person presiding over the meeting is able to ascertain the identity and legitimacy of the participants, regulate the carrying out of the meeting, verify and declare the results of the voting; o the person taking minutes of the Assembly is able to perceive the meeting's events that are subject of the minutes; o the participants are able to participate simultaneously in the discussion and voting in the topics addressed during the Assembly; and o unless the Assembly is a totalitarian Assembly, the meeting announcement indicates the audio/video locations that are arranged by the Corporation, from which participants may participate in the Assembly, such meeting to be considered to be located in the place where the person presiding over and the person taking minutes of the Assembly are located. ARTICLE 10 PARTICIPATION IN THE ASSEMBLY Participation in the Assembly is governed by the stipulations of law on the matter. Every Shareholder who deposited his share certificates in the manner indicated in the meeting announcement no less than five days before the date of the shareholders meeting may participate in the meeting. Every Shareholder that has the right to participate in the Assembly may be represented by another person, even if this person is not a Shareholder himself or herself, through the conferral of a written proxy, with the limitations established by law. 6 ARTICLE 11 PROXIES - PRESIDING OVER THE ASSEMBLY The Assembly shall be presided over by the Chairman of the Board of Directors, or, in the event of the absence or unavailability of the Chairman, by the Vice-Chairman or any other Board Member named by the Board of Directors itself; if this is not possible, the Assembly shall be presided over by the person named by a majority of the votes of the Shareholders present. A Secretary named by the Assembly shall assist the person who presides over the Assembly. The attendance of a Secretary shall not be necessary. ARTICLE 12 CONSTITUTION OF THE ASSEMBLY AND VALIDITY OF DECISIONS An Ordinary Assembly shall be considered regularly constituted and shall make decisions with the majorities established in accordance with the law. An Extraordinary Assembly shall be regularly constituted and shall make decisions with the favorable votes of as many Shareholders necessary to represent at least 81% of the Corporate Capital. Such quorum is also applicable to resolutions modifying or eliminating the list voting provision for the nomination of the Members of the Board of Directors, as well as a modification of the number of the Members of the Board of Directors and modification of this paragraph. In the absence of formal convocation, the Assembly will be considered duly constituted if the entire Corporate Capital of the Corporation is represented and the majority of the Members of each of the Board of Directors and Board of Auditors is in attendance. ARTICLE 13 LIST VOTING Notwithstanding the provisions established in Article 12 for the Ordinary Assembly, the naming of Members of the Board of Directors shall occur on the basis of lists presented by the Shareholders (each Shareholder shall be allowed to present only one list) in which the candidates must be listed in progressive number. Each candidate may appear in only one list or else he shall be declared ineligible. The candidates on each list presented shall be assigned a percentage equal to the number of votes obtained by the list divided by one for the first candidate, two for the second candidate, three for the third candidate, and so on. The candidates from all the lists shall be arranged in a list in descending order according to the percentage of votes obtained by each of them. Within the limit of the number of Board Members, the winners of the election will be those who obtained the highest percentage of votes. In the event of a tie in percentage for the last Board Member to be elected, the one from the list that obtained the highest number of votes shall be given preference, and, in the event of an equal number of votes, the one who is oldest shall be given preference. In the event that, as a result of the computation provided in the first paragraph of this Article 13, more than one half of the Members of the Board of Directors is drawn from a single list, only half of the members of the Board of Directors will be selected from such list to proceed to nomination, with the remaining nominations to be selected in 7 accordance with the classification obtained in the application of the above described procedure. In the event that no list is presented or the entire Corporate Capital is held by a single Shareholder, the nomination of the Board of Directors shall be decided by the Assembly in accordance with the law. ARTICLE 14 THE BOARD OF DIRECTORS The Corporation shall be managed by a Board of Directors composed of 10 (ten) Members, even those who are not Shareholders, named by applying the list votingclause established in Article 13. The Board may name one or more Alternate Board Members and an Executive Committee composed of at least three Members, one of which shall be the Alternate Chairman, if so named. They shall remain in office for a term of three years and they also may be re-elected. ARTICLE 15 MANAGEMENT OF THE CORPORATION (THE CHAIRMAN AND THE VICE-CHAIRMAN) Each time that it is renewed, the Board shall elect a Chairman from among its Members, if this person is not named by the Assembly. The Board shall also name a Vice-Chairman. ARTICLE 16 MANAGEMENT OF THE CORPORATION (CONVOCATION OF THE BOARD OF DIRECTORS) The Board of Directors shall be convened at the registered office of the Corporation or elsewhere, as long as it is in the territory of the Republic of Italy, by the Chairman of the Board or, in his absence or unavailability, by the Vice-Chairman, on his own initiative or at the request of at least two Members of the Board. Communication to Board Members shall be done by registered letter, or, in the event of urgency, by telegram, telex, fax, or any other means of which receipt can be proven, sent respectively at least five days or at least 24 hours before the meeting, and in cases of extraordinary urgency - to be proven by the person convening the Board of Directors - 6 hours before the meeting. The Chairman shall arrange for the Members of Board of Directors to be provided with adequate information regarding the items on the agenda, taking into account the circumstances. 8 ARTICLE 17 MANAGEMENT OF THE CORPORATION (VALIDITY OF DECISIONS MADE) In order for decisions made by the Board to be valid, the presence of a majority of current Board Members is required. The Board of Directors may validly deliberate, even in the absence of a formal meeting, if all of its Members and all of the Members of the Board of Auditors are present. The meetings of the Board shall be presided over by the Chairman or, in the event of absence, by the Vice-Chairman. The decisions of the Board shall appear in the minutes signed by the Chairman of the Board and the Secretary, who may also be chosen from among persons who are not on the Board. The decisions of the Board shall require an absolute majority of votes. The meetings of the Board of Directors may also be held in "teleconferences or videoconferences" or another "computer imaging system," as long as the fundamental rights of participation of every Member of the Board of Directors and the Board of Auditors are guaranteed, and on the condition that the Chairman and the Secretary are present in the same place, that it is possible to identify the participants, that each of them may participate at any time, and that each participant may receive, transmit, and see documents. ARTICLE 18 COMPENSATION FOR BOARD MEMBERS AND MEMBERS OF THE EXECUTIVE COMMITTEE The Members of the Board of Directors and the Members of the Executive Committee shall receive annual compensation, established by the Assembly for the entire term in which they remain in the position, in addition to reimbursement of expenses incurred as part of their position. For Board Members charged with particular duties, reference should be made to Article 2389, section 3 of the Civil Code. ARTICLE 19 MANAGEMENT OF THE CORPORATION (REPRESENTATION) The representation of the Corporation before third parties and in legal matters is the duty of the Chairman, and in the event of absence or unavailability, the Vice-Chairman, or the other Members of the Board of Directors for their special duties, with these persons having the right to grant powers to proxies and attorneys. ARTICLE 20 MANAGEMENT OF THE CORPORATION (POWERS) The Board of Directors shall have all the powers necessary for the ordinary management of the Corporation and those powers which, by law or Corporate By-Laws, are not reserved for the Assembly of Shareholders. Within the limits prescribed by law, the Board of Directors shall have the authority to issue non-convertible bonds, merge the Corporation into other entities that, prior to such 9 merger, own all of the shares of the Corporation, reduce the Corporate Capital of the Corporation in the event of withdrawal of the Shareholder, conform the Corporate By-laws to imperative provisions of law, and, as provided in Article 3 herein, relocate the Corporation's legal headquarters within the national territory and open or close secondary offices. ARTICLE 21 THE BOARD OF AUDITORS (COMPENSATION) The Assembly shall elect, with a majority of votes, a Board of Auditors composed of 3 (three) Auditors and 2 (two) alternates, operating in accordance with the law. The Auditors shall have a term of three years and may be re-elected. The Assembly that names the Auditors and the Chairman of the Board of Auditors shall determine the compensation due for the entire term of office. ARTICLE 22 OPERATION OF THE CORPORATION THE BALANCE SHEET The Fiscal Year of the Corporation will close on December 31 of every year. ARTICLE 23 PROFITS EARMARKING OF PROFITS The net profits appearing on the balance sheet which has been duly approved, after the deduction of the legal reserves until this figure reaches one fifth of the Corporate Capital, shall be distributed to the Shareholders, unless the Assembly makes a different decision. When the conditions of law so permit, the Corporation may distribute dividend accounts. ARTICLE 24 DISSOLUTION OF THE CORPORATION In the event of the dissolution of the Corporation at any time and for any reason, the Assembly shall determine the method of liquidation and shall name one or more liquidators, specifying their powers. ARTICLE 25 DIRECTION TO GENERAL STIPULATIONS For all those matters not expressly discussed in these Corporate By-Laws, reference should be made to the Civil Code and other laws currently in effect. 10 EX-99.94 4 c50978_ex99-94.txt EXHIBIT 99.94 The Board of Commissioners of the National Telecommunications Agency (Anatel) has decided today, October 23, 2007, in its 457th Meeting: a) To agree with the transfer of the indirect control of Telecom Italia S.p.A., indirect controlling entity of TIM Celular S.A. and TIM Nordeste S.A., to Telefonica S.A., Assicurazioni Generali S.p.A., Sintonia S.A., Intesa Sanpaolo S.p.A. and to Mediobanca S.p.A. - Banca di Credito Finanziario S.p.A., subject to the adoption of clauses in the corporate instruments that contemplate: 1. A prohibition to Telefonica S.A., in the General Shareholders' Meetings, and to the members appointed by Telefonica S.A. to the Boards of Directors, the Officers or any body with equivalent function, to participate in, vote on or veto in the deliberations of Telco S.p.A., Olimpia S.p.A., Telecom Italia S.p.A. or any other company directly or indirectly controlled by Telecom Italia S.p.A., subjects that deal with matters related to the activities of such companies in rendering telecommunication services in the Brazilian market; 1.1. The prohibition mentioned in item 1 above shall be expressly provided for with respect to the Class B shares, which are owned exclusively by Telefonica S.A. 2. A prohibition to Telefonica S.A. to appoint members to the Boards of Directors, the Officers, or any bodies with equivalent functions of the companies directly or indirectly controlled by Telecom Italia S.p.A., established in Brazil, that render telecommunication services in the Brazilian market and their controllers; 3. A prohibition in the relationships between the companies controlled by Telefonica S.A. and Telecom Italia S.p.A. that render telecommunication services in the Brazilian market, when established on terms other than those provided for in the Brazilian regulation of telecommunication services, as to: 3.1. significant financing operation, either passive or active, under any format; 3.2. the providing of guarantees, whether security interests, personal or any other kind; 3.3. the transfer of assets under conditions, terms or values other than those practiced in the market; 3.4. the transfer of strategic technological know-how; 3.5. the rendering of telecommunications or related services on favored or privileged terms; 3.6. operating agreement that stipulates favored or privileged terms; 3.7. the common use of resources, whether material, technological or human; 3.8. the joint contracting of goods or services; 3.9. the execution of any legal instrument having as its subject the transfer of shares between the operators or the assignment of a right of first refusal related to the reciprocal transfer of shares; 3.10. the adoption of a common brand, marketing or advertising strategy. 4. Maintenance, in case there is a de-merger of Telco S.p.A., as provided in item 1.2 or item 11 of its Shareholders' Agreement, of all the conditions imposed to Telefonica S.A. in relation to Telecom Italia S.p.A. and its controlled and controlling entities, as well as the prohibitions in the relationships between companies controlled by Telefonica S.A. and Telecom Italia S.p.A. that render telecommunication services in the Brazilian market. 5. Submission, for prior approval by Anatel, of a new formal legal instrument containing the same restrictions and prohibitions mentioned above, in case Telco S.p.A.'s Shareholders Agreement loses its validity, as well as in the case of a merger between Telco S.p.A. and Olimpia S.p.A. 6. A prohibition to Telefonica S.A. to exercise control, either direct or indirect, over any company of the TIM Group in Brazil, in the manner determined by specific regulation in force in this country, even if Telefonica S.A. exercises its purchase option in case of a unilateral withdrawal provoked by another shareholder company. 7. A determination that the preparers of the agendas for meetings of the Boards of Directors of Telco S.p.A., Olimpia S.p.A., Telecom Italia S.p.A. and Telecom Italia International N.V., their respective presidents, to separate the topics into separate agendas, being (i) one in which TE's participation, through the Board members that it appoints, is allowed, and (ii) another in which the participation of Board members appointed by TE is not allowed. In the meetings at which the participation of Board members appointed by TE is not allowed, the topics dealt with shall necessarily pertain to matters that deal with subjects related to the activities of the companies directly or indirectly controlled by Telecom Italia S.p.A., in rendering telecommunication services in the Brazilian market and to directly related topics, these latter being, necessarily, connected to the main topics as regards competition strategy, such as budgets for marketing campaigns and investment plans in product development, assets (LATO SENSU), instruments, all that, in sum, is directed towards the development of activities related to the activities of the companies directly or indirectly controlled by Telecom Italia S.p.A. in the rendering of telecommunication services in the Brazilian market. b) To order the companies of the TIM Group in Brazil, TIM Celular S.A. and TIM Nordeste S.A., to present to Anatel within thirty (30) days after the publication of the authorization Act, the corporate instruments that contain, unequivocally, the conditions established, as well as the adjustments arising from these conditions, under penalty of losing the effects of the authorization here proposed. c) To order the companies of the TIM Group in Brazil, TIM Celular S.A. and TIM Nordeste S.A., to forward, within thirty (30) days counted from the holding of the meetings of the Boards Directors of Telco S.p.A., Olimpia S.p.A., Telecom Italia S.p.A. or any other company directly or indirectly controlled by Telecom Italia S.p.A., a copy of the Agendas and of the Minutes, in Portuguese, of the meetings referred to in item 7 of point "a", above; d) To order that the Private Services Superintendency and the Public Services Superintendency jointly proceed with the analysis of the corporate instruments that unequivocally contemplate the conditions established, and submit it for approval by the Board of Commissioners. In addition, there is: a) established a period of six (6) months for the parties to submit for Anatel's approval changes in the present proposal that guarantee the total separation [DESVINCULACAO] between Vivo and TIM Brasil (Tim Celular S.A. and TIM Nordeste S.A.); b) established a period of six (6) months, after the analysis and acceptance of the proposal of change mentioned in item "a", above, for the parties to implement them; c) ordered that in this interim, the parties obey the proposed safeguards, as well as others that may be established by CADE, in analyzing the Act of Concentration prepared by this Agency. EX-99.95 5 c50978_ex99-95.txt EXHIBIT 99.95 Assicurazioni Generali S.p.A., Intesa Sanpaolo S.p.A., Mediobanca S.p.A., Sintonia S.A. comunicate that as of today Telco S.p.A. - a company participated by them together with Telefonica S.A. - has received 749,827,264 ordinary shares of Telecom Italia S.p.A., representing 5.6% of its share capital by means of contribution by Assicurazioni Generali S.p.A. and Mediobanca S.p.A. and purchased for a total price of Euro 4,161 million 100% of the Olimpia S.p.A. share capital, which in turn holds 2,407,345,359 ordinary shares of Telecom Italia S.p.A., representing 18% of its ordinary share capital. On October 23, 2007, ANATEL (the brazilian TLC Authority) has resolved to authorise the closing of the transaction, providing with regard to the Barsilian market certain measures to be implemented following completion of the acquisition. The contents of ANATEL resolution has been published on ANATEL's website www.anatel.gov.br. The acquisition of Olimpia S.p.A. has been funded, as to Euro 3,248 million by means of a share capital increase of Telco S.p.A. and as to the remaining part through a financing made available by Intesa Sanpaolo S.p.A. and Mediobanca S.p.A., for a maximum amount of Euro 1,100 million, which has been utilised as of today for an amount of approximately Euro 925 million. Telco S.p.A.'s shareholders meeting has also resolved a further capital increase up to Euro 900 million, to be used to reimburse the abovementioned financing and aimed at allowing the entrance into the shareholding of Telco S.p.A. of other qualified Italian investors. In addition, the following directors have been appointed to the board of Telco S.p.A.: Aldo Minucci (Chairman), Filippo Maria Bruno, Enrico Giliberti, Clemente Rebecchini, Gustave Stoffel, Maurizio Verbich, Angel Vila Boix, Ramiro Sanchez de Lerin Garcia-Ovies, Miguel Escrig Melia and Sohail Qadri. Finally the following directors have been appointed to the board of Olimpia S.p.A.: Aldo Minucci (Chairman), Filippo Maria Bruno, Enrico Giliberti, Giancarlo Olgiati, Clemente Rebecchini, Maurizio Verbich, Angel Vila Boix, Ramiro Sanchez de Lerin Garcia-Ovies, Miguel Escrig Melia and Sohail Qadri. EX-99.96 6 c50978_ex99-96.txt EXHIBIT 99.96 BY-LAWS ------- TITLE I NAME - REGISTERED OFFICE - PURPOSE - DURATION ARTICLE 1 --------- (NAME) 1.1 The name of the company shall be "TELCO S.P.A." (hereinafter "THE COMPANY"). ARTICLE 2 --------- (REGISTERED OFFICE) 2.1 The Company has its registered office in Milan. 2.2 Secondary offices, subsidiaries, branches, administrative and technical offices, representations, agencies, and dependencies of all types, can be established, transferred, and abolished - in Italy and abroad - by way of resolution of the Board of Directors; moreover, the transfer of the registered office of the Company within the territory of Italy can be decided by way of resolution of the Board of Directors. 2.3 The domicile of the shareholders, the directors, the auditors and accountant - - for their relations with the Company - is that shown in the Company books. ARTICLE 3 --------- (PURPOSE) 3.1 The Company has for its purpose: (a) The investment in, holding of, and disinvestment in shares, direct and indirect, in Telecom Italia S.p.A. or in other companies operating in the telecommunications sector, only with the purpose of stable investments and not vis-a-vis the public; (b) the management and coordination of the activities of the controlled companies; (c) the provision of services for and the management, without territorial limit, of licensed telecommunication services for public use and use in the free market, as well as corporate or administrative organizational services in the publishing, advertising, data processing, telecommunications and multimedia sectors for the benefit of the participated companies, excluding any activities reserved to directors and those persons enrolled on the professional register; (d) any other transaction or activity instrumental - and not prevalent - to the foregoing activities, including the grant of loans, issue of bank guarantees, sureties and endorsements in favour of subsidiaries, expressly excluding the exercise of these activities and of any other financial activity vis a vis the public and the exercise of qualified professional activities, the offering of securities to the public and the granting of consumer credit, including with regard to own shareholders, and in any event with the absolute exclusion of activities reserved under Laws 12/1979, 1966/1939, 1815/1939, and Legislative Decrees 385/1993 (Article 106) and 58/1998. ARTICLE 4 --------- (DURATION) 4.1 The term of the Company is fixed for a period ending on thirty-one (31) December (12) two thousand and fifty (2050). TITLE II CAPITAL - SHARES - WITHDRAWAL - BONDS - FINANCING ARTICLE 5 --------- (CAPITAL AND SHARES) 5.1 The share capital is equal to Euro 4,849,038,420.00 and is divided into 1,939,615,368 shares (hereinafter, the "SHARES"), with a nominal value of Euro 2.50 each, of which 1,119,046,300 Shares belong to Class A (hereinafter "CLASS A SHARES") and 820,569,068 Shares belong to Class B (hereinafter "CLASS B SHARES"); Class A Shares and Class B Shares confer upon their holders equal economic and administrative rights, except as indicated in this Article 5 and in Articles 7, 8, 15 and 22 of the By-laws. 5.2 The shareholders of the Company resolved, at the shareholders' meeting held on 25 October, 2007, to increase the share capital by a maximum nominal amount of Euro 889,328,065 through the issuance of a total maximum amount of 355,731,226 shares, of which 205,236,419 shares will be Class A Shares and 150,494,807 will be Class B Shares. As more specifically described in the applicable shareholders' resolution, the increase must be implemented according to the terms indicated for each tranche, in three tranches, of which the first will be in favour of the First Tranche Underwriters, the second will be in favour of the holders of Class A Shares and the third will be in favour of the holders of Class B Shares. 5.3 For the purposes of Article 5.2, "FIRST TRANCHE UNDERWRITES" means entities or persons, who are not Telephone Operators (as defined below), who are qualified primary Italian institutional investors or private persons or entities selected by the holders of Class A Shares and whose participation in the Company has been accepted by the holders of Class B Shares, such acceptance not to be unreasonably withheld. For the purposes of the By-laws, "TELEPHONIC OPERATORS" means entities or persons operating in the telecommunications sector and any entity or person that holds (a) a controlling interest in non-listed entities that operate in the telecommunications sector or (b) more than a 10% interest in the share capital of listed entities that operate in the telecommunications sector, or even if less than a 10% interest in the share capital is held, such holder has the ability to nominate one or more members of the Board of Directors of such listed entity. For the purposes of the By-laws, "CLASS A FOUNDING SHAREHOLDERS" means shareholders who are assignees of Class A Shares in the context of the conversion of the Company into a SOCIETA PER AZIONI as resolved during the shareholders' meeting held on 25 October, 2007. 5.4 The share capital may also be increased by contribution of credits and contribution in kind, pursuant to article 2440 of the Italian Civil Code. 5.5 In the event of an increase of capital with or without consideration, whereby the issuance of Class A Shares and Class B Shares is proportionate to the then issued Class A Shares and Class B Shares, the shareholders that hold Class A Shares shall have the right to receive and subscribe Class A Shares and the shareholders who hold Class B Shares shall have the right to receive and subscribe for Class B Shares. In the event that holders of Class A Shares have not entirely exercised their option rights, the other holders of Class A Shares will have the right to exercise their pre-emption rights with respect to such Class A Shares. Likewise, in the event that holders of Class B Shares have not entirely exercised their option rights, the other holders of Class B Shares will have the right to exercise their pre-emption rights with respect to such Class B Shares. If, following the exercise of option rights and pre-emption rights by the holders of Class A Shares, there are remaining Class A Shares that are unsubscribed, these may be subscribed - in accordance with the procedure applicable to the exercise of option and pre-emption rights - by the holders of Class B Shares in proportion to their interest in Class B shares issued by the Company, with an automatic conversion of such Class A Shares to newly issued Class B Shares (having the same characteristics as the then issued Class B Shares). If, following the exercise of option rights and pre-emption rights by the holders of Class B Shares there are remaining Class B Shares that are unsubscribed, these may be subscribed - in accordance with the procedure applicable to the exercise of option and pre-emption rights - by the holders of Class A Shares in proportion to their interest in Class A shares issued by the Company, with an automatic conversion of such Class B Shares to newly issued Class A Shares (having the same characteristics as the then issued Class B Shares). 5.6 Without prejudice to the provisions set forth in Article 5.4 of the present by-laws, the share capital increases not fully subscribed by Class A and by Class B shareholders after the exercise of the option rights or the pre-emption rights as the case may be, will be deemed subscribed up to the amount actually subscribed. 5.7 The shares are represented by share certificates. 5.8 The shares are registered; their conversion into bearer shares is not allowed. ARTICLE 6 --------- (WITHDRAWAL) The right of withdrawal does not belong to the shareholders who have not participated in the decisions regarding: - the extension of the term of the Company's duration, and - the introduction or removal of commitments to the circulation of stock certificates. ARTICLE 7 --------- (TRANSFER OF SHARES) 7.1 Within the limits provided by this article 7 and by article 8, the shares are transferable to shareholders and to third parties, whether by a deed between living people or by reason of death. The provisions of this article 7 and of article 8 apply not only to the transfer of Shares, but to the transfer of any right whatsoever relating to them, including, by way of example, (I) all shares or potential financial instruments of the Company (including those provided for in article 2346 of the civil code) having voting rights or convertible into shares having voting rights, (II) all bonds or other financial instruments convertible into, exchangeable with, or conferring to the relevant owner the right to subscription or to acquisition of shares or financial instruments with voting rights of the Company, as well as shares originating in the respective conversion or the exercise of the abovementioned rights, (III) any other right, title, and/or financial instrument (including rights of option and/or warrant) that gives a right to the acquisition of and/or subscription to shares and/or financial instruments and/or bonds convertible into/ or exchangeable with, shares or financial instruments having voting rights or convertible into shares having voting rights in the Company, and/or the shares and/or financial instruments acquired on the basis of their exercise. The provisions of this article 7 and article 8 regard - in addition - not only the transfer of full ownership of the Shares and the rights relating thereto, but also the transfer of the bare ownership and whatsoever real rights of enjoyment, exclusive of the real rights of guarantee. For the purposes of this article 7 and article 8, by act of transfer is meant any transfer by deed between living people, in whatever manner (such as, for purely illustrative purposes, sale, barter, contango, fiduciary transfer, and the modification of the entitlement to the relationship underlying a possible fiduciary commission, the conferring or borrowing of titles, or rather title deeds, gratis or out of generosity, amalgamation, splitting) able to be accomplished, directly or indirectly, in whole or part, including in a transitory manner, the ownership or availability of the Shares and whatever rights, interests, including of a non-property nature, deriving from or connected to the entitlement to the Shares. For the purposes of this Article 7, "QUALIFIED ITALIAN INVESTORS" means the entities and persons, that are not Telephonic Operators, that are qualified primary Italian institutional investors or private persons or entities that were previously accepted in writing by the holders of Class B Shares, it being understood that, in the context of the acquisition of shares of the Company they must adhere to the contractual obligations agreed upon by the transferring shareholders with respect the shares being transferred. The provisions of the present article 7 and article 8 do not apply with regard to transfers in favour of companies entirely owned or controlled or controlling pursuant to Article 2359, first paragraph No. 1 of the Civil Code, or operations of partial non-proportional de-merger of the Company, merger by incorporation of entirely owned companies, and merger between companies entirely owned or controlled or controlling pursuant to Article 2359, first paragraph No. 1 of the Civil Code by the same shareholder, provided that the transfer shall be subject to a condition subsequent whereby in case of subsequent change of control of said companies, the Shares shall be deemed not having been transferred and shall have to be transferred back to the original Shareholder Transferring Class A Shares or Shareholder Transferring Class B Shares (as defined below), as the case may be. To the extent that the rights of redemption of each shareholder provided for in Article 28 of the By-laws and the other rights provided for in the By-laws are not prejudiced, the provisions of the present article 7 and article 8 do not apply also to transfers through derivative transactions or borrowing of titles according to which the original Shareholder Transferring Class A Shares (being a bank, financial company or insurance company), as the case may be (i) shall have the full title and ownership of the Shares upon termination of the relevant transaction, and, in any case, (ii) shall maintain medio tempore all administrative and economic rights on the Shares under the derivative transaction or being object of the borrowing of titles; failure of such conditions will entail the immediate application of this article 7 and following article 8. 7.2 The shareholder who intends to transfer Class A shares (hereinafter the "SHAREHOLDER TRANSFERRING CLASS A shares") to a potential third party acquirer, including a shareholder of the Company (hereinafter, a "PERSON BIDDING FOR CLASS A SHARES") must offer them in advance on equal terms to the other shareholders who hold Class A shares and - for the purposes of point (ii) below - to the shareholders who hold Class B shares, who may acquire them pre-emptively - respectively, in proportion to the number of Class A shares held by each of them compared with the total number of Class A shares issued by the Company and, with regard to Class B shareholders, in accordance to point (ii) below in proportion to the number of Class B shares held by each of them compared with the total number of Class B shares- with regard to the following procedure (hereinafter the "RIGHT OF PRE-EMPTION"): (I) The Shareholder Transferring Class A shares must transmit a communication, by registered or certified mail with return receipt requested to the Chairman of the Board of Directors and to the other shareholders holding Class A shares, specifying the number of Class A shares, the price, and the other economic and contractual conditions of the transfer and the personal particulars of the Person Bidding for Class A Shares (the "TRANSFERRING NOTICE"). Within 30 days of the date of receipt of the Transferring Notice (the "TERM OF EXERCISE"), the shareholders holding Class A shares who intend to avail themselves of the Right of Pre-emption must give the appropriate written communication to the Chairman of the Board of Directors and to the Shareholder Transferring Class A shares (the "ACCEPTANCE NOTICE"). The shareholders holding Class A shares who exercise the Right of Pre-emption, provided that they make a contextual request in the Notice of Acceptance, will have the right (hereinafter, the "RIGHT OF INCREASE") to acquire the Class A shares remaining on sale once all the Notices of Acceptances have been received (the "REMAINING CLASS A SHARES"). Any Notice of Acceptance shall specify the number of Remaining Class A Shares in relation to which the relevant shareholder holding Class A shares wishes to exercise the Right of Increase. The Remaining Class A Shares shall be divided among the shareholders who have exercised the Right of Increase in proportion to the number of Class A shares held by each of them, provided that after the exercise of the above mentioned rights any shareholder holding Class A shares will not be entitled to acquire a number of Class A shares higher than the aggregate number indicated into the Acceptance Notice. (II) if after the carrying out of the procedure in the preceding point (i) there still remain any Remaining Class A Shares, each holder of Class A shares other than the Shareholder Transferring Class A shares will have the right to procure within 30 days after the expiry of the Term of Exercise (the "FURTHER TERM") the Acquisition of the Remaining Class A shares by one or more Qualified Italian Investors, it being understood that the Shareholder Transferring Class A Shares will not have such right if (AA) the Shareholder Transferring Class A Shares is a Telephonic Operator and (BB) as a result of the transfer of Class A Shares, the interest held by the Class A Founding Shareholders falls below 35% of the share capital, it being understood that the loss of such right shall be limited to the portion of shares transferred that determines the decrease in interest of the Class A Founding Shareholders to below 35%. If after the expiration of the Further Term there still remain any Remaining Class A shares, such Remaining Class A shares shall be offered without delay to the shareholders holding Class B shares by means of a communication made in the form specified in the preceding paragraph (i) of this Article 7.2. The Remaining Class A shares which become pre-empted by the shareholders holding Class B shares must be offered to the holders of Class B shares - in proportion to the number of Class B shares held by each of them compared to the aggregate number of Class B shares issued by the Company - subject to the automatic conversion of the aforesaid Class A shares subject to pre-emption at the rate of one newly issued Class B share (having the same characteristics as the Class B shares in circulation) for each Class A share subject to pre-emption. The exercise of the Right of Pre-emption by the shareholders holding Class B shares, potentially exercised in accordance with this article 7.2 (ii), must be carried out within 15 days of the receipt of the notice of offering in pre-emption by means of an appropriate written communication to the Chairman of the Board of Directors and the Shareholder Transferring Class A shares, specifying the number of shares requested in pre-emption. The conversion of Class A shares into Class B shares takes effect upon the recording of the decision of the Board of Directors (which for this purpose must be convened within 5 days of the expiry of the term for the exercise of the Right of Pre-emption specified in the present article 7.2 (ii)) resulting from the minutes drawn up by the notary, who must proceed to carry out all the necessary formalities for the issuance of Class B shares as well all other formalities provided by the current legal standards. (III) Should remain any Class A shares subject to the bid not acquired by Class A shareholders or by Qualified Italian Investors or by Class B shareholders in the sense of the foregoing (the "SHARES A NOT PURCHASED") and the Person Bidding for Class A shares is accepting to buy the Shares not Purchased, the Shares not Purchased may be transferred from the Shareholder Transferring Class A shares to the Person Bidding for Class A shares, within but not later than 15 days, if the transfer in favour of the Person Bidding for Class A shares has not occurred within the aforesaid term, any later transfer of Class A shares and of the rights related thereto shall be subject again to the procedure specified in the present article 7.2; any act of transfer carried out in violation of the provisions of the present article 7.2 shall be invalid and not opposable to the Company. (IV) Should remain any Share A not Purchased and the Person Bidding for Class A shares is not accepting to buy only the Shares A not Purchased as set forth in article 7.3(iii), the Shareholder Transferring Class A shares shall be entitled to sell all the Class A shares object of the Class A Transferring Notice to the Person Bidding for Class A shares. 7.3 The shareholder who intends to transfer Class B shares (hereinafter, the "SHAREHOLDER TRANSFERRING CLASS B SHARES") to a potential third-party acquirer as well as to a shareholder of the Company ("PERSON BIDDING FOR CLASS B SHARES") must offer these shares in advance to all the other shareholders holding Class A and Class B shares with regard to the following procedure: (I) the Shareholder Transferring Class B shares must transmit a communication, by registered or certified mail with return receipt requested to the Chairman of the Board of Directors and other shareholders, specifying the number of Class B shares, the price, and the other economic and contractual conditions of the transfer and the personal particulars of the Person Bidding for Class B shares (the "CLASS B TRANSFERRING NOTICE"). Within 30 days of the date of receipt of the notice, the shareholders who intend to avail themselves of the Right of Pre-emption must give the appropriate written communication to the Chairman of the Board of Directors and the Shareholder Transferring Class B shares, specifying the number of shares requested in pre-emption; (II) (A) Should the offer be accepted in its totality by the shareholders, the Class B shares subject to bidding shall be divided among the aforesaid shareholders, in proportion to the number of shares held by each of them compared to the total number of shares (of Class A and Class B) issued by the Company; (B) should the offer be accepted only in part by the shareholders, the Class B shares offered and acquired must be divided among the aforesaid shareholders in proportion to the number of shares held by each of them compared to the total number of shares (of Class A and Class B) issued by the Company. The Class B Shares that are acquired by the holders of Class A Shares in accordance with this Article 7.3, will be transferred to such shareholders in accordance with this Article 7.3 and, in any event, will be subject to automatic conversion to newly issued Class A Shares (having the same characteristics of the then issued Class A Shares). The conversion of Class A Shares to Class B Shares will be in accordance with the provisions of the second and third paragraph of Article 7.2(ii) of the By-laws and (III) Should remain any Class B shares subject to the bid not acquired by Class B shareholders or by Class A shareholders (the "SHARES B NOT PURCHASED") and the Person Bidding for Class B shares is accepting to buy the Shares not Purchased, the Shares B not Purchased may be transferred from the Shareholder Transferring Class B shares to the Person Bidding for Class B shares, within but not later than 15 days, if the transfer in favour of the Person Bidding for Class B shares has not occurred within the aforesaid term, any later transfer of Class B shares and of the rights related thereto shall be subject again to the procedure specified in the present article 7.3; any act of transfer carried out in violation of the provisions of the present article 7.3 shall be invalid and not opposable to the Company. (IV) Should remain any Share B not Purchased and the Person Bidding for Class B shares is not accepting to buy only the Share B not Purchased, the Shareholder Transferring Class B shares shall be entitled to sell all the Class B shares object of the Class B Transferring Notice to the Person Bidding for Class B shares. 7.4 In the event that the transfer of shares does not provide a corresponding amount, or rather if it does not provide it entirely in money (for example, in the event of donation, barter, or transfer through amalgamation, splitting) the price at which the shareholders in the Company shall be able to acquire the shares offered to them in pre-emption shall be determined by mutual agreement of the shareholder who intends to transfer and the shareholder or shareholders who have exercised the pre-emption (the "INTERESTED SHAREHOLDERS"). If the Interested Shareholders have not reached an agreement within 30 workdays, elapsing from the moment when the shareholder who intends to transfer has received the communication of the shareholders who intend to exercise the Right of Pre-emption, the price for each share shall be calculated on the basis of the adjusted net worth of the Company to be determined taking into account the price of the ordinary share or savings share held in Telecom Italia S.p.A. ("TI") calculating by means of the arithmetic average of the official stock exchange prices within 30 days preceding the date of the offer in pre-emption and, in case of disputes, the calculation, to be carried out on the basis of the criteria indicated above, shall be remitted to an expert appointed by the President of the Court of Milan, upon application by the most diligent shareholder. 7.5 The transfers provided for in this Article 7 are subject to applicable antitrust regulations and must be effectuated with 10 days of obtaining the relevant antitrust authorizations, where necessary, and, in any event within six months of entering into a binding agreement to transfer the shares. 7.6 Transfers made in violation of the provisions of the present article 7 and the following article 8 shall be invalid and unenforceable with regard to the Company. ARTICLE 8 --------- (RIGHT OF CO-SALE (TAG-ALONG)) 8.1 Without prejudice to the provisions of the foregoing article 7, in the event that one or more shareholders (hereinafter called jointly the "CONSIDERABLE SHAREHOLDER") (i) receives an offer relating to transfer, also one or more times, of a number of shares that represent a share equal to at least 30% of the Company (the "CONSIDERABLE SHARE") by a potential third-party acquirer or by one or more potential acquirers belonging to the same group, connected by a relationship of control or linkage among them in the meaning of article 2359 of the civil code, or who in any case act in concert pursuant to article 109, Consolidated Financial Act, for the purchase of the Considerable Share, and (ii) none of the other shareholders exercises the Right of Pre-emption at the end of the respective Term of Exercise, or notwithstanding the exercise of the Right of Pre-emption by one or more of the other shareholders a bid by the third party is still pending for a share equal to at least the Considerable Share, the shareholder (or shareholders) who did not exercise the Right of Pre-emption to which they were entitled (hereinafter the "NON-OPTING SHAREHOLDER") shall have the right to transfer to the potential third-party acquirer his own shares (the "RIGHT OF CO-SALE" or "TAG-ALONG RIGHT") at the same terms and conditions offered to the Considerable Shareholder pursuant to this article 8. If the offer to the Shareholder does not comprise the entire stake held but only a part of such stake, the Tag Along Right shall be allocated to the Non-Opting Shareholder in the same proportion existing between the number of Shares to be sold and all the shares held by the Considerable Shareholder. 8.2 If the Non-Opting Shareholder intends to exercise its Tag-Along Right, he must, under penalty of forfeiture, give a written communication to the Considerable Shareholder - and a copy to the Company - by the means and under the terms provided for the exercise of the Right of Pre-emption discussed in the foregoing article 7. Once the express request has been made by the Non-Opting Shareholder to avail himself of the Tag-Along Right (hereinafter the "PROPOSAL OF SALE"), the aforesaid Non-Opting Shareholder shall be obliged to sell all or the different pro rata quantities established above of his own shares, free from every encumbrance, lien or right in favour of third parties, to the potential third-party acquirer, in accordance with the following procedure: (I) The Considerable Shareholder must, as a condition for the efficacy of the transfer of his own shares, see to it that the potential third-party acquirer (a) accepts unconditionally the Proposal of Sale mentioned in this article 8.2, having for its purpose the sale of all (or the different pro rata quantities established above) the shares owned by each Non-Opting Shareholder who has made the Proposal of Sale, without the potential third-party acquirer being able to require with regard thereto any declaration and/or guarantee, with the exception of the guarantees pertaining to (AI) the entitlement to the shares owned by the Non-Opting Shareholder, in the absence of commitments regarding these and the capacity to freely dispose of them, and (AII) the fact that the shares are free from every encumbrance, lien or right in favour of third parties; and (b) acquires all (or the different pro rata quantities established above)the shares owned by each Non-Opting Shareholder who made the Proposal of Sale; (II) The transfer of the shares by the Considerable Shareholder and the other Non-Opting Shareholders must arrive in one single setting, with contextual payment of the price within and not later than 15 days of the date of receipt of the Proposal of Sale by the Considerable Shareholder; (III) If no shareholder has exercised the Right of Pre-emption in the sense of article 7 nor the Tag-Along right in the sense of the present article, the Considerable Shareholder may transfer the shares belonging to him to a potential third-party acquirer on condition that (a) the transfer occurs under the same conditions indicated in his own communication to the other shareholders, here including the same price. and (b) the transfer shall occur within 15 days of the expiry of the different Term of Exercise mentioned in the foregoing article 7, it remaining firm that the aforesaid term shall be reasonably extended, as referred below, if the transfer of the shares is subject to obligations of communication in advance or authorization by an authority; it remains the intention that the aforesaid term of 15 days be considered respected if within the appropriate deadline the Considerable Shareholder has executed with the potential third-party acquirer a purchase and sale contract with deferred efficacy (but not more than 6 months) or conditional solely upon the obtaining of the authorizations required by law or regulation (provided that such agreement shall terminate if such authorizations have not been obtained within six months following execution of such purchase and sale contract), at a price per share and, in general, on the terms and conditions indicated by the potential third party acquirer in his own bid. If the transfer to the potential third party acquirer has not taken place in conformity with what is indicated in this paragraph and in the terms provided here, the Considerable Shareholder shall not be able to transfer his own shares unless subject to the experiencing of the procedures discussed in articles 7 and 8 and the transfer shall not be valid and enforceable against the Company. ARTICLE 9 --------- (BONDS AND FINANCING) 9.1 The Company may issue convertible and non-convertible bonds, take loans from shareholders, with interest or interest-free, with or without reimbursement obligation, in compliance with the applicable laws and regulations and its by-laws. SECTION III ----------- SHAREHOLDERS' MEETING ARTICLE 10 ---------- (ORDINARY SHAREHOLDERS' MEETING) 10.1 The Ordinary Shareholders' Meeting shall decide upon matters reserved to it by law. Furthermore, the Ordinary Shareholders' Meeting authorises, within the meaning of Article 2364 (1)(5) of the Civil Code, subject to the responsibilities of the Board of Directors, (i) with the majority provided in the following Article 12, paragraph 3, the carrying out by the Company of the activities discussed in Article 3.1, letter (c) and (ii) the Company's subscription to any tender offers having as their subject the shares of TI held by the Company, provided that in such a case the efficacy of the authorization resolved by the meeting is subject to the condition precedent of the failed exercise of the Redemption discussed in the following Article 28.2 potentially carried out - with respect to the prerequisites and procedure discussed in the following Article 28.2 - by the shareholders authorised to do so, provided that if the said Redemption is exercised, the aforesaid resolution of the Meeting is intended to be definitively revoked at the moment of the transfer of the shares subject to Redemption and the TI shares directly or indirectly held by the Company shall be rendered unavailable within the meaning of the following Article 28.2 (iii). ARTICLE 11 ---------- CALL 11.1 The Shareholders' Meeting may also be convened in a place other the registered office, provided that it is held in Milan. 11.2 The Meeting may be convened, subject to resolution of the Board of Directors, by the Chairman of the Board of Directors at least eight days prior to the date of the meeting by means of: (i) A letter or telegram sent to all the shareholders entered in the shareholders' register, to the directors and statutory auditors by postal service or an equivalent; with notice of receipt; (ii) a fax or e-mail message sent and received by all the persons indicated above, who must, within the date established for the meeting, confirm in writing, also using the same means, receipt of the notice, specifying the date of receipt whenever the delivery means used do not provide for notification - even electronic - of receipt by the addressee. 11.3 In the notice of call a second meeting may be set for another day, if the preceding Meeting was not legally constituted. 11.4 In the absence of formal call, the Meeting is regularly constituted when the entire share capital of the Company is represented and the majority of the members of the Board of Directors and of the members of the managerial body take part; in that case, each of the participants may object to the discussion of issues for which he is not sufficiently informed. 11.5 Except as provided by the last paragraph of Article 2367 of the Civil Code, the Board of Directors must convene the Meeting without delay when a request is made by as many shareholders representing at least one tenth of the share capital of the Company and the issues to be discussed are set out in the request. 11.6 The Ordinary Shareholders' Meeting must be convened by the Board of Directors at least once a year, within one hundred and twenty days of the close of the Company's fiscal year; the Meeting may be convened within one hundred and eighty days of the close of the Company's fiscal year should the Company be required to prepare consolidated financial statements or when this is required by particular reasons connected to the structure and the purpose of the Company. ARTICLE 12 ---------- (RESOLUTIONS) 12.1 Without prejudice to the provisions of paragraph 12.3 below, the Ordinary Shareholders' Meeting - in first call - is regularly convened with the participation of such shareholders as represent at least half of the share capital and - in second call - is regularly convened with the participation of such shareholders as represent at least one fifth of the share capital, except for the approval of the financial statements and the appointment and removal of corporate officers, for which it is regularly convened whatever the proportion of the share capital represented by the shareholders taking part. 12.2 Without prejudice to the provisions of paragraph 12.3 below, the Ordinary Shareholders' Meeting - in first and second call - resolves with the favourable vote of the absolute majority of the capital present. 12.3 The Meeting convened to resolve on the authorization of activities or operations in pursuit of the corporate purposes indicated in Article 3, paragraph 3.1, letter (c) of the By-laws is validly constituted and decides by a favourable vote of such shareholders as represent at least 95% of the share capital. The Meeting convened to resolve on the distribution of dividends is validly constituted and decides by a favourable vote of such shareholders as constitute at least 65% of the capital stock, it remaining firm that if one or more shareholders who, even altogether, represent a share of the Company greater than 30% of the capital stock, should abstain or be absent from the decision of the Meeting, it may be adopted by a favourable vote of a majority of holders of the capital stock of the Company. 12.4 The Extraordinary Shareholders' Meeting - in first and second call - is regularly constituted and resolves with the favourable vote of such shareholders as represent at least (I) 75% of the share capital with regard to the resolutions (x) approving share capital increase with the exclusion of the option right pursuant to article 2441, par. 4 and 5, of the Italian civil code, (y) approving mergers or de-mergers causing a dilution of the stakeholding held by the shareholders in the Company, except as provided in Article 18.2(i) and (z) approving amendments to articles 12, 15, 18 and 22 of the present by-laws, and (II) with regard to the remaining other resolutions, 65% of the share capital (with the exception of resolutions under Articles 2446 and 2447 of the Civil Code, which are decided by the applicable majorities), provided that if one or more shareholders who, even together, hold an interest in the company that exceeds 30% of the share capital should abstain from such a Shareholders' Meeting resolution or be absent, it may be adopted by a favourable vote of a majority of holders of the capital stock of the Company. In the event the quorums to convene the Extraordinary Shareholders' Meeting and resolve upon the issues set out in the first paragraph of this paragraph 12.4 are not met, the Extraordinary Shareholders' Meeting may be convened anew to resolve on the same issues, provided at least 30 days have elapsed from the preceding call. In such a case the meeting - in first call and in second call - is regularly convened and resolves by the favourable vote of such shareholders as represent the absolute majority of the share capital. ARTICLE 13 ---------- (RIGHT OF PARTICIPATION AND VOTE) 13.1 Participation in the shareholders' meeting is allowed to those shareholders having the right to vote or the financial instruments giving the right to vote on at least one of the topics listed on the agenda as well as to those individuals who have been granted the right of participation either by law or by virtue of these By-laws. Each share has attached the right to issue one vote. The Company guarantees the provision of translation services in favour of shareholders who do not speak Italian. 13.2 For participation in the shareholders' meeting, it is not necessary to have previously lodged (i) shares or the relative certificates thereof, and (ii) financial instruments incorporated in securities or documented by certificates. 13.3 The shareholders' meeting can also be held in a number of places, either contiguous or distance from each other, connected by audio and/or video, as long as the collective assembly method is used, principles of good faith are upheld, and all shareholders are treated equally. In particular, it is necessary that: (i) the president of the shareholders' meeting and the person taking record of the shareholders' meeting be in the same place; they will write up and sign the minutes and for the purposes of record the meeting will be considered as having taken place at that location; (ii) the president of the shareholders' meeting be allowed, including through the office of the president, to verify the identity and legitimacy of the participants, control the meeting process, verify and announce the results of voting; (iii) the person taking down the minutes be allowed to properly observe the shareholders' meeting events he or she is required to record; (iv) the participants be allowed to take part in the discussion and simultaneously vote on the items of the agenda, as well as view, receive and transmit documents; (v) the audio and/or video locations to which the Society is responsible for allowing the participants to connect to be indicated in the notice to call the shareholders' meeting. ARTICLE 14 ---------- (PRESIDENT AND SECRETARY) 14.1 The shareholders' meeting shall be chaired by the Chairman of the Board of Directors or by a person elected with the majority vote of those present. 14.2 The shareholders' meeting shall appoint a secretary, not necessarily having to be a shareholder, and if need be also one or more observers, not necessarily having to be shareholders. The attendance of the secretary is not necessary when the minutes are recorded by a notary. SECTION IV ADMINISTRATION ARTICLE 15 ---------- (APPOINTMENT OF THE BOARD OF DIRECTORS) 15.1 The Company is administered by a board of directors comprising 10 directors, in accordance with the decisions made by the shareholders' meeting called for the purposes of such appointments. 15.2 The appointment of the board of directors shall take place on the basis of on the lists submitted by shareholders holding Class A shares and Class B shares in accordance with the paragraphs describing this process whereby the candidates shall be listed using a sequential numbering scheme. Class A Shareholders who, either individually or collectively with other Class A Shareholders represent a participation equal to at least 20% of the Company's share capital may submit or concur in the presentation of a list. Class B shareholders who, individually or collectively with other Class B Shareholder hold a participation equal to at least 20% of the Company share capital may submit or concur in the presentation of a list. The lists submitted by the shareholder must be submitted to the Company's registered office at least five days before the date set for the shareholders' meeting and each of them must contain the number of candidates equal to the maximum number of board members to be elected. Included with each list, and within the deadlines indicated above, there must be narrations with which the individual candidates irrevocably accept their candidature and attest, under their own responsibility, that there are no pre-existing conditions of ineligibility or incompatibility, and that they do in fact possess the requirements set out for the respective positions. Shareholders can submit or concur with a submission, and vote on a single list. The Class A shareholders may vote only for one list presented by one or more Class A shareholders. The Class B shareholders may vote exclusively for one list presented by one or more Class B shareholders. 15.3 In the event that, on the date of the shareholders' meeting, the Class A Shares constitute an absolute overall majority of the share capital of the Company, the following procedure is to be followed in the appointment of the members of the Board: (a) four board members shall be chosen from the first of the lists that may have been submitted by Class B shareholders; the first of the directors to be elected shall be appointed vice-Chairman; (b) the remaining board members to be elected will be taken from list submitted by Class A shareholders; the first of the directors to be elected shall be appointed Chairman. Alternatively, in the event that, on the date of the shareholders' meeting, the Class B Shares constitute an absolute overall majority of the share capital of the Company, the following procedure is to be followed in the appointment of the members of the Board: (a) four board members shall be chosen from the first of the lists that may have been submitted by Class A shareholders; the first of the directors to be elected shall be appointed vice-Chairman; (b) the remaining board members to be elected will be taken from list submitted by Class B shareholders; the first of the directors to be elected shall be appointed Chairman. 15.4 In the event that, on the date of the shareholders' meeting, the Class B Shares constitute less than 30% but more than 20% of the share capital of the Company, two board members shall be chosen from the list submitted by Class B shareholders and the remainder shall be chosen from the list submitted by Class A shareholders. In the event that, on the date of the shareholders' meeting, the Class A Shares constitute less than 30% but more than 20% of the share capital of the Company, two board members shall be chosen from the list submitted by Class A shareholders and the remainder shall be chosen from the list submitted by Class B shareholders. 15.5 When a single list has been submitted, the board members who appear on that list will be elected. In the event that no list is submitted, the appointment of the board members will not be carried out with the list vote system indicated above but rather by a resolution of the Shareholders' meeting taken with the legal majorities present. 15.6 If in the course of this exercise a director has ceased to add his or her position, he or she shall be replaced by the first non-elected candidate on the same list to which the missing director belongs, or if there is an obstacle to the first non-elected candidate stepping up in this manner, then the non-elected person immediately below him or her on that same list will serve as the replacement. If it is not possible for any reason to replace the missing board member with any of the non-elected candidates from that same list, then the provisions of law shall be followed. If in the course of the exercise there fails to be a majority with regard to the members who make up the board of directors, then the remaining board members shall resign, with such resignation taking official effect from the moment the Board is reconstituted by nomination of the shareholder's meeting A shareholders' meeting shall be called immediately by remaining board member, for the purposes of appointing the new board of directors. Should all board members resign or cease to hold their position for any reason, the shareholders' meeting for the purposes to appoint the new board of directors, shall be called immediately by the board of statutory auditors, which shall perform the ordinary administrative activity in the meantime. ARTICLE 16 ---------- (GENERAL PROVISIONS) 16.1 The administration of the Company may also be entrusted to non-members. 16.2 The directors shall hold their positions for a term established by their deed of appointment and therefore for a period not to exceed three financial years. This term shall expire on the date of the shareholder meetings' called to approve the balance sheet for the last financial period of their term. ARTICLE 17 ---------- (CHAIRMAN OF THE BOARD OF DIRECTORS) 17.1 The board of directors elects from among its members - where a shareholders' meeting has not already been held - a chairman and the possible one or more vice-chairman presidents, establishing therein their powers save for the power provided by law. 17.2 The board of directors can further appoint a secretary, also in a permanent manner, and who does not necessarily have to be a member of such board of directors. ARTICLE 18 ---------- (POWERS OF THE BOARD OF DIRECTORS AND REPRESENTATION) 18.1 The board of directors is vested with the broadest powers for ordinary and extraordinary management of the Company, without exception of any sort, and shall carry out all functions not reserved - by law or these By-laws- to the competence, including of an authoritative nature, of the shareholders' meeting. 18.2 The board of directors shall be exclusively responsible for making decisions on the following: (i) mergers by incorporation of companies in which the Company holds at least ninety percent of the shares or stakes, merger by incorporation of the Company into another company which already holds at least ninety percent of the Company's shares, as well as a de-merger of the Company in accordance with Article 2506 of the Civil Code; (ii) transactions for the of acquisition or transfer of - or encumbrance of - the Company's direct or indirect shareholdings in Olimpia S.p.A. ("O") and O's direct or indirect shareholdings in TI, with the exception of shareholdings transferred to meet public acquisition offers provided by law or regulation which shall occur once the authorization of ordinary shareholders' meeting has been given; (iii) investments in companies other than investments in O and in TI; (iv) fixed capital investment and financial structure decisions for amounts in excess or Euro 75 million; (v) decisions on the vote to be exercised in the shareholders' meetings of O and TI; (vi) approval and amendments of the Company's budget; (vii) reduction of share capital in the event of a shareholder's withdrawal; (viii) the By-laws' compliance with legislative provisions; (ix) the setup, transfer or dissolution of branch offices; (x) all other decisions reserved exclusively to the authority of the board of directors. The resolutions regarding the matters mentioned above in (ii) to (vi) are approved by way of the favourable vote of at least 7 sitting members of the board (the "CONSOLIDATED QUORUM"). As a partial exception to the above, should there be resolutions of board members that require Consolidated Quorums in which three or more directors have abstained or are absent, such resolutions shall be taken with the favourable vote of the majority of only those board members sitting. 18.3 The representation, including in legal proceedings (including therein the ability to file lawsuits and initiate legal actions, including in Supreme Courts and to appoint to that end attorneys and proxy attorney), is the responsibility of: (i) the chairman of the board of directors; (ii) the vice-chairman; (iii) anyone not a member of the board of directors, designated thereby, within the scope of and in the exercise of the powers granted to them. ARTICLE 19 ---------- (MEETINGS OF THE BOARD OF DIRECTORS) 19.1 The board of directors can also meet in a place other than the registered office of the Company, provided that it occurs in Milan, any time that the chairman of the board of directors, or whoever is standing in for him, deems it suitable and/or necessary or when he is asked to do so by at least one of his directors or by the board of statutory auditors and at least once every quarter. 19.2 The board of directors is called to assembly by the chairman of the board of directors or by whomsoever is standing for him, at least five business days - or in case of urgency, two business days - before the date set for the meeting, via registered letter, hand-delivered letter, telegram or fax, sent to all directors and statutory auditors at the addresses indicated in the company books; the date, place and time of the meeting, list of items on the agenda and possible details relating to the audio and/or videoconferencing connections should be included in the call to assembly. 19.3 In the absence of a formal call to assembly, the board of directors shall be considered as having been validly constituted if all sitting board members and statutory auditors are participating therein. 19.4 At the request of any Director, meetings of the board of directors can also take place in a number of places, either together or distant from each other, connected by audio and/or video, as long as: (i) the president of the assembly and the person taking record of the assembly are in the same place; they will write up and sign the minutes and for the purposes of record, the meeting will be considered as having taken place at that location; (ii) the president of the assembly is allowed to verify the identity of the participants, control the meeting process, oversee and announce the results of voting; (iii) the person taking down the minutes is allowed to properly observe the events of the meeting he or she is tasked with recording; (iv) the participants are allowed to take part in the discussion and simultaneously vote on the items of the agenda, as well as look at, receive and transmit documents; The Company guarantees the provision of translation services for directors' interventions and the translation of the relevant documents to be review by the Board, which shall be provided with together with the corresponding call of the meeting. 19.5 Without prejudice to the provisions of article 18.2 above, the resolutions of the board of directors shall be considered as having been validly made with the majorities provided by law. 19.6 Meetings of the board of directors are presided over by the president of the board of directors or by the board member appointed by the participants. 19.7 Resolutions of the board of directors must be recorded in the minutes signed by the president of the meeting and by the individual who recorded them and must be transcribed into the book of assemblies and deliberations of the board of directors. ARTICLE 20 ---------- (CEO AND ATTORNEYS) 20.1. The board of directors may appoint, replace and remove one or more chief executive officers, deciding on their functions, assignments and faculties. 20.2 The board of directors may also appoint, replace and remove agents, attorneys and representatives - in general - for particular acts or categories of acts; the same can be done by any director vested with the power of representation, within the limits of the relative assignments. ARTICLE 21 ---------- (COMPENSATION OF DIRECTORS) 21.1 Compensation for directors shall be determined in accordance with article 2389 of the civil code. 21.2 The shareholders' meeting may determine a total amount for compensation of all the directors, including those invested with particular offices. 21.3 In any case, the directors must be reimbursed for expenses incurred in the performance of their duties. SECTION V BOARD OF STATUTORY AUDITORS AND ACCOUNTING CONTROL ARTICLE 22 ---------- (BOARD OF STATUTORY AUDITORS) 22.1 The Board of Statutory Auditors is composed of three effective auditors and two alternate auditors. Appointment of the Board of Statutory Auditors shall be done on the basis of lists submitted by shareholders. Class A shareholders can submit or concur to submit a single list. Class B shareholders can submit or concur to submit a single list. The lists submitted by the shareholders must be submitted to the Company's registered office at least five days before the date set for the first-call of the shareholders' meeting. Included with each list there must be declarations with which the individual candidates accept their candidature and attest under their own responsibility that there are no pre-existing conditions of ineligibility or incompatibility, and that they do in fact possess the requirements set out for the respective positions by law and by the By-laws. The lists shall be divided into two sections: one for candidates for the position of effective statutory auditor and the other for candidates for the position of alternate auditor. Anyone with the right to vote can vote on a single list. The following procedure is to be followed in the election of the members of the Board: (a) from the list that may have been submitted by Class B shareholders shall be chosen, per the sequential order in which they appear on this list, one alternate and one effective statutory auditor, who will act as Chairman. (b) the remaining board members to be elected will be taken from the list submitted by Class A shareholders. 22.2 Where no lists are presented, the appointment of the Board of Statutary Auditors shall take place according to the provisions provided by law. 22.3 The effective statutory auditors will be compensated on the basis of professional tariffs, where such compensation has not been determined by the shareholders' meeting. 22.4 Meetings of the board of statutory auditors may also be held using telematic methods in compliance with the rules set forth under Article 19.4 above. ARTICLE 23 ---------- (ACCOUNTING CONTROL) 23.1 Until the Company is not obliged to consolidated its financial statement, the accounting control is exercised by the Board of Statutory Auditors, entirely formed by accounting auditors registered under the national register kept by the Ministry of Justice; with resolution of the ordinary shareholders' meeting, accounting control may, however, be conferred on an accounting auditor or an auditing company registered under the national register kept by the Ministry of Justice. SECTION VI FINANCIAL STATEMENTS AND PROFITS ARTICLE 24 ---------- (COMPANY FISCAL YEAR) 24.1 The Company's fiscal years end on 31 December of every year. ARTICLE 25 ---------- (BALANCE SHEET) 25.1 At the end of each of the Company's fiscal year, the board of directors shall draw up the financial statement pursuant to law. ARTICLE 26 ---------- (PROFITS) 26.1 The profits resulting form the financial statement, minus an amount not less than 5% (five percent) intended for the legal reserve, up to the limit allowed by law, shall be distributed among the shareholders in a proportion corresponding to the number of shares held by each shareholders, unless the shareholders' meeting decides on special allocations to extraordinary reserves or some other purpose or decides to carry it over - in whole or in part - to the next fiscal year. 26.2 If the Company's financial statement has been subjected by law to auditing by an auditing company registered under the related professional register, the distribution of accounts of dividends pursuant to article 2433-BIS of the civil code is allowed. SECTION VII DISSOLUTION ARTICLE 27 ---------- (DISSOLUTION) 27.1 The Company shall be dissolved for the reasons established by law. 27.2 In the event the Company is dissolved, the procedure to be followed shall be that set out in articles 2484 and subsequent of the civil code. SECTION VIII RULES FOR REDEMPTION ARTICLE 28 ---------- (METHODS FOR EXERCISING THE RIGHT OF REDEMPTION) 28.1 Any Company Share (either Class A or Class B) can be redeemed pursuant to and for the effects of article 2437-SEXIES of the civil code, if the prerequisites set out in this article have been satisfied. 28.2 If the ordinary shareholders' meeting has authorized the Company, pursuant to article 10.1(ii), to adhere to public tender offers to acquire the shareholdings directly or indirectly held by the Company in TI, any shareholder (or shareholders) who have caused to set down in writing their dissent thereto at this shareholders' meeting (hereafter, the "DISSENTING SHAREHOLDER") shall have the option of redeeming all - and not just part - of the Company Shares (hereafter, the "REDEMPTION") held by the other shareholders, in accordance with the following procedure: (i) The Dissenting Shareholder who wishes to exercise the Redemption must give written notification (the "NOTICE") thereof via registered letter with return receipt to all the other shareholders and to the Chairman of the board of directors within five working days after the date of the shareholders' meeting which decided to authorize the operation cited above, indicating, in this notification, the Redemption price, such Redemption price to be determined in accordance with section (iv) below; (ii) in the event that there are more Dissenting Shareholders, they shall have the right to buy the Shares which are the object of the Redemption in proportion to their stake in the Company's share capital; (iii) as of the date of the Ordinary Shareholders Meeting which decided to authorize the operation cited above, the TI shares directly or indirectly held by the Company will be made unavailable by depositing them in an account held by the Company or by a company controlled by it which owns a direct stake in TI, with a fiduciary company that has received binding and irrevocable instructions, in accordance with the provisions of this clause, and with the necessary powers to proceed to execute the transfer and endorsement of the shares to the Dissenting Shareholder; (iv) the Redemption price per each Company share shall be the Company's adjusted net worth divided by the total number of issued Company Shares. The Company's adjusted net worth is determined by taking into account the greater of (i) the consideration offered for the TI shares subject to public offering and (ii) the price of the shares held by TI calculated by means of the respective arithmetic average of the official stock exchange prices within 30 days preceding the date of the Notice provided for in Article 28.2(i); (v) in case of dispute, on the part of one or more shareholders, as to the price of Redemption within 10 days after receipt of the notification mentioned in number (i) above, the determination thereof shall be handed over to an expert appointed, upon request of the most diligent shareholder, by the President of the Court of Milan. The expert must adhere to the criteria stated in the preceding number (iv) above and must determine the Redemption price within 20 working days after the appointment; (vi) the transfer of the shares and the payment of the Redemption Price shall occur: (X) within 15 business days following the Notice, or (Y) if the transaction is subject to any authorization by law or contract, within 15 business days following obtaining such authorization or (Z) in case of dispute, within 15 business days following the final determination of the Redemption price, provided that transfer of the Shares which are the object of the Redemption shall only take effect from the time of the notification that the Redemption price has been deposited - as indicated in the Notice if there are no disputes, or as determined by the expert appointed pursuant to number (v) above - with Banks appointed by the shareholders transferring the shares. The Company will proceed to make the consequent annotations in the shareholders' register. SECTION IX TRANSITORY RULES Upon the Founding Class A shareholders (as defined below) ceasing to hold at least 35% of the share capital, article 7.2(ii) above shall be replaced as follows: "(II) if after the carrying out of the procedure in the preceding point (i) there remain any Class A shares offered but not acquired (the "REMAINING CLASS A SHARES"), such Remaining Class A shares must be offered without delay to the shareholders holding B shares by means of a communication made in the form specified in the preceding paragraph (i) of this Article 7.2; the Remaining Class A shares which become pre-empted by the shareholders holding Class B shares must be divided among the titular acquirers of Class B shares - in proportion to the number of Class B shares held by each of them - subject to the automatic conversion of the aforesaid Class A shares subject to pre-emption at the rate of one newly issued Class B share (having the same characteristics as the Class B shares in circulation) for each Class A share subject to pre-emption. The exercise of the Right of Pre-emption by the shareholders holding Class B shares , potentially exercise in the sense of what is provided in the present article 7.2 (ii), must be carried out within 30 days of the receipt of the notice of offering in pre-emption by means of an appropriate written communication to the Chairman of the Board of Directors and the Shareholder Transferring Class A shares, specifying the number of shares requested in pre-emption. The conversion of Class A shares to Class B shares takes effect upon the recording of the decision of the Board of Directors (which for this purpose must be convened within 5 days of the expiry of the term for the exercise of the Right of Pre-emption specified in the present article 7.2 (ii)) resulting from the minutes drawn up by the notary, who must proceed to carry out all the necessary formalities for the issuance of Class B shares as well as the necessary registrations in the Register of Companies, also bringing about the necessary and consequent modifications to article 5 of the Company's By-laws, making the numerical expressions and the text in the necessary parts adequate for all legal purposes, providing, moreover, for deposit, according to article 2346 of the civil code, the text of the By-laws updated in that sense, as well as carrying out all other formalities provided by the current legal standards." -----END PRIVACY-ENHANCED MESSAGE-----