PRESS RELEASE
Shareholders' Meeting of 20 December 2013 Â clarifications on the
conduct of shareholders' meetings as requested by CONSOB (the
Italian Securities and Exchange Commission) pursuant to art. 114 of
Legislative Decree 58/1998 Angelo Provasoli renounces his candidacy
for the office of Board Director
Rome, 17 December 2013 With reference to the Ordinary Shareholders'
Meeting of Telecom Italia S.p.A. called for 20 December 2013
(Rozzano  Milan, Viale Toscana 3, at 11.00 am) Consob has asked
the Company, "in order to assure Shareholders are given complete
information and for the efficient conduct of shareholders'
meeting", to make public a series of items of information on the
process of conducting the meeting with particular reference to item
2 of the agenda for the ordinary session. We hereby aim to comply
with the aforementioned request, providing a full overview of the
procedures of the shareholders' meeting, thus identifying and
anticipating  as far as possible  questions and doubts on an
event essentially without precedent. The Shareholders' Meeting is
called with the following agenda: Ordinary session 1. Proposal of
the shareholder Findim Group S.A. to remove from office the
Directors Aldo Minucci, Marco Patuano, Cesar Alierta Izuel, Tarak
Ben Ammar, Lucia Calvosa, Massimo Egidi, Jean Paul Fitoussi,
Gabriele Galateri, Julio Linares Lopez, Gaetano Miccichè, Renato
Pagliaro, Mauro Sentinelli, Angelo Provasoli 2. In the case of
approval of the proposal for removal specified in item 1 Â
Appointment of the Board of Directors  related and consequent
resolutions 3. In the case of non-approval of the proposal for
removal specified in item 1 Â Appointment of two Directors, to
supplement the Board of Directors in office Extraordinary session
1. Elimination of the indication of par value of the ordinary
shares and the savings shares. Amendment to the Bylaws - related
and consequent resolutions. 2. Increase in share capital with
disapplication of preferential subscription rights through the
issue of ordinary shares, to enable the conversion of the
convertible bonds issued by the subsidiary Telecom Italia Finance
S.A. amounting to 1.3 billion euros - related and consequent
resolutions; a. Quorum for the Meeting to be properly constituted:
absence of critical issues. Critical issues are excluded in terms
of the integration of the above quorum. The Shareholders' meeting
takes place in a single call, therefore it can validly discuss and
resolve on the items of the ordinary session regardless of the
number of shares with which those entitled to vote participate in
the proceedings and on
the items of the extraordinary session where shares amounting to
over 1/5 of the ordinary share capital of the Company are
present/represented. In this regard, in addition to what was
already stated in a statement issued before the stock market opened
on 16 December 2013 (i.e. that, as provided by law, all
communications received by the issuer before the start of the
proceedings of the shareholders' meeting are valid and effective
for entitlement to attend and vote at the Shareholders' Meeting),
it is specified that, at 15.00, 17 December 2013, the Company had
received communications from duly authorized intermediaries for a
number of shares corresponding to 53.8% of the ordinary share
capital, including shares with voting rights held by BlackRock Inc.
and its affiliates for over 4.8% of the corresponding class
(preliminary data). b. The resolution for the removal of directors:
quorum for resolutions. With reference to the ordinary session, the
priority point of the meeting is represented by the proposal to
remove the majority of the Directors from office put forward
pursuant to art. 2367 of the Italian Civil Code by the shareholder
Findim Group S.A. (item 1 of the agenda for the ordinary session).
This resolution is to be made with the ordinary procedures of law
and therefore its approval, pursuant to art. 2368 of the Italian
Civil Code, requires the vote in favour cast by the absolute
majority (over half) of the shares with which those entitled to
vote attend the Shareholders' Meeting and as such are recorded at
the shareholders' meeting: for the purposes of forming the quorum
for resolutions (and therefore determining the basis for the
calculation on which to verify the majority of 50% + 1 has been
reached), the shares with respect to which those entitled may
decide to abstain or express a "non-vote" position will therefore
also be considered. In order not to contribute to the formation of
the aforementioned basis for the calculation, the shareholders must
therefore leave the meeting proceeding and in any case the shares
must be registered as not present at the voting proceeding. c.
Approval of the proposal for removal: prior establishment of the
number of members of the new Board of Directors and other ancillary
resolutions. If the proposal for removal is approved, the ordinary
Shareholders' Meeting shall go on to examine item 2 on the agenda:
"Appointment of the Board of Directors - related and consequent
deliberations". Of the ancillary resolutions on the renewal of the
administrative body in its entirety, the first to be made (insofar
as the basis of the mechanism for assigning the seats using a slate
voting system: see below) concerns the number of members of the
board, within the limits established by the Bylaws: between 7 and
19 Directors. In this case too the deliberation shall be taken with
the ordinary procedures of the law, but  as is known  neither the
Board of Directors nor the shareholders who have submitted slates
of candidates have formulated proposals in that regard. The
Chairman of the meeting shall therefore invite those attending the
meeting to put forward proposals, in compliance with the mentioned
limits provided for in the Bylaws, and to that end establishing a
specific deadline and the appropriate operating procedures: all
those present entitled to vote shall be entitled to do so, as there
are no provisions of laws or Bylaws on this point that establish a
minimum shareholding requirements for an entitlement to submit
proposals on the number of members of the administrative body. The
proposals formulated shall be voted on in succession until one of
them obtains the absolute majority of the votes pertaining to the
shares with which those entitled to vote participate in the
Shareholders'
Meeting. The order in which they will be put to the vote will
depend on the number of votes the proposer has in the meeting (in
his/her own right and/or by proxy); proposals with a more reliable
"starting point", on the basis of economic and efficiency
considerations concerning the meeting, and in continuity with the
practice followed on previous occasions, shall be voted on first.
In the cases of proposals submitted ab initio by several persons
together, for the purposes of establishing the voting sequence, the
votes of the proposers shall be added together. However, if during
the debate some shareholders merely state that they share and
endorse the proposal of others, the votes shall not be added
together. If none of the proposals submitted by the deadline and
with the procedures established by the Chairman of the meeting
obtain the majority required, the principle contained in art. 9.1,
last sentence, of the Bylaws shall apply (available for
consultation on the website: www.telecomitalia.com, Governance
channel), according to which "The Shareholders' Meeting shall
establish the number of members of the Board of Directors which
shall remain unchanged until a different number is established".
The number of members of the board shall therefore remain set at
15, as per the resolution of the ordinary Shareholders' meeting of
12 April 2011. Essentially the same logic shall apply for the
remaining ancillary deliberations: the term of office and
remuneration to be paid to the Board of Directors. In this case,
however, the Bylaws do not provide a supplementary rule to be
applied in the absence of a specific shareholder resolution. d.
There follows: voting by slates. As regards the appointment
resolution, should the need occur, this shall be carried out on the
basis of the slates submitted by the shareholders, in accordance
with the law. In particular two slates have been promptly
submitted: a group of Asset Management Companies and international
institutional investors filed a slate of seven names, while the
shareholder Telco S.p.A. submitted a slate with three candidates,
of which one however (Julio Linares) announced the renunciation of
his candidacy on 13 December 2013 as per the press release issued
by the Company on the same day. Therefore to date the slates are
composed as follows: slate presented by a group of Asset Management
Companies and international institutional investors (the complete
list is available for consultation on the website
www.telecomitalia.com/assemblea: this slate is also known as the
AMC slate) 1. Luigi ZINGALES 2. Lucia CALVOSA 3. Davide Giacomo
Federico BENELLO 4. Francesca CORNELLI 5. Giuseppe DONAGEMMA 6.
Maria Elena CAPPELLO 7. FRANCESCO SERAFINI slate presented by Telco
S.p.A. (the so-called Telco slate) 1. Marco Emilio Angelo PATUANO
2. Stefania BARIATTI The election of the Board of Directors shall
be conducted according to the rules established in the Bylaws,
which provide that the first slate is entitled to 4/5 (rounding
down to the next whole number) of the total
number of members as identified with the methods referred to above,
while the second slate is entitled to the remaining seats. e. There
follows: the possible integration of the Board of Directors with a
resolution to be taken with the majorities required by law. If the
number of candidates on either or both slates does not cover all
the seats they are respectively entitled to, the Bylaws provide
that the Shareholders' Meeting shall integrate the composition of
the Board of Directors deliberating with the majorities required by
law, i.e. again with the absolute majority of the votes pertaining
to the shares with which those entitled attend the Shareholders'
Meeting. Neither the Bylaws nor the law provide for automatic
systems in terms of "repechage" and the appointment of any first
unelected candidates, listed in a slate different from that
entitled to indicate the names of the Directors to elect. For the
purpose of greater clarity and as a mere example, it is specified
that where the number of members is established or confirmed as 15:
(i) the slate which comes first in terms of the number of votes
theoretically has the right to 12 seats, but, given the factual
circumstances mentioned above, the 2 members listed (where the
Telco slate comes first), or all 7 members listed (where the AMC
slate comes first) would be drawn from it; (ii) the slate that
comes second in terms of the number of votes would theoretically
have the right to 3 seats, and, given the factual circumstances
mentioned above, the two members listed (where the Telco slate
comes second), or the first 3 members listed (where the AMC slate
comes second) would be drawn from it; (iii) the Shareholders'
Meeting shall proceed with the integration of the Board necessary
to cover all 15 seats with a resolution to be taken with the
absolute majority. Therefore where the need arises, the Chairman of
the meeting shall invite the participants to the shareholders'
meeting to put forward proposals for the integration of the Board,
and to that end establishing a specific deadline and the
appropriate operating procedures, and all those present shall be
entitled to do so. The persons concerned shall put forward
integration proposals in terms of the candidacy of single names or
lists of names to be put to the vote unitarily. The proposals shall
be put to the vote as they are received, in the order resulting
from the application of the same criterion described above: the
proposals to be voted on first are those submitted by the proposing
party which individually or jointly (according to the
specifications also referred to above), in his/her own right and/or
by proxy, has/have the highest number of votes at the shareholders'
meeting, subject to the maximum number of Directors that can be
elected, as resulting from the previous shareholder resolution, or
in application of the supplementary rule established in the Bylaws
(15 members). Upon Consob's request, the Company specifies that the
Nomination and Remuneration Committee has not formulated
"recommendations [...] on the number and profile of the possible
candidates, even in light of the presentation of two lists
qualifying as minorities". Said recommendations are required by the
Corporate Governance Code of Borsa Italiana (to which Telecom
Italia adheres) in the event of a Shareholder's Meeting to renew
the board; but according to the Company's Board of Directors
opinion and resulting from its report to the Shareholders the
meeting of 20 December 2013 does not qualify as such, where the
renewal is only a possible resolution, which depends on the removal
of the majority of the
Directors upon the request of one shareholder, whose arguments the
Board of Directors in office does not agree with. The proposals
formulated will be voted on in succession until the number of
Directors to be elected is complete. Moreover, once there are no
more proposals submitted as above, where the number of elected
persons (using voting slates, and if necessary to integrate the
number of board members with a resolution of the absolute majority
of the votes at the Shareholders' Meeting) is still lower than the
number of members of the Board of Directors as established by the
Shareholders' Meeting or supplementarily confirmed, but in any case
over 7 (minimum number for the Board of Directors as per the
Bylaws), the outcome of the resolutions on the appointment will be
announced by the Chairman of the meeting and the item on the
election of the Directors, in the specific shareholders' meeting,
will be considered complete. The newly appointed Directors, once
established as a board (even if imperfect due to the presence of
fewer members than established by the Shareholders' Meeting or
resulting from application of the rules of the Bylaws), shall make
the decisions deemed most appropriate in this regard. f. There
follows: the resolution on authorization pursuant to art. 2390,
subsection 1, of the Italian Civil Code. In the meeting of 5
December 2013 the Board of Directors in office also approved and
disseminated an addendum to the report to the ordinary
Shareholders' Meeting, specifying that, considering the presence in
the slates of candidates filed pursuant to the law and Bylaws, in
view of the shareholders' meeting on 20 December 2013, of persons
who  in light of the curricula filed  perform activities in
competition with those of Telecom Italia, in the event of their
appointment the Shareholders' Meeting shall be offered a special
vote of authorization pursuant to article 2390, subsection 1, of
the Italian Civil Code. In the absence of specifications from the
party concerned, the circumstance may occur, with reference to the
candidates so far listed in the slates submitted, if Giuseppe
Donagemma is appointed, who has declared he works, inter alia, as a
consultant for the company Ceragon (on the basis of the website
indicated in his curriculum: Ceragon Network Ltd.), "in the
development of business with the Vodafone Group". The resolution
will be made with the ordinary majorities required by law, i.e.
with the absolute majority of the votes pertaining to the shares
with which those entitled to vote participate in the Shareholders'
Meeting. With regard to any eventuality, the Company also specifies
that failure to approve the authorization proposal does not
invalidate the election of the candidate "in competition", only
affecting the possible subsequent revocation and the
responsibilities of the Director (art. 2390, subsection 2, Italian
Civil Code: "For failure to comply with this prohibition the
director may be removed from office and is liable for damages"). g.
The case of failure to approve the proposal for removal. If the
proposal for removal is not approved (i.e. if the votes in favour
do not represent the absolute majority of the votes of those
entitled to vote attending the meeting and registered as such), the
ordinary
Shareholders' Meeting shall proceed to examine item 3 on the
agenda: "Appointment of two Directors, to supplement the Board of
Directors in office". It is specified that the circumstances of the
resignation of two Directors on 13 December 2013 (Cesar Alierta and
Julio Linares) does not authorize the Shareholders' Meeting to
proceed, again assuming rejection of the proposal for removal, with
the possible appointment of Directors to replace them. As per the
notice calling the meeting and the explanatory report, the
shareholders are called upon to replace only Elio Catania and
Franco Bernabè, who ceased to hold office before 7 November 2013,
through the appointment of two Directors whose term of office is
due to expire together with that of the Directors in office and
therefore with a duration until the approval of the financial
statements at 31 December 2013. Having said that, as it is known
the Board of Directors proposed the appointment of Angelo Provasoli
and another candidate to be defined, which it reserved the right to
indicate later if necessary (a right it has not exercised),
notwithstanding the possibility for those entitled (i.e. all the
shareholders, in the absence of a minimum shareholding requirements
for entitlement purposes) to formulate their own proposals. It
should be noted that, on the evening of 16 December 2013, Angelo
Provasoli informed the Deputy Chairman of the Company's Board of
Directors (acting as the Chairman, in substitution) of the
renunciation of his candidacy, driven by the number of professional
and institutional commitments he had, even arisen in the meantime,
which would prevent him from dedicating enough time to
satisfactorily perform the responsibilities connected to the role
of independent Director. As regards the candidacy proposals on the
initiative of the shareholders, the notice calling the meeting
expressly provided that "The shareholders, having demonstrated
their entitlement in the forms prescribed by the applicable
regulations, will be able to formulate their proposals directly at
the meeting, or deliver them [...] no later than 18 December 2013"
either on paper or by certified electronic mail. It also provided
that "For each candidate, the following documents must be filed
together with the proposals: (i) acceptance of candidacy, (ii) a
declaration attesting that no causes of ineligibility of
incompatibility exist, and that the candidate possesses the
requisites of independence specified in Legislative Decree no.
58/1998 (the CFL) and/or the Corporate Governance Code of Borsa
Italiana (iii) an exhaustive report on the personal and
professional characteristics of the candidate, indicating any
appointments as director or auditor of any other company" and that
the information regarding the candidates, presented within the
deadlines, once the necessary checks have been made, would be
published on the company website www.telecomitalia.com/assemblea.
Thus as of 16 December 2013 the only candidacy received was that of
the shareholder Massimo Consoli (which was published on the company
website on 13 December 2013). If other candidacies are received by
18 December 2013, the Company will publish them once it has
ascertained the legitimacy of the proposers (i.e. essentially the
presence of an ad hoc communication or a communication for the
exercising of the right to vote in the Shareholders' Meeting of 20
December 2013, duly received from an intermediary and in favour of
the proponents). The proposal to appoint Massimo Consoli (and other
additional candidacies that may be submitted by the deadline of 18
December 2013) will be put to the vote separately and in
succession, and their approval will be subject to the ordinary
majorities required by law: the absolute majority of the votes
pertaining to the shares with which those entitled attend the
Shareholders' Meeting. If more candidacies are received by 18
December 2013 from shareholders with legitimate rights, the
publication order will be followed.
If the appointment of two Directors does not occur based on the
proposals published before the shareholders' meeting, the Chairman
of the meeting shall invite those participating in the
shareholders' meeting to formulate proposals, and to that end
establishing a specific deadline and the appropriate operating
procedures, and all those present shall be entitled to do so. As
for the voting order for the various proposals formulated during
the meeting, the same considerations made before apply for cases
where it is necessary to appoint some Directors to integrate the
total number of members of the Board, in the case of the full
renewal of the board. *** With regard to the topics on the Agenda
of the extraordinary Shareholders' Meeting, the Company excludes
the need for specific clarifications in addition to what was
indicated in the illustrative reports made available in view of the
shareholders' meeting. For completeness, it should be noted that,
as per applicable law and the Regulations governing the
shareholders' meetings (available on the Company website:
www.telecomitalia.com, Governance channel): - it is the Chairman of
the meeting who establishes the order in which to discuss the
issues to be discussed and he/she has the right to provide for a
unitary discussion on several items on the agenda: - the
participants in the Shareholders' Meeting may put forward, giving
reasons, proposals for alternative resolutions or with amendments
or additions with respect to those put forward by the Board of
Directors itself or by the shareholders who have requested the
addition of the item to the agenda. The Chairman of the meeting
shall evaluate the compatibility of such proposals in relation to
the agenda of the meeting and to the applicable provisions; - the
Chairman of the meeting establishes the order for voting on the
proposals on different items on the agenda. For specific
information on the items on the agenda of the Shareholders'
Meeting, refer to the documentation available on the company
website www.telecomitalia.com/assemblea.
Telecom Italia Ufficio Stampa
+39 06 3688 2610 http://www.telecomitalia.com/media
Telecom Italia Investor Relations
+39 02 8595 4131
http://www.telecomitalia.com/investorrelations
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