Directors’ Report pursuant
decree no. 437 of November 5, 1998 and article 72, first paragraph,
of Consob Regulation no. 11971 of May 14, 1999, as subsequently amended.
Amendment to articles 7 (Shareholders’ Meeting), 10 (Administration) and 16 (Board of Statutory Auditors) of the By-laws of the Company. Related and consequent resolutions. Granting of powers.
1. Reasons of the proposal to amend the By-laws of the Company
We have convened you, also in extraordinary meeting, to submit you the proposal to approve certain amendments to the By-laws of the Company, that are mostly aimed at conforming the By-laws to the provisions of Legislative Decree no. 58 of February 24, 1998 (“Unified Financial Act”), as subsequently amended by Legislative Decree no. 195 of November 6, 2007.
The main amendment proposals concern:
- the modification of the timing for calling the ordinary shareholders’ meeting, in order to make it compliant with the timing provided under article 154-ter of the Unified Financial Act;
- the inclusion of a mechanism aimed at ensuring the appointment of the minimum number of independent Directors required by the current regulation.
Further amendments have been proposed aimed at providing a more clear interpretation of the document also considering the interpretive opinions developed in the course of time.
The following paragraphs show in details how the above mentioned amendments affect the relevant articles of the By-laws.
Article 7 (Shareholders’ Meeting)
A formal amendment to Article 7 of the By-laws is proposed in order to make explicit that the report on the requests for the integration of the agenda of the shareholders’ meeting, submitted by the Shareholders in accordance with the Law, shall be written by same Shareholders.
A further proposed amendment to article 7 is aimed at making the By-laws compliant with the new provision of article 154-ter of the Unified Financial Act. Paragraph 1 of said article (as amended by the above mentioned Legislative Decree no. 195 of November 6, 2007, implementing the Directive 2004/109/CE on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market) provides that:
“Without prejudice to the terms of article 2429 of the Civil Code and article 156, paragraph 5, within one hundred and twenty days of the end of the financial year, listed issuers with Italy as home member state shall approve the statutory financial statements and issue the annual financial report containing the company financial statements, the consolidated financial statements, where applicable, and the directors’ report and the declaration pursuant to article 154-bis paragraph 5. The auditor reports pursuant to article 156 shall be published in full with the annual financial report”.
Therefore, the Company, being a listed issuer, cannot benefit anymore from the possibility, provided for by the second paragraph of article 2364 of the Italian Civil Code, to derogate the one-hundred-and-twenty-day term within which the annual financial statements must be approved by the Shareholders’ Meeting.
Consequently, it is hereby proposed to delete from the By-laws the provision concerning the possibility to call the ordinary Shareholders’ Meeting for the approval of the annual financial statements within one hundred and eighty days of the end of the financial year, where special circumstances make this necessary and subject to the indication of the reasons for the delay in the management report enclosed to the annual financial statements.
Article 10 (Administration)
It is hereby proposed to amend article 10 in order to provide that, if the slate voting system does not consent the appointment of the minimum number of the independent Directors required by the Law, the appointed non-independent candidate indicated with the higher progressive number in the slate which has obtained the higher number of votes, shall be replaced by the non appointed independent candidate included in the same slate on the basis of the progressive order of the presentation and so on, slate by slate, until the minimum number of independent Directors are appointed.
The amendment is essentially aimed at ensuring that the procedure for the appointment of the Directors – i.e. the slate voting system – assures that the minimum number of independent Directors required by the applicable Law (article 147-ter, par. 4, of the Unified Financial Act) is actually appointed.
Again with respect to the independent Directors, it is proposed to amend article 10 in order to clarify and make clear the consequences arising if a Director cease to comply with the independence requirements: in order to avoid any potential interpretative doubt, it is proposed to expressly state that in the event a Director cease to comply with the above mentioned requirements, he/she does not cease to be a Director provided that the Directors in office that comply with the independence requirements provided by the law are a number at least equal to the minimum number requested by the Law applicable from time to time.
Article 16 (Board of Statutory Auditors)
The first merely formal amendment is aimed at making explicit in the By-laws that the deadline for the submission of the slates of the candidates for the appointment of the members of the Board of Statutory Auditors is extended in the circumstances provided by the regulation and/or by the law.
The amendment also considers the provision of Consob Regulation no. 11971 of May 14, 1999 (“Issuers Regulation”), recently modified. Article 144-sexies, paragraph 5 sets forth, in fact, that:
“If only one slate or only slates submitted by shareholders, who, in accordance with article 144-quinquies, result to be affiliated to each other, have been filed as at the expiring date of the time limit specified in paragraph 4(1), further slates may be submitted up to the fifth day after that date […..]”
The second amendment, which is again merely formal, is aimed at improving the By-laws by using a word (“minority” slate), which is already defined in the previous paragraph of the same article.
Two clarifications and explanations are finally made concerning the principle of “required minority representation” under the new article 144-sexies, paragraph 12, of the Issuers Regulation, expressly providing that the mentioned principle is complied with in the event a Statutory Auditor, which was not a candidate by the so-called “majority slate”, is actually appointed and specifying that “minorities” are those to which the By-laws ensure the right to take part to the appointment of the Board of the Statutory Auditors.
2. Comparative description of the articles of the By-laws that are proposed to be amended.
The comparison between the current text of the articles of the By-laws that are proposed to be amended with the text submitted to Your approval is included in the proposal of resolution hereinbelow.
3. Evaluations of the Board of Directors concerning the possible occurrence of the withdrawal right.
The Board of Directors does not believe that the above mentioned amendments to the By-laws shall imply that the Shareholders are entitled to exercise the withdrawal right pursuant to article 2437 of the Italian Civil Code.