Proposal for the purchase and for the determination of the modalities for the disposals of treasury shares. Related and consequent resolutions. Delegation of powers

Dear Shareholders,

we submit to Your approval the request to authorize the buy back and sale of treasury shares pursuant to articles 2357 and 2357-ter of the Italian Civil Code and article 132 of Legislative Decree no. 58 of February 24, 1998, on the basis of the rationale and in accordance with the terms and conditions described below.

1. RATIONALE OF THE REQUEST FOR AUTHORIZATION

The assumptions and the main goals that the Board of Directors intends to pursue through the transactions that we propose you to authorize are the following:

  • to buy back shares of the Company with a medium to long-term investment view;
  • to intervene, in compliance with the applicable laws and regulations, directly or trough intermediaries, in order to minimize abnormal trends of the market price and to regularize the trend of the transactions and the trades, in the event of temporary abnormal circumstances related to an excess of volatility or a limited liquidity in trading;
  • to get a portfolio of treasury shares available in the context of possible extraordinary corporate finance transactions or for any different purposes that should be considered to be financially, managerial and/or strategically useful for the Company;
  • to offer to the Shareholders an additional instrument for monetizing their own investment.

With specific regard to the request for the authorization to buy back shares of the Company, we specify that, currently, such request is not connected with any share capital decrease to be executed by means of the annulment of the purchased treasury shares.

2. MAXIMUM NUMBER, CATEGORY AND NOMINAL VALUE OF THE SHARES TO WHICH THE AUTHORIZATION REFERS

The fully subscribed and paid-in share capital is represented by no. 5,233,142.03 ordinary shares, with a nominal value of Euro 0.29 each, and by no. 134,764.429 saving shares with same nominal value of Euro 0.29 each and amounts to a total value of Euro 1,556,692,865.28.

As at today, the Company holds directly no. 2,617,500 ordinary treasury shares and no. 4,491,769 saving treasury shares, which altogether represent 0.13% of the share capital of the Company, while it does not hold any treasury share through any of its subsidiaries.

In the light of the above, we propose to authorize the Board of Directors to buy back shares of the Company, once or more times, for an amount that the Board shall determine without restriction, up to the maximum amount provided by the law and, therefore, so that the nominal value of the purchased treasury shares shall not exceed 10% of the share capital of the Company, taking into account both the treasury shares directly held by the Company and those possibly held through its subsidiaries.

In any case, the purchases shall be made, in accordance with article 2357 of the Italian Civil Code, within the limit of disposable income and available reserves as set forth in the last regularly approved financial statements of the Company.

3. INFORMATION USEFUL TO VERIFY THE COMPLIANCE WITH ARTICLE 2357,
PARAGRAPH 3, OF THE ITALIAN CIVIL CODE.

The draft financial statements of the Company as at December 31, 2007, approved by the Board of Directors held on March 26, 2008 and submitted for approval, together with this proposal for authorization, to the Shareholders’ Meeting called today, shows available reserves totally amounting to more than Euro 418 million.

It must be noted that, in the event of buy back, transfer, exchange or contribution of the treasury shares, the appropriate accountancy registrations shall be made, according to the applicable laws and regulations and accountancy principles. In the event of sale, exchange and contribution, the amount so obtained may be used again for further buy backs until the term of the authorization granted by the Shareholders’ Meeting will be expired, without prejudice and in compliance with the limits pertaining to the quantity and the costs, as well as without prejudice and in compliance with the conditions set by the Shareholders’ Meeting

4. DURATION OF THE AUTHORIZATION

The Board of Directors proposes that the authorization to buy back shares of the Company shall be granted for 18-month period from the date on which the Shareholders’ Meeting shall adopt the relevant resolution. The Board shall carry out the authorized transactions, one or more time, and in any time.

5. MINIMUM AND MAXIMUM PRICE

The purchase price of the shares shall be fixed each time, taking into account the type of transaction and in compliance with any possible regulatory provisions or admitted market practices, but, in any case, it shall be neither lower nor higher than 15% of the weighted average of the Italian Stock Exchange official prices of the shares at the three Italian Stock Exchange sessions preceding each transaction.

The sale of the treasury shares shall be executed at the price, or, in any case, in accordance with the terms and conditions set by the Board of Directors, taking into account the modalities chosen for the execution of the relevant transaction, the trend of the shares’ prices in the period preceding the transaction and the best interest of the Company.

6. PROCEDURES FOR THE EXECUTION OF THE TRANSACTIONS

Considering that the transactions on treasury shares may have different purposes, the Board of Directors proposes that you authorize to execute the buy backs by means of any procedure admitted by the current laws and regulations, to be determined each time by the Board at its discretion and, therefore, as at today, by means of:

  • tender offer or public exchange offer;
  • purchases carried out on regulated markets, in accordance with the procedures provided by Borsa Italiana S.p.A. having the features requested by article 144-bis of the Consob Regulation no. 11971 of May 14 1999;
  • buy back and sale of derivatives traded on regulated markets which provide for the material delivery of the underlying shares and at the conditions determined by Borsa Italiana S.p.A.
  • granting to the shareholders put options - in proportion to their holdings - to be exercised within the duration of the authorisation indicated in paragraph 4 above.

The Board of Directors proposes that you authorize to execute the sales pf treasury shares by means of any procedure that should be considered to be appropriate in order to achieve the relevant purpose – including the use of the treasury shares in the context of share incentive plans – and that shall be executed directly or through intermediaries, in compliance with the applicable laws and regulations, both domestic and of the European Community.

The buy backs and sales of treasury shares for which the authorization is requested shall be executed in accordance with the applicable laws and regulations and, in particular, in accordance with the applicable laws and regulations, both national and of the European Community, concerning the market abuse.

The buy backs and sales of treasury shares shall be properly notified in accordance with the applicable disclosure requirements.

7. POSSIBLE ANNULLMENT OF THE TREASURY SHARES

As previously said, the buy back is not connected with any share capital decrease to be executed by means of the annulment of the purchased treasury shares.

In the light of the above, we deem therefore useful to propose that you grant an authorization for this purpose.

If you agree with our proposal, we invite You to approve the following

Resolution

“The Ordinary Shareholders’ Meeting:

  • having considered the Directors’ proposal;
  • having considered articles 2357 and 2357-ter of the Italian Civil Code, article 132 of Legislative Decree 58/1998 and article 144-bis of Consob Regulation no. 11971 of May 14, 1999;
  • having considered that, as at today, the Company directly holds no. 2,617,500 ordinary treasury shares and no. 4,491,769 saving treasury shares, which altogether represent 0.13% of the share capital of the Company, while it does not hold any treasury share through any of its subsidiaries;
  • having considered the financial statements as at December 31, 2007;

Resolves

a) to authorize the Board of Directors to purchase shares of the Company having a nominal value of Euro 0.29 each, within the threshold provided for by article 2357 of the Italian Civil Code which is equal to the 10% of the share capital of the Company at the time outstanding, taking into account the treasury shares held by the Company and those possibly held by its subsidiaries, resolving that:

• the purchase shall be made through one or more transactions within 18 months of the date of this resolution;

• the purchase shall be executed by means of any procedure provided by the combined provision of article 132 of Legislative Decree no. 58 of February 24, 1998 and article 144-bis of Consob Regulation n. 11971 of May 14, 1999, also considering the specific exemption provided for by paragraph 3 of same article 132 of Legislative Decree no. 58 of February 24, 1998 and, in any case, by means of any other procedure allowed by the current laws and regulations, both domestic or of the European Community, and in accordance with any other applicable provision, including laws and regulations, both national and of the European Community, even concerning the market abuse;

• buy backs and sales of the shares of the Company shall be properly notified in accordance with the applicable disclosure requirements.

• the purchase price of each share shall be neither lower nor higher than 15% of the weighted average of the Italian Stock Exchange official prices of the shares at the three Italian Stock Exchange sessions preceding each transaction.

• the purchase shall be made using disposable income and available reserves as set forth in the last regularly approved financial statements of the Company at the time of the transaction, and it shall imply the constitution of a treasury shares reserve and, in any case, any other accounting registrations in compliance with terms and conditions provided for by the applicable laws;

all the above, in any case, in accordance and in compliance with any other possible law and regulation at the time applicable;

b) to authorize the disposal, in all or in part, both directly or though intermediaries, and without any time limit, of treasury shares purchased in accordance with the resolution under paragraph a), even before having exercised in full the authorization for the purchase of shares of the Company and in accordance with the purposes allowed by the law and by means of any procedure allowed by the law, including the use of treasury shares for share incentive plans, and again in accordance with any other applicable laws and regulations, including laws and regulations, both domestic and of the European Community, pertaining to market abuse.
The sale may be made in one or more transactions and in any time, even through a tender offer, an offer to shareholders, an offer on the market or in the context of possible extraordinary transactions. The shares may be sold also in combination with bonds or warrants, in order to be delivered further to the exercise of such bonds and warrants and, in any event, in accordance with the procedures allowed by the current laws and regulations, at the discretion of the Board of Directors.
The disposal of the treasury shares shall be executed at the price, or in any event, in accordance with the criteria and the conditions resolved by the Board of Directors, taking into account the modalities chosen for the execution of the relevant transaction, the trend of the shares’ prices in the period preceding the transaction and for the best interest of the Company.
The disposals shall be executed, in any event, by means of the modalities allowed by the current laws and regulations, at the discretion of the Board of Directors;

c) to make, pursuant to article 2357-ter, par. 3 of the Italian Civil Code, any appropriate or necessary account recording related to transactions on treasury shares, in accordance with the current applicable laws and regulations and accounting principles.

d) to grant to the Board of Directors – and, on its behalf, to the Chairman and the Vice-Chairman, even not jointly – the broadest powers in order to execute buy backs and sales of treasury shares, also by means of subsequent transactions and, in any event, to execute the previous resolutions, even through attorneys, complying with what possibly requested by the competent authorities.”

The Board of Directors

Milan, March 26, 2008