Information on ownership structure

Share capital structure (pursuant to Article 123-bis, paragraph 1, letter a) of the Consolidated Law on Finance)

The Company’s share capital as of March 20, 2012 amounts to 442,198,240.00 and comprises exclusively nominal ordinary shares, for a total of 2,009,992,000 ordinary Terna’s shares with a nominal value of 0.22 each. They are fully paid-up and bear voting rights at both the ordinary and extraordinary Shareholders’ Meetings. Ordinary shares grant further administrative and financial rights provided for by the Law regulating the shares with right to vote.

As of June 23, 2004, Terna’s shares have been listed in the Electronic Stock Exchange organized and managed by Borsa Italiana S.p.A. (Telematic Share Market - Blue Chip segment).

Pursuant to Article 5.2 of the Company Bylaws, the Shareholders’ Meeting can approve capital increases through share issuance, also belonging to special categories, to be assigned free of charge pursuant to Article 2349 of the Italian Civil Code for employees, or rather as payment, and with the exclusion of the option right under Article 2441 of the Civil Code, in favor of subjects identified by shareholders.

In compliance with this provision of the Company Bylaws, the Shareholders’ Meeting held on April 1, 2005 resolved only one share-based incentive plan that was utilized in full in 2011 and that included increasing the share capital according to the provisions in the subsequent paragraph “Powers to increase the share capital and authorizations for the purchase of treasury shares”.

The Company did not issue other financial tools granting the right to subscribe newly issued shares.
Terna did not issue shares that were not negotiated on regulated markets of a country in the EU.

 

Significant interests participations in share capital and shareholders agreements (pursuant to Article 123-bis, paragraph 1, letters c) and g) of the Consolidated Law on Finance)

On the basis of the shareholders’ book, communications received pursuant to CONSOB Resolution no. 11971/99 and available information, and with reference to the Company’s share capital as of March 20, 2012, equal to 442,198,240.00 for a total of 2,009,992,000 ordinary Terna’s shares with a nominal value of 0.22 each, the following investors hold more than 2% of the share capital: Cassa Depositi e Prestiti S.p.A. (public limited company in which the Italian Ministry of Economy and Finance of the Italian Republic owns 70%), with 29.851% of the share capital; Romano Minozzi (directly and indirectly) with 5.580% of the share capital; BlackRock Inc. (through management company BlackRock Group, for savings management ) with 2.390% of the share capital.

No other investors own more than 2% of Terna S.p.A.’s share capital and the Company is not aware of the existence of any shareholders’ agreement relating to the Company shares.

 

Powers to increase share capital and authorization for the purchase of treasury shares (pursuant to Article 123-bis, paragraph 1, letter m) of the Consolidated Law on Finance)

The power granted to the Board of Directors to increase the share capital resolved by the extraordinary Shareholders’ Meeting held on April 1, 2005 was exercised through the adoption of a share-based incentive plan aimed at Terna Group’s executives and in force from 2006 up to its complete exhaustion, which took place in 2011, with the exercising of all the Stock Options still in circulation.

The abovementioned Stock Option plan brought about an increase in the share capital of 2,198,240.00 through the issuance of 9,992,000 new ordinary Terna’s shares, each with a nominal value of 0.22.

It should be remembered that the extraordinary Shareholders’ Meeting of April 1, 2005 had resolved the assignment of a five-year proxy to the Board of Directors for a share capital increase for maximum 2,200,000 through the issuance of maximum 10,000,000 ordinary shares with a nominal value of 0.22 each, on a dividend-right basis, to be offered for subscription to Terna Group’s managers as payment with exclusion of the option right under the combined provisions of Article 2441, last paragraph, of the Civil Code and Article 134, paragraph 2 of the Consolidated Law on Finance, as provided for by Article 5.3 of the Company Bylaws.

Pursuant to the Shareholders’ Meeting resolution of April 1, 2005, on December 21, 2005, Terna’s Board of Directors had adopted a share-based incentive plan. With reference to the adopted plan, the Board of Directors of March 21, 2007 had partially exercised the abovementioned proxy, approving a share capital increase regarding the 2006 Stock Option Plan up to maximum 2,198,240.00 through the issuance of maximum 9,992,000 new ordinary Terna’s shares with a nominal value of 0.22 each, at 2.072 each, to be implemented in compliance with Article 5.4 of the Bylaws. Based on extraordinary Meeting resolution dated April 22, 2009, the maximum date for the total subscription of the increase was set for March 31, 2013.

No other proxies to increase capital have been assigned, pursuant to Article 2443 of the Civil Code.

No resolution authorizing the purchase of treasury shares under Article 2357 and following of the Civil Code has been submitted to Terna’s Shareholders’ Meeting.

Terna does not own, nor has purchased or sold during the year, not even indirectly, treasury shares or shares of its parent company.

 

Employees’ shareholding: system to express the right to vote (pursuant to Article 123-bis, paragraph 1, letter e) of the Consolidated Law on Finance)

The system for expressing the right to vote during the Shareholders’ Meeting through shareholding associations, including employee’s shareholding groups, is regulated based on the existing specific legal provisions on the subject.
Based on the provisions regarding the special legislation on listed companies, Terna’s Bylaws introduced a special provision aimed at facilitating collecting voting proxies with its employees’ shareholding groups as well as of its subsidiaries, encouraging in this way the relative involvement in the meeting decision-making processes (Article 11.1 of the Bylaws).

As of March 20, 2012 the Company had not received any notification of the establishment of employees’ shareholding groups.

 

Change of control clauses (pursuant to Article 123-bis, paragraph 1, letter h) of the Consolidated Law on Finance) and statutory provisions in takeover bid matters (ex Article 104, paragraph 1 ter, and 104 bis, paragraph 1 of the Consolidated Law on Finance)

As regards significant agreements Terna or any of its subsidiaries are parties of and that come into effect, are amended or expire in the event of shareholding change within Terna, the following should be noted.

The loan contracts stipulated with the European Investment Bank (EIB) include mandatory advance repayment clauses in the event the Company proceeds to or is involved in a merger, a split or transfer of a Company branch. Should such events occur, the EIB will have the power of requesting, and the Company will have the obligation to inform the Bank, any information that the latter may reasonably require regarding the Company situation, in order to understand any changes and relative consequences in the Company’s commitments towards the Bank. In such cases, should the EIB deem, according to its indisputable judgment, that these transactions may have negative consequences on the commitments undertaken by the Company, the bank itself will have the power to request the necessary changes in the loan contracts or alternative solutions that satisfy the Bank itself, such as early reimbursement of the loan.

With regard to takeover bids and public tender offers to exchange, the Company Bylaws do not provide for any derogation of the provisions in the Consolidated Law on Finance on the so-called passivity rule provided for by Article 104, paragraphs 1 and 1 bis of the Consolidated Law on Finance, nor are there neutralization rules as established Article 104 bis, of the Consolidated Law on Finance, without prejudice to - pursuant to Article 104 bis, paragraph 7 of the Consolidated Law on Finance - law and statutory provisions regarding special powers as provided for in Article 2 of Law Decree no. 332 dated May 31, 1994 converted with amendments by Law no. 474 dated July 30,1994, with subsequent modifications and amendments – the so-called “Law on Privatization”, and concerning limits on share possession and the right to vote pursuant to Article 3 of the same Law Decree.

 

Restrictions on share transfer and shares bearing special rights (pursuant to Article 123-bis, paragraph 1, letters b) and d) of the Consolidated Law on Finance)

No Bylaws limitations exist to the availability of shares except for the provisions stated by the Bylaws regarding rules for privatization based on the Law Decree no. 332 dated May 31, 1994 converted with amendments by Law no. 474 dated July 30, 1994 and subsequent changes – the so called “Privatization Law”.
In particular, pursuant to Italian regulations concerning privatizations, Terna’s Bylaws provides for the possibility for the Government to exercise certain “special powers” and establishes a “maximum limit of share ownership” – equal to a direct and/or indirect ownership of Terna’s shares for more than 5% of the share capital – for subjects other than the Italian Government, state-controlled companies and entities subject to either control: the implementation of those provisions, in some circumstances as indicated by the Bylaws, has effects also on the voting right.
“Special powers” (indicated by Article 6.3 of the Bylaws, pursuant to Article 2, paragraph 1, of Legislative Decree no. 332 of May 31, 1994, converted with modifications by Law no. 474 of July 30, 1994 and following integrations and amendments – so-called “Privatization Law” – as provided for by Article 4, paragraph 227, of Law no. 350 of December 24, 2003) can be exercised by the Italian Government, represented in this case by the Ministry of Finance and Economy, notwithstanding the number of Terna’s shares potentially owned by the Ministry itself.
In particular, the Ministry of Finance and Economy, as agreed with the Ministry of Productive Activities (now called Ministry for Economic Development), is assigned the following “special powers”: a) opposition to relevant ownership (that is equal or higher than 1/20th of Terna’s share capital formed by shares bearing right to vote in Shareholders’ Meetings) by entities subject to the ownership restriction presented above. The opposition must be expressed within 10 days from the date of the communication, which must be made by Directors at the request of subscription in the shareholders’ book, only when this may jeopardize the vital public interest. In the meantime, the right to vote and non-financial rights related to shares representing the relevant ownership, are suspended; b) opposition to shareholder agreements under the Consolidated Law on Finance, in case at least 1/20th of Terna’s share capital, including shares bearing right to vote at Shareholders’ Meetings, is thereby represented. Opposition must be expressed within 10 days from the date of communication that must be made by CONSOB. In the meantime, the right to vote and non-financial rights related to shares of shareholders that are parties of the agreements, are suspended; c) veto, dutifully motivated, in relation to concrete jeopardy of the vital public interest, to the adoption of provisions for the winding-up of the Company, of transfer, merger, division, moving abroad of the registered offices, of Company Corporate purpose change, of Bylaws amendments suppressing or modifying powers indicated by the same Article 6.3 of the Bylaws; d) appointment of one Director with no right to vote. In case of termination of the assignment of the appointed Director, the Ministry of Economy and Finance, in agreement with the Ministry for Productive Activities (now called Ministry for Economic Development), will appoint the substitute.
The power of opposition under letters a) and b) can be exercised with reference to each aspect. It can also be exercised when ownership, also through single purchase acts, records an increase which is equal or higher than expectations. Such power can also be exercised every time the need to protect mandatory public interest arises, within ten days from their actual occurrence. In this case, the act of exercising the State power must include explicit and motivated reference to the date such causes arose.
The special powers under letters a), b), c) and d) are exercised with respect of the criteria provided for by the Prime Minister Decree of June 10, 2004.
The “maximum limit of share ownership” (provided for by Article 6.4 of the Bylaws and pursuant to Article 3 of Legislative Decree no. 332 of May 31, 1994, converted with modifications by Law no. 474 of July 30, 1994 and following amendments and additions (“Privatization Law”) is calculated also considering total share ownership related to the Parent Company, natural person or legal entity or company; to all direct and indirect subsidiaries as well as the subsidiaries under the same controlling subject; to all associated subject as well as to natural persons bound by parental or affinity relationships up to second grade and by marriage, in the event that husband/wife are not legally separated. Control occurs, also with reference to subjects other than companies, in cases provided for by Article 2359, paragraphs 1 and 2, of the Civil Code. Association occurs in cases under Article 2359, paragraph 3, of the Civil Code, as well as between subjects who, directly and indirectly, through subsidiaries other than those managing common investment funds, join, also with third parties, agreements related to the exercise of the right to vote or to the transfer of shares or portions of third companies or, anyway, to agreements or pacts as per Article 122 of the Consolidated Law on Finance, with reference to other companies, if these agreements or pacts refer to at least 10% of the share capital with right to vote, in case of listed companies, or 20% in case of non-listed companies. With reference to the calculation of the abovementioned limit of share ownership (5%), shares owned through trustees and/or through a third person and, generally, through an intermediary person are also considered.
Such limit of share ownership terminates, if exceeded due to a takeover bid carried out under articles 106 or 107 of the Consolidated Law on Finance.
The right to vote related to share ownership exceeding the abovementioned maximum limit cannot be exercised and proportionally reduces the right to vote of each subject to whom the limit in share ownership refers to, except in the event of joint communications by the involved shareholders. In case of non-compliance, decision can be appealed under Article 2377 of the Civil Code if the requested majority would not be achieved without the votes exceeding the abovementioned limit. Shares for which the right to vote cannot be exercised are calculated anyhow for the regular formation of the Shareholders’ Meeting.

 

Voting Restrictions (pursuant to Article 123-bis, paragraph 1, letter f) of the Consolidated Law on Finance)

Pursuant to privatization regulations, restrictions exist (under articles 6.3 and 6.4 of the Bylaws) to the right to vote related to the exercise of “special rights” of the Italian State and to the limits of share ownership as mentioned earlier.
Further restrictions are applied to operators of the electricity sector (as provided for by Article 3 of the Prime Minister’s Decree dated May 11, 2004 as regards “criteria, modalities and conditions for the unification of ownership and management of the National Electricity Transmission Grid”) for which a limit equal to 5% of the share capital was established for exercising the right to vote in case of Directors’ appointment (Article 14.3, letter e) of Company Bylaws).

 

Appointment and substitution of Directors and Bylaws amendments (pursuant to Article 123-bis, paragraph 1, letter I) of the Consolidated Law on Finance)

Appointment, requirements and term of office of Directors

Terms for appointing members of the Board of Directors are ruled by Article 14 of the Bylaws.
As determined by the Shareholders’ Meeting, the Board of Directors is made up of seven to thirteen members (art 14.1 of the Bylaws), who are appointed for a period not longer than three years and they may be reappointed at the end of their term. Another Director without voting right may be appointed by the Italian Government, pursuant to privatization regulations; up to now, the Italian Government never exercised the power of appointment.
The Chairman is appointed by the Shareholders’ Meeting among the members of the Board (Article 16.1 of Bylaws and Article 2380-bis, paragraph 5 of the Civil Code): in case of impossibility, by the Board itself. The Board can appoint a Deputy Chairman. In no case such positions can be held by the Director appointed by the Italian Government under the Privatization Law (Article 16.1 of the Company Bylaws).
The appointment of the entire Board of Directors takes place – in compliance with the privatization regulation, under Prime Minister’s Decree of May 11, 2004 and in compliance with the provisions of the Italian Law for listed companies – according to the mechanism of the "list voting", aiming at guaranteeing the presence in the management body of members designated by minority shareholders equal to 3/10th of the Directors to be appointed with rounding, in case of lower fractional number to the unit, to the following unit (Article 14.3 of the Bylaws).
On October 18, 2010, Terna’s Board of Directors approved the amendments to the Bylaws necessary for adjusting the Company Bylaws to the novelties introduced by law provisions regarding shareholders’ rights of listed companies aiming at favoring the participation of shareholders in the life of the Company (Directive 2007/36/EC and relative implementing Legislative Decree no. 27 dated January 27, 2010). Among other things, amendments involved Article 14.3 of the Bylaws regarding the appointment procedure for the Board of Directors and the terms and modalities for depositing the lists.
Such amendments were applied for the first time on occasion of the Meeting which was held on May 13, 2011 that resolved the renewal of the company bodies which had expired.
On the basis of the provisions and references in the Bylaws, the deposit and publication of lists are ruled by existing applicable laws.
Such appointment system – which does not apply to the appointment of a Director indicated by the Italian Government – states – in line with the provisions of Article 4, paragraph 1 bis of Legislative Decree no. 332 dated May 31, 1994 converted into Law no. 474/94 (so called “Privatization Law”) and modified by Legislative Decree no. 27 dated January 27, 2010, by Article 147 ter of the Consolidated Law on Finance and by the implementing regulations of the abovementioned law provisions included in articles 144 ter and following of the Issuer Regulations – establishes that the lists of candidates can be submitted by the outgoing Board of Directors or by shareholders who, alone or with other shareholders, represent at least 1% of the share capital as provided for by the law – or a lower amount, as established by the law, of the shares with voting right in the Meeting. On this matter CONSOB, implementing the provisions of Article 147 ter of the Consolidated Law on Finance and of articles 144 ter and following of the Issuer Regulations - with Resolution no. 17633 dated January 26, 2011 and for the year ended on December 31, 2010 - established the participation stake necessary for submitting candidate lists for the appointment of Terna’s administration and control bodies at 1% of the share capital, taking into account the Company’s capitalization, floating capital and owned assets and without prejudice to the lower share contemplated by the Bylaws.
The lists must be submitted and filed at least 25 days prior to the day set for the Shareholders’ Meeting on first call.
Ownership of the minimum share required to submit lists shall be determined by taking into account the shares that are registered in the name of the Shareholder(s) on the day in which the lists are filed with the Company.
In order to prove the legitimacy of presentation of the lists, entitled Shareholders must present and/or deliver the documentation proving the ownership of the number of shares required, even after the lists have been filed but within the time period set for the publication of the lists (i.e., at least 21 days prior to the day set for the Shareholders’ Meeting on first call).
Each Shareholder may present or assist in the presentation of one single list and each candidate may be on one list only or he will be considered ineligible.
The lists must indicate candidates according to a progressive number and which of them are in possession of the independence requirements as provided for by the law and the Bylaws, and any other information or statement required by the applicable rules and regulations and the Bylaws pertaining to their respective offices.
Together with each list, a statement shall be filed, whereby individual candidates accept their candidature and represent, under their responsibility, the inexistence of any of the causes for ineligibility and incompatibility, as well as any other information required by the applicable rules and regulations and the Bylaws.
On the basis of a clause in the notice of call for the Meeting and pursuant to Article 6 of the Governance Code, together with the lists, a detailed description of the candidates' personal and professional characteristics must be provided, accompanied by a statement indicating as to whether or not the candidates qualify as independent according to Article 3 of the Governance Code.
It is also provided that the lists, together with the information on the characteristics of candidates, are made available to the public at the registered office, on the Company’s website and based on other modalities as provided for by CONSOB, at least 21 days before the Shareholders’ Meeting - guaranteeing a transparent procedure for the appointment of the Board of Directors as recommended by Article 6.C.1 of the Governance Code.
According to the provisions of Article 147-ter, paragraph 3 of the Consolidated Law on Finance, at least one of the members of the Board of Directors should be appointed by the minority list that has obtained the highest number of votes and is not connected in any way, not even indirectly, with the members who have submitted or voted the list that won for a number of votes. Shareholders that submit a “minority list” are the recipients of CONSOB Communication no. DEM/9017893 dated February 26, 2009 having as its subject “Appointment of the members of administration and control bodies”.
In compliance with the provisions of Prime Minister’s Decree dated May 11, 2004, the Bylaws envisages for operators of the electricity sector a limit equal to 5% of the share capital as regards the exercise of the voting right during the appointment of the Directors according to the abovementioned rules.
Any replacement of Directors will be carried out pursuant to Article 2386 of the Civil Code.
In any case, the replacement of Directors whose office has ended will be carried out by the Board of Directors guaranteeing the presence of the necessary number of Directors in possession of the requirements of independence established by the Law and by Article 15.4 of the Bylaws.
If the majority of the Directors appointed by the Shareholders’ Meeting is not reached, the entire Board of Directors is considered as having resigned and the Shareholders’ Meeting must be called without delay by the Directors still in office for appointing a new Board.
The Director must meet the requirements of integrity, professionalism and independence.
The Company’s Directors must meet certain integrity and professionalism requirements, similar to those required by the Statutory Auditors of listed companies (Article 15.2 of the Bylaws). The appointed Directors must communicate without hesitation the loss of requirement as per current regulations and according to the Bylaws to the Board of Directors, as well as any possible cause of ineligibility or incompatibility (Article 14.3 of the Bylaws).
As regards the requirements of professionalism, the Bylaws (Article 15.3) provides that those who have not accrued experience of at least three years cannot be appointed as Director and, if so, they must resign:

  • activities of administration, control or management in companies having a share capital not lower than 2 million; or
  • professional activities or university teaching in legal, economic, financial and technical-scientific subjects and closely related to the activities of the Company as defined in Article 26.1 of the Bylaws; or
  • managing roles in public bodies or public authorities in the finance and insurance fields or, however, in fields closely related to that of the Company, as defined by the Article 26.1 of the Bylaws (subjects such as business law, tax law, business economy and finance, as well as subjects linked to energy in general, the network communications and structures, are to be considered as closely related to the Company's scope of activities).

With stricter application compared to the provisions of Article 147-ter paragraph 4 of the Consolidated Law on Finance, at least 1/3rd of the Directors in force must also be in possession of specific requirements of independence under Article 15.4 of the Bylaws that recalls the requirements of the Auditors indicated by Article 148, paragraph 3 of the Consolidated Law on Finance; furthermore, in line with the provisions of Article 3 of Prime Minister’s Decree dated May 11, 2004, Executive Directors, taking into account the specific activity carried out by the Company, can be applied the independence requirements established by Article 10 of Directive 2003/54/EC as stemming from Article 15.5 of the Bylaws.
The presence of "Independent" Directors as provided for by the Governance Code becomes important in the composition of the Board Committees, as provided for by the Code itself and by the Committee for Related Party Transactions established within Terna for implementing the provisions of CONSOB Regulations that include provisions regarding related party transactions issued with Resolution no. 17221 dated March 12, 2010 and subsequently amended with Resolution no. 17389 dated June 23, 2010.
The Board of Directors assesses the presence of integrity, professionalism and independence requirements, for every one of its members and periodically assesses the presence of requirements of independence for every one of its non-executive members, on the basis of the information supplied by each member.
The Company is equipped with a specific internal procedure that defines the criteria for the assessment of independence of the non-executive members and for the assessment of the requirements necessary according to the Bylaws and the Governance Code ("Criteria of application and procedure for the assessment of independence of the Directors pursuant to Article 3 of the Governance Code"). Such procedure demands the assessment of requirements following the appointment, that is every time events take place that can interfere with the independence of a Director and however at least once a year (generally in the 30 days before the approval of the financial statements).

 

Succession Plans

According to CONSOB’s previous recommendation with Communication no. 11012984 dated February 24, 2011 and recently provided for within paragraph VIII of the “Guidelines and Transitional Regime” of the new edition of the Governance Code published in December 2011, it should be noted that the Board of Directors, taking into account assets owned by Terna and the concentration of ownership, did not consider any succession plans for Executive Directors.

 

Bylaws Amendments

With regard to regulations applicable to the amendments of the Bylaws, the extraordinary Shareholders’ Meeting resolves on the matter with the majority envisaged by the Law.
The Bylaws (Article 21.2), according to Law provisions, attributes the Board of Directors the power to adopt any resolutions pertaining to the Shareholders’ Meeting that can determine Bylaws amendments such as: a) the merger and the split, in cases envisaged by the Law; b)the establishment or elimination of other offices; c) stating which of the Directors represents the Company; d)the reduction of the share capital in case one or more members withdraws; e) the amendment of the Bylaws according to regulations; f) the transfer of the Company headquarters in the national territory.
Article 6.3 of the Bylaws, in compliance with the regulations on privatization, attributes to the Italian Government, represented for this purpose by the Ministry of Economy and Finance, the “special power” to veto, duly motivated with reference to effective detriment of the Government’s vital interests, on the adoption of a series of resolutions adopted by the Shareholders’ Meeting of significant impact on the Company, capable of amending the Bylaws, as previously described in “Restrictions in share transfer and shares bearing special powers”.
Furthermore, as provided for by Article 3, paragraph 3 of Legislative Decree no. 332 of May 31, 1994, converted with modifications by Law no. 474 of July 30, 1994 and Article 3, paragraph 2, letter c) of the Prime Minister's Decree dated May 11, 2004, Terna’s Bylaws provides that the measures as per Article 6.4 of the Company Bylaws relative to the abovementioned "maximum limit of share ownership" as described under “Restrictions in share transfer and special powers” and those included in the Bylaws that have the purpose to ensure protection of the share minorities, cannot be modified for a period of three years from the date of effectiveness of the transfer to Terna of the activities, functions, assets and obligations relative to the management of the National Electricity Transmission Grid as per Article 1, paragraph 1 of the Prime Minister's Decree dated May 11, 2004 (November 1, 2005).

 

Indemnities for Directors in case of resignation, discharge or cessation of relation following a public take-over bid (pursuant to Article 123-bis, paragraph 1, letter i) of the Consolidated Law on Finance)

With reference to the agreements entered into between Terna and the Directors that provide indemnities in case of resignation or dismissal/revocation of assignment with no just cause, following the renewal of the Board of Directors resolved by the Shareholders’ Meeting held on May 13, 2011, it is pointed out that:

a) agreements exist regarding the financial compensation recognized to Terna’s CEO, who is also an employee of Terna S.p.A. as a manager, in his capacity as General Manager, on the basis of which indemnities are envisaged in case of early resignation from the appointment. No other indemnities are envisaged in case of termination of the work relation for the other members of the Board of Directors;

b) on the basis of criteria established as part of these agreements, it should be noted that the Company will pay:

  • for the administration relation pursuant to Article 2389 of the civil code, an amount equal to the total emoluments expected up to the expiration of the mandate (as agreed upon, June 30, 2014) as fixed compensation, variable compensation and severance pay –TFM- (equal to 1/12th for each year of the total emoluments received during the mandate as Director);
  • for the employment relation:

i. in the event of cessation upon the expiration of the mandate, an amount as incentive to leave, equal to 3 years compensation defined as the fixed compensation plus variable compensation (in the maximum amount provided for) and long term incentive “cash” (in the maximum amount provided for);

ii. in the event of cessation before the expiration of the mandate (conventionally scheduled for June 30, 2014) in addition to the amount under point i), a pro rata temporis amount calculated on the fixed component until the natural expiration of the mandate, plus the variable retribution quota accrued in relation to reaching specific assigned objectives;

c) the right to the indemnity is not accrued in the case of voluntary resignation (not requested by the majority shareholder) or of revocation for a just cause;

d) within the abovementioned agreements, assigning non monetary benefits is not envisaged. Furthermore, entering consulting agreements is also not envisaged;

e) the abovementioned agreements do not include compensation for undertakings not to compete.

In the “Annual Report on Remuneration” - published by Terna in fulfillment of the provisions in Article 123 ter of the Consolidated Law on Finance and CONSOB resolution no. 18049 dated December 23, 2011 (published in the Official Journal no. 303 dated December 30, 2011) which, inter alia, introduced Article 84 quater to the Issuer Regulations – there is a summary of the information required by Article 123 bis, paragraph 1, letter i) of the Consolidated Law on Finance regarding agreements stipulated between Terna and the Directors which provide for indemnities in the case of resignation or dismissal/revocation with no just cause.

 

Management and coordination

 Terna is subject to the de-facto control of Cassa Depositi e Prestiti S.p.A. with 29.851% of the share capital. The assessment, from which the existence of such control emerged, has been carried out by Cassa Depositi e Prestiti S.p.A. itself and made public on April 19, 2007. As of today, no managing and coordination activity has been officialized nor exercised; Terna carries out its activity either directly or through its subsidiaries under management and negotiation independence.
It should be noted that the additional information on the Company’s Corporate Governance envisaged in Article 123-bis, paragraph 2 of the Consolidated Law on Finance regarding:

  • compliance, (pursuant to Article 123-bis, paragraph 2, letter a) of the Consolidated Law on Finance) are illustrated in the section of the Report specifically devoted thereto (section III);
  • the principal characteristics of existing risk management and existing internal control systems in relation to the financial informative note, also consolidated (pursuant to Article 123-bis, paragraph 2, letter b) of the Consolidated Law on Finance), and further Corporate Governance practices (pursuant to Article 123-bis, paragraph 2, letter a) of the Consolidated Law on Finance) are illustrated in the section of the Report devoted to internal control system (section XI) and in Attachment 1 therein;
  • the Shareholders’ Meeting activity (pursuant to Article 123-bis, paragraph 2, letter c) of the Consolidated Law on Finance) in the section of the report devoted to the Shareholders’ Meeting (section XVI);
  • the composition and the role of the Board Members as well as those relative to the appointment and composition of the control body (pursuant to Article 123-bis, paragraph 2, letter d) of the Consolidated Law on Finance and 144 decies of the Issuer Regulations), are illustrated in the Report respectively in the section devoted to the Board of Directors (section IV) and in subsequent sections devoted to the Board Internal Committees (sections VI, VII, VIII and X) and in the sections devoted to the appointment and composition of the Board of Statutory Auditors (sections XIII and XIV).