Shareholders’ Meetings

The Governance Code establishes that the Shareholders’ Meetings should be considered as special occasions to initiate fruitful dialogue between shareholders and the Board of Directors (despite the wide-ranging diversification of the communications methods used by listed companies with their shareholders, institutional investors and the market). This was carefully evaluated and fully approved by the Company, which believed it necessary to adopt specific measures to adequately improve the meetings, in addition to guaranteeing the participation of its Directors (Article 11.C.4 of the Governance Code).

Also on the basis of special legislation enacted as expected in relation to listed companies, Terna introduced into its Bylaws a specific regulation aimed at facilitating the gathering of voting proxies for shareholders who are employees of the Company and its subsidiaries, so as to involve them in the decision-making process at the Shareholders’ Meetings.
Pursuant to Article 11.1 of the Bylaws, every shareholder that has the right to attend the Shareholders’ Meeting can be represented according to the Law, through a proxy.

In order to facilitate the notification of proxies to the Company, with resolution of 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) including notification of proxies by electronic means and, according to Article 125 bis of the Consolidated Law on Finance, mentioning such terms from time to time in the notice of call. On that occasion, the Board of Directors deemed appropriate to allow shareholders the possibility to grant proxies together with specific voting instructions to a Designated Company Representative according to Article 135 undecies of the Consolidated Law on Finance without exercising the so-called opt out possibility set by the Consolidated Law on Finance (Article 11.C.3 of the Governance Code).

In order to facilitate the collection of proxies with the shareholders’ employed with the Company and its subsidiaries associated with shareholders’ associations that meet the requirements envisaged by the existing laws, according to the terms and modalities agreed upon each time with their legal representatives, these associations have made spaces available to be used for communication and for carrying out activities for collecting proxies.
The Bylaws, instead, does not envisage attendance to the Shareholders’ Meeting through telecommunications means or through the expression of the right to vote by correspondence or by electronic means.
With regard to the right to attend a Shareholders’ Meeting, the Bylaws (Article 10.1) – as modified by the Board of Directors on October 18, 2010 implementing the abovementioned Legislative Decree no. 27 dated January 27, 2010 - envisages that attendance in the Shareholders’ Meeting is allowed only to those who have the right to participate in the Meeting and to exercise the voting right pursuant to law provisions in force.

On the basis of this provision and according to existing Article 83 sexies of the Consolidated Law on Finance, eligibility to articipate in the Meeting and exercising the voting right is certified by a notice to the Company, made by an intermediary, in compliance with own accounting books, in favor of the person entitled to voting right on the basis of evidence related to the close of the accounting day of the seventh open-market day prior to the date set for the Shareholders’ Meeting in first call, the so-called “record date”.
These provisions do not entail any obstacles to the subsequent negotiations of shares. The credit and debit registrations made on accounts subsequent to said term are not material for purposes of legitimizing the exercise of the right to vote in the Shareholders’ Meeting. Therefore, those who appear as owners of the Company shares subsequent to said date will not be allowed to participate and vote in the Meeting.

The right for integration of the Agenda on the part of the shareholders’, by virtue of the postponement of general nature pursuant to Article 30 of the Bylaws, is held by the shareholders that, also jointly, represent at least 1/40th of the share capital according to the direct provisions of the Law (Article 126 bis of the Consolidated Law on Finance). On the basis of this forecast, Shareholders may submit a written request within ten days as of the publication of the Meeting’s notice of call, for the integration of the agenda with additional items, by depositing within the same time frame a report on the items to be discussed on which the proposal is made. The integration of the list of items to be discussed is allowed only for those topics on which the Shareholders’ Meeting is authorized to resolve pursuant to the Law. These topics exclude those for which the Law itself envisages that a resolution is made on the proposal by the Directors or on the basis of one of their projects or of a report they have prepared. In case of an integration to the agenda, the modified list of subjects to be discussed during the Meeting must be published according to the same terms as for the notice of call, at least fifteen days prior to the day scheduled for the Meeting.

Starting March 3, 2004, with a special shareholders’ resolution, the Company implemented a specific regulation aimed at ensuring the exact and functional running of Shareholders’ Meetings, with detailed rules for the various sectors, in compliance with each shareholders’ fundamental right to request clarifications on the various issues being discussed, express an opinion and submit proposals (Article 11.C.5 of the Governance Code). With the shareholders’ resolution of May 13, 2011, the text of the adopted “Regulations for Terna S.p.A’s Shareholders’ Meetings” was adjusted to be in line with the provisions of Legislative Decree no. 27, dated January 27, 2010 with regard to the exercising of some rights of shareholders of listed companies. On that occasion, some further adjustments were made in order to better define the scope of some provisions of the Regulations in light of the acquired enforcement practice and to ensure smoother running of the Shareholders’ Meetings. The main amendments made, which were illustrated in detail to the shareholders with an ad hoc report to the Shareholders’ Meeting, regarded provisions concerning governing the right to participate and vote in a Shareholders’ Meeting and provisions concerning the right to pose questions on the items on the agenda, also before the Shareholders’ Meeting.
In particular, with regard to the right of each shareholder to take the floor regarding the items on the agenda, Article 6 of the Regulations envisages that those entitled to exercising the right to vote can ask for the floor only once regarding the topics being discussed, presenting observations, requesting information and formulating proposals. The request to have the floor can be submitted at the time the Shareholders’ Meeting is held and – unless otherwise stated by the Chairman – until the Chairman himself has not declared the discussion on the topic closed. The terms for such request, for taking the floor and relative order, are established by the Chairman. Considering the topic and the importance of each item discussed, as well as of the number of those requesting the floor and possible questions posed by shareholders before the Shareholders’ Meeting which were not answered by the Company, the Chairman predetermines the duration of the reports and the responses – usually not to exceed ten minutes for reports and five minutes for the responses – in order to guarantee that the Shareholders’ Meeting can end its activity in a single session. The Chairman and, by his invitation, all those who assist him, respond to the speakers at the conclusion of all the reports, or after each report, taking into consideration also possible questions posed by shareholders before the Shareholders’ Meeting which were not answered by the Company. Those that have requested the floor may reply briefly.
Although said Regulation is not included in the Bylaws, it is approved by ordinary meetings under the specific power given to the shareholders by the Bylaws (Article 11.2). The contents of the Regulation have been aligned to the most sophisticated models prepared by trade associations (Assonime and ABI), for listed companies. The “Regulations for Terna S.p.A.’s Shareholders Meetings” can be found in the Company’s website under the section: “Investor Relations/Corporate Governance”.

The Board of Directors reports to the Shareholders’ Meeting on the activities carried out and planned during the financial statements approval and regarding the report on management and provides the shareholders with adequate information in a timely manner, so that they may pass resolutions with full knowledge of the facts (Article 11.C.4 of the Governance Code).

The Shareholders’ Meeting is chaired by the Chairman of the Board of Directors, or, in case of his absence or impossibility, by the Deputy Chairman, if appointed, or, in the absence of both, by another person designated by the Board of Directors; should all the above conditions not apply, the Shareholders’ Meeting appoints its own Chairman (Article 12.1 of the Bylaws).

The Chairman of the Shareholders’ Meeting is assisted by a secretary, even if not a shareholder, designated by those present upon the request of the Chairman, and can appoint one or more vote counters (Article 12.2 of the Bylaws and Article 4 of the Regulations for Terna S.p.A’s Shareholders’ Meetings). The assistance of the secretary, according to the terms envisaged by the Law, is not necessary if the Chairman waives said assistance or when the minutes of the Shareholders’ Meeting are prepared by a notary public, even outside cases in which it is mandatory by law (Article 4 of the Regulations for Terna S.p.A’s Shareholders’ Meetings).
The Shareholders’ Meeting, unless otherwise stated by the terms envisaged by Article 21.2 of the Bylaws, assigns to the Board of Directors, according to the terms established by the Law, the power to adopt certain resolutions that fall under the Shareholders’ Meetings duties that can determine amendments to the Bylaws and resolves on all the topics as established by the Law or the Bylaws (Article 13.1 of the Company Bylaws) according to the indications in the foregoing Section I under the heading: “Company Organization”.

The resolutions adopted by the Shareholders’ Meeting of significant impact on the Company, capable of amending the Bylaws indicated in Article 6.3 of the Company Bylaws are subject to the “special power” of veto by the Ministry of Economics and Finance as mentioned above in Section II “Information on Ownership Structure”’ in paragraphs “Restrictions in share transfer and shares bearing special powers” and “Bylaws amendments”.
Unless otherwise established by the Bylaws, the resolutions, both for ordinary and extraordinary Shareholders’ Meetings, both on first, second or third call, or on single call, are passed with the majority required by the Law in each case (Article 13.2 of the Bylaws).

In particular, the Bylaws provide that: (i) for transactions with related parties that have not received a favorable opinion from the competent body, the Shareholders’ Meeting resolves, in addition to the majority provided for by law, in the presence of unrelated shareholders, as defined by governing regulations, who represent at least 10% of the share capital with voting rights and with a favorable vote by the majority of said unrelated shareholders; (ii) for urgent transactions with related parties that have been submitted by the Directors for an advisory vote, the Shareholders’ Meeting adopts resolutions with the majority provided for by law (Article 13.3 of the Bylaws).
During 2011 – with reference to the regulations for minority rights and compatibly with the Company’s referenced regulations and rules mentioned above – no significant changes were made in market capitalization of the Company’s shares or in the composition of its Corporate bodies for which the Board of Directors had to evaluate the opportunity of proposing to the Shareholders’ Meeting any amendments of the Bylaws regarding the percentages established for exercising shares and of the prerogatives set for minority protection (Article 11.C.6 of the Governance Code).