to download Telecom Italia Annual Report 2011 - Company Reporting

Authorization to increase share capital for payment and free of charge
for a total sum of 15,000,000 euros at the service of the Long Term
Incentive Plan 2012 - related and consequent resolutions
Dear Shareholders,
An incentive plan based on financial instruments was placed before the ordinary Shareholders’ meeting;
it proposed that the beneficiaries of the plan would have the right to subscribe ordinary Telecom Italia
shares for cash and/or receive ordinary Telecom Italia shares free of charge, according to their category.
In particular, the Long Term Incentive Plan 2012 provides
for one category of employees (so-called Selected Executives), the offer of subscribing to
ordinary shares in the Company, for cash, for a maximum total sum of 5,500,000 euros
(including share premium) reserved to the employees who are beneficiaries of the initiative,
with the subsequent free assignment of ordinary shares to those subscribing to the reserved
increase in capital according to a ratio of one free share for each share subscribed for cash,
provided that certain pre-established conditions are met;
for another category of employees (so-called Top Management), the free assignment of
ordinary shares for a maximum total of 4,000,000 euros.
To service the incentive plan we therefore ask you to approve the assignment to the Board of Directors
of powers to increase the share capital as indicated below, pursuant to article 2443 of the Italian Civil
Code for a period of five years:
power to increase the share capital, (i) for cash, by the issue of new ordinary shares of 0.55
euros par value each, with dividend entitlement, by a maximum amount of 5,500,000 euros,
excluding the right of pre-emption pursuant to article 2441, subsection 8, of the Italian Civil
Code, and of article 134, subsection 2, of Legislative Decree no. 58/1998, to be reserved to
some of the employees who are beneficiaries of the Long Term Incentive Plan 2012 as
previously identified by the Board of Directors of the Company, and then, subsequently (ii) for a
maximum amount of 5,500,000 euros by assignment of the corresponding maximum amount
of profits or retained profits pursuant to article 2349 of the Italian Civil Code, with the issue of
a sufficient number of ordinary shares for the assignment of one free share for every paid
share subscribed, as above, subject to the terms and conditions and by the methods specified
in the Long Term Incentive Plan 2012.
power to increase the share capital by a maximum amount of 4,000,000 euros by assignment
of the corresponding maximum amount of profits or retained profits pursuant to article 2349
of the Italian Civil Code, with the issue of ordinary shares reserved to some of the employees
who are beneficiaries of the Long Term Incentive Plan 2012 as previously identified by the
Board of Directors of the Company, subject to the terms and conditions and by the methods
specified for the initiative.
In relation to the increase in capital for cash, the right to determine the amount of the share premium for
the new shares to be issued at market price (calculated as the average of the official prices of Telecom
Italia ordinary shares in the 30 days preceding the moment of reference on the electronic share market
organised and operated by Borsa Italiana S.p.A.) and in any event at no less than par value, shall be
attributed to the Board of Directors. Regarding the share issues to be carried out by allocation of the
profits, the power to identify, in due course, the profits and/or retained profits to be used for this
purpose, shall be assigned to the Board of Directors, with a mandate to make the appropriate changes
to the accounts consequent on the issue operations, in accordance with the legal provisions and the
accounting principles that are applicable in each case.
It should be noted that, regarding the proposed resolutions (which result in a maximum theoretical
dilution of 0.14% of the total share capital and 0.20% of ordinary shares only at 31 December 2011),
shareholders who do not support these proposals do not have the right of withdrawal.
The proposed resolution for the shareholders’ meeting is reproduced below, with a comparison of the
current form of article 5 and the revised version incorporating the proposed amendments.
Other information Motions for resolutions 463