REPORT OF THE BOARD OF DIRECTORS ON THE SOLE ITEM OF THE EXTRAORDINARY SESSION

Transcription

1 REPORT OF THE BOARD OF DIRECTORS ON THE SOLE ITEM OF THE EXTRAORDINARY SESSION Harmonization of the Bylaws with the provisions of: a) Legislative Decree of January 27, 2010, No. 27 concerning the participation to the shareholders meeting by electronic means; amendment of article 11 of the Bylaws, and b) Regulation concerning the transactions with related parties, adopted by Consob with Resolution No of March 12, 2010; amendment of articles 13 and 20 of the Bylaws. Dear Shareholders, you have been convened in extraordinary session to discuss and resolve upon the proposal of amendment of certain clauses of the Bylaws in order to harmonize its contents with the provisions of (i) Legislative Decree of January 27, 2010, No. 27 concerning the participation to the shareholders meeting by electronic means, and (ii) Regulation concerning the transactions with related parties, adopted by Consob with Resolution No of March 12, A. Harmonization of the Bylaws with the provisions of Legislative Decree of January 27, 2010, No. 27 concerning the participation to the Shareholders Meeting by electronic means. Legislative Decree No. 27 of January 27, while implementing in Italy the EU Directive 2007/36/EC, regarding the exercise of certain rights of shareholders in listed companies - introduced significant changes to the Italian Civil Code and the so-called Consolidated Financial Act (Legislative Decree No. 58 of February 24, 1998) with respect to the functioning of the shareholders meetings of listed companies. 1

2 It should be noted that the new provisions introduced by Legislative Decree No. 27 of January 27, 2010 have been, for most part, already implemented in the Bylaws. In particular, on April 29, 2010, the Shareholders Meeting, in extraordinary session, approved the proposals formulated by the Board of Directors regarding: the possibility to convene the annual ordinary Shareholders Meeting, called to approve the financial statements, within one hundred and eighty days after the end of the fiscal year, since the Company is obliged to draw up consolidated financial statements, or, in any case, when required by particular needs regarding the structure and the purpose of the Company (as allowed, in general, by article 2364, paragraph 2, of the Italian Civil Code); the introduction of the foregoing possibility has entailed the amendment of article 9.2 of the Bylaws; the exclusion of the use of more than one call for shareholders meetings, setting out that pursuant to the amendments introduced by Legislative Decree No. 27 of January 27, 2010 to article 2369, paragraph 1, of the Italian Civil Code the ordinary Shareholders Meetings in single call require the majorities prescribed by paragraphs 3 and 4 of article 2369 and by article 2368, paragraph 1, second subsection of the Italian Civil Code (i.e. constitutive quorum: not applicable; deliberative quorum: absolute majority of those attending the Meeting), and that the extraordinary Shareholders Meetings in single call require the majorities prescribed by paragraph 7 of article 2369 of the Italian Civil Code (i.e. constitutive quorum: 20% of the share capital; deliberative quorum: 2/3 of those attending the Meeting); the exclusion of Shareholders Meetings subsequent to those in first call has entailed the amendment of article 13.2 of the Bylaws. Such amendments, which entailed a discretional assessment as to their adoption, required the mandatory approval of the Extraordinary Shareholders Meeting. Additional amendments, which entailed a mere harmonization of the Bylaws with applicable laws, were instead adopted by the Board of Directors of the Company held on October 21, 2010, pursuant to article 2365, paragraph 2, of the Italian Civil Code, and article 20.2, letter e) of the Bylaws. These amendments referred to: (i) the entitlement to attend and to vote in the Shareholders Meeting (in order to take account of the transition from the principle of the mandatory ownership of 2

3 the shares at the date when the Meeting is held to the record date mechanism); (ii) the faculty for the Shareholders to notify the proxy to the Company by electronic means through the Company s website; and (iii) the procedure for the election of the Board of Directors and of the Board of Statutory Auditors by the Shareholders Meeting (in order to take into account the supervening inapplicability of the special provisions prescribed in the so called privatization law ). The Board of Directors, whilst resolving to submit to the extraordinary Shareholders Meeting held on April 29, 2010 the amendments to the Bylaws examined above, left room for an additional amendment of the Bylaws aimed at implementing the new provisions of article 2370, paragraph 4, of the Italian Civil Code, as introduced by Legislative Decree No. 27 of January 27, 2010, concerning the participation in Shareholders Meetings through means of telecommunication as well as the casting of the votes through electronic means. However, on that occasion, the Board of Directors abstained from drafting a specific proposal for the amendment of the Bylaws pending the intervention of Consob, which, pursuant to article 127 of the Consolidated Financial Act, shall identify with Regulation the methods for exercising the vote and the procedures for the Shareholders Meeting in the foregoing cases. In this respect, we remind that, recently, Consob (with Resolution No of December 14, 2010) introduced articles 143-bis and 143-ter in the Issuers Regulation (adopted with Resolution No of May 14, 1999). In particular, article 143-bis, paragraph 1, of the Issuers Regulation provides that the bylaws of listed companies, in conformity with the provisions of EU Directive 2007/36/EC, may provide the use of electronic means in order to allow one or more of the following procedures for the participation in the meeting: a) real-time transmission of the meeting; b) participation in the meeting from a remote location through real-time two-way communication means; c) casting votes, whether before or during the meeting, without the need to appoint a proxy holder who is physically present at the meeting. In order to facilitate the participation in the Meeting also for those Shareholders who may not go to the place where the Meeting is held - and in line with the rationale of the changes introduced by Legislative Decree No. 27/2010 we 3

4 propose to introduce into article 11 of the Bylaws, a new paragraph 11.3 which allows for the participation in the Shareholders Meeting by electronic means. This proposal, in particular, assigns to the Board of Directors, in the exercise of its technical discretion, the task to decide, with respect of each Shareholders Meeting, whether such method of participation should be applied (and to indicate in the notice of the Meeting the specific methods among those currently set out in article 143-bis, paragraph 1, of Consob Issuers Regulation), mainly in light of the evolution and reliability of the technical tools available. Below please find the text of the clause that is submitted to the approval of the present Shareholders Meeting. Article 11 of the Bylaws 11.1 Omissis [no amendments] 11.2 Omissis [no amendments] 11.1 Omissis [no amendments] 11.2 Omissis [no amendments] 11.3 The Board of Directors may provide that, with respect to single Shareholders Meetings, those entitled to attend and to vote in the Shareholders Meeting may participate in the Shareholders Meeting by electronic means. In such case, the notice of the Meeting shall detail, also by reference to the Company s website, the above methods of participation. B. Harmonization of the Bylaws with the provisions of Regulation concerning the transactions with related parties, adopted by Consob with Resolution No of March 12, We remind you that as disclosed to the market in due time by the Company - on November 9, 2010, the Board of Directors, following the opinion issued by the Committee of Independent Directors held on November 2, 2010, adopted a new Procedure for transactions with related parties (hereinafter the Enel RPT Procedure ) pursuant to the relevant Regulation adopted by Consob with 4

5 Resolution No /2010 (hereinafter the Consob RPT Regulation ) whose provisions entered into force on January 1, The Enel RPT Procedure provides, among the others: a) the possibility for the Board of Directors to submit to the authorization of the ordinary Shareholders Meeting (pursuant to Article 8, paragraph 2, of the Consob RPT Regulation) the transactions of major importance, which do not fall within the competence of the Shareholders Meeting, if the Related Parties Committee (hereinafter the RPT Committee ) has issued a negative opinion. In these cases, the ordinary Shareholders Meeting, without prejudice to the majorities required by law, bylaws and provisions applicable in cases of conflicts of interest, approves its resolution with the favourable vote of at least half of the voting unrelated shareholders (the so-called whitewash). In any case, the completion of the major importance transaction is prevented only if the unrelated shareholders attending the Shareholders Meeting represent at least 10% of the share capital with voting rights (article 6.8 of the Enel RPT Procedure); b) the possibility for the Board of Directors to submit to the approval of the Shareholders Meeting (pursuant to Article 11, paragraphs 2 and 3, of the Consob RPT Regulation) the transactions of major importance which fall within the competence of the Shareholders Meeting, in case the Related Parties Committee issued a negative opinion. In this case, the completion of the transaction is admitted only if the Shareholders Meeting approves its resolution with the majorities and requirements indicated under the previous letter a) (Article 7.2 of the Enel RPT Procedure); c) the possibility to avail itself of a simplified procedure in cases of urgency (pursuant to Article 13, paragraph 6, of the Consob RPT Regulation), for transactions carried out by the Company, directly or trough controlled companies, which do not fall within the competence of the Shareholders Meeting and which are not subject to the authorization of the Shareholders Meeting (Article 13.4 of the Enel RPT Procedure). Considering that the aforementioned provisions of the Enel RPT Procedure may be applied only if expressly set forth in the Bylaws, we propose: to amend articles 13.1 and 13.2 of the Bylaws, in order to make them consistent with the majorities required for the approval and/or authorization 5

6 by the Shareholders Meeting of transactions with related parties of major importance in the cases indicated under a) and b) above; and to integrate article 20 with a specific provision which allows for a full and correct application of the above mentioned articles 6.8, 7.2 and 13.4 of the Enel RPT Procedure. Below please find the text of the provisions that are submitted to the approval of the present Shareholders Meeting. Article 13 of the Bylaws 13.1 Excepting as provided for by Article 20.2, meetings shall resolve on all matters authorized by law Shareholders Meetings shall be called for only one date, with the quorum and voting majorities for both ordinary and extraordinary Meetings being those provided for by the law in each case Omissis [no amendments] 13.1 Excepting as provided for by Article 20.2, meetings shall resolve on all matters authorized by law, as well as on those provided for by Article Shareholders Meetings shall be called for only one date, with the quorum and voting majorities for both ordinary and extraordinary Meetings being those provided for by the law in each case, without prejudice to the majorities specifically provided for by Article Omissis [no amendments] ***** Article 20 of the Bylaws 20.1 Omissis [no amendments] 20.2 Omissis [no amendments] 20.1 Omissis [no amendments] 20.2 Omissis [no amendments] 20.3 Pursuant to the procedure for transactions with related parties adopted by the Company: (a) the ordinary Shareholders Meeting, pursuant to Article 2364, paragraph 6

7 1, subsection 5, of the Civil Code, may authorize the Board of Directors to enter into related parties transactions of major importance, which do not fall within the competence of the Shareholders Meeting, notwithstanding the negative opinion of the related parties Committee, provided that, without prejudice to the majorities required by law, bylaws and provisions applicable in cases of conflicts of interest, the Shareholders Meeting resolves upon also with the favourable vote of at least half of the voting unrelated shareholders. In any case, the entering into of the foregoing transactions is prevented only if the unrelated shareholders attending the Shareholders Meeting represent at least 10% of the share capital with voting rights; (b) in case the Board of Directors intends to submit to the approval of the Shareholders Meeting a transaction with related parties of major importance, which fall within the competence of the Shareholders Meeting, notwithstanding the negative opinion of the related parties Committee, the transaction may be entered into only if the Shareholder s Meeting resolves upon with the majorities and in compliance with the requirements set forth under the previous subsection a); (c) the Board of Directors or the delegated Bodies may resolve upon, applying the exemptions provided for in the procedure and subject to the conditions indicated therein, the entering into by the Company, directly or through its subsidiaries, of urgent transactions with related parties which do not fall within the 7

8 competence of the Shareholders Meeting and which are not subject to the authorization of the Shareholders Meeting itself Omissis [no amendments] 20.4 Omissis [no amendments] 20.4 Omissis [no amendments] 20.5 Omissis [no amendments] * * * * * It should be noted that the proposed amendments to the Bylaws do not entitle shareholders who do not concur in the related approval to withdraw, because none of the grounds for individual withdrawal specified in article 2437 of the Italian Civil Code are present. * * * * * In consideration of the foregoing, we submit for your approval the following Agenda The Shareholders Meeting of Enel S.p.A., having examined the illustrative report of the Board of Directors, resolves 1. to approve the proposal of introducing a new paragraph 11.3 into article 11 of the Bylaws, in compliance with the text provided below, in order to harmonize its content with the provisions of Legislative Decree No. 27 of January 27, 2010 concerning the participation in the Shareholders Meeting by electronic means, authorizing the Chairman of the Board of Directors and the Chief Executive Officer individually to approve and introduce into the present resolution the amendments, additions, or deletions that may be required to enter it in the register of companies. Article 11 of the Bylaws 11.1 Omissis [no amendments] 11.1 Omissis [no amendments] 8

9 11.2 Omissis [no amendments] 11.2 Omissis [no amendments] 11.3 The Board of Directors may provide that, with respect to single Shareholders Meetings, those entitled to attend and to vote in the Shareholders Meeting may participate in the Shareholders Meeting by electronic means. In such case, the notice of the Meeting shall detail, also by reference to the Company s website, the above methods of participation. 2. to approve the proposal of (i) introducing a new paragraph 20.3 into article 20 of the Bylaws (and amending the numeration of the paragraphs of article 20), and (ii) consequently amending paragraphs 13.1 and 13.2 of the Bylaws, in compliance with the text provided below, in order to harmonize its content with the provisions of the Regulation concerning the transactions with related parties, adopted by Consob with Resolution No of March 12, 2010 (as well as with the provisions of the relevant Procedure adopted by the Board of Directors held on November 9, 2010), authorizing the Chairman of the Board of Directors and the Chief Executive Officer individually to approve and introduce into the present resolution the amendments, additions, or deletions that may be required to enter it in the register of companies. Article 13 of the Bylaws 13.1 Excepting as provided for by Article 20.2, meetings shall resolve on all matters authorized by law Shareholders Meetings shall be called for only one date, with the quorum and voting majorities for both ordinary and extraordinary Meetings being those provided for by the law in each case Excepting as provided for by Article 20.2, meetings shall resolve on all matters authorized by law, as well as on those provided for by Article Shareholders Meetings shall be called for only one date, with the quorum and voting majorities for both ordinary and extraordinary Meetings being those provided for by the law in each case, without prejudice to the majorities specifically provided for by Article

10 13.3 Omissis [no amendments] 13.3 Omissis [no amendments] Article 20 of the Bylaws 20.1 Omissis [no amendments] 20.2 Omissis [no amendments] 20.1 Omissis [no amendments] 20.2 Omissis [no amendments] 20.3 Pursuant to the procedure for transactions with related parties adopted by the Company: (a) the ordinary Shareholders Meeting, pursuant to Article 2364, paragraph 1, subsection 5, of the Civil Code, may authorize the Board of Directors to enter into related parties transactions of major importance, which do not fall within the competence of the Shareholders Meeting, notwithstanding the negative opinion of the related parties Committee, provided that, without prejudice to the majorities required by law, bylaws and provisions applicable in cases of conflicts of interest, the Shareholders Meeting resolves upon also with the favourable vote of at least half of the voting unrelated shareholders. In any case, the entering into of the foregoing transactions is prevented only if the unrelated shareholders attending the Shareholders Meeting represent at least 10% of the share capital with voting rights; (b) in case the Board of Directors intends to submit to the approval of the Shareholders Meeting a transaction with related parties of major importance, which fall within the competence of the Shareholders 10

11 Meeting, notwithstanding the negative opinion of the related parties Committee, the transaction may be entered into only if the Shareholder s Meeting resolves upon with the majorities and in compliance with the requirements set forth under the previous subsection a); (c) the Board of Directors or the delegated Bodies may resolve upon, applying the exemptions provided for in the procedure and subject to the conditions indicated therein, the entering into by the Company, directly or through its subsidiaries, of urgent transactions with related parties which do not fall within the competence of the Shareholders Meeting and which are not subject to the authorization of the Shareholders Meeting itself Omissis [no amendments] 20.4 Omissis [no amendments] 20.4 Omissis [no amendments] 20.5 Omissis [no amendments] 11