ANNEX 1 LEGISLATIVE DECREE NO. 58 DATED 24 FEBRUARY, 1998 Article 114 (Publication), paragraph 7 Persons responsible for administrative, auditing or executive duties in a listed issuer, along with managers with regular access to inside information 1 as defined in paragraph 1 above and with the power to make management decisions that may affect the future standing and prospects of the listed issuer, any person holding shares representing at least a 10% of the share capital, and any entity with a controlling stake in the listed issuer, are required to disclose to CONSOB and publish all information regarding transactions on shares issued by the issuer and financial instruments connected thereto performed by them or their nominees. Said disclosure of information is to also be made by the spouse, unless legally separated, dependent children, including those of the spouse, and cohabiting parents and relatives of the aforementioned persons, and other persons as set forth in the CONSOB Regulation implementing Directive 2004/72/EC issued by the European Commission on 29 April, 2004. The same CONSOB Regulation sets forth the transactions, the manner and terms of notifications, the manner and terms of publication of information, and the cases in which 1 "Paragraph 1" refers to article 181 of the Consolidated Law on Finance, under which 1.. inside information shall include all information of a precise nature that has not been publicly disclosed and which concerns, directly or indirectly, the issuer(s) of financial instruments or the financial instruments themselves, which if disclosed could substantially affect the prices of the financial instruments. 2. With regard to commodity derivatives, inside information shall include all information of a precise nature that has not been publicly disclosed and which concerns, directly or indirectly, commodity derivatives, which traders on the markets on which the derivatives are traded expect to receive in accordance with the accepted practices of the markets. 3. Information shall be deemed to be of a precise nature if: a) it refers to circumstances that exist or may reasonably be forecast to come into being, or an event which may reasonably be forecast to occur; b) it is sufficiently specific for conclusions to be drawn on the possible effect of the circumstances or event as per subparagraph a) above on the prices of the financial instruments. 4. Information which, if publicly disclosed, could substantially affect the prices of the financial instruments shall include information that a reasonable investor would presumably take into consideration when making investment decisions. Omission
notification requirements apply to entities with a controlling stake in the issuer and all other entities in which the aforementioned persons are responsible for the duties set forth in this paragraph. Article 193 (Corporate information and the duties of Statutory Auditors and Certified Accounting Companies) 1. Companies, entities, or associations required to provide the notifications set forth in articles 114, 114-bis, 115, 154-bis and 154-ter, or subject to the obligations set out in article 115-bis shall be punished by fine set between five thousand and five hundred thousand Euros for failure to comply with the provisions set forth in said articles or their relevant implementing provisions. (art. 195, paragraph 9: Companies and organisations to whom perpetrators of violations belong shall be answerable, jointly with the latter, for payment of the sanction and advertising costs provided for in the second sentence of paragraph 3 and are obliged to exercise the right to withdraw against the persons responsible.). Where the notifications are due from a natural person, in the event of a violation the sanction shall be applied to the latter. 1-bis. Persons responsible for administrative, executive and auditing duties in companies and entities engaged in the activities set forth in article 114, paragraph 8 and 11, their subordinates, and the persons set forth in article 114, paragraph 7 shall also be subject to the sanctions set forth in paragraph 1 above in the event of their failure to comply with the provisions set forth herein and in the implementing provisions issued by CONSOB. omission LAW NO. 262 DATED 28 DECEMBER, 2005 Art. 39 (Increase of penal and administrative sanctions)
1. The sanctions provided by the Consolidated Law of Legislative Decree no. 385 dated 1 September, 1993, by the Consolidated Law of Legislative Decree no. 58 dated 24 February, 1998, by Law no. 576 dated 12 August, 1982, and by Legislative Decree no. 124 dated 21 April, 1993 are hereby doubled, within the limits set forth for each type of sanction in Volume I, Title II, Chapter II of the Penal Code. omission CONSOB RESOLUTION NO. 11971 DATED 14 MAY, 1999 Title VIII Chapter II Transactions performed by significant parties and persons closely related to them Article 152-sexies (Definitions) 1. For the intents and purposes of this Chapter, the following shall mean: a) "listed issuer": the companies indicated in article 152-septies (1) hereof; b) "financial instruments connected to shares": b.1) financial instruments that enable shares to be subscribed, purchased or transferred; b.2) debt obligations that may be converted in or exchanged for shares; b.3) derivatives on the shares set forth in article 1 (3) of the Consolidated Law; b.4) other financial instruments which are equivalent to shares and represent such shares;
b.5) listed shares issued by a subsidiary company of the listed issuer and the financial instruments set forth in subparagraphs b.1) to b.4) above connected thereto; b.6) non-listed shares issued by a subsidiary company of the listed issuer, where the carrying value of investments in the subsidiary represent more than fifty percent of the balance sheet assets of the listed issuer, as reported by the most recent approved financial statements, and the financial instruments set forth in subparagraphs b.1) to b.4) above connected thereto; c) "significant parties": c.1) all members of the administrative and auditing bodies of the listed issuer; c.2) persons responsible for executive duties in a listed issuer along with managers with regular access to inside information and with the power to make management decisions that may affect the future standing and prospects of the listed issuer; c.3) all members of the administrative and auditing bodies, persons responsible for executive duties and managers with regular access to inside information and with the power to make management decisions that may affect the future standing and prospects of a subsidiary company controlled, directly or indirectly, by a listed issuer, where the carrying value of the investments in the subsidiary represent more than fifty percent of the balance sheet assets of the listed issuer, as reported by the most recent approved financial statements; c.4) any person holding investments equal to at least 10% of the share capital of the listed issuer, as measured in accordance with article 118 hereof, and represented by shares with voting rights, and any other entity with a controlling stake in the listed issuer; d) "persons closely related to significant parties":
d.1) the spouse, unless legally separated, dependant children, including those of the spouse, and if living in the same household for at least one year, the parents and relatives of the significant party; d.2) legal persons, partnerships and trusts in which the significant party, or a person as set forth in subparagraph d.1) above, whether jointly or severally, holds an executive office; d.3) legal persons controlled directly or indirectly by a significant party or a person as set forth in subparagraph d.1) above; d.4) partnerships whose economic interests substantially coincide with those of a significant party, or a person as set forth in subparagraph d.1) above; d.5) trusts established for the benefit of a significant person, or a person as set forth in subparagraph d.1) above. Article 152-septies (Scope of Application) 1. Article 114 (7) of the Consolidated Law shall apply to: a) Italian companies that issue shares traded on markets governed by Italian or European Law; b) companies that are not registered in a European Union member state and are required to file annual information in Italy on shares, pursuant to article 10 of Directive 2003/71/EC. 2. The requirements set forth in article 114 (7) of the Consolidated Law shall apply to all transactions for the purchase, sale, subscription and exchange of shares and financial instruments connected thereto. 3. Notification requirements shall not apply to:
a) transactions whose sum total amount does not reach five thousand euros by the end of the calendar year; for derivatives connected to shares, the value shall be measured with reference to their underlying shares; b) transactions between a significant party and persons closely related to the significant party; c) transactions performed by the listed issuer of the shares and subsidiary companies of the issuer. 4. The amount indicated in paragraph 3(a) shall be measured by summing all transactions on shares and financial instruments connected thereto performed on behalf of each significant party, and those performed on behalf of persons closely related to the significant party.
Article 152-octies (Manner and terms for notifications to CONSOB and public disclosure) 1. Significant parties, as set forth in article 152-sexies (1.c.1), c.2), c.3)) are required to notify CONSOB of all transactions on shares and financial instruments connected thereto performed by them or persons closely related to them, within five days of market trading from the execution date of the transactions. 2. Significant parties as set forth in article 152-sexies (1. c.1), c.2), c.3)) are required to notify the listed issuer of all transactions as per paragraph 1 above, within the term set forth therein. 3. The listed issuer shall publish the information received in accordance with paragraph 2 above by the end of the market trading day following the day the information was received and send it jointly with the authorised storage mechanism. 4. Significant parties as set forth in article 152-sexies (1.c.4)) are required to notify CONSOB and publish the information set forth in paragraph 1 above, by the end of the fifteenth calendar day following the execution date of the transaction. 5. Publication, as required by paragraph 4 above, may be made by the listed issuer on behalf of the significant parties indicated therein, providing that, subject to prior agreement, the significant parties notify the listed issuer of the information set forth in paragraph 1 above, within the term set forth in paragraph 4 above. In this case, the listed issuer shall publish the information received by the end of the market trading day following the day the information was received from said significant parties. 6. Notification to CONSOB, as required by paragraphs 1 and 4 above, may be made by the listed issuer on behalf of all significant parties, within the terms respectively set forth in the above paragraphs.
7. Notification as required by the above paragraphs is to be provided in the manner set forth in Annex 6 hereto. 8. Listed issuers and their subsidiaries, as set forth in article 152-sexies (1.c.3)) are required to: a) establish a procedure that identifies the persons, as defined in article 114 of the Consolidated Law and in this Title, in their management structure subject to the notification requirements set forth in article 114 (7) of the Consolidated Law; b) inform the persons identified as above of their having been identified, and of the duties binding on them. 9. Listed issuers shall identify the person charged with collecting, managing and disclosing to the market notifications of the information set forth in this Title. 10. Significant parties shall inform all directly interested parties of the existence of conditions under which the former are required to fulfil the notification requirements set forth in article 114 (7) of the Consolidated Law.
COMMUNICATION NO. DME/6027054 DATED 28-3-2006 (ITALIAN VERSION ONLY) SUBJECT: INFORMATION TO THE PUBLIC ON SIGNIFICANT EVENTS AND CIRCUMSTANCES AND FULFILMENTS FOR THE PREVENTION OF MARKET ABUSES RECOMMENDATIONS AND CLARIFICATIONS OMISSION VII Transactions carried out by significant parties and by persons strictly connected to them 122. Article 114, paragraph 7, of the Consolidated Law on Finance regulates purchase and sale transactions carried out by the managers of a listed issuer, including for an intermediary of shares issued by the issuer itself or other financial instruments connected to them, stating that an appropriate communication is to be made to Consob and to the market. The same communication is due also from whoever holds shares of at least 10% of the share capital and from every other party which controls the listed issuer. Those transactions carried out by persons strictly connected to the afore-mentioned significant parties are also subject to the obligations of transparency. 123. The implemental regulations of the Consolidated Law on Finance are contained in articles from 152-sexies to 152-octies of the Regulations on Issuers. In particular article 152-sexies of the Regulations on Issuers lists some definitions to use for the fulfilment of the regulations. In this regard the following points are provided: a) "Financial instruments connected to the shares" Art. 152-sexies, lett. b) 124. This provision contains the definition of "financial instruments connected to shares" to which the obligations of communication in article 114 paragraph 7 extend. a.1) Listed shares issued by subsidiary companies controlled by the listed issuer (b.5) 125. The listed shares, shown in letter b.5) are the shares, issued by Italian or foreign parties, listed on Italian regulated markets. a.2) Non-listed shares issued by subsidiary companies controlled by the listed issuer (b.6) 126. The definition of "non-listed shares" issued by subsidiary companies controlled by the listed issuer, shown in letter b.6, also includes the listed shares in a market other than the Italian regulated markets. By subsidiary companies controlled by the listed issuer it is meant both the subsidiary companies which are directly controlled as well as those which are indirectly controlled, for which the condition of "significance" shown in letter b.6. exists. This condition, for the subsidiary companies which are directly controlled, that is exclusively through a direct interest of the listed issuer, exists when the book value of the interest held by the listed issuer, as shown in the last statutory financial statements approved, is over 50% of the equity assets of the listed issuer as stated in the same financial statements.
For the subsidiary companies which are indirectly controlled by the listed issuer, and in any case for all those in which the interest of the listed issuer takes place also in an indirect way, the condition of "significance" is calculated with reference to the actual weight that the interest in these companies has on the assets of the listed issuer. In particular, for each subsidiary company which is indirectly controlled, the actual value of the interest held by the listed issuer is calculated first, taking the book value of the interests held directly or indirectly in that company by the listed issuer, "diluted" in the case of indirect interests by the shares of interest in the intermediary companies. This value is then compared to the value of the assets in the statutory financial statements of the listed issuer, in order to check whether this ratio exceeds 50% or not. For example, in the following theoretical situation: A = listed issuer B = subsidiary company controlled directly by A C = subsidiary company controlled indirectly by A With total assets of A =100 Book value of the interest of A in B = 51 Book value of the interest of A in C = 6 Book value of the interest of B in C = 45 B is controlled directly by A so the ratio between the book value of the interest of A in B and the value of the total assets of A = 51/100 = 51% is calculated. Therefore B is a "significant" subsidiary of A C is controlled indirectly by A and there are two interests of A in C, one direct, for which the book value is 6 and one indirect for which the "actual" value is 45*51% = 22.95 therefore the ratio is calculated between the actual value of the direct and indirect interest of A in C (6+22.95 = 28.95)
and the value of the total of the assets of A (28.95/100 = 28.95%). Therefore C is not a "significant" subsidiary of A. If on the other hand the interest of A in B were equal to 100%, as well as B, C would also be a significant subsidiary of A in that the actual value of the interest would be equal to 51 (6+(45*100%) = 51), which compared to the total assets of A gives a value over 50% (51/100=51%). b) "Significant parties" Art. 152-sexies, lett.c) 127. This provision contains the definition of "significant parties" to which the obligations of communication in article 114 paragraph 7 apply. b.1 Management functions (c.2 and c.3) 128. The Management functions shown in letters c.2) and c.3) are those carried out by the general manager and by parties who carry out equivalent functions (for example for banks, deputy general managers and any co-general managers). b.2 Managers (c.2 and c.3) 129. As regards the definition of "managers", contained in letters c.2 ) and c.3), firstly the two conditions shown in those letters must be jointly met, regarding the regular access to privileged information and the holding of the power to adopt management decisions which may affect the development and future prospects of the listed issuer. Therefore, parties which are included in that definition may not be the same as the parties which must be included in the register in article 152- bis of the Regulations on Issuers, for which only possession the first requisite is necessary and for which it is not required that they hold the position of manager. 130. The identification of the significant managers for the definition in letters c.2) and c.3) must therefore be made by the listed issuer on the basis of an analysis made for each individual case, which takes account of the organisational and decision-making structure, it not being possible to identify beforehand standard "positions" which meet the two requisites. 131. In general terms, it is considered that the managers should also be included who, as well as having access to privileged information, may make, based on powers being granted to them, including implicitly, strategic decisions which have an effect on the entire company and not only on individual activities, unless they do not represent the predominant part of the overall activity of the listed issuer. 132. In addition the managers who have autonomous decision-making power are included, that is who are not subject to the approval of other decision-making bodies of the listed issuer, whilst it is not necessary that this power is solitary, it being sufficient that the manager is a member of the body which has the decision-making power. b.3 Subsidiary company controlled, directly or indirectly, by a listed issuer (c.3) 133. As regards the identification of the significant persons in the subsidiary companies controlled by the listed issuer, shown in letter c.3), the guidelines provided in the preceding point in regard to the definition of management functions and manager functions which have regular access to
privileged information and which have the power to adopt management decisions which may affect the development and the future prospects of the subsidiary company, are applied. The subsidiary companies controlled by the listed issuer are both those controlled directly as well as indirectly for which the condition of "significance" shown in letter c.3 is met). With regard to the latter, what is indicated with reference to letter b.6) applies. b.4 Parties which hold an interest of at least 10% of the share capital of the listed issuer (c.4) 134. For the identification of parties which hold an interest of at least 10% of the share capital of the listed issuer, as per letter c.4), the criteria in article 118 of the Regulations on Issuers apply. Therefore the shares which are held by a party, even if the voting rights are held by or are attributed to third parties, shares which it does not own, but for which it has the voting rights or the voting rights are attributed to it, shares which intermediaries, trustees and subsidiary companies own or for which they have the voting rights, are taken into account. If several parties have obligations of communication relating to this same interest these obligations may be performed by just one of them, as long as the completeness of the information due from all the parties concerned is guaranteed. b.5 Parties which control the listed issuer (c.4) 135. For the identification of the parties which control the listed issuer, the definition of control in article 93 of the Consolidated Law on Finance applies. Controlling parties are all those which directly or indirectly control the listed issuer. If several parties, which are connected to each other by relationships of control, have obligations of communication relating to the same interest these obligations may be performed by just one of them, as long as the completeness of the information due from all the parties concerned is guaranteed Paragraph 6 of article 120 of the Consolidated Law on Finance applies to the obligations of communication by the Ministry of Economics and Finance. Therefore this Ministry communicates only the transactions carried out in the companies in which it directly holds over 10% or which are controlled directly by it, whilst the transactions carried out by the subsidiary companies of the Ministry itself, if they control or hold an interest of over 10%, are communicated by the subsidiary companies themselves. c."persons strictly connected to the significant parties" Art. 152-sexies, lett. d) 136. The provision in question contains the definition of "persons strictly connected to the significant parties" whose transactions are subject to the communications stated in article 114 paragraph 7, by the significant parties. 137. On this subject, firstly it is stated that the inclusion, next to the physical persons connected to the party by determined family ties, of some types of legal persons within the scope of application of the regulations is aimed at avoiding forms of transparency avoidance. In this context it appears appropriate to limit the scope of application in a way which is consistent with that aim, defining criteria of identification of the legal persons to be considered based on the actual possibility that the performance of these parties is capable of obtaining concrete economic benefits to the significant party. c.1 Management function (d.2)
138. For identification, those persons strictly connected to the significant parties, of the legal persons, and where compatible of the partnerships and trusts as in letter d.2), it is pointed out that the management function is that carried out by the party or by the body which holds powers of administration (sole director, board of directors or management board). The significant party who holds the position of sole director is considered, on his own, to be in charge of the management function. In the case of several directors, the significant party is the holder of the management function where more than half of the board consists of the significant party and/or by persons strictly connected to him shown in letter d.1). c.2 Legal persons directly or indirectly controlled by a significant party or by a strictly connected person (d.3) 139. As regards the definition of subsidiary companies controlled by a significant party or by a strictly connected person, the companies in which the significant party or a person strictly connected to him holds a significant share of the property are considered, in that only in this case the economic effects of transactions concluded by the company may be attributable to the party itself. In particular it is considered that a significant share exists when a share of profit rights of over 50% is attributable to the party. The share of profit rights in the case of a chain of subsidiary companies is calculated "considering" the shares of profit rights held at the individual levels: for example if the significant party X controls three companies A, B and C and directly holds a share of profit rights in company A of 100%, whilst A has a share of profit rights of B of 51% and B has a share of profit rights of C of 51%, the share of profit rights of party X in A is equal to 100%, in B is equal to 51% (100%*51%) and in C is equal to 26% (100%*51%*51%). As a result only A and B will be expected to communicate the company transactions where X is a significant party or party strictly connected to a significant party. c.3 Equivalent economic interests (d.4) 140. In a similar manner to what is stated for letter d.3, the equivalent economic interests in a partnership are present when the significant party holds, alone or jointly with strictly connected persons, a share of over 50% of the profit rights. 141. Article 152-septies of the Regulations on Issuers regulates the scope of application of the provisions contained in article 114 of the Consolidated Law on Finance paragraph 7. In this regard, on the subject of type of transactions, it is pointed out that: transactions which do not have an economic consideration such as donations and inheritances are excluded from the obligation of declaration, whilst exchanges are included. In this last case, the estimated value of the financial instruments being exchanged will be considered as the transaction price; also excluded are the free allocations of shares or purchase or subscription rights and the exercising of these rights when they derive from remuneration schemes stated in article 114 bis; the sales of shares from the exercising of these rights or from the free allotments are on the other hand communicated; for transactions carried out in the context of a management relationship on an individual basis of investment portfolios, in the case where they do not derive from an instruction of the client, the obligations of communication start from the day when the client receives the communication from the intermediary of the transactions themselves. For these transactions the parties concerned are asked to indicate in the notes part of section 4 of attachment 6, the acronym SGR.
142. The threshold of 5,000 Euros is calculated in the context of a calendar year. For 2006, the threshold is calculated with reference to the transactions carried out from the coming into force of the provisions until 31 December 2006 (inclusive). 143. Article 152-octies of the Regulations on Issuers regulates the methods and the timings of the communication to make to Consob and to the public. In this regard it is pointed out: the term of 5 days for the communication to Consob and to the issuer in accordance with paragraphs 1 and 2 of article 152-octies is calculated excluding the day of the transaction; the publication by the listed issuer in accordance with paragraph 3 of the communications received is carried out by the end of the day following its receipt, even if the communication was sent to the issuer before the 5th day; the communication to Consob on behalf of the significant parties made by the listed issuer in accordance with paragraph 6 is automatically considered performed if the publication is made through the electronic transmission systems of the information implemented by the market management company within the terms established in paragraphs 1 and 4. for the agreements stated in article 152-octies, paragraph 5, between the shareholders with interest of over 10% and the issuers, for the purposes of the communication of the information with regard to the significant transactions, the adoption of any particular form of conclusion is not foreseen. 144. As regards the communication to the public by the listed issuers as per paragraphs 3 and 5, Consob recommends that the listed issuer publishes all the communications published in accordance with article 152-octies on its website, according to what is stated in paragraph 5 of the aforementioned article. For this purpose it is recommended creating on the website a special section called "internal dealing" which can be accessed in the section dedicated to investor relations. 145. Finally it is stressed that, although nullifying the obligation for the issuers to have codes of behaviour aimed at regulating the internal dealing activity, already required by the Regulations for markets organised and managed by Borsa Italiana S.p.A. the same companies, following the abrogation of these provisions, have the right to in any case adopt equivalent instruments in order to regulate aspects relating to this subject, regulated or not by the law and by the Regulations on Issuers. In this regard, the adoption of procedures aimed at regulating any agreements with external parties, at fixing the timeframes for acquiring the data, or identifying the so-called "black periods", can, for example, be cited. 146. In the event that the issuers should foresee, in the forms of self-discipline, further obligations of communication in relation to purchase and sale transactions made by persons other than those shown in article 152-sexies of the Regulations on Issuers, this information must not be sent by the methods stated in article 152-octies but be sent to the public with the methods stated in article 66 of the Regulations on Issuers. OMISSION * * * Due to this communication, the communication no. DME/3019271 dated 26.3.2003 is abrogated.