MERGER PROJECT Amalgamation of PHILCO ITALIA S.p.A. and S.T.A.R. SOCIETÀ TREVIGIANA APPARECCHI RISCALDAMENTO S.P.A. into MERLONI ELETTRODOMESTICI S.P.A. drawn up pursuant to art. 2501-bis and 2504-quinquies, Civil Code.
MERGER PROJECT drawn up pursuant to art 2501-bis e 2504-quinquies Civil Code by the boards of directors of MERLONI ELETTRODOMESTICI S.p.A. (hereafter MERLONI or the Amalgamating Company ) and of S.T.A.R. SOCIETÀ TREVIGIANA APPARECCHI RISCALDAMENTO S.P.A. and the sole director of PHILCO ITALIA S.p.A. (hereafter, respectively STAR and PHILCO or each singly Amalgamated Company ) RECITALS a) the Amalgamating Company intends to proceed with the merger by incorporation (hereafter the Merger ) of PHILCO and STAR; b) the shareholders meeting of PHILCO voted on 7 th May 2003 to change its name to Merloni Brembate S.p.A. as of 30 th June 2003; c) all references to PHILCO in this document and/or any other document relating to the Merger shall be understood to refer, as of 30 th June 2003, to Merloni Brembate S.p.A.; d) the aforementioned Amalgamated Companies are wholly and directly owned by MERLONI, (registered office: Viale Aristide Merloni 47, Fabriano; capital stock subscribed and paid in: 99,451,094.40; tax and VAT code: 00693740425; R.E.A. registration: 85792); e) the operation serves the purposes of Group re-organization entailing simplification of the chain of holdings and pursuit of enhanced management efficiency; f) the Merger shall take place for all the participating Companies with reference to the financial statements for the year ending 31 st December 2002 approved by the respective ordinary shareholders meetings and in particular those of MERLONI and PHILCO on 7 th May 2003 and of STAR on 28 th April 2003; said financial statements are attached to this document under annexes B), C) and D) respectively; g) as the Merger is by incorporation of wholly owned companies it is not necessary pursuant to art. 2504-quinquies, Civil Code to provide either the expert report contemplated in art. 2501-quinquies Civil Code or the directors report
contemplated in art. 2501-quater Civil Code, indicated for listed issuers in art. 70 of the Regulations adopted by Consob resolution 11971 dated 14 th May 1999 and subsequent amendments and integrations; h) as the Merger involves neither changes in the corporate purpose of the Amalgamating Company nor allocation of unlisted shares, there are no grounds for the exercise of the right of withdrawal pursuant to art. 2437 Civil Code and art. 131, decree law 58, dated 24 th February 1998 containing the consolidated laws on financial intermediation; i) as the operation involves no share exchange and therefore no qualitative or quantitative modification to the present ownership structure of the Amalgamating Company, it is not necessary to call a special meeting of the holders of savings shares; j) none of the Companies participating in the Merger has issued debentures convertible into shares; k) the Merger does not constitute a concentration operation and does not need, therefore, to be communicated to the Competition and Market Authority (Autorità Garante della Concorrenza e del Mercato) as it is between enterprises which cannot be considered independent under the terms of the antitrust laws, MERLONI being the sole shareholder of the Amalgamated Companies. THIS BEING SAID the boards of directors of Merloni and Star and the sole director of PHILCO approved on 7 th May 2003 the following project for merger by incorporation of PHILCO and STAR into MERLONI, as set forth in detail hereunder. 1. TYPE, COMPANY NAME AND REGISTERED OFFICE OF THE AMALGAMATING COMPANY AND THE AMALGAMATED COMPANIES A) Amalgamating Company Merloni Elettrodomestici S.p.A., registered office in Fabriano (Ancona), Viale Aristide Merloni 47, capital stock 99,451,094.40, full paid in and consisting of 110,501,216 shares of par value 0.90 each, of which 107,998,372 ordinary shares and 2,502,884 non-convertible savings shares, Ancona companies register and tax/vat code 00693740425, R.E.A. registration 85792. 2
As of the date of this document, the following stock option plans are in place: - a plan in favour of employees in top or middle management positions in Group companies, and - a plan in favour of the non-employee directors of the Company who have significant responsibilities in the management of the enterprise. Said stock option plans are disciplined by the terms and conditions in art. 5 of the current bye-laws, attached under annex A) as an integral and material part hereof. Given the subscription options already assigned under the aforementioned plans as of the date of this merger project, we declare that the capital stock of MERLONI could in the case of exercise of such options be increased in 2003 by a maximum of 766,350.00 through issue of a maximum of 851,500 ordinary shares of par value 0.90 each and having the same characteristics as those in circulation. Under the regulations of the Plan, increases in capital stock are filed with the Ancona Companies registers at the end of each half year. The Amalgamating Company s ordinary and savings shares have been listed on the stock market operated by Borsa Italiana since 1987. Merloni Elettrodomestici S.p.A. is not under any bankruptcy or liquidation proceedings. B) Amalgamated Companies B.1.) PHILCO ITALIA S.p.A. PHILCO ITALIA S.p.A., registered office in Brembate di Sopra (Bergamo), Via G. Marconi 14/22, capital stock 104,000.00, fully paid in and consisting of 200,000 ordinary shares of par value 0.52 each, Bergamo Companies Register and tax/vat code 01391980164. On the date of approval of this merger project, an extraordinary shareholders meeting of the shareholders voted its approval of the change in the company name to Merloni Brembate S.p.A. and the consequent modification of art. 1 of the bye-laws. It follows that, as of 30 th June 2003, all references to PHILCO in this merger project and/or any other document regarding this Merger operation must be understood as referring for all intents and purposes to Merloni Brembate S.p.A. 3
As stated in the recitals, the Company is wholly and directly owned by Merloni Elettrodomestici S.p.A.. For the intents and purposes of art. 2501, clause 2, Civil Code, there is no obstacle to PHILCO s participation in this operation as the company is not under any bankruptcy or liquidation proceedings. For the sake of comprehensiveness however, it should be pointed out that the Company proceeded on 21 st May 2001 to dismiss all its employees due to discontinuance of business and closure of the company, said procedure being completed on 30 th April 2003. As anticipated, therefore, such circumstance has no bearing for the intents and purposes of the aforementioned art. 2501, clause 2, Civil Code on PHILCO s participation in the Merger. B.2.) S.T.A.R. SOCIETÀ TREVIGIANA APPARECCHI RISCALDAMENTO S.P.A. S.T.A.R. SOCIETÀ TREVIGIANA APPARECCHI RISCALDAMENTO S.p.A., registered office in Refrontolo (Treviso), Via Crevada, capital stock 3,354,000.00, fully paid in and consisting of 650,000 ordinary shares of par value 5.16 each, Treviso Companies Register and tax/vat code 00288290265. As stated in the recitals, the Company is wholly and directly owned by Merloni Elettrodomestici S.p.A.. STAR is not under any bankruptcy or liquidation proceedings. 2. BYE-LAWS OF THE AMALGAMATING COMPANY The bye-laws of the Amalgamating Company MERLONI shall not be changed in any way by the amalgamation of PHILCO and STAR. Said bye-laws are in any case attached under annex A), which is an integral and material part hereof. After 30 th June 2003 art. 5 of said bye-laws might undergo modification following the exercise of stock options, as explained above. 4
3. MODIFICATIONS TO THE SHAREHOLDERS EQUITY OF THE AMALGAMATING COMPANY FOLLOWING THE MERGER The Merger shall be executed at book values on the basis of the financial statements of the participating companies as of 31 st December 2002 approved by their respective ordinary shareholders meetings. As stated in the recitals, it is not necessary, for the purposes of art. 2504-quinquies Civil Code, to provide the directors or experts reports contemplated in art. 2501- quater and 2501-quinquies, Civil Code. By virtue of the Merger the Amalgamating Company shall automatically take on all the assets and liabilities of the Amalgamated Companies and all the claims, actions and rights and all the obligations, commitments and liabilities of whatever kind of the Amalgamated Companies in accordance with the provisions of art. 2504-bis, clause 1, Civil Code. Pursuant to art. 2504-ter, clause 2, Civil Code, the Amalgamating Company shall not assign shares replacing the shares directly owned by the Amalgamated Companies and cancelled as a result of the Merger and shall not, therefore, make any change to its capital stock. Following the amalgamation of PHILCO and STAR, MERLONI shall proceed to eliminate from its accounts the cost of the investments held in each of the Amalgamated Companies and state the total assets and liabilities of said companies. The expenses, taxes and dues of the whole Merger operation shall be charged to the Amalgamating Company MERLONI. 4. SHARE EXCHANGE RATIO The amalgamation of STAR and PHILCO into MERLONI shall take place without assignment of new shares, the Amalgamating Company being the sole shareholder of both Amalgamated Companies. As anticipated, the Amalgamating Company shall proceed to cancel its investment in the companies with no share exchange in accordance with the provisions of art. 2504-ter, clause 2, Civil Code. 5
5. ASSIGNMENT OF SHARES AND COMMENCEMENT OF PROFIT SHARING As stated above, the Amalgamating Company MERLONI shall not assign any shares to replace those it owned in the Amalgamated Companies and which are cancelled by the Merger. 6. COMMENCEMENT OF THE EFFECTS OF THE MERGER AND STATEMENT OF THE OPERATIONS OF THE AMALGAMATED COMPANIES IN THE FINANCIAL STATEMENTS OF THE AMALGAMATING COMPANY A) Effects of the Merger Pursuant to art. 2504-bis, clause 2, Civil Code, the real effects of the Merger shall commence on the date on which the merger project is filed with the Ancona Companies Register, in accordance with the provisions of art. 2504, clause 2, Civil Code. B) Accounting and fiscal effects PHILCO operations shall be stated in the Amalgamating Company s balance sheet also for income tax purposes from the date on which the real effects of the Merger are produced. In the case of the Amalgamated Company S.T.A.R., its operations shall be stated in the Amalgamating Company s balance sheet also for income tax purposes as of 00.00 hours on the first day of the year current when the real effects of the Merger occur, as defined above, pursuant to art. 2504-bis, final clause, Civil Code and art. 123, Consolidated Income tax law. 7. SPECIAL TREATMENT OF CERTAIN CATEGORIES OF SHAREHOLDERS AND HOLDERS OF SECURITIES OTHER THAN SHARES There shall be no special treatment of any categories of shareholders or holders of securities other than shares 8. SPECIAL BENEFITS FOR DIRECTORS There shall be no special benefits for directors. 6
For the board of directors of MERLONI ELETTRODOMESTICI S.p.A. Vittorio Merloni (Chairman) For PHILCO ITALIA S.p.A. Francesco Di Martino (Sole director) For the board of directors of STAR S.P.A. Enrico Cola (Chairman) 7