SHAREHOLDERS' MEETINGS

The discipline that governs the operation of the Shareholders’ Meetings has been profoundly innovated following the provisions introduced to Italian legislation by Legislative Decree No. 27 of 2010 that adopted Directive 2007/36/EC in the legal system, designed to facilitate the participation by shareholders of listed companies in Shareholders’ Meetings.

The Shareholders’ Meeting is convened as required by law and by the Company Bylaws by means of a Notice of Call published on the Pirelli Internet website. The Notice is generally published at least thirty days prior to the date fixed for the first call of the meeting, and if Shareholders’ Meetings are convened to elect members of the administration and control bodies, the publication is made at least forty days prior to the date of the meeting.

The Notice of Call shall include the details of the date, time and place of the meeting and the list of topics to be discussed.

The Notice of Call shall contain, inter alia, a description of the procedures which the shareholders are required to comply with to attend the meetings and to exercise their voting rights in the meeting, as well as information concerning the following aspects (i) the right to ask questions prior to the meeting; (ii) the time limits and procedures to exercise the right to supplement the Agenda; (iii) the proxy voting procedure; (iv) the identity of the party (that the Company may have designated to confer proxy voting, as well as the procedures and time limits to confer the proxies).

The Shareholders’ Meeting shall not resolve on matters which have not been included on the Agenda.

Shareholders who, alone or together, represent at least one fortieth of the share capital may request to supplement the list of topics to be discussed, within five days from the date of publication of the Notice to convene the Shareholders’ Meeting, indicating in the application the additional topics which they propose.

The Shareholders’ Meeting is empowered to resolve, inter alia, on the following matters in ordinary or extraordinary sessions: (i) the appointment and revocation of the members of the Board of Directors and the Board of Statutory Auditors and concerning their fees and responsibilities, (ii) approval of the Financial Statements and the allocation of profits, (iii) purchase and sale of treasury shares, (iv) amendments to the Company Bylaws, (v) the issuance of convertible bonds.

The Shareholders’ Meeting may be held in Italy, and also outside the Company’s registered office, and the ordinary session shall be convened within 120 days from the end of the financial year, whereas, the Shareholders’ Meeting convened to approve the Financial Statements may be convened within 180 days from the end of the financial year, pursuant to Article 2364 of the Italian Civil.

The Shareholders’ Meeting may be held in first or second call (in third call only in the case of extraordinary Shareholders’ Meeting) or in a single call, in this case the majorities envisaged for the second call of the ordinary Shareholders’ Meeting or for the third call of the extraordinary Shareholders’ Meetings shall apply.

In this latter case, the Shareholders’ Meeting is to be constituted and resolves based on the following procedures, with the exception of specific matters for which the laws and regulations envisage a different majority:

  • in the ordinary session:
    • the Shareholders’ Meeting in first call shall be deemed validly constituted subject to the presence of shareholders representing at least half of the share capital and resolves with the absolute majority of the share capital represented;
    • the Shareholders’ Meeting in second call (or only call) shall be deemed validly constituted whatever portion of the share capital is represented by the shareholders in attendance and resolves with the absolute majority of the share capital represented;
  • in the extraordinary session:
    • the Shareholders’ Meeting in first call shall be deemed validly constituted subject to the presence of shareholders representing at least one half of the share capital and resolves with the favourable vote of at least two thirds of the share capital represented;
    • the Shareholders’ Meeting in second call shall be deemed validly constituted with the presence of shareholders representing more than one third of the share capital and resolves with the favourable vote of at least two thirds of the share capital represented;
    • the Shareholders’ Meeting in third call (or only call) shall be deemed validly constituted with the presence of shareholders representing at least one fifth of the share capital and resolves with the favourable vote of at least two thirds of the share capital represented.

Shareholders are entitled to view all the documents filed at the Company’s registered office in the case of Shareholders’ Meetings already called and to obtain a copy thereof at their own expense.

The proceedings of the Shareholders’ Meetings are regulated by the law, by the Company Bylaws and by the Regulations for Shareholders’ Meetings, duly approved by the Shareholders’ Meeting held on May 11, 2004 and as subsequently amended by the Shareholders’ Meeting held on April 23, 200767.

The Shareholders’ Meeting is chaired, in order of priority, by the Chairman of the Board of Directors, by a Deputy Chairman or by a Managing Director (the Meeting shall be chaired by the person most senior by age if there are two or more deputy Chairmen or Managing Directors).

If the above-mentioned persons are absent, then the Meeting shall be chaired by another person duly appointed by the Meeting with the majority vote of the share capital represented in the Shareholders’ Meeting.

The Chairman of the Shareholders’ Meeting – inter alia – is required to verify that the Meeting has been duly constituted; ascertain the identity of the persons in attendance and their right to attend, also by proxy; ascertains the quorum required to resolve; manages the proceedings, also establishing a different order to discuss the topics indicated in the Notice of Call. In general, the Chairman adopts all appropriate measures for the purposes of ensuring the orderly progress of the debate and the voting, defining the procedures and ascertaining the results.

The resolutions passed by the Shareholders’ Meeting are to be recorded in Minutes signed by the Chairman and by the Secretary or by the Notary Public. The Minutes of the extraordinary Shareholders’ Meeting shall be drawn up by a Notary Public designated by the Chairman of the Shareholders’ Meeting.

Following the changes introduced by Legislative Degree No. 27/2010 that introduced to Italian legislation the so-called record date mechanism the shareholders entitled to attend Shareholders’ Meetings and entitled to cast their vote are those shareholders who, based on a communication from the intermediary to the Company, are entitled to attend the meeting and cast their vote at the close of the accounting day on the seventh trading day prior to the date set for the meeting in first call or only call. The credit and debit records performed on accounts after this deadline will not influence the entitlement to vote at the Shareholders’ Meeting.

Shareholders with voting rights may be represented by means of a proxy issued in accordance with the procedures envisaged by the applicable law and regulations. The Company shall designate for each Shareholders’ Meeting one or more parties that Shareholders entitled to cast their vote in the Meeting may appoint as a proxy with instructions for voting on all or some of the items on the Agenda. The proxy shall not apply with regard to proposals for which no voting instructions have been given.

The designated parties, the procedures and the time limits to confer proxies are detailed in the Notice of Call of the Shareholders’ Meeting.

The proxy may also be notified to the Company in an electronic form by using one of the following alternative methods:

  • a) use of the relevant section on Pirelli’s Internet website, indicated by the Company in the Notice of Call;
  • b) sending a message to the certified e-mail address indicated by the Company in the Notice of Call.

The Notice of Call may also identify one of the foregoing methods as the preferred method to be used on the date of the single Shareholders’ Meeting to which the Notice refers.

With reference to the right of each person attending the Meeting to take the floor to speak on the topics under discussion, it is important to note that the Regulations for Shareholders’ Meetings envisage that the Chairman may, at the beginning of the Meeting, and taking into account the importance of the individual items on the Agenda, determine the amount of time available to each speaker to express his/her view, where such time that must not be less than 15 minutes. Those wishing to take the floor shall request the Chairman or the Secretary to give them the floor, and shall identify the topic to which their intervention refers.

The request may be submitted until the Chairman has declared closed the discussion of the item to which the request for the floor refers.

The persons in attendance may ask for the floor a second time during the course of the same discussion, for a time of no more than 5 minutes, solely for the purpose of replying or to express voting declarations.

The Regulations empower the Chairman of the meeting to grant the shareholders that made such a request, pursuant to law and the Company Bylaws, to add no more than 15 minutes of discussion time on the topics on the Agenda to illustrate the corresponding resolution proposals and to explain the respective reasons.

Following the changes introduced by Legislative Decree No. 27/2010, shareholders may ask questions on the topics on the Agenda, even prior to the meeting, in accordance with the procedures indicated in the Notice of Call. The questions received prior to the meeting shall be answered no later than during the meeting concerned, also by means of a single answer that refers to other similar questions. No answer is required if the information requested is already available in a “questions and answers” format on Pirelli’s Internet website.

2011 Shareholders’ Meetings

Two Shareholders’ Meetings were held during the 2011 financial year, once on April 21, 2011, in second call with the participation of about 63% of the ordinary share capital to discuss (i) approval of the Financial Statements as of 31 December 2010 (approved by the favourable votes of 99.698% of the share capital represented at the meeting); (ii) to appoint the Board of Directors (in this regard, the reader is referred to the whole of section 4 “Board of Directors”); (iii) a Consultation on the Group’s General Remuneration Policy (approved by the favourable votes of 89.647% of the share capital represented at the meeting).

In the extraordinary session the Shareholders’ Meeting approved the amendment to Article 5 (Share Capital), to Articles 7 and 8 (Shareholders’ Meeting), to Articles 10 and 11 (Administration) of the Company Bylaws (duly approved by the favourable votes of 99.171% of the share capital represented in the meeting), as well as the voluntary reduction of the share capital described in paragraph 2, subsection a) “Share Capital structure) (by the favourable votes of 99.229% of the share capital represented at the meeting).

The following documents, inter alia, are available on the Company’s Internet website for each shareholders’ meeting: (i) Notice of Call; (ii) a copy of the Minutes of the Shareholders’ Meeting; (iii) a summary report on the votes cast; (iv) documents, reports and resolution proposals examined by the Shareholders’ Meeting (v) the press release distributed by the Company outlining the proceedings of the Shareholders’ Meeting.

Shareholders’ Meeting of savings shareholders

As far as the Shareholders’ Meeting of the savings shareholders is concerned this Meeting is convened by the Common Representative of the Company’s savings shareholders, or by the Company’s Board of Directors, whenever they deem it appropriate or when the Meeting is to be convened, as provided for by law.

The special Shareholders’ Meeting of the savings shareholders is chaired by the Common Representative of the Company’s savings shareholders or, in his absence, by the person elected with the favourable vote of the majority of the share capital represented at the Shareholders’ Meeting.

Pursuant to the Company Bylaws68 the expenses relating to the organisation of the special category Shareholders’ Meeting and the remuneration of the Common Representative are to be borne by the Company.

The Shareholders’ Meeting of the savings shareholders held on January 31, 2012 appointed prof. Giuseppe Niccolini as the Common Representative for the savings shareholders for the 2012-2014 financial years (with the favourable vote of 99.941% of the category share capital in attendance at the Shareholders’ Meeting) the Meeting also established the respective fee of 15 thousand euro (with the favourable vote of 99.941% of the category share capital in attendance at the Shareholders’ Meeting) and unanimously approved to establish the fund for the expenses necessary to protect the common interests of the category. At the time the Common Representative was reappointed, the savings Shareholders expressed their views with separate voting concerning the appointment of the Common Representative and the definition of the fee and the common fund.

67 The Regulations for Shareholders’ Meetings are detailed at the end of the Report and are available on the Internet website.
68 Article 6 of the Company Bylaws.