Other information

Treasury shares held by the Company and subsidiaries

The treasury shares held by the Company at 31 December 2012 are analysed in the table below:

The Snam S.p.A. Extraordinary Shareholders’ Meeting of 30 July 2012 resolved to cancel 189,549,700 treasury shares with prior elimination of their par value.

The share capital as at 31 December 2012 consisted of 3,381,638,294 shares (3,571,187,994 as at 31 December 2011), with a total value of €3,571,187,994 (unchanged from 31 December 2011).

As at 31 December 2012, Snam had 2,906,550 treasury shares (192,553,051 at 31 December 2011), equal to 0.09% of the share capital (5.39% at 31 December 2011), with a book value of €12 million. There were 2,521,350 treasury shares tied up in the 2005, 2007 and 2008 stock option plans as at 31 December 2012.

No share repurchase plans have been in place since 2008.

In addition, it is confirmed that the subsidiaries of Snam S.p.A. do not hold, and have not been authorised by their shareholders to acquire, shares in Snam S.p.A.

Incentive plans for managers with Snam shares

As of 2009, Snam discontinued the managers’ incentive plan based on grants of stock options to managers of Snam and its subsidiaries pursuant to Article 2359 of the Italian Civil Code. The stock option plans for the preceding financial years are described below. At 31 December 2012, there were a total of 2,521,350 stock options for the purchase of 2,521,350 fully exercisable Snam ordinary shares.

Incentive plans 2002-2004 and 2005

In their meeting of 24 April 2002 and in accordance with Article 2443 of the Italian Civil Code, the shareholders authorised the Board of Directors to increase before 31 July 2004, in one or more instalments, the Company’s share capital against payment up to a maximum of €2,000,000 (equal to approximately 0.1023% of the share capital) by issuing a maximum of 2,000,000 ordinary shares with a par value of €1 each and regular rights to dividends, excluding options pursuant to the last paragraph of Article 2441 of the Italian Civil Code and Article 134, paragraphs 2 and 3 of Legislative Decree 58/1998. These shares were offered for subscription to managers of Snam S.p.A. and its subsidiaries in the three-year period from 2002 to 2004 pursuant to Article 2359 of the Italian Civil Code. In their meeting of 27 April 2005, the shareholders authorised the repurchase of 800,000 treasury shares (approximately 0.04% of share capital) to service the 2005 stock option plan. The purchase was concluded on 28 July 2005.

In accordance with the powers assigned to it by the Shareholders’ Meeting, the Board of Directors decided that the options for the 2002-2004⁴⁶ and 2005 plans may be exercised three years after assignment (the ‘vesting period’) and over five years. The options are personal, unavailable and non-transferable. Options not exercised by the established expiry date are forfeited and therefore do not give the beneficiary any rights.

In the cases of: (i) the mutual termination of the employment of the beneficiary; (ii) loss of control by Snam S.p.A. over the company in which the beneficiary works; (iii) sale to a third party of the company (or business unit) in which the beneficiary works; or (iv) death of the beneficiary, the beneficiary or their heirs maintain the right to exercise the options before 31 December of the year in which the vesting period ends. Should the employee or company unilaterally terminate the employment contract before the three years are up, the options are forfeited.

The grants made between 2002-2004 and 2005 and the related number of options in existence at 31 December 2012 are summarised as follows:

Incentive plans 2006-2008

In their meeting of 10 November 2005 and in accordance with Article 2357 of the Italian Civil Code, the shareholders authorised the Board of Directors to repurchase a maximum of 194,737,950 ordinary Snam shares on the MTA managed by Borsa Italiana S.p.A., within 18 months of the date of the resolution, and for up to a maximum of €800 million⁴⁷.

In their meeting of 27 April 2006, the shareholders authorised the Board of Directors to make available a maximum of 9,000,000 treasury shares (equal to 0.46% of the share capital) for stock option plans to be offered in three annual grants during 2006, 2007 and 2008, respectively.

Unlike the earlier plans, exercise of the options for the 2006-2008 stock option plan is tied to the achievement of performance targets. At the end of each three-year vesting period, the Board of Directors decides the number of options which can be exercised using a scale of between zero and 100 per cent, based on the average Total Shareholders’ Return (TSR) of the Snam stock compared to that of the six main European utilities companies listed and operating on regulated markets.

The options may be exercised three years after their assignment (vesting period) and for a maximum of three years. Options which have not been exercised six years after their grant date are forfeited and do not give the beneficiary any rights. In the cases of: (i) the mutual termination of the employment of the beneficiary; (ii) loss of control by Snam Rete Gas S.p.A. over the company in which the beneficiary works; (iii) sale of the company (or business unit) in which the beneficiary works to a third party; or (iv) death of the beneficiary, the beneficiary or their heirs maintain the right to exercise the option before 31 December of the year in which the vesting period ends in proportion to the period of time between assignment and the occurrence of these events. In the event that the employment contract is terminated unilaterally during the vesting period, the options are forfeited. If this event takes place during the exercise period, the options may be exercised within three months.

On 29 July 2009, the Board of Directors updated the 2006-2008 stock option plan as a consequence of the paid share capital increase decided by the Extraordinary Shareholders’ Meeting of 17 March 2009 and completed on 8 June 2009. In line with the provisions of the Regulations for implementing the Plan, the change made regards the technical adjustment of the strike price and the integration of the number of options assigned to the recipients of the Plan, whose actual assignation is subject to the achievement of the required performance goals.

The grants made between 2006 and 2008 (as amended) and the related number of options in existence at 31 December 2012 are summarised as follows:

Compensation paid to directors and statutory auditors, general managers and managers with strategic responsibilities, and investments held by each of these

Information on the compensation paid to directors and statutory auditors, general managers and managers with strategic responsibilities, and the investments held by each of these, can be found in the Remuneration Report, which is prepared in accordance with Article 123- ter of Legislative Decree 58/1998 (TUF) and approved by the Board of Directors on 27 February 2013. The Remuneration Report is available on the website www.snam.it in the Governance section.

Relationships with related parties

As described above, on 15 October 2012 eni transferred to CDP 30% minus one share of voting capital of Snam, thereby losing its control over Snam.

Due to this transaction, the parties related to Snam include, in addition to the companies associated with the Group or under its joint control, the subsidiaries, directly or indirectly controlled by the Ministry of Economy and Finance, and in particular the companies that belong to the eni Group, Enel and CDP. Transactions with these entities refer to the exchange of assets and the provision of regulated services within the gas sector and, with regard to CDP, the provision of financial resources.

These transactions are part of ordinary business operations and are generally settled at market conditions, i.e. the conditions which would be applied for two independent parties. All the transactions carried out were in the interest of the companies of the Snam Group.

Pursuant to the provisions of applicable legislation, the Company has adopted internal procedures to ensure that transactions carried out by Snam or its subsidiaries with related parties are transparent and correct in their substance and procedure⁴⁸.

Directors and auditors declare their interests affecting the Company and the Group every six months, and/or when changes in said interests occur; they also inform the CEO (or the Chairman, in the case of the CEO), who in turns informs the other directors and the Board of Statutory Auditors, of individual transactions that the Company intends to carry out and in which they have an interest.

The amounts involved in commercial, financial and other transactions with related parties, a description of the nature of the key transactions, and their effect on the balance sheet, income statement and statement of cash flows are given in Note 36 of the notes to the consolidated financial statements and, with regard to the parent company Snam S.p.A., in Note 34 of the notes to the individual financial statements.

Relations with managers with strategic responsibilities (Key Managers) are shown in Note 30 of the notes to the consolidated financial statements.

Performance of subsidiaries

For performance information concerning the sectors in which the Company operates wholly or in part through subsidiaries, please refer to the sections “Business segment operating performance” and “Financial review” within this Report.

Branch offices

As required by Article 2428, paragraph 4, of the Italian Civil Code, it is noted that Snam does not have branch offices.

Research and Development

Research and development activities carried out by Snam are described by business segment in the section “Commitment to sustainable development”.

Significant events after the end of the financial year

The significant events occurring after the end of the financial year are described in the chapter “Profile of the Year – Main events”.