Section III - Structure of the corporate governance system adopted by the company

1. Shareholders’ Meeting and shareholders’ rights

Shareholders’ Meetings are privileged corporate meetings between the Company’s management and its shareholders. The Shareholders’ Meeting, with different quorums, may meet in an ordinary or extraordinary session, depending on the agenda items and issues to be approved. The Bylaws provide for a single call for both the Ordinary and Extraordinary Shareholders’ Meetings.

Pursuant to the law and the Bylaws, the Ordinary Shareholders’ Meeting:

• approves the financial statements;
• appoints and dismisses the directors; appoints the statutory auditors and the Chairman of the Board of Statutory Auditors, as well as the External Auditors, based on a reasoned proposal from the Board of Statutory Auditors;
• determines the remuneration of the directors and statutory auditors;
• resolves on the responsibility of the directors and statutory auditors;
• resolves on the other issues allocated by law to the Shareholders’ Meeting;
• approves the regulations governing Shareholders’ Meeting duties;
• authorises resolutions concerning the sale, transfer, leasing, usufruct and any other act of disposal, including in the context of joint ventures, subjection to business restrictions or strategically relevant business units, involving gas transportation or dispatching activities, notwithstanding the directors’ responsibility for the acts carried out, pursuant to Article 2364, paragraph 1.5 of the Italian Civil Code. Resolutions in such matters are adopted by a favourable vote of shareholders representing at least three quarters of the capital present at the meeting.

Pursuant to the law, the Extraordinary Shareholders’ Meeting resolves on:

• amendments to the Bylaws;
• extraordinary transactions other than those issues which, pursuant to the Bylaws, are the preserve of the Board of Directors.

Article 12 of the Bylaws stipulates that the Board of Directors is competent to resolve on specific matters.

In order to involve shareholders actively in the Company, Snam has introduced various measures aimed at encouraging shareholders’ participation in decisions to be made at Shareholders’ Meetings and facilitating the exercise of their rights.

In particular, in 2010 Snam amended its Bylaws as a result of the adoption in Italy, through Legislative Decree No. 27 of 27 January 2010, of Directive 2007/36/EC on the exercise of certain rights of shareholders in listed companies (the “Shareholder Rights Directive”).

By introducing measures which the legislation leaves to companies’ choice, Snam aimed to provide its shareholders with additional tools to encourage them to take part in Shareholders’ Meetings and exercise their voting rights (e.g. appointment of the listed company’s representative).