Terna — AGM Information 2019

Apr 8, 2019

REGARDING THE ITEMS ON THE AGENDA

AGENDA

• 1. Financial statements at December 31, 2018. Reports by the Board of Directors, the Board of Statutory Auditors and the Audit Company. Related resolutions. Presentation of the consolidated financial statements at December 31, 2018. Presentation of the consolidated non-financial statement at December 31, 2018;
• 1. Allocation of the net income for the financial year;
• 1. Appointment of two members of the Board of Directors under the terms of Art. 2386 of the Italian Civil Code and related resolutions;
• 1. Appointment of the independent auditors for the nine-year period 2020-2028 and definition of the relative fee;
• 1. Annual report on remuneration: consultation on the Remuneration Policy pursuant to Art. 123-ter, paragraph 6 of Legislative Decree no. 58/1998 (Consolidated Law on Finance).

REGARDING THE FIRST ITEM ON THE AGENDA

Financial statements at December 31, 2018. Reports by the Board of Directors, the Board of Statutory Auditors and the Audit Company. Related resolutions. Presentation of the consolidated financial statements at December 31, 2018. Presentation of the consolidated non-financial statement at December 31, 2018

Dear Shareholders,

The dossier entitled "2018 Annual Financial Report of TERNA S.p.A. and of the Terna Group", made available to you via the methods and terms specified by current law on the subject, includes the illustration of TERNA S.p.A. Financial Statements and Consolidated Financial Statements as at December 31, 2018, along with the relative Directors' Report that, in implementation of the powers assigned by Italian Legislative Decree no. 32 of February 2, 2007 which amended Art. 40 (Report on Operations) of Italian Legislative Decree no. 127 of April 9, 1991, have been prepared as a single document. This report refers to the above-mentioned document.

In addition to the above, the following have also been provided for you, via the same methods and terms: (i) the "Annual Report on Corporate Governance and Ownership Structure" and (ii) the "2018 - Sustainability Report - Consolidated Non-Financial Statement", document, the latter also prepared under the terms of Italian Legislative Decree no. 254 of December 30, 2016 ("Leg. Dec. 254/2016"). It is noted that these documents, like the consolidated financial statements, are presented to the Shareholders' Meeting only for information purposes, as they are not subject to approval of the latter.

The above having been stated, we submit for your approval the following

proposal

"The Shareholders' Meeting of TERNA S.p.A., having examined the illustrative report of the Board of Directors,

resolves

to approve the financial statements at December 31, 2018 of Terna S.p.A. closed with net income of 661,291,201.83 Euro."

REGARDING THE SECOND ITEM ON THE AGENDA

Allocation of the net income for the financial year

Dear Shareholders,

Considering the results obtained, the Board of Directors proposes to allocate a dividend per share for the whole of 2018 of 0.2332 Euro, corresponding to a total amount of 468,730,134.40 Euro, recalling that TERNA S.p.A. already distributed an interim dividend equal to 7.87 Euro cent per share in November 2018 for a total amount of 158,186,370.40 Euro.

The above having been stated, we submit for your approval the following

proposal

"The Shareholders' Meeting of TERNA S.p.A., having examined the illustrative report of the Board of Directors,

resolves

to allocate the net income for 2018 of TERNA S.p.A., equal to 661,291,201.83 Euro, as follows:

• · 158,186,370.40 Euro to cover the interim dividend paid from November 21, 2018;
• · 310,543,764.00 Euro a as a final dividend to be distributed in the amount of 0.1545 Euro for each one of the 2,009,992,000 ordinary shares outstanding to be paid - gross of any legal deductions - on June 26, 2019, with the record date of coupon no. 30 set for June 24, 2019 (pursuant to Art. 83-terdecies of Italian Legislative Decree no. 58 of 24 February 1998, the "TUF": June 25, 2019);
• · 192,561,067.43 Euro as Retained Earnings."

REGARDING THE THIRD ITEM ON THE AGENDA

Appointment of two members of the Board of Directors under the terms of Art. 2386 of the Italian Civil Code and related resolutions

Dear Shareholders,

With reference to this item on the agenda, you have been called to resolve, under the terms of Art. 2386 of the Italian Civil Code, regarding the appointment of two members of the Board of Directors, in replacement of two directors stepping down during their office.

It is noted that the current Board of Directors was appointed by the Shareholders' Meeting of April 27, 2017, for a period of three financial years, with termination upon the Shareholders' Meeting called for approval of the 2019 Financial Statements. The aforementioned Shareholders' Meeting, under the terms of Art. 14.1 of the company By-Laws, also defined the number of members of the Board of Directors as nine.

In the context of the aforementioned appointment, the following were elected, amongst others: (i) Director Stefano Saglia, from the list presented by the majority shareholder CDP Reti S.p.A., and (ii) Director Luca Dal Fabbro, from the list submitted by a group of minority shareholders (the "Minority List"), both non-executive, independent directors under the terms of Arts 147-ter, paragraph 4, and 148, paragraph 3, of Italian Legislative Decree no. 58/1998 (the "Consolidated Law on Finance" or "TUF") of the Governance Code for Listed Companies.

Both of these Directors, as explained in greater detail below, have stood down from their roles and it is therefore necessary to replace them under the terms and for the purposes of Art. 2386 of the Italian Civil Code.

1. Replacement of Director Stefano Saglia

Following the resignation of Director Stefano Saglia – received during 2018 – the Board of Directors, during the session of February 15, 2019, under the terms of Art. 14.5 of the Company By-Laws and Art. 2386 of the Italian Civil Code, has co-opted Paolo Calcagnini as new Non-Executive Director, with approval from the Board of Statutory Auditors and with the positive opinion of the Appointments Committee, subject to standard verification of the existence, in regard to the aforementioned individual, of the requisites for the role and the lack of any ineligibility or incompatibility. Upon cooption, the Director Paolo Calcagnini declared that he did not possess the necessary independence requirements as per the TUF and the Governance Code.

In line with the aforementioned Art. 2386 of the Italian Civil Code, the Director thus co-opted currently covering the role of Non-Executive Director (non-independent) - is appointed until the Shareholders' Meeting called for May 8, 2019, which shall then be called to appoint a new Director.

Considering the above, the Board of Directors intends to propose that the Shareholders' Meeting confirm the appointment as Company Director for the already co-opted Paolo Calcagnini.

For this purpose, the following are attached to this document (Annex 1): (i) the curriculum vitae of the candidate, Paolo Calcagnini, and (ii) the declaration whereby the latter declares to accept such appointment by the Shareholders' Meeting and confirms, under his own responsibility, to be in possession of the prerequisites defined for the role by law and by the company by-laws, and that he is not in a situation of ineligibility and/or incompatibility under the terms of applicable legislation and the by-laws, as already declared and certified for his co-option.

2. Replacement of Director Luca Dal Fabbro

It is also highlighted that, as communicated by the Company on March 22, 2019, on this date Terna also received notification of the resignation of Director Luca Dal Fabbro, non-executive and independent member of the Board, from the Minority List as mentioned, who also held the role of Chairperson of the Audit and Risk, Corporate Governance and Sustainability Committee and member of the Related-Parties Committee. Following this resignation, for the replacement of Director Mr Dal Fabbro, the Board of Directors, in consideration of the imminent call of the Shareholders' Meeting, has not agreed on co-option of a replacement nor proposal of candidates, therefore referring his replacement directly to the Shareholders, under the terms of Art. 2386 of the Italian Civil Code.

For the purposes of the above, persons intending to make proposals for the appointment are therefore invited to submit the relative candidatures accompanied by: (i) the curriculum vitae and an exhaustive disclosure regarding the personal and professional characteristics of the candidates, including indication where applicable of the suitability of the same to be categorised as independent directors under the terms of Arts 147-ter, paragraph 4, and 148, paragraph 3, of the TUF and/or Art. 3 of the Governance Code; (ii) declarations whereby individual candidates accept their candidature and certify, under their own responsibility, the lack of any cause for ineligibility or forfeiture (including those as per Art. 15 of the company by-laws) or incompatibility, as well as existence of the prerequisites defined by applicable legislation and company by-laws for the role of director; and (iii) the appropriate documentation certifying the legitimacy of candidatures.

Specifically, to allow participants in the Shareholders' Meeting to make an informed vote, the Shareholders intending to make proposals for the appointment are invited to submit the relative candidatures, along with the aforementioned documentation, to the Company via post (FAO Legal and Corporate Affairs structure - TERNA S.p.A. Corporate Affairs and Corporate Governance - Viale Egidio Galbani, 70 - 00156 Rome), or as a copy sent by e-mail or certified electronic mail to the following certified e-mail address: assemblea2019@pec.terna.it, or by fax to the number +39 06 8313 8218, with sufficient prior notice, where possible by the fifteenth day prior to the date of the Shareholders' Meeting (April 23, 2019), allowing the Company to publicly disclose the aforementioned documentation in good time at the head office of the Company, on the Company website (www.terna.it) and on the website of the authorised storage service ".it) as well as at the stock exchange management company Borsa Italiana S.p.A. (www.borsaitaliana.it).

In any case, it is noted that - providing that appointment proposals are submitted under the terms and for the purposes of Art. 126-bis of the TUF - to proceed with voting on the candidatures for the role of director, the proposals, also if submitted and publicly disclosed prior to the Shareholders' Meeting, must be formally re-submitted during the Shareholders' Meeting, accompanied by the previously indicated documentation.

* * * *

Without prejudice to the foregoing, in relation to appointment of the Directors, the following is noted

• · under the terms of the final point of Art. 126-bis, paragraph 1, of the TUF, individuals with voting rights may submit proposals for resolution directly during the Shareholders' Meeting;
• " under the terms of applicable legislation and Art. 14.5 of the company by-laws, the Shareholders' Meeting will be called to resolve with the majorities under law, defined in Art. 14.3, letter d), of the By-Laws, as the list voting mechanism is applicable only in the case of full renewal of the Board of Directors;
• appointment of the two new Directors will be performed with two separate and distinct votes, both to be adopted – as indicated above – with the majorities defined by law, in the order and via the methods to be indicated by the Chairperson of the Shareholders' Meeting, during the meeting, according to the provisions of Art. 10 of the Shareholders' Meeting Regulations;
• · the following are applicable: provisions of law and the by-laws regarding integrity, independence, incompatibility and ineligibility of Directors, as indicated also in Art. 15 of the By-Laws, therefore including the provisions regarding incompatibility defined by Art. 15.5 adopted under the terms of Directive no. 2009/72/CE of July 13, 2009, of Italian Legislative Decree no. 93 of June 1, 2011, and the resolutions of the Authority for electricity, gas and water (AEEGSI, now Regulatory Authority for Energy, Networks and Environment ARERA) nos ARG/com 153/11 and 142/2013/R/EEL with which the ARERA regulated the certification procedures of the electricity transmission operator and adopted the final decision to certify TERNA S.p.A. as electricity "transmission system operator" ("Unbundling Legislation"). In this

regard, it is noted that the Board of Directors as currently composed - therefore without counting the Directors to be appointed in replacement of the two Directors that have left their role - as of now, guarantees observance of applicable legislation on gender balance and independence of members, as the following are present: (i) three female Directors, currently representing the overall minority gender; and (ii) five independent Directors under the terms of the TUF, four of whom are also classed as independent under the terms of the Governance Code. Nevertheless, it is noted that the presence of independent Directors under the terms of the Governance Code serves also for composition of the Board Committees, which both the Directors originally appointed by the Shareholders' Meeting of April 27, 2017 belonged to. Regarding the composition of the Board of Directors, you are invited to also consider the guidelines of the Diversity Policy formulated by the Board of Directors, on proposal of the Appointments Committee, and available on the Company website (www.terna.it);

· the limits on exercise of voting rights as per Art. 14.3, lett. e) and Art. 14.3, lett. f), of the By-Laws are also applicable, under the terms of which, respectively: (i) at the time of election of Directors, no operator of the electricity generation, distribution, supply and transmission sectors - including through subsidiaries, parent companies, or subsidiaries controlled by the same parent company - may exercise voting rights for more than 5% of the share capital, and (ii) under the terms of Directive no. 2009/72/EC of July 13, 2009 and Italian Legislative Decree no. 93 of June 1, 2011, and without prejudice to the assessments made by the ARERA in the context of the certification of the Company as electricity transmission system operator, for the purposes of Art. 2373 of the Italian Civil Code, parties that, at the time of election of directors, operate in the sector of gas or electricity generation or supply, directly or indirectly, control a business operating in the sector of gas or electricity generation or supply or hold a significant investment in the same as per Art. 120 of the TUF, are considered in conflict of interest. In this context, all participants in the Shareholders' Meeting must declare, under their own responsibility, the existence of any conflict of interest.

Finally, it is noted that both of the Directors to be appointed by the Shareholders' Meeting under the terms of Art. 2386 of the Italian Civil Code (i) shall remain in office until the expiry of the current Board of Directors and therefore until the Shareholders' Meeting called to approve the 2019 Financial Statements and (ii) will receive (pro rata) the same fee already resolved by the Shareholders' Meeting on April 27, 2017 for members of the Board of Directors, equal to 35,000 Euro gross annually, in addition to reimbursement of expenses.

The above having been stated, we submit the following

proposal

"The Shareholders' Meeting of TERNA S.p.A.,

• · acknowledging the resignations received, in relation to the role of Company Director, of the Directors Stefano Saglia and Luca Dal Fabbro, both appointed by the Ordinary Shareholders' Meeting of April 27, 2017;
• also acknowledging that, under the terms of Art. 2386 of the Italian Civil Code, on occurrence of this Shareholders' Meeting, the appointment of Director Paolo Calcagnini expires, who was co-opted by the Board of Directors on February 15, 2019 in replacement of Director Stefano Saglia;
• considering the resolutions reached, on appointment of the Board of Directors currently in office, by the Shareholders' Meeting of April 27, 2017, both in relation to the number of members of the Board of Directors and the duration of the mandate and total fee amount; and
• · having examined the illustrative report of the Board of Directors on this item on the agenda, that proposes to the Shareholders' Meeting (i) regarding replacement of Director Mr Saglia, to confirm the appointment as a member of the Board of Directors of Mr Paolo Calcagnini, and (ii) regarding the replacement of Director Mr Dal Fabbro, to refer the formulation of appointment proposals directly to the Shareholders,

resolves

• · to appoint as Member of the Board of Directors of the Company, under the terms of Art. 2386 of the Italian Civil Code, Mr Paolo Calcagnini, born in Rome on 12 June 1979, Tax ID CLCPLA78H12H501F, whose mandate will expire together with the Directors in office and therefore upon the Shareholders' Meeting called for approval of the 2019 Financial Statements; and
• · to confirm for Paolo Calcagnini and the other Director that will be appointed by this Shareholders' Meeting under the terms of Art. 2386 of the Italian Civil Code, in replacement of the Director Mr Dal Fabbro, the same annual fee (pro rata) for the role of member of the Board of Directors of the Company, as determined by the Shareholders' Meeting of April 27, 2017,

referring to the Shareholders' Meeting the decision, via separate voting, again under the terms of Art. 2386 of the Italian Civil Code, regarding the appointment of another Director in replacement of Director Mr Dal Fabbro on the basis of the proposals formulated by those with the relative right, also directly during the Meeting".

Annex 1

to the report regarding the third item on the agenda:

Appointment of two members of the Board of Directors and related resolutions

Curriculum vitae of the candidate proposed by the Board of Directors

Since October 2018, he has been the Group Chief Financial Officer and Reporting Manager of the Cassa Depositi e Prestiti Group, with duties involving the Finance, ALM and Treasury, Collection, Budgeting and Audit Reports, Tax, Planning and Management Control sectors.

From September 2015, he was the Planning and Control Manager for the Group, where he was responsible for strategic planning, budgeting, monitoring and reporting, impairment testing and cost management activities.

In 2015, he was the Principal of the Boston Consulting Group, with a particular focus on senior management consultancy financial institutions, on topics such as regulation and supervision, risk management and asset evaluation.

From 2013 to 2015 he was the Strategic Planning and Management Control Manager and a Member of the Board of Directors at Banca Tercas and Banca Caripe, part of the Banca Popolare di Bari Group.

From 2002 to 2013 he worked as an Associate Partner at McKinsey and Company - Mediterranean Complex (Milan).

He has a degree in Economics and Business from the La Sapienza University of Rome, and subsequently completed a Master of Business Administration (MBA) at Oxford University: Said Business School.

Declaration of possession of requisites and acceptance is attached.

DICHIARAZIONE

Il sottoscritto Paolo Calcagnini, nato a Roma il 12-06-1979 , codice fiscale CLCPLA79H12H501F, residente in Roma, Via Prato Della Signora n. 15, c.a.p.00199 con riferimento alla candidatura alla carica di Consigliere di Amministrazione di TERNA - Rete Elettrica Nazionale Società per Azioni ("Terna" o la "Società"), per le determinazioni di nomina ai sensi dell'art. 2386 del codice civile, da prendersi da parte dell'Assemblea degli azionisti di Terna convocata per 1'8 maggio 2019

dichiara

• · di essere a conoscenza dei requisiti che la normativa vigente e lo statuto sociale di Terna (lo "Statuto") prescrivono per l'assunzione della carica di Amministratore della Società;
• · di accettare la candidatura a componente il Consiglio di Amministrazione di Terna e la carica ove nominato;
• e di non ricadere in alcuna situazione di ineleggibilità e di incompatibilità prevista per la carica di Amministratore della Società dalle vigenti disposizioni di legge e dello Statuto;
• di possedere i requisiti di onorabilità, professionalità e indipendenza come di seguito riportato
• e attesta, sotto la propria responsabilità,

REQUISITI DI ONORABILITA'

• di essere in possesso dei requisiti di onorabilità per l'assunzione della carica di Amministratore previsti dalla normativa vigente (dall'artt. 147 quinquies e 148, comma 4, del decreto legislativo 24 febbraio 1998 n. 58 – "TUF", dall'art. 2 del decreto del Ministro della giustizia 30 marzo 2000 n. 162) e dall'art. 15.2 dello Statuto, e in particolare:
  • di non trovarsi in una delle condizioni di ineleggibilità o decadenza previste dall'art. 2382 del codice civile;
  • di non essere stato sottoposto a misure di prevenzione disposte dall'autorità giudiziaria ai sensi della legge 27 dicembre 1956, n. 1423, o della legge 31 maggio 1965, n. 575, e successive modificazioni e integrazioni, salvi gli effetti della riabilitazione;
  • so di non essere stato condannato con sentenza irrevocabile, salvi gli effetti della riabilitazione:
    • 1. a pena detentiva per uno dei reati previsti dalle norme che disciplinano l'attività bancaria, finanziaria, assicurativa e dalle norme in materia di mercati e strumenti finanziari, in materia tributaria e di strumenti di pagamento;
• 1. a pena detentiva per uno dei reati previsti nel titolo XI del libro V del codice civile e nel regio decreto 16 marzo 1942, n. 267;
• 1. alla reclusione per un tempo non inferiore a sei mesi per un delitto contro la pubblica amministrazione, contro la fede pubblica, contro il patrimonio, contro l'ordine pubblico e contro l'economia pubblica;
• 1. alla reclusione per un tempo non inferiore a un anno per un qualunque delitto non colposo;
• di non essere stato sottoposto all'applicazione, su richiesta delle parti, di una delle pene previste dalla precedente lett. c), salvo il caso di estinzione del reato;
• e di non aver riportato in Stati esteri condanne penali o altri provvedimenti sanzionatori per fattispecie corrispondenti a quelle che comporterebbero, secondo l'ordinamento italiano, la perdita dei requisiti di onorabilità;

REQUISITI DI PROFESSIONALITA'

• di essere in possesso dei requisiti di professionalità per l'assunzione della carica di Amministratore previsti dall'art. 15.3 dello Statuto, e in particolare di aver maturato un'esperienza complessiva di almeno un triennio nell'esercizio di: 1
  • attività di amministrazione o di controllo ovvero compiti direttivi presso società di capitali dotate di un capitale sociale non inferiore a 2 milioni di euro; ovvero
  • □ attività professionali o di insegnamento universitario di ruolo in materie giuridiche, economiche, finanziarie e tecnico-scientifiche strettamente attinenti all'attività della Società, come definite nell'art. 26.1 dello Statuto2; ovvero
  • □ funzioni dirigenziali presso enti pubblici o pubbliche amministrazioni operanti nei settori creditizio, finanziario e assicurativo o, comunque, in settori strettamente attinenti a quello di attività della Società, come definiti nell'art. 26.1 dello Statuto3;

REQUISITI DI INDIPENDENZA

Requisiti di indipendenza ai sensi della legge e dell'art. 15.4 dello Statuto: 4

¹ Barrare la casella di interesse.

² A i sensi dell'art. 26.1 dello Statuto, "[ .. ] si considerano strettamente attinenti all'ambito di attività della Società le materie inerenti il diritto commerciale ed il diritto tributario, l'economia aziendale e la finanza aziendale, nonché le materie ed i settori di attività inerenti l'energia in generale, le comunicazioni e le strutture a rete […]". 3 V. nota n. 2.

⁴ Barrare la casella di interesse.

O di essere in possesso dei requisiti di indipendenza per l'assunzione della carica di Amministratore stabiliti dalla legge (dagli artt. 147 ter, comma 4, e 148, comma 3, del TUF) e dall'art. 15.4 dello Statuto3;

ovvero

di non essere in possesso dei suddetti requisiti di indipendenza;

Requisiti di indipendenza ai sensi del Codice di Autodisciplina delle società quotate pubblicato dal Comitato per la Corporate Governance promosso da Abi, Ania, Assonime, Assogestioni, Borsa italiana, Confindustria del dicembre 2011 (come aggiornato nel luglio 2015 e successivamente nel luglio 2018 e accessibile sul sito internet di Borsa Italiana S.p.A. subhttps://www.borsaitaliana.it/comitato-corporate-governance/codice/2018clean.pdf} cui Terna aderisce: 6

O di essere in possesso dei requisiti di indipendenza per l'assunzione della carica di Amministratore stabiliti dall'art. 3 del Codice di Autodisciplina ;

6 Barrare la casella di interesse.

"3. AMMINISTRATORI INDIPENDENTI

Principi

⁵ L'art. 15.4 dello Statuto stabilisce che:

^"Almeno un terzo degli amministratori in carica – con arrotondamento, in caso di numero frazionario inferiore all'unità, all'unità inferiore – deve essere in possesso dei requisiti di indipendenza stabiliti per i sindaci dall'articolo 148, comma 3, del decreto legislativo 24 febbraio 1998 n. 58.

I consiglio di amministrazione valuta periodicamente la sussistenza dei requisiti di indipendenza di cui al presente art. 15.4 in capo a ciascuno dei suoi componenti non esecutivi, tenendo conto delle informazioni fornite dai singoli interessati"

L'art. 148, comma 3, del decreto legislativo 24 febbraio 1998, n. 58, richiamato dal suddetto art. 15.4 dello Statuto, dispone che:

^"Non possono essere eletti sindaci e, se eletti, decadono dall'ufficio:

a) coloro che si trovano nelle condizioni previste dall'articolo 2382 del codice civile;

b) il coniuge, i parenti e gli affini entro il quarto grado degli amministratori della società, gli amministratori, il ri connego, i partini e gli affini entro il quarto grado degli amministratori delle società da questa controllate, delle società che la controllano e di quelle sottoposte a comune controllo;

c) coloro che sono legati alla società od alle società da questa controllate od alle società che la controllano od a quelle sottoposte a comune controllo, ovvero agli amministratori della società e ai soggetti di cui alla lettera b) da rapporti di lavoro autonomo o subordinato ovvero da altri rapporti di natura patrimoniale o professionale che ne compromettano l'indipendenza".

L'art. 147, comma 3, del decreto legislativo 24 febbraio 1998, n. 58, riguarda solo gli Amministratori espressione delle liste di minoranza e dispone che:

^"Salvo quanto previsto dall'articolo 2409-septiesdecies del codice civile, almeno uno dei componenti del consiglio di amministrazione è espresso dalla lista di minoranza che abbia ottenuto il maggior numero di voti e non sia collegata in alcun modo, neppure indirettamente, con i soci che hanno presentato o votato la lista risultata prima per numero di voti. Nelle società organizzate secondo il sistema monistico, il componente espresso dalla lista di minoranza deve essere in possesso dei requisiti di onorabilità, professionalità e indipendenza determinati ai sensi dell'articolo 148, commi 3 e 4. Il difetto dei requisiti determina la decadenza dalla carica."

^? Si riporta di seguito il testo dell'art. 3 del Codice di Autodisciplina. Per il relativo commento si rinvia al Codice di Autodisciplina stesso.

^3. P. Un numero adeguato di amministratori non esecutivi sono indipendenti, nel senso che non intrattengono, né hanno di recente intrattenuto, neppure indirettamente, con l'emittente o con soggetti legati all'emittente, relazioni tali da condizionarne attualmente l'autonomia di giudizio.

ovvero

3.P.2. L'indipendenza degli amministratori è valutata dal consiglio di amministrazione dopo la nomina e, successivamente, con cadenza annuale. L'esito delle valutazioni del consiglio è comunicato al mercato. Criteri applicativi

3.C.I. Il consiglio di amministrazione valuta l'indipendenza dei propri componenti non esecutivi avendo riguardo più alla sostanza che alla forma e tenendo presente che un amministratore non appare, di norma, indipendente nelle seguenti ipotesi, da considerarsi come non tassative:

• a) se, direttamente o indirettamente, anche attraverso società controllate, fiduciari o interposta persona, controlla l'emittente o è in grado di esso un'influenza notevole, o partecipa a un patto parasociale attraverso il quale uno o più soggetti possono esercitare il controllo o un'influenza notevole sull'emittente;
• b) se è, o è stato nei precedenti tre esercizi, un esponente di rilievo dell'emittente, di una sua controllata avente rilevanza strategica o di una società sottoposta a comune controllo con l'emittente, ovvero di una società o di un ente che, anche insieme con altri attraverso un patto parasociale, controlla l'emittente o è in grado di esercitare sullo stesso un'influenza notevole;
• c) se, direttamente o indirettamente (ad esempio attraverso società controllate o delle quali sia esponente di rilievo, ovvero in qualità di partner di uno studio professionale o di una società di consulenza), ha, o ha avuto nell'esercizio precedente, una significativa relazione commerciale, finanziaria o professionale:
  • con l'emittente, una sua controllata, o con alcuno dei relativi esponenti di rilievo;
  • con un soggetto che, anche insieme con altri attraverso un patto parasociale, controlla l'emittente, ovvero trattandosi di società o ente - con i relativi esponenti di rilievo;
  • ovvero è, o è stato nei precedenti tre esercizi, lavoratore di uno dei predetti soggetti;
• d) se riceve, o ha ricevuto nei precedenti tre esercizi, dall'emittente o da una società controllata o controllante una significativa remunerazione aggiuntiva rispetto all'emolumento "fisso" di amministratore non esecutivo dell'emittente e al compenso per la partecipazione ai comitati raccomandati dal presente Codice) anche sotto forma di partecipazione a piani di incentivazione legati alla performance aziendale, anche a base azionaria;
• e) se è stato amministratore dell'emittente per più di nove anni negli ultimi dodici anni;
• f) se riveste la carica di amministratore esecutivo in un'altra società nella quale un amministratore esecutivo dell'emittente abbia un incarico di amministratore;
• g) se è socio o amministratore di una società o di un'entità appartenente alla rete della società incaricata della revisione legale dell'emittente;
• h) se è uno stretto familiare di una persona che si trovi in una delle situazioni di cui ai precedenti punti.

3.C.2. Ai fini di quanto sopra, sono da considerarsi "esponenti di rilievo" di una società o di un ente: il presidente dell'ente, il presidente del consiglio di amministrazione, gli amministratori esecutivi e i dirigenti con responsabilità strategiche della società o dell'ente considerato.

3.C.3. Il numero e le competenze degli amministratori indipendenti sono adeguati in relazione alle dimensioni del consiglio e all'attività svolta dall'emittente; sono inoltre tali da consentire la costituzione di comitati all'interno del consiglio, secondo le indicazioni contenute nel Codice.

Negli emittenti appartenenti all'indice FTSE-Mib almeno un terzo del consiglio di amministrazione è costituito da amministratori indipendenti. Se a tale quota corrisponde un numero non intero, quest'ultimo è arrotondato per difetto.

In ogni caso gli amministratori indipendenti non sono meno di due.

3.C.4. Dopo la nomina di un amministratore che si qualifica indipendente e successivamente, al ricorrere di circostanze rilevanti ai fini dell'indipendenza e comunque almeno una volta all'anno, il consiglio di amministrazione valuta, sulla base delle informazioni fornite dall'interessato o a disposizione dell'emittente, le relazioni che potrebbero essere o apparire tali da compromettere l'autonomia di giudizio di tale amministratore.

Il consiglio di amministrazione rende noto l'esito delle proprie valutazioni, dopo la nomina, mediante un comunicato diffuso al mercato e, successivamente, nell'ambito della relazione sul governo societario.

In tali documenti il consiglio di amministrazione:

• riferisce se siano stati adottati e, in tal caso, con quale motivazione, parametri di valutazione differenti da quelli indicati nel Codice, anche con riferimento a singoli amministratori;

• illustra i criteri quantitativi e/o qualitativi eventualmente utilizzati per valutare la significatività dei rapporti oggetto di valutazione.

• C.5. Il collegio sindacale, nell'ambito dei compiti ad esso attribuiti dalla legge, verifica la corretta applicazione dei criteri e delle procedure di accertamento adottati dal consiglio per valutare l'indipendenza dei propri membri. L'esito di tali controlli è reso noto al mercato nell'ambito della relazione sul governo societario o della relazione dei sindaci all'assemblea.

3.C.6. Gli amministratori indipendenti si riuniscono almeno una volta all'anno in assenza degli altri amministratori"

di non essere in possesso dei suddetti requisiti di indipendenza;

Requisiti di indipendenza ai sensi dell'art. 15.5 dello Statuto8: 9

di non rivestire funzioni di amministratore, componente del consiglio di sorveglianza o di altri organi che rappresentano legalmente una impresa che eserciti attività di generazione o fornitura di energia elettrica o gas;

ovvero

□ di rivestire funzioni di amministratore, componente del consiglio di sorveglianza o di altri organi che rappresentano legalmente una impresa che eserciti attività di generazione o fornitura di energia elettrica o gas e di impegnarsi a dimettersi dalle predette funzioni al momento della nomina nel Consiglio di Amministrazione di Terna.

Dichiara inoltre di impegnarsi a comunicare tempestivamente alla Società ogni successiva variazione delle informazioni rese con la presente dichiarazione e, ogni informazione utile al fine di consentire, ove necessario, di accertare la veridicità delle informazioni fornite nella presente dichiarazione.

****

Trattamento dei dati personali

Il sottoscritto/a, autorizza il trattamento dei dati personali ai sensi del GDPR 2016/670 del 27 aprile 2016 e del Decreto Legislativo 30 giugno 2003, n. 196 "Codice in materia di protezione dei dati personali" e la pubblicazione del proprio curriculum vitae depositato.

QUAA ... , 28/03/90 (Luogo e data)

In fede

⁸ L'art. 15.5 dello Statuto, per le finalità di cui all'articolo 9, par. 1, lettera d), della "Direttiva 2009/72/CE del Parlamento europeo e del Consiglio, del 13 luglio 2009, relativa a norme comuni per il mercato interno dell'energia elettrica e che abroga la direttiva 2003/54/CE'' - (Direttiva 2009/72/CE) e articolo 36, comma 7, lettera c) del Decreto Legislativo 1 giugno 2011, n. 93 "Attuazione delle direttive 2009/72/CE, 2009/73/CE e 2008/92/CE relative a norme comuni per il mercato interno dell'energia elettrica, del gas naturale e ad una procedura comunitaria sulla trasparenza dei prezzi al consumatore finale di gas e di energia elettrica, nonché abrogazione delle direttive 2003/54/CE e 2003/55/CE' (in G.U. n.148 del 28 giugno 2011 - Suppl. Ordinario n. 157) - (D.lgs. 93/11), prevede che: "Gli amministratori della Società non possono rivestire, a pena di decadenza, funzioni di amministratore, componente del consiglio di sorveglianza o di altri organi che rappresentano legalmente una impresa che eserciti attività di generazione o fornitura di energia elettrica o gas. Il consiglio di amministrazione valuta periodicamente la sussistenza dei requisiti di indipendenza di cui al presente art. 15.5 in capo a ciascuno dei suoi componenti, secondo le modalità di cui al precedente art. 15.4.". 9 Barrare la casella di interesse.

REPORT OF THE BOARD OF DIRECTORS

REGARDING THE FOURTH ITEM ON THE AGENDA

Appointment of the independent auditors for the period 2020-2028 and definition of the relative fee.

Dear Shareholders,

With approval of the financial statements as at December 31, 2019 of Terna S.p.A. (hereinafter "Terna" or the "Company") the independent auditing appointment previously assigned to the company PricewaterhouseCoopers S.p.A. ("Exiting Auditing Company") for the 2011-2019 nine-year period will end, and cannot be renewed under the terms of current legislation.

Given the aforementioned expiry, during 2018 the Company has launched the procedures for selection of the new auditing company to which the task shall be assigned for the next nine-year period, 2020-2028.

In this regard, considering that:

• under the terms of article 2359, paragraph 1, no. 2, of the Italian Civil Code, the Company is indirectly controlled by Cassa Depositi e Prestiti S.p.A. (hereinafter "CDP") through CDP Reti S.p.A., - CDP is bound to publish consolidated financial statements for the companies that it directly and indirectly controls (hereinafter, only for the purposes of this recommendation, the "CDP Group"),

• CDP has proposed to the Company to adhere to a single tender procedure aimed, as far as possible, at identifying a single auditing company for the Group, observing and in compliance with the provisions of Regulation (EU) no. 537/2014 (hereinafter, the "Regulation"), Italian Legislative Decree no. 39 of January 27, 2010 (as amended by Italian Legislative Decree no. 135 of July 17, 2016 in implementation of Directive 2014/56/EU (hereinafter Italian Legislative Decree no. 39/2010) and Italian Legislative Decree no. 50 of April 18, 2016 ("Public Contracts Code"),

• the principle of a single group auditing company (currently already achieved in the context of the CDP Group) has become standard market practice under the current legislative system regarding independent auditing and offers significant benefits in terms of effectiveness, efficiency and costs of auditing,

• participation in the single tender procedure for selection of the single auditing company for the CDP Group has been defined as in the best interests of Terna and its subsidiaries on the basis that is permits a significant saving in auditing costs,

Terna has therefore conferred, also in the name and on behalf of its subsidiaries, a representation mandate upon CDP for performance and management of the aforementioned single tender procedure, without prejudice to the autonomy of the Board of Statutory Auditors and the Shareholders' Meeting of Terna with regard to assignment of independent auditing.

The choice to launch this procedure one year earlier than the expiry of the appointment is due primarily to the opportunity to eliminate, or at least reduce, the possible incompatibilities deriving for the new auditing company - from Regulation (EU) no. 537/2014 of April 16, 2014 (the "Regulation"), that prohibits Terna, as a "public-interest entity", from conferring, during the financial year directly prior to the beginning of the new auditing period (cooling-in period), any type of appointment to parties to which auditing activity is then assigned.

The Board of Statutory Auditors, in its role as Internal Auditing and Independent Auditing Committee under the terms of Art. 19 of Italian Legislative Decree no. 39/2010, has drawn up the Recommendation (annex 1 to this report) for conferral of the independent auditing appointment for the 2020-2028 period and for definition of the relative fee, with indication of at least two possible alternatives for conferral and the preference of the Board of Statutory Auditors, duly justified, in compliance with current applicable legislation (hereinafter the "Recommendation").

The Board of Statutory Auditors notes that, with the above Recommendation, the Board of Statutory Auditors proposes to the Shareholders' Meeting to confer the independent auditing of Terna S.p.A. for the financial years from 2020 to 2028 to Deloitte & Touche S.p.A., both belonging to leading international professional services networks, expressing its preference for Deloitte & Touche S.p.A., which was the company that achieved the highest overall score as a result of the aforementioned selection procedure.

For your information, it is noted that, as communicated by CDP on March 19, 2019, the Ordinary Shareholders' Meeting of the latter, held on the same date, resolved to confer the independent auditing appointment for the 2020-2028 period on Deloitte & Touche S.p.A..

All of the above having been stated, the Board of Directors, acknowledging the provisions of law regarding duration and conferral of independent auditing, under the terms of which the Ordinary

Shareholders' Meeting resolves on conferral of the independent auditing appointment and definition of the relative fee on proposal on the Board of Statutory Auditors,

invites the Shareholders' Meeting

to adopt the following resolution:

"The Shareholders' Meeting of TERNA S.p.A., having examined the illustrative report of the Board of Directors and on proposal of the Board of Statutory Auditors contained in the attached Recommendation

resolves

to confer the independent auditing appointment of Terna S.p.A. for the financial years from 2020 to 2028 on Deloitte & Touche S.p.A., according to the terms and methods proposed by the Board of Statutory Auditors".

Terna S.p.A. Board of Statutory Auditors' recommendation regarding award of the independent auditor contract for the 2020-2028 nine-year period

Introduction 1.

With approval of the financial statements as at December 31, 2019 of Terna S.p.A. (hereinafter "Terna" or the "Company") the independent auditing appointment previously assigned to the company PricewaterhouseCoopers S.p.A. ("Outgoing Auditing Company") for the 2011-2019 nine-year period will end, and cannot be renewed under the terms of current legislation.

Therefore, given the aforementioned term, during 2018 Terna has launched the procedures for selection of the new auditing company to which the assignment shall be entrusted for the next nine-year period, 2020-2028.

In this regard, considering that:

• under the terms of article 2359, paragraph 1, no. 2, of the Italian Civil Code, the Company is indirectly controlled by Cassa Depositi e Prestiti S.p.A. (hereinafter "CDP") through CDP Reti S.p.A .;

• CDP is bound to publish consolidated financial statements for the companies that it directly and indirectly controls (hereinafter, only for the purposes of this recommendation, the "CDP Group");

• CDP has proposed to the Company to adhere to a single tender procedure aimed, as far as possible, at identifying a single auditing company for the Group, observing and in compliance with the provisions of Regulation (EU) no. 537/2014 (hereinafter, the "Regulation"), Italian Legislative Decree no. 39 of January 27, 2010 (as amended by Italian Legislative Decree no. 135 of July 17, 2016 in implementation of Directive 2014/56/EU (hereinafter Italian Legislative Decree no. 39/2010) and Italian Legislative Decree no. 50 of April 18, 2016 ("Public Contracts Code");

• the principle of a single group auditing company (currently already achieved in the context of the CDP Group) has become standard market practice under the current legislative system regarding independent auditing and offers significant benefits in terms of effectiveness, efficiency and costs of auditing;

• participating in a single tender procedure for the selection of the sole auditor for the CSP Group is in the best interest of Terna, as well as its subsidiaries, as it ensures significant savings with respect to the costs that are currently sustained, which, with reasonable certainty, could not be obtained with an independent tender procedure,

Terna has therefore conferred, also in the name and on behalf of its subsidiaries, a representation mandate upon CDP for performance and management of the aforementioned single tender procedure, without prejudice to the autonomy of the Board of Statutory Auditors and the Shareholders' Meeting of Terna with regard to assignment of independent auditing.

The Board of Statutory Auditors, in its capacity as internal control and internal audit committee, has drawn up the recommendation herein for the Board of Directors (hereinafter "Recommendation").

The Recommendation was prepared following an appropriate selection procedure, carried out as provided by Article 16, paragraph 3 of the Regulation and described hereinafter.

2. Single tender procedure

2.1 Preamble

The Terna's Board of Statutory Auditors, together with the relevant corporate structures, had several discussions with the Board of Statutory Auditors and the relevant corporate structures of CDP in order to agree on the procedure and the selection criteria to be followed, taking the Company's characteristics and requirements into account, through the definition of appropriate guidelines.

On completion of the procedure, Terna's Board of Statutory Auditors has also verified that said procedure was conducted in compliance with the guidelines as agreed.

2.2 Requirements for the qualification of bidders approved to participate in the tender procedure

For the purposes of qualification, the following requisites were deemed to be relevant:

• enrolment in the Legal Auditors Registry;

• a 2017 turnover deriving from independent auditing of financial statements equivalent to at least € 9 million;

• independent auditing of financial statements for no less than two companies listed on European Stock Exchanges (Euro Stoxx 600 index) during the three-year period 2015-2017;

• independent auditing of the financial statements of at least one Italian bank with assets no less than € 8 billion during the three-year period 2015-2017.

2.3 Bidders qualified to participate in the tender procedure

The auditing firms qualified to participate in the tender (European restricted tender procedure) are Deloitte & Touche S.p.A. (hereinafter "DT"), EY S.p.A. (hereinafter "EY") and KPMG S.p.A. (hereinafter "KPMG").

The aforementioned firms were asked to present a technical offer and an economic offer.

The score attributed to each participant, equivalent to a maximum of 100 points, was distributed as follows:

• technical offer: a maximum of 70 points,

• economic offer: a maximum of 30 points.

2.4 Assessment criteria

The elements considered and the maximum points attributed to them by a specially appointed jury for the purpose of assessing the technical offer were:

• added value of previous experience (maximum 20 points): number of audit engagements with companies belonging to the reference sector performed during the past 5 years, complexity of the engagements performed, duration of the engagements and number of days supplied,

• quantity and team mix (maximum 15 points): overall hours intended for service and to the suggested professional mix, distinguishing between partner, manager and lead auditor,

• level of professionalism and experience of the working team (maximum 25 points): Level of professionalism of the partner and the manager based on specific experiences acquired with clients who are active in the reference sector,

• effectiveness, comprehensiveness and concreteness of the working methodology (maximum 10 points): operational approach suggested for performing the engagement, risk assessment methods and organising the work.

For the purposes of the assessment of the economic offer, the score was calculated based on the discount applied by each bidder with respect to the highest discount among those offered.

2.5 Allocated scores

Based on the described assessment activities and their related outcomes, the jury has allocated the following scores:

DT	EY	KPMG
69.190	70.000	68.413
30.000	28.530	29.276
99 190	98.530	97.689

2.6 Selected bidders

Based on the scores reported above, the successful auditing firms are therefore DT and EY.

3. Proposals of the two successful auditing firms for the Terna Group

The presented proposals from DT and EY are in compliance with the relevant provisions of Italian Legislative Degree 39/2010 as well as the Regulation.

With regard to the Parent Company, both proposals provide for the performance of the following activities:

• audit of the separate financial statements for the financial year,

• audit of the consolidated financial statements,

• audit of the annual reporting package,

• check that corporate accounts are kept properly,
• compliance statement regarding the consolidated non-financial statement,
• limited audit of the condensed consolidated interim financial statements,
• audit of the interim reporting package,

• verification of the English translation of the financial statements dossier,

• verifications intended for approving tax returns,

• audit of the separate annual accounts for ARERA (Italian Regulatory Authority for Energy, Networks and Environment).

The following table summarises the working hours and fees proposed by DT:

Total	6,919	500,837
Subsidiaries	4,108	297,442
Parent Company	2,811	203,395
	Hours	Fees €

The following table summarises the working hours and fees proposed by EY:

	Hours	Fees €
Parent Company Terna	2,882	207,731
Subsidiaries	4,207	303,785
Total	7,089	511,516

Both successful bidders have also agreed to provide a 6% discount on the abovereported fees should one of them become the auditor of the CDP Group for at least 90% of the total fees sustained by the Group's companies.

Reasoned recommendation from the Board of Statutory Auditors

Based on the performed procedure, the offers received, the assessments carried out and their outcomes, considering the cited Article 16, paragraph 2 of the Regulation which provides for the Board of Statutory Auditors to indicate in its own reasoned recommendation at least two possible alternatives of conferral for the purposes of allowing it the right to choose and to express a duly justified preference, the Board of Statutory Auditors recommends to the Board of Directors to suggest to the Shareholders' Meeting to award the contract for auditing Terna S.p.A.'s financial statements for the financial years from 2020 to 2028 to Deloitte & Touche S.p.A or to EY S.p.A., as both belong to primary international professional services networks, while expressing its preference for Deloitte & Touche S.p.A., having obtained the highest total score at the outcome of the mentioned procedure.

The Board of Statutory Auditors, pursuant to Article 16, paragraph 2 of the Regulation, states lastly that the Recommendation herein was not influenced by third parties and that no clauses of the type contained in paragraph 6 of the aforementioned Article 16 were applied.

Rome, 1st March 2019

The Board of Statutory Auditors

Riccardo Schioppo, Chairman

Vincenzo Simone, Standing Auditor

Alessandra Zunino de Pignier, Standing Auditor

REPORT OF THE BOARD OF DIRECTORS

REGARDING THE FIFTH ITEM ON THE AGENDA

Annual Report on remuneration: consultation on the Remuneration Policy pursuant to Art. 123-ter, paragraph 6 of Legislative Decree no. 58/1998 (Consolidated Law on Finance)

Dear Shareholders,

Following the entry into force of the regulatory provisions implementing Art. 123-ter of Legislative Decree no. 58 of February 24, 1998 (Consolidated Law on Finance) issued by Consob (with resolution no. 18049 of December 23, 2011 in the Official Journal no. 303 of December 30, 2011, and in force since December 31, 2011), the Shareholders' Meeting convened annually for approval of the Financial Statements is called to resolve on the policy adopted by the Company with reference to the remuneration of members of the Administrative Bodies, General Managers and Executives with Strategic Responsibilities.

This Policy is illustrated in the first section of a Remuneration Report that is approved by the Board of Directors and published by listed companies, in compliance with Art. 123-ter of the Consolidated Law on Finance, at least twenty-one days prior to the date of the Shareholders' Meeting.

In implementing the above-mentioned provisions, TERNA's Board of Directors, in the meeting held on March 20, 2019, approved the "Annual Remuneration Report" (the "Report") that includes all details regarding the topic contained in this item of the agenda and, therefore, reference should be made to said Report for any additional information.

For this purpose, please note that the Report is divided into two section and includes:

• · in the first section, the description of the Policy adopted by the Company on the specific matter and the procedures used for adopting and implementing this Policy;
• · in the second section, all the information established by paragraph 4 of the above-mentioned article of the Consolidated Law on Finance, regarding the assigned remuneration and additional information established by Art. 84-quater of the "Regulation implementing Legislative Decree no. 58 of February 24, 1998, concerning the regulation of issuers" adopted by Consob (Issuers Regulations) regarding shares held directly or indirectly in the Company by Directors, Auditors, General Managers and Executives with Strategic Responsibilities.

With respect to said Report, the Shareholders' Meeting is called to resolve, pursuant to paragraph 6 of Art. 123-ter, of the Consolidated Law on Finance, in favour of or against the first section of the Report. The resolution is not binding.

The above having been stated, we submit for your approval the following

proposal

"TERNA S.p.A.'s Shareholders' Meeting, having examined TERNA's "Annual Remuneration Report" approved by the Board of Directors

resolves

pursuant to and in compliance with the provisions of Art. 123-ter, paragraph 6, of Legislative Decree no. 58 of February 24, 1998, favourably the first section of the Report that illustrates the Remuneration Policy adopted by TERNA S.p.A. and the procedures used for adopting and implementing said Policy."