Pirelli & C.

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5. Handling of company information

5.1 Internal management and disclosure of documents and information

Market transparency, and clear, correct and complete information, are the values that are upheld by the conduct of the corporate bodies, the management and all those who work for the Pirelli Group.

In March 2006 the Board of Directors adopted a specific Procedure for the management and communication to the market of sensitive information that, taking account of the regulations on market abuse, governs the management of sensitive information on Pirelli & C, its unlisted subsidiaries and the listed financial instruments of the Group. The procedure applies to all members of corporate bodies, employees and external collaborators of Group companies that might have access to information that could evolve into sensitive information.

This procedure also applies as instructions to all subsidiaries, in order to obtain from them, without hesitation, the necessary information for the timely and proper fulfilment of financial reporting obligations.

In accordance with the legal provisions, the Procedure specifically defines:

  • the requisites and responsibilities for classifying sensitive information;
  • the arrangements for tracing access to sensitive information in transit;
  • the tools and rules to protect the confidentiality of sensitive information in transit
  • the operational arrangements for the communication of sensitive information to the market and, in general, on communications with the public and/or analysts and investors.

The procedure also disciplines the institution of a register of persons with access to confidential information, in operation since 1 April 2006.

In its meeting on 29 April 2008 the Board of Directors confirmed the validity and applicability of the updated “Procedure for the management and communication to the pubic of sensitive information”47.

5.2 Insider dealing

Matters regarding the transparency of transactions involving Company shares or financial instruments linked to them, made directly or by third parties by relevant persons or by persons closely related or linked to them (i.e. insider dealing) are currently fully governed by law and by the Consob implementing regulations.

Pursuant to the law, Directors and statutory auditors of the issuing Company, as well as “persons who carry out management [...] functions in a listed issuing company and managers that have regular access to sensitive information [...] and have the power to make management decisions that could affect the performance and the future prospects of a listed issuing company…” and others, are obliged to disclose to the market any insider dealing transactions made on Company shares or financial instruments linked to these shares having a value of more than Euro 5,000 annually.

The Company opted to identify its “managers with strategic responsibilities” as these managers48.

Within the more general auditing process for the corporate governance instruments, despite being not obliged by law, the Board of Directors decided to confirm, in accordance with the previous mandate, black-out periods49, for the persons mentioned above who must adhere to insider dealing regulations, who must therefore abstain from making transactions on Company shares or on financial instruments linked to these shares50 in these periods.

These periods may, moreover, be extended or suspended by the Board of Directors in exceptional cases

47 This procedure, annexed to this Report, is also available on the website of the Company at www.pirelli.com, in the “Governance” section.

48 These are Messrs. Gori, Chiappetta and Tanzi. In this respect, please see the “Delegated Bodies” and “General Managers and other Managers” paragraphs.

49 The text of the procedure concerning black-out periods is shown at the end of this Report, is also available on the website of the Company.

50 The text of this procedure is available in the Governance section of the Company website, www.pirelli.com.