Salini Impregilo S.p.A. Board of Directors' Report on the first item of the agenda of the Extraordinary Shareholders Meeting concerning: "Amendment

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1 Salini Impregilo S.p.A. Board of Directors' Report on the first item of the agenda of the Extraordinary Shareholders Meeting concerning: "Amendment of Articles 7 (Share Capital - Bonds), 10 (Right of withdrawal), 16 (Convocation of Shareholders' Meeting), 18 (Powers of the Chairman), 20 (Management and Representation), 24 (Management and Representation) and 29 (Board of Statutory Auditors) of the company Bylaws. Related and consequent resolutions". 1

2 SALINI IMPREGILO S.P.A. BOARD OF DIRECTORS REPORT ON THE FIRST POINT OF THE AGENDA OF THE EXTRAORDINARY SHAREHOLDERS MEETING CONCERNING: "AMENDMENT OF ARTICLES 7 (SHARE CAPITAL - BONDS), 10 (RIGHT OF WITHDRAWAL), 16 (CONVOCATION OF SHAREHOLDERS' MEETING), 18 (POWERS OF THE CHAIRMAN), 20 (MANAGEMENT AND REPRESENTATION), 24 (MANAGEMENT AND REPRESENTATION) AND 29 (BOARD OF STATUTORY AUDITORS) OF THE COMPANY BYLAWS. RELATED AND CONSEQUENT RESOLUTIONS". Dear Shareholders, This report has been prepared by the Board of Directors of Your Company to illustrate the reasons justifying the proposal for the amendment of Articles 7, 10, 16, 18, 20, 24 and 29 of the company Bylaws. 1. PROPOSAL FOR THE AMENDMENT OF ARTICLES 7 (SHARE CAPITAL - BONDS), 10 (RIGHT OF WITHDRAWAL), 16 (CONVOCATION OF SHAREHOLDERS MEETING), 18 (POWERS OF THE CHAIRMAN) AND 24 (MANAGEMENT AND REPRESENTATION) The proposed amendments to articles 7, 10, 16, 18 and 24 of the company Bylaws set out below, compared with the current text of these articles, are designed to meet the need to eliminate all procedural rigidity in the functioning of the corporate bodies and in the exercise of shareholders rights, by referring to the legislation in force at the time. With regard to Article 7, the amendments proposed address the need to: (i) (ii) eliminate the power reserved to the Shareholders' meeting to issue bonds pursuant to 2410 of the Italian Civil Code, since this is means of ordinary management, by now a common practice, for obtaining financial resources, also in order to maintain a proper ratio between debt and equity; provide the Company, pursuant to Article 2349 of the Italian Civil Code, with the power to assign profits or profit reserves to the employees of the Company or its subsidiaries, through the issue of shares reserved to them free of charge. Including the power to assign profits and/or profit reserves to employees of the Company or its subsidiaries, through the issue of shares pursuant to the first paragraph of Article 2349 of the Italian Civil Code referred to in point (ii) is proposed in implementation (and subject to approval) of the remuneration policy referred to in the fifth item on the agenda of the ordinary session of the Shareholders' Meeting and taking into account of the 2

3 performance share plan referred to in the fourth item on the agenda of the ordinary session of the Shareholders' meeting. Proposal for the amendment of Articles 7, 10, 16, 18 and 24 of the company Bylaws: CURRENT TEXT Article 7 By resolution of the shareholders meeting, the share capital may be increased by issuing new shares, including shares with rights different from those of the shares already issued. The resolution on the share capital increase, passed with the majorities pursuant to Articles 2368 and 2369 of the Italian Civil Code, may exclude the option right within the limits of 10% of the existing share capital, provided the issue price is consistent with the market value of the shares, as confirmed by a specific report written by the independent auditors. The Shareholders Meeting has the power to resolve the issue of bonds, setting the relevant regulations. [ ] Article 7 By resolution of the shareholders meeting, the share capital may be increased by issuing new shares, including shares with rights different from those of the shares already issued. The resolution on the share capital increase, passed with the majorities pursuant to Articles 2368 and 2369 of the Italian Civil Code, may exclude the option right within the limits of 10% of the preexisting share capital, provided the issue price is consistent with the shares' market value, and this is confirmed in a specific report by the independent auditors by an independent auditor or auditing firm. The Shareholders Meeting has the power to resolve the issue of bonds, setting the relevant regulations. The company may issue bonds, including convertible, possibly cum warrant, as well as any other financial instrument, in compliance with legal provisions. Furthermore, it is also permitted, in the manner and forms required by law, to allocate profits and/or profit reserves to employees of the Company or its subsidiaries, through the issue of shares, pursuant to the first paragraph of Article 3

4 2349 of the Italian Civil Code. [ ] Article 10 The right of withdrawal may be exercised by shareholders in the cases allowed by law. However, shareholders who did not vote to approve resolutions extending the Company s duration shall not have a right of withdrawal. Shareholders wishing to exercise the right of withdrawal shall give notice thereof to the Board of Directors and the Board of Statutory Auditors by registered letter with notice of receipt, and for the withdrawal shall place the shares for which they intend to exercise the withdrawal in a restricted account with an authorised intermediary. The registered letter must be sent to the above mentioned Boards within 15 days from the date of registration of the resolution ratifying the withdrawal in the Register of Companies or, should the reason justifying the withdrawal be different from a resolution, within 30 days from the date when the withdrawing shareholder demonstrates they became aware of the fact justifying withdrawal. The Directors shall immediately record the receipt of the notification of withdrawal in the shareholder ledger. The right of withdrawal shall be effective for the Company from the fifteenth day after the date of receipt of the last registered letter with notice of Article 10 The right of withdrawal may be exercised by shareholders in the cases allowed by law. However, shareholders who did not vote to approve resolutions extending the Company s duration shall not have a right of withdrawal. Shareholders wishing to exercise the right of withdrawal shall give notice thereof to the Board of Directors and the Board of Statutory Auditors by registered letter with notice of receipt, and for the withdrawal shall place the shares for which they intend to exercise the withdrawal in a restricted account with an authorised intermediary. The registered letter must be sent to the above mentioned Boards within 15 days from the date of registration of the resolution ratifying the withdrawal in the Register of Companies or, should the reason justifying the withdrawal be different from a resolution, within 30 days from the date when the withdrawing shareholder demonstrates they became aware of the fact justifying withdrawal. The Directors shall immediately record the receipt of the notification of withdrawal in the shareholder ledger. The right of withdrawal shall be effective for the Company from the fifteenth day after the date of receipt of the last registered letter with notice of 4

5 receipt sent by the withdrawing shareholder, in compliance with the third paragraph of this Article, subject to the last paragraph of Article 2437 of the Italian Civil Code. Article 16 Shareholders' meetings shall be called through publication of a notice containing the information required by applicable regulations, within the times set by law: - on the company s internet site; - in the Official Gazette of the Italian Republic or the Corriere della Sera newspaper, when required by a compulsory order or so decided by the board of directors; - in any other manner required by the laws and regulations in effect at any given time. The notice may indicate the day of a second call or of any subsequent calls. The admittance document issued for the first call is also valid for the subsequent calls. receipt sent by the withdrawing shareholder, in compliance with the third paragraph of this Article, subject to the last paragraph of Article 2437 of the Italian Civil Code. Article 16 Shareholders meetings shall be called through publication of a notice containing the information required by applicable regulations, within the times set by law: The Shareholders' meeting shall be called by means of a notice to be published within the time limits and according to the procedures of law. - on the company s internet site; - in the Official Gazette of the Italian Republic or the Corriere della Sera newspaper, when required by a compulsory order or so decided by the board of directors; - in any other manner required by the laws and regulations in effect at any given time. The ordinary and extraordinary sessions of the Shareholders' meeting shall be held in on call, unless the Board of Directors, for a specific Shareholders' meeting, resolves to provide a date for the second and, where appropriate, third call, with disclosure of the notice of call. The notice may indicate the day of a second call or of any subsequent calls. The admittance document issued for the first call is also valid for the subsequent calls. 5

6 The Board of Directors may nonetheless decide, if it deems it appropriate and by giving express indication of this in the notice of call, that the ordinary and extraordinary shareholders' meeting are to be held in a single call. Shareholders may inform the company of their proxies by sending the document to the address indicated in the notice. Article 18 The Chairman of the Shareholders' Meeting shall have full powers to verify the eligibility of holders of voting rights to attend the meeting and, more specifically, the validity of proxies, so as to ascertain whether the meeting is duly convened and with the required quorum, as well as the power to manage and govern the proceedings and establish the voting procedures. The Shareholders' Meeting shall appoint a Secretary, who need not be a Shareholder, and, if it deems it necessary, appoint two vote-counters among Shareholders and Statutory Auditors. The Board of Directors may nonetheless decide, if it deems it appropriate and by giving express indication of this in the notice of call, that the ordinary and extraordinary shareholders meeting are to be held in a single call. Shareholders may inform the company of their proxies by sending the document to the address indicated in the notice. Article 18 The Chairman of the Shareholders Meeting shall have full powers to verify the eligibility of holders of voting rights to attend the meeting and, more specifically, the validity of proxies, so as to ascertain whether the meeting is duly convened and with the required quorum, as well as the power to manage and govern the proceedings and establish the voting procedures and appoint one or more votecounters. The Shareholders Meeting shall appoint a Secretary, who need not be a Shareholder, and, if it deems it necessary, appoint two vote-counters among Shareholders and Statutory Auditors. 6

7 Article 24 The Board of Directors is granted the widest powers, without exception, for the ordinary and extraordinary management of the Company and may perform all acts deemed appropriate for all the activities constituting the corporate purpose or instrumental to its achievement, with the sole exclusion of those reserved by law to the shareholders' meeting. The Board of Directors may thus resolve to establish or close branches in Italy or abroad, reduce the share capital in the event of a shareholder withdrawal, amend the Bylaws to comply with changes in legislation, transfer the registered office within Italy, and carry out a merger by absorption of a wholly owned subsidiary or a company in which at least a 90% ownership stake is held, all of the above in compliance with the provisions of Articles 2505 and 2505 bis of the Italian Civil Code. In compliance with the procedures for related-party transactions adopted by the Company, in urgent cases or in connection with business crisis situations, related-party transactions may be carried out using the simplified methods permitted by applicable regulations. Article 24 The Board of Directors is granted the widest powers, without exception, for the ordinary and extraordinary management of the Company and may perform all acts deemed appropriate for all the activities constituting the corporate purpose or instrumental to its achievement, with the sole exclusion of those reserved by law to the shareholders meeting. The Board of Directors may thus resolve to establish or close branches in Italy or abroad, reduce the share capital in the event of a shareholder withdrawal, amend the Bylaws to comply with changes in legislation, transfer the registered office within Italy, and carry out a merger and spin-off by absorption of a wholly owned subsidiary or a company in which at least a 90% ownership stake is held, all of the above in compliance with the provisions of Articles 2505 and 2505 bis of the Italian Civil Code. In compliance with the procedures for related-party transactions adopted by the Company, in urgent cases or in connection with business crisis situations, related-party transactions may be carried out using the simplified methods permitted by applicable regulations. 7

8 PROPOSAL FOR THE AMENDMENT OF ARTICLE 20 ( MANAGEMENT REPRESENTATION) The proposed amendments to Article 20 set out below, compared with the current text, are designed to meet the need to provide flexibility in the composition of the management body and grant the Shareholders' meeting the power to establish, from time to time, the number of its members, in any case within a range that allows it to maintain an appropriate composition to generate the dialogue required for the management of a leading issuer like the Company. The proposal to grant the outgoing Board of Directors the right to submit lists is aimed at bringing the appointment mechanisms of the management body in line with the recommendations of the Corporate Governance Code of the Borsa Italiana S.p.A. CURRENT TEXT Article 20 The Company is managed by a Board of Directors consisting of fifteen members. Article 20 The Company is managed by a Board of Directors consisting of a minimum of seven and a maximum of fifteen members. Directors may not remain in office for more than three years and their term of office expires at the date of the shareholders' meeting called to approve the financial statements of the last year of their term and they may be re-elected. The Shareholders' meeting, prior to the appointment, shall determine the number of members of the Board of Directors and the term of office of the Directors within the aforementioned limits. The candidates that meet the requirements set by the legislation and regulations in force at the time of their appointment may accept such appointment. The candidates that meet the requirements set by the legislation and regulations in force at the time of their appointment (and term of office) may accept such appointment. Directors are elected using lists submitted by the The election of the members of the Board of 8

9 shareholders that comply with the pro tempore legislation on gender equality, according to the procedures detailed below, in which the candidates are listed in numeric sequence. In order to be valid, each list includes at least two candidates that meet the independence requirements established by law. They are shown separately and one of the two heads the list. UNCHANGED Directors shall be made that comply with the pro tempore legislation on gender equality, on the basis of the lists according to the procedures detailed below, in which the candidates are listed in numeric sequence, In order to be valid, each list includes at least two candidates that meet the submitted by the shareholders and by the outgoing Board of Directors according to the procedures detailed below, in compliance with the pro tempore legislation on gender equality and the minimum number of directors that must meet independence requirements established by law They are shown separately and one of the two heads the list based on the number of members of the Board of Directors. The candidates meeting the independence requirements shall be expressly identified in each list. UNCHANGED Lists that contain three or more candidates must be comprised of candidates of both genders, so that the gender with fewer representatives has at least one fifth (on the first term of office starting after 12 August 2012) and then one-third (rounded up) of the candidates. Lists submitted that do not meet the above requirements will be treated as not having been submitted. The following procedure is carried out to elect the Lists that contain three or more candidates must be comprised of candidates of both genders, so that the gender with fewer representatives has at least one fifth (on the first term of office starting after 12 August 2012) and then one-third (rounded up) of the candidates. Lists submitted that do not meet the above requirements will be treated as not having been submitted. The following procedure is carried out to elect the 9

10 Board of Directors: a) If at least one list obtains a number of votes representing at least 29% of the Company s share capital entitled to vote at Ordinary Shareholders' Meetings, 14 elected Directors shall be drawn from the list that received the highest number of votes, in the numerical sequence in which they are listed on the list, while 1 Director shall be drawn from the minority list that received the highest number of votes and is not connected in any way, directly or indirectly, with the shareholders who filed or voted for the list that received the highest number of votes. If the first two lists receive the same number of votes, 7 Directors shall be drawn from each of the said lists, in the numerical sequence in which they are listed on the lists, while 1 Director shall be drawn from the list that obtained the third-highest number of votes and is not connected in any way, directly or indirectly, with the shareholders who filed or voted for the lists that received the highest number of votes. If only two lists are submitted, the oldest candidate among those not already drawn from the first two lists shall be elected as the 15th Director; Board of Directors: a) If at least one list obtains a number of votes representing at least 29% of the Company s share capital entitled to vote at Ordinary Shareholders' Meetings, 14 elected all of the Directors to be elected, except one, shall be drawn from the list that received the highest number of votes, in the numerical sequence in which they are listed on the list, while 1 the remaining Director shall be drawn from the minority list that received the highest number of votes and is not connected in any way, directly or indirectly, with the shareholders who filed or voted for the list that received the highest number of votes. If the first two lists receive the same number of votes, 7 Directors an equal number of Directors minus one shall be drawn from each of the said lists, in the numerical sequence in which they are listed on the lists, and the remaining Director while 1 Director shall be drawn from the list that obtained the third-highest number of votes and is not connected in any way, directly or indirectly, with the shareholders who filed or voted for the lists that received the highest number of votes. If only two lists are submitted and they receive the same number of votes, the oldest candidate among those not already drawn from the first two lists shall be elected as the 15th Director; b) If none of the lists receives votes equal to at least b) If none of the lists receives votes equal to at least 29% of the share capital with voting rights at ordinary 29% of the share capital with voting rights at shareholders meetings, the 15 directors are taken ordinary shareholders meetings, the 15 directors are 10

11 from all the lists submitted as follows: the votes received by the lists will be divided successively by progressive whole numbers from one to fifteen. The resulting scores are assigned to the candidates of each list in consecutive order using the order in which they are included in the lists. The candidates are then included in a single decreasing order list, based on the scores given to each one. Those with the highest score are elected. If more than one candidate has the same score, the one from the list that has not had any director elected from it or has had the smallest number of directors elected is taken. taken from all the lists submitted as follows: the votes received by the lists will be divided successively by progressive whole numbers from one to fifteen the number of Directors to be appointed. The resulting scores are assigned to the candidates of each list in consecutive order using the order in which they are included in the lists. The candidates are then included in a single decreasing order list, based on the scores given to each one. Those with the highest score are elected. If more than one candidate has the same score, the one from the list that has not had any director elected from it or has had the smallest number of directors elected is taken. UNCHANGED UNCHANGED Should the election of candidates using the above Should the election of candidates using the above methods not ensure composition of the Board of methods not ensure composition ensure the Directors in accordance with the applicable legislation necessary number of Directors belonging to the on gender equality, the candidate of the gender most less represented gender or the minimum number represented elected last in consecutive order from the of Directors that meet the independence list that received most votes shall be replaced by the requirements under law based on the number of first candidate of the less represented gender not members of the Board of Directors in accordance elected from the same list in sequential order. This with the pro tempore applicable legislation on gender replacement procedure shall be continued until the equality, the candidate of the gender most Board of Directors composition complies with the pro represented elected last in consecutive order from tempore applicable legislation on gender equality. If the list that received most votes shall be replaced by this procedure does not produce this result, the first candidate, as the case may be, of the less substitution shall take place on the basis of a represented gender and/or meeting the resolution adopted by a relative majority of the independence requirements under law, not Shareholders Meeting, after candidates of the gender elected from the same list in sequential order. This replacement procedure shall be continued until the 11

12 with lower representation are placed in nomination. Board of Directors composition complies with the pro tempore applicable legislation on gender equality. If this procedure does not produce this result, substitution shall take place on the basis of a resolution adopted by a relative majority of the Shareholders Meeting, after candidates possessing the prescribed requirements of the gender with lower representation are placed in nomination. 2. PROPOSAL FOR THE AMENDMENT OF ARTICLE 29 (BOARD OF STATUTORY AUDITORS) The purpose of the proposed amendment to Article 29 of the company Bylaws set out below, compared with the current text, is to provide a more accurate description of the issues and sectors relevant for the purposes of paragraph 2, letters b) and c), and paragraph 3 of Article 1 of Ministerial Decree no. 162 or March 30, Proposal for the amendment of Article 29 of the company Bylaws: CURRENT TEXT Article 29 UNCHANGED As required by Article 1.2.b) and c) and paragraph 3 of Ministerial Decree no. 162 of 30 March 2000, fields and sectors of activity closely connected with those of the businesses operated by the Company shall be understood to mean the fields (legal, economic, financial and technical-scientific) and the sectors of activity connected with or relating to the activity carried out by the Company as set forth in the corporate purpose. Article 29 UNCHANGED As required by Article 1.2.b) and c) and paragraph 3 of Ministerial Decree no. 162 of 30 March 2000, fields and sectors of activity considered strictly pertinent within the sphere of activities of the Company, closely connected with those of the businesses operated by the Company shall be understood to mean the fields (legal, economic, financial and technical-scientific) and the sectors of activity connected with or relating to the activity carried out by the Company as set forth in the corporate purpose the fields (legal, economic, financial and technical-scientific) and the sectors 12

13 serving areas of engineering, geology, construction of public and private works, building, and construction in general are considered strictly relevant to the scope of activities of the Company. 3. ABSENCE OF THE RIGHT OF WITHDRAWAL It should be noted that the proposed amendments to the Bylaws do not fall into any of the withdrawal categories envisaged by applicable Company Bylaws, legal and regulatory provisions. *** DRAFT RESOLUTION FOR THE EXTRAORDINARY SHAREHOLDERS MEETING Dear Shareholders, with respect to the aforementioned, the Board of Directors submits the following draft resolutions for your approval, which will include separate votes for each of the proposed amendments to the Bylaws: The Shareholders Meeting of Salini Impregilo S.p.A., convened in extraordinary session: (i) having acknowledged the Board of Directors' Report and the proposals therein contained; and (ii) having agreed on opportunity to amend Articles 7, 10, 16, 18, 20, 24 and 29 of the company Bylaws in accordance with those proposed; RESOLVES 1. to amend: (i) Article 7 (Share Capital Bonds) of the company Bylaws, as per the Proposed Text in the Board of Directors' report; (ii) Article 10 (Right of withdrawal) of the company Bylaws, as per the Proposed Text in the Board of Directors' report; (iii) Article 16 (Convocation of Shareholders' Meeting) of the company Bylaws, as per the Proposed Text in the Board of Directors' report; 13

14 (iv) Article 18 (Powers of the Chairman) of the company Bylaws, as per the Proposed Text in the Board of Directors' report; (v) Article 20 (Management and Representation) of the company Bylaws, as per the Proposed Text in the Board of Directors' report; (vi) Article 24 (Management and Representation) of the company Bylaws, as per the Proposed Text in the Board of Directors' report; (vii) Article 29 (Board of Statutory Auditors) of the company Bylaws, as per the Proposed Text in the Board of Directors' report. 2. to grant the Board of Directors and, on its behalf, to its Chairman and to the interim acting Chief Executive, severally and also through especially appointed proxies, the widest powers (with no exclusions) necessary or suitable to implement the resolutions above, as well as make any changes, additions or non-substantive eliminations to the resolutions that may be necessary on request of all competent authorities or on registration in the Company Register, as representatives of the Company. *** Milan, March 31, 2015 on behalf of the Board of Directors of Salini Impregilo S.p.A. The Chairman Claudio Costamagna 14