EXHIBIT 85
JPMorgan
JPMorgan Chase Bank, N.A.
000 Xxxxxx Xxxx
Xxxxxx XX0X 0XX
England
29 December 2005
PIRELLI FINANCE LUXEMBOURG (SA)
00, Xxxxxxxxx Xx Xxxxxx Xxxxx
X-0000
Xxxxxxxxxx
Attention: Xx Xxxxxxx Xxxxxxx
Fax: 0000 0000000000
Reference: 11617259
THIS CONFIRMATION SUPERSEDES AND AMENDS ALL OR ANY PREVIOUS
CONFIRMATIONS RELATING TO THIS TRANSACTION
RE: SHARE OPTION TRANSACTION
------------------------
The purpose of this letter agreement (this "Confirmation") is to
confirm the terms and conditions of the Transaction entered into between
JPMORGAN CHASE BANK, N.A. ("JPMorgan") and PIRELLI FINANCE LUXEMBOURG (SA) (the
"Counterparty") on the Trade Date specified below (the "Transaction"). This
Confirmation constitutes a "Confirmation" as referred to in the ISDA Master
Agreement specified below, and supersedes all or any prior written or oral
agreements in relation to the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity
Derivatives Definitions as published by the International Swaps and Derivatives
Association, Inc. (the "Equity Definitions") are incorporated into this
Confirmation. In the event of any inconsistency between the Equity Definitions
and this Confirmation, this Confirmation shall govern.
1. This Confirmation evidences a complete and binding agreement between you and
us as to the terms of the Transaction to which this Confirmation relates. This
Confirmation will supplement, form a part of, and be subject to an agreement in
the form of the ISDA 2002 Master Agreement (the `ISDA Form'). All provisions
contained or incorporated by reference in the ISDA Form will govern this
Confirmation except as expressly modified below. This Confirmation, together
with all other documents referring to the ISDA Form (each a Confirmation)
confirming transactions (each a Transaction) entered into between us
(notwithstanding anything to the contrary in a Confirmation), shall supplement,
form a part of, and be subject to an agreement in the form of the ISDA Form as
if we had executed an agreement in such form (but without any Schedule) on the
Trade Date of the first such Transaction between us. In the event of any
inconsistency between the provisions of that agreement and this Confirmation,
this Confirmation will prevail for the purposes of this Transaction
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Deal Ref: 260WC01614866 JPMORGAN CHASE BANK, NATIONAL ASSOCIATION PAGE 1 OF 6
Trade Ref: 11617259 ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING RH/D.G
ASSOCIATION. MAIN OFFICE
0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A BRANCH IN ENGLAND & WALES BRANCH NO. BR000746. REGISTERED BRANCH OFFICE
000 XXXXXX XXXX, XXXXXX XX0X 0XX.
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
General Terms
-------------
Trade Date: 14 November 2005
Option Style: European
Option Type: Call
Seller: JPMorgan
Buyer: Counterparty
Shares: TELECOM ITALIA SPA
Reuters Instrument Code: TLIT.MI
Number of Options: 37,500,000.00
Strike Price: EUR 2.3730000
Premium: EUR 6,051,000.00
Final Reference Price: The average of the Prezzo Ufficiale of the Shares, on
the two Scheduled Trading Days before the Expiration
Date and the Expiration Date. (For the avoidance of
doubt this will be an average of three prices.)
Prezzo Ufficiale: Shall mean, the price as published by the Exchange at
the close of trading having the meaning ascribed thereto
in the Rules of the Markets organised and managed by the
Italian Stock Exchange
Premium Payment Date: 17 November 2005
Exchange: The Italian Stock Exchange
Related Exchange(s): IDEM, the Italian Derivatives Exchange
Procedure for Exercise:
-----------------------
Expiration Time: The Valuation Time.
Expiration Date: 17 March 2006
Automatic Exercise: Applicable
Seller's Agent's Telephone Number and Attention: Equity Derivatives Group
Facsimile Number and Contact Details for Fax No.: (000) 0000-0000
Purpose of Giving Notice: Telephone No.: (000) 0000-0000
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Deal Ref: 260WC01614866 JPMORGAN CHASE BANK, NATIONAL ASSOCIATION PAGE 2 OF 6
Trade Ref: 11617259 ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING RH/D.G
ASSOCIATION. MAIN OFFICE
0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A BRANCH IN ENGLAND & WALES BRANCH NO. BR000746. REGISTERED BRANCH OFFICE
000 XXXXXX XXXX, XXXXXX XX0X 0XX.
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
Valuation:
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Valuation Time: At the Scheduled Closing Time.
Valuation Date: The Exercise Date
Averaging Date: The two Scheduled Trading Days before the Expiration
Date and the Expiration Date.
Averaging Date Disruption: Postponement
Settlement Terms:
-----------------
Settlement Method Election: Applicable
Electing Party: Counterparty
Settlement Method Election Date: Five Scheduled Trading Days prior to the relevant Exercise
Date
Default Settlement Method: Cash Settlement
Settlement Currency: EUR
Settlement Price: (i) ) In respect of Cash Settlement means the Final Reference
Price or, if there is no Final Reference Price, the mid-market
price per Share on the Exchange at the Valuation Time on the
Valuation Date;
(ii) In respect of Physical Settlement means the Strike Price.
Cash Settlement Payment Date: In respect of Cash Settlement and the Exercise Date, two
Currency Business Days after the relevant Valuation Date.
Settlement Date: In respect of Physical Settlement, means the date that falls
one Settlement Cycle following the Exercise Date (or, if such
date is not a Clearance System Business Day, the next
following a Clearance System Business Day)
Adjustments:
------------
Method of Adjustment: Calculation Agent Adjustment
Extraordinary Events:
---------------------
Consequences of Merger Events:
(a) Share-for-Share: Alternative Obligation
(b) Share-for-Other: Modified Calculation Agent Adjustment
(c) Share-for-Combined: Component Adjustment Tender Offer: Applicable
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Deal Ref: 260WC01614866 JPMORGAN CHASE BANK, NATIONAL ASSOCIATION PAGE 3 OF 6
Trade Ref: 11617259 ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING RH/D.G
ASSOCIATION. MAIN OFFICE
0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A BRANCH IN ENGLAND & WALES BRANCH NO. BR000746. REGISTERED BRANCH OFFICE
000 XXXXXX XXXX, XXXXXX XX0X 0XX.
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
Consequences of Tender Offers:
(a) Share-for-Share: Modified Calculation Agent Adjustment
(b) Share-for-Other: Modified Calculation Agent Adjustment
(c) Share-for-Combined: Modified Calculation Agent Adjustment
Composition of Combined Consideration: Not Applicable
Nationalisation, Insolvency or Delisting: Cancellation and Payment (Calculation Agent Determination)
Additional Disruption Events:
-----------------------------
(a) Change in Law: Not Applicable
(b) Failure to Deliver: Applicable
(c) Insolvency Filing: Not Applicable
(d) Hedging Disruption: Not Applicable
(e) Loss of Stock Borrow: Not Applicable
(f) Increased Cost of Stock Borrow: Not Applicable
(g) Increased Cost of Hedging: Not Applicable
Determining Party: JPMorgan
3. Calculation Agent:
------------------
JPMorgan
4. Account Details:
----------------
Account for payments to JPMorgan:
Pay:
AC No:
Favour:
Ref:
Account for payments to Counterparty:
Pay:
AC No:
Favour:
Ref:
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Deal Ref: 260WC01614866 JPMORGAN CHASE BANK, NATIONAL ASSOCIATION PAGE 4 OF 6
Trade Ref: 11617259 ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING RH/D.G
ASSOCIATION. MAIN OFFICE
0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A BRANCH IN ENGLAND & WALES BRANCH NO. BR000746. REGISTERED BRANCH OFFICE
000 XXXXXX XXXX, XXXXXX XX0X 0XX.
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
5. Offices:
--------
(A) The Office of JPMorgan for the Transaction is:
JPMorgan Chase Bank, N.A.
000 Xxxxxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxxx
(B) The Office of the Counterparty for the Transaction is:
Pirelli Finance Luxembourg (SA)
00, Xxxxxxxxx Xx Xxxxxx Xxxxx
X-0000
Xxxxxxxxxx
6. Other Provisions:
-----------------
(a) Transfer: Neither party may transfer any or all of its rights or obligations
under this Transaction without the prior written consent of the non-transferring
party. Any purported transfer that is not in compliance with this provision
shall be void.
(b) Non-Reliance: Applicable
(c) Governing Law: This Confirmation will be governed by and construed in
accordance with English Law.
(d) Time of Dealing: The time of dealing will be confirmed by JPMorgan upon
written request.
(e) Private Customer: Each party represents that it is not a private customer as
defined in the Rules of The Financial Services Authority.
(f) Agreements and Acknowledgements Regarding Hedging Activities: Applicable
(g) Additional Acknowledgements: Applicable
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Deal Ref: 260WC01614866 JPMORGAN CHASE BANK, NATIONAL ASSOCIATION PAGE 5 OF 6
Trade Ref: 11617259 ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING RH/D.G
ASSOCIATION. MAIN OFFICE
0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A BRANCH IN ENGLAND & WALES BRANCH NO. BR000746. REGISTERED BRANCH OFFICE
000 XXXXXX XXXX, XXXXXX XX0X 0XX.
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to EDG Confirmation
Group, X.X. Xxxxxx Securities Ltd., MAILPOINT 0/00XX, 00 Xxxxxxxxxxxx, Xxxxxx
XX0X 0XX or by fax on x00 (0)00 0000 0000. If you have any questions regarding
this Confirmation please contact us on x00 (0)00 0000 0000.
Very truly yours,
X.X. XXXXXX SECURITIES LTD. AS AGENT FOR
JPMORGAN CHASE BANK, N.A.
By:
----------------------------------
Name: Xxxxxx X Xxxxxx
Title: Authorised Signatory
Accepted and confirmed as of
the date first above written
PIRELLI FINANCE LUXEMBOURG (SA)
By:
----------------------------------
Name:
Title:
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Deal Ref: 260WC01614866 JPMORGAN CHASE BANK, NATIONAL ASSOCIATION PAGE 6 OF 6
Trade Ref: 11617259 ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING RH/D.G
ASSOCIATION. MAIN OFFICE
0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A BRANCH IN ENGLAND & WALES BRANCH NO. BR000746. REGISTERED BRANCH OFFICE
000 XXXXXX XXXX, XXXXXX XX0X 0XX.
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
