Exhibit 31
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CONVERTIBLEBOND ASSET-SWAP
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Final Terms and Conditions as of 14thNovember 2001
Terms:
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Equity Swap:
Counterparty: Pirelli Spa (or any affiliate of Pirelli
S.p.A. subject to CAL FP's approval not to
be unreasonably refused or any other company
designated by Pirelli S.p.A. being agreed
that in such latter case CAL FP Bank will
have to agree on the company.)
Bank: CAL FP Bank (guaranteed by CNCA).
Calculation Agent: CAL FP Bank.
Underlying Bonds: 1st January 2010 Olivetti convertible bonds,
convertible into Olivetti Spa ordinary
shares.
Rights: the rights to subscribe into the Underlying
Bonds, and for the avoidance of doubt, 2
rights give the option to subscribe into 1
Underlying Bond
Currency: EUR
Trade Date: 14th November 2001.
Effective Date: 23rd November 2001.
CAL FP Bank
Credit Argicole Lazard Financial Products Bank 14.11.2001
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Maturity Date: The date which is the earliest of 23rd
November 2006, Early Termination Date and
Mandatory Early Termination Date.
Exchange Business Day: any day when the exchange is open in Milan.
Business Day: any Exchange Business Day which is also a
Business Day for London & Target.
Early Termination: At the Counterparty's option. At any time
from the 60th day after the convertible bond
is issued up to 30 Business Days before the
Maturity Date, the Counterparty has the
right to terminate the swap by sending a
written notice to CAL FP with at least 10
Business Days notice. In case of Early
Termination, Physical or Cash Settlement
will apply at the Counterparty's option
Notice Date: The Business Day on which the Early
Termination notice is received by the Bank
Early Termination Date: Notice Date plus 10 Business Days
Mandatory Early
Termination: In the event that the Underlying Bond is
called and redeemed by the Issuer, the swap
will terminate and Physical or Cash
Settlement will apply at the Counterparty's
option
Mandatory Early
Termination Date: The settlement date of the Early Termination
Date of the Bonds (to reflect the terms of
the underlying Bonds)
The terms are subject to approval of the CAL FP Bank Risk Commission
2
CAL FP Bank
Credit Argicole Lazard Financial Products Bank 14.11.2001
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Number of Bonds: 200,000,000 Underlying Bonds.
Number of Rights: 400,000,000 rights, of which 2 rights give
the option to subscribe into 1 Underlying
Bond.
Initial Bond Price: Weighted average price of the
Bonds during the Initial Averaging Period.
In case the Bonds are subscribed through
exercise of Rights, for each Bond, the Bond
price will be defined as 1 Euro plus the
price of 2 rights.
Notional Amount: The number of Bonds multiplied by 1 Euro
((euro)1 being the Issue Price of Bonds).
Initial Averaging Period: A period, starting on
Trade Date, with a maximum length of 5
Exchange Business Days determined according
to prevailing market conditions and
liquidity.
Initial Premium: (Initial Bond Price - 1 Euro) * Number of
Bonds.
Final Averaging Period: A period with a maximum length of 10
Exchange Business Days starting 10 Business
Days prior to Maturity Date or to Early
Termination Date or to Mandatory Early
Termination Date determined according to
prevailing market conditions and liquidity.
Final Bond Price: Weighted average price of the Underlying
Bonds, or shares in the event that the Bonds
have been converted, during the Final
Averaging Period.
Final Premium: (Final Bond Price - 1 Euro) * Number of
Bonds
Settlement Method: Cash or Physical Settlement at the
Counterparty's option
The terms are subject to approval of the CAL FP Bank Risk Commission
3
CAL FP Bank
Credit Argicole Lazard Financial Products Bank 14.11.2001
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Interest Rate: 12 month Euribor +150 bps pa (ACT/360),
payable yearly calculated on the Notional
Amount.
Arranger Fee: 1.125% on the Notional Amount, payable 2
business days after the Initial Averaging
Period.
Payments
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On Effective Date
If Initial Premium is greater than 0, the Initial Premium will be paid by the
Counterparty to the Bank 2 Business days after the Effective Date.
If the Initial Premium is lower than 0, then the absolute amount of the Initial
Premium will be paid by the Bank to the Counterparty 2 Business days after the
Effective Date
From Effective Date up to and including Maturity Date:
The Bank will pay to the Counterparty:
Annual Coupons on the Underlying Bonds, as
received by the Bank, net of any applicable
withholding taxes.
The Counterparty will pay to the Bank:
Interest Rate payable annually calculated on
the Notional Amount
At Maturity Date:
1. In case of Physical Settlement:
The Bank will deliver to Counterparty, upon Counterparty's request the Bonds or
an equivalent number of Olivetti shares (upon previous conversion by CAL FP).
The Counterparty will pay to the Bank a Euro amount equal to 1 Euro * Number of
Bonds
The terms are subject to approval of the CAL FP Bank Risk Commission
4
CAL FP Bank
Credit Argicole Lazard Financial Products Bank 14.11.2001
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2. In case of Cash Settlement:
Only the Spread Cash Settlement shall apply
3. In case of Spread Cash Settlement
If Final Premium is greater than 0, the Bank will pay Final Premium to the
Counterparty
If Final Premium is lower than 0, the Countreparty will pay the absolute Final
Premium amount to the Bank
Reset mechanism
Reset Trigger Dates: 1) At any time starting from the 60th day
after the convertible bond issue whenever
the closing price of the Underlying Bonds is
lower than 25% of the Initial Bond Price for
10 consecutive Business Days after the
Effective Date, the Counterparty will make a
Reset Payment. The computation of the value
of the portfolio will be based on the
Initial Bond Price of the Bond and the
closing Bond price every day.
Reset Payment: 1) on a Reset Trigger Date the Counterparty
makes a payment to CAL FP equal to the 25%
of the Initial Bond Price * Number of Bonds.
Master Agreement: The Equity Swap will form part of a Master
Agreement between the Bank and the
Counterparty which will be based on the ISDA
Master Agreement dated as of 3 August 2001
between the Bank and Pirelli & C.
Accomandita per Azioni but incorporating the
additional provisions set out under points
(v) and (vii) and, subject to discussion to
be conducted in good faith between the
The terms are subject to approval of the CAL FP Bank Risk Commission
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CAL FP Bank
Credit Argicole Lazard Financial Products Bank 14.11.2001
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parties, under points (i), (iv) and (vi) in
the side letter from the Bank to the
Counterparty dated 25 September 2001.
The terms are subject to approval of the CAL FP Bank Risk Commission
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