This excerpt taken from the LUX 6-K filed Apr 15, 2008.
2. ALLOCATION OF NET INCOME AND THE DISTRIBUTION OF DIVIDENDS
The holders of Ordinary Shares shall be requested to approve the proposed allocation of net income, including the proposed dividend distribution payable out of net income (after setting aside the amount for the legal reserve). Italian law provides that the payment of annual dividends is subject to approval of the holders of Ordinary Shares at the ordinary meeting. Under Italian law, before dividends may be paid with respect to the results of any year, an amount equal to 5% of net income of the Company on an unconsolidated basis for such year must be set aside to the Company's legal reserve until the total legal reserve equals at least one-fifth of the nominal value of the Company's issued share capital. The legal reserve requirement is thereafter fulfilled each year when it equals at least one-fifth of the nominal value of the Company's issued share capital for each such year. Amounts so set aside are not available to fund dividends.
The Company is permitted to distribute dividends out of net income earned by its subsidiaries to holders of Ordinary Shares only to the extent such net income has been distributed to the Company from its subsidiaries. The Board will propose that the holders of Ordinary Shares approve the distribution of dividends in the gross amount of Euro 0.49 per Ordinary Share (each ADS represents one Ordinary Share). Last year, the Company distributed a dividend equal to Euro 0.42 per Ordinary Share. If approved, the aggregate amount payable by the Company in connection with this year's dividend will be approximately Euro 226.8 million. Please note that this amount could be subject to increase due to the issuance of additional Ordinary Shares as a consequence of the exercise of stock options by employees. In this case, assuming that all stock option beneficiaries exercised all their vested options by the date of the shareholders' meeting, the aggregate amount payable by the Company in connection with the dividend would increase from approximately Euro 226.8 million to Euro 230.1 million. The funds available for the payment of the dividends would be paid out of the Company's net income equal to approximately Euro 738.4 million (after setting aside the amount for the legal reserve of approximately Euro 16,800, or approximately Euro 98,800 in the case of exercise of all vested stock options).
With a view to enabling all non-Italian residents of the ADS holders to provide the documentation required to achieve the application of reduced Italian substitute tax on dividends, pursuant to the applicable tax treaties between Italy and other countries, the Board will propose to set May 22, 2008 as the date for payment of dividends to all holders of Ordinary Shares of record on May 16, 2008, including Deutsche Bank Trust Company Americas as depositary on behalf of the ADS holders.
Deutsche Bank Trust Company Americas, acting as depositary with respect to the ADSs, has advised the Company that the dividend amount for each ADS holder will be paid commencing on May 29, 2008 to all such holders of record on May 21, 2008. Deutsche Bank Trust Company Americas has advised the Company that after the close of business on May 16, 2008 through and including May 21, 2008 it will close its books and will not accept deposits or cancellations of Ordinary Shares or ADSs, as applicable. Deutsche Bank Trust Company Americas shall pay such dividends in U.S. dollars by converting the Euro amount of the dividend, net of the applicable tax, at the market Euro/U.S. dollar exchange rate in effect on May 22, 2008. Attached to this Proxy Statement as Annex A you will find a letter from the Company providing information as to the procedure to be used by ADS holders who are U.S.
residents, Italian residents or residents of countries having anti-double taxation treaties with the Republic of Italy for the purposes of obtaining reduced/NIL tax on dividends provided for by the Italian domestic legislation or the applicable tax treaties.