Rns...15 Jun 2010 14:04
RNS Number : 6483N
Telefonica SA
15 June 2010

In accordance with the provisions of article 82 of the Spanish Securities Market Act (Ley del Mercado de Valores), TELEFÓNICA, S.A. hereby reports the following
SIGNIFICANT EVENT
On the occasion of the Extraordinary General Meeting called by PORTUGAL TELECOM, SGPS, S.A. (PT) for 30 June 2010, TELEFÓNICA, S.A (TEF), as owner of 76,327,500 of the Portuguese company's shares, equivalent to approximately 8.51% of its share capital and in compliance with Portuguese law, has requested that an additional item be included on the agenda of said meeting, as specified in the attached proposal. The objective of this proposal is to submit a resolution to PT's shareholders in the event that the Extraordinary General Meeting decides to accept the offer presented by TEF to acquire PT's stake in Brasicel, N.V. and, indirectly, in Vivo Participações, S.A, to strengthen the company's current shareholder remuneration policy through the distribution of a supplemental and extraordinary dividend in the amount of Euro 1 per share, or superior in case the PT´s Board of Directors so proposes, concerning the financial year of 2010. Madrid, 15 June 2010. PROPOSAL Proposal of resolution of the shareholder Telefónica, S.A. for the item which inclusion in the agenda of the Shareholders Meeting of Portugal Telecom SGPS, S.A. of June 30, 2010 is requested New item Two of the Agenda Considering that: 1. Portugal Telecom SGPS, S.A. has been adopting a consistent policy on the allocation of dividends under which the business opportunities of the Group and the self financing needs are considered; 2. According to the general policy on the distribution of dividends assumed by the Board of Directors, a proposal would be submitted to the shareholders' meeting aiming at the distribution of a level of dividends per share of 0,575 Euros regarding the financial years of 2009, 2010 and 2011, such proposal being dependent of the market conditions and subject to the financial situation of Portugal Telecom SGPS, S.A.