The reduction of the share capital of up to Euro 116,648,505 through the cancellation of 116,648,505 own shares to be acquired by the company.

The acquisition of own shares by PT for implementation of the capital reduction resolution is additional to and independent from those mentioned in the general resolution on the acquisition and disposal of own shares referred to in 2., the terms and conditions of said general resolution being applicable to the acquisitions now resolved, with the following main specificities:

Maximum number of shares to be acquired and cancelled: 116,648,505;

Acquisition term: until 23 December 2005;

Form of acquisition: exclusively in the stock exchange, without prejudice to eventual acquisition to counterparties in derivative instruments, equity swaps or other similar instruments, with limitation to the number of shares acquired by such counterparties in the stock exchange;

Parameters: it is foreseen that the Board of Directors meets the following procedures and minimum parameters:

a) Placing of at a least one purchase order per week;

b) Total number of orders in each week of no less than 10% of the average daily volume of transactions in the five immediately preceding stock exchange sessions;

c) Total number of orders that enable the completion of an acquisition not inferior to 116,648,505 own ordinary shares.

General resolution authorizing the acquisition and disposal of own shares, containing the following main terms:

a) Maximum number: up to ten percent of the share capital, with deduction of any disposals made, without prejudice to the performance of certain specific obligations;

b) Time during which the acquisition may be made: eighteen months from the date of the resolution;

c) Minimum and maximum consideration of acquisitions: interval of fifteen percent less or more with reference to the lower and the average trading price, respectively, in the five exchange sessions immediately preceding, with the exception of the performance of specific obligations;

d) Time of acquisition: to be determined by the administrative body of the acquiring company.

The Board of Directors, regarding the eventual authorized acquisitions that it may resolve, shall take into account the recommendations of the Securities Market Commission (“Comissão do Mercado de Valores Mobiliários”) and the Regulation n° (EC) 2273/2003 of the Commission, in particular the following aspects:

a) Suitable record maintenance and opportune disclosure to the public of the operations carried out;

b) Execution of the operations in conditions of time, form and volume that do not disturb the regular functioning of the market, namely trying to avoid its execution in sensitive moments of the negotiation, in particular, at the opening and closing of the session, in moments of disturbance in the market, in moments close to the disclosure of material events or of announcement of results;

c) Carrying out of the acquisitions at a price not higher than the highest of the last independent operation and of the independent offer of the greatest amount in the official listing market of Euronext Lisbon;

d) Limitation of the acquisitions to 25% of the daily average negotiation volume, or to 50% of such volume through communication to the competent authority and disclosure to the market.