Communication of remuneration plans for Directors or Executive Officers
granted by listed companies (CNMV Circular 4/2000 )
DESCRIPTION OF THE PLAN
1. Description of the Plan: The Long-term Incentive Plan (hereinafter, the " Plan ") under this communication
was approved by the General Shareholders’ Meeting of Telefónica, S.A. at its meeting held on June 21,
2006. The Plan consists of awarding to beneficiaries selected for this purpose, subject to satisfying the
requirements set out in the Plan, a given number of shares in Telefónica, S.A. (hereinafter, the "Shares" )
as variable remuneration.
2. Beneficiaries of the Plan : The Plan is intended for those persons with the status of Executive Director,
Senior Executive or Management Personnel of Telefónica and of other Telefónica subsidiaries (as defined
below) and are selected for inclusion (hereinafter, the " Beneficiaries ").
The approximate number of Beneficiaries in the Plan in its first Cycle is 1,900, including five Executive
Directors and four Executive Officers (as defined in Royal Decree 377/1991 of 15 March on the
disclosure of significant shareholdings in listed companies and of the acquisition by these companies of their
Participation by a Beneficiary in one of the Cycles of the Plan does not imply the participation or any right
of that Beneficiary to participate in the other Cycles of the Plan.
3. Corporate scope of the Plan: The Plan has been conceived to cover all Executive Directors, Senior
Executives and the rest of the Management Personnel specifically selected for inclusion who are rendering
their services to Telefónica, understood to mean the corporate group composed of Telefónica, S.A. and
those of its subsidiaries Spain and abroad which form part of its group within the meaning of Article 4 of
the Spanish Stock Market Act 24/1988 of 28 July (Ley del Mercado de Valores) as at 1 July 2006
(hereinafter, all these companies will be collectively referred to as " Telefónica " or the " Te