Amplifon — Remuneration Information 2016

Mar 7, 2016

Amplifon S.p.A.

Remuneration Statement 2016

Prepared in accordance with article 123-ter of Legislative Decree n° 58 of February 24th, 1998 and in compliance with Annex 3A, schemes 7-bis and 7-ter of the CONSOB Regulation no. 11971 of May 14th, 1999 and following amendments

Contents

INTRODUCTION3
OVERVIEW4
SECTION 1 2016 REMUNERATION POLICY5
1. Governance Model 5
1.1 Parties involved 5
1.2 Definition and approval of the Global Reward Policy 2016 8
2. Overall principles and objectives9
3. Remuneration Policy 2016 Guidelines 10
3.1 Directors' Compensation 10
3.2 Remuneration of the Chief Executive Officer/General Manager 12
3.3 Remuneration of Key Managers with Strategic Responsibilities 14
4. Main changes with respect to previous year 18
SECTION 2 IMPLEMENTATION OF THE 2015 REMUNERATION POLICIES 19
Table 1 – Remuneration paid to the Directors, Statutory Auditors, the Chief Executive Officer/General Manager and the other Key Managers of the Group 20
Table 2 – Stock Options assigned to the Directors, Statutory Auditors, the Chief Executive Officer/General Manager and the other Key Managers of the Group 23
Table 3A –Incentive plans based on financial instruments, other than stock options, benefiting the Directors, the Statutory Auditors, the Chief Executive Officer/General Manager and the other Key Managers of the Group 25
Table 3B – Cash based incentive plans benefiting the Directors, the Statutory Auditors, the Chief Executive Officer/General Manager and the other Key Managers of the Group 28
Scheme 7-ter – Shareholdings of the Directors, the Statutory Auditors, the Chief Executive Officer/General Manager and the other Key Managers of the Group 30

INTRODUCTION

The purpose of this Statement is to provide the market with the information needed to fully understand the objectives underlying the remuneration policy, the principles and the tools used, as well as how the latter reflects the Company's short and medium/long term goals.

The Statement is largely focused on the Executives and non-Executives Directors, the Key Managers with strategic responsibilities (hereinafter referred to as Key Managers) and the Internal Audit function responsible, but the principles discussed herein are then consistently applied to all Company personnel in relation with the role held and the level of responsibility.

We recall that, during 2015, the Company has gone through an important leadership transition process including the termination of the employment relationship with the Chief Executive Officer/General Manager, Franco Moscetti, and the resulting appointment as non-Executive Vice President of the Company. At the same date Enrico Vita was appointed Member of the Board and Chief Executive Officer of Amplifon S.p.A.. Moreover during the year also the leadership organization of the Group has been subject to different changes that substantially modified the composition of the Key Managers cluster.

Section 1 of the Statement is focused on the Governance model, on the goals of the Remuneration Policy and, with reference to the Directors, the Chief Executive Officer/General Manager, the Key Managers and the responsible of Internal Audit function, the information related to their compensation and the procedures used to adopt and implement the policy.

Section 2 show the remuneration paid in 2015 to the Directors, the Chief Executive Officer/General Manager and the Key Managers detailing each of the remuneration item and its consistency with the remuneration policy.

OVERVIEW

The primary objective of the Amplifon Group's Global Reward Policy is to align the performance targets of the Company's resources with those of the Group, as well as to attract, motivate and retain talented managers and the key resources within the organization.

The key principles that inspire Amplifon Reward Policy are updated every year based on internal and external trend and are then tailored, in different ways, to all Company population.

Strategy first		Fairness is not an attitude, it's a fact
If you do the extra mile, so will we	Only the best	Keep it simple!

The Company identifies and utilizes different reward leverages in order to balance short and medium/long term objectives and motivate resources in a selective way, incentivizing conduct which maximizes value for the Company and for the Shareholders.

COMPONENT	FOCUS	TARGETS	CONDITIONS
Fixed Remuneration	Individual	Reward expertise, role contribution and sustained performance	Reviewed annually based on market benchmark and individual performance
Short term variable incentive (MBO)	Country/ Region/ Group	Performance stretch on yearly business targets (at least in line with budget)	Achievement of economic and financial targets (EBITDA, Net Sales, Free Cash Flow) of area of responsibility
Medium-long term variable incentive (LTI)	Group	Alignment to shareholders' interest and mid-long term sustainable value creation	Achievement of 3Yr economic targets of the Group (matrix EBIT/Net Sales) with thresholds link to NFP and share value in the exercise period
Benefits	Individual	Integration of remuneration package and aligment to home country practices	Defined by collective agreement and local regulation

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SECTION 1 2016 REMUNERATION POLICY

1. Governance Model

The primary goal of the governance model is to guarantee transparency and alignment of the remuneration practices within the Group in line with the principles of Amplifon Global Reward Policy and ensure that they comply with the articles of association of the Company and with the existing regulations.

1.1 Parties involved

Shareholders' Meeting

The Shareholders' Meeting of Amplifon S.p.A each year:

• approves the Board's overall remuneration to be assigned during each fiscal year;
• expresses an advisory vote on Section 1 of the Remuneration Statement;
• approves the share incentive plans proposed by the Board of Directors granting the same Board the power to implement them.

Board of Directors

Each year the Board of Directors (hereinafter referred to as the BoD) approves the Group's Global Reward Policy.

The Board, with the support of the Remuneration & Appointment Committee, as well as of the specific Corporate functions:

• determines, after examining the proposals of the Remuneration & Appointment Committee and consulting the Board of Statutory Auditors, the remuneration of the Executive Directors, as well as those holding special offices, and allocates the Board's overall remuneration to its individual members;
• approves the proposals regarding the Chief Executive Officer/General Manager's remuneration;
• approves, based on the guidelines defined by the Shareholders' Meeting and on the proposals of the Remuneration & Appointment Committee, the share incentive plans including the beneficiaries, the number of shares/options to be assigned and the operating rules to be applied for all employees;

Chief Executive Officer/General Manager

The Chief Executive Officer/General Manager (CEO/GM) with the support of the Group's Human Resources Department:

• defines the Group's Global Reward Policy, submitting it to the advisor of the Remuneration & Appointment Committee and the BoD approval;
• defines the remuneration packages for the Key Managers in accordance with the Global Reward Policy approved by the BoD;

Remuneration & Appointment Committee

The Remuneration & Appointment Committee (hereinafter referred to as the Remuneration Committee or Committee) plays a key role in Amplifon governance system. Following the indication of the Code of Conduct, the Committee, besides the Chairman of the Board of Directors, consists of two non-executive and primarily independent Directors with adequate knowledge and experience in multinational companies.

COMPOSITION OF THE REMUNERATION & APPOINTMENT COMMITTEE

The Committee met 6 times in 2016, with an average durationof 1 hour and a % of participation of 83,5%

Maurizio Costa

Susan Carol Holland

Andrea Guerra

The Chairman of the Board of Statutory Auditors and the Secretary of the Board of Directors are invited to attend the Remuneration Committee meetings. The Chief HR Officer is also invited when his role and competences are required and he also carry out the role of technical secretary. The Chief Executive Officer/General Manager attends the meetings when invited by the Committee Chairman in order to discuss specific topics.

Consistently with the indication of the Code of Conduct, the Remuneration Committee:

• submits the Global Reward Policy to the BoD for approval;
• presents to the Board of Directors proposals regarding the remuneration of the CEO/GM based on analysis of market trends and levels of remuneration;
• assesses the proposals submitted by the CEO/GM regarding the remuneration for the Key Managers;
• examines the CEO/GM's proposals regarding the share incentive plans, which include the beneficiaries, the number of shares/rights and the applicable operating rules, for all the

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employees holding key positions within the organization and submits it to the BoD for approval;

• monitors compliance with the decisions made by the BoD relating to the Group's Global Reward Policy;
• recommends special management bonuses linked to extraordinary events;
• monitors any changes in the organizational structure which could impact the Key Managers.

	- Remuneration Statement approval
	- Recommendation on BoD remuneration
February 24th	- 2014 MBO results approval
	- CEO and Executives Remuneration Review
	- 2015-2017 LTI targets definition
	- Share Incentive Plan (New Performance Stock Grant Plan)
April 29th	cycle of assignment 2015-2017
July 6th	- Update on CEO
	- Agreement proposal for the termination of the employment
	relationships with the CEO
July 23rd	- Assessment of the candidacy for the CEO position
	- Remuneration proposal for the new CEO
	- Remuneration approval for the new CEO
October 22nd	- Share Incentive Plan (New Performance Stock Grant Plan) –
	2nd assignment 2015-2017
	- Global Reward Policy 2016
December 14th	- 2015 MBO targets definition

REMUNERATION COMMITTE ACTIVITIES IN 2015

To the meeting mentioned above the Chairman of the Board of Statutory Audit always attended as guest. No directors attended meetings of the Committee in which proposals regarding their remuneration were discussed. The Remuneration and Appointment committee has scheduled five meetings in 2016.

The Committee, in general, may avail itself, by way of the Group's Human Resources Department, of all the information and Corporate functions deemed necessary to carry out its responsibilities.

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Group Human Resources Department

The Group's Human Resources Department assists the CEO/GM and the Committee in defining the Group's Global Reward Policy by conducting studies of market trends and practices and providing the analyses needed to develop remuneration policies, as well as to align them with the highest possible standards.

More in detail, with the support of the relative Corporate functions:

• proposes changes to the Global Reward Policy and to the pay/incentive schemes tied to the policy and verifies the impact of the proposed changes on the remuneration system overall;
• identifies and proposes possible indicators to be used to estimate the fixed and variable components of remuneration packages which are in line with the best practices, subject to internal job grading and analysis of reference markets;
• addresses the legal aspects tied to the preparation and application of the incentive plans based on financial instruments;
• monitors the application of the Group's Global Reward Policy.

1.2 Definition and approval of the Global Reward Policy 2016

Each year the Remuneration Committee submits the Policy to the Board of Directors for approval on the basis of the proposal prepared by the CEO/GM with the support of the Group's Human Resources Department. During the meeting held on December 14th, 2015, the Remuneration Committee assessed positively the Group's Global Reward Policy for 2016, which was subsequently approved by the Board of Directors on December 17th, 2015. The Global Reward Policy provides the Group Human Resources Department with both the guidelines needed to ensure consistent Group-wide management and the flexibility needed to meet the specific needs of the different Countries.

2. Overall principles and objectives

Amplifon Remuneration Policy is defined consistently with the Group strategy, the governance model adopted by the Company as well as with the recommendation of the Code of Conduct in order to attract, motivate and retain talents and to align the interest of the management with the primary objective of the value creation for the shareholders in the medium-long term.

Therefore, the remuneration of the Director and the Key Managers of the Group is defined based on the following principles:

• the non-Executive Directors' emoluments is defined on the basis of the commitment needed to carry out their assignment in the Board itself and in the different Committees. Unless approved differently by the Shareholders' Meeting the non-Executive Directors' are not granted any share incentive plan nor other plans linked to the Company's results.
• The overall remuneration structure of the CEO/GM and of the Key Managers, consistently with the principles of the Remuneration Policy, show an appropriate balance between fix and variable components linked to the Company results and defined within maximum limits. The total remuneration is also consistent with the applicable market data for similar roles in terms of responsibility and complexity, assessed through specific remuneration benchmark (peer group).
• The short and medium-long term variable compensation is linked to different complementary targets clearly measurable in coherence with the Company's 3Yr Plan targets. The variable incentives are paid at the end of an accurate process of targets assessment in order to appreciate the real Company performance originated from the management action.
• As provided by the Code of Conduct (art.6.C.1), the variable incentive is subject to a specific claw back clause that foreseen the right of the Company to claim for reimbursement of the amounts paid on the basis of materially inaccurate performance metrics. Considering also the international best practices, a lock up clause for the shares eventually vested related to the LTI Plan of which the CEO/GM and the Key Managers are beneficiary, has been introduced too.
• The remuneration package of the CEO/GM and the Key Managers also includes different benefits which seek to guarantee equal treatment in the Company and general consistency in the remuneration systems, while also maintaining a competitive position in local markets and complying with the law in the different Countries.

3. Remuneration Policy 2016 Guidelines

3.1 Directors' Compensation

Within Amplifon Board of Directors are included the following roles:

• Chief Executive Officer
• Non-executive Directors with special offices
• Non-executive Directors

Following the resignation of Luca Garavoglia, the Board of Directors on January 29th has appointed, following the art.2386 of the Civil Code, Anna Puccio as Indipendent Director.

On October 20th, 2015 the Shareholders' Meeting has appointed Enrico Vita, General Manager of the Company, new Member of the Board. The Board of Director, on October 22nd , called upon the General Manager to act as the Group's Chief Executive Officer.

Therefore, on December 31st, 2015 the Board of Director consisted of:

• Chief Executive Officer: Enrico Vita
• Chairman of the Board: Susan Carol Holland
• Honorary Chairman of the Board: Anna Maria Formiggini
• Non-Executive Vice President: Franco Moscetti
• Non-Executive Directors: Giampio Bracchi, Maurizio Costa, Andrea Guerra, Anna Puccio and Giovanni Tamburi

The Directors' remuneration is represented by a set emolument, determined on the basis of the commitment needed to carry out their assignments in the Board itself and in the different Committees and consists of the following:

• Compensation for the office of Director
• Compensation for being part of Board Committees
• Compensation for Directors holding special offices

On April 21st 2015 the Shareholders' Meeting has confirmed, unchanged from the previous year, a total annual compensation for the Board of Directors of Euro 1.100.000,00, broken down as follows from the Board of Directors:

• Euro 55.000,00 for each of the Directors, with the exception of the Honorary Chairman, the Chairman and Chief Executive Officer;
• Euro 190.000,00 for the Honorary Chairman;
• Euro 200.000,00 for the Chairman;

• Euro 300.000,00 for the Chief Executive Officer;

• Euro 25.000,00 extra for each Independent Director called upon to be a Chairman of a Committee or the Supervisory Board ("Organismo di Vigilanza");

• Euro 15.000,00 extra for each Independent Director called upon to be a member of a Committee or the Supervisory Board ("Organismo di Vigilanza").

Following the leadership transition, the Board of Directors on October 22nd has reassessed the emoluments, within the overall board compensation as approved by the Shareholders' Meeting on April 21st.

Therefore the BoD has assigned, until the end of the mandate (Approval of the 2015 draft Annual Financial Report):

• To the Chairman of the Board an additional emolument of 15.000,00 Euro
• T0 the new Chief Executive Officer an emolument of 122.500,00 Euro
• To the non-Executive Vice President, for his Director's office, an emolument of 27.500,00 Euro.

The compensation received by each member of the Board of Directors in 2015 are shown in Section 2 – Table 1 of this Statement.

In accordance with best practices, the non-executive Directors are not granted any share incentive plan nor other plans linked to the Company's results.

The members of the Board of Directors only receive mandatory insurance coverage. The Chairman of the Board of Directors, Susan Carol Holland, is beneficiary of a personal accident insurance policy, with fixed capital, and medical coverage, in line with that offered to the Key Managers.

As of today, there are no agreements which provide for indemnities in the event of resignation or termination without cause or following a takeover bid, nor are there any agreements based on which non-cash benefits should be provided or maintained if a party ceases to hold office nor have any consulting agreements been stipulated with Directors for a period that runs beyond their term of office. Lastly, to date, no agreements have been stipulated with Directors based on which they would receive compensation for non-compete agreements.

3.2 Remuneration of the Chief Executive Officer/General Manager

The Remuneration Committee submits to the Board of Directors proposals on the remuneration of the Chief Executive Officer/General Manager based on analyses of market trends and on benchmarking with peer group remuneration structure.

Generally the CEO/GM's remuneration is comprised of the following:

• A gross yearly fixed remuneration (base salary and emolument for the office);
• A yearly variable remuneration linked to the achievement of predefined Company targets (MBO);
• A medium/long term variable share component (LTI);
• Benefits

Fixed Remuneration

The fixed remuneration of the CEO/GM is composed by a gross base salary and an emolument for the office of Chief Executive Officer. Each year the Remuneration Committee assesses the CEO/GM's fixed remuneration in light of reference market standards and potentially proposes any necessary changes based on the principles of the Group's Global Reward Policy, as well as in light of the level of Total Remuneration per year.

Short term variable incentive (MBO)

The CEO/GM's variable incentive is linked to the Group's economic and financial performances. With reference to these components, each year the Remuneration Committee submits a proposal to the Board of Directors in which it identifies the parameters and targets to be used and, in the subsequent year, verifies the results achieved.

More in detail, for 2016, the incentive target has been confirmed equal to the 50% of the fixed remuneration and based on the following parameters:

Yearly target	Weight	Booster
Group EBITDA	40%	X 2
Group Net Sales	40%	X 2
Group Free Cash Flow	20%	X 1.2

The targets take into consideration the different factors deemed part of a balanced performance and reflect the priorities indicated in the Company's plans. The total incentive is equal to the sum of the single bonuses payable upon achieving the relative targets.

The targets are calculated on the basis of pre-determined exchange rates and on the existing perimeter at the beginning of the fiscal year. For each target is defined a minimum threshold, under which the target is deemed to not have been achieved and, consequently, the payout linked to the single target not be made, and an accelerator (booster) in case of overachievement of the results. The maximum payout cannot exceed, in any case, the 180% of the target.

The only further condition for the payout, in addition to the targets achievement, is that the CEO/GM must be employed for the whole performance year and consequently until December 31st of the reference year.

The incentive also foresee a claw-back clause following which the Company has the right to claim for reimbursement of the amounts paid on the basis of materially inaccurate performance metrics.

Medium-long term variable incentive (LTI)

The CEO/GM is beneficiary of the medium-long term share incentive plan (LTI) approved by the Shareholders' Meeting on April 16th, 2014. The system has a temporal framework of 3.5 years for each assignment and is based on an annual "rolling" mechanism with periodical cumulative targets (EBIT/Net Sales). As described in the plan approved by the Shareholders' Meeting is expected an assignment every year until 2018 linked to the evolution of the 3Yrs Plans and the share trend.

Also this plan foresee a claw-back clause and, for the Executive cluster in which the CEO/GM is comprised, a lock-up clause for the shares eventually vested. Considering the international best practices and the consistent vesting period of the plan the lock-up period has been defined in 1 financial year from the date of vesting of the rights.

The details of all the assignments made under this plan to the CEO/GM are shown in Section 2 – Table 3A of this statement.

Additional insurance coverage

The Chief Executive Officer/General Manager is covered, together with Amplifon SpA Key Managers, by a life insurance policy (only in the event of death) which is in addition to what is provided under the National Collective Labour Contract (CCNL Commercio) through the Antonio Pastore Fund. The policy will cover up to a maximum of € 360,000 which is the level under which an anamnesis questionnaire need not be filled out. The premium varies depending on the actuarial age of the insured and is determined definitively when coverage begins.

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All of the Amplifon SpA Executives, including the CEO/GM, also have medical coverage which provides for the refund of expenses, in addition to the standard FASDAC coverage, and an annual medical check-up.

Benefits

The Chief Executive Officer/General Manager is beneficiary of a Company car pursuant to Amplifon's Company car policies and of the Flexible Benefits plan under which the CEO, as well as all employees of Amplifon S.p.A, may select, within a predetermined budget and in accordance with the law (art. 100, comma 1 of TUIR) options which best fit his needs with a particular focus on education/culture and healthcare not provided for as part of the coverage referred to in previous paragraph. The CEO is also beneficiary of an housing reimbursement for the first three years of the employment relationship.

Indemnity in the event of resignation, dismissal or termination

To date, considering the end of the current mandate (Approval of the 2015 draft Annual Financial Report) no agreements regarding indemnity to be paid in the event of resignation dismissal without cause or termination with the CEO/GM have been made. Following the appointment of the new Board of Directors, the Committee, consistently with the indication of the Code of Conduct, will assess the definition of an indemnity in case of employment relationship termination or not renewal of the office.

3.3 Remuneration of Key Managers with Strategic Responsibilities

The Key Managers with strategic responsibilities are identified by the Remuneration Committee following the current regulations that identifies them with those persons who have the power and responsibility, directly or indirectly, for planning, directing and controlling the Company's activities and to adopt decisions that might affect Amplifon's development and future prospects. Therefore are part of this cluster the business leaders of the three regions and the functional officers of the Group even if not direct employees of Amplifon SpA.

During 2015 also this cluster has been involved in the leadership transition and has experienced different changes. On December 31st 2015 was composed by:

• Giovanni Caruso, Chief HR Officer
• Andrea Facchini, Chief Marketing Officer
• Massimiliano Gerli, Chief Information Officer
• Ugo Giorcelli, Chief Financial Officer

• Giovanni (John) Pappalardo, Executive Vice President APAC

• Giulio Pizzini, Chief Strategic Development Officer

• Heinz Ruch, Executive Vice President Americas

The remuneration received by each member of the Key Managers cluster in 2015 are shown in Section 2 – Table 1 of this Statement with the indication, where provided, of the hiring and termination date and the possible indemnities paid.

The remuneration policies applicable to this cluster are defined, within the Group's Global Reward Policy framework, by the CEO/GM, examined by the Remuneration Committee and shared with the Board of Directors.

The Key Managers' remuneration is composed, overall, by the same elements foresee for the CEO/GM remuneration, with the exclusion of the emoluments for the office of CEO.

Fixed Remuneration

Each year the CEO/GM assesses, with the support of the Group HR Department and on the basis of the advice of the Remuneration Committee, the base salary of the Key Managers in light of reference market standards and potentially proposes any necessary changes based on the principles of the Group's Global Reward Policy, as well as in light of the level of Total Remuneration per year.

Short term variable incentive (MBO)

The Key Managers' variable incentive, in line with the CEO/GM one, is linked to the Group's economic and financial performances.

More in detail, for 2016, the incentive target has been confirmed equal to the 50% of the fixed remuneration for the Executive Vice Presidents and equal to 40% for the Chief Functional Officers and is based on the following parameters:

Yearly target	Weight	Booster
Group/Region EBITDA	35%	X 2
Group/Region Net Sales	30%	X 2
Group/Region Free Cash Flow	15%	X 1.2
Individual Objectives	20%	X 1.2

The targets take into consideration the different factors deemed part of a balanced performance and reflect the priorities indicated in the Company's plans. The total incentive is equal to the sum of the single bonuses payable upon achieving the relative targets.

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The targets are calculated on the basis of pre-determined exchange rates and on the existing perimeter at the beginning of the fiscal year. For each target is defined a minimum threshold, under which the target is deemed to not have been achieved and, consequently, the payout linked to the single target not be made, and an accelerator (booster) in case of overachievement of the results. The incentive tied to individual objectives is determined on the basis of the performance appraisal conducted yearly by the CEO/GM following Amplifon's current Performance Development Review Process or PDR.

The maximum payout cannot exceed, in any case, the 200% of the target for the Executive Vice Presidents and the 170% of the target for the Chief Functional Officers. The only further condition for the payout, in addition to the targets achievement, is that the beneficiary must be employed for the whole performance year and consequently until December 31st of the reference year.

The incentive also foresee a claw-back clause following which the Company has the right to claim for reimbursement of the amounts paid on the basis of materially inaccurate performance metrics.

Medium-long term variable incentive (LTI)

The Key Managers are beneficiary, as for the CEO/GM, of the medium-long term share incentive plan (LTI) approved by the Shareholders' Meeting on April 16th, 2014. The system has a temporal framework of 3.5 years for each assignment and is based on an annual "rolling" mechanism with periodical cumulative targets (EBIT/Net Sales). As described in the plan approved by the Shareholders' Meeting is expected an assignment every year until 2018 linked to the evolution of the 3Yrs Plans and the share trend.

Also this plan foresee a claw-back clause and, for the Executive cluster, a lock-up clause for the shares eventually vested. Considering the international best practices and the consistent vesting period of the plan the lock-up period has been defined in 1 financial year from the date of vesting of the rights.

The details of all the assignments made under this plan are shown consolidated for the whole cluster in Section 2 – Table 3A of this statement.

Previous Share Incentive Plans (Stock Options/Performance Stock Grant)

The Key Managers are still beneficiaries of Stock Option plans approved in 2005 and 2010 and now completed and of the Performance Stock Grant Plan 2011-2020. The details of he assignments made under these plans are shown in Section 2 - Table 2 and 3A of this statement).

Additional insurance coverage

The Key Managers employed by Amplifon SpA are covered by a life insurance policy (only in the event of death) which is in addition to what is provided under the National Collective Labour Contract (CCNL Commercio) through the Antonio Pastore Fund. The policy will cover up to a maximum of € 360,000 which is the level under which an anamnesis questionnaire need not be filled out. The premium varies depending on the actuarial age of the insured and is determined definitively when coverage begins.

All of the Amplifon SpA Executives also have medical coverage which provides for the refund of expenses, in addition to the standard FASDAC coverage, and an annual medical check-up.

Benefits

All Key Managers are beneficiary of a Company car pursuant to the car policies provided by their related Amplifon Company. The Key Managers employed by Amplifon SpA are also beneficiary, as well as all employees of Amplifon S.p.A, of the Flexible Benefits plan under which the beneficiary may select, within a predetermined budget and in accordance with the law (art. 100, comma 1 of TUIR) options which best fit his needs with a particular focus on education/culture and healthcare not provided for as part of the coverage referred to in previous paragraph.

Indemnity in the event of resignation, dismissal or termination

For the Key Managers the payment due for employment termination as per the relevant national collective labour agreement is envisaged, together with any other additional severance indemnity agreed upon on an individual basis upon termination. For cases of termination that present high competitive risks relating to the criticality of the position held by the Manager, non-competition agreements may also be entered into with payments defined in relation to the remuneration received and the conditions of duration and efficacy of the agreement.

Responsible of the "Internal Audit" function

The remuneration of the manager of the "Internal Audit" function (Group Risk & Compliance Officer) is in line with the Remuneration Policy of the Group and consistent with the role / task assigned to him. In particular, the base salary is commensurate with the market benchmark of listed companies and to the levels of performances evaluated on the basis of individual goals set annually and key competences required by the position. The variable incentive is linked, as well as all Managers of Amplifon SpA to Group results and to a positive evaluation of individual objectives mentioned above.

4. Main changes with respect to previous year

The Global Reward Policy 2016 confirms the setting applied with satisfactory results in the previous years.

Considering the ambitious 3Yr Plan of the Group and the need of constantly aligning the incentive systems with the Company strategic priorities, the Remuneration Committee submitted to the Board of Director on December 17th, 2015 a proposal of update of the short term variable incentive scheme (MBO).

The incentive scheme has, therefore, been reviewed with the aim of the simplification and efficacy in particular balancing consistently the weight of the EBITDA and Net Sales targets as well as foreseeing an achievement scale in continuum from the minimum threshold, below which no payout is paid, to the target. As know, it already exist a similar continuum mechanism from the target to the maximum payout.

On October 22nd, the Board of Director has appointed Enrico Vita, General Manager of the Company, Chief Executive Officer of the Group until the end of the current mandate (Approval of the 2015 Annual Financial Report). The remuneration structure of the new CEO is in line with the Global Reward Policy of the Group and aligned to the previous CEO. On the same date the previous CEO, Franco Moscetti, was appointed non-Executive Vice President.

All the information related to the indemnities provided for the termination of the relationships with the CEO Franco Moscetti have been communicated on our website in a timely manner following the indication of the Code of Conduct (Principle 6.P.5) on July 23rd, 2015 and are reported in details in the first part of the Section 2 of this Statement.

SECTION 2 IMPLEMENTATION OF THE 2015 REMUNERATION POLICIES

All tables included in this section are defined following the current Consob Regulation (Resolution n.18049) available on the Consob website in the "Legal Framework" area (www.consob.it).

From this Statement on are included in the tables also the information related to the Key Managers with Strategic Responsibilities not direct employees of the Issuer.

During 2015 the cluster of the Key Managers experienced the following changes:

• On January 31st, 2015 Paul Mirabelle has terminate his employment relationship. On the same date Giovanni (John) Pappalardo has been appointed Executive Vice President APAC and therefore included in the Key Managers cluster;
• On April 13th, 2015 Alberto Baroli has effectively terminated his employment relationship. On the same date Andrea Facchini, Chief Marketing Officer, has been included in the Key Managers cluster;
• On September 29th, Giulio Pizzini has been appointed Chief Strategic Development Officer;
• On October 22nd , Enrico Vita has been appointed CEO;
• On December 31st, Enrico Bortesi has terminated his employment relationship.

All tables include the information related to those who have been part of the Key Managers cluster, even partially during the year, on a full year base but for Enrico Vita whose information are reported nominally for the full year in relations with his new role as CEO.

Table 1 – Remuneration paid to the Directors, Statutory Auditors, the Chief Executive Officer/General Manager and the other Key Managers of the Group

Fixed compensation: this item includes the emoluments approved by the Shareholders, the compensation received by the Chairman of the Board, the Honorary Chairman, the non-Executive Vice President and the CEO as well as the gross base salary including social charges and taxes for which the employee is responsible.

Committee fees: this item includes any emoluments received for acting as Chairman or a member of any Board committees and/or the Supervisory Board ("Organismo di Vigilanza") calculated in accordance with the criteria determined by the Board of Directors. The committees to which the Directors belong (and the office held), along with the compensation received, are shown in note.

Bonuses and other incentives: this item includes amounts vested, even if not paid during the year, for having achieved the targets established under the short term variable incentive plans benefiting the Chief Executive Officer/General Manager and the Key Managers. It also includes bonus pertaining to the year but not included in specific plans ( lump sum). This amount is equal to the values shown in Table 3B, in the columns "Bonuses payable/paid in the year", "Bonuses from previous years paid/payable" and "Other bonuses".

Fringe benefits: this item includes fringe benefits, evaluated with the criteria of the taxable income, such as insurance policies and additional health care coverage. Is also included the value of the Flexible Benefits assigned in 2015 to the CEO and the Key Managers and the housing for the CEO.

Other compensation: at 31 December 2015 no forms of remuneration for services which may be considered indirect compensation existed.

Fair Value Equity Compensation: the fair value of any grants made pursuant to incentive plans based on financial instruments is shown estimated in accordance with international accounting standards. This amount is equal to the sum of the amounts shown in Table 2 in the column "Options pertaining to FY 2015" and in the Table 3A in the column "Financial Instrument pertaining to FY 2015".

Termination indemnities: this item includes the indemnities owed to the CEO, detailed below, or to the Key Managers for termination during the year.

Indemnities foreseen for the termination of the relationships with the CEO/GM

On October 22nd, 2015 Franco Moscetti, Chief Executive Officer waives his office, keeping until the end of the mandate the office as a non-executive Vice President of the Board.

All the information related to the indemnities provided for the termination of the relationships with the CEO Franco Moscetti have been communicated on our website consistently with the indication of the Code of Conduct (Principle 6.P.5) on July 23rd, 2015.

Herein after are reported the main terms and conditions of the agreement signed between Franco Moscetti and the Company, in line and consistently with Amplifon Remuneration Policy and the undertakings defined by the above parties on April 24th, 2013.

The employment relationship with Franco Moscetti will terminate upon mutual consent effective October 22nd, 2015.

From that date and until the approval of the 2015 Annual Financial Report by the Shareholders' Meeting of the Company, Franco Moscetti will hold the position of Board member and nonexecutive Vice President. For this role the Manager will receive an emolument according to the guidelines defined in Amplifon Remuneration Policy and already included in the total annual Board members' compensation amount defined by the Shareholders' Meeting on April 21st, 2015.

Upon, and in consideration of, the mutual termination of the employment relationship, the Company will pay to the Manager an amount of Euro 5.700.000 gross in addition to the statutory termination allowances.

The amount has been determined in compliance and consistently with the provision of the Amplifon Remuneration Policy and the undertakings mentioned above. The amount has been increased in consideration of Franco Moscetti's ten-year contribution to the Company's growth.

The above-mentioned amount has been paid in two equal installments, on July 30th, 2015 and on November 10th, 2015 respectively.

No other payments have been granted for the year 2015.

On March 15th, 2012 the Board of Directors approved the assignment of 300.000 rights to Franco Moscetti under the Performance Stock Grant Plan 2011-2020 (cycle 2012-2015). On April 28th, 2014, the Board of Directors approved the assignment of 300.000 rights under the New Performance Stock Grant Plan 2014-2021 (cycle 2014-2016). According to the Rules of the respective Plans all the above rights have vested on the date of termination and has been exercised within the mandatory term of three months from the vesting date.

The agreement reached with Franco Moscetti also includes a non-compete covenant which refers to the Company's main competitors and, in view of the international relevance of the Manager's role, extends to the territories of Europe, United States of America, Japan, India, China and Oceania. As a consideration for the non-compete obligations, which shall be effective for a period of 12 months after termination of the Board member office, Franco Moscetti shall be paid a gross amount of Euro 700.000 in two equal instalments payable by October 31st, 2016 and by April 30th, 2017, respectively.

No monetary or non-monetary benefits will be granted after termination of the Board member office, with the exception of the life insurance policy, currently in place, and paid by the Company which will expire in September 2016.

Table 1 - Remuneration paid to the Directors, Statutory Auditors, the Chief Executive Officer/General Manager and the other Group Key Managers (000/€)

Name and Surname	Office	Period in which the office has been held	Term of office	Fixed Compensation	Committee fees	Bonus and other incentives	Fringe benefits	Other compensation	Total	FV Equity Compensation	Termination indemnities
Anna Maria Formiggini	Honorary Chairman	01/01/2015-31/12/2015	apr-16	€ 190	-	-	-	-	€ 190	-	-
Susan Carol Holland	Chairman	01/01/2015-31/12/2015	apr-16	€ 215	-	-	€ 5	-	€ 220	-	-
	CEO	01/01/2015-22/10/2015	oct-15	€ 150	-	-	-	-	€ 150	-	-
Franco Moscetti	Non-Executive Vice President	22/10/2015-31/12/2015	apr-16	€ 28	-	-	-	-	€ 28	-	-
	General Manager	01/01/2015-22/10/2015		€ 595	-	-	€ 12	-	€ 607	€ 1.449	€ 6.400
Enrico Vita	CEO	22/10/2015-31/12/2015	apr-16	€ 123	-	-	-	-	€ 123	-	-
	General Manager (1)	Permanent		€ 454	-	€ 438	€ 27	-	€ 919	€ 347	-
Giampio Bracchi(2)		Indipendent Director 01/01/2015-31/12/2015	apr-16	€ 55	€ 50	-	-	-	€ 105	-	-
Maurizio Costa(3)		Indipendent Director 01/01/2015-31/12/2015	apr-16	€ 55	€ 40	-	-	-	€ 95	-	-
Andrea Guerra(4)		Indipendent Director 01/01/2015-31/12/2015	apr-16	€ 55	€ 15	-	-	-	€ 70	-	-
Anna Puccio(5)		Indipendent Director 29/01/2015-31/12/2015	apr-16	€ 54	€ 15	-	-	-	€ 69	-	-
Giovanni Tamburi		Indipendent Director 01/01/2015-31/12/2015	apr-16	€ 55	-	-	-	-	€ 55	-	-
Giuseppe Levi	Chairman of the Board of Statutory Auditors	01/01/2015-21/04/2015	apr-15	€ 0	-	-	-	-	€ 0	-	-
Raffaella Pagani	Chairman of the Board of Statutory Auditors	21/04/2015-31/12/2015	apr-18	€ 45	-	-	-	-	€ 45	-	-
Emilio Fano	Standing Auditor	01/01/2015-31/12/2015	apr-18	€ 30	-	-	-	-	€ 30	-	-
Maria Stella Brena	Standing Auditor	01/01/2015-31/12/2015	apr-18	€ 30	-	-	-	-	€ 30	-	-
		Total		€ 2.134	€ 120	€ 438	€ 44	€ 0	€ 2.736	€ 1.796	€ 6.400
Other Key Managers with strategic responsibilities of the Group (10) (**)		Permanent		€ 2.529	€ 0	€ 1.272	€ 394	-	€ 4.195	€ 1.886	€ 656
Grand total				€ 4.663	€ 120	€ 1.710	€ 438	€ 0	€ 6.931	€ 3.682	€ 7.056

(1) Includes all compensation for the different roles covered in 2015

(2) Compensation as Chairman of the Risk & Control Committe - 25.000 €

Compensation as Chairman of the Supervisory Board (OdV) - 25.000 €

(3) Compensation as Chairman of the Remuneration & Appointment Committee - 25.000 € Compensation as Member of the Supervisory Board (OdV) - 15.000 €

(4) Compensation as Member of the Remuneration & Appointment Committe - 15.000 € (5) Compensation as Member of the Risk & Control Committe - 15.000 €

(**) includes all Directors who have covered the role also partially in 2015

Table 2 – Stock Options assigned to the Directors, Statutory Auditors, the Chief Executive Officer/General Manager and the other Key Managers of the Group

With regard to the incentive plans based on financial instruments, detailed information can be found in the compensation schemes called for under Art. 114-bis of Testo Unico della Finanza or TUF (Legislative Decree n. 58 of 24 February 1998) and pursuant to Art. 84-bis of the Issuers' Regulations (CONSOB Resolution n. 11971/99), as well as Annex 3A, Form 7 of the Issuers' Regulations, which can be found on the Company's website www.amplifon.com/corporate - Governance section.

Options held at the beginning of the period:for each stock option plan is indicated, for the Chief Executive Officer/General Manager and, as an aggregate, for Key Managers:

• the number of options held at the beginning of the period;
• the exercise price for each plan;
• the exercise period as per the plan regulations.

Options granted during the period: no stock options plans are still active, so no options were assigned during 2015.

Options exercised during the period: for each stock option plan is indicated, for the Chief Executive Officer/General Manager and, as an aggregate, for Key Managers:

• the number of options exercised in the period;
• the exercise price;
• the average market price on the dates of the exercises.

Options expired/cancelled during the period: no options expired in 2015.

Options held at the end of the period: equal to the options held at the beginning of the period less the options exercised and/or cancelled during the period itself

Options pertaining to the period (FY 2015): show the fair value at the date of allocation of any options related to the year under examination estimated in accordance with international accounting standards. The sum of this amount with the amounts showed in Table 3A is equal to the amounts shown in Table 1, in the column "Fair Value – Equity compensation".

Table 2 - Stock Option assigned to the Directors, the Chief Executive Officer/General Manager and the other Key Managers of the Group

					Options held at the beginning of the period			Options exercised during the period				Options pertaining to FY 2015
Name and Surname	Office	Plan (approved date)	No. of options	Exercise Price	Exercise period	Options granted during the period	No. of options		Exercise Price Avg market price on the exercises date	Options expired/cancelled	Options held at the end of the period
Franco Moscetti	CEO and General Manager	Plan 2005 - ITA (30 September 2005) 200.000 € 5,713			(1/3) 30/09/2006 - 30/09/2015 (1/3) 30/09/2007 - 30/09/2015 (1/3) 30/09/2008 - 30/09/2015	-	200.000	€ 5,71	€ 7,02	-	-	-
Enrico Vita	CEO and General Manager	-	-	-	-	-	-	-	-	-	-	-
		Piano 2005 - CH (30 September 2005) 125.000 € 5,697			(1/3) 30/09/2006 - 30/09/2016 (1/3) 30/09/2007 - 30/09/2017 (1/3) 30/09/2008 - 30/09/2018	-	-	-	-	-	125.000	-
	Other Key Managers with strategic responsibilities of the Group (10)	Piano 2005 - ITA (30 September 2005) 130.000 € 5,713			(1/3) 30/09/2006 - 30/09/2015 (1/3) 30/09/2007 - 30/09/2015 (1/3) 30/09/2008 - 30/09/2015	-	130.000	€ 5,71	€ 7,01	-	0	-
		Piano 2010 (16 December 2010)		227.438 € 3,746	(1/2) 17/12/2012 - 17/12/2017 (1/2) 17/12/2013 - 17/12/2018	-	-	-	-	-	227.438	-
	Grand Total		682.438 -	-		-	330.000	-	-	-	352.438	-

Table 3A –Incentive plans based on financial instruments, other than stock options, benefiting the Directors, the Statutory Auditors, the Chief Executive Officer/General Manager and the other Key Managers of the Group

With regard to the incentive plans based on financial instruments, detailed information can be found in the compensation schemes called for under Art. 114-bis of Testo Unico della Finanza or TUF (Legislative Decree n. 58 of 24 February 1998) and pursuant to Art. 84-bis of the Issuers' Regulations (CONSOB Resolution n. 11971/99), as well as Annex 3A, Form 7 of the Issuers' Regulations, which can be found on the Company's website www.amplifon.com/corporate - Governance section.

Financial instruments assigned in previous years not already vested: is shown the numbers of financial instruments assigned in the previous years and not vested during 2015.

Financial instruments assigned in the period: for the Chief Executive Officer/General Manager and, as an aggregate, for Key Managers are indicated:

• the number of financial instruments assigned;
• the Fair Value at the Grant Date;
• the Vesting Period of the plan;
• the Date of the Grant;
• the share market price at Grant Date.

Financial instruments vested in the period and not assignable: during 2015 the Performance Stock Grant Plan 2011-2020 (2011 cycle of assignment) has vested and all beneficiaries' Rights have been assigned.

Financial instruments vested in the period and assigned: are indicated:

• for the CEO/GM the financial instruments that, as foreseen in the Operative Rules of the Plans, are vested in advance following the termination of the employment relationship (see section related to the indemnities foreseen for the termination of the employment relationship with the CEO)
• for the Key Managers the financial instruments vested and assignable within the Performance Stock Grant Plan 2011-2020 (2011 cycle of assignment).

Financial instruments exercised in the period: for the Chief Executive Officer/General Manager and, as an aggregate, for Key Managers are indicated for the Plan vested and assignable:

numbers of financial instrument exercised in the period;

the average market price on the dates of the exercises.

Financial instruments expired/cancelled during the period: during 2015, as foreseen in the Operative Rules of the Plan, the financial instruments of the Key Managers whose employment relationships terminated in the year have been cancelled.

Financial instruments held at the end of the period: equal to the financial instruments held at the beginning of the period less the instruments exercised and/or cancelled during the period itself

Financial instruments pertaining to the period (FY 2015): show the fair value at the date of allocation of any financial instrument related to the year under examination estimated in accordance with international accounting standards. The sum of this amount with the amounts showed in Table 2 column "Options pertaining to FY 2015" is equal to the amounts shown in Table 1, in the column "Fair Value – Equity compensation".

Table 3A - Incentive plans based on financial instruments, other than stock options, benefiting the Directors, the Statutory Auditors, the Chief Executive Officer/General Manager and the other Key Managers of the Group

Name and Surname			Financial instruments assigned in Financial instruments assigned in the period previous periods not already vested					Financial instrument	Financial	Financial instruments exercised in the period		Financial	Financial	Financial
	Office held	Plan	No. of financial instruments	Vesting period	No. of financial instruments	FV at Grant Date	Vesting Period	Date of Grant	Share Market Price at Grant Date	vested in the period and not assigned	instrument vested in the period and assigned	No. of financial instruments	Avg market price at the dates of exercises	instruments expired/canceled in the period	instruments held at the end of the period	instruments pertained to FY 2015 27
Franco Moscetti Manager	CEO and General	Performance Stock Grant Plan 2011-2020 (13 Dicember 2010)	-	-	-	-	-	-	-	-	300.000	300.000	€ 7,037	-	-	478
		New Performance Stock Grant Plan 2014-2021 (16 April 2014)	-	-	-	-	-	-	-	-	300.000	300.000	€ 7,027	-	-	971
Enrico Vita Manager	CEO and General	New Performance Stock Grant Plan 2014-2021 (16 April 2014)	100.000	giu-17	-	-	-	-	-	-	-	-	-	-	100.000	194
		New Performance Stock Grant Plan 2014-2021 (16 April 2014)	-	-	120.000 €	6,13	giu-18	29/04/2015	€ 6,88	-	-	-	-	-	120.000	153
	Total		100.000	-	120.000	-	-	-	-	-	600.000	600.000	-	-	220.000	1.796
		Performance Stock Grant Plan 2011-2020 (13 Dicember 2010)	-	-	-	-	-	-	-	-	180.000	180.000	€ 7,528 -		-	-
		Performance Stock Grant Plan 2011-2020 (13 Dicember 2010)	335.000	giu-16	-	-	-	-	-	-	-	-	-	-	335.000	366
Other Key Managers with strategic responsibilities of the		Performance Stock Grant Plan 2011-2020 (13 Dicember 2010)	340.000	giu-17	-	-	-	-	-	-	-	-	-	52.500	287.500	246
Group (10)		New Performance Stock Grant Plan 2014-2021 (16 April 2014)	535.000	giu-17	-	-	-	-	-	-	-	-	-	140.000	395.000	767
		New Performance Stock Grant Plan 2014-2021 (16 April 2014)	-	-	420.000 €	6,13	giu-18	29/04/2015	€ 6,88	-	-	-	-	30.000	390.000	497
		New Performance Stock Grant Plan 2014-2021 (16 April 2014)	-	-	30.000 €	6,57	giu-18	22/10/2015	€ 7,19	-	-	-	-	-	30.000	10
	Grand Total		1.310.000	-	570.000	-	-	-	-	-	780.000	780.000	-	222.500	1.657.500	3.682

Table 3B – Cash based incentive plans benefiting the Directors, the Statutory Auditors, the Chief Executive Officer/General Manager and the other Key Managers of the Group

Bonus pertaining to the year: for the Chief Executive Officer/General Manager and, as an aggregate, for the Key Managers are indicated:

• bonuses of competence of the year, vested after having reached the targets for the year and payable insofar as they are not subject to other conditions with the exception of the year business results validation by the Remuneration Committee and the BoD);
• bonuses deferred tied to targets achieved in the year but not payable insofar as subject to other conditions;
• deferment period for the different bonuses.

Bonuses pertaining to previous years: in 2015 there are no bonuses of previous year deferred in the exercise.

Other bonuses: this item includes one-off bonuses paid in the year but not included in specific plans (lump sum)

Table 3B - Cash-based incentive plans benefiting the Directors, the Statutory Auditors, the Chief Executive Officer/General Manager and the other Key Managers of the Group

Name and Surname						Bonus pertaining to the year		Bonus pertaining to previous year
	Office Held	Plan		Payable/Paid	Deferred	Deferment period	No longer payable	Payable/Paid	Still deferred	Other bonuses
Enrico Vita	CEO and General Manager	MBO Plan 2015	€	338	-	-	-	-	-	€	100
	Other Key Managers with Strategic responsibilities of the Group (10)	MBO Plan 2015	€	1.226	-	-	-	-	-	€	46
	Grand Total		€	1.564	-	-	-	-	-	€	146

Scheme 7-ter – Shareholdings of the Directors, the Statutory Auditors, the Chief Executive Officer/General Manager and the other Key Managers of the Group

At December 31st 2015, no member of the Board and Control Bodies, including the Chief Executive Officer/General Manager and no Key Manager with strategic responsibilities have any shareholding in the Issuer in addition to:

• The significant interests in share capital as indicated in the Corporate Governance Report;
• The potential Stock Options/Performance Stock Grant exercises as mentioned in the previous tables.

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