Amplifon — Remuneration Information 2018

Mar 15, 2018

Remuneration Statement 2018

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

INTRODUCTION 3
OVERVIEW 4
SECTION 1 2018 REMUNERATION POLICY 5
1. Governance Model 5
1.1 Parties involved 5
1.2 Definition and approval of the Global Reward Policy 2018 8
2. Overall principles and objectives 9
3. Remuneration Policy 2018 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 2017 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 22
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 23
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 26
Scheme 7-ter – Shareholdings of the Directors, the Statutory Auditors, the Chief Executive
Officer/General Manager and the other Key Managers of the Group 28

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.

During 2017 the leadership structure of the Group has continued its transformation process consistently with the growth ambitions and the new strategic guidelines, causing some changes within 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 2017 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.

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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 2018 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 & Appointments Committee, as well as of the specific Corporate functions:

• determines, after examining the proposals of the Remuneration & Appointments 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 & Appointments 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 & Appointments 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 & Appointments Committee

The Remuneration & Appointments 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 three non-executive and primarily independent Directors with adequate knowledge and experience in multinational companies.

COMPOSITION OF THE REMUNERATION & APPOINTMENTS COMMITTEE

The Committee met 5 times in 2017, with an average duration of 1,3 hours and a % of participation of 100%

Maurizio Costa
Susan Carol Holland
Andrea Casalini
Maria Patrizia Grieco

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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 leaving, however, the meeting when proposals related to his remuneration are discussed.

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 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.

	- Executives Update
	- Remuneration Statement approval
February 20th	- Recommendation on BoD overall remuneration
	- 2016 MBO results validation
	- CEO/Executives/Internal Audit Remuneration Review
	- Executives Update
	- Allocation of BoD overall remuneration
	- LTI 2014-2016 results validation
April 19th	- LTI 2017-2019 targets definition
	- Share Incentive Plan (New Performance Stock Grant Plan
	2014-2021) cycle of assignment 2017-2019
July 26th	- Executives Update
	- Update on Senior Managers
October 23rd	- Assessment of Remuneration Policy
	- Share Incentive Plan (New Performance Stock Grant Plan
	2014-2021) –2nd assignment 2017-2019
	- Amplifon Corporate Culture
December 11th	- Leadership Transformation and Succession Plan
	- Global Reward Policy 2018
	- 2018 MBO targets definition for CEO/GM and Executives

REMUNERATION COMMITTE ACTIVITIES IN 2017

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 Appointments committee has scheduled five meetings in 2018.

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.

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 2018

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 11th, 2017, the Remuneration Committee assessed positively the Group's Global Reward Policy for 2018, which was subsequently approved by the Board of Directors on December 15th, 2017. 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 Directors and the Key Managers of the Group is defined based on the following principles:

• the non-Executive Directors' emoluments are defined on the basis of the commitment needed to carry out their assignments 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 2018 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

On December 31st, 2017 the Board of Director consisted of:

• Chief Executive Officer: Enrico Vita
• Chairman of the Board: Susan Carol Holland
• Non-Executive Directors: Andrea Casalini, Alessandro Cortesi, Maurizio Costa, Laura Donnini, Maria Patrizia Grieco, Lorenzo Pozza, 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 20th, 2017 the Shareholders' Meeting has approved, based on the recommendation of the Remuneration Committee and the BoD proposal, to assign to the Directors an annual overall compensation of Euro 1.300.000,00. The increase of the overall compensation, approximately equal to 8% from previous year, is mainly linked to an adjustment of the CEO's remuneration, following the remuneration review process and in alignment with the market benchmark.

The total amount has been therefore allocated in this way:

• Euro 55.000,00 for each of the Directors, with the exception of the Chairman and Chief Executive Officer;
• Euro 300.000,00 for the Chairman;
• Euro 400.000,00 for the Chief Executive Officer;
• Euro 30.000,00 extra for each Independent Director called upon to be a Chairman of the Remuneration & Appointments or Risk, Control & Sustainability Committee;

• Euro 20.000,00 extra for each Independent Director called upon to be a member of the Remuneration & Appointments or Risk, Control & Sustainability Committee;

• Euro 15.000,00 extra for the Independent Director called upon to be the Chairman of the Supervisory Board ("Organismo di Vigilanza");

• Euro 10.000,00 extra for each Independent Director called upon to be a member of the Supervisory Board ("Organismo di Vigilanza");
• Euro 10.000,00 extra for the Independent Director called upon to be the Indipendent (Related Parties) Committee;
• Euro 5.000,00 extra for each Independent Director called upon to be a member of the Indipendent (Related Parties) Committee.

The compensation received by each member of the Board of Directors in 2017 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 against 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 2018, the incentive target is based on the following parameters:

Yearly target	Weight	Booster(1)
Group EBITDA	40%	X 2
Group Net Sales	40%	X 2
Group Free Cash Flow	20%	X 1.2

1 The booster will apply only in the case of overachievement of the targets and proportionally respect to the maximum target achievable, as defined by the Remuneration Committee and approved by the Board of Directors. The boosters will apply only if the Group EBITDA target has been achieved.

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 184% 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 (cluster 1). 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). The system also foreseen a threshold linked to the NFP/EBITDA ration as well as an exercise thresholds on the share value. 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.

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 housing reimbursement for the first three years of the employment has expired on February 28th, 2017.

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Indemnity in the event of resignation, dismissal or termination

To date no agreements regarding indemnity to be paid in the event of resignation dismissal without cause or termination with the CEO/GM have been made.

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 2017 and first months of 2018 this cluster has been involved in the leadership transition and has experienced different changes. On February 1st, 2018 was composed by:

• ‐ Alessandro Bonacina, Chief Marketing Officer
• ‐ Francesca Morichini, Chief HR Officer
• ‐ Cristian Finotti, Chief Procurement Officer
• ‐ Massimiliano Gerli, Chief Information Officer (leaving on February 28th, 2018 and replaced by Gabriele Chiesa from March 1st)

• ‐ Gabriele Galli, Chief Financial Officer

• ‐ Iacopo Lorenzo Pazzi, Executive Vice President EMEA

• ‐ Giulio Pizzini, Chief Strategic Development Officer
• ‐ Marc C. Lundeberg, Executive Vice President Americas
• ‐ Craig Stevens, Executive Vice President APAC

The remuneration received by each member of the Key Managers cluster during 2017 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 against the 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.

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

More in detail, for 2018, the incentive target is based on the following parameters:

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 (cluster 1). 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). The system also foreseen a threshold linked to the NFP/EBITDA ration as well as an exercise thresholds on the share value. 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 Performance Stock Grant Plans

Some of the Key Managers are still beneficiaries the Performance Stock Grant Plan 2011-2020, the last assignment of which has been delivered in 2013. The details of the 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. Some of the Key Managers are also beneficiary of an housing allowance for a period defined at the hiring date.

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. In addition, the responsible of the position participate, as all the International Key Managers of the Group to the Performance Stock Grant Plan (cluster 2), with conditions of vesting are related to the stability in the role until the end of the vesting period (3,5 years), and to a positive appraisal of the individual performance for each year of the vesting.

4. Main changes with respect to previous year

The Global Reward Policy 2018 confirms the setting applied with satisfactory results in the previous years. Specifically, the Remuneration Policy has demonstrated to be solid, competitive and attractive towards the talent market at international level.

Considering the expiring of the current share incentive plan the Remuneration Committee during 2018 will be focusing on:

• ‐ The assessment and analysis of new proposals related to the short medium/long term incentive plans;
• ‐ The indemnities to be paid in the potential resignation, dismissal or not renewal of the office of the CEO/GM, according to the indication of the Code of Conduct.

SECTION 2 IMPLEMENTATION OF THE 2017 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).

During 2017 the cluster of the Group Key Managers experienced the following changes:

• ‐ On January 1st, 2017 Craig Stevens has been appointed Executive Vice President APAC and therefore included in the Group Key Managers cluster;
• ‐ On January 31st, 2017 Andrea Facchini has effectively terminate his employment relationship. Since February 1st, 2017 Alessandro Bonacina has been appointed Chief Marketing Officer and therefore included in the Group Key Managers cluster;
• ‐ On February 28th, 2017 Ugo Giorcelli has terminate his employment relationship. On March 1st, 2017 Gabriele Galli has been appointed Chief Financial Officer and therefore included in the Group Key Managers cluster;
• ‐ On June 30th, 2017 Heinz Ruch has terminate his employment relationship. Since May 1st, 2017 Marc C. Lundeberg has been appointed Executive Vice President Americas and therefore included in the Group Key Managers cluster;
• ‐ On September 30th, 2017 Giovanni Caruso has effectively terminate his employment relationship. Since October 1st, 2017 Francesca Morichini has been appointed Chief HR Officer and therefore included in the Group Key Managers cluster.

All tables include the information related to those who have been part of the Key Managers cluster, even partially during the year 2017, on a full year base.

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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 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 emolument 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 of the year established under the short-term variable incentive plans benefiting the Chief Executive Officer/General Manager and the Key Managers. It also includes bonus paid in 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, additional health care coverage, life insurance ("Fondo Pastore") the Flexible Benefits assigned in 2017 to the CEO/GM and the Key Managers employed by the issuer and the potential housing.

Other compensation: at 31 December 2017 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 2017" and in the Table 3A in the column "Financial Instrument pertaining to FY 2017".

Termination indemnities: this item includes the indemnities owed to the Key Managers for termination during the year and any non-compete agreements.

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

Nam d Su e an rna me	Off ice	Per iod in w hich the off ice has bee n he ld	Ter f of fice m o	Fixe d Co tion mpe nsa	Com mit fee tee s	Bon nd o the r ince us a ntiv es	Frin ge b fits ene	Oth sati er c om pen on	Tot al	FV Equ ity C sati om pen on	Ter min atio n in dem niti es
Sus an C l Ho llan d aro	Cha irm an	01/ 01/ /12 /20 201 7‐31 17	l con app rova s.fin 201 8 .sta tem ent	€ 30 0	‐	‐	€ 2	‐	€ 30 2	‐	‐
Enri co V ita	CEO	01/ 01/ /12 /20 201 7‐31 17	l con app rova s.fin 201 8 .sta tem ent	€ 40 0	‐	‐	‐	‐	€ 40 0	‐	‐
	Gen l Ma era nag er	Perm	nt ane	€ 71 1	‐	€ 70 0	€ 31	‐	€ 1. 442	€ 70 7	‐
And alin Cas i rea	Indi den t Di rect pen or	01/ 01/ /12 /20 201 7‐31 17	l con app rova s.fin 201 8 .sta tem ent	€ 55	(1) € 30	‐	‐	‐	€ 85	‐	‐
Ale dro i Co rtes ssan	Indi den t Di rect pen or	01/ 01/ /12 /20 201 7‐31 17	l con app rova s.fin 201 8 .sta tem ent	€ 55	(2) € 2 0	‐	‐	‐	€ 75	‐	‐
rizio Mau Cos ta	Indi den t Di rect pen or	01/ 01/ /12 /20 201 7‐31 17	l con app rova s.fin 201 8 .sta tem ent	€ 55	(3) € 30	‐	‐	‐	€ 85	‐	‐
ini Lau ra D onn	Indi den t Di rect pen or	01/ 01/ /12 /20 201 7‐31 17	l con app rova s.fin 201 8 .sta tem ent	€ 55	(4) € 35	‐	‐	‐	€ 90	‐	‐
ia P atri zia Grie Mar co	Indi den t Di rect pen or	01/ 01/ /12 /20 201 7‐31 17	l con app rova s.fin .sta tem ent 201 8	€ 55	(5) € 20	‐	‐	‐	€ 75	‐	‐
Lore Poz nzo za	Indi den t Di rect pen or	01/ 01/ /12 /20 201 7‐31 17	l con app rova s.fin 201 8 .sta tem ent	€ 55	(6) € 45	‐	‐	‐	€ 10 0	‐	‐
Gio ni T amb uri van	Indi den t Di rect pen or (*)	01/ 01/ /12 /20 201 7‐31 17	l con app rova s.fin 201 8 .sta tem ent	€ 55	(7) € 5	‐	‐	‐	€ 60	‐	‐
Raff aell a Pa i gan	Cha f th irm an o e Boa rd o f St atut ory Aud itor s	01/ 01/ /12 /20 201 7‐31 17	l con app rova s.fin 201 7 .sta tem ent	€ 45	‐	‐	‐	‐	€ 45	‐	‐
Emi lio F ano	Stan ding Au dito r	01/ 01/ /12 /20 201 7‐31 17	l con app rova s.fin 201 7 .sta tem ent	€ 30	‐	‐	‐	‐	€ 30	‐	‐
tell Mar ia S a Br ena	ding dito Stan Au r	01/ 01/ /12 /20 201 7‐31 17	l con app rova s.fin 201 7 .sta tem ent	€ 30	‐	‐	‐	‐	€ 30	‐	‐
		Tot al		€ 1. 901	€ 0	€ 70 0	€ 33	€ 0	€ 2. 819	€ 70 7	€ 0
Oth er K ey M ana ger ibil itie s of the resp ons	ith s egic trat s w Gro up ( 13) (**)	Perm	nt ane	€ 2. 937	€ 0	€ 1. 762	€ 45 9	‐	€ 5. 158	€ 1. 758	€ 59 0
	Gra	nd T l ota		€ 4. 838	€ 0	€ 2. 462	€ 49 2	€ 0	€ 7. 977	€ 2. 465	€ 59 0

(1) Compensation as Chairman of the Indipendent (Related Parties) Committe and as member of the Remuneration & Appointments Committe

(2) Compensation as member of the Risk, Control and Sustainability Committee

(3) Compensation as Chairman of the Remuneration & Appointments Committee

(4) Compensation as member of the Indipendent (Related Parties) Committee, the Risk, Control & Sustainability Committee and the Supervisory Board

(5) Compensation as member of the Remuneration & Appointments Committee

(6) Compensation as Chairman of the RIsk, Control and Sustainability Committe and Chairman of the Supervisory Board

(7) Compensation as member of the Indipendent (Related Parties) Committee

(*) on December 22 the BOD was informed that the indipendence requirements of the Director Giovanni Tamburi have cesead

(**) includes all Managers who have covered the role also partially in 2017

21

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.

As showed in the previous Remuneration Statement, during 2016 all the Stock Options plans for which the Group Key Managers were beneficiaries have expired. Therefore, as of 1 January 2017, no Group Key Manager holds options relating to the Stock Options plans of Amplifon S.p.A.. The Group Remuneration Policy of Amplifon, as of today, does not provide for the assignment of options to the Directors.

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.

23

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 2017.

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 2017 no financial instruments not assignable have vested.

Financial instruments vested in the period and assigned: are indicated for the CEO/GM and aggregated for the Key Managers the financial instruments vested in the period and assigned within the Performance Stock Grant Plan 2011-2020 (cycle of assignment 2013-2016) and within the New Performance Stock Grant Plan 2014-2021 (cycle of assignment 2014-2016).

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 2017, 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 2017): 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 2017" 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

e and Offic e he ld Nam Surn ame											Finan cial i nstru ds no ious perio prev	igne d in ts ass men t alre ady v d este		Finan cial i igne d in t he p eriod nstru ts ass men				cial i Finan nstru t men	cial Finan instr nt ume	Finan cial i ercis ed in the nstru ts ex men d perio		Finan cial	Finan cial instr nts h eld ume	Finan cial
		Plan	No. o f fina ncial instr nts ume	ing p eriod Vest	No. o f fina ncial instr nts ume	FV at Gra nt Da te	ing P eriod Vest	of G Date rant	Shar e Ma rket Price at Gr ant D ate	d in t he p eriod veste and n signe d ot as	d in t he veste perio d and assig ned	No. o f fina ncial instr nts ume	Avg m he date arke t pric e at t s of e ises xerc	instr nts ume red/ expi eled in canc the p eriod	at th d of t he e en perio d	instr nts ume aine d to FY pert 2017
		rfor ce S k New Pe toc man lan Gra nt P 201 4‐20 21 (16 il 20 14) Apr			‐	‐	‐	‐	‐	‐	.000 138	‐	‐	‐	.000 138	71
Enr ico Vita	and al CEO Ge ner	rfor k New Pe ce S toc man Gra nt P lan 201 4‐20 21 (16 il 20 14) Apr	120 .000	Jun e 20 18	‐	‐	‐	‐	‐	‐	‐	‐	‐	‐	120 .000	184
	Man age r	rfor k New Pe ce S toc man Gra nt P lan 201 4‐20 21 (16 il 20 14) Apr	120 .000	Jun e 20 19	‐	‐	‐	‐	‐	‐	‐	‐	‐	‐	120 .000	226
		rfor k New Pe ce S toc man Gra nt P lan 201 4‐20 21 (16 il 20 14) Apr	‐	‐	.000 120	9 € 11,3	Jun e 20 20	27/ 04/ 201 7	5 € 11,8	‐	‐	‐	‐	‐	.000 120	227
	al Tot		2 40.0 00	‐	120 .000	‐	‐	‐	‐	‐	138 .000	‐	‐	‐	498 .000	707
		form ock Per e St Gra nt anc Plan 201 1‐20 20 (13 mb ) Dice er 2 010	‐	‐	‐	‐	‐	‐	‐	‐	.000 235	180 .000	(1) 12,5	‐	00 55.0	100
		erfo Nuo vo P rma nce ck G Pla Sto n 20 14‐ rant 202 1 (16 il 20 14) Apr	‐	‐	‐	‐	‐	‐	‐	‐	.700 503	200 .857	(1) 12,5	‐	.843 302	258
		erfo Nuo vo P rma nce ck G Pla Sto n 20 14‐ rant 202 1 (16 il 20 14) Apr	370 .000	Jun e 20 18	‐	‐	‐	‐	‐	‐	‐	‐	‐	110 .000	.000 260	398
Oth er K ey M ana ibil itie resp ons	ith ic stra teg ger s w s of the Gro up (13)	erfo Nuo vo P rma nce Sto ck G Pla n 20 14‐ rant 202 1 (16 14) Apr il 20	30.0 00	Jun e 20 18	‐	‐	‐	‐	‐	‐	‐	‐	‐	‐	30.0 00	58
		erfo Nuo vo P rma nce Sto ck G Pla n 20 14‐ rant 202 1 (16 Apr il 20 14)	340 .000	e 20 19 Jun	‐	‐	‐	‐	‐	‐	‐	‐	‐	130 .000	.000 210	395
		erfo Nuo vo P rma nce Sto ck G Pla n 20 14‐ rant 202 1 (16 il 20 14) Apr	‐	‐	.000 280	11,3 9	Jun e 20 20	27/ 04/ 201 7	11,8 5	‐	‐	‐	‐	‐	.000 280	530
		erfo Nuo vo P rma nce Sto ck G Pla n 20 14‐ rant 202 1 (16 Apr il 20 14)	‐	‐	00 30.0	11,7 3	Jun e 20 20	25/ 10/ 201 7	12,3 7	‐	‐	‐	‐	‐	00 30.0	19
	nd T l Gra ota		9 80.0 00	‐	430 .000	‐	‐	‐	‐	‐	876 .700	380 .857	‐	.000 240	3 1.66 5.84	2.46 5

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 2017 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 (thousands €)

d Na Su me an rn am e				Bo nu s p	in ing ta to t er	he y ea r	Bo nu s p er	in ing ta to p re	io v us y ea r
	f f ice l d O He	lan P		/ b le i d Pa	fe d De rre	fe De t rm en io d p er	lon No g er b le p ay a	/ Pa b le Pa y a i d	S i l l de fe d t rre	O t bo	he r nu se s
ico i En V ta r	d C E O an l Ge ne ra Ma na g er	lan M B O P 2 0 1 7	€	7 0 0	-	‐	‐	‐	‐	€	‐
he O Ke M t r an ag er y b l f i i i ies t re sp on s o ( ) 1 3	i h ic S t tra te s w g he Gr t ou p	lan M B O P 2 0 1 7	€	1. 0 8 2	-	‐	‐	‐	‐	€	6 8 0
	l To ta		€	1. 7 8 2	‐	‐	‐	‐	‐	€	6 8 0

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 2017, 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.