Unieuro — AGM Information 2020

Nov 25, 2020

17 DECEMBER 2020 SHAREHOLDERS' MEETING

Corporate Governance Roadshow November 2020

Highlights – Key Messages

New LTIP aiming at aligning Management's to Shareholders'

Unieuro: one of the few true public companies in Italy, with an independent Board of Directors and fully independent internal committees

objectives to be approved by the Shareholders' Meeting, on 17 Dec. 2020

Effective ability to focus Management on long-term results through adequate pay-mix and 5-year vesting + holding period. Shares instead of stocks

LTIP as an important new step in the path of improving corporate governance, in line with international best practice and in the interests of shareholders

Agenda

• Shareholding Structure and BoD Composition
• 17 December 2020 Shareholders' Meeting
• Focus on Remuneration Policy
• Performance Share Plan 2020-2025

Unieuro: A True Public Company…

Updated shareholding structure

…With An Independent Board Of Directors…

• Appointed in June 2019, in charge for three years until 2021 AGM
• Integrated in February 2020, after the resignation of 3 Directors following the complete divestment of Rhone Capital, and subsequently ratified by the June 2020 AGM
• 9 members, 5 men and 4 women, mostly independent (7 out of 9)
• Annual BoD evaluation carried out by an independent advisor
• Induction program supporting all members
• Total BoD compensation amounting to €580,000 per year

	Independent Director
	International experience
ML	Nominated within the Majority List
ml	Nominated within the Minority List
BoD	Co-opted by the Board of Directors, ratified by 2020 AGM
	Member of the Remuneration and Appointments' Committee
	Member of the Control and Risks Committee
	Member of the Related Parties Committee
	Member of the Sustainability Committee

…Structured In Accordance With International Best Practices

Board of Directors Committees

	Control and Risks Committee	Remuneration and Appointments' Committee	Related Parties Committee	Sustainability Committee
Functions	• Evaluation and decisions regarding the internal audit and risk-management system • Assessment of the correct application of accounting principles and their uniformity for the preparation of the periodic financial reports.	Proposal-making and advisory role in supporting the BoD in evaluations and decisions regarding: • size and composition of the BoD itself, as well as any co optation • remuneration policy, in order to determine the remuneration criteria of the Top Management	• Independent oversight and opinion on the opportunity for Unieuro to engage in related party transactions, irrespective of any threshold of significance • expressing an opinion with respect to the cost effectiveness and substantial fairness of the relative conditions	• Proposals and advice to the BoD on sustainability issues • Evaluation of processes, initiatives and activities aimed at overseeing Unieuro's commitment to creating long term value for the benefit of all its stakeholders
	•	•	•	•
	Marino Marin (President)	Marino Marin (President)	Marino Marin (President)	Catia Cesari (President)
mposition	•	•	•	•
	Monica Montironi	Catia Cesari	Pietro Caliceti	Michele Bugliesi
Co	•	•	•	•
	Paola Galbiati	Pietro Caliceti	Monica Montironi	Paola Galbiati
Independence	100%	100%	100%	100%

Agenda

• Shareholding Structure and BoD Composition
• 17 December 2020 Shareholders' Meeting
• Focus on Remuneration Policy
• Performance Share Plan 2020-2025

Shareholders' Meeting - Agenda

Ordinary Shareholders' Meeting

Resolutions on the first section of the Company's remuneration policy

Integrations and amendments to Remuneration Policy for the purpose of:

• adding LTIP to the variable components of remuneration
• redefining the pay-mix of the relative remuneration package

• acknowledge the remuneration of the members of the Sustainability Committee

• Total amount: up to 2,000,000 ordinary shares of the Company representing, as at today, 10% of the share capital

• Main objectives:
• extraordinary transactions
• medium and long-term investment
• market liquidity support activities
• serving the LTIP

Extraordinary Shareholders' Meeting

Proposal to delegate a share

• The Capital Increase: free issue of new shares over a period of five years from the date of the resolution, even on several occasions

• Total amount: up to 900,000 new ordinary shares with no express indication of their nominal value

• Objective: serving the LTIP, ensuring a sufficient number of shares to be allocated to beneficiaries, if performance objectives and other conditions are achieved

2 Proposal of Performance Share Plan 2020-2025 (LTIP)

• The Plan: free allocation in 3 three-year cycles of rights to receive Unieuro ordinary shares, together with a cash bonus based on any cash dividends paid by the Company up to the allotment date
• Total amount: up to 900,000 ordinary shares

Agenda

• Shareholding Structure and BoD Composition
• 17 December 2020 Shareholders' Meeting
• Focus on Remuneration Policy
• Performance Share Plan 2020-2025

A Well-Balanced Remuneration Policy / 1

Remuneration Pillars

• Objective: to remunerate skills, experience and contribution required by the role
• Amounts:
• Chairman: € 160,000 gross per year, approved by the BoD on the basis of the remuneration approved by the Shareholders' Meeting.
• CEO: € 350,000 gross per year, only concerning the managing role, since the CEO waived the remuneration assigned to him by the Board pursuant to Article 2389, paragraph 3, of the Italian Civil Code.

FIXED REMUNERATION SHORT-TERM INCENTIVE (MBO)

• Objective: to incentive achievement and excess of annual economic and financial targets set in the budget, as well as further non-economic annual targets
• 2020 gate condition: Adj. EBITDA (IAS 17) level of at least 70% of the target set for the year
• Criteria:
• 70% Adj. EBITDA (IAS 17)
• 20% Net Financial Position
• 10% Net Promoter Score
• Bonus opportunity: for CEO, between 50% and 100% of the base salary at target, and maximum 150% of attarget bonus
• Additional provisions:
• Claw-back (3 years)
• Malus

LONG-TERM INCENTIVE (PERFORMANCE SHARE PLAN 2020-2025 – LTIP)

• Objectives:
• motivation and focus on strategic
• retention of key resources
• alignment of beneficiaries' and shareholders' interest
• attraction of talented professionals
• Total amount: up to 900,000 ordinary shares
• Conditions: the achievement of certain performance objectives (Adj. EBIT and Adj. Free Cash Flow) as well as specific vesting conditions
• Allocation dates: 2023 (1st cycle), 2024 (2nd cycle) and 2025 (3rd cycle)
• Beneficiaries (1st cycle): max 45 executives a/o employees

A Well-Balanced Remuneration Policy / 2 - Pay-Mix

PAY-MIX no. 2 (maximum opportunity of LT component)

based on the MAXIMUM number of shares allocated (at the target)

Fixed Remuneration

Short-term variable component (MBO), as the annual value of the incentive obtainable upon reaching the target

Long-term variable component (LTIP), calculated as the minimum (pay mix n. 1) and maximum (pay mix n. 2) number of shares which may be obtained upon achievement of the objective target values in the 1st three-year cycle of the 2020-2025 Performance Share Plan valued at Unieuro share price as at 12 November 2020.

Proposed Performance Share Plan 2020-2025 / 1

Characteristics of the Plan

• Performance Share Plan (vs. previous Stock Options Plan)
• Beneficiaries: C-level and C-1 level executives
• Maximum no. of beneficiaries (1st Cycle): 45, yet to be identified
• Three rolling cycles
• Cliff vesting
• Vesting period: 3 years
• Lock-up for C-level beneficiaries: 2 years
• Cash bonus based on any cash dividends paid by the Company up to the allotment date

Additional provisions

• Claw-back (3 years)
• Malus
• Acceleration (pro rata temporis and pro rata performance) in case of:
• public offer to purchase a/o exchange shares
• delisting;
• change of control

during the Vesting Period

Servicing

• Capital increase up to € 180,000 by means of issuance of max. 900,000 ordinary shares, to be assigned free of charge to the beneficiaries, even on several occasions

and/or

• Buy-back Program providing for purchase and disposal of up to 2,000,000 Unieuro ordinary shares (10% of the subscribed current share capital) in one or more tranches

Proposed Performance Share Plan 2020-2025 / 2

Vesting conditions: 1° Cycle Targets

• 1. Continuation of the employment relationship (except good leavers)
• 1. Achievement of financial targets:
• Three-year cumulative Adj. EBIT(1) (weight: 60%)
• Three-year cumulative Adj. Free Cash Flow(2) (weight: 40%)

Performance Objective achieved vs. target	Accrued rights
threshold 80%	target weight % x 50% x BNS(*)
target 100%	target weight % x 100% x BNS(*)
cap 150% or more	target weight % x 150% x BNS(*)

(*) BNS (Base Number of Shares) indicates the number of shares that each Beneficiary may obtain upon reaching 100% of the Performance Objectives

Accrued rights determined through linear interpolation as regards intermediate values between 80% and 100% and between 100% and 150%

Dilution

• Per performance cycle:
• 1% (200,000 shares), in case of performance in line with target (100%)
• 1.5% (300,000 shares), in case of max. overperformance (150% of target)
• Total:
• max 4.5% of the current share capital

Notes: (1) Adjusted EBIT is EBIT adjusted for: (i) non-recurring expenses/(income), (ii) non-recurring depreciation, amortisation and write-downs, and (iii) the impact from the adjustment of revenues for extended warranty services net of related estimated future costs to provide the assistance service, as a result of the change in the business model for directly managed assistance services. (2) Adjusted Free Cash Flow is defined as cash flow generated/absorbed by operating activities net of investment activities inclusive of financial expenses and lease flows and adjusted for nonrecurring investments and other non-recurring operating flows and including adjustments for non-recurring expenses (income) and their non-cash component and the related tax impact.

Shareholders' Meeting - How To Attend

NEXT CORPORATE AND IR EVENTS

MID & SMALL VIRTUAL CONFERENCE by Virgilio IR 1, 2, 3 December 2020

SHAREHOLDERS' MEETING Forlì, 17 December 2020

9M 2020/21 RESULTS 13 January 2021

3°ITALIAN MID CAP CONFERENCE by Mediobanca 19, 20 January 2021

IR CONTACTS

Andrea Moretti Investor Relations Director

+39 335 5301205

amoretti@unieuro.com investor.relations@unieuro.com

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Unieuro S.p.A.

Via Schiaparelli, 31 47122 – Forlì (FC) – Italy

unieurospa.com