GN RESOUND GROUP ANNOUNCES CORPORATE REFOCUSING

REDWOOD CITY, CALIFORNIA - 2000 - In a statement released today, GN ReSound Group senior corporate executives announced their plans to initiate further consolidations and adjustments in the company's global structure and business presence, commencing January 1, 2001.

Within the last eighteen months, the worldwide corporation of GN Resound Group has acquired four of the nine largest hearing instrument manufacturers (ReSound, GN Danavox, Beltone and Philips), creating what is now the second largest worldwide corporation in the industry. These alliances have already yielded visible improvements in turn-time, product quality and customer support in key business areas. This unprecedented expansion has also brought with it the opportunity to explore vital operational and organizational efficiencies that would allow the company to better utilize its extensive resources in meeting the needs of both its customers and the hearing care market.

Key elements included in today's statement are:

The long-term goal of the corporation is to establish 2 major global hearing aid brands. These brands will be

• GN ReSound: merging the former


• ReSound and Danavox brands


• Beltone: merging the former Philips brand into Beltone

GN ReSound North America operations, currently headquartered in Minneapolis, Minnesota, will continue to be headquartered there. Additional consolidation will include relocating key inside sales and technical support functions from the Redwood City location to Minneapolis. Carsten Trads will continue as President of this organization.

Beltone U.S. operations, currently headquartered in Chicago, Illinois, will continue to be headquartered there. Mike Skiera will continue as President of this organization. Jan Metzdorff will continue to manage Beltone's presence in Canada.

GN ReSound Group's worldwide headquarters, currently located in Redwood City, California, will move to Copenhagen, Denmark, where the parent company, GN Great Nordic is located. Jesper Mailind, President and CEO of GN ReSound Group and his staff will relocate to Copenhagen.

North American manufacturing facilities and associated customer service will currently operate in Redwood City, Minneapolis and Chicago.

Research and Development operations currently located in a variety of locations worldwide will be refocused as follows:

• Research & Core Technology will take advantage of corporate talent located in various parts of the world, and will be responsible for the research and development of core chip technology that will be used as the basis for future products developed under each corporate brand. This area will be managed out of the worldwide headquarters in Copenhagen.
• Product Development Units will be established for each brand. The GN ReSound Product Development Unit will develop applications that will be included in the GN ReSound product line. The Beltone Product Development Unit will develop applications that will be included in the Beltone product line. Applications will be developed independently to meet existing competitive and market-specific, customer-driven needs.
• Audiological Research including test system design and clinical research coordination will be handled out of the Redwood City facility.

The GN ReSound Group's executive management team responsible for the GN ReSound, Beltone and Viennatone businesses will be led by Jesper Mailind as President and CEO, headquartered in Copenhagen, and an Executive Vice-President & Group President for North America who is to be recruited and will work out of the Groups North American headquarters located in Chicago. GN ReSound and Beltone will continue to separately serve the North American market.

Beltone's current President and CEO, Mike Cannizzaro, will transition into a consulting role for the company as of January 1, 2001.

With these additional consolidations and efficiencies in place, GN ReSound Group and regional executives believe that both the GN ReSound offering and the Beltone offering will enjoy increased economies along with improvements in quality and service support. Customers of both companies will see these benefits reflected in their experiences, and will be able to pass these improvements on to their hearing impaired patients as well.

As additional details regarding the ongoing efforts of the GN ReSound Group to establish a premier worldwide organization unfold, further press releases will be disseminated to keep interested parties informed.