Embla Medical hf — Proxy Solicitation & Information Statement 2018

Feb 22, 2018

ÖSSUR

LIFE WITHOUT LIMITATIONS

ÖSSUR HF.'S ANNUAL GENERAL MEETING

Thursday 8 March 2018 at 9:00 am (GMT) at Grjótháls 5, Reykjavík, Iceland

AGENDA

1. The Board of Directors' report on the Company's activities for the preceding year.
2. Decision on the distribution of the net profit of the Company over the fiscal year 2017.
3. Submission of the Consolidated Financial Statements of the Company for the preceding year for confirmation.
4. The Board of Directors' report on remuneration and benefits.
5. Decision on the Company's Remuneration Policy.
6. Decision on remuneration to the Board of Directors for 2018.
7. Proposal on a new Share Incentive Program.
8. Election of the Board of Directors.
9. Election of an Auditor.
10. Proposal to reduce the Company's share capital. The Board of Directors proposes to reduce the Company's share capital by ISK 6,354,662 nominal value by way of cancelling 6,354,662 of the Company's own shares of ISK 1 each, corresponding to 1.45% of the Company's share capital. Because of the capital reduction, it is proposed to amend Article 4, paragraph 1, of the Company's Articles of Association accordingly.
11. Proposal to grant an authorization to initiate share buyback programs.
12. Proposal to amend Article 7 of the Company's Articles of Association. The Board of Directors proposes to amend Article 7 and (i) delete references to the Icelandic Act No. 131/1997 on the Electronic Registration of Title to Securities in paragraphs 3 and 4, and (ii) delete paragraph 5 in full, to ensure that the Company is not limited by the Articles of Association when deciding where Össur shares are issued, see item 13.
13. Proposal to grant an authorization to move the issuance of Össur shares from Nasdaq CSD Iceland to VP Securities in Denmark.
14. Any other business lawfully submitted or accepted for discussion by the Annual General Meeting.

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ANNUAL GENERAL MEETING 2018

OSSUR.
LIFE WITHOUT LIMITATIONS

PROPOSALS

2. Proposal on the distribution of the net profit of the Company over the fiscal year 2017

The Board of Directors proposes that the Company pays a dividend of DKK 0.13 per share to the shareholders for the year 2017, corresponding to approximately 16% of the Company's net profits. The Ex-Date is 9 March 2018, the Record Date is 12 March 2018 and the Payment Date is 22 March 2018.¹

The Board proposes that the remaining net profits in 2017 are carried over to the following year.

3. Proposal on confirmation of the Consolidated Financial Statements of the Company for the preceding year

The Board of Directors proposes that the Consolidated Financial Statements for 2017 are approved.

5. Proposal on the Company's Remuneration Policy

The Board of Directors proposes that the Company's current Remuneration Policy, approved at the Annual General Meeting in 2017, is approved without any changes.

6. Proposal on remuneration to the Board of Directors for 2018

The Board of Directors proposes the following Board remuneration for 2018:

Chairman of the Board	USD 94,000
Vice Chairman of the Board	USD 56,400
Board Members	USD 37,600

7. Proposal on a new Share Incentive Program

The Board of Directors proposes that the following share incentive program is approved:

"Type of share-based incentive program: Share options.

Participants: The CEO and other members of the Executive Management, their direct reports (with exceptions) and key specialists in strategic positions.

Total number of share options: Up to 5,400,000 share options, for one share each, may be granted and be in effect at each time under the program. If any share options lapse prior to their vesting date, new share options may be granted instead.

¹ Ex-Date: The day when trading commences without dividends (the next business day after the AGM).
Record Date: The day shareholders must be registered in the share registry to be entitled to receive dividends (the second business day after the AGM). This means that shareholders that have purchased shares on the day of the AGM will receive dividends, see comment on Ex-Date above.
Payment Date: The day when dividends are paid out to shareholders (two weeks after the AGM).

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ANNUAL GENERAL MEETING 2018

ÖSSUR®
LIFE WITHOUT LIMITATIONS

Granting time: The share options shall be granted periodically. No more than 2,700,000 share options shall be granted and be in effect under the program in 2018.

Vesting time: 3 years from the grant date.

Exercise period: 1 year immediately after the share options have vested.

Exercise price: The Company's average share price on Nasdaq Copenhagen the 20 trading days prior to the grant date.

Other key terms and conditions:

Participants may not exercise their share options when they are in possession of inside information.

Participants are required to hold shares, corresponding to 5% of the profit gained of the share options after deduction of taxes, until their employment with the Company is terminated.

In general, the share options will lapse if the participants are no longer employed with the Company. The Company may, however, decide to waive this condition in special circumstances.

The Company may not grant any loans or guarantees to participants in connection with the share options."

8. Nomination of candidates for the Board of Directors

The Board proposes that its size shall remain unchanged and that all the current Board Members are re-elected:

Mr. Niels Jacobsen

Dr. Kristján Tómas Ragnarsson

Mr. Arne Boye Nielsen

Mrs. Guðbjörrg Edda Eggertsdóttir

Dr. Svafa Grönfeldt

9. Nomination of an Auditor

The Board of Directors proposes, in conformity with the Audit Committee’s recommendations, to re-elect Deloitte ehf. as the Company’s Auditor.

10. Proposal to reduce the Company’s share capital

The Board of Directors proposes to reduce the Company’s share capital by ISK 6,354,662 nominal value by way of cancelling 6,354,662 of the Company’s own shares of ISK 1 each.

Because of the capital reduction, it is proposed that Article 4, paragraph 1, of the Company’s Articles of Association is amended and shall state as follows:

"The share capital of the Company amounts to ISK 430,808,063 – fourhundredandthirty-millioneighthundredandeightthousandandsixtythreeIcelandickrónur – and is divided into the same number of shares with a nominal value of ISK 1 each."

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ANNUAL GENERAL MEETING 2018

ÖSSUR®
LIFE WITHOUT LIMITATIONS

If the proposal is approved, Article 4, paragraph 1, of the Company's original Articles of Association in Icelandic will be amended accordingly and shall state as follows:

„Hlutafé félagsins er kr. 430.808.063 – fjögurhundruðogþrjátiumilljónirátthundruðogáttapúsundogsextiuogþrjárkrónur – að nafnverði og skiptist í jafnmarga hluti að nafnverði 1 króna hver.“

11. Proposal to grant an authorization to initiate share buyback programs

The Board of Directors proposes that the following resolution on share buyback programs is approved:

“The Board of Directors is authorized, until the next Annual General Meeting 7 March 2019, to allow the Company to initiate one or more share buyback programs (the “Programs”) that comply with the provisions of Regulation No. 596/2014 of the European Parliament and of the Council on market abuse (“MAR”) and the Commission’s delegated regulation 2016/1052. The main purpose of the Programs shall be to reduce the Company’s share capital, but the shares purchased may also be used to meet the Company’s obligations under share incentive programs with employees. The Company may purchase up to 20,000,000 shares in total under the Programs, corresponding to 4.6% of the current share capital. The total consideration for shares purchased under the Programs shall not exceed USD 40 million. The Company shall not purchase more than 25% of the average volume of the shares each trading day based on the average volume the 20 trading days preceding the date of purchase on the regulated market where the purchase is carried out. The purchase price shall not be higher than the price of the last independent trade or the highest current independent bid, whichever is higher, on the regulated market where the transaction is carried out. Each Program shall be managed by an investment firm or a credit institution which makes its trading decisions in relation to the Company’s shares independently of, and without influence by, the Company regarding the timing of the purchases. The Company’s purchases under the Programs shall be disclosed in accordance with law and regulations.”

12. Proposal to amend Article 7 of the Company’s Articles of Association

The Board of Directors proposes to amend Article 7 and (i) delete references to the Icelandic Act No. 131/1997 on the Electronic Registration of Title to Securities in paragraphs 3 and 4, and (ii) delete paragraph 5 in full.

Accordingly, it is proposed that Article 7 of the Company’s Articles of Association states as follows:

“The Board of Directors shall maintain a share register in accordance with law and shall ensure the share register includes correct information at each given time.

The share register shall be kept at the Company’s office and all shareholders shall have access to it and may acquaint themselves with its content.

The Company’s shares shall be issued in an electronic manner.

The share register shall be regarded as full proof of ownership of shares in the Company.”

If the motion is approved, Article 7 of the Company’s original Articles of Association in Icelandic shall state as follows:

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ANNUAL GENERAL MEETING 2018

ÖSSUR®
LIFE WITHOUT LIMITATIONS

"Stjórn félagsins skal halda hlutaskrá í samræmi við lög og skal hún gæta þess að hlutaskráin geymi réttar upplýsingar á hverjum tíma.

Hlutaskráin skal vera geymd á skrifstofu félagsins og eiga allir hluthafar aðgang að henni og mega kynna sér efni hennar.

Hlutabréf félagsins skulu gefin út með rafrænum hætti.

Hlutaskráin skóast sem fullgild sönnun fyrir eignarrétti að hlutum í félaginu."

1. Proposal to grant an authorization to move the issuance of Össur shares from Nasdaq CSD Iceland to VP Securities in Denmark

The Board of Directors proposes that the following resolution on the issuance of Össur shares is approved:

"The Board of Directors is authorized to: (i) register Denmark as the country of issuance of Össur shares, (ii) move the issuance of Össur shares to VP Securities in Denmark, and (iii) request the deregistration of Össur shares at Nasdaq CSD Iceland."