Össur hf. - Results of Shareholders Meeting 6 June 2002

A meeting of shareholders of Össur hf. was held at 2 p.m. on Thursday, 6 June 2002.

In the absence of the Chairman of the Board of Directors, Mr. Gunnar Stefánsson, Member of the Board, called the meeting to order.  Mr. Garðar Garðarsson, Attorney to the Supreme Court, was elected to preside at the meeting, and he appointed Ms. Guðrún Björnsdóttir Secretary to the meeting.

The chairman of the meeting verified the lawfulness of the meeting.  Pursuant to Section 4.01 of the Articles of Association of the Company a shareholders' meeting is valid, regardless of attendance, if the meeting has been lawfully convened.  Shareholders’ meetings shall be called by an advertisement in the media with at least two weeks’ notice, stating the business of the meeting.  Submitted to the meeting is an advertisement published in Morgunblaðið last 22 May.

No comments were submitted regarding the notice of the meeting and the Chairman declared the meeting competent to decide on the business included in the agenda. 

Attendants represented shares in the total amount of ISK  186,273,068, i.e. 57.77%% of the total shares in the company.

The agenda of the meeting is as follows:
	
	1.	Submission of the proposals of the Board of Directors of the Company regarding the determination of the share capital of Össur hf. in US dollars, the nominal value of shares in US dollars, the implementation of the change in the denomination of shares from Icelandic krónur to US dollars, and authorisation to the Board of Directors to make amendments to the Company’s Articles of Association relating to the above.

	2.	Any other business lawfully submitted or approved for discussion by the Meeting.

The meeting addressed the agenda.

The CEO of the Company, Mr. Jón Sigurðsson, introduced the proposals.  He said that the proposals were introduced to make it easier for the Company to reach foreign investors.  He said that there was a risk that the Company would outgrow the Icelandic stock market, but that the Company needed access to capital to improve its growth potential.  The participation of foreign investors will bring a greater scope to the Company’s shareholders.  Reaching such shareholders requires a profitable company with good future prospects and a dynamic home market, as well as share capital denominated in a currency which is familiar to foreign investors.  Recent amendments to Icelandic legislation now makes it possible for companies to prepare their financial reports in foreign currencies and to list their shares in foreign currencies.  This is the reason for the proposals before the meeting, but owing to difficulties of implementation, because the business systems of the banks are not ready, they will be implemented as soon as possible.


The Chairman called for discussions of the proposals.

No one took the floor.

The Chairman declared that the motion constituted a single proposal, even though it was submitted in several consistent items.   The proposal would therefore be put to a single vote in its entirety.  The chairman then explained the changes made from the original proposal, which are not substantive and intended only to remove any ambiguity in the phrasing of the original proposal.  The Chairman ruled that the amendment exceeded the original proposal in scope and should, accordingly, take precedent; the proposal was therefore put to the vote in its amended form.  The proposal is as follows:


The Board of Directors submits the following proposals on the denomination of Össur hf. share capital in US dollars (USD), on the nominal value of the shares in USD, on the implementation of the transformation of shares from Icelandic krónur to USD, and on amendments to the Company’s Articles of Association relating to the above.

	1.	In order to implement the redenomination of Össur hf. stock from Icelandic krónur to USD, the number of shares in the Company will first be increased tenfold by dividing all the issued shares in the Company, each currently in the amount of ISK 1, into ten shares of ISK 0.10, in accordance with Paragraph 5 of Section 2.01 of the Company’s Articles of Association.

	2.	After this, the shares in Össur hf. will be denominated in USD on the basis of the provisions of Paragraphs 4 and 5 of Article 1 of Act No. 2/1995 on Limited Liability Companies.  The nominal value of the share capital of the Company, in the amount of ISK 328.441.000, will be converted into whole USD based on the exchange rate of 31 December 2001, ISK 103,20/USD, bringing the new nominal value to USD 3,182,568.  The nominal value of each share in the Company in USD will be USD 0.50.  All existing authorisation for the Board of Directors to increase the share capital of the Company will also be converted into whole USD based on the exchange rate of 31 December 2001.  For this purpose, the Articles of Association of the Company will be amended as follows:	??a)	Paragraph 1 of Section 2.01 shall be replaced by the following paragraph:	??“The share capital of the Company amounts to USD 3,182,568 – three million one hundred and eighty two thousand five hundred and sixty-eight US dollars, divided into 6,365,136 – six million three hundred and sixty-five thousand one hundred and thirty-six shares of USD 0.50.  These shares have been paid in full.”		??b)	Paragraph 2 of Section 2.01 on the authorisation of the Board of Directors to increase the share capital of the Company is amended as follows:	??The passage “ISK 5,766,895 – five million seven hundred sixty-six thousand eight hundred and ninety-five” is replaced by “USD 55,881 – fifty five thousand eight hundred and eighty-one US dollars”.	?c)	Paragraph 3 of Section 2.01 on the authorisation of the Board of Directors to increase the share capital of the Company is amended as follows:	??The passage “ISK 7,083,565 – seven million and eighty-three thousand five hundred and sixty-five” is replaced by “USD 68,639 – sixty-eight thousand six hundred and thirty-nine US dollars”.	??The passage “ISK 10,000,000” is replaced by “USD 96,899 – ninety-six thousand eight hundred and ninety-nine US dollars.	??d)	Paragraph 4 of Section 2.01 on the authorisation of the Board of Directors to increase the share capital of the Company is amended as follows:	??The passage “ISK 708,540” is replaced by “USD 6,866 – six thousand eight hundred and sixty-six US dollars.	??e).	Paragraphs 5 and 6 of Section 2.01 are deleted.	??f)	Paragraph 1 of Section 4.05 shall be replaced by the following paragraph:	??“At shareholders’ meetings, each share carries one vote.”.	?
	3.	Following these measures, the shares of Company shareholders denominated in Icelandic krónur will be exchanged for shares denominated in USD.  This will be done by exchanging shares of ISK 0.10 belonging to individual shareholders of Össur hf. for shares of USD 0.50, to the extent that the total holdings of individual shareholders in the former shares are divisible by whole USD 0.50 shares based on the exchange rate of 31 December 2001.  In instances where a remainder is created, Össur will transfer its own shares of ISK 0.10 to the shareholder in question to the extent required to bring the remainder to ISK 51.60 (USD 0.50).  At that point, the ISK 51.60 share will be exchanged for one USD 0.50 share.  Following completion of the transfer to shareholders and issue of shares pursuant to the above, Össur hf.’s own shares will be exchanged for shares of USD 0.50.	?
The Board of Directors will be entrusted with the implementation of the above decisions at the earliest opportunity.  The Board is authorised, inter alia, to decide and announce that following a certain date notices of trades in Össur hf. stock in Icelandic krónur will not be accepted, and, as applicable, to decide and announce that notices of trades in Össur hf. stock will not be accepted for a certain period of time during the implementation of the above decisions.

The decision was approved unanimously. According to the Articles of Association of the Company, a decision to amend the Articles of Association is valid only if it has the support of at least 2/3 of the cast votes and the support of shareholders controlling at least 2/3 of the share capital represented at the meeting.  The Chairman of the meeting ruled that the motion had received the required number of votes and was therefore carried.


There was no other lawfully submitted business .


The Chairman and Secretary of the meeting were instructed to finalise the minutes of the meeting.


Mr. Gunnar Stefánsson thanked those present for their attendance and adjourned the meeting at 3 p.m