Notice of Extraordinary General Meeting of Hansa Medical AB (publ)

The shareholders of Hansa Medical AB (publ) are summoned to attend the
Extraordinary General Meeting on 21 November 2016, at 10:30 am CET at Hansa
Medical’s offices on Scheelevägen 22, Lund, Sweden.
The shareholders of Hansa Medical AB (publ) are hereby summoned to attend the
Extraordinary General Meeting (“EGM”) on 21 November 2016, at 10:30 am CET at
Hansa Medical’s offices on Scheelevägen 22, Lund, Sweden. Registration starts at
10:00 am CET and will be possible until the meeting starts.

Right to participate
Those who have been recorded as shareholders in the share register kept by
Euroclear Sweden AB as per 15 November 2016, and who, no later than on 15
November 2016 at 12.00 pm CET, have given notice to the company of their intent
to participate at the EGM, shall have the right to participate at the EGM.
Notice to participate shall be made in writing to the address Hansa Medical AB
(publ), Box 785, SE-220 07 Lund, Sweden or by e-mail to
annika.nielsen@hansamedical.com. The notice shall contain the shareholder’s
name, personal identity number or registration number and daytime telephone
number and, where applicable, the number of advisors (maximum two). After giving
notice of participation the shareholder will receive a confirmation. If no
confirmation is received, notice has not been duly given.

A shareholder whose shares are nominee-registered must temporarily register
his/her shares in his/her own name in the share register kept by Euroclear
Sweden AB in order to be entitled to participate in the EGM. Such registration
must be effected no later than on 15 November 2016 and should be requested with
the nominee well in advance.

Proxy
If a shareholder wishes to be represented by proxy, a power of attorney shall be
issued to the proxy. The power of attorney shall be made in writing, dated and
duly signed by the shareholder. If the shareholder is a legal entity, a copy of
the registration certificate or, if no such document exists, equivalent
documentation shall be included with the notification. The documentation shall
certify the right for the person that has signed the power of attorney to
appoint a proxy for the legal entity. To facilitate registration at the EGM, the
power of attorney shall be provided in original as well as the registration
certificate and other documents of authority shall be provided to the company
before 12.00 pm CET on 15 November 2016. If the power of attorney and the other
authorization documents have not been submitted in advance, the power of
attorney in original form and other authorization documents must be presented at
the EGM. Power of attorney forms are available at the company and on the
company’s website, www.hansamedical.com, and will be sent upon request to any
shareholder who states their postal address.

Proposal of agenda

0)     Opening of the meeting

1)     Election of chairman of the meeting

2)     Preparation and approval of the voting register

3)    Approval of the agenda

4)     Election of one or two persons to attest the minutes

5)     Determination as to whether the meeting has been duly convened

6)     The board of directors’ proposal for a resolution on a directed issue of
ordinary shares

7)     The board of directors’ proposal to adopt a long-term incentive programme
(performance share programme) for employees of Hansa Medical

8)    Closing of the meeting

Proposals

The board of directors’ proposal for a resolution on a directed issue of
ordinary shares (item 6)

The board of directors proposes that the general meeting resolves to carry out a
directed issue of not more than 2,642,857 new ordinary shares, entailing an
increase in the share capital of not more than SEK 2,642,857. The right to
subscribe for the new ordinary shares in the directed issue shall, with
deviation from the shareholders’ pre-emption rights, be granted certain selected
strategic and institutional investors. The reason for the deviation from the
shareholders’ pre-emption rights is that the company shall, in a timely manner,
be able to secure the capital need for the company’s operations, as well as to
broaden the ownership structure of the company with strategic and institutional
investors.

The subscription price per ordinary share shall be SEK 70. The basis for the
subscription price has been determined through a so-called private placement
procedure. Subscription for the newly issued ordinary shares shall take place no
later than on 24 November 2016. Subscription shall be made on a separate
subscription list. Payment for the ordinary shares subscribed shall be made no
later than on 24 November 2016. The new ordinary shares shall entitle to
dividends from and including the first record day for dividends following the
registration of the issue. The board shall be entitled to extend the
subscription period. The board shall be entitled to delay the date of payment.
The board of directors, or any person appointed by the board of directors, shall
have the right to make any adjustments or amendments of the above resolutions
which may be required in connection with the registration of such resolutions
and to take any other measure deemed necessary for the execution of the
resolutions.

The board of directors’ proposal to adopt a long-term incentive programme
(performance share programme) for employees of Hansa Medical (item 7)
The board of directors proposes that the general meeting resolves to adopt a
long-term incentive programme in the form of a performance based share programme
for employees of the Hansa Medical group in accordance with item 7(i) below.
Further, the resolution in accordance with item 7(i) shall be conditional upon
that the general meeting resolves to adopt the hedging arrangements in
connection with the incentive programme, either in accordance with the board of
directors’ proposal under item 7(ii) below, or in accordance with the board of
directors’ proposal under item 7(iii) below.

Adoption of an incentive programme (item 7(i))

Summary of the programme
The board of directors proposes that the general meeting resolves to adopt a
long-term incentive programme (“LTIP 2016”). LTIP 2016 is proposed to include
all employees of the group, whereby not more than 30 individuals within the
Hansa Medical group may participate. The participants will be granted the
opportunity to receive ordinary shares, free of charge, in accordance with LTIP
2016, so called “Performance Shares” in accordance with the terms and conditions
set out below.

The company will under LTIP 2016 grant participants the right to Performance
Shares, meaning the right to obtain one Performance Share free of charge
(“Rights”), provided that certain conditions are fulfilled.

Terms and conditions
A Right may be exercised provided that the participant, with certain exceptions,
from the date of the start of LTIP 2016 for each participant, up until and
including the date three years thereafter (the “Vesting Period”), maintains its
employment within the Hansa Medical group. The latest possible start date for
participation in LTIP 2016 shall be the date before Hansa Medical’s annual
general meeting 2017.

In addition to the requirement for the participant’s maintained employment in
accordance with the above, a certain shareholder return condition, based on the
so-called total shareholder return of the Hansa Medical share is stipulated. A
participant’s Rights entitle to Performance Shares if the total shareholder
return (the return to shareholders through an increased share price and
reinvestments of any dividends during the Vesting Period) on the company’s
ordinary shares exceeds the below percentage rates during the Vesting Period.

The performance condition is set at a “minimum level” and “maximum level”, where
the number of Rights which may result in the granting of Performance Shares is
increased lineally between the minimum level and maximum level. However, in
order for the Rights to entitle to the granting of Performance Shares, the
minimum level has to be reached or exceeded. If the specified minimum level of
the performance condition is achieved, 25 per cent of each participant’s Rights
will entitle to Performance Shares. If the maximum level is reached, 100
per cent of each participant’s Rights will entitle to Performance Shares.

During the Vesting Period, the minimum level, for each participant, shall be a
25 per cent shareholder return condition and the maximum level shall be a 100
per cent shareholder return condition.

The Rights
The Rights shall, in addition to what is set out above, be governed by the
following terms and conditions:

  · Rights are granted free of charge no later than the day before the annual
general meeting 2017.
  · Rights vest during the Vesting Period.
  · Rights may not be transferred or pledged.
  · Each Right entitles the participant to receive one Performance Share free of
charge after the end of the Vesting Period (with certain exceptions where the
Vesting Period may be accelerated) if the participant, with certain exceptions,
have maintained its employment within the Hansa Medical group by the end of the
Vesting Period.
  · In order to align the participants’ and the shareholders’ interests, the
company will compensate the participants for any dividends paid by increasing
the number of Performance Shares that each Right entitles to at the end of the
Vesting Period.

Preparation and administration
The board of directors, or a committee established by the board of directors for
these purposes, shall be responsible for preparing the detailed terms and
conditions of LTIP 2016 in accordance with the above terms and conditions,
including provisions on recalculation in the event of a bonus issue, split,
rights issue and / or other similar events during the Vesting Period. In
connection therewith, the board of directors shall be entitled to make
adjustments to meet foreign regulations or market conditions. The board of
directors may also make other adjustments if significant changes in the Hansa
Medical group or its environment would result in a situation where the adopted
terms and conditions of LTIP 2016 no longer serve their purpose.

Allocation
The participants are divided into different categories and in accordance with
the above, LTIP 2016 will comprise the following Rights to be allocated to
participants of the different categories:

  · the CEO: may be allocated a maximum of 55,000 Rights, entitling the holder
to allotment of not more than one (1) Performance Share for each Right;
  · management (up to 7 individuals): the participants within this category may,
in total, be allocated a maximum of 160,000 Rights. However, each participant
may, as a maximum, be allocated 40,000 Rights per person, entitling the holder
to allotment of not more than one (1) Performance Share for each Right; and
  · other employees (up to 22 individuals): the participants within this
category may, in total, be allocated a maximum of 90,000 Rights. However, each
participant may, as a maximum, be allocated 10,000 Rights per person, entitling
the holder to allotment of not more than one (1) Performance Share for each
Right.

Allotment of Performance Shares under LTIP 2016 and hedging arrangements
The board of directors has considered different methods for transfer of ordinary
shares under LTIP 2016, in order to implement the programme in a cost-effective
and flexible manner. The board of directors has found the most cost-effective
alternative to be, and thus proposes that the general meeting as a main
alternative, resolves (a) to authorise the board of directors to resolve on a
directed issue of not more than 401,000 Class C shares to the participating
bank, of which not more than 96,000 Class C shares may be issued to secure
social charges arising as a result of LTIP 2016, and (b) to authorise the board
of directors to resolve on the repurchase of all issued Class C shares, in
accordance with item 7(ii) below.

Following conversion to ordinary shares, the shares are intended to both be
transferred to LTIP 2016 participants, as well as transferred in the market in
order to cover the cash flow effects associated with LTIP 2016, primarily social
charges. For this purpose the board of directors proposes that the general
meeting resolves (c) to transfer not more than 305,000 ordinary shares free of
charge to LTIP 2016 participants in accordance with LTIP 2016 and that not more
than 96,000 ordinary shares may be transferred to secure social charges arising
as a result of LTIP 2016.

Should the majority requirement under item 7(ii) below not be met, the board of
directors proposes that Hansa Medical shall be able to enter into an equity swap
agreement with a third party in accordance with item 7(iii) below.

Scope and costs of LTIP 2016
LTIP 2016 will be accounted for in accordance with IFRS 2 which entails that the
Rights shall be recorded as personnel expenses during the Vesting Period. The
costs for LTIP 2016 are estimated to amount to approximately SEK 7.9 million,
excluding social charges, calculated in accordance with IFRS 2 based on the
following assumptions: (i) that 305,000 Rights are allotted; (ii) that the share
price, at the start of LTIP 2016, is SEK 75 per ordinary share; (iii) that the
performance condition is fully met; and (iv) an estimated annual turnover of
personnel of 5 per cent. Based on the same assumption as above, and a social
security tax rate of 31.42 per cent, the costs for social charges are expected
to amount to approximately SEK 12.3 million. Altogether, the IFRS 2 costs and
the social security costs are expected to amount to SEK 6.7 million annually.

If the performance condition is partly met based on a total shareholder return
of 50 per cent, and the assumptions above in all other aspects are valid, the
costs for social charges for LTIP 2016 are expected to amount to approximately
SEK 7.9 million in accordance with IFRS 2. Based on the same assumptions as
above, and a social security tax rate of 31.42 per cent, the costs for social
charges are expected to amount to approximately SEK 4.6 million. Altogether, the
IFRS 2 costs and the social security costs are expected to amount to SEK 4.2
million annually.

Effects on key ratios and dilution
Upon maximum allotment of Performance Shares and provided that the hedging
arrangements in accordance with item 7(ii) below are adopted by the general
meeting, 305,000 ordinary shares will be allotted to participants under LTIP
2016, and 96,000 Class C shares will be used to secure social charges arising as
a result of LTIP 2016, which would entail a dilution effect of approximately
1.21 per cent of the total number of ordinary shares and votes in the company.
The dilution of shares is calculated as the total number of new shares upon full
vesting divided by the total number of shares after full exercise of all
previously issued warrants and full vesting of shares which may be issued as a
result of this proposal. Since there is only one class of shares in the company,
where each share entitles to one vote, the dilution of votes has been calculated
in a corresponding manner.

If the performance condition is partly met based on a total shareholder return
of 50 per cent, and the assumptions above in all other aspects are valid, the
annual costs of LTIP 2016, including social charges, are expected to amount to
approximately SEK 4.2 million, which, on an annual basis, corresponds to
approximately 16.4 per cent of Hansa Medical’s total personnel costs, including
social charges, for the financial year 2015.

The costs are expected to have a limited effect on Hansa Medical’s key ratios.

Hedging arrangements in respect of the programme

Authorization for the board of directors on a directed issue of Class C shares,
authorization to repurchase Class C shares, transfers of own ordinary shares to
participants of the programme and in the market, as well as amendment of the
articles of association (item 7(ii)(a)-(d))

Each resolution under item 7(ii)(a)-(d) are proposed to be conditioned upon the
others and are therefore proposed to be adopted in conjunction.

Authorization for the board of directors to issue Class C shares (item
7(ii)(a))
The board of directors proposes that the general meeting resolves to authorize
the board of directors, during the period until the annual general meeting 2017,
on one or more occasions, to increase the company’s share capital by not more
than SEK 401,000 by the issue of not more than 401,000 Class C shares, each with
a quota value of SEK one (1). With deviation from the shareholders’ preferential
rights, the participating bank shall be entitled to subscribe for the new Class
C shares at a subscription price corresponding to the quota value of the shares.
The purpose of the authorization and the reason for the deviation from the
shareholders’ preferential rights in connection with the issue of shares is to
ensure delivery of shares to employees under the long-term incentive programme,
as well as to secure potential social charges arising as a result of LTIP 2016.

Authorization for the board of directors to resolve to repurchase own Class C
shares (item 7(ii)(b))
The board of directors proposes that the general meeting resolves to authorize
the board of directors, during the period until the annual general meeting 2017,
on one or more occasions, to repurchase Class C shares. The repurchase may only
be effected through an offer directed to all holders of Class C shares and shall
comprise all outstanding Class C shares. Repurchases shall be effected at a
purchase price corresponding to the quota value of the share. Payment for the
acquired Class C shares shall be made in cash. No value transfers have occurred
since the closing date of the annual report for 2015. Taking into account
changes in the restricted equity since the closing date of the annual report for
2015, SEK 179,135,539 remains of the disposable amount pursuant to Chapter 17,
Section 3, first paragraph of the Swedish Companies Act. The purpose of the
proposed repurchase authorization is to ensure delivery of Performance Shares
under LTIP 2016 and to secure possible social charges arising as a result of
LTIP 2016.

Resolution to transfer own ordinary shares (item 7(ii)(c))
The board of directors proposes that the general meeting resolves that Class C
shares that the company acquires based on the authorization to repurchase Class
C shares in accordance with item 7 (ii)(b) above, may, following the
reclassification into ordinary shares, be transferred free of charge to
participants of LTIP 2016 in accordance with the adopted terms and conditions in
order to secure possible social charges arising as a result of LTIP 2016.

The board of directors therefore proposes that the general meeting resolves that
not more than 305,000 ordinary shares may be transferred to participants in
accordance with the terms and conditions of LTIP 2016, and that not more than
96,000 ordinary shares shall be transferred on to Nasdaq Stockholm at a price
within the registered price range at the relevant time, to cover any social
charges in accordance with the terms and conditions of LTIP 2016. The number of
shares to be transferred is subject to recalculation in the event of a bonus
issue, split, rights issue and / or other similar events during the Vesting
Period.

Amendment of the articles of association (item 7(ii)(d))
To facilitate the issue of Class C shares under LTIP 2016, in accordance with
what has been stated above, the board of directors proposes that the general
meeting resolves to amend the articles of association. The proposed amendments
entail, inter alia, that the company introduces a new class of shares, Class C
shares, which includes an amendment of § 5 of the articles of association. In
short, the board of directors’ proposes the following:

-        § 5 is proposed to be amended so that two classes of shares may be
issued, ordinary shares and Class C shares. The ordinary shares shall carry one
vote each and the Class C shares shall carry one tenth of a vote each. Shares of
either class may be issued up to an amount corresponding to the entire share
capital.

-        § 5 is proposed to be amended so that Class C shares are not entitled
to dividends. Upon the company’s liquidation, Class C shares carry equivalent
right to the company’s assets as other shares, however not with an amount
exceeding the quota value of the share.

-        § 5 is proposed to be amended whereby certain preferential rights are
established.

-        § 5 is proposed to be amended so that the company’s board of directors
shall have the right to resolve on a reduction of the share capital through
redemption of all Class C shares, whereby shareholders of Class C shares will be
required to redeem their Class C shares for an amount correspond to the quota
value.

-        § 5 is proposed to be amended so that Class C shares held in treasury
shall, upon a decision by the board of directors, be converted into ordinary
shares.

The board of directors proposes that the company’s existing shares shall be
ordinary shares.

Equity swap agreement with a third party (item 7(iii))
Should the majority requirement under item 7(ii) above not be met, the board of
directors proposes that the general meeting resolves that the expected financial
exposure of LTIP 2016 shall be hedged so that Hansa Medical can enter into an
equity swap agreement with a third party on terms in accordance with market
practice, whereby the third party in its own name shall be entitled to acquire
and transfer ordinary shares of Hansa Medical to the participants.

The rationale for the proposal
The rationale for LTIP 2016 is to create conditions for motivating and retaining
competent employees of the Hansa Medical group as well as for the alignment of
the targets of the employees with those of the shareholders and the company, as
well as to increase the motivation of meeting and exceeding the company’s
financial targets. LTIP 2016 has been designed to include all employees but also
to offer future employees participation in the programme, and the board of
directors considers it to be positive that all employees within the Hansa
Medical group are shareholders in the company.

By offering Rights which are based on the development of the share value, the
participants are rewarded for increased shareholder value. Further, LTIP 2016
rewards employees’ loyalty and thereby the long-term value growth of the
company. Against this background, the board of directors is of the opinion that
the adoption of LTIP 2016 will have a positive effect on the Hansa Medical
group’s future development and thus be beneficial for both the company and its
shareholders.

Preparations of the proposal
The company’s board of directors and its remuneration committee have prepared
LTIP 2016 in consultation with external advisors. LTIP 2016 has been reviewed by
the board of directors at board meetings in October 2016.

Previous incentive programmes in Hansa Medical
For a description of the company’s other long-term incentive programmes, please
see the company’s annual report for 2015, page 60, and the company’s website,
www.hansamedical.com. In addition to the programme there being described, no
other long-term incentive programmes of Hansa Medical exist.

Conditions
The general meeting’s resolution on the implementation of LTIP 2016 according to
item 7(i) above is conditional upon that the general meeting either resolves in
accordance with the board of directors’ proposal under item 7(ii) above or in
accordance with the board of directors' proposal under item 7(iii) above.

Majority requirements
The general meeting’s resolution under item 6 above requires that shareholders
representing not less than two thirds of both the votes cast and of the shares
represented at the meeting approve the resolution. The general meeting’s
resolution under item 7(i) above requires a simple majority among the votes
cast. A valid resolution under item 7(ii) above requires that shareholders
representing not less than nine tenths of both the votes cast and of the shares
represented at the meeting approve the resolution. A valid resolution under item
7(iii) above requires a simple majority among the votes cast.

Other information
When this notice to attend the EGM was issued, the total number of shares and
votes in the company was 32,412,003. The company does not own any treasury
shares. The board of directors’ complete proposal will be available at the
company and on the company’s website www.hansamedical.com, at least three weeks
prior to the EGM. Copies of the documents will be sent upon request to any
shareholder stating his/her postal address. The shareholders are reminded of
their right to require information in accordance with Chapter 7, Section 32 of
the Swedish Companies Act.

This is a non-official translation of the Swedish original wording. In case of
differences between the English translation and the Swedish original, the
Swedish text shall prevail.

Lund, October 2016
Hansa Medical AB (publ)
The Board of Directors