OssDsign

REG

The board of directors has decided, pursuant to Chapter 7, Section 4, Paragraph 2 of the Swedish Companies Act and the company’s articles of association, to apply the possibility of proxy collection in conjunction with the general meeting (se section Proxy collection below for more information).

Notice

Shareholders wishing to participate at the meeting must:

(i)         be entered in the shareholders’ register, kept by Euroclear Sweden AB (the Swedish Central Securities Depository & Clearing Organisation), on the record day which is Friday 14 June 2024; and

(ii)        notify the company of their attendance and any assistant no later than Tuesday 18 June 2024. Notification can be made in writing to Setterwalls Advokatbyrå AB, Attn: Magnus Melin, P.O. Box 1050, SE-101 39 Stockholm, Sweden or by e-mail to magnus.melin@setterwalls.se.

Notification shall include full name, personal identification number or corporate registration number, address, daytime telephone number and, if appropriate, information about representative, proxy, and assistants. The number of assistants may not be more than two. To facilitate entry to the meeting, notification should, where appropriate, be accompanied by powers of attorney, registration certificates and other documents of authority.

Nominee registered shares

To be entitled to participate and vote at the meeting, shareholders who have their shares registered in the name of a nominee must have their shares registered in their own name, so that the shareholder will be included in the transcription of the share register as of Friday 14 June 2024. Such registration may be temporary (so-called voting rights registration) and is requested to the nominee in accordance with the nominee's routines at such time in advance as the nominee determines. Voting rights registrations made by the nominee no later than Tuesday 18 June 2024 will be taken into account in the preparation of the share register.

Proxy voting

A shareholder represented by proxy shall issue a power of attorney which shall be dated and signed by the shareholder. If issued by a legal entity, the power of attorney shall be accompanied by registration certificate or, if not applicable, equivalent documents of authority. Power of attorney forms for those shareholders wishing to participate by proxy will be available on the company’s website www.ossdsign.com. The original version of the power of attorney shall also be presented at the meeting.

Proxy collection

The board of directors has decided, pursuant to Chapter 7, Section 4, Paragraph 2 of the Swedish Companies Act and the company’s articles of association, to apply the possibility of proxy collection in conjunction with the general meeting. This means that shareholders who do not wish to participate in person at the meeting can submit a power of attorney to a representative appointed by the company, who participates in the meeting on behalf of the shareholder and votes in accordance with the shareholder's instructions. The representative appointed by the company may not be a member of the board of directors or the CEO of the company. Shareholders who wish to make use of this opportunity must complete and sign a special power of attorney form which will be available on the company's website, www.ossdsign.com. If issued by a legal entity, the power of attorney shall be accompanied by registration certificate or, if not applicable, equivalent documents of authority.

Processing of personal data

For information regarding how your personal data is processed in connection with the annual general meeting, please refer to the privacy policy on Euroclear Sweden AB’s website, https://www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf.

Proposed agenda

1.         Opening of the meeting and election of chairman of the meeting;

2. Preparation and approval of the voting list;
3. Approval of the agenda;
4. Election of one or two persons who shall approve the minutes of the meeting;
5. Determination of whether the meeting has been duly convened;
6. Submission of the annual report and the auditor’s report as well as of the consolidated financial statements and the auditor’s report on the group;
7. Resolution in respect of adoption of the profit and loss statement and the balance sheet as well as of the consolidated profit and loss statement and the consolidated balance sheet;
8. Resolution in respect of allocation of the company’s result according to the adopted balance sheet;   
9. Resolution in respect of the members of the board of directors’ and the CEO’s discharge from liability;
10. Determination of the number of members of the board of directors as well as of the number of auditors;
11. Determination of the fees payable to the members of the board of directors and the auditors;
12. Election of members of the board of directors and auditors;
13. Resolution on implementation of (a) an employee option program for employees and contractors and (b) a directed issue of warrants and approval of transfer of warrants;
14. Resolution on an authorization for the board of directors to increase the share capital;
15. Resolution on implementation of (a) an employee option program for board members and (b) a directed issue of warrants and approval of transfer of warrants;
16. Closing of the meeting.

The nomination committee's proposed resolutions

The nomination committee is composed of the chairman of the board of directors of the company (i.e. Simon Cartmell), Viktor Drvota (appointed by Karolinska Development AB and elected chairman of the nomination committee), Emanuel Eriksson (appointed by FSG Fund) and Stefan Hansson (appointed by TAMT AB). The nomination committee has presented the following proposed resolutions in relation to items 1 and 10-12 in the proposed agenda. The nomination committee has found no reason to present any proposal for the amendment of the principles for the appointment of and instructions concerning a nomination committee, adopted at the extraordinary general meeting held on 7 March 2019 and applicable until otherwise decided by the general meeting.

Item 1. Election of chairman

Axel Helle (lawyer at Setterwalls Advokatbyrå AB) is proposed as chairman of the meeting. 

Items 10-12. Election of and remuneration to the board of directors and auditors

The board of directors today consists of the following six (6) ordinary members without deputy members: Simon Cartmell (chairman), Anders Qvarnström, Håkan Engqvist, Newton Aguiar, Viktor Drvota and Jill Schiaparelli. It is proposed that the board of directors shall continue to consist of six (6) ordinary members without deputy members until the end of the next annual general meeting. Furthermore, it is proposed that a registered accounting firm shall be elected as auditor. 

It is proposed that the fees payable to the board of directors for the period until the end of the next annual general meeting shall amount to a total of SEK 1,500,000 out of which SEK 400,000 shall be paid to the chairman, SEK 300,000 shall be paid to each of Newton Aguiar, Anders Qvarnstrom and Jill Schiaparelli and SEK 200,000 shall be paid to Håkan Engqvist. No fees are proposed to be paid to Viktor Drvota who represents an institutional investor.

It is proposed that the company’s auditor shall be paid in accordance with approved invoices.

All current board members are proposed to be re-elected until the end of the next annual general meeting. Furthermore, Simon Cartmell is proposed to be re-elected as chairman of the board of directors.

The accounting firm Ernst & Young Aktiebolag is proposed to be re-elected as auditor. The accounting firm has informed the company that Oskar Wall will remain principally responsible auditor.

Information regarding all proposed board members’ principal education and work experience, any work performed for the company and any other significant professional commitments etc. is kept available on the company’s website at www.ossdsign.com.

The board of directors' proposed resolutions

The board of directors of the company has presented the following proposed resolutions in relation to items 8 and 13-14 in the proposed agenda. 

Item 8. Allocation of the company’s result

The board of directors proposes that the company’s result shall be carried forward in new account and that no dividend shall be paid for the financial year 2023.

Item 13. Resolution on implementation of (a) an employee option program for employees and contractors and (b) a directed issue of warrants and approval of transfer of warrants

The board of directors proposes that the annual general meeting resolves on (A) implementation of an employee option program for employees and contractors (“Employee Option Program 2024/2027:1”) as set forth in item A below and (B) a directed issue of warrants and approval of transfer of warrants as set forth in item B below. Board members of the company will not be allowed to participate.

The rationale for the incentive programme

The board of directors is of the opinion that share related incentive programmes strengthens the retention of those participating and motivates them to create shareholder value. The board of directors assess that these objectives are in line with all shareholders’ interests.

As of today, there are two different share related incentive programmes for employees and contractors consisting of two warrant programmes from 2021 and 2022, expiring in 2024 and 2025, respectively. Please refer to “Existing share related incentive programmes” below for more information.   

This proposal has been presented to enable new-recruits the possibility to participate in a share related incentive programme and, as regards persons already participating in existing share related incentive programmes, as a replacement to Warrant Programme 2021/2024:1 in view of the share price development and the board of directors’ assessment that the share related incentive programme from 2021 may not fulfil its purpose and may thus not entail any dilution for existing shareholders (please also refer to section “Conditions for participation” below).

In order to secure the company’s undertakings under Employee Option Program 2024/2027:1, the board of directors also proposes that the annual general meeting resolves on a directed issue of warrants and an approval of transfer of warrants in accordance with Section B below.

Conditions for participation

Certain of the participants have been allocated warrants in the company, issued within the framework of Warrant programme 2021/2024:1 and/or Warrant programme 2022/2025:1. Participation in Employee Option Program 2024/2027:1 is conditional upon such participants, at the latest upon allocation of options within the Framework of Employee Option Program 2024/2027:1, having sold the warrants allocated within Warrant programme 2021/2024:1 to the company. The purchase price per warrant to be paid by the company shall be the lower of the market value of the warrants and the acquisition cost for the warrants paid by the participants, i.e. no higher than SEK 0.35 per warrant. This applies to a total of 2,511,276 warrants entitling to subscription for 2,511,276 new shares in the company. Warrants sold to the company will not be possible to exercise for subscription of new shares in the company.  

A.           The board of directors’ proposal on implementation of Employee Option Program 2024/2027:1

The board of directors proposes that the annual general meeting resolves to implement Employee Option Program 2024/2027:1 in accordance with the following substantial guidelines:

1. Employee Option Program 2024/2027:1 shall comprise a maximum of 17,460,175 options.

2. Employee options may be granted by the company or a subsidiary in the company’s group (the “Group”).

3. Each option entitles the holder a right to acquire one (1) new share in the company against cash consideration at a subscription price amounting to 120 per cent of the volume weighted average trading price for the company’s share on Nasdaq First North Growth Market during a period of ten (10) trading days before the annual general meeting on 25 June 2024. If no trading price is recorded for a particular trading day within the specified period, such day shall not be taken into account, but the period shall instead be extended forwards in time with the number of succeeding trading days required for the period to comprise ten (10) trading days with a recorded trading price. The subscription price thus calculated shall be rounded off to the nearest whole SEK 0.01, whereupon SEK 0.005 shall be rounded upwards. Notwithstanding the above, if the company’s net sales for any rolling 12-month period ending no later than 30 June 2027 (as per the company’s interim or year-end reports) is SEK 200,000,000 or higher, the subscription price shall instead amount to 112.5 per cent of the volume weighted price referred to above. The same applies if the company’s cash flow from operations for any rolling 3-month period ending no later than 30 June 2027 is positive. If both those targets are met, the subscription price shall instead amount to 105 per cent of the volume weighted price referred to above. For the avoidance of doubt, in the event that the above target(s) are met during any rolling 12-month and 3-month period ending no later than 30 June 2027, respectively, the subscription price shall be adjusted in accordance with the above even if the company’s net sales and/or cash flow from operations after such period decreases below the thresholds. The subscription price may never be below the quotient value of the shares. The subscription price and the number of new shares that each employee stock option confers right to may be subject to recalculation by the corresponding application of the provisions in the complete terms and conditions for the warrants (see below). When acquiring new shares through exercise of the options, the acquisition price for each share and the number of shares each option entitles to acquisition of, shall be recalculated so that the acquisition price shall correspond to the share's quotient value, and the options shall entitle the holder to a recalculated, initially lower, number of shares, as set forth under “Exercise model” below.

4. Employee Option Program 2024/2027:1 shall comprise existing and future employees in and contractors of the Group. Board members of the company will not be allowed to participate. The board determines within the framework of the annual general meeting's decision the number of employee options that each participant receives according to the following principles:

Category	Maximum number of employee options per participant	Maximum number of employee options within the respective category
CEO	7,936,445	7,936,445
CFO	2,645,481	2,645,481
Other senior management and key individuals (around 8 persons)	1,984,111	6,878,249
Total		17,460,175

5. Allotment shall take place as soon as possible and no later than 31 December 2024.  

6. The options shall not constitute securities and shall not be possible to transfer or pledge. However, in the event of death, the rights to vested employee options shall accrue to the beneficiaries of the holder of the options.

7. The employee options shall be allotted without consideration.

8. Allotted and vested options can be exercised from and including the date that falls 3 years after the date of allotment (however at the earliest on 1 July 2027, subject to advancement of the exercise period in accordance with Clause 8 of the Warrant Terms and Conditions (as defined below)) to and including 31 December 2027. Acquisition of new shares may not take place during so-called closed periods according to the EU Market Abuse Regulation (unless the company approves thereto in respect of Participants not covered by the aforementioned rules at the relevant time or with support of applicable exceptions), or otherwise in breach of relevant insider rules and regulations (including the company’s internal guidelines in this respect).

9. Participation in Employee Option Program 2024/2027:1 is conditional upon that such participation can legally take place, and that such participation in the company’s assessment can take place with reasonable administrative costs and financial efforts. The board of directors shall have the right to adapt the terms of Employee Option Program 2024/2027:1 to the extent necessary to enable allotment of employee options to persons in other countries, as far as practicable, on terms and conditions corresponding to those that follow from Employee Option Program 2024/2027:1.

10. The employee options shall be governed by a separate option agreement with the participant. The option agreement will include a so-called vesting structure and other terms and conditions customary for such agreements with some potential differences due to requirements under local law. The vesting period until a share may be acquired may as a general rule not be less than three years. The board of directors shall be responsible for the preparation and management of Employee Option Program 2024/2027:1 in accordance with the above mentioned substantial terms and guidelines.

B.           Proposal to resolve on a directed issue of warrants and approval of transfer of warrants

In order to enable the company’s delivery of shares under the Employee Option Program 2024/2027:1, the board of directors proposes that the annual general meeting resolves on a directed issue of warrants and approval of transfer of warrants. The board of directors thus proposes that the annual general meeting resolves on a directed issue of a warrants in accordance with the following terms and conditions:

1. A maximum of 17,460,175 warrants shall be issued.

2. With deviation from the shareholders’ preferential rights, the warrants may only be subscribed for by the company or a subsidiary in the Group. The reason for the deviation from the shareholders’ preferential rights is that the warrants are issued as part of the implementation of the Employee Option Program 2024/2027:1. The board of directors considers that it is for the benefit of the company and its shareholders that employees and contractors are offered to participate in the Employee Option Program 2024/2027:1.

3. Subscription shall be made no later than 31 July 2024. The board of directors shall be entitled to prolong the subscription period.

4. The company is not to pay any subscription price for the warrants. Any subsidiary subscribing for warrants shall pay a subscription price corresponding to the theoretical market value of the warrants, calculated by an independent valuation agent engaged by the company by use of the Black & Scholes valuation model. The value of the underlying share shall be determined by use of the same period for measurement as used in relation to the establishment of the subscription price for new shares in accordance with item 5 (a) below. Payment is to be made in connection with subscription of warrants and not later than on 31 July 2024. The board of directors shall be entitled to prolong the time period for payment.

5. The warrants and the exercise of the subscription rights are subject to the terms and conditions for the warrants 2024/2027:1, Appendix A to the complete proposal, (the “Warrant Terms and Conditions”). The Warrant Terms and Conditions states among others:

(a)          that each warrant entitles to subscription of one (1) new share in the company against cash consideration at a subscription price amounting to 120 per cent of the volume weighted average trading price for the company’s share on Nasdaq First North Growth Market during a period of ten (10) trading days before the annual general meeting on 25 June 2024. If no trading price is recorded for a particular trading day within the specified period, such day shall not be taken into account, but the period shall instead be extended forwards in time with the number of succeeding trading days required for the period to comprise ten (10) trading days with a recorded trading price. The subscription price thus calculated shall be rounded off to the nearest whole SEK 0.01, whereupon SEK 0.005 shall be rounded upwards. Notwithstanding the above, if the company’s net sales for any rolling 12-month period ending no later than 30 June 2027 (as per the company’s interim or year-end reports) is SEK 200,000,000 or higher, the subscription price shall instead amount to 112.5 per cent of the volume weighted price referred to above. The same applies if the company’s cash flow from operations for any rolling 3-month period ending no later than 30 June 2027 is positive. If both those targets are met, the subscription price shall instead amount to 105 per cent of the volume weighted price referred to above. For the avoidance of doubt, in the event that the above target(s) are met during any rolling 12-month and 3-month period ending no later than 30 June 2027, respectively, the subscription price shall be adjusted in accordance with the above even if the company’s net sales and/or cash flow from operations after such period decreases below the thresholds. The subscription price may never be below the quotient value of the shares. When subscribing for new shares through exercise of the warrants, the subscription price for each share and the number of new shares each warrant entitles subscription of, shall be recalculated so that the subscription price corresponds to the share's quotient value, and the warrants shall entitle the holder to a recalculated, initially lower, number of shares, as set forth under “Exercise model” below;

(b)          that subscription of new shares by virtue of the warrants may be made from and including 1 July 2027 up to and including 31 January 2028;

(c)          that the subscription price and the number of shares that each warrant entitles right to subscribe for are subject to customary recalculation in accordance with Clause 8 of the Warrant Terms and Conditions;

(d)          that the period when the subscription right may be utilized may be brought forward or postponed in accordance with Clause 8 of the Warrant Terms and Conditions; and

(e)          that the shares issued upon utilization of a warrant shall confer right to dividends in accordance with Clause 7 of the Warrant Terms and Conditions.

6. If all warrants are exercised for subscription of new shares, the share capital will increase with SEK 1,091,260.9375. Please also refer to “Exercise model” below for further information regarding the number of shares which may be issued through the exercise model in different scenarios.

7. The chairman of the board of directors, the CEO or a person appointed by the board of directors shall be authorised to make any minor adjustments required to register the resolution with the Swedish Companies Registration Office.

Further, the board of directors proposes that the annual general meeting shall resolve (i) to approve that the company or another company in the Group may transfer warrants to the participants in Employee Option Program 2024/2027:1 (or to a financial intermediary assisting with the delivery of shares to participants in Employee Option Program 2024/2027:1) without consideration in connection with the exercise of employee options in accordance with the terms and conditions under Section A above and (ii) to approve the company’s repurchase of warrants issued within the framework of Warrant programme 2021/2024:1, as set out under “Conditions for participation” above.

Exercise model

As per the date of the notice to the general meeting, the number of shares in the company amounts to 97,658,920.

When acquiring new shares through exercise of the options, the acquisition price for each share and the number of shares each option entitles to acquisition of, shall be recalculated so that the acquisition price shall correspond to the share's quotient value, and the options shall entitle the holder to a recalculated, initially lower, number of shares, in accordance with the separate option agreement to be entered into with the participant and the full terms and conditions applicable to the warrants. However, the options shall not entitle to more than one (1) share per option, subject to possible adjustments in accordance with the separate option agreement to be entered into with the participant and the complete terms and conditions for the warrants.

Assuming an acquisition price per share in the company through the exercise of options of SEK 12, the application of the exercise model would have the following effects in the event that all 17,460,175 options are exercised for acquisition of shares through the exercise model at the below specified market value of the company's shares as calculated pursuant to the exercise model (please note that the below examples are only intended to illustrate the dilution in different scenarios and are not a reflection of any appraised development of the share price):

Market value of the company’s shares (SEK)	Number of new shares (through exercise of all options)	Total dilution
15	3,506,646	3.47%
20	7,005,964	6.69%
25	9,102,046	8.53%

Accounting for the new shares that may be issued under the proposed incentive programme the dilution would only have had a marginal impact on the key figure earnings per share for the full year 2023.

The above calculations regarding dilution and impact on key ratios are subject to recalculation of the options and warrants in accordance with the customary recalculation terms set out in the complete terms and conditions for the warrants.

Costs, etc

There are costs associated with the incentive programme in respect of valuation, consultancy services and costs for registration and practical management of the programme.

The board of directors estimates that Employee Option Program 2024/2027:1 will incur costs for the company partly from an accounting perspective in accordance with IFRS 2 and partly in the form of social security charges. Personnel costs in accordance with IFRS 2 do not affect the company’s cash flow. For participants, social security charges will be expensed in the income statement during the vesting period.

Further information regarding the company’s costs in relation to the proposed incentive programme will be presented in the complete proposal which will be made available no later than three weeks before the meeting

Existing share related incentive programmes

As of today, there are two different share related incentive programmes for employees and contractors consisting of two warrant programmes from 2021 (divided into 2021/2024:1A and 2021/2024:1B) and 2022 (divided into 2022/2025:1A and 2022/2025:1B), expiring in 2024 and 2025, respectively. In addition, there are two share related incentive programmes for board members in the form of warrants issued in 2021, which will expire in 2024 (“Warrants 2021/2024:2” in the table set forth below), and warrants issued in 2022, which will expire in 2025 (“Warrants 2022/2025:2A” and “Warrants 2022/2025:2B” in the table set forth below).    

The table below sets forth the total number of warrants outstanding and held by participants in the respective programmes as of today as well as the number of new shares in the company in the event such warrants were to be exercised.

Programme	Number of warrants	Maximum number of new shares	Price per share	Exercise period
Warrants 2021/2024:1	2,825,185	2,825,185	SEK 11.38	1 July 2024 - 31 December 2024
Warrants 2021/2024:2	799,041	799,041	SEK 11.38	1 July 2024 - 31 December 2024
Warrants 2022/2025:1	1,181,622	1,181,622	SEK 6.79	1 July 2025 - 31 December 2025
Warrants 2022/2025:2	285,371	285,371	SEK 6.79	1 July 2025 - 31 December 2025

If all warrants outstanding and held by participants in the respective programmes as of today were to be exercised, the company’s share capital would increase with SEK 318,201 through the issuance of 5,091,219 new shares (subject to potential recalculations in accordance with applicable terms and conditions), each with a quotient value of SEK 0.0625. This would lead to a dilution corresponding to approximately 4.95 percent of the total share capital and number of shares and votes in the company (calculation based on the share capital and number of shares and votes in the company as of today). The dilution calculation does not take into account potential new shares as a result of the incentive programmes proposed to be adopted at the annual general meeting meaning that the potential dilution may be lower than the aforementioned. The above calculations regarding dilution are further subject to recalculation of the warrants in accordance with the customary recalculation terms set out in the complete terms and conditions for the warrants.

Preparation of the proposal

This proposal has been prepared by the board of directors together with external consultants. The final proposal has been presented by the board of directors.

Majority requirements

The proposed incentive programme is subject to the provisions in Chapter 16 of the Swedish Companies Act (Sw. Aktiebolagslagen (2005:551)), and a valid resolution therefore requires that the proposal is supported by shareholders representing at least nine-tenths (9/10) of the votes cast as well as of all shares represented at the annual general meeting.

Item 14. Resolution on an authorisation for the board of directors to increase the share capital

The board of directors proposes that the annual general meeting resolves on an authorisation for the board of directors to – for the period up to the next annual general meeting, with or without deviation from the shareholders’ preferential rights and at one or more occasions – resolve upon issuance of new shares, warrants and/or convertible debentures. Payment may be made in cash, in kind, through set-off of claims or otherwise be conditional. The company’s share capital may by support of the authorisation be increased by an amount corresponding to not more than twenty (20) per cent of the share capital after such issue(s). Deviation from the shareholders’ preferential rights shall be allowed in situations where a directed issue is deemed more appropriate for the company due to timing, commercial or similar reasons, and in order to enable acquisitions.

The chairman of the board of directors, the CEO or a person appointed by the board of directors shall be authorised to make any minor adjustments required to register the resolution with the Swedish Companies Registration Office. A valid resolution requires that the proposal is supported by shareholders representing at least two-thirds (2/3) of the votes cast as well as of all shares represented at the meeting.

Shareholders' proposed resolutions

Item 15. Resolution on implementation of (a) an employee option program for board members and (b) a directed issue of warrants and approval of transfer of warrants

Certain major shareholders proposes that the annual general meeting resolves on (A) implementation of an employee option program for board members (“Employee Option Program 2024/2027:2”) as set forth in item A below and (B) a directed issue of warrants and approval of transfer of warrants as set forth in item B below. The incentive programme shall encompass five out of the six existing board members in the company. The incentive programme does not encompass Viktor Drvota. Participation in the incentive programme requires election of the board members concerned at the annual general meeting.

The rationale for the incentive programme

This proposal has been presented considering that the company competes for qualified board members in an internationally competitive market. The overall purpose is to align the interests of the members of the board of directors with those of the shareholders and thereby create maximum long-term value adding commitment. The incentive programme is also intended to create a long-term focus on increase in earnings and growth amongst the participants.

As of today, there are two different share related incentive programmes for board members in the form of warrants issued in 2021, which will expire in 2024 (“Warrant programme 2021/2024:2”) and warrants issued in 2022, which will expire in 2025 (“Warrant programme 2022/2025:2”). Please refer to “Existing share related incentive programmes” in the board of directors’ proposal on implementation of an employee option programme for employees and contractors for more information.

This proposal has been presented as a replacement to Warrant Programme 2021/2024:2 in view of the share price development and the assessment that Warrant programme 2021/2024:2 may not fulfil its purpose and may not entail any dilution for existing shareholders (please also refer to section “Conditions for participation” below).

In order to secure the company’s undertakings under Employee Option Program 2024/2027:2, it is also proposed that the annual general meeting resolves on a directed issue of warrants and an approval of transfer of warrants in accordance with Section B below.

Conditions for participation

The participants have been allocated warrants in the company, issued within the framework of Warrant programme 2021/2024:2 and/or Warrant programme 2022/2025:2. Participation in Employee Option Program 2024/2027:2 is conditional upon such participants, at the latest upon allocation of options within the Framework of Employee Option Program 2024/2027:2, having sold the warrants allocated within Warrant programme 2021/2024:2 to the company. The purchase price per warrant to be paid by the company shall be the lower of the market value of the warrants and the acquisition cost for the warrants paid by the participants, i.e. no higher than SEK 0.35 per warrant. This applies to a total of 799,041 warrants entitling to subscription for 799,041 new shares in the company. Warrants sold to the company will not be possible to exercise for subscription of new shares in the company.  

A.           Proposal on implementation of Employee Option Program 2024/2027:2

The board of directors proposes that the annual general meeting resolves to implement Employee Option Program 2024/2027:2 in accordance with the following substantial guidelines:

11. Employee Option Program 2024/2027:2 shall comprise a maximum of 3,703,671 options.

12. Employee options may be granted by the company or a subsidiary in the company’s group (the “Group”).

13. Each option entitles the holder a right to acquire one (1) new share in the company against cash consideration at a subscription price amounting to 120 per cent of the volume weighted average trading price for the company’s share on Nasdaq First North Growth Market during a period of ten (10) trading days before the annual general meeting on 25 June 2024. If no trading price is recorded for a particular trading day within the specified period, such day shall not be taken into account, but the period shall instead be extended forwards in time with the number of succeeding trading days required for the period to comprise ten (10) trading days with a recorded trading price. The subscription price thus calculated shall be rounded off to the nearest whole SEK 0.01, whereupon SEK 0.005 shall be rounded upwards. Notwithstanding the above, if the company’s net sales for any rolling 12-month period ending no later than 30 June 2027 (as per the company’s interim or year-end reports) is SEK 200,000,000 or higher, the subscription price shall instead amount to 112.5 per cent of the volume weighted price referred to above. The same applies if the company’s cash flow from operations for any rolling 3-month period ending no later than 30 June 2027 is positive. If both those targets are met, the subscription price shall instead amount to 105 per cent of the volume weighted price referred to above. For the avoidance of doubt, in the event that the above target(s) are met during any rolling 12-month and 3-month period ending no later than 30 June 2027, respectively, the subscription price shall be adjusted in accordance with the above even if the company’s net sales and/or cash flow from operations after such period decreases below the thresholds. The subscription price may never be below the quotient value of the shares. The subscription price and the number of new shares that each employee stock option confers right to may be subject to recalculation by the corresponding application of the provisions in the complete terms and conditions for the warrants (see below). When acquiring new shares through exercise of the options, the acquisition price for each share and the number of shares each option entitles to acquisition of, shall be recalculated so that the acquisition price shall correspond to the share's quotient value, and the options shall entitle the holder to a recalculated, initially lower, number of shares, as set forth under “Exercise model” below.

14. The participants may be allocated options as set forth below. No participant may be offered a higher number of options than the maximum allocation set forth below. A Participant can choose to acquire a lower but not a higher number of options than offered to the participant.

Category	Maximum number of employee options per participant	Maximum number of employee options within the respective category
Chairman of the board of directors	1,190,466	1,190,466
Other board members incl. potential new board member (5 persons)	793,644	2,513,205
Total		3,703,671

15. Allotment shall take place as soon as possible and no later than 31 December 2024. 

16. The options shall not constitute securities and shall not be possible to transfer or pledge. However, in the event of death, the rights to vested employee options shall accrue to the beneficiaries of the holder of the options.

17. The employee options shall be allotted without consideration.

18. Allotted and vested options can be exercised from and including the date that falls 3 years after the date of allotment (however at the earliest on 1 July 2027, subject to advancement of the exercise period in accordance with Clause 8 of the Warrant Terms and Conditions (as defined below)) to and including 31 December 2027. Acquisition of new shares may not take place during so-called closed periods according to the EU Market Abuse Regulation (unless the company approves thereto in respect of participants not covered by the aforementioned rules at the relevant time or with support of applicable exceptions), or otherwise in breach of relevant insider rules and regulations (including the company’s internal guidelines in this respect).

19. Participation in Employee Option Program 2024/2027:2 is conditional upon that such participation can legally take place, and that such participation in the company’s assessment can take place with reasonable administrative costs and financial efforts. The company shall have the right to adapt the terms of Employee Option Program 2024/2027:2 to the extent necessary to enable allotment of employee options to persons in other countries, as far as practicable, on terms and conditions corresponding to those that follow from Employee Option Program 2024/2027:2.

20. The employee options shall be governed by a separate option agreement with the participant. The option agreement will include a so-called vesting structure and other terms and conditions customary for such agreements with some potential differences due to requirements under local law. The vesting period until a share may be acquired may as a general rule not be less than three years. The company shall be responsible for the preparation and management of Employee Option Program 2024/2027:2 in accordance with the above mentioned substantial terms and guidelines.

B.           Proposal to resolve on a directed issue of warrants and approval of transfer of warrants

In order to enable the company’s delivery of shares under the Employee Option Program 2024/2027:2, it is proposed that the annual general meeting resolves on a directed issue of warrants and approval of transfer of warrants. It is thus proposed that the annual general meeting resolves on a directed issue of a warrants in accordance with the following terms and conditions:

8. A maximum of 3,703,671 warrants shall be issued.

9. With deviation from the shareholders’ preferential rights, the warrants may only be subscribed for by the company or a subsidiary in the Group. The reason for the deviation from the shareholders’ preferential rights is that the warrants are issued as part of the implementation of the Employee Option Program 2024/2027:2. It is therefore considered that it is for the benefit of the company and its shareholders that board members are offered to participate in the Employee Option Program 2024/2027:2.

10. Subscription shall be made no later than 31 July 2024. The board of directors shall be entitled to prolong the subscription period.

11. The company is not to pay any subscription price for the warrants. Any subsidiary subscribing for warrants shall pay a subscription price corresponding to the theoretical market value of the warrants, calculated by an independent valuation agent engaged by the company by use of the Black & Scholes valuation model. The value of the underlying share shall be determined by use of the same period for measurement as used in relation to the establishment of the subscription price for new shares in accordance with item 5 (a) below. Payment is to be made in connection with subscription of warrants and not later than on 31 July 2024. The board of directors shall be entitled to prolong the time period for payment.

12. The warrants and the exercise of the subscription rights are subject to the terms and conditions for the warrants 2024/2027:2, Appendix A to the complete proposal, (the “Warrant Terms and Conditions”). The Warrant Terms and Conditions states among others:

(a)          that each warrant entitles to subscription of one (1) new share in the company against cash consideration at a subscription price amounting to 120 per cent of the volume weighted average trading price for the company’s share on Nasdaq First North Growth Market during a period of ten (10) trading days before the annual general meeting on 25 June 2024. If no trading price is recorded for a particular trading day within the specified period, such day shall not be taken into account, but the period shall instead be extended forwards in time with the number of succeeding trading days required for the period to comprise ten (10) trading days with a recorded trading price. The subscription price thus calculated shall be rounded off to the nearest whole SEK 0.01, whereupon SEK 0.005 shall be rounded upwards. Notwithstanding the above, if the company’s net sales for any rolling 12-month period ending no later than 30 June 2027 (as per the company’s interim or year-end reports) is SEK 200,000,000 or higher, the subscription price shall instead amount to 112.5 per cent of the volume weighted price referred to above. The same applies if the company’s cash flow from operations for any rolling 3-month period ending no later than 30 June 2027 is positive. If both those targets are met, the subscription price shall instead amount to 105 per cent of the volume weighted price referred to above. For the avoidance of doubt, in the event that the above target(s) are met during any rolling 12-month and 3-month period ending no later than 30 June 2027, respectively, the subscription price shall be adjusted in accordance with the above even if the company’s net sales and/or cash flow from operations after such period decreases below the thresholds. The subscription price may never be below the quotient value of the shares. When subscribing for new shares through exercise of the warrants, the subscription price for each share and the number of new shares each warrant entitles subscription of, shall be recalculated so that the subscription price corresponds to the share's quotient value, and the warrants shall entitle the holder to a recalculated, initially lower, number of shares, as set forth under “Exercise model” below;

(b)          that subscription of new shares by virtue of the warrants may be made from and including 1 July 2027 up to and including 31 January 2028;

(c)          that the subscription price and the number of shares that each warrant entitles right to subscribe for are subject to customary recalculation in accordance with Clause 8 of the Warrant Terms and Conditions;

(d)          that the period when the subscription right may be utilized may be brought forward or postponed in accordance with Clause 8 of the Warrant Terms and Conditions; and

(e)          that the shares issued upon utilization of a warrant shall confer right to dividends in accordance with Clause 7 of the Warrant Terms and Conditions.

13. If all warrants are exercised for subscription of new shares, the share capital will increase with SEK 231,479.4375. Please also refer to “Exercise model” below for further information regarding the number of shares which may be issued through the exercise model in different scenarios.

14. The chairman of the board of directors, the CEO or a person appointed by the board of directors shall be authorised to make any minor adjustments required to register the resolution with the Swedish Companies Registration Office.

Further, it is proposed that the annual general meeting shall resolve (i) to approve that the company or another company in the Group may transfer warrants to the participants in Employee Option Program 2024/2027:2 (or to a financial intermediary assisting with the delivery of shares to participants in Employee Option Program 2024/2027:2) without consideration in connection with the exercise of employee options in accordance with the terms and conditions under Section A above and (ii) to approve the company’s repurchase of warrants issued within the framework of Warrant programme 2021/2024:2, as set out under “Conditions for participation” above.

Exercise model

As per the date of the notice to the general meeting, the number of shares in the company amounts to 97,658,920.

When acquiring new shares through exercise of the options, the acquisition price for each share and the number of shares each option entitles to acquisition of, shall be recalculated so that the acquisition price shall correspond to the share's quotient value, and the options shall entitle the holder to a recalculated, initially lower, number of shares, in accordance with the separate option agreement to be entered into with the participant and the full terms and conditions applicable to the warrants. However, the options shall not entitle to more than one (1) share per option, subject to possible adjustments in accordance with the separate option agreement to be entered into with the participant and the complete terms and conditions for the warrants.

Assuming an acquisition price per share in the company through the exercise of options of SEK 12, the application of the exercise model would have the following effects in the event that all 3,703,671 options are exercised for acquisition of shares through the exercise model at the below specified market value of the company's shares as calculated pursuant to the exercise model (please note that the below examples are only intended to illustrate the dilution in different scenarios and are not a reflection of any appraised development of the share price):

Market value of the company’s shares (SEK)	Number of new shares (through exercise of all options)	Total dilution
15	743,834	0.76%
20	1,486,113	1.50%
25	1,930,736	1,94%

Accounting for the new shares that may be issued under the proposed incentive programme the dilution would only have had a marginal impact on the key figure earnings per share for the full year 2023.

The above calculations regarding dilution and impact on key ratios are subject to recalculation of the options and warrants in accordance with the customary recalculation terms set out in the complete terms and conditions for the warrants.

Costs, etc

There are costs associated with the incentive programme in respect of valuation, consultancy services and costs for registration and practical management of the programme.

The board of directors estimates that Employee Option Program 2024/2027:2 will incur costs for the company partly from an accounting perspective in accordance with IFRS 2 and partly in the form of social security charges. Personnel costs in accordance with IFRS 2 do not affect the company’s cash flow. For participants, social security charges will be expensed in the income statement during the vesting period.

Further information regarding the company’s costs in relation to the proposed incentive programme will be presented in the complete proposal which will be made available no later than three weeks before the meeting.

Existing share related incentive programmes

As of today, there are two different share related incentive programmes for employees and contractors consisting of two warrant programmes from 2021 (divided into 2021/2024:1A and 2021/2024:1B) and 2022 (divided into 2022/2025:1A and 2022/2025:1B), expiring in 2024 and 2025, respectively. In addition, there are two share related incentive programmes for board members in the form of warrants issued in 2021, which will expire in 2024 (Warrant programme 2021/2024:2), and warrants issued in 2022, which will expire in 2025 (Warrant programme 2022/2025:2, divided into 2022/2025:2A and 2022/2025:2B). Please refer to “Existing share related incentive programmes” in the board of directors’ proposal on implementation of an employee option program for employees and contractors for more information.

Preparation of the proposal

This proposal has been prepared by certain major shareholders together with external consultants. The final proposal has been presented by said shareholders.

Majority requirements

The proposed incentive programme is subject to the provisions in Chapter 16 of the Swedish Companies Act (Sw. Aktiebolagslagen (2005:551)), and a valid resolution therefore requires that the proposal is supported by shareholders representing at least nine-tenths (9/10) of the votes cast as well as of all shares represented at the annual general meeting.

Number of shares and votes in the company

The total number of shares and votes in the company at the time of issuance of this notice is 97,658,920. The company does not hold any of its own shares.

Shareholders’ right to request information

Pursuant to Chapter 7 section 32 of the Swedish Companies Act (Sw. aktiebolagslagen (205:551)) the board of directors and the CEO are under a duty to, if any shareholder so request and the board of directors deems that it can be made without material damage to the company, at the meeting provide information, regarding circumstances, which may affect the assessment of a matter on the agenda or of the company’s economic situation. Such duty to provide information also comprises the company’s relation to the other group companies, the consolidated financial statements and such circumstances regarding subsidiaries which are set out in the foregoing sentence.

Documentation

The financial accounts, auditor’s report, complete proposals (as set out above) and other documents to be dealt with at the general meeting will be kept available at the company’s office not later than three weeks before the meeting. The documents will be sent free of charge to shareholders who so request and state their postal address. The documents will also be made available not later than the aforementioned date on the company’s website www.ossdsign.com. The above-mentioned documents will also be presented at the general meeting.

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Stockholm, May 2024

The board of directors