GALMED PHARMACEUTICALS LTD. 8 Shaul Hamelech Blvd., Amot Hamishpat Bldg., Tel Aviv, Israel 64733

You are cordially invited to attend a Special General Meeting of Shareholders of Galmed Pharmaceuticals Ltd. to be held at 12:00 p.m., Israel time, on Monday, December 15, 2014, at the Company s offices at 8 Shaul Hamelech Blvd., Amot Hamishpat Bldg., Tel Aviv, Israel 64733.

You will be asked at this meeting to take action on the matters set forth in the attached Notice of Special General Meeting of Shareholders. The Company s Board of Directors and the Remuneration Committee and Audit Committee thereof are recommending that you vote FOR all of the proposals on the agenda, as specified in the enclosed proxy statement.

At the meeting, a discussion period will be provided for questions and comments of general interest to shareholders.

We look forward to greeting personally those shareholders who are able to be present at the meeting. If you do plan to attend, we ask that you bring with you some form of personal identification and verification of your status as a shareholder as of the close of trading on November 10, 2014, the record date for the meeting. However, whether or not you will be with us at the meeting, it is important that your shares be represented. Accordingly, you are requested to complete, date, sign and mail the enclosed proxy in the envelope provided at your earliest convenience and in any event so as to be received in a timely manner as

discussed in the enclosed Proxy Statement.

Thank you for your cooperation.

Notice is hereby given that a Special General Meeting of the Shareholders (the Meeting ) of Galmed Pharmaceuticals Ltd., an Israeli company (the Company ), will be held at the Company s offices at 8 Shaul Hamelech Blvd., Amot Hamishpat Bldg., Tel Aviv, Israel 64733, on Monday, December 15, 2014 at 12:00 p.m. (Israel time). The agenda for the Meeting is to consider the approval of:

Shareholders of record at the close of trading on the Nasdaq Capital Market on November 10, 2014 (the Record Date ) are entitled to vote at the Meeting. All shareholders are cordially invited to attend the Meeting in person. Two or more shareholders, present in person, by proxy or by proxy card, and holding shares conferring in the aggregate more than thirty-three and a third percent (33.33%) of the voting power of the Company on the Record Date, shall constitute a quorum at the Meeting. Should no quorum be present within half an hour from the time set for the Meeting, the Meeting shall be adjourned to

Thursday December 18, 2014, at the same time and place. No further notice will be given or publicized with respect to such adjourned meeting. If at such adjourned meeting a quorum is not present within half an hour from the time stated for such meeting, any two shareholders present in person, by proxy or by proxy card, shall constitute a quorum, even if, between them, they represent shares conferring 33.33% or less of the voting rights of the Company on the Record Date.

Shareholders who do not expect to attend the Meeting in person are requested to complete, date and sign the enclosed form of proxy card and return it as promptly as possible in the enclosed stamped envelope. No postage is required if mailed within the United States.

Joint holders of shares should take note that, pursuant to Article 64 of the Company s Amended and Restated Articles of Association, the vote of the senior holder who tenders a vote, in person, by proxy or by proxy card, will be accepted to the exclusion of the vote(s) of the other joint holder(s), and for this purpose seniority will be determined by the order in which the names appear in the Company s shareholder register.

8 Shaul Hamelech Blvd., Amot Hamishpat Bldg., Tel Aviv, Israel 64733

The enclosed proxy is being solicited by the board of directors (the Board ) of Galmed Pharmaceuticals Ltd. (the Company or Galmed ) for use at a Special General Meeting of Shareholders (the Meeting ) to be held at the Company s offices at 8 Shaul Hamelech Blvd., Amot Hamishpat Bldg., Tel Aviv, Israel 64733, on Monday, December 15, 2014 at 12:00 p.m. (Israel time), or at any postponement or adjournment thereof.

The record date for determining shareholders entitled to notice of, and to vote at, the Meeting has been established as of the close of trading on the Nasdaq Capital Market on November 10, 2014 (the Record Date ).

As of November 3, 2014 the Company had outstanding 11,100,454 ordinary shares, par value of 0.01 New Israeli Shekels per share (the Ordinary Shares ), each of which is entitled to one vote upon the matters to be presented at the Meeting.

Two or more shareholders, present in person, by proxy or by proxy card, and holding shares conferring in the aggregate more than thirty-three and a third percent (33.33%) of the voting power of the Company on the Record Date, shall constitute a quorum at the Meeting. Should no quorum be present within half an hour from the time set for the Meeting, the Meeting shall be adjourned to December 18, 2014, at the same time and place. No further notice will be given or publicized with respect to such adjourned meeting. If at such adjourned meeting a quorum is not present within half an hour from the time stated for such meeting, any

two shareholders present in person, by proxy or by proxy card, shall constitute a quorum, even if, between them, they represent shares conferring 33.33% or less of the voting rights of the Company on the Record Date.

The proposals set forth in the accompanying Notice of Special General Meeting of Shareholders (the Notice ) to be presented at the Meeting, requires the affirmative vote of the holders of a simple majority of the Ordinary Shares represented at the Meeting in person, by proxy or by proxy card, and voting thereon, provided that: (i) the majority includes at least a majority of the shareholders who are not controlling shareholders and who do not have a personal interest in the matters, and who are present and voting (abstentions are disregarded); and (ii) the non-controlling shareholders or shareholders who do

not have a personal interest in the matters who are present and voting against the election hold 2% or less of the voting power of the Company (such majority, determined in accordance with clause (i) or (ii), shall be referred to hereinafter as a Special Majority ).

In the attached proxy card you will be requested to indicate whether you are a controlling shareholder of the Company or whether you have, or any of the persons or entities described above has, a personal interest , with respect to the matters on the agenda.

If you have not affirmatively indicated on the attached proxy card that you are a controlling shareholder of the Company or that you have, or that any of the persons or entities described above has, a personal interest , your signature on the attached proxy card will certify that you are not a controlling shareholder of the Company and that none of the persons or entities described above, including you, has a personal interest in the matters on the agenda.

To be counted, a duly executed proxy or proxy card must be received by the Company prior to the Meeting. An instrument appointing a proxy shall be in writing in a form approved by the Board and shall be delivered to the Company at its registered offices at 8 Shaul Hamelech Blvd., Amot Hamishpat Bldg., Tel Aviv, Israel 64733, Attention: Director of Operations, or at the offices of the Company s transfer agent, VStock Transfer LLC, at 18 Lafayette Place, Woodmere, New York 11598, not less than four hours before the time scheduled for the Meeting or adjourned meeting or presented to the Chairman of the Meeting at the

Meeting. A proxy card shall be delivered to the Company at its registered offices at 8 Shaul Hamelech Blvd., Amot Hamishpat Bldg., Tel Aviv, Israel 64733, Attention: Director of Operations, or at the offices of the Company s transfer agent at 18 Lafayette Place, Woodmere, New York 11598, by no later than 11:59 p.m., New York time, on the last business day immediately preceding the date of the Meeting or adjourned meeting or presented to the Chairman of the Meeting at the Meeting. Shares represented by proxies and proxy cards received after the times specified above will not be counted as present at the Meeting and thus will not be voted.

Shareholders may revoke the authority granted by their execution of a proxy or a proxy card at any time before the effective exercise thereof by voting in person at the Meeting or by either written notice of such revocation or later-dated proxy or proxy card, in each case delivered either to the Company or to the Company s transfer agent at the addresses stated above, with respect to a proxy, not less than four hours before the time scheduled for the Meeting or adjourned meeting or presented to the Chairman of the Meeting at the Meeting; and with respect to a proxy card, by no later than 11:59 p.m., New York time, on the

last business day immediately preceding the date of the Meeting or adjourned meeting, or presented to the Chairman of the Meeting at the Meeting.

Ordinary Shares represented by executed and unrevoked proxies will be voted in the manner instructed by the executing shareholder, or if no specific instructions are given, will be voted FOR the proposals set forth in the Notice. The Company is not currently aware of any other matters to be presented at the Meeting. If other matters properly come before the Meeting, it is the intention of the persons designated as proxies to vote in accordance with their judgment on such matters.

The following table sets forth certain information, known to the Company as of November 3, 2014, concerning (i) its Office Holders (as defined below) who beneficially own 5% or more of the outstanding Ordinary Shares; and (ii) the number of outstanding Ordinary Shares beneficially owned by members of the Board and other Office Holders of the Company as a group, including Mr. Baharaff and Mr. Hurvitz. The number of Ordinary Shares beneficially owned by each individual or group is based upon information in documents filed with the U.S. Securities and Exchange Commission, other publicly available information or information

otherwise available to the Company. Percentage ownership information is based on 11,100,454 Ordinary Shares issued and outstanding as of November 3, 2014.

Pursuant to the Companies Law, public companies, such as the Company, are required to adopt a compensation policy within nine months following its initial public offering, which sets forth a company policy regarding the terms of office and employment (as defined below) of Office Holders, and following its adoption, any arrangements with respect to the same must generally be consistent with the compensation policy, subject to certain exceptions as prescribed by the Companies Law.

Under the Companies Law, any arrangement with respect to the terms of office and employment of an Office Holder generally requires the approval of a company s remuneration committee of its board of directors and its board of directors (after considering the recommendation of the remuneration committee) and, solely with respect to the company s directors, chief executive officer and controlling shareholder(s) and his or her Relatives who serve as Office Holders, the approval of the company s shareholders by a Special Majority thereof. Notwithstanding, the amendment of existing terms of office and employment of an

Office Holder (other than the company s directors, chief executive officer or controlling shareholder(s) and his or her Relatives who serve as Office Holders) requires only the approval of the company s remuneration committee, so long as such committee determines that the amendment is immaterial as it relates to such existing terms of office and employment.

The term Office Holder as used in this proxy statement is as defined in the Companies Law and includes a general manager (or chief executive officer), executive vice president, vice president, any other person fulfilling or assuming any of the foregoing positions, without regard to such person s title, as well as a director or a manager directly subordinated to the general manager or chief executive officer.

The term terms of office and employment as used in this proxy statement is as defined in the Companies Law and includes any arrangement between a public company and an Office Holder with respect to his or her terms of office and employment, including, without limitation, any exemption or release of the Office Holder from liability for breach of his or her duty of care to the company, an undertaking to indemnify, whether prospective or retrospective, the Office Holder and the purchase of insurance with respect thereto, any grant, payment, remuneration, compensation or other benefit provided in connection with the

employment of or services provided by an Office Holder and the termination thereof or any benefit, other payment or undertaking to provide any such grant or payment.

Under the Companies Law, a compensation policy must be based on certain considerations, include certain provisions and reference certain matters related to the determination of the compensation and other terms of office and employment of Office Holders, each as prescribed by the Companies Law. A compensation policy must be approved by a company s board of directors after considering the recommendations of its remuneration committee. In addition, the compensation policy must be approved by the company s shareholders by a Special Majority.

To the extent a proposed compensation policy is not approved by shareholders, the board of directors of a company may override the resolution of the shareholders (i) following the approval of this matter by the company s remuneration committee for reasons specified in the Companies Law and (ii) after determining that despite the rejection by the shareholders, the adoption of the compensation policy is for the benefit of the company.

A compensation policy that is for a period of more than three years must be approved in accordance with the same procedure set forth herein and in accordance with the Companies Law every three years.

For a description of the terms of office and employment of the Company s Office Holders, including those who are also directors, see the Company s Registration Statement on Form F-1 (File No. 333-193792), initially filed on February 6, 2014 and declared effective on March 12, 2014, as amended (the Registration Statement ), including under the heading Management Employment Agreements and Arrangements with Directors and Related Parties.

Following the approval and recommendation of the Remuneration Committee of the Board (the Remuneration Committee ), the Board approved, and recommends that the shareholders approve, the proposed Compensation Policy in the form attached to this proxy statement as Exhibit A (the Compensation Policy ).

When considering the approval of the proposed Compensation Policy, the Remuneration Committee and the Board considered numerous factors, including, without limitation, the relevant matters and provisions set forth in the Companies Law, and reviewed various data and information the members thereof deemed relevant.

It is proposed that the following resolution be adopted at the Meeting:

RESOLVED, to approve the proposed Compensation Policy in the form attached as Exhibit A to the Company's Proxy Statement for its December 2014 Special General Meeting of Shareholders.

The approval of the above resolution requires approval by a Special Majority.

The Board recommends that the shareholders vote FOR the proposed resolution.

The late Professor Tuvia Gilat, the Company s co-founder served as the chief executive officer of the Company s predecessor, Galmed Holdings Inc., from January 2001 until December 2010, when he left the Company due to severe illness. Prof. Gilat passed away in 2011. On December 18, 2011, the Company reached a final and conclusive settlement (the Settlement Agreement ) of certain claims by Prof. Gilat's beneficiaries under his last will and testament (the Beneficiaries ), including Mr. Allen Baharaff, the Company s current Chief Executive Officer and its controlling

shareholder (as such term is defined in the Companies Law), related to Prof. Gilat s rights and entitlements in connection with his employment with the Company and its predecessor, and the termination thereof, including, without limitation, all social benefit deductions under Israeli law.

According to the Settlement Agreement, the Beneficiaries are to receive, collectively, a special payment equal to the gross amount of $263,200, which was to be paid from the Company s annual net profits, if any, and bears an annual compounding interest rate of the 12-month U.S. dollar LIBOR plus 1%, effective retroactively from October 1, 2011 (the gross amount plus interest, the Settlement Amount ). Pursuant to the Settlement Agreement, the Company agreed not to distribute any dividends to its shareholders until the Settlement Amount is paid in full. For additional information, see Exhibit 10.10 to the

Registration Statement.

As of December 15, 2014, the total Settlement Amount outstanding, including accrued but unpaid interest, payable to the Beneficiaries will be $279,999.

For the reasons detailed below, the Company proposes to accelerate the payment of the Settlement Amount by paying such amount from the Company's existing net capital, as opposed to its net profits, if any, pursuant to the terms of the Agreement by and among the Company, Galmed Medical Research Ltd., and the Beneficiaries, in the form attached to this proxy statement as Exhibit B (the Agreement ).

The Audit Committee of the Board (the Audit Committee ), of which Mr. Baharaff is not a member, and the Board have noted and considered the personal interest of Mr. Baharaff in this matter, and, following the approval and recommendation of the Audit Committee, the Board approved, and recommends that the shareholders approve, the Agreement, including the payment of the Settlement Amount to the Beneficiaries from its current net capital. The Board also resolved that such approval is in the best interest of the Company, for the following reasons:

It is proposed that the following resolution be adopted at the Meeting:

RESOLVED, to approve the Agreement with the Beneficiaries in the form attached as Exhibit B to the Company's Proxy Statement for its December 2014 Special General Meeting of Shareholders, including the payment of the Settlement Amount to the Beneficiaries in the amount of $279,999.

The approval of the above resolution requires approval by a Special Majority.

For the avoidance of doubt, if this proposal is not approved by a Special Majority, the Agreement will not become effective and will be deemed null and void.

The Board recommends that the shareholders vote FOR the proposed resolution.

Other than as set forth above, management knows of no business to be transacted at the Meeting; but, if any other matters are properly presented at the Meeting, Ordinary Shares represented by executed and unrevoked proxies will be voted by the persons named in the enclosed form of proxy upon such matters in accordance with their best judgment.

As a publicly traded company incorporated under the laws of the State of Israel, Galmed Pharmaceuticals Ltd. ( Galmed or the Company ) is subject to the Israeli Companies Law, 5759-1999 (the Companies Law ) which mandates the adoption of a policy regarding the terms of office and employment of the Company s office holders (as such term is defined in the Companies Law) ( Office Holders ).

The purpose of this Policy is to formalize Galmed s compensation philosophies, practices and policies, as they apply to all Office Holders of Galmed, whether controlling shareholders or not, with respect to their position and contribution to the Company, and is intended to meet the requirements of applicable law.

The term officers , as used herein, includes all Office Holders other than members of the Board of Directors ( Directors and the Board , respectively). However, to the extent Directors are also employees of the Company or also hold management positions with the Company including, to the extent appointed, an active Chairman of the Board ( Management Directors ), the term officers shall also refer to such Management Directors.

Galmed s philosophies, practices and policies, as detailed herein, have been discussed and approved by the Board, following recommendation of the Remuneration Committee of the Board (the Remuneration Committee ), and will periodically be reviewed and administered by the Remuneration Committee and the Board in order to ensure they provide appropriate motivation for Company performance and increased shareholder value and that they meet the requirements of applicable law.

Any amendment to this Policy shall require the approvals as set forth in the Companies Law.

The principal philosophy and objectives of Galmed s compensation policies and practices are:

The elements of officers compensation packages may consist of: (a) base salary; (b) benefits and perquisites; (c) cash incentives; (d) equity-based compensation; and (e) termination payments.

Ratio between elements/Pay mix. Each element is intended to support one or more of the principal objectives detailed in Section II above. The ratio, or pay mix , between such elements for each officer will reflect Galmed s objective of correlating Company success with the total value of compensation that an officer receives, while recognizing that the ratio may vary from officer to officer and from time to time and at times, including in years where Company performance is poor, officers may receive reduced, or may not receive any, cash or equity-based incentives.

Limitation: notwithstanding the foregoing, the aggregate value of cash incentives (excluding one-time cash awards granted upon recruitment or promotion) and equity-based compensation, including one-time equity awards (valued at grant, and with respect to equity-based compensation paid in cash valued at payment) with respect to any given calendar year, may not exceed 90% of the total value of an officer s total compensation package, which may include his or her annual base salary and benefits, cash incentives and equity-based compensation, with respect to such year.

Considerations for determining compensation. When considering compensation of officers, the Company will consider the principal objectives detailed above and will also take into account its nature as an innovative clinical-stage biopharmaceutical company in early stages of research and development, and the following:

Sections IV through VII below describe each of the primary elements detailed above.

Purpose and Base Salary Determinations. Base salaries are intended to compensate officers for their time and services and are initially negotiated and generally set forth in officers employment or service agreements. Base salaries and any adjustments thereto, will be considered based on the objectives and considerations detailed above, and consequently, will vary between officers. When conducting salary reviews, the Company will also consider such matters as the macro-economic environment, inflation and Company performance.

One-time Grant. New-hires or promoted employees may be granted one-time cash or equity-based awards upon recruitment or promotion, at the discretion of the Company. The total value of such one-time cash award shall not exceed 50% of an officer s annual base salary and benefits and the total value of a one-time equity based award (valued at grant, and in cases of equity-based awards paid in cash valued at payment) shall not exceed 50% of an officer s annual base salary and benefits multiplied by the vesting period of such awards

(in years). The total value of one-time cash and equity-based awards together shall not exceed 200% of an officer s annual base salary and benefits.

Benefits and Perquisites. In addition, officers will be provided benefits mandated by applicable law and may be provided with benefits and perquisites generally acceptable in the local market and/or generally available to other Company employees in accordance with Company policies (e.g., study fund, car, phone, medical benefits). Provided however, that the cost to the Company of all benefits and perquisites (other than the cost of termination related benefits detailed in Section VII below and the cost of benefits associated with relocation) which are not mandated by law shall not exceed 35% of an

officer s annual base salary with respect to any given calendar year.

Officers are also entitled to reimbursement of reasonable expenses incurred in the course of discharging their office, including business travel expenses, against provision of receipts and in accordance with Company policies and may be reimbursed for membership fees in professional organizations.

In the event of relocation of an officer to another geography, the benefits provided will include customary benefits associated with such relocation and may exceed 35% of the officer s annual base salary.

Purpose. Officers may be granted annual and/or special, or ad hoc, cash bonuses, at the discretion of the Company, taking into consideration the relevant objectives and considerations set forth in Sections II and III above, and subject to the conditions set forth below, as well as any additional terms and conditions or criteria for entitlement thereof that may be determined by the Company from time to time.