Source: Icelandair Group hf.

Correction: Final Proposals and Agenda for Shareholders' Meeting 30 November 2018

Correction: Share price 7.9 has been added as well as the text "to strengthen the financial position of the company for future growth" in item 3.


SHAREHOLDERS’ MEETING OF ICELANDAIR GROUP HF.

HILTON REYKJAVÍK NORDICA

30 NOVEMBER 2018 AT 8:30 AM

FINAL PROPOSALS

The Board of Directors of Icelandair Group hf. (the “Company”) submits the following proposals:

  1. That the shareholders’ meeting approves the Company’s acquisition of 100% of the share capital in WOW air hf.
  2. Proposal for the Board of Directors to be authorised to increase the Company’s share capital for the purposes of making a payment under a purchase agreement.

It is proposed that the Board of Directors be authorised to increase the Company’s share capital. This authorisation is intended to be utilised for the proposed acquisition of WOW air hf. It is proposed that the following provision be adopted as Article 15.1 of the Company’s Articles of Association:

“The Company’s Board of Directors is authorised to increase the Company’s share capital by up to ISK 334,905,779 nominal value (ISK three hundred thirty-four million nine hundred and five thousand seven hundred seventy-nine), by issuing new shares. The share price shall be in accordance with the purchase agreement regarding WOW air hf. (7.9). The new shares shall be of the same share class as other outstanding shares in the Company. Shareholders shall not have priority right to subscribe to the new shares. The new shares shall provide any relevant rights in the Company from the date of registration of the share capital increase. The Board of Directors may specify further rules on the sale of the shares. The authorisation of the Board of Directors to increase the share capital according to this provision shall be valid until 1 December 2019, to the extent that it has not been utilised.”

  1. Proposal for the Board of Directors to be authorised to increase share capital. It is proposed that the following provision be adopted as Article 15.2 of the Company’s Articles of Association:

“The Company’s Board of Directors is authorised to increase the Company’s share capital by up to ISK 625,000,000 nominal value (ISK six hundred twenty-five million) to strengthen the financial position of the company for future growth. The Board of Directors shall decide on the share price and the subscription terms of the new shares. The intention is that the share offering, in part or wholly, be made towards Company shareholders registered at the end of trading on the date on which the price is set for the offering. The shares shall be offered under the following terms:

  1. Shareholders, and as the case may be, others, shall be offered to subscribe for new shares of up to ISK 499,000,000 (four hundred and ninety-nine million) nominal value through a private placement. The minimum subscription amount of each individual subscriber shall be at least the equivalent of EUR 100,000. The new shares shall be sold at a fixed rate to be determined by the Board of Directors no later than three days prior to commencement of the offering and the purchase price shall be paid in cash. The Board of Directors shall decide the commencement date of the subscription period, which shall expire no later than 14 December 2018 and the subscription price shall be paid no later than 31 December 2018. Participation in the share offer precludes shareholders from participating in the public offering provided for in point (b) of this Article except to the extent there will be insufficient subscriptions in the public offering. The priority rights of shareholders to this part of the share capital increase pursuant to the Act on Public Limited Companies and the Company’s Articles of Association shall not apply, as per Article 34 of Act No. 2/1995 on Public Limited Companies.

The Company’s Board of Directors shall be authorised to decide further terms and conditions, the allocation of the new shares and the implementation of the private placement. Subscriptions that lead to the payment of a purchase price that is an amount less than the equivalent of EUR 100,000 in ISK shall be void. The costs incurred by the Company as a result of the share capital increase and its registration is estimated at ISK 100.000.000. The cost of the private placement shall be paid in accordance with invoice.

  1. Shareholders shall be offered to subscribe to new shares of nominal value up to ISK 126,000,000 (one hundred and twenty-six million) in a public offering, taking into account the results of the private placement pursuant to point (a), so that if insufficient subscriptions have been received in the private placement, the authorisation of the Board of Directors according to point (b) shall increase accordingly. Shareholders shall have a priority right to subscribe to new shares in this part of the share capital increase, in accordance with Act No. 2/1995 on Public Limited Companies and the Company’s Articles of Association, except that those shareholders who participated in the private placement pursuant to point (a) shall be considered to have waived their priority rights to subscribe to shares in the public offering. The new shares shall be sold at a price that does not exceed the price set in the private placement pursuant to point (a) of this Article. Prior to the public offering, a prospectus will be issued. The costs incurred by the Company as a result of the share capital increase and its registration is estimated at ISK 50.000.000. The cost of the public offering shall be paid in accordance with invoice.

The shares will belong to the same share class as other share capital in the Company. The new shares shall remain subject to any restrictions and redemption obligations set out in the Company’s Articles of Association and Icelandic law. The new shares provide rights in the Company from the date of registration of the share capital increase. The Board of Directors may establish further rules on the sale of the shares. The authorisation of the Board of Directors pursuant to this Article shall be valid until 1 December 2019, to the extent that it has not been utilised.”

The Board of Directors of Icelandair Group hf.