Arion Bank hf.: Proposals for the amendment of articles of association and the conditional distribution of divident

The Board of Directors of Arion Bank HF to day decided to summon a
shareholders' meeting of the bank, which shall take place on 12 February.  The
Board, firstly, proposes that the Board be provided with a temporary authority
to purchase shares issued by the Bank.  The authority, if granted, will be
adopted as an addendum to the Bank's current articles of association. 
Secondly, the Board proposes that the shareholders' meeting resolves to
conditionally distribute dividends to shareholders. 

The text of the propsals are as follows (in english):

A) A proposal for authority for the Board of Directors of Arion Bank to
purchase shares issued by the Bank which shall be adopted into an addendum to
the Bank's current articles of association. 

Addendum no. 1 to the Articles of Association of Arion Bank hf. pursuant to
clause 9.3, hereof. 

Authority to purchase own shares provided by a shareholders' meeting held on 12
February 2018 

A shareholders' meeting of Arion Bank hf., which was convened on 12 February
2018, hereby empowers and authorises the Board of Directors of the Bank to
purchase, whether in one transaction or many, during the validity period of
this authority, up to an aggregate maximum of 10% (ten per cent) or 200 million
shares (each with a nominal value of ISK 1), whichever is lower, of the Bank's
issued, registered and fully paid up shares.  The Board of Directors is further
empowered and authorised to enter into such transactions at any time and with
any party (including some, but not all shareholders of the Bank) without the
(other) shareholders of the Bank being entitled to demand equal treatment in
that they are permitted, in connection with, or as a result of such a
transaction, to require the Bank to purchase some or all of their respective
shareholdings of the Bank. 

The maximum price per share which the Board of Directors of the Bank may pay by
way of consideration for shares thus acquired may not exceed ISK 94.177 per
share. The minimum price per share which the Board of Directors of the Bank may
pay for these purposes shall be ISK 1 per share. 

This authority is provided on the basis of Art. 55 of Limited Liability
Companies no. 2/1995. 

This authority shall be valid until 15 April 2018.

B) Proposal that a sharesholders' meeting of Arion Bank resolves to
conditionally distribute dividends to the bank's shareholders. 

Resolution to distribute dividend to shareholders, adopted by a shareholders'
meeting of Arion Bank held at 12 February 2018. 

A meeting of the shareholders of Arion Bank hf. convened on 12 February 2018
hereby resolves to distribute dividend in cash to those parties who are
electronically registered shareholders of Arion Bank at 12 o'clock noon (GMT)
on the immediate working day (each working day a day on which Banks in
Reykjavik, Iceland, are generally open for business) after the date of the
Private Placement, as defined below, (Record Date).  The dividend payment date
shall be the day which falls on the tenth (10.) working day after the closing
of the Private Placement. 

The aggregate amount distributed as dividend to shareholders shall be ISK 25
billion, less any amounts used by Arion Bank as consideration for shares of the
Bank repurchased by the Bank in the period from the date hereof until Record
Date, on the basis of the authority provided by its Articles of Association as
amended on 12 February 2018.  The dividend amount distributable to each
shareholder shall be his pro rata share (as determined by ratio of the number
of shares held by each of them respectively on the Record Date, divided by the
total number of shares in the Bank)  in the aggregate distributable amount, so
determined.  The distribution of dividend to each shareholder will be subject
to withholding of Icelandic Financial Income Tax. 

The allocation of dividend will be notified to individual shareholders by Arion
Bank in a written notification sent to each shareholder no later than on the
fifth (5.) working day after the closing of the Private Placement. 

The foregoing distribution of dividend is conditional upon Kaupskil ehf. having
sold and transferred (i.e. closed the sale of) not less than 2% of the share
capital of Arion Bank in a private placement (Private Placement)  no later than
on 15 April 2018.  Should such transfer not have taken place on the said date,
this resolution to distribute dividend shall be held to have been revoked at
the end of that date and consequently deemed null and void thereafter.  No
shareholder shall be entitled to assert or base any right or claim for payment
of dividend until this condition has been fulfilled. 

For further information please contact Haraldur Guðni Eiðsson of Arion Bank's
Communications division at [e-mail] or tel: +354 444
7108.