Icelandair: Granting of Stock Options

The Board of Directors of Icelandair Group has agreed to implement the resolution made at the Company’s Annual General Meeting on 3 March 2022, to introduce a Stock Option Program.

The Company’s Executive Team and other employees at Director level, in total 51 employees, will be granted the right to purchase a total of up to 385,300,000 shares through Stock Option Agreements, thereof 111,000,000 to the Executive Team.

Key terms and conditions of the agreements are as follows:

Type of share-based incentive program: Stock options

Participants: The Executive Management and other employees at Director level.
Vesting time: Three years from the granting date.
Exercise period: One year following the three years vesting period. Exercise periods are two per year in April and October for 15 days following the disclosure of the respective Q1 and Q3 financials.
Exercise price: The exercise price will be based on the share price in Icelandair Group at closing of NASDAQ Iceland on granting date with the addition of 3% annual interests. The exercise price shall be adjusted for any future dividend payments decided after the granting date.

Other key terms and conditions:

Vested stock options which will not be exercised within the exercise periods will lapse.
Participants are required to hold shares, corresponding to the net profit gained from the options (after tax) until the following holding requirements are reached, measured in total share value owned as a multiple of annual base salary: CEO 1x, other members of the Executive Team: 0.5x. For other employees: 10% of purchased shares.
The options are valid only if the holder is still employed by Icelandair Group or its subsidiaries on the exercise date. The Remuneration Committee can waive this condition under certain circumstances.
If a change of control occurs, in accordance with Article 100 of the Icelandic Takeovers Act No. 108/2007, any outstanding stock options shall vest and become exercisable.
The Company will not grant any kind of loans or guarantees in relation to the stock option program.
Rights and obligations under the stock option program cannot be assigned to a third party.
The Company has the option to reclaim, in whole or in part, remuneration that has been based on false, misleading, insufficient or incorrect data, or if the recipient acted in bad faith in respect of other matters, which resulted in too high remuneration or remuneration which would otherwise not have been granted.
The Company will issue new shares following the exercise periods corresponding to the total number of exercised shares.

The Company’s cost of the Stock Option Plan is estimated to be around USD 1.1 million over the next 3 years based on the Black-Scholes model. The total number of stock options granted corresponds to 0.94% of the total issued share capital.

Details of the Stock Options granted to Icelandair’s Executive Team:

Name	Position	Stock options granted	Stock options previously granted	Shares owned	Shares owned by financially related parties
Bogi Nils Bogason	President & CEO	22,100,000	22,100,000	0	23,625,000
Árni Hermannsson	M.D Aircraft Leasing and Consulting	12,700,000	12,700,000	100,000	7,500,000
Elísabet Helgadóttir	Chief Human Resources Officer	12,700,000	12,700,000	0	8,666,667
Einar Már Guðmundsson	M.D Air Freight and Logistics	12,700,000	5,500,000	1,750,000	0
Ívar S. Kristinsson	Chief Financial Officer	12,700,000	12,700,000	4,250,000	0
Rakel Óttarsdóttir	Chief Digital Officer	12,700,000	12,700,000	2,500,000	0
Sylvía Ólafsdóttir	Chief Customer Officer	12,700,000	12,700,000	250,000	0
Tómas Ingason	Chief Revenue Officer	12,700,000	12,700,000	57,405	7,500,000

Contact information
Investors: Iris Hulda Thorisdottir, Director Investor Relations. E-mail: iris@icelandair.is
Media: Asdis Petursdottir, Director Communications. E-mail: asdis@icelandair.is

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