Proposals submitted to the Annual General Meeting of Kaupthing Bank hf., Friday March 7, 2008. 1. Proposal on dividends The Board of Directors proposes that shareholders will be paid dividends amounting to ISK 14,809 million (EUR approximately 150 million) for the operating year 2007, or ISK 20 per share, which corresponds to 21% of net earnings. Record date for dividends will be on 12 March 2008 in Iceland and Sweden. Ex-date in Iceland and Sweden will be on March 10 2008. Payment of dividends shall be effected on 18 March 2008 (19 March in Sweden). In other respects, reference is made to the Annual Accounts of the Company as regards further disposal of profits and other changes to the Company's equity. 2. Proposals on amendments to the Articles of Association A. The following text shall be added to the current Article 4, Paragraph 1: “The Board of the Company is authorised to decide to denominate the Company's share capital in euros instead of Icelandic krónas, in accordance with the authorisation contained in Article 1, Paragraphs 4 and 5 of the Act on Public Limited Companies, no. 2/1995, as amended. Each share shall be of 1 EUR nominal value, resulting in an equivalent decrease in the number of shares. The EUR/ISK conversion rate shall, in accordance with Article 1 of the Act on Public Limited Companies, be equivalent to the closing rate (mid-rate) as published by the Central Bank of Iceland at the end of the operating year preceding the year when the decision is made, unless the Company has previously been granted an authorisation to keep its accounts and write its annual accounts in euros, in which case the conversion rate shall be based on applicable clauses in the Icelandic Act on Annual Accounts. The Board shall also be authorised to make any amendments to the Company's Articles of Association that are necessitated by this decision, including changing the amounts that appear in Article 4, Paragraph 1 and Paragraph 3 of the Articles of Association and pertain to the change, using the same conversion method, and making corresponding changes to the amounts which the Board is or will be authorised to increase the share capital of the company.” B. The following text shall form a new Paragraph (Paragraph 5) of Article 4, the current Paragraphs 5 and 6 shall be Paragraphs 6 and 7: “The Board of Directors of the Company is authorised to issue convertible bonds up to a maximum amount equivalent to EUR 1,500,000,000, or, according to circumstances, guarantee the issue and payment of such convertible bonds, which would be issued by one of the Company's subsidiaries, with the terms that such debt could be converted into shares in Kaupthing Bank, subject to conditions precedent. The Board of Directors is furthermore authorised, as required, to increase the share capital of the Company by up to ISK 1,750,000,000 at nominal value through the subscription for up to 175,000,000 new shares to meet the obligations of the Company pursuant to the convertible bonds, if the bondholders wish to exercise their conversion rights, in part or in whole. The current shareholders waive their pre-emptive rights to the new shares pursuant to Article 34, paragraph 3 of Act no. 2/1995 on Public Limited Companies. The Board of Directors may, however, authorise shareholders in each instance to subscribe for the new shares, in part or in whole. The new shares shall belong to the same class and carry the same rights as other shares in the Company. The new shares shall grant rights within the Company as of the date of registration of the increase of the share capital. There will be no restrictions on trading in the new shares. The Board of Directors shall otherwise decide on the terms of the issue of the convertible bonds and the increase of the share capital, as well as the stages in which the authorisation is exercised. The Board of Directors shall furthermore be authorised to make the necessary amendments to the Company's Articles of Association in relation to the issue of the convertible bonds or the subsequent increase of the Company's share capital. This authorisation to issue convertible bonds and to increase the share capital shall expire on 1 March 2013 to the extent it has not been utilised before that date.” 3. Proposals on members of the Board of Directors for the next operating year Board members: 1. Sigurdur Einarsson - United Kingdom, Executive Chairman of Kaupthing Bank hf. (First elected 2003.) 2. Ásgeir Thoroddsen - Iceland, Attorney to the Supreme Court of Iceland. (First elected 2003.) 3. Bjarnfredur Ólafsson - Iceland, Attorney to the District Court of Iceland. (First elected 2003.) 4. Brynja Halldórsdóttir - Iceland, CEO of Norvik hf. (First elected 2004.) 5. Gunnar Páll Pálsson - Iceland, CEO of Commercial Workers' Union. (First elected 2001.) 6. Hjörleifur Jakobsson - Iceland, CEO of Egla hf. (First elected 2003.) 7. Lydur Gudmundsson - United Kingdom, Executive Chairman of Exista hf., Chairman of the Board of Iceland Telecom hf. and Bakkavör Group hf. 8. Niels de Coninck-Smith - Denmark, CEO of Ferrosan A/S. (First elected 2005.) 9. Tommy Persson - Sweden, CEO of Länsförsäkringar AB. (First elected 2002.) Substitutes: 1. Gudný Arna Sveinsdóttir - Iceland, CFO of Kaupthing Bank hf. 2. Hildur Árnadóttir - Iceland, CFO of Bakkavor Group hf. 3. Antonios P. Yerolemou - United Kingdom, Executive Chairman of KFF. 4. Jónas Gudbjörnsson - Iceland, CFO of Ker ehf. 5. Audur Einarsdottir - Iceland, Master of Business Administration 6. Panikos J. Katsouris - United Kingdom, CEO of Katsouris Brothers Ltd. 7. Thórdur Magnússon - Iceland, Chairman of the Board of Directors of Eyrir Invest ehf. 8. Anna Sigurdardottir - Iceland, CEO of Eignarhaldsfelagid Brunabotafelag Islands. 9. Ásthildur M. Otharsdóttir - Iceland, Director of Treasury and Corporate Development, Össur hf. 4. Proposal on remuneration of the Board of Directors for next operating year It is proposed that Board members receive ISK 400,000 per month and that the Executive Chairman receives ISK 800,000 per month. Remuneration to substitutes shall be ISK 400.000 for each board meeting attended. In addition remuneration for Board members who serve on the sub-committees of the Board shall be ISK 150,000 per month to each member for their position on each committee. 5. Election of an auditor for the next operating year It is proposed that KPMG hf. be elected the company's auditors and that Sigurdur Jonsson, certified auditor, perform this duty on behalf of the auditing company. 6. Proposal of the Board of Directors on a remuneration policy. The Board of Kaupthing Bank hf. has approved the following remuneration policy of Kaupthing Bank hf. pursuant to article 79a of Act no 2/1995 on Public Limited Companies, as amended. The Board of Directors proposes that the Annual General Meeting, held on March 7, 2008, confirm the following policy. The policy is binding on the Board of Directors where it pertains to payments in the form of share certificates, call and put options, priority purchase rights and other kinds of payments which are linked to share certificates in the Company or the development of the price of shares in the Company. In other respects the remuneration policy is of guidance for the Board of Directors. The policy cannot be regarded as an exhaustive overview of remuneration. This compensation policy covers most aspects of the compensation and benefits (employment terms and conditions) provided to the Group Chief Executive Officer (CEO) and to the senior management of Kaupthing. Key employees are regarded as corner stones in the continued growth of the Bank and its good standing. Compensation to key employees must be attractive and competitive. Option schemes for key employees are to be continued and financing to be provided in this context. Board Members shall receive a fixed monthly payment in accordance with the decision of the AGM. The Board of Directors shall submit a proposal on the remuneration for a term of one year, taking into account the time Board Members spend on their duties, the responsibility involved and the Bank's operations in general. The Compensation Committee makes a proposal to the Board of Directors on the salaries paid to the CEO and the Executive Chairman and how bonuses are calculated, the proposal being based on an examination by the Committee of salaries paid to executives of European banks and information from external consultants. The salaries of other Managing Directors are determined by the CEO in consultation with the Managing Director of Human Resources taking into account the responsibility and the scope of the management position in question. Bonus payments to others than the CEO and the Executive Chairman are determined by the CEO in consultation with the Executive Chairman of the Board of Directors and the Managing Director of Human Resources. The bonus payments are based on the operational results of the Bank and/or the relevant individual business unit/division. A specific proportion of bonus payments above a certain amount will be linked to the price of the Bank's shares and payment deferred for one to three years. The payment is however subject to the basic condition that the employee remains employed within the group. To align the incentives of the employees with actions that will enhance long-term shareholder value, the Bank has enabled employees to purchase shares in the Bank. The Bank has in this context written call options, offered loans, according to general rules, to finance purchases, and in some cases written put options. The total put options and call options written towards employees can at any given time be up to 9% of issued shares in the Bank. This is the same percentage, 9% as shareholders decided in 2004, and the same percentage as was approved at the AGM in 2007. The purchase or strike price in options shall be the market price on the date the options are written. Kaupthing Bank hf. makes pension contributions based on local and regional laws and regulations and collective bargaining regimes in jurisdictions in which the bank is operating. Kaupthing Bank hf. is authorised to negotiate especially with senior management on additional pension contributions if and when required. Payments to senior management upon termination of employment shall generally only be based on the applicable employment agreement. Under special circumstances, when such arrangements are in the best interest of the Bank, the Bank can make specific termination agreements with its senior management. 7. A proposal for the renewal of the Company's authority to purchase or take as collateral its own shares. The Board of Directors, acting for the Bank, is authorized to purchase own shares in the Bank or to accept such shares as collateral. This authorisation shall be effective for 18 months from the date of the Annual General Meeting 2008 with the restriction that the total shares purchased or accepted as collateral shall not exceed 10% of the total shares in the Bank at each time. The price paid shall not be lower than 20% below, and not higher than 20% above, the rate at which the Bank's shares are priced on the OMX Nordic Exchange in Iceland and in Stockholm. A corresponding authorisation granted by the 2007 Annual General Meeting is cancelled.