Notice to Annual General Meeting of shareholders in Shelton Petroleum AB (publ)

The shareholders of Shelton Petroleum AB (publ) (hereinafter the
“Company”) are hereby given notice to attend the Annual General Meeting
to be held at 10 AM on  21 May 2015 at Summit Hightechbuilding,
Sveavägen 9  in Stockholm.


Notification and right to participate

The right to participate at the general meeting vests in a person who:
is registered as a shareholder in the share register maintained by
Euroclear Sweden AB regarding circumstances pertaining on 15 May 2015;
and not later than 15 May 2015 notifies the Company of their intention
to participate at the general meeting.

 

Notice of participation may be given by post to Shelton Petroleum AB,
Hovslagargatan 5B, 111 48 Stockholm or by e-mail to
gunnar.danielsson@sheltonpetroleum.com. The notification should state
the name, personal ID or registration number, address, daytime telephone
number and shareholding of the shareholder. Authorization documents such
as power of attorney and registration certificates should, where
appropriate, be submitted to the Company prior to the general meeting.
Shareholders who wish to be accompanied by one or two assistants may
give notice thereof within the time and in the manner applicable to
shareholders. A power of attorney form is available on
www.sheltonpetroleum.com.

 

Shareholders with nominee-registered shares must, in order to be
entitled to participate at the general meeting, request that the nominee
effects a temporary re-registration (voting right registration) of the
shares in ample time prior to 15 May 2015.

 

Proposed agenda

1.  Opening of the meeting
2.  Election of a chairman of the general meeting
3.  Preparation and approval of the voting register
4.  Election of one or two persons to attest the minutes
5.  Determination of whether the general meeting has been duly convened
6.  Approval of the agenda
7.  Presentation of the annual report and auditor’s report as well as
    consolidated financial statements and auditor’s report for the group
8.  Resolutions regarding  a) adoption of the income statement and
    balance sheet as well as the consolidated income statement and the
    consolidated balance sheet  b) allocation of the Company’s profits
    or losses in accordance with the adopted balance sheet  c) discharge
    from liability of the directors and CEO
9.  Determination of the numbers of directors and auditors and alternate
    auditors
10. Determination of fees for the Board of Directors and the auditors
11. Information regarding appointments held in other companies by
    candidates for election to the Board of Directors, election of
    directors and auditor and alternate auditor
12. Resolution regarding guidelines for compensation to senior
    executives
13. Resolution regarding a Nomination Committee
14. Resolution regarding an issue of stock options
15. Resolution regarding authorization for the Board of Directors to
    decide on issue of shares
16. Closure of the general meeting

 

Chairman of the annual general meeting (item 2)

The Nomination Committee proposes that the lawyer, Carl Westerberg, be
elected to chair the annual general meeting.

 

Allocation of the Company’s earnings (item 8 b)

The Board proposes that no dividend is paid for the financial year 2014.

 

Election of directors, Chairman of the Board, auditor and fees (items
9-11)

The Nomination Committee proposes that the board should consist of seven
members. The Nomination Committee further proposes re-election of
directors Björn Lindström, Hans Berggren, Peter Geijerman, Zenon
Potoczny and Katre Saard and that Cheddi Liljeström and Dmitry Zubatyuk
are elected as new directors. Richard N. Edgar and Freddie Linder have
declined to be re-elected. Björn Lindström is proposed to be re-elected
as Chairman of the Board.

The Nomination Committee proposes that the company shall have one
auditor and no alternate auditor. The Nomination Committee further
proposes re-election of the authorized auditing firm Ernst & Young
AB.

The Nomination Committee further proposes that the general meeting
resolves that board fees be paid to the Chairman in the amount of
SEK 200,000 (unchanged compared to previous year) and SEK 100,000
(unchanged compared to previous year) to each of the other directors
with the exception of Zenon Potoczny who is employed in the Group. A fee
in the amount of SEK 50,000 (unchanged compared to previous year) shall
be paid for committee work to the Chairman of the Audit Committee. Fees
will thus total SEK 750 000, including committee work. It is proposed
that the auditors are paid in accordance with approved invoices.

 

Guidelines for compensation to senior executives (item 12)

The Board proposes that the general meeting adopt guidelines for
compensation to senior executives with essentially the same content as
the guidelines adopted at the 2014 annual general meeting, entailing the
following. Compensation to management shall be on market terms and
competitive in order to enable the Company to retain qualified
employees. The compensation level for the individual executive shall be
based on factors such as position, expertise, experience and
performance. In addition to fixed salary, it shall be possible for
management to receive variable salary, pensions, other benefits as well
as participate in incentive programs. The fixed salary, which shall be
individual and differentiated based on the individual’s
responsibilities, experience and performance, shall be determined based
on market principles. Variable salary shall be based on the Company’s
earnings growth, aimed at promoting the Company’s long term value
creation. The annual variable portion of salary may normally not exceed
30 per cent of fixed salary. Share- and share-price-related incentive
programs are to be designed so that the vesting period or the period
from the commencement of an agreement to the date for acquisition of
shares is to be no less than three years. Other benefits shall
correspond to what is deemed reasonable relative to practice on the
market. The portions are intended to create a balanced compensation and
benefits program which reflects the performance and responsibilities of
the employees as well as the Company’s earnings trend. The Board shall
be entitled to deviate from these guidelines where special reasons exist
in an individual case.

 

Resolution regarding Nomination Committee (item 13)

The Nomination Committee proposes that the general meeting resolves on
the following principles for election of a Nomination Committee with
essentially the same content as the guidelines adopted at the 2014
annual general meeting: The Company shall have a Nomination Committee
which shall consist of the Chairman of the Board and three other
members, who shall each represent the three largest shareholders (by
votes) of the Company, based on the share register maintained by
Euroclear Sweden AB of registered shareholders (per group of owners) on
30 September 2015. A shareholder who is not registered in its own name
in the aforementioned register and who wishes to be represented on the
Nomination Committee, shall notify the Chairman of the Board and shall
provide evidence of the shareholding.

As soon as possible, after the end of the month of September, the
Chairman of the Board shall contact the three largest shareholders (by
votes) in accordance with the above, and request that they appoint one
member each. If anyone of those shareholders refrains from using its
rights to appoint a member, the right passes to the shareholder that
after these shareholders has the largest shareholding. The names of the
members of the Nomination Committee and the names of the shareholders,
whom they represent, shall be made public not later than six months
before the annual general meeting. The Nomination Committee elects its
Chairman, the Chairman of the Board shall however not be Chairman of the
Committee.

The Nomination Committee’s duties shall be to prepare and present
proposals to the shareholders at the 2016 annual general meeting
regarding election of a chairman of the meeting, the Chairman of the
Board, directors and, where appropriate, auditors, as well as fees to
the Board of Directors and auditors. The appointment shall extend until
such time as a new Nomination Committee is appointed. In the event that
the shareholder, who the member represents, has materially reduced its
holding in the Company, the member shall resign from the Nomination
Committee and the Committee shall offer the largest shareholder, who is
not represented on the Nomination Committee, the opportunity to appoint
a new member. In the event a member for other reason resigns from the
Nomination Committee before the Committee’s work is completed, a new
member shall be appointed according to the same principles. No fees
shall be paid to the members of the Nomination Committee. However, where
necessary the Company may be liable for reasonable costs for external
consultants, which the Nomination Committee considers necessary for the
performance if its duties.

 

Resolution regarding issue of stock options (item 14)

Shareholders representing more than 10 per cent of the shares in the
company propose that the general meeting resolves to issue stock
options. It is proposed that the company shall issue a maximum of
320,000 stock options of series 2015/2018. The following two categories
shall have the right to subscribe, with departure from the shareholders’
preferential rights, to the stock options (the maximum number of options
that each category can subscribe to is indicated within brackets for
each category): Managing Director (144,000 options) and management
(176,000 options). The options shall be subscribed to on a separate
subscription list during the period from 1 July 2015 up until and
including 15 July 2015.

Allotment is not guaranteed and provides that acquisition of the stock
options can be legally done, and that the board find that it can be done
at reasonable administrative and financial costs. The right to
participate in the program further provides that the officer at the time
of the subscription has not given notice or been given notice of his or
hers employment in the Shelton Petroleum group. The board shall make a
final resolution on and execute the allotment within the limits given.

The stock options shall be issued at a price corresponding to a
calculated market value of the stock options on 30 June 2015, applying
the Black & Scholes model, based on a subscription price upon
execution of 150 per cent of the volume weighted average price during
the period 16 June 2015 – 30 June 2015, though not below the share quota
value at the time. The stock options can be exercised during the period
16 July 2018 until and including 30 September 2018 and subscription for
shares shall relate to shares of series B.  Upon full subscription of
the shares under the stock options the company’s share capital can
increase by a maximum of SEK 1 600 000, calculated using the quota value
of SEK 5. A full subscription of the shares under the stock options
corresponds to a dilution of 1.7% (in relation to the current share
capital).

The reasons for the deviation of the shareholders’ preferential rights
is that the company shall be able to motivate and keep competent and
motivated personnel on an international market for oil companies by
offering participation in a long term incentive program through
acquisition of stock options on market terms.

It is also proposed that the general meeting assigns the board to
execute the resolution regarding stock options and to make the necessary
adjustments that may be required in relation to registration at the
Swedish Companies Registration Office or any other formal requirements.

 

Authorization for the Board to decide on issue of shares (item 15)

The Board of Directors proposes that the annual general meeting
authorizes the Board, on one or more occasions during the period until
next annual general meeting, to decide on issues of new shares, warrants
and/or convertible debentures in exchange for cash payment and/or with
provisions regarding payment in kind or by set-off or otherwise with
conditions, and that it thereupon be possible to derogate from the
shareholders’ pre-emption rights. The purpose of the authorization and
the reason for the derogation from the shareholders’ pre-emption rights
is to facilitate the raising of capital for expansion through corporate
acquisitions or acquisitions of business assets and for the Company’s
business. The total number of shares which may be issued pursuant to the
authorization shall be a maximum of 2,000,000 shares which corresponds
to 10.7% of the total number of shares in the company at the time of the
annual general meeting. In the event an issue is made by way of
deviation from the shareholders’ pre-emption rights, the issue shall be
made on market terms. Any issue pursuant to the authorization shall
refer to shares of series B.

 

Majority requirements

A resolution in accordance with the proposal in item 14 in the proposed
agenda requires that the general meeting’s resolution is supported by at
least nine tenths of the votes given as well as of the shares
represented at the general meeting. Further, a resolution in accordance
with the proposal in item 15 in the proposed agenda requires that the
general meeting’s resolution is supported by at least two thirds of the
votes given as well as of the shares represented at the general meeting.

 

Miscellaneous

The Company currently has 18,661,247 shares registered with the Swedish
Companies Registration Office (Sw Bolagsverket), of which 761,900 are
shares of series A (10 votes/share) and 17,899,347 are shares of series
B (1 vote/share). The number of voting rights amounts to 25,518,347.

The Company’s annual report will be published not later than 30 April
2015. The Board’s and Nomination Committee’s complete proposals for
resolutions and other documents pending the general meeting will be
available at the Company’s offices (addresses above) as from the same
date and will be sent free-of-charge to shareholders who so request and
provide their mailing address. During the same period the documents will
also be available on www.sheltonpetroleum.com and will be presented at
the general meeting.

If requested by a shareholder and provided that the Board deems that it
can take place without causing material damage to the Company, the Board
and the CEO shall provide information about circumstances that may
affect the assessment of an item on the agenda, circumstances that may
affect the assessment of the Company’s or its subsidiaries’ financial
situation, and the Company’s relationship with another company within
the Group.

 

Stockholm, April 2015

Shelton Petroleum AB (publ)

 

The Board of Directors

 

For more information, please contact:

Robert Karlsson, CEO, Shelton Petroleum, tel +46 709 565 141

robert.karlsson@sheltonpetroleum.com

www.sheltonpetroleum.com

 

The information provided herein is such that Shelton Petroleum AB is
obligated to disclose it pursuant to the Securities Markets Act
(2007:528). The information was submitted for publication at 14.00 CET
on 22 April 2015.

 

About Shelton Petroleum

Shelton Petroleum is a Swedish company focused on exploring and
developing concessions in Russia and Ukraine. In Russia, the company
holds three licenses in the Volga-Urals area in Bashkiria and has
commenced production on the Rustamovskoye field after a successful
exploration program. In Ukraine, Shelton Petroleum’s wholly owned
subsidiary has a joint venture with Ukrnafta and Chornomornaftogaz. The
Shelton Petroleum share is traded on Nasdaq Stockholm under the symbol
SHEL B.

This is an English translation of the Swedish original. In case of
discrepancies, the Swedish original shall prevail.