Sherritt, Pala reach board renewal collaboration deal

Executive Summary

• Sherritt International Corp. entered into a collaboration agreement with Pala Assets Holdings Ltd., resolving a shareholder dispute where Pala had requisitioned a special meeting.
• Pala withdrew its requisition, agreed to a standstill period through January 1, 2027, and committed to voting in favor of Sherritt's board slate at the 2026 annual meeting.
• Sherritt implemented immediate board changes, including the appointment of Brett Richards to replace Shelley Brown, to support the leadership transition and the search for a permanent CEO.

Key Details

• Agreement Terms: Pala withdrew its requisition for a special meeting of shareholders and entered into customary standstill and voting covenants.
• Standstill Period: Pala agreed to a standstill through January 1, 2027.
• Ownership Limits: During the standstill, Pala may increase beneficial ownership up to, but not above, 9.99% of Sherritt's issued and outstanding common shares.
• Pre-emptive Rights: Pala retains customary pre-emptive rights to maintain its ownership percentage as long as it beneficially owns at least 5% of common shares.
• Put/Call Rights: The standstill does not restrict Pala's rights under the put/call rights agreement dated April 17, 2025.
• Voting Commitment: Pala agreed to vote in favor of Sherritt's board slate at the 2026 annual meeting and any other shareholder meetings involving director elections prior to January 1, 2027.
• Board Composition: The board will comprise no more than eight directors until January 1, 2027, to support the appointment of a permanent CEO.
• Board Changes:
  • Shelley Brown stepped down from the board effective immediately.
  • Brett Richards was appointed to fill the vacancy.
• CEO Search Committee: The board reconstituted the CEO search committee with Brian Imrie as chair, and Brett Richards and Richard Moat as members.
• Committee Assignments: Brett Richards will serve on at least two standing committees, specifically the governance committee and the CEO search committee. Upon disbandment of the search committee, he will join the reserves, operations and capital, and sustainability committee, and any new committees formed during the period.
• Filing: A copy of the agreement will be filed on Sherritt's profile on SEDAR+.

Notable Quotes

• Brian Imrie, Chair of the Board: "We are pleased to have reached an agreement with Pala that will provide stability through the leadership transition and allow the board and management to focus on executing our strategy for the benefit of all shareholders. We thank Shelley for her dedicated service and are pleased to welcome Brett, whose extensive mining leadership experience will be a valuable asset to Sherritt."
• Jan Weidner, CEO of Pala: "We have been invested in Sherritt for nearly a decade, and we believe the agreement announced today reflects meaningful progress. It marks a constructive and positive outcome for Sherritt and provides a strong foundation to unlock value through the selection of a new CEO. We see great potential in Sherritt's businesses, and are aligned in driving significant near-term value creation for all shareholders."