Senior Executive KMP - Long Term Incentive (LTI) A description of the Long Term Incentive applicable for the 2024 financial year is set out below: What is the purpose of Long Term Incentives? Provision of LTI’s provide the Company with the opportunity to: – Align the interest of Senior Executive KMPs more closely with the interests of Shareholders by providing an opportunity to earn shares in the Company; – Provide Senior Executive KMPs with the opportunity to share in any future growth in the value of the Company; and – Provide greater incentive for Senior Executive KMPs to focus on the Company’s longer-term goals. Who is eligible to participate in Long Term Incentives? The Committee shall nominate eligible LTI participants for Board approval. Typically, individuals classified as Senior Executive KMPs shall be eligible to participate, in conjunction with selected employees of the Company that management considers capable of influencing LTI objectives. What is the Long Term Incentive performance period? The LTI contains two segments, Performance Rights and Share Options. Each segment commences on 1 July (or any other appropriate date as determined by the Board) and is followed by a 3-year performance period, with testing occurring at the final day of the performance period. The two LTI segments comprise the following: – Performance Rights: Grant of performance rights every three years, with performance metrics measured over a three year period; and – Share Options: Annual grant of share options with appropriate market-based performance hurdles. Share options expire after three years. Going forward into the 2025 Financial Year, the Committee has considered an amendment to the above LTI arrangement, discussed further within Section 9 - 2025 Financial Year Planned Remuneration Changes. What types of equity may be granted under the LTI Plan? Performance rights and Share Options are granted under the LTI program. Performance rights represent a right to be allocated one share in Sheffield, subject to satisfying any specified thresholds, standards and performance criteria. A participant is not entitled to participate in or receive any dividends or other shareholder benefits until the performance right has vested and been exercised and a share has been allocated to the participant. Share Options are an option to be allocated one share in Sheffield, subject to satisfying any specified thresholds, standards and performance criteria. A participant is not entitled to participate in or receive any dividends or other shareholder benefits until the share option has vested and been exercised and a share has been allocated to the participant. How much value is ascribed to the LTI opportunity? The Executive Chair is awarded performance rights worth 100% of TFR. Other Senior Executive KMPs are awarded performance rights worth 80% of their TFR. LTI performance criteria are designed to target 50% vesting of awarded performance rights over time. Award opportunities and targeted vesting outcomes are based on industry benchmarks to achieve the remuneration policy intent of positioning TFR at the 50th market percentile. What were the LTI performance criteria for the year ended 30 June 2024? Performance Rights (performance period 1 July 2021 to 30 June 2024): – Achievement of first commercial shipment of zircon or ilmenite product from the Thunderbird Mineral Sands Project on or before 31 March 2024; – Construction of the Thunderbird Mineral Sands Project is completed on or before 30 June 2024 and in accordance with the total funding requirement for the Thunderbird Mineral Sands Project, as disclosed by the Company to the ASX on or before 30 June 2022; – Achievement of a minimum of 90% of throughput production capacity at the Thunderbird Mineral Sands Project, measured over a consecutive 10-day period on or before 30 June 2024. Share Options: (performance period 1 July 2023 to 30 June 2026): – Superior performance of Compound Annual Growth Rate (CAGR) calculated in respect of the Company’s share price, less the percentage CAGR calculated in respect of the S&P/ASX 300 Materials Index, calculated for the period commencing between 1 July 2023 and ending on 30 June 2026. Please refer to page 19 of the ASX Announcement titled “Notice of Annual General Meeting/Proxy Form” dated 9 October 2023 for further details. Remuneration Report (audited) continued 30 Sheffield Resources Limited Annual Report 2024
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