8-K/A: Core Scientific, Two Seas Capital Ink Governance Pact

Core Scientific, Inc. has entered into a cooperation agreement with Two Seas Capital LP, leading to board appointments and governance changes.

Summary

• Core Scientific, Inc. (the Company) signed a Cooperation Agreement with Two Seas Capital LP (Two Seas) on February 18, 2026.
• The Company will appoint three new independent directors: one by March 15, 2026, a second by September 15, 2026, and a third prior to the 2027 Annual Meeting, all in consultation with Two Seas.
• The Board of Directors will not exceed 9 members until the 2027 Annual Meeting, nor decrease if it requires a new director's resignation, without Two Seas' consent.
• Current Chairman, Jordan Levy, will not seek re-election at the 2026 Annual Meeting due to a personal decision.
• One other current director will not be nominated for re-election at the 2027 Annual Meeting.
• Two Seas agreed to customary standstill provisions and voting commitments until the 2027 Annual Meeting, and a mutual non-disparagement clause for one year.
• Two Seas' beneficial ownership is capped at less than 9.9% of outstanding common shares during the standstill period.
• The Company will reimburse Two Seas for certain fees and expenses related to the agreement and past solicitations, up to an agreed amount.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development, as it formalizes a cooperation framework with a significant shareholder, potentially reducing future activist pressure and bringing new independent perspectives to the board, which can be beneficial for long-term governance and strategy.

Positives

• The agreement with Two Seas Capital LP, a significant shareholder, suggests a collaborative approach to corporate governance, potentially reducing activist pressure.
• The appointment of three new independent directors could enhance board independence and oversight.
• The mutual non-disparagement clause fosters a more constructive relationship between the Company and Two Seas.

Negatives

• The departure of the current Chairman, Jordan Levy, and another director by the 2027 Annual Meeting represents a loss of existing board experience.
• The Company is committed to reimbursing Two Seas for certain expenses, which is a cost to the Company.
• The agreement places restrictions on the Company's ability to increase or decrease board size without Two Seas' consent until the 2027 Annual Meeting.

Risks

• Potential for disagreements during the consultation process for appointing new independent directors.
• The standstill agreement and voting commitments from Two Seas are temporary, expiring at the 2027 Annual Meeting or after one year for standstill, potentially leading to renewed activist pressure thereafter.
• The Company's obligations regarding board size are constrained by Two Seas' consent until the 2027 Annual Meeting.

Future Outlook

The agreement outlines a structured plan for board refreshment and shareholder engagement through the 2027 Annual Meeting, aiming to foster stability and collaboration in corporate governance.

Management Comments

• Jordan Levy's decision not to stand for re-election was a personal one and is not due to any disagreement with the Company.

Industry Context

StockSavvy.ai notes that cooperation agreements with activist investors like Two Seas Capital LP are common mechanisms for companies to address shareholder concerns regarding governance, board composition, or strategic direction, often preempting or resolving proxy contests. This agreement suggests Core Scientific is proactively engaging with a significant shareholder to align interests and implement board changes, a trend seen across various industries where institutional investors increasingly demand greater oversight and independence.

Comparison to Industry Standards

• The appointment of three new independent directors aligns with best practices in corporate governance, which emphasize board independence and diverse perspectives, often seen in companies seeking to enhance shareholder value and oversight.
• The implementation of a standstill agreement and voting commitments from a significant shareholder like Two Seas Capital LP is a standard tool used to stabilize corporate governance during periods of board transition or strategic review, similar to agreements seen with companies like Salesforce (with Elliott Management) or Disney (with Trian Partners) in recent years, aiming to prevent disruptive proxy battles.
• The mutual non-disparagement clause is a common feature in such agreements, designed to maintain a constructive public dialogue between the company and the activist investor, mirroring similar provisions in agreements across the S&P 500.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: The agreement aims to address shareholder concerns, particularly from Two Seas Capital LP, potentially leading to improved governance and long-term value. The standstill and voting agreements provide stability.
• Board of Directors: Significant changes in composition and leadership are mandated, requiring adaptation from existing directors and integration of new members.
• Management: The changes in board oversight may influence strategic direction and operational focus.

Next Steps

• Appoint the first independent director by March 15, 2026.
• Appoint the second independent director by September 15, 2026.
• Elect a new Chairman of the Board promptly following the 2026 Annual Meeting.
• Appoint the third independent director prior to the 2027 Annual Meeting.
• File a Form 8-K and an amendment to Schedule 13D within one and two business days, respectively.

Key Dates

Recommendation

The cooperation agreement with Two Seas Capital LP introduces significant corporate governance changes, including board refreshment and a new Chairman. While these changes are generally positive for long-term stability and shareholder alignment, the immediate impact on the company's operational performance or strategic direction is not yet clear. The standstill agreement provides a period of reduced activist pressure, but investors should monitor the integration of new directors and the execution of any resulting strategic shifts before making a more definitive investment decision. The reimbursement of Two Seas' expenses is a minor negative, but the overall sentiment is neutral to slightly positive due to the structured approach to governance improvement.

Keywords

Core Scientific, Two Seas Capital, Cooperation Agreement, Corporate Governance, Board of Directors, Independent Directors, Shareholder Activism, SEC Filing, 8-K/A, CORZ, Standstill Agreement, Proxy Solicitation