Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Executive Chairman Employment Agreement
On October 1, 2021, Tellurian Inc. ("Tellurian" or the "Company") entered into
an employment agreement with the Company's Executive Chairman, Charif Souki (the
"Executive Chairman Employment Agreement"). The Executive Chairman Employment
Agreement has an initial three-year term and will automatically renew for an
additional 12-month term at the end of the initial three-year term and each
subsequent one-year anniversary thereafter, unless terminated by the Company or
Mr. Souki pursuant to its terms.
The Executive Chairman Employment Agreement provides for an annual base salary
of $1,200,000, which is consistent with the level of Mr. Souki's cash
compensation for fiscal year 2021 and is subject to annual review by the board
of directors of the Company (the "Board"). In addition, the Executive Chairman
Employment Agreement provides for a discretionary annual cash bonus target of
150% of Mr. Souki's annual base salary, subject to a cap of 300% of Mr. Souki's
annual base salary and, with certain exceptions, Mr. Souki's continued
employment through the payment date of the annual cash bonus. Payment of any
such annual cash bonus will be based on Mr. Souki's and the Company's
performance, as determined by the Board (or a committee thereof) in its sole
discretion. The Executive Chairman Employment Agreement also provides that the
Company must reimburse Mr. Souki for business expenses incurred in carrying out
his duties and responsibilities under the agreement.
If Mr. Souki resigns for "good reason" or the Company terminates Mr. Souki's
employment without "cause" (in each case, as such term is defined in the
Executive Chairman Employment Agreement), then the Company must pay Mr. Souki
(i) any unpaid prior year annual bonus; (ii) a pro-rated portion of the annual
cash bonus for the year of termination, calculated based on actual performance;
and (iii) an amount of cash equal to two times the sum of Mr. Souki's (A) annual
base salary and (B) discretionary annual cash bonus target (such resulting
amount, the "Executive Chairman Severance Payments"), paid in substantially
equal installments over a 12-month period following the date of termination. If
Mr. Souki's employment is terminated for "good reason" or without "cause" on a
change of control or during the 12-month period thereafter, then the Executive
Chairman Severance Payments would be increased to an amount of cash equal to
three times (from two times) the sum of Mr. Souki's (A) annual base salary and
(B) discretionary annual cash bonus target and paid in a lump sum on the
sixtieth day following such termination.
The foregoing description of the Executive Chairman Employment Agreement does
not purport to be complete and is qualified in its entirety by reference to the
full text of the Executive Chairman Employment Agreement, which is filed as
Exhibit 10.1 to this report and incorporated herein by reference.
CEO Employment Agreement
Also on October 1, 2021, the Company entered into an employment agreement with
the Company's President and Chief Executive Officer, Octávio Simões (the "CEO
Employment Agreement"). The CEO Employment Agreement has an initial term through
June 5, 2024 (the "Initial CEO Term") and will automatically renew for an
additional 12-month term at the end of the Initial CEO Term and each subsequent
one-year anniversary thereafter, unless terminated by the Company or Mr. Simões
pursuant to its terms.
The CEO Employment Agreement provides for an annual base salary of $725,000,
which is consistent with Mr. Simões's current annual base salary and is subject
to annual review by the Board. In addition, the CEO Employment Agreement
provides for a discretionary annual cash bonus target of 125% of Mr. Simões's
annual base salary, subject to a cap of 218.75% of Mr. Simões's annual base
salary and, with certain exceptions, Mr. Simões's continued employment through
the payment date of the annual cash bonus. Payment of any such annual cash bonus
will be based on Mr. Simões's and the Company's performance, as determined by
the Board (or a committee thereof) in its sole discretion. The CEO Employment
Agreement also provides that the Company must reimburse Mr. Simões for business
expenses incurred in carrying out his duties and responsibilities under the
agreement.
Pursuant to the CEO Employment Agreement, the parties agreed to amend the terms
of Mr. Simões's restricted stock agreements covering a total of 2,000,000 shares
of Tellurian restricted stock and a cash incentive award agreement (together
with the restricted stock agreements, the "Award Agreements") providing for a
cash award of up to $5,000,000 (in each case vesting in one-third increments
upon an affirmative final investment decision by the Board ("FID") and the first
and second anniversaries of FID) to provide that (i) the continuous service
provisions of the Award Agreements will no longer apply to the applicable
restricted stock or cash awards thereunder after the Initial CEO Term, assuming
that Mr. Simões's employment has not terminated prior thereto, and (ii) if
Mr. Simões's employment terminates for any reason following the Initial CEO Term
and Mr. Simões fails to execute and deliver a release of claims in favor of the
Company and its subsidiaries after the date of termination, then the Company may
request that the stock or cash (net of tax withholding) awarded to Mr. Simões
under the Award Agreements be returned to the Company.
If Mr. Simões resigns for "good reason" or the Company terminates Mr. Simões's
employment without "cause" (in each case, as such term is defined in the CEO
Employment Agreement), then the Company must pay Mr. Simões (i) any unpaid prior
year annual bonus; (ii) a pro-rated portion of the annual cash bonus for the
year of termination, calculated based on actual performance; and (iii) an amount
of cash equal to two times the sum of Mr. Simões's (A) annual base salary and
(B) discretionary annual cash bonus target (such resulting amount, the "CEO
Severance Payments"), paid in substantially equal installments over a 12-month
period following the date of termination. If Mr. Simões's employment is
terminated for "good reason" or without "cause" on a change of control or during
the 12-month period thereafter, then the CEO Severance Payments would be
increased to an amount of cash equal to three times (from two times) the sum of
Mr. Simões's (A) annual base salary and (B) discretionary annual cash bonus
target and paid in a lump sum on the sixtieth day following such termination.
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The foregoing description of the CEO Employment Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
CEO Employment Agreement, which is filed as Exhibit 10.2 to this report and
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1†‡ Employment Agreement, effective as of October 1, 2021, by and between
Tellurian Inc. and Charif Souki
10.2†‡ Employment Agreement, effective as of October 1, 2021, by and between
Tellurian Inc. and Octávio Simões
104 Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL document (included as Exhibit 101)
† Management contract or compensatory plan or arrangement.
‡ Certain schedules or similar attachments to this exhibit have been omitted in
accordance with Item 601(a)(5) of Regulation S-K. The registrant hereby agrees
to furnish supplementally to the Securities and Exchange Commission upon
request a copy of any omitted schedule or attachment to this exhibit.
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