TELLURIAN INC. Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Incentive Compensation Program and Form Restricted Stock Amendment
OnJanuary 6, 2022 , the named executive officers ofTellurian Inc. ("Tellurian" or the "Company") were made eligible to participate in theTellurian Inc. Incentive Compensation Program (the "Incentive Compensation Program"). The Incentive Compensation Program allows the Company to award short-term and long-term performance-based incentive compensation to selected full-time employees of the Company, including the Company's named executive officers. In exchange for being made eligible to participate in the Incentive Compensation Program, the Company's President and Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, General Counsel, and Chief Accounting Officer agreed to amendments (each, a "Form Restricted Stock Amendment") to their existing equity-based award agreements, which amendments make uniform the definitions of "cause" and "change of control" in the award agreements and provide for all such awards to have "double trigger" vesting upon a change
of control of the Company.
Short-term and long-term incentive awards under the Incentive Compensation
Program may be earned with respect to each calendar year and are determined
based on target and maximum amounts established by the administrator of the
Incentive Compensation Program (the "Administrator"). The Compensation Committee
(the "Compensation Committee") of the board of directors (the "Board") of the
Company is expected to act as the Administrator. Below are the 2022 base salary,
target and maximum awards, and 2021 awards with respect to short-term and
long-term incentive awards under the Incentive Compensation Program for the
Company's named executive officers (provided that in the case of the Company's
Executive Chairman and President and Chief Executive Officer, no target or
maximum long-term incentive award has been approved):
Short-term incentive award Long-term incentive award
2022 base 2021 2021awardCharif Souki , Executive Chairman$ 1,200,000 $ 1,800,000 $ 3,600,000 $ 3,600,000 N/A N/A$ 14,062,250 Octávio M.C. Simões, President and CEO$ 1,000,000 $ 1,250,000 $ 2,187,500 $ 1,655,938 N/A N/A$ 5,437,500 R. Keith Teague , Chief Operating Officer$ 750,000 $ 750,000 $ 1,312,500 $ 1,015,000 $ 2,250,000 $ 4,500,000 $ 3,045,000 L. Kian Granmayeh , Chief Financial Officer$ 500,000 $ 500,000 $ 875,000 $ 805,000 $ 1,500,000 $ 3,000,000 $ 2,415,000 Daniel A. Belhumeur , General Counsel$ 500,000 $ 500,000 $ 875,000 $ 805,000 $ 1,500,000 $ 3,000,000 $ 2,415,000 Khaled A. Sharafeldin , Chief Accounting Officer$ 440,000 $ 440,000 $ 704,000 $ 659,200 $ 880,000 $ 1,760,000 $ 1,442,000
(1) On
effective as of
(from
case in exchange for the applicable named executive officer agreeing to the
aforementioned amendments to his existing equity-based award agreements.
The amount of a short-term incentive award or a long-term incentive award, as applicable, is determined by the Administrator in its discretion. The value of any long-term incentive award made under the Incentive Compensation Program is reduced by the amount of any cash payments received or to be received by a participant pursuant to such participant's construction incentive award agreement, if any, in the same calendar year as the calendar year in which such long-term incentive award is made under the Incentive Compensation Program. Short-term incentive awards under the Incentive Compensation Program are payable in cash upon or shortly after being awarded, and long-term incentive awards are payable as set forth in a long-term incentive award agreement to be entered into between the employee and the Company, the form of which will be determined by the Administrator. Unless otherwise provided by the applicable long-term incentive award agreement, a long-term incentive award granted pursuant to the Incentive Compensation Program will vest as follows, subject to the participant's continued employment with the Company or its affiliates and the participant's continued compliance with any restrictive covenants by which such participant is bound, through each vesting date: (i) one-third of the award vests on the grant date, (ii) one-third of the award vests on the first anniversary of the grant date and (iii) one-third of the award vests on the second anniversary of the grant date. The foregoing description of the Incentive Compensation Program and Form Restricted Stock Amendments does not purport to be complete and is qualified in its entirety by reference to the full text of the Incentive Compensation Program and Form Restricted Stock Amendments, copies of which are attached as Exhibits 10.1, 10.2 and 10.3 to this report and incorporated herein by reference.
Form Long-Term Incentive Award Agreement
The Company made the 2021 long-term incentive awards under the Incentive
Compensation Program to the Company's named executive officers pursuant to forms
of Long-Term Incentive Award Agreements (each, a "Form LTI Award Agreement").
Pursuant to the Incentive Compensation Program and the Form LTI Award
Agreements, long-term incentive awards for a calendar year for which performance
is measured will be made in the form of "Tracking Units," with each Tracking
Unit having a value generally equal to one share of Tellurian common stock. The
Form LTI Award Agreements provide that Tracking Units will vest as follows:
(i) one-third of the Tracking Units vests on the grant date ("Tranche 1"), (ii)
one-third of the Tracking Units vests on the first anniversary of the grant date
("Tranche 2") and (iii) one-third of the Tracking Units vests on the second
anniversary of the grant date ("Tranche 3"), subject to the provisions described
below regarding certain terminations of employment.
Pursuant to the Form LTI Award Agreements, Tranche 1 of an award is payable as
soon as practicable following the grant date of the Tracking Units, but in no
event later than March 15 of the year of grant, in a cash amount equal to the
closing Company common stock price on the trading day prior to the date of grant
of such award, multiplied by the number of Tranche 1 Tracking Units. Tracking
Units in Tranche 2 and Tranche 3 of an award that become vested are payable as
soon as practicable following the vesting date of the applicable tranche, but no
later than 30 days following such vesting date, in a cash amount equal to the
closing Company common stock price on the trading day prior to the vesting date
of the applicable tranche, multiplied by the number of vested Tracking Units
with respect to such tranche.
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The Form LTI Award Agreements provide that, in the event of (i) a participant's
termination of employment by the Company or its affiliates for Cause (as such
term is defined in the Form LTI Award Agreements) or (ii) in the case of the
Form LTI Award Agreement applicable to the Company's named executive officers
other than Mr. Sharafeldin , such participant's resignation without Good Reason
(as such term is defined in the applicable Form LTI Award Agreement), all
Tracking Units granted to such participant, whether vested or unvested, will be
automatically forfeited as of the date of such termination. In the event of a
participant's termination of employment with the Company or its affiliates due
to such participant's death or disability, by the Company or its affiliates
without Cause, or if applicable by the participant for Good Reason, subject to
the participant's execution and non-revocation of a release of claims and
continued compliance with all confidentiality obligations and restrictive
covenants such participant is subject to, any vested and unpaid Tracking Units
will be paid as set forth in the applicable Form LTI Award Agreement as if the
participant remained employed through the date of payment and any unvested
Tracking Units will remain eligible to vest and be paid following such
termination of employment as if the participant remained employed through the
applicable vesting dates.
The foregoing description of the Form LTI Award Agreements under the Incentive
Compensation Program does not purport to be complete and is qualified in its
entirety by reference to the full text of the Form LTI Award Agreement, which is
attached as Exhibit 10.4 to this report and incorporated herein by reference.
Restricted Stock Unit Award
Also on January 6, 2022 , the Compensation Committee approved the issuance of
174,942 restricted stock units to Mr. Granmayeh , the Company's Chief Financial
Officer. Each restricted stock unit represents a contingent right to receive on
or within thirty days after vesting one share of Tellurian common stock, cash of
equal value, or a combination of both, as determined by the Company in its sole
discretion. The restricted stock units were granted pursuant to a form of
restricted stock unit agreement under the Amended and Restated Tellurian Inc.
2016 Omnibus Incentive Compensation Plan that was filed as Exhibit 10.5 to the
Company's quarterly report on Form 10-Q for the quarterly period ended
September 30, 2021 (the "Form RSU Agreement"). The restricted stock units
generally will vest in one-third increments upon an affirmative final investment
decision by the Board with respect to the Driftwood liquefied natural gas
project and the first two anniversaries thereof.
The foregoing description of the restricted stock units does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Form RSU Agreement, which is incorporated herein by reference.
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Severance Plan
Also on January 6, 2022 , the Compensation Committee of the Board approved the
Tellurian Inc. Executive Severance Plan (the "Executive Severance Plan"), which
provides for the payment of cash severance and the provision of certain other
termination benefits to members of the executive committee other than Mr. Souki
and Mr. Simões upon an involuntary termination of employment from the Company or
its subsidiaries. The Executive Severance Plan will be administered by the
Compensation Committee of the Board.
Severance benefits are payable under the Executive Severance Plan only if the
participant is involuntarily terminated without Cause (as such term is defined
in the Executive Severance Plan) or the participant resigns for Good Reason (as
such term is defined in the Executive Severance Plan). Termination for any other
reason does not result in the payment of severance. The severance benefits
payable under the Executive Severance Plan for any termination initiated by
(i) the Company for any reason other than Cause or the participant's death or
disability or (ii) the participant for Good Reason, in either case occurring
prior to a change in control, are as follows: (A) 100% of base salary, paid in
installments over 12 months; (B) any earned but unpaid short-term incentive
under the Incentive Compensation Program; (C) 100% of the target short-term
incentive under the Incentive Compensation Program; (D) subsidized cost of COBRA
coverage for the lesser of (1) 12 months or (2) the duration of the COBRA
coverage; and (E) certain outplacement services for 12 months. The severance
benefits payable under the Executive Severance Plan for any qualifying
terminations occurring on, or within two years following, a change in control
are as follows: (i) 200% of base salary, paid in a lump sum; (ii) any earned but
unpaid short-term incentive under the Incentive Compensation Program; (iii) 200%
of the target short-term incentive under the Incentive Compensation Program;
(iv) subsidized cost of COBRA coverage for the lesser of (A) 18 months or
(B) the duration of the COBRA coverage; and (v) certain outplacement services
for 18 months.
Participation in the Executive Severance Plan requires adherence to the
Executive Severance Plan's restrictive covenants. These include (i) a
requirement not to disclose confidential information or use confidential
information to solicit Company clients, (ii) a 12-month non-solicitation of
Company employees, and (iii) a 12-month non-compete. Each participant in the
Executive Severance Plan must sign a full release of claims as a prerequisite to
receiving any severance pay under the Executive Severance Plan. The Company may
discontinue cash severance if a participant fails to abide by the restrictive
covenants.
Prior to a change in control, the Board may amend or terminate the Executive
Severance Plan in its discretion. In the event of a change in control, the
Executive Severance Plan may only be amended or terminated if such amendment
(i) is required by law, (ii) increases the benefits payable to participants or
otherwise improves their rights under the Executive Severance Plan, or (iii) is
consented to in writing by the affected participants.
The foregoing description of the Executive Severance Plan does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Executive Severance Plan, which is attached as Exhibit 10.5 to this report and
incorporated herein by reference.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 10.1†Tellurian Inc. Incentive Compensation Program, effective as ofNovember 18, 2021 10.2† Form of Omnibus Amendment to Outstanding Restricted Stock Agreement underTellurian Inc. Amended and Restated 2016 Omnibus Incentive Compensation Plan, effective as ofJanuary 6, 2022 10.3† Form of Omnibus Amendment to Outstanding Restricted Stock Agreement underTellurian Investments Inc. 2016 Omnibus Incentive Plan, effective as ofJanuary 6, 2022
10.4† Form Long-Term Incentive Award Agreement under the
Incentive Compensation Program
10.5†‡
2022
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 theSecurities and Exchange Commission upon request a copy of any omitted schedule or attachment to this exhibit. 5
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