| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
At the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of Talos Energy Inc. (the “Company”) held on May 11, 2021, the Company’s stockholders approved the Talos Energy Inc. 2021 Long Term Incentive Plan (the “2021 LTIP”), which had previously been approved by the board of directors of the Company (the “Board”). No further awards will be granted under the Talos Energy Inc. Long Term Incentive Plan (the “2018 LTIP”).
The 2021 LTIP provides for potential grants of: (i) incentive stock options qualified as such under U.S. federal income tax laws (“ISOs”), (ii) stock options that do not qualify as ISOs (together with ISOs, “Options”), (iii) stock appreciation rights (“SARs”), (iv) restricted stock awards, (v) restricted stock units, (vi) awards of vested stock, (vii) dividend equivalents, (viii) other stock-based or cash awards and (ix) substitute awards (collectively, the “Awards”). Employees, non-employee directors and consultants of the Company and its affiliates are eligible to receive awards under the 2021 LTIP.
Subject to adjustment in the event of any distribution, recapitalization, stock split, merger, consolidation or other corporate event, the aggregate number of shares of the Company’s common stock that may be issued pursuant to Awards under the 2021 LTIP is equal to 8,639,415, and all such shares will be available for issuance upon the exercise of ISOs. The number of shares that may be issued pursuant to the 2021 LTIP is also subject to the share recycling and adjustment provisions described below.
If all or any portion of an Award, including an award granted under the 2018 LTIP that is outstanding as of the effective date of the 2021 LTIP (a “Prior Award”), expires or is cancelled, forfeited, exchanged, settled for cash or otherwise terminated without the actual delivery of shares, any shares subject to such Award or Prior Award will again be available for new Awards under the 2021 LTIP. A maximum of 2,911,299 shares of the Company’s common stock could become available for new Awards under the 2021 LTIP in addition to the 8,639,415 shares reserved under the 2021 LTIP in the unlikely event that all outstanding Prior Awards are cancelled, forfeited, exchanged, settled for cash or otherwise terminated without delivery of shares.
Any shares withheld or surrendered in payment of any taxes relating to Awards granted under the 2021 LTIP (other than Options or SARs) will be again available for new Awards under the 2021 LTIP. However, any shares (i) withheld or surrendered in payment of the exercise or purchase price or taxes related to an Option or SAR or (ii) repurchased on the open market with the proceeds from the exercise price of an Option, in each case, granted under the 2021 LTIP, will not be available for new Awards under the 2021 LTIP. Further, shares (x) tendered or withheld in payment of any exercise or purchase price of a Prior Award or taxes relating to a Prior Award, (y) subject to a stock option or stock appreciation right that was a Prior Award but were not issued or delivered as a result of the net settlement or net exercise of such stock option or stock appreciation right, or (z) repurchased on the open market with the proceeds of a stock option’s exercise price where such stock option was a Prior Award, in each case, granted under the 2018 LTIP, will not become available for new Awards under the 2021 LTIP.
The preceding summary of the 2021 LTIP does not purport to be a complete description of all provisions of the 2021 LTIP and should be read in conjunction with, and is qualified in its entirety by reference to, the complete text of the 2021 LTIP, which is filed herewith as Exhibit 10.1 and is incorporated into this Item 5.02 by reference.
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