| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensation Arrangements of Certain Officers. |
Appointment of Paul Goodfellow as President, Chief Executive Officer and Director
On February 2, 2025, the Board of Directors (the “Board”) of Talos Energy Inc. (the “Company”) appointed Mr. Paul R. Goodfellow to serve as the Company’s President, Chief Executive Officer and principal executive officer, effective March 1, 2025. The Board also appointed Mr. Goodfellow to serve as a member of the Board concurrently with his appointment as an executive officer.
Mr. Goodfellow, age 59, has over 34 years of experience at Shell plc (NYSE: SHEL) (“Shell”) both in the United Kingdom and the United States where he has held a series of positions from 1991 until his resignation from Shell in 2025, including most recently Executive Vice President and Group Chief Internal Auditor from August 2023 until joining the Company, and Executive Vice President, Deep Water, Shell Upstream, in Houston, Texas from April 2019 to August 2023 while he also served as the Chairman of the Board of Shell Midstream Partners GP LP (“Shell Midstream GP”) (formerly NYSE: SHLX) from October 2019 to August 2023 and a director beginning in October 2014. Mr. Goodfellow received a Bachelor of Science in Mining and Mineral Engineering in 1986 and a Doctor of Philosophy in Rock Mechanics in 1990, each from the Camborne School of Mines in the United Kingdom. Mr. Goodfellow has been a Chartered Engineer since 1990, a member of the UK Institute of Mining and Metallurgy since 1991 and a member of the Society of Petroleum Engineers since 2000.
There was no arrangement or understanding between Mr. Goodfellow and any other person(s) pursuant to which he was selected to be President and Chief Executive Officer of Company, and Mr. Goodfellow does not have any family relationships with any of the Company’s executive officers or directors. Mr. Goodfellow is not a party to any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
In connection with his appointment, the Company entered into an offer letter agreement with Mr. Goodfellow describing the terms and conditions of his employment with the Company (the “Offer Letter”). Pursuant to the terms of the Offer Letter, Mr. Goodfellow will be entitled to the following: (a) a base salary of $975,000, paid in accordance with the Company’s normal payroll practices (the “Base Salary”); (b) eligibility to earn an annual incentive award pursuant to the Company’s short-term incentive program with a target value of 125% of the Base Salary, based upon and subject to the achievement of performance objectives and other terms and conditions as determined by the Company; (c) in respect of calendar year 2025, awards under the Company’s Amended and Restated 2021 Long Term Incentive Plan (the “LTIP”) of (i) restricted stock units (“RSUs”) with a grant date value equal to approximately $2,250,000 (the “2025 RSU Award”) and (ii) performance share units (“PSUs”) with a target grant date value equal to approximately $2,250,000 (the “2025 PSU Award” and together with the 2025 RSU Award, the “2025 LTIP Awards”) and (d) no later than 15 days following his commencement of employment, awards under the LTIP of (i) RSUs with a grant date value equal to $800,000 (the “RSU Sign-On Award”) and (ii) PSUs with a grant date value equal to $1,600,000 (the “PSU Sign-On Award” and together with the RSU Sign-On Award, the “Sign-On Awards”). The terms and timing of grant of the 2025 LTIP Awards will be the same as those granted to other similarly situated executives. The RSU Sign-On Award will vest one-third on each of the first three anniversaries of the date of grant, subject to continued employment and compliance with applicable restrictive covenants through each such date. The PSU Sign-On Award will be eligible to vest and settle during the three year performance period beginning on the date of grant as to (y) 50% on the first trading day in which the closing price of the Company’s common stock is equal to or greater than $14.00 for sixty (60) consecutive trading days and (z) 50% on the first trading day in which the closing price of the Company’s common stock is equal to or greater than $16.00 for sixty (60) consecutive trading days.
Mr. Goodfellow is also eligible to participate in the Company’s employee benefit plans, including the Talos Energy Operating Company LLC Amended and Restated Executive Severance Plan (the “Severance Plan”) under which he will be designated a Tier 1 Executive (as defined in the Severance Plan), effective as of his commencement of employment. Additionally, so long as Mr. Goodfellow commences employment with the Company by March 1, 2025, he will receive a sign-on bonus (the “Sign-On Bonus”) of $100,000, payable in cash within fifteen (15) days of his commencement of employment. Upon Mr. Goodfellow’s relocation to Houston, Texas, the Company will also reimburse him up to (a) $60,000 in respect of his United Kingdom lease payments and (b) $50,000 for actual out-of-pocket moving expenses reasonably incurred and directly related to his relocation, in each case, subject to substantiation in accordance with the Company’s policies as in effect from time to time. To the extent Mr. Goodfellow is terminated for “cause” (as defined in the LTIP) or he resigns prior to the first anniversary of his commencement of employment, he will be obligated to repay the Company in cash the relocation reimbursements and the Sign-On Bonus.
