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Exhibit 10.3

MARATHON OIL CORPORATION
2019 INCENTIVE COMPENSATION PLAN

PERFORMANCE UNIT AWARD AGREEMENT
2021 - 2023 PERFORMANCE CYCLE

Section 16 Officer

1. Grant of Performance Units. Pursuant to this Award Agreement and the Marathon Oil Corporation 2019 Incentive Compensation Plan (the “Plan”), MARATHON OIL CORPORATION (the “Corporation”) hereby grants to [NAME] (the “Participant”), an employee of the Corporation or a Subsidiary, on _____________, 2021, [NUMBER] Performance Units, representing the right to receive shares of Common Stock, subject to the terms and conditions set forth in this Award Agreement and the Plan. The Participant has no legally binding right to any payment prior to the vesting of the Performance Units in accordance with the terms of this Award Agreement. 

2. Relationship to the Plan and Definitions. 

(a) This grant of Performance Units is subject to all of the terms, conditions and provisions of the Plan and administrative interpretations thereunder, if any, that have been adopted by the Committee. Except as defined in this Award Agreement, capitalized terms shall have the same meanings ascribed to them under the Plan. To the extent that any provision of this Award Agreement conflicts with the express terms of the Plan, the terms of the Plan shall control and, if necessary, the applicable provisions of this Award Agreement shall be hereby deemed amended so as to carry out the purpose and intent of the Plan. 

(b) For purposes of this Award Agreement:
 
“Employment” means employment with the Corporation or any of its Subsidiaries. For purposes of this Award Agreement, Employment shall also include any period of time during which the Participant is on Disability status.

“Forfeiture Event” means the occurrence of at least one of the following (a) the Corporation is required, pursuant to a determination made by the Securities and Exchange Commission or by the Audit and Finance Committee of the Board, to prepare a material accounting restatement due to the noncompliance of the Corporation with any financial reporting requirement under applicable securities laws as a result of misconduct, and the Committee determines that (1) the Participant knowingly engaged in the misconduct, (2) the Participant was grossly negligent with respect to such misconduct or (3) the Participant knowingly or grossly negligently failed to prevent the misconduct or (b) the Committee concludes that the Participant engaged in fraud, embezzlement or other similar misconduct materially detrimental to the Corporation.

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“Peer Group” means the following group of companies (in addition to the Corporation) and indices: Apache Corporation (APA), Cimarex Energy Co. (XEC), Continental Resources, Inc. (CLR), Devon Energy Corporation (DVN), Diamondback Energy, Inc. (FANG), EOG Resources, Inc. (EOG), Hess Corporation (HES), Murphy Oil Corporation (MUR), Ovintiv Inc. (OVV), Pioneer Natural Resources Company (PXD), the S&P 500 Energy Index (SPN01), and the S&P 500 Index (SP50). If, during the Performance Cycle, there is an announcement of any event that if completed would result in any Peer Group company (excluding the Corporation) either ceasing to exist or ceasing to be a company for which TSR can be calculated from publicly available information (a “Corporate Event”), then upon announcement of such Corporate Event, such company (or companies) shall no longer be a Peer Group member, and in determining the Vesting Percentage for these Performance Units, adjustments shall be made as set forth in Paragraph 3(b) below. 

“Performance Cycle” means the period from January 1, 2021 to December 31, 2023.  Notwithstanding the foregoing, if a Change in Control occurs before December 31, 2023, then the Performance Cycle shall be the period from January 1, 2021 to the last regular trading date immediately preceding the effective date of such Change in Control for purposes of the determination under Paragraph 3.

“Performance Unit” means an unfunded and unsecured right to receive a payment of shares of Common Stock determined in accordance with the terms of this Award Agreement and the Plan.

“Settlement Time” has the meaning set forth in Paragraph 4.

“Total Shareholder Return” or “TSR” means the rate of return achieved with respect to the company’s common stock as if: (i) $100 were invested in the company’s stock, assuming a purchase price equal to the average closing price for the ninety (90) calendar days immediately before the start of the Performance Cycle, (ii) all dividends paid during the Performance Cycle were reinvested into additional shares, and (iii) assuming the company’s stock is valued at the end of the Performance Cycle based on the average closing price during the final ninety (90) calendar days of the Performance Cycle.

“Vesting Percentage” means the percentage (between 0% and 200%) determined by the Committee in accordance with the procedures set forth in Paragraph 3 or Paragraph 8, as applicable, which shall be used to determine the value of each Performance Unit.

3. Determination of Vesting Percentage. 

(a) Except as provided in Paragraphs 6 and 8 of this Award Agreement, the Vesting Percentage will depend upon the Corporation's TSR relative to the TSR of the other companies and indices in the Peer Group. At its first regularly scheduled meeting following the close of the Performance Cycle, the

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Committee shall determine the Vesting Percentage as follows based on the TSR of the Corporation relative to the TSR of the other companies and indices in the Peer Group:

(1)If the Corporation is one of the top two in the Peer Group’s TSR ranking (i.e., has the highest or the second highest TSR), the Vesting Percentage shall be 200%.
(2)If the Corporation is one of the bottom two in the Peer Group’s TSR ranking (i.e., has the lowest or the next lowest TSR), the Vesting Percentage shall be 0%.
(3)If the Corporation is the third from bottom in the Peer Group’s TSR ranking, the Vesting Percentage shall be 35%.
(4)If the Corporation has any other position in the Peer Group’s TSR ranking (i.e., one that is not in the top two or the bottom three of the Peer Group’s TSR ranking results), linear interpolation will be used between 35% and 200%, based on the proportional relative position of the Company’s TSR between the TSR of the 2nd ranked company or index and the company or index with TSR ranked third from the bottom, to determine the applicable Vesting Percentage.

The following table illustrates the methodology:  
                        						
	TSR Ranking of Corporation	Vesting Percentage
	1st 
	200%
	2nd 
	200%
	3rd-10th 
	Determined by linear interpolation between 35% and 200%
	11th
	35%
	12th 
	0%
	13th 
	0%

(b) If, during the Performance Cycle, there is an announcement of a Corporate Event that results in one of the Peer Group companies ceasing to be a Peer Group member as set forth in the above “Peer Group” definition, then consistent with the original methodology, the Vesting Percentage shall be 200% for a TSR ranking in the top two of the new, smaller Peer Group, shall be 0% for a TSR ranking in the bottom two of the new, smaller Peer Group, shall be 35% for a ranking third from the bottom of the new, smaller Peer Group, and shall be determined using linear interpolation between 35% and 200% for other positions in the TSR ranking of the new, smaller Peer Group.  

(c) The Committee has sole and absolute authority and discretion to reduce the Vesting Percentage, including to zero, as it may deem appropriate (including, but not limited to, if the TSR calculated for the Performance Cycle is negative); provided, however, that if the Performance Units vest pursuant to

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2019 Plan – Section 16 Officer TSR PSU with 3-year cliff vesting (2021 grant)   

Paragraph 8, the Committee shall not reduce the Vesting Percentage as calculated pursuant to Paragraph 3(a) and, if applicable, Paragraph 3(b).

4. Vesting of Performance Units. Unless the Participant's right to the Performance Units is previously forfeited or vested in accordance with Paragraphs 5, 6, 7 or 8, as applicable, the Committee shall determine the Vesting Percentage following the close of the Performance Cycle. Following the Committee's determination, the Participant shall vest in the Performance Units and be entitled to receive a payment of shares of Common Stock equal to the product of (a) the number of Performance Units granted under this Award Agreement and (b) the Vesting Percentage, as determined by the Committee under Paragraph 3, issued in accordance with and subject to Paragraph 10. Such payment shall be made as soon as administratively feasible following the Committee's determination but, in any event, on or after January 1, 2024, and not later than March 15, 2024 (the “Settlement Time”). If, in accordance with the Committee's determination under Paragraph 3, the Vesting Percentage is zero, the Participant shall immediately forfeit any and all rights to the Performance Units. Upon the vesting and/or forfeiture of the Performance Units and settling the Performance Units (including, if applicable, a cash payment for Dividend Equivalents, as provided in Paragraph 9), if any, the rights of the Participant and the obligations of the Corporation under this Award Agreement shall be satisfied in full.

        5. Termination of Employment Other than due to Death or Retirement. If the Participant's Employment is terminated prior to the close of the Performance Cycle for any reason other than death or Retirement, the Performance Units shall be forfeited, and the rights of the Participant and the obligations of the Corporation under this Award Agreement shall be terminated. 
6. Vesting Upon Termination of Employment due to Death. If the Participant's Employment is terminated by reason of death prior to the close of the Performance Cycle, the Participant's right to receive the Performance Units shall vest in full as of the date of death, and the Vesting Percentage shall be 100%.  A payment in shares of Common Stock equal to the product of (a) the number of Performance Units granted under this Award Agreement, and (b) the Vesting Percentage, as determined under this Paragraph 6, shall be issued in accordance with and subject to Paragraph 10, on or after, but not later than thirty (30) days after, the Participant’s death and transferred to the Participant's designated beneficiary on file with the Plan’s third party stock plan administrator or, if none, to the Participant’s estate. With respect to any Dividend Equivalents payable pursuant to Paragraph 9, the Corporation shall pay in cash to the Participant’s estate, on or after, but not later than thirty (30) days after, the Participant’s death an amount equal to (i) the sum of the aggregate amounts of such Dividend Equivalents credited to the Participant, if any, multiplied by (ii) the number of related Performance Units that vest and are paid hereunder.  Such vesting and settling of the Performance Units (including, if applicable, a cash payment for Dividend Equivalents, as provided herein) shall satisfy the rights of the Participant and the obligations of the Corporation under this Award Agreement in full.

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2019 Plan – Section 16 Officer TSR PSU with 3-year cliff vesting (2021 grant)   

        7. Vesting Upon Termination of Employment due to Retirement. In the event of the Retirement of the Participant upon or after completion of half of the Performance Cycle, the Committee shall determine the Vesting Percentage following the close of the Performance Cycle. In determining the Vesting Percentage that is applicable to the Participant, the Committee shall consider the contributions of the Participant to the Corporation during the Performance Period, including the Participant’s assistance with transition of his or her responsibilities prior to Retirement and whether the Participant provided appropriate notice or his or her intent to retire.  Notwithstanding anything herein to the contrary, in the event the Committee determines that the Participant has accepted or intends to accept employment with a competitor of any business unit of the Corporation, the Vesting Percentage shall be zero.  Following the Committee's determination, the Participant shall vest in the Performance Units and be entitled to receive a payment in shares of Common Stock equal to the product of (a) the percentage equal to the days of Participant's Employment during the Performance Cycle divided by the total days in the Performance Cycle, (b) the number of Performance Units granted under this Award Agreement, and (c) the Vesting Percentage, as determined by the Committee under Paragraph 3, issued in accordance with and subject to Paragraph 10. With respect to any Dividend Equivalents payable pursuant to Paragraph 9, the Corporation shall pay in cash to the Participant an amount equal to (i) the sum of the aggregate amounts of such Dividend Equivalents credited to the Participant, if any, multiplied by (ii) the number of related Performance Units that vest and are paid hereunder as described in the preceding sentence.  Such payments shall be made upon the regularly scheduled Settlement Time. If, in accordance with the Committee's determination under Paragraph 3, the Vesting Percentage is zero, the Participant shall immediately forfeit any and all rights to the Performance Units. Upon the vesting and/or forfeiture of the Performance Units and the settlement of such Performance Units (including, if applicable, a cash payment for Dividend Equivalents, as provided herein), if any, the rights of the Participant and the obligations of the Corporation under this Award Agreement shall be satisfied in full.  In the event of the Retirement of the Participant before completion of half of the Performance Cycle, the Performance Units shall be forfeited as of the date of his or her termination of employment, and the rights of the Participant and the obligations of the Corporation under this Award Agreement shall be terminated.  
8. Vesting Upon a Change in Control. Notwithstanding anything herein to the contrary, upon the occurrence of a Change in Control prior to the end of the Performance Cycle, the Participant shall vest in the Performance Units in full, unless the Performance Units were previously forfeited or vested in accordance with Paragraphs 5, 6, 7 or 8, as applicable. The Vesting Percentage shall be the greater of (a) the percentage calculated as provided under Paragraph 3 or (b) 100%. A payment in shares of Common Stock equal to the product of (a) the number of Performance Units granted under this Award Agreement, and (b) the Vesting Percentage, as determined by the Committee under the preceding sentence, issued in accordance with and subject to Paragraph 10, shall be made on or after, but not later than thirty (30) days after, the Change in Control; provided, however, that if such Change in Control fails to qualify as a “change in control event” within the meaning of Treas. Regs. section 1.409A-3(i)(5), then the payment will be made upon the regularly scheduled Settlement Time (the applicable payment timing, the “Change in Control Settlement Time”). With respect to any Dividend Equivalents payable pursuant to Paragraph 9, the Corporation shall pay in cash to the Participant, upon the Change in Control Settlement Time, an amount

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2019 Plan – Section 16 Officer TSR PSU with 3-year cliff vesting (2021 grant)   

equal to (i) the sum of the aggregate amounts of such Dividend Equivalents credited to the Participant, if any, multiplied by (ii) the number of related Performance Units that vest and are paid hereunder.  Such vesting and settling of the Performance Units (including, if applicable, a cash payment for Dividend Equivalents, as provided herein) shall satisfy the rights of the Participant and the obligations of the Corporation under this Award Agreement in full.

9. Dividend Equivalents. With respect to each of the Performance Units granted under Paragraph 1, the Participant shall be credited with Dividend Equivalents equal to the amount per share of Common Stock of any ordinary cash dividends declared by the Board with record dates during the period beginning on the first day of the Performance Cycle and ending one calendar day prior to the date on which any related vested Performance Units are paid.  Except as otherwise provided in Paragraphs 6, 7 and 8, the Corporation shall pay in cash to the Participant an amount equal to (i) the sum of the aggregate amounts of such Dividend Equivalents credited to the Participant, if any, multiplied by (ii) the number of related Performance Units that vest and are paid hereunder, with such amount to be paid upon the regularly scheduled Settlement Time. Any Dividend Equivalents shall be forfeited as and when the related Performance Units are forfeited in accordance with the terms of the Award Agreement.

10.  Issuance of Shares.  During the period of time between the Grant Date and the earlier of the date on which the Performance Units vest or are forfeited, the Performance Units will be evidenced by a credit to a bookkeeping account evidencing the unfunded and unsecured right of the Participant to receive shares of Common Stock, subject to the terms and conditions applicable to the Performance Units under the Plan and this Award Agreement.  Upon the vesting of all or a portion of the Participant's Performance Units pursuant to this Award Agreement, a number of shares of Common Stock equal to the number of vested Performance Units shall be registered in the name of the Participant in accordance with the applicable timing set forth in Paragraphs 4, 6, 7 or 8 herein.  No fractional shares will be issued and any rights to fractional shares of Common Stock will be forfeited without compensation for such fractional shares.  

11. Repayment or Forfeiture Resulting from Forfeiture Event. 

(a) If there is a Forfeiture Event either while the Participant is employed or within two years after termination of the Participant's Employment, then the Committee may, but is not obligated to, cause some or all of the Participant's outstanding Performance Units to be forfeited by the Participant. 

(b) If there is a Forfeiture Event either while the Participant is employed or within two years after termination of the Participant's Employment and a payment has previously been made in settlement of Performance Units granted under this Award Agreement, the Committee may, but is not obligated to, require that the Participant pay to the Corporation an amount (the “Forfeiture Amount”) up to (but not in excess of) the amount paid in settlement of the Performance Units.

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2019 Plan – Section 16 Officer TSR PSU with 3-year cliff vesting (2021 grant)   

(c) This Paragraph 11 shall apply notwithstanding any provision of this Award Agreement to the contrary and is meant to provide the Corporation with rights in addition to any other remedy which may exist in law or in equity. This Paragraph 11 shall not apply to the Participant following the effective time of a Change in Control.

12. Taxes. In all cases the Participant will be responsible to pay all required withholding taxes associated with the Performance Units. Pursuant to Section 10 of the Plan, the Corporation or its designated representative (which may be a Subsidiary) shall have the right to withhold applicable taxes from the cash and Common Stock otherwise payable to the Participant, or from other compensation payable to the Participant, at the time of the vesting and delivery of such cash and Common Stock payment or such other time as may be required under applicable law, to sell or permit the sale of shares of Common Stock to pay such applicable taxes, or to take such other action as may be necessary in the opinion of the Corporation to satisfy all obligations for withholding.

13. No Stockholder Rights. The Participant shall in no way be entitled to any of the rights of a stockholder of the Corporation as a result of this Award Agreement. Specifically, the Performance Units do not have voting rights. 

14. Nonassignability. Upon the Participant's death, the Performance Units shall be paid out as provided in Paragraph 6 of this Award Agreement. Otherwise, the Participant may not sell, transfer, assign, pledge or otherwise encumber any portion of the Performance Units, and any attempt to sell, transfer, assign, pledge, or encumber any portion of the Performance Units shall have no effect.

15. No Employment Guaranteed. Nothing in this Award Agreement shall give the Participant any rights to (or impose any obligations for) continued Employment by the Corporation or any Subsidiary or successor thereto, nor shall it give such entities any rights (or impose any obligations) with respect to continued performance of duties by the Participant.

    16. Modification of Agreement. Any modification of this Award Agreement shall be binding only if evidenced in writing and signed by an authorized representative of the Corporation, provided that no modification may, without the consent of the Participant, adversely affect the rights of the Participant under this Award Agreement.  Without the consent of the Participant, this Award Agreement may be amended or supplemented (i) to cure any ambiguity or to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein or (ii) to add to the covenants and agreements of the Corporation for the benefit of the Participant or to add to the rights of the Participant or to surrender any right or power reserved to or conferred upon the Corporation in this Award Agreement; provided, in each case, that such changes or corrections shall not adversely affect the rights of the Participant under this Award Agreement without the Participant’s consent.  Additionally, however, notwithstanding the foregoing or anything to the contrary herein, without the consent of the Participant, this Award Agreement may be amended or supplemented to make such changes as the Corporation, upon

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2019 Plan – Section 16 Officer TSR PSU with 3-year cliff vesting (2021 grant)   

advice of counsel, (i) determines are necessary or advisable because of the adoption or promulgation of, or change in or of the interpretation of, any law or governmental rule or regulation, including any applicable federal or state securities or tax laws or (ii) determines are necessary or advisable for the Award either not to be subject to or to be compliant with Section 409A.  It is the intention that this Award either not be subject to or be compliant with Section 409A and shall be interpreted accordingly.

        17.  Data Privacy.  By accepting the Performance Units subject to the terms of this Award Agreement, the Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Participant’s personal data, including but not limited to items of data described in this Paragraph 17, by and among Marathon Oil Corporation and its Subsidiaries and affiliates, including the Participant’s employer, (collectively referred to as “Marathon Oil” in this Paragraph 17) for the exclusive purpose of implementing, administering and managing the Participant’s participation in the Plan. The Participant understands and acknowledges that Marathon Oil holds certain personal data about the Participant, including, but not limited to, the Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in Marathon Oil, details of all grants or any other entitlement to salary and other cash payments, and shares of stock or units awarded, canceled, forfeited, exercised, vested, unvested or outstanding in the Participant’s favor, for the purpose of implementing, administering and managing the Plan (which information is collectively referred to as “Data” for purposes of this Paragraph 17). The Participant understands and agrees that Data may be transferred to one or more third parties assisting Marathon Oil in the implementation, administration and management of the Plan, that these recipients may be located in the Participant’s country of citizenship, country of residence or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the Participant’s country of citizenship or country of residence. The Participant understands that he or she may request a list with the names and addresses of any recipients of the Data by contacting his or her local human resources representative.  The Participant, by acceptance of the Performance Units subject to the terms of this Award Agreement, authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Participant may elect to deposit shares or cash following the lapse of applicable restrictions, and reporting to applicable tax and other legal authorities.  The Participant understands that he or she may, at any time, view the Data, request additional information about the storage and processing of the Data, require any necessary amendments to the Data to correct inaccuracy, or refuse or withdraw the consent provided herein, without cost, by contacting the Participant's local human resources representative in writing.  The Participant understands that refusing or withdrawing the Participant’s consent may affect the Participant’s ability to participate in the Plan, and the Participant may obtain additional information about the consequences of refusing to consent or withdrawing consent by contacting his or her local human resources representative. 

[SIGNATURE PAGE FOLLOWS]

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2019 Plan – Section 16 Officer TSR PSU with 3-year cliff vesting (2021 grant)   

			
	Marathon Oil Corporation
	
	/s/ Lee M. Tillman
	Lee M. Tillman
	Chairman, President and
	Chief Executive Officer

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2019 Plan – Section 16 Officer TSR PSU with 3-year cliff vesting (2021 grant)talo-ex101_229.htm

Exhibit 10.1

TALOS ENERGY INC.

LONG TERM INCENTIVE PLAN

RESTRICTED STOCK UNIT GRANT NOTICE

Pursuant to the terms and conditions of the Talos Energy Inc. Long Term Incentive Plan, as amended from time to time (the “Plan”), Talos Energy Inc. (the “Company”) hereby grants to the individual listed below (“you” or the “Director”) the number of Restricted Stock Units (the “RSUs”) set forth below.  This award of RSUs (this “Award”) is subject to the terms and conditions set forth herein and in the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”) and the Plan, each of which is incorporated herein by reference.  Capitalized terms used but not defined herein shall have the meanings set forth in the Plan.

		
	
Director:
	
[________________]

	
Date of Grant:
	
[________________]

	
Total Number of Restricted Stock Units:
	
[________________]

	
Vesting Schedule:
	
[________________]

By your signature below, you agree to be bound by the terms and conditions of the Plan, the Agreement and this Restricted Stock Unit Grant Notice (this “Grant Notice”).  You acknowledge that you have reviewed the Agreement, the Plan and this Grant Notice in their entirety and fully understand all provisions of the Agreement, the Plan and this Grant Notice.  You hereby agree to accept as binding, conclusive and final all decisions or interpretations of the Committee regarding any questions or determinations that arise under the Agreement, the Plan or this Grant Notice.  This Grant Notice may be executed in one or more counterparts (including portable document format (.pdf) and facsimile counterparts), each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement.

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the Company has caused this Grant Notice to be executed by an officer thereunto duly authorized, and the Director has executed this Grant Notice, effective for all purposes as provided above.

 

	
TALOS ENERGY INC.

	
 
	
 

	
 
	
 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

 

 

	
DIRECTOR

	
 
	
 

	
 
	
 

	
Name:
	
 

 

 

 

 

1

 

 

EXHIBIT A

RESTRICTED STOCK UNIT AGREEMENT

This Restricted Stock Unit Agreement (together with the Grant Notice to which this Agreement is attached, this “Agreement”) is made as of the Date of Grant set forth in the Grant Notice to which this Agreement is attached by and between Talos Energy Inc., a Delaware corporation (the “Company”), and [________________] (the “Director”). Capitalized terms used but not specifically defined herein shall have the meanings specified in the Plan or the Grant Notice.

1.Award.  In consideration of the Director’s service to the Company or its Affiliates and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, effective as of the Date of Grant set forth in the Grant Notice (the “Date of Grant”), the Company hereby grants to the Director the number of RSUs set forth in the Grant Notice on the terms and conditions set forth in the Grant Notice, this Agreement and the Plan, which is incorporated herein by reference as a part of this Agreement. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.  To the extent vested, each RSU represents the right to receive one share of Stock, subject to the terms and conditions set forth in the Grant Notice, this Agreement and the Plan.  Unless and until the RSUs have become vested in the manner set forth in the Grant Notice, the Director will have no right to receive any Stock or other payments in respect of the RSUs.  Prior to settlement of this Award, the RSUs and this Award represent an unsecured obligation of the Company, payable only from the general assets of the Company.

2.Vesting of RSUs.  

(a)Except as otherwise set forth in Section 2(b), the RSUs shall vest in accordance with the vesting schedule set forth in the Grant Notice.  Unless and until the RSUs have vested in accordance with such vesting schedule, the Director will have no right to receive any dividends or other distribution with respect to the RSUs. In the event of the termination of the Director’s service relationship prior to the vesting of all of the RSUs (but after giving effect to any accelerated vesting pursuant to this Section 2), any unvested RSUs (and all rights arising from such RSUs and from being a holder thereof) will terminate automatically without any further action by the Company and will be forfeited without further notice and at no cost to the Company.

[________________].  

3.Dividend Equivalents.  In the event that the Company declares and pays a dividend in respect of its outstanding shares of Stock and, on the record date for such dividend, the Director holds RSUs granted pursuant to this Agreement that have not been settled, the Company shall record the amount of such dividend in a bookkeeping account and pay to the Director an amount in cash equal to the cash dividends the Director would have received if the Director was the holder of record, as of such record date, of a number of shares of Stock equal to the number of RSUs held by the Director that have not been settled as of such record date, such payment to be made on the date on which such RSUs are settled in accordance with Section 4.  For purposes of clarity, if the RSUs (or any portion thereof) are forfeited by the Director pursuant to the terms of this Agreement, 

A-1

 

then the Director shall also forfeit the Dividend Equivalents, if any, accrued with respect to such forfeited RSUs.  No interest will accrue on the Dividend Equivalents between the declaration and payment of the applicable dividends and the settlement of the Dividend Equivalents.

4.Settlement of RSUs.  As soon as administratively practicable following the vesting of RSUs pursuant to Section 2, but in no event later than 30 days after such vesting date, the Company shall deliver to the Director (i) an amount of cash equal to the Fair Market Value of a number of shares of Stock equal to 40% of the RSUs subject to this Award and (ii) a number of shares of Stock equal to 60% of the RSUs subject to this Award. All shares of Stock issued hereunder shall be delivered either by delivering one or more certificates for such shares to the Director or by entering such shares in book-entry form, as determined by the Committee in its sole discretion.  The value of shares of Stock or any cash shall not bear any interest owing to the passage of time.  Neither this Section 4 nor any action taken pursuant to or in accordance with this Agreement shall be construed to create a trust or a funded or secured obligation of any kind. Notwithstanding the preceding provisions of this Section 4, the Director may elect to defer the delivery of the cash and shares of Stock in settlement of the RSUs pursuant to the Restricted Stock Units Deferral Election Form attached hereto as Exhibit B.  Any such deferral election shall be made in compliance with such rules and procedures as the Committee prescribes from time to time.  

5.Tax Withholding.  To the extent that the receipt, vesting or settlement of this Award results in compensation income or wages to the Director for federal, state, local and/or foreign tax purposes, the Director shall make arrangements satisfactory to the Company for the satisfaction of obligations for the payment of withholding taxes and other tax obligations relating to this Award, which arrangements include the delivery of cash or cash equivalents, Stock (including previously owned Stock, net settlement, a broker-assisted sale, or other cashless withholding or reduction of the amount of shares otherwise issuable or delivered pursuant to this Award), other property, or any other legal consideration the Committee deems appropriate. If such tax obligations are satisfied through net settlement or the surrender of previously owned Stock, the maximum number of shares of Stock that may be so withheld (or surrendered) shall be the number of shares of Stock that have an aggregate Fair Market Value on the date of withholding or surrender equal to the aggregate amount of such tax liabilities determined based on the greatest withholding rates for federal, state, local and/or foreign tax purposes, including payroll taxes, that may be utilized without creating adverse accounting treatment for the Company with respect to this Award, as determined by the Committee. The Director acknowledges that there may be adverse tax consequences upon the receipt, vesting or settlement of this Award or disposition of the underlying shares and that the Director has been advised, and hereby is advised, to consult a tax advisor. The Director represents that the Director is in no manner relying on the Board, the Committee, the Company or an Affiliate or any of their respective managers, directors, officers, employees or authorized representatives (including, without limitation, attorneys, accountants, consultants, bankers, lenders, prospective lenders and financial representatives) for tax advice or an assessment of such tax consequences.

6.Non-Transferability.  During the lifetime of the Director, the RSUs may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the shares of Stock underlying the RSUs have been issued, and all restrictions applicable to such shares have lapsed.  Neither the RSUs nor any interest or right therein shall be liable for the debts, contracts or engagements of the Director or his or her 

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successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means, whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

7.Compliance with Applicable Law.  Notwithstanding any provision of this Agreement to the contrary, the issuance of shares of Stock hereunder will be subject to compliance with all applicable requirements of applicable law with respect to such securities and with the requirements of any stock exchange or market system upon which the Stock may then be listed.  No shares of Stock will be issued hereunder if such issuance would constitute a violation of any applicable law or regulation or the requirements of any stock exchange or market system upon which the Stock may then be listed.  In addition, shares of Stock will not be issued hereunder unless (a) a registration statement under the Securities Act is in effect at the time of such issuance with respect to the shares to be issued or (b) in the opinion of legal counsel to the Company, the shares to be issued are permitted to be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary for the lawful issuance and sale of any shares of Stock hereunder will relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority has not been obtained.  As a condition to any issuance of Stock hereunder, the Company may require the Director to satisfy any requirements that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect to such compliance as may be requested by the Company.

8.Legends.  If a stock certificate is issued with respect to shares of Stock issued hereunder, such certificate shall bear such legend or legends as the Committee deems appropriate in order to reflect the restrictions set forth in this Agreement and to ensure compliance with the terms and provisions of this Agreement, the rules, regulations and other requirements of the SEC, any applicable laws or the requirements of any stock exchange on which the Stock is then listed.  If the shares of Stock issued hereunder are held in book-entry form, then such entry will reflect that the shares are subject to the restrictions set forth in this Agreement.

9.Rights as a Stockholder. The Director shall have no rights as a stockholder of the Company with respect to any shares of Stock that may become deliverable hereunder unless and until the Director has become the holder of record of such shares of Stock, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such shares of Stock, except as otherwise specifically provided for in the Plan or this Agreement.

10.Satisfaction of Claims.  Any issuance or transfer of shares of Stock or other property to the Director or the Director’s legal representative, heir, legatee or distributee, in accordance with this Agreement shall be in full satisfaction of all claims of such Person hereunder.  

11.No Right to Continued Service or Awards. Nothing in the adoption of the Plan, nor the award of the RSUs thereunder pursuant to the Grant Notice and this Agreement, shall 

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confer upon the Director the right to a continued service relationship with the Company or any Affiliate, or any other entity, or affect in any way the right of the Company or any such Affiliate, or any other entity to terminate such service relationship at any time. The grant of the RSUs is a one-time benefit and does not create any contractual or other right to receive a grant of Awards or benefits in lieu of Awards in the future. Any future Awards will be granted at the sole discretion of the Company.

12.Legal and Equitable Remedies. The Director acknowledges that a violation or attempted breach of any of the Director's covenants and agreements in this Agreement will cause such damage as will be irreparable, the exact amount of which would be difficult to ascertain and for which there will be no adequate remedy at law, and accordingly, the parties hereto agree that the Company and its Affiliates shall be entitled as a matter of right to an injunction issued by any court of competent jurisdiction, restraining the Director or the affiliates, partners or agents of the Director from such breach or attempted violation of such covenants and agreements, as well as to recover from the Director any and all costs and expenses sustained or incurred by the Company or any Affiliate in obtaining such an injunction, including, without limitation, reasonable attorneys’ fees. The parties to this Agreement agree that no bond or other security shall be required in connection with such injunction. Any exercise by either of the parties to this Agreement of its rights pursuant to this Section 12 shall be cumulative and in addition to any other remedies to which such party may be entitled. 

13.Notices.  All notices and other communications under this Agreement shall be in writing and shall be delivered to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

If to the Company, unless otherwise designated by the Company in a written notice to the Director (or other holder):

Talos Energy Inc.
Attn: Executive Vice President and General Counsel

333 Clay Street, Suite 3300

Houston, Texas 77002

	

	
If to the Director, at the Director’s last known address on filed with the Company. 

Any notice that is delivered personally or by overnight courier or telecopier in the manner provided herein shall be deemed to have been duly given to the Director when it is mailed by the Company or, if such notice is not mailed to the Director, upon receipt by the Director. Any notice that is addressed and mailed in the manner herein provided shall be conclusively presumed to have been given to the party to whom it is addressed at the close of business, local time of the recipient, on the fourth day after the day it is so placed in the mail. 

14.Consent to Electronic Delivery; Electronic Signature.  In lieu of receiving documents in paper format, the Director agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company may be required to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports and all other forms of communications) in 

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connection with this and any other Award made or offered by the Company. Electronic delivery may be via a Company electronic mail system or by reference to a location on a Company intranet to which the Director has access. The Director hereby consents to any and all procedures the Company has established or may establish for an electronic signature system for delivery and acceptance of any such documents that the Company may be required to deliver, and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature.

15.Agreement to Furnish Information.  The Director agrees to furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirement imposed upon the Company by or under any applicable statute or regulation.

16.Entire Agreement; Amendment.  This Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to the RSUs granted hereby; provided ̧ however, that the terms of this Agreement shall not modify and shall be subject to the terms and conditions of any employment, consulting and/or severance agreement between the Company (or an Affiliate or other entity) and the Director in effect as of the date a determination is to be made under this Agreement.  Without limiting the scope of the preceding sentence, except as provided therein, all prior understandings and agreements, if any, among the parties hereto relating to the subject matter hereof are hereby null and void and of no further force and effect.  The Committee may, in its sole discretion, amend this Agreement from time to time in any manner that is not inconsistent with the Plan; provided, however, that except as otherwise provided in the Plan or this Agreement, any such amendment that materially reduces the rights of the Director shall be effective only if it is in writing and signed by both the Director and an authorized officer of the Company.

17.Severability and Waiver.  If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of such provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect. Waiver by any party of any breach of this Agreement or failure to exercise any right hereunder shall not be deemed to be a waiver of any other breach or right. The failure of any party to take action by reason of such breach or to exercise any such right shall not deprive the party of the right to take action at any time while or after such breach or condition giving rise to such rights continues.

18.Clawback.  Notwithstanding any provision in the Grant Notice, this Agreement or the Plan to the contrary, to the extent required by (a) applicable law, including, without limitation, the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, any SEC rule or any applicable securities exchange listing standards and/or (b) any policy that may be adopted or amended by the Board from time to time, all shares of Stock issued hereunder shall be subject to forfeiture, repurchase, recoupment and/or cancellation to the extent necessary to comply with such law(s) and/or policy.

19.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of DELAWARE applicable to contracts made and to be performed therein, exclusive of the conflict of laws provisions of DELAWARE LAW.

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20.Successors and Assigns.  The Company may assign any of its rights under this Agreement without the Director’s consent.  This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth herein and in the Plan, this Agreement will be binding upon the Director and the Director's beneficiaries, executors, administrators and the Person(s) to whom the RSUs may be transferred by will or the laws of descent or distribution.

21.Headings. Headings are for convenience only and are not deemed to be part of this Agreement.

22.Counterparts.  The Grant Notice may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.  Delivery of an executed counterpart of the Grant Notice by facsimile or portable document format (.pdf) attachment to electronic mail shall be effective as delivery of a manually executed counterpart of the Grant Notice.

23.Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the RSUs granted pursuant to this Agreement are intended to be exempt from the applicable requirements of the Nonqualified Deferred Compensation Rules and shall be limited, construed and interpreted in accordance with such intent. Nevertheless, to the extent that the Committee determines that the RSUs may not be exempt from the Nonqualified Deferred Compensation Rules, then, if the Director is deemed to be a “specified employee” within the meaning of the Nonqualified Deferred Compensation Rules, as determined by the Committee, at a time when the Director becomes eligible for settlement of the RSUs upon his “separation from service” within the meaning of the Nonqualified Deferred Compensation Rules, then to the extent necessary to prevent any accelerated or additional tax under the Nonqualified Deferred Compensation Rules, such settlement will be delayed until the earlier of: (a) the date that is six months following the Director’s separation from service and (b) the Director’s death.  Notwithstanding the foregoing, the Company and its Affiliates make no representations that the RSUs provided under this Agreement are exempt from or compliant with the Nonqualified Deferred Compensation Rules and in no event shall the Company or any Affiliate be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Director on account of non-compliance with the Nonqualified Deferred Compensation Rules.

 

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EXHIBIT B

Restricted stock Units

DEFERRAL ELECTION FORM

 

Please complete this Restricted Stock Units Deferral Election Form (the “Deferral Election Form”) and return a signed copy to the Executive Vice President and General Counsel no later than 5:00 pm CT on December 31, 2021 (the “Election Deadline”).  

 

Name:______________________________________

 

NOTE: This Deferral Election Form will apply to all grants of Restricted Stock Units (the “RSUs”) you may receive from Talos Energy Inc. (the “Company”) from January 1, 2022 until such time as a new signed Deferral Election Form is received by the Company.  Any new signed Deferral Election Form must be received by the Company no later than December 31 of the calendar year preceding the calendar in which it is intended to apply.

 

1.Settlement of DSUs

 

In making this election, the following rules apply: 

 

	
 
	
•
	
Unless otherwise specified, capitalized terms used but not defined in this Deferral Election Form shall have the meaning attributed to them in the Restricted Stock Unit Grant Notice (the “Grant Notice”), the Restricted Stock Unit Agreement (the “Agreement”) or the Talos Energy Inc. Long Term Incentive Plan, as amended from time to time (the “Plan”), as applicable.  

 

	
 
	
•
	
You must complete this Deferral Election Form by the Election Deadline and select a payment date on which you will receive the cash and shares of Stock underlying the RSUs (and cash in respect of any Dividend Equivalents). You must complete this Deferral Election Form even if you want the cash and shares of Stock underlying your RSUs (and cash in respect of any Dividend Equivalents) to be paid to you at the default time specified in Section 4 of the Agreement (i.e., within 30 days following the vesting date).  

 

	
 
	
•
	
Notwithstanding the foregoing, if you fail to complete and timely submit this Deferral Election Form, the cash and shares of Stock underlying your RSUs (and cash in respect of any Dividend Equivalents) will be paid to you at the default time specified in Section 4 of the Agreement. 

 

2.Deferral Election

 

I hereby irrevocably elect to receive the cash and shares of Stock issuable pursuant to any RSUs (and any associated Dividend Equivalents) granted to me in 2022 and any future calendar years, until such time as a new signed Deferral Election Form is received by the Company, upon the earliest to occur of my death, “disability” (as defined in the Nonqualified 

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Deferred Compensation Rules), a Change in Control, a “separation from service” (as defined in the Nonqualified Deferred Compensation Rules) or (select only one of the following): 

 

☐(a)The default time specified in the Agreement.

☐(b)The date I incur a separation from service (as defined in the Nonqualified Deferred Compensation Rules).

☐(c)The fifth anniversary of the vesting of the RSUs. 

3. Signature

 

I understand that my rights to the cash and shares of Stock underlying the RSUs (and cash in respect of any Dividend Equivalents) are subject to the rights of the general creditors of the Company in the event of its insolvency, and cash in respect of any Dividend Equivalents will not bear any interest owing to the passage of time.  I further understand that this Deferral Election Form will become effective and irrevocable as of 5:00 pm CT on December 31, 2021, which is the Election Deadline. Once I have elected the time of settlement of my RSUs by submitting this Deferral Election Form, I understand that (a) the settlement election will be irrevocable and (b) the settlement election will control over any contrary payment time or event specified in Section 4 of the Agreement.  I acknowledge that, if I do not complete and timely submit this Deferral Election Form, the cash and shares of Stock underlying my RSUs (and cash in respect of any Dividend Equivalents) will be paid to me at the default time specified in the Agreement.

 

By executing this Deferral Election Form, I hereby acknowledge my understanding of, and agreement with, the terms and provisions set forth in this Deferral Election Form, the Grant Notice, the Agreement and the Plan.  

 

	
DIRECTOR

	
 
	
 

	
 
	
 

	
Name:
	
 

	
 
	
 

	
Date:
	
 

 

 

 

 

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