DEF 14A

DEF 14A 1 d54247ddef14a.htm DEF 14A DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

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☒		Definitive Proxy Statement

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☐		Soliciting Material under §240.14a-12

Talos Energy Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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LOGO

SPINE AREA 2020 PROXY STATEMENT Technically Driven


NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

Meeting Date & Time:

Meeting Place:

Record Date:

May 11, 2021

10:00 a.m.

Three Allen Center

333 Clay Street, Suite 3300

Houston, Texas 77002

March 22, 2021

To the stockholders of Talos Energy Inc.:

Notice is hereby given that the 2021 Annual Meeting of Stockholders of Talos Energy Inc. (the “Company”) will be held at Three Allen Center, 333 Clay Street, Suite 3300, Houston, Texas 77002, on May 11, 2021, at 10:00 a.m., Central Time (the “Annual Meeting”). The Annual Meeting is being held for the following purposes:


1.	To elect to the Company’s Board of Directors the four Class III directors set forth in the accompanying Proxy Statement, each of whom will hold office until the 2024 Annual Meeting of Stockholders and until his or her successor is elected and qualified or until his or her earlier death, resignation or removal.	P. 5

2.	To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021.	P. 60

3.	To approve, on a non-binding advisory basis, the Company’s Named Executive Officer compensation for the fiscal year ended December 31, 2020.	P. 62

4.	To approve the Company’s 2021 Long Term Incentive Plan in order to permit the delivery of shares of the Company’s common stock pursuant to awards granted thereunder.	P. 64

5.	To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

Each outstanding share of the Company’s common stock (NYSE: TALO) entitles the holder of record at the close of business on March 22, 2021, to receive notice of and to vote at the Annual Meeting or any adjournments or postponements of the Annual Meeting.

We intend to hold the Annual Meeting in person. However, we are actively monitoring the coronavirus disease 2019 (“COVID-19”) outbreak, and we are sensitive to the public health and travel concerns our stockholders may have. In the event it is not possible or advisable to hold the Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting partially or solely by means of remote communication. Please monitor our Annual Meeting website at WWW.PROXYDOCS.COM/TALO for updated information. If you are planning to attend the Annual Meeting, please check the website ten days prior to the meeting date. If we do hold the Annual Meeting partially or solely by means of remote communication, we currently intend to resume holding in-person meetings for our 2022 Annual Meeting of Stockholders and thereafter, assuming normal circumstances. As always, we encourage you to vote your shares prior to the Annual Meeting.

WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, WE URGE YOU TO VOTE YOUR SHARES BY INTERNET, BY TELEPHONE, OR BY SIGNING, DATING AND RETURNING THE PROXY CARD YOU WILL RECEIVE. IF YOU CHOOSE TO ATTEND THE ANNUAL MEETING, YOU MAY STILL VOTE YOUR SHARES IN PERSON, EVEN THOUGH YOU HAVE PREVIOUSLY VOTED OR RETURNED YOUR PROXY BY ANY OF THE METHODS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT. IF YOUR SHARES ARE HELD IN A BANK OR BROKERAGE ACCOUNT, PLEASE REFER TO THE MATERIALS PROVIDED BY YOUR BANK OR BROKER FOR VOTING INSTRUCTIONS.

ALL STOCKHOLDERS ARE EXTENDED A CORDIAL INVITATION TO ATTEND THE ANNUAL MEETING.

Talos Energy Inc.

Three Allen Center

333 Clay Street, Suite 3300

Houston, Texas 77002

By Order of the Board of Directors,

LOGO

Houston, Texas

April 6, 2021

Neal P. Goldman

Chairman of the Board

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

STOCKHOLDER MEETING TO BE HELD ON MAY 11, 2021: THIS PROXY STATEMENT, THE PROXY CARD

AND OUR ANNUAL REPORT ARE AVAILABLE AT WWW.PROXYDOCS.COM/TALO.

TABLE OF CONTENTS


About the Annual Meeting			1
Proposal One: Election of Directors			5
Directors and Executive Officers			8
Meetings and Committees of Directors			18
Compensation Committee Report			21
Executive Compensation			22
CEO Pay Ratio			47
Compensation Committee Interlocks and Insider Participation			48
Corporate Governance			49
Security Ownership of Certain Beneficial Owners and Management			53
Certain Relationships and Related Party Transactions			56
Proposal Two: Ratification of Appointment of Independent Registered Public Accounting Firm			60
Proposal Three: Non-Binding Advisory Vote on the Company’s Named Executive Officer Compensation			62
Proposal Four: Approval of the Talos Energy Inc. 2021 Long Term Incentive Plan			64
Audit Committee Report			76
Stockholder Proposals; Identification of Director Candidates			77
Solicitation of Proxies			79
Availability of Certain Documents			79
Other Matters			79
Directions to Annual Meeting			80

TALOS ENERGY INC.

Three Allen Center

333 Clay Street, Suite 3300

Houston, Texas 77002

PROXY STATEMENT

2021 ANNUAL MEETING OF STOCKHOLDERS

The Board of Directors (the “Board of Directors” or the “Board”) of Talos Energy Inc. (the “Company”) requests your proxy for the 2021 Annual Meeting of Stockholders that will be held on May 11, 2021, at 10:00 a.m. Central Time, at Three Allen Center, 333 Clay Street, Suite 3300, Houston, Texas 77002 (the “Annual Meeting”). By granting the proxy, you authorize the persons named on the proxy to represent you and vote your shares at the Annual Meeting. Those persons will also be authorized to vote your shares at any adjournments or postponements of the Annual Meeting, and with respect to any other matters that properly come before the Annual Meeting or any adjournments or postponements thereof. This Proxy Statement, the enclosed proxy card and our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (our “Annual Report”) are being mailed to stockholders beginning April 6, 2021.

We intend to hold the Annual Meeting in person. However, we are actively monitoring the coronavirus disease 2019 (“COVID-19”) outbreak, and we are sensitive to the public health and travel concerns our stockholders may have. In the event it is not possible or advisable to hold the Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting partially or solely by means of remote communication. Please monitor our Annual Meeting website at WWW.PROXYDOCS.COM/TALO for updated information. If you are planning to attend the Annual Meeting, please check the website ten days prior to the meeting date. If we do hold the Annual Meeting partially or solely by means of remote communication, we currently intend to resume holding in-person meetings for our 2022 Annual Meeting of Stockholders and thereafter, assuming normal circumstances. As always, we encourage you to vote your shares prior to the Annual Meeting.

ABOUT THE ANNUAL MEETING

Purpose of the Annual Meeting

The purpose of the Annual Meeting is for our stockholders to consider and act upon the proposals described in this Proxy Statement and any other matters that properly come before the Annual Meeting or any adjournments or postponements thereof.

Proposals to be Voted Upon at the Annual Meeting

At the Annual Meeting, our stockholders will be asked to consider and vote upon the following four proposals:

•

Proposal ONE: To elect to the Board the four Class III directors set forth in this Proxy Statement, each of whom will hold office until the 2024 Annual Meeting of Stockholders and until his or her successor is elected and qualified or until his or her earlier death, resignation or removal.

•

Proposal TWO: To ratify the appointment of Ernst & Young LLP (“EY”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021.

•

Proposal THREE: To approve, on a non-binding advisory basis, the Company’s Named Executive Officer compensation, as disclosed in this Proxy Statement, for the fiscal year ended December 31, 2020.

•

Proposal FOUR: To approve the Company’s 2021 Long Term Incentive Plan in order to permit the delivery of shares of the Company’s common stock pursuant to awards granted thereunder.

In addition, any other matters that properly come before the Annual Meeting or any adjournments or postponements thereof will be considered. Management is presently aware of no other business to come before the Annual Meeting.

Recommendation of the Board

The Board recommends that you vote FOR the election to the Board of each of the director nominees (Proposal ONE) named in this Proxy Statement; FOR the ratification of the appointment of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2021 (Proposal TWO); FOR the approval, on a non-binding advisory basis, of the Company’s Named Executive Officer compensation for the fiscal year ended December 31, 2020 (Proposal THREE); and FOR the approval of the Company’s 2021 Long Term Incentive Plan (Proposal FOUR).

Voting at the Annual Meeting

Our common stock, par value $0.01 per share (our “common stock”), is the only class of securities that entitle holders to vote generally at meetings of the Company’s stockholders. Holders of our common stock will vote as a single class on all matters presented at the Annual Meeting. Each share of our common stock outstanding on the March 22, 2021 (the “Record Date”) entitles the holder to one vote at the Annual Meeting.

If on the Record Date you held shares of our common stock that are represented by stock certificates or registered directly in your name with our transfer agent, Computershare Trust Company, N.A. (“Computershare”), you are considered the stockholder of record with respect to those shares and Computershare is sending these proxy materials directly to you on our behalf. Proxies may also be solicited on behalf of the Board of Directors, without additional compensation, by our directors, officers and other regular employees. We have not retained a professional proxy solicitor or other firm to assist with the solicitation of proxies, although we may do so if deemed appropriate. As a stockholder of record as of the Record Date, you may vote in person at the Annual Meeting or by proxy. Whether or not you plan to attend the Annual Meeting in person, you may vote by internet or by telephone by following the instructions on your proxy card. Whether or not you plan to attend the Annual Meeting, we urge you to vote by way of the internet, by telephone or by filling out and returning the enclosed proxy card. If you submit a proxy but do not give voting instructions as to how your shares should be voted on a particular proposal at the Annual Meeting, your shares will be voted in accordance with the recommendations of the Board stated in this Proxy Statement. Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before its use by (1) delivering a written notice of revocation addressed to Talos Energy Inc., Attn: William S. Moss III, Three Allen Center, 333 Clay Street, Suite 3300, Houston, Texas 77002, (2) duly executing a proxy bearing a later date, (3) voting again by Internet or by telephone or (4) attending the Annual Meeting and voting in person. Your last vote or proxy will be the vote or proxy that is counted. Attendance at the Annual Meeting will not cause your previously granted proxy to be revoked unless you vote or specifically so request.

If on the Record Date you held shares of our common stock in an account with a brokerage firm, bank or other nominee, then you are a beneficial owner of the shares and hold such shares in “street name,” and these proxy materials will be forwarded to you by that organization. As a beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote the shares held in their account, and the nominee has enclosed or provided voting instructions for you to use in directing it how to vote your shares. The nominee that holds your shares, however, is considered the stockholder of record for purposes of voting at the Annual Meeting. Because you are not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you bring to the Annual Meeting a letter from your broker, bank or other nominee confirming your beneficial ownership of the shares as of the Record Date. Whether or not you plan to attend the Annual Meeting, we urge you to vote by following the voting instructions provided to you to ensure that your vote is counted.

If you are a beneficial owner and do not vote, and your broker, bank or other nominee does not have discretionary power to vote your shares, your shares may constitute “broker non-votes.” Broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal and generally occur because the broker (1) does not receive voting instructions from the beneficial owner and (2) lacks discretionary authority to vote the shares. Brokers and other nominees have discretionary authority to vote on the ratification of our independent public accounting firm for clients who have not provided voting instructions. However, without voting instructions from their clients, they cannot vote on “non-routine” proposals, including the election of directors. Shares that constitute broker non-votes will be counted for the purpose of establishing a quorum at the Annual Meeting. Voting results will be tabulated and certified by the inspector of elections appointed for the Annual Meeting.

A list of stockholders entitled to vote at the Annual Meeting will be available for inspection during ordinary business hours for a period of ten days before the Annual Meeting at our offices located at Three Allen Center, 333 Clay Street, Suite 3300, Houston, Texas 77002. The list will also be available for inspection at the Annual Meeting.

Quorum Requirement for the Annual Meeting

The presence, in person or by proxy, at the Annual Meeting of the persons holding shares of our outstanding common stock on the Record Date that represent a majority of the voting power of all outstanding shares of our common stock entitled to vote at the Annual Meeting will constitute a quorum, permitting us to conduct our business at the Annual Meeting. On the Record Date, there were 81,707,214 shares of our common stock held by 189 stockholders of record. Both abstentions (i.e., if you or your broker mark “ABSTAIN” on a proxy or voting instruction form, or if a stockholder of record attends the Annual Meeting, but does not vote (either before or during the Annual Meeting)) and broker non-votes will be considered to be shares present at the Annual Meeting for purposes of establishing a quorum.

Required Votes

Election of Directors. Each nominee for director will be elected by the affirmative vote of a majority of the votes cast with respect to such nominee’s election at the Annual Meeting. This means that the number of shares voted “for” a nominee must exceed the number of shares voted “against” that nominee. Abstentions and broker non-votes are not taken into account in determining the outcome of the election of directors.

Ratification of our Independent Public Accounting Firm. Approval of the proposal to ratify the Audit Committee’s appointment of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2021 requires the affirmative vote of a majority of the votes cast affirmatively or negatively at the Annual Meeting by the holders entitled to vote on the proposal. Abstentions and broker non-votes are not taken into account in determining the outcome of this proposal.

Approval of Named Executive Officer Compensation. Approval, on a non-binding advisory basis, of the Company’s Named Executive Officer compensation for the fiscal year ended December 31, 2020 requires the affirmative vote of a majority of the votes cast affirmatively or negatively at the Annual Meeting by the holders entitled to vote on the proposal. Abstentions and broker non-votes are not taken into account in determining the outcome of this proposal. This advisory vote on executive compensation is not binding on the Company, the Compensation Committee or the Board. However, the Compensation Committee and the Board will take into account the result of the vote when determining future executive compensation programs. This agenda item is also known as the “say-on-pay” vote.

Approval of the Company’s 2021 Long Term Incentive Plan. Approval of the Company’s 2021 Long Term Incentive Plan in order to permit the delivery of shares of the Company’s common stock pursuant to awards granted thereunder requires the affirmative vote of a majority of the votes cast affirmatively, negatively or by abstention at the Annual Meeting by the holders entitled to vote. Votes cast for or against or marked abstain with respect to this proposal will be counted as votes cast on the proposal. As a result, abstentions will have the same effect as a vote against this proposal. Further, for these purposes, broker non-votes are not treated as votes cast and will have no impact on the outcome of this vote.

Resignation Policy

In the event of an uncontested election of directors (i.e., an election at which the number of nominees does not exceed the number of directors to be elected) that results in an incumbent director nominee receiving a greater number of votes “against” his election than votes “for” election, the resignation policy included in our Corporate Governance Guidelines requires that such nominee promptly tender his resignation to our Board of Directors.

The resignation policy permits the Board of Directors to delegate to a committee the responsibility to make recommendations regarding any such resignation tendered. The Board is required to take action with respect such resignation, taking into account any such committee recommendation (if applicable), and thereafter disclose the Board’s determination, as well as the rationale if the Board decided to reject such resignation.

Solicitation of Proxies

We will bear the cost of solicitation of proxies. This includes the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of our outstanding common stock. We may solicit proxies by mail, personal interview, telephone, or via the Internet through our directors, officers and other regular employees, who will receive no additional compensation for their services.

Default Voting

A proxy that is properly completed and submitted will be voted at the Annual Meeting in accordance with the instructions on the proxy. If you properly execute and submit a proxy, but do not provide any voting instructions, your shares will be voted FOR the election to the Board of each of the director nominees listed in Proposal ONE, FOR Proposal TWO, FOR Proposal THREE and FOR Proposal FOUR.

If any other business properly comes before the stockholders for a vote at the Annual Meeting, your shares will be voted in accordance with the discretion of the holders of the proxy. The Board of Directors knows of no matters, other than those previously stated, to be presented for consideration at the Annual Meeting.

PROPOSAL ONE: ELECTION OF DIRECTORS

Nominees for Election as Directors

At the recommendation of the Nominating & Governance Committee, the Board of Directors has nominated the following individuals for election as Class III directors of the Company, to serve for three-year terms beginning at the Annual Meeting and expiring at the 2024 Annual Meeting of Stockholders, and until either they are re-elected or their successors are elected and qualified or until their earlier death, resignation or removal:

Mr. Neal P. Goldman

Mr. Rajen Mahagaokar

Ms. Paula R. Glover

Ms. Christine Hommes



Neal P. Goldman Chairman of the Board Age: 51 Director Since: 2018 Committee Memberships: • Nominating & Governance		Mr. Goldman has served as the Chairman of our Board of Directors since May 2018 and was re-elected as Chairman of the Board on July 21, 2020. He previously served as the Chairman of the board of directors of Stone Energy Corporation from March 2017 to May 2018. Mr. Goldman is currently the Managing Member of SAGE Capital Investments, LLC, a consulting firm specializing in independent board of director services, turnaround consulting and strategic planning. Mr. Goldman also serves on the board of directors of Weatherford International plc. Mr. Goldman was a Managing Director at Och Ziff Capital Management, L.P. from 2014 to 2016 and a Founding Partner of Brigade Capital Management, LLC from 2007 to 2012. Prior to this, Mr. Goldman was a Portfolio Manager at MacKay Shields LLC and also held various positions at Salomon Brothers Inc., both as a mergers and acquisitions banker and as an investor in the high yield trading group. Throughout his career, Mr. Goldman has held numerous board representations, including roles as an independent member of the boards of directors of Lightsquared, Inc., Pimco Income Strategy Fund I & II and Catalyst Paper Corporation, as well as a member of the boards of directors of Ultra Petroleum Corp., Jacuzzi Brands, Inc. and NII Holdings, Inc. Mr. Goldman received a BA from the University of Michigan and an MBA from the University of Illinois. Based upon Mr. Goldman’s involvement in strategic planning and his experience on multiple boards, we believe that Mr. Goldman is a valuable member of our Board of Directors.

Rajen Mahagaokar Director Age: 35 Director Since: 2018 Committee Memberships: • Compensation		Mr. Mahagaokar has served as a member of our Board of Directors since May 2018. Mr. Mahagaokar is a Principal of Riverstone Holdings LLC (“Riverstone Holdings”) and joined Riverstone Holdings as an Associate in 2015. Prior to joining Riverstone Holdings, Mr. Mahagaokar was a co-founder and partner of Marka, L.L.C. Previously, Mr. Mahagaokar was an investment professional at Silver Lake Kraftwerk Fund, L.P.. Mr. Mahagaokar began his career in the Investment Banking Division at Goldman Sachs in the Natural Resources group and in the Urban Investment Group. He previously served on the board of directors of EP Energy Corporation and other private portfolio companies sponsored by Riverstone Holdings. He received his BA in Mathematical Economic Analysis from Rice University. We believe Mr. Mahagaokar’s energy industry background and experience in evaluating financial and strategic options and the operations of companies in our industry brings important experience and skill to our Board of Directors.



Paula R. Glover Director Nominee Age: 53		Ms. Glover is a director nominee to serve as a member of our Board of Directors. Since June 2017, Ms. Glover has served as a member of the board of directors of the Alliance to Save Energy (the “Alliance”), and since January 2021, she has served as President of the Alliance. Ms. Glover previously served as President and Chief Executive Officer of the American Association of Blacks in Energy (the “AABE”), a non-profit professional association focused on ensuring that African Americans and other minorities have input into the discussions and development of energy policy, regulations and environmental issues. Prior to this role, she served as AABE’s Vice President of Operations and Director of Communications. In March 2014, Ms. Glover was appointed by the U.S. Secretary of Energy to the National Petroleum Council where she continues to be a member. Ms. Glover is also a member of the boards of directors of Groundswell and the Keystone Policy Center and serves as trustee at Cardigan Mountain School. Ms. Glover’s experience includes more than 25 years in the energy industry, having held positions of increasing scope and responsibility across the consumer and community sides of the industry. In addition to these roles, Ms. Glover was the Community Awareness Director for the Regional YMCA of Western Connecticut. Ms. Glover received her B.S. in Marketing Management from the University of Delaware. We believe that Ms. Glover’s professional experience in the energy industry and her experience on multiple boards will make her a valuable member of our Board of Directors.

Christine Hommes Director Age: 36 Director Since: 2018 Committee Memberships: • Safety, Sustainability and Corporate Responsibility		Ms. Hommes has served as a member of our Board of Directors since May 2018 and previously served as a director of Talos Energy LLC from January 2016 to May 2018. Ms. Hommes joined Apollo Global Management, Inc. in January 2011 and is a Partner in the Natural Resources group. Prior to that time, Ms. Hommes was an Associate at First Reserve and prior to that, a member of the Power & Utilities Group at UBS. Ms. Hommes currently serves on the board of directors of Chisholm Oil & Gas Holdings, LLC, Momentum Minerals, Momentum Minerals II, Belvedere Royalties, LLC, Boardwalk Holdings, LLC (parent of Celeros Flow Technology), Freestone Midstream Holdings, LLC, Northwoods Energy LLC, Roundtable Energy Holdings, Spartan Acquisition Corp. II and Spartan Acquisition Corp. III. She previously served on the boards of directors of Tumbleweed Royalty, Roundtable Energy and Northwoods Energy. Ms. Hommes graduated summa cum laude from the University of Pennsylvania with a BS in Economics and a BAS in Systems Engineering. We believe that Ms. Hommes’ experience in evaluating financial and strategic options and the operations of companies in our industry make her a valuable member of our Board of Directors.

Messrs. Goldman and Mahagaokar and Ms. Hommes are currently serving as directors of the Company, and Ms. Glover has been nominated as a new Class III director of the Company. Mr. Trimble, a current Class III director, is not seeking re-election and will retire at the conclusion of the Annual Meeting. If Messrs. Goldman and Mahagaokar and Mmes. Glover and Hommes are elected to the Board, the size of the Board will remain at ten members. Biographical information for each director nominee is contained in the “Directors and Executive Officers” section below.

The Board of Directors has no reason to believe that its director nominees will be unable or unwilling to serve if elected. If a director nominee becomes unable or unwilling to accept nomination or election, the persons acting under your proxy will vote for the election of a substitute nominee, if any, that the Board of Directors recommends.

Stockholders’ Agreement

Pursuant to a Stockholders’ Agreement (the “Stockholders’ Agreement”) we entered into in connection with the business combination of Talos Energy LLC and Stone Energy Corporation (“Stone”) on May 10, 2018, as amended, (the “Stone Combination”), and our Amended & Restated Bylaws (“Bylaws”), the Board of Directors is to consist of ten members, and certain funds and other alternative investment vehicles managed by Apollo Management VII, L.P. and Apollo Commodities Management, L.P., with respect to Series I (the “Apollo Funds”) and certain entities controlled by or affiliated with Riverstone Energy Partners V, L.P. (the “Riverstone Funds,” and the Apollo Funds and the Riverstone Funds, each a “Stockholder Group”) will each independently have the right to designate, in connection with any annual or special meeting of our stockholders at which directors will be elected, (i) two persons for nomination by the Board of Directors for election to the Board (each, a “Nominee”) for so long as such Stockholder Group owns at least (A) 15% of our outstanding common stock or (B) 50% of the number of shares of our common stock issued to such Stockholder Group in connection with the Stone Combination, after appropriate adjustment for any stock split, subdivision, combination or reclassification of any shares (such shares with respect to each Stockholder Group, the “Initial Group Shares,” and collectively, the “Initial Shares”) and (ii) one Nominee for so long as such Stockholder Group owns (A) at least 5% but less than 15% of our outstanding common stock or (B) at least 50% of the number of Initial Group Shares.

Further, the Stockholders’ Agreement also provides that (i) for so long as the Apollo Funds and the Riverstone Funds collectively own at least (A) 50% of our outstanding common stock or (B) 80% of the number of Initial Shares, the Apollo Funds and the Riverstone Funds shall have the collective right to designate two Nominees, one of whom qualifies as an “independent” under the New York Stock Exchange (“NYSE”) listing standards (an “Independent Director”) and the other of whom must either be our Chief Executive Officer or also qualify as an Independent Director, and (ii) for so long as the Apollo Funds and the Riverstone Funds collectively own (A) less than 50% of our outstanding common stock but at least 60% of the Initial Shares or (B) less than 80% of the Initial Shares but at least 40% of our outstanding common stock, the Apollo Funds and the Riverstone Funds shall have the collective right to designate one Nominee, whom must either be our Chief Executive Officer or qualify as an Independent Director.

Pursuant to Amendment No. 1 to the Stockholders’ Agreement entered into as of February 24, 2020, in connection with the Company’s acquisition of certain U.S. Gulf of Mexico producing assets, exploration prospects and acreage, the Stockholders’ Agreement was amended to add certain affiliates of Riverstone Holdings as parties to the Stockholders’ Agreement and to provide that for purposes of calculating whether the affiliates of Riverstone Holdings satisfy certain thresholds related to board nomination rights, the Series A Convertible Preferred Stock of the Company will be considered on an as converted basis.

The Apollo Funds and the Riverstone Funds have agreed to vote their shares of our common stock in favor of any Nominees designated by the other Stockholder Group, and in accordance with the terms of the Stockholders’ Agreement with respect to all other Nominees. For additional information regarding the Stockholders’ Agreement and the Apollo Funds’ and the Riverstone Funds’ obligations with respect to voting in the election of nominees not designated by a Stockholder Group, see “Certain Relationships and Related Party Transactions—Historical Transactions with Affiliates—Stockholders’ Agreement” and the copy of the Stockholders Agreement filed with our Annual Report.

Vote Required

The election of each director in this Proposal ONE requires the affirmative vote of a majority of the votes cast by the holders entitled to vote in the election of directors. This means that the number of shares voted FOR a nominee must exceed the number of shares voted AGAINST that nominee. Neither abstentions nor broker non-votes will have any effect on the outcome of the election of directors.

Recommendation

The Board unanimously recommends that stockholders vote FOR the

election to the Board of each of the director nominees.

DIRECTORS AND EXECUTIVE OFFICERS

After the Annual Meeting, assuming the stockholders elect to the Board of Directors the director nominees set forth in “Proposal ONE: Election of Directors” above, the Board of Directors of the Company will be, and the Executive Officers of the Company are:


Name	Age		Title
Neal P. Goldman(3)		51	Chairman of the Board
Timothy S. Duncan		48	President and Chief Executive Officer, Director
Charles M. Sledge(1)(3)		55	Director
Robert M. Tichio(3)		43	Director
Olivia C. Wassenaar(2)		41	Director
John “Brad” Juneau(1)(4)		61	Director
Donald R. Kendall, Jr.(1)(2)		68	Director
Paula R. Glover		53	Director
Christine Hommes(4)		36	Director
Rajen Mahagaokar(2)		35	Director
Robert D. Abendschein		59	Executive Vice President and Head of Operations
John A. Parker		65	Executive Vice President of Exploration
Shannon E. Young III		50	Executive Vice President and Chief Financial Officer
William S. Moss III		51	Executive Vice President, General Counsel and Secretary
Gregory M. Babcock		37	Chief Accounting Officer

(1)	Member of the Audit Committee.

(2)	Member of the Compensation Committee.

(3)	Member of the Nominating & Governance Committee.

(4)	Member of the Safety, Sustainability and Corporate Responsibility Committee.

The Board of Directors consists of ten members, divided into three classes serving staggered three-year terms. Each year, the directors of one class stand for re-election as their terms of office expire. Messrs. Sledge and Tichio and Ms. Wassenaar are designated as Class I directors and their terms of office expire in 2022. Messrs. Duncan, Juneau and Kendall are designated as Class II directors and their terms of office expire in 2023. Messrs. Goldman and Mahagaokar and Mmes. Glover and Hommes are designated as Class III directors and, assuming the stockholders elect them to the Board as set forth in “Proposal ONE: Election of Directors” above, their terms of office will expire in 2024.

Set forth below is biographical information about each of the Company’s directors, director nominees and Executive Officers.

Our Directors


Neal P. Goldman Chairman of the Board Age: 51 Director Since: 2018 Committee Memberships: • Nominating & Governance		Mr. Goldman has served as the Chairman of our Board of Directors since May 2018 and was re-elected as Chairman of the Board on July 21, 2020. He previously served as the Chairman of the board of directors of Stone Energy Corporation from March 2017 to May 2018. Mr. Goldman is currently the Managing Member of SAGE Capital Investments, LLC, a consulting firm specializing in independent board of director services, turnaround consulting and strategic planning. Mr. Goldman also serves on the board of directors of Weatherford International plc. Mr. Goldman was a Managing Director at Och Ziff Capital Management, L.P. from 2014 to 2016 and a Founding Partner of Brigade Capital Management, LLC from 2007 to 2012. Prior to this, Mr. Goldman was a Portfolio Manager at MacKay Shields LLC and also held various positions at Salomon Brothers Inc., both as a mergers and acquisitions banker and as an investor in the high yield trading group. Throughout his career, Mr. Goldman has held numerous board representations, including roles as an independent member of the boards of directors of Lightsquared, Inc., Pimco Income Strategy Fund I & II and Catalyst Paper Corporation, as well as a member of the boards of directors of Ultra Petroleum Corp., Jacuzzi Brands, Inc. and NII Holdings, Inc. Mr. Goldman received a BA from the University of Michigan and an MBA from the University of Illinois. Based upon Mr. Goldman’s involvement in strategic planning and his experience on multiple boards, we believe that Mr. Goldman is a valuable member of our Board of Directors.

Timothy S. Duncan President and CEO, Director Age: 48 Director Since: 2018		Mr. Duncan has served as our President, Chief Executive Officer and as a member of our Board of Directors since May 2018. Mr. Duncan is a founder of Talos Energy LLC and served as its President, Chief Executive Officer and a member of its board of directors from April 2012 to May 2018. Prior to Talos Energy LLC, Mr. Duncan was the Senior Vice President of Business Development and a founder of Phoenix Exploration Company, LP (“Phoenix Exploration”) from 2006-2012. Prior to Phoenix Exploration, Mr. Duncan served as Manager of Reservoir Engineering and Evaluations for Gryphon Exploration Company. Mr. Duncan also worked in various reservoir engineering and portfolio evaluation functions for Amerada Hess Corporation, Zilkha Energy Company and Pennzoil E&P Company. Mr. Duncan received his BS in Petroleum Engineering from Mississippi State University, where he was honored in 2012 as a Distinguished Fellow of the College of Engineering. Mr. Duncan also received his MBA from the Bauer Executive Program at the University of Houston. He serves as Vice Chairman, a member of the board of directors, and on the Executive Committee of the National Ocean Industries Association (NOIA). Mr. Duncan also currently serves on the board of directors of Chesapeake Energy Corporation and the American Cancer Society CEOs Against Cancer Houston Chapter, along with his service on various academically focused advisory boards, including the College of Engineering Dean’s Advisory Council and the Foundation Board at Mississippi State University. Mr. Duncan was named as Ernst & Young Entrepreneur of the Year for the Energy and Energy Services sector in the Gulf Coast in June 2016. Based on Mr. Duncan’s significant experience as an officer of oil and gas companies, together with his training as a reservoir engineer and broad industry knowledge, we believe that he possesses the requisite skills to serve as a member of our Board of Directors.


Charles M. Sledge Director Age: 55 Director Since: 2018 Committee Memberships: • Nominating & Governance • Audit		Mr. Sledge has served as a member of our Board of Directors since May 2018. He previously served as a member of the board of directors of Stone Energy Corporation from March 2017 to May 2018. Mr. Sledge served as the Chief Financial Officer of Cameron International Corporation, an oilfield services company, from 2008 until its sale to Schlumberger Limited in 2016. Prior to that, Mr. Sledge served as the Corporate Controller of Cameron International Corporation from 2001 to 2008. Mr. Sledge has served on the boards of Vine Resources, Inc. since April 2017, Expro International since April 2018, where he serves as non-executive chairman, Weatherford International plc since December 2019, where he serves as non-executive chairman, and Noble Corporation since February 2021 where he serves as the chairman of the board. Mr. Sledge holds a BS in Accounting from Louisiana State University and is a graduate of the Harvard Business School Advanced Management Program. We believe that Mr. Sledge’s strong financial background, including his 20 years of experience as a financial executive, makes him a valuable member of our Board of Directors.

Robert M. Tichio Director Age: 43 Director Since: 2018 Committee Memberships: • Nominating & Governance		Mr. Tichio has served as a member of our Board of Directors since May 2018 and previously served as a director of Talos Energy LLC from April 2012 to May 2018. Mr. Tichio is a Partner at Riverstone Holdings and joined Riverstone Holdings in 2006. Prior to joining Riverstone Holdings, Mr. Tichio was in the Principal Investment group of Goldman Sachs, which manages the firm’s private corporate equity investments. Mr. Tichio began his career at J.P. Morgan in the Mergers & Acquisitions group, where he concentrated on assignments that included public company combinations, asset sales, takeover defenses and leveraged buyouts. In addition to serving on the boards of a number of Riverstone Holdings portfolio companies and their affiliates, Mr. Tichio has been a director of Centennial Resource Development, Inc. since October 2016, Pipestone Energy Corp. since January 2019, Decarbonization Plus Acquisition Corp. since August 2020 and Decarbonization Plus Acquisition Corp. II since December 2020 where he also serves as the Chief Executive Officer. Mr. Tichio previously served as a member of the board of directors of Gibson Energy from 2008 to 2013, Midstates Petroleum Company, Inc. from 2012 to 2015, Northern Blizzard Inc. from 2010 to 2017, and EP Energy Corporation from September 2013 to October 2020. He holds an MBA from Harvard Business School and a bachelor’s degree from Dartmouth College. We believe Mr. Tichio’s extensive energy industry background, particularly his expertise in mergers and acquisitions, brings important experience and skill to our Board of Directors.


Olivia C. Wassenaar Director Age: 41 Director Since: 2018 Committee Memberships: • Compensation		Ms. Wassenaar has served as a member of our Board of Directors since November 2018, and previously served in such role for a short duration in May 2018. Ms. Wassenaar also served as a member of the board of directors of Talos Energy LLC from April 2012 to May 2018. Ms. Wassenaar joined Apollo in August 2018, where she is currently Senior Partner, Co-Lead of the Natural Resources group. Prior to joining Apollo, Ms. Wassenaar was associated with Riverstone Holdings since 2008 and most recently served as a Managing Director, where she was involved in investments throughout the energy sector. Prior to joining Riverstone Holdings, Ms. Wassenaar was with Goldman, Sachs & Co. in the Global Natural Resources investment banking group. In this capacity, she focused on mergers, initial public offerings, and leveraged buyouts for energy, power and renewable energy companies. Previously, Ms. Wassenaar was a Junior Professional Associate at The World Bank Group in Washington, D.C. Ms. Wassenaar currently serves on the boards of Jupiter Resources, Ltd., Pegasus Optimization Partners, LLC, LifePoint Health, Inc., High Road Resources, LLC (f.k.a. American Petroleum Partners, LLC), AP Shale Logistics Holdco LLC (a.k.a Tidewater Logistics Operating LLC), Spartan Acquisition Corp. II and Spartan Acquisition Corp. III. She has also served on the board of directors of various private companies. Additionally, during the past five years, she has served on the boards of Northern Blizzard Resources Inc., USA Compression Partners, LP, Admiral Permian Resources, LLC, Hammerhead Resources Inc., Canadian Non-Operated Resources GP, Inc., Eagle Energy Exploration LLC, Vesta Energy Corp., Canera III, Niska Gas Storage Partners LLC and Apex Energy, LLC. She received her AB, magna cum laude from Harvard College and an MBA from the Wharton School at the University of Pennsylvania. We believe that Ms. Wassenaar’s experience in evaluating financial and strategic options and the operations of companies in our industry and her experience on multiple boards make her a valuable member of our Board of Directors.

John “Brad” Juneau Director Age: 61 Director Since: 2018 Committee Memberships: • Audit • Safety, Sustainability and Corporate Responsibility		Mr. Juneau has served as a member of our Board of Directors since May 2018. He previously served as a member of the board of directors of Stone Energy Corporation from March 2017 to May 2018. Mr. Juneau is the co-founder of Contango ORE, Inc. (“Contango”), a publicly traded gold exploration company for which he serves as the Chairman of the board of directors. He previously served as President and Chief Executive Officer of Contango from August 2012 to January 6, 2020. Mr. Juneau is the sole manager and the general partner of Juneau Oil and Gas, L.L.C., a company involved in the exploration and production of oil and natural gas. Prior to forming Juneau Exploration in 1998, Mr. Juneau served as Senior Vice President of Exploration for Zilkha Energy Company from 1987 to 1998. Prior to joining Zilkha Energy Company, Mr. Juneau served as a Staff Petroleum Engineer with Texas International Company for three years, where his principal responsibilities included reservoir engineering, as well as acquisitions and evaluations. Prior to that, he was a Production Engineer with Enserch Corporation in Oklahoma City. Mr. Juneau holds a BS in Petroleum Engineering from Louisiana State University. We believe that Mr. Juneau’s extensive energy industry background, particularly his expertise in reservoir engineering and involvement with exploration and production companies, make him a valuable member of our Board of Directors.


Donald R. Kendall, Jr. Director Age: 68 Director Since: 2018 Committee Memberships: • Compensation • Audit		Mr. Kendall has served as a member of our Board of Directors since May 2018. Since October 1998, Mr. Kendall has served as Managing Director and Chief Executive Officer of Kenmont Capital Partners, a private investment and advisory firm. Mr. Kendall previously served as President of Cogen Technologies Capital Company, a power generation firm, and concurrently as Chairman and Chief Executive Officer of Palmetto Partners, an investment management firm, from July 1993 to October 1998. Mr. Kendall previously served as a director of American Midstream Partners LP on its Audit and Conflict Committees. Mr. Kendall also previously served as a member of the board of directors and Compensation Committee of SolarCity Corporation and the chair of its Special and Audit Committees. Additionally, Mr. Kendall served as chair of the Audit, Compensation and Nominating and Governance Committees of privately held Stream Energy. Mr. Kendall received a BA in Economics from Hamilton College and an MBA from The Amos Tuck School of Business Administration at Dartmouth College. We believe that Mr. Kendall’s many years of executive management experience, including experience as a chief executive officer, and his experience on multiple boards, make him a valuable member of our Board of Directors.

Paula R. Glover Director Nominee Age: 53		Ms. Glover is a director nominee to serve as a member of our Board of Directors. Since June 2017, Ms. Glover has served as a member of the board of directors of the Alliance to Save Energy (the “Alliance”), and since January 2021, she has served as President of the Alliance. Ms. Glover previously served as President and Chief Executive Officer of the American Association of Blacks in Energy (the “AABE”), a non-profit professional association focused on ensuring that African Americans and other minorities have input into the discussions and development of energy policy, regulations and environmental issues. Prior to this role, she served as AABE’s Vice President of Operations and Director of Communications. In March 2014, Ms. Glover was appointed by the U.S. Secretary of Energy to the National Petroleum Council where she continues to be a member. Ms. Glover is also a member of the boards of directors of Groundswell and the Keystone Policy Center and serves as trustee at Cardigan Mountain School. Ms. Glover’s experience includes more than 25 years in the energy industry, having held positions of increasing scope and responsibility across the consumer and community sides of the industry. In addition to these roles, Ms. Glover was the Community Awareness Director for the Regional YMCA of Western Connecticut. Ms. Glover received her B.S. in Marketing Management from the University of Delaware. We believe that Ms. Glover’s professional experience in the energy industry and her experience on multiple boards will make her a valuable member of our Board of Directors.


Christine Hommes Director Age: 36 Director Since: 2018 Committee Memberships: • Safety, Sustainability and Corporate Responsibility		Ms. Hommes has served as a member of our Board of Directors since May 2018 and previously served as a director of Talos Energy LLC from January 2016 to May 2018. Ms. Hommes joined Apollo in January 2011 and is a Partner in the Natural Resources group. Prior to that time, Ms. Hommes was an Associate at First Reserve and prior to that, a member of the Power & Utilities Group at UBS. Ms. Hommes currently serves on the board of directors of Chisholm Oil & Gas Holdings, LLC, Momentum Minerals, Momentum Minerals II, Belvedere Royalties, LLC, Boardwalk Holdings, LLC (parent of Celeros Flow Technology), Freestone Midstream Holdings, LLC, Northwoods Energy LLC, Roundtable Energy Holdings, Spartan Acquisition Corp. II and Spartan Acquisition Corp. III. She previously served on the boards of directors of Tumbleweed Royalty, Roundtable Energy and Northwoods Energy. Ms. Hommes graduated summa cum laude from the University of Pennsylvania with a BS in Economics and a BAS in Systems Engineering. We believe that Ms. Hommes’ experience in evaluating financial and strategic options and the operations of companies in our industry make her a valuable member of our Board of Directors.

Rajen Mahagaokar Director Age: 35 Director Since: 2018 Committee Memberships: • Compensation		Mr. Mahagaokar has served as a member of our Board of Directors since May 2018. Mr. Mahagaokar is a Principal of Riverstone Holdings and joined Riverstone Holdings as an Associate in 2015. Prior to joining Riverstone Holdings, Mr. Mahagaokar was a co-founder and partner of Marka, L.L.C. Previously, Mr. Mahagaokar was an investment professional at Silver Lake Kraftwerk Fund, L.P. Mr. Mahagaokar began his career in the Investment Banking Division at Goldman Sachs in the Natural Resources group and in the Urban Investment Group. He previously served on the board of directors of EP Energy Corporation and other private portfolio companies sponsored by Riverstone Holdings. He received his BA in Mathematical Economic Analysis from Rice University. We believe Mr. Mahagaokar’s energy industry background and experience in evaluating financial and strategic options and the operations of companies in our industry brings important experience and skill to our Board of Directors.

Qualifications and Experience of Our Directors and Director Nominees

The members of our Board possess a broad variety of personal attributes, experience and skills giving our Board the depth and breadth necessary to effectively oversee management on behalf of our stockholders. Our Board is committed to diversity and the importance of different backgrounds, perspectives and views. The matrix below represents some of the key skills that our Board has identified as particularly valuable to the effective oversight of the Company and the execution of our corporate strategy. The matrix does not include all knowledge, skills, experience or other attributes of our directors and director nominees, which may be relevant and valuable to their service on our Board. The diversity of knowledge, skill, experience and attributes of our directors and director nominees, collectively, lends itself to a highly collaborative and effective Board.

LOGO

Board Diversity

Consistent with our ongoing commitment to creating a balanced Board with diverse viewpoints and deep industry expertise, our Board actively seeks to consider women and underrepresented director candidates for membership on the Board. After the Annual Meeting, assuming the stockholders elect to the Board of Directors the director nominees set forth in “Proposal ONE: Election of Directors,” our Board will include three women and two directors who are ethnically/racially diverse. This means that approximately 40% of our Board are directors who are diverse based on gender, race, ethnicity and/or nationality. Going forward, our Board hopes to continue to increase its commitment to seeking diverse perspectives and to overseeing an organization that is committed to creating a culture dedicated to diverse experiences, equitable treatment and inclusive behavior.

LOGO

Our Other Executive Officers


Robert D. Abendschein Executive VP and Head of Operations Age: 59 Officer Since: 2020		Mr. Abendschein has served as our Executive Vice President and Head of Operations since February 2020. Prior to joining the Company, Mr. Abendschein served as the Chief Executive Officer of Venari Resources LLC (“Venari”) from April 2018 to November 2019, where he was appointed by a consortium of private equity investors to lead the advancement of multiple globally recognized development projects (Anchor and Shenandoah) and managed all stages of strategy, exploration and business development activities. Mr. Abendschein previously served as the Chief Operating Officer of Venari from August 2017 to April 2018. Prior to joining Venari, Mr. Abendschein served 33 years with Anadarko Petroleum Corporation, (“Anadarko”) and predecessor companies, including as the Vice President of Worldwide Deepwater from March 2015 to August 2017, in which he led Anadarko’s worldwide offshore portfolio. He also served in other key executive roles at Anadarko, including as the Vice President of Exploration and Production Services from June 2013 to March 2015 and Vice President of Corporate Development from February 2010 to June 2013. Mr. Abendschein serves on the board of directors and Compensation Committee of SEACOR Marine Inc. and the boards of directors of the Cynthia Woods Mitchell Pavilion and Offshore Energy Center. Mr. Abendschein earned a BS in Petroleum Engineering from Texas A&M University.

John A. Parker Executive VP of Exploration Age: 65 Officer Since: 2018		Mr. Parker has served as our Executive Vice President of Exploration since May 2018. Mr. Parker is a founder of Talos Energy LLC and served as its Executive Vice President of Exploration from April 2012 to May 2018. Prior to Talos Energy LLC, Mr. Parker founded Phoenix Exploration in April 2006, where he served as Senior Vice President of Exploration and was responsible for Phoenix Exploration’s exploration program. Phoenix Exploration made several significant discoveries resulting in impactful reserve additions, which led to the sale of the company to a group of buyers led by Apache Corporation. Prior to Phoenix Exploration, Mr. Parker was Exploration Manager of the Texas Shelf at Gryphon Exploration Company, where he generated prospects and supervised the prospect generation of the Texas exploration team. Mr. Parker also worked as an exploration geologist for EOG Resources, Inc. in the Gulf of Mexico. Mr. Parker started his career at Shell Oil Company where he worked as an exploration geologist in the Gulf Coast onshore. He later worked exploring in international basins at Pecten, the international subsidiary of Shell Oil Company. Mr. Parker earned his BA from Louisiana State University and his MS in Earth Science from the University of New Orleans and has more than 34 years of industry experience.


Shannon E. Young III Executive VP and CFO Age: 50 Officer Since: 2019		Mr. Young has served as our Executive Vice President and Chief Financial Officer since May 2019. Previously Mr. Young served as Vice President and Chief Financial Officer of Sheridan Production Company, LLC (“Sheridan”) with responsibility for Sheridan’s finance organization, including accounting, treasury, tax, planning, marketing and information technology. Prior to joining Sheridan in August 2016, Mr. Young served in similar positions with Cobalt International Energy, Inc. and Talos Energy LLC. Previously, Mr. Young served as a Managing Director for the Global Energy Group at Goldman, Sachs & Co. from 2010 to 2014 and before that was an investment banker at Morgan Stanley from 1998 to 2010. Mr. Young earned a BBA in Finance from The University of Texas at Austin and an MBA with distinction from the Amos Tuck School of Business at Dartmouth College.

William S. Moss III Executive VP, General Counsel and Secretary Age: 51 Officer Since: 2018		Mr. Moss has served as our Executive Vice President, General Counsel and Secretary since May 2018. Mr. Moss previously served as Senior Vice President and General Counsel of Talos Energy LLC from May 2013 to May 2018. Prior to Talos Energy LLC, Mr. Moss was a partner at Mayer Brown LLP in Houston where he was the head of the Houston Corporate Practice. Mr. Moss joined Mayer Brown LLP in May 2005. At Mayer Brown LLP, Mr. Moss’s practice focused on mergers and acquisitions, securities offerings and general corporate and securities matters and he represented clients throughout the energy value chain. Mr. Moss joined Talos Energy LLC after having represented Talos Energy LLC as outside counsel in its initial formation and its subsequent acquisition of Energy Resource Technology, LLC from Helix Energy Solutions Group, Inc. in February of 2013. Mr. Moss also represented Phoenix Exploration in its initial formation in April 2006, acquisitions and ultimate sale to a group of buyers led by Apache Corporation. Prior to joining Mayer Brown LLP, Mr. Moss worked at Baker Botts, L.L.P. Mr. Moss has an AB from Dartmouth College, a M. Phil from Cambridge University and a J.D. from The University of Texas School of Law.

Gregory M. Babcock Chief Accounting Officer Age: 37 Officer Since: 2019		Mr. Babcock has served as our Chief Accounting Officer (Principal Accounting Officer) since August 2019. Previously, Mr. Babcock served as the Company’s Corporate Controller from May 2018 to August 2019. Prior to that, Mr. Babcock served as the Assistant Controller of Talos Energy LLC from September 2015 until the May 2018 business combination of Talos Energy LLC and Stone Energy Corporation pursuant to which Talos Energy LLC became a wholly owned subsidiary of the Company. Before his promotion to Assistant Controller, Mr. Babcock served as Financial Reporting Manager of Talos Energy LLC from May 2014 to September 2015. Prior to his tenure with Talos Energy LLC, Mr. Babcock worked for Deloitte & Touche, holding positions of increasing responsibility in audit and mergers and acquisitions transaction services. Mr. Babcock began his career with Deloitte & Touche in 2007. Mr. Babcock is a Certified Public Accountant and holds a MS in Finance and BBA in Accounting from Texas A&M University.

MEETINGS AND COMMITTEES OF DIRECTORS

The Board of Directors held twenty-six meetings, consisting of both regular and special meetings, during 2020. During 2020, each of our incumbent directors attended at least 75% of the meetings of the Board of Directors and the meetings of the committees of the Board of Directors on which that director served.

Executive Sessions. The Board of Directors holds regular executive sessions in which the Independent Directors meet without any non-independent directors or members of management. The purpose of these executive sessions is to promote open and candid discussion among the Independent Directors. The lead director, Mr. Goldman, presides at these meetings and provides the Board of Directors’ guidance and feedback to our management team.

The Board of Directors has four standing committees: the Audit Committee, the Compensation Committee, the Nominating & Governance Committee and the Safety, Sustainability and Corporate Responsibility Committee.

Audit Committee. The primary responsibilities of the Audit Committee are to oversee our accounting and financial reporting processes as well as our affiliated and subsidiary companies, and to oversee the internal and external audit processes. The Audit Committee also assists our Board of Directors in fulfilling its oversight responsibilities by reviewing the financial information that is provided to stockholders and others and the system of internal controls that management and the Board have established. The Audit Committee oversees the independent auditors, including their independence and objectivity. However, the Audit Committee members do not act as professional accountants or auditors, and their functions are not intended to duplicate or substitute for the activities of management and the independent auditors. The Audit Committee is empowered to retain independent legal counsel and other advisors as it deems necessary or appropriate to assist the Audit Committee in fulfilling its responsibilities, and to approve the fees and other retention terms of the advisors. The Audit Committee is also tasked with periodically reviewing all related party transactions in accordance with our applicable policies and procedures and making a recommendation to the Board regarding the initial authorization or ratification of any such transaction.

The responsibilities of the Audit Committee are further detailed in the “Audit Committee Charter” that is posted on our website, www.talosenergy.com, and the “Audit Committee Report” included in this Proxy Statement.

Pursuant to the Stockholders’ Agreement and our Bylaws, the Audit Committee must consist solely of “Company Independent Directors” until the date that the Stockholders’ Agreement terminates with respect to both the Apollo Funds and the Riverstone Funds. For additional information regarding the terms of the Stockholders’ Agreement, see “Proposal One: Election of Directors—Stockholders’ Agreement” and “Certain Relationships and Related Party Transactions—Historical Transactions with Affiliates—Stockholders’ Agreement.”

The members of the Audit Committee are Messrs. Sledge (Chairman), Kendall and Juneau. The Audit Committee held eight meetings during 2020.

Compensation Committee. Responsibilities of the Compensation Committee, which are discussed in detail in the “Compensation Committee Charter” that is posted on the Company’s website at www.talosenergy.com, include, among other duties, the responsibility to:

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periodically review and approve the compensation and other benefits for our employees, officers and Independent Directors;

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review and approve corporate goals and objectives relevant to the compensation of our executive officers in light of those goals and objectives, and setting compensation for these officers based on those evaluations;

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administer the issuance of stock awards under any stock compensation plans;

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review and discuss with the Company’s management the Compensation Discussion and Analysis included in this Proxy Statement;

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produce the Compensation Committee Report as required by Item 407(e)(5) of Regulation S-K included in this Proxy Statement;

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otherwise discharge the Board’s responsibilities relating to compensation of the Company’s executive officers and directors; and

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perform such other functions as the Board may assign to the Compensation Committee from time to time.

The Compensation Committee is delegated all authority of the Board of Directors as may be required or advisable to fulfill its purposes. The Compensation Committee may delegate to its Chairman, any one of its members or any subcommittee it may form, the responsibility and authority for any particular matter, as it deems appropriate from time to time under the circumstances. The Compensation Committee is also generally able to delegate authority to review and approve the compensation of our employees to certain executive officers, including with respect to stock option or stock appreciation rights grants made under any stock option plans, stock compensation plans or stock appreciation rights plans. Pursuant to the Stockholders’ Agreement and subject to certain limitations and qualifications, the Compensation Committee, among other things, determines compensation for our Chief Executive Officer and all executive officers who report directly to the Chief Executive Officer.

Meetings of the Compensation Committee may, at the discretion of the Compensation Committee, include members of the Company’s management, other members of the Board of Directors, consultants or advisors and such other persons as the Compensation Committee believes to be necessary or appropriate.

The Compensation Committee may, in its sole discretion, retain and determine funding for legal counsel, compensation consultants, as well as other experts and advisors (collectively, “Committee Advisors”), including the authority to retain, approve the fees payable to, amend the engagement with and terminate any Committee Advisor, as it deems necessary or appropriate to fulfill its responsibilities. The Compensation Committee assesses the independence of any Committee Advisor prior to retaining such Committee Advisor.

The members of the Compensation Committee are Messrs. Kendall (Chairman) and Mahagaokar and Ms. Wassenaar. The Compensation Committee held five meetings during 2020.

Nominating & Governance Committee. The Nominating & Governance Committee, subject to the terms of the Stockholders’ Agreement, assists the Board with respect to (i) the organization and membership and function of the Board, including the identification and recommendation of director nominees and the structure and membership of each committee of the Board, (ii) corporate governance principles applicable to us and (iii) our policies and programs that relate to matters of corporate responsibility. The Nominating & Governance Committee, subject to the terms of the Stockholders’ Agreement, reviews and makes recommendations to the Board regarding the composition of the Board of Directors and the structure, format and frequency of the meetings. The Nominating & Governance Committee also reviews and makes recommendations to the Board regarding the nature, composition and duties of the committees of the Board and will review and consider any stockholder-recommended candidates for nomination to the Board.

Additional information regarding the functions performed by the Nominating & Governance Committee is set forth in the “Corporate Governance” and “Stockholder Proposals; Identification of Director Candidates” sections included herein and also in the “Nominating & Governance Committee Charter” that is posted on the Company’s website at www.talosenergy.com.

Pursuant to the Stockholders’ Agreement and our Bylaws, the Nominating & Governance Committee is required to be composed of three directors, including at least two “Company Independent Directors,” until the date that the Stockholders’ Agreement terminates with respect to both the Apollo Funds and the Riverstone Funds. For additional information regarding the terms of the Stockholders’ Agreement, see “Proposal One: Election of Directors—Stockholders’ Agreement” and “Certain Relationships and Related Party Transactions—Historical Transactions with Affiliates—Stockholders’ Agreement.”

The members of the Nominating & Governance Committee are Messrs. Goldman (Chairman), Tichio and Sledge. The Nominating & Governance Committee held four meetings during 2020.

Safety, Sustainability and Corporate Responsibility Committee. In February 2021, the Board approved a name change of the Safety Committee to the Safety, Sustainability and Corporate Responsibility Committee to more prominently reflect the committee’s oversight of sustainability and corporate responsibility matters. The Safety, Sustainability and Corporate Responsibility Committee reviews our safety programs and policies and recommends any proposed changes to the Board, monitors our compliance with our safety programs and policies and reviews our safety statistics and reviews significant public policy and legislative and regulatory issues or trends related to safety matters and provides us input with respect to such policies, issues and trends. The Safety, Sustainability and Corporate Responsibility Committee is also expected to meet with our management to review the implementation and effectiveness of our safety programs and policies. Additionally, the Safety, Sustainability and Corporate Responsibility Committee is tasked with the oversight and management of our environmental, social and governance initiatives.

The current members of the Safety, Sustainability and Corporate Responsibility Committee are Messrs. Trimble (Chairman) and Juneau and Ms. Hommes. As noted above, Mr. Trimble will retire from the Board of Directors at the conclusion of the Annual Meeting. The Safety, Sustainability and Corporate Responsibility Committee plans to appoint Christine Hommes to serve as Chairman of the Safety, Sustainability and Corporate Responsibility Committee following the Annual Meeting. If the stockholders elect the director nominees set forth in “Proposal ONE: Election of Directors,” Paula R. Glover is expected to be appointed to the Safety, Sustainability and Corporate Responsibility Committee. The Safety Committee, which was renamed the Safety, Sustainability and Corporate Responsibility Committee, as noted above, held four meetings during 2020.

COMPENSATION COMMITTEE REPORT

The information contained in this Compensation Committee Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that the Company specifically incorporates such information by reference in such filing.

The Compensation Committee reviewed and discussed the Compensation Discussion and Analysis required by Item 402 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission (the “SEC”) with management of the Company and, based on such review and discussions, the Compensation Committee recommended to the Board that such Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report.

Compensation Committee of the Board of Directors:

Donald R. Kendall, Jr., Chairman

Olivia C. Wassenaar, Member

Rajen Mahagaokar, Member

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

This Compensation Discussion and Analysis identifies the elements of compensation and explains the compensation objectives and practices for the individuals identified in the following table, who are referred to herein as our “Named Executive Officers,” for the fiscal year ended December 31, 2020 (the “2020 Fiscal Year”).


Name		Principal Position
Timothy S. Duncan		President and Chief Executive Officer
Shannon E. Young III		Executive Vice President and Chief Financial Officer
Robert D. Abendschein		Executive Vice President and Head of Operations (1)
John A. Parker		Executive Vice President of Exploration
William S. Moss III		Executive Vice President and General Counsel
Stephen E. Heitzman		Former Executive Vice President and Chief Operating Officer (1)

(1)	Mr. Heitzman ceased to serve as our Executive Vice President and Chief Operating Officer effective as of February 17, 2020. Mr. Abendschein was appointed to succeed Mr. Heitzman and to serve as Executive Vice President and Head of Operations, effective as of the same date.

Responsiveness to Economic Environment

In response to the unprecedented disruption to the economy posed by the global COVID-19 pandemic and to our industry by the collapse of oil and natural gas prices in 2020, we took the following actions in 2020 to mitigate the impact of these events on the Company by positioning the Company for long-term growth while preserving our financial strength through this period of global uncertainty:

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Base salary increases approved by the Board in early March were never implemented;

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Discretionary matching contributions under our 401(k) plan were suspended in April;

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Reductions in force across all segments of the Company were implemented; and

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Payment of employer social security taxes were deferred in accordance with the Coronavirus, Aid, Relief and Economic Security Act (commonly referred to as the CARES Act).

Compensation Objectives and Practices

Our executive compensation program is designed to attract, retain and motivate talented executives who possess the knowledge and expertise to create long-term value for our stockholders. We structure our executive compensation program with a view towards promoting accountability to ensure that the interests of our management align with those of our stockholders. We believe that these goals are accomplished by tying components of our executive compensation program to measures of the Company’s short-term and long-term performance.

The chart below highlights several features of our executive compensation program.

What We Do

What We Don’t Do

✓ Pay for performance, including for sustained performance over multi-year performance periods

✓ Make a significant portion of compensation performance-based and at-risk

✓ Retain an independent compensation consultant

✓ Utilize an appropriate peer group in determining compensation elements and levels of pay

✓ Base acceleration of performance share unit awards on actual performance

✓ Maintain stock ownership guidelines

✓ Maintain a clawback policy

× No excessive perquisites

× No tax gross-ups

× No current dividend payments on unvested equity awards

× No single-trigger change in control payments or vesting of equity awards under our Long Term Incentive Plan

× No hedging or pledging of Company securities

× No individualized employment or severance agreements

Process for Setting Executive Compensation

Our Board determines and approves our executive compensation program based, in part, on the recommendations of the Compensation Committee and input from our independent compensation consultant and the executive officers.

Role of the Compensation Committee

Although the ultimate responsibility for executive compensation decisions lies with the Board, the Compensation Committee generally oversees our executive compensation program, and the Board’s decisions are typically made following a recommendation by the Compensation Committee.

The Compensation Committee is comprised of Donald R. Kendall, Jr. (Chairman), Rajen Mahagaokar and Olivia C. Wassenaar. Each member of the Compensation Committee meets the independence standards established by the NYSE. The Compensation Committee Charter generally provides the Compensation Committee with authority to (i) exercise oversight of our executive compensation policy, (ii) review, approve and recommend to the Board compensatory payments to our officers, (iii) review and modify decisions on individual non-officer employee compensation, (iv) review, modify and approve our peer companies, and (v) review and recommend to the Board the compensation for our non-employee directors. For more detailed information regarding the Compensation Committee, the current Compensation Committee Charter is posted under the “Corporate Governance & Board Committees” subsection of the “About Us” section of our website at www.talosenergy.com.

Role of the Compensation Consultant

During 2020, the Compensation Committee engaged Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant. Meridian provided advice to and worked alongside the Compensation Committee and the Board in structuring our executive compensation program for the 2020 Fiscal Year. Meridian provided the Compensation Committee with relevant market and peer group compensation data and information on current trends and developments regarding executive and director compensation. The information provided by Meridian was utilized by the Board and the Compensation Committee in making decisions regarding executive and director compensation.

Meridian reported directly and exclusively to the Compensation Committee and did not provide any other services to us, management or our affiliates. Meridian did not make compensation-related decisions for the

Compensation Committee, for the Board or otherwise with respect to us, and while the Compensation Committee and the Board generally reviewed and considered information and recommendations provided by Meridian, the Compensation Committee and the Board always retain the authority to make all compensation-related decisions. The Compensation Committee has the discretion to allow compensation consultants, including Meridian in 2020, to work directly with management in preparing or reviewing materials for the Compensation Committee’s consideration. During 2020, and after taking into consideration the factors listed in Section 303A.05(c)(iv) of the NYSE Listed Company Manual, the Compensation Committee concluded that neither it nor the Company has any conflicts of interest with Meridian and that Meridian is independent from management.

Role of the Executive Officers

Our Chief Executive Officer reviews compensation for all of our Named Executive Officers other than himself and makes compensation recommendations to the Compensation Committee and the Board; however the Board makes the final determinations with respect to each Named Executive Officer’s compensation. Other members of management, particularly our human resources and legal personnel, provide relevant data and guidance to the Compensation Committee and the Board, as requested, to assist them in making compensation determinations and implementing those decisions. Our Chief Executive Officer and our General Counsel attend select meetings of the Compensation Committee and the Board to provide relevant information and input, as appropriate. During executive sessions of the Compensation Committee or the Board, our Chief Executive Officer and our General Counsel are excused.

Peer Group

The companies that comprise the peer group reflect direct competitors in the oil and gas exploration and production industry against which we compete for business opportunities, investor capital and executive talent. Selection criteria utilized to evaluate the companies that comprise the peer group include: scope of operations; financial and operational metrics; and the availability of market compensation data. The Compensation Committee reviews the composition of the peer group annually and may consider modifications resulting from changes in business strategy, mergers and acquisitions, bankruptcies or other factors that may cause peer companies to no longer exist or to no longer be comparable.

Based on the application of the foregoing criteria, in 2020, the Compensation Committee and the Board, with input from Meridian, determined that the companies below reflect an appropriate peer group to inform decisions regarding 2020 compensation levels (the “2020 Peer Group”), which is different than the peer group utilized in determining relative total stockholder return for purposes of the performance share unit awards granted to the Named Executive Officers, as described below under “Elements of Compensation for the 2020 Fiscal Year—Long Term Incentive Awards”:


Bonanza Creek Energy, Inc.	Gulfport Energy Corporation	Oasis Petroleum Inc.
Callon Petroleum Company	HighPoint Resources Corporation	PDC Energy, Inc.
Carrizo Oil & Gas, Inc.	Jagged Peak Energy Inc.	QEP Resources, Inc.
Centennial Resource Development, Inc.	Kosmos Energy Ltd.	Southwestern Energy Company
Denbury Resources Inc.	Laredo Petroleum, Inc.	SRC Energy Inc.
EnVen Energy Corporation	Magnolia Oil & Gas Corporation	W&T Offshore, Inc.
Extraction Oil & Gas, Inc.	Matador Resources Company	Whiting Petroleum Corporation

The 2020 Peer Group reflects the following changes from the peer group used for 2019, based on the factors noted above:


Removed		Added
Approach Resources, Inc.		Centennial Resource Development, Inc.
EP Energy Corporation		Denbury Resources Inc.
		EnVen Energy Corporation
		Gulfport Energy Corporation
		Magnolia Oil & Gas Corporation
		PDC Energy, Inc.
		QEP Resources, Inc.
		Southwestern Energy Company

Peer Group Compensation Review

To inform decisions regarding the compensation of our Named Executive Officers for 2020, the Compensation Committee considered a competitive review of the 2020 Peer Group prepared by Meridian. The 2020 Peer Group review provided market data for each element of compensation, as well as information regarding the incentive plan designs and pay practices among the Peer Group. Compensation review data provided for each of our Named Executive Officers reflect the compensation paid to executives in similar positions at the companies in the 2020 Peer Group, based on Meridian’s proprietary oil and gas exploration and production industry survey database, supplemented by information in peer company public disclosures. The Compensation Committee used the compensation review as a reference point for assessing the overall competitiveness of our executive compensation program.

Setting Target Compensation

When setting 2020 target compensation levels for our Named Executive Officers, the Compensation Committee and the Board did not target any element of compensation, or overall compensation, to a particular benchmark level (e.g., median) of the 2020 Peer Group. Rather, the Compensation Committee used 2020 Peer Group data as one of several factors it takes into account when evaluating and setting each element of our executive compensation program. This helps to ensure that our compensation program is competitive with the market, which allows us to attract and retain executive officers with the requisite talent and experience to help us achieve our short- and long-term goals. The Compensation Committee and the Board will periodically review and adjust the peer group to ensure that the companies within the peer group are appropriate for use in making compensation decisions.

2020 Say-on-Pay Vote

Last year, our stockholders overwhelmingly approved, on a non-binding advisory basis, the compensation of our Named Executive Officers for the fiscal year ended December 31, 2019. Advisory votes in favor of such compensation were cast by over 98% of the votes cast affirmatively or negatively by the holders entitled to vote on such proposal. The Board and the Compensation Committee took the results of the “Say-on-Pay” vote into account when evaluating the compensation of our Named Executive Officers for the 2020 Fiscal Year. Based in part on the level of support from our stockholders, the Board and the Compensation Committee elected to generally maintain the overall structure of the compensation program for our Named Executive Officers during the 2020 Fiscal Year with only a few adjustments to the various components, which are described in this “Compensation Discussion and Analysis.” As discussed in more detail in Proposal THREE below, the Board has recommended that stockholders vote, on a non-binding advisory basis, to approve the compensation paid to our Named Executive Officers during the 2020 Fiscal Year, as described more fully below.

Elements of Compensation for the 2020 Fiscal Year

To maintain an appropriate balance between fixed and variable compensation and to ensure that a significant portion of each Named Executive Officer’s compensation is tied to the achievement of short-term and long-term goals, the Board, following the recommendation of the Compensation Committee, determined that the following compensatory elements were appropriate for our Named Executive Officers in the 2020 Fiscal Year:

•

Base salary;

•

Awards under our annual incentive program (“AIP”);

•

Long-term equity awards in the form of restricted stock units and performance share units;

•

Health and welfare and retirement benefits; and

•

Limited perquisites.

Base Salary

The base salaries provided to our Named Executive Officers are a fixed portion of their total compensation that reflects their responsibilities, expertise, experience and tenure.

After reviewing the base salaries of executive officers in the Peer Group and upon recommendation by the Compensation Committee, on March 5, 2020, the Board approved the following modified base salaries for each Named Executive Officer employed as of that date other than Mr. Abendschein, who had been appointed the preceding month, to better align their compensation with Peer Group practices: Mr. Duncan $800,000, Mr. Young $480,000, Mr. Parker $435,000, Mr. Moss $415,000. However, shortly after the approval of these increases oil and natural gas prices dropped significantly and the severity of the COVID-19 pandemic and the likely economic repercussions thereof became clear. As a result, the Board and our Named Executive Officers elected not to implement any base salary increases for our Named Executive Officers in 2020. Mr. Abendschein’s annualized base salary was determined by the Compensation Committee and the Board in connection with his engagement as our Executive Vice President and Head of Operations at a level in line with the compensation paid to similarly situated executives of the companies in our Peer Group. Mr. Heitzman’s annualized base salary was not adjusted during the 2020 Fiscal Year. The table below reflects the base salaries for the Named Executive Officers in 2020.


Name	2019 and 2020 Base Salary
Timothy S. Duncan	$	700,000
Shannon E. Young III	$	460,000
Robert D. Abendschein	$	475,000
John A. Parker	$	420,000
William S. Moss III	$	400,000
Stephen E. Heitzman (1)	$	415,000

(1)	For Mr. Heitzman, this amount reflects his base salary as of his separation date.

Annual Incentive Program

We provide annual incentive program (“AIP”) awards to motivate our Named Executive Officers to achieve specific financial, operational and strategic goals that are aligned with creation of shareholder value. Performance is measured on an annual basis relative to pre-established performance criteria.

Establishing 2020 Target Annual Incentive Program Awards

The target AIP award for each of our Named Executive Officers was set by the Board following discussions between and with the Compensation Committee and Meridian, and a review of the target AIP award opportunities for similarly-situated executives at companies in our 2020 Peer Group. The individual targets for the 2020 Fiscal Year, expressed as a percentage of base salary, are set forth in the following table for each of our Named Executive Officers. The individual targets were unchanged from the individual targets established for the 2019 fiscal year. The threshold amount and maximum amount that could become payable under the AIP for the 2020 Fiscal Year were 50% and 200% of each Named Executive Officer’s target, respectively.


Name	2020 Target AIP Awards (% of Base Salary)
Timothy S. Duncan		125	%
Shannon E. Young III		80	%
Robert D. Abendschein		80	%
John A. Parker		80	%
William S. Moss III		80	%
Stephen E. Heitzman		80	%

2020 Annual Incentive Program Measures and Goals

For the 2020 Fiscal Year, we issued AIP awards based on our achievement of the following performance measures:


Performance Measure:		Rationale for Selecting Performance Measure:
Financial Performance Measures (including free cash flow generation, Adjusted EBITDA, as described below, and the discounted cash on cash multiple)		Provides an incentive to achieve strong cash flow generation and accretive returns on invested capital, which are key drivers of shareholder value

Operational Performance Measures (including total production measured in thousands of barrels of oil equivalent per day (“MBoe/d”))		Provides an incentive to achieve total production goals critical to our growth and success

Health, Safety and Environment (“HSE”) Measures (including the number of incidents of non-compliance compared to the number of safety devices tested during offshore inspections and facility visits where rig or wellwork is being performed by the Bureau of Safety and Environmental Enforcement (“INC/Comp Ratio”) and the total recordable incident rate (“TRIR”))		Emphasizes the importance of safety as a critical aspect of our culture

Key Strategic Initiatives		Provides an incentive to achieve broader strategic goals and initiatives, outstanding individual performance, and to recognize other relevant factors

The Compensation Committee made certain changes to the composition and weighting of the performance measures from those used in the 2019 AIP award design. Changes included the elimination of total direct lease operating expense and general and administrative expense. The changes reflected an effort to streamline the program and put additional emphasis on earnings, cash flow, returns and key strategic initiatives. The Compensation Committee believes the AIP aligns our Named Executive Officers and our stockholders. The Compensation Committee retains the authority to adjust the performance measures.

2020 Achieved Performance and Payout

The weighting of these performance measures, the 2020 Fiscal Year threshold, target and maximum levels of performance for the 2020 Fiscal Year, the actual results for the 2020 Fiscal Year and the payout percentage for the 2020 Fiscal Year are set forth in the table below.


Performance Measure	Individual Weighting		2020 Fiscal Year Threshold		2020 Fiscal Year Target		2020 Fiscal Year Maximum		Actual Results for 2020 Fiscal Year		2020 Fiscal Year Weighted Payout Percentage
Financial Performance
Free Cash Flow Generation (1)		20%	$	100 MM	$	136 MM	$	165 MM	$	(93) MM		0%
Adjusted EBITDA (2)		15%	$	725 MM	$	764 MM	$	800 MM	$	430 MM		0%
Discounted Cash on Cash Multiple (3)		25%		1.80x		2.20x		2.50x		2.06x		21%
Operational Performance
Production		10%		66.8 mboe/d		69.5 mboe/d		72.0 mboe/d		54.6 mboe/d		0%
HSE Performance
INC/Comp Ratio		5%		0.030		0.020		0.015		0.007		10%
Total TRIR		5%		0.55		0.50		0.45		0.54		3%
Strategic Initiatives
Strategic Initiatives		20%										40%
Discretionary Increase												1%
PAYOUT PERCENTAGE				50%		100%		200%				75%

(1)	Free Cash Flow Generation represents Adjusted EBITDA less capital spend and debt service.

(2)

Adjusted EBITDA represents EBITDA plus non-cash write-down of oil and natural gas properties, loss on debt extinguishment, transaction related costs, the net change in the fair value of derivatives (mark to market effect, net of cash settlements and premiums related to these derivatives), non-cash (gain) loss on sale of assets, non-cash write-down of other well equipment inventory and non-cash equity based compensation expense. EBITDA represents net income (loss) plus interest expense, income tax expense (benefit), depreciation, depletion and amortization, and accretion expense.

(3)	Discounted Cash on Cash Multiple represents booked and audited proved and probable cash flows discounted at 10% of future cash flow streams (without invested capital), divided by the expected full cycle investment. This calculation does not include corporate charges such as G&A Expense.

Following the completion of 2020, the Compensation Committee reviewed the Company’s actual performance results relative to the goals established at the beginning of the year. During 2020, the COVID-19 pandemic dramatically reduced demand for oil and gas which resulted in a correspondingly dramatic decrease in oil and gas prices. Additionally, an extraordinary number of hurricanes and severe storms in 2020 forced us to repeatedly shut-in our production. Together, these challenges dramatically reduced our revenues and had a substantial impact on our results with respect to the performance measures established by the Compensation Committee for the 2020 Fiscal Year, as reflected in the table above. The threshold, target and maximum levels for each metric were established prior to the time the severity of the COVID-19 pandemic or the hurricane season was known. Consistent with the AIP’s design, no payment accrued with respect to any metric for which we did not achieve threshold performance.

The Compensation Committee also evaluated achievements relative to the Strategic Initiatives set forth for the year, and other factors that influenced the overall performance of the Company. When determining the amount of the payout percentage for the Strategic Initiatives for 2020, the Compensation Committee wanted to ensure that the total payout for the AIP plan would appropriately reflect both our shareholders’ investment experience during 2020 and the exceptional leadership and accomplishments shown by our Named Executive Officers under incredibly difficult circumstances. The Compensation Committee considered our acquisition activity, the execution of multiple debt and equity capital market transactions, the completion of the Company’s first ESG report, and the strong organizational and cultural stability during an unprecedented year. The

Compensation Committee placed particular emphasis on the quick and decisive actions taken by our Named Executive Officers to minimize the impact of volatility in commodity price markets as a result of the COVID-19 pandemic and the exceptionally high downtime resulting from a historic hurricane season in 2020. After considering all of these factors, the Compensation Committee determined that the payout percentage for Strategic Initiatives should be set at the maximum level. They also used their discretion to increase the overall payout slightly from 74% to 75% for most of our Named Executive Officers.

The last year was challenging for our Company and our shareholders but our management team worked quickly and effectively to navigate each crisis as it unfolded to mitigate potential losses. Our AIP is structured to include seven different performance measures because our Compensation Committee does not believe that any single metric accurately reflects the overall performance of our business and they want to motivate our Named Executive Officers to achieve excellence in several different categories. We believe that the AIP functioned exactly as designed during 2020 by providing no payout where performance was lacking, whatever the reason, and rewarding exceptional performance when achieved.

AIP awards for our Named Executive Officers are calculated by multiplying the payout percentage by each Named Executive Officer’s target award. The Compensation Committee retains the discretion to increase (including above 200%) or reduce the payout percentage of each Named Executive Officer’s AIP award. The table below includes the target AIP awards, payout percentages, and actual AIP award payments for 2020.


Name	2020 Target AIP Award ($)		Payout Percentage			Actual AIP Award Payment
Timothy S. Duncan (1)	$	875,000		72	%	$	632,250
Shannon E. Young III (1)	$	368,000		82	%	$	300,000
Robert D. Abendschein	$	380,000		75	%	$	285,000
John A. Parker	$	336,000		75	%	$	252,000
William S. Moss III	$	320,000		75	%	$	240,000
Stephen E. Heitzman (2)	$	332,000		100	%	$	43,540

(1)

Prior to the Compensation Committee’s approval of the 2020 AIP awards, Mr. Duncan recommended that the value of his award be reduced slightly and the value of Mr. Young’s award be increased by the amount of his reduction in order to recognize Mr. Young’s exceptional performance during 2020. The Compensation Committee agreed with this recommendation, noting that Mr. Young had been critical in achieving several financial and capital markets goals for 2020.

(2)

For Mr. Heitzman, in accordance with the terms of his Separation and Release Agreement, as described below under “Potential Payments Upon Termination or a Change in Control—Heitzman Separation Agreement,” this amount reflects the pro-ration of his target AIP award for the 2019 Fiscal Year for the portion of the 2020 Fiscal Year prior to his separation.

Long-Term Incentive Awards

We maintain the Talos Energy Inc. Long Term Incentive Plan (the “2018 LTIP”) to provide a means through which we may attract, retain and motivate qualified individuals as employees, directors and consultants, thereby enhancing our profitable growth and that of our affiliates. Subject to adjustment as provided therein, the 2018 LTIP originally reserved 5,415,576 shares of common stock for potential grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, stock awards, dividend equivalents, other stock- or cash-based awards and substitute awards. Long-term incentive awards under the 2018 LTIP seek to balance retention of our executive team and alignment of our Named Executive Officers’ interests with those of our stockholders. At the Annual Meeting our stockholders will be asked to approve the 2021 LTIP (as defined below). If the 2021 LTIP is approved at the Annual Meeting no further awards will be granted under the 2018 LTIP. For additional information see Proposal FOUR: Approval of the Talos Energy Inc. 2021 Long Term Incentive Plan.

Each year, the Compensation Committee sets the total targeted long-term incentive value appropriate for each Named Executive Officer, taking into account Peer Group data and each Named Executive Officer’s contribution to our success, level of responsibility and experience. For the 2020 Fiscal Year, each Named Executive Officer’s total targeted long-term incentive value was allocated equally between grants of time-based restricted stock units (“RSUs”) and performance share units (“PSUs”). Please see “Summary Compensation Table” and “Grants of Plan-Based Awards Table” below for more information on the RSU awards and PSU awards granted during the 2020 Fiscal Year.

2020 Restricted Stock Unit Awards

On March 5, 2020, the Board, upon recommendation by the Compensation Committee, approved the grant of RSUs to each Named Executive Officer, other than for Mr. Heitzman. These RSU awards vest ratably over the three-year period beginning on March 5, 2020, subject to each Named Executive Officer’s continued employment through each vesting date. Following vesting, each RSU that vests is settled in a share of our common stock.

2020 Performance Share Unit Awards

On March 5, 2020, the Board, upon recommendation by the Compensation Committee, approved the grant of PSUs to each Named Executive Officer other than Mr. Heitzman. The PSU awards vest based on our relative total stockholder return (“Relative TSR”) over the three-year performance period commencing on January 1, 2020 and ending on December 31, 2022, subject to the Named Executive Officer’s continued employment through December 31, 2022. Our Relative TSR is determined by ranking our total stockholder return against the total stockholder return of each of the following companies, our “PSU Peer Group,” over the three-year performance period.


Bonanza Creek Energy, Inc.	Kosmos Energy Ltd.	PDC Energy, Inc.
Callon Petroleum Company	Laredo Petroleum, Inc.	QEP Resources, Inc.
Centennial Resource Development, Inc.	Magnolia Oil & Gas Corporation	SM Energy Company
Cimarex Energy Co.	Matador Resources Company	W&T Offshore, Inc.
Denbury Inc.	Murphy Oil Corporation	Whiting Petroleum Corporation
HighPoint Resources Corporation	Oasis Petroleum Inc.	WPX Energy, Inc.

At the conclusion of the performance period, the percentage of the target PSUs that becomes earned and vested is determined in accordance with the following payout schedule utilizing linear interpolation between threshold, target, stretch and maximum achievement levels; however, (i) if achievement of Relative TSR is greater than the target achievement level and our total shareholder return (“TSR”) performance is between 0% and negative 10%, the percentage of target PSUs that vest will be reduced by one-half the difference between (a) the percentage determined in accordance with the table below and (b) 100%, and (ii) if achievement of Relative TSR is greater than the target achievement level and our TSR is less than negative 10% then the percentage of target PSUs that vest will not exceed 100% of target, regardless of our Relative TSR ranking. In 2019, vesting was strictly limited to 100% of target levels if our TSR was negative. This slightly modified approach in 2020 allows for some incremental, albeit reduced, vesting above target levels in the event of excellent relative TSR performance where TSR is less than negative 10%. The Board implemented this change in order to ensure that the PSUs would continue to motivate our Named Executive Officers to outperform our competitors even in a negative TSR environment. Following the end of the performance period, each PSU that becomes earned and vested is settled in a share of our common stock.


Level	Relative TSR Performance (Percentile Rank vs Peers)	Earned PSUs (% of Target)
< Threshold	< 30th Percentile	0%
Threshold	30th Percentile	50%
Target	50th Percentile	100%
Stretch	70th Percentile	150%
Maximum	> 90th Percentile	200%

If certain corporate events occur with respect to an entity in our Peer Group, the PSUs provide for adjustments to be made to the Peer Group depending on the nature of the event.

Other Benefits

Health and Welfare Benefits

We offer participation in health and welfare plans to all of our employees, including our Named Executive Officers.

Retirement Benefits

We have not maintained, and do not currently maintain, a defined benefit pension plan or nonqualified deferred compensation plan in which our Named Executive Officers participate. We currently maintain a retirement plan intended to provide benefits under section 401(k) of the Internal Revenue Code (the “Code”) where employees, including our Named Executive Officers, are allowed to contribute portions of their eligible compensation to a tax-qualified retirement account. Generally, we provide discretionary matching contributions equal to 50% of the first 12% of employees’ eligible compensation contributed to the plan; however, such matching contributions were suspended during most of 2020 as a cost reduction measure in light of significant economic and market events, including the depression of oil and natural gas prices and the COVID-19 pandemic. Employees generally become vested in 25% of the matching contributions made to their tax-qualified retirement account per year for four years. Employees become 100% vested in the matching contributions made to their tax-qualified retirement account upon death, disability or retirement on or after normal retirement age (i.e., age 65). Employees may receive a distribution of the vested portion of their tax-qualified retirement accounts upon (i) a termination of employment, (ii) normal retirement, (iii) disability or (iv) death.

Life Insurance

We provide group term life insurance to all of our employees, including the Named Executive Officers, equal to 2.5 times base salary up to a maximum of $500,000.

Limited Perquisites

In 2020, we provided to our Named Executive Officers a limited number of low cost perquisites, including limited spousal travel and club and gym membership reimbursement. We provided these perquisites to ensure that our compensation program as a whole remains commensurate with compensation and benefits provided by companies with which we compete for executive talent.

Amended and Restated Executive Severance Plan

On October 21, 2020, the Board adopted the Talos Energy Operating Company LLC Amended and Restated Executive Severance Plan (the “Amended Severance Plan”), which amends and replaces the Talos Energy Operating Company LLC Executive Severance Plan adopted on August 29, 2018 (the “Original Plan”) such that (i) the formula used to determine the severance amount payable to each participant in the Amended Severance Plan upon qualifying terminations pursuant to the terms of the Amended Severance Plan will include such participant’s target annual bonus amount and (ii) the multiple used to determine the severance amount shall be increased if a participant’s qualifying termination occurs within 24 months following a change in control. The Amended Severance Plan, like the Original Plan, provides that each of our Named Executive Officers are entitled to receive severance benefits following certain terminations of employment. Each participant in the Amended Severance Plan is subject to certain confidentiality, non-solicitation and non-disparagement covenants. The Board adopted the Amended Severance Plan to align the severance benefits with the severance benefits provided by companies with which we compete for executive talent. Please see “Potential Payments Upon Termination of Change in Control—Amended and Restated Executive Severance Plan” for more information.

Heitzman Separation Agreement

On January 22, 2020, Talos Energy Operating Company LLC (the “Employer”) entered into a Separation and Release Agreement with Mr. Heitzman (the “Heitzman Separation Agreement”) documenting the terms and conditions of his cessation of employment, including the restrictive covenants applicable to him, the severance payments due to him as a result of such cessation and a general release of claims against us. We feel it is best practice to enter into such agreements with our departing executives to clarify the terms of their departure and obtain a release of claims.

Other Matters

Tax and Accounting Implications of Executive Compensation Decisions

The Compensation Committee and the Board review and consider the tax, accounting, and securities law implications of our executive compensation program when making determinations.

As a public corporation, we are subject to the deduction limitations under Section 162(m) of the Code (“Section 162(m)”). Section 162(m) prohibits deductions for compensation paid in excess of $1 million during a single fiscal year to certain executive officers. We take the economic effects of Section 162(m) into consideration when determining the structure, implementation, and value of compensation paid to our executive officers, including the deductibility of our executive compensation program. In doing so, we reserve the right to pay non-deductible compensation to our executive officers if the Compensation Committee determines that such compensation is in the best interests of the Company.

We account for RSU awards and PSU awards in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”), which requires us to estimate the expense of an award over the vesting period applicable to such award.

Anti-Hedging and Anti-Pledging Policies

We maintain an insider trading policy that applies to all employees of the Company and its subsidiaries, including the Named Executive Officers, all members of the Board, and all contractors, consultants and outside advisors who have access to material nonpublic information. The insider trading policy also applies to family members, other members of a person’s household, and entities controlled by a person covered by the insider trading policy.

Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such transactions may permit a director, officer or employee to continue to own Company securities obtained through employee benefit plans, but without the full risks and rewards of ownership. When that occurs, the director, officer or employee may no longer have the same objectives as the Company’s other shareholders. Therefore, our insider trading policy prohibits directors, officers, employees and their designees, from engaging in any such transactions.

Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company securities, directors, officers and other employees are also prohibited from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan.

Stock Ownership Policy

In 2019, we adopted the Talos Energy Inc. Stock Ownership Policy (the “Ownership Policy”) applicable to senior executives identified by the Compensation Committee, including the Named Executive Officers, and

non-employee directors with the goal of aligning the interests of such senior executives and non-employee directors with those of our stockholders. The ownership requirements are as follows:


Title		Required Ownership
Chief Executive Officer		5x base salary
All Other Named Executive Officers		2x base salary
Other Senior Executives		1x base salary
Non-Employee Directors		5x annual cash retainer

The Chief Executive Officer and the Compensation Committee will review on an annual basis the ownership levels of senior executives and non-employee directors. In determining ownership levels, we include shares of our common stock owned outright by the officer or director, unvested time-based restricted shares and restricted stock units and shares of our common stock owned by the officer or director through our retirement and benefit plans. We do not include unexercised stock options or unearned performance shares or performance share units in determining ownership levels. Senior executives must achieve their requisite ownership levels within five years of the later of (i) the implementation of the Ownership Policy or (ii) the applicable date of hire, promotion or salary increase for the executive, and non-employee directors must achieve their requisite ownership levels within five years of the later of (a) the implementation of the Ownership Policy or (b) the applicable date of the first election to the Board or increase in annual cash retainer.

Clawback Policy

On February 4, 2020, we adopted the Talos Energy Inc. Executive Compensation Clawback Policy (the “Clawback Policy”). Under the terms of the Clawback Policy, in the event of a restatement of our financial statements due to material non-compliance with any financial reporting requirement under applicable securities laws, the Compensation Committee or the Board may cause the Company to recover the amount of any incentive compensation granted, awarded or paid to a covered employee within the preceding 36-month period to the extent the value of such compensation was in excess of the amount of incentive compensation that would have been granted, awarded or paid had the financial statements been in compliance with the financial reporting requirements. Each executive officer, including our Named Executive Officers and former executive officers, are considered “covered employees” for purposes of the Clawback Policy.

Risk Assessment and Mitigation

The Compensation Committee has reviewed our executive and non-executive compensation programs and believes that they do not encourage excessive or unnecessary risk-taking. We believe that any risk inherent in our compensation programs is unlikely to have a material adverse effect on us. In designing and implementing our award structure, the Compensation Committee worked closely with Meridian to mitigate risks and to minimize the creation of imprudent incentives for our executives. We do not believe that our performance-based compensation encourages unnecessary risks because the executive pay mix is sufficiently diversified over several performance metrics as well as short-term and long-term compensation and fixed and variable compensation.

Our compensation program structure and policy includes the following features to safeguard against excessive risk-taking:

✓

Payments under our AIP are based upon a variety of performance metrics, thereby diversifying the risk associated with any single performance indicator;

✓

Our PSUs have performance periods of three years, which encourages executives to focus on sustaining the performance of the Company and its stock price over a period of years;

✓

We pay compensation that is competitive with the market and our industry peers, while not being excessive;

✓

Our compensation mix is balanced among fixed and variable components, annual and long-term compensation, and cash and equity that reward performance in the Company’s and our executives’ long-term best interests;

✓

Our incentive compensation plans include a cap on the maximum payout, subject to the Compensation Committee’s discretion, and implement design features that do not encourage excessive risk-taking; and

✓

Our insider trading policy contains a general anti-hedging and anti-pledging policy for all insiders.

We believe that our executive compensation program provides our executive officers with appropriate rewards for sustained performance, without giving unnecessary weight to any one factor or type of compensation, and avoids excessive risk. Our compensation structure is designed to encourage sustained performance over a long-term period. Based on the foregoing, the Compensation Committee has concluded that the risks arising from our compensation policies and programs are not reasonably likely to have a material adverse effect on us.

Summary Compensation Table

The table below sets forth the annual compensation earned by the Named Executive Officers during the fiscal years ended December 31, 2018, December 31, 2019 and December 31, 2020. Amounts reported below for periods prior to the Stone Combination, which was consummated on May 10, 2018, were awarded and paid by Talos Energy LLC.


Name and Principal Position	Year		Salary			Bonus (2)		Stock Awards (1)		Option Awards		Non-Equity Incentive Plan Compensation (3)		All Other Compensation (4)		Total
Timothy S. Duncan		2020	$	705,754			—	$	3,984,811		—	$	632,250	$	9,750	$	5,332,565
President and Chief		2019	$	701,727			—	$	4,101,637		—	$	805,000	$	9,500	$	5,617,864
Executive Officer		2018	$	579,885		$	400,000	$	1,689,640	$	714,204	$	885,625	$	9,250	$	4,278,604
Shannon E. Young III		2020	$	463,781		$	27,680	$	1,544,123		—	$	272,320	$	1,062	$	2,308,966
Executive Vice President, Chief Financial Officer and Chief Accounting Officer		2019	$	284,095			—	$	1,590,943		—	$	212,412		—	$	2,087,450

Robert D. Abendschein		2020	$	415,487		$	3,800	$	1,195,453		—	$	281,200	$	3,288	$	1,899,228
Executive Vice President and Head of Operations
John A. Parker		2020	$	423,452		$	3,360	$	1,295,067		—	$	248,640	$	13,000	$	1,983,519
Executive Vice President		2019	$	421,074			—	$	1,230,524		—	$	309,120		—	$	1,960,718
of Exploration		2018	$	394,475		$	75,000	$	675,933	$	589,968	$	348,800	$	12,250	$	2,096,426
William S. Moss III		2020	$	403,288		$	3,200	$	1,245,259		—	$	236,800	$	13,000	$	1,901,547
Executive Vice President and General Counsel		2019	$	401,019			—	$	1,162,181		—	$	294,400	$	12,500	$	1,870,100
Executive Vice President and General Counsel		2018	$	381,475		$	225,000	$	675,933	$	489,600	$	331,360	$	9,250	$	2,112,618
Stephen E. Heitzman		2020	$	61,777	(5)		—	$	111,933				—	$	682,873	$	856,583
Former Executive Vice President and Chief Operating Officer		2019	$	416,080			—	$	1,134,832		—	$	305,440	$	11,934	$	1,868,286
		2018	$	394,475		$	75,000	$	675,933	$	612,000	$	348,800	$	12,250	$	2,118,458

(1)

Amounts in this column for each Named Executive Officer other than Mr. Heitzman represent the aggregate grant date fair value of the RSUs and PSUs granted to each of the Named Executive Officers on March 5, 2020, calculated in accordance with FASB ASC Topic 718, disregarding estimated forfeitures. Pursuant to the Heitzman Separation Agreement, the vesting of certain RSUs was accelerated and the service component of certain PSUs was deemed to be satisfied in connection with his termination of employment. Amounts in this column for Mr. Heitzman reflect the incremental fair value of those modifications to his RSUs and PSUs. The FASB ASC Topic 718 value for the RSUs was calculated using the average of the high and low price per share of our common stock on the date of grant applied to the total number of RSUs granted. The FASB ASC Topic 718 grant date fair value of the PSUs was determined using a Monte Carlo simulation. Additional information regarding the assumptions underlying these calculations is available in Note 8 to our consolidated financial statements filed with our Form 10-K for the fiscal year ended December 31, 2020.

(2)

Amounts in this column represent the portion of the AIP awards for performance in the 2020 Fiscal Year resulting from the application of the Compensation Committee’s discretion to increase the payments above the payout percentage that resulted from actual achievement of the applicable performance metrics. See “Elements of Compensation for the 2020 Fiscal Year—Annual Incentive Program” above for additional information regarding these awards.

(3)

Amounts in this column represent the portion of the AIP awards for performance in the 2020 Fiscal Year determined based on actual achievement of the applicable performance metrics. See “Elements of Compensation for the 2020 Fiscal Year—Annual Incentive Program” above for additional information regarding these awards.

(4)	Amounts in this column include our match of 401(k) plan contributions in the 2020 Fiscal Year for each Named Executive Officer as shown in the table below:


Name	401(k) Plan Company Matching Contributions
Timothy S. Duncan	$	9,750
Shannon E. Young III	$	1,062
Robert D. Abendschein	$	3,288
John A. Parker	$	13,000
William S. Moss III	$	13,000
Stephen E. Heitzman	$	1,820

For Mr. Heitzman, the amount in this column also includes (i) a $622,500 lump sum cash severance payment, (ii) a pro-rated target AIP award for the 2020 Fiscal Year equal to $43,540, and (iii) $12,013 for partially subsidized continuation coverage for Mr. Heitzman, his spouse and his eligible dependents in 2020, in each case, in accordance with the terms of his Separation and Release Agreement, as described below under “Potential Payments Upon Termination or a Change in Control—Heitzman Separation Agreement.”

(5)	Includes $4,788 of unused paid time off paid in connection with Mr. Heitzman’s termination of employment.

Grants of Plan-Based Awards Table

The following table includes information regarding the AIP awards, RSU awards and PSU awards granted to the Named Executive Officers during the 2020 Fiscal Year.


	Grant Date		Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)						Estimated Future Payouts Under Equity Incentive Plan Awards (2)						All Other Stock Awards: Number of Shares of Stock or Units (#) (3)		Grant Date Fair Value of Stock and Option Awards (4)
Name	Grant Date		Threshold ($)		Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)				Grant Date Fair Value of Stock and Option Awards (4)
Timothy S. Duncan			$	437,500	$	875,000	$	1,750,000
		3/5/20								76,046		152,092		304,184			$	1,984,801
		3/5/20														152,092	$	2,000,010
Shannon E. Young III			$	184,000	$	368,000	$	736,000
		5/16/20								29,468		58,936		117,872			$	769,115
		5/16/20														58,936	$	775,008
Robert D. Abendschein			$	190,000	$	380,000	$	760,000
		3/5/20								22,814		45,628		91,256			$	595,445
		3/5/20														45,628	$	600,008
John A. Parker			$	168,000	$	336,000	$	672,000
		3/5/20								24,715		49,430		98,860			$	650,005
		3/5/20														49,430	$	645,062
William S. Moss III			$	160,000	$	320,000	$	640,000
		3/5/20								23,764		47,529		95,058			$	620,253
		3/5/20														47,529	$	625,006
Stephen E. Heitzman (5)		1/22/20								5,261		10,522		21,044			$	79,992
		1/22/20														3,508	$	31,940

(1)

Amounts in these columns represent the estimated payouts for AIP awards for the 2020 Fiscal Year assuming threshold, target and maximum achievement. Mr. Heitzman’s February 17, 2020 termination of employment occurred prior to the Board’s approval of the 2020 target AIP awards, so he was not granted any such award. The actual amounts paid to our Named Executive Officers for the 2020 Fiscal Year can be found in the “Non-Equity Incentive Plan Compensation” column and “Bonus” column of the Summary Compensation Table, above. See “Elements of Compensation for the 2020 Fiscal Year—Annual Incentive Program Awards” above for additional information regarding these awards.

(2)	These amounts represent the threshold, target and maximum number of PSUs that may become earned pursuant to the PSUs granted to the Named Executive Officers during the 2020 Fiscal Year. The number of PSUs which ultimately

become earned is based on our Relative TSR performance over the three-year performance period ending on December 31, 2022, subject to the Named Executive Officer’s continued employment. Mr. Heitzman’s February 17, 2020 termination of employment occurred prior to the Board’s approval of the target PSU awards for the 2020 Fiscal Year, so he was not granted any PSUs in the 2020 Fiscal Year.

(3)

Amounts in this column represent RSUs granted to the Named Executive Officers during the 2020 Fiscal Year which vest as to one-third on each of March 5, 2021, March 5, 2022 and March 5, 2023, subject to the Named Executive Officer’s continued employment. Mr. Heitzman’s February 17, 2020 termination of employment occurred prior to the Board’s approval of the RSU awards for the 2020 Fiscal Year, so he was not granted any RSUs in the 2020 Fiscal Year.

(4)	These amounts represent the aggregate grant date fair value of PSUs and RSUs granted during the 2020 Fiscal Year to the Named Executive Officers, calculated in accordance with FASB ASC Topic 718, disregarding estimated forfeitures.

(5)

Pursuant to the Heitzman Separation Agreement, the vesting of certain RSUs was accelerated and the service component of certain PSUs was deemed to be satisfied in connection with his termination of employment. Amounts in this column for Mr. Heitzman reflect the value of those modifications to his RSUs and PSUs.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

Mr. Abendschein Offer Letter

In connection with his appointment, we entered into an offer letter with Mr. Abendschein. Pursuant to the terms of the offer letter, Mr. Abendschein is eligible to receive an initial annualized base salary of $475,000 and to participate in the Company’s annual bonus program with a target bonus equal to 80% of his annualized base salary (which amount was not prorated for 2020 based upon his date of hire), subject to the achievement of any applicable performance criteria and the terms and conditions of the program. The offer letter also provides that Mr. Abendschein will be eligible to receive annual awards under the 2018 LTIP subject to approval by the Board and the terms and conditions of the LTIP, and that such awards for the 2020 Fiscal Year shall be comprised 50% of RSUs and 50% of PSUs and have an aggregate target value equal to approximately $1,200,000.

Mr. Heitzman Separation Agreement

In connection with Mr. Heitzman’s February 17, 2020 termination of employment, the Employer and Mr. Heitzman entered into the Heitzman Separation Agreement. The benefits provided in the Heitzman Separation Agreement included the accelerated vesting of certain RSUs and the deemed satisfaction of the service component of certain PSUs in connection with his termination of employment. The value of those modifications to his RSUs and PSUs are reflected in the Summary Compensation Table and Grants of Plan-Based Awards Table, above. See “Potential Payments Upon Termination or Change in Control—Heitzman Separation Agreement” for more information regarding the severance payments and benefits provided to Mr. Heitzman in connection with his termination of employment.

Series B Unit Awards

In connection with the Stone Combination in May 2018, the Series B Units in Talos Energy LLC, including those held by our Named Executive Officers, were exchanged for an equivalent number of Series B Units in each of AP Talos Energy LLC (“AP Equityco Units”) and Riverstone Talos Energy Equityco LLC (“RSH Equityco Units” and together with the AP Equityco Units, the “Exchanged Units”). The Exchanged Units received in the exchange remain subject to the same terms and conditions applicable to the Series B Units in Talos Energy LLC prior to such exchange, including with respect to vesting.

In addition to the Exchanged Units, in connection with the Stone Combination in May 2018, each of our Named Executive Officers other than Mr. Young received Series B Units in each of AP Talos Energy Debtco LLC (“AP Debtco Units”) and Riverstone Talos Energy Debtco LLC (“RSH Debtco Units,” and together with the AP Debtco Units, the “New Series B Units”), which are intended to constitute “profits interests” for federal tax purposes. Each of Apollo Talos Holdings, L.P., the manager of AP Talos Energy Debtco LLC, and Riverstone V Talos Holdings, L.P., the manager of Riverstone Talos Energy Debtco LLC, determined it was appropriate to grant the New Series B Units, and neither the Board nor the board of Talos Energy LLC were involved in approving the grants.

The New Series B Units mirror the number and vesting schedule of the Exchanged Units so that they will vest in tandem. As a result, a portion of the New Series B Units were fully vested on the date of grant and the unvested New Series B Units granted will vest at the same time and under the same circumstances as the unvested Exchanged Units. The Exchanged Units and thus, the New Series B Units, generally provide for vesting of 80% of the award in equal monthly installments beginning on the last day of the month of the original grant (not the exchange date) and continuing on the last day of each month for a total of 48 months, so long as the Named Executive Officer remains employed through each vesting date. The remaining 20% will only vest upon the occurrence of a Vesting Event (as defined below under “Potential Payments Upon Termination or Change in Control—Series B Unit Award Agreements”). Any portion of the New Series B Units that vest on the basis of time and remain unvested as of a Vesting Event will also become vested upon such Vesting Event.

Outstanding Equity Awards at 2020 Fiscal Year-End

The following table reflects information regarding outstanding unvested RSUs, PSUs, AP Equityco Units, RSH Equityco Units, AP Debtco Units and RSH Debtco Units held by our Named Executive Officers as of December 31, 2020.


	Option Awards												Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable			Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)			Option Exercise Price ($) (6)		Option Expiration Date (6)		Number of Shares or Units of Stock That Have Not Vested (#) (7)		Market Value of Shares or Units of Stock That Have Not Vested (#) (8)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (9)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) (8)
Timothy S. Duncan		—		—			22,520	(2)		n/a		n/a
		—		—			22,520	(3)		n/a		n/a
		—		—			22,520	(4)		n/a		n/a
		—		—			22,520	(5)		n/a		n/a
		—		345	(1)		820	(2)		n/a		n/a
		—		345	(1)		820	(3)		n/a		n/a
		—		345	(1)		820	(4)		n/a		n/a
		—		345	(1)		820	(5)		n/a		n/a
														205,568	$	1,693,880
																		275,924	$	2,273,614
Shannon E. Young III														80,691	$	664,894
																		72,978	$	601,339
Robert D. Abendschein														45,628	$	375,975		22,814	$	187,987
John A. Parker		—		—			20,000	(2)		n/a		n/a
		—		—			20,000	(3)		n/a		n/a
		—		—			19,280	(4)		n/a		n/a
		—		—			19,280	(5)		n/a		n/a
														65,912	$	543,115
																		89,941	$	741,114
William S. Moss III		—		—			16,000	(2)		n/a		n/a
		—		—			16,000	(3)		n/a		n/a
		—		—			16,000	(4)		n/a		n/a
		—		—			16,000	(5)		n/a		n/a
														63,193	$	520,710
																		86,536	$	713,057
Stephen E. Heitzman		—		—			20,000	(2)		n/a		n/a
		—		—			20,000	(3)		n/a		n/a
		—		—			20,000	(4)		n/a		n/a
		—		—			20,000	(5)		n/a		n/a
														—		—
																		36,376	$	299,738

(1)	These units will vest in substantially equal installments on the last day of each month through May 31, 2021, subject to the Named Executive Officer’s continued employment.

(2)	These amounts represent AP Equityco Units held by each Named Executive Officer which only become vested upon the occurrence of a Vesting Event.

(3)	These amounts represent RSH Equityco Units held by each Named Executive Officer which only become vested upon the occurrence of a Vesting Event.

(4)	These amounts represent AP Debtco Units held by each Named Executive Officer which only become vested upon the occurrence of a Vesting Event.

(5)	These amounts represent RSH Debtco Units held by each Named Executive Officer which only become vested upon the occurrence of a Vesting Event.

(6)	These equity awards are not traditional options, and therefore, there is no exercise price or expiration date associated with them.

(7)	The amounts in this column represent RSUs held by each Named Executive Officer which vest pro-rata over the applicable remaining vesting dates as follows, subject to the Named Executive Officer’s continued employment:


Name	Number of Unvested RSUs		Remaining Vesting Dates
Timothy S. Duncan		152,092	March 5, 2021, March 5, 2022 and March 5, 2023
		49,092	March 5, 2021 and March 5, 2022
		4,384	May 14, 2021
Shannon E. Young III		58,936	March 5, 2021, March 5, 2022 and March 5, 2023
		21,755	March 5, 2022
Robert D. Abendschein		45,628	March 5, 2021, March 5, 2022 and March 5, 2023
John A. Parker		49,430	March 5, 2021, March 5, 2022 and March 5, 2023
		14,728	March 5, 2021 and March 5, 2022
		1,754	May 14, 2021
William S. Moss III		47,529	March 5, 2021, March 5, 2022 and March 5, 2023
		13,910	March 5, 2021 and March 5, 2022
		1,754	May 14, 2021

Any unvested RSUs previously held by Mr. Heitzman which were not accelerated in connection with his separation in accordance with the terms of the Heitzman Separation Agreement and the RSU award agreements governing such awards were forfeited and cancelled in accordance with the terms of such agreements, as described below under “Potential Payments Upon Termination or a Change in Control—Heitzman Separation Agreement.”

(8)	The amounts in these columns were calculated by multiplying $8.24, the closing price of our common stock on December 31, 2020, by the number of awards reported.

(9)

The amounts in this column represent the maximum number of PSUs granted in 2018 and 2019 and the threshold number of PSUs granted in 2020, and in each case, held by each Named Executive Officer which may become earned based on our Relative TSR performance over the applicable three-year performance period as shown in the below table. As of December 31, 2020, (i) our Relative TSR performance for the PSUs granted in each of 2018 and 2019 was at or above target, but due to a negative absolute total stockholder return each award would only provide for a target payout, and (ii) our Relative TSR performance for the PSUs granted in 2020 was below threshold. Pursuant to the applicable SEC rules, the amounts in this column and in the below table reflect the maximum payout of the 2018 and 2019 PSUs and the threshold payout of the 2020 PSUs. The actual number of PSUs earned based on actual performance over the full performance period may be significantly less than this amount.


Name	Number of Unvested PSUs		Applicable Performance Period End Date
Timothy S. Duncan		76,046	December 31, 2022
		147,276	December 31, 2021
		52,602	May 13, 2021
Shannon E. Young III		29,468	December 31, 2022
		43,510	December 31, 2021
Robert D. Abendschein		22,814	December 31, 2022
John A. Parker		24,715	December 31, 2022
		44,184	December 31, 2021
		21,042	May 13, 2021
William S. Moss III		23,764	December 31, 2022
		41,730	December 31, 2021
		21,042	May 13, 2021
Stephen E. Heitzman		21,044	December 31, 2021
		15,332	May 13, 2021

Any other unearned PSUs previously held by Mr. Heitzman which do not remain outstanding and, subject to the satisfaction of the applicable performance goals, eligible for settlement in accordance with the terms of the PSU award agreements governing such awards and the Heitzman Separation Agreement were forfeited and cancelled in accordance with the terms of such agreements, as described below under “Potential Payments Upon Termination or a Change in Control—Heitzman Separation Agreement.”

Option Exercises and Stock Vested


	Option Awards				Stock Awards
Name	Number of Units Acquired on Exercise (#) (1)		Value Realized on Exercise ($) (2)		Number of Shares Acquired on Vesting (#) (3)		Value Realized on Vesting ($) (4)
Timothy S. Duncan
AP Equityco Units		825	$	0.00
RSH Equityco Units		825	$	0.00
AP Debtco Units		825	$	0.00
RSH Debtco Units		825	$	0.00
RSUs						28,930	$	360,562
Shannon E. Young III		—		—		—		—
Robert D. Abendschein		—		—		—		—
John A. Parker
RSUs						9,118	$	112,616
William S. Moss III
RSUs						8,709	$	107,348
Stephen E. Heitzman
RSUs						10,299	$	189,502

(1)

This column reflects the AP Equityco Units, RSH Equityco Units, AP Debtco Units and RSH Debtco Units held by each Named Executive Officer that vested during the 2020 Fiscal Year. We believe that, despite the fact that these units do not require the payment of an exercise price, they are most similar economically to stock options, and as such, they are properly classified as “options” under the definition provided in Item 402(a)(6)(i) of Regulation S-K as an instrument with an “option-like feature.”

(2)	The value of the AP Equityco Units, RSH Equityco Units, AP Debtco Units and RSH Debtco Units was estimated using the closing price of our common stock as of each vesting date and the terms of the applicable distribution provisions governing such awards.

(3)

This column reflects the RSUs held by each Named Executive Officer that vested during the 2020 Fiscal Year. For Mr. Heitzman, this amount includes the accelerated vesting of certain of his outstanding RSUs as provided for in the Heitzman Separation Agreement, as described below under “Potential Payments Upon Termination or a Change in Control—Heitzman Separation Agreement.”

(4)	This column reflects the aggregate market value realized by each Named Executive Officer upon vesting, calculated by multiplying the number of RSUs that vested (including shares withheld for tax withholding purposes) by the closing price of our common stock on the applicable vesting date.

Pension Benefits

We have not maintained, and do not currently maintain, a defined benefit pension plan.

Nonqualified Deferred Compensation

We have not maintained, and do not currently maintain, a nonqualified deferred compensation plan.

Potential Payments Upon Termination or a Change in Control

Amended and Restated Executive Severance Plan

As described above, the Board approved the Amended Severance Plan on October 21, 2020. Each of the currently employed Named Executive Officers is a participant in the Amended Severance Plan. Pursuant to the terms of the Amended Severance Plan, upon a termination without “Cause” or a resignation for “Good Reason,” each Named Executive Officer, other than Mr. Heitzman, will be eligible to receive: (i) a lump sum cash payment equal to 1.5 (or 2.0 in the case of Mr. Duncan) times the sum of (a) the Named Executive Officer’s annualized base salary then in effect and (b) the target amount of such Named Executive Officer’s annual cash bonus immediately prior to such termination; (ii) any earned but unpaid bonus for the year preceding the year of termination based on the our actual performance, paid at the time such bonuses are paid to executives; (iii) a pro-rated bonus for the year of termination based on our actual performance, paid at the time such bonuses are paid to executives and (iv) partially subsidized continuation coverage for the Named Executive Officer and his spouse and eligible dependents under our group health plans pursuant to COBRA for 18 months (or 24 months in the case of Mr. Duncan), unless such coverage is earlier terminated in accordance with the terms of the Amended Severance Plan.

Upon a Named Executive Officer’s (other than Mr. Heitzman’s) termination without “Cause” or a resignation for “Good Reason” within 24 months following a “Change in Control,” such Named Executive Officer will be eligible to receive: (i) a lump sum cash payment equal to 2.0 (or 2.5 in the case of Mr. Duncan) times the sum of (a) the Named Executive Officer’s annualized base salary then in effect and (b) the greater of (x) the target amount of such Named Executive Officer’s annual cash bonus immediately prior to such termination and (y) the target amount of such Named Executive Officer’s annual cash bonus immediately prior to the Change in Control; (ii) any earned but unpaid bonus for the year preceding the year of termination based on the our actual performance, paid at the time such bonuses are paid to executives; (iii) a pro-rated bonus for the year of termination based on our actual performance, paid at the time such bonuses are paid to executives; and (iv) partially subsidized continuation coverage for the Named Executive Officer and his spouse and eligible dependents under our group health plans pursuant to COBRA for 18 months (or 24 months in the case of Mr. Duncan), unless such coverage is earlier terminated in accordance with the terms of the Amended Severance Plan.

Additionally, if a Named Executive Officer’s (other than Mr. Heitzman’s) employment with us terminates as a result of his death or “Disability,” then pursuant to the terms of the Amended Severance Plan, such Named Executive Officer will be eligible to receive the following benefits: (i) any earned but unpaid bonus for the year preceding the year of termination based on our actual performance, paid at the time such bonuses are paid to executives; and (ii) a pro-rated bonus for the year of termination based on our actual performance, paid at the time such bonuses are paid to executives.

In order to receive any of the foregoing severance benefits under the Amended Severance Plan, a Named Executive Officer (or his estate or legal guardian, if applicable) must timely execute (and not revoke) a release of claims in favor of us and our affiliates. Further, the Amended Severance Plan requires continued compliance with certain confidentiality, non-solicitation and non-disparagement covenants. If the severance benefits under the Amended Severance Plan would trigger an excise tax for a participant under Section 4999 of the Code, the Amended Severance Plan provides that the Named Executive Officer’s severance benefits will be reduced to a level at which the excise tax is not triggered, unless the Named Executive Officer would receive a greater amount without such reduction after taking into account the excise tax and other applicable taxes.

For purposes of the Amended Severance Plan:

•

“Cause” generally means a Named Executive Officer’s (i) material breach of the Amended Severance Plan or other written agreement with us, (ii) material breach of any law applicable to the workplace or employment relationship or any of our material policies or codes of conduct, (iii) gross negligence, willful misconduct, breach of fiduciary duty, fraud, theft or embezzlement, (iv) commission, conviction, indictment or plea of nolo contendre of or for any felony or crime involving moral turpitude, or (v) willful failure or refusal to perform his obligations pursuant to the Amended Severance Plan or follow any lawful directive from us.

•

“Change in Control” generally means the occurrence of any of the following events: (i) acquisition by a person or group of beneficial ownership of 50% or more of our outstanding shares or the combined voting power of our outstanding voting securities; (ii) during any consecutive 12-month period, individuals who constitute the Board cease for any reason to constitute at least a majority of the Board, excluding any director whose election or nomination was approved by a vote of at least a majority of the then current directors unless such approval occurs as a result of an actual or threatened election contest; (iii) consummation of a business combination in which our outstanding voting securities immediately prior to such business combination do not, immediately following such business combination, continue to represent more than 50% of the then outstanding voting securities; (iv) sale of all or substantially all of our assets; or (v) approval by our stockholders of a complete liquidation or dissolution.

•

“Disability” generally means an inability by a Named Executive Officer to perform the essential functions of his position due to physical or mental impairment or other incapacity that continues, or can reasonably be expected to continue, for a period in excess of 120 consecutive days or 180 days, whether or not consecutive, in any 12-month period.

•

“Good Reason” generally means (i) a material diminution in a Named Executive Officer’s base salary, authority, duties or responsibilities, (ii) material breach by us of our obligations under the Amended Severance Plan, or (ii) a geographic relocation of the Named Executive Officer’s principal place of employment by more than 50 miles.

Long Term Incentive Plan Awards

Restricted Stock Unit Awards

Pursuant to the terms of each Named Executive Officer’s RSU award agreements, if a Named Executive Officer’s employment with us is terminated (i) as a result of his death or “Disability” or (ii) within one year following a “Change in Control,” by us without “Cause” or by the Named Executive Officer for “Good Reason,” then, in each case, such Named Executive Officer’s unvested RSUs will become fully vested. If a Named Executive Officer’s employment with us is terminated by us without Cause or by the Named Executive Officer for Good Reason, in each case, prior to a Change in Control or more than one year following a Change in Control, then the portion of such Named Executive Officer’s unvested RSUs that would have vested within the 12-month period following such termination will become vested.

Performance Share Unit Awards

Pursuant to the terms of each Named Executive Officer’s PSU award agreements, if a Named Executive Officer’s employment with us is terminated as a result of his death or Disability, then a pro-rata portion of such Named Executive Officer’s PSUs will become earned based on actual performance calculated through the date of such termination. If a Named Executive Officer’s employment with us is terminated by us without Cause or by the Named Executive Officer for Good Reason, in each case, prior to a Change in Control or more than one year following a Change in Control, then the Named Executive Officer will be deemed to have met the service requirement with respect to a pro-rata portion of his PSUs, and such PSUs will remain outstanding subject to satisfaction of the performance metrics through the end of the performance period. If a Named Executive Officer’s employment with us is terminated within one year following a Change in Control by us without Cause or by the Named Executive Officer for Good Reason, then, in each case, such Named Executive Officer’s PSUs will become earned based on actual performance calculated through the date of such Change in Control.

For purposes of the RSU and PSU award agreements, “Cause,” “Change in Control,” “Disability” and “Good Reason” have the meanings given to such terms in the Amended Severance Plan.

Series B Unit Award Agreements

If a Named Executive Officer’s employment is terminated for any reason other than by us for “Cause,” he will forfeit all unvested AP Equityco Units, RSH Equityco Units, AP Debtco Units and RSH Debtco Units, and each applicable entity will have a right to repurchase any vested units at Fair Market Value (as defined in the applicable company agreement). If the Named Executive Officer’s employment is terminated by us for Cause, then he will forfeit all AP Equityco Units, RSH Equityco Units, AP Debtco Units and RSH Debtco Units, whether vested or unvested. For the AP Equityco Units, RSH Equityco Units, AP Debtco Units and RSH Debtco Units granted to Messrs. Duncan, Parker, Moss and Heitzman that vest based on the terms of the Series B Units in Talos Energy, LLC originally granted on February 3, 2012 (October 1, 2013 for Mr. Moss), “Cause” has the meaning given to such term in the Named Executive Officer’s prior employment agreement. For all other awards, “Cause” means (i) engaging in material mismanagement in providing services to us or our affiliates, (ii) engaging in conduct that could reasonably be expected to be materially injurious to us or our affiliates, (iii) materially breaching the Series B Unit award agreement or the applicable limited liability company agreement, (iv) being convicted of, or entering a plea bargain or settlement admitting guilt for, any felony, crime involving moral turpitude, or where, as a result of such crime, the continued employment of the Named Executive Officer would be expected to have a material adverse impact on us or our affiliates, or (v) being the subject of any order obtained or issued by the SEC for any securities violation involving fraud.

In general, any unvested AP Equityco Units, RSH Equityco Units, AP Debtco Units and RSH Debtco Units granted to our Named Executive Officers will fully vest upon the occurrence of either of the following events with respect to the applicable feeder entity (each, a “Vesting Event”): (i) “Liquidation Event” or “Approved Sale” which results in a “Series A Payout” with respect to each holder of Series A Units in the applicable feeder entity; or (ii) the occurrence of a “Public Offering” where the applicable sponsor (a) receives cash proceeds from the sale of securities received in a reorganization sufficient to result in a Series A Payout (after taking into consideration any prior cash distributions), or (b) as of the 5th anniversary of the Public Offering, holds securities with a fair market value sufficient to result in a Series A Payout (after taking into consideration any prior cash distributions). The Vesting Event with respect to each feeder entity may occur on different dates.

For purposes of the AP Equityco Units, RSH Equityco Units, AP Debtco Units and RSH Debtco Units:

•

“Approved Sale” generally includes (i) mergers, business combinations, or consolidations following which the pre-transaction members do not hold a majority of the equity securities of the surviving or resulting entity, (ii) sale of all or substantially all of the assets of the applicable feeder entity to one or more third parties, and (iii) sale of all or substantially all of the equity interests in the applicable feeder entity to one or more third parties, in each case initiated by the sponsor.

•

“Liquidation Event” generally includes (i) mergers, business combinations, consolidations, sales of all or substantially all of the assets of the applicable feeder entity following which the pre-transaction members do not hold a majority of the equity securities of the surviving or resulting entity, (ii) sale of more than 75% of the Series A Units in the applicable feeder entity, (iii) a voluntary or involuntary reorganization or entry into bankruptcy or insolvency proceedings, and (iv) the winding up, dissolution or liquidation of the applicable feeder entity.

•

“Series A Payout” occurs when holders of the Series A Units receive cash distributions which cause the unreturned Series A Unit capital contributions and unpaid Series A Unit preference amount to equal $0.

•

“Public Offering” means the sale in a public offering registered under the Securities Act of the equity securities of the applicable feeder entity (or any successor thereto) or a director or indirect subsidiary of the applicable feeder entity (or any successor thereto).

The following table sets forth the payments and benefits that would be received by our Named Executive Officers pursuant to the terms of the Amended Severance Plan, RSUs, PSUs, AP Equityco Units, RSH Equityco Units, AP Debtco Units and RSH Debtco Units in the event of certain terminations of employment with us or a Vesting Event, had such termination or Vesting Event occurred on December 31, 2020. For the avoidance of

doubt, the table below does not reflect the actual payments and benefits received by Mr. Heitzman following the termination of his employment that was effective on February 17, 2020. Such payments and benefits are described in the section below titled “—Heitzman Separation Agreement.”


Name	Termination without Cause or resignation for Good Reason		Termination as a result of death or Disability		Vesting Event		Termination without Cause or resignation for Good Reason in connection with a Change in Control
Timothy S. Duncan
Cash Severance	$	3,150,000		—		—	$	3,937,500
Pro-Rata Annual Bonus (1)	$	632,500	$	632,500		—	$	632,500
COBRA Subsidy (2)	$	39,476		—		—	$	39,476
RSU Acceleration (3)	$	656,126	$	1,693,880		—	$	1,693,880
PSU Acceleration (4)	$	594,706	$	594,706		—	$	823,497
Series B Unit Acceleration (5)		—		—		—		—
Total	$	5,072,808	$	2,921,086		—	$	7,126,853
Shannon E. Young, III
Cash Severance	$	1,242,000		—		—	$	1,656,000
Pro-Rata Annual Bonus (1)	$	300,000	$	300,000		—	$	300,000
COBRA Subsidy (2)	$	19,738		—		—	$	19,738
RSU Acceleration (3)	$	161,875	$	664,894		—	$	664,894
PSU Acceleration (4)	$	119,513	$	119,513		—	$	179,261
Total	$	1,843,126	$	1,084,407		—	$	2,819,893
Robert D. Abendschein
Cash Severance	$	1,282,500		—		—	$	1,710,000
Pro-Rata Annual Bonus (1)	$	285,000	$	285,000		—	$	285,000
COBRA Subsidy (2)	$	19,738		—		—	$	19,738
RSU Acceleration (3)	$	125,322	$	375,975		—	$	375,975
PSU Acceleration (4)		—		—		—		—
Total	$	1,712,560	$	660,975		—	$	2,390,713
John A. Parker
Cash Severance	$	1,134,000		—		—	$	1,512,000
Pro-Rata Annual Bonus (1)	$	252,000	$	252,000		—	$	252,000
COBRA Subsidy (2)	$	14,391		—		—	$	14,391
RSU Acceleration (3)	$	210,886	$	543,106		—	$	543,106
PSU Acceleration (4)	$	197,430	$	197,430		—	$	268,731
Series B Unit Acceleration (5)		—		—		—		—
Total	$	1,808,707	$	992,536		—	$	2,590,228
William S. Moss III
Cash Severance	$	1,080,000		—		—	$	1,440,000
Pro-Rata Annual Bonus (1)	$	240,000	$	240,000		—	$	240,000
COBRA Subsidy (2)	$	18,701		—		—	$	18,701
RSU Acceleration (3)	$	202,267	$	520,636		—	$	520,636
PSU Acceleration (4)	$	133,884	$	133,884		—	$	258,629
Series B Unit Acceleration (5)		—		—		—		—
Total	$	1,674,852	$	894,520		—	$	2,477,966

(1)	These amounts reflect the pro-rata portion of each Named Executive Officer’s annual bonus, which would have been the full amount of such annual bonus had the termination of employment occurred on December 31, 2020.

(2)	The COBRA Subsidy amount is based on the premiums in effect as of December 2020, which are assumed for purposes of this table to remain the same throughout the applicable COBRA Subsidy period.

(3)	These amounts are calculated by multiplying the number of RSUs that would become vested upon the applicable event by $8.24, the closing price of our common stock on December 31, 2020.

(4)

These amounts are calculated by multiplying the number of PSUs that would become earned or for which the service vesting component of the award will be deemed satisfied upon the applicable event by $8.24, the closing price of our common stock on December 31, 2020. The amounts provided herein are calculated based on actual performance through December 31, 2020. The amounts set forth under “Termination without Cause or resignation for Good Reason” are based on actual performance as of December 31, 2020, but the actual number of PSUs earned would be determined at the end of each applicable performance period. As of December 31, 2020, the PSUs granted in 2018 and 2019 had reached target performance, and the PSUs granted in 2020 had not reached threshold performance, such that no value is associated with such PSUs for purposes of this table.

(5)

These amounts are calculated by multiplying the number of AP Equityco Units, RSH Equityco Units, AP Debtco Units, and RSH Debtco Units that would become vested upon the applicable event by the fair market value of each such unit as of December 31, 2020, which was $0.00 for each of the AP Equityco Units, the RSH Equityco Unit, the AP Debtco Units and the RSH Debtco Units. The value of the AP Equityco Units, RSH Equityco Units, AP Debtco Units and RSH Debtco Units was estimated using $8.24, the closing price of our common stock on December 31, 2020 and the terms of the applicable distribution provisions governing such awards.

Heitzman Separation Agreement

On January 22, 2020, Mr. Heitzman and the Employer entered into the Heitzman Separation Agreement pursuant to which Mr. Heitzman’s employment with us terminated on February 17, 2020. Under the Heitzman Separation Agreement, Mr. Heitzman was eligible to receive the following benefits, subject to his execution and non-revocation of a release of claims and continued compliance with certain restrictive covenants:

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Lump sum cash payment equal to $622,500, in accordance with the Original Severance Plan;

•

Payment of his AIP award for the 2019 Fiscal Year based on actual achievement of the applicable performance metrics equal to $305,440, payable at the time such awards are paid to other executives of the Company, in accordance with the Original Severance Plan;

•

Payment of a pro-rated portion of the target AIP award that would have been approved by the Board for the 2020 Fiscal Year had he been employed as of the date of such approval equal to $42,634;

•

Partially subsidized continuation coverage for Mr. Heitzman, his spouse, and his eligible dependents under our group health plans pursuant to COBRA for 18 months, unless such coverage is earlier terminated, in accordance with the terms of the Original Severance Plan;

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Accelerated vesting of all 3,508 unvested RSUs originally granted in 2018 and, in accordance with the terms of the applicable RSU award agreement, accelerated vesting of 6,791 RSUs granted in 2019; and

•

Deemed satisfaction of the applicable service requirement with respect to all 10,522 PSUs granted in 2018 and, in accordance with the terms of the applicable PSU award agreement, 7,666 PSUs granted in 2019, all of which remain outstanding and eligible to vest subject to satisfaction of the applicable performance metrics through the end of the applicable performance period.

In addition, in connection with Mr. Heitzman’s separation, each of AP Talos Energy LLC, AP Talos Energy Debtco LLC, Riverstone Talos Energy Equityco LLC and Riverstone Talos Energy Debtco LLC took action to waive the forfeiture of Mr. Harding’s AP Equityco Units, AP Debtco Units, RSH Equityco Units, and RSH Debtco Units, respectively. As a result, Mr. Heitzman’s AP Equityco Units, AP Debtco Units, RSH Equityco Units, and RSH Debtco Units will remain outstanding and eligible to vest in accordance with the vesting terms applicable to such AP Equityco Units, AP Debtco Units, RSH Equityco Units, and RSH Debtco Units. Neither

the Board nor the Compensation Committee were involved in approving the foregoing treatment with respect to the AP Equityco Units, AP Debtco Units, RSH Equityco Units, and RSH Debtco Units.

The table below quantifies the benefits received by Mr. Heitzman pursuant to the Heitzman Separation Agreement and as a result of the actions of each feeder entity in connection with their respective separations.


Name	Received at Separation
Stephen E. Heitzman
Cash Severance	$	622,500
Prior Year 2019 Annual Bonus	$	305,440
Pro-Rata 2020 Annual Bonus	$	43,540
COBRA Subsidy (1)	$	21,623
RSU & PSU Acceleration (2)	$	665,215
Series B Unit Waiver of Forfeiture (3)	$	—
Total	$	1,658,318

(1)	The COBRA Subsidy amount is based on the premiums in effect as of March 2020, when Mr. Heitzman’s COBRA Subsidy began, which are assumed for purposes of this table to remain the same throughout the 18-month COBRA Subsidy period.

(2)

The RSU & PSU Acceleration amounts are calculated by (i) multiplying the number of RSUs that vested by the closing price of our common stock on February 14, 2020 (the trading date immediately preceding the separation date because the separation date was not a trading date); and (ii) multiplying the number of PSUs for which the applicable service requirement was deemed to be satisfied by the closing price of our common stock on February 14, 2020 (the trading date immediately preceding the separation date because the separation date was not a trading date), based on assumed achievement of performance as of the applicable separation date.

(3)

The Series B Unit Waiver of Forfeiture amounts are calculated by multiplying the number of AP Equityco Units, RSH Equityco Units, AP Debtco Units, and RSH Debtco Units for which forfeiture was waived by the fair market value of each such unit as of the applicable termination date, which was $0.00. The value of the AP Equityco Units, RSH Equityco Units, AP Debtco Units and RSH Debtco Units was estimated using the closing price of our common stock on the applicable termination date and the terms of the applicable distribution provisions governing such awards.

Director Compensation

We maintain a non-employee director compensation program pursuant to which members of the Board who are not employees of us or our subsidiaries or investment funds affiliated with or managed by Riverstone Holdings or Apollo are eligible for the following compensation:

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Annual base retainer of $80,000 ($150,000 for the Non-Executive Chairman);

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Supplemental retainer of (i) $25,000 for the chair of the Audit Committee, (ii) $15,000 for the chairs of the Compensation Committee and the Safety, Sustainability and Corporate Responsibility Committee, and (iii) $10,000 for the chair of the Nominating & Governance Committee;

•

Supplemental retainer of (i) $12,500 for members of the Audit Committee, (ii) $7,500 for members of the Compensation Committee and the Safety, Sustainability and Corporate Responsibility Committee, and (iii) $5,000 for members of the Nominating & Governance Committee;

•

$1,500 for each meeting (both in-person and telephonic) of the Board or a committee beyond 10 meetings of the Board or such committee; and

•

An annual equity award with a value equal to $160,000 (increased from $140,000 in 2019) ($230,000 for the Non-Executive Chairman (increased from $210,000 in 2019)).

The slight increases in equity compensation value under our non-employee director compensation program described above were implemented in early March of 2020 to ensure that the members of our Board are compensated at levels commensurate with other companies with which we compete for Board talent. The Non-Executive Chairman, who currently also serves as the Chairman of the Nominating & Governance Committee, is not eligible to receive the supplemental retainers provided to chairs and members of the committees. Each director is also reimbursed for reasonable travel and miscellaneous expenses incurred to attend meetings and activities of the Board and the committees.

In accordance with our non-employee director compensation program, we granted RSUs to each non-employee director on March 5, 2020, which vest in full on March 5, 2021, subject to the non-employee director’s continued service. In connection with the grant of RSUs, each non-employee director was provided the opportunity to defer the settlement of his RSUs until the earliest to occur of either the date such non-employee director incurs a “separation from service” or the fifth anniversary of the vesting date. Following the vesting date or such later date as elected by the director pursuant to the deferral election, these RSUs will be settled 60% in shares of our common stock and 40% in cash. The RSUs will vest in full upon (i) a termination of the non-employee director’s service due to death or disability, (ii) a termination of the non-employee director’s service without cause and (iii) a “change in control” (as defined in the LTIP). Our non-employee directors are also subject to our Ownership Policy, as described above under “Compensation Discussion and Analysis—Other Matters—Stock Ownership Policy.”

2020 Director Compensation Table


Name	Paid in Cash		Awards (1)		Total
Neal P. Goldman	$	172,500	$	230,007	$	402,507
John “Brad” Juneau	$	113,500	$	160,009	$	273,509
Donald R. Kendall, Jr.	$	130,000	$	160,009	$	290,000
Charles M. Sledge	$	131,000	$	160,009	$	291,009
James M. Trimble	$	111,500	$	160,009	$	271,509

(1)

Amounts in this column represent the aggregate grant date fair value of the RSUs granted to the directors during the 2020 Fiscal Year, calculated in accordance with FASB ASC Topic 718, disregarding estimated forfeitures. The FASB ASC Topic 718 value for the RSUs was calculated using the average of the high and low price per share of our common stock on the date of grant, $13.15, applied to the total number of RSUs granted. Additional information regarding the assumptions underlying these calculations is available in Note 8 to our consolidated financial statements filed with our Form 10-K for the fiscal year ended December 31, 2020. As of December 31, 2020, the following unvested RSU awards were held by each non-employee directors: (i) for Mr. Goldman, 17,491 RSUs and (ii) for Messrs. Juneau, Kendall, Sledge, and Trimble, 12,168 RSUs, each of which became fully vested on March 5, 2021. Additionally, as of December 31, 2020, Messrs. Goldman and Sledge held 16,573 RSUs and 11,048 RSUs, respectively, which are fully vested but subject to deferred settlement on the earliest to occur of (a) the fifth anniversary of the vesting date, (b) death, (c) disability, (e) separation from service, or (f) change in control.

CEO PAY RATIO

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Timothy S. Duncan, our President and Chief Executive Officer (our “CEO”).

For the 2020 Fiscal Year, our last completed fiscal year:

•

The median of the annual total compensation of all employees of our company (other than the CEO) was $167,090; and

•

The annual total compensation of our CEO, as reported in the Summary Compensation Table included elsewhere within this Proxy Statement, was $5,332,565.

•

Based on this information, for 2020 the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was reasonably estimated to be 32 to 1.

We identified a new median employee for the pay ratio calculation above for 2020. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our CEO, we took the following steps:

•

We determined that, as of December 31, 2020, our employee population consisted of approximately 411 individuals with all of these individuals located in the United States. This population consisted of our United States full-time, part-time, and temporary employees, as we did not have seasonal workers as of December 31, 2020. We do have employees located in jurisdictions outside of the United States, but they comprise less than 5% of our total employees and were excluded from this calculation pursuant to Item 402(u)(4)(ii) of Regulation S-K. Specifically, we excluded 8 employees located in Mexico. We hire independent contractors and “leased” workers, but such independent contractors and “leased” workers were excluded from this calculation pursuant to Item 402(u)(3) of Regulation S-K.

•

We used a consistently applied compensation measure to identify our median employee comparing the amount of salary or wages, bonuses and other compensation as reported to the Internal Revenue Service in Box 1 on Form W-2 for 2020.

•

We identified our median employee by consistently applying this compensation measure to all of our employees included in our analysis. Since all of our employees included in this calculation and our CEO are located in the United States, we did not make any cost of living adjustments in identifying the median employee.

•

After we identified our median employee, we combined all of the elements of such employee’s compensation for the 2020 year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $167,090.

•

With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column for 2020 of our Summary Compensation Table included in this Proxy Statement and incorporated by reference under Item 11 of Part III of our Annual Report.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2020, the Compensation Committee consisted of Donald R. Kendall, Jr., Olivia C. Wassenaar and Rajen Mahagaokar, none of whom is, or has ever been, an officer or employee of the Company. Further, none of our Named Executive Officers serves, or in the past has served, as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any entity that has one or more executive officers who serve as members of our Board or Compensation Committee.

CORPORATE GOVERNANCE

Corporate Governance Guidelines

The Board of Directors believes that sound governance practices and policies provide an important framework to assist it in fulfilling its duty to stockholders. The Company’s “Corporate Governance Guidelines” cover the following subjects, among others:

•

the size of the Board of Directors;

•

qualifications and independence standards for the Board of Directors;

•

director responsibilities;

•

Board leadership;

•

meetings of the Board and of non-management directors;

•

committee requirements and functions and independence of committee members;

•

director compensation;

•

annual performance evaluations and succession planning;

•

review of governance policies, copies of which are posted on the Company’s website at www.talosenergy.com;

•

stockholder communications with directors; and

•

access to independent advisors, senior management and other employees.

The Corporate Governance Guidelines are posted on the Company’s website at www.talosenergy.com. The Corporate Governance Guidelines are reviewed periodically and as necessary by the Company’s Nominating & Governance Committee, and any proposed additions to or amendments of the Corporate Governance Guidelines will be presented to the Board of Directors for its approval.

The NYSE has adopted rules that require listed companies to adopt governance guidelines covering certain matters. The Company believes that the Corporate Governance Guidelines comply with the NYSE rules.

Board Leadership

The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide independent oversight of management. The Board understands that the optimal Board leadership structure may vary as circumstances warrant. Consistent with this understanding, the Nominating & Governance Committee considers the Board’s leadership structure periodically.

Prior to the 2020 Annual Meeting of Stockholders, the Chairman of the Board was required to be a “Company Independent Director” pursuant to the Stockholders’ Agreement. Any person serving as our Chief Executive Officer does not satisfy the independence standards of the NYSE rules by virtue of being one of our employees and, as a result, any such person cannot be a “Company Independent Director” under the Stockholders’ Agreement. After the 2020 Annual Meeting, our Bylaws provide that the Chairman of the Board may be any director elected by a majority of the Board. On July 21, 2020, Neal P. Goldman was re-elected as Chairman of the Board. See “—Director Independence” for additional information regarding the definition of “Company Independent Director.”

Despite the foregoing, the Board believes that separating of the roles of Chairman of the Board and the Chief Executive Officer provides the optimal Board leadership structure for us. Under this structure, the Chief Executive Officer has responsibility for setting the strategic direction of the Company and for the day-to-day leadership and performance of the Company, and the Chairman of the Board is tasked with setting the agenda for

and presiding at Board meetings and coordinating the Board’s communications with the Chief Executive Officer and other senior management. The Board determined that this leadership structure was optimal for us because it balances the needs for the President and Chief Executive Officer to run the Company on a day-to-day basis with the benefit provided to the Company by the Chairman’s perspective as an independent member of the Board.

The Corporate Governance Guidelines require that the Chairman of the Board, if he or she is a non-management director, will be the “lead director” responsible for preparing an agenda for the meetings of the Independent Directors in executive session. In the event the Chairman of the Board is a member of management, the Corporate Governance Guidelines provide that the lead director will be chosen by the non-management members of the Board. Mr. Goldman, the current Chairman of the Board, is a non-management director and therefore serves as lead director of the Board.

Classified Board Structure

In consultation with the Board, the Nominating & Governance Committee has determined that a classified board structure is appropriate for the Company. A classified board provides for stability, continuity and experience within the Board of Directors. In our industry in particular, long-term focus is critical. The time horizon required for successful exploration, development and production of oil and natural gas resources makes it vital that we have a Board that understands the implications of this process and has the ability to develop and implement long-term strategies while benefiting from an in-depth knowledge of the Company’s business and operations. A classified board structure helps to ensure that there will be the continuity and stability of leadership required to navigate a challenging economic environment while resisting the pressure to focus on short-term results at the expense of the Company’s long-term value and success. The future success of the Company depends in significant part on the ability to attract and retain capable and experienced directors. In this regard, we believe that longer terms for our directors will enhance director independence from both management and stockholder special interest groups.

Communications with the Board of Directors

Stockholders or other interested parties wishing to communicate directly with the Board, a committee of the Board or with an individual director may do so by sending the communication, as appropriate, to:

Talos Energy Inc.

Three Allen Center

333 Clay Street, Suite 3300

Houston, Texas 77002

Comments or complaints relating to the Company’s accounting, internal accounting controls or auditing matters will also be referred to members of the Audit Committee. All such communications will be forwarded to the appropriate member(s) of the Board.

Director Independence

Under NYSE rules, a “controlled company” is defined as a listed company of which more than 50% of the voting power for the election of directors is held by an individual, a group, or another company. The Company is a controlled company within the meaning of NYSE rules.

As a result of the Stockholders’ Agreement (as defined and described in “Certain Relationships and Related Party Transactions—Historical Transactions with Affiliates—Stockholders’ Agreement”) and the voting power of the Apollo Funds and the Riverstone Funds, the Company is exempt from complying with NYSE’s requirements that (i) a majority of the Board of Directors consist of Independent Directors, (ii) the Nominating & Governance Committee consist entirely of Independent Directors, and (iii) the Compensation Committee be composed entirely of Independent Directors. We have elected not to use these exemptions available to controlled companies, but could do so in the future.

The Stockholders’ Agreement provides that successors to directors not designated by Talos will be nominated by the Nominating & Governance Committee, which must have a majority of “Company Independent Directors.” A “Company Independent Director” is any director of the Board who (i) meets the independence standards under NYSE rules, (ii) is not a director designated by the Apollo Funds or the Riverstone Funds, (iii) is not a current director, officer or employee of the Apollo Funds or the Riverstone Funds or their respective affiliates, (iv) has been determined by the Nominating & Governance Committee not to have any relationship with the Apollo Funds or the Riverstone Funds or their respective affiliates that would be material to the director’s ability to be independent, and (v) is designated by the Nominating & Governance Committee as a “Company Independent Director.” Currently, Messrs. Goldman, Sledge, Juneau, Trimble and Kendall are the “Company Independent Directors” serving on the Board. As noted above, Mr. Trimble will retire from the Board at the conclusion of the Annual Meeting.

The Board of Directors has determined that each of Christine Hommes, Robert M. Tichio, Olivia C. Wassenaar, Neal P. Goldman, John “Brad” Juneau, James M. Trimble, Charles M. Sledge, Donald R. Kendall, Jr. and Rajen Mahagaokar is “independent” pursuant to NYSE rules.

In connection with its assessment of the independence of each non-employee director, the Board of Directors also determined that (i) Messrs. Sledge, Kendall and Juneau are independent as defined in Section 10A of the Exchange Act and under the standards set forth by the NYSE applicable to members of the Audit Committee and (ii) Messrs. Kendall and Mahagaokar and Ms. Wassenaar are independent under the standards set forth by the NYSE applicable to members of the Compensation Committee.

Financial Literacy of Audit Committee and Designation of Financial Experts

The Board of Directors evaluated each of the members of the Audit Committee for financial literacy and the attributes of a financial expert. On May 6, 2019, the Board of Directors determined that each of the Audit Committee members, Messrs. Juneau, Kendall and Sledge, is financially literate and is an audit committee financial expert as defined by the SEC.

Oversight of Risk Management

The Board of Directors as a whole oversees the Company’s assessment of major risks and the measures taken to manage such risks. For example, the Board of Directors:

•

oversees the long-term strategic plans of the Company and assesses risks and efforts to mitigate such risks that would cause the Company to fail to achieve its strategic goals;

•

reviews management’s capital spending plans, approves the Company’s capital budget and requires that management present, for Board review, significant departures from those plans;

•

oversees management of the Company’s commodity price risk through regular review with executive management of the Company’s derivatives strategy;

•

monitors the Company’s liquidity profile and its compliance with the financial covenants contained in its borrowing arrangements; and

•

has established specific dollar limits on the commitment authority of members of senior management for certain transactions and requires Board approval of expenditures exceeding that authority and of other material contracts and transactions.

The Audit Committee is responsible for overseeing the Company’s assessment and management of financial reporting and internal control risks, as well as other financial risks, such as the credit risks associated with

counterparty exposure. The Audit Committee is responsible for discussing with management the Company’s significant financial risk exposures and the actions management has taken to monitor and control such exposures. Management and the Company’s independent registered public accountants report regularly to the Audit Committee on those subjects. The Audit Committee is also responsible for oversight of the Company’s cyber- security program and management’s plans, programs and policies designed to mitigate cyber-security risks, and as part of its annual calendar, the Audit Committee receives regular reports on cyber-security matters and the information technology control environment from the Company’s Deputy Director of Information Technology.

Attendance at Annual Meetings

The Board of Directors encourages all directors to attend the Annual Meetings, if practicable. All ten of our then-serving directors attended the 2020 Annual Meeting of Stockholders. We anticipate that nearly all of our directors will attend the 2021 Annual Meeting in person or by teleconference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information known to us, based on filings made under Section 13(d) and 13(g) of the Exchange Act, regarding the beneficial ownership of our common stock as of March 22, 2021 by:

•

each person, or group of affiliated persons, know to us to beneficially own more than 5% of our common stock;

•

each member of the Board of Directors;

•

each of our Named Executive Officers; and

•

all of our directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to such securities. Except as otherwise indicated, all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. Unless otherwise indicated, the address of each person or entity named in the table below is c/o Talos Energy Inc., Three Allen Center, 333 Clay Street, Suite 3300, Houston, Texas 77002.

As of March 22, 2021, there were 81,707,214 shares of our common stock outstanding.


	Shares Beneficially Owned
	Number			Percent
5% Stockholders
Riverstone Funds(1)		25,926,683			31.7	%
Apollo Funds(2)		18,896,202			23.1	%
Castex Entities(3)		4,602,460			5.6	%
Directors and Named Executive Officers:
Neal P. Goldman(4)		33,679	*
Timothy S. Duncan(5)		86,217	*
Charles M. Sledge(6)		20,110	*
Robert M. Tichio		—			—
Olivia C. Wassenaar		—			—
John “Brad” Juneau(6)		45,409	*
Donald R. Kendall, Jr.(6)		13,929	*
James M. Trimble		20,110	*
Christine Hommes		—			—
Rajen Mahagaokar		—			—
Paula R. Glover		—			—
Robert Abendschein (7)		61,278	*
John A. Parker (8)		27,530	*
Shannon E. Young (9)		14,620	*
William S. Moss III (10)		26,384	*
Directors and executive officers as a group (15 persons)		349,266	*

*	Represents beneficial ownership of less than one percent of shares outstanding.

(1)

Represents (i) shares of our common stock held of record by Riverstone Talos Energy Equityco LLC (“Riverstone Equityco”) and Riverstone Talos Energy Debtco LLC (“Riverstone Debtco”) and (ii) an aggregate of 11 million shares of our common stock held by ILX Holdings I, LLC (“ILX Holdings”), ILX Holdings II, LLC (“ILX Holdings II”), ILX Holdings III, LLC (“ILX Holdings III”) and Castex Energy 2014, LLC (“Castex 2014”), which were issued to such holders upon the automatic conversion of an aggregate of 110,000 shares of Series A Convertible Preferred Stock of the Company, par value $0.01 per share, on March 30, 2020. David M. Leuschen and Pierre F. Lapeyre, Jr. are the members of Riverstone Management Group, L.L.C. (“Riverstone Management”), which is the general partner of Riverstone/Gower Mgmt Co Holdings, L.P. (“Riverstone/Gower”), which is the sole member of Riverstone Holdings, which is the sole shareholder of Riverstone Energy GP V Corp (“Riverstone Corp”), which is the managing member of Riverstone Energy GP V, LLC (“Riverstone GP”), which is the general partner of Riverstone Energy Partners V, L.P., which is the general partner of Riverstone Global Energy and Power Fund V (FT), L.P. (“Riverstone Energy Fund”), which is the general partner of Riverstone V Talos Holdings, L.P. (“Riverstone Aggregator”), which is the managing member of Riverstone Equityco and the sole manager of Riverstone Debtco. Riverstone GP is managed by a managing committee consisting of Pierre F. Lapeyre, Jr., David M. Leuschen, E. Bartow Jones, N. John Lancaster, Baran Tekkora, James T. Hackett and Robert M. Tichio (one of our directors). As such, each of Riverstone Aggregator, Riverstone Energy Fund, Riverstone Energy Partners, Riverstone GP, Riverstone Corp, Riverstone Holdings, Riverstone/Gower, Riverstone Management, Mr. Leuschen and Mr. Lapeyre may be deemed to have or share beneficial ownership of the securities held directly by Riverstone Equity and Riverstone Debtco. In addition, Riverstone Holdings, Riverstone/Gower, Riverstone Management, Mr. Leuschen and Mr. Lapeyre, through their control or management of entities that directly or indirectly control ILX Holdings and ILX Holdings III, may be deemed to share beneficial ownership of the securities held directly by ILX Holdings and ILX Holdings III; Riverstone Corp, Riverstone Holdings, Riverstone/Gower, Riverstone Management, Mr. Leuschen and Mr. Lapeyre, through their control or management of entities that directly or indirectly control ILX Holdings II, may be deemed to share beneficial ownership of the securities held directly by ILX Holdings II; and Riverstone Energy Partners, Riverstone GP, Riverstone Corp, Riverstone Holdings, Riverstone/Gower, Riverstone Management and Messrs. Leuschen and Lapyere, through their control or management of entities that directly or indirectly control Castex 2014, may be deemed to have or share beneficial ownership of the securities held directly by Castex 2014. The address of each of the foregoing persons is C/O Riverstone Holdings LLC, 712 Fifth Avenue, 36th Floor, New York, New York 10019. The foregoing information is based on the Schedule 13D/A filed by Riverstone Talos Energy Equityco LLC on March 18, 2020.

(2)

Represents shares of our common stock held of record by AP Talos Energy, LLC (“AP Talos”) and AP Talos Energy Debtco, LLC (“Debtco”). Apollo Talos Holdings, L.P. (“Apollo Holdings”) is the managing member of AP Talos and the manager of Debtco. Apollo Management VII, L.P. (“Management VII”) is the manager of Holdings. AIF VII Management, LLC (“AIF VII”) is the general partner of Management VII. Apollo Management, L.P. (“Apollo Management”) is the sole member and manager of AIF VII. Apollo Management GP, LLC (“Management GP”) is the general partner of Apollo Management. Apollo Management Holdings, L.P. (“Management Holdings”) is the sole member and manager of Management GP. Apollo Management Holdings GP, LLC (“Management Holdings GP”) is the general partner of Management Holdings. Leon Black, Joshua Harris and Marc Rowan are the managers, as well as executive officers, of Management Holdings GP, and as such may be deemed to have voting and dispositive control of the shares of common stock held of record by AP Talos and Debtco. The address of each of AP Talos, Debtco and Apollo Holdings is One Manhattanville Road, Suite 201, Purchase, New York 10577. The address of each of Management VII, AIF VII, Apollo Management, Management GP, Management Holdings and Management Holdings GP, and Messrs. Black, Harris and Rowan, is 9 West 57th Street, 43rd Floor, New York, New York 10019. The foregoing information is based on the Form 4 filed by Apollo Management Holdings GP, LLC on March 16, 2021.

(3)

Represents shares of our common stock held of record by Castex Energy Partners, LLC (“Castex Energy”) and Castex Offshore, Inc. (“Castex Offshore”) issued in connection with the closing of an acquisition by the Company of select oil and natural gas assets from affiliates of Castex Energy 2005, LLC (the “Castex Acquisition”) pursuant to that certain Purchase and Sale Agreement (the “Castex Purchase Agreement”),

dated as of June 19, 2020, as amended from time to time, by and among Castex Energy, Castex Offshore and Talos Third Coast, LLC (“Talos Third Coast”). Such amount includes: (i) 2,989,631 shares of our common stock issued to Castex Energy and (ii) 1,612,829 shares of our common stock issued to Castex Offshore. An additional 825,572 shares of our common stock (the “Castex Escrowed Shares”) are currently being held by an indemnity escrow agent pursuant to that certain Escrow Agreement (the “Castex Escrow Agreement”), dated as of June 19, 2020, as amended from time to time, by and among Castex Energy, Castex Offshore, Talos Third Coast (as successor-in-interest to Talos Production) and Citibank, N.A., as escrow agent, entered into in connection with the Castex Acquisition in order to secure Castex Energy’s and Castex Offshore’s indemnification obligations under the Castex Purchase Agreement. On August 5, 2020, pursuant to the Castex Purchase Agreement and the Castex Escrow Agreement, the 825,572 Castex Escrowed Shares were issued to an escrow agent to be held in an indemnity escrow account for a period not to exceed 18 months from the closing of the Castex Acquisition. For so long as any Castex Escrowed Shares are subject to the Castex Escrow Agreement, Castex Energy and Castex Offshore have the sole right to vote such shares representing their pro rata portion of the total Castex Escrowed Shares and such shares are considered beneficially owned by each of Castex Energy and Castex Offshore in such proportions but, without the consent of Talos Third Coast, neither Castex Energy and Castex Offshore may dispose of or transfer its interests in such shares. Depending on the determination of any potential claims for indemnification and in accordance with the applicable terms of the Castex Purchase Agreement, assuming the release of all of the Castex Escrowed Shares to Castex Energy and Castex Offshore, 289,303 Castex Escrowed Shares would be released and transferred to Castex Offshore and 536,269 Castex Escrowed Shares would be released and transferred to Castex Energy. Castex Offshore is a wholly owned subsidiary of Castex Energy. Castex Energy 2005, LLC is the sole managing member of Castex Energy. The board of directors of Castex Energy 2005 Holdco, LLC, as the sole managing member of Castex Energy 2005, LLC and the indirect sole managing member of Castex Energy, has the right to exercise voting and dispositive power over all securities held by Castex Energy. The bylaws of Castex Offshore provide that the board of directors of Castex Offshore shall match the board of directors of Castex Energy 2005 Holdco, LLC, therefore the board of directors of Castex Energy 2005 Holdco, LLC also exercises voting and dispositive power over all securities held by Castex Offshore. The address of the foregoing persons is One Memorial City Plaza, 800 Gessner Road, Suite 925, Houston, TX 77024. This information is based on the Registration Statement on Form S-3 (File No. 333-248754), as amended, initially filed by the Company with the SEC on September 11, 2020, and declared effective by the SEC on January 25, 2021.

(4)	For Mr. Goldman, does not include 17,398 unvested RSUs that will vest on March 5, 2022, and be settled 60% in shares of our common stock and 40% in cash.

(5)

For Mr. Duncan, does not include (i) 24,546 unvested RSUs that will vest on March 5, 2022 (“2019 RSUs”), (ii) 101,395 unvested RSUs that will vest ratably on each of March 5, 2022 and March 5, 2023 (“2020 RSUs”) or (iii) 100,858 unvested RSUs that will vest ratably on each of March 8, 2022, March 8, 2023 and March 8, 2024 (“2021 RSUs”).

(6)	For each of Messrs. Sledge, Juneau and Kendall, does not include 12,103 unvested RSUs that will vest on March 8, 2022, and be settled 60% in shares of our common stock and 40% in cash.

(7)	For Mr. Abendschein, does not include (i) 30,419 unvested 2020 RSUs or (ii) 30,258 unvested 2021 RSUs.

(8)	For Mr. Parker, does not include (i) 7,364 unvested 2019 RSUs, (ii) 32,954 unvested 2020 RSUs or (iii) 32,779 unvested 2021 RSUs.

(9)	For Mr. Young, does not include (i) 21,755 unvested RSUs that will vest on March 5, 2022, (ii) 39,291 unvested 2020 RSUs or (iii) 39,083 unvested 2021 RSUs.

(10)	For Mr. Moss, does not include (i) 6,955 unvested 2019 RSUs, (ii) 31,686 unvested 2020 RSUs or (iii) 31,158 unvested 2021 RSUs.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Policies and Procedures for Review of Related Party Transactions

A “Related Party Transaction” is a transaction, arrangement or relationship in which we or any of our subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any Related Person had, has or will have a direct or indirect material interest. A “Related Person” means:

•

any person who is, or at any time during the applicable period was, one of our executive officers or directors or a director nominee;

•

any person who is known by us to be the beneficial owner of more than 5% of any class of our voting securities;

•

any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of an executive officer, director, director nominee or a beneficial owner of more than 5% of any class of our voting securities, and any person (other than a tenant or employee) sharing the household of such executive officer, director, director nominee or beneficial owner of more than 5% of any class of our voting securities; or

•

any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position of control or in which such person has a 10% or greater beneficial ownership interest.

Our Bylaws and the Stockholders’ Agreement (as defined and described in “—Historical Transactions with Affiliates—Stockholders’ Agreement”) provide that we will not enter into any related party transaction unless such transaction has been approved by a majority of the disinterested directors or a majority of the Audit Committee. Under the Stockholders’ Agreement, a related party transaction is any transaction or series of related transactions in which we or any of our affiliates is a participant and the Apollo Funds or the Riverstone Funds or any of their respective affiliates or any of our directors has a direct or indirect material interest and the transaction or series of transactions involves payments of $120,000 or more or are otherwise

SEC Form DEF 14A filed by Talos Energy, Inc.