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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers
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On February 8, 2022, Texas Pacific Land Corporation
(“TPL” or the “Company”) entered into amended and restated employment agreements with each of Tyler Glover, the
Company’s Chief Executive Officer, Chris Steddum, the Company’s Chief Financial Officer, and Micheal W. Dobbs, the Company’s
Senior Vice President, General Counsel and Secretary. The new employment agreements replace the previous employment agreements between
TPL and each officer.
Glover Agreement
Mr. Glover is the Company’s Chief Executive Officer. On
February 8, 2022, the Company and Mr. Glover entered into an Amended and Restated Employment Agreement (the “A&R Glover
Employment Agreement”) which replaces the previous employment agreement between the Company and Mr. Glover.
Pursuant to the A&R Glover Employment Agreement, Mr. Glover
receives a base salary of $850,000 per annum, subject to annual review, and shall also be eligible for an annual bonus (“Bonus”)
based on achievement of specified performance targets as established by the Compensation Committee of the Board of Directors. For 2021,
Mr. Glover is eligible for a target annual Bonus of 300% of his base salary (“2021 Bonus”) which shall be paid in cash,
provided that 25% of the after-tax amount of the 2021 Bonus may be paid in Common Stock. For years after 2021, Mr. Glover’s
target annual Bonus will be at least 100% of his base salary and will be payable in cash. For years after 2021, Mr. Glover will also
be eligible to receive annual long-term incentive awards under the 2021 Plan (“LTI Awards”) as determined by the Company,
the target amount of which, when added to Mr. Glover’s target Bonus for the year, will be at least 300% of his base salary
for the relevant year. The term of the A&R Glover Employment Agreement ends on December 31, 2024, with automatic one (1) year
extensions unless notice not to renew is given by either party at least 120 days prior to the relevant end date.
The A&R Glover Agreement provides for payment of severance benefits
if Mr. Glover’s employment is terminated by the Company without cause or by Mr. Glover for good reason, provided that
Mr. Glover executes a general waiver and release of claims and complies with the restrictive covenants described below. The severance
benefits include (i) accrued but unpaid Bonuses, (ii) LTI Award benefits to the extent provided for pursuant to the underlying
award and plan documents, (iii) a pro rata Bonus for the year of termination (if such termination occurs after the first calendar
quarter), (iv) monthly payments for up to 18 months of COBRA premiums for continued group health, dental and vision coverage for
Mr. Glover and his dependents, and (v) an amount equal to two times the greater of (A) the average of his base salary and
Bonus for the preceding three years, or (B) his base salary and target Bonus for the year of termination. If Mr. Glover’s
employment is terminated by the Company without cause, by Mr. Glover for good reason, or upon failure of the Company to renew the
term of the Agreement, in all such cases, within 24 months following a change in control of the Company as defined in the A&R Glover
Agreement, then, in lieu of the amount specified in clause (v), Mr. Glover will be entitled to an amount equal to 2.99 times the
greater of (a) the average of his base salary and Bonus for the three years preceding the year in which the change in control occurs,
and (b) his base salary and target Bonus for the year in which the change in control occurs. If Mr. Glover’s employment
terminates due to death or disability, he or his estate will be entitled to the benefits described in clauses (i), (ii) and (iii) above.
Mr. Glover will also be entitled to payment of accrued but unpaid salary, accrued but unused vacation, unsubsidized COBRA benefits,
and unreimbursed business expenses, following termination of employment for any reason.
The A&R Glover Agreement provides that Mr. Glover will be
entitled to participate in all benefit plans provided to the Company’s executives of like status from time to time in accordance
with the applicable plan, policy or practices of the Company, as well as in any long-term incentive program established by the Company.
It also provides for four weeks of annual paid vacation, reimbursement of business expenses, and indemnification rights.
The A&R Glover Agreement contains restrictive covenants prohibiting
Mr. Glover from disclosing the Company’s confidential information at any time, from competing with the Company in specified
counties where the Company does business during his employment, subject to certain exceptions, and for one year thereafter (or six months
thereafter if he terminates his employment voluntarily without good reason), and from soliciting the Company’s clients, suppliers
and business partners during his employment and for one year thereafter.
Steddum Agreement
Chris Steddum is the Company’s Chief Financial Officer. On February 8,
2022, the Company and Mr. Steddum entered into an Amended and Restated Employment Agreement (the “A&R Steddum Employment
Agreement”). The A&R Steddum Employment Agreement replaces the previous employment agreement between TPL and Mr. Steddum.
Pursuant to the A&R Steddum Employment Agreement, Mr. Steddum
receives a base salary of $475,000 per annum, subject to annual review, and shall also be eligible for an annual bonus (“Bonus”)
based on achievement of specified performance targets as established by the Compensation Committee of the Board of Directors. For 2021,
Mr. Steddum is eligible for a target annual Bonus of 225% of his base salary (“2021 Bonus”) which shall be paid in cash,
provided that 25% of the after-tax amount of the 2021 Bonus may be paid in Common Stock. For years after 2021, Mr. Steddum’s
target annual Bonus will be at least 90% of his base salary and will be payable in cash. For years after 2021, Mr. Steddum will also
be eligible to receive annual LTI Awards as determined by the Company, the target amount of which, when added to Mr. Steddum’s
target Bonus for the year, shall be at least 225% of his base salary for the relevant year. The term of the A&R Steddum Employment
Agreement ends on December 31, 2024, with automatic one (1) year extensions unless notice not to renew is given by either party
at least 120 days prior to the relevant end date.
The A&R Steddum Agreement provides for payment of severance benefits
if Mr. Steddum’s employment is terminated by the Company without cause or by Mr. Steddum for good reason, provided that
Mr. Steddum executes a general waiver and release of claims and complies with the restrictive covenants described below. The severance
benefits include (i) accrued but unpaid Bonuses, (ii) LTI Award benefits to the extent provided for pursuant to the underlying
award and plan documents, (iii) a pro rata Bonus for the year of termination (if such termination occurs after the first calendar
quarter), (iv) monthly payments for up to 18 months of COBRA premiums for continued group health, dental and vision coverage for
Mr. Steddum and his dependents, and (v) an amount equal to two times the greater of (A) the average of his annualized base
salary and Bonus for the preceding three years, or (B) his base salary and target Bonus for the year of termination. If Mr. Steddum’s
employment is terminated by the Company without cause, by Mr. Steddum for good reason, or upon failure of the Company to renew the
term of the Agreement, in all such cases, within 24 months following a change in control of the Company as defined in the A&R Steddum
Agreement, then, in lieu of the amount specified in clause (v), Mr. Steddum will be entitled to an amount equal to 2.99 times the
greater of (a) the average of his annualized base salary and Bonus for the three years preceding the year in which the change in
control occurs, and (b) his base salary and target Bonus for the year in which the change in control occurs. If Mr. Steddum’s
employment terminates due to death or disability, he or his estate will be entitled to the benefits described in clauses (i), (ii) and
(iii) above. Mr. Steddum will also be entitled to payment of accrued but unpaid salary, accrued but unused vacation, unsubsidized
COBRA benefits, and unreimbursed business expenses, following termination of employment for any reason.
The A&R Steddum Agreement provides that Mr. Steddum will be
entitled to participate in all benefit plans provided to the Company’s executives of like status from time to time in accordance
with the applicable plan, policy or practices of the Company, as well as in any long-term incentive program established by the Company.
It also provides for four weeks of annual paid vacation, reimbursement of business expenses, and indemnification rights.
The A&R Steddum Agreement contains restrictive covenants prohibiting
Mr. Steddum from disclosing the Company’s confidential information at any time, from competing with the Company in specified
counties where the Company does business during his employment, subject to certain exceptions, and for one year thereafter (or six months
thereafter if he terminates his employment voluntarily without good reason), and from soliciting the Company’s clients, suppliers
and business partners during his employment and for one year thereafter.
Dobbs Agreement
Micheal Dobbs is the Company’s Senior Vice President, Secretary
and General Counsel. On February 8, 2022, the Company and Mr. Dobbs entered into an Amended and Restated Employment Agreement
(the “A&R Dobbs Employment Agreement”). The A&R Dobbs Employment Agreement replaces the previous employment agreement
between the Company and Mr. Dobbs.
Pursuant to the A&R Dobbs Employment Agreement, Mr. Dobbs
receives a base salary of $400,000 per annum, subject to annual review, and shall also be eligible for an annual bonus (“Bonus”)
based on achievement of specified performance targets as established by the Compensation Committee of the Board of Directors. For 2021,
Mr. Dobbs is eligible for a target annual Bonus of 100% of his base salary (“2021 Bonus”) which shall be paid in cash,
provided that 25% of the after-tax amount of the 2021 Bonus may be paid in Common Stock. For years after 2021, Mr. Dobbs’s
target annual Bonus will be at least 75% of his base salary and will be payable in cash. For years after 2021, Mr. Dobbs will also
be eligible to receive annual LTI Awards as determined by the Company, with the target amount of such LTI Awards for a year, when added
to Mr. Dobbs’s target Bonus for the year, being at least 175% of his base salary for the relevant year. The term of the A&R
Dobbs Employment Agreement ends on December 31, 2024, with automatic one (1) year extensions unless notice not to renew is given
by either party at least 120 days prior to the relevant end date.
The A&R Dobbs Agreement provides for payment of severance benefits
if Mr. Dobbs’s employment is terminated by the Company without cause or by Mr. Dobbs for good reason, provided that Mr. Dobbs
executes a general waiver and release of claims and complies with the restrictive covenants described below. The severance benefits include
(i) accrued but unpaid Bonuses, (ii) LTI Award benefits to the extent provided for pursuant to the underlying award and plan
documents, (iii) a pro rata Bonus for the year of termination (if such termination occurs after the first calendar quarter), (iv) monthly
payments for up to 18 months of COBRA premiums for continued group health, dental and vision coverage for Mr. Dobbs and his dependents,
and (v) an amount equal to two times the greater of (A) the average of his annualized base salary and Bonus for the preceding
three years, or (B) his base salary and target Bonus for the year of termination. If Mr. Dobbs’s employment is terminated
by the Company without cause, by the officer for good reason, or upon failure of the Company to renew the term of the Agreement, in all
such cases, within 24 months following a change in control of the Company as defined in the A&R Dobbs Agreement, then, in lieu of
the amount specified in clause (v), Mr. Dobbs will be entitled to an amount equal to 2.99 times the greater of (a) the average
of his annualized base salary and Bonus for the three years preceding the year in which the change in control occurs, and (b) his
base salary and target Bonus for the year in which the change in control occurs. If Mr. Dobbs’s employment terminates due to
death or disability, he or his estate will be entitled to the benefits described in clauses (i), (ii) and (iii) above. Mr. Dobbs
will also be entitled to payment of accrued but unpaid salary, accrued but unused vacation, unsubsidized COBRA benefits, and unreimbursed
business expenses, following termination of employment for any reason.
The A&R Dobbs Agreement provides that Mr. Dobbs will be entitled
to participate in all benefit plans provided to the Company’s executives of like status from time to time in accordance with the
applicable plan, policy or practices of the Company, as well as in any long-term incentive program established by the Company. It also
provides for four weeks of annual paid vacation, reimbursement of business expenses, and indemnification rights.
The A&R Dobbs Agreement contains restrictive covenants prohibiting
Mr. Dobbs from disclosing the Company’s confidential information at any time, and from soliciting the Company’s clients,
suppliers and business partners during his employment and for one year thereafter.
The foregoing descriptions of the A&R Glover
Agreement the A&R Steddum Agreement and the A&R Dobbs Agreement are qualified in their entirety by reference to the respective
agreements, which are filed herewith as Exhibits 10.1, 10.2 and 10.3.