Item 5. Other Information
Item 5. Other Information.
On April 25, 2023, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Warrior Met Coal, Inc. (the “Company”) approved a Transformational Retention/Incentive Program for the Company’s named executive officers (the “NEOs”) in order to enhance long-term incentive alignment with key priorities and promote retention of employees critical to the transformation efforts. Under the Transformational Retention/Incentive Program, the Company’s NEOs were granted an opportunity to earn a cash incentive award (a “Transformational Award”) (i) in recognition of each NEO’s continued service to the Company in connection with the completion of the Blue Creek Mine project (the “Project”), which Project is critical to the long-term success and sustainability of the Company, and (ii) in order to incentivize each NEO to continue to work diligently toward the successful completion of the Project. Each of the NEOs – Walter J. Scheller, III (Chief Executive Officer), Jack K. Richardson (Chief Operating Officer), Dale W. Boyles (Chief Financial Officer), Kelli K. Gant (Chief Administrative Officer and Corporate Secretary), and Charles Lussier (Chief Commercial Officer) – received a Transformational Award with a maximum amount of up to $4.0 million. Each NEO is eligible to earn up to the maximum award amount, except Mr. Scheller who is eligible to earn up to 130% of the maximum award amount, based on the level of achievement of predefined performance goals, as described below, during the performance period, which ends on the earlier to
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occur of (i) three (3) consecutive months of production following the commencement of longwall mining production at the Blue Creek Mine or (ii) April 25, 2028 (the “Performance Period”). The Transformational Awards will be cancelled if production has not begun at the Blue Creek Mine by April 25, 2028.
The Transformational Award may be earned following the Performance Period if the Company satisfies quantitative performance criteria related to on-time project completion (weighted 25%), capital expenditures (weighted 25%), and production tonnes (weighted 50%). Each performance metric has a payout range between 25% at threshold achievement and 100% at maximum achievement, and the NEO will not receive any payout with respect to a performance metric if the threshold level of achievement is not reached. The amount of the earned award, if any, is subject to a downward modifier based on both an environmental metric and an employee safety metric, reflecting the Company’s focus on growth without compromising our commitments to environmental stewardship and employee safety. If the Company achieves the environmental metric expectations and the average reportable incident rate expectations, the NEO will receive 100% of the earned award. If either the environmental or the safety metric is not achieved, the earned award will be reduced by 15% and if both the environmental and safety metrics are not achieved, the earned award will be reduced by 30%.
Mr. Scheller's award also contains a Total Stockholder Return ("TSR") modifier that is based on the Company's absolute TSR over the Performance Period. The amount of the earned award, if any, is subject to a 30% reduction if the Company’s absolute TSR performance is at or below positive 5% on a compound annual basis (CAGR) over the Performance Period and is subject to a 30% increase if the Company’s absolute TSR performance is at or above positive 25% on a compound annual basis (CAGR) over the Performance Period. No modification will occur if the Company’s absolute TSR performance is positive 15% on a compound annual basis (CAGR) over the Performance Period, and the modification will be interpolated for absolute TSR levels between 5% and 25% (CAGR).
In the event of a NEO’s termination of service due to death or disability, a termination by the Company without “Cause” or a termination by the NEO for “Good Reason” (as such terms are defined in the NEO’s employment agreement) prior to the end of the Performance Period, the NEO will receive a pro rata portion of the target award equal to one-fifth (1/5) of the award for each completed calendar year of employment with the Company or any affiliate beginning on April 25, 2023 and ending on the termination date. In the event of a Change in Control (as defined in the NEO’s employment agreement), the NEO will receive the target award, except Mr. Scheller who will only receive his target award if his employment is terminated by the Company without "Cause" or by him for "Good Reason" within 12 months following a Change in Control. The summary of the Transformational Awards included herein is qualified in its entirety by reference to the full text of the Transformational Retention/Incentive Award Agreement, a form of which is attached as an exhibit hereto and incorporated herein by reference.
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Item 6. Exhibits
Exhibit
Number Description
3.1
Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-8 (File No. 333-217389) filed with the Commission on April 19, 2017).
3.2
Certificate of Amendment to the Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-38061) filed with the Commission on March 20, 2020).
3.3
Second Certificate of Amendment of the Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-38061) filed with the Commission on April 26, 2022).
3.4
Amended and Restated Bylaws of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-380619) filed with the Commission on December 7, 2022).
3.5
Certificate of Designations of Series A Junior Participating Preferred Stock of Warrior Met Coal, Inc., as filed with the Secretary of State of the State of Delaware on February 14, 2020 (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-38061) filed with the Commission on February 14, 2020).
10.1
Form of Restricted Stock Unit Award Agreement (for non-employee director grants in 2023).
10.2
Form of Restricted Stock Unit Award Agreement (for non-employee director grants in 2023 with deferral election).
10.3
Warrior Met Coal, Inc. Transformational Retention/Incentive Award Agreement, dated May 1, 2023, by and between Warrior Met Coal, Inc. and Walter J. Scheller, III.
10.4
Form of Warrior Met Coal, Inc. Transformational Retention/Incentive Award Agreement (for non-CEO named executive officers), dated May 1, 2023.
31.1*
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1**
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95*
Mine Safety Disclosures Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 299.104).
101.INS* XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH* Inline XBRL Taxonomy Extension Schema Document
101.CAL* Inline XBRL Taxonomy Extension Calculation LinkBase Document
101.DEF* Inline XBRL Taxonomy Extension Definition LinkBase Document
101.LAB* Inline XBRL Taxonomy Extension Label LinkBase Document
101.PRE* Inline XBRL Taxonomy Extension Presentation LinkBase Document
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
WARRIOR MET COAL, INC.
Date: May 3, 2023 By: /s/ Dale W. Boyles
Dale W. Boyles
Chief Financial Officer (on behalf of the registrant and as Principal Financial and Accounting Officer)
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