UNITED STATES
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FORM
CURRENT REPORT
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 9, 2026, the Board of Directors (the “Board”) of Hallador Energy Company (the “Company”) approved a new executive compensation plan (the “2026 EO Plan”) for the period from April 1, 2026 through March 31, 2027, including a performance bonus plan (the “Executive Officer Bonus Performance Plan”) as approved by the Compensation Committee of the Board (the “Compensation Committee”). The 2026 EO Plan was adopted to replace the 2024 Executive Officer Plan (the “2024 EO Plan”), which expired on March 31, 2026. In connection with the adoption of the 2026 EO Plan, each of the Company’s named executive officers entered into a severance agreement with the Company, which replaced the severance agreements between the named executive officers and the Company entered into under the 2024 EO Plan.
Annual Base Salary
The Board approved increases, effective April 1, 2026, to the annual base salaries of the Company’s named executive officers as follows:
Executive Officer | Prior Salary | New Salary |
Brent Bilsland | $675,000 | $800,000 |
Todd Telesz | $500,000 | $525,000 |
Heath Lovell | $450,000 | $500,000 |
Executive Officer Bonus Performance Plan
The Compensation Committee established the performance goals applicable to each of the Company’s named executive officer’s performance bonus for the 2026 performance period of January 1, 2026, through December 31, 2026, as approved by the Board as part of the 2026 EO Plan. The following tables summarize the performance goals and the corresponding threshold, target, and maximum payout opportunities for the performance period. A portion of each executive’s target bonus is allocated to each performance measure based on the relative base points assigned to that measure.
Performance against each performance goal and the corresponding payout are determined independently, and the level of attainment for any performance measure does not affect the payout associated with any other performance measure. No payout is available for a performance measure if performance is at or below the threshold level. For performance above the threshold level but below the target level, and for performance above the target level but below the maximum level, the payout is determined by straight-line interpolation between zero and the target payout amount and between the target and maximum payout amounts, respectively.
The Compensation Committee retains the discretion to adjust or modify the calculated payout amounts based on its assessment of overall Company performance, individual performance, and other factors it determines to be relevant. The target annual performance bonus opportunities under the Executive Officer Bonus Performance Plan for the fiscal year 2026 for Messrs. Bilsland, Telesz and Lovell are $500,000, $200,000 and $300,000, respectively. Performance bonus amounts, if any, will be paid in a lump sum net of applicable withholding, after audit completion, in March 2027 with respect to the 2026 performance period, subject to the executive officer’s continued service with the Company through December 31, 2026.
Brent K. Bilsland – Chief Executive Officer and President
As Chief Executive Officer, Mr. Bilsland is eligible to receive annual performance bonuses for fiscal year 2026 under the Executive Officer Bonus Performance Plan.
Area | Goals | Base Points | Threshold Goal | Target Goal | Maximum Goal | Payout Does Not Meet Threshold ($) | Payout at Target ($) | Payout at Maximum ($) |
Safety (Sunrise) Note 1 | Severity Measure (National Average) | 5 | 100.00% | 89.00% | 78.00% | 0 | 25,000 | 50,000 |
Violations Per Inspection Day (National Average) | 5 | 0.50% | 0.42% | 0.34% | 0 | 25,000 | 50,000 | |
Safety (Power) Note 2 | Incident Rate | 5 | 5.40% | 4.50% | 3.60% | 0 | 25,000 | 50,000 |
Safety Inspection Rate | 5 | 1.00% | 1.25% | 1.50% | 0 | 25,000 | 50,000 | |
Financial | Adjusted EBITDA ($ million) | 50 | 54.4 | 68.0 | 81.6 | 0 | 250,000 | 500,000 |
Discretionary | 15 | 0 | 75,000 | 150,000 | ||||
Strategic Goals | Note 3 | 15 | 0 | 75,000 | 150,000 |
Todd E. Telesz – Chief Financial Officer
As Chief Financial Officer, Mr. Telesz is eligible to receive annual performance bonuses for fiscal year 2026 under the Executive Officer Bonus Performance Plan.
Area | Goals | Base Points | Threshold Goal | Target Goal | Maximum Goal | Payout Does Not Meet Threshold ($) | Payout at Target ($) | Payout at Maximum ($) |
Safety (Sunrise) Note 1 | Severity Measure (National Average) | 5 | 100.00% | 89.00% | 78.00% | 0 | 10,000 | 20,000 |
Violations Per Inspection Day (National Average) | 5 | 0.50% | 0.42% | 0.34% | 0 | 10,000 | 20,000 | |
Safety (Power) Note 2 | Incident Rate | 5 | 5.40% | 4.50% | 3.60% | 0 | 10,000 | 20,000 |
Safety Inspection Rate | 5 | 1.00% | 1.25% | 1.50% | 0 | 10,000 | 20,000 | |
Financial | Adjusted EBITDA ($ million) | 50 | 54.4 | 68.0 | 81.6 | 0 | 100,000 | 200,000 |
Discretionary | 15 | 0 | 30,000 | 60,000 | ||||
Strategic Goals | Note 3 | 15 | 0 | 30,000 | 60,000 |
Heath A. Lovell – Chief Operating Officer
As Chief Operating Officer, Mr. Lovell is eligible to receive annual performance bonuses for fiscal year 2026 under the Executive Officer Bonus Performance Plan.
Area | Goals | Base Points | Threshold Goal | Target Goal | Maximum Goal | Payout Does Not Meet Threshold ($) | Payout at Target ($) | Payout at Maximum ($) | ||||||
Safety (Sunrise) Note 1 | Severity Measure (National Average) | 5 | 100.00% | 89.00% | 78.00% | 0 | 15,000 | 30,000 | ||||||
Violations Per Inspection Day (National Average) | 5 | 0.50% | 0.42% | 0.34% | 0 | 15,000 | 30,000 | |||||||
Safety (Power) Note 2 | Incident Rate | 5 | 5.40% | 4.50% | 3.60% | 0 | 15,000 | 30,000 | ||||||
Safety Inspection Rate | 5 | 1.00% | 1.25% | 1.50% | 0 | 15,000 | 30,000 | |||||||
Financial | Adjusted EBITDA ($ million) | 50 | 54.4 | 68.0 | 81.6 | 0 | 150,000 | 300,000 | ||||||
Discretionary | 15 | 0 | 45,000 | 90,000 | ||||||||||
Strategic Goals | Note 3 | 15 | 0 | 45,000 | 90,000 | |||||||||
Note 1: | Safety (Sunrise) is based on Sunrise Coal, LLC’s (“Sunrise Coal”) performance percentage relative to the national average for underground coal mines over the preceding 4 years. For the 2026 Performance Period, safety will be determined relative to the 2022 – 2025 period. Actual results for each safety measure will be calculated by Sunrise Coal management with final results when available. |
Note 2: | Safety (Power) is based on Hallador Power Company, LLC’s (“Hallador Power”) performance percentage relative to the national average for coal-fired power generating facilities over the preceding 4 years. For the 2026 Performance Period, safety will be determined relative to the 2022 – 2025 period. Actual results for each safety measure will be calculated by Hallador Power management with final results when available. |
Note 3: | The Compensation Committee has approved strategic goals for the executive officers for 2026, including goals related to the implementation of AI tools, the execution of an interconnection agreement to facilitate the development of a natural-gas fired generating facility at the Company’s Merom Generation Station, and goals related to financing and contracting. |
Restricted Stock Unit Awards
The Board also approved one-time restricted stock unit (“RSU”) grants under the Company’s Second Amended and Restated 2008 Restricted Stock Unit Plan (the “RSU Plan”). The number of RSUs granted to the Company’s named executive officers were determined using the 10-day volume-weighted average price (“VWAP”) prior to April 1, 2026, of $17.19 per share. The aggregate grant date value of the RSUs granted to each of Messrs. Bilsland, Telesz and Lovell is approximately $1,200,000, $275,000 and $400,000, respectively.
Executive Officer | RSU Grant |
Brent Bilsland | 69,808 |
Todd Telesz | 15,998 |
Heath Lovell | 23,270 |
These RSUs vest ratably on March 31, 2027, March 31, 2028, and March 31, 2029, subject to the executive officer’s continued service through each applicable vesting date. Upon a “change in control” (as defined in the RSU Plan), all RSUs will vest in full subject to the executive officer’s continued service through the date of such change in control.
Termination Benefits
The 2026 EO Plan also includes provisions for potential payments upon certain termination events.
Change-in-Control Retention Payments
Under the 2026 EO Plan, each named executive officer who remains employed by the Company through the closing of a transaction constituting a “change in control” (as defined in the 2026 EO Plan) will be entitled to receive a lump sum retention payment on the date of such closing, subject to his execution, delivery and non-revocation of a general release of claims in favor of the Company, and in an amount based on such officer’s salary and performance bonus for the prior fiscal year. Each officer will also be entitled to receive 24 months of health care coverage, either through Company-paid COBRA costs or, for months 19 through 24 following the expiration of COBRA eligibility, paying to the officer an amount equal to the per month cost of such COBRA coverage. If, following the announcement or signing of a transaction constituting a change in control but prior to its closing, a named executive officer’s employment is terminated by the Company without “cause” or the officer resigns for “good reason” (each as defined in the 2026 EO Plan), the officer will remain eligible for the retention payment, reduced on a dollar-for-dollar basis (but not below zero) by any severance paid under his Prior Severance Agreement.
The lump sum retention payment amounts for each named executive officer are as follows:
Executive Officer | Salary Portion | Performance Bonus Portion |
Brent Bilsland | $2,400,000 | Mr. Bilsland is entitled to receive 3 times, and Messrs. Telesz and Lovell are each entitled to receive 2 ½ times, the annualized performance bonus such officer received for the most recently completed fiscal year, plus an amount equal to such officer’s annualized performance bonus for prior fiscal year pro-rated for the period served in the fiscal year in which the closing occurs through the date of closing. |
Todd Telesz | $1,312,500 | |
Heath Lovell | $1,250,000 |
All retention payments are subject to the executive officer continuing employment through the closing or qualifying for payment following a termination without cause or resignation for good reason, as described above.
In addition, the right of each named executive officer to receive the retention payment is subject to such officer entering into an agreement with the acquirer in a change in control transaction to continue to work for the acquirer or its affiliate for a period of three months following the closing (or such lesser period as determined by the acquirer), provided the acquirer desires to engage the officer and agrees to pay the officer (i) a monthly salary equivalent to or greater than the officer’s annual base salary under the 2026 EO Plan and (ii) a retention bonus equivalent to one quarter of the officer’s performance bonus for the most recent completed fiscal year, payable within 30 days after the end of such post-closing employment period.
Severance Agreements
In connection with the 2026 EO Plan, each of Messrs. Bilsland, Lovell and Telesz entered into a new severance agreement with the Company that expires on the earlier of March 31, 2027, or a change in control. Under the severance agreements, a severance payment is available in the event of a termination of such officer’s employment by the Company without “cause” or due to the officer’s resignation for “good reason” (each as defined in the severance agreement). For each officer, the severance payment equals twelve (12) months of base salary in effect as of April 1, 2026, plus the amount of the annual bonus received for the fiscal year prior to the year of termination.