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

 

 

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Cheniere 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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LOGOLOGO

CHENIERE ENERGY, INC. 2019 PROXY STATEMENT


LOGO

April 17, 201715, 2019

To our Shareholders:

It is our pleasure to invite you to attend the Cheniere Energy, Inc. 20172019 Annual Meeting of Shareholders. The meeting will be held at 9:00 a.m., Central Time on May 18, 201716, 2019 at our corporate headquarters located at 700 Milam Street, Suite 1900, Houston, Texas 77002.

The following Notice of Annual Meeting describes the business to be conducted at the 20172019 Annual Meeting of Shareholders. We encourage you to review the materials and vote your shares.

You may vote via the Internet, by telephone, or by submitting your completed proxy card by mail. If you attend the 20172019 Annual Meeting of Shareholders, you may vote your shares in person if you are a shareholder of record.

Thank you for your continued support as investors in Cheniere Energy, Inc.

Very Truly Yours,

 

LOGO
LOGO  LOGOLOGO
G. Andrea Botta  Jack A. Fusco
Chairman of the Board  President and Chief Executive Officer


CHENIERE ENERGY, INC.

700 Milam Street, Suite 1900

Houston, Texas 77002

(713)375-5000

Notice of Annual Meeting of Shareholders

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 

Time and DateTIME AND DATE:

9:00 a.m., Central Time on May 18, 2017

16, 2019

 

PlacePLACE:

Cheniere Energy, Inc.

700 Milam Street, Suite 1900

Houston, TX 77002

 

Items of Business

 

ITEMS OF BUSINESS:

To elect eleventen members of the Board of Directors to hold office for aone-year term expiring at the 20182020 Annual Meeting of Shareholders.

To approve, on an advisory andnon-binding basis, the compensation of the Company’s named executive officers for 2016.

To approve, on an advisory andnon-binding basis, the frequency of holding future advisory votes on the compensation of the Company’s named executive officers.

To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2017.

To approve the amendment and restatement of the Cheniere Energy, Inc. 2011 Incentive Plan.

To transact such other business as may properly come before the meeting and any adjournment or postponement thereof.

 

Record Date  To approve, on an advisory andnon-binding basis, the compensation of the Company’s named executive officers for 2018.

  To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2019.

  To transact such other business as may properly come before the meeting and any adjournment or postponement thereof.

RECORD DATE:

You can vote if you were a shareholder of record on March 30, 2017.

April 1, 2019.

 

Proxy Voting

PROXY VOTING:

It is important that your shares be represented and voted at the meeting. You can vote your shares by completing and returning your proxy card by mail or by voting on the Internet or by telephone. See details under the heading “How do I vote?”

 

Electronic Availability of Proxy MaterialsELECTRONIC AVAILABILITY OF PROXY MATERIALS:

We are making this Proxy Statement, including the Notice of Annual Meeting and 20162018 Annual Report on Form10-K for the year ended December 31, 2016,2018, available on our website at:http://www.cheniere.com/2019AnnualMeeting.

http://www.cheniere.com/2017AnnualMeeting

By order of the Board of Directors

 

LOGOLOGO

Sean N. Markowitz

Corporate Secretary

April 17, 201715, 2019


Table of ContentsTABLE OF CONTENTS

 

PROXY SUMMARY

   

(i1

PROXY STATEMENT

1

General Information2018 Performance and Strategic Accomplishments

   12 

Corporate Governance at a Glance

   5

Shareholder Outreach—Governance

54 

PROPOSAL 1 – ELECTION OF DIRECTORS

   

78

 

Directors and Nominees

   78 

Director Nominations and Qualifications

   810 

Director Biographies

   1012 

GOVERNANCE INFORMATION

   

1417

 

Board Committee Membership and Attendance

   1417 

Director Independence

   1417 

Board Leadership Structure and Role in Risk Oversight

   1518 

Shareholder Outreach–Governance

19

Corporate Social Responsibility and Political ContributionsAdvocacy and Oversight

   1620 

Meetings and Committees of the Board

   1623 

Audit Committee

   1723 

Governance and Nominating Committee

   1724 

Compensation Committee

   1824 

Review of Compensation Risk

   1926 

Code of Conduct and Ethics and Corporate Governance Guidelines

   1926

Director Continuing Education

26 

Compensation Committee Interlocks and Insider Participation

   1927 

Director Compensation

   2027 

MANAGEMENT

   

2229

 

Executive Officers

   2229 

Indemnification of Officers and Directors

   2330 

EQUITY COMPENSATION PLAN INFORMATION

   

2431

 

SECURITY OWNERSHIP

   

2532

 

Directors and Executive Officers

   2532 

Owners of More than Five Percent of Outstanding Stock

   2633 

COMPENSATION DISCUSSION AND ANALYSIS

   

2734

 

Executive Summary

   2734 

Executive Compensation Philosophy & Objectives

   3342 

Components of Our Executive Compensation Program

   3342 

Executive Compensation Process

   4351 

Other Considerations

   4554 

COMPENSATION COMMITTEE REPORT

   

4756

 


SUMMARY COMPENSATION

   

4757

 

Summary Compensation Table

   4757 

All Other Compensation included in the Summary Compensation Table

   4958 

Grants of Plan-Based Awards

   5159 

Narrative to the Summary Compensation & Grants of Plan-Based Awards Tables

   5160 


OUTSTANDING EQUITY AWARDS AT FISCALYEAR-END

   

5261

 

Outstanding Equity Awards at December 31, 20162018

   5261 

OPTION EXERCISES AND STOCK VESTED

   

5362

 

Option Exercises and Stock Vested During Fiscal Year 20162018

   5362 

POTENTIAL PAYMENTS UPON TERMINATION ORCHANGE-IN-CONTROL

   

5463

 

Potential Payments upon Termination orChange-in-Control Assuming Termination Event Occurs on December 30, 201631, 2018

   5463 

Narrative to the Potential Payments upon Termination orChange-in-Control

   5766 

CEO PAY RATIO

67

PROPOSAL 2 – ADVISORY ANDNON-BINDING VOTE TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS FOR 20162018

   

59
68

PROPOSAL 3  – ADVISORY ANDNON-BINDING VOTE ON THE FREQUENCY OF HOLDING FUTURE ADVISORY VOTES ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

 60

REPORT OF THE AUDIT COMMITTEE

   

6169

 

PROPOSAL 43 – RATIFICATION OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 20172019

   

6270

 

Independent Accountant’s Fees

   6270 

Pre-Approval Policies and Procedures

   6271 

PROPOSAL 5  – APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE CHENIERE ENERGY, INC. 2011 INCENTIVE PLAN

63

Summary of the Amended and Restated 2011 Plan

64

Amended and Restated 2011 Plan Benefits

73

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   

7472

 

FREQUENTLY ASKED QUESTIONS

73

General Information

OTHER MATTERS

   

7477

 

Section 16(a) Beneficial Ownership Reporting Compliance

   7477 

Shareholder Proposals

   7477 

Director Nominees for Inclusion in Next Year’s Proxy Statement (Proxy Access)

   7577 

Communications with the Board

   7578 

Householding of Proxy Materials

   7578 

Availability of Documents

   7679 

APPENDIX A: Amended and Restated Cheniere Energy, Inc. 2011 Incentive PlanDefinition of Cumulative Distributable Cash Flow Per Share for 2018 LTI Awards

   

A-1

 

APPENDIX B: Definition of Cumulative Distributable Cash Flow per sharePer Share and Total Shareholder Return for 2019 LTI Awards

   

B-1

 


Proxy Summary

The following is an overview of information that you will find throughout this Proxy Statement. This summary highlights key elements of the more detailed information contained elsewhere in this Proxy Statement, but does not contain all of the information that you should consider. For more complete information about these topics, please review the complete Proxy Statement prior to voting.

Annual Meeting of Shareholders

 

Time and Date9:00 a.m., Central Time on May 18, 2017
PlaceCheniere Energy, Inc.
700 Milam Street, Suite 1900
Houston, TX 77002
Record DateMarch 30, 2017
VotingShareholders as

APPENDIX C: Definition and Reconciliation of the close of business on the record date are entitled to vote.

Each share of common stock is entitled to one vote for each matter to be voted upon.
AdmissionNo admission card is required to enter the Cheniere Energy, Inc. (“Cheniere,” the “Company,” “we,” “us” or “our”) 2017 Annual Meeting of Shareholders (the “Meeting”), but you will need proof of your stock ownership and valid government-issued picture identification. Please see “General Information” on page 1 of this Proxy Statement for more information.

Voting Matters and Board RecommendationsNon-GAAP Measure

 

ProposalBoard Vote
Recommendation

Page Reference

(for more details)

1. Election of directors

FOR EACH NOMINEE7

2. Advisory andnon-binding vote on the compensation of the Company’s named executive officers for 2016

FOR59

3. Advisory andnon-binding vote on frequency of holding future advisory votes on the compensation of the Company’s named executive officers

1 YEAR60

4. Ratification of appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2017

FOR62

5. Approval of the amendment and restatement of the Cheniere Energy, Inc. 2011 Incentive Plan

FOR63

2016 Performance and Strategic Accomplishments

In May 2016 and September 2016, Trains 1 and 2 of the natural gas liquefaction facilities at Sabine Pass (the “SPL Project”) achieved substantial completion, respectively. Subsequent to 2016, in March 2017, Train 3 of the SPL Project achieved substantial completion.

Consolidated revenue for Cheniere was approximately $1.3 billion for 2016, with over $500 million in LNG revenue in the fourth quarter.

In 2016, the SPL Project produced and exported a total of 56 cargoes representing approximately 200 million MMBtu of natural gas.

In May 2016, the Board of Directors (the “Board”) of Cheniere appointed Jack A. Fusco to serve as President and CEO.

(i)


Corporate Governance

We are committed to the values of effective corporate governance and high ethical standards. Our Board believes that these values are conducive to strong performance and creating long-term shareholder value. Our governance framework gives our highly experienced directors the structure necessary to provide oversight, advice and counsel to Cheniere.

Since December 2015, we have taken the following governance actions:

amended our bylaws to provide for proxy access by eligible shareholders, and later further amended the proxy access bylaw to expand the definition of Eligible Holder, clarify the timing required for a shareholder to propose a director nominee and eliminate a provision that allowed the Company to omit a director nominee under certain circumstances;

added additional details regarding the experience of our directors to our proxy statements;

split the Chairman of the Board and CEO roles;

appointed Jack A. Fusco to serve as President and CEO and as a member of the Board;

implemented a prohibition on pledging company securities; and

increased our director ownership guidelines.

The “Governance Information” section of this Proxy Statement, beginning on page 14, describes our corporate governance structure, which includes the following:

Board and Governance Information

Size of Board as of March 30, 2017

   

11Independent Directors Meet Without Management PresentYes
C-1

Number of Independent Directors as of March 30, 2017

 9Annual Board and Committee EvaluationsYes

Average Age of Directors (as of May 18, 2017)

55Succession Planning and Implementation ProcessYes

Board Meetings Held in 2016

(attendance at Board and committee meetings averaged 96%)

17Codes of Conduct for Directors, Officers and EmployeesYes

Annual Election of Directors

YesBoard Risk OversightYes

Mandatory Retirement Age

75Stock Ownership Guidelines for Directors and Executive OfficersYes

Board Diversity

YesProhibition on Hedging and “Short Sales” or “Sales Against the Box”Yes

Majority Voting in Director Elections

YesExecutive Compensation Pay for Performance MetricsYes
Non-Executive Chairman of the Board / Lead Independent DirectorYesSeparate Chairman of the Board and CEOYes

Prohibition on Pledging Company Securities

Yes

 

(ii)


Our Director Nominees

You are being asked to vote on the election of the 11 director nominees listed below. Each director is elected annually by a majority of the votes cast. Detailed information about each nominee, background, skills and expertise can be found in “Proposal 1—Election of Directors” beginning on page 7.

 Name  

Age

(as of May 18,
2017)

  Director
Since
  Principal Occupation

 G. Andrea Botta

  63  2010  Chairman of the Board, Cheniere Energy, Inc.; President, Glenco LLC

 Jack A. Fusco

  54  2016  President and Chief Executive Officer, Cheniere Energy, Inc.

 Vicky A. Bailey

  65  2006  President, Anderson Stratton International, LLC

 Nuno Brandolini

  63  2000  Former General Partner, Scorpion Capital Partners, L.P.

 Jonathan Christodoro

  41  2015  Former Managing Director, Icahn Capital LP

 David I. Foley

  49  2012  Senior Managing Director, The Blackstone Group L.P.

 David B. Kilpatrick

  67  2003  President, Kilpatrick Energy Group

 Samuel Merksamer

  36  2015  Former Managing Director, Icahn Capital LP

 Donald F. Robillard, Jr.

  65  2014  Chief Executive Officer and Chairman, ES Xplore, LLC

 Neal A. Shear

  62  2014  Partner, Silverpeak Partners LP

 Heather R. Zichal

  41  2014  Independent Energy Consultant

Each director nominee attended or participated in at least 75% of the aggregate number of all meetings of the Board of Directors and of each committee on which he or she sits for which the director was eligible to attend.

Corporate Governance Highlight–Proxy Access

Our Board approved a proxy access bylaw amendment on December 9, 2015, which provided for a shareholder (or group of up to 20 shareholders) holding 3% or more of the common stock of the Company for a period of 3 years to nominate up to 20% of the number of directors serving on our Board. Any such nominees will be included with the Board’s nominees in our proxy materials.

In September 2016, the Board amended the Company’s proxy access bylaw to (i) expand the definition of Eligible Holder to specifically allow groups of funds under common management and funded primarily by the same employer to be treated as one Eligible Holder, (ii) clarify the timing required for a shareholder to propose a director nominee and (iii) eliminate the provision that allowed the Company to omit from its Proxy Statement a director nominee who receives a vote of less than 25% of the shares of common stock entitled to vote for such nominee at one of the two preceding annual meetings.

Executive Compensation Highlights

Implemented a more consistent, competitive and conventional total compensation philosophy

Adopted a performance scorecard for the 2017 annual cash bonus

Adopted a Long-Term Incentive program (the “LTI program”) providing for annual awards that reflects a conventional and competitive approach

Terminated the Cheniere Energy, Inc. 2014-2018 Long-Term Cash Incentive Program

Terminated the Company’s 2008 Change of Control Cash Payment Plan and individual Change of Control Agreements; replaced with new, market-competitive arrangements

(iii)


Compensation Governance Practices

Clear, direct link between pay and performance

Primarily performance-based incentive awards

No hedging or “short sales” of Company stock

No pledging of Company stock as collateral for a loan or holding Company stock in margin accounts

Robust stock ownership guidelines

No defined benefit retirement plan or supplemental executive retirement plan

Robust compensation risk management program

Philosophy and Objectives

The Board and the Compensation Committee are committed to apay-for-performance compensation structure that aligns our executive compensation with the key drivers of long-term growth and creation of shareholder value, including:

Annual and long-term incentive awards are primarily performance-based

Annual cash bonus incentive metrics are tied to specific financial, operating, construction, safety and strategic goals

Significant portion of long-term compensation is linked to financial performance and growth metrics

Equity-based compensation that delivers annual, market-competitive opportunities within common norms of shareholder dilution and required value creation

Named Executive Officer Compensation Components

The primary components of the 2016 Named Executive Officer compensation program are as follows:

 TypePurposePage
Reference
 Base SalaryProvide a minimum, fixed level of cash compensation for the named executive officers to compensate executives for services rendered during the fiscal year.33

 Annual Incentive

 Program

Drive achievement of annual corporate goals including key financial, operating, construction, safety and strategic goals that drive value for shareholders.34
 LTI ProgramAlign executive officers’ interests with the interests of shareholders by rewarding financial performance and growth metrics.36

 Post-Employment

 Compensation

Assist executive officers and other eligible employees to prepare financially for retirement, to offer benefits that are competitive andtax-efficient, and to provide a benefits structure that allows for reasonable certainty of future costs.

Help retain executive officers and certain other qualified employees, maintain a stable work environment and provide financial security in the event of achange-in-control or in the event of an involuntary termination of employment in connection with or without achange-in-control.

41

Ratification of KPMG as Auditor for 2017

As a matter of good corporate governance, we are asking our shareholders to ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2017. The following table sets forth the fees billed to us by KPMG for professional services for 2016 and 2015.

    2016   2015 

 Audit Fees

  $6,299,746   $6,017,850 

 Audit Related Fees

  $   $173,000 

 Tax Fees

  $47,473   $115,405 

 All Other Fees

  $2,550   $2,550 

 Total

  $6,349,769   $6,308,805 

(iv)


Amendment and Restatement of the Cheniere Energy, Inc. 2011 Incentive Plan

On April 13, 2017, the Board unanimously approved an amended and restated 2011 Incentive Plan (the “Amended and Restated 2011 Plan”), subject to shareholder approval. The Amended and Restated 2011 Plan will be effective on May 18, 2017 (the “Effective Date”) if it is approved by our shareholders at the Meeting. The Amended and Restated 2011 Plan will apply only to awards granted on or after the Effective Date. The terms and conditions of awards granted under the Cheniere Energy, Inc. 2011 Incentive Plan (the “2011 Plan”) prior to the Effective Date will not be affected by the adoption or approval of the Amended and Restated 2011 Plan. If the Amended and Restated 2011 Plan is not approved by our shareholders at the Meeting, then the 2011 Plan will remain in effect on the terms in force prior to the Meeting with the proposed amendments to the 2011 Plan not taking effect.

The Amended and Restated 2011 Plan revises the 2011 Plan to incorporate several features designed to protect shareholder interests and promote current best practices, including:

Minimum Vesting Requirements: All awards under the Amended and Restated 2011 Plan will be subject to a minimum vesting schedule of at least 12 months following the date of grant of the award; provided, however, that up to 5% of the shares underlying awards granted after the Effective Date may be subject to vesting schedules of less than 12 months. For purposes of this minimum vesting requirement, awards granted to non-employee directors in respect of regular annual fees will be deemed to satisfy the requirement, even if the regular annual shareholder meeting at which the award would vest is not at least 12 months following the grant date of the award.

No Dividend Payments on Unvested Awards: No award granted under the Amended and Restated 2011 Plan may provide for the payment of dividends or dividend equivalents before the date on which the award vests.

Clawbacks: Awards under the Amended and Restated 2011 Plan will be subject to any clawback or recapture policy that the Company may adopt from time to time to the extent provided in such policy.

Share Counting: The Amended and Restated 2011 Plan clarifies that the following will not remain available for awards under the Amended and Restated 2011 Plan: (1) any shares withheld in respect of taxes; (2) any shares tendered or withheld to pay the exercise price of stock options; (3) any shares repurchased by the Company from a participant with the proceeds from the exercise of options; and (4) any shares reserved for issuance under a stock appreciation right award that exceed the number of shares actually issued upon exercise.

Director Grant Limit: Nonon-employee director may be granted in any calendar year awards under the Amended and Restated 2011 Plan in respect of regular annual fees (excluding, for the avoidance of doubt, any special orone-time awards) with an aggregate grant date fair value exceeding $495,000.

Section 162(m) Performance Goals: The Amended and Restated 2011 Plan updates the performance criteria that the Compensation Committee may use in establishing goals for performance-based awards in accordance with Section 162(m) of the Code.

(v)


CHENIERE ENERGY, INC.

700 Milam Street, Suite 1900

Houston, Texas 77002

(713)375-5000

PROXY STATEMENT

General Information

Why did I receive these proxy materials?

We are providing these proxy materials in connection with the solicitation by the Board of Directors (the “Board”) of Cheniere Energy, Inc. (“Cheniere,” the “Company,” “we,” “us” or “our”), a Delaware corporation, of proxies to be voted at our 2017 Annual Meeting of Shareholders (the “Meeting”) and any adjournment or postponement thereof.

You are invited to attend the Meeting on May 18, 2017, beginning at 9:00 a.m., Central Time. The Meeting will be held at the Company’s headquarters at 700 Milam Street, Suite 1900, Houston, Texas 77002.

This Notice of Annual Meeting (“Notice”), Proxy Statement, proxy card and 2016 Annual Report on Form10-K for the year ended December 31, 2016, are being mailed to shareholders on or about April 17, 2017.

Do I need a ticket to attend the Meeting?

You will need proof of ownership and valid government-issued picture identification to enter the Meeting.

If your shares are held beneficially in the name of a bank, broker or other holder of record and you plan to attend the Meeting, you must present proof of your ownership of Cheniere stock, as of March 30, 2017 (the “Record Date”), such as a bank or brokerage account statement, to be admitted to the Meeting.

If you have any questions about attending the Meeting, you may contact Investor Relations at info@cheniere.com or713-375-5100.

No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted at the Meeting.

Who is entitled to vote at the Meeting?

Holders of Cheniere common stock at the close of business on the Record Date are entitled to receive this Notice and to vote their shares at the Meeting. As of the Record Date, there were 237,859,646 shares of common stock outstanding and entitled to vote. Each share of common stock is entitled to one vote on each matter properly brought before the Meeting.

What is the difference between holding shares as a shareholder of record and as a beneficial owner?

If your shares are registered directly in your name with Cheniere’s transfer agent, Computershare Trust Company, N.A., you are considered the “shareholder of record” of those shares. The Notice, Proxy Statement, proxy card and 2016 Annual Report on Form10-K for the year ended December 31, 2016, have been sent directly to you by Cheniere. If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the “beneficial owner” of such shares held in street name. The Notice, Proxy Statement, proxy card and 2016 Annual Report on Form10-K for the year ended December 31, 2016, have been forwarded to you by your broker, bank or other holder of record, who is considered the shareholder of record of those shares. As the beneficial owner, you have the right to direct your broker, bank or other holder of record on how to vote your shares by using the voting instruction card included in the mailing or by following their instructions for voting by telephone or on the Internet.

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement1


How do I vote?

You may vote using any of the following methods:

By mail

You may submit your proxy vote by mail by signing a proxy card if your shares are registered or, for shares held beneficially in street name, by following the voting instructions included by your broker, trustee or nominee, and mailing it in the enclosed envelope. If you provide specific voting instructions, your shares will be voted as you have instructed. If you do not indicate your voting preferences, your shares will be voted as recommended by the Board; provided, however, if you are a beneficial owner, your bank, broker or other holder of record is not permitted to vote your shares on the following proposals if your bank, broker or other holder of record does not receive specific voting instructions from you: Proposal 1 to elect directors, Proposal 2 to approve, on an advisory andnon-binding basis, the compensation of the Company’s named executive officers for 2016, Proposal 3 to approve, on an advisory andnon-binding basis, the frequency of holding future advisory votes on the compensation of the Company’s named executive officers and Proposal 5 to approve the amendment and restatement of the Cheniere Energy, Inc. 2011 Incentive Plan.

By telephone or on the Internet

If you have telephone or Internet access, you may submit your proxy vote by following the instructions provided on your proxy card or voting instruction form. If you are a beneficial owner, the availability of telephone and Internet voting will depend on the voting processes of your broker, bank or other holder of record. Therefore, we recommend that you follow the voting instructions in the materials you receive.

In person at the Meeting

If you are the shareholder of record, you have the right to vote in person at the Meeting. If you are the beneficial owner, you are also invited to attend the Meeting. Since a beneficial owner is not the shareholder of record, you may not vote these shares in person at the Meeting unless you obtain a “legal proxy” from your broker, bank or other holder of record that holds your shares, giving you the right to vote the shares at the Meeting.

Can I revoke my proxy?

If you are a shareholder of record, you can revoke your proxy before it is exercised by:

written notice to the Corporate Secretary of the Company;

timely delivery of a valid, later-dated proxy; or

voting by ballot at the Meeting.

If you are a beneficial owner of shares, you may submit new voting instructions by contacting your bank, broker or other holder of record. You may also vote in person at the Meeting if you obtain a legal proxy as described in the answer to the preceding question.

Who will receive a proxy card?

If you are a shareholder of record, you will receive a proxy card for the shares you hold in certificate form or in book-entry form. If you are a beneficial owner, you will receive voting instructions from your bank, broker or other holder of record.

Is there a list of shareholders entitled to vote at the Meeting?

The names of shareholders of record entitled to vote at the Meeting will be available at the Meeting and for ten days prior to the Meeting for any purpose germane to the Meeting. The list will be available between the hours of 8:30 a.m. and 4:30 p.m., Central Time, at our offices at 700 Milam Street, Suite 1900, Houston, Texas 77002, by contacting the Corporate Secretary of the Company.

2Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


What are the voting requirements to elect the directors and to approve each of the proposals discussed in this Proxy Statement?

The presence in person or by proxy of the holders of a majority in voting power of the outstanding shares of common stock entitled to vote at the Meeting is necessary to constitute a quorum. In the absence of a quorum at the Meeting, the Meeting may be adjourned from time to time without notice, other than an announcement at the Meeting, until a quorum is present. Abstentions and “brokernon-votes” represented by submitted proxies will be included in the calculation of the number of the shares present at the Meeting for purposes of determining a quorum. “Brokernon-votes” occur when a bank, broker or other holder of record holding shares for a beneficial owner does not vote on a particular proposal because that holder does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.

Proposal 1—Directors are elected by a majority of the votes cast with respect to such director nominee at the Meeting, meaning that the number of votes cast “for” a director must exceed the number of votes cast “against” that director. If you are a beneficial owner, your bank, broker or other holder of record may not vote your shares with respect to Proposal 1 without specific instructions from you as to how to vote with respect to the election of each of the eleven nominees for director. Abstentions and brokernon-votes represented by submitted proxies willnot be considered votes cast and therefore will not be taken into account in determining the outcome of the election of directors.

Proposal 2—To be approved, Proposal 2 regarding the compensation of the Company’s named executive officers for fiscal year 2016 must receive the affirmative vote of the holders of a majority in voting power of the shares entitled to vote on the matter, present in person or by proxy at the Meeting. Because your vote is advisory, it will not be binding on the Board or the Company. If you are a beneficial owner, your bank, broker or other holder of record may not vote your shares with respect to Proposal 2 without specific instructions from you. Abstentions will be counted “against” Proposal 2. Brokernon-votes willnot count as shares entitled to vote on the matter.

Proposal 3—In the case of Proposal 3 regarding the frequency of holding future advisory votes on the compensation of the Company’s named executive officers, the frequency that receives the affirmative vote of holders of a majority in voting power of the shares entitled to vote on the matter, present in person or by proxy at the Meeting will be deemed the frequency selected by shareholders. However, in the event that no frequency receives such majority, the Board will consider the frequency that receives the most votes. Because your vote is advisory, it will not be binding on the Board or the Company. If you are a beneficial owner, your bank, broker or other holder of record may not vote your shares with respect to Proposal 3 without specific instructions from you. Abstentions will be counted “against” each frequency. Brokernon-votes willnot count as shares entitled to vote on the matter.

Proposal 4—To be approved, Proposal 4 to ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2017 must receive the affirmative vote of the holders of a majority in voting power of the shares entitled to vote on the matter, present in person or by proxy at the Meeting. If you are a beneficial owner, your bank, broker or other holder of record has the authority to vote your shares on Proposal 4 if you have not furnished voting instructions within a specified period of time prior to the Meeting. Abstentions will be counted “against” Proposal 4.

Proposal 5—To be approved, Proposal 5 to approve the amendment and restatement of the Cheniere Energy, Inc. 2011 Incentive Plan must receive the affirmative vote of the holders of a majority in voting power of the shares entitled to vote on the matter, present in person or by proxy at the Meeting. If you are a beneficial owner, your bank, broker or other holder of record may not vote your shares with respect to Proposal 5 without specific instructions from you. Abstentions will be counted “against” Proposal 5. Brokernon-votes willnot count as shares entitled to vote on the matter.

What if a director nominee does not receive a majority of votes cast?

Our Amended and Restated Bylaws, as amended (“Bylaws”) require directors to be elected by the majority of the votes cast with respect to such director (i.e., the number of votes cast “for” a director must exceed the number of votes cast “against” that director). If a nominee who is serving as a director is not elected at the Meeting and no one else is elected in place of that director, then, under Delaware law, the director would continue to serve on the Board as a “holdover director.” However, under our Bylaws, the holdover director is required to tender his or her resignation to the Board. The Governance and Nominating Committee of the

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement3


Board then would consider the resignation and recommend to the Board whether to accept or reject the tendered resignation, or whether some other action should be taken. The Board would then make a decision whether to accept the resignation, taking into account the recommendation of the Governance and Nominating Committee. The director who tenders his or her resignation will not participate in the Governance and Nominating Committee’s or the Board’s decision. The Board is required to disclose publicly (by a press release and a filing with the Securities and Exchange Commission (“SEC”)) its decision regarding the tendered resignation and, if the tendered resignation is rejected, the rationale behind the decision within 90 days from the date of the certification of the election results.

Could other matters be decided at the Meeting?

As of the date of this Proxy Statement, we do not know of any matters to be raised at the Meeting other than those referred to in this Proxy Statement. If other matters are properly presented for consideration at the Meeting, the persons named in your proxy card will have the discretion to vote on those matters for you.

Who will pay for the cost of this proxy solicitation?

We will pay for the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers or employees in person or by telephone, electronic transmission and facsimile transmission. We have hired D. F. King & Co., Inc., 48 Wall Street, 22nd Floor, New York, NY 10005, to solicit proxies. We will pay D.F. King a fee of $15,000 plus expenses for these services.

Who will count the vote?

Broadridge Financial Solutions, Inc., an independent third party, will tabulate the votes.

Important NoticeNote Regarding the Availability of Proxy Materials for the 2017 Annual Meeting to be held on May 18, 2017

The Proxy Statement, including the Notice and 2016 Annual Report on Form10-KForward-Looking Statements for the year ended December 31, 2016, are available on our website athttp://www.cheniere.com/2017AnnualMeeting. Please note that the Notice is not a form for voting, and presents only an overview of the more complete proxy materials, which contain important information and are available on the Internet or by mail. We encourage our shareholders to access and review the proxy materials before voting.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Proxy Statement contains forward-looking statements relating to, among other things, business strategy, performance and expectations for project development. The reader is cautioned not to place undue reliance on these statements and should review the sections captioned “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form10-K for important information about these statements, including the risks, uncertainties and other factors that could cause actual results to vary materially from the assumptions, expectations and projections expressed in any forward-looking statements. These forward-looking statements speak only as of the date made, and, other than as required by law, we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or developments or otherwise.


PROXY SUMMARY

The following is an overview of information that you will find throughout this Proxy Statement, but does not contain all of the information that you should consider. For more complete information about these topics, please review the complete Proxy Statement prior to voting.

ANNUAL MEETING OF SHAREHOLDERS

LOGO

TIME AND DATE:

9:00 a.m., Central Time on May 16, 2019

LOGO

PLACE:

Cheniere Energy, Inc.

700 Milam Street, Suite 1900

Houston, TX 77002

LOGO

RECORD DATE:

April 1, 2019 (the “Record Date”)

LOGO

VOTING:

Shareholders as of the close of business on the Record Date are entitled to vote.

Each share of common stock is entitled to one vote for each matter to be voted upon.

LOGOADMISSION:

No admission card is required to enter the Cheniere Energy, Inc. (“Cheniere,” the “Company,” “we,” “us” or “our”) 2019 Annual Meeting of Shareholders (the “Meeting”), but you will need proof of your stock ownership and valid government-issued picture identification. Please see “Frequently Asked Questions” on page 73 of this Proxy Statement for more information.

VOTING MATTERS AND BOARD RECOMMENDATIONS

PROPOSAL

 

 

DESCRIPTION

 

  

BOARD VOTE RECOMMENDATION

 

  

PAGE REFERENCE

  (FOR MORE DETAILS)  

1

 Election of directors  FOR EACH NOMINEE  8

2

 Advisory andnon-binding vote on the compensation of the Company’s named executive officers for 2018  

 

FOR

  

 

68

3

 Ratification of appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2019  

 

FOR

  

 

70

2019 PROXY STATEMENT1


PROXY SUMMARY

2018 PERFORMANCE AND

STRATEGIC ACCOMPLISHMENTS

The following items highlight our 2018 and recent accomplishments. For more information about these accomplishments and their relationship to our executive compensation program, please see “Compensation Discussion and Analysis” on page 34 of this Proxy Statement.

Final investment decision with respect toCorpus Christi Train 3Signedlong-term SPAs for~7.5 MTPA of LNGRecord financial results:revenue of~$8 billion, net income ofover $470 million and Consolidated Adjusted EBITDA ofover $2.6 billion

Over270 cargoes exported in 2018 totaling~1 TCF of LNG

Strategic

In November 2018, we entered into an engineering, procurement and construction (“EPC”) contract with Bechtel Oil, Gas and Chemicals, Inc. (“Bechtel”) for Train 6 of the natural gas liquefaction and export facilities at the Sabine Pass LNG terminal in Louisiana (the “SPL Project”). We also issued limited notices to proceed to Bechtel to commence early engineering, procurement and site works.

In May 2018, our Board made a positive final investment decision (“FID”) with respect to Train 3 of the natural gas liquefaction and export facility at the Corpus Christi LNG terminal (the “CCL Project”) and issued a full notice to proceed to Bechtel under the EPC contract for Train 3.

In June 2018, we filed an application with the Federal Energy Regulatory Commission with respect to Corpus Christi Stage 3, consisting of seven midscale liquefaction Trains with an expected aggregate nominal production capacity of approximately 9.5 million tonnes per annum (“mtpa”) and one liquefied natural gas (“LNG”) storage tank.

In 2018, we signed seven long-term sale and purchase agreements (“SPAs”) with six creditworthy counterparties totaling approximately 7.5 mtpa of LNG.

Operational

As of February 20, 2019, over 575 cumulative LNG cargoes have been produced, loaded and exported from the SPL Project and the CCL Project, with more than 270 cargoes in 2018 alone from the SPL Project, with deliveries to 32 countries and regions worldwide.

In November 2018 and December 2018, we commenced production and shipment of LNG commissioning cargoes from Train 5 of the SPL Project and Train 1 of the CCL Project, respectively, leading to the substantial completion of Train 1 of the CCL Project in February 2019 and Train 5 of the SPL Project in March 2019.

For full year 2018, over 23 million hours of labor were completed with a Lost Time Incident Rate of approximately 0.01. This achievement places us within the top quartile of benchmark metrics published by the Bureau of Labor Statistics for North American Industry Classification (NAICS) codes that align with our work activities.

For full year 2018, a total of approximately 975 TBtu of LNG was exported from the SPL Project and the CCL Project, which was approximately 87% of all LNG exported from the United States.

Financial

For full year 2018, we achieved record results in multiple key financial metrics, including net income attributable to common stockholders of over $470 million, consolidated revenues of approximately $8 billion and Consolidated Adjusted EBITDA of over $2.6 billion. For a definition of Consolidated Adjusted EBITDA and a reconciliation of thisnon-GAAP measure to net income, the most directly comparable GAAP financial measure, please see Appendix C.

During 2018, our stock price increased by approximately 10% and outperformed the S&P 500 Index by approximately 15%. Additionally, the total enterprise value of the Company increased by approximately 12%.

2CHENIERE


2018 PERFORMANCE AND STRATEGIC ACCOMPLISHMENTS

In September 2018, we closed the previously announced merger of Cheniere Energy Partners LP Holdings, LLC (“Cheniere Holdings”) with our wholly owned subsidiary.

We reached the following contractual milestones:

In June 2018, the date of first commercial delivery was reached under the20-year SPA with BG Gulf Coast LNG, LLC relating to Train 3 of the SPL Project.

In March 2018, the date of first commercial delivery was reached under the20-year SPA with GAIL (India) Limited relating to Train 4 of the SPL Project.

2019 PROXY STATEMENT3


PROXY SUMMARY

CORPORATE GOVERNANCE

We are committed to the values of effective corporate governance and high ethical standards. Our Board of Directors (the “Board”) believes that these values are conducive to strong performance and creating long-term shareholder value. Our governance framework gives our highly experienced directors the structure necessary to provide oversight, advice and counsel to Cheniere.

Since our 2017 Annual Meeting, we have taken the following governance actions:

engaged with more than 50% of our shareholders each year regarding governance matters;

added additional details regarding the experience of our directors to our proxy statements;

increased our director ownership guidelines; and

adoptednon-employee director equity compensation limits.

The “Governance Information” section of this Proxy Statement, beginning on page 17, describes our corporate governance structure and policies, which include the following:

 

4Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Corporate Governance at a Glance

  

Board Independence

 

 9  8 out of 1110 of our current directors were independent in 2016 (following the end of Mr. Shear’s term as Interim Special Advisor to the CEO).

• 9 out of 11 of ourand director nominees are currently independent.

  Independent directors meet regularly without management present.

 Our former Interim CEO and President (prior to May 11, 2016) and our current President and CEO (as of June 2, 2016) were the only management directors in 2016.

  Our President and CEO is the only current management director.

 

Board Composition 

  The Board consists of 11 directors.10 directors, with an average age of 59 (as of May 16, 2019).

 The Board regularly assesses its performance through Board and committee self-evaluations.

  The Board values diversity and experience in assessing its composition.

 

  Board Performance

  The Board regularly assesses its performance through Board and committee self-evaluations.

Board Committees 

  We have three standing Board committees—Audit, Governance and Nominating and Compensation.

  All of our Board committees are comprised of and chaired solely by independent directors.

 

Leadership Structure 

  Our Chairman of the Board and CEO roles were split in December 2015.

  Our independentNon-Executive Chairman of the Board provides leadership to the Board and ensures that the Board operates independently of management.

 

Risk Oversight 

  The Board has oversight responsibility for assessing the primary risks (including liquidity, credit, operations and regulatory compliance) facing the Company, the relative magnitude of these risks and management’s plan for mitigating these risks. In addition to the Board’s oversight responsibility, the committees of the Board review the risks that are within their areas of responsibility.

 

Open Communication 

  We encourage open communication and strong working relationships among theNon-Executive Chairman of the Board and other directors.

  Our directors have access to management and employees.

 

Director and

Executive Stock

Ownership

 

  We have had rigorous stock ownership guidelines for our directors and executive officers since 2008 and amended our stock ownership guidelines for our directors in February 2017 to make them more rigorous.

 

Director Compensation

  Limit

 

  We have capped the annual ordinary course equity award that may be granted to anon-employee director which will not exceedat $495,000 in aper calendar year. Please see "Director Compensation" on pages 27-28 of this Proxy Statement.

 

Accountability to

Shareholders

 

  Directors are elected annually by a majority of the votes cast with respect to such director.

  The Board maintains a process for shareholders to communicate with the Board.

  We conduct an annual advisorysay-on-pay vote.

  A shareholder, or a group of up to 20 shareholders, owning at least 3% of our common stock for at least the prior 3 consecutive years (and meeting certain other requirements) have the ability to nominate up to 20% of the number of directors serving on our Board (proxy access).

 

Management

Succession Planning

 

  The Governance and Nominating Committee has oversight of succession planning, both planned and emergency.

 

  Governance Policies

  Directors are required to retire at age 75.

  We maintain codes of conduct for directors, officers and employees.

  We do not allow pledging of Company stock as collateral for a loan or holding Company stock in margin accounts.

  We do not allow hedging or short sales of Company stock.

  We do not have a shareholder rights plan, or “poison pill”.

Shareholder Outreach–Governance

4CHENIERE


OUR DIRECTOR NOMINEES

 

OUR DIRECTOR NOMINEES

The Company

You are being asked to vote on the election of the 10 director nominees listed below. Each director is elected annually by a majority of the votes cast. Detailed information about each nominee, including background, skills and expertise, can be found in “Proposal 1 – Election of Directors” beginning on page 8.

 NAME

 

  

AGE

(AS OF MAY 16,

2019)

 

  

DIRECTOR

SINCE

 

  

PRINCIPAL OCCUPATION

 

  G. Andrea Botta  65  2010  Chairman of the Board, Cheniere Energy, Inc.; President, Glenco LLC
  Jack A. Fusco  56  2016  President and Chief Executive Officer, Cheniere Energy, Inc.
  Vicky A. Bailey  67  2006  President, Anderson Stratton International, LLC
  Nuno Brandolini  65  2000  Former General Partner, Scorpion Capital Partners, L.P.
  David I. Foley  51  2012  Senior Managing Director, The Blackstone Group L.P.; Chief Executive Officer, Blackstone Energy Partners L.P.
  David B. Kilpatrick  69  2003  President, Kilpatrick Energy Group
  Andrew Langham  46  2017  General Counsel, Icahn Enterprises L.P.
  Courtney R. Mather  42  2018  Portfolio Manager of Icahn Capital
  Donald F. Robillard, Jr.  67  2014  Former Executive Vice President, Chief Financial Officer and Chief Risk Officer of Hunt Consolidated, Inc. and Former Chief Executive Officer and Chairman, ES Xplore, LLC

  Neal A. Shear

  64  2014  Senior Advisor and Chair of the Advisory Committee of Onyxpoint Global Management LP

Each director nominee attended or participated in at least 75% of the aggregate number of all meetings of the Board and of each committee on which he or she sits for which the director was eligible to attend in 2018.

EXECUTIVE COMPENSATION HIGHLIGHTS

In late 2016 and early 2017, our leadership team and Compensation Committee considered input from our shareholders regarding executive compensation. As a result, we implemented several fundamental changes to our executive compensation program to align with our peer group at the time, which focused on our national industry classification – natural gas storage and transportation – and included a number of regulated utilities and smaller pipeline companies. As a result of our growth from a development company into a top tier LNG operator and receipt of shareholder feedback, the Compensation Committee, together with Meridian Compensation Partners, its independent compensation consultant, has been involved in extensive discussions with shareholders duringfurther refined the framework of our executive compensation program for 2019. Our achievements and success over the past several years regarding governance matters,led to a realignment with a new peer group for 2019, and we have reassessed our compensation framework to be consistent with our new peer group and more closely align with our share price performance. Our new program contemplates awarding all compensation within the evolution of our governancedesigned framework is a product of the Board’s responsivenessapproved plan, rather than featuringad-hoc grants that can lead to significant variation in year over year compensation. We believe these changes align our program with competitive ranges in our new peer group and take into account the shareholder input.feedback that we have received.

AheadCompensation Governance Practices

Clear, direct link between pay and performance

Majority of our 2016 Annual Meetingincentive awards earned based on performance

No hedging or “short sales” of Shareholders (the “2016 Annual Meeting”), membersCompany stock

No pledging of our Board andCompany stock as collateral for a loan or holding Company stock in margin accounts

2019 PROXY STATEMENT5


PROXY SUMMARY

Robust stock ownership guidelines

No defined benefit retirement plan or supplemental executive retirement plan

Robust compensation risk management reached outprogram

Non-employee director equity compensation limits

Minimum vesting schedule for long-term incentive awards of at least 12 months, subject to and had extensive dialogue with, shareholders representing approximately 60% of our outstanding common stock, through bothin-person and telephonic meetings. Following our 2016 Annual Meeting, we engaged with shareholders holding in excess of 50%limited exceptions

No material perquisites

Solicit annual advisory vote on executive compensation

Annually review the independence of the Company’s outstanding common stock,compensation consultant retained by the Compensation Committee

Philosophy and we intend to continue our shareholder outreach efforts going forward.Objectives

The Board believesand the Compensation Committee are committed to apay-for-performance compensation structure that its current systemaligns our executive compensation with the key drivers of corporate governance oversight enables the directors to be prudent stewardslong-term growth and creation of shareholder capitalvalue, including:

Annual and represent the long-term interestsincentive awards are primarily performance-based

Annual incentive awards earned are based on achievement of the Companyspecific financial, operating, construction, safety and strategic goals

A significant portion of long-term incentive awards earned is based on financial performance and growth metrics

Equity-based compensation delivers annual, market-competitive opportunities within common norms of shareholder dilution and value creation

Executive Compensation Components

The primary components of our shareholders. In addition, the Board is responsiveexecutive compensation program, as applied to changes in the general corporate governance environment.

our 2018 Named Executive Officers, are as follows:

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement

TYPE

  5

PURPOSE

PAGE

REFERENCE

Base Salary

Provide a minimum, fixed level of cash compensation to compensate executives for services rendered during the fiscal year.42

Annual Incentive

Program

Drive achievement of annual corporate goals including key financial, operating, construction, safety and strategic goals that create value for shareholders.43

LTI Program

Align executive officers’ interests with the interests of shareholders by rewarding sustained financial performance and growth through a multi-year performance period.45

Post-Employment

Compensation

Assist executive officers and other eligible employees to prepare financially for retirement, to offer benefits that are competitive andtax-efficient and to provide a benefits structure that allows for reasonable certainty of future costs. Help retain executive officers and certain other qualified employees, maintain a stable work environment and provide financial security in the event of achange-in-control or in the event of an involuntary termination of employment.49-51


Key Themes from Our Shareholder Outreach

6CHENIERE

Many


RATIFICATION OF KPMG AS AUDITOR FOR 2019

RATIFICATION OF KPMG AS AUDITOR FOR 2019

As a matter of good corporate governance, we are asking our shareholders have different methodologiesto ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2019. The following table sets forth the fees billed to us by KPMG for professional services for 2018 and processes for evaluating governance programs. However, a number of common themes emerged during our discussions with shareholders, which included:2017.

 

Request for implementation of proxy access and amendments thereto. Many of our shareholders expressed a desire for the Company to implement proxy access. Our Board approved a proxy access bylaw amendment on December 9, 2015 which provided for a shareholder (or group of up to 20 shareholders) holding 3% or more
   2018    2017 

Audit Fees

  $6,663,332   $6,954,381 

Audit Related Fees

  $   $ 

Tax Fees

  $196,480   $88,565 

All Other Fees

  $2,430   $80,570 

Total

  $6,862,242   $7,123,516 

See “Report of the common stock of the Company for a period of 3 years to nominate up to 20% of the number of directors serving on the Company’s Board, and such nominees will be included with the Board’s nominees in the Company’s proxy materials. During our shareholder outreach, our shareholders generally expressed support for the 20 shareholder group and up to 20% of the board formulation.

Request for additional detail regarding the experience and expertise of our directors with a focus on Board refreshment.Several of our shareholders have expressed interest in understanding the core competencies of our Board, particularly as we transition from a development company into a liquefied natural gas (“LNG”) operator. We have included tabular disclosure regarding the qualifications of our directorsAudit Committee” on page 8 of this Proxy Statement. Our Governance & Nominating Committee continues to review the qualifications of the Board for the right experience and expertise. In May 2016, the Board appointed Jack A. Fusco to serve as President and CEO, and in June 2016, the Board appointed Mr. Fusco as a member of the Board. Mr. Fusco has over 30 years of experience in the energy industry and has significant experience leading companies with large-scale, asset-intensive portfolios and implementing corporate strategies focused on capital allocation, strategic developments and optimizing shareholder value, which will help us as we transition into one of the top global LNG companies.

Request that the Board continue to monitor and implement best governance practices. Our Board is responsive to changes in the general corporate governance environment and strives to implement best governance practices in a timely manner.

Actions Taken as a Result of Our Shareholder Outreach

Following our shareholder outreach, the Governance and Nominating Committee69 and the Board reviewed and considered our shareholders’ feedback as part of its review and adoption of changes to our governance structure. The Board then took the following actions:information provided in Proposal 3, beginning on page 70, for more details.

 

Action TakenDescription

Provided Detail regarding Director Experience and Expertise

• We have included detail regarding our directors’ core competencies on page 8 of this Proxy Statement.

Independent Chairman; Hired President and CEO who was Added as a New Director

• In December 2015, our Chairman of the Board and CEO roles were split.

• As of January 2016, our independentNon-Executive Chairman of the Board assumed the responsibilities of the Lead Director which include providing leadership to the Board and ensuring that the Board operates independently of management.

• In May 2016, the Board appointed Jack A. Fusco to serve as President and CEO, and in June 2016, the Board appointed Mr. Fusco as a member of the Board.

Further Amended our Proxy Access Bylaw

• In September 2016, the Board amended the Company’s proxy access bylaw to (i) expand the definition of Eligible Holder to specifically allow groups of funds under common management and funded primarily by the same employer to be treated as one Eligible Holder, (ii) clarify the timing required for a shareholder to propose a director nominee, and (iii) eliminate the provision that allowed the Company to omit from its Proxy Statement a director nominee who receives a vote of less than 25% of the shares of common stock entitled to vote for such nominee at one of the two preceding annual meetings.

Continued Implementation of best governance practices

• In September 2016, the Board implemented a prohibition on pledging company securities.

• In February 2017, the Board increased its director ownership guidelines.

See page 29 of this Proxy Statement for a discussion regarding actions taken by our Board with respect to compensation matters as a result of shareholder outreach.

6 Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement
2019 PROXY STATEMENT7


PROPOSAL 1ELECTION OF DIRECTORS

Directors and Nominees

DIRECTORS AND NOMINEES

 

This year, there are eleven10 nominees standing for election as directors at the Meeting. Below is a summary of our director nominees, including their committee memberships as of April 17, 2017.15, 2019. The Board, with assistance from the Governance and Nominating Committee, will evaluate and reassign committee memberships as needed following the Meeting and election of the director nominees. Detailed information about each director’s background, skills and expertise is provided below.

 

               Nominee Committee Memberships

Name

Current Position

  Age
(as of May 18,
2017)
   Director
Since
   Independent   Audit  Governance &
Nominating
  Compensation

G. Andrea Botta

Chairman of the Board

Cheniere Energy, Inc.

President

Glenco LLC

   63    2010    YES       

Jack A. Fusco

President and Chief Executive Officer

Cheniere Energy, Inc.

   54    2016    NO       

Vicky A. Bailey

President

Anderson Stratton International, LLC

   65    2006    YES     Chair  

Nuno Brandolini

Former General Partner

Scorpion Capital Partners, L.P.

   63    2000    YES       Chair

Jonathan Christodoro

Former Managing Director

Icahn Capital LP

   41    2015    YES       

David I. Foley

Senior Managing Director

The Blackstone Group L.P.

   49    2012    NO       

David B. Kilpatrick

President

Kilpatrick Energy Group

   67    2003    YES       

Samuel Merksamer

Former Managing Director

Icahn Capital LP

   36    2015    YES   F    

Donald F. Robillard, Jr.

Chief Executive Officer and Chairman

ES Xplore, LLC

   65    2014    YES   Chair;

F

    

Neal A. Shear

Partner

Silverpeak Partners LP

   62    2014    YES       

Heather R. Zichal

Independent Energy Consultant

   41    2014    YES        
               NOMINEE COMMITTEE MEMBERSHIPS

NAME

CURRENT POSITION

  

AGE

(AS OF MAY 16,

2019)

   

DIRECTOR

SINCE

   INDEPENDENT   AUDIT  

GOVERNANCE AND

NOMINATING

  COMPENSATION

G. Andrea Botta

Chairman of the Board,

Cheniere Energy, Inc.

President,

Glenco LLC

   65    2010    YES      Chair   

Jack A. Fusco

President and Chief Executive Officer,

Cheniere Energy, Inc.

   56    2016    NO          

Vicky A. Bailey

President,

Anderson Stratton International, LLC

   67    2006    YES        

Nuno Brandolini

Former General Partner,

Scorpion Capital Partners, L.P.

   65    2000    YES        

David I. Foley

Senior Managing Director,

The Blackstone Group L.P.

Chief Executive Officer,

Blackstone Energy Partners L.P.

   51    2012    NO          

David B. Kilpatrick

President,

Kilpatrick Energy Group

   69    2003    YES        

Andrew Langham

General Counsel,

Icahn Enterprises L.P.

   46    2017    YES        

Courtney R. Mather

Portfolio Manager of Icahn Capital

   42    2018    YES   

F

      

Donald F. Robillard, Jr.

Former Executive Vice President,

Chief Financial Officer and Chief Risk Officer of Hunt Consolidated, Inc. and Former Chief Executive Officer and Chairman, ES Xplore, LLC

   67    2014    YES   Chair;

F

      

Neal A. Shear

Senior Advisor and Chair of the Advisory Committee of Onyxpoint Global Management LP

   64    2014    YES         Chair

F     Audit Committee Financial Expert

The Board has determined that each of Messrs. Mather and Robillard is an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K promulgated by the Securities and Exchange Commission (“SEC”).

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement 7
8CHENIERE


DIRECTORS AND NOMINEES

Summary of Director Core Competencies

The following chart summarizes the core competencies currently represented onof our Board.director nominees.

SNAPSHOT OF 2019 DIRECTOR NOMINEES

Our director nominees complement each other to create
a well-rounded boardroom, and each adds:

A deep commitment to stewardship

A proven record of success

Unique and valuable insight

International industry experience

 

 

LOGO

LOGO

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There are eleven10 nominees standing for election as directors at the Meeting. Each nominee, if elected, will hold office for aone-year term expiring at the 20182020 Annual Meeting of Shareholders and will serve until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal.

Each of the director nominees currently serves on the Board and has consented to serve as a director if elected orre-elected.

Each of the director nominees was elected bycurrently serves on the Company’s shareholders, other than Mr. Fusco, who was appointed by the Board on June 2, 2016.

Board. Directors are elected by a majority of votes cast with respect to such director nominee. Unless your proxy specifies otherwise, it is intended that the shares represented by your proxy will be voted for the election of these eleven10 nominees. If you are a beneficial owner, your bank, broker or other holder of record is not permitted to vote your shares on Proposal 1 to elect directors if the bank, broker or other holder of record does not receive specific voting instructions from you. Proxies cannot be voted for a greater number of persons than the number of nominees named. The Board is unaware of any circumstances likely to render any nominee unavailable.

LOGO

The Board recommends a voteFOR the election of the eleven10 nominees as directors of the Company to hold office for aone-year term expiring at the 20182020 Annual Meeting of Shareholders or until their successors are duly elected and qualified.

2019 PROXY STATEMENT9

Director Nominations and Qualifications


PROPOSAL 1 – ELECTION OF DIRECTORS

 

DIRECTOR NOMINATIONS AND QUALIFICATIONS

Director Nomination Policy and Procedures. Our Director Nomination Policy and Procedures is attached to the Governance and Nominating Committee’s written charter as Exhibit A, which is available on our website atwww.cheniere.com. The Governance and Nominating Committee considers suggestions for potential director nominees to the Board from any source, including current members of the Board and our management, advisors and shareholders. The Governance and Nominating Committee evaluates potential nominees by reviewing their qualifications and any other information deemed relevant. Director nominees are recommended to the Board by the Governance and Nominating Committee.

The full Board will select and recommend candidates for nomination as directors for shareholders to consider and vote upon at the annual shareholders’ meeting. The Governance and Nominating Committee reviews and considers any candidates submitted by a shareholder or shareholder group in the same manner as all other candidates.

Snapshot of 2017 Director Nominees Our Directors complement each other to create a well-rounded boardroom, and each adds: A deep commitment to stewardship A proven record of success Unique and valuable insight International Industry Experience Average Age 55.4 years Average tenure 6.7 years Our Directors core competencies: Operations 6 Corporate Finance 8 International Experience 10 Energy Industry Experience 10 Risk / Crisis Management 10 Trading Financial Commodities 7 Government / Regulatory 5 Governance 10

8Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Qualifications for consideration as a director nominee vary according to the particular areas of expertise being sought as a complement to the existing Board composition. However, minimum criteria for selection of members to serve on our Board include the following:

 

highest professional and personal ethical standards and integrity;

 

high level of education and/or business experience;

 

broad-based business acumen;

 

understanding of the Company’s business and industry;

 

sufficient time to effectively carry out their duties;

strategic thinking and willingness to share ideas;

 

loyalty and commitment to driving the success of the Company;

 

network of business and industry contacts; and

 

diversity of experiences, expertise and backgrounds among members of the Board.

Director Search. We have engaged an independent director search firm to help identify prospective director candidates, with the goal of adding one director to our Board in 2019. In addition to the minimum criteria described above, the Governance and Nominating Committee is evaluating the skill sets needed to maximize Board effectiveness and support the strategic direction of the Company. We will look at a diverse pool of candidates, considering each candidate’s business or professional experience, demonstrated leadership ability, integrity and judgment, record of public service, diversity, financial and technological acumen and international experience. We view and define diversity in a broad sense, which includes gender, ethnicity, age, education, experience and leadership qualities.

Practices for Considering Diversity. The minimum criteria for selection of members to serve on our Board are designed to ensure that the Governance and Nominating Committee selects director nominees taking into consideration that the Board will benefit from having directors that represent a diversity of experience and backgrounds. Director nominees are selected so that the Board represents a diversity of experience in areas needed to foster the Company’s business success, including experience in the energy industry, finance, consulting, international affairs, public service, governance and regulatory compliance. Each year the Board and each committee participates in a self-assessment or evaluation of the effectiveness of the Board and its committees. These evaluations assess the diversity of talents, expertise and occupational and personal backgrounds of the Board members.

Shareholder Nominations for Director. A shareholder of the Company whomay nominate a candidate or candidates for election to the Board if such shareholder (1) was a shareholder of record at the time the notice provided for below is delivered to the Corporate Secretary, who(2) is entitled to vote at the meeting of shareholders called for the election of directors and is entitled to vote upon such election or proposed business and who(3) complies with the notice procedures set forth in our Bylaws may nominate candidates for election to the Board.Bylaws. Nominations made by a shareholder must be made by giving timely notice in writing to the Corporate Secretary of the Company at the following address: Corporate Secretary, Cheniere Energy, Inc., 700 Milam Street, Suite 1900, Houston, Texas 77002. To be timely, a shareholder’s notice must be delivered not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the first anniversary of the preceding year’s annual meeting. However, if (and only if) the date of the annual meeting is more than 30 days before or more than 70 days after such anniversary date, notice by the shareholder must be delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting

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DIRECTOR NOMINATIONS AND QUALIFICATIONS

or the 10th day following the day on which public announcement of the date of such meeting is first made by the Company. In no event will the public announcement of an adjournment or postponement of an annual meeting of shareholders commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above. A shareholder’s notice must include information about the shareholder and the nominee, as required by our Bylaws, which are available on our website atwww.cheniere.com.

Director Nominations for Inclusion in Proxy Statement (Proxy Access).A shareholder, or group of up to 20 shareholders, owning at least 3% of the Company’s common stock for at least the prior three consecutive years (and meeting the other requirements set forth in our Bylaws) may nominate for election to our Board and inclusion in our proxy statement for our annual meeting of shareholders up to 20% of the number of directors serving on our Board. In September 2016, the Board amended the Company’s proxy access bylaw to (i) expand the definition of Eligible Holder to specifically allow groups of funds under common management and funded primarily by the same employer to be treated as one Eligible Holder, (ii) clarify the timing required for a shareholder to propose a director nominee and (iii) eliminate the provision that allowed the Company to omit from its Proxy Statement a director nominee who receives a vote of less than 25% of the shares of common stock entitled to vote for such nominee at one of the two preceding annual meetings.

Notice must include all information formally stated in our Bylaws, which is available on our website atwww.cheniere.com. In addition to complying with the other requirements set forth in our Bylaws, an eligible shareholder must provide timely notice in writing to the Corporate Secretary of the Company at the following address: Corporate Secretary, Cheniere Energy, Inc., 700 Milam Street, Suite 1900, Houston, Texas 77002. To be timely for purposes of proxy access, a shareholder’s notice must be delivered not later than the close of business on the 120th day, nor earlier than the close of business on the 150th day, prior to the first anniversary of the date that the Company first mailed its proxy statement to shareholders for the prior year’s annual meeting of shareholders. However, if (and only if) the annual meeting is not scheduled to be held within a period that commences 30 days before such anniversary date and ends 30 days after such anniversary date (an annual meeting date outside such period being referred to herein as an “Other Meeting Date”), notice must be given in the manner provided in our Bylaws by the later of the close of business on the date that is 180 days prior to such Other Meeting Date and the tenth10th day following the date on which public announcement of such Other Meeting Date is first made.

Director Qualifications. The Board has concluded that, in light of our business and structure, each of our director nominees possesses relevant experience, qualifications, attributes and skills and should continue to serve on our Board as of the date of this Proxy Statement. The primary qualifications of our directors are further discussed under Director Biographies“Director Biographies” below.

Director Retirement Policy. The Board has adopted a mandatory director retirement policy that requires each director who has attained the age of 75 to retire from the Board at the annual meeting of shareholders of the Company held in the year in which his

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement9


or her current term expires, unless the Board determines such mandate for a particular director is not at the time in the best interests of the Company. The Board believes this policy will ensure a healthy rotation of directors, which will promote the continued influx of new ideas and perspectives to the Board.

2019 PROXY STATEMENT11


PROPOSAL 1 – ELECTION OF DIRECTORS

Director BiographiesDIRECTOR BIOGRAPHIES

 

 

JACK A . FUSCO

PRESIDENT & CEO

AGE:56

DIRECTOR SINCE:

JUNE 2016

Jack A. Fusco is a director and the President and Chief Executive Officer of Cheniere. Mr. Fusco has served as President and Chief Executive Officer since May 2016 and as a director since June 2016. In addition, Mr. Fusco serves as Chairman, President and Chief Executive Officer of Cheniere Energy Partners GP, LLC, a wholly-owned subsidiary of Cheniere and the general partner of Cheniere Energy Partners, L.P., (”Cheniere Partners”) a publicly-traded limited partnership that is operating the Sabine Pass LNG terminal. Mr. Fusco also servesserved as Chairman, President and Chief Executive Officer of Cheniere Energy Partners LP Holdings LLC, a publicly-traded subsidiary of Cheniere.from June 2016 to September 2018. Mr. Fusco is also a Manager, President and Chief Executive Officer of the general partner of Sabine Pass LNG, L.P. and Chief Executive Officer of Sabine Pass Liquefaction, LLC. Mr. Fusco received recognition as Best CEO in the electric industry by Institutional Investor in 2012 as ranked by all industry analysts and for Best Investor Relations by a CEO or Chairman among allmid-cap companies by IR Magazine in 2013.

Mr. Fusco served as Chief Executive Officer of Calpine Corporation (“Calpine”) from August 2008 to May 2014 and as Executive Chairman of Calpine from May 2014 through May 11, 2016. Mr. Fusco currently servesserved as a director of Calpine and has been a member of the board of directors sinceof Calpine from August 2008.2008 until March 2018, when the sale of Calpine to an affiliate of Energy Capital Partners and a consortium of other investors was completed. Mr. Fusco was recruited by Calpine’s key shareholders in 2008, just as that company was emerging from bankruptcy. Calpine is nowgrew to become America’s largest generator of electricity from natural gas, safely and reliably meeting the needs of an economy that demands cleaner, more fuel-efficient and dependable sources of electricity. As Chief Executive Officer of

Calpine, Mr. Fusco managed a team of approximately 2,300 employees and led one of the largest purchasers of natural gas in America, a successful developer of newgas-fired power generation facilities and a company that has prudently managed the inherent commodity trading and balance sheet risks associated with being a merchant power producer.

Mr. Fusco’s career of over 30 years in the energy industry began with his employment at Pacific Gas & Electric Company upon graduation from California State University, Sacramento with a Bachelor of Science in Mechanical Engineering in 1984. He joined Goldman Sachs 13 years later as a Vice President with responsibility for commodity trading and marketing of wholesale electricity, a role that led to the creation of Orion Power Holdings, an independent power producer that Mr. Fusco helped found with backing from Goldman Sachs, where he served as President and Chief Executive Officer from 1998-2002. In 2004, he was asked to serve as Chairman and Chief Executive Officer of Texas Genco LLC by a group of private institutional investors, and successfully managed the transition of that business from a subsidiary of a regulated utility to a strong and profitable independent company, generating a more than5-fold return for shareholders upon its merger with NRG in 20062006.

Skills and Qualifications:

Mr. Fusco brings his prior experience leading successful energy industry companies and his perspective as President and Chief Executive Officer of Cheniere.

G . ANDREA BOTTA

CHAIRMAN OF THE BOARD AND CHAIRMAN OF GOVERNANCE AND NOMINATING COMMITTEE

AGE:65

DIRECTOR SINCE:

2010

G. Andrea Bottais the Chairman of the Board.Board and Chairman of our Governance and Nominating Committee. Mr. Botta has served as President of Glenco LLC (“Glenco”), a private investment company, since February 2006. Prior to joining Glenco, Mr. Botta served as Managing Director of Morgan Stanley from 1999 to February 2006. Before joining Morgan Stanley, he was President of EXOR America, Inc. (formerlyIFINT-USA, Inc.) from 1993 until September 1999 and for more than five years prior thereto, Vice President of Acquisitions of

IFINT-USA, Inc. He currently servesFrom March 2008 until February 2018, Mr. Botta served on the board of directors of Graphic Packaging Holding Company. Mr. Botta earned a degree in Economics and Business Administration from the University of Torino in 1976.

Skills and Qualifications:

Mr. Botta brings a unique international perspective to our Board and significant financialinvesting expertise. He has over 30 years of investing experience primarily in private equity investing.

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DIRECTOR BIOGRAPHIES

VICKY A . BAILEY

MEMBER OF AUDIT COMMITTEE AND GOVERNANCE AND NOMINATING COMMITTEE

AGE:67

DIRECTOR SINCE:

2006

Vicky A. Bailey is the Chairman of our Governance and Nominating Committee and a member of our Audit Committee and Governance and Nominating Committee. Since November 2005, Ms. Bailey has been President of Anderson Stratton International, LLC, a strategic consulting and government relations company in Washington, D.C. She was a partner with Johnston & Associates, LLC, a public relations firm in Washington, D.C., from March 2004 through October 2006. Prior to joining Johnston & Associates, LLC, Ms. Bailey served as Assistant Secretary for the Office of Policy and International Affairs of the U.S. Department of Energy from 2001 through February 2004. From February 2000 until May 2001, she was President and a director of PSI Energy, Inc., the Indiana electric utility subsidiary of Cinergy Corp. Prior to joining PSI Energy, Ms. Bailey was a Commissioner on the Federal Energy Regulatory Commission beginning in 1993. Ms. Bailey currently serves ason the board of directors of Equitrans Midstream Corporation, a directorpublicly-traded natural gas midstream company, PNM Resources, Inc., an investor-owned energy holding company and Battelle Memorial Institute, a private nonprofit

applied science and technology development company in Columbus, Ohio. Ms. Bailey previously served on the board of directors of EQT Corporation, a publicly-traded petroleum and natural gas exploration and pipeline company, and Battelle Memorial Institute, a private nonprofit applied science and technology development company, in Columbus, Ohio.from July 2004 to November 2018. In January 2010, Ms. Bailey was appointed as a member of the Secretary of Energy’s Blue Ribbon Commission on America’s Nuclear Future. She received a B.S. in industrialIndustrial Management from Purdue University and completed the Advanced Management Program at the Wharton School in 2013.

10Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Skills and Qualifications:

Ms. Bailey has extensive knowledge of the energy industry, including significant experience with the Federal Energy Regulatory Commission, and government and public relations. She brings a diverse perspective to our Board based on her experience as a strategic consultant, a former energy executive and having served as Assistant Secretary for the Office of Policy and International Affairs.

NUNO BRANDOLINI

MEMBER OF COMPENSATION COMMITTEE AND GOVERNANCE AND NOMINATING COMMITTEE

AGE:65

DIRECTOR SINCE:

2000

Nuno Brandolini is the Chairmana member of our Compensation Committee and Governance and Nominating Committee. Mr. Brandolini was a general partner of Scorpion Capital Partners, L.P., a private equity firm organized as a small business investment company, until June 2014. Prior to forming Scorpion Capital and its predecessor firm, Scorpion Holding, Inc., in 1995, Mr. Brandolini served as Managing Director of Rosecliff, Inc., a leveraged buyout fundco-founded by Mr. Brandolini in 1993. Prior to 1993, Mr. Brandolini was a Vice President in the investment banking department of Salomon Brothers, Inc., and a Principal with the Batheus Group and Logic Capital, two venture capital firms. Mr. Brandolini began his career as an

investment banker with Lazard Freres & Co. Mr. Brandolini currently serves as a director of Lilis Energy, Inc., an oil and gas exploration and production company. Mr. Brandolini received a law degree from the University of Paris and an M.B.A. from the Wharton School.

Skills and Qualifications:

Mr. Brandolini brings a unique financial perspective to our Board based on his extensive experience as an investment banker and having actively managed private equity investments for almostapproximately 20 years.

Jonathan Christodorois a member of our Governance and Nominating Committee. Mr. Christodoro served as a Managing Director of Icahn Capital LP, the entity through which Carl C. Icahn manages investment funds, from July 2012 to February 2017. Mr. Christodoro was responsible for identifying, analyzing and monitoring investment opportunities and portfolio companies for Icahn Capital. Prior to joining Icahn Capital, from 2007 to 2012, Mr. Christodoro served in various investment and research roles at P2 Capital Partners, LLC, Prentice Capital Management, LP and S.A.C. Capital Advisors, L.P. Mr. Christodoro began his career as an investment banking analyst at Morgan Stanley, where he focused on merger and acquisition transactions across a variety of industries. Mr. Christodoro currently serves as a director on the boards of: Xerox Corporation, a provider of document management solutions since June 2016; PayPal Holdings, Inc., a technology platform company that enables digital and mobile payments worldwide since July 2015; Lyft, Inc., a mobile ride-sharing application since May 2015; Enzon Pharmaceuticals, Inc. (“Enzon”), a biotechnology company since October 2013 and Herbalife Ltd., a nutrition company since April 2013. Mr. Christodoro has been Chairman of the Board of Enzon since November 2013. Mr. Christodoro was previously a director of: Hologic, Inc., a supplier of diagnostic, medical imaging and surgical products, from December 2013 to March 2016; eBay Inc., a global commerce and payments company, from March 2015 to July 2015; Talisman Energy Inc., an independent oil and gas exploration and production company, from December 2013 to May 2015; and American Railcar Industries, Inc., a railcar manufacturing company, from June 2015 to February 2017. American Railcar Industries is indirectly controlled by Carl C. Icahn. Mr. Icahn has or previously hadnon-controlling interests in each of Xerox, PayPal, eBay, Lyft, Hologic, Talisman, Enzon and Herbalife through the ownership of securities. Mr. Christodoro received an M.B.A. with Distinction from the University of Pennsylvania’s Wharton School of Business, majoring in Finance and Entrepreneurial Management. Mr. Christodoro received a B.S. Magna Cum Laude in Applied Economics and Management with Honors Distinction in Research from Cornell University. Mr. Christodoro also served in the United States Marine Corps.

2019 PROXY STATEMENT13

Skills and Qualifications: Mr. Christodoro brings experience to our Board as a former Managing Director of Icahn Capital LP, a subsidiary of Icahn Enterprises L.P. and as a member of the board of directors of several publicly-traded companies.


PROPOSAL 1 – ELECTION OF DIRECTORS

DAVID I. FOLEY

DIRECTOR

AGE:51

DIRECTOR SINCE:

2012

David I. Foley is a director of the Company. Mr. Foley is a Senior Managing Director in the Private Equity Group of The Blackstone Group L.P., an investment and advisory firm (“Blackstone”), and Chief Executive Officer of Blackstone Energy Partners L.P. Prior to joining Blackstone in 1995, Mr. Foley was an employee of AEA Investors Inc., a private equity investment firm, from 1991 to 1993, and a consultant with The Monitor Company, a business management consulting firm, from 1989 to 1991. Mr. Foley currently serves as a director of Kosmos Energy Ltd. and previously served on the board of directors of PBF Energy, Inc., from 2008 to 2014, Kosmos Energy Ltd., from 2004 to 2018, and Falcon Minerals Corp., from 2011 to 2018. Mr. Foley received a B.A. and an M.A. in Economics from Northwestern University and an M.B.A. from Harvard Business School.

Skills and Qualifications:

Mr. Foley brings industry expertise and a unique financial perspective to our Board based on his extensive experience having actively managed private equity investments for over 20 years. Mr. Foley’s appointment to the Board of Cheniere was made pursuant to an Investors’ and Registration Rights Agreement that was entered into by the Company, Cheniere Energy Partners GP, LLC, (“Cheniere Partners GP”), Blackstone CQP Holdco, LP (“Blackstone Holdco”) and various other related parties in connection with Blackstone Holdco’s purchase of Class B units in Cheniere Energy Partners, L.P. (“Cheniere Partners”). Mr. Foley received a B.A. and an M.A. in Economics from Northwestern University and an M.B.A. from Harvard Business School.Partners.

Skills and Qualifications: Mr. Foley brings a unique financial perspective to our Board based on his extensive experience having actively managed private equity investments for over 20 years.

DAVID B. KILPATRICK

MEMBER OF AUDIT COMMITTEE AND

COMPENSATION COMMITTEE

AGE:69

DIRECTOR SINCE:

2003

David B. Kilpatrick is a member of our Audit Committee and Compensation Committee. Mr. Kilpatrick previously served as our Lead Director from June 2015 to January 2016. Mr. Kilpatrick has over 30 years of executive, management and operating experience in the oil and gas industry. He has been the President of Kilpatrick Energy Group, which invests in oil and gas ventures and provides executive management consulting services, since 1998. Mr. Kilpatrick has served on the board of directors and isas Chairman of the Compensation and Governance Committee of the general partner of Breitburn Energy Partners, L.P., since 2008.

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement11


Since 2011,a publicly traded MLP, from 2008 to 2018. Mr. Kilpatrick has served on the Boardboard of Managersmanagers of Woodbine Holdings, LLC, a privately held company engaged in the acquisition, development and production of oil and natural gas properties in Texas.Texas from 2011 to 2016. In May 2013, he was elected Chairman of the Board of Applied Natural Gas Fuels, Inc., a producer and distributor of liquefied natural gas fuel for the transportation and industrial markets.markets, until the company was sold in 2018. He also served on the board of directors of

PYR Energy Corporation, a publicly-traded oil and gas exploration and production company, from 2001 to 2007, and of Whittier Energy Corporation, a publicly-traded oil and gas field exploration services company, from 2004 to 2007. He was the President and Chief Operating Officer for Monterey Resources, Inc., an independenta publicly traded oil and gas company, from 1996 to 1998 and held various positions with Santa Fe Energy Resources, an independent oil and gas production company, from 1983 to 1996. Mr. Kilpatrick received a B.S. in Petroleum Engineering from the University of Southern California and a B.A. in Geology and Physics from Whittier College.

Skills and Qualifications:

Mr. Kilpatrick has over 30 years of executive, management and operating experience in the oil and gas industry and brings significant executive-level and consulting experience in the oil and gas industry to our Board.

Samuel Merksamer

14CHENIERE


DIRECTOR BIOGRAPHIES

ANDREW LANGHAM

MEMBER OF COMPENSATION COMMITTEE AND GOVERNANCE AND NOMINATING COMMITTEE

AGE:46

DIRECTOR SINCE:

2017

Andrew Langham is a member of our Compensation Committee and Governance and Nominating Committee. Mr. Langham has been General Counsel of Icahn Enterprises L.P. (a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, food packaging, metals, mining, real estate and home fashion) since 2014. From 2005 to 2014, Mr. Langham was Assistant General Counsel of Icahn Enterprises. Prior to joining Icahn Enterprises, Mr. Langham was an associate at Latham & Watkins LLP focusing on corporate finance, mergers and acquisitions, and general corporate matters. Mr. Langham has been a director of: Welbilt, Inc. (formerly Manitowoc Foodservice, Inc.), a commercial food service equipment manufacturer, since 2016; and CVR Partners LP, a nitrogen fertilizer company, since 2015. Mr. Langham was previously a director of CVR Energy, Inc., a diversified holding company primarily engaged in the petroleum refining and nitrogen

fertilizer manufacturing industries, from 2014 to 2017; CVR Refining, LP, an independent downstream energy limited partnership, from 2014 to 2019; Freeport-McMoRan Inc., the world’s largest publicly traded copper producer, from 2015 to 2018; and Newell Brands Inc., a global marketer of consumer and commercial products, in 2018. Mr. Langham received a B.A. from Whitman College and a J.D. from the University of Washington.

Skills and Qualifications:

Mr. Langham brings a unique perspective to our Board based on his significant corporate governance, compliance, regulatory, finance and mergers and acquisitions expertise. Mr. Langham was initially appointed to the Board of Cheniere in accordance with a Nomination and Standstill Agreement that was entered into on August 15, 2015 by the Company, Icahn Capital LP and certain affiliates of Icahn Capital LP.

COURTNEY R. MATHER, CAIA, CFA, FRM

MEMBER OF AUDIT COMMITTEE

AGE:42

DIRECTOR SINCE:

2018

Courtney R. Mather, CAIA, CFA, FRM is a member of our Audit Committee. Mr. MerksamerMather has served as aPortfolio Manager of Icahn Capital, the entity through which Carl C. Icahn manages investment funds, since December 2016, and was previously Managing Director of Icahn Capital LP,from April 2014 to November 2016. Mr. Mather is responsible for identifying, analyzing, and monitoring investment opportunities and portfolio companies for Icahn Capital. Prior to joining Icahn Capital, Mr. Mather was at Goldman Sachs & Co. from 1998 to 2012, most recently as Managing Director responsible for Private Distressed Trading and Investing, where he focused on identifying and analyzing investment opportunities for both Goldman Sachs and clients. Mr. Mather has served as a director of: Caesars Entertainment Corporation, a global casino-entertainment and hospitality services provider, since March 2019; Newell Brands Inc., a manufacturer and distributor of a broad range of consumer products, since March 2018; Conduent Inc., a provider of business process outsourcing services, since December 2016; Herc Holdings Inc., an international provider of equipment rental and services, since June 2016; TER Holdings I, Inc. (formerly known as Trump Entertainment Resorts, Inc.), a company engaged in real estate holdings, since February 2016; and Ferrous Resources Limited, an iron ore mining company with operations in Brazil, since June 2015. Mr. Mather was previously a director of: Freeport-McMoRan Inc., the world’s largest publicly traded copper producer, from October 2015 to March 2019; Federal-Mogul Holdings Corporation, a supplier of automotive powertrain and safety components, from May 20082015 to DecemberJanuary 2017; Viskase Companies Inc., a meat casing company, from

June 2015 to March 2016; American Railcar Industries, Inc., a railcar manufacturing company, from July 2014 to March 2016; CVR Refining, LP, an independent downstream energy limited partnership, from May 2014 to March 2016; and CVR Energy, Inc., a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries, from May 2014 to March 2016. He currently servesTER Holdings, Ferrous Resources Limited, Federal-Mogul, American Railcar Industries, CVR Refining, CVR Energy, and Viskase are each indirectly controlled by Carl C. Icahn. Mr. Icahn also has anon-controlling interest in each of Caesars Entertainment, Cheniere, Newell Brands, Conduent, Herc Holdings, and Freeport-McMoRan through the ownership of securities. Mr. Mather received a B.A. from Rutgers College, and attended the United States Naval Academy. Mr. Mather holds the Chartered Alternative Investment Analyst (CAIA), Chartered Financial Analyst (CFA), and Certified Financial Risk Manager (FRM) professional designations.

Skills and Qualifications:

Mr. Mather brings significant experience in finance to our Board and experience providing strategic advice and guidance to companies through his service as a director on the boards of Hertz Global Holdings, Inc., avarious public company engagedboards. Mr. Mather was initially appointed to the Board of Cheniere in accordance with a Nomination and Standstill Agreement that was entered into on August 15, 2015 by the car rental business; Transocean Ltd., a public provider of offshore contract drilling services for oilCompany, Icahn Capital LP and gas wells, American International Group, Inc., a publicly-traded insurance and financial services company and Navistar International Corporation, a publicly-traded manufacturer of commercial trucks, buses, defense vehicles and engines. Mr. Merksamer was previously a director of Transocean Partners LLC from 2014 to 2016 and a director of Hologic, Inc., a publicly-traded medical products company from 2013 to 2016. Mr. Merksamer received an A.B. in Economics in 2002 from Cornell University.

Skills and Qualifications: Mr. Merksamer brings experience to our Board as a former Managing Directorcertain affiliates of Icahn Capital LP, a subsidiary of Icahn Enterprises L.P. and as a member of the board of directors of several publicly-traded companies.LP.

2019 PROXY STATEMENT15


PROPOSAL 1 – ELECTION OF DIRECTORS

DONALD F. ROBILLARD, JR.

CHAIRMAN OF AUDIT COMMITTEE

AGE:67

DIRECTOR SINCE:

2014

Donald F. Robillard, Jr. is the Chairman of our Audit Committee. Mr. Robillard currently servesserved as a director and the Executive Vice President, Chief ExecutiveFinancial Officer and Chairman of ES Xplore, LLC, a direct hydrocarbon indicator technology company which in 2016, spun outChief Risk Officer of Hunt Consolidated, Inc. (“Hunt”), a private holding company with interests in oil and gas exploration and production, refining, real estate development, private equity investments and ranching. Mr. Robillard served as a director and the Executive Vice President, Chief Financial Officer and Chief Risk Officer of Huntranching, from July 2015 until his retirement on January 31, 2017. Mr. Robillard began his association with Hunt in 1983 as Manager of International Accounting for Hunt Oil Company, Inc., a wholly-owned subsidiary of Hunt. Serving nine of his 34 years of service to the Hunt organization in Yemen in various accounting, finance and management positions, Mr. Robillard returned to the United States to join Hunt’s executive team in 1992. Mr. Robillard was named Senior Vice President and Chief Financial Officer of Hunt in April 2007. Mr. Robillard also served, from February 2016 through August of 2017, as Chief Executive Officer and Chairman of ES Xplore, LLC, a direct hydrocarbon indicator technology company which in 2016 was spun out of

Hunt. He is currently President of Robillard Consulting, LLC, an oil and gas advisory firm. Mr. Robillard is currently on the board of directors of Helmerich & Payne, Inc., a publicly-traded oil and gas drilling company, and the Board of Directors of Avalon Exploration and Production, LLC, a private oil and gas company. He is a Certified Public Accountant, and a member of the American Institute of Certified Public Accountants, the Texas Society of Certified Public Accountants Financial Executives International and the National Association of Corporate Directors. Mr. Robillard received a B.B.A. from the University of Texas, Austin.

Skills and Qualifications:

Mr. Robillard has over 40 years of experience in the oil and gas industry and over 25 years of senior management experience. Mr. Robillard brings significant executive-level experience in the oil and gas industry, including experience with project financing for LNG facilities.

NEAL A. SHEAR

CHAIRMAN OF COMPENSATION COMMITTEE

AGE:64

DIRECTOR SINCE:

2014

Neal A. Shear is a memberthe Chairman of our Governance and NominatingCompensation Committee. Mr. Shear is a partnerSenior Advisor and Chair of Silverpeak Partners LP, a private investment company.the Advisory Committee of Onyxpoint Global Management LP. Mr. Shear served as Interim Special Advisor to the Chief Executive Officer of Cheniere from May 2016 to November 2016 and as Interim Chief Executive Officer and President of Cheniere from December 2015 to May 2016. Mr. Shear was the Chief Executive Officer of Higgs Capital Management, a commodity focused hedge fund until September 2014. Prior to Higgs Capital Management, Mr. Shear served as Global Head of Securities at UBS Investment Bank from January 2010 to March of 2011. Previously, Mr. Shear was a Partner at Apollo Global Management, LLC, where he served as the Head of the Commodities Division. Prior to Apollo Global Management, Mr. Shear spent 26 years at Morgan Stanley serving in various roles including Head of the Commodities Division, Global Head of Fixed Income,Co-Head of Institutional Sales and Trading and Chair of the Commodities Business. He currently serves on the Advisory Board of Green Key Technologies, a financial Voice

over Internet Protocol (“VoIP”) technology company. Mr. Shear also serves as a director of Galileo Technologies S.A., a global provider of modular technologies for compressed natural gas and LNG production and transportation, since February 2017; Sable Permian Resources LLC, an independent oil and natural gas company focused on the acquisition, development and production of unconventional oil and natural gas reserves within the Permian Basin of West Texas, since May 2017; and Narl Refining Inc., the refining arm of North Atlantic Holdings St John’s Newfoundland, since November 2014. Mr. Shear received a B.S. from the University of Maryland, Robert H. Smith School of Business Management in 1976 and an M.B.A. from Cornell University, Johnson School of Business in 1978.

Skills and Qualifications:

Mr. Shear brings a unique financial and trading perspective to our Board based on his more than 30 years of experience managing commodity activity and investments.

 

12Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Heather R. Zichal is a member of our Governance and Nominating Committee and Compensation Committee. Ms. Zichal is currently an independent energy consultant. Ms. Zichal previously served as the Deputy Assistant to the President for Energy and Climate Change from January 2009 to November 2013. Prior to serving as Deputy Assistant to the President for Energy and Climate Change, Ms. Zichal served as the Energy and Environmental Policy Director to the 2008 Obama presidential campaign. She previously served as the Legislative Director to Senator John Kerry after managing energy and environmental issues in his 2004 presidential campaign. Prior to this, Ms. Zichal served as Legislative Director for Reps. Frank Pallone(D-NJ) and Rush Holt(D-NJ). Ms. Zichal received a B.S. in Environmental Policy and Science from Rutgers University.

Skills and Qualifications: Ms. Zichal has extensive knowledge of the domestic and global energy markets as well as the U.S. regulatory environment. She brings a diverse perspective about the energy industry to our Board, having served in significant government positions during her career.

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement 13
16CHENIERE


GOVERNANCE INFORMATION

Board Committee Membership

BOARD COMMITTEE MEMBERSHIP AND ATTENDANCE

 

The following table shows the fiscal year 20162018 membership and chairpersons of our Board committees, committee meetings held and committee member attendance as a percentage of meetings eligible to attend. The current Chair of each Board committee is indicated in the table.

 

 

Number

of

meetings

held

 Botta Fusco Bailey Brandolini Christodoro Foley Kilpatrick Merksamer Robillard Shear Zichal 

NUMBER

OF

MEETINGS

HELD

 BOTTA FUSCO BAILEY BRANDOLINI FOLEY KILPATRICK LANGHAM(1) LIPINSKI(1) MATHER(1) ROBILLARD SHEAR ZICHAL(3)

Audit

 8 100%  100%     100% 100%

Chair

   9   89%   89%  100% 100% 100%

Chair

  

Governance and

Nominating

 5   100%

Chair

  100%  80%    100% 5 100%(2)

Chair

  100% 80%    100%     100%

Compensation

 9    100%

Chair

   100% 89%   100% 6    83%  100% 100% 100%    100%

Chair

 100%

(1)

In May 2018, Mr. Mather replaced Mr. Lipinski on the Board.

(2)

In August 2018, Mr. Botta was appointed Chair of the Governance and Nominating Committee.

(3)

In July 2018, Ms. Zichal resigned from the Board.

Director Independence

DIRECTOR INDEPENDENCE

 

The Board determines the independence of each director and nominee for election as a director in accordance with the rules and regulations of the SEC and the NYSE MKTAmerican LLC (“NYSE American”) independence standards, which are listed below. The Board also considers relationships that a director may have:

 

as a partner, shareholder or officer of organizations that do business with or provide services to Cheniere;

 

as an executive officer of charitable organizations to which we have made or make contributions; and

 

that may interfere with the exercise of a director’s independent judgment.

The NYSE MKT LLCAmerican independence standards state that the following list of persons will not be considered independent:

 

a director who is, or during the past three years was, employed by the Company or by any parent or subsidiary of the Company;Company other than prior employment as an interim executive officer for less than one year;

 

a director who accepts, or has an immediate family member who accepts, any compensation from the Company or any parent or subsidiary of the Company in excess of $120,000 during any period of 12 consecutive months within the past three years, other than compensation for Board or committee services, compensation paid to an immediate family member who is anon-executive employee of the Company, compensation received for former service as an interim executive officer provided the interim service did not last longer than one year, benefits under atax-qualified retirement plan ornon-discretionary compensation;

 

a director who is an immediate family member of an individual who is, or has been in any of the past three years, employed by the Company or any parent or subsidiary of the Company as an executive officer;

 

a director who is, or has an immediate family member who is a partner in, or a controlling shareholder or an executive officer of, any organization to which the Company made, or from which the Company received, payments (other than those arising solely from investments in the Company’s securities or payments undernon-discretionary charitable contribution matching programs) that exceed 5% of the organization’s consolidated gross revenues for that year, or $200,000, whichever is more, in any of the most recent three fiscal years;

 

2019 PROXY STATEMENT17


GOVERNANCE INFORMATION

a director who is, or has an immediate family member who is, employed as an executive officer of another entity where at any time during the most recent three fiscal years any of the Company’s executive officers serve on the compensation committee of such other entity; or

 

a director who is, or has an immediate family member who is, a current partner of the Company’s outside auditor, or was a partner or employee of the Company’s outside auditor who worked on the Company’s audit at any time during any of the past three years.

As of February 2017,2019, the Board determined that Messrs. Botta, Brandolini, Christodoro, Kilpatrick, Merksamer,Langham, Mather, Robillard and Shear and Mses.Ms. Bailey and Zichal are independent, and none of them has a relationship that may interfere with the exercise of his or her independent judgment.

14Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Board Leadership Structure and Role in Risk Oversight

BOARD LEADERSHIP STRUCTURE AND ROLE IN RISK OVERSIGHT

 

Board Leadership Structure. Mr. Botta serves as theNon-Executive Chairman of the Board. Mr. Fusco serves as President and CEO.

The Company has in place strong governance mechanisms to ensure the continued accountability of the CEO to the Board and to provide strong independent leadership, including the following:

 

theNon-Executive Chairman of the Board provides independent leadership to the Board and ensures that the Board operates independently of management and that directors have an independent leadership contact;

 

each of the Board’s standing committees, includingconsisting of the Audit, Compensation and Governance and Nominating Committees, are comprised of and chaired solely bynon-employee directors who meet the independence requirements under the NYSE MKT LLCAmerican listing standards and the SEC;

 

the independent directors of the Board, along with the Compensation Committee, evaluate the CEO’s performance and determine his compensation;

 

the independent directors of the Board meet in executive sessions without management present and have the opportunity to discuss the effectiveness of the Company’s management, including the CEO, the quality of the Board meetings and any other issues and concerns; and

 

the Governance and Nominating Committee has oversight of succession planning, both planned and emergency, and the Board has approved an emergency CEO succession process.

The Board believes that its leadership structure assists the Board’s role in risk oversight. See the discussion on the Board’s“Board’s Role in Risk OversightOversight” below.

Non-Executive Chairman of the Board. TheNon-Executive Chairman of the Board position is held by Mr. Botta, an independent director. The Board has appointed thean independent Chairman of the Board to provide independent leadership to the Board. TheNon-Executive Chairman of the Board role allows the Board to operate independently of management with theNon-Executive Chairman of the Board providing an independent leadership contact to the other directors. The responsibilities of theNon-Executive Chairman of the Board are set out in aNon-Executive Chairman of the Board Charter (adopted by the Board in March 2016).Charter. These responsibilities include the following:

 

preside at all meetings of the Board, including executive sessions of the independent directors;

 

call meetings of the Board and meetings of the independent directors, as may be determined in the discretion of theNon-Executive Chairman of the Board;

 

work with the CEO and the Corporate Secretary regardingto prepare the schedule of Board meetings to assure that the directors have sufficient time to discuss all agenda items;

 

prepare the Board agendas in coordination with the CEO and the Corporate Secretary;

 

advise the CEO of any matters that theNon-Executive Chairman of the Board determines should be included in any Board meeting agenda;

 

advise the CEO as to the quality, quantity, appropriateness and timeliness of the flow of information from the Company’s management to the Board;

 

18CHENIERE


SHAREHOLDER OUTREACH–GOVERNANCE

recommend to the Board the retention of consultants who report directly to the Board;

 

act as principal liaison between the directors and the CEO on all issues, including, but not limited to, related party transactions;

 

in the discretion of theNon-Executive Chairman of the Board, participate in meetings of the committees of the Board;

 

in the absence of the CEO or as requested by the Board, act as the spokesperson for the Company; and

 

be available, if requested, for consultation and direct communication with major shareholders of the Company.

Boards Role in Risk Oversight. Risks that could affect the Company are an integral part of Board and committee deliberations throughout the year. The Board has oversight responsibility for assessing the primary risks (including liquidity, credit, operations and regulatory compliance) facing the Company, the relative magnitude of these risks and management’s plan for mitigating these risks. In addition to the Board’s oversight responsibility, the committees of the Board consider the risks within their areas of responsibility. The Board and its committees receive regular reports directly from members of management who are responsible for oversight ofmanaging particular risks within the Company. The Audit Committee discusses with management the Company’s major financial and risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies. For a discussion of the Compensation Committee’s risk oversight, please see “Review of Compensation Risk” on page 1926 of this Proxy Statement. The Board and its committees regularly discuss the risks related to the Company’s business strategy at their meetings.

SHAREHOLDER OUTREACH–GOVERNANCE

The Company proactively engages with shareholders on governance topics as a matter of strategic priority, and the continuous evolution of our governance framework is a product of the Board’s responsiveness to shareholder input.

Ahead of our 2018 Annual Meeting of Shareholders (the “2018 Annual Meeting”), members of our Board and management reached out to, and had extensive dialogue with, shareholders representing more than 50% of our outstanding common stock, through bothin-person and telephonic meetings.

Following our 2018 Annual Meeting, we engaged with shareholders holding more than 50% of our outstanding common stock, as well as proxy advisory firms, and we intend to continue our proactive shareholder outreach efforts going forward and to consider any shareholder concerns that are raised with respect to our governance framework.

The Board believes that its current system of corporate governance oversight enables the directors to be prudent stewards of shareholder capital and the long-term interests of the Company and our shareholders. In addition, the Board is responsive to evolution in the general corporate governance environment.

Key Themes from Our Shareholder Outreach

Many of our shareholders have different methodologies and processes for evaluating governance programs. However, a number of common themes emerged during our engagements with shareholders, which included:

Additional disclosure regarding the Company’s prioritization and efforts regarding Environmental, Social, and Governance (“ESG”) issues. An increasing number of our shareholders have expressed a desire for improved disclosure regarding the Company’s efforts to addressESG-related issues and opportunities. AddressingESG-related issues and opportunities is a focus of the Company’s executive management, with oversight from the Governance and Nominating Committee of the Board, and we have made significant progress with respect to addressing these issues. We have included added disclosure regarding ESG and the Company’s progress below in “—Corporate Social Responsibility and Political Advocacy and Oversight.” We will continue to address these important issues and evolve our related disclosure in the future.

Continued monitoring and implementation of best governance practices. Several of our shareholders have expressed a desire that our Board continue to monitor changes in the general corporate governance environment and consider any appropriate changes to our governance practices. Our Board is responsive to changes in the general corporate governance environment and strives to implement best governance practices in a timely manner.

Please see pages 38-39 of this Proxy Statement for a discussion regarding actions taken by our Board with respect to compensation matters as a result of shareholder outreach.

 

2019 PROXY STATEMENT19


GOVERNANCE INFORMATION

CORPORATE SOCIAL RESPONSIBILITY AND POLITICAL ADVOCACY AND OVERSIGHT

Climate and Sustainability

Climate Change Strategy

There is a growing need to manage climate risks globally and transition away from coal and oil to cleaner, less carbon intensive energy sources such as natural gas. Cheniere helps address this need.

Our focus on clean energy sources is so central to our operations that it comprises our vision statement: “We provide clean, secure, and affordable energy to the world”. The International Energy Agency concludes that even under a 2 degree carbon-constrained scenario, that natural gas may provide a quarter of the global energy demand by 2040 and that LNG facilities will remain critical to meet this future demand1.

To help us realize our vision and our opportunity to help address climate change, Cheniere has adopted a set of climate and sustainability principles which have been reviewed by the Board (https://www.cheniere.com/corporate-responsibility/climate-sustainability/) as part of its oversight of our sustainability program:

��1.

Science: Cheniere Energy, Inc.Notice of Annual Meeting of Shareholderswill promote and 2017 Proxy Statementfollow peer-reviewed science to assess our impacts, anchor our engagements, and determine our actions

2.

Operational Excellence: Cheniere will design and operate our facilities to reduce environmental impacts

3.

Supply Chain: Cheniere will work with our partners to reduce environmental impacts throughout our supply chain

4.

Transparency: We will communicate openly and proactively with our stakeholders

Sustainability Governance

The Governance and Nominating Committee of the Board provides oversight of climate and sustainability policies and strategies.

Cheniere’s sustainability initiatives are managed by the Policy, Government, and Public Affairs organization, led by the Senior Vice President, Policy, Government and Public Affairs (a member of Cheniere’s senior management team, reporting to our Chief Executive Officer). Cheniere’s dedicated climate and sustainability team is responsible for advising the executive leadership and the Board on climate and sustainability programs and for their implementation. An enterprise-level steering committee and working group supports the development of the Corporate Social Responsibility (“CSR”) report, and we plan to issue our inaugural CSR report in late 2019 or early 2020.

Sustainability Engagement

Cheniere engages on ESG issues including climate science and policy in the US and internationally:

In June 2018, we announced the formation of the Collaboratory to Advance Methane Science to improve the scientific understanding of methane emissions across the entire natural gas value chain

Cheniere staff have published and/or submitted peer-reviewed papers on climate- related science

Cheniere staff presented the consensus study report by the National Academy of Sciences’ Committee on Anthropogenic Methane Emissions in the United States at the World Gas Conference in Washington D.C. in June 2018.

Cheniere employees engage on climate and sustainability matters on the Sustainability Accounting Standards Board’s Standards Advisory Group, Center for Climate & Energy Solutions, and International Petroleum Industry Environmental Conservation Association

Key engagements carried out during the past year with local communities include:

 15

community open houses

a community advisory panel

tribal outreach

public presentations and events

public safety briefings and workshops

1

World Energy Outlook 2018 and 2017

20CHENIERE


Corporate Social Responsibility and Political ContributionsCORPORATE SOCIAL RESPONSIBILITY AND POLITICAL ADVOCACY AND OVERSIGHT

 

 

Cheniere has initiated engagements with our natural gas partners to better understand the GHG emissions of Cheniere’s supply chain lifecycle

Cheniere has engaged with several environmental, social and governance rating agencies and external stakeholders regarding sustainability issues

Health and Safety

Cheniere is committed to conducting its business in a way that protects the safety and well-being of our workforce, customers, and otherson-site or who may be affected by our operations.

Cheniere facilitates this commitment through the Health and Safety Policy that is aligned with the Company’s vision, mission, and core values. This policy is an integral part of the Company’s culture which promotes:

A Generative Safety Culture where no job is so important that it cannot be done safely

Performance measurement to drive continual improvement towards eliminating injuries andill-health

Proactive identification and management of risk

Compliance with applicable legal and regulatory requirements

Conformance with industry standards

Proactive committed leadership and individual accountability for health and safety

Employee engagement

Training and competence in safe work practices and procedures

Assurance assessments and reviews

Investigation of health and safety incidents and the Environmentimplementation of lessons learned

Integration of health and safety into all aspects of the business

Cheniere’s commitment to a robust Safety Culture and Committed Leadership is supported through the following key programs:

At Cheniere, sustainability

An Executive Safety Committee that sets the strategic health and social responsibility are core requirementssafety direction for the successCheniere. It is chaired by a member of our business.senior leadership with attendance of other senior leaders, including the Chief Executive Officer. Representatives from our assets and office locations serve on the Committee.

Asset location and Office Safety Committees that are chaired by and include Company employees. These Committees seek to deliver on safety practices and promote safety culture through locally established programs.

Cheniere utilizes a risk-based approach that establishes the processes through which health and safety excellence is delivered, and it defines the standards and procedures to enable delivery of critical processes, in a consistent approach.

To ensure that our employees can effectively implement safety processes relevant to their roles at Cheniere, we maintain a robust training program. It is Cheniere’s policyensures compliance with all safety regulatory requirements while establishing the competency and training needs to protectdeliver on the health and safety of our employees, contractors, visitors,processes.

Governance and host community residents as well as prevent impactsassurance programs are also in place which define the safety performance metrics and verification processes that are used to assess the environment in all aspectseffectiveness of executing our business strategy. Our commitment to promote the health and safety programs. In addition, these programs enable a proactive approach to safety through the collation and analysis of contractorsthe safety performance metrics and employees,determination of health and safety trends. An assurance process verifies that implemented programs are value-added, effective and meeting or exceeding the health and safety requirements.

Cheniere has established processes to preserve the environment,share lessons learned and promote continuous improvement in systems and processes in meeting our commitment to our core value of safety.

The Health and Safety Policy is reviewed annually to ensure relevance, sustainability, and to contributeadopt any changes to the long-term strength offurther enhance our commitments.

2019 PROXY STATEMENT21


GOVERNANCE INFORMATION

Community Investments

We are committed to being a responsible corporate leader in the communities where we do business (otherwise known as our License to Operate),operate and our commitmentemployees live. We deliver on this promise by engaging in philanthropic activities that support Cheniere’s values, fostering strong community relationships and enhancing employee satisfaction and engagement, and we strategically prioritize our investments by aligning with our business and community needs.

We offer several programs through which we can impact our communities, such as volunteer efforts, financial contributions andin-kind donations. We established the Cheniere Cares Foundation in late 2017, which is anon-profit dedicated to sustainable operationsgiving back to the communities in which we live and development will ensure strong economic valuework. In 2018, we implemented several other enhancements, including a formal Volunteer Hours Policy, an Employee Matching Gifts Program and a Global Day of Giving for all stakeholders. Cheniere’s management accomplishes this objectiveemployees. On our inaugural Global Day of Giving, we teamed up world-wide to volunteer at local food facilities. For the Houston Food Bank, we sponsored a mobile food pantry and provided healthy groceries to 368 families in need; prepared 5,998 meals for an after school program through Keegan’s Kitchen, and packed 10,800 meals through the Backpack Buddy Bags program. Our Sabine Pass team supported The Giving Field by providingtending gardens and planting vegetables to be used to produce healthy meals, preparing and serving meals at Abraham’s Tent for over 200 underserved individuals, and delivering 100 meals to the elderly. In Corpus Christi, we assisted the Coastal Bend Food Bank by sorting and boxing almost 16,000 pounds of food for those in need. Our London office packed food and delivered parcels to 12 locations in the area through Fareshare.

2018 Community Investments Updates and Highlights

In 2018, we invested approximately $2.4 million in support of localnon-profit organizations. For us, education is key to stronger communities. In 2018, we presented a clear strategic plan that integrates occupational health$250,000 donation to both Sowela Technical Community College and safety, process safety, integrity management, and environmental stewardship into all business decisions and operations. Below are some examplesDel Mar Community College in support of the stepsCheniere Apprenticeship program, and a $180,000 donation to the Barbara Bush Houston Literacy Foundation towards its My Home Library Program. Cheniere’s $100,000 contribution to the National Guard Youth ChalleNGe Post Graduate Program provided scholarships forat-risk youth to continue their education in college, vocational programs, or technical schools. Additionally, many of our local communities continue to struggle in the aftermath of Hurricane Harvey. To help with rebuilding efforts, Cheniere donated $250,000 to Coastal Bend Disaster Recovery Group to repair and reconstruct homes in South Texas for individuals who have yet to fully recover. Cheniere also participates in several other initiatives, including volunteer efforts, in kind donations and donation collection drives for military, education and underserved youth.

In 2018, we have taken towards upholding these values:received recognition from the BP MS150, a two-day fundraising cycling ride organized by the National MS Society and which is the largest event of its kind in North America, for being a top 10 fundraising team, and also received the Chairman’s Circle Award for cumulatively raising over $500,000 in recent years. We were recognized as a member of the Pink Power League for the Susan G. Komen Foundation and received the Eagle Ford Excellence Award for Community and Social Investment.

 

Operationalizing our core values: Teamwork, Respect, Accountability, Integrity, Nimble

Invested over$2.4M

Provided nearly3,000 volunteer hours

Received Chairman’s Award from the BP MS150 for cumulatively raising over$500,000

Donation drives for themilitary, education, and Safetyunderserved youth

Upholding our Corporate Health, Safety and Environmental (“HSE”) Policy

Promoting a strong HSE culture through every level of the organization

Setting HSE performance objectives and commitments

Complying with all applicable HSE standards and procedures

Committing to eight life-critical safety rules that aim to reduce risks and maintain a safe work environment, (otherwise known as the Cheniere Life Saving Rules)

Continually training and educating our employees and contractors on their responsibility to identify work that is unsafe or environmentally unsound and to help mitigate potential negative impacts

Political ContributionsAdvocacy and Oversight

It is Cheniere’s policy that Company funds or assets will not be used to make a political contribution to any political party or candidate, unless approval has been given by a compliance officer. The Cheniere Energy, Inc. Political Action Committee (“Cheniere(the “Cheniere PAC”) is a forum for employees to voluntarily contribute to a fund that supports the election of candidates to Congress thatwho support the principles of free enterprise, good government, a fair and reasonable business environment for the energy industry and thatwho share the Company’s philosophy that energy diversity advances overall energy security. Decisions about contributions to specific federal candidates are made by members of the Cheniere PAC, with input from the Company’s government affairs staff in Washington, D.C.

In total, Cheniere and Cheniere employees, through the Cheniere PAC and direct corporate funds, contributed less than $1 million in 20162018 to political parties and candidates.

Meetings and Committees of the Board

22CHENIERE


MEETINGS AND COMMITTEES OF THE BOARD

 

MEETINGS AND COMMITTEES OF THE BOARD

 

Our operations are managed under the broad supervision and direction of the Board, which has the ultimate responsibility for the establishment and implementationoversight of the Company’s general operating philosophy, objectives, goals and policies. Pursuant to authority delegated authority,by the Board, certain Board functions are discharged by the Board’s standing Audit, Governance and Nominating and Compensation Committees. Members of the Audit, Governance and Nominating and Compensation Committees for a given year are selected by the Board following the annual shareholders’ meeting. During the fiscal year ended December 31, 2016,2018, our Board held 1710 meetings. Each incumbent member of the Board attended or participated in at least 75% of the aggregate number of: (i) Board meetings; and (ii) committee meetings held by each committee of the Board on which the director served during the period for which each director served. Although directors are not required to attend annual shareholders’ meetings, they are encouraged to attend such meetings. At the 20162018 Annual Meeting of Shareholders, 1011 of the 1011 members of the Board then serving were present.

16Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Committee Membership as of April 17, 2017:15, 2019:

 

Audit Committee
AUDIT COMMITTEE Governance and Nominating
Committee
GOVERNANCE AND NOMINATINGCOMMITTEE
  Compensation CommitteeCOMPENSATION COMMITTEE

Donald F. Robillard, Jr.*

G. Andrea Botta*Neal A. Shear*
Vicky A. Bailey Vicky A. Bailey*Bailey  Nuno Brandolini*Brandolini

Vicky A. Bailey

David B. Kilpatrick Jonathan ChristodoroNuno Brandolini  David B. Kilpatrick

David B. Kilpatrick

Courtney R. Mather Neal A. ShearAndrew Langham  Samuel Merksamer

Samuel Merksamer

Heather R. ZichalHeather R. ZichalAndrew Langham

*

Chair of Committee

Audit Committee

AUDIT COMMITTEE

 

Each member of the Audit Committee has been determined by the Board to be “independent” as defined by the NYSE MKT LLCAmerican listing standards and by the SEC, and as of April 17, 2017, the Board has determined that each of Messrs. MerksamerRobillard and Robillard are eachMather is an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of RegulationS-K promulgated by the SEC. The Audit Committee held 89 meetings during the fiscal year ended December 31, 2016.2018.

The Audit Committee has a written charter, which is available on our website atwww.cheniere.com. The Audit Committee is appointed by the Board to oversee the accounting and financial reporting processes of the Company and the audits of the Company’s financial statements. The Audit Committee assists the Board in overseeing:

 

the integrity of the Company’s financial statements;

 

the qualifications, independence and performance of our independent auditor;

 

our internal audit function and systems of internal controls over financial reporting and disclosure controls and procedures; and

 

compliance by the Company with legal and regulatory requirements.

The Audit Committee maintains a channel of communication among the independent auditor, principal financial and accounting officers, director-internalVP-internal audit, compliance officer and the Board concerning our financial and compliance position and affairs. The Audit Committee has and may exercise all powers and authority of the Board in connection with carrying out its functions and responsibilities and has sole authority to select and retain the independent auditor and authority to engage and determine funding for independent legal, accounting or other advisers. The Audit Committee’s responsibility is oversight, and it recognizes that the Company’s management is responsible for preparing the Company’s financial statements and complying with applicable laws and regulations.

Governance and Nominating Committee

2019 PROXY STATEMENT23


GOVERNANCE INFORMATION

 

GOVERNANCE AND NOMINATING COMMITTEE

 

Each member of the Governance and Nominating Committee has been determined by the Board to be “independent” as defined by the NYSE MKT LLCAmerican listing standards and by the SEC. The Governance and Nominating Committee held 5 meetings during the fiscal year ended December 31, 2016.2018.

The Governance and Nominating Committee has a written charter, which is available on our website atwww.cheniere.com. The Governance and Nominating Committee is appointed by the Board to develop and maintain the Company’s corporate governance policies. The Governance and Nominating Committee also oversees our Director Nomination Policy and Procedures. The Governance and Nominating Committee has the following duties and responsibilities, among others:

 

develop a process, subject to approval by the Board, for an annual evaluation of the Board and its committees and oversee this evaluation;

 

identify, recruit and evaluate individuals qualified to serve on the Board in accordance with the Company’s Director Nomination Policy and Procedures and recommend to the Board such director nominees to be considered for election at the Company’s annual meeting of shareholders or to be appointed by the Board to fill an existing or newly created vacancy on the Board;

 

identify, at least annually, members of the Board to serve on each Board committee and as chairman of each Board committee and recommend each such member and chairman to the Board for approval;

 

assist the Board in evaluating and determining director independence under applicable laws, rules and regulations, including the rules and regulations of the NYSE MKT LLC;American;

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement17


develop and maintain policies and procedures with respect to the evaluation of the performance of the CEO;

 

review periodically the size of the Board and the structure, composition and responsibilities of the committees of the Board to enhance continued effectiveness;

 

review, at least annually, director compensation for service on the Board and Board committees, including committee chairmen compensation, and recommend any changes to the Board;

 

review, at least annually, the Company’s policies and practices relating to corporate governance and, when necessary or appropriate, recommend any proposed changes to the Board for approval;

 

provide oversight of a process by each committee of the Board to review, at least annually, the applicable charter of such committee and, when necessary or appropriate, recommend changes in such charters to the Board for approval; and

 

along with the independent directors of the Board, develop and maintain policies and principles with respect to the search for and evaluation of potential successors to the CEO, and maintain a succession plan in accordance with such policies.policies;

develop and oversee a continuing education program for directors;

review with management the current and emerging environmental, sustainability and social responsibility issues impacting the Company; and

review, at least annually, the Company’s climate change and sustainability policies and strategies.

Compensation Committee

COMPENSATION COMMITTEE

 

Each member of the Compensation Committee has been determined by the Board to be “independent” as defined by the NYSE MKT LLCAmerican listing standards and by the SEC. The Compensation Committee held 96 meetings during the fiscal year ended December 31, 2016.2018. The Compensation Committee reviews and approves the compensation policies, practices and plans of the Company pursuant to a written charter, which is available on our website atwww.cheniere.com. The Chairman of the Compensation Committee, in consultation with other Compensation Committee members, members of management and the independent compensation consultant, determines the agenda and dates of Compensation Committee meetings.

The Compensation Committee’s charter is reviewed annually. Changes to the charter must be approved by the Board on the recommendation of the Compensation Committee. The charter provides that the Compensation Committee has the sole authority

24CHENIERE


GOVERNANCE AND NOMINATING COMMITTEE

to retain, oversee and terminate any compensation consultant, independent legal counsel or other adviser engaged to assist in the evaluation of compensation of directors and executive officers of the Company, including the sole authority to approve such adviser’s fees and other retention terms. Pursuant to the charter, the Compensation Committee has the following duties and responsibilities, among others:

 

review and approve corporate goals and objectives, after consultation with the Board and management and consistent with stockholder-approved compensation plans, for performance-based compensation for the CEO and other executive officers;officers for the defined performance period;

 

review and recommend to the Board for approval the maximum amount of performance-based compensation for the CEO and other executive officers for athe defined performance period;

 

review and certify, in writing, whether established goals and objectives of any performance-based compensation plans for the CEO and other executive officers have been met for the completed performance period;

review and recommend to the Board for approval performance-based compensation, if any, for the CEO and other executive officers based on the established corporate goals and objectives for the completed performance period;

 

review and recommend to the Board for approval the compensation level for the CEO and other executive officers based on the Compensation Committee’s evaluations;

 

report to the Board on the performance of the CEO and other executive officers in light of the established corporate goals and objectives for the performance period;

assess the ongoing competitiveness of the total executive compensation packagepackage;

review and approve budgets and guidelines for performance-based compensation;

review existing cash-based and equity-based compensation plans;

 

review and recommend to the Board for approval all new cash-based, equity-based and performance-based compensation plans and all material modifications to existing compensation plans;plans, provided that any equity-based inducement plans shall be approved by the Compensation Committee;

 

review and discuss the Company’s Compensation Discussion and Analysis (“CD&A”) and the related executive compensation information and recommend that the CD&A and related executive compensation information be included in the Company’s proxy statement and annual report on Form10-K, as required by the rules and regulations of the SEC;

 

approve the Compensation Committee Report on executive officer compensation included in the Company’s proxy statement or annual report on Form10-K, as required by the rules and regulations of the SEC;

 

review and recommend to the Board for approval the frequency with which the Company will conductsay-on-pay votes, taking into account the results of the most recent shareholder advisory vote on frequency ofsay-on-pay votes required by the rules and regulations of the SEC, and review and approve the proposals regarding thesay-on-pay vote and the frequency of thesay-on-pay vote to be included in the Company’s proxy statement;

 

review and recommend to the Board for approval any employment agreements, severance agreements,arrangements,change-in-control arrangements or special or supplemental employee benefits, and any material amendments to the foregoing, applicable to executive officers;officers, provided that any awards granted under an equity-based inducement plan shall be approved by the Compensation Committee;

 

18Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


review and recommend to the Board for approval new hire and promotion compensation arrangements for executive officers;officers, provided that any awards granted under an equity-based inducement plan shall be approved by the Compensation Committee;

 

administer the Company’s stock plans and plans;

grant awards under the stock plans or delegate that responsibility to the Equity Grant Committee or a committee of the Board; andBoard, provided that any awards granted under an equity-based inducement plan shall be approved by the Compensation Committee;

 

conduct and review an annual Committee performance evaluation; and

review the Company’s executive compensation arrangements to determine whether they encourage excessive risk-taking, review and discuss, at least annually, the relationship between risk management policies and practices and executive compensation and evaluate executive compensation policies and practices that may mitigate any such risk.

Review of Compensation Risk

2019 PROXY STATEMENT25


GOVERNANCE INFORMATION

 

REVIEW OF COMPENSATION RISK

 

The Compensation Committee considered the risks associated with our compensation policies and practices in 2016.2018. The Compensation Committee concluded that our compensation policies and practices were not reasonably likely to have a material adverse effect on the Company and did not include risk-taking incentives or encourage our employees, including our executive officers, to take excessive risks in order to receive larger awards. As part of this analysis, the Compensation Committee considered the individual components of our executive officers’ compensation, the performance measures required to be achieved to earn cash bonus and equity awards and the vesting schedule of the equity awards. In concluding that our incentive plans do not promote excessive risk, the Compensation Committee considered the following factors, among others:

 

A significant portion of our executive officers’ compensation is tied to developmental, operating and corporate performance goals, and the achievement of the performance goals is conducted in accordance with the Company’s risk framework approved by the Board.

 

Our executive officer andnon-employee director stock ownership requirements tie

A significant portion of our executive officers’ compensation is provided in equity and is tied to the stock value of the Company, and our shareholders’ interests andexecutive officer stock ownership guidelines subject our executive officers to minimum share ownership and retention guidelines.requirements, further aligning their interests with those of our shareholders.

 

Our compensation program design provides a mix of annual and longer-term incentives and performance measures.

 

Our compensation mix is not overly weighted toward annual incentives.

 

We do not maintain highly leveraged payout curves and uncapped payouts,for incentive compensation opportunities, nor do we maintain steep payout cliffs at certain performance levels that may encourage short-term business decisions to meet payout thresholds.

 

All employees participate in the same annual bonus and annual LTI program.

We currently do not grant stock options.

 

The Compensation Committee has discretion over incentive award payouts.

Compliancepayouts, and compliance and ethical behaviorsbehavior are integral factors considered in all performance assessments.

 

The Company’s Policy on Insider Trading and Compliance prohibits executive officers from hedging and effecting short sales of the Company’s stock and prohibits pledging of the Company’s stock.

Code of Conduct and Ethics and Corporate Governance Guidelines

CODE OF CONDUCT AND ETHICS AND CORPORATE GOVERNANCE GUIDELINES

 

Our Code of Business Conduct and Ethics, which is applicable to all directors, officers and employees of the Company, is available on the Company’s website at www.cheniere.com.

Our Board adopted Corporate Governance Guidelines in March 2016. Our Corporate Governance Guidelines set out the material corporate practices that the Board has implemented which serve the best interests of the Company and its shareholders. Our Corporate Governance Guidelines are available on the Company’s website at www.cheniere.com.

Compensation Committee Interlocks and Insider ParticipationDIRECTOR CONTINUING EDUCATION

 

Continuing education opportunities are provided to keep directors updated with information about our industry, corporate governance developments and critical strategic issues facing the Company, and other matters relevant to Board service. To enhance the Board’s understanding of some of the unique issues facing our business, directors are invited to visit our operating locations, tour our facilities and directly interact with the personnel responsible for our day-to-day operations. Directors also participate in the National Association of Corporate Directors (NACD) of which the Company is a member.

None

26CHENIERE


COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

From January 1, 2018 through the 2018 Annual Meeting, the Compensation Committee consisted of Ms. Zichal and Messrs. Brandolini, Kilpatrick and Lipinski. From the 2018 Annual Meeting through the end of 2018, the Compensation Committee consisted of Messrs. Brandolini, Kilpatrick, Langham and Shear. During 2018, none of our executive officers servesserved as a member of the compensation committee of any other company that hashad an executive officer servingwho served as a member of our Board. NoneDuring 2018, none of our executive officers servesserved as a member of the board of directors of any other company that hashad an executive officer servingwho served as a member of our Compensation Committee.

Mr. Shear served as the Interim Chief Executive Officer and President of Cheniere from December 2015 to May 2016.

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement19


Director CompensationDIRECTOR COMPENSATION

 

Our Corporate Governance Guidelines provide for compensation for our directors’ services, in recognition of their time and skills. Directors who are also our officers or employees do not receive additional compensation for serving on the Board.

Maintaining a market-based compensation program for our directors enables the Company to attract qualified members to serve on the Board. The Governance and Nominating Committee, with the assistance of our independent compensation earned by or paidconsultant, periodically reviews our director compensation levels and practices and compares them to that of comparable companies to ensure they are aligned with market practices. Specifically, comparisons are made to the companies included in our peer group used for benchmarking the compensation of our executive officers, which is discussed under “Peer Group and Benchmarking” below, as well as to data presented in the annual NACD Director Compensation Report. Based on the results of such competitive reviews, the Governance and Nominating Committee may recommend changes to our directorsdirector compensation program to the Board for the year ended December 31, 2016, is set forth in the following table:approval.

Director Compensation Table for Fiscal Year 2016 
Name  

Fees Earned

or Paid in
Cash ($)

   

Stock

Awards

($)(1)

   

Option

Awards

($)

  

Non-Equity

Incentive Plan
Compensation

  

Change

in Pension

Value and
Nonqualified
Deferred
Compensation
Earnings ($)

  

All Other
Compensation

($)

  

Total

($)

 

Vicky A. Bailey(2)

  $95,000   $95,011               $190,011 

G. Andrea Botta(3)

  $165,000   $165,004               $330,004 

Nuno Brandolini(4)

  $100,000   $100,008               $200,008 

Jonathan Christodoro(5)

  $90,000   $90,014               $180,014 

David I. Foley(6)

      $180,028               $180,028 

David B. Kilpatrick(7)

      $180,028               $180,028 

Samuel Merksamer(8)

  $90,000   $90,014               $180,014 

Donald A. Robillard, Jr.(9)

      $200,017               $200,017 

Neal A. Shear(10)

                        

Heather R. Zichal(11)

  $90,000   $90,014               $180,014 
(1)The amounts in this column reflect the grant date fair values (at $32.24 per share on June 1, 2016) of awards made on June 2, 2016.

(2)Ms. Bailey was granted 2,947 shares of restricted stock on June 2, 2016, with a grant date fair value of $95,011. Ms. Bailey receives $10,000 for her service as Chairman of the Governance & Nominating Committee. As of December 31, 2016, she had a total 4,447 shares of restricted stock outstanding.

(3)Mr. Botta was granted 5,118 shares of restricted stock on June 2, 2016, with a grant date fair value of $165,004. Mr. Botta receives $150,000 for his service asNon-Executive Chairman of the Board of Directors. As of December 31, 2016, he had a total of 6,618 shares of restricted stock outstanding.

(4)Mr. Brandolini was granted 3,102 shares of restricted stock on June 2, 2016, with a grant date fair value of $100,008. Mr. Brandolini receives $20,000 for his service as Chairman of the Compensation Committee. As of December 31, 2016, he had a total of 4,602 shares of restricted stock outstanding.

(5)Mr. Christodoro was granted 2,792 shares of restricted stock on June 2, 2016, with a grant date fair value of $90,014. As of December 31, 2016, he had a total of 2,792 shares of restricted stock outstanding.

(6)Mr. Foley was granted 5,584 shares of restricted stock on June 2, 2016, with a grant date fair value of $180,028. Mr. Foley is an employee of Blackstone and, pursuant to arrangements between Mr. Foley and Blackstone, is required to transfer to Blackstone any and all compensation received in connection with his directorship for any company Blackstone invests in or advises.

(7)Mr. Kilpatrick was granted 5,584 shares of restricted stock on June 2, 2016, with a grant date fair value of $180,028. As of December 31, 2016, he had a total of 7,084 shares of restricted stock outstanding.

(8)Mr. Merksamer was granted 2,792 shares of restricted stock on June 2, 2016, with a grant date fair value of $90,014. As of December 31, 2016, he had a total of 2,792 shares of restricted stock outstanding.

(9)Mr. Robillard was granted 6,204 shares of restricted stock on June 2, 2016, with a grant date fair value of $200,017. As of December 31, 2016, he had a total of 8,088 shares of restricted stock outstanding.

(10)Mr. Shear did not receive any compensation for his role as a director during 2016. Mr. Shear entered into a compensatory arrangement on December 18, 2015 in connection with his appointment as Interim CEO and President of the Company and on May 12, 2016 in connection with his role as Interim Special Advisor to the CEO. Please see the footnotes to the “Summary Compensation Table” on page 47 of this Proxy Statement and “Compensatory Arrangement with Former Interim CEO and President” on page 40 of this Proxy Statement for additional details regarding Mr. Shear’s compensation in 2016, and the “Outstanding Equity Awards at FiscalYear-End” table on page 52 of this Proxy Statement for additional details regarding the outstanding equity awards held by Mr. Shear as of December 31, 2016.

(11)Ms. Zichal was granted 2,792 shares of restricted stock on June 2, 2016, with a grant date fair value of $90,014. As of December 31, 2016, she had a total of 4,676 shares of restricted stock outstanding.

During the fiscal year ended December 31, 2016,2017, the Board approved an increase to the annual compensation tofor eachnon-employee director for his or her service from $180,000 to $210,000 and did not increase annual director compensation in 2018. Mr. Fusco did not receive any compensation for his service as a director. Directors may elect to receive the period from the 2016 Annual Meeting of Shareholders through the Meeting. Theannual compensation either (i) 100% in restricted stock or (ii) $90,000 in cash and $120,000 in restricted stock. Additional compensation is also paid for Board also awarded

20Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


additional compensationleadership positions, to the Chairman of the Audit Committee and the Chairman of the Compensation Committee of $20,000 each, the Chairman of the Governance and Nominating Committee of $10,000 and theNon-Executive Chairman of $150,000 forrecognize the additional time required to perform their responsibilities during such period. In order to provideresponsibilities. These additional fees are as follows: $20,000 each for the directors some flexibility on the type and timingChairs of the compensation, directors were previously givenAudit Committee and Compensation Committee; $10,000 for the option to elect paymentChair of such amounts 100% in restricted stock or 50% in restricted stockthe Governance and 50% in cash.Nominating Committee; and $150,000 for theNon-Executive Chairman. Cash payments are made quarterly. The directors’ restricted stock vestsequity retainer of $120,000 and 50% of all Chair fees awarded in 2018 vest on the earlier of: (i) the day immediately prior to the date of the Company’s regular annual meeting of shareholders in the calendar year following the calendar year in which the date of the grant occurs; and (ii) the first anniversary of the date of grant. Effective February 1, 2017, the Board approved an increase to the annual compensation to eachnon-employeeIf a director for his or her service from $180,000 to $210,000. Going forward, directors may electelects to receive the annualtheir remaining compensation either 100% in restricted stock or $90,000 in lieu of cash, such restricted stock vests quarterly.

The Governance and $120,000Nominating Committee continues to evaluate our total director compensation package to ensure competitiveness with market practices, as well as fairness and appropriateness in restricted stock.

light of the responsibilities and obligations of our non-employee directors.

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement 21
2019 PROXY STATEMENT27


GOVERNANCE INFORMATION

The compensation earned by or paid to ournon-employee directors for the year ended December 31, 2018, is set forth in the following table:

NON-EMPLOYEE DIRECTOR COMPENSATION TABLE FOR FISCAL YEAR 2018

 

NAME

 

FEES EARNED

OR PAID IN

CASH ($)

  

STOCK

AWARDS

($)(1)

  

OPTION

AWARDS

($)

  

NON-EQUITY

INCENTIVE PLAN

COMPENSATION

  

CHANGE

IN PENSION

VALUE AND

NONQUALIFIED

DEFERRED

COMPENSATION

EARNINGS ($)

  

ALL OTHER

COMPENSATION

($)

  

TOTAL

($)

 

Vicky A. Bailey(2)

 $92,500  $120,059               —                           —                           —                           —  $212,559 

G. Andrea Botta(3)

 $167,500  $195,025              $362,525 

Nuno Brandolini(4)

 $95,000  $120,059              $215,059 

David I. Foley(5)

 $90,000  $120,059              $210,059 

David B. Kilpatrick(6)

 $90,000  $120,059              $210,059 

Andrew Langham(7)

 $45,000  $210,118              $255,118 

John J. Lipinski(8)

 $45,000  $              $45,000 

Courtney Mather(9)

 $  $210,118              $210,118

Donald A. Robillard, Jr.(10)

 $5,000  $230,118              $235,118 

Neal A. Shear(11)

 $  $230,118              $230,118 

Heather R. Zichal(12)

 $60,747  $              $60,747 

(1)

For Ms. Bailey and Messrs. Botta, Brandolini, Foley, Kilpatrick, Langham, Mather, Robillard and Shear, the amounts in this column reflect the grant date fair values (at $62.11 per share on May 17, 2018) of awards made on May 17, 2018.

(2)

Ms. Bailey was granted 1,933 shares of restricted stock on May 17, 2018, with a grant date fair value of $120,059. As of December 31, 2018, she had a total 1,933 shares of restricted stock outstanding.

(3)

Mr. Botta was granted 3,140 shares of restricted stock on May 17, 2018, with a grant date fair value of $195,025. Mr. Botta receives $150,000 for his service asNon-Executive Chairman of the Board of Directors. Mr. Botta receives $10,000 for his service as Chairman of the Governance and Nominating Committee. As of December 31, 2018, he had a total of 3,140 shares of restricted stock outstanding.

(4)

Mr. Brandolini was granted 1,933 shares of restricted stock on May 17, 2018, with a grant date fair value of $120,059. As of December 31, 2018, he had a total of 1,933 shares of restricted stock outstanding.

(5)

Mr. Foley was granted 1,933 shares of restricted stock on May 17, 2018, with a grant date fair value of $120,059. Mr. Foley is an employee of Blackstone and, pursuant to arrangements between Mr. Foley and Blackstone, we pay directly to Blackstone any and all compensation due to Mr. Foley in connection with his directorship of the Company.

(6)

Mr. Kilpatrick was granted 1,933 shares of restricted stock on May 17, 2018, with a grant date fair value of $120,059. As of December 31, 2018, he had a total of 1,933 shares of restricted stock outstanding.

(7)

Mr. Langham was granted 3,383 shares of restricted stock on May 17, 2018, with a grant date fair value of $210,118. As of December 31, 2018, he had a total of 2,658 shares of restricted stock outstanding.

(8)

On May 17, 2018, Mr. Lipinski resigned from the Board, and all of the outstanding shares of restricted stock of Mr. Lipinski were forfeited upon his departure. As of December 31, 2018, Mr. Lipinski had a total of 0 shares of restricted stock outstanding.

(9)

Mr. Mather was granted 3,383 shares of restricted stock on May 17, 2018, with a grant date fair value of $210,118. As of December 31, 2018, he had a total of 2,658 shares of restricted stock outstanding.

(10)

Mr. Robillard was granted 3,705 shares of restricted stock on May 17, 2018, with a grant date fair value of $230,118. Mr. Robillard receives $20,000 for his service as Chairman of the Audit Committee. As of December 31, 2018, he had a total of 2,900 shares of restricted stock outstanding.

(11)

Mr. Shear was granted 3,705 shares of restricted stock on May 17, 2018, with a grant date fair value of $230,118. Mr. Shear receives $20,000 for his service as Chairman of the Compensation Committee. As of December 31, 2018, he had a total of 2,900 shares of restricted stock outstanding.

(12)

On July 16, 2018, Ms. Zichal resigned from the Board, and all of the outstanding shares of restricted stock of Ms. Zichal were forfeited upon her departure from the Board. As of December 31, 2018, Ms. Zichal had a total of 0 shares of restricted stock outstanding.

28CHENIERE


MANAGEMENT

MANAGEMENTEXECUTIVE OFFICERS

Executive Officers

 

The following table sets forth the names, ages and positions of each of our executive officers (for purposes of Rule 3b-7 under the Securities Exchange Act of 1934 and this Proxy Statement), as of the Record Date, all of whom serve at the request of the Board:

 

NameNAME

  Age

AGE

  Position

POSITION

Jack A. Fusco

  5456  Director, President and Chief Executive Officer

Michael J. Wortley

  4042  Executive Vice President and Chief Financial Officer

Anatol Feygin

  4850  Executive Vice President and Chief Commercial Officer

Ed Lehotsky

63Senior Vice President, Engineering and Construction

Doug Shanda

47Senior Vice President, Operations

Sean N. Markowitz

  4345  General Counsel and Corporate Secretary

Douglas D. Shanda

49Senior Vice President, Operations

Jack A. Fusco

President and Chief Executive Officer

Mr. Fusco has served as President and Chief Executive Officer since May 2016. Further information regarding Mr. Fusco is provided above under Director Biographies.“Director Biographies.

Michael J. Wortley has served as

Executive Vice President and Chief Financial Officer

Mr. Wortley has served as Chief Financial Officer since January 2014 and as Executive Vice President since September 2016.2016 (Senior Vice President from January 2014 to September 2016). Mr. Wortley joined Cheniere in February 2005. He served as Senior Vice President and Chief Financial Officer from January 2014 to September 2016. He served as Vice President, Strategy and Risk of Cheniere from January 2013 to January 2014 and as Vice President-Business Development of Cheniere and President of Corpus Christi Liquefaction, LLC, a wholly-owned subsidiary of Cheniere, from September 2011 to January 2013. He served as Vice President-Strategic Planning from January 2009 to September 2011 and Manager-Strategic New Business from August 2007 to January 2009. Mr. Wortley serves as a director and Executive Vice President and Chief Financial Officer of Cheniere Energy Partners GP, LLC, a wholly-owned subsidiary of Cheniere and the general partner of Cheniere Energy Partners, L.P.Partners. He also servesserved as a director and the Chief Financial Officer of Cheniere Energy Partners LP Holdings LLC.from January 2014 to September 2018 and Executive Vice President from August 2017 to September 2018 (Senior Vice President from January 2014 to August 2017). Prior to joining Cheniere in February 2005, Mr. Wortley spent five years in oil and gas corporate development, mergers, acquisitions and divestitures with Anadarko Petroleum Corporation (“Anadarko”), a publicly-traded oil and gas exploration and production company. Mr. Wortley began his career with Union Pacific Resources Corporation, a publicly-traded oil and gas exploration and production company subsequently acquired by Anadarko. Mr. Wortley received a B.B.A. in Finance from Southern Methodist University.

Anatol Feygin

Executive Vice President and Chief Commercial Officer

Mr. Feygin has served as Executive Vice President and Chief Commercial Officer since September 2016. Mr. Feygin joined Cheniere in March 2014 as Senior Vice President-StrategyPresident, Strategy and Corporate Development. Mr. Feygin also currently serves as Executive Vice President and Chief Commercial Officer of Cheniere Energy Partners GP, LLC, and previously served as a director and Executive Vice President and Chief Commercial Officer of Cheniere Energy Partners LP Holdings LLC.from September 2016 and August 2017, respectively, to September 2018. Prior to joining Cheniere, Mr. Feygin worked with Loews Corporation from November 2007 to March 2014, most recently as its Vice President, Energy Strategist and Senior Portfolio Manager. Prior to joining Loews, Mr. Feygin spent three years at Bank of America, most recently as Head of Global Commodity Strategy. Mr. Feygin began his banking career at J.P. Morgan Securities Inc. as Senior Analyst, Natural Gas Pipelines and Distributors. Mr. Feygin earned a B.S. in Electrical Engineering from Rutgers University and an M.B.A. in Finance from the Leonard N. Stern School of Business at NYU.

Ed Lehotsky has served as Senior Vice President, Engineering and Construction, since September 2016. Mr. Lehotsky joined Cheniere in May 2003 and served as Vice President of LNG Project Management during construction andstart-up of the Sabine Pass LNG terminal. Mr. Lehotsky currently serves as Senior Vice President, Engineering & Construction of Cheniere Energy Partners GP, LLC. Mr. Lehotsky serves as Senior Vice President, LNG Engineering and Construction of Sabine Pass Liquefaction, LLC and President of Corpus Christi Liquefaction, LLC. Mr. Lehotsky has the overall responsibility of engineering, construction, andstart-up of the liquefaction facilities at our projects in both Sabine Pass and Corpus Christi, as well as development of other LNG related facilities for Cheniere. Prior to joining Cheniere, Mr. Lehotsky held various positions at KBR and its predecessor companies for 25 years, with the majority of his experience dealing with LNG engineering and construction of liquefaction and regasification facilities internationally and domestically. He received a B.S. in Electrical Engineering from Case Western Reserve University.

Doug Shanda has served as Senior Vice President, Operations, since September 2016. Mr. Shanda joined Cheniere in October 2012 as Vice President, Sabine Pass Operations leading the effort to prepare for liquefaction operations. His role was expanded to include Corpus Christi Operations in 2015. Mr. Shanda currently serves as a Director and Senior Vice President, Operations of Cheniere Energy Partners GP, LLC and as a Director of Cheniere Energy Partners LP Holdings, LLC. Mr. Shanda serves as President of

22Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Sabine Pass Liquefaction, LLC and Senior Vice President, Terminal Operations of Corpus Christi Liquefaction, LLC. Mr. Shanda is responsible for safe, reliable operations at Cheniere’s LNG terminals. Mr. Shanda has been professionally involved in the power, chemical, petrochemical, refining and LNG industries for over 22 years. Prior to joining Cheniere, Mr. Shanda served as the Senior Project Engineer, Technical Manager and Plant Manager of the PERU LNG liquefaction plant in Melchorita, Peru where he was responsible for the overall management of the facility including production, marine, maintenance, technical services, EHS, security and administration. Mr. Shanda has 22 years of experience in project management and operations management. He has a B.S. degree in Electrical Engineering from Iowa StateNew York University.

Sean N. Markowitz

General Counsel and Corporate Secretary

Mr. Markowitz has served as General Counsel and Corporate Secretary since September 2016. Mr. Markowitz joined Cheniere in October 2015 as Assistant General Counsel and Corporate Secretary. Mr. Markowitz served as Interim General Counsel and Corporate Secretary from June 2016 to September 2016. Mr. Markowitz also currently serves as General Counsel and Corporate Secretary of Cheniere Energy Partners GP, LLC and previously served as General Counsel and Corporate Secretary of Cheniere Holdings from

2019 PROXY STATEMENT29


MANAGEMENT

November 2016 and December 2015, respectively, to September 2018. Prior to joining Cheniere, Mr. Markowitz served as General Counsel and Corporate Secretary for Sizmek, Inc. (and its predecessor company, Digital Generation, Inc.) from August 2012 to May 2015. Prior to joining Digital Generation, Inc., Mr. Markowitz served as Chief Legal Counsel–Counsel—Commercial for Alon USA Energy, Inc. from August 2010 to August 2012 (and as Assistant General Counsel from December 2008 to July 2010). From January 2006 to December 2008, Mr. Markowitz served as Counsel–Counsel—Corporate Acquisitions and Finance for Electronic Data Systems Corporation which was acquired by Hewlett-Packard Company in August 2008. Mr. Markowitz’s earlier career experience includes service with the law firms of Fulbright & Jaworski L.L.P. (now a part of Norton Rose Fulbright), Hughes & Luce L.L.P. (now a part of K&L Gates LLP) and Andrews Kurth LLP.LLP (now a part of Hunton Andrews Kurth LLP). Mr. Markowitz earned his J.D., with honors, from The University of Texas School of Law and graduated magna cum laude with a B.S. in Economics from the Wharton School of the University of Pennsylvania.

Douglas D. Shanda

Senior Vice President, Operations

Mr. Shanda has served as Senior Vice President of Operations since September 2016. Mr. Shanda joined Cheniere in October 2012 as Vice President, Sabine Pass Operations leading the effort to prepare for liquefaction operations. His role was expanded to include Corpus Christi Operations in 2015. Mr. Shanda currently serves as a director and Senior Vice President, Operations of Cheniere Energy Partners GP, LLC and previously served as director and Senior Vice President, Operations of Cheniere Holdings from September 2016 and August 2017, respectively, to September 2018. Mr. Shanda serves as President of Sabine Pass Liquefaction, LLC and Senior Vice President, Terminal Operations of Corpus Christi Liquefaction, LLC. Mr. Shanda is responsible for safe, reliable operations at Cheniere’s LNG terminals. Mr. Shanda has been professionally involved in the power, chemical, petrochemical, refining and LNG industries for over 25 years. Prior to joining Cheniere, Mr. Shanda served as the Senior Project Engineer, Technical Manager and Plant Manager of the PERU LNG liquefaction plant in Melchorita, Peru where he was responsible for the overall management of the facility including production, marine, maintenance, technical services, EHS, security and administration. Mr. Shanda has over 25 years of experience in project management and operations management. Mr. Shanda also serves as a director for The Alley Theatre and The Interstate Natural Gas Association of America (INGAA). He has a B.S. degree in Electrical Engineering from Iowa State University.

Indemnification of Officers and Directors

INDEMNIFICATION OF OFFICERS AND DIRECTORS

 

Our Restated Certificate of Incorporation, as amended, and Bylaws provide that the Company will indemnify its directors and officers to the fullest extent permissible under Delaware law. These indemnification provisions require the Company to indemnify such persons against certain liabilities and expenses to which they may become subject by reason of their service as a director or officer of the Company or any of its affiliated enterprises. The provisions also set forth certain procedures, including the advancement of expenses, that apply in the event of a claim for indemnification.

We have also entered into an Indemnification Agreement with members of our Board and certain officers of the Company. The Indemnification Agreement provides for indemnification for all expenses and claims that a director or officer incurs as a result of actions taken, or not taken, on behalf of the Company while serving as a director, officer, employee, controlling person, agent or fiduciary (the “Indemnitee”) of the Company, or any subsidiary of the Company, with such indemnification to be paid within 25 days after written demand. The Indemnification Agreement provides that no indemnification will generally be provided: (1) for claims brought by the director or officer,Indemnitee, except for a claim of indemnity under the Indemnification Agreement, if the Company approves the bringing of such claim, or ifas otherwise required under Section 145 of the General Corporation Law of the State of Delaware, requires providing indemnification becauseregardless of whether the director or officer has been successful on the merits of such claim;Indemnitee ultimately is determined to be entitled to indemnification; (2) for claims under Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (3) if the director or officerIndemnitee did not act in good faith or in a manner reasonably believed by the director or officerIndemnitee to be in or not opposed to the best interests of the Company; (4) if the director or officerIndemnitee had reasonable cause to believe that his or her conduct was unlawful in a criminal proceeding; or (5) if the director or officerIndemnitee is adjudged liable to the Company. Indemnification will be provided to the extent permitted by law, the Company’s Restated Certificate of Incorporation, as amended, and Bylaws, and to a greater extent if, by law, the scope of coverage is expanded after the date of the Indemnification Agreement. In all events, the scope of coverage will not be less than what is in existence on the date of the Indemnification Agreement.

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement 23
30CHENIERE


EQUITY COMPENSATION

PLAN INFORMATION

The following table provides information about our compensation plansplan as of December 31, 2016.2018. The equity compensation plans approved by our shareholders include the Cheniere Energy, Inc. Amended and Restated 2003 Stock Incentive Plan, as amended (the “2003 Plan”) andconsist of the Cheniere Energy, Inc. 2011 Incentive Plan, as amended (the “2011 Plan”).

 

PLAN CATEGORY  

(a)

NUMBER OF SECURITIES

TO BE ISSUED UPON

EXERCISE OF

OUTSTANDING OPTIONS,

WARRANTS AND RIGHTS

  

(b) WEIGHTED-

AVERAGE EXERCISE

PRICE OF

OUTSTANDING

OPTIONS, WARRANTS

AND RIGHTS

   

(c)

NUMBER OF SECURITIES

REMAINING AVAILABLE FOR

FUTURE ISSUANCE UNDER

EQUITY COMPENSATION

PLANS (EXCLUDING

SECURITIES REFLECTED IN

THE FIRST COLUMN (a))

 

Equity compensation plans approved by security holders

   3,872,765(1)                                —    4,280,325(2) 

Equity compensation plans not approved by security holders

                                       — 

    Total

   3,872,765       4,280,325 

Plan Category(1)

(a)

NumberThe number in this column represents the number of securities

to be issued upon

shares issuable under outstanding RSU awards and PSU awards based on the maximum award level. For more information regarding these awards, please see “LTI Program” on page 45 of this Proxy Statement. The weighted-average exercise price of

outstanding options,

warrants and rights

(b) Weighted-

average exercise

price of

outstanding

options, warrants

and rights

(c)

Number of securities

remaining available for

future issuance under

equity compensation

plans (excluding

securities reflected in

the first column (a))

Equity compensation plans approved by security holders

651,382(1)

Equity compensation plans does not approved by security holderstake these awards into account.

Total

651,382

 

(2)(1)

In 2003,2011, the Company established the 20032011 Plan, which was amended and restated in September 2005 and has since been amended.April 2017. The 20032011 Plan is a broad-based incentive plan, which allows for the issuance of stock options, stock appreciation rights and awards of purchased stock, bonus stock, phantom stock, restricted stock and performance awards and other stock-based awards to employees, consultants andnon-employee directors. The following awards have been granted under the 20032011 Plan and remain outstanding as of December 31, 2016: 329,8132018: 31,990 shares of restricted stock.stock, 3,052,381 shares underlying RSUs and 788,394 shares underlying PSUs based on the maximum award level. The term of any award under the 20032011 Plan may not exceed a period of ten years. As

Vesting of December 31, 2016, no shares of commonrestricted stock remained available for grant under the 2003 Plan.2011 Plan depends on whether the restricted stock was granted as a retention award or annual director equity award. Vesting of retention awards typically occurs in equal annual installments over atwo-year period or three-year period on each anniversary of the grant date. The outstanding annual director equity retainer awards and 50% of all Chair fees vest on the earlier of: (i) the day immediately prior to the date of the Company’s next annual meeting of shareholders after the date of grant and (ii) the first anniversary of the date of grant. If a director elects to receive their remaining compensation in restricted stock in lieu of cash, such stock vests quarterly.

In 2011, the Company established the 2011 Plan, which has since been amended. The 2011 Plan is a broad-based incentive plan, which allows for the issuance of stock options, stock appreciation rights and awards of bonus stock, phantom stock, restricted stock and performance awards and other stock-based awards to employees, consultants andnon-employee directors. The following awards have been granted under the 2011 Plan and remain outstanding as of December 31, 2016: 5,143,892 shares of restricted stock. The term of any award under the 2011 Plan may not exceed a period of ten years.

Restricted Stock Units (“RSUs”) under the 2011 Plan generally vest in equal annual installments over a three-year period on each anniversary of the grant date or cliff vest upon the third anniversary of the grant date.

Vesting of restricted stock under the 2003 Plan and 2011 Plan depends on whether the restricted stock was granted as a new hire award, retention award, annual director equity award or a milestone award for construction of Trains 3 and 4 of the SPL Project. Vesting of new hire awards and retention awards occurs in equal annual installments over a four-year period on each anniversary of the grant date. The annual director equity awards vest on the earlier of: (i) the day immediately prior to the date of the Company’s next annual meeting of shareholders after the date of grant and (ii) the first anniversary of the date of grant. Vesting of the milestone award for construction of Trains 3 and 4 of the SPL Project is described under “Outstanding Equity Awards at December 31, 2016” on page 52 of this Proxy Statement.

Subsequent to December 31, 2016, the Company held a Special Meeting of Shareholders on January 31, 2017, at which our shareholders approved the issuance of awards with respect to 7,845,630 shares of common stock available for issuance under the 2011 Plan. These shares, while not reflected in the table above, are now available for future issuance under the 2011 Plan.

Performance Share Units (“PSUs”) under the 2011 Plan cliff vest upon the third anniversary of the grant date, subject to the satisfaction of performance conditions.

 

24 Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement
2019 PROXY STATEMENT31


SECURITY OWNERSHIP

As of the Record Date, there were 237,859,646257,390,300 shares of common stock outstanding. The information provided below summarizes the beneficial ownership of directors, nominees for director, named executive officers set forth in the “Summary Compensation Table”, and all of our directors and executive officers as a group, as well as owners of more than 5% of our outstanding common stock. “Beneficial Ownership” generally includes those shares of Company common stock that a person has the power to vote, sell or acquire within 60 days. It includes shares of Company common stock that are held directly and also shares held indirectly through a relationship, a position as a trustee or under a contract or understanding.

Directors and Executive OfficersDIRECTORS AND EXECUTIVE OFFICERS

 

The following table sets forth information with respect to shares of common stock of the Company owned of record and beneficially as of the Record Date by each director, nominee for director and named executive officer set forth in the Summary“Summary Compensation TableTable” and by all current directors and executive officers of the Company as a group. As of the Record Date, the current directors and executive officers of the Company beneficially owned an aggregate of 1,856,1741,491,413 shares of common stock (approximately 1% of the outstanding shares entitled to vote at the time).

The table also presents the ownership of common units of Cheniere Partners and common shares of Cheniere Holdings owned of record or beneficially as of the Record Date by each director, nominee for director and named executive officer set forth in the“Summary Compensation Table” and by all current directors and executive officers of the Company as a group. The Company owns a majority100% of the general partner interest in Cheniere Holdings, and Cheniere Holdings owns a majority48.6% of the limited partner interest in Cheniere Partners. As of the Record Date, there were 57,109,223348,625,292 common units, 135,383,831 subordinated units 145,333,334 Class B units and 6,894,0189,877,232 general partner units of Cheniere Partners outstanding and 231,700,000 common shares of Cheniere Holdings outstanding.

 

  Cheniere Energy, Inc.  Cheniere Energy Partners,
L.P.
  Cheniere Energy
Partners LP Holdings,
LLC
 
Name of Beneficial Owner 

Amount and

Nature of

Beneficial

Ownership

  

Percent

of Class

  

Amount and

Nature of

Beneficial

Ownership

  

Percent

of Class

  

Amount and

Nature of

Beneficial

Ownership

  

Percent

of Class

 

Jack A. Fusco

  472,845(1)   *             

Vicky A. Bailey

  38,998   *             

G. Andrea Botta

  39,530   *             

Nuno Brandolini

  255,602(2)   *   600(3)   *   300(3)   * 

Jonathan Christodoro

  3,963   *             

David I. Foley

  31,207(4)   *             

David B. Kilpatrick

  113,265(5)   *             

Samuel Merksamer

  18,634   *             

Donald F. Robillard, Jr.

  14,901   *             

Neal A. Shear

  8,697   *             

Heather R. Zichal

  8,887   *             

Michael J. Wortley

  412,115   *             

Anatol Feygin

  70,767   *             

Ed Lehotsky

  153,064(6)   *             

Doug Shanda

  79,342   *             

Meg A. Gentle

  819,469(7)   *   8,035(7)   *       

All directors and executive officers as a group (16 persons)

  1,723,317   *   8,635   *   300   * 

*     Less than 1%

(1)  Of the total shares reported, 130,628 shares are owned by Fusco Energy Investment LLP and may be deemed to be beneficially owned by Mr. Fusco as the General Partner thereof.

(2)  Includes 6,000 shares held by Mr. Brandolini’s wife.

   CHENIERE ENERGY, INC.   CHENIERE ENERGY PARTNERS, L.P. 

NAME OF BENEFICIAL OWNER

  

AMOUNT AND

NATURE OF

BENEFICIAL

OWNERSHIP

  

PERCENT

OF CLASS

   

AMOUNT AND

NATURE OF

BENEFICIAL

OWNERSHIP

   

PERCENT

OF CLASS

 

Jack A. Fusco

   501,630(1)    *         

Vicky A. Bailey

   34,706   *         

G. Andrea Botta

   46,674   *         

Nuno Brandolini

   220,204(2)    *          

David I. Foley

   35,604(3)    *         

David B. Kilpatrick

   80,662(4)    *         

Andrew Langham

   5,523   *         

Courtney R. Mather

   3,383   *         

Donald F. Robillard, Jr.

   23,328   *         

Neal A. Shear

   16,714   *         

Michael J. Wortley

   381,231(5)    *         

Anatol Feygin

   59,728(6)    *         

Sean N. Markowitz

   9,566(7)    *         

Douglas D. Shanda

   72,960(8)    *    2,850    

All directors and executive officers as a group (16 persons)

   1,491,413   *    2,850    

 

*
Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement25

Less than 1%


(3)  Includes 600 common units of Cheniere Energy Partners, L.P. and 300 common shares of Cheniere Energy Partners LP Holdings, LLC held by a family member of Mr. Brandolini.

 

(1)(4)

Includes 35,457 RSUs that vest in May 2019. Does not include 301,677 unvested RSUs awarded to Mr. Fusco. Of the total shares reported, 169,378 shares are owned by Fusco Energy Investment LLP and may be deemed to be beneficially owned by Mr. Fusco as the General Partner thereof.

(2)

Includes 6,000 shares held by Mr. Brandolini’s wife.

(3)

Includes 8,542 shares of restricted stock granted on October 1, 2012, 6,429 shares of restricted stock granted on June 6, 2013, 6,000 shares of restricted stock granted on March 5, 2014, 2,162 shares of restricted stock granted on September 11, 2014, 2,490 shares of restricted stock granted on June 11, 2015, and 5,584 shares of restricted stock granted on June 2, 2016.2016, 2,464 shares of restricted stock granted on May 18, 2017 and 1,933 shares of restricted stock granted on May 17, 2018. Based on a Form 4 filed by Mr. Foley, he disclaims beneficial ownership of these securities. Mr. Foley is an employee of Blackstone and, pursuant to arrangements between Mr. Foley and Blackstone, is required to transfer to Blackstone any and all compensation received in connection with his directorship for any company Blackstone invests in or advises.

 

(5)
 
32CHENIERE


OWNERS OF MORE THAN FIVE PERCENT OF OUTSTANDING STOCK

(4)

Includes 104,71476,265 shares held by trust.

 

(5)(6)Includes 95,377 shares held by trust.

Does not include 153,780 unvested RSUs awarded to Mr. Wortley.

 

(6)

Does not include 134,264 unvested RSUs awarded to Mr. Feygin.

(7)Includes information reported

Does not include 60,485 unvested RSUs awarded to us. Ms. Gentle ceased to be employed by the Company on August 26, 2016 and is no longer required to report her holdings in the Company’s or Cheniere Energy Partners, L.P.’s securities pursuant to Section 16(a) of the Exchange Act.Mr. Markowitz.

(8)

Does not include 75,485 unvested RSUs awarded to Mr. Shanda.

Owners of More than Five Percent of Outstanding StockOWNERS OF MORE THAN FIVE PERCENT OF OUTSTANDING STOCK

 

The following table shows the beneficial owners known by us to own more than five percent of our voting stock as of the Record Date.

 

Common Stock
Name and Address of Beneficial Owner

Amount and

Nature of

Beneficial

Ownership

Percent of

Class

Icahn Capital LP
767 Fifth Avenue, 47th Floor
New York, NY 10153

32,649,671(1)13.7

The Baupost Group, L.L.C.
10 St. James Avenue, Suite 1700
Boston, MA 02116

21,726,340(2)9.1

The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355

16,381,703(3)6.9

BlackRock, Inc.
55 East 52nd Street
New York, NY 10055

12,063,284(4)5.1
   COMMON STOCK 

NAME AND ADDRESS OF BENEFICIAL OWNER

  

AMOUNT AND 

NATURE OF

BENEFICIAL 

OWNERSHIP

  

PERCENT OF 

CLASS

 

Icahn Capital LP

767 Fifth Avenue, 47th Floor

New York, NY 10153

   23,680,490(1)   9.2

The Vanguard Group

100 Vanguard Blvd.

Malvern, PA 19355

   20,388,634(2)   7.9

FMR LLC

245 Summer Street

Boston, MA 02210

   14,982,530(3)   5.8

The Baupost Group, L.L.C.

10 St. James Avenue, Suite 1700

Boston, MA 02116

   14,196,135(4)   5.5

 

(1)

Information is based on a Schedule 13D/A filed with the SEC on December 7, 2015June 28, 2018 by: (i) Icahn CapitalPartners LP; (ii) High River Limited Partnership; and (iii) Icahn Partners Master Fund LP. These entities are deemed to beneficially own 32,649,67123,680,490 shares of common stock. High River Limited Partnership has sole voting power and sole dispositive power with regard to 6,529,9354,736,099 shares. Each of Hopper Investments LLC, Barberry Corp. and Mr. Carl C. Icahn has shared voting power and shared dispositive power with regard to such shares. Icahn Partners Master Fund LP has sole voting power and sole dispositive power with regard to 10,719,7827,711,042 Shares. Each of Icahn Offshore LP, Icahn Capital LP, IPH GP LLC, Icahn Enterprises Holdings L.P., Icahn Enterprises G.P. Inc., Beckton Corp. and Mr. Icahn has shared voting power and shared dispositive power with regard to such Shares. Icahn Partners LP has sole voting power and sole dispositive power with regard to 15,399,95411,233,349 Shares. Each of Icahn Onshore LP, Icahn Capital LP, IPH GP LLC, Icahn Enterprises Holdings L.P., Icahn Enterprises G.P. Inc., Beckton Corp. and Mr. Icahn has shared voting power and shared dispositive power with regard to such Shares.

 

(2)

Information is based on a Schedule 13G/A filed with the SEC on January 9, 2017February 11, 2019 by The Vanguard Group. The Vanguard Group has sole voting power over 161,836 shares of common stock, shared voting power over 43,044 shares of common stock, sole dispositive power over 20,186,405 shares of common stock and shared dispositive power over 202,229 shares of common stock.

(3)

Information is based on a Schedule 13G filed with the SEC on February 13, 2019 by FMR LLC. FMR LLC has sole voting power over 1,056,364 shares of common stock and sole dispositive power over 14,982,530 shares of common stock.

(4)

Information is based on a Schedule 13G/A filed with the SEC on February 13, 2019 by: (i) The Baupost Group, L.L.C.; (ii) SAK Corporation;Baupost Group GP, L.L.C.; and (iii) Seth A. Klarman. Each of these entitiesholders is deemed to beneficially own 21,726,34014,196,135 shares of common stock. Each of these entities has shared power to vote and dispose of the shares beneficially owned.

(3)Information is based on a Schedule 13G/A filed with the SEC on February 10, 2017 by The Vanguard Group. The Vanguard Group has sole voting power over 177,055 shares of common stock, shared voting power over 39,014 shares of common stock, sole dispositive power over 16,165,371 shares of common stock and shared dispositive power over 216,332 shares of common stock.

(4)Information is based on a Schedule 13G filed with the SEC on January 30, 2017 by BlackRock, Inc. BlackRock, Inc. has sole voting power over 10,625,100 shares of common stock and sole dispositive power over 12,063,284 shares of common stock.
All information provided in the “Owners of More than Five Percent of Outstanding Stock” table with respect to the above entities is based solely on information set forth in their respective Schedule 13D/A, Schedule 13G/A and Schedule 13G filings with the SEC, as applicable. This information may not be accurate or complete, and Cheniere takes no responsibility therefor and makes no representation as to its accuracy or completeness.

 

26 Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement
2019 PROXY STATEMENT33


COMPENSATION

DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) describes the material elements of the compensation of our Named Executive Officers (“NEOs”), including our former Interim Chief Executive Officer (“CEO”) and President and our former Executive Vice President—Marketing, and factors considered in making compensation decisions. Our NEOs for fiscal year 20162018 were the following individuals:

 

NamePosition

JackJACK A. FuscoFUSCO

DIRECTOR, PRESIDENT

AND CHIEF EXECUTIVE

OFFICER

  Director, President and Chief Executive Officer

Neal A. ShearMICHAEL J.

WORTLEY

EXECUTIVE VICE

PRESIDENT AND CHIEF
FINANCIAL OFFICER

  Director, Former Interim Chief Executive Officer and President

Michael J. WortleyANATOL FEYGIN

EXECUTIVE VICE
PRESIDENT AND

CHIEF COMMERCIAL
OFFICER

  Executive Vice President and Chief Financial Officer

Anatol FeyginSEAN N.

MARKOWITZ

GENERAL COUNSEL

AND CORPORATE

SECRETARY

  Executive Vice President and Chief Commercial Officer

Ed LehotskyDOUGLAS D.

Senior Vice President, Engineering and Construction

Doug ShandaSHANDA

Senior Vice President, Operations

Meg A. GentleSENIOR VICE

Former Executive Vice President—Marketing

PRESIDENT,

OPERATIONS

This CD&A is organized as follows:

TABLE OF CONTENTS

1

Executive Summary

PAGE 34

 

2

Executive SummaryCompensation

Philosophy & Objectives

  

PAGE 42

page 27

Executive Compensation Philosophy & Objectives

3
 page 33

Components of Our Executive

Compensation Program

  

PAGE 42

page 33
4 

Executive

Compensation Process

  

PAGE 51

page 43
5 

Other Considerations

  page 45

PAGE 54

Executive SummaryEXECUTIVE SUMMARY

About Our BusinessABOUT OUR BUSINESS

 

Cheniere Energy, Inc. (“Cheniere”) is a market leader in the developmentleading producer and commercializationexporter of liquefied natural gas (“LNG”) facilitiesLNG in the United States. Our vision is to be recognized asprovide clean, secure and affordable energy to the premier global LNG company and provideworld, while responsibly delivering a reliable, competitive and integrated source of LNG, to our customers while creatingin a safe productive and rewarding work environment for our employees.environment. Our primary business strategy is to be a full service LNG provider to worldwideend-use customers.

We own and operate the Sabine Pass LNG terminal in Louisiana where we are developing, constructing and operating natural gas liquefaction and export facilities (the “SPL Project”) adjacent to the existing regasification facilities. We are also developing, constructing and constructingoperating a second natural gas liquefaction and export facility in Texas at the Corpus Christi LNG terminal (the “CCL Project”).

Each terminal includes a number of planned liquefaction trains (“Trains”), which convert natural gas into LNG so that it can be transported more economically across long distances. Each train has anTrain is expected to have a nominal production capacity, which is prior to adjusting for planned maintenance, production reliability, and potential overdesign and debottlenecking opportunities, of approximately 4.5 million tonnes mtpa of LNG, and average run rate adjusted nominal production capacity of approximately 4.4 to 4.9 mtpa of LNG

34CHENIERE


EXECUTIVE SUMMARY

per annum (“mtpa”) of LNG.Train. For the SPL Project, we are developingconstructing up to six Trains.Trains, which are in various stages of development, construction and operations. Trains 1 through 5 are operational and Train 6 is being commercialized and has all necessary regulatory approvals in place. For the CCL Project, we are currently developing up to three Trains. Train 1 is operational; Train 2 is undergoing commissioning; and Train 3 is under construction. We are also developing an expansion of the Corpus Christi LNG terminal adjacent to the CCL Project and filed an application with FERC in June 2018 for seven midscale Trains with an expected aggregate nominal production capacity of approximately 9.5 mtpa and one LNG storage tank.

The following table summarizes the current overall project status of the SPL Project and CCL Project, with completion percentages as of February 28, 2017:

   SABINE PASS (SPL)   CORPUS CHRISTI
(CCL)
 
    Trains 1-2   Trains 3-4   Train 5   Trains1-2 

Overall project completion percentage

   100%    97.3%    63.1%1    59.1%2 

Date of expected substantial completion

   Operational    T3: Operational    2H 2019    T1: 1Q 2019 
         T4: 2H 2017         T2: 2H 2019 

(1)Train 5 of the SPL Project:Overall project is approximately 63.1% complete, with engineering, procurement, subcontract work and construction approximately 99.2%, 93.0%, 46.0% and 19.2% complete, respectively.

(2)Trains 1 and 2 of the CCL Project: Overall project is approximately 59.1% complete, with engineering, procurement, subcontract work and construction approximately 100%, 78.6%, 28.9% and 30.7% complete, respectively.

 

Cheniere Energy, Inc.
SPL PROJECTCCL PROJECT
LIQUEFACTION TRAINTRAINSNotice of Annual Meeting of Shareholders and 2017 Proxy Statement1-5 27TRAIN 6TRAIN 1TRAIN 2TRAIN 3
Project StatusOperationalLimited Notices to Proceed IssuedOperationalCommissioningUnder Construction
Expected Substantial CompletionComplete

Complete

2H 20192H 2021


A final investment decision for Train 6 of the SPL Project and Train 3 of the CCL Project is expected in 2019 upon commercialization and obtaining financing and, with respect to Train 6 of the SPL Project, entry into an engineering, procurement and construction (“EPC”) contract.financing.

We expect to invest approximately $30 billion in the aggregate for the construction and development of the seven Trains we currently have under construction or completed. These projects are being constructed underlump-sum turnkey contracts, and financing has been obtained to fund construction.

We are also in various stages of developing other projects, including liquefaction projects and other infrastructure projects in support of natural gas supply and LNG demand, which, among other things, will require acceptable commercial and financing arrangements before we make a final investment decision.

Our management team creates value for our shareholders through diligent development (including commercialization), construction and operation of these facilities, the achievement of ambitious key milestones, and disciplined capital allocation. The Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of the Company considers progress against these goals when it designs Cheniere’s executive compensation program for our NEOs.

Cheniere’s Business Model–First Mover in U.S. LNG Exports

In 2010, Cheniere was the first to announce plans to pursue the development of an LNG export facility in the contiguous U.S., the SPL Project. Construction of, and operations at, the SPL Project is nearly two years ahead of any other U.S. liquefaction project. Trains 1 2 and 3through 5 of the SPL Project arewere the first liquefaction facilities to have been constructed and placed in service in the U.S. in over 40 years.years, and Train 1 of the CCL Project is the first liquefaction train constructed and placed in service at a greenfield liquefaction facility in the lower 48 states. We are currently the largest LNG exporter in the U.S. and expect to be one of the three largesttop five LNG exporterssellers in the world by 2020, representing approximately nine percent8% of the global LNG market.market by 2020. As of the end of 2018, there were three LNG projects under construction and one project in operation in North America, other than Cheniere’s SPL Project and CCL Project. Additionally, there are over 20 LNG projects in the region that have started the regulatory process for LNG exports. Outside of North America, we estimate that over 30 LNG production projects are under various stages of development.

Liquefaction Projects Underpinned with Long-Term20-Year Contracts

Approximately 87% of the expected aggregate nominal production capacity across the seven Trains under construction or completed has been sold underWe have entered into long-term20-year sale and purchase agreements (“SPAs”), equating between each respective project level subsidiary and third parties with fixed fees aggregating approximately $4.7 billion annually to approximately 27.4 mtpamake available an aggregate amount of LNG andthat is between approximately $4.3 billion annually in fixed fees.75% to 95% of the expected aggregate adjusted nominal production capacity of the eight Trains under construction or completed. All of thethese SPAs have been entered into with investment grade parent companies as counterparties or guarantors and do not have price reopeners. Revenue generally will commence under thethese SPAs as each applicable Train reaches the date of first commercial delivery.delivery (“DFCD”).

Under these SPAs, the customers will purchase LNG from SPL for a price consisting of a fixed fee per MMBtu of LNG (a portion of which is subject to annual adjustment for inflation) plus a variable fee per MMBtu of LNG equal to approximately 115% of Henry Hub per MMBtu of LNG.Hub. In certain circumstances, the customers may elect to cancel or suspend deliveries of LNG cargoes, in which case the customers would still be required to pay the fixed fee with respect to the contracted volumes that are not delivered as a result of such cancellation or suspension. As a result, we expect to generate a significant amount of predictable, stable cash flows annually, over the lives of the contracts.

For the volumes not contracted by our project level subsidiaries under long-term SPAs, we have aan integrated marketing teamfunction that is expected to have access to the excess LNG available from the seveneight Trains under construction or completed at the SPL and CCL Projects, and is developing a portfolio of long-, medium- and short-term SPAs. Cheniere Marketing, LLC (together with its subsidiaries, “Cheniere Marketing”) has purchased LNG from the Sabine Pass terminal and other locations worldwide, transported and unloaded commercial LNG cargoes and has capitalized on opportunities to optimize its portfolio of assets with the intention of maximizing margins on these cargoes.

2016 Performance and Developments

Construction and Operational Developments

2016 continued the transitionOur management team creates value for Cheniere from aour shareholders through diligent development company to an LNG operator. We made significant progress on our(including commercialization), construction and operationsoperation of these facilities, the achievement of ambitious key milestones and disciplined capital allocation. The Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of the Company considers progress against these goals when it designs Cheniere’s executive compensation program for our SPL and CCL Projects. In February 2016, the first of our Trains at the SPL Project began producing LNG, and the first LNG commissioning cargo was exported. In May 2016 and September 2016, Trains 1 and 2 of the SPL Project achieved substantial completion, respectively. Just recently, Train 3 of the SPL Project achieved substantial completion in March 2017 and Train 4 of the SPL Project commenced commissioning in March 2017.

In terms of operations, consolidated revenue at Cheniere was approximately $1.3 billion for 2016, with over $500 million in LNG revenue in the fourth quarter. In 2016, the SPL Project produced and exported a total of 56 cargoes representing approximately 200 million MMBtu of natural gas.

NEOs.

 

28 
2019 PROXY STATEMENT35


COMPENSATION DISCUSSION AND ANALYSIS

2018 PERFORMANCE AND DEVELOPMENTS

2018 was a breakthrough year for Cheniere. We achieved significant milestones throughout the organization, including financially, operationally and commercially:

Cheniere Energy, Inc.Final investment decision with respect toNoticeCorpus Christi Train 3Signedlong-term SPAs for~7.5 MTPA of Annual MeetingLNGRecord financial results:revenue of Shareholders~$8 billion, net income ofover $470 million and 2017 Proxy StatementConsolidated Adjusted EBITDA ofover $2.6 billion

Over270 cargoes exported in 2018 totaling~1 TCF of LNG

Strategic

In November 2018, we entered into an engineering, procurement and construction (“EPC”) contract with Bechtel Oil, Gas and Chemicals, Inc. (“Bechtel”) for Train 6 of the natural gas liquefaction facilities at the SPL Project. We also issued limited notices to proceed to Bechtel to commence early engineering, procurement and site works.

In May 2018, our Board made a positive final investment decision (“FID”) with respect to Train 3 of the natural gas liquefaction and export facility at the CCL Project and issued

a full notice to proceed to Bechtel under the EPC contract for Train 3.

In June 2018, we filed an application with the Federal Energy Regulatory Commission with respect to Corpus Christi Stage 3, consisting of seven midscale liquefaction Trains with an expected aggregate nominal production capacity of approximately 9.5 mtpa and one LNG storage tank.

In 2018, we signed seven long-term SPAs with six creditworthy counterparties totaling approximately 7.5 mtpa of LNG.

Operational

As of February 20, 2019, over 575 cumulative LNG cargoes have been produced, loaded and exported from the SPL Project and the CCL Project, with more than 270 cargoes in 2018 alone from the SPL Project, with deliveries to 32 countries and regions worldwide.

In November 2018 and December 2018, we commenced production and shipment of LNG commissioning cargoes from Train 5 of the SPL Project and Train 1 of the CCL Project, respectively, leading to the substantial completion of Train 1 of the CCL Project in February 2019 and Train 5 of the SPL Project in March 2019.
For full year 2018, over 23 million hours of labor were completed with a Lost Time Incident Rate of approximately 0.01. This achievement places us within the top quartile of benchmark metrics published by the Bureau of Labor Statistics for North American Industry Classification (NAICS) codes that align with our work activities.

For full year 2018, a total of approximately 975 TBtu of LNG was exported from the SPL Project and the CCL Project, which was approximately 87% of all LNG exported from the United States.

Financial

For full year 2018, we achieved record results in multiple key financial metrics, including net income attributable to common stockholders of over $470 million, consolidated revenues of approximately $8 billion and Consolidated Adjusted EBITDA of over $2.6 billion. For a definition of Consolidated Adjusted EBITDA and a reconciliation of thisnon-GAAP measure to net income, the most directly comparable GAAP financial measure, please see Appendix C.

During 2018, our stock price increased by approximately 10% and outperformed the S&P 500 Index by approximately 15%. Additionally, the total enterprise value of the Company increased by approximately 12%.
In September 2018, we closed the previously announced merger of Cheniere Energy Partners LP Holdings, LLC (“Cheniere Holdings”) with our wholly owned subsidiary.

We reached the following contractual milestones:

In June 2018, the date of first commercial delivery was reached under the20-year SPA with BG Gulf Coast LNG, LLC relating to Train 3 of the SPL Project.

In March 2018, the date of first commercial delivery was reached under the20-year SPA with GAIL (India) Limited relating to Train 4 of the SPL Project.

36CHENIERE


EXECUTIVE SUMMARY

The development and construction of the SPL and CCL Projects advanced as planned and remained ahead of schedule in 2016.2018. As we continue to develop these projects and increase LNG production, Cheniere will complete its transition into an LNG operator with expected stable and growing positive cash flow underpinned by long-term SPAs with investment grade energy and commodity companies worldwide.

Board The below graphs show our historical revenue growth and Executive Officer Changesgrowth in produced and other Organizational Developments

In Mayexported volumes from 2016 the Board appointed Jack A. Fusco to serve as President and CEO, and in June 2016, the Board appointed Mr. Fusco as a member of the Board. In connection with the appointment of Mr. Fusco as President and CEO, Neal A. Shear, who had been serving as Interim CEO and President, was appointed Interim Special Advisor to the CEO through November 12, 2016. In September 2016, the Company announced its new “executive officers” (as defined by Rule3b-7 of the Exchange Act), as follows:2018:

 

NameLOGO  AgePosition

Jack A. Fusco

54Director, President and Chief Executive Officer

Michael J. Wortley

40Executive Vice President and Chief Financial Officer

Anatol Feygin

48Executive Vice President and Chief Commercial Officer

Ed Lehotsky

63Senior Vice President, Engineering and Construction

Doug Shanda

47Senior Vice President, Operations

Sean N. Markowitz

43General Counsel and Corporate SecretaryLOGO

As Cheniere transformscontinues its evolution from a development company into an LNG operator, it has a strategy intent on creatingwe intend to create and sustainingsustain shareholder value whileby continuing to explore more focusedleverage our significant competitive advantages to execute on our growth initiatives. Cheniere has established itself as a first mover in the domestic LNG export market, which provides us with advantages on multiple fronts, including project development, gas procurement, commercial and terminal operations and LNG origination, and is well positioned to becomebecoming a significant player in the global LNG market.

We believe that the excellent progressworld-class execution we have madedelivered in the development, construction and operation of our LNG facilities, and on the governance front is onesubsequent transformation of our financial results are some of the primary reasons our stock price has outperformed the S&P 500 Index by approximately 300% over the past five years ending December 31, 2016.15% in 2018.

Shareholder Outreach—Compensation

The Company has been involved in extensive discussionsproactively engages with shareholders during the past several years regarding compensation matters,as a matter of strategic priority, and the evolution of our compensation program design is a product of the Board’s responsiveness to shareholder input.

Ahead of our 20162018 Annual Meeting, members of our Board and management reached out to, and had extensive dialogue with, shareholders representing approximately 60%more than 50% of our outstanding common stock, through both in person and telephonic meetings.

At our 20162018 Annual Meeting, oursay-on-pay proposal received support from shareholders owning approximately 83%72% of the shares represented at the meeting and entitled to vote on the matter. Though this was aAlthough there has been significant increaseimprovement in support from ourthe results of the Company’ssay-on-pay results atvotes since 2016 as our 2015 Annual Meeting,total compensation philosophy has evolved incorporating shareholder feedback, the Board recognizes the need to continually engage with our shareholders and modifyconsider shareholder concerns with our compensation program and governance framework to address any significant shareholder concerns.framework.

Following our 20162018 Annual Meeting, wemembers of our Board and management engaged with shareholders holding in excess ofmore than 50% of the Company’sour outstanding common stock, as well as proxy advisory firms, and we intend to continue our shareholder outreach efforts going forward.

At the 2017 Special Meeting, our proposal relatedforward and to the issuance of awardsconsider shareholder concerns or recommendations with respect to 7.8 million shares of common stock available for issuance under the 2011 Plan was approved by approximately 85% of the shares present and entitled to vote on the matter. This approval facilitates the implementation of our new compensation program design described lateror practices.

In our shareholder engagement following the 2018 Annual Meeting, shareholders appreciated the Company’s significant strategic, operational and financial accomplishments in this CD&A.

Key Themes from Our Shareholder Outreach

Manya very competitive marketplace against rigorous performance targets and objectives, and for positive steps taken on compensation program design in response to shareholder feedback. Shareholders noted particular improvement in implementing a performance scorecard and a performance-based long term incentive plan. Shareholders encouraged the continued evolution of our shareholders have different methodologies and processes for evaluatingexecutive compensation programs. However, a number of common themes emerged about what shareholders would like to see in Cheniere’s compensation programs, including:

Request for common, conventional and consistent pay arrangements.Several of our shareholders expressed a desire for the Company to put in placepractices, focused on a more customaryconventional compensation program thanwhich appropriately incentivizes management, in prior years, particularlyline with respect to the amount of long-term incentive equity awards granted to the CEO.

Request for objective metrics for annual bonus plan.Many of our shareholders expressed an interest in the Company having morepre-established, objective bonus criteria to measure performance against various metrics.

Request forat-risk performance criteria in long-term incentiveappropriate peer group, with enhanced disclosure on compensation committee discretion and milestone awards.Many of our shareholders expressed an interest in the Company including measurable performance criteria as an element of the Company’s long-term incentive plan.

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement 29
2019 PROXY STATEMENT

37


These meetings with our shareholders were immensely valuableCOMPENSATION DISCUSSION AND ANALYSIS

The Board has demonstrated its commitment to the Board and management, and we have acted on many of the compensation changes discussed at these meetings. The specific changes to oura compensation program design that further align it tois aligned with our business strategy and shareholders’ interests are detailed in this CD&A.our shareholders. The process is ongoing, and we will continue to incorporate shareholder outreach as a standard business practice in the future. We are committed to maintaining an open dialogue with our shareholders to ensure the successful evolution of our executiveCompany has significantly evolved its compensation program going forward.in recent years, taking into consideration input and feedback from shareholders. Our new program contemplates awarding compensation within the designed framework of the approved plan, rather than featuringad-hoc grants that can lead to significant variation in year over year compensation. We believe these changes align our program with competitive ranges in our new peer group and take into account the shareholder feedback that we have received.

Actions Taken as a Result of Shareholder Outreach

Management, the Board and the Compensation Committee initiated several changes stemming from the recent shareholder engagement discussions and the Company’s shareholder voting history regarding compensation:

 

LOGO

Action TakenDescription

Implemented a more consistent, competitive and conventional total compensation philosophy

ACTION TAKEN

 

• In 2016, Chenierere-evaluated its prevailing compensation philosophy and programs, with the intent to transition the programs to a more consistent, competitive, and conventional structure. Beginning in 2017, the compensation programs feature:

• Market-competitive base compensation opportunities tied to Company and individual performance

• Annual cash bonus incentive compensation tied to specific financial, operating, construction, safety and strategic performance objectives

• Annual long-term incentive opportunities with portions tied to specific financial performance and growth objectives

• Equity-based compensation that delivers annual, market-competitive opportunities within common norms of shareholder dilution and required value creation

• At the end of 2016, Cheniere replaced the Company’s 2008 Change of Control Cash Payment Plan and individual Change of Control Agreements with new, market-competitive plans that provide balanced and equitable terms and provisionsDESCRIPTION

 

Implemented a performance scorecard to determine 2017 annual cash bonusesTerminated the

Cheniere Energy, Inc.

2014-2018

Long-Term Cash

 

• In February 2017,On October 31, 2016, the Board terminated the 2014-2018 Long-Term Cash Incentive Program (the “2014-2018 LTIP”) in order to implement a new long-term incentive award program beginning in 2017.

Implemented a

performance scorecard

to determine annual

cash bonuses

In December 2016, the Compensation Committee approved a performance scorecard settingfor the 2017 fiscal year that ties individual bonus targets based onto competitive benchmarks. The scorecard provides that 80% of the bonus opportunity will be determined based on quantitative performance measures using multiple financial, operating, construction, safety and strategic performance measures, and 20% will be determined based on achievement of strategic goals and organizational accomplishments.

 

Terminated the Cheniere Energy, Inc.2014-2018 Long-Term  Replaced prior change of control planCash Incentive Program

and implemented a new annual long-term incentive program that  includes measurable performance criteriaagreements

 

• On October 31,At the end of 2016, Cheniere replaced the Board terminated the 2014-2018 Long-TermCompany’s 2008 Change of Control Cash Incentive Program (the “2014-2018 LTIP”) in order to implement aPayment Plan and individual Change of Control Agreements with new, long-term incentive awardmarket-competitive plans that provide balanced and equitable terms and provisions.

Approved new LTI program beginning in 2017.

• In February 2017, the Compensation Committee recommended and the Board approved the parameters of an annual long-term incentive plan (the “LTI program”) that will featurefeatures annual equity grants to all employees with multi-year vesting. Cheniere’s LTI program will alignaligns our NEOs’ interests with the interests of shareholders by rewarding long-term value creation and will incentivizeincentivizes management with long-term performance goals tied to multi-year financial and growth objectives as we continue to complete our transition from a development-focused company to an LNG operator.

• In addition, in February 2017, the Compensation Committee recommended and the Board approved awards for 2017 under the LTI program (the “2017 LTI Awards”).objectives.

 

Adopted new peer group reflecting continued evolution of business

In light of our achievements in 2018 and our transformation into an LNG operating company of considerable size relative to our peers in the LNG industry, we reevaluated our peer group for 2019 to reflect a more appropriate risk profile, capital intensity, enterprise valuation, commercial focus and global scope.

Enhanced disclosure for

ad-hoc long-term incentive awards

Provided additional discussion of the rationale behind the Train 3 Milestone Awards and the February 2018 Special Retention Awards. See pages 47-48 of this Proxy Statement.

2016

38CHENIERE


EXECUTIVE SUMMARY

As a result of these actions, the Company has implemented a more consistent, competitive and Future Compensation Designconventional total compensation philosophy.

Shareholder engagement is critical to the Board and management, and we have acted on many of the compensation changes discussed at these meetings. We will continue to evaluate our compensation programs and incorporate shareholder outreach as a standard business practice in the future. We are committed to maintaining an open dialogue with our shareholders to ensure the successful evolution of our executive compensation program going forward.

2018 AND FUTURE COMPENSATION DESIGN

 

As we continue to transitionour evolution from a development company intoto an LNG operator, the Compensation Committee is focused on evaluating the components of our executive compensation program and ensuring that we continue to implement a performance-based compensation structure that is strongly aligned with the interests of our shareholders and incentivizes management withto achieve long-term performance goals.

In 2016, Chenierere-evaluated its prevailingOur compensation philosophy and programs, with the intent to transition the programs to a more consistent, competitive, and conventional structure. Beginning in 2017, the compensation programs feature:program features:

 

Market-competitive base compensation opportunities tied to Company and individual performance

 

30Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Annual cash bonus incentive compensation opportunities tied to specific financial, operating, construction, safety and strategic performance objectives

 

Annual long-term incentive opportunities with portions tied to specific financial performance and growth objectives

 

Equity-based compensation that delivers annual, market-competitive opportunities within common norms of shareholder dilution and required value creation

The Compensation Committee approved this new framework with input from Meridian Compensation Partners, its independent compensation consultant. As a result of our growth from a development company into a top tier LNG operator and receipt of shareholder feedback, the Compensation Committee, together with Meridian, has further refined the framework of our executive compensation program for 2019. Our achievements and success over the past several years led to a realignment with a new peer group for 2019 discussed under “Peer Group and Benchmarking” below, and we have reassessed our compensation framework to be consistent with our new peer group and more closely align with our share price performance. Our new program contemplates awarding compensation within the designed framework of the approved program, rather than featuringad-hoc grants that can lead to significant variation in year over year compensation. We believe these changes align our program with competitive ranges in our new peer group and take into account the shareholder feedback that we have received. The Compensation Committee continuesbelieves that the pool of talent with the set of skills needed to evaluate further refinementrun a first mover LNG company with a global scope is quite limited and that, accordingly, the market for executive talent to the compensation programs.lead Cheniere is highly competitive.

In 2016,2018, direct compensation was comprised of the following components:

 

Base SalarySalary;

 

Annual Cash BonusIncentive Award; and

 

Long-Term Incentive AwardsAwards.

2019 PROXY STATEMENT39


COMPENSATION DISCUSSION AND ANALYSIS

The following pie charts illustrate the pay mix of our CEO and the average pay mix of our other NEOs for 2018 assuming target performance.

LOGO

LOGO

*

Pay Mix does not add to 100% due to rounding.

**

Excludes ad-hoc awards that are not components of our LTI program.

Base Salary

The Compensation Committee referenced the mediancompetitive ranges of the marketbase salary across midstream natural gas companies and companies of comparable enterprise value in determining the 20162018 base salaries for our NEOs who were employed by the Company in 2015. See “Peer Group and Benchmarking” on page 45 of this Proxy Statement for details regarding the external market data referenced by the Compensation Committee in making decisions regarding 2016 base salaries and other compensation elements.NEOs. Our employment agreement with Mr. Fusco provides for an annual base salary of $1,250,000, subject to increase at the discretion of the Compensation Committee.

Annual Cash Bonus

For 2016, In reviewing our NEOs’ annual cash bonuses were based on a subjective review and consideration of achievements related to our key milestones and spanned five strategic areas: (1) financial; (2) construction; (3) operational; (4) organizational; and (5) commercial. In December 2016,new peer group for 2019, the Compensation Committee approved the payment of individual NEO bonusesrecommended an increase in Mr. Fusco’s base salary to $1,500,000 for 2016 that were above the target annual bonuses. These bonus payouts primarily resulted from the achievements of key development milestones, operating efficiencies2019, as well as appropriate increases for our other NEOs. See “Peer Group and the successful completion of important company transitions. See “Annual Incentive Program”Benchmarking” on page 3452 of this Proxy Statement for additional details regarding the 2016 bonuses, including our achievementsexternal market data referenced by the Compensation Committee in these strategic areas.making decisions regarding base salaries and other compensation elements.

Annual Incentive Award

Beginning in 2017, the Compensation Committee has implemented a scorecard approach to determine annual cash bonuses, which will be 100% performance-based.bonuses. The scorecard provides that 80% of the bonus opportunity will be determined based on quantitative performance measures using multiple financial, operating, construction, safety and strategic performance measures, and 20% will be determined based upon achievement of strategic goals and organizational accomplishments.

The following key features are included in the scorecard:

- Individual bonus targets based on competitive benchmarks

- Quantitative performance goals: financial, operating, construction, safety and strategic

- Limited qualitative component based on identified strategic goals and organizational accomplishments

Retention Bonus

On August 12, 2013, Mr. Shanda received a retention award that provides for an annual cash bonus payment of 25% of his base salary through 2019 and 50% of his base salary in 2020.

Long-Term Incentive Awards

2016 Results under the 2014-2018 LTIP

In 2016, we did not meet our annual total shareholder return hurdle under the 2014-2018 LTIP for the 2016 performance period which began November 1, 2015 and ended October 31, 2016. As such, no phantom units were awarded for the 2016 performance period.

On October 31, 2016, the Board terminated the 2014-2018 LTIP in order to implement a new long-term incentive award program that better incentivizes management with long-term performance goals as we transition from a development-focused company to an LNG operator.

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement31


2016 Phantom Unit Awards

In connection with the promotions announced as part of our new leadership team, the Compensation Committee recommended and the Board approved phantom unit awards for several of our NEOs. Specifically, awards of 25,000 phantom units were granted to each of Messrs. Wortley, Feygin, Lehotsky and Shanda. The phantom units were granted on October 1, 2016 and vest in two equal installments on the first and second anniversary of the grant date subject to continued employment and will be settled in cash.

Components of the LTI Program Beginning in 2017

The Compensation Committee believes that the new long-term incentive program that it implemented in 2017, which provides for annual equity-based awards, is a required and critical element of the Company’s new compensation philosophy and strategy. Equity grants align our NEOs’ interests with the interests of shareholders by rewarding long-term value creation. These grants enable us to attract and retain highly qualified individuals for important positions throughout the Company.

The Compensation Committee has implemented the following key attributes in its new annual long-term incentive program beginning in 2017:

• Grants to be made on an annual basis with a minimum of a1-year vesting period

• Grants to consist of a mix of at least 50% Performance Share Units (“PSUs”) for executive officers with the remainder being Restricted Stock Units (“RSUs”)

• PSUs:3-year cliff vesting, subject to performance and continued service except in certain circumstances (performance-based)

• RSUs:3-year ratable vesting, subject to continued service except in certain circumstances (time vested)

• PSUs to include one or more performance metrics, with the actual number of shares earned to be between 50% and 200% of the target number if the threshold performance is met, providing for a more customary cap on payouts

• PSUs will vest upon certification by the Compensation Committee of the level of achievement of the performance condition during the performance period

• Grants will be settled in Cheniere shares

• Equity award grants to executives will include clawback provisions

Train 3 Milestone Awards

In addition, in 2017 the Compensation Committee approved an additional compensation component intended to motivate and reward the timely achievement of significant growth milestones as further described under “Long-Term Incentive Program (LTIP)–Train 3 Milestone Awards” below. The Compensation Committee believes that the achievement of such milestones on schedule are critical to Cheniere’s strategic plan and would result in the creation of significant additional value for shareholders.

Compensatory Arrangements

In connection with the appointment of Mr. Shear as Interim CEO and President, the Company and Mr. Shear entered into a letter agreement dated December 18, 2015 which included the terms of his arrangement. Mr. Shear’s compensation structure was generally similar to our executive compensation program. Please see “Compensatory Arrangement with Former Interim CEO and President” on page 40 of this Proxy Statement.

In connection with the appointment of Jack A. Fusco as President and CEO, the Company and Mr. Fusco entered into an employment agreement dated as of May 12, 2016. Mr. Fusco’s compensation structure is generally in line with our executive compensation program. Please see “Compensatory Arrangement with President and CEO” on page 40 of this Proxy Statement.

Compensation Governance Practices

The Board and the Compensation Committee are committed to implementing best practice compensation governance practices that further strengthen the alignment of our compensation program with our shareholders’ interests, which include the following:

Clear, direct link between pay and performance

Primarily performance-based incentive awards

No hedging or “short sales” of Company stock

32Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


No pledging of Company stock as collateral for a loan or holding Company stock in margin accounts

Robust stock ownership guidelines

No defined benefit retirement plan or supplemental executive retirement plan

Robust compensation risk management program

Executive Compensation Philosophy & Objectives

Philosophy and Objectives

In late 2016, the Board and Compensation Committee committed to transition compensation programs under a more consistent, competitive, and conventional total compensation philosophy, including equity-based long-term incentive opportunities tied to financial and growth objectives. The Board and the Compensation Committee remain committed to apay-for-performance compensation structure that aligns our executive compensation with the key drivers of long-term growth and creation of shareholder value. Our executive compensation programs and objectives are designed to ensure we attract, retain and motivate executives with the talent and experience necessary for us to achieve our strategic business plan.

As the first mover in our industry, we face fierce competition for our executive officers and key employees throughout the organization, and we seek to hire the highest caliber executives available in the global LNG marketplace.

Annual and long-term incentive awards are primarily performance-based. We believe such an incentive structure creates appropriate motivation for our executive officers and aligns their compensation with the performance of our Company and value created for shareholders. We will continue to balance our long-term incentive program to address performance accountability, long-term stock ownership and talent retention issues in the current environment.

Annual cash bonus incentive metrics are tied to specific financial, operating, construction, safety and strategic goals. We believe close alignment between our compensation goals and our business strategy is critical to driving performance to be measured against our key milestones and metrics.

Significant long-term compensation is linked to financial performance and growth metrics. We believe our executive officers’ compensation should be tightly linked to the creation of value for our shareholders over the long run. As such, the majority of their compensation is and should be at risk and directly tied to corporate outperformance over longer time horizons.

Components of Our Executive Compensation Program

Base Salary

Base salaries provide the fixed compensation necessary to attract and retain key executives. The base salaries of our NEOs are designed to be comparable to positions in the marketplace from which we recruit executive talent. The Compensation Committee referenced the median of the market in determining the 2016 base salaries of our NEOs who were employed by the Company in 2015.

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement33


In December 2016, the Compensation Committee reviewed the base salaries of our NEOs, and the Compensation Committee recommended and the Board approved changes in the annual base salaries of our NEOs, effective January 9, 2017. The following table provides the base salaries for 2016 and 2017 of our NEOs.

2016 and 2017 Base Salaries 
        

2017 Annual

Base Salary

  

2016 Annual

Base Salary

 

 Jack A. Fusco

  Director, President and Chief Executive Officer  $1,250,000  $1,250,000(1) 

 Neal A. Shear

  Director, Former Interim Chief Executive Officer and President  $(1)  $1,000,000(1) 

 Michael J. Wortley

  Executive Vice President and Chief Financial Officer  $600,000(2)  $562,380 

 Anatol Feygin

  Executive Vice President and Chief Commercial Officer  $500,000(3)  $482,040 

 Ed Lehotsky

  Senior Vice President, Engineering and Construction  $450,000(4)  $385,000 

 Doug Shanda

  Senior Vice President, Operations  $450,000(5)  $385,000 

 Meg A. Gentle

  Former Executive Vice President—Marketing  $(6)  $626,652(6) 

(1)Mr. Fusco was appointed President and CEO effective May 12, 2016, replacing Mr. Shear.

(2)On September 19, 2016, Mr. Wortley was promoted from Senior Vice President and Chief Financial Officer to Executive Vice President and Chief Financial Officer.

(3)On September 19, 2016, Mr. Feygin was promoted from Senior Vice President, Strategy and Corporate Development to Executive Vice President and Chief Commercial Officer.

(4)On September 19, 2016, Mr. Lehotsky was promoted to Senior Vice President, Engineering and Construction.

(5)On September 19, 2016, Mr. Shanda was promoted to Senior Vice President, Operations.

(6)On August 26, 2016, Ms. Gentle ceased to be employed by the Company.

Annual Incentive Program

In December 2016, the Compensation Committee reviewed achievements related to our key milestones spanning five strategic areas: (1) financial; (2) construction; (3) operations; (4) organizational; and (5) commercial, to determine annual incentive program funding and awards, including the following items highlighted below:

Strategic AreaKey Accomplishments

 Operational

• Sabine Pass Train 1 production reliability and efficiency above target

• Successfully completed the first major outage for the Sabine Pass liquefaction facility

 Construction

• Sabine Pass Trains 1 and 2 achieved substantial completion 3 months and 12 months ahead of contractual guaranteed schedule (respectively)

• Successful performance tests of production capacity for Sabine Pass Trains 1 and 2

• East Meter Pipe Project was completed on schedule to receive gas from Transcontinental Gas Pipeline Corporation by Q1 2017

• Commissioned Sabine Pass Trains 1 and 2

• Commenced commissioning activities on Sabine Pass Train 3

 Financial

Strengthened Balance Sheet

• Refinanced Sabine Pass LNG, L.P.’s (“SPLNG”) bonds, raising $2.8 billion credit facility at Cheniere Energy Partners, L.P. to take out all SPLNG and Cheniere Creole Trail Pipeline, L.P. debt plus a $115 million revolver

• Continued to refinance the Sabine Pass Liquefaction, LLC (“SPL”) credit facility, issuing $1.5 billion of SPL bonds in June 2016 and another $1.5 billion in September 2016 to push out maturity to 2026 and 2027

• Structured an indenture for Cheniere Corpus Christi Holdings, LLC (“CCH”) and issued an inaugural $1.25 billion of bonds in May 2016 to begin to refinance the CCH credit facility and issued $1.5 billion of CCH bonds in December 2016

• Improved credit ratings across Cheniere complex: S&P upgraded Cheniere from B+ toBB- and SPL from BB+ toBBB-; Moody’s upgraded SPL from Ba3 to Ba2 and SPLNG from B1 to Ba2

34Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Strategic AreaKey Accomplishments

Budget Management

• Beganzero-based budgeting process to emphasize cost efficiency

Reporting

• Commenced first-ever quarterly earnings call for Cheniere

• Closed financial books on time, with minimal adjustments to financial statements

 Organizational

• Successful leadership transition with significant organizational alignment complete, specifically in commercial, asset, finance, environmental, health and safety and human resources, resulting in significant annual savings

• Introduced vision, mission and values to establish organization-wide principles

• Stabilized organization and aggressive recruitment effort to fill key positions and manage retention

• Initiated a behavior-based safety program to support building and maturing of the safety culture; formed the Executive Safety Committee

• Realigned environmental, health, and safety organization to improve operational compliance for regulatory and permitting

• Launched enterprise-wide supply chain management initiative

• Redesigned compensation philosophy to a more traditional structure supporting company transition from a development company to operations

 Commercial

• Integrated commercial function as integral part of Cheniere

• Supplied Sabine Pass during startup period under budget

• Monetized commissioning cargoes and optimized excess cargoes

• Completed comprehensive realignment of commercial function to integrate supply, marketing, and commercial operations

The Compensation Committee discussed with management its performance related to the financial, construction, operations, organizational and commercial strategic areas. As a result of our performance amidst a challenging macroeconomic environment, in December 2016, the Compensation Committee recommended and the Board determined the Company had exceeded performance expectations, and it approved paying annual cash bonuses above the target payout for our NEOs. The following annual cash bonuses under our Annual Cash Bonus Plan were approved for 2016 for our NEOs.

NEOs Annual Cash Bonuses for 2016

 

Jack A. Fusco

  Director, President and Chief Executive Officer $2,303,938 

Neal A. Shear

  Director, Former Interim Chief Executive Officer and President $(1) 

Michael J. Wortley

  Executive Vice President and Chief Financial Officer $1,000,000 

Anatol Feygin

  Executive Vice President and Chief Commercial Officer $700,000 

Ed Lehotsky

  Senior Vice President, Engineering and Construction $525,000 

Doug Shanda

  Senior Vice President, Operations $525,000 

Meg A. Gentle

  Former Executive Vice President–Marketing $(2) 
(1)Mr. Shear ceased serving as Interim CEO and President in May 2016 and as Interim Special Advisor to the CEO on November 12, 2016 and did not receive a 2016 annual cash bonus. Mr. Shear received a bonus of $1,500,000 on June 15, 2016 in connection with his role as Interim CEO and President.

(2)Ms. Gentle ceased to be employed by the Company in August 2016 and did not receive a 2016 annual cash bonus.

Retention Bonus

On August 12, 2013, Mr. Shanda received a retention award that provides for an annual cash bonus payment of 25% of his base salary through 2019 and 50% of his base salary in 2020.

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement35


2017 Bonus Program Design

Beginning in 2017, the Compensation Committee has implemented a scorecard approach to determine annual cash bonuses, which will be 100% performance-based. The2018 scorecard provides that 80% of the bonus opportunity will be determined based on quantitative performance measures using multiple financial, operating, construction, safety and strategic performance measures, and 20% will be determined based upon achievement of strategic goals and organizational accomplishments.

The following key features are included in the scorecard:

 

Individual bonus targets based on competitive benchmarks;

Quantitative performance goals in the following areas of performance: financial, operating, construction, safety and strategic; and

Limited qualitative component based on identified strategic goals and organizational accomplishments.

In February 2019, the Compensation Committee approved the payment of individual NEO bonuses for 2018. See “Annual Incentive Program” on page 43 of this Proxy Statement for additional details regarding the 2018 bonuses, including our performance relative to our quantitative performance measures and our achievement of strategic goals and organizational accomplishments.

Long-Term Incentive Awards

Components of the LTI Program

The Compensation Committee believes that the LTI program that was implemented in 2017, which provides for annual equity-based awards, is a critical element of the Company’s new compensation philosophy and strategy. Equity grants align our NEOs’ interests with the interests of shareholders by rewarding long-term value creation and enable us to attract and retain highly qualified individuals for important positions throughout the Company. In 2019, we revised our metrics under our LTI program for NEOs to introduce an additional metric, total shareholder return, in order to further align our LTI opportunities with our shareholders and reflect the practices of our new peer group.

-Individual bonus targets based
40CHENIERE


EXECUTIVE SUMMARY

The key attributes of our NEO LTI program include:

  Grants will be made on competitive benchmarksan annual basis and vest over a 3-year period

  Grants will consist of a mix of at least 50% Performance Share Units (“PSUs”) for executive officers with the remainder consisting of Restricted Stock Units (“RSUs”)

   PSUs:3-year cliff vesting, subject to performance and continued service except in certain circumstances (performance and service-based)

   RSUs:3-year ratable vesting, subject to continued service except in certain circumstances (service-based)

  PSUs will include one or more performance metrics, with the actual number of shares earned to be between 25% and 300% for NEOs if threshold performance is met, providing for a cap on payouts

   PSUs will vest upon certification by the Compensation Committee of the level of achievement of the performance conditions during the performance period

  Grants will be settled in Cheniere shares

  Equity award grants to executives will include clawback provisions

Train 3 Milestone Awards

In addition, in 2017 the Compensation Committee approved an additional performance-based compensation component intended to motivate and reward the timely achievement of significant growth milestones as further described under “Long-term Incentive Awards—Train 3 Milestone Awards” on page 47 of this Proxy Statement. These awards were approved and granted by the Board in May 2018. The Compensation Committee believes that the timely achievement of such milestones is critical to Cheniere’s strategic plan and results in the creation of significant additional value for shareholders.

February 2018 Special Retention Award

In addition, in February 2018, the Compensation Committee approved an additional long-term incentive award for the NEOs other than the CEO (the “Special Retention Award”) intended to reward the demonstrated success of our leadership team and their expertise in a relatively rare but quickly growing industry as further described under “Long-term Incentive Awards—February 2018 Special Retention Award” on page 48 of this Proxy Statement. The Compensation Committee believes that retention of these executives in the face of fierce competition from new entrants to the LNG market is integral to the continued success of Cheniere.

COMPENSATION GOVERNANCE PRACTICES

The Board and the Compensation Committee are committed to implementing compensation governance best practices that further strengthen the alignment of our compensation program with our shareholders’ interests, which include the following:

Clear, direct link between pay and performance

Majority of incentive awards earned based on performance

No hedging or “short sales” of Company stock

No pledging of Company stock as collateral for a loan or holding Company stock in margin accounts

Robust stock ownership guidelines

No defined benefit retirement plan or supplemental executive retirement plan

Robust compensation risk management program

2019 PROXY STATEMENT41


COMPENSATION DISCUSSION AND ANALYSIS

EXECUTIVE COMPENSATION PHILOSOPHY & OBJECTIVES

PHILOSOPHY AND OBJECTIVES

We are committed to maintaining a compensation philosophy that is consistent, competitive and conventional when reviewed against our peers. The Board and the Compensation Committee remain committed to apay-for-performance compensation structure that aligns our executive compensation with the key drivers of long-term growth and creation of shareholder value. Our executive compensation programs and objectives are designed to ensure that we attract, retain and motivate executives with the talent and experience necessary for us to achieve our strategic business plan, while still remaining commensurate with our peers.

As the first mover in our industry, we face fierce competition for our executive officers and key employees throughout the organization, and we seek to hire the highest caliber executives available in the global LNG marketplace.

Annual and long-term incentive awards are primarily performance-based. We believe such an incentive structure creates appropriate motivation for our executive officers and aligns their compensation with the performance of our Company and value created for shareholders. We will continue to balance our LTI program to address performance accountability, long-term stock ownership and talent retention issues in the current environment.

Annual cash bonus incentive metrics are tied to specific financial, operating, safety and strategic goals. We believe close alignment between our compensation goals and our business strategy is critical to driving performance to be measured against our key milestones and metrics.

Significant long-term compensation is linked to financial performance and growth metrics. We believe our executive officers’ compensation should be closely linked to the creation of value for our shareholders over the long run. As such, the majority of their compensation is and should be at risk and directly tied to corporate outperformance over longer time horizons.

COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

BASE SALARY

Base salaries provide the fixed compensation necessary to attract and retain key executives. The base salaries of our NEOs are designed to be comparable to positions in the marketplace from which we recruit executive talent. The Compensation Committee referenced competitive ranges of base salary across midstream natural gas companies and companies of comparable enterprise value in determining 2018 base salaries for our NEOs.

In February 2019, in light of our growth and new peer group determination, the Compensation Committee reviewed the base salaries of our NEOs and recommended and the Board approved changes in the annual base salaries of our NEOs, effective March 4, 2019. The following table provides the base salaries for 2018 and 2019 of our NEOs.

2018 and 2019 Base Salaries

 

 
      

2018 ANNUAL

BASE SALARY

   

2019 ANNUAL

BASE SALARY

 

Jack A. Fusco

  Director, President and Chief Executive Officer  $1,250,000   $1,500,000 

Michael J. Wortley

  Executive Vice President and Chief Financial Officer  $630,000   $715,000 

Anatol Feygin

  Executive Vice President and Chief Commercial Officer  $515,000   $640,000 

Sean N. Markowitz

  General Counsel and Corporate Secretary  $475,000   $524,300 

Douglas D. Shanda

  Senior Vice President, Operations  $475,000   $524,300 

42CHENIERE


COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

ANNUAL INCENTIVE PROGRAM

Annual Incentive Award

As discussed above, the Board and the Compensation Committee are committed to apay-for-performance compensation structure that aligns our executive compensation with the key drivers of long-term growth and creation of shareholder value. We believe that close alignment between our compensation goals and our business strategy is critical to driving performance to be measured against our key milestones and metrics. Consistent with our compensation philosophy and in response to feedback from our shareholders, beginning in 2017, the Compensation Committee implemented a scorecard approach to determining annual cash bonuses. The 2018 scorecard provided that 80% of the bonus opportunity was determined based on quantitative performance measures using multiple financial, operating, construction, safety and strategic performance measures, and 20% was determined based upon achievement of strategic goals and organizational accomplishments, as shown below:

QUANTITATIVE METRICS (80% WEIGHTING)

METRIC

  

THRESHOLD

(50% OF

TARGET)

 TARGET 

STRETCH

(200% OF

TARGET)

 WEIGHTING 2018 ACTUAL %
ACHIEVEMENT

Adjusted EBITDA ($ millions)1

  $2,000 $2,200 $2,400 35% $2,641 200%

Budget Management:

       

  Adjusted SG&A Expense ($ millions)

  $232 $221 $210 10% $212 182%

  Forecasting Accuracy (%)

  Within ± 20% Within ± 10% Within ± 5% 10% 8% 138%

Safety:

       

  Cheniere (TRIR & LTIR)2

  1.20 / 0.57 0.85 / 0.44 0.55 / 0.19 10% 0.31 / 0.01 200%

Operational Effectiveness:

       

  SPL Production (TBtu)

  865 895 938 10% 948 200%

  SPL Availability Index3

  0.95 1.00 1.05 5% 1.06 200%

  Adjusted O&M Expense ($ millions)

  $617 $574 $545 5% $530 200%

Construction Management:

       

  SPL Project

 

  CCL Project

  Both
projects on
track to
meet the
guaranteed
schedule
 One
project
within 2%
of 99%
completion
 Both
projects
within 2%
of 99%
completion
 15% 100%

 

97%

 200%

Weighted Average

   100%  192%

STRATEGIC METRICS (20% WEIGHTING)

Development of executable plan for next stage of growth

 

Compliance with all applicable laws and regulations

 

Manage CMI cargoes for 2019 & 2020 supply to stabilize cash flows during forecast supply surge

 

Average

   150%

Total Weighted Average

   184%

1

For a definition of Adjusted EBITDA and a reconciliation of thisnon-GAAP measure to net income, the most directly comparable GAAP financial measure, please see Appendix C.

 

-2Quantitative performance goals: financial, operating, construction, safety

“TRIR” is the “Total Recordable Incident Rate,” which is calculated as the number of recordable injuriesmultiplied by 200,000 and strategicthendivided by the number of hours worked. “LTIR” is the “Lost Time Incident Rate,” which is calculated as the number of lost time incidentsmultiplied by 200,000 and thendivided by the number of hours worked.

 

-3Limited discretion, linked to identified strategic goals

SPL Availability Index is a measure of LNG production capacity less losses associated with planned and organizational accomplishmentsunplanned downtime.

Performance Goals.The Compensation Committee determined to include metrics in each area of the Company’s performance shown above (financial achievement, budget management, safety, operational effectiveness, construction management and strategic objectives) because the Compensation Committee believes that each of those areas is a key driver of the Company’s annual performance and, ultimately, long-term success.

For the quantitative metrics for 2018, the Compensation Committee set the target performance goals in February 2018. The Company set the target for Adjusted EBITDA to align with the base case forecast and selected the threshold and stretch goals by

 

-Payment of any awards under the program will be subject to an initial earnings-based funding threshold
2019 PROXY STATEMENT43

Long-Term Incentive Program


COMPENSATION DISCUSSION AND ANALYSIS

 

Long-termprimarily adjusting for LNG production, management of costs related to budget and the market price of LNG. The Company set the target for budget management to meet the approved budget for 2018. For each category in the safety performance goals, the TRIR and LTIR threshold, target and stretch goals were chosen based on the Bureau of Labor Statistics 2014 and 2015 values of our NAICS categories and equate to the 3rd quartile, mean and median, respectively. The Company set the target for operational effectiveness based on the expected aggregate nominal production capacity increased by overdesign and decreased by planned and unplanned maintenance and other operational factors for production. For the construction management performance goal, the target completion percentages for Train 5 of the SPL Project and Trains 1 and 2 of the CCL Project were set based on Bechtel’s projected completion percentages at the time the scorecard was approved.

The strategic metrics were selected to emphasize our commitment to a culture of compliance with laws and regulations while developing an executable plan for our next stage of growth and for managing CMI cargoes for 2019 and 2020 supply in order to stabilize cash flows during forecasted supply surges.

Target Incentive ProgramOpportunities.In December 2016, the Compensation Committee established target annual incentive opportunities for each of our NEOs, which are reflected in the table below. Mr. Fusco’s target annual incentive was established in accordance with the terms of his employment agreement, which is described in more detail under “Compensatory Arrangements.” For the other NEOs, the targets were set based on a review of competitive market data and internal equity considerations.

Process for Measuring Performance.Performance below the “threshold” level results in no payout earned for the applicable performance goal. If performance falls between the “threshold” and “target” or “target” and “stretch” levels, then the achievement level under the scorecard is determined using straight line interpolation. Once the achievement level under the scorecard is calculated based on actual performance as compared to the goals set forth above, the Compensation Committee has the discretion to reduce or increase the payouts to the extent it determined appropriate to reflect each NEO’s performance during the year.

Actual

payout

=Base
salary
xTarget bonus
(%)
xPerformance score
(%)
+/-

Individual performance adjustment

(if any)

2018 Performance Results.The scorecard table above shows the level of achievement in 2018 for each of the performance goals and the resulting weighted percentage of target that was earned as a result of 2018 performance. The scorecard reflects the Company’s strong performance in 2018, achieving above the target level in nearly all of the quantitative measures of performance and resulting in a weighted average for the quantitative metrics of 192% of target. For the strategic metrics, the Compensation Committee determined that the Company demonstrated exceptional development of an executable plan for our next stage growth. In addition, the Company met expectations regarding compliance in all segments of the Company’s operations and exceeded expectations regarding management of CMI cargoes for 2019 and 2020 supply in order to stabilize cash flows during forecasted supply surges. These assessments earned an average of 150% of target for the strategic metrics as shown in the table above. Overall, the total weighted average under the scorecard was 184% of target.

Based in part on the recommendations of Mr. Fusco, the Compensation Committee approved and recommended to the Board for approval the final annual incentive award payouts for each of the NEOs other than Mr. Fusco. The Compensation Committee approved and recommended to the Board for approval the final annual incentive award payout to Mr. Fusco. In evaluating our NEOs’ performance during 2018, the Compensation Committee considered each NEO’s specific contribution to our Company’s key achievements, including those discussed under “Compensation Discussion and Analysis—2018 Performance and Developments” and towards achieving the quantitative and strategic measures in the scorecard.

In light of the Compensation Committee’s renewed focus on rewarding our NEOs for exceptional performance within the bounds of our stated compensation framework, withoutad-hoc awards or adjustments, the Compensation Committee did not increase the bonuses earned by NEOs in 2018 to above that recommended by our scorecard results. Based on 2018 Company and individual performance results, the Compensation Committee recommended and the Board approved annual incentive awards to the NEOs for 2018 as follows:

NEOs Annual Incentive Award for 2018

 

 
NAMED EXECUTIVE  TITLE  TARGET
ANNUAL
INCENTIVE
(% OF
BASE
SALARY)
  TARGET ANNUAL
INCENTIVE
   SCORECARD
DETERMINED
ANNUAL
INCENTIVE
(184% OF
TARGET)
   EARNED
ANNUAL
INCENTIVE
 

Jack A. Fusco

  Director, President and Chief Executive Officer   125 $1,562,500   $2,875,000   $2,875,000 

Michael J. Wortley

  Executive Vice President and Chief Financial Officer   90 $567,000   $1,043,280  $1,043,280 

Anatol Feygin

  Executive Vice President and Chief Commercial Officer   90 $463,500   $852,840   $852,840 

Sean N. Markowitz

  General Counsel and Corporate Secretary   80 $380,000   $699,200   $699,200 

Douglas D. Shanda

  Senior Vice President, Operations   80 $380,000   $699,200  $699,200 

44CHENIERE


COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

Retention Bonus

On August 12, 2013, Mr. Shanda received a retention award that provides for an annual cash bonus payment of 25% of his annual base salary through 2019 and 50% of his base salary in 2020.

LONG-TERM INCENTIVE AWARDS

LTI program awards accomplish several important objectives. Theyobjectives: (i) they motivate sustained performance against our long-term objectives; (ii) they align executives with shareholder interests; and (iii) they help retain employees who are in high demand elsewhere.

2014-2018 LTIPLTI Program

During 2014, prior to implementing the 2014-2018 LTIP, no long-term incentive awards were granted other than new hire award grants. The Compensation Committee and the Board used 2014 to solicit feedback from shareholders and designed the 2014-2018 LTIP to appropriately incentivize our executive officers while taking shareholder views into account.

2014-2018 LTIP Design

On April 21, 2015, the Board approved the 2014-2018 LTIP. The plan replaced a long-term incentive plan originally proposed by the Company in 2014 and reflected feedback we received from our shareholder outreach.

The 2014-2018 LTIP was 100% performance-based and was intended to reward long-term performance measured against growth in the Company’s market capitalization, referred to in the plan documents as total shareholder value (“TSV”).

The Compensation Committee viewed the 2014-2018 LTIP as a “bridge” program to attract, reward, and incentivize our executive officers and employees while we transitioned from a development-focused company to an LNG operator

Summary of Plan Design

For each performance period for the 2014-2018 LTIP, a senior executive pool and a general pool would be funded up to a certain percentage of the growth in TSV provided that certain performance hurdles were met. Each pool would then be converted into phantom units based on the average30-day stock price at the end of the performance period, which would be granted to our executive officers and employees. The 2014-2018 LTIP was administered by the Compensation Committee.

Performance Periods

The term of the 2014-2018 LTIP commenced November 1, 2013 and consisted of five consecutive annual performance periods ending October 31, 2018; however, as described below, the 2014-2018 LTIP was terminated as of October 31, 2016. Each performance period began on November 1 and ended on October 31.

Performance Hurdles

In each performance period for the 2014-2018 LTIP, the Company measured its annual total shareholder return (“TSR”) and annualized cumulative TSR since the beginning of the performance period.

A minimum annual TSR and annualized cumulative TSR performance hurdle of 8% had to be achieved each performance period for the pools to be funded. The maximum annual TSR and annualized cumulative TSR performance hurdles were set at 9%. The annual TSR and annualized cumulative TSR performance hurdles were set based on the expected average annual growth rate of similar companies in order to incentivize outperformance relative to the market. The definition of TSV Growth acted as a ‘high

36Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


water mark’ that ensured awards were not granted on the same appreciation repeatedly. In addition to the annual and cumulative performance hurdles mentioned above, this definition ensured the funding of the phantom unit pool for any annual performance period was based only on appreciation over the highest TSV achieved in any prior performance period for which awards were paid.

Maximum Compensation Caps

In order to respond to shareholder feedback about pay magnitude and concerns with incentive caps, the amount of the total senior executive pool potential was reduced, capped and was subject to downward adjustment at the discretion of the Compensation Committee.

The total percentages of growth in TSV that could be awarded were 2% of TSV growth for the senior executive pool and generally between 2% and 4% for the general pool. Our former CEO’s compensation was targeted at 50% of the senior executive pool. Additionally, the senior executive pool for each performance period was capped at an annual maximum amount equal to 1.5% of our common shares outstanding.

   Percentage of TSV Growth Awarded
TSR Performance Hurdle  Senior Executive Pool  General Pool

Annual TSR or Cumulative TSR < 8%

  0%  0%

Annual TSR and Cumulative TSR³ 8%, but at least one is < 9%

  adjusted below max  adjusted below max

Annual TSR and Cumulative TSR³ 9%

  2%  2% - 4%

Funding of Pool

For each performance period, the plan would fund an aggregate phantom unit pool allocable to plan participants, if applicable. Subject to the maximum caps described above, this pool would be denominated in a number of phantom units as follows:

Aggregate Phantom Unit Pool =

Percentage of TSV Growth Awarded x Applicable TSV Growth

30 calendar day average closing price of our shares

TSV Growth is the difference between the TSV for a performance period plus any TSV Growth carried over from a prior performance period as a result of the cap, if any, minus the highest TSV achieved in any prior performance period.

2016 Long-Term Performance Awards

For the third performance period that ended October 31, 2016, the TSV was $9,674,123,219 (equivalent to $41.20 per share), our Annualized Cumulative TSR growth was 5.0% and our Annual TSR was negative. Due to the fact that all of these performance hurdles were not met, there were no awards made in 2017 with respect to the second performance period.

2015 Long-Term Performance Awards

For the second performance period that ended October 31, 2015, the TSV was $11,591,367,296 (equivalent to $49.11 per share), our Annualized Cumulative TSR growth was 17.7% and our Annual TSR was negative. Due to the fact that all of these performance hurdles were not met, there were no awards made in 2016 with respect to the second performance period.

2014 Long-Term Performance Awards (granted in April 2015)

The initial TSV that was used to calculate the annualized cumulative TSR was $8,362,445,350. For the first performance period that ended October 31, 2014 the TSV was $16,881,586,848 (equivalent to $71.29 per share). Thus, the annual and annualized cumulative TSRs in the first performance period were 101.9%. Based on our TSR of 101.9% and TSV Growth of $8.519 billion for the first performance period, the Compensation Committee recommended and the Board approved awards of 170,000 and 130,000 phantom units to Messrs. Wortley and Feygin, respectively, and 200,000 phantom units to Ms. Gentle.

The phantom units were granted on April 21, 2015, and vest in three installments, withone-third of the phantom units having vested and been paid on each of February 1, 2016 and February 1, 2017 and the remainingone-third vesting and becoming payable on February 1, 2018.

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement37


Vesting Schedule

For the awards granted for the 2014 performance period,one-third of the phantom units vested and became payable on February 1, 2016;one-third vested and became payable on February 1, 2017, and the remainingone-third will vest and become payableon February 1, 2018. No phantom units were granted under the 2014-2018 LTIP in 2016 or 2017 with respect to the 2015 and 2016 performance periods, respectively, since the performance threshold was not achieved.

Except as described below, plan participants will forfeit any unvested phantom units if the participant’s employment with the Company terminates for any reason prior to the applicable vesting dates. Any unvested phantom units will immediately vest and be payable to participants if: (i) the Company terminates the participant’s employment without Cause or, in the case of executive officers, the executive officer terminates his or her employment with Good Reason; (ii) the participant dies or incurs a disability before such awards are fully vested; (iii) except in the case of a participant in the United Kingdom, the participant retires after age 65; or (iv) a Change of Control occurs. Please see “Narrative to the Potential Payments upon Termination orChange-in-Control–Cash, Phantom and Restricted Stock Awards” for the definitions of “Cause,” “Good Reason” and “Change of Control.” The following table shows the measurement periods and vesting schedule of the phantom units.

LOGO

Termination of 2014-2018 LTIP

As of October 31, 2016, the Board terminated the 2014-2018 LTIP in order to implement a new long-term incentive award program that better incentivizes management with long-term performance goals as we continue to transition from a development-focused company to an LNG operator.

Annual Long Term Incentive Program (“LTI program”) Beginning in 2017

The Compensation Committee believes that the new LTI program delivers a more common,consistent, competitive and conventional and consistent approach to delivering long-term incentives. Equity grants align our NEOs’ interests with the interests of shareholders by rewarding sustained long-term value creation. Theycreation and enable us to attract and retain highly qualified individuals for important positions throughout the Company.

The In connection with our evolution into an LNG operator and the adoption of our new peer group in 2019, the Compensation Committee has implementedadded total shareholder return as an additional metric under the followingLTI program for PSU grants. We believe that this feature further aligns our LTI program with that of our peers and enables us to continue our progression away fromad-hoc grants to our NEOs.

The key attributes in its newthe Company’s NEO LTI program beginning in 2017:are described below:

 

  Grants will be made on an annual basis with a minimum of a1-year vesting period

  Grants will consist of a mix of at least 50% Performance Share Units (“PSUs”) and 50% Restricted Stock Units (“RSUs”)PSUs for executive officers with the remainder consisting of RSUs

   PSUs:3-year cliff vesting (performance-based)(performance and service-based)

   RSUs:3-year ratable vesting (time vested)(service-based)

  The 20172018 and 2019 LTI Awards to executive officers were a mix of 50% PSUs and 50% RSUs.RSUs, except for 2018 where Mr. Fusco’s award was a mix of approximately 45% RSUs and 55% PSUs.

  PSUs will include one or more performance metrics, with the actual number of shares earned to be between 50% and 200% of the target number if the threshold performance is met, and, beginning in 2019, between 25% and 300% if threshold performance is met, providing for a more customary cap on payouts

   PSUs will vest upon certification by the Compensation Committee of the level of achievement of the performance conditionconditions during the performance period

  The 20172018 LTI Awards to executive officers included one performance metric (cumulative Distributable Cash Flow)Flow per share), and the 2019 LTI Awards to executive officers included two performance metrics (cumulative Distributable Cash Flow per share and total shareholder return)

  Grants will be settled in Cheniere shares

Grants  Equity award grants to executives will include clawback provisions

 

38Cheniere Energy, Inc.

Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Under Mr. Fusco’s employment agreement, for each fiscal year beginning with 2017, Mr. Fusco will be eligible to receive a long-term incentive award with a grant date value of 500% of his annual base salary.

RSU Grants

RSU awards will vest ratably over a three-year3-year service period on each of the first, second and third anniversaries of the grant date subject to forfeiture upon termination except in certain events, and acceleration upon certain events including death or disability.

PSU Grants

PSU awards will provide for3-year cliff vesting and will include one or more performance metrics, with the actual number of shares earned to be between 50%25% and 200%300% of the target number if the threshold performance is met, providing for a more customary cap on payouts. For 2018 LTI Awards, the actual number of share that could be earned was between 50% and 200% of the target number if the threshold performance was met. PSUs will vest upon certification by the Compensation Committee of the level of achievement of the performance conditionconditions during the performance measurement period.

2019 PROXY STATEMENT45


COMPENSATION DISCUSSION AND ANALYSIS

20172018 LTI Awards

In February 2017,2018, the Compensation Committee recommended and the Board approved long-term incentive awards as part of the Company’s LTI program for each of the executive officers of the Company. Since

2018 LTI Awards (approved in February 2018) for NEOs

 

 
NAME  TITLE  RSUs   TARGET PSUs 

Jack A. Fusco

  Director, President and Chief Executive Officer   57,678    69,214 

Michael J. Wortley

  Executive Vice President and Chief Financial Officer   14,535    14,535 

Anatol Feygin

  Executive Vice President and Chief Commercial Officer   11,882    11,882 

Sean N. Markowitz

  General Counsel and Corporate Secretary   6,576    6,576 

Douglas D. Shanda

  Senior Vice President, Operations   6,576    6,576 

The number of RSUs and Target PSUs awarded to Mr. Shear’s service as Interim Chief Executive Officer and President, and Ms. Gentle’sFusco was determined based on a target of 550% of his base salary, which was above the target of 500% specified in his employment with the Company, ended prior to February 2017, neither received long-term incentive awards. All awards madeagreement. The incremental amount, consisting solely of PSUs, was awarded by the Company are contingentBoard in order to increase the alignment to performance in Mr. Fusco’s compensation opportunity for 2018. The number of RSUs and Target PSUs awarded to Messrs. Wortley and Feygin were determined based on the executive officer’s acceptancea target of the respective award agreement.250% of base salary. The number of RSUs and Target PSUs awarded to Messrs. Markowitz and Shanda were determined based on a target of 150% of base salary.

2017 LTI Awards (approved in February 2017) for NEOs 
Name  Title  RSUs1   Target PSUs1 

Jack A. Fusco

  Director, President and Chief Executive Officer   69,646    69,646 

Michael J. Wortley

  Executive Vice President and Chief Financial Officer   16,715    16,715 

Anatol Feygin

  Executive Vice President and Chief Commercial Officer   13,930    13,930 

Ed Lehotsky

  Senior Vice President, Engineering and Construction   7,522    7,522 

Doug Shanda

  Senior Vice President, Operations   7,522    7,522 

(1)Pursuant to Mr. Fusco’s employment agreement, the number of RSUs and Target PSUs awarded to Mr. Fusco was determined based on a target of 500% of his base salary. The number of RSUs and Target PSUs awarded to Messrs. Wortley and Feygin were determined based on a target of 250% of base salary. The number of RSUs and Target PSUs awarded to Messrs. Lehotsky and Shanda were determined based on a target of 150% of base salary.

Key Terms of the RSUs and PSUs under the 20172018 LTI Awards

The RSU awards will vest in three equal installmentsinstallments. One third of the RSU awards vested on February 14, 2019, and one third will vest on each of February 17, 2018, February 17, 201914, 2020 and February 17, 2020.14, 2021. Each PSU award is expressed in terms of a target number of shares. The actual number of shares earned under the PSUs, between 50% and 200% of the target if the threshold performance is met, will be determined based on the Company’s cumulative distributable cash flow per share from January 1, 2018 through December 31, 20192020 compared to apre-established performance target. For a definition of cumulative distributable cash flow per share in connection with the 2018 PSU awards, please see Appendix B.A. The PSU awards will vest upon certification by the Compensation Committee of the level of achievement of the performance conditionconditions during the performance period.

Vesting is also subject to continued employment, with exceptions in some cases, including for achange-in-control change- in-control or termination due to death or disability or retirement. Upon a “Change in Control” or a termination by the Company without “Cause” or by the award recipient for “Good Reason”, in each instance as defined in the PSU Agreementagreement and RSU Agreement,agreement, the RSU and PSU awards will be treated in accordance with the Severance Plan (as described below). Upon a termination due to death or disability, all of the RSUs and the target number of PSUs will vest in full immediately. Upon retirement, the RSU and PSU awards will be treated in accordance with the Cheniere Energy, Inc. Retirement Policy (as described below). Each vested RSU and PSU will be settled infor one share of the Company’s common stock.

2019 LTI Awards

In February 2019, the Compensation Committee recommended and the Board approved long-term incentive awards as part of the Company’s LTI program for each of the executive officers of the Company.

2019 LTI Awards (approved in February 2019) for NEOs

 

 
NAME  TITLE  RSUs   TARGET PSUs 

Jack A. Fusco

  Director, President and Chief Executive Officer   83,759    83,759 

Michael J. Wortley

  Executive Vice President and Chief Financial Officer   28,518    28,518 

Anatol Feygin

  Executive Vice President and Chief Commercial Officer   21,698    21,698 

Sean N. Markowitz

  General Counsel and Corporate Secretary   13,593    13,593 

Douglas D. Shanda

  Senior Vice President, Operations   13,593    13,593 

The number of RSUs and Target PSUs awarded to Mr. Fusco was determined based on a target of 700% of his base salary. The number of RSUs and Target PSUs awarded to Mr. Wortley was determined based on a target of 500% of his base salary. The number of RSUs and Target PSUs awarded to Mr. Feygin was determined based on a target of 425% of his base salary. The number of RSUs and Target PSUs awarded to Messrs. Markowitz and Shanda were determined based on a target of 325% of base salary.

46CHENIERE


COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

Key Terms of the RSUs and PSUs under the 2019 LTI Awards

The RSU awards vest in three equal installments. One third of the RSU awards will vest on each of February 13, 2020, February 13, 2021, and February 13, 2022. Each PSU award is expressed in terms of a target number of shares. The actual number of shares earned under the PSUs, between 25% and 300% of the target if the threshold performance is met, will be determined based on the Company’s cumulative distributable cash flow per share and total shareholder return from January 1, 2019 through December 31, 2021 compared topre-established performance targets. For a definition of cumulative distributable cash flow per share and total shareholder return in connection with the 2019 PSU awards, please see Appendix B. The PSU awards will vest upon certification by the Compensation Committee of the level of achievement of the performance conditions during the performance period.

The treatment of unvested 2019 LTI Awards on a termination of employment are the same as discussed above with respect to the 2018 LTI Awards.

Train 3 Milestone Awards

In February 2017, the Compensation Committee approved an additional long-term incentive component intended to motivate and reward the achievement of significant growth milestones. The Compensation Committee believes such milestones are critical

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement39


to Cheniere’sthe Company’s strategic plan and would resultresulted in the creation of significant additional value for shareholders. In February 2017, the Compensation Committee recommended and the Board approved a milestone award letter for each NEO. The milestone award letters communicated an award of RSUs to be granted, subject to the approval of the Compensation Committee, upon a final investment decision being made on or prior to December 31, 2018 with respect to Train 3 of the CCL Project (the “Train 3 Milestone Award”). If granted,At the time this incentive was established, there had been no FIDs on new liquefaction capacity in the United States since 2015. We made a positive FID on Train 3 of the CCL project in May 2018. We estimate that Train 3 of the CCL Project increases our run rate annual Consolidated Adjusted EBITDA by approximately $500 million and results in a 14% increase to our expected aggregate nominal production capacity. The Train 3 Milestone Award was approved and granted by the Board in May 2018 and will vest and be payable on February 1, 2020, subject to the award recipient’s continued employment and the terms of the applicable award agreement. Since Mr. Shear’s service as Interim Chief Executive Officer and President, and Ms. Gentle’s employment with the Company, ended prior to February 2017, neither received a milestone award letter. In determining the amount of the Train 3 Milestone Award for each NEO, the Compensation Committee considered annual LTIlong-term incentive targets for each role, internal equity across executive positions and the individual NEO’s potential impact to create significant additional value for shareholders in connection with the Train 3 Milestone Award. In determining the amount of the Train 3 Milestone Award for each recipient, the Compensation Committee considered the relative contributions of each NEO towards the achievement of the milestone.

 

2017 LTI Awards–Potential Awards—Train 3 Milestone Awards for NEOs

 Name
NAME  TitleTITLE  Potential RSUs

Jack A. Fusco

  Director, President and Chief Executive Officer  156,250

Michael J. Wortley

  Executive Vice President and Chief Financial Officer  70,000

Anatol Feygin

  Executive Vice President and Chief Commercial Officer  70,000

 Ed LehotskySean N. Markowitz

  Senior Vice President, EngineeringGeneral Counsel and ConstructionCorporate Secretary 25,000

 DougDouglas D. Shanda

  Senior Vice President, Operations  25,000

Compensatory Arrangements

2019 PROXY STATEMENT47


COMPENSATION DISCUSSION AND ANALYSIS

 

February 2018 Special Retention Award

In February 2018, the Compensation Committee recommended and the Board approved the Special Retention Award, intended to reward the demonstrated success of our leadership team and their expertise in a relatively rare but quickly growing industry, and to retain these NEOs in the face of fierce interest from our growing number of competitors. As of the end of 2017, there were four LNG projects under construction in North America other than Cheniere’s SPL Project and CCL Project. Additionally, there were approximately 20 LNG projects in the region that had started the regulatory process for LNG exports. Outside of North America, we estimate that over 30 LNG production projects are under various stages of development. Cheniere is a leader in the U.S. LNG industry, but the number of competitors continues to grow. One competing project is operational, two projects are expected to be operational by the end of 2019, and four projects have completed the regulatory process. This award is intended to ensure that the Company remains well positioned for future growth. The Special Retention Award provides for3-year cliff vesting and will vest and be payable on February 14, 2021, subject to the award recipient’s continued employment. In determining the amount of the Special Retention Award for each recipient, the Compensation Committee considered the competitive market environment and internal equity considerations.

2018 Special Retention Award

NAMETITLERSUs

Jack A. Fusco

Director, President and Chief Executive Officer

Michael J. Wortley

Executive Vice President and Chief Financial Officer40,000

Anatol Feygin

Executive Vice President and Chief Commercial Officer30,000

Sean N. Markowitz

General Counsel and Corporate Secretary15,000

Douglas D. Shanda

Senior Vice President, Operations30,000

COMPENSATORY ARRANGEMENTS

Compensatory Arrangement with President and CEO

In connection with the appointment of Jack A. Fusco as President and CEO, the Company and Mr. Fusco entered into an employment agreement dated as of May 12, 2016.

The Compensation Committee, in consultation with Pearl Meyer (its independent compensation consultant prior to June 2016), determined to paythe following compensation levels set forth in the employment agreement with Mr. Fusco anFusco: a minimum annual base salary of $1,250,000, and Mr. Fusco is eligible to receive$1,250,000; an annual bonus with a target equal to 125% of his annual base salary and a maximum equal to 250% of his annual base salary. For 2016, Mr. Fusco’s annual bonus was prorated to reflect the period during 2016 in which Mr. Fusco was employed by the Company. As described under “Annual Incentive Program” above, the Compensation Committee approved an annual bonussalary; and, for Mr. Fusco for 2016 of $2,303,938. For each fiscal year beginning with 2017, Mr. Fusco will be eligible to receive a long-term incentive award with a grant date value of 500% of his annual base salary. In addition, in connection with his commencement of employment, Mr. Fusco was granted 236,381 shares of restricted stock on May 12, 2016, 25% of which vested on December 31, 2016 and 75% of which will vest in five equal installments every six months beginning May 12, 2017 through the third anniversary of the grant date,May 12, 2019, subject to Mr. Fusco’s continued employment. As of April 15, 2019, 200,924 shares of this award had vested. Additionally, pursuant to his employment agreement, Mr. Fusco has purchased $10,000,000 worth of common shares of the Company.

Upon a termination of Mr. Fusco’s employment by the Company without cause, or by Mr. Fusco for good reason, Mr. Fusco will be entitled to receive, subject to his execution of a release of claims, (1)(i) a cash severance payment equal to the sum of two times (or, if the termination of employment is within 12 months following achange-in-control, three times) the sum of Mr. Fusco’s annual base salary and annual target bonus; (2)(ii) apro-rata annual bonus for the year of termination based on actual performance of the Company; (3)(iii) any earned but unpaid bonus for the preceding fiscal year; (4)(iv) reimbursement of COBRA premiums for up to 18 months; and (5)(v) continued vesting of any outstanding long-term incentive awards that are scheduled to vest within one year following termination.

Compensatory Arrangement with Former Interim CEO and President

In connection with the appointment For a description of additional severance compensation benefits to Mr. Shear as Interim CEO and President, the Company and Mr. Shear entered intoFusco upon a letter agreement dated December 18, 2015 which included the termstermination of his arrangement.

The Compensation Committee, in consultation with Pearl Meyer determined to pay Mr. Shear an annualized base salary of $1,000,000 for his service as Interim CEO and President through May 12, 2016. Mr. Shear received a bonus of $1,500,000 on June 15, 2016 in connection with his role as Interim CEO and President. In addition, Mr. Shear was granted 36,330 phantom units that vested in full on June 15, 2016. While serving as Interim CEO and President, Mr. Shear did not receive director fees for his service as a member of the Board.

employment, please see “Severance Plan” below.

 

40 Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement
48CHENIERE


In connection with the appointment of Mr. Fusco as President and CEO, the Board asked Mr. Shear to serve as Interim Special Advisor to the CEO from May 12, 2016 through November 12, 2016. The Company and Mr. Shear entered into a letter agreement dated May 12, 2016 which included the terms of his arrangement.COMPENSATION AND BENEFITS

The Compensation Committee, in consultation with Pearl Meyer, determined to pay Mr. Shear a monthly base salary equal to $100,000 for his service as Interim Special Advisor to the CEO. While serving as Interim Special Advisor to the CEO, Mr. Shear did not receive director fees for his service as a member of the Board.

Compensation and BenefitsCOMPENSATION AND BENEFITS

 

We provide a limited number of other benefits to our NEOs that make our total compensation program competitive with the market.

Benefits

We offer the same health, welfare and retirement plans to all of our U.S. employees and executive officers.

 

The Cheniere Retirement Plan is atax-qualified 401(k) savings plan pursuant to which we match 100% up to the lesser of 6% of salary and bonus deferrals or the maximum deferrals permitted by law.

 

We also offer all employees medical, dental and vision benefits and health and dependent care reimbursement arrangements.

 

In addition, employees are covered by short-term and long-term disability, basic life insurance equal to two times base salary and voluntary life (elective) insurance and accidental death and dismemberment insurance.

We do not offer a defined benefit pension plan or nonqualified deferred compensation plan to any of our employees or executive officers.

Our international employees have a similar benefits package, adjusted for the customary practices in each location.

Perquisites

Perquisites are not a significant part of our compensation program and are provided to the executive officers on a limited basis. Because our executive officers’ duties require them to spend a significant amount of time traveling, the Company occasionally pays for charter flights for business purposes. Our executive officers’ personal guests wereare permitted to fly with them on these flights on limited occasions in 2016 at nominal or no incremental cost to the Company. We pay for the costs of overseas assignments for allIn 2018, we did not have any personal guests of our employees.

Change of Control Agreements

In 2008, the Compensation Committee approved Change of Control AgreementsNEOs on charter flights paid for certain employees of the Company, including the NEOs, which provided for a potential cash payment upon a change of control ofby the Company.

These agreements were in place through 2016. In September 2016, the Board terminated the Company’s 2008 Change of Control Cash Payment PlanTermination and provided notice to employees that the Change of Control Agreements would not be extended beyond December 31, 2016. Change-in-Control Benefits

In late 2016 and early 2017, the Compensation Committee and Board reviewed and approved the newa Key Executive Severance Pay Plan and Retirement Policy to provide certain severance and retirement benefit protections, including those associated with achange-in-control.

The prior Change of Control Agreements were adopted in recognition that the possibility of a change of control existed and that such possibility, and the uncertainty it may create, may result in the distraction or departure of employees to the detriment of the Company and its shareholders. The Change of Control Agreements were designed to ensure that certain employees designated by management and confirmed by the Compensation Committee were not unduly distracted by the circumstances attendant to the possibility of a change of control and to encourage their continued attention and dedication to our necessary operations.

The Change of Control Agreements provided for the same formula for all participating employees. Specifically, upon a change of control, a cash payment in an amount equal to one times (1x) the employees’ base salaries in effect at or immediately prior to the change of control would be payable to participating employees.

The cash payments were payable within 30 days of the effective date of the change of control. A cessation of an employee’s employment at the previously designated level (including as a result of death or disability) for any reason, a termination of an employee other than for Cause (as defined in the Change of Control Agreements) and a termination by the employee for good

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement41


reason that occurs not more than three months prior to a change of control would be deemed to be a termination of employment pursuant to a change of control, provided the employee demonstrates that such cessation or termination of employment was at the request of a third party who has taken steps reasonably calculated to effect a change of control or the employee’s termination otherwise arose in connection with or in anticipation of a change of control.

Severance Plan

In December 2016, the Compensation Committee recommended and the Board approved the Cheniere Energy, Inc. Key Executive Severance Pay Plan for certain employees of the Company, including the NEOs, with effect beginning on January 1, 2017. Additionally, in February 2017, the Compensation Committee recommended and the Board approved the Amended and Restated Cheniere Energy, Inc. Key Executive Severance Pay Plan, which was further amended in January 2018 (as amended, the “Severance Plan”), to incorporate certain changes to the Severance Plan as reflected in the description below.

The Severance Plan is intended to provide severance compensation benefits to the executive officers and other officers of the Company and its affiliates in the event of the termination of their employment under certain circumstances. Under the Severance Plan, our officers, including our CEO and other executive officers, are eligible for certain post-employment compensation and benefits, which vary depending upon whether achange-in-control or termination of employment occurs. The Severance Plan also provides certain compensation and benefits in the event of achange-in-control of the Company, even absent a termination of employment. To the extent of any overlap, severance benefits for which an officer may be eligible would be providedto receive under any employment agreement, and any amounts to which the officer would be eligible to receive under the Severance Plan would be reduced so that no officer receives duplicative benefits. Please see “Compensatory Arrangement with President and CEO” on page 4048 of this Proxy Statement for details regarding the severance entitlements set forth in our CEO’s employment agreement.

Severance and Benefits in Connection with aChange-in-Control. With respect to each executive officer, upon the occurrence of achange-in-control, even absent a termination of employment, generally notwithstanding the provisions of any other benefit plan or agreement, and subject to certain conditions outlined in the Severance Plan:

 

all of the executive officer’s outstanding unvested equity awards, equity-based awards, annual awards and retention awards (collectively, “Incentive Awards”) which are time-based will automatically vest in full as of the date of thechange-in-control;

 

2019 PROXY STATEMENT49


COMPENSATION DISCUSSION AND ANALYSIS

the executive officer’s outstanding unvested performance-based Incentive Awards that vest based on performance metrics other than TSRtotal shareholder return (“TSR”) will vest at the target level for such Incentive Award; and

 

the executive officer’s outstanding unvested performance-based Incentive Awards that vest based on TSR will vest as of the date of thechange-in-control based on actual TSR as of the date of thechange-in-control.

In the event that an executive officer’s employment is terminated within three months prior to or 24 months following achange-in-control and upon the occurrence of the executive’s termination of employment by us without cause, or by such executive for good reason, then such officer is entitled to receive, in addition to, but not duplicationduplicative of, benefits resulting from apre-terminationchange-in-control, and subject to certain conditions outlined in the Severance Plan:

 

a lump sum payment within 60 days following termination in an amount equal to three times (in the case of the CEO) or two times (in the case of other executive officers) the sum of (a) the officer’s annual base salary in effect when the termination occurs and (b) the officer’s target annual cash bonus for the year of termination; plus

 

a lump sum payment within 60 days following termination in an amount equal to the officer’spro-rated target annual cash bonus for the year of termination; plus

 

the officer’s unpaid annual cash bonus, if any, earned for the year prior to the year of termination; plus

 

acceleration of vesting of all of the executive officer’s outstanding unvested time-based Incentive Awards; and the executive officer’s outstanding unvested performance-based Incentive Awards (A)(a) that vest based on TSR will vest based on actual TSR as of the date of thechange-in-control and (B)(b) that vest based on performance metrics other than TSR will vest at the target level for such Incentive Award.

Severance and Benefits Not in Connection with aChange-in-Control. In the event that an executive officer’s employment is terminated by the officer for good reason or by us without cause, and not in connection with achange-in-control, as described above, then such officer is entitled to receive, subject to certain conditions outlined in the Severance Plan:

 

a lump sum payment within 60 days following termination in an amount equal to two times (in the case of the CEO) or 1.5 times (in the case of other executive officers) the sum of (a) the officer’s annual base salary in effect when the termination occurs and (b) the officer’s target annual cash bonus for the year of termination; plus

 

a lump sum payment within 60 days following termination in an amount equal to the officer’spro-rated target annual cash bonus for the year of termination; plus

 

42Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


the officer’s unpaid annual cash bonus, if any, earned for the year prior to the year of termination; plus

 

acceleration of vesting of the executive officer’s outstanding unvested time-based Incentive Awards that were granted more than six months prior to the termination; and vesting of apro-rated portion of the executive officer’s outstanding unvested performance-based Incentive Awards that were granted more than six months prior to the termination based on actual performance levels achieved at the end of the applicable performance period.

Provisions Applicable Whether or Not Termination is in Connection with aChange-in-Control. In addition to the above, for a period of 24 months following the termination date, subject to certain conditions outlined in the Severance Plan, the executive officer will receive continued subsidized health care benefits, to be provided concurrently with any health care benefit required under COBRA. At the discretion of the Company, the executive officers also may receive outplacement benefits at our expense.

As a condition to receiving benefits under the Severance Plan, participants will be subject to certain conditions, including entering intonon-competition,non-solicitation,non-disclosure,non-disparagement and release agreements with us.

If any amounts will become subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or otherwisenon-deductible under Section 280G of the Code, then such amounts will be reduced so as not to become subject to such excise tax, but only if the net amount of such payments as so reduced is greater than or equal to the net amount of such payments without such reduction. If any participant is a “specified employee” under Section 409A of the Code, any compensation or benefits to be paid or received under the Severance Plan as a result of termination of employment and that constitute“non-qualified deferred compensation” will be delayed in accordance with the Code.

Retirement Policy

In February 2017, the Board approved an amended and restated Cheniere Energy, Inc. Retirement Policy (the “Retirement Policy”), effective February 17, 2017 (“the Effective Date”). The Retirement Policy amended and restated the previous policy that was in effect as of June 11, 2015. The Retirement Policy is limited to employees located in the United States. The Retirement Policy is not applicable in the United Kingdom or any jurisdictions in which it would be a violation of applicable laws. The Retirement Policy also does not apply to the Company’s Chief Executive Officer.

50CHENIERE


EXECUTIVE COMPENSATION PROCESS

Under the Retirement Policy, an employee is eligible for a “Qualifying Retirement” upon resigning from the Company if he or she is at least 60 years old, has at least four years of service with the Company or its affiliates (or a combination of both), and the combined sum of the employee’s age and full years of service with the Company or its affiliates (or a combination of both) is equal to at least 72 years. Following an eligible employee’s Qualifying Retirement, the continuous employment requirement for all of such employee’s long-term incentive awards granted prior to the Effective Date will be waived, and all such awards will continue to vest in accordance with their terms. In addition, for awards granted under the Company’s annual long-term performance incentiveLTI program after the Effective Date, following a Qualifying Retirement, an employee’s outstanding unvested time-based incentive awards will immediately vest, and the employee’s outstanding unvested performance-based incentive awards will vestpro-rata, based on the number of months served by the employee in the performance period prior to his or her retirement, on the normal schedule applicable to such awards and based on actual performance results at the end of the relevant period. Only such time-based incentive awards and performance-based incentive awards granted at least six months prior to the Qualifying Retirement will be eligible under the Retirement Policy.

The determination of whether an employee satisfies the criteria for a Qualifying Retirement will be determined by the Company in its sole discretion. The Retirement Policy will not apply to new hire awards, special retention awards, other awards not part of any annual long-term incentive compensation program or awards under any annual cash bonus program, except as otherwise determined by the Company on acase-by-case basis. The treatment of an employee’s outstanding awards under the Retirement Policy as described above is subject to the employee’s execution of a release of claims against the Company and compliance with restrictive covenants as set forth in the Retirement Policy.

Executive Compensation ProcessEXECUTIVE COMPENSATION PROCESS

The Compensation Committee, with the support of an independent compensation consultant and management, handles the development and implementation of our executive compensation program. The Compensation Committee makes recommendations to the Board regarding our executive officers’ compensation for the Board’s final approval.

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement43


Role of the Compensation Committee and BoardROLE OF THE COMPENSATION COMMITTEE AND BOARD

 

The Compensation Committee reviews and approves the performance goals establishedrecommended by management which are required to be achieved in order for our executive officers to earn performance-based compensation, and determines actual performance against the goals. The performance goals are consistent with the strategic business plan of the Company. The Compensation Committee also reviews and recommends to the Board for approval the total target annual compensation, including the competitiveness of each component of the total compensation package, for our CEO and each executive officer. Key components of this process include:

 

Establishing performance goals for long-term and short-term incentive awards for executive officers.

 

Evaluating the achievement of annual developmental, operating and corporate goals for the year to determine the total amount of the bonus pool for the annual cash bonus awards.incentive awards and evaluating the achievement of our executive officers.

 

Reviewing, discussing and modifying, as appropriate, recommendations from the CEO on the base salaries and annual cash bonusincentive awards for our executive officers. The Compensation Committee makes its recommendations for the Board’s final approval.

 

Meeting in executive session to discuss and determine the amount of our CEO’s compensation. The Compensation Committee makes its recommendations for the Board’s final approval.

 

Reviewing and recommending to the Board for approval long-term incentive awards for the CEO and executive officers.

 

Evaluating the achievement of performance goals under long-term incentive awards.

Role of ManagementROLE OF MANAGEMENT

 

Management and the Human Resources department support the Compensation Committee’s process.

 

All compensation recommendations for our executive officers reflect input from our Human Resources department. Their recommendations are based on the Company’s performance and their review of external market data.

 

At the end of the year, the CEO proposes base salaries and annual cash bonus awards for our executive officers (other than the CEO) to the Compensation Committee which then reviews, discusses and modifies, as appropriate, these recommendations.

Role of the Independent Compensation Consultant

2019 PROXY STATEMENT51


COMPENSATION DISCUSSION AND ANALYSIS

ROLE OF THE INDEPENDENT COMPENSATION CONSULTANT

 

The independent compensation consultant reports to the Compensation Committee Chairman and has direct access to Compensation Committee members. The independent compensation consultant attends Compensation Committee meetings on request and also meets with the Compensation Committee in executive session without management present.

In 2013, the Compensation Committee engaged Pearl Meyer as its independent compensation consultant, and Pearl Meyer served as its independent compensation consultant during 2014 and 2015 and through May 2016.

With respect to engaging Pearl Meyer during 2016, we considered whether any conflict of interest existed under the SEC rules and NYSE MKT listing standards. We reviewed the following related to Pearl Meyer’s independence: (1) other services provided to us by Pearl Meyer; (2) fees paid by us as a percentage of Pearl Meyer’s total revenue; (3) policies or procedures maintained by Pearl Meyer that are designed to prevent a conflict of interest; (4) any business or personal relationships between the individual consultants involved in the engagement and a member of the Compensation Committee; (5) any Company stock owned by the individual consultants involved in the engagement; and (6) any business or personal relationships between our executive officers and Pearl Meyer or the individual consultants involved in the engagement. We concluded that there were no conflicts of interest that prevented Pearl Meyer from serving as an independent consultant to the Compensation Committee on executive compensation matters.

In June 2016, the Compensation Committee engaged Meridian as its independent compensation consultant, and Meridian served as its independent compensation consultant for the remainder of 2016.2016 and for 2017 and 2018.

With respect to engaging Meridian in June 2016, wefor 2018, the Compensation Committee considered whether any conflict of interest existed under the SEC rules and NYSE MKTAmerican listing standards. WeThe Compensation Committee reviewed the following related to Meridian’s independence: (1)(i) other services provided to us by Meridian; (2)(ii) fees paid by us as a percentage of Meridian’s total revenue; (3)(iii) policies or procedures maintained by Meridian that are designed to prevent a conflict of interest; (4)(iv) any business or personal relationships between the individual consultants involved in the engagement and a member of the Compensation Committee; (5)(v) any Company stock owned by the individual consultants involved in the engagement; and (6)(vi) any business or personal relationships between our executive officers and Meridian or the individual consultants involved in the engagement. Weengagement and concluded that there were no conflicts of interest that prevented Meridian from serving as an independent consultant to the Compensation Committee on executive compensation matters.

44Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Peer Group and BenchmarkingPEER GROUP AND BENCHMARKING

 

Each year, the Compensation Committee, with the assistance of management and our independent compensation consultant, reviews external market data to determine the competitiveness of the total compensation package of our executive officers. The market data selected isincludes information representative of the energy industry within which we operate and also includes compensation information from a diversified list of U.S. companies with similar business activities and with which we compete for executive talent.of comparable size.

The Compensation Committee reviews the following components of each executive officer’s compensation relative to the amount paid to executives in similar positions within the market data: base salaries, annual cash bonuses and long-term incentive awards. The market data serves as a point of reference for measuring the compensation of each of our executive officers, but individual compensation decisions are made based on a combination of considerations, including the Company’s overall performance; the individual roles, responsibilities and performance of each of our executive officers and market competitiveness. The Compensation Committee does not adhere to a rigid benchmarking process in setting compensation; rather, information is used as a market reference for the Compensation Committee.

Peer Group & Survey Data & Peer Group

With assistance from management and our compensation consultant, the Compensation Committee reviews our executive officers’ compensation against both nationally recognized published survey data, as well as proxy data from our peer group.

As the first mover in U.S. LNG exports, Cheniere currently has nofew directly comparable peers. For external comparisons, the Compensation Committee instead referenced the following peer group of companies focused on the transportation, storage or purchase of natural gas.gas in determining compensation for 2018. Cheniere ranked near the 5060th percentile in market capitalization and enterprise value among these companies.

 

20162018 Peer Group

  Ameren Corporation

  ONEOK, Inc.

Calpine Corp.

  

DTE Energy Company  PG&E Corporation

CMS Energy Corp.

  

Enbridge Inc.

•Dynegy Inc.

•Energy Transfer Equity, L.P.

•MarkWest Energy Partners, L.P.

•Enterprise Products Partners L.P.

•ONEOK, Inc.

•Kinder Morgan, Inc.

•Plains All American Pipeline, L.P.

•Magellan Midstream Partners, L.P.

•Sempra Energy

•PG&E Corporation

•Spectra Energy Corp.

Public Service Enterprise Group Inc.

Ameren Corporation

•Targa Resources Corp.

Dominion Resources, Inc.

  

  Sempra Energy

  DTE Energy Company

  Targa Resources Corp.

  Dynegy Inc.

TransCanada Corporation

  Enterprise Products Partners L.P.

  The Williams Companies

  Magellan Midstream Partners, L.P.

In September 2016,

52CHENIERE


EXECUTIVE COMPENSATION PROCESS

As a supplement to the peer group, the Compensation Committee reviewedalso considered a broad sample of companies from multiple segments of the Company’senergy industry with comparable enterprise values to the enterprise value of the Company and its publicly traded subsidiaries in determining our executive officers’ compensation. Enterprise value served as the basis for selecting these companies as it best reflects the cumulative invested capital in the combined entities over which our executive officers have oversight. At the time of the benchmarking study, Cheniere’s enterprise value was greater than the median enterprise value of the companies listed below.

2018 Supplemental Survey Companies

  Air Products & Chemicals, Inc.

  Enterprise Products Partners L.P.

  ONEOK, Inc.

  Ameren Corporation

  Eversource Energy

  Phillips 66

  American Electric Power Company

  Exelon Corporation

  PPG Industries, Inc.

  Anadarko Petroleum Corporation

  FirstEnergy Corp.

  PPL Corporation

  Baker Hughes Inc.

  Freeport-McMoRan Inc.

  Praxair, Inc.

  Calpine Corp.

  Halliburton Company

  Sempra Energy

  CenterPoint Energy, Inc.

  Hess Corporation

  Suncor Energy Inc.

  CMS Energy Corp.

  LyondellBasell Industries N.V.

  Valero Energy Corporation

  Dominion Resources, Inc.

  Magellan Midstream Partners, L.P.

  WEC Energy Group, Inc.

  Du Pont (E I) De Nemours

  Marathon Oil Corporation

  Williams Companies, Inc.

  Edison International

  Marathon Petroleum Corporation

  XCEL Energy Inc.

  Encana Corporation

  NRG Energy, Inc.

  EnLink Midstream, LLC

  Occidental Petroleum Corporation

2019 Peer Group

In light of our achievements in 2018 and our transformation into an LNG operating company of considerable size relative to our peers in the LNG industry, we reevaluated our peer group with Meridianfor 2019 to reflect a more appropriate risk profile, capital intensity, enterprise valuation, commercial focus and global scope indicative of a broader segment of the oil and gas industry, focusing on companies of comparable size (as measured by the value of invested capital). In considering shareholder feedback and management performance, we believe that this new peer group, listed below, is an appropriate reflection of our maturation and determinedour NEOs’ target compensation for 2019 aligns with competitive ranges in the new peer group.

The following table summarizes our 2019 peer group enterprise value compared to make adjustmentsCheniere. Our enterprise value includes the value of the non-controlling interest in Cheniere Partners, our publicly traded subsidiary, in order to more appropriately reflect our integrated business and operations, which are managed on a consolidated basis, and the total value of our business for which management is responsible.

(Dollars in millions)  Enterprise Value
(on 12/31/18)
 

Cheniere

  $54,466 

Cheniere Percentile Rank

   75

75th Percentile

  $54,394 

50th Percentile

  $36,389 

25th Percentile

  $22,062 

2019 PROXY STATEMENT53


COMPENSATION DISCUSSION AND ANALYSIS

2019 Peer Group

  Air Products and Chemicals, Inc.

  Kinder Morgan, Inc.

  Anadarko Petroleum Corporation

  LyondellBasell Industries N.V.

  Apache Corporation

  Marathon Oil Corporation

  Baker Hughes, a GE company

  Marathon Petroleum Corporation

  Concho Resources Inc.

  Noble Energy, Inc.

  ConocoPhillips

  Occidental Petroleum Corporation

  Continental Resources, Inc.

  ONEOK, Inc.

  Devon Energy Corporation

  Phillips 66

  Enterprise Products Partners L.P.

  Pioneer Natural Resources Company

  EOG Resources, Inc.

  Schlumberger Limited

  EQT Corporation

  Suncor Energy Inc.

  Freeport-McMoRan Inc.

  Valero Energy Corporation

  Halliburton Company

  The Williams Companies

  Hess Corporation

Note: Andeavor and Praxair, Inc. were previously included in our 2019 peer group but were acquired subsequent to the peer group. Energy Transfer Equity, L.P., Kinder Morgan, Inc. and Plains All American Pipeline, L.P. were removed from the peer group due to a lack of comparability in compensation program design and disclosure.determination.

Other ConsiderationsOTHER CONSIDERATIONS

Stock Ownership GuidelinesSTOCK OWNERSHIP GUIDELINES

 

Our Board believes that significant stock ownership by our executive officers strengthens their alignment with shareholders and demonstrates the executive officers’ commitment to the Company. We have implemented rigorous stock ownership guidelines as detailed below.

 

Stock Ownership Guidelines for

Non-Employee Directors and Executive Officers

Position

POSITION

  Stock Ownership GuidelinesSTOCK OWNERSHIP GUIDELINES

Non-Employee Directors

  3x the director’s prevailing annual equity retainer award

President and CEO

  5x base salary

Executive Vice Presidents and Senior Vice Presidents

  2x base salary

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement45


Furthermore, pursuant to Mr. Fusco’s employment agreement, Mr. Fusco has purchased $10,000,000 worth of common shares of the Company. Allnon-employee directors and executive officers are expected to be in full compliance with the guidelines within five years of initial appointment to a position subject to the guidelines, with certain ownership thresholds that must be met in the interim period. If anon-employee director or executive officer is not in compliance with the guidelines, he or she is required to retain the entireafter-tax value of Company stock received upon the vesting of stock awards and the exercise of stock options until the interim threshold requirements or compliance with the guidelines is achieved. The Board recognizes that there may be occasions in which the guidelines place a severe hardship on the individual and has delegated discretion to the Governance and Nominating Committee to determine whether an exemption should be granted to the individual in such instances. All of ournon-employee directors and executive officers are in compliance with the guidelines.

Additional Considerations

54CHENIERE


OTHER CONSIDERATIONS

ADDITIONAL CONSIDERATIONS

 

The Compensation Committee will continue to evaluate further changes to its compensation policies and practices. We will at all times comply with SEC and NYSE MKTAmerican required compensation recoupment policies and practices, and intend to evaluate our current clawback practices and update our related policies and practices in the future.practices. We also included clawback provisions in our 2017, 2018 and 2019 equity awards and intend to continue to include clawback provisions in future equity awards to executives. Mr. Fusco’s employment agreement provides that he will be subject to and will abide by any policy the Company adopts regarding the clawback of incentive compensation and any additional clawback provisions as required by law and applicable listing rules.

Tax and Accounting ConsiderationsTAX AND ACCOUNTING CONSIDERATIONS

 

In designing our compensation programs, we take into account the various tax, accounting and disclosure rules associated with various forms of compensation. We also review and consider the deductibility of executive compensation under Section 162(m) of the Code and design our compensation programs with the intent that they comply with Section 409A of the Code. Section 162(m) of the Code limits the amount of compensation that may be deducted per covered employee to $1 million per taxable year. Following the enactment of the Tax Cuts and Jobs Act, beginning with the 2018 calendar year, this $1 million annual deduction limitation applies to all compensation paid to any individual who is the Chief Executive Officer, Chief Financial Officer or one of the other three most highly compensated executive officers for 2017 or any subsequent calendar year. There is no longer any exception to this limitation for qualified performance-based compensation (as there was for periods prior to 2018). We generally seek to preserve tax deductions for executive compensation but recognize that it may be beneficial to grant compensation that is not fully tax deductible when we believe it is in the best interests of the Company and our shareholders.

 

46 Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement
2019 PROXY STATEMENT55


COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of RegulationS-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

 

THE COMPENSATION COMMITTEE

Neal A. Shear, Chairman

Nuno Brandolini Chairman

David B. Kilpatrick

Samuel Merksamer

Heather R. ZichalAndrew Langham

56CHENIERE


SUMMARY COMPENSATION

The following table and narrative text sets forth the total compensation awarded to, earned by or paid to our Chief Executive Officer (“CEO”), Chief Financial Officer and three other most highly compensated executive officers for 2016,2018, who are referred to as our “NEOs” in the following compensation tables. Effective May 12, 2016, Neal Shear ceased to serve as our Interim Chief Executive Officer and President, and Jack A. Fusco began serving as our President and Chief Executive Officer. The total 2016 compensation for Messrs. Shear and Fusco is reported in the below table. Additionally, the following table includes Meg A. Gentle, our former Executive Vice President-Marketing, in accordance with SEC rules.

Summary Compensation TableSUMMARY COMPENSATION TABLE

 

 

Name and Principal Position Year  

Salary

($)(1)

  

Bonus

($)(2)

  

Stock Awards

($)(3)

  

Option

Awards

($)

  

Non-Equity
Incentive Plan
Compensation

($)(4)

  

Nonqualified
Deferred
Compensation
Earnings

($)

  

All Other
Compensation

($)(5)

  

Total

($)

 

Jack A. Fusco
President and CEO(6)

  2016  $778,846  $2,303,938  $8,214,240           $3,190  $11,300,214 

Neal A. Shear
Interim CEO and President(7)

  2016  $893,846  $1,500,000              $227,430  $2,621,276 
  2015  $38,462           $1,509,343     $24,516  $1,572,320 
         

Michael J. Wortley
EVP and CFO

  2016  $561,750  $1,000,000        $1,186,000     $16,215  $2,763,965 
  2015  $565,385  $436,800        $13,186,000     $14,938  $14,203,123 
  2014  $503,846  $900,000        $96,000     $16,528  $1,516,374 

Anatol Feygin
EVP and Chief Commercial
Officer

  2016  $481,500  $700,000        $1,090,000     $2,645  $2,274,145 
  2015  $484,615  $374,400        $10,010,000     $3,436  $10,872,451 
  2014  $320,192  $720,000  $5,759,000           $120,500  $6,919,692 

Ed Lehotsky
SVP, Environmental and
Construction

  2016  $383,923  $525,000        $1,183,744     $17,956  $2,110,623 

Doug Shanda
SVP, Operations

  2016  $381,365  $621,250        $1,090,000     $17,956  $2,110,571 

Meg A. Gentle
Former EVP, Marketing(8)

  2016  $421,083           $600,000     $7,775,799  $8,796,882 
  2015  $630,000  $486,720        $16,000,000     $1,509,755  $18,626,475 
  2014  $578,654  $1,000,000        $600,000     $1,056,605  $3,235,259 

NAME AND

PRINCIPAL POSITION

  YEAR     

SALARY

($)(1)

     

BONUS

($)(2)

     

STOCK

AWARDS

($)(3)

     

NON-EQUITY

INCENTIVE PLAN

COMPENSATION

($)(4)

     

ALL OTHER

COMPENSATION

($)(5)

   

TOTAL

($)

 

Jack A. Fusco

President and CEO

   2018     $1,250,000     $     $17,116,952     $2,875,000     $24,949   $21,266,901 
   2017     $1,250,000     $     $6,506,329     $3,125,000     $23,316   $10,904,645 
   2016     $778,846     $2,303,938     $8,214,240     $     $3,190   $11,300,214 

Michael J. Wortley

EVP and CFO

   2018     $624,231     $     $8,379,493     $1,043,280     $17,633   $10,064,637 
   2017     $598,533     $     $1,561,515     $1,100,000     $16,951   $3,276,999 
   2016     $561,750     $1,000,000     $     $1,186,000     $16,215   $2,763,965 

Anatol Feygin

EVP and Chief

Commercial Officer

   2018     $512,115     $     $7,488,990     $852,840     $21,648   $8,875,593 
   2017     $499,309     $     $1,301,341     $850,000     $16,057   $2,666,707 
   2016     $481,500     $700,000     $     $1,090,000     $2,645   $2,274,145 

Sean N. Markowitz

General Counsel and

Corporate Secretary

   2018     $470,192     $     $3,195,383     $699,200     $21,557   $4,386,332 
   2017     $444,577     $     $702,705     $675,000     $21,024   $1,843,306 

Douglas D. Shanda

SVP, Operations

   2018     $470,192     $118,750     $4,068,083     $699,200     $21,557   $5,377,782 
   2017     $447,500     $112,500     $702,705     $720,000     $21,024   $2,003,729 
   2016     $381,365     $621,250     $     $1,090,000     $17,956   $2,110,571 

 

(1)

This column represents the base salary earned, including any amounts invested by the NEOs in the Company’s Retirement Plan. The Company’s Retirement Plan is described in the CD&A under “Compensation and Benefits.”

 

(2)Except for Mr. Shear,

For 2016, this column represents the cash bonus awards paid to the NEOs for performance for each respectivethat year. Mr. Shear received a $1,500,000 bonus in JuneIn 2016, in connection with his role as Interim President2017, and CEO.2018, Mr. Shanda also received a discretionary cash bonus of $96,250 as part of a retention program. Because Ms. Gentle’s employment with the Company terminated on August 26, 2016, she did not receive a cash bonus award for 2016 performance.program of $96,250; $112,500; and $118,750 respectively.

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement47


(3)

The amounts in this column reflect the grant date fair value of awards, computed in accordance with stock-based compensation accounting rules. Values for awards subject to performance conditions are computed based on the probable outcome of the performance condition as of the grant date for the award. A discussion of the assumptions used in calculating the award values may be found in Note 15 to our 20162018 audited financial statements beginning on page 10099 of our Form10-K filed with the SEC on February 24, 2017.26, 2019.

 

  

For 2018, the Stock Awards column includes the grant date fair value of share-based RSUs and PSUs granted in February 2018, which will ultimately be settled in shares of common stock. The value of the PSUs ultimately realized by the officers upon the actual vesting of the awards may or may not be equal to this determined value, as these awards are subject to performance conditions and have been valued based on target performance at date of grant. If a maximum, rather than target, number of units is used to determine the maximum award opportunity for the NEOs for the 2018 PSU awards, the amounts in this column would be increased by the following amounts: Mr. Fusco, $4,026,871; Mr. Wortley, $845,646; Mr. Feygin, $691,295; Mr. Markowitz, $382,592 and Mr. Shanda, $382,592. Please see “2018 LTI Awards” on page 45 of this Proxy Statement for further detail on these awards.

  

For 2017, the Stock Awards column includes the grant date fair value of share-based RSUs and PSUs granted in February 2017, which will ultimately be settled in shares of common stock. The value of the PSUs ultimately realized by officers upon the actual vesting of the awards may or may not be equal to this determined value, as these awards are subject to performance conditions and have been valued based on target performance at date of grant. If a maximum, rather than target, number of units is used to determine the maximum award opportunity for the NEOS for the 2017 PSU awards, the amounts in this column would be increased by the following amounts: Mr. Fusco, $3,253,164; Mr. Wortley, $780,758; Mr. Feygin, $650,671; Mr. Markowitz, $351,353 and Mr. Shanda, $351,353.

For Mr. Fusco, the amount in this column for 2016 represents the grant date fair value (at $34.75 per share) of shares of restricted stock granted to him on May 12, 2016 in connection with his employment. 25% of these shares vested on December 31, 2016 and the remaining 75% will vest in five equal installments every six months beginning May 12, 2017 through the third anniversary of the grant date,May 12, 2019, in each case subject to continued employment. As of April 15, 2019, 200,924 shares of this award had vested.

(4)

For 2018 and 2017, this column represents the actual amounts paid under the Annual Incentive Program.

 

  

For Mr. Feygin,2016, the amount in this column for 2014 includes the grant date fair value (at $57.59 per share) of shares of restricted stock granted to him on April 1, 2014 as his new hire award. Mr. Feygin’s shares of restricted stock vest in four equal installments beginning April 1, 2015.

(4)The amounts in this column reflect the grant date fair value of cash-settled awards, computed in accordance with stock-based compensation accounting rules.

 

  

On October 1, 2016, Messrs. Wortley, Feygin, LehotskyMarkowitz and Shanda were each granted 25,000 cash-settled phantom units. These units have a grant date fair value per share of $43.60 and will vestvested and becomebecame payable in two equal installments on October 1, 2017 and October 1, 2018, respectively.2018.

 

  For Mr. Shear, the amount in this column for 2015 reflects the grant date fair value (at $36.04 per share) of 36,330 phantom units granted to him on December 18, 2015 as an Incentive Award. Mr. Shear’s phantom units fully vested on June 15, 2016. The amount in this column also includes the grant date fair value (at $72.31 per share) of 2,766 shares of restricted stock that Mr. Shear received on June 11, 2015 as compensation for his service as a director (the fair market value of the underlying shares on the date of his director grant was $200,010).

On April 21, 2015, Messrs. Wortley and Feygin and Ms. Gentle were each granted long-term, cash-settled phantom unit awards for the growth in our market capitalization measured by the change in total shareholder value (“TSV”) above certain thresholds.

For Messrs. Wortley and Feygin and Ms. Gentle, these cash-settled phantom units have a grant date fair value per share of $77.00 and will vest and become payable in three equal installments. The first installment vested on February 1, 2016 (with a fair market value of $29.28) and the second installment vested on February 1, 2017 (with a fair market value of $47.10). The remaining installment will vest on February 1, 2018, other than Ms. Gentle’s award which vested in connection with her termination.

In addition, upon the issuance of Notice to Proceed (“NTP”) to commence construction of Trains 1 and 2 of the SPL Project on August 9, 2012, Mr. Wortley Mr. Lehotsky and Ms. Gentle were eachwas granted an LTI Award. A portion of theirthe LTI Award for construction of Trains 1 and 2 of the SPL Project was granted as a cash award. The cash awards vestvested and arewere paid in five equal annual installments of 20%. The first, second, third and fourth installments were paid on August 9, 2012, August 9, 2013, August 9, 2014, August 9, 2015 and August 9, 2015, respectively. The fifth and final installment was paid on August 9,2016. These amounts for 2016 and the amounts are included in this column.

 

(5)

This column represents all other compensation not reported in the previous columns, including the costs to the Company of providing certain perquisites and other personal benefits, payment of insurance premiums and matching contributions allocated by the Company pursuant to the Company’s Retirement Plan. See the table below for more details.

(6)Mr. Fusco was appointed President and CEO effective May 12, 2016, replacing Mr. Shear.

(7)Mr. Shear assumed the role of Interim CEO and President effective December 12, 2015. Effective May 12, 2016, Mr. Shear ceased to serve as the interim President and CEO, becoming a member of the Board and as Interim Special Advisor to the CEO and served in this capacity through November 12, 2016. Amounts shown include Mr. Shear’s compensation for his service as a director during 2015, prior to December 12, 2015. Mr. Shear did not receive any compensation related to his role as a director in 2016.

(8)Effective August 26, 2016, Ms. Gentle’s employment as Executive Vice President–Marketing of the Company was terminated.

 

48 Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement
2019 PROXY STATEMENT57


SUMMARY COMPENSATION

All Other Compensation included in the Summary Compensation TableALL OTHER COMPENSATION INCLUDED IN THE SUMMARY COMPENSATION TABLE

 

 

 Name  Year   

Perquisites and
Other Personal
Benefits

($)(A)

   

Insurance
Premiums

($)(B)

   

Company
Contributions to
Retirement and
401(k) Plans

($)(C)

   

Total

($)

 

 Jack A. Fusco

   2016   $2,280   $910   $   $3,190 

 Neal A. Shear

 

   2016   $226,000   $1,430   $   $227,430 
   2015   $24,516   $   $   $24,516 
   2016   $3,420   $1,560   $11,235   $16,215 

 Michael J. Wortley

   2015   $2,598   $1,140   $11,200   $14,938 
   2014   $2,880   $1,248   $12,400   $16,528 
   2016   $1,140   $1,505   $   $2,645 

 Anatol Feygin

   2015   $2,144   $1,292   $   $3,436 
   2014   $119,730   $770   $   $120,500 

 Ed Lehotsky

   2016   $855   $1,201   $15,900   $17,956 

 Doug Shanda

   2016   $855   $1,201   $15,900   $17,956 
   2016   $7,762,127   $1,040   $12,632   $7,775,799 

 Meg A. Gentle

   2015   $1,492,475   $1,380   $15,900   $1,509,755 
    2014   $1,039,865   $1,140   $15,600   $1,056,605 
NAME  YEAR   

PERQUISITES AND

OTHER PERSONAL

BENEFITS

($)(A)

   

INSURANCE

PREMIUMS

($)(B)

   

COMPANY

CONTRIBUTIONS TO

RETIREMENT AND

401(k) PLANS

($)(C)

   

TOTAL

($)

 

Jack A. Fusco

   2018   $6,889   $1,560   $16,500   $24,949 
   2017   $5,556   $1,560   $16,200   $23,316 
   2016   $2,280   $910   $   $3,190 

Michael J. Wortley

   2018   $3,588   $1,560   $12,485   $17,633 
   2017   $3,420   $1,560   $11,971   $16,951 
   2016   $3,420   $1,560   $11,235   $16,215 

Anatol Feygin

   2018   $3,588   $1,560   $16,500   $21,648 
   2017   $3,420   $1,560   $11,077   $16,057 
   2016   $1,140   $1,505   $   $2,645 

Sean N. Markowitz

   2018   $3,588   $1,469   $16,500   $21,557 
   2017   $3,420   $1,404   $16,200   $21,024 

Douglas D. Shanda

   2018   $3,588   $1,469   $16,500   $21,557 
   2017   $3,420   $1,404   $16,200   $21,024 
   2016   $855   $1,201   $15,900   $17,956 

 

(A)

The amount in this column includes the aggregate incremental cost to the Company attributable to a parking space in our Houston office building for all NEOs exceptNEOs. For Mr. Shear.

For 2016,Fusco, the amount in this column also includes the cost for Mr. Shear reflects his monthly housing and travel stipend of $40,000 per his letter agreement from December 18, 2015.parking in our Washington, D.C. office.

 

(B)For 2014, the amount

The amounts in this column reflect insurance premiums payable for Mr. Feygin includes the costsbasic term life insurance with a benefit of two times annual base salary capped at a maximum of $1,000,000. The amounts in this column also reflect insurance premiums payable for his relocationaccidental death and dismembership life insurance with a benefit of two times annual base salary capped at a maximum of $1,000,000. These benefits are available to Houston in the amountall employees of $119,730, including agross-up payment for taxes in the amount of $26,702. During 2014, Mr. Feygin’s personal guests flew on Company-chartered aircraft on one occasion. No compensation relating to personal guests is included in the table for 2014 since the aircraft could accommodate additional passengers at no additional incremental cost to the Company.

 

(C)For 2016 the amount

The amounts in this column for Ms. Gentle also includes the costs paidreflect matching contributions allocated by the Company in relation to Ms. Gentle’s assignment in the U.K. These costs include the following: housing and utility costs in the amount of $97,000; a cost of living differential payment; a car allowance; a disturbance allowance to assist with miscellaneous expenses associated with relocation; UK taxes in the amount of $5,493,539 (4,464,599 GBP) and agross-up payment for taxes in the amount of $2,026,431 (1,646,880 GBP) so that Ms. Gentle would receive the same amount of compensation, after taxes, while on assignment as she would have received had she remained a residenteach of the U.S.

Costs paid byNEOs pursuant to the Company for housing and utilities, the car allowance, and taxes were paid for Ms. Gentle in British Pounds Sterling and this table represents the U.S. Dollar equivalentCompany’s Retirement Plan. These benefits are available to all employees of the costs based on monthly exchange rate conversions from British Pounds Sterling.

For 2015 the amount in this column for Ms. Gentle also includes the costs paid by the Company in relation to Ms. Gentle’s assignment in the U.K. These costs include the following: housing and utility costs in the amount of $377,181; a cost of living differential payment; a car allowance; education expenses, medical benefits and home travel expenses for Ms. Gentle and her family; tax preparation services; and tax equalization payments in the amount of $739,385 (500,824 GBP) and agross-up payment for taxes in the amount of $35,011 so that Ms. Gentle would receive the same amount of compensation, after taxes, while on assignment as she would have received had she remained a resident of the U.S. Costs paid by the Company for housing and utilities, the car allowance, education expenses, medical benefits and the tax equalization payment were paid for Ms. Gentle in British Pounds Sterling and this table represents the U.S. Dollar equivalent of the costs based on monthly exchange rate conversions from British Pounds Sterling. Ms. Gentle’s personal guest flew on Company-chartered aircraft on one occasion. No compensation relating to personal guests is included in the table for 2015 since the aircraft could accommodate additional passengers at no additional incremental cost to the Company.

For 2014, the amount in this column for Ms. Gentle also includes the costs paid by the Company in relation to Ms. Gentle’s assignment in the U.K. These costs include the following: housing and utility costs in the amount of $342,597; a cost of living differential payment; a car allowance; education expenses, medical benefits and home travel expenses for Ms. Gentle and her family; tax preparation services; and tax equalization payments in the amount of $454,229 (267,302 GBP) and agross-up payment for taxes in the amount of $24,356 so that Ms. Gentle would receive the same amount of compensation, after taxes, while on assignment as she would have received had she remained a resident of the U.S. Costs paid by the Company for housing and utilities, the car allowance, education expenses, medical benefits and the tax equalization payment were paid for Ms. Gentle in

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement49


British Pounds Sterling and this table represents the U.S. Dollar equivalent of the costs based on monthly exchange rate conversions from British Pounds Sterling. Ms. Gentle’s personal guest flew on Company-chartered aircraft on one occasion. No compensation relating to personal guests is included in the table for 2014 since the aircraft could accommodate additional passengers at no additional incremental cost to the Company.

(B) The amounts in this column reflect insurance premiums payable for basic term life insurance with a benefit of two times annual base salary capped at a maximum of $1,000,000. This benefit is available to all employees of the Company. For 2016 and 2015, the amounts in this column also reflect insurance premiums payable for accidental death and dismembership life insurance with a benefit of two times annual base salary capped at a maximum of $1,000,000.

(C) The amounts in this column reflect matching contributions allocated by the Company to each of the NEOs pursuant to the Company’s Retirement Plan.

50 Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement
58CHENIERE


GRANTS OF PLAN-BASED AWARDS

Grants of Plan-Based AwardsGRANTS OF PLAN-BASED AWARDS

The following table and narrative text describe the plan-based awards madegranted to each NEO during 20162018, valued at fair market value on the date of grant. The awards listed in the table were granted under the Cheniere Energy, Inc. 2011 Incentive Plan, as amended (the “2011 Plan”) and are described in more detail in “Compensation Discussion and Analysis” beginning on page 34 of this Proxy Statement.

Grants of Plan-Based Awards During Fiscal Year 2016GRANTS OF PLAN-BASED AWARDS DURING FISCAL YEAR 2018

 

Name Grant Date  Plan 

Units
Granted
Under
Non-Equity
Incentive
Plan
Awards
Units

(#)(1)

  

 

Estimated Possible Payouts
UnderNon-Equity Incentive
Plan Awards

 

 

Estimated Possible Payouts
Under Equity Incentive Plan
Awards

 

All Other
Option
Awards:
Number of
Securities
Underlying
Options

(#)

 

Exercise
or Base
Price of
Option
Awards

($ / Sh)

 

Grant Date
Fair Value of
Stock

and Option
Awards

($)(1)

 
    

Threshold

($)

 

Target

($)

 

Maximum

($)

 

Threshold

(#)

 

Target

(#)

 

Maximum

(#)

   

Jack A. Fusco

  05/12/2016  2015
Employee
Inducement
Plan
  236,381          $8,214,240 

Neal A. Shear

                  

Michael J. Wortley

  10/01/2016  2015 Long-
Term Cash
Incentive Plan
  25,000          $1,090,000 

Anatol Feygin

  10/01/2016  2015 Long-
Term Cash
Incentive Plan
  25,000          $1,090,000 

Ed Lehotsky

  10/01/2016  2015 Long-
Term Cash
Incentive Plan
  25,000          $1,090,000 

Doug Shanda

  10/01/2016  2015 Long-
Term Cash
Incentive Plan
  25,000          $1,090,000 

Meg A. Gentle

                  

NAME TYPE OF AWARD GRANT DATE  

ESTIMATED FUTURE PAYOUTS

UNDERNON-EQUITY INCENTIVE
PLAN AWARDS(1)

  

ESTIMATED FUTURE PAYOUTS

UNDER EQUITY INCENTIVE PLAN
AWARDS

  

ALL OTHER

STOCK

AWARDS:

NUMBER OF

SHARES OF
STOCK OR
UNITS

(#)

  

GRANT DATE

FAIR VALUE OF
STOCK
AND OPTION
AWARDS

($)(2)

 
 

THRESHOLD

($)

  

TARGET

($)

  

MAXIMUM

($)

  

THRESHOLD

(#)

  

TARGET

(#)

  

MAXIMUM

(#)

 

Jack A. Fusco

 Cash Bonus   781,250   1,562,500   3,125,000                
 RSUs  02/14/2018                     57,678   3,355,706 
 PSUs  02/14/2018            34,607   69,214   138,428      4,026,871 
  RSUs  05/22/2018                     156,250   9,734,375 

Michael J. Wortley

 Cash Bonus   283,500   567,000   1,134,000                
 RSUs  02/14/2018                     54,535   3,172,846 
 PSUs  02/14/2018            7,268   14,535   29,070      845,646 
  RSUs  05/22/2018                     70,000   4,361,000 

Anatol Feygin

 Cash Bonus   231,750   463,500   927,000                
 RSUs  02/14/2018                     41,882   2,436,695 
 PSUs  02/14/2018            5,941   11,882   23,764      691,295 
  RSUs  05/22/2018                     70,000   4,361,000 

Sean N. Markowitz

 Cash Bonus   190,000   380,000   760,000                
 RSUs  02/14/2018                     21,576   1,255,292 
 PSUs  02/14/2018            3,288   6,576   13,152      382,592 
  RSUs  05/22/2018                     25,000   1,557,500 

Douglas D. Shanda

 Cash Bonus   190,000   380,000   760,000                
 RSUs  02/14/2018                     36,576   2,127,992 
 PSUs  02/14/2018            3,288   6,576   13,152      382,592 
  RSUs  05/22/2018                     25,000   1,557,500 

 

(1)For all NEOs except Mr. Fusco, these columns reflect the number of cash-settled phantom units and grant date fair value (at $43.60 per share) that will vest and become payable

The amounts in two equal installments on October 1, 2017 and October 1, 2018, respectively. For Mr. Fusco, these columns represent the numberpayout at the threshold, target and maximum award levels for 2018 under the Annual Incentive Program. If the threshold performance level is not met, the pool funding level will be 0%. Other than for the CEO, actual awards to NEOs can exceed the maximum estimated possible payout of shares200% of the individual’s target due to adjustments made for individual performance. Under Mr. Fusco’s employment agreement, his maximum award level is 200% of his target. The various measures and details relating to the 2018 Annual Incentive Awards are presented beginning on page 43.

(2)

The amounts shown in this column reflect the total grant date fair value (at $34.75 per share)values of restrictedRSUs and PSUs calculated in accordance with generally accepted accounting principles in the United States regarding stock granted to him on May 12, 2016 in connection with his Employment Agreement. 25% of these shares vested on December 31, 2016 and the remaining 75% will vest in equal installments every six months through the third anniversarycompensation. A discussion of the grant date,assumptions used in each case subjectcalculating the award values may be found in Note 15 to continued employment.our 2018 audited financial statements beginning on page 99 of our Form10-K filed with the SEC on February 26, 2019. Please see “2018 LTI Awards” on page 45 of this Proxy Statement for more information about these RSU and PSU awards.

Narrative to the Summary Compensation & Grants of Plan-Based Awards Tables

2019 PROXY STATEMENT59

Compensatory Arrangements for Certain Executive Officers


SUMMARY COMPENSATION

 

For a discussion regarding the compensatory arrangement between the Company and Mr. Shear for his service as former Interim CEO and President and former Interim Special Advisor to the CEO, see “Compensatory Arrangement with Former Interim CEO and President” on page 40 of this Proxy Statement.NARRATIVE TO THE SUMMARY COMPENSATION & GRANTS OF PLAN-BASED AWARDS TABLES

COMPENSATORY ARRANGEMENTS FOR CERTAIN EXECUTIVE OFFICERS

For a discussion regarding the compensatory arrangement between the Company and Mr. Fusco for his service as President and CEO, and the equity awards granted to Mr. Fusco in 2016, see “Compensatory Arrangement with President and CEO” on page 4048 of this Proxy Statement.

For a discussion regarding the awards granted to the NEOs in 20162018 as disclosed in the table above, see “Long-Term“Annual Incentive Award” on page 43 and “LTI Program” on page 3645 of this Proxy Statement.

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement 51
60CHENIERE


OUTSTANDING EQUITY AWARDS AT FISCALYEAR-END

The following table reflects the number of securities underlying unexercised stock options held by the NEOs as of December 31, 2016, the exercise price of the unexercised stock options and the date of expiration of the unexercised stock options. The table also reflects the total number and aggregate value of unvested restricted stock held by the NEOs as of December 31, 2016.

Outstanding Equity Awardscontains information about our NEOs’ outstanding equity awards at December 31, 20162018.

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2018

 

Name Option Awards  Stock Awards 
 Number of Securities
Underlying Unexercised
Options
(#)
  

Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options

(#)

  Option
Exercise
Price
($)
  Option
Expiration
Date
  

Number of

Shares or
Units of Stock
That Have
Not Vested

(#)

  

Market Value
of Shares or
Units of Stock
That Have
Not Vested

($)(1)

  

Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have

Not Vested

(#)

  

Equity Incentive
Plan Awards:
Market or
Payout Value

of Unearned
Shares, Units or
Other Rights
That Have Not
Vested

($)

 
 Exercisable  Unexercisable        

Jack A. Fusco

                 177,286(2)          $7,344,959         

Neal A. Shear

                 1,884(3)          $78,054   

Michael J. Wortley

                 116,666(4)          $4,833,472   

Anatol Feygin

                 50,000(5)          $2,071,500   

Ed Lehotsky

                 56,666(4)          $2,347,672   

Doug Shanda

                 18,333(4)          $759,536   
                 10,000(6)          $414,300   

Meg A. Gentle

                 120,000          $4,971,600         

   STOCK AWARDS 

NAME AND GRANT DATE

  

NUMBER OF

SHARES OR

UNITS OF STOCK

THAT HAVE

NOT VESTED

(#)

  

MARKET VALUE

OF SHARES OR

UNITS OF STOCK

THAT HAVE

NOT VESTED

($)(1)

   

EQUITY INCENTIVE

PLAN AWARDS:

NUMBER OF

UNEARNED

SHARES, UNITS OR

OTHER RIGHTS

THAT HAVE

NOT VESTED

(#)(2)

   

EQUITY INCENTIVE

PLAN AWARDS:

MARKET OR

PAYOUT VALUE

OF UNEARNED

SHARES, UNITS OR

OTHER RIGHTS

THAT HAVE NOT

VESTED

($)(3)

 

Jack A. Fusco

       

New Hire Award (5/12/2016)

   35,457(4)  $2,098,700     

2017 LTI Award (2/17/2017)

   46,431(5)  $2,748,251    69,646   $8,244,693 

2018 LTI Award (2/14/2018)

   57,678(5)  $3,413,961    69,214   $8,193,553 

Milestone Award (5/22/2018)

   156,250(6)  $9,248,438           

Michael J. Wortley

       

2017 LTI Award (2/17/2017)

   11,144(5)  $659,613    16,715   $1,978,722 

2018 LTI Award (2/14/2018)

   14,535(5)  $860,327    14,535   $1,720,653 

2018 LTI Award (2/14/2018)

   40,000(7)  $2,367,600     

Milestone Award (5/22/2018)

   70,000(6)  $4,143,300           

Anatol Feygin

       

2017 LTI Award (2/17/2017)

   9,287(5)  $549,698    13,930   $1,649,033 

2018 LTI Award (2/14/2018)

   11,882(5)  $703,296    11,882   $1,406,591 

2018 LTI Award (2/14/2018)

   30,000(7)  $1,775,700     

Milestone Award (5/22/2018)

   70,000(6)  $4,143,300           

Sean N. Markowitz

       

2017 LTI Award (2/17/2017)

   5,015(5)  $296,838    7,522   $890,454 

2018 LTI Award (2/14/2018)

   6,576(5)  $389,233    6,576   $778,467 

2018 LTI Award (2/14/2018)

   15,000(7)  $887,850     

Milestone Award (5/22/2018)

   25,000(6)  $1,479,750           

Douglas D. Shanda

       

2017 LTI Award (2/17/2017)

   5,015(5)  $296,838    7,522   $890,454 

2018 LTI Award (2/14/2018)

   6,576(5)  $389,233    6,576   $778,467 

2018 LTI Award (2/14/2018)

   30,000(7)  $1,775,700     

Milestone Award (5/22/2018)

   25,000(6)  $1,479,750           

 

(1)

The values represented in this column have been calculated by multiplying $41.43,$59.19, the closing price of our common stock on December 30, 2016,31, 2018, by the number of unvested shares of unvested restricted stock.stock and RSUs.

 

(2)

The amounts in this column are the target amount of PSUs granted as part of the annual LTI program. The 2017 awards have a performance measurement period of January 1, 2018 to December 31, 2019, and the 2018 awards have a performance period of January 1, 2018 to December 31, 2020. PSU awards will vest upon certification by the Compensation Committee of the level of achievement of the performance conditions during the performance measurement period.

(3)These are

The values represented in this column have been calculated by multiplying $59.19, the closing price of our common stock on December 31, 2018, by the maximum number of shares that could be earned under the PSUs. This estimated payout is not necessarily indicative of the actual payout at the end of the performance period.

(4)

This amount represents the unvested restricted stock that Mr. Fusco was granted in connection with the commencement of his employment. The remainder of the award vests on May 12, 2019.

 

(5)(3)These are shares of restricted stock that Mr. Shear was granted as an independent director.

Awards vest ratably over three years.

 

(6)(4)

These are shares of unvested restricted stock of the Company that were granted to Messrs. Wortley, Lehotsky and Shanda as theiramounts represent milestone awards for construction of Trains 3 and 4 of the SPL Project. The first installment of 30% of the milestone awards vested upon the closing of financing and issuance of NTP to commence construction of Trains 3 and 4 of the SPL Project, on May 28, 2013. The second installment of 20% of the milestone awards vested upon payment of 60% of the original contract price of the EPC contract on October 1, 2014. The remaining installments of the milestone awards will vest as follows: (i) 20% will vest upon substantial completion of Train 4 of the SPL Project and (ii) 30% will vest on the first anniversaryFebruary 1, 2020. Please see “Train 3 Milestone Awards” on page 47 of substantial completion of Train 4 of the SPL Project.this Proxy Statement for more information about these awards.

 

(7)(5)

These are shares of restricted stock that Mr. Feygin wasamounts represent RSUs granted in connection with his employment.

(6)These are shares of restricted stock that were granted to Mr. Shanda on August 1, 2013 as a special retention award. These sharesawards, and will vest on August 1, 2017.February 14, 2021. Please see “February 2018 Special Retention Award” on page 48 of this Proxy Statement for more information about these awards.

 

52 Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement
2019 PROXY STATEMENT61


OPTION EXERCISES AND

STOCK VESTED

The following table sets forth the stock options exercised by the NEOs during 2016 and their restricted stock that vested during 2016. The number of securities for which stock options were exercised (if any) and the aggregate dollar value realized upon the exercise of such stock options is reflected in the table. The number of shares of restricted stock that vested and the aggregate dollar value realized upon the vesting of such restricted stock is also reflectedfor our NEOs in the table.2018. There were no option exercises by our NEOs in 2018.

Option Exercises and Stock Vested During Fiscal Year 2016OPTION EXERCISES AND STOCK VESTED DURING FISCAL YEAR 2018

 

 

   Option Awards  Stock Awards
Name  

Number of Shares
Acquired on
Exercise

(#)

   

Value Realized
on Exercise(1)

($)

  

Number of Shares
Acquired on Vesting

(#)

   

Value Realized on
Vesting

($)(2)

Jack A. Fusco

         59,095   $2,448,306

Neal A. Shear(3)

         40,038   $1,322,069

Michael J. Wortley

   1,500   $17,353   20,000   $    844,000

Anatol Feygin

         25,000   $    844,250

Ed Lehotsky

         11,874   $    501,083

Doug Shanda

         12,500   $    487,250

Meg A. Gentle

         125,000   $5,275,000
   OPTION AWARDS   STOCK AWARDS 
NAME  

NUMBER OF SHARES

ACQUIRED ON

EXERCISE

(#)

   

VALUE REALIZED

ON EXERCISE

($)

   

NUMBER OF SHARES

ACQUIRED ON VESTING

(#)

   

VALUE REALIZED ON

VESTING

($)(1)

 

Jack A. Fusco

                           —                        —                    94,129   $5,737,616 

Michael J. Wortley

             75,571   $4,939,012 

Anatol Feygin

           4,643   $267,623 

Sean N. Markowitz

           2,507   $144,503 

Douglas D. Shanda

           13,507   $870,173 

 

(1)The value in this column for stock options exercised by the NEOs during 2016 has been calculated by determining the difference between the per share fair market value of the underlying shares on the date of exercise and the exercise price of the stock options.

(2)The value in this column for the NEOs’ restricted stock and restricted stock units that vested during 20162018 has been calculated by multiplying the per share fair market value of the underlying shares on the vesting date by the number of shares of restricted stock that vested.

(3)Mr. Shear held restricted stock related to his service a member of the Board that vested on June 1, 2016. The fair market value of the underlying 3,708 shares on the vesting date was $119,546. He also held restricted stock related to his service as Interim President and CEO that vested on June 15, 2016. The fair market value of the underlying 36,330 shares on the vesting date was $1,202,523.

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement 53
62CHENIERE


POTENTIAL PAYMENTS UPON

TERMINATION OR

CHANGE-IN-CONTROL

The following table and narrative text describe the potential value that the NEOs who were employed by the Company on December 30, 2016 would receive upon accelerated vesting of their outstanding equity grants andchange-in-control cash payments assuming certain triggering events occurred on December 30, 2016.31, 2018. The value shown in the table assumes a December 30, 201631, 2018 termination date, and uses the closing price of our common stock of $41.43$59.19 on December 30, 2016,31, 2018, as reported on the NYSE MKT LLC.American, and assumes that performance-based incentive awards vest based on the maximum award level. All amounts are estimates of the amounts which would be realized upon the triggering event. The actual value of the amounts can only be determined at the time such NEO leaves the Company.

As discussed in CD&A under the Components of our Executive Compensation Program, we have entered into an employment agreement with Mr. Fusco and adopted a Severance Plan that covers all of our NEOs. For a description of the potential payments upon termination orchange-in-control for (i) Mr. Fusco under his employment agreement and (ii) all of our NEOs under the Severance Plan, please see page 49 and page 50 of this Proxy Statement, respectively.

Potential Payments upon Termination orPOTENTIAL PAYMENTS UPON TERMINATION ORChange-in-ControlCHANGE-IN-CONTROL Assuming Termination Event Occurs on December 30, 2016ASSUMING TERMINATION EVENT OCCURS ON DECEMBER 31, 2018

 

 

Jack A. Fusco

 

  Executive Benefits and Payments

  Upon Termination

  Termination
for Cause or
by Executive
without
Good
Reason
   Termination
by Company
without
Cause or
Resignation
by Executive
for Good
Reason
   Death/Disability   

Immediately upon

Change-in-Control

   

Termination
without

Cause or
Resignation
by Executive

with Good
Reason, in
Connection

with Change-

in-Control

 

  Cash Compensation(1)

      $5,625,000           $8,437,500 

  Accrued Bonus(2)

                    

  Health and Welfare Benefits(3)

      $34,780           $34,780 

  Restricted Stock(4)

      $2,937,979   $7,344,959   $7,344,959   $ 

  Total

  $   $8,597,760   $7,344,959   $7,344,959   $8,472,280 

Michael J. Wortley

 

  Executive Benefits and Payments

  Upon Termination

  Termination
for Cause or
by Executive
without
Good
Reason
   Termination
by Company
without
Cause or
Resignation
by Executive
for Good
Reason
   Death/Disability   

Immediately upon

Change-in-Control

   

Termination

without

Cause or
Resignation

by Executive

with Good

Reason, in

Connection

with Change-

in-Control

 

  Cash Compensation(1)

              $562,380   $ 

  Long-Term Incentives (by Grant Date):

          

    02/18/2013 Restricted Stock(4)

                  $4,833,472 

    04/21/2015 Phantom Units(5)

      $4,695,428   $4,695,428   $4,695,428     

    10/01/2016 Phantom Units(6)

      $517,875   $1,035,750   $1,035,750     

  Total

  $   $5,213,303   $5,731,178   $6,293,558   $4,833,472 

JACK A. FUSCO
EXECUTIVE BENEFITS AND PAYMENTS
UPON TERMINATION
  

TERMINATION

FOR CAUSE OR

BY EXECUTIVE

WITHOUT

GOOD

REASON

   

TERMINATION

BY COMPANY

WITHOUT

CAUSE OR

RESIGNATION

BY EXECUTIVE

FOR GOOD

REASON

   DEATH/
DISABILITY
   

IMMEDIATELY UPON

CHANGE-IN-CONTROL

   

TERMINATION

WITHOUT

CAUSE OR

RESIGNATION

BY EXECUTIVE

WITH GOOD

REASON, IN

CONNECTION

WITH CHANGE-

IN-CONTROL

 

Cash Compensation

      $5,625,000           $8,437,500 

Prorated Target Bonus

      $1,562,500           $1,562,500 

Health and Welfare Benefits

      $71,466           $71,466 

Long-Term Incentives (by Grant Date):

            

05/12/2016 Restricted Stock(1)

      $2,098,700   $2,098,700   $2,098,700     

02/17/2017 Restricted Stock Units

      $2,748,251   $2,748,251   $2,748,251     

02/17/2017 Performance Stock Units

      $5,038,424   $4,122,347   $4,122,347     

02/14/2018 Restricted Stock Units

      $3,413,961   $3,413,961   $3,413,961     

02/14/2018 Performance Stock Units

      $2,731,184   $4,096,777   $4,096,777     

05/22/2018 Restricted Stock Units

      $9,248,438   $9,248,438   $9,248,438     

Total

  $            —   $32,537,924   $25,728,472   $25,728,472   $10,071,466 

 

54 Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement
2019 PROXY STATEMENT63


Anatol Feygin

 

  Executive Benefits and Payments

  Upon Termination

  Termination
for Cause or
by Executive
without
Good
Reason
   Termination
by Company
without
Cause or
Resignation
by Executive
for Good
Reason
   Death/Disability   

Immediately upon

Change in Control

   Termination
without
Cause or
Resignation
by Executive
with Good
Reason, in
Connection
with Change
in Control
 

  Cash Compensation(1)

              $482,040   $ 

  Long-Term Incentives (by Grant Date):

          

    04/01/2014 Restricted Stock(7)

          $2,071,500   $1,035,750   $1,035,750 

    04/21/2015 Phantom Units(5)

      $3,590,614   $3,590,614   $3,590,614     

    10/01/2016 Phantom Units(6)

      $517,875   $1,035,750   $1,035,750     

  Total

  $   $4,108,489   $6,697,864   $6,144,154   $1,035,750 

POTENTIAL PAYMENTS UPON TERMINATION ORCHANGE-IN-CONTROL ASSUMING TERMINATION EVENT OCCURS ON DECEMBER 31, 2018

 

Ed Lehotsky

 

  Executive Benefits and Payments

  Upon Termination

  Termination
for Cause or
by Executive
without
Good
Reason
   Termination
by Company
without
Cause or
Resignation
by Executive
for Good
Reason
   Death/Disability   

Immediately upon

Change-in-Control

   

Termination
without

Cause or
Resignation

by Executive

with Good
Reason, in

Connection

with Change-

in-Control

 

  Cash Compensation(1)

              $385,000   $ 

  Long-Term Incentives (by Grant Date):

          

    02/18/2013 Restricted Stock(4)

                  $2,347,672 

    04/22/2015 Phantom Units(5)

      $1,876,613   $1,876,613   $1,876,613     

    10/01/2016 Phantom Units(6)

      $517,875   $1,035,750   $1,035,750     

  Total

  $   $2,394,488   $2,912,363   $3,297,363   $2,347,672 

 

Doug Shanda

 

  Executive Benefits and Payments

  Upon Termination

  Termination
for Cause or
by Executive
without
Good
Reason
   Termination
by Company
without
Cause or
Resignation
by Executive
for Good
Reason
   Death/Disability   

Immediately upon

Change-in-Control

   

Termination

without

Cause or
Resignation

by Executive

with Good

Reason, in

Connection

with Change-

in-Control

 

  Cash Compensation(1)

       481,250    481,250   $   $481,250 

  Long-Term Incentives (by Grant Date):

          

    02/18/2013 Restricted Stock(4)

                  $759,536 

    08/01/2013 Restricted Stock(8)

          $414,300   $414,300     

    04/22/2015 Phantom Units(5)

      $1,657,200   $1,657,200   $1,657,200     

    10/01/2016 Phantom Units(6)

      $517,875   $1,035,750   $1,035,750     

  Total

  $   $2,656,325   $3,588,500   $3,107,250   $1,240,786 
MICHAEL J. WORTLEY
EXECUTIVE BENEFITS AND PAYMENTS
UPON TERMINATION
  

TERMINATION

FOR CAUSE OR

BY EXECUTIVE

WITHOUT

GOOD

REASON

   

TERMINATION

BY COMPANY

WITHOUT

CAUSE OR

RESIGNATION

BY EXECUTIVE

FOR GOOD

REASON

   DEATH/
DISABILITY
   

IMMEDIATELY UPON

CHANGE-IN-CONTROL

   

TERMINATION

WITHOUT

CAUSE OR

RESIGNATION

BY EXECUTIVE

WITH GOOD

REASON, IN

CONNECTION

WITH CHANGE-

IN-CONTROL

 

Cash Compensation

      $1,795,500           $2,394,000 

Prorated Target Bonus

      $567,000           $567,000 

Health and Welfare Benefits

      $71,466           $71,466 

Long-Term Incentives (by Grant Date):

          

02/17/2017 Restricted Stock Units

      $659,613   $659,613   $659,613     

02/17/2017 Performance Stock Units

      $1,209,219   $989,361   $989,361     

02/14/2018 Restricted Stock Units

      $860,327   $860,327   $860,327     

02/14/2018 Performance Stock Units

      $573,551   $860,327   $860,327     

02/14/2018 Restricted Stock Units(2)

          $2,367,600   $2,367,600     

05/22/2018 Restricted Stock Units

      $4,143,300   $4,143,300   $4,143,300     

Total

  $                —   $9,879,976   $9,880,528   $9,880,528   $3,032,466 

(1)  For all NEOs except Mr. Fusco and Mr. Shanda, the NEO was entitled to receive a cash payment under the Change of Control Plan if (i) a Change of Control occurs during the NEOs employment or (ii) not more than three months prior to the date of the Change of Control, the NEO’s employment with the Company ceases at the previously designated level (including as a result of death or disability) for any reason or is terminated by the Company other than for Cause (or the NEO terminates for Good Reason) provided the NEO has reasonably demonstrated that his or her cessation or termination of employment (a) was at the request of a third party who has taken steps reasonably calculated to effect achange-in-control, or (b) otherwise arose in connection with or in anticipation of achange-in-control. The Company’s 2008 Change of Control Cash Payment Plan and individual Change of Control Agreements were terminated at the end of 2016. Please see “Change of Control Agreements” on page 41 of this Proxy Statement.

ANATOL FEYGIN
EXECUTIVE BENEFITS AND PAYMENTS
UPON TERMINATION
  

TERMINATION

FOR CAUSE OR

BY EXECUTIVE

WITHOUT

GOOD

REASON

   

TERMINATION

BY COMPANY

WITHOUT

CAUSE OR

RESIGNATION

BY EXECUTIVE

FOR GOOD

REASON

   DEATH/
DISABILITY
   

IMMEDIATELY UPON

CHANGE-IN-CONTROL

   

TERMINATION

WITHOUT

CAUSE OR

RESIGNATION

BY EXECUTIVE

WITH GOOD

REASON, IN

CONNECTION

WITH CHANGE-

IN-CONTROL

 

Cash Compensation

      $1,467,750           $1,957,000 

Prorated Target Bonus

      $463,500           $463,500 

Health and Welfare Benefits

      $39,656           $39,656 

Long-Term Incentives (by Grant Date):

          

02/17/2017 Restricted Stock Units

       549,698   $549,698   $549,698     

02/17/2017 Performance Stock Units

      $1,007,743   $824,517   $824,517     

02/14/2018 Restricted Stock Units

      $703,296   $703,296   $703,296     

02/14/2018 Performance Stock Units

      $468,864   $703,296   $703,296     

02/14/2018 Restricted Stock Units(2)

      $   $1,775,700   $1,775,700     

05/22/2018 Restricted Stock Units

      $4,143,300   $4,143,300   $4,143,300     

Total

  $                —   $8,843,806   $8,699,805   $8,699,805   $2,460,156 

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement 55
64CHENIERE


POTENTIAL PAYMENTS UPON TERMINATION ORCHANGE-IN-CONTROL

SEAN N. MARKOWITZ
EXECUTIVE BENEFITS AND PAYMENTS
UPON TERMINATION
  

TERMINATION

FOR CAUSE OR

BY EXECUTIVE

WITHOUT

GOOD

REASON

   

TERMINATION

BY COMPANY

WITHOUT

CAUSE OR

RESIGNATION

BY EXECUTIVE

FOR GOOD

REASON

   DEATH/
DISABILITY
   

IMMEDIATELY UPON

CHANGE-IN-CONTROL

   

TERMINATION

WITHOUT

CAUSE OR

RESIGNATION

BY EXECUTIVE

WITH GOOD

REASON, IN

CONNECTION

WITH CHANGE-

IN-CONTROL

 

Cash Compensation

      $1,282,500          $1,710,000 

Prorated Target Bonus

      $380,000           $380,000 

Health and Welfare Benefits

      $71,466           $71,466 

Long-Term Incentives (by Grant Date):

          

11/02/2015 Phantom Units

      $295,950   $295,950   $295,950     

02/17/2017 Restricted Stock Units

      $296,838   $296,838   $296,838     

02/17/2017 Performance Stock Units

      $544,167   $445,227   $445,227     

02/14/2018 Restricted Stock Units

      $389,233   $389,233   $389,233     

02/14/2018 Performance Stock Units

      $259,489   $389,233   $389,233     

02/14/2018 Restricted Stock Units(2)

      $   $887,850   $887,850     

05/22/2018 Restricted Stock Units

      $1,479,750   $1,479,750   $1,479,750     

Total

  $                —   $4,999,393   $4,184,082   $4,184,082   $2,161,466 

DOUGLAS D. SHANDA
EXECUTIVE BENEFITS AND PAYMENTS
UPON TERMINATION
  

TERMINATION

FOR CAUSE OR

BY EXECUTIVE

WITHOUT

GOOD

REASON

   

TERMINATION

BY COMPANY

WITHOUT

CAUSE OR

RESIGNATION

BY EXECUTIVE

FOR GOOD

REASON

   DEATH/
DISABILITY
   

IMMEDIATELY UPON

CHANGE-IN-CONTROL

   

TERMINATION

WITHOUT

CAUSE OR

RESIGNATION

BY EXECUTIVE

WITH GOOD

REASON, IN

CONNECTION

WITH CHANGE-

IN-CONTROL

 

Cash Compensation(3)

      $1,638,750       $   $2,066,250

Prorated Target Bonus

      $380,000          $380,000

Health and Welfare Benefits

      $49,050           $49,050 

Long-Term Incentives (by Grant Date):

          

02/17/2017 Restricted Stock Units

      $296,838   $296,838   $296,838     

02/17/2017 Performance Stock Units

      $544,167   $445,227   $445,227     

02/14/2018 Restricted Stock Units

      $389,233   $389,233   $389,233     

02/14/2018 Performance Stock Units

      $259,489   $389,233   $389,233     

02/14/2018 Restricted Stock Units(2)

      $   $1,775,700   $1,775,700     

05/22/2018 Restricted Stock Units

      $1,479,750   $1,479,750   $1,479,750     

Total

  $                —   $5,037,276   $4,775,982   $4,775,982   $2,495,300 

(1)

Mr. Fusco’s shares of restricted stock will vest in full upon death or disability or upon achange-in-control. In the event the Company terminates Mr. Fusco’s employment without Cause (as defined in the grant agreements) or Mr. Fusco terminates his employment for Good Reason (as defined in the grant agreements), Mr. Fusco’s shares of restricted stock from this grant not then vested that are scheduled to vest within one year following termination will continue to vest in accordance with their schedule.


(2)

The shares of restricted stock units granted as special retention awards vest in full upon a Change in Control in the event the Company terminates the NEO’s employment without Cause (as defined in the grant agreements) or the NEO terminates his or her employment for Good Reason (as defined in the grant agreements), if the termination is within three months prior to a Change in Control.

 For Mr. Fusco, if his employment is terminated by the Company other than for Cause or he terminates for Good Reason, he is entitled to receive a cash severance payment under his Employment Agreement, in lieu of any other severance compensation, equal to two times (or, if such termination of employment is within 12 months following a Change of Control, three times) the sum of his base salary (as then in effect) and target bonus, in each case, as in effect immediately prior to termination and without regard to any reduction thereto which constitutes Good Reason.

      For Mr. Shanda, if his employment is terminated by the Company other than for Cause or he terminates for Good Reason, he is entitled to receive a cash payment equal to the remaining amount due under his retention award described on page 31
(3)

For Mr. Shanda, if his employment is terminated by the Company other than for Cause or he terminates for Good Reason, he is entitled to receive a cash payment equal to the remaining amount due under his Retention Bonus described on page 45 of this Proxy Statement.

(2)  Pursuant to Mr. Fusco’s employment agreement, he is entitled to receive apro-rata annual bonus based on actual performance of the Company upon a termination by the Company without Cause, or by Mr. Fusco for Good Reason. In 2016, the annual bonus was paid out by December 30, 2016.

(3)  COBRA premiums calculated as $1,932 monthly for 18 months.

(4)  The shares of restricted stock granted to Messrs. Wortley, Lehotsky and Shanda are their milestone awards for construction of Trains 3 and 4 of the SPL Project that have not vested. The restricted stock will vest in full in the event the Company terminates the NEO’s employment without Cause (as defined in the grant agreements) or the NEO terminates his or her employment for Good Reason (as defined in the grant agreements) within one year after the effective date of achange-in-control (as defined in the grant agreements) of the Company.

      Mr. Fusco’s shares of restricted stock will vest in full upon death or disability or upon achange-in-control. In the event the Company terminates Mr. Fusco’s employment without Cause (as defined in the grant agreements) or Mr. Fusco terminates his employment for Good Reason (as defined in the grant agreements), Mr. Fusco’s shares of restricted stock not then vested that are scheduled to vest within one year following termination will continue to vest in accordance with their schedule.

(5)  These are phantom units granted under the 2014-2018 LTIP. The phantom units will immediately vest in full in the event the Company terminates the NEO’s employment without Cause (as defined in the grant agreements), the NEO terminates his or her employment for Good Reason (as defined in the grant agreements), the NEO dies or incurs a disability, or achange-in-control (as defined in the grant agreements) of the Company occurs.

(6)  These are phantom units granted under the 2015 Long-Term Cash Incentive Plan that vest, and become payable in cash, in equal installments on each of October 1, 2017 and October 1, 2018. Upon termination by the Company without Cause or by the NEO for Good Reason, the unvested units vest as follows: if the date on which NEO’s employment terminates is prior to October 1, 2017, then the first installment shall immediately vest and become payable and the final installment shall immediately be forfeited, and if the date on which the NEO’s employment terminates is on or after October 1, 2017 but prior to October 1, 2018, then the final installment will immediately vest and become payable. The phantom units will immediately vest in full upon death or disability. If achange-in-control occurs, any units not then vested shall vest in full immediately.

(7)  In the event ofchange-in-control, one half of each installment of the of the restricted shares not then vested shall vest in full immediately and the remaining portion shall continue to vest pursuant to the schedule, provided that such remaining portion of the restricted shares not then vested shall vest in full immediately upon termination of Mr. Feygin’s employment by the Company without cause or a termination by Mr. Feygin because of a “Constructive Termination,” provided, in each case, termination occurs within one year after thechange-in-control. For purposes of this award, “Constructive Termination” shall mean that the Company has either (a) reduced the Mr. Feygin’s base salary or (b) relocated Mr. Feygin to a new workplace that is more than 50 miles from such Participant’s regular workplace without consent from the Mr. Feygin (such reduction or relocation, a “Termination Event”), Mr. Feygin provides the Company written notice of termination within 30 days of the Termination Event which identifies and describes the applicable Termination Event (“Written Notice”), the Company does not cure the Termination Event within 30 days of receipt of Written Notice (the “Cure Period”) and Participant terminates Continuous Service within 30 days after expiration of the Cure Period. In the event of death or disability while performing Continuous Service, any shares not then vested shall vest in full immediately.

(8)  These are shares of restricted stock granted to Mr. Shanda on August 1, 2013 as a special retention award. The restricted stock will immediately vest in full in the event of aChange-in-Control, or upon death or disability.

 

56 Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement
2019 PROXY STATEMENT65


Narrative to the Potential Payments upon Termination orChange-in-Control

Change-in-ControlPOTENTIAL PAYMENTS UPON TERMINATION ORCHANGE-IN-CONTROL Cash PaymentASSUMING TERMINATION EVENT OCCURS ON DECEMBER 31, 2018

 

We had entered into Change of Control Agreements with each of the NEOs other than Messrs. Shear and Fusco. The Change of Control Agreements provided for a cash payment upon a “Change of Control” (as defined in the Change of Control Agreements) in an amount equal to one times the NEOs’ base salaries in effect at or immediately prior to the Change of Control. The cash payments were payable within 30 days of the effective date of the Change of Control. A cessation of an NEO’s employment at the previously designated level (including as a result of death or disability) for any reason, a termination of an NEO’s employment other than for Cause (as defined in the Change of Control Agreements), and a termination by the NEO for Good Reason (generally, as defined in the Company’s 2011 Plan) that occurred not more than three months prior to a Change of Control would be deemed to be a termination of employment pursuant to a Change of Control, provided the NEO demonstrated that such cessation or termination of employment was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or the NEO’s termination otherwise arose in connection with or in anticipation of a Change of Control. The Change of Control Agreements expired on December 31 of each calendar year, but were automatically extended for an additional year each January 1 unless the Compensation Committee determined, and the Company provided notice to employees, that the Change of Control Agreements would not be extended.NARRATIVE TO THE POTENTIAL PAYMENTS UPON TERMINATION ORCHANGE-IN-CONTROL

In September 2016, the Board terminated the Company’s 2008 Change of Control Cash Payment Plan and provided notice to employees that the Change of Control Agreements would not be extended beyond December 31, 2016. CHANGE-IN-CONTROL CASH PAYMENT

In December 2016, the Compensation Committee recommended and the Board approved the Cheniere Energy, Inc. Key Executive Severance Pay Plan (the(as amended, the “Severance Plan”) for certain employees of the Company, including the NEOs, with effect beginning on January 1, 2017. The Severance Plan was amended and restated in February 2017.2017 and further amended in January 2018. Please see “Severance Plan” on page 4249 of this Proxy Statement for details regarding the Company’s Severance Plan. Because

CASH, RESTRICTED STOCK, RSU AND PSU AWARDS

Under the Severance Plan, did not take effect until January 1, 2017, the disclosure set forth in the table above was determined in accordance with the terms of the Change of Control Agreements as in effect on December 31, 2016.

Cash, Phantom and Restricted Stock Awards

The restricted stockall incentive awards granted to each NEO, if applicable, as hisin 2017 or her milestone award for construction of Trains 3 and 4 of the SPL Project willlater generally vest in full, inwith performance-based incentive awards vesting at the target level, upon achange-in-control; provided that any performance-based incentive awards that vest based on TSR will vest based on the actual TSR as of the date of thechange-in-control. In the event that the Company terminates the NEO’s employment without Cause or the NEO terminates his or her employment for Good Reason within one year afternot in connection with achange-in-control, (1) all time-based incentive awards that were granted in 2017 or later and more than six months prior to the effective date of a Change of Control of the Company. In the event the Company terminates the NEO’s employment without Cause or the NEO terminates his or her employment for Good Reason, the restricted stock milestone award for construction of Trains 3 and 4 of the SPL Project will continue to vest in accordance with its schedule.

The phantom units granted to each NEO, if applicable, under the 2014-2018 LTIP will immediatelytermination generally vest in full and (2) a prorated portion of performance-based incentive awards that were granted in 2017 or later and more than six months prior to termination vest based on actual performance.

The award agreements pursuant to which each of the outstanding awards were granted also generally provide that the awards vest in full upon a termination of employment due to death or disability.

Notwithstanding the terms of the Severance Plan, the Special Retention Awards granted in February 2018 do not vest if the NEO does not remain employed with the Company through the vesting date except in the event the Company terminates the NEO’s employment without Cause,of death or disability,change-in-control or if the NEO terminates hisis terminated without cause or her employment for Good Reason, the NEO dies or incursgood reason within three months prior to a disability, or a Change of Control of the Company occurs.change-in-control.

Pursuant to the grant agreements, other than with respect to Mr. Shear, “Cause” generally means the termination of employment of the NEO with the Company or an affiliate under any of the following circumstances: (i) the willful commission by the NEO of a crime or other act of misconduct that causes or is likely to cause substantial economic damage to the Company or an affiliate or substantial injury to the business reputation; (ii) the commission by the NEO of an act of fraud in the performance of the NEO’s duties on behalf of the Company or an affiliate; (iii) the willful and material violation by the NEO of the Company’s Code of Business Conduct and Ethics Policy; or (iv) the continuing and repeated failure of the NEO to perform his or her duties to the Company or an affiliate, including by reason of his or her habitual absenteeism, which failure has continued for a period of at least 30 days following delivery of a written demand for substantial performance to the NEO by the Board which specifically identifies the manner in which the Board believes that the NEO has not performed his or her duties.

A “Good Reason” termination of a NEO generally will occur, assuming the Company fails to cure such circumstances within 30 days after receipt of written notice of the Good Reason termination, upon the NEO’s termination of employment due to one of the following events: (i) the removal from or failure tore-elect the NEO to the office or position in which he or she last served; (ii) the assignment to the NEO of any duties, responsibilities, or reporting requirements materially inconsistent with his or her position with the Company or an affiliate, or any material diminishment, on a cumulative basis, of the NEO’s overall duties, responsibilities, or status;

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement57


or (iii) a material reduction by the Company or an affiliate in the NEO’s annual base salary; or (iv) the requirement by the Company or an affiliate that the principal place of business at which the NEO performs his or her duties be changed to a location more than fifty (50) miles from his or her current place of business.

Generally, a “Change of Control”“Change-in-Control” of the Company will occur under the cash, restricted stock and phantom unit awards if: (i) any person or entity directly or indirectly becomes the beneficial owner of 30%50.1% or more (or 30% for certain past awards) of the shares of voting stock of the Company then outstanding; (ii) the consummation of any merger, organization,reorganization, business combination or consolidation of the Company or one of its subsidiaries with or into any other company (other than when the holders of the voting stock immediately prior thereto hold more than 50% of the combined voting power of the stock of the surviving company or parent of the surviving company immediately thereafter); (iii) a majority of the current members of the Board or their approved successors cease to be our directors; or (iv) the consummation of a sale or disposition by the Company of all or substantially all of our assets (other than a sale or disposition in which the same shareholders before the sale or disposition own 50% of the outstanding common stock after the transaction is complete).

In December 2016,

66CHENIERE


CEO PAY RATIO

Set forth below is the Compensation Committee recommendedannual total compensation of our median employee, the annual total compensation of Mr. Fusco and the Board approved the Severance Plan for certain employeesratio of those two values:

The 2018 annual total compensation of the Company, including the NEOs, with effect beginning on January 1, 2017, as amendedmedian employee (other than our President and restated in February 2017. Under the Severance Plan, our officers, includingCEO) was $183,131;

The 2018 annual total compensation of our President and CEO, Mr. Fusco, was $21,266,901; and other executive officers, are eligible for certain

For 2018, the ratio of the annual total compensation and benefitsof Mr. Fusco to the median annual total compensation of all of our employees was reasonably estimated to be 116.1 to 1.

To calculate the ratio above, we used the same employee that we had identified as of December 31, 2017. We believe there have been no changes in the eventour employee population or our compensation arrangements in 2018 that would result in a material change in our pay ratio disclosure or our median employee.

To identify our median employee in 2017, we used our employee population as of a termination or achange-in-control. For more information regarding the Severance Plan, please see the Company’s Current Report on Form8-K filed with the SEC on February 17,December 31, 2017, including full-time, part-time and temporary employees. We excluded our employees in Singapore and Chile, as the full Severance Plan filed as Exhibit 10.1 thereto.

In connection with the terminationemployees located in these countries (7 and 3, respectively) represented fewer than 5% of Ms. Gentle’s employmentour total employees. Our total employee count at that time was 1,203 prior to excluding Singapore and Chile and 1,193 after accounting for these exclusions. We measured compensation based on August 26, 2016, and subject to her execution of a release of claims, 120,000 shares of Ms. Gentle’s shares of restricted stock, with a value as of August 26, 2016 of $5,278,800, will vest on substantial completion of Train 4 of the SPL Project and 100,000 of Ms. Gentle’s phantom units, with a value as of August 26, 2016 of $4,399,000, vested in full. The remainingannual total compensation (including equity awards held by Ms. Gentle were forfeitedreceived in 2017 valued on the termination of her employment.grant date) using the same methodology that we use to determine our NEOs’ annual total compensation for the Summary Compensation Table. We annualized the base salary paid to permanent employees newly hired during 2017 and did not apply anycost-of-living adjustments in measuring compensation.

As required by SEC rules, we calculated 2018 annual total compensation for both our median employee and Mr. Fusco using the same methodology that we use to determine our NEOs’ annual total compensation for the Summary Compensation Table.

 

58 Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement
2019 PROXY STATEMENT67


PROPOSAL 2ADVISORY AND

NON-BINDING VOTE TO

APPROVE THE COMPENSATION

OF THE COMPANY’S NAMED

EXECUTIVE OFFICERS FOR 20162018

In accordance with Section 14A of the Exchange Act, we are asking shareholders to vote on an advisory,non-binding basis to approve the compensation paid to our named executive officers for fiscal year 2016.2018. We ask shareholders to read the CD&A section of this Proxy Statement for a full discussion of our executive compensation practices and decisions. The CD&A details our executive compensation policies and incentive programs and explains the compensation decisions relating to the named executive officers for fiscal year 2016.2018. In response to shareholder feedback, the Compensation Committee and Board have taken considerable steps to further align our executive compensation programs with the Company’s strategy and long-term performance. The Compensation Committee believes that our compensation policies and programs continue to align our executive officers’ interests with the interests of our shareholders and that the compensation received by the named executive officers is commensurate with the performance of the Company as a whole.

Specifically, we ask the shareholders to approve the following resolution:

RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in this Proxy Statement pursuant to the Securities and Exchange Commission’s compensation disclosure rules, including the Compensation Discussion and Analysis, compensation tables and narrative discussion on pages 2734 through 5866 of this Proxy Statement.

Although the outcome of this vote is not binding on the Board, the Board values shareholders’ views, and the Compensation Committee and Board will consider the outcome of the advisory vote when making future compensation decisions.

The Board has adopted a policy of providing for annualsay-on-pay votes. The nextsay-on-pay vote will occur at our 20182020 Annual Meeting of Shareholders.

The Board has adopted a policy of providing for annualsay-on-pay votes. Subject to the results of Proposal 3—Advisory andNon-Binding Vote on the Frequency of Holding Future Advisory Votes on the Compensation of the Company’s Named Executive Officers, the nextsay-on-pay vote will occur at our 2018 Annual Meeting of Shareholders.

LOGO

The Board recommends a voteFOR the resolution approving the named executive officer compensation for fiscal year 20162018 as disclosed in this Proxy Statement.

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement59


PROPOSAL 3—ADVISORY ANDNON-BINDING VOTE ON THE FREQUENCY OF HOLDING FUTURE ADVISORY VOTES ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Company’s shareholders are entitled to vote at the Meeting regarding whether future“say-on-pay” proposals, such as the one in Proposal 2 above, should occur every one year, two years or three years. Under the rules issued by the SEC, the Company’s shareholders also have the option to abstain from voting on the matter.

After careful consideration of the frequency alternatives, the Board has determined that holding an advisory shareholder vote on executive compensation every year is the best approach for the Company and its shareholders because it will enable our shareholders to vote, on an advisory basis, on the most recent executive compensation information that is presented in our proxy statement, leading to a more meaningful, timely and coherent communication between the Company and our shareholders regarding the compensation of our named executive officers.

In voting on this Proposal 3, shareholders should be aware that they are not voting to approve or disapprove the Board’s recommendation to holdsay-on-pay votes every year. Instead, shareholders will be able to specify one of four choices for this proposal on the proxy card: “1 YEAR,” “2 YEARS,” “3 YEARS” or “ABSTAIN”.

Although the outcome of this vote is not binding on the Board, the Board values shareholders’ views, and the Compensation Committee and Board will consider the outcome of the advisory vote when considering the frequency of futuresay-on-pay votes.

The Board recommends that the shareholders vote to hold futuresay-on-pay votes every “1 YEAR”.

60 Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement
68CHENIERE


REPORT OF THE AUDIT

COMMITTEE

The Audit Committee of the Board is responsible for oversight of the accounting and financial reporting processes of the Company and oversight of the audits of our financial statements. Management is responsible for the Company’s internal control over financial reporting and the preparation of the financial statements. KPMG LLP, the Company’s independent registered public accounting firm (“KPMG”), is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and issuing a report thereon. KPMG is also responsible for performing an independent audit of the Company’s internal control over financial reporting. The Audit Committee’s responsibility is to oversee these processes.

The Audit Committee currently consists of four Directors. All members of the Audit Committee meet the NYSE MKT LLCAmerican independence standards and the applicable rules of the SEC. The Board has determined that each of Messrs. Botta, MerksamerMather and Robillard is an “audit committee financial expert”,expert,” as defined in Item 407(d)(5)(ii) of RegulationS-K promulgated by the SEC. The Audit Committee operates under a written charter adopted by the Board which is available on our website atwww.cheniere.com. The Audit Committee reviews the adequacy of, and compliance with, the Audit Committee charter annually.

The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of KPMG. As part of fulfilling this responsibility, the Audit Committee engages in an annual evaluation of, among other things, KPMG’s qualifications, independence, performance and communications with the Audit Committee, and whether KPMG should be retained for the upcoming year’s audit. The Audit Committee reviews significant audit findings together with management’s responses thereto. The Audit Committee performs additional activities in accordance with the responsibilities of the Audit Committee specified in the Audit Committee charter.

The Audit Committee reviews the Company’s hiring policies and practices with respect to current and former employees of KPMG. In addition, the Audit Committee preapproves all services provided by KPMG.

The Audit Committee discussed with both our internal auditor and KPMG the overall scope and plans for their respective audits. In addition, the Audit Committee met with the Company’s internal auditor and KPMG, with and without management present, to review and discuss all financial statements prior to their issuance and to discuss significant accounting issues, the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting. Management advised the Audit Committee that all financial statements were prepared in accordance with U.S. generally accepted accounting principles. The Audit Committee’s review with the internal auditor and KPMG included discussions of those matters required to be discussed by Standardsapplicable requirements of the Public Company Accounting Oversight Board.Board and the SEC. The Audit Committee also discussed with KPMG, among other things, matters relating to their independence, and the Audit Committee received the written disclosures and the letter from KPMG required by applicable requirements of the Public Company Accounting Oversight Board regarding KPMG’s communications with the Audit Committee concerning independence.

On the basis of these reviews and discussions, the Audit Committee recommended to the Board that the Board approve the inclusion of the Company’s audited financial statements in our Annual Report on Form10-K for the year ended December 31, 20162018 for filing with the SEC.

THE AUDIT COMMITTEE

Donald F. Robillard, Jr., Chairman

Vicky A. Bailey

G. Andrea Botta

Samuel Merksamer

THE AUDIT COMMITTEE

Donald F. Robillard, Jr., Chairman

Vicky A. Bailey

David B. Kilpatrick

Courtney R. Mather

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement 61
2019 PROXY STATEMENT69


PROPOSAL 43 – RATIFICATION—RATIFICATION

OF KPMG LLP AS

INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

FOR 20172019

KPMG LLP (“KPMG”) served as our independent auditor for the fiscal yearsyear ended December 31, 2016,2018, and the Audit Committee has appointed KPMG to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2017.2019. The Company is asking shareholders to ratify this appointment. Although the Company is not required to obtain shareholder ratification of the appointment of KPMG, the Board considers the selection of an independent registered accounting firm to be an important matter to shareholders and considers a proposal for shareholders to ratify such appointment to be an opportunity for shareholders to provide input to the Audit Committee and the Board on a key corporate governance issue. If the shareholders do not ratify the appointment, the Audit Committee will reconsider whether or not to retain KPMG. Even if the selection is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interest of the Company and its shareholders.

Independent Accountant’s FeesINDEPENDENT ACCOUNTANT’S FEES

 

The following table sets forth the fees billed to us by KPMG for professional services for the fiscal years ended December 31, 20162018 and 2015.2017.

 

  KPMG LLP   KPMG LLP    KPMG LLP    KPMG LLP 
  Fiscal 2016   Fiscal 2015    FISCAL 2018    FISCAL 2017 

Audit Fees

  $6,299,746   $6,017,850   $6,663,332   $6,954,381 

Audit Related Fees

  $   $173,000   $   $ 

Tax Fees

  $47,473   $115,405   $196,480   $88,565 

All Other Fees

  $2,550   $2,550   $2,430   $80,570 

Total

  $    6,349,769   $    6,308,805   $6,862,242   $7,123,516 

Audit Fees—Audit fees for the fiscal years ended December 31, 20162018 and 20152017 include fees associated with the integrated audit of our annual consolidated financial statements, reviews of our interim consolidated financial statements, local statutory audits and services performed in connection with registration statements and debt offerings, including comfort letters and consents.

Audit Related FeesAuditThere were no audit related fees for the fiscal year ended December 31, 2015 were for audit services provided for our LNG marketing and trading subsidiary.in 2018 or 2017.

Tax Fees—Tax fees for the fiscal years ended December 31, 20162018 and 20152017 were for tax consultation services with respect to a sales and use tax analysis for the CCL Project.Project and tax consulting services with respect to the assistance with the computation of the Section 382 ownership change calculations.

Other Fees—Other fees for the fiscal years ended December 31, 20162018 and 20152017 were for services performed in assistance with the application of new accounting standards and/or for accounting research tools.

We did not pay KPMG any additional fees during the fiscal years ended December 31, 20152018 or 2016.2017.

70CHENIERE


PRE-APPROVAL POLICIES AND PROCEDURES

Pre-ApprovalPRE-APPROVAL Policies and ProceduresPOLICIES AND PROCEDURES

 

The Audit Committee’s policy is topre-approve all audit andnon-audit services provided by the independent accountants and not to engage the independent accountants to perform anynon-audit services specifically prohibited by law or regulation. All audit andnon-audit services provided to us during the fiscal years ended December 31, 20162018 and 20152017 werepre-approved.

We anticipate that a representative of KPMG will participate in the Meeting. Such representative may make a statement if they desirehe or she desires to do so and will be available to respond to appropriate questions concerning our financial statements.

LOGO

The Board recommends a voteFOR the ratification of the Audit Committee’s appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2017.

62Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement2019.


PROPOSAL 5—APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE CHENIERE ENERGY, INC. 2011 INCENTIVE PLAN

On April 13, 2017, the Board unanimously approved an amended and restated 2011 Plan (the “Amended and Restated 2011 Plan”), subject to shareholder approval. The Amended and Restated 2011 Plan will be effective on May 18, 2017 (the “Effective Date”) if it is approved by our shareholders at the 2017 Annual Meeting.

The Amended and Restated 2011 Plan will apply only to awards granted on or after the Effective Date. The terms and conditions of awards granted under the 2011 Plan prior to the Effective Date will not be affected by the adoption or approval of the Amended and Restated 2011 Plan. If the Amended and Restated 2011 Plan is not approved by our shareholders at the 2017 Annual Meeting, then the 2011 Plan will remain in effect on the terms in force prior to the 2017 Annual Meeting with the proposed amendments to the 2011 Plan not taking effect.

Best Practices

The Amended and Restated 2011 Plan revises the 2011 Plan to incorporate several features designed to protect shareholder interests and promote current best practices, including:

Minimum Vesting Requirements: All awards under the Amended and Restated 2011 Plan will be subject to a minimum vesting schedule of at least 12 months following the date of grant of the award; provided, however, that up to 5% of the shares underlying awards granted after the Effective Date may be subject to vesting schedules of less than 12 months. For purposes of this minimum vesting requirement, awards granted to non-employee directors in respect of regular annual fees will be deemed to satisfy the requirement, even if the regular annual shareholder meeting at which the award would vest is not at least 12 months following the grant date of the award.

No Dividend Payments on Unvested Awards: No award granted under the Amended and Restated 2011 Plan may provide for the payment of dividends or dividend equivalents before the date on which the award vests.

Clawbacks: Awards under the Amended and Restated 2011 Plan will be subject to any clawback or recapture policy that the Company may adopt from time to time or any clawback or recapture provisions set forth in an award agreement to the extent provided in such policy or agreement.

Share Counting: The Amended and Restated 2011 Plan clarifies that the following will not remain available for awards under the Amended and Restated 2011 Plan: (1) any shares withheld in respect of taxes; (2) any shares tendered or withheld to pay the exercise price of stock options; (3) any shares repurchased by the Company from a participant with the proceeds from the exercise of options; and (4) any shares reserved for issuance under a stock appreciation right award that exceed the number of shares actually issued upon exercise.

Director Grant Limit: Nonon-employee director may be granted in any calendar year awards under the Amended and Restated 2011 Plan in respect of regular annual fees (excluding, for the avoidance of doubt, any special orone-time awards) with an aggregate grant date fair value exceeding $495,000.

Section 162(m) Performance Goals: The Amended and Restated 2011 Plan updates the performance criteria that the Compensation Committee may use in establishing goals for performance-based awards in accordance with Section 162(m) of the Code.

Additionally, the 2011 Plan contained several features considered to be best practices, which the Amended and Restated 2011 Plan retains:

No discounted stock options.

No repricing of options to reduce the exercise price without shareholder approval.

No “evergreen” provisions.

No transferability of unvested awards (other than by will or the laws of descent and distribution).

The Amended and Restated 2011 Plan is otherwise generally consistent with the 2011 Plan, except for certain revisions to conform the terms of the plan with the Company’s severance plans, which were amended and restated on February 17, 2017.The Amended and Restated 2011 Plan doesnot increase the number of shares that may be granted under the 2011 Plan.

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement63


Burn Rate and Overhang Disclosure

The Company’s historical share usage under its equity compensation plans (sometimes referred to as “burn rate”) and the potential dilution of the Company’s shareholders that could occur with respect to the Company’s equity plans (sometimes referred to as “overhang”) are summarized below.

“Burn rate’” is a calculation of shares used (granted) during the year divided by weighted average shares outstanding. The Company’s three year average burn rate, expressed as a percentage of common shares outstanding, was approximately 0.12% for the three year period ending December 31, 2016. During the past two years, stock-based awards have been limited because we used phantom units settled in cash for our long-term performance awards. If we were to include these phantom unit awards in our calculation of the burn rate, it would have been approximately 1.25% for the three year period ending December 31, 2016. In 2017, the Company anticipates a burn rate of less than 1%.

Overhang is a calculation of total potential dilution attributable to equity-based compensation and reflects the shares reserved for all outstanding (unvested) grants plus shares available for future grants as a percent of common shares outstanding. As of December 31, 2016, the total overhang with respect to the Company’s equity plans and unvested awards, expressed as a percentage of common shares outstanding, was approximately 6%.

The following table outlines the share reservations and issuances under all of our outstanding equity compensation plans as of the Record Date. As of the Record Date, there were 237,859,646 shares of common stock of the Company outstanding.

 

  Shares authorized under outstanding equity compensation plans(1)

  56,236,381

  Shares issued

 41,403,476

  Shares issuable under stock option awards outstanding

  Shares issuable under restricted stock awards outstanding

582,242

  Shares issuable under restricted stock awards outstanding that are performance based(2)

4,912,317

  Shares issuable under RSU awards outstanding

943,830

  Shares issuable under PSU awards outstanding that are performance based(2)

396,310

  Shares available to be issued under equity compensation plans

7,254,127

(1)        This amount includes authorized shares under our 2003 Plan, 2011 Plan and 2015 Employee Inducement Plan.

(2)        The entire amount listed is unearned.

Voting Standard

To be approved, Proposal 5 to approve the Amended and Restated 2011 Plan must receive the approval of a majority of the shares present and entitled to vote on the proposal, meaning that the number of votes “for” Proposal 5 must exceed the number of votes “against” it. Abstentions will be counted as the functional equivalent of “no” votes and brokernon-votes will not be considered in determining the outcome of Proposal 5, but will be counted for purposes of establishing a quorum. If you are a beneficial owner, your bank, broker or other holder of record may not vote your shares with respect to Proposal 5 without specific instructions from you because Proposal 5 is not considered a “routine” matter.

Recommendation of the Board of Directors

The Board recommends a voteFOR approval of Proposal 5 to approve the Cheniere Energy, Inc. 2011 Incentive Plan, as amended.

Summary of the Amended and Restated 2011 Plan

Below is a summary of the material terms of the Amended and Restated 2011 Plan. The full text of the Amended and Restated 2011 Plan is attached as Appendix A to this Proxy Statement. The statements made in this Proxy Statement with respect to the Amended and Restated 2011 Plan should be read in conjunction with, and are qualified in their entirety by reference to, the full text of the Amended and Restated 2011 Plan attached as Appendix A to this Proxy Statement.

Purpose of the Amended and Restated 2011 Plan

The Amended and Restated 2011 Plan is designed to promote the interests of the Company and our shareholders by offering employees, consultants andnon-employee directors of the Company or its affiliates an opportunity to participate in the growth

64Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


and financial success of the Company and in performance-related incentives. A further purpose of the Amended and Restated 2011 Plan is to provide the Company and its affiliates an opportunity to attract and retain the best available individuals needed for the continued growth and success of the Company. Accordingly, the Amended and Restated 2011 Plan provides for the following:

discretionary grants to employees of the Company or our affiliates of stock options that constitute incentive stock options (“Incentive Stock Options”) as defined in Section 422 of the Code; and

discretionary grants to employees, consultants, andnon-employee directors of the Company or our affiliates of: (a) stock options that do not constitute Incentive Stock Options(“Non-qualified Stock Options”); (b) shares of common stock for a purchase price, if any, determined by the Committee (as described below) that are not subject to forfeiture (“Bonus Stock Awards”); (c) the right to receive shares of common stock or cash payments, each up to the amount by which the fair market value of a share of common stock on the date of exercise exceeds the grant price of a share of common stock on the date the stock appreciation right was granted (“Stock Appreciation Rights”); (d) the right to receive a specified number of shares of common stock or cash equal to the fair market value of a specified number of shares of common stock at the end of a Restricted Period (as defined in the Amended and Restated 2011 Plan) or on the last day of a specified deferral period (“Phantom Stock Awards” or “Restricted Stock Units”); (e) shares of common stock that are subject to restrictions on disposition and forfeiture to the Company under certain circumstances (“Restricted Stock Awards”); (f) cash and/or stock payments that may be earned based on the satisfaction of various performance measures (“Performance Awards”); and (g) other stock or performance-based awards (“Other Stock or Performance-Based Awards”).

We believe the Amended and Restated 2011 Plan is a valuable compensation component for the Company and helps further the success of the Company by aligning the financial interests of employees, consultants andnon-employee directors with those of the Company and our shareholders through ownership of the Company’s common stock.

Historical Grant Information

As of the Record Date, there were 7,254,127 shares of common stock available for issuance under the Amended and Restated 2011 Plan. An aggregate of 21,383,257 shares of common stock were issued under the Amended and Restated 2011 Plan and 6,362,616 shares of common stock are issuable upon the vesting of outstanding restricted stock awards, RSU awards and PSU awards under the Amended and Restated 2011 Plan as of the Record Date. Based on 237,859,646 shares of common stock issued and outstanding on the Record Date, the shares currently available for issuance under the Amended and Restated 2011 Plan represent about 3% of the Company’s outstanding shares.

Administration

The Amended and Restated 2011 Plan is administered by the Compensation Committee or, if there is no Compensation Committee at any relevant time, by the Board. With respect to any award granted to a Covered Employee (as described below) that is intended to be “performance-based compensation” for purposes of Section 162(m) of the Code, the Section 162(m) Subcommittee, which is comprised solely of two or morenon-employee directors who also qualify as “outside directors” (as described under Section 162(m) of the Code) makes performance-based award decisions. References herein to the “Committee” mean the Section 162(m) Committee, or the Compensation Committee or Board, along with the Equity Grant Committee and the Option Grant Committee described below, as applicable. A Covered Employee is the CEO of the Company and each other officer of the Company that is required to be treated as a “covered employee” for purposes of applying Section 162(m) of the Code to awards.

The Committee has full authority, subject to the terms of the Amended and Restated 2011 Plan, to establish rules that it deems relevant for the proper administration of the Amended and Restated 2011 Plan, to select the employees, consultants andnon-employee directors to whom awards are granted, and to set the type and size of awards that are made and the other terms of the awards. When granting awards, the Committee may consider any factors that it deems relevant.

The Board has established an Equity Grant Committee and has appointed the President and CEO of the Company as the sole member of that Committee of the Board to act on behalf of the Board and the Compensation Committee to grant Restricted Stock Awards, Restricted Stock Units andNon-qualified Stock Options to eligible employees and consultants (other than executive officers of the Company or our affiliates, including Covered Employees, andnon-employee directors).

Restricted Stock Awards and Restricted Stock Units in the aggregate granted by the Equity Grant Committee in a calendar year cannot exceed 150,000 shares of restricted stock per recipient or an aggregate of 600,000 shares of restricted stock to all recipients.

Non-qualified Stock Option awards granted by the Equity Grant Committee in a calendar year cannot exceed 450,000 stock options per recipient or an aggregate of 3,000,000 stock options to all recipients (reduced by the number of shares of common stock covered byNon-qualified Stock Options granted by the Option Grant Committee for the calendar year).

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement65


The Board also has established an Option Grant Committee and has appointed the President and CEO of the Company as the sole member of that Committee to act on behalf of the Board and the Compensation Committee to grantNon-qualified Stock Options to eligible employees and consultants (other than executive officers of the Company or our affiliates, including Covered Employees, andnon-employee directors).

Non-qualified Stock Option awards made by the Option Grant Committee in a calendar year cannot exceed 450,000 stock options per recipient or an aggregate of 3,000,000 stock options to all recipients (reduced by the number of shares of common stock covered byNon-qualified Stock Options granted by the Equity Grant Committee for that calendar year).

The Compensation Committee may periodically ratify all stock options and Restricted Stock Awards granted by the Equity Grant Committee and the Option Grant Committee.

Limitation on Individual Awards

In addition to the above limits, the Amended and Restated 2011 Plan provides that no individual may be granted, in any calendar year, awards covering or relating to an aggregate of 6,000,000 shares of common stock under the Amended and Restated 2011 Plan, of which no more than 6,000,000 shares of common stock may be granted in the form of stock options or Stock Appreciation Rights. With respect to cash awards, the Amended and Restated 2011 Plan provides that no individual may receive payment for cash awards during any calendar year aggregating in excess of $25 million. Additionally, nonon-employee director may be granted, in any calendar year, awards under the Amended and Restated 2011 Plan in respect of regular annual fees with an aggregate grant date fair value exceeding $495,000.

Eligibility

All employees, consultants, andnon-employee directors of the Company and our affiliates are eligible to participate in the Amended and Restated 2011 Plan. The selection of employees, consultants, andnon-employee directors, from among those eligible, who will receive Incentive Stock Options,Non-qualified Stock Options, Bonus Stock Awards, Stock Appreciation Rights, Phantom Stock Awards, Restricted Stock Awards, Restricted Stock Unit Awards, Performance Awards, Other Stock or Performance-Based Awards, or any combination thereof is within the discretion of the Committee. However, Incentive Stock Options may be granted only to employees of the Company or our affiliates. As of the Record Date, there were approximately 900 employees, 100 consultants and tennon-employee directors eligible to participate in the Amended and Restated 2011 Plan.

Term of Amended and Restated 2011 Plan

The Amended and Restated 2011 Plan became effective on June 16, 2011. If not sooner terminated, the Amended and Restated 2011 Plan will terminate on the earlier of the tenth anniversary of the effective date or the date on which no shares of common stock subject to the Amended and Restated 2011 Plan remain available to be granted as awards under the Amended and Restated 2011 Plan, and no further awards may be granted thereafter. The Board, in its discretion, may terminate the Amended and Restated 2011 Plan at any time with respect to any shares of common stock for which awards have not theretofore been granted.

Term of Awards

The term of any Incentive Stock Option,Non-qualified Stock Option, Stock Appreciation Right or Other Stock or Performance-Based Award may not exceed a period of ten years.

Stock Options

a.Term of Option. The term of each stock option is as specified by the Committee at the date of grant but cannot exceed ten years.

b.Acceleration of Vesting. Unless an individual award agreement or then-effective employment agreement between the Company and the participant or plan provides otherwise, stock options vest in full at achange-in-control of the Company (as defined in the Amended and Restated 2011 Plan), termination upon death or disability (as defined in the Amended and Restated 2011 Plan) or such other events as the Committee determines. Additionally, in the event of an involuntary termination by the Company (or removal of anon-employee director) without cause, unless specifically provided to the contrary by the Committee in another agreement or plan: (1) any unvested stock options granted at least six months prior to termination or removal that are not subject to performance-vesting conditions will vest in full; and (2) a pro rata portion of any unvested stock options granted at least six months prior to termination or removal that are subject to performance-vesting conditions will remain outstanding and vest based on the actual performance levels. The vesting described in the preceding sentence is subject to the participant’s execution of a release of claims in the form provided by the Company.

c.Exercise Price. The exercise price is determined by the Committee and can be no less than the fair market value of the shares of common stock covered by the stock option on the date the stock option is granted.

66Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


d.Special Rules for Certain Shareholders. If an Incentive Stock Option is granted to an employee who then owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or a subsidiary, the term of the stock option cannot exceed five years, and the exercise price must be at least 110% of the fair market value of the shares on the date that the stock option is granted.

e.Size of Grant. Subject to the aggregate maximum number of shares available to be granted under the Amended and Restated 2011 Plan and the limit on individual awards provided for in the Amended and Restated 2011 Plan, the number of shares for which a stock option is granted to an employee, consultant ornon-employee director is determined by the Committee. The Committee may adjust the number and kind of shares for which a stock option is granted to reflect certain corporate transactions and changes in capitalization.

f.Status of Stock Options. The status of each stock option granted to an employee as either an Incentive Stock Option or aNon-qualified Stock Option is designated by the Committee at the time of grant. If, however, the aggregate fair market value (determined as of the date of grant) of shares with respect to which Incentive Stock Options become exercisable for the first time by an employee exceeds $100,000 in any calendar year, the stock options with respect to the excess shares areNon-qualified Stock Options. All stock options granted to consultants andnon-employee directors areNon-qualified Stock Options.

g. Payment. The Committee may determine the method by which the stock option price may be paid upon exercise, including in cash, by check, or by delivery of other shares of our common stock owned by the optionee. The Amended and Restated 2011 Plan also allows the Committee, in its discretion, to establish procedures pursuant to which an optionee may effect a cashless or net exercise of a stock option.

h.Amendment. The Committee may modify, extend or renew a stock option subject to the terms and conditions of the Amended and Restated 2011 Plan, and where applicable, with the written consent of the affected option holder.

i.Transferability. An Incentive Stock Option is not transferable other than by will or the laws of descent and distribution, and may be exercised during the employee’s lifetime only by the employee or his or her guardian or legal representative. ANon-qualified Stock Option is not transferable other than by will or the laws of descent and distribution, or with the consent of the Committee, to one or more immediate family members or related family trusts or partnerships or similar entities, subject to securities registration requirements.

j.Limitations on Exercise. No Incentive Stock Option may be exercised more than: (i) three months after the optionee ceases to perform continuous service for the Company for any reason other than death or disability (as defined in the Amended and Restated 2011 Plan); or (ii) one year after the optionee ceases to perform continuous service for the Company due to death or disability. NoNon-qualified Stock Option may be exercised more than: (i) six months after the optionee ceases to perform continuous service for the Company for any reason other than death or disability; or (ii) one year after the optionee ceases to perform continuous service for the Company due to death or disability. If an optionee’s continuous service with the Company is terminated for cause (as defined in the Amended and Restated 2011 Plan), the option will immediately terminate.

k.Other Terms and Conditions. The Committee may establish other terms and conditions regarding the grant ofNon-qualified Stock Options and Incentive Stock Options that are consistent with the terms of the Amended and Restated 2011 Plan.

Bonus Stock Awards

The Committee may grant shares of our common stock to employees, consultants andnon-employee directors on terms and conditions and for such payment, if any, as established by the Committee on the date of grant, which grant will constitute a transfer of unrestricted shares of common stock to such recipients.

Stock Appreciation Rights

a.Rights Related to Stock Options. A Stock Appreciation Right granted in connection with a stock option entitles the participant to surrender all or part of the stock option for a cash payment at such time and to the extent such stock option is exercisable. Any such Stock Appreciation Right is transferable only to the extent the related stock option is transferable.

b.Rights Without Stock Options. A Stock Appreciation Right granted independently of a stock option is exercisable at such time and in such manner as determined by the Committee and set forth in the applicable award agreement.

c.Exercise Price. The exercise price is determined by the Committee and can be no less than the fair market value of the shares of common stock subject to the Stock Appreciation Right on the date the Stock Appreciation Right is granted.

d.Other Terms and Conditions. The Committee determines at the date of grant the times at which and the circumstances under which a Stock Appreciation Right may be exercised (including based on achievement of performance goals and/or future service

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement67


requirements), the method of exercise, whether the Stock Appreciation Right is in combination with another award, whether the Stock Appreciation Right will be settled in cash, shares of common stock, or a combination of cash and stock, and any other terms and conditions of the Stock Appreciation Right under the Amended and Restated 2011 Plan.

e.Other Terms and Conditions. The Committee may establish other terms and conditions with respect to the grant of Stock Appreciation Rights under the Amended and Restated 2011 Plan.

Phantom Stock Awards

a. Restrictions and Forfeiture. Phantom Stock Awards under the Amended and Restated 2011 Plan are subject to such restrictions (which may include a risk of forfeiture) as the Committee may impose. A Phantom Stock Award terminates if the recipient’s employment with or service to the Company terminates during the applicable restricted or deferral period, except as otherwise determined by the Committee or set forth in any agreement or plan pertaining to a Phantom Stock Award. A Phantom Stock Award may be paid at the end of the restricted period or the last day of a deferral period in the form of shares of the Company’s common stock or cash.

b.Performance Goals. If the Committee determines a Phantom Stock Award constitutes performance-based compensation for purposes of Section 162(m) of the Code or otherwise determines that a Phantom Stock Award will be subject to performance measures, the grant or settlement of the award will, in the Committee’s discretion, be subject to the achievement of performance goals as described under the section entitled “Performance Awards” below.

c.Other Terms and Conditions. The Committee may establish other terms and conditions regarding the grant of Phantom Stock Awards under the Amended and Restated 2011 Plan.

Restricted Stock Awards

a.Transfer Restrictions and Forfeiture Obligations. Restricted Stock Awards are subject to certain restrictions on the disposition thereof and certain obligations to forfeit and surrender such shares to the Company as may be determined in the discretion of the Committee. The Company may purchase or recover such shares for the amount of cash paid therefore, if any, if: (i) the participant terminates his or her employment with or service to the Company prior to the lapse of such restrictions, subject to accelerated vesting; or (ii) the Restricted Stock Award is forfeited by the participant pursuant to the terms of the award. Upon the issuance of shares of common stock pursuant to a Restricted Stock Award, except for the foregoing restrictions and unless otherwise provided, the recipient of the award will have all of the rights of a shareholder of the Company with respect to such shares, including the right to vote such shares, but prior to the lapse of such restrictions, the participant will not be entitled to delivery of the shares and the participant may not sell, transfer, assign or otherwise dispose of such shares. During the period of restriction, all dividends (whether ordinary or extraordinary and whether paid in cash, additional shares or other property) or other distributions paid upon any Restricted Stock Award will be retained by the Company for the account of the participant. Such dividends or other distributions will revert back to the Company if, for any reason, the Restricted Stock Award reverts back to the Company. Upon the expiration of the Forfeiture Restrictions, all dividends or other distributions made on the Restricted Stock Award and retained by the Company will be paid, without interest, to the participant.

b.Acceleration of Vesting. Unless the individual award agreement or then-effective employment agreement between the Company and the participant or plan provides otherwise and subject to limitations contained in the Amended and Restated 2011 Plan relating to awards that are intended to satisfy the performance-based compensation rules of Section 162(m) of the Code, any unvested shares of a Restricted Stock Award vest in full on the occurrence ofchange-in-control of the Company (as defined in the Amended and Restated 2011 Plan), or termination as a result of death or disability (as defined in the Amended and Restated 2011 Plan). Additionally, in the event of an involuntary termination by the Company (or removal of anon-employee director) without cause, unless specifically provided to the contrary by the Committee in another agreement or plan: (1) any unvested shares of a Restricted Stock Award granted at least six months prior to termination or removal that are not subject to performance-vesting conditions will vest in full; and (2) a pro rata portion of any unvested shares of a Restricted Stock Award granted at least six months prior to termination or removal that are subject to performance-vesting conditions will remain outstanding and vest in full based on the actual performance levels. The vesting described in the preceding sentence is subject to the participant’s execution of a release of claims in the form provided by the Company.

c. Other Terms and Conditions. The Committee may establish other terms and conditions of the grant of Restricted Stock Awards under the Amended and Restated 2011 Plan.

Restricted Stock Unit Awards

a. Restrictions and Forfeiture. Restricted Stock Unit Awards under the Amended and Restated 2011 Plan are subject to such restrictions (which may include a risk of forfeiture) as the Committee may impose. A Restricted Stock Unit Award terminates if the

68Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


recipient’s employment with or service to the Company terminates during the applicable restricted or deferral period, except as otherwise determined by the Committee or set forth in any agreement or plan pertaining to a Restricted Stock Unit Award. A Restricted Stock Unit Award may be paid at the end of the restricted period or the last day of a deferral period in the form of shares of the Company’s common stock or cash.

b.Acceleration of Vesting.Unless an individual award agreement or then-effective employment agreement between the Company and the participant or plan provides otherwise, restricted stock units vest at achange-in-control of the Company, termination upon death or disability or such other events as the Committee determines. Additionally, in the event of an involuntary termination by the Company (or removal of anon-employee director) without cause, unless specifically provided to the contrary by the Committee in another agreement or plan: (1) any unvested Restricted Stock Unit Awards granted at least six months prior to termination or removal that are not subject to performance-vesting conditions will vest in full; and (2) a pro rata portion of any unvested Restricted Stock Unit Awards granted at least six months prior to termination or removal that are subject to performance-vesting conditions will remain outstanding and vest based on the actual performance levels. The vesting described in the preceding sentence is subject to the participant’s execution of a release of claims in the form provided by the Company.

c.Performance Goals. If the Committee determines a Restricted Stock Unit Award constitutes performance-based compensation for purposes of Section 162(m) of the Code or otherwise determines that a Restricted Stock Unit Award will be subject to performance measures, the grant or settlement of the award will, in the Committee’s discretion, be subject to the achievement of performance goals as described under the section entitled “Performance Awards” below.

d.Other Terms and Conditions. The Committee may establish other terms and conditions regarding the grant of Restricted Stock Unit Awards under the Amended and Restated 2011 Plan.

Performance Awards

a.Cash and Other Performance Awards. The Committee may grant cash awards that are rights to receive a cash payment upon the achievement of a single or multiple performance goals over a specified performance period established by the Committee. The Committee also may designate any form of award under the Amended and Restated 2011 Plan as a Performance Award that will be subject to the achievement of performance goals based on business criteria described below during a specified performance period.

b.Performance Period. The Committee may grant Performance Awards under the Amended and Restated 2011 Plan that may be paid in common stock, cash or a combination thereof as determined by the Committee. Achievement of performance goals in respect of Performance Awards may be measured based on performance over a Performance Period, as specified by the Committee, or may be determined based on whether or not the performance goals are satisfied at any time prior to the expiration of a Performance Period. In the case of a performance goal measured over a Performance Period, the Committee will determine the amount, if any, of Performance Awards payable to each Participant based upon achievement of the business criteria over a Performance Period at or after the end of the Performance Period. In the case of a performance goal satisfied based upon whether or not certain specified business criteria are achieved at any time during a Performance Period, at or following the satisfaction of the applicable business criteria (even if prior to the expiration of the applicable Performance Period), the Committee will determine the amount, if any, of Performance Awards payable to each Participant upon the achievement of the applicable business criteria.

c. Performance Goals. The Committee uses one or more of the following business criteria in establishing performance goals for Performance Awards expressed in terms of Company-wide objectives or in terms of objectives that relate to the performance of specified subsidiaries, divisions or business or geographical units of the Company, or one or more product lines of the Company’s business: earnings per share; revenue (including increased revenues); profit measures (including gross profit, operating profit, economic profit, net profit before taxes and adjustedpre-tax profit); cash flow measures (including cash flow return on capital, cash flow return on tangible capital, net cash flow, distributable cash flow, distributable cash flow per share and net cash flow before financing activities); return measures (including return on equity, return on assets, return on capital, risk-adjusted return on capital, return on investors’ capital and return on average equity); economic value added; gross margin; net income measures (including income after capital costs and income before or after taxes); earnings; pretax earnings; earnings before interest, taxes, depreciation and amortization (“EBITDA”) or adjusted EBITDA; earnings before taxes and depreciation (“EBTD”); earnings before interest and taxes (“EBIT”); pretax operating earnings after interest expense and before incentives, service fees, and extraordinary or special items; operating measures (including operating income, funds from operations, cash from operations,after-tax operating income; sales volumes, production volumes and production efficiency); stock price measures (including growth measures and total stockholder return); debt reduction; price per share of Common Stock; market share; earnings per share or adjusted earnings per share (actual or growth in); economic value added (or an equivalent metric); market value added; debt to equity ratio; expense measures (including overhead cost and general and administrative expense); changes in working capital;

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement69


margins; stockholder value; proceeds from dispositions; total market value; customer satisfaction or growth and contracted LNG quantity; and implementation, completion or attainment of measurable objectives with respect to financing or construction of entire projects or stages of projects. Any of the above business criteria may be determined on an absolute or relative basis or as compared to the performance of a published or special index. The Committee may determine that certain items, events or occurrences, including unusual or nonrecurring items, changes in accounting standards or tax laws, or other adjustments will be added to or excluded from the calculation of any of the business criteria set forth above, subject to the requirements of Section 162(m) of the Code to the extent applicable.

d.Payment. Following the end of the performance period, the Committee determines and certifies in writing the amount payable to the holder of the Performance Award based on the achievement of the performance measures for such performance period. Payments are made in cash, common stock or a combination thereof as determined by the Committee. The Committee may exercise its discretion to increase amounts payable under any Performance Award except for awards designed to comply with Section 162(m) of the Code.

e.Performance Awards Under Section 162(m) of the Code. A Performance Award granted to a person designated by the Committee who is likely to be a Covered Employee constitutes “performance-based compensation” within the meaning of Section 162(m) of the Code, and the terms of such awards are to be subject to and interpreted consistently with Section 162(m) of the Code, including the timing for establishing the performance goals and requirement that the settlement of the awards be contingent on achievement of the performance goals, as certified by the Committee.

f.Other Terms and Conditions. The Committee may establish other terms and conditions for Performance Awards under the Amended and Restated 2011 Plan, subject to the special rules relating to Performance Awards under Section 162(m) of the Code.

Other Stock or Performance-Based Awards

a.General. The Committee may grant to employees, consultants andnon-employee directors Other Stock or Performance-Based Awards which consist of a right denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of our common stock or cash.

b. Other Terms and Conditions. The Committee may establish such terms and conditions for Other Stock or Performance-Based Awards under the Amended and Restated 2011 Plan as it determines appropriate. The term of any such award may not exceed ten years.

Amendments

The Board may amend, suspend or terminate the Amended and Restated 2011 Plan; however, any change that would terminate an award or impair the rights of a participant in any material respect with respect to an award previously granted requires the participant’s consent. Furthermore, any amendment which would constitute a “material revision” of the Amended and Restated 2011 Plan (as that term is used in the rules of the NYSE MKT LLC) or to the extent necessary to comply with the Code, including Sections 162(m) and 422 of the Code, is subject to shareholder approval.

General Provisions Applicable to All Awards

All awards under the Amended and Restated 2011 Plan will be subject to a minimum vesting schedule of at least 12 months following the date of grant of the award, provided that up to 5% of the shares underlying awards granted after the Effective Date may be subject to vesting schedules of less than 12 months. For purposes of this minimum vesting requirement, awards granted to non-employee directors in respect of regular annual fees will be deemed to satisfy the requirement, even if the regular annual shareholder meeting at which the award would vest is not at least 12 months following the grant date of the award. No award may provide for the payment of dividends or dividend equivalents before the date on which the award vests. Awards under the Amended and Restated 2011 Plan will be subject to any clawback or recapture policy, if any, that the Company may adopt from time to time or any clawback or recapture provisions set forth in an award agreement to the extent provided in such policy or agreement.

Federal Income Tax Aspects of the Amended and Restated 2011 Plan

The following is a brief summary of certain of the U.S. federal income tax consequences of certain transactions under the Amended and Restated 2011 Plan as normally operated and is not intended to provide or supplement tax advice to eligible employees, consultants or directors. The summary contains general statements based on current U.S. federal income tax statutes, regulations and currently available interpretations thereof. This summary is not intended to be exhaustive and does not describe state, local or foreign tax consequences or the effect, if any, of gift, estate and inheritance taxes.

70Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Incentive Stock Options. Incentive Stock Options are subject to special federal income tax treatment. No federal income tax is imposed on the optionee upon the grant of an Incentive Stock Option. The optionee would recognize no ordinary taxable income upon exercise of an Incentive Stock Option or later disposition of shares acquired pursuant to his or her exercise of an Incentive Stock Option if the optionee: (a) does not dispose of the shares acquired pursuant to the exercise within thetwo-year period beginning on the date that the stock option was granted or within theone-year period beginning on the date that the stock option was exercised (collectively, the “holding period”); and (b) is an employee of the Company or any of our subsidiaries at all times beginning on the date of grant and ending on the date three months before the date of exercise. With respect to an Incentive Stock Option, the difference between the fair market value of the stock on the date of exercise and the exercise price must generally be included in the optionee’s alternative minimum taxable income for the year in which such exercise occurs. However, if the optionee exercises an Incentive Stock Option and disposes of the shares received in the same taxable year and the amount realized is less than the fair market value of the shares on the date of exercise, then the amount included in the alternative minimum taxable income of the optionee will not exceed the amount realized over the adjusted basis of the shares.

Upon disposition of the shares received upon exercise of an Incentive Stock Option after the holding period, any appreciation of the shares above the exercise price should constitute capital gain. In such event, the Company would not be entitled to any deduction for federal income tax purposes in connection with the grant or exercise of the Incentive Stock Option or the disposition of the shares so acquired. If an optionee disposes of shares acquired pursuant to his or her exercise of an Incentive Stock Option prior to the end of the holding period, the optionee will be treated as having received, at the time of disposition, compensation taxable as ordinary income. In such event, and subject to the application of Section 162(m) of the Code as discussed below, the Company may claim a deduction for compensation paid at the same time and in the same amount as compensation is treated as received by the optionee. The amount treated as ordinary income is the excess of the fair market value of the shares at the time of exercise (or in the case of a sale in which a loss would be recognized, the amount realized on the sale if less) over the exercise price; any amount realized in excess of the fair market value of the shares at the time of exercise would be treated as short-term or long-term capital gain, depending on the holding period of the shares.

Non-qualified Stock Options and Stock Appreciation Rights. As a general rule, no federal income tax is imposed on the optionee upon the grant of aNon-qualified Stock Option such as those under the Amended and Restated 2011 Plan (whether or not including a Stock Appreciation Right), and the Company is not entitled to a tax deduction by reason of such grant. Generally, upon the exercise of aNon-qualified Stock Option, the optionee will be treated as receiving compensation taxable as ordinary income in the year of exercise in an amount equal to the excess of the fair market value of the shares of stock at the time of exercise over the option price paid for such shares. In the case of the exercise of a Stock Appreciation Right, the optionee will be treated as receiving compensation taxable as ordinary income in the year of exercise in an amount equal to the cash received and/or the fair market value of the shares distributed to the optionee, determined based on the excess of the fair market value of the shares of common stock covered by the portion of the Stock Appreciation Rights being exercised over the exercise price for such shares. Upon the exercise of aNon-qualified Stock Option or a Stock Appreciation Right, and subject to the application of Section 162(m) of the Code as discussed below, the Company may claim a deduction for compensation paid at the same time and in the same amount as compensation income is recognized by the optionee assuming any federal income tax reporting requirements are satisfied.

Upon a subsequent disposition of the shares received upon exercise of aNon-qualified Stock Option or a Stock Appreciation Right, any difference between the fair market value of the shares at the time of exercise and the amount realized on the disposition would be treated as capital gain or loss.

Restricted Stock Awards. Subject to the special rules discussed below relating to elections made under Section 83(b) of the Code, the recipient of a Restricted Stock Award will not realize taxable income at the time of grant, and the Company will not be entitled to a deduction at that time, assuming that the restrictions applicable to the award constitute a substantial risk of forfeiture for federal income tax purposes. When the risk of forfeiture with respect to the stock subject to the award lapses and the individual vests in the underlying shares, the holder will realize ordinary income in an amount equal to the fair market value of the shares of common stock at such time, and, subject to Section 162(m) of the Code, the Company will be entitled to a corresponding deduction. All dividends and distributions (or the cash equivalent thereof) with respect to a Restricted Stock Award paid to the holder before the risk of forfeiture lapses will also be compensation income to the holder when paid and, subject to Section 162(m) of the Code, deductible as such by the Company.

Upon a subsequent disposition of the shares received pursuant to a Restricted Stock Award, other than a share for which the Section 83(b) election is made as discussed below, the difference between the amount realized on the disposition of the shares and the fair market value of the shares on the date the substantial risk of forfeiture lapsed would be treated as a capital gain or loss.

Notwithstanding the foregoing, the holder of a Restricted Stock Award may elect under Section 83(b) of the Code to be taxed at the time of grant of the Restricted Stock Award (rather than the date on which the substantial risk of forfeiture lapses) based on the fair market value of the shares of common stock on the date of the award, in which case (a) subject to Section 162(m) of the Code,

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement2019 PROXY STATEMENT 71


the Company will be entitled to a deduction at the same time and in the same amount, (b) dividends paid to the recipient during the period the forfeiture restrictions apply will be taxable as dividends and will not be deductible by the Company, and (c) there will be no further federal income tax consequences when the risk of forfeiture lapses. Such election must be made not later than 30 days after the grant of the Restricted Stock Award and is irrevocable.

Upon a subsequent disposition of Restricted Stock Award shares for which the Section 83(b) election is made, the difference between the fair market value of the shares on the disposition date and the fair market value of the shares on the date of grant would be treated as a capital gain or loss.

Performance Awards, Phantom Stock Awards and Other Stock or Performance-Based Awards. An individual who has been granted a Performance Award, Phantom Stock Award or Other Stock or Performance-Based Award generally will not realize taxable income at the time of grant, and the Company will not be entitled to a deduction at that time. Whether a Performance Award, Phantom Stock Award or Other Stock or Performance-Based Award is paid in cash or shares of common stock, the individual will have taxable compensation and, subject to the application of Section 162(m) of the Code as discussed below, the Company will have a corresponding deduction. The measure of such income and deduction will be the amount of any cash paid and the fair market value of any shares of common stock either at the time the Performance Award, Phantom Stock Award or Other Stock or Performance-Based Award is paid or at the time any restrictions on the shares (including restrictions under Section 16(b) of the Exchange Act) subsequently lapse, depending on the nature, if any, of the restrictions imposed and whether the individual elects to be taxed without regard to any such restrictions. Any dividend equivalents paid with respect to a Performance Award, Phantom Stock Award, or Other Stock or Performance-Based Award prior to the actual issuance of shares under the award will be compensation income to the individual and, subject to the application of Section 162(m) of the Code as discussed below, deductible as such by the Company.

Upon a subsequent disposition of the shares received pursuant to a Performance Award, Phantom Stock Award or Other Stock or Performance-Based Award, the difference between the amount realized on the disposition of the shares and the fair market value of the shares on the vest date would be treated as a capital gain or loss.

Bonus Stock Awards. In general, a participant who receives a Bonus Stock Award will be taxed on the fair market value of the shares of common stock on the date the shares are issued to the individual, less any amount paid by the participant for the shares of stock. The Company will be entitled to a deduction for a corresponding amount. Upon a subsequent disposition of the shares received pursuant to a Bonus Stock Award, the difference between the amount realized on the disposition of the shares and the fair market value of the shares on the award date would be treated as a capital gain or loss.

Section 162(m) of the Code. Section 162(m) of the Code as interpreted by the Internal Revenue Service precludes a public corporation from taking a deduction for annual compensation in excess of $1,000,000 paid to its chief executive officer and any of its three other highest-paid executives, excluding the chief financial officer, who are employed as of the end of the year. However, compensation that qualifies under Section 162(m) of the Code as “performance-based” is specifically exempt from the deduction limit. Based on Section 162(m) of the Code and the regulations issued thereunder, the Company’s ability to deduct compensation expense generated in connection with the exercise of Incentive Stock Options,Non-qualified Stock Options and Stock Appreciation Rights granted by the Committee under the Amended and Restated 2011 Plan with an exercise price that is not less than the fair market value of our common stock on the grant date should not be limited by Section 162(m) of the Code. Furthermore, the Company believes that compensation expense generated in connection with Performance Awards designated by the Committee as performance-based compensation granted by the Committee under the Amended and Restated 2011 Plan should not be limited by Section 162(m) of the Code. The Amended and Restated 2011 Plan has been designed to provide flexibility with respect to whether Restricted Stock Awards or Phantom Stock Awards granted by the Committee will qualify as performance-based compensation under Section 162(m) of the Code and, therefore, be exempt from the deduction limit. Assuming no election is made under Section 83(b) of the Code with respect to a Restricted Stock Award, if the lapse of the forfeiture restrictions relating to a Restricted Stock Award or Phantom Stock Award granted by the Committee is based solely upon the satisfaction of the performance goals based on one or more of the business criteria set forth in the Amended and Restated 2011 Plan and described above under the section entitled “Performance Awards”, then the Company believes that the compensation expense deduction relating to such an award should not be limited by Section 162(m) of the Code if the Restricted Stock Award or Phantom Stock Award becomes vested. However, compensation expense deductions relating to Restricted Stock Awards or Phantom Stock Awards granted by the Committee will be subject to the Section 162(m) deduction limitation if the Restricted Stock Award or Phantom Stock Award becomes vested based upon any other criteria set forth in such award (such as the occurrence of achange-in-control or vesting based solely upon continued service with the Company). Furthermore, the income generated in connection with all awards granted under the Amended and Restated 2011 Plan by the Equity Grant Committee and the Option Grant Committee will not qualify as performance-based compensation, but those committees are not authorized to grant awards to persons whose compensation is subject to Section 162(m) of the Code.

72Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Tax-Qualified Status of the Plan

The Amended and Restated 2011 Plan is not qualified under Section 401(a) of the Code.

Section 409A of the Internal Revenue Code

Some awards issued under the Amended and Restated 2011 Plan may be considerednon-qualified deferred compensation that is subject to special rules under Section 409A of the Code. In such event, the Committee intends to generally design and administer such award and the Amended and Restated 2011 Plan to comply with the rules of Section 409A of the Code; however, there is no commitment or guarantee that any federal, state, or local tax treatment will apply or be available to any person who participates in the Amended and Restated 2011 Plan.

Inapplicability of ERISA

Based upon current law and published interpretations, the Company does not believe that the Amended and Restated 2011 Plan is subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended.

Amended and Restated 2011 Plan Benefits

A new plan benefits table for the Amended and Restated 2011 Plan and the benefits or amounts that would have been received by or allocated to participants for the last completed fiscal year under the Amended and Restated 2011 Plan if the Amended and Restated 2011 Plan was then in effect, as described in the SEC proxy rules, are not provided because all awards made under the Amended and Restated 2011 Plan will be made at the Compensation Committee’s discretion, subject to the terms and conditions of the Amended and Restated 2011 Plan. Therefore, the benefits and amounts that will be received or allocated under the Amended and Restated 2011 Plan are not determinable at this time. Under Mr. Fusco’s employment agreement, for each fiscal year beginning with 2017, Mr. Fusco will be eligible to receive a long-term incentive award with a grant date value of 500% of his annual base salary.

The Board recommends a voteFOR the approval of the amendment and restatement of the Cheniere Energy, Inc. 2011 Incentive Plan.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Audit Committee, under the Audit Committee Charter, has the responsibility to review and approve any transactions or series of related financial transactions, arrangements or relationships involving amounts exceeding $120,000 between the Company and our directors, executive officers, nominees for director, any greater than 5% shareholders and their immediate family members. The Audit Committee will only approve related party transactions when it determines such transactions are in the best interests of the Company and its shareholders after considering the standards described below. In reviewing a transaction, the Audit Committee considers all facts and circumstances that it considers relevant to its determination. In determining whether to approve or ratify a related party transaction, the Audit Committee will apply the following standards, as provided in our Audit Committee Charter, and such other standards it deems appropriate:

 

whether the related party transaction is on terms no less favorable than the terms generally available to an unaffiliated third-party under the same or similar circumstances;

 

whether the transaction is material to the Company or the related party; and

 

the extent of the related person’s interest in the transaction.

In September 2007,The Company had no related party transactions in 2018.

72CHENIERE


FREQUENTLY ASKED QUESTIONS

WHY DID I RECEIVE THESE PROXY MATERIALS?

We are providing these proxy materials in connection with the Audit Committee retained independent counselsolicitation by the Board of proxies to be voted at our 2019 Annual Meeting of Shareholders and approvedany adjournment or postponement thereof.

You are invited to attend the Company entering intoMeeting on May 16, 2019, beginning at 9:00 a.m., Central Time. The Meeting will be held at the Company’s headquarters at 700 Milam Street, Suite 1900, Houston, Texas 77002.

This Notice of Annual Meeting (“Notice”), Proxy Statement, proxy card and 2018 Annual Report on Form10-K for the year ended December 31, 2018, are being mailed to shareholders on or about April 15, 2019.

DO I NEED A TICKET TO ATTEND THE MEETING?

You will need proof of your ownership of Cheniere common stock and valid government-issued picture identification to enter the Meeting.

If your shares are held beneficially in the name of a consulting agreement with Karim Souki,bank, broker or other holder of record and you plan to attend the brotherMeeting, you must present proof of Charif Souki, our former Chairman, CEO and President. The consulting agreement was most recently amended in December 2014,your ownership of Cheniere common stock as of the Record Date, such as a resultbank or brokerage account statement, to be admitted to the Meeting.

If you have any questions about attending the Meeting, you may contact Investor Relations at Investors@cheniere.com or713-375-5000.

No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted at the Meeting.

WHO IS ENTITLED TO VOTE AT THE MEETING?

Holders of Karim Souki being askedCheniere common stock at the close of business on the Record Date are entitled to establishreceive this Notice and to vote their shares at the Meeting. As of the Record Date, there were 257,390,300 shares of common stock outstanding and entitled to vote. Each share of common stock is entitled to one vote on each matter properly brought before the Meeting.

WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF RECORD AND AS A BENEFICIAL OWNER?

If your shares are registered directly in your name with Cheniere’s transfer agent, Computershare Trust Company, N.A., you are considered the “shareholder of record” of those shares. The Notice, Proxy Statement, proxy card and 2018 Annual Report on Form10-K for the year ended December 31, 2018, have been sent directly to you by Cheniere. If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the “beneficial owner” of such shares held in street name. The Notice, Proxy Statement, proxy card and 2018 Annual Report on Form10-K for the year ended December 31, 2018, have been forwarded to you by your broker, bank or other holder of record, who is considered the shareholder of record of those shares. As the beneficial owner, you have the right to direct your broker, bank or other holder of record on how to vote your shares by using the voting instruction card included in the mailing or by following their instructions for voting by telephone or on the Internet.

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GENERAL INFORMATION

HOW DO I VOTE?

You may vote using any of the following methods:

By mail

You may submit your proxy vote by mail by signing a proxy card if your shares are registered or, for shares held beneficially in street name, by following the voting instructions included by your broker, trustee or nominee, and mailing it in the enclosed envelope. If you provide specific voting instructions, your shares will be voted as you have instructed. If you do not indicate your voting preferences, your shares will be voted as recommended by the Board; provided, however, if you are a beneficial owner, your bank, broker or other holder of record is not permitted to vote your shares on the following proposals if your bank, broker or other holder of record does not receive specific voting instructions from you: Proposal 1 to elect directors and Proposal 2 to approve, on an advisory andnon-binding basis, the compensation of the Company’s Singapore officenamed executive officers for 2018.

By telephone or on the Internet

If you have telephone or Internet access, you may submit your proxy vote by following the instructions provided on your proxy card or voting instruction form. If you are a beneficial owner, the availability of telephone and business strategy.Internet voting will depend on the voting processes of your broker, bank or other holder of record. Therefore, we recommend that you follow the voting instructions in the materials you receive.

On February 2, 2016,In person at the Company providedMeeting

If you are the shareholder of record, you have the right to vote in person at the Meeting. If you are the beneficial owner, you are also invited to attend the Meeting. Since a beneficial owner is not the shareholder of record, you may not vote these shares in person at the Meeting unless you obtain a “legal proxy” from your broker, bank or other holder of record that holds your shares, giving you the right to vote the shares at the Meeting. You will need proof of your ownership of Cheniere common stock and valid government-issued picture identification to enter the Meeting. See “Do I need a ticket to attend the Meeting?” above for more information on the requirements to enter the Meeting.

CAN I REVOKE MY PROXY?

If you are a shareholder of record, you can revoke your proxy before it is exercised by:

written notice of terminationto the Corporate Secretary of the consulting agreementCompany;

timely delivery of a valid, later-dated proxy; or

voting by ballot at the Meeting.

If you are a beneficial owner of shares, you may submit new voting instructions by contacting your bank, broker or other holder of record. You may also vote in person at the Meeting if you obtain a legal proxy as described in the answer to Karim Souki, effective April 29, 2016. In 2016, Karim Souki received $203,578 under the consulting agreement.preceding question.

On October 3, 2013,WHO WILL RECEIVE A PROXY CARD?

If you are a shareholder of record, you will receive a proxy card for the Audit Committee approvedshares you hold in certificate form or in book-entry form. If you are a beneficial owner, you will receive voting instructions from your bank, broker or other holder of record.

74CHENIERE


FREQUENTLY ASKED QUESTIONS

IS THERE A LIST OF SHAREHOLDERS ENTITLED TO VOTE AT THE MEETING?

The names of shareholders of record entitled to vote at the TermsMeeting will be available at the Meeting and Conditionsfor ten days prior to the Meeting for any purpose germane to the Meeting. The list will be available between the hours of Employment (the “Employment Agreement”) between Tarek Souki,8:30 a.m. and 4:30 p.m., Central Time, at our offices at 700 Milam Street, Suite 1900, Houston, Texas 77002, by contacting the son of Charif Souki, and Cheniere Supply & Marketing. Effective April 1, 2015, Tarek Souki’s Employment Agreement was transferred to Cheniere Marketing Ltd. Tarek Souki served as Vice President, Finance and Business Development of Cheniere Marketing Ltd. until he separated from employment effective March 24, 2016. Upon his termination, the Compensation Committee approved the accelerated vesting of 15,000 share of restricted stockCorporate Secretary of the Company heldCompany.

WHAT ARE THE VOTING REQUIREMENTS TO ELECT THE DIRECTORS AND TO APPROVE EACH OF THE PROPOSALS DISCUSSED IN THIS PROXY STATEMENT?

The presence in person or by Tarek Souki. For 2016, Tarek Souki earned approximately 70,100 GBPproxy of the holders of a majority in base salary. He was alsovoting power of the outstanding shares of common stock entitled to participatevote at the Meeting is necessary to constitute a quorum. In the absence of a quorum at the Meeting, the Meeting may be adjourned from time to time without notice, other than an announcement at the Meeting, until a quorum is present. Abstentions and “brokernon-votes” represented by submitted proxies will be included in our U.K. pension schemethe calculation of the number of the shares present at the Meeting for U.K. employees through which Cheniere Marketing Ltd. contributes an amount equalpurposes of determining a quorum. “Brokernon-votes” occur when a bank, broker or other holder of record holding shares for a beneficial owner does not vote on a particular proposal because that holder does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.

Proposal 1 – Directors are elected by a majority of the votes cast with respect to 8%such director nominee at the Meeting, meaning that the number of employees’ base salariesvotes cast “for” a director must exceed the number of votes cast “against” that director. If you are a beneficial owner, your bank, broker or other holder of record may not vote your shares with respect to Proposal 1 without specific instructions from you as to how to vote with respect to the pension scheme. While employedelection of each of the ten nominees for director. Abstentions and brokernon-votes represented by Cheniere Marketing Ltd.submitted proxies will not be considered votes cast and therefore will not be taken into account in determining the outcome of the election of directors.

Proposal 2 – To be approved, Proposal 2 regarding the compensation of the Company’s named executive officers for fiscal year 2018 must receive the affirmative vote of the holders of a majority in voting power of the shares entitled to vote on the matter, present in person or by proxy at the Meeting. Because your vote is advisory, it will not be binding on the Board or the Company. If you are a beneficial owner, your bank, broker or other holder of record may not vote your shares with respect to Proposal 2 without specific instructions from you. Abstentions will be counted “against” Proposal 2. Brokernon-votes will not count as shares entitled to vote on the matter.

Proposal 3 – To be approved, Proposal 3 to ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2019 must receive the affirmative vote of the holders of a majority in voting power of the shares entitled to vote on the matter, present in person or by proxy at the Meeting. If you are a beneficial owner, your bank, broker or other holder of record has the authority to vote your shares on Proposal 3 if you have not furnished voting instructions within a specified period of time prior to the Meeting. Abstentions will be counted “against” Proposal 3.

WHAT IF A DIRECTOR NOMINEE DOES NOT RECEIVE A MAJORITY OF VOTES CAST?

Our Amended and Restated Bylaws, as amended (“Bylaws”) require directors to be elected by the majority of the votes cast with respect to such director (i.e., Tarek Souki was eligiblethe number of votes cast “for” a director must exceed the number of votes cast “against” that director). If a nominee who is serving as a director is not elected at the Meeting and no one else is elected in place of that director, then, under Delaware law, the director would continue to serve on the Board as a “holdover director.” However, under our Bylaws, the holdover director is required to tender his or her resignation to the Board. The Governance and Nominating Committee of the Board then

2019 PROXY STATEMENT75


GENERAL INFORMATION

would consider the resignation and recommend to the Board whether to accept or reject the tendered resignation, or whether some other action should be taken. The Board would then make a decision whether to accept the resignation, taking into account the recommendation of the Governance and Nominating Committee. The director who tenders his or her resignation will not participate in the benefits offeredGovernance and Nominating Committee’s or the Board’s decision. The Board is required to disclose publicly (by a press release and a filing with the SEC) its decision regarding the tendered resignation and, if the tendered resignation is rejected, the rationale behind the decision within 90 days from the date of the certification of the election results. If a nominee for director is not elected and the nominee is not an incumbent director, then the Board may fill the resulting vacancy.

COULD OTHER MATTERS BE DECIDED AT THE MEETING?

As of the date of this Proxy Statement, we do not know of any matters to be raised at the Meeting other than those referred to in this Proxy Statement. If other matters are properly presented for consideration at the Meeting, the persons named in your proxy card will have the discretion to vote on those matters for you.

WHO WILL PAY FOR THE COST OF THIS PROXY SOLICITATION?

We will pay for the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers or employees generally.in person or by telephone, electronic transmission and facsimile transmission. We have hired D. F. King & Co., Inc., 48 Wall Street, 22nd Floor, New York, NY 10005, to solicit proxies. We will pay D.F. King a fee of $15,000 plus expenses for these services.

WHO WILL COUNT THE VOTE?

Broadridge Financial Solutions, Inc., an independent third party, will tabulate the votes.

76CHENIERE


OTHER MATTERS

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2019 ANNUAL MEETING TO BE HELD ON MAY 16, 2019

The Proxy Statement, including the Notice and 2018 Annual Report on Form10-K for the year ended December 31, 2018, are available on our website athttp://www.cheniere.com/2019AnnualMeeting. Please note that the Notice is not a form for voting and presents only an overview of the more complete proxy materials, which contain important information and are available on the Internet or by mail. We encourage our shareholders to access and review the proxy materials before voting.

OTHER MATTERS

SectionSECTION 16(a) Beneficial Ownership Reporting ComplianceBENEFICIAL OWNERSHIP REPORTING COMPLIANCE

 

Under Section 16(a) of the Exchange Act, directors, certain officers and beneficial owners of more than 10% of any class of the Company’s stock (“Reporting Persons”) are required from time to time to file with the SEC and NYSE MKT LLCAmerican reports on ownership and changes of ownership. Reporting Persons are required to furnish the Company with copies of all Section 16(a) reports they file. Based solely on its review of forms and written representations received from Reporting Persons with respect to the fiscal year ended December 31, 20162018, the Company believes that all filing requirements applicable to the Company’s Reporting Persons were met on a timely basis, other thanbasis. However, the Company believes that two late Form 4 filings due4s required to administrative error for twobe filed by Ms. Zichal relating to sales of our executive officers, each reporting one transaction.shares during the fiscal year ended December 31, 2017 were not timely filed.

Shareholder ProposalsSHAREHOLDER PROPOSALS

 

Management anticipates that the Company’s 20182020 Annual Meeting of Shareholders will be held during May 2018.2020. Any shareholder who wishes to submit a proposal for action to be included in the Proxy Statement and form of proxy relating to the Company’s 20182020 Annual Meeting of Shareholders pursuant to Rule14a-8 of the Exchange Act must submit the proposal to the Company not earlier than November 14, 2019 or later than the close of business on or before December 18, 2017.14, 2019. Any such proposals should be timely received by the Corporate Secretary, Cheniere

74Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Energy, Inc., 700 Milam Street, Suite 1900, Houston, Texas 77002. Such proposal must meet all of the requirements of the SEC to be eligible for inclusion in the Company’s 20182020 proxy materials. If a shareholder wishes to submit a proposal outside of the process of Rule14a-8 under the Exchange Act, in order for such proposal to be considered “timely” under our Bylaws, the proposal must be received by the Secretary of the Company at the Company’s Headquarters no earlier than January 18, 201817, 2020 and not later than February 17, 2018.16, 2020.

Director Nominees for Inclusion in Next Year’s Proxy Statement (Proxy Access)DIRECTOR NOMINEES FOR INCLUSION IN NEXT YEAR’S PROXY STATEMENT (PROXY ACCESS)

 

Our Board recently amended our Bylaws to permit a shareholdershareholders (or a groupgroups of no more than 20 shareholders) who hashave maintained (individually and, in the case of a group, collectively) continuous qualifying ownership of at least 3% of our outstanding common stock for at least three years and has complied with the other requirements set forth in our Bylaws, to submit an aggregate number of director nominees of up to 20% of the number of directors serving on the Board for inclusion in our Proxy Statement if the shareholder(s) and the nominee(s) satisfy the requirements set forth in our Bylaws.

 

When to send such proposals. Notice of director nominees submitted under these Bylaw provisions must be received by our Secretary no earlier than 5:00 p.m., Central Time, November 18, 201713, 2019 and no later than 5:00 p.m,p.m., Central Time, on December 18, 2017.13, 2019.

 

2019 PROXY STATEMENT77


OTHER MATTERS

Where to send such proposals. Proposals should be addressed to the Corporate Secretary, Cheniere Energy, Inc., 700 Milam Street, Suite 1900, Houston, TX 77002.

 

 

What to include. Notice must include the information required by our Bylaws, which are available on our website atwww.cheniere.com.

Communications with the BoardCOMMUNICATIONS WITH THE BOARD

 

The Board maintains a process for shareholders to communicate with the Board. Shareholders wishing to communicate with the Board should send any communication to the Corporate Secretary, Cheniere Energy, Inc., 700 Milam Street, Suite 1900, Houston, Texas 77002. Any such communication must state the number of shares beneficially owned by the shareholder making the communication. The Corporate Secretary will forward such communication to the full Board or to any individual director or directors to whom the communication is directed, unless the Corporate Secretary determines that the communication does not relate to the business or affairs of the Company or the functioning or constitution of the Board or any of its committees, relates to routine or insignificant matters that do not warrant the attention of the Board, is an advertisement or other commercial solicitation or communication, is frivolous or offensive, or is otherwise not appropriate for delivery to the directors. The director or directors who receive any such communication will have discretion to determine whether the subject matter of the communication should be brought to the attention of the full Board or one or more of its committees and whether any response to the person sending the communication is appropriate. Any such response will be made through the Corporate Secretary and only in accordance with the Company’s policies and procedures and the applicable laws and regulations relating to the disclosure of information.

Householding of Proxy MaterialsHOUSEHOLDING OF PROXY MATERIALS

 

The SEC’s rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement and annual report addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for shareholders and cost savings for companies. Some brokers household proxy materials and annual reports, delivering a single proxy statement and annual report to multiple shareholders sharing an address, although each shareholder will receive a separate proxy card. Once a shareholder has received notice from his or her broker that they will be householding materials, householding will continue until the shareholder is notified otherwise or revokes consent. If at any time a shareholder no longer wishes to participate in householding and would prefer to receive a separate proxy statement and annual report, or if a shareholder is receiving multiple copies of either document and wishes to receive only one, the shareholder should notify his or her broker. If a shareholder would like to receive a separate copy of this Proxy Statement, Notice of Annual Meeting or 20162018 Annual Report on Form10-K for the year ended December 31, 2016,2018, he or she should contact the Company by writing to the Corporate Secretary, Cheniere Energy, Inc., 700 Milam Street, Suite 1900, Houston, Texas 77002.

77002; (713)375-5000. The Company undertakes to deliver the requested materials promptly upon request.

 

Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement 75
78CHENIERE


AVAILABILITY OF DOCUMENTS

Availability of DocumentsAVAILABILITY OF DOCUMENTS

 

The Company is including with this Proxy Statement a copy of its 20162018 Annual Report on Form10-K for the year ended December 31, 2016,2018, which has been filed with the SEC and is incorporated in this Proxy Statement by reference. The Company will furnish to any person any exhibits described in the list accompanying such report upon payment of reasonable fees relating to the Company’s furnishing such exhibits. Requests for directions to the Meeting to vote in person or for copies of this Proxy Statement and the 20162018 Annual Report on Form10-K for the year ended December 31, 20162018 (including exhibits thereto) for the Meeting and future shareholders meetings should be directed to the Corporate Secretary, Cheniere Energy, Inc., 700 Milam Street, Suite 1900, Houston, Texas 77002. Paper or email copies of this Proxy Statement and the 20162018 Annual Report on Form10-K for the year ended December 31, 20162018 (including exhibits thereto) for the Meeting can also be obtained free of charge by callingtoll-free 1-877-375-5001 and asking for the Company’s Investor Relations Department or can be accessed at the Investor Relations section of our website athttp://www.cheniere.com/2017AnnualMeeting.2019AnnualMeeting.Any such requests must be made by May 4, 20173, 2019 to facilitate timely delivery.

By order of the Board of Directors

 

LOGOLOGO

Sean N. Markowitz

Corporate Secretary

April 17, 2017

76Cheniere Energy, Inc.Notice of Annual Meeting of Shareholders and 2017 Proxy Statement


Appendix A

CHENIERE ENERGY, INC.

2011 INCENTIVE PLAN

(As amended through April 13, 2017)


Table of Contents15, 2019

 

1

ESTABLISHMENT OF PLAN

  A-1
2

PURPOSES

A-1
3

DEFINITIONS

A-1 
 (a)2019 PROXY STATEMENT “Addendum”A-1
(b)“Affiliate”A-1
(c)“Award”A-1
(d)“Board”A-1
(e)“Bonus Stock Award”A-1
(f)“Cash Award”A-1
(g)“Cause”A-2
(h)“Change in Control”A-2
(i)“Chief Executive Officer”A-3
(j)“Code”A-3
(k)“Committee”A-3
(l)“Common Stock”A-3
(m)“Company”A-3
(n)“Consultant”A-3
(o)“Continuous Service”A-3
(p)“Covered Employee”A-4
(q)“Director”A-4
(r)“Disability”A-4
(s)“Employee”A-4
(t)“Executive Officer”A-4
(u)“Exchange Act”A-4
(v)“Fair Market Value”A-4
(w)“Incentive Stock Option”A-4
(x)“Non-Employee Director”A-4
(y)“Non-Qualified Stock Option”A-5
(z)“Option”A-5

(aa)

“Option Agreement”

A-5

(ab)

“Optionee”

A-5

(ac)

“Other Stock or Performance-Based Award”

A-5

(ad)

“Outside Director”

A-5

(ae)

“Participant”

A-5

(af)

“Performance Award”

A-5

(ag)

“Performance-Based Compensation”

A-5

(ah)

“Performance Goal”

A-5

(ai)

“Performance Period”

A-5

(aj)

“Phantom Stock Agreement”

A-5

(ak)

“Phantom Stock Award”

A-5

(al)

“Plan”

A-5

(am)

“RegulationS-K”

A-5

(an)

“Restricted Period”

A-5

(ao)

“Restricted Stock Agreement”

A-6

(ap)

“Restricted Stock Award”

A-6

(aq)

“Restricted Stock Unit Agreement”

A-6

(ar)

“Restricted Stock Unit Award”

A-6

(as)

“Rule16b-3”

A-6

(at)

“Section”

A-6

(au)

“Securities Act”

A-6

(av)

“Stock Appreciation Rights”

A-6

(aw)

“Stock Appreciation Rights Agreement”

A-6

(ax)

“Ten Percent Stockholder”

A-679


4

INCENTIVE AWARDS AVAILABLE UNDER THE PLAN

A-6
5

SHARES SUBJECT TO PLAN

A-6
6

ELIGIBILITY

A-7
7

LIMITATION ON INDIVIDUAL AWARDS

A-7
8

OPTIONS

A-7
(a)Terms and Conditions

APPENDIX A

Definition of Options

A-7
(b)Transferability of OptionsA-8
(c)Manner of ExerciseA-8
(d)Payment of Exercise PriceA-9
(e)Exercise of Option Following Termination of Continuous ServiceA-9
(f)Limitations on ExerciseA-9
(g)Modification, Extension And Renewal of OptionsA-10
(h)Privileges of Stock OwnershipA-10
(i)Acquisitions and Other TransactionsA-10
9

BONUS STOCK AWARDS

A-10
(a)Bonus Stock AwardsA-10
(b)Rights as ShareholderA-10
(c)Payment for Bonus StockA-10
10

STOCK APPRECIATION RIGHTS

A-10
(a)Payment of Stock Appreciation RightsA-11
(b)Tandem RightsA-11
(c)Stock Appreciation Rights Unrelated to an OptionA-11
(d)Date of GrantA-11
11

PHANTOM STOCK AWARDS

A-11
(a)Payment of Phantom Stock AwardsA-11
12

RESTRICTED STOCK AWARDS AND RESTRICTED STOCK UNIT AWARDS

A-12
(a)Restricted Stock AwardsA-12
(b)Restricted Stock Unit AwardsA-13
13

CASH AWARDS AND PERFORMANCE AWARDS

A-14
(a)Cash AwardsA-14
(b)Designation as a Performance AwardA-14
(c)Performance GoalsA-14
(d)Status of Performance Awards under Section 162(m) of the CodeA-15
(e)Waiver of Performance GoalsA-16
14

OTHER STOCK OR PERFORMANCE-BASED AWARDS

A-16
15

ADJUSTMENT UPON CHANGES IN CAPITALIZATION AND CORPORATE EVENTS

A-16
(a)Capital AdjustmentsA-16
(b)Dissolution or LiquidationA-16
(c)Change in ControlA-16
16

GENERAL PROVISIONS APPLICABLE TO ALL AWARDS

A-17
(a)GeneralA-17
(b)Form of AwardA-17
(c)Awards CriteriaA-17
(d)Form and Timing of Payment under AwardsA-17
(e)Termination of Continuous Service for CauseA-18
(f)Transferability of AwardsA-18
(g)Privileges of Stock OwnershipA-18
(h)Performance-Based CompensationA-18
(i)ClawbackA-18
(j)Section 409AA-18
17

WITHHOLDING FOR TAXES

A-19


18

MISCELLANEOUS

A-19
(a)No Rights to AwardsA-19
(b)Governing LawA-19
(c)Other LawsA-19
(d)AdministrationA-19
(e)Effect of PlanA-19
(f)No Effect on Retirement and Other Benefit PlansA-20
(g)Amendment or Termination of PlanA-20
(h)Term of PlanA-20
(i)Severability and ReformationA-20
(j)Interpretive MattersA-20


CHENIERE ENERGY, INC.

2011 INCENTIVE PLAN

(As amended through April 13, 2017)

1.ESTABLISHMENT OF PLAN. Cheniere Energy, Inc. established the “Cheniere Energy, Inc. 2011 Incentive Plan” effective as of June 16, 2011. The Plan was amended and restated by the Board on April 13, 2017, subject to the approval of the Company’s shareholders. The amendments made to the Plan in 2017 shall affect only Awards granted under the Plan after the date on which the Company’s shareholders approve the amended and restated Plan (the “Effective Date”). Awards granted under the Plan prior to the Effective Date shall be governed by the terms and conditions of the Plan as in effect prior to the Effective Date and the applicable Award Agreements.

2.PURPOSES. The purposes of the Plan are (i) to offer selected Employees, including Executive Officers, Consultants andNon-Employee Directors of the Company or its Affiliates an opportunity to participate in the growth and financial success of the Company, (ii) to provide the Company an opportunity to attract and retain the best available personnel for positions of substantial responsibility, (iii) to provide performance-related incentives to certain of such Employees and Consultants to achieve established Performance Goals, and (iv) to promote the growth and success of the Company’s business by aligning the financial interests of Employees, Consultants andNon-Employee Directors with that of the stockholders of the Company. Toward these objectives, this Plan provides for the grant of performance andnon- performance-based equity Awards and performance-based Cash Awards.

3.DEFINITIONS. As used herein, unless the context requires otherwise, the following terms have the meanings indicated below.

(a)Addendum means an addendum to the Plan approved by the Compensation Committee, as constituted from time to time, of the Board containing terms, conditions and limitations applicable to certain Awards to Employees and other individuals described in the addendum who, in each case, are residents of a country other than the United States to which such addendum relates. An Award to an individual under an Addendum shall be made pursuant to, and subject to the terms and conditions of, the Plan, as modified by the terms of the Addendum.

(b) “Affiliate” means (i) any entity in which the Company, directly or indirectly, owns 10% or more of the combined voting power, as determined by the Committee, (ii) any “parent corporation” of the Company (as defined in section 424(e) of the Code), (iii) any “subsidiary corporation” of any such parent corporation (as defined in section 424(f) of the Code) of the Company and (iv) any trades or businesses, whether or not incorporated which are members of a controlled group or are under common control (as defined in Sections 414(b) or (c) of the Code) with the Company;provided, however, with respect to Awards of Options and Stock Appreciation Rights that are intended to be excluded from the application of Section 409A of the Code, the term affiliate will be applied in a manner to ensure that the Common Stock covered by such Awards would be “service recipient stock” with respect to the Participants to whom the Awards are granted; and provided further, however , with respect to Awards of Options that are intended to be Incentive Stock Options, Affiliate means an entity described in clauses (ii) and (iii) of this Section 3(b) and any other entity as may be permitted from time to time by the Code or by the Internal Revenue Service to be an employer of Employees to whom Incentive Stock Options may be granted.

(c) “Award” means any right granted under the Plan (or under the Plan as modified by an Addendum), including an Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, Bonus Stock, a Cash Award, a Performance Award, a Phantom Stock Award, and an Other Stock or Performance-Based Award, whether granted singly or in combination, to a Participant pursuant to the terms, conditions and limitations that the Committees may establish in order to fulfill the objectives of the Plan. An Award may be granted under the Plan pursuant to a written Award agreement between the Company and a Participant, a written Award notice provided to the Participant of the Award, or a written program adopted by the Company or the Committee establishing Awards under the Plan. Notwithstanding any other provision of the Plan relating to Award agreements, an Award and related documents, including the Plan and any prospectus for the Plan, may be delivered to a Participant in electronic format pursuant to such policies and procedures as adopted from time to time by the Company. If an Award or related documents are delivered in an electronic format and the Participant consents to participate in the electronic Award procedures established by the Company with respect to the Plan by using his personal identification number to access the Award documents, such action by the Participant shall constitute the Participant’s electronic signature and acceptance of the terms and conditions of the Award.

(d) “Board” means the Board of Directors of the Company.

(e) “Bonus Stock Award” means an Award grant under Section 9 of the Plan.

(f) “Cash Award” means an Award granted pursuant to Section 13 of the Plan.

(g) “Cause” means:

(i) in the case of a Director, the commission of an act of fraud or intentional misrepresentation or an act of embezzlement, misappropriation or conversion of assets or opportunities of the Company or any Affiliate;

(ii) in the case of a Participant whose employment with the Company or an Affiliate is subject to the terms of a written employment agreement between such Participant and the Company or Affiliate, which employment agreement includes a definition of “Cause,” the term “Cause” as used in the Plan or any agreement establishing an Award shall have the meaning set forth in such employment agreement during the period that such employment agreement remains in effect;

(iii) in the case of a Participant who is eligible for benefits under a severance plan sponsored by the Company or one of its Affiliates, the term “Cause” as used in the Plan or any agreement establishing an Award shall have the meaning set forth in such severance plan during the period that the Participant remains eligible for benefits under that plan; and

(iv) in all other cases,

(A) the willful commission by the Participant of a crime or other act of misconduct that causes or is likely to cause substantial economic damage to the Company or an Affiliate or substantial injury to the business reputation of the Company or an Affiliate; or

(B) the commission by the Participant of an act of fraud in the performance of the Participant’s duties on behalf of the Company or an Affiliate; or

(C) the willful and material violation by the Participant of the Company’s Code of Business Conduct and Ethics Policy; or

(D) the continuing and repeated failure of the Participant to perform his or her duties to the Company or an Affiliate, including by reason of the Participant’s habitual absenteeism (other than such failure resulting from the Participant’s incapacity due to physical or mental illness), which, with respect to Executive Officers, has continued for a period of at least thirty (30) days following delivery of a written demand for substantial performance to the Participant by the Board which specifically identifies the manner in which the Board believes that the Participant has not performed his or her duties.

For purposes of the Plan, no act, or failure to act, on the Participant’s part shall be considered “willful” unless done or omitted to be done by the Participant not in good faith and without reasonable belief that the Participant’s action or omission was in the best interest of the Company or an Affiliate, as the case may be. The determination of whether Cause exists with respect to an Executive Officer shall be made by the Board (or its designee) in its sole discretion and with respect to all other Participants, the existence of Cause shall be determined by the Company’s Chief Human Resources Officer or, if none, the most senior human resources officer in his or her sole discretion in consultation with the Company’s General Counsel.

(h) “Change in Control” means the occurrence during the term hereof of any of the following events:

(i) any “person” (as defined in Section 3(a)(9) of the Exchange Act, and as modified in Section 13(d) and 14(d) of the Exchange Act) other than (A) the Company or any Affiliate, (B) any employee benefit plan of the Company or of any Affiliate, (C) an entity owned, directly or indirectly, by stockholders of the Company in substantially the same proportions as their ownership of the Company, or (D) an underwriter temporarily holding securities pursuant to an offering of such securities, becomes the “beneficial owner” (as defined in Rule13d-3(a) of the Exchange Act), directly or indirectly, of securities of the Company representing 50.1% or more of the shares of voting stock of the Company then outstanding;

(ii) the consummation of any merger, organization, business combination or consolidation of the Company with or into any other company, other than a merger, reorganization, business combination or consolidation which would result in the holders of the voting securities of the Company outstanding immediately prior thereto holding securities which represent immediately after such merger, reorganization, business combination or consolidation more than 50% of the combined voting power of the voting securities of the Company or the surviving company or the parent of such surviving company;

(iii) the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition if the holders of the voting securities of the Company outstanding immediately prior thereto hold securities immediately thereafter which represent more than 50% of the combined voting power of the voting securities of the acquiror, or parent of the acquiror, of such assets, or the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company; or

(iv) individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board;provided,however, that any individual becoming a director subsequent to the Effective Date whose nomination by the Board was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an election contest or threatened election contest with respect to the election or removal of directors or other solicitation of proxies or consents by or on behalf of a person other than the Board.

Notwithstanding the foregoing, a Change in Control shall not occur or be deemed to occur if any event set forth in subsections (i)—(iv) above, which would otherwise constitute a Change in Control, occurs as a direct result of the consummation of a transaction solely between the Company and one or more of its controlled Affiliates.

Notwithstanding the foregoing, however, in any circumstance or transaction in which compensation payable pursuant to the Plan would be subject to the income tax under the Section 409A Rules if the foregoing definition of “Change in Control” were to apply, but would not be so subject if the term “Change in Control” were defined herein to mean a “change in control event” within the meaning of Treasury Regulation §1.409A-3(i)(5), then “Change in Control” means, but only to the extent necessary to prevent such compensation from becoming subject to the income tax under the Section 409A Rules, a transaction or circumstance that satisfies the requirements of both (1) a Change in Control under the applicable clause (i) through (iv) above, and (2) a “change in control event” within the meaning of Treasury Regulation Section §1.409A-3(i)(5).

(i) “Chief Executive Officer” means the individual serving at any relevant time as the chief executive officer of the Company.

(j) “Code” means the Internal Revenue Code of 1986, as amended, and any successor statute. Reference in the Plan to any section of the Code shall be deemed to include any amendments or successor provisions to such section and any Treasury regulations promulgated under such section.

(k) “Committee” means the Compensation Committee, as constituted from time to time, of the Board that is appointed by the Board to administer the Plan, or if no such committee is appointed (or no such committee shall be in existence at any relevant time), the term “Committee” for purposes of the Plan shall mean the Board; provided, however, that as necessary in each case to satisfy the requirements of Sections 162(m) of the Code and Rule16b-3 with respect to Awards granted under the Plan, while the Common Stock is publicly traded, the Committee shall be a committee of the Board consisting solely of two or more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or moreNon-Employee Directors, in accordance with Rule16b-3. Notwithstanding the foregoing provisions, (i) the Board may delegate to a committee of one or more members of the Board who are not Outside Directors orNon-Employee Directors (the “Equity Grant Committee”) the authority to grant equity-based awards, including Options, Restricted Stock Awards and Restricted Stock Unit Awards, subject to the terms of the Plan, including specifically the limitations contained in Section 6 and any additional limitations as may be contained in resolutions adopted by the Board from time to time, to selected Employees and Consultants who are not then (A) Executive Officers,(B) Non- Employee Directors or (C) persons with respect to whom the Company wishes to comply with Section 162(m) of the Code and (ii) the Board or the Compensation Committee of the Board may delegate to one or more Executive Officers of the Company (the “Option Grant Committee”) the authority to grant Options, subject to the terms of the Plan, including specifically the limitations contained in Section 6 and any additional limitations as may be contained in resolutions adopted by the Board or the Compensation Committee from time to time, to Employees (other than Employees who are Executive Officers or persons with respect to whom the Company wishes to comply with Section 162(m) of the Code) and Consultants. When used in the Plan, except as provided otherwise in Section 12(a), the term “Committees” shall refer to the Committee, the Equity Grant Committee and the Option Grant Committee, each acting within the scope of its authority under the Plan with respect to the matter covered by the particular reference.

(l)Common Stock” means the common stock of the Company, $0.003 par value per share or the common stock that the Company may in the future be authorized to issue.

(m) “Company” means Cheniere Energy, Inc., a Delaware corporation, and any successor corporation.

(n) “Consultant” means any person (other than an Employee or a Director, solely with respect to rendering services in such person’s capacity as a Director) who is engaged by the Company or any Affiliate to render consulting or advisory services to the Company or such Affiliate and who is a “consultant or advisor” within the meaning of Rule 701 promulgated under the Securities Act or FormS-8 promulgated under the Securities Act.

(o) “Continuous Service” means the provision of services to the Company or an Affiliate, or any successor, as an Employee, Director or Consultant which is not interrupted or terminated. Except as otherwise provided in a particular Award agreement, service shall

not be considered interrupted or terminated for this purpose in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Affiliate, or any successor, in any capacity of Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or an Affiliate, or any successor, as an Employee, Director or Consultant. An approved leave of absence shall include sick leave, military leave or any other authorized personal leave. For purposes of each Incentive Stock Option, if such leave exceeds ninety (90) days, andre-employment upon expiration of such leave is not guaranteed by statute or contract, then the Incentive Stock Option shall be treated as aNon-Qualified Stock Option on the day that is three (3) months and one (1) day following the expiration of such ninety(90)-day period.

(p) “Covered Employee” means the Chief Executive Officer and each other officer of the Company who is required to be treated as a “covered employee” for purposes of applying Section 162(m) of the Code to Awards, including, if applicable, by reason of formal interpretations issued by the Internal Revenue Service.

(q) “Director” means a member of the Board or the board of directors of an Affiliate.

(r) “Disability” means the “disability” of a person as defined in a then effective long-term disability plan maintained by the Company that covers such person or, if such a plan does not exist at any relevant time, the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code. For purposes of determining the time during which an Incentive Stock Option may be exercised under the terms of an Option Agreement, “Disability” means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code. Section 22(e)(3) of the Code provides that an individual is totally and permanently disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.

(s) “Employee” means any person, including an Executive Officer or Director, who is employed by the Company or an Affiliate. The payment of compensation by the Company or an Affiliate to a Director or Consultant solely with respect to such individual rendering services in the capacity of a Director or Consultant, however, shall not be sufficient to constitute “employment” by the Company or that Affiliate.

(t) “Executive Officer” means a person who is an “officer” of the Company or any Affiliate within the meaning of Section 16 of the Exchange Act (whether or not the Company is subject to the requirements of the Exchange Act).

(u) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute. Reference in the Plan to any section of the Exchange Act shall be deemed to include any amendments or successor provisions to such section and any rules and regulations relating to such section.

(v) “Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:

(i) If the Common Stock has an established market by virtue of being listed or quoted on any registered stock exchange, the Fair Market Value of a share of Common Stock shall be the closing sales price for such a share of Common Stock (or the closing bid price, if applicable) on such exchange (or, if the Common Stock is listed or traded on more than one registered exchange, on the exchange with the greatest volume of trading in the Common Stock) on the day of determination (or if no such price is reported on that day, on the last market trading day prior to the day of determination), as reported in The Wall Street Journal or such other source as the Committee deems reliable.

(ii) In the absence of any listing or quotation of the Common Stock on any such registered exchange, the Fair Market Value shall be determined in good faith by the Committee.

(w) “Incentive Stock Option” means any Option that satisfies the requirements of Section 422 of the

Code and is granted pursuant to Section 8 of the Plan.

(x) “Non-Employee Director” means a Director of the Company who either (i) is not an Employee or Officer, does not receive compensation (directly or indirectly) from the Company or an Affiliate in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of RegulationS-K), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) of RegulationS-K and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of RegulationS-K or (ii) is otherwise considered a“non-employee director” for purposes of Rule16b-3.

(y) “Non-Qualified Stock Option” means an Option granted under 8 of the Plan that is not intended to be an Incentive Stock Option.

(z) “Option” means an Award granted pursuant to Section 8 of the Plan to purchase a specified number of shares of Common Stock during the Option period for a specified exercise price, whether granted as an Incentive Stock Option or as aNon-Qualified Stock Option.

(aa) “Option Agreement” means the written agreement or notice evidencing the grant of an Option executed by the Company and the Optionee or issued by the Company and accepted by the Optionee, including any amendments thereto. Each Option Agreement shall be subject to the terms and conditions of the Plan. If an Option Agreement or related document is delivered to a Participant by electronic means, and the Participant consents to participate in the electronic Award procedures adopted by the Company by using his personal identification number to access the Award documents, such action by the Participant shall constitute the Participant’s electronic signature and acceptance of the terms and conditions of the Award.

(ab) “Optionee” means a Participant to whom an Option has been granted under the Plan.

(ac) “Other Stock or Performance-Based Award” means an award granted pursuant to Section 14 the Plan that is not otherwise specifically provided for in the Plan, the value of which is based in whole or in part upon the value of a share of Common Stock.

(ad) “Outside Director” means a Director of the Company who either (i) is not a current employee of the Company or an “affiliated corporation” (within the meaning of the Treasury regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” receiving compensation for prior services (other than benefits under a tax qualified pension plan), has not been an officer of the Company or an “affiliated corporation” at any time and is not currently receiving (within the meaning of the regulations promulgated under Section 162(m) of the Code) direct or indirect remuneration from the Company or an “affiliated corporation” for services in any capacity other than as a Director, or (ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code.

(ae) “Participant” means any Employee,Non-Employee Director, or Consultant to whom an Award has been granted under the Plan.

(af) “Performance Award” means an Award granted pursuant to Section 13 of the Plan to a Participant that is subject to the attainment of one or more Performance Goals.

(ag) “Performance-Based Compensation” means “performance-based compensation” as described in Section 162(m)(4)(C) of the Code.

(ah) “Performance Goal“ means a standard established by the Committee based on one or more business criteria described in Section 13 to determine in whole or in part whether a Performance Award shall be earned.

(ai) “Performance Period” shall mean that period established by the Committee at the time any Performance Award is granted or, except in the case of any grant to a Covered Employee, at any time thereafter, during which any Performance Goals specified by the Committee with respect to such Award are to be measured.

(aj)Phantom Stock Agreement” means the written agreement evidencing a Phantom Stock Award. Each Phantom Stock Agreement shall be subject to the terms and conditions of the Plan.

(ak) “Phantom Stock Award” means an Award granted pursuant to Section 11 of the Plan.

(al) “Plan” means this Cheniere Energy, Inc. 2011 Incentive Plan, as set forth herein and as it may be amended from time to time.

(am) “Regulation S-K” means RegulationS-K promulgated under the Securities Act, as it may be amended from time to time, and any successor to RegulationS-K. Reference in the Plan to any item of RegulationS-K shall be deemed to include any amendments or successor provisions to such item.

(an) “Restricted Period” means the period established by the Committee with respect to an Award during which the Award is subject to forfeiture or is not exercisable by the Participant and with respect to a Restricted Stock Award, the period during which the Forfeiture Restrictions as described in Section 12(a) apply to the Award.

(ao) “Restricted Stock Agreement” means the written agreement evidencing the grant of a Restricted Stock Award executed by the Company and the Participant or issued by the Company and accepted by the Participant, including any amendments thereto. Each Restricted Stock Agreement shall be subject to the terms and conditions of the Plan. If a Restricted Stock Agreement or related document is delivered to a Participant by electronic means, and the Participant consents to participate in the electronic Award procedures adopted by the Company by using his personal identification number to access the Award documents, such action by the Participant shall constitute the Participant’s electronic signature and acceptance of the terms and conditions of the Award.

(ap) “Restricted Stock Award” means an Award granted under Section 12(a) of the Plan of shares of Common Stock issued to the Participant for such consideration, if any, and subject to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions and other terms and conditions, as are established by the Committee.

(aq) “Restricted Stock Unit Agreement” means the written agreement evidencing the grant of a Restricted Stock Unit Award executed by the Company and the Participant or issued by the Company and accepted by the Participant, including any amendments thereto. Each Restricted Stock Unit Agreement shall be subject to the terms and conditions of the Plan. If a Restricted Stock Unit Agreement or related document is delivered to a Participant by electronic means, and the Participant consents to participate in the electronic Award procedures adopted by the Company by using his personal identification number to access the Award documents, such action by the Participant shall constitute the Participant’s electronic signature and acceptance of the terms and conditions of the Award.

(ar) “Restricted Stock Unit Award” means an Award granted under Section 12(b) of the Plan.

(as) “Rule16b-3” means Rule16b-3 promulgated under the Exchange Act, as it may be amended from time to time, and any successor to Rule16b-3.

(at) “Section” means a section of the Plan unless otherwise stated or the context otherwise requires.

(au) “Securities Act” means the Securities Act of 1933, as amended, and any successor statute. Reference in the Plan to any section of the Securities Act shall be deemed to include any amendments or successor provisions to such section and any rules and regulations relating to such section.

(av) “Stock Appreciation Rights” means an Award granted under Section 10 of the Plan.

(aw) “Stock Appreciation Rights Agreement” means a written agreement with a Participant with respect to an Award of Stock Appreciation Rights.

(ax) “Ten Percent Stockholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) at the time an Option is granted stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.

4.INCENTIVE AWARDS AVAILABLE UNDER THE PLAN. Awards granted under this Plan may be (a) Incentive Stock Options,(b) Non-Qualified Stock Options, (c) Restricted Stock Awards; (d) Stock Appreciation Rights; (e) Bonus Stock, (f) Cash Awards; (g) Performance Awards; (h) Phantom Stock Awards; (i) Restricted Stock Unit Awards; and (j) Other Stock or Performance-Based Awards.

5.SHARES SUBJECT TO PLAN. Subject to adjustment pursuant to Section 15(a) hereof, the aggregate number of shares of Common Stock that may be issued with respect to Awards granted under the Plan shall not exceed 35,000,000 (the “Share Pool Limit”). At all times during the term of the Plan, the Company shall allocate and keep available such number of shares of Common Stock as will be required to satisfy the requirements of outstanding Awards under the Plan. Except for shares of Common Stock issued with respect to awards that are assumed or substituted as a result of the Company’s acquisition of another company (including by way of merger, combination or similar transaction), the number of shares reserved for issuance under the Plan shall be reduced by the number of shares of Common Stock issued in connection with the exercise or settlement of an Award or used to determine the amount of cash paid in connection with the exercise of Stock Appreciation Rights and the settlement of Phantom Stock Awards. Any shares of Common Stock covered by an Award (or a portion of an Award) that is forfeited or canceled or that expires shall be deemed not to have been issued for purposes of determining the maximum aggregate number of shares of Common Stock which may be issued under the Share Pool Limit and shall remain available for Awards under the Plan;provided

that the following shall not remain available for Awards under the Plan and shall count against the Share Pool Limit: (i) any shares of Common Stock withheld in respect of taxes, (ii) any shares tendered or withheld to pay the exercise price of Options, (iii) any shares repurchased by the Company from a Participant with the proceeds from the exercise of Options and (iv) any shares reserved for issuance under a Stock Appreciation Right Award that exceed the number of shares actually issued upon exercise. The shares to be delivered under the Plan shall be made available from (a) authorized but unissued shares of Common Stock, (b) Common Stock held in the treasury of the Company, or (c) previously issued shares of Common Stock reacquired by the Company, including shares purchased on the open market, in each case as the Committee may determine from time to time in its sole discretion.

6.ELIGIBILITY. Awards other than Incentive Stock Options may be granted to Employees, Executive Officers, Directors, and Consultants. Incentive Stock Options may be granted only to Employees. The Committee in its sole discretion shall select the recipients of Awards; provided, however that (i) the Equity Grant Committee may select the recipients ofNon-Qualified Stock Options and/or Restricted Stock Awards and/or Restricted Stock Unit Awards if (A) such recipients are not members of the Equity Grant Committee, Executive Officers,Non-Employee Directors or persons with respect to which the Company desires to comply with Section 162(m) of the Code, (B) the aggregate number of shares of Common Stock subject to such Options does not exceed 3,000,000 shares in any one calendar year (reduced by the number of shares of common Stock covered by Options granted by the Option Grant Committee for such calendar year) and the aggregate number of shares of Common Stock covered by such Restricted Stock Awards and Restricted Stock Unit Awards in the aggregate granted in any one calendar year does not exceed 600,000 shares of Common Stock and (C) the aggregate number of shares of Common Stock that may be awarded to any individual under such Options does not exceed 450,000 shares and the aggregate number of shares of Common Stock that may be awarded to any individual under such Restricted Stock Awards and Restricted Stock Unit Awards in the aggregate does not exceed 150,000 shares and (ii) the Option Grant Committee may select the recipients ofNon-Qualified Stock Options (A) if such recipients are Employees (who are not members of the Option Grant Committee, Executive Officers or persons with respect to whom the Company wishes to comply with Section 162(m) of the Code) or Consultants, (B) the aggregate number of shares of Common Stock subject to such Options does not exceed 3,000,000 shares in any calendar year (reduced by the number of shares of Common Stock covered by Options granted by the Equity Grant Committee for such calendar year) and (C) the aggregate number of shares of Common Stock that may be awarded to any individual under such Options does not exceed 450,000 shares. A Participant may be granted more than one Award under the Plan, and Awards may be granted at any time or times during the term of the Plan. The grant of an Award to an Employee, Executive Officer, Director or Consultant shall not be deemed either to entitle that individual to, or to disqualify that individual from, participation in any other grant of Awards under the Plan.

7.LIMITATION ON INDIVIDUAL AWARDS. Except for Cash Awards described in Section 13, no individual shall be granted, in any calendar year, Awards under the Plan covering or relating to an aggregate of more than 6,000,000 shares of Common Stock, of which no more than 6,000,000 shares may be granted in the form of Options or Stock Appreciation Rights. No individual shall receive payment for Cash Awards during any calendar year aggregating in excess of $25,000,000. The preceding shall be applied in a manner which will permit compensation generated under the Plan, where appropriate, to constitute Performance-Based Compensation. Additionally, noNon-Employee Director shall be granted in any calendar year Awards in respect of regular annual fees under the Plan (excluding, for the avoidance of doubt, any special orone-time awards) with an aggregate grant date fair value exceeding $495,000.

8.OPTIONS.

(a)Terms and Conditions of Options. Except with respect to grants ofNon-Qualified Stock Options by the Equity Grant Committee and/or the Option Grant Committee, the Committee shall determine whether an Option shall be granted as an Incentive Stock Option or aNon-Qualified Stock Option. The Committees shall determine the provisions, terms and conditions of each Option including, but not limited to, the vesting schedule, the number of shares of Common Stock subject to the Option, the exercise price of the Option, the period during which the Option may be exercised, repurchase provisions, forfeiture provisions, methods of payment, and all other terms and conditions of the Option, subject to the following:

(i)Form of Option Grant. Each Option granted under the Plan shall be evidenced by a written Option Agreement in such form (which need not be the same for each Optionee) as the Committees from time to time approve, but which is not inconsistent with the Plan, including any provisions that may be necessary, as determined by the Committee, to assure that any Option that is intended to be an Incentive Stock Option will comply with Section 422 of the Code.

(ii)Date of Grant. The date of grant of an Option shall be the date on which the Committees make the determination to grant such Option unless a later date is specified by the Committees at the time of such determination. The Option Agreement evidencing

the Option shall be delivered to the Optionee, with a copy of the Plan and other relevant Option documents, within a reasonable time after the date of grant.

(iii)Exercise Price. The exercise price of an Option shall be not less than the Fair Market Value of the shares of Common Stock on the date of grant of the Option. In addition, the exercise price of any Incentive Stock Option granted to a Ten Percent Stockholder shall not be less than 110% of the Fair Market Value of the shares of Common Stock on the date of grant of the Option. The exercise price for each Option granted under this Section 8 shall be subject to adjustment pursuant to Section 15(a).

(iv)Exercise Period. Options shall be exercisable within the time or times or upon the event or events determined by the Committees and set forth in the Option Agreement; provided, however, that no Option shall be exercisable later than the expiration of ten (10) years from the date of grant of the Option, andprovided further, that no Incentive Stock Option granted to a Ten Percent Stockholder shall be exercisable after the expiration of five (5) years from the date of grant of the Option.

(v)Limitations on Incentive Stock Options. The aggregate Fair Market Value (determined as of the date of grant of an Option) of Common Stock which any Employee is first eligible to purchase during any calendar year by exercise of Incentive Stock Options granted under the Plan and by exercise of incentive stock options (within the meaning of Section 422 of the Code) granted under any other incentive stock option plan of the Company or an Affiliate shall not exceed $100,000. If the Fair Market Value of stock with respect to which all incentive stock options described in the preceding sentence held by any one Optionee are exercisable for the first time by such Optionee during any calendar year exceeds $100,000, the Options (that are intended to be Incentive Stock Options on the date of grant thereof) for the first $100,000 worth of shares of Common Stock to become exercisable in such year shall be deemed to constitute incentive stock options within the meaning of Section 422 of the Code and the Options (that are intended to be Incentive Stock Options on the date of grant thereof) for the shares of Common Stock in the amount in excess of $100,000 that become exercisable in that calendar year shall be treated asNon-Qualified Stock Options. If the Code is amended after the Effective Date to provide for a different limit than the one described in this Section 8(a)(v), such different limit shall be incorporated herein and shall apply to any Options granted after the effective date of such amendment.

(vi)Acceleration of Vesting. Any Option granted hereunder which is not otherwise vested shall vest in full (unless specifically provided to the contrary by the Committee in the document or instrument evidencing an Option granted hereunder or in an employment or other agreement or plan) upon (A) a Change in Control, but only as provided for in Section 15(c); or (B) death or Disability of the Participant. Additionally, in the event of an involuntary termination of an Employee or Consultant or removal of aNon-Employee Director without Cause (unless specifically provided to the contrary by the Committee in the document or instrument evidencing an Option granted hereunder or in an employment or other agreement or plan) and subject to the Participant’s execution of a release of claims in the form provided by the Company, (x) any unvested Options that are not subject to performance-vesting conditions and that were granted at least six (6) months prior to the date of termination shall vest in full, and (y) a pro rata portion (determined based on the number of complete months from the grant date through the date of terminationdivided by the number of months in the performance period with respect thereto) of any unvested Options that are subject to performance-vesting conditions and that were granted at least six (6) months prior to the date of termination will remain outstanding and shall vest based on the actual performance levels achieved in accordance with the terms of the award.

(b)Transferability of Options. Options granted under the Plan, and any interest therein, shall not be transferable or assignable by the Optionee, and may not be made subject to execution, attachment or similar process, otherwise than by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of the Optionee only by the Optionee; provided, however , that the Optionee may designate persons who or which may exercise his Options following his death. Notwithstanding the preceding sentence,Non-Qualified Stock Options may be transferred to such family members, family member trusts, family limited partnerships and other family member entities as the Committee, in its sole discretion, may provide for in the Optionee’s Option Agreement and approve prior to any such transfer. No such transfer will be approved by the Committee if the Common Stock issuable under such transferred Option would not be eligible to be registered on FormS-8 promulgated under the Securities Act.

(c)Manner of Exercise. Options may be exercised in such manner as approved by the Company from time to time, including by delivery to the Company of a written exercise notice or by an exercise election made by a Participant through an electronic procedure authorized by the Company (which method or procedure need not be the same for each Optionee), stating the number of shares of Common Stock being purchased, the method of payment, and such other matters as may be deemed appropriate by the Company in connection with the issuance of shares of Common Stock upon exercise of the Option, together with payment in full of the exercise price for the number of shares of Common Stock being purchased and satisfaction of the tax withholding provisions described in Section 17.

(d)Payment of Exercise Price. Payment of the aggregate exercise price for the shares of Common Stock to be purchased upon exercise of an Option may be made in cash (by check) or, if elected by the Optionee, in any of the following methods: (i) if a public market for the Common Stock exists, upon the Optionee’s written request, the Company may deliver certificates for the shares of Common Stock for which the Option is being exercised to a broker for sale on behalf of the Optionee,provided that the Optionee has irrevocably instructed such broker to remit from the proceeds of such sale directly to the Company on the Optionee’s behalf the full amount of the exercise price plus any taxes the Company is required to withhold; (ii) by surrender to the Company for cancellation of shares of Common Stock owned by the Optionee having an aggregate Fair Market Value on the date of exercise equal to (or, to avoid the cancellation of fractional shares of Common Stock, less than) the aggregate exercise price of the shares of Common Stock being purchased upon such exercise;provided that such surrendered shares are not subject to any pledge or other security interest and have or meet such other requirements, if any, as the Committees may determine necessary in order to avoid an accounting earnings charge in respect of the Option being exercised; (iii) by a “net exercise” method whereby the Company withholds from the delivery of shares of Common Stock subject to the Option (or the portion thereof that is being exercised) that number of whole shares having an aggregate Fair Market Value on the date of exercise equal to (or, to avoid the issuance of fractional shares of Common Stock, less than) the aggregate exercise price of the shares of Common Stock being purchased upon such exercise; or (iv) by any combination of the foregoing, including a cash payment. No shares of Common Stock may be issued until full payment of the purchase price thereof has been made.

(e)Exercise of Option Following Termination of Continuous Service.

(i) Subject to the other provisions of this Section 8(e), (A) an Optionee may exercise an Incentive Stock Option for a period of three (3) months following the date the Optionee’s Continuous Service terminates and (B) an Optionee may exercise aNon-Qualified Stock Option for a period of six (6) months following the date the Optionee’s Continuous Service terminates, but in each case, only to the extent the Optionee was otherwise entitled to exercise the Option on the date the Optionee’s Continuous Service terminates.

(ii) If the Optionee’s Continuous Service is terminated by the Company or an Affiliate for Cause, the Optionee’s right to exercise the Option shall immediately terminate.

(iii) If the Optionee’s Continuous Service terminates as a result of the Optionee’s Disability, the Optionee may exercise the Option for a period of one (1) year following the date the Optionee’s Continuous Service terminates.

(iv) In the event of the termination of the Optionee’s Continuous Service as a result of the Optionee’s death, the Optionee’s estate, or a person who acquired the right to exercise the Option by bequest or inheritance, may exercise the Option for a period of one (1) year following the Optionee’s date of death.

(v) An Option shall terminate to the extent not exercised on the last day of the specified post- termination exercise periods set forth above or the last day of the original term of the Option, whichever occurs first.

(vi) The Committees shall have discretion to determine whether the Continuous Service of an Optionee has terminated, the effective date on which such Continuous Service terminates and whether the Optionee’s Continuous Service terminated as a result of the Disability of the Optionee. The determination of whether a Participant’s Continuous Service was terminated for Cause shall be determined as provided for in Section 3(g).

(f)Limitations on Exercise.

(i) The Committees may specify a reasonable minimum number of shares of Common Stock or a percentage of the shares subject to an Option that may be purchased on any exercise of an Option;provided that such minimum number will not prevent Optionee from exercising the full number of shares of Common Stock as to which the Option is then exercisable.

(ii) The obligation of the Company to issue any shares of Common Stock pursuant to the exercise of any Option shall be subject to the condition that such exercise and the issuance and delivery of such shares pursuant thereto comply with the Securities Act, all applicable state securities laws and the requirements of any stock exchange or market-quotation system upon which the shares of Common Stock may then be listed or quoted, as in effect on the date of exercise. The Company shall be under no obligation to register the shares of Common Stock with the Securities and Exchange Commission or to effect compliance with the registration, qualification or listing requirements of any state securities laws or stock exchange or market-quotation system, and the Company shall have no liability for any inability or failure to do so.

(iii) As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the shares of Common Stock are being purchased only for investment and without any present intention to sell or distribute such shares of Common Stock if, in the opinion of counsel for the Company, such a representation is required by any securities or other applicable laws.

(g)Modification, Extension And Renewal of Options. The Committee shall have the power to modify, cancel, extend (subject to the provisions of Section 8(a)(iv) hereof) or renew outstanding Options and to authorize the grant of new Options and/or Restricted Stock Awards in substitution therefor;provided, however, that (i) except as permitted by Section 15(a) of the Plan, any such action may not reprice any outstanding Option to reduce the exercise price thereof, directly or indirectly, without the approval of the stockholders of the Company and, (ii) without the written consent of any affected Optionee, (A) impair any rights under any Option previously granted to such Optionee, (B) cause the Option or the Plan to become subject to Section 409A of the Code, or (C) cause any Option to lose its status as Performance-Based Compensation. Notwithstanding anything to the contrary contained in this Section 8(g), no Option may be replaced with another Award that would have a higher intrinsic value than the value of the Option at the time of its replacement. Any outstanding Incentive Stock Option that is modified, extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the Code.

(h)Privileges of Stock Ownership. No Optionee will have any of the rights of a stockholder with respect to any shares of Common Stock subject to an Option until such Option is properly exercised and the purchased shares are issued and delivered to the Optionee, as evidenced by an appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to such date of issuance and delivery, except as provided in the Plan.

(i)Acquisitions and Other Transactions. The Committee may, from time to time, assume outstanding options granted by another entity, whether in connection with an acquisition of such other entity or otherwise, by either (i) granting an Option under the Plan in replacement of or in substitution for the option assumed by the Company, or (ii) treating the assumed option as if it had been granted under the Plan if the terms of such assumed option could be applied to an Option granted under the Plan. Such assumption shall be permissible if the holder of the assumed option would have been eligible to be granted an Option hereunder if the other entity had applied the rules of the Plan to such grant. The Committee also may grant Options under the Plan in settlement of or substitution for outstanding options or obligations to grant future options in connection with the Company or an Affiliate acquiring another entity, an interest in another entity or an additional interest in an Affiliate, whether by merger, stock purchase, asset purchase or other form of transaction. Shares of Common Stock subject to an assumed or substituted option resulting from a merger transaction involving the Company or an Affiliate will not reduce the Share Pool Limit described in Section 5. Notwithstanding the foregoing provisions of this Section 8, in the case of an Option issued or assumed pursuant to this Section 8(i), the exercise price for the Option shall be determined in accordance with the principles of Sections 424(a) and 409A of the Code.

9. BONUS STOCK AWARDS.

(a)Bonus Stock Awards. The Committee may, from time to time and subject to the provisions of the Plan, grant a Bonus Stock Award to Employees, Consultants orNon-Employee Directors. A Bonus Stock Award is a grant of shares of Common Stock for such consideration, if any, as established by the Committee and that are not subject to forfeiture provisions.

(b)Rights as Shareholder. Shares of Common Stock awarded pursuant to a Bonus Stock Award shall be represented by a stock certificate registered in the name of and delivered to, or held in a book entry account by the Company’s transfer agent established on behalf of, the Participant to whom such Bonus Stock Award is granted.

(c)Payment for Bonus Stock. The Committee shall determine the amount and form of any payment for shares of Common Stock received by a Participant pursuant to a Bonus Stock Award. In the absence of such a determination, the Participant shall not be required to make any payment for shares of Common Stock received pursuant to a Bonus Stock Award, except to the extent otherwise required by law.

10.STOCK APPRECIATION RIGHTS. The Committee may grant Stock Appreciation Rights to Employees, Consultants orNon-Employee Directors. The terms and conditions of Stock Appreciation Rights, including the vesting and exercise provisions, shall be set forth in a Stock Appreciation Rights Agreement (which need not be the same for each Participant) in such form as the Committee approves, but which is not inconsistent with the Plan. A Stock Appreciation Right may be granted (i) if unrelated to an Option, at any time or (ii) if related to an Option, either at the time of grant or at any time thereafter during the term of the Option. The exercise price of any Stock Appreciation Right shall be not less than the Fair Market Value of the Common Stock on the grant date of the Award.

(a)Payment of Stock Appreciation Rights. A Stock Appreciation Right is a right to receive, upon exercise of the right, shares of Common Stock or their cash equivalent in an amount equal to the increase, if any, in Fair Market Value of the Common Stock between the grant and exercise dates. The Committee may specifically designate in a Stock Appreciation Rights Agreement that the Award will be settled (i) only in cash, (ii) only in shares of Common Stock or (iii) in such combination of such forms and, if not so provided in the Stock Appreciation Rights Agreement, the Award will be settled in shares of Common Stock unless the Committee determines, at the time of exercise of the Award, that the Award will be settled in cash or a combination of shares of Common Stock and cash.

(b)Tandem Rights. Stock Appreciation Rights may be granted in connection with the grant of an Option, in which case (i) the Stock Appreciation Rights shall be exercisable at such time or times and only to the extent that the related Option is exercisable, (ii) exercise of Stock Appreciation Rights will result in the surrender of the right to purchase the shares under the Option as to which the Stock Appreciation Rights were exercised and (iii) the Stock Appreciation Rights will not be transferable (other than by will or the laws of descent and distribution) except to the extent the Related Option is transferable. Upon the exercise of an Option granted in connection with Stock Appreciation Rights, the Stock Appreciation Rights shall be cancelled to the extent of the number of shares of Common Stock as to which the Option is exercised or surrendered.

(c)Stock Appreciation Rights Unrelated to an Option. Stock Appreciation Rights unrelated to Options shall contain such terms and conditions as to exercisability, vesting and duration as the Committee shall determine, but in no event shall they have a term greater than ten (10) years. Each such Stock Appreciation Right that is unrelated to an Option may be exercised by the Participant for a period of six (6) months following the date the Participant’s Continuous Service terminates, but only to the extent the Participant was otherwise entitled to exercise the Stock Appreciation Right on the date the Participant’s Continuous Service terminates (and in no event later than the expiration date of the Award);provided, however , that if the Participant’s Continuous Service terminates for Cause, the Optionee’s right to exercise the Stock Appreciation Right shall immediately terminate.

(d)Date of Grant. The date of grant of an Award of Stock Appreciation Rights shall be the date on which the Committee makes the determination to grant such Award unless a later date is specified by the Committee at the time of such determination.

11.PHANTOM STOCK AWARDS. The Committee may, from time to time and subject to the terms of the Plan, grant Phantom Stock Awards to Employees, Consultants andNon-Employee Directors. Each Phantom Stock Award Agreement shall be in such form and contain such terms and conditions (which need not be the same for each Participant who receives a Phantom Stock Award) as the Committee shall deem appropriate, but such terms shall take into account the provisions of Section 409A of the Code applicable to the Award. The Award date of a Phantom Stock Award shall be the date on which the Committee makes the determination to grant the Award unless a later date is specified by the Committee at the time of such determination.

(a)Payment of Phantom Stock Awards. A Phantom Stock Award is a right to receive a specified number of shares of Common Stock or cash equal to the Fair Market Value of a specified number of shares of Common Stock issued or paid at the end of a Restricted Period or the last day of a specified deferral period.

(i)Award and Restrictions. Satisfaction of a Phantom Stock Award shall occur upon expiration of the deferral period or a Restricted Period specified for such Phantom Stock Award by the Committee (which may include a risk of forfeiture), if any, as the Committee may impose. Such restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, installments or otherwise, as the Committee may determine.

(ii)Award Period; Forfeiture. The Committee shall establish, at the time of grant of each Phantom Stock Award, a period over which (or the conditions with respect to which) the Award shall vest with respect to the Participant and the time at which the Award will be settled and paid. Except as otherwise determined by the Committee or as may be set forth in any Phantom Stock Award Agreement, employment or other agreement or plan pertaining to a Phantom Stock Award, upon termination of the Participant’s Continuous Service during the applicable deferral period or Restricted Period (including any applicable Performance Period) or portion thereof to which forfeiture conditions apply, all Phantom Stock Awards that are at that time subject to deferral of a Restricted Period shall be forfeited;provided that the Committee, subject to the provisions and limitations contained in Section 13(c) relating to Performance Awards, may provide at the time of grant of a Phantom Stock Award that restrictions or forfeiture conditions relating to Phantom Stock Awards shall be waived in whole or in part in the event of terminations of Continuous Service resulting from specified causes.

(iii)Performance Goals. To the extent the Committee determines that any Phantom Stock Award granted pursuant to this Section 11 is intended to constitute Performance-Based Compensation, the grant and settlement of the Award shall be subject to the achievement of Performance Goals determined and applied in a manner consistent with the provisions of Section 13 and the other relevant provisions of Section 13.

12.RESTRICTED STOCK AWARDSAND RESTRICTED STOCK UNIT AWARDS.

(a)Restricted Stock Awards.The Committee and the Equity Grant Committee may, from time to time and subject to the terms of the Plan, grant Restricted Stock Awards to Employees, Consultants andNon-Employee Directors. Each Restricted Stock Agreement shall be in such form and shall contain such terms and conditions as the Committee, or if applicable, the Equity Grant Committee, shall deem appropriate. The terms and conditions of such Restricted Stock Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Agreements need not be identical, but each such Restricted Stock Agreement shall be subject to the terms and conditions of this Section 12(a). Solely for purposes of this Section 12(a), the term “Committees” means the Committee and the Equity Grant Committee, each acting within the scope of its authority under the Plan with respect to Restricted Stock Awards. The Award date of a Restricted Stock Award shall be the date on which the Committees make the determination to grant the Award unless a later date is specified by the Committees at the time of such determination.

(i)Forfeiture Restrictions. Shares of Common Stock that are the subject of a Restricted Stock Award shall be subject to restrictions on disposition by the Participant and to an obligation of the Participant to forfeit and surrender the shares to the Company under certain circumstances (the “Forfeiture Restrictions”). The Forfeiture Restrictions and the Restricted Period shall be determined by the Committees in their sole discretion, and the Committees may provide that the Forfeiture Restrictions and the Restricted Period shall lapse on the passage of time, the attainment of one or more Performance Goals, established by the Committees or the occurrence of such other event or events determined to be appropriate by the Committees. The Forfeiture Restrictions applicable to a particular Restricted Stock Award (which may differ from any other such Restricted Stock Award) shall be stated in the Restricted Stock Agreement and vesting of such Restricted Stock Award shall occur upon the lapse of the Forfeiture Restrictions applicable to such Restricted Stock Award.

(ii)Rights as Stockholder. Shares of Common Stock awarded pursuant to a Restricted Stock Award shall be represented by a stock certificate registered in the name of the Participant of such Restricted Stock Award or by a book entry account with the Company’s transfer agent. The Participant shall have the right to vote the shares of Common Stock subject thereto and to enjoy all other stockholder rights with respect to the shares of Common Stock subject thereto, except that, unless provided otherwise in the Restricted Stock Agreement, (i) the Participant shall not be entitled to delivery of the stock certificates evidencing the shares of Common Stock or release of transfer restrictions on shares of Common Stock held in a book entry account with the Company’s transfer agent until the Forfeiture Restrictions have expired, (ii) the Company or an escrow agent shall retain custody of the stock certificates evidencing the shares of Common Stock (or such shares shall be held in a book entry account with the Company’s transfer agent) until the Forfeiture Restrictions expire and (iii) the Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the shares of Common Stock until the Forfeiture Restrictions expire. During the period of restriction, all dividends (whether ordinary or extraordinary and whether paid in cash, additional shares or other property) or other distributions paid upon any Restricted Stock Award will be retained by the Company for the account of the Participant. Such dividends or other distributions will revert back to the Company if for any reason the Restricted Stock Award reverts back to the Company. Upon the expiration of the Forfeiture Restrictions, all dividends or other distributions made on such Restricted Stock Award and retained by the Company will be paid, without interest, to the Participant.

(iii)Release of Common Stock. One or more stock certificates representing shares of Common Stock, free of Forfeiture Restrictions, shall be delivered to the Participant (or the transfer restrictions on shares of Common Stock held in a book entry account for the Participant will be released) promptly after, and only after, the Forfeiture Restrictions expire and Participant has satisfied all applicable federal, state and local income and employment tax withholding requirements. The Participant, by his acceptance of the Restricted Stock Award, shall irrevocably grant to the Company a power of attorney to transfer any shares so forfeited to the Company and agrees to execute any documents requested by the Company in connection with such forfeiture and transfer, and such provisions regarding transfers of forfeited shares of Common Stock shall be specifically performable by the Company in a court of equity or law.

(iv)Payment for Restricted Stock. The Committees shall determine the amount and form of any payment for shares of Common Stock received pursuant to a Restricted Stock Award;provided that in the absence of such a determination, the Participant shall not be required to make any payment for shares of Common Stock received pursuant to a Restricted Stock Award, except to the extent otherwise required by law.

(v)Forfeiture of Restricted Stock. Unless otherwise provided in a Restricted Stock Agreement or in an employment or other agreement or plan, on termination of the Participant’s Continuous Service during the Restricted Period, the shares of Common Stock which are still subject to the Restricted Stock Award shall be forfeited by the Participant. Upon any forfeiture, all rights of the Participant with respect to the forfeited shares of the Common Stock subject to the Restricted Stock Award shall cease and terminate, without any further obligation on the part of the Company. Notwithstanding the foregoing (but subject to the

provisions and limitations contained in Sections 13(c) and 13(d) relating to Performance Awards), unless the Award specifically provides otherwise, all Restricted Stock not otherwise vested shall vest in full upon (i) a Change in Control, but only as provided for in 15(c); or (ii) death or Disability of the Participant. Additionally, in the event of an involuntary termination of an Employee or Consultant or removal of aNon-Employee Director without Cause (unless specifically provided to the contrary by the Committee in the document or instrument evidencing a Restricted Stock Award granted hereunder or in an employment or other agreement or plan) and subject to the Participant’s execution of a release of claims in the form provided by the Company, (x) any unvested Restricted Stock that is not subject to performance-vesting conditions and that was granted at least six (6) months prior to the date of termination shall vest in full, and (y) a pro rata portion (determined based on the number of complete months from the grant date through the date of terminationdivided by the number of months in the performance period with respect thereto) of any unvested Restricted Stock that is subject to performance-vesting conditions and that was granted at least six (6) months prior to the date of termination will remain outstanding and shall vest based on the actual performance levels achieved in accordance with the terms of the award.

(vi)Waiver of Forfeiture Restrictions; Committee’s Discretion. With respect to a Restricted Stock Award that has been granted to a Covered Employee where such Award has been designed to meet the exception for Performance-Based Compensation, the Committee may not waive the Forfeiture Restrictions applicable to such Restricted Stock Award.

(b)Restricted Stock Unit Awards.The Committee may, from time to time and subject to the terms of the Plan, grant Restricted Stock Unit Awards to Employees, Consultants andNon-Employee Directors. Each Restricted Stock Unit Award Agreement shall be in such form and contain such terms and conditions (which need not be the same for each Participant who receives a Restricted Stock Unit Award) as the Committee shall deem appropriate, but such terms shall take into account the provisions of Section 409A of the Code applicable to the Award. The Award date of a Restricted Stock Unit Award shall be the date on which the Committee makes the determination to grant the Award unless a later date is specified by the Committee at the time of such determination.

(i)Settlement of Restricted Stock Unit Awards. A Restricted Stock Unit Award is a right to receive a specified number of shares of Common Stock or cash equal to the Fair Market Value of a specified number of shares of Common Stock issued or paid at the end of a Restricted Period or the last day of a specified deferral period.

(A)Award and Restrictions. Settlement of a Restricted Stock Unit Award shall occur upon expiration of the deferral period or a Restricted Period specified for such Restricted Stock Unit Award by the Committee (which may include a risk of forfeiture), if any, as the Committee may impose. Such restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, installments or otherwise, as the Committee may determine.

(B)Award Period; Forfeiture. The Committee shall establish, at the time of grant of each Restricted Stock Unit Award, a period over which (or the conditions with respect to which) the Award shall vest with respect to the Participant and the time at which the Award will be settled and paid. Except as otherwise determined by the Committee or as may be set forth in any Restricted Stock Unit Award Agreement, employment or other agreement or plan pertaining to a Restricted Stock Unit Award, upon termination of the Participant’s Continuous Service during the applicable deferral period or Restricted Period (including any applicable Performance Period) or portion thereof to which forfeiture conditions apply, all Restricted Stock Unit Awards that are at that time subject to deferral or a Restricted Period shall be forfeited;provided that the Committee, subject to the provisions and limitations contained in Section 13(c) relating to Performance Awards, may provide at the time of grant of a Restricted Stock Unit Award that restrictions or forfeiture conditions relating to Restricted Stock Unit Awards shall be waived in whole or in part in the event of terminations of Continuous Service resulting from specified causes. Notwithstanding the foregoing (but subject to the provisions and limitations contained in Sections 13(c) and 13(d) relating to Performance Awards), unless otherwise provided in a Restricted Stock Unit Award Agreement or in an employment or other agreement or plan, all Restricted Stock Unit Awards not otherwise vested shall vest in full upon (i) a Change in Control, but only as provided for in 15(c); or (ii) death or Disability of the Participant. Additionally, in the event of an involuntary termination of an Employee or Consultant or removal of aNon-Employee Director without Cause (unless specifically provided to the contrary by the Committee in the document or instrument evidencing a Restricted Stock Unit Award granted hereunder or in an employment or other agreement or plan) and subject to the Participant’s execution of a release of claims in the form provided by the Company, (x) any unvested Restricted Stock Unit Award that is not subject to performance-vesting conditions and that was granted at least six (6) months prior to the date of termination shall vest in full, and (y) a pro rata portion (determined based on the number of complete months from the grant date through the date of terminationdivided by the number of months in the performance period with respect thereto) of any unvested Restricted Stock Unit Award that is subject to performance-vesting conditions and that was granted at least six (6) months prior to the date of termination will remain outstanding and shall vest based on the actual performance levels achieved in accordance with the terms of the award.

(C)Performance Goals. To the extent the Committee determines that any Restricted Stock Unit Award granted pursuant to this Section 12(b) is intended to constitute Performance-Based Compensation, the grant and settlement of the Award shall be subject to the achievement of Performance Goals determined and applied in a manner consistent with the provisions of Section 13 and the other relevant provisions of Section 13.

13. CASH AWARDS AND PERFORMANCE AWARDS.

(a)Cash Awards. In addition to granting Options, Stock Appreciation Rights, Bonus Stock, Phantom Stock Awards, Restricted Stock Awards, Restricted Stock Unit Awards and Other Stock or Performance-Based Awards, the Committee shall, subject to the limitations of the Plan, have authority to grant Cash Awards. Each Cash Award shall be subject to such terms and conditions, restrictions and contingencies as the Committee shall determine. Restrictions and contingencies limiting the right to receive a cash payment pursuant to a Cash Award shall be based upon the achievement of single or multiple Performance Goals over a Performance Period established by the Committee. The determinations made by the Committee pursuant to this Section 13(a) shall be specified in the applicable Award agreement or other document or documents established by the Committee pursuant to which the Cash Award is granted.

(b)Designation as a Performance Award. The Committee shall have the right to designate any Award of Options, Stock Appreciation Rights, Phantom Stock Awards, Restricted Stock Awards, Restricted Stock Unit Awards and Other Stock or Performance- Based Awards as a Performance Award. All Cash Awards shall be designated as Performance Awards. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to increase the amounts payable under any Award subject to performance conditions except as limited under Section 13(c) in the case of a Performance Award granted to a Covered Employee. The grant and/or settlement of a Performance Award shall be subject to the terms and conditions set forth in this Section 13. The Committee may also grant performance-based Awards pursuant to Section 14 that are not intended to satisfy the provisions of this Section 13 to an eligible individual who is not at the time a Covered Employee and is not expected to be a Covered Employee at the time the compensation under the Award is to be paid.

(c)Performance Goals. The grant or vesting of a Performance Award shall be subject to the achievement of Performance Goals over a Performance Period established by the Committee based upon one or more of the business criteria described in Section 13(c)(ii) that apply to the Participant, one or more business units, divisions or subsidiaries of the Company or the applicable sector of the Company, one or more regions or product lines of the Company’s business, or the Company as a whole, and if so desired by the Committee, by comparison with a peer group of companies.

(i)General. The Performance Goals for Performance Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee. In the case of any Award granted to a Covered Employee, Performance Goals shall be designed to be objective and shall otherwise meet the requirements of Section 162(m) of the Code, including the requirement that the level or levels of performance targeted by the Committee are such that the achievement of Performance Goals is “substantially uncertain” at the time of grant. The Committee may determine that such Performance Awards shall be granted and/or settled upon achievement of any one Performance Goal or that two or more of the Performance Goals must be achieved as a condition to the grant and/or settlement of such Performance Awards. Performance Goals may differ among Performance Awards granted to any one Participant or for Performance Awards granted to different Participants.

(ii)Business Criteria. One or more of the following business criteria shall be used by the Committee in establishing performance goals for Performance Awards granted to a Participant: (A) earnings per share; (B) revenue (including increased revenues); (C) profit measures (including gross profit, operating profit, economic profit, net profit before taxes and adjustedpre-tax profit); (D) cash flow measures (including cash flow return on capital, cash flow return on tangible capital, net cash flow, distributable cash flow and distributable cash flow per share and net cash flow before financing activities); (E) return measures (including return on equity, return on assets, return on capital, risk-adjusted return on capital, return on investors’ capital and return on average equity); (F) economic value added; (G) gross margin; (H) net income measures (including income after capital costs and income before or after taxes); (I) earnings; (J) pretax earnings; (K) earnings before interest, taxes, depreciation and amortization (“EBITDA”) or adjusted EBITDA; (L) earnings before taxes and depreciation (“EBTD”); (M) earnings before interest and taxes (“EBIT”); (N) pretax operating earnings after interest expense and before incentives, service fees, and extraordinary or special items; (O) operating measures (including operating income, funds from operations, cash from operations,after-tax operating income; sales volumes, production volumes and production efficiency); (P) stock price measures (including growth measures and total stockholder return); (Q) debt reduction; (R) price per share of Common Stock; (S) market share; (T) earnings per share or adjusted earnings per

share (actual or growth in); (U) economic value added (or an equivalent metric); (V) market value added; (W) debt to equity ratio; (X) expense measures (including overhead cost and general and administrative expense); (Y) changes in working capital; (Z) margins; (AA) stockholder value; (BB) proceeds from dispositions; (CC) total market value; (DD) customer satisfaction or growth; (EE) contracted LNG quantity and (FF) implementation, completion or attainment of measurable objectives with respect to financing or construction of entire projects or stages of projects. Any of the above goals determined on the absolute or relative basis or as compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index or a group of comparable companies. The Committee may determine that certain items, events or occurrences, including unusual or nonrecurring items, changes in accounting standards or tax laws, or other adjustments shall be added to or excluded from the calculation of any of the business criteria set forth above, subject to the requirements of Section 162(m) of the Code to the extent applicable.

(iii)Performance Period; Timing for Establishing Performance Goals. Achievement of performance goals in respect of Performance Awards may be measured based on performance over a Performance Period, as specified by the Committee, or may be determined based on whether or not the performance goals are satisfied at any time prior to the expiration of a Performance Period. Performance Goals in the case of any Award granted to a Participant shall be established not later than 90 days after the beginning of any performance period applicable to such Performance Awards, or at such other date as may be required or permitted for Performance-Based Compensation. Notwithstanding the foregoing provisions, if the Committee intends for a Performance Award to be granted and administered in a manner designed to preserve the deductibility of the compensation resulting from such Award in accordance with Section 162(m) of the Code, then the Performance Goals for such particular Performance Award relative to the particular period of service to which the Performance Goals relates shall be established by the Committee in writing (i) no later than 90 days after the beginning of such period and (ii) prior to the completion of 25% of such period.

(iv)Settlement of Performance Awards; Compensation Contingent Upon Attainment of Performance Goal. In the case of a performance goal measured over a Performance Period, at or after the end of the Performance Period, the Committee shall determine the amount, if any, of Performance Awards payable to each Participant based upon achievement of the business criteria over a Performance Period. In the case of a performance goal satisfied based upon whether or not certain specified business criteria are achieved at any time during a Performance Period, at or following the satisfaction of the applicable business criteria (even if prior to the expiration of the applicable Performance Period), the Committee shall determine the amount, if any, of Performance Awards payable to each Participant upon the achievement of the applicable business criteria. The Committee may not exercise discretion to increase any such amount payable in respect of a Performance Award designed to comply with Section 162(m) of the Code. The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of Continuous Service by the Participant prior to the end of a Performance Period or settlement of Performance Awards. To the extent a Performance Award is intended to constitute Performance-Based Compensation, compensation payable under the Award must be contingent on attaining the applicable Performance Goals;provided;however, that such an Award may provide that the compensation will be paid on death, Disability or a Change in Control, although compensation actually paid on account of those events prior to the attainment of the applicable Performance Goals will not satisfy the Performance-Based Compensation requirements.

(v)Written Determinations. The Committee shall have the authority to determine whether the Performance Goals and other terms and conditions of the Award satisfied all determinations by the Committee as to the establishment of Performance Goals, the amount of any Performance Award, and the achievement of Performance Goals relating to Performance Awards shall be made in writing in the case of any Award granted to a Participant. The Committee may not delegate any responsibility relating to such Performance Awards.

(d)Status of Performance Awards under Section 162(m) of the Code. It is the intent of the Company that Performance Awards granted to persons who are designated by the Committee as likely to be Covered Employees within the meaning of Section 162(m) of the Code shall, if so designated by the Committee, constitute Performance-Based Compensation. Accordingly, the terms of this Section 13 shall be interpreted in a manner consistent with Section 162(m) of the Code. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Participant will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a person designated by the Committee, at the time of grant of a Performance Award, who is likely to be a Covered Employee with respect to that fiscal year. If any provision of the Plan as in effect on the date of adoption or any agreements relating to Performance Awards that are designated as intended to comply with Section 162(m) of the Code does not comply or is inconsistent with the requirements of Section 162(m) of the Code, such provision shall be construed or, to the extent permitted under the Code, deemed amended to the extent necessary to conform to such requirements.

(e)Waiver of Performance Goals. The Committee shall have no discretion to modify or waive the Performance Goals or conditions to the grant or vesting of a Performance Award unless such Award is not intended to qualify as qualified Performance-Based Compensation and the relevant Award Agreement provides for such discretion.

14. OTHER STOCK OR PERFORMANCE-BASED AWARDS.

The Committee is hereby authorized to grant to Employees, Consultants andNon-Employee Directors, Other Stock or Performance-Based Awards, which shall consist of a right that (i) is not an Award described in any other Section of the Plan and (ii) is denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of Common Stock (including, without limitation, securities convertible into shares of Common Stock) as are deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan, the Committee shall determine the terms and conditions of any such Other Stock or Performance-Based Award. The term of an Award granted under this Section shall in no event exceed a period of ten (10) years (or if the Award is intended to satisfy the provisions of Section 13, such shorter period provided for in Section 13). If the Committee intends that the compensation payable under any such Award be treated as Performance-Based Compensation, the Award will be subject to the provisions of Section 13.

15. ADJUSTMENT UPON CHANGES IN CAPITALIZATION AND CORPORATE EVENTS.

(a)Capital Adjustments. The number of shares of Common Stock (i) covered by each outstanding Award granted under the Plan, the exercise or purchase price of such outstanding Award, and any other terms of the Award that the Committee determines requires adjustment and (ii) available for issuance under Sections 5 and 7 shall be proportionately adjusted or an equitable substitution shall be made with respect to such shares to reflect, as determined by the Committee, any increase or decrease in the number of shares of Common Stock resulting from a stock dividend, stock split, reverse stock split, extraordinary cash dividend resulting from a nonrecurring event that is not a payment of normal corporate earnings, combination, reclassification or similar change in the capital structure of the Company without receipt of consideration, subject to any required action by the Board or the stockholders of the Company and compliance with applicable securities laws or other applicable laws;provided, however , that a fractional share will not be issued upon exercise of any Award, and either (i) the value of any fraction of a share of Common Stock that would have resulted will be cashed out at Fair Market Value or (ii) the number of shares of Common Stock issuable under the Award will be rounded down to the nearest whole number, as determined by the Committee. Except as the Committee determines, no issuance by the Company of shares of capital stock of any class, or securities convertible into shares of capital stock of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of shares of Common Stock subject to an Award. Notwithstanding the foregoing provisions of this Section 15, no adjustment may be made by the Committee with respect to an outstanding Award that would cause such Award and/or the Plan to become subject to Section 409A of the Code or that would cause an Award that is intended to be Performance-Based Compensation to fail to satisfy the requirements of Section 162(m) of the Code for such form of compensation.

(b)Dissolution or Liquidation. The Committee shall notify the Participant at least twenty (20) days prior to any proposed dissolution or liquidation of the Company. Unless provided otherwise in an individual Award, to the extent that an Award has not been previously exercised or settled, or the Restricted Period has not lapsed, any such Award other than a Restricted Stock Award shall expire and any such Award that is a Restricted Stock Award shall be forfeited and the shares of Common Stock subject to such Restricted Stock Award shall be returned to the Company, in each case, immediately prior to consummation of such dissolution or liquidation, and such Award shall terminate immediately prior to consummation of such dissolution or liquidation. A “dissolution or liquidation of the Company” shall not be deemed to include, or to be occasioned by, any merger or consolidation of the Company with any other corporation or other entity or any sale of all or substantially all of the assets of the Company (unless that sale is effected as part of a plan of liquidation of the Company in which the Company’s business and affairs are wound up and the corporate existence of the Company is terminated).

(c)Change in Control. Unless specifically provided otherwise with respect to Change in Control events in an individual Option Agreement, Stock Appreciation Rights Stock Agreement or in a then-effective written employment agreement between the Participant and the Company, if, during the effectiveness of the Plan, a Change in Control occurs, each Option and Stock Appreciation Right which is at the time outstanding under the Plan shall (i) automatically become fully vested and exercisable, immediately prior to the specified effective date of such Change in Control, for all of the shares of Common Stock at the time represented by such Option or Stock Appreciation Right and (ii) expire twenty (20) days after the Committee gives written notice to the Participant specifying the terms and conditions of the acceleration of the Participant’s Options or Stock Appreciation Rights, or if earlier, the date by which the Option or Stock Appreciation Right otherwise would expire. To the extent that an Optionee exercises his Option before or on the effective date of the Change in Control, the Company shall issue all Common Stock

purchased by exercise of that Option (subject to Optionee’s satisfaction of the requirements of Section 17), and those shares of Common Stock shall be treated as issued and outstanding for purposes of the Change in Control. If a Participant does not exercise his Option within the twenty (20) day period described above, or if earlier, the date by which the Option or Stock Appreciation Right otherwise would expire, the Option or Stock Appreciation Right shall immediately be forfeited and the Participant shall have no further rights to exercise the Option or Stock appreciation Right. Notwithstanding the foregoing provisions, in the event of any Change in Control, all of the Company’s obligations regarding Options and Stock Appreciation Rights that were granted hereunder and that are outstanding and vested on the date of such event (taking into consideration any acceleration of vesting in connection with such transaction) may, on such terms as may be approved by the Committee prior to such event, be (i) assumed by the surviving or continuing corporation (or substituted options of equal value may be issued by such corporation) or (ii) canceled in exchange for cash, securities of the acquiror or other property in an amount equal to the amount that would have been payable to a Participant pursuant to the Change in Control event if the Participant’s vested Options and Stock Appreciation Rights had been fully exercised immediately prior to the Change in Control event; provided, however, that if the amount that would have been payable to a Participant pursuant to such transaction if such Participant’s vested Options and Stock Appreciation Rights had been fully exercised immediately prior thereto would be equal to or less than the aggregate exercise price that would have been payable therefor, the Committee may, in its discretion, cancel any or all such Options for no consideration or payment of any kind.

Unless specifically provided otherwise with respect to Change in Control events in an individual Award or in a then-effective written employment agreement between the Participant and the Company, if, during the effectiveness of the Plan, a Change in Control occurs, the Restricted Period applicable to outstanding Restricted Stock Awards, Restricted Stock Unit Awards and all other outstanding Awards subject to forfeiture provisions (other than Awards consisting of Options or Stock Appreciation Rights) shall lapse and such Awards shall become fully vested and settled (subject, in each case, to satisfaction by the affected Participant of the requirements of Section 17).

16. GENERAL PROVISIONS APPLICABLE TO ALL AWARDS.

(a)General. In addition to the other terms and conditions of the Plan pursuant to which Awards may be granted, the Committee may impose on any Award or the exercise thereof, such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of Continuous Service by the Participant and, to the extent permissible under Sections 162(m) and 409A of the Code, terms permitting a Participant to make elections relating to his or her Award. The Committee shall retain full power and discretion to accelerate or waive, at any time, any term or condition of an Award that is not mandatory under the Plan; provided, however, that the Committee shall not have any discretion to accelerate or waive any term or condition of an Award (i) that is intended to qualify as Performance-Based Compensation if such discretion would cause the Award not to so qualify or (ii) that would cause the Participant to incur additional taxes under Section 409A of the Code. Except in cases in which the Committee is authorized to require other forms of consideration under the Plan, or to the extent other forms of consideration must be paid to satisfy the requirements of the Delaware General Corporation Law, no consideration other than services may be required for the grant of any Award.

(b)Form of Award. Each Award granted under the Plan shall be evidenced by a written Award in such form (which need not be the same for each Participant) as the Committee from time to time approves, but which is not inconsistent with the Plan, including any provisions that may be necessary to assure that Awards satisfy the requirements of Section 409A of the Code to avoid the imposition of excise taxes thereunder and any Option that is intended to be an Incentive Stock Option will comply with Section 422 of the Code.

(c)Awards Criteria; Minimum Vesting. In determining the amount and value of Awards to be granted, the Committee may take into account the responsibility level, performance, potential, other Awards and such other considerations with respect to a Participant as it deems appropriate. Notwithstanding any other provision of the Plan to the contrary, all Awards under the Plan shall be subject to a minimum vesting schedule of at least 12 months following the date of grant of the Award,provided,however, that up to 5% of the shares underlying Awards granted after the Effective Date (including all Bonus Stock Awards) may be subject to vesting schedules of less than 12 months. Awards under the Plan granted to non-employee directors in respect of regular annual fees shall be deemed to satisfy the minimum vesting schedule set forth in the preceding sentence regardless of whether the Company’s subsequent regular annual meeting of shareholders is at least 12 months following the date of grant of the Award.

(d)Form and Timing of Payment under Awards. Subject to the terms of the Plan and any applicable Award, payments to be made upon the exercise or settlement of an Award shall be made as soon as administratively practicable following the date on which the

amount is payable. The settlement of any Award may, subject to any specific provisions or limitations set forth in the Award, be paid in the form of cash, Common Stock or a combination thereof, as determined by the Committee in connection with such settlement; provided, however , that no Award other than a Cash Award may be paid in cash in lieu of shares of Common Stock if the Committee determines that such action would cause the Participant to be subject to an additional tax under Section 409A of the Code.

(e)Termination of Continuous Service for Cause. In the event a Participant’s Continuous Service is terminated for Cause, all outstanding Awards that have then not been settled (whether vested or unvested) shall be forfeited immediately and any shares of Restricted Stock for which the Restricted Period had not lapsed as of the Participant’s termination of Continuous Service shall be transferred immediately out of the Participant’s name.

(f)Transferability of Awards. Except as provided in Section 8(b) with respect toNon-Qualified Stock Options, Awards granted under the Plan, and any interest therein, shall not be transferable or assignable by the Participant, and may not be made subject to execution, attachment or similar process, otherwise than by will or by the laws of descent and distribution, and shall be exercisable or payable during the lifetime of the Participant only by the Participant;provided that the Participant may designate persons who or which may exercise or receive his Awards following his death.

(g)Privileges of Stock Ownership. Except as provided in the Plan with respect to Bonus Stock Awards and as provided in Section 12(a)(ii) with respect to Restricted Stock Awards, no Participant will have any of the rights of a shareholder with respect to any shares of Common Stock subject to an Award until such Award is properly exercised or settled and the purchased or awarded shares are issued and delivered to the Participant, as evidenced by an appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to such date of issuance and delivery, except as provided otherwise in the Plan. No Award (or portion thereof) may provide for the payment of dividends or dividend equivalents before the date on which the Award (or portion thereof) vests.

(h)Performance-Based Compensation. The Committee may designate any Award as Performance-Based Compensation. Any Awards designated as Performance-Based Compensation shall be conditioned on the achievement of any one or more Performance Goals and shall be subject to the terms and conditions of Section 13. Notwithstanding any other provision of the Plan, the Committee may grant an Award that is not contingent on performance goals or an Award under Section 14 that is contingent on performance goals other than the Performance Goals and the business criteria set forth in Section 13(c), and is not subject to the other provisions of Section 13 so long as the Committee has determined that such Award is not intended to satisfy the requirements for Performance-Based Compensation under Section 162(m) of the Code.

(i)Clawback. Awards under the Plan shall be subject to the clawback or recapture policy, if any, that the Company may adopt from time to time or any clawback or recapture provisions set forth in an Award agreement to the extent provided in such policy or agreement and, in accordance with such policy or agreement, may be subject to the requirement that the Awards be repaid to the Company after they have been distributed or paid to the Participant.

(j)Section 409A.

(i)Separation from Service. Notwithstanding any provision contained in the Plan to the contrary, no amount shall be paid pursuant to the Plan that is treated being paid from a “nonqualified deferred compensation plan” as described in Section 409A(a)(1) of the Code relating to a Participant’s termination of Continuous Service with the Company or an Affiliate unless such termination of Continuous Service constitutes a “separation from service” as such term is defined under Treasury Regulation Section1.409A-1(h) and any successor provision thereto (“Separation from Service”).

(ii)Deferred Payments for Certain Key Employees. Notwithstanding any other provision contained in the Plan or a related Award document to the contrary, if the Company determines that (i) at the time of the Participant’s Separation from Service the Participant is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code and (ii) any payments to be provided to the Participant under the Plan are or may become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code (“409A Taxes”) if paid at the time such payments are otherwise required under the Plan or a related Award document, then such payments shall be delayed until the earlier of (A) the date that is six months after the date of the Participant’s Separation from Service or (B) the Participant’s death. If the amounts delayed are payable in installments, the delayed payments will be paid on the first day of the seventh month following the date of the Participant’s separation from service (or earlier death). The provisions of this Section 16(i)(ii) shall only apply to the minimum extent required to avoid the Participant’s incurrence of any 409A Taxes.

(iii)Section 409A Compliance; Separate Payments. The Plan is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under the Plan or a related Award document become subject to (A) the gross income inclusion set forth within Section 409A(a)(1) (A) of the Code or (B) the interest and additional tax set forth within Section 409A(a)(1)(B) of the Code (collectively, “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section1.409A-2(b)(2)(iii)), each payment that a Participant may be eligible to receive under the Plan or a related Award document shall be treated as a separate and distinct payment and shall not collectively be treated as a single payment.

17. WITHHOLDING FOR TAXES.

Any issuance of Common Stock pursuant to the exercise of an Option or payment of any other Award under the Plan shall not be made until appropriate arrangements satisfactory to the Company have been made for the payment of any income and employment tax amounts (federal, state, local or other) that may be required to be withheld or paid by the Company with respect thereto. In addition, on the occurrence of an event with respect to an Award that requires the Company to withhold taxes, the Participant shall make arrangements satisfactory to the Company whereby such taxes may be paid. Such arrangements may, at the discretion of the Committee, include allowing the person to tender to the Company shares of Common Stock owned by the person, or to request the Company to withhold shares of Common Stock being acquired pursuant to the Award, whether through the exercise of an Option or as a distribution pursuant to the Award, together with payment of any remaining portion of such tax amounts in cash or by check payable and acceptable to the Company.

Notwithstanding the foregoing, if on the date of an event giving rise to a tax withholding obligation on the part of the Company the person is an Executive Officer or individual subject to Rule16b-3, such person may direct that such tax withholding be effectuated by the Company withholding the necessary number of shares of Common Stock (at the tax rate required by the Code) from such Award payment or exercise.

18. MISCELLANEOUS.

(a)No Rights to Awards. No Participant or other person shall have any claim to be granted any Award, there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards and the terms and conditions of Awards need not be the same with respect to each recipient.

(b)Governing Law. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with applicable federal law and the laws of the State of Delaware, without regard to any principles of conflicts of law.

(c)Other Laws. The Committee may refuse to issue or transfer any shares of Common Stock or other consideration under an Award if, acting in its sole discretion, it determines that the issuance of transfer or such shares or such other consideration might violate any applicable law.

(d)Administration. The Plan shall be administered by the Committees. The Committees shall interpret the Plan and any Awards granted pursuant to the Plan and shall prescribe such rules and regulations in connection with the operation of the Plan as it determines to be advisable for the administration of the Plan. The Committees may rescind and amend its rules and regulations from time to time. The interpretation by the Committees of any of the provisions of the Plan or any Award granted under the Plan shall be final, binding and conclusive upon the Company and all persons having an interest in any Award or any shares of Common Stock acquired pursuant to an Award. Notwithstanding the authority hereby delegated to the Committees to grant Awards to Employees, Directors and Consultants under the Plan, the Board shall have full authority, subject to the express provisions of the Plan and the requirements of Section 162(m) of the Code for Awards intended to constitute Performance-Based Compensation, to grant Awards to Employees, Directors and Consultants under the Plan, to interpret the Plan, to provide, modify and rescind rules and regulations relating to the Plan, to determine the terms and provision of Awards granted to Employees, Consultants and Directors under the Plan and to make all other determinations and perform such actions as the Board deems necessary or advisable to administer the Plan. No member of the Committees or the Board shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award granted hereunder.

(e)Effect of Plan. Neither the adoption of the Plan nor any action of the Board or the Committees shall be deemed to give any Employee, Executive Officer, Director or Consultant any right to be granted an Award or any other rights except as may be

evidenced by the Award, or any amendment thereto, duly authorized by the Committees and executed on behalf of the Company, and then only to the extent and on the terms and conditions expressly set forth therein. The existence of the Plan and the Awards granted hereunder shall not affect in any way the right of the Board, the Committee or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation or other transaction involving the Company, any issue of bonds, debentures, or shares of preferred stock ahead of or affecting the Common Stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of the Company’s assets or business, or any other corporate act or proceeding by or for the Company. Nothing contained in the Plan or in any Award, or in other related documents shall confer upon any Employee, Executive Officer, Director or Consultant any right with respect to such person’s Continuous Service or interfere or affect in any way with the right of the Company or an Affiliate to terminate such person’s Continuous Service at any time, with or without cause.

(f)No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement or other benefit plan of the Company or an Affiliate, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or an Affiliate, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation. The Plan is not a “Retirement Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended.

(g)Amendment or Termination of Plan. The Board in its discretion may, at any time or from time to time after the date of adoption of the Plan, terminate or amend the Plan in any respect, including amendment of any form of Award, exercise agreement or instrument to be executed pursuant to the Plan;provided, however, to the extent necessary to comply with the Code, including Sections 162(m) and 422 of the Code, other applicable laws, or the applicable requirements of any stock exchange or national market system, the Company shall obtain stockholder approval of any Plan amendment in such manner and to such a degree as required. No Award may be granted after termination of the Plan. Any amendment or termination of the Plan shall not affect Awards previously granted, and such Awards shall remain in full force and effect as if the Plan had not been amended or terminated, unless mutually agreed otherwise in a writing (including an amendment to the terms of an Award) signed by the Participant and the Company. Notwithstanding the preceding sentence, the Board unilaterally may amend the Plan to the extent necessary or appropriate to prevent the Plan or an Award from being subject to the provisions of Section 409A of the Code;provided that any such amendment is permitted by Section 409A of the Code, Treasury regulations issued thereunder or other guidance issued by the Internal Revenue Service.

(h)Term of Plan. Unless sooner terminated by action of the Board, the Plan shall terminate on the earlier of (i) the tenth (10th) anniversary of the Effective Date or (ii) the date on which no shares of Common Stock subject to the Plan remain available to be granted as Awards under the Plan according to its provisions.

(i)Severability and Reformation. The Company intends all provisions of the Plan to be enforced to the fullest extent permitted by law. Accordingly, should a court of competent jurisdiction determine that the scope of any provision of the Plan is too broad to be enforced as written, the court should reform the provision to such narrower scope as it determines to be enforceable. If, however, any provision of the Plan is held to be wholly illegal, invalid, or unenforceable under present or future law, such provision shall be fully severable and severed, and the Plan shall be construed and enforced as if such illegal, invalid, or unenforceable provision were never a part hereof, and the remaining provisions of the Plan shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance.

(j)Interpretive Matters. Whenever required by the context, pronouns and any variation thereof shall be deemed to refer to the masculine, feminine, or neuter, and the singular shall include the plural, and visa versa. The term “include” or “including” does not denote or imply any limitation. The captions and headings used in the Plan are inserted for convenience and shall not be deemed a part of the Plan for construction or interpretation.

Appendix B

Cumulative Distributable Cash Flow Per Share for 2018 LTI Awards

Performance Period: January 1, 2018 through December 31, 20192020

Definition of Cumulative Distributable Cash Flow Per Share

Cheniere Energy, Inc. (the “Company”) defines Cumulative Distributable Cash Flow Per Share as the sum of Distributable Cash Flow Per Share for the eight consecutive quarters ended 12/31/2019.

Definition of Distributable Cash Flow Per Share

The Company defines Distributable Cash Flow Per Share as Distributable Cash Flow for any given quarter divided by weighted average shares outstanding for that quarter (share count assumption subject to adjustment for variances related to share based compensation).

Definition of Distributable Cash Flow

The Company defines Distributable Cash Flow as net income (loss) (prior to noncontrolling interest), adjusted for certainnon-cash items, restructuring and severance payments, litigation settlement payments, subsequent board approved projects thatre-invest otherwise distributable cash flow, cash settled share based compensation (LTIP III), annual bonus payments above or below assumed targets, changes in subsidiary distribution policies, less maintenance capital expenditures.Non-cash items include, but are not limited to, depreciation, depletion and amortization,non-cash compensation expense,paid-in-kind interest expense, gains and losses on disposals of assets, unrealized gains and losses on commodity, FX and interest rate risk management activities,non-cash restructuring expense,non-cash impairment charges, losses/gains on early extinguishment of debt and associated termination of interest rate hedges, change in income tax valuation allowance and deferred income taxes. Unrealized gains and losses on commodity risk management activities include unrealized gains and losses on commodity derivatives and inventory fair value adjustments (excluding lower of cost or market adjustments). For unconsolidated affiliates, Distributable Cash Flow reflects the Company’s proportionate share of the investee’s distributable cash flow.

On a consolidated basis, Distributable Cash Flow includes 100% of the Distributable Cash Flow of the Company’s consolidated subsidiaries. However, to the extent that noncontrolling interests exist among the Company’s subsidiaries, the Distributable Cash Flow is calculated by adjusting Distributable Cash Flow (consolidated), as follows:

 

For subsidiaries with publicly traded equity interests, Distributable Cash Flow (consolidated) includes 100% of Distributable Cash Flow attributable to such subsidiary, and Distributable Cash Flow attributable to Cheniere Energy, Inc.the Company includes distributions (including Management Fees and Tax Sharing Payments) to be received by the parent company.

 

For consolidated joint ventures or similar entities, where the noncontrolling interest is not publicly traded, Distributable Cash Flow (consolidated) includes 100% of Distributable Cash Flow attributable to such subsidiary, but Distributable Cash Flow attributable to Cheniere Energy, Inc.the Company (including Management Fees and Tax Sharing Payments) is net of distributions to be paid by the subsidiary to the noncontrolling interests.

For Distributable Cash Flow attributable to Cheniere Energy, Inc.,the Company, as adjusted, certain transaction-related andnon-recurring expenses that are included in net income may be excluded as determined by the Compensation Committee.

Definition of Distributable Cash Flow Per Share

The Company defines Distributable Cash Flow Per Share as Distributable Cash Flow for any given quarter divided by weighted average shares outstanding for that quarter (share count assumption subject to adjustment for variances related to share based compensation).

Definition of Cumulative Distributable Cash Flow Per Share

The Company defines Cumulative Distributable Cash Flow Per Share as the sum of Distributable Cash Flow Per Share for the twelve consecutive quarters ended December 31, 2020.

LOGO

 CHENIERE ENERGY, INC.
 2019 PROXY STATEMENTA-1


APPENDIX B

Definition of Cumulative Distributable Cash Flow Per Share and Total Shareholder Return for

2019 LTI Awards

Performance Period: January 1, 2019 through December 31, 2021

Definition of Distributable Cash Flow

Cheniere Energy, Inc. (the “Company”) defines Distributable Cash Flow as net income (loss) (prior to noncontrolling interest), adjusted for certainnon-cash items, restructuring and severance payments, litigation settlement payments, subsequent board approved projects thatre-invest otherwise distributable cash flow, subsequent board approved capital allocation initiatives related to debt pay down or share buybacks that affect distributable cash flow per share, cash settled share based compensation above or below assumed forecasts, cash settled taxes related to share based compensation above or below assumed forecasts, annual bonus payments above or below assumed targets, changes in subsidiary distribution policies, less maintenance capital expenditures.Non-cash items include, but are not limited to, depreciation, depletion and amortization,non-cash compensation expense,paid-in-kind interest expense, gains and losses on disposals of assets, unrealized gains and losses on commodity, FX and interest rate risk management activities,non-cash restructuring expense,non-cash impairment charges, losses/gains on early extinguishment of debt and associated termination of interest rate hedges, change in income tax valuation allowance and deferred income taxes. Unrealized gains and losses on commodity risk management activities include unrealized gains and losses on commodity derivatives and inventory fair value adjustments (excluding lower of cost or market adjustments). For unconsolidated affiliates, Distributable Cash Flow reflects the Company’s proportionate share of the investee’s distributable cash flow.

On a consolidated basis, Distributable Cash Flow includes 100% of the Distributable Cash Flow of the Company’s consolidated subsidiaries. However, to the extent that noncontrolling interests exist among the Company’s subsidiaries, the Distributable Cash Flow is calculated by adjusting Distributable Cash Flow (consolidated), as follows:

For subsidiaries with publicly traded equity interests, Distributable Cash Flow (consolidated) includes 100% of Distributable Cash Flow attributable to such subsidiary, and Distributable Cash Flow attributable to the Company includes distributions (including Management Fees and Tax Sharing Payments) to be received by the parent company.

For consolidated joint ventures or similar entities, where the noncontrolling interest is not publicly traded, Distributable Cash Flow (consolidated) includes 100% of Distributable Cash Flow attributable to such subsidiary, but Distributable Cash Flow attributable to the Company (including Management Fees and Tax Sharing Payments) is net of distributions to be paid by the subsidiary to the noncontrolling interests.

For Distributable Cash Flow attributable to the Company, as adjusted, certain transaction-related andnon-recurring expenses that are included in net income may be excluded as determined by the Compensation Committee.

Definition of Distributable Cash Flow Per Share

The Company defines Distributable Cash Flow Per Share as Distributable Cash Flow for any given quarter divided by weighted average shares outstanding for that quarter (share count assumption subject to adjustment for variances related to share based compensation).

Definition of Cumulative Distributable Cash Flow Per Share

The Company defines Cumulative Distributable Cash Flow Per Share as the sum of Distributable Cash Flow Per Share for the twelve consecutive quarters ended December 31, 2021.

Definition of Absolute Total Shareholder Return (ATSR)

The Company defines ATSR as the annualized rate of return that Cheniere Energy, Inc. shareholders receive through changes in share price and assumed reinvestment of dividends paid over the performance period. Dividends per share paid other than in the form of cash shall have a value equal to the amount of such dividends reported by Cheniere Energy, Inc. to its shareholders for purposes of Federal income taxation. For purposes of determining the ATSR, the change in the price of a share will be based upon (x) the average of the closing share prices on each of the 45 trading days preceding the start of the performance period and (y) the average of the closing share prices on each of the 45 trading days preceding the end of the performance period.

2019 PROXY STATEMENTB-1


APPENDIX C

Definition and Reconciliation ofNon-GAAP Measure

Consolidated Adjusted EBITDA represents net income (loss) attributable to Cheniere before net income attributable to thenon-controlling interest, interest, taxes, depreciation and amortization, adjusted for certainnon-cash items, othernon-operating income or expense items, and other items not otherwise predictive or indicative of ongoing operating performance, as detailed in the following reconciliation. Consolidated Adjusted EBITDA is not intended to represent cash flows from operations or net income (loss) as defined by U.S. GAAP and is not necessarily comparable to similarly titled measures reported by other companies. We use Consolidated Adjusted EBITDA as a quantitative performance goal in our annual incentive program.

Consolidated Adjusted EBITDA is calculated by taking net income attributable to common stockholders before net income (loss) attributable tonon-controlling interest, interest expense, net of capitalized interest, changes in the fair value and settlement of our interest rate derivatives, taxes, depreciation and amortization, and adjusting for the effects of certainnon-cash items, othernon-operating income or expense items, and other items not otherwise predictive or indicative of ongoing operating performance, including the effects of modification or extinguishment of debt, impairment expense and loss on disposal of assets, changes in the fair value of our commodity and foreign currency exchange (“FX”) derivatives andnon-cash compensation expense. We believe the exclusion of these items enables investors and other users of our financial information to assess our sequential and year-over-year performance and operating trends on a more comparable basis and is consistent with management’s own evaluation of performance.

Non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or in lieu of an analysis of our results as reported under GAAP, and should be evaluated only on a supplementary basis.

The following table reconciles our Consolidated Adjusted EBITDA to U.S. GAAP results for the twelve months ended December 31, 2018 (in millions):

   YEAR ENDED
DECEMBER 31, 2018
 

Net income attributable to common stockholders

  $471 

Net income attributable tonon-controlling interest

   729 

Income tax provision

   27 

Interest expense, net of capitalized interest

   875 

Loss on modification or extinguishment of debt

   27 

Derivative gain, net

   (57

Other income

   (48
  

 

 

 

Income from operations

  $2,024 
  

 

 

 

Adjustments to reconcile income from operations to Consolidated Adjusted EBITDA:

  

Depreciation and amortization expense

   449 

Gain from changes in fair value of commodity and FX derivatives, net

   77 

Totalnon-cash compensation expense

   76 

Impairment expense and loss on disposal of assets

   8 

Legal Settlement Expense

   7 
  

 

 

 

Consolidated Adjusted EBITDA

  $2,641 
  

 

 

 

2019 PROXY STATEMENTC-1


LOGO

CHENIERE ENERGY, INC. 700 MILAM STREET SUITE 1900 HOUSTON, TX 77002 VOTE BY INTERNET—www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically viae-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BYPHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees 1A G. Andrea Botta 1B Jack A. Fusco 1C Vicky A. Bailey 1D Nuno Brandolini 1E David I. Foley 1F David B. Kilpatrick 1G Andrew Langham 1H Courtney R. Mather For address change/comments, mark here. (see reverse for instructions) For Against Abstain 1I Donald F. Robillard, Jr 1J Neal A. Shear The Board of Directors recommends you vote FOR proposals 2. and 3.: 2. Approve, on an advisory andnon-binding basis, the compensation of the Company’s named executive officers for 2018. 3. Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2019. For Against Abstain For Against Abstain Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 0000417136_1 R1.0.1.18


LOGO

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, Annual Report is/ are available at www.proxyvote.com CHENIERE ENERGY, INC. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE

ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON MAY 18, 2017

16, 2019 The undersigned hereby appoints Michael J. Wortley and Sean N. Markowitz, and each of them, any one of whom may act without joinder of the other, with full power of substitution and ratification, attorneys and proxies of the undersigned to vote all shares of Cheniere Energy, Inc. which the undersigned is entitled to vote at the 20172019 Annual Meeting of Shareholders to be held at the Company’s headquarters at 700 Milam Street, Suite 1900, Houston, Texas 77002 on Thursday, May 18, 201716, 2019 at 9:00 a.m. Central Time, and at any adjournment or postponement thereof.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting.The Cheniere Energy, Inc. 2017 Proxy Statement, including the Notice of Annual Meeting and 2016 Annual Report on Form10-K, is available on the following website:

http://www.cheniere.com/2017AnnualMeeting.

THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE HEREON. IF NO CONTRARY SPECIFICATION IS MADE, THEN THIS PROXY (IF SIGNED) WILL BE VOTED “FOR” THE ELECTION OF THE ELEVENTEN DIRECTOR NOMINEES NAMED IN PROPOSAL 1 AND “FOR” PROPOSALS 2 4 AND 5, AND “1 YEAR” ON PROPOSAL 3. WHETHER OR NOT SPECIFICATIONS ARE MADE, EACH OF THE PROXIES AREIS AUTHORIZED TO VOTE IN HIS OR HER DISCRETION ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF.

PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED,PRE-ADDRESSED STAMPED ENVELOPE.

(continued Address change/comments: (If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.) Continued and to be signed on reverse side)side 0000417136_2 R1.0.1.18


LOGO

CHENIERE ENERGY, INC.

700 MILAM STREET

SUITE 1900

HOUSTON, TX 77002

VOTE BY INTERNET -www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically viae-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS

DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

CHENIERE ENERGY, INC.

The Board of Directors recommends you vote FOR the

following:

    1.     Election of Directors

For

Against

Abstain

                Nominees:

1a.G. Andrea Botta  ☐ForAgainstAbstain

1b.

Jack A. Fusco

  ☐

1j.

Neal A. Shear

1c.

Vicky A. Bailey

  ☐

1k.

Heather R. Zichal

1d.

Nuno Brandolini

  ☐

The Board of Directors recommends you vote FOR proposals 2, 4 and 5, and for “1 YEAR” on proposal 3:

1e.

Jonathan Christodoro

  ☐

2.

Approve, on an advisory andnon-binding basis, the compensation of the Company’s named executive officers for 2016.

1f.

David I. Foley

  ☐

1g.

David B. Kilpatrick

  ☐

1 Year

2 Years

3 Years

Abstain

1h.

Samuel Merksamer

  ☐

3.

Approve, on an advisory andnon-binding basis, the frequency of holding future advisory votes on the compensation of the Company’s named executive officers.

1i.

Donald F. Robillard, Jr.

  ☐

For

Against

Abstain

For address changes and/or comments, please check this box and write them on the back where indicated.

4.

Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2017.

5.

Approve the amendment and restatement of the Cheniere Energy, Inc. 2011 Incentive Plan.

NOTE:Such other business as may properly come before the meeting or any adjournment thereof.

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

Signature [PLEASE SIGN WITHIN BOX]            Date    Signature (Joint Owners)                         Date