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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 3, 2006
CHENIERE ENERGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-16383 95-4352386
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
717 Texas Avenue
Suite 3100
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 659-1361
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On January 3, 2006, the Section 162(m) Subcommittee (the "Subcommittee") of
the Compensation Committee (the "Committee") of the Board of Directors of
Cheniere Energy, Inc. (the "Company") established the 2006 performance goals,
performance period and the maximum pay-outs for the Company's executive officers
upon achievement of the 2006 performance goals. The Company must achieve either
a minimum increase in the Company's net asset value per share or total
stockholder return from January 1, 2006 through December 31, 2006 (the "2006
Performance Period") in order for the Company's executive officers to receive a
bonus. The amount of the aggregate payment under the performance bonus plan
could range from zero to the maximum percentage of 300% of base salary for the
Chief Executive Officer, 250% for the Chief Operating Officer and President and
200% for the Vice Chairman and any Senior Vice President, depending upon the
extent to which the performance goals are met or exceeded. Payments of bonus
amounts may be made, at the Subcommittee's discretion, in cash, stock or a
combination of both.
On March 29, 2006, the Subcommittee changed the maximum bonus target from a
percentage of base salary, as approved at the January 3, 2006 meeting, to a
maximum number of shares of phantom stock. A share of phantom stock is the right
to receive a share of Company common stock or cash in an amount equal to a share
of Company common stock at the end of the 2006 performance period subject to
achievement of the 2006 performance goals. The table below sets forth the
maximum number of shares of phantom stock with respect to which each executive
officer has the right to receive Company common stock or cash at the end of the
2006 Performance Period. Except for Mr. Horton who became President and Chief
Operating Officer of the Company in April 2005, the maximum number of shares of
phantom sock that was approved in March for each covered employee is the same as
the maximum number approved for the 2005 bonus after taking into account the
stock split that occurred in 2005. A summary of the 2006 performance bonus plan
is attached hereto as Exhibit 10.1 and incorporated herein by reference. All
payments, if any, with respect to the phantom stock shall be made on or before
March 15, 2007.
2006 Performance Awards
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Maximum Number of Shares of
Covered Employee Phantom Stock (1)
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Charif Souki, Chairman and Chief
Executive Officer 100,000
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Walter L. Williams, Vice Chairman 30,000
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Stanley C. Horton, President and Chief
Executive Officer 75,000
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Jonathan Gross, Senior Vice President-
Exploration 30,000
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Zurab S. Kobiashvili, Senior Vice President
and General Counsel 30,000
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Keith M. Meyer, Senior Vice President-LNG 30,000
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Don A. Turkleson, Senior Vice President, Chief
Financial Officer and Secretary 30,000
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(1) Notwithstanding the number of shares listed herein, the maximum number
of shares of phantom stock awarded to any covered employee shall not exceed the
maximum award permitted under the Company's Amended and Restated 2003 Stock
Incentive Plan, taking into account any other awards granted to such covered
employee during the calendar year.
On March 29, 2006 (the "Grant Date"), Ms. Vicky A. Bailey was elected as a
director of the Company and was granted 25,000 fully vested stock options with a
term of ten years. The exercise price of the stock options is the closing price
of the Company's common stock as reported on the American Stock Exchange on the
Grant Date or $40.27. In addition, Ms. Bailey received compensation for the term
of service from March 29, 2006 through May 2006 of $25,000. A summary of the
compensation awarded to Ms. Bailey is attached hereto as Exhibit 10.2, which is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
c) Exhibits
Exhibit
Number Description
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10.1 Summary of 2006 Performance Bonus Plan (filed herewith)
10.2 Summary of Compensation to Non-Employee Director (filed herewith)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHENIERE ENERGY, INC.
Date: April 3, 2006 By: /s/ Don A. Turkleson
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Name: Don A. Turkleson
Title: Senior Vice President,
Chief Financial Officer
and Secretary
EXHIBIT INDEX
Exhibit
Number Description
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10.1 Summary of 2006 Performance Bonus Plan (filed herewith)
10.2 Summary of Compensation to Non-Employee Directors (filed herewith)