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Cheniere Energy, Inc. Annual Report (Amendment), Year Ended Dec 31, 1999

Filing Date
Filed April 28, 2000
Period End
December 31, 1999
Security
LNG
In the record · 2016–202610-K1310-Q328-K232

LNG filed 13 annual reports (10-K), 32 quarterly reports (10-Q) and 232 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Aug ’17Aug ’17
  2. Leadership change8-K · Aug ’19Aug ’19
  3. Material agreement8-K · Aug ’21Aug ’21
  4. Material agreement8-K · Jul ’25Jul ’25

01—Abstract

Summary

Summary of the 10-K/A filed April 28, 2000. Cited figures are marked; the original filing is the authoritative source.

This filing contains only Part III (Items 10 through 13) of Cheniere Energy's annual report for fiscal 1999, which the document itself refers to as a Form 10-K/A.

It covers governance, executive pay, share ownership, and related-party dealings. It does not include financial statements, so it says nothing about revenue, earnings, or the company's LNG or energy business plans. The board is led by Chairman Charif Souki, with Michael L.

Harvey as President and CEO since June 1999. William D. Forster is not standing for reelection, and the company had not yet named any additional nominees.

Compensation was modest in cash terms but heavily weighted toward equity. Base salaries ranged from roughly $96,000 to $120,000a for the named executives, and directors received no cash fees. Large option and warrant grants dominated the package, including 1,000,000 warrants to Harvey and 1,000,000 options to Harvey and 600,000 to Krenzke.

At December 31, 1999 the stock closed at $0.72b, below every exercise price, so the year-end value of unexercised options was nil. Ownership is concentrated: Arabella SA (10.1%), BSR Investments (9.5%), Azure Energy Fund (7.0%), and Forster (6.6%) together hold a large share of the company, and directors and officers as a group hold 11.2%. The filing also discloses ongoing related-party ties involving Souki's family.

BSR Investments, controlled by Souki's mother, converted $2 millionc of bridge notes into equity and later exchanged its remaining notes for units. An affiliate in which Souki's brother is a principal received $562,372 in placement fees in 1999.

The board states these transactions were on terms at least as favorable to the company as arm's-length deals. Investors should weigh these ties and the low share price when assessing governance.

02—Key points

Key Highlights

  1. Leadership transition: Michael L. Harvey became President and CEO in June 1999, and Charif Souki is Chairman. Walter L. Williams moved from CEO to Vice Chairman, and William D. Forster is not standing for reelection.
  2. Pay structure: Base salaries were modest (about $96,000 to $120,000 for named executives), with no cash director fees. Equity grants were large, including Harvey's 1,035,000 options and warrants and Krenzke's 600,000 options.
  3. Underwater equity: The stock closed at $0.72 on December 31, 1999, below all listed exercise prices of $1.50 to $3.00, so the year-end intrinsic value of unexercised options was nil.
  4. Concentrated ownership: Arabella SA (10.1%), BSR Investments (9.5%), Azure Energy Fund (7.0%), and Forster (6.6%) are the principal holders. Directors and officers as a group own 11.2%, including about 1.2 million warrant shares.
  5. Related-party exposure: BSR Investments, controlled by Chairman Souki's mother, converted $2 million of notes into equity and later exchanged its remaining notes for units. Placement fees of $562,372 went to an affiliate of Souki's brother.
  6. Governance compliance: Late Section 16(a) filings were made for Arabella SA (Form 3) and BSR Investments (Form 4). Directors have broad indemnification and liability protection under Delaware law.
  7. Scope limitation: This is Part III only. It contains no financial statements, so it does not show the company's financial condition, results, or strategy.

03—Questions

Frequently Asked Questions

  1. Who runs Cheniere Energy and who sits on the board?

    Charif Souki is Chairman and Michael L. Harvey is President, CEO, and a director. Other directors are Walter L. Williams (Vice Chairman), Kenneth R. Peak, and Charles M. Reimer. William D. Forster is not standing for reelection. Efrem Zimbalist III resigned in September 1999.

  2. How are directors and executives paid?

    Directors received no cash compensation in 1999 and were paid through occasional option or warrant grants. Named executives had salaries of roughly $96,000 to $120,000 in 1999, with Harvey's and Krenzke's partial-year salaries annualized at $175,000 and $165,000. Most of their compensation came from large equity grants.

  3. Who are the major shareholders and how much control do insiders have?

    Arabella SA (10.1%), BSR Investments (9.5%, linked to Chairman Souki's family), Azure Energy Fund (7.0%), and Forster (6.6%) are the largest holders. Directors and officers together hold 11.2%, and that figure includes warrants and options exercisable within 60 days. Souki disclaims beneficial ownership of the BSR shares.

  4. Are there conflicts of interest that investors should know about?

    Yes. BSR Investments, controlled by Souki's mother, bought and converted notes into equity and warrants. Souki has consulted for BSR. An affiliate of Souki's brother received $562,372 in placement fees in 1999 and warrants for 645,000 shares. The board says these deals were fair to the company, but the ties are material to governance.

04—Continue

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