8-KMaterial AgreementsExhibits & Filings

Cheniere Energy, Inc. 8-K Report, Material Agreement (Jul 31, 2006)

Filed July 31, 2006For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) filed an 8-K report on July 31, 2006, detailing a material definitive agreement concerning the compensation of its non-employee directors. The Compensation Committee of the Board of Directors approved a compensation package for the period between the 2006 and 2007 annual shareholder meetings. This compensation includes a base payment of $100,000 to each non-employee director, with an additional $20,000 for the chairs of the Audit and Compensation Committees. Directors have the flexibility to receive this compensation entirely in cash, entirely in restricted stock, or a 50/50 split. Cash payments are to be made quarterly, starting July 31, 2006, while restricted stock awards will be issued in December 2006, with their value determined by a 25% discount to the market price on the date of grant. The restricted stock will vest over three years.

Key Highlights

  • 1Cheniere Energy's Compensation Committee approved a new compensation structure for non-employee directors.
  • 2Each non-employee director will receive $100,000 for services rendered between the 2006 and 2007 annual shareholder meetings.
  • 3Committee chairs (Audit and Compensation) will receive an additional $20,000.
  • 4Directors have the option to receive compensation in cash, restricted stock, or a combination of both.
  • 5Cash payments will be disbursed quarterly, with the first payment on July 31, 2006.
  • 6Restricted stock will be issued in December 2006, with the grant price determined by a 25% discount to the closing stock price on the date of grant.
  • 7The restricted stock awarded will vest in one-third increments annually over three years.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose a material definitive agreement regarding the compensation of Cheniere Energy's non-employee directors.

Each non-employee director will receive $100,000 for their services between the 2006 and 2007 annual shareholder meetings. Additionally, the chairpersons of the Audit Committee and the Compensation Committee will receive an extra $20,000.

Non-employee directors have the flexibility to choose between receiving 100% of their compensation in cash, 100% in restricted stock, or a 50% cash and 50% restricted stock split. This provides flexibility for directors in managing their compensation.

The restricted stock will be issued in December 2006. The number of shares will be calculated based on a 25% discount to the closing price of Cheniere's common stock on the American Stock Exchange on the date of the grant (either the December Board meeting date or the last business day of the calendar year).