8-KLeadership ChangesMaterial AgreementsExhibits & Filings

Cheniere Energy, Inc. 8-K Report, Material Agreement (Aug 24, 2015)

Filed August 24, 2015For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) announced a significant development in its corporate governance through a Nomination and Standstill Agreement with the Icahn Group. This agreement, dated August 21, 2015, resolves potential activist investor pressure by appointing two designees from the Icahn Group, Jonathan Christodoro and Samuel Merksamer, to Cheniere's Board of Directors. The company expanded its board from nine to eleven members to accommodate these appointments. In exchange for the board seats and their inclusion in future board nominations, the Icahn Group has agreed to a standstill period, during which they will refrain from various activist actions such as soliciting proxies, making shareholder proposals, nominating their own directors, or initiating certain extraordinary transactions. This agreement aims to create a period of stability and strategic alignment between Cheniere's management and a major shareholder.

Key Highlights

  • 1Cheniere Energy entered into a Nomination and Standstill Agreement with the Icahn Group on August 21, 2015.
  • 2The agreement resulted in the appointment of two Icahn designees, Jonathan Christodoro and Samuel Merksamer, to Cheniere's Board of Directors.
  • 3Cheniere's Board of Directors was expanded from nine to eleven members to accommodate the new directors.
  • 4The Icahn Group has agreed to a standstill period, limiting their ability to engage in activist shareholder activities.
  • 5The Icahn Group has agreed to vote its shares in favor of the Board's director nominees and auditor ratification at the 2016 annual meeting and future meetings.
  • 6The agreement includes provisions for the resignation of Icahn designees if the Icahn Group's net long position in Cheniere's stock falls below certain thresholds.
  • 7Confidentiality agreements were also executed between Cheniere and the Icahn Group.

Frequently Asked Questions

The primary outcome is the appointment of two directors nominated by the Icahn Group to Cheniere Energy's Board of Directors. In return, the Icahn Group has agreed to a period of standstill, which restricts them from certain activist actions.

Cheniere's Board of Directors was expanded from nine to eleven members. The two new members are Jonathan Christodoro and Samuel Merksamer, representing the Icahn Group. Mr. Christodoro was appointed to the Governance and Nominating Committee, and Mr. Merksamer was appointed to the Compensation Committee and the Audit Committee.

The Icahn Group has agreed to a standstill during which they will not solicit proxies, make shareholder proposals, nominate directors independently, or seek to remove board members, among other restrictions. They have also agreed to vote their shares in favor of the company's nominated directors and auditor ratification at the 2016 annual meeting and subsequent meetings.

The agreement includes provisions tied to the Icahn Group's 'net long position'. If their holdings fall below certain shareholding thresholds (11,612,118 shares or 7,741,412 shares), they will be required to cause one or both of their designees to resign from the Board, respectively.