Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Amended and Restated Key Executive Severance Pay Plan
On February 17, 2017, the Compensation Committee (the Compensation Committee) of the Board of Directors (the
Board) of Cheniere Energy, Inc. (the Company) recommended and the Board approved the Amended and Restated Cheniere Energy, Inc. Key Executive Severance Pay Plan (the Amended Severance Plan). The Amended Severance
Plan amended and restated the Cheniere Energy, Inc. Key Executive Severance Pay Plan (the Original Severance Plan). The terms of the Original Severance Plan were previously disclosed in the Companys Current Report on Form
8-K,
filed with the Securities and Exchange Commission on December 14, 2016 (the Prior
8-K)
and, except as described below, are consistent with the terms in
the Amended Severance Plan. The description of the Original Severance Plan set forth in Item 5.02 of the Prior
8-K
is hereby incorporated by reference herein.
The Amended Severance Plan amends the Original Severance Plan to provide that in the event that an executive officers employment is
terminated by the officer for good reason or by us without cause, and not in connection with a change in control, all of the executive officers outstanding unvested time-based Incentive Awards (as defined in the Amended Severance Plan) granted
more than six months prior to termination would vest. The Original Severance Plan had provided for vesting of outstanding unvested time-based Incentive Awards that were granted more than three months prior to termination and that otherwise would
have vested within one year following such termination.
The description of the Amended Severance Plan in this Current Report on Form
8-K
is not complete and is qualified in its entirety by reference to the full text of the Amended Severance Plan, which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
Annual LTIP Compensation Actions
On February 17, 2017, the Compensation Committee recommended and the Board approved long-term incentive awards as part of the
Companys 2017 Long Term Incentive Program under the Cheniere Energy, Inc. 2011 Incentive Plan, as amended, for each of the executive officers of the Company. The 2017 long-term incentive award includes restricted stock units (RSUs)
granted pursuant to a Restricted Stock Unit Award Agreement (the RSU Agreement) and performance stock units (PSUs) granted pursuant to a Performance Stock Unit Award Agreement (the PSU Agreement). The following
table sets forth the 2017 long-term incentive award for the Companys President and Chief Executive Officer and Executive Vice President and Chief Financial Officer.
2017 Long-Term Incentive Awards
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Executive Officer
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RSU Shares
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Target PSU
Shares
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Jack A. Fusco
President and Chief Executive Officer
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69,646
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69,646
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Michael Wortley
Executive Vice President and Chief Financial Officer
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16,715
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16,715
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Terms of the RSU and PSU Awards
The RSU awards will vest in equal installments on each of February 17, 2018, February 17, 2019 and February 17, 2020. 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 Companys cumulative
distributable cash flow per share from January 1, 2018 through December 31, 2019 compared to a
pre-established
performance target. The PSU awards will vest upon certification by the Compensation
Committee of the level of achievement of the performance condition during the performance period.
Vesting is generally subject to
continued employment, with exceptions in some cases, including for a change in control or termination due to death, 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 Agreement and RSU Agreement, the RSU and PSU awards will be treated in accordance with the Amended Severance Plan. Upon a termination due to death or disability, all
of the RSUs and the target number of PSUs shall vest in full immediately. Upon retirement, the RSU and PSU awards will be treated in accordance with the Cheniere Energy, Inc. Retirement Policy. Each vested RSU and PSU will be settled in one share of
the Companys common stock, $0.003 par value per share.
Milestone Award
In addition, on February 17, 2017, the Compensation Committee recommended and the Board approved a milestone award letter for each of
Messrs. Fusco and Wortley communicating an award of 156,250 RSUs and 70,000 RSUs, respectively, 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 a third train at the natural gas liquefaction and export facility at the Corpus Christi LNG terminal being developed by the Company (the Milestone Award). If granted, the Milestone Award will vest and be payable on
February 1, 2020, subject to the award recipients continued employment and the terms of the applicable award agreement entered into at the time that the Milestone Award is granted.