UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Form 10-K/A2
(Amendment No. 2)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE YEAR ENDED DECEMBER 31, 2001
Commission File No. 0-9092
CHENIERE ENERGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-4352386
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Three Allen Center
333 Clay Street, Suite 3400 77002-4102
Houston, Texas 77002-4102 (Zip code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (713) 659-1361
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $ 0.003 PAR VALUE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the registrant's common stock held by
non-affiliates of the registrant was approximately $14,244,127 as of March 29,
2002 (based upon the March 29, 2002 closing market price of such common stock as
reported on The American Stock Exchange). 13,297,393 shares of the registrant's
Common Stock were outstanding as of March 29, 2002.
DOCUMENTS INCORPORATED BY REFERENCE
None
The registrant hereby amends the following items of its Annual Report on
Form 10-K for the year ended December 31, 2001, as set forth on the pages
attached hereto:
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13. Certain Relationships and Related Transactions
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors of Cheniere
The following sets forth certain information concerning each of the
directors of Cheniere.
Director Nominee Director Since Age Position
---------------- -------------- --- ---------
Nuno Brandolini 2000 48 Director
Keith F. Carney 2001 45 Director
Paul J. Hoenmans 2001 69 Director
John K. Howie 2000 43 Director
Charles M. Reimer 1998 57 Director
Charif Souki 1996 49 Director and Chairman of
the Board of Directors
Walter L. Williams 1996 74 Director and Vice Chairman
of the Board of Directors
Nuno Brandolini is currently a director and a member of the Audit
Committee. Mr. Brandolini has served as Chairman and Chief Executive Officer of
Scorpion Holdings, Inc., a merchant bank, since 1995. Prior to forming Scorpion
Holdings, Mr. Brandolini served as Managing Director of Rosecliff, Inc., a
leveraged buyout fund co-founded by Mr. Brandolini in 1993. Before joining
Rosecliff, Mr. Brandolini was a Vice President at Salomon Brothers, Inc. where
he was an investment banker involved in mergers and acquisitions in the
Financial Entrepreneurial Group. Mr. Brandolini has also worked for Lazard
Freres in New York and was President of The Baltheus Group, a merchant banking
firm, and Executive Vice President of Logic Capital Corp., a venture capital
firm. He currently serves on the Board of private and public companies such as
Arabella, Pac Pizza LLC, Sonex Research, The Original San Francisco Toymakers
and WalkAbout Computers. Mr. Brandolini was awarded a law degree by the
University of Paris, and received an M.B.A. from the Wharton School.
Keith F. Carney is currently a director and Chairman of the Audit Committee
and a member of the Compensation Committee. Mr. Carney served as Chief Financial
Officer and Treasurer of the Company from July 1996 through November 1997 and
Executive Vice President from 1997 through August 2001. Since October 2001, Mr.
Carney has been President of Dolomite Advisors, LLC, a manager of energy
investment funds. At that time he was elected a director to Cheniere. Prior to
joining Cheniere, Mr. Carney was a securities analyst in the oil and gas
exploration/production sector with Smith Barney, Inc. from 1992-1996. From
1982-1990 he was employed by Shell Oil as an exploration geologist, with
assignments in the Gulf of Mexico, the Middle East and other areas. He received
an M.S. in geology from Lehigh University in 1982 and an M.B.A.-Finance from the
University of Denver in 1992.
Paul J. Hoenmans is currently a director for Cheniere and a member of the
Compensation Committee. Mr. Hoenmans has over 22 years of senior executive level
experience in the industry and currently acts as director of various companies.
During that time he has served Mobil Oil Corporation, an integrated
international natural resource company, in various executive capacities, most
recently as Director and Executive Vice President, from 1996 through 1997, with
overall responsibility for policy, strategy, performance, and stakeholder
contact. From
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1986 through 1996 he served as the President of Mobil Oil Corporation's
Exploration & Producing Division, with worldwide responsibility for upstream
operations. Mr. Hoenmans has held various other positions of senior executive
level responsibility with Mobil since 1975, over both upstream and downstream
operations worldwide throughout the Americas, Africa, Southeast Asia, the Middle
East, Europe, and Scandinavia. Mr. Hoenmans is also currently serving as a
director of Xpronet, Inc., Veba Oel AG, and Talisman Energy, Inc.
John K. Howie is currently a director of the Company, Chairman of the
Compensation Committee and a member of the Audit Committee. Mr. Howie has served
as a Vice President of EnCap Investments, LLC, a manager of certain investment
funds, since July 1999. From January 1994 until July 1999 he was a Senior
Investment Associate at Range Resources Corporation (previously Domain Energy
Corporation), an oil and gas exploration and production company, and an
Acquisition Coordinator with Domain Energy Corporation (previously Tenneco
Ventures), an oil and gas exploration and production company. Prior to this he
was a Senior Petroleum Engineer with Apache Corporation, an oil and gas
exploration company. Mr. Howie received a Bachelor of Science in Chemical
Engineering from New Mexico State in December 1981.
Charles M. Reimer is currently President and Chief Executive Officer and a
director of Cheniere. Mr. Reimer has served as President and Chief Executive
Officer of Cheniere since October 2000. Through May 2000, he served in Houston
as President of British-Borneo USA, Inc., an oil and gas exploration company
with operations primarily in the Gulf of Mexico. Prior to joining British Borneo
in November 1998, Mr. Reimer served from 1994 through 1998 as Chairman and Chief
Executive Officer of Virginia Indonesia Company (VICO), the operator on behalf
of Union Texas Petroleum Holdings, Inc. and LASMO plc, of major gas and oil
reserves and production located in East Kalimantan, Indonesia. Mr. Reimer began
his career with Exxon Company USA in 1967 and held various professional and
management positions in Texas and Louisiana. After leaving Exxon, Mr. Reimer was
named President of Phoenix Resources Company in 1985 and relocated to Cairo,
Egypt to begin eight years of international assignments. He also serves on the
board of directors of Gryphon Exploration Company, a privately held affiliate of
Cheniere.
Charif Souki, a co-founder of Cheniere, is currently Chairman of the Board
of Directors of the Company. Mr. Souki has served as Chairman of the Board of
Directors since June 1999. From September 1997 until June 1999 he was
Co-Chairman of the Board of Directors, and he served as Secretary of the Company
from July 1996 until September 1997.Mr. Souki is an independent investment
banker with 20 years of experience in the industry. In the past few years he has
specialized in providing financing for promising microcap and small
capitalization companies with an emphasis on the oil and gas industry. Mr. Souki
received his B.A. from Colgate University and his M.B.A. from Columbia
University. He also serves on the board of directors of Gryphon Exploration
Company, a privately held affiliate of Cheniere.
Walter L. Williams is currently Vice Chairman and a director of the
Company. Prior to joining the Company, Mr. Williams spent 32 years as a founder
and later Chairman and Chief Executive Officer of Texoil, Inc., a publicly held
Gulf Coast exploration and production company. Prior to that time, he was an
independent petroleum consultant. Mr. Williams received a B.S. in petroleum
engineering from Texas A&M University and is a Registered Engineer in Louisiana
and Texas. He has served as a director and member of the Executive Committee of
the Board of the Houston Museum of Natural Science.
Executive Officers of Cheniere
The following table sets forth the names, ages and positions of each
executive officer of the Company, all of whom serve at the pleasure of the Board
of Directors and are subject to annual appointment by the Board:
Name Age Position
------ ---- ----------
Charif Souki 49 Chairman
Walter L. Williams 74 Vice Chairman
Charles M. Reimer 57 President and Chief Executive Officer
Don A. Turkleson 47 Vice President & Chief Financial Officer,
Secretary & Treasurer
Jonathan S. Gross 43 Vice President - Exploration
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Charif Souki has served as Chairman of the Board of Directors since June
1999. From September 1997 until June 1999 he was Co-Chairman of the Board of
Directors, and he served as Secretary of the Company from July 1996 until
September 1997. Mr. Souki served as a director of the Company throughout the
year ended December 31, 2001. Mr. Souki serves as a consultant to Cheniere. Mr.
Souki also served as a director of Gryphon throughout the year ended December
31, 2001. Further information regarding Mr. Souki is provided above under
"Directors of Cheniere."
Walter L. Williams has served as Vice Chairman of the Board of Directors
since June 1999. He served as President and Chief Executive Officer of the
Company from September 1997 until June 1999 and as Vice Chairman of the Board of
Directors from July 1996 until September 1997. Mr. Williams served as a director
of the Company throughout the year ended December 31, 2001. Further information
regarding Mr. Williams is provided above under "Directors of Cheniere."
Charles M. Reimer has served as President and Chief Executive Officer of
Cheniere since October 2000. Mr. Reimer served as a director of the Company
throughout the year ended December 31, 2001. Further information regarding Mr.
Reimer is provided above under "Directors of Cheniere."
Don A. Turkleson has served as Vice President and Chief Financial Officer,
Secretary and Treasurer of Cheniere since December 1997. Prior to joining
Cheniere in 1997, Mr. Turkleson was employed by PetroCorp Incorporated, an oil
and gas exploration company with operations in the United States and Canada,
from 1983 to 1996, as Controller until 1986, then as Vice President - Finance,
Secretary and Treasurer. From 1975 to 1983, he worked as a Certified Public
Accountant in the natural resources division of Arthur Andersen & Co. in
Houston. Mr. Turkleson received a B.S. in accounting from Louisiana State
University in 1975. He is a director, and past Chairman of the Board of
Neighborhood Centers, Inc., a nonprofit organization.
Jonathan S. Gross has served as Vice President-Exploration of Cheniere
since October 2000. He served as Technology Manager of the Company from June
1999 through October 2000. Mr. Gross began his career in 1981 with Amoco
Production Company, an oil and gas exploration and production company, as an
exploration geophysicist. While at Amoco he held senior technical positions in
both domestic and international basins. In 1998 he joined Zydeco Energy, Inc.,
an oil and gas exploration and production company, where he served as economist,
exploration risk specialist, and project manager. Mr. Gross received a Bachelor
of Arts degree in geology from the University of Chicago, and he is a member of
the American Association of Petroleum Geologists, the Society of Exploration
Geophysicists, and the Houston Geological Society.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Exchange Act, directors, certain officers, and
beneficial owners of 10% or more of any class of the Company's stock ("Reporting
Persons") are required from time to time to file with the Securities and
Exchange Commission and The American Stock Exchange reports of ownership and
changes of ownership. Reporting Persons are required to furnish the Company with
copies of all Section 16(a) reports they file. Based solely on its review of
forms and written representations received from Reporting Persons by it with
respect to the fiscal year ended December 31, 2001, the Company believes that
all filing requirements applicable to the Company's officers, directors and
greater than 10% stockholders have been met, except for the late filing of a
Form 4 by Walter Williams.
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ITEM 11. EXECUTIVE COMPENSATION
The following table reflects all compensation received by the chief
executive officer and by each of the five other most highly compensated
executive officers of the Company during the three years ended December 31,
2001, 2000 and 1999 (collectively, the "Named Executives").
SUMMARY COMPENSATION TABLE
Long Term
Compensation Awards
Annual Compensation -----------------------
---------------------- Securities Underlying
Name and Principal Position Year Salary Bonus Options/SARs (#)
---------------------------- ----- -------- -------- -----------------------
Charif Souki (1) 2001 $125,000 $50,000 120,000
Chairman 2000 $120,000 $100,000 112,500
1999 $120,000 - -
Walter L. Williams 2001 $150,000 - 80,000
Vice Chairman 2000 $127,500 - 67,500
1999 $120,000 - 25,000
Charles M. Reimer (2) 2001 $180,000 - 120,000
President and 2000 $60,000 - 362,500
Chief Executive Officer 1999 - - -
Keith F. Carney (3) 2001 $94,904 - 25,000
Executive Vice President - 2000 $112,500 - 67,500
Business Development 1999 $100,000 - 25,000
Don A. Turkleson 2001 $150,000 - 80,000
Vice President, 2000 $112,500 - 67,500
Chief Financial Officer, 1999 $100,000 - 25,000
Secretary and Treasurer
Jonathan S. Gross 2001 $150,000 - 60,000
Vice President - Exploration 2000 $120,000 - 86,250
1999 $64,167 - 18,750
--------------
(1) In October 1998, Mr. Souki commenced providing consulting services to the
Company pursuant to a Services Agreement and was compensated at a rate of
$10,000 per month. Such rate was increased to $15,000 per month in November
2001. Mr. Souki was awarded a bonus of $50,000 in November 2001. The timing
of payment is contingent upon Cheniere obtaining sufficient liquidity for
the payment of such bonus as determined by specified events or as
determined by the Board of Directors.
(2) Mr. Reimer has an employment agreement with the Company. Pursuant to the
terms of the employment agreement, Mr. Reimer is entitled to severance pay
equal to two years' base salary in the event of a change in control or
termination by the Company.
(3) Mr. Carney's salary was paid at a rate of $150,000 per year effective
October 2000 and continuing until October 2001 when he resigned from
Cheniere to become President of Dolomite Advisors LLC, a manager of energy
investment funds.
5
Option Grants
Stock options granted to Named Executives during the year ended
December 31, 2001 are summarized in the following table:
Individual Grants Potential Realizable Value
----------------------------------------------------------------------------------------------- at Assumed Annual Rates
Number of Securities % of Total of Stock Price Appreciation
Underlying Options/SARs Exercise or for Option Term
Options/SARs Granted to Employees Base Price Expiration ----------------------------
Name Granted in Fiscal Period Per Share Date 5% 10%
------------------ --------------------- -------------------- ------------- ----------- ----------- -------------
Charif Souki 120,000 16.0% $1.06 11/09/06 $ 35,143 $ 77,657
Walter L. Williams 80,000 10.7% $1.06 11/09/06 $ 23,429 $ 51,771
Charles M. Reimer 120,000 16.0% $1.06 11/09/06 $ 35,143 $ 77,657
Don A. Turkleson 80,000 10.7% $1.06 11/09/06 $ 23,429 $ 51,771
Jonathan S. Gross 60,000 8.0% $1.06 11/09/06 $ 17,572 $ 38,828
Options granted to named executives during 2001 have a term of five years
and vest 33% on each of the first three anniversaries of the date of grant.
Outside members of the Board of Directors (those who do not serve as
executive officers of the Company) are compensated for their services to the
Company through the grant of options to purchase Common Stock of the Company.
Option Exercises and Year-End Values
The following table sets forth information regarding unexercised options or
warrants to purchase shares of Common Stock granted by the Company to Named
Executives. No Named Executives exercised any Common Stock options during the
fiscal year ended December 31, 2001.
Number of Securities Underlying Value of Unexercised In-the-Money
Unexercised Options/SARs at December 31, 2001 Options/SARs at December 31, 2001 (1)
--------------------------------------------- --------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
------------------ ---------------- ------------------- ---------------- -----------------
Charif Souki 45,833 186,667 $ - $ -
Walter L. Williams 85,000 137,500 - -
Charles M. Reimer 304,583 186,667 - -
Don A. Turkleson 47,500 137,500 - -
Jonathan S. Gross 38,125 126,875 - -
----------
(1) The value of unexercised options and warrants to purchase Common Stock at
December 31, 2001 is calculated based upon The American Stock Exchange
closing market price of $1.00 per share on December 31, 2001.
Indemnification of Officers and Directors
The Company's Certificate of Incorporation provides that the liability of
directors for monetary damages shall be limited to the fullest extent
permissible under Delaware law. This limitation of liability does not affect the
availability of injunctive relief or other equitable remedies.
6
The Company's Certificate of Incorporation and Bylaws provide that the
Company shall indemnify its directors and officers to the fullest extent
possible under Delaware law. These indemnification provisions require the
Company to indemnify such persons against certain liabilities and expenses to
which they may become subject by reason of their service as a director or
officer of the Company or any of its affiliated enterprises. The provisions also
set forth certain procedures, including the advancement of expenses, that apply
in the event of a claim for indemnification.
Director Compensation
During the fiscal year ended December 31, 2001, directors received no cash
remuneration for serving on the Board of Directors of the Company, nor were they
compensated for attending Board or committee meetings. From time to time,
outside members of the Board of Directors (those who do not serve as executive
officers of the Company) are compensated for their services to the Company
through the grant of options to purchase Common Stock of the Company.
In November 2001, the Board of Directors granted options to purchase 25,000
shares of Common Stock to each of its outside directors, Messrs. Brandolini,
Carney and Howie, and 50,000 shares of Common Stock to its outside director, Mr.
Hoenmans, in recognition of their service to the Company. The options vested
fully on the date of grant and are not contingent upon the Company's achievement
of earnings goals. The options are exercisable at a price of $1.06 per share,
the closing market price on The American Stock Exchange on the date of the
grants. The options expire five years from the date of grant.
Compensation Committee Interlocks and Insider Participation
In addition to serving as a director of the Company, several directors held
positions as executive officers during the fiscal year ended December 31, 2001.
Mr. Souki served as Chairman of the Board; Mr. Williams served as Vice Chairman
of the Board. Mr. Reimer served as President and Chief Executive Officer.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the shares of
Common Stock owned of record and beneficially as of April 1, 2002 by all persons
who own of record or are known by the Company to own beneficially more than 5%
of the outstanding Common Stock, by each director, nominee for director and
Named Executive, and by all directors and executive officers as a group:
Amount and Nature of Percent
Name Beneficial Ownership of Class
--------- ------------------------ ------------
BSR Investments, Ltd. 1,452,495 (1) 10.8%
Nuno Brandolini 263,750 (2) 1.9%
Keith F. Carney 196,667 (3) 1.5%
Jonathan S. Gross 49,500 (4) *
Paul J. Hoenmans 50,000 (5) *
John K. Howie 37,500 (6) *
Charles M. Reimer 370,059 (7) 2.7%
Charif Souki 145,583 (8) 1.1%
Don A. Turkleson 101,667 (9) *
Walter L. Williams 121,250(10) *
All Directors and Officers as a group (9 persons) 1,335,976(11) 9.3%
---------
* Less than 1%.
(1) BSR Investments, Ltd. is controlled by Nicole Souki, the President of BSR
and the mother of Charif Souki. Charif Souki disclaims beneficial ownership
of the shares. Includes warrants to purchase 164,851 shares of the
Company's Common Stock. BSR's address is c/o Harney, Westwood & Riegels,
Box 71, Craigmuir Chambers, Road Town, Tortola, B.V.I.
7
(2) Includes 50,000 shares issuable upon exercise of currently exercisable
options held by Mr. Brandolini. Also includes warrants to purchase 213,750
shares of Common Stock held by Arabella SA, of which Mr. Brandolini
disclaims beneficial ownership. Mr. Brandolini serves as Chairman and Chief
Executive Officer of Scorpion Holdings, Inc, which manages investments for
Arabella SA. Mr. Brandolini also serves as a director of Arabella SA.
(3) Includes 4,167 shares issuable upon exercise of currently exercisable
warrants and 167,500 shares issuable upon exercise of currently exercisable
options held by Mr. Carney.
(4) Includes 334 shares issuable upon exercise of currently exercisable
warrants, 38,125 shares issuable upon exercise of currently exercisable
options and 8,854 shares issuable upon exercise of options which become
exercisable within 60 days of the filing of this proxy statement. Excludes
118,021 shares issuable upon the exercise of options held by Mr. Gross but
not exercisable within 60 days of the filing of this proxy statement.
(5) Includes 50,000 shares issuable upon exercise of currently exercisable
options held by Mr. Hoenmans.
(6) Includes 37,500 shares issuable upon exercise of currently exercisable
options held by Mr. Howie.
(7) Includes 258,334 shares issuable upon exercise of currently exercisable
warrants and 54,583 shares issuable upon exercise of currently exercisable
options. Excludes 186,667 shares issuable upon the exercise of options held
by Mr. Reimer but not exercisable within 60 days of the filing of this
proxy statement.
(8) Includes 14,250 shares issuable upon exercise of currently exercisable
warrants and 85,500 shares owned by Mr. Souki's wife. Also includes 45,833
shares issuable upon exercise of currently exercisable options. Excludes
186,667 shares issuable upon the exercise of options held by Mr. Souki but
not exercisable within 60 days of the filing of this proxy statement. Does
not include 1,287,644 shares nor warrants to purchase 164,851 shares of
Cheniere Common Stock held by BSR Investments, Ltd. of which Charif Souki
disclaims beneficial ownership. BSR Investments, Ltd. is controlled by
Nicole Souki, the President of BSR Investments, Ltd. and the mother of
Charif Souki.
(9) Includes 4,167 shares issuable upon exercise of currently exercisable
warrants, 50,625 shares issuable upon exercise of currently exercisable
options and 15,625 shares issuable upon exercise of options which become
exercisable within 60 days of the filing of this proxy statement. Excludes
118,750 shares issuable upon the exercise of options held by Mr. Turkleson
but not exercisable within 60 days of the filing of this proxy statement.
(10) Includes 88,125 shares issuable upon exercise of currently exercisable
options, 15,625 shares issuable upon exercise of options which become
exercisable within 60 days of the filing of this proxy statement and 10,000
shares owned by Mr. Williams' wife. Excludes 118,750 shares issuable upon
the exercise of options held by Mr. Williams but not exercisable within 60
days of the filing of this proxy statement.
(11) Includes an aggregate of 582,291 shares issuable upon exercise of currently
exercisable options, 40,104 shares issuable upon exercise of options which
become exercisable within 60 days of the filing of this proxy statement and
495,002 shares issuable upon exercise of currently exercisable warrants.
Excludes an aggregate of 728,855 shares issuable upon the exercise of
options not exercisable within 60 days of the filing of this proxy
statement (of which 241,111 have been granted contingent upon stockholder
approval of a proposed amendment to the 1997 Stock Option Plan).
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
BSR Investments, Ltd. ("BSR"), an entity holding approximately 10.8% of the
outstanding shares of the Company's Common Stock, is under the control of Nicole
Souki, the mother of Charif Souki, Chairman of the Board of Directors. Charif
Souki has been engaged, from time to time, as a consultant to BSR. Charif Souki
disclaims beneficial ownership of all shares held by BSR.
BSR purchased $2,000,000 of the notes issued in the Company's $4,000,000
December 1997 Bridge Financing and pledged a portion of its investment in
Cheniere Common Stock to fund its participation. In conjunction with the
financing, BSR received warrants to purchase 41,667 shares of the Company's
common stock. On September 15, 1998, BSR received warrants to purchase an
additional 100,000 shares of common stock as consideration for extending the
maturity of the notes to that date. Also in September 1998, the exercise price
of the warrants held by BSR was reduced from $9.50 to $6.00 per share as
consideration to extend the maturity date of the notes to January 15, 1999. In
March 1999, BSR exchanged notes payable of $2,000,000 for 694,445 shares of
8
Cheniere Common Stock ($2.88 per share). In May 1999, BSR purchased from another
note holder $240,000 in short-term notes payable by Cheniere. In July 1999, the
Company repaid $120,000 to BSR at the time it repaid 50% of the outstanding
balances on all of the notes issued in the December 1997 Bridge Financing. On
September 30, 1999, BSR exchanged its remaining $120,000 note payable and $1,000
in accrued interest for 27,500 units ($4.40 per unit), each unit representing
one share of common stock and one half warrant to purchase a share of common
stock at an exercise price of $6.00 per share on or before September 30, 2002.
In April 2000, the Company issued an additional 1,100 units, representing 1,100
shares of Common Stock and warrants to purchase 1,100 shares of Common Stock, to
BSR pursuant to a price adjustment provision included in the September 1999
offering.
In conjunction with certain of the Company's private placements of equity,
placement fees have been paid to Investors Administration Services, Limited
("IAS"), a company in which the brother of Charif Souki, Cheniere's Chairman, is
a principal. Placement fees paid to IAS totaled $30,000 during the year ended
December 31, 2001.
In September 2001, the Company made a payment of $40,000 to its chairman,
Charif Souki, representing consulting fees for the months of October 2001
through January 2002.
All such transactions were approved by the Board of Directors of the
Company, and the Company believes that each such transaction was on terms that
were comparable to, or more favorable to the Company than, those that might have
been obtained by the Company on an arm's length basis from unaffiliated parties.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CHENIERE ENERGY, INC.
By: /s/ DON A. TURKLESON
-------------------------------------
Don A. Turkleson
Chief Financial Officer
Date: May 14, 2002
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