Exhibit 10.26
CHENIERE ENERGY, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
Optionee: Xxx X. Kreszke
X. XXXXX OF STOCK OPTION. As of the GRANT DATE (identified below), Cheniere
Energy, Inc., a Delaware corporation (the "COMPANY"), hereby grants a
Nonqualified Stock Option (the "OPTION") to the OPTIONEE (identified below) to
purchase the number of shares of the Company's common stock, $.003 par value per
share, identified below (the "SHARES"), subject to the terms and conditions of
this agreement (the "AGREEMENT"). The Shares, when issued to Optionee upon the
exercise of the Option, shall be fully paid and nonassessable. The Option is
not an "incentive stock option" as defined in Section 422 of the Internal
Revenue Code.
II. DEFINITIONS. All capitalized terms used herein shall have the meanings set
forth in the Plan unless otherwise provided herein. Section 15 below sets forth
meanings for various capitalized terms used in this Agreement.
III. OPTION TERM. The Option shall commence on the Grant Date (identified
below) and terminate on the date prior to the fifth (5th) anniversary of the
Grant Date. This period during which the Option is in effect and may be
exercised is referred to herein as the "OPTION PERIOD".
IV. OPTION PRICE. The Option Price per Share is identified below.
V. VESTING. The total number of Shares subject to this Option shall vest in
accordance with the VESTING SCHEDULE (identified below). The Shares may be
purchased at any time after they become vested, in whole or in part, during the
Option Period. The right of exercise provided herein shall be cumulative so
that if the Option is not exercised to the maximum extent permissible after
vesting, it shall be exercisable, in whole or in part, at any time during the
Option Period.
VI. METHOD OF EXERCISE. The vested portion of the Option may be exercised, in
whole or in part, at any time, with respect to whole Shares only, within the
period permitted for the exercise thereof, and shall be exercised by written
notice of intent to exercise the Option with respect to a specified number of
Shares delivered to the Company at its principal office, and payment in full to
the Company at said office of the amount of the Option Price for the number of
Shares with respect to which the Option is then being exercised. Payment of the
Option Price shall be made (i) in cash or by cash equivalent, (ii) at the
discretion of the Committee, in Common Stock (not subject to limitations on
transfer) valued at the Fair Market Value of such Shares on the trading date
immediately preceding the date of exercise, or (iii) at the discretion of the
Committee, by a combination of such cash and such Common Stock. In addition to
and at the time of payment of the Option Price, the Optionee shall pay to the
Company in cash or, at the discretion of the Committee, in Common Stock, the
full amount of all federal and state withholding and other employment taxes
applicable to the taxable income of such Optionee resulting from such exercise.
1
VII. TERMINATION OF EMPLOYMENT. Voluntary or involuntary termination of
employment and death or disability of Optionee shall affect Optionee's rights
under the Option as follows:
A. Termination for Cause. The Option shall terminate immediately and
shall not be further exercisable to any extent if Optionee's employment with the
Company (or any of its Subsidiaries) is terminated for cause.
B. Other Involuntary Termination or Voluntary Termination. If Optionee's
employment with the Company (or any of its Subsidiaries) is terminated for any
reason other than for cause, death or disability, then (i) the Option will
immediately terminate to the extent it is unvested and (ii) the vested portion
of the Option will terminate to the extent not exercised within 180 calendar
days after the date of such termination. In no event may the Option be
exercised by anyone after the earlier of (i) the expiration of the Option Period
or (ii) 180 calendar days after termination of employment.
C. Death or Disability. If Optionee's employment is terminated by death
or disability, then (i) the Option will immediately terminate to the extent it
is unvested and (ii) the vested portion of the Option will terminate 365
calendar days after the date of such termination to the extent not exercised by
Optionee or, in the case of death, by the person or persons to whom Optionee's
rights under the Option have passed by will or by the laws of descent and
distribution or, in the case of disability, by Optionee's legal representative.
In no event may any Option be exercised by anyone after the earlier of (i) the
expiration of the Option Period or (ii) 365 days after Optionee's death or
termination of employment due to disability.
VII. REORGANIZATION OF COMPANY. The existence of the Option shall not affect
in any way the right or power of Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in Company's capital structure or its business, or any merger or
consolidation of Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Shares or the rights thereof, or the
dissolution or liquidation of Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
In the event of a change in control of the Company, vesting of the Option
may be accelerated.
VIII. ADJUSTMENT OF SHARES. In the event of stock dividends, spin-offs of
assets or other extraordinary dividends, stock splits, combinations of shares,
recapitalizations, mergers, consolidations, reorganizations, liquidations,
issuances of rights or warrants and similar transactions or events involving
Company, appropriate adjustments shall be made to the terms and provisions of
this Option.
IX. NO RIGHTS IN SHARES. Optionee shall have no rights as a stockholder in
respect of the Shares until the Optionee becomes the record holder of such
Shares.
X. INVESTMENT REPRESENTATION. Optionee will enter into such written
representations, warranties and agreements as Company may reasonably request in
order to comply with any federal or state securities law. Moreover, any stock
certificate for any Shares issued to Optionee
2
hereunder may contain a legend restricting their transferability as determined
by the Company in its discretion. Optionee agrees that Company shall not be
obligated to take any affirmative action in order to cause the issuance or
transfer of Shares hereunder to comply with any law, rule or regulation that
applies to the Shares subject to the Option.
XI. NO GUARANTEE OF EMPLOYMENT OR SERVICE CONTRACT. The Option shall not
confer upon Optionee any right to employment or other service with Company, nor
shall it interfere with any right the Company would otherwise have to terminate
such Optionee's employment or other service at any time, with or without cause.
XII. WITHHOLDING OF TAXES. Company shall have the right to (i) make deductions
from the number of Shares otherwise deliverable upon exercise of the Option in
an amount sufficient to satisfy withholding of any federal, state or local taxes
required by law, or (ii) take such other action as may be necessary or
appropriate to satisfy any such tax withholding obligations.
XIII. GENERAL.
A. Notices. All notices under this Agreement shall be mailed or delivered
by hand to the parties at their respective addresses set forth beneath their
signatures below or at such other address as may be designated in writing by
either of the parties to one another. Notices shall be effective upon receipt.
B. Shares Reserved. Company shall at all times during the Option Period
reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of this Option.
C. Nontransferability of Option. The Option granted pursuant to this
Agreement is not transferable other than by will, the laws of descent and
distribution or by a qualified domestic relations order (as defined in Section
414(p) of the Internal Revenue Code). The Option will be exercisable during
Optionee's lifetime only by Optionee or by Optionee's legal representative in
the event of Optionee's disability. No right or benefit hereunder shall in any
manner be liable for or subject to any debts, contracts, liabilities, or torts
of Optionee.
D. Amendment and Termination. No amendment or termination of the Option
shall be made at any time without the written consent of Optionee. No amendment
or termination of the Plan will adversely affect the rights and privileges of
Optionee under the Option without the written consent of Optionee.
E. No Guarantee of Tax Consequences. Neither Company, Board or Committee
makes any commitment or guarantee that any federal or state tax treatment will
apply or be available to any person eligible for benefits under the Option. The
Optionee has been advised and been provided the opportunity to obtain
independent legal and tax advice regarding the grant and exercise of this Option
and the disposition of any Shares acquired thereby.
F. Severability. In the event that any provision of this Agreement shall
be held illegal, invalid, or unenforceable for any reason, such provision shall
be fully severable, but shall not affect the remaining provisions of the
Agreement, and the Agreement shall be construed and enforced as if the illegal,
invalid, or unenforceable provision had not been included herein.
3
G. Governing Law. The Option shall be construed in accordance with the
laws of the State of Texas without regard to its conflict of law provisions, to
the extent federal law does not supersede and preempt Texas law.
XIV. DEFINITIONS AND OTHER TERMS. The following capitalized terms shall have
those meanings set forth opposite them:
A. Optionee: Xxx X. Xxxxxxx.
X. Xxxxx Date: July 1, 1999.
C. Shares: Six Hundred Thousand (600,000) Shares of the Company's Common
Stock.
D. Option Price: One Dollar and Fifty Cents ($1.50) per Share.
E. Option Period: July 1, 1999 through June 30, 2004 (until 12:00 p.m.
central).
F. Vesting Schedule: Options for 300,000 Shares shall vest on the Grant
Date, Options for 75,000 Shares shall vest on the first anniversary of
the Grant Date, and Options for 75,000 Shares shall vest on each
subsequent anniversary of the Grant Date until fully vested as follows:
Date Options Vesting
---- ---------------
July 1, 1999 300,000
July 1, 2000 75,000
July 1, 2001 75,000
July 1, 2002 75,000
July 1, 2003 75,000
-------
Total 600,000
=======
IN WITNESS WHEREOF, this Stock Option Agreement is executed this ______ day of
_____________, 19_____.,
"COMPANY"
CHENIERE ENERGY, INC.
By:
------------------------------
Name: Xxxxxxx X. Xxxxxx
4
Title: President and CEO
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Accepted and agreed this ____ day of ____________, 19_____.
"OPTIONEE"
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Address:
------------------------
------------------------
------------------------
5
