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Share-Based Compensation
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3 Months Ended | ||||||||||||||||||||||||
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Mar. 31, 2013
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| Share-based Compensation [Abstract] | |||||||||||||||||||||||||
| Share-based Compensation |
SHARE-BASED COMPENSATION
We have granted options to purchase common stock to employees, consultants and outside directors under the Cheniere Energy, Inc. Amended and Restated 1997 Stock Option Plan ("1997 Plan"), Amended and Restated 2003 Stock Incentive Plan, as amended ("2003 Plan"), and 2011 Incentive Plan, as amended (the "2011 Plan"). We recognize our share-based payments to employees in the consolidated financial statements based on their fair values at the date of grant. The calculated fair value is recognized as expense (net of any capitalization) over the requisite service period, net of estimated forfeitures, using the straight-line or accelerated recognition methods.
For the three months ended March 31, 2013 and 2012, the total share-based compensation expense recognized in our net loss (net of capitalization) was $63.7 million and $2.3 million, respectively. The effect of a change in estimated forfeitures is recognized through a cumulative adjustment included in share-based compensation cost in the period of change in estimate. For the three months ended March 31, 2013 and 2012, the total share-based compensation cost capitalized as part of the cost of capital assets was $2.3 million and zero, respectively.
The total unrecognized compensation cost at March 31, 2013 relating to non-vested share-based compensation arrangements granted under the 1997 Plan, 2003 Plan and 2011 Plan was $409.7 million. That cost is expected to be recognized over 6.0 years, with a weighted average period of 3.0 years.
We received zero proceeds from the exercise of stock options in the three months ended March 31, 2013 and 2012.
Long-Term Commercial Bonus Awards for Train 3 and Train 4 under the 2011-2013 Bonus Plan
On December 12, 2012, pursuant to the 2011-2013 Bonus Plan, the Compensation Committee approved a Long-Term Bonus Pool for 2012 for all employees of the Company consisting of a total of 18 million shares of restricted stock which will be earned based on the Company's achievement of specific goals related to Train 3 and Train 4 of the Liquefaction Plan as well as the Company's stock price. The Long-Term Commercial Bonus Awards for Train 3 and Train 4 of the Liquefaction Project were granted to employees in February 2013 under the 2003 Plan and 2011 Plan.
A portion of each employee's Long-Term Commercial Bonus Award for Train 3 and Train 4 of the Liquefaction Project was granted as a milestone award ("Milestone Award"), with vesting of the Milestone Award conditional on certain milestones relating to financing and constructing Train 3 and Train 4 of the Liquefaction Project, and a portion was granted as a stock price award ("Stock Price Award"), with vesting of the Stock Price Award conditional on the achievement of minimum average Company stock price hurdles. The Milestone Awards will vest based on the achievement of the following milestones:
The Stock Price Awards will vest based on the achievement of the following minimum average Company stock price hurdles:
The determination of the attainment of the average closing stock price will be based on any 120-day average stock price of the Company, calculated based on calendar days and on a rolling basis. There will be no pro-rated vesting of the second half of the Stock Price Awards between the $25 and $35 stock price hurdles.
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