Chesapeake Energy Agrees on Plan to Reconstitute Board of Directors
OREANDA-NEWS. June 9, 2012. Chesapeake Energy Corporation (NYSE: CHK) today announced that following extensive discussions with its two largest shareholders, Southeastern Asset Management and Carl C. Icahn and his affiliated entities, who own, respectively, approximately 13.6% and 7.6% of the Company’s common stock, Chesapeake has agreed to a plan to reconstitute its Board of Directors by adding four new independent directors to replace four existing independent directors who will resign from the Board upon the appointment of the new directors. Three of the new independent directors will be proposed by Southeastern and the fourth independent director will be Mr. Icahn or a person designated by Mr. Icahn, with Mr. Icahn making that determination prior to the reconstitution of the Board.
In addition, as previously announced, a fifth existing independent director is retiring at the 2012 Annual Meeting of Shareholders and will be replaced subsequently by a new independent Non-Executive Chairman through a selection process that is nearing completion. The new independent Non-Executive Chairman, who will have no previous substantive relationship with
In connection with Chesapeake’s 2012 Annual Meeting of Shareholders scheduled to be held on June 8, 2012, the Board of Directors has determined that if the amendment to Chesapeake’s bylaws to implement majority voting in director elections is approved by Chesapeake shareholders, it will be immediately implemented and applied to the results of the 2012 Annual Meeting. The Board will also seek relief from the
Merrill A. (“Pete”) Miller, Jr., Chesapeake’s Lead Independent Director and President and Chief Executive Officer of National Oilwell Varco, said, “We are pleased to announce these important actions taken by the Board in consultation with our two largest shareholders to further enhance Chesapeake’s corporate governance for the benefit of all shareholders. We greatly appreciate the substantial contributions of all of our directors, but recognize our shareholders’ desire for change. Following implementation of these initiatives, the Chesapeake Board will have been substantially reconstituted with five new independent directors, including a new independent chairman, in addition to Lou Simpson who joined the Board last year.”
Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, said, “Today’s announcement is the culmination of a continuing effort by Chesapeake’s Board to address shareholder concerns and better position the Company for the future. I am fully supportive of these measures and remain focused on executing
O. Mason Hawkins, Chairman and Chief Executive Officer of Southeastern Asset Management, the Company’s largest shareholder, said, “We are pleased that Chesapeake is being responsive to issues raised by us and many of the Company’s other shareholders. These steps to reconstitute the Board will enhance oversight and provide greater accountability.”
Carl C. Icahn,