Board to Name Independent, Non-Executive Chairman
Chesapeake Energy Corporation (NYSE:CHK) today announced that its Board
of Directors has renegotiated the terms of the company's Founder Well
Participation Program (FWPP) with Chairman and Chief Executive Officer
Aubrey K. McClendon to provide for the early termination of the FWPP on
June 30, 2014, 18 months before the end of its current term on December
31, 2015. Mr. McClendon will receive no compensation of any kind in
connection with the early termination of the FWPP.
The FWPP, which was approved by shareholders for a 10-year term in 2005,
in conjunction with Mr. McClendon's employment agreement with the
company, provides Mr. McClendon a contractual right to participate and
invest as a working interest owner (with up to a 2.5% working interest)
in new wells drilled on the company's leasehold. Mr. McClendon has
agreed to forego such contractual right 18 months early without
compensation.
The Board of Directors will name an independent, Non-Executive Chairman
in the near future. The Board’s Nominating and Corporate Governance
Committee is considering potential candidates with no previous
substantive relationship with Chesapeake and will be soliciting input
from major shareholders. Upon the appointment of a Non-Executive
Chairman, Mr. McClendon will relinquish the position of Chairman and
continue as Chief Executive Officer. Mr. McClendon has indicated his
support of the Board’s decision to name a Non-Executive Chairman and
waived any rights he might have under his employment agreement as a
result of no longer serving as Chairman. As previously announced, the
Board is reviewing the financing arrangements between Mr. McClendon (and
the entities through which he participates in the FWPP) and any third
party that has had or may have a relationship with the company in any
capacity.
Merrill A. (“Pete”) Miller, Jr., Chesapeake’s Lead Independent Director
and President and Chief Executive Officer of National Oilwell Varco,
said, “The Board is focused on serving the interests of shareholders. We
believe separation of the Chairman and CEO roles will improve
Chesapeake’s corporate governance and the early termination of the FWPP
will eliminate a source of controversy, both of which should send a
positive signal to the market and improve shareholder value. The Board
appreciates Aubrey’s cooperation in these measures and has confidence in
Chesapeake’s future, based on its superb assets, strong management team
and talented employees.”
Aubrey K.