Chesapeake Board Changes Have Not Triggered Payouts

Chesapeake Board Changes Have Not Triggered Payouts

Recent changes to Chesapeake Energy's board of directors have not triggered a change of control under employment agreements, a company spokesperson told Rigzone in response to a Reuters story.

Reuters reported on Tuesday that changes to Chesapeake's board could trigger a bonus windfall for approximately 1,600 employees. But because the recent changes have not triggered a change under control under these agreements, any contractual provisions requiring payments do not apply, said Michael Kehs, vice president of strategic affairs and public affairs at Chesapeake.

"Chesapeake does not have a companywide severance policy and the change of control language in question dates back to at least 2003," Kehs commented.

"Under these agreements, in the absence of an actual or threatened election or proxy contest, there is no change of control if the new directors are approved by the then existing directors, and that is what happened here," Kehs said.

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