Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 25, 2022, the Board of Directors (the "Board") of Chesapeake Energy
Corporation (the "Company") announced the appointment Josh Viets as the
Company's Executive Vice President and Chief Operating Officer, effective as of
February 1, 2022. Since 2002, Mr. Viets, age 43, has been employed by
ConocoPhillips in a variety of positions of increasing responsibility, including
engineering, operations, and capital management roles in the United States and
the United Kingdom. Mr. Viets most recently served as ConocoPhillips' Vice
President, Delaware Basin beginning in January 2021 and previously served as the
Permian Basin Asset Manager, Development Manager and Engineering Manager from
November 2015 through January 2021. Mr. Viets holds a Bachelor of Science in
Petroleum Engineering from Colorado School of Mines.
In connection with Mr. Viets' appointment as Executive Vice President and Chief
Operating Officer of the Company, the Compensation Committee of the Board (the
"Compensation Committee"), approved the following compensation terms:
•Base Salary. Mr. Viets will receive an initial annualized base salary of
$490,000 ("Base Salary").
•Bonus. Mr. Viets will be eligible for an annual cash bonus on the same basis as
other executive officers under the Company's then-current annual incentive plan,
beginning in fiscal year 2022. Mr. Viets' annual bonus opportunity payable at
achievement of target and maximum levels will be 100% and 200%, respectively, of
Base Salary.
•Annual Equity Compensation. Mr. Viets will be eligible for annual grants of
equity-based incentive awards under the Company's Long Term Incentive Plan
beginning in March of 2022. For fiscal year 2022, Mr. Viets will receive equity
incentive awards with an aggregate grant date target fair value of $2,050,000,
consisting of $512,500 (25%) of restricted stock units ("RSUs") and $1,537,500
(75%) of performance share units ("PSUs"). The RSUs vest in three equal annual
installments beginning on the first anniversary of the grant date and the PSUs
vest on the third anniversary of the grant date, with each subject to Mr. Viets'
continued employment with the Company through the applicable vesting date. The
number of RSUs and PSUs to be issued will be based on the weighted average price
of the Company's common stock price over the 30 day period ending on the day
prior to the grant date (the "30-day VWAP"). Mr. Viets' PSUs will have a target
value of $1,537,500, with a potential maximum value of $3,075,000. The terms and
conditions of the RSUs and PSUs will otherwise be consistent with the equity
incentive awards that are granted to other members of the Company's senior
management team.
•Signing Bonus and Inducement Equity Award. As an inducement for Mr. Viets to
accept the Company's offer of employment and in recognition of Mr. Viets'
unvested ConocoPhillips cash bonus and equity awards, which Mr. Viets forfeited
to assume employment with the Company, Mr. Viets will receive: (i) a cash
signing bonus of $500,000, subject to a one-year clawback provision; and
(ii) RSUs with an aggregate grant date fair value of $1,100,000, based on the
30-day VWAP, with vesting to occur in three equal annual installments beginning
on February 28, 2023, subject to Mr. Viets' continued employment with the
Company through the applicable vesting date.
•Severance. Mr. Viets will be a Tier 2 participant in the Company's Executive
Severance Plan that was previously disclosed and attached to the Company's
Current Report on Form 8-K filed with the SEC on October 12, 2021.
•Clawbacks. Mr. Viets' incentive compensation will be subject to the Company's
clawback policies applicable to all executive officers of the Company in effect
from time to time and applicable law.
The Company will also enter into a standard Indemnity Agreement with Mr. Viets,
a form of which was filed with the SEC on February 9, 2021 as Exhibit 10.6 to
the Company's Current Report on Form 8-K. Pursuant to this agreement, subject to
the exceptions and limitations provided therein, the Company will
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indemnify Mr. Viets for obligations he may incur in his capacity as an officer,
as authorized by the Company's restated certificate of incorporation.
The Company is not aware of any arrangement or understanding between Mr. Viets
and any other person pursuant to which he was appointed as an officer. Mr. Viets
does not have any family relationships with any of the Company's directors or
executive officers or a direct or indirect material interest in any transaction
or series of similar transactions that would require disclosure under Item
404(a) of Regulation S-K.
Item 7.01. Regulation FD Disclosure.
On January 25, 2022, the Company issued a press release announcing the
appointment of Mr. Viets as Chief Operating Officer of the Company. A copy of
the press release is attached hereto as Exhibit 99.1 and is incorporated herein
by reference. The information contained in this press release is being furnished
and shall not be deemed "filed" for purposes of Section 18 of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act") or incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific reference in
such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Description
99.1 Chesapeake Energy Corporation Press Release dated January 25, 2022
104 Cover Page Interactive Data File (embedded within the inline XBRL document)
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