Chesapeake said it would replace four directors on the nine-member board. Mason Hawkins's Southeastern Asset Management will get three seats and billionaire Carl Icahn will get one. The selection of a new independent chairman must be approved by the new board members.

Chesapeake said the new board and the independent chairman will be announced on or before June 22, but did not specify which current members would step down after the four new directors are appointed.

Chesapeake is under pressure to sell assets and cut spending to reduce debt after tumbling natural gas prices have pinched profits. Shareholders have also lost confidence in the company because of governance issues.

It is not clear what changes the new board members will seek, but both Hawkins and Icahn have said in regulatory filings that an outright sale of the company should be considered.

Chesapeake shares rose 6.4 percent to $16.59 in afternoon New York Stock Exchange trading. Analysts and investors characterized the changes as mostly constructive.

"I think these changes are positive because you'll have four board members representing shareholders plus one who shareholders think is favorable to them, Louis Simpson," said Joseph Allman, oil and gas industry analyst at JPMorgan in New York. "The board will push changes. That is, less spending and additional asset sales."

At the very least, the board restructuring means Chief Executive Aubrey McClendon will be monitored much more closely.

"McClendon can still propose anything he wants, but now it's got to be approved," said Mike Breard, analyst with Hodges Capital Management in Dallas. "This ties his hands."

Chesapeake's board has been under scrutiny since Reuters reported in April that McClendon had taken out more than $1 billion in loans, using his personal stakes in thousands of company wells as collateral.

Hawkins and Icahn demanded changes after Reuters reported about the board's lax oversight of McClendon.

In early May, the board said it will strip McClendon of the title of chairman, but he will remain on the board. Hawkins and Icahn have not asked him to step down.

Icahn says he has had a constructive relationship with the CEO and hopes that will continue.

Icahn, who owns 7.6 percent of Chesapeake, said in May 25 letter there was not enough management oversight. He has criticized the company's heavy spending to buy land.

Southeastern owns 13.6 percent of Chesapeake.

David Dreman, chairman of Dreman Value Management, which owns about 1 million shares of Chesapeake, called the board changes a step in the right direction but said McClendon should no longer be involved in the company at all.

"Just given the whole mess, does a shareholder really want someone like that involved in any way whatsoever?" Dreman said. "Maybe as a consultant, but even then there's such a dark cloud."

McClendon's personal lender, EIG Global Energy Partners, is also a big source of funding for Chesapeake, a situation that academics and analysts have said may cause a conflict.

The CEO also ran a $200 million hedge fund from his office, borrowed from a former board member, and is allowed to profit when his oil and gas interests are sold alongside the company's, Reuters has reported.

Since the first Reuters report on April 18, Chesapeake's shares had fallen 14 percent as of the close on Friday, June 1, as governance worries and a liquidity crunch weigh.

The Chesapeake annual meeting is scheduled for Friday, June 8.

WHO IS OUT?

Chesapeake's board will work to ensure shareholders the opportunity to elect the entire board of directors at the 2013 annual meeting. Previously, the company lobbied the state of Oklahoma to mandate board elections on staggered terms.

McClendon, 52, has put longtime friends on the Chesapeake board and showered them with hefty compensation and perks like free travel on the corporate jet. He had been chairman since the company went public in 1993 and has had significant sway over board compensation.

Last month, Chesapeake said it would cut compensation for its outside directors by 20 percent following pressure from shareholders.

In the last three years, total compensation for all Chesapeake directors was valued at $13.3 million -- far above peers Devon Energy Corp's $4.5 million and EOG Resources Inc's $7.5 million, according to data compiled by Reuters.

It is likely that Simpson will remain on the board because he was named to it by Hawkins. Simpson, who has been on the board less than a year, was CEO of GEICO Corp, a unit of Berkshire Hathaway Corp.

Director Charles Maxwell, an oil analyst at Weeden & Co, had planned to retire this year.

Of the remaining directors, former U.S. Senator Don Nickles, former Union Pacific Corp CEO Richard Davidson, Oklahoma State University President V. Burns Hargis, and former Oklahoma Governor Frank Keating are among the longest-serving board members and are thought likely to bear the brunt of any resignations, said Mark Hanson, an analyst with Morningstar.

That would leave lead director Pete Miller, chief executive of oilfield service company National Oilwell Varco Inc, and former Royal Dutch Shell executive Kathleen Eisbrenner on the board.

Analysts and Chesapeake investors said the company is in a weak position. Decade-low natural gas prices have contributed to a large funding gap. Chesapeake has said it will sell up to $11.5 billion in assets this year.

Because Chesapeake has to sell, it will be in a weak position at the negotiating table, JPMorgan's Allman said.

Icahn said in a filing with the U.S. Securities and Exchange Commission that he would continue to consult on the selection of a new chairman and assets sales, and did not want the company's current low valuation to discourage potential buyers of the whole company.

McClendon has not raised the possibility of selling Chesapeake, focusing instead on selling assets, such as its holdings in the West Texas Permian Basin, to close a funding gap estimated at more than $10 billion this year.

Chesapeake has accumulated one of the nation's largest portfolios of oil and gas leases. Last week, debt rating agency Moody's Investors Service warned the company it must sell at least $7 billion in assets to avoid breaching a loan covenant.

(Reporting By Michael Erman, Matt Daily, Ernest Scheyder and Jennifer Ablan in New York, Editing by Gerald E. McCormick, Jeffrey Benkoe, John Wallace and Patricia Kranz)

By Anna Driver and Brian Grow