Chesapeake Energy 2013 Annual Report Download - page 140

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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
132
Other. In 2013, we recorded approximately $87 million of other charges, including $26 million for the termination
of a gas gathering agreement, $28 million for the impairment of certain assets used to promote natural gas demand,
$15 million for the termination of a contract drilling agreement with a third party, $2 million related to the estimated
2012 shortfall of our net acreage maintenance commitment with Total in the Barnett Shale and $16 million related to
various other assets. In 2012, we recorded a $26 million charge related to the estimated 2012 shortfall of our net
acreage maintenance commitment with Total in the Barnett Shale. See Commitments - Net Acreage Maintenance
Commitments in Note 4 for further discussion.
17. Restructuring and Other Termination Costs
On September 9, 2013, we committed to a workforce reduction plan as part of a company-wide reorganization
effort intended to reduce costs. The reduction was communicated to affected employees on various dates within the
months of September and October, and all such notifications were completed by October 11, 2013. The plan resulted
in a reduction of approximately 900 employees. In connection with the reduction, we incurred a total cost of approximately
$66 million.
On April 1, 2013, Aubrey K. McClendon, the co-founder of the Company, ceased serving as President and CEO
and as a director of the Company pursuant to his agreement with the Board of Directors announced on January 29,
2013. Mr. McClendon’s departure from the Company was treated as a termination without cause under his employment
agreement. On April 18, 2013, the Company and Mr. McClendon entered into a Founder Separation and Services
Agreement, effective January 29, 2013, regarding his separation from employment and to facilitate the relationship
between the Company and Mr. McClendon as joint working interest owners of oil and gas wells, leases and acreage.
See Note 7 regarding Mr. McClendon’s historical participation in our drilling activities. In 2013, we incurred charges of
approximately $69 million related to Mr. McClendon’s departure.
In December 2012, Chesapeake announced that it had offered a voluntary separation program (VSP) to certain
employees as part of the Company's ongoing efforts to improve efficiencies and reduce costs. The VSP was offered
to approximately 275 employees who met criteria based upon a combination of age and years of Chesapeake service,
and 211 accepted prior to the expiration of the offer in February 2013. We recognized the expense related to their
termination benefits over their remaining service period which resulted in $63 million of expense for 2013.
During 2013, we also incurred charges of approximately $50 million related to other workforce reductions, including
separations of executive officers other than the CEO.