0000921669-12-000045.txt : 20120525 0000921669-12-000045.hdr.sgml : 20120525 20120525155659 ACCESSION NUMBER: 0000921669-12-000045 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20120525 DATE AS OF CHANGE: 20120525 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CHESAPEAKE ENERGY CORP CENTRAL INDEX KEY: 0000895126 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731395733 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-43515 FILM NUMBER: 12871293 BUSINESS ADDRESS: STREET 1: 6100 N WESTERN AVE CITY: OKLAHOMA CITY STATE: OK ZIP: 73118 BUSINESS PHONE: 4058488000 MAIL ADDRESS: STREET 1: 6100 NORTH WESTERN AVE CITY: OKLAHOMA CITY STATE: OK ZIP: 73118 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ICAHN CARL C CENTRAL INDEX KEY: 0000921669 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 000000000 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O ICAHN ASSOCIATES CORP. STREET 2: 767 FIFTH AVE., SUITE 4700 CITY: NEW YORK STATE: NY ZIP: 10153 BUSINESS PHONE: 212-702-4300 MAIL ADDRESS: STREET 1: C/O ICAHN ASSOCIATES CORP. STREET 2: 767 FIFTH AVE., SUITE 4700 CITY: NEW YORK STATE: NY ZIP: 10153 FORMER COMPANY: FORMER CONFORMED NAME: ICAHN CARL C ET AL DATE OF NAME CHANGE: 19950612 SC 13D 1 chk13d052512.htm chk13d052512.htm

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 13D
 
Under the Securities Exchange Act of 1934
(Amendment No.__)*

Chesapeake Energy Corporation
(Name of Issuer)

 Common Stock, Par Value $0.01
 (Title of Class of Securities)

165167107
 (CUSIP Number)

Keith Schaitkin, Esq.
Icahn Capital LP
767 Fifth Avenue, 47th Floor
New York, New York 10153
(212) 702-4300

(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

 
May 18, 2012
(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Section 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box  / /.

NOTE:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 

 
 
 
SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
High River Limited Partnership

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
WC

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
10,017,042

8           SHARED VOTING POWER
0

9           SOLE DISPOSITIVE POWER
10,017,042

10           SHARED DISPOSITIVE POWER
0

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,017,042

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.51%

14           TYPE OF REPORTING PERSON
PN
 
 
 

 
SCHEDULE 13D
CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
Hopper Investments LLC

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
OO

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
0

8           SHARED VOTING POWER
10,017,042

9           SOLE DISPOSITIVE POWER
0 

10           SHARED DISPOSITIVE POWER
10,017,042

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,017,042

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.51%

14           TYPE OF REPORTING PERSON
OO



 
 
 


SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
Barberry Corp.

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
OO

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
0

8           SHARED VOTING POWER
10,017,042

9           SOLE DISPOSITIVE POWER
0 

10           SHARED DISPOSITIVE POWER
10,017,042

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,017,042

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.51%

14           TYPE OF REPORTING PERSON
CO



 
 
 


SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
Icahn Partners Master Fund LP

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
WC

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
15,660,840

8           SHARED VOTING POWER
0

9           SOLE DISPOSITIVE POWER
15,660,840

10           SHARED DISPOSITIVE POWER
0

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,660,840

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.36%

14           TYPE OF REPORTING PERSON
PN
 
 
 
 
SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
Icahn Partners Master Fund II LP

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
WC

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
6,670,553

8           SHARED VOTING POWER
0

9           SOLE DISPOSITIVE POWER
6,670,553

10           SHARED DISPOSITIVE POWER
0

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,670,553

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.01%

14           TYPE OF REPORTING PERSON
PN

 
 
 
 
SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
Icahn Partners Master Fund III LP

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
WC

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
2,944,050

8           SHARED VOTING POWER
0

9           SOLE DISPOSITIVE POWER
2,944,050

10           SHARED DISPOSITIVE POWER
0

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,944,050

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.44%

14           TYPE OF REPORTING PERSON
PN

 
 
 
 
SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
Icahn Offshore LP

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
OO

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
0

8           SHARED VOTING POWER
25,275,443

9           SOLE DISPOSITIVE POWER
0

10           SHARED DISPOSITIVE POWER
25,275,443

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,275,443

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.82%

14           TYPE OF REPORTING PERSON
PN
 
 
 
 
SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
Icahn Partners LP

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
WC

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
14,792,717

8           SHARED VOTING POWER
0

9           SOLE DISPOSITIVE POWER
14,792,717

10           SHARED DISPOSITIVE POWER
0

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,792,717

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
                      2.23%

14           TYPE OF REPORTING PERSON
PN
 
 
 
 
SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
Icahn Onshore LP

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
OO

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
0

8           SHARED VOTING POWER
14,792,717

9           SOLE DISPOSITIVE POWER
0

10           SHARED DISPOSITIVE POWER
14,792,717

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,792,717

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.23%

14           TYPE OF REPORTING PERSON
PN
 
 
 
 
SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
Icahn Capital LP

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
OO

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
0

8           SHARED VOTING POWER
40,068,160

9           SOLE DISPOSITIVE POWER
0 

10           SHARED DISPOSITIVE POWER
40,068,160

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
40,068,160

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.05%

14           TYPE OF REPORTING PERSON
PN

 
 
 
 
SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
IPH GP LLC

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
OO

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
0

8           SHARED VOTING POWER
40,068,160

9           SOLE DISPOSITIVE POWER
0 

10           SHARED DISPOSITIVE POWER
40,068,160
 
 
11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
40,068,160

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.05%

14           TYPE OF REPORTING PERSON
OO
 
 
 
 
SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
Icahn Enterprises Holdings L.P.

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
OO

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
0

8           SHARED VOTING POWER
40,068,160

9           SOLE DISPOSITIVE POWER
0 

10           SHARED DISPOSITIVE POWER
40,068,160

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
40,068,160

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.05%

14           TYPE OF REPORTING PERSON
PN
 
 
 
 
SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
Icahn Enterprises G.P. Inc.

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
OO

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
0

8           SHARED VOTING POWER
40,068,160

9           SOLE DISPOSITIVE POWER
0 

10           SHARED DISPOSITIVE POWER
40,068,160

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
40,068,160

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.05%

14           TYPE OF REPORTING PERSON
CO
 
 
 
 
SCHEDULE 13D

CUSIP No.  165167107


1.           NAME OF REPORTING PERSON
Beckton Corp.

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
OO

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
0

8           SHARED VOTING POWER
40,068,160

9           SOLE DISPOSITIVE POWER
0 

10           SHARED DISPOSITIVE POWER
40,068,160

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
40,068,160

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.05%

14           TYPE OF REPORTING PERSON
CO
 
 
 
 
SCHEDULE 13D

CUSIP No.  165167107


1           NAME OF REPORTING PERSON
Carl C. Icahn

2           CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /  /
(b) / /
3           SEC USE ONLY

4           SOURCE OF FUNDS
OO

5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 
/  /

6           CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

7           SOLE VOTING POWER
0

8           SHARED VOTING POWER
50,085,202

9           SOLE DISPOSITIVE POWER
0

10           SHARED DISPOSITIVE POWER
50,085,202

11           AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
50,085,202

12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/  /

13           PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.56%

14           TYPE OF REPORTING PERSON
IN
 
 
 
 
SCHEDULE 13D

Item 1. Security and Issuer

This statement relates to the Common Stock, par value $0.01 (the “Shares”), issued by Chesapeake Energy Corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 6100 North Western Avenue, Oklahoma City, Oklahoma 73118.

Item 2. Identity and Background

The persons filing this statement are High River Limited Partnership (“High River”), Hopper Investments LLC (“Hopper”), Barberry Corp. (“Barberry”), Icahn Partners Master Fund LP (“Icahn Master”), Icahn Partners Master Fund II LP (“Icahn Master II”), Icahn Partners Master Fund III LP (“Icahn Master III”), Icahn Offshore LP (“Icahn Offshore”), Icahn Partners LP (“Icahn Partners”), Icahn Onshore LP (“Icahn Onshore”), Icahn Capital LP (“Icahn Capital”), IPH GP LLC (“IPH”), Icahn Enterprises Holdings L.P. (“Icahn Enterprises Holdings”), Icahn Enterprises G.P. Inc. (“Icahn Enterprises GP”), Beckton Corp. (“Beckton”), and Carl C. Icahn, a citizen of the United States of America (collectively, the "Reporting Persons").

The principal business address of each of (i) High River, Hopper, Barberry, Icahn Offshore, Icahn Partners, Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP and Beckton is White Plains Plaza, 445 Hamilton Avenue - Suite 1210, White Plains, NY 10601, (ii) Icahn Master, Icahn Master II and Icahn Master III is c/o Walkers SPV Limited, P.O. Box 908GT, 87 Mary Street, George Town, Grand Cayman, Cayman Islands, and (iii) Mr. Icahn is c/o Icahn Associates Corp., 767 Fifth Avenue, 47th Floor, New York, NY 10153.

Barberry is the sole member of Hopper, which is the general partner of High River. Icahn Offshore is the general partner of each of Icahn Master, Icahn Master II and Icahn Master III. Icahn Onshore is the general partner of Icahn Partners. Icahn Capital is the general partner of each of Icahn Offshore and Icahn Onshore. Icahn Enterprises Holdings is the sole member of IPH, which is the general partner of Icahn Capital. Beckton is the sole stockholder of Icahn Enterprises GP, which is the general partner of Icahn Enterprises Holdings. Carl C. Icahn is the sole stockholder of each of Barberry and Beckton. As such, Mr. Icahn is in a position indirectly to determine the investment and voting decisions made by each of the Reporting Persons. In addition, Mr. Icahn is the indirect holder of approximately 92.6% of the outstanding depositary units representing limited partnership interests in Icahn Enterprises L.P. (“Icahn Enterprises”). Icahn Enterprises GP is the general partner of Icahn Enterprises, which is the sole limited partner of Icahn Enterprises Holdings.

Each of High River and Barberry is primarily engaged in the business of investing in securities. Hopper is primarily engaged in the business of serving as the general partner of High River.  Each of Icahn Master, Icahn Master II, Icahn Master III and Icahn Partners is primarily engaged in the business of investing in securities. Icahn Offshore is primarily engaged in the business of serving as the general partner of each of Icahn Master, Icahn Master II and Icahn Master III. Icahn Onshore is primarily engaged in the business of serving as the general partner of Icahn Partners. Icahn Capital is primarily engaged in the business of serving as the general partner of each of Icahn Offshore and Icahn Onshore. IPH is primarily engaged in the business of serving as the general partner of Icahn Capital. Icahn Enterprises Holdings is primarily engaged in the business of holding direct or indirect interests in various operating businesses. Icahn Enterprises GP is primarily engaged in the business of serving as the general partner of each of Icahn Enterprises and Icahn Enterprises Holdings. Beckton is primarily engaged in the business of holding the capital stock of Icahn Enterprises GP.

Carl C. Icahn's present principal occupation or employment is serving as (i) Chief Executive Officer of Icahn Capital LP, a wholly owned subsidiary of Icahn Enterprises, through which Mr. Icahn manages various private investment funds, including Icahn Partners, Icahn Master, Icahn Master II and Icahn Master III, (ii) Chairman of the Board of Icahn Enterprises GP, the general partner of Icahn Enterprises, a New York Stock Exchange listed diversified holding company engaged in a variety of businesses, including investment management, metals, automotive, real estate, railcar, food packaging, casino gaming and home fashion, and (iii) Chairman of the Board and a director of Starfire Holding Corporation ("Starfire"), a holding company engaged in the business of investing in and/or holding securities of various entities, and as Chairman of the Board and a director of various of Starfire's subsidiaries.

The name, citizenship, present principal occupation or employment and business address of each director and executive officer of the Reporting Persons are set forth in Schedule A attached hereto.

None of the Reporting Persons nor any manager or executive officer of the Reporting Persons, has, during the past five years, (a) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (b) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting, or mandating activities subject to, Federal or State securities laws or a finding of any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration

The Reporting Persons hold, in the aggregate, 50,085,202 Shares. The aggregate purchase price of the Shares purchased by the Reporting Persons collectively was approximately $785.3 million (including commissions). The source of funding for the purchase of these Shares was the general working capital of the respective purchasers. The Shares are held by the Reporting Persons in margin accounts together with other securities. Such margin accounts may from time to time have debit balances. Part of the purchase price of the Shares purchased by the Reporting Persons was obtained through margin borrowing.  As of the close of business on May 24, 2012, the indebtedness of (i) High River’s margin account was approximately $1.9 million, (ii) Icahn Partners’ margin account was approximately $2.9 million, (iii) Icahn Master’s margin account was approximately $3.2 million, (iv) Icahn Master II’s margin account was approximately $1.1 million, and (v) Icahn Master III’s margin account was approximately $474 thousand.

Item 4.                      Purpose of Transaction

On May 25, 2012, the Reporting Persons delivered a letter to the board of directors of the Issuer (the “May 25 Letter”).  A copy of the May 25 Letter is being filed herewith as an exhibit hereto.  The foregoing description of the May 25 Letter is not complete, should be read together with, and is qualified in its entirety by reference to, the entire May 25 Letter, which has been filed herewith as an exhibit and is incorporated herein by reference.

The Reporting Persons may, from time to time and at any time, acquire additional Shares and/or other equity, debt, notes, instruments or other securities of the Issuer, or related to the securities of the Issuer (collectively, “Securities”), in the open market or otherwise.  They reserve the right to dispose of any or all of their Securities in the open market or otherwise, at any time and from time to time, and to engage in any hedging or similar transactions with respect to the Securities.

Item 5.                      Interest in Securities of the Issuer

(a) The Reporting Persons may be deemed to beneficially own, in the aggregate, 50,085,202 Shares, representing approximately 7.56% of the Issuer's outstanding Shares based upon the 662,343,738 Shares stated to be outstanding as of May 7, 2012 by the Issuer in the Issuer’s Form 10-Q filed with the Securities and Exchange Commission on May 11, 2012.

(b) High River has sole voting power and sole dispositive power with regard to 10,017,042 Shares.  Each of Hopper, Barberry and Mr. Icahn has shared voting power and shared dispositive power with regard to such Shares. Icahn Master has sole voting power and sole dispositive power with regard to 15,660,840 shares.  Each of Icahn Offshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn has shared voting power and shared dispositive power with regard to such Shares.  Icahn Master II has sole voting power and sole dispositive power with regard to 6,670,553 Shares.  Each of Icahn Offshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn has shared voting power and shared dispositive power with regard to such Shares. Icahn Master III has sole voting power and sole dispositive power with regard to 2,944,050 Shares. Each of Icahn Offshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn has shared voting power and shared dispositive power with regard to such Shares. Icahn Partners has sole voting power and sole dispositive power with regard to 14,792,717 Shares. Each of Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn has shared voting power and shared dispositive power with regard to such Shares.

Each of Hopper, Barberry and Mr. Icahn, by virtue of their relationships to High River (as disclosed in Item 2), may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Act) the Shares which High River directly beneficially owns. Each of Hopper, Barberry and Mr. Icahn disclaims beneficial ownership of such Shares for all other purposes.  Each of Icahn Offshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn, by virtue of their relationships to each of Icahn Master, Icahn Master II and Icahn Master III (as disclosed in Item 2), may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Act) the Shares which each of Icahn Master, Icahn Master II and Icahn Master III directly beneficially owns. Each of Icahn Offshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn disclaims beneficial ownership of such Shares for all other purposes. Each of Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn, by virtue of their relationships to Icahn Partners (as disclosed in Item 2), may be deemed to indirectly beneficially own (as that term is defined in Rule 13d-3 under the Act) the Shares which Icahn Partners directly beneficially owns. Each of Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn disclaims beneficial ownership of such Shares for all other purposes.

(c) The following table sets forth all transactions with respect to Shares effected during the past sixty (60) days by any of the Reporting Persons, inclusive of any transactions effected through 4:00 p.m., New York City time, on May 25, 2012. Except as otherwise noted below, all such transactions were purchases of Shares effected in the open market, and the table includes commissions paid in per share prices.

Name of Reporting Person
Date of Transaction
Amount of Securities
Price Per Share
 
High River LP
4/19/2012
200,000
18.03
High River LP
4/23/2012
567,498
17.64
High River LP
4/24/2012
232,502
17.90
High River LP
4/27/2012
252,556
17.56
High River LP
4/30/2012
157,366
17.68
High River LP
5/7/2012
9,216
16.75
High River LP
5/8/2012
117,480
16.73
High River LP
5/16/2012
1,720,000
14.60
High River LP
5/2/2012
1,781,775
17.22
High River LP
5/3/2012
503,326
17.10
High River LP
5/4/2012
289,802
17.37
High River LP
5/15/2012
600,000
14.60
High River LP
5/17/2012
180,000
13.60
High River LP
05/18/2012
1,126,879
14.12
High River LP
05/21/2012
404,063
14.67
High River LP
05/22/2012
183,790
14.74
High River LP
05/23/2012
1,054,729
14.53
High River LP
05/24/2012
636,060
14.82
       
Icahn Partners LP
4/19/2012
311,317
18.03
Icahn Partners LP
4/23/2012
883,358
17.64
Icahn Partners LP
4/24/2012
361,908
17.90
Icahn Partners LP
4/27/2012
393,124
17.56
Icahn Partners LP
4/30/2012
244,953
17.68
Icahn Partners LP
5/7/2012
13,610
16.75
Icahn Partners LP
5/8/2012
173,490
16.73
Icahn Partners LP
5/16/2012
2,540,018
14.60
Icahn Partners LP
5/2/2012
2,518,695
17.22
Icahn Partners LP
5/3/2012
743,289
17.10
Icahn Partners LP
5/4/2012
427,963
17.37
Icahn Partners LP
5/15/2012
886,054
14.60
Icahn Partners LP
5/17/2012
265,816
13.60
Icahn Partners LP
05/18/2012
1,664,125
14.12
Icahn Partners LP
05/21/2012
596,703
14.67
Icahn Partners LP
05/22/2012
271,412
14.74
Icahn Partners LP
05/23/2012
1,557,577
14.53
Icahn Partners LP
05/24/2012
939,305
14.82
       
Icahn Partners Master Fund LP
4/19/2012
325,759
18.03
Icahn Partners Master Fund LP
4/23/2012
924,337
17.64
Icahn Partners Master Fund LP
4/24/2012
378,698
17.90
Icahn Partners Master Fund LP
4/27/2012
411,361
17.56
Icahn Partners Master Fund LP
4/30/2012
256,316
17.68
Icahn Partners Master Fund LP
5/7/2012
14,407
16.75
Icahn Partners Master Fund LP
5/8/2012
183,671
16.73
Icahn Partners Master Fund LP
5/16/2012
2,689,083
14.60
Icahn Partners Master Fund LP
5/2/2012
2,693,489
17.22
Icahn Partners Master Fund LP
5/3/2012
786,910
17.10
Icahn Partners Master Fund LP
5/4/2012
453,082
17.37
Icahn Partners Master Fund LP
5/15/2012
938,053
14.60
Icahn Partners Master Fund LP
5/17/2012
281,415
13.60
Icahn Partners Master Fund LP
05/18/2012
1,761,785
14.12
Icahn Partners Master Fund LP
05/21/2012
631,720
14.67
Icahn Partners Master Fund LP
05/22/2012
287,340
14.74
Icahn Partners Master Fund LP
05/23/2012
1,648,984
14.53
Icahn Partners Master Fund LP
05/24/2012
994,430
14.82
       
Icahn Partners Master Fund II L.P.
4/19/2012
113,036
18.03
Icahn Partners Master Fund II L.P.
4/23/2012
320,738
17.64
Icahn Partners Master Fund II L.P.
4/24/2012
131,405
17.90
Icahn Partners Master Fund II L.P.
4/27/2012
142,739
17.56
Icahn Partners Master Fund II L.P.
4/30/2012
88,938
17.68
Icahn Partners Master Fund II L.P.
5/7/2012
6,136
16.75
Icahn Partners Master Fund II L.P.
5/8/2012
78,234
16.73
Icahn Partners Master Fund II L.P.
5/16/2012
1,145,384
14.60
Icahn Partners Master Fund II L.P.
5/2/2012
1,328,560
17.22
Icahn Partners Master Fund II L.P.
5/3/2012
335,174
17.10
Icahn Partners Master Fund II L.P.
5/4/2012
192,986
17.37
Icahn Partners Master Fund II L.P.
5/15/2012
399,551
14.60
Icahn Partners Master Fund II L.P.
5/17/2012
119,866
13.60
Icahn Partners Master Fund II L.P.
05/18/2012
750,413
14.12
Icahn Partners Master Fund II L.P.
05/21/2012
269,072
14.67
Icahn Partners Master Fund II L.P.
05/22/2012
122,390
14.74
Icahn Partners Master Fund II L.P.
05/24/2012
423,564
14.82
       
Icahn Partners Master Fund III L.P.
4/19/2012
49,888
18.03
Icahn Partners Master Fund III L.P.
4/23/2012
141,560
17.64
Icahn Partners Master Fund III L.P.
4/24/2012
57,996
17.90
Icahn Partners Master Fund III L.P.
4/27/2012
62,998
17.56
Icahn Partners Master Fund III L.P.
4/30/2012
39,255
17.68
Icahn Partners Master Fund III L.P.
5/7/2012
2,709
16.75
Icahn Partners Master Fund III L.P.
5/8/2012
34,527
16.73
Icahn Partners Master Fund III L.P.
5/16/2012
505,515
14.60
Icahn Partners Master Fund III L.P.
5/2/2012
586,356
17.22
Icahn Partners Master Fund III L.P.
5/3/2012
147,929
17.10
Icahn Partners Master Fund III L.P.
5/4/2012
85,175
17.37
Icahn Partners Master Fund III L.P.
5/15/2012
176,342
14.60
Icahn Partners Master Fund III L.P.
5/17/2012
52,903
13.60
Icahn Partners Master Fund III L.P.
05/18/2012
331,194
14.12
Icahn Partners Master Fund III L.P.
05/21/2012
118,757
14.67
Icahn Partners Master Fund III L.P.
05/22/2012
54,018
14.74
Icahn Partners Master Fund III L.P.
05/23/2012
309,988
14.53
Icahn Partners Master Fund III L.P.
05/24/2012
186,940
14.82
       
       


Item 6.                      Contracts, Arrangements, Understandings or Relationship with Respect to Securities of the Issuer


Except as otherwise described herein, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.

Item 7.                      Material to be Filed as Exhibits

1           Joint Filing Agreement of the Reporting Persons.
2           May 25 Letter

 
 
 

SIGNATURE

After reasonable inquiry and to the best of each of the undersigned knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: May 25, 2012


ICAHN PARTNERS MASTER FUND LP
ICAHN PARTNERS MASTER FUND II LP
ICAHN PARTNERS MASTER FUND III LP
ICAHN OFFSHORE LP
ICAHN PARTNERS LP
ICAHN ONSHORE LP
BECKTON CORP.
HOPPER INVESTMENTS LLC
BARBERRY CORP.
HIGH RIVER LIMITED PARTNERSHIP
By: Hopper Investments LLC, general partner


By:           /s/ Edward E. Mattner
Name: Edward E. Mattner
Title: Authorized Signatory


ICAHN CAPITAL LP
IPH GP LLC
ICAHN ENTERPRISES HOLDINGS L.P.
By: Icahn Enterprises G.P. Inc., its general partner
ICAHN ENTERPRISES G.P. INC.


By:           /s/ SungHwan Cho
Name: SungHwan Cho
Title: Chief Financial Officer








/s/ Carl C. Icahn_____________
CARL C. ICAHN






[Signature Page of Schedule 13D – Chesapeake Energy Corporation]
 
 
 
 
EXHIBIT 1
JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the Common Stock of Chesapeake Energy Corporation and further agree that this Joint Filing Agreement be included as an Exhibit to such joint filings. In evidence thereof, the undersigned, being duly authorized, have executed this Joint Filing Agreement this 25th day of May, 2012.



ICAHN PARTNERS MASTER FUND LP
ICAHN PARTNERS MASTER FUND II LP
ICAHN PARTNERS MASTER FUND III LP
ICAHN OFFSHORE LP
ICAHN PARTNERS LP
ICAHN ONSHORE LP
BECKTON CORP.
HOPPER INVESTMENTS LLC
BARBERRY CORP.
HIGH RIVER LIMITED PARTNERSHIP
By: Hopper Investments LLC, general partner


By:           /s/ Edward E. Mattner
Name: Edward E. Mattner
Title: Authorized Signatory


ICAHN CAPITAL LP
IPH GP LLC
ICAHN ENTERPRISES HOLDINGS L.P.
By: Icahn Enterprises G.P. Inc., its general partner
ICAHN ENTERPRISES G.P. INC.


By:           /s/ SungHwan Cho
Name: SungHwan Cho
Title: Chief Financial Officer


 
 




/s/ Carl C. Icahn_____________
CARL C. ICAHN







[Signature Page of Joint Filing Agreement to
Schedule 13D – Chesapeake Energy Corporation]
 
 
 
 
 
SCHEDULE A

DIRECTORS AND EXECUTIVE OFFICERS OF THE REPORTING PERSONS

The following sets forth the name, position, and principal occupation of each director and executive officer of each of the Reporting Persons. Each such person is a citizen of the United States of America. Except as otherwise indicated, the business address of each director and officer is c/o Icahn Associates Corp., 767 Fifth Avenue, 47th Floor, New York, New York 10153. To the best of the Reporting Persons' knowledge, except as set forth in this statement on Schedule 13D, none of the directors or executive officers of the Reporting Persons own any Shares.

ICAHN PARTNERS MASTER FUND LP
ICAHN PARTNERS MASTER FUND II LP
ICAHN PARTNERS MASTER FUND III LP
Name                                           Position
Icahn Offshore LP                     General Partner
Carl C. Icahn                              Chief Executive Officer
Vincent J. Intrieri                       Senior Managing Director
Irene March                               Chief Financial Officer
Edward E. Mattner                    Authorized Signatory
Gail Golden                                Authorized Signatory
Keith Cozza                                Chief Compliance Officer

ICAHN PARTNERS LP
Name                                           Position
Icahn Offshore LP                     General Partner
Carl C. Icahn                              Chief Executive Officer
Vincent J. Intrieri                       Senior Managing Director
Irene March                               Chief Financial Officer
Edward E. Mattner                    Authorized Signatory
Gail Golden                                Authorized Signatory
Keith Cozza                                Chief Compliance Officer

ICAHN ONSHORE LP
ICAHN OFFSHORE LP
Name                                           Position
Icahn Capital LP                        General Partner
Carl C. Icahn                              Chief Executive Officer
Vincent J. Intrieri                       Senior Managing Director
Irene March                               Chief Financial Officer
Edward E. Mattner                    Authorized Signatory
Gail Golden                                 Authorized Signatory
Keith Cozza                                 Chief Compliance Officer

ICAHN CAPITAL LP
Name                                           Position
IPH GP LLC                                General Partner
Carl C. Icahn                              Chief Executive Officer
Daniel A. Ninivaggi                  President
Vincent J. Intrieri                       Senior Managing Director
SungHwan Cho                        Chief Financial Officer
Peter Reck                                  Chief Accounting Officer
Edward E. Mattner                   Authorized Signatory
Gail Golden                               Authorized Signatory
Keith Cozza                              Chief Compliance Officer

IPH GP LLC
Name                                           Position
Icahn Enterprises                      Sole Member
Holdings L.P.
Carl C. Icahn                               Chief Executive Officer
Vincent J. Intrieri                       Senior Managing Director
Daniel A. Ninivaggi                  President
SungHwan Cho                         Chief Financial Officer
Edward E. Mattner                    Authorized Signatory
Gail Golden                                Authorized Signatory
Keith Cozza                                Chief Compliance Officer

ICAHN ENTERPRISES HOLDINGS L.P.
Name                                           Position
Icahn Enterprises                                           General Partner
G.P. Inc.

ICAHN ENTERPRISES G.P. INC.
Name                                           Position
 
Carl C. Icahn
Chairman
 
Daniel A. Ninivaggi
President; Director
 
William A. Leidesdorf
Director
 
Jack G. Wasserman
Director
 
James L. Nelson
Director
 
Vincent J. Intrieri
Director, Assistant Secretary
 
SungHwan Cho
Chief Financial Officer
 
Peter Reck
Principal Accounting Officer
Craig Pettit                                  Vice President/Taxes

BECKTON CORP.
Name                                           Position
Carl C. Icahn                               Chairman of the Board; President
Jordan Bleznick                          Vice President/Taxes
Edward E. Mattner                    Authorized Signatory
Keith Cozza                                 Secretary; Treasurer

HIGH RIVER LIMITED PARTNERSHIP
Name                                           Position
Hopper Investments LLC         General Partner

HOPPER INVESTMENTS LLC
Name                                           Position
Barberry Corp                           General Partner
Edward E. Mattner                   Authorized Signatory


BARBERRY CORP.
Name                                           Position
Carl C. Icahn                             Chairman of the Board; President
Gail Golden                               Vice President; Authorized Signatory
Jordan Bleznick                        Vice President/Taxes
Vincent J. Intrieri                      Vice President; Authorized Signatory
Irene March                              Authorized Signatory
Edward E. Mattner                   Authorized Signatory
Keith Cozza                               Secretary; Treasurer
 EX-1 2 chkex052512.htm chkex052512.htm
CARL C. ICAHN
767 Fifth Avenue, 47th Floor
New York, New York 10153

 
May 25, 2012
 
Via Federal Express and Email
 
Board of Directors
Chesapeake Energy Corporation
6100 North Western Avenue
Oklahoma City, Oklahoma 73118


Ladies and Gentlemen:
 
The past several weeks have proved a difficult time for shareholders of Chesapeake Energy.  The basic function of a board is to oversee management and to hold it accountable.  We believe the board has failed this duty in a dramatic fashion.  Rather than act as a source of stability and provide assurance to shareholders, this board has led the company through a highly publicized spate of corporate governance breakdowns while amassing an astounding $16 billion funding gap, which we believe has contributed to the share price decline of over 55% from the 52-week high.
 
We are not alone in criticizing this board.  Shareholders have filed lawsuits, withhold campaigns and have otherwise voiced disapproval and all three major proxy advisory firms (i.e., ISS, Glass, Lewis and Egan-Jones) have advised shareholders to withhold votes from directors at the 2012 annual meeting.  Chesapeake shareholders will benefit neither from a constant stream of negative news reflecting upon the companies troubled past, nor from a half hearted attempt by the board to make the minimum possible number of changes to skate by for one more year.  The board must not only find a way to eliminate the enormous funding gap, but also the more substantial creditability gap.
 
We recently had dinner with Aubrey McClendon to suggest a manner by which that credibility gap might be filled.  The company has publicly identified several actions including reduced spending and asset sales which will relieve some of the funding gap, yet the board still seems to miss the point.  We believe that a management team and a business plan without strong oversight and accountability is doomed to fail.  Accordingly, at that dinner we asked Aubrey to consider direct shareholder representation on the board. The next day we were informed that the board refused to even consider this request prior to the selection of a chairman of their choosing.  We believe that this response was completely disingenuous and illogical.  Why is appointing a new chairman, sometime out in the future, an excuse for putting off considering whether to have shareholders, the true owners of the company, have immediate representation on this very flawed board in this very fluid situation?
 
The board has recently announced that it is going to select a new Chairman and separate the Chairmanship and CEO roles. While this is certainly a step in the right direction, appointing a new Chairman in the manner that Chesapeake is doing, does not exactly elevate corporate governance to the “gold standard” as the board would have shareholders believe, instead it is woefully inadequate in both process and substance. Having the current board select a new chairman without shareholder approval and without allowing for shareholder representation is akin to asking the fox, who has plundered the hen house, to choose another fox to assist it in standing guard over the remaining hens.
 
To engender any meaningful credibility among shareholders, corporate governance reforms cannot, in our view, be led by directors whose irresponsible actions have brought this company to the edge of the proverbial cliff.  Accordingly, we propose that at least 4 of the current directors (other than Louis Simpson) should be immediately replaced by two persons designated by us and two persons designated by another large shareholder such as Southeastern Asset Management, the company’s largest shareholder.  In our opinion, only when these changes are effectuated will the board be truly independent and more importantly will investors come to believe that promises made will be promises kept; when a capital plan is agreed upon it will be maintained, not diverged from as it has in the past.
 
We believe that shareholder representation on boards, even in a minority capacity, is an extremely powerful tool to instill accountability in a company.  This has proven to be the case in numerous companies on which we had minority board representation, including Motorola, Biogen, Genzyme, and Hain Celestial to name a few.  Moreover, as my past record has demonstrated, I work assiduously to increase the value of stocks in which my companies have invested, which has led to gains of billions of dollars for ALL shareholders, not just my firm. Over the last few years, our actions have led to an increase in aggregate market value of approximately $55 billion for shareholders at well over a dozen companies where we have played an activist role. These companies had a market value of under $20 billion when we first invested.  We would like the opportunity to do the same at Chesapeake.
 
We believe that Chesapeake has collected some of the best oil and gas assets in the world.  However, we believe that the low stock price today does not reflect the value of those assets; rather the stock price suffers because of the enormous risk associated with an ever changing business strategy, enormous capital funding gap, poor governance, and unchecked risk taking.  While the company has recently recognized that their strategy of exponential capital expenditure growth is not sustainable, they still seem unable to distinguish between having cash in the bank as opposed to the projected proceeds of a series of ever more complicated and risky on and off balance sheet financial transactions and the hope of higher commodity prices.  Now is the time for Chesapeake to focus only on what is important.  What is important is that this pernicious funding gap, which we believe this board has created, must be filled. The board must bite the bullet, come up with a realistic plan and stick to it. In our opinion, shareholder representation, especially on this board, is needed to make this happen. A new chairman alone, appointed by this board, will not accomplish this objective.
 
As I am sure you are aware, this is not our first investment in Chesapeake stock.  In late 2010, we acquired a substantial position in the company and met with management at that time to discuss the maximization of shareholder value.  In part, we believe, due to our presence, the company sold non-core assets, closed their funding gap and announced that they were through spending money on land.   Shareholders rewarded the company for this newfound responsibility, and the stock rallied.  However, without shareholder representatives on the board (a major concern for us at the time) the promises made in 2010 proved hollow, and the company quickly abandoned their new strategy and not only accelerated land acquisitions but also capital spending on non-core assets.  Recognizing this fundamental problem with the board, we sold our position.  That decision turned out to be particularly prescient.  The company’s stock price has plummeted by nearly 60% since that time and the board has watched the current events unfold without, in our opinion, any attempts to demand accountability.  Now more than ever, the company needs the stewardship of a strong board – a board that can instill confidence in the shareholder base and restore accountability and credibility.  If our suggested changes are not made at the board level immediately, we fear the company will be severely hamstrung in its attempt to regain its footing.  It seems to us that the board has been quick to insulate themselves from accountability to shareholders and has expressed no interest in demanding accountability from management.  A new plan and good intentions are insufficient to close the gap between asset value and stock price.  We must have a board whose primary concern is enhancing the value of shareholders, a board that has the strength to hold management accountable, and the willingness to be held accountable themselves.  In our view, only a board that has these attributes can enhance the value of this company.
 
We, as one of your largest shareholders, wish only the best for this great company and do not wish to bring about any additional distractions, however, we believe that without a strong board to demand accountability there is a significant chance that the value destruction shareholders have seen in the past few weeks may become irreparable.  We cannot stand idly by and allow this to happen. Therefore, if you continue to arbitrarily refuse the request we have made for shareholder representation, we, as activists, will immediately take whatever “actions” we feel are necessary to protect the value of this company.  As you are well aware, this is an extremely time sensitive issue, especially in light of the fact that you have refused to postpone the meeting that is coming up shortly. Therefore, we hope and expect to hear from you in the next few days.
 
Very truly yours,
                   /s/
Carl C. Icahn