Corvex Settles with Energen Corp

Purpose of Transaction On March 6, 2018, Corvex and the Issuer entered into a Letter Agreement (the “Letter Agreement”). Pursuant to the terms of the Letter Agreement, the Issuer agreed as follows: (i) concurrently with the execution of the Letter Agreement, the Board shall expand the size of the Board from nine to 11 members and not increase the size of the Board beyond 11 members at any time prior to the Issuer’s 2019 annual meeting of shareholders (the “2019 Annual Meeting”) and (ii) appoint Jonathan Z. Cohen and Vincent J. Intrieri (the “New Directors”) as members of the Board to fill the two vacancies created by the Board expansion, each with terms to expire at the Issuer’s 2018 annual meeting of shareholders (the “2018 Annual Meeting”).

In addition, the Issuer agreed to include the New Directors in the slate of nominees recommended by the Board in the proxy statement and proxy card relating to the 2018 Annual Meeting, with Mr. Cohen nominated to serve in the class of directors with terms expiring at the Issuer’s 2021 annual meeting of shareholders (the “2021 Annual Meeting”) and Mr. Intrieri nominated to serve in the class of directors with terms expiring at the Issuer’s 2020 annual meeting of shareholders (the “2020 Annual Meeting”), and the Issuer shall recommend that the Issuer’s shareholders vote for the election of the New Directors.

Further, the Issuer agreed that four directors will stand for election at the 2019 Annual Meeting, four directors will stand for election at the 2020 Annual Meeting, three directors will stand for election at the 2021 Annual Meeting and, other than as set forth in the Letter Agreement, the Issuer will not change or seek to change the classes on which the directors (or their replacements) serve. The Issuer also agreed to hold the 2018 Annual Meeting no later than May 31, 2018.

Pursuant to the Letter Agreement, as long as Corvex continues to beneficially own 5% or more of the Issuer’s outstanding Shares, if there is a vacancy or vacancies on the Board, for any reason, as a result of the removal or resignation of one or both of the New Directors or any other event resulting in one or both of the New Directors no longer being a director prior to the Issuer’s mailing of definitive proxy materials with respect to the 2019 Annual Meeting, then, provided José Maria Alapont satisfies applicable director criteria at the time, Corvex will be entitled to designate him to fill such vacancy, or if Mr. Alapont is no longer able or willing to serve as a director, Corvex may designate another individual or two other individuals reasonably acceptable to the Issuer if there are two vacancies to replace the New Director or New Directors.

In addition, the Issuer agreed that the New Directors will each be added to one or more committees of the Board and if any new committees or subcommittees of the Board are formed, the Board shall offer membership on such committee or subcommittee to the New Directors. Corvex agreed in the Letter Agreement to the following: (i) to cause all Shares owned of record or beneficially by it and its affiliates to be present for quorum purposes at the 2018 Annual Meeting, and (ii) to vote such Shares at the 2018 Annual Meeting in favor of each director candidate nominated by the Issuer, in favor of the ratification of the appointment of PricewaterhouseCoopers LLP as the Issuer’s independent registered public accounting firm to audit the Issuer’s financial statements for calendar year 2018, and in favor of any “say-on-pay” proposal. In addition, Corvex agreed to promptly cause the appeal captioned Corvex Management LP, Appellant, v. Energen Corporation, Appellee, docket No. 1170200, pending before the Supreme Court of Alabama to be voluntarily dismissed with prejudice.

Further, Corvex agreed concurrently with the execution of the Letter Agreement to cause Corvex Master Fund LP to withdraw the Notice of Intent to Bring Business Before, and Nominate Individuals for Election as Directors at, the 2018 Annual Meeting of Stockholders of Energen Corporation submitted by Corvex Master Fund LP to the Issuer on January 31, 2018. The foregoing description of the Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Letter Agreement, which is incorporated by reference as Exhibit 13 and is incorporated herein by reference. On March 6, 2018, Messrs. Cohen and Intrieri were appointed to the Board in connection with the Letter Agreement. Mr. Cohen was appointed to the Board’s Compensation Committee and Mr. Intrieri was appointed to the Board’s Audit Committee. On March 7, 2018, Corvex and the Issuer jointly issued a press release to announce that they have entered into the Letter Agreement. The Reporting Persons intend to review their investment in the Issuer on a continuing basis and may from time to time and at any time in the future depending on various factors, including, without limitation, the Issuer’s financial position and strategic direction, actions taken by the Board, price levels of the Shares, other investment opportunities available to the Reporting Persons, conditions in the securities market and general economic and industry conditions, take such actions with respect to their investments in the Issuer as they deem appropriate, which may include further discussions with the Issuer regarding matters previously disclosed in this Schedule 13D, as well as seeking direct discussions with, and changes or additions to, the Board. These actions may include, without limitation: (i) acquiring additional Shares and/or other equity, debt, notes, other securities, or derivative or other instruments that are convertible into Shares, or are based upon or relate to the value of the Shares or the Issuer (collectively, “Securities”) in the open market or otherwise; (ii) disposing of any or all of their Securities in the open market or otherwise; (iii) engaging in any hedging or similar transactions with respect to the Securities; or (iv) proposing or considering one or more of the actions described in subsections (a) through (j) of Item 4 of Schedule 13D.

Link: https://www.sec.gov/Archives/edgar/data/277595/000119312518073762/0001193125-18-073762-index.htm


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