Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Directors
On September 11, 2020, Kenneth F. Owen, David J. Schulte, and Lisa A. Stewart
were appointed to the Board of Directors (the "Board") of Western Midstream
Holdings, LLC ("WES GP"), the general partner of Western Midstream Partners, LP
("WES"), effective immediately. Western Midstream Operating GP, LLC (the
"General Partner"), the general partner of Western Midstream Operating, LP (the
"Partnership") is a wholly owned subsidiary of WES. Each of Mr. Owen, Mr.
Schulte, and Ms. Stewart was appointed to serve on both the Audit Committee and
the Special Committee of the Board. Mr. Owen will serve as the Chairman of the
Audit Committee and Mr. Schulte will serve as the Chairman of the Special
Committee.
The Board has determined that each of Mr. Owen, Mr. Schulte, and Ms. Stewart
qualifies as an independent director under the applicable listing standards of
the New York Stock Exchange and the Securities Exchange Act of 1934. Messrs.
Owen's and Schulte's and Ms. Stewart's compensation as members of the Board will
be consistent with the compensation of other non-employee members of the Board,
which is described under the section titled "Executive Compensation-Director
Compensation" of WES's Annual Report on Form 10-K filed with the SEC on February
27, 2020 (the "2019 10-K"), except that their 2020 compensation will be prorated
for the term of each of their service.
There are no arrangements or understandings between each of Mr. Owen, Mr.
Schulte, or Ms. Stewart and any other person pursuant to which each of them was
selected to be a director. There are no related person transactions regarding
Mr. Owen, Mr. Schulte, or Ms. Stewart that require disclosure under Item 404(a)
of Regulation S-K.
Each of Mr. Owen, Mr. Schulte, and Ms. Stewart will have rights to
indemnification by WES and WES GP pursuant to the organizational documents of
WES and WES GP, and an Indemnification Agreement, the form of which has been
previously filed by WES.
Departure of Directors
On September 11, 2020, Mr. Steven D. Arnold, Mr. James R. Crane, Mr. Thomas R.
Hix, Mr. Craig W. Stewart, Mr. David J. Tudor, and Ms. Marcia E. Backus were
succeeded on the Board by Mr. Owen, Mr. Schulte, and Ms. Stewart. Messrs. Hix,
Arnold, and Tudor each served on the Audit Committee, and Messrs. Crane,
Stewart, and Tudor each served on the Special Committee. None of the departures
of Messrs. Arnold, Crane, Hix, Stewart, Tudor, or Ms. Backus were a result of
any disagreement with WES regarding any matter related to its operations,
policies, or practices. Following the appointments of Mr. Owen, Mr. Schulte, and
Ms. Stewart to the Board and the departures of Messrs. Arnold, Crane, Hix,
Stewart, Tudor, and Ms. Backus, the size of the Board is eight (8) directors.
Departure of Chief Financial Officer
On September 11, 2020, WES announced that Mr. Michael C. Pearl, Senior Vice
President and Chief Financial Officer of WES GP, will be leaving WES GP. Mr.
Pearl's departure was not the result of any disagreement with WES regarding any
matter related to its operations, policies, or practices. In connection with his
departure, Mr. Pearl will receive retention payments and benefits consistent
with those described under the section titled "Executive Compensation-Potential
Payments Upon Termination or Change of Control" of the 2019 10-K. Also in
connection with his departure, Mr. Pearl is leaving his officer roles with WES's
subsidiaries, including the General Partner.
On September 11, 2020, the Board determined that Michael P. Ure, the President
and Chief Executive Officer of WES GP, would assume Mr. Pearl's duties and
responsibilities on an interim basis. Mr. Ure will also serve as Chief Financial
Officer for the General Partner on an interim basis. In addition to continuing
to serve as President and Chief Executive Officer, Mr. Ure will serve as
principal financial officer of WES and the Partnership until a successor is
identified. Mr. Ure's assumption of this interim role was not pursuant to any
arrangement or understanding between him and any other person and Mr. Ure will
not receive any additional compensation for his additional responsibilities.
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Item 8.01. Other Events.
On September 11, 2020 (the "Effective Date"), WES and Anadarko Petroleum
Corporation ("Anadarko"), a wholly owned subsidiary of Occidental Petroleum
Corporation, entered into a Unit Redemption Agreement (the "Agreement").
Pursuant to the terms of the Agreement, which was approved by each of the
Special Committee (comprised of Messrs. Crane, Stewart, and Tudor) and the full
Board (comprised of the directors on the Board prior to the changes described in
Item 5.02 of this Current Report on Form 8-K), on the Effective Date, WES
redeemed and retired approximately 27.9 million common units representing
limited partner interests in WES that were held by Anadarko in exchange for WES
transferring and assigning its 98% interest in that certain $260 million 6.5%
Fixed Rate Note due 2038 that was issued by Anadarko to the Partnership (the
"Note"). On the Effective Date, Anadarko canceled and retired such portion of
the Note and the principal and accrued interest owed thereunder.
The foregoing description of the Agreement is qualified in its entirety by
reference to the Agreement, a copy of which is filed as Exhibit 10.1 hereto and
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number Description
10.1 Unit Redemption Agreement, dated September 11, 2020, by and between
Western Midstream Partners, LP and Anadarko Petroleum Corporation.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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