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Exhibit
10.2.6
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
between
[Executive]
and
CHESAPEAKE ENERGY
CORPORATION
Effective [-]
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
THIS AGREEMENT is made
effective [date], between CHESAPEAKE ENERGY CORPORATION, an
Oklahoma corporation (the “Company”), and [Executive],
an individual (the “Executive”).
W I T N E S S E T
H:
WHEREAS, the Company and the
Executive entered into that certain Employment Agreement dated
[date of prior agreement] (the “Prior Agreement”);
and
WHEREAS, the Company and the
Executive desire to amend and restate the Prior Agreement in its
entirety to reflect the foregoing and other changes to the
arrangement between the Company and the Executive
NOW, THEREFORE, in
consideration of the mutual promises herein contained, the Company
and the Executive agree as follows:
1. Employment . The Company
hereby employs the Executive and the Executive hereby accepts such
employment subject to the terms and conditions contained in this
Agreement. The Executive is engaged as an Executive of the Company,
and the Executive and the Company do not intend to create a joint
venture, partnership or other relationship which might impose a
fiduciary obligation on the Executive or the Company in the
performance of this Agreement.
2. Executive’s Duties . The
Executive is employed on a full-time basis. Throughout the term of
this Agreement, the Executive will use the Executive’s best
efforts and due diligence to assist the Company in achieving the
most profitable operation of the Company and the Company’s
affiliated entities consistent with developing and maintaining a
quality business operation. The Executive shall also devote all of
Executive’s working time, attention and energies to the
performance of Executive’s duties and responsibilities under
this Agreement.
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2.1 |
Specific Duties . The Executive will serve as the Senior
Vice President for the Company, and in such positions as are
mutually agreed upon by the parties. The Executive shall perform
all of the duties required to fully and faithfully execute the
office and position to which the Executive is appointed, and such
other duties as may be reasonably requested by the
Executive’s supervisor. During the term of this Agreement,
the Executive may be nominated for election or appointed to serve
as a director or officer of any of the Company’s affiliated
entities as determined in such affiliates’ Board of
Directors’ sole discretion. The services of the Executive
will be requested and directed by [name and title of
supervisor]. |
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2.2 |
Rules and Regulations. The Company currently has an
Employment Policies Manual which sets forth the general human
resources policies of the Company and addresses frequently asked
questions regarding the Company. The Executive agrees to comply
with the Employment Policies Manual except to the extent
inconsistent with this Agreement. The Employment Policies Manual is
subject to change without notice in the sole discretion of the
Company at any time. |
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2.3 |
Stock Investment. The Executive agrees to hold not less
than ten thousand (10,000) shares of the Company’s
common stock at all times after [date] and prior to termination of
the Agreement, exclusive of shares held by the Executive in the
Company’s retirement plans. |
3. Other Activities . Except as
provided in this Agreement or approved by the Company’s Board
in writing, the Executive agrees not to: (a) engage in other
business activities independent of the Company; (b) serve as a
general partner, officer, Executive, director or member of any
corporation, partnership, company or firm; or (c) directly or
indirectly invest, participate or engage in the Oil and Gas
Business. For purposes of this Agreement the term “Oil and
Gas Business” means: (i) producing oil and gas;
(ii) drilling, owning or operating an interest in oil and gas
leases or wells; (iii) providing material or services to the
Oil and Gas Business; (iv) refining, processing or marketing
oil or gas; or (v) owning an interest in or assisting any
corporation, partnership, company, entity or person in any of the
foregoing. The foregoing will not prohibit: (w) ownership of
publicly traded securities; (x) ownership of royalty interests
where the Executive owns the surface of the land covered by the
royalty interest and the ownership of the royalty interest is
incidental to the ownership of such surface estate;
(y) ownership of royalty interests, overriding royalty
interests, working interests or other interests in oil and gas
owned prior to the Executive’s date of first employment with
the company and disclosed to the Company in writing; or
(z) ownership of royalty interests, overriding royalty
interests, working interests or other interests in oil and gas
acquired by the Executive through a bona fide gift or inheritance
subject to disclosure by Executive to the Company in
writing.
4. Executive’s Compensation
. The Company agrees to compensate the Executive as
follows:
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4.1 |
Base Salary . A base salary (the “Base
Salary”), at the initial annual rate of not less than [dollar
value] will be paid to the Executive in regular installments in
accordance with the Company’s designated payroll
schedule. |
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4.2 |
Bonus
. In addition to the Base Salary described at paragraph 4.1 of this
Agreement, the Company may periodically pay bonus compensation to
the Executive. Any bonus compensation is subject to the requirement
that the Executive be employed on such bonus payment date(s)
selected by the Company and will be at the absolute discretion of
the Company in
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such amounts and at such
times as the Board of Directors of the Company may
determine.
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4.3 |
Equity Compensation . In addition to the compensation
set forth in paragraphs 4.1 and 4.2 of this Agreement, the
Executive may periodically receive grants of Chesapeake Energy
Corporation (“CHK”) restricted stock or other awards
from the Company’s various equity compensation plans, subject
to the terms and conditions thereof. |
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4.4 |
Benefits . The Company will provide the Executive such
retirement benefits, reimbursement of reasonable expenditures for
dues, travel and entertainment and such other benefits as are
customarily provided by the Company and as are set forth in and
governed by the Company’s Employment Policies Manual. The
Company will also provide the Executive the opportunity to apply
for coverage under the Company’s medical, life and disability
plans, if any. If the Executive is accepted for coverage under such
plans, the Company will make such coverage available to the
Executive on the same terms as is customarily provided by the
Company to the plan participants as modified from time to time. The
Executive is subject to all of the terms and provisions of the
Company’s benefit plans or policies. The following specific
benefits will also be provided to the Executive at the expense of
the Company: |
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4.4.1 |
Vacation . The Executive will be entitled to take four
(4) weeks of paid vacation annually, calculated from the
Executive’s anniversary date, during the term of this
Agreement. No additional compensation will be paid for failure to
take vacation and no vacation may be carried forward from one
twelve (12) month period to another. |
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4.4.2 |
Membership Dues. The Company will reimburse the
Executive for: (a) the monthly dues necessary to maintain a
full membership in a club in the Oklahoma City area selected by the
Executive in an amount not to exceed Seven Hundred Fifty Dollars
($750.00) per month; and (b) the reasonable cost of any
approved business entertainment at such club. All other costs,
including, without implied limitation, any initiation costs,
initial membership costs, personal use and business entertainment
unrelated to the Company will be the sole obligation of the
Executive and the Company will have no liability with respect to
such amounts. |
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4.5 |
Change of
Control Payment . If, during the term of this Agreement, there
is a “Change of Control,” as defined below, the
Executive will be entitled to a lump sum payment (in addition to
any other amounts payable to the Executive under this Agreement or
otherwise) in an
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amount equal to two
hundred percent (200%) of the sum of; (a) the
Executive’s then current Base Salary under paragraph 4.1 of
this Agreement and (b) the actual bonuses paid to the
Executive during the twelve (12) calendar months preceding the
Change of Control under paragraph 4.2 of this Agreement or its
predecessor. Additionally, all Equity Compensation granted to
Executive under Section 4.3 of this Agreement shall be
immediately vested upon the occurrence of such a Change of Control.
If the Executive’s employment is terminated as a result of
the Change of Control and the Executive is a “specified
employee” as defined in regulations under Section 409A
of the Internal Revenue Code, such payment will commence on the
first payroll payment date which is not less than six
(6) months following the Termination Date. The right to such
compensation is subject to the Executive’s continued
compliance with each of the provisions of this Agreement. If the
foregoing amount is not paid to the Executive within thirty
(30) days after the Change of Control, or following the date
for which Executive is eligible for payment if a “specified
employee”, the unpaid amount will bear interest at the per
annum rate equal to twelve percent (12%) (the provision for
such interest is not intended to, and shall not be construed as
altering the Company’s obligation to pay, and the
Executive’s right to receive, such payment within thirty
(30) days after a Change of Control). For the purpose of this
Agreement, a “Change of Control” means the occurrence
of any of the following:
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(a) the acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of thirty
percent (30%) or more of either (i) the then outstanding
shares of common CHK stock (the “Outstanding CHK Common
Stock”) or (ii) the combined voting power of the then
outstanding voting securities of CHK entitled to vote generally in
the election of directors (the “Outstanding CHK Voting
Securities”). For purposes of this paragraph, the following
acquisitions by a Person will not constitute a Change of Control:
(i) any acquisition directly from CHK; (ii) any
acquisition by CHK; (iii) any acquisition by or sponsored by
Mr. Aubrey K. McClendon; (iv) any acquisition by any
Executive benefit plan (or related trust) sponsored or maintained
by CHK or any corporation controlled by CHK; or (v) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of
paragraph (c) below;
(b) the individuals who, as
of June 15, 2006, constitute the Board of Directors (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board of Directors. Any individual
becoming a director subsequent to the date hereof whose election,
or nomination
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for election by CHK’s
shareholders, is approved by a vote of at least a majority of the
directors then comprising the Incumbent Board will be considered a
member of the Incumbent Board as of the date hereof, but any such
individual whose initial assumption of office occurs as a result of
an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Incumbent Board will not be deemed a member of the
Incumbent Board as of the date hereof;
(c) the consummation of a
reorganization, merger, consolidation or sale or other disposition
of all or substantially all of the assets of CHK (a “Business
Combination”), unless following such Business Combination:
(i) all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding
CHK Common Stock and Outstanding CHK Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than sixty percent (60%) of, respectively,
the then outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such
transaction owns CHK or all or substantially all of the CHK’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding CHK Common
Stock and Outstanding CHK Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such
Business Combination or any Executive benefit plan (or related
trust) of CHK or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, thirty
percent (30%) or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the
extent that such ownership existed prior to the Business
Combination and (iii) at least a majority of the members of
the Board of Directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of
the Incumbent Board, providing for such Business Combination;
or,
(d) the approval by the
shareholders of CHK of a complete liquidation or dissolution of
CHK.
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5. Term . The employment
relationship evidenced by this Agreement is an “at
will” employment relationship and the Company reserves the
right to terminate the Executive at any time with or without cause
as provided herein. In the absence of such termination, this
Agreement will extend for a term of three (3) years commencing
on [date of agreement] and ending on [expiration date] (the
“Expiration Date”).
6. Termination . This Agreement
will continue in effect until the expiration of the term stated at
paragraph 5 of this Agreement unless earlier terminated pursuant to
this paragraph 6.
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6.1 |
Termination by Company . The Company |
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