Exhibit
10.1.14
CHESAPEAKE ENERGY
CORPORATION
AMENDED AND RESTATED LONG TERM
INCENTIVE PLAN
Section 1.1
Background
. The original Long Term
Incentive Plan was approved by shareholders on June 10, 2005, and
amendments to the Plan were approved by shareholders on June 9,
2006, June 8, 2007, June 6, 2008 and June 12, 2009.
Section 1.2
Purpose. This Long Term Incentive Plan is
established by Chesapeake Energy Corporation (the
“Company”) to foster and promote the sustained
progress, growth and profitability of the Company by:
(a) Attracting,
retaining and motivating Employees, Non-Employee Directors and
Consultants;
(b) allowing
Employees, Non-Employee Directors and Consultants to acquire a
proprietary and vested interest in the growth and performance of
the Company;
(c) providing
incentives and rewards to Employees, Non-Employee Directors and
Consultants who are in a position to contribute materially to the
success and long-term objectives of the Company; and
(d) aligning the
financial interests of Employees, Non-Employee Directors and
Consultants with those of the Company’s
shareholders.
Section 1.3
Effective Date
. The Plan was effective
as of October 1, 2004. The authority to issue Awards
under the Plan will terminate on September 30, 2014 and the
remaining terms of the Plan will continue in effect thereafter
until all matters relating to the exercise and settlement of Awards
and administration of the Plan have been completed.
Section 2.1
“Affiliated
Entity” means any
partnership or limited liability company in which a majority of
voting power thereof is owned or controlled, directly or
indirectly, by the Company or one or more of its Subsidiaries or
Affiliated Entities or a combination thereof.
Section 2.2
“Appreciation”
means, with respect to a SAR (as
hereafter defined), the amount by which the Fair Market Value of a
share of Common Stock on the date of exercise of the SAR exceeds
either (i) the exercise price of the Option to which a tandem SAR
relates, in the case of a tandem SAR, or (ii) the Fair Market Value
of a share of Common Stock on the Date of Grant of the SAR, in the
case of a stand-alone SAR.
Section 2.3
“Award”
means, individually or
collectively, any Option, SAR, Performance Share, Restricted Stock,
Other Stock Award or Cash Award granted under the Plan
to an Eligible Person pursuant to such terms, conditions,
restrictions, and/or limitations, if any, as the applicable
Committee may establish by the Award Agreement or
otherwise.
Section 2.4
“Award
Agreement” means
any written or electronic instrument that establishes the terms,
conditions, restrictions, and/or limitations applicable to an Award
in addition to those established by this Plan and by the
Committee’s exercise of its administrative powers.
Section 2.5
“Board”
means the Board of Directors of the
Company.
Section 2.6
“Cash
Award” means a cash
bonus granted by the Committee to a Participant pursuant to Section
8.
Section 2.7
“Change of
Control” means the
occurrence of any of the following:
|
|
(i) the
acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either (A) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or (B)
the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting
Securities”). For purposes of this Section 2.7 the
following acquisitions by a Person will not constitute a Change of
Control: (1) any acquisition directly from the Company; (2) any
acquisition by the Company; (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company; or (4) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (A), (B) and (C) of paragraph (iii)
below;
|
|
|
|
|
|
(ii) the
individuals who, as of the date hereof, 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 for election by
the Company’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;
|
|
|
|
|
|
(iii) the
consummation of a reorganization, merger, consolidation or sale or
other disposition of all or substantially all of the assets of the
Company (a “Business Combination”), unless following
such Business Combination: (A) all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 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 the Company or all or
substantially all of the Company’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 Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (B) no Person
(excluding any corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 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 (C) 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 Board, providing for such Business Combination;
or
|
|
|
|
|
|
(iv) the
approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
|
|
|
|
|
|
For Executive
Officers, a Change of Control means the occurrence of any of the
foregoing events; provided, however, if a change of control is
defined in any Executive Officer’s employment agreement with
the Company, a Change of Control with respect to any Award granted
to such Executive Officer under the Plan shall mean any of the
events described in the definition of change of control in such
Executive Officer’s employment agreement in force at the time
of determination.
|
Section 2.8
“Code”
means the Internal Revenue Code of
1986, as amended. Reference in the Plan to any Section
of the Code shall be deemed to include any amendments or successor
provisions to such Section and any regulations under such
Section.
Section 2.9
“Committee” means the Compensation Committee of the Board
(or any successor committee) or any other committee designated by
the Board.
Section 2.10
“Common
Stock” means the
common stock, par value $.01 per share, of the Company and, after
substitution, such other stock as shall be substituted therefor as
provided in Section 3.3(b) of the Plan.
Section 2.11
“Consultant”
means any person who is engaged by
the Company, a Subsidiary or an Affiliated Entity to render
consulting or advisory services.
Section 2.12
“Date of
Grant” means the
date on which the grant of an Award is made by the
Committee.
Section 2.13
“Disability” has the meaning set forth in Section
409(A)(a)(2)(C) of the Code.
Section 2.14
“Eligible
Person” means any
Employee, Non-Employee Director, or Consultant.
Section 2.15
“Employee”
means any employee of the Company, a
Subsidiary or an Affiliated Entity or any person to whom an offer
of employment with the Company, a Subsidiary or an Affiliated
Entity is extended, as determined by the Committee.
Section 2.16
“Exchange
Act” means the
Securities Exchange Act of 1934, as amended.
Section 2.17
“Executive Officer
Participants” means
Participants who are subject to the provisions of Section 16 of the
Exchange Act with respect to the Common Stock.
Section 2.18
“Fair Market
Value” means, as of
any day, the closing price of the Common Stock on such day (or on
the next preceding business day, if such day is not a business day
or if no trading occurred on such day) as reported on the New York
Stock Exchange or on such other securities exchange or reporting
system as may be designated by the Committee. In the
event that the price of a share of Common Stock shall not be so
reported, the Fair Market Value of a share of Common Stock shall be
determined by the Committee in its absolute discretion.
Section 2.19
“Incentive Stock
Option” means an
Option within the meaning of Section 422 of the Code.
Section 2.20
“Non-Executive Officer
Participants” means
Participants who are not subject to the provisions of Section 16 of
the Exchange Act.
Section 2.21
“Non-Employee
Director” shall have the meaning set forth in Rule 16b-3,
or any successor rule, promulgated under Section 16 of the Exchange
Act.
Section 2.22
“Nonqualified Stock
Option” means an
Option to purchase shares of Common Stock which is not an Incentive
Stock Option within the meaning of Section 422(b) of the
Code.
Section 2.23
“Option”
means an Incentive Stock Option or
Nonqualified Stock Option.
Section 2.24
“Other Stock
Award” means any
right granted to a Participant by the Committee under Section 7 of
the Plan.
Section 2.25
“Participant”
means an Eligible Person to whom an
Award has been granted by the Committee under the Plan.
Section 2.26
“Performance
Award” means any
award of Performance Shares granted by the Committee under Section
6 of the Plan.
Section 2.27
“Performance
Measures” means the
Company’s achievement of target levels of earnings per share,
share price, net income, cash flows, reserve additions or
replacements, production volume, finding costs, operating costs,
overhead or other costs, drilling results, acquisitions and
divestitures, risk management activities, return on equity, total
or comparative shareholder return, a combination of or
interrelationship among any of the foregoing, or other criteria, as
determined by the Committee.
Section 2.28
“Performance
Share” means the
Common Stock subject to a Performance Award granted under Section 6
of the Plan, which may be delivered to the Participant upon the
achievement of such performance goals during the Performance Period
as specified by the Committee.
Section 2.29
“Plan"
means the Chesapeake Energy
Corporation Long Term Incentive Plan.
Section 2.30
“Restricted
Stock” means the
Common Stock issued under Section 5 which is subject to any
restrictions that the Committee, in its discretion, may
impose.
Section 2.31
“SAR” means a Stock Appreciation Right.
Section 2.32
“Shareholder
Approval” means
approval by the holders of a majority of the outstanding shares of
Common Stock, present or represented and entitled to vote at a
meeting called for such purposes.
Section 2.33
“Stock Appreciation
Right” means a
right, granted under Section 4, to an amount in Common Stock equal
to any increase in the Fair Market Value of the Common Stock
between the date on which the Stock Appreciation Right is granted
and the date on which the right is exercised.
Section 2.34
“Subsidiary” shall have the same meaning set forth in Section
424(f) of the Code.
Section 3.1
Administration of the Plan; the
Committee . The Compensation Committee shall
have overall authority to administer the Plan. The Board
may designate another committee or committees to administer the
Plan with respect to Non-Executive Officer Participants, subject to
any terms or conditions established by the
Committee. Hereafter, “Committee” shall mean
the Compensation Committee, except when used in reference to Awards
granted to Non-Executive Officer Participants,
“Committee” shall mean any applicable committee
designated by the Board.
Unless otherwise provided in
the bylaws of the Company or resolutions adopted from time to time
by the Board establishing the Committee, the Board may from time to
time remove members from, or add members to, the
Committee. Vacancies on the Committee, however caused,
shall be filled by the Board. The Committee shall hold
meetings at such times and places as it may determine. A
majority of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a
quorum is present shall be the valid acts of the
Committee. Any action which may be taken at a meeting of
the Committee may be taken without a meeting if all the members of
the Committee consent to the action in writing. Although the
Committee is generally responsible for the administration of the
Plan, the Board in its sole discretion may take any action under
the Plan that would otherwise be the responsibility of the
Committee, except as such action pertains to the administration of
Awards to Non-Employee Directors.
Subject to the provisions of the Plan, the
Committee shall have the authority to:
(a) Select the
Eligible Persons to participate in the Plan.
(b) Determine the time
or times when Awards will be granted.
(c) Determine the form
of Award, the number of shares of Common Stock subject to any
Award, all the terms, conditions (including performance
requirements), restrictions and/or limitations, if any, of an
Award, including the time and conditions of exercise or vesting,
and the terms of any Award Agreement, which may include the waiver
or amendment of prior terms and conditions or acceleration of the
vesting or exercise of an Award under certain circumstances
determined by the Committee (subject to Section 10.2 of the
Plan). However, nothing in this Section 3.1 shall be
construed to permit the repricing of any outstanding Award in
violation of Section 4.3.
(d) Determine whether
Awards will be granted singly or in combination.
(e) Determine whether,
to what extent and under what circumstances Awards may be settled
in cash or Common Stock.
(f) Determine whether
any conditions applicable to an Award have been met and whether an
Award will be paid at the end of a Performance Period.
(g) Employ attorneys,
consultants, accountants and other advisors as deemed necessary or
appropriate by the Committee.
(h) Take any and all
other action it deems necessary or advisable for the proper
operation or administration of the Plan.
Section 3.2
Committee to Make Rules and
Interpret Plan . The Committee in its sole
discretion shall have the authority, subject to the provisions of
the Plan, to establish, adopt, or revise such rules and regulations
and to make all such determinations relating to the Plan as it may
deem necessary or advisable for the administration of the Plan. The
Committee’s interpretation of the Plan or any Awards granted
pursuant hereto and all decisions and determinations by the
Committee with respect to the Plan shall be final, binding, and
conclusive on all parties, unless otherwise determined by the
Board.
Section 3.3
Shares Subject to the
Plan . Subject
to adjustment as provided in paragraph (b) below and subject to
Section 3.4, the aggregate number of shares of Common Stock which
are available for Awards under the Plan will not exceed thirty-one
million, five hundred thousand (31,500,000) shares. Any
of the authorized shares of Common Stock may be used for any of the
types of Awards described in the Plan, except that no more than
3,000,000 shares of Common Stock may be issued pursuant to
Incentive Stock Options. Common Stock delivered pursuant
to an Award under the Plan may consist, in whole or in part, of
authorized and unissued shares or treasury shares. The
Committee, in its sole discretion, shall determine the manner in
which fractional shares arising under this Plan are
treated. Additional restrictions or adjustments with
respect to shares subject to the Plan are as follows:
(a) Subject to (b)
below, the aggregate number of shares of Common Stock pursuant to
Options and SARs granted to any Employee or Non-Employee Director
in any calendar year under this Plan may not exceed 10% of the
shares subject to the Plan and the aggregate number of shares of
Common Stock pursuant to Restricted Stock, Performance Awards and
Other Stock Awards granted to any Employee or Non-Employee Director
in any calendar year may not exceed 10% of the shares subject to
the Plan.
(b) In the event that
the shares of Common Stock, as presently constituted, shall be
changed into or exchanged for a different number or kind or shares
of stock or other securities of the Company or of another
corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, stock split, combination of
shares or other corporate event of similar nature), or if the
number of such shares of Common Stock shall be increased through
the payment of a stock dividend, then there shall be substituted
for or added to each share available under and subject to the Plan
as provided herein, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock shall
be so changed or for which each such share shall be exchanged or to
which each such share shall be entitled, as the case may be, to
reflect any increase or decrease in the number of, or change in the
kind or value of, issued shares of Common Stock to preclude, to the
extent practicable, the enlargement or dilution of rights under
such Awards. In the event there shall be any other
change in the number or kind of the outstanding shares of Common
Stock, or any stock or other securities into which the
Com
