Employment Agreement - Chesapeake Energy Corp. and J. Mark Lester
EMPLOYMENT AGREEMENT
between
J. MARK LESTER
and
CHESAPEAKE ENERGY CORPORATION
Effective July 1, 1997
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TABLE OF CONTENTS
Page
----
1. Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Executive's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Specific Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Supervision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Rules and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 Stock Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Other Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Executive's Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.1 Base Salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.2 Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.3 Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.4 Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.4.5. Membership Dues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.4.6. Compensation Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6.1 Termination by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6.1.1 Termination without Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6.1.2 Termination for Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6.1.3 Termination After Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6.2 Termination by Executive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6.3 Incapacity of Executive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.4 Death of Executive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.5 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
8. Noncompetition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
9. Proprietary Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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TABLE OF CONTENTS (continued)
10. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
11. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
11.1 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
11.3 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
11.4 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
11.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11.6 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11.7 Attorney's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11.8 Supersession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective July 1, 1997, between CHESAPEAKE
ENERGY CORPORATION, an Oklahoma corporation (the "Company"), and J. MARK
LESTER, an individual (the "Executive") and replaces and supersedes that
certain Employment Agreement between Company and Executive dated July 1, 1995.
W I T N E S S S E T H:
WHEREAS, the Company desires to retain the services of the Executive
and the Executive desires to make the Executive's services available to the
Company.
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 employee 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.
2.1 Specific Duties. The Executive will serve as Senior Vice
President - Exploration for the Company. The Executive will
perform all of the services required to fully and faithfully
execute the office and position to which the Executive is
appointed and such other services 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 the Company's
subsidiaries as determined in the board of directors' sole
discretion.
2.2 Supervision. The services of the Executive will be requested
and directed by the President and Chief Operating Officer, Mr.
Tom L. Ward, and the Chief Executive Officer, Mr. Aubrey K.
McClendon.
2.3 Rules and Regulations. The Company currently has an
Employment Policies Manual which addresses frequently asked
questions regarding the
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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.
2.4 Stock Investment. For each calendar year during which this
Agreement is in effect, the Executive agrees to hold shares of
the Company's common stock having aggregate Investment Value
equal to fifteen percent (15%) of the compensation paid to the
Executive under paragraphs 4.1 and 4.2 of this Agreement
during such calendar year. For purposes of this section, the
"Investment Value" of each share of stock will be the higher
of either (a) the price paid by the Executive for such share
as part of an open market purchase; or (b) the fair market
value on the date of exercise for shares acquired through the
exercise of employee stock options. Any shares of common
stock acquired by the Executive prior to the date of this
Agreement and still owned by the Executive during the term of
this Agreement may be used to satisfy this requirement to
acquire common stock. The Investment Value for previously
acquired stock shall be calculated using the average stock
price during the first six months of this Agreement.
The stock acquired or owned pursuant to this paragraph 2.4
must be held by the Executive at all times during the
Executive's employment by the Company or the Company's
affiliated entities. In order to administer this provision,
the Executive agrees to return to the Company's Chief
Executive Officer a semi-annual report of purchases and
ownership in a form prepared by the Company. This paragraph
will become null and void if the Company's common stock ceases
to be listed on the New York Stock Exchange or on the National
Association of Securities Dealers Automated Quotation System.
The Company has no obligation to sell or to purchase from the
Executive any of the Company's stock in connection with this
paragraph 2.4 and has made no representations or warranties
regarding the Company's stock, operations or financial
condition.
3. Other Activities. Unless the Executive has obtained the prior written
approval of the board of directors of the Company, the Executive will not: (a)
engage in business independent of the Executive's employment by the Company;
(b) serve as an officer, general partner or member in any corporation,
partnership, company, or firm; (c) directly or indirectly invest in,
participate in or acquire an interest in any oil and gas business, including,
without limitation, (i) producing oil and gas, (ii) drilling, owning or
operating oil and gas leases or wells, (iii) providing services or materials to
the oil and gas industry, (iv) marketing or refining oil or gas, or (v) owning
any interest in any corporation, partnership, company or entity which conducts
any of the foregoing activities. The limitation in this paragraph 3 will not
prohibit an investment by the Executive in publicly traded securities; or the
continued direct ownership and operation of oil and gas interests and leases to
the extent such interests were owned by the Executive on July 1, 1995. The
Executive agrees not to directly or indirectly acquire any additional oil
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and gas interests or increase ownership of any oil and gas interests owned by
the Executive on July 1, 1995.
4. Executive's Compensation. The Company agrees to compensate the
Executive as follows:
4.1 Base Salary. A base salary (the "Base Salary"), at the
initial annual rate of not less than One Hundred Sixty
Thousand Dollars ($160,000.00), will be paid to the Executive
in equal semi-monthly installments beginning July 15, 1997
during the term of this Agreement.
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 will be
at the absolute discretion of the Company in such amounts and
at such times as the board of directors of the Company may
determine.
4.3 Stock Options. In addition to the compensation set forth in
paragraphs 4.1 and 4.2 of this Agreement, the Executive may
periodically receive grants of stock options from the
Company's various stock option plans, subject to the terms and
conditions thereof.
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 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 provide such coverage on
the same terms as is customarily provided by the Company to
the plan participants as modified from time to time. The
following specific benefits will also be provided to the
Executive at the expense of the Company:
4.4.1 Vacation. The Executive will be entitled to take
three (3) weeks of paid vacation each twelve (12)
months 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.
4.4.2 Membership Dues. The Company will reimburse the
Executive for: (a) the monthly dues necessary to
maintain a full membership in a country club in the
Oklahoma City area selected by the Executive in an
amount not to exceed Five Hundred Dollars ($500.00)
per month; and (b) the reasonable cost of any
qualified business entertainment at such country
club. All other costs, including, without implied
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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.
4.4.3 Compensation Review. The compensation of the
Executive will be reviewed not less frequently than
annually by the board of directors of the Company.
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. In the absence of
such termination, this Agreement will extend for a term of three (3) years
commencing on July 1, 1997, and ending on June 30, 2000 (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.
6.1 Termination by Company. The Company will have the following
rights to terminate this Agreement:
6.1.1 Termination without Cause. The Company may terminate
this Agreement without cause at any time by the
service of written notice of termination to the
Executive specifying an effective date of such
termination not sooner than sixty (60) business days
after the date of such notice (the "Termination
Date"). In the event the Executive is terminated
without cause, or the Company elects not to renew the
contract, the Executive will receive as termination
compensation: (a) Base Salary for a period of ninety
(90) days; (b) any benefits payable by operation of
paragraph 4.4 of this Agreement; and (c) any vacation
pay accrued through the Termination Date. The
termination compensation in (a) shall be paid only if
the Executive executes the Company's standard
termination agreement releasing all legally waivable
claims arising from the Executive's employment.
6.1.2 Termination for Cause. The Company may terminate
this Agreement for cause if the Executive: (a)
misappropriates the property of the Company or
commits any other act of dishonesty; (b) engages in
personal misconduct which materially injures the
Company; (c) willfully violates any law or regulation
relating to the business of the Company which results
in injury to the Company; or (d) willfully and
repeatedly fails to perform the Executive's duties
hereunder. In the event this Agreement is terminated
for cause, the Company will not have any obligation
to provide any further
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payments or benefits to the Executive after the
effective date of such termination.
6.1.3 Termination After Change in Control. If, during the
term of this Agreement, there is a "Change of
Control" and within one (1) year thereafter: (a)
this Agreement expires and is not extended; or (b)
the Executive is terminated other than under
paragraphs 6.1.2, 6.3 or 6.4 based on adequate
grounds; or (c) the Executive resigns as a result of
a reassignment of duties inconsistent with the
Executive's position, a reduction in the Executive's
then current compensation under paragraph 4 of this
Agreement, or a required relocation more than 25
miles from the Executive's then current place of
employment, then the Executive will be entitled to a
severance payment (in addition to any other amounts
payable to the Executive under this Agreement or
otherwise) in an amount equal to twelve (12) months
of Base Salary as set forth in paragraph 4.1 of this
Agreement. The term "Change of Control" means any
action of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of
Regulation 14A under the Securities Exchange Act of
1934 with respect to the Company including, without
limitation (i) the direct or indirect acquisition by
any person after the date hereof of beneficial
ownership of the right to vote or securities of the
Company representing the right to vote thirty five
percent (35%) or more of the combined voting power of
the Company's then outstanding securities having the
right to vote for the election of directors, or (ii)
within two years of a tender offer or exchange offer
for the voting stock of the Company or as a result of
a merger, consolidation, sale of assets or contested
election (or any combination of the foregoing), a
majority of the members of the Company's board of
directors is replaced by directors who were not
nominated and approved by the board of directors.
6.2 Termination by Executive. The Executive may voluntarily
terminate this Agreement with or without cause by the service
of written notice of such termination to the Company
specifying an effective date of such termination thirty (30)
days after the date of such notice, during which time
Executive may use remaining accrued vacation days, or at the
Company's option, be paid for such days. In the event this
Agreement is terminated by the Executive, neither the Company
nor the Executive will have any further obligations hereunder
including, without limitation, any obligation of the Company
to provide any further payments or benefits to the Executive
after the effective date of such termination.
6.3 Incapacity of Executive. If the Executive suffers from a
physical or mental condition which in the reasonable judgment
of the Company's management
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prevents the Executive in whole or in part from performing the
duties specified herein for a period of three (3) consecutive
months, the Executive may be terminated. Although the
termination shall be deemed as a termination with cause, any
compensation payable under paragraph 4 of this Agreement will
be continued for ninety (90) days. Notwithstanding the
foregoing, the Executive's Base Salary specified in paragraph
4.1 of this Agreement will be reduced by any benefits payable
under any disability plans.
6.4 Death of Executive. If the Executive dies during the term of
this Agreement, the Company may thereafter terminate this
Agreement without compensation to the Executive's estate
except: (a) the obligation to continue the Base Salary
payments under paragraph 4.1 of this Agreement for ninety (90)
days; and (b) the benefits described in paragraph 4.4 of this
Agreement accrued through the effective date of such
termination.
6.5 Effect of Termination. The termination of this Agreement will
terminate all obligations of the Executive to render services
on behalf of the Company, provided that the Executive will
maintain the confidentiality of all information acquired by
the Executive during the term of his employment in accordance
with paragraph 7 of this Agreement. Except as otherwise
provided in paragraph 6 of this Agreement, no accrued bonus,
severance pay or other form of compensation will be payable by
the Company to the Executive by reason of the termination of
this Agreement. All keys, entry cards, credit cards, files,
records, financial information, furniture, furnishings,
equipment, supplies and other items relating to the Company
will remain the property of the Company. The Executive will
have the right to retain and remove all personal property and
effects which are owned by the Executive and located in the
offices of the Company. All such personal items will be
removed from such offices no later than two (2) days after the
effective date of termination, and the Company is hereby
authorized to discard any items remaining and to reassign the
Executive's office space after such date. Prior to the
effective date of termination, the Executive will render such
services to the Company as might be reasonably required to
provide for the orderly termination of the Executive's
employment.
7. Confidentiality. The Executive recognizes that the nature of the
Executive's services are such that the Executive will have access to
information which constitutes trade secrets, is of a confidential nature, is of
great value to the Company or is the foundation on which the business of the
Company is predicated. The Executive agrees not to disclose to any person
other than the Company's employees or the Company's legal counsel nor use for
any purpose, other than the performance of this Agreement, any confidential
information ("Confidential Information"). Confidential Information includes
data or material (regardless of form) which is: (a) a trade secret; (b)
provided, disclosed or delivered to Executive by the Company, any officer,
director, employee, agent, attorney, accountant, consultant, or other
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person or entity employed by the Company in any capacity, any customer,
borrower or business associate of the Company or any public authority having
jurisdiction over the Company of any business activity conducted by the
Company; or (c) produced, developed, obtained or prepared by or on behalf of
Executive or the Company (whether or not such information was developed in the
performance of this Agreement) with respect to the Company or any assets oil
and gas prospects, business activities, officers, directors, employees,
borrowers or customers of the foregoing. However, Confidential Information
shall not include any information, data or material which at the time of
disclosure or use was generally available to the public other than by a breach
of this Agreement, was available to the party to whom disclosed on a non-
confidential basis by disclosure or access provided by the Company or a third
party, or was otherwise developed or obtained independently by the person to
whom disclosed without a breach of this Agreement. On request by the Company,
the Company will be entitled to a copy of any Confidential Information in the
possession of the Executive. The Executive also agrees that the provisions of
this paragraph 7 will survive the termination, expiration or cancellation of
this Agreement for a period of five (5) years. The Executive will deliver to
the Company all originals and copies of the documents or materials containing
Confidential Information. For purposes of paragraphs 7, 8, and 9 of this
Agreement, the Company expressly includes any of the Company's affiliated
corporations, partnerships or entities.
8. Noncompetition. For a period of twelve (12) months after Executive is
no longer employed by the Company as a result of either the resignation by the
Executive pursuant to paragraph 6.2 above, or Termination for Cause pursuant to
paragraph 6.1.2 above, Executive will not: (a) acquire, attempt to acquire or
aid another in the acquisition or attempted acquisition of an interest in oil
and gas assets, oil and gas production, oil and gas leases, mineral interests,
oil and gas wells or other such oil and gas exploration, development or
production activities within five (5) miles of any operations or ownership
interests of the Company or its affiliated corporations, partnerships or
entities, provided, however, this provision shall not apply to acquisitions
within said five (5) mile radius of assets or activities of a successor entity
resulting from a "Change in Control" as described in paragraph 6.1.3., which
assets were owned or activities were being conducted (1) prior to the date of
such Change in Control, or (2) after such Change in Control but for which the
Executive had no material responsibility; and; (b) for the Executive's own
account or for the benefit of another party solicit, induce, entice or attempt
to entice any employee, contractor, customer, vendor or subcontractor to
terminate or breach any relationship with the Company or the Company's
affiliates. The Executive further agrees that the Executive will not
circumvent or attempt to circumvent the foregoing agreements by any future
arrangement or through the actions of a third party.
9. Proprietary Matters. The Executive expressly understands and agrees
that any and all improvements, inventions, discoveries, processes or know-how
that are generated or conceived by the Executive during the term of this
Agreement, whether generated or conceived during the Executive's regular
working hours or otherwise, will be the sole and exclusive property of the
Company. Whenever requested by the Company (either during the term of this
Agreement or thereafter), the Executive will assign or execute any and all
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applications, assignments and or other instruments and do all things which the
Company deems necessary or appropriate in order to permit the Company to: (a)
assign and convey or otherwise make available to the Company the sole and
exclusive right, title, and interest in and to said improvements, inventions,
discoveries, processes, know-how, applications, patents, copyrights, trade
names or trademarks; or (b) apply for, obtain, maintain, enforce and defend
patents, copyrights, trade names, or trademarks of the United States or of
foreign countries for said improvements, inventions, discoveries, processes or
know-how. However, the improvements, inventions, discoveries, processes or
know-how generated or conceived by the Executive and referred to above (except
as they may be included in the patents, copyrights or registered trade names or
trademarks of the Company, or corporations, partnerships or other entities
which may be affiliated with the Company) shall not be exclusive property of
the Company at any time after having been disclosed or revealed or have
otherwise become available to the public or to a third party on a
non-confidential basis other than by a breach of this Agreement, or after they
have been independently developed or discussed without a breach of this
Agreement by a third party who has no obligation to the Company or its
affiliates.
10. Arbitration. The parties will attempt to promptly resolve any dispute
or controversy arising out of or relating to this Agreement or termination of
the Executive by the Company. Any negotiations pursuant to this paragraph 10
are confidential and will be treated as compromise and settlement negotiations
for all purposes. If the parties are unable to reach a settlement amicably,
the dispute will be submitted to binding arbitration before a single arbitrator
in accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association. The arbitrator will be instructed and empowered to
take reasonable steps to expedite the arbitration and the arbitrator's judgment
will be final and binding upon the parties subject solely to challenge on the
grounds of fraud or gross misconduct. Except for damages arising out of a
breach of paragraphs 7, 8 or 9 of this Agreement, the arbitrator is not
empowered to award total damages (including compensatory damages) which exceed
300% of compensatory damages and each party hereby irrevocably waives any
damages in excess of that amount. The arbitration will be held in Oklahoma
County, Oklahoma. Judgment upon any verdict in arbitration may be entered in
any court of competent jurisdiction and the parties hereby consent to the
jurisdiction of, and proper venue in, the federal and state courts located in
Oklahoma County, Oklahoma. Each party will bear its own costs in connection
with the arbitration and the costs of the arbitrator will be borne by the party
who the arbitrator determines did not prevail in the matter. Unless otherwise
expressly set forth in this Agreement, the procedures specified in this
paragraph 10 will be the sole and exclusive procedures for the resolution of
disputes and controversies between the parties arising out of or relating to
this Agreement. Notwithstanding the foregoing, a party may seek a preliminary
injunction or other provisional judicial relief if in such party's judgment
such action is necessary to avoid irreparable damage or to preserve the status
quo.
11. Miscellaneous. The parties further agree as follows:
11.1 Time. Time is of the essence of each provision of this
Agreement.
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11.2 Notices. Any notice, payment, demand or communication
required or permitted to be given by any provision of this
Agreement will be in writing and will be deemed to have been
given when delivered personally or by telefacsimile to the
party designated to receive such notice, or on the date
following the day sent by overnight courier, or on the third
(3rd) business day after the same is sent by certified mail,
postage and charges prepaid, directed to the following address
or to such other or additional addresses as any party might
designate by written notice to the other party:
To the Company: Chesapeake Energy Corporation
Post Office Box 18496
Oklahoma City, OK 73154-0496
Attn: Aubrey K. McClendon
To the Executive: Mr. J. Mark Lester
13525 Green Cedar Lane
Oklahoma City, OK 73131
11.3 Assignment. Neither this Agreement nor any of the parties'
rights or obligations hereunder can be transferred or assigned
without the prior written consent of the other parties to this
Agreement.
11.4 Construction. If any provision of this Agreement or the
application thereof to any person or circumstances is
determined, to any extent, to be invalid or unenforceable, the
remainder of this Agreement, or the application of such
provision to persons or circumstances other than those as to
which the same is held invalid or unenforceable, will not be
affected thereby, and each term and provision of this
Agreement will be valid and enforceable to the fullest extent
permitted by law. This Agreement is intended to be
interpreted, construed and enforced in accordance with the
laws of the State of Oklahoma and any litigation relating to
this Agreement will be conducted in a court of competent
jurisdiction sitting in Oklahoma County, Oklahoma.
11.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the
subject matter herein contained, and no modification hereof
will be effective unless made by a supplemental written
agreement executed by all of the parties hereto.
11.6 Binding Effect. This Agreement will be binding on the parties
and their respective successors, legal representatives and
permitted assigns. In the event of a merger, consolidation,
combination, dissolution or liquidation of the Company, the
performance of this Agreement will be assumed by any entity
which succeeds to or is transferred the business of the
Company as a result thereof.
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11.7 Attorneys' Fees. If any party institutes an action or
proceeding against any other party relating to the provisions
of this Agreement or any default hereunder, the unsuccessful
party to such action or proceeding will reimburse the
successful party therein for the reasonable expenses of
attorneys' fees and disbursements and litigation expenses
incurred by the successful party.
11.8 Supercession. On execution of this Agreement by the
Company and the Executive, the relationship between the
Company and the Executive will be bound by the terms of this
Agreement and the Employment Policies Manual and not by any
other agreements or otherwise. In the event of a conflict
between the Employment Policies Manual and this Agreement,
this Agreement will control in all respects.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective the date first above written.
CHESAPEAKE ENERGY CORPORATION, an
Oklahoma corporation
By: /s/ AUBREY K. MCCLENDON
--------------------------------------------
Aubrey K. McClendon, Chief Executive Officer
(the "Company")
By: /s/ J. MARK LESTER
--------------------------------------------
J. Mark Lester, Individually
(the "Executive")
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