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EXHIBIT 10.2.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
between
XXXXXX X. XXXXXXX
and
CHESAPEAKE ENERGY CORPORATION
Effective July 1, 1998
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TABLE OF CONTENTS
Page
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1. Employment....................................................................................... 1
2. Executive's Duties............................................................................... 1
2.1 Specific Duties........................................................................... 1
2.2 Supervision............................................................................... 1
2.3 Rules and Regulations..................................................................... 2
2.4 Stock Investment.......................................................................... 2
3. Other Activities................................................................................. 2
3.1 Company's Activities...................................................................... 3
3.1.1 Amount of Participation............................................................ 3
3.1.2 Conditions of Participation........................................................ 4
3.2 Other Activities.......................................................................... 4
4. Executive's Compensation......................................................................... 5
4.1 Base Salary............................................................................... 5
4.2 Bonus..................................................................................... 5
4.3 Stock Options............................................................................. 5
4.4 Benefits.................................................................................. 5
4.4.1 Vacation........................................................................... 5
4.4.2 Membership Dues.................................................................... 6
4.4.3 Compensation Review................................................................ 6
4.4.4 Automobile Allowance............................................................... 6
5. Term............................................................................................. 6
6. Termination...................................................................................... 6
6.1 Termination by Company.................................................................... 6
6.1.1 Termination without Cause.......................................................... 7
6.1.2 Termination for Cause.............................................................. 7
6.2 Termination by Executive.................................................................. 7
6.3 Termination After Change in Control....................................................... 8
6.3.1 Change of Control.................................................................. 8
6.3.2 CC Termination..................................................................... 8
6.4 Incapacity of Executive................................................................... 9
6.5 Death of Executive........................................................................ 9
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6.6 Effect of Termination..................................................................... 9
TABLE OF CONTENTS (continued)
7. Confidentiality.................................................................................. 10
8. Noncompetition................................................................................... 11
9. Proprietary Matters.............................................................................. 11
10. Arbitration...................................................................................... 12
11. Miscellaneous.................................................................................... 12
11.1 Time...................................................................................... 12
11.2 Notices................................................................................... 12
11.3 Assignment................................................................................ 13
11.4 Construction.............................................................................. 13
11.5 Entire Agreement.......................................................................... 13
11.6 Binding Effect............................................................................ 13
11.7 Attorney's Fees........................................................................... 13
11.8 Supercession.............................................................................. 13
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EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective July 1, 1998, between CHESAPEAKE
ENERGY CORPORATION, an Oklahoma corporation (the "Company"), and XXXXXX X.
XXXXXXX, an individual (the "Executive") and replaces and supersedes those
certain Employment Agreements between Company and Executive dated March 1, 1995
and July 1, 1997.
W I T N E 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 Chief Financial
Officer and Senior Vice President - Finance 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 Chief Executive Officer, Xx. Xxxxxx X.
XxXxxxxxx.
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2.3 Rules and Regulations. The Company currently has an Employment
Policies Manual which 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.
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 one hundred percent (100%) 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. Except for the activities (the "Permitted Activities")
expressly permitted by paragraphs 3.1 and 3.2 of this Agreement, or the prior
written approval of Xxxxxx X. XxXxxxxxx, 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
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xxxxx, (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 March 1, 1995. Notwithstanding the foregoing, the
Executive will be permitted to participate in the following activities which
will be deemed to be approved by the Company, if such activities are undertaken
in strict compliance with this Agreement.
3.1 Company's Activities. The Executive or the Executive's
designated affiliate will be permitted to acquire a working
interest in all of the xxxxx spudded by the Company or the
Company's subsidiary corporations, partnerships or entities
(the "Program Xxxxx") during any Calendar Quarter (as
hereafter defined) on the terms and conditions set forth
herein. The Program Xxxxx include any well spudded during such
Calendar Quarter in which the Company or the Company's
subsidiary corporations, partnerships or entities participate
as a nonoperator.
3.1.1 Amount of Participation. On or before the date which
is thirty (30) days before the first (1st) day of
each Calendar Quarter, the Executive will provide
notice to the compensation committee of the Company's
board of directors of the Executive's intent to
participate in the Program Xxxxx during the
succeeding Calendar Quarter and the approximate
percentage working interest which the Executive
proposes to participate with during such Calendar
Quarter. The Executive's percentage working interest
in the Program Xxxxx spudded during such Calendar
Quarter will be subject to approval by the
disinterested members of the compensation committee
of the Company's board of directors and to the
limitations set forth herein (the "Approved
Percentage"). The Executive's Approved Percentage
working Interest participation (determined without
consideration of any carried interest) in the Program
Xxxxx for any Calendar Quarter will not exceed one
percent (1.0%) on an eight-eighths (8/8ths) basis. On
designation of the Approved Percentage for a Calendar
Quarter, the Executive will be deemed to have elected
to participate in each Program Well spudded during
such calendar Quarter with a working interest equal
to the following applicable percentage determined on
a well-by-well basis (the "Minimum Participation"):
(a) the Approved Percentage for a Program Well which
does not fall within clause (b) of this paragraph
3.1.1 or an Operations Well; or (b) zero percent (0%)
if the combined participation in the Program Well by
the Executive, Xx. Xxx X. Xxxx and Xx. Xxxxxx X.
XxXxxxxxx
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with such individuals' Approved Percentage under
their respective employment agreements causes the
Company's working interest (determined without
consideration of any carried interest) on the spud
date for such Program Well to be less than twelve and
one-half percent (12.5%) on an eight-eighths (8/8ths)
basis. If clause (b) of this paragraph 3.1.1
prohibits the Executive's participation in a Program
Well, then Messrs. Xxxx and XxXxxxxxx will not be
entitled to participate in such Program Well under
their employment agreements. An "Operations Well"
means a Program Well which falls within the
provisions of clause (b) of this paragraph 3.1.1, but
for which the Executive's participation is deemed
necessary for the Company to retain operations as
determined by the disinterested members of the
compensation committee of the Company's board of
directors. If the Executive fails to provide notice
of the Executive's intent to participate and the
Executive's proposed participation prior to the
specified date as provided herein, the amount of the
Approved Percentage for the Calendar Quarter will be
deemed to be zero (0).
3.1.2 Conditions of Participation. The Participation by the
Executive in each Program Well will be on no better
terms than the terms agreed to by unaffiliated third
party participants in connection with the acquisition
of an interest in such Program Well from the Company
or its subsidiary corporations, partnerships or
entities. The Approved Percentage cannot be changed
during any Calendar Quarter without the prior
approval of the disinterested members of the
compensation committee of the Company's board of
directors. Any participation by the Executive under
this paragraph 3.1 is also conditioned upon the
Executive's participation in each Program Well
spudded during such Calendar Quarter in an amount
equal to the Minimum Participation. The Executive
hereby agrees to execute and deliver any documents
reasonably requested by the Company and hereby
appoints the Company as the Executive's agent and
attorney-in-fact to execute and deliver such
documents if the Executive fails or refuses to
execute such documents. The Executive further agrees
to pay all joint interest xxxxxxxx within one hundred
fifty (150) days after receipt. For purposes of this
Agreement, the term "Calendar Quarter" means the
three (3) month periods commencing on the first (1st)
day of January, April, July and October.
3.2 Other Activities. The Executive currently conducts oil and gas
business activities individually and through various related
or family owned entities including MJ Partners, a Texas
general partnership ("MJ"). The Executive will be permitted to
continue oil and gas activities individually in MJ and
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indirectly through related entities, but only to the extent
such activities are (a) conducted on oil and gas leases or
interests owned by the Executive or MJ as of Xxxxx 0, 0000,
(x) acquired pursuant to paragraph 3.1 of this Agreement, or
(c) Approved Projects (as hereafter defined). For purposes of
this Agreement Approved Projects means an interest in an oil
and gas business which: (y) is acquired (whether directly or
indirectly) by the Executive, Affiliate of the Executive or a
related entity in an area in which the Company is not active
at the time of such acquisition and (z) which is approved by
Xxxxxx X. XxXxxxxxx.
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 Two Hundred Fifty Thousand
Dollars ($250,000.00), will be paid to the Executive in equal
semi-monthly installments beginning July 15, 1998 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 months
during the term of this Agreement.
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No additional compensation will be paid for failure
to take vacation and no vacation may be carried
forward from one twelve 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; and (b)
the reasonable cost of any qualified business
entertainment at such country 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.
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.
The compensation of the Executive prescribed by
paragraph 4 of this Agreement may be increased at the
discretion of the Company, but may not be reduced
without the prior written consent of the Executive.
4.4.4 Automobile Allowance. The Executive will receive a
monthly cash allowance in the amount of One Thousand
Dollars ($1,000.00) to defer a portion of the
Executive's cost of acquiring, operating and
maintaining an automobile for use in the Executive's
employment.
5. Term. In the absence of termination as set forth in paragraph 6 below, this
Agreement will extend for a term of two (2) years commencing on July 1, 1998,
and ending on June 30, 2000 (the "Expiration Date"). Unless the Company provides
thirty (30) days prior written notice of nonextension to the Executive, on each
June 30 during the term of this Agreement, the term will be automatically
extended for one (1) additional year so that the remaining term on this
Agreement will be not less than one (1) and not more than two (2) years.
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
6.1 Termination by Company. The Company will have the following
rights to terminate this Agreement:
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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, the Executive will receive as
termination compensation: (a) continuation of the
Base Salary provided by paragraph 4.1 during the
portion of the contract period remaining after the
date of the Executive's termination, but in any
event, through the Expiration Date; (b) any benefits
payable by operation of paragraph 4.4 of this
Agreement during the portion of the contract period
remaining after the date of the Executive's
termination, but in any event, through the Expiration
Date; 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 payments or benefits to the
Executive after the effective date of such
termination. In the event this Agreement is
terminated for cause, the Company will not have any
obligation to provide any further payments or
benefits to the Executive after the effective date of
such termination.
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 sixty (60)
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
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the Company to provide any further payments or benefits to the
Executive after the effective date of such termination.
6.3 Termination After Change in Control. If, during the term of
this Agreement, there is a "Change of Control" and within two
(2) years thereafter there is a CC Termination (as hereafter
defined) then the Executive will be entitled to a severance
payment (in addition to any other rights and other amounts
payable to the Executive under this Agreement or otherwise) in
an amount equal to the sum of the following: (a) three (3)
times the Executive's Base Compensation; plus (b) the Gross-up
Amount (as hereafter defined). If the foregoing amount is not
paid within ten (10) days after the CC Termination, the unpaid
amount will bear interest at the per annum rate equal to the
prime rate published from time to time in the Wall Street
Journal. The interest rate will be adjusted on the date of a
change in such prime rate. For purposes of this Agreement the
term "Gross-up Amount" means the amount of the payment which
will result in the Executive retaining from such payment
(after paying all taxes imposed on such payment and any
interest or penalties related to such taxes) an amount equal
to any excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended, together with any interest
and penalties with respect to such excise tax imposed on all
of the payments made to the Executive under this paragraph
6.3.
6.3.1 Change of Control. 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 a 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.
6.3.2 CC Termination. The term "CC Termination" means any
of the following: (a) this Agreement expires in
accordance with its terms; (b) this Agreement is not
extended under paragraph 5 of
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this Agreement and the Executive resigns within
one (1) year after such nonextension; (c) the
Executive is terminated by the Company other than
under paragraphs 6.1.2, 6.4 or 6.5 based on adequate
grounds; (d) the Executive resigns as a result of a
change in the Executive's duties, a reduction the
Executive's then current compensation, a required
relocation more than 25 miles from the Executive's
then current place of employment or a default by the
Company under this Agreement; (e) the failure by the
Company after a Change of Control to obtain the
assumption of this Agreement, without limitation or
reduction, by any successor to the Company or any
parent corporation of the Company; or (f) after a
Change of Control has occurred, the Executive agrees
to remain employed by the Company for a period of
three (3) months to assist in the transition and
thereafter resigns.
6.4 Incapacity of Executive. If the Executive suffers from a
physical or mental condition which in the reasonable judgment
of the Company's management 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 through the
remaining contract period, but in any event, through the
Expiration Date. Notwithstanding the foregoing, the
Executive's Base Salary specified in paragraph 4.1 of this
Agreement shall be reduced by any benefits payable under any
disability plans.
6.5 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 twelve (12)
months and (b) the benefits described in paragraph 4.4 of this
Agreement accrued through the effective date of such
termination.
6.6 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
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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 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.
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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 xxxxx 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 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.
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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.
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
Xxxx Xxxxxx Xxx 00000
Xxxxxxxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. XxXxxxxxx
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To the Executive: Xx. Xxxxxx X. Xxxxxxx
00000 Xxxxxx Xx.
Xxxxxx, XX 00000
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.
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
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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/ Xxxxxx X. XxXxxxxxx
--------------------------------------------
Xxxxxx X. XxXxxxxxx, Chief Executive Officer
(the "Company")
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxxx, Individually
(the "Executive")
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