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EXHIBIT 10.2.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
between
XXXXXX X. XXXXXXX
and
CHESAPEAKE ENERGY CORPORATION
Effective June 1, 2000
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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................................................................... 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
4.4.1 Vacation ..................................................................... 3
4.4.2 Membership Dues............................................................... 3
4.4.3 Compensation Review........................................................... 4
4.4.4 Aircraft Allowance............................................................ 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
6.2 Termination by Executive................................................................ 5
6.3 Incapacity of Executive................................................................. 5
6.4 Death of Executive...................................................................... 5
6.5 Effect of Termination................................................................... 5
7. Confidentiality.................................................................................. 6
8. Noncompetition................................................................................... 6
9. Arbitration...................................................................................... 7
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TABLE OF CONTENTS (continued)
10. Miscellaneous................................................................................ 7
10.1 Time................................................................................ 7
10.2 Notices............................................................................. 7
10.3 Assignment.......................................................................... 8
10.4 Construction........................................................................ 8
10.5 Entire Agreement.................................................................... 8
10.6 Binding Effect...................................................................... 8
10.7 Attorney's Fees..................................................................... 8
10.8 Supercession........................................................................ 9
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EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective June 1, 2000 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, July 1,
1997, and July 1, 1998.
WITNESSETH:
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 part-time basis. The
Executive will commit to a schedule to be mutually determined by Executive and
the Company from time to time, to average a minimum of two work days per week.
Initially the schedule will include all day Monday, one-half day Tuesday and
one-half day Wednesday. 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, subject to the part-time provision of the Employment
Agreement. 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.
2.3 Rules and Regulations. The Company currently has an Employment Policies
Manual which addresses frequently asked questions regarding the
Company.
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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. The Executive currently conducts oil and gas activities
individually and through various related or family-owned entities, including
Infinity Resources, L.L.C. The Executive will be permitted to continue oil and
gas activities individually, and directly or indirectly through Infinity
Resources, L.L.C., provided that the Executive, subsequent to June 1, 2000, will
not 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. In the event the Executive or the Company becomes
aware of any oil and gas activities by the Executive that may violate the
foregoing provision, the party discovering the activity will immediately notify
the other party in writing and Executive will use his good faith efforts to
correct the situation by sale or transfer to the Company.
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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 Ten Thousand Dollars ($110,000.00),
will be paid to the Executive in equal semi-monthly installments
beginning June 15, 2000 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)
part-time weeks of paid vacation during each twelve month
period 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 month period to
another.
4.4.2 Membership Dues. The Company will reimburse the Executive for:
(a) forty percent (40%) of the monthly dues necessary to
maintain a full membership in a country club in the Oklahoma
City area selected by the Executive; and (b) one hundred
percent (100%) of the reasonable cost of any qualified Company
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.
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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 Aircraft Allowance. The Executive will receive the right to use
up to ten (10) hours of flight time on the Company's aircraft
during each twelve (12) month period covered by this Agreement.
Executive agrees to reimburse company for the variable costs
associated with this use of flight time.
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 and one (1) month commencing
on June 1, 2000, and ending on June 30, 2002 (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
6.1 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 thirty (30) 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 for a
three (3) month period following notice of termination; (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
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business of the Company which results in injury to the Company;
(d) willfully and repeatedly fails to perform the Executive's
duties hereunder, or e) violates the Noncompetition paragraph
of this Agreement. 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 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 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.
6.4 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 six (6) months 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
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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 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
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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, 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. 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 9 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.
10. Miscellaneous. The parties further agree as follows:
10.1 Time. Time is of the essence of each provision of this Agreement.
10.2 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
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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
To the Executive: Xx. Xxxxxx X. Xxxxxxx
00000 Xxxxxx Xxxx
Xxxxxx, XX 00000
10.3 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.
10.4 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.
10.5 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.
10.6 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.
10.7 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.
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10.8 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/ 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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