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Exhibit 10.1

EMPLOYMENT AGREEMENT

between

CHESAPEAKE ENERGY CORPORATION

and

Frank Patterson

Effective May 21, 2015

Frank Patterson EA 5-21-15

 
 

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EMPLOYMENT AGREEMENT
 
THIS AGREEMENT is made effective May 21, 2015, between CHESAPEAKE ENERGY
CORPORATION, an Oklahoma corporation (the "Company") and Frank Patterson, an
individual (the "Executive").

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 Executive of the Company, and the
Executive and the Company do not intend to create a joint venture, partnership
or other relationship which might impose a fiduciary obligation on the Executive
or the Company in the performance of this Agreement. 

 
2.
Executive's Duties. The Executive is employed on a full-time basis. Throughout
the term of this Agreement, the Executive will use the Executive's best efforts
and due diligence to assist the Company in achieving the most profitable
operation of the Company and the Company's affiliated entities consistent with
developing and maintaining a quality business operation. The Executive shall
also devote all of Executive's working time, attention and energies to the
performance of Executive's duties and responsibilities under this Agreement.

2.1
Specific Duties. The Executive will serve as Executive Vice President -
Exploration for the Company, and in such other positions as might be mutually
agreed upon by the parties. The Executive shall perform all of the duties
required to fully and faithfully execute the office and position to which the
Executive is appointed, and such other duties as may be reasonably requested by
the Executive's supervisor. During the term of this Agreement, the Executive may
be nominated for election or appointed to serve as a director or officer of any
of the Company's affiliated entities as determined in such affiliates' Board of
Directors' sole discretion. The services of the Executive will be requested and
directed by the Company's Chief Executive Officer, Robert D. Lawler.

 
2.2
Rules and Regulations. The Company has issued various policies and procedures
applicable to employees and the Executive including an Employment Policies
Manual which sets forth the general human resources policies of the Company and
addresses frequently asked questions

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regarding the Company. The Executive agrees to comply with such policies and
procedures except to the extent inconsistent with this Agreement. Such policies
and procedures may be changed or adopted in the sole discretion of the Company
without advance notice.

3.
Other Activities. Except as provided in this Agreement or approved by the
Compensation Committee, or its designee, as applicable, in writing, the
Executive agrees not to: (a) engage in other operating business activities
independent of the Company; (b) serve as a general partner, officer, executive,
director or member of any corporation, partnership, company or firm; or (c)
directly or indirectly invest, participate or engage in the Oil and Gas
Business. For purposes of this Agreement the term "Oil and Gas Business" means:
(i) producing oil and gas; (ii) drilling, owning or operating an interest in oil
and gas leases or wells; (iii) providing material or services to the Oil and Gas
Business; (iv) refining, processing, gathering, compressing, transporting or
marketing oil or gas; or (v) owning an interest in or assisting any corporation,
partnership, company, entity or person in any of the foregoing. The foregoing
will not prohibit: (v) ownership of publicly traded securities; (w) ownership of
royalty interests where the Executive owns or previously owned the surface of
the land covered in whole or in part by the royalty interest and the ownership
of the royalty interest is incidental to the ownership of such surface estate;
(x) ownership of royalty interests, overriding royalty interests, working
interests or other interests in oil and gas owned prior to the Executive's date
of first employment with the Company and disclosed to the Company in writing;
(y) ownership of royalty interests, overriding royalty interests, working
interests or other interests in oil and gas acquired by the Executive through a
bona fide gift or inheritance subject to disclosure by Executive to the Company
in writing; or (z) service as an officer or director of a not-for-profit
organization so long as such activity does not materially interfere with
Executive’s obligations under this Agreement. If the Executive serves as a
director or officer of a not-for-profit organization, the Executive shall
disclose the name of the organization and their involvement in an annual
disclosure statement, the form of which shall be provided by the Company.

 
 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 Six Hundred Thousand Dollars ($600,000.00) will be paid to the
Executive in regular installments in accordance with the Company's designated
payroll schedule.

4.2
Bonus. In addition to the Base Salary described in paragraph 4.1 of this
Agreement, the Executive shall be eligible for an annual bonus for each fiscal
year during the Term on the same basis as other executive officers under the
Company’s then current annual incentive plan with a target of 125% of Base
Salary which shall be payable in accordance with the terms of such plan.

4.3
Equity Compensation.

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4.3.1
Annual Equity Grant. In addition to the compensation set forth in paragraphs 4.1
and 4.2 of this Agreement, the Executive will be eligible for annual grants of
Chesapeake Energy Corporation restricted stock units, performance units, stock
options or other awards from the Company's equity compensation plans with a
target aggregate fair value of $2,500,000 (generally referred to as “Equity
Compensation Plans”), subject to the terms and conditions thereof.

4.3.2
Initial Equity Grant. The Company shall grant to the Executive restricted stock
units on the last business day of the month following Executive’s initial month
of full-time employment, having an aggregate fair value of Two Million Five
Hundred Thousand Dollars ($2,500,000.00) calculated using the closing stock
price as of the last business day of the month prior to the month of the grant
with the Compensation Committee being authorized to adjust such number for
rounding and the grant of whole units (the “Initial Grant”). The Initial Grant
will vest in equal installments on the first, second and third anniversaries of
the date of grant subject to Executive’s continued employment on each applicable
vesting date, other than as set forth in this Agreement, and have such terms and
conditions as are set forth in a separate restricted stock unit agreement to be
entered into between the Company and the Executive, which terms and conditions
shall be consistent with those of restricted stock units granted to other
members of senior management in fiscal year 2015.

4.4
Benefits. The Company will provide the Executive such retirement benefits, and
such other benefits as are customarily provided to similarly situated executives
of the Company and as are set forth in and governed by the Company's Employment
Policies Manual. Additionally, the Company will provide paid time off (“PTO”) to
the Executive, the amount of which will be determined in accordance with the
Company’s PTO policy. No additional compensation will be paid for failure to
take PTO. The Company will also provide the Executive the opportunity to apply
for coverage under the Company's medical, life and disability plans, if any. If
the Executive is accepted for coverage under such plans, the Company will make
such coverage available to the Executive on the same terms as is customarily
provided by the Company to the plan participants as modified from time to time.
The Executive is subject to all of the terms and provisions of the Company's
benefit plans or policies. Executive will be entitled to receive reimbursement
for all reasonable business expenses incurred by Executive in accordance with
the Company’s expense reimbursement policy. All payments for reimbursement under
this Section 4.4 shall be paid promptly but in no event later than the last day
of Executive’s taxable year following the taxable year in which Executive
incurred such expenses.

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4.5
Enhanced Package Plus Relocation Allowance. In addition to the compensation set
forth in paragraphs 4.1 and 4.2 of this Agreement, the Company will arrange a
direct bill payment with one of its preferred vendors for the Executive’s
reasonable moving and storage costs associated with the Executive’s move from
Spring, Texas, to the Oklahoma City, Oklahoma, area (the “Enhanced Relocation
Package”). Eligible costs include the following: packing, insuring, shipping,
unpacking and up to one (1) month of storage of your household goods. Any
questions the Executive may have regarding the Enhanced Relocation Package
should be directed to the Human Resources Department.

In addition to the Enhanced Relocation Package, the Company will provide a
relocation allowance (the "Relocation Allowance") in the amount of
Fifty Thousand Dollars ($50,000), payable within thirty (30) days of the date
from which the Executive begins employment with the Company. Any questions the
Executive may have regarding relocation should be directed to the Human
Resources Department. The Enhanced Relocation Package and Relocation Allowance
(collectively referred to as the "Relocation Payments") are subject to
applicable deductions under the appropriate IRS guidelines and applicable state
tax rules. If the Executive is terminated by the Company for Cause (as described
in Section 6.1.3 of this Agreement) or resigns without Good Reason (as described
in Section 6.2 of this Agreement) following the Executive's relocation and
during the first twelve (12) months of employment, the Executive agrees to repay
a pro-rata share of the Relocation Payments. Such repayments shall be equal to
the total amount of the Relocation Payments multiplied by the months not worked
during the twelve (12) month period, divided by twelve (12) months.
In addition to the Relocation Payments, the Company will provide reimbursement
of reasonable temporary housing rental for up to sixty (60) days in the Oklahoma
City, Oklahoma, area following the effective date of this Agreement. Such
reimbursement of reasonable temporary housing rental is subject to applicable
taxes under the appropriate IRS guidelines and applicable state tax rules.
5.
Term. The term of Executive’s employment under the provisions of this Agreement
shall be for a period commencing on the Effective Date and ending on December
31, 2015 (the "Term"); provided, however, if during the Term of this Agreement a
Change of Control occurs, the Term of this Agreement shall be extended to the
later of the original expiration date of the Term or the expiration of the
Change of Control Period. For purposes of this Agreement, a "Change of Control"
means the occurrence of any of the following:

(a)  the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of thirty

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percent (30%) or more of either (i) the then outstanding shares of Chesapeake
Energy Corporation common stock (the "Outstanding CHK Common Stock") or (ii) the
combined voting power of the then outstanding voting securities of Chesapeake
Energy Corporation entitled to vote generally in the election of directors (the
"Outstanding CHK Voting Securities"). For purposes of this paragraph, the
following acquisitions by a Person will not constitute a Change of Control: (i)
any acquisition by Chesapeake Energy Corporation; (ii) any redemption, share
acquisition or other purchase of shares directly or indirectly by Chesapeake
Energy Corporation; (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Chesapeake Energy Corporation or any
corporation controlled by Chesapeake Energy Corporation; or (iv) any acquisition
by any corporation pursuant to a transaction which complies with clauses (i),
(ii) and (iii) of paragraph (c) below; 
(b)  during any period of not more than twenty-four (24) months, the individuals
who constitute the Board of Directors (the "Incumbent Board") of Chesapeake
Energy Corporation as of the beginning of the period cease for any reason to
constitute at least a majority of the Board of Directors. Any individual
becoming a director whose election, or nomination for election by Chesapeake
Energy Corporation's shareholders, is approved by a vote of at least a majority
of the directors then comprising the Incumbent Board will be considered a member
of the Incumbent Board, but any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Incumbent Board will not be deemed a member of the Incumbent Board.
(c)  the consummation of a reorganization, merger, consolidation or sale or
other disposition of all or substantially all of the assets of Chesapeake Energy
Corporation (a "Business Combination"), unless following such Business
Combination: (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding CHK Common Stock
and Outstanding CHK Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than sixty percent
(60%) of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns Chesapeake Energy
Corporation or all or substantially all of Chesapeake Energy Corporation's
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding CHK Common Stock and Outstanding CHK Voting
Securities, as the case may be, (ii) no Person (excluding any corporation
resulting from

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such Business Combination or any employee benefit plan (or related trust) of
Chesapeake Energy Corporation or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, thirty percent (30%) or
more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the Board of Directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Incumbent Board, providing for such Business Combination; or,
(d)  the approval by the shareholders of Chesapeake Energy Corporation of a
complete liquidation or dissolution of Chesapeake Energy Corporation.
For purposes of this Agreement, “Change of Control Period” means the twenty‑four
(24) month period commencing on the effective date of a Change of Control.
6.
Termination. This Agreement will continue in effect until the expiration of the
term stated in Section 5 of this Agreement unless earlier terminated pursuant to
this Section 6. For purposes of this Agreement, “Termination Date” shall mean
(a) if Executive’s employment is terminated by death, the date of death; (b) if
Executive’s employment is terminated pursuant to Section 6.4 due to a
disability, thirty (30) days after notice of termination is provided to
Executive in accordance with Section 6.4; (c) if Executive’s employment is
terminated by Company without Cause or by Executive for Good Reason pursuant to
Section 6.1.1 or 6.1.2, on the effective date of termination specified in the
notice required by Section 6.1.1 or 6.1.2 respectively; (d) if Executive’s
employment is terminated by Company for Cause pursuant to Section 6.1.3, the
date on which the notice of termination required by Section 6.1.3 is given; or
(e) if Executive’s employment is terminated by Executive pursuant to Section
6.2, on the effective date of termination specified by Executive in the notice
of termination required by Section 6.2 unless the Company rejects such date as
allowed by Section 6.2, in which case it would be the date specified by the
Company.

 
6.1
Termination by Company. The Executive’s employment under this Agreement may be
terminated prior to the expiration of the Term under the following
circumstances:

 
6.1.1
Termination without Cause or for Good Reason Outside of a Change of Control
Period.

a)
Termination by the Company without Cause. The Company may terminate the
Executive’s employment without Cause at any time by the service of written
notice of termination to the Executive specifying an effective date of such
termination not

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sooner than thirty (30) business days after the date of such notice.
b)
Termination by the Executive for Good Reason. Executive may terminate employment
with the Company for “Good Reason” and such termination will not be a breach of
this Agreement by Executive. For purposes of this paragraph 6.1.1(b), Good
Reason shall mean the occurrence of one of the events set forth below:

(i)
elimination of the Executive's job position or material reduction in duties
and/or reassignment of the Executive to a new position of materially less
authority; or

(ii)
a material reduction in the Executive’s Base Salary.

Notwithstanding the foregoing, the Executive will not be deemed to have
terminated for Good Reason unless (A) the Executive provides written notice to
the Company of the existence of one of the conditions described above within
ninety (90) days after the Executive has knowledge of the initial existence of
the condition, (B) the Company fails to remedy the condition so identified
within thirty (30) days after receipt of such notice (if capable of correction),
(C) the Executive provides a notice of termination to the Company within thirty
(30) days of the expiration of the Company’s period to remedy the condition
specifying an effective date for the Executive’s termination, and (D) the
effective date of the Executive’s termination of employment is within ninety
(90) days after the Executive provides written notice to the Company of the
existence of the condition referred to in clause (A).
(a)
Obligations of the Company. In the event the Executive is Terminated without
Cause or terminates employment for Good Reason outside of a Change of Control
Period, the Executive will receive as termination compensation within thirty
(30) days of the Termination Date: (a) a payment of one (1) times the sum of
Base Salary and Annual Bonus in a lump sum payment; (b) pro rata vesting through
the last day of the month in which the Termination Date occurs of all unvested
awards granted to Executive under the Equity Compensation Plans (provided
performance share units shall only be payable subject to the attainment of the
performance measures for the applicable performance period as provided under the
terms of the applicable award agreement); (c) any Supplemental Matching
Contributions to the Chesapeake Energy Corporation Amended and Restated Deferred
Compensation Plan (the “401(k) Make-Up Plan”) shall be

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immediately vested; and (d) a lump sum payment of any PTO pay accrued but unused
through the Termination Date. For purposes of this Agreement “Annual Bonus”
shall be defined as the average of the annual bonus payments the Executive has
received during the immediately preceding three (3) calendar years unless the
Executive has been employed by the Company or held the position listed in
section 2.1 for less than fifteen (15) months prior to the Termination Date, in
which case, “Annual Bonus” shall be defined as the greater of (i) the
Executive’s target bonus for the year in which the Termination Date occurs or
(ii) the average of the annual bonus payments the Executive has received during
the immediately preceding three (3) calendar years. The right to the foregoing
termination compensation described under clauses (a), (b) and (c) above is
subject to the Executive's execution of the Company's severance agreement which
will operate as a release of all legally waivable claims against the Company and
the Executive's compliance with all of the provisions of this Agreement,
including all post-employment obligations.

6.1.2
Termination without Cause or for Good Reason During a Change of Control Period.

(a)
Termination by the Company without Cause. The Company may terminate the
Executive’s employment without Cause during a Change of Control Period 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.

(b)
Termination by the Executive for Good Reason. Executive may terminate employment
with the Company for “Good Reason” and such termination will not be a breach of
this Agreement by Executive. For purposes of this paragraph 6.1.2(b), Good
Reason during a Change of Control Period shall mean the occurrence of one of the
events set forth below:

(i)
elimination of the Executive's job position or material reduction in duties
and/or reassignment of the Executive to a new position of materially less
authority;

(ii)
a material reduction in Executive’s Base Salary; or

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(iii)
a requirement that the Executive relocate to a location outside of a fifty (50)
mile radius of the location of his office or principal base of operation
immediately prior to the effective date of a Change of Control.

Notwithstanding the foregoing, Executive will not be deemed to have terminated
for Good Reason unless (A) Executive provides written notice to the Company of
the existence of one of the conditions described above within ninety (90) days
after Executive has knowledge of the initial existence of the condition, (B) the
Company fails to remedy the condition so identified within thirty (30) days
after receipt of such notice (if capable of correction), (C) Executive provides
a Notice of Termination to the Company within thirty (30) days of the expiration
of the Company’s period to remedy the condition specifying an effective date for
the Executive’s termination, and (D) the effective date of the Executive’s
termination of employment is within ninety (90) days after Executive provides
written notice to the Company of the existence of the condition referred to in
clause (A).
(c)
Obligations of the Company. In the event the Executive is Terminated without
Cause or terminates employment for Good Reason during a Change of Control
Period, the Executive will receive as termination compensation within thirty
(30) days of the Termination Date: (a) a payment of two (2) times the sum of
Base Salary and Annual Bonus in a lump sum payment; (b) all unvested awards
granted under the Equity Compensation Plans shall be immediately vested
(provided performance share units shall only be payable subject to the
attainment of the performance measures for the applicable performance period as
provided under the terms of the applicable award agreement); (c) any
Supplemental Matching Contributions to the Chesapeake Energy Corporation Amended
and Restated Deferred Compensation Plan (the “401(k) Make-Up Plan”) shall be
immediately vested; and (d) a lump sum payment of any PTO pay accrued but unused
through the Termination Date. The right to the foregoing termination
compensation described under clauses (a), (b) and (c) above is subject to the
Executive's execution of the Company's severance agreement which will operate as
a release of all legally waivable claims against the Company and the Executive's
compliance with all of the provisions of this Agreement, including all
post-employment obligations.

 
6.1.3
Termination for Cause. The Company may terminate the employment of the Executive
hereunder at any time for Cause (as hereinafter defined) (such a termination
being referred to in this

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Agreement as a "Termination For Cause") by giving the Executive written notice
of such termination. As used in this Agreement, "Cause" means:
(i) the willful and continued failure of the Executive to perform substantially
the Executive’s duties with the Company or one of its affiliates (other than any
such failure resulting from incapacity due to physical or mental illness), after
a written demand for substantial performance is delivered to the Executive by
the Board or the Chief Executive Officer of the Company which specifically
identifies the manner in which the Board or Chief Executive Officer believes
that the Executive has not substantially performed the Executive’s duties, or
(ii) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company. For
purposes of this provision, no act, or failure to act, on the part of the
Executive shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer or
based upon the advice of counsel for the Company shall be conclusively presumed
to be done, or omitted to be done, by the Executive in good faith and in the
best interests of the Company, or
(iii) the failure of the Executive to relocate his primary residence to the
Oklahoma City, Oklahoma metropolitan area not later than May 18, 2016 or
(iv) a material breach by the Executive of any of the representations in Section
14.12 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 Termination Date other than a lump sum payment within thirty (30) days
of the Termination Date of any PTO pay accrued but unused through the
Termination Date.
 
6.2
Termination by Executive. The Executive may voluntarily terminate employment
under this Agreement for any reason by the service of written notice of such
termination to the Company specifying an effective date of termination no sooner
than thirty (30) days and no later than sixty (60) days after the date of such
notice; provided, however, if less than thirty (30) days

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remain in the Term, the minimum notice required from Executive under this
Section 6.2 shall be reduced from thirty (30) to seven (7) days. The Company
reserves the right to end the employment relationship at any time after the date
such notice is given to the Company and to pay Executive through the Termination
Date.
 
6.3
Retirement by Executive. In the event the Executive is fifty-five (55) years or
older and the Executive’s employment is terminated under Sections 6.1.1 or 6.2
of this Agreement, the Executive will be (a) eligible for continued
post-retirement vesting of the unvested awards granted under the Equity
Compensation Plans (provided performance share units shall only be payable
subject to the attainment of the performance measures for the applicable
performance period as provided under the terms of the applicable award
agreement); and (b) eligible for accelerated vesting of the unvested
Supplemental Matching Contributions to the Chesapeake Energy Corporation Amended
and Restated Deferred Compensation Plan (the "401(k) Make-Up Plan"). The vesting
under clauses (a) and (b) of this Section 6.3 will be in accordance with the
retirement matrix (the "Retirement Matrix") attached to this Agreement. The
right to acceleration and continued vesting is subject to the Executive’s
execution of the Company’s severance agreement which will include a release of
all legally waivable claims between the parties as of the effective date of the
release except for the Company’s obligation to pay the foregoing severance
compensation and the Executive’s obligation to comply with all post-employment
obligations under this Agreement.

 
6.4
Disability. If the Executive suffers from a physical or mental condition which
in the reasonable judgment of the Company's management prevents the Executive
from being able to perform the duties specified herein for a period of twelve
(12) consecutive weeks, the Executive may be terminated by the Company. In the
event the Executive is terminated due to Disability (a) all unvested awards
granted to the Executive under the Equity Compensation Plans shall be
immediately vested (provided performance share units shall only be payable
subject to the attainment of the performance measures for the applicable
performance period as provided under the terms of the applicable award
agreement); and (b) any Supplemental Matching Contributions to the Chesapeake
Energy 401(k) Make-Up Plan shall be immediately vested. Executive shall also
receive a lump sum payment within thirty (30) days of the Termination Date of
any PTO pay accrued but unused through the Termination Date. The right to the
foregoing compensation due under clauses (a) and (b) above is subject to the
execution by the Executive or the Executive's legal representative of the
Company's severance agreement which will operate as a release of all legally
waivable claims against the Company. In applying this Section 6.4, the Company
will comply with any applicable legal requirements, including the Americans with
Disabilities Act.

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6.5
Death of Executive. If the Executive dies during the term of this Agreement, the
Company may thereafter terminate this Agreement without compensation. In the
event of the Executive’s death the Company will (a) immediately vest all
unvested awards granted to the Executive under the Equity Compensation Plans
(provided performance share units shall only be payable subject to the
attainment of the performance measures for the applicable performance period as
provided under the terms of the applicable award agreement); and (b) immediately
vest any Supplemental Matching Contributions to the Chesapeake Energy 401(k)
Make-Up Plan. Executive’s beneficiaries/estate shall also receive a lump sum
payment within thirty (30) days of death of any PTO pay accrued but
unused through the Termination Date. Amounts payable under this Section 6.5
shall be paid to the beneficiary designated on the Company's universal
beneficiary designation form in effect on the date of the Executive's death. If
the Executive fails to designate a beneficiary or if such designation is
ineffective, in whole or in part, any payment that would otherwise have been
paid under this Section 6.5 shall be paid to the Executive's estate. The right
to the foregoing compensation due under clauses (a) and (b) above is subject to
the execution by the beneficiary, or as applicable, the administrator of the
Executive's estate of the Company's severance agreement which will operate as a
release of all legally waivable claims against the Company.

 
6.6
Effect of Termination. The termination of this Agreement, when accompanied by
the termination of Executive’s employment with the Company, will terminate all
obligations of the Executive to render services on behalf of the Company from
and after the Termination Date, provided that upon termination of this Agreement
and termination of employment for any reason (other than by reason of
Executive’s death), the Executive will maintain the confidentiality of all
information acquired by the Executive during the term of Executive's employment
in accordance with the terms and provisions of the Company’s Confidentiality
Agreement and the Executive shall comply with all other post employment
requirements including Section 6.6 and Sections 7, 8, 9, 10, 11, 12 and 13.
Except as otherwise provided in Sections 4.5 and 6 of this Agreement and payment
of any PTO pay accrued but unused through the Termination Date, 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,
Confidential Information, research, results, test data, instructions, drawings,
sketches, specifications, product data sheets, products, books, DVDs, disks,
memory devices, business plans, marketing plans, documents, correspondence,
furniture, furnishings, equipment, supplies and other items relating to the
Company in the Executive's possession will remain the property of the Company.
Upon termination of employment, the Executive will have the right to retain and
remove all personal property and effects

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which are owned by the Executive and located in the offices of the Company at a
time determined by the Company. All such personal items will be removed from
such offices no later than two (2) days after the Termination Date, 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 Termination Date, 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.
Notwithstanding the foregoing and without discharging any obligations to pay
compensation to the Executive under this Agreement, after notice of the
termination, the Company may request that the Executive not provide any other
services to the Company and not enter the Company's premises before or after the
Termination Date. In the event that the Executive separates employment with the
Company, Executive hereby grants consent to notification by the Company to
Executive's new employer about Executive's rights and obligations under this
Agreement. Upon such termination of employment, the Executive further agrees to
acknowledge compliance with this Agreement in a form reasonably provided by the
Company.
If this Agreement is not terminated pursuant to any of the preceding provisions
of Section 6 or extended by mutual written agreement of the parties prior to the
expiration of the Term, this Agreement and Executive’s employment under this
Agreement will end and Company will have no further obligation to provide any
further payments or benefits to Executive under this Agreement after the
expiration of the Term other than any PTO pay accrued but unused through the
expiration of the Term. Upon expiration of this Agreement, Executive will
continue to be employed with Company on an at will basis until such employment
is terminated by either party, with or without any reason.
 
7.
Non-Competition. For a period of one (1) year after the Executive is no longer
employed by the Company for any reason, the Executive will not knowingly
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 any spacing unit in
which the Company owns an oil and gas interest on the date of the resignation or
termination of the Executive.

 
8.
Non-Solicitation. The Executive agrees that during his employment hereunder, and
for the one (1) year period immediately following termination of employment for
any reason, the Executive shall not solicit or contact any established client or
customer of the Company with a view to inducing or encouraging such established
client or customer to discontinue or curtail any business relationship with the
Company. The Executive further agrees that the Executive will not request or
advise any established clients, customers or suppliers of the Company to
withdraw, curtail or cancel its business with the Company.

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 9.
Non-Solicitation of Employees. The Executive covenants that during the term of
employment and for the one (1) year period immediately following the termination
of employment for any reason, Executive will neither directly nor indirectly
induce nor attempt to induce any executive or employee of the Company to
terminate his employment with the Company to go to work for any other company.

 
10.
Reasonableness. The Company and the Executive have attempted to specify a
reasonable period of time and reasonable restrictions to which this Agreement
shall apply. The Company and Executive agree that if a court or administrative
body should subsequently determine that the terms of this Agreement are greater
than reasonably necessary to protect the Company's interest, the Company agrees
to waive those terms which are found by a court or administrative body to be
greater than reasonably necessary to protect the Company's interest and to
request that the court or administrative body reform this Agreement specifying a
reasonable period of time and such other reasonable restrictions as the court or
administrative body deems necessary.

 
11.
Equitable Relief. The Executive acknowledges that the services to be rendered by
Executive are of a special, unique, unusual, extraordinary, and intellectual
character, which gives them a peculiar value, and the loss of which cannot
reasonably or adequately be compensated in damages in an action at law; and that
a breach by the Executive of any of the provisions contained in this Agreement
will cause the Company irreparable injury and damage. The Executive further
acknowledges that the Executive possesses unique skills, knowledge and ability
and that any material breach of the provisions of this Agreement would be
extremely detrimental to the Company. By reason thereof, the Executive agrees
that the Company shall be entitled, in addition to any other remedies it may
have under this Agreement or otherwise, to injunctive and other equitable relief
to prevent or curtail any breach of this Agreement by him/her.

 
12.
Continued Litigation Assistance. The Executive will cooperate with and assist
the Company and its representatives and attorneys as requested, during and after
the Term, with respect to any litigation, arbitration or other dispute
resolutions by being available for interviews, depositions and/or testimony in
regard to any matters in which the Executive is or has been involved or with
respect to which the Executive has relevant information. The Company will
reimburse the Executive for any reasonable business expenses the Executive may
have incurred in connection with this obligation.

13.
Arbitration. Any disputes, claims or controversies between the Company and
Executive including, but not limited to those arising out of or related to this
Agreement or out of the parties' employment relationship (together, “Employment
Matter”), shall be settled by arbitration as provided herein. This agreement
shall survive the termination or rescission of this Agreement. All arbitration
shall be in accordance with Rules of the American Arbitration Association,
including discovery, and shall be undertaken pursuant to the Federal Arbitration
Act. Arbitration will be held in Oklahoma City, Oklahoma unless the parties
mutually agree to another location. The

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decision of the arbitrator will be enforceable in any court of competent
jurisdiction. The parties, however, agree that the Company shall be entitled to
obtain injunctive or other equitable relief to enforce the provisions of this
Agreement in a court of competent jurisdiction. The parties further agree that
this arbitration provision is not only applicable to the Company but its
affiliates, officers, directors, employees and related parties. Executive agrees
that he shall have no right or authority for any dispute to be brought, heard or
arbitrated as a class or collective action, or in a representative or a private
attorney general capacity on behalf of a class of persons or the general public.
No class, collective or representative actions are thus allowed to be arbitrated
Executive agrees that he must pursue any claims that he may have solely on an
individual basis through arbitration. The Company will reimburse the Executive
for all legal fees and expenses reasonably incurred (provided such legal fees
are calculated on an hourly, and not on a contingency fee basis), as well as
costs and expenses reasonably incurred in connection with an Employment Matter.
Reimbursement by the Company shall be made as soon as practicable following
final resolution of the Employment Matter to the extent the Company receives
appropriate documentation of such attorney’s fees, costs and expenses which
shall be provided no later than December 31 of the year in which the Employment
Matter is resolved, provided, however, the Executive will only be entitled to
reimbursement if the Executive is successful in respect of one or more material
claims or defenses brought, raised or pursued in connection with such Employment
Matter. Payment of reimbursement for such fees and expenses shall be made no
later than December 31 of the year immediately following the year of resolution.

 14.
Miscellaneous. The parties further agree as follows:

 
14.1
Time. Time is of the essence of each provision of this Agreement.

 
14.2
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 express mail to the
party designated to receive such notice, or on the date following the day sent
by overnight courier, or on the third 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
6100 N. Western Ave.
Oklahoma City, OK 73118
Attn: James L. Hawkins
 
To the Executive:
The most recent home address reflected in the records of the Company.

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14.3
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; provided, however, the Company may assign
this Agreement to any wholly owned affiliate or subsidiary of Chesapeake Energy
Corporation without Executive's consent as well as to any purchaser of the
Company.

 
14.4
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. Except as provided for in Section 13, this Agreement is
intended to be interpreted, construed and enforced in accordance with the laws
of the State of Oklahoma.

 
14.5
Entire Agreement. This Agreement, any documents executed in connection with this
Agreement, any documents specifically referred to in this Agreement and the
Employment Policies Manual constitute 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.

 
14.6
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,
and the Executive waives the consent requirement of Section 14.3 to effect such
assumption.

 
14.7
Supersession. 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, any documents executed in connection with this
Agreement, any documents specifically referred to in this Agreement and the
Employment Policies Manual. In the event of a conflict between the Employment
Policies Manual and this Agreement, this Agreement will control in all respects.

 
14.8
Third-Party Beneficiary. The Company's affiliated entities and partnerships are
beneficiaries of all terms and provisions of this Agreement and entitled to all
rights hereunder.

 
14.9
Section 409A. This Agreement is intended to be exempt from Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), and

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related U.S. Treasury regulations or official pronouncements (“Section 409A”)
and any ambiguous provision will be construed in a manner that is compliant with
such exemption; provided, however, if and to the extent that any compensation
payable pursuant to this Agreement is determined to be subject to Section 409A,
this Agreement will be construed in a manner that will comply with Section 409A.
Notwithstanding any provision to the contrary in this Agreement, if the
Executive is deemed on his Termination Date to be a “specified employee” within
the meaning of that term under Section 409A, then any payments and benefits
under this Agreement that are subject to Section 409A and paid by reason of a
termination of employment shall be made or provided on the later of (a) the
payment date set forth in this Agreement or (b) the date that is the earliest of
(i) the expiration of the six-month period measured from the date of the
Executive’s termination of employment or (ii) the date of the Executive’s death
(the “Delay Period”). Payments and benefits subject to the Delay Period shall be
paid or provided to the Executive without interest for such delay. Termination
of employment as used throughout this Agreement shall refer to a separation from
service within the meaning of Section 409A. To the extent required to comply
with Section 409A, references to a “resignation,” “termination,” “termination of
employment” or like terms throughout this Agreement shall be interpreted
consistent with the meaning of “separation from service” as defined in Section
409A.
14.10
Dodd-Frank Act. Notwithstanding anything in this Agreement or any other
agreement between the Company and/or its related entities and Executive to the
contrary, Executive acknowledges that the Dodd-Frank Wall Street Reform and
Consumer Protection Act (“Act”) may have the effect of requiring certain
executives of the Company and/or its related entities to repay the Company, and
for the Company to recoup from such executives, erroneously awarded amounts of
incentive-based compensation. If, and only to the extent, the Act, any rules and
regulations promulgated by thereunder by the Securities and Exchange Commission
or any similar federal or state law requires the Company to recoup any
erroneously awarded incentive-based compensation that the Company has paid or
granted to Executive, Executive hereby agrees, even if Executive has terminated
his employment with the Company, to promptly repay such erroneously awarded
incentive compensation to the Company upon its written request. This Section
shall survive the termination of this Agreement.

14.11
Maximum Payments by the Company.

(a)
It is the objective of this Agreement to maximize Executive’s Net After-Tax
Benefit (as defined herein) if payments or benefits provided under this
Agreement are subject to excise tax under Section 4999 of the Code.
Notwithstanding any other provisions of this Agreement, in the event that any
payment or benefit by the Company or otherwise to or for the benefit of
Executive, whether paid or payable or distributed or

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distributable pursuant to the terms of this Agreement or otherwise, including,
by example and not by way of limitation, acceleration by the Company or
otherwise of the date of vesting or payment or rate of payment under any plan,
program, arrangement or agreement of the Company (all such payments and
benefits, including the payments and benefits under Section 6 hereof, being
hereinafter referred to as the “Total Payments”), would be subject (in whole or
in part) to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then the cash severance payments shall first be reduced, and the non-cash
severance payments shall thereafter be reduced, to the extent necessary so that
no portion of the Total Payments shall be subject to the Excise Tax, but only if
(i) the net amount of such Total Payments, as so reduced (and after subtracting
the net amount of federal, state and local income taxes on such reduced Total
Payments and after taking into account the phase out of itemized deductions and
personal exemptions attributable to such reduced Total Payments), is greater
than or equal to (ii) the net amount of such Total Payments without such
reduction (but after subtracting the net amount of federal, state and local
income taxes on such Total Payments and the amount of Excise Tax to which
Executive would be subject in respect of such unreduced Total Payments and after
taking into account the phase out of itemized deductions and personal exemptions
attributable to such unreduced Total Payments).
(b)
The Total Payments shall be reduced by the Company in the following order: (i)
reduction of any cash severance payments otherwise payable to Executive that are
exempt from Section 409A of the Code, (ii) reduction of any other cash payments
or benefits otherwise payable to Executive that are exempt from Section 409A of
the Code, but excluding any payments attributable to the acceleration of vesting
or payments with respect to any equity award with respect to the Company’s
common stock that is exempt from Section 409A of the Code, (iii) reduction of
any other payments or benefits otherwise payable to Executive on a pro-rata
basis or such other manner that complies with Section 409A of the Code, but
excluding any payments attributable to the acceleration of vesting and payments
with respect to any equity award with respect to the Company’s common stock that
are exempt from Section 409A of the Code, and (iv) reduction of any payments
attributable to the acceleration of vesting or payments with respect to any
other equity award with respect to the Company’s common stock that are exempt
from Section 409A of the Code.

(c)
For purposes of determining whether and the extent to which the Total Payments
will be subject to the Excise Tax, (i) no portion of the Total Payments the
receipt or enjoyment of which Executive shall have waived at such time and in
such manner as not to constitute a “payment” within the meaning of Section
280G(b) of the Code shall be

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taken into account, (ii) no portion of the Total Payments shall be taken into
account which, in the written opinion of independent auditors of nationally
recognized standing (“Independent Advisors”) selected by the Company, does not
constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the
Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in
calculating the Excise Tax, no portion of such Total Payments shall be taken
into account which, in the opinion of Independent Advisors, constitutes
reasonable compensation for services actually rendered, within the meaning of
Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in
Section 280G(b)(3) of the Code) allocable to such reasonable compensation, and
(iii) the value of any non-cash benefit or any deferred payment or benefit
included in the Total Payments shall be determined by the Independent Advisors
in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
The costs of obtaining such determination shall be borne by the Company.

14.12
Executive’s Representation. Executive represents and warrants as of the date
hereof that: (i) he is not subject to any contract, arrangement, policy or
understanding, or to any statute, governmental rule or regulation, that in any
way limits his ability to enter into and fully perform his obligation under this
Agreement and (ii) he is not otherwise unable to enter into and fully perform
his obligations under this Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Agreement effective the
date first above written.

 
 
CHESAPEAKE ENERGY CORPORATION,
an Oklahoma corporation
 
 
 
 
 
 
 
By:
/s/ Robert D. Lawler
 
 
Robert D. Lawler, Chief Executive Officer
 
 
(the "Company")
 
 
 
 
 
 
 
By:
/s/ Frank Patterson
 
 
Frank Patterson, Individually
 
 
(the "Executive")

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RETIREMENT MATRIX

Service Yrs
<55
55-59
60-64
>=65
0-5
0%
0%
0%
0%
5-10
0%
60%
80%
100%
10-15
0%
80%
100%
100%
15-20
0%
100%
100%
100%
20+
0%
100%
100%
100%

Frank Patterson EA 5-21-15

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