Document:

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                                                                  EXHIBIT 10.2.6

                              EMPLOYMENT AGREEMENT

                                     between

                                 J. MARK LESTER

                                       and

                          CHESAPEAKE ENERGY CORPORATION

                             Effective July 1, 2000

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>  <C>                                                                    <C>
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..............................................    2
     4.1  Base Salary......................................................    2
     4.2  Bonus............................................................    2
     4.3  Stock Options....................................................    2
     4.4  Benefits.........................................................    3
          4.4.1 Vacation ..................................................    3
          4.4.2 Membership Dues ...........................................    3
          4.4.3 Compensation Review........................................    3

5.   Term..................................................................    3

6.   Termination...........................................................    3
     6.1  Termination by Company...........................................    3
          6.1.1 Termination without Cause..................................    4
          6.1.2 Termination for Cause......................................    4
          6.1.3 Termination After Change in Control........................    4
     6.2  Termination by Executive.........................................    5
     6.3  Incapacity of Executive..........................................    5
     6.4  Death of Executive...............................................    5
     6.5  Effect of Termination............................................    6

7.   Confidentiality ......................................................    6

8.   Noncompetition........................................................    7

9.   Proprietary Matters ..................................................    7
</TABLE>

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                          TABLE OF CONTENTS (continued)

<TABLE>
<S>  <C>                                                                    <C>
10.  Arbitration ..........................................................    8

11.  Miscellaneous ........................................................    8
     11.1 Time.............................................................    8
     11.2 Notices..........................................................    8
     11.3 Assignment.......................................................    9
     11.4 Construction.....................................................    9
     11.5 Entire Agreement.................................................    9
     11.6 Binding Effect...................................................    9
     11.7 Attorney's Fees..................................................    9
     11.8 Supersession.....................................................    9
</TABLE>

<PAGE>   4

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is made effective July 1, 2000, between CHESAPEAKE
ENERGY CORPORATION, an Oklahoma corporation (the "Company"), and J. Mark Lester,
an individual (the "Executive") and replaces and supersedes that certain
Employment Agreement between Company and Executive dated July 1, 1997.

                                   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 full-time basis.
Throughout the term of this Agreement, the Executive will use the Executive's
best efforts and due diligence to assist the Company in achieving the most
profitable operation of the Company and the Company's affiliated entities
consistent with developing and maintaining a quality business operation.

         2.1      Specific Duties. The Executive will serve as Senior Vice
                  President - Exploration for the Company. The Executive will
                  perform all of the services required to fully and faithfully
                  execute the office and position to which the Executive is
                  appointed and such other services as may be reasonably
                  requested by the Executive's supervisor. During the term of
                  this Agreement, the Executive may be nominated for election or
                  appointed to serve as a director or officer of the Company's
                  subsidiaries as determined in the board of directors' sole
                  discretion.

         2.2      Supervision. The services of the Executive will be requested
                  and directed by the President and Chief Operating Officer, Mr.
                  Tom L. Ward, and the Chief Executive Officer, Mr. Aubrey K.
                  McClendon.

         2.3      Rules and Regulations. The Company currently has an Employment
                  Policies Manual which sets forth the general human resources
                  policies of the Company and addresses frequently asked
                  questions regarding the

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                  Company. The Executive agrees to comply with the Employment
                  Policies Manual except to the extent inconsistent with this
                  Agreement. The Employment Policies Manual is subject to change
                  without notice in the sole discretion of the Company at any
                  time.

         2.4      Stock Investment. The Executive agrees to hold not less than
                  one thousand (1,000) shares of the Company's common stock
                  during the term of this Agreement.

3.       Other Activities. Unless the Executive has obtained the prior written
         approval of the board of directors of the Company, the Executive will
         not: (a) engage in business independent of the Executive's employment
         by the Company; (b) serve as an officer, general partner or member in
         any corporation, partnership, company, or firm; (c) directly or
         indirectly invest in, participate in or acquire an interest in any oil
         and gas business, including, without limitation, (i) producing oil and
         gas, (ii) drilling, owning or operating oil and gas leases or wells,
         (iii) providing services or materials to the oil and gas industry, (iv)
         marketing or refining oil or gas, or (v) owning any interest in any
         corporation, partnership, company or entity which conducts any of the
         foregoing activities. The limitation in this paragraph 3 will not
         prohibit an investment by the Executive in publicly traded securities;
         or the continued direct ownership and operation of oil and gas
         interests and leases to the extent such interests were owned by the
         Executive on the Executive's first date of employment with the Company.
         The Executive agrees not to directly or indirectly acquire any
         additional oil and gas interests or increase ownership of any oil and
         gas interests owned by the Executive on the Executive's first date of
         employment with 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 Two Hundred Five Thousand Dollars
                  ($205,000.00), will be paid to the Executive in equal
                  semi-monthly installments beginning July 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.

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         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 and governed by 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 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 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. 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 in an
                           amount not to exceed Five Hundred Dollars ($500.00)
                           per month; and (b) the reasonable cost of any
                           approved 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.

5. Term. The employment relationship evidenced by this Agreement is an "at will"
employment relationship and the Company reserves the right to terminate the
Executive at any time with or without cause. In the absence of such termination,
this Agreement will extend for a term of three (3) years commencing on July 1,
2000, and ending on June 30, 2003 (the "Expiration Date").

6. Termination. This Agreement will continue in effect until the expiration of
the term stated at paragraph 5 of this Agreement unless earlier terminated
pursuant to this paragraph 6.

         6.1      Termination by Company. The Company will have the following
                  rights to terminate this Agreement:

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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, or the Company elects not to renew
                           this Agreement, the Executive will receive as
                           termination compensation: (a) Base Salary for a
                           period of ninety (90) days; (b) any benefits payable
                           by operation of paragraph 4.4 of this Agreement; and
                           (c) any vacation pay accrued through the Termination
                           Date. The termination compensation in (a) shall be
                           paid only if the Executive executes the Company's
                           standard termination agreement releasing all legally
                           waivable claims arising from the Executive's
                           employment.

                  6.1.2    Termination for Cause. The Company may terminate this
                           Agreement for cause if the Executive: (a)
                           misappropriates the property of the Company or
                           commits any other act of dishonesty; (b) engages in
                           personal misconduct which materially injures the
                           Company; (c) willfully violates any law or regulation
                           relating to the business of the Company which results
                           in injury to the Company; or (d) willfully and
                           repeatedly fails to perform the Executive's duties
                           hereunder. In the event this Agreement is terminated
                           for cause, the Company will not have any obligation
                           to provide any further payments or benefits to the
                           Executive after the Termination Date.

                  6.1.3    Termination after Change of Control. If, during the
                           term of this Agreement, there is a "Change of
                           Control" and within one (1) year from the effective
                           date of such Change of Control: (a) this Agreement
                           expires and is not extended; or (b) the Executive
                           resigns as a result of (i) a reduction in the
                           Executive's compensation (including the Executive's
                           then current Base Salary under Paragraphs 4.1 of this
                           Agreement and bonuses equal to those paid to the
                           Executive during calendar year 2000 under Paragraph
                           4.2 of this Agreement), or (ii) a required relocation
                           more than twenty five (25) miles from the Executive's
                           then current place of employment; or within one (1)
                           year from the effective date of the Change of Control
                           the Executive is terminated other than under
                           Paragraphs 6.1.2, 6.3 or 6.4 based on adequate
                           grounds; then the Executive will be entitled to a
                           severance payment (in addition to any other amounts
                           payable to the Executive under this Agreement or
                           otherwise, excluding any Base Salary payable under
                           Paragraph 6.1.1, as of the date of

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                           termination or resignation hereunder) in an amount
                           equal to six (6) months of the Executive's then
                           current Base Salary under Paragraph 4.1 of this
                           Agreement plus bonuses equal to those paid to the
                           Executive during calendar year 2000 under Paragraph
                           4.2. 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 Chesapeake Energy Corporation
                           ("Chesapeake") 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 Chesapeake representing the
                           right to vote fifty one percent (51%) or more of the
                           combined voting power of Chesapeake's then
                           outstanding securities having the right to vote for
                           the election of directors, or (ii) a merger,
                           consolidation, sale of assets or contested election
                           or (iii) any combination of (i) and (ii) which
                           results in a majority of the members of Chesapeake's
                           board of directors being replaced by directors who
                           were not nominated and approved by the existing board
                           of directors.

         6.2      Termination by Executive. The Executive may voluntarily
                  terminate this Agreement with or without cause by the service
                  of written notice of such termination to the Company
                  specifying a Termination Date no sooner than thirty (30) days
                  after the date of such notice. 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 Termination Date.

         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 may be deemed as a
                  termination for cause, any compensation payable under
                  paragraph 4 of this Agreement will be continued for ninety
                  (90) days following the Termination Date. Notwithstanding the
                  foregoing, the Executive's Base Salary specified in paragraph
                  4.1 of this Agreement will be reduced by any benefits payable
                  under any disability plans.

         6.4      Death of Executive. If the Executive dies during the term of
                  this Agreement, the Company may thereafter terminate this
                  Agreement without compensation to the Executive's estate
                  except: (a) the obligation to continue the Base Salary
                  payments under paragraph 4.1 of this Agreement for ninety (90)
                  days

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                  following the date of the Executive's death; and (b) the
                  benefits described in paragraph 4.4 of this Agreement accrued
                  through the date of the Executive's death.

         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 from and after the Termination Date,
                  provided that the Executive will maintain the confidentiality
                  of all information acquired by the Executive during the term
                  of Executive's employment in accordance with paragraph 7 of
                  this Agreement. Except as otherwise provided in paragraph 6 of
                  this Agreement, no accrued bonus, severance pay or other form
                  of compensation will be payable by the Company to the
                  Executive by reason of the termination of this Agreement. All
                  keys, entry cards, credit cards, files, records, financial
                  information, furniture, furnishings, equipment, supplies and
                  other items relating to the Company in the Executive's
                  possession 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 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.

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

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person to whom disclosed without a breach of this Agreement. On request by the
Company, the Company will be entitled to the return 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 three (3) 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 6.1.3 or 6.2 above, or termination for cause
pursuant to paragraph 6.1.2 above, Executive 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 wells or other such oil and gas exploration,
development or production activities within one (1) mile of any operations or
ownership interests of the Company or its affiliated corporations, partnerships
or entities for which Executive had primary responsibilities within three (3)
years prior to the Executive's Termination Date and while employed with the
Company. 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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<PAGE>   11

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 200% 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
                                   Post Office Box 18496
                                   Oklahoma City, OK 73154-0496
                                   Attn: Aubrey K. McClendon

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<PAGE>   12

                  To the Executive:     Mr. J. Mark Lester
                                        13525 Green Cedar Lane
                                        Edmond, OK 73131

         11.3     Assignment. Neither this Agreement nor any of the parties'
                  rights or obligations hereunder can be transferred or assigned
                  without the prior written consent of the other parties to this
                  Agreement; provided, however, the Company may assign this
                  Agreement to any wholly owned affiliate or subsidiary of the
                  Company without Executive's consent.

         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 located 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, and the Executive waives the
                  consent requirement of paragraph 11.3 to effect such
                  assumption.

         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, except with respect to any
                  arbitration proceeding conducted pursuant to paragraph 10
                  above.

         11.8     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 and
                  the Employment Policies Manual

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                  and not by any other agreements or otherwise. In the event of
                  a conflict between the Employment Policies Manual and this
                  Agreement, this Agreement will control in all respects.

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

                                 CHESAPEAKE ENERGY CORPORATION, an
                                 Oklahoma corporation

                                 By: /s/ Aubrey K. McClendon
                                    --------------------------------------------
                                    Aubrey K. McClendon, Chief Executive Officer
                                    (the "Company")

                                 By: /s/ J. Mark Lester
                                    --------------------------------------------
                                    J. Mark Lester, Individually
                                    (the "Executive")

                                       10<PAGE>   1
                                                                  EXHIBIT 10.2.7

                              EMPLOYMENT AGREEMENT

                                     between

                                  HENRY J. HOOD

                                       and

                          CHESAPEAKE ENERGY CORPORATION

                             Effective July 1, 2000

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                          Page
                                                                          ----
<S>                                                                       <C>
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......................................       2
         4.1  Base Salary..............................................       2
         4.2  Bonus....................................................       2
         4.3  Stock Options............................................       2
         4.4  Benefits.................................................       3
              4.4.1  Vacation .........................................       3
              4.4.2  Membership Dues ..................................       3
              4.4.3  Compensation Review...............................       3

5.       Term..........................................................       3

6.       Termination...................................................       3
         6.1  Termination by Company...................................       3
              6.1.1  Termination without Cause.........................       4
              6.1.2  Termination for Cause.............................       4
              6.1.3  Termination After Change in Control...............       4
         6.2  Termination by Executive.................................       5
         6.3  Incapacity of Executive..................................       5
         6.4  Death of Executive.......................................       5
         6.5  Effect of Termination....................................       6

7.       Confidentiality...............................................       6

8.       Noncompetition................................................       7

9.       Proprietary Matters...........................................       7
</TABLE>

<PAGE>   3

                          TABLE OF CONTENTS (continued)

<TABLE>
<S>                                                                         <C>
10.      Arbitration...................................................       8

11.      Miscellaneous.................................................       8
         11.1  Time....................................................       8
         11.2  Notices.................................................       8
         11.3  Assignment..............................................       9
         11.4  Construction............................................       9
         11.5  Entire Agreement........................................       9
         11.6  Binding Effect..........................................       9
         11.7  Attorney's Fees.........................................       9
         11.8  Supersession............................................       9
</TABLE>

<PAGE>   4
                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is made effective July 1, 2000, between CHESAPEAKE
ENERGY CORPORATION, an Oklahoma corporation (the "Company"), and Henry J. Hood,
an individual (the "Executive") and replaces and supersedes that certain
Employment Agreement between Company and Executive dated July 1, 1997.

                                  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 full-time basis.
Throughout the term of this Agreement, the Executive will use the Executive's
best efforts and due diligence to assist the Company in achieving the most
profitable operation of the Company and the Company's affiliated entities
consistent with developing and maintaining a quality business operation.

         2.1      Specific Duties. The Executive will serve as Senior Vice
                  President - Land and Legal for the Company. The Executive will
                  perform all of the services required to fully and faithfully
                  execute the office and position to which the Executive is
                  appointed and such other services as may be reasonably
                  requested by the Executive's supervisor. During the term of
                  this Agreement, the Executive may be nominated for election or
                  appointed to serve as a director or officer of the Company's
                  subsidiaries as determined in the board of directors' sole
                  discretion.

         2.2      Supervision. The services of the Executive will be requested
                  and directed by the President and Chief Operating Officer, Mr.
                  Tom L. Ward, and the Chief Executive Officer, Mr. Aubrey K.
                  McClendon.

         2.3      Rules and Regulations. The Company currently has an Employment
                  Policies Manual which sets forth the general human resources
                  policies of the Company and addresses frequently asked
                  questions regarding the

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<PAGE>   5

                  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. The Executive agrees to hold not less than
                  one thousand (1,000) shares of the Company's common stock
                  during the term of this Agreement.

3.       Other Activities. Unless the Executive has obtained the prior written
         approval of the board of directors of the Company, the Executive will
         not: (a) engage in business independent of the Executive's employment
         by the Company; (b) serve as an officer, general partner or member in
         any corporation, partnership, company, or firm; (c) directly or
         indirectly invest in, participate in or acquire an interest in any oil
         and gas business, including, without limitation, (i) producing oil and
         gas, (ii) drilling, owning or operating oil and gas leases or wells,
         (iii) providing services or materials to the oil and gas industry, (iv)
         marketing or refining oil or gas, or (v) owning any interest in any
         corporation, partnership, company or entity which conducts any of the
         foregoing activities. The limitation in this paragraph 3 will not
         prohibit an investment by the Executive in publicly traded securities;
         or the continued direct ownership and operation of oil and gas
         interests and leases to the extent such interests were owned by the
         Executive on the Executive's first date of employment with the Company.
         The Executive agrees not to directly or indirectly acquire any
         additional oil and gas interests or increase ownership of any oil and
         gas interests owned by the Executive on the Executive's first date of
         employment with 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 Two Hundred Five
                    Thousand Dollars ($205,000.00), will be paid to the
                    Executive in equal semi-monthly installments beginning July
                    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.

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<PAGE>   6

   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 and governed by 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 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 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. 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 in an amount not to exceed Five Hundred Dollars
                  ($500.00) per month; and (b) the reasonable cost of any
                  approved 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.

5. Term. The employment relationship evidenced by this Agreement is an "at will"
employment relationship and the Company reserves the right to terminate the
Executive at any time with or without cause. In the absence of such termination,
this Agreement will extend for a term of three (3) years commencing on July 1,
2000, and ending on June 30, 2003 (the "Expiration Date").

6. Termination. This Agreement will continue in effect until the expiration of
the term stated at paragraph 5 of this Agreement unless earlier terminated
pursuant to this paragraph 6.

         6.1      Termination by Company. The Company will have the following
                  rights to terminate this Agreement:

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<PAGE>   7

                  6.1.1    Termination without Cause. The Company may terminate
                           this Agreement without cause at any time by the
                           service of written notice of termination to the
                           Executive specifying an effective date of such
                           termination not sooner than sixty (60) business days
                           after the date of such notice (the "Termination
                           Date"). In the event the Executive is terminated
                           without cause, or the Company elects not to renew
                           this Agreement, the Executive will receive as
                           termination compensation: (a) Base Salary for a
                           period of ninety (90) days; (b) any benefits payable
                           by operation of paragraph 4.4 of this Agreement; and
                           (c) any vacation pay accrued through the Termination
                           Date. The termination compensation in (a) shall be
                           paid only if the Executive executes the Company's
                           standard termination agreement releasing all legally
                           waivable claims arising from the Executive's
                           employment.

                  6.1.2    Termination for Cause. The Company may terminate this
                           Agreement for cause if the Executive: (a)
                           misappropriates the property of the Company or
                           commits any other act of dishonesty; (b) engages in
                           personal misconduct which materially injures the
                           Company; (c) willfully violates any law or regulation
                           relating to the business of the Company which results
                           in injury to the Company; or (d) willfully and
                           repeatedly fails to perform the Executive's duties
                           hereunder. In the event this Agreement is terminated
                           for cause, the Company will not have any obligation
                           to provide any further payments or benefits to the
                           Executive after the Termination Date.

                  6.1.3    Termination after Change of Control. If, during the
                           term of this Agreement, there is a "Change of
                           Control" and within one (1) year from the effective
                           date of such Change of Control: (a) this Agreement
                           expires and is not extended; or (b) the Executive
                           resigns as a result of (i) a reduction in the
                           Executive's compensation (including the Executive's
                           then current Base Salary under Paragraphs 4.1 of this
                           Agreement and bonuses equal to those paid to the
                           Executive during calendar year 2000 under Paragraph
                           4.2 of this Agreement), or (ii) a required relocation
                           more than twenty five (25) miles from the Executive's
                           then current place of employment; or within one (1)
                           year from the effective date of the Change of Control
                           the Executive is terminated other than under
                           Paragraphs 6.1.2, 6.3 or 6.4 based on adequate
                           grounds; then the Executive will be entitled to a
                           severance payment (in addition to any other amounts
                           payable to the Executive under this Agreement or
                           otherwise, excluding any Base Salary payable under
                           Paragraph 6.1.1, as of the date of

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<PAGE>   8

                           termination or resignation hereunder) in an amount
                           equal to six (6) months of the Executive's then
                           current Base Salary under Paragraph 4.1 of this
                           Agreement plus bonuses equal to those paid to the
                           Executive during calendar year 2000 under Paragraph
                           4.2. 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 Chesapeake Energy Corporation
                           ("Chesapeake") 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 Chesapeake representing the
                           right to vote fifty one percent (51%) or more of the
                           combined voting power of Chesapeake's then
                           outstanding securities having the right to vote for
                           the election of directors, or (ii) a merger,
                           consolidation, sale of assets or contested election
                           or (iii) any combination of (i) and (ii) which
                           results in a majority of the members of Chesapeake's
                           board of directors being replaced by directors who
                           were not nominated and approved by the existing board
                           of directors.

         6.2        Termination by Executive. The Executive may voluntarily
                    terminate this Agreement with or without cause by the
                    service of written notice of such termination to the Company
                    specifying a Termination Date no sooner than thirty (30)
                    days after the date of such notice. 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 Termination Date.

         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 may be
                    deemed as a termination for cause, any compensation payable
                    under paragraph 4 of this Agreement will be continued for
                    ninety (90) days following the Termination Date.
                    Notwithstanding the foregoing, the Executive's Base Salary
                    specified in paragraph 4.1 of this Agreement will be reduced
                    by any benefits payable under any disability plans.

         6.4        Death of Executive. If the Executive dies during the term of
                    this Agreement, the Company may thereafter terminate this
                    Agreement without compensation to the Executive's estate
                    except: (a) the obligation to continue the Base Salary
                    payments under paragraph 4.1 of this Agreement for ninety
                    (90) days

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<PAGE>   9

                    following the date of the Executive's death; and (b) the
                    benefits described in paragraph 4.4 of this Agreement
                    accrued through the date of the Executive's death.

         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 from and after the
                    Termination Date, provided that the Executive will maintain
                    the confidentiality of all information acquired by the
                    Executive during the term of Executive's employment in
                    accordance with paragraph 7 of this Agreement. Except as
                    otherwise provided in paragraph 6 of this Agreement, no
                    accrued bonus, severance pay or other form of compensation
                    will be payable by the Company to the Executive by reason of
                    the termination of this Agreement. All keys, entry cards,
                    credit cards, files, records, financial information,
                    furniture, furnishings, equipment, supplies and other items
                    relating to the Company in the Executive's possession 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 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.

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

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person to whom disclosed without a breach of this Agreement. On request by the
Company, the Company will be entitled to the return 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 three (3) 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 6.1.3 or 6.2 above, or termination for cause
pursuant to paragraph 6.1.2 above, Executive 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 wells or other such oil and gas exploration,
development or production activities within one (1) mile of any operations or
ownership interests of the Company or its affiliated corporations, partnerships
or entities for which Executive had primary responsibilities within three (3)
years prior to the Executive's Termination Date and while employed with the
Company. 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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<PAGE>   11

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 200% 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
                                          Post Office Box 18496
                                          Oklahoma City, OK   73154-0496
                                          Attn: Aubrey K. McClendon

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<PAGE>   12

                  To the Executive:           Mr. Henry J. Hood
                                              6700 N.W. Grand Blvd.
                                              Oklahoma City, OK  73116

         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; provided, however, the Company may assign this
                  Agreement to any wholly owned affiliate or subsidiary of the
                  Company without Executive's consent.

         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 located 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, and the Executive waives the
                  consent requirement of paragraph 11.3 to effect such
                  assumption.

         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, except with respect to any
                  arbitration proceeding conducted pursuant to paragraph 10
                  above.

         11.8     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 and
                  the Employment Policies Manual

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<PAGE>   13

                  and not by any other agreements or otherwise. In the event of
                  a conflict between the Employment Policies Manual and this
                  Agreement, this Agreement will control in all respects.

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

                              CHESAPEAKE ENERGY CORPORATION, an
                              Oklahoma corporation

                              By: /s/ Aubrey K. McClendon
                                  --------------------------------------------
                                  Aubrey K. McClendon, Chief Executive Officer
                                  (the "Company")

                              By: /s/ Henry J. Hood
                                  --------------------------------------------
                                  Henry J. Hood, Individually
                                  (the "Executive")

                                       10

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