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June 10, 2021
VIA HAND DELIVERY
Frank J. Patterson
[City, State, Zip]
Your employment with Chesapeake Energy Corporation and any applicable subsidiaries or affiliates (the “Company”) will terminate effective June 11, 2021 (the “Termination Date”).
This letter, along with the attached General Release, will reflect your Severance Agreement with the Company, provided you sign and return copies of both these documents no later than twenty-one (21) days from the date you receive them, but you may not execute the General Release prior to June 11, 2021.
Regardless of whether you accept this Severance Agreement, if you have any Company property in your possession, you must return it without delay. In addition to any electronic devices and other physical property of the Company, you must also return all originals and any copies of company records. This includes any disks, files, notebooks, etc. you have personally generated or maintained with respect to the Company’s business, as well as any Company records in your possession.
1. Severance. Pursuant to Section 6.1.1(c) of your Employment Agreement effective January 1, 2019 (the “Employment Agreement”), you are entitled to the following severance payments: (a) a payment of one (1) times the sum of your Base Salary and Annual Bonus (as defined in your Employment Agreement) in a lump sum payment; (b) a lump sum payment of any paid time off accrued and unused through June 11, 2021; and (c) a lump sum payment equal to twelve (12) months of your monthly COBRA premiums. You acknowledge and agree that: (a) your current base salary is $683,100; (b) the bonus payments you received during the immediately preceding three (3) calendar years for purposes of calculating your Annual Bonus were $1,108,821 in 2018, $811,181 in 2019 and $725,873 in 2020, and the average of such amounts is $881,958; (c) one (1) times the sum of $683,100 and $881,958 is $1,565,058; (d) your accrued and unused paid time off is valued at $81,853.77; (e) your monthly COBRA premium is $927.78, and the total premiums for twelve (12) months is $11,133.36; (f) the 10-day notice period set forth in Section 6.1.1(a) of your Employment Agreement is hereby waived in exchange for an additional payment in the amount of $26,273.08; and (f) you are not entitled to receive any other severance benefits from the Company or any of its affiliates pursuant to your Employment Agreement or any other
plan, program or arrangement. Your total severance payment of $1,684,318.21 will be paid to you within thirty (30) days following the Termination Date, subject to your execution of this Severance Agreement and the General Release as provided herein.
2. Separation from Employment; Deemed Resignations. Your employment with the Company shall end on the Termination Date and, as of the Termination Date, you shall no longer have an employment relationship with the Company or any its affiliates. You acknowledge and agree that, as of the Termination Date, you will be deemed to have automatically resigned, to the extent applicable: (a) as an officer of the Company and each affiliate of the Company for which you served as an officer; (b) from the board of directors or board of managers (or similar governing body) of the Company and each affiliate of the Company for which you served as a director or manager; and (c) from the board of directors or board of managers (or similar governing body) of any corporation, limited liability entity, unlimited liability entity or other entity in which the Company or any other affiliate of the Company holds an equity interest and with respect to which board of directors or board of managers (or similar governing body) you served as the Company’s or such other affiliate’s member’s designee or other representative.
3. General Release. As indicated above, you will return an executed copy of this Severance Agreement and the attached General Release within twenty-one (21) days of your receipt of these documents, but you may not execute the General Release prior to June 11, 2021. By signing this Severance Agreement, you are agreeing that once seven (7) days have passed from the date you sign the General Release, you will not attempt to revoke or rescind the General Release at any time in the future. In addition, you are representing that you fully understand the terms of this Severance Agreement and the General Release and will have had an opportunity to seek legal advice regarding this Severance Agreement and the General Release, if you desire to do so, before signing these documents. You are also representing to the Company that you have not commenced or filed, and do not intend to commence or file, any action, administrative charge or complaint against the Company or any of its subsidiaries or affiliates in regard to your employment. You are further representing that you have not otherwise acted in any way that would be or have been prohibited by your Employment Agreement or this Severance Agreement once it becomes effective.
4. Employment Agreement. You and the Company agree and acknowledge that Sections 7, 8, 9, 10, 11, 12, and 13 of your Employment Agreement remain in full force and effect as if fully set forth in this Severance Agreement. Except as set forth in this Severance Agreement, you acknowledge that the other terms and provisions (other than your right to receive the payments and benefits set forth in Section 1 of this Severance Agreement and provisions in the Employment Agreement relating to your right to reimbursements for any expenses incurred prior to the Termination Date) are of no further force and effect.
5. Requests to Provide Information and Future Activities. At any time in the future, if you receive any subpoena or court order to testify or provide information
regarding the Company or your past employment with the Company, you will promptly notify the Company’s General Counsel, Ben Russ, or his successor, in writing or by email within five (5) days of receipt or within twenty four (24) hours if the subpoena or court order requires compliance sooner than five (5) days. Further, you will not act as a paid expert witness or paid consultant, or in any similar paid capacity in any litigation, arbitrations, administrative proceedings, governmental inquiries, external investigations or hearings (each a “Prohibited Activity”) involving the Company; provided, however, that this sentence shall not restrict any services you perform in connection with your ordinary employment or engagement with any entity or organization that may be involved in any Prohibited Activity, as long as you are not engaged solely or primarily as an expert witness or consultant with respect such Prohibited Activities or in any similar paid capacity.
6. Confidentiality of Information. You agree that, except with the prior written consent of the Company, you will not, at any time after the date of this Agreement, make any independent use of or disclose to any other person or organization, including any governmental agency, any of the Company’s or any of its affiliates’ confidential, proprietary information or trade secrets. This shall apply to any information which is of a special and unique value and includes, without limitation, both written and unwritten information relating to operations and marketing; business planning and strategies; finance; accounting; costs of providing service; operating and maintenance costs; and pricing matters. This obligation regarding the Company’s
and its affiliates’ confidential, proprietary information or trade secrets is in addition to, but does not replace, any prior agreement between you and the Company or any of its affiliates regarding confidentiality. For this purpose, information will not be considered confidential information, proprietary information or trade secrets if it has been published in a form generally available to the public or is publicly available or has become public knowledge prior to the date you propose to disclose or use such information, provided, that such publishing or public availability or knowledge of such information shall not have resulted from your directly or indirectly breaching your obligations under this paragraph or any of your other confidentiality obligations to the Company or any of its affiliates. For purposes of the previous sentence, information will not be deemed to have been published or otherwise disclosed merely because individual portions of the information have been separately published, but only if material features comprising such information have been published or become publicly available. Notwithstanding the foregoing, you may respond to a lawful and valid subpoena or other legal process but shall give the Company the earliest possible notice…