Chesapeake Energy (CHK)

Stock Ownership Requirements

We have established stock ownership levels for our executive officers because we believe stock ownership directly aligns their interests with those of our shareholders. Mr. McClendon’s prior employment agreement provided for his minimum stock ownership to be at least equal to a number of shares of the Company’s common stock with an investment value (as defined in the employment agreement) equal to 500% of Mr. McClendon’s

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annual salary and annual cash bonuses. As a result of the forced liquidation of a substantial portion of Mr. McClendon’s stock holdings in the Company during October 2008, Mr. McClendon’s stock ownership fell below this percentage. The new agreement reduces the stock ownership level to 200% for 2009 in order to provide Mr. McClendon time to acquire additional shares of the Company’s common stock. The percentage reverts to 500% beginning in 2010. Part of the consideration for the foregoing reduction was the fact that the short swing profit rules under Section 16 of the Securities Exchange Act of 1934 effectively precluded Mr. McClendon’s purchases of the Company’s common stock through April 2009. Mr. McClendon’s failure to meet his stock ownership level under his employment agreement does not affect the well cost incentive award in any way. Mr. McClendon is currently in compliance with his 200% stock ownership level for 2009.

Pursuant to their employment agreements, the stock ownership level specified for our executive vice presidents, including Messrs. Rowland, Dixon, Lester and Jacobson is 25,000 shares of the Company’s common stock and for our senior vice presidents is 10,000 shares of the Company’s common stock. All of our executive officers currently meet these stock ownership levels.

The Compensation Committee reviews a report of each executive officer’s stock ownership at its meetings in June and December of each year. If any shortfall of the agreed upon ownership levels described above should occur, the Compensation Committee anticipates it would deal with the matter on a case by case basis after consideration of the executive’s historical ownership, the cause for the shortfall and the expected period of time for restoring the ownership level.

Stock Ownership Requirements

We impose stock ownership requirements on our executive officers because we believe stock ownership directly aligns their interests with those of our shareholders. Each executive officer has a stock ownership obligation arising from his or her employment agreement. Mr. McClendon is required to hold shares of the Company’s common stock having an aggregate investment value equal to 500% of his annual base salary and bonus. Our executive vice presidents, including Messrs. Rowland, Dixon, Lester and Jacobson, are required to hold not less than 25,000 shares of the Company’s common stock throughout the term of their agreements and our senior vice presidents, including Ms. Burger, are required to hold not less than 10,000 shares of the Company’s common stock throughout the term of their employment agreements. Stock held by our executive and senior vice presidents in our 401(k) and deferred compensation plans are not counted toward satisfaction of stock ownership requirements. The Compensation Committee reviews a report of each executive officer’s stock ownership at its meetings in June and December of each year.

Stock Ownership Requirements

Each executive officer has a stock ownership obligation arising from his or her employment agreement. Mr. McClendon is required to hold shares of the Company’s common stock having an aggregate investment value equal to 500% of his annual base salary and bonus. Our executive vice presidents, including Messrs. Rowland, Dixon, Lester and Jacobson are required to hold not less than 25,000 shares of the Company’s common stock throughout the term of their agreements and our senior vice presidents are required to hold not less than 10,000 shares of the Company’s common stock throughout the term of their employment agreements. The Compensation Committee reviews a report of each executive officer’s stock ownership at its meetings in June and December of each year.