8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 2, 2012 (April 30, 2012)

CHESAPEAKE ENERGY CORPORATION

(Exact name of Registrant as specified in its Charter)

Oklahoma	1-13726	73-1395733
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification No.)
6100 North Western Avenue, Oklahoma City, Oklahoma		73118
(Address of principal executive offices)		(Zip Code)

(405) 848-8000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 1—Registrant’s Business and Operations

Item 1.01 Entry into a Material Definitive Agreement.

Pursuant to a letter agreement, dated as of April 30, 2012 (the “Letter Agreement”), between the Board of Directors of Chesapeake Energy Corporation (the “Company”) and Aubrey K. McClendon, Chairman and Chief Executive Officer of the Company, the Board and Mr. McClendon agreed to the early termination of the Chesapeake Founder Well Participation Program (the “FWPP”) on June 30, 2014, 18 months before the end of its current term on December 31, 2015. The Letter Agreement provides that Mr. McClendon will not be entitled to compensation in respect of the early termination of the FWPP. In order to effectuate the early termination of the FWPP, the Letter Agreement provides for certain amendments to the FWPP.

In addition, the Letter Agreement reflects the Board’s determination that the positions of Chairman of the Board and Chief Executive Officer should be separated and Mr. McClendon’s support for that approach. In connection with that separation, Mr. McClendon waived any rights he may have under specified provisions of the Third Amended and Restated Employment Agreement between Mr. McClendon and the Company, effective March 1, 2009 (the “Employment Agreement”). Mr. McClendon also agreed to provide to the Board at any time during his employment with the Company and prior to a Change of Control (as defined in the Employment Agreement), to the extent reasonably available and reasonably requested in writing by either the Chairman or the Lead Director, certain information regarding his participation in the FWPP. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the specific language of the Letter Agreement, which is attached hereto as Exhibit 1.1, and the FWPP as amended and restated, which is attached hereto as Exhibit 1.2.

Item 1.02 Termination of a Material Definitive Agreement.

The information set forth under Item 1.01 above with respect to the termination of the FWPP on June 30, 2014 is incorporated herein by reference.

Section 5—Corporate Governance and Management.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The information set forth under Item 1.01 above with respect to Mr. McClendon’s waiver of certain provisions of the Employment Agreement is incorporated herein by reference.

Section 7—Regulation FD

Item 7.01 Regulation FD Disclosure.

On May 1, 2012, the Company issued a press release announcing that the Board (i) has renegotiated the terms of the FWPP with Mr. McClendon to provide for the early termination of the FWPP without compensation; and (ii) will name an independent, Non-Executive Chairman in the near future. A copy of this press release is attached as Exhibit 99.1 to this Current Report.

Section 9—Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. See “Exhibit Index” attached to this Current Report on Form 8-K, which is incorporated by reference herein.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CHESAPEAKE ENERGY CORPORATION
By:	/s/ Jennifer M. Grigsby
	Jennifer M. Grigsby
	Senior Vice President, Treasurer and Corporate Secretary

Date: May 2, 2012

3

EXHIBIT INDEX

Exhibit No.	Document Description
1.1	Letter Agreement, dated as of April 30, 2012, between the Board of Directors and Aubrey K. McClendon
1.2	Restated Chesapeake Energy Corporation Founder Well Participation Program
99.1	Chesapeake Energy Corporation press release dated May 1, 2012—FWPP

4

EX-1.1

Exhibit 1.1

April 30, 2012

VIA E-MAIL: aubrey.mcclendon@chk.com

Mr. Aubrey K. McClendon

Chairman and Chief Executive Officer

Chesapeake Energy Corporation

6100 N. Western Avenue

Oklahoma City, Oklahoma 73118

Dear Aubrey:

Pursuant to the discussions among you and the Board of Directors (the “Board”) of Chesapeake Energy Corporation (the “Company”), and in order effectuate the early termination of the Chesapeake Energy Corporation Founder Well Participation Program (the “FWPP”) as of June 30, 2014, the Board of Directors has adopted the following amendments to the FWPP, subject to your consent thereto in accordance with this letter:

1. In paragraph 2) of the FWPP, entitled “Effective Date,” the second sentence is deleted in its entirety.

2. In paragraph 9) of the FWPP, entitled “Special Definitions,” (a) the word “or” separating subparts (ii) and (iii) in part (1) is deleted; and (b) the following is inserted after subpart (iii) of part (1):

“; or (iv) the termination of this Founder Well Participation Program as provided herein”

3. In paragraph 10.1 of the FWPP, entitled “Amendment or Termination of Program,” the first sentence is deleted in its entirety and the following substituted therefor:

“This Founder Well Participation Program will terminate on June 30, 2014 at 11:59 p.m. without notice.”

Attached as Exhibit “A” of this letter is a copy of the FWPP as amended as described above and marked to show such amendments.

Chesapeake Energy Corporation

6100 N. Western Ave., Oklahoma City, OK 73118 • P. O. Box 18496, Oklahoma City, OK 73154-0496

Mr. Aubrey K. McClendon

April 30, 2012

Page 2 of 3

Pursuant to paragraph 3.3 of your Third Amended and Restated Employment Agreement with Chesapeake Energy Corporation, effective March 1, 2009 (the “Employment Agreement”), you and the Board must consent in writing to any amendments or modifications of the FWPP. The Board’s adoption of the amendments described above, subject to your consent thereto, constitutes the Board’s consent to such amendments. By executing this letter below where indicated, you consent to such amendments and agree that neither you nor any other person or party shall be entitled to compensation in respect of the early termination of the FWPP as described therein.

In addition, the Board has determined that the positions of Chairman of the Board and Chief Executive Officer should be separated and you have indicated your support for this approach. In connection with that separation, by executing this letter below where indicated, you agree to waive any rights under the Employment Agreement with respect to: (i) any obligation to appoint you as Chairman of the Board pursuant to section 2.1(a) of the Employment Agreement; and (ii) any right to terminate the Employment Agreement pursuant to section 6.2 of the Employment Agreement as a result of you no longer being appointed Chairman of the Board. Moreover, you agree that the withdrawal of your designation as Chairman of the Board will not constitute termination of the Employment Agreement without “Cause” (as defined in the Employment Agreement) by the Company in accordance with the second sentence of Section 2.2 thereof.

In connection with the foregoing amendments and waivers, at any time during your employment with the Company and prior to a Change of Control (as defined in the Employment Agreement), you also agree to provide the Board, to the extent reasonably available and reasonably requested in writing by either the Chairman or the Lead Director, information regarding your participation in the FWPP as is required for the Company to meet its reporting obligations under Securities and Exchange Commission rules and regulations (no more frequently than necessary to include in the required filings) or is otherwise required for the Board to meet its fiduciary requirements under applicable law (no more frequently than semi-annually except to the extent specifically required under applicable law), in each case as advised by outside counsel in writing.

Please evidence your consent and agreement to the matters set forth in this letter by signing this letter in the space indicated below and returning it to me by email.

On behalf of the Board and the Company,

/s/ M.A. Miller, Jr.

M.A. Miller, Jr.

Lead Director

Enclosure

Mr. Aubrey K. McClendon

April 30, 2012

Page 3 of 3

Consent and Agreement

The undersigned (i) consents to the amendments to the FWPP as set forth in this letter and indicated on the attached Exhibit “A”, (ii) agrees that the early termination of the FWPP effectuated thereby will be without any compensation to him or any other person or party and (iii) waives certain rights under, and agrees to certain matters in respect of, the Employment Agreement as set forth in this letter.

Dated this 30^th day of April, 2012

/s/ Aubrey K. McClendon

Aubrey K. McClendon

CHESAPEAKE ENERGY CORPORATION

FOUNDER WELL PARTICIPATION PROGRAM

1) Purpose. This program is a continuation of the well participation program (the “Founder Well Participation Program”) initiated by Chesapeake Energy Corporation (the “Company”) for Aubrey K. McClendon and Tom L. Ward (the “Founders”) in connection with the Company’s initial public offering in February 1993. The Founder Well Participation Program fosters and promotes the development and execution of the Company’s business by: (a) retaining and motivating the principal executive officers who founded the Company; (b) aligning the financial rewards and risks of the Founders with the Company more effectively than overriding royalty, carried interest or other performance incentive programs maintained by many of the Company’s peers; and (c) imposing on the Founders the same risk incurred by the Company in its core operations.

2) Effective Date. The Founder Well Participation Program will be effective on the later of the following to occur (the “Effective Date”): (a) approval by the holders of a majority of the outstanding shares of the Company’s common stock present or represented and entitled to vote at a meeting called for such purposes and (b) the permanent waiver and release by the Founders of any and all existing well participation rights including, without implied limitation, any right to participate in the Company’s wells under any employment agreements. The Board of Directors will have the right to terminate the Founder Well Participation Program after December 31, 2015 by providing written notice of termination to the Founders one year before the effective date of such termination. If the Founder Well Participation Program is not approved by shareholders on or before January 1, 2006, this Founder Well Participation Program will be deemed withdrawn and of no further force and effect.

3) Administration. The Founder Well Participation Program will be administered and interpreted by the Compensation Committee of the Board (the “Committee”). The Board, in its sole discretion, may take any action with respect to the Founder Well Participation Program that would otherwise be the responsibility of or delegated to the Committee. Subject to the provisions of this Founder Well Participation Program, the Committee will have the power to: (1) employ attorneys, consultants, accountants and other advisors as deemed necessary or appropriate by the Committee; (2) to establish, adopt, or revise such rules and regulations and to make all such determinations relating to the Founder Well Participation Program as the Committee may deem necessary or advisable for the administration of the Founder Well Participation Program; and (3) take any and all action the Committee deems necessary or advisable for the proper operation or administration of the Founder Well Participation Program. The Committee’s interpretations of this Founder Well Participation Program or any instruments executed in connection with the Founder Well Participation Program and all decisions and determinations by the Committee with respect thereto will be final, binding and conclusive on all parties unless otherwise determined by the Board.

4) Well Participation. Subject to the terms and conditions of this Program, each Founder will be permitted to acquire and agrees to acquire an interest in the governmental, spacing or production unit for each Program Well (as hereafter defined) spudded during a Participation

Exhibit “A”

Page 1 of 5 Pages

Period (as hereafter defined) equal to the Minimum Participation (as hereafter defined). The term “Program Well” means any grass roots well in which any of the Company Entities (as hereafter defined) participates as a working interest owner but expressly excludes: (a) any well in which the Company Entities own an interest and has not elected to participate as a working interest owner with respect to such interest; (b) any well which constitutes a re-entry of an existing producing well; (c) any well drilled in a multi-unit secondary or tertiary recovery unit in which the Founders do not already have a working interest by virtue of participation in a well or well(s) that have been combined into the unit; and (d) any other wells which the Company reasonably determines the Founders should not participate in given the objectives of the Founder Well Participation Program. The Company will provide a semi-annual report regarding the Founder Well Participation Program to the Committee.

5) Participation Election. On or before the date which is thirty (30) days before the first (1st) day of each Participation Period, each Founder will provide written notice to the Committee of such Founder’s election to participate in Program Wells during the succeeding Participation Period and the percentage working interest which the Founder proposes to participate with during such Participation Period (the “Acquisition Percentage”). Notwithstanding anything herein to the contrary, the Founder’s Acquisition Percentage for any Participation Period may not exceed two and one-half percent (2.5%) on an eight-eighths (8/8) basis. If prior to the date specified herein, a Founder fails to provide notice of such Founder’s election to participate or the Acquisition Percentage for such Participation Period, the amount of the Acquisition Percentage for such Participation Period will be deemed to be equal to the Acquisition Percentage for the immediately preceding Participation Period. The initial Participation Period will run from the Effective Date of this Founder Well Participation Program until December 31 of the year of such Effective Date.

6) Amount of Participation. On an election to participate and the designation of the Acquisition Percentage for a Participation Period in accordance with this Program, the Founder will be deemed to have elected to participate in each Program Well spudded during the applicable Participation Period with a working interest equal to the greater of the following determined on a well-by-well basis (the “Minimum Participation”): (a) the Acquisition Percentage for such Program Well (as adjusted for any well under paragraph 6.2 of this Program); or (b) the prior interest owned by the Founder in the drilling unit for such Program Well.

6.1 Interest Assigned. If the foregoing clause (a) is applicable to a Program Well, the Company will assign or allocate to the Founder a unit working interest in the Program Well sufficient to cause such Founder’s combined interest in such Program Well to equal the Acquisition Percentage (including in such computation any prior interests owned by the Founder). If the foregoing clause (b) is applicable because the Founder’s prior interest in the well exceeds the Acquisition Percentage, the Company will not assign or allocate any interest in the Program Well. The interest to be assigned or allocated under this paragraph to cause the Founder’s participation in a Program Well to be equal to the Acquisition Percentage will be derived proportionately from all the interests owned by the Company Entities in the Program Well (including non-consenting interests, back-in interests, leased royalty interests, overriding royalty interests or other similar interests) so that the total interest in the Program Well assigned

Exhibit “A”

Page 2 of 5 Pages

or allocated to the Founder is substantially similar to the interests retained by the Company Entities. The Founder’s prior interests in a Program Well for purposes of this paragraph expressly includes any interests owned by the Founder or the Founder’s Affiliates in the unit for such Program Well.

6.2 Minimum Company Participation. If the interests to be assigned or allocated to the Founders under this Founder Well Participation Program in a specific Program Well causes the aggregate working interest of the Company Entities (determined after consideration of any carried or reversionary interests) on the spud date for such Program Well to be less than twelve and one-half percent (12.5%) on an eight-eighths (8/8ths) basis, then the Acquisition Percentage for that Program Well will be equal to zero for purposes of this paragraph 6 of this Founder Well Participation Program. If this paragraph 6.2 prohibits a Founder’s participation in a Program Well, then both Founders will not be entitled to participate in such Program Well under this Founder Well Participation Program except with respect to prior interests in such Program Well owned by the Founder or the Founder Affiliates.

7) Conditions of Participation. A Founder’s participation in the Founder Well Participation Program is independent of the other Founder’s participation in the Founder Well Participation Program. A Founder’s Acquisition Percentage cannot be changed during any Participation Period without the prior approval of the Committee. Any participation by the Founder under this Plan is conditioned on the Founder’s participation in each Program Well spudded during such Participation Period in an amount equal to the Minimum Participation. Each Founder hereby: (a) agrees to execute and deliver any documents reasonably requested by the Company in connection with the Founder Well Participation Program; (b) appoints the Company as such Founder’s agent and attorney-in-fact to execute and deliver such documents if such Founder fails or refuses to execute such documents; (c) agrees to pay all joint interest billings immediately on receipt of the Company’s invoice issued by the Company in the ordinary conduct of its business; and (d) agrees to prepay to the Company amounts attributable to the Founder’s interest in a Program Well operated by a third party to the extent that a Company Entity is required to prepay any costs in connection with such Program Well.

8) Well Charges. The amount to be paid by each Founder for the acreage to be assigned in connection with the participation in the Program Wells during a Participation Period will be computed as of the first day of such Participation Period and will be equal to the following amount computed on a per acre basis: (a) all direct third party costs paid by the Company Entities and capitalized in the appropriate accounting pool in accordance with the Corporation’s accounting procedures (including capitalized interest, leasehold payments, acquisition costs, landman charges and seismic charges); divided by (b) the acreage in the applicable pool. The acreage charge amount will be recomputed as of the first day of each Participation Period by the Company and submitted to the Committee for approval. All other costs for Program Wells will be billed in accordance with the Company’s accounting procedures applicable to third party participants pursuant to any applicable joint operating agreement or exploration agreement relating to a particular Program Well. Notwithstanding anything herein to the contrary, in each case the Founder’s participation in a Program Well will be on no better terms than the terms agreed to by unaffiliated third party participants in connection with the participation in such Program Well or similar wells operated by the Company Entities.

Exhibit “A”

Page 3 of 5 Pages

9) Special Definitions. For purposes of this Agreement, the term: (1) ”Participation Period” means the period commencing on the first (1st) day of each January (except for the initial Participation Period which will commence on the Effective Date) and ending on the earlier of (i) December 31 of such year; (ii) the termination of the Founder’s employment by the Company for cause or death, or (iii) the expiration or termination of any and all covenants not to compete subsequent to the termination of the Founder for any reason not included in the foregoing clause (ii); or (iv) the termination of this Founder Well Participation Program as provided herein; (2) “Company Entities” means the Company, any affiliate or successor to the Company, any entity which controls, subsequently owns or is under common control with the Company and any subsidiary corporation, partnership, limited liability company or other entity owned by, controlled by or under common control with any of the foregoing (whether direct or indirect); and (c) “Founder Affiliate” means Chesapeake Investments, an Oklahoma limited partnership, with respect to Aubrey K. McClendon, TLW Investments, Inc., an Oklahoma corporation, with respect to Tom L. Ward, and any entity owned solely by such Founder and such Founder’s immediate family members designated as a Founder Affiliate in writing and approved by the Committee.

10) General. The following additional terms apply:

10.1 Amendment or Termination of Program. The Board may suspend or terminate tThis Founder Well Participation Program at any time after December 31, 2015 and after providing a minimum of one (1) year’s prior written notice to the Founders of the Board’s intentions.will terminate on June 30, 2014 at 11:59 p.m. without notice. Shareholder approval will be required for any amendment which increases the maximum Acquisition Percentage or any amendment, which in the opinion of counsel to the Company, requires shareholder approval under any federal or state law or any regulations or rules promulgated thereunder.

10.2 Nonassignability. The right to participate in the Founder Well Participation Program can only be assigned by a Founder to a Founder Affiliate designated as such in accordance with this Founder Well Participation Program. This Founder Well Participation Program does not limit the sale, mortgage, gift or assignment by a Founder of an interest in a Program Well once the interest has been assigned of record by the Company Entities.

10.3 Right to Continued Employment. Participation in this Founder Well Participation Program will not give any Founder any right to remain in the employ of or continue serving as a director of the Company or any Company Entity.

10.4 Reliance on Reports. Each member of the Committee and each member of the Board may rely and act in good faith on any report made by the independent public accountants of any Company Entity and on any other information furnished in connection with the Founder Well Participation Program by any person or persons other the Founders. In no event will any person who is or will have been a member of the Committee or of the Board be liable for any determination made or other action taken or any omission to act in reliance upon any such report or information or for any action taken or failure to act if such person acted in good faith.

Exhibit “A”

Page 4 of 5 Pages

10.5 Construction. The titles and headings of the paragraphs in this Founder Well Participation Program are for convenience of reference only, and in the event of any conflict, the text of this document, rather than such titles or headings, will control.

10.6 Governing Law. This Plan will be governed by and construed in accordance with the laws of the State of Oklahoma except as superseded by applicable federal law.

Exhibit “A”

Page 5 of 5 Pages

EX-1.2

Exhibit 1.2

CHESAPEAKE ENERGY CORPORATION

FOUNDER WELL PARTICIPATION PROGRAM

1) Purpose. This program is a continuation of the well participation program (the “Founder Well Participation Program”) initiated by Chesapeake Energy Corporation (the “Company”) for Aubrey K. McClendon and Tom L. Ward (the “Founders”) in connection with the Company’s initial public offering in February 1993. The Founder Well Participation Program fosters and promotes the development and execution of the Company’s business by: (a) retaining and motivating the principal executive officers who founded the Company; (b) aligning the financial rewards and risks of the Founders with the Company more effectively than overriding royalty, carried interest or other performance incentive programs maintained by many of the Company’s peers; and (c) imposing on the Founders the same risk incurred by the Company in its core operations.

2) Effective Date. The Founder Well Participation Program will be effective on the later of the following to occur (the “Effective Date”): (a) approval by the holders of a majority of the outstanding shares of the Company’s common stock present or represented and entitled to vote at a meeting called for such purposes and (b) the permanent waiver and release by the Founders of any and all existing well participation rights including, without implied limitation, any right to participate in the Company’s wells under any employment agreements. If the Founder Well Participation Program is not approved by shareholders on or before January 1, 2006, this Founder Well Participation Program will be deemed withdrawn and of no further force and effect.

3) Administration. The Founder Well Participation Program will be administered and interpreted by the Compensation Committee of the Board (the “Committee”). The Board, in its sole discretion, may take any action with respect to the Founder Well Participation Program that would otherwise be the responsibility of or delegated to the Committee. Subject to the provisions of this Founder Well Participation Program, the Committee will have the power to: (1) employ attorneys, consultants, accountants and other advisors as deemed necessary or appropriate by the Committee; (2) to establish, adopt, or revise such rules and regulations and to make all such determinations relating to the Founder Well Participation Program as the Committee may deem necessary or advisable for the administration of the Founder Well Participation Program; and (3) take any and all action the Committee deems necessary or advisable for the proper operation or administration of the Founder Well Participation Program. The Committee’s interpretations of this Founder Well Participation Program or any instruments executed in connection with the Founder Well Participation Program and all decisions and determinations by the Committee with respect thereto will be final, binding and conclusive on all parties unless otherwise determined by the Board.

4) Well Participation. Subject to the terms and conditions of this Program, each Founder will be permitted to acquire and agrees to acquire an interest in the governmental, spacing or production unit for each Program Well (as hereafter defined) spudded during a Participation Period (as hereafter defined) equal to the Minimum Participation (as hereafter defined). The term “Program Well” means any grass roots well in which any of the Company Entities (as hereafter

defined) participates as a working interest owner but expressly excludes: (a) any well in which the Company Entities own an interest and has not elected to participate as a working interest owner with respect to such interest; (b) any well which constitutes a re-entry of an existing producing well; (c) any well drilled in a multi-unit secondary or tertiary recovery unit in which the Founders do not already have a working interest by virtue of participation in a well or well(s) that have been combined into the unit; and (d) any other wells which the Company reasonably determines the Founders should not participate in given the objectives of the Founder Well Participation Program. The Company will provide a semi-annual report regarding the Founder Well Participation Program to the Committee.

5) Participation Election. On or before the date which is thirty (30) days before the first (1st) day of each Participation Period, each Founder will provide written notice to the Committee of such Founder’s election to participate in Program Wells during the succeeding Participation Period and the percentage working interest which the Founder proposes to participate with during such Participation Period (the “Acquisition Percentage”). Notwithstanding anything herein to the contrary, the Founder’s Acquisition Percentage for any Participation Period may not exceed two and one-half percent (2.5%) on an eight-eighths (8/8) basis. If prior to the date specified herein, a Founder fails to provide notice of such Founder’s election to participate or the Acquisition Percentage for such Participation Period, the amount of the Acquisition Percentage for such Participation Period will be deemed to be equal to the Acquisition Percentage for the immediately preceding Participation Period. The initial Participation Period will run from the Effective Date of this Founder Well Participation Program until December 31 of the year of such Effective Date.

6) Amount of Participation. On an election to participate and the designation of the Acquisition Percentage for a Participation Period in accordance with this Program, the Founder will be deemed to have elected to participate in each Program Well spudded during the applicable Participation Period with a working interest equal to the greater of the following determined on a well-by-well basis (the “Minimum Participation”): (a) the Acquisition Percentage for such Program Well (as adjusted for any well under paragraph 6.2 of this Program); or (b) the prior interest owned by the Founder in the drilling unit for such Program Well.

6.1 Interest Assigned. If the foregoing clause (a) is applicable to a Program Well, the Company will assign or allocate to the Founder a unit working interest in the Program Well sufficient to cause such Founder’s combined interest in such Program Well to equal the Acquisition Percentage (including in such computation any prior interests owned by the Founder). If the foregoing clause (b) is applicable because the Founder’s prior interest in the well exceeds the Acquisition Percentage, the Company will not assign or allocate any interest in the Program Well. The interest to be assigned or allocated under this paragraph to cause the Founder’s participation in a Program Well to be equal to the Acquisition Percentage will be derived proportionately from all the interests owned by the Company Entities in the Program Well (including non-consenting interests, back-in interests, leased royalty interests, overriding royalty interests or other similar interests) so that the total interest in the Program Well assigned or allocated to the Founder is substantially similar to the interests retained by the Company Entities. The Founder’s prior interests in a Program Well for purposes of this paragraph expressly includes any interests owned by the Founder or the Founder’s Affiliates in the unit for such Program Well.

6.2 Minimum Company Participation. If the interests to be assigned or allocated to the Founders under this Founder Well Participation Program in a specific Program Well causes the aggregate working interest of the Company Entities (determined after consideration of any carried or reversionary interests) on the spud date for such Program Well to be less than twelve and one-half percent (12.5%) on an eight-eighths (8/8ths) basis, then the Acquisition Percentage for that Program Well will be equal to zero for purposes of this paragraph 6 of this Founder Well Participation Program. If this paragraph 6.2 prohibits a Founder’s participation in a Program Well, then both Founders will not be entitled to participate in such Program Well under this Founder Well Participation Program except with respect to prior interests in such Program Well owned by the Founder or the Founder Affiliates.

7) Conditions of Participation. A Founder’s participation in the Founder Well Participation Program is independent of the other Founder’s participation in the Founder Well Participation Program. A Founder’s Acquisition Percentage cannot be changed during any Participation Period without the prior approval of the Committee. Any participation by the Founder under this Plan is conditioned on the Founder’s participation in each Program Well spudded during such Participation Period in an amount equal to the Minimum Participation. Each Founder hereby: (a) agrees to execute and deliver any documents reasonably requested by the Company in connection with the Founder Well Participation Program; (b) appoints the Company as such Founder’s agent and attorney-in-fact to execute and deliver such documents if such Founder fails or refuses to execute such documents; (c) agrees to pay all joint interest billings immediately on receipt of the Company’s invoice issued by the Company in the ordinary conduct of its business; and (d) agrees to prepay to the Company amounts attributable to the Founder’s interest in a Program Well operated by a third party to the extent that a Company Entity is required to prepay any costs in connection with such Program Well.

8) Well Charges. The amount to be paid by each Founder for the acreage to be assigned in connection with the participation in the Program Wells during a Participation Period will be computed as of the first day of such Participation Period and will be equal to the following amount computed on a per acre basis: (a) all direct third party costs paid by the Company Entities and capitalized in the appropriate accounting pool in accordance with the Corporation’s accounting procedures (including capitalized interest, leasehold payments, acquisition costs, landman charges and seismic charges); divided by (b) the acreage in the applicable pool. The acreage charge amount will be recomputed as of the first day of each Participation Period by the Company and submitted to the Committee for approval. All other costs for Program Wells will be billed in accordance with the Company’s accounting procedures applicable to third party participants pursuant to any applicable joint operating agreement or exploration agreement relating to a particular Program Well. Notwithstanding anything herein to the contrary, in each case the Founder’s participation in a Program Well will be on no better terms than the terms agreed to by unaffiliated third party participants in connection with the participation in such Program Well or similar wells operated by the Company Entities.

9) Special Definitions. For purposes of this Agreement, the term: (1) ”Participation Period” means the period commencing on the first (1st) day of each January (except for the initial Participation Period which will commence on the Effective Date) and ending on the earlier of (i) December 31 of such year; (ii) the termination of the Founder’s employment by the Company for cause or death, (iii) the expiration or termination of any and all covenants not to compete subsequent to the termination of the Founder for any reason not included in the foregoing clause (ii); or (iv) the termination of this Founder Well Participation Program as provided herein; (2) “Company Entities” means the Company, any affiliate or successor to the Company, any entity which controls, subsequently owns or is under common control with the Company and any subsidiary corporation, partnership, limited liability company or other entity owned by, controlled by or under common control with any of the foregoing (whether direct or indirect); and (c) “Founder Affiliate” means Chesapeake Investments, an Oklahoma limited partnership, with respect to Aubrey K. McClendon, TLW Investments, Inc., an Oklahoma corporation, with respect to Tom L. Ward, and any entity owned solely by such Founder and such Founder’s immediate family members designated as a Founder Affiliate in writing and approved by the Committee.

10) General. The following additional terms apply:

10.1 Amendment or Termination of Program. This Founder Well Participation Program will terminate on June 30, 2014 at 11:59 p.m. without notice. Shareholder approval will be required for any amendment which increases the maximum Acquisition Percentage or any amendment, which in the opinion of counsel to the Company, requires shareholder approval under any federal or state law or any regulations or rules promulgated thereunder.

10.2 Nonassignability. The right to participate in the Founder Well Participation Program can only be assigned by a Founder to a Founder Affiliate designated as such in accordance with this Founder Well Participation Program. This Founder Well Participation Program does not limit the sale, mortgage, gift or assignment by a Founder of an interest in a Program Well once the interest has been assigned of record by the Company Entities.

10.3 Right to Continued Employment. Participation in this Founder Well Participation Program will not give any Founder any right to remain in the employ of or continue serving as a director of the Company or any Company Entity.

10.4 Reliance on Reports. Each member of the Committee and each member of the Board may rely and act in good faith on any report made by the independent public accountants of any Company Entity and on any other information furnished in connection with the Founder Well Participation Program by any person or persons other the Founders. In no event will any person who is or will have been a member of the Committee or of the Board be liable for any determination made or other action taken or any omission to act in reliance upon any such report or information or for any action taken or failure to act if such person acted in good faith.

10.5 Construction. The titles and headings of the paragraphs in this Founder Well Participation Program are for convenience of reference only, and in the event of any conflict, the text of this document, rather than such titles or headings, will control.

10.6 Governing Law. This Plan will be governed by and construed in accordance with the laws of the State of Oklahoma except as superseded by applicable federal law.

EX-99.1

Exhibit 99.1

    FOR IMMEDIATE RELEASE

    MAY 1, 2012

CHESAPEAKE ENERGY CORPORATION BOARD AND AUBREY K.

MCCLENDON AGREE TO EARLY TERMINATION OF FOUNDER

WELL PARTICIPATION PROGRAM

Board to Name Independent, Non-Executive Chairman

OKLAHOMA CITY, OKLAHOMA, MAY 1, 2012 – Chesapeake Energy Corporation (NYSE:CHK) today announced that its Board of Directors has renegotiated the terms of the company’s Founder Well Participation Program (FWPP) with Chairman and Chief Executive Officer Aubrey K. McClendon to provide for the early termination of the FWPP on June 30, 2014, 18 months before the end of its current term on December 31, 2015. Mr. McClendon will receive no compensation of any kind in connection with the early termination of the FWPP.

The FWPP, which was approved by shareholders for a 10-year term in 2005, in conjunction with Mr. McClendon’s employment agreement with the company, provides Mr. McClendon a contractual right to participate and invest as a working interest owner (with up to a 2.5% working interest) in new wells drilled on the company’s leasehold. Mr. McClendon has agreed to forego such contractual right 18 months early without compensation.

The Board of Directors will name an independent, Non-Executive Chairman in the near future. The Board’s Nominating and Corporate Governance Committee is considering potential candidates with no previous substantive relationship with Chesapeake and will be soliciting input from major shareholders. Upon the appointment of a Non-Executive Chairman, Mr. McClendon will relinquish the position of Chairman and continue as Chief Executive Officer. Mr. McClendon has indicated his support of the Board’s decision to name a Non-Executive Chairman and waived any rights he might have under his employment agreement as a result of no longer serving as Chairman. As previously announced, the Board is reviewing the financing arrangements between Mr. McClendon (and the entities through which he participates in the FWPP) and any third party that has had or may have a relationship with the company in any capacity.

Merrill A. (“Pete”) Miller, Jr., Chesapeake’s Lead Independent Director and President and Chief Executive Officer of National Oilwell Varco, said, “The Board is focused on serving the interests of shareholders. We believe separation of the Chairman and CEO roles will improve Chesapeake’s corporate governance and the early termination of the FWPP will eliminate a source of controversy, both of which should send a positive signal to the market and improve shareholder value. The Board appreciates Aubrey’s cooperation in these measures and has confidence in Chesapeake’s future, based on its superb assets, strong management team and talented employees.”

Aubrey K. McClendon, Chesapeake’s Chairman and CEO, said, “I am completely supportive of the Board’s plans to separate the positions of Chairman and CEO and to bring an independent Chairman onto the Board. This action reflects our determination to uphold strong corporate

governance standards and will also enable me to focus my full time and attention on execution of the company’s strategy, the implementation of our transformation into a major oil producer and the completion of our asset monetization and joint venture objectives.”

O. Mason Hawkins, Chairman and Chief Executive Officer of Southeastern Asset Management, the company’s largest shareholder, said “We are pleased that the Board has listened to our input and believe it has made the right decision by ending the FWPP early and seeking an independent Chairman. Aubrey was right to recognize that these actions are in the best interests of the Company and its shareholders. We support management’s continuing efforts to unlock and deliver the value embedded in Chesapeake’s assets.”

Chesapeake Energy Corporation (NYSE:CHK) is the second-largest producer of natural gas, a Top 15 producer of oil and natural gas liquids and the most active driller of new wells in the U.S. Headquartered in Oklahoma City, the company’s operations are focused on discovering and developing unconventional natural gas and oil fields onshore in the U.S. Chesapeake owns leading positions in the Barnett, Haynesville, Bossier, Marcellus and Pearsall natural gas shale plays and in the Eagle Ford, Utica, Granite Wash, Cleveland, Tonkawa, Mississippi Lime, Bone Spring, Avalon, Wolfcamp, Wolfberry and Niobrara unconventional liquids plays. The company has also vertically integrated its operations and owns substantial marketing, midstream and oilfield services businesses directly and indirectly through its subsidiaries Chesapeake Energy Marketing Inc., Chesapeake Midstream Development, L.P. and Chesapeake Oilfield Services, L.L.C. and its affiliate Chesapeake Midstream Partners, L.P. (NYSE:CHKM). Further information is available at www.chk.com where Chesapeake routinely posts announcements, updates, events, investor information, presentations and news releases.

This news release includes “forward-looking statements” that give Chesapeake’s current expectations or forecasts of future events. Although we believe the expectations and forecasts reflected in our forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties, and actual results may differ from the expectation expressed. We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of this news release, and we undertake no obligation to update this information.

Additional Information and Where to Find It

The company has filed a preliminary proxy statement with the Securities and Exchange Commission in connection with its 2012 annual meeting of shareholders. The definitive proxy statement is not currently available. INVESTORS ARE URGED TO READ THE PRELIMINARY PROXY STATEMENT AND, WHEN IT BECOMES AVAILABLE, THE DEFINITIVE PROXY STATEMENT, BECAUSE THESE DOCUMENTS CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. You may obtain the preliminary proxy statement, the definitive proxy statement (when available) as well as other relevant documents, free of charge, at the website maintained by the SEC at www.sec.gov. Copies of the proxy statement and other filings made by the company with the SEC can also be obtained, free of charge, at www.chk.com.

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