Chesapeake Energy 2000 Annual Report Download - page 106

4. Stock Options
Incentive Stock Option Plan
Gothic Energy has an incentive stock option and non-statutory option plan, which provides for the issuance of
options to purchase up to 2,500,000 shares of common stock to key employees and directors. The incentive stock
options granted under the Plan are generally exercisable for a period of ten years from the date of the grant, except
that the term of an incentive stock option granted under the Plan to a stockholder owning more than 10% of the
outstanding common stock must not exceed five years and the exercise price of an incentive stock option granted to
such a stockholder must not be less than 110% of the fair market value of the common stock on the date of grant.
The exercise price of a non-qualified option granted under the Plan may not be less than 40% of the fair market
value of the common stock at the time the option is granted. No non-qualified options have been issued under the
Plan. As of December 31, 1998 and 1999, options to purchase 2,095,000 and 2,500,000 shares of common stock,
respectively, had been issued under the Plan. As of December 31, 2000, all options granted under the Plan had been
exercised.
Omnibus Incentive Plan
On August 13, 1996 at the annual shareholders' meeting, the shareholders approved the 1996 Omnibus
Incentive Plan and the 1996 Non-Employee Stock Option Plan. The 1996 Omnibus Incentive Plan provides for
compensatory awards of up to an aggregate of 1,000,000 shares of common stock of Gothic Energy to officers,
directors and certain other key employees. Awards may be granted for no consideration and consist of stock options,
stock awards, stock appreciation rights, dividend equivalents, other stock-based awards (such as phantom stock)
and performance awards consisting of any combination of the foregoing. Generally, options will be granted at an
exercise price equal to the lower of (i) 100% of the fair market value of the shares of common stock on the date of
grant or (ii) 85% of the fair market value of the shares of common stock on the date of exercise. Each option will be
exercisable for the period or periods specified in the option agreement, which will generally not exceed 10 years from
the date of grant. As of December 31, 1999, options to purchase 1,000,000 shares of common stock had been issued
under the Omnibus Incentive Plan. As of December 31, 2000, all options granted under the Omnibus Incentive Plan
had been exercised.
Non-Employee Stock Option Plan
The 1996 Non-Employee Stock Option Plan provides a means by which non-employee directors of Gothic and
consultants to Gothic can be given an opportunity to purchase stock in Gothic Energy. The plan provides that a total
of 1,000,000 shares of Gothic Energy's common stock may be issued pursuant to options granted under the Non-
Employee Plan, subject to certain adjustments. The exercise price for each option granted under the Non-Employee
Plan will not be less than the fair market value of the common stock on the date of grant. Each option will be
exercisable for the period or periods specified in the option agreement, which can not exceed 10 years from the date
of grant. Options granted to directors will terminate thirty (30) days after the date the director is no longer a
director of Gothic. As of December 31, 1998 and 1999, options to purchase 600,000 and 1,000,000 shares of
common stock, respectively, had been issued under the Non-Employee Plan. As of December 31, 2000, all options
granted under the Non-Employee Plan had been exercised.
-95-