Chesapeake Energy 2010 Annual Report Download - page 143

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
2010, 2009 and 2008, respectively, to fund the match. The company’s non-employee directors are able to defer
up to 100% of director fees into the DC Plan.
Any assets placed in trust by Chesapeake to fund future obligations of the company’s nonqualified
deferred compensation plans are subject to the claims of creditors in the event of insolvency or bankruptcy,
and participants are general creditors of the company as to their deferred compensation in the plans.
Chesapeake maintains no post-employment benefit plans except those sponsored by its wholly owned
subsidiary, Chesapeake Appalachia, L.L.C. Participation in these plans is limited to existing employees who
are union members and former employees who were union members. The Chesapeake Appalachia, L.L.C.
benefit plans provide health care and life insurance benefits to eligible employees upon retirement. We account
for these benefits on an accrual basis. As of December 31, 2010, the company had accrued approximately $2
million in accumulated post-employment benefit liability.
8. Stockholders’ Equity and Stock-Based Compensation Plans
Common Stock
The following is a summary of the changes in our common shares outstanding for 2010, 2009 and 2008:
Years Ended December 31,
2010 2009 2008
(in thousands)
Shares issued at January 1 ........................................ 648,549 607,953 511,648
Convertible note exchanges ....................................... 299 10,210 23,913
Preferred stock conversions/exchanges .............................. 21 1,422 12,673
Restricted stock issuances (net of forfeitures) ......................... 5,924 3,633 4,708
Stock option exercises ............................................ 458 508 1,584
Common stock issued for the purchase of proved and unproved
properties ..................................................... — 24,823 1,677
Common stock issuances for cash .................................. — — 51,750
Shares issued at December 31 ..................................... 655,251 648,549 607,953
In 2009 and 2008, we issued 24,822,832 and 1,677,000 shares of common stock, valued at $429 million
and $34 million, respectively, for the purchase of proved and unproved properties pursuant to an acquisition
shelf registration statement.
In 2010, 2009 and 2008, holders of certain of our contingent convertible senior notes exchanged their
notes for shares of common stock in privately negotiated exchanges as summarized below:
Year
Contingent Convertible
Senior Notes Principal Amount
Number of
Common Shares Issued
($ in millions) (in thousands)
2010 2.25% due 2038 $ 11 299
2009 2.25% due 2038 $ 364 10,210
2008 2.75% due 2035 $ 239 8,841
2.50% due 2037 272 8,417
2.25% due 2038 254 6,655
$ 765 23,913
The difference between the allocated debt value of the notes that were exchanged and the fair value of the
common stock issued resulted in a gain (loss) of ($2) million, ($40) million and $27 million, including deferred
charges associated with the exchanges, on the cancellation of indebtedness for the years ended December 31,
2010, 2009 and 2008, respectively.
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