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