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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (c)

The conversion and redemption provisions of our convertible senior notes are as follows: Optional Conversion by Holders. At the holder’s option, prior to maturity under certain circumstances, the notes are convertible into cash, our common stock, or a combination of cash and common stock, at our election. One triggering circumstance is when the price of our common stock exceeds a threshold amount during a specified period in a fiscal quarter, beginning with the first quarter of 2017. Convertibility based on common stock price is measured quarterly. The notes are also convertible, at the holder’s option, during specified five-day periods if the trading price of the notes is below certain levels determined by reference to the trading price of our common stock. The notes were not convertible under this provision during the year ended December 31, 2016. Upon conversion of a convertible senior note, the holder will receive cash, common stock or a combination of cash and common stock, at our election, according to the conversion rate specified in the indenture. The common stock price conversion threshold amount for the convertible senior notes is 130% of the conversion price. Optional Redemption by the Company. We may redeem the convertible senior notes for cash on or after September 15, 2019 if the price of our common stock exceeds 130% of the conversion price during a specified period at a redemption price of 100% of the principal amount of the notes.

(d)

The repurchase, conversion, contingent interest and redemption provisions of our contingent convertible senior notes are as follows: Holders’ Demand Repurchase Rights. The holders of our contingent convertible senior notes may require us to repurchase, in cash, all or a portion of their notes at 100% of the principal amount of the notes on any of four dates that are five, ten, fifteen and twenty years before the maturity date. Optional Conversion by Holders. At the holder’s option, prior to maturity under certain circumstances, the notes are convertible into cash and, if applicable, our common stock using a net share settlement process. One triggering circumstance is when the price of our common stock exceeds a threshold amount during a specified period within a fiscal quarter. Convertibility based on common stock price is measured quarterly. During the specified period in the fourth quarter of 2016, the price of our common stock was below the threshold level for each series of the contingent convertible senior notes and, as a result, the holders do not have the option to convert their notes into cash or common stock in the first quarter of 2017 under this provision. The notes are also convertible, at the holder’s option, during specified five-day periods if the trading price of the notes is below certain levels determined by reference to the trading price of our common stock. The notes were not convertible under this provision during the years ended December 31, 2016, 2015 and 2014. In general, upon conversion of a contingent convertible senior note, the holder will receive cash equal to the principal amount of the note and common stock for the note’s conversion value in excess of the principal amount. Contingent Interest. We will pay contingent interest on the contingent convertible senior notes after they have been outstanding at least ten years during certain periods if the average trading price of the notes exceeds the threshold defined in the indenture. The holders’ demand repurchase dates, the common stock price conversion threshold amounts (as adjusted to give effect to cash dividends on our common stock) and the ending date of the first six-month period in which contingent interest may be payable for the contingent convertible senior notes are as follows: Contingent Convertible Senior Notes 2.75% due 2035 2.5% due 2037 2.25% due 2038

Holders' Demand Repurchase Dates November 15, 2020, 2025, 2030 May 15, 2017, 2022, 2027, 2032 December 15, 2018, 2023, 2028, 2033

Common Stock Price Conversion Thresholds $ 45.02 $ 59.44 $ 100.20

Contingent Interest First Payable (if applicable) May 14, 2016 November 14, 2017 June 14, 2019

Optional Redemption by the Company. We may redeem the contingent convertible senior notes once they have been outstanding for ten years at a redemption price of 100% of the principal amount of the notes, payable in cash. In addition, we may redeem our 2.75% Contingent Convertible Senior Notes due 2035 at any time.

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Profile for Chesapeake Energy

2016 Annual Report  

2016 Annual Report