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FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934
GOTHIC ENERGY CORPORATION
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(Exact name of Registrant as specified in its Charter)
OKLAHOMA 22-2663839
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(State of incorporation or organization) (IRS Employer ID No.)
5727 SOUTH LEWIS AVENUE - SUITE 700 - TULSA, OKLAHOMA 74105
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(Address of principal executive offices)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
7 1/2% Cumulative Convertible Preferred Stock, par value $0.05 per share
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The Company has outstanding 4,590 shares of 7 1/2% Cumulative Convertible
Preferred Stock. The shares of 7 1/2% Cumulative Convertible Preferred Stock are
convertible, commencing December 31, 1996, into shares of the Company's common
stock at a conversion price per share of common stock equal to the lesser of (i)
$2.00 or (ii) a price equal to the average of the closing prices of the
Company's common stock during the 30 business days prior to the day the shares
are converted less a discount of 12 1/2%. The number of shares of common stock
to be issued on conversion is determined by multiplying the number of shares of
7 1/2% Cumulative Convertible Preferred Stock to be converted by $1,000 and
dividing the result by the conversion price in effect. In the event that at any
time after January 24, 1998 the market price for the shares of the Company's
common stock exceeds $4 per share, provided the shares to be issued on
conversion have been registered under the Securities Act of 1933, as amended,
the Company has the right to automatically convert all the shares of 7 1/2%
Cumulative Convertible Preferred Stock into shares of common stock at a
conversion price per share of common stock equal to the lesser of (i) $2.00 or
(ii) a price equal to the average of the closing prices of the Company's common
stock during the 30 business days prior the day the shares are converted less a
discount of 12 1/2%. In the event of such an automatic conversion, all the
shares outstanding would be converted and the conversion price per share of
common stock would not exceed $2.00. The shares of 7 1/2% Cumulative Convertible
Preferred Stock pay a cumulative dividend, payable semi-annually on June 30 and
December 31, commencing June 30, 1996, of 7 1/2% based on the liquidation value
(the "Liquidation Value") of $1,000 per share. The Company has the right to
redeem the shares of 7 1/2% Cumulative Convertible Preferred Stock at their
Liquidation Value plus accrued and unpaid dividends at any time commencing
January 24, 1998 upon giving 30 days prior written notice and, in the event of
the sale of all or substantially all the assets of the Company or a merger or
consolidation of the Company, other than with a subsidiary, the shares of 7 1/2%
Cumulative Convertible Preferred Stock must be redeemed. The shares of 7 1/2%
Cumulative Convertible Preferred Stock do not have any voting rights except as
required by law. The shares of 7 1/2% Cumulative Convertible Preferred Stock
have a preferential right in the event of the liquidation or dissolution of the
Company to receive their Liquidation Value and after payment of such sum are not
entitled to receive any other sums.
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ITEM 2. EXHIBITS
1 Form of Certificate of Designation, Preferences, Rights and Liitations
of Preferred Stock as filed with the State of Oklahoma on October 17, 1996
(filed herewith).
2 Specimen Preferred Stock Cerficiate (filed herewith)
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SIGNATURES
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.
GOTHIC ENERGY CORPORATION
Dated: June 23, 1997 By: /s/ Michael K. Paulk
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Michael K. Paulk, President
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Exhibit 1
CERTIFICATE OF DESIGNATION, PREFERENCES, RIGHTS AND
LIMITATIONS OF PREFERRED STOCK OF
GOTHIC ENERGY NEWCO, INC.
(Pursuant to Section 1032G of the General Corporation Law of the State of
Oklahoma)
Michael Paulk and Linda Esley, being the President and Secretary,
respectively, of Gothic Energy Newco, Inc., a corporation duly organized and
existing under and by virtue of the General Corporation Law of the State of
Oklahoma (the "Corporation"), do hereby certify that:
Pursuant to the authority conferred upon the Board of Directors by Article
Fourth of the Certificate of Incorporation of the Corporation, and in accordance
with the provisions of Section 1032G of the General Corporation Law of the State
of Oklahoma, the Board of Directors adopted the following resolution at a
meeting duly convened and held on August 13, 1996, providing for the designation
of 5,540 shares of the Corporation's 7-1/2% Cumulative Convertible Preferred
Stock, par value $.05 per share:
RESOLVED, that pursuant to the authority granted to the Board of Directors
of the Corporation by Article Fourth of the Corporation's Certificate of
Incorporation, the Board of Directors hereby creates a series of 7-1/2%
Cumulative Convertible Preferred Stock of the Corporation to consist
initially of 5,540 shares, and hereby fixes the designation and amount
thereof, the voting powers and preferences, the relative, participating,
optional and other special rights, and the qualifications, limitation or
restrictions thereof, of the shares of such series as set forth on Exhibit
"A" attached hereto and made a part hereof.
IN WITNESS WHEREOF, the undersigned, being the above-named President and
Secretary, under penalty of perjury, do each hereby declare and certify that
this is the act and deed of the Corporation and the facts stated herein are true
and, accordingly, have hereunto signed this Certificate of Designation this 14th
day of October, 1996.
Attest: GOTHIC ENERGY NEWCO, INC.
/s/ Linda Esley By: /s/ Michael Paulk
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Linda Esley, Secretary Michael Paulk, President
1
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EXHIBIT "A"
PREFERRED STOCK
Section 1. Dividends.
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1A. General Obligation. When and as declared by the Corporation's
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board of directors and to the extent permitted under the General Corporation Law
of Oklahoma, the Corporation shall pay preferential dividends to the holders of
the 7-1/2% Convertible Preferred Stock, par value $.05 per share (the
"Convertible Preferred") as provided in this Section 1. Except as otherwise
provided herein, dividends on each share of the Convertible Preferred (a
"Share") shall accrue on a daily basis at the rate of 7-1/2% per annum of the
sum of the Liquidation Value thereof plus all accumulated and unpaid dividends
thereon, from and including the date of issuance of such Share to and including
the date on which the Liquidation Value of such Share (plus all accrued and
unpaid dividends thereon) is paid or the date on which such Share is converted
into shares of Conversion Stock hereunder. Such dividends shall accrue whether
or not they have been declared and whether or not there are profits, surplus or
other funds of the Corporation legally available for the payment of dividends.
The date on which the Corporation initially issues any Share shall be deemed to
be its "date of issuance" regardless of the number of times transfer of such
Share is made on the stock records maintained by or for the Corporation and
regardless of the number of certificates which may be issued to evidence such
Share.
1B. Dividend Reference Dates. To the extent not paid on each June 30
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and December 31 of each year during which any Share remains outstanding,
beginning June 30, 1996 (the "Dividend Reference Dates"), all dividends which
have accrued on each Share outstanding during the six-month period (or other
period in the case of the initial Dividend Reference Date) ending upon each
Dividend Reference Date shall be accumulated and shall remain accumulated
dividends with respect to such Share until paid.
1C. Distribution of Partial Dividend Payments. Except as otherwise
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provided herein, if at any time the Corporation pays less than the total amount
of dividends then accrued with respect to the Convertible Preferred, such
partial payment shall be distributed ratably among the holders thereof based
upon the number of Shares held by each such holder.
Section 2. Liquidation. Upon any liquidation, dissolution or winding up of
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the Corporation, each holder of Convertible Preferred shall be entitled to be
paid, before any distribution or payment is made upon any Junior Securities, an
amount in cash equal to the aggregate Liquidation Value (plus all accrued and
unpaid dividends) of all Shares held by such holder, and the holders of
Convertible Preferred shall not be entitled to any further payment. If upon any
such liquidation, dissolution or winding up of the Corporation, the
Corporation's assets to be distributed among the holders of the Convertible
Preferred are insufficient to permit payment to such holders of the aggregate
amount which they are entitled to be paid, then the entire assets to be
distributed shall be distributed ratably among such holders based upon the
aggregate Liquidation Value (plus all accrued and unpaid dividends) of the
Convertible
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Preferred held by each such holder. Prior to the liquidation, dissolution or
winding up of the Corporation, the board of directors, on behalf of the
Corporation, shall declare for payment all accrued and unpaid dividends with
respect to the Convertible Preferred. The Corporation shall mail written notice
of such liquidation, dissolution or winding up, not less than 60 days prior to
the payment date stated therein, to each record holder of Convertible Preferred.
Neither the consolidation or merger of the Corporation into or with any other
entity or entities, nor the sale or transfer by the Corporation of all or any
part of its assets, nor the reduction of the capital stock of the Corporation,
shall be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 2.
Section 3. Priority of Convertible Preferred on Dividends. So long as any
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Convertible Preferred remains outstanding, neither the Corporation nor any
Subsidiary shall pay or declare any dividend or make any distribution upon any
Junior Securities.
Section 4. Redemptions.
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4A. Optional Redemption. Subject to the restrictions contained
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herein, commencing at any time after January 24, 1998 (two years after the
effective date of the Public Offering), the Corporation may at any time redeem
all or any portion of the Convertible Preferred then outstanding. On any such
redemption, the Corporation shall pay a price per Share equal to the Liquidation
Value thereof plus all accrued and unpaid dividends thereon. Shares of
Convertible Preferred shall not be redeemed by the Corporation to the extent the
funds of the Corporation legally available for redemption of Shares on any
Redemption Date or any other redemption date specified in a notice of redemption
are insufficient, under the General Corporation Law of the State of Oklahoma or
otherwise, to redeem such Shares.
4B. Redemption Payment. For each Share which is to be redeemed, the
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Corporation shall be obligated on the Redemption Date to pay to the holder
thereof (upon surrender by such holder at the Corporation's principal office of
the certificate representing such Share) an amount in immediately available
funds equal to the Liquidation Value of such Share (plus all accrued and unpaid
dividends thereon). Prior to any redemption of Convertible Preferred, the
Corporation shall declare for payment all accrued and unpaid dividends with
respect to the Shares which are to be redeemed.
4C. Notice of Redemption. The Corporation shall mail written notice
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of each redemption of any Convertible Preferred to each record holder thereof
not more than 60 nor less than 30 days prior to the date on which such
redemption is to be made. Upon mailing any notice of redemption, the Corporation
shall become obligated to redeem the total number of Shares specified in such
notice at the time of redemption specified therein. In case fewer than the total
number of Shares represented by any certificate are redeemed, a new certificate
representing the number of unredeemed Shares shall be issued to the holder
thereof without cost to such holder within ten business days after surrender of
the certificate representing the redeemed Shares.
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4D. Determination of the Number of Each Holder's Shares to be
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Redeemed. The number of Shares of Convertible Preferred to be redeemed from
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each holder thereof in redemptions by the Corporation under this Section 4 shall
be the number of Shares determined by multiplying the total number of Shares of
Convertible Preferred to be redeemed times a fraction, the numerator of which
shall be the total number of Shares then held by such holder and the denominator
of which shall be the total number of Shares then outstanding.
4E. Dividends After Redemption Date. No Share is entitled to any
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dividends accruing after the date on which the Liquidation Value of such Share
(plus all accrued and unpaid dividends thereon) is paid to the holder thereof.
On such date all rights of the holder of such Share shall cease, and such Share
shall not be deemed to be outstanding.
4F. Redeemed or Otherwise Acquired Shares. Any Shares which are
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redeemed or otherwise acquired by the Corporation shall be cancelled and shall
not be reissued, sold or transferred.
4G. Accrued Dividends Must be Paid Prior to Any Redemption. The
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Corporation may not redeem any Convertible Preferred, unless all dividends
accrued on the outstanding Convertible Preferred through the immediately
preceding Dividend Reference Date have been paid in full.
4H. Special Redemption.
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(i) If a "Fundamental Change" (as defined below) is to
occur, the Corporation shall give written notice of such Fundamental Change
describing in reasonable detail the terms thereof to each holder of Convertible
Preferred not more than 30 days nor less than 20 days prior to the consummation
thereof. The holder or holders of the Convertible Preferred then outstanding may
require the Corporation to redeem all or any portion of the Convertible
Preferred owned by such holder or holders at a price per Share equal to the
Liquidation Value thereof (plus all accrued and unpaid dividends thereon) by
giving written notice to the Corporation of such election within ten days after
receipt of notice from the Corporation. The Corporation shall give prompt
written notice of such election to all other holders of Convertible Preferred
(but in any event within five days prior to the consummation of the Fundamental
Change), and each such holder shall have until two days after the receipt of
such notice to request redemption (by written notice given to the Corporation)
of all or any portion of the Convertible Preferred owned by such holder. Upon
receipt of such election(s), the Corporation shall be obligated to redeem the
aggregate number of Shares specified therein upon the consummation of such
Fundamental Change. If any proposed Fundamental Change does not occur, all
requests for redemption in connection therewith shall be automatically
rescinded. The term "Fundamental Change" means (a) a sale or transfer of all or
substantially all of the assets of the Corporation and its Subsidiaries on a
consolidated basis in any transaction or series of transactions and (b) any
merger, reorganization, restructuring or
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consolidation to which the Corporation is a party, except any such transaction
between the Corporation and a wholly owned subsidiary.
Section 5. Voting Rights. The holders of the Convertible Preferred
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shall not have any voting rights except as required by the General Corporation
Law of Oklahoma.
Section 6. Conversion.
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6A. Conversion Procedure.
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(i) At any time on and after December 31, 1996, and from
time to time thereafter, any holder of Convertible Preferred may convert all or
any portion of the Convertible Preferred (including any fraction of a Share)
held by such holder into a number of shares of Conversion Stock computed by
multiplying the number of Shares to be converted by the Liquidation Value and
dividing the result by the Conversion Price then in effect. In no event shall
the converting holder be required to make any payment to the Company upon
conversion.
(ii) Each conversion of Convertible Preferred shall be deemed
to have been effected as of the close of business on the date on which the
certificate or certificates representing the Convertible Preferred to be
converted have been surrendered at the principal office of the Corporation. At
such time as such conversion has been effected, the rights of the holder of such
Convertible Preferred as such holder shall cease and the Person or Persons in
whose name or names any certificate or certificates for shares of Conversion
Stock are to be issued upon such conversion shall be deemed to have become the
holder or holders of record of the shares of Conversion Stock represented
thereby.
(iii) The conversion rights of any Share subject to redemption
hereunder shall terminate on the Redemption Date for such Share unless the
Corporation has failed to pay to the holder thereof the Liquidation Value
thereof (plus all accrued and unpaid dividends thereon).
(iv) Notwithstanding any other provision hereof, if a
conversion of Convertible Preferred is to be made in connection with a Public
Offering, the conversion of any Shares of Convertible Preferred may, at the
election of the holder of such Shares, be conditioned upon the consummation of
the Public Offering in which case such conversion shall not be deemed to be
effective until the consummation of the Public Offering.
(v) As soon as possible after a conversion has been
effected, the Corporation shall deliver to the converting holder:
(a) a certificate or certificates representing the
number of shares of Conversion Stock issuable by reason of such conversion in
such name or names and such denomination or denominations as the converting
holder has specified and each such
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certificate shall bear a legend substantially similar to the legend set forth in
paragraph 7B of the Purchase Agreement;
(b) payment in cash in an amount equal to all
accrued dividends with respect to each Share converted, which have not been paid
prior thereto, plus the amount payable under subparagraph (ix) below with
respect to such conversion; and
(c) a certificate representing any Shares of
Convertible Preferred which were represented by the certificate or certificates
delivered to the Corporation in connection with such conversion but which were
not converted.
(vi) If for any reason the Corporation is unable to pay any
portion of the accrued dividends on Convertible Preferred being converted, such
portion of the unpaid dividends may, at the converting holder's option, be
converted into an additional number of shares of Conversion Stock determined by
dividing the amount of the unpaid dividends to be applied for such purpose, by
the Conversion Price then in effect. If the converting holder elects not to
choose such option, the Corporation shall pay such dividends to the converting
holder as soon thereafter as funds of the Corporation are legally available for
such payment. At the request of any such converting holder, the Corporation
shall provide such holder with written evidence of its obligation to such
holder.
(vii) The issuance of certificates for shares of Conversion
Stock upon conversion of Convertible Preferred shall be made without charge to
the holder of such Convertible Preferred for any issuance tax in respect thereof
or other cost incurred by the Corporation in connection with such conversion and
the related issuance of shares of Conversion Stock. Upon conversion of each
Share of Convertible Preferred, the Corporation shall take all such actions as
are necessary in order to insure that the Conversion Stock issuable with respect
to such conversion shall be validly issued, fully paid and nonassessable.
(viii) The Corporation shall not close its books against the
transfer of Convertible Preferred or of Conversion Stock issued or issuable upon
conversion of Convertible Preferred in any manner which interferes with the
timely conversion of the Convertible Preferred. The Corporation shall assist and
cooperate with any holder of Shares required to make any governmental filings or
obtain any governmental approval prior to or in connection with any conversion
of Shares hereunder (including, without limitation, making any filings required
to be made by the Corporation).
(vix) If any fractional interest in a share of Conversion
Stock would, except for the provisions of this subparagraph, be deliverable upon
any conversion of the Convertible Preferred, the Corporation, in lieu of
delivering the fractional share therefor, shall pay an amount to the holder
thereof equal to the Market Price of such fractional interest as of the date of
conversion.
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(x) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Conversion Stock, solely
for the purpose of issuance upon the conversion of the Convertible Preferred,
such number of shares of Conversion Stock issuable upon the conversion of all
outstanding Convertible Preferred. All shares of Conversion Stock which are so
issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all liens and charges. The Corporation shall take
all such actions as may be necessary to assure that all such shares of
Conversion Stock may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares of Conversion Stock may be listed (except for official notice
of issuance which shall be immediately delivered by the Corporation upon each
such issuance).
6B. Mandatory Conversion. In the event that at any time after a date
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two years after the effective date of the Public Offering, the Market Price, as
defined in Section 10 and modified by Section 6H hereof, for the Corporation's
Common Stock exceeds $4 per share, then the Corporation may, by giving written
notice in accordance with Section 12 hereof to each holder of Convertible
Preferred, given within 30 days of the date such Market Price, as defined in
Section 10 and modified by Section 6H hereof exceeds $4 per share, automatically
convert the Convertible Preferred into shares of Common Stock, provided,
however, the Corporation shall not have the right to give any such notice of
automatic conversion unless at the time of giving such notice the Corporation
has at its expense filed and caused to become effective a registration statement
under the Securities Act of 1933, as amended, relating to the resale of the
shares of Common Stock issuable upon the automatic conversion of the Convertible
Preferred. The holders of the Convertible Preferred agree to cooperate with the
Corporation and provide such information and documents as reasonably may be
requested in assisting the Corporation in causing such registration statement to
be filed and become effective. Such conversion shall be effective as such time
as the notice thereof is deemed effective under Section 12. Such conversion
shall be effected in accordance with Subsections 6A(v) through 6A(x) hereof.
6C. Conversion Price. The "Conversion Price" shall be the lesser of
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(i) $2.00 (the "Fixed Conversion Price") or (ii) a price equal to the Market
Price of the Company's Common Stock, determined as of the last business day
before the date on which the certificate representing the Convertible Preferred
to be converted has been surrendered to the Company for conversion, less a
discount of 12-1/2% (the "Fluctuating Conversion Price"). In order to prevent
dilution of the conversion rights granted under this subdivision, the Fixed
Conversion Price shall be subject to adjustment from time to time pursuant to
this Section 6.
6D. Subdivision or Combination of Common Stock. If the Corporation
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at any time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Fixed Conversion Price in effect immediately prior
to such subdivision shall be proportionately reduced, and if the Corporation at
any time combines (by reverse stock split or otherwise) one
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or more classes of its outstanding shares of Common Stock into a smaller number
of shares, the Fixed Conversion Price in effect immediately prior to such
combination shall be proportionately increased.
6E. Reorganization, Reclassification, Consolidation, Merger or Sale.
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Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Corporation's assets to another Person
or other transaction which is effected in such a manner that holders of Common
Stock are entitled to receive (either directly or upon subsequent liquidation)
stock, securities or assets with respect to or in exchange for Common Stock is
referred to herein as an "Organic Change." Prior to the consummation of any
Organic Change, the Corporation shall make appropriate provisions (in form and
substance satisfactory to the holders of a majority of the Convertible Preferred
then outstanding) to insure that each of the holders of Convertible Preferred
shall thereafter have the right to acquire and receive, in lieu of or in
addition to (as the case may be) the shares of Conversion Stock immediately
theretofore acquirable and receivable upon the conversion of such holder's
Convertible Preferred, such shares of stock, securities or assets as such holder
would have received in connection with such Organic Change if such holder had
converted its Convertible Preferred immediately prior to such Organic Change.
In each such case, the Corporation shall also make appropriate provisions (in
form and substance satisfactory to the holders of a majority of the Convertible
Preferred then outstanding) to insure that the provisions hereof shall
thereafter be applicable to the Convertible Preferred. The Corporation shall
not effect any such consolidation, merger or sale unless, prior to the
consummation thereof, the successor corporation (if other than the Corporation)
resulting from consolidation or merger or the corporation purchasing such assets
assumes by written instrument (in form reasonably satisfactory to the holders of
a majority of the Convertible Preferred then outstanding), the obligation to
deliver to each such holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holder may be entitled to
acquire.
6F. Certain Events. If any event occurs of the type contemplated by
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the provisions of this Section 6 but not expressly provided for by such
provisions, then the Corporation's board of directors shall make an appropriate
adjustment in the Fixed Conversion Price so as to protect the rights of the
holders of Convertible Preferred; provided that no such adjustment shall
increase the Fixed Conversion Price as otherwise determined pursuant to this
Section 6 or decrease the number of shares of Conversion Stock issuable upon
conversion of each Share of Convertible Preferred.
6G. Notices.
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(i) Immediately upon any adjustment of the Fixed Conversion
Price, the Corporation shall give written notice thereof to all holders of
Convertible Preferred, setting forth in reasonable detail and certifying the
calculation of such adjustment.
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(ii) The Corporation shall give written notice to all holders
of Convertible Preferred at least 20 days prior to the date on which the
Corporation closes its books or takes a record (a) with respect to any dividend
or distribution upon Common Stock or (b) for determining rights to vote with
respect to any Organic Change, dissolution or liquidation.
(iii) The Corporation shall also give written notice to the
holders of Convertible Preferred at least 20 days prior to the date on which any
Organic Change shall take place.
6H. Market Price for Purposes of Section 6B. For purposes of Section
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6B hereof, the term Market Price shall be the result of averaging the Market
Price, as defined in Section 10, for the Corporation's shares of Common Stock in
each such case averaged over a period of 30 days consisting of the day as of
which "Market Price" is being determined and the 29 consecutive business days
prior to such day.
Section 7. Liquidating Dividends. If the Corporation declares or pays a
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dividend upon the Common Stock payable otherwise than in cash out of earnings or
earned surplus (determined in accordance with generally accepted accounting
principles, consistently applied) except for a stock dividend payable in shares
of Common Stock (a "Liquidating Dividend"), then the Corporation shall pay to
the holders of Convertible Preferred at the time of payment thereof the
Liquidating Dividends which would have been paid on the shares of Conversion
Stock had such Convertible Preferred been converted immediately prior to the
date on which a record is taken for such Liquidating Dividend, or, if no record
is taken, the date as of which the record holders of Common Stock entitled to
such dividends are to be determined.
Section 8. Registration of Transfer. The Corporation shall keep at its
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principal office a register for the registration of Convertible Preferred. Upon
the surrender of any certificate representing Convertible Preferred at such
place, the Corporation shall, at the request of the record holder of such
certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing in the aggregate
the number of Shares represented by the surrendered certificate. Each such new
certificate shall be registered in such name and shall represent such number of
Shares as is requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate, and dividends
shall accrue on the Convertible Preferred represented by such new certificate
from the date to which dividends have been fully paid on such Convertible
Preferred represented by the surrendered certificate.
Section 9. Replacement. Upon receipt of evidence reasonably satisfactory to
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the Corporation (an affidavit of the registered holder shall be satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing Shares of Convertible Preferred, and in the case of any such loss,
theft or destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is a financial institution or other
institutional investor having assets of at least $10 million, its own agreement
shall be
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satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
Shares of such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate, and dividends shall accrue on the Convertible Preferred represented
by such new certificate from the date to which dividends have been fully paid on
such lost, stolen, destroyed or mutilated certificate.
Section 10. Definitions.
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"Common Stock" means, collectively, the Corporation's Common Stock,
par value $.01 per share, and any capital stock of any class of the Corporation
hereafter authorized which is not limited to a fix sum or percentage of par or
stated value in respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon any liquidation, dissolution or
winding up of the Corporation.
"Conversion Stock" means shares of the Corporation's Common Stock;
provided that if there is a change such that the securities issuable upon
conversion of the Convertible Preferred are issued by an entity other than the
Corporation or there is a change in the class of securities so issuable, then
the term "Conversion Stock" shall mean one share of the security issuable upon
conversion of the Convertible Preferred if such security is issuable in shares,
or shall mean the smallest unit in which such security is issuable if such
security is not issuable in shares.
"Corporation" means Gothic Energy Newco, Inc. and its predecessors,
successors and assigns.
"Junior Securities" means any of the Corporation's equity securities
other than the Convertible Preferred.
"Liquidation Value" of any Share as of any particular date shall be
equal to $1,000, provided, however, if the Corporation at any time subdivides
(by any stock split, stock dividend, recapitalization or otherwise) the
Convertible Preferred into a greater number of shares, the Liquidation Value in
effect immediately prior to such subdivision shall be proportionately reduced,
and if the Corporation at any time combines (by reverse stock split or
otherwise) the Convertible Preferred into a smaller number of shares, the
Liquidation Value in effective immediately prior to such combination shall be
proportionately increased.
"Market Price" of any security means the average of the closing prices
as of any date of determination of such security's sales on all securities
exchanges on which such security may at the time be listed, or, if there has
been no sales on any such exchange on any day, the average of the highest bid
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and lowest asked prices on all such exchanges at the end of such day, or, if on
any day such security is not so listed, the average of the representative bid
and asked prices quoted in the NASDAQ System as of 4:00PM, New York time, or, if
on any day such security is not quoted in the NASDAQ System, the average of the
highest bid and lowest asked prices on such day in the domestic over-the-counter
market as reported by the National Quotation Bureau, Incorporated, or any
similar successor organization. If at any time such security is not listed on
any securities exchange or quoted in the NASDAQ System or the over-the-counter
market, the "Market Price" shall be the fair value thereof determined jointly by
the Corporation and the holders of a majority of the Convertible Preferred. If
such parties are unable to reach agreement within a reasonable period of time,
such fair value shall be determined by an independent appraiser experienced in
valuing securities jointly selected by the Corporation and the holders of a
majority of the Convertible Preferred. The determination of such appraiser
shall be final and binding upon the parties, and the Corporation shall pay the
fees and expenses of such appraiser.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
"Public Offering" means an offering of securities pursuant to a
registration statement declared effective under the Securities Act of 1933, as
amended, which are sold to an underwriter on a firm commitment basis for public
distribution.
"Purchase Agreement" means the Purchase Agreement, dated as of
December 18, 1995, by and among the Corporation and certain investors, as such
agreement may from time to time be amended in accordance with its terms.
"Redemption Date" as to any Share means any date specified in any
notice of redemption at the Corporation's option; provided that no such date
shall be a Redemption Date unless the Liquidation Value of such Share (plus all
accrued and unpaid dividends thereon) is actually paid in full on such date, and
if not so paid in full, the Redemption Date shall be the date on which the
holder of such Share has received payment in full of such amount.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, association
or other business entity gains
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<PAGE>
or losses or shall be or control the managing general partner of such
partnership, association or other business entity.
Section 11. Amendment and Waiver. No amendment, modification or waiver shall
--------------------
be binding or effective with respect to any provision of Sections 1 to 11 hereof
without the prior written consent of the holders of a majority of the
Convertible Preferred outstanding at the time such action is taken; and provided
that no change in the terms hereof may be accomplished by merger or
consolidation of the Corporation with another Corporation or entity unless the
Corporation has obtained the prior written consent of the holders of the
applicable percentage of the Convertible Preferred then outstanding.
Section 12. Notices. Except as otherwise expressly provided hereunder, all
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notices referred to herein shall be in writing and shall be delivered by
registered or certified mail, return receipt requested and postage prepaid, or
by reputable overnight courier service, charges prepaid, and shall be deemed to
have been given when so mailed or sent (i) to the Corporation, at its principal
executive offices and (ii) to any stockholder, at such holder's address as it
appears in the stock records of the Corporation (unless otherwise indicated by
any such holder).
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<PAGE>
Exhibit 2
Number Incorporated Under The Laws Of Shares
- - - - OKLAHOMA - - -
There is a restriction on the
transfer of these shares. See
legend on reverse side.
(See Statement and Legend On Reverse Side)
GOTHIC ENERGY CORPORATION
7 1/2% Cumulative Convertible Preferred Stock
(par value $0.05 per share)
THIS CERTIFIES THAT __________________________________________________ IS THE
OWNER OF ________________________________________________________________ FULLY
PAID AND NON-ASSESSABLE SHARES OF THE 7 1/2% CUMULATIVE CONVERTIBLE PREFERRED
STOCK OF THE ABOVE-NAMED CORPORATION TRANSFERRABLE ONLY ON THE BOOKS OF THE
CORPORATION BY THE HOLDER HEREOF IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON
SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED.
IN WITNESS WHEREOF, THE SAID CORPORATION HAS CAUSED THIS
CERTIFICATE TO BE SIGNED BY ITS DULY AUTHORIZED OFFICERS
AND ITS CORPORATE SEAL TO BE HEREUNDER AFFIXED THIS
_________ DAY OF ________________, A.D., 19_____.
SEAL ________________________________ ________________________________
John Rainwater, Secretary Michael K. Paulk, President
<PAGE>
FOR VALUE RECEIVED, _______________ HEREBY SELL, ASSIGN AND TRANSFER UNTO
Please Insert Social Security Or Other
Indentifying Number of Assignee. ________________________________________
____________________________________________ SHARES REPRESENTED BY THE WITHIN
CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT
_________________________________________________________ ATTORNEY
TO TRANSFER THE SAID SHARES ON THE BOOKS OF THE WITHIN NAMED CORPORATION WITH
FULL POWER OF SUBSTITUTION IN THE PREMISES.
DATED _______________, 19_____
IN PRESENCE OF
______________________________ ______________________________
In accordance with Section 1032F of the Oklahoma General Corporation Act, the
Corporation will furnish without charge to each Stockholder who so requests the
powers, designations, preferences and relative, participating, optional, or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
The securities represented by this Certificate were originally issued on January
30, 1996, and have not been registered under the Securities Act of 1933, as
amended. The transfer of the securities represented by this Certificate is
subject to the conditions specified in the Purchase Agreement, dated as of
December 20, 1995, between the issuer (the "Company") and a certain investor,
and the Company reserves the right to refuse the transfer of such securities
until such conditions have been fulfilled with respect to such transfer. A copy
of such conditions shall be furnished by the Company to the holder hereof upon
written request and without charge.
