<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 25, 1998
REGISTRATION NO. 333-46129
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4 REGISTRATION STATEMENT
ON
FORM S-8*
UNDER THE SECURITIES ACT OF 1933
CHESAPEAKE ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
OKLAHOMA 73-1395733
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6100 NORTH WESTERN AVENUE
OKLAHOMA CITY, OKLAHOMA 73118
(405) 848-8000
(Address, including zip code and telephone number,
including area code, of registrant's Principal Executive Offices)
REPLACEMENT OPTION AGREEMENTS **
PURSUANT TO
HUGOTON ENERGY CORPORATION 1993 STOCK OPTION PLAN,
HUGOTON ENERGY CORPORATION AMENDED AND RESTATED 1993 NONEMPLOYEE
DIRECTORS' STOCK OPTION PLAN,
W. MARK WOMBLE INCENTIVE STOCK OPTION AGREEMENT,
JOHN T. MCNABB, II NONSTATUTORY STOCK OPTION AGREEMENT,
DAVID S. ELKOURI NONSTATUTORY STOCK OPTION AGREEMENT,
HUGOTON ENERGY CORPORATION AMENDED AND RESTATED 1995 STOCK OPTION PLAN
(Full title of the plans)
AUBREY K. MCCLENDON
6100 NORTH WESTERN AVENUE
OKLAHOMA CITY, OKLAHOMA 73118
(405) 848-8000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
----------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TO BE OFFERING PRICE AGGREGATE REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE OFFERING PRICE FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share(2) 1,159,768 $(2) $(2) $(2)
====================================================================================================================================
(1) Consisting of, on an as converted basis, 1,159,768 shares of common stock par value $0.01 per share, of the Registrant reserved
for issuance under the Replacement Option Agreements described herein under "Explanatory Notes." On March 10, 1998, all options
("Hugoton Options") issued and outstanding under the employee benefit plans of Hugoton Energy Corporation ("Hugoton"), a wholly
owned subsidiary of the Registrant, listed above became immediately vested and exercisable and were assumed by the Registrant
and the right to receive one share of common stock of Hugoton upon exercise of the Hugoton Options was converted into the right
to receive 1.3 shares of Common Stock of the Registrant. In addition, the number of shares of Common Stock of the Registrant
registered herein is subject to adjustment to prevent dilution resulting from stock splits, stock dividends, or similar
transactions.
(2) All filing fees payable in connection with the issuance of these securities were previously paid in connection with the filing
of the Registrant's registration statement on Form S-4 (File No. 333-46129) on February 11, 1998.
(*) Filed as a post-effective amendment on Form S-8 to such Form S-4 registration statement. See "Explanatory Notes."
(**) As further described herein under "Explanatory Notes."
====================================================================================================================================
</TABLE>
<PAGE> 2
EXPLANATORY NOTES
Chesapeake Energy Corporation (the "Company" or the "Registrant") hereby
amends its registration statement on Form S-4 (File No. 333-46129) (the "Form
S-4") by filing this Post-effective Amendment No. 1 on Form S-8 ("Post-
effective Amendment No. 1") relating to up to 1,159,768 shares of common stock,
par value $.01 per share, of the Company (the "Common Stock") issuable upon
exercise of the options granted pursuant to the Replacement Option Agreements.
All shares of Common Stock issuable upon exercise of the options granted
pursuant to the Replacement Option Agreements covered by this Post-Effective
Amendment No. 1 were previously included in the Form S-4.
On March 10, 1998 (the "Effective Time"), pursuant to the Agreement and
Plan of Merger, dated as of November 12, 1997, as amended by Amendment No. 1
thereto dated as of February 9, 1998 (collectively, the "Merger Agreement"), by
and among the Company, Chesapeake Acquisition Corp. ("Merger Sub"), an indirect
wholly owned subsidiary of the Company, and Hugoton Energy Corporation
("Hugoton"), Merger Sub merged with and into Hugoton, whereby Hugoton became an
indirect wholly owned subsidiary of the Company (the "Merger"). Pursuant to the
Merger Agreement, each unexpired and unexercised outstanding option (each a
"Hugoton Option") to purchase one share of common stock, no par value, of
Hugoton ("Hugoton Common Stock") became immediately vested and exercisable and
was automatically converted into an option ("Replacement Option") to purchase
1.3 shares of Common Stock at the current exercise price per share of Hugoton
Common Stock divided by 1.3. Each Replacement Option is otherwise subject to all
of the other terms of the Hugoton Options to which it relates.
As of the Effective Time, the Replacement Options granted pursuant to the
Replacement Option Agreements covered by this Post-effective Amendment No. 1
substitute all of the Hugoton Options granted and outstanding pursuant to the
Hugoton Energy Corporation 1993 Stock Option Plan, the Hugoton Energy
Corporation Amended and Restated 1993 Nonemployee Directors' Stock Option Plan,
the Hugoton Energy Corporation Amended and Restated 1995 Stock Option Plan, the
W. Mark Womble Incentive Stock Option Agreement, the John T. McNabb, II
Nonstatutory Stock Option Agreement and the David S. Elkouri Nonstatutory Stock
Option Agreement (collectively, the "Hugoton Plans").
Listed below are the former Hugoton directors and employees who were
granted Replacement Options covered by this Post-Effective Amendment No. 1, the
number of shares of Common Stock issuable pursuant to such Replacement Options,
the respective exercise prices, and the Hugoton Plans pursuant to which such
options were originally granted.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
OF COMMON STOCK EXERCISE PRICE PLAN
<S> <C> <C> <C>
Floyd Wilson 81,250 $5.26 3
97,500 $6.15 3
146,250 $7.00 3
Mark Womble 19,500 $5.26 2
16,250 $5.26 6
29,250 $6.15 3
19,500 $7.00 3
19,500 $5.92 2
32,500 $6.54 2
Jimmy Gowens 32,500 $5.26 2
4,875 $5.26 6
26,975 $0.08 2
14,625 $6.15 3
32,500 $5.92 2
6,500 $6.54 3
</TABLE>
-2-
<PAGE> 3
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
OF COMMON STOCK EXERCISE PRICE PLAN
<S> <C> <C> <C>
Earl Ringeisen 32,500 $5.26 2
3,250 $5.26 6
41,600 $0.08 2
9,750 $6.15 3
32,500 $5.92 2
John McNabb 6,500 $5.72 5
65,000 $7.69 4
6,500 $9.42 1
David Elkouri 6,500 $5.72 5
32,500 $7.69 4
6,500 $9.42 1
6,500 $7.93 5
Alan Andreini 6,500 $5.72 5
13,000 $6.83 5
6,500 $7.93 5
William Macaulay 6,500 $5.72 5
6,500 $7.93 5
Jonathan Linker 6,500 $5.72 5
6,500 $7.93 5
Dallas Dobbs 9,750 $5.26 2
4,875 $5.26 6
14,625 $6.15 3
9,750 $5.92 2
Shane Bayless 3,250 $6.15
9,750 $6.54 2
Randy Click 6,500 $5.26 2
6,500 $6.15 3
6,500 $6.35 3
7,313 $5.92 2
3,250 $7.69 2
David Drummond 65,000 $7.79 6
Mark Grommesh 3,250 $5.26 6
9,750 $6.15 3
6,500 $6.54 3
Ernst Morrison 2,438 $6.15 3
</TABLE>
-3-
<PAGE> 4
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
OF COMMON STOCK EXERCISE PRICE PLAN
<S> <C> <C> <C>
Les Seibert 1,625 $5.26 6
4,875 $6.15 3
6,500 $6.54 3
Kurt Schweigert 1,625 $6.15 3
Chris Lee 813 $6.15 3
Joe Brougher 813 $5.26 6
2,438 $6.15 3
Julie Wolf 488 $5.26 6
1,463 $6.15 3
Edward Oursler 488 $5.26 6
1,463 $6.15 3
Dennis Frick 488 $5.26 6
1,463 $6.15 3
DJ Freeman 325 $5.26 6
975 $6.15 3
1,950 $6.54 3
Arlene Valliquette 325 $5.26 6
975 $6.15 3
Jo Rhone 325 $5.26 6
975 $6.15 3
Jeff Logan 32,500 $5.26 6
7,800 $0.08 2
32,500 $5.92 2
Richard Stoneburner 6,500 $6.54 2
TOTAL 1,159,768
=========
</TABLE>
- --------------------------------------
1 Hugoton Energy Corporation 1993 Nonemployee Directors' Stock Option Plan
2 Hugoton Energy Corporation 1993 Stock Option Plan
3 Hugoton Energy Corporation 1995 Stock Option Plan
4 Hugoton Energy Corporation Nonstatutory Stock Option Agreement dated 11/23/93
and amended 1/12/98
5 Hugoton Energy Corporation Amended and Restated 1993 Nonemployee Directors'
Stock Option Plan
6 Hugoton Energy Corporation Amended and Restated 1995 Stock Option Plan
-4-
<PAGE> 5
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to former employees as specified by Rule 428(b)(1) of
the Securities Act of 1933, as amended (the "Securities Act"). These documents
and the documents incorporated by reference herein pursuant to Item 3 of Part II
of this Registration Statement, taken together, constitute a prospectus that
meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission by the Company (File No. 1-13726) pursuant to the Securities Exchange
Act of 1934 (the "Exchange Act") are incorporated by reference in this
Registration Statement:
1. Annual Report on Form 10-K for the fiscal year ended June 30, 1997;
2. Quarterly Report on Form 10-Q for the quarter ended September 30,
1997; and
3. Current Reports on Form 8-K filed September 9, 1997, October 1,
1997, October 31, 1997, November 5, 1997, November 6, 1997,
November 20, 1997, December 11, 1997, December 24, 1997, January
15, 1998, January 26, 1998, February 5, 1998, February 13, 1998,
March 5, 1998 (four reports), March 20, 1998 and March 23, 1998.
All documents and reports filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement, and prior to the filing of a post-effective amendment to
this Registration Statement that indicates that all securities offered by this
Registration Statement have been sold or which deregisters all such securities
then remaining unsold, shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of such
documents or reports. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The General Corporation Act of Oklahoma provides for indemnification of
each of the Company's officers and directors against (a) expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with any action, suit or proceeding
brought by reason of his being or having been a director, officer, employee or
agent of the Company, or of any other corporation, partnership, joint venture,
trust or other enterprise at the request of the Company, other than an action by
or in the right of the Company, provided that he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of
the Company, and with respect to any criminal action, he had no reasonable cause
to believe that his conduct was unlawful and (b) expenses, including attorneys'
fees, actually and reasonably incurred by him in connection with the defense or
settlement of any action or suit by or in the right of the Company brought by
reason of his being or having been a director, officer, employee or agent of the
Company, or any other corporation, partnership, joint venture, trust or other
enterprise at the request of the Company, provided that he acted in good faith
and in a manner he reasonably
-5-
<PAGE> 6
believed to be in or not opposed to the best interest of the Company, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which he shall have been adjudged liable to the Company, unless and only
to the extent that the court in which such action was decided has determined
that the person is fairly and reasonably entitled to indemnity for such expenses
which the court deems proper. Article VIII of the Company's Certificate of
Incorporation provides for indemnification of the Company's director and
officers. The Oklahoma General Corporation Act also permits the Company to
purchase and maintain insurance on behalf of the Company's directors and
officers against any liability arising out of their status as such, whether or
not the Company would have the power to indemnify them against such liability.
These provisions may be sufficiently broad to indemnify such persons for
liabilities arising under the Securities Act of 1933 (the "Securities Act").
The Company has entered into indemnity agreements with each of its
directors and executive officers. Under each indemnity agreement, the Company
will pay on behalf of the indemnitee, and his executors, administrators and
heirs, any amount which he is or becomes legally obligated to pay because of (i)
any claim or claims from time to time threatened or made against him by any
person because of any act or omission or neglect or breach of duty, including
any actual or alleged error or misstatement or misleading statement, which he
commits or suffers while acting in his capacity as a director and/or officer of
the Company or an affiliate or (ii) being a party, or being threatened to be
made a party, to any threatened, pending or contemplated action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was an officer, director, employee or agent of the
Company or an affiliate or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The payments which the Company will be
obligated to make hereunder shall include, inter alia, damages, charges,
judgments, fines, penalties, settlements and costs, cost of investigation and
cost of defense of legal, equitable or criminal actions, claims or proceedings
and appeals therefrom, and costs of attachment, supersedeas, bail, surety or
other bonds. The Company also provides liability insurance for each of its
directors and executive officers.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed herewith or incorporated by reference
as part of this Registration Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
- ------- -----------------------
<S> <C>
3.1 Certificate of Incorporation of the Company (incorporated herein by
reference to Exhibit 3.1 to Company's quarterly report on Form 10-Q for
the quarter ended December 31, 1996).
3.2 Amendment to Certificate of Incorporation of the Company filed December
17, 1997.*
3.3 Bylaws of the Company (incorporated herein by reference to Exhibit 3.2
to Company's Registration Statement on Form 8-B (No. 001-137260)).
4.1 Indenture dated as of March 15, 1997 among the Registrant, as issuer,
Chesapeake Operating, Inc., Chesapeake Gas Development Corporation and
Chesapeake Exploration Limited Partnership, as Subsidiary Guarantors,
and United States Trust Company of New York, as Trustee, with respect
to 7 7/8% Senior Notes due 2004. Incorporated herein by reference to
Exhibit No. 4.1 to Registrant's Registration Statement on Form S-4 (No.
333-24995).
4.2 Indenture dated as of March 15, 1997 among the Registrant, as issuer,
Chesapeake Operating, Inc., Chesapeake Gas Development Corporation and
Chesapeake Exploration Limited Partnership, as Subsidiary Guarantors,
and United States Trust Company of New York, as Trustee, with respect
to 8 1/2% Senior Notes due 2012. Incorporated herein by reference to
Exhibit No. 4.3 to Registrant's Registration Statement on Form S-4 (No.
333-24995).
4.3 Indenture dated as of May 15, 1995 among Chesapeake Energy
Corporation, its subsidiaries signatory thereto as Subsidiary
Guarantors and United States Trust Company of New York, as Trustee.
Incorporated herein by reference to Exhibit No. 4.3 to Registrant's
Registration Statement on Form S-4 (No. 33-93718).
4.4 Indenture dated as of April 1, 1996 among Chesapeake Energy
Corporation, its subsidiaries signatory thereto as Subsidiary
Guarantors and United States Trust Company of New York, as Trustee.
Incorporated herein by reference to Exhibit No. 4.6 to Registrant's
Registration Statement on Form S-3 (No. 333-1588).
4.5 Stock Registration Agreement dated May 21, 1992 between Chesapeake
Energy Corporation and various lenders, as amended by First Amendment
thereto dated May 26, 1992. Incorporated herein by reference to
Exhibits 10.26.1 and 10.26.2 to Registrant's Registration Statement on
Form S-1 (No. 33-55600).
5.1 Opinion of Andrews & Kurth L.L.P. regarding the legality of the
securities to be registered.*
23.1 Consent of Andrews & Kurth L.L.P. (included in the opinion filed as
Exhibit 5.1 hereto).
23.2 Consent of Coopers & Lybrand L.L.P.*
23.3 Consent of Price Waterhouse LLP.*
23.4 Consent of Williamson Petroleum Consultants, Inc.*
24.1 Power of Attorney (included in the signature pages of the Registration
Statement on Form S-4).
99.1 Hugoton Energy Corporation 1993 Stock Option Plan.*
99.2 Hugoton Energy Corporation Amended and Restated 1993 Nonemployee
Directors' Stock Option Plan.*
99.3 W. Mark Womble Incentive Stock Option Agreement.*
99.4 John T. McNabb, II Nonstatutory Stock Option Agreement.*
99.5 David S. Elkouri Nonstatutory Stock Option Agreement.*
99.6 Hugoton Energy Corporation Amended and Restated 1995 Stock Option
Plan.*
- -------------------------
* Filed herewith
</TABLE>
-6-
<PAGE> 7
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing this Post-Effective Amendment No. 1 to Form S-4
Registration Statement on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Oklahoma City, State of Oklahoma on March 24, 1998.
CHESAPEAKE ENERGY CORPORATION
By: /s/ Aubrey K. McClendon
-----------------------------------
Aubrey K. McClendon
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933 this Post-Effective
Amendment No. 1 to Form S-4 Registration Statement on Form S-8 has been signed
by the following persons in the capacities indicated on March 24, 1998.
Name Title
/s/ Aubrey K. McClendon Chairman of the Board of Directors, Chief Executive
- -------------------------- Officer and Director (Principal Executive Officer)
Aubrey K. McClendon
* President, Chief Operating Officer
- -------------------------- and Director (Principal Executive Officer)
Tom L. Ward
/s/ Marcus C. Rowland Senior Vice President-Finance and
- -------------------------- Chief Financial Officer (Principal Financial Officer)
Marcus C. Rowland
* Controller (Principal Accounting Officer)
- --------------------------
Ronald A. Lefaive
* Director
- --------------------------
Edgar F. Heizer, Jr.
* Director
- --------------------------
Breene M. Kerr
* Director
- --------------------------
Shannon T. Self
* Director
- --------------------------
Frederick B. Whittemore
* Director
- --------------------------
Walter C. Wilson
*Marcus C. Rowland, by signing his name hereto, signs this document on behalf of
each of the persons indicated above pursuant to the powers of attorney duly
executed by such persons and set forth on the signature page of the Registration
Statement filed with the Securities and Exchange Commission on February 11,
1998.
By: /s/ Marcus C. Rowland
-----------------------------------
Marcus C. Rowland, attorney-in-fact
-8-
<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
- ------- -----------------------
<S> <C>
3.1 Certificate of Incorporation of the Company (incorporated herein by
reference to Exhibit 3.1 to Company's quarterly report on Form 10-Q for
the quarter ended December 31, 1996).
3.2 Amendment to Certificate of Incorporation of the Company filed December
17, 1997.*
3.3 Bylaws of the Company (incorporated herein by reference to Exhibit 3.2
to Company's Registration Statement on Form 8-B (No. 001-137260)).
4.1 Indenture dated as of March 15, 1997 among the Registrant, as issuer,
Chesapeake Operating, Inc., Chesapeake Gas Development Corporation and
Chesapeake Exploration Limited Partnership, as Subsidiary Guarantors,
and United States Trust Company of New York, as Trustee, with respect
to 7 7/8% Senior Notes due 2004. Incorporated herein by reference to
Exhibit No. 4.1 to Registrant's Registration Statement on Form S-4 (No.
333-24995).
4.2 Indenture dated as of March 15, 1997 among the Registrant, as issuer,
Chesapeake Operating, Inc., Chesapeake Gas Development Corporation and
Chesapeake Exploration Limited Partnership, as Subsidiary Guarantors,
and United States Trust Company of New York, as Trustee, with respect
to 8 1/2% Senior Notes due 2012. Incorporated herein by reference to
Exhibit No. 4.3 to Registrant's Registration Statement on Form S-4 (No.
333-24995).
4.3 Indenture dated as of May 15, 1995 among Chesapeake Energy
Corporation, its subsidiaries signatory thereto as Subsidiary
Guarantors and United States Trust Company of New York, as Trustee.
Incorporated herein by reference to Exhibit No. 4.3 to Registrant's
Registration Statement on Form S-4 (No. 33-93718).
4.4 Indenture dated as of April 1, 1996 among Chesapeake Energy
Corporation, its subsidiaries signatory thereto as Subsidiary
Guarantors and United States Trust Company of New York, as Trustee.
Incorporated herein by reference to Exhibit No. 4.6 to Registrant's
Registration Statement on Form S-3 (No. 333-1588).
4.5 Stock Registration Agreement dated May 21, 1992 between Chesapeake
Energy Corporation and various lenders, as amended by First Amendment
thereto dated May 26, 1992. Incorporated herein by reference to
Exhibits 10.26.1 and 10.26.2 to Registrant's Registration Statement on
Form S-1 (No. 33-55600).
5.1 Opinion of Andrews & Kurth L.L.P. regarding the legality of the
securities to be registered.*
23.1 Consent of Andrews & Kurth L.L.P. (included in the opinion filed as
Exhibit 5.1 hereto).
23.2 Consent of Coopers & Lybrand L.L.P.*
23.3 Consent of Price Waterhouse LLP.*
23.4 Consent of Williamson Petroleum Consultants, Inc.*
24.1 Power of Attorney (included in the signature pages of the Registration
Statement on Form S-4).
99.1 Hugoton Energy Corporation 1993 Stock Option Plan.*
99.2 Hugoton Energy Corporation Amended and Restated 1993 Nonemployee
Directors' Stock Option Plan.*
99.3 W. Mark Womble Incentive Stock Option Agreement.*
99.4 John T. McNabb, II Nonstatutory Stock Option Agreement.*
99.5 David S. Elkouri Nonstatutory Stock Option Agreement.*
99.6 Hugoton Energy Corporation Amended and Restated 1995 Stock Option
Plan.*
- -------------------------
* Filed herewith
</TABLE>
<PAGE> 1
EXHIBIT 3.2
AMENDMENT TO
CERTIFICATE OF INCORPORATION
OF
CHESAPEAKE ENERGY CORPORATION
(After Receipt of Payment for Stock)
The undersigned, Aubrey K. McClendon, as Chairman of the Board
and Chief Executive Officer, and Janice A. Dobbs, as Secretary of Chesapeake
Energy Corporation, a corporation organized and existing under the laws of the
State of Oklahoma (the "Corporation"), hereby certify as follows:
A. The name of the Corporation is Chesapeake Energy Corporation.
B. The name under which the Corporation was originally incorporated is
Chesapeake Oklahoma Corporation. The original Certificate of
Incorporation of the Corporation was filed with the Secretary of State
of Oklahoma on November 19, 1996, as amended by that certain
Certificate of Ownership and Merger Merging Chesapeake Energy
Corporation into Chesapeake Oklahoma Corporation filed with the
Secretary of State of Oklahoma on December 23, 1996, effective
December 31, 1996 (the "Certificate of Incorporation").
C. This Amendment to Certificate of Incorporation was duly adopted in
accordance with the provisions of Section 1077 of the General
Corporation Act of Oklahoma (the "Act") at the Corporation's annual
meeting by a majority of the outstanding capital stock of the
Corporation entitled to vote thereon. Written notice of the
Corporation's annual meeting was given to the stockholders of the
Corporation in accordance with the provisions of Section 1067 of the
Act.
D. The Certificate of Incorporation is hereby amended as follows:
1. Amendment to Article IV. The first sentence of Article IV of the
Certificate of Incorporation starting with the words "The total number of
shares of capital stock . . . " is hereby deleted in its entirety and the
following sentence is substituted therefor:
The total number of shares of capital stock which the
Corporation shall have authority to issue is Two Hundred Sixty
Million (260,000,000) shares, consisting of Ten Million
(10,000,000) shares of Preferred Stock, par value $0.01 per
share, and Two Hundred Fifty Million (250,000,000) shares of
Common Stock, par value $0.01 per share.
<PAGE> 2
IN WITNESS WHEREOF, this Amendment to Certificate of
Incorporation was duly adopted by the board of directors and the stockholders
of the Corporation in accordance with Section 1077 of the Act and executed this
9th day of December, 1997, by Aubrey K. McClendon, as Chairman of the Board and
Chief Executive Officer, and attested by Janice A. Dobbs, as Secretary.
/s/ Aubrey K. McClendon
----------------------------------------------
Aubrey K. McClendon, Chairman of the Board and
Chief Executive Officer
Attest:
/s/ Janice A. Dobbs
- ---------------------------------
Janice A. Dobbs, Secretary
<PAGE> 1
[ANDREWS & KURTH LETTERHEAD]
EXHIBIT 5.1
March 24, 1998
Board of Directors
Chesapeake Energy Corporation
6100 North Western Avenue
Oklahoma City, Oklahoma 73118
Gentlemen:
We have acted as special counsel to Chesapeake Energy
Corporation, an Oklahoma corporation ("Chesapeake"), in connection with the
Post-Effective Amendment No. 1 on Form S-8 to the Registration Statement on
Form S-4 (File No. 333-46129) relating to the registration under the Securities
Act of 1933, as amended, of the issuance by Chesapeake of up to 1,159,768
shares (the "Shares") of common stock, par value $0.01 per share, of Chesapeake
(the "Common Stock") pursuant to the Replacement Option Agreements (as defined
below). The Shares are to be issued to former holders of Common Stock of
Hugoton Energy Corporation, a Kansas corporation ("Hugoton"), in connection
with the merger of Chesapeake Acquisition Corp., a Kansas corporation and an
indirect wholly owned subsidiary of Chesapeake ("Merger Sub"), with and into
Hugoton with Hugoton as the surviving corporation (the "Merger"). Pursuant to
the Merger, all options ("Hugoton Options") issued and outstanding under the
employee benefit plans of Hugoton, which became a wholly owned subsidiary of
the Registrant, became immediately vested and exercisable and were assumed by
Chesapeake pursuant to the replacement options agreements (the "Replacement
Option Agreements") and the right to receive one share of common stock of
Hugoton upon exercise of the Hugoton Options was converted into the right to
receive 1.3 shares of Common Stock of Chesapeake.
As the basis for the opinion hereinafter expressed, we have
examined such statutes, regulations, corporate records and documents,
certificates of corporate and public officials and other instruments as we have
deemed necessary or advisable for the purposes of this opinion. In such
examination, we have assumed the authenticity of all documents submitted to us
as originals and the conformity with the original documents of all documents
submitted to us as copies.
Based on the foregoing and on such legal considerations as we
deem relevant, we are of the opinion that the Shares have been validly
authorized, and that such Shares will, when issued and delivered in accordance
with the terms of the Replacement Option Agreements, will be validly issued,
fully paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ ANDREWS & KURTH L.L.P.
1210/2397/2677
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this post-effective amendment
No. 1 on Form S-8 to the registration statement on Form S-4 (File
No. 333-46129) of our report dated September 30, 1997, on our audits of
the consolidated financial statements of Chesapeake Energy Corporation as
of June 30, 1997 and 1996 and for the years then ended. We also consent to the
references to our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Oklahoma City, Oklahoma
March 24, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this post-effective amendment
No. 1 on Form S-8 to the registration statement on Form S-4 of our report dated
September 20, 1995, except for the third paragraph of Note 9 which is as of
October 9, 1997, appearing on Page 26 of Chesapeake Energy Corporation's Annual
Report on Form 10-K/A for the year ended June 30, 1997, on our audit of the
consolidated financial statements of Chesapeake Energy Corporation for the year
ended June 30, 1995.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Houston, Texas
March 24, 1998
<PAGE> 1
EXHIBIT 23.4
[WILLIAMSON PETROLEUM CONSULTANTS, INC. LETTERHEAD]
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
As independent petroleum engineers, Williamson Petroleum Consultants, Inc.
hereby consents to the incorporation by reference in this Post-Effective
Amendment No. 1 on Form S-8 to the registration statement on Form S-4 of
Chesapeake Energy Corporation (the Company) of our report entitled "Evaluation
of Oil and Gas Reserves to the Interests of Chesapeake Energy Corporation in
Certain Properties in Louisiana and Texas, Effective December 31, 1997, for
Disclosure to the Securities and Exchange Commission, Williamson Project
7.8569" dated March 12, 1998 and to all references to our firm included in or
made a part of the Company Prospectus dated February 17, 1998 relating to its
common stock, which Prospectus was filed pursuant to Rule 424(b) under the
Securities Act of 1933, as amended, and formed a part of the Company
registration statement on Form S-4 (No. 333-46129) under the Act. This
registration statement on Form S-8 is to be filed with the Securities and
Exchange Commission on or about March 24, 1998.
/s/ WILLIAMSON PETROLEUM CONSULTANTS, INC.
WILLIAMSON PETROLEUM CONSULTANTS, INC.
Houston, Texas
March 24, 1998
<PAGE> 1
EXHIBIT 99.1
HUGOTON ENERGY CORPORATION
1993 STOCK OPTION PLAN
I. PURPOSE OF PLAN
The HUGOTON ENERGY CORPORATION 1993 STOCK OPTION PLAN (the "Plan") intended
to provide a means whereby certain employees of HUGOTON ENERGY CORPORATION, a
Kansas corporation (the "Company"), and its subsidiary may develop a sense of
proprietorship and personal involvement in the development and financial success
of the Company, and to encourage them to remain with and devote their best
efforts to the business of the Company, thereby advancing the interests of the
Company and its stockholders. Accordingly, the Company may grant to certain
employees ("OPTIONEES") the option ("OPTION") to purchase shares of the common
stock of the Company ("STOCK"), as hereinafter set forth. Options granted under
the Plan may be either incentive stock options, within the meaning of section
422(b) of the Internal Revenue Code, as amended (the "CODE"), ("INCENTIVE STOCK
OPTIONS") or options which do not constitute Incentive Stock Options.
II. ADMINISTRATION
The Plan shall be administered by the Compensation Committee (the
"COMMITTEE") of the Board of Directors of the Company (the "BOARD"), and the
Committee shall, be (a) comprised solely of two or more outside directors
(within the meaning of section 162(m) of the Code and applicable interpretive
authority thereunder), and (b) constituted so as to permit the Plan to comply
with Rule 16b-3, as currently in effect or as hereinafter modified or amended
("RULE 16B-3"), promulgated under the Securities Exchange Act of 1934, as
amended (the "1934 ACT"). The Committee shall have sole authority to select the
Optionees from among those individuals eligible hereunder and to establish the
number of shares which may be issued under each Option. In making such
determination, the Committee may take into account the nature of the services
rendered by such individuals, their present and potential contributions to the
Company's success and such other factors as the Committee in its discretion
shall deem relevant. The Committee is authorized to interpret the Plan and may
from time to time adopt such rules and regulations, consistent with the
provisions of the Plan, as it may deem advisable to carry out the Plan. All
decisions made by the Committee in selecting the Optionees, in establishing the
number of shares which may be issued under each Option and in construing the
provisions of the Plan shall be final.
II. OPTION AGREEMENTS
(a) Each Option shall be evidenced by a written agreement between the
Company and
<PAGE> 2
the Optionee ("OPTION AGREEMENT") which shall contain such terms and conditions
as may be approved by the Committee. The terms and conditions of the respective
Option Agreements need not be identical. Specifically, an Option Agreement may
provide for the surrender of the right to purchase shares under the Option in
return for a payment in cash or shares of Stock or a combination of cash and
shares of Stock equal in value to the excess of the fair market value of the
shares with respect to which the right to purchase is surrendered over the
option price therefor ("STOCK APPRECIATION RIGHTS"), on such terms and
conditions as the Committee in its sole discretion may prescribe; provided, that
with respect to Stock Appreciation Rights granted to employees who are subject
to Section 16 of the 1934 Act, except as provided in Subparagraph VII(c) hereof,
the Committee shall retain final authority (i) to determine whether an Optionee
shall be permitted, or (ii) to approve an election by an Optionee, to receive
cash in full or partial settlement of Stock Appreciation Rights. Moreover, an
Option Agreement may provide for the payment of the option price, in whole or in
part, by the delivery of a number of shares of Stock (plus cash if necessary)
having a fair market value equal to such option price.
(b) For all purposes under the Plan, the fair market value of a share of
Stock on a particular date shall be equal to the mean of the reported high and
low sales price of the Stock (i) reported by the National Market System or
NASDAQ on that date or (ii) if the Stock is listed on a national stock exchange,
reported on the stock exchange composite tape on that date; or, in either case,
if no prices are reported on that date, on the last preceding date on which such
prices of the Stock are so reported. If the Stock is traded over the counter at
the time a determination of its fair market value is required to made hereunder,
its fair market value shall be deemed to be equal to the average between the
reported high and low or closing bid and asked prices of Stock on the most
recent date on which Stock was publicly traded. Notwithstanding the foregoing,
the fair market value of the Stock for Options granted effective as of the date
of the Company's initial public sale of shares of Stock shall be the initial
offering price under the Company's registration statement relating to such
initial public sale. In the event Stock is not publicly traded at the time a
determination of its value is required to be made hereunder, the determination
of its fair market value shall be made by the Committee in such manner as it
deems appropriate.
(c) Each Option and all rights granted thereunder shall not be transferable
other than by will or the laws of descent and distribution, and shall be
exercisable during the Optionee's lifetime only by the Optionee or the
Optionee's guardian or legal representative.
IV. ELIGIBILITY OF OPTIONEE
Options may be granted only to individuals who are employees (including
officers and directors who are also employees) of the Company or any parent
subsidiary corporation (as defined in section 424 of the Code) of the Company at
the time the Option is granted; provided, however, that members of the Committee
shall not be eligible to be granted Options. Options may be granted to the same
individual on more than one occasion. No Incentive Stock Option shall be granted
to an individual if, at the time the Option is granted, such individual owns
stock
-2-
<PAGE> 3
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or its parent or subsidiary corporation, within the meaning
of section 422(b) of the Code, unless (i) at the time such Option is granted the
option price is 110% of the fair market value of the Stock subject to the Option
and (ii) such Option by its terms is not exercisable after the expiration of
five years from the date of grant. To the extent that the aggregate fair market
value (determined at the time the respective Incentive Stock Option is granted)
of stock with respect to which Incentive Stock Options are exercisable for the
first time by an individual during any calendar year under all incentive stock
option plans of the Company and its parent and subsidiary corporations exceeds
$100,000, such excess Incentive Stock Options shall be treated as Options which
do not constitute Incentive Stock Options. The Committee shall determine, in
accordance with applicable provisions of the Code, Treasury Regulations and
other administrative pronouncements, which of an Optionee's Incentive Stock
Options will not constitute Incentive Stock Options because of such limitation
and shall notify the Optionee of such determination as soon as practicable after
such determination.
V. SHARES SUBJECT TO PLAN
The aggregate number of shares which may be issued under Options granted
under the Plan shall not exceed 600,000 shares of Stock. Such shares may consist
of authorized but unissued shares of Stock or previously issued shares of Stock
reacquired by the Company. Any of such shares which remain unissued and which
are not subject to outstanding Options at the termination of the Plan shall
cease to be subject to the Plan, but, until termination of the Plan, the Company
shall at all times make available a sufficient number of shares to meet the
requirements of the Plan. Should any Option hereunder expire or terminate prior
to its exercise in full, the shares theretofore subject to such Option may again
be subject to an Option granted under the Plan to the extent permitted under
Rule l6b-3. The aggregate number of shares which may be issued under the Plan
shall be subject to adjustment in the same manner as provided in Paragraph VIII
hereof with respect to shares of Stock subject to Options then outstanding.
Exercise of an Option in any manner, including an exercise involving a Stock
Appreciation Right, shall result in a decrease in the number of shares of Stock
which may thereafter be available, both for purposes of the Plan and for sale to
any one individual, by the number of shares as to which the Option is exercised.
Separate stock certificates shall be issued by the Company for those shares
acquired pursuant to the exercise of any Option which does not constitute an
Incentive Stock Option.
IV. OPTION PRICE
The purchase price of Stock issued under each Option shall be equal to the
fair market value of Stock subject to the Option on the date the Option is
granted; provided, however, that this limitation shall not apply to (a)
Incentive Stock Options for which a greater purchase price is required pursuant
to Paragraph IV hereof, and (b) the Options granted under the Plan that are
described in that certain Agreement Regarding Options dated _____________, 1993
by and
-3-
<PAGE> 4
between the Company and Floyd C. Wilson (which Options shall have the purchase
price therein provided).
VII. TERM OF PLAN
The Plan shall be effective upon the date of its adoption by the Board,
provided the Plan is approved by the stockholders of the Company within twelve
months thereafter. Notwithstanding any provision in this Plan or in any Option
Agreement, no Option shall be exercisable prior to such stockholder approval.
Except with respect to Options then outstanding if not sooner terminated under
the provisions of Paragraph IX, the Plan shall terminate upon and no further
Options shall be granted after the expiration of ten years from the date of its
adoption by the Board.
VIII. RECAPITALIZATION OR REORGANIZATION
(a) The existence of the Plan and the Options granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities, the
dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.
(b) The shares with respect to which Options may be granted are shares of
Stock as presently constituted, but if, and whenever, prior to the expiration of
an Option theretofore granted, the Company shall effect a subdivision or
consolidation of shares of Stock or the payment of a stock dividend on Stock
without receipt of consideration by the Company, the number of shares of Stock
with respect to which such Option may thereafter be exercised (i) in the event
of an increase in the number of outstanding shares shall be proportionately
increased, and the purchase price per share shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares shall
be proportionately reduced, and the purchase price per share shall be
proportionately increased.
(c) If the Company recapitalizes or otherwise changes its capital
structure. thereafter upon any exercise of an Option theretofore granted the
Optionee shall be entitled to purchase under such Option, in lieu of the number
and class of shares of Stock then covered by such Option, the number and class
of shares of stock and securities to which the Optionee would have been entitled
pursuant to the terms of the recapitalization if, immediately prior to such
recapitalization, the Optionee had been the holder of record of the number of
shares of Stock then covered by the such Option. If (i) the Company shall not be
the surviving entity in any merger, consolidation or other reorganization (or
survives only as a subsidiary of an entity other than a
-4-
<PAGE> 5
previously wholly-owned subsidiary of the Company), (ii) the Company sells,
leases or exchanges substantially all of its assets to any other person or
entity (other than a wholly-owned subsidiary of the Company), (iii) the Company
is to be dissolved and liquidated, (iv) any person or entity, including a
"group" as contemplated by Section 13(d)(3) of the 1934 Act acquires or gains
ownership or control (including, without limitation, power to vote) of more than
50% of the outstanding shares of the Company's voting stock (based upon voting
power), or (v) as a result of or in connection with a contested election of
directors, the persons who were directors of the Company before such election
shall cease to constitute a majority of the Board (each such event is referred
to herein as a "Corporate Change"), no later than (a) ten days after the
approval by the stockholders of the Company of such merger, consolidation,
reorganization, sale, lease or exchange of assets or dissolution or such
election of directors or (b) thirty days after a change of control of the type
described in Clause (iv), the Committee, acting in its sole discretion without
the consent or approval of any Optionee, shall act to effect one or more of the
following alternatives, which may vary among individual Optionees and which may
vary among Options held by any individual Optionee: (1) accelerate the time at
which Options then outstanding may be exercised so that such Options may be
exercised in full for a limited period of time on or before a specified date
(before or after such Corporate Change) fixed by the Committee, after which
specified date all unexercised Options and all rights of Optionees thereunder
shall terminate, (2) require that mandatory surrender to the Company by selected
Optionees of some or all of the outstanding Options held by such Optionees
(irrespective of whether such Options are then exercisable under the provisions
of the Plan) as of a date, before or after such Corporate Change, specified by
the Committee, in which event the Committee shall thereupon cancel such Options
and the Company shall pay to each Optionee an amount of cash per share equal to
the excess, if any, of the amount calculated in Subparagraph (d) below (the
"Change of Control Value") of the shares subject to such Option over the
exercise price(s) under such Options for such shares, (3) make such adjustments
to Options then outstanding as the Committee deems appropriate to reflect such
Corporate Change (provided, however, that the Committee may determine in its
sole discretion that no adjustment is necessary to Options then outstanding) or
(4) provide that thereafter upon any exercise of an Option theretofore granted
the Optionee shall be entitled to purchase under such Option, in lieu of the
number of shares of Stock then covered by such Option the number and class of
shares of stock or other securities or property (including, without limitation,
cash) to which the Optionee would have been entitled pursuant to the terms of
the agreement of merger, consolidation or sale of assets and dissolution if,
immediately prior to such merger, consolidation or sale of assets and
dissolution the Optionee had been the holder of record of the number of shares
of Stock then covered by such Option.
(d) For the purposes of clause (2) in Subparagraph (c) above, the "Change
of Control Value" shall equal the amount determined in clause (i), (ii) or
(iii), whichever is applicable, as follows: (i) the per share price offered to
stockholders of the Company in any such merger, consolidation, reorganization,
sale of assets or dissolution transaction, (ii) the price per share offered to
stockholders of the Company in any tender offer or exchange offer whereby a
Corporate Change takes place, or (iii) if such Corporate Change occurs other
than pursuant to a tender or exchange offer, the fair market value per share of
the shares into which such Options
-5-
<PAGE> 6
being surrendered are exercisable, as determined by the Committee as of the date
determined by the Committee to be the date of cancellation and surrender of such
Options. In the event that the consideration offered to stockholders of the
Company in any transaction described in this Subparagraph (d) or Subparagraph
(c) above consists of anything other than cash, the Committee shall determine
the fair cash equivalent of the portion of the consideration offered which is
other than cash.
(e) Any adjustment provided for in Subparagraph (b) or (c) above shall be
subject to any required stockholder action.
(f) Except as hereinbefore expressly provided, the issuance by the Company
of shares of stock of any class or securities convertible into shares of stock
of any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason therefor shall be made with respect to, the number of
shares of Stock subject to Options theretofore granted or the purchase price per
share.
IX. AMENDMENT OR TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with respect
to any shares for which Options have not theretofore been granted. The Board
shall have the right to alter or amend the Plan or any part thereof from time to
time; provided, that no change in any Option theretofore granted may be made
which would impair the rights of the Optionee without the consent of such
Optionee (unless such change is required in order to cause the benefits under
the Plan to qualify as performance-based compensation within the meaning of
section 162(m) of the Code and applicable interpretive authority thereunder),
and provided, further, that (i) the Board may not make any alteration or
amendment which would decrease any authority granted to the Committee hereunder
in contravention of Rule l6b-3 ) and (ii) the Board may not make any alteration
or amendment which would materials increase the benefits accruing to
participants under the Plan, increase the aggregate number of shares which may
be issued pursuant to the provisions of the Plan, change the class of
individuals eligible to receive Options under the Plan or extend the term of the
Plan, without the approval of the stockholders of the Company.
X. SECURITIES LAWS
(a) The Company shall not be obligated to issue any Stock pursuant to any
Option granted under the Plan at any time when the offering of the shares
covered by such Option have not been registered under the Securities Act of 1933
and such other state and federal laws, rules or regulations as the Company or
the Committee deems applicable and, in the opinion of legal counsel for the
Company, there is no exemption from the registration requirements of such laws,
-6-
<PAGE> 7
rules or regulations available for the offering and sale of such shares.
(b) It is intended that the Plan and any grant of an Option may make to
a person subject to Section 16 of the 1934 Act meet all of the requirements of
Rule 16b-3. If any provision of the Plan or any such Option would disqualify the
Plan or such Option under, or would otherwise not comply with, Rule 16b-3, such
provision or Option shall be construed or deemed amended to conform to Rule
16b-3.
-7-
<PAGE> 1
EXHIBIT 99.2
HUGOTON ENERGY CORPORATION
AMENDED AND RESTATED 1993 NONEMPLOYEE
DIRECTORS' STOCK OPTION PLAN
On November 23, 1993, the HUGOTON ENERGY CORPORATION 1993 NONEMPLOYEE
DIRECTORS' STOCK OPTION PLAN (the "ORIGINAL PLAN") was adopted. The Original
Plan is hereby amended and restated in its entirety.
I. PURPOSE OF THE PLAN
The HUGOTON ENERGY CORPORATION AMENDED AND RESTATED 1993 NONEMPLOYEE
DIRECTORS' STOCK OPTION PLAN (the "PLAN") is intended to promote the interests
of HUGHTON ENERGY CORPORATION, a Kansas corporation (the "COMPANY"), and its
stockholders by helping to award and retain highly-qualified independent
directors, and allowing them to develop a sense of proprietorship and personal
involvement in the development and financial success of the Company.
Accordingly, the Company shall grant to directors of the Company who are not
employees or officers of the Company or any of its subsidiaries ("NONEMPLOYEE
DIRECTORS") the option ("OPTION") to purchase shares of the common stock of the
Company ("STOCK"), as hereinafter set forth. Options granted under the Plan
shall be options which do not constitute incentive stock options, within the
meaning of section 422(b) of the Internal Revenue Code of 1986, as amended.
II. OPTION AGREEMENTS
Each Option shall be evidenced by a written agreement in the form attached
to the Plan.
III. ELIGIBILITY OF OPTIONEE
Options may be granted only to individuals who are Nonemployee Directors of
the Company. Each Nonemployee Director as of January 1, 1996, shall receive, as
of such date and without the exercise of the discretion of any person or
persons, an Option exercisable for 10,000 shares of Stock. An Option for 5,000
shares of Stock (subject to adjustment in the same manner as provided in
Paragraph VII hereof with respect to shares of Stock subject to Options then
outstanding) will automatically be granted on each successive January 1 to each
Nonemployee Director who serves in such capacity or is elected to the Board of
Directors on the applicable date of grant. If, as of any date that the Plan is
in effect, there are not sufficient shares of Stock available under the Plan to
allow for the grant to each Nonemployee Director of an Option for the number of
shares provided herein, each Nonemployee Director shall receive an Option for
his or her pro rata share of the total number of shares of Stock then available
under the Plan. All Options granted under the Plan shall be at the Option price
set forth in Paragraph V hereof and shall be subject to adjustment as provided
in Paragraph VII hereof.
<PAGE> 2
IV. SHARES SUBJECT TO PLAN
The aggregate number of shares which may be issued under Options granted
under the Plan shall not exceed 150,000 shares of Stock. Such shares may consist
of authorized but unissued shares of Stock or previously issued shares of Stock
reacquired by the Company. Any of such shares which remain unissued and which
are not subject to outstanding Options at the termination of the Plan shall
cease to be subject to the Plan, but, until termination of the Plan, the Company
shall at all times make available a sufficient number of shares to meet the
requirements of the Plan. Should any Option hereunder expire or terminate prior
to its exercise in full, the shares theretofore subject to such Option may again
be subject to an Option granted under the Plan. The aggregate number of shares
which may be issued under the Plan shall be subject to adjustment in the same
manner as provided in Paragraph VII hereof with respect to shares of Stock
subject to Options then outstanding. Exercise of an Option shall result in a
decrease in the number of shares of Stock which may thereafter be available,
both for purposes of the Plan and for sale to any one individual, by the number
of shares as to which the Option is exercised.
V. OPTION PRICE
The purchase price of Stock issued under each Option shall be the fair
market value of Stock subject to the Option as of the date the Option is
granted. For a purposes under the Plan, the fair market value of a share of
Stock on a particular date shall be equal to the mean of the reported high and
low sales prices of the Stock (i) reported by the National Market System of
NASDAQ on that date or (ii) if the Stock is listed on a national stock exchange,
reported on the stock exchange composite tape on that date; or, in either case,
if no prices are reported on that date, on the last preceding date on which such
prices of the Stock are so reported. If the Stock is traded over the counter at
the time a determination of its fair market value is required to be made
hereunder, its fair market value shall be deemed to be equal to the average
between the reported high and low or closing bid and asked prices of Stock on
the most recent date on which stock was publicly traded. In the event Stock is
not publicly traded at the time a determination of its value is required to be
made hereunder, the determination of its fair market value shall be made by the
Board in such manner as it deems appropriate.
VI. TERM OF PLAN
The Original Plan became effective on November 23, 1993. This restatement
shall be effective on the date the Plan is approved by the stockholders of the
Company. Notwithstanding any provision in this Plan or in any Option Agreement,
no Option granted after January 1, 1996 shall be exercisable prior to such
stockholder approval. If not sooner terminated under the provisions of Paragraph
VIII, the Plan shall be terminate upon and no further Options shall be granted
after the expiration of ten years from the adoption by the stockholders of this
Amended and Restated Plan.
-2-
<PAGE> 3
VII. RECAPITALIZATION OR REORGANIZATION
(a) The existence of the Plan and the Options granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities, the
dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.
(b) The shares with respect to which Options may be granted are shares of
Stock as presently constituted, but if, and whenever, prior to the expiration of
an Option theretofore granted, the Company shall effect a subdivision or
consolidation of shares of Stock or the payment of a stock dividend on Stock
without receipt of consideration by the Company, the number of shares of Stock
with respect to which such Option may thereafter be exercised (i) in the event
of an increase in the number of outstanding shares shall be proportionately
increased, and the purchase price per share shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares shall
be proportionately reduced, and the purchase price per share shall be
proportionately increased.
(c) If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise of an Option theretofore granted the
optionee shall be entitled to purchase under such Option, in lieu of the number
and class of shares of Stock then covered by such Option, the number and class
of shares of stock and securities to which the optionee would have been entitled
pursuant to the terms of the recapitalization if, immediately prior to such
recapitalization, the optionee had been the holder of record of the number of
shares of Stock then covered by such Option.
(d) Any adjustment provided for in Subparagraphs (b) or (c) above shall be
subject to any required stockholder action.
(e) Except as hereinbefore expressly provided, the issuance by the Company
of shares of stock of any class or securities convertible into shares of stock
of any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Stock subject to Options theretofore granted or the purchase price per
share.
VIII. AMENDMENT OR TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with respect
to any shares for which Options have not theretofore been granted. The Board
shall have the right to alter or amend the Plan or any part thereof from time to
time; provided, that no change in any Option theretofore
-3-
<PAGE> 4
granted may be made which would impair the rights of the optionee without the
consent of such optionee; and provided, further, that the Board may not make any
alteration or amendment which would materially increase the benefits accruing to
participants under the Plan, increase the aggregate number of shares which may
be issued pursuant to the provisions of the Plan, change the class of
individuals eligible to receive Options under the Plan or extend the term of the
Plan, without the approval of the stockholders of the Company.
IX. SECURITIES LAWS
(a) The Company shall not be obligated to issue any Stock pursuant to any
Option granted under the Plan at any time when the offering of the shares
covered by such Option have not been registered under the Securities Act of
1933, as amended, and such other state and federal laws, rules or regulations as
the Company deems applicable and, in the opinion of legal counsel for the
Company, there is no exemption from the registration requirements of such laws,
rules or regulations available for the offering and sale of such shares.
(b) It is intended that the Plan and any grant of an Option made to a
person subject to Section 16 of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), meet all of the requirements of Rule 16b-3, as currently in
effect or as hereinafter modified or amended ("Rule 16b-3"), promulgated under
the 1934 Act. If any provision of the Plan or any such Option would disqualify
the Plan or such option under, or would otherwise not comply with, Rule 16b-3,
such provision or Option shall be construed or deemed amended to conform to Rule
16b-3.
-4-
<PAGE> 1
EXHIBIT 99.3
INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT made this 23rd day of November, 1993, between HUGOTON
ENERGY CORPORATION, a Kansas corporation (the "Company"), and W. MARK WOMBLE
("Employee").
To carry out the purposes of the HUGOTON ENERGY CORPORATION
1993 STOCK OPTION PLAN (the "Plan"), by affording Employee the opportunity to
purchase shares of the common stock of the Company ("Stock"), and in
consideration of the mutual agreements and other matters set forth herein and
in the Plan, the Company and Employee hereby agree as follows:
1. Grant or Option. The Company hereby irrevocably grants to
Employee the right and option ("Option") to purchase all or any part of an
aggregate of 30,000 shares of Stock, on the terms and conditions set forth
herein and in the Plan, which Plan is incorporated herein by reference as a
part of this Agreement. Exercise of this Option is subject to, and contingent
upon, approval of the Plan by the stockholders of the Company on or before 12
months after the date the Plan was adopted by the Board of Directors of the
Company. This Option is intended to constitute an incentive stock option,
within the meaning of section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code").
2. Purchase Price. The purchase price of Stock purchased
pursuant to the exercise of this Option shall be $10.00 per share, which has
been determined to be the fair market value of the Stock at the date of grant
of this Option. For all purposes of this Agreement, fair market value of Stock
shall be determined in accordance with the provisions of the Plan.
3. Vesting and Exercise of Option. The Option granted hereunder
shall vest as follows:
(a) the option to purchase 25% of the shares covered
herein shall vest six (6) months after the initial
public offering of the Stock of the Company (the
"IPO");
(b) the option to purchase 25% of the shares covered
herein shall vest twelve (12) months after the IPO;
(c) the option to purchase 25% of the shares covered
herein shall vest twenty-four (24) months after the
IPO; and
(d) the option to purchase 25% of the shares covered
herein shall vest thirty-six (36) months after the
IPO.
Subject to the earlier expiration of this Option as herein
provided, this Option may be exercised by written notice to the Company at its
principal executive office addressed to the attention of its Chief Executive
Officer. The options granted hereunder must be exercised within eighteen (18)
months after the date they become vested or they will expire worthless, i.e.
options relating to the twenty-five percent (25%) of the shares that become
vested six (6) months after the IPO must be exercised within twenty-four (24)
months after the IPO.
<PAGE> 2
This Option is not transferable by Employee otherwise than by
will or the laws of descent and distribution. and may be exercised only by
Employee during Employee's lifetime. This option may be exercised only while
Employee remains an employee of the Company and will terminate and cease to be
exercisable upon Employee's termination of employment with the Company, except
that:
(a) If Employee's employment with the Company terminates
by reason of disability (within the meaning of section 22(c)(3) of the Code),
this Option may be exercised in full (whether or not the option is fully
vested) by Employee (or Employee's estate or the person who acquires this
Option by will or the laws of descent and distribution or otherwise by reason
of the death of Employee) at any time during the period of one year following
such termination.
(b) If Employee dies while in the employ of the Company,
Employee's estate, or the person who acquires this Option by will or the laws
of descent and distribution or otherwise by reason of the death of Employee,
may exercise this Option in full (whether or not the option is fully vested) at
any time during the period of one year following the date of Employee's death.
(c) If Employee's employment with the Company terminates
for any reason other than as described in (a) or (b) above, unless Employee
voluntarily terminates without the written consent of the Company or is
terminated for cause, this Option may be exercised by Employee at any time
during the period of three months following such termination, or by Employee's
estate (or the person who acquires this Option by will or the laws of descent
and distribution or otherwise by reason of the death of Employee) during a
period of one year following Employee's death if Employee dies during such
three-month period, but in each case only to the extent the Option was vested
and only as to the number of shares Employee was entitled to purchase hereunder
as of the date Employee's employment so terminates. For purposes of this
Agreement, "CAUSE" shall mean Employee's gross negligence or willful misconduct
in performance of the duties of his employment, or Employee's final conviction
of a felony or of a misdemeanor involving moral turpitude.
The purchase price of shares as to which this Option is
exercised shall be paid in full at the time of exercise (a) in cash (including
check, bank draft or money order payable to the order of the Company), or (b)
by delivering to the Company shares of Stock having a fair market value equal
to the purchase price, or (c) a combination of cash and Stock. No fraction of
a share of Stock shall be issued by the Company upon exercise of an Option or
accepted by the Company in payment of the exercise price thereof, rather,
Employee shall provide a cash payment for such amount as is necessary to effect
the issuance and acceptance of only whole shares of Stock. Unless and until a
certificate or certificates representing such shares shall have been issued by
the Company to Employee, Employee (or the person permitted to exercise this
Option in the event of Employee's death) shall not be or have any of the rights
or privileges of a stockholder of the Company with respect to shares acquirable
upon an exercise of this Option.
4. Withholding of Tax. To the extent that the exercise of this
Option or the disposition of shares of Stock acquired by exercise of this
Option results in compensation income to Employee
-2-
<PAGE> 3
for federal or state income tax purposes, Employee shall deliver to the Company
at the time of such exercise or disposition such amount of money or shares of
Stock as the Company may require to meet its obligation under applicable tax
laws or regulations, and, if Employee fails to do so, the Company is authorized
to withhold from any cash or Stock remuneration then or thereafter payable to
Employee any tax required to be withheld by reason of such resulting
compensation income. Upon an exercise of this Option, the Company is further
authorized in its discretion to satisfy any such withholding requirement out of
any cash or shares of Stock distributable to Employee upon such exercise.
5. Status of Stock. The Company intends to register for issuance
under the Securities Act of 1933, as amended (the "Act") the shares of Stock
acquirable upon exercise of this Option, and to keep such registration
effective throughout the period this Option is exercisable. In the absence of
such effective registration or an available exemption from registration under
the Act, issuance of shares of Stock acquirable upon exercise of this Option
will be delayed until registration of such shares is effective or an exemption
from registration under the Act is available. The Company intends to use its
best efforts to ensure that no such delay will occur. In the event exemption
from registration under the Act is available upon an exercise of this Option,
Employee (or the person permitted to exercise this Option in the event of
Employee's death or incapacity), if requested by the Company to do so, will
execute and deliver to the Company in writing an agreement containing such
provisions as the Company may require to assure compliance with applicable
securities laws.
Employee agrees that the shares of Stock which Employee may
acquire by exercising this Option will not be sold or otherwise disposed of in
any manner which would constitute a violation of any applicable securities
laws, whether federal or state. Employee also agrees (i) that the certificates
representing the shares of Stock purchased under this Option may bear such
legend or legends as the Committee deems appropriate in order to assure
compliance with applicable securities laws, and (ii) that the Company may
refuse to register the transfer of the shares of Stock purchased under this
Option on the stock transfer records of the Company if such proposed transfer
would in the opinion of counsel satisfactory to the Company constitute a
violation of any applicable securities laws and (iii) that the Company may give
related instructions to its transfer agent, if any, to stop registration of the
transfer of the shares of Stock purchased under this Option.
6. Employment Relationship. For purposes of this Agreement,
Employee shall be considered to be in the employment of the Company as long as
Employee remains an employee of either the Company, a parent or subsidiary
corporation (as defined in section 424 of the Code) of the Company, or a
corporation or a parent or subsidiary of such corporation assuming or
substituting a new option for this Option. Any question as to whether and when
there has been a termination of such employment, and the cause of such
termination, shall be determined by the Committee and its determination shall
be final.
7. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons lawfully
claiming under Employee.
-3-
<PAGE> 4
8. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Kansas.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed, by its officer thereunto duly authorized, and Employee has
executed this Agreement, all as of the day and year first above written.
HUGOTON ENERGY CORPORATION
By: /s/ FLOYD C. WILSON
-----------------------------------
Floyd C. Wilson
-----------------------------------
/s/ W. MARK WOMBLE
--------------------------------------
W. Mark Womble
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<PAGE> 1
EXHIBIT 99.4
NONSTATUTORY STOCK OPTION AGREEMENT
AGREEMENT made as of the 23rd day of November, 1993, between HUGOTON ENERGY
CORPORATION, a Kansas corporation (the "Company") and JOHN T. MCNABB, II
("Optionee")
In consideration of the services rendered by Optionee to the Company and
the mutual agreements and other matters set forth herein, the Company and
Optionee hereby agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants to Optionee the
right and option ("Option") to purchase all or any part of an aggregate of
50,000 shares of common stock of the Company ("Stock"), on the terms and
conditions set forth herein. This Option shall not be treated as an incentive
stock option within the meaning of section 422(b) of the Internal Revenue Code
of 1986, as amended.
2. PURCHASE PRICE. The purchase price of Stock purchased pursuant to the
exercise of this Option shall be $10.00 per share.
3. VESTING AND EXERCISE OF OPTION. This Option shall vest immediately, upon
the date of this Agreement. The Option may be exercised, by written notice to
the Company at its principal executive office addressed to the attention of its
Chief Executive Officer, as follows:
Optionee may exercise his option with regard to ten percent (10%) of the
shares subject to this Option nine (9) months after the initial public
offering of the Stock of the Company (the "IPO"); and thereafter the
Optionee may exercise ten percent (10%) per quarter beginning twelve months
after the IPO.
The options granted hereunder must be exercised within thirty-six (36)
months after they become exercisable, or they will expire worthless, i.e.
options relating to the ten percent (10%) of the shares that become exercisable
two (2) years after the IPO must be exercised within five (5) years from the
date of the IPO.
This Option is not transferable by Optionee otherwise than by will or the
laws of descent and distribution, and may be exercised only by Optionee during
Optionee's lifetime. This Option may be exercised whether or not Optionee
remains a member of the Board of Directors of the Company. If Optionee dies
while a member of the Board, Optionee's estate, or the person who acquires this
Option by will or the laws of descent and distribution or otherwise by reason of
the death of Optionee, may exercise this Option at any time during the period of
one (1) year following the date of Optionee's death.
The purchase price of shares as to which this Option is exercised shall be
paid in full at the time of exercise in cash (including check, bank draft or
money order payable to the order of the Company). No fraction of a share of
Stock shall be issued by the Company upon exercise of an
<PAGE> 2
Option; rather, Optionee shall provide a cash payment for such amount as is
necessary to effect the issuance of only whole shares of Stock. Unless and until
a certificate or certificates representing such shares shall have been issued by
the Company to Optionee, Optionee (or the person permitted to exercise this
Option in the event of Optionee's death) shall not be or have any of the rights
or privileges of a stockholder of the Company with respect to shares acquirable
upon an exercise of this Option.
4. RECAPITALIZATION. If, and whenever, prior to the expiration of this
Option, the Company shall effect a subdivision or consolidation of shares of
Stock or the payment of a stock dividend on Stock without receipt of
consideration by the Company, the number of shares of Stock with respect to
which this Option may thereafter be exercised (a) in the event of an increase in
the number of outstanding shares shall be proportionately increased, and the
purchase price per share shall be proportionately reduced and (b) in the event
of a reduction in the number of outstanding shares shall be proportionately
reduce and the purchase price per share shall be proportionately increased. If
the Company recapitalizes or otherwise changes its capital structure, thereafter
upon any exercise hereunder, Optionee shall be entitled to purchase, in lieu of
the number of shares of Stock as to which this Option shall then be exercisable,
the number and class of shares of stock and securities to which he would have
been entitled pursuant to the terms of the recapitalization if, immediately
prior to such recapitalization, he had been the holder of record of the number
of shares of Stock as to which this Option is then exercisable.
5. WITHHOLDING OF TAX. To the extent that the exercise of this Option or
the disposition of shares of Stock acquired by exercise of this Option results
in compensation income to Optionee for federal or state income tax purposes,
Optionee shall deliver to the Company at the time of such exercise or
disposition such amount of money or shares of Stock as the Company may require
to meet its obligation under applicable tax laws or regulations, and, if
Optionee fails to do so, the Company is authorized to withhold from any cash or
Stock remuneration then or thereafter payable to Optionee any tax required to be
withheld by reason of such resulting compensation income. Upon an exercise of
this Option, the Company is further authorized in its discretion to satisfy any
such withholding requirement out of any cash or shares of Stock distributable to
Optionee upon such exercise.
6. STATUS OF STOCK. The Company intends to register for issuance under the
Securities Act of 1933, as amended (the "Act") the shares of Stock acquirable
upon exercise of this Option, and to keep such registration effective throughout
the period this Option is exercisable. In the absence of such effective
registration or an available exemption from registration under the Act issuance
of shares of Stock acquirable upon exercise of this Option will be delayed until
registration of such shares is effective or an exemption from registration under
the Act is available. The Company intends to use its best efforts to ensure that
no such delay will occur. In the event exemption from registration under the Act
is available upon an exercise of this Option, Optionee (or the person permitted
to exercise this Option in the event of Optionee's death or incapacity), if
requested by the Company to do so, will execute and deliver to the Company in
writing an agreement containing such provisions as the Company may require to
assure compliance with applicable securities laws.
-2-
<PAGE> 3
Optionee agrees that the shares of Stock which Optionee may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable securities laws, whether
federal or state. Optionee also agrees (i) that the certificates representing
the shares of Stock purchased under this Option may bear such legend or legends
as the Company deems appropriate in order to assure compliance with applicable
securities laws, (ii) that the Company may refuse to register the transfer of
the shares of Stock purchased under this Option on the stock transfer records of
the Company if such proposed transfer would in the opinion of counsel
satisfactory to the Company constitute a violation of any applicable securities
law and (iii) that the Company may give related instructions to its transfer
agent, if any, to stop registration of the transfer of the shares of Stock
purchased under this Option.
7. WAIVER AND RELEASE. In consideration of the Company's grant to Optionee
of an option to purchase Stock as set forth in this Agreement Optionee hereby
waives and releases all rights, claims, charges, demands and causes of action
against (a) the Company, its subsidiaries and affiliates, and their respective
officers, directors, employees and agents, and (b) Floyd C. Wilson ("Wilson")
and his affiliates, successors and assigns, which relate to any prior agreement,
representation or commitment by any of the foregoing entities or individuals to
grant Optionee an option to purchase Stock.
8. AGREEMENT REGARDING OPTIONS. The parties agree that the Company's
obligation to transfer the shares subject to this Option Agreement is solely
dependent and contingent upon Wilson fulfilling his obligations under a certain
Agreement Regarding Options of even date herewith by and between the Company and
Floyd C. Wilson.
9. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under
Optionee.
10. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Kansas.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Optionee has executed
this Agreement all as of the day and year first above written.
HUGOTON ENERGY CORPORATION
By: /s/ FLOYD C. WILSON
--------------------------------------
Floyd C. Wilson
--------------------------------------
/s/ JOHN T. McNABB, II
-----------------------------------------
John T. McNabb, II
-4-
<PAGE> 1
EXHIBIT 99.5
NONSTATUTORY STOCK OPTION AGREEMENT
AGREEMENT made as of the 23rd day of November, 1993, between HUGOTON ENERGY
CORPORATION, a Kansas corporation (the "Company") and DAVID S. ELKOURI
("Optionee")
In consideration of the services rendered by Optionee to the Company and
the mutual agreements and other matters set forth herein, the Company and
Optionee hereby agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants to Optionee the
right and option ("Option") to purchase all or any part of an aggregate of
25,000 shares of common stock of the Company ("Stock"), on the terms and
conditions set forth herein. This Option shall not be treated as an incentive
stock option within the meaning of section 422(b) of the Internal Revenue Code
of 1986, as amended.
2. PURCHASE PRICE. The purchase price of Stock purchased pursuant to the
exercise of this Option shall be $10.00 per share.
3. VESTING AND EXERCISE OF OPTION. This Option shall vest immediately upon
the date of this Agreement. The Option may be exercised, by written notice to
the Company at its principal executive office addressed to the attention of its
Chief Executive Officer, as follows:
Optionee may exercise his option with regard to ten percent (10%) of the
shares subject to this Option nine (9) months after the initial public
offering of the Stock of the Company (the "IPO"); and thereafter the
Optionee may exercise ten percent (10%) per quarter beginning twelve months
after the IPO.
The options granted hereunder must be exercised within thirty-six (36)
months after they become exercisable, or they will expire worthless, i.e.
options relating to the ten percent (10%) of the shares that become exercisable
two (2) years after the IPO must be exercised within five (5) years from the
date of the IPO.
This Option is not transferable by Optionee otherwise than by will or the
laws of descent and distribution, and may be exercised only by Optionee during
Optionee's lifetime. This Option may be exercised whether or not Optionee
remains a member of the Board of Directors of the Company. If Optionee dies
while a member of the Board, Optionee's estate, or the person who acquires this
Option by will or the laws of descent and distribution or otherwise by reason of
the death of Optionee, may exercise this Option at any time during the period of
one (1) year following the date of Optionee's death.
The purchase price of shares as to which this Option is exercised shall be
paid in full at the time of exercise in cash (including check, bank draft or
money order payable to the order of the Company). No fraction of a share of
Stock shall be issued by the Company upon exercise of an
<PAGE> 2
Option; rather, Optionee shall provide a cash payment for such amount as is
necessary to effect the issuance of only whole shares of Stock. Unless and until
a certificate or certificates representing such shares shall have been issued by
the Company to Optionee, Optionee (or the person permitted to exercise this
Option in the event of Optionee's death) shall not be or have any of the rights
or privileges of a stockholder of the Company with respect to shares acquirable
upon an exercise of this Option.
4. RECAPITALIZATION. If, and whenever, prior to the expiration of this
Option, the Company shall effect a subdivision or consolidation of shares of
Stock or the payment of a stock dividend on Stock without receipt of
consideration by the Company, the number of shares of Stock with respect to
which this Option may thereafter be exercised (a) in the event of an increase in
the number of outstanding shares shall be proportionately increased, and the
purchase price per share shall be proportionately reduced and (b) in the event
of a reduction in the number of outstanding shares shall be proportionately
reduce and the purchase price per share shall be proportionately increased. If
the Company recapitalizes or otherwise changes its capital structure, thereafter
upon any exercise hereunder, Optionee shall be entitled to purchase, in lieu of
the number of shares of Stock as to which this Option shall then be exercisable,
the number and class of shares of stock and securities to which he would have
been entitled pursuant to the terms of the recapitalization if, immediately
prior to such recapitalization, he had been the holder of record of the number
of shares of Stock, as to which this Option is then exercisable.
5. WITHHOLDING OF TAX. To the extent that the exercise of this Option or
the disposition of shares of Stock acquired by exercise of this Option results
in compensation income to Optionee for federal or state income tax purposes,
Optionee shall deliver to the Company at the time of such exercise or
disposition such amount of money or shares of Stock as the Company may require
to meet its obligation under applicable tax laws or regulations, and, if
Optionee fails to do so, the Company is authorized to withhold from any cash or
Stock remuneration then or thereafter payable to Optionee any tax required to be
withheld by reason of such resulting compensation income. Upon an exercise of
this Option, the Company is further authorized in its discretion to satisfy any
such withholding requirement out of any cash or shares of Stock distributable to
Optionee upon such exercise.
6. STATUS OF STOCK. The Company intends to register for issuance under the
Securities Act of 1933, as amended (the "Act") the shares of Stock acquirable
upon exercise of this Option, and to keep such registration effective throughout
the period this Option is exercisable. In the absence of such effective
registration or an available exemption from registration under the Act issuance
of shares of Stock acquirable upon exercise of this Option will be delayed until
registration of such shares is effective or an exemption from registration under
the Act is available. The Company intends to use its best efforts to ensure that
no such delay will occur. In the event exemption from registration under the Act
is available upon an exercise of this Option, Optionee (or the person permitted
to exercise this Option in the event of Optionee's death or incapacity), if
requested by the Company to do so, will execute and deliver to the Company in
writing an agreement containing such provisions as the Company may require to
assure compliance with applicable securities laws.
-2-
<PAGE> 3
Optionee agrees that the shares of Stock which Optionee may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable securities laws, whether
federal or state. Optionee also agrees (i) that the certificates representing
the shares of Stock purchased under this Option may bear such legend or legends
as the Company deems appropriate in order to assure compliance with applicable
securities laws, (ii) that the Company may refuse to register the transfer of
the shares of Stock purchased under this Option on the stock transfer records of
the Company if such proposed transfer would in the opinion of counsel
satisfactory to the Company constitute a violation of any applicable securities
law and (iii) that the Company may give related instructions to its transfer
agent, if any, to stop registration of the transfer of the shares of Stock
purchased under this Option.
7. WAIVER AND RELEASE. In consideration of the Company's grant to Optionee
of an option to purchase Stock as set forth in this Agreement Optionee hereby
waives and releases all rights, claims, charges, demands and causes of action
against (a) the Company, its subsidiaries and affiliates, and their respective
officers, directors, employees and agents, and (b) Floyd C. Wilson ("Wilson")
and his affiliates, successors and assigns, which relate to any prior agreement,
representation or commitment by any of the foregoing entities or individuals to
grant Optionee an option to purchase Stock.
8. AGREEMENT REGARDING OPTIONS. The parties agree that the Company's
obligation to transfer the shares subject to this Option Agreement is solely
dependent and contingent upon Wilson fulfilling his obligations under a certain
Agreement Regarding Options of even date herewith by and between the Company and
Floyd C. Wilson.
9. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under
Optionee.
10. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Kansas.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Optionee has executed
this Agreement all as of the day and year first above written.
HUGOTON ENERGY CORPORATION
By: /s/ FLOYD C. WILSON
----------------------------------
Floyd C. Wilson
----------------------------------
/s/ DAVID S. ELKOURI
-------------------------------------
David S. Elkouri
-4-
<PAGE> 1
EXHIBIT 99.6
HUGOTON ENERGY CORPORATION
AMENDED AND RESTATED 1995 STOCK OPTION PLAN
On January 31, 1995, the HUGOTON ENERGY CORPORATION 1995 STOCK OPTION
PLAN (the "ORIGINAL PLAN") was adopted. Effective March 1997, the Original
Plan is amended and restated in its entirety.
I. PURPOSE OF PLAN
The HUGOTON ENERGY CORPORATION 1995 STOCK OPTION PLAN (the "PLAN") is
intended to provide a means whereby certain employees of HUGOTON ENERGY
CORPORATION, a Kansas corporation (the "COMPANY"), and its subsidiaries may
develop a sense of proprietorship and personal involvement in the development
and financial success of the Company, and to encourage them to remain with and
devote their best efforts to the business of the Company, thereby advancing the
interests of the Company and its stockholders. Accordingly, the Company may
grant to certain employees ("OPTIONEES") the option ("OPTION") to purchase
shares of the common stock of the Company ("STOCK"), as hereinafter set forth.
Options granted under the Plan may be either incentive stock options, within
the meaning of section 422(b) of the Internal Revenue Code, as amended (the
"CODE"), ("INCENTIVE STOCK OPTIONS") or options which do not constitute
Incentive Stock Options.
II. ADMINISTRATION
The Plan shall be administered by the Compensation Committee (the
"COMMITTEE") of the Board of Directors of the Company (the "BOARD"), and the
Committee shall be (a) comprised solely of two or more outside directors
(within the meaning of section 162(m) of the Code and applicable interpretive
authority thereunder), and (b) constituted so as to permit the Plan to comply
with Rule 16b-3, as currently in effect or as hereinafter modified or amended
("Rule 16b-3"), promulgated under the Securities Exchange Act of 1934, as
amended (the "1934 ACT"). The Committee shall have sole authority to select
the Optionees from among those individuals eligible hereunder and to establish
the number of shares which may be issued under each Option; provided, however,
that, notwithstanding any provision in the Plan to the contrary, the maximum
number of shares that may be subject to Options granted under the Plan to an
individual Optionee during any calendar year may not exceed 250,000 (subject to
adjustment in the same manner as provided in Paragraph VIII hereof with respect
to shares of Stock subject to Options then outstanding). The limitation set
forth in the preceding sentence shall be applied in a manner which will permit
compensation generated under the Plan to constitute "performance-based"
compensation for purposes of section 162(m) of the Code, including, without
limitation, counting against such maximum number of shares, to the extent
required under section 162(m) of the Code and applicable interpretive authority
thereunder, any shares subject to Options that are canceled or repriced. In
selecting the Optionees from among individuals eligible hereunder and in
establishing the number of shares that may be issued under each Option, the
Committee may take into account the nature of the services rendered by such
individuals, their present and potential contributions to the Company's success
and such other factors as the
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Committee in its discretion shall deem relevant. The Committee is authorized
to interpret the Plan and may from time to time adopt such rules and
regulations, consistent with the provisions of the Plan, as it may deem
advisable to carry out the Plan. All decisions made by the Committee in
selecting the Optionees, in establishing the number of shares which may be
issued under each Option and in construing the provisions of the Plan shall be
final.
III. OPTION AGREEMENTS
(a) Each Option shall be evidenced by a written agreement between
the Company and the Optionee ("OPTION AGREEMENT") which shall contain such
terms and conditions as may be approved by the Committee. The terms and
conditions of the respective Option Agreements need not be identical.
Specifically, an Option Agreement may provide for the surrender of the right to
purchase shares under the Option in return for a payment in cash or shares of
Stock or a combination of cash and shares of Stock equal in value to the excess
of the fair market value of the shares with respect to which the right to
purchase is surrendered over the option price therefor ("STOCK APPRECIATION
RIGHTS"), on such terms and conditions as the Committee in its sole discretion
may prescribe; provided, that with respect to Stock Appreciation Rights granted
to employees who are subject to Section 16 of the 1934 Act, except as provided
in Subparagraph VII(c) hereof, the Committee shall retain final authority (i)
to determine whether an Optionee shall be permitted, or (ii) to approve an
election by an Optionee, to receive cash in full or partial settlement of Stock
Appreciation Rights. Moreover, an Option Agreement may provide for the payment
of the option price, in whole or in part, by the delivery of a number of shares
of Stock (plus cash if necessary) having a fair market value equal to such
option price.
(b) For all purposes under the Plan, the fair market value of a
share of Stock on a particular date shall be equal to the mean of the reported
high and low sales price of the Stock (i) reported by the National Market
System or NASDAQ on that date or (ii) if the Stock is listed on a national
stock exchange, reported on the stock exchange composite tape on that date; or,
in either case, if no prices are reported on that date, on the last preceding
date on which such prices of the Stock are so reported. If the Stock is traded
over the counter at the time a determination of its fair market value is
required to made hereunder, its fair market value shall be deemed to be equal
to the average between the reported high and low or closing bid and asked
prices of Stock on the most recent date on which Stock was publicly traded. In
the event Stock. is not publicly traded at the time a determination of its
value is required to be made hereunder, the determination of its fair market
value shall be made by the Committee in such manner as it deems appropriate.
(c) Each Option and all rights granted thereunder shall not be
transferable other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder, and shall be exercisable during the Optionee's lifetime
only by the Optionee or the Optionee's guardian or legal representative.
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IV. ELIGIBILITY OF OPTIONEE
Options may be granted only to individuals who are employees
(including officers and directors who are also employees) of the Company or any
parent or subsidiary corporation (as defined in section 424 of the Code) of the
Company at the time the Option is granted; provided, however, that members of
the Committee shall not be eligible to be granted Options. Options may be
granted to the same individual on more than one occasion. No Incentive Stock
Option shall be granted to an individual if, at the time the Option is granted,
such individual owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or its parent or subsidiary
corporation, within the meaning of section 422(b) of the Code, unless (i) at
the time such Option is granted the option price is 110% of the fair market
value of the Stock subject to the Option and (ii) such Option by its terms is
not exercisable after the expiration of five years from the date of grant. To
the extent that the aggregate fair market value (determined at the time the
respective Incentive Stock Option is granted) of stock with respect to which
Incentive Stock Options are exercisable for the first time by an individual
during any calendar year under all incentive stock option plans of the Company
and its parent and subsidiary corporations exceeds $100,000, such excess
Incentive Stock Options shall be treated as Options which do not constitute
Incentive Stock Options. The Committee shall determine, in accordance with
applicable provisions of the Code, Treasury Regulations and other
administrative pronouncements, which of an Optionee's Incentive Stock Options
will not constitute Incentive Stock Options because of such limitation and
shall notify the Optionee of such determination as soon as practicable after
such determination.
V. SHARES SUBJECT TO PLAN
The aggregate number of shares which may be issued under Options
granted under the Plan shall not exceed 1,000,000 shares of Stock. Such shares
may consist of authorized but unissued shares of Stock or previously issued
shares of Stock reacquired by the Company. Any of such shares which remain
unissued and which are not subject to outstanding Options at the termination of
the Plan shall cease to be subject to the Plan, but, until termination of the
Plan, the Company shall at all times make available a sufficient number of
shares to meet the requirements of the Plan. Should any Option hereunder
expire or terminate prior to its exercise in full, the shares theretofore
subject to such Option may again be subject to an Option granted under the Plan
to the extent permitted under Rule 16b-3. The aggregate number of shares which
may be issued under the Plan shall be subject to adjustment in the same manner
as provided in Paragraph VIII hereof with respect to shares of Stock subject to
Options then outstanding. Exercise of an Option in any manner, including an
exercise involving a Stock Appreciation Right, shall result in a decrease in
the number of shares of Stock which may thereafter be available, both for
purposes of the Plan and for sale to any one individual, by the number of
shares as to which the Option is exercised. Separate stock certificates shall
be issued by the Company for those shares acquired pursuant to the exercise of
any Option which does not constitute an Incentive Stock Option.
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<PAGE> 4
VI. OPTION PRICE
The purchase price of Stock issued under each Option shall be equal to
the fair market value of Stock subject to the Option on the date the Option is
granted; provided, however, that this limitation shall not apply to Incentive
Stock Options for which a greater purchase price is required pursuant to
Paragraph IV hereof.
VII. TERM OF PLAN
The Plan shall be effective upon the date of its adoption by the
Board, provided the Plan is approved by the stockholders of the Company within
twelve months thereafter. Notwithstanding any provision in this Plan or in any
Option Agreement, no Option shall be exercisable prior to such stockholder
approval. Except with respect to Options then outstanding, if not sooner
terminated under the provisions of Paragraph IX, the Plan shall terminate upon
and no further Options shall be granted after March 31, 2007.
VIII. RECAPITALIZATION OR REORGANIZATION
(a) The existence of the Plan and the Options granted hereunder
shall not affect in any way the right or power of the Board or the stockholders
of the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, any merger or consolidation of the Company, any issue of debt or
equity securities, the dissolution or liquidation of the Company or any sale,
lease, exchange or other disposition of all or any part of its assets or
business or any other corporate act or proceeding.
(b) The shares with respect to which Options may be granted are
shares of Stock as presently constituted, but if, and whenever, prior to the
expiration of an Option theretofore granted, the Company shall effect a
subdivision or consolidation of shares of Stock or the payment of a stock
dividend on Stock without receipt of consideration by the Company, the number
of shares of Stock with respect to which such Option may thereafter be
exercised (i) in the event of an increase in the number of outstanding shares
shall be proportionately increased, and the purchase price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding shares shall be proportionately reduced, and the purchase price per
share shall be proportionately increased.
(c) If the Company recapitalizes, reclassifies its capital stock,
or otherwise changes its capital structure (a "recapitalization"), the number
and class of shares of Stock covered by an Option theretofore granted shall be
adjusted so that such Option shall thereafter cover the number and class of
shares of stock and securities to which the Optionee would have been entitled
pursuant to the terms of the recapitalization if, immediately prior to the
recapitalization, the Optionee had been the holder of record of the number of
shares of Stock then covered by such Option. If (i) the Company shall not be
the surviving entity in any merger, consolidation or other reorganization (or
survives only as a subsidiary of an entity other a previously wholly-owned
subsidiary of the Company), (ii)
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<PAGE> 5
the Company sells, leases or exchanges substantially all of its assets to any
other person or entity (other than a wholly-owned subsidiary of the Company),
(iii) the Company is to be dissolved and liquidated, (iv) any person or entity,
including a "group" as contemplated by Section 13(d)(3) of the 1934 Act
acquires or gains ownership or control (including, without limitation, power to
vote) of more than 50% of the outstanding shares of the Company's voting stock
(based upon voting power), or (v) as a result of or in connection with a
contested election of directors, the persons who were directors of the Company
before such election shall cease to constitute a majority of the Board (each
such event is referred to herein as a "Corporate Change"), no later than (a)
ten days after the approval by the stockholders of the Company of such merger,
consolidation, reorganization, sale, lease or exchange of assets or dissolution
or such election of directors or (b) thirty days after a change of control of
the type described in Clause (iv), the Committee, acting in its sole discretion
without the consent or approval of any Optionee, shall act to effect one or
more of the following alternatives, which may vary among individual Optionees
and which may vary among Options held by any individual Optionee: (1)
accelerate the time at which Options then outstanding may be exercised so that
such Options may be exercised in full for a limited period of time on or before
a specified date (before or after such Corporate Change) fixed by the
Committee, after which specified date all unexercised Options and all rights of
Optionees thereunder shall terminate, (2) require that mandatory surrender to
the Company by selected Optionees of some or all of the outstanding Options
held by such Optionees (irrespective of whether such Options are then
exercisable under the provisions of the Plan) as of a date, before or after
such Corporate Change, specified by the Committee, in which event the Committee
shall thereupon cancel such Options and the Company shall pay to each Optionee
an amount of cash per share equal to the excess, if any, of the amount
calculated in Subparagraph (d) below (the "Change of Control Value") of the
shares subject to such Option over the exercise price(s) under such Options for
such shares, (3) make such adjustments to Options then outstanding as the
Committee deems appropriate to reflect such Corporate Change (provided,
however, that the Committee may determine in its sole discretion that no
adjustment is necessary to Options then outstanding) or (4) provide that the
number and class of shares of Stock covered by an Option theretofore granted
shall be adjusted so that such Option shall thereafter cover the number and
class of shares of stock or other securities or property (including, without
limitation, cash) to which the Optionee would have been entitled pursuant to
the terms of the agreement of merger, consolidation or sale of assets and
dissolution if, immediately prior to such merger, consolidation or sale of
assets and dissolution the Optionee had been the holder of record of the number
of shares of Stock then covered by such Option.
(d) For the purposes of clause (2) in Subparagraph (c) above, the
"CHANGE OF CONTROL VALUE" shall equal the amount determined in clause (i), (ii)
or (iii), whichever is applicable, as follows: (i) the per share price offered
to stockholders of the Company in any such merger, consolidation,
reorganization, sale of assets or dissolution transaction, (ii) the price per
share offered to stockholders of the Company in any tender offer or exchange
offer whereby a Corporate Change takes place, or (iii) if such Corporate Change
occurs other than pursuant to a tender or exchange offer, the fair market value
per share of the shares into which such Options being surrendered are
exercisable, as determined by the Committee as of the date determined by the
Committee to be the date of cancellation and surrender of such Options. In the
event that the consideration offered to
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<PAGE> 6
stockholders of the Company in any transaction described in this Subparagraph
(d) or Subparagraph (c) above consists of anything other than cash, the
Committee shall determine the fair cash equivalent of the portion of the
consideration offered which is other than cash.
(e) Any adjustment provided for in Subparagraph (b) or (c) above
shall be subject to any required stockholder action.
(f) Except as hereinbefore expressly provided, the issuance by the
Company of shares of stock of any class or securities convertible into shares
of stock of any class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, and in any case whether or not for fair value, shall not
affect, and no adjustment by reason therefor shall be made with respect to, the
number of shares of Stock subject to Options theretofore granted or the
purchase price per share.
IX. AMENDMENT OR TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Options have not theretofore been granted. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time; provided, that no change in any Option theretofore granted may be
made which would impair the rights of the Optionee without the consent of such
Optionee (unless such change is required in order to cause the benefits under
the Plan to qualify as performance-based compensation within the meaning of
section 162(m) of the Code and applicable interpretive authority thereunder);
and provided, further, that (i) the Board may not make any alteration or
amendment which would decrease any authority granted to the Committee hereunder
in contravention of Rule 16b-3 and (ii) the Board may not make any alteration
or amendment which would materially increase the benefits accruing to
participants under the Plan, increase the aggregate number of shares which may
be issued pursuant to the provisions of the Plan, change the class of
individuals eligible to receive Options under the Plan or extend the term of
the Plan, without the approval of the stockholders of the Company.
X. SECURITIES LAWS
(a) The Company shall not be obligated to issue any Stock pursuant
to any Option granted under the Plan at any time when the offering of the
shares covered by such Option have not been registered under the Securities Act
of 1933 and such other state and federal laws, rules or regulations as the
Company or the Committee deems applicable and, in the opinion of legal counsel
for the Company, there is no exemption from the registration requirements of
such laws, rules or regulations available for the offering and sale of such
shares.
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(b) It is intended that the Plan and any grant of an Option made
to a person subject to Section 16 of the 1934 Act meet all of the requirements
of Rule 16b-3. If any provision of the Plan or any such Option would
disqualify the Plan or such Option under, or would otherwise not comply with,
Rule 16b-3, such provision or Option shall be construed or deemed amended to
conform to Rule 16b-3.
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