<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 2)
Under the Securities Exchange Act of 1934
CHESAPEAKE ENERGY CORPORATION
-----------------------------
(Name of Issuer)
Common Stock, par value $.01
----------------------------
(Title of Class of Securities)
165167 10 7
--------------
(CUSIP Number)
Shannon Self, Esquire
Self, Giddens & Lees, Inc.
2725 Oklahoma Tower
210 Park Avenue
Oklahoma City, Oklahoma 73102
(405) 232-3001
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 2, 1999
----------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
NOTE: Six (6) copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 12 Pages
<PAGE> 2
CUSIP NO. 16517 10 7
<TABLE>
<S> <C> <C>
(1) Names of Reporting Persons, S.S. or I.R.S. Identification Nos. Aubrey K. McClendon
of Above Persons ###-##-####
(2) Check the Appropriate Box if a Member of a Group (See (a) [x]
Instructions) (b) [ ]
(3) SEC Use Only
(4) Source of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant [ ]
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization USA
Number of Shares (7) Sole Voting Power 9,575,276
Beneficially (8) Shared Voting Power 508,560
Owned By Each (9) Sole Disposition 9,575,276
Reporting Person (10) Shared Dispositive Power 508,560
With:
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,083,836
(12) Check if the Aggregate Amount in Row (11) Excludes Certain [ ]
Shares (See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 10.62%
(14) Type of Reporting Person (See Instructions) IN
</TABLE>
Page 2 of 12 Pages
<PAGE> 3
CUSIP NO. 16517 10 7
<TABLE>
<S> <C> <C>
(1) Names of Reporting Persons, S.S. or I.R.S. Identification Nos. Chesapeake Investments, an
of Above Persons Oklahoma Limited Partnership
73-1132104
(2) Check the Appropriate Box if a Member of a Group (See (a) [x]
Instructions) (b) [ ]
(3) SEC Use Only
(4) Source of Funds (See Instructions) N/A
(5) Check if Disclosure of Legal Proceedings is Required Pursuant [ ]
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization Oklahoma
Number of Shares (7) Sole Voting Power 0
Beneficially (8) Shared Voting Power 508,560
Owned By Each (9) Sole Disposition 0
Reporting Person (10) Shared Dispositive Power 508,560
With:
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 508,560
(12) Check if the Aggregate Amount in Row (11) Excludes Certain [ ]
Shares (See Instructions)
(13) Percent of Class Represented by Amount in Row (11) .54%
(14) Type of Reporting Person (See Instructions) PN
</TABLE>
Page 3 of 12 Pages
<PAGE> 4
CUSIP NO. 16517 10 7
<TABLE>
<S> <C> <C>
(1) Names of Reporting Persons, S.S. or I.R.S. Identification Nos. Tom L. Ward
of Above Persons ###-##-####
(2) Check the Appropriate Box if a Member of a Group (See (a) [x]
Instructions) (b) [ ]
(3) SEC Use Only
(4) Source of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant [ ]
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization USA
Number of Shares (7) Sole Voting Power 9,519,192
Beneficially Owned (8) Shared Voting Power 1,846,860
By Each Reporting (9) Sole Disposition 9,519,192
Person With: (10) Shared Dispositive Power 1,846,860
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 11,366,052
(12) Check if the Aggregate Amount in Row (11) Excludes Certain [ ]
Shares (See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 11.97%
(14) Type of Reporting Person (See Instructions) IN
</TABLE>
Page 4 of 12 Pages
<PAGE> 5
CUSIP NO. 16517 10 7
<TABLE>
<S> <C> <C>
(1) Names of Reporting Persons, S.S. or I.R.S. Identification Nos. TLW Investments Inc.
of Above Persons 73-1215253
(2) Check the Appropriate Box if a Member of a Group (See (a) [x]
Instructions) (b) [ ]
(3) SEC Use Only
(4) Source of Funds (See Instructions) N/A
(5) Check if Disclosure of Legal Proceedings is Required Pursuant [ ]
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization Oklahoma
Number of Shares (7) Sole Voting Power 0
Beneficially Owned (8) Shared Voting Power 1,846,860
By Each Reporting (9) Sole Disposition 0
Person With: (10) Shared Dispositive Power 1,846,860
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 1,846,860
(12) Check if the Aggregate Amount in Row (11) Excludes Certain [ ]
Shares (See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 1.95%
(14) Type of Reporting Person (See Instructions) CO
</TABLE>
Page 5 of 12 Pages
<PAGE> 6
CUSIP NO. 16517 10 7
Preliminary Statement
This Amendment No. 2 to Schedule 13D amends and restates: (a) the Schedule 13D
dated February 4, 1993, and filed by the group consisting of Aubrey K. McClendon
and Chesapeake Investments, an Oklahoma Limited Partnership ("CI"); (b) the
Schedule 13D dated February 4, 1993, and filed by the group consisting of Tom L.
Ward and TLW Investments Inc. ("TLW"); and (c) Amendment No. 1 to Schedule 13D
filed on March 10, 1997, by the group consisting of Mr. McClendon and CI and the
group consisting Mr. Ward and TLW (collectively, the "Prior Schedule 13D"). Mr.
McClendon, CI, Mr. Ward and TLW are referred to herein as the "Reporting
Persons." The group consisting of Mr. McClendon and CI and the group consisting
of Mr. Ward and TLW each disclaim beneficial ownership of the shares held by the
other group.
Item 1. Security and Issuer.
This Schedule 13D relates to the common stock, par value $.01 per share
(the "Common Stock"), of Chesapeake Energy Corporation, an Oklahoma
corporation (the "Company") having its principal executive offices at
6100 North Western Avenue, Oklahoma City, Oklahoma 73118.
Item 2. Identity and Background.
(a)-(c)
Aubrey K. McClendon
Mr. McClendon is the Chairman of the Board and Chief Executive Officer
of the Company, having a business address of 6100 North Western Avenue,
Oklahoma City, Oklahoma 73118. The Company is engaged in oil and gas
exploration and development.
Chesapeake Investments
Chesapeake Investments, an Oklahoma Limited Partnership, is an Oklahoma
limited partnership, having a business address of 6100 North Western
Avenue, Oklahoma City, Oklahoma 73118. Mr. McClendon is the sole
general partner of CI. CI is principally engaged in the ownership of
working interests in oil and gas wells and leases.
Tom L. Ward
Mr. Ward is the President and Chief Operating Officer of the Company,
having a business address of 6200 North Western Avenue, Oklahoma City,
Oklahoma 73118.
TLW Investments Inc.
TLW Investments Inc., is an Oklahoma corporation having a business
address of 6200 North Western Avenue, Oklahoma City, Oklahoma 73118.
Mr. Ward is the sole shareholder,
Page 6 of 12 Pages
<PAGE> 7
CUSIP NO. 16517 10 7
director, and president of TLW. TLW is principally engaged in the
ownership of working interests in oil and gas wells and leases.
(d) During the past five (5) years no Reporting Person has been
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) During the past five (5) years, no Reporting Person has been a
party to a civil proceeding of a judicial or an administrative body of
competent jurisdiction as a result of which a Reporting Person is, or
was, subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activity subject to, federal
or state securities laws or finding any violation with respect to such
laws.
Item 3. Source and Amount of Funds or Other Consideration.
The Reporting Persons acquired more than 5% of the outstanding Common
Stock of the Company upon the formation and capitalization of the
Company effective January 1, 1992. As the primary consideration for
such shares, the Reporting Persons conveyed to the Company certain oil
and gas properties, stock of various corporations which became
wholly-owned subsidiaries of the Company, other real property and
personal property.
Subsequent to the formation of the Company the Reporting Persons
acquired shares of the Company's common stock through open market
purchases and through the exercise of employee stock options issued to
Mr. McClendon and Mr. Ward under the Company's employee stock option
plans. Except for open market purchases by Mr. Ward's children of
21,435 shares of stock (for which Mr. Ward disclaims beneficial
ownership) no open market purchases have been consummated by the
Reporting Persons since the filing of the Prior Schedule 13D.
The investment cost for the previously reported purchases were funded
using the Reporting Person's own funds and funds borrowed by the
Reporting Person in transactions previously disclosed in the Prior
Schedule 13D including, without implied limitation, lending
arrangements with Morgan Guaranty Trust Company of New York ("Morgan
Guaranty"), Donaldson, Lufkin & Jenrette and Dain Rauscher, Inc., as
successor to Rauscher, Pierce & Refnes, Inc. To the extent still
outstanding, the foregoing loans are secured by a security interest in
a portion of the shares of stock held by the Reporting Persons.
A portion of the foregoing indebtedness was refinanced by the Reporting
Persons. Pursuant to loan agreements dated July 7, 1998, as amended
from time to time, Mr. McClendon and Mr. Ward each borrowed $5.0
million from Chesapeake Energy Marketing, Inc. ("CEMI"), an affiliate
of the Company, with the proceeds applied to the indebtedness at Morgan
Guaranty. Mr. McClendon's loan from CEMI was secured by various
collateral including 144,807 shares of the Common Stock. Mr. Ward's
loan from CEMI was secured by various collateral including 2,350,840
shares of the Common Stock.
Page 7 of 12 Pages
<PAGE> 8
CUSIP NO. 16517 10 7
Item 4. Purpose of Transaction.
Mr. McClendon and Mr. Ward acquired the shares of Common Stock for
investment purposes. In the future, the Reporting Persons may: (i)
purchase additional shares of Common Stock or (ii) dispose of any or
all of the Common Stock in any manner permitted by applicable
securities laws. Mr. McClendon and Mr. Ward are each members of the
Company's Board of Directors. Other than Mr. McClendon's and Mr. Ward's
participation on the Board of Directors, none of the Reporting Persons
has any present plans or intentions relating to the transactions
described in paragraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
The aggregate percentage of shares of Common Stock reported as
beneficially owned by each Reporting Person was computed based upon
94,928,623 shares of Common Stock outstanding on November 30, 1999.
The number was computed based on the shares reported outstanding by
the Company as of November 8, 1999, in the most recent 10Q filed by
the Company on November 15, 1999, adjusted for the transaction
discussed in Item 5(c).
(a) The following table sets forth the aggregate number and percentage
of the class of Common Stock of the Company identified pursuant to Item
1 beneficially owned by each person named in Item 2:
<TABLE>
<CAPTION>
Person Amount Percent
------ ------ -------
<S> <C> <C>
Aubrey K. McClendon 10,083,836 (1)(2) 10.62%
Chesapeake Investments 508,560 (2) .54%
Tom L. Ward 11,366,052 (3)(4) 11.97%
TLW Investments 1,846,860 (4) 1.95%
</TABLE>
- --------------------
(1) This amount includes: (i) 73,583 shares held on behalf of Mr. McClendon in
the Chesapeake Energy Corporation Savings and Incentive Stock Bonus Plan as of
September 30, 1999, the latest date such information is available; and (ii)
722,953 shares which Mr. McClendon has the right to acquire within sixty (60)
days pursuant to stock options granted by the Company.
(2) This amount includes 508,560 shares owned of record by CI, of which Mr.
McClendon is the sole general partner. CI and Mr. McClendon share voting and
dispositive power over such shares.
(3) This amount includes (i) 25,588 shares held on behalf of Mr. Ward in the
Chesapeake Energy Corporation Savings and Incentive Stock Bonus Plan as of
September 30, 1999, the latest date such information is available; (ii) 722,954
shares which Mr. Ward has the right to acquire within sixty (60) days pursuant
to stock options granted by the Company; (iii) 1,098,600 shares held by Mr. Ward
as Trustee of a trust for the benefit of Mr. McClendon's children; and (iv)
21,435 shares held by Mr. Ward in custodial accounts for the benefit of Mr.
Ward's children. Mr. Ward disclaims ownership of the shares held in the
McClendon Children's Trust under (iii) above and the shares held for the benefit
of Mr. Ward's children under (iv) above.
(4) This amount includes 1,846,860 shares owned of record by TLW, of which Mr.
Ward is the sole shareholder, director, and Chief Executive Officer. TLW and Mr.
Ward share voting and dispositive power over such shares.
(b) The following table sets forth, for each person and entity
identified under paragraph (a), the number of shares of Common Stock of
the Company as to which the person has (1) the sole power to vote or
direct the voting, (2) shared power to vote or direct the voting, (3)
the sole power to dispose or to direct the disposition, or (4) shared
power to dispose or to direct the disposition:
Page 8 of 12 Pages
<PAGE> 9
CUSIP NO. 16517 10 7
<TABLE>
<CAPTION>
Sole Voting and Shared Voting and
Person or Entity Power of Disposition Power of Disposition
---------------- -------------------- --------------------
<S> <C> <C>
Aubrey K. McClendon 9,575,276 (1) 508,560 (2)
Chesapeake Investments 0 508,560 (2)
Tom L. Ward 9,519,192 (3) 1,846,860 (4)
TLW Investments 0 1,846,860 (4)
</TABLE>
- ----------------------
(1) See footnote (1) under paragraph (a) of this Item 5.
(2) See footnote (2) under paragraph (a) of this Item 5.
(3) See footnote (3) under paragraph (a) of this Item 5.
(4) See footnote (4) under paragraph (a) of this Item 5.
(c) During the sixty days prior to the date of this Schedule 13D, the
following transactions were effected in the Common Stock by a Reporting
Person:
On November 18, 1999, Mr. McClendon satisfied the loan from CEMI by
transferring to CEMI free and clear of all liens, claims and
encumbrances 1,184,532 shares of Common Stock. The original principal
balance of the Mr. McClendon's loan from CEMI was $5.0 million and the
balance due and owing on the effective date of the foregoing transfer
of Common Stock was $3,897,109. The sale price of the Common Stock
transferred to CEMI in the foregoing transaction was $3.29 per share
which amount was determined by taking the average closing price of the
Common Stock for the ten trading days prior to the transfer of the
Common Stock to CEMI. Although the foregoing transaction was closed
effective November 18, 1999, the transaction was subject to termination
until the Company's primary lender consented to the transaction, which
consent was delivered December 2, 1999.
On November 18, 1999, Mr. Ward satisfied the loan from CEMI by
transferring to CEMI free and clear of all liens, claims and
encumbrances 1,135,575 shares of Common Stock. The original principal
balance of the Mr. Ward's loan from CEMI was $5.0 million and the
balance due and owing on the effective date of the foregoing transfer
of Common Stock was $3,736,043. The sale price of the Common Stock
transferred to CEMI in the foregoing transaction was $3.29 per share
which amount was determined by taking the average closing price of the
Common Stock for the ten trading days prior to the transfer of the
Common Stock to CEMI. Although the foregoing transaction was closed
effective November 18, 1999, the transaction was subject to termination
until the Company's primary lender consented to the transaction, which
consent was delivered December 2, 1999.
Page 9 of 12 Pages
<PAGE> 10
CUSIP NO. 16517 10 7
(d) See Item 6, below.
(e) Not applicable.
Item 6. Contracts, Agreements, Underwritings or Relationships With Respect to
Securities of the Issuer.
Mr. McClendon and Mr. Ward, as officers of the Company, participate in
the Company's 1992 Incentive Stock Option Plan, 1992 Nonstatutory Stock
Option Plan, as amended, 1994 Stock Option Plan, 1996 Stock Option Plan
and 1999 Stock Option Plan.
Mr. McClendon had three separate lending agreements with Morgan
Guaranty, dated January 8, February 6, and February 13, 1997. Mr.
McClendon also maintains lending arrangements with Donaldson, Lufkin &
Jenrette, pursuant to an agreement dated November 22, 1996 and Dain
Rauscher, Inc. as successor to Rauscher, Pierce & Refnes, Inc.,
pursuant to an agreement dated February 25, 1994. A portion of the
shares of Common Stock owned by Mr. McClendon and CI are pledged as
collateral for such loans. Each agreement contains standard default and
remedial provisions.
Mr. Ward had three separate lending agreements with Morgan Guaranty,
dated January 8, February 6, and February 13, 1997. Mr. Ward also
maintains a lending arrangement with Donaldson, Lufkin & Jenrette,
pursuant to an agreement dated November 22, 1996. A portion of the
shares of Common Stock owned by Mr. Ward are pledged as collateral for
such loans. Each agreement contains standard default and remedial
provisions.
In connection with loans from Mr. Frederick B. Whittemore: (a) Mr.
McClendon granted to Mr. Whittemore pursuant to that certain Common
Stock Purchase Option dated March 10, 1999, an option to purchase
394,688 shares of Common Stock at a purchase price of $0.50 per share;
and (b) Mr. Ward granted to Mr. Whittemore an option to purchase
355,312 shares of Common Stock at a purchase price of $0.50 per share.
In each case, if on or before February 29, 2000, the borrower pays in
full or collateralizes Mr. Whittemore's loan the number of shares
covered by the option attributable to the loan which is paid or
collateralized automatically decreases by 50%.
In connection with a loan from Mr. Shannon Self, Mr. McClendon granted
to Mr. Self pursuant to that certain Common Stock Purchase Option
dated March 10, 1999, an option to purchase 37,750 shares of Common
Stock at a purchase price of $0.50 per share. In addition, in
connection with a loan from Talbot Fairfield II Limited Partnership
("Talbot"), Mr. McClendon granted to Talbot pursuant to that certain
Common Stock Purchase Option dated March 10, 1999, an option to
purchase 37,750 shares of Common Stock at a purchase price of $0.50
per share. If on or before February 29, 2000, Mr. McClendon pays in
full or collateralizes Mr. Self's or Talbot's loan, the number of
shares covered by the option attributable to the loan which is paid or
collateralized automatically decreases by 50%.
Page 10 of 12 Pages
<PAGE> 11
Item 7. Materials to be Filed as Exhibits.
1. Limited Partnership Agreement of Chesapeake Investments, an Oklahoma
Limited Partnership, is filed as Exhibit E to the Schedule 13D dated
February 4, 1993 filed by Aubrey K. McClendon and is incorporated
herein by reference.
2. The Company's 1992 Incentive Stock Option Plan, as amended, is
incorporated herein by reference to Exhibit 10.1.1 to the Company's
Registration Statement on Form S-4, No. 33-93718, filed June 23, 1995.
3. The Company's 1992 Nonstatutory Stock Option Plan, as amended, is filed
as Exhibit 10.1.2 to the Company's Quarterly Report on Form 10-Q filed
February 14, 1997, and is incorporated herein by reference.
4. The Company's 1994 Stock Option Plan is filed as Exhibit 10.1.3 to the
Company's Quarterly Report on Form 10-Q filed February 14, 1997, and is
incorporated herein by reference.
5. The Company's 1996 Stock Option Plan is filed as Exhibit B to the
Company's Proxy Statement for its 1996 Annual Meeting of Shareholders
filed November 6, 1996 and is incorporated herein by reference.
6. Morgan Guaranty Trust Company of New York Demand Note, dated February
6, 1997, executed by Aubrey K. McClendon was filed as Exhibit 6 to
Amendment No. 1 to Schedule 13D filed by the Reporting Persons on March
10,1997 and is incorporated herein by reference.
7. Morgan Guaranty Trust Company of New York Demand Note, dated February
13, 1997 executed by Aubrey K. McClendon was filed as Exhibit 7 to
Amendment No. 1 to Schedule 13D filed by the Reporting Persons on March
10,1997 and is incorporated herein by reference.
8. Morgan Guaranty Trust Company of New York Demand Note, dated February
6, 1997, executed by Tom L. Ward was filed as Exhibit 8 to Amendment
No. 1 to Schedule 13D filed by the Reporting Persons on March 10,1997
and is incorporated herein by reference.
9. Morgan Guaranty Trust Company of New York Demand Note, dated February
13, 1997, executed by Tom L. Ward was filed as Exhibit 9 to Amendment
No. 1 to Schedule 13D filed by the Reporting Persons on March 10,1997
and is incorporated herein by reference.
10. The Company's 1999 Stock Option Plan is filed as Exhibit 10.1.5 to the
Company's Quarterly Report on Form 10-Q filed August 16, 1999, and is
incorporated herein by reference.
11. Stock Purchase Agreement dated November 18, 1999, among Aubrey K.
McClendon, Chesapeake Operating, Inc., and Chesapeake Energy Marketing,
Inc.
Page 11 of 12 Pages
<PAGE> 12
CUSIP NO. 16517 10 7
12. Stock Purchase Agreement dated November 18, 1999, among Tom L. Ward,
Chesapeake Operating, Inc., and Chesapeake Energy Marketing, Inc.
13. Common Stock Purchase Option No. AKM-1 dated March 10, 1999, executed
by Aubrey K. McClendon in favor of Frederick B. Whittemore.
14. Common Stock Purchase Option No. TLW-1 dated March 10, 1999, executed
by Tom L. Ward in favor of Frederick B. Whittemore.
15. Common Stock Purchase Option No. AKM-2 dated March 10, 1999, executed
by Aubrey K. McClendon in favor of Shannon Self.
16. Common Stock Purchase Option No. AKM-3 dated March 10, 1999, executed
by Aubrey K. McClendon in favor of Talbot Fairfield II Limited
Partnership.
17. Joint Filing Agreement.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
DATED: December 16, 1999.
/s/ Aubrey K. McClendon
-------------------------------------------
AUBREY K. McCLENDON, an individual
CHESAPEAKE INVESTMENTS, an Oklahoma limited
partnership
By: /s/ Aubrey K. McClendon
---------------------------------------
Aubrey K. McClendon, General Partner
/s/ Tom L. Ward
-------------------------------------------
TOM L. WARD, an individual
TLW INVESTMENTS INC., an Oklahoma
corporation
By: /s/ Tom L. Ward
---------------------------------------
Tom L. Ward, President
Page 12 of 12 Pages
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
------- ----------- ----------------
<S> <C> <C>
99.1 Limited Partnership Agreement of Chesapeake Incorporated herein by reference to Exhibit E
Investments, an Oklahoma Limited Partnership to the Schedule 13D dated February 4, 1993
99.2 The Company's 1992 Incentive Stock Option Plan, Incorporated herein by reference to Exhibit
as amended 10.1.1 to the Company's Registration Statement
on Form S-4, No. 33-93718, filed June 23, 1995
99.3 The Company's 1992 Nonstatutory Stock Option Incorporated herein by reference to Exhibit
Plan, as amended 10.1.2 to the Company's Quarterly Report on
Form 10-Q filed February 14, 1997
99.4 The Company's 1994 Stock Option Plan Incorporated herein by reference to Exhibit
10.1.3 to the Company's Quarterly Report on
Form 10-Q filed February 14, 1997
99.5 The Company's 1996 Stock Option Plan Incorporated herein by reference to Exhibit B
to the Company's Proxy Statement for its 1996
Annual Meeting of Shareholders filed November
6, 1996
99.6 Morgan Guaranty Trust Company of New York Incorporated herein by reference to Exhibit 6
Demand Note, dated February 6, 1997, executed to Amendment No. 1 to Schedule 13D filed by the
by Aubrey K. McClendon Reporting Persons on March 10, 1997
99.7 Morgan Guaranty Trust Company of New York Demand Incorporated herein by reference to Exhibit 7
Note, dated February 13, 1997 executed by Aubrey to Amendment No. 1 to Schedule 13D filed by the
K. McClendon Reporting Persons on March 10, 1997
99.8 Morgan Guaranty Trust Company of New York Demand Incorporated herein by reference to Exhibit 8
Note, dated February 6, 1997, executed by Tom L. to Amendment No. 1 to Schedule 13D filed by the
Ward Reporting Persons on March 10, 1997
</TABLE>
<PAGE> 14
<TABLE>
<S> <C> <C>
99.9 Morgan Guaranty Trust Company of New York Demand Incorporated herein by reference to Exhibit 9
Note, dated February 13, 1997, executed by Tom L. to Amendment No. 1 to Schedule 13D filed by the
Ward Reporting Persons on March 10,1997
99.10 The Company's 1999 Stock Option Plan Incorporated herein by reference to Exhibit
10.1.5 to the Company's Quarterly Report on
Form 10-Q filed August 16, 1999
99.11 Stock Purchase Agreement dated November 18, 1999, Filed herewith electronically
among Aubrey K. McClendon, Chesapeake Operating,
Inc., and Chesapeake Energy Marketing, Inc.
99.12 Stock Purchase Agreement dated November 18, 1999, Filed herewith electronically
among Tom L. Ward, Chesapeake Operating, Inc.,
and Chesapeake Energy Marketing, Inc.
99.13 Common Stock Purchase Option No. AKM-1 dated Filed herewith electronically
March 10, 1999, executed by Aubrey K. McClendon
in favor of Frederick B. Whittemore.
99.14 Common Stock Purchase Option No. TLW-1 dated Filed herewith electronically
March 10, 1999, executed by Tom L. Ward in favor
of Frederick B. Whittemore.
99.15 Common Stock Purchase Option No. AKM-2 dated Filed herewith electronically
March 10, 1999, executed by Aubrey K. McClendon
in favor of Shannon Self
99.16 Common Stock Purchase Option No. AKM-3 dated Filed herewith electronically
March 10, 1999, executed by Aubrey K. McClendon
in favor of Talbot Fairfield II Limited
Partnership
99.17 Joint Filing Agreement Filed herewith electronically
</TABLE>
<PAGE> 1
EXHIBIT 99.11
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is entered into effective the 18th day of
November, 1999, among AUBREY K. McCLENDON, an individual ("McClendon"), with a
notice address at 6100 North Western, Oklahoma City, Oklahoma 73118, CHESAPEAKE
ENERGY MARKETING, INC., an Oklahoma corporation ("CEMI"), with a notice address
at 6100 North Western, Oklahoma City, Oklahoma 73118, and CHESAPEAKE OPERATING,
INC., an Oklahoma corporation ("COI"), with a notice address at 6100 North
Western, Oklahoma City, Oklahoma 73118.
W I T N E S S E T H :
WHEREAS, pursuant to that certain Second Amended and Restated
Loan Agreement dated effective December 31, 1998, between CEMI and McClendon,
CEMI extended a loan (the "CEMI Loan") to McClendon in the principal amount of
Four Million Eight Hundred Eighty-Five Thousand Dollars ($4,885,000.00) as
evidenced by that certain Amended and Restated Promissory Note dated effective
December 31, 1998 (the "Note");
WHEREAS, COI has extended credit to Chesapeake Investments, an
Oklahoma Limited Partnership ("Investments"), an affiliate of McClendon, for
joint interest billings (the "JIB Debt") in connection with the participation by
Investments in various oil and gas wells drilled and operated by COI pursuant to
that certain Amended and Restated Employment Agreement dated effective July 1,
1998, between McClendon and Chesapeake Energy Corporation, an Oklahoma
corporation ("CEC"), as amended by that certain First Amendment to Amended and
Restated Employment Agreement dated effective December 31, 1998;
WHEREAS, shares of Worldgate Communications, Inc., pledged to
secure the CEMI Loan, were sold and the proceeds from such sale in an amount
equal to Three Hundred Thousand Dollars ($300,000.00) have been or will be paid
to CEMI and applied against the CEMI Loan (the "Worldgate Proceeds"); and
WHEREAS, McClendon and CEMI desire to satisfy the CEMI Loan by
McClendon conveying to CEMI shares of CEC common stock, par value $.01 (the
"Common Stock"), having a Fair Market Value (as hereafter defined) equal to the
unpaid principal balance of the CEMI Loan plus any accrued and unpaid interest
and less the Worldgate Proceeds applied against the CEMI Loan.
NOW THEREFORE, in consideration of the agreements set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Debt Amounts. As of November 18, 1999, and after the anticipated
application of the Worldgate Proceeds, the parties agree that: the amount due
and owing by McClendon for the CEMI Loan equals Three Million Eight Hundred
Ninety-Seven Thousand One Hundred Eight and 69/100 Dollars ($3,897,108.69)
consisting of unpaid principal in the amount of Three Million Eight Hundred
Forty-Six Thousand Eight Hundred Twenty-Seven and 55/100 Dollars ($3,846,827.55)
<PAGE> 2
EXHIBIT 99.11
with accrued and unpaid interest in the amount of Fifty Thousand Two Hundred
Eighty-One and 14/100 Dollars ($50,281.14); and the amount of the JIB Debt owing
by Investments equals One Million Three Hundred Sixty-Two Thousand Twenty-Two
and 64/100 Dollars ($1,362,022.64).
2. CEMI Loan. In accordance with the terms of this Agreement, McClendon
hereby sells to CEMI and CEMI hereby purchases from McClendon the number of
shares of Common Stock having a Fair Market Value equal to the unpaid principal
and interest for the CEMI Loan, which shares of Common Stock will be free and
clear of all liens, claims and encumbrances. Contemporaneous with the execution
of this Agreement, McClendon will deliver or cause to be delivered to CEMI:
shares of Common Stock evidenced by certificates in McClendon's name having a
Fair Market Value equal to the unpaid principal and interest for the CEMI Loan;
and a stock assignment separate from certificate covering such shares of Common
Stock executed by McClendon with signature guaranteed in form and substance
satisfactory to CEMI. For purposes of this Agreement the term "Fair Market
Value" means the lesser of the following: (y) the average of the closing price
for the Common Stock on the New York Stock Exchange for the ten (10) trading
days immediately preceding the date of this Agreement; or (z) the closing price
for the Common Stock on the New York Stock Exchange on the date immediately
prior to the date of this Agreement. On delivery of the foregoing Common Stock,
the CEMI Loan will be deemed to be satisfied in full and CEMI agrees to execute
and deliver to McClendon the receipt and acknowledgment at Schedule "A" attached
as a part hereof.
3. Conditions Precedent. The obligation of CEMI and COI to perform the
terms of this Agreement are subject to the following conditions precedent: the
approval of this Agreement by CEC's Board Directors; the delivery by McClendon
of the required number of shares of Common Stock free and clear of all liens,
claims and encumbrances including, without implied limitation, any security
interest in the shares of Common Stock in favor of any margin lender; and the
grant and perfection of a first and prior security interest to COI by McClendon
or Investments in collateral reasonably acceptable to COI to secure the unpaid
balance of the JIB Debt in substantially the form at Schedule "B" attached as a
part hereof.
4. Miscellaneous. It is further agreed as follows:
4.1 Notices. All notices required hereunder will be in writing and
served by certified mail, return receipt requested, postage
prepaid, at the addresses shown above, until notification of a
change of such addresses. Any notice, demand or communication
required or permitted to be given by any provision of this
Agreement will be in writing and will be deemed to have been
given and received when delivered personally or by
telefacsimile to the party designated to receive such notice,
or on the date following the day sent by overnight courier, or
on the third (3rd) business day after the same is sent by
certified mail, postage and charges prepaid, directed to the
addresses shown above or to such other or additional addresses
as any party might designate by written notice to the other
parties.
4.2 Binding Effect. This Agreement will inure to the benefit of
and bind the respective successors and permitted assigns of
the parties hereto.
-2-
<PAGE> 3
EXHIBIT 99.11
4.3 Severability. If any clause or provision of this Agreement is
illegal, invalid or unenforceable under any present or future
law, the remainder of this Agreement will not be affected
thereby. It is the intention of the parties that if any such
provision is held to be illegal, invalid or unenforceable,
there will be added in lieu thereof a provision as similar in
terms to such provision as is possible to make such provision
legal, valid and enforceable.
4.4 Entire Agreement. This Agreement constitutes the entire
agreement between McClendon and CEMI with respect to
McClendon's surrender of Common Stock in satisfaction of the
CEMI Loan.
4.5 Headings. Paragraph or other headings contained in this
Agreement are for reference purposes only and are not intended
to affect in any way the meaning or interpretation of this
Agreement.
4.6 Amendment. Neither this Agreement nor any of the provisions
hereof can be changed, waived, discharged or terminated,
except by an instrument in writing signed by the party against
whom enforcement of the change, waiver, discharge or
termination is sought.
4.7 Governing Law. This Agreement shall be interpreted and
construed under and by virtue of the internal laws of the
State of Oklahoma, regardless of the domicile and/or residence
of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective the date first above written.
/s/ Aubrey K. McClendon
----------------------------------------
AUBREY K. McCLENDON, individually
("McClendon")
CHESAPEAKE ENERGY MARKETING, INC., an
Oklahoma corporation
By /s/ Marcus C. Rowland
-------------------------------------
Marcus C. Rowland, Vice President
and Chief Financial Officer
("CEMI")
-3-
<PAGE> 4
EXHIBIT 99.11
CHESAPEAKE OPERATING, INC., an Oklahoma
corporation
By /s/ Marcus C. Rowland
-------------------------------------
Marcus C. Rowland, Executive Vice
President and Chief Financial Officer
("COI")
-4-
<PAGE> 1
EXHIBIT 99.12
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is entered into effective the 18th day of
November, 1999, among TOM L. WARD, an individual ("Ward"), with a notice address
at 6200 North Western, Oklahoma City, Oklahoma 73118, CHESAPEAKE ENERGY
MARKETING, INC., an Oklahoma corporation ("CEMI"), with a notice address at 6100
North Western, Oklahoma City, Oklahoma 73118, and CHESAPEAKE OPERATING, INC., an
Oklahoma corporation ("COI"), with a notice address at 6100 North Western,
Oklahoma City, Oklahoma 73118.
W I T N E S S E T H :
WHEREAS, pursuant to that certain Second Amended and Restated
Loan Agreement dated effective December 31, 1998, between CEMI and Ward, CEMI
extended a loan (the "CEMI Loan") to Ward in the principal amount of Five
Million Dollars ($5,000,000.00) as evidenced by that certain Amended and
Restated Promissory Note dated effective December 31, 1998 (the "Note");
WHEREAS, COI has extended credit to TLW Investments Inc., an
Oklahoma corporation ("Investments"), an affiliate of Ward, for joint interest
billings (the "JIB Debt") in connection with the participation by Investments in
various oil and gas wells drilled and operated by COI pursuant to that certain
Amended and Restated Employment Agreement dated effective July 1, 1998, between
Ward and Chesapeake Energy Corporation, an Oklahoma corporation ("CEC"), as
amended by that certain First Amendment to Amended and Restated Employment
Agreement dated effective December 31, 1998;
WHEREAS, shares of Worldgate Communications, Inc., pledged to
secure the CEMI Loan, were sold and the proceeds from such sale in an amount
equal to Three Hundred Thousand Dollars ($300,000.00) have been or will be paid
to CEMI and applied against the CEMI Loan (the "Worldgate Proceeds"); and
WHEREAS, Ward and CEMI desire to satisfy the CEMI Loan by Ward
conveying to CEMI shares of CEC common stock, par value $.01 (the "Common
Stock"), having a Fair Market Value (as hereafter defined) equal to the unpaid
principal balance of the CEMI Loan plus any accrued and unpaid interest and less
the Worldgate Proceeds applied against the CEMI Loan.
NOW THEREFORE, in consideration of the agreements set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Debt Amounts. As of November 18, 1999, and after the anticipated
application of the Worldgate Proceeds, the parties agree that: the amount due
and owing by Ward for the CEMI Loan equals Three Million Seven Hundred
Thirty-Six Thousand Forty-Three and 37/100 Dollars ($3,736,043.37) consisting of
unpaid principal in the amount of Three Million Six Hundred Eighty-Seven
Thousand Eight Hundred Eighty-Seven and 78/100 ($3,687,887.78) with accrued and
unpaid interest in the amount of Forty-Eight Thousand One Hundred Fifty-Five and
59/100 Dollars
<PAGE> 2
EXHIBIT 99.12
($48,155.59); and the amount of the JIB Debt owing by Investments
equals Eight Hundred Thirty-One Thousand Five Hundred Thirty-Three and 46/100
Dollars ($831,533.46).
2. CEMI Loan. In accordance with the terms of this Agreement, Ward hereby
sells to CEMI and CEMI hereby purchases from Ward the number of shares of Common
Stock having a Fair Market Value equal to the unpaid principal and interest for
the CEMI Loan, which shares of Common Stock will be free and clear of all liens,
claims and encumbrances. Contemporaneous with the execution of this Agreement,
Ward will deliver or cause to be delivered to CEMI: shares of Common Stock
evidenced by certificates in Ward's name having a Fair Market Value equal to the
unpaid principal and interest for the CEMI Loan; and a stock assignment separate
from certificate covering such shares of Common Stock executed by Ward with
signature guaranteed in form and substance satisfactory to CEMI. For purposes of
this Agreement the term "Fair Market Value" means the lesser of the following:
(y) the average of the closing price for the Common Stock on the New York Stock
Exchange for the ten (10) trading days immediately preceding the date of this
Agreement; or (z) the closing price for the Common Stock on the New York Stock
Exchange on the date immediately prior to the date of this Agreement. On
delivery of the foregoing Common Stock, the CEMI Loan will be deemed to be
satisfied in full and CEMI agrees to execute and deliver to Ward the receipt and
acknowledgment at Schedule "A" attached as a part hereof.
3. Conditions Precedent. The obligation of CEMI and COI to perform the
terms of this Agreement are subject to the following conditions precedent: the
approval of this Agreement by CEC's Board Directors; the delivery by Ward of the
required number of shares of Common Stock free and clear of all liens, claims
and encumbrances including, without implied limitation, any security interest in
the shares of Common Stock in favor of any margin lender; and the grant and
perfection of a first and prior security interest to COI by Ward or Investments
in collateral reasonably acceptable to COI to secure the unpaid balance of the
JIB Debt in substantially the form at Schedule "B" attached as a part hereof.
4. Miscellaneous. It is further agreed as follows:
4.1 Notices. All notices required hereunder will be in writing and
served by certified mail, return receipt requested, postage
prepaid, at the addresses shown above, until notification of a
change of such addresses. Any notice, demand or communication
required or permitted to be given by any provision of this
Agreement will be in writing and will be deemed to have been
given and received when delivered personally or by
telefacsimile to the party designated to receive such notice,
or on the date following the day sent by overnight courier, or
on the third (3rd) business day after the same is sent by
certified mail, postage and charges prepaid, directed to the
addresses shown above or to such other or additional addresses
as any party might designate by written notice to the other
parties.
4.2 Binding Effect. This Agreement will inure to the benefit of
and bind the respective successors and permitted assigns of
the parties hereto.
4.3 Severability. If any clause or provision of this Agreement is
illegal, invalid or unenforceable under any present or future
law, the remainder of this Agreement will
-2-
<PAGE> 3
EXHIBIT 99.12
not be affected thereby. It is the intention of the parties
that if any such provision is held to be illegal, invalid or
unenforceable, there will be added in lieu thereof a provision
as similar in terms to such provision as is possible to make
such provision legal, valid and enforceable.
4.4 Entire Agreement. This Agreement constitutes the entire
agreement between Ward and CEMI with respect to Ward's
surrender of Common Stock in satisfaction of the CEMI Loan.
4.5 Headings. Paragraph or other headings contained in this
Agreement are for reference purposes only and are not intended
to affect in any way the meaning or interpretation of this
Agreement.
4.6 Amendment. Neither this Agreement nor any of the provisions
hereof can be changed, waived, discharged or terminated,
except by an instrument in writing signed by the party against
whom enforcement of the change, waiver, discharge or
termination is sought.
4.7 Governing Law. This Agreement shall be interpreted and
construed under and by virtue of the internal laws of the
State of Oklahoma, regardless of the domicile and/or residence
of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective the date first above written.
/s/ Tom L. Ward
-------------------------------------
TOM L. WARD, individually
("Ward")
CHESAPEAKE ENERGY MARKETING, INC., an
Oklahoma corporation
By /s/ Marcus C. Rowland
----------------------------------
Marcus C. Rowland, Vice President
and Chief Financial Officer
("CEMI")
-3-
<PAGE> 4
EXHIBIT 99.12
CHESAPEAKE OPERATING, INC., an
Oklahoma corporation
By /s/ Marcus C. Rowland
----------------------------------
Marcus C. Rowland, Executive Vice
President and Chief Financial
Officer
("COI")
-4-
<PAGE> 1
EXHIBIT 99.13
THIS OPTION AND THE COMMON STOCK TO BE CONVEYED PURSUANT TO THIS OPTION HAVE NOT
BEEN REGISTERED UNDER ANY FEDERAL OR STATE SECURITIES LAWS. THIS OPTION AND THE
COMMON STOCK TO BE CONVEYED PURSUANT TO THIS OPTION MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, ANY APPLICABLE STATE SECURITIES LAWS AND ANY APPLICABLE
BLUE SKY ACTS, UNLESS AND UNTIL THE HOLDER HEREOF COMPLIES WITH THE PROVISIONS
OF THIS OPTION AND PROVIDES (i) INFORMATION SATISFACTORY TO THE SELLER AND THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR (ii) AN OPINION OF COUNSEL
ACCEPTABLE TO THE SELLER AND THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
COMMON STOCK PURCHASE OPTION
No. AKM-1 For the Purchase of 394,688 Shares of Common
Stock of Chesapeake Energy Corporation
FOR VALUE RECEIVED, FREDERICK B. WHITTEMORE, an individual
(the "Holder"), is hereby granted the right (the "Option") to purchase from
AUBREY K. McCLENDON, an individual (the "Seller"), at any time after the
Effective Date (as hereafter defined) but not later than the Termination Date
(as hereafter defined), up to Three Hundred Ninety-Four Thousand Six Hundred
Eighty-Eight (394,688) shares of common stock, $.01 par value ("Common Stock")
of Chesapeake Energy Corporation, an Oklahoma corporation (the "Company"), at
the Purchase Price (as hereafter defined) and on the terms and conditions herein
set forth. The Purchase Price and the number of shares of Common Stock
purchasable are subject to adjustment on the occurrence of certain contingencies
set forth in this Option. On presentation and surrender of this Option, together
with payment of the Purchase Price for the shares of Common Stock thereby
purchased, at the office of the Seller in Oklahoma City, Oklahoma, the
registered Holder of this Option will be entitled to receive a certificate or
certificates for the shares of Common Stock so purchased.
This Option is issued pursuant to the provisions of that
certain Loan Agreement dated effective March 10, 1999 (the "Loan Agreement")
between the Seller and the Holder.
This Option is subject to the following terms and conditions:
1. Exercise of Option. The right to purchase the Common Stock represented by
this Option is exercisable at the option of the Holder hereof: (a) for fifty
percent (50%) of the Option Shares (as hereinafter defined) in whole or in part
at any time prior to the Termination Date; and (b) in the event the Seller fails
to satisfy the terms of paragraph 6.2 of this Option on or before February 29,
2000 (the "Prepayment Date") for the remaining fifty percent (50%) of the Option
Shares in whole or in part at any time after the Prepayment Date and prior to
the Termination Date. This
<PAGE> 2
EXHIBIT 99.13
Option may be exercised by the delivery to the Seller of written notice of the
exercise of this Option, surrender of this Option to the Seller and the payment
of the Purchase Price. The Purchase Price for the Option Shares may be paid: (a)
in immediately available funds of the United States of America; (b) by tendering
to the Seller an equivalent principal or accrued interest credit under the terms
of the Loan Agreement; or (c) by the Holder surrendering or assigning to the
Seller the rights to purchase the number of Option Shares under this Option,
which are not being exercised pursuant to such notice, with a value equal to the
Purchase Price. For purposes of the foregoing clause (c), value is deemed to be
the difference between the current market price per share of Common Stock and
the exercise price of the Option Shares for which the rights are being
surrendered by the Holder. In the case of the purchase of less than all the
shares purchasable under this Option, the Seller will cancel this Option on the
surrender hereof and will execute and deliver a new Option of like tenor for the
balance of the shares purchasable hereunder.
2. Term. This Option may be exercised for up to fifty percent (50%) of the
Option Shares at any time after the date hereof and, if the conditions set forth
in paragraph 6.2 hereof are not met on or before the Prepayment Date, for one
hundred percent (100%) of the Option Shares at any time after the Prepayment
Date (the "Effective Date"), and on or before August 31, 2006 (the "Termination
Date"). If the Option to purchase all or part of the shares has not been
exercised prior to the Termination Date, this Option and all of the rights of
the Holder hereunder will expire and terminate on such date without notice by
the Seller.
3. Purchase Price. On the exercise of this Option, the Holder agrees to pay to
the Seller for each share of Common Stock purchased by the Holder pursuant to
the terms of this Option (the "Option Shares") an amount (the "Purchase Price")
equal to fifty cents ($0.50). The Purchase Price and number of shares will be
subject to the adjustments set forth in paragraph 6 of this Option.
4. Representations and Warranties of the Seller. The Seller represents and
warrants to and agrees with the Holder as follows:
4.1 Sufficient Shares. The Seller owns sufficient shares of Common
Stock to fulfill the Seller's obligations under this Option.
On exercise of this Option and payment of the Purchase Price,
the Option Shares issued to the Holder will be validly issued,
fully paid and nonassessable and free and clear of all liens,
claims and encumbrances.
4.2 Authority. The Seller has taken all necessary action to
authorize the execution and delivery of this Option, the sales
of the shares of Common Stock upon exercise hereof, and this
Option is, or will be upon issuance, a valid, binding and
enforceable obligation of the Seller. The execution and
delivery of this Option will not violate: (a) any order, writ,
injunction or decree of any court, administrative agency or
governmental body applicable to the Seller or the Common
Stock; or (b) any contract, lease, note, bond, mortgage or
other agreement to which the Seller is a party, by which the
Seller is bound or to which any of the Seller's assets are
subject.
- 2 -
<PAGE> 3
EXHIBIT 99.13
5. Representations and Warranties of the Holder. The Holder represents, warrants
and agrees with the Seller and the Company as follows:
5.1 Accredited Investor. The Holder meets all of the
qualifications and is an "accredited investor" as that term is
defined in Rule 501(a) of Regulation D promulgated pursuant to
the Securities Act of 1933 (the "Securities Act").
5.2 Restrictive Legend. This Option is being acquired and any
Option Shares to be acquired by the Holder pursuant to this
Option (collectively, "Securities") will be acquired for
investment for the Holder's own account and not with a view
to, or for resale in connection with, any distribution of such
Securities within the meaning of the Securities Act. The
Securities will not be sold, transferred or otherwise disposed
of without registration under the Securities Act and state
securities laws or qualifications for exemptions therefrom.
The Holder agrees that each certificate representing the
Option Shares may be inscribed with a legend to the foregoing
effect, which legend will be as follows:
"The shares represented by this certificate have been
acquired solely for investment purposes and have not
been registered under the Securities Act of 1933, as
amended, or the securities laws of any state. The
shares may not be sold, transferred, assigned or
otherwise disposed of unless and until such shares
are first registered under the Securities Act of
1933, all applicable state securities laws and all
rules and regulations promulgated thereunder or
unless and until the holder hereof provides either
(i) information satisfactory to the Company that such
registration is not required or (ii) an opinion of
counsel acceptable to the Company to the effect that
such registration is not required."
The Holder agrees that the Company may place a stop transfer
order with the Company's transfer agent, if any, with respect
to any noncomplying transfer of the certificates representing
any such Common Stock, which stop transfer order will be
removed upon compliance with the provisions hereof.
6. Adjustments. The Purchase Price and the number of shares of Common Stock
issuable on exercise of this Option will be subject to adjustment as follows:
6.1 Adjustment to Purchase Price. The Purchase Price pursuant to
which Common Stock may be acquired hereunder will be subject
to the adjustments herein set forth for transactions described
below which occur after the date of this Option.
6.1.1 Issuance of Common Stock. If at any time subsequent
to the date hereof the Company issues or sells any
shares of Common Stock for a consideration per share
of Common Stock less than the Purchase Price, the
Purchase Price for the shares of Common Stock which
remain to be purchased under this Option will be
reduced to the per share price received
- 3 -
<PAGE> 4
EXHIBIT 99.13
by the Company on such issue or sale. The adjustment
provided for in this paragraph will not be made as a
result of the issuance or purchase of any shares of
Common Stock reserved for issuance and subsequently
issued pursuant to any stock option plan for
employees of the Company or professional persons
retained by the Company in the ordinary course of the
Company's business.
6.1.2 Consideration for Stock. If any shares of Common
Stock are issued or sold by the Company for cash paid
or to be paid, the consideration received will be
deemed to be the amount received and to be received
by the Company for such shares of Common Stock. If
any shares of Common Stock are issued or sold by the
Company for consideration other than cash, the amount
of consideration will be the fair value of such
consideration received and to be received, as
determined in good faith by the Company's board of
directors. In determining consideration received by
the Company, expenses, underwriting commissions or
concessions paid or allowed by the Company will not
be deducted. If the Company distributes with respect
to the Common Stock shares of Common Stock, rights or
options to subscribe for or purchase shares of Common
Stock ("Options") or securities convertible into or
exchangeable for shares of Common Stock ("Convertible
Securities") and a Purchase Price adjustment is made
on the issuance of such Options or Convertible
Securities, then any share of Common Stock issuable
in satisfaction of such distribution, or in
connection with the exercise of the Options or in
connection with the conversion of the Convertible
Securities will be deemed issued or sold without
consideration but no additional adjustment to the
Purchase Price will be made by reason thereof.
6.2 Share Adjustments. If, on or before February 29, 2000, the
loan made pursuant to the Loan Agreement is: (a) paid in full
with interest at ten percent (10%) per annum from September 1,
1998 until the date of payment; or (b) fully secured with
collateral acceptable to the Holder, as provided in paragraph
8 of the Loan Agreement, then the number of shares of Common
Stock covered by this Option will decrease to One Hundred
Ninety-Seven Thousand Three Hundred Forty-Four (197,344). In
addition, the number of shares of Common Stock to be issued
pursuant to this Option will be adjusted (a) in the event the
Company issued any Options, Convertible Securities or shares
of Common Stock as a stock dividend, (b) issues any shares of
Common Stock by reclassification of its Common Stock, or (c)
subdivides or combines its Common Stock. The shares of Common
Stock to be conveyed pursuant to this Option at the time of
the effective date of such stock dividend, subdivisions,
combination or reclassification will be adjusted, effective at
the opening of business on the business day next following
such record date or effective date, so the Holder will be
entitled to receive the number of shares of Common Stock which
the Holder would have owned or been entitled to receive had
such shares of Common Stock been converted immediately prior
to such time.
- 4 -
<PAGE> 5
EXHIBIT 99.13
6.3 Option Need Not be Changed to Reflect Adjustments.
Irrespective of any adjustment or change in the Purchase Price
or the number of shares of Common Stock actually purchasable
hereunder, this Option after issuance may continue to express
the Purchase Price per share and the number of shares
purchasable hereunder as if the adjusted Purchase Price per
share and the number of shares purchasable were expressed in
this Option when initially issued.
6.4 Reorganization, Merger, Etc. If any capital reorganization,
recapitalization or reclassification of the capital stock of
the Company, a consolidation or merger of the Company with
another corporation or the sale or conveyance of all or
substantially all of the Company's assets to another
corporation is affected, the Holder will have the right to
purchase and receive on the basis, terms and conditions
specified in this Option such shares of stock, securities or
assets as may be issued or payable with respect to or in
exchange for Common Stock equal to the number of shares of
such Common Stock immediately theretofore purchasable and
receivable upon the exercise of this Option had the
reorganization, reclassification, recapitalization,
consolidation, merger, sale or conveyance not taken place. In
each such case, appropriate provisions will be made with
respect to the rights and interests of the Holder of this
Option to the end that the provisions hereof (including
without limitation provisions for adjustment of the Purchase
Price and of the number of shares purchasable upon the
exercise of this Option) will thereafter be applicable, as
nearly as may be practicable to any stock, securities or
assets to be acquired under this Option.
6.5 Notice to Holder. On any adjustment of the Purchase Price or
an increase or decrease in the number of shares of Common
Stock purchasable on the exercise of this Option, the Seller
will, within thirty (30) days after such adjustment, give
written notice of such adjustment and the method of
calculating the adjustment and the facts (including a
statement of the consideration received or deemed to have been
received by the Company) on which such calculations are based.
6.6 Record Date. If the Company sets a record date for the purpose
of entitling the holders of Common Stock to (a) receive a
dividend or other distribution payable in shares of Common
Stock, or (b) subscribe for or purchase shares of Common
Stock, then such record date will be deemed to be the date of
the issue or sale of the shares of Common Stock deemed to have
been issued or sold upon the declaration of such dividend or
the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the
case may be.
6.7 Treasury Shares. The number of shares of Common Stock
outstanding at any given time will not include shares owned or
held by or for the account of the Company, and the disposition
of any such shares will be considered an issue or sale of
shares of Common Stock for the purpose of this paragraph 6.
7. Status of Holder. This Option does not entitle the Holder hereof to any
voting rights or other rights as a shareholder of the Company.
- 5 -
<PAGE> 6
EXHIBIT 99.13
8. No Fractional Shares. The Company will not be required to issue stock
certificates representing fractions of shares of Common Stock.
9. Cash Payment. The Seller will have the right to satisfy this Option in cash
if as a result of continuing margin account liens or exercise of remedies by
margin account lenders, the Seller does not possess sufficient shares of Common
Stock on the date this Option is exercised or "in the money" exercisable options
sufficient to satisfy the Option exercise.
10. Notices. All notices, requests, consents and other communications hereunder
will be in writing and will be deemed to have been made when delivered or when
mailed first class postage prepaid or delivered to the telegraph office:
(i) if to the Holder of this Option, at the address of the Holder
as set forth below the Holder's signature hereon, or at such
other address as may have been furnished to the Seller in
writing by the Holder; or
(ii) if to the Seller, 6100 North Western, Oklahoma City, Oklahoma
73118, or at such other address as may have been furnished to
the Holder in writing by the Seller.
11. Headings. The headings of the paragraphs of this Option are inserted for
convenience only and will not be deemed to constitute a part of this Option.
12. Governing Law. This Option is being delivered and is intended to be
performed in the State of Oklahoma and will be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
such state.
13. Assignment. Subject to the conditions set forth herein, this Option and all
rights hereunder are transferable by the Holder, in whole or in part.
IN WITNESS WHEREOF, this Option has been executed effective
the 10th day of March, 1999.
/s/Aubrey K. McClendon
--------------------------------------------
AUBREY K. McCLENDON, individually
(the "Seller")
/s/ Frederick B. Whittemore
--------------------------------------------
FREDERICK B. WHITTEMORE, individually
c/o Morgan Stanley & Company
1221 Avenue of the Americas, 30th Floor
New York City, New York 10020
(the "Holder")
- 6 -
<PAGE> 1
EXHIBIT 99.14
THIS OPTION AND THE COMMON STOCK TO BE CONVEYED PURSUANT TO THIS OPTION HAVE NOT
BEEN REGISTERED UNDER ANY FEDERAL OR STATE SECURITIES LAWS. THIS OPTION AND THE
COMMON STOCK TO BE CONVEYED PURSUANT TO THIS OPTION MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, ANY APPLICABLE STATE SECURITIES LAWS AND ANY APPLICABLE
BLUE SKY ACTS, UNLESS AND UNTIL THE HOLDER HEREOF COMPLIES WITH THE PROVISIONS
OF THIS OPTION AND PROVIDES (i) INFORMATION SATISFACTORY TO THE SELLER AND THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR (ii) AN OPINION OF COUNSEL
ACCEPTABLE TO THE SELLER AND THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
COMMON STOCK PURCHASE OPTION
No. TLW-1 For the Purchase of 355,312 Shares of Common
Stock of Chesapeake Energy Corporation
FOR VALUE RECEIVED, FREDERICK B. WHITTEMORE, an individual
(the "Holder"), is hereby granted the right (the "Option") to purchase from TOM
L. WARD, an individual (the "Seller"), at any time after the Effective Date (as
hereafter defined) but not later than the Termination Date (as hereafter
defined), up to Three Hundred Fifty-Five Thousand Three Hundred Twelve (355,312)
shares of common stock, $.01 par value ("Common Stock") of Chesapeake Energy
Corporation, an Oklahoma corporation (the "Company"), at the Purchase Price (as
hereafter defined) and on the terms and conditions herein set forth. The
Purchase Price and the number of shares of Common Stock purchasable are subject
to adjustment on the occurrence of certain contingencies set forth in this
Option. On presentation and surrender of this Option, together with payment of
the Purchase Price for the shares of Common Stock thereby purchased, at the
office of the Seller in Oklahoma City, Oklahoma, the registered Holder of this
Option will be entitled to receive a certificate or certificates for the shares
of Common Stock so purchased.
This Option is issued pursuant to the provisions of that
certain Loan Agreement dated effective March 10, 1999 (the "Loan Agreement")
between the Seller and the Holder.
This Option is subject to the following terms and conditions:
1. Exercise of Option. The right to purchase the Common Stock represented
by this Option is exercisable at the option of the Holder hereof: (a) for fifty
percent (50%) of the Option Shares (as hereinafter defined) in whole or in part
at any time prior to the Termination Date; and (b) in the event the Seller fails
to satisfy the terms of paragraph 6.2 of this Option on or before February 29,
2000 (the "Prepayment Date") for the remaining fifty percent (50%) of the Option
Shares in whole or in part at any time after the Prepayment Date and prior to
the Termination Date. This
<PAGE> 2
EXHIBIT 99.14
Option may be exercised by the delivery to the Seller of written notice of the
exercise of this Option, surrender of this Option to the Seller and the payment
of the Purchase Price. The Purchase Price for the Option Shares may be paid: (a)
in immediately available funds of the United States of America; (b) by tendering
to the Seller an equivalent principal or accrued interest credit under the terms
of the Loan Agreement; or (c) by the Holder surrendering or assigning to the
Seller the rights to purchase the number of Option Shares under this Option,
which are not being exercised pursuant to such notice, with a value equal to the
Purchase Price. For purposes of the foregoing clause (c), value is deemed to be
the difference between the current market price per share of Common Stock and
the exercise price of the Option Shares for which the rights are being
surrendered by the Holder. In the case of the purchase of less than all the
shares purchasable under this Option, the Seller will cancel this Option on the
surrender hereof and will execute and deliver a new Option of like tenor for the
balance of the shares purchasable hereunder.
2. Term. This Option may be exercised for up to fifty percent (50%) of the
Option Shares at any time after the date hereof and, if the conditions set forth
in paragraph 6.2 hereof are not met on or before the Prepayment Date, for one
hundred percent (100%) of the Option Shares at any time after the Prepayment
Date (the "Effective Date"), and on or before August 31, 2006 (the "Termination
Date"). If the Option to purchase all or part of the shares has not been
exercised prior to the Termination Date, this Option and all of the rights of
the Holder hereunder will expire and terminate on such date without notice by
the Seller.
3. Purchase Price. On the exercise of this Option, the Holder agrees to
pay to the Seller for each share of Common Stock purchased by the Holder
pursuant to the terms of this Option (the "Option Shares") an amount (the
"Purchase Price") equal to fifty cents ($0.50). The Purchase Price and number of
shares will be subject to the adjustments set forth in paragraph 6 of this
Option.
4. Representations and Warranties of the Seller. The Seller represents and
warrants to and agrees with the Holder as follows:
4.1 Sufficient Shares. The Seller owns sufficient shares of Common
Stock to fulfill the Seller's obligations under this Option.
On exercise of this Option and payment of the Purchase Price,
the Option Shares issued to the Holder will be validly issued,
fully paid and nonassessable and free and clear of all liens,
claims and encumbrances.
4.2 Authority. The Seller has taken all necessary action to
authorize the execution and delivery of this Option, the sales
of the shares of Common Stock upon exercise hereof, and this
Option is, or will be upon issuance, a valid, binding and
enforceable obligation of the Seller. The execution and
delivery of this Option will not violate: (a) any order, writ,
injunction or decree of any court, administrative agency or
governmental body applicable to the Seller or the Common
Stock; or (b) any contract, lease, note, bond, mortgage or
other agreement to which the Seller is a party, by which the
Seller is bound or to which any of the Seller's assets are
subject.
-2-
<PAGE> 3
EXHIBIT 99.14
5. Representations and Warranties of the Holder. The Holder represents,
warrants and agrees with the Seller and the Company as follows:
5.1 Accredited Investor. The Holder meets all of the
qualifications and is an "accredited investor" as that term is
defined in Rule 501(a) of Regulation D promulgated pursuant to
the Securities Act of 1933 (the "Securities Act").
5.2 Restrictive Legend. This Option is being acquired and any
Option Shares to be acquired by the Holder pursuant to this
Option (collectively, "Securities") will be acquired for
investment for the Holder's own account and not with a view
to, or for resale in connection with, any distribution of such
Securities within the meaning of the Securities Act. The
Securities will not be sold, transferred or otherwise disposed
of without registration under the Securities Act and state
securities laws or qualifications for exemptions therefrom.
The Holder agrees that each certificate representing the
Option Shares may be inscribed with a legend to the foregoing
effect, which legend will be as follows:
"The shares represented by this certificate have been
acquired solely for investment purposes and have not
been registered under the Securities Act of 1933, as
amended, or the securities laws of any state. The
shares may not be sold, transferred, assigned or
otherwise disposed of unless and until such shares
are first registered under the Securities Act of
1933, all applicable state securities laws and all
rules and regulations promulgated thereunder or
unless and until the holder hereof provides either
(i) information satisfactory to the Company that such
registration is not required or (ii) an opinion of
counsel acceptable to the Company to the effect that
such registration is not required."
The Holder agrees that the Company may place a stop transfer
order with the Company's transfer agent, if any, with respect
to any noncomplying transfer of the certificates representing
any such Common Stock, which stop transfer order will be
removed upon compliance with the provisions hereof.
6. Adjustments. The Purchase Price and the number of shares of Common
Stock issuable on exercise of this Option will be subject to adjustment as
follows:
6.1 Adjustment to Purchase Price. The Purchase Price pursuant to
which Common Stock may be acquired hereunder will be subject
to the adjustments herein set forth for transactions described
below which occur after the date of this Option.
6.1.1 Issuance of Common Stock. If at any time subsequent
to the date hereof the Company issues or sells any
shares of Common Stock for a consideration per share
of Common Stock less than the Purchase Price, the
Purchase Price for the shares of Common Stock which
remain to be purchased under this Option will be
reduced to the per share price received
-3-
<PAGE> 4
EXHIBIT 99.14
by the Company on such issue or sale. The adjustment
provided for in this paragraph will not be made as a
result of the issuance or purchase of any shares of
Common Stock reserved for issuance and subsequently
issued pursuant to any stock option plan for
employees of the Company or professional persons
retained by the Company in the ordinary course of the
Company's business.
6.1.2 Consideration for Stock. If any shares of Common
Stock are issued or sold by the Company for cash paid
or to be paid, the consideration received will be
deemed to be the amount received and to be received
by the Company for such shares of Common Stock. If
any shares of Common Stock are issued or sold by the
Company for consideration other than cash, the amount
of consideration will be the fair value of such
consideration received and to be received, as
determined in good faith by the Company's board of
directors. In determining consideration received by
the Company, expenses, underwriting commissions or
concessions paid or allowed by the Company will not
be deducted. If the Company distributes with respect
to the Common Stock shares of Common Stock, rights or
options to subscribe for or purchase shares of Common
Stock ("Options") or securities convertible into or
exchangeable for shares of Common Stock ("Convertible
Securities") and a Purchase Price adjustment is made
on the issuance of such Options or Convertible
Securities, then any share of Common Stock issuable
in satisfaction of such distribution, or in
connection with the exercise of the Options or in
connection with the conversion of the Convertible
Securities will be deemed issued or sold without
consideration but no additional adjustment to the
Purchase Price will be made by reason thereof.
6.2 Share Adjustments. If, on or before February 29, 2000, the
loan made pursuant to the Loan Agreement is: (a) paid in full
with interest at ten percent (10%) per annum from September 1,
1998 until the date of payment; or (b) fully secured with
collateral acceptable to the Holder, as provided in paragraph
8 of the Loan Agreement, then the number of shares of Common
Stock covered by this Option will decrease to One Hundred
Seventy-Seven Thousand Six Hundred Fifty-Six (177,656). In
addition, the number of shares of Common Stock to be issued
pursuant to this Option will be adjusted (a) in the event the
Company issued any Options, Convertible Securities or shares
of Common Stock as a stock dividend, (b) issues any shares of
Common Stock by reclassification of its Common Stock, or (c)
subdivides or combines its Common Stock. The shares of Common
Stock to be conveyed pursuant to this Option at the time of
the effective date of such stock dividend, subdivisions,
combination or reclassification will be adjusted, effective at
the opening of business on the business day next following
such record date or effective date, so the Holder will be
entitled to receive the number of shares of Common Stock which
the Holder would have owned or been entitled to receive had
such shares of Common Stock been converted immediately prior
to such time.
-4-
<PAGE> 5
EXHIBIT 99.14
6.3 Option Need Not be Changed to Reflect Adjustments.
Irrespective of any adjustment or change in the Purchase Price
or the number of shares of Common Stock actually purchasable
hereunder, this Option after issuance may continue to express
the Purchase Price per share and the number of shares
purchasable hereunder as if the adjusted Purchase Price per
share and the number of shares purchasable were expressed in
this Option when initially issued.
6.4 Reorganization, Merger, Etc. If any capital reorganization,
recapitalization or reclassification of the capital stock of
the Company, a consolidation or merger of the Company with
another corporation or the sale or conveyance of all or
substantially all of the Company's assets to another
corporation is affected, the Holder will have the right to
purchase and receive on the basis, terms and conditions
specified in this Option such shares of stock, securities or
assets as may be issued or payable with respect to or in
exchange for Common Stock equal to the number of shares of
such Common Stock immediately theretofore purchasable and
receivable upon the exercise of this Option had the
reorganization, reclassification, recapitalization,
consolidation, merger, sale or conveyance not taken place. In
each such case, appropriate provisions will be made with
respect to the rights and interests of the Holder of this
Option to the end that the provisions hereof (including
without limitation provisions for adjustment of the Purchase
Price and of the number of shares purchasable upon the
exercise of this Option) will thereafter be applicable, as
nearly as may be practicable to any stock, securities or
assets to be acquired under this Option.
6.5 Notice to Holder. On any adjustment of the Purchase Price or
an increase or decrease in the number of shares of Common
Stock purchasable on the exercise of this Option, the Seller
will, within thirty (30) days after such adjustment, give
written notice of such adjustment and the method of
calculating the adjustment and the facts (including a
statement of the consideration received or deemed to have been
received by the Company) on which such calculations are based.
6.6 Record Date. If the Company sets a record date for the purpose
of entitling the holders of Common Stock to (a) receive a
dividend or other distribution payable in shares of Common
Stock, or (b) subscribe for or purchase shares of Common
Stock, then such record date will be deemed to be the date of
the issue or sale of the shares of Common Stock deemed to have
been issued or sold upon the declaration of such dividend or
the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the
case may be.
6.7 Treasury Shares. The number of shares of Common Stock
outstanding at any given time will not include shares owned or
held by or for the account of the Company, and the disposition
of any such shares will be considered an issue or sale of
shares of Common Stock for the purpose of this paragraph 6.
7. Status of Holder. This Option does not entitle the Holder hereof to any
voting rights or other rights as a shareholder of the Company.
-5-
<PAGE> 6
EXHIBIT 99.14
8. No Fractional Shares. The Company will not be required to issue stock
certificates representing fractions of shares of Common Stock.
9. Cash Payment. The Seller will have the right to satisfy this Option in
cash if as a result of continuing margin account liens or exercise of remedies
by margin account lenders, the Seller does not possess sufficient shares of
Common Stock on the date this Option is exercised or "in the money" exercisable
options sufficient to satisfy the Option exercise.
10. Notices. All notices, requests, consents and other communications
hereunder will be in writing and will be deemed to have been made when delivered
or when mailed first class postage prepaid or delivered to the telegraph office:
(i) if to the Holder of this Option, at the address of the Holder
as set forth below the Holder's signature hereon, or at such
other address as may have been furnished to the Seller in
writing by the Holder; or
(ii) if to the Seller, 6100 North Western, Oklahoma City, Oklahoma
73118, or at such other address as may have been furnished to
the Holder in writing by the Seller.
11. Headings. The headings of the paragraphs of this Option are inserted
for convenience only and will not be deemed to constitute a part of this Option.
12. Governing Law. This Option is being delivered and is intended to be
performed in the State of Oklahoma and will be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
such state.
13. Assignment. Subject to the conditions set forth herein, this Option and
all rights hereunder are transferable by the Holder, in whole or in part.
IN WITNESS WHEREOF, this Option has been executed effective
the 10th day of March, 1999.
/s/ Tom L. Ward
---------------------------------------
TOM L. WARD, individually
(the "Seller")
/s/ Frederick B. Whittemore
---------------------------------------
FREDERICK B. WHITTEMORE, individually
c/o Morgan Stanley & Company
1221 Avenue of the Americas, 30th Floor
New York City, New York 10020
(the "Holder")
-6-
<PAGE> 1
EXHIBIT 99.15
THIS OPTION AND THE COMMON STOCK TO BE CONVEYED PURSUANT TO THIS OPTION HAVE NOT
BEEN REGISTERED UNDER ANY FEDERAL OR STATE SECURITIES LAWS. THIS OPTION AND THE
COMMON STOCK TO BE CONVEYED PURSUANT TO THIS OPTION MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, ANY APPLICABLE STATE SECURITIES LAWS AND ANY APPLICABLE
BLUE SKY ACTS, UNLESS AND UNTIL THE HOLDER HEREOF COMPLIES WITH THE PROVISIONS
OF THIS OPTION AND PROVIDES (i) INFORMATION SATISFACTORY TO THE SELLER AND THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR (ii) AN OPINION OF COUNSEL
ACCEPTABLE TO THE SELLER AND THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
COMMON STOCK PURCHASE OPTION
No. AKM-2 For the Purchase of 37,500 Shares of Common Stock of
Chesapeake Energy Corporation
FOR VALUE RECEIVED, SHANNON SELF, an individual (the
"Holder"), is hereby granted the right (the "Option") to purchase from AUBREY K.
McCLENDON, an individual (the "Seller"), at any time after the Effective Date
(as hereafter defined) but not later than the Termination Date (as hereafter
defined), up to Thirty-Seven Thousand Five Hundred (37,500) shares of common
stock, $.01 par value ("Common Stock") of Chesapeake Energy Corporation, an
Oklahoma corporation (the "Company"), at the Purchase Price (as hereafter
defined) and on the terms and conditions herein set forth. The Purchase Price
and the number of shares of Common Stock purchasable are subject to adjustment
on the occurrence of certain contingencies set forth in this Option. On
presentation and surrender of this Option, together with payment of the Purchase
Price for the shares of Common Stock thereby purchased, at the office of the
Seller in Oklahoma City, Oklahoma, the registered Holder of this Option will be
entitled to receive a certificate or certificates for the shares of Common Stock
so purchased.
This Option is issued pursuant to the provisions of that
certain Loan Agreement dated effective March 10, 1999 (the "Loan Agreement"),
between the Seller and the Holder.
This Option is subject to the following terms and conditions:
1. Exercise of Option. The right to purchase the Common Stock represented
by this Option is exercisable at the option of the Holder hereof: (a) for fifty
percent (50%) of the Option Shares (as hereinafter defined) in whole or in part
at any time prior to the Termination Date; and (b) in the event the Seller fails
to satisfy the terms of paragraph 6.2 of this Option on or before February 29,
2000 (the "Prepayment Date") for the remaining fifty percent (50%) of the Option
Shares in whole or in part at any time after the Prepayment Date and prior to
the Termination Date. This Option may be exercised by the delivery to the Seller
of written notice of the exercise of this
<PAGE> 2
EXHIBIT 99.15
Option, surrender of this Option to the Seller and the payment of the Purchase
Price. The Purchase Price for the Option Shares may be paid: (a) in immediately
available funds of the United States of America; (b) by tendering to the Seller
an equivalent principal or accrued interest credit under the terms of the Loan
Agreement; or (c) by the Holder surrendering or assigning to the Seller the
rights to purchase the number of Option Shares under this Option, which are not
being exercised pursuant to such notice, with a value equal to the Purchase
Price. For purposes of the foregoing clause (c), value is deemed to be the
difference between the current market price per share of Common Stock and the
exercise price of the Option Shares for which the rights are being surrendered
by the Holder. In the case of the purchase of less than all the shares
purchasable under this Option, the Seller will cancel this Option on the
surrender hereof and will execute and deliver a new Option of like tenor for the
balance of the shares purchasable hereunder.
2. Term. This Option may be exercised for up to fifty percent (50%) of the
Option Shares at any time after the date hereof and, if the conditions set forth
in paragraph 6.2 hereof are not met on or before the Prepayment Date, for one
hundred percent (100%) of the Option Shares at any time after the Prepayment
Date (the "Effective Date"), and on or before August 31, 2006 (the "Termination
Date"). If the Option to purchase all or part of the shares has not been
exercised prior to the Termination Date, this Option and all of the rights of
the Holder hereunder will expire and terminate on such date without notice by
the Seller.
3. Purchase Price. On the exercise of this Option, the Holder agrees to
pay to the Seller for each share of Common Stock purchased by the Holder
pursuant to the terms of this Option (the "Option Shares") an amount (the
"Purchase Price") equal to fifty cents ($0.50). The Purchase Price and number of
shares will be subject to the adjustments set forth in paragraph 6 of this
Option.
4. Representations and Warranties of the Seller. The Seller represents and
warrants to and agrees with the Holder as follows:
4.1 Sufficient Shares. The Seller owns sufficient shares of Common
Stock to fulfill the Seller's obligations under this Option.
On exercise of this Option and payment of the Purchase Price,
the Option Shares issued to the Holder will be validly issued,
fully paid and nonassessable and free and clear of all liens,
claims and encumbrances.
4.2 Authority. The Seller has taken all necessary action to
authorize the execution and delivery of this Option, the sales
of the shares of Common Stock upon exercise hereof, and this
Option is, or will be upon issuance, a valid, binding and
enforceable obligation of the Seller. The execution and
delivery of this Option will not violate: (a) any order, writ,
injunction or decree of any court, administrative agency or
governmental body applicable to the Seller or the Common
Stock; or (b) any contract, lease, note, bond, mortgage or
other agreement to which the Seller is a party, by which the
Seller is bound or to which any of the Seller's assets are
subject.
-2-
<PAGE> 3
EXHIBIT 99.15
5. Representations and Warranties of the Holder. The Holder represents,
warrants and agrees with the Seller and the Company as follows:
5.1 Accredited Investor. The Holder meets all of the
qualifications and is an "accredited investor" as that term is
defined in Rule 501(a) of Regulation D promulgated pursuant to
the Securities Act of 1933 (the "Securities Act").
5.2 Restrictive Legend. This Option is being acquired and any
Option Shares to be acquired by the Holder pursuant to this
Option (collectively, "Securities") will be acquired for
investment for the Holder's own account and not with a view
to, or for resale in connection with, any distribution of such
Securities within the meaning of the Securities Act. The
Securities will not be sold, transferred or otherwise disposed
of without registration under the Securities Act and state
securities laws or qualifications for exemptions therefrom.
The Holder agrees that each certificate representing the
Option Shares may be inscribed with a legend to the foregoing
effect, which legend will be as follows:
"The shares represented by this certificate have been
acquired solely for investment purposes and have not
been registered under the Securities Act of 1933, as
amended, or the securities laws of any state. The
shares may not be sold, transferred, assigned or
otherwise disposed of unless and until such shares
are first registered under the Securities Act of
1933, all applicable state securities laws and all
rules and regulations promulgated thereunder or
unless and until the holder hereof provides either
(i) information satisfactory to the Company that such
registration is not required or (ii) an opinion of
counsel acceptable to the Company to the effect that
such registration is not required."
The Holder agrees that the Company may place a stop transfer
order with the Company's transfer agent, if any, with respect
to any noncomplying transfer of the certificates representing
any such Common Stock, which stop transfer order will be
removed upon compliance with the provisions hereof.
6. Adjustments. The Purchase Price and the number of shares of Common
Stock issuable on exercise of this Option will be subject to adjustment
as follows:
6.1 Adjustment to Purchase Price. The Purchase Price pursuant to
which Common Stock may be acquired hereunder will be subject
to the adjustments herein set forth for transactions described
below which occur after the date of this Option.
6.1.1 Issuance of Common Stock. If at any time subsequent
to the date hereof the Company issues or sells any
shares of Common Stock for a consideration per share
of Common Stock less than the Purchase Price, the
Purchase Price for the shares of Common Stock which
remain to be purchased under this Option will be
reduced to the per share price received
-3-
<PAGE> 4
EXHIBIT 99.15
by the Company on such issue or sale. The adjustment
provided for in this paragraph will not be made as a
result of the issuance or purchase of any shares of
Common Stock reserved for issuance and subsequently
issued pursuant to any stock option plan for
employees of the Company or professional persons
retained by the Company in the ordinary course of the
Company's business.
6.1.2 Consideration for Stock. If any shares of Common
Stock are issued or sold by the Company for cash paid
or to be paid, the consideration received will be
deemed to be the amount received and to be received
by the Company for such shares of Common Stock. If
any shares of Common Stock are issued or sold by the
Company for consideration other than cash, the amount
of consideration will be the fair value of such
consideration received and to be received, as
determined in good faith by the Company's board of
directors. In determining consideration received by
the Company, expenses, underwriting commissions or
concessions paid or allowed by the Company will not
be deducted. If the Company distributes with respect
to the Common Stock shares of Common Stock, rights or
options to subscribe for or purchase shares of Common
Stock ("Options") or securities convertible into or
exchangeable for shares of Common Stock ("Convertible
Securities") and a Purchase Price adjustment is made
on the issuance of such Options or Convertible
Securities, then any share of Common Stock issuable
in satisfaction of such distribution, or in
connection with the exercise of the Options or in
connection with the conversion of the Convertible
Securities will be deemed issued or sold without
consideration but no additional adjustment to the
Purchase Price will be made by reason thereof.
6.2 Share Adjustments. If, on or before February 29, 2000, the
loan made pursuant to the Loan Agreement is: (a) paid in full
with interest at ten percent (10%) per annum from January 1,
1999, until the date of payment; or (b) fully secured with
collateral acceptable to the Holder on or before February 29,
2000, as provided in paragraph 8 of the Loan Agreement, then
the number of shares of Common Stock covered by this Option
will decrease to Eighteen Thousand Seven Hundred Fifty
(18,750). In addition, the number of shares of Common Stock to
be issued pursuant to this Option will be adjusted (a) in the
event the Company issued any Options, Convertible Securities
or shares of Common Stock as a stock dividend, (b) issues any
shares of Common Stock by reclassification of its Common
Stock, or (c) subdivides or combines its Common Stock. The
shares of Common Stock to be conveyed pursuant to this Option
at the time of the effective date of such stock dividend,
subdivisions, combination or reclassification will be
adjusted, effective at the opening of business on the business
day next following such record date or effective date, so the
Holder will be entitled to receive the number of shares of
Common Stock which the Holder would have owned or been
entitled to receive had such shares of Common Stock been
converted immediately prior to such time.
-4-
<PAGE> 5
EXHIBIT 99.15
6.3 Option Need Not be Changed to Reflect Adjustments.
Irrespective of any adjustment or change in the Purchase Price
or the number of shares of Common Stock actually purchasable
hereunder, this Option after issuance may continue to express
the Purchase Price per share and the number of shares
purchasable hereunder as if the adjusted Purchase Price per
share and the number of shares purchasable were expressed in
this Option when initially issued.
6.4 Reorganization, Merger, Etc. If any capital reorganization,
recapitalization or reclassification of the capital stock of
the Company, a consolidation or merger of the Company with
another corporation or the sale or conveyance of all or
substantially all of the Company's assets to another
corporation is affected, the Holder will have the right to
purchase and receive on the basis, terms and conditions
specified in this Option such shares of stock, securities or
assets as may be issued or payable with respect to or in
exchange for Common Stock equal to the number of shares of
such Common Stock immediately theretofore purchasable and
receivable upon the exercise of this Option had the
reorganization, reclassification, recapitalization,
consolidation, merger, sale or conveyance not taken place. In
each such case, appropriate provisions will be made with
respect to the rights and interests of the Holder of this
Option to the end that the provisions hereof (including
without limitation provisions for adjustment of the Purchase
Price and of the number of shares purchasable upon the
exercise of this Option) will thereafter be applicable, as
nearly as may be practicable to any stock, securities or
assets to be acquired under this Option.
6.5 Notice to Holder. On any adjustment of the Purchase Price or
an increase or decrease in the number of shares of Common
Stock purchasable on the exercise of this Option, the Seller
will, within thirty (30) days after such adjustment, give
written notice of such adjustment and the method of
calculating the adjustment and the facts (including a
statement of the consideration received or deemed to have been
received by the Company) on which such calculations are based.
6.6 Record Date. If the Company sets a record date for the purpose
of entitling the holders of Common Stock to (a) receive a
dividend or other distribution payable in shares of Common
Stock, or (b) subscribe for or purchase shares of Common
Stock, then such record date will be deemed to be the date of
the issue or sale of the shares of Common Stock deemed to have
been issued or sold upon the declaration of such dividend or
the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the
case may be.
6.7 Treasury Shares. The number of shares of Common Stock
outstanding at any given time will not include shares owned or
held by or for the account of the Company, and the disposition
of any such shares will be considered an issue or sale of
shares of Common Stock for the purpose of this paragraph 6.
7. Status of Holder. This Option does not entitle the Holder hereof to any
voting rights or other rights as a shareholder of the Company.
-5-
<PAGE> 6
EXHIBIT 99.15
8. No Fractional Shares. The Company will not be required to issue stock
certificates representing fractions of shares of Common Stock.
9. Cash Payment. The Seller will have the right to satisfy this Option in
cash if as a result of continuing margin account liens or exercise of
remedies by margin account lenders, the Seller does not possess
sufficient shares of Common Stock on the date this Option is exercised
or "in the money" exercisable options sufficient to satisfy the Option
exercise.
10. Notices. All notices, requests, consents and other communications
hereunder will be in writing and will be deemed to have been made when
delivered or when mailed first class postage prepaid or delivered to
the telegraph office:
(i) if to the Holder of this Option, at the address of the Holder
as set forth below the Holder's signature hereon, or at such
other address as may have been furnished to the Seller in
writing by the Holder; or
(ii) if to the Seller, 6100 North Western, Oklahoma City, Oklahoma
73118, or at such other address as may have been furnished to
the Holder in writing by the Seller.
11. Headings. The headings of the paragraphs of this Option are inserted
for convenience only and will not be deemed to constitute a part of
this Option.
12. Governing Law. This Option is being delivered and is intended to be
performed in the State of Oklahoma and will be construed and enforced
in accordance with, and the rights of the parties shall be governed by,
the law of such state.
13. Assignment. Subject to the conditions set forth herein, this Option and
all rights hereunder are transferable by the Holder, in whole or in
part.
IN WITNESS WHEREOF, this Option has been executed effective
the 10th day of March, 1999.
/s/ Aubrey K. McClendon
----------------------------------------
AUBREY K. McCLENDON, individually
(the "Seller")
/s/ Shannon Self
----------------------------------------
SHANNON SELF, individually
Post Office Box 61091
Oklahoma City, Oklahoma 73146
(the "Holder")
-6-
<PAGE> 1
EXHIBIT 99.16
THIS OPTION AND THE COMMON STOCK TO BE CONVEYED PURSUANT TO THIS OPTION HAVE
NOT BEEN REGISTERED UNDER ANY FEDERAL OR STATE SECURITIES LAWS. THIS OPTION AND
THE COMMON STOCK TO BE CONVEYED PURSUANT TO THIS OPTION MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, ANY APPLICABLE STATE SECURITIES LAWS AND ANY APPLICABLE
BLUE SKY ACTS, UNLESS AND UNTIL THE HOLDER HEREOF COMPLIES WITH THE PROVISIONS
OF THIS OPTION AND PROVIDES (i) INFORMATION SATISFACTORY TO THE SELLER AND THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR (ii) AN OPINION OF COUNSEL
ACCEPTABLE TO THE SELLER AND THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
COMMON STOCK PURCHASE OPTION
No. AKM-3 For the Purchase of 93,750 Shares of Common Stock
of Chesapeake Energy Corporation
FOR VALUE RECEIVED, TALBOT FAIRFIELD II LIMITED PARTNERSHIP
(the "Holder"), is hereby granted the right (the "Option") to purchase from
AUBREY K. McCLENDON, an individual (the "Seller"), at any time after the
Effective Date (as hereafter defined) but not later than the Termination Date
(as hereafter defined), up to Ninety-Three Thousand Seven Hundred Fifty
(93,750) shares of common stock, $.01 par value ("Common Stock") of Chesapeake
Energy Corporation, an Oklahoma corporation (the "Company"), at the Purchase
Price (as hereafter defined) and on the terms and conditions herein set forth.
The Purchase Price and the number of shares of Common Stock purchasable are
subject to adjustment on the occurrence of certain contingencies set forth in
this Option. On presentation and surrender of this Option, together with
payment of the Purchase Price for the shares of Common Stock thereby purchased,
at the office of the Seller in Oklahoma City, Oklahoma, the registered Holder
of this Option will be entitled to receive a certificate or certificates for
the shares of Common Stock so purchased.
This Option is issued pursuant to the provisions of that
certain Amended and Restated Loan Agreement dated effective September 1, 1999
(the "Loan Agreement"), between the Seller and the Holder.
This Option is subject to the following terms and conditions:
1. Exercise of Option. The right to purchase the Common Stock represented by
this Option is exercisable at the option of the Holder hereof: (a) for fifty
percent (50%) of the Option Shares (as hereinafter defined) in whole or in part
at any time prior to the Termination Date; and (b) in the event the Seller
fails to satisfy the terms of paragraph 6.2 of this Option on or before
February 29, 2000 (the "Prepayment Date") for the remaining fifty percent (50%)
of the Option Shares in
<PAGE> 2
EXHIBIT 99.16
whole or in part at any time after the Prepayment Date and prior to the
Termination Date. This Option may be exercised by the delivery to the Seller of
written notice of the exercise of this Option, surrender of this Option to the
Seller and the payment of the Purchase Price. The Purchase Price for the Option
Shares may be paid: (a) in immediately available funds of the United States of
America; (b) by tendering to the Seller an equivalent principal or accrued
interest credit under the terms of the Loan Agreement; or (c) by the Holder
surrendering or assigning to the Seller the rights to purchase the number of
Option Shares under this Option, which are not being exercised pursuant to such
notice, with a value equal to the Purchase Price. For purposes of the foregoing
clause (c), value is deemed to be the difference between the current market
price per share of Common Stock and the exercise price of the Option Shares for
which the rights are being surrendered by the Holder. In the case of the
purchase of less than all the shares purchasable under this Option, the Seller
will cancel this Option on the surrender hereof and will execute and deliver a
new Option of like tenor for the balance of the shares purchasable hereunder.
2. Term. This Option may be exercised for up to fifty percent (50%) of the
Option Shares at any time after the date hereof and, if the conditions set
forth in paragraph 6.2 hereof are not met on or before the Prepayment Date, for
one hundred percent (100%) of the Option Shares at any time after the
Prepayment Date (the "Effective Date"), and on or before August 31, 2006 (the
"Termination Date"). If the Option to purchase all or part of the shares has
not been exercised prior to the Termination Date, this Option and all of the
rights of the Holder hereunder will expire and terminate on such date without
notice by the Seller.
3. Purchase Price. On the exercise of this Option, the Holder agrees to pay to
the Seller for each share of Common Stock purchased by the Holder pursuant to
the terms of this Option (the "Option Shares") an amount (the "Purchase Price")
equal to fifty cents ($0.50). The Purchase Price and number of shares will be
subject to the adjustments set forth in paragraph 6 of this Option.
4. Representations and Warranties of the Seller. The Seller represents and
warrants to and agrees with the Holder as follows:
4.1 Sufficient Shares. The Seller owns sufficient shares of
Common Stock to fulfill the Seller's obligations under this
Option. On exercise of this Option and payment of the
Purchase Price, the Option Shares issued to the Holder will
be validly issued, fully paid and nonassessable and free and
clear of all liens, claims and encumbrances.
4.2 Authority. The Seller has taken all necessary action to
authorize the execution and delivery of this Option, the
sales of the shares of Common Stock upon exercise hereof, and
this Option is, or will be upon issuance, a valid, binding
and enforceable obligation of the Seller. The execution and
delivery of this Option will not violate: (a) any order,
writ, injunction or decree of any court, administrative
agency or governmental body applicable to the Seller or the
Common Stock; or (b) any contract, lease, note, bond,
mortgage or other agreement to which the Seller is a party,
by which the Seller is bound or to which any of the Seller's
assets are subject.
- 2 -
<PAGE> 3
EXHIBIT 99.16
5. Representations and Warranties of the Holder. The Holder represents,
warrants and agrees with the Seller and the Company as follows:
5.1 Accredited Investor. The Holder meets all of the
qualifications and is an "accredited investor" as that term
is defined in Rule 501(a) of Regulation D promulgated
pursuant to the Securities Act of 1933 (the "Securities
Act").
5.2 Restrictive Legend. This Option is being acquired and any
Option Shares to be acquired by the Holder pursuant to this
Option (collectively, "Securities") will be acquired for
investment for the Holder's own account and not with a view
to, or for resale in connection with, any distribution of
such Securities within the meaning of the Securities Act. The
Securities will not be sold, transferred or otherwise
disposed of without registration under the Securities Act and
state securities laws or qualifications for exemptions
therefrom. The Holder agrees that each certificate
representing the Option Shares may be inscribed with a legend
to the foregoing effect, which legend will be as follows:
"The shares represented by this certificate have
been acquired solely for investment purposes and
have not been registered under the Securities Act of
1933, as amended, or the securities laws of any
state. The shares may not be sold, transferred,
assigned or otherwise disposed of unless and until
such shares are first registered under the
Securities Act of 1933, all applicable state
securities laws and all rules and regulations
promulgated thereunder or unless and until the
holder hereof provides either (i) information
satisfactory to the Company that such registration
is not required or (ii) an opinion of counsel
acceptable to the Company to the effect that such
registration is not required."
The Holder agrees that the Company may place a stop transfer
order with the Company's transfer agent, if any, with respect
to any noncomplying transfer of the certificates representing
any such Common Stock, which stop transfer order will be
removed upon compliance with the provisions hereof.
6. Adjustments. The Purchase Price and the number of shares of Common Stock
issuable on exercise of this Option will be subject to adjustment as follows:
6.1 Adjustment to Purchase Price. The Purchase Price pursuant to
which Common Stock may be acquired hereunder will be subject
to the adjustments herein set forth for transactions
described below which occur after the date of this Option.
6.1.1 Issuance of Common Stock. If at any time subsequent
to the date hereof the Company issues or sells any
shares of Common Stock for a consideration per share
of Common Stock less than the Purchase Price, the
Purchase Price for the shares of Common Stock which
remain to be purchased under this Option will be
reduced to the per share price received
- 3 -
<PAGE> 4
EXHIBIT 99.16
by the Company on such issue or sale. The adjustment
provided for in this paragraph will not be made as a
result of the issuance or purchase of any shares of
Common Stock reserved for issuance and subsequently
issued pursuant to any stock option plan for
employees of the Company or professional persons
retained by the Company in the ordinary course of
the Company's business.
6.1.2 Consideration for Stock. If any shares of Common
Stock are issued or sold by the Company for cash
paid or to be paid, the consideration received will
be deemed to be the amount received and to be
received by the Company for such shares of Common
Stock. If any shares of Common Stock are issued or
sold by the Company for consideration other than
cash, the amount of consideration will be the fair
value of such consideration received and to be
received, as determined in good faith by the
Company's board of directors. In determining
consideration received by the Company, expenses,
underwriting commissions or concessions paid or
allowed by the Company will not be deducted. If the
Company distributes with respect to the Common Stock
shares of Common Stock, rights or options to
subscribe for or purchase shares of Common Stock
("Options") or securities convertible into or
exchangeable for shares of Common Stock
("Convertible Securities") and a Purchase Price
adjustment is made on the issuance of such Options
or Convertible Securities, then any share of Common
Stock issuable in satisfaction of such distribution,
or in connection with the exercise of the Options or
in connection with the conversion of the Convertible
Securities will be deemed issued or sold without
consideration but no additional adjustment to the
Purchase Price will be made by reason thereof.
6.2 Share Adjustments. If, on or before February 29, 2000, the
loan made pursuant to the Loan Agreement is: (a) paid in full
with interest at ten percent (10%) per annum from September
1, 1999, until the date of payment; or (b) fully secured with
collateral acceptable to the Holder on or before February 29,
2000, as provided in paragraph 8 of the Loan Agreement, then
the number of shares of Common Stock covered by this Option
will decrease to Forty-Six Thousand Eight Hundred
Seventy-Five (46,875). In addition, the number of shares of
Common Stock to be issued pursuant to this Option will be
adjusted (a) in the event the Company issued any Options,
Convertible Securities or shares of Common Stock as a stock
dividend, (b) issues any shares of Common Stock by
reclassification of its Common Stock, or (c) subdivides or
combines its Common Stock. The shares of Common Stock to be
conveyed pursuant to this Option at the time of the effective
date of such stock dividend, subdivisions, combination or
reclassification will be adjusted, effective at the opening
of business on the business day next following such record
date or effective date, so the Holder will be entitled to
receive the number of shares of Common Stock which the Holder
would have owned or been entitled to receive had such shares
of Common Stock been converted immediately prior to such
time.
- 4 -
<PAGE> 5
EXHIBIT 99.16
6.3 Option Need Not be Changed to Reflect Adjustments.
Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock actually
purchasable hereunder, this Option after issuance may
continue to express the Purchase Price per share and the
number of shares purchasable hereunder as if the adjusted
Purchase Price per share and the number of shares purchasable
were expressed in this Option when initially issued.
6.4 Reorganization, Merger, Etc. If any capital reorganization,
recapitalization or reclassification of the capital stock of
the Company, a consolidation or merger of the Company with
another corporation or the sale or conveyance of all or
substantially all of the Company's assets to another
corporation is affected, the Holder will have the right to
purchase and receive on the basis, terms and conditions
specified in this Option such shares of stock, securities or
assets as may be issued or payable with respect to or in
exchange for Common Stock equal to the number of shares of
such Common Stock immediately theretofore purchasable and
receivable upon the exercise of this Option had the
reorganization, reclassification, recapitalization,
consolidation, merger, sale or conveyance not taken place. In
each such case, appropriate provisions will be made with
respect to the rights and interests of the Holder of this
Option to the end that the provisions hereof (including
without limitation provisions for adjustment of the Purchase
Price and of the number of shares purchasable upon the
exercise of this Option) will thereafter be applicable, as
nearly as may be practicable to any stock, securities or
assets to be acquired under this Option.
6.5 Notice to Holder. On any adjustment of the Purchase Price or
an increase or decrease in the number of shares of Common
Stock purchasable on the exercise of this Option, the Seller
will, within thirty (30) days after such adjustment, give
written notice of such adjustment and the method of
calculating the adjustment and the facts (including a
statement of the consideration received or deemed to have
been received by the Company) on which such calculations are
based.
6.6 Record Date. If the Company sets a record date for the
purpose of entitling the holders of Common Stock to (a)
receive a dividend or other distribution payable in shares of
Common Stock, or (b) subscribe for or purchase shares of
Common Stock, then such record date will be deemed to be the
date of the issue or sale of the shares of Common Stock
deemed to have been issued or sold upon the declaration of
such dividend or the making of such other distribution or the
date of the granting of such right of subscription or
purchase, as the case may be.
6.7 Treasury Shares. The number of shares of Common Stock
outstanding at any given time will not include shares owned
or held by or for the account of the Company, and the
disposition of any such shares will be considered an issue or
sale of shares of Common Stock for the purpose of this
paragraph 6.
7. Status of Holder. This Option does not entitle the Holder hereof to any
voting rights or other rights as a shareholder of the Company.
- 5 -
<PAGE> 6
EXHIBIT 99.16
8. No Fractional Shares. The Company will not be required to issue stock
certificates representing fractions of shares of Common Stock.
9. Cash Payment. The Seller will have the right to satisfy this Option in cash
if as a result of continuing margin account liens or exercise of remedies by
margin account lenders, the Seller does not possess sufficient shares of Common
Stock on the date this Option is exercised or "in the money" exercisable
options sufficient to satisfy the Option exercise.
10. Notices. All notices, requests, consents and other communications hereunder
will be in writing and will be deemed to have been made when delivered or when
mailed first class postage prepaid or delivered to the telegraph office:
(i) if to the Holder of this Option, at the address of the Holder
as set forth below the Holder's signature hereon, or at such
other address as may have been furnished to the Seller in
writing by the Holder; or
(ii) if to the Seller, 6100 North Western, Oklahoma City, Oklahoma
73118, or at such other address as may have been furnished to
the Holder in writing by the Seller.
11. Headings. The headings of the paragraphs of this Option are inserted for
convenience only and will not be deemed to constitute a part of this Option.
12. Governing Law. This Option is being delivered and is intended to be
performed in the State of Oklahoma and will be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
such state.
13. Assignment. Subject to the conditions set forth herein, this Option and all
rights hereunder are transferable by the Holder, in whole or in part.
IN WITNESS WHEREOF, this Option has been executed effective
the 1st day of September, 1999.
/s/ Aubrey K. McClendon
------------------------------------
AUBREY K. McCLENDON, individually
(the "Seller")
TALBOT FAIRFIELD II LIMITED
PARTNERSHIP
By /s/ Breene M. Kerr
----------------------------------
Breene M. Kerr, General Partner
115 Bay Street
Easton, Maryland 21601
(the "Holder")
- 6 -
<PAGE> 1
EXHIBIT 99.17
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange
Act of 1934, as amended, the undersigned hereby agree to the joint filing with
each other of the attached statement on Schedule 13D and to all amendments to
such statement and that such statement and all amendments to such statement are
made on behalf of each of them.
IN WITNESS WHEREOF, the undersigned hereby execute this
agreement on December 16, 1999.
/s/ Aubrey K. McClendon
----------------------------------------------
AUBREY K. McCLENDON, an individual
CHESAPEAKE INVESTMENTS, an Oklahoma
Limited Partnership
By /s/ Aubrey K. McClendon
-------------------------------------------
Aubrey K. McClendon, General Partner
/s/ Tom L. Ward
----------------------------------------------
TOM L. WARD, an individual
TLW INVESTMENTS INC., an Oklahoma
corporation
By /s/ Tom L. Ward
-------------------------------------------
Tom L. Ward, President
