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EXHIBIT 3.1
CERTIFICATE OF DESIGNATION
OF
7% CUMULATIVE CONVERTIBLE PREFERRED STOCK
OF
CHESAPEAKE ENERGY CORPORATION
Pursuant to Section 1032(G) of the Oklahoma General Corporation Act
CHESAPEAKE ENERGY CORPORATION, an Oklahoma corporation (the
"Company"), does hereby certify that the following resolution was duly adopted
by action of the Board of Directors of the Company, with the provisions thereof
fixing the number of shares of the series, the dividend rate, and the optional
redemption prices being set by action of the Board of Directors of the Company:
RESOLVED that pursuant to the authority expressly granted to
and vested in the Board of Directors of the Company by the provisions of
Article IV, Section 1 of the Certificate of Incorporation of the Company, as
amended from time to time (the "Certificate of Incorporation"), and pursuant to
Section 1032(G) of the Oklahoma General Corporation Act, the Board of Directors
hereby creates a series of preferred stock of the Company and hereby states
that the voting powers, designations, preferences and relative, participating,
optional or other special rights of which, and qualifications, limitations or
restrictions thereof (in addition to the provisions set forth in the
Certificate of Incorporation which are applicable to the preferred stock of all
classes and series), shall be as follows:
1. Designation and Amount. There shall be created from the
10,000,000 shares of preferred stock, par value $0.01 per share, of the Company
authorized to be issued pursuant to the Certificate of Incorporation, a series
of preferred stock, designated as the "7% Cumulative Convertible Preferred
Stock," par value $0.01 per share (the "Preferred Stock"), and the number of
shares of such series shall be 4,600,000. Such number of shares may be
decreased by resolution of the Board of Directors; provided that no decrease
shall reduce the number of shares of Preferred Stock to a number less than that
of the shares of Preferred Stock then outstanding plus the number of shares
issuable upon exercise of options or rights then outstanding and, if any
portion of the over-allotment option granted by the Company pursuant to the
Purchase Agreement (as defined herein) expires unexercised, the Board of
Directors shall by resolution decrease the number of authorized shares of
Preferred Stock by the number of shares subject to the expired portion of such
over-allotment option. Any shares of Preferred Stock issued after the Issue
Date (as defined herein) pursuant to the over-allotment option granted by the
Company pursuant to the Purchase Agreement (as defined herein) shall, for all
purposes, including, without limitation, voting and dividend rights, be deemed
issued as of the Issue Date.
2. Definitions. As used herein, the following terms shall have
the following meanings:
2.1 "Accrued Dividends" shall mean, with respect to any
share of Preferred Stock, as of any date, the accrued and unpaid dividends on
such share from and including the most recent Dividend Payment Date (or the
Issue Date, if such date is prior to the first Dividend
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Payment Date) to but not including such date."Accumulated Dividends" shall
mean, with respect to any share of Preferred Stock, as of any date, the
aggregate accumulated and unpaid dividends on such share from the Issue Date
until the most recent Dividend Payment Date prior to such date. There shall be
no Accumulated Dividends with respect to any share of Preferred Stock prior to
the first Dividend Payment Date.
2.2 "Affiliate" shall have the meaning ascribed to it, on
the date hereof, under Rule 405 of the Securities Act of 1933, as amended.
2.3 "Board of Directors" shall mean the Board of
Directors of the Company or, with respect to any action to be taken by the
Board of Directors, any committee of the Board of Directors duly authorized to
take such action.
2.4 "Business Day" shall mean any day other than a
Saturday, Sunday or other day on which commercial banks in The City of New York
are authorized or required by law or executive order to close.
2.5 "Change of Control" shall mean any of the following
events: (i) the sale, lease or transfer, in one or a series of related
transactions, of all or substantially all of the Company's assets to any Person
or group (as such term is used in Section 13(d)(3) of the Exchange Act), other
than to Permitted Holders; (ii) the adoption of a plan relating to the
liquidation or dissolution of the Company; (iii) the acquisition, directly or
indirectly, by any Person or group (as such term is used in Section 13(d)(3) of
the Exchange Act as in effect on the original date of issuance of the Preferred
Stock), other than Permitted Holders, of beneficial ownership (as defined in
Rule 13d-3 under the Exchange Act as in effect on the original date of issuance
of the Preferred Stock, except that such Person shall be deemed to have
beneficial ownership of all shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after passage of
time) of more than 50% of the aggregate voting power of the Voting Stock of the
Company; provided, however, that the Permitted Holders beneficially own (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the
original date of issuance of the Preferred Stock), directly or indirectly, in
the aggregate a lesser percentage of the total voting power of the Voting Stock
of the Company than such other Person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the Board of Directors of the Company (for the purposes of this
definition, such other Person shall be deemed to beneficially own any Voting
Stock of a specified corporation held by a parent corporation, if such other
Person is the beneficial owner (as defined above), directly or indirectly, of
more than 35% of the voting power of the Voting Stock of such parent
corporation and the Permitted Holders beneficially own (as defined in this
proviso), directly or indirectly, in the aggregate a lesser percentage of the
voting power of the Voting Stock of such parent corporation and do not have the
right or ability by voting power, contract or otherwise to elect or designate
for election a majority of the Board of Directors of such parent corporation);
or (iv) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board of Directors or
whose nomination for election
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by the shareholders of the Company was approved by a vote of 66 2/3% of the
directors of the Company then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office. For purposes of the above
definition of "Change of Control," the term "Permitted Holders" means Aubrey K.
McClendon and Tom L. Ward and their respective Affiliates.
2.6 "Change of Control Date" shall mean the date on which
the Change of Control event occurs.
2.7 "Conversion Price" shall mean $6.95, subject to
adjustment as set forth in Section 9(c).
2.8 "Common Stock" shall mean the common stock, par value
$0.01 per share, of the Company, or any other class of stock resulting from
successive changes or reclassifications of such common stock consisting solely
of changes in par value, or from par value to no par value, or as a result of a
subdivision, combination, or merger, consolidation or similar transaction in
which the Company is a constituent corporation.
2.9 "Dividend Payment Date" shall mean February 1, May 1,
August 1 and November 1 of each year, commencing August 1, 1998.
2.10 "Dividend Record Date" shall mean, with respect to
each Dividend Payment Date, a date not more than 60 days nor less than 10 days
preceding a Dividend Payment Date, as shall be fixed by the Board of Directors.
2.11 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder.
2.12 "Issue Date" shall mean April 22, 1998, the original
date of issuance of the Preferred Stock.
2.13 "Liquidation Preference" shall mean, with respect to
each share of Preferred Stock, $50.
2.14 "Market Value" shall mean the average closing price
of the Common Stock for a ten consecutive trading day period on the NYSE or
such other national securities exchange or automated quotation system on which
the Common Stock is then listed or authorized for quotation or, if the Common
Stock is not so listed or authorized for quotation, an amount determined in
good faith by the Board of Directors to be the fair value of the Common Stock.
2.15 "NYSE" shall mean the New York Stock Exchange, Inc.
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2.16 "Optional Redemption Price Per Share" shall mean, as
of any date, the price at which the Company may, at its option, redeem one
share of the Preferred Stock, payable, at the Company's option, in cash, by
delivery of fully paid and nonassessable shares of Common Stock or a
combination thereof.
2.17 "Person" shall mean any individual, corporation,
general partnership, limited partnership, limited liability partnership, joint
venture, association, joint-stock company, trust, limited liability company,
unincorporated organization or government or any agency or political
subdivision thereof.
2.18 "Purchase Agreement" shall mean that certain Purchase
Agreement with respect to the Preferred Stock, dated as of April 17, 1998,
among the Company, Donaldson, Lufkin & Jenrette Securities Corporation, Morgan
Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., Lehman Brothers Inc. and
J.P. Morgan Securities Inc.
2.19 "Voting Rights Triggering Event" shall mean the
failure of the Company to pay dividends on the Preferred Stock with respect to
periods ending on more than six consecutive Dividend Payment Dates.
2.20 "Voting Stock" shall mean, with respect to any
Person, securities of any class or classes of Capital Stock in such Person
entitling the holders thereof (whether at all times or only so long as no
senior class of stock has voting power by reason of contingency) to vote in the
election of members of the Board of Directors or other governing body of such
Person. For purposes of this definition of "Voting Stock," "Capital Stock"
shall mean, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
partnership interests and any and all warrants, options and rights with respect
thereto (whether or not currently exercisable), including each class of common
stock and preferred stock of such Person.
3. Dividends.
3.1 The holders of shares of the outstanding Preferred
Stock shall be entitled, when, as and if declared by the Board of Directors out
of funds legally available therefor, to receive cumulative annual cash
dividends of $3.50 per share, payable quarterly in arrears (the "Dividend
Rate"). Dividends payable for each full dividend period will be computed by
dividing the Dividend Rate by four and shall be payable in arrears on each
Dividend Payment Date for the quarterly period ending immediately prior to such
Dividend Payment Date, to the holders of record of Preferred Stock at the close
of business on the Dividend Record Date applicable to such Dividend Payment
Date. Such dividends shall be cumulative from the Issue Date and shall accrue
on a day-to-day basis, whether or not earned or declared, from and after the
Issue Date. Dividends on the Preferred Stock which are not declared and paid
when due will compound quarterly on each Dividend Payment Date at the Dividend
Rate. Dividends payable for any partial dividend period shall be computed on
the basis of actual days elapsed over a 360-day year consisting of twelve
30-day months. Notwithstanding anything herein to the contrary, the initial
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Dividend Payment Date, which shall be for dividends accrued during the period
commencing on the Issue Date and ending on July 31, 1998, will be August 1,
1998.
3.2 Except to the extent specified herein, dividends paid
on the Preferred Stock shall be payable in cash.
3.3 No dividends or other distributions (other than a
dividend or distribution payable solely in stock of the Company ranking junior
to the Preferred Stock as to dividends and upon liquidation, including the
Common Stock, and other than cash paid in lieu of fractional shares) may be
declared, made or paid or set apart for payment on the Common Stock or upon any
other stock of the Company ranking junior to or pari passu with the Preferred
Stock as to dividends, and no Common Stock or any other stock of the Company
ranking junior to or pari passu with the Preferred Stock as to dividends or
upon liquidation, including the Preferred Stock, may be repurchased, exchanged,
redeemed or otherwise acquired for any consideration (or any money paid to or
made available for a sinking fund for the redemption of any shares of any such
stock) by the Company (except by conversion into or exchange for stock of the
Company ranking junior to the Preferred Stock as to dividends and upon
liquidation), nor may funds be set apart for payment with respect thereto,
unless full Accumulated Dividends shall have been or contemporaneously are paid
or declared and a sum sufficient for the payment thereof is set apart for such
payment on the Preferred Stock for all Dividend Payment Periods terminating on
or prior to the date of such declaration, payment, redemption, purchase or
acquisition. Notwithstanding the foregoing, if full dividends have not been
paid on the Preferred Stock or on any other preferred stock ranking pari passu
with the Preferred Stock as to dividends, dividends may be declared and paid on
the Preferred Stock and such other preferred stock so long as the dividends are
declared and paid pro rata so that the amounts of dividends declared per share
on the Preferred Stock and such other preferred stock will in all cases bear to
each other the same ratio that Accrued Dividends on the shares of Preferred
Stock and such other preferred stock bear to each other; provided, that if such
dividends are paid in cash on the other preferred stock, dividends will also be
paid in cash on the Preferred Stock.
3.4 Holders of shares of Preferred Stock shall not be
entitled to any dividends on the Preferred Stock, whether payable in cash,
property or stock, in excess of full cumulative dividends at the Dividend Rate
provided herein. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Preferred Stock
which may be in arrears (it being understood that the compounding of unpaid
dividends shall not constitute interest or money in lieu of interest).
3.5 The holders of shares of Preferred Stock at the close
of business on a Dividend Record Date will be entitled to receive the dividend
payment on those shares (except that holders of shares called for redemption on
a redemption date between the Dividend Record Date and the Dividend Payment
Date will be entitled to receive such dividend on such redemption date as
indicated in Section 3.1 hereof) on the corresponding Dividend Payment Date
notwithstanding the subsequent conversion thereof or the Company's default in
payment of the dividend due on that Dividend Payment Date. However, shares of
Preferred Stock surrendered
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for conversion during the period between the close of business on any Dividend
Record Date and the close of business on the day immediately preceding the
applicable Dividend Payment Date (except for shares called for redemption on a
redemption date during that period) must be accompanied by payment of an amount
equal to the dividend payable on the shares on that Dividend Payment Date. A
holder of shares of Preferred Stock on a Dividend Record Date who (or whose
transferee) tenders any shares for conversion on or before a Dividend Payment
Date will receive the dividend payable by the Company on the Preferred Stock on
that date, and the converting holder need not include payment in the amount of
such dividend upon surrender of shares of Preferred Stock for conversion.
Except as provided above and in Section 9(b) hereof, the Company shall make no
payment or allowance for unpaid dividends, whether or not in arrears, on
converted shares or for dividends on the shares of Common Stock issued upon
conversion.
4. Optional Redemption.
4.1 The Preferred Stock may not be redeemed prior to May
1, 2001. At any time on or after May 1, 2001, the Company may, at its sole
option, subject to Section 3.3, redeem, out of funds legally available
therefor, all or any part of the outstanding shares of Preferred Stock, in
cash, by delivery of fully paid and nonassessable shares of Common Stock or by
a combination thereof, upon not less than 30 days' nor more than 60 days'
notice provided in the manner specified in Section 5 hereof, during the
12-month periods commencing on May 1 of the years set forth below for the
amount per share of Preferred Stock set forth opposite such years, plus
Accumulated Dividends and Accrued Dividends thereon to the redemption date:
YEAR REDEMPTION PRICE PER SHARE
---- --------------------------
2001 $52.45
2002 52.10
2003 51.75
2004 51.40
2005 51.05
2006 50.70
2007 50.35
2008 and thereafter 50.00
4.2 If the Company elects to make redemption payments in
Common Stock, the number of shares of Common Stock to be delivered in exchange
for each share of Preferred Stock will be calculated by dividing the applicable
redemption price per share of Preferred Stock by the Market Value for the
period ending on the third Business Day immediately preceding the date the
notice of redemption is given. To the extent that the amount of the redemption
payment payable to a holder of Preferred Stock (in respect of all shares held
by such holder) does not equal a whole number of shares of Common Stock, such
fractional amount shall be paid in cash to such holder of Preferred Stock based
on the same Market Value. If any dividends on the
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Preferred Stock are in arrears, no shares of Preferred Stock shall be redeemed
unless all outstanding shares of Preferred Stock are simultaneously redeemed.
5. Procedure for Redemption.
5.1 In the event the Company shall elect to redeem shares
of Preferred Stock pursuant to Section 4 hereof, notice of such redemption
shall be given (i) by publication in a newspaper of general circulation in the
Borough of Manhattan, City and State of New York (if such publication shall be
required by applicable law, rule, regulation or securities exchange
requirement) or (ii) by first-class mail to each record holder of the shares to
be redeemed, at such holder's address as the same appears on the books of the
Company, in either case not less than 30 nor more than 60 days prior to the
redemption date. Each such notice shall state (i) the time and date as of
which the redemption shall occur; (ii) the total number of shares of Preferred
Stock to be redeemed and, if fewer than all the shares held by such holder are
to be redeemed, the number of such shares to be redeemed from such holder;
(iii) the redemption price (whether to be paid in cash or shares of Common
Stock or a combination thereof); (iv) the place or places where certificates
for such shares are to be surrendered for payment of the redemption price and
delivery of certificates representing shares of Common Stock (if the Company so
chooses); (v) that dividends on the shares to be redeemed will cease to accrue
on such redemption date unless the Company defaults in the payment of the
redemption price; and (vi) the name of any bank or trust company, if any,
performing the duties referred to in Section 5.3 below.
5.2 On or before any redemption date, each holder of
shares of Preferred Stock to be redeemed shall surrender the certificate or
certificates representing such shares of Preferred Stock to the Company, in the
manner and at the place designated in the notice of redemption and on the
redemption date, the full redemption price, payable in cash, fully paid and
nonassessable shares of Common Stock or a combination thereof, for such shares
of Preferred Stock shall be paid or delivered to the person whose name appears
on such certificate or certificates as the owner thereof, and the shares
represented by each surrendered certificate shall be returned to authorized but
unissued shares of preferred stock of any or no series. Upon surrender (in
accordance with the notice of redemption) of the certificate or certificates
representing any shares to be so redeemed (properly endorsed or assigned for
transfer, if the Company shall so require and the notice of redemption shall so
state), such shares shall be redeemed by the Company at the redemption price.
If fewer than all the shares represented by any such certificate are to be
redeemed, a new certificate shall be issued representing the unredeemed shares,
without costs to the holder thereof, together with the amount of cash, if any,
in lieu of fractional shares.
5.3 If a notice of redemption shall have been given as
provided in Section 5.1, dividends on the shares of Preferred Stock so called
for redemption shall cease to accrue, such shares shall no longer be deemed to
be outstanding, and all rights of the holders thereof as stockholders of the
Company with respect to shares so called of redemption (except for the right to
receive from the Company the redemption price) shall cease (including any right
to receive dividends otherwise payable on any Dividend Payment Date that would
have occurred after the time and date of redemption) either (i) from and after
the time and date fixed in the notice of
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redemption as the time and date of redemption (unless the Company shall default
in the payment of the redemption price, in which case such rights shall not
terminate at such time and date) or (ii) if the Company shall so elect and
state in the notice of redemption, from and after the time and date (which date
shall be the date fixed for redemption or an earlier date not less than 30 days
after the date of mailing of the redemption notice) on which the Company shall
irrevocably deposit in trust for the holders of the shares to be redeemed with
a designated bank or trust for the holders of the shares of Preferred Stock to
be redeemed with a designated bank or trust company doing business in the
Borough of Manhattan, City and State of New York, as paying agent, money or
such number of fully paid and nonassessable shares of Common Stock (or a
combination thereof) sufficient to pay at the office of such paying agent, on
the redemption date, the redemption price. Any money or shares of Common Stock
so deposited with any such paying agent which shall not be required for such
redemption shall be returned to the Company forthwith. Subject to applicable
escheat laws, any moneys so set aside by the Company and unclaimed at the end
of one year from the redemption date shall revert to the general funds of the
Company, after which reversion the holders of such shares so called for
redemption shall look only to the general funds of the Company for the payment
of the redemption price without interest. Any interest accrued on funds so
deposited shall be paid to the Company from time to time.
5.4 In the event that fewer than all the outstanding
shares of Preferred Stock are to be redeemed, the shares to be redeemed shall
be determined pro rata or by lot, as determined by the Company, except that the
Company may redeem such shares held by any holder of fewer than 100 shares (or
shares held by holders who would hold fewer than 100 shares as a result of such
redemption), as may be determined by the Company.
6. Change of Control.
6.1 Upon the occurrence of a Change of Control of the
Company, each holder of Preferred Stock shall, in the event that the Market
Value for the period ending on the Change of Control Date is less than the
Conversion Price, have a one-time option (the "Change of Control Option") to
convert all of such holder's shares of Preferred Stock into fully paid and
nonassessable shares of Common Stock at a conversion price equal to the greater
of (i) the Market Value for the period ending on the Change of Control Date and
(ii) 66 2/3 % of the Market Value for the period ended April 16, 1998. The
Change of Control Option must be exercised during the period of not less than
30 days nor more than 60 days (the actual number of days to be as specified in
the notice furnished in accordance with Section 6.2) commencing on the third
Business Day after notice of a Change in Control has been given by the Company
in accordance with Section 6.2. In lieu of issuing the shares of Common Stock
issuable upon conversion in the event of a Change of Control, the Company may,
at its sole option, make a cash payment equal to the Market Value determined
for the period ending on the Change of Control Date of the shares Common Stock
otherwise issuable.
6.2 In the event of a Change of Control, notice of such
Change of Control shall be given, within five Business Days of the Change of
Control Date, by the Company by first-
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class mail to each record holder of shares of Preferred Stock, at such holder's
address as the same appears on the books of the Company. Each such notice
shall state (i) that a Change of Control has occurred; (ii) the last day on
which the Change of Control Option may be exercised (the "Expiration Date");
(iii) the name and address of the paying agent; and (iv) the procedures that
holders must follow to exercise the Change of Control Option.
6.3 On or before the Expiration Date, each holder of
shares of Preferred Stock wishing to exercise the Change of Control Option
shall surrender the certificate or certificates representing the shares of
Preferred Stock to be converted, in the manner and at the place designated in
the notice described in Section 6.2, and on such date the cash or shares of
Common Stock due to such holder shall be delivered to the person whose name
appears on such certificate or certificates as the owner thereof and each
surrendered certificate shall be returned to authorized but unissued shares.
Upon surrender (in accordance with the notice described in Section 6.2 of the
certificate or certificates representing any shares to be so converted
(properly endorsed or assigned for transfer, if the Company shall so require
and the notice shall so state), such shares shall be converted by the Company
at the Conversion Price.
6.4 The rights of holders of Preferred Stock pursuant to
this Section 6 are in addition to, and not in lieu of, the rights of holders of
Preferred Stock provided for in Section 9 hereof.
7. Voting.
7.1 The shares of Preferred Stock shall have no voting
rights except as required by law or as set forth below:
(a) If and whenever at any time or times a Voting Rights
Triggering Event occurs, then the number of directors constituting the Board of
Directors shall be increased by two and the holders of shares of Preferred
Stock, voting separately as a class with any other preferred stock or
preference security having similar voting rights (the "Voting Rights Class"),
will be entitled at the next regular or special meeting of stockholders of the
Company to elect two directors of the Company to fill the newly created
directorships.
(b) Such voting rights may be exercised at a special
meeting of the holders of the shares of the Voting Rights Class, called as
hereinafter provided, or at any annual meeting of stockholders held for the
purpose of electing directors, and thereafter at each such annual meeting until
such time as all dividends in arrears on the shares of Preferred Stock shall
have been paid in full, at which time or times such voting rights and the term
of the directors elected pursuant to Section 7.1(a) shall terminate.
(c) At any time when such voting rights shall have vested
in holders of shares of the Voting Rights Class, a proper officer of the
Company may call, and, upon written request of the record holders of shares
representing twenty-five percent (25%) of the voting power of the shares then
outstanding of the Voting Rights Class, addressed to the Secretary of the
Company,
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shall call a special meeting of the holders of shares of the Voting Rights
Class. Such meeting shall be held at the earliest practicable date upon the
notice required for annual meetings of stockholders at the place for holding
annual meetings of stockholders of the Company, or, if none, at a place
designated by the Board of Directors. Notwithstanding the provisions of this
Section 7.1(c), no such special meeting shall be called during a period within
the 60 days immediately preceding the date fixed for the next annual meeting of
stockholders in which such case, the election of directors pursuant to Section
7.1(a) shall be held at such annual meeting of stockholders.
(d) At any meeting held for the purpose of electing
directors at which the holders of the Voting Rights Class shall have the right
to elect directors as provided herein, the presence in person or by proxy of
the holders of shares representing more than fifty percent (50%) in voting
power of the then outstanding shares of the Voting Rights Class shall be
required and shall be sufficient to constitute a quorum of such class for the
election of directors by such class. The affirmative vote of the holders of
shares of Preferred Stock constituting a majority of the shares of Preferred
Stock present at such meeting, in person or by proxy, shall be sufficient to
elect such director.
(e) Any director elected pursuant to the voting rights
created under this Section 7.1 shall hold office until the next annual meeting
of stockholders (unless such term has previously terminated pursuant to Section
7.1(b)) and any vacancy in respect of any such director shall be filled only by
vote of the remaining director so elected by holders of the Voting Rights
Class, or if there be no such remaining director, by the holders of shares of
the Voting Rights Class at a special meeting called in accordance with the
procedures set forth in this Section 7, or, if no such special meeting is
called, at the next annual meeting of stockholders. Upon any termination of
such voting rights, the term of office of all directors elected pursuant to
this Section 7 shall terminate.
(f) So long as any shares of Preferred Stock remain
outstanding, unless a greater percentage shall then be required by law, the
Company shall not, without the affirmative vote or consent of the holders of at
least 66 2/3% of the outstanding Preferred Stock voting or consenting, as the
case may be, separately as one class, (i) create, authorize or issue any class
or series of stock (or security convertible into stock) of the Company ranking
pari passu or senior to the Preferred Stock as to dividends, liquidation rights
or voting rights or (ii) amend the Certificate of Incorporation so as to affect
adversely the specified rights, preferences, privileges or voting rights of
holders of shares of Preferred Stock, including (x) increasing the authorized
number of shares of preferred stock and (y) issuing after the Issue Date any
shares of Preferred Stock in excess of such additional shares of Preferred
Stock as may be issued upon the exercise of the over-allotment option pursuant
to the Purchase Agreement. The holders of at least a majority of the
outstanding shares of Preferred Stock, voting separately as one class, may
waive compliance with any provision of this Certificate of Designation.
(g) In exercising the voting rights set forth in this
Section 7.1, each share of Preferred Stock shall be entitled to one vote.
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7.2 Except as set forth in Section 7.1, the Company may
create, authorize or issue any shares of Junior Stock or increase or decrease
the amount of authorized capital stock of any class other than the preferred
stock, without the consent of the holders of Preferred Stock constituting the
Voting Rights Class, and in taking such actions the Company shall not be deemed
to have affected adversely the rights, preferences, privileges or voting rights
of holders of shares of Preferred Stock.
8. Liquidation Rights.
8.1 In the event of any liquidation, dissolution or
winding-up of the Company, whether voluntary of involuntary, the holders of the
shares of Preferred Stock shall be entitled to receive out of the assets of the
Company available for distribution to stockholders up to the Liquidation
Preference plus Accumulated Dividends and Accrued Dividends thereon in
preference to the holders of, and before any distribution is made on, any other
class or series of stock of the Company ranking junior to the Preferred Stock
upon liquidation, including, without limitation, on any Common Stock.
8.2 Neither the sale, conveyance, exchange or transfer
(for cash, shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Company nor the merger or
consolidation of the Company into or with any other corporation, or the merger
or consolidation of any other corporation into or with the Company, shall be
deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary, for the purposes of this Section 8.
8.3 After the payment to the holders of the shares of
Preferred Stock of full preferential amounts provided for in this Section 8,
the holders of Preferred Stock as such shall have no right or claim to any of
the remaining assets of the Company.
8.4 In the event the assets of the Company available for
distribution to the holders of shares of Preferred Stock upon any liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled pursuant to Section 8.1, no such distribution shall be made on account
of any shares of any other stock of the Company ranking pari passu with the
Preferred Stock upon such liquidation, dissolution or winding up unless
proportionate distributable amounts shall be paid on account of the shares of
Preferred Stock, ratably, in proportion to the full distributable amounts for
which holders of all Preferred Stock and of any other stock of the Company
ranking pari passu with the Preferred Stock are entitled upon such liquidation,
dissolution or winding up.
9. Conversion.
(a) Each holder of Preferred Stock shall have the right,
at its option, exercisable at any time and from time to time from the Issue
Date to convert, subject to the terms and provisions of this Section 9, any or
all of such holder's shares of Preferred Stock. In such
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case, the shares of Preferred Stock shall be converted into such whole number
of fully paid and nonassessable shares of Common Stock as is equal, subject to
Section 9(g), to the product of the number of shares of Preferred Stock being
so converted multiplied by the quotient of (i) the Liquidation Preference plus
any Accumulated Dividends and any Accrued Dividends to and including the date
of conversion divided by (ii) the Conversion Price (as defined below) then in
effect, except that with respect to any share which shall be called for
redemption such conversion right shall terminate at the close of business on
the date of redemption of such share, unless the Company shall default in
performance or payment due upon exchange or redemption thereof. The Conversion
Price shall be $6.95, subject to adjustment as set forth in Section 9(c).
The conversion right of a holder of Preferred Stock shall be exercised
by the holder by the surrender to the Company of the certificates representing
shares to be converted at any time during usual business hours at its principal
place of business or the offices of its duly appointed Transfer Agent (as
defined in Section 10) to be maintained by it, accompanied by written notice
that the holder elects to convert all or a portion of the shares of Preferred
Stock represented by such certificate and specifying the name or names (with
address) in which a certificate or certificates for shares of Common Stock are
to be issued and (if so required by the Company or its duly appointed Transfer
Agent) by a written instrument or instruments of transfer in form reasonably
satisfactory to the Company or its duly appointed Transfer Agent duly executed
by the holder or its duly authorized legal representative and transfer tax
stamps or funds therefor, if required pursuant to Section 9(i). Immediately
prior to the close of business on the date of receipt by the Company or its
duly appointed Transfer Agent of notice of conversion of shares of Preferred
Stock, each converting holder of Preferred Stock shall be deemed to be the
holder of record of Common Stock issuable upon conversion of such holder's
Preferred Stock notwithstanding that the share register of the Company shall
then be closed or that certificates representing such Common Stock shall not
then be actually delivered to such person. Upon notice from the Company, each
holder of Preferred Stock so converted shall promptly surrender to the Company,
at any place where the Company shall maintain a Transfer Agent, certificates
representing the shares so converted, duly endorsed in blank or accompanied by
proper instruments of transfer. On the date of any conversion, all rights with
respect to the shares of Preferred Stock so converted, including the rights, if
any, to receive notices, will terminate, except only the rights of holders
thereof to (i) receive certificates for the number of shares of Common Stock
into which such shares of Preferred Stock have been converted; (ii) the payment
of any Accumulated Dividends or Accrued Dividends thereon; and (iii) exercise
the rights to which they are entitled as holders of Common Stock.
If the last day for the exercise of the conversion right shall
not be a Business Day, then such conversion right may be exercised on the next
preceding Business Day.
(b) When shares of Preferred Stock are converted pursuant
to this Section 9, all Accumulated Dividends and all Accrued Dividends (whether
or not declared or currently payable) on the Preferred Stock so converted to
(and not including) the date of conversion less any amounts payable by the
Company in cash pursuant to Section 3.5. hereof shall be immediately due and
payable, at the Company's option, (i) in cash; (ii) in a number of fully paid
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and nonassessable shares of Common Stock equal to the quotient of (A) the
amount of Accumulated Dividends and Accrued Dividends payable to the holders of
Preferred Stock hereunder, divided by (B) the Market Value for the period
ending on the date of conversion; or (iii) a combination thereof.
(c) The Conversion Price shall be subject to adjustment
as follows:
(i) In case the Company shall at any time or from
time to time (A) make a redemption payment or pay a dividend (or other
distribution) payable in shares of Common Stock on any class of capital stock
(which, for purposes of this Section 9(c) shall include, without limitation,
any dividends or distributions in the form of options, warrants or other rights
to acquire capital stock) of the Company (other than the issuance of shares of
Common Stock in connection with the payment in redemption for, of dividends on
or the conversion of Preferred Stock); (B) subdivide the outstanding shares of
Common Stock into a larger number of shares; (C) combine the outstanding shares
of Common Stock into a smaller number of shares; (D) issue any shares of its
capital stock in a reclassification of the Common Stock; or (E) pay a dividend
or make a distribution to all holders of shares of Common Stock (other than a
dividend or distribution paid or made to holders of shares of Preferred Stock
in the manner provided in Section 9(b) or a dividend or distribution subject to
Section 9(c)(ii)) pursuant to a stockholder rights plan, "poison pill" or
similar arrangement then, and in each such case, the Conversion Price in effect
immediately prior to such event shall be adjusted (and any other appropriate
actions shall be taken by the Company) so that the holder of any share of
Preferred Stock thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock that such holder would have owned
or would have been entitled to receive upon or by reason of any of the events
described above, had such share of Preferred Stock been converted into shares
of Common Stock immediately prior to the occurrence of such event. An
adjustment made pursuant to this Section 9(c)(i) shall become effective
retroactively (x) in the case of any such dividend or distribution, to the day
immediately following the close of business on the record date for the
determination of holders of Common Stock entitled to receive such dividend or
distribution or (y) in the case of any such subdivision, combination or
reclassification, to the close of business on the day upon which such corporate
action becomes effective.
(ii) In case the Company shall at any time or from
time to time issue to all holders of its Common Stock rights, options or
warrants entitling the holders thereof to subscribe for or purchase shares of
Common Stock (or securities convertible into or exchangeable for shares of
Common Stock) at a price per share less than the Market Value for the period
ending on the date of issuance (treating the price per share of any security
convertible or exchangeable or exercisable into Common Stock as equal to (A)
the sum of the price paid to acquire such security convertible, exchangeable or
exercisable into Common Stock plus any additional consideration payable
(without regard to any anti-dilution adjustments) upon the conversion, exchange
or exercise of such security into Common Stock divided by (B) the number of
shares of Common Stock into which such convertible, exchangeable or exercisable
security is initially convertible, exchangeable or exercisable), other than (I)
issuances of such rights, options or warrants if the holder of Preferred Stock
would be entitled to receive such rights, options or
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warrants upon conversion at any time of shares of Preferred Stock and (II)
issuances that are subject to certain triggering events (until such time as
such triggering events occur), then, and in each such case, the Conversion
Price then in effect shall be adjusted by dividing the Conversion Price in
effect on the day immediately prior to the record date of such issuance by a
fraction (y) the numerator of which shall be the sum of the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock issued or to be issued upon or as a result of the
issuance of such rights, options or warrants (or the maximum number into or for
which such convertible or exchangeable securities initially may convert or
exchange or for which such options, warrants or other rights initially may be
exercised) and (z) the denominator of which shall be the sum of the number of
shares of Common Stock outstanding on such record date plus the number of
shares of Common Stock which the aggregate consideration for the total number
of such additional shares of Common Stock so issued (or into or for which such
convertible or exchangeable securities may convert or exchange or for which
such options, warrants or other rights may be exercised plus the aggregate
amount of any additional consideration initially payable upon the conversion,
exchange or exercise of such security) would purchase at the Market Value for
the period ending on the date of conversion; provided, that if the Company
distributes rights or warrants (other than those referred to above in this
subparagraph (c)(ii)) pro rata to the holders of Common Stock, so long as
such rights or warrants have not expired or been redeemed by the Company, (y)
the holder of any Preferred Stock surrendered for conversion shall be entitled
to receive upon such conversion, in addition to the shares of Common Stock then
issuable upon such conversion (the "Conversion Shares"), a number of rights or
warrants to be determined as follows: (i) if such conversion occurs on or prior
to the date for the distribution to the holders of rights or warrants of
separate certificates evidencing such rights or warrants (the "Distribution
Date"), the same number of rights or warrants to which a holder of a number of
shares of Common Stock equal to the number of Conversion Shares is entitled at
the time of such conversion in accordance with the terms and provisions
applicable to the rights or warrants and (ii) if such conversion occurs after
the Distribution Date, the same number of rights or warrants to which a holder
of the number of shares of Common Stock into which such Preferred Stock was
convertible immediately prior to such Distribution Date would have been
entitled on such Distribution Date had such Preferred Stock been converted
immediately prior to such Distribution Date in accordance with the terms and
provisions applicable to the rights and warrants, and (z) the Conversion Price
shall not be subject to adjustment on account of any declaration, distribution
or exercise of such rights or warrants.
(iii) In case the Company shall at any time or from
time to time (A) make a pro rata distribution to all holders of shares of its
Common Stock consisting exclusively of cash (excluding any cash portion of
distributions referred to in paragraph (c)(i) above, or cash distributed upon a
merger or consolidation to which paragraph (g) below applies), that, when
combined together with (x) all other such all-cash distributions made within
the then-preceding 12 months in respect of which no adjustment has been made
and (y) any cash and the fair market value of other consideration paid or
payable in respect of any tender offer by the Company or any of its
subsidiaries for shares of Common Stock concluded within the then-preceding 12
months in respect of which no adjustment pursuant to this Section 9(c) has been
made, in the
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aggregate exceeds 15% of the Company's market capitalization (defined as the
product of the Market Value for the period ending on the record date of such
distribution times the number of shares of Common Stock outstanding on such
record date) on the record date of such distribution; (B) complete a tender or
exchange offer by the Company or any of its subsidiaries for shares of Common
Stock that involves an aggregate consideration that, together with (I) any cash
and other consideration payable in a tender or exchange offer by the Company or
any of its subsidiaries for shares of Common Stock expiring within the
then-preceding 12 months in respect of which no adjustment pursuant to this
Section 9(c) has been made and (II) the aggregate amount of any such all-cash
distributions referred to in clause (A) above to all holders of shares of
Common Stock within the then-preceding 12 months in respect of which no
adjustments have been made, exceeds 15% of the Company's market capitalization
on the expiration of such tender offer; or (C) make a distribution to all
holders of its Common Stock consisting of evidences of indebtedness, shares of
its capital stock other than Common Stock or assets (including securities, but
excluding those dividends, rights, options, warrants and distributions referred
to in paragraphs (c)(i) or (c)(ii) above), then, and in each such case, the
Conversion Price then in effect shall be adjusted by dividing the Conversion
Price in effect immediately prior to the date of such distribution or
completion of such tender or exchange offer, as the case may be,) by a fraction
(x) the numerator of which shall be the Market Value for the period ending on
the record date referred to below, or, if such adjustment is made upon the
completion of a tender or exchange offer, on the payment date for such offer,
and (y) the denominator of which shall be such Market Value less the then fair
market value (as determined by the Board of Directors of the Company) of the
portion of the cash, evidences of indebtedness, securities or other assets so
distributed or paid in such tender or exchange offer, applicable to one share
of Common Stock (but such denominator not to be less than one); provided,
however, that no adjustment shall be made with respect to any distribution of
rights to purchase securities of the Company if the holder of shares of
Preferred Stock would otherwise be entitled to receive such rights upon
conversion at any time of shares of Preferred Stock into shares of Common Stock
unless such rights are subsequently redeemed by the Company, in which case such
redemption shall be treated for purposes of this Section 9(c)(iii) as a
dividend on the Common Stock. Such adjustment shall be made whenever any such
distribution is made or tender or exchange offer is completed, as the case may
be, and shall become effective retroactively to a date immediately following
the close of business on the record date for the determination of stockholders
entitled to receive such distribution.
(iv) In the case the Company at any time or from
time to time shall take any action affecting its Common Stock (it being
understood that the issuance or sale of shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock, or any options,
warrants or other rights to acquire shares of Common Stock) to any Person at a
price per share less than the Conversion Price then in effect shall not be
deemed such an action), other than an action described in any of Section
9(c)(i) through Section 9(c)(iii), inclusive, or Section 9(g), then the
Conversion Price shall be adjusted in such manner and at such time as the Board
of Directors of the Company in good faith determines to be equitable in the
circumstances (such determination to be evidenced in a resolution, a certified
copy of which shall be mailed to the holders of the Preferred Stock).
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(v) Notwithstanding anything herein to the
contrary, no adjustment under this Section 9(c) need be made to the Conversion
Price unless such adjustment would require an increase or decrease of at least
1% of the Conversion Price then in effect. Any lesser adjustment shall be
carried forward and shall be made at the time of and together with the next
subsequent adjustment, if any, which, together with any adjustment or
adjustments so carried forward, shall amount to an increase or decrease of at
least 1% of such Conversion Price.
(vi) The Company reserves the right to make such
reductions in the Conversion Price in addition to those required in the
foregoing provisions as it considers advisable in order that any event treated
for Federal income tax purposes as a dividend of stock or stock rights will not
be taxable to the recipients. In the event the Company elects to make such a
reduction in the Conversion Price, the Company will comply with the
requirements of Rule 14e-1 under the Exchange Act, and any other securities
laws and regulations thereunder if and to the extent that such laws and
regulations are applicable in connection with the reduction of the Conversion
Price.
(d) If the Company shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter (and before the dividend or
distribution has been paid or delivered to stockholders) legally abandon its
plan to pay or deliver such dividend or distribution, then thereafter no
adjustment in the Conversion Price then in effect shall be required by reason
of the taking of such record.
(e) Upon any increase or decrease in the Conversion
Price, then, and in each such case, the Company promptly shall deliver to each
registered holder of Preferred Stock a certificate signed by an authorized
officer of the Company, setting forth in reasonable detail the event requiring
the adjustment and the method by which such adjustment was calculated and
specifying the increased or decreased Conversion Price then in effect following
such adjustment.
(f) No fractional shares or scrip representing fractional
shares of Common Stock shall be issued upon the conversion of any shares of
Preferred Stock. If more than one share of Preferred Stock shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on
the basis of the aggregate Liquidation Preference of the shares of Preferred
Stock so surrendered. If the conversion of any share or shares of Preferred
Stock results in a fraction, an amount equal to such fraction multiplied by the
last reported sale price of the Common Stock on the NYSE (or on such other
national securities exchange or authorized quotation system on which the Common
Stock is then listed for trading or authorized for quotation or, if the Common
Stock is not then so listed or authorized for quotation, an amount determined
in good faith by the Board of Directors to be the fair value of the Common
Stock) at the close of business on the trading day next preceding the day of
conversion shall be paid to such holder in cash by the Company.
(g) In the event of any capital reorganization or
reclassification or other change of outstanding shares of Common Stock (other
than a change in par value, or from par value to no par value, or from no par
value to par value), or in the event of any consolidation
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or merger of the Company with or into another Person (other than a
consolidation or merger in which the Company is the resulting or surviving
Person and which does not result in any reclassification or change of
outstanding Common Stock), or in the event of any sale or other disposition to
another Person of all or substantially all of the assets of the Company (other
than any assets not owned directly or indirectly by the Company and its
subsidiaries) (computed on a consolidated basis) (any of the foregoing, a
"Transaction"), each share of Preferred Stock then outstanding shall, without
the consent of any holder of Preferred Stock, become convertible only into the
kind and amount of shares of stock or other securities (of the Company or
another issuer) or property or cash receivable upon such Transaction by a
holder of the number of shares of Common Stock into which such share of
Preferred Stock could have been converted immediately prior to such Transaction
after giving effect to any adjustment event. The provisions of this Section
9(g) and any equivalent thereof in any such certificate similarly shall apply
to successive Transactions. The provisions of this Section 9(g) shall be the
sole right of holders of Preferred Stock in connection with any Transaction and
such holders shall have no separate vote thereon.
(h) In the event of any distribution by the Company to
its stockholders of all or substantially all of its assets (other than any
assets not owned directly or indirectly by the Company and its subsidiaries)
(computed on a consolidated basis), each holder of Preferred Stock will
participate pro rata in such distribution based on the number of shares of
Common Stock into which such holders' shares of Preferred Stock would have been
convertible immediately prior to such distribution.
(i) The Company shall at all times reserve and keep
available for issuance upon the conversion of the Preferred Stock such number
of its authorized but unissued shares of Common Stock as will from time to time
be sufficient to permit the conversion of all outstanding shares of Preferred
Stock, and shall take all action required to increase the authorized number of
shares of Common Stock if at any time there shall be insufficient unissued
shares of Common Stock to permit such reservation or to permit the conversion
of all outstanding shares of Preferred Stock.
(j) The issuance or delivery of certificates for Common
Stock upon the conversion of shares of Preferred Stock shall be made without
charge to the converting holder of shares of Preferred Stock for such
certificates or for any tax in respect of the issuance or delivery of such
certificates or the securities represented thereby, and such certificates shall
be issued or delivered in the respective names of, or in such names as may be
directed by, the holders of the shares of Preferred Stock converted; provided,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
such certificate in a name other than that of the holder of the shares of
Preferred Stock converted, and the Company shall not be required to issue or
deliver such certificate unless or until the Person or Persons requesting the
issuance or delivery thereof shall have paid to the Company the amount of such
tax or shall have established to the reasonable satisfaction of the Company
that such tax has been paid.
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10. Transfer Agent and Registrar. The duly appointed transfer
agent and registrar (the "Transfer Agent") for the Preferred Stock shall be UMB
Bank, N.A. The Company may, in its sole discretion, remove the Transfer Agent
with 10 days' prior written notice to the Transfer Agent; provided, that the
Company shall appoint a successor Transfer Agent who shall accept such
appointment prior to the effectiveness of such removal.
11. Transfer Restrictions. The shares of Preferred Stock have not
be registered under the Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, may not be offered, sold, pledged or otherwise
transferred except (1) to a Person whom the seller reasonably believes is a
qualified institutional buyer within the meaning of Rule 144A under the
Securities Act purchasing for its own account or for the account of a qualified
institutional buyer in a transaction meeting the requirements of Rule 144A, (2)
in a transaction meeting the requirements of Rule 144 under the Securities Act,
(3) in accordance with another exemption from the registration requirements of
the Securities Act (and based upon opinion of counsel acceptable to the
Company), (4) to the Company or any of its subsidiaries, or (5) pursuant to an
effective registration statement under the Securities Act, and in each case, in
accordance with all applicable securities laws of any State of the United
States. The Transfer Agent shall refuse to register the transfer of any shares
of Preferred Stock that violates this Section 11.
12. Other Provisions.
12.1 With respect to any notice to a holder of shares of
Preferred Stock required to be provided hereunder, neither failure to mail such
notice, nor any defect therein or in the mailing thereof, to any particular
holder shall affect the sufficiency of the notice or the validity of the
proceedings referred to in such notice with respect to the other holders or
affect the legality or validity of any distribution, rights, warrant,
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding-up, or the vote upon any such action. Any notice which
was mailed in the manner herein provided shall be conclusively presumed to have
been duly given whether or not the holder receives the notice.
12.2 Shares of Preferred Stock issued and reacquired will
be retired and canceled promptly after reacquisition thereof and, upon
compliance with the applicable requirements of Oklahoma law, have the status of
authorized but unissued shares of preferred stock of the Company undesignated
as to series and may with any and all other authorized but unissued shares of
preferred stock of the Company be designated or redesignated and issued or
reissued, as the case may be, as part of any series of preferred stock of the
Corporation, except that any issuance or reissuance of shares of Preferred
Stock must be in compliance with this Certificate of Designation.
12.3 The shares of Preferred Stock shall be issuable only
in whole shares.
12.4 All notices periods referred to herein shall commence
on the date of the mailing of the applicable notice.
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IN WITNESS WHEREOF, the Company has caused this certificate to be
signed and attested this 21st day of April, 1998.
CHESAPEAKE ENERGY CORPORATION
By: /s/ Aubrey K. McClendon
------------------------------------
Aubrey K. McClendon
Chairman of the Board and
Chief Executive Officer
Attest:
/s/ Janice A. Dobbs
- ---------------------
Janice A. Dobbs
Corporate Secretary
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AMENDMENT TO
CERTIFICATE OF INCORPORATION
OF
CHESAPEAKE ENERGY CORPORATION
(AFTER RECEIPT OF PAYMENT FOR STOCK)
The undersigned, Aubrey K. McClendon, as Chairman of the Board and Chief
Executive Officer, and Janice A. Dobbs, as Secretary of Chesapeake Energy
Corporation, a corporation organized and existing under the laws of the State of
Oklahoma (the "Corporation"), hereby certify as follows:
A. The name of the Corporation is Chesapeake Energy Corporation.
B. The name under which the Corporation was originally incorporated is
Chesapeake Oklahoma Corporation. The original Certificate of Incorporation
of the Corporation was filed with the Secretary of State of Oklahoma on
November 19, 1996, as amended by that certain Certificate of Ownership and
Merger Merging Chesapeake Energy Corporation into Chesapeake Oklahoma
Corporation filed with the Secretary of State of Oklahoma on December 23,
1996, effective December 31, 1996 (the "Certificate of Incorporation").
C. This Amendment to Certificate of Incorporation was duly adopted in
accordance with the provisions of Section 1077 of the General Corporation
Act of Oklahoma (the "Act") at the Corporation's annual meeting by a
majority of the outstanding capital stock of the Corporation entitled to
vote thereon. Written notice of the Corporation's annual meeting was given
to the stockholders of the Corporation in accordance with the provisions
of Section 1067 of the Act.
D. The Certificate of Incorporation is hereby amended as follows:
1. Amendment to Article IV. The first sentence of Article IV of the
Certificate of Incorporation starting with the words "The total number of shares
of capital stock . . . " is hereby deleted in its entirety and the following
sentence is substituted therefor:
The total number of shares of capital stock which the Corporation
shall have authority to issue is Two Hundred Sixty Million
(260,000,000) shares, consisting of Ten Million (10,000,000) shares
of Preferred Stock, par value $0.01 per share, and Two Hundred Fifty
Million (250,000,000) shares of Common Stock, par value $0.01 per
share.
21
IN WITNESS WHEREOF, this Amendment to Certificate of Incorporation was duly
adopted by the board of directors and the stockholders of the Corporation in
accordance with Section 1077 of the Act and executed this 9th day of December,
1997, by Aubrey K. McClendon, as Chairman of the Board and Chief Executive
Officer, and attested by Janice A. Dobbs, as Secretary.
/s/ Aubrey K. McClendon
----------------------------------------------
Aubrey K. McClendon, Chairman of the Board and
Chief Executive Officer
Attest:
/s/ Janice A. Dobbs
- -------------------------------
Janice A. Dobbs, Secretary
22
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
CHESAPEAKE ENERGY CORPORATION
INTO
CHESAPEAKE OKLAHOMA CORPORATION
CHESAPEAKE ENERGY CORPORATION, a Delaware corporation
(the "Corporation"), DOES HEREBY CERTIFY:
FIRST: That it owns 100% of the issued and outstanding
shares of the capital stock of CHESAPEAKE OKLAHOMA CORPORATION, an
Oklahoma corporation ("Chesapeake Oklahoma").
SECOND: That its board of directors at a meeting held on
the 15th day of October, 1996, determined to merge the Corporation
into CHESAPEAKE OKLAHOMA CORPORATION, and did adopt the following
resolutions:
WHEREAS, the officers of the Corporation recommended that
the Corporation reincorporate under the laws of the State
of Oklahoma and the Board of Directors, after discussing
the issue, has determined that the reincorporation is in
the best interest of the shareholders and the
Corporation; and
WHEREAS, to facilitate the Corporation's reincorporation,
the officers of the Corporation recommended that the
Corporation form Chesapeake Oklahoma Corporation
("Chesapeake Oklahoma") to be organized and exist under
and by virtue of the laws of the State of Oklahoma, with
an authorized capitalization of (i) 100 million shares of
common stock, $.01 par value ("Chesapeake Oklahoma Common
Stock"), 10 shares of which will be issued and
outstanding prior to the reincorporation, and (ii) 10
million shares of preferred stock, $.01 par value, no
shares of which will be issued and outstanding prior to
the reincorporation (all shares of Chesapeake Oklahoma
Common Stock outstanding prior to the reincorporation
will be held of record and beneficially by the
Corporation).
NOW, THEREFORE, BE IT RESOLVED, that the officers of the
Corporation be, and each of them hereby is, authorized
and directed to take any and all actions required to
reincorporate the Corporation under the laws of the State
of Oklahoma, including without limitation, the forming of
Chesapeake Oklahoma as a new transitory subsidiary, in
accordance with the recitations set forth herein, the
listing of the shares of Chesapeake Oklahoma on the New
York Stock Exchange, the registration of such shares with
the Securities and Exchange Commission and any state
securities agency, the assumption by Chesapeake Oklahoma
of all existing plans and registration statements of the
Corporation and such other actions as may be necessary to
the effect that the rights and obligations of Chesapeake
Oklahoma will be virtually identical to the rights and
obligations of the Corporation.
WHEREAS, after the formation of Chesapeake Oklahoma, the
Board of Directors deems it advisable and in the best
interests of the Corporation and its shareholders that
the Corporation merge with and into Chesapeake Oklahoma
pursuant to Section 1083 of the Oklahoma General
Corporation Act and Section 253 of the Delaware General
Corporation Law (the "Merger") and immediately thereafter
for Chesapeake Oklahoma to change its name to Chesapeake
Energy Corporation; and
WHEREAS, the Corporation and Chesapeake Oklahoma will
hereinafter be know as the "Constituent Corporations;"
and
WHEREAS, the Board of Directors deems it advisable and in
the best interests of the Corporation and its
shareholders that the Corporation be merged with and into
Chesapeake Oklahoma in the manner contemplated herein
(the "Plan") and recommend that the Merger and the Plan
be approved and adopted by the shareholders of the
Corporation;
NOW, THEREFORE, BE IT RESOLVED, that the Constituent
Corporations will be merged into a single corporation by
the Corporation merging with and into Chesapeake
Oklahoma, which will survive the Merger, pursuant to the
provisions of Section 1083 of the Oklahoma General
Corporation Act and Section 253 of the Delaware General
Corporation Law. Upon such Merger, the separate
existence of the Corporation will cease, and Chesapeake
Oklahoma will become the owner, without transfer, of all
rights and property of the Constituent Corporations, and
will be subject to all the liabilities of the Constituent
Corporations in the same manner as if Chesapeake Oklahoma
had itself incurred such liabilities all as provided by
the Oklahoma General Corporation Act.
23
FURTHER RESOLVED, that, on the Effective Date of the
Merger, which will be 5:00 p.m., CST, on December 31,
1996 (the "Effective Date of the Merger"), the
Certificate of Incorporation and Bylaws of Chesapeake
Oklahoma, as currently in effect, will be the Certificate
of Incorporation and Bylaws of Chesapeake Oklahoma until
they are duly amended, except that the name of Chesapeake
Oklahoma will be changed to Chesapeake Energy
Corporation.
FURTHER RESOLVED, that on the Effective Date of the
Merger, the directors and officers of the Corporation
will become the directors and officers of Chesapeake
Oklahoma until their successors are duly elected and
qualified.
FURTHER RESOLVED, that on the Effective Date of the
Merger (i) each share of Chesapeake Common Stock issued
and outstanding immediately prior to the Effective Date
of the Merger, by virtue of the Merger and without any
action on the part of the holder thereof, will be
converted into one share of Chesapeake Oklahoma Common
Stock, (ii) each share of Chesapeake Oklahoma Common
Stock issued and outstanding immediately prior to the
Effective Date of the Merger, by virtue of the Merger and
without any action on the part of the holder thereof,
will be cancelled and no payment will be made in respect
thereof, and (iii) upon surrender of any certificates
representing Chesapeake Common Stock, stock certificates
representing Chesapeake Oklahoma Common Stock will be
reissued to the holder thereof.
FURTHER RESOLVED, that this Plan will be submitted to the
shareholders of the Corporation for approval in the
manner provided by applicable Oklahoma and Delaware law.
After approval by the vote of the holders representing
not less than a majority of the issued and outstanding
shares of Chesapeake Common Stock entitled to vote on the
Merger, the officers are, and each of them hereby is,
authorized and directed to execute and file with the
Secretary of State of the States of Oklahoma and Delaware
a Certificate of Ownership and Merger and to make any
such further filings as may be necessary to effectuate
the Merger.
FURTHER RESOLVED, that the officers of the Corporation
are authorized and directed to execute any and all
agreements, documents or consents, and to take any and
all actions deemed necessary or desirable to permit the
consummation of the Merger as required by: (a) that
certain Indenture dated as of March 31, 1994, as
supplemented, among the Corporation, its subsidiaries
signatory thereto as Subsidiary Guarantors and United
States Trust Company of New York, as trustee; (b) that
certain Indenture dated as of May 15, 1995 among the
Corporation, its subsidiaries signatory thereto as
Subsidiary Guarantors and United States Trust Company of
New York, as trustee; and (c) that certain Indenture
dated as of April 1, 1996 among the Corporation, its
subsidiaries signatory thereto as Subsidiary Guarantors
and United States Trust Company of New York, as trustee.
The execution by the officers, or any one of them, of any
such document or agreement, or the doing by them of any
act in connection with the foregoing matter, will
conclusively establish their authority therefor from this
Board and from the Corporation and the approval,
ratification and adoption of any documents or agreements
executed and any action taken.
FURTHER RESOLVED, that the officers of the Corporation
be, and they hereby are, authorized and directed to
execute and deliver on behalf of the Corporation all
agreements and documents contemplated by the Plan,
together with any and all documents and related
agreements deemed necessary or desirable by said officer
or officers to effectuate the foregoing, each in
accordance with the recitations contained herein, and
containing such further and different terms and
conditions as said officer or officers will deem
necessary or desirable to accomplish the objectives set
forth herein, and further, that the execution by the
officers, or any one of them, of any such document or
agreement, or the doing by them of any act in connection
with the foregoing matter, will conclusively establish
their authority therefor from this Board and from the
Corporation and the approval, ratification and adoption
of any documents or agreements executed and any action
taken.
THIRD: The merger has been approved by a majority of the
outstanding stock of the Corporation entitled to vote thereon at a
meeting duly called and held after twenty days' notice of the
purpose of the meeting mailed to each such stockholder at his
address as it appears in the records of the Corporation.
24
FOURTH: Chesapeake Oklahoma hereby agrees that it may be
served with process in the state of Delaware in any proceeding for
enforcement of any obligation of any constituent corporation of
Delaware, as well as for enforcement of any obligation of
Chesapeake Oklahoma arising from the merger, including any suit or
other proceeding to enforce the right of any shareholders as
determined in appraisal proceedings pursuant to the provisions of
Section 262 of the Delaware General Corporation Law, and hereby
irrevocably appoints the Secretary of State of the State of
Delaware as its agent to accept service of process in any such suit
or other proceeding. The address to which a copy of such process
shall be mailed by the Secretary of State of Delaware is 6100 N.
Western Avenue, Oklahoma City, OK 73118.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be signed by its President and attested to by its
Secretary effective the 13th day of December, 1996.
CHESAPEAKE ENERGY CORPORATION
THOMAS L. WARD
Thomas L. Ward
President
ATTEST:
JANICE DOBBS
Janice Dobbs
Secretary
[Seal]
25
CERTIFICATE OF INCORPORATION
OF
CHESAPEAKE OKLAHOMA CORPORATION
ARTICLE I
Name
The name of the Corporation is:
CHESAPEAKE OKLAHOMA CORPORATION
ARTICLE II
Registered Office and Agent
The address of the Corporation's registered office in the
State of Oklahoma is 6104 N. Western Avenue, Oklahoma City,
Oklahoma 73118. The Corporation's registered agent at such address
is Janice A. Dobbs.
ARTICLE III
Purposes
The nature of the business and the purpose of the
Corporation shall be to engage in any lawful act or activity and to
pursue any lawful purpose for which a corporation may be formed
under the Oklahoma General Corporation Act (the "Act"). The
Corporation is authorized to exercise and enjoy all powers, rights
and privileges which corporations organized under the Act may have
as in force from time to time, including, without limitation, all
powers, rights and privileges necessary or convenient to carry out
the purposes of the Corporation.
ARTICLE IV
Capital Stock
The total number of shares of capital stock which the
Corporation shall have authority to issue is One Hundred Ten
Million (110,000,000) shares, consisting of Ten Million
(10,000,000) shares of Preferred Stock, par value $0.01 per share
and One Hundred Million (100,000,000) shares of Common Stock, par
value $0.01 per share. The preferences, qualifications,
limitations, restrictions and the special or relative rights in
respect of the shares of each class are as follows:
Section 1. Preferred Stock. The Preferred
Stock may be issued from time to time in one or more series. All
shares of Preferred Stock shall be of equal rank and shall be
identical, except in respect of the matters that may be fixed and
determined by the board of directors as hereinafter provided, and
each share of each series shall be identical with all other shares
of such series, except as to the date from which dividends are
cumulative. The board of directors hereby is authorized to cause
such shares to be issued in one or more series and with respect to
each such series prior to the issuance thereof to fix and determine
the designation, powers, preferences and rights of the shares of
each such series and the qualifications, limitations or
restrictions thereof.
26
The authority of the board with respect to each series
shall include but not be limited to, determination of the
following:
A. The number of shares
constituting a series, the distinctive designation of a
series and the stated value of the series, if different
from the par value;
B. Whether the shares of a series
are entitled to any fixed or determinable dividends, the
dividend rate (if any) on the shares, whether the
dividends are cumulative and the relative rights of
priority of dividends on shares of that series;
C. Whether a series has voting
rights in addition to the voting rights provided by law
and the terms and conditions of such voting rights;
D. Whether a series will have or
receive conversion or exchange privileges and the terms
and conditions of such conversion or exchange privileges;
E. Whether or not the shares of a
series are redeemable and the terms and conditions of
such redemption, including, without limitation, the
manner of selecting shares for redemption if less than
all shares are to be redeemed, the date or dates on or
after which the shares in the series will be redeemable
and the amount payable in case of redemption;
F. Whether a series will have a
sinking fund for the redemption or purchase of the shares
in the series and the terms and the amount of such
sinking fund;
G. The right of a series to the
benefit of conditions and restrictions on the creation of
indebtedness of the Corporation or any subsidiary, on the
issuance of any additional capital stock (including
additional shares of such series or any other series), on
the payment of dividends or the making of other
distributions on any outstanding stock of the Corporation
and the purchase, redemption or other acquisition by the
Corporation, or any subsidiary, of any outstanding stock
of the Corporation;
H. The rights of a series in the
event of voluntary or involuntary liquidation,
dissolution or winding up of the corporation and the
relative rights of priority of payment of a series; and
I. Any other relative,
participating, optional or other special rights,
qualifications, limitations or restrictions of such
series.
Dividends on outstanding shares of Preferred Stock shall
be paid or set apart for payment before any dividends shall be paid
or declared or set apart for payment on the common shares with
respect to the same dividend period.
27
If upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation the assets available
for distribution to holders of shares of Preferred Stock of all
series shall be insufficient to pay such holders the full
preferential amount to which they are entitled, then such assets
shall be distributed ratably among the shares of all series in
accordance with the respective preferential amounts (including
unpaid cumulative dividends, if any) payable with respect thereto.
Section 2. Common Stock. The Common Stock
shall be subject to the express terms of the Preferred Stock and
any series thereof. Each share of Common Stock shall be equal to
every other share of Common Stock. The holders of shares of Common
Stock shall be entitled to one vote for each share of such stock
upon all matters presented to the shareholders. Shares of Common
Stock authorized hereby shall not be subject to preemptive rights.
The holders of shares of Common Stock now or hereafter outstanding
shall have no preemptive right to purchase or have offered to them
for purchase any of such authorized but unissued shares. The
holders of shares of Common Stock now or hereafter outstanding
shall have no preemptive right to purchase or have offered to them
for purchase any shares of Preferred Stock, Common stock, or other
equity securities issued or to be issued by the Company.
Subject to the preferential and other dividend rights
applicable to Preferred Stock, the holders of shares of Common
Stock shall be entitled to receive such dividends (payable in cash,
stock or otherwise) as may be declared on the Common Stock by the
Board of Directors at any time or from time to time out of any
funds legally available therefor.
In the event of any voluntary or involuntary liquidation,
distribution or winding up of the Corporation, after distribution
in full of the preferential and/or other amounts to be distributed
to the holders of shares of Preferred Stock, the holders of shares
of Common Stock shall be entitled to receive all of the remaining
assets of the Corporation available for distribution to its
shareholders, ratably in proportion to the number of shares of
Common Stock held by them.
ARTICLE V
Limitation of Director Liability
A director of the Corporation shall not be personally
liable to the Corporation or its shareholders for damages for
breach of fiduciary duty as a director, except for personal
liability for (i) acts or omissions by such director not in good
faith or which involve intentional misconduct or a knowing
violation of law; (ii) the payment of dividends or the redemption
or purchase of stock in violation of Section 1053 of the Act; (iii)
any breach of such director's duty of loyalty to the Corporation or
its shareholders; or (iv) any transaction from which such director
derived an improper personal benefit.
28
ARTICLE VI
Certain Stock Purchases
Section 1. Certain Definitions. For the
purposes of this Article VI:
"Continuing Director" means any member of the Board of
Directors of the Corporation (the "Board") who is unaffiliated with
the Interested Shareholder and was a member of the Board prior to
the time that the Interested Shareholder became an Interested
Shareholder, and any successor of a Continuing Director who is
unaffiliated with the Interested Shareholder and is recommended to
succeed a Continuing Director by a majority of Continuing Directors
then on the Board.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Fair Market Value" means: (1) in the case of stock, the
highest closing sale price during the 30-day period ending on the
date in question of a share of such stock on a principal United
States securities exchange registered under the Exchange Act on
which such stock is listed or in the national market system
maintained by the National Association of Securities Dealers, Inc.,
or, if the stock is not listed on any such exchange or designated
as a national market system security, the highest closing bid
quotation with respect to a share of such stock during the 30-day
period ending on the date in question on the National Association
of Securities Dealers, Inc. Automated Quotations system or any
system then in use, or if no such quotations are available, the
fair market value on the date in question of a share of such stock
as determined by the Board in good faith.
"Interested Shareholder" shall have the meaning ascribed
to such term under Section 1090.3 of the Act.
Section 2. Vote Required for Certain Stock
Purchases.
A. Any direct or indirect purchase by the Corporation, or
any subsidiary of the Corporation, of any capital stock from a
person or persons known by a majority of the Continuing Directors
of the Corporation to be an Interested Shareholder who has
beneficially owned such capital stock for less than three years
prior to the date of such purchase, or any agreement in respect
thereof, at a price in excess of the Fair Market Value shall
require the affirmative vote of no less than 66 2/3% of the votes
cast by the holders, voting together as a single class, of all then
outstanding shares of capital stock, excluding for this purpose the
votes by the Interested Shareholder, unless a greater vote shall be
required by law.
B. Such affirmative vote shall not be required for a
purchase or other acquisition of securities of the same class made
on substantially the same terms to all holders of such securities
and complying with the applicable requirements of the Exchange Act,
and the rules and regulations thereunder (or any subsequent
provisions replacing the Exchange Act, rules or regulations).
Furthermore, such affirmative vote shall not be required for any
purchase effected on the open market and not the result of a
privately-negotiated transaction.
Section 3. Powers of Continuing Directors.
The Continuing Directors of the Corporation shall have the power
and duty to determine for the purposes of this Article VI, on the
basis of information known to them after reasonable inquiry,
whether a person is an Interested Shareholder, and the number of
shares of capital stock owned beneficially by any person.
29
ARTICLE VII
Board of Directors
Section 1. Management by Board of Directors.
The business and affairs of the Corporation shall be under the
direction of the Board of Directors.
Section 2. Number of Directors. The number
of Directors which shall constitute the whole board shall be not
less than three nor more than fifteen, and shall be determined by
resolution adopted by a vote of two-thirds (2/3) of the entire
board, or at an annual or special meeting of shareholders by the
affirmative vote of sixty-six and two-third percent (66 2/3%) of
the outstanding stock entitled to vote. No reduction in number
shall have the effect of removing any director prior to the
expiration of his term. The number of directors of the Corporation
may, from time to time, be increased or decreased in such manner as
may be provided in the bylaws of the Corporation.
Section 3. Classes of Directors; Election by
Shareholders; Vacancies. The directors shall be divided into three
classes, designated Class I, Class II and Class III. Each class
shall consist, as nearly as may be possible, of one-third of the
total number of directors constituting the entire Board of
Directors. The term of the initial Class I directors shall
terminate on the date of the 1997 annual meeting of shareholders;
the term of the initial Class II directors shall terminate on the
date of the 1998 annual meeting of shareholders and the term of the
initial Class III directors shall terminate on the date of the 1999
annual meeting of shareholders. At each annual meeting of
shareholders beginning in 1997, successors to the class of
directors whose term expires at that annual meeting shall be
elected for a three-year term. If the number of directors is
changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class as
nearly equal as possible, and any additional directors of any class
elected to fill a vacancy resulting from an increase in such class
shall hold office for a term that shall coincide with the remaining
term of that class, but in no case will a decrease in the number of
directors shorten the term of any incumbent director. A director
shall hold office until the annual meeting for the year in which
his term expires and until his successor shall be elected and shall
qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office. Any vacancy on the Board
of directors, however resulting, may be filled by a majority of the
directors then in office, even if less than a quorum, or by a sole
remaining director. Any director elected to fill a vacancy shall
hold office for a term that shall coincide with the term of the
class to which such director shall have been elected. No election
of directors need be by written ballot.
Notwithstanding the foregoing,
whenever the holders of any one or more classes or series of
Preferred Stock issued by the Corporation shall have the right,
voting separately by class or series, to elect directors at an
annual or special meeting of shareholders, the election, term of
office, filling of vacancies and other features of such
directorships shall be governed by the terms of the Certificate of
Designation attributable to such Preferred stock or the resolution
or resolutions adopted by the Board of Directors pursuant to
Section 2 of this Article VII applicable thereto, and such
directors so elected shall not be divided into classes pursuant to
this Article VII unless expressly provided by such terms.
30
ARTICLE VIII
Indemnity
Section 1. Third Party Claims. The
Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was
a director, officer, employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture or other enterprise against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interest of the Corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that his
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent shall not of itself
create a presumption that the person did not act in good faith and
in a manner which he reasonably believed to be in or not opposed to
the best interest of the Corporation and with respect to any
criminal action or proceeding had reasonable cause to believe that
his conduct was unlawful.
Section 2. Derivative Claims. The Corporation
shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses (including attorney's fees)
actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit, if he acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interest of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the
court in which such action or suit was brought shall determine,
upon application, that despite the adjudication of liability, but
in the view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which
the court shall deem proper.
Section 3. Expenses. Expenses, including fees
and expenses of counsel, incurred in defending a civil, criminal,
administrative or investigative action, suit or proceeding may be
paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such
amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Corporation as authorized herein.
Section 4. Insurance. The Corporation may
purchase (upon resolution duly adopted by the board of directors)
and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability.
31
Section 5. Reimbursement. To the extent that
a director, officer, employee or agent of, or any other person
entitled to indemnity hereunder by, the Corporation has been
successful on the merits or otherwise in defense of any action,
suit, or proceeding referred to herein or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him
in connection therewith.
Section 6. Enforcement. Every such person
shall be entitled, without demand by him upon the Corporation or
any action by the Corporation, to enforce his right to such
indemnity in an action at law against the Corporation. The right
of indemnification and advancement of expenses hereinabove provided
shall not be deemed exclusive of any rights to which any such
person may now or hereafter be otherwise entitled and specifically,
without limiting the generality of the foregoing, shall not be
deemed exclusive of any rights pursuant to statute or otherwise, of
any such person in any such action, suit or proceeding to have
assessed or allowed in his favor against the Corporation or
otherwise, his costs and expenses incurred therein or in connection
therewith or any part thereof.
ARTICLE IX
Amendments; Bylaws; Control Shares Act; Written Consent
Section 1. Amendments to Certificate of
Incorporation. Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, the affirmative vote
of the holders of at least sixty-six and two-thirds percent (66
2/3%) of the issued and outstanding stock having voting power,
voting together as a single class, shall be required to amend,
repeal or adopt any provision inconsistent with Articles V, VI,
VII, VIII and this Article IX of this Certificate of Incorporation.
Section 2. Bylaws. Prior to the receipt of
any payment for any of the Corporation's stock, the Bylaws of the
Corporation shall be adopted, amended or repealed by the
Incorporator. Thereafter, in furtherance and not in limitation of
the powers conferred by statute, the Board of Directors is
expressly authorized to adopt, repeal, alter, amend or rescind the
Bylaws of the Corporation. In addition, the Bylaws of the
Corporation may be adopted, repealed, altered, amended, or
rescinded by the affirmative vote of the holders of sixty-six and
two-thirds percent (66 2/3%) of the outstanding stock of the
Corporation entitled to vote thereon.
Section 3. Control Shares Act. The
Corporation shall not be subject to the Oklahoma Control Shares Act
as codified at Sections 1145-1155 of the Act. This election shall
be effective on the date of filing this Certificate.
Section 4. Action By Written Consent. Any
action required or permitted to be taken at a meeting of the
shareholders may be taken without a meeting, without prior notice
and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes which would
be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt
notice of the taking of corporate action without a meeting by less
than unanimous written consent shall be given to those shareholders
who have not consented in writing.
32
ARTICLE X
Incorporator
The name and mailing address of the Incorporator is as
follows:
W. Chris Coleman Tenth Floor
Two Leadership Square
Oklahoma City, OK 73102
I, the undersigned, for the purpose of forming a corpo-
ration under the laws of the State of Oklahoma, do make, file and
record this Certificate, and do certify that the facts herein
stated are true, and I have accordingly hereunto set my hand this
18th day of October, 1996.
W. CHRIS COLEMAN
W. Chris Coleman
33
CONSENT TO SIMILAR NAME
TO THE SECRETARY OF STATE OF THE STATE OF OKLAHOMA;
Pursuant to 18 O.S. 1986 Supp. Section 1141 or 54 O.S. Supp.
1984, Section 303, whichever is applicable, the undersigned
corporation or limited partnership hereby consents to the use of
the name or a similar name.
1. The name of the consenting corporation or limited partnership
is:
CHESAPEAKE LIMITED PARTNERSHIP
and is organized under the laws of the State of Oklahoma.
2. The proposed name of the corporation or limited partnership to
which this consent is given is:
CHESAPEAKE OKLAHOMA CORPORATION
and is organized or is to be organized under the laws of the State
of Oklahoma.
3. In the event the proposed corporation name is identical to the
consenting corporation's name the consenting corporation is about
to:
A. Change its name _____.
B. Cease to do business X.
C. Withdraw from Oklahoma _____.
D. Be wound up _____.
IN WITNESS WHEREOF, this corporation or limited partnership
has caused this consent to be executed this 14th day of November,
1996.
CHESAPEAKE OPERATING, INC., General
Partner
By TOM L. WARD
Tom L. Ward, Chief Operating
Officer
ATTEST:
JANICE A. DOBBS
Janice A. Dobbs, Secretary